No Surprises Act and Behavioral Health: Billing Compliance Guide for 2026

Why the No Surprises Act Matters More for Behavioral Health

The No Surprises Act (Public Law 116-260, Division BB, Title I) was designed to protect patients from unexpected medical bills when they receive care from out-of-network providers in situations they could not reasonably have anticipated or avoided. While the law applies to all medical specialties, behavioral health is uniquely exposed for several structural reasons.

First, behavioral health has some of the highest out-of-network rates in medicine. According to data from the Government Accountability Office and commercial claims analyses, psychiatrists participate in insurance networks at significantly lower rates than most other physician specialties. A 2024 analysis of commercial insurance networks found that only 55% to 60% of psychiatrists participated in at least one commercial insurance network, compared to over 90% for primary care physicians. For psychologists and licensed clinical social workers, in-network participation varies dramatically by geography, with some metropolitan areas showing participation rates below 40% for certain plans.

Second, the self-pay market in behavioral health is substantial. Many patients choose to see therapists and psychiatrists on a self-pay basis, even when they have insurance, because of network inadequacy, concerns about mental health records in insurance claims, or provider preference. These self-pay patients are the primary population protected by the Good Faith Estimate requirements, and behavioral health practices that serve significant self-pay populations face the largest compliance burden.

Third, facility-based behavioral health services, including partial hospitalization programs (PHP), intensive outpatient programs (IOP), and residential treatment, create complex billing scenarios where patients may be treated at an in-network facility but by out-of-network clinicians. This is precisely the scenario the No Surprises Act targets most aggressively.

Good Faith Estimate Requirements for Behavioral Health

The Good Faith Estimate (GFE) provision is the single most operationally demanding requirement of the No Surprises Act for behavioral health practices. Every behavioral health provider, regardless of network status, must provide a written estimate of expected charges to uninsured individuals and individuals who are not seeking to file a claim with their insurance (self-pay patients).

Who Must Receive a GFE

A GFE must be provided to any patient who either does not have health insurance or who has insurance but chooses not to use it for the service in question. This includes patients paying out of pocket for therapy to avoid insurance involvement, patients with high-deductible plans who are effectively self-pay, patients with insurance that does not cover behavioral health services, and uninsured patients accessing therapy through sliding-scale or reduced-fee arrangements. The practice does not need to verify why the patient is self-pay. If the patient is scheduling a service and not submitting to insurance, the GFE requirement applies.

Timeframes for Providing a GFE

The timeframes are specific and non-negotiable:

• Scheduling 3 to 9 business days in advance: The GFE must be provided within 1 business day of scheduling.
• Scheduling 10 or more business days in advance: The GFE must be provided within 3 business days of scheduling.
• Patient requests a GFE without scheduling: The provider must provide the GFE within 3 business days of the request.

For behavioral health, the recurring nature of therapy creates unique challenges. If a patient is scheduling weekly therapy sessions, the GFE must estimate the total expected cost for the anticipated course of treatment, up to 12 months. This means a therapist estimating that a patient will need weekly sessions for six months must calculate and disclose the total estimated cost for that entire period, not just the cost of a single session.

What the GFE Must Include

A compliant GFE must include the patient's name and date of birth, a description of the primary service or item, the expected billing and diagnostic codes (CPT/HCPCS and ICD-10), the expected charges for each listed service, the name and NPI of each provider expected to deliver services, a disclaimer that the estimate is not a contract and that actual charges may differ, and information about the Patient-Provider Dispute Resolution process.

For a therapy practice, this means listing the specific CPT codes (such as 90837 for 60-minute psychotherapy or 90834 for 45-minute psychotherapy), the expected number of sessions, the per-session rate, and the total estimated cost. If the therapist anticipates ordering psychological testing (96130-96133) or referring for psychiatric medication management (99213-99215 with add-on codes), those services should also be included in the GFE.

Patient-Provider Dispute Resolution

When a self-pay patient receives a bill that exceeds the Good Faith Estimate by $400 or more, the patient can initiate the Patient-Provider Dispute Resolution (PPDR) process. This is separate from the Independent Dispute Resolution (IDR) process used for insurance payment disputes.

