Does the No Surprises Act Apply to Aesthetic Services?

In a chat thread with colleagues on the American Society of Plastic Surgeons’ app message board, there was a question about providing Good Faith Estimates (GFE) for aesthetic procedures under the No Surprises Act (NSA). I said I didn’t think GFEs were required for aesthetic procedures but a representative from the ASPS commented that aesthetic procedures are potentially subject to the requirements of the Good Faith Estimate as specified in the No Surprises Act. Why the difference of opinion regarding this legislation?

The No Surprises Act

First, some background. In December of 2020, Congress passed the No Surprises Act as part of a larger COVID relief package. It went into effect on January 1, 2022. The No Surprises Act, as the name implies, had one overarching goal: to reduce the occurrence of surprise bills after a procedure.

There are the surprise bills that some might receive after receiving out-of-network care in an in-network facility during an emergency. For example, you’re taken to the hospital in an ambulance after a bicycle accident. You get X-rays that show a broken arm. The ER doctor places you in a splint and you go home to follow up with an orthopedic surgeon. Weeks later, you receive bills for the hospital, ER physician, X-ray, radiologist’s reading of the X-ray, and the ambulance ride. Your insurance covers the bills from the hospital, ER physician, and the X-ray because they are in your network of coverage. However, the bill from the radiologist and the ambulance service seems surprisingly high, and not covered by your insurance. That’s because both those were outside your network of coverage and you don’t have out-of-network (OON) benefits on your insurance plan. Because these are both out of network (Surprise!), you have to pay the full cost out of pocket.

Even if a patient has OON benefits, their cost sharing, i.e., the amount they’re responsible for, would be higher for the OON services. So for example, instead of a $1,500 deductible, $8,000 out-of-pocket maximum and 40 percent co-insurance for in-network services, your OON cost sharing would go up to $3,000, $16,000 and 50 percent respectively.

Out-of-Network Surprise Bills

The NSA is meant to address these issues. It has outlawed surprise bills in the case where you receive out-of-network (OON) care in an emergency situation. As the consumer, you still must pay your deductible, out of pocket maximum, and co-insurance, but now the OON bill will be switched from the higher OON rate to the presumably lower “median in-network rate.” So rather than the insurance company being required to pay the higher OON rate, or the patient paying it themselves, the doctor or provider who sent the bill will now get the lower in-network rate. That decision to switch to the lower median in-network rate is the subject of several lawsuits¹ at this time.

As an aside, the ambulance ride taken in the scenario above, which was also considered OON, will still have to be paid at the OON rate. Ground ambulance services were excluded from the No Surprises Act² ostensibly because of the complexity of bureaucracy surrounding ambulances that are sometimes owned by a city or county. In other words, the government passed a bill that excluded a government entity from its own regulations. So in addition to being able to receive higher OON rates, ground ambulances that are owned by the county or city will also continue to receive tax revenue! Air ambulances which are typically private were included in the NSA.

The other type of OON bill that was outlawed in the Act relates to receiving non-emergent care from an out-of-network provider at an in-network facility. An example of this is a woman giving birth at an in-network hospital, having her baby delivered by an in-network ObGyn, but receiving her epidural from an OON anesthesiologist. The anesthesiologist’s bill will now be paid at the lower in-network rate due to the recent enactment of the No Surprises Act.

There are exceptions to the OON billing restrictions. In the case of a plastic surgeon who performs breast reconstruction as an out of network provider, they can still bill at the OON rate if they 1.) receive consent from the patient and 2.) provide an estimate of the OON costs the patient should expect. An example of the consent and estimate the patient needs to sign can be found online at BuildMyBod.com.³

Good Faith Estimate

The other category of the NSA, and the one that relates to the difference of opinion on the ASPS message board, is the Good Faith Estimate (GFE) requirement. This is separate from the OON billing protections discussed above. The GFE relates to providing an estimate to patients who are either uninsured (self-pay) or not utilizing their insurance.

Before we go on, a quick answer to the question of why someone would choose to pay cash and not submit a claim to their insurer. Sometimes the cash, out-of-pocket cost for a service is less than the rate the insurance company negotiates on behalf of the patient. It’s why an MRI at an outpatient facility may cost $350 if you pay cash versus thousands of dollars if you used your insurance. The patient may erroneously think it doesn’t matter if the negotiated rate is more because their insurance will pay for it, but typically they’re still on the hook because they haven’t met their deductible yet.

Requirements of the Good Faith Estimate

If a patient is uninsured (self-pay) or doesn’t want to use their insurance, by law, the provider must provide an estimate that has various elements included in it. Aside from basic demographic information and all expected costs of the planned services to be rendered (physician fee, anesthesia fee, OR fee, ancillary fees), the estimate is required to have ICD-10 codes (e.g., Z41.1–Encounter for cosmetic surgery), CPT codes (leave blank if there’s no corresponding CPT code for a procedure), NPI and EIN numbers, and verbiage that explains the dispute resolution process if their actual costs vary from the estimated costs by greater than $400. You can see an example of a Good Faith Estimate online at BuildMyBod.com.⁴

What was the intention of the new regulation?

Of course, there’s nothing wrong with providing consumers with full price transparency prior to a procedure, medically necessary or cosmetic. I have a price estimator on my website⁵ for this purpose. But did the government intend to apply all of these other regulations to aesthetic services?

According to the ASPS, the answer is potentially “yes,” because of a gray area in the regulations. I believe their opinion arises from this official Center for Medicare and Medicaid Services (CMS) document⁶ that a Good Faith Estimate is required for all uninsured (or self-pay) individuals. That phrase, “uninsured (or self-pay),” is used 103 times in the document. The term cosmetic or aesthetic is never used. However, a liberal reading of the regulation would suggest “self-pay” not only refers to the uninsured or those forgoing insurance, but also patients who pay out of pocket for services not covered by insurance, as in the case of cosmetic procedures.

Within the jargon of medical billing, self-pay does not refer to patients paying for cosmetic services. But according to the letter of the law, cosmetic services are currently included in “self-pay.” While CMS may clarify otherwise in the future, there are several requirements that appear to be clear and apply to everyone. These include the posting of notices at the front desk and on the homepage of the practice’s website that alert the patient to their protections against surprise bills and the right to request and receive a Good Faith Estimate.^7,8

Make no mistake, whatever the outcome of the lawsuits that address the median in-network rate or the meaning of self-pay, the end goal of the NSA and other Trump-era price transparency rules is clear. It is to remove the veil of price opacity from the health care sector and treat it like every other segment of the economy so consumers will know their personal financial responsibility before receiving any good, service or treatment.

1. https://www.healio.com/news/primary-care/20220105/no-surprises-act-faces-multiple-lawsuits-against-billing-dispute-provision

2. https://www.nytimes.com/2020/12/22/upshot/ground-ambulances-left-off-surprise-medical-bill-law.html

3. https://www.buildmybod.com/blog/estimate-and-consent-out-of-network-billing-in-non-emergency-situations/

4. https://www.buildmybod.com/blog/good-faith-estimate-template-uninsured-self-pay-possibly-aesthetic/

5. http://realdrbae.com/pricing

6. https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Guidance-Good-Faith-Estimate-Patient-Provider-Dispute-Resolution-Process-for-Providers-Facilities-CMS-9908-IFC.pdf

7. https://www.buildmybod.com/blog/standard-notice-regarding-patient-protections-against-surprise-billing/

8. https://www.buildmybod.com/blog/notice-right-to-receive-good-faith-estimate/

9. http://www.buildmybod.com/