No Surprises Act, Good Faith Estimates, And How to Prepare for Audits
In a recent podcast episode, Breakthrough Founder Chad Madden, MSPT speaks with Mary Daulong, PT, CHC, CHP, President at Business & Clinical Management Services, Inc. (BCMS). Chad and Mary discuss what you need to know about the “No Surprises Act” and Good Faith Estimates. Mary and her team have worked hard on providing resources to help PT practice owners comply and thrive in the new regulatory landscape.
Who is Mary Daulong?
Chad: Mary is the Queen of Compliance. She has more than four decades of private physical therapy practice experience. And I want to compliment and thank you for keeping us legal, compliant, and ethical.
Today, we’re talking about the “No Surprises Act,” which became effective as of January 1st, 2022. It’s being discussed in all of the online group forums at essentially every physical therapy or healthcare provider website that I’m on. There’s a lot of confusion about this new legislation amongst owners. Can you give us a summary of what it is?
Part 1 of No Surprises Act: Disclose Out-of-Network Charges at In-Network Care Facilities
Mary: Well, the “No Surprises Act” was a surprise, right? When it was first contemplated, it really was to protect patients from having “surprise” bills. Say they went to an in-network hospital for surgery, but there was an assistant surgeon or maybe an anesthesiologist there who wasn’t in-network. And as a result —surprise — the patient gets billed at out-of-network rates. That’s what part one of the “No Surprises Act” addresses, and I’m in favor of that. But it has kind of ballooned from there.
Part 2 of No Surprises Act: Application to Private Physical Therapy Practices
Mary: The idea in itself is good, but the dispute resolution system really doesn’t lean towards the provider. So if the patient complains about the bill in this process then you have arbitration, where someone decides what the fair amount is that the patient should pay. And that doesn’t always turn out to be favorable for the provider, as you might guess. Also, we have a lot of PTs who are out-of-network because they accept cash, and we don’t have any clarification about whether this will implicate them, but it could.
On “Good Faith Estimates”
Mary: This is the part where we’re all pulling our hair out and saying, you gotta be kidding me. Recently, I got a text from one of my dear clients that said, “I’m just going to sell my practice. I provide the services, I do the billing, I do all the administrative tasks. I can’t add this to my things to do.” And we’re hearing this all over. People are very frustrated.
So, what does it mean? Basically, therapists have to tell patients who are uninsured—as well as those who are insured but choose to self-pay—what our best estimate is for how much the service is going to cost. And because we have repeat services, that makes it very, very complicated.
How to Make this Information Public
Mary: One thing we do know absolutely for sure is that we have to post a notice with all the information about good-faith estimates, timelines, and dispute resolutions. And that’s the easiest thing we have to do. The notice needs to be posted in your clinic in a prominent area, where a patient would be likely to see it. It needs to be posted in areas where you collect for services rendered or do billing. And it needs to be posted on your website. (CMS provides a standard form for good-faith estimates here and details on what should be included in the notice here.)
Chad: What exactly does the notice need to say?
Mary: The notice is for people who are uninsured or who were not using their insurance—with the exception of federal payers. It basically says that we’re required to tell them what the services for episodic care are expected to cost. I’d suggest basing it on a plan-of-care period, because you might change things at that point. And you can certainly charge them less than that. But you have to tell them that if the estimate is exceeded by $400, they have a right to dispute it. And you have to tell them how to dispute it, and who to contact. So it’s a simple notice; that’s the most clear thing. What becomes unclear is it doesn’t apply to patients who have benefits with federal payouts.
So as healthcare providers, we have to post this notice in all our clinics. It should be in the waiting rooms with licenses or certificates of occupancy or something like that, in prominent display. If you’re an owner and you don’t have it, you can contact BCMS for a template. Medicare also has a template on its website. So you can go to cms.gov and they have a “No Surprises Act” webpage and their own template as well. Number one on everybody’s checklist is we have to get that done.
How to Train Your Staff on the No Surprises Act
Chad: The next thing is that we really have to train our staff, especially reception. If somebody asks how much this is going to cost, we have to be able to tell them. Regardless of whether they’re in-network or out-of-network. Is that true?
Mary: That’s right. First, we ask if they’d like to file insurance. If not, we’re required by federal law to give them a good faith estimate for the services that we would render for this condition.
Chad: At my practice, we’ve been doing cash pay. I’m guessing our rate is exactly $100. It might be $104. And we’ve always said, $100 per visit. Is that sufficient? Or do I need to say, you’re coming in for an ankle sprain, and that’s likely going to be six visits, so $600. Or: you’re coming in for a whiplash injury or something like that, and that’s going to be 16 visits, so that’s $1600.
