No Surprises Act: Compliance Requirements for Surgical Practices
The No Surprises Act (Public Law 116-260, Division BB, Title I), effective January 1, 2022, protects patients from unexpected out-of-network medical bills. Surgical practices face specific compliance obligations around good faith estimates, notice and consent for out-of-network billing, and the independent dispute resolution process. This guide covers the regulatory requirements, documentation standards, and penalty structures.
Good Faith Estimates for Uninsured and Self-Pay Patients
Under 45 CFR Part 149.610, providers must give uninsured or self-pay patients a written good faith estimate (GFE) of expected charges for scheduled services. The GFE must include: the provider's name, NPI, and TIN; each CPT/HCPCS code for the planned service; the expected charge for each item; a diagnosis code (ICD-10) if available; and the expected date of service.
The GFE must be provided within 1 business day if the service is scheduled 3 to 9 days in advance, or within 3 business days if scheduled 10 or more days in advance. For services scheduled fewer than 3 days out, the GFE must be provided as soon as practicable. CMS guidance in the Federal Register (87 FR 52618) clarifies that verbal scheduling triggers the GFE requirement.
Co-providers and co-facilities (anesthesiologists, pathologists, surgical facilities) must submit their portion of the GFE to the convening provider within the same timeframe. The convening provider (typically the surgeon's office) is responsible for compiling and delivering the consolidated GFE to the patient.
If the actual billed amount exceeds the GFE by $400 or more, the patient may initiate the patient-provider dispute resolution (PPDR) process through CMS. The dispute resolution entity reviews the GFE and the final bill and issues a binding determination within 30 business days.
Notice and Consent for Out-of-Network Emergency and Non-Emergency Services
Balance billing is prohibited for emergency services at all facilities, regardless of network status (42 USC 300gg-111(a)). Out-of-network providers treating patients in emergency situations must accept the in-network cost-sharing amount as payment in full from the patient. The remaining balance is resolved between the provider and the insurer.
For non-emergency out-of-network services at in-network facilities (the 'surprise bill' scenario), providers may only balance bill if the patient signs a valid notice and consent form at least 72 hours before the service. The form must include: the provider's out-of-network status, a good faith estimate of charges, a statement that the patient is waiving surprise billing protections, and a list of in-network alternatives if available.
The notice and consent exception does not apply to: ancillary services (anesthesiology, pathology, radiology, neonatology, assistant surgeons, hospitalists, intensivists), emergency services of any kind, or services where no in-network provider is available at the facility. These categories are always protected under the balance billing ban.
Providers who balance bill in violation of the Act face civil monetary penalties of up to $10,000 per violation, enforced by CMS for ERISA plans and by state regulators for state-regulated plans. The HHS Office of Inspector General (OIG) investigates patterns of non-compliance.
Independent Dispute Resolution (IDR) Process
When the provider and insurer cannot agree on payment for a protected out-of-network service, either party may initiate the IDR process (45 CFR Part 149.510). The initiating party must send a written notice to the other party within 30 business days of receiving an initial payment or payment denial. A 30-day open negotiation period begins upon notice.
If open negotiation fails, either party has 4 business days to request a certified IDR entity. Each party submits a single final offer (baseball-style arbitration), and the IDR entity selects one. The certified IDR entity must issue a decision within 30 business days of selection.
The IDR entity must consider the qualifying payment amount (QPA, essentially the insurer's median in-network rate) as the primary factor, per the Consolidated Appropriations Act and subsequent court rulings in Texas Medical Association v. HHS (E.D. Tex. 2022, 2023, 2024). Additional factors include provider training and experience, market share, patient acuity, case complexity, teaching status, and prior contracted rates.
The losing party pays the IDR entity fee (currently $200 to $700 per dispute for single determinations, set annually by CMS). Batched determinations are available for multiple claims involving the same provider, same insurer, and same or similar service codes, reducing per-claim costs.
Compliance Checklist for Surgical Practices
Designate a staff member as the No Surprises Act compliance lead responsible for GFE generation, notice and consent documentation, and dispute resolution tracking. CMS does not require a specific title or credential, but a single point of accountability reduces errors.
Update your scheduling workflow to trigger GFE generation for every self-pay or uninsured patient. Automate the 1-business-day and 3-business-day delivery deadlines with calendar-based alerts. Document delivery method (hand delivery, mail, email, patient portal) and retain proof for at least 7 years, consistent with general medical record retention best practices.
Maintain a current list of your contracted insurance networks. Before scheduling, verify each patient's network status and document it. If you are out-of-network for the patient's plan, determine whether the service falls under the balance billing ban or qualifies for notice and consent. Train front-desk staff to identify and escalate these scenarios.
Track all IDR cases in a log including: date of service, CPT codes, QPA offered by the insurer, your submitted offer, IDR entity name, outcome, and fees paid. Analyze quarterly to identify patterns (specific insurers, specific CPT codes) that may indicate systemic underpayment or negotiation opportunities for future contract renewals.
Who is required to provide good faith estimates under the No Surprises Act?
All healthcare providers and facilities that schedule items or services for uninsured or self-pay individuals must provide GFEs. This includes physicians, surgeons, ASCs, hospitals, labs, imaging centers, anesthesiology groups, and any other provider involved in the scheduled service. The convening provider (the one who schedules the primary service) is responsible for coordinating the consolidated estimate from all co-providers.
What happens if my practice fails to provide a good faith estimate?
CMS can impose civil monetary penalties of up to $10,000 per violation for failure to provide a GFE. State regulators may impose additional penalties under state surprise billing laws. Beyond penalties, patients who do not receive a GFE can still file a PPDR dispute if their bill exceeds expected costs. Consistent failure to provide GFEs also creates audit risk during CMS compliance reviews.
Can I still balance bill patients if they sign a consent form?
Only in limited circumstances. The notice and consent process is available only for non-emergency, post-stabilization services where the provider is out-of-network at an in-network facility. The consent form must be signed at least 72 hours before the service and must meet specific content requirements under 45 CFR 149.410. Balance billing is never permitted for emergency services, ancillary services (anesthesiology, pathology, radiology), or situations where no in-network alternative exists.
How does the qualifying payment amount (QPA) affect IDR outcomes?
The QPA is the insurer's median contracted rate for the same or similar service in the same geographic area. Federal courts in Texas Medical Association v. HHS ruled that the QPA must be the primary consideration but cannot be the sole determinative factor. The IDR entity must also weigh provider qualifications, patient complexity, teaching status, and market dynamics. Providers who submit documentation supporting higher complexity or specialized training have stronger cases for offers above the QPA.
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This blog provides general information about healthcare compliance and aftercare best practices. It does not constitute legal, medical, or regulatory advice. Consult qualified professionals for guidance specific to your practice.