The PPDR process works as follows:

• The patient files a dispute with HHS within 120 calendar days of receiving the bill.
• HHS assigns the dispute to a Selected Dispute Resolution (SDR) entity.
• Both the patient and provider submit documentation, including the original GFE, the actual bill, and supporting information.
• The SDR entity makes a binding payment determination within 30 business days.
• If the SDR entity finds in favor of the patient, the provider must accept the lower amount and refund any excess payment.

For behavioral health practices, the $400 threshold is particularly important because of cumulative billing. A patient receiving weekly therapy at $200 per session who was quoted a 10-session treatment plan at $2,000 and ends up needing 15 sessions ($3,000) has a $1,000 variance that triggers PPDR eligibility. The lesson: GFEs for recurring therapy must be comprehensive and updated when treatment plans change significantly.

Independent Dispute Resolution for Out-of-Network Claims

The Independent Dispute Resolution (IDR) process applies to payment disputes between out-of-network providers and health plans for services covered by the No Surprises Act's balance billing protections. This is relevant for behavioral health providers who deliver services at in-network facilities, provide emergency psychiatric services, or are involved in other surprise billing scenarios.

How IDR Works

After an initial 30-day open negotiation period fails to produce agreement, either the provider or the plan can initiate IDR. Both parties submit offers, and a certified IDR entity selects one of the two offers in a baseball-style arbitration. The decision is binding.

The IDR entity must begin with the Qualifying Payment Amount (QPA) as the primary factor. The QPA is based on the plan's median contracted rate for the service in the relevant geographic area. The IDR entity can then consider additional factors:

• Provider training, experience, and quality: Board-certified addiction psychiatrists or fellowship-trained specialists may argue for higher reimbursement based on specialized qualifications.
• Market share and provider availability: In areas with severe psychiatrist shortages, providers can argue that limited supply supports higher rates.
• Patient acuity: Complex cases involving co-occurring disorders, suicidality, or acute psychiatric crises support higher payment arguments.
• Prior contracted rates: If the provider previously had a contract with the plan at a higher rate, this can be presented as evidence of a reasonable payment level.
• Demonstrations of good faith efforts: Evidence that the provider attempted to negotiate in-network rates but was offered inadequate terms can support the provider's offer.

BH-Specific IDR Considerations

Behavioral health providers have specific advantages and challenges in the IDR process. On the advantage side, network inadequacy in behavioral health is well-documented, and providers can present data showing that the plan's QPA is based on an artificially small network of contracted providers. On the challenge side, the IDR process is administratively burdensome and expensive (IDR filing fees range from $50 to $500 per party), which may not be cost-effective for individual therapy session disputes. IDR is most practical for high-dollar disputes, such as residential treatment stays, PHP programs, or psychiatric hospitalization services where the payment gap is thousands or tens of thousands of dollars.

CMS Enforcement: What Is Happening in 2025-2026

CMS enforcement of the No Surprises Act is no longer in its initial grace period. The enforcement posture has shifted from education-first to active compliance monitoring, with several developments behavioral health practices must track:

• GFE compliance audits: CMS has begun auditing provider compliance with GFE requirements, focusing on high-volume self-pay specialties. Behavioral health, given its large self-pay population, is a natural audit target. Audits examine whether GFEs are being provided within required timeframes, whether they contain all required elements, and whether practices have documentation of GFE delivery.
• Penalty enforcement: CMS can impose penalties of up to $10,000 per violation for GFE non-compliance. While CMS has stated it will consider the provider's compliance efforts and good faith, the penalty authority exists and is being exercised. For a practice that routinely fails to provide GFEs to self-pay patients, the cumulative penalty exposure across dozens or hundreds of patients is substantial.
• Provider directory accuracy: CMS has increased scrutiny of health plan provider directories, which directly affects behavioral health providers. When a patient selects a provider based on a directory listing showing in-network status but the provider is actually out-of-network, the plan bears financial responsibility. Plans are responding by requiring more frequent directory verification from providers, and providers who fail to respond to directory verification requests may be removed from directories, affecting patient access.
• State enforcement coordination: Many states have enacted their own surprise billing laws that complement or exceed the federal No Surprises Act. CMS coordinates with state regulators, and providers must comply with whichever standard is more protective of the patient. States with particularly robust surprise billing laws affecting behavioral health include New York, California, Texas, Colorado, and Florida.

