What is the $400 rule?

A client may start patient-provider dispute resolution when billed charges come to $400 or more above the total on their Good Faith Estimate, for a single provider. It is an absolute dollar figure, not a percentage.

How long does a client have to dispute a bill?

120 days from receiving the disputed bill, paying a small administrative fee to initiate. While the dispute runs, the provider may not begin or continue collection efforts on the disputed amount.

The $400 rule and the dispute process

Q: What does a provider have to prove?

That the item or service was medically necessary and arose from circumstances that could not reasonably have been anticipated when the estimate was written. A course of therapy simply running longer than expected is difficult to describe that way.

A client can dispute a bill that lands $400 or more above the estimate. Understanding what you would have to prove is the best argument for estimating carefully.

Reviewed August 2026 · Not legal advice

A Good Faith Estimate is not merely informational. It sets a number the client can hold you to. If the bill arrives at least $400 above it, they can take the difference to an independent reviewer rather than argue with you about it.

The threshold

Patient-provider dispute resolution becomes available when billed charges are $400 or more above the total on the estimate, for a single provider. It is an absolute figure, not a percentage. For a therapy practice at typical session fees, three unestimated sessions can clear it.

Where practices go wrong

The threshold is measured against the total on the estimate. Listing one session at $150 for a client you expect to see weekly for a year does not describe $150 of care — it describes roughly $7,800 of it. Every session beyond the first counts toward the gap.

How the process runs

The client has 120 days from receiving the disputed bill to initiate, paying a small administrative fee.
An independent dispute resolution entity — not the provider, not the client — decides what is actually owed.
While it is running, you may not begin or continue collection efforts on the disputed amount, and late fees on it must stop accruing.
Absent fraud, the determination binds both sides.

What you would have to show

The burden is a real one. To justify a charge that was omitted from the estimate or estimated too low, a provider has to show that the item or service was medically necessary and that it arose from circumstances that could not reasonably have been anticipated when the estimate was written.

Read that standard against ordinary therapy and the implication is uncomfortable. A course of care running longer than expected is a foreseeable feature of psychotherapy, not an unforeseen circumstance. A practice that estimated one session and billed forty is unlikely to characterise thirty-nine of them as unanticipated.

The practical conclusion is not that you must predict the future accurately. It is that the estimate should describe the course of care you actually anticipate, and be reissued when your expectation changes — which is what the recurring-services provision exists to allow.

Estimating high is not a fix

Since the threshold only bites when charges exceed the estimate, an obvious dodge is to pad every estimate. It is a poor strategy. A client deciding whether they can afford therapy is reading that number, and an inflated one costs you the client before it ever protects you. The document is also required to be a good faith effort — deliberate padding is not that.

The defensible position is an honest estimate of the care you expect, revised when your expectation genuinely changes.

Why the copy matters

A dispute can arrive months after the fact, and the estimate is your evidence of what you told the client and when. Retention is required for six years, and a practice that cannot produce the document is arguing from memory against a written bill.

EstimateHarbor is not a law firm and this page is not legal advice. It summarises the federal rule at 45 CFR § 149.610 as we read it, for general information. Your state may impose additional requirements, and how the rule applies to your practice is a question for your own counsel or professional association.