This article discusses the federal Good Faith Estimate legislation, Indiana’s and Ohio’s state Good Faith Estimate legislation, federal hospital price transparency legislation and Colorado’s state hospital price transparency compliance legislation.
Background: Good Faith Estimate Legislation
The Good Faith Estimate (GFE) is part of the No Surprises Act (NSA), which is federal legislation designed to protect patients from surprise medical bills and went into effect January 1, 2022. The Department of Health and Human Services (HHS) with other federal departments created the GFE to protect self-pay and uninsured patients from receiving bills that are substantially more than expected.
The GFE is the estimated cost to obtain healthcare without using any type of health plan. The legislation requires virtually all healthcare facilities and providers to 1) notify self-pay/uninsured patients of their right to obtain a GFE of anticipated charges; and 2) provide GFEs of charges to self-pay/uninsured patients if the item or service is scheduled at your practice or the estimate is requested by a potential patient.
To learn more, see our blog post explaining the Good Faith Estimate.
Indiana’s Good Faith Estimate Legislation
The NSA went into effect in January 2022; the same time as Indiana’s most recent legislation around good faith estimates. Indiana’s legislation can be seen as a more burdensome add-on to the federal legislation, but in no way discounts federal regulations.
Like with the federal legislation, uninsured/self-pay patients can request an estimate from a provider or schedule an appointment with a provider to obtain a GFE.
Unlike the federal legislation which does NOT mandate GFEs for insured patients, all Indiana providers are required to provide GFEs to insured Indiana patients that request an estimate more than 5 days before scheduled services.
In Indiana, providers must explain, in writing, why a bill differs from an estimate if the bill is $100 (or 5%) more than the estimate. Federally, providers do not need to provide explanation, but federal legislation has what is called a dispute resolution process which allows patients to dispute bills that are at least $400 more than the estimate.
We encourage providers to keep note when unforeseen circumstances arise that will make the bill more than expected. HHS notes in the NSA that providers that experience unforeseeable circumstances will not be held accountable for the disputed amount, if circumstances are proven truly unforeseeable.
Ohio’s Good Faith Estimate Legislation
Much like Indiana’s legislation, Ohio’s legislation can be considered as an add-on to the federal GFE legislation. Since 2017, Ohio mandates that GFEs are required for all patients, regardless of insurance status.
If a patient is insured and wishes to use their health plan, the amount the insurance is estimated to pay and the amount the patient will pay out-of-pocket should be on the estimate issued to the patient.
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Background: Hospital Price Transparency Legislation
The Health Care Price Transparency Rule, which went into effect January 1, 2021 (with alterations still pending), requires hospitals to publish a public list of about 300 hospital charge items/services and display them on their website for easy price transparency. The standard charges listed are for shoppable services such as an ultrasound, a knee replacement or any other services that a consumer would have the time to research out.
In March 2021, a Health Affairs blog reported on their study of the 100 largest hospitals by bed count and determined that 65 of them were “unambiguously non-compliant” to the transparency rule between January and February 2021. Some hospitals posted no pricing data, some posted unsearchable pricing data, some included charge prices but not negotiated rates.
In regard to the unsearchable pricing data, the Wall Street Journal reported similar findings in April 2021 stating that some hospitals hide pricing data from online search results.
Noncompliance has become such a problem, in fact, that the Centers for Medicare and Medicaid Services (CMS) proposed new consequences for noncompliance for larger hospitals, reported NC Policy Watch in July 2021. Under these new rules, penalties increased from $300 per day to $10 per bed for those with more than 30 beds, with a maximum fee of $5,500 per day. Hospitals with fewer than 30 beds would remain with the same fine of $300 per day.
As of February 2022, CMS has sent approximately 342 warning notices to hospitals that have been found noncompliant with price transparency regulations since Jan. 1, 2021, though no monetary penalties have been issued to date, per Becker’s Hospital Review. The current maximum penalty for noncompliance is $2 million.
Colorado Hospital Transparency Compliance Legislation
As noncompliance to federal hospital price transparency legislation continues to be an issue, Colorado lawmakers decided to opt for a different penalty approach.
Instead of threatening to issue fines for noncompliance, this new Colorado bill, if passed, prohibits hospitals from initiating or pursuing collection actions against a patient or patient guarantor if the hospital was not in material compliance with federal hospital price transparency laws on the date(s) of service.
As of May 3, 2022, the bill had been re-revised but not passed. The bill is likely to see more changes before it can become a law.
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