Common Compliance Gaps in Behavioral Health Practices

Based on industry audits and compliance assessments, behavioral health practices most frequently fall short in these areas:

• No GFE workflow for self-pay therapy patients: Many therapy practices, particularly solo practitioners and small group practices, have no systematic process for generating and delivering GFEs. The therapist's front desk may quote a session rate verbally, but the practice never produces the written, compliant GFE document with all required elements. This is the most common violation in behavioral health.
• Failure to update GFEs when treatment plans change: A patient who was estimated for 12 sessions of CBT but transitions to a longer-term psychodynamic treatment should receive an updated GFE. Many practices issue the initial GFE and never update it, exposing themselves to PPDR disputes when total charges exceed the estimate by $400 or more.
• Incorrect balance billing for facility-based services: PHP, IOP, and residential programs that employ a mix of in-network and out-of-network clinicians sometimes allow out-of-network providers to balance bill patients for services rendered at the in-network facility. Under the No Surprises Act, this is prohibited for most non-emergency services unless the patient received proper notice and consent.
• Missing notice and consent for non-emergency OON services: When an out-of-network provider delivers non-emergency services at an in-network facility, the provider must give the patient written notice of out-of-network status and obtain consent to waive balance billing protections at least 72 hours before the service (or on the day of the service in some cases). Many behavioral health facilities do not have this workflow in place.
• Telehealth across state lines: Providers offering telehealth behavioral health services to patients in other states may not realize that the No Surprises Act applies to these services. Network status, GFE requirements, and state surprise billing laws may differ based on the patient's location, not the provider's location.

What Your Billing Team Needs to Do

These are the specific action items for behavioral health RCM teams to achieve and maintain No Surprises Act compliance:

1. Implement a systematic GFE workflow. Build a process that triggers GFE generation whenever a self-pay or uninsured patient schedules a service. The workflow must capture the scheduling date, calculate the required delivery timeframe (1 or 3 business days), generate the GFE document with all required elements, deliver the GFE to the patient (electronic delivery is acceptable with patient consent), and log the delivery date and method. This workflow must apply to all self-pay patients, not just new patients. Every scheduled service for a self-pay patient should trigger a GFE check.
2. Develop GFE templates for common service combinations. Create standardized GFE templates for the most common behavioral health service configurations: individual therapy (90834/90837), psychiatric evaluation (90791/90792), medication management (99213-99215 + 90833), psychological testing batteries (96130-96133), PHP programs (H0035), IOP programs (H0015/S9480), and group therapy (90853). Pre-built templates reduce the administrative burden on front desk staff and improve consistency.
3. Train front desk and intake staff. Front desk staff are the first point of contact for GFE compliance. They need to know how to identify self-pay and uninsured patients, when to generate a GFE, how to deliver it within the required timeframe, how to document delivery, and what to tell patients about the PPDR process. Schedule quarterly refresher training, because staff turnover in front desk positions is high and new staff must be trained immediately.
4. Audit out-of-network billing processes. If your practice includes any out-of-network services, audit every step of the billing process. Verify that balance billing does not occur for surprise billing-protected services, that proper notice and consent forms are used when balance billing is permissible, that the practice has a process for identifying which services fall under the No Surprises Act's protections, and that claim submissions correctly reflect the patient's cost-sharing obligations.
5. Update patient financial policies and consent forms. Revise patient intake paperwork to include No Surprises Act disclosures. Patients must be informed of their rights under the law, including the right to a GFE, the right to dispute bills that exceed the GFE by $400 or more, and the protection against surprise balance billing. These disclosures should be part of the standard intake packet.
6. Prepare IDR documentation packages. If your practice regularly provides out-of-network services that may be subject to IDR, prepare standardized documentation packages. These should include provider credential summaries, evidence of network inadequacy in your area, historical contracted rates, patient acuity documentation, and market rate analyses. Having these materials pre-assembled dramatically reduces the time and cost of participating in IDR proceedings.
7. Monitor GFE accuracy and update estimates proactively. Build a quarterly review process to compare GFEs issued against actual charges billed. Identify patterns where actual charges consistently exceed estimates and recalibrate GFE templates. When a treatment plan changes materially, issue an updated GFE before the next session. This proactive approach reduces PPDR exposure and maintains patient trust.

Revenue and Financial Impact

The No Surprises Act's financial impact on behavioral health practices depends heavily on the practice's payer mix and network participation strategy.

Key financial dynamics to understand:

• QPA pressure on out-of-network reimbursement: The Qualifying Payment Amount is based on median contracted rates, which tends to disadvantage out-of-network providers who were previously billing at higher rates. Behavioral health specialists in high-demand areas should evaluate whether joining networks at negotiated rates may produce better long-term revenue than remaining out-of-network and accepting QPA-based payments.
• PPDR liability for inaccurate GFEs: If patients successfully dispute bills through the PPDR process, the practice must accept the lower payment. For a therapy practice with a high volume of self-pay patients and inaccurate GFEs, cumulative PPDR losses could reach $20,000 to $50,000 annually.
• Administrative cost of IDR participation: Each IDR case requires a filing fee ($50 to $500), attorney or consultant time to prepare the submission, and staff time to compile documentation. Practices should evaluate whether IDR is cost-effective for each dispute or whether accepting the plan's initial payment is more practical for lower-dollar disputes.
• Positive impact of GFE transparency: Some practices have found that providing clear, upfront cost estimates improves patient retention and reduces collections problems. Patients who understand their financial obligation before starting treatment are more likely to pay on time and less likely to dispute charges.

EHR and Technology Implications

Compliance with the No Surprises Act at scale requires technology support. Manual GFE generation is feasible for solo practitioners seeing a handful of self-pay patients per week, but it becomes unmanageable for group practices and facilities. The following EHR capabilities are critical for sustainable compliance. For a broader look at revenue cycle technology, see our Behavioral Health Revenue Cycle Guide.

• Automated GFE generation: The EHR should generate a compliant GFE document when a self-pay patient is scheduled, pulling the expected CPT codes, provider NPI, fee schedule rates, and estimated session count from the treatment plan. EHR platforms designed for behavioral health, such as AZZLY Rize and Ease, include scheduling-integrated GFE generation that automates this workflow and ensures the estimate includes all required elements before the delivery deadline.
• Cost estimation tools: Beyond the basic GFE, cost estimation tools that show the patient an expected total cost for a course of treatment help practices manage patient expectations and reduce PPDR exposure. These tools should account for multiple service types (therapy, medication management, testing) and provide a total estimated cost across the treatment plan.
• GFE delivery tracking: The EHR must log when the GFE was generated, when it was delivered, the method of delivery (print, email, patient portal), and whether the patient acknowledged receipt. This documentation is essential for defending against PPDR disputes and demonstrating compliance during CMS audits.
• Network status verification: For practices that participate in some networks but not others, the EHR should flag the patient's network status at scheduling and trigger appropriate workflows: GFE for self-pay, balance billing verification for out-of-network insured patients, and standard billing for in-network patients.
• Patient financial communication: Integrated patient communication tools that send GFEs via secure email or patient portal, collect electronic acknowledgment, and provide patients with information about their rights under the No Surprises Act reduce front desk burden and create a clear documentation trail.
• Reporting and analytics: The EHR should produce reports showing GFE compliance rates (percentage of eligible patients who received timely GFEs), GFE accuracy (comparison of estimated versus actual charges), and PPDR/IDR dispute trends. These reports enable proactive compliance management rather than reactive responses to audits or complaints.

