Surprise medical bills can create significant challenges for healthcare providers, disrupting revenue cycles and straining patient relationships.
When patients receive unexpected charges for services they didn’t anticipate, payment disputes arise, cash flow stalls, and administrative burdens increase.
This frustrating scenario leaves many providers wondering how to fight surprise medical bills.
The No Surprises Act has fundamentally changed the landscape, requiring providers to master new protocols to handle surprise medical bills proactively rather than reactively.
This comprehensive guide will help you understand how to avoid surprise medical bills before they happen, focusing on Good Faith Estimates (GFEs) as your primary tool for compliance, transparency, and revenue protection.
What is a Surprise Medical Bill?
Here things become confusing. So, providers must clarify this.
Usually, a physician or medical facility sends medical bills to patients. So, for them, medical bills can be unexpected or extra charges for the services they consider they have not received.
So, for patients:
A surprise medical bill is an unexpected or unusual bill for out-of-network health care costs, often for services like emergency room care or when you don’t know the provider will be out-of-network.
On the flip side, for healthcare providers:
A surprise medical bill is an unexpected bill for out-of-network health care costs, often for services like emergency room care or when you don’t know the patient will be out-of-network.
How Surprise Bills Can Affect a Practice’s Revenue?
Surprise medical bills have a significant impact on the revenue cycle of a medical practice.
Because, the No Surprise Act comes into force in favor of patients.
As a result, things go against the physicians.
Here’s how surprise medical bills can disturb the revenue collection of medical practices:
- Reduction in Out-of-Network Revenue: Before the NSA, physicians could charge higher fees for out-of-network services, especially in emergency settings. Now, they are restricted to in-network rates, even if they are not contracted with the patient’s insurer. This has led to a direct drop in revenue for many practices.
- Increased Administrative Burden: These requirements have increased staff workload, documentation needs, and compliance costs, all of which strain financial resources
- Delays and Disputes in Reimbursement: The NSA mandates that insurers respond within 30 days with payment offers. However, many providers report delays or non-payment, even after winning IDR cases. This disrupts cash flow and creates backlogs in claims processing.
- Financial Risk and Bankruptcy: Some providers, particularly in emergency medicine and air transport, have faced financial hardship due to reduced payments and increased costs. Reports show a notable rise in healthcare bankruptcies, with the NSA cited as a contributing factor.
What is the No Surprises Act?
The No Surprise Act (NSA) is a federal law designed to protect patients from unexpected medical bills—especially those from out-of-network providers—in situations where they had no control or awareness of the provider’s network status.
According to AMA, this law was introduced in November 2020 and implemented in January 2021.
It Applies To:
- Patients with private insurance (employer-sponsored or individual plans).
- Healthcare providers and facilities, including hospitals, emergency departments, and air ambulance services.
- Excludes Medicare, Medicaid, TRICARE, VA, and Indian Health Services (these already have protections).
How the Surprise Act Protects Providers
The No Surprises Act (NSA) primarily protects patients from unexpected medical bills, but it also includes important protections and benefits for healthcare providers.
Here’s how it supports providers:
Independent Dispute Resolution (IDR) Process
When providers and insurers disagree on payment for out-of-network services, the NSA offers a structured arbitration process:
- Providers can submit disputes to an IDR entity.
- Both parties submit a payment offer, and the arbitrator chooses one.
- This process helps providers avoid underpayment by insurers and ensures a fair chance to negotiate.
Clearer Payment Expectations
The NSA requires insurers to:
- Pay out-of-network providers a “recognized amount” (usually based on median in-network rates).
- Do so within 30 days of receiving a clean claim. This reduces uncertainty and improves cash flow predictability for providers.
Protection from Patient Disputes
By banning balance billing in many scenarios, the NSA:
- Shields providers from direct financial disputes with patients.
- Reduces the risk of reputational damage and legal complaints.
- Encourages trust and transparency in the provider-patient relationship
Factors that Cause Surprise Bills
As a healthcare provider, you must be aware of triggers leading to surprise medical bills.
Below are the major factors that cause surprise bills:
Out-of-Network Cost Sharing
Doctors may provide services at hospitals or surgical centers that are in-network, but the doctors themselves (or specialists like anesthesiologists, radiologists, or pathologists) may be out-of-network.
Patients often assume all providers at an in-network facility are covered, leading to surprise when they receive a bill.
These are:
- Higher Deductibles, Copays, or Coinsurance: Patients may owe more because their health plan covers less for out-of-network services.
- No Coverage at All: In some plans (like HMOs or EPOs), out-of-network services might not be covered, leaving the patient responsible for the full amount.
Balance Billing
The provider bills the patient for the difference between their full charge and what the insurance plan paid.
Example: If a provider charges $1,000 and the insurer pays $250, the patient could be billed the remaining $750, on top of any copay or coinsurance.
Patients often don’t know the provider is out-of-network, especially in emergencies or when ancillary providers (like anesthesiologists or radiologists) are involved.
Here are some common scenarios, which a provider may face surprise bill disputes:
Emergency Room Visits: You may go to an in-network hospital, but be treated by out-of-network doctors.
- Air Ambulance Services: These are often out-of-network and extremely expensive.
- Planned Procedures: Even in-network surgeries can involve out-of-network specialists without the patient’s knowledge
How to Avoid Surprise Medical Bills?
