Medical Price Transparency Marches On, Part I: The No Surprises Act Good Faith Estimate is the Next Domino

On Jan. 1, the initial provisions of the federal No Surprises Act, which passed as part of the Consolidated Appropriations Act of 2021, went into effect. As part of the ongoing effort to inform the public about the real costs incurred from medical treatment, the NSA continues the trend of the Centers for Medicare & Medicaid Services and Congress implementing medical price transparency measures — this time extending requirements to even more types of providers. While significant focus has been paid to the Act’s prohibition on surprise billing practices, the Good Faith Estimate is an additional price transparency measure that requires coordination among co-providers to furnish accurate, timely and comprehensive price estimates to uninsured and self-pay patients. Jan. 1, 2023, is the current enforcement date for provider groups to work collaboratively on furnishing comprehensive GFEs that include estimates from multiple providers involved in a single health care interaction. This provision of the NSA represents the next domino in the federal push to create complete price transparency in the medical market. This article covers the evolution of federal price transparency measures and highlights the enforcement trend that providers should begin preparing for now.

Federal Price Transparency Evolution

The modern push for price transparency in health care was seeded in the Affordable Care Act’s authorization for the Secretary of Health and Human Services to issue regulations requiring hospitals to disclose relevant prices. After several sets of regulations that yielded less than comprehensive public data, the federal Hospital Price Transparency Rule was finally issued. It laid out specific requirements for posting five separate price levels for each billing code, including prices for services that CMS deemed “shoppable.” It required all of this data to be published in machine-readable files and for the “shoppable” services to be displayed in a consumer-friendly format. These requirements took effect Jan. 1, 2021.

In 2020, HHS finalized the federal Transparency in Coverage Final Rule, which extended the price transparency push to health insurers. The TIC final rule imposed obligations on group health plans and health insurers in the group and individual markets. It required public disclosure of in-network negotiated rates, out-of-network charges and allowed amounts, and prescription drug pricing. On July 1, 2022, this requirement finally became effective. The regulations also laid out requirements for a price comparison tool to be made available to insured plan members in a phased implementation by Jan. 1, 2023, and Jan. 1, 2024.

The federal NSA represents the next step in the progression. Now, individual providers are required to furnish a GFE for all scheduled services for uninsured or self-pay patients. Like its predecessors, it contains a phased implementation schedule. But with CMS issuing the first civil monetary penalty for violations of the Hospital Price Transparency Rule last month on June 7, providers should plan for enforcement of the NSA in the not-too-distant future.

Good Faith Estimate Requirements Summary

As of Jan. 1, a “convening provider,” meaning the provider initiating or scheduling the primary item or service to be performed, is required to furnish an uninsured or self-pay patient with a GFE prior to all scheduled services, or when patients request it for services that they are evaluating. Notably, the GFE requirement covers a broader category of providers than the related surprise billing provisions. For the GFE requirement, a “provider” is “a physician or other health care provider who is acting within the scope of practice of that provider’s license or certification under applicable State law, including a provider of air ambulance services” as well as “an institution (such as a hospital or hospital outpatient department, critical access hospital, ambulatory surgical center, rural health center, federally qualified health center, laboratory, or imaging center) in any state in which state or applicable local law provides for licensing of such an institution.” The convening provider is responsible for determining if the patient is uninsured or self-pay at the time of scheduling or when services are being evaluated. Additionally, self-pay includes not only patients who choose not to use their coverage for the service or do not have coverage for that specific service, but also individuals enrolled in short-term, limited-duration health plans or other products not regulated as health insurance, such as health-sharing ministries. 

The GFE must include the diagnosis codes and expected charges for items or services reasonably expected to be provided for the primary service. The convening provider is responsible for listing associated items or services that they anticipate will require separate scheduling. If a qualifying patient’s billed charges from an individual provider are at least $400 greater than what was detailed in the GFE, then the patient may initiate a patient-provider dispute resolution process to settle the final bill amount.

Beginning Jan. 1, 2023, convening providers will be required to obtain from co-providers GFE information for services related to the primary service for which the convening provider is issuing the GFE. The co-provider is required to respond to the convening provider’s request within one business day. Any changes to the list of providers, services or cost estimates must be accompanied by a new GFE; otherwise, the patient may dispute billed charges that pass the $400 threshold in comparison to the original comprehensive GFE.

Compliance Difficulties and Enforcement Focus

On March 4, the American Hospital Association submitted comments to CMS highlighting concerns with the comprehensive GFE requirement, noting both the underestimated burden on frontline staff and the lack of existing technology to facilitate provider-to-provider communication. In June, both the AHA and other independent medical group associations urged CMS to delay enforcement of the comprehensive co-provider requirement in light of these burdens. In an April training webinar, CMS noted, during the intervening period of 2022 as technical solutions are being developed, “HHS encourages convening providers and convening facilities to include a range of expected charges for items or services reasonably expected to be provided and billed by co-providers and co-facilities.”

If current trends in CMS enforcement efforts are any indication, providers should be prepared for steady enforcement of the NSA’s requirements. On June 7, CMS levied the first civil monetary penalty against hospitals deemed to be out of compliance with federal Hospital Price Transparency Rule requirements. The agency fined Atlanta-based Northside Hospital more than $1 million for violations from two of its Atlanta facilities, where not all of the required services were listed in a single machine-readable file accessible to consumers. This enforcement action followed CMS issuing 352 warning notices to non-compliant facilities, with 157 requests for corrective action plans. To date, it is reported that some 171-plus hospitals have satisfactorily addressed those issues.

Conclusion

With federal enforcement of the initial price transparency regulations ramping up, enforcement attention will also focus on the NSA, which could implicate a variety of providers in addition to hospitals. In light of this recent enforcement and the July 1 go-live for initial TIC requirements, providers should engage in ongoing stakeholder efforts to identify technical and collaborative solutions to the comprehensive estimate requirements. Our next article will dive deeper into the broader enforcement risks, both from government agencies and plaintiffs groups, and discuss the opportunity for providers to proactively adapt as the enforcement climate heightens. The Robinson Bradshaw Health Care and Regulated Professions Practice Groups can help advise on this evolving compliance focus, including providing strategic counsel to national providers on the various and evolving federal and state legal requirements. We have experience with proactive measures (ranging from patient intake and disclosure review to contractual addendums) to anticipate and mitigate these important risk management and reputational considerations.

This article was prepared with the assistance of Samuel Gerstemeier, a rising 3L student at the University of Virginia School of Law.