Mary: Right. They created “required elements” for the good faith estimate form. So what you have to do is tell them how much it’s going to cost. If you’re flat-fee, or if you do fee-for-service, or whatever, you’re going to have to make sure your estimate gives you enough latitude to not go over by $400. On the form we have, it will give you some options. The thing is, you have to identify what you’re doing. This is the hidden consequence that we’re going to have to deal with. For years, we’ve tried to discourage third-party administrators and payers from saying they’re going to authorize X number of visits or X number of CPT codes. Are we supposed to always have a crystal ball to know exactly how we’re going to treat them? We don’t, so that’s problematic for sure.
Good Faith Estimates Should Mirror Your Plan of Care
Regardless of how you’ve set up your estimate, you’ll have to do some prognosticating about what you’re going to need from the patient. So the more inclusive you are, the better. But the important thing is that the good faith estimate really mirrors your plan of care. If they’re going different directions, that’s a problem. And if you decide the patient isn’t responding well, and you want to change things dramatically, then you have to go back. But if you’re under your estimate, that’s not a problem.
When you evaluate somebody, that’s when you determine how you’re going to treat them. So it necessitates two good faith estimates. There’s one for the evaluation, and then you have to create another one because you have to give it to them in advance of treatment. Now, is there a consequence for not giving it to them in advance? If the patient says, “I want to be treated right now,” then it shouldn’t be a problem. Also, we don’t know yet what the penalties are because they’re not anywhere to be found. We don’t know if it’s fines, penalties, or administrative sanctions. But it’s the law, so we have to comply.
Show Intention to Comply
Chad: In your SIPA summary, you mentioned the importance of the intention. As business owners, we need to show that we’re attempting to comply with the law. What do you mean by that?
Mary: Well, there are some providers who totally defy what’s logical. When HHS tells you what should be in the notice and you choose not to include it, that’s pretty purposeful. You have to tell the customers that there’s a dispute resolution if it goes over by $400, and that applying for this costs $25. Those things have to be in the notice, or else you’re not compliant.This is especially for all of those who have been audited or are thinking that they want to protect themselves.
Green Envelopes: What to Do When You Get an Audit
Chad: So let’s switch over to the Supplemental Medical Review Contractor (SMRC) audits. What is that?
Mary: The notice comes in a notorious neon green envelope. Typically, it comes in the middle of an episode of care. It’s not uncommon for auditors to request one day to service records, maybe 30 or 40 charts. We’ve been flooded with people asking what to do for their initial evaluation.
Chad: Got it. So I get one of these fluorescent green envelopes in the mail. What should I do?
Mary: First, pull up all the resources in the SMRC packet. It tells you exactly what to do. We have one that says how to respond to a payer’s request for records. It’s quite lengthy, but it has some graphics, so it’s not terrible reading. Do not throw the envelope away. Read the letter, then read the letter again. Look at who’s sending it to you. Go through the SMRC packet step-by-step. You want your submission to be organized, legible, and easy to follow.
At BCMS, we produced a template for a table of contents. We have a template cover letter and a form for identifying the billing personnel they asked for. We also have provided some clips from the Medicare benefit policy manual that says we don’t have to have long-term goals. If you need further support, you can email Alicia at [email protected].
Chad: Mary, Alicia, and the BCMS team have put together other training sessions for you that are highly recommended on billing and coding, and also on documentation. So if you’re looking for any of the resources that we’re talking about, you can email Alicia and she can set you up with that. And if you contact Alicia, they’ll also get the FAQ for the SMRC audits, which is pretty extensive.
What’s Changes Can We Expect in the Future?
One final question for you here. And thank you for extensively reviewing the good faith estimate and also the SMRC audits, because I know a lot of owners are paying attention to those two things right now. Is there anything else in store for us as private practice owners in 2022 that you see coming down the pipe? Is there proposed legislation or anything like that on your radar right now?
Mary: Well, we all know the PTA payment differential is a killer, but I want to tell you, it’s not going away. Sorry if I’m the fun sponge on this, but our colleagues, the nurses, PAs, all of them have been dealing with this for years, if not decades. So it’s going to be very hard for us to say, “hey, this shouldn’t apply to us.”
So let’s put our endeavors where we’re gonna get the least resistance. Let’s get rid of the plan of care certification. Let’s get general supervision across the board. Then we won’t have problems with somebody signing something that they’re not enrolled in. I’d encourage everyone to look at some of those important things. That’s my little soapbox.
Chad: I appreciate the look into the crystal ball, Mary, and into what’s coming down the pipe for us in the future as private practice owners. Another quick reminder: if you’re looking for any of the resources that Mary mentioned in this episode, you can email Alicia Mahoney, at [email protected]. You can also check out the BCMS website, BCMScomp.com.
Well, Mary Daulong, Queen of Compliance, thank you very much for being here and helping us as private practice owners.