Right Job, Wrong Tool: How the No Surprises Act Potentially Deters Mental Health Treatment

Photo by Marco Verch Professional Photographer on Flickr

Nathaniel Kinman, Associate Member, University of Cincinnati Law Review

I. Introduction

Why do health care consumers consistently receive indiscernible medical bills? Good question. The federal government is curious as well, recently enacting legislation to protect consumers against surprise medical bills.[1] Starting January 1, 2022, health care providers in the United States must comply with the newly-minted No Surprises Act.[2] The Act’s name reflects its primary purpose: protecting consumers by banning health care provider’s surprise billing practices.[3]

The Act covers a broad range of health care services, including those related to mental health.[4] One of the Act’s primary mechanisms for fostering transparent billing requires providers to deliver a good faith estimate of expected charges, as well as reasonably anticipated related charges by other health care providers, to clients not using insurance.[5] These estimates must be provided to clients at least three business days prior to their scheduled appointment but no later than one day after the appointment is scheduled. [6]

While providing good faith estimates to uninsured or self-pay patients is a proper step toward consumer protection, it may not be the clear solution Congress envisioned for those seeking mental health services. Accordingly, this article first details several of the requirements imposed on mental health care providers under the No Surprises Act. Second, this article argues that the Act’s good faith estimate requirement potentially deters individuals who need mental health services from seeking care and proposes alternatives to the Act’s current framework. Lastly, this article summarizes why the No Surprises Act might produce an adverse outcome for patients needing mental health treatment.

II. Background

With one in five Americans receiving surprise medical bills ranging from $750 to $2600 per emergency room visit, the need for transparency in medical billing is undeniable.[7] Consequently, the federal government enacted the No Surprises Act to provide relief and shield consumers from surprise medical bills.[8] For purposes of this article, the following section examines only the scope of the Act’s protections for uninsured and self-paying consumers of mental health services.

Notably, the No Surprises Act protects patients and fosters transparent billing practices by, among other things, requiring mental health care clinicians to provide a written, good faith estimate of expected charges as well as the anticipated costs for related services from other health care providers when a patient is self-pay or uninsured.[9] In order to discern whether a prospective or ongoing patient falls within this category, all providers must ask patients whether they are insured or self-paying.[10]

If a patient is uninsured, self-pay, or simply requests an estimate, the provider must provide the patient with a notification of a good faith estimate “in clear and understandable language” at least three days prior to a scheduled service but no later than one day following the date of scheduling.[11] Indeed, the good faith estimate is only an estimate, but a patient has the ability to challenge her charges if the actual service cost substantially exceeds the estimate.[12] Because there is no penalty for overestimating a patient’s anticipated costs, the American Psychiatric Association recommends providers overestimate expected charges when in doubt.[13]

The Centers for Medicare and Medicaid Services (CMS) instruct providers to include a plethora of detailed information, including multiple disclosures and notification of a patient’s right to challenge the good faith estimate through a specified dispute resolution process.[14] Additionally, CMS instructs providers to include applicable diagnosis codes and a list of services the provider anticipates will require separate scheduling.[15] The No Surprises Act casts a broad net including all health care providers acting within the scope of their licenses or certifications under state law.[16] Similarly, services required to be included on good faith estimates encompass virtually any service related to health care.[17]

III. Discussion

With such a far-reaching scope, the No Surprises Act models a one-size-fits-all regulatory statute aimed toward improving transparency in patient billing and increasing competition among health care providers.[18] However, against the Act’s intended purpose, will its implementation match the outcome Congress envisioned for all areas of health care? Given the administrative complexity of the mental health care industry, the following section argues that the current framework provided by the No Surprises Act potentially dissuades an already apprehensive society from engaging in mental health treatment.

The Act’s good faith estimate looks great on paper, but its application in the mental health care industry will likely create incongruent access to care. For starters, the very reason the estimate requirement will impact the mental healthcare industry so greatly is due to the lack of providers accepting insurance. For example, it is estimated that nearly forty-five percent of psychiatrists in the United States do not accept any type of insurance, compared to over ninety percent of general health services being submitted through insurance.[19] The large percentage of providers not accepting insurance necessarily implicates compliance with the Act’s good faith estimate requirement.[20] Therefore, many patients seeking mental health treatment this year will receive good faith estimates, and the lack of insurance acceptance ensures that good faith estimates will be common practice in the mental health care industry moving forward.

Further, because the No Surprises Act penalizes providers for underestimating expected costs,[21] it will likely lead to higher estimates and dissuade prospective patients from seeking the care they desperately need. Notably, a study by the National Council for Mental Wellbeing, in conjunction with Cohen Veteran Network, discovered that forty-two percent of Americans reported the cost of mental health care and poor insurance coverage as the most significant barriers to accessing treatment.[22] The study further revealed that nearly one in four Americans face choosing between paying for necessities and getting mental health care treatment.[23]

In the name of consumer protection, the No Surprises Act leaves providers with little choice but to deliver overestimated expected charges to prospective patients who are largely already avoiding mental health treatment due to high costs. Additionally, because a significant portion of mental health care providers do not accept any insurance, overestimated good faith estimates will likely be the first interaction people have with mental health care treatment, potentially shocking them enough to dissuade seeking the treatment they very well may need. In the end, providers must choose between overestimating or facing proscribed dispute resolution, and consumers are the ones likely to suffer.

While consumers should not encounter surprise medical bills, and transparent billing should be standard practice, the No Surprises Act’s current framework relating to good faith estimates in the mental health care industry might unfavorably achieve its goal by dissuading treatment altogether. By encouraging providers to overestimate patient’s expected costs, a significant portion of those needing mental health treatment will likely be discouraged from doing so after receiving inflated good faith estimates that are unrepresentative of the services actually provided.

Importantly, this article does not suggest that the No Surprises Act lacks utility. Indeed, this article only serves to highlight the Act’s potential implications on mental health care in light of the industries’ current structure. As an addendum to the Act’s good faith estimate requirement, mental health care providers should be given a degree of latitude commensurate with standard practices. Specifically, a provision enabling mental health providers to provide patients with a written break down of hourly rates per session in advance of scheduled services should be added to satisfy the good faith estimate requirement. Beyond the scope of the No Surprises Act, Congress should likewise begin reexamining the issue of why so many mental health professionals do not accept insurance and address such deficiencies.

IV. Conclusion

While the No Surprises Act purports to increase competition in the health care industry and ensure transparent billing practices,[24] its requirement of a good faith estimate in the mental care industry for uninsured and self-pay individuals might deter patients from seeking the care they need. Because such a large number of mental health care providers do not accept insurance and the Act incentivizes overestimating expected costs, individuals seeking mental health services will likely receive inflated estimates for care. Given that cost already represents a significant barrier to pursuing care, the Act’s mechanisms for fostering transparency in billing practices might have a fettering effect on patients seeking mental health treatment.


[1] HHS Kicks Off New Year with New Protections from Surprise Medical Bills, U.S. Department of Human & Health Services (Jan. 3, 2022), https://www.hhs.gov/about/news/2022/01/03/hhs-kicks-off-new-year-with-new-protections-from-surprise-medical-bills.html [hereinafter HHS].

[2] See Consolidated Appropriations Act of 2021, Pub. L. No. 116-260, 134 Stat. 2758. The Consolidated Appropriations Act of 2021 contains the No Surprises Act within, beginning in Division BB, Title I. Accordingly, Division BB, Title I of the Consolidated Appropriations Act of 2021 will be referred to as the “No Surprises Act” or “the Act” for the purposes of this article.

[3] See HHS, supra note 1.

[4] See No Surprises Act Implementation, American Psychiatric Association (last visited Feb. 9, 2022), https://www.psychiatry.org/psychiatrists/practice/practice-management/no-surprises-act-implementation [hereinafter NSA Implementation].

[5] No Surprises Act § 112.

[6] Id.

[7] See HHS, supra note 1.

[8] See id.

[9] No Surprises Act § 112.

[10] Id.

[11] Id.

[12]See NSA Implementation, supra note 4. Substantially exceeding the estimate means in excess of $400. Id.

[13] See id.

[14] Id.

[15] See id.

[16] Id.

[17] See id.

[18] See HHS, supra note 1.

[19] Manoj Kanagaraj, Here’s Why Mental Healthcare Is So Unaffordable & How COVID-19 Might Help Change This, Harvard Medical School Primary Care Review (Dec. 15, 2020), http://info.primarycare.hms.harvard.edu/review/mental-health-unaffordable (citing Infographic — US Health Care Spending: Who Pays?, California Health Care Almanac (June 28, 2021), https://www.chcf.org/publication/us-health-care-spending-who-pays/#related-links-and-downloads;  Tara F. Bishop Et Al. Acceptance of Insurance by Psychiatrists and the Implications for Access to Mental Health Care, JAMA Network (Feb. 2014), https://jamanetwork.com/journals/jamapsychiatry/fullarticle/1785174).

[20] See NSA Implementation, supra note 4 (The No Surprises Act requires providers to notify patients with a good faith estimate of expected costs when the patient is uninsured or self-pay).

[21] See NSA Implementation, supra note 4 (Because there is no penalty for overestimates, the American Psychiatric Association recommends providers overestimate when in doubt).

[22] See New Study Reveals Lack of Access as Root Cause for Mental Health Crisis in America, National Council for Mental Wellbeing (last visited Feb. 9, 2022), https://www.thenationalcouncil.org/press-releases/new-study-reveals-lack-of-access-as-root-cause-for-mental-health-crisis-in-america/.

[23] Id.

[24] See HHS, supra note 1.