As a healthcare provider, preventing surprise medical bills isn’t just about patient satisfaction—it’s a legal requirement under the No Surprises Act. Good Faith Estimates (GFEs) are your primary tool for ensuring transparency and compliance. By implementing proper GFE protocols, you protect both your patients from financial stress and your practice from disputes and penalties. Let’s explore exactly how to master each aspect of GFE requirements to create a smoother billing process for everyone involved.
Understand GFE Requirements
Mastering GFE requirements is the foundation of your compliance strategy. These rules aren’t optional—they’re federal mandates to protect uninsured and self-pay patients. When you thoroughly understand these requirements, you can confidently provide accurate estimates while avoiding potential violations that could lead to disputes or penalties.
- Identify all uninsured and self-pay patients during scheduling—these individuals are legally entitled to receive a GFE before services are rendered.
- Provide GFEs automatically for all scheduled services when patients lack insurance or choose to self-pay, regardless of service complexity.
- Include all required elements like patient’s name and DOB, clear service description, itemized list of expected charges (including facility fees, labs, imaging), names of any co-providers, and a disclaimer about potential cost variations.
- Adhere strictly to timelines and deliver GFEs within one business day for services scheduled 3+ business days in advance, and within three business days for services scheduled 10+ business days in advance.
Communicate Early and Clearly
Effective communication about GFEs builds trust with patients and prevents misunderstandings that could lead to billing disputes later. When you explain the purpose and benefits of GFEs upfront, patients feel more informed and confident in their healthcare decisions. This transparency not only satisfies regulatory requirements but also strengthens your patient relationships.
- Screen every patient for insurance status during initial contact—ask directly: “Do you have insurance, or will you be self-paying for these services?”
- Explain GFEs in simple, jargon-free language, because it is a written estimate of your expected costs and helps avoid unexpected bills.
- Document all conversations about GFEs in the patient’s record, including when the estimate was offered and whether the patient had questions.
- Create standardized scripts for front-desk staff to ensure consistent communication about GFEs across your practice.
Use Standardized Templates
Consistency in your GFE documentation is crucial for both compliance and efficiency. Standardized templates ensure that all required information is included in a format that patients can easily understand. When your entire team uses the same template, you reduce errors, save time, and create a professional experience that reflects well on your practice.
- Download and implement the official CMS GFE template as your foundation—this ensures compliance with all regulatory requirements.
- Customize the template with your practice’s branding (logo, contact information) while maintaining the core structure and required fields.
- Train all staff who create or handle GFEs on proper template usage, including how to itemize costs accurately and include all necessary provider information.
- Conduct regular audits of completed GFEs to ensure consistent application of the template across all departments and staff members.
Deliver Estimates Promptly
Timely delivery of GFEs isn’t just a regulatory requirement—it’s a critical step in the patient care journey. When patients receive estimates promptly, they have adequate time to review costs, ask questions, and make informed decisions about their care. Your efficiency in this process demonstrates respect for patients’ financial planning needs and helps prevent last-minute cancellations due to cost concerns.
- Send GFEs via secure communication channels only—use encrypted email, your patient portal, or provide printed copies directly to patients.
- Implement a tracking system to monitor GFEs, including automatic confirmations for electronic deliveries.
- Maintain detailed records of all GFE deliveries, including method, date, time, and any patient responses or acknowledgments.
- Set up internal alerts to flag cases where GFE delivery deadlines are approaching to ensure compliance with regulatory timeframes.
Update Estimates When Needed
Healthcare plans can evolve, and when they do, your GFEs must evolve too. Keeping estimates current isn’t just about accuracy—it’s about maintaining trust with your patients. When services change significantly, providing updated estimates demonstrates your commitment to transparency and helps prevent the surprise bills.
- Issue revised GFEs immediately whenever there are significant changes to the planned services, such as additional procedures, different diagnostic tests, or involvement of new providers.
- Document the specific reasons for any changes to the original estimate, including clinical justification and patient requests when applicable.
- Obtain patient acknowledgment of revised estimates, when possible, either through signature or electronic confirmation.
- Review all scheduled services 24-48 hours before appointments to identify any potential changes that require an updated GFE.
Never Bill More Than the GFE (Unless justified)
This is the most critical rule of the No Surprises Act: your final bill should generally not exceed the GFE amount. When patients receive a bill that matches their estimate, trust is maintained and disputes are avoided. However, when circumstances legitimately require billing beyond the forecast, proper documentation and communication become essential to protect both your patients and your practice.
- Ensure final bills align with GFE amounts unless there’s documented justification for the difference, such as a true medical emergency or patient-requested additional services.
- Be aware that bills exceeding the GFE by $400 or more trigger the Patient-Provider Dispute Resolution (PPDR) process, which can be time-consuming and costly for your practice.
- Contact patients proactively if you anticipate costs will exceed the GFE—explain the situation, discuss options, and seek agreement before finalizing the bill.
- Implement a review process for all bills that exceed GFEs to ensure proper documentation and compliance before sending them to patients.
Final Thoughts
Preventing surprise medical bills is no longer optional—it’s essential for your practice’s financial health and regulatory compliance.
By implementing the GFE strategies, you now have a comprehensive roadmap to handle surprise medical bills before they disrupt your revenue cycle.
When patients understand costs upfront through transparent estimates, disputes decrease, trust increases, and payments flow more predictably.
At the end of the day, your stress and frustration go away, and you can handle your practice’s billing and RCM operations efficiently.
