Get it wrong, and you're looking at denied claims, drawn-out IDR disputes, or compliance penalties. Many practices still don't fully understand which claims qualify for NSA protections and which don't.
This guide breaks down OON billing basics, what the NSA actually requires, how the IDR process works, and practical steps to stay compliant while protecting your revenue.
Key Takeaways
- Out-of-network care has no contracted rate, so reimbursement varies and balance-billing risk rises
- The No Surprises Act bans balance billing for emergency care and many OON services at in-network facilities
- Issue Good Faith Estimates for uninsured/self-pay patients; use IDR when payer offers fall short
- Behavioral health and TMS claims add CPT 90867–90869 and prior-authorization complexity
What Is Out-of-Network Billing and How Does It Work?
Out-of-network billing happens when a provider treats a patient without a negotiated contract with that patient's insurer. Instead of a pre-set rate, the provider charges their own fee, and the payer decides how much of it to cover.
In-network vs. out-of-network, in simple terms:
- In-network: Provider and payer agree on a fixed rate in advance, say $150 for a therapy session. Patient pays a predictable copay.
- Out-of-network: Provider bills $200 for the same session. The payer may reimburse based on its own benchmark, say $110, leaving a gap the patient (or provider, depending on NSA applicability) may owe.
The Claim Lifecycle
- Patient encounter — Service is delivered and documented
- Charge entry — CPT/ICD-10 codes and the provider's set fee are captured
- Claim submission — The claim is sent to the payer
- Payer review — UCR or QPA-based allowed amounts determine payment
- Balance billing — May follow if the claim isn't NSA-protected
Surprise out-of-network bills are common. A 2020 KFF survey found 16% of insured adults ages 18–64 reported receiving a surprise medical bill tied to out-of-network care. That was before the NSA existed.
Two benchmarks matter here, and they're not interchangeable:
- UCR (Usual, Customary, and Reasonable): the prevailing charge for a service in a given area, generally set above the 50th percentile of billed charges
- QPA (Qualifying Payment Amount): the payer's median contracted in-network rate for a similar service, per CMS guidance
Why do practices end up out-of-network in the first place? Usually one of three reasons:
- Payer credentialing isn't finished yet
- The patient specifically chose that provider
- Too few in-network specialists exist for a niche service, such as specialty psychiatry
Understanding the No Surprises Act: What Providers Must Know
The No Surprises Act (NSA)'s core purpose is straightforward: protect patients from unexpected bills for emergency care and certain non-emergency services delivered by OON providers at in-network facilities.
What's Covered vs. Excluded
Protected under the NSA:
- Emergency services, regardless of facility network status
- Non-emergency services by ancillary providers (anesthesiologists, radiologists, pathologists) at in-network facilities
- Air ambulance transport
Not protected:
- Ground ambulance services
- Scheduled OON care where the patient signed a valid consent form
The consent exception is narrow. For non-emergency, non-ancillary services, a provider can bill OON only if the patient receives proper notice and gives informed written consent, and an in-network alternative exists at that facility.
Ancillary services never qualify for this consent exception, no matter what paperwork the patient signed.
What This Means for Balance Billing
Where the NSA applies, balance billing is banned. The financial dispute shifts from patient vs. provider to provider vs. payer, resolved through negotiation or Independent Dispute Resolution (IDR). Where it doesn't apply, meaning the patient knowingly consented to OON care, balance billing remains legal.
Provider obligations include:
- Posting public disclosures about balance-billing protections at your facility and website
- Submitting notice-and-consent forms on time (generally 72 hours before service)
- Timely, accurate claim submission
Those claim-accuracy obligations carry extra weight in behavioral health and TMS. CPT codes 90867-90869 come with strict prior authorization and coding requirements. Miscode a TMS session or skip a required modifier, and you risk a denial and an avoidable IDR dispute.
Navigating the IDR Process and Balance Billing Rules
When a provider and payer can't agree on reimbursement for an NSA-protected claim, the Independent Dispute Resolution process kicks in.
How IDR Actually Works
- Open negotiation — both parties get 30 business days to work it out directly
- IDR initiation — if unresolved, either party files within 4 business days after negotiation closes
- Entity selection — parties jointly pick a certified IDR entity within 3 business days
- Offer submission — both sides submit their final payment offer with supporting documentation
- Baseball-style decision — the IDR entity picks one offer in full, no splitting the difference
- Payment — due within 30 calendar days of the determination
This process is under real strain. A 2023 GAO report found nearly 490,000 disputes were submitted between April 2022 and June 2023, with 61% still unresolved as of that June. Regulators had originally expected around 22,000 disputes for all of 2022. The system is buried.
A Simple Example
Say an out-of-network specialist bills $400 for a protected service. The payer's QPA benchmark is $220. If the claim is NSA-protected, that $180 gap goes to negotiation or IDR, not the patient. The IDR entity then picks either the provider's final offer or the payer's, based on the evidence submitted.
Balance billing is still legal when the patient knowingly and voluntarily consented to OON care in a non-emergency, non-ancillary situation, with proper notice given in advance.
All of this creates a real administrative burden. Tracking negotiation deadlines, assembling IDR evidence, and following up on payment timelines takes dedicated staff time most solo and small practices don't have. Many practices hand dispute work to outsourced revenue cycle management teams instead of staffing it in-house.
Good Faith Estimates and Patient Cost Transparency
Uninsured and self-pay patients get a different set of No Surprises Act protections: the Good Faith Estimate (GFE). Practices must issue a GFE before scheduled care so patients see expected costs up front.
Timing requirements:
- Service scheduled 10+ business days out → GFE due within 3 business days of scheduling
- Service scheduled 3-9 business days out → GFE due within 1 business day
- Patient requests a GFE directly → due within 3 business days
A compliant GFE must include:
- Patient name and date of birth
- Description of the scheduled service and date
- Expected diagnosis and service (CPT) codes
- Itemized charges by provider or facility
- Standard estimate and dispute-resolution disclaimers
If the actual bill comes in $400 or more above the GFE, the patient has 120 calendar days to file a Patient-Provider Dispute Resolution (PPDR) claim. The assigned entity then has 30 business days to issue a binding decision. Accurate estimates lower dispute risk and protect the practice from unexpected write-offs.
Strategies for Providers to Stay Compliant and Protect Revenue
Compliance here isn't about one big fix. It's a handful of consistent habits.
- Verify benefits and NSA applicability before rendering OON services. Know upfront whether a claim will be protected or not.
- Nail your coding and documentation, especially for specialty CPT codes like 90867-90869. Sloppy documentation is what falls apart under IDR scrutiny.
- Track every deadline in the open negotiation and IDR timeline. Missing a 4-day filing window can cost you the dispute entirely.
This is where specialized billing support pays off. At Persistex, our coders hold CPC and CPB certifications and focus on behavioral health billing, achieving a 99.2% coding accuracy rate across client claims.
We've helped a multi-provider behavioral health clinic cut denials by 40%, adding roughly $85,000 in monthly collections. Our denial management process uses root-cause analysis and multi-level appeals, with a 72% appeals success rate.
For practices without a dedicated billing team fighting IDR disputes and GFE compliance on top of patient care, that persistent follow-through often makes the difference between absorbing a loss and collecting what's owed.
Frequently Asked Questions
What is an example of out-of-network reimbursement?
A provider bills $300 for a session; the payer's QPA benchmark is $180. If the claim is NSA-protected, the $120 gap goes through negotiation or IDR rather than to the patient.
Is out-of-network billing illegal?
No. OON billing itself is completely legal. Only certain balance billing practices are restricted, specifically for NSA-protected emergency and ancillary services.
What is the difference between balance billing and surprise billing?
Surprise billing refers to unexpected OON charges, now largely banned under the NSA. Balance billing is charging patients the gap between the provider's fee and the payer's payment, which remains legal in non-NSA-protected situations.
How long does the IDR process take?
Open negotiation runs 30 business days. Providers then have a 4-day window to initiate IDR, followed by up to 30 business days for a decision and 30 calendar days for payment. In practice, backlogs often stretch this further.
Do behavioral health and TMS practices face unique NSA challenges?
Yes. CPT codes 90867-90869, frequent prior authorization requirements, and lower QPA benchmarks in behavioral health and TMS all add friction to NSA compliance.
What is a Good Faith Estimate and who needs one?
A GFE is a written cost estimate required for uninsured or self-pay patients before scheduled services. It must detail expected charges, diagnosis codes, and service codes ahead of treatment.
