No Surprises: Mental Health Professionals Soon Required to Give” Good Faith” Estimates to Cash Pay C

Posted By: Hayley Twyman Brack

Earlier this year, a federal law titled the No Surprises Act was created and passed into law in an effort to protect healthcare consumers from unexpected medical costs. The federal mandate, which is set to go into effect on January 1st, 2022, will require healthcare professionals to disclose the expected cost of treatment before the interventions are implemented. Many mental health professionals have found themselves wondering how the new law may affect their practice.


According the act, mental health professionals will be required to provide a Good Faith Agreement to all uninsured and self-pay clients before services are rendered. While for now the act only applies to clients who are paying out-of-pocket for services, eventually the regulation may be extended to apply to those who use insurance to cover mental healthcare. Once the law goes into effect on January 1st, clinicians will be expected to provide both new and existing self-pay clients a document of expected expenses.


The required Good Faith Agreement is similar to an estimated cost of services that one would be provided by a building contractor or mechanic-it is an itemized list of recommended services and the cost of each service. According to the No Surprises Act, a clinician must inform the client verbally and in-writing the estimated cost of services within 1-3 business days after the initial appointment is made and not less than 1 business day before the initial appointment. In the agreement, the act states that the healthcare provider must outline which services are expected to be provided, how often the service is expected to occur, and how much the client will be expected to pay. According to the regulation, disclosures of the No Surprises Act must be visibly posted in a public area of the facility (ex. the office waiting room) and available to download from agency websites, if applicable.

The Center for Medicaid and Medicare Services has provided example disclosures and Good Faith Agreements that clinicians may use to be in compliance of the law. The American Psychological Association has also published a sample agreement template for mental health professionals. In order to complete the Good Faith Agreement for clients, clinicians may compare their fee schedule to the client’s estimated treatment plan. For example, if a clinician charges self-pay clients $100 per session and expects a client to be in weekly individual treatment for one year, the clinician would list on their agreement an estimated 52 individual 90837 sessions, which would total an estimated cost of $5,200.


According to the act, the diagnosis must also be listed on the Good Faith Agreement. Our interpretation of the regulation is that this Good Faith Agreement is to be given out after the client is assessed at intake and given a diagnosis, but before the treatment is scheduled to begin. However, if we receive more information about the act and this interpretation changes, we will update this article to reflect our understanding.


Under the No Surprises Act, Good Faith Agreements are valid for one-year and may be disputed or negotiated. If a clinician expects the amount and cost of services to increase during that timeframe, it is important that the therapist address the potential changes with the client and provide a new agreement. For example, if a client whose initial Good Faith Agreement reflected a treatment plan of being seen twice per month begins to experience suicidal ideation and is in need of a significant increase in session frequency, it is important that the therapist create and review with the client a new Good Faith Agreement before increasing sessions. If at the end of the year the cost of treatment is more than $400 greater than what was laid out in the most recent Good Faith Agreement, clients may file a dispute, which could lead to healthcare providers being required to honor the initial amount in the Good Faith Agreement.


As with any client-clinician agreement, if a client does not consent to the prescribed treatment or cost outlined in the Good Faith Agreement, a clinician may choose to negotiate down the cost of services, document if a client declines the prescribed frequency of treatment, or ultimately refer out to another clinician. The extra paperwork for clinicians is an attempt to provide extra protection to consumers. In the end, the ultimate goal of the No Surprises Act is to improve informed consent before a client begins services.

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Updated 12/31/2021.