Frequently Asked Questions

Does the No Surprises Act apply to out-of-network therapists and psychiatrists?

Yes. The No Surprises Act applies to all licensed behavioral health providers, including therapists, psychologists, and psychiatrists, when they provide services at in-network facilities or in emergency situations. For non-emergency services at in-network facilities, out-of-network behavioral health providers cannot balance bill the patient beyond the in-network cost-sharing amount. For self-pay and uninsured patients, all behavioral health providers must provide Good Faith Estimates regardless of network status. The law does not prohibit out-of-network billing entirely, but it restricts surprise balance billing and requires cost transparency.

What is the Good Faith Estimate requirement for therapy practices?

Under the No Surprises Act, behavioral health practices must provide a Good Faith Estimate of expected charges to any uninsured or self-pay patient. When a patient schedules at least 3 business days in advance, the GFE must be provided within 1 business day. When scheduling at least 10 business days in advance, the GFE must be provided within 3 business days. For recurring therapy, the GFE must estimate the total expected cost for the reasonably anticipated period of treatment, up to 12 months. This includes all expected charges, facility fees, lab work, and any co-occurring services the provider reasonably expects to order.

What happens if a therapy patient disputes a Good Faith Estimate?

If a patient receives a bill that exceeds the Good Faith Estimate by $400 or more, the patient can initiate the Patient-Provider Dispute Resolution process. The patient files with HHS within 120 days of receiving the bill, and a Selected Dispute Resolution entity reviews the case and makes a binding payment determination within 30 business days. For behavioral health practices with ongoing treatment plans, maintaining accurate GFEs is critical because the cumulative cost of weekly therapy sessions can easily exceed the $400 threshold if the original estimate did not account for treatment plan changes.

How does the Independent Dispute Resolution process work for behavioral health claims?

When an out-of-network behavioral health provider and insurer cannot agree on a payment amount, either party can initiate IDR after a 30-day open negotiation period. Both sides submit offers, and a certified IDR entity selects one using a baseball-style arbitration model. The QPA is the primary consideration, with additional factors including provider training, market share, patient acuity, and prior contracted rates. For behavioral health, IDR is most practical for high-dollar disputes involving residential treatment, PHP, or IOP where the payment gap justifies the administrative cost.

What are the penalties for not providing Good Faith Estimates?

CMS can impose penalties of up to $10,000 per violation for failure to provide Good Faith Estimates. Each instance of not providing a GFE to an eligible patient constitutes a separate violation. For a therapy practice seeing 20 self-pay patients per week, the theoretical maximum exposure is significant. CMS has been escalating enforcement in 2025 and 2026, moving beyond the initial education-focused approach. Practices should not rely on the grace period continuing indefinitely.

Does the No Surprises Act affect telehealth behavioral health billing?

Yes. The No Surprises Act applies to telehealth services identically to in-person services. Behavioral health providers offering telehealth across state lines must provide GFEs to self-pay patients, cannot surprise-bill for emergency services, and must comply with provider directory requirements. The telehealth dimension adds complexity because a provider may be in-network in one state but out-of-network in the patient's state. Practices offering multi-state telehealth should verify network status for each patient and state combination and issue GFEs where applicable.

Editorial Standards

Last reviewed: February 26, 2026

Methodology

• No Surprises Act statutory text (Public Law 116-260, Division BB, Title I) reviewed for behavioral health applicability
• CMS interim final rules and final rules on GFE, IDR, and PPDR processes reviewed for current enforcement standards
• Federal Register notices on IDR process updates and QPA calculation methodology analyzed
• State surprise billing law variations cross-referenced for multi-state compliance guidance
• Industry compliance data and audit findings analyzed for common behavioral health gaps

Primary Sources

• CMS: No Surprises Act Overview
• HHS: Good Faith Estimate Requirements
• Federal Register: Requirements Related to Surprise Billing (86 FR 55980)
• CMS: Independent Dispute Resolution Process
• GAO: Mental Health Provider Network Adequacy