8.5 Providing Estimated Patient Costs & Good Faith Estimates
Key Takeaways
- A cost estimate is built from the contracted allowed amount, not the gross charge, combined with the patient's remaining deductible, coinsurance, and copay from the eligibility response.
- Uninsured and self-pay patients who schedule or request pricing are entitled to a written Good Faith Estimate under the No Surprises Act.
- Every estimate must be labeled an estimate, list the assumptions and the CPT/HCPCS codes it is based on, and state that the final amount depends on services actually rendered and payer adjudication.
- Estimates are documented in the encounter record along with the date, the data source, and who provided them.
- Discussing balances and payment options requires the same privacy discipline as any other PHI conversation.
Test plan task 3.G — "provide estimated patient costs" — is supported by knowledge statements on fee schedules (3.K13), procedures to obtain estimated costs (3.K17), real-time eligibility (3.K10), and health insurance terminology (3.K21). Patients increasingly ask what a visit will cost before they agree to it, and giving a number that turns out to be wrong by a factor of three destroys trust and generates a complaint.
The Inputs to an Estimate
An estimate requires four pieces of information:
- What will be done — the expected CPT/HCPCS codes and units from the ordering provider or the scheduled procedure.
- What the payer allows — the contracted allowed amount from the fee schedule for that payer and plan. This is the critical point: for an in-network provider, patient responsibility is calculated on the allowed amount, not the gross charge. A $1,200 charge with a $480 allowed amount and 20% coinsurance produces $96 of coinsurance, not $240.
- Where the patient stands — remaining deductible, coinsurance percentage, copay by service type, and out-of-pocket maximum, taken from the EDI 271 eligibility response (Section 8.1).
- What else applies — facility versus professional components, anesthesia, pathology on a biopsy, implants, and whether prior authorization is in place.
A worked example
A patient is scheduled for a diagnostic colonoscopy. The practice's charge is $1,850. The payer's contracted allowed amount is $742. The EDI 271 shows $300 of the deductible remaining and 20% coinsurance after the deductible.
| Step | Calculation | Amount |
|---|---|---|
| Allowed amount | Contracted rate | $742 |
| Deductible applied | Lesser of remaining deductible and allowed amount | $300 |
| Balance subject to coinsurance | $742 − $300 | $442 |
| Coinsurance | 20% × $442 | $88.40 |
| Estimated patient responsibility | $300 + $88.40 | $388.40 |
| Contractual write-off | $1,850 − $742 | $1,108 (not billed to the patient) |
The estimate must state clearly that it excludes pathology if a polyp is removed and anesthesia billed separately by another group — the two most common reasons a colonoscopy estimate is later exceeded.
Good Faith Estimates for Uninsured and Self-Pay Patients
The No Surprises Act requires providers to give a written Good Faith Estimate (GFE) to individuals who are uninsured or who are insured but choose not to use their insurance (self-pay), whenever they schedule an item or service or request pricing.
| Requirement | Detail |
|---|---|
| Who receives it | Uninsured and self-pay individuals |
| Trigger | Scheduling an item or service, or requesting an estimate |
| Timing | Generally within 1 business day when scheduled at least 3 business days out, and within 3 business days when scheduled at least 10 business days out; upon request, within 3 business days |
| Content | Patient name and date of birth, description of the primary item or service, itemized list of items and services reasonably expected, applicable diagnosis and service codes, expected charges, provider/facility name and NPI/TIN, and required disclaimers |
| Co-provider items | Expected items and services from co-providers and co-facilities are included where required |
| Patient recourse | A patient billed substantially more than the GFE may use the patient-provider dispute resolution process |
The GFE is a written document, delivered on paper or electronically in a form the patient can save and print. It is not the same as the informal verbal estimate given to an insured patient using their benefits, though many organizations build both from the same estimator tool.
Rules for Giving an Estimate
- Call it an estimate. Always. Verbally and in writing.
- State the assumptions. Which codes, which payer and plan, the date the eligibility data was pulled, and what is excluded.
- Do not quote from the charge master alone. A gross charge quoted to an insured patient overstates their responsibility dramatically and invites a complaint.
- Do not promise coverage. Eligibility is not a guarantee of payment; only adjudication determines what the plan pays.
- Note the effect of authorization. If prior authorization is required and not yet approved, say so, and explain the consequence described in Section 8.1 — an administrative denial for a service requiring authorization generally cannot be balance-billed to the patient under an in-network contract.
- Offer options. Payment plans, financial assistance or charity care screening, and prompt-pay discounts where the organization offers them.
- Escalate the hard ones. Complex, high-dollar, or multi-provider estimates go to a financial counselor rather than being improvised at the front desk.
Documentation and Privacy
Document the estimate in the encounter record: the amount, the codes and payer data it was built on, the date the eligibility was verified, the format in which it was delivered, and who provided it. For a Good Faith Estimate, retain a copy in the designated record set as required.
Financial conversations are PHI conversations. A discussion of what a procedure will cost necessarily reveals that the procedure is planned. The privacy controls from Section 2.4 apply: use a private area or lowered voice at the desk, never discuss balances in a waiting room, verify identity before discussing an account by phone, and confirm authority before discussing a balance with anyone other than the patient or guarantor.
An in-network provider's gross charge is $1,850 and the payer's contracted allowed amount is $742. The patient has $300 of deductible remaining and 20% coinsurance. What is the estimated patient responsibility?
An uninsured patient calls to schedule a procedure three weeks out and asks what it will cost. What does the No Surprises Act require?
Which statement should accompany every patient cost estimate?