Foreign-Trade Zones Board
International Trade Administration
National Institute of Standards and Technology
National Oceanic and Atmospheric Administration
Centers for Disease Control and Prevention
Centers for Medicare & Medicaid Services
Food and Drug Administration
National Institutes of Health
Coast Guard
Transportation Security Administration
Fish and Wildlife Service
Land Management Bureau
Office of Natural Resources Revenue
Employee Benefits Security Administration
Federal Aviation Administration
Federal Motor Carrier Safety Administration
Federal Railroad Administration
National Highway Traffic Safety Administration
Internal Revenue Service
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
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Federal Aviation Administration (FAA), DOT.
Final rule.
The FAA is superseding Airworthiness Directive (AD) 2019-25-17, which applied to all The Boeing Company Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes. AD 2019-25-17 required revising the existing airplane flight manual (AFM) to prohibit selection of certain runways for airplanes equipped with certain software. Since the FAA issued AD 2019-25-17, Boeing has developed new software to address the unsafe condition. This AD was prompted by reports of display electronic unit (DEU) software errors on airplanes with a selected instrument approach to a specific runway. This AD retains the requirements of AD 2019-25-17. This AD also requires installing the new software and performing a software configuration check, which terminates the AFM revision. The FAA is issuing this AD to address the unsafe condition on these products.
This AD is effective October 28, 2024.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of October 28, 2024.
• For Boeing material identified in this AD, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110 SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; website
• You may view this material at the FAA, Airworthiness Products Section, Operational Safety Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195. It is also available at
Douglas Y. Tsuji, Aviation Safety Engineer, FAA, 2200 South 216th St., Des Moines, WA 98198; phone: 206-231-3548; email:
The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2019-25-17, Amendment 39-21016 (84 FR 71304, December 27, 2019) (AD 2019-25-17). AD 2019-25-17 applied to all the Boeing Company Model 737-600, -700, -700C, -800, -900, and -900ER (Model 737 NG) series airplanes (although the scope of the AD requirements is limited to operation at specific runways in the U.S., Colombia, and Guyana). The NPRM published in the
The FAA received comments from the Air Line Pilots Association, International (ALPA), who supported the NPRM without change.
The FAA received additional comments from three commenters, including Boeing, Southwest Airlines (SWA), and Pegasus Airlines. The following presents the comments received on the NPRM and the FAA's response to each comment.
Boeing requested that paragraph (m), “Alternative Methods of Compliance (AMOCs),” of the proposed AD be revised to allow airplanes with Common Display System (CDS) Block Point (BP) 06 an AMOC to the actions specified by paragraph (h) of the proposed AD. SWA requested allowing airplanes to continue to utilize CDS BP06 in lieu of the software update that would be required by paragraph (h) of the proposed AD (
The FAA agrees with allowing airplanes with CDS BP06 to be excepted
Pegasus Airlines requested adding a note to paragraph (c), “Applicability,” of the proposed AD as follows: “The scope of the AD requirements is limited to operation at the seven runways identified in figure 1 to paragraph (g) of this AD.” The commenter stated that the note was in AD 2019-25-17 and should be included in this AD.
The FAA disagrees with the commenter. The requirements of this AD, notably the software update, must be done by all applicable airplanes regardless of runway operation. The FAA has not changed this AD in this regard.
Aviation Partners Boeing stated that the installation of winglets per Supplemental Type Certificate STC ST00830SE does not affect the accomplishment of the manufacturer's service instructions.
The FAA agrees with the commenter that STC ST00830SE does not affect the accomplishment of the manufacturer's service instructions. Therefore, the installation of STC ST00830SE does not affect the ability to accomplish the actions required by this AD. The FAA has not changed this AD in this regard.
The FAA reviewed the relevant data, considered any comments received, and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on these products. Except for minor editorial changes, and any other changes described previously, this AD is adopted as proposed in the NPRM. None of the changes will increase the economic burden on any operator.
The FAA reviewed Boeing Alert Requirements Bulletin 737-31A1880 RB, Revision 1, dated September 16, 2020. This material specifies procedures for installing the CDS DEU OPS block point 2015A and performing a software configuration check. This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
The FAA estimates that this AD affects 1,739 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Will not affect intrastate aviation in Alaska, and
(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This airworthiness directive (AD) is effective October 28, 2024.
This AD replaces AD 2019-25-17, Amendment 39-21016 (84 FR 71304, December 27, 2019) (AD 2019-25-17).
This AD applies to all The Boeing Company Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes, certificated in any category.
Air Transport Association (ATA) of America Code 31, Instruments.
This AD was prompted by reports of display electronic unit (DEU) software errors on airplanes with a selected instrument approach to a specific runway. The FAA is proposing this AD to address the potential for all six display units (DUs) to blank, which can prevent continued safe flight and landing.
Comply with this AD within the compliance times specified, unless already done.
This paragraph restates the requirements of paragraph (g) of AD 2019-25-17, with no changes. Within 14 days after December 27, 2019 (the effective date of AD 2019-25-17), revise the Miscellaneous Limitations section of the existing airplane flight manual (AFM) to include the information in figure 1 to paragraph (g) of this AD. This may be done by inserting a copy of figure 1 to paragraph (g) of this AD into the Miscellaneous Limitations section of the existing AFM.
Except as specified in paragraph (i) of this AD: At the applicable times specified in paragraph 1.E., “Compliance,” of Boeing Alert Requirements Bulletin 737-31A1880 RB, Revision 1, dated September 16, 2020, do all applicable actions identified in, and in accordance with, the Accomplishment Instructions of Boeing Alert Requirements Bulletin 737-31A1880 RB, Revision 1, dated September 16, 2020.
Guidance for accomplishing the actions required by paragraph (h) of this AD can be found in Boeing Alert Service Bulletin 737-31A1880, Revision 1, dated September 16, 2020, which is referred to in Boeing Alert Requirements Bulletin 737-31A1880 RB, Revision 1, dated September 16, 2020.
(1) Where the Compliance Time columns of the tables in the “Compliance” paragraph of Boeing Alert Requirements Bulletin 737-31A1880 RB, Revision 1, dated September 16, 2020, use the phrase “Within 12 months—after the Revision 1 date of Requirements Bulletin 737-31A1880 RB,” this AD requires using “Within 12 months after the effective date of this AD.”
(2) The requirements of paragraph (h) of this AD do not apply to airplanes with Common Display System (CDS) Block Point 06 installed.
Accomplishment of the actions specified by paragraph (h) of this AD by an operator's entire affected fleet terminates the actions required by paragraph (g) of this AD, and the AFM revision required by paragraph (g) of this AD may be removed from the AFM.
This paragraph provides credit for the actions specified in paragraph (h) of this AD, if those actions were performed before the effective date of this AD using Boeing Alert Requirements Bulletin 737-31A1880 RB, dated April 17, 2020, which is not incorporated by reference in this AD.
Special flight permits may be issued in accordance with 14 CFR 21.197 and 21.199 to operate the airplane to a location where the actions required by this AD can be performed, provided the airplane is operated in accordance with the AFM limitation required by paragraph (g) of this AD.
(1) The Manager, Continued Operational Safety Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19.
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the responsible Flight Standards Office.
(3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by The Boeing Company Organization Designation Authorization (ODA) that has been authorized by the Manager, Continued Operational Safety Branch, FAA, to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.
(1) For more information about this AD, contact Douglas Y. Tsuji, Aviation Safety Engineer, FAA, 2200 South 216th St., Des Moines, WA 98198; phone: 206-231-3548; email:
(2) Material identified in this AD that is not incorporated by reference is available at the addresses specified in paragraph (o)(3) of this AD.
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the material listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this material as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) Boeing Alert Requirements Bulletin 737-31A1880 RB, Revision 1, dated September 16, 2020.
(ii) [Reserved]
(3) For Boeing material identified in this AD, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110 SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; website myboeingfleet.com.
(4) You may view this material at the FAA, Airworthiness Products Section, Operational Safety Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.
(5) You may view this material that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, email
Food and Drug Administration (FDA), Department of Health and Human Services (HHS).
Final amendment; final order.
The Food and Drug Administration (FDA or the Agency) is issuing a final order to reclassify cytomegalovirus (CMV) deoxyribonucleic acid (DNA) quantitative assay devices intended for transplant patient management, a postamendments class III device (product code PAB) into class II (general controls and special controls), subject to premarket notification.
This order is effective October 23, 2024.
For access to the docket to read background documents or the electronic and-written/paper comments received, go to
Silke Schlottmann, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 3258, Silver Spring, MD 20993-0002, 301-796-9551,
The Federal Food, Drug, and Cosmetic Act (FD&C Act), as amended, by the Medical Device Amendments of 1976 (the 1976 amendments) (Pub. L. 94-295), the Safe Medical Devices Act of 1990 (Pub. L. 101-629), the Food and Drug Administration Modernization Act of 1997 (Pub. L. 105-115), the Medical Device User Fee and Modernization Act of 2002 (Pub. L. 107-250), the Medical Devices Technical Corrections Act (Pub. L. 108-214), the Food and Drug Administration Amendments Act of 2007 (Pub. L. 110-85), and the Food and Drug Administration Safety and Innovation Act (Pub. L. 112-144), among other amendments, establishes a comprehensive system for the regulation of medical devices intended for human use. Section 513 of the FD&C Act (21 U.S.C. 360c) established three classes of devices, reflecting the regulatory controls needed to provide reasonable assurance of their safety and effectiveness. The three classes of devices are class I (general controls), class II (general controls and special controls), and class III (general controls and premarket approval).
Devices that were not in commercial distribution prior to May 28, 1976 (generally referred to as postamendments devices) are automatically classified by section 513(f)(1) of the FD&C Act into class III without any FDA rulemaking process. Those devices remain in class III and require premarket approval, unless and until: (1) FDA reclassifies the device into class I or class II or (2) FDA issues an order finding the device to be substantially equivalent, in accordance with section 513(i) of the FD&C Act, to a predicate device that does not require premarket approval. FDA determines whether new devices are substantially equivalent to predicate devices by means of premarket notification procedures in section 510(k) of the FD&C Act (21 U.S.C. 360(k)) and part 807 (21 CFR part 807), subpart E, of FDA's regulations.
A postamendments device that has been initially classified in class III under section 513(f)(1) of the FD&C Act may be reclassified into class I or II under section 513(f)(3) of the FD&C Act. Section 513(f)(3) of the FD&C Act provides that FDA, acting by administrative order, can reclassify the device into class I or class II on its own initiative, or in response to a petition from the manufacturer or importer of the device. To change the classification of the device, the proposed new class must have sufficient regulatory controls to provide a reasonable assurance of the safety and effectiveness of the device for its intended use.
In the
Based on the information discussed in the preamble to the proposed order (85 FR 58300), the supportive comments received on the proposed order, and FDA's experience over the years with this device type, FDA concludes that special controls, in conjunction with general controls, will provide reasonable assurance of the safety and effectiveness of CMV transplant assays. Therefore, in accordance with section 513(f)(3) of the FD&C Act, FDA is issuing this final order to reclassify CMV transplant assays from class III into class II, subject to premarket notification. This final order will be codified at 21 CFR 866.3180.
Section 510(m) of the FD&C Act provides that a class II device may be exempted from the premarket notification requirements under section 510(k) of the FD&C Act, if the Agency determines that premarket notification is not necessary to reasonably assure the safety and effectiveness of the device. FDA has determined that premarket notification is necessary to reasonably assure the safety and effectiveness of CMV transplant assays. Therefore, the Agency does not intend to exempt these class II devices from premarket notification (510(k)) submission as provided under section 510(m) of the FD&C Act.
The devices that are the subject of this reclassification are assigned the generic name “quantitative CMV nucleic acid tests for transplant patient management.” These devices are identified as a quantitative CMV nucleic acid test for transplant patient management, a device intended for prescription use in the detection of CMV and as an aid in the management of transplant patients to measure CMV DNA levels in human plasma and/or whole blood using specified specimen processing, amplification, and detection instrumentation. The test is intended for use as an aid in the management of transplant patients with active CMV infection or at risk for developing CMV infection. The test results are intended to be interpreted by qualified healthcare professionals in conjunction with other relevant clinical and laboratory findings.
Under this final order, CMV transplant assays are prescription devices requiring the supervision of a practitioner licensed by law to direct the use of the devices in order to ensure accurate interpretation of results, ensuring the devices provide a reasonable assurance of safety and effectiveness. As such, the prescription device must satisfy prescription labeling requirements for in vitro diagnostic products (see 21 CFR 809.10(a)(4) and (b)(5)(ii)).
In addition, the Agency believes that certain changes could be made to CMV transplant assays that could significantly affect the safety and effectiveness of those devices and for which a new 510(k) is likely required.
The order is effective 30 days after its date of publication in the
The Agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.
This final order establishes special controls that refer to previously approved collections of information found in other FDA regulations and guidance. Those collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3521). The collections of information in 21 CFR part 807, subpart E, have been approved under OMB control number 0910-0120, the collections of information in 21 CFR part 820 have been approved under OMB control number 0910-0073, and the collections of information in 21 CFR parts 801 and 809 have been approved under OMB control number 0910-0485.
Under section 513(f)(3) of the FD&C Act, FDA may issue final orders to reclassify devices. FDA will continue to codify classifications and reclassifications in the Code of Federal Regulations (CFR). Changes resulting from final orders will appear in the CFR as newly codified orders. Therefore, under section 513(f)(3), CMV transplant assays are codified in the new 21 CFR 866.3180 under which CMV transplant assays are renamed quantitative CMV nucleic acid tests for transplant patient management and are reclassified from class III into class II.
The following references marked with an asterisk (*) are on display in the Dockets Management Staff (see
Biologics, Laboratories, Medical devices.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 866 is amended as follows:
21 U.S.C. 351, 360, 360c, 360e, 360j, 360
(a)
(b)
(1) The labeling required under § 809.10(b) of this chapter must include:
(i) A prominent statement that the device is not intended for use as a donor screening test for the presence of CMV DNA in blood or blood products.
(ii) Limitations, which must be updated to reflect current clinical practice. The limitations must include, but are not limited to, statements that indicate:
(A) Test results are to be interpreted by qualified licensed healthcare professionals in conjunction with clinical signs and symptoms and other relevant laboratory results;
(B) Negative test results do not preclude CMV infection or tissue invasive CMV disease, and that CMV test results must not be the sole basis for patient management decisions.
(iii) A detailed explanation of the interpretation of results and acceptance criteria must be provided and include specific warnings regarding the potential for variability in CMV viral load measurement when samples are measured by different devices. Warnings must include the following statement, where applicable: “Due to the potential for variability in CMV viral load measurements across different CMV assays, it is recommended that the same device be used for the quantitation of CMV viral load when managing CMV infection in individual patients.”
(iv) A detailed explanation of the principles of operation and procedures for assay performance.
(2) Design verification and validation must include the following:
(i) Detailed documentation of the device description, including all parts that make up the device, reagents required for use with the CMV assay but not provided, an explanation of the methodology, design of the primer/probe sequences, rationale for the selected gene target, and specifications for amplicon size, guanine-cytosine content, and degree of nucleic acid sequence conservation. The design and nature of all primary, secondary, and tertiary quantitation standards used for calibration must also be described.
(ii) A detailed description of the impact of any software, including software applications and hardware-based devices that incorporate software, on the device's function.
(iii) Documentation and characterization of all critical reagents (
(iv) Stability data for reagents provided with the device and indicated specimen types, in addition to the basis for the stability acceptance criteria at all time points chosen across the spectrum of the device's indicated life cycle, which must include a time point at the end of shelf life.
(v) All stability protocols, including acceptance criteria.
(vi) Final lot release criteria, along with documentation of an appropriate justification that lots released at the extremes of the specifications will meet the claimed analytical and clinical performance characteristics as well as the stability claims.
(vii) Risk analysis and documentation demonstrating how risk control measures are implemented to address device system hazards, such as Failure Modes Effects Analysis and/or Hazard Analysis. This documentation must include a detailed description of a protocol (including all procedures and methods) for the continuous monitoring, identification, and handling of genetic mutations and/or novel CMV stains (
(viii) Analytical performance testing that includes:
(A) Detailed documentation of the following analytical performance studies: Limit of detection, upper and lower limits of quantitation, inclusivity, precision, reproducibility, interference, cross reactivity, carryover, quality control, specimen stability studies, and additional studies as applicable to specimen type and intended use for the device.
(B) Identification of the CMV strains selected for use in analytical studies, which must be representative of clinically relevant circulating strains.
(C) Inclusivity study results obtained with a variety of CMV genotypes as applicable to the specific assay target and supplemented by in silico analysis.
(D) Reproducibility studies that include the testing of three independent production lots.
(E) Documentation of calibration to a standardized reference material that FDA has determined is appropriate for the quantification of CMV DNA (
(F) Documentation of traceability performed each time a new lot of the standardized reference material to which the device is traceable is released, or when the field transitions to a new standardized reference material.
(ix) Clinical performance testing that includes:
(A) Detailed documentation of device performance data from either a method comparison study with a comparator that FDA has determined is appropriate, or results from a prospective clinical study demonstrating clinical validity of the device.
(B) Data from patient samples, with an acceptable number of the CMV positive samples containing an analyte concentration near the lower limit of quantitation and any clinically relevant decision points.
(C) The method comparison study must include predefined maximum acceptable differences between the test and comparator method across all primary outcome measures in the clinical study protocol.
(D) The final release test results for each lot used in the clinical study.
Coast Guard, DHS.
Temporary Interim Rule and request for comments.
The Coast Guard is establishing a temporary safety zone on the navigable waters at mile 1.0 Danvers River, within a 100-yard radius of the center point of the Kernwood Avenue Bridge between Salem, MA and Beverly, MA. The temporary safety zone is necessary to protect personnel, vessels and the marine environment from potential hazards created during bridge repairs. When enforced, entry of vessels or persons into this zone is prohibited unless specifically authorized by the Captain of the Port Boston or a designated representative.
You may submit comments identified by docket number USCG-2024-0820 using the Federal e-Rulemaking Portal at
If you have questions about this rulemaking, call or email Mr. Timothy Chase, Waterways Management Division, U.S. Coast Guard Sector Boston, telephone 617-447-1620, or email
On August 28, 2024, the Massachusetts Department of Transportation (MassDOT) bridge division notified the Waterways Management Division of U. S. Coast Guard Sector Boston that operations to make repairs to the Kernwood Avenue Bridge, spanning the Danvers River between Salem, MA, and Beverly, MA, will begin September 15, 2024.
The Coast Guard is issuing this temporary rule under the authority in 5 U.S.C. 553(b)(B). This statutory provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” The Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because the construction schedule for Kernwood Avenue Bridge was only recently finalized and prompt action is needed to respond to the potential safety hazards associated with this project. It is impracticable and contrary to the public interest to publish an NPRM because prompt action is needed to establish this safety zone by September 15, 2024, to allow for the timely repairs to the Kernwood Avenue Bridge and ensure the safety of mariners transiting the area from the dangers associated with the operations associated with these repairs.
Also, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
Although this regulation is published as an interim rule without prior notice, public comment is nevertheless desirable to ensure that the regulation is both workable and reasonable. Accordingly, persons wishing to comment may do so by submitting written comments as set out under
The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034. The Captain of the Port Boston (COTP) has determined that potential hazards associated with bridge repair operations starting September 15, 2024, will be a safety concern for anyone within a 100-yard radius of the center point of the Kernwood Avenue Bridge. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone while bridge repair operations are taking place.
This rule establishes a safety zone from September 15, 2024, through 11:59 p.m. on December 31, 2024. While the safety zone will be effective through this period, it will only be enforced during active repair operations, when work barges and cranes will be placed in the narrow navigable channel, or other instances which may create a hazard to navigation. The active repair operations will take place during the overnight hours, from 9 p.m. through 5 a.m., Sunday through Thursday, when boating traffic is minimal.
The safety zone will cover all navigable waters within a 100-yard radius of the center point of the MassDOT Kernwood Avenue Bridge, at mile 1.0, spanning the Danvers River, between Salem, MA, and Beverly, MA, in approximate position 42°32′34.8″ N 70°53′54.2″ W (NAD 83). During times of enforcement, all persons or vessels will be prohibited from entering the safety zone without permission from the COTP or a designated representative.
The Coast Guard will make notice of the safety zone via the Local Notice to Mariners and issue a Broadcast Notice to Mariners via marine channel 16 (VHF-FM) as soon as practicable in
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. This rule has not been designated a “significant regulatory action,” under section 3(f) of Executive Order 12866, as amended by Executive Order 14094 (Modernizing Regulatory Review). Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB).
This regulatory action determination is based on the size, location, duration, and time of year of the safety zone. Vessel traffic will not be able to safely transit around this safety zone when enforced. As a result, enforcement of the safety zone will be limited in duration during active repair operations, in the overnight hours, Sunday through Thursday, during the winter months when vessel traffic is minimal. Additionally, the Salem, Beverly, and Danvers Harbor Masters will be on scene during work hours to inform any potential vessels of the safety zone. The Coast Guard will make notice of this safety zone via the Local Notice to Mariners and issue a Broadcast Notice to Mariners via marine channel 16 (VHF-FM) as soon as practicable in response to an emergency or hazardous condition. This rule also allows vessels to seek permission to enter the zone.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator because they are able to transit with permission from COTP or the COTP's designated representative.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule will affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule does not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969(42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves the establishment of a temporary safety zone for the navigable waters within 100-yard radius of the center point of the MassDOT Kernwood Avenue Bridge, at mile 1.0, spanning the Danvers River between Salem, MA, and Beverly, MA, from September 15, 2024, through December 31, 2024, during active repair operation on the bridge. The safety zone will only be enforced from 9 p.m. to 5 a.m. Sunday through Thursday, when work barges and cranes will be placed in the narrow navigable channel, or in response to an emergency or hazardous condition. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
We view public participation as essential to effective rulemaking and will consider all comments and material received during the comment period. If we determine that changes to the temporary interim rule are necessary, the Coast Guard will publish a temporary final rule or other appropriate document. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.
Submitting comments. We encourage you to submit comments through the Federal Decision-Making Portal at
Viewing material in docket. To view documents mentioned in this temporary interim rule as being available in the docket, find the docket as described in the previous paragraph, and then select “Supporting & Related Material” in the Document Type column. Public comments will also be placed in our online docket and can be viewed by following instructions on the
We review all comments received, but we will only post comments that address the topic of the rule. We may choose not to post off-topic, inappropriate, or duplicate comments that we receive.
Personal information. We accept anonymous comments. Comments we post to
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
46 U.S.C. 70034, 70051, 70124; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 00170.1, Revision No. 01.3.
(a)
(b)
(c)
(d)
(1) No person or vessel may enter or remain in the safety zone described in paragraph (a) of this section without the permission of the COTP or the COTP's designated representatives. Any person or vessel permitted to enter the safety zone must comply with the lawful directions and orders of the COTP or the COTP's designated representatives.
(2) To seek permission to enter the safety zone, individuals may reach the COTP or a COTP-designated representative via Channel 16 (VHF-FM) or (857) 416-3015 (Sector Boston Command Center).
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone within 656 yards of the Andrew D. Byers Water Circular DZ, adjacent to Hamburg Beach on Lake Erie. The safety zone is needed to protect personnel, vessels, and the marine environment from potential hazards created by a military exercise. Entry of vessels or persons into this zone is prohibited unless specifically authorized by the Captain of the Port Eastern Great Lakes or a designated representative.
This rule is effective from 6 a.m. through 11:30 p.m. from September 26, 2024, through September 27, 2024.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions about this rule, call or email Lieutenant William Kelley, Waterways Management, U.S. Coast Guard; telephone (716) 931-4680, email
The Coast Guard is issuing this temporary rule under authority in 5 U.S.C. 553(b)(B). This statutory provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” The Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because insufficient notice was given by the sponsor to provide for a comment period prior to the date of safety zone implementation and prompt action is needed to prevent the endangerment of the general public.
Also, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034. The Captain of the Port Eastern Great Lakes (COTP) has determined that potential hazards exist associated with U.S. Army SOF Water Operations from September 26, 2024 through September 27, 2024. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone while exercises are being conducted.
This rule establishes a safety zone from 6 a.m. through 11:30 p.m. from September 26, 2024 through September 27, 2024. The safety zone will cover all navigable waters within 656 yards of the Andrew D. Byers Water Circular DZ on Lake Erie near Hamburg, NY, during a military exercise. The duration of the zone is intended to protect personnel, vessels, and the marine environment in these navigable waters while the exercise is in progress. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative. View the regulatory text at the end of this document to see the precise coordinates for the center of the radius.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. This rule has not been designated a “significant regulatory action,” under section 3(f) of Executive Order 12866, as amended by Executive Order 14094 (Modernizing Regulatory Review). Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB).
This regulatory action determination is based on the necessity to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone while exercises are being conducted.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone lasting 35 hours over two days that will prohibit entry within 656 yards of 42°46′20.6″ N,78°52′42.5″ W. It is categorically excluded from further review under paragraph L60a of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to call or email the person listed in the
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
46 U.S.C. 70034, 70051, 70124; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 00170.1, Revision No. 01.3.
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(b)
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(2) To seek permission to enter, contact the COTP or the COTP's representative by phone: (716) 843-9560. Those in the safety zone must comply with all lawful orders or directions given to them by the COTP or the COTP's designated representative.
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National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; quota transfer.
NMFS announces that the State of North Carolina is transferring a portion of its 2024 commercial summer flounder quota to the State of New Jersey. This adjustment to the 2024 fishing year quota is necessary to comply with the Summer Flounder, Scup, and Black Sea Bass Fishery Management Plan (FMP) quota transfer provisions. This announcement informs the public of the revised 2024 commercial quotas for North Carolina and New Jersey.
Effective September 20, 2024, through December 31, 2024.
Matthew Rigdon, Fishery Resource Management Specialist, (978) 281-9336.
Regulations governing the summer flounder fishery are found in 50 CFR 648.100 through 648.111. These regulations require annual specification of a commercial quota that is apportioned among the coastal states from Maine through North Carolina. The process to set the annual commercial quota and the percent allocated to each state is described in § 648.102, and the final 2024 allocations were published on December 21, 2023 (88 FR 88266).
The final rule implementing amendment 5 to the FMP, as published in the
North Carolina is transferring 9,340 pounds (lb; 4,237 kilograms (kg)) to New Jersey through a mutual agreement between the states. This transfer was requested to repay landings made by an
NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is required by 50 CFR 648.102(c)(2)(i) through (iv), which was issued pursuant to section 304(b) of the Magnuson-Stevens Act, and is exempted from review under Executive Order 12866.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; closure.
NMFS is prohibiting directed fishing for Pacific ocean perch in the Central Aleutian district (CAI) of the Bering Sea and Aleutian Islands management area (BSAI) by vessels participating in the BSAI trawl limited access sector fishery. This action is necessary to prevent exceeding the 2024 total allowable catch (TAC) of Pacific ocean perch in the CAI allocated to vessels participating in the BSAI trawl limited access sector fishery.
Effective 1200 hours, Alaska local time (A.l.t.), September 19, 2024, through 2400 hours, A.l.t., December 31, 2024.
Steve Whitney, 907-586-7228.
NMFS manages the groundfish fishery in the BSAI exclusive economic zone according to the Fishery Management Plan (FMP) for Groundfish of the BSAI prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). Regulations governing fishing by U.S. vessels in accordance with the BSAI FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.
The 2024 TAC of Pacific ocean perch, in the CAI, allocated to vessels participating in the BSAI trawl limited access sector fishery was established as a directed fishing allowance of 487 metric tons by the final 2024 and 2025 harvest specifications for groundfish in the BSAI (89 FR 17287, March 11, 2024).
In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for Pacific ocean perch in the CAI by vessels participating in the BSAI trawl limited access sector fishery. While this closure is effective, the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.
NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is required by 50 CFR part 679, which was issued pursuant to section 304(b), and is exempt from review under Executive Order 12866.
Pursuant to 5 U.S.C. 553(b)(B), there is good cause to waive prior notice and an opportunity for public comment on this action, as notice and comment would be impracticable and contrary to the public interest, as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion, and would delay the closure of Pacific ocean perch directed fishery in the CAI for vessels participating in the BSAI trawl limited access sector fishery. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of September 13, 2024.
The Assistant Administrator for Fisheries, NOAA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.
16 U.S.C. 1801
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to supersede Airworthiness Directive (AD) 2020-26-16, which applies to certain Piper Aircraft, Inc. (Piper) Model PA-28-151, PA-28-161, PA-28-181, PA-28-235, PA-28R-180, PA-28R-200, PA-28R-201, PA-28R-201T, PA-28RT-201, PA-28RT-201T, PA-32-260, PA-32-300, PA-32R-300, PA-32RT-300, and PA-32RT-300T airplanes. AD 2020-26-16 requires calculating the factored service hours (FSH) for each main wing spar to determine when an inspection is required, inspecting the lower main wing spar bolt holes for crack(s), and replacing any cracked main wing spar. Since the FAA issued AD 2020-26-16, the FAA evaluated the reports required by AD 2020-26-16 and determined that repetitive inspections of the lower main wing spar bolt holes for crack(s) and non-crack damage (including deep scratches, gouges, and thread marks) and replacement or modification of the main wing spar should be required, calculated service hours (CSH) should be used instead of FSH to determine times for required actions for each main wing spar, and that certain airplanes should be removed from the applicability and a new airplane model added to the applicability. This proposed AD would require calculating the CSH for each main wing spar; repetitively inspecting the lower main wing spar bolt holes for crack(s) and non-crack damage and taking corrective actions as needed; and replacing or modifying main wing spars at a specified time. This proposed AD would also revise the applicability by removing certain airplanes and adding a new airplane model. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by November 7, 2024.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
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• For Piper material identified in this proposed AD, contact Piper Aircraft, Inc., 2926 Piper Drive, Vero Beach, Florida 32960; phone: (772) 567-4361; email:
• You may view this material at the FAA, Airworthiness Products Section, Operational Safety Branch, 901 Locust, Kansas City, MO 64106. For information on the availability of this material at the FAA, call (817) 222-5110.
Fred Caplan, Aviation Safety Engineer, FAA, 1701 Columbia Avenue, College Park, GA 30337; phone: (404) 474-5507; email:
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Fred Caplan, Aviation Safety Engineer, FAA, 1701 Columbia Avenue, College Park, GA 30337. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.
The FAA issued AD 2020-26-16, Amendment 39-21371 (86 FR 3769, January 15, 2021) (AD 2020-26-16), for certain Piper Model PA-28-151, PA-28-161, PA-28-181, PA-28-235, PA-28R-180, PA-28R-200, PA-28R-201, PA-28R-201T, PA-28RT-201, PA-28RT-201T, PA-32-260, PA-32-300, PA-32R-300, PA-32RT-300, and PA-
AD 2020-26-16 requires calculating the FSH for each main wing spar to determine when an inspection is required, inspecting the lower main wing spar bolt holes for cracks, and replacing any cracked main wing spar. The agency issued AD 2020-26-16 to detect and correct fatigue cracks in the lower main wing spar cap bolt holes.
The preamble to AD 2020-26-16 explains that the FAA considers the requirements “interim action” and was considering further rulemaking. The FAA has now determined that further rulemaking is necessary, and this proposed AD follows from that determination. The FAA evaluated the inspection reports submitted by operators as required by AD 2020-26-16 and determined that additional action is needed, including requiring repetitive inspections of the lower main wing spar bolt holes for crack(s) and non-crack damage and replacement or modification of the main wing spar, using CSH instead of FSH to determine times for required actions, and revising the applicability by removing certain serial-numbered Piper Model PA-32-300 airplanes and all Model PA-32R-300, PA-32RT-300, and PA-32RT-300T airplanes because those airplanes would be included in the applicability of a proposed separate rulemaking action. The FAA also determined that Piper Model PA-32S-300 airplanes should be added to the applicability.
Since the FAA issued AD 2020-26-16, the FAA has analyzed the accident history of the airplanes affected by AD 2020-26-16 and other Piper airplanes operated in a similar fashion. The following paragraphs communicate the FAA's findings on this subject.
Fatigue cracking was present in the main wing spars of Piper Model PA-28-181, Model PA-28R-201, and Model PA-28-161 airplanes involved in the following accidents. The following NTSB reports are related to this issue and can be found on ntsb.gov.
• NTSB Accident Number FTW87FA088: March 30, 1987—Marlin, TX—Piper Model PA-28-181—7,490 hours time-in-service (TIS). This accident was determined to have been caused by fatigue cracking in the outboard bolt holes of the main wing spar. This airplane's primary usage was a “Pipeline Patrol” mission.
• NTSB Accident Number NYC93FA140: August 2, 1993—Provincetown, MA—Piper Model PA-28-181—11,683 hours TIS. This accident was determined to have been caused by structural overloading related to weather, but fatigue cracks were present near the outboard bolt holes. This airplane's usage history included personal use, flight instruction, and charter flights.
• NTSB Accident Number ERA18FA120: April 4, 2018—Daytona Beach, FL—Piper Model PA-28R-201—7,691 hours TIS. This accident was determined to have been caused by fatigue cracking in the outboard bolt holes of the main wing spar. This airplane's primary usage was flight instruction.
Following the release of AD 2020-26-16, the FAA and Piper received over 2,800 bolt-hole eddy current inspection reports. The inspections performed in the field revealed a mix of observations that warrant further discussion. Of the total inspections, over 100 reported a positive eddy current indication, with several including pictures of the bolt hole showing the source of the indication.
Piper later conducted more detailed inspections in a study of 24 main wing spars with 20 having positive eddy current indications. Out of the 20 positive indications, 3 were identified as fatigue cracks, where 1 was confirmed by Piper, and 2 were confirmed by the NTSB. The remaining were determined to be features not consistent with a crack, and 1 overstress crack as confirmed by the NTSB.
Though not all are confirmed, many of the indications are likely not fatigue cracks but are a variety of anomalies in the hole. These can include corrosion pitting, scratches, gouges, and threading marks possibly caused by forceful insertion and removal of the close-fit bolts without proper unloading of the wing or other reasons. While these may not present as fatigue cracks at the time of inspection, anomalies in the hole create a stress concentration where cracks can begin to grow. Therefore, it is still crucial to inspect the critical bolt holes for these issues and take corrective action to prevent the formation of fatigue cracks. Piper Service Bulletin No. 1345, Revision A, dated September 17, 2021 (Piper SB No. 1345, Revision A); and Piper Service Bulletin No. 1372, dated April 3, 2024 (Piper SB No. 1372), include procedures for distinguishing between indications caused by hole damage or other anomalies from those caused by cracks.
In addition to the various forms of non-crack hole damage, the inspections revealed several cracks in and around the bolt holes. As part of the AD 2020-26-16 inspection reports, 6 cracks were found, including 2 later verified by NTSB lab examination and 1 verified by Piper (from the Piper study referenced above), and 3 visible cracks in photos. Other known cracks include those found in an airplane of the same operator fleet as the 2018 accident airplane, a separately submitted crack finding confirmed with dye penetrant, and a crack located on the lower spar cap surface running alongside the inspection bolt holes. Given these findings, additional cracks may be present among the other unconfirmed reported indications.
Other cracks have been discovered that may be caused by overload rather than by fatigue. While use of the airplane within its limits should not cause an overload crack, some crack findings have revealed that airplanes have been operated outside their limits. Though cracks due to overload are not the primary source of this corrective action, this emphasizes the need for and importance of inspecting the spar bolt holes for evidence of any cracking.
The AD 2020-26-16 inspection report results indicated that additional inspections are needed to manage the safety of the fleet. While AD 2020-26-16 addressed the immediate safety concern, data indicates that more airplanes will need to be inspected and, due to aging, the airplanes already inspected will need additional inspections. This includes the need to expand inspections to include Piper Model PA-32S-300 airplanes in the applicability of this proposed AD because these airplanes share a similar structural design of the main wing spar
Crack development is a function of many factors, including the design of the structure, how severely the aircraft is flown, and manufacturing processes. Small imperfections may exist in any aircraft structure from an early age; however, through operation, these imperfections may slowly grow into fatigue cracks. Fatigue cracks have the effect of weakening the structure and its ability to support the stresses the aircraft was originally designed to handle.
The 2018 accident, along with other accidents in this fleet attributed to fatigue cracking, and the AD 2020-26-16 inspection reports, indicate an aging fleet that requires intervention to ensure any fatigue cracking does not reach a critical state prior to being detected. This often takes the form of repetitive inspections to be able to capture the formation of a detectable crack, requiring repair or replacement. The FAA has also determined that inspections alone are not sufficient to keep the fleet risk acceptably low long-term. Cracks are more likely to develop with aging of the main wing spar, so over time it becomes more likely that cracks will exist throughout the fleet and could be missed by inspection, due in part to the inherent imperfections of the inspection method; therefore, replacement or modification of the spars is needed. Both the FAA and Piper attempted to determine an inspection program that would manage risk to an acceptable level using inspection alone; however, no method could be found that did not eventually require spar replacement.
Ensuring further damage is not caused by the inspection itself is important, especially with repetitive inspections; however, inspecting for fatigue cracks as well as other hole anomalies is critical and outweighs the risk associated with repetitive inspections. Additionally, repeated inspections inherently allow for continued direct observation of the bolt holes over time and correcting non-crack damage if necessary. Piper has developed service actions, most recently in Piper SB No. 1345, Revision A, and Piper SB No. 1372, that mitigate inspection-induced damage by emphasizing proper unloading of the wing for both bolt and wing removal and replacement, if necessary, along with other instructions for ensuring care of the bolt holes.
Each requirement outlined in this proposed AD has been developed to both address the unsafe condition and limit the number of required inspections, reducing the burden on operators where possible. A brief discussion of each aspect of the requirements continues below.
The inspection data received via the reporting requirement in AD 2020-26-16, along with testing of the baseline spar common to all Piper Model PA-28 and PA-32 airplanes has shown that inspections should be extended to include all models that share a similar structural design by utilizing the same baseline spar. It is likely that a significant contributing factor in the formation of cracks found in the main wing spar bolt attachment area is the cold bending of the spar to achieve the wing's dihedral. This method of forming the spar dihedral combined with the proximity to the wing attachment bolt holes leads to high residual stress in that area. The potential for fatigue cracking in and around the bolt holes, as well as higher variability in crack location and severity, is higher under this constant additional stress.
In an attempt to support less onerous inspections and to understand the causal factors, Piper investigated the residual stresses in the critical bolt-hole area. That investigation showed that the residual stress due to the spar cold bending process is a significant contributing factor in reducing the fatigue life of the spar bolt holes. An additional outcome of this investigation is a change to all new manufactured spars having machined dihedral bends to eliminate the residual stresses in the critical area.
Though there are differences between all Model PA-28 and PA-32 airplanes, such as additional reinforcing structure and lower operational loads, all airplane models share this same baseline spar with the cold bent dihedral. Differing characteristics allow for a grouping and tailoring of the requirements for each airplane model, but all airplane models need to be inspected. The current proposed requirements separate models into two groups, each requiring its own actions with a separate action for a third group under a separate proposed rulemaking action. The airplane models discussed share similar spar structure, while one group experiences higher operational loads than the other, due mostly to differences in gross weight and maximum airspeed. The remaining Piper Model PA-28 and PA-32 airplanes that would not be included in the applicability of this proposed AD either experience lower operational loads or have additional structure, both effectively lowering the stress experienced in the subject bolt holes of the baseline spar.
The potential for fatigue cracking of the main wing spar bolt holes is highly influenced by the usage profile of the spar and airplane. For airplanes included in the applicability of this proposed AD, the primary usage is either flight instruction or personal use. Flight instruction consists of more hours spent flying at lower altitudes where the airplane is exposed to gusts and more takeoffs and landings than is typical for personal usage. These characteristics lead to reaching the fatigue life of the spar more quickly than personal usage, which generally involves a large time spent in cruise and fewer takeoffs and landings. As a result of the usage differences, the same TIS for an airplane used in flight instruction is not equivalent to the same time for a personal-use airplane.
An FSH equation was established in AD 2020-26-16 to account for the differences in usage and reduce the burden on personal use airplanes. This equation is still the best method available to account for different usage when determining when inspections should occur. In the United States, airplanes used in flight instruction for hire are required by FAA regulation to receive 100-hour inspections. Because instructional usage is unable to be tracked directly, a count of these inspections is used as a method for determining instructional usage to differentiate it from personal usage.
When AD 2020-26-16 was issued, available analysis indicated instructional usage was approximately 17 times more severe than personal usage, leading to this factor appearing in the FSH equation. After AD 2020-26-16 was published, further analysis completed by Piper estimated this factor was significantly lower. This has resulted in a new equation, now referred to as CSH in Piper SB No. 1372. The CSH calculation has the same instructions and intent as the FSH from AD 2020-26-16, but the value in the equation has been updated based on improved analysis and data. For Group 1 airplanes this proposed AD would require using a value of 3 instead of the value of 2 that is specified in Piper SB No. 1372, and a value of 2 would be used for Group 2 airplanes, as specified in Piper SB No. 1372.
The fleet corrective actions analyzed consist of an initial inspection, followed by repetitive inspections until a time is
The proposed initial inspection time requirements for Group 1 and Group 2 airplanes have been determined using data from AD 2020-26-16 inspection reports and prior inspections consisting of known crack findings and known inspections that did not find an anomaly that exceeds the eddy current size threshold, to estimate times when a crack will exist in each group's fleet. An initial inspection time is then set just prior to when cracks would be expected in the fleet. This proposed initial inspection serves as a baseline inspection and will be followed by repetitive inspections to ensure a crack is not missed.
The proposed repetitive inspection programs have been set differently for each airplane group. For Group 1 airplanes, a tiered approach of inspecting more often with increasing age has been proposed as a method of reducing the burden on lower TIS airplanes. It is possible to inspect less used airplanes less often because these carry the least risk of developing a fatigue crack within the population. As age increases, and therefore risk increases, the proposed inspections are set to be more frequent. A similar approach would be possible for Group 2 airplanes, but the inspection intervals are estimated to be much shorter based on inspection data, structural design, and airplane performance, so stepping down with age would not be practical.
As an airplane ages, the likelihood or risk of a crack developing increases. A potential solution to this would be to continue to increase the frequency of inspections to ensure a crack is found before reaching a critical length; however, frequent and increased inspections are not a practical or safe approach due to the inherent risk in repeated bolt removal and reinsertion. At the fleet level, an ever-increasing age of the fleet means a higher risk that cracks are present in the fleet and may be missed, even with frequent inspections. This leaves a solution of removing or modifying the highest age spars to reduce and maintain the fleet risk, therefore spar retirement or modification where possible is proposed.
These proposed fleet inspection requirements must be adjusted as needed to ensure cracks are found before they reach a critical size. A recent inspection of a Model PA-28-181 airplane main wing spar was performed at a time earlier than required by AD 2020-26-16 and revealed cracks at a TIS earlier than anticipated. A section of the main wing spar was sent to an independent materials lab, and under high magnification normally spaced fatigue striations were found, confirming this crack was caused by fatigue. This new finding required the FAA to adjust the Group 1 inspection schedules to earlier times to ensure a similar crack would be found in time.
Although this airplane was used almost exclusively for flight instruction, reducing the inspection times resulted in additional burden on all airplanes, including those for personal usage. Therefore, for this proposed AD, the FAA determined that for Group 1 airplanes a value of 3 should be used in the CSH instead of the value of 2 that is specified in Piper SB No. 1372. An increase in this value from 2 to 3 serves to mitigate the increased burden on Group 1 airplanes resulting from the reduced inspection times and provides relief for operators of personal-use airplanes.
Piper has developed a reinforcement kit as an option and alternative to retirement of the main wing spar, applicable to certain Group 1 airplanes. There is currently no spar modification developed for Piper Model PA-28R-180 and PA-28R-200 airplanes that are included in Group 1 or any airplanes designated as Group 2 airplanes, as specified in Piper SB No. 1372. The proposed inspection times after installing a reinforcement kit would provide an extended life of the main wing spar and longer intervals between the proposed repetitive inspections. The reinforcement kit provides additional structure that lowers and distributes the stress in the critical areas, allowing for slower crack growth. Piper used damage tolerance analysis when developing the inspection times after a reinforcement kit is installed.
Finally, new wing spars are available from Piper that have machined the spar dihedral bend instead of the cold bending process, eliminating the residual stress factor in these spars. These new wing spars have a different life limit and will not require any inspections.
Wing spars on the affected Piper airplanes could develop cracks that, if not addressed, would result in a wing separating from the fuselage in flight.
The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.
The FAA reviewed Piper SB No. 1372. This material specifies procedures for reviewing airplane maintenance records to determine the number of 100-hour inspections completed on the airplane since new and any record of main wing spar replacement; calculating the service hours; doing eddy current inspections of the main wing spar bolt holes for crack(s) and non-crack damage; repairing bolt holes with non-cracking damage; for certain airplanes installing a main wing spar reinforcement kit; and replacing a main wing spar.
This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in
This proposed AD would retain none of the requirements of AD 2020-26-16. This proposed AD would revise the applicability by removing certain serial-numbered Model PA-32-300 airplanes and all Piper Model PA-32R-300, PA-32RT-300, and PA-32RT-300T airplanes because those airplanes will be included in a separate proposed rulemaking action. This proposed AD would add serial-numbered Model PA-28R-200 and PA-28R-201 airplanes to the applicability to include all serial numbers and would also add Piper Model PA-32S-300 airplanes to the applicability. This proposed AD would require accomplishing the actions specified in the material already described, except as discussed under “Differences Between this AD and the Referenced Material.” This proposed AD would also require reporting inspection results to Piper and the FAA if any cracks are found during any inspection.
For Group 1 airplanes, to determine the CSH, instead of using the value of 2 provided in the simplified formula in Part 1, paragraph 2.b of the Instructions
In addition, for Group 1 airplanes, the compliance times for the initial and repetitive inspections and the replacement or modification of the main wing spars specified in paragraphs (i) and (j) of this proposed AD are different from what is in Table 1 of Piper SB No. 1372.
The FAA estimates that this AD, if adopted as proposed, would affect 10,665 airplanes of U.S. registry.
The FAA estimates the following costs to comply with this proposed AD:
The FAA estimates the following costs to do any necessary actions that would be required based on the results of the proposed airplane maintenance records review and CSH calculation. The agency has no way of determining the number of airplanes that might need these actions:
A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB Control Number. The OMB Control Number for this information collection is 2120-0056. Public reporting for this collection of information is estimated to be approximately 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. All responses to this collection of information are mandatory. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to: Information Collection Clearance Officer, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177-1524.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that the proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by November 7, 2024.
This AD replaces AD 2020-26-16, Amendment 39-21371 (86 FR 3769, January 15, 2021) (AD 2020-26-16).
This AD applies to Piper Aircraft, Inc. (Piper) airplanes, certificated in any category, with a model and serial number shown in Table 1 to paragraph (c) of this AD.
Joint Aircraft System Component (JASC) Code 5711, Wing Spar.
This AD was prompted by a report of a wing separation caused by fatigue cracking in a visually inaccessible area of the main wing lower spar cap. The FAA is issuing this AD to detect and correct fatigue cracks in the lower main wing spar cap bolt holes. The unsafe condition, if not addressed, could result in a wing separating from the fuselage in flight.
Comply with this AD within the compliance times specified, unless already done.
For the purpose of this AD the following definitions apply.
(1) Group 1 airplanes: Airplanes identified as Group 1 in Piper Service Bulletin No. 1372, dated April 3, 2024 (Piper SB No. 1372) and Table 1 to paragraph (c) of this AD.
(2) Group 2 airplanes: Airplanes identified as Group 2 in Piper SB No. 1372 and Table 1 to paragraph (c) of this AD.
(1) Within 30 days after the effective date of this AD and thereafter at intervals not to exceed 100 hours time-in-service (TIS) or 12 months, whichever occurs first, review the airplane maintenance records and determine the number of 100-hour inspections completed on the airplane since new and any record of wing spar replacement(s) in accordance with Part I, paragraph 1, of the Instructions in Piper SB No. 1372. The owner/operator (pilot) holding at least a private pilot certificate may accomplish this and must enter compliance with this paragraph of the AD into the airplane
(2) Before further flight after doing the action required by paragraph (h)(1) of this AD, determine the calculated service hours (CSH) for each main wing spar using the applicable formula for your airplane group specified in Figure 1 or Figure 2 to paragraph (h)(2) of this AD and in accordance with Part I, paragraphs 2.a. through b., of the Instructions in Piper SB No. 1372. Thereafter, after each 100-hour or annual inspection, re-calculate the CSH for each main wing spar to determine the compliance time for the actions required by paragraphs (i) and (j) of this AD. If a factored service hour (FSH) inspection required by AD 2020-26-16 was done using Piper Service Bulletin No. 1345, dated March 27, 2020; or Piper Service Bulletin No. 1345A, dated September 17, 2021, you may use that data, including the TIS and number of 100-hour inspections at the time of the last inspection, to calculate the CSH for that inspection using the requirements of paragraph (h) of this AD and Part I, paragraph 2.c. of the Instructions in Piper SB No. 1372 to determine the next required actions, including if an action is now due according to the requirements of paragraphs (i) and (j) of this AD.
(1) Do initial and repetitive eddy current inspections of the inner surface of each bolt hole in the lower wing spar cap for cracks and for non-crack damage (including deep scratches, gouges, and thread marks), at the times in Table 2 and Table 3 to paragraph (i)(1) of this AD and in accordance with Part II, paragraph 4.a. of the Instructions in Piper SB No. 1372. Although Piper SB No. 1372 specifies NAS 410 Level II or Level III certification to perform eddy current and fluorescent penetrant inspections, this AD allows Level II or Level III qualification standards for inspection personnel using any inspector criteria approved by the FAA.
The compliance times are not the same as the times specified in Piper SB No. 1372 for Group 1 airplanes.
(2) For any Group 1 or Group 2 airplane where the initial CSH cannot be calculated due to missing or incomplete airplane maintenance records: Do the initial inspection within 100 hours TIS or 60 days after the effective date of this AD, whichever occurs later.
(3) If an eddy current inspection does not identify any indications, then continue the repetitive eddy current inspections required by paragraph (i)(1) of this AD at the applicable times specified in Table 2 and Table 3 to paragraph (i)(1) of this AD.
(4) If any eddy current inspection identifies any indications or noisy signal, before further flight, do the applicable actions specified in Part II, paragraphs 4.b. through i., and if applicable the bolt hole oversize repair specified in Part III, paragraphs 1. through 7. and paragraph 9., of the Instructions in Piper SB No. 1372.
(5) If any eddy current inspection identifies any crack(s), before further flight, do the applicable actions specified in Part II, paragraph 4.k., of the Instructions in Piper SB No. 1372, and replace the affected main wing spar in accordance with Part IV, paragraphs 2.a. through d., of the Instructions in Piper SB No. 1372.
For Group 1 and Group 2 airplanes:
(1) At the applicable time specified in Table 4 to paragraph (j) of this AD replace the affected main wing spars in accordance with Part IV, paragraphs 2.a. through d., of the Instructions in Piper SB No. 1372 or modify the main wing spars by installing the Piper reinforcement kit, in accordance with Part IV, paragraphs 1.a. through c., of the Instructions in Piper SB No. 1372.
(2) As required by paragraph (i)(5) of this AD, replace the affected main wing spars in
If any cracks are found during any inspection required by paragraph (i) of this AD: After completing that inspection, using Appendix 1, “Inspection Results Form,” of this AD, report the inspection results to the FAA, East Certification Branch, and to Piper Aircraft, Inc. Submit the report at the applicable time specified in paragraph (k)(1) or (2) of this AD.
(1) If the action was done on or after the effective date of this AD, submit the report within 30 days after the action was done.
(2) If the action was done before the effective date of this AD, submit the report within 30 days after the effective date of this AD.
A special flight permit may be issued in accordance with 14 CFR 21.197 and 21.199 to permit a one-time, non-revenue ferry flight to a location where the airplane can be inspected. This ferry flight must be performed with only essential flight crew. This AD prohibits a special flight permit if any inspection reveals a crack in the main wing spar.
(1) The Manager, East Certification Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the East Certification Branch, send it to the attention of the person identified in paragraph (n) of this AD and email to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(3) AMOCs approved for AD 2020-26-16 are not approved as AMOCs for the corresponding provisions of this AD.
(1) For more information about this AD, contact Fred Caplan, Aviation Safety Engineer, FAA, East Certification Branch, FAA, 1701 Columbia Avenue, College Park, GA 30337; phone: (404) 474-5507; email:
(2) Piper material identified in this AD that is not incorporated by reference is available at the address specified in paragraph (o)(3) of this AD.
(3) FAA Advisory Circular 65-31B, “Training, Qualification, and Certification of Nondestructive Inspection Personnel,” dated February 24, 2014, maybe found at
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the material listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this material as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) Piper Service Bulletin No. 1372, dated April 3, 2024.
(ii) [Reserved].
(3) For Piper material identified in this AD, contact Piper Aircraft, Inc., 2926 Piper Drive, Vero Beach, FL 32960; phone: (772) 567-4361; email:
(4) You may view this material at the FAA, Airworthiness Products Section, Operational Safety Branch, 901 Locust, Kansas City, MO 64106. For information on the availability of this material at the FAA, call (817) 222-5110.
(5) You may view this material at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, visit
Food and Drug Administration, HHS.
Notification of petition.
The Food and Drug Administration (FDA or we) is announcing that we have filed a petition, submitted by DSM Biomedical, proposing that the color additive regulations be amended to provide for the safe use of phthalocyanine green to color surgical sutures made of ultra-high molecular weight polyethylene (UHMWPE) for use in general surgery, at a concentration of no more than 0.5 percent by weight of the suture.
The color additive petition was filed on August 15, 2024.
For access to the docket to read background documents or comments received, go to
Stephen DiFranco, Center for Food Safety and Applied Nutrition, Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740, 240-402-2710.
Under the Federal Food, Drug, and Cosmetic Act (section 721(d)(1) (21 U.S.C. 379e(d)(1))), we are giving notice that we have filed a color additive petition (CAP 4C0335), submitted by DSM Biomedical, 735 Pennsylvania Dr., Exton, PA 19341. The petition proposes to amend the color additive regulations in 21 CFR part 74, “Listing of Color Additives Subject to Certification,” to provide for the safe use of phthalocyanine green to color surgical sutures made of UHMWPE for use in general surgery, at a concentration of no more than 0.5 percent by weight of the suture.
The petitioner claims that this action is categorically excluded under 21 CFR 25.32(l) because the substance is used in sutures. If FDA determines a categorical exclusion applies, neither an environmental assessment nor an environmental impact statement is required. If FDA determines a categorical exclusion does not apply, we will request an environmental assessment and make it available for public inspection.
Internal Revenue Service (IRS), Treasury.
Notice of proposed rulemaking; correction.
This document contains corrections to REG-108920-24, which was published in the
Written or electronic comments and requests for a public hearing must be received by October 3, 2024.
Commenters were strongly encouraged to submit public comments electronically.
Concerning the proposed rules, Office of Associate Chief Counsel (Passthroughs & Special Industries) at (202) 317-6853 (not a toll-free number); concerning submissions of comments or the public hearing, the Publications and Regulations Section at (202) 317-6901 (not a toll-free number) or by email at
The notice of proposed rulemaking (REG-108920-24) that is the subject of this correction is under section 48E of the Internal Revenue Code.
Accordingly, FR Doc. 2024-19617 (REG-108920-24), appearing on page 71193 in the
1. On page 71195, in the third column, in the first full paragraph, by correcting the fourth line from the top of the paragraph to read, “most recently released by American Community Survey (ACS) low-income”.
2. On page 71196, in the second column, in the sixth bullet point from the top of the page, by correcting the first line of the bullet point to read, “Department of Agriculture (USDA) Section 515 Rural Rental”.
3. On page 71204, in the third column, in the fourth full paragraph, by correcting the fifth sentence from the top of the paragraph to read, “records are required for the IRS to validate”.
4. On page 71206, in the second column, in the third full paragraph, by correcting the twelve line from the top of the paragraph to read “The proposed regulations do not have substantial”.
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve revisions to the San Diego County Air Pollution Control District (SDCAPCD) and Mojave Desert Air Quality Management District (MDAQMD) portions of the California State Implementation Plan (SIP). These revisions concern negative declarations for the Control Techniques Guidelines
Comments must be received on or before October 23, 2024.
Submit your comments, identified by Docket ID No. EPA-R09-OAR-2024-0418 at
Eugene Chen, EPA Region IX, 75 Hawthorne St., San Francisco, CA 94105. By phone: (415) 947-4304 or by email at
Throughout this document, “we,” “us” and “our” refer to the EPA.
Table 1 lists the documents addressed by this proposal with the dates that they were adopted by the local air agencies and submitted by the California Air Resources Board (CARB).
For the SDCAPCD submittal, we are only proposing action on the negative declaration for the Oil and Natural Gas CTG in Attachment B and are not proposing action on any other elements of the submittal. Similarly, for the MDAQMD submittal, we are only proposing action on the negative declaration for the Oil and Natural Gas CTG in Table 2 and are not proposing action on any other elements of the submittal. In both cases, the negative declaration for the Oil and Natural Gas CTG was submitted for the 2008 and 2015 ozone National Ambient Air Quality Standards (NAAQS).
On May 6, 2021, the EPA determined that the SDCAPCD negative declaration for the Oil and Natural Gas CTG met the SIP submittal completeness criteria in 40 CFR part 51, appendix V.
There are no other versions of the SDCAPCD submittal, but we previously approved the negative declarations from the 2020 RACT SIP for the CTGs titled
Volatile organic compounds (VOC) and nitrogen oxides (NO
Clean Air Act (CAA) sections 182(b)(2) and (f) require that SIPs for ozone nonattainment areas classified as “Moderate” or above implement reasonably available control (RACT) for any source covered by a Control Techniques Guidelines (CTG) document and for any major source of VOCs or NO
As a result of their Severe classifications for the 2015 ozone NAAQS, SDCAPCD, and MDAQMD must, at a minimum, adopt RACT-level controls for all sources covered by a CTG document and for all major non-CTG sources of VOCs or NO
Section III.D of the preamble to the EPA's final rule to implement the 2008 ozone NAAQS discusses RACT requirements.
As discussed in section I.C., SDCAPCD and MDAQMD must demonstrate that the Districts' rules implement RACT for all sources covered by a CTG document as well as each major source of VOCs or NO
Guidance and policy documents that we used to evaluate the negative declarations include the following:
1. “State Implementation Plans; General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990,” 57 FR 13498 (April 16, 1992); 57 FR 18070 (April 28, 1992).
2. EPA 453/B-16-001, Control Techniques Guidelines for the Oil and Natural Gas Industry.
The submitted documents contain the SDCAPCD and MDAQMD's certifications that there are no sources within the ozone nonattainment areas under their respective jurisdictions that are subject to the Oil and Natural Gas CTG for the 2008 and 2015 8-hour ozone NAAQS. The Districts based their negative declarations on reviews of their permitting files, emission inventories, and in consultation with District enforcement staff. We reviewed available permitting, enforcement, and emission inventories for these two Districts.
As authorized in section 110(k)(3) of the Act, the EPA proposes to approve the SDCAPCD and MDAQMD negative declarations for the Oil and Natural Gas CTG because they fulfill the relevant requirements in CAA sections 110(a), 110(l), and 182(b)(2). We will accept comments from the public on this proposal until October 23, 2024. If we take final action to approve the submitted negative declarations as proposed, our final action will incorporate these negative declarations into the federally enforceable SIP. In addition, it will address the EPA's obligation to promulgate a FIP for the SDCAPCD arising from our November 16, 2020 finding of failure to submit for the Oil and Natural Gas CTG.
Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve State choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this proposed action merely proposes to approve State law as meeting Federal requirements and does not impose additional requirements beyond those imposed by State law. For that reason, this proposed action:
• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 14094 (88 FR 21879, April 11, 2023);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have federalism implications as specified in Executive
• Is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because it proposes to approve a State program;
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001); and
• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act.
In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rulemaking does not have Tribal implications and will not impose substantial direct costs on Tribal governments or preempt Tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
Executive Order 12898 (Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, February 16, 1994) directs Federal agencies to identify and address “disproportionately high and adverse human health or environmental effects” of their actions on communities with environmental justice (EJ) concerns to the greatest extent practicable and permitted by law. The EPA defines EJ as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” The EPA further defines the term fair treatment to mean that “no group of people should bear a disproportionate burden of environmental harms and risks, including those resulting from the negative environmental consequences of industrial, governmental, and commercial operations or programs and policies.”
The State did not evaluate EJ considerations as part of its SIP submittal; the CAA and applicable implementing regulations neither prohibit nor require such an evaluation. The EPA did not perform an EJ analysis and did not consider EJ in this action. Consideration of EJ is not required as part of this action, and there is no information in the record inconsistent with the stated goal of Executive Order 12898 of achieving EJ for communities with EJ concerns.
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.
Federal Communications Commission.
Proposed rule; correction.
The Federal Communications Commission published a document in the
Erik Beith, Competition Policy Division, Wireline Competition Bureau, at (202) 418-0756, or email:
1. In the
2. In the third column, in the
U.S. Agency for International Development.
Notice of public information collection.
The U.S. Agency for International Development (USAID) seeks Office of Management and Budget (OMB) approval for the information collection described below. In accordance with the Paperwork Reduction Act of 1995, USAID requests public comment on this collection from all interested individuals and organizations.
Submit comments on or before November 22, 2024.
Written comments and recommendations for the proposed information collection should be sent within 60 days of publication of this notice to
Wayne Cohee, at (202) 230-4575 or via email at
The purpose of this notice is to allow 60 days for public comment preceding submission of the collections to OMB. USAID previously received approval, under OMB approval number 0412-0510, for information collection required under USAID's Standard Provisions in its Automated Directives System (ADS) Chapter 303, USAID Grants and Cooperative Agreements to Non-Governmental Organizations. USAID will be adding three new Standard Provisions to ADS Chapter 303 later in calendar year 2024, entitled: 1. Activity Monitoring, Evaluation, and Learning Plans (AMELPs); 2. Planning, Collection, and Submission of Digital Information to USAID With Data Management Plan (DMP); and 3. Planning, Collection, and Submission of Digital Information to USAID Without Data Management Plan (DMP). These three new Standard Provisions require information collection approval under the Paperwork Reduction Act. USAID thus, for purposes of organization and efficiency, seeks approval for this new information collection via revision to the existing OMB approval for ADS Chapter 303 information collection (0412-0510). Estimated annual responses, estimated annual burden hours, and estimated total public burden (in cost) for the new information collection are listed later in this notice.
All comments must be in writing and submitted through the method(s) specified in the Addresses section above. All submissions must include the information collection title. Please include your name, title, organization, postal address telephone number, and email address in the text of the message. Please note that comments submitted in response to this Notice are public record. We recommend that you do not submit detailed personal information, Confidential Business Information, or any information that is otherwise protected from disclosure by statute. USAID will only address comments that explain why the proposed collection would be inappropriate, ineffective, or unacceptable without a change. Comments that are insubstantial or outside the scope of the notice of request for public comment may not be considered.
These estimated totals were calculated using the below burden estimates per response for each of the named Standard Provisions, which are published internally in the Agency's Automated Directives System (ADS) Chapter 303 and included by Agreement Officers, as required or as applicable, in Notices of Funding Opportunities and resulting awards:
Boss Laser LLC submitted a notification of proposed production activity to the FTZ Board (the Board) for its facility in Sanford, Florida, within FTZ 250. The notification conforming to the requirements of the Board's regulations (15 CFR 400.22) was received on September 4, 2024.
Pursuant to 15 CFR 400.14(b), FTZ production activity would be limited to the specific foreign-status material(s)/component(s) and specific finished product(s) described in the submitted notification (summarized below) and subsequently authorized by the Board. The benefits that may stem from conducting production activity under FTZ procedures are explained in the background section of the Board's website—accessible via
The proposed finished products include: fiber laser marking machines (with stand and safety enclosure; with stand and no safety enclosure; desktop); fiber laser cutting machines; fiber laser cutting machines with pipe cutting attachment; fiber laser welding machines; carbon dioxide laser cutting and marking machines; dual source carbon dioxide laser and fiber laser cutting machines; and, ultraviolet laser desktop marking machines (duty rate ranges from duty-free to 3.5%).
The proposed foreign-status materials/components include: acrylic paint; windows (polycarbonate; safety glass); universal serial bus Wi-Fi routers; rubber components (exhaust tubing; O-rings); aluminum components (honeycomb tables; worktable knife blade supports; laser nozzles); mild steel worktable knife blade supports; casters with metal legs and rubber wheels; machine leveling feet with metal legs and rubber feet; rotary tools (for fiber laser marking machines; for carbon dioxide laser machines); water chillers; carbon dioxide laser glass tubes; fiber laser power converters; electric ballasts; zinc alloy handles; gas spring shock absorbing struts; fans (centrifugal exhaust; internal cooling); air compressors; metal components (latches for external machinery doors; door and hood hinges; body panels and doors; laser mirror and lens housings; linear guide components (rails; bearings; blocks); cogs; pulleys; plates; shims; rulers and scale plates; clamps and clips; retaining rings; bushings; laser lens and nozzle removal tools; flow valves); water pumps (submersible; water chiller); plastic components (door and hood hinges; mounting brackets; cogs; pulleys; fittings; cases for packaging); laser components (mirrors; lenses; control cards); electric motors (for fiber laser cutting machinery; for carbon dioxide laser machinery); electric motor drivers; nylon and silicone tubing (for lubrication; for water; for air); decals and labels with adhesive backing; voltage stabilizers; electrical components (cables; wires; plugs for laser rotary tools; breakers; connectors; resistors; capacitors; filters); residual current terminal blocks; locksets and accompanying keys; fittings (brass; copper); iron components (fittings; bolts; screws); steel components (fittings; flanges; bolts; screws); light emitting diode components (indicator panels; strips); pin terminals for electrical wires; polyvinyl chloride bellows; electromechanical switches and relays; laser head assemblies; wiring harness assemblies; liquid crystal display control panels; connecting and worm rods; mechanical ball bearings; integral shaft bearings; filters for fume and odor extractor machines; fume and odor extractor machines; handheld remote controls for laser controller software; wireless computer components (mouses; keyboards); standalone computer towers without monitors; oil pumps; solenoids; water flow sensors and meters; proximity sensors and limit switches; laser safety glasses; shafts (wheel and reduction; drive); digital components (controller software; cameras; video recorders); metal flathead screwdrivers with plastic handles; magnets; random access memory for computers; computer mousepads (duty rate ranges from duty-free to 9.0%). The request indicates that certain materials/components are subject to duties under section 301 of the Trade Act of 1974 (section 301), depending on the country of origin. The applicable section 301 decisions require subject merchandise to be admitted to FTZs in privileged foreign status (19 CFR 146.41).
Public comment is invited from interested parties. Submissions shall be addressed to the Board's Executive Secretary and sent to:
A copy of the notification will be available for public inspection in the “Online FTZ Information System” section of the Board's website.
For further information, contact Juanita Chen at
Enforcement and Compliance, International Trade Administration, Department of Commerce.
On July 15, 2024, the U.S. Department of Commerce (Commerce) published the preliminary results of the changed circumstances review (CCR) of the antidumping duty (AD) order on certain softwood lumber from Canada. For these final results, Commerce continues to find that TRAPA Forest Products Ltd. (TRAPA) is the successor-in-interest to Trans-Pacific Trading Ltd. (Trans-Pacific).
Applicable September 23, 2024.
Robert Bolling, AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3434.
On July 15, 2024, Commerce published the preliminary results of this expedited CCR, determining that TRAPA is the successor-in-interest to Trans-Pacific for purposes of determining AD cash deposits and liabilities, and provided all interested parties with an opportunity to comment.
The merchandise subject to the order is certain softwood lumber.
For the reasons stated in the
Consequently, Commerce will instruct U.S. Customs and Border Protection to suspend liquidation of all shipments of subject merchandise produced and/or exported by Trans-Pacific and entered, or withdrawn from warehouse, for consumption on or after the publication date of this notice in the
This notice serves as the final reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a sanctionable violation.
We are issuing this determination and publishing these final results and notice in accordance with sections 751(b)(1) and 777(i)(1) and (2) of the Tariff Act of 1930, as amended, and 19 CFR 351.216(e), 351.221(b), and 351.221(c)(3).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Applicable September 23, 2024.
Hermes Pinilla or Joshua Weiner (Cambodia) at (202) 482-3477 or (202) 482-3902, respectively; Patrick Barton or Elizabeth Talbot Russ (Malaysia) at (202) 482-0012 or (202) 482-5516, respectively; Drew Jackson (Thailand) at (202) 482-4406; and Laurel LaCivita and Deborah Cohen (the Socialist Republic of Vietnam (Vietnam)) at (202) 482-4243 and (202) 482-4521, respectively, AD/CVD Operations, Offices I, III, and IV, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230.
On May 14, 2024, the U.S. Department of Commerce (Commerce) initiated less-than-fair-value (LTFV) investigations of imports of crystalline silicon photovoltaic cells, whether or not assembled into modules (solar cells), from Cambodia, Malaysia, Thailand, and Vietnam.
Section 733(b)(1)(A) of the Tariff Act of 1930, as amended (the Act), requires Commerce to issue the preliminary determination in an LTFV investigation within 140 days after the date on which Commerce initiated the investigation.
On September 9, 2024, the petitioner submitted a timely request that Commerce postpone the preliminary determinations in these LTFV investigations.
For the reasons stated above, and because there are no compelling reasons to deny the request, Commerce, in accordance with section 733(c)(1)(A) of the Act, is postponing the deadline for the preliminary determinations by 50 days (
This notice is issued and published pursuant to section 733(c)(2) of the Act and 19 CFR 351.205(f)(1).
National Institute of Standards and Technology, Department of Commerce.
Notice of open meeting.
The National Institute of Standards and Technology (NIST) announces that the National Artificial Intelligence Advisory Committee (NAIAC or Committee) will hold an open meeting in-person and virtually via web conference on October 10, 2024, from 10 a.m.-3 p.m. Pacific time. The primary purpose of this meeting is for the Committee to report working group findings, identify actionable recommendations, and receive public briefings. The briefings are from outside subject matter experts to the full Committee from areas such as industry, nonprofit organizations, the scientific community, the defense and law enforcement communities, and other appropriate organizations. The final agenda will be posted on the NAIAC Upcoming Meeting Page on the NIST website
The NAIAC will meet on Thursday, October 10, 2024, from 10 a.m.-3 p.m. Pacific time.
The meeting will be held in person and virtually via web conference. The in-person meeting will be located at Tower West, Building 1, 10176 Scholars Drive, La Jolla, CA 92093. For instructions on attending or participating in the meeting, either in person or virtually, please see the
Cheryl L. Gendron, Designated Federal Officer, Information Technology Laboratory, National Institute of Standards and Technology, Telephone: (301) 975-2785, Email address:
Pursuant to the Federal Advisory Committee Act, as amended, 5 U.S.C. 1001
The NAIAC is authorized by section 5104 of the National Artificial Intelligence Initiative Act of 2020 (Pub. L. 116-283), in accordance with the provisions of the Federal Advisory Committee Act, as amended (FACA), 5 U.S.C. 1001
The agenda will include NAIAC working group chair updates and work product deliberation, a UN High-Level Advisory Body briefing, and a NAIAC Discussion on the 2024 planned Transition Report. Members of the public interested in reviewing the agenda in advance are encouraged to visit
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of a public meeting.
The New England Fishery Management Council (Council) is holding a hybrid meeting of its Scientific and Statistical Committee (SSC) to consider actions affecting New England fisheries in the exclusive economic zone (EEZ). Recommendations from this group will be brought to the full Council for formal consideration and action, if appropriate.
This meeting will be held on Wednesday, October 9, 2024, beginning at 9 a.m.
Cate O'Keefe, Ph.D., Executive Director, New England Fishery Management Council; telephone: (978) 465-0492.
The Scientific and Statistical Committee (SSC) will meet to review the information provided by the Council's Scallop Plan Development Team (PDT) and recommend the overfishing limits (OFL) and acceptable biological catches (ABC) for Atlantic sea scallops for fishing years (FY) 2025-2026. They will also review the information provided by the Council's Groundfish PDT, review stock assessment information and recommend the OFLs and ABCs for witch flounder for FY 2025-2027.
The SSC will review draft outcomes of the 8th National Workshop of the Council Coordination Committee's Scientific and Statistical Subcommittee held in August 2024 and discuss potential next steps for the SSC. They also plan to review outcomes of the May 2024 workshop on Implementing Social Science Methods for Fisheries Decision-Making, discuss a proposal for a formal committee on social science; discuss potential next steps for the SSC. Other business will be discussed, as necessary.
Although non-emergency issues not contained on the agenda may come before this Council for discussion, those issues may not be the subject of formal action during this meeting. Council action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Act, provided the public has been notified of the Council's intent to take final action to address the emergency. The public also should be aware that the meeting will be recorded. Consistent with 16 U.S.C. 1852, a copy of the recording is available upon request.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Cate O'Keefe, Executive Director, at (978) 465-0492, at least 5 days prior to the meeting date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of issuance of letter of authorization.
In accordance with the Marine Mammal Protection Act (MMPA), as amended, its implementing regulations, and NMFS' MMPA Regulations for Taking Marine Mammals Incidental to Geophysical Surveys Related to Oil and Gas Activities in the Gulf of Mexico, notification is hereby given that NMFS has issued a Letter of Authorization (LOA) to LLOG Exploration Offshore, LLC (LLOG) for the take of marine mammals incidental to geophysical survey activity in the Gulf of Mexico (GOM).
The LOA is effective from September 16, 2024, through April 19, 2026.
The LOA, LOA request, and supporting documentation are available online at:
Rachel Wachtendonk, Office of Protected Resources, NMFS, (301) 427-8401.
Sections 101(a)(5)(A) and (D) of the MMPA (16 U.S.C. 1361
An authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s), will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant), and if the permissible methods of taking and requirements pertaining to the mitigation, monitoring and reporting of such takings are set forth. NMFS has defined “negligible impact” in 50 CFR 216.103 as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.
Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as: any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).
On January 19, 2021, we issued a final rule with regulations to govern the unintentional taking of marine mammals incidental to geophysical survey activities conducted by oil and gas industry operators, and those persons authorized to conduct activities on their behalf (collectively “industry operators”), in U.S. waters of the GOM over the course of 5 years (86 FR 5322, January 19, 2021). The rule was based on our findings that the total taking from the specified activities over the 5-year period will have a negligible impact on the affected species or stock(s) of marine mammals and will not have an unmitigable adverse impact on the availability of those species or stocks for subsistence uses, and became effective on April 19, 2021.
The regulations at 50 CFR 217.180
NMFS subsequently discovered that the 2021 rule was based on erroneous take estimates. We conducted another rulemaking using correct take estimates and other newly available and pertinent information relevant to the analyses supporting some of the findings in the 2021 final rule and the taking allowable under the regulations. We issued a final rule in April 2024, effective May 24, 2024 (89 FR 31488, April 24, 2024).
The 2024 final rule made no changes to the specified activities or the specified geographical region in which those activities would be conducted, nor to the original 5-year period of effectiveness. In consideration of the new information, the 2024 rule presented new analyses supporting affirmance of the negligible impact determinations for all species, and affirmed that the existing regulations, which contain mitigation, monitoring, and reporting requirements, are consistent with the “least practicable adverse impact” standard of the MMPA.
LLOG plans to conduct a Zero Offset, Offset, or Walkaway vertical seismic profile (VSP), Salt Proximity Survey, and/or Checkshot survey in lease block OCS-G 36103 AC 337, with water depths ranging from approximately 1,200 to 1,500 meters (m). LLOG plans to use either a 12-element, 2,400 cubic inch (in
Consistent with the preamble to the final rule, the survey effort proposed by LLOG in its LOA request was used to develop LOA-specific take estimates based on the acoustic exposure modeling results described in the preamble (89 FR 31488, April 24, 2024). In order to generate the appropriate take number for authorization, the following information was considered: (1) survey type; (2) location (by modeling zone
No VSP surveys were included in the modeled survey types, and use of existing proxies (
For the planned survey, the seismic source array will be deployed in one of the following forms: Zero Offset VSP—deployed from a drilling rig at or near the borehole, with the seismic receivers (
The survey will take place over approximately 5 days in zone 6. The monthly distribution of survey days is not known in advance. Take estimates for each species are based on the month that produces the greatest value.
Based on the results of our analysis, NMFS has determined that the level of taking expected for this survey and authorized through the LOA is consistent with the findings made for the total taking allowable under the regulations. See table 1 in this notice and table 6 of the rule (89 FR 31488, April 24, 2024).
Under the GOM rule, NMFS may not authorize incidental take of marine mammals in an LOA if it will exceed “small numbers.” In short, when an acceptable estimate of the individual marine mammals taken is available, if the estimated number of individual animals taken is up to, but not greater than, one-third of the best available abundance estimate, NMFS will determine that the numbers of marine mammals taken of a species or stock are small (89 FR 31535, May 24, 2024). For more information please see NMFS' discussion of small numbers in the 2021 final rule (86 FR 5438, January 19, 2021).
The take numbers for authorization are determined as described above in the Summary of Request and Analysis section, are used by NMFS in making the necessary small numbers determinations, through comparison with the best available abundance estimates (see discussion at 86 FR 5322, 5391, January 19, 2021). For this comparison, NMFS' approach is to use the maximum theoretical population, determined through review of current stock assessment reports (SAR;
Based on the analysis contained herein of LLOG's proposed survey activity described in its LOA application and the anticipated take of marine mammals, NMFS finds that small numbers of marine mammals will be taken relative to the affected species or stock sizes (
NMFS has determined that the level of taking for this LOA request is consistent with the findings made for the total taking allowable under the incidental take regulations and that the amount of take authorized under the LOA is of no more than small numbers. Accordingly, we have issued an LOA to LLOG authorizing the take of marine mammals incidental to its geophysical survey activity, as described above.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting.
The Pacific Fishery Management Council's (Pacific Council) Ad Hoc Marine Planning Committee (MPC) will hold an online public meeting.
The online meeting will be held Wednesday, October 9, 2024, from 10 a.m. to 4 p.m., Pacific Daylight Time or until business for the day has been completed.
This meeting will be held online. Specific meeting information, including a proposed agenda and directions on how to attend the meeting and system requirements, will be provided in the meeting announcement on the Pacific Council's website (see
Kerry Griffin, Staff Officer, Pacific Council; telephone: (503) 820-2409.
The purpose of this online meeting is for the MPC to consider current offshore wind (OSW) energy and aquaculture issues and to provide information and recommendations to the Pacific Council for consideration at its September 2024 meeting. Topics will include updates on Bureau of Ocean Energy Management activities, updates from coastal states and the National Marine Fisheries Service, a Tribal update, discussion of long-term OSW cumulative impacts, and other OSW or aquaculture topics, as appropriate.
Although non-emergency issues not contained in the meeting agenda may be discussed, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically listed in this document and any issues arising after publication of this document that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency.
Requests for sign language interpretation or other auxiliary aids should be directed to Mr. Kris Kleinschmidt (
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of SEDAR 91 Pre-Data Workshop Webinar for U.S Caribbean Spiny Lobster.
The SEDAR 91 assessment process of U.S. Caribbean spiny lobster will consist of a Data Workshop, and a series of assessment webinars, and a Review Workshop. See
The SEDAR 91 Pre-Data Workshop webinar will be held October 10, 2024, from 2 p.m. to 4 p.m., eastern time.
Julie A. Neer, SEDAR Coordinator; phone: (843) 571-4366; email:
The Gulf of Mexico, South Atlantic, and Caribbean Fishery Management Councils, in conjunction with NOAA Fisheries and the Atlantic and Gulf States Marine Fisheries Commissions have implemented the Southeast Data, Assessment and Review (SEDAR) process, a multi-step method for determining the status of fish stocks in the Southeast Region. SEDAR is a multi-step process including: (1) Data Workshop, (2) a series of assessment webinars, and (3) A Review Workshop. The product of the Data Workshop is a report that compiles and evaluates potential datasets and recommends which datasets are appropriate for assessment analyses. The assessment webinars produce a report that describes the fisheries, evaluates the status of the stock, estimates biological benchmarks, projects future population conditions, and recommends research and monitoring needs. The product of the Review Workshop is an Assessment Summary documenting panel opinions regarding the strengths and weaknesses of the stock assessment and input data. Participants for SEDAR Workshops are appointed by the Gulf of Mexico, South Atlantic, and Caribbean Fishery Management Councils and NOAA Fisheries Southeast Regional Office, HMS Management Division, and Southeast Fisheries Science Center. Participants include data collectors and database managers; stock assessment scientists, biologists, and researchers; constituency representatives including fishermen, environmentalists, and NGO's; International experts; and staff of Councils, Commissions, and State and Federal agencies.
The items of discussion during the pre-Data Workshop webinar are as follows:
Participants will discuss what data may be available for use in the assessment.
Although non-emergency issues not contained in this agenda may come before this group for discussion, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically identified in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency.
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to the Council office (see
The times and sequence specified in this agenda are subject to change.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; issuance of renewal incidental harassment authorization.
In accordance with the regulations implementing the Marine Mammal Protection Act (MMPA), as amended, notification is hereby given that NMFS has issued a renewal incidental harassment authorization (IHA) to Attentive Energy, LLC (Attentive Energy), associated with marine site characterization surveys in coastal waters off of New York and New Jersey in the New York Bight, specifically within the Bureau of Ocean Energy Management (BOEM) Commercial Lease of Submerged Lands for Renewable Energy Development on the Outer Continental Shelf (Lease) Area OCS-A 0538 and associated export cable route (ECR) area.
This renewal IHA is effective from September 18, 2024 through June 19, 2025.
Electronic copies of the original application, renewal request, and supporting documents (including the
Kelsey Potlock, Office of Protected Resources, NMFS, (301) 427-8401.
The MMPA prohibits the “take” of marine mammals, with certain exceptions. Sections 101(a)(5)(A) and (D) of the MMPA (16 U.S.C. 1361
Authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s) and will not have an unmitigable adverse impact on the availability of the species or stock(s) for taking for subsistence uses (where relevant). Further, NMFS must prescribe the permissible methods of taking and other “means of effecting the least practicable adverse impact” on the affected species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of such species or stocks for taking for certain subsistence uses (referred to here as “mitigation measures”). NMFS must also prescribe requirements pertaining to monitoring and reporting of such takings. The definition of key terms such as “take,” “harassment,” and “negligible impact” can be found in the MMPA and NMFS's implementing regulations (see 16 U.S.C. 1362; 50 CFR 216.103).
NMFS' regulations implementing the MMPA at 50 CFR 216.107(e) indicate that IHAs may be renewed for additional periods of time not to exceed 1 year for each reauthorization. In the notice of proposed IHA for the initial IHA, NMFS described the circumstances under which we would consider issuing a renewal for this activity, and requested public comment on a potential renewal under those circumstances. Specifically, on a case-by-case basis, NMFS may issue a one-time 1-year renewal IHA following notice to the public providing an additional 15 days for public comments when (1) up to another year of identical, or nearly identical, activities as described in the Detailed Description of Specified Activities section of the initial IHA issuance notice is planned, or (2) the activities as described in the Description of the Specified Activities and Anticipated Impacts section of the initial IHA issuance notice would not be completed by the time the initial IHA expires and a renewal would allow for completion of the activities beyond that described in the
1. A request for renewal is received no later than 60 days prior to the needed renewal IHA effective date (recognizing that the renewal IHA expiration date cannot extend beyond 1 year from expiration of the initial IHA).
2. The request for renewal must include the following:
• An explanation that the activities to be conducted under the requested renewal IHA are identical to the activities analyzed under the initial IHA, are a subset of the activities, or include changes so minor (
• A preliminary monitoring report showing the results of the required monitoring to date and an explanation showing that the monitoring results do not indicate impacts of a scale or nature not previously analyzed or authorized.
3. Upon review of the request for renewal, the status of the affected species or stocks, and any other pertinent information, NMFS determines that there are no more than minor changes in the activities, the mitigation and monitoring measures will remain the same and appropriate, and the findings in the initial IHA remain valid.
An additional public comment period of 15 days (for a total of 45 days), with direct notice by email, phone, or postal service to commenters on the initial IHA, is provided to allow for any additional comments on the proposed renewal. A description of the renewal process may be found on our website at:
On June 20, 2023, NMFS issued an IHA to Attentive Energy, a company registered in the state of Delaware, to take marine mammals incidental to marine site characterization surveys in coastal waters off of New York and New Jersey in the New York Bight region, specifically within BOEM Lease Area OCS-A-0538 and associated ECR area (88 FR 41888, June 28, 2023), effective from June 20, 2023, through June 19, 2024. On May 24, 2024, NMFS received an application from Attentive Energy for the renewal of the 2023 IHA. As described in the application for renewal IHA, the activities for which incidental take was requested consisted of activities that were analyzed for the initial 2023 authorization, but were not able to be completed prior to its expiration. As required, Attentive
Under the initial IHA, Attentive Energy planned to conduct marine site characterization surveys, including high-resolution geophysical (HRG) surveys, in coastal waters off of New Jersey and New York in the New York Bight, specifically within BOEM Lease Area OCS-A 0538 and associated ECR areas. Challenges and delays with procurement, mobilization, and downtime contributed to less survey being completed during the initial IHA period than anticipated.
The surveys were designed to obtain data sufficient to meet BOEM guidelines for providing geophysical, geotechnical, and geo-hazard information for site assessment plan surveys and/or construction and operations plan development. The objective of the surveys was to support the site characterization, siting, and engineering design of offshore wind project facilities including wind turbine generators, offshore substations, and submarine cables within the Lease Area. At least two survey vessels would operate as part of the planned surveys with a maximum of two nearshore (<20 meters (m); <65.6 feet (ft)) vessels and a maximum of two offshore (≥20 m (≥65.6 ft)) vessels operating concurrently.
Attentive Energy plans to continue to conduct these survey activities, as per the initial IHA application, up to approximately 6,936 kilometers (km; 4,309.8 miles (mi)) of trackline. This is a subset of the survey trackline included in the initial IHA; the initial survey plan included 21,745 km (13,511.72 mi) across the entire project area (maximum-case scenario), which was split up by approximately 14,025 km (8,714.7 mi) in the Lease Area and 7,720 km (4,797 mi) in the ECR area. We note here that the Project Area is minimally expanded (primarily to the south) in the current survey plan as compared with the survey plan associated with the initial IHA (see figure 1 in the proposed renewal
The potential impacts of Attentive Energy's planned activities on marine mammals involve potential acoustic stressors and are unchanged from the impacts described in the
This renewal IHA is for the remainder of work that was not completed by the expiration date of the 2023 IHA. The renewal IHA authorizes incidental take, by Level B harassment only, of 15 species (comprising 16 stocks) of marine mammals for a subset of marine site characterization survey activities to be completed in less than 1 year (
A detailed description of the marine site characterization survey activities for which incidental take is authorized here may be found in the
A description of the marine mammals in the area of the activities for which authorization of take is proposed here, including information on abundance, status, distribution, and hearing, may be found in the
The draft 2023 SARs include updates for additional marine mammal species and stocks (
On August 1, 2022, NMFS announced proposed changes to the existing North
NMFS has determined that no new information has been presented that may affect or change any other information in the Description of the Marine Mammals in the Area of Specified Activities contained in the supporting documents and in the
A description of the potential effects of the specified activity on marine mammals and their habitat for the activities for which take is authorized here may be found in the
A detailed description of the methods and inputs used to estimate take for the specified activity are found in the
The required mitigation, monitoring, and reporting measures included as requirements in this authorization are identical to those included in the
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A notice of NMFS' proposal to issue a renewal IHA to Attentive Energy was published in the
During the 15-day public comment period, NMFS received one comment from a member of the public and one comment letter from a non-governmental organization, Clean Ocean Action (COA). NMFS has reviewed all public comments received on the Attentive Energy renewal HRG IHA. All relevant, substantive comments, and NMFS' responses, are provided below. Comments indicating general opposition to offshore wind construction are not relevant to the proposed action and therefore were not considered and are not addressed here. The comments and recommendations are available online at:
NMFS agrees with COA that the expanded area, inclusive of the initial project area as well, includes habitat for marine mammals, including pinniped haulouts and migratory habitat for certain cetacean species. The survey area described for the initial IHA included the same migratory habitat for the same cetacean species, as well as coastal habitat where pinnipeds may choose to haul out. Contrary to COA's assertion that the minor expansion of the survey area to cover a new potential ECR would affect new habitat areas not previously considered, cetacean migratory habitat is typically broad and there are not differences in the type, location, or use of such habitat over the relatively fine scales considered here. Regarding pinniped haulout habitat, such locations are typically opportunistic and, given their shore-based locations, unlikely to be affected at all by the planned survey activity. Furthermore, while they may now fall within the slightly expanded project area, there is no new information about the haulout sites along Barnegat Light on Long Beach Island to suggest that they are dissimilar from those off the Long Island area, as compared with those previously analyzed for pinnipeds under the initial
The preamble of NMFS' implementing regulations (54 FR 40338, September 29, 1989) also addresses cumulative effects from future, unrelated activities. Such effects are not considered in making the negligible impact determination under MMPA section 101(a)(5). NMFS considers (1) cumulative effects that are reasonably foreseeable when preparing a National Environmental Policy Act (NEPA) analysis, and (2) reasonably foreseeable cumulative effects under section 7 of the ESA for listed species, as appropriate. Accordingly, NMFS has written Environmental Assessments (EA) that addressed cumulative impacts related to substantially similar activities in similar locations (
Separately, the cumulative effects of substantially similar activities in the northwest Atlantic Ocean have been analyzed in the past under section 7 of the ESA when NMFS has engaged in formal intra-agency consultation, such as the 2013 programmatic Biological Opinion for BOEM Lease and Site Assessment Activities on the Atlantic Outer Continental Shelf in Rhode Island, Massachusetts, New York, and New Jersey Wind Energy Areas (
The relevant NOAA CE associated with issuance of incidental take authorizations is CE B4, “Issuance of incidental harassment authorizations under section 101(a)(5)(A) and (D) of the MMPA for the incidental, but not intentional, take by harassment of marine mammals during specified activities and for which no serious injury or mortality is anticipated.” This action falls within CE B4. In determining whether a CE is appropriate for a given incidental take authorization, NMFS considers the applicant's specified activity and the potential extent and magnitude of takes of marine mammals associated with that activity along with the extraordinary circumstances listed in the Companion Manual for NOAA Administrative Order (NAO) 216-6A and summarized above. The evaluation of whether extraordinary circumstances (if present) have the potential for significant environmental effects is limited to the decision NMFS is responsible for, which is issuance of the incidental take authorization. While there may be environmental effects associated with the underlying action, potential effects of NMFS' action are limited to those that would occur due to the authorization of incidental take of marine mammals. NMFS prepared numerous EAs analyzing the environmental impacts of the categories of activities encompassed by CE B4 which resulted in Findings of No Significant Impacts and, in particular,
Specifically for this action, NMFS independently evaluated the use of the CE for issuance of Attentive Energy's IHA, which included consideration of extraordinary circumstances. As part of that analysis, NMFS considered whether this IHA issuance would result in cumulative impacts that could be significant. In particular, the issuance of an IHA to Attentive Energy is expected to result in minor, short-term behavioral effects on marine mammal species due to exposure to underwater sound from site characterization survey activities. Behavioral disturbance is possible to occur intermittently in the vicinity of Attentive Energy's survey area during the 1-year timeframe. Level B harassment will be reduced through use of mitigation measures described herein. Additionally, as discussed elsewhere, NMFS has determined that Attentive Energy's activities fall within the scope of activities analyzed in the Greater Atlantic Regional Fisheries Office's (GARFO) programmatic consultation regarding geophysical surveys along the U.S. Atlantic coast in the three Atlantic Renewable Energy Regions (completed June 29, 2021; revised September 2021), which concluded surveys such as those planned by Attentive Energy are not likely to adversely affect endangered listed species or adversely modify or destroy critical habitat. Accordingly, NMFS has determined that the issuance of this IHA will result in no more than negligible (as that term is defined by the Companion Manual for NAO 216-6A) adverse effects on species protected by the ESA and the MMPA.
Further, the issuance of this IHA will not result in highly controversial environmental effects or result in environmental effects that are uncertain, unique, or unknown because numerous entities have been engaged in site characterization surveys that result in Level B harassment of marine mammals in the United States. This type of activity is well documented; prior authorizations and analysis demonstrates issuance of an IHA for this type of action only affects the marine mammals that are the subject of the specific authorization and, thus, no potential for significant cumulative impacts are expected, regardless of past, present, or reasonably foreseeable actions, even though the impacts of the action may not be significant by itself. Based on this evaluation, we concluded that the issuance of the IHA qualifies to be categorically excluded from further NEPA review.
Regarding clarification on authorizations, as described on our website, IHAs are 1-year authorizations and Incidental Take Regulations (ITR) are 5-year regulations that allow for the issuance of LOA. An ITR must be used if authorization of take by mortality is necessary (although not all ITRs include mortality). However, both options are available for applicants requesting authorization of harassment only. While applicants may request a 5-year regulation for HRG survey activities, NMFS has not received any such requests to date and there is no expectation presented in the MMPA or Congressional record that activities continuing for more than 1 year must seek ITR and authorization under section 101(a)(5)(A) of the MMPA. Therefore, a determination of which option to take is not dependent on any expectation regarding whether the activity will continue for more than 1 year or not.
In this comment letter, COA speaks more broadly about all offshore wind efforts along the U.S. East Coast, not just specific to this discrete IHA. It is not within NMFS' jurisdiction to impose a moratorium on all offshore wind development activities unrelated to this specific IHA request and planned activities. NMFS reiterates that there is no evidence that noise resulting from offshore wind development-related site characterization surveys could potentially cause marine mammal stranding, and there is no evidence linking recent large whale mortalities and currently ongoing surveys. The commenters offer no such evidence to the contrary. NMFS will continue to gather data to help us determine the
There is an ongoing Unusual Mortality Event for humpback whales along the Atlantic coast from Maine to Florida, which includes animals stranded since 2016. Partial or full necropsy examinations were conducted on approximately half of the whales. Necropsies were not conducted on other carcasses because they were too decomposed, not brought to land, or stranded on protected lands (
No changes were made from the proposed renewal IHA to the final renewal IHA.
Attentive Energy's planned activities consist of a subset of activities analyzed in the initial IHA. In analyzing the effects of the activities for the initial IHA, NMFS determined that Attentive Energy's activities would have a negligible impact on the affected species or stocks and that authorized take numbers of each species or stock were small relative to the relevant stocks (
NMFS has concluded that there is no new information suggesting that our analysis or findings should change from those reached for the initial IHA. This includes consideration of the draft 2023 SAR estimated abundance of the North Atlantic right whale stock and other stocks, as shown in table 1 of the
Based on the information and analysis contained here and in the referenced documents, NMFS has determined the following: (1) the required mitigation measures will effect the least practicable adverse impact on marine mammal species or stocks and their habitat; (2) the authorized takes would have a negligible impact on the affected marine mammal species or stocks; (3) the authorized takes represent small numbers of marine mammals relative to the affected stock abundances; (4) Attentive Energy's activities will not have an unmitigable adverse impact on taking for subsistence purposes as no relevant subsistence uses of marine mammals are implicated by this action; and (5) appropriate monitoring and reporting requirements are included. This includes consideration of the estimated abundance of 13 stock(s) decreasing or increasing slightly, specific to each stock.
This action is consistent with categories of activities identified in Categorical Exclusion B4 (incidental take authorizations with no anticipated serious injury or mortality) of the Companion Manual for NOAA Administrative Order 216-6A, which do not individually or cumulatively have the potential for significant impacts on the quality of the human environment and for which we have not identified any extraordinary circumstances that would preclude this categorical exclusion. Accordingly, NMFS determined that the issuance of the initial IHA qualified to be categorically excluded from further NEPA review. NMFS has determined that the application of this categorical exclusion remains appropriate for this renewal IHA.
Section 7(a)(2) of the ESA of 1973 (16 U.S.C. 1531
NMFS has authorized the incidental take of four species of marine mammals which are listed under the ESA, including the North Atlantic right, fin, sei, and sperm whale, and has determined that this activity falls within the scope of activities analyzed in NMFS GARFO's programmatic consultation regarding geophysical surveys along the U.S. Atlantic coast in the three Atlantic Renewable Energy Regions (completed June 29, 2021; revised September 2021).
NMFS has issued a renewal IHA to Attentive Energy for the take of 15 species (comprising 16 stocks) of marine mammals incidental to conducting marine site characterization surveys offshore from New York to New Jersey in the BOEM Lease Area OCS-A-0538 and associated ECR areas, which include the previously explained mitigation, monitoring, and reporting requirements.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of a public meeting.
The South Atlantic Fishery Management Council's (Council) will hold a meeting of the Outreach and Communications Advisory Panel (AP) October 9-10, 2024. The meeting will be held in North Charleston, SC.
The Outreach and Communications AP meeting will be held October 9, 2024, from 9 a.m. until 5 p.m. and October 10, 2024, from 9 a.m. until 12 p.m.
Webinar registration, an online public comment form, and briefing book materials will be available two weeks prior to the meeting at:
Kim Iverson, Public Information Officer, SAFMC; phone: (843) 571-4366 or toll free: (866) SAFMC-10; fax: (843) 769-4520; email:
Agenda items for the Outreach and Communications AP meeting include: updates from AP members on recent outreach and communication efforts and needs; update on the Council's Best Fishing Practices Program and the Citizen Science Program and projects; a review of the Council's draft Habitat Blueprint relative to outreach and communication needs; and an update on the Council's digital communications efforts and needs. AP members will also receive an update on port meetings conducted for the mackerel fishery in 2024 and plans to conduct stakeholder meetings in 2025. The AP will review draft outreach documents being developed for the upcoming 50th anniversary of the regional fishery management councils and the Magnuson-Stevens Fishery Conservation and Management Act. The AP will address other business as needed and provide recommendations for Council consideration.
These meetings are physically accessible to people with disabilities. Requests for auxiliary aids should be directed to the Council office (see
The times and sequence specified in this agenda are subject to change.
The Committee for the Implementation of Textile Agreements.
Determination to add a product in unrestricted quantities to Annex 3.25 of the CAFTA-DR.
The Committee for the Implementation of Textile Agreements (“CITA”) has determined that certain two-way stretch woven polyester, rayon, spandex fabric, as specified below, is not available in commercial quantities in a timely manner in the CAFTA-DR countries. The product is added to the list in Annex 3.25 of the CAFTA-DR in unrestricted quantities.
Kayla Johnson, Office of Textiles and Apparel, U.S. Department of Commerce, (202) 482-2532 or
The CAFTA-DR Implementation Act requires the President to establish procedures governing the submission of a request and providing opportunity for interested entities to submit comments and supporting evidence before a commercial availability determination is made. In Presidential Proclamation 7987, the President delegated to CITA the authority under section 203(o)(4) of CAFTA-DR Implementation Act for modifying the Annex 3.25 list. Pursuant to this authority, on September 15, 2008, CITA published modified procedures it would follow in considering requests to modify the Annex 3.25 list of products determined to be not commercially available in the territory of any Party to the CAFTA-DR (
On August 12, 2024, CITA received a Commercial Availability Request (“Request”) from CFI Textiles (“CFI”) for certain two-way stretch woven polyester, rayon, spandex fabric, as specified below. On August 14, 2024, in accordance with CITA's Procedures, CITA notified interested parties of the Request, which was posted on the dedicated website for CAFTA-DR Commercial Availability proceedings. In its notification, CITA advised that any Response with an Offer to Supply
In accordance with section 203(o)(4)(C) of the CAFTA-DR Implementation Act, and section 8(c)(2) of CITA's Procedures, as no interested entity submitted a Response objecting to the Request and providing an offer to supply the subject product in accordance with CITA's Procedures, CITA has determined to add the specified fabric to the list in Annex 3.25 of the CAFTA-DR.
The subject product has been added to the list in Annex 3.25 of the CAFTA-DR Agreement in unrestricted quantities. A revised list has been posted on the dedicated website for CAFTA-DR Commercial Availability proceedings, at
The staple length designation 1.75″—2.75″ inches describes a range of long staple fiber in its raw griege condition before spinning, weaving, dyeing and finishing of the fabric. It is intended as a specification to be followed by the mill in sourcing long staple fiber used to produce the yarn and fabric. Spinning, weaving, dyeing and finishing alter the characteristic of the staple fiber as it appears in the finished fabric. This specification therefore includes staple appearing in the finished fabric as shorter than 1.75″ inches provided that the shorter appearance occurs solely as the result of such processes.
The designation “34/1 (English 20/1) or finer” describes a range of yarn specifications for yarn it its greige condition before dyeing and finishing of the yarn (if applicable) and before weaving, dyeing and finishing of the fabric. It is intended as a specification to be followed by the mill in sourcing yarn used to produce the fabric. Dyeing, finishing and weaving can alter the characteristic of the yarn as it appears in the finished fabric. This specification therefore includes yarns appearing in the finished fabric as coarser than 34/1 (English 20/1) provided that the coarser appearance occurs solely as the result of such processes.
Committee for Purchase from People Who Are Blind or Severely Disabled.
Request for information.
The Committee for Purchase From People Who Are Blind or Severely Disabled (operating as the U.S. AbilityOne Commission (Commission)) is seeking information on proposed definitions of direct labor and categories of indirect labor; and ideas about categorizing employment tasks as direct labor or indirect labor on Federal contracts for the purposes of compliance with the Javits-Wagner-O'Day (JWOD) Act (41 U.S.C. Chapter 85). The information provided in response to this request for information (RFI) will inform the Commission as it seeks to modernize the AbilityOne Program.
Comments must be received by October 22, 2024.
Electronic Submission of Comments. Please submit any comments electronically through
Cassandra Assefa, Regulatory and Policy Attorney, Office of General Counsel, Committee for Purchase From People Who Are Blind or Severely Disabled, 355 E Street SW, Suite 325, Washington, DC 20024; telephone: (202) 430-9886; email:
In 1938, the legislation that became the JWOD Act was signed to create jobs for blind individuals. In 1971, the Act was amended to expand the JWOD Program's scope to include employing individuals with severe disabilities.
The JWOD Act continues to serve as an employment catalyst by making it mandatory for Federal agencies to procure certain products and services from NPAs employing individuals who are blind or have significant disabilities. The Commission votes to place on a
For an NPA to be eligible to provide goods or services on the Procurement List, it must be authorized by the Commission as qualified to serve as an authorized source in the program.
To serve as an authorized source, an NPA must, at a minimum, satisfy the statutory conditions described at 42 U.S.C. 8501, paragraphs 6 and 7. Of note, part (C) of both paragraphs require that 75 percent of the direct labor hours required to produce or provide products or services must be performed by individuals who are blind or significantly disabled.
In calculating the 75 percent direct labor hour ratio, an NPA is required to count not only the DLH performed in support of Procurement List items, but pursuant to the statute, all direct labor performed by every individual employed by the NPA.
This means that when calculating the 75 percent direct labor hour ratio, an NPA excludes “indirect labor” hours—
The Commission believes that many “indirect labor” task or positions could serve as an opportunity to promote employee career advancement. However, there is little incentive for an NPA to create a framework that actively encourages direct labor hour employees to move to indirect labor hour positions if doing so compromises the NPA's ability to remain in the Program by impeding its ability to meet the Program's direct labor hour ratio requirement.
As noted above, section 8501, paragraphs 6 and 7 of the JWOD Act list the qualifications for an NPA to serve as an authorized source for a product or service on the Procurement List. The Commission's interpretation of the statutory language is promulgated in the Code of Federal Regulations (CFR) at Title 41, Chapter 51. More specifically, the CFR adopts the JWOD Act's 75 percent direct labor hour ratio requirement and adds a list of additional qualifications under Part 51-4. In the CFR at Part 51-1.3, the Commission does not elaborate on the statutory direct labor hour ratio requirement or the definition of direct labor.
Commission policies are generally derived from Commission regulations grounded in statute. As such, the authority to deviate from the 75 percent direct labor hour ratio requirement, or to redefine what counts as direct labor, is expressly limited by statute. Notwithstanding these limitations, the Commission is exploring ways to leverage its regulatory and sub-regulatory authority to encourage employment opportunities that promote career mobility without conflicting with the JWOD Act. This RFI is designed to collect information for that purpose, through the questions below.
(1) How could direct labor be defined to expand the types of tasks or positions that can be counted as direct labor without conflicting with the definition in the JWOD Act? The purpose of this change would include increasing the number of direct labor hours that an NPA could count toward meeting the direct labor hour ratio requirement.
(2) In what ways could indirect labor categories (
(3) What types of jobs or tasks traditionally categorized as “indirect labor” in accordance with the JWOD Act fall outside of “supervision, administration, inspection, or shipping”?
(4) With respect to meeting the direct labor hour ratio requirement, describe any challenges or successes associated with facilitating or supporting AbilityOne employees' mobility into jobs outside the Program; particularly, whether such mobility causes challenges with ratio compliance, and if applicable, the steps taken to mitigate such challenges.
Wednesday, September 25, 2024—10 a.m.
Meeting will be held remotely and in person at 4330 East West Highway, Bethesda, Maryland, Room 420.
Commission Meeting—Closed to the Public.
Alberta E. Mills, Office of the Secretary, U.S. Consumer Product Safety Commission, 4330 East West Highway, Bethesda, MD 20814, 301-504-7479 (Office) or 240-863-8938 (Cell).
Defense Security Cooperation Agency, Department of Defense (DoD).
Arms sales notice.
The DoD is publishing the unclassified text of an arms sales notification.
Pamela Young at (703) 953-6092,
This 36(b)(1) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives with attached Transmittal 23-28 and Policy Justification.
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
* As defined in Section 47(6) of the Arms Export Control Act.
The Government of Latvia has requested to buy a Naval Strike Missile Coastal Defense System (NSM CDS), including tactical, telemetered, and training missiles; containers; mobile operational platforms; integration equipment; ordnance handling equipment (OHE); training equipment and aids; technical publications and data; training; spares; U.S. Government and contractor technical and product support or assistance; and other related elements of logistical and program support. The estimated total cost is $110 million.
This proposed sale will support the foreign policy goals and national security objectives of the United States by improving the security of a NATO ally that is an important force for political stability and economic progress in Europe.
The proposed sale will improve Latvia's capability to meet current and future threats in the Baltic Sea maritime domain. Latvia's increased coastal defense capability and interoperability with U.S. and NATO armed forces will contribute to both U.S. and Latvian defense and security objectives in the Baltics. Latvia will have no difficulty absorbing this equipment into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The principal contractor is to be determined. There are no known offset agreements proposed in connection with this potential sale.
Implementation of this proposed sale will not require the assignment of any U.S. Government or contractor representatives to Latvia.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
Defense Acquisition University (DAU), Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by October 23, 2024.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Reginald Lucas, (571) 372-7574,
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
•
Requests for copies of the information collection proposal should be sent to Mr. Lucas at
Office of the Assistant Secretary of Defense for Health Affairs (OASD(HA)), Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by October 23, 2024.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Reginald Lucas, (571) 372-7574,
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
•
Requests for copies of the information collection proposal should be sent to Mr. Lucas at
Defense Security Cooperation Agency, Department of Defense (DoD).
Arms sales notice.
The DoD is publishing the unclassified text of an arms sales notification.
Pamela Young at (703) 953-6092,
This 36(b)(1) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives with attached Transmittal 23-30, Policy Justification, and Sensitivity of Technology.
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
* As defined in Section 47(6) of the Arms Export Control Act.
The Government of the United Kingdom has requested to buy up to seven hundred sixty-eight (768) Advanced Precision Kill Weapon System-II (APKWS-II) All Up Round (AURs) (Single Variant). Also included
This proposed sale will support the foreign policy goals and national security objectives of the United States by improving the security of a NATO Ally that is a force for political stability and economic progress in Europe.
The proposed sale will improve the United Kingdom's capability to meet current and future threats by ensuring its aviation forces' interoperability with United States and other allied forces as well as its ability to contribute to missions of mutual interest. By deploying the Advanced Precision Kill Weapon System, the United Kingdom would contribute to global readiness and enhance the capability for U.S. forces operating globally alongside them. The United Kingdom will have no difficulty absorbing this equipment into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The principal contractors will be BAE Systems, Nashua, New Hampshire. There are no known offset agreements proposed in connection with this potential sale.
Implementation of this proposed sale will require multiple trips by approximately five (5) U.S. Government representatives and the assignment of approximately five (5) contractor representatives to the United Kingdom on an intermittent basis for a period of approximately five (5) years to support delivery and integration of items and to provide supply support management, inventory control, and equipment familiarization.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
(vii)
1. The Advanced Precision Kill Weapon System-II (APKWS-II) is a design conversion of an unguided Hydra 2.75-inch rocket with a laser guidance kit to give it precision-kill capability. As a low cost weapon, it is intended as an inexpensive means to destroy targets while limiting collateral damage in close combat. The APKWS consists of an APKWS-II Guidance Section (GS) developed by BAE systems, legacy 2.75-inch MK66 Mod 4 rocket motor, and a legacy Mk151 and Mk435/436 warhead/fuze. These guided rockets are steered to the target by following reflected laser beam energy directed onto the target either by the launching aircraft, a second aircraft, or ground-based troops operating a laser designator. The APKWS is a tactical rocket system that can be launched from several platforms, including rotary wing, fixed wing, and ground-based vehicles, offering multi-mission, multi-target capability, and precision-strike lethality.
2. The highest level of classification of defense articles, components, and services included in this potential sale is SECRET.
3. If a technologically advanced adversary were to obtain knowledge of the specific hardware and software elements, the information could be used to develop countermeasures that might reduce weapon system effectiveness or be used in the development of a system with similar or advanced capabilities.
4. A determination has been made that the United Kingdom can provide substantially the same degree of protection for the sensitive technology being released as the U.S. Government. This sale is necessary in furtherance of the U.S. foreign policy and national security objectives outlined in the Policy Justification.
5. All defense articles and services listed in this transmittal have been authorized for release and export to the Government of the United Kingdom.
Office of the Under Secretary of Defense for Intelligence and Security (OUSD(I&S)), Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by October 23, 2024.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Reginald Lucas, (571) 372-7574,
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
•
Requests for copies of the information collection proposal should be sent to Mr. Lucas at
Defense Security Cooperation Agency, Department of Defense (DoD).
Arms sales notice.
The DoD is publishing the unclassified text of an arms sales notification.
Pamela Young at (703) 953-6092,
This 36(b)(5)(C) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives with attached Transmittal 23-0F.
(i)
(ii)
Date: September 21, 2012
Military Department: Army
(iii)
This transmittal notifies the inclusion of the following additional MDE item: forty-one (41) AAR-57(V) 3/5 Common Missile Warning Systems (CMWS). The estimated total value of the new MDE items is $27 million, resulting in a new MDE total of $2.527 billion. The total case value will increase to $3.627 billion.
(iv)
(v)
(vi)
The highest level of classification of defense articles, components, and services included in this potential sale is SECRET.
(vii)
Office of the Under Secretary of Defense for Research and Engineering (OUSD(R&E)), Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by October 23, 2024.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Reginald Lucas, (571) 372-7574,
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
•
Requests for copies of the information collection proposal should be sent to Mr. Lucas at
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD (P&R)), Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by October 23, 2024.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Reginald Lucas, (571) 372-7574,
The DoD Civilian Employee Workplace and Gender Relations Survey (WGRC) will assess the attitudes and opinions of DoD civilian employees on gender issues including their experiences of and the climate surrounding sexual harassment, gender discrimination, and unwanted sexual contact in the DoD civilian workplace. These indicators provide primary data on estimated prevalence rates of unwanted gender-related experiences and historically provide the ability to evaluate the impact of policies and programs with regard to DoD civilian employees. The surveys are benchmarks by which senior DoD officials can track trends over time.
All Workplace and Gender Relations surveys are Congressionally-mandated to estimate rates of gender-based assaults, assess the effectiveness of policies and programming to prevent sexual harassment and sexual assault, and assess the overall gender relations climate within the Department in accordance with 10 U.S.C. 481. Historically, these surveys have been conducted with military members only, with the first congressionally mandated Workplace and Gender Relations survey conducted in 2002 for active-duty service members and 2004 for Reserve component members. Section 1073 of the FY 2015 NDAA extended this requirement to DoD Civilian employees as well, including an amendment that inserted Section 481a into 10 U.S.C. 481 outlining the survey requirement. The first administration of the WGRC was in FY 2016 per these statutory requirements and was administered to appropriated fund (APF) civilian employees only. The second administration of the WGRC was in 2018 and expanded the target population to include nonappropriated fund (NAF) civilian employees.
• FY15 NDAA, Section 1073.
• 10 U.S.C. 481a.
• 10 U.S.C. 136.
• 10 U.S.C. 2358.
• Public Law (Pub. L.) 111-383, Sections 1602 and 1631; 113-291, Section 1073.
These legal requirements mandate that the WGRC solicit information on gender issues, including issues relating to sexual assault, sexual harassment, and gender discrimination, as well as the climate in the Department for forming professional relationships between male and female employees. They also give the Department authority to conduct such surveys under the guidance of the USD(P&R).
Overall, the results of the survey will assess progress, identify shortfalls, and revise policies and programs as needed related to issues directly affecting DoD civilian employees. Data from this survey will be presented to the OUSD(P&R), and DoD policy and program offices to assess and improve policies, programs, practices, and training related to gender relations in the DoD informed by current and statistically reliable information. Analysis will include OPA's standard products: a results and trends report (a set of relative frequency distributions of each question, and cross-tabulations of survey questions by key stratifying variables), briefing slides, reports highlighting key findings, and a statistical methodology report. Ad hoc analyses requested by the policy office sponsors and other approved organizations may be conducted as needed and based on available staff.
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
•
Requests for copies of the information collection proposal should be sent to Mr. Lucas at
Defense Human Resources Activity (DHRA), Department of Defense (DoD).
Notice of a modified system of records.
In accordance with the Privacy Act of 1974, the Office of the Secretary of Defense (OSD) is modifying a current system of records titled, Defense Civilian Human Resource Management System (DCHRMS), DHRA 23 DoD. The records within this system are used to provide human resource information and system support for the DoD civilian workforce worldwide that manages the HR processing and reporting, including position, compensation and benefits, and performance management, as well as create efficiencies in Human Capital Management. This system of records notice (SORN) is being updated to cover compensation records and administrative appeals relating to claims filed under the Helping American Victims Afflicted by Neurological Attacks Act (HAVANA). This SORN modification expands the Category of Individuals section to cover current and former DoD employees, and dependents of current or former employees who on or after January 1, 2016, experienced a qualifying brain injury. Additionally, the DoD is modifying the Routine Use section to allow additional sharing outside of DoD. Lastly, the DoD is also modifying various other sections within the SORN to improve clarity or update information that has changed.
This system of records is effective upon publication; however, comments on the Routine Uses will be accepted on or before October 23, 2024. The Routine Uses are effective at the close of the comment period.
You may submit comments, identified by docket number and title, by either of the following methods:
*
*
Samuel Peterson, DHRA Component Privacy Officer, 400 Gigling Rd., Seaside, CA 93955,
DoD is modifying the Defense Civilian Human Resource Management System, DHRA 23 DoD to support amendment of the Helping American Victims Afflicted by Neurological Attacks Act (HAVANA). In 2016, Department of State employees stationed in Havana, Cuba, began reporting a sudden onset of symptoms, including headaches, pain, nausea, disequilibrium, and hearing loss, in conjunction with sensory events. Federal agencies have called such incidents Anomalous Health Incidents (“AHIs”). Since 2016, Federal employees in numerous countries reported suspected AHIs.
Beginning on December 20, 2019, the Department of State was authorized by statute to pay benefits to employees and their dependents for injuries suffered in the Republic of Cuba, the People's Republic of China, or other foreign countries designated by the Secretary of State incurred after January 1, 2016, in connection with certain hostile or other incidents designated by the Secretary of State (Pub. L. 116-94, Division J, Title IX, section 901) (codified in 22 U.S.C. 2680b). These benefits were limited to Department of State employees only (
On October 8, 2021, the President signed the HAVANA Act of 2021 (Pub. L. 117-46). The HAVANA Act amended section 901 to authorize Federal Government agencies to compensate affected employees, former employees, and their dependents for qualifying injuries to the brain. The HAVANA Act amendments did not require that the qualifying injury occur in the Republic of Cuba, the People's Republic of China, or another foreign country designated by the Secretary of State. Section 9216 of the James M. Inhofe National Defense Authorization Act for Fiscal Year 2023 provided agencies with authority to designate incidents affecting employees or dependents who are not under the security responsibility of the Secretary of State.
The records within DHRA 23 DoD are used to provide human resource information and system support for the DoD civilian workforce worldwide that manages the HR processing and reporting, including position, compensation and benefits, and performance management, as well as create efficiencies in Human Capital Management. The SORN is being updated to cover compensation records and administrative appeals relating to claims filed under the HAVANA Act. This SORN modification expands the Category of Individuals section to cover current and former DoD employees, and dependents of current or former employees who on or after January 1, 2016, experienced a qualifying brain injury.
Subject to public comment, the DoD is adding standard routine use “I” authorizing sharing in the context of Inspector General activities, routine use “J” to allow for disclosures mandated by Federal statute or treaty, and routine use “N” to allow for sharing with the Department of State for the purpose of evaluating whether an incident is an “other incident” for purposes of establishing a qualifying injury. The following sections of this SORN are also being modified: (1) to the System Location section to reflect the various locations in which records may reside; (2) to the Authority for Maintenance of the System section to update citations(s) and add additional authorities; (3) to the Purpose section to provide clarity on how information will be used; (4) to the Categories of Records section to clarify how the records relate to the Category of Individuals; (5) to the Records Source Categories section to update source information; (6) to the Record Access Procedures section to reflect the need for individuals to identify the appropriate DoD office or component to which their request should be directed;
DoD SORNs have been published in the
Under the Privacy Act, a “system of records” is a group of records under the control of an agency from which information is retrieved by the name of an individual or by some identifying number, symbol, or other identifying particular assigned to the individual. In the Privacy Act, an individual is defined as a U.S. citizen or lawful permanent resident.
In accordance with 5 U.S.C. 552a(r) and Office of Management and Budget (OMB) Circular No. A-108, OATSD(PCLT) has provided a report of this system of records to the OMB and to Congress.
Defense Civilian Human Resource Management System (DCHRMS), DHRA 23 DoD.
Unclassified.
Department of Defense (Department or DoD), located at 1000 Defense Pentagon, Washington, DC 20301-1000, and other Department installations, offices, or mission locations. Information may also be stored within a government-certified cloud, implemented and overseen by the Department's Chief Information Officer (CIO), 6000 Defense Pentagon, Washington, DC 20301-6000.
Director, Enterprise Solutions and Integration Defense Civilian Personnel Advisory Service, 4800 Mark Center Drive, Suite 06E22, Arlington, VA 22350-6000,
5 U.S.C. Chapter 11, Office of Personnel Management; 5 U.S.C. Chapter 13, Special Authority; 5 U.S.C. Chapter 29, Commissions, Oaths, Records, and Reports; 5 U.S.C. Chapter 31, Authority for Employment; 5 U.S.C. Chapter 33, Examination, Selection, and Placement; 5 U.S.C. Chapter 41, Training; 5 U.S.C. Chapter 43, Performance Appraisal; 5 U.S.C. Chapter 51, Classification; 5 U.S.C. Chapter 53, Pay Rates and Systems; 5 U.S.C. Chapter 55, Pay Administration; 5 U.S.C. Chapter 61, Hours of Work; 5 U.S.C. Chapter 63, Leave; 5 U.S.C. Chapter 72, Antidiscrimination; Right to Petition Congress; 5 U.S.C. 7201, Antidiscrimination Policy; Minority Recruitment Program; 5 U.S.C. Chapter 75, Adverse Actions; 5 U.S.C. Chapter 83, Retirement; 5 U.S.C. Chapter 84, Federal Employees' Retirement System, Antidiscrimination Policy; Minority Recruitment Program; 10 U.S.C. 136, Under Secretary of Defense for Personnel and Readiness; HAVANA Act of 2021, Public Law 117-46, 135 Stat. 391 (2021) (codified at 22 U.S.C. 2680b(i)); Executive Order (E.O.) 9830, Amending the Civil Service Rules and Providing for Federal Personnel Administration, as amended; 29 CFR 1614.601, EEO Group Statistics; and E.O. 9397 (SSN), as amended.
Data is used to maintain a system of records that provides human resource information and system support for the Department of Defense (DoD) civilian workforce worldwide that manages the human resources processing and reporting, including position, compensation and benefits, performance management, and in making determinations of qualifications, as well as create efficiencies in Human Capital Management. Data is also used for analysis in order to meet Congressional and Federal reporting requirements.
Civilian employee, prospective applicants, and job applicants selected for civilian appropriated/non-appropriated fund (NAF), local nationals, and National Guard civilian technician positions in the DoD; and past and present DoD Civilian employees and their dependents eligible to submit claims in accordance with the HAVANA Act.
Personal information including: Name, date and place of birth, citizenship, gender, marital status, DoD identification number (DoD ID), Social Security Number (SSN), addresses, phone numbers, email addresses, employee number, emergency contact information, dependent and family member information, security clearance information, race and ethnic origin, disability code, and foreign language capability. Compensation records and administrative appeals relating to claims filed under the HAVANA Act. Position authorization and control information, position data and performance elements, personnel data and projected suspense information for personnel actions, pay, benefits, and entitlements data. Historical information on employees, including job experience, education, training, and training transaction data, performance plans, interim appraisals, final appraisals, closeouts and ratings, professional accounting or other certifications or licenses, awards information and merit promotion information, separation and retirement data, civilian deployment information, and adverse and disciplinary action data. In addition, the Corporate Management Information System data (which is comprised of each employee current and historical record, to include all person, assignment, position, and personnel actions/updates) will be maintained and refreshed for agencies' historical and congressional reporting purposes.
The individual, resumes, applicant record, employee or supervisor generated training requests; human resources generated records; employee generated data recorded as self-certified; and other employee or supervisor generated records. Data is also received from various interfaces with systems including, the Corporate Management Information System, Joint Personnel Adjudication System, Fourth Estate Manpower Tracking System, Defense Civilian Payroll System, the Air Force Manpower Programming and Execution System, NAF Payroll, Thrift Savings Plan hardship, Interactive Voice Recognition System, USA Staffing, and employee completed training data provided by respective Component agencies.
In addition to those disclosures generally permitted under 5 U.S.C. 552a(b) of the Privacy Act of 1974, as amended, all or a portion of the records or information contained herein may specifically be disclosed outside the DoD as a routine use pursuant to 5 U.S.C. 552a(b)(3) as follows:
A. To contractors, grantees, experts, consultants, students, and others performing or working on a contract, service, grant, cooperative agreement, or other assignment for the Federal Government when necessary to
B. To the appropriate Federal, State, local, territorial, tribal, foreign, or international law enforcement authority or other appropriate entity where a record, either alone or in conjunction with other information, indicates a violation or potential violation of law, whether criminal, civil, or regulatory in nature.
C. To any component of the Department of Justice for the purpose of representing the DoD, or its components, officers, employees, or members in pending or potential litigation to which the record is pertinent.
D. In an appropriate proceeding before a court, grand jury, or administrative or adjudicative body or official, when the DoD or other Agency representing the DoD determines that the records are relevant and necessary to the proceeding; or in an appropriate proceeding before an administrative or adjudicative body when the adjudicator determines the records to be relevant to the proceeding.
E. To the National Archives and Records Administration for the purpose of records management inspections conducted under the authority of 44 U.S.C. 2904 and 2906.
F. To a Member of Congress or staff acting upon the Member's behalf when the Member or staff requests the information on behalf of, and at the request of, the individual who is the subject of the record.
G. To appropriate agencies, entities, and persons when (1) the DoD suspects or confirms a breach of the system of records; (2) the DoD determines as a result of the suspected or confirmed breach there is a risk of harm to individuals, the DoD (including its information systems, programs, and operations), the Federal Government, or national security; and (3) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with the DoD's efforts to respond to the suspected or confirmed breach or to prevent, minimize, or remedy such harm.
H. To another Federal agency or Federal entity, when the DoD determines that information from this system of records is reasonably necessary to assist the recipient agency or entity in (1) responding to a suspected or confirmed breach or (2) preventing, m6inimizing, or remedying the risk of harm to individuals, the recipient agency or entity (including its information systems, programs and operations), the Federal Government, or national security, resulting from a suspected or confirmed breach.
I. To another Federal, State or local agency for the purpose of comparing to the agency's system of records or to non-Federal records, in coordination with an Office of Inspector General in conducting an audit, investigation, inspection, evaluation, or some other review as authorized by the Inspector General Act of 1978, as amended.
J. To such recipients and under such circumstances and procedures as are mandated by Federal statute or treaty.
K. To the Equal Employment Opportunity Commission for the purpose of providing Equal Employment Opportunity group statistics in accordance with 29 CFR 1614.601, EEO Group Statistics.
L. To the Office of Personnel Management (OPM) for the purpose of addressing civilian pay and leave, benefits, retirement deduction, and any other information necessary for the OPM to carry out its legally authorized government-wide personnel management functions and studies.
M. To educational institutions and commercial training providers for the purpose of selecting and registering applicants approved by a DoD component to attend a specified program, and, when applicable, to provide for payment.
N. To the Department of State, as appropriate in evaluating whether an incident is an “other incident” for purposes of establishing a qualifying injury or should be so designated. Other incident is a new onset of physical manifestations that cannot otherwise be readily explained that is designated under 22 U.S.C. 2680b.
Records may be stored electronically. The records may be stored on magnetic disc, tape, or digital media; in agency-owned cloud environments; or in vendor Cloud Service Offerings certified under the Federal Risk and Authorization Management Program (FedRAMP).
Records may be retrieved by name, DoD ID, or SSN.
Records are retained for 25 years after the records are closed—defined as after an individual separates from the Agency for Service members or after final payment is received for dependents; Corporate Management Information System records are cutoff and destroyed when no longer needed for business use.
Records are accessed and/or maintained in areas accessible only to authorized personnel who are properly screened, cleared, and trained. Common Access Cards (CACs) are employed to ensure access is limited to authorized personnel only. Role based access is used to ensure HR Personnel and system administrators have access to only the records they are entitled to see. Employees are able to access and view only their records and update certain personal information to them via two-factor authentication or CAC. Additional technical controls include encryption of data at rest and in transit, firewall, virtual private network, intrusion detection system, DoD Public Key Infrastructure Certificates, and least privilege access. Security systems and/or security guards protect buildings where records are accessed or maintained. Additional physical access controls include, biometric access systems, multiple layers of locked access control doors and mantraps, closed-circuit television, and physical intrusion alarms.
Individuals seeking access to records about themselves contained in this system should address written inquiries to the Office of the Secretary of Defense/Joint Staff FOIA Requester Service Center, Office of Freedom of Information, 1155 Defense Pentagon, Washington, DC 20301-1155. Signed written requests should contain name and number of this system of records notice along with full, current address, and email of the individual name, date of birth, DoD ID Number, and dates of employment (or approximate), and last employing agency. In addition, the requester must provide either a notarized statement or an unsworn declaration made in accordance with 28 U.S.C. 1746, in the following format:
If executed outside the United States: “I declare (or certify, verify, or state) under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on (date). (Signature).”
If executed within the United States, its territories, possessions, or commonwealths: “I declare (or certify, verify, or state) under penalty of perjury that the foregoing is true and correct. Executed on (date). (Signature)”.
The DoD rules for accessing records, contesting contents, and appealing
Individuals seeking to determine whether information about themselves is contained in this system of records should follow the instructions for Record Access Procedures above.
None.
January 28, 2020, 85 FR 4949; November 15, 2010, 75 FR 69642.
Defense Security Cooperation Agency, Department of Defense (DoD).
Arms sales notice.
The DoD is publishing the unclassified text of an arms sales notification.
Pamela Young at (703) 953-6092,
This 36(b)(1) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives with attached Transmittal 23-34, and Policy Justification.
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* As defined in Section 47(6) of the Arms Export Control Act.
The Government of Norway has requested continued sustainment and associated services for four (4) C-130J aircraft beyond Block 6 through 2028. Included are Joint Mission Planning Systems (JMPS); aircraft components, spare parts, consumables, and accessories; repair and return support; aircraft support and support equipment; unclassified publications and technical documentation; software delivery and support; unclassified Computer Program Identification Number (CPIN) systems; telecommunications support; minor modifications, maintenance and maintenance support; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistical and program support. The estimated total cost is $166 million.
This proposed sale will support the foreign policy goals and national security objectives of the United States by improving the security of a NATO Ally that is a force for political stability and economic progress in Europe.
The proposed sale will improve Norway's capability to meet current and future threats by bolstering operational readiness while enhancing air and defense capabilities with a modernized fleet. Norway already has C-130Js and will have no difficulty absorbing these articles and services into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The principal contractor will be Lockheed Martin, Marietta, GA. The purchaser typically requests offsets. Any offset agreement would be defined in negotiations between the purchaser and the contractor.
Implementation of this proposed sale will not require the assignment of any additional U.S. Government or contractor representatives to Norway.
There will be no adverse impact on U.S. defense readiness because of this proposed sale.
Office of the Assistant Secretary of Defense for Health Affairs (OASD(HA)), Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by October 23, 2024.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Reginald Lucas, (571) 372-7574,
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
•
Requests for copies of the information collection proposal should be sent to Mr. Lucas at
Defense Security Cooperation Agency, Department of Defense (DoD).
Arms sales notice.
The DoD is publishing the unclassified text of an arms sales notification.
Pamela Young at (703) 953-6092,
This 36(b)(5)(C) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives with attached Transmittal 23-0D.
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Date: July 10, 2017
Military Department: Army
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This transmittal notifies the inclusion of the following additional MDE items: forty (40) Patriot Advanced Capability-2 (PAC-2) Anti-Tactical Missiles (ATM), MIM-104C. The estimated total value of these additional items is $200 million. The total estimated MDE value will increase by $200 million, resulting in a new MDE total of $1.5 billion. The total estimated case value will increase to $4.1 billion.
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The highest level of classification of defense articles, components, and services included in this potential sale is SECRET.
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Federal Student Aid (FSA), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act (PRA) of 1995, the Department is proposing a revision of a currently approved information collection request (ICR).
Interested persons are invited to submit comments on or before October 23, 2024.
Written comments and recommendations for proposed information collection requests should be submitted within 30 days of publication of this notice. Click on this link
For specific questions related to collection activities, please contact Beth Grebeldinger, 202-570-8414.
The Department is especially interested in public comment addressing the following issues: (1) is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
The Department is requesting a revision of the currently approved deferment forms. The proposed changes include the following:
Streamlining the forms by eliminating duplicative and obsolete information; reordering items to present information in a more logical order that is consistent between forms; using “plain language”
U.S. Department of Energy.
Notice of a modified system of records.
As required by the Privacy Act of 1974 and the Office of Management and Budget (OMB) Circulars A-108 and A-130, the Department of Energy (DOE or the Department) is publishing notice of a modification to an existing Privacy Act system of records. DOE proposes to amend System of Records DOE-10 Energy Employees Occupational Illness Compensation Program Act Files. This System of Records Notice (SORN) is being modified to align with new formatting requirements, published by OMB, and to ensure appropriate Privacy Act coverage of business processes and Privacy Act information. This notice also incorporates into the “Routine Uses” section changes required by amendments to The Energy Employees Occupational Illness Compensation Program Act (EEOICPA). While there are no substantive changes to the “Categories of Individuals” or “Categories of Records” sections covered by this SORN, substantive changes have been made to the “System Locations,” “Routine Uses,” and “Administrative, Technical and Physical Safeguards” sections to provide greater transparency. Changes to “Routine Uses” include new provisions related to responding to breaches of information held under a Privacy Act SORN as required by OMB's Memorandum M-17-12, “Preparing for and Responding to a Breach of Personally Identifiable Information” (January 3, 2017). Changes to routine uses pertaining to EEOICPA have been modified to remove two categories of obsolete users due to the 2004 amendments that repealed the use of physician panels. Three routine uses have been consolidated into one to reduce redundancy. Language throughout the SORN has been updated to align with applicable Federal privacy laws, policies, procedures, and best practices.
This modified SORN will become applicable following the end of the public comment period on October 23, 2024 unless comments are received that result in a contrary determination.
Written comments should be sent to the DOE Desk Officer, Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10102, 735 17th Street NW, Washington, DC 20503, and to Ken Hunt, Chief Privacy Officer, U.S. Department of Energy, 1000 Independence Avenue SW, Rm. 8H-085, Washington, DC 20585, by facsimile at (202) 586-8151, or by email at
Ken Hunt, Chief Privacy Officer, U.S. Department of Energy, 1000 Independence Avenue SW, Rm. 8H-085, Washington, DC 20585, or by facsimile at (202) 586-8151, by email at
On January 9, 2009, DOE published a Compilation of its Privacy Act systems of records, which included System of Records DOE-10 Energy Employees Occupational Illness Compensation Program Act Files. This notice proposes amendments to the system locations section of that system of records by updating, removing, and adding addresses as appropriate. Addresses updated include: John A. Gordon Albuquerque Complex, Office of Science (Chicago and Oak Ridge Offices), Golden Field Offices, Lawrence Livermore National Laboratory, Lockheed Idaho Technical Center, Miamisburg Environmental Management Project, National Energy Technology Laboratory (Pittsburg, Morgantown, and Albany Offices), National Nuclear Security Administration (NNSA) Nevada Field Office, Oak Ridge Institute for Science and Education, Environmental Management Consolidated Business Center, Office of River Protection, Richland Operations Office, Savannah River Office, SLAC National Accelerator Laboratory, and Stanford Synchrotron Radiology Laboratory. Addresses removed include: Bettis Atomic Power Laboratory, Office of Energy, Efficiency and Renewable Energy (Boston and Denver Offices), Hanford Environmental Health Foundation, Philadelphia Regional Office, Radiological and Environmental Health Laboratory, and Seattle Regional Office. Addresses added include: B&W Pantex, Office of Legacy Management, Technology Engineering Center, and Peek Street Facility. In the “Routine Uses” section, this modified notice deletes a previous routine use concerning efforts responding to a suspected or confirmed loss of confidentiality of information as it appears in DOE's compilation of its Privacy Act systems of records (January 9, 2009) and replaces it with one to assist DOE with responding to a suspected or confirmed breach of its records of Personally Identifiable Information (PII), modeled with language from OMB's Memorandum M-17-12, “Preparing for and Responding to a Breach of Personally Identifiable Information” (January 3, 2017). Further, this notice adds one new routine use to ensure that DOE may assist another agency or entity in responding to the other agency's or entity's confirmed or suspected breach of PII, as appropriate, as aligned with OMB's Memorandum M-17-12. Some changes have been made to the routine uses to accommodate 2004 and 2015 amendments to EEOICPA by Subtitle E of Division C of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 (Pub. L. 108-375) and Carl Levin and Howard P. “Buck” McKeon National Defense Authorization Act for Fiscal Year 2015 (Pub. L. 113-291). “Categories of Records in the System” now includes individual medical records, payroll information/records, accident reports; badging records; workers' compensation records; security badge records; security records; industrial hygiene records. “Radiological and chemical” has been added to modify “exposure records.” An administrative change required by the FOIA Improvement Act of 2016 extends the length of time a requestor is permitted to file an appeal under the Privacy Act from 30 to 90 days. Both the “System Locations” and “Administrative, Technical and Physical Safeguards” sections have been modified to reflect the Department's usage of cloud-based services for records storage. Language throughout the SORN has been updated to align with applicable Federal privacy laws, policies, procedures, and best practices.
DOE-10 Energy Employees Occupational Illness Compensation Program Act Files.
Unclassified.
Systems leveraging this SORN may exist in multiple locations. All systems storing records in a cloud-based server are required to use government-approved cloud services and follow National Institute of Standards and Technology (NIST) security and privacy standards for access and data retention. Records maintained in a government-approved cloud server are accessed through secure data centers in the continental United States.
U.S. Department of Energy, 1000 Independence Avenue SW, Washington, DC 20585.
U.S. Department of Energy, 19901 Germantown Road, Germantown, MD 20874-1290.
U.S. Department of Energy, John A. Gordon Albuquerque Complex, 24600 20th Street SE, Albuquerque, NM 87116.
U.S. Department of Energy, NNSA Naval Reactors Field Office, Pittsburgh Naval Reactors, P.O. Box 109, West Mifflin, PA 15122-0109.
U.S. Department of Energy, NNSA Naval Reactors Field Office, Schenectady Naval Reactors, P.O. Box 1069, Schenectady, NY 12301.
U.S. Department of Energy, Amarillo Site Operations, Highway 60, FM2373, Amarillo, TX 79177.
U.S. Department of Energy, Carlsbad Field Office, P.O. Box 3090, Carlsbad, NM 88221.
U.S. Department of Energy, Office of Science, Chicago Office, Consolidated Service Center, 9800 South Cass Avenue, Lemont, IL 60439.
U.S. Department of Energy, Fernald Environmental Management Project, 7400 Wiley Road, Cincinnati, OH 45030.
U.S. Department of Energy, General Atomics Site Office, 3550 General Atomic Court, B-7, Room 119, San Diego, CA 92121.
U.S. Department of Energy, Golden Field Office, 15013 Denver West Parkway, Golden, CO 80401.
U.S. Department of Energy, Idaho Operations Office, 1955 Fremont Avenue, Idaho Falls, ID 83415.
U.S. Department of Energy, Idaho National Engineering and Environmental Laboratory, CF 690 MS 4149, Scoville, ID 83415.
U.S. Department of Energy, Kansas City Site Office, 2000 East 95th Street, Kansas City, MO 64141-3202.
U.S. Department of Energy, NNSA Sandia Site Office, Pennsylvania & H Street, Albuquerque, NM 87185-5400.
U.S. Department of Energy, NNSA Sandia Site Office, 1515 Eubank Blvd. SE, Albuquerque, NM 87123.
U.S. Department of Energy, Knolls Atomic Power Laboratory, 2401 River Road, Niskayuna, NY 12309.
U.S. Department of Energy, Lawrence Berkeley National Laboratory, 1 Cyclotron Road, Berkeley, CA 94720.
U.S. Department of Energy, Lawrence Livermore National Laboratory, 7000 East Avenue, P.O. Box 808, L-1, Livermore, CA 94551-0808.
U.S. Department of Energy, Livermore Site Office, Nevada Test Site, University of California, P.O. Box 45, Mercury, NV 89023.
U.S. Department of Energy, The Office of Site Operations, 528 35th Street, Los Alamos, NM 87545.
U.S. Department of Energy, NNSA Los Alamos National Laboratory, SM #30 Bikini Road, Los Alamos, NM 87545.
U.S. Department of Energy, National Energy Technology Laboratory (Pittsburgh), 626 Cochran Mill Road, Pittsburgh, PA 15236.
U.S. Department of Energy, National Energy Technology Laboratory (Morgantown), 3610 Collins Ferry Road, Morgantown, WV 26505.
U.S. Department of Energy, National Energy Technology Laboratory (Albany), 1450 Queen Avenue SW, Albany, OR 97321.
U.S. Department of Energy, NNSA Nevada Field Office, 232 Energy Way, North Las Vegas, NV 89030.
U.S. Department of Energy, Nevada Test Site Mercury, Nevada, Building 111, P.O. Box 677, Mercury, NV 89023-0677.
Oak Ridge Institute for Science and Education (ORISE), 1299 Bethel Valley Road, Oak Ridge, TN 37830.
U.S. Department of Energy, Office of Science, Consolidated Service Center, P.O. Box 2001, Oak Ridge, TN 37831.
U.S. Department of Energy, Environmental Management Consolidated Business Center (EMCBC), 550 Main Street, Rm. 7-010, Cincinnati, OH 45202.
U.S. Department of Energy, Pacific Northwest National Laboratory, 902 Battelle Blvd., P.O. Box 999, Richland, WA 99352.
U.S. Department of Energy, Paducah Site Office, 5600 Hobbs Road, West Paducah, KY 42086.
U.S. Department of Energy, Portsmouth/Paducah Project Office, 3930 U.S. 23, Perimeter Road, Piketon, OH 45661.
U.S. Department of Energy, Office of River Protection, P.O. Box 450, Richland, WA 99352.
U.S. Department of Energy, Richland Operations Office, P.O. Box 550, Richland, WA 99352.
U.S. Department of Energy, Savannah River Operations Office, P.O. Box A, Aiken, SC 29801.
U.S. Department of Energy, SLAC National Accelerator Laboratory, 2575 Sand Hill Road, Menlo Park, CA 94025.
U.S. Department of Energy, Stanford Site Office, 2575 Sand Hill Road, B-41, MS: 8-A, Menlo Park, CA 94025.
U.S. Department of Energy, Stanford Synchrotron Radiation Lightsource, 2575 Sand Hill Road MS69, Menlo Park, CA 94025.
U.S. Department of Energy, Thomas Jefferson National Accelerator Facility, 12000 Jefferson Avenue, Newport News, VA 23606.
U.S. Department of Energy, Waste Isolation Pilot Project Office, P.O. Box 3090, Carlsbad, NM 88221.
U.S. Department of Energy, West Valley Demonstration Project, 10282 Rock Springs Road, West Valley, NY 14171-9799.
U.S. Department of Energy, B&W Pantex, Hwy. 60 & FM 2373, Bldg. 16-12, Amarillo, TX 79120.
U.S. Department of Energy, Office of Legacy Management, 2597 Legacy Way, Grand Junction, CO 81503.
U.S. Department of Energy, Technology Engineering Center, 4100 Guardian Street, Suite 160, Simi Valley, CA 93603.
U.S. Department of Energy, Peek Street Facility, Code NAVSEA 08U, Navy Sea System Command, 1240 Isaac Hull Avenue SE, Building 104, Washington Navy Yard, DC 20376-8036.
42 U.S.C. 7101
Records in this system are collected and maintained by the Department to facilitate resolution of claims under the EEOICPA and to comply with the provisions of the EEOICPA, specifically the provisions of the Act that govern DOE's information sharing requirements.
This system of records covers individuals or their survivors who claim benefits under the Energy Employees Occupational Illness Compensation Program Act (EEOICPA). These individuals include, but are not limited to, federal employees or survivors of federal employees, employees or survivors of employees of the Department of Energy (including NNSA), its predecessor agencies, and their contractors and subcontractors.
This system of records is created by DOE in response to requests from the Department of Labor (DOL), the National Institute for Occupational Safety and Health (NIOSH), and claimants for information for the adjudication of claims. The records are compiled as part of DOE's responsibilities under the EEOICPA. Claim forms filed by or on behalf of claimants or their survivors seeking benefits under the EEOICPA; employment records; radiological and chemical exposure records; medical reports; individual medical records; personnel security questionnaires; payroll information/records; safety records or other incident reports, including but not limited to area sampling data, accidental releases, explosions, spills, etc.; accident reports; badging records; workers' compensation records; security badge records; security records; industrial hygiene records; and correspondence from individuals, DOL, and NIOSH.
Records in this system will be obtained from the individual who is the subject of the records; physicians and other medical professionals; medical institutions; state and federal workers' compensation offices; family members of the subject; attorneys representing the individual; individuals' employers, including DOE and its contractors and subcontractors; medical laboratories; and other state and federal agencies.
1. A record from this system may be disclosed as a routine use to current or former DOE contractors in performance of their contracts, and their officers and employees who have a need for the record in the performance of their duties. Those provided information under this routine use are subject to the same limitations applicable to Department officers and employees under the Privacy Act.
2. A record from this system may be disclosed as a routine use to DOE financial assistance or cooperative agreement recipients in performance of their financial assistance agreements, and their officers and employees who have a need for the record in the performance of their duties.
3. A record from this system may be disclosed as a routine use to other state and federal agencies or entities whose mission entails reviewing or managing workers' compensation claims or administering other benefits programs.
4. A record from this system may be disclosed as a routine use to members of DOE's Former Worker Medical Screening Program, DOE or DOL advisory board members, and cooperative agreement holders of the Department of Labor, the Department of Health and Human Services, the Department of Justice, and other Federal agencies and their components to implement the Federal compensation program established by the Energy Employees Occupational Illness Compensation Program Act, for the purpose of outreach and assisting in the adjudication or processing of a claim under that Act.
5. A record from this system may be disclosed as a routine use for the purpose of an investigation, settlement of claims, or the preparation and conduct of litigation to (1) persons representing the Department in the investigation, settlement or litigation, and to individuals assisting in such representation; (2) others involved in the investigation, settlement, and litigation, and their representatives and individuals assisting those representatives; (3) witnesses, potential witnesses, or their representatives and assistants; and (4) any other persons who possess information pertaining to the matter when it is necessary to obtain information or testimony relevant to the matter.
6. A record from this system may be disclosed as a routine use to the Department of Justice when DOE determines that an individual may be eligible for compensation under the Radiation Exposure and Compensation Act of 1990 (42 U.S.C. 2210, note, and as further clarified in title 28 Code of Federal Regulations (CFR) part 79), a compensation program administered by the Department of Justice.
7. A record from this system may be disclosed as a routine use to the appropriate local, tribal, state or federal agency when the record alone or in conjunction with other information, indicates a violation or potential violation of law whether civil, criminal, or regulatory in nature.
8. A record from this system may be disclosed as a routine use to a member of Congress submitting a request involving a constituent when the constituent has requested assistance from the member concerning the subject matter of the record. The member of Congress must provide a copy of the constituent's signed request for assistance.
9. A record from this system may be disclosed as a routine use to appropriate agencies, entities, and persons when (1) the Department suspects or has confirmed that there has been a breach of the system of records; (2) the Department has determined that as a result of the suspected or confirmed breach there is a risk of harm to individuals, DOE (including its information systems, programs, and operations), the Federal Government, or national security; and (3) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with the Department's efforts to respond to the suspected or confirmed breach or to prevent, minimize, or remedy such harm.
10. A record from this system may be disclosed as a routine use to another Federal agency or Federal entity, when the Department determines that information from this system of records is reasonably necessary to assist the recipient agency or entity in (1) responding to a suspected or confirmed breach or (2) preventing, minimizing, or remedying the risk of harm to individuals, the recipient agency or entity (including its information systems, programs, and operations), the Federal Government, or national security, resulting from a suspected or confirmed breach.
Records may be stored as paper records, microfilm, or electronic media.
Records are retrieved by the name of the individual, Social Security number, or employee number.
Retention and disposition of these records is in accordance with the National Archives and Records Administration-approved records disposition schedules with a retention of 250 years.
Electronic records may be secured and maintained on a cloud-based
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The Department follows the procedures outlined in 10 CFR 1008.4. Valid identification of the individual making the request is required before information will be processed, given, access granted, or a correction considered, to ensure that information is processed, given, corrected, or records disclosed or corrected only at the request of the proper person.
Any individual may submit a request to the System Manager and request a copy of any records relating to them. In accordance with 10 CFR 1008.11, any individual may appeal the denial of a request made by him or her for information about or for access to or correction or amendment of records. An appeal shall be filed within 90 calendar days after receipt of the denial. When an appeal is filed by mail, the postmark is conclusive as to timeliness. The appeal shall be in writing and must be signed by the individual. The words “PRIVACY ACT APPEAL” should appear in capital letters on the envelope and the letter. Appeals of denials relating to records maintained in government-wide system of records reported by Office of Personnel Management (OPM), shall be filed, as appropriate, with the Assistant Director for Agency Compliance and Evaluation, OPM, 1900 E Street NW, Washington, DC 20415. All other appeals relating to DOE records shall be directed to the Director, Office of Hearings and Appeals (OHA), 1000 Independence Avenue SW, Washington, DC 20585.
In accordance with the DOE regulation implementing the Privacy Act, 10 CFR part 1008, a request by an individual to determine if a system of records contains information about themselves should be directed to the U.S. Department of Energy, Headquarters, Privacy Act Officer. The request should include the requester's complete name and the time period for which records are sought.
None.
This SORN was last published in the
This document of the Department of Energy was signed on September 13, 2024, by Ann Dunkin, Senior Agency Official for Privacy, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
U.S. Department of Energy.
Notice correction.
The Department of Energy (DOE) published in the
Oluwatosin Fadarey, Attorney-Adviser (Labor), GC-63, U.S. Department of Energy, 1000 Independence Avenue SW, Washington, DC 20585.
In the
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(8)
This document of the Department of Energy was signed on September 17, 2024, by John T. Lucas, Deputy General Counsel for Business Transactions, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been
Environmental Protection Agency (EPA).
Notice.
In compliance with the Paperwork Reduction Act (PRA), this document announces the availability of and solicits public comment on the following Information Collection Request (ICR) that EPA is planning to submit to the Office of Management and Budget (OMB): “Pesticide Environmental Stewardship Program Annual Measures Reporting,” identified by EPA ICR No. 2415.05 and OMB Control No. 2070-0188. This ICR represents a renewal of an existing ICR that is currently approved through July 31, 2025. Before submitting the ICR to OMB for review and approval under the PRA, EPA is soliciting comments on specific aspects of the information collection that is summarized in this document. The ICR and accompanying material are available in the docket for public review and comment.
Comments must be received on or before November 22, 2024.
Submit your comments, identified by docket identification (ID) number EPA-HQ-OPP-2024-0395, through the Federal eRulemaking Portal at
Carolyn Siu, Mission Support Division (7602M), Office of Program Support, Office of Chemical Safety and Pollution Prevention, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001; telephone number: (703) 347-0159; email address:
Pursuant to PRA section 3506(c)(2)(A) (44 U.S.C. 3506(c)(2)(A)), EPA specifically solicits comments and information to enable it to:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility.
2. Evaluate the accuracy of the Agency's estimates of the burden of the proposed collection of information, including the validity of the methodology and assumptions used.
3. Enhance the quality, utility, and clarity of the information to be collected.
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques or other forms of information technology,
The ICR, which is available in the docket along with other related materials, provides a detailed explanation of the collection activities and the burden estimate that is only briefly summarized here:
EPA expects an increase in the number of potential respondents from 437 to 456, with a corresponding burden increase. This change is based on an anticipated increase in entities participating in the PESP Program. There is also an increase in industry cost by $382,790, which reflects the
EPA will consider the comments received and amend the ICR as appropriate. The final ICR package will then be submitted to OMB for review and approval pursuant to 5 CFR 1320.12. EPA will issue another
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA) is requesting comment on an application from Jaguar Land Rover North America, LLC (“JLR”) for off-cycle carbon dioxide (CO
Comments must be submitted on or before October 23, 2024.
Submit your comments referencing Docket ID No. EPA-HQ-OAR-2024-0345 online using
EPA's policy is that all comments received will be included in the public docket without change including any personal information provided, unless the comment includes profanity, threats, information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute.
David Wright, Environmental Protection Specialist, Office of Transportation and Air Quality, Implementation, Analysis and Compliance Division, U.S. Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105. Telephone: (734) 214-4467. Email address:
EPA's light-duty vehicle greenhouse gas (GHG) program provides three pathways by which a manufacturer may accrue off-cycle carbon dioxide (CO
Under the regulations, a manufacturer seeking to demonstrate off-cycle credits with an alternative methodology (
• Use modeling, on-road testing, on-road data collection, or other approved analytical or engineering methods;
• Be robust, verifiable, and capable of demonstrating the real-world emissions benefit with strong statistical significance;
• Result in a demonstration of baseline and controlled emissions over a wide range of driving conditions and number of vehicles such that issues of data uncertainty are minimized;
• Result in data on a model type basis unless the manufacturer demonstrates that another basis is appropriate and adequate.
Further, the regulations specify the following requirements regarding an application for off-cycle CO
• A manufacturer requesting off-cycle credits must develop a methodology for demonstrating and determining the benefit of the off-cycle technology and carry out any necessary testing and analysis required to support that methodology.
• A manufacturer requesting off-cycle credits must conduct testing and/or prepare engineering analyses that demonstrate the in-use durability of the
• The application must contain a detailed description of the off-cycle technology and how it functions to reduce CO
• The application must contain a list of the vehicle model(s) which will be equipped with the technology.
• The application must contain a detailed description of the test vehicles selected and an engineering analysis that supports the selection of those vehicles for testing.
• The application must contain all testing and/or simulation data required under the regulations, plus any other data the manufacturer has considered in the analysis.
Finally, the alternative methodology must be approved by EPA prior to the manufacturer using it to generate credits. As part of the review process defined by regulation, the alternative methodology submitted to EPA for consideration must be made available for public comment.
JLR is applying for off-cycle GHG credits for the use of a 48 Volt efficient motor-generator combined with a 48 volt/12 volt DC/DC converter. The JLR technology consists of two components, a 48-volt motor-generator which is either belt driven or connected to the crankshaft of an internal combustion engine, and a 48 volt/12 volt DC/DC converter. The 48 volt motor generator provides a couple of functions, it can operate as a starter motor and crank the engine and it also can operate as a generator converting mechanical energy into electrical energy. The efficiency of the 48 volt generator when belt driven is in the range of 80 to 85% and when connected to the crankshaft of an engine it can be as high as 90 to 95%. Once generated the 48 volt electricity needs to be converted to 12 volts for use by the 12 volt electronics in the vehicle. The conversion of the 48 volt electricity to 12 volt is performed by the second device associated with this technology, a DC-DC converter. Converting 48 volt electricity to 12 volt electricity produces an energy loss which also needs to be measured to determine the overall efficiency of the combined 48 volt motor-generator and DC-DC converter. This application is only for determining the off-cycle benefit of the generator portion of the technology.
JLR is the first manufacturer to submit a complete alternative method off-cycle GHG application for a 48 volt motor-generator combined with a 48 volt/12 volt DC-DC converter.
JLR is applying for credits for the 2023 and later model years for vehicles sold in the U.S. and equipped with the 48 volt efficient motor-generator combined with a 48 volt/12 volt DC/DC converter. JLR is requesting a credit value of 1.6 grams/mile. Details of the testing and analysis can be found in the manufacturer's application.
EPA has reviewed the applications for completeness and is now making the applications available for public review and comment as required by the regulations. The off-cycle credit applications submitted by the manufacturers (with confidential business information redacted) have been placed in the public docket (see
EPA is providing a 30-day comment period on this application for off-cycle credits described in this notice, as specified by the regulations. The manufacturer may submit a written rebuttal of comments for EPA's consideration or may revise an application in response to comments. After reviewing any public comments and any rebuttal of comments submitted by manufacturers, EPA will make a final decision regarding the credit request. EPA will make its decision available to the public by placing a decision document (or multiple decision documents) in the docket and on EPA's website at the same manufacturer-specific pages shown above.
Environmental Protection Agency (EPA)
Notice; extension of public comment period.
On August 29, 2024, the Environmental Protection Agency (EPA) published a request for information (RFI) on the “Use of Advanced and Emerging Technologies for Quantification of Annual Facility Methane Emissions Under the Greenhouse Gas Reporting Program”. The EPA is extending the comment period.
The comment period for the document published on August 29, 2024, at 89 FR 70177, is extended. Comments must be received on or before November 27, 2024.
Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2024-0350, to the Federal Portal:
Vasco Roma, Environmental Protection Agency, Office of Air and Radiation, Office of Atmospheric Protection, Climate Change Division; telephone number: 202-564-1662; email address:
On August 29, 20204, the EPA published an RFI on the “Use of Advanced and Emerging Technologies for Quantification of Annual Facility Methane Emissions Under the Greenhouse Gas Reporting Program”. The public comment for this RFI was scheduled to end on October 28, 2024. In response to multiple extension requests received to date, the EPA is extending that deadline to
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995, the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal Agencies to take this opportunity to comment on the following information collection. Pursuant to the Small Business Paperwork Relief Act of 2002, the FCC seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.” The Commission may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
Written comments and recommendations for the proposed information collection should be submitted on or before October 23, 2024.
Comments should be sent to
For additional information or copies of the information collection, contact Nicole Ongele at (202) 418-2991. To view a copy of this information collection request (ICR) submitted to OMB: (1) go to the web page
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the FCC invited the general public and other Federal Agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology. Pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the FCC seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”
Carriers will identify, from among the locations they have already submitted and certified in USAC's High Cost Universal Broadband (HUBB) portal, the locations where they have an active subscriber (deployment locations are reported under OMB Control Number 3060-1228, and active locations will be reported under this control number). From those subscriber locations, USAC will then select a random sample from which the carrier will be required to perform testing for speed and latency. Carriers that do not provide location information in the HUBB will use a randomization tool provided by USAC to select a random sample of locations for testing. Due to the rule changes that the Commission adopted on the
89 FR 75540.
Thursday, September 19, 2024 at 10:00 a.m.
Proposed Referral of Questions on Dependent Care to Regulations Committee
Judith Ingram, Press Officer, Telephone: (202) 694-1220.
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The public portions of the applications listed below, as well as other related filings required by the Board, if any, are available for immediate inspection at the Federal Reserve Bank(s) indicated below and at the offices of the Board of Governors. This information may also be obtained on an expedited basis, upon request, by contacting the appropriate Federal Reserve Bank and from the Board's Freedom of Information Office at
Comments received are subject to public disclosure. In general, comments received will be made available without change and will not be modified to remove personal or business information including confidential, contact, or other identifying information. Comments should not include any information such as confidential information that would not be appropriate for public disclosure.
Comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors, Ann E. Misback, Secretary of the Board, 20th Street and Constitution Avenue NW, Washington, DC 20551-0001, not later than October 23, 2024.
1.
1.
Board of Governors of the Federal Reserve System.
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice.
The Centers for Disease Control and Prevention (CDC), within the Department of Health and Human Services (HHS) announces fees for vessel sanitation inspections for fiscal year (FY) 2025. These inspections are conducted by HHS/CDC's Vessel Sanitation Program (VSP). VSP helps the cruise line industry fulfill its responsibility for developing and implementing comprehensive sanitation programs to minimize the risk for environmentally associated illnesses and hazards. Every vessel that has a foreign itinerary and carries 13 or more passengers is subject to twice-yearly unannounced operations inspections and, when necessary, reinspection.
These fees apply to inspections conducted from October 13, 2024, through September 30, 2025.
CAPT Luis Rodriguez, Chief, Vessel Sanitation Program, National Center for Environmental Health, Centers for Disease Control and Prevention, 4770 Buford Highway NE, MS 106-6, Atlanta, Georgia 30341-3717; phone: 800-323-2132; email:
HHS/CDC established the Vessel Sanitation Program (VSP) in the 1970s as a cooperative activity with the cruise ship industry. VSP helps the cruise ship industry prevent and control the introduction and spread of environmentally associated illnesses and hazards on cruise ships. VSP operates under the authority of the Public Health Service Act (Section 361 of the Public Health Service Act; 42 U.S.C. 264, “Control of Communicable Diseases”). Regulations found at 42 CFR 71.41 (Foreign Quarantine—Requirements Upon Arrival at U.S. Ports: Sanitary Inspection; General Provisions) state that carriers arriving at U.S. ports from foreign areas are subject to sanitary inspections to determine potential rodent, insect, or other vermin infestations; contaminated food or water; or other sanitary conditions requiring measures to prevent introduction or spread of communicable diseases.
The FY 2025 fee schedule reflects increases to cover costs to operate and improve the program. Travel expenses and other costs have increased, and larger ships and more complex features mean more inspectors are needed for each inspection. Fees charged for inspections also support many additional VSP services beyond inspections (plan reviews, equipment reviews, technical assistance, epidemiological investigations, and outbreak response activities). VSP will continue to enhance customer service to cruise lines and shipyards as well as public health efforts onboard by offering additional value-added services requested by industry partners such as modernization of VSP's data systems to increase functionality and efficiency and updates to VSP training platforms.
Additionally, the fee schedule will be restructured from seven categories to four categories. This new structure addresses comments from industry in July 2019 and more accurately reflects the number of inspectors and inspector-hours needed to perform an inspection.
The fee schedule for sanitation inspections of passenger cruise ships by VSP was first published in the
The following formula will be used to determine the fees:
Total cost of VSP = Total cost of operating the program, such as administration, travel, staffing, sanitation inspections, and outbreak response.
Weighted number of annual inspections = Total number of ships and inspections per year accounting for vessel size, number of inspectors needed for vessel size, travel logistics to conduct inspections, and vessel location and arrivals in U.S. jurisdiction per year.
The fee schedule (Appendix A) applies to inspections conducted from October 13, 2024, through September 30, 2025.
The fees will apply to all passenger cruise vessels for which inspections are conducted as part of HHS/CDC's VSP.
Centers for Medicare & Medicaid Services, Health and Human Services (HHS).
Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (PRA), federal agencies are required to publish notice in the
Comments on the collection(s) of information must be received by the OMB desk officer by October 23, 2024.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, please access the CMS PRA website by copying and pasting the following web address into your web browser:
William Parham at (410) 786-4669.
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires federal agencies to publish a 30-day notice in the
1.
The application process for the RDS is a completely electronic process (100%). The basis for the decision for adopting this means of collection was to maximize efficiency. The only instance when hard copy/paper applications can be submitted is when the RDS Center is experiencing technical difficulties. The Plan Sponsor completes and submits the RDS application (including the Plan Sponsor's Authorized Representative's electronic signature) on-line, via the secure RDS Secure website, which is accessed at
2.
CMS has contracted with an outside vendor to assist in the administration of the RDS program; this effort is called the RDS Center. Plan Sponsors will apply on-line for the retiree drug subsidy by logging on to the RDS Secure website. 42 CFR 423.844 describes the requirement for qualified retiree prescription drug plans who want to receive the retiree drug subsidy. Once the Plan Sponsor submits the RDS application via the RDS Secure website (and a valid initial retiree list) CMS, using its contractor, will analyze the application to determine whether the Plan Sponsor qualifies for the RDS. To qualify for the subsidy, the Plan Sponsor must show that its coverage is as generous as, or more generous than, the defined standard coverage under the Medicare Part D prescription drug benefit. The information within the application includes sponsor account registration information, plan information, benefit options under the plan, actuary information and actuarial attestation. The RDS center has various checks within each section of the application. Applications can be denied if issues cannot be resolved.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is withdrawing approval of four new drug applications (NDAs) from multiple holders of those NDAs. The basis for the withdrawal is that these NDA holders have repeatedly failed to file required annual reports for the identified NDAs.
Approval is withdrawn as of September 23, 2024.
Kimberly Lehrfeld, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6226, Silver Spring, MD 20993-0002, 301-796-3137,
The holder of an approved application to market a new drug for human use is required to submit annual reports to FDA concerning its approved application in accordance with § 314.81 (21 CFR 314.81).
In the
FDA finds that the holders of the NDAs listed in table 1 have repeatedly failed to submit reports required by § 314.81. In addition, under § 314.200, FDA finds that the holders of the NDAs have waived any contentions concerning the legal status of the drug products. Therefore, under these findings, approval of the NDAs listed in table 1 and all amendments and supplements thereto are hereby withdrawn as of September 23, 2024.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is announcing an opportunity for public
Either electronic or written comments on the collection of information must be submitted by November 22, 2024.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
JonnaLynn Capezzuto, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-3794,
Under the PRA (44 U.S.C. 3501-3521), Federal Agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires Federal Agencies to provide a 60-day notice in the
With respect to the following collection of information, FDA invites comments on these topics: (1) whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques, when appropriate, and other forms of information technology.
This information collection helps support provisions found in sections 201, 502, 505, 701, and 760 of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 321, 352, 355, 371, and 379aa) governing adverse experience reporting (AER) and associated recordkeeping for FDA-regulated drug products. FDA has
Respondents to the information collection are manufacturers, packers, distributors, and applicants of FDA-regulated drug and biologic products marketed with or without an FDA-approved application, including over-the-counter (OTC) drug products marketed without an approved application; OTC drug products marketed under the OTC Drug Monograph Review process (whether subject to a final monograph or not); and drug products marketed outside the monograph system. All reports and followup reports must be submitted to FDA in electronic format, although waivers of the electronic requirements are available for good cause.
Adverse experience reporting for products associated with drug marketing applications are governed by regulations in §§ 314.80, 314.81, and 314.98. The regulations identify required reporting content and format elements, as well as establish followup reporting requirements and mandatory reporting schedules. The regulations also establish associated recordkeeping and require that written procedures be developed for the surveillance, receipt, evaluation, and reporting of postmarketing adverse experiences to FDA. The regulations require reporting in an electronic format that FDA can process, although temporary waivers may be granted on a limited basis for good cause. A final guidance for industry entitled “Providing Submissions in Electronic Format—Postmarketing Safety Reports” (April 2022) is available for general information pertaining to electronic submission of postmarketing safety reports for certain human drugs, biological products, and combination products. The guidance is available at
We have established and maintain the FDA Adverse Event Reporting System (FAERS) at
The primary purpose of FDA's adverse drug experience reporting system is to enable identification of signals for potentially serious safety problems with marketed drugs. Although premarket testing discloses a general safety profile of a new drug's comparatively common adverse effects, the larger and more diverse patient populations exposed to the marketed product provide the opportunity to collect information on rare, latent, and long-term effects. Signals are obtained from a variety of sources, including reports from patients, treating physicians, foreign regulatory agencies, clinical investigators, and literature. Information derived from the adverse drug experience reporting system contributes directly to increased public health protection because the information enables FDA to make important changes to the product's labeling (such as adding a new warning), to make decisions about risk evaluation and mitigation strategies; the need for postmarketing studies or clinical trials; and, when necessary, to initiate removal of a product from the market.
FDA estimates the burden of this collection of information as follows:
All applicants who have received marketing approval for drug products (including combination products that are administered as drug products) are required to report serious, unexpected adverse drug experiences (15-day “Alert reports”) (§ 314.80(c)(1)(i)), as well as followup reports (§ 314.80(c)(1)(ii)) to FDA. These include all foreign or domestic AERs as well as AERs based on information from applicable scientific literature and certain reports from post marketing studies. Section 314.80(c)(1)(iii) pertains to AERs submitted by nonapplicants. For operational efficiency, we have adjusted this information collection and burden table to include all 15-day alert reports submitted by applicants, manufacturers, packers, and distributors. Voluntary reports from healthcare providers are included under OMB control number 0910-0291.
Under § 314.80(c)(2), applicants (including combination products that are administered as drug products) must also provide periodic reports of adverse drug experiences. For the reporting interval, a periodic report includes reports of serious, expected adverse drug experiences, all nonserious adverse drug experiences, and an index of these reports; a narrative summary and analysis of adverse drug experiences; an analysis of the 15-day Alert reports submitted during the reporting interval; and a history of actions taken because of adverse drug experiences. Under § 314.80(j), applicants must keep records of all adverse drug experience reports known to the applicant for 10 years.
For marketed prescription drug products without approved new drug applications (NDAs) or abbreviated new drug applications (ANDAs), manufacturers, packers, and distributors of these products are required to report to FDA serious, unexpected adverse drug experiences as well as followup reports (§ 310.305(c)). Section 310.305(c)(5) pertains to the submission of followup reports to reports forwarded to the manufacturers, packers, and distributors by FDA. Under § 310.305(g), each manufacturer, packer, and distributor shall maintain records of all adverse drug experiences required to be reported for 10 years. All 15-day Alert reports and followup reports must be submitted to FDA in electronic format.
Section 760 of the FD&C Act also provides for mandatory safety reporting for over-the-counter human drug products not subject to applications approved under section 505 of the FD&C Act (NDAs or ANDAs). These requirements apply to all OTC drug products marketed without an approved application, including those marketed under the OTC Drug Monograph Review process (whether or not subject to a final monograph), those marketed outside the monograph system, and including those that have been discontinued from marketing but for which a report of an adverse event was received. Under § 329.100, respondents must submit reports according to section 760 of the FD&C Act in an electronic format.
To assist respondents with implementation of section 760 of the FD&C Act, FDA developed the guidance for industry entitled “Postmarketing Adverse Event Reporting for Nonprescription Human Drug Products Marketed Without an Approved Application,” (July, 2009) available at
In addition, this information collection includes an International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH) guidance for industry entitled “Providing Postmarketing Periodic Safety Reports in the ICH
FDA regulations in §§ 314.80(c)(2) and 600.80(c)(2) require applicants to submit postmarketing periodic safety reports for each approved application. The reports must be submitted quarterly for the first 3 years following the U.S. approval date and annually thereafter and must contain the information described in §§ 314.80(c)(2)(ii) and 600.80(c)(2)(ii) (the information collection associated with 21 CFR part 600—Biological Products, is approved under OMB control number 0910-0308). The Agency guidance assists respondents with satisfying the regulatory requirements in an alternative format, noting that the process differs depending on whether an applicable periodic safety update report waiver is in place.
Similarly, this information collection accounts for burden that may be applicable to the guidance document, “Postmarketing Adverse Event Reporting for Medical Products and Dietary Supplements During a Pandemic (May 2020),” available at
For operational efficiency, on March 20, 2023, OMB approved the addition of burden attributable to provisions related to postmarketing safety reporting for combination products as outlined in part 4, subpart B, and previously included in OMB control number 0910-0834. When information regarding an event that involves a death or serious injury, or an adverse event, associated with the use of a combination product that includes a drug product, is received by the product sponsor, the information must be provided to the other constituent part applicant(s) no later than 5 calendar days after receipt under § 4.103 (21 CFR 4.103). Relatedly, 21 CFR 4.104 explains how and where to submit reports for combination products, and 21 CFR 4.105 provides for associated recordkeeping. For combination products that are administered as drug products with a constituent part, adverse event reports are submitted to the drug application under 21 CFR part 314, and constituent applicants are notified of the AER under § 4.103. These provisions are also described in the guidance document “Postmarketing Safety Reporting for Combination Products” (July 2019), available at
Our estimates of the number of respondents and the total annual responses are based on reports submitted to the Agency. This information collection incorporates revisions to include the two guidances for industry regarding submission of adverse event reports (“Postmarketing Adverse Event Reporting for Medical Products and Dietary Supplements During a Pandemic” and “Providing Submissions in Electronic Format—Postmarketing Safety Reports”) and adjustments to include 15-day alert reports from applicants, manufacturers, distributors, and packers that were not recorded previously in this information collection. We also believe adjustments in the information collection reflect anticipated fluctuations in burden after pandemic conditions, adjustments by reporters' and changes in electronic reporting methodologies use of updated technology including updates and redefinitions of reporting software, and changes of company business practices over time. All reports and followup reports must be submitted to FDA in electronic format. Waivers of the electronic requirements are available. As a result of these revisions and adjustments, including the additional reports, the inclusion of guidance document recommendations and the consolidation of the burden from OMB control number 0910-0834 (previously added to this information collection March 2023), the total burden hours of the information collection have increased by 61,615,010.1 hours and 2,546,310 responses as compared to the previous renewal. We invite comment on our assumptions.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is publishing a list of information collections that have been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995.
Amber Sanford, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-8867,
The following is a list of FDA information collections recently approved by OMB under section 3507 of the Paperwork Reduction Act of 1995 (44 U.S.C. 3507). The OMB control number and expiration date of OMB approval for each information collection are shown in table 1. Copies of the supporting statements for the information collections are available on the internet at
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or the Agency) has determined the regulatory review period for SYMDEKO and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of an application to the Director of the U.S. Patent and Trademark Office (USPTO), Department of Commerce, for the extension of a patent which claims that human drug product.
Anyone with knowledge that any of the dates as published (see
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Beverly Friedman, Office of Regulatory Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51,
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100-670) generally provide that a patent may be extended for a period of up to 5 years so long as the patented item (human drug or biological product, animal drug product, medical device, food additive, or color additive) was subject to regulatory review by FDA before the item was marketed. Under these acts, a product's regulatory review period forms the basis for determining the amount of extension an applicant may receive.
A regulatory review period consists of two periods of time: a testing phase and an approval phase. For human drug products, the testing phase begins when the exemption to permit the clinical investigations of the drug becomes effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the human drug product and continues until FDA grants permission to market the drug product. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of USPTO may award (for example, half the testing phase must be subtracted as well as any time that may have occurred before the patent was issued), FDA's determination of the length of a regulatory review period for a human drug product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(1)(B).
FDA has approved for marketing the human drug product, SYMDEKO (tezacaftor/co-packaged with ivacaftor) indicated for the treatment of patients with cystic fibrosis aged 12 years and older who are homozygous for the F508del mutation or who have at least one mutation in the cystic fibrosis transmembrane conductance regulator gene that is responsive to tezacaftor/ivacaftor based on in vitro data and/or clinical evidence. Subsequent to this approval, the USPTO received patent term restoration applications for SYMDEKO (U.S. Patent Nos. 7,645,789; 7,776,905; 8,415,387; 8,598,181; 8,623,905; and 9,035,072) from Vertex Pharmaceuticals Inc., and the USPTO requested FDA's assistance in determining the patents' eligibility for patent term restoration. In a letter dated June 12, 2019, FDA advised the USPTO that this human drug product had undergone a regulatory review period and that the approval of SYMDEKO represented the first permitted commercial marketing or use of the product. Thereafter, the USPTO requested that FDA determine the product's regulatory review period.
FDA has determined that the applicable regulatory review period for SYMDEKO is 2,832 days. Of this time, 2,602 days occurred during the testing phase of the regulatory review period, while 230 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the USPTO applies several statutory limitations in its calculations of the actual period for patent extension. In its applications for patent extension, this applicant seeks 616 days, 864 days, 882 days, 1,001 days, 1,484 days, or 1,532 days of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit either electronic or written comments and, under 21 CFR 60.24, ask for a redetermination (see
Submit petitions electronically to
Food and Drug Administration, HHS.
Notice of public meeting; request for comments.
The Food and Drug Administration (FDA, the Agency, or we) is announcing the following public meeting entitled “Advancing Smoking Cessation: FDA and NIH Priorities.” Jointly convened by FDA and the National Institutes of Health (NIH), this public meeting will address the need for novel smoking cessation products to help individuals of all ages, including underserved and vulnerable populations, stop smoking. The overall goal of the meeting is to stimulate novel product development to reduce rates of smoking and related chronic illnesses. The meeting format will include presentations and panel discussions.
The public meeting will be held in person with an option for virtual attendance on October 21, 2024, from 9 a.m. to 4:30 p.m. Eastern Time. Submit requests to make oral presentations at the public meeting by 5 p.m. Eastern Time, October 1, 2024. Either electronic or written comments on this public meeting must be submitted by November 21, 2024. See the
The public meeting will be held in the White Oak Great Room at the Food and Drug Administration, White Oak Campus, 10903 New Hampshire Ave., Silver Spring, MD 20993. Entrance for the public meeting participants (non-FDA employees) is through Building 1 where routine security check procedures will be performed. For parking and security information, please refer to
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Laura Chilaka, Center for Tobacco Products, Food and Drug Administration, 10903 New Hampshire Ave., Silver Spring, MD 20993, 877-287-1373,
This public meeting is intended to bring together key people in supporting research on and development of new smoking cessation products in order to stimulate novel product development to reduce the burden of smoking and related chronic illnesses. Participants will hear updates on NIH research and FDA operations.
1. How can researchers increase enrollment for traditionally underrepresented populations in clinical trials (
2. Would there be interest in an externally led Patient Focused Drug Development (PFDD) meeting to better understand the challenges and barriers to smoking cessation from individuals trying to quit and what additional endpoints can be evaluated in smoking cessation clinical trials?
3. What are some novel targets that could facilitate cigarette cessation product development?
4. What challenges are researchers and/or drug developers facing in their efforts to identify novel targets for smoking cessation therapies?
Registration is free and based on space availability, with priority given to early registrants. Persons interested in attending this public meeting in person must register by October 15, 2024, 11:59 p.m. Eastern Time. Persons interested in attending this public meeting virtually must register by October 21, 2024, 9 a.m. Eastern Time. Early registration is recommended because seating is limited; therefore, FDA may limit the number of participants from each organization. Registrants will receive confirmation when they have been accepted.
For special accommodations due to a disability, please visit the registration website:
Oral presentations from the public will be scheduled between approximately 3:15 p.m. and 4:15 p.m. Eastern Time on October 21, 2024. Those individuals interested in making formal oral presentations should notify the contact person (see
Time allotted for each presentation may be limited. If the number of registrants requesting to speak is greater than can be reasonably accommodated during the scheduled open public hearing session, FDA may conduct a lottery to determine the speakers for the scheduled open public hearing session. Similarly, room for interested persons to participate in person may be limited. If the number of registrants requesting to speak in person during the open public hearing is greater than can be reasonably accommodated in the venue for the in-person portion of the meeting, FDA may conduct a lottery to determine the speakers who will be invited to participate in person. Individuals and organizations with common interests are urged to consolidate or coordinate their presentations, and request time for a joint presentation, or submit requests for designated representatives to participate in the focused sessions. Following the close of registration, we will determine the amount of time allotted to each presenter and the approximate time each oral presentation is to begin and will select and notify participants as soon as possible to provide speakers with adequate time to prepare. No commercial or promotional material will be permitted to be presented or distributed at the public meeting.
(Notice of this meeting is given pursuant to 21 CFR 10.65.)
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is announcing year three of the Chemistry, Manufacturing, and Controls (CMC) Development and Readiness Pilot (CDRP). This program facilitates the expedited CMC development of products under an investigational new drug application (IND) based on the anticipated clinical benefit of earlier patient access to the products. FDA has implemented this pilot program to assist with CMC readiness for products regulated by both the Center for Biologics Evaluation and Research (CBER) and the Center for Drug Evaluation and Research (CDER) that have accelerated clinical development timelines. To accelerate CMC development and facilitate CMC readiness, the pilot features increased communication between FDA and sponsors and explores the use of science- and risk-based regulatory approaches, as applicable. This notice outlines the eligibility criteria and process for submitting a request to participate in the pilot.
Starting October 1, 2024, FDA will accept requests to participate in year three of the CDRP program. See the “Participation” section of this document for eligibility criteria, instructions on how to submit a request to participate, and selection criteria and process.
Tanya Clayton, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 75, Rm. 4506, Silver Spring, MD 20993-0002, 301-796-0871; or James Myers, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 7301, Silver Spring, MD 20993-0002, 240-402-7911.
Development programs for CBER- and CDER-regulated drugs and biologics intended to diagnose, treat, or prevent a serious disease or condition where there is an unmet medical need may have accelerated clinical development timelines. Yet, marketing applications for products in expedited development programs still need to meet FDA's approval standards, including manufacturing facility compliance with current good manufacturing practice (CGMP). Products with accelerated clinical development activities may face challenges in expediting CMC development activities to align with the accelerated clinical timelines. Successfully expediting CMC readiness may require additional interactions with FDA during product development and, if applicable, warrant the use of science- and risk-based regulatory approaches to streamline CMC development activities so that clinical benefits of earlier patient access to these products can be realized.
As described in the FDA Prescription Drug User Fee Act (PDUFA) VII Commitment Letter for fiscal years (FYs) 2023 Through 2027 (Ref. 1), FDA implemented the CDRP program to facilitate CMC readiness for selected CBER- and CDER-regulated products with accelerated clinical development timelines in FY 2023. To accelerate CMC development and facilitate CMC readiness, the pilot features increased communication between FDA and sponsors and explores the use of science- and risk-based regulatory approaches, such as those described in the FDA guidance for industry entitled “Expedited Programs for Serious Conditions—Drugs and Biologics” (May 2014) (Ref. 2), as applicable.
FDA (CBER and CDER) is continuing to administer the CDRP to facilitate the CMC development of selected products under INDs which have expedited clinical development timeframes, based on the anticipated clinical benefits of earlier patient access to the products. For sponsors participating in the pilot, FDA will provide product-specific CMC advice during product development, including two additional CMC-focused Type B meetings, as well as additional CMC-focused discussions. To support these interactions, once a sponsor is admitted to the pilot, FDA will expand the IND quality assessment team so as to ensure it has representation from the full complement of relevant disciplines. The increased communication between FDA review staff and sponsors is intended to ensure a mutual understanding of approaches to completing CMC activities, including what information should be provided at the appropriate timepoint (
FDA will accept requests to participate in the CDRP program continuously throughout the fiscal year. FDA will select no more than nine proposals per fiscal year, with approximately two-thirds being CBER-regulated products and one-third CDER-regulated products. FDA will renew the CDRP program each fiscal year and announce the opening of the pilot program in the
To promote innovation and understanding in this area, FDA will hold a public workshop and issue a strategy document focused on CMC aspects of expedited development incorporating lessons from the CDRP. At the workshop, sponsors may be asked to present lessons learned from the pilot. FDA may also present summary lessons and case studies. Generally, FDA does not anticipate that the case studies will need to include information, such as the sponsor's name, that can identify a unique product or product-specific manufacturing process information. Case studies will focus on FDA-sponsor interactions and problem solving, and address scientific and technical issues only in general terms. However, as described in the FDA PDUFA VII Commitment Letter for FYs 2023 Through 2027, to be eligible for the pilot, the sponsor must reach agreement with FDA on the information that could be publicly disclosed. FDA will notify a sponsor in advance when it plans to include some aspect of their experience in the program in a public discussion (
To be considered for the pilot program, participants must meet the following eligibility criteria:
• Participant must have an active commercial IND (see the definition of commercial IND at
• IND has been submitted in, or converted to, Electronic Common Technical Document (eCTD) format, unless the IND is of a type granted a waiver from eCTD format as per FDA's guidance for industry entitled “Providing Regulatory Submissions in Electronic Format—Certain Human Pharmaceutical Product Applications and Related Submissions Using the eCTD Specifications” (February 2020) (Ref. 3).
• INDs for combination products (21 CFR 3.2(e)) are eligible; products that require significant cross-Center interactions (
• In general, there should be enough time remaining before submission of the marketing application to allow the pilot to have an impact on CMC readiness.
• CMC-related information is provided to demonstrate a commitment to pursue a CMC development plan that aligns with the expedited clinical development program (see “CMC Development Plan” in section II.B of this document for details).
Due to the differences in product complexity between CBER- and CDER-regulated products, the following eligibility and selection criteria differ between the Centers.
• IND is an existing, CBER-regulated IND intended for submission as an application for licensure of a biological product under section 351(a) of the Public Health Service Act (PHS Act) (42 U.S.C. 262(a)) for cellular therapies, gene therapies, and other products regulated by the Office of Therapeutic Products/CBER or vaccines regulated by the Office of Vaccines Research and Review/CBER.
• IND has a Breakthrough Therapy (BT) or Regenerative Medicine Advance Therapy designation.
• IND is an existing, CDER-regulated IND for a product intended for submission as an application for: (1) approval of a new drug submitted under section 505(b) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(b)), or (2) licensure of a biological
• IND has an expedited clinical timeframe warranted based on anticipated clinical benefits of earlier patient access. This would include INDs with BT or Fast Track designations as well as other INDs that meet this criterion, with eligibility to be determined by FDA.
To participate in the CDRP, sponsors should submit a written request as an amendment to the IND. In addition to providing a point of contact and noting any expedited program designations the IND has received to date, the request should include the following information.
To focus pilot resources where they will be most useful and have an impact on the timeliness with which CMC readiness is achieved, prospective applicants to the pilot program should include in their Request to Participate a brief description of their CMC development plan, with a prospective timeline for CMC development that would align with when the clinical development program is expected to be complete:
• The plan should list the remaining CMC tasks and activities anticipated to be necessary, with estimated timeframes. This part of the plan should cover the following CMC-related areas:
○ Currently available product characterization and preliminary identification of critical quality attributes.
○ Summary of the current drug substance and drug product manufacturing process and control strategy (including assays, noting any that are still under development).
○ A brief description of the proposed commercial scale manufacturing and control strategy, including any necessary microbial control strategy—focusing on important differences from clinical scale.
○ Identification of potential commercial manufacturing facilities, including any contract facilities, or, at least, the type (in house, contract manufacturing organization) of facilities anticipated.
○ Plans for ensuring product availability at approval.
○ Drug substance and drug product stability assessment plan.
○ Strategy for process validation (see FDA's guidance for industry entitled “Process Validation: General Principles and Practices” (Ref. 4)).
• Given the expedited clinical timeframe, mapping out a plan for manufacturing readiness within the same overall timespan may reveal potential challenges in accomplishing CMC readiness. The plan should highlight any anticipated CMC challenges—whether related to the bullets above or otherwise. This will facilitate FDA engagement and collaboration. Participants in the pilot should plan to discuss these challenges with FDA during the pilot. For CDER-regulated products, see MAPP 5015.13, “Quality Assessment for Products in Expedited Programs” (Ref. 5).
• The CMC Development Plan should include proposed timing (
FDA intends to select CBER and CDER INDs based on the criteria outlined below. Requests will be acknowledged and reviewed when received. FDA intends to issue a Proceed to Disclosure Agreement letter, if selected into the pilot, or deny letter within 90 days of receipt.
In selecting INDs for the pilot program, FDA intends to consider factors such as: (1) anticipated clinical benefits of facilitating earlier patient access to the product, (2) novelty of the product, (3) complexity of the product or its manufacturing process, including technology, and (4) anticipated CMC challenges. Overall, FDA intends to seek balance and diversity in product types and therapeutic indications to obtain a variety of relevant experience and learnings from the pilot.
During this CDRP program, sponsors will have the ability to discuss their product development strategies and goals with FDA review staff during the two dedicated Type B meetings, as well as in additional CMC-focused discussions. Besides additional interactions and collaboration with FDA, for those INDs in the pilot, FDA will assemble a team to support the CMC development and readiness of the IND,
In preparation for a meeting, sponsors should submit written questions along with a background information package clearly marked as a “PDUFA VII CDRP meeting” as part of the cover letter to enable FDA review staff to address the questions. The briefing package should be submitted to the corresponding IND. Meetings associated with the pilot should be requested by sponsors. For additional information on meetings and other communications between the sponsors and FDA, see the FDA draft guidance for industry entitled “Formal Meetings Between the FDA and Sponsors or Applicants of PDUFA Products” (September 2023) (Ref. 6), CDER MAPP 6025.6: “Good Review Practice: Management of Breakthrough Therapy-Designated Drugs and Biologics” (Rev. 1) (February 2024) (Ref. 7), CBER “SOPP 8101.1: Regulatory Meetings With Sponsors and Applicants for Drugs and Biological Products” (March 2023) (Ref. 8), and CBER “SOPP 8212: Breakthrough Therapy Products—Designation and Management” (August 2023) (Ref. 9).
Collections of information from fewer than 10 respondents within any 12-month period are not subject to the Paperwork Reduction Act of 1995 (PRA) (5 CFR 1320.3(c)(4)). To the extent this information collection involves 10 or more respondents within any 12-month period, the collections of information are subject to the PRA. These collections of information are subject to review by the Office of Management and Budget (OMB) under the PRA (44 U.S.C. 3501-3521). The collections of information for NDAs, formal meetings with sponsors and applicants for PDUFA products, and the PDUFA VII Commitment Letter have been approved under OMB control number 0910-0001. The collections of information for INDs have been approved under OMB control number 0910-0014. The collections of information for BLAs have been approved under OMB control number 0910-0338. The collections of information pertaining to CGMP requirements have been approved under OMB control number 0910-0139. The collections of information pertaining to expedited programs for serious conditions for drugs and biologics and breakthrough therapy-designation for drugs and biologics have been approved under OMB control number 0910-0765.
The following references are on display at the Dockets Management Staff (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852, 240-402-7500, and are available for viewing by interested persons between 9 a.m. and 4 p.m., Monday through Friday; they are also available electronically at
1. “PDUFA Reauthorization Performance Goals and Procedures Fiscal Years 2023 Through 2027” at
2. FDA guidance for industry “Expedited Programs for Serious Conditions—Drugs and Biologics” (May 2014):
3. FDA guidance for industry “Providing Regulatory Submissions in Electronic Format—Certain Human Pharmaceutical Product Applications and Related Submissions Using the eCTD Specifications” (Rev. 7) (February 2020):
4. FDA guidance for industry “Process Validation: General Principles and Practices” (Rev. 1) (January 2011):
5. CDER MAPP 5015.13: “Quality Assessment for Products in Expedited Programs” (December 2022):
6. FDA draft guidance for industry “Formal Meetings Between the FDA and Sponsors or Applicants of PDUFA Products” (Rev. 1) (September 2023):
7. CDER MAPP 6025.6: “Good Review Practice: Management of Breakthrough Therapy-Designated Drugs and Biologics” (Rev. 1) (February 2024):
8. CBER “SOPP 8101.1: Regulatory Meetings With Sponsors and Applicants for Drugs and Biological Products” (March 2023).
9. CBER “SOPP 8212: Breakthrough Therapy Products—Designation and Management” (August 2023).
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of three draft guidance documents for the Accreditation Scheme for Conformity Assessment Program entitled “The Accreditation Scheme for Conformity Assessment (ASCA) Program; Guidance for Industry, Accreditation Bodies, Testing Laboratories, and FDA Staff;” “Basic Safety and Essential Performance of Medical Electrical Equipment, Medical Electrical Systems, and Laboratory Medical Equipment—Standards Specific Information for the Accreditation Scheme for Conformity Assessment (ASCA) Program: Guidance for Industry, Accreditation Bodies, Testing Laboratories, and FDA Staff;” and “Biocompatibility Testing of Medical Devices—Standards Specific Information for the Accreditation Scheme for Conformity Assessment (ASCA) Program: Guidance for Industry, Accreditation Bodies, Testing Laboratories, and FDA Staff.” In accordance with amendments made by the FDA User Fee Reauthorization Act of 2022 (FUFRA), part of the Medical Device User Fee Amendments of 2022 (MDUFA V), FDA was directed to conclude the Pilot Accreditation Scheme for Conformity Assessment Program by the end of fiscal year 2023 and continue to operate the program (hereafter referred to as the ASCA Program) consistent with the amended FD&C Act. FDA is publishing these draft guidance documents which, when finalized, are intended to provide updates to improve the ASCA Program. These draft guidance documents are not final nor for implementation at this time.
Submit either electronic or written comments on the draft guidance by November 22, 2024 to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance.
You may submit comments on any guidance at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
Electronic copies of these three guidance documents are available for download from the internet. See the
Eric Franca, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 5500, Silver Spring, MD 20993-0002, 301-796-4505,
FDA has concluded the ASCA pilot phase and is establishing an ongoing ASCA Program, in accordance with amendments made to section 514 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360d) by section 2005 of the FDA User Fee Reauthorization Act of 2022, part of the Medical Device User Fee Amendments of 2022. The three final ASCA Pilot guidance documents issued on September 25, 2020, are also being updated to make improvements to the ASCA Program based on lessons learned during ASCA's pilot phase and to convey the commitments stipulated in MDUFA V. These draft guidance updates incorporate feedback received through public meetings and webinars, the docket, stakeholder meetings, communications with participating accreditation bodies and testing laboratories, and lessons learned internally from review staff and ASCA staff during the pilot phase. The updates will also allow FDA to appropriately expand ASCA per MDUFA V commitments and expectations.
These draft guidances are being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The draft guidances, when finalized, will represent the current thinking of FDA on the ASCA Program. It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.
Persons interested in obtaining a copy of the draft guidance may do so by downloading an electronic copy from the internet. A search capability for all Center for Devices and Radiological Health guidance documents is available at
While this guidance contains no new collection of information, it does refer to previously approved FDA collections of
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA, Agency, or we) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Submit written comments (including recommendations) on the collection of information by October 23, 2024.
To ensure that comments on the information collection are received, OMB recommends that written comments be submitted to
JonnaLynn Capezzuto, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-3794,
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
This information collection helps support implementation of sections 503A and 503B of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 353a and 21 U.S.C. 353b), which govern compounding by pharmacies, outsourcing facilities, and other entities. Compounding is generally a practice in which a licensed pharmacist, a licensed physician, or, in the case of an outsourcing facility, a person under the supervision of a licensed pharmacist, combines, mixes, or alters ingredients of a drug to create a medication tailored to the needs of an individual patient. Although compounded drugs can serve an important medical need for certain patients, they also present risks to patients. FDA's compounding program aims to protect patients from unsafe, ineffective, and poor-quality compounded drugs, while preserving access to lawfully marketed compounded drugs for patients who have a medical need for them. Respondents to the information collection are pharmacies, outsourcing facilities, and other entities.
To assist respondents in complying with statutory requirements, we have issued the following topic-specific guidance documents:
The guidance documents also describe conditions under which FDA generally does not intend to take enforcement action for violations of the FD&C Act. These guidance documents were issued consistent with FDA's good guidance practice regulations in 21 CFR 10.115, which provide for public comment at any time. The guidance documents communicate FDA's current thinking on the respective topics and include information collection that may result in expenditures of time and effort by respondents. In FDA's notices of availability for the guidance documents, we also solicited public comment under the PRA on the information collection provisions. FDA has developed and maintains a searchable guidance database available at
In the
We estimate the burden of this information collection as follows:
Outsourcing facilities submit their initial and biannual product reports identifying drug products repackaged during the previous 6-month period to FDA via the Agency's electronic Drug Registration and Listing System as explained in the Radiopharmaceutical Compounding and Repackaging Guidance by Outsourcing Facilities and the Repackaging Guidance. We expect to receive no waiver requests from the electronic submission process for initial product reports and semiannual reports.
For purposes of our analysis, we characterize the burden associated with the time and effort expended on the information collection recommendations discussed in the respective guidance documents as either reporting, recordkeeping, or third-party disclosure activities. We reconfigured the original table by splitting it into three tables to better differentiate between the estimated annual reporting, recordkeeping, and third-party disclosure burden. At the same time, our findings show that compliance with recordkeeping requirements applicable to compounded and repackaged drug products is standard practice in the compounding and selling of these drug products under States' pharmacy laws and other State laws governing recordkeeping by healthcare professionals and healthcare facilities. Therefore, we excluded from our estimate recordkeeping practices discussed in the respective guidance documents we consider usual and customary.
For the Repackaging Guidance, to correct a clerical error, we have adjusted the number of disclosures per respondent from 21 to 36 because each respondent is estimated to average 6 different products and average 6 different strengths, which requires 36 (6 × 6) unique labels per respondent. The initial narrative reflected that each product would come in six different strengths and thus require six unique labels, but due to a clerical error, this information was not correctly included in the table. We also adjusted the number of respondents to six to match the number of respondents designing, testing, and producing labels. In addition, we adjusted the total number of disclosures per respondent to two given the biannual reporting requirement.
For the Radiopharmaceutical Compounding and Repackaging by Outsourcing Facilities Guidance, a row for biannual product reporting was added to capture product reporting that was inadvertently omitted.
Our estimated burden for the information collection reflects constant respondent numbers. The original numbers were based on the information the program received from product reporting data. We do not have a mechanism in place to determine whether or not these numbers have fluctuated upward or downward; however, based on analogous observations of industry through program experience (some product reports), we believe these numbers are constant. Repackagers who are also registered as outsourcing facilities (OF) are not entity types that are individually regulated as repackagers. They are subsumed in the OF entity type and not easily distinguishable. They may or may not report their repackaging operations.
We are updating the information collection to include burden attendant to reporting and disclosure recommendations found in the Agency guidance documents that was inadvertently omitted in the original information collection due to clerical errors. The burden estimate is adjusted
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is announcing an opportunity for public comment on the proposed collection of certain information by the Agency. Under the Paperwork Reduction Act of 1995 (PRA), Federal Agencies are required to publish notice in the
Either electronic or written comments on the collection of information must be submitted by November 22, 2024.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Domini Bean, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-5733,
Under the PRA (44 U.S.C. 3501-3521), Federal Agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires Federal Agencies to provide a 60-day notice in the
With respect to the following collection of information, FDA invites comments on these topics: (1) whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical
This information collection supports FDA's Biosimilars User Fee Program and implementation of the Biologics Price Competition and Innovation Act of 2009 (BPCI Act). The BPCI Act creates an abbreviated approval pathway for biological products shown to be biosimilar to or interchangeable with an FDA-licensed reference biological product. Section 351(k) of the Public Health Service Act (PHS Act) (42 U.S.C. 262(k)), added by the BPCI Act, allows a company to apply for licensure of a biosimilar or interchangeable biological product (351(k) application). The BPCI Act also amended section 735 of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 379g) to include 351(k) applications as a type of application under “human drug application” for the purposes of the prescription drug user fee provisions. The FD&C Act as amended by the Biosimilar User Fee Amendments of 2022 (BsUFA III), reauthorizes FDA to assess and collect fees for biosimilar biological products from October 2022 through September 2027 to facilitate the development of safe and effective biosimilar products for the American public.
FDA maintains information on our website at
We have revised the information collection to reflect the currently agreed-upon performance goals established and captured in the latest reauthorization document entitled, “Biosimilar Biological Product Reauthorization Performance Goals and Procedures Fiscal Years 2023 Through 2027” (BsUFA Commitment Letter). The BsUFA Commitment Letter is available for download from our website at
The information collection also includes Form FDA 3792, “Biosimilars User Fee Cover Sheet,” to be submitted by each new biological product development (BPD) entrant (identified via a new meeting request or investigational new drug (IND) submission) or new biologics license application (BLA) applicant. Form FDA 3792 requests the minimum information necessary to identify the request, to determine the amount of the fee to be assessed, and to account for and track user fees. Form FDA 3792 is completed electronically at
Relatedly, Form FDA 3971 (Small Business Waiver and Refund Request), currently approved in OMB control number 0910-0297, may also be utilized. As instructed on our BsUFA web page, respondents should submit Form FDA 3971 by email to
Patent infringement notifications are also included in the scope of collection activity. Section 351(l) of the PHS Act (42 U.S.C. 242(l)) provides for the exchange of patent information and resolution of patent disputes between a 351(k) biosimilar applicant and the holder of the 351(a) BLA reference product. If a biosimilar applicant is served with a complaint in an action for a patent infringement described in section 351(l)(6) of the PHS Act, the biosimilar applicant is required to provide the Secretary of HHS with notice and a copy of the complaint within 30 days of service. FDA is required to publish notice of a complaint received under section 351(l)(6)(C) of the PHS Act in the
Relevant information regarding applicable statutory requirements is discussed in topical guidance documents, issued consistent with our BsUFA Commitment Letter and Agency Good Guidance Practice regulations in 21 CFR 10.115, which provide for public comment at any time. The following draft and final guidance documents include instructional and procedural information on communicating with FDA regarding the BsUFA program:
• “Assessing User Fees Under the Biosimilar User Fee Amendments of 2022” (July 2023), available at
• “Formal Meetings Between the FDA and Sponsors or Applicants of BsUFA Products” (August 2023), available at:
• As listed on our CDER 2023 and 2024 Annual Guidance agenda, we are planning to issue a draft guidance for industry entitled “Pediatric Study Plans for Biosimilar Products,” to help implement provisions of the Pediatric Research Equity Act, codified in section 505B of the FD&C Act (21 U.S.C. 355c). For more information regarding FDA guidance documents, including ways to participate, please visit
FDA estimate the burden of this collection of information as follows:
Our estimated burden for the information collection reflects an overall increase of 13,069 hours and 105 responses annually. Although part of the increase may be attributed to the inclusion of burden associated with the submission of pediatric study plans, we regard the majority of adjustments as nominal fluctuations consistent with the number of applications and submissions we are receiving.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Notice is hereby given of a change in the meeting of the Eunice Kennedy Shriver National Institute of Child Health and Human Development Initial Review Group, Population Sciences Study Section, October 25, 2024, 09:00 a.m. to 05:00 p.m., Hyatt Regency Bethesda, 7400 Wisconsin Avenue, Bethesda, MD 20814, which was published in the
This notice is being amended to change the start time of the meeting from 9:00 a.m. to 10:00 a.m. E.T. The meeting is closed to the public.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
National Institutes of Health, HHS.
Notice.
In compliance with the Paperwork Reduction Act of 1995, the National Institutes of Health (NIH) has submitted to the Office of Management and Budget (OMB) a request for review and approval of the information collection listed below.
Comments regarding this information collection are best assured of having their full effect if received within 30-days of the date of this publication.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
To request more information on the
This proposed information collection was previously published in the
The National Institute of Mental Health (NIMH), National Institutes of Health (NIH), may not conduct or sponsor, and the respondent is not required to respond to, an information collection that has been extended, revised, or implemented on or after October 1, 1995, unless it displays a currently valid OMB control number.
In compliance with Section 3507(a)(1)(D) of the Paperwork Reduction Act of 1995, the NIH has submitted to the Office of Management and Budget (OMB) a request for review and approval of the information collection listed below.
OMB approval is requested for 3 years. There are no costs to respondents other than their time. The total estimated annualized burden hours are 175.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Transportation Security Administration, DHS.
30-Day notice.
This notice announces that the Transportation Security Administration (TSA) has forwarded the new Information Collection Request (ICR) abstracted below to the Office of Management and Budget (OMB) for review and approval under the Paperwork Reduction Act (PRA). The ICR describes the nature of the information collection and its expected burden. The collection involves the requirement that States who seek a temporary waiver of the prohibition on Federal acceptance, for official purposes, of mobile driver's licenses (mDLs) that do not comply with the REAL ID Act and regulations, must submit an application for such waiver to TSA.
Send your comments by October 23, 2024. A comment to OMB is most effective if OMB receives it within 30 days of publication.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Christina A. Walsh, TSA PRA Officer, Information Technology, TSA-11, Transportation Security Administration, 6595 Springfield Center Drive, Springfield, VA 20598-6011; telephone (571) 227-2062; email
TSA published a Notice of Proposed Rulemaking (NPRM),
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
(1) Evaluate whether the proposed information requirement is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, including using appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
The REAL ID Act was enacted, and DHS regulations issued, before the development of mDLs. As a result, many of the current regulation's security requirements for physical cards, such as physical security features to deter fraud and tampering, do not apply to mDLs. In the absence of regulatory requirements to address mDLs, States are unable to issue REAL ID-compliant mDLs. TSA has initiated a two-phased rulemaking to address this gap. The first phase enables States to apply to TSA for a temporary waiver of certain requirements in the regulations. In the second phase, TSA would repeal the waiver provisions established in the first phase and establish comprehensive requirements enabling States to issue mDLs that comply with REAL ID requirements.
In August 2023, TSA published a notice of proposed rulemaking (NPRM)
As the NPRM called for a collection of information under the PRA, TSA invited interested persons to submit written comments, including relevant data about the cost and hour burden of
Through the NPRM, TSA proposed requiring States that seek a waiver to submit an application and supporting materials to TSA using the procedures in 6 CFR 37.9(a) and 37.10(a)-(b). This collection of the information will enable TSA to issue a waiver to States, and TSA will use all of the submitted documentation to evaluate a State's request for a waiver, if and when the NPRM is made final. States would be required to submit information to TSA as part of their applications for a certificate of waiver for mDLs, as well as to comply with reporting requirements, and in response to TSA notices of suspension and termination. The NPRM also proposed continuing obligations on a State that has been issued a waiver that may require it to submit additional materials to TSA.
Specifically, the NPRM, if finalized, would require the following information collections from States:
Office of the Assistant Secretary for Housing—Federal Housing Commissioner, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for 60 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Written comments and recommendations for the proposed information collection can be sent within 60 days of publication of this notice to
Colette Pollard, Reports Management Officer, REE, Department of Housing and Urban Development, 451 7th Street SW, Washington, DC 20410; email Colette.
This notice informs the public that HUD is seeking approval from OMB for the information collection described in Section A.
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology,
HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. chapter 35.
Fish and Wildlife Service, Interior.
Notice of intent; request for comments.
We, the Fish and Wildlife Service, intend to prepare an environmental impact statement (EIS) for a proposed project to eradicate nonnative rats from four uninhabited islands (Amchitka, Attu, Great Sitkin, and Kiska Islands) located in the Alaska Maritime National Wildlife Refuge. The U.S. Department of Agriculture's Animal and Plant Health Inspection Service is a cooperating agency on the EIS. We invite comments for consideration in establishing the scope and content of the EIS from the public and local, State, Tribal, and Federal agencies.
You may submit scoping comments by any one of the following methods:
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For more information, see “Public Comment Procedures” under
Steve Delehanty, Refuge Manager, via telephone at 907-226-4627, via email at
We, the Fish and Wildlife Service (Service), intend to prepare an environmental impact statement (EIS) pursuant to the National Environmental Policy Act (NEPA; 42 U.S.C 4321
The purpose of the proposed action is to eradicate nonnative rats from Amchitka, Attu, Great Sitkin, and Kiska Islands in the Aleutian archipelago, in order to eliminate their impacts on native species and to restore natural island ecosystems. Nonnative rats occur on these four uninhabited islands, where they have impacted native wildlife populations and altered natural ecosystem function.
The Refuge encompasses over 1.9 million hectares and several thousand coastal islands in Alaska. The long-term management strategies for the Refuge are guided by its record of decision for its Final Comprehensive Conservation Plan/Environmental Impact Statement and Wilderness Review (plan) (FWS 1988). The wildlife management goal of the selected management alternative in the plan is to protect existing fish and wildlife populations and habitats, restore endangered and other species to natural levels, and increase opportunities for wildlife viewing and other nonconsumptive uses. One of the strategies identified to meet this goal is the eradication of introduced predators and rodents. Many Refuge islands have had accidental and intentional introductions of nonendemic mammals (
Action is needed because rats have invaded at least 12 large islands in the Aleutian Island archipelago, including Amchitka, Attu, Great Sitkin, and Kiska Islands, and the diversity and numbers of breeding birds are conspicuously low on islands with established populations of introduced rats, which is consistent with worldwide observations of the devastating direct impacts of introduced rats on seabirds. Most of the Aleutian Islands lying within the Refuge provide important breeding habitat for seabirds, including many bird species for which the Aleutians provide a substantial portion of their worldwide range. Rat-caused modifications to other components of the island ecosystems (
The restoration of Aleutian ecosystems through eradications of introduced predators has long been identified as a management priority for the Refuge. Introduced foxes have been removed from over 40 islands in the Aleutians, while Norway rats have been
Post-eradication monitoring found significant recoveries of terrestrial birds and shorebirds, and the initial recolonization or recovery of marine birds 5 years after eradication. Intertidal ecosystem recovery was also documented 11 years post-eradication.
The Service intends to eradicate nonnative rats from four uninhabited islands in the Refuge. The islands are remote, and eradication efforts would be undertaken one single island at a time, with years between efforts on each island. The Service is currently considering four preliminary alternatives and a no-action alternative. The Service will identify a preferred alternative in the final EIS. The following alternatives are preliminary and may be revised based on public input and internal considerations.
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The overall impact of the proposed action of eradicating nonnative rats is anticipated to have a beneficial effect on the islands' ecosystems. However, the EIS analysis will focus on the potential significant impacts of each alternative. The Service anticipates impacts to occur to, but not be limited to, the following resources from any or all of the proposed alternatives:
The Service will review and consider comments received during scoping and incorporate substantive comments while writing the draft EIS. The Service anticipates completion of the draft EIS in spring 2026, at which time we will publish a
If you submit a comment at
For assistance at a scoping meeting, please contact the point of contact in
Bureau of Land Management, Interior.
Notice of official filing.
The plats of survey of the following described land were officially filed in the Bureau of Land Management (BLM), Arizona State Office, Phoenix, Arizona on the dates indicated. The surveys announced in this notice are necessary for the management of lands administered by the agency indicated.
These plats will be available for inspection in the Arizona State Office, Bureau of Land Management, One North Central Avenue, Suite 800, Phoenix, Arizona 85004-4427. Protests of any of these surveys should be sent to the Arizona State Director at the above address.
Geoffrey A. Graham, Chief Cadastral Surveyor of Arizona; (602) 417-9558;
The plat, in one sheet, representing the dependent resurvey of a portion of the subdivisional lines, the subdivision of sections 4 and 9, and a metes-and-bounds survey of Tract 37, Township 14 North, Range 6 East, accepted May 21, 2024, and officially filed May 23, 2024, for Group 1230, Arizona.
This plat was prepared at the request of the United States Forest Service.
The plat, in one sheet, representing the dependent resurvey of a portion of the subdivisional lines, the subdivision of section 22, and the metes-and-bounds survey of a portion of the Sunset Crater Volcano National Monument boundary, Township 23 North, Range 8 East, accepted June 25, 2024, and officially filed June 28, 2024, for Group 1231, Arizona.
This plat was prepared at the request of the National Park Service.
The plat, in two sheets, representing the dependent resurvey of a portion of the Sixth Standard Parallel North (south boundary of Township 25 North, Range 13 East), the survey of a portion of the Sixth Standard Parallel North (south boundary of township 25 North, Range 12
This plat was prepared at the request of the Bureau of Indian Affairs.
The plat, in one sheet, representing the survey of the east and north boundaries, the subdivisional lines and the subdivision of certain sections, Township 37 North, Range 26 East, accepted August 27, 2024, and officially filed August 29, 2024, for Group 1227, Arizona.
This plat was prepared at the request of the Bureau of Indian Affairs.
The plat, in one sheet, representing the dependent resurvey of a portion of the subdivisional lines and the subdivision of section 18, Township 25 North, Range 29 East, accepted June 25, 2024, and officially filed June 28, 2024, for Group 1232, Arizona.
This plat was prepared at the request of the Bureau of Indian Affairs.
A person or party who wishes to protest any of these surveys must file a written notice of protest within 30 calendar days from the date of this publication with the Arizona State Director, Bureau of Land Management, stating that they wish to protest.
A statement of reasons for a protest may be filed with the notice of protest to the State Director, or the statement of reasons must be filed with the State Director within 30 days after the protest is filed. Before including your address, or other personal information in your protest, please be aware that your entire protest, including your personal identifying information, may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Office of Natural Resources Revenue (“ONRR”), Interior.
Notice of information collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995 (“PRA”), ONRR is proposing to renew an information collection. Through this Information Collection Request (“ICR”), ONRR seeks renewed authority to collect information related to the paperwork requirements under the Chief Financial Officers Act of 1990 (“CFO Act”) covering the collection of royalties and other mineral revenues due, which obligations are accounted for as accounts receivables.
Interested persons are invited to submit comments on or before October 23, 2024.
All comment submissions must (1) reference “OMB Control Number 1012-0001” in the subject line; (2) be sent to ONRR before the close of the comment period listed under
To request additional information about this ICR, please contact Thomas Anthony, Financial Services, by email at
Individuals in the United States who are deaf, deafblind, hard of hearing, or have a speech disability may dial 711 (TTY, TDD, or TeleBraille) to access telecommunications relay services. Individuals outside the United States should use the relay services offered within their country to make international calls to the point-of-contact in the United States.
Pursuant to the PRA, 44 U.S.C. 3501,
As part of ONRR's continuing effort to reduce paperwork and respondent burdens, ONRR is inviting the public and other Federal agencies to comment on new, proposed, revised, and continuing collections of information in accordance with the PRA and 5 CFR 1320.8(d)(1). This helps ONRR assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand ONRR's information collection requirements and provide the requested data in the desired format.
ONRR is especially interested in public comments addressing the following:
(1) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of ONRR's estimate of the burden for this collection of information, including the validity of the methodology and assumptions used;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) How might the agency minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
ONRR published a notice, with a 60-day public comment period soliciting comment of this collection of information, in the
Comments that you submit in response to this 30-day notice are a matter of public record. ONRR will include or summarize each comment in its request to OMB to approve this ICR. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask ONRR in your comment to withhold information from public review, ONRR cannot guarantee that it will be able to do so.
The basis for the data that a company submits on forms ONRR-2014 and ONRR-4430 is generally available within the records of the lessee or others involved in developing, transporting, processing, purchasing, or selling such minerals. The information that ONRR collects under this ICR includes data necessary to ensure that ONRR's accounts receivables are accurately based on the value of the mineral production, as reported to ONRR on forms ONRR-2014 and ONRR-4430.
As part of CFO Act audits, the OIG or its agent selects a sample of accounts receivable items based on forms ONRR-2014 and ONRR-4430 and provides the sample items to ONRR. ONRR then identifies the company names and addresses for the sample items selected and creates accounts receivable confirmation letters. In order to meet the CFO Act's requirements, the letters must be on ONRR letterhead and the Deputy Director for ONRR, or his or her designee, must sign the letters. The letters request third-party confirmation responses by a specified date on whether ONRR's accounts receivable records agree with royalty payor records for the following items: (1) customer identification; (2) royalty invoice number; (3) payor assigned document number; (4) date of ONRR receipt; (5) original amount the payor reported; and (6) remaining balance due to ONRR. The OIG or its agent mails the letters to the payors, instructing them to respond directly to confirm the accuracy and validity of selected royalty receivable items and amounts. In turn, it is the responsibility of the payors to verify, research, and analyze the amounts and balances reported on their respective forms ONRR-2014 and ONRR-4430.
An agency may not conduct, or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
The authority for this action is the PRA of 1995 (44 U.S.C. 3501
U.S. International Trade Commission.
Notice.
Notice is hereby given that a complaint was filed with the U.S. International Trade Commission on August 16, 2024, under section 337 of the Tariff Act of 1930, as amended, on behalf of Advanced Bionics AG of Switzerland and Advanced Bionics LLC of Valencia, California. Supplements were filed on August 29, and 30, and September 6, 2024. The complaint, as supplemented, alleges violations of section 337 based upon the importation into the United States, the sale for importation, and the sale within the United States after importation of certain cochlear implant systems and components thereof by reason of the infringement of certain claims of U.S. Patent No. 7,317,945 (“the '945 patent”) and U.S. Patent No. 8,422,706 (“the '706 patent”). The complaint, as supplemented, further alleges that an industry in the United States exists as required by the applicable Federal statute. The complainants request the Commission institute an investigation and, after the investigation, issue a limited exclusion order and cease and desist orders.
The complaint, except for any confidential information contained therein, may be viewed on the Commission's electronic docket (EDIS) at
Pathenia M. Proctor, The Office of Unfair Import Investigations, U.S. International Trade Commission, telephone (202) 205-2560.
(1) Pursuant to subsection (b) of section 337 of the Tariff Act of 1930, as amended, an investigation be instituted to determine whether there is a violation of subsection (a)(1)(B) of section 337 in the importation into the United States, the sale for importation, or the sale within the United States after importation of certain products identified in paragraph (2) by reason of infringement of one or more of claims 1, 3-11, and 13-22 of the '945 patent, and claims 1-20 of the '706 patent, and whether an industry in the United States exists as required by subsection (a)(2) of section 337;
(2) Pursuant to section 210.10(b)(1) of the Commission's Rules of Practice and Procedure, 19 CFR 210.10(b)(1), the plain language description of the accused products or category of accused products, which defines the scope of the investigation, is “cochlear implant systems as a whole, and the individual microphone, sound processor, external headpiece transmitter, implanted receiver and electrode array components of a cochlear implant system”;
(3) Pursuant to Commission Rule 210.50(b)(1), 19 CFR 210.50(b)(1), the presiding administrative law judge shall take evidence or other information and hear arguments from the parties or other interested persons with respect to the public interest in this investigation, as appropriate, and provide the Commission with findings of fact and a recommended determination on this issue, which shall be limited to the statutory public interest factors set forth in 19 U.S.C. 1337(d)(1), (f)(1), (g)(1);
(4) For the purpose of the investigation so instituted, the following are hereby named as parties upon which this notice of investigation shall be served:
(a) The complainants are:
(b) The respondents are the following entities alleged to be in violation of section 337, and are the parties upon which the complaint is to be served:
(c) The Office of Unfair Import Investigations, U.S. International Trade Commission, 500 E Street SW, Suite 401, Washington, DC 20436; and
(5) For the investigation so instituted, the Chief Administrative Law Judge, U.S. International Trade Commission, shall designate the presiding Administrative Law Judge.
Responses to the complaint and the notice of investigation must be submitted by the named respondents in accordance with section 210.13 of the Commission's Rules of Practice and Procedure, 19 CFR 210.13. Pursuant to 19 CFR 201.16(e) and 210.13(a), as amended in 85 FR 15798 (March 19, 2020), such responses will be considered by the Commission if received not later than 20 days after the date of service by the complainants of the complaint and the notice of investigation. Extensions of time for submitting responses to the complaint and the notice of investigation will not be granted unless good cause therefor is shown.
Failure of a respondent to file a timely response to each allegation in the complaint and in this notice may be deemed to constitute a waiver of the right to appear and contest the allegations of the complaint and this notice, and to authorize the administrative law judge and the Commission, without further notice to the respondent, to find the facts to be as alleged in the complaint and this notice and to enter an initial determination and a final determination containing such findings, and may result in the issuance of an exclusion order or a cease and desist order or both directed against the respondent.
By order of the Commission.
United States International Trade Commission.
Notice.
The Commission hereby gives notice of the scheduling of expedited reviews pursuant to the Tariff Act of 1930 (“the Act”) to determine whether revocation of the antidumping duty orders on silicomanganese from India, Kazakhstan, and Venezuela would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.
August 5, 2024.
Caitlyn Costello (202) 205-2058, Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its internet server (
Background—On August 5, 2024, the Commission determined that the domestic interested party group response to its notice of institution (89 FR 35247, May 1, 2024) of the subject five-year reviews was adequate and that the respondent interested party group response was inadequate. The
For further information concerning the conduct of these reviews and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A and B (19 CFR part 201), and part 207, subparts A, D, E, and F (19 CFR part 207).
In accordance with §§ 201.16(c) and 207.3 of the rules, each document filed by a party to the reviews must be served on all other parties to the reviews (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service.
By order of the Commission.
United States International Trade Commission.
Notice.
The Commission hereby gives notice of the scheduling of expedited reviews pursuant to the Tariff Act of 1930 (“the Act”) to determine whether revocation of the antidumping duty and countervailing duty orders on circular welded carbon-quality steel pipe from China would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.
August 5, 2024.
Charles Cummings (202)-708-1666, Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its internet server (
For further information concerning the conduct of these reviews and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A and B (19 CFR part 201), and part 207, subparts A, D, E, and F (19 CFR part 207).
In accordance with §§ 201.16(c) and 207.3 of the rules, each document filed by a party to the reviews must be served on all other parties to the reviews (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service.
By order of the Commission.
United States International Trade Commission.
Notice.
The Commission hereby gives notice of the scheduling of expedited reviews pursuant to the Tariff Act of 1930 (“the Act”) to determine whether revocation of the antidumping duty order and countervailing duty order on laminated woven sacks from Vietnam would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.
August 5, 2024.
Kenneth Gatten III 202-708-1447, Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its internet server (
For further information concerning the conduct of these reviews and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A and B (19 CFR part 201), and part 207, subparts A, D, E, and F (19 CFR part 207).
In accordance with §§ 201.16(c) and 207.3 of the rules, each document filed by a party to the reviews must be served on all other parties to the reviews (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service.
By order of the Commission.
Bureau of Justice Statistics, Department of Justice.
60-Day notice.
The Bureau of Justice Statistics (BJS), Department of Justice (DOJ) will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995.
Comments are encouraged and will be accepted for 60 days until November 22, 2024.
If you have additional comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Devon Adams, Bureau of Justice Statistics, 999 N Capitol St. NE, Washington, DC 20531 (email:
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
Following standard Office of Management and Budget (OMB) requirements, BJS will submit a change request to OMB individually for every group of data collection activities undertaken under this generic clearance. BJS will provide OMB with a copy of the individual instruments or questionnaires (if one is used), as well as other materials describing the project.
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If additional information is required, contact: Darwin Arceo, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE, 4W-218, Washington, DC.
On September 16, 2024, the Department of Justice lodged a proposed consent decree with the United States District Court for the Western District of Texas in the lawsuit entitled
The United States filed a complaint against Cobb Tuning Products, LLC (“Cobb Tuning”) alleging violations of the Clean Air Act related to Cobb Tuning's manufacture, offer for sale, and sale of devices that defeat emission controls in automobiles. The proposed consent decree resolves the claims alleged in the complaint. The proposed consent decree requires Cobb Tuning to pay a penalty of $2,914,000 over three years based on its ability to pay and to perform injunctive relief.
The publication of this notice opens a period for public comment on the proposed consent decree. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and should refer to
Any comments submitted in writing may be filed by the United States in whole or in part on the public court docket without notice to the commenter.
During the public comment period, the proposed consent decree may be examined and downloaded at this Justice Department website:
In accordance with the Federal Advisory Committee Act (Pub., L. 92-463, as amended), the National Science Foundation (NSF) announces the following meeting:
Pursuant to the Commission's regulations, see,
Holtec Decommissioning International, LLC and Holtec Palisades, LLC seek four amendments to Renewed Facility Operating License No. DPR-20 to support the potential reauthorization of power operations at the Palisades Nuclear Plant, located in Covert Township, Michigan. In response to a notice filed in the
The Board is comprised of the following Administrative Judges:
All correspondence, documents, and other materials shall be filed in accordance with the NRC E-Filing rule. See 10 CFR 2.302.
Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (“PRA”) (44 U.S.C. 3501
Rule 17Ad-15 requires every registered transfer agent to establish written standards for the acceptance of guarantees of securities transfers from eligible guarantor institutions. Every registered transfer agent is also required to establish procedures, including written guidelines where appropriate, to make certain that the transfer agent uses those standards to determine whether to accept or reject guarantees from eligible guarantor institutions. In implementing these requirements, the Commission aims to ensure that registered transfer agents treat eligible guarantor institutions equitably.
Additionally, Rule 17Ad-15 requires every registered transfer agent to make and maintain records in the event the transfer agent determines to reject signature guarantees from eligible guarantor institutions. Registered transfer agents' records must include, following the date of rejection, a record of the rejected transfer, along with the reason for rejection, the identification of the guarantor, and an indication whether the guarantor failed to meet the transfer agent's guarantee standards. Rule 17Ad-15 requires registered transfer agents to maintain these records for a period of three years. The Commission designed these mandatory recordkeeping requirements to assist the Commission and other regulatory agencies with monitoring registered transfer agents and ensuring compliance with the rule. This rule does not involve the collection of confidential information.
The Commission estimates that approximately 315 registered transfer agents will spend a total of approximately 12,600 burden hours per year complying with recordkeeping requirements of Rules 17Ad-15 (based on approximately 40 burden hours per year per registered transfer agent). The Commission also estimates the aggregate annual internal cost of compliance for the approximately 315 registered transfer agents is approximately $4,019,400 (based on 40 hours annual burden × $319 hourly wage × 315 respondents). This reflects a decline in aggregate annual internal cost of compliance of $650,760 due to the decrease in the number of registered transfer agents from 366 to 315.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number.
The public may view background documentation for this information collection at the following website:
On January 2, 2024, the Financial Industry Regulatory Authority, Inc. (“FINRA”) filed with the Securities and Exchange Commission (“SEC” or “Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The proposed rule change was published for public comment in the
FINRA Rule 3240 generally prohibits, with exceptions, registered persons from borrowing money from, or lending money to, their customers. The rule has five tailored exceptions,
The proposed rule change would amend the title of FINRA Rule 3240 from “Borrowing From or Lending to Customers” to “Prohibition on Borrowing From or Lending to Customers,” and change the title of Rule 3240(a) from “Permissible Lending Arrangements; Conditions” to “General Prohibition; Permissible Borrowing or Lending Arrangements; Conditions.”
The proposed rule change would also make substantive changes to FINRA Rule 3240 to extend the application of the rule to: (1) borrowing or lending arrangements that pre-exist the initiation of a broker-customer relationship;
Currently, Rule 3240(a) states “[n]o person associated with a member in any registered capacity may borrow money from or lend money to any customer of such person. . . .” The proposed rule change would amend Rule 3240(a) to extend the rule's general requirements concerning borrowing and lending arrangements—including the general prohibition—to borrowing and lending arrangements that pre-exist a new broker-customer relationship.
The proposed rule change would similarly extend the application of the rule to borrowing or lending arrangements entered into within six months after a broker-customer relationship ends.
The proposed rule change would add new FINRA Rule 3240.05 (Arrangements with Persons Related to Either the Registered Person or the Customer) to extend Rule 3240 to indirect borrowing or lending arrangements involving related parties of the customer or registered person. Specifically, the proposed rule change would provide that a registered person instructing or asking a customer to enter into a borrowing or lending arrangement with a person related to the registered person (
The proposed rule change would add Rule 3240.03 (Owner-Financing Arrangements) to expressly state that, for purposes of Rule 3240, borrowing or lending arrangements include owner-financing arrangements.
Currently, Rule 3240 has an exception from the general prohibition for borrowing or lending arrangements with a customer who is a member of the registered person's immediate family.
FINRA stated that, in order to “modernize” the “immediate family” definition,
Currently, Rule 3240 has an exception from the general prohibition for borrowing or lending arrangements based on a “personal relationship with the customer, such that the loan would not have been solicited, offered, or given had the customer and the registered person not maintained a relationship outside of the broker-customer relationship” (the “personal relationship exception”).
The proposed rule change would narrow the personal relationship exception to apply only to personal relationships that are “bona fide” and “close,” and maintained outside of, and formed prior to, the broker-customer relationship.
In addition to narrowing the personal relationship and business relationship exceptions, the proposed rule change would add new Rule 3240.04 (Close Personal Relationships; Business Relationships), which would provide a list of non-exhaustive factors
FINRA stated that the proposed rule change would “help establish the scope of the close personal relationship and business relationship exceptions, focus on the most relevant factors when evaluating whether a close personal relationship or business relationship exists, and ensure that members consider meaningfully the potential issues involved in the proposed arrangement.”
Currently, Rule 3240(b) requires notification and approval for certain of the excepted borrowing or lending arrangements.
Current Rule 3240(b)(1)(A) provides that a registered person shall notify the member firm of borrowing or lending arrangements made within the personal relationship exception,
Further, the proposed rule change would amend the notification and approval requirements in Rule 3240(b)(1) to cover borrowing or lending arrangements that pre-exist the broker-
Current Rule 3240(b)(2) provides, in pertinent part, that a member firm's written procedures may indicate that registered persons are not required to notify the member firm or receive member firm approval of borrowing or lending arrangements within the immediate family exception.
Current Rule 3240(b)(3) provides, in pertinent part, that a member firm's written procedures may indicate that registered persons are not required to notify the member firm or receive the member firm's approval of borrowing or lending arrangements within the financial institution exception,
Currently, Rule 3240 does not require that registered persons who must notify their member firms of borrowing and lending arrangements to do so in writing.
The proposed rule change would also amend Rule 3240.01 to require member firms to retain the written notifications and approvals records for at least three years after the date that the borrowing or lending arrangement has terminated, or for at least three years after the registered person's association with the member has terminated.
The proposed rule change also would add new Rule 3240.06 (Obligations of Member Receiving Notice). Proposed Rule 3240.06 would require a member firm, upon receiving written notice under Rule 3240, to “perform a reasonable assessment of the risks created by the borrowing or lending arrangement with a customer, modification to the borrowing or lending arrangement with a customer, or existing borrowing or lending arrangement with a person who seeks to be a customer of the registered person.”
(1) any potential conflicts of interest in the registered person being in a borrowing or lending arrangement with a customer;
(2) the length and type of relationship between the customer and registered person;
(3) the material terms of the borrowing or lending arrangement;
(4) the customer's or the registered person's ability to repay the loan;
(5) the customer's age;
(6) whether the registered person has been a party to other borrowing or lending arrangements with customers;
(7) whether, based on the facts and circumstances observed in the member's business relationship with the customer, the customer has a mental or physical impairment that renders the customer unable to protect his or her own interests;
(8) any disciplinary history or indicia of improper activity or conduct with respect to the customer or the customer's account (
(9) any indicia of customer vulnerability or undue influence of the registered person over the customer.
Moreover, the factors that a member firm considers “should allow for a reasonable assessment of the associated risks so that the member can make a reasonable determination of whether to approve the borrowing or lending arrangement, modification to the borrowing or lending arrangement, or, where there is an existing borrowing or lending arrangement with a person who seeks to be a customer of the registered person, the broker-customer relationship.”
After careful review of the proposed rule change and the comment letters, and FINRA's response to comments, the Commission finds that the proposed rule change is consistent with the requirements of the Exchange Act and the rules and regulations thereunder that are applicable to a national securities association.
The proposed rule change would strengthen the general prohibition against borrowing and lending arrangements between registered persons and their customers. Specifically, it would narrow the types of permissible borrowing and lending arrangements by covering relationships that pre-exist a new broker-customer relationship, as well as borrowing or lending arrangements entered into within six months after a broker-customer relationship ends. The proposed rule change would also extend the application of the rule to indirect borrowing and lending arrangements involving related parties of the customer or registered person and to owner-financing arrangements. In addition, the proposed rule change would modify the relationship categories in the immediate family exception. Furthermore, it would require borrowing and lending arrangements based on the close personal relationship and business relationship exceptions be “bona fide.” It also would require: registered persons to notify their member firms in writing and obtain member firms' approval of certain borrowing and lending arrangements; member firms to retain records of notices and approvals; and member firms to conduct a reasonable assessment of the risks associated with certain arrangements. Accordingly, and as explained in more detail below, the Commission finds that the proposed rule change is consistent with Section 15A(b)(6) of the Exchange Act. The Commission addresses the proposed rule change's specific provisions, and any related comments, in turn.
FINRA is proposing to amend the title of FINRA Rule 3240 to “Prohibition on Borrowing From or Lending to Customers,” and change the title of Rule 3240(a) to “General Prohibition; Permissible Borrowing or Lending Arrangements; Conditions.” Commenters did not specifically comment on this proposed rule change. By emphasizing that FINRA Rule 3240 imposes a general prohibition on registered persons borrowing from or lending to their customers, the proposed rule change highlights the regulatory purpose of the rule to generally prohibit borrowing and lending arrangements.
The proposed rule change would also make several substantive changes to the general prohibition on borrowing from or lending to customers, including extending the rule to cover borrowing and lending arrangements that pre-exist the broker-customer relationship; extending the rule's limitations to borrowing or lending arrangements entered into within six months after a broker-customer relationship ends; and, specifying that certain borrowing and lending arrangements are covered by the general prohibition. The Commission addresses those changes below.
The proposed rule change would amend Rule 3240(a) to provide that the rule's general requirements concerning borrowing and lending arrangements—including the general prohibition—apply to borrowing and lending arrangements that pre-exist a new broker-customer relationship. The proposed rule change would prohibit registered persons from initiating a broker-customer relationship with a person with whom the registered person has an existing borrowing or lending arrangement unless the conditions of the proposed rule are met.
Two commenters supported this change.
FINRA stated that the proposed rule change would strengthen the general prohibition against borrowing and lending arrangements by extending the scope of arrangements to which the rule would apply to pre-existing arrangements.
The proposed rule change reasonably extends the general prohibition against borrowing and lending arrangements to cover borrowing or lending arrangements that pre-exist a new broker-customer relationship. By extending this general prohibition to such arrangements, the proposed rule change reasonably extends the scope of the rule while preserving the opportunity for parties to enter into such arrangements in limited circumstances and subject to procedural protections (as discussed below) designed to minimize the impact of the potential conflict. For these reasons, the proposed rule change is reasonably designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest.
The proposed rule change would add new FINRA Rule 3240.02 (Customer) to define “customer,” for purposes of Rule 3240, to include any customer who has, or in the previous six months had, a securities account assigned to the registered person at any member firm. FINRA stated that the proposed rule change would extend the rule's limitations to borrowing or lending arrangements entered into within six months after a broker-customer relationship terminates.
One commenter supported this proposed extension of the rule's limitations to borrowing or lending arrangements, but favored extending the covered time period to one year as a stronger anti-evasion measure instead of the proposed six months.
In response, FINRA stated that it proposed to align the new Rule 3240 time period with the six-month time period in the definition of “customer” in Rule 3241, because Rule 3241 addresses similar potential conflicts of interest,
The proposed rule change reasonably extends the rule's coverage to borrowing and lending arrangements involving customers who in the previous six months had a securities account assigned to a registered person. As a result, the proposed rule change protects investors by broadening the scope of customer relationships covered by the rule's general prohibition and limited exceptions. Further, the six-month limit on how long a broker-dealer must monitor terminated customer accounts reasonably balances the benefits of the rule's protections with the burden of complying with the rule's requirements for an extended period after the termination of the broker-customer relationship. For these reasons, the proposed rule change is reasonably designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest.
The proposed rule change would extend the rule's general prohibition to borrowing or lending arrangements with related parties of the customer or registered person that involve conflicts similar to those presented by borrowing or lending arrangements directly between registered persons and their customers. Specifically, proposed new FINRA Rule 3240.05 would provide that a registered person instructing or asking a customer to enter into a borrowing or lending arrangement with a person related to the registered person or to have a person related to the customer enter into a borrowing or lending arrangement with the registered person would present similar conflict of interest concerns as borrowing or lending arrangements between the registered person and the customer and would be inconsistent with Rule 3240 unless the conditions set forth in Rule 3240(a) are satisfied. FINRA stated that the proposed rule change would address the potential for customer abuse that arises when a registered person: (1) “induces a customer to enter into a borrowing or lending arrangement with a person or entity related to the registered person” or (2) “induces a customer to have a person or entity related to the customer enter into an arrangement with the registered person.”
Two commenters supported the proposed rule change.
The proposed addition of FINRA Rule 3240.05 reasonably extends the rule to cover indirect borrowing or lending arrangements involving parties related to either the registered person or the customer, and thus prevents a registered person from evading the restrictions of Rule 3240. As such, the proposed rule change appropriately addresses conflicts of interest between registered persons and customers that may arise from certain borrowing or lending arrangements with related persons and entities. For these reasons, the proposed rule change is reasonably designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest.
Proposed Rule 3240.03 would include owner-financing arrangements as borrowing or lending arrangements that are covered by Rule 3240.
By extending Rule 3240 to cover owner-financing arrangements, the proposed rule change protects investors by addressing financing arrangements that present similar conflicts of interest and a similar potential for abuse as other borrowing and lending arrangements covered by Rule 3240. Generally prohibiting such financing arrangements, unless the conditions of the rule are met, is a reasonable approach to address the potential risk of harm associated with this type of borrowing or lending arrangement. For these reasons, the proposed rule change is reasonably designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest.
Rule 3240's general prohibition on borrowing or lending arrangements provides an exception for arrangements between a registered person and a customer who is a member of the registered person's immediate family.
By amending the definition of “immediate family,” the proposed rule change updates the rule to encompass a broader set of familial relationships, while at the same time retaining a reasonably narrow and clear scope, which provides more compliance certainty. In addition, amending the “any other person” clause to restrict the definition to those individuals who live with, and are financially supported by, the registered person is a reasonable approach to reducing the potential for the exception to be misused. For these reasons, the proposed rule change is reasonably designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest.
Rule 3240 currently includes a personal relationship exception
In addition, proposed Rule 3240.04 would provide factors for evaluating
One commenter supported the proposed rule change, stating that replacing the current requirement with the bona fide relationship requirement for both the close personal relationship and business relationship exceptions “eliminates subjectivity and ambiguity”
Two other commenters opposed the proposed rule change.
In response, FINRA stated that it proposed to narrow the exception and provide factors that are relevant to assessing whether a relationship falls within the scope of either the close personal or business relationship exception precisely because it shared concerns about the scope of these exceptions. In particular, FINRA stated that limiting the personal relationship exception to relationships that are (1) bona fide, (2) close, and (3) maintained outside of, and formed prior to, the broker-customer relationship, “would reduce the risk that a registered person would concoct a personal relationship with a customer for the purpose of borrowing from or lending to the customer, and . . . address concerns that this exception could be exploited.”
In response to commenter requests for more examples of close personal and business relationships, FINRA stated that the examples described in the proposed rule change “add helpful clarity while giving members the flexibility to consider factors relevant to whether these exceptions apply.”
The proposed rule change reasonably limits the personal relationship exception to bona fide, close relationships maintained outside of, and formed prior to, the broker-customer relationship and the business relationship exception to borrowing and lending arrangements that are based on a bona fide business relationship maintained outside of the broker-customer relationship. By narrowing these exceptions in this manner, the proposed rule change would help ensure that these exceptions to the general prohibition are limited to the types of relationships where the risk to investors should be reduced. Similarly, by providing factors for evaluating whether a borrowing or lending arrangement is based on a bona fide, close personal relationship or a bona fide business relationship, as well as examples of close personal relationships and business relationships, the proposed rule change would help parties comply with the terms of these exceptions. For these reasons, the proposed rule change is reasonably designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest.
As stated above, Rule 3240(b) requires notification and approval for certain borrowing or lending arrangements.
The proposed rule change would amend Rule 3240(b)(1) to clarify that, although registered persons are required to obtain the member firm's prior approval of borrowing or lending arrangements within the close personal relationship, business relationship, or registered persons exceptions, the member firm is not required to approve such arrangements.
The proposed rule change would clarify that a member firm is not required to pre-approve borrowing or lending arrangements within the close personal relationship, business relationship, or registered persons exceptions. As such, the proposed rule change would strengthen an important existing control on such arrangements, by explicitly making clear that a member firm is not required to approve any such arrangement simply because a registered person notified the member firm. For these reasons, the proposed rule change is reasonably designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest.
Current Rule 3240(b)(2) provides, in pertinent part, that a member firm's written procedures may indicate that that registered persons are not required to notify the member firm or receive member firm approval either prior to or subsequent to entering into borrowing or lending arrangements with immediate family members.
The proposed rule change would amend Rule 3240(b)(2) and Rule 3240(b)(3) to apply the same approach to borrowing or lending arrangements within the immediate family exception and the financial institution exception, respectively, to such arrangements that pre-exist the broker-customer relationship.
Specifically, to extend these provisions to pre-existing arrangements, the proposed rule change would amend Rule 3240(b)(2) to provide that the member firm's written procedures may indicate that registered persons are not required to notify the member firm or receive the member firm's approval of pre-existing borrowing or lending arrangements that would fall within the immediate family exception prior to initiating a broker-customer relationship.
Two commenters expressed concern that the proposed rule change would not require notice and approval of borrowing or lending arrangements with immediate family members or financial institutions.
In response, FINRA stated that, other than extending the Rule 3240(b)(2) obligations to borrowing and lending arrangements established prior to initiating a broker-customer relationship, the proposed rule change would not amend the existing immediate family exception or require notice or approval of borrowing and lending arrangements with immediate family members.
The proposed rule change is not imposing new obligations on borrowing and lending arrangements within the immediate family exception or within the financial institution exception but would extend the existing regime to situations where such financial arrangements pre-exist the formal establishment of a broker-customer relationship. As with all the exceptions under the rule, a registered person can only enter into a borrowing or lending arrangement pursuant to the immediate family exception or financial institution exception if the member firm has adopted written procedures permitting such an arrangement. A member firm's procedures may prohibit all such arrangements, allow only some of the excepted arrangements, or impose limits on the exceptions, as the member firm deems appropriate to be reasonably designed to achieve compliance with the proposed rule change.
As stated above, Rule 3240 does not require that registered persons who must notify their member firms of borrowing and lending arrangements do so in writing.
The proposed rule change would require registered persons to notify their member firms in writing of those borrowing and lending arrangements under Rule 3240 that require notification and approval (
One commenter supported the proposed rule change.
By requiring registered persons to give written notice and requiring member firms to preserve records of such written notice—whether required specifically by the rule or by the member firm's written procedures—for at least three years, the proposed rule change is reasonably designed to help ensure compliance with the amended Rule 3240 and its exceptions. For these reasons, the proposed rule change is reasonably designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest.
The proposed rule change would add proposed Rule 3240.06, which would require a member firm, after receiving a written notice under Rule 3240, to “perform a reasonable assessment of the risks created by the borrowing or lending arrangement with a customer, modification to the borrowing or lending arrangement with a customer, or existing borrowing or lending arrangement with a person who seeks to be a customer of the registered person.”
One commenter supported the proposed rule change, stating that a reasonable assessment could result in “more questionable arrangements being scrutinized, leading to improved investor protection.”
In response, FINRA stated that FINRA Rule 3110 (Supervision) requires each member firm to “establish and maintain a system to supervise the activities of each associated person that is reasonably designed to achieve compliance with applicable securities laws and regulations, and with applicable FINRA rules.” FINRA stated that member firms could consider incorporating the commenter's suggested supervisory and disclosure requirements into their systems for supervising for compliance with Rule 3240, but FINRA is not requiring them here.
Requiring a member firm, after receiving written notice under Rule 3240, to perform a reasonable assessment of the risks created by the borrowing or lending arrangement with
For the reasons set forth above, the Commission finds that the proposed rule change is consistent with Section 15A(b)(6) of the Exchange Act, which requires, among other things, that FINRA rules be designed to prevent fraudulent and manipulative acts and practices, promote just and equitable principles of trade, and, in general, protect investors and the public interest.
It is therefore ordered pursuant to Section 19(b)(2) of the Exchange Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
FINRA is proposing to amend FINRA Rule 6897(b) (CAT Cost Recovery Fees) to implement a historical Consolidated Audit Trail (“CAT”) recovery assessment designed to permit FINRA to recoup its contributions to recoverable historical costs of the National Market System Plan Governing the Consolidated Audit Trail incurred prior to January 1, 2022.
The text of the proposed rule change is available on FINRA's website at
In its filing with the Commission, FINRA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
On July 11, 2012, the Commission adopted Rule 613 of Regulation NMS, which required the self-regulatory organizations to submit a national market system (“NMS”) plan to create, implement and maintain a consolidated audit trail that would capture customer and order event information for orders in NMS securities across all markets, from the time of order inception through routing, cancellation, modification, or execution.
The CAT Funding Model provides a framework for the recovery of the costs to create, develop, and maintain the CAT, including providing a method for allocating costs to fund the CAT among Participants and Industry Members. The CAT Funding Model establishes two categories of fees: (1) CAT fees assessed by CAT LLC and payable by certain Industry Members to recover a portion of historical CAT costs previously paid by the Participants (“Historical CAT Assessment” fees);
In light of the filing of File No. SR-FINRA-2024-013, which implements Historical CAT Assessment 1 with regard to Industry Members, FINRA is filing the instant proposed rule change to establish a fee to allow FINRA to recoup its contributions to the Participants' assessed share of Historical CAT Costs 1 (“Historical CAT Cost Recovery Assessment 1”). Historical CAT Cost Recovery Assessment 1 is designed to allow FINRA to recover its designated portion of Historical CAT Costs 1—amounting to $4,391,414—in a manner consistent with the Exchange Act and the CAT Funding Model Approval Order. In the Approval Order, the Commission acknowledged that “the Exchange Act expressly contemplates the ability of the Participants to recoup their costs to fulfill their statutory obligations under the Exchange Act.”
As discussed in File No. SR-FINRA-2024-013, which seeks to implement Historical CAT Assessment 1,
The following table illustrates FINRA's approximate contributions to the Plan Participants' collective one-third share of Historical CAT Costs 1 during each of the relevant periods.
FINRA's recovery of these approximately $4.4 million in Historical CAT Costs is reasonable and consistent with the Exchange Act. As discussed herein and in File No. SR-FINRA-2024-013, these costs were reasonable, appropriate and necessary for the creation, implementation and maintenance of the CAT. As stated by FINRA and permitted under the Exchange Act, FINRA will seek to recover its portion of the Participants' share of CAT costs to ensure that FINRA can fulfill its regulatory mandate and responsibilities.
FINRA is proposing to amend Rule 6897(b) (CAT Cost Recovery Fees) to implement Historical CAT Cost Recovery Assessment 1 at this time to allow FINRA to recover its contributions to the Participants' designated one-third share of Historical CAT Costs 1.
The following fields of the Participant Technical Specifications indicate the CAT Executing Brokers for transactions executed otherwise than on an exchange.
As discussed in File No. SR-FINRA-2024-013, the Operating Committee has determined that Historical Fee Rate 1 is $0.00003994969693072937 per executed equivalent share, and, under the CAT Funding Model, each of the CAT Executing Broker for the Buyer (“CEBB”), CAT Executing Broker for the Seller (“CEBS”), and relevant Participant for a given transaction in an Eligible Security would be responsible for one-third of that rate, or $0.00001331656564357646 per executed equivalent share.
FINRA proposes to amend Rule 6897(b)(1)(A) to implement Historical CAT Cost Recovery Assessment 1. Proposed Rule 6897(b)(1)(A)(i) would provide that each member CAT Executing Broker shall receive its first
Further, as provided in proposed Rule 6897(b)(1)(A)(iii), Historical CAT Cost Recovery Assessment 1 will remain in effect until $4,391,414 (FINRA's contribution to the one-third share of Historical CAT Costs 1 assessed to the Plan Participants) is collected from member CAT Executing Brokers collectively, which is estimated to be four months, but could be for a longer or shorter period of time.
As with Historical CAT Assessment 1, since Historical CAT Cost Recovery Assessment 1 is a monthly fee based on transaction volume from the prior month, Historical CAT Cost Recovery Assessment 1 may result in the collection of more than FINRA's approximately $4.4 million contribution to Historical CAT Costs 1. To the extent that occurs, any excess money collected during the final month in which Historical CAT Cost Recovery Assessment 1 is in effect will be used to offset future member fees assessed by FINRA in connection with FINRA's designated CAT costs as a Plan Participant.
Beginning with the initial invoice for Historical CAT Cost Recovery Assessment 1 in November 2024, FINRA will make available to each member CAT Executing Broker a copy of the relevant details for fee liable transactions executed each month otherwise than on an exchange. Similar to the information that would be provided by CAT LLC to CAT Executing Brokers in assessing the off-exchange portion of Historical CAT Assessment 1 each month,
FINRA will also make publicly available on its website: (i) the total amount invoiced each month that Historical CAT Cost Recovery Assessment 1 is in effect, (ii) the total amount invoiced for Historical CAT Cost Recovery Assessment 1 for all months since its commencement, and (iii) the total costs remaining to be collected from members in aggregate for Historical CAT Cost Recovery Assessment 1. By reviewing statistics regarding how much has been invoiced and how much remains to be invoiced for Historical CAT Cost Recovery Assessment 1, members would have sufficient information to reasonably track how much longer Historical CAT Cost Recovery Assessment 1 is likely to be in place.
FINRA has filed the proposed rule change for immediate effectiveness. The effective date and the implementation date will be the date of filing.
FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,
FINRA believes that this proposed rule change is consistent with the Act because it is designed to assist FINRA in meeting regulatory obligations pursuant to the Plan. In approving the Plan, the SEC noted that the Plan “is necessary and appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, to remove impediments to, and perfect the mechanism of a national market system, or is otherwise in furtherance of the purposes of the Act.”
As discussed in detail in File No. SR-FINRA-2024-013, FINRA believes that the proposed fees paid by the CEBBs and CEBSs in connection with Historical CAT Assessment 1 are reasonable, equitably allocated and not unfairly discriminatory. Historical CAT Cost Recovery Assessment 1 would similarly allow FINRA to recover its designated portion of Historical CAT Costs 1 from member CAT Executing Brokers in a fair and reasonable manner, as contemplated by the Exchange Act and consistent with the CAT Funding Model Approval Order.
Proposed Historical CAT Cost Recovery Assessment 1 would be charged to member CAT Executing Brokers in support of the maintenance of a consolidated audit trail for regulatory purposes. The proposed fees, therefore, are consistent with the Commission's view that regulatory fees be used for regulatory purposes. The proposed fees would not cover FINRA services unrelated to the CAT, and any surplus would be used as a reserve to offset future member fees assessed by FINRA to recover its contributions, as a Plan Participant, to CAT costs.
The reasonableness of Historical CAT Cost Recovery Assessment 1 and its consistency with the Exchange Act likewise is grounded in the facts described above and detailed in File No. SR-FINRA-2024-013. Specifically, the expenses that compose the portion of Historical CAT Costs 1 sought to be recovered through Historical CAT Cost Recovery Assessment 1 were recognized by the SEC as appropriate for recovery pursuant to the formula approved in the CAT Funding Model (
Historical CAT Cost Recovery Assessment 1 is designed to allow FINRA to recover its designated portion of Historical CAT Costs 1, consistent with the Exchange Act and the CAT Funding Model Approval Order.
Without a mechanism to recover its CAT costs, FINRA, which is unique among the Participants as a not-for-profit, national securities association, would not be able to effectively sustain its regulatory mission. Thus, consistent with the cost allocation framework put in place by the SEC-approved CAT Funding Model, whereby CEBBs and CEBSs share equal responsibility for the costs assessed directly to Industry Members based on their transactions in Eligible Securities, FINRA is seeking to recoup its designated portion of Historical CAT Costs 1 in a like manner that is fair, reasonable, and equitably allocated among FINRA's member firms in their capacity as CAT Executing Brokers.
Historical CAT Cost Recovery Assessment 1 is designed to recover FINRA's portion of Historical CAT Costs 1 incurred by CAT LLC associated with the development, implementation, and operation of the CAT system under the CAT NMS Plan. Thus, Historical CAT Cost Recovery Assessment 1 also is designed to support FINRA's efforts to align its operating expenses with its operating revenues, target break-even cash flows, and continue to responsibly manage expenses driven by mandatory initiatives, like the CAT NMS Plan, in a manner consistent with FINRA's public Financial Guiding Principles.
FINRA's approach in determining Historical CAT Cost Recovery Fee Rate 1, which is generally consistent with the approach provided for under the SEC-approved CAT Funding Model, is also reasonable and consistent with the Exchange Act. Specifically, similar to the CAT cost assessment methodology approved by the Commission, FINRA proposes to allocate equally among member CEBBs and CEBSs the portion of Participants' one-third share of Historical CAT Costs 1 previously paid by FINRA.
FINRA believes that it is reasonable, appropriate, and consistent with the Exchange Act to determine Historical CAT Cost Recovery Assessment 1 by dividing Historical CAT Assessment 1,
From June 2023 through May 2024, the average monthly executed equivalent share volume in Eligible Securities where FINRA is the relevant Participant was approximately 104.7 billion shares. Assuming similar trading volumes, under Historical CAT Cost Recovery Assessment 1, FINRA would recover its portion of the Participants' assessed share of Historical CAT Costs 1 within approximately four months.
FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Section 15A(b)(9) of the Act
Furthermore, in approving the CAT Funding Model, the SEC analyzed the potential competitive impact of the CAT Funding Model, including competitive issues related to market services, trading services and regulatory services, efficiency concerns, and capital formation.
As discussed in File No. SR-FINRA-2024-013, each of the inputs into the calculation of Historical CAT Assessment 1 is reasonable and the resulting fee rate for Historical CAT Assessment 1 is reasonable. Therefore, Historical CAT Cost Recovery Assessment 1, for these same reasons, is reasonable and would not impose any burden on competition that is not necessary or appropriate in furtherance of the purpose of the Exchange Act.
Based on the regulatory need discussed above, FINRA has undertaken an economic impact assessment, as set forth below, to analyze the potential economic impacts of the proposed rule change, including potential costs, benefits, and distributional and competitive effects, relative to the current baseline.
As discussed above under the “FINRA's Designated Portion of Historical CAT Costs 1” section, FINRA is filing a proposed rule change to establish Historical CAT Cost Recovery Assessment 1 to recover its designated portion of the Participants' share of Historical CAT Costs 1. FINRA intends that the fee framework and timeline for Historical CAT Cost Recovery Assessment 1 generally correspond to the fee framework and timeline put in place by CAT LLC with respect to Historical CAT Costs 1, as provided for in File No. SR-FINRA-2024-013 and as discussed above.
Also, as discussed above under the “FINRA's Designated Portion of Historical CAT Costs 1” section, FINRA arrived at the fee rate for Historical CAT Cost Recovery Assessment 1 by dividing by two the fee rate assessed to the Participants in connection with the implementation of Historical CAT Costs 1,
For the twelve months from June 1, 2023, through May 31, 2024, based on transactions reported to a FINRA TRF or to the ORF, there were 896 firm MPIDs that executed at least one purchase or sale of an equivalent share of an Eligible Security.
FINRA's proposal to recover its designated portion of the Participants' share of Historical CAT Costs 1 applies an approach generally consistent with the CAT Funding Model as approved by the SEC in that it assesses half of the fee rate that is assessed to FINRA under Historical CAT Assessment 1 (rounded to six decimal places) to each of the CEBB and CEBS for transactions where FINRA is the relevant Participant.
Where CEBBs and CEBSs choose to pass Historical CAT Cost Recovery Assessment 1 on to customers, some customers could attempt to avoid incurring this temporary cost by delaying trades until after FINRA's contribution to the Participants' share of Historical CAT Costs 1 is paid. FINRA believes this is an unlikely outcome because this fee is only one part of a trader's decision regarding whether and where to trade. In addition, as the Historical CAT Cost Recovery Assessment 1 recovery period is dependent on the level of trading activity, delaying trading may only serve to lengthen the recovery period. However, traders that do trade during the recovery period may incur relatively more costs than those that trade after the recovery period has ended.
As the SEC noted in approving the revised CAT Funding Model, if FINRA passes on its portion of the CAT fee allocation to its member firms and exchanges choose not to pass through their CAT fee allocations to their members, the cost to transact off-exchange may increase relative to executing on an exchange, potentially giving exchanges a competitive advantage.
Written comments were neither solicited nor received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Exchange Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend the rule change if it appears to the Commission that the action is necessary or appropriate in the public interest, for the protection of investors, or would otherwise further the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (“PRA”) (44 U.S.C. 3501
Under Rule 17f-1(b) under the Exchange Act, approximately 9,500 entities in the securities industry are registered in the Lost and Stolen Securities Program (“Program”). Registration fulfills a statutory requirement that entities report and inquire about missing, lost, counterfeit, or stolen securities. Registration also allows entities in the securities industry to gain access to a confidential database that stores information for the Program.
The Commission staff estimates that 4 new entities will register in the Program each year. The staff estimates that the average number of hours necessary to comply with Rule 17f-1(b) is one-half hour. Accordingly, the staff estimates that total annual burden for all participants is 2 hours (4 × one-half hour). The Commission staff estimates that compliance staff work at subject entities results in an internal cost of compliance, at an estimated hourly wage of $344, of $172 per year per entity (.5 hours × $344 per hour = $172 per year). Therefore, the aggregate annual internal cost of compliance is approximately $688 ($172 × 4= $688).
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number.
Pursuant to Section 19(b)(1)
The Exchange proposes to amend Rule 7.31 regarding the Minimum Trade Size Modifier. The proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend Rule 7.31 regarding the Minimum Trade Size (“MTS”) Modifier.
Rule 7.31(i)(3) provides that a Limit IOC Order, Non-Displayed Limit Order, Non-Displayed Primary Pegged Order, or MPL Order may be designated with an MTS Modifier. Rule 7.31(i)(3)(A) currently provides that an MTS must be a minimum of a round lot and that an order with an MTS Modifier will be rejected if the MTS is less than a round lot or if the MTS is larger than the size of the order. The Exchange proposes to amend Rule 7.31(i)(3)(A) to provide that an MTS may be an odd lot quantity and thus proposes to eliminate rule text currently providing that an MTS must be a minimum of a round lot and that an order with an MTS of less than one round lot would be rejected. The Exchange believes that restricting the use of the MTS Modifier to round lot sizes only is unnecessary and that providing member organizations with the option to use the MTS Modifier with an odd lot quantity could increase liquidity and enhance opportunities for order execution on the Exchange. The Exchange notes that permitting odd-lot order quantities is not novel on the Exchange or other equity exchanges and believes that this proposed change is consistent with other equity exchanges' approaches to the use of instructions similar to the MTS Modifier.
The Exchange also proposes to amend Rule 7.31(i)(3) to include the non-displayed ALO Order as an order type that could be designated with an MTS Modifier. This clarifying change is intended only to reflect current behavior, by providing a complete list of the order types that may be designated with an MTS Modifier. The Exchange notes that the inclusion of the non-displayed ALO Order
Because of the technology changes associated with this proposed rule change, the Exchange will announce the implementation date by Trader Update, which, subject to effectiveness of this proposed rule change, will be no later than in the fourth quarter of 2024.
The proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that the proposed change would remove impediments to, and perfect the mechanism of, a free and open market and a national market system, and protect investors and the public interest because it would provide member organizations with the option to use the MTS Modifier with odd lot quantities, which could encourage order flow to the Exchange and promote opportunities for order execution on the Exchange, to the benefit of all market participants. The proposed change would also clarify that the MTS Modifier may be used in conjunction with non-displayed ALO Orders, thereby removing impediments to, and perfecting the mechanism of, a free and open market and a national market system by updating Exchange rules to ensure that they reflect the current availability of the MTS Modifier and promoting consistency and specificity in Exchange rules as to the use of such modifier with non-displayed order types. The Exchange notes that the proposed change would not otherwise impact the operation of the MTS Modifier as provided under current Exchange rules. The Exchange also believes that the proposed change would align Exchange rules with the use of instructions similar to the MTS Modifier on other equity exchanges, thereby removing impediments to, and perfecting the mechanism of, a free and open market and a national market system.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed change would allow the optional MTS Modifier to be used with an odd lot quantity and accurately reflect the order types that may be designated with an MTS Modifier. The Exchange believes that the proposed change would promote competition among exchanges by offering member organizations options available on other equity exchanges and, to the extent the proposed change would increase opportunities for order execution, promote competition by making the Exchange a more attractive venue for order flow and enhancing market quality for all market participants.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
FINRA is proposing to (1) amend Section 1 (General Information) of the Uniform Application for Securities Industry Registration or Transfer (“Form U4”) to add a new question eliciting information to identify locations as residential supervisory locations (“RSLs”); (2) amend FINRA Rule 3110.19(d) (Obligation to Provide List of RSLs to FINRA) to remove the reference to a list of RSLs and the quarterly timeframe for member firms to provide the list to FINRA and replace it with the requirement that member firms provide current information identifying all locations designated as RSLs in the frequency, manner and format as FINRA may prescribe; and (3) make conforming changes to Section 6 (Registration Requests with Affiliated Firms) of the Form U4 and amend the Form U4 Instructions to account for the new question soliciting RSL information (“RSL Question”).
The text of the proposed rule change is available on FINRA's website at
In its filing with the Commission, FINRA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
Effective June 1, 2024, FINRA Rule 3110.19 permits a member firm to designate a private residence at which an associated person engages in specified supervisory activities, subject to certain safeguards and limitations, as an RSL, a non-registered location.
Currently, Rule 3110.19(d) requires a member firm that elects to designate any of its offices or locations as an RSL to provide FINRA with a current list of those offices or locations by the 15th day of the month following each calendar quarter in the manner and format (
Following a thorough review of the various options for member firms to identify their RSLs to FINRA, and in consideration of the comment letters submitted to the SEC in connection with the proposal to adopt Rule 3110.19 and other feedback FINRA has received, FINRA has determined that amending Form U4 to add the proposed new RSL Question would be the most appropriate manner for member firms to indicate a non-registered location that is identified on Form U4 a private residence is an RSL by responding “Yes” or “No.” Therefore, FINRA is prescribing that member firms must comply with Rule 3110.19(d), as proposed to be amended, by submitting such information to FINRA via the proposed RSL Question on Form U4.
As noted, the CRD system includes information reported on the uniform registration forms that member firms and regulatory authorities complete and maintain as part of the securities industry registration and licensing process.
FINRA believes that the most efficient, timely, and useful means for member firms to provide information identifying RSLs to FINRA is through the Form U4. Because member firms currently provide work and residential information about their associated persons through the Form U4 and keep such information up-to-date on an ongoing basis, FINRA believes that the proposed RSL Question on Form U4 would leverage existing processes to access and update Form U4 information to the CRD system and provide member firms with a uniform way to submit information to identify their RSLs in a manner with which they are familiar. FINRA believes that prescribing the Form U4 as the method of providing information identifying RSLs to FINRA would also allow member firms using FINRA's API Platform to respond to the proposed RSL Question for multiple locations simultaneously through an efficient machine-to-machine upload process.
For these reasons, FINRA is proposing to amend Section 1 (General Information) of the Form U4 to add a RSL Question that, when a member firm has indicated that an associated person's office of employment address is a non-registered location that is identified on Form U4 as a private residence, would ask, “Is this Office of Employment address an RSL?” and prompt the member firm to answer either “Yes” or “No.” The proposed RSL Question would also state that if “Yes” is selected to the RSL Question, the member firm confirms that the location is designated as an RSL as defined in FINRA Rule 3110.
Currently, Rule 3110.19(d) provides that a member firm that elects to designate any of its offices or locations as an RSL is required to provide FINRA
Under the proposed rule change, the requirement for member firms to provide a list of RSLs to FINRA would no longer be necessary since they would be reporting information identifying their RSLs via Form U4 and such information would be available to FINRA in the CRD system. Because FINRA and other securities regulators have access to the information in the CRD system in connection with their licensing and regulatory activities, they would be able to view the most current information about a member firm's RSLs at any time. Accordingly, this proposed amendment to remove the quarterly RSL list requirement is appropriate to align with the proposed amendment to Form U4 to include the RSL Question.
Also, in light of the proposed amendment to Form U4 to include the RSL Question, the quarterly timeframe currently provided in Rule 3110.19(d) does not align with the timing requirements for Form U4 amendments. Therefore, the proposed rule change would conform the timeframe pursuant to which member firms would be required to provide to FINRA information identifying their RSLs by removing the reference to the quarterly basis currently set forth in Rule 3110.19(d). Under the FINRA By-Laws, member firms and associated persons have a continuing obligation to ensure that a Form U4 is timely updated when an event or proceeding occurs that renders a prior response on the form inaccurate or incomplete; specifically, not later than 30 days after learning of the facts and circumstances giving rise to the change.
While FINRA acknowledges that the RSL reporting process would result in a slight extension of the previously announced October 15, 2024 initial RSL reporting deadline to December 26, 2024, FINRA believes that, under most circumstances, the reporting of RSL designations via the Form U4 would provide FINRA and other securities regulators this information on a more timely basis than the quarterly cadence currently set forth under Rule 3110.19(d) and would make the information more readily accessible to FINRA and other securities regulators.
FINRA is proposing to add the same RSL Question in Section 1 (General Information) to Section 6 (Registration Requests with Affiliated Firms) of Form U4. Section 6 (Registration Requests with Affiliated Firms) of the Form U4 is similar to Section 1 (General Information) and is used by a member firm to request registration for an associated person with an affiliate of the member firm. As in Section 1 (General Information), the RSL Question in Section 6 (Registration Requests with Affiliated Firms) would also prompt the member firm, when it has indicated that an associated person's office of employment address is a non-registered location that is identified on Form U4 as a private residence, to answer either “Yes” or “No,” and state that if “Yes” is selected, the member firm confirms that the location is designated as an RSL as defined in FINRA Rule 3110.
FINRA also is proposing to amend the Form U4 Instructions to account for the new RSL Question. The proposed conforming update to the instructions would provide: “If the Office of Employment address is a non-registered location and designated as a private residence, enter `yes' or `no' to indicate whether the Office of Employment address is a residential supervisory location as defined in FINRA Rule 3110. (Note: this question can be answered only if the Private Residence Check Box has been checked.) If `yes' is selected, the firm confirms that this location is designated as an RSL as defined in FINRA Rule 3110.”
The implementation date of the proposed rule change will be November 26, 2024. An implementation date that is 30 days prior to the date by which member firms must provide FINRA information identifying their RSLs under amended Rule 3110.19(d) would also align with the requirements of the FINRA By-Laws for member firms and registered persons to keep information disclosed on registration forms current at all times and that amendments to such forms must be filed with FINRA and other applicable regulators not later than 30 days after learning of the facts and circumstances giving rise to the change.
FINRA is proposing to prescribe, for member firms that have indicated on Form U4 that an associated person's office of employment address is a non-registered location that is a private residence, the following procedures for responding to the proposed RSL Question. The proposed RSL Question would prompt member firms to answer the question as either “Yes” or “No” within the timeframes set forth in the following chart:
As of
On and after the November 26, 2024 implementation date, member firms must keep the response to the RSL Question current at all times by supplementary amendments to the initial (or original) Form U4 and such amendments must be filed with FINRA no later than 30 days after a member firm designates or no longer designates a private residence location as an RSL.
FINRA has filed the proposed rule change for immediate effectiveness. The implementation date for the proposed rule change will be November 26, 2024.
FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,
FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. As discussed above, a member firm that elects to designate any of its offices or locations as an RSL is required to provide information identifying such offices to FINRA. FINRA believes that doing so through an RSL Question on the Form U4 within the implementation timeframes described in this filing would provide the most efficient, timely, and useful manner for member firms to do so.
The proposed rule change would amend the Form U4 to add a new RSL Question to facilitate the reporting of offices or locations designated by member firms as RSLs to FINRA. The proposed new RSL Question would require member firms to indicate whether a non-registered location that is identified on Form U4 as a private residence is an RSL by responding “Yes” or “No.” As described above, this proposed rule change would require member firms to amend such forms for all their associated persons whose office of employment address is a non-registered location that is identified on Form U4 as a private residence within the implementation timeframe described in this proposed rule change, which may place an administrative and operational burden on member firms. FINRA notes that amendments to Form U4 are relatively frequent over the course of a year, so member firms may be able to comply with this requirement going forward when they update the Form U4 for other reasons, subject to the
Moreover, FINRA believes the administrative and operational burdens on member firms and associated persons as a result of the proposed rule change would be mitigated because member firms and associated persons already must use Form U4 for associated persons to become registered with appropriate SROs, and both member firms and applicants for membership file initial, transfer and amended Forms U4 for their associated persons electronically to the CRD system using the FINRA Gateway or FINRA's API Platform (for machine-to-machine uploads of Form U4 filings). The CRD system includes reporting and record keeping capabilities that are familiar to member firms, and it may expedite the submission and timely maintenance of accurate information regarding a member firm's RSLs and the storage of historic Form U4 filings. Further, FINRA, the SEC and other securities regulators have ready access to Form U4 filings submitted to the CRD system using FINRA Gateway or FINRA's API Platform.
FINRA considered alternative methods to collect RSL information from member firms, including a custom electronic information request or submission of simple lists of locations through the FINRA Gateway. Either option would be costlier for member firms because they would need to develop an infrastructure to create, maintain and report such information, as well as to ensure the accuracy of the information. In addition, because the RSL information would not be submitted through Form U4, such information would not be easily aggregated, analyzed, or made readily available to securities regulators.
FINRA also considered staggered due dates for responses to the RSL Question on Form U4, whereby member firms would be required to provide a “Yes” response to the RSL Question to indicate all of the non-registered locations that are identified on Form U4 as private residences that the member firm designated as RSLs by a specified date, after which member firms would be required to provide a “No” response to the RSL Question for those non-registered locations that are identified on Form U4 as private residences that the member firm did not designate as RSLs. However, such staggered responses are unnecessary because the announced October 15, 2024 initial deadline for the first quarterly list has been replaced with the December 26, 2024 deadline and, as noted above, FINRA believes that the length of the transition period sufficiently mitigates the potential administrative and operational burdens on member firms by leveraging current operational processes already used by member firms. In addition, FINRA believes that a single implementation date is simpler and less likely to lead to confusion regarding the deadlines for compliance by member firms.
Written comments were neither solicited nor received.
Because the foregoing proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to amend Rule 7.31E regarding the Minimum Trade Size Modifier. The proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend Rule 7.31E regarding the Minimum Trade Size (“MTS”) Modifier.
Rule 7.31E(i)(3) provides that a Limit IOC Order, Non-Displayed Limit Order, MPL Order, Tracking Order, Non-Displayed Primary Pegged Order, or Discretionary Pegged Order may be designated with an MTS Modifier. Rule 7.31E(i)(3)(A) currently provides that an MTS must be a minimum of a round lot and that an order with an MTS Modifier will be rejected if the MTS is less than a round lot or if the MTS is larger than the size of the order. The Exchange proposes to amend Rule 7.31E(i)(3)(A) to provide that an MTS may be an odd lot quantity and thus proposes to eliminate rule text currently providing that an MTS must be a minimum of a round lot and that an order with an MTS of less than one round lot would be rejected. The Exchange believes that restricting the use of the MTS Modifier to round lot sizes only is unnecessary and that providing ETP Holders with the option to use the MTS Modifier with an odd lot quantity could increase liquidity and enhance opportunities for order execution on the Exchange. The Exchange notes that permitting odd-lot order quantities is not novel on the Exchange or other equity exchanges and believes that this proposed change is consistent with other equity exchanges' approaches to the use of instructions similar to the MTS Modifier.
The Exchange also proposes to amend Rule 7.31E(i)(3) to include the non-displayed ALO Order as an order type that could be designated with an MTS Modifier. This clarifying change is intended only to reflect current behavior, by providing a complete list of the order types that may be designated with an MTS Modifier. The Exchange notes that the inclusion of the non-displayed ALO Order
Because of the technology changes associated with this proposed rule change, the Exchange will announce the implementation date by Trader Update, which, subject to effectiveness of this proposed rule change, will be no later than in the fourth quarter of 2024.
The proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that the proposed change would remove impediments to, and perfect the mechanism of, a free and open market and a national market system, and protect investors and the public interest because it would provide ETP Holders with the option to use the MTS Modifier with odd lot quantities, which could encourage order flow to the Exchange and promote opportunities for order execution on the Exchange, to the benefit of all market participants. The proposed change would also clarify that the MTS Modifier may be used in conjunction with non-displayed ALO Orders, thereby removing impediments to, and perfecting the mechanism of, a free and open market and a national market system by updating Exchange rules to ensure that they reflect the current availability of the MTS Modifier and promoting consistency and specificity in Exchange rules as to the use of such modifier with non-displayed order types. The Exchange notes that the
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed change would allow the optional MTS Modifier to be used with an odd lot quantity and accurately reflect the order types that may be designated with an MTS Modifier. The Exchange believes that the proposed change would promote competition among exchanges by offering ETP Holders options available on other equity exchanges and, to the extent the proposed change would increase opportunities for order execution, promote competition by making the Exchange a more attractive venue for order flow and enhancing market quality for all market participants.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
2:00 p.m. on Thursday, September 26, 2024.
The meeting will be held via remote means and/or at the Commission's headquarters, 100 F Street NE, Washington, DC 20549.
This meeting will be closed to the public.
Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the closed meeting. Certain staff members who have an interest in the matters also may be present.
In the event that the time, date, or location of this meeting changes, an announcement of the change, along with the new time, date, and/or place of the meeting will be posted on the Commission's website at
The General Counsel of the Commission, or her designee, has certified that, in her opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B) and (10) and 17 CFR 200.402(a)(3), (a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and (a)(10), permit consideration of the scheduled matters at the closed meeting.
The subject matter of the closed meeting will consist of the following topics:
Institution and settlement of injunctive actions;
Institution and settlement of administrative proceedings;
Resolution of litigation claims; and
Other matters relating to examinations and enforcement proceedings.
At times, changes in Commission priorities require alterations in the scheduling of meeting agenda items that may consist of adjudicatory, examination, litigation, or regulatory matters.
For further information, please contact Vanessa A. Countryman from the Office of the Secretary at (202) 551-5400.
U.S. Small Business Administration.
Amendment 4.
This is an amendment of the Presidential declaration of a major disaster for the State of New Mexico (FEMA-4795-DR), dated June 20, 2024.
Issued on August 26, 2024.
Vanessa Morgan, Office of Disaster Recovery & Resilience, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for the State of New Mexico, dated June 20, 2024, is hereby amended to update the incident period for this disaster as beginning June 17, 2024 and continuing through August 20, 2024.
All other information in the original declaration remains unchanged.
U.S. Small Business Administration.
Amendment 2.
This is an amendment of the Presidential declaration of a major disaster for Public Assistance Only for the State of Texas (FEMA-4798-DR), dated August 21, 2024.
Issued on September 17, 2024.
Alan Escobar, Office of Disaster Recovery & Resilience, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for Private Non-Profit organizations in the State of Texas, dated August 21, 2024, is hereby amended to include the following areas as adversely affected by the disaster.
All other information in the original declaration remains unchanged.
U.S. Small Business Administration.
Amendment 1.
This is an amendment of the Presidential declaration of a major disaster for Public Assistance Only for the State of New Mexico (FEMA-4795-DR), dated July 11, 2024.
Issued on August 26, 2024.
Vanessa Morgan, Office of Disaster Recovery & Resilience, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for Private Non-Profit organizations in the State of New Mexico, dated June 11, 2024 is hereby amended to update the incident period for this disaster as beginning June 17, 2024 and continuing through August 20, 2024.
All other information in the original declaration remains unchanged.
Notice is hereby given of the following determinations: I hereby determine that certain objects being imported from abroad pursuant to agreements with their foreign owners or custodians for temporary display in the exhibition “Egon Schiele: Living Landscapes” at the Neue Galerie New York, in New York, New York, and at possible additional exhibitions or venues yet to be determined, are of cultural significance, and, further, that their temporary exhibition or display within the United States as aforementioned is in the national interest. I have ordered that Public Notice of these determinations be published in the
Reed Liriano, Program Coordinator, Office of the Legal Adviser, U.S. Department of State (telephone: 202-632-6471; email:
The foregoing determinations were made pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT).
Notice of final disposition; grant of exemption.
The Federal Motor Carrier Safety Administration (FMCSA) announces its decision to grant an application from Encore Flooring & Building Products (Encore, USDOT #2329419) for an exemption to allow it to operate commercial motor vehicles (CMVs) equipped with a module manufactured by Intellistop, Inc. (Intellistop). The Intellistop module is designed to pulse the required rear clearance, identification, and brake lamps from a lower-level lighting intensity to a higher-level lighting intensity 4 times in 2 seconds when the brakes are applied and then return the lights to a steady-burning state while the brakes remain engaged. The Agency has determined that granting the exemption to Encore would likely achieve a level of safety equivalent to, or greater than, the level of safety achieved by the regulation.
This exemption is effective September 23, 2024 and ending September 24, 2029.
Mr. David Sutula, Vehicle and Roadside Operations Division, Office of Carrier, Driver, and Vehicle Safety, MC-PSV, Federal Motor Carrier Safety Administration; 1200 New Jersey Avenue SE, Washington, DC 20590-0001; (202) 366-9209;
To view comments, go to
To view documents mentioned in this notice as being available in the docket, go to
If you do not have access to the internet, you may view the docket online by visiting Dockets Operations on the ground floor of the DOT West Building, 1200 New Jersey Avenue SE, Washington, DC 20590, between 9 a.m. and 5 p.m. ET, Monday through Friday, except Federal holidays. To be sure someone is there to help you, please call (202) 366-9317 or (202) 366-9826 before visiting Dockets Operations.
FMCSA has authority under 49 U.S.C. 31136(e) and 31315(b) to grant exemptions from the Federal Motor Carrier Safety Regulations (FMCSRs). FMCSA must publish a notice of each exemption request in the
The Agency reviews safety analyses and public comments submitted and determines whether granting the exemption would likely achieve a level of safety equivalent to, or greater than, the level that would be achieved by the current regulation (49 CFR 381.305(a)). The Agency must publish its decision in the
Section 393.25(e) of the FMCSRs requires all exterior lamps (both required lamps and any additional lamps) to be steady burning, with certain exceptions not relevant here. Two other provisions of the FMCSRs—section 393.11(a) and section 393.25(c)—mandate that required lamps on CMVs meet the requirements of Federal Motor Vehicle Safety Standard (FMVSS) No. 108 in effect at the time of manufacture. FMVSS No. 108, issued by the U.S. Department of Transportation's National Highway Traffic Safety Administration (NHTSA), includes a requirement that installed brake lamps, whether original or replacement equipment, be steady burning.
Encore applied for an exemption from 49 CFR 393.25(e) to allow it to operate CMVs equipped with Intellistop's module. When the brakes are applied, the Intellistop module is designed to pulse the rear clearance, identification, and brake lamps from a lower-level lighting intensity to a higher-level lighting intensity 4 times in 2 seconds and then maintain the original equipment manufacturer's (OEM) level of illumination for those lamps until the brakes are released and reapplied. Intellistop asserts that its module is designed to ensure that if the module ever fails, the clearance, identification, and brake lamps will default to normal OEM function and illumination.
Encore's application followed the Agency's October 7, 2022 (87 FR 61133), denial of Intellistop's application for an industry-wide exemption to allow all interstate motor carriers to operate CMVs equipped with the Intellistop module. While the Agency determined that the scope of the exemption Intellistop sought was too broad to ensure that an equivalent level of safety would be achieved, the Agency explained that individual motor carrier applications for exemption may be more closely aligned with FMCSA authorities. Exemptions more limited in scope would allow the Agency to ensure compliance with all relevant FMCSA regulations because the individual exemptee would be easily identifiable and its compliance with applicable regulations could be monitored, thus providing a level of safety equivalent to compliance with 49 CFR 393.25(e).
Encore stated that previous research demonstrated that the use of pulsating brake-activated lamps increases the visibility of vehicles and should lead to a significant decrease in rear-end crashes. In support of its application, Encore submitted several reports of research conducted by NHTSA on the issues of rear-end crashes, distracted driving, and braking signals.
A copy of the application is included in the docket referenced at the beginning of this notice.
FMCSA published a notice of the Encore application in the
TSEI reiterated comments it had previously made in support of the safety benefits of brake-activated warning lamps when used in conjunction with steady burning red brake lamps as well as its prior support of the exemption requests from Groendyke Transport, National Tank Truck Carriers (NTTC), and Grote Industries. Despite these previous expressions of support for the potential benefits of some brake warning lamp configurations, TSEI stated that it is concerned about any exemption permitting the pulsing of lamps that are currently required to be steady burning without a thorough consideration of safety data and research. TSEI stated that the aim of future rulemaking should be to ensure consistent application across all vehicles equipped with such pulsating lamps and recommended that the Agency engage in a formal rulemaking to amend part 393 to allow for pulsating brake lamps.
Four anonymous commenters cited various reasons for opposing the application, mainly contending that Agency resources should be focused on other areas. One commenter stated that the flashing lamps may be more distracting to other motorists.
TSC supported Encore's request and stated that enhanced rear signaling (ERS) can provide functionality beyond what traditional CMV lighting and reflective devices offer, including: drawing attention to CMVs stopped ahead; increasing awareness of roadside breakdowns; notification of emergency braking; and improving driver confidence both in ERS-equipped CMVs and in the following vehicle. TSC also stated that, in addition to these safety benefits, ERS performance is superior to that of steady burning brake lamps in conditions of severe weather, taillight glare, and around infrastructure obstacles.
Intellistop supported the applicant's request for exemption. It commented that for over 20 years multiple States have allowed pulsing or flashing of brake lamps. Many State driver training schools recommend tapping brakes when a CMV is slowing or stopping to warn other drivers. Intellistop stated that it is unlikely that other motorists would confuse the use of their module with the recommendation to tap brakes when a CMV is slowing or stopping.
Twelve additional commenters supported granting the exemption. These commenters believe that any technology that has been shown to reduce rear-end crashes should be allowed and cited various benefits of brake activated pulsating lamps, including (1) enhanced awareness that the vehicle is making a stop, especially at railroad crossings, and (2) increased visibility in severe weather conditions. Several commenters noted that 37 States currently allow brake lamps to flash. In addition, three commenters noted that the guidelines developed by the American Driver and Traffic Safety Education Association advise driving instructors to teach new drivers to pulse brake lamps when stopping to improve visibility.
Encore requested that FMCSA grant an exemption from 49 CFR 393.25(e)—requiring certain exterior lamps to be
Rear-end crashes generally account for approximately 30 percent of all crashes. They often result from a failure to respond (or delays in responding) to a stopped or decelerating lead vehicle. Data on crashes that occurred between 2010 and 2016 show that large trucks are consistently three times more likely than other vehicles to be struck in the rear in two-vehicle fatal crashes.
Both FMCSA and NHTSA have examined alternative rear-signaling systems to reduce the incidence of rear-end crashes. While research efforts concluded that improvements in the incidence of rear-end crashes could be realized through certain rear-lighting systems that flash,
The Agency acknowledges the limitations of the research studies completed to date and the overall data deficiencies in this area. Nonetheless, as noted in its Intellistop decision, the Agency recognizes that existing data do suggest a potential safety value in the use of alternative rear-signaling systems, generally. Specifically, FMCSA considered NHTSA's research concerning the development and evaluation of rear-signaling applications designed to reduce the frequency and severity of rear-end crashes via enhancements to rear-brake lighting. The study examined enhancements for (1) redirecting drivers' visual attention to the forward roadway (for cases involving a distracted driver) and (2) increasing the saliency or meaningfulness of the brake signal (for inattentive drivers).
While some of the data collected in the study may not be statistically significant, the study results nonetheless indicate that additional efforts to get drivers' attention when they are approaching the rear of a CMV that is stopping may be helpful to reduce driver distraction and, ultimately, rear-end crashes. This was among several reasons why researchers concluded that the promising nature of enhanced brake lighting systems warranted additional work and research. FMCSA believes the acquisition of relevant data through real-world monitoring is of critical importance as the Agency continues to seek new and innovative options for reducing crashes. This is particularly true given the data limitations noted in previous studies.
Despite finding a potential safety value in the use of alternative rear-signaling technology, in the Intellistop decision the Agency determined that the data presently available did not justify an exemption to allow all interstate motor carriers to alter the performance of an FMVSS-required lighting device (
The Agency's decision to grant this exemption is based on the data suggesting enhanced rear signal systems, such as pulsing brake lights, may help reduce the frequency and severity of rear-end crashes, as well as on the limited number of vehicles operating under the exemption. Encore currently operates a nationwide fleet of approximately 223 vehicles. The installation of the module on CMVs operated by a single motor carrier provides the opportunity for the Agency to collect data on the effects of pulsing brake lights in real-world conditions. The terms and conditions FMCSA imposes through this exemption will ensure appropriate Federal oversight in the use of these devices on a finite number of CMVs utilizing a phased-in approach.
Initially restricting the application of this exemption to a limited portion of Encore's fleet will allow for a comparison between the crash involvement of Encore CMVs equipped with the Intellistop device, those without the device, and the overall crash involvement of CMVs operated by similarly sized motor carriers with similar operations and overall safety performance. Data collected through this exemption and any other similar exemptions the Agency may grant in the future will allow for an evaluation of how the Intellistop module may improve following-vehicle driver responses to CMV braking. Consideration of the scope of any particular carrier's operation and the number and types of vehicles the carrier operates are critical to ensuring FMCSA gathers the most relevant data as the Agency considers safety benefits gained by the deployment of these rear brake lamp systems in CMV operations. The Agency's incremental approach in granting this limited exemption will also allow FMCSA to investigate and respond as appropriate to any incidents of alleged driver confusion attributable to use of the brake lamp systems in CMV operations, which some commenters have raised as a potential concern.
FMCSA acknowledges that, until recently, all pulsating rear lamp exemptions the Agency granted involved the addition of non-mandatory auxiliary lights while the Intellistop module that Encore seeks to install alters the functionality of original equipment manufacturers' lamps. Nonetheless, those previous exemptions are instructive, most notably Groendyke. The Groendyke exemption involved auxiliary lamps rather than required lighting, but, like the Intellistop module, the modulation of the auxiliary lamps in the Groendyke exemption occurs during braking. More importantly, Groendyke also involved a technology installed on a number of one carrier's CMVs, which allowed the Agency more realistically to monitor the exemptee's compliance with other applicable regulations. When granting the exemption, FMCSA found Groendyke's experience with brake-activated pulsating warning lamps, which resulted in a 33.7 percent reduction in rear-end crashes, to be compelling. Through the granting of the Groendyke exemption, the Agency was able to collect additional real-world data about the operation of the module at issue. Similarly, limited exemptions with narrowly tailored terms and conditions permitting the use of the Intellistop module will allow the Agency to collect data about the reliability and safety benefits of an integrated alternative rear-signaling system.
FMCSA notes that Encore failed to provide any evidence beyond what is publicly available about the integration of the Intellistop module with its CMVs' existing systems or to support the claim that a malfunction of the device would result in the brake lights returning to OEM functionality. Nonetheless, based on the Agency's understanding of the device's design and assertions made in publicly available materials, FMCSA believes concerns about both the reliability and integration of the device are sufficiently alleviated in this instance because of the narrow scope of the exemption and the stringent requirements imposed by the Agency in the terms and conditions. Any evidence that module failure results in anything less than a return to brake light OEM functionality will result in revocation of the exemption.
Likewise, granting this exemption to an easily identifiable carrier alleviates concerns the Agency previously articulated about its inability to monitor compliance with NHTSA's “make inoperative” prohibition. FMCSA can monitor compliance with this exemption and ensure that only Encore installs the module on its own CMVs.
Notwithstanding the promise the Agency sees in this technology, exemptions are warranted only if the applicant can demonstrate that an equivalent level of safety likely will be maintained. For this reason, the Agency believes it is important to consider the safety record of the applicant motor carrier. The Agency carefully considered Encore's existing on-road safety performance record prior to granting this exemption. While Encore's out-of-service (OOS) rate exceeds the national average, with a vehicle out-of-service (VOOS) rate of 33.3 percent (national average—21.4 percent), FMCSA believes this to be a statistical aberration based on a small sample size. Encore's relatively small fleet had few inspections during the sampling period. Thus, Encore's VOOS rate scored abnormally high. When compared to their VOOS when Encore initially applied (66.6%), it is clear that one or two inspections of the small fleet are affecting their VOOS rate. In addition, Encore had no driver OOS incidents (national average 6 percent) and no hazardous materials OOS incidents (national average 4.5 percent). Encore maintains a Satisfactory safety rating.
FMCSA has authority to grant temporary exemptions to the FMCSRs only to motor carriers and not to CMV manufacturers or vehicle alterers. FMCSA acknowledges that the research described above did not fully address all of the implications of allowing pulsating stop lamps, especially by automobiles where stop lamp design is stylized and often brand-specific, and that it remains unclear whether deviation from the uniform brake-light patterns of CMVs may cause confusion among highway users when the lamps are pulsated during braking. When Intellistop sought an industry-wide exemption, FMCSA concluded that the potential risks of widespread adoption outweighed the potential benefits. But FMCSA reaches a different conclusion here, where any risks will be more limited and easier to monitor. FMCSA notes, moreover, that the research suggests that the use of rear-signaling systems may be a means to reduce the frequency and severity of rear-end crashes involving CMVs, as do the reductions in rear-end crashes reported by Groendyke (84 FR 17910, April 26, 2019) utilizing an auxiliary flashing rear-signaling system. These facts and the specific safety record of the applicant motor carrier support the conclusion that permitting the use of Intellistop's pulsating-lamp module among a limited and known population of vehicles of a single motor carrier, subject to terms and conditions for monitoring, is likely to achieve a level of safety that is equivalent to, or greater than, the level of safety achieved without the exemption.
FMCSA has evaluated Encore's exemption application and the comments received. The Agency believes that granting a temporary exemption to section 393.25(e), and temporary limited exemptions to the requirements of 49 CFR 393.11(a) and 393.25(c) to allow Encore to operate a limited number of CMVs equipped with Intellistop's pulsating-brake module will likely achieve a level of safety that is equivalent to, or greater than, the level of safety achieved without the exemption.
This exemption is restricted to vehicles in Encore's fleet and provides relief from the steady burning requirement for rear clearance, identification, and brake lamp activation for 2 seconds following brake activation. All other FMVSS No. 108 requirements cross-referenced or incorporated within the FMCSRs remain in effect, with a limited exception to the requirement exempted here in sections 393.11(a) and 393.25(c) for only the first two seconds of brake engagement. In
The Agency has evaluated the application and hereby grants the exemption for a 5-year period, beginning September 23, 2024 and ending September 24, 2029. During the temporary exemption period, Encore (Applicant) may operate CMVs, equipped with Intellistop's module that pulses the rear brake, clearance, and identification lamps from a lower-level lighting intensity to a higher-level lighting intensity 4 times in 2 seconds. This grant applies only to the “steady-burning” requirement as specified in FMVSS 108 S7.3, and Tables I-a, I-b, and I-c. All other photometric and requirements for stop lamps specified in FMVSS 108 must still be met.
(i).
The Applicant may not install the Intellistop module on more than 50% of its power units, and 50% of its trailers during the first year of operation under the exemption. The Applicant shall provide the vehicle identification numbers for the power units and trailers that will be operating under the exemption.
The Applicant must maintain a control group of equal size to the group of power units and trailers equipped with the Intellistop unit during the first year of the exemption. And the CMVs in the control group must operate on routes with schedules that are similar to those of the Intellistop-equipped vehicles.
Installed modules may be used only to modulate rear clearance, identification, and stop lamps.
Within 30 business days of its first installation of the Intellistop module, the Applicant must notify the Agency via email at
If the Applicant sells or transfers ownership of any CMV equipped with an Intellistop module under this exemption, or if the exemption is terminated for any reason, the Applicant must remove the module and restore the CMV to full compliance with the FMCSRs and FMVSSs prior to the transfer of ownership, or upon termination of the exemption. The Applicant must also certify in writing to the purchaser/transferee and FMCSA that the CMV has been restored to compliance with the FMCSRs and FMVSSs.
(ii).
(iii).
(iv).
In the quarterly submission, the Applicant must provide FMCSA the following information known to the Applicant regarding all crashes and other incidents (“crash or incident”) involving a CMV equipped with an Intellistop module covered by this exemption where the Intellistop module is potentially implicated. Crashes involving a CMV equipped with an Intellistop module that are “head-on” or otherwise involve only the front of the Intellistop-equipped CMV impacting some other object (such that the Intellistop module, without question, could not be implicated) are not subject to this condition. For the first quarterly submission, data must include any crash or incident occurring in the 60 days prior to installation of the Intellistop module that would have been contained in this reporting category had the module been installed at the time of the crash or incident. The Applicant's knowledge includes, but is not limited to: (1) outreach from a consumer, lawyer, or any other person or organization (via letter, email, fax, telephone call, social media, or any other medium); (2) lawsuits to which the Applicant is a party, or otherwise knows exist where an Intellistop module covered by this exemption is an issue in the litigation; and (3) insurance claims against the Applicant related to use of the Intellistop module. When in the Applicant's possession, information provided to FMCSA shall include:
1. The date of first contact regarding, or the Applicant's first awareness of, the crash or incident;
2. The date of the most recent follow-up contact, if any, between the Applicant and the other party;
3. The date, time, and location of the crash or incident;
4. A brief description of the crash or incident; and
5. The Intellistop module type and/or subtype(s) involved in the crash or incident.
6. Information, if any, indicating that the Intellistop module is, or was, not working as intended, or caused confusion or a roadway hazard for either the consumer or other motorists.
(v).
(vi).
(vii).
In accordance with 49 U.S.C. 31315(d), as implemented by 49 CFR 381.600, during the period this exemption is in effect, no State shall enforce any law or regulation applicable to interstate commerce that conflicts with or is inconsistent with this exemption. States may, but are not required to, adopt the same exemption with respect to operations in intrastate commerce.
Federal Railroad Administration (FRA), Department of Transportation (DOT).
Notice.
The purpose of this notice is to inform the public that FRA has determined it is in the public interest for railroads to continue submitting reports of their positive train control (PTC) systems' performance to FRA on a quarterly basis as the Infrastructure Investment and Jobs Act currently requires, and as the Office of Management and Budget (OMB) has approved through March 31, 2027.
Gabe Neal, Staff Director, Signal, Train Control, and Crossings Division, telephone: 816-516-7168, email:
On November 15, 2021, President Joseph R. Biden signed into law the Infrastructure Investment and Jobs Act, which included the Passenger Rail Expansion and Rail Safety Act of 2021.
Section 22414 of the Passenger Rail Expansion and Rail Safety Act of 2021 requires FRA, by November 15, 2024, to reduce the frequency with which host railroads must submit Reports of PTC System Performance (Form FRA F 6180.152) to not less frequently than twice per year, unless FRA determines that quarterly reporting is in the public interest and publishes a justification for such determination in the
As background, 49 U.S.C. 20157(m) and 49 CFR 236.1029(h) require each applicable host railroad to submit certain metrics about PTC system performance to FRA on behalf of the host railroad itself and each of its applicable tenant railroads. The metrics include, for example, the number of PTC system initialization failures, cut outs, and malfunctions during the reporting period, with subtotals that identify whether the source or cause of the initialization failures, cut outs, and malfunctions was the onboard subsystem, the wayside subsystem, the communications subsystem, the back office subsystem, or a non-PTC component.
In addition, railroads' Reports of PTC System Performance (Form FRA F 6180.152) must encompass positive performance-related information in addition to failure-related information. For example, railroads report the number of enforcements by the PTC system in which it is reasonable to assume an accident or incident was prevented.
In October 2021, OMB initially approved Form FRA F 6180.152 when it was a biannual reporting requirement under FRA's regulations, 49 CFR 236.1029(h),
FRA has had the benefit of receiving railroads' Reports of PTC System Performance (Form FRA F 6180.152) on a quarterly basis for the last six quarters. FRA has found that the quarterly frequency has improved FRA's ability to oversee the performance and reliability of PTC systems effectively. For example, FRA has been able to monitor more closely industry-wide and system-by-system trends in PTC system reliability, without needing to wait six months for the next set of performance-related statistics. FRA also utilizes the data it receives in railroads' Quarterly Reports of PTC System Performance to inform and perform other necessary oversight, including inspections, targeted audits, and program reviews. The quarterly frequency enables FRA to direct its resources to areas, including specific PTC-governed track segments, that show the potential for a possible unsafe condition or where PTC system failures are occurring at a relatively high rate or trending upwards. The quarterly frequency enables FRA to intervene more promptly than it would be able to with less frequent reporting.
Also, railroads' Quarterly Reports of PTC System Performance must contain a summary of any actions the host railroad and its tenant railroads are taking to reduce the frequency and rate of initialization failures, cut outs, and malfunctions, such as any actions to correct or eliminate systemic issues and specific problems.
As noted above, OMB has approved the Quarterly Report of PTC System Performance (Form FRA F 6180.152) through March 31, 2027. Before that expiration date, FRA will issue the requisite 60-day and 30-day notices in the
National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).
Denial of petition.
Winnebago Industries, Inc., (Winnebago or petitioner), has determined that certain model year (MY) 2013-2023 Winnebago motorhomes do not fully comply with Federal Motor Vehicle Safety Standard (FMVSS) No. 108,
Leroy Angeles, Office of Vehicle Safety Compliance, NHTSA, (202) 366-5304.
Winnebago filed a noncompliance report dated November 11, 2022, and amended the report on December 2, 2022, and May 17, 2023, pursuant to 49 CFR part 573,
Notice of receipt of Winnebago's petition was published with a 30-day public comment period, on August 1, 2023, in the
Winnebago submits that NHTSA has previously explained that the purpose of FMVSS No. 108 is to reduce traffic accidents by, among other things, “enhancing the conspicuity of motor vehicles on the public roads so that their presence is perceived, and their signals understood, both in daylight and in darkness or other conditions of reduced visibility.” Winnebago further adds that in a 1990 final rule notice that increased the minimum lens area for wide vehicles from 8 square inches (
Winnebago says that around July 2022, it was informed by a lamp supplier that there “was concern about the compliance of turn signals installed in certain Winnebago vehicles . . .” Specifically, with the “minimum effective projected luminous area requirements of FMVSS No. 108.” Winnebago says it investigated the turn signals in the subject vehicles and confirmed that the “effective projected luminous lens area” is 6,361 square millimeters and thus, approximately 1,139 square millimeters smaller than the required minimum lens area.
Winnebago says that other than the size of the effective projected luminous lens area for the turn signals in the subject vehicles, the turn signals are fully compliant with all applicable performance requirements. Winnebago states that the turn signals at issue “have been in use for more than 15 years” and “is not aware of any crashes, injuries, customer complaints or field reports in connection with this noncompliance.” Winnebago states its belief that although the turn signal lens area is slightly smaller than the required minimum, the difference in size is “likely to be imperceptible to both vehicle occupants and approaching drivers, and do not have an effect on the conspicuity of the motorhomes on which they are installed.”
Winnebago states its belief that NHTSA increased the required minimum lens area for turn signals in wide vehicles due to the concern of buildup of grime and dirt. Winnebago claims that the turn signals on motorhomes “are generally well maintained by their owners compared to other classes of wide vehicles. Thus, a slightly smaller turn signal would not reasonably result in a buildup of dirt and grime on turn signals . . .”
Winnebago concludes by reiterating the subject noncompliance is inconsequential as it relates to motor vehicle safety and that its petition for exemption from providing notice and remedy for the noncompliance be granted.
In determining inconsequentiality of a noncompliance, NHTSA focuses on the safety risk to individuals who experience the type of event against which a recall would otherwise protect.
NHTSA has evaluated the merits of Winnebago's petition and determined Winnebago has not met its burden of persuasion that the subject noncompliance is inconsequential to motor vehicle safety.
The subject vehicles' failure to be equipped with turn signals compliant with the minimum lens area requirement reduces other road users' visibility of the signal lamps. Reduced visibility may lead other roadway users to lack understanding of the subject vehicle's intent to turn or make lane changes. This may, in turn, increase the risk of a crash. The effective projected luminous lens area (EPLLA) requirement serves other safety purposes, including but not limited to, minimizing glare by keeping intrinsic brightness within reason and increases visibility and conspicuity of the lamps. Further, NHTSA disagrees with Winnebago's statement that the lenses are “slightly smaller” than the required minimum of 7,500 square millimeters. The lamps at issue have an area 15 percent smaller than the required minimum area. Thus, NHTSA is not persuaded that the noncompliant lenses “do not have an effect on the conspicuity of the vehicles” at issue here.
Additionally, although Winnebago claims the lamps are otherwise compliant, Winnebago provided no rationale explaining why meeting other non-related requirements compensates for meeting the subject requirements. Therefore, NHTSA did not find this argument persuasive.
Concerning Winnebago's claims about the buildup of dirt and grime, Winnebago did not provide any data to support their statement that motorhome owners “keep their vehicles clean.” Regardless, NHTSA can identify multiple likely scenarios where vehicles get dirty during normal use as well as in extreme weather events such as while driving in the snow or on salted roads. Furthermore, as NHTSA stated in the preamble to the 1990 final rule referenced by the petitioner, the masking effects of road grime, dirt and winter slush are even greater on lamps with smaller lens areas. Since Winnebago's lamps are less than the required lens area, NHTSA continues to be concerned about this masking effect on the lamps subject to this petition.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
Veterans Benefits Administration, Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Comments must be received on or before November 22, 2024.
Comments must be submitted through
Under the PRA of 1995, Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VBA invites comments on: (1) whether the proposed collection of information is necessary for the proper performance of VBA's functions, including whether the information will have practical utility; (2) the accuracy of VBA's estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology.
Internal Revenue Service, Department of the Treasury; Employee Benefits Security Administration, Department of Labor; Centers for Medicare & Medicaid Services, Department of Health and Human Services.
Final rules.
This document sets forth final rules amending regulations implementing the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) and adding new regulations implementing the nonquantitative treatment limitation (NQTL) comparative analyses requirements under MHPAEA, as amended by the Consolidated Appropriations Act, 2021 (CAA, 2021). Specifically, these final rules amend the existing NQTL standard to prohibit group health plans and health insurance issuers offering group or individual health insurance coverage from using NQTLs that place greater restrictions on access to mental health and substance use disorder benefits as compared to medical/surgical benefits. As part of these changes, these final rules require plans and issuers to collect and evaluate relevant data in a manner reasonably designed to assess the impact of NQTLs on relevant outcomes related to access to mental health and substance use disorder benefits and medical/surgical benefits and to take reasonable action, as necessary, to address material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits. These final rules also amend existing examples and add new examples on the application of the rules for NQTLs to clarify and illustrate the requirements of MHPAEA. Additionally, these final rules set forth the content requirements for NQTL comparative analyses and specify how plans and issuers must make these comparative analyses available to the Department of the Treasury (Treasury), the Department of Labor (DOL), and the Department of Health and Human Services (HHS) (collectively, the Departments), as well as to an applicable State authority, and to participants, beneficiaries, and enrollees. Finally, HHS finalizes regulatory amendments to implement the sunset provision for self-funded non-Federal governmental plan elections to opt out of compliance with MHPAEA, as adopted in the Consolidated Appropriations Act, 2023 (CAA, 2023).
William Fischer, Internal Revenue Service, Department of the Treasury, at 202-317-5500; Beth Baum or David Sydlik, Employee Benefits Security Administration, Department of Labor, at 202-693-8335; David Mlawsky, Centers for Medicare & Medicaid Services, Department of Health and Human Services, at 410-786-6851.
America continues to experience a mental health and substance use disorder crisis affecting people across all demographics, with marginalized communities disproportionately impacted.
Additionally, in 2022, nearly 54.6 million people aged 12 or older were classified as needing treatment for substance use, but only about 24 percent of those people received any treatment, according to the Substance Abuse and Mental Health Services Administration's (SAMHSA) National Survey on Drug Use and Health (NSDUH).
Following the COVID-19 pandemic, employers highlighted that they have responded to the impact of the pandemic on the mental health and substance use disorder crisis by offering more comprehensive benefits, including
Despite these efforts, disparities in coverage between mental health and substance use disorder benefits and medical/surgical benefits have grown. In the preamble to the proposed rules,
RTI concluded that its analyses of the most recent, comprehensive private insurance claims data
These final rules aim to strengthen consumer protections consistent with MHPAEA's fundamental purpose—to ensure that individuals in group health plans or with group or individual health insurance coverage who seek treatment for covered mental health conditions or substance use disorders do not face greater burdens on access to benefits for those conditions or disorders than they would face when seeking coverage for the treatment of a medical condition or a surgical procedure.
The problems persist notwithstanding the Departments' unprecedented commitment to advance parity for mental health and substance use disorder benefits in recent years, as reflected through increased enforcement efforts and the Departments' work with interested parties to help them understand and comply with MHPAEA's requirements.
In 1996, Congress enacted the Mental Health Parity Act of 1996 (MHPA 1996), which required parity in aggregate
The Affordable Care Act (ACA)
The Departments published a request for information soliciting comments on issues under MHPAEA
The CAA, 2021 was enacted by Congress on December 27, 2020,
To help plans and issuers comply with the amendments to MHPAEA made by the CAA, 2021, the Departments issued Frequently Asked Questions (FAQs) About Mental Health and Substance Use Disorder Parity Implementation and the Consolidated Appropriations Act, 2021 Part 45 (FAQs Part 45).
Building on the lessons learned from implementing and enforcing MHPAEA, as well as the guidance provided in FAQs Part 45, on August 3, 2023, the Departments published proposed rules to amend existing MHPAEA regulations at 26 CFR 54.9812-1, 29 CFR 2590.712, and 45 CFR 146.136;
The Departments received 9,503 comments that were submitted during the comment period
In general, many commenters supported the proposed rules, because they would formalize and, according to these commenters, provide greater clarity on what health plans and issuers must do to comply with MHPAEA. Some commenters highlighted that the existing rules were insufficient and that the proposed rules were timely and necessary to strengthen MHPAEA and ensure fair access to mental health and substance use disorder care. Commenters highlighted the importance of the proposed rules to participants, beneficiaries, and enrollees, including children, teens, young adults, and others living with mental health conditions and substance use disorders. Several other commenters, however, expressed either opposition or concern regarding the proposed rules. Several commenters stated that the proposed rules would increase health plan and issuer costs and reduce treatment quality. A few commenters recommended the Departments withdraw the proposed rules and initiate a new rulemaking process after additional input from interested parties.
After reviewing the comments received during the comment period, the Departments are finalizing the proposed rules, with some changes in response to comments as described in more detail later in this preamble, to ensure that participants, beneficiaries, and enrollees can access the mental health and substance use disorder care they need without facing greater restrictions than when accessing medical and surgical care, consistent with the fundamental purpose of MHPAEA. These final rules provide additional clarity to plans and issuers on how to comply with MHPAEA's requirements and, as a result, will strengthen the protections of MHPAEA. As highlighted earlier in this preamble, since the 2013 final regulations, the Departments repeatedly sought input from interested parties on MHPAEA's requirements; therefore, the Departments decline to withdraw the proposed rules or initiate a new rulemaking process after soliciting additional input from interested parties. As explained throughout this preamble, the amendments made by these final rules are faithful to MHPAEA's parity requirements and sensitive to the flexibility plans and issuers have in designing benefits for group health plans and health insurance coverage.
Among other things, these final rules:
• Make clear that MHPAEA requires that individuals will not face greater restrictions on access to mental health and substance use disorder benefits as compared to medical/surgical benefits.
• Reinforce that health plans and issuers cannot use NQTLs, such as prior authorization and other medical management techniques, standards related to network composition, or methodologies to determine out-of-network reimbursement rates, for mental health and substance use disorder benefits, that are more restrictive than the predominant NQTLs applied to substantially all medical/surgical benefits in the same classification.
• Require plans and issuers to collect and evaluate data and take reasonable action, as necessary, to address material differences in access to mental health and substance use disorder benefits as compared to medical/surgical benefits, where the relevant data suggest that the NQTL contributes to material differences in access.
• Codify the requirement in MHPAEA, as amended by the CAA, 2021, that health plans and issuers conduct comparative analyses to measure the impact of NQTLs. This includes evaluating standards related to network composition, out-of-network reimbursement rates, and medical management and prior authorization NQTLs.
• Prohibit plans and issuers from using discriminatory information, evidence, sources, or standards that systematically disfavor or are specifically designed to disfavor access to mental health and substance use disorder benefits when designing NQTLs.
• Implement the sunset provision for self-funded non-Federal governmental plan elections to opt out of compliance with MHPAEA.
As a result, the Departments anticipate that these final rules will result in changes in network composition and medical management techniques related to mental health and substance use disorder care, more robust mental health and substance use disorder provider networks, and fewer
The Departments are issuing these final rules to ensure that individuals with mental health conditions and substance use disorders can benefit from the full protections afforded to them under MHPAEA, while offering clear guidance to plans and issuers on how to comply with MHPAEA's requirements. These final rules amend certain provisions of existing MHPAEA regulations at 26 CFR 54.9812-1, 29 CFR 2590.712, and 45 CFR 146.136 to incorporate new and revised definitions of key terms, as well as to specify the steps that plans and issuers must take to meet their obligations under MHPAEA. These final rules also add new regulations at 26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR 146.137 codifying minimum standards for developing NQTL comparative analyses to assess whether an NQTL, as written and in operation, complies with MHPAEA's requirements and setting forth the content elements of comparative analyses and the period for plans and issuers to respond to a request from the Departments to submit their comparative analyses. Additionally, in these final rules, HHS finalizes an amendment to 45 CFR 147.160 to specify that the final regulations at 45 CFR 146.137 apply to individual health insurance coverage offered by a health insurance issuer in the same manner and to the same extent that the regulations apply to health insurance coverage offered by a health insurance issuer in connection with a group health plan in the large group market.
In the preamble to the proposed rules, the Departments stated that the fundamental purpose of the MHPAEA statute, the 2013 final regulations, and the proposed rules is to ensure that participants and beneficiaries in a group health plan or in group health insurance coverage offered by a health insurance issuer that offers mental health or substance use disorder benefits are not subject to greater restrictions when seeking those benefits than when seeking medical/surgical benefits under the terms of the plan or coverage. The Departments also stated that the fundamental purpose of MHPAEA should serve as the guiding principle for plans and issuers as they work to comply with the requirements of the law and its implementing regulations. Accordingly, the Departments proposed to add a purpose section to the regulations, specifying this fundamental purpose, and that MHPAEA and its implementing regulations should be interpreted in a manner that is consistent with this purpose.
Many commenters supported the addition of the purpose section and the principles it addressed, including the goal of increasing access to mental health and substance use disorder benefits, to ensure equal treatment for mental health and substance use disorder benefits and medical/surgical benefits. A few commenters expressed opposition to the proposed purpose section, arguing that its language goes beyond the intent of MHPAEA (as Congress did not direct the Departments to provide a purpose in regulations, either initially or in later amendments).
The purpose section is important to highlight the overall goals of MHPAEA and to emphasize that the provisions of the 2013 final regulations, as amended by these final rules, should be interpreted in light of these goals. Congress provided authority to the Departments to “promulgate such regulations as may be necessary or appropriate to carry out the provisions of” chapter 100 of the Code, part 7 of ERISA, and title XXVII of the PHS Act, including MHPAEA.
Several commenters requested that the reference to “generally comparable” medical/surgical benefits in the proposed purpose section be revised to refer to the classification of benefits. These commenters noted that, consistent with the 2013 final regulations, evaluation of a plan's or issuer's MHPAEA compliance is assessed within the relevant classification of benefits, and that use of the term “comparable,” which is used in the 2013 final regulations and amendments made to MHPAEA by the CAA, 2021 with respect to requirements for NQTLs, is confusing and should be revised.
The Departments agree with commenters who noted that use of the term “comparable” can be confusing when used in this context, because compliance with the requirements for financial requirements, quantitative treatment limitations, and NQTLs has historically been determined within one of the six classifications of benefits.
Under the statute and the 2013 final regulations, the term “medical/surgical benefits” means benefits for medical or surgical services as defined under the terms of the plan or health insurance coverage but does not include mental health or substance use disorder benefits. The 2013 final regulations further provide that the term must be defined in accordance with applicable Federal and State law, and that any condition defined by the plan or coverage as being or as not being a medical/surgical condition must be defined to be consistent with generally recognized independent standards of current medical practice (for example, the most current version of the International Classification of Diseases (ICD) or State guidelines).
The proposed rules generally retained the first sentence of the 2013 final regulations' definition of “medical/surgical benefits,”
The Departments also proposed to make similar changes to the definitions of “mental health benefits” and “substance use disorder benefits” by amending the first sentence of each definition and removing the references to State guidelines, consistent with the changes described above for “medical/surgical benefits.”
In general, many commenters supported modifying these key definitions in existing MHPAEA regulations by specifying that, to be consistent with generally recognized independent standards of current medical practice, the terms of the plan or coverage must accord with appropriate chapters of the ICD or DSM. Many commenters generally supported requiring plans and issuers to follow the ICD or DSM, reasoning that both are generally accepted, peer-reviewed, nonprofit professional standards for diagnosis and descriptions of medical conditions, mental health conditions, and substance use disorders, and that following these authoritative and comprehensive diagnostic tools promotes uniform and standard application of MHPAEA to mental health conditions and substance use disorders. Several commenters noted that these changes would significantly improve clarity and would increase access to care, especially for intellectual and neurodevelopmental disorders, including dementia and autism spectrum disorder (ASD). Another commenter recommended clarifying whether plans and issuers are required to consider both the ICD and the DSM in categorizing benefits for the purposes of the proposed rules. One commenter added that the Departments' proposal to align and clarify the definitions of “mental health benefits” and “substance use disorder benefits” would ensure parity between the relevant terms and protect the application of MHPAEA for conditions and disorders recognized under independent standards of current medical practice. Another commenter expressing support reasoned that the proposed amendments would clearly specify how mental health conditions and substance use disorders must be defined for MHPAEA compliance purposes and minimize contradictions with State guidelines that now limit MHPAEA protections. The commenter also remarked that self-insured plans frequently include language from State-level mandated benefit requirements prevalent in the plan's geographic area that may not be MHPAEA-compliant.
Several commenters supported the removal of any reference to State guidelines to prevent situations in which contradictions between Federal and State guidelines would result in a loss of protections under MHPAEA. One commenter wrote that State law definitions often predate MHPAEA, may conflict with ICD and DSM standards, and should not be the operable standard, while others stated that State
In the proposed rules, the Departments noted that, to the extent applicable State law or generally recognized independent standards of current medical practice define a condition or disorder as a mental health condition or substance use disorder, plans and issuers must treat all benefits for the condition or disorder as mental health benefits or substance use disorder benefits, respectively, for purposes of analyzing parity and ensuring compliance with MHPAEA. To better understand interested parties' concerns in implementing this requirement, the Departments solicited comments on potential challenges in applying MHPAEA to all benefits for a mental health condition or substance use disorder where a specific item or service can be furnished for both medical conditions or surgical procedures and mental health conditions or substance use disorders, and whether additional clarifications or modifications to the proposed definitions are necessary.
In response to this comment solicitation, commenters identified several instances in which an individual with a mental health or substance use disorder diagnosis may need a particular treatment for that condition or disorder that may also be provided to treat a medical condition. For example, ASD
After reviewing comments received from interested parties, the Departments are finalizing the definitions of “medical/surgical benefits,” “mental health benefits” and “substance use disorder benefits” as proposed. While plans and issuers have some discretion in defining mental health benefits and substance use disorder benefits, this discretion must be exercised in a manner that comports with generally recognized independent standards of current medical practice, and the definitions in these final rules include sufficient safeguards to protect against defining a benefit in a manner that could result in limitations on access to mental health or substance use disorder benefits that are more restrictive than those applicable to medical/surgical benefits. Further, while the Departments acknowledge the concern that independent standards of current medical practice change over time and may not have been established with the same intents and purposes as State law or State guidelines, such standards better ensure that plans and issuers define mental health conditions and substance use disorders in a manner consistent with the purposes of MHPAEA. The Departments agree with one commenter's concern that some State laws, in particular, might predate MHPAEA. As a result, such State laws might not offer the same safeguards to access to mental health or substance use disorder benefits as MHPAEA. The Departments also note that plans and issuers are required to ensure that the definitions used in the plan or coverage are consistent with the appropriate chapters of the most current version of either the ICD or the DSM.
Additionally, while States generally are the traditional regulators of health insurance issuers, with respect to MHPAEA, the Departments are not persuaded that this necessitates permitting plans and issuers to use definitions of “medical/surgical benefits,” “mental health benefits” and “substance use disorder benefits” that are solely tied to applicable State law or guidelines. The definitions of “medical/surgical benefits,” “mental health benefits,” and “substance use disorder benefits” in these final rules preserve the ability of plans and issuers to use applicable Federal and State law to inform their definitions, but only to the extent that those laws are consistent with generally recognized independent standards of current medical practice.
These final rules do not make any changes to the proposed definitions to specifically address how plans and
To provide guidance to plans and issuers on how to ensure that they define benefits consistent with generally recognized independent standards of current medical practice, the proposed rules proposed separate definitions of the ICD and DSM. Specifically, the Departments proposed that the ICD would be defined as the World Health Organization's International Classification of Diseases adopted by HHS through 45 CFR 162.1002 or successor regulations, and the DSM would be defined as the APA's Diagnostic and Statistical Manual of Mental Disorders. The proposed definitions also specified, for purposes of the definition, which version of the ICD or DSM is the most current as of a particular date. This was intended to provide clarity on when a plan or issuer would be required to begin to rely on a new version of the ICD or DSM after it is released and allow sufficient time after the adoption of an updated version of the ICD or DSM for a plan or issuer to update the terms of its plan or coverage to be consistent with any changes made from the previous version. The proposed definitions stated that the most current version of the ICD or DSM, respectively, would be the version applicable no earlier than the date that is 1 year before the first day of the applicable plan year; however, the proposed rules would permit the use of an updated version before the plan or issuer is required to use it. Finally, in recognition of the fact that future versions of the ICD or DSM may include revisions to the categories of conditions or disorders or chapters listed in the proposed amended definitions for “mental health benefits” and “substance use disorder benefits,” the proposed amended definitions referred to “equivalent categories” and “equivalent chapters.”
The Departments received several comments on the proposed definitions of the terms “ICD” and “DSM,” with some commenters suggesting alternatives to the language identifying the most current versions of the DSM and ICD. One commenter suggested specifying that if a new version of the DSM or ICD is published in the middle of a plan year, then plans and issuers must use the updated version by the start of the next plan year. One commenter suggested that the most current version of an independent standard should encompass any version commonly in use among providers, and any version used in the most recent claims experience available to plans and issuers.
The Departments are finalizing the definition of “ICD” as proposed, with clarifications with respect to the most current version of the ICD. Specifically, under these final rules, the most current version of the ICD as of November 22, 2024, the effective date of these final rules, is the International Classification of Diseases, 10th Revision, Clinical Modification adopted for the period beginning on October 1, 2015, through HHS regulations at 45 CFR 162.1002 (or successor regulations).
The Departments are also finalizing the definition of “DSM” as proposed, with similar clarifications, which note that the most current version as of November 22, 2024, the effective date of these final rules, is the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, Text Revision published in March 2022. A subsequent version of the DSM published after November 22, 2024, will be considered the most current version beginning on the first day of the plan year that is one year after the date the subsequent version is published (as the DSM is published, rather than made applicable). Consistent with this clarification, if a new version of the DSM is published in the middle of a plan year, plans and issuers will have at least one full year before they are required to use the updated version with respect to a plan year. For example, if a new version of the DSM is published on August 1, 2025, for a calendar year plan, that version of the DSM would be the most current version with respect to the plan year beginning on January 1, 2027.
It is important to provide specificity with regard to the relevant versions of the ICD and DSM instead of allowing the use of multiple versions, as suggested by commenters, to ensure that plans and issuers do not select a version that restricts access to mental health and substance use disorder benefits in a manner that is more restrictive than access to medical/surgical benefits. Because the Departments understand that the ICD and DSM are both broadly utilized by providers and facilities, as well as plans and issuers, and were referenced in the 2013 final regulations, these final rules continue to rely on such standards.
Finally, the preamble to the proposed rules noted that interested parties requested that the Departments confirm whether specific conditions are mental health conditions for purposes of MHPAEA. Consistent with the 2013 final regulations and section 13007 of
The Departments also solicited comments on other specific mental health conditions or substance use disorders that may warrant additional clarification for purposes of analyzing parity and ensuring compliance with MHPAEA. The Departments received only a few comments in response, including a request to clarify whether gender dysphoria is a mental health condition. Because the most current versions of both the ICD and DSM include gender dysphoria as a mental health condition as of the time of the issuance of these final rules, benefits for this condition are currently subject to the protections of MHPAEA and its implementing regulations, consistent with the framework described earlier in this preamble.
The proposed rules included proposed new definitions of terms used in paragraph (c)(4)(i) of the 2013 final regulations, which states that a plan or issuer may not impose an NQTL with respect to mental health or substance use disorder benefits in any classification unless, under the terms of the plan (or health insurance coverage) as written and in operation, any “processes,” “strategies,” “evidentiary standards,” or other “factors” used in applying the NQTL to mental health or substance use disorder benefits in the classification are comparable to, and are applied no more stringently than, those used in applying the limitation with respect to medical/surgical benefits in the same classification. These terms and the corresponding standard were incorporated into MHPAEA's statutory language in the amendments made by the CAA, 2021.
In general, many commenters supported the proposed definitions of these key terms, which they described as foundational to the development of sufficient comparative analyses and necessary to hold plans and issuers accountable for discriminatory NQTLs. Several commenters described widespread misinterpretation by plans and issuers of the meaning of these key terms. Other commenters wrote that the proposed definitions would help clarify the difference between “factors” and “evidentiary standards,” and draw a clear distinction between “strategies” and “processes,” which relate, respectively, to plans' and issuers' approaches to the design of an NQTL, and to their application of an NQTL. Other commenters stated that the definitions of these terms should clearly distinguish between each component of a plan's or issuer's required comparative analysis and assign each step of the analysis to a particular component of the comparative analysis. Additionally, a commenter requested more specific examples of processes and evidentiary standards, and the differences between factors and evidentiary standards. One commenter stated that the proposed definitions are not coherent as applied to network contracting activities, development of reimbursement methodologies, or most other network composition NQTLs. This commenter claimed that there is no algorithmic approach to decision making that can be documented and requested the Departments to provide guidance on how the many activities involved in constructing provider networks and provider reimbursements across different plan types, service settings, and reimbursement methodologies should be categorized.
As stated in the preamble to the proposed rules, the proposed definitions for the terms “processes,” “strategies,” “evidentiary standards,” and “factors” are intended to further clarify how to properly apply and distinguish between these terms, and to help facilitate proper comparisons between the design and application of NQTLs to medical/surgical benefits and mental health and substance use disorder benefits in the same classification, compliance with the requirements related to NQTLs, and the development of sufficient comparative analyses, as required under the CAA, 2021 and these final rules. The definitions in these final rules improve clarity and add specificity to the terms used in MHPAEA, as amended by the CAA, 2021, to reduce misinterpretations, and are consistent with the requirements in these final rules that set forth the manner in which plans and issuers are required to perform and document comparative analyses, discussed later in this preamble. The Departments also provide additional guidance on how plans and issuers must comply with the provisions of these final rules with respect to NQTLs related to network composition,
The Departments note that nothing in these final rules requires an “algorithmic” decision making process; however, plans and issuers must perform and document their comparative analyses as required under 26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR 146.137 to show that the processes, strategies, evidentiary standards, and other factors used in designing or applying an NQTL to mental health and substance use
Under the proposed rules, the Departments proposed that evidentiary standards generally would not be considered factors, but instead would be considered or relied upon in designing or applying a factor. The Departments noted that, although the framework established in the 2013 final regulations treated the terms within the phrase “processes, strategies, evidentiary standards, and other factors” as having overlapping meanings (and the term “other factors” was utilized as a catch-all), the CAA, 2021 added to MHPAEA other references to factors and evidentiary standards that indicate Congress meant to distinguish between them.
The proposed rules provided that the term “evidentiary standards” would mean any evidence, sources, or standards that a plan or issuer considered or relied upon in designing or applying a factor with respect to an NQTL, including specific benchmarks or thresholds. The proposed definition further provides that evidentiary standards may be empirical, statistical, or clinical in nature, and include sources acquired or originating from an objective third party, such as recognized medical literature, professional standards and protocols (which may include comparative effectiveness studies and clinical trials), published research studies, payment rates for items and services (such as publicly available databases of the “usual, customary, and reasonable” rates paid for items and services), and clinical treatment guidelines. The proposed definition also provides that evidentiary standards would include internal plan or issuer data, such as claims or utilization data or criteria for assuring a sufficient mix and number of network providers, and benchmarks or thresholds, such as measures of excessive utilization, cost levels, time or distance standards, or network participation percentage thresholds.
One commenter recommended not including specific benchmarks or thresholds and professional standards and protocols in the definition of the term “evidentiary standards.” The commenter noted that many plans and issuers do not define their evidentiary standards numerically and that finalizing the definition as proposed could require plans and issuers to do so, thereby compelling plans and issuers not to use relevant, critical data in the development of their NQTLs. The commenter also remarked that including professional standards and protocols in the definition would require plans and issuers to incorporate potentially unproven medical guidance as a standard to dictate mental health or substance use disorder benefits, which could override common medical management practices. The commenter added that, if the reference to professional standards and protocols is retained, the Departments should clarify that the definition of “evidentiary standards” does not imply that all professional standards and protocols must be referenced or that benchmarks or thresholds are required to be applied to professional standards and protocols.
The Departments are finalizing the definition of “evidentiary standards” as proposed. The definition is consistent with the use of the term by Congress in the amendments made to MHPAEA by the CAA, 2021. The definition of the term “evidentiary standards” does not require plans and issuers to define their evidentiary standards numerically, nor does it imply that all professional standards and protocols must be referenced or that benchmarks or thresholds are required to be applied to professional standards and protocols (for example, where the standards are qualitative in nature). However, to the extent these types of evidentiary standards are used to design or apply an NQTL, they must be analyzed for compliance with MHPAEA. The list of examples of evidentiary standards included in the definition is not intended to be exhaustive, nor are any of the evidentiary standards listed required to be considered or relied upon in designing or applying a factor with respect to an NQTL.
In the proposed rules, the Departments proposed that the definition of the term “factors” be read broadly, so that factors are all information, including processes and strategies (but not evidentiary standards), that a plan or issuer considered or relied upon to design an NQTL or to determine whether or how the NQTL applies to benefits under the plan or coverage. The Departments noted that by defining the term “factor” broadly, the Departments' intention was to capture any information used to design or apply an NQTL (other than evidentiary standards), regardless of whether a plan or issuer believes that information could also be characterized as a “process” or a “strategy,” as those terms were proposed to be defined. The Departments proposed that the term “factors” includes information (but not evidentiary standards) that the plan or issuer considered but rejected, consistent with previous guidance on MHPAEA in the context of the documents or plan information the Departments consider relevant to a compliance determination.
With respect to the “broad” reading of the term “factor,” a commenter stated that the proposed definition subsumes “processes” and “strategies,” and suggested eliminating or clarifying this distinction with additional guidance. The commenter also remarked that the broad definition of “factor” would make the multiple steps in a comparative analysis less distinguishable, and the requirement that plans identify, define, and describe the use of every factor in the design or application of an NQTL unworkably expansive. A few commenters remarked that the breadth of the definition of “factor” makes it unclear how a plan or issuer would demonstrate that a factor is unbiased or not discriminatory for the purposes of the comparative analyses and recommended narrowing the definition of “factor” to distinguish it from evidentiary standards, processes, and strategies, and instead use the term to describe the basis for the plan's or issuer's application of an NQTL. Another commenter recommended not including information that the plan or issuer considered but rejected in the definition of factors, because it is not illustrative of the ultimate value of the mental health or substance use disorder benefit or the plan's or issuer's compliance with MHPAEA's NQTL standards. The commenter stated that the actual design of the benefit and how it translates to payments, denials, and reimbursement should substantiate whether the benefit design complies with parity requirements, without examining extraneous information on considerations early in the benefit's development process. A commenter suggested the Departments include an example of what the Departments would consider a complete definition of a factor and information about how to specify the weight assigned to factors.
The Departments are finalizing the definition of the term “factor” as proposed. The definition and list of examples of factors in the definition contained in these final rules are sufficiently detailed to provide context to plans and issuers in identifying factors, including by distinguishing evidentiary standards from factors and acknowledging that factors other than processes and strategies, which are types of factors, may exist. Under the 2013 final regulations, plans and issuers were permitted to utilize a wide array of factors in designing and applying their NQTLs to mental health and substance use disorder benefits provided they were comparable to, and applied no more stringently than, those utilized to design and apply NQTLs to medical/surgical benefits. Similarly, the CAA, 2021 did not limit what factors plans and issuers could use to design and apply their NQTLs, but instead required that these factors be identified and analyzed in the comparative analyses.
As noted in the preamble to the proposed rules, taking into account not only the factors that the plan or issuer relied upon, but also those that were considered but ultimately rejected in the definition of factors, is consistent with previous guidance on MHPAEA, namely because it is a factor that a plan or issuer uses in designing and applying an NQTL. The Departments recognize that the language used in the proposed rules, which included factors that were
In the proposed rules, the Departments proposed to define “processes” and “strategies” as types of factors, and to clarify the differences between the two terms as they relate to the design and application of an NQTL. Specifically, the Departments proposed defining “processes” as relating to the application of an NQTL, while “strategies” would relate to the design of an NQTL. After review of the comments, the Departments continue to be of the view that the best read of the statutory text (as well as the 2013 final regulations) is that processes and strategies are types of factors, rather than components of a factor to be separately evaluated.
The Departments proposed to define “processes” to mean actions, steps, or procedures that a plan or issuer uses to apply an NQTL, including actions, steps or procedures established by the plan or issuer as requirements in order for a participant or beneficiary to access benefits, including through actions by a participant's or beneficiary's authorized representative or a provider or facility. Under the proposed rules, processes include, but are not limited to: prior authorization procedures, provider referral requirements, and the development and approval of a treatment plan. The proposed definition also provided that processes include the specific procedures used by staff or other representatives of a plan or issuer (or the service provider of a plan or issuer) to administer the application of NQTLs, such as how a panel of staff members applies the NQTL (including the qualifications of staff involved, number of staff members allocated, and time allocated), consultations with panels of experts in applying the NQTL, and reviewer discretion in adhering to criteria hierarchy when applying an NQTL.
A commenter expressed appreciation for the proposed rules' intent and requested the Departments to include more specific examples of “processes.” Another commenter stated that the proposed definition for “processes” is too broad and focuses only on the end result of access to benefits, which the commenter stated is inconsistent with the Departments' previous guidance and regulations, and recommended narrowing the definition to focus on the operational application of any requirements.
After reviewing comments, the Departments are finalizing the definition of the term “processes,” with minor changes so that the examples of processes more clearly illustrate the way the action, step, or procedure is used to apply an NQTL.
The proposed rules proposed to define “strategies” as practices, methods, or internal metrics that a plan or issuer considers, reviews, or uses to design an NQTL, and included examples of strategies. The proposed definition of strategies included the following examples: the development of the clinical rationale used in approving or denying benefits; deviation from generally accepted standards of care; the selection of information (such as from medical or clinical guidelines) deemed reasonably necessary to make a medical necessity determination; reliance on treatment guidelines or guidelines provided by third-party organizations; and rationales used in selecting and adopting certain threshold amounts, professional protocols, and fee schedules. The proposed definition of strategies also specifically included: the creation and composition of the staff or other representatives of a plan or issuer (or the service provider of a plan or issuer) that deliberates, or otherwise makes decisions, on the design of NQTLs, including the plan's or issuer's decisions related to qualifications of staff involved; number of staff members allocated, and time allocated; breadth of sources and evidence considered; consultations with panels of experts in designing the NQTL; and the composition of the panels used to design an NQTL.
One commenter supported the inclusion in the definition of “strategies” of practices that involve “deviations from generally accepted standards of care.” Several commenters also recommended that the Departments include actions to detect or prevent and prove fraud, waste, and abuse in the definitions of either or both “processes” and “strategies,” rather than including those actions as a stand-alone exception from the NQTL requirements in the final rules. Another commenter appreciated the clear distinction made in the proposed definitions of processes and strategies and stated that they would appreciate if these distinctions tracked with separate steps in the comparative analyses.
The Departments are generally finalizing the definition of the term “strategies” with some minor changes to the examples to add specificity. The definition of the term “strategies” in these final rules includes examples of strategies used to design an NQTL, such as the method of determining whether and how to deviate from generally accepted standards of care in concurrent reviews; rationales used in selecting and adopting certain threshold amounts to apply an NQTL; professional standards and protocols to determine utilization management standards; and fee schedules used to determine provider reimbursement rates, used as part of an NQTL. The Departments note that, once a plan or issuer uses a strategy to design an NQTL, that design also may result in the establishment or use of processes to apply the NQTL.
While the Departments acknowledge comments suggesting that actions to detect or prevent and prove fraud, waste, and abuse be defined as either “processes” or “strategies,” and acknowledge that such actions certainly could constitute either processes or strategies (depending on whether the action is undertaken to design or apply the NQTL), the Departments decline to add a specific reference to actions to detect or prevent and prove fraud, waste, and abuse to the relevant definitions, as the proposed exception for standards to detect or prevent and prove fraud, waste, and abuse is not being finalized, as discussed later in this preamble.
The Departments proposed to amend the definition of “treatment limitations” to clarify that the illustrative list of NQTLs to which the definition refers is non-exhaustive and to amend the last sentence to state that a “complete” (rather than “permanent”) exclusion of all benefits for a particular condition or disorder is not a treatment limitation for purposes of the definition. In the preamble to the proposed rules, the Departments noted that, while NQTLs are generally defined as treatment limitations that are not expressed numerically, the application of an NQTL in a numerical way does not modify its nonquantitative character simply because the NQTL sometimes involves numerical standards, and such NQTLs would still be evaluated in accordance with the rules for NQTLs under the statute and implementing regulations.
Several commenters supported the Departments' amendment to the definition of “treatment limitation” to specify that “a complete exclusion of all benefits for a particular condition or disorder is not a treatment limitation for purposes of this definition,” rather than retaining the reference in the 2013 final regulations to a “permanent” exclusion. These commenters stated that the proposed definition more clearly specifies that a plan or issuer can exclude a particular condition or service without creating an NQTL, but that in doing so, the exclusion must be total. The commenters suggested the Departments include specific examples of permissible exclusions and impermissible exclusionary language. Other commenters expressed concern that the proposed definition of “treatment limitation” is too broad and argued that the proposed definition would lead to increased uncertainty in determining which common plan practices could constitute an NQTL. One commenter stated that if there is no comparable medical or surgical treatment limitation, there is nothing to compare a treatment limitation on a mental health or substance use disorder benefit to, and that therefore such a limitation on the mental health or substance use disorder benefit is not subject to parity requirements. Several commenters recommended adopting a consistent and exhaustive definition for determining whether a medical management technique is a treatment limitation.
The Departments are finalizing the definition of “treatment limitation” as proposed, with minor modifications to add an example of an NQTL. As reflected in the definition, medical management techniques are NQTLs if they limit the scope or duration of treatment. While the definition as amended is broad, plans and issuers have great latitude in the types of limitations that they may impose, and the Departments understand that plans and issuers do in fact impose a broad range of limitations on the scope or duration of treatment. In enacting MHPAEA and the amendments to MHPAEA contained in the CAA, 2021, Congress did not prohibit the use of these limitations for mental health and substance use disorder benefits, but
The Departments note that if a plan or issuer applies a treatment limitation to mental health and substance use disorder benefits where medical/surgical benefits are not subject to a comparable treatment limitation in the same classification, the plan or issuer would violate MHPAEA because it must not apply separate treatment limitations only to mental health and substance use disorder benefits. Further, the Departments have stated that, if a plan or issuer provides any benefits for a mental health condition or substance use disorder but excludes benefits for items or services for that condition or disorder in a classification in which it provides medical/surgical benefits, such an exclusion of a benefit for a condition or disorder that is otherwise covered is a treatment limitation because it is a limit on the scope or duration of treatment offered.
In the proposed rules, the Departments proposed changes designed to better ensure that plans and issuers do not design and implement NQTLs that impose greater restrictions on access to mental health and substance use disorder benefits as compared to medical/surgical benefits. The Departments proposed to add requirements that apply to NQTLs with respect to mental health and substance use disorder benefits, to ensure that plans and issuers do not impose a greater burden on participants and beneficiaries accessing those benefits than the burden imposed on participants and beneficiaries accessing medical/surgical benefits, while preserving the ability of plans and issuers to impose NQTLs to the extent they are consistent with generally recognized independent professional medical or clinical standards or legitimate and narrowly designed standards related to fraud, waste, and abuse. Subject to those two narrow exceptions for those types of NQTLs, the proposed rules provided that plans and issuers would not be permitted to impose an NQTL on mental health or substance use disorder benefits unless they satisfied all of the following three requirements: (1) the NQTL is no more restrictive as applied to mental health and substance use disorder benefits than to medical/surgical benefits (also referred to as the no more restrictive requirement); (2) the plan or issuer satisfies requirements related to the design and application of the NQTL (also referred to as the design and application requirements); and (3) the plan or issuer collects, evaluates, and considers the impact of relevant data on access to mental health and substance use disorder benefits relative to access to medical/surgical benefits; and subsequently takes reasonable action, as necessary, to address any material differences in access shown in the data to ensure compliance with MHPAEA (also referred to as the relevant data evaluation requirements).
Specifically, under the no more restrictive requirement, the proposed rules specified that a plan or issuer may not apply any NQTL to mental health or substance use disorder benefits in any classification that is more restrictive, as written or in operation, than the predominant NQTL that applies to substantially all medical/surgical benefits in the same classification. This requirement was intended to ensure that the implementing regulations more closely mirrored the statutory language in Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A), and PHS Act section 2726(a)(3)(A).
The proposed rules outlined a four-prong test for a plan or issuer to determine compliance with the no more restrictive requirement. Specifically, this provision would have required plans and issuers to determine: (1) the portion of plan payments for medical/surgical benefits subject to an NQTL in a classification; (2) whether the NQTL applies to substantially all medical/surgical benefits in the classification; (3) if the NQTL applies to substantially all medical/surgical benefits in the classification, the predominant variation of the NQTL that applies to substantially all medical/surgical benefits in the classification; and (4) whether the NQTL, as applied to mental health and substance use disorder benefits in the classification, is more restrictive than the predominant variation of the NQTL as applied to substantially all medical/surgical benefits.
The second proposed requirement for NQTLs, the design and application requirements, retained the requirements for NQTLs from the 2013 final regulations focused on the processes, strategies, evidentiary standards, and other factors used to apply an NQTL, with a proposed modification to better align the rules with the statute's focus on the design of an NQTL in addition to its application. In addition, the Departments proposed to prohibit plans and issuers from relying upon any factor or evidentiary standard if the information, evidence, sources, or standards on which the factor or evidentiary standard was based discriminates against mental health or substance use disorder benefits as compared to medical/surgical benefits.
The third requirement for NQTLs under the proposed rules, the relevant data evaluation requirements, proposed to require plans and issuers to collect and evaluate relevant outcomes data and take reasonable action to address material differences in access between mental health and substance use disorder benefits and medical/surgical benefits as necessary to ensure compliance, in operation, with MHPAEA. This requirement also included a proposed special rule for NQTLs related to network composition.
The proposed rules stated that, if a plan or issuer fails to meet any of the three requirements under the proposed rules with respect to an NQTL in a classification, the NQTL would violate MHPAEA and, as a result, could not be imposed on mental health or substance use disorder benefits in the classification without changes to the terms of the plan or coverage, or the way the NQTL is designed or applied, to ensure compliance with MHPAEA.
The Departments proposed two limited exceptions to some of the requirements for NQTLs, consistent with the Departments' intention to avoid interference with a plan's or issuer's attempts to ensure that NQTLs imposed with respect to benefits for
Finally, the Departments proposed to make clear that a plan or issuer that has received a final determination of noncompliance under the comparative analysis review process established by the CAA, 2021, including a final determination of noncompliance based on failure to provide a sufficient comparative analysis, would also be in violation of the substantive requirements that apply to NQTLs under MHPAEA, as determined by the Departments. Upon such a determination, the proposed rules would permit the Departments to direct the plan or issuer to not impose the NQTL that is the subject of the comparative analysis, unless and until the plan or issuer can demonstrate compliance or take appropriate action to remedy the violation.
The Departments requested comments on all aspects of these proposed amendments, including the exceptions to the proposed rules regarding NQTLs. Many commenters expressed support for these provisions of the proposed rules as a whole, as a means of achieving increased access to mental health and substance use disorder benefits by targeting NQTLs that otherwise impede access. Other commenters expressed support for the proposed rules' enhanced specificity with respect to the requirements for imposing NQTLs, with one commenter also indicating that the proposals would help State insurance regulators better enforce MHPAEA and clarify plans' and issuers' compliance obligations.
However, other commenters expressed the view that these provisions of the proposed rules were complex, ambiguous, confusing, subject to interpretation, or difficult to operationalize, which they argued could lead to substantial uncertainty for plans and issuers attempting to comply. Commenters also stated that it may be impossible for plans or issuers to meet the proposed mathematical substantially all and predominant tests as applied to NQTLs, leading them to eliminate necessary utilization management tools. Some commenters also indicated that these provisions of the proposed rules could lead to inconsistent application of NQTLs across plans administered by the same TPA or issuer, which could result in administrative complexity and cause confusion for consumers and providers. Other commenters highlighted that the proposed requirements would significantly increase the cost of administering plans and health insurance coverage. One commenter indicated that some plans might consider excluding all treatments or services for a particular mental health condition or substance use disorder as a result of the additional burdens imposed by the substantially all and predominant tests, if finalized as proposed. Some commenters also stated that the additional proposed requirements for NQTLs do not add value beyond distinctions already captured by the design and application requirements included in the 2013 final regulations, with some commenters stating those additional requirements go beyond MHPAEA's statutory requirements. Comments specific to each of the three requirements and two exceptions proposed at 26 CFR 54.9812-1(c)(4)(i), (ii), and (iv); 29 CFR 2590.712(c)(4)(i), (ii), and (iv); and 45 CFR 146.136(c)(4)(i), (ii), and (iv) are discussed in greater detail later in this preamble.
The Departments acknowledge the concerns expressed by commenters and, in response to comments, the Departments are finalizing a modified framework that is still intended to prevent plans and issuers from designing and applying NQTLs that impose greater burdens on access to mental health and substance use disorder benefits as compared to medical/surgical benefits, while limiting uncertainty, increases in cost, operational difficulty, and unintended consequences. These final rules streamline the proposed rules' general requirements to eliminate redundancies and add clarity for plans and issuers in a manner that remains consistent with the statutory text of MHPAEA, while also ensuring participants and beneficiaries will not face greater restrictions on access to mental health and substance use disorder benefits as compared to medical/surgical benefits.
These final rules do not finalize the language of the proposed “no more restrictive” requirement, as discussed in more detail later in this preamble, and instead incorporate the statutory requirements of Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A), and PHS Act section 2726(a)(3)(A) as the overall general rule for NQTLs in 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4). Specifically, these final rules state that, consistent with the fundamental purpose of MHPAEA, a group health plan (or health insurance coverage offered by an issuer in connection with a group health plan) may not impose any NQTL with respect to mental health or substance use disorder benefits in any classification that is more restrictive, as written or in operation, than the predominant NQTL that applies to substantially all medical/surgical benefits in the same classification. However, as discussed later in this preamble, the Departments are declining to finalize the proposed four-prong test for the no more restrictive requirement, which was proposed to determine compliance with statutory requirements as they apply to NQTLs.
Through the proposed mathematical substantially all and predominant tests for NQTLs as part of the no more restrictive requirement, the Departments proposed to require plans and issuers to follow similar steps to those that apply when analyzing parity with respect to financial requirements or quantitative treatment limitations under the 2013 final regulations (referred to in this preamble as the proposed mathematical substantially all and predominant tests). As noted in the proposed rules, the steps in the proposed mathematical substantially all and predominant tests would have involved determining the portion of plan payments for medical/surgical benefits subject to an NQTL in a classification; whether the NQTL applies to substantially all medical/surgical benefits in the classification; if the NQTL applies to substantially all medical/surgical benefits in the classification, the predominant variation of the NQTL that applies to substantially all medical/surgical benefits in the classification; and whether the NQTL, as applied to mental health and substance use disorder benefits in the classification, is more restrictive than the predominant variation of the NQTL, as applied to substantially all medical/surgical benefits.
Many commenters generally supported application of the proposed mathematical substantially all and predominant tests to NQTLs, with some indicating that the tests would provide additional clarity, eliminate subjectivity, assist regulators, and result in compliance improvements. Many of these commenters also stated that the statute clearly supports the tests, as it requires treatment limitations to be “no more restrictive” than the predominant treatment limitations that apply to substantially all medical/surgical benefits. Other commenters generally opposed the inclusion of the substantially all and predominant tests for NQTLs as part of the no more restrictive requirement. Some of these commenters stated that the proposed mathematical substantially all and predominant tests are a reversal of policy from the 2013 final regulations and are inconsistent with congressional intent, because Congress codified the design and application requirements from the 2013 final regulations in the CAA, 2021. These commenters highlighted that the Departments had stated previously that they understood NQTLs could not be easily quantified and that the Departments had not sufficiently explained their change in interpretation under the proposed rules.
Some commenters expressed general concerns that NQTLs are inherently unquantifiable, arguing that the proposal would result in unworkable standards or arbitrary outcomes that could prohibit plans and issuers from using evidence-based medical guidelines or other relevant factors specific to the item or service under consideration. Commenters also raised concerns that imposition of the proposed mathematical substantially all and predominant tests on certain types of NQTLs that are not commonly utilized for medical/surgical benefits may lead to some types of legitimate NQTLs no longer being permitted with respect to mental health and substance use disorder benefits. Specifically, several of these commenters contended that the proposed mathematical substantially all and predominant tests, as proposed, would result in the elimination of plans' and issuers' ability to impose certain NQTLs with respect to mental health and substance use disorder benefits, such as step therapy, prior authorization, and concurrent review, which they posited would negatively impact the quality and cost of care. Some commenters also cited potential negative, unintended consequences of the application of the proposed mathematical substantially all and predominant tests, as proposed, including patient safety concerns; impacts on health outcomes, quality, and affordability; and a chilling effect on access improvements and innovation. Further, some commenters expressed concern with the increased costs associated with complying with the proposed mathematical substantially all and predominant tests, with some stating that this increased burden would not be offset by any resulting increase in access to mental health and substance use disorder benefits for participants and beneficiaries.
Several commenters expressed confusion as to how these tests, as proposed, would be applied in practice and highlighted the need for more detail. Specifically, some commenters stated that these proposed provisions lack clarity in how the tests apply to certain types of NQTLs (including those related to network composition), and the potential consequences of enforcement of these requirements. Many commenters provided specific comments and feedback on aspects of each part of the substantially all and predominant tests included in the proposed rules, as discussed later in this preamble, and highlighted ambiguities and challenges operationalizing the proposed quantitative testing requirements with respect to NQTLs.
Under the first prong of the proposed mathematical substantially all and predominant tests, plans and issuers would have been required to determine the portion of plan payments for medical/surgical benefits in the classification expected to be subject to the NQTL based on the dollar amount of all plan payments for medical/surgical benefits in the classification expected to be paid under the plan or coverage for the plan year (or the portion of the plan year after a change in benefits that affects the applicability of the NQTL). The proposed rules stated that, for purposes of this determination, any reasonable method could be used to determine the dollar amount expected to be paid under a plan for medical/surgical benefits.
The Departments received many comments on the proposed requirement that the plan or issuer determine the portion of plan payments for medical/surgical benefits expected to be subject to an NQTL in the benefit classification. Several commenters indicated that the determination of the dollar amount of all plan payments for medical/surgical benefits expected to be paid may be an inappropriate measure altogether because NQTLs like medical management, assessments related to medical necessity, experimental/investigational treatment exclusions, prior authorization requests, and provider network admission standards are not generally attached to claims. Some commenters highlighted that self-insured plan sponsors may face challenges in obtaining a complete and reliable set of plan-level claims data, and accordingly, would have limited data to use to assess individual NQTLs, or would incur additional costs.
After determining the portion of plan payments for medical/surgical benefits in the classification expected to be subject to the NQTL, the Departments proposed that, under the second prong, plans and issuers would be required to determine whether the NQTL applies to substantially all medical/surgical benefits in the classification, based on the dollar amount of all plan payments for medical/surgical benefits in the classification expected to be paid under the plan for the plan year. Under the proposed rules, an NQTL would be considered to apply to substantially all medical/surgical benefits in a
The Departments received many comments regarding this prong of the proposed mathematical substantially all and predominant tests. As mentioned earlier in this preamble, many commenters stated that, in practice, a numerical “substantially all” determination would be difficult to apply and assess for NQTLs for many reasons, including because they are often not quantifiable, and there are more medical/surgical items and services (and associated benefits) than there are mental health and substance use disorder items and services. Additionally, commenters highlighted that plans and issuers already experience difficulty in obtaining data from service providers and would have difficulty in determining which NQTLs apply to at least two-thirds of medical/surgical benefits in a classification. Some commenters predicted that, if the Departments finalize the substantially all and predominant tests as proposed, plans and issuers might increase the application of NQTLs to medical/surgical benefits to meet the two-thirds threshold.
Further, some commenters requested that the Departments specify and provide examples showing how to apply the substantially all test to NQTLs that are not associated with plan payments, such as prescription drug formularies and network composition standards. One commenter highlighted that it is difficult to calculate the amount of plan payments expected to be paid for prescription drugs subject to an NQTL. Another commenter urged the Departments to clarify the determination of whether an NQTL applies regardless of whether the NQTL was triggered. For example, this commenter highlighted that insurers might state that prior authorization “applies” to all benefits in a classification where a benefit is considered or evaluated under the various factors for determining whether to apply prior authorization, even if the benefit ultimately is determined to not be subject to prior authorization based on the application of factors and evidentiary standards.
In addition, in the proposed rules, the Departments solicited comments on whether plans and issuers maintain systems capable of determining, under the proposed mathematical substantially all and predominant tests, whether an NQTL applies to substantially all medical/surgical benefits in a classification, and the administrative burden that would be associated with such determinations. Several commenters highlighted that it would be difficult to comply with the substantially all and predominant tests as proposed, including because the requisite data may be housed in different parts of a plan's or issuer's organization. One commenter emphasized that current administrative systems would need to be adapted, and plans and issuers would need to hire additional staff or service providers to be able to perform the analysis that would be required under the proposed mathematical substantially all and predominant tests.
Under the proposed rules, if a plan or issuer determined that an NQTL applies to substantially all medical/surgical benefits in a classification, the third prong of the test would require a plan or issuer to determine the predominant variation of the NQTL that is applied to substantially all medical/surgical benefits subject to the NQTL in the classification. The Departments proposed that the term “predominant” would, for this purpose, mean the most common or most frequent variation of an NQTL within a benefit classification.
The Departments received many comments regarding this part of the proposed tests. Numerous commenters stated that this aspect of the substantially all and predominant tests is unworkable. Some commenters noted that, with a lack of guidance on how to identify all the variations of a particular NQTL (especially those that are complex and nuanced), the proposed rules may not be feasible for plans, issuers, and regulators to apply in real-life situations. Several commenters stated that, while financial requirements and quantitative treatment limitations will have only a few different variations, NQTLs are multifactorial and each difference could be considered a different variation, or even a separate NQTL. For example, some of these commenters highlighted that prior authorization or concurrent review may take varied forms: an admission that requires advance prior authorization; an admission that requires notification but no clinical review; a nonclinical review based on predetermined standards; a first-level or nurse clinical review; a second-level or physician clinical review; and a peer-to-peer clinical review. These commenters noted that some processes may be automated or manual, some may be handled by vendors or directly by the plan or issuer, and some may have multiple utilization management systems within all of the aforementioned categories. Another commenter highlighted that a plan or regulator could conceivably determine that “variations” include a wide range of aspects, such as the credentials of the reviewer, the type or source of clinical criteria applied, the timing of the review (for example, urgent vs. nonurgent), the modality of authorization submission (for example, via electronic health record vs. fax or pdf form), among others. As a result, these commenters stated that determining how to identify the predominant variation of an NQTL may not be feasible without additional clarifications. Many commenters requested that the Departments provide a definition of the term “variation” and an explanation of how to determine whether a variation exists, as well as additional guidance and examples illustrating when an NQTL has no variation and when an NQTL has multiple variations (beyond variations based on numerical distinctions). These commenters also noted that, under the proposed rules, the predominant variation may only apply to a small percentage of medical/surgical services or items in the applicable benefit classification.
Lastly, under the fourth prong, the proposed rules provided that an NQTL applied to mental health or substance use disorder benefits cannot be
Some commenters supported this approach to the “more restrictive” part of the test in the proposed rules because, according to these commenters, it provided a more concrete and less subjective standard. Other commenters emphasized, as discussed earlier in this preamble, that the proposed mathematical substantially all and predominant tests, which provide a quantitative basis for comparison, are unworkable for NQTLs and administratively burdensome. Many of these commenters requested that, if the proposed mathematical substantially all and predominant tests are finalized, the Departments provide extensive and detailed implementation guidance to assist plans and issuers in complying with what the commenters characterized as this challenging framework. Another commenter suggested that the Departments establish a safe harbor for plans and issuers from the substantially all and predominant tests for any variation in NQTL outcomes data driven by State law or regulation.
The Departments appreciate the detailed comments received on all aspects of the proposed mathematical substantially all and predominant tests, including comments particular to each aspect of the proposed four-prong test. The Departments acknowledge that many commenters expressed concerns that applying to NQTLs the same proposed mathematical substantially all and predominant tests that are applicable to financial requirements or quantitative treatment limitations may be difficult to operationalize and could be unworkable. The Departments acknowledge that this framework was first developed for financial requirements and quantitative treatment limitations, where there are relatively clear and limited numbers of variations, and that the framework might be impractical or impossible for NQTLs, which differ in how they are designed and applied to various benefits.
At the same time, the Departments agree with commenters who stated that applying the statutory no more restrictive requirement to NQTLs under the proposed rules would assist regulators tasked with enforcing MHPAEA's requirements and result in overall compliance improvements by formalizing and providing greater clarity on what plans and issuers must do to comply with MHPAEA. The Departments also agree with commenters who emphasized the importance of the statutory requirement that plans and issuers shall ensure that the treatment limitations they impose on mental health and substance use disorder benefits generally are no more restrictive than those they impose on medical/surgical benefits. The proposed rules made clear that the incorporation of this statutory language into regulations is key to ensuring that people seeking mental health and substance use disorder treatment do not face a greater burden on access to benefits for such treatment than on access to benefits for medical treatment and surgical procedures, a premise that is central to MHPAEA.
After reviewing all the comments on the proposed four prongs of the no more restrictive requirement, the Departments have sought to address many of the workability concerns expressed by commenters, while honoring statutory requirements. Specifically, due to concerns raised by the commenters, the Departments are declining to finalize the proposed mathematical substantially all and predominant tests for NQTLs, which would have based these determinations on the dollar amount of all plan payments for medical/surgical benefits expected to be paid, similar to the steps that apply when analyzing parity with respect to financial requirements or quantitative treatment limitations under the 2013 final regulations. These final rules address commenters' operability and feasibility concerns with respect to the proposed mathematical substantially all and predominant tests, while continuing to set forth a standard for parity compliance that is grounded in MHPAEA's statutory text and is also sufficiently flexible to account for the unique and nonquantifiable nature of NQTLs. As noted later in this preamble, these final rules retain the focus on the design and application of NQTLs, including with respect to relevant outcomes measures, to ensure that NQTLs are no more restrictive in the context of mental health and substance use disorder benefits than in the context of medical/surgical benefits.
Therefore, these final rules do not finalize the provisions proposed under 26 CFR 54.9812-1(c)(4)(i)(A) through (E), 29 CFR 2590.712(c)(4)(i)(A) through (E), and 45 CFR 146.136(c)(4)(i)(A) through (E). Instead, consistent with MHPAEA's express statutory requirement,
These final rules also include a few technical changes to this language, including relocation of the reference to 26 CFR 54.9812-1(a)(1), 29 CFR 2590.712(a)(1), and 45 CFR 146.136(a)(1) from the beginning of the general rule of the design and application requirements to the beginning of the regulatory requirements for NQTLs at 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4), to make clear that plans and issuers should consider the fundamental purpose of MHPAEA in complying with all parts of the requirements for NQTLs. Additionally, the Departments are incorporating the phrase “may not impose” from the beginning of the proposed regulatory requirements for NQTLs, to make clear that this standard applies both to the design and application of NQTLs. The Departments are also replacing the word “applied” with “applies” in the clause describing “the predominant NQTL that applies to substantially all medical/surgical benefits in the same classification.” This adjustment from past to present tense is intended to clarify that plans and issuers should evaluate compliance with MHPAEA with respect to NQTLs that are currently imposed under the plan or coverage, rather than just those that might have been imposed at some point in the past.
The Departments proposed to redesignate the requirement at 26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i) in the 2013 final regulations as paragraph (c)(4)(ii)(A) and amend it to align with the Departments' interpretation that a plan or issuer may not impose an NQTL with respect to mental health or substance use disorder benefits in any classification unless, under the terms of the plan (or health insurance coverage) as written and in operation, any processes, strategies, evidentiary standards, or other factors used in
Some commenters generally supported the proposed design and application requirements as part of an overall framework for evaluating compliance with MHPAEA's requirements with respect to NQTLs. Some commenters indicated that they have encountered barriers in identifying whether plans and issuers comply with MHPAEA's requirements, and this proposal would help them identify whether the plan or issuer is compliant with respect to the design and application of NQTLs. Other commenters generally opposed the proposed changes to the design and application requirements. One commenter also stated that the design and application requirements would not improve benefit quality and would also constitute an impermissible retroactive application of the regulation in the case of regulated entities that were not required to comply with MHPAEA when they designed their benefit plans.
With respect to commenters' concern that the design and application requirements would not improve benefit quality, the Departments anticipate that greater clarity with respect to these requirements, including the definitions of the terms “processes,” “strategies,” “evidentiary standards,” and “factors” under these final rules, as discussed earlier in this preamble, will help plans and issuers assess their compliance and remedy any parity violations, which will result in improved benefit quality overall. The Departments also disagree with the concern expressed by commenters that the design and application requirements impermissibly apply to plans and issuers that were not required to comply with MHPAEA when they designed their benefit plans. As stated earlier in this preamble, this provision codifies the Departments' longstanding interpretation of the design and application requirements and the CAA, 2021 amendments to the MHPAEA statute. The CAA, 2021 amendments apply generally to plans and issuers that offer both medical/surgical benefits and mental health or substance use disorder benefits and impose NQTLs on mental health or substance use disorder benefits. Congress did not exempt plans or issuers whose plans or benefit designs predated these requirements, and the Departments similarly did not take such an approach in implementing the 2010 interim final regulations or the 2013 final regulations. In fact, as described in more detail later in this preamble, Congress included a provision in the CAA, 2023 that sunsets the option for self-funded non-Federal governmental plans to elect to opt out of compliance with respect to MHPAEA, so that plans that previously were exempt from the requirements as a result of an opt-out election will no longer be able to make such an election.
The Departments are finalizing as proposed the general rule with respect to the design and application requirements for NQTLs, with a few minor amendments. Accordingly, this provision clarifies that to satisfy these requirements, a plan or issuer must consider, as part of its assessment of an NQTL's compliance with the no more restrictive requirement, whether any processes, strategies, evidentiary standards, or other factors used in designing and applying the NQTL to mental health or substance use disorder benefits in the classification are comparable to, and are applied no more stringently than those used in designing and applying the limitation with respect to medical/surgical benefits in the classification. By requiring processes, strategies, evidentiary standards, or other factors used to be comparable to and applied no more stringently than, the design and application requirements
The Departments note that a plan or issuer must comply with the relevant requirements under these final rules with respect to NQTLs applicable to mental health or substance use disorder benefits once the final rules become applicable to the plan or coverage, including with respect to any NQTLs that were developed and imposed when a plan or issuer was not subject to MHPAEA and that continue to be imposed after the applicability date. However, these final rules are not applicable to an NQTL imposed with respect to mental health or substance use disorder benefits for any such prior period of time (including a period when MHPAEA was not applicable).
In these final rules, the Departments are codifying the design and application requirements at 26 CFR 54.9812-1(c)(4)(i)(A), 29 CFR 2590.712(c)(4)(i)(A), and 45 CFR 146.136(c)(4)(i)(A), rather than as proposed at 26 CFR 54.9812-1(c)(4)(ii)(A), 29 CFR 2590.712(c)(4)(ii)(A), and 45 CFR 146.136(c)(4)(ii)(A) because, as discussed earlier in this preamble, these final rules structure the design and application requirements as part of the statutory no more restrictive requirement, rather than as a unique prong of the three requirements for NQTLs included in the proposed rules. In addition, the Departments are making a technical correction by amending the regulatory text to refer to health insurance coverage, rather than an issuer, to generally use consistent terminology throughout the regulations. Finally, as noted earlier in this preamble, these final rules move the reference to 26 CFR 54.9812-1(a)(1), 29 CFR 2590.712(a)(1), and 45 CFR 146.136(a)(1) from the beginning of the general rule of the design and application requirements to the beginning of the regulatory requirements for NQTLs at 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4).
The proposed rules would add a new provision that, for purposes of determining comparability and stringency under the design and application requirements of proposed 26 CFR 54.9812-1(c)(4)(ii)(A), 29 CFR 2590.712(c)(4)(ii)(A), and 45 CFR 146.136(c)(4)(ii)(A), plans and issuers would be prohibited from relying upon any factor or evidentiary standard if the information, evidence, sources, or standards on which the factor or evidentiary standard is based discriminate against mental health or substance use disorder benefits as compared to medical/surgical benefits. The proposed rules stated that information would be considered to discriminate against mental health or substance use disorder benefits if it is biased or not objective, in a manner that results in less favorable treatment of mental health or substance use disorder benefits, based on all the relevant facts and circumstances. Such relevant facts and circumstances would include, but not be limited to, the source of the information, the purpose or context of the information, and the content of the information. Therefore, under the proposed rules, plans and issuers would not be permitted to rely on information that reflects bias, as those factors or evidentiary standards would be discriminatory.
For this purpose, the Departments stated in the proposed rules that information resulting in the less favorable treatment of mental health and substance use disorder benefits without legitimate justification or that is otherwise not objective would be considered to be biased and to discriminate against mental health and substance use disorder benefits. When determining which information, evidence, sources, or standards should inform the factors or evidentiary standards used to design or apply an NQTL, plans and issuers would not be permitted under the proposed rules to use information, evidence, sources, or standards if they are biased in favor of imposing greater restrictions on access to covered mental health and substance use disorder benefits or not objective, based on all the relevant facts and circumstances. The Departments also proposed that impartially applied independent professional medical or clinical standards and fraud, waste, and abuse measures that meet specific requirements would qualify for an exception and would not be considered to discriminate against mental health or substance use disorder benefits.
Additionally, in the preamble to the proposed rules the Departments noted that the proposed prohibition on discriminatory factors and evidentiary standards would prohibit plans and issuers from relying on historical plan data or other historical information from a time when the plan or coverage was not subject to MHPAEA or was in violation of MHPAEA's requirements, where the use of such data results in less favorable treatment of mental health and substance use disorder benefits. The Departments provided an example illustrating that a plan or issuer would not be permitted to calculate reimbursement rates based on historical data on total plan spending for each specialty that is divided between mental health and substance use disorder providers and medical/surgical providers, when the total spending by the plan was based on a time period when the plan or coverage was not subject to MHPAEA or was in violation of MHPAEA, if the data result in less favorable treatment of mental health and substance use disorder benefits. Consequently, under the framework in the proposed rules, plans and issuers could not use such data to develop a factor or evidentiary standard for the design or application of an NQTL to mental health or substance use disorder benefits. The proposed rules stated, to the extent a plan or issuer relies on any factor or evidentiary standard that discriminates against mental health or substance use disorder benefits, or any information, evidence, sources, or standards that inform such factors or evidentiary standards to design and apply NQTLs, the plan or issuer would violate the prohibition on discriminatory factors and evidentiary standards set forth in proposed 26 CFR 54.9812-1(c)(4)(ii)(B), 29 CFR 2590.712(c)(4)(ii)(B), and 45 CFR 146.136(c)(4)(ii)(B).
Many commenters expressed general support for this provision of the proposed rules. For example, one commenter noted that the prohibition on discriminatory factors and evidentiary standards would more effectively protect against the inappropriate application of NQTLs that, although appearing to be compliant with MHPAEA as written, have a disproportionately negative effect on access to mental health and substance use disorder benefits. Some commenters also indicated that the proposed provision is consistent with the text and purpose of MHPAEA, as well as the ACA, and favored a broad interpretation
Some commenters expressed concern that the proposed requirement that information must not be biased and must be objective (which is based on facts and circumstances) is too subjective, can only be determined retroactively (yet must be applied prospectively), and is too difficult to apply for plans or issuers to be certain of compliance. One commenter requested clarification on the documentation and evidence required to demonstrate the absence of bias. Another commenter expressed concern that plans may not have the ability to prove that information is unbiased and objective.
One commenter stated that it is unclear whether the Departments intend to focus on the factors and evidentiary standards themselves or on the effects of using those factors and standards. Some commenters assumed that whether a factor or evidentiary standard is discriminatory would be based on an evaluation of outcomes, and that therefore any disparity in outcomes data could be viewed as use of a discriminatory factor or evidentiary standard. These commenters requested examples of outcomes that would demonstrate compliance. In addition, many commenters requested examples of discriminatory factors and evidentiary standards and of nondiscriminatory information and data sources. Several commenters requested the Departments to make clear that plans and issuers may not establish compliance by relying on a fee schedule used by Medicare, although another commenter requested that plans and issuers be able to access a safe harbor if they paid above-Medicare rates.
After considering commenters' feedback, the Departments are finalizing the prohibition on discriminatory factors and evidentiary standards with modifications. As the Departments stated in the preamble to the proposed rules this provision will help address the concern that various factors and evidentiary standards that plans and issuers have relied on to design NQTLs with respect to mental health or substance use disorder benefits might themselves discriminate against mental health and substance use disorder benefits by treating them in a less favorable manner. At the same time, the Departments acknowledge commenters' concerns about potential ambiguities in the proposed prohibition on discriminatory factors and evidentiary standards, questions about whether this provision is duplicative of other parts of the proposed rules, and confusion about how to operationalize the prohibition.
In response to these concerns, and to assist plans and issuers in complying with the prohibition on discriminatory factors and evidentiary standards in these final rules, the Departments have modified the prohibition by providing additional clarity regarding what it means for information, evidence, sources, or standards to be “biased or not objective.” The final rules both clarify the prohibition in a manner to ensure that it can be applied prospectively and revise it to expressly provide that potentially biased or not objective information, evidence, sources, or standards can be corrected, cured, or supplemented, and then relied upon by a plan or issuer to inform a factor or evidentiary standard that is not discriminatory. The Departments also provide additional examples of discriminatory factors and evidentiary standards later in this preamble.
First, with respect to the general prohibition on discriminatory factors and evidentiary standards, these final rules at 26 CFR 54.9812-1(c)(4)(i)(B), 29 CFR 2590.712(c)(4)(i)(B), and 45 CFR 146.136(c)(4)(i)(B)
Specifically, these final rules state that a factor or evidentiary standard is discriminatory if the information, evidence, sources, or standards on which the factor or evidentiary standard are based are biased or not objective in a manner that discriminates against mental health or substance use disorder benefits as compared to medical/surgical benefits. This language is similar to that included under proposed 26 CFR 54.9812-1(c)(4)(ii)(B), 29 CFR 2590.712(c)(4)(ii)(B), and 45 CFR 146.136(c)(4)(ii)(B) but adds the phrase “is biased or not objective in a manner that,” preceding the word “discriminates.” This phrase, in conjunction with the other changes to the prohibition on discriminatory factors and evidentiary standards discussed later in this preamble, was modified in response to comments and is intended to help clarify that a plan or issuer is expected to assess whether the information, evidence, sources, or standards on which each factor or evidentiary standard are based are biased or not objective in a manner that discriminates against mental health or substance use disorder benefits as compared to medical/surgical benefits. This analysis is distinct from the final rules' requirement to compare the comparability and stringency of factors and evidentiary standards used to design and apply an NQTL.
Second, the Departments are finalizing a modified version of the provision originally proposed under 26 CFR 54.9812-1(c)(4)(ii)(B)(
The prohibition on discriminatory factors and evidentiary standards is intended to work together with the other provisions of these final rules, including the relevant data evaluation requirements. Like all the provisions of these final rules, the provision further implements the statutory requirement that NQTLs be no more restrictive with respect to mental health or substance use disorder benefits than the predominant limitations applicable to substantially all medical/surgical benefits. The test specifically focuses on the importance of ensuring that the factors and evidentiary standards relied upon by plans and issuers in designing NQTLs do not have built-in biases (at the time NQTLs are designed) against mental health or substance use disorder benefits as compared to medical/surgical benefits. To the extent plans and issuers rely upon factors and evidentiary standards to design NQTLs that systematically disfavor access or are specifically designed to disfavor access to mental health and substance use disorder benefits, the resultant NQTLs are more restrictive with respect to mental health or substance use disorder benefits than for medical/surgical benefits.
The Departments note that a factor or evidentiary standard may be based on or include information that solely relates to medical/surgical benefits (and is silent or without corollary with respect to mental health or substance use disorder benefits). Such a factor or evidentiary standard is not considered discriminatory for this purpose. For example, a plan can reasonably rely on a source of information on the clinical efficacy of a treatment or service to inform a factor used to design a medical management NQTL, even though that source does not address the clinical efficacy of any treatment of any mental health conditions or substance use disorders, without violating the prohibition on discriminatory factors and evidentiary standards. However, the use of such factor or evidentiary standard must comply with the design and application requirements, as described earlier in this preamble.
In response to comments to provide additional clarity, the final rules elaborate on the meaning of the phrase “biased and not objective in a manner that discriminates against mental health or substance use disorder benefits.” Specifically, these final rules provide that information, evidence, sources, or standards are considered to be biased or not objective in a manner that discriminates against mental health or substance use disorder benefits as compared to medical/surgical benefits if, based on all the relevant facts and circumstances, they systematically disfavor access or are specifically designed to disfavor access to mental health or substance use disorder benefits as compared to medical/surgical benefits.
For purposes of determining whether information, evidence, sources, or standards are considered to be biased or not objective under these final rules, relevant facts and circumstances may include, but are not limited to, the reliability of information, evidence, sources, or standards, including any underlying data and the independence of the information, evidence, sources, and standards relied upon. The Departments note that internal data or information, such as claims data, would generally not be considered independent, but would not necessarily be considered discriminatory on that basis alone. In the Departments' view, independence is a relevant fact and circumstance for determining whether information, evidence, sources, or standards are considered to be biased or not objective. For example, a standard that is created or funded by the plan or issuer, or its service provider, would likely lack independence compared to a standard created by an impartial third party or governmental entity, and might require strong indicators of reliability in order to demonstrate that it is objective and unbiased. Additionally, relevant facts and circumstances include the analyses and methodologies employed to select the information, evidence, sources, or standards, and the consistency of their application; and any known safeguards deployed to prevent reliance on skewed data or metrics when determining whether they are biased or not objective. The Departments note that these final rules only provide examples, and not a comprehensive list, of relevant facts and circumstances that indicate information, evidence, sources, or standards are biased or not objective. Because plans and issuers rely on myriad factors and evidentiary standards to design NQTLs for their own unique benefit designs, this evaluation necessarily will be specific to the particular plan or coverage.
Under these final rules, information, evidence, sources, and standards are not considered biased or not objective for purposes of the prohibition on discriminatory factors and evidentiary standards, if a plan or issuer has taken steps necessary to address the bias or lack of objectivity by correcting, curing, or supplementing the information, evidence, sources, or standards that would have been biased or not objective in the absence of such steps. If information, evidence, sources, or standards are corrected, cured, or supplemented, they may be used by plans and issuers as the basis for factors and evidentiary standards used to design an NQTL.
Several commenters asked about the use of a fee schedule used by Medicare and CMS-set standards, such as network time and distance standards, by a plan or issuer to inform plan design. For example, some plans use the Medicare Physician Fee Schedule
The Departments note, however, that the mere use of the Medicare Physician Fee Schedule, for example, as one type of information, evidence, source, or standard that informs a factor used to design an NQTL does not automatically
The Departments received several comments in support of the example included in the preamble to the proposed rules that illustrated the prohibition on plans' and issuers' reliance on historical plan data or other historical information from a time when the plan or coverage was not subject to MHPAEA, or not compliant with MHPAEA. Some commenters recognized that many plans and issuers have used their own historical data from a time when their plan or coverage was not subject to MHPAEA and have benefited from historic inequities in benefit structures that MHPAEA sought to prohibit. One commenter requested that this example be codified in the regulatory text of the final rules. The Departments agree that the example illustrating how the prohibition on discriminatory factors and evidentiary standards applies to the use of historical data and information to design an NQTL should be clearly set forth in the regulation text at 26 CFR 54.9812-1(c)(4)(ii)(B)(
Some commenters provided other examples that they recommended including as illustrations of discriminatory factors and evidentiary standards in these final rules, including prior authorization for a prescription of buprenorphine to treat opioid use disorder (OUD) requiring additional licensure or certification for mental health and substance use disorder providers that is not required of similar medical/surgical providers; subjecting mental health and substance use disorder claims to different fraud, waste, and abuse processes, or requiring more documentation, than for medical/surgical claims; not covering nutrition counseling for the treatment of eating disorders while covering it for medical conditions; and requiring that mental health and substance use disorder claims and appeals be filed with a TPA, but not making this clear to enrollees, nor properly coordinating operations between the plan/issuer and TPA.
However, many of these examples focus on the use of a factor to apply an NQTL to mental health and substance use disorder benefits in a manner that is not comparable or is more stringent than the use of the factor to apply an NQTL to medical/surgical benefits, or focus on the NQTL itself (rather than the discriminatory factor or evidentiary standard). The prohibition on discriminatory factors and evidentiary standards in these final rules, however, focuses on the information, evidence, sources, and standards that inform the factors and evidentiary standards used to design an NQTL. Factors and evidentiary standards that incorporate or otherwise rely on underlying data or information that systematically disfavor access or are specifically designed to disfavor access to mental health or substance use disorder benefits place a greater burden on access to such benefits. Therefore, these final rules prohibit the use of any factor or evidentiary standard to design an NQTL if the underlying information, evidence, sources, and standards are themselves biased or not objective in a manner that discriminates against mental health or substance use disorder benefits as compared to medical/surgical benefits, unless the plan or issuer takes steps to correct, cure, or supplement the information, evidence, sources and standards to address the bias or lack of objectivity.
These final rules set forth a general rule to determine which specific factors and evidentiary standards (and the information, evidence, sources, and standards on which they are based) might or might not be biased and not objective in a manner that discriminates against mental health or substance use disorder benefits as compared to medical/surgical benefits. The Departments have provided new examples in these final rules illustrating the prohibition on discriminatory factors and evidentiary standards, which are discussed later in this preamble. The Departments acknowledge that these examples are not exhaustive and may provide additional examples in future guidance.
Finally, as discussed in greater detail later in this preamble, the Departments are not finalizing the exceptions to the prohibition on discriminatory factors and evidentiary standards for independent professional medical or clinical standards and fraud, waste, and abuse measures. However, these final rules expressly clarify at 26 CFR 54.9812-1(c)(4)(i)(B)(
The Departments recognize that commenters requested specificity as to what qualifies as independent professional medical or clinical standards. To ensure that they are not biased and are objective, independent professional medical or clinical standards should reflect the standards of care and clinical practice that are generally recognized in relevant clinical specialties across a range of settings of care and should be transparent. For example, sources that include such standards could be peer-reviewed scientific studies and medical literature, formal published recommendations of Federal Government agencies, drug labeling approved by the United States Food and Drug Administration (FDA), and recommendations of relevant nonprofit health care provider professional associations and specialty societies, including, but not limited to, patient placement criteria and clinical practice guidelines. Additionally, fraud and abuse measures should be reliably established through unbiased and objective data and narrowly tailored in a manner that minimizes the negative impact on access to appropriate mental health and substance use disorder benefits.
These final rules also clarify that plans and issuers that rely on independent professional medical or clinical standards or fraud and abuse measures must comply with the general rule of the design and application requirements at 26 CFR 54.9812-1(c)(4)(i)(A), 29 CFR 2590.712(c)(4)(i)(A), and 45 CFR 146.136(c)(4)(i)(A). If such a standard or measure is used as an NQTL, the plan or issuer also must comply with the relevant data evaluation requirements at 26 CFR 54.9812-1(c)(4)(iii), 29 CFR
The proposed rules proposed to move the illustrative, non-exhaustive list of NQTLs from 26 CFR 54.9812-1(c)(4)(ii), 29 CFR 2590.712(c)(4)(ii), and 45 CFR 146.136(c)(4)(ii) to 26 CFR 54.9812-1(c)(4)(iii), 29 CFR 2590.712 (c)(4)(iii), and 45 CFR 146.136(c)(4)(iii) and make several minor changes to this list. First, the Departments proposed amendments to make clear that this illustrative list of NQTLs is non-exhaustive and that there are additional NQTLs not captured in the list. The Departments also proposed to amend the illustrative, non-exhaustive list of NQTLs to replace “[s]tandards for provider admission to participate in a network, including reimbursement rates” with “standards related to network composition, including, but not limited to, standards for provider and facility admission to participate in a network or for continued network participation, including methods for determining reimbursement rates, credentialing standards, and procedures for ensuring the network includes an adequate number of each category of provider and facility to provide covered services under the plan or coverage.” Additionally, the Departments proposed to amend the description of the illustrative NQTL “plan methods for determining usual, customary, and reasonable charges” to encompass a broader range of methods for determining out-of-network rates, such as allowed amounts; usual, customary, and reasonable charges; or application of other external benchmarks for out-of-network rates. Finally, the Departments proposed to add a specific reference to prior authorization requirements as an example of a medical management standard limiting or excluding benefits based on medical necessity or medical appropriateness, consistent with Example 1 in 26 CFR 54.9812-1(c)(4)(iii), 29 CFR 2590.712(c)(4)(iii), and 45 CFR 146.136(c)(4)(iii) of the 2013 final regulations.
Some commenters supported the clarification in the proposed rules that the illustrative list is non-exhaustive and that there are additional NQTLs not included in the list. In general, many commenters found the list to be helpful for plans and issuers to identify NQTLs. Some of these commenters pointed out that the non-exhaustive nature of the list would allow new NQTLs developed by plans and issuers to fall under the scope of the requirements in these final rules. One commenter also noted that the definition of an NQTL is sufficiently clear such that an exhaustive list would not be needed to put plans or issuers on notice of their compliance obligations.
Other commenters requested that the Departments instead provide an exhaustive list of NQTLs to eliminate uncertainty, promote consistency, and clarify plans' and issuers' compliance obligations. Several of these commenters suggested that the Departments update such an exhaustive list as new NQTLs are identified and allow adequate time for plans and issuers to come into compliance with respect to such NQTLs. Other commenters advocated for an approach where an exhaustive list of NQTLs would also represent the scope of NQTLs for which the relevant Secretary could request a comparative analysis. Some of these commenters requested that to the extent the relevant Secretary requested a comparative analysis for an NQTL not on the list, plans and issuers be provided with additional time to respond.
The Departments agree with the commenter generally stating that the definition of an NQTL under 26 CFR 54.9812-1(a), 29 CFR 2590.712(a), and 45 CFR 146.136(a), in addition to the non-exhaustive, illustrative list of NQTLs, is sufficient to put plans and issuers on notice that a given plan provision would fall under the definition of an NQTL. Therefore, the Departments are finalizing as proposed the clarification that this illustrative list of NQTLs is non-exhaustive.
The Departments decline to provide an exhaustive list of NQTLs, as requested by commenters, in these final rules; however, as described further below, the Departments may consider issuing separate guidance to add additional examples if needed. Plans and issuers, rather than the Departments, are best positioned to initially identify NQTLs, including any NQTLs that plans and issuers newly implement as their plan or coverage designs evolve over time. MHPAEA does not limit the scope of NQTLs that plans and issuers may impose on mental health and substance use disorder benefits. However, for any NQTLs applicable to such benefits, a plan or issuer must comply with MHPAEA and its implementing regulations. Any exhaustive list of NQTLs published by the Departments would likely lag behind those actually utilized by plans and issuers due to this information gap, along with the wide variability in NQTLs that exist now and could exist in the future. Furthermore, while some commonalities exist, plans and issuers generally do not use uniform nomenclature to refer to their medical management techniques or other NQTLs, making the task of identifying an exhaustive list difficult, if not impossible.
An exhaustive list of NQTLs that does not include the full scope of NQTLs utilized by plans and issuers at any given time would undermine the fundamental purpose of MHPAEA and these final rules. While the Departments acknowledge and have considered plans' and issuers' requests for a finite list of NQTLs for which the Departments may request comparative analyses, the exhaustive nature of such a list would leave open a compliance loophole by incentivizing plans and issuers to wait to evaluate, document, and address compliance for an NQTL that is newly developed or has not come to the attention of the Departments. The approach some commenters suggested to expressly limit the comparative analysis requirement under 26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR 146.137 to only those NQTLs identified in an exhaustive list is similarly untenable due to a foreseeable mismatch between the NQTLs included on such an exhaustive list, and those utilized by plans and issuers over time, particularly where the Departments may receive a complaint or have reason to believe there may be a potential violation. The Departments recognize the desire of plans and issuers to have a list of NQTLs on which the Departments will focus their enforcement efforts. The Departments highlight that the most recent reports to Congress on MHPAEA contain lists of the NQTLs on which the Departments have focused their enforcement efforts, and the NQTLs the Departments have mostly commonly found to be noncompliant.
Additionally, allowing plans and issuers to categorically have additional time to assemble a comparative analysis for NQTLs that are not on a finite list of NQTLs, as requested by commenters, would also be inconsistent with the statutory requirement that, without exception, plans and issuers perform and document such comparative analyses of NQTLs applicable to mental health or substance use disorder benefits, beginning 45 days after the enactment of the CAA, 2021, and would result in the post-hoc justifications addressed with the CAA, 2021's enactment.
The Departments received a handful of comments on the proposed expansion of the illustrative list's description of standards for provider admission to participate in a network, including reimbursement rates, to also refer to standards for provider and facility admission to participate in a network or for continued network participation, including methods for determining reimbursement rates, credentialing standards, and procedures for ensuring the network includes an adequate number of each category of provider and facility to provide covered services under the plan or coverage. Some commenters supported these proposed amendments to ensure that patients have an adequate provider network. Others suggested that parity requirements for provider networks should address the administrative burden and credentialing requirements on providers when joining networks, which may limit network adequacy. The Departments are finalizing this amendment as proposed. The Departments agree with commenters who stated that MHPAEA applies to credentialing standards, as well as the procedures to join a network, and note that methods for determining reimbursement rates, credentialing standards, and procedures for ensuring the network includes an adequate number of each category of provider and facility to provide services under the plan or coverage are intended to be interpreted broadly, consistent with the fundamental purpose of MHPAEA. Because these final rules do not retain the proposed mathematical substantially all and predominant tests, the illustrative list appears in these final rules at 26 CFR 54.9812-1(c)(4)(ii), 29 CFR 2590.712(c)(4)(ii), and 45 CFR 146.136(c)(4)(ii) instead of 26 CFR 54.9812-1(c)(4)(iii), 29 CFR 2590.712(c)(4)(iii), and 45 CFR 146.136(c)(4)(iii) as in the proposed rules.
In the proposed rules, the Departments proposed to amend the 2013 final regulations to add a requirement that, when designing and applying an NQTL, a plan or issuer must collect and evaluate relevant data in a manner reasonably designed to assess the impact of the NQTL on access to mental health and substance use disorder benefits and medical/surgical benefits, and consider the impact as part of the plan's or issuer's analysis of whether the NQTL, in operation, complies with the proposed no more restrictive requirement and the design and application requirements. The proposed rules included the general types of data that plans and issuers would have to collect and evaluate with regard to all NQTLs and additional data sets that would have to be collected and evaluated for NQTLs related to network composition standards. To the extent the relevant data collected and evaluated by the plan or issuer show material differences in access to mental health benefits and substance use disorder benefits as compared to medical/surgical benefits, under the proposed rules, the differences would be considered a strong indicator that the plan or issuer violated the proposed rules. In these instances, a plan or issuer would be required to take reasonable action to address any material differences in access as necessary to ensure compliance, in operation, with proposed 26 CFR 54.9812-1(c)(4)(i) and (ii), 29 CFR 2590.712(c)(4)(i) and (ii), and 45 CFR 146.136(c)(4)(i) and (ii), and would also be required to document the action that has been or is being taken by the plan or issuer to mitigate any material differences in access in the plan's or issuer's comparative analysis for the NQTL in that classification.
Additionally, the Departments noted in the preamble to the proposed rules their concerns about standards related to network composition and other related NQTLs. Specifically, the Departments noted that network composition is the result of the design and application of myriad NQTLs and is informed by various processes, strategies, evidentiary standards, and other factors, many of which interact in complex ways. The Departments also expressed concern that NQTLs related to network composition inherently impact a participant's or beneficiary's access to mental health and substance use disorder benefits. Accordingly, the proposed rules included a special rule applicable to NQTLs related to network composition. Specifically, under the proposed rules, when designing and applying one or more NQTLs related to network composition standards, a plan or issuer would fail to meet the requirements of proposed 26 CFR 54.9812-1(c)(4)(i) and (ii), 29 CFR 2590.712(c)(4)(i) and (ii), and 45 CFR 146.136(c)(4)(i) and (ii), in operation, if the relevant data show material differences in access to in-network mental health benefits and substance use disorder benefits as compared to in-network medical/surgical benefits in a classification.
The Departments also proposed that plans and issuers would not be required to comply with the relevant data evaluation requirements for NQTLs that impartially apply independent professional medical or clinical standards. However, proposed 26 CFR 54.9812-1(c)(4)(iv)(D), 29 CFR 2590.712(c)(4)(iv)(D), and 45 CFR 146.136(c)(4)(iv)(D) did not provide a comparable exception for fraud, waste, and abuse measures, as the Departments stated these tools, while important, are more likely to result in NQTLs that improperly restrict access to mental health or substance use disorder benefits and therefore the impact of those NQTLs should be assessed.
The Departments received many comments expressing general support for the proposal to require plans and issuers to collect and evaluate relevant data to assess an NQTL's impact on
Other commenters stated that requiring plan sponsors to evaluate outcomes data to determine whether access to mental health and substance use disorder benefits is in parity with access to medical/surgical benefit is not supported by the statute and stated this provision of the proposed rules would be a significant departure from previous guidance under MHPAEA, under which the Departments stated that outcomes are not determinative of compliance. These commenters also stated that, because not all NQTLs are quantifiable, data metrics should not be required to determine parity, and disagreed with the Departments' interpretation of the term “in operation” as the basis for the requirement that plans and issuers measure outcomes. The Departments also received many comments on the various components and specific comment solicitations related to the relevant data evaluation requirements in the proposed rules.
The determination of whether an NQTL is “more restrictive,” within the meaning of the statute, as applied to mental health and substance use disorder benefits, cannot be divorced from the impact the NQTL has on access to these benefits. Accordingly, the Departments are finalizing the relevant data evaluation requirements, with some modifications based on the comments. These final rules require that plans and issuers be attentive to the impact of their NQTLs, in operation, by collecting and evaluating relevant data in a manner reasonably designed to assess the impact of the NQTL on relevant outcomes related to access, and carefully considering the impact as part of the plan's or issuer's evaluation.
For this purpose, the term “relevant data” under these final rules is meant to be interpreted broadly but does not require a plan or issuer to collect and evaluate duplicative or overlapping data that reflect the same analysis. The obligation is to collect and evaluate relevant data in a manner reasonably designed to assess the impact of NQTLs. It is not a requirement to exhaustively survey all available data, nor a requirement that plans and issuers evaluate additional data that is duplicative or unlikely to change the determination of whether there is a material difference in access to mental health and substance use disorder benefits as compared to medical/surgical benefits. However, as discussed later in this preamble, a plan or issuer may be required to collect and evaluate more than one form of data to assess the aggregate impact of the NQTL (or NQTLs as related to network composition). For example, under these final rules, to assess the aggregate impact of NQTLs related to network composition, a plan or issuer could evaluate, as appropriate, in-network and out-of-network utilization rates (including data related to provider claim submissions), network adequacy metrics (including time and distance data, and data on providers accepting new patients), and provider reimbursement rates (for comparable services and as benchmarked to a reference standard).
Further, a plan's or issuer's data collection and evaluation approach will not be considered to be conducted in a manner reasonably designed to assess the impact of an NQTL on relevant outcomes related to access to mental health and substance use disorder benefits and medical/surgical benefits if the plan or issuer does not consider data that it knows or reasonably should know suggest that the NQTL is associated with a material difference in access. The Departments expect that, in designing their data collection and evaluation approach, plans and issuers will consider outcomes data as necessary to assess the impact of the NQTL on access to mental health and substance use disorder benefits and medical/surgical benefits in the same classification. As explained later in this preamble, the plan's or issuer's evaluation of this data must be included as part of the comparative analysis of the NQTL. The Departments may require a plan or issuer to submit additional information to ensure that plans and issuers do not only collect and evaluate the impact of some relevant data, while disregarding other relevant data that is reasonably available and suggests the NQTL contributes to material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits.
The statutory language requires that a plan or issuer ensure that the treatment limitations (quantitative or nonquantitative) themselves that are applicable to mental health or substance use disorder benefits “are no more restrictive than the predominant treatment limitations applied to substantially all medical and surgical benefits covered” by the plan (or coverage).
As stated in the preamble to the proposed rules, it is necessary to review and consider quantitative outcomes data to ascertain how the NQTL functions in the context of the plan's or issuer's administration and provision of benefits.
The proposed rules identified types of relevant data that plans and issuers would be required to collect and evaluate for all NQTLs in each individual comparative analysis. Under the proposed rules, relevant data for all NQTLs would include, but would not be limited to, the number and percentage of claims denials and any other data relevant to the NQTL as required by State law or private accreditation standards. Additionally, relevant data for network composition NQTLs would include, but would not be limited to, in-network and out-of-network utilization rates (including data related to provider claim submissions), network adequacy metrics (including time and distance data, and data on providers accepting new patients), and provider reimbursement rates (including as compared to billed charges). The proposed rules further provided that the Departments may specify the type, form, and manner for the relevant data evaluation requirements in future guidance.
Many commenters supported the required use of data outcomes as proposed. Several commenters noted that many plans and issuers do not have access to the data they would need to comply with the relevant data evaluation requirements. Specifically, the Departments received several comments regarding limited access to data held by service providers, highlighting inconsistencies in service providers' willingness or ability to provide data and the extensive systems changes and expenses necessary to allow data to be provided. Some commenters suggested that, because plan sponsors do not have access to complete and reliable sets of claims data, the final rules should specify that a plan or issuer can meet its obligations related to the relevant data evaluation requirements by requesting access to data, documenting such requests, and advising service providers that their refusal to provide data will be relayed to the Departments.
Some commenters suggested the Departments issue the “type, form, and manner of collection and evaluation” for the relevant data evaluation requirements in guidance that can be periodically updated. Other commenters suggested that the final rules provide an exception from the relevant data evaluation requirements for NQTLs for which no such data are reasonably available, and that data evaluation be required only for outcomes that can be reasonably measured. One of these commenters highlighted that many NQTLs, including certain types of medical management techniques, assessments related to medical necessity, and exclusions for experimental/investigational treatments, are not generally associated with claims. Some commenters requested that the Departments provide an exhaustive list of a uniform set of outcomes data that plans and issuers are required to collect and assess as part of their comparative analysis with respect to an NQTL.
Commenters suggested additional or different types of data that should be considered relevant data and that could be provided by plans and issuers, as well as their service providers, including the percentage of in-network claims covered vs. those submitted; time and distance data that includes virtual or telehealth visits; median in-network payments as compared to Medicare rates for inpatient benefits, office visits, and outpatient benefits; member satisfaction, as reported by standardized surveys such as the Consumer Assessment of Healthcare Providers and Systems program; and allowed amounts for certain specific Current Procedural Terminology (CPT) codes for various types of mental health and substance use disorder and medical/surgical providers. Many commenters suggested that relevant data include the number of authorizations issued for participants and beneficiaries for each of the levels (and sub-levels) of care described in the American Society for Addiction Medicine (ASAM) criteria and the age-specific Level of Care Utilization Services family of criteria. Some of these commenters also suggested outcomes data be reported separately for both mental health and substance use disorder services. Another commenter also suggested that relevant data include the number and percentage of drugs subject to prior authorization and step therapy (as an alternative to claims denials for the prescription drug classification), turnaround time for prior authorization, and inter-rater reliability. One commenter suggested using, as a parity indicator, a ratio of mental health utilization to primary care (for both initial and follow-up services) using data from the Medical Expenditure Panel Survey. Some commenters requested that, for fully insured coverage, the relevant data evaluation requirements apply at the issuer or “product” level instead of the “plan” level (as those terms are defined in 45 CFR 144.103),
Some commenters objected to the proposal to require the collection and evaluation of out-of-network utilization data for NQTLs related to network composition, stating that high out-of-network utilization of mental health and substance use disorder services alone does not necessarily indicate a network access deficiency and could instead be the product of other factors, such as a patient's preference to use a particular provider. One commenter suggested requiring the collection and evaluation of provider-to-enrollee ratio data, and another commenter expressed support for requiring the collection and evaluation of data on whether in-network providers are accepting new patients. Some commenters expressed support for the collection and evaluation of data on appointment wait times, time and distance data, types and numbers of mental health and substance
After review of the comments, the Departments decline to provide a list of all relevant outcomes data required to be collected and evaluated by plans and issuers at this time; however, the Departments intend to issue in future guidance the type, form, and manner of collection and evaluation for the data required and the lists of examples of data that are relevant across the majority of NQTLs,
While, as discussed earlier in this preamble, commenters provided various suggestions for relevant outcomes data to be collected and evaluated, many comments also suggested that what data are considered relevant depends on the nature of an NQTL. The Departments agree and intend to issue future guidance to help ensure that the data required to be collected and evaluated under the relevant data evaluation requirements of these final rules provide a meaningful representation of whether a plan or issuer is improperly applying an NQTL under MHPAEA. In developing this guidance, the Departments intend to take into consideration the feedback received regarding relevant data elements.
Until additional guidance is provided, the Departments expect a plan or issuer with a typical plan or coverage design will collect and evaluate certain data that are likely to be relevant for the majority of NQTLs under the relevant data evaluation requirements. As the relevant data for any given NQTL will depend on the facts and circumstances of the NQTL at issue and the circumstances under which the NQTL was designed and applied, these final rules provide some flexibility for plans and issuers to determine what relevant data should be collected and evaluated, as appropriate.
Under these final rules, relevant data for the majority of NQTLs could include, as appropriate, but are not limited to, the number and percentage of claims denials in a classification of benefits and any other data relevant to the NQTL required by State law or private accreditation standards. However, the Departments note that these final rules do not mandate that plans or issuers use private accreditation standards or evaluate data under State laws to which they are not subject. In addition, relevant data for a typical plan or coverage might include utilization data for mental health and substance use disorder services and medical/surgical services. For NQTLs such as prior authorization, relevant data could include rates of approvals and denials of prior authorization requests, rates of denials of post-service claims, application of penalties for a failure to obtain prior authorization, and turnaround times for prior authorization requests. Such information could be provided for benefits subject to prior authorization in each benefit classification in which the NQTL is imposed on mental health and substance use disorder benefits and medical/surgical benefits. All such examples of relevant data are non-exhaustive and whether any particular type of data is relevant for a plan or coverage is based on each plan's or coverage's unique design.
Relevant data for NQTLs related to network composition standards could include, as appropriate, but are not limited to, in-network and out-of-network utilization rates (including data related to provider claim submissions); network adequacy metrics (including time and distance data, and data on providers accepting new patients); and provider reimbursement rates (for comparable services and as benchmarked to a reference standard). The Departments modified this illustrative list of relevant data for NQTLs related to network composition by specifying that provider reimbursement rates should be analyzed for comparable services and as benchmarked to a reference standard, to better ensure that comparisons between access to mental health and substance use disorder benefits and medical/surgical benefits will be informative. Thus, for example, the Departments expect a plan or issuer with a typical plan or coverage design could look at the ratio of inpatient, in-network and outpatient, in-network mental health and substance use disorder and medical/surgical claims, as compared to inpatient, out-of-network and outpatient, out-of-network mental health and substance use disorder and medical/surgical claims. Plans and issuers could also look at the number of providers (or facilities) within specified mental health and substance use disorder and medical/surgical provider categories (or categories of facilities) per 1,000 participants and beneficiaries who have actively submitted claims within the past 6 months, which would reflect the experience of a plan's or issuer's participants and beneficiaries within a recent period of time, controlled for plan or issuer size. Additionally, a plan or issuer could look at the turnaround time for applications to be approved for a provider to join the plan's or issuer's network and the approval and denial rates for applications submitted by mental health and substance use disorder providers as compared to medical/surgical providers. The Departments recognize that providers may differ in education, training, and specialization, and the categories of mental health and substance use disorder and medical/surgical providers for which data is compared should take this into account. Additionally, relevant data could include the percentage of participants and beneficiaries who can access, within a specified time and distance by county-type designation, one (or more) in-network providers who are available to accept new patients for mental health and substance use disorder and medical/surgical provider categories. Relevant data for NQTLs related to network composition could also include median in-network reimbursement rates for services with the same CPT codes, as well as median in-network reimbursement rates for inpatient mental health and substance use disorder benefits and medical/surgical benefits, as compared to Medicare rates; and median in-network reimbursement rates for outpatient mental health and substance use
The Departments have the authority to request data—in addition to what a plan or issuer determines to be relevant data for any particular NQTL and includes in its comparative analyses—to sufficiently analyze the plan's or issuer's assertions, pursuant to the applicable enforcement statutes and as permitted by the amendments made by the CAA, 2021 to the Code, ERISA, and the PHS Act.
The Departments understand that many plans and issuers rely on TPAs and other service providers to administer a group health plan or health insurance coverage and acknowledge that several commenters highlighted the difficulty plans and issuers sometimes face obtaining the necessary information from their service providers to perform and document their comparative analyses. However, other commenters highlighted categories of data that TPAs and other service providers are able to provide for purposes of the relevant data evaluation requirements. Plans and issuers remain responsible for compliance with MHPAEA, and for ERISA-covered group health plans, fiduciaries, including TPAs or other service providers who are acting as fiduciaries, must work with plan sponsors and issuers to ensure that the plans and coverage they help establish and administer comply with the law. In the preamble to the proposed rules, the Departments highlighted that, under ERISA, TPAs may be fiduciaries with respect to private sector, employment-based group health plans. To the extent these TPAs are fiduciaries for those plans, they are subject to the provisions governing fiduciary conduct and liability, including the provisions for co-fiduciary liability under ERISA section 405. The Departments also noted their commitment to using all available authority to ensure compliance by plans and issuers with MHPAEA and requested specific comments on how best to ensure all the entities involved in the design and administration of a group health plan's benefits provide the necessary information to plans and issuers to support their efforts to comply with MHPAEA.
Some commenters requested that the Departments require that plan sponsors include MHPAEA compliance provisions in their contracts with TPAs, likening such a requirement to actions taken by HHS to require that covered entities include provisions in their contracts with outside entities related to obligations under the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule. Others suggested focusing on compliance at the service provider level and working with Congress to obtain the ability to issue civil monetary penalties for violations of MHPAEA.
The Departments decline to make any changes in these final rules to specifically address these issues after consideration of the suggestions contained in the comments. These proposals, including requiring the inclusion of contracting provisions similar to HIPAA “business associate agreements,” would go beyond the scope of this rulemaking. However, these types of contract provisions are a best practice that could be helpful to many plans and issuers in complying with their obligations to perform and document comparative analyses of NQTLs applied to mental health or substance use disorder benefits and medical/surgical benefits.
Additionally, DOL also underscores its commitment to holding fiduciaries of ERISA-covered group health plans liable through existing means and working with all relevant entities, including service providers, to effectuate MHPAEA compliance. DOL remains committed to its current enforcement approach, which prioritizes potential violations that affect not just one plan or coverage, but hundreds or thousands of plans that provide coverage for thousands or millions of individuals. Where NQTL violations are identified in a plan or coverage, DOL generally examines the role that each of the plan's or issuer's service providers have in the design and administration of each NQTL to ascertain whether any of the service providers play a similar role serving other plans or issuers that might have the same violations, and seeks to bring them into compliance. Where necessary, DOL determines who is a fiduciary under ERISA and what additional enforcement actions are necessary. DOL notes that determinations of fiduciary liability are often based on the facts and circumstances specific to individual cases, but to the extent a TPA exercises discretionary authority or discretionary responsibility in the administration of an ERISA-covered health plan, DOL generally considers them to be fiduciaries.
The Departments acknowledge both the challenges, cost, and complexity of collecting and evaluating data and the importance of data to measure the impact of an NQTL on access. The Departments also understand the importance of performing and documenting comparative analyses consistent with the statute. Therefore, these final rules provide additional provisions on how to comply with the relevant data evaluation requirements for an NQTL newly imposed by a plan or issuer or an NQTL where no data exist that can reasonably assess any relevant impact of the NQTL on access. A rule of construction at 26 CFR 54.9812-1(c)(4)(iii)(A)(
The Departments recognize that there may be a lag between when an NQTL is newly designed and applied and when relevant data are available if there are no data available initially to assess the NQTL's impact on access to mental health and substance use disorder benefits and medical/surgical benefits. Under these final rules, if a plan or issuer newly imposes an NQTL (including because the plan or coverage itself is newly offered) for which data are initially and temporarily unavailable, and the plan or issuer therefore cannot comply with the relevant data evaluation requirements for the NQTL, a plan or issuer must include in its comparative analysis a detailed explanation of the lack of relevant data, the basis for the plan's or
These final rules also acknowledge that some limited circumstances may exist in which no data exists that can reasonably assess any relevant impact of an NQTL on access to mental health and substance use disorder benefits as compared to medical/surgical benefits. Such NQTLs might include, in certain circumstances, for example, some exclusions based on whether a treatment is experimental or investigative. As commenters have highlighted, these NQTLs are not generally attached to claims, so plans and issuers may not have reliable data on the impact of these excluded services with respect to participants and beneficiaries. In the limited circumstances where no relevant data exist relating to an NQTL, these final rules require the plan or issuer to include in its comparative analysis a reasoned justification as to the basis for its conclusion that there are no data that can reasonably assess the NQTL's impact, why the nature of the NQTL prevents the plan or issuer from reasonably measuring its impact, an explanation of what data was considered and rejected, and documentation of any additional safeguards or protocols used to ensure that the NQTL complies with MHPAEA. A plan or issuer also must comply with the relevant data evaluation requirements as soon as practicable if the plan or issuer becomes aware (or reasonably should become aware) of data that can reasonably assess any relevant impact of the NQTL.
The Departments also note that the unavailability of data for purposes of the relevant data evaluation requirements of these final rules does not affect the plan's or issuer's obligation to comply with the design and application requirements.
Under the proposed rules, to the extent the relevant data evaluated show material differences in access to mental health and substance use disorder benefits as compared to medical/surgical benefits, the differences would be considered a strong indicator that the plan or issuer has violated the proposed no more restrictive requirements or the design and application requirements. In such instances, the proposed rules would require plans and issuers to take reasonable action to address the material differences in access as necessary to ensure compliance, in operation, with the proposed no more restrictive requirement and design and application requirements, and document the action that has been or is being taken by the plan or issuer to address any material differences in access to mental health and substance use disorder benefits as compared to medical/surgical benefits. The Departments stated in the preamble to the proposed rules that material differences alone would not automatically result in a finding of noncompliance, except where related to network composition, as discussed in more detail later in this preamble.
Some commenters supported the proposal that material differences in access would constitute a strong indicator of noncompliance, stating that such approach is a reasonable method to identify potential instances of noncompliance while allowing for instances where disparities in access are due to factors beyond the plan's or issuer's control. Several commenters opposed the proposal that material differences would constitute a strong indicator of noncompliance, stating that this would be inconsistent with the Departments' previous statements in the 2020 MHPAEA Self-Compliance Tool that negative outcomes data is a red flag, but not determinative of compliance. One commenter stressed that it was important to provide clarity on how the Departments would impose this standard.
Several commenters requested that the Departments define the term “material differences,” and many commenters provided suggested meanings for the term. A number of commenters requested that the term be defined as a serious or significant variation, or one that would have a major effect on access to care. One commenter suggested that the definition of material differences should set a high standard to identify clear outliers and major differences in access rather than moderate variations. Some commenters stated that any definition of material differences in access should be based only on statistical significance. One commenter suggested a 10-percent difference as the definition of a material difference. Other commenters requested that the Departments adopt a “de minimis” standard, rather than a material differences in access standard. Additionally, some commenters suggested that material differences in access should mean that a substantial number of members could not access mental health and substance use disorder benefits. Several other commenters suggested that material differences be defined to allow an acceptable level of difference in access to mental health and substance use disorder benefits as compared to medical/surgical benefits, accounting for participant behavior as a driver of accessibility, with consideration of data credibility and the amount of available data. Another commenter highlighted that relevant factors should include the size of the data pool, variability over time, availability of complementary measures, and the degree of control.
Some commenters suggested that differences in data outcomes might result from a wide variety of reasons that do not indicate noncompliance, including random variability, provider or member behavior, changes to unrelated Federal or State laws, or other factors that are outside of the plan's or issuer's control. One commenter requested that plans and issuers be permitted to take into account relevant context (for example, there are many more drugs that are considered medical/surgical benefits than mental health and substance use disorder benefits, so the percentage of mental health and substance use disorder drugs to which NQTLs apply may be higher).
The Departments are finalizing language specifying that, to the extent the relevant data evaluated suggest that the NQTL contributes to material differences in access to mental health and substance use disorder benefits as compared to medical/surgical benefits in a classification, such differences will be considered a strong indicator that the plan or issuer is in violation of MHPAEA. The material differences standard reflects an interpretation of the
The Departments emphasize that the material differences standard works together with the other requirements contained in these final rules. A plan or issuer cannot determine whether an NQTL applied to mental health or substance use disorder benefits is more restrictive than the predominant NQTL applied to substantially all medical/surgical benefits without evaluating the effect of imposing the NQTL on access to mental health and substance use disorder benefits as compared to medical/surgical benefits. Additionally, when the plan or issuer knows or should know that one or more of its NQTLs is contributing to material differences in access, it cannot simply disregard or avoid ascertaining that information, and continue its current practices, but instead must act consistent with its obligation to ensure that NQTLs applied to mental health and substance use disorder benefits generally are no more restrictive than those applied to medical/surgical benefits.
While the preamble to the 2013 final regulations stated that “[d]isparate results alone do not mean that the NQTLs in use do not comply with these requirements,”
These final rules, as discussed later in this preamble, make clear that plans and issuers must consider whether such material differences exist, and whether the differences are attributable to the NQTL. In instances where the relevant data suggest that the NQTL contributes to material differences, these final rules require plans and issuers to take reasonable action, as necessary, to address the material differences and to document that such action has or will be taken to ensure compliance, in operation, with the requirements for NQTLs under these final rules.
This increased emphasis on outcomes data and the material differences standard will help ensure that more restrictive NQTLs are not imposed on mental health and substance use disorder benefits as compared to the predominant NQTLs applied to substantially all medical/surgical benefits in the same classification by identifying when an NQTL results in differences in access that are likely to have a negative impact on access to mental health or substance use disorder benefits as compared to medical/surgical benefits. This standard generally would not include a de minimis difference in access or a difference driven by an outlier, such as a single plan participant's claims experience or a single claim. The Departments also note that the existence of material differences in access do not automatically result in a finding of noncompliance, and that plans and issuers will continue to have the opportunity provide additional information as part of the NQTL comparative analysis process, as well as to respond to the Departments in any enforcement actions, by submitting additional data, the sources of the data, explanatory material, related documents, evidence of reasonable actions that have been or are being taken by the plan or issuer to address such differences, and other material and information to demonstrate compliance with MHPAEA.
The Departments acknowledge comments from plans and issuers asking for guidance on how to determine whether a difference is material for purposes of the relevant data evaluation requirements, as well as those asking for a principle-based approach rather than specific thresholds for each outcome measure, because what is material will likely vary by NQTL, market, plan, and benefit classification for each item or service, as well as the number of participants and beneficiaries affected. In these final rules, the Departments set forth a standard that takes into account the range of commenters' suggestions and incorporates them into a single standard, while helping to ensure that participants' and beneficiaries' access to mental health and substance use disorder benefits is in parity with their access to medical/surgical benefits.
Specifically, under these final rules, relevant data are considered to suggest that the NQTL contributes to material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits if, based on all relevant facts and circumstances, and taking into account specific considerations,
The Departments are of the view that the quality or limitations of the relevant data are a key consideration in determining whether a difference in the data suggests that an NQTL contributes to a material difference in access to mental health and substance use disorder benefits as compared to medical/surgical benefits. As discussed earlier in this preamble, the Departments acknowledge the difficulty some plans and issuers may face in obtaining the necessary information, including data, from their service providers to perform and document their comparative analyses. The Departments are also aware that plans and issuers might not have direct control over the quality of the data they receive from a service provider. Despite this, the Departments do not intend for this consideration to create a loophole that allows plans and issuers to avoid determining materiality when evaluating differences in relevant data. Rather, the Departments expect plans and issuers to consider the quality and limitations of any available relevant data as just one of multiple potential facts and circumstances when assessing the impact of an NQTL on access to mental health and substance use disorder benefits and medical/surgical benefits.
When considering causal explanations and analyses in determining whether a difference in the data suggests that an NQTL contributes to a material difference in access, plans and issuers should consider whether they are attributable to the NQTL, instead of being attributable to other factors or considerations. As discussed in more detail later in this preamble, a plan's or issuer's comparative analysis for an NQTL applicable to mental health and substance use disorder benefits and medical/surgical benefits must include a discussion of the actions that have been or are being taken by the plan or issuer to address any material differences in access. This discussion must include, as applicable, a reasoned explanation of any considerations beyond a plan's or issuer's control that contribute to the existence of material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits, including those that result in the persistence of such material differences despite reasonable actions that have been or are being taken to address such differences by the plan or issuer.
For example, if a plan or issuer identifies, based on reliably established indicia of fraud and abuse, that a particular provider or facility has submitted fraudulent claims for mental health or substance use disorder benefits, resulting in a higher percentage of denials of claims for mental health or substance use disorder benefits than for medical/surgical benefits in the same classification, the evidence of fraud and abuse could be considered part of the relevant facts and circumstances for purposes of determining whether a material difference in access exists. Further, if a material difference in access exists, the evidence of fraud and abuse could also be considered part of the relevant facts and circumstances for purposes of determining whether the difference is attributable to the NQTL. In such a case, the plan or issuer might reasonably conclude that the difference in outcomes is attributable to higher underlying levels of fraud for mental health and substance use disorder benefits than for medical/surgical benefits in the same classification (with the commission of the fraud being a circumstance that is beyond the plan's or issuer's control), rather than the application of a more restrictive NQTL to mental health or substance use disorder benefits. As explained later in this preamble, under these final rules, the plan or issuer must include in its comparative analysis a reasoned explanation of the reliably established indicia of fraud and abuse beyond the plan's or issuer's control that contribute to the existence of material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits.
The Departments note that a difference in access to mental health or substance use disorder benefits as compared to medical/surgical benefits that is driven by an outlier, such as a single plan participant's claims experience or a single claim, will generally not be considered material for this purpose because the nature of the results of the evaluation of relevant data would not be considered recurring. Therefore, such a difference would not trigger the requirement to take reasonable action, as necessary, under these final rules.
In the preamble to the proposed rules, the Departments solicited comments on whether materiality should be defined in terms of the results of statistical testing and requested feedback from interested parties on the optimal method for assembling data and statistical analysis. As highlighted earlier in this preamble, commenters requested that the definition of material differences account for statistically significant differences, and take into account the amount of available data, while also excluding differences related to random variability. The Departments are of the view that plans and issuers can explain in their comparative analyses whether differences are or are not statistically significant and why, based on the relevant facts and circumstances, such differences are determined to be or not to be material. However, the Departments also recognize that statistical significance might not always be appropriate to consider, and that there would be challenges with requiring plans and issuers to use a statistical analysis in determining whether material differences in access exist for all NQTLs, as well as whether and how those differences are attributable to the NQTL or NQTLs in question.
Plans and issuers should carefully consider the magnitude of any negative impact on access to mental health or substance use disorder benefits as compared to medical/surgical benefits and whether the relevant data therefore suggest an NQTL contributes to a material difference in access that might require the plan or issuer to take reasonable action, as necessary, to ensure compliance, in operation, with the requirements for NQTLs under these final rules. As noted earlier in this preamble, a difference in access to mental health or substance use disorder benefits as compared to medical/surgical benefits that is de minimis will not be considered material for purposes of the relevant data evaluation requirements. The size of any negative impact on access, even if small, is part of the relevant facts and circumstances that could determine whether a disparity in access is material. These final rules do not require a plan or issuer to obtain a statistical, actuarial, or other equivalent opinion to support a conclusion as to whether a difference in access demonstrated by relevant data is material, based on the relevant facts and
In these final rules, the Departments decline to finalize the proposed exception to the relevant data evaluation requirements for independent professional medical or clinical standards, as discussed later in this preamble. The Departments are of the view that plans and issuers that impose NQTLs that utilize such standards as the basis for, or as, factors or evidentiary standards, should collect and evaluate relevant data, to determine the impact of NQTLs developed or applied using these standards on access to mental health and substance use disorder benefits as compared to medical/surgical benefits. However, reliance on such standards can improve care and health outcomes for participants and beneficiaries. The Departments also recognize that clinical differences between mental health conditions, substance use disorders, medical conditions, and surgical procedures may sometimes drive apparent differences in data outcomes, even where plans and issuers rely on independent professional medical or clinical standards. Therefore, under these final rules, differences in access to mental health or substance use disorder benefits attributable to generally recognized independent professional medical or clinical standards that are used as the basis for a factor or evidentiary standard used to design or apply an NQTL are not considered to be material. To the extent a plan or issuer attributes any differences in access to the application of such standards, the plan or issuer must explain its bases for that conclusion in the plan's or issuer's comparative analysis, as discussed later in this preamble.
The Departments did not propose that NQTLs related to fraud, waste, and abuse measures would be excepted from the relevant data evaluation requirements. However, as discussed earlier in this preamble, reliably established indicia of fraud and abuse could, if appropriate, be considered relevant facts and circumstances taken into account by a plan or issuer when determining whether a difference in access is material. Indicia of fraud and abuse could also be relevant in determining whether a material difference in access is attributable to an NQTL or, instead, is attributable to the use of fraud and abuse measures. Therefore, under these final rules, a difference in access to mental health or substance use disorder benefits attributable to carefully circumscribed measures reasonably and appropriately designed to detect or prevent and prove fraud and abuse that minimize the negative impact on access to appropriate mental health and substance use disorder benefits are not considered to be material. As discussed later in this preamble, in such a case, a plan's or issuer's comparative analysis must provide a thorough and reasoned explanation that indicia for fraud and abuse have been reliably established through objective and unbiased data, and that such measures are narrowly designed to minimize the negative impact on access to appropriate mental health and substance use disorder benefits as compared to medical/surgical benefits in the same classification.
The proposed rules provided that a plan or issuer would be required to take reasonable action to address any material differences in access as necessary to ensure compliance, in operation, with the proposed no more restrictive requirement and design and application requirements. The preamble to the proposed rules noted that whether any particular action would be considered reasonable in response to any material differences in access resulting from an evaluation of outcomes data would be determined based on the relevant facts and circumstances, including the NQTL itself, the relevant data, the extent of the material differences in access to mental health and substance use disorder benefits as compared to medical/surgical benefits, and the impact of the material differences in access on participants and beneficiaries. The Departments proposed that, in addition to taking reasonable action to address material differences, a plan or issuer would also be required to document in its comparative analyses any such action that has been or is being taken by the plan or issuer to mitigate any material differences in access to mental health and substance use disorder benefits as compared to medical/surgical benefits. The Departments noted in the preamble to the proposed rules that plans and issuers could use this documentation to explain why material differences demonstrated by the relevant outcomes data should not be considered a violation of the rules for NQTLs (other than NQTLs related to network composition) and solicited comments on what additional information is necessary to clarify what would constitute reasonable action in response to relevant data that reveal material differences in access.
Several commenters supported the requirement to take reasonable action in response to relevant data that reveals material differences in access. Some commenters suggested that “reasonable action” should be defined and should mean actions, including, but not limited to, internal reforms and modifications or elimination of the NQTL to resolve the material differences. One commenter stated that requiring reasonable action where there is no violation of the law and without an opportunity to explain why material differences in access may not in fact be a violation of MHPAEA is arbitrary and capricious and goes beyond the authority of the Departments. Therefore, the commenter noted reasonable action should be
Under these final rules, when a plan or issuer knows or reasonably should know that NQTLs may be contributing to material differences in access, it must take reasonable action, as necessary, to ensure compliance, in operation, with the requirements for NQTLs under these final rules. The standard is not focused on inconsequential differences, but rather only on those that are material, meaning those that are likely to have a negative impact on access to mental health or substance use disorder benefits as compared to medical/surgical benefits. If a plan or issuer is aware of information that suggests a potential violation of MHPAEA, the statute requires the plan or issuer to address such potential violations as necessary to satisfy its obligation to ensure that the NQTLs comply with the substantive requirements of the statute,
The proposed rules would have required plans and issuers to take reasonable action to address material differences in access as necessary to ensure compliance, in operation, with the proposed no more restrictive requirement and design and application requirements. However, as discussed earlier in this preamble, these final rules do not retain the proposed mathematical substantially all and predominant tests and instead retain language that incorporates the statutory requirements of Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A), and PHS Act section 2726(a)(3)(A), as the general rule for NQTLs. Therefore, these final rules make technical changes to replace the cross-references in the material differences standard to the proposed no more restrictive requirement and design and application requirements, and replace them with a cross-reference to the general rule for NQTLs.
The Departments acknowledge commenters' requests for guidance on what constitutes reasonable action for this purpose. The Departments anticipate that, in many cases, the reasonable actions that plans and issuers might take, as necessary, to address material differences in access will be similar to actions they might have taken independent of the requirements contained in these final rules. For example, some plans and issuers may already take certain action in response to changes in demand for services, needs of patients, or requests from plan sponsors, which could be considered reasonable action for this purpose, depending on the relevant facts and circumstances. Commenters highlighted that, since the enactment of MHPAEA, plans and issuers have increased spending and raised reimbursement rates for mental health and substance use disorder services, and invested in programs to help members identify mental health and substance use disorder care needs and to connect them to the appropriate services as early as possible. Commenters also highlighted that plans and issuers have also developed mental health assessment screening tools for youth populations to detect those at risk. Depending on the facts and circumstances, all of these actions could be examples of reasonable actions that plans and issuers can take, as necessary, where the relevant data suggest that an NQTL contributes to material differences, as required under these final rules. However, plans and issuers will ultimately be responsible for assessing the nature of a material difference in access to determine what reasonable action should be taken, as necessary, to address those differences.
In addition, a plan or issuer must document the actions that have been or are being taken in the plan's or issuer's comparative analysis and include a reasoned explanation of any material differences in access that persist despite reasonable actions that have been or are being taken. For a plan or issuer designing and applying one or more NQTLs related to network composition standards, the comparative analysis must include a discussion of the actions that have been or are being taken to address material differences in access to in-network mental health and substance use disorder benefits as compared to in-network medical/surgical benefits.
In the preamble to the proposed rules, the Departments noted a growing disparity between in-network reimbursement rates for mental health and substance use disorder providers and medical/surgical providers, as well a significant disparity between how often participants and beneficiaries have little or no choice under their plan or coverage but to utilize out-of-network mental health and substance use disorder providers and facilities, as compared to medical/surgical providers and facilities. The Departments also expressed their specific concerns about standards related to network composition and other related NQTLs, because these standards are critical to ensuring parity in access to mental health and substance use disorder benefits for participants and beneficiaries. Therefore, the Departments included in the proposed rules a requirement that, in addition to the relevant data required for all NQTLs, plans and issuers would also be required to collect and evaluate relevant data for NQTLs related to network composition. For this purpose, the proposed rules stated that network composition NQTLs include, but are not limited to, standards for provider and facility admission to participate in a network or for continued network participation, including methods for determining reimbursement rates; credentialing standards; and procedures for ensuring the network includes an adequate number of each category of provider and facility to provide services under the plan or coverage. Under the proposed special rule, when designing and applying one or more NQTLs related to network composition standards, a plan or issuer would fail to meet the requirements of the proposed no more restrictive requirement and design and application requirements, in operation, if the relevant data show material differences in access to in-network mental health or substance use disorder benefits as compared to in-network medical/surgical benefits in a classification. This standard proposed to set a higher bar for NQTLs related to network composition than for other NQTLs by treating material differences in access to in-network mental health or substance use disorder benefits as compared to in-network medical/surgical benefits as a failure to meet the requirements of MHPAEA, instead of as a strong indicator of a violation of MHPAEA.
The Departments proposed that plans and issuers be required to take action to
Several commenters supported the special rule for NQTLs related to network composition, stating that it would address significant barriers to accessing mental health and substance use disorder services, and requested that the heightened requirement for such NQTLs be maintained in the final rules. Some commenters questioned the justification for treating standards for network composition differently than all other NQTLs. Several commenters stated that the Departments misrepresented several of the key studies they relied on to support the proposed special rule. Some commenters highlighted that analyzing outcomes data related to network composition is a long-recognized and widely accepted tool in population health management but stated that the proposed rules would turn this tool into a compliance standard that would be virtually impossible to satisfy. One commenter highlighted that MHPAEA requires equity in treatment, not equity in outcomes, and that the special rule would go beyond what is required by statute, as well as the Departments' own admission that parity across mental health and substance use disorder and medical/surgical networks does not necessarily mean an equal number of providers in a classification. Another commenter stressed that the special rule was inappropriate without clarity about what the definition of a material difference would be. This commenter stated that the Departments should finalize, following additional public comment, an NQTL definition, a specific set of measures with technical specifications, and a benchmark for what they will consider to be “material difference” for each NQTL type. Other commenters suggested that the Departments not finalize this proposed provision.
Some commenters noted that there can be many reasons why outcomes might be different for mental health and substance use disorder benefits than medical/surgical benefits when evaluating relevant data, particularly with respect to network composition. Some of these commenters highlighted reasons that are outside the control of plans and issuers, such as shortages of mental health and substance use disorder providers or specialists. Some commenters requested that the final rules address situations where material differences in access are due to a lack of mental health and substance use disorder providers, while other commenters stated that general citations to provider shortages as the only cause of material differences in access should be rejected as inadequate, especially without evidence that those shortages drove disparities, rather than plan or issuer choices. One commenter argued that plans and issuers should have the opportunity to address any apparent gaps in network access and explain long-term initiatives to address those gaps.
Several commenters expressed concern that the special rule as proposed would have adverse consequences for patient outcomes and safety because it would encourage plans and issuers to accept lower quality providers into their networks. One commenter noted that behavioral health care is commonly provided by primary care providers, and without including those providers in relevant data, a significant percentage of mental health treatment would not be captured when determining whether material differences in access exist. Other commenters expressed the importance of taking into account telehealth providers when analyzing relevant data for purposes of NQTLs related to network composition.
The Departments acknowledge the concerns raised by commenters on this aspect of the proposed rules; namely, the fact that a variety of metrics could be consulted as a plan or issuer evaluates its parity compliance regarding NQTLs related to network composition, and that parity for mental health and substance use disorder benefits as compared to medical/surgical benefits does not necessarily mean an equal number of mental health or substance use disorder and medical/surgical network providers. The Departments also understand the value of a consistent approach with regard to all NQTLs, while recognizing the impact of NQTLs related to network composition on access to care. Additionally, the Departments acknowledge the questions some commenters raised requesting more specific details on how to account for material differences in access for network composition NQTLs, including those due to provider shortages, which plans and issuers may not be able to effectively address through no fault of their own despite taking reasonable action. The Departments also note that certain outcomes measures, such as high out-of-network utilization for mental health or substance use disorder benefits as compared to medical/surgical benefits, may not necessarily represent a per se violation of MHPAEA.
The Departments agree with commenters that it is important to allow plans and issuers to address apparent gaps in relevant data, and that it is also important that the regulatory standard for NQTLs related to network composition is one that plans and issuers are able to satisfy. However, as stated in the preamble to the proposed rules, the Departments also recognize that network composition and access to mental health and substance use disorder benefits are the product of myriad NQTLs; processes, strategies, evidentiary standards, and other factors
After consideration of the comments, the Departments are not finalizing the proposed special rule for NQTLs related to network composition, and are instead including language in these final rules to explain how plans and issuers are expected to comply with the relevant data evaluation requirements with respect to those NQTLs. Specifically, these final rules require that a plan or issuer must collect and evaluate data in a manner reasonably designed to assess the aggregate impact of all such NQTLs on access to mental health and substance use disorder benefits and medical/surgical benefits, instead of evaluating relevant data for each NQTL separately (which is generally required under these final rules for NQTLs other than those related to network composition), to determine if there is a material difference in access. Furthermore, the final rules provide examples of possible actions that a plan or issuer could take to comply with the requirement to take reasonable action, as necessary, to address any material differences in access with respect to network composition NQTLs. While under these final rules, material differences in access related to network composition NQTLs are not automatically treated as a violation of MHPAEA (and instead are treated as a strong indicator of a violation, the same as all other NQTLs), the Departments emphasize that plans and issuers must engage in, and document in their comparative analyses, all reasonable actions, as necessary, to address any material differences in access.
While the approach to material differences for NQTLs related to network composition is different than that set forth in the proposed rules, these final rules will achieve the same goal of ensuring access to mental health and substance use disorder benefits in parity with access to medical/surgical benefits, by requiring plans and issuers to take reasonable action, as necessary, to address material differences in access for in-network mental health and substance use disorder benefits as compared to in-network medical/surgical benefits. Furthermore, the approach for NQTLs related to network composition in these final rules will ensure that participants and beneficiaries are not subject to NQTLs with respect to mental health and substance use disorder benefits that are more restrictive than the predominant NQTLs applied to substantially all medical/surgical benefits under the plan or coverage.
The Departments stress the importance of the requirement under these final rules that plans and issuers take reasonable action, as necessary, where relevant data suggest that NQTLs related to network composition contribute to a material difference in access to in-network mental health and substance use disorder benefits as compared to in-network medical/surgical benefits in a classification, to ensure compliance with MHPAEA. These final rules provide an illustrative list of possible actions the Departments expect plans and issuers, working with their service providers, to take, as necessary, to address any material differences in access with respect to NQTLs related to network composition under the relevant data evaluation requirements. This includes plans and issuers working with their service providers, as applicable, to strengthen efforts to recruit and encourage a broad range of available mental health and substance use disorder providers and facilities to join the plan's or issuer's network of providers, including taking actions to increase compensation or other inducements, streamline credentialing processes, or contact providers reimbursed for items and services provided on an out-of-network basis to offer participation in the network, and expand the availability of telehealth arrangements to mitigate overall mental health and substance use disorder provider shortages in a geographic area. Additionally, plans and issuers should provide additional outreach and assistance to participants and beneficiaries enrolled in the plan or coverage to assist them in finding available in-network mental health and substance use disorder providers and facilities, and ensure that provider directories are accurate and reliable (including in accordance with Code section 9820(a), ERISA section 720(a), PHS Act section 2799A-5(a), and future implementing regulations and guidance). The Departments also expect plans and issuers to take other reasonable actions, as necessary, that are intended to mitigate any material differences (even if not enumerated in these final rules).
As with other types of NQTLs, these final rules require plans and issuers to explain in their comparative analyses for NQTLs related to network composition the circumstances of any material differences in access and the actions that have been or are being taken to address these differences. If such actions do not fully resolve the material differences, a plan or issuer must provide a reasoned explanation in its comparative analysis of any material differences that persist despite reasonable actions that have been or are being taken. The Departments stress that a comparative analysis making only a cursory reference to provider shortages with little or no explanation of reasonable actions taken to address material differences in access will likely result in a finding by the relevant Secretary that the comparative analysis is insufficient and, without additional comparative analyses in response to an insufficiency notice or initial determination of noncompliance from the Secretary, may result in a final determination of noncompliance. As noted elsewhere in this preamble, the Departments expect that, if a plan or issuer intends to rely on an explanation of existing circumstances that cannot effectively be addressed through reasonable action, the explanation should include significant detail as to the circumstances resulting in material differences in access that are outside the plan's or issuer's control, and a robust discussion of the reasonable actions the plan or issuer has taken or is taking in an attempt to address such material differences.
The proposed rules specified a narrow exception under which plans and issuers would not be required to comply with the relevant data evaluation requirements for NQTLs that impartially apply independent professional medical or clinical standards.
In the preamble to the proposed rules, the Departments acknowledged that the application of independent professional
The Departments noted in the preamble to the proposed rules that they do not intend to interfere with a plan's or issuer's ability to ensure that coverage for benefits for the treatment of mental health conditions and substance use disorders is consistent with independent professional medical or clinical standards or fraud, waste, and abuse measures. The Departments also recognized that there are instances in which the application of independent professional medical or clinical standards or fraud, waste, and abuse measures might result in differences in the design or application of NQTLs to mental health or substance use disorder benefits as compared to medical/surgical benefits due to clinical differences between mental health conditions and substance use disorders and medical/surgical conditions, as well as differences in the model of care, in a manner that could otherwise violate certain aspects of the requirements for NQTLs in the proposed rules.
Several commenters opposed the proposed exceptions because they stated that plans and issuers would exploit them to improperly limit access to mental health and substance use disorder services. Some of these commenters stated that the Departments lack authority or a legal basis to implement the proposed exceptions because, in their view, the statute does not provide authority to establish exceptions to MHPAEA's requirements. Commenters also stated that the proposed exceptions could significantly undermine the other provisions of the proposed rules that would otherwise strengthen MHPAEA protections by creating opportunities for misuse or exploitation. Conversely, some commenters generally supported the proposed exceptions, but highlighted ambiguities related to how the exceptions would operate under the proposed rules to allow NQTLs to be applied with respect to mental health and substance use disorder benefits. These commenters also stated that the exceptions may be too narrow as proposed and that it is unclear how and what a plan or issuer must demonstrate to confidently rely on the proposed exceptions.
The Departments acknowledge these comments, as well as the comments received on each of the two proposed exceptions, which are addressed in more detail in this section of the preamble. After considering the comments, and for the reasons discussed later in this preamble, the Departments are not finalizing the proposed exceptions for independent professional medical or clinical standards or fraud, waste, and abuse measures, but explain how plans and issuers can account for such standards and fraud and abuse measures in implementing the provisions of these final rules.
To qualify for the exception for independent professional medical or clinical standards under the proposed rules, an NQTL would have to impartially apply those standards (consistent with generally accepted standards of care) to medical/surgical benefits and mental health or substance use disorder benefits. The NQTL could not deviate from those standards in any way, such as by modifying or otherwise imposing additional or different requirements. Under the proposed rules, an NQTL qualifying for this exception would not be required to satisfy the proposed no more restrictive requirement or the proposed relevant data evaluation requirements. In addition, the independent professional medical or clinical standards would not be considered a discriminatory factor or evidentiary standard. The Departments noted that, under the proposed rules, the plan or issuer would still be required to ensure that such an NQTL complies with the rest of the design and application requirements. Additionally, the plan or issuer would be required to perform and document comparative analyses for NQTLs that impartially apply independent professional medical or clinical standards.
Some commenters stated that the exception for NQTLs that impartially apply independent professional medical or clinical standards should not be finalized, because the Departments rejected a similar exception in previous rulemaking. Specifically, these commenters highlighted that the Departments included an exception to the NQTL requirements for “recognized clinically appropriate standards of care” in the 2010 MHPAEA interim final regulations, which was later deleted in the 2013 final regulations. The preamble to the 2013 final regulations supported the decision to eliminate the exception by pointing to commenters' concern about abuse and the use of this exception by plans and issuers to try to justify stricter application of NQTLs.
Some commenters urged the Departments to not finalize the proposed exception for NQTLs that impartially apply independent professional medical or clinical standards and instead require those standards to be considered as a factor in the NQTL comparative analysis, subject to all applicable requirements for NQTLs under the proposed rules. Alternatively, commenters requested that plans and issuers be required to document in their comparative analyses the ways in which the clinical standards and practices used to design and apply NQTLs deviate from independent professional medical or clinical standards, which should be tied to criteria or guidelines from relevant nonprofit clinical specialty associations. These commenters also stated that they support analogous State definitions of “generally accepted standards of care” instead of the proposed “generally recognized independent professional
Some commenters highlighted that the proposed exception appears to presume that there is a single set or “gold standard” of independent professional medical or clinical standards, when in practice, these standards can vary greatly, and consensus may not always exist for a particular condition. The commenters noted that medical and clinical standards are generally designed to guide health care providers and facilities in determining appropriate care for a given diagnosis or stage of treatment, not to determine how the standards should best be utilized for other purposes, so plans and issuers may need to adapt clinical standards to apply them in the context of health coverage. Therefore, they stated, it is unclear that the exception for independent professional medical or clinical standards as proposed could be relied on by plans and issuers as they design and apply NQTLs as it is unclear if this necessary adaptation would cause a plan or issuer to fail to impartially apply such standards.
Other commenters, who generally supported this proposed exception, stated that they found it to be generally vague and undefined. These commenters urged the Departments to define more clearly what constitutes independent professional medical or clinical standards for purposes of the proposed exception, and many commenters suggested language for the Departments to consider providing as additional clarifications. Some commenters noted that to “apply” such standards should be understood to mean to primarily rely on these resources when developing NQTLs and claimed that these standards lack the precision and detail necessary for the exception to be useful. Additionally, commenters requested that the Departments provide examples of standards that would qualify for the proposed exception and descriptions of their application.
After considering the comments, the Departments are not finalizing the exception for independent professional medical or clinical standards as proposed. In light of the modifications to the requirements made in the final rules, the Departments agree with commenters that it is more appropriate for plans and issuers to include independent professional medical or clinical standards under the framework of the existing NQTL parity analysis than to provide an exception from the requirements of the final rules. Therefore, instead of finalizing the exception, the Departments are instead providing clarifications for how independent professional medical and clinical standards will be treated under these final rules. Specifically, NQTLs that are designed or applied, are based on, or are related to independent professional medical or clinical standards are subject to the design and application requirements and the relevant data evaluation requirements. As noted earlier in this preamble, such medical or clinical standards are not information, evidence, sources, or standards that are biased or not objective in a manner that discriminates against mental health or substance use disorder benefits as compared to medical/surgical benefits. Additionally, for purposes of the relevant data evaluation requirements, differences in access to mental health or substance use disorder benefits that are attributable to the use of independent professional medical or clinical standards as the basis for a factor or evidentiary standard used to design or apply an NQTL are not considered to be material. To the extent the plan or issuer attributes any differences in access to the application of such standards, the plan or issuer must explain the bases for that conclusion in their comparative analysis.
The Departments also proposed an exception for NQTLs reasonably designed to detect or prevent and prove fraud, waste, and abuse. To qualify for the exception under the proposed rules, fraud, waste, and abuse measures would have to be reasonably designed to detect or prevent and prove fraud, waste, and abuse, based on indicia that have been reliably established through objective and unbiased data. The proposed rules also required that such standards be narrowly designed to minimize the negative impact on access to appropriate mental health and substance use disorder benefits. Under the proposed rules, an NQTL qualifying for this exception would not be required to satisfy the proposed no more restrictive requirement. In addition, fraud, waste, and abuse measures would not be considered a discriminatory factor or evidentiary standard. The Departments noted that, under the proposed rules, the plan or issuer would still be required to ensure that such an NQTL complies with the rest of the design and application requirements. The proposed rules would also apply the relevant data evaluation requirements to these NQTLs, as the Departments stated that these tools, while important, are more likely than independent professional medical or clinical standards to result in NQTLs that may improperly restrict access to mental health and substance use disorder benefits because these NQTLs are largely both designed by, and applied within the control of, the plan or issuer. Additionally, the plan or issuer would be required to perform and document comparative analyses for NQTLs that are fraud, waste, and abuse measures.
Many commenters opposed the exception for NQTLs that are fraud, waste, and abuse measures. Similar to the objections to the exception for independent professional medical or clinical standards, these commenters highlighted that MHPAEA's statutory language, as amended by the CAA, 2021 does not contain exceptions for any NQTLs. These commenters voiced concern that the two proposed exceptions, together, could allow plans and issuers to avoid compliance with the strengthened requirements of MHPAEA set forth in the proposed rules. Commenters opposing the fraud, waste, and abuse exception generally recommended that the Departments remove it altogether; however, some commenters recommended that, if retained, the exception should include stronger language limiting plans' and issuers' ability to invoke the exception. These commenters also recommended that the Departments eliminate references to “waste,” as this is arguably targeted by all forms of utilization management. Commenters requested that, alternatively, plans and issuers be required to document in their comparative analyses how their efforts to combat fraud, waste, and abuse comply with MHPAEA (including as a factor used to design or apply an NQTL).
Other commenters were generally supportive of the exception but expressed concerns that the Departments would interpret it too narrowly. They generally recommended that the Departments add definitional clarity to allow for flexibility and account for the use of a range of NQTLs that are fraud, waste, and abuse measures and provide examples. Some commenters also sought clarification
The Departments acknowledge that many NQTLs consider the potential for fraud, waste, and abuse as a factor in their design and application and have concluded that it is appropriate for plans and issuers to be required to treat these types of factors and NQTLs following the same framework as other NQTLs, subject to all applicable requirements. The Departments also agree that the term “waste” is too broad and could arguably include all forms of utilization management. Therefore, instead of finalizing the exception as proposed, the Departments are providing clarifications on how fraud and abuse measures will be treated under these final rules. Specifically, NQTLs that are designed or applied, are based on, or are related to fraud and abuse measures are subject to the design and application requirements and the relevant data evaluation requirements. However, for purposes of the prohibition on discriminatory factors and evidentiary standards, the final rules provide that fraud and abuse measures are not information, evidence, sources, or standards that are biased or not objective in a manner that discriminates against mental health or substance use disorder benefits as compared to medical/surgical benefits. Additionally, for purposes of the relevant data evaluation requirements, a difference in access to mental health and substance use disorder benefits attributable to the use of fraud and abuse measures as the basis for a factor or evidentiary standard used to design or apply an NQTL is not considered to be material. To the extent that a plan or issuer attributes any differences in access to the application of such measures, the plan or issuer must explain the bases for that conclusion in their comparative analyses.
Some commenters suggested additional exceptions to the requirements for NQTLs that the Departments should consider adding to the final rules. Specifically, some commenters requested an exception for NQTLs related to the quality and safety of mental health and substance use disorder services. Similarly, another commenter recommended the Departments include an exception for practices to ensure high-quality care, based on the view that the two exceptions (for independent professional medical or clinical standards and fraud, waste, and abuse measures) in the proposed rules are not sufficient to curb substandard and ineffective treatment that does not reach the level of fraud, waste, and abuse. Other commenters suggested exceptions for compliance with Federal and State law, an exception to ensure the quality and safety of mental health and substance use disorder benefits, an exception to the quantitative testing and discriminatory factor analysis for Network NQTLs, and an exception for when no outcomes data are reasonably available.
The Departments have considered whether additional exceptions beyond those included in the proposed rules should be included in these final rules. As discussed earlier in this preamble, there are a very limited number of NQTLs where no data exist that can reasonably assess the NQTL's impact on access. Such NQTLs might include, for example, exclusions based on whether the treatment is experimental or investigative. Therefore, the Departments have provided guidance in these final rules on how plans and issuers must comply with the relevant data evaluation requirements for such NQTLs. However, as noted earlier in this preamble, such plans and issuers must still consider whether data can be used to reasonably assess the impact of the NQTL on relevant outcomes related to mental health and substance use disorder benefits and medical/surgical benefits. Consistent with the reasons described earlier in this preamble as to why the Departments declined to finalize the exceptions contained in the proposed rules, these final rules do not contain any additional exceptions.
The proposed rules provided that if a plan or issuer receives a final determination from the relevant Secretary that it is not in compliance with the comparative analysis requirements with respect to an NQTL, the NQTL would violate the substantive requirements for NQTLs,
The Departments noted in the proposed rules that MHPAEA requires that “such plan or coverage shall ensure that” the treatment limitations comply with the substantive requirements of the statute.
Under the proposed rules, when a plan or issuer receives a final determination from the Departments with respect to an NQTL that it has failed to demonstrate compliance with the NQTL comparative analysis documentation requirements under proposed 26 CFR 54.9812-2, 29 CFR 2590.712-1, or 45 CFR 146.137, including because the plan or issuer has not submitted a sufficient comparative analysis to demonstrate compliance, the failure would be treated not only as a violation of the NQTL comparative analysis documentation requirements but also as a violation of the substantive NQTL rules under proposed 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4). The Departments acknowledged that immediate cessation of the application of an NQTL may not be feasible for all NQTLs. Therefore, under the proposed rules, a determination by the Departments of whether to require immediate cessation would be based on the evaluation of facts and
Several commenters supported a provision that would give the Secretaries the ability to direct a plan or issuer to not impose an NQTL after a final determination of noncompliance and stated that meaningful consequences are important to incentivize plans and issuers to comply with MHPAEA. Some commenters urged the Departments to change the proposed language stating that “the relevant Secretary
The Departments are finalizing the provision governing the effect of a final determination of noncompliance, with modifications. The language contained in proposed 26 CFR 54.9812-1(c)(4)(vii), 29 CFR 2590.712(c)(4)(vii), and 45 CFR 146.136(c)(4)(vii) is being finalized at 26 CFR 54.9812-1(c)(4)(v)(A), 29 CFR 2590.712(c)(4)(v)(A), and 45 CFR 146.136(c)(4)(v)(A). These final rules add references to the relevant statutory citation,
The HHS final rules at 45 CFR 146.136(c)(4)(v)(A) also add references to an applicable State authority, as requested by commenters, so that the regulations are clear that, like the Departments, States with enforcement authority with respect to MHPAEA
Additionally, these final rules add new paragraph (c)(4)(v)(B) to make clear that a determination of whether the Departments will require cessation of the application of an NQTL will be based on an evaluation of the relevant facts and circumstances involved in the specific final determination and the nature of the underlying NQTL. For this purpose, the Departments expect that such facts and circumstances may include, but are not limited to, the level of disruption in the provision of benefits under the plan or coverage if the NQTL immediately ceased to apply, the practicality and complexities involved in the cessation of the NQTL, the effect on participants and beneficiaries of continuing or ceasing to apply the NQTL, and the likely time needed to cease or modify the NQTL. Under these final rules, such a determination will also take into account the interest of plan participants and beneficiaries and feedback from the plan or issuer. States that are the primary enforcers of MHPAEA may take into account these or other facts and circumstances when determining whether the State will require cessation of application of an NQTL.
The Departments decline to modify the proposed language to provide that the Secretary “shall” direct the plan or issuer not to impose the NQTL after a final determination of noncompliance with the comparative analysis requirements. In the preamble to the proposed rules and in these final rules, the Departments acknowledged that immediate cessation of the application of an NQTL may not be feasible for all NQTLs and that feedback from the plan or issuer would be taken into account. The Departments understand that not requiring immediate cessation of a noncompliant NQTL in every situation that involves a final determination of noncompliance with the comparative analysis requirements may allow participants and beneficiaries to be subject to noncompliant NQTLs. As these commenters noted, meaningful
The Departments stress that MHPAEA requires plans and issuers to ensure that the treatment limitations, including NQTLs imposed on mental health or substance use disorder benefits in a classification, are not more restrictive than those applied to medical/surgical benefits in the same classification. In many cases, a failure to submit a sufficient or compliant comparative analysis is evidence that a plan or issuer cannot substantiate an NQTL's compliance with these applicable requirements, and therefore is violating MHPAEA's substantive parity requirements. Therefore, where the Departments have come to a final conclusion that a comparative analysis is not compliant and are issuing a final determination of noncompliance, including because the plan or issuer has not submitted a sufficient comparative analysis to demonstrate compliance, the required corrective action may include the removal of such NQTL. The CAA, 2021 also requires the Departments to specify the actions a plan or issuer must take to address the violation, and include the required actions in the annual report to Congress.
As stressed in the Departments' reports to Congress, the Departments generally engage plans and issuers in repeated exchanges—asking follow-up questions, seeking additional documentation, performing further assessments, and affording opportunities for explanation—before making a final determination of noncompliance.
The proposed rules contained thirteen examples illustrating the NQTL requirements, including revised versions of some examples included in the 2013 final regulations and several new examples. Additionally, the proposed rules proposed to eliminate some examples that were included in the 2013 final regulations, in light of the additional proposed requirements.
The Departments received comments on each of the proposed examples and comments recommending additional examples be added. Some commenters suggested the Departments use different data elements in the examples related to the relevant data evaluation requirements that in their view would better evaluate compliance with MHPAEA. Other commenters expressed concerns regarding how the proposed exceptions to the NQTL requirements discussed earlier in this preamble would apply and requested that the examples address what a plan or issuer would be required to document to rely on these exceptions. One of these commenters also requested an example showing analysis of an NQTL that is developed based on multiple standards, some of which qualify for the proposed exception for independent professional medical or clinical standards and some of which do not. Some commenters expressed concern regarding whether the proposed mathematical substantially all and predominant tests could be performed on all NQTLs and requested more detailed examples of how to apply such tests.
As noted earlier in this preamble, the Departments are declining to finalize the proposed mathematical substantially all and predominant tests, as well as the proposed exceptions for NQTLs that impartially apply independent professional medical or clinical standards or fraud, waste, and abuse measures. Therefore, rather than providing examples to address these provisions, the examples address the substantive provisions the Departments are finalizing in these final rules, including the general requirement that NQTLs for mental health and substance use disorder benefits not be more restrictive, as written or in operation, than the predominant NQTL that applies to substantially all medical/surgical benefits in the same classification, the design and application requirements, and the relevant data evaluation requirements (including potential data elements that plans and issuers may consider to be relevant data with respect to an NQTL).
The Departments are adapting some of the fact patterns used in the examples in the proposed rules related to provisions that are not being finalized to instead illustrate concepts applicable in these final rules, but these final rules do not include all of the examples included in the proposed rules (or all of the examples included in the 2013 final regulations). The Departments note that the exclusion in these final rules of any
Accordingly, the facts of Example 1 in these final rules assume a plan's reimbursement rate methodology for outpatient, in-network providers is based on a variety of factors. As written, for mental health, substance use disorder, and medical/surgical benefits, all reimbursement rates for physicians and non-physician practitioners for the same CPT code are based on a combination of factors, such as the nature of the service, duration of the service, intensity and specialization of training, provider licensure and type, number of providers qualified to provide the service in a given geographic area, and market need (demand). In operation, the plan utilizes an additional strategy to further reduce reimbursement rates for mental health and substance use disorder non-physician providers from those paid to mental health and substance use disorder physicians by the same percentage for every CPT code but does not apply the same reductions for non-physician medical/surgical providers.
Example 1 concludes that the plan violates the rules of paragraph (c)(4). The plan reimburses non-physician providers of mental health and substance use disorder services by reducing their reimbursement rates from the rates for physician providers of such services by the same percentage for every CPT code but does not apply the same reduction to non-physician providers of medical/surgical services from the rate for physician providers of medical/surgical services. Therefore, in operation, the factors used in designing and applying the NQTL to mental health and substance use disorder benefits in the outpatient, in-network classification are not comparable to, and are applied more stringently than, the factors used in designing and applying the NQTL with respect to medical/surgical benefits in the same classification. As a result, the NQTL with respect to mental health or substance use disorder benefits in the outpatient, in-network classification is more restrictive than the predominant NQTL that applies to substantially all medical/surgical benefits in the same classification, in violation of 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4) of these final rules. This example illustrates that the plan violates the design and application requirements and does not address whether the plan complies with the relevant data evaluation requirements.
In Example 2, the facts of proposed Example 10 are generally unchanged. A plan, as written, generally excludes coverage for all treatments that are experimental or investigative for medical/surgical benefits and mental health and substance use disorder benefits in the outpatient, in-network classification. As a result, the plan generally excludes, as experimental, a treatment or procedure when no professionally recognized treatment guidelines include the treatment or procedure as a clinically appropriate standard of care for the condition or disorder and fewer than two randomized controlled trials are available to support the treatment's use with respect to the given condition or disorder. As written, the plan provides benefits for the treatment of ASD, which is a mental health condition, but, in operation, excludes coverage for ABA therapy to treat children with ASD, deeming it experimental. More than one professionally recognized treatment guideline defines clinically appropriate standards of care for ASD as including ABA therapy and more than two randomized controlled trials are available to support the use of ABA therapy as one intervention to treat certain children with ASD.
Example 2 concludes that the plan violates the design and application requirements with respect to the exclusion of ABA therapy because, in operation, the plan deviates from its strategy to exclude coverage of experimental treatment of medical
The facts of Example 3 assume a plan has a step therapy protocol that requires participants and beneficiaries who are prescribed certain drugs to try and fail a generic or preferred brand name drug before the plan will cover the treatment or medication originally prescribed by a provider. The plan has an exception to this protocol that was developed solely by relying on a methodology developed by an external third-party organization. The third-party organization's methodology, which is not based on an independent professional medical or clinical standard, identifies instances in which a delay in treatment with a drug prescribed for a medical condition or surgical procedure could result in either severe or irreversible consequences. However, with respect to a drug prescribed for a mental health condition or a substance use disorder, the third-party organization's methodology only identifies instances in which a delay in treatment could result in both severe and irreversible consequences. The plan does not take any steps to correct, cure, or supplement the methodology.
The conclusion to Example 3 explains that the plan violates the prohibition on discriminatory factors and evidentiary standards under 26 CFR 54.9812-1(c)(4)(i)(B), 29 CFR 2590.712(c)(4)(i)(B), and 45 CFR 146.136 (c)(4)(i)(B). The source upon which the factor used to apply the step therapy protocol is based is biased or not objective in a manner that discriminates against mental health or substance use disorder benefits as compared to medical/surgical benefits because it addresses instances in which a delay in treatment with a drug prescribed for a medical condition or surgical procedure could result in either severe or irreversible consequences, but only addresses instances in which a delay in treatment with a drug prescribed for a mental health condition or substance use disorder could result in both severe and irreversible consequences, and the plan fails to take the steps necessary to correct, cure, or supplement the methodology so that it is not biased and is objective. Based on the relevant facts and circumstances, this source systematically disfavors access or is specifically designed to disfavor access to mental health or substance use disorder benefits as compared to medical/surgical benefits. Therefore, the factor used to design exceptions to the step therapy protocol is discriminatory, for purposes of determining comparability and stringency under the design and application requirements, and it may not be relied upon by the plan unless the plan takes the steps necessary to correct, cure, or supplement it (by, for example, taking into account instances in which a delay in treatment with a drug prescribed for a mental health condition or a substance use disorder could result in severe or irreversible consequences).
Specifically, the facts of Example 4 assume a plan's methodology for calculating provider reimbursement rates relies only on historical plan data on total plan spending for each specialty, divided between mental health and substance use disorder providers and medical/surgical providers from a time where the plan was not subject to MHPAEA. The plan used these historical plan data for many years to establish base reimbursement rates in all provider specialties for which it provides medical/surgical, mental health, and substance use disorder benefits in the inpatient, in-network classification. In evaluating the use of these historical plan data in the design of the methodology for calculating provider reimbursement rates, the plan determined, based on all the relevant facts and circumstances, that the historical plan data systematically disfavor access or are specifically designed to disfavor access to mental health or substance use disorder benefits as compared to medical/surgical benefits. To ensure this information about historical reimbursement rates is not biased and is objective, the plan supplements its methodology to develop the base reimbursement rates for mental health and substance use disorder providers in accordance with additional information, evidence, sources, and standards that reflect the increased demand for mental health and substance use disorder benefits in the inpatient, in-network classification and to attract sufficient mental health and substance use disorder providers to the network. The relevant facts and circumstances indicate that the supplemented
Example 4 of these final rules concludes that the plan does not violate the prohibition on discriminatory factors and evidentiary standards with respect to the plan's methodology for calculating provider reimbursement rates in the inpatient, in-network classification. The relevant facts and circumstances indicate that the plan's use of only historical plan data to design its methodology for calculating its provider reimbursement rates in the inpatient, in-network classification would otherwise be considered to be biased or not objective in a manner that discriminates against mental health or substance use disorder benefits as compared to medical/surgical benefits since the historical data systematically disfavor access or are specifically designed to disfavor access to mental health or substance use disorder benefits as compared to medical/surgical benefits. However, the plan took the steps necessary to supplement the information, evidence, sources, and standards to reasonably reflect the increased demand for mental health and substance use disorder benefits in the inpatient, in-network classification, and adjusted the methodology to increase reimbursement rates for those benefits, thereby ensuring that the information, evidence, sources, and standards relied upon by the plan for this purpose are not biased and are objective. Therefore, the factors and evidentiary standards used to design the plan's methodology for calculating provider reimbursement rates in the inpatient, in-network classification are not considered discriminatory factors and evidentiary standards.
In Example 5 of these final rules, the provisions of a plan state that it relies on, and does not deviate from, independent professional medical or clinical standards to inform the factor used to design prior authorization requirements for both medical/surgical and mental health and substance use disorder benefits in the prescription drug classification. In this example, the plan uses the ASAM national practice guidelines as the independent professional medical or clinical standard to inform the factors used to design and apply the prior authorization requirement for treatment of OUD. The ASAM practice guidelines do not support prior authorization every 30 days for buprenorphine/naloxone combination for treatment of OUD. However, in operation, the plan requires prior authorization for buprenorphine/naloxone combination for treatment of OUD every 30 days, which is inconsistent with independent professional medical standards on which the factor used to design the limitation is based. The plan's factor used to design and apply prior authorization requirements for medical/surgical benefits in the prescription drug classification relies on, and does not deviate from, independent professional medical or clinical standards.
The conclusion to Example 5 in these final rules states that the plan violates the requirements for NQTLs. The ASAM national practice guidelines on which the factor used to design prior authorization requirements for substance use disorder benefits is based are independent professional medical or clinical standards that are not considered to be biased or not objective in a manner that discriminates against mental health and substance use disorder benefits under these final rules. However, the plan must comply with other requirements in these final rules for NQTLs, as applicable, with respect to such standards or measures that are used as the basis for a factor or evidentiary standard used to design or apply an NQTL. In operation, the plan's factor used to design and apply prior authorization requirements with respect to substance use disorder benefits is not comparable to, and is applied more stringently than, the same factor used to design and apply prior authorization requirements for medical/surgical benefits, because the factor relies on, and does not deviate from, independent professional medical or clinical standards for medical/surgical benefits, but deviates from the relevant guidelines for substance use disorder benefits. As a result, the NQTL with respect to substance use disorder benefits in the prescription drug classification is more restrictive than the predominant NQTL that applies to substantially all medical/surgical benefits in the same classification.
Under the facts of new Example 6, a plan approves or denies claims for mental health and substance use disorder benefits and for medical/surgical benefits in the inpatient, in-network and outpatient, in-network classifications based on medical necessity criteria. The plan states in its comparative analysis that no data exist that can reasonably measure any
The example concludes that the plan violates the requirements of these final rules. The plan does not comply with the requirements under these final rules for NQTLs where no data exist that can reasonably measure any relevant impact of the NQTL on access because the plan did not include in its comparative analysis a reasoned justification as to the basis for its conclusion that there are no data that can reasonably measure the NQTL's impact, an explanation of why the nature of the NQTL prevents the plan from reasonably measuring its impact, an explanation of what data was considered and rejected, and documentation of any additional safeguards or protocols used to ensure the NQTL complies with the requirements of MHPAEA. For example, data the plan could have considered that could reasonably assess the NQTL's impact might include the number and percentage of claims denials, or the number and percentage of claims that were approved for a lower level of care than the level requested on the initial claim. The plan has violated the relevant data evaluation requirements, as it has not collected and evaluated relevant data in a manner reasonably designed to assess the impact of the NQTL on relevant outcomes related to access nor did it include sufficient information it its comparative analysis with respect to the lack of relevant data.
In this example as modified in these final rules, a plan follows a written process to apply a concurrent review NQTL to all medical/surgical benefits and mental health and substance use disorder benefits within the inpatient, in-network classification. Under this process, a first-level review is conducted in every instance in which concurrent review applies and an authorization request is approved by the first-level reviewer only if the clinical information submitted by the facility meets the plan's criteria for a continued stay. If the first-level reviewer is unable to approve the authorization request because the clinical information submitted by the facility does not meet the plan's criteria for a continued stay, it is sent to a second-level reviewer who will either approve or deny the request. The plan collects relevant data, including the number of referrals to second-level review, and the number of denials of concurrent review claims as compared to the total number of concurrent review claims in the inpatient, in-network classification. The plan also collects the number of denied claims that are overturned on appeal, separately for mental health and substance use disorder benefits and medical/surgical benefits in the inpatient, in-network classification. The plan evaluates the relevant data and determines that, based on the facts and circumstances, the data do not suggest that the concurrent review NQTL contributes to material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits in the inpatient, in-network classification. Upon requesting the plan's comparative analysis for the concurrent review NQTL and reviewing the relevant data, the Secretary does not request additional data and agrees that the data do not suggest material differences in access.
In Example 7 of these final rules, the conclusion explains that the plan does not violate the relevant data evaluation requirements as it collected and evaluated relevant data in a manner reasonably designed to assess the impact of the NQTL on relevant outcomes related to access to mental health and substance use disorder benefits and medical/surgical benefits and considered the impact as part of its evaluation. Because the relevant data do not suggest that the NQTL contributes to material differences in access to mental health and substance use disorder benefits as compared to medical/surgical benefits in the inpatient, in-network classification, there is no strong indicator that the plan violates the requirements for NQTLs under these final rules. However, the plan is still required to comply with the design and application requirements under these final rules, including the prohibition on discriminatory factors and evidentiary standards.
In Example 8 of these final rules, a plan requires prior authorization that a treatment is medically necessary for all inpatient, in-network medical/surgical benefits and for all inpatient, in-network mental health and substance use disorder benefits. The plan collects and evaluates relevant data in a manner reasonably designed to assess the impact of the prior authorization requirement on relevant outcomes related to access to mental health and substance use disorder benefits and medical/surgical benefits in the inpatient, in-network classification. The plan's written process for prior authorization states that the plan approves inpatient, in-network benefits for medical conditions and surgical procedures and mental health and substance use disorder benefits for periods of 1, 3, and 7 days, after which a treatment plan must be submitted by the patient's attending provider and approved by the plan. Approvals for mental health and substance use disorder benefits are most commonly given only for 1 day, after which a treatment plan must be submitted by the patient's attending provider and approved by the plan. The relevant data show that approvals for 7 days are most common for medical conditions and surgical procedures under this plan. Based on all the relevant facts and
The conclusion to Example 8 provides that, while relevant data for the plan's prior authorization requirements suggested that the NQTL contributes to material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits in the classification, the plan has taken reasonable action, as necessary, to ensure compliance, in operation, with the requirements for NQTLs under these final rules by updating the factors that inform its prior authorization NQTL for inpatient, in-network mental health and substance use disorder benefits, so that such benefits are approved for similar periods to what is approved for medical/surgical benefits, and documenting its action taken to address material differences in access to inpatient, in-network benefits, as required under these final rules.
In Example 9 of these final rules, a plan develops a medical management requirement for all inpatient, out-of-network benefits for both medical/surgical benefits and mental health and substance use disorder benefits to ensure treatment is medically necessary. The factors and evidentiary standards used to design and apply the medical management requirement rely on independent professional medical or clinical standards that are generally recognized by health care providers and facilities in relevant clinical specialties. The processes, strategies, evidentiary standards, and other factors used in designing and applying the medical management requirement to mental health and substance use disorder benefits are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, and other factors used in designing and applying the requirement with respect to medical/surgical benefits. The plan collects and evaluates relevant data in a manner reasonably designed to assess the impact of the medical management NQTL on relevant outcomes related to access to mental health and substance use disorder benefits and medical/surgical benefits, and considers the impact as part of the plan's evaluation. Within the inpatient, out-of-network classification, the application of the medical management requirement results in a higher percentage of denials for mental health and substance use disorder claims than medical/surgical claims because the benefits were found to be medically necessary for a lower percentage of mental health and substance use disorder claims. The plan correctly determines that these differences in access are attributable to the independent professional medical or clinical standards that are used as the basis for the factors and evidentiary standards used to design or apply the NQTL and adequately explains the bases for that conclusion as part of its comparative analysis.
Example 9 concludes that the plan does not violate the requirements under these final rules for its medical management NQTL. Independent professional medical or clinical standards are not considered to be information, evidence, sources, or standards that are biased and not objective in a manner that discriminates against mental health or substance use disorder benefits as compared to medical/surgical benefits and the plan otherwise complies with the design and application requirements. Additionally, the plan does not violate the relevant data evaluation requirements because it has collected and evaluated relevant data, the differences in access are attributable to the independent professional medical or clinical standards that are used as the basis for the factors and evidentiary standards used to design or apply the medical management NQTL, and the plan explains the bases for this conclusion in its comparative analysis. As a result, the NQTL with respect to mental health or substance use disorder benefits in the inpatient, out-of-network classification is no more restrictive than the predominant NQTL that applies to substantially all medical/surgical benefits in the same classification.
In Example 10 of these final rules, a plan applies NQTLs related to network composition in the inpatient, in-network and outpatient, in-network classifications. The plan's networks are constructed by separate service providers for medical/surgical benefits and mental health and substance use disorder benefits. The facts also assume
Example 10 concludes that the plan does not violate the requirements for NQTLs under these final rules. The plan complies with the design and application requirements, and also collects and evaluates relevant data, as required under these final rules, in a manner reasonably designed to assess the aggregate impact of all such NQTLs on relevant outcomes related to access to mental health and substance use disorder benefits and medical/surgical benefits. While the data suggest that the NQTLs contribute to material differences in access to mental health and substance use disorder benefits as compared to medical/surgical benefits, the plan takes reasonable action, as necessary, to ensure compliance with these final rules. The plan also documents the actions that have been and are being taken by the plan to address material differences in access and documents the reasons beyond the plan's control that the plan believes may contribute to the material differences in access. As a result, the network composition NQTLs with respect to mental health or substance use disorder benefits in the inpatient, in-network and outpatient, in-network classifications are no more restrictive than the predominant NQTLs that apply to substantially all medical/surgical benefits in the same classifications.
Specifically, in Example 11, an employer maintains both a major medical plan and an EAP. The EAP provides, among other benefits, a limited number of mental health or substance use disorder counseling sessions. These sessions, together with other benefits provided by the EAP, are not significant benefits in the nature of medical care. Participants are eligible for mental health or substance use disorder benefits under the major medical plan only after exhausting the counseling sessions provided by the EAP, and no similar exhaustion requirement applies with respect to medical/surgical benefits provided under the major medical plan.
Example 11 concludes that the requirement that limits eligibility for mental health and substance use disorder benefits under the major medical plan until benefits under an EAP are exhausted is an NQTL subject to MHPAEA. Because the limitation does not apply to medical/surgical benefits, it violates the prohibition on a separate NQTL applicable only to mental health or substance use disorder benefits. The Departments have also included language to note that under other Departmental regulations,
Example 12 concludes that the plan violates these final rules. The exclusion of residential treatment is a separate NQTL applicable only to mental health and substance use disorder benefits in the inpatient, in-network and inpatient, out-of-network classifications because the plan does not apply a comparable exclusion with respect to any medical/surgical benefits in the same benefit classification.
In this example, following an initial request by the Secretary for a plan's comparative analysis of the plan's exclusion of mental health and substance use disorder benefits for failure to complete a course of treatment in the inpatient, in-network classification, the plan submits a comparative analysis for the NQTL. The comparative analysis included insufficient information to conduct an appropriate comparison of the NQTL. After review of the comparative analysis, as well as additional information submitted by the plan after the Secretary determines that the plan has not submitted sufficient information to be responsive to the request, the Secretary makes an initial determination that the comparative analysis fails to demonstrate that the processes, strategies, evidentiary standards, and other factors used in designing and applying the exclusion to mental health or substance use disorder benefits in the inpatient, in-network classification are comparable to, and applied no more stringently than, those used in designing and applying the NQTL to medical/surgical benefits in the classification. Although the plan submits a corrective action plan and additional comparative analyses within 45 calendar days after the initial determination, it does not eliminate or alter the exclusion or alter the processes, strategies, evidentiary standards, and other factors used in designing and applying the exclusion. Moreover, the additional comparative analysis still does not include sufficient information. The Secretary determines that the additional comparative analyses do not demonstrate compliance with the requirements for NQTLs under MHPAEA. Accordingly, the plan receives a final determination of noncompliance with the statutory comparative analysis documentation requirements from the Secretary, which concludes that the plan did not demonstrate compliance through the comparative analysis process. After considering the relevant facts and circumstances, and considering the interests of plan participants and beneficiaries, as well as feedback from the plan, the Secretary directs the plan not to impose the NQTL by a certain date, unless and until the plan demonstrates compliance to the Secretary or takes appropriate action to remedy the violation. The plan makes no changes to its plan terms by that date and continues to impose the exclusion of benefits for failure to complete a course of treatment in the inpatient, in-network classification.
This Example 13 concludes that, by continuing to impose the exclusion of mental health and substance use disorder benefits for failure to complete a course of treatment in the inpatient, in-network classification after the Secretary directs the plan not to impose this NQTL, the plan violates the requirements of these final rules related to the effect of a final determination of noncompliance.
The Departments proposed to amend the general parity requirement set forth in 26 CFR 54.9812-1(c)(2)(i), 29 CFR 2590.712(c)(2)(i), and 45 CFR 146.136(c)(2)(i) by adding a sentence to reiterate that a plan or issuer may not impose any financial requirement or treatment limitation that is applicable only with respect to mental health or substance use disorder benefits and not to any medical/surgical benefits in the same benefit classification. The preamble to the proposed rules noted that the 2013 final regulations do not explicitly incorporate the statutory prohibitions on separate financial requirements and treatment limitations that are imposed only with respect to mental health or substance use disorders in Code sections 9812(a)(3)(A)(i) and (ii), ERISA sections 712(a)(3)(A)(i) and (ii), and PHS Act sections 2726(a)(3)(A)(i) and (ii), respectively, but noted that financial requirements and quantitative treatment limitations imposed only with respect to mental health or substance use disorder benefits generally could not comply with the parity requirements contained in paragraph (c)(3) of 26 CFR 54.9812-1, 29 CFR 2590.712, and 45 CFR 146.136. Additionally, the Departments referred to an example in the 2013 final regulations that demonstrates and affirms that an NQTL applied only to mental health or substance use disorder benefits would not be permissible.
Additionally, since the 2013 final regulations state that the application of paragraph (c)(2) to NQTLs is addressed in paragraph (c)(4) of the regulations, the Departments also proposed to add similar language to the proposed rules for NQTLs at 26 CFR 54.9812-1(c)(4)(vi), 29 CFR 2590.712(c)(4)(vi), and 45 CFR 146.136(c)(4)(vi), which cross-reference the language proposed to be added to 26 CFR 54.9812-1(c)(2)(i), 29 CFR 2590.712(c)(2)(i), and 45 CFR 146.136(c)(2)(i). The Departments proposed that a plan or issuer may not apply any NQTL that is applicable only with respect to mental health or substance use disorder benefits and not with respect to any medical/surgical benefits in the same benefit classification. The Departments noted that an exclusion of benefits for a mental health condition or substance use disorder in a classification that is merely an expression of another NQTL, such as medical necessity requirements or experimental or investigational exclusions, that is applied with respect to medical/surgical benefits in the same classification would not be considered a separately applicable treatment limitation. As a result, such an NQTL would be evaluated to determine whether such NQTL complies with all applicable requirements of these final rules.
Many commenters supported reiterating the statutory requirement that a plan or issuer must not impose a financial requirement or treatment limitation that is applicable only to mental health or substance use disorder benefits and specifying that if an exclusion of a mental health or substance use disorder treatment or service is not due to the application of another NQTL to both mental health or substance use disorder benefits and medical/surgical benefits in a classification, such exclusion would be subject to this prohibition. Commenters also agreed with the Departments that, if an exclusion of benefits for a mental health condition or substance use disorder is not generated through a process, strategy, or factor, or informed by an evidentiary standard of a broader NQTL like medical necessity, such an exclusion would need to be evaluated for parity compliance (and would therefore be prohibited, provided it does not apply to medical/surgical benefits). One commenter requested the Departments clarify that a specific NQTL need not be applicable to medical/surgical benefits in the same classification to overcome the notion that the limitation is separately applicable.
The Departments agree with commenters that the proposed prohibition on NQTLs applicable only to mental health or substance use disorder benefits is consistent with the statute, and that an exclusion of benefits for a mental health condition or substance use disorder otherwise covered under the plan or coverage not generated through a process, strategy, or factor, or informed by an evidentiary standard of a broader NQTL like medical necessity should be evaluated for MHPAEA compliance. This exclusion is prohibited as an impermissible separate treatment limitation if a comparable exclusion does not apply to medical/surgical benefits in the classification. Additionally, as evaluation of a plan's or issuer's compliance with MHPAEA is generally assessed within a classification of benefits, the prohibition on separately applicable financial requirements or treatment limitations applies with respect to benefits in the same benefit classification. Therefore, the Departments are finalizing these amendments as proposed at 26 CFR 54.9812-1(c)(2)(i) and (c)(4)(iv), 29 CFR 2590.712(c)(2)(i) and (c)(4)(iv), and 45 CFR 146.136(c)(2)(i) and (c)(4)(iv) to reiterate that a plan or issuer may not impose any financial requirement or treatment limitation that is applicable only with respect to mental health or substance use disorder benefits and not with respect to any medical/surgical benefits in the same benefit classification.
The Departments proposed to amend 26 CFR 54.9812-1(c)(2)(ii)(A), 29 CFR 2590.712(c)(2)(ii)(A), and 45 CFR 146.136(c)(2)(ii)(A) to specify that, if a plan (or health insurance coverage) provides any benefits for a mental health condition or substance use disorder in any classification of benefits, benefits for that mental health condition or substance use disorder must be provided in every classification in which medical/surgical benefits are provided. The proposed rules proposed that for purposes of this provision, if a plan (or health insurance coverage) provides any benefits for a mental health condition or substance use disorder in any classification of benefits, the plan or issuer would not be considered to provide benefits for the mental health condition or substance use disorder in every classification in which medical/surgical benefits are provided unless the plan or issuer provides meaningful benefits for treatment for that condition or disorder in each classification, as determined in comparison to the benefits provided for medical conditions and surgical procedures in such classification. The Departments noted in the preamble to the proposed rules that this requirement would ensure that, when plans and issuers cover benefits for a range of services or treatments for medical/surgical conditions in a classification, plans and issuers cannot provide, for example, only one limited benefit for a mental health condition or substance use disorder in that classification. The Departments requested comments on this provision of the proposed rules, including whether and how to define “meaningful benefits” and other potential alternatives.
Many commenters expressed support for this provision of the proposed rules. Several of these commenters noted that this requirement is essential to ensure that plans and issuers are no longer able to deny reimbursement of fundamental evidence-based services for the treatment of mental health conditions and substance use disorders in a way that similar services would never be excluded for medical/surgical care.
Conversely, some commenters opposed adopting any “meaningful benefit” or similar standard in these final rules. Several commenters argued that this proposed requirement exceeds the Departments' statutory authority, and that by requiring “meaningful benefits,” the Departments would convert MHPAEA into a mandate to cover mental health and substance use disorder benefits. Other commenters stated that the approach would require plans and issuers to compare specific treatments, which is inconsistent with congressional intent to preserve the ability of a plan or issuer to determine whether a specific treatment is medically necessary or appropriate, instead of comparing coverage for medical/surgical benefits and mental health or substance use disorder benefits more generally. Additionally, one commenter stated this provision would significantly broaden the scope and complexity of a plan's or issuer's compliance analysis and limit flexibility in benefit design. Some commenters noted that the meaningful benefits standard, as proposed, might adversely affect the operation of closed panel plans, as the provision of any services outside the network could require such plans to evaluate and expand the scope of covered mental health and substance use disorder benefits, or alternatively, restrict out-of-network benefits.
Commenters also expressed concern that the term “meaningful benefits” may not include services such as coordinated specialty care for first episode psychosis, and without a clear definition of the term, such services would not be covered for privately insured individuals. Another commenter stated that the proposed meaningful benefit standard may overlook and devalue the mental health and substance use disorder services provided by primary care physicians and pediatricians, who are generally considered to be medical/surgical providers.
The Departments received many comments on how to define the term “meaningful benefits,” as well as potential alternatives, including whether it would be more practical to require plans and issuers to provide “substantial coverage” of mental health and substance use disorder benefits or benefits for the “primary or most common or frequent types of treatment for a covered condition or disorder” in each classification in which medical/surgical benefits are provided. Many commenters generally recommended defining “meaningful benefits” based on independent medical and clinical guidelines or primary evidence-based treatment based on independent standards of current medical practice. Some commenters recommended that “meaningful benefits” be defined as the
The Departments recognize, as commenters stated, that additional clarifications are warranted regarding the definition of the term “meaningful benefits.” With regard to comments stating that this provision of the proposed rules is a benefit mandate that would require plans and issuers to cover specific treatments, as well as comments that raised concerns about specific mental health and substance use disorder services not being considered meaningful benefits (and therefore not being covered by plans and issuers), the Departments reiterate that this requirement does not require plans and issuers to cover mental health and substance use disorder benefits independently or irrespective of what is provided with respect to medical/surgical benefits.
After considering comments received, the Departments are finalizing the proposed meaningful benefits standard, with modifications and clarifications. These final rules require that, if a plan (or health insurance coverage) provides any benefits for a mental health condition or substance use disorder in any classification of benefits, it must provide meaningful benefits for that mental health condition or substance use disorder in every classification in which medical/surgical benefits are provided. For this purpose, whether the benefits provided are meaningful benefits is determined in comparison to the benefits provided for medical conditions and surgical procedures in the classification, and requires, at a minimum, coverage of benefits for that condition or disorder in each classification in which the plan (or coverage) provides benefits for one or more medical conditions or surgical procedures. Additionally, a plan (or coverage) does not provide meaningful benefits under these final rules unless it also provides benefits for a core treatment for that condition or disorder in each classification in which the plan (or coverage) provides benefits for a core treatment for one or more medical conditions or surgical procedures.
The Departments note that, while these final rules only require plans and issuers to cover a minimum of one core treatment for a covered mental health condition or substance use disorder in every classification of benefits in which the plan (or coverage) provides benefits for a core treatment for one or more medical conditions or surgical procedures, plans and issuers are strongly encouraged to provide more robust coverage to ensure that participants and beneficiaries have access to the mental health and substance disorder care they need. The Departments incorporate this requirement in 26 CFR 54.9812-1(c)(2)(ii), 29 CFR 2590.712(c)(2)(ii), and 45 CFR 146.136(c)(2)(ii) of these final rules, as suggested by commenters, to ensure that plans and issuers offering mental health or substance use disorder benefits do not provide coverage for the full range of medical/surgical benefits in a classification, yet cover only one or a few isolated ancillary benefits for a covered mental health condition or substance use disorder in the same classification. As noted earlier in this preamble, a commenter expressed the concern that this requirement would broaden the scope and complexity of analyzing MHPAEA NQTL compliance and limit benefit design. However, as noted above, this provision amends the general requirement and limits the ability of a plan or issuer to implement a benefit design that provides robust benefits for medical conditions and surgical procedures while offering minimal benefits for mental health conditions and substance use disorders. This requirement, in combination with the other amendments to these final rules, will help to better ensure equitable access to mental health and substance use disorder benefits as compared to medical/surgical benefits.
For purposes of these final rules, a core treatment for a condition or disorder is a standard treatment or course of treatment, therapy, service, or intervention indicated by generally recognized independent standards of current medical practice. This definition of “meaningful benefits” takes an approach that is similar to the suggestion made by multiple commenters, as noted earlier in this preamble, that meaningful benefits be defined as the primary treatment for a condition or disorder based on generally recognized independent standards of current medical practice. However, instead of defining “meaningful benefits” as coverage for the primary treatment for a condition or disorder in a classification, these final rules require the coverage of a core treatment because, from a medical or clinical perspective, there may not be a single primary treatment in many cases for a given condition or disorder (even where there are evidence-based treatments, services, therapies, and standards of care).
These final rules do not set forth specific requirements for plans and issuers to determine what constitutes a core treatment for any particular condition or disorder, but plans and issuers, in determining a core treatment for a condition or disorder in this context, should rely on current evidence-based medical and clinical information. The Departments note that a core treatment for a particular condition or disorder may not necessarily refer to a single item or service but may instead encompass a suite of items and services that together constitute a core treatment, depending on the relevant generally recognized independent standards of current medical practice. In such a case, the Departments expect that under this provision, plans and issuers will cover all components of at least one core treatment if the items and services provided as part of the treatment span a number of classifications, provided the plan or coverage provides benefits for one or more core treatments for any medical conditions or surgical procedures in those classifications. For example, one core treatment for major depressive disorder generally includes prescription drugs and psychotherapy. However, a core treatment may also include only prescription drugs or only psychotherapy (and in cases of severe depression, may also include inpatient hospitalization or other types of residential or outpatient treatment). The Departments note that a core treatment, with respect to a classification, may include the same item or service in other benefit classifications. For example, for major depressive disorder, psychotherapy could be a core treatment with respect to both the outpatient, in-network and outpatient, out-of-network classifications. In response to commenter requests for examples of meaningful benefits, the Departments have modified proposed Examples 5 and 6, and added examples that further illustrate the application of the meaningful benefit standard, as discussed in more detail later in this preamble.
The Departments also recognize the workability concerns raised by commenters with respect to the proposed meaningful benefits standard
The Departments also stated in the preamble to the proposed rules that they recognize that the meaningful benefits proposal is related to an issue characterized as “scope of services” or “continuum of care,” as addressed in the preamble to the 2013 final regulations.
Commenters suggested the Departments add “scope of services” or “scope of covered services” to the illustrative, non-exhaustive list of NQTLs. These commenters noted the importance of psychiatric care being fully integrated with the rest of medicine in primary care settings and in hospitals. Despite the language in the 2013 final regulations on intermediate services,
The Departments acknowledge these comments and the importance of psychiatric care being fully integrated in primary care settings and in hospitals but decline to add scope of services as an NQTL in the illustrative list in these final rules. Like the 2013 final regulations, these final rules are not intended to mandate coverage of any particular benefits. These final rules continue to require mental health and substance use disorder benefits and medical/surgical benefits to be assigned to the six classifications set forth in the regulations. For intermediate services like residential treatment, partial hospitalization, and intensive outpatient treatment, the Departments continue to require plans and issuers to assign covered intermediate mental health and substance use disorder benefits to the existing six benefit classifications in the same way that they assign comparable intermediate medical/surgical benefits to these classifications.
In response to questions about whether the No Surprises Act's requirements that certain out-of-network items and services be covered by plans and issuers might adversely affect the operation of closed panel plans by effectively requiring the coverage of out-of-network mental health or substance use disorder benefits (including in the context of the meaningful benefits standard in these final rules), the Departments note that nothing in these final rules requires a plan or coverage that provides coverage for medical/surgical benefits in the inpatient, out-of-network and outpatient, out-of-network classifications only to the extent required under Code sections 9816 and 9817, ERISA sections 716 and 717, and PHS Act sections 2799A-1 and 2799A-2 to provide additional mental health or substance use disorder benefits in the inpatient, out-of-network and outpatient, out-of-network classifications in accordance with this section. This approach is consistent with language in the 2013 final regulations which stated that compliance with PHS Act section 2713 (requiring coverage for recommended preventive services without any cost-sharing requirements) should not require that the full range of benefits for a mental health condition or substance use disorder be provided under MHPAEA. The proposed amendments to 26 CFR 54.9812-1(c)(2)(ii), 29 CFR 2590.712(c)(2)(ii), and 45 CFR 146.136(c)(2)(ii) would also make explicit the Departments' interpretation that the requirement to provide coverage for mental health and substance use disorder benefits in each classification in which medical/surgical benefits are provided applies on a condition or disorder basis, an interpretation that the Departments have held since the 2010 interim final rules implementing MHPAEA.
The Departments solicited comments on the provisions of the proposed rules on classifications of benefits, including whether additional flexibility is needed to account for benefits that are difficult to place into classifications under the current structure, and whether additional guardrails or protections should be required. The Departments received very few comments on this issue. Most of the comments received related to the classification of certain
In the proposed rules, the Departments proposed to add two examples to 26 CFR 54.9812-1(c)(2)(ii)(C), 29 CFR 2590.712(c)(2)(ii)(C), and 45 CFR 146.136(c)(2)(ii)(C) to illustrate the application of these proposed amendments. The Departments are finalizing these examples with modifications to align with these final rules and are providing additional clarity on the application of the meaningful benefits standard to plans and issuers by redesignating proposed Example 6 as Example 7 and adding new Examples 6 and 8.
In proposed Example 5, a plan generally covers treatment for ASD, a mental health condition,
In proposed Example 6, a plan generally covers diagnosis and treatment for eating disorders, a mental health condition, but specifically excludes coverage for nutrition counseling to treat eating disorders, including in the outpatient, in-network classification. The example in the proposed rules noted that nutrition counseling is the primary treatment for eating disorders in the outpatient, in-network classification and stated that the plan generally provides benefits for the primary treatments for medical conditions and surgical procedures in the outpatient, in-network classification. The proposed example concluded that the plan violates the proposed meaningful benefits standard because, by not providing benefits for nutrition counseling, it fails to provide meaningful benefits for the treatment of eating disorders in the outpatient, in-network classification, as determined in comparison to the benefits provided for medical/surgical conditions in the classification. The Departments noted that, if the plan covers medical/surgical benefits for nutrition counseling, the plan would also violate the prohibition on separate NQTLs applicable only to mental health or substance use disorder benefits.
Several commenters generally expressed support for the proposed Examples 5 and 6, which illustrated clear instances where exclusions of key services for ASD and eating disorders violate MHPAEA, noting that these examples remove any ambiguity whether such exclusions are inconsistent with MHPAEA's requirements. One commenter expressed concerns about references to ABA therapy specifically because referring to a specific treatment may be limiting as evidence evolves regarding ASD. This commenter also cited a relatively weak evidence base for ABA therapy as a reason why the example should not specifically reference ABA therapy. Another commenter requested that Example 6 define “primary treatments” and “meaningful benefits” based on independent medical and clinical guidelines. A few commenters suggested that the Departments use the term “medical nutrition therapy” instead of nutrition counseling, to better reflect the clinical term used in treatment codes. Another commenter suggested providing an additional example related to the treatment of OUD, to reinforce the clear requirement to cover opioid treatment program services as part of the “meaningful” coverage of substance use disorder benefits in all classifications in which meaningful medical/surgical services are covered.
After considering comments, the Departments are finalizing Examples 5 and 6 in the proposed rules with modifications, to make the examples consistent with the clarifications described earlier in this preamble stating that a plan or issuer will be required to provide meaningful benefits for a mental health condition or substance use disorder in a classification if it provides meaningful benefits for one or more medical conditions or surgical procedures in the same classification. These final rules also make minor clarifying changes to reflect more appropriate clinical terminology and introduce two new, additional examples. In each example in these final rules that illustrates the meaningful benefits standard, the group health plan is subject to the requirements of MHPAEA and provides both medical/surgical benefits and mental health and substance use disorder benefits. Additionally, these final rules note that references in these examples to any particular core treatment are included for illustrative purposes only and are not intended to limit coverage in any way. The Departments remind plans and issuers that they must consult generally recognized independent standards of
In Example 5 of these final rules, a plan covers treatment for ASD. As explained earlier in this preamble and in the proposed rules, for purposes of MHPAEA, ASD is a mental health condition under generally recognized independent standards of current medical practice.
New Example 6 of these final rules starts with the same facts as Example 5 and illustrates how these final rules apply where a plan or issuer does not cover a core treatment for any medical conditions or surgical procedures in a classification. The facts of new Example 6 state that the plan is a health maintenance organization (HMO) that does not cover the full range of medical/surgical benefits, including a core treatment for any medical conditions or surgical procedures in the outpatient, out-of-network classification (except as required under Code sections 9816 and 9817, ERISA sections 716 and 717, and PHS Act sections 2799A-1 and 2799A-2), but covers benefits for medical conditions and surgical procedures in the inpatient, in-network; outpatient, in-network; emergency care, and prescription drug classifications. Example 6 concludes that the plan does not violate the rules in 26 CFR 54.9812-1(c)(2)(ii), 29 CFR 2590.712(c)(2)(ii), and 45 CFR 146.136(c)(2)(ii). Because the plan does not provide meaningful benefits including a core treatment for any medical condition or surgical procedure in the outpatient, out-of-network classification (except as required under Code sections 9816 and 9817, ERISA sections 716 and 717, and PHS Act sections 2799A-1 and 2799A-2), the plan is not required to provide meaningful benefits, for any mental health conditions or substance use disorders in that classification.
In Example 7 of these final rules, which was redesignated from Example 6 in the proposed rules, a plan provides extensive benefits, including for core treatments for many medical conditions and surgical procedures in the outpatient, in-network classification, including nutrition counseling for diabetes and obesity. The plan also generally covers diagnosis and treatment for eating disorders, which are mental health conditions, including coverage for nutrition counseling
In response to commenters who requested an additional example illustrating what plans and issuers must do to provide meaningful benefits for the treatment of OUD, the Departments are also finalizing new Example 8. In this new example, a plan provides extensive benefits for the core treatments for many medical conditions and surgical procedures in the outpatient, in-network and prescription drug classifications. The plan provides coverage for diagnosis and treatment for OUD, a substance use disorder, in the outpatient, in-network classification, by covering counseling and behavioral therapies, also referred to as psychosocial treatments. Additionally, the plan provides coverage for diagnosis and treatment for OUD, in the prescription drug classification, by covering medications to treat opioid use disorder (MOUD). Under this example, counseling and behavioral therapies and MOUD, in combination, are one of the core treatments for OUD, in accordance with generally recognized independent standards of current medical practice consulted by the plan.
Example 8 concludes that the plan does not violate these final rules. The coverage of counseling and behavioral therapies and MOUD, in combination, in the outpatient, in-network classification and prescription drug classification, respectively, results in the plan providing meaningful benefits for the treatment of OUD in the outpatient, in-network and prescription drug classifications.
The 2013 final regulations set forth the only classifications of benefits that may be used in applying the parity rules for financial requirements and treatment limitations and listed specific instances when a plan or issuer may divide benefits into sub-classifications beyond the six classifications permitted in paragraph (c)(2)(ii)(A) of the 2013 final regulations. The Departments proposed to reiterate at 26 CFR 54.9812-1(c)(3)(iii), 29 CFR 2590.712(c)(3)(iii), and 45 CFR 146.136(c)(3)(iii) that a plan or issuer may not divide benefits into any sub-classifications other than those specifically permitted under the regulations. The Departments did not propose any substantive changes to the existing sub-classifications or to permit any new sub-classifications. The Departments also proposed non-substantive changes to 26 CFR 54.9812-1(c)(3)(iv), 29 CFR 2590.712(c)(3)(iv), and 45 CFR 146.136(c)(3)(iv) to label the
A few commenters expressed concerns about the classification of certain types of benefits and providers into existing classifications and sub-classifications, including intensive outpatient treatment, partial hospitalization programs, and other team-based models of care. Some commenters requested additional clarification, including a standard definition for the outpatient sub-classifications, citing the fact that some plans and issuers use differing variations to define the outpatient, office visit sub-classification. One commenter requested that the Departments indicate that the sub-classifications applicable to financial requirements and quantitative treatment limitations under paragraph (c)(3)(iii) of the 2013 final regulations may also be used for NQTLs.
As discussed earlier in this preamble, plans and issuers must assign covered intermediate mental health and substance use disorder benefits to the existing six benefit classifications in the same way that they assign comparable intermediate medical/surgical benefits to these classifications. Additionally, plans and issuers that opt to use sub-classifications for outpatient benefits must assign covered outpatient benefits to the permissible outpatient sub-classifications for mental health and substance use disorder benefits in the same way they assign comparable medical/surgical benefits. The Departments are finalizing the clarification that a plan or issuer is not permitted to divide benefits into any sub-classifications other than those specifically permitted under the regulations,
The Departments noted in the preamble to the proposed rules that they have received questions and requests for guidance on how to comply with MHPAEA's requirements with respect to telehealth benefits, including where telehealth fits into the existing classifications and sub-classifications of benefits and whether changes are necessary to account for telehealth benefits. The Departments did not propose any changes in the proposed rules with respect to telehealth benefits and instead stated that they expected plans and issuers to treat telehealth benefits the same way they treat those benefits when provided in person in determining the classification or sub-classifications in which a particular benefit belongs. The Departments requested comments on whether changes to the framework and existing regulations implementing MHPAEA were necessary to account for telehealth benefits.
Several commenters stated that the expansion of telehealth services can supplement a plan's or issuer's network where there are in-person provider shortages and expressed support for treating telehealth benefits the same way those benefits are treated when provided in person. Some commenters discussed the growth and sustained usage of telehealth services since the start of the COVID-19 pandemic, particularly for mental health and substance use disorder services. Commenters stressed that telehealth is particularly valuable in rural and medically underserved areas. However, commenters stressed that telehealth may not be appropriate for all patients and does not fully replace in-person mental health and substance use disorder care. The Departments reiterate that plans and issuers are expected to treat telehealth benefits the same way they treat those benefits when provided in person in determining the classification or sub-classifications in which a particular benefit belongs.
As discussed earlier in the preamble, several commenters requested the Departments take into account telehealth in the relevant data evaluation requirements, as well as the requirements for standards related to network composition; however, the Departments are not addressing any specific data metrics for telehealth in these final rules. After reviewing the comments received on this issue, the Departments are not making changes in these final rules to address how to classify telehealth benefits. The Departments understand that telehealth plays a vital role in the provision of health care, particularly following the COVID-19 pandemic, and may support access to services for those with transportation barriers. When evaluating MHPAEA compliance, plans and issuers must include any covered telehealth benefits in the six classifications used to apply the parity requirements. The Departments also understand that telehealth can be used by plans and issuers as a tool to address provider shortages. These final rules also acknowledge telehealth can be leveraged to mitigate provider shortages in a geographic area and that leveraging telehealth is a potential reasonable action that can be used to address material differences in in-network access.
Treasury and DOL proposed to amend 26 CFR 54.9812-1(d)(3) and 29 CFR 2590.712(d)(3) by adding cross-references to proposed 26 CFR 54.9812-2 and 29 CFR 2590.712-1 to clarify that the comparative analyses and any other applicable information required under the CAA, 2021 are considered to be instruments under which a plan is established or operated, and therefore ERISA plans generally must furnish those documents to plan participants and beneficiaries upon request within 30 days, as required under section 104 of ERISA and 29 CFR 2520.104b-1. Additionally, the Departments proposed to amend 26 CFR 54.9812-1(d)(3), 29 CFR 2590.712(d)(3), and 45 CFR 146.136(d)(3) to clarify that the comparative analyses and any other applicable information required under the CAA, 2021 and the proposed rules qualify as documents, records, and other information relevant to the claimant's claim for benefits to which plans and issuers must provide reasonable access upon request and free of charge. The Departments noted that this clarification is consistent with proposed 26 CFR 54.9812-2(e)(2), 29 CFR 2590.712-1(e)(2), and 45 CFR 146.137(e)(2), which generally would require plans and issuers to make available the comparative analyses required to be performed and documented under the CAA, 2021 when requested by participants and beneficiaries in ERISA plans, including when requested by a participant or beneficiary (or a provider or other person acting as a participant's or beneficiary's authorized representative) who has received an adverse benefit determination related to mental health or substance use disorder benefits. The Departments noted in the preamble to the proposed rules that participants and beneficiaries in ERISA plans should be able to request copies of comparative analyses to ensure they
The Departments received several comments on this aspect of the proposed rules. A few commenters recommended that the Departments add language to the end of paragraph (d)(3) of 26 CFR 54.9812-1, 29 CFR 2590.712, and 45 CFR 146.136 making clear that no part of the comparative analyses or other applicable information required by 26 CFR 54.9812-2, 29 CFR 2590.712-1, or 45 CFR 146.137 may be withheld when requested, including because the information is proprietary, has commercial value, or is commercially protected. One of these commenters also urged the Departments to conform this provision with the standard proposed in 26 CFR 54.9812-2(e), 29 CFR 2590.712-1(e), and 45 CFR 146.137(e), so that individuals can have information at the time of the denial, which is needed to assess whether to raise a parity compliance claim in an internal grievance or appeal.
After considering comments, the Departments are finalizing the amendments to 26 CFR 54.9812-1(d)(3), 29 CFR 2590.712(d)(3), and 45 CFR 146.136(d)(3) as proposed, with a correction. The final rules remove the phrase “upon appeal of an adverse benefit determination” and replace it with “who have received an adverse benefit determination” in the third sentence of 26 CFR 54.9812-1(d)(3), 29 CFR 2590.712(d)(3), and 45 CFR 146.136(d)(3) to conform with the requirements under the DOL claims procedure rule at 29 CFR 2560.503-1 and rules issued by the Departments at 26 CFR 54.9815-2719, 29 CFR 2590.715-2719, and 45 CFR 147.136, which set forth rules regarding claims and appeals. The Departments also decline to exempt plans and issuers from providing certain types of information as part of their comparative analyses, to ensure transparency when an individual (or their authorized representative) requests a comparative analysis. As stated earlier in this preamble, this information is relevant to a claimant's claim for benefits and should therefore be made available.
The proposed rules included proposed amendments to 26 CFR 54.9812-1(e)(4), 29 CFR 2590.712(e)(4), and 45 CFR 146.136(e)(4) to include a reference to 26 CFR 54.9812-2(g), 29 CFR 2590.712-1(g), and 45 CFR 146.137(g) and to reflect current HHS regulations at 45 CFR 156.115(a)(3). The preamble to the proposed rules noted that existing regulations at 26 CFR 54.9812-1(e)(4), 29 CFR 2590.712(e)(4), and 45 CFR 146.136(e)(4) state that nothing in paragraphs (f) and (g) of the 2013 final regulations related to MHPAEA's small employer exemption and increased cost exemption, respectively, changes the requirement under HHS regulations at 45 CFR 147.150 and 156.115, providing that a health insurance issuer offering non-grandfathered health insurance coverage in the individual or small group market providing mental health and substance use disorder services, including behavioral health treatment services, must comply with the provisions of 45 CFR 146.136 to satisfy the requirement to provide EHB. The preamble further stated that HHS has updated 45 CFR 156.115(a)(3) to state that provision of EHB means that a health plan provides benefits that “[w]ith respect to the mental health and substance use disorder services, including behavioral health treatment services, required under § 156.110(a)(5), comply with the requirements under section 2726 of the Public Health Service Act and its implementing regulations.”
The proposed rules also included several technical edits to update paragraph (c)(3)(i) of the 2013 final regulations to add citations, include additional specificity in citations, and strike an outdated reference to limitations on annual deductibles for non-grandfathered health plans in the small group market at PHS Act section 2707(b) and ACA section 1302(c). The Departments did not receive any comments on these provisions and are finalizing as proposed.
The Departments are finalizing proposed technical amendments to 26 CFR 54.9812-1(c)(3)(iii)(A) and (B), 29 CFR 2590.712(c)(3)(iii)(A) and (B), and 45 CFR 146.136(c)(3)(iii)(A) and (B) to update citations. No comments were received on these technical amendments. In finalizing these provisions, the Departments are also restoring parenthetical references to health insurance coverage. Re-insertion of the phrase “health insurance coverage” is not intended to be a substantive change from the proposed rules, but rather corrects this omission and is consistent with the text of the 2013 final regulations.
The CAA, 2021 amended MHPAEA, in part, to expressly require plans and issuers that offer coverage that provides both medical/surgical benefits and mental health or substance use disorder benefits and impose NQTLs on mental health or substance use disorder benefits to perform and document comparative analyses of the design and application of NQTLs, and make their comparative analyses and certain information available to the Departments or applicable State authorities upon request. The Departments proposed to codify this requirement.
Many commenters expressed support for codification of this requirement with several of these commenters noting that such detailed requirements are necessary to clarify what plans' or issuers' analyses must contain, as well as to hold plans and issuers accountable in following such requirements.
Many other commenters criticized the proposed content elements and requested specific changes to the rules as proposed to assist plans and issuers in complying with the requirement to perform and document comparative analyses. Several commenters requested examples of a compliant comparative analysis to assist in understanding what documentation, in the Departments' view, is required to meet the standards. Another commenter stated that critical components of the terms, such as what a test comprises, the standards for
After reviewing comments, the Departments are finalizing the codification of the new statutory requirement that plans and issuers that offer coverage that provides both medical/surgical benefits and mental health or substance use disorder benefits and impose NQTLs on mental health or substance use disorder benefits must perform and document a comparative analysis of the design and application of each such NQTL, with modifications in response to comments as noted. This finalized provision aligns the regulations with the statutory requirements under MHPAEA, as amended by the CAA, 2021. In response to commenter concerns that the proposed rules did not clarify how a plan or issuer should apply the new comparative analysis requirements to factors and evidentiary standards used to design and apply NQTLs that are especially complex (including those related to network composition), the Departments disagree that the proposed rules and these final rules do not rationally relate to factors and evidentiary standards used to design and apply NQTLs like standards related to network composition or methods for determining out-of-network rates. Using the definitions of the terms “processes,” “strategies,” “evidentiary standards,” and “factors” under these final rules to inform the content elements required in a comparative analysis, these final rules provide sufficient guidance for plans and issuers to perform and document their comparative analyses of all NQTLs.
Additionally, these final rules also provide additional guidance on how a plan or issuer with a typical plan or coverage design should collect and evaluate data for NQTLs related to network composition (which must be included in the comparative analysis) under the relevant data evaluation requirements, and provides examples of reasonable actions that plans and issuers may take (and document in the comparative analysis) if such data suggest that NQTLs related to network composition contribute to material differences in access to mental health and substance use disorder benefits as compared to medical/surgical benefits in a classification. The Departments acknowledge that a plan or issuer imposing a complex NQTL with respect to mental health and substance use disorder benefits by relying on a large number of complicated factors and evidentiary standards will likely require more resources to perform and document their comparative analysis in a manner that is compliant with these final rules. The Departments also appreciate that some of the required content for comparative analyses are described broadly and therefore could lead to the Departments and applicable State authorities taking different approaches in determining what constitutes a sufficient comparative analysis. However, these broad descriptions are necessary to ensure that these final rules set forth a single set of content elements that are flexible enough to apply to the wide variety of different NQTLs imposed by plans and issuers with respect to mental health and substance use disorder benefits.
The Departments are not providing an example of a comparative analysis that complies with these final rules, but continue to consider what additional resources and guidance are necessary to assist the regulated community in complying with MHPAEA and these final rules. A plan or issuer that analyzes the design and application of an NQTL along with the relevant data and considers it in the manner described earlier in this preamble will be well positioned to perform and document a comparative analysis in a manner consistent with these final rules. The Departments also note, as stated earlier in this preamble, that they intend to update the MHPAEA Self-Compliance Tool for plans and issuers to determine which data to collect and evaluate. The Departments note that what constitutes a compliant comparative analysis will depend on all the relevant facts and circumstances, including the provisions of the plan or coverage and the relevant NQTL. The Departments remain committed to providing additional guidance to assist with the implementation of these final rules.
The Departments proposed requirements at 26 CFR 54.9812-2(c), 29 CFR 2590.712-1(c), and 45 CFR 146.137(c) governing the content of the comparative analyses required by Code section 9812(a)(8), ERISA section 712(a)(8), and PHS Act section 2726(a)(8). Specifically, the Departments proposed that each comparative analysis would include, at a minimum, with respect to each NQTL imposed under the plan or coverage on mental health and substance use disorder benefits, six elements:
(1) a description of the NQTL;
(2) the identification and definition of the factors used to design or apply the NQTL;
(3) a description of how factors are used in the design or application of the NQTL;
(4) a demonstration of comparability and stringency, as written;
(5) a demonstration of comparability and stringency, in operation; and
(6) findings and conclusions.
In addition to proposing to require the inclusion of specific elements in each comparative analysis, the proposed rules would require each plan or issuer to prepare and make available to the Departments, upon request, a written list of all NQTLs imposed under the plan or coverage and a general description of any information considered or relied upon by the plan or issuer in preparing the comparative analysis for each NQTL.
Several commenters expressed general support for the proposed elements that plans and issuers would be required to include in their comparative analyses under the proposed rules. Some commenters highlighted that the clarity the proposed rules provided would help to reduce confusion as to how plans and issuers should perform and document their comparative analyses, and others reasoned that, by clarifying the comparative analysis content requirements under the proposed rules, regulators will be able to better determine compliance with MHPAEA.
Some commenters, however, stated that the proposed rules did not provide enough clarity, which they stated may make complying with the requirements more challenging. These commenters stated that providing a list of all NQTLs imposed under a plan or coverage would be challenging without either a definitive list of all NQTLs or requiring that plans and issuers perform and document comparative analyses only for NQTL types that the Departments define through regulations or guidance. As discussed earlier in the preamble, several commenters requested that the Departments provide an exhaustive list of NQTLs for which a comparative analysis would be required.
Commenters also expressed concerns about whether plans and issuers would be able to access the information and data necessary to perform and document a sufficient comparative analysis that includes all of the proposed content requirements. Several of these commenters mentioned difficulty acquiring the necessary information and data from their service providers and business partners, while other commenters stated that the proposed content requirements for comparative analyses are superfluous, unhelpful, or unreasonably burdensome. Some commenters described concerns related to cost and feasibility of preparing comparative analyses that would comply with the proposed content requirements.
After reviewing comments, the Departments are finalizing the requirement that a comparative analysis include, at a minimum, the six content elements listed in the proposed rules, consistent with the statute, with several modifications. This section of the preamble to these final rules discusses the comments received with respect to each content element in the proposed rules and the modifications made to each content element in these final rules.
With respect to the requirement to prepare and make available, upon request, a written list of all NQTLs imposed under the plan or coverage and commenters who noted that this requirement would be challenging to meet without a definitive list of all NQTLs, as stated earlier in this preamble, the Departments decline to provide an exhaustive list of NQTLs in these final rules or separate guidance. The Departments also note that, like the substantive requirements for NQTLs, the comparative analysis requirements of MHPAEA are not limited to a list of specific NQTLs, but apply to all NQTLs that limit the scope or duration of treatment under a plan or coverage. As a result, these final rules require that, in addition to the comparative analysis for each NQTL, each plan or issuer must prepare and make available to the Secretary, upon request, a written list of all NQTLs imposed under the plan or coverage.
Additionally, for ERISA-covered plans, the written list must be provided to the named fiduciaries of the plan who are required to include a certification as part of each comparative analysis, as discussed later in this preamble. However, because the Departments recognize that a sufficient comparative analysis will include descriptions of the information, evidence, sources, and standards, as well as factors and evidentiary standards, that the plan or issuer considered or relied upon as part of the content elements, these final rules eliminate the separate requirement that proposed to require plans and issuers to provide a general description of any information considered or relied upon by the plan or issuer in preparing a comparative analysis for an NQTL.
The Departments are aware of reports that some self-insured plans have been unsuccessful in receiving comparative analyses (or the information required to perform and document comparative analyses) requested from their TPAs or other service providers. The Departments emphasize that, as of the date of the publication of these final rules, the statutory requirement to perform and document comparative analyses has been applicable to plans and issuers for over 3 years. The Departments have previously stated that TPAs and other service providers are expected to work closely with plans and issuers to support their needs by providing data and other information about the design and application of NQTLs applicable to mental health and substance use disorder benefits and to medical/surgical benefits so that comparative analyses can be performed and documented (regardless of whether the Departments or an applicable State authority have requested them). Because plans and issuers are the entities required by statute to perform and document comparative analyses and there is no exception to the requirement when necessary information cannot be obtained from another entity, plans and issuers must work with their TPAs and service providers to obtain the information they need for their comparative analyses. Any ERISA-governed group health plans that contract with service providers refusing or otherwise failing to provide the requisite information should notify DOL.
Additionally, as noted earlier in this preamble, the Departments acknowledge the challenges, cost, and complexity of collecting and evaluating data, but are of the view that it is important to include specific content requirements in these final rules, including those related to relevant data to measure the impact of an NQTL on access to mental health and substance use disorder benefits. However, in recognition of these challenges and to align with other changes made in these final rules the Departments have modified certain specific provisions within some of the listed content elements as described in the following paragraphs.
For each comparative analysis, the proposed rules would require a plan or issuer to identify the NQTL that is the subject of the comparative analysis, including the specific terms of the plan or coverage or other relevant terms regarding the NQTL, the policies or guidelines (internal or external) in which the NQTL appears or is described, and the applicable sections of any other relevant documents, such as provider contracts that describe the NQTL, consistent with the statute. This would include the documents that contain the specific language of the NQTL that the plan or issuer imposes. The plan or issuer would also be required to identify all mental health or substance use disorder benefits and medical/surgical benefits to which the NQTL applies, including a list identifying which of those benefits are considered to be mental health and substance use disorder benefits and which benefits are considered to be medical/surgical benefits (consistent with the proposed definitions of those terms). Additionally, each plan or issuer would be required to include in its comparative analysis a description of which benefits are included in each classification of benefits. Finally, under the proposed rules, the plan or issuer would be required to identify the predominant NQTL applicable to substantially all medical/surgical benefits in each classification, including an explanation of how the plan or issuer determined which variation is the predominant NQTL and how the plan identified the variations of the NQTL.
The Departments received few comments on this proposed first content element. One commenter suggested an alternative approach, arguing that, instead of requiring that plans and issuers provide all policies, guidelines, provider contracts, and any other documents where the NQTL “appears or is described,” plans and issuers should be required under these final rules to provide only the documents, policies, or procedures that govern the NQTL.
After reviewing comments, the Departments are finalizing the requirement that a comparative analysis include a description that identifies the NQTL, identifies all mental health or substance use disorder benefits and medical/surgical benefits to which the NQTL applies, and describes which benefits are included in each classification. The Departments emphasize that these final rules still require a plan or issuer to identify the specific terms of the plan or coverage or other relevant terms regarding the
Additionally, as noted earlier in these final rules, the Departments are not finalizing the proposed mathematical substantially all and predominant tests. Therefore, these final rules do not finalize the proposed content requirement that the description of the NQTL in a comparative analysis identify the predominant NQTL applicable to substantially all medical/surgical benefits in each classification, including an explanation of how the plan or issuer determined which variation is the predominant NQTL and how the plan or issuer identified the variations of the NQTL.
Under the second proposed content element, a plan or issuer would be required to identify and define all of the factors considered or relied upon to design or apply the NQTL. The plan or issuer would be required to identify all of the factors considered, as well as the evidentiary standards considered or relied upon to design or apply each factor and the evidence or sources from which each evidentiary standard was derived, in determining which mental health or substance use disorder benefits and which medical/surgical benefits are subject to the NQTL. The plan or issuer would also be required to define each factor, by including a detailed description of the factor, and providing a description of each evidentiary standard (and the source of each evidentiary standard) identified. The Departments stressed in the preamble to the proposed rules that when identifying the evidence or sources from which an evidentiary standard is derived, a plan or issuer should be prepared to provide the copies of the actual evidence or source used, as well as the date and relevant citation for the correct version of the document used.
The Departments received few comments on this content element. One commenter noted that the requirement to provide detailed descriptions of each factor, including evidence and sources relied upon with data and relevant citations, may be challenging for plans and issuers to operationalize. One commenter highlighted that it may be difficult to identify evidence and sources for factors that are processes, such as provider referral requirements, requirements to submit information for clinical review, or the development and approval of a treatment plan, and that processes used to apply the NQTL “in operation” should be analyzed under a separate step of the comparative analysis. Another commenter stated that the requirement to do a historical analysis of the factors utilized by plans and issuers, including dating and providing citations for sources (from the time they decided to impose the NQTL), would be burdensome, and recommended such a requirement be eliminated or that the Departments accept references to factors that are generally accepted business standards without the need for specific dates and citations.
After reviewing comments, the Departments are finalizing the requirement that the comparative analysis identify and define all of the factors considered or relied upon to design or apply the NQTL to mental health or substance use disorder benefits and medical/surgical benefits as proposed, with minor non-substantive changes and a modification to align with changes made in these final rules to the prohibition on discriminatory factors and evidentiary standards. Specifically, these final rules clarify that a plan or issuer must identify every factor and the evidentiary standards considered or relied upon to design or apply each factor, instead of all of the factors considered, consistent with other provisions of these final rules. These final rules also add new 26 CFR 54.9812-2(c)(2)(ii)(C), 29 CFR 2590.712-1(c)(2)(ii)(C), and 45 CFR 146.137(c)(2)(ii)(C) to make clear that plans and issuers must describe any steps taken to correct, cure, or supplement any information, evidence, sources, or standards that are the basis for a factor or evidentiary standard and that would otherwise have been considered biased or not objective in the absence of such steps. Additionally, as discussed earlier in this preamble, these final rules also make minor modifications to better distinguish evidentiary standards from factors within the definitions of those terms, and clarify that, while this content element requires a plan or issuer to include a description of each evidentiary standard used to design or apply each factor, this information is part of the required detailed description of each factor.
While the Departments acknowledge that identifying and defining all factors takes time for a plan or issuer to complete (for newly applied and existing NQTLs), the Departments note that this requirement was not new when it was included in the proposed rules. The CAA, 2021 specifically requires the identification and definition of factors relied upon to design and apply the NQTL,
Without such information, a comparative analysis likely would not accurately describe factors and their sources and would not demonstrate that, when factors are used to design or apply an NQTL to mental health or substance use disorder benefits, they are comparable to, and not more stringently applied, than they are when used to design or apply an NQTL to medical/surgical benefits. The absence of this information would also make it difficult for the Departments and applicable State authorities to confirm compliance with MHPAEA. The Departments stress that to the extent a plan or issuer applies factors that are processes, such as provider referral requirements, requirements to submit information for clinical review, or the development and approval of a treatment plan, such processes include both as written and in operation components. In addition, for these processes, a plan or issuer should be prepared to identify any sources utilized in determining the appropriateness of such requirements. To properly evaluate the comparability and stringency of such factors, it is important that any sources utilized be specifically identified in a comparative analysis. As stated earlier in this preamble, if a plan's or issuer's comparative analysis is requested by the Departments, the plan or issuer generally has multiple opportunities to engage with the Departments on these requirements.
Under the third proposed content element, a plan or issuer would be required to provide a description of how each factor identified and defined in the second content element of the comparative analysis is used in the design or application of an NQTL to mental health and substance use disorder benefits and medical/surgical benefits in a classification. This would include a detailed explanation of how each factor identified and defined in the comparative analysis is used to determine which mental health or substance use disorder benefits and which medical/surgical benefits are subject to the NQTL. The description would also include an explanation of the evidentiary standards or other information or sources (if any) considered or relied upon in designing or applying the factors or relied upon in designing and applying the NQTL, including in the determination of whether and how mental health or substance use disorder benefits or medical/surgical benefits are subject to the NQTL.
In instances in which the application of the factor depends on specific decisions made in the administration of benefits, the comparative analysis would be required to provide information on the nature and timing of the decisions, and the professional designations and qualifications of each decision maker. The proposed rules further provided that, to the extent that more than one factor is identified and defined with respect to an NQTL, the comparative analysis would be required to explain how such factors relate to each other; the order in which all the factors are applied, including when they are applied; whether and how any factors are given more weight than others; and the reasons for the ordering or weighting of the factors. The analysis would also be required to address any deviation(s) or variation(s) from a factor, its applicability, or its definition (including the evidentiary standards used to define the factor and the information or sources from which each evidentiary standard was derived), such as how the factor is used differently to apply the NQTL to mental health and substance use disorder benefits as compared to medical/surgical benefits, and a description of how the plan or issuer establishes such deviations or variations. The Departments noted that the terms “deviations” or “variations” in this context referred to any differences in how a factor is applied with respect to an NQTL.
The Departments received few comments on this content element. One commenter requested that the Departments clarify the requirement to document the qualifications of staff as well as for the professional designations and qualifications of each decision maker involved in the application of a given NQTL factor, requesting that the Departments describe how the requirement to document the professional designations and qualifications of each decision maker should be appropriately applied to health plan operations, and specifically Pharmacy and Therapeutics (P&T) committees.
After reviewing comments, the Departments are finalizing, with minor non-substantive changes, the requirement that plans and issuers provide a description of how each factor identified and defined in the second content element of the comparative analysis is used in the design or application of an NQTL to mental health and substance use disorder benefits and medical/surgical benefits in a classification. This includes the requirement to include a detailed explanation of how each identified and defined factor is used to determine which benefits are subject to the NQTL, and an explanation of the evidentiary standards or other information or sources (if any) considered or relied upon in designing or applying the factors or relied upon in designing and applying the NQTL, including in the determination of whether and how benefits are subject to the NQTL. If the application of a factor depends on specific decisions made in the administration of benefits, the comparative analysis must also provide information on the nature and timing of the decisions, and the professional designations and qualifications of each decision maker. Additionally, if there is more than one factor, the comparative analysis must explain how all of the factors relate to each other; the order in which all the factors are applied, including when they are applied; whether and how any factors are given more weight than others; and the reasons for the ordering or weighting of the factors. Finally, the comparative analysis must address any deviations or variations from a factor, its applicability, or its definition (including the evidentiary standards used to define the factor and the information or sources from which each evidentiary standard was derived), such as how the factor is used differently to apply the NQTL to mental health or substance use disorder benefits as compared to medical/surgical benefits, and a description of how the plan or issuer establishes such deviations or variations. As used in this context, the terms “deviations” or “variations” in these final rules refer to any differences in how a factor is applied with respect to an NQTL.
In response to the request for how the requirement to document professional designations and qualifications applies to health plan operations, including P&T committees, the Departments emphasize that these committees must have members with similar expertise for mental health conditions and substance use disorders as for medical conditions and surgical procedures. This may not necessarily require the same number of members with expertise relevant to
Under the fourth proposed content element, plans and issuers would be required to evaluate whether, in any classification, under the terms of the plan (or health insurance coverage) as written, any processes, strategies, evidentiary standards, or other factors used in designing and applying the NQTL to mental health or substance use disorder benefits are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in designing and applying the NQTL with respect to medical/surgical benefits. The proposed rules would require plans and issuers to include in their comparative analyses, with respect to the NQTL and the factors used in designing and applying the NQTL, documentation of each factor identified and defined in the comparative analysis that was applied to determine whether the NQTL applies to mental health or substance use disorder benefits and medical/surgical benefits in a classification. This would include, as relevant, quantitative data, calculations, or other analyses showing whether, in each classification in which the NQTL applies, mental health or substance use disorder benefits and medical/surgical benefits met or did not meet any applicable threshold identified in the relevant evidentiary standard and the evaluation of relevant data to determine that the NQTL would or would not apply. In addition, such documentation would be required to include records maintained by the plan or issuer documenting the consideration and application of all factors and evidentiary standards, as well as the results of their application. Such records could include meeting minutes, or calculations related to quantitative factors, such as costs.
Plans and issuers would also be required to include in their comparative analyses, in each classification in which the NQTL applies, a comparison of how the NQTL, as written, is applied to mental health or substance use disorder benefits and to medical/surgical benefits, including the specific provisions of any forms, checklists, procedure manuals, or other documentation used in designing and applying the NQTL or that address the application of the NQTL. Additionally, the plan or issuer would be required to include documentation in its comparative analysis demonstrating how the factors are comparably applied, as written, to mental health or substance use disorder benefits and medical/surgical benefits in each classification, to determine which benefits are subject to the NQTL. If there is any deviation(s) or variation(s) in the application of a factor, the plan or issuer would be required to include in its comparative analysis an explanation of the reason(s) for such deviation(s) or variation(s) in the application of a factor used to apply the NQTL, or the application of the NQTL, to mental health or substance use disorder benefits as compared to medical/surgical benefits in the same classification, and how the plan or issuer establishes such deviation(s) or variation(s), including in the definition of the factors, the evidentiary standards used to define the factors, and the sources from which the evidentiary standards were derived; in the design of the factors or evidentiary standards; or in the application or design of the NQTL. In the preamble to the proposed rules, the Departments noted that the terms “deviations” or “variations” in this context refer to any differences in how a factor is applied with respect to an NQTL.
Multiple commenters expressed support for the requirement to demonstrate comparability and stringency as written through the proposed requirements for the fourth content element. However, other commenters raised concerns about the proposal, with some requesting additional clarification or guidance to assist with achieving compliance. For example, one commenter requested that the Departments clarify the difference between the proposed requirement that plans and issuers provide documentation that demonstrates how factors are comparably applied in step 4 of the comparative analysis content requirements, and the service-by-service documentation requirement for each factor under step 3 of the analysis, which requires a description of how factors are used in the design and application of the NQTL.
Another commenter expressed concerns about how this content element may create operational challenges due to its breadth and how it would require plans to also consider other factors that were considered and not applied. Other commenters suggested ways that the Departments might ease the burden of the proposed fourth content element requirements on plans and issuers. One comment included a recommendation that the Departments clarify that plans and issuers can document each factor that was applied, including quantitative data, at the issuer level, rather than at the plan or coverage level. Another commenter encouraged the Departments to limit documentation requirements and enforcement to apply only to the comparability of the NQTL, as written and in operation; to acknowledge that subject matter experts may rely on professional knowledge, experience, and judgment to evaluate the evidentiary standard for identified factors; and to not require the use of quantitative data, calculations, or other analyses. Another commenter stated that the requirement to provide records documenting the consideration and application of all factors and evidentiary standards, as well as the results of their application, was inconsistent with the descriptions elsewhere of requiring a “general description” of the factors relied upon, and therefore urged the Departments to eliminate the requirement to include the actual evidence and related records in the comparative analysis itself.
The Departments note that, while the third content element requires a plan or issuer to provide details on how each factor (and evidentiary standards or other information or sources) is used in the design and application of an NQTL, that content element does not require an evaluation of whether the use of those factors complies with MHPAEA. Instead, these final rules require a demonstration of comparability and stringency, both as written and in operation, in the fourth and fifth content requirements for a comparative analysis, respectively. Additionally, the Departments are of the view that a plan or issuer cannot effectively demonstrate comparability and stringency, as written and in operation, without sufficiently identifying and defining each factor (in the second content element), and explaining how each factor is used to design and apply an NQTL (in the third content element).
After reviewing comments, these final rules retain all of the proposed substantive features of the fourth content element requirements, which require that plans and issuers evaluate whether, in any classification, under the terms of the plan (or health insurance coverage) as written, any processes, strategies, evidentiary standards, or other factors used in designing and applying the NQTL to mental health or substance use disorder benefits are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or
The Departments note that this content requirement does not require the use of quantitative data, calculations, or other analyses, nor does it prohibit plans from relying on professional knowledge, experience, and judgment to evaluate the evidentiary standard for the identified factors. Instead, this content element is meant to show how the factors described in the third content element used in designing and applying an NQTL to mental health and substance use disorder benefits are comparable to, and applied no more stringently than, the factors used in designing and applying the NQTL to medical/surgical benefits in the same classification, as written. Despite the potential operational challenges associated with the breadth of this content element, the Departments are of the view that it is a vital component of comparative analyses and is necessary to demonstrate compliance with MHPAEA as written, consistent with the statute.
The Departments recognize that a factor may be considered, but not used, to apply an NQTL to a specific benefit; however, to the extent such factor is used to design or apply the NQTL to mental health and substance use disorder benefits, it must be addressed in the plan's or issuer's comparative analysis, including in this fourth content element. The Departments are of the view that, to the extent an issuer or TPA uses factors or evidentiary standards to design and apply an NQTL consistently for multiple plans and coverage they administer, nothing in these final rules specifically prohibits the issuer or TPA from performing and documenting a comparative analysis at the level of the issuer (or TPA). However, to the extent relevant data exists at the level of the plan or coverage that measures access to mental health or substance use disorder benefits in a manner that is different than data at the level of the issuer or TPA, the Departments of are the view that a plan's or issuer's comparative analysis must account for that data, as described later in this preamble.
The Departments note that it is possible that the reasons for any deviations or variations in the application of a factor used to apply the NQTL, or the application of the NQTL, might include steps to correct, cure, or supplement information, evidence, sources, or standards that would otherwise be considered biased or not objective in a manner that discriminates against mental health or substance use disorder benefits as compared to medical/surgical benefits. To the extent a plan or issuer has adequately documented such steps as part of its comparative analysis, as required in the second content element of these final rules requiring the identification and definition of the factors used to design or apply the NQTL, the plan or issuer is not required to address such steps again in the fourth content element if otherwise applicable, and instead may include references to the description of such steps in the second content element, as appropriate.
The Departments proposed that plans and issuers be required to evaluate in a comparative analysis whether, in any classification, under the terms of the plan (or health insurance coverage) in operation, the processes, strategies, evidentiary standards, or other factors used in designing and applying the NQTL to mental health or substance use disorder benefits are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in designing and applying the limitation with respect to medical/surgical benefits. A comprehensive explanation would be required to include an explanation of any methodology and underlying data used to demonstrate the application of the NQTL in operation, and the sample period, inputs used in any calculations, definitions of terms used, and any criteria used to select the mental health or substance use disorder benefits and medical/surgical benefits to which the NQTL is applicable.
To comply with the proposed fifth content element, plans and issuers would also be required to identify the relevant data collected and evaluated in their comparative analyses and provide an evaluation of the outcomes that resulted from the application of the NQTL to mental health or substance use disorder benefits and medical/surgical benefits to demonstrate compliance with the design and application requirements. Additionally, the comparative analysis would be required to include a detailed explanation of material differences in outcomes that are not attributable to differences in the comparability or relative stringency of the NQTL as applied to mental health or substance use disorder benefits and medical/surgical benefits, as well as the basis for concluding that material differences in outcomes are not attributable to differences in the comparability or relative stringency of the NQTL. Finally, under this content element, the comparative analysis would be required to include a discussion of any measures that have been or are being implemented by the plan or issuer to mitigate any material differences in access with respect to mental health or substance use disorder benefits as compared to medical/surgical benefits.
Many commenters expressed support for the proposed requirement and standards for the demonstration of comparability and stringency in operation captured in the proposed fifth content element, especially with respect to NQTLs related to network composition and the use and application of clinical guidelines. Commenters supported the proposed requirements for detailed comparative analyses because they reasoned that these requirements would help
After reviewing comments, the Departments are finalizing the proposed requirements for the fifth content element with several clarifications and modifications. The Departments are finalizing the requirement that the comparative analysis must evaluate whether, in any classification, in operation, the processes, strategies, evidentiary standards, or other factors used in designing and applying the NQTL to mental health or substance use disorder benefits are comparable to, and are applied no more stringently than those used with respect to medical/surgical benefits. However, the Departments have removed the references to the terms of the plan (or health insurance coverage) from this requirement, in recognition of the fact that the operations of the plan (or health insurance coverage) may not necessarily be reflected in its terms.
The Departments are also finalizing the requirement that the comparative analysis must include a comprehensive explanation addressing the comparability and stringency of these processes, strategies, evidentiary standards, and other factors. These final rules require that this explanation address how the plan or issuer “evaluates whether” (instead of “ensures that”), in operation, the processes, strategies, evidentiary standards, or other factors used in designing and applying the NQTL to mental health or substance use disorder benefits in a classification are comparable to, and are applied no more stringently than, those used in designing and applying the NQTL with respect to medical/surgical benefits.
In these final rules, the Departments finalize with additional clarifications the proposal that, as part of the proposed fifth content element, a comprehensive explanation of how the plan or issuer evaluates in-operation compliance with the design and application requirements of MHPAEA would include an explanation of the methodology and underlying data used to demonstrate the application of the NQTL, as well as the sample period, inputs used in any calculations, definitions of terms used, and any criteria used to select the mental health or substance use disorder benefits and medical/surgical benefits to which the NQTL is applicable. These final rules also include language to align with changes made to address a lag between when an NQTL is newly designed and applied and when relevant data are available, as well as some limited circumstances in which no data exist that can reasonably assess any relevant impact of an NQTL on access to benefits. Specifically, with respect to an NQTL for which relevant data are temporarily unavailable, the Departments clarify that the comparative analysis must include a detailed explanation of the lack of relevant data, the basis for the plan's or issuer's conclusion that there is a lack of relevant data, and when and how the data will become available and be collected and analyzed.
With respect to an NQTL for which no data exist that can reasonably assess any relevant impact of the NQTL on relevant outcomes related to access to mental health and substance use disorder benefits and medical/surgical benefits, the fifth content element requires the plan or issuer to include as part of the comparative analysis a reasoned justification as to the basis for the conclusion that there are no data that can reasonably measure the NQTL's impact, an explanation of why the nature of the NQTL prevents the plan or issuer from reasonably measuring its impact, an explanation of what data was considered and rejected, and documentation of any additional safeguards or protocols used to ensure that the NQTL complies with all applicable requirements. As noted earlier in this preamble, the Departments recognize that plans and issuers may encounter difficulties when attempting to collect and evaluate relevant data in certain circumstances, and, accordingly, intend to review the explanation provided in a plan's or issuer's comparative analysis to understand those difficulties in determining whether the plan or issuer is in compliance with these final rules. However, the Departments reiterate their intention that the provisions of these final rules regarding the unavailability of data shall only apply in very limited circumstances and, where applicable, shall be construed narrowly.
The Departments are finalizing the proposed requirements for the fifth content element that a comparative analysis must include identification of the relevant data collected and evaluated, as well as documentation of the outcomes that resulted from the application of the NQTL to mental health or substance use disorder benefits and medical/surgical benefits, including the evaluation of relevant data as described earlier in this preamble. This also includes a reasoned justification and analysis that explains whether, and if so, why the plan or issuer concluded that differences in relevant data do or do not suggest the NQTL contributes to material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits.
The Departments recognize that, for NQTLs related to network composition, under these final rules, a plan or issuer must collect and evaluate relevant data in a manner reasonably designed to assess the aggregate impact of all such NQTLs on access to mental health and substance use disorder benefits and medical/surgical benefits. Therefore, for NQTLs related to network composition, comparative analyses should analyze their impact as a whole. Plans and issuers may also, however, indicate in these comparative analyses where one particular NQTL may affect differences in access.
Furthermore, in response to comments, these final rules provide more specifics on the requirement for the fifth content element to provide a detailed explanation of any material differences in access demonstrated by the outcomes evaluated, by requiring a reasoned explanation of any material differences in access that are not attributable to differences in the comparability or relative stringency of an NQTL as applied to mental health or substance use disorder benefits and medical/surgical benefits. This explanation should include a detailed discussion of any considerations beyond a plan's or issuer's control that contribute to the existence of material differences, as well as a detailed explanation of the bases for concluding that material differences are not attributable to differences in the comparability or relative stringency of the NQTL. The Departments note that such an explanation should be comprehensive and include evidence to support the conclusion that considerations beyond a plan's or issuer's control contribute to the
Additionally, these final rules add that, to the extent differences in access to mental health or substance use disorder benefits are attributable to independent professional medical or clinical standards or fraud and abuse measures, and such standards or measures are used as the basis for a factor or evidentiary standard used to design or apply an NQTL, comparative analyses must include documentation explaining how any such differences in access are attributable to those standards or measures. By requiring plans and issuers to analyze and explain material differences in access as demonstrated by outcomes, the Departments aim to encourage plans and issuers to examine closely and critically the extent to which access to benefits is shaped by particular NQTLs so that they can take effective, reasonable actions as necessary to mitigate material differences.
Finally, these final rules specify that, in demonstrating comparability and stringency in operation under the fifth content element in these final rules, plans and issuers must discuss in their comparative analyses the actions that have been or are being taken by the plan or issuer, as necessary, to address any material differences in access. Under these final rules, this discussion must include, as applicable, a reasoned explanation of any material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits that persist despite reasonable actions that have been or are being taken. Additionally, for a plan or issuer designing and applying one or more NQTLs related to network composition, to comply with this aspect of the fifth content element, the comparative analysis must include a discussion of the actions that have been or are being taken, as necessary, to address material differences in access to in-network mental health and substance use disorder benefits as compared to in-network medical/surgical benefits, including those listed in these final rules as examples of possible actions that a plan or issuer could take to comply,
Under the sixth and final proposed content element, a plan or issuer would be required to include in its comparative analysis its findings and conclusions as to the comparability of the processes, strategies, evidentiary standards, and other factors used in designing and applying the NQTL to mental health or substance use disorder benefits and medical/surgical benefits within each classification, and the relative stringency of their application, both as written and in operation. For this purpose, the comparative analysis would be required to include any findings or conclusions indicating that the plan or coverage is not (or might not be) in compliance with the provisions of the proposed rules for NQTLs, including any actions the plan or issuer has taken or intends to take to address any potential areas of concern or noncompliance. The comparative analysis would be required to include a reasoned and detailed discussion of those findings and conclusions, as well as citations to any additional specific information not otherwise included in the comparative analysis that supports the findings and conclusions.
Additionally, the proposed rules would require that the comparative analysis include the date of the analysis and the title and credentials of all relevant persons who participated in the performance and documentation of the comparative analysis. If the comparative analysis relies upon an evaluation by a reviewer or consultant considered by the plan or issuer to be an expert, the comparative analysis would be required to include an assessment of each expert's qualifications and the extent to which the plan or issuer ultimately relied upon each expert's evaluation in performing and documenting the comparative analysis of the design and application of each NQTL applicable to both mental health or substance use disorder benefits and medical/surgical benefits. For plans subject to ERISA, the comparative analysis would be required to include a certification by one or more named fiduciaries who have reviewed the analysis, stating whether they found the comparative analysis to be in compliance with the content requirements of the proposed rules.
With respect to the requirements regarding reliance on an evaluation by an expert, one commenter was supportive of the rule as proposed, and another recommended that the Departments not require that the comparative analyses include the name of the expert so that experts would not be dissuaded from providing their expertise to avoid public identification.
Some commenters were supportive of the fiduciary certification requirement for plans subject to ERISA, with one stating that this would help to ensure that plan fiduciaries meet their obligations to review comparative analyses and monitor their plans for compliance. Many other commenters expressed concern, with some reasoning that requiring a named fiduciary to review and certify that a comparative analysis complies with the content requirements of the proposed rules would put an unrealistic expectation on that fiduciary to understand the required nuance and complexity of the proposed rules. Other commenters opined that the requirement would create an unnecessary burden. These commenters stressed that the requirement would increase compliance costs (as fiduciaries would have to contract with additional service providers to assess compliance) without increasing access to benefits. Other commenters highlighted that Congress knew how to provide for a certification or attestation requirement but refrained from doing so for the MHPAEA comparative analysis. These comments urged against including the fiduciary certification requirement.
The Departments are of the view that requiring plans and issuers to address the findings and conclusions of both comparability and stringency of processes, strategies, evidentiary standards and other factors in their comparative analysis is necessary and appropriate to increase and ensure compliance with MHPAEA. The Departments' experience enforcing the current regulatory framework has shown that, too often, plans and issuers design and apply NQTLs without considering the impact those NQTLs have on access to mental health and substance use disorder benefits as compared to medical/surgical benefits for participants and beneficiaries. In practice, the Departments have encountered many NQTLs that often impose a greater burden on access to mental health and substance use disorder benefits than medical/surgical benefits. Therefore, the Departments are finalizing, with modifications, the requirements for the sixth content element that requires plans and issuers
In response to comments expressing concern with the named fiduciary certification requirement for plans subject to ERISA in the proposed rules, DOL is modifying this requirement. These final rules continue to require, for plans subject to ERISA, the comparative analysis to include a certification by one or more named fiduciaries. However, instead of requiring noted fiduciaries to state whether they found the comparative analysis to be in compliance with the content requirements, these final rules require certification confirming the fiduciary's engagement in a prudent process to select one or more qualified service providers to perform and document a comparative analysis in connection with the imposition of any NQTLs that apply to mental health and substance use disorder benefits under the plan in accordance with MHPAEA and its implementing regulations, as well as satisfaction of the duty to monitor those service providers. For this purpose, DOL expects that a plan fiduciary making such a certification will, at a minimum, review the comparative analysis prepared by or on behalf of the plan with respect to an NQTL applicable to mental health and substance use disorder benefits and medical/surgical benefits; ask questions about the analysis and discuss it with service providers, as necessary, to understand the findings and conclusions documented in the analysis; and ensure that a service provider responsible (in whole or in part) for performing and documenting a comparative analysis provides assurance that, to the best of its ability, the NQTL and associated comparative analysis complies with the requirements of MHPAEA and its implementing regulations. While not required, a plan fiduciary may alternatively provide a certification that each comparative analysis is in compliance with the content requirements, consistent with the proposed certification requirement in the proposed rules.
Effective February 10, 2021, plans and issuers have been required, consistent with the statute, to perform and document comparative analyses and make them available to the Departments or applicable State authorities upon request.
Once a comparative analysis is requested, plans and issuers would be required to provide a comparative analysis within 10 business days of receipt of a request from the relevant Secretary (or an additional period of time specified by the relevant Secretary). Some commenters remarked that 10 business days is not sufficient to provide a comparative analysis upon request. While a few commenters requested that the Departments allow plans and issuers at least 30 days to provide the requested information, others requested a 60-day period to provide an updated comparative analysis. Several commenters highlighted that plans and issuers might not anticipate what is regarded as an NQTL by the Departments and requested that the Departments provide additional time to respond to a request for a comparative analysis for an NQTL that was not on an illustrative list of NQTLs provided by the Departments.
After reviewing comments, the Departments are finalizing, as proposed, the requirement that plans and issuers make available a comparative analysis and submit it to the relevant Secretary within 10 business days of receipt of a request from the relevant Secretary (or an additional period of time specified by the relevant Secretary). Plans and issuers are statutorily obligated to perform and document their NQTL comparative analyses, and to be ready to make them available in response to a request, regardless of whether the plan or issuer has actually received a request from the Departments or an applicable State authority, and have been since February 10, 2021. While these final rules specify content elements that comparative analyses must contain, the Departments have expected, and will continue to expect, that plans and issuers perform and document their NQTL comparative analyses without waiting for a request from the Departments or an applicable State authority. Where plans and issuers have performed and documented their NQTL comparative analyses, additional time will not generally be required to respond to an initial request. The language allowing an additional period of time specified by the Secretary for a plan or issuer to submit a comparative analysis to the Secretary provides sufficient flexibility to plans and issuers where the Departments determine it to be appropriate.
Under the proposed rules, in instances in which the Secretary determines that the plan or issuer has not submitted sufficient information for the Secretary to review the requested comparative analysis, the Secretary will specify to the plan or issuer the additional information the plan or issuer must submit to the Secretary to be responsive to the request. The plan or issuer would be required to furnish this additional information to the relevant Secretary within 10 business days after the relevant Secretary specifies the
After reviewing comments, the Departments are finalizing with minor technical edits the requirement that plans and issuers furnish the additional requested information to the relevant Secretary within 10 business days after the relevant Secretary specifies the additional information to be submitted (or an additional period of time specified by the relevant Secretary). The Departments acknowledge that in some, but not all, cases, 10 business days may not be enough time to respond with supplemental information and recognize that not all requests for supplemental information are equal in terms of the volume and complexity of the information requested, which is why these final rules allow for additional time to be specified by the relevant Secretary (for example, where the volume or complexity of the additional information requested would take more time to collect and provide). The Departments emphasize that additional information must be provided within 10
In instances where the relevant Secretary has reviewed a plan's or issuer's comparative analyses (and any additional information submitted upon request), and made an initial determination that the plan or issuer is not in compliance with the requirements related to NQTLs, the Departments proposed to require the plan or issuer to respond to the relevant Secretary, specifying the actions it will take to come into compliance. The plan or issuer would also be required to provide to the relevant Secretary additional comparative analyses meeting the requirements of the proposed rules that demonstrate compliance with MHPAEA. The plan or issuer would be required to submit these responses to the relevant Secretary not later than 45 calendar days after the relevant Secretary's initial determination that the plan or issuer is not in compliance.
One commenter stated that the proposed penalties for noncompliance are not strict enough to discourage noncompliant issuer behavior and stated that, without strict enforcement penalties, issuers will continue to attempt to skirt the law. Additionally, as discussed earlier in the preamble, other commenters urged the Departments to provide procedural guardrails and due process protections for plans and issuers prior to the final determination of noncompliance, suggesting that the plan or issuer should have an opportunity to meet with the DOL or HHS national office, review the determination, and work together to achieve compliance.
After reviewing comments, the Departments are finalizing this requirement with minor edits. These final rules clarify, however, that the plan or issuer must respond to the initial determination by the Secretary, instead of more generally requiring the plan or issuer to respond to the Secretary, as proposed, to better match the statutory text. In response to the commenter who criticized the penalties for noncompliance, the Departments note that they do not have the statutory authority to increase penalties for violations of MHPAEA, but, as discussed earlier in this preamble, have stepped up enforcement efforts and anticipate continuing to prioritize enforcement of these requirements.
As discussed earlier in the preamble, the statute establishes the comparative analysis request process, as well as the penalties for failing to comply, and, working within this process, the Departments have worked with many plans and issuers to achieve compliance, often without issuing a final determination of noncompliance, as described at length in our MHPAEA Reports to Congress.
If the relevant Department makes a final determination that the plan or issuer is not in compliance with MHPAEA (after issuance of an initial determination of noncompliance, a failure by the plan or issuer to sufficiently respond to the initial determination and specify the actions the plan or issuer will take to bring the plan or coverage into compliance, and a failure to provide additional sufficient comparative analyses within the 45-calendar-day corrective action period), the plan or issuer must, within 7 calendar days of the receipt of the final determination of noncompliance, provide a standalone notice that is not combined with any other notices or disclosures, as required under applicable Federal or State law, to all participants and beneficiaries enrolled in the plan or coverage that the plan or issuer has been determined to not be in compliance with the requirements of the proposed rules. The plan or issuer would also be required to provide a copy of the notice to the relevant Secretary, any service provider involved in the claims process, and any fiduciary responsible for deciding benefit claims within the same timeframe. The Departments noted in the preamble to the proposed rules that this notice gives participants and beneficiaries (or their authorized representatives) critically important information for the pursuit and protection of their own benefit claims and rights and provides a powerful incentive for the plan or issuer to take necessary corrective actions to come into compliance following an initial determination of noncompliance. The proposed rules set forth requirements for the content of this notice and the manner in which it would be required to be provided, including that the notice be written in plain language and in a manner calculated to be understood by the average plan participant. The notice would also be required to include the following statement prominently displayed on the first page, in no less than 14-point font:
Attention! The [Department of Labor/Department of Health and Human Services/Department of the Treasury] has determined that [insert the name of group health plan or health insurance issuer] is not in compliance with the Mental Health Parity and Addiction Equity Act.
The proposed rules would also require the notice contain a summary of
Under the proposed rules, a plan or issuer would be required to make the notice available in paper form. The plan or issuer may alternatively make the notice available electronically (such as by email or an internet posting) if the format is readily accessible, the notice is provided in paper form free of charge upon request, and, in a case in which the electronic form is an internet posting, the plan or issuer timely notifies participants and beneficiaries in paper form (such as a postcard) or email that the documents are available on the internet, provides the internet address, and notifies participants and beneficiaries that the documents are available in paper form upon request. The Departments noted that this approach is similar to standards for when a plan or issuer is permitted to provide a copy of its plan's or coverage's summary of benefits and coverage with respect to participants and beneficiaries who are eligible but not enrolled for coverage.
Multiple commenters recommended that the requirement for plans and issuers to include information in the notice about any opportunity for a participant or beneficiary to have claims reprocessed be revised to instead place affirmative obligations on plans and issuers who receive a final determination of noncompliance to identify affected participants or beneficiaries, reprocess claims, and take other necessary steps to rectify harms. One commenter further suggested that plans or issuers be required to describe the process they will follow and the time frames for reprocessing claims in the notice of noncompliance. Another commenter opposed the requirement that a plan deemed noncompliant send a notice to all beneficiaries, arguing that it amounted to public shaming and that it was beyond the scope of the authorizing statute.
Several commenters suggested that the notice should be provided to participating providers, as such providers may have experienced issues submitting claims to plans and issuers for reimbursement, including improper denials, and stopped submitting further claims. One commenter requested that these final rules be accompanied by guidance and online compliance resources developed by the Departments to help the affected plans and issuers draft their notices of noncompliance.
Several commenters expressed concern that providing notice within 7 calendar days would not be feasible, particularly with the level of information that a plan or issuer is required to compile and provide. Some commenters requested a 30-day period to provide this notice and others requested a 45-day period.
After reviewing comments, the Departments are finalizing with minor clarifications the provision that a plan or issuer must notify all participants and beneficiaries enrolled in the plan or coverage that the plan or issuer has been determined to not be in compliance with the requirements of MHPAEA if the Secretary makes a final determination of noncompliance, as required by the statute. The Departments highlight that the statute specifies the notice be provided within 7 days, and the Departments lack the statutory authority to extend this timeframe, such as to 30 or 45 days, as suggested by commenters. However, in response to comments, these final rules provide that plans and issuers have 7 business days instead of 7 calendar days to notify participants and beneficiaries of a final determination of noncompliance, to provide plans and issuers additional time to prepare the notice of final determination as required under these final rules.
The Departments also note that the relevant statutory language requires notice to be sent to “all individuals enrolled in the plan or applicable health insurance coverage offered by the issuer,” which includes participants and beneficiaries, rather than attending providers. However, if a single notice is provided to a participant and any beneficiaries at the participant's last known address, the requirement to provide notice to participants and beneficiaries is considered satisfied, unless the plan or issuer knows (or reasonably should have known) that the beneficiary's last known address is different, in which case a notice is required to be provided to the beneficiary at the beneficiary's last known address.
The Departments are also finalizing the requirement for ERISA-covered plans that the plan or issuer must provide a copy of the notice to any service provider involved in the claims process, and any fiduciary responsible for deciding benefit claims within 7 business days of receipt of the final determination of noncompliance. DOL recognizes that, depending on the nature of the NQTL and the final determination of noncompliance, not all such determinations will impact adjudicated claims, but is of the view that it is important for such information to be disclosed to relevant service providers and fiduciaries, so they can properly consider whether such changes are required.
The Departments are finalizing the proposed notice content requirements and stress that the notice must describe any other actions the plan or issuer is taking to come into compliance with MHPAEA. Generally, when noncompliance has been identified, the Departments will require plans and issuers to take steps to identify affected participants, reprocess claims, and take other necessary steps to rectify harms; however, the specific steps a plan or issuer will be required to take in response to a final determination of noncompliance will depend on the facts and circumstances of the violations.
As noted throughout this preamble to these final rules, the Departments are committed to ensuring that participants and beneficiaries have access to the mental health and substance use disorder benefits covered under their plan or coverage and are not adversely affected by violations of MHPAEA. The Departments are, however, modifying the requirement that plans and issuers must include a clear and accurate statement as to whether the Secretary has indicated that those actions, if completed, will result in compliance, to reflect that the Secretary may not be able to know whether the actions taken or being taken will bring the plan into compliance. Instead, under these final rules, plans and issuers must indicate whether the relevant Secretary has concurred with those actions. The Departments are also modifying the requirement that the notice include a description of any opportunity for a participant or beneficiary to have a claim for benefits reprocessed to include any opportunity to submit a new claim, to account for participants and beneficiaries who did not initially file a claim for a mental health or substance use disorder benefit that could have been covered.
In the proposed rules, the Departments solicited comment on other measures to increase transparency and better inform the general public regarding final agency determinations of noncompliance of plans or issuers with MHPAEA. One commenter suggested that to improve transparency, all informational materials published to the public following final agency determinations of noncompliance should clearly state the name of the insurer who holds contracts with the TPA or MBHO if a TPA or MBHO is found to be in violation of MHPAEA. The commenter also recommended that the Departments require all States to make notices of MHPAEA violations publicly available via State agency websites and other avenues easily accessible by beneficiaries within a reasonable timeframe after determinations of noncompliance with MHPAEA are made. The Departments acknowledge these comments and will continue to consider them.
In addition to making the comparative analyses available upon request to the relevant Secretary, the Departments proposed to codify a requirement that plans and issuers make available the comparative analyses when requested by any applicable State authority, as well as participants and beneficiaries (including a provider or other person acting as a participant's or beneficiary's authorized representative) who has received an adverse benefit determination related to mental health or substance use disorder benefits and, for ERISA-covered plans, participants and beneficiaries at any time, under authority under ERISA section 104. The Departments noted that, while the proposed rules would codify the statutory requirement to make comparative analyses available to the applicable State authority upon request, the proposed rules would not otherwise apply the timeframes and processes regarding the Secretarial request process to requests for comparative analyses made by applicable State authorities. The Departments requested comments on these proposals, including whether the proposed requirements should apply to plans and issuers with respect to a request made by the applicable State authority for an NQTL comparative analysis, including the proposed notice requirement following a final determination of noncompliance.
Some commenters recommended that the Departments emphasize that health insurance issuers have an unambiguous duty to share their MHPAEA comparative analyses with applicable State authorities upon request even if the relevant Secretary has not also made the same request. Commenters also recommended that the Departments work closely with State insurance authorities to incentivize and facilitate the implementation of comparable review and notice standards. Several other commenters requested the Departments include applicable State authorities in proposed 26 CFR 54.9812-2(b), 29 CFR 2590.712-1(b), and 45 CFR 146.137(b), to make clear that States have the authority to request comparative analyses. Some commenters noted that some issuers refuse to provide comparative analyses to the applicable State authority upon request. Commenters requested guidance concerning requests from participants, beneficiaries, and authorized representatives who have received an adverse benefit determination related to mental health and substance use disorder benefits, including one commenter requesting guidance on how participants, beneficiaries, and their authorized representatives may report potential violations of MHPAEA, and another commenter that requested clear guidelines regarding when the issuance of an adverse benefit determination triggers a requirement by the plan to disclose its comparative analyses, upon request.
After reviewing comments, the Departments are finalizing as proposed the requirement that plans and issuers must make available a copy of the comparative analysis when requested by any applicable State authority, a participant or beneficiary (or a provider or other person acting as a participant's or beneficiary's authorized representative) who has received an adverse benefit determination related to mental health or substance use disorder benefits, and, for ERISA-covered plans, participants and beneficiaries generally, who may request the comparative analysis at any time under ERISA section 104. The Departments are of the view that it is important that participants and beneficiaries are able to access comparative analyses of NQTLs imposed on mental health and substance use disorder benefits under their plan or coverage. In implementing MHPAEA, the Departments have heard repeated complaints that plans and issuers fail to disclose information on the processes, strategies, evidentiary standards, and other factors used to design and apply an NQTL, including the relevant comparative analyses to participants and beneficiaries, despite clear statements by the Departments regarding this requirement.
As specified earlier in the preamble, the statute requires that plans and issuers must provide a copy of the comparative analysis to any applicable State authority upon request. The statute does not require applicable State authorities to follow the same procedure to review and request comparative analyses as that applicable to the Departments, and, therefore, these final rules do not include “applicable State authorities” in the regulatory text that describes this procedure. However, these final rules at 26 CFR 54.9812-2(e), 29 CFR 2590.712-1(e), and 45 CFR 146.137(e) provide that a health insurance issuer in a State must provide the comparative analysis to the applicable State authority (that is, the State insurance commissioner or official or officials designated by the State to enforce the requirements of title XXVII of the PHS Act for the State involved with respect to such issuer) upon request. Additionally, compliance with MHPAEA is not determinative of compliance with other State or Federal laws. Applicable State authorities retain independent authority over issuers of group and individual health insurance coverage and may request or require additional information under their own authorities. Issuers of group and individual health insurance coverage must also comply with State insurance laws, to the extent they do not prevent the application of the requirements of MHPAEA.
The Departments proposed to amend 26 CFR 54.9812-1(i)(1), 29 CFR 2590.712(i)(1), and 45 CFR 146.136(i)(1) to specify that, except as provided in paragraph (i)(2), the proposed rules applicable to group health plans (and health insurance coverage offered by an issuer in connection with such plans)
Several commenters stated that the proposals put forward sweeping changes to the existing rules. To allow time for implementation, commenters requested that the applicability date of the final rules for plans and issuers be for plan years beginning on or after January 1, 2026, or 2 years following publication of the final rules. Several commenters requested an implementation period ranging from 1 to 2 years. Some of these commenters additionally requested a 1-year good faith enforcement safe harbor to allow plans and issuers additional time to comply with the new requirements. Another commenter requested that the proposed rules be effective in 2024, in order to not delay access to vital mental health and substance use disorder benefits.
In order to effectuate these final rules in a timely manner and to ensure that participants and beneficiaries seeking benefits to treat mental health conditions or substance use disorders do not face a greater burden on access to mental health and substance use disorder benefits than medical/surgical benefits, while acknowledging the challenges to plans and issuers of implementing some of the requirements in these final rules, the Departments are finalizing the applicability provision, with some modifications. Accordingly, these final rules apply to group health plans (and health insurance coverage offered by an issuer in connection with a group health plan) on the first day of the first plan year beginning on or after January 1, 2025, except for the meaningful benefits standard, the prohibition on discriminatory factors and evidentiary standards, the relevant data evaluation requirements, and the related requirements in the provisions for comparative analyses, which apply on the first day of the first plan year beginning on or after January 1, 2026. Until these rules are applicable, plans and issuers must continue to comply with the regulations implementing MHPAEA as in effect prior to the effective date of these final rules, and must comply with the statutory provisions of MHPAEA, as amended by the CAA, 2021, both before and after these final rules become applicable. The Departments remind plans and issuers that guidance provided in FAQs Part 45 addresses what information plans and issuers should make available under MHPAEA, as amended by the CAA, 2021, in response to the Departments' request for comparative analyses and can be relied on pending the applicability dates of these final rules.
In response to the comments raising concerns about the magnitude of the changes of the proposed requirements in the proposed rules, particularly in relation to the amount of data collection and analysis that would be required and the time needed by plans and issuers to implement these changes, the Departments are delaying the applicability date with respect to certain provisions in these final rules, as
As part of the request to the Departments to extend the applicability date of these final rules, several commenters raised concerns regarding the amount of new documentation and the time necessary to implement the relevant data evaluation requirements, which, as noted earlier in this preamble, require plans and issuers to collect and evaluate data in a manner that is not currently required. The Departments acknowledge that the relevant data evaluation requirements and the related requirements in the provisions requiring the comparative analyses to demonstrate comparability and stringency, in operation, impose specific new obligations that plans and issuers must comply with in order to demonstrate that an NQTL with respect to mental health or substance use disorder benefits in any classification is no more restrictive in operation than the predominant NQTL that applies to substantially all medical/surgical benefits in the same classification. These final rules identify examples of relevant data that a plan or issuer may be required to collect, but ultimately the plan or issuer will need to determine which data must be collected and analyzed to comply with these final rules, whether any differences reflected in the data are material, and what reasonable actions to take, as necessary, when there are material differences in access to mental health and substance use disorder benefits as compared to medical/surgical benefits in the same classification. Similarly, the Departments recognize that the meaningful benefits standard under these final rules could impose new obligations for plans and issuers, which may require changes to benefit design that may be difficult to implement within a short period of time after the issuance of these final rules. Additionally, the Departments acknowledge that the prohibition on discriminatory factors may require plans and issuers to evaluate their NQTLs to determine whether such limitations are based on prohibited factors or evidentiary standards and whether changes need to be made to such factors or evidentiary standards in order to comply with these final rules.
The Departments agree with commenters that this process will take time and that plans and issuers will face difficulty complying with these requirements by the start of a plan year beginning on or after January 1, 2025. Therefore, the Departments are delaying the applicability date for the meaningful benefits standard under 26 CFR 54.9812-1(c)(2)(ii)(A), 29 CFR 2590.712(c)(2)(ii)(A), and 45 CFR 146.136(c)(2)(ii)(A); the prohibition on discriminatory factors and evidentiary standards under 26 CFR 54.9812-1(c)(4)(i)(B), 29 CFR 2590.712(c)(4)(i)(B), and 45 CFR 146.136(c)(4)(i)(B); the relevant data evaluation requirements under 26 CFR 54.9812-1(c)(4)(iii), 29 CFR 2590.712(c)(4)(iii), and 45 CFR 146.136(c)(4)(iii); and the related requirements in the provisions for comparative analyses;
The Departments proposed severability clauses in the proposed rules to capture the Departments' intent that, to the extent a reviewing court holds that any provision of the final rules is unlawful by its terms or as applied to any person or circumstance, or stayed pending further agency action, the provision would be construed so as to continue to be given the maximum effect permitted by law. The Departments expressed their view that if the proposed rules were finalized as proposed or as a substantially similar version, such rules would provide comprehensive protections that implement MHPAEA's requirements. The Departments noted that the aim of the proposed rules is to ensure that individuals with mental health conditions and substance use disorders benefit from the full protections afforded to them under MHPAEA, and that separate elements of the proposed rules would individually contribute to furthering that aim. Therefore, the Departments proposed that if a court were to hold that any provisions were invalid or unenforceable, any affected provisions would be severable from the rest of the proposed rules, if finalized, and would not affect any other provisions or their application to persons not similarly situated or to dissimilar circumstances.
The Departments did not receive any comments relating to the proposed severability provisions and are finalizing these provisions without change. The Departments note that, while the requirements under 26 CFR 54.9812-1(c)(4)(i) and (iii), 29 CFR 2590.712(c)(4)(i) and (iii), and 45 CFR 146.136(c)(4)(i) and (iii) are part of a comprehensive regulatory scheme, the provisions are separate aspects of the parity analysis and can continue to apply independently if other provisions of these final rules are invalidated. While the Departments have made some changes from the proposed rules in these final rules, as discussed earlier in this preamble, the Departments are not of the view that these changes affect the severability of the provisions of these final rules.
In the preamble to the proposed rules, the Departments requested information on ways to improve the coverage of mental health and substance use disorder benefits through other consumer protection laws, including the ACA. The Departments requested comments on ways to incentivize TPAs to facilitate compliance with MHPAEA on behalf of the plans that they design and administer and methods to enhance access to mental health and substance use disorder benefits through the Departments' implementation of PHS Act section 2706(a), the provider nondiscrimination requirements. The Departments also requested comments
The Departments appreciate the many comments received in response to the request for information and will use the comments to inform potential future rulemaking and guidance.
Prior to the enactment of the CAA, 2023 on December 29, 2022, sponsors of self-funded non-Federal governmental plans were permitted to elect to exempt those plans from (opt out of) compliance with the MHPAEA requirements, among other specified requirement categories, in title XXVII of the PHS Act.
The CAA, 2023 included a provision that sunsets the election option with respect to MHPAEA.
The CAA, 2023 included an exception for certain collectively bargained plans with an opt-out election in effect for MHPAEA that allows for a longer transition to come into compliance with MHPAEA. Specifically, the CAA, 2023 added language to PHS Act section 2722(a)(2) indicating that a self-funded non-Federal governmental plan that is subject to multiple collective bargaining agreements of varying lengths that has a MHPAEA opt-out election in effect as of the date of enactment of the CAA, 2023, that expires on or after the date that is 180 days after the enactment of the CAA, 2023, may extend such election until the date on which the term of the last such agreement expires.
As a result of the CAA, 2023 amendments to PHS Act section 2722(a)(2), self-funded non-Federal governmental plan sponsors may elect to opt out of only the following three PHS Act requirement categories: standards relating to benefits for newborns and mothers (PHS Act section 2725), required coverage for reconstructive surgery following mastectomies (PHS Act section 2727), and coverage for dependent students on a medically necessary leave of absence (PHS Act section 2728).
In the proposed rules, HHS proposed to amend 45 CFR 146.180 to align with the CAA, 2023 amendments to PHS Act section 2722(a)(2). Specifically, HHS proposed to redesignate paragraphs (a)(3) through (7) as paragraphs (a)(4) through (8) and add a new paragraph (a)(3) specifying that a sponsor of a self-funded non-Federal governmental plan may not elect to exempt its plans from any of the MHPAEA requirements on or after December 29, 2022 (the date of enactment of the CAA, 2023), through the process specified in 45 CFR 146.180. HHS also proposed to add new paragraph (f)(4)(iii) specifying that in the case of a self-funded non-Federal governmental plan that is subject to multiple collective bargaining agreements of varying lengths and that has an election with respect to any of the MHPAEA requirements in effect as of December 29, 2022, through the process specified in 45 CFR 146.180, that expires on or after June 27, 2023 (the date that is 180 days after the date of enactment of the CAA, 2023), the plan may extend such election until the date on which the term of the last such agreement expires. HHS also proposed to make conforming edits to paragraph (a)(2), paragraphs (a)(5)(i) and (ii) and (a)(6)(ii), as proposed to be redesignated, and paragraph (f)(1). HHS proposed that the amendments to 45 CFR 146.180 would apply on the effective date of the final rule.
Several commenters expressed support for the proposal to codify the sunset for sponsors of self-funded non-Federal governmental plans to opt out of compliance with the MHPAEA requirements. Many of these commenters recommended prioritizing MHPAEA compliance reviews of these plans as soon as their respective opt-outs are no longer valid. Furthermore, some commenters suggested these plans should immediately be requested to submit the NQTL comparative analyses required under PHS Act section 2726(a)(8)(A) to ensure compliance with MHPAEA. One commenter encouraged HHS to oversee self-funded non-Federal governmental plans to ensure full MHPAEA compliance by such plans that previously opted out of compliance with the MHPAEA requirements.
HHS appreciates the support for the proposed amendments to codify the sunset of the option for self-funded non-Federal governmental plans to elect to opt out of compliance with the MHPAEA requirements. HHS did not receive any comments objecting to the proposed amendments to 45 CFR 146.180 and is finalizing those amendments as proposed in these final rules. HHS is committed to ensuring that self-funded non-Federal governmental plans that previously opted out of compliance with MHPAEA come into compliance with MHPAEA requirements. In determining the degree to which HHS will prioritize compliance reviews, NQTL comparative analysis reviews, and enforcement of MHPAEA with respect to self-funded non-Federal governmental plans once the plans' respective opt-outs sunset, HHS will weigh all relevant considerations, such as the number of complaints of MHPAEA noncompliance with respect to such plans.
One commenter suggested HHS implement a tiered approach to penalty assessment for compliance with MHPAEA that employs varying levels of penalties which consider the severity of and frequency of violations. This approach, according to the commenter, would encourage greater compliance as non-Federal governmental entities diligently work to modify their health plans, and would mitigate detrimental fiscal impacts that would reduce the ability of non-Federal governmental entities to both recruit and retain a strong workforce and continue to provide necessary services to residents.
With respect to penalties for violations of MHPAEA and other PHS Act requirements, HHS has determined that the enforcement processes and
One commenter requested that HHS provide guidance on how self-funded non-Federal governmental plans can leverage the expertise of TPAs to comply with MHPAEA.
HHS acknowledges that most self-funded group health plans contract with one or more TPAs to administer, and in some cases, to design plan benefits. To the extent a self-funded non-Federal governmental plan that contracts with a TPA has previously elected to opt out of MHPAEA compliance, HHS urges the sponsors of such plans to work with their TPAs to ensure that, under the plan's contract with the administrator, if the TPA is required to administer benefits, it collects and analyzes data, and provides data to the sponsor in such a way that will enable the sponsor to comply with all the requirements of MHPAEA. HHS also notes that Federal regulations at 45 CFR 150.305 identify the entity liable for civil money penalties for noncompliance with applicable PHS Act requirements, including MHPAEA. Under the regulations, if a non-Federal governmental plan is sponsored by two or more employers and fails to comply with an applicable PHS Act requirement, the plan is subject to a civil money penalty, irrespective of whether the plan is administered by a health insurance issuer, an employer sponsoring the plan, or a TPA.
The HHS regulation implementing MHPAEA for individual health insurance coverage is codified at 45 CFR 147.160. The regulation currently provides that the group market regulation implementing MHPAEA at 45 CFR 146.136 applies to health insurance coverage offered by a health insurance issuer in the individual market in the same manner and to the same extent as such provisions apply to health insurance coverage offered by a health insurance issuer in connection with a group health plan in the large group market, for policy years beginning on or after the applicability date set forth in 45 CFR 146.136(i). Therefore, through cross-reference, the proposed amendments to 45 CFR 146.136 would apply in the same manner to health insurance issuers offering individual health insurance coverage. Further, HHS proposed to include a cross reference in 45 CFR 147.160 to the comparative analysis requirements that were proposed in 45 CFR 146.137. The cross reference would similarly make clear that the comparative analysis requirements apply to health insurance issuers offering individual health insurance coverage in the same manner that those provisions apply to group health plans and health insurance issuers offering coverage in connection with such plans. HHS proposed that these provisions would apply to health insurance issuers offering individual health insurance coverage for policy years beginning on or after January 1, 2026. Finally, for greater clarity and precision and to align with the statutory terminology, HHS proposed to modify the regulation text to refer to “individual health insurance coverage offered by a health insurance issuer” as opposed to “health insurance coverage offered in the individual market.”
Commenters expressed support for HHS' proposal to apply the proposed amendments to 45 CFR 146.136 in the same manner to individual health insurance coverage. HHS is finalizing this proposal as proposed.
HHS received one comment supporting its proposal to include a cross reference in 45 CFR 147.160 to the comparative analysis requirements that were proposed in 45 CFR 146.137 to make clear that the comparative analysis requirements apply to health insurance issuers offering individual health insurance coverage in the same manner that those provisions apply to group health plans and health insurance issuers offering coverage in connection with such plans, and did not receive any comments opposing that proposal. HHS did not receive any comments on its proposal to modify the regulation text to refer to “individual health insurance coverage offered by a health insurance issuer” as opposed to “health insurance coverage offered in the individual market.” HHS is finalizing these proposals as proposed.
With respect to HHS' proposal that these provisions would apply to individual health insurance coverage for policy years beginning on or after January 1, 2026, one commenter stated that this applicability date should align with the applicability date for self-funded non-Federal governmental plans to come into compliance with MHPAEA's requirements under PHS Act section 2726 and its implementing regulations, while other commenters requested that the applicability date for individual health insurance coverage be delayed until January 1, 2027. As stated in the proposed rules, non-grandfathered individual health insurance coverage must be offered on a calendar year basis. Premium rates must be submitted to the applicable regulator and finalized prior to January 1 of each calendar year and rates cannot be modified during the year. The proposed applicability date is intended to provide time for issuers offering individual health insurance coverage to account for the effects of these rules following publication of the final rules, which precludes alignment with the applicability date for self-funded non-Federal governmental plans, and prior to when rates and benefits must be finalized and approved for the following calendar year. In addition, HHS declines to delay the applicability date until January 1, 2027, in order to ensure the protections of these final rules apply in a timely manner. Therefore, with respect to its proposal that these provisions would apply to individual health insurance coverage, HHS is finalizing the applicability date of January 1, 2026, as proposed.
Until the applicability date, issuers are required to continue to comply with the most recent MHPAEA regulations codified in the CFR
The Departments
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects; distributive impacts; and equity). Executive Order 13563 emphasizes the importance of quantifying costs and benefits, reducing costs, harmonizing rules, and promoting flexibility.
Under Executive Order 12866, “significant” regulatory actions are subject to review by the Office of Management and Budget (OMB). As amended by Executive Order 14094,
(1) have an annual effect on the economy of $200 million or more (adjusted every 3 years by the Administrator of the Office of Information and Regulatory Affairs (OIRA) for changes in gross domestic product); or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, Territorial, or Tribal governments or communities;
(2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;
(3) materially alter the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or
(4) raise legal or policy issues for which centralized review would meaningfully further the President's priorities or the principles set forth in this Executive order, as specifically authorized in a timely manner by the Administrator of OIRA in each case.
Based on the Departments' estimates, OMB's OIRA has determined this rulemaking is significant per section 3(f)(1) as measured by the $200 million or more in any one year. Therefore, the Departments have provided an assessment of the potential costs, benefits, transfers, and alternatives associated with these final rules, and OMB has reviewed these final rules.
Mental health is crucial to a person's overall well-being, and access to quality mental health and substance use disorder treatment is as essential for health as access to medical/surgical treatment.
Failure to treat mental health conditions or substance use disorders can be costly. For example, depression is associated with increased risk of cardiovascular disease, diabetes, stroke, Alzheimer's disease, suicidality, and osteoporosis, and an untreated substance use disorder may result in hospital emergency room care for a drug overdose.
Individuals with mental health conditions or substance use disorders have faced stigma, discrimination, and other barriers inside and outside of the health care system, which can operate as impediments to seeking and obtaining treatment. In 2022, approximately 27 percent of adults 18 and older with any mental illness in the past year who did not receive mental health treatment reported a perceived unmet need for treatment.
The Departments are particularly concerned with access barriers for individuals seeking mental health or substance use disorder treatments. A 2022 Harris Poll sponsored by the National Council for Mental Wellbeing found that 21 percent of adults with unmet mental health care needs in the
Obtaining appointments with primary care physicians instead of behavioral health specialists can be significantly easier. According to the 2023 KFF Employer Health Benefits Survey, 91 percent of firms that offer physical health benefits believe there is a sufficient number of primary care providers in the plans' network, whereas only 67 percent and 59 percent, respectively, believe there is a sufficient number of mental health providers and substance use disorder providers.
In seeking out specialists, individuals tend to face less adequate mental health provider networks than medical/surgical provider networks through their plan or coverage. A 2024 study of 2019-2021 claims and enrollment data for employer-sponsored health plans reported that office visits with psychiatrists and psychologists occurred out-of-network 8.9 and 10.6 times more, respectively, than those with medical/surgical specialist physicians.
Use of out-of-network providers can place additional burdens on families seeking mental health and substance use disorder treatments. A 2022 study of families experiencing out-of-network behavioral health expenditures in their employer-sponsored insurance claims found that roughly half of the families were subject to “balance billing,” with the yearly mean total for those families being $861. This study, however, focused on out-of-network claims submitted by providers to insurers, which suggests that, for individuals seeking treatment from behavioral health care from providers not accepting insurance, the out-of-pocket costs could be even greater.
Despite access barriers to seeking mental health and substance use disorder treatment, the need for these services has only increased. An estimated 37 percent of U.S. adults reported being diagnosed with a mental health condition in 2023, a 5-percentage-point increase from pre-pandemic levels in 2019.
The enactment of MHPAEA, as well as the CAA, 2021
In order to address these issues and improve the health and well-being of both individuals and their communities, the Departments are committed to promoting equal access to treatment for
To implement the requirements of MHPAEA, the Departments published a request for information soliciting comments on issues under MHPAEA in 2009
The CAA, 2021 amended MHPAEA, in part, by expressly requiring group health plans and health insurance issuers that provide both medical and surgical benefits and mental health or substance use disorder benefits and impose NQTLs on mental health or substance use disorder benefits to perform and document their comparative analyses of the design and application of NQTLs. Plans and issuers must provide those analyses to the Departments or applicable State authorities, upon request. Moreover, the CAA, 2021 compels the Departments to request and evaluate no fewer than 20 NQTL comparative analyses per year and submit to Congress and make available to the public an annual report summarizing the Departments' review process and findings. Shortly after the enactment of the amendments to MHPAEA made by the CAA, 2021, the Departments issued FAQs Part 45 to help plans and issuers comply with the comparative analysis requirements.
As documented in the 2022 MHPAEA Report to Congress,
The Departments are committed to ensuring parity in access to mental health and substance use disorder benefits as compared to medical/surgical benefits. By issuing these final rules, the Departments will provide additional guidance to affected parties to facilitate compliance with MHPAEA and to help ensure that individuals with mental health conditions and substance use disorders benefit from the full protections required by law consistent with the fundamental purpose of MHPAEA.
These final rules amend existing regulatory definitions and add new definitions of key terms, including “factors,” “processes,” “strategies,” and “evidentiary standards.” They also add more specificity as to what conditions or disorders plans and issuers must treat as mental health conditions and substance use disorders for purposes of MHPAEA to be consistent with generally recognized independent standards of current medical practice. These final rules also clarify the way the parity requirements apply to NQTLs, including by prohibiting discriminatory factors and evidentiary standards, and provide additional examples of the application of MHPAEA to NQTLs to improve the understanding and ability of the regulated community to comply with the law. Additionally, these final rules require that plans and issuers provide meaningful benefits for covered mental health conditions and substance use disorders in each classification in which meaningful medical/surgical benefits are provided.
Under these final rules, plans and issuers are required to collect and evaluate relevant data in a manner reasonably designed to assess the impact of the NQTL on relevant outcomes related to access to mental health and substance use disorder benefits and medical/surgical benefits. These final rules provide guidance for how to comply with the relevant data evaluation requirements in limited circumstances where data is initially and temporarily unavailable for new and newly imposed NQTLs and where no data exists that can reasonably measure any relevant impact of the NQTL on relevant outcomes related to access to mental health and substance use disorder benefits and medical/
These final rules also set forth specific content requirements for comparative analyses required by the CAA, 2021, and outline the process for plans and issuers to provide their comparative analyses to the Departments or an applicable State authority upon request. Additionally, in these final rules, HHS finalizes regulatory amendments to implement a provision in the CAA, 2023 that sunsets the election option for sponsors of self-funded non-Federal governmental plans to opt out of requirements under MHPAEA.
In their reviews of plans' and issuers' comparative analyses under the requirements of the CAA, 2021, the Departments identified exclusions related to treatment for ASD with ABA therapy and OUD with medication assisted treatment, as well as gatekeeping provisions for treatment applied with respect to mental health or substance use disorder benefits but not to medical/surgical benefits, such as requiring referrals for appointments and prior authorization for mental health and substance use disorder outpatient services, resulting in corrections by the plans and issuers.
The baseline for this analysis includes the MHPAEA statute, as amended, implementing regulations, and subsequent guidance. Benefits, costs, and transfers are measured as changes from the baseline under these final rules. For example, the CAA, 2021 requires that plans and issuers perform and document NQTL comparative analyses. Starting 45 days after the enactment of the CAA, 2021, plans and issuers were required to make their comparative analyses available to the Departments or an applicable State authority upon request. Plans and issuers are further required to make these comparative analyses and other applicable information required by the CAA, 2021 available upon request to participants, beneficiaries, and enrollees in all non-grandfathered group health plans and non-grandfathered group or individual health insurance coverage (including a provider or other person acting as a participant's, beneficiary's, or enrollee's authorized representative) in connection with an adverse benefit determination, as well as to participants and beneficiaries in plans subject to ERISA.
The 2022 and 2023 MHPAEA Reports to Congress documented that many comparative analyses prepared by plans and issuers prior to these final rules were deficient even after multiple requests for correction by the Departments.
The Departments' view is that plans and issuers that were already timely fulfilling the comparative analysis requirements outlined in CAA, 2021 will incur only incremental costs to comply with these final rules. Plans and issuers not already meeting those requirements may, on the other hand, face significant costs to come into compliance with the CAA, 2021 comparative analysis requirements and these final rules. However, because those actions to comply with the CAA, 2021 comparative analysis requirements would need to occur absent these final rules, those costs are included in the baseline.
Therefore, this regulatory impact analysis does not include benefits or costs for performing and documenting comparative analyses for NQTLs applicable to mental health and substance use disorder benefits and medical/surgical benefits, or making them available upon request, as these are already required by the provisions of the CAA, 2021 and are in the baseline. However, this regulatory impact analysis does take into account the expected impacts of these final rules on the preparation of plans' and issuers' comparative analyses, how these final rules will impact plans' and issuers' compliance and, in turn, access for participants, beneficiaries, and enrollees needing mental health and substance use disorder treatments, and whether plans and issuers need to change their policies and procedures to provide benefits in parity.
Some commenters stated that the proposal would require plans and issuers to substantially revise their comparative analyses, arguing the significance of those revisions makes the Departments' approach of conducting an incremental analysis of the additional requirements of this rulemaking inappropriate. In particular, one commenter stated that the imposition of the new “substantially all” test would require all comparative analyses to be redone, thereby imposing the full cost of performing these analyses under the proposed rules. In response, the Departments note that, as discussed earlier in this preamble, they are not finalizing the proposed mathematical tests for applying the substantially all and predominant tests, which would have based these determinations on the dollar amount of all plan payments for medical/surgical benefits expected to be paid. Instead, these final rules provide that an NQTL with respect to mental health or substance use disorder benefits is more restrictive, as written or in operation, than the predominant NQTL that applies to substantially all medical/surgical benefits in the same classification if the plan or issuer fails to satisfy the design and application requirements or the relevant data evaluation requirements. Additionally, the material differences standard in the relevant data evaluation requirements reflects an interpretation of the statutory terms “substantially all” and “predominant” in a manner that takes into account the multi-faceted nature of NQTLs, as well as the complexity of analyzing such NQTLs.
Because the CAA, 2021 requires that comparative analyses be performed and documented, the fact that plans and issuers were not adequately conducting the required analyses and documenting
These final rules define certain terms associated with MHPAEA's requirements for NQTLs and require that plans and issuers provide meaningful benefits for covered mental health conditions and substance use disorders in each classification in which meaningful medical/surgical benefits are provided. These final rules also provide that a group health plan (or health insurance coverage offered by an issuer in connection with a group health plan) may not impose any NQTL with respect to mental health or substance use disorder benefits in any classification that is more restrictive, as written and in operation, than the predominant NQTL that applies to substantially all medical/surgical benefits in the same classification. For this purpose, the plan and issuer must ensure that the NQTL satisfies both the design and application requirements and the relevant data evaluation requirements. Specifically, under these final rules, plans and issuers must continue to satisfy the design and application requirements from the 2013 final regulations, which require an analysis of the processes, strategies, evidentiary standards, and other factors used to design and apply NQTLs to mental health and substance use disorder benefits as compared to medical/surgical benefits. Plans and issuers have struggled with these requirements, as detailed in the Departments' 2022 MHPAEA Report to Congress
In particular, to comply with the required content elements for a comparative analysis, plans and issuers must describe each NQTL and identify and define all the factors and evidentiary standards used to design or apply the NQTL. The plan or issuer must also describe how the factors identified are used in the design and application of the NQTL, and evaluate whether any processes, strategies, evidentiary standards, or other factors used in designing and applying the NQTL to mental health or substance use disorder benefits are comparable to, and are applied no more stringently than, those with respect to medical/surgical benefits, both as written and in operation. Finally, plans and issuers must address the findings and conclusions as to the comparability of the processes, strategies, evidentiary standards, and other factors used in designing and applying the NQTLs within each classification, and the relative stringency of their application, both as written and in operation.
Accordingly, these final rules will increase plan and issuer compliance with the requirements for imposing NQTLs under MHPAEA and help ensure that NQTLs applicable to mental health and substance use disorder benefits are no more restrictive than the predominant NQTLs applicable to substantially all medical/surgical benefits in the same classification. The Departments acknowledge that past parity implementation has lacked consistency and thus had varied results, particularly for laws limiting management of behavioral health benefits or NQTLs. A 2012 study on the implementation of Oregon's 2007 comprehensive parity law, which mandated benefits for substance use disorders and restricted the use of behavioral health management for fully insured commercial group plans, compared their expenditures for treatments to those of self-funded plans not covered by Oregon's law. The study found that while plan expenditures for alcohol treatment services increased, other substance use treatments were not associated with a statistically significant increase in expenditures and that overall, the impact of parity on spending was not significantly different from zero.
The Departments are of the view that, by finalizing these rules and requiring better documentation related to how plans and issuers design and apply NQTLs, the Departments and applicable State authorities will be better able to enforce existing parity requirements. In doing so, access to in-network, medically necessary treatments will increase for a significant segment of individuals whose health coverage will be affected by these final rules, resulting in better health outcomes and lower out-of-pocket costs related to mental health and substance use disorder benefits for participants, beneficiaries, and enrollees.
Plans and issuers will incur costs to comply with the requirements in these final rules. However, the Departments have determined that the benefits of these final rules justify the costs. In accordance with OMB Circular A-4, Table 1 depicts an accounting statement summarizing the Departments' assessment of the benefits, costs, and transfers associated with these regulatory actions. The Departments are unable to quantify all benefits, costs, and transfers of these final rules, but have sought, where possible, to describe these non-quantified impacts.
The effects in Table 1 reflect non-quantified impacts and estimated direct monetary costs resulting from the provisions of these final rules.
The following table summarizes the number of plans, issuers,
Under the Departments' final rules, issuers are responsible for providing data and comparatives analyses for individual market plans. For small and large group market fully insured, employer-sponsored plans, including non-Federal governmental plans, both employer-sponsored health plans and health insurance issuers are responsible for providing data and comparative analyses, though for those plans, underlying data and analyses will likely be provided by issuers that design and market the plans. Self-funded group health plans, while responsible for complying with these rules, will likely seek assistance from their TPAs, MEWA administrators, and other service providers for collecting and analyzing the data, and generating the comparative analyses.
The Departments estimate that the final rules will affect 479 health insurance companies nationwide that provide coverage, including mental health and substance use disorder benefits, in the group and individual health insurance markets, with 1,467 issuers (health insurance company/State combinations).
Issuers, TPAs, and MEWAs provide key support for plan compliance with laws and regulations for group health plans, including MHPAEA. The Departments' understanding, based on discussions with the regulated community and numerous direct investigations of plans, including the review of comparative analyses, is that issuers of fully insured coverage provide a menu of benefit combinations from which interested parties select their coverage designs. These coverage designs may include different features, such as varying deductibles, copayments, and coverage for specific items and services, allowing interested parties to choose the plan that best suits their health care needs. While issuers of fully insured health plans are responsible for overseeing the compliance framework and ensuring that plans comply with legal and regulatory requirements, TPAs play a crucial role in facilitating compliance for self-funded plans by providing administrative support, including claims adjudication, member enrollment, and customer service.
TPAs and insurance companies providing administrative services only (ASO) to self-funded plans overwhelmingly design the plans, administer the networks, manage claims, provide plan services, maintain and hold the data relevant for the comparative analyses, and help ensure MHPAEA compliance.
While the requirement to comply with MHPAEA is directly applicable to group health plans and health insurance issuers, the Departments anticipate that issuers and TPAs are best situated to conduct comparative analyses as required under the CAA, 2021 and these final rules, and to provide the analyses in an efficient and cost-effective manner, helping to reduce the compliance burden. Self-funded plans may, however, incur some additional costs to complete the comparative analysis initially prepared by the issuer or TPA to address unique plan issues and include all the information necessary to perform comparative analyses.
One commenter stated they are not aware of any TPA that has assumed compliance obligations wholesale, though they acknowledged that TPAs had cooperated and provided data in response to a government audit. Another commenter reported that TPAs working on behalf of group health plan sponsors struggle to obtain needed information to perform and document comparative analyses, such as when claims expenditure data collected by TPAs is not compatible for testing purposes and, moreover, is not reported at the plan sponsor level. It should be noted that these reported challenges are not unique to TPAs, but are the same issues facing issuers and self-funded plans. However, TPAs are more likely than plan sponsors to have expertise to navigate the challenges.
Other commenters supported the Departments' assumptions that employer-sponsored plans rely on their services providers and TPAs to conduct their comparative analyses. One commenter noted that only the insurance carriers, TPAs, and service providers that play a role in designing plans, administering networks, managing claims, providing plan services, and maintaining and holding the data relevant for the comparative analyses have the expertise to comply with and fulfill all the requirements outlined in the proposed rules. Another commenter noted that self-funded plan sponsors rely on TPAs and/or the owners of provider networks to develop plan designs and develop and impose NQTLs, arguing that if the TPA or owner of the provider networks do not share claims data, then the TPA or owner of the provider networks should be required to conduct analyses for the plans.
While the Departments acknowledge these concerns, based on their own observations when reviewing comparative analyses, the Departments expect that issuers, TPAs, and service providers will continue to provide assistance to evaluate NQTLs and perform and document comparative analyses, including data required under these final rules, for their plan clients. The Departments emphasize that the requirement to perform and document comparative analyses of the design and application of NQTLs has been effective under the CAA, 2021 for more than 3 years (since February 10, 2021) and is an independent statutory obligation that is not dependent upon a request by the Secretaries or an applicable State authority. Issuers and plans, in conjunction with their TPAs for self-funded group health plans, have had ample time to develop the internal structures required for analyzing NQTLs to ensure that their plans and coverage comply with MHPAEA. Finally, while plans could be charged for the services of issuers, TPAs, and other service providers, this arrangement provides for economies of scale in compliance, as issuers evaluate NQTLs, produce or assist in producing the comparative analyses for their products and plan designs, and, in combination with TPAs and other service providers, provide support for other requirements.
Group health plans sponsored by employers with 50 or more employees that offer mental health and substance use disorder benefits are generally required to comply with MHPAEA. Although MHPAEA includes a small employer exemption, group health plans sponsored by employers with less than 50 employees who purchase non-grandfathered small group coverage are required to comply with MHPAEA under the EHB requirements of the ACA. In this analysis, plan size is used as a proxy for employer size to determine if a plan is affected. Evidence suggests that most large group plans offer mental health and substance use disorder benefits and nearly all participants are covered.
The Departments estimate that approximately 1,719,000 fully insured, non-grandfathered ERISA-covered group health plans with less than 50 participants and approximately 411,000 ERISA-covered group health plans with 50 or more participants, of which approximately 246,000 are self-funded group health plans, will be affected by these final rules.
The estimated compliance costs associated with these final rules are
Most employer-sponsored health plans are exempt from filing a Form 5500 due to size and the absence of plan assets, the majority of which are fully insured. Large health plans are required to file a Form 5500, regardless of funding arrangement. For statistical year 2021, 81,800 health plans filed a Form 5500. Of these plans, 50,600 were self-funded or mixed-insured,
The Departments assume that some of the largest plans will incur the full cost of preparing the comparative analysis and conducting the required data analyses. Commenters suggested that some large, self-funded plans would conduct the comparative analyses themselves. To account for these plans, the Departments estimate that 8 percent of self-funded plans with 500 or more participants, or 962 ERISA covered plans
Finally, HHS estimates that 230 self-funded non-Federal governmental plans will be affected by the implementation of the CAA, 2023 provision that sunsets the MHPAEA opt-out election.
HHS solicited comments on the estimated number of self-funded non-Federal governmental plans and the estimated number of plan participants and beneficiaries that would be affected by the implementation of the CAA, 2023 provision that sunsets the MHPAEA opt-out election. Although HHS did not receive comments on the estimated
There are approximately 56,984,000 participants and 50,407,000 beneficiaries in ERISA-covered group health plans with 50 or more participants,
Since the enactment of MHPAEA, participants have increasingly utilized behavioral health services through their health coverage. Between 2007 and 2017, private insurance claim lines for behavioral health diagnoses increased by 320 percent.
The COVID-19 public health emergency (PHE) exacerbated the need for mental health and substance use disorder treatments. During the pandemic, many adults consistently reported anxiety and depressive disorders symptoms, with 4 in 10 adults reporting symptoms in February 2021. Two years later in 2023, even as the pandemic receded from its peak, approximately 3 in 10 adults were still reporting symptoms of anxiety and depression.
The pandemic may have long-term effects on mental health and substance use disorders, suggesting that the number of individuals affected by expanding access through their health plans will only continue to grow. A 2022 study examined the chronic effects of the pandemic on the mental health of Veterans and found that COVID-19 survivors were associated with a higher risk of developing mental health disorders, including anxiety, stress, depression, substance use, and neurocognitive decline, compared to individuals who did not have COVID-19.
Research has found mixed evidence on the impact of State parity laws prior to the implementation of MHPAEA. While the specifics of the State-level programs might be different from MHPAEA, this research can nonetheless provide important context and suggestive evidence for how modifications to parity policies such as the MHPAEA program
For example, a 2006 study evaluated changes in mental health care utilization before and after States implemented parity laws, comparing them with States that did not enact such laws in the same year controlling for State and year fixed effects. Using data from the 2001, 2002, and 2003 NSDUH, the study categorized individuals with individual or employer-sponsored health insurance by their level of mental and emotional distress during their most challenging month in the past year and found that State parity laws increased the likelihood of using any mental health care in the past year by up to 1.2 percentage points for individuals with lower distress levels and up to 1.8 percentage points for those with moderate distress levels. However, it is important to note that the study did not find a statistically significant effect on the mental health care utilization for individuals with severe distress levels. The authors noted that this group had already been more likely to use mental health care even before the State parity laws were implemented, suggesting they may have sought such care regardless of these laws.
Similarly, a 2008 study examined whether State parity laws affect mental health care utilization differently among low-income individuals and those with poor mental health conditions. To examine these effects, the study used pooled cross-sectional data from the National Survey of America's Families conducted in 1997, 1999, and 2001 and found that employees of small firms were more likely to use mental health and substance use disorder care after the implementation of State parity laws. While the study found no effect of parity for low-income adults for all employers, when limiting the sample to small employers, the study found that parity was associated with a 5-percentage-point increase in the probability of low-income individuals using mental health services. The study also found a large increase among those with poor mental health conditions employed by small employers, although this finding is only significant at a 10-percent significance level. The study did not find an effect for individuals with poor mental health for medium or large employers. The authors attributed these inconclusive results to the small sample size; therefore, the findings in this study should be interpreted with caution.
Additionally, a 2013 study examined the effect of State parity laws on substance use disorder treatment using national survey data from 2000 to 2008 using State and year fixed effects to compare non-parity States to parity States prior to the implementation of MHPAEA. The authors reported that the baseline substance use disorder treatment rate before State parity laws were enacted was 1.40 percentage points in all specialty substance use disorder treatment facilities and 1.10 percentage points in facilities accepting private insurance. Relative to these baseline rates, this study found that the implementation of any parity law increased the treatment rate by 9 percent in all specialty substance use disorder treatment facilities and by 15 percent in all treatment facilities accepting private insurance. When controlling for the comprehensiveness of the State parity law, the study found that full parity
Other studies have found that State parity laws have positive effects that extend beyond the use of mental health care. For example, a 2013 study comparing suicide rates in States with and without parity laws during two distinct periods: 1990 to 1997 and 1998 to 2004, the period when the majority of States (22 out of 29) had implemented parity laws. The study found that State parity laws were associated with a 5-percent decrease in suicide rates, even after subjecting the analysis to several robustness checks.
Similarly, a 2022 study examined how State parity laws affected suicide rates and educational outcomes among college-level students. Utilizing survey
Finally, a 2015 study examined the effect of State parity laws on individuals aged 25 to 64 with moderate levels of distress.
Although the previous three studies suggest mental health outcomes may improve following the initiation of State parity policies, it is not clear from this research the mechanism driving any outcome improvements. Given a lack of data in both studies, the authors cannot directly show that State parity laws increase mental healthcare utilization. The causal impact of these policies, including whether parity would increase mental healthcare utilization, which would in turn improve health outcomes such as the suicide rate, can therefore not be directly ascertained. Absent any utilization increases, it is possible that parity policies could improve the quality of care itself without additional demand, but further research is needed to answer how specifically parity laws affect downstream health outcomes.
In contrast, some studies have found that State parity laws did not significantly improve access to mental health and substance use disorder care. For instance, a 2000 study focused on patients with mental health needs examined the impact of State parity laws on their insurance coverage, with varying specifications which defined this as insurance status, insurance generosity, and perceived access to care. Using national survey data from 1996 to 1998, the study found no statistically significant impact on insurance coverage or access to care for patients with mental health needs following the passage of State parity laws. The authors attributed this finding to several limitations of the study, including a relatively small sample size which limited the narrowness of State parity laws in terms of impact types of insurance coverage, and the significant number of individuals with mental health or substance use disorders who do not have health insurance coverage. Most significantly, while the study examined the impact of parity laws on access to insurance and care, it was not limited to behavioral health care and so the impact on those interventions may not have been statistically significantly captured.
Furthermore, a 2013 study examined how State parity laws affected access to mental health care services for privately insured children and youths aged three to 17 with ASD. Using national survey data from 2005 to 2006 and adjusting for potential selection bias of States that enacted parity legislation, the study did not find evidence that State parity laws increased the utilization of mental health services for children with ASD. The authors suggested that differences in the availability of services, therapies, and treatments across States could explain this lack of impact, as these children may not benefit from the same protections and service access afforded to children with other mental health conditions under State parity laws. Additionally, the authors acknowledged limitations in their analysis, noting that the study did not provide information on the implementation of State parity laws. They cautioned that measurement errors could arise due to the potential delayed effects associated with varying implementation timelines of the State parity laws.
Several studies have investigated the effect MHPAEA had on utilization of treatment for mental health conditions or substance use disorders. In general, the studies have found either a small or no effect on utilization after the implementation of MHPAEA.
For instance, a 2014 study analyzed pooled data from seven Federal Employees Health Benefits (FEHB) plans, four of which contracted with carve-out plans
Along the same lines, a 2016 study used an interrupted time series model to investigate the effect of MHPAEA on the probability of specialty behavioral health treatment, levels of utilization, and expenditures for enrollees aged 27 to 64 in group health plans between 2008 and 2013, with Optum carve-outs. The authors focused on the following outcomes: expenditures (insurer and patient), number of outpatient visits (assessment/diagnostic evaluation, individual psychotherapy, family psychotherapy, and medication management), and number of days of care (structure outpatient, day treatment, residential care, and acute inpatient care). In the post-parity period, 2011 to 2013, the effect of parity differed by type of care: the probability of using any assessment/diagnostic evaluation, medication management, of family psychotherapy visits decreased, while the probability of using structure outpatient care and inpatient care increased. Under multiple specifications and sensitivity tests, the authors found that parity had “modest to no effect on service use.” Though they did find modest evidence that costs shifted from patient to health plans.
Similarly, a 2019 study looked at insurance claims of enrollees under age 65 with continuous enrollment in a large group, employer-sponsored fully insured health plan between January 2005 and September 2015 to analyze whether parity implementation was associated with utilization and spending changes in behavioral health services compared to medical/surgical services. Parity had a positive but small, statistically significant impact on the share of enrollees that used any outpatient substance use disorder services. Specifically, parity increased the percentage of enrollees that used any outpatient substance use disorder services by 0.023 percentage points in the first year following the implementation of MHPAEA and 0.068 percentage points by the end of 2015 relative to pre-MHPAEA levels. The authors also found that parity led to an increase in the average frequency of monthly services per user for both mental health and substance use disorder services, at a rate of 0.05 services per user for mental health services and 0.054 services per user for substance use disorder services. This implies that people receiving services received more services, on average.
Research has found mixed evidence on the impact of MHPAEA on spending. Some studies did not identify a change in out-of-pocket spending following the passage of MHPAEA, whereas others found that MHPAEA increased out-of-pocket spending on substance use disorder care.
For instance, a 2017 study examined whether MHPAEA increased behavioral health expenditures and utilization among a population with substance use disorders. Using Optum's claims and eligibility data from 2008 to 2013, the authors compared the utilization and expenditures for adults with alcohol or drug use disorders across several periods: pre-parity (2008 to 2009), transition period (2010),
Additionally, a 2015 study examined whether MHPAEA was associated with changes in the out-of-network services for substance use disorder services. Using a 2007 to 2012 longitudinal, commercial claims database and employing an interrupted time-series design to analyze these effects, the study found that MHPAEA was associated with an increased probability of using out-of-network services at a rate of 0.0024 service users per month, an increased number of out-of-network out-patient visits at a rate of 0.0016 service users per month, and an increased average total spending on out-of-network services by $49.81 per user per month, though it was found to have no effect on out-of-pocket spending. This result would represent a shift in expenses borne by the insurer, which might or might not be passed through to the insured through higher premiums, but the study lacked the data to assess this possibility. The authors acknowledged that the study was not able to examine the adequacy of substance use disorder provider networks, which may have influenced enrollees pursuit of out-of-network care.
Finally, a 2014 study examined the impact of MHPAEA on the utilization and spending of substance use disorder treatments. Using 2009 to 2010 administrative claims data from Aetna insurance, the study compared changes in outcomes among health plan enrollees one year before (2009) and one year after (2010) the implementation of MHPAEA, compared to enrollees covered by State parity laws in place prior to MHPAEA. The study found the MHPAEA was associated with a modest increase in spending on substance use disorder treatments ($9.99 per health plan enrollee), but did not find significant changes in treatment initiation,
The Departments expect that these final rules will improve the quality of the comparative analyses performed and documented by plans and issuers required by MHPAEA, as amended by the CAA, 2021; help plans and issuers better understand and fulfill their obligations under MHPAEA; and promote greater clarity regarding differences in access to mental health and substance use disorder benefits as compared to medical/surgical benefits. By specifying more details on how to perform and document NQTL comparative analyses, the Departments expect improvements in plan and issuer compliance with the requirements for imposing NQTLs under MHPAEA, and by doing so, increased access for participants, beneficiaries and enrollees to mental health and substance use disorder services.
Thus, these final rules will generate the following economic and societal benefits for participants, beneficiaries, and enrollees:
• improved understanding of and compliance with MHPAEA by plans and issuers, resulting in better frameworks for regulators, plans, and issuers to determine whether plans and issuers are complying with MHPAEA with respect to NQTLs applicable to coverage of mental health and substance use disorder benefits,
• greater access and utilization of mental health and substance use disorder services in response to a reduction in barriers to mental health and substance use disorder coverage (the greater utilization being a cost of the rule), resulting in better health outcomes among those with mental health conditions or substance use disorders, and
• reduced adverse impacts on the families, friends, caregivers, and coworkers of people who suffer from untreated or under treated mental health conditions or substance use disorders based on their improved access to treatment.
This analysis provides a mainly qualitative discussion of the benefits associated with these final rules, as the Departments do not have the data necessary to quantify the likely benefits associated with the additional guidance and its impact on ensuring better compliance with the rules related to NQTLs and access to mental health and substance use disorder benefits. Where possible, however, the Departments have provided estimates to illustrate some of the benefits of these final rules. The illustrative calculations address overlapping phenomena and thus are not summed due to the noteworthy potential for double-counting (moreover, for only a subset of the illustrated benefits have the associated treatment costs been quantified).
In addition, the Departments have identified several transfers that will occur due to this rulemaking, such as decreases in out-of-pocket spending and increases in premiums. These transfers are discussed in section IV.9 of this regulatory impact analysis.
The Departments requested comments and data in the proposed rules related to how the Departments might quantify these benefits. While one commenter stated that the Departments had not quantified the benefits of the proposal, they did not provide any data or recommendations on how these benefits could be quantified. Another commenter suggested that the Congressional Budget Office's (CBO) cost estimate
As noted earlier, the 2022 MHPAEA Report to Congress
These final rules will clarify and strengthen the obligations of plans and issuers under MHPAEA, thus promoting compliance, by:
• placing renewed focus on the elimination of more restrictive barriers to access to mental health and substance use disorder benefits as compared to medical/surgical benefits,
• standardizing the definitions associated with the parity analysis for NQTLs applicable to mental health and substance use disorder benefits and medical/surgical benefits,
• providing examples of the application of MHPAEA to NQTLs, and
• setting forth the content and data evaluation requirements of the NQTL comparative analyses.
These final rules will help parties better understand what plans and issuers need to do to comply with MHPAEA, reduce uncertainty about compliance status, and help plans and issuers better identify areas they need to improve upon as well as reduce the need to revise analyses upon the Departments identifying non-compliance. In the course of implementing these final rules, the Departments anticipate that parties will adjust their policies and procedures in order to come into compliance and offer better coverage of mental health and substance use benefits to participants, beneficiaries, and enrollees.
Many commenters supported modifying existing definitions and adding new ones to the MHPAEA regulations, particularly for terms such as “medical/surgical benefits,” “mental health benefits,” and “substance use disorder benefits.” Commenters stated that these definitions would significantly improve clarity for plans and issuers. One commenter stated the proposal would clearly specify how mental health and substance use disorder benefits must be defined for MHPAEA compliance purposes, minimize situations where
Commenters also expressed support for clarifying the application of MHPAEA's requirements to NQTLs. One commenter stated that the proposal provides more specificity for plans and issuers to assess their NQTLs applicable to mental health or substance use disorder benefits, and the information that must be included in a comparative analysis of NQTLs applicable to mental health and substance use disorder benefits and medical/surgical benefits. The commenter further stated the proposal reduces uncertainty for all parties, while providing greater clarity for consumers and other stakeholders to assess whether an NQTL is compliant with MHPAEA. Additionally, the commenter stated that the proposal provides greater clarity for insurers and patients and helps State insurance regulators better enforce existing regulations. The Departments acknowledge the supportive comments and agree that the final rules provide clarity to the statutory requirements for the regulated community and other interested parties.
However, some commenters expressed concern regarding whether certain policies and procedures would now be prohibited under MHPAEA, as interpreted through the proposed rules, if finalized. One commenter, in objecting to the proposed mathematical substantially all and predominant tests, stated that the most significant cost is not in conducting the comparative analysis, but rather in the additional expenses incurred should plans and issuers no longer be able to utilize common medical management techniques that improve cost and quality outcomes, such as prior authorization and concurrent review.
As stated earlier in this preamble, the Departments are not finalizing the proposed mathematical test for applying the substantially all and predominant tests in these final rules. These final rules also do not eliminate the use of prior authorization or other medical management NQTLs applicable to both mental health and substance use disorder benefits and medical/surgical benefits. However, NQTLs applicable to mental health and substance use disorder benefits and medical/surgical benefits must be designed and applied in compliance with MHPAEA's parity requirements. Moreover, as discussed earlier in this preamble, the Departments anticipate that these final rules will promote changes in network composition and medical management techniques that result in more robust mental health and substance use disorder provider networks, as well as fewer and less restrictive prior authorization requirements for individuals seeking mental health and substance use disorder treatment. While this could increase costs in some cases, there are potential offsetting benefits in other cases for the reduction in the use of medical management techniques.
By improving plan and issuer understanding of the requirements under MHPAEA and clarifying how comparative analyses must be performed and documented, these final rules will improve compliance. Specifically, this will ensure compliance with the design and application requirements and the relevant data evaluation requirements so that NQTLs applied to mental health and substance use disorder benefits are no more restrictive than the predominant limitation applicable to substantially all medical/surgical benefits. The Departments are of the view that this will, in turn, expand access to and utilization of mental health and substance use disorder services. These final rules will have the greatest direct benefits for individuals who currently forego treatments or cannot access specialized care for a mental health condition or substance use disorder because their plan or coverage imposes barriers to accessing benefits for coverage of these services that are greater than the barriers for accessing medical/surgical services.
The Departments do not have sufficient data to estimate how many participants, beneficiaries, and enrollees will receive treatment, or more appropriate treatment, as a result of these final rules. However, research has demonstrated that participants, beneficiaries, and enrollees experienced increased access to mental health and substance use disorder treatments following the implementation of MHPAEA. Drawing on these studies, the Departments expect that this rulemaking, in further improving compliance with MHPAEA, will result in significant improvements in access to mental health and substance use disorder care.
For example, a 2018 study examined how MHPAEA affected the coverage of commercial health plans in the United States. The study found that between 2010
These final rules will directly benefit individuals who are currently enrolled in a plan with narrower networks, with regard to mental health and substance use disorder benefits compared to the networks for medical/surgical benefits, which prevent participants, beneficiaries, and enrollees from being able to access care from in-network providers and receive the benefits they need. A 2017 study of ACA Marketplace provider networks found that mental health networks were significantly narrower on average than primary care networks, providing less than half the share of providers practicing within a State-level market.
Ghost or phantom networks—collections of providers and facilities that are listed as being within a plan's or issuer's network but, in fact, are not available to participants, beneficiaries, and enrollees for treatment on an in-network basis—make it difficult for participants to find in-network providers.
In response to the Departments' proposal, numerous commenters stated that they believed the proposed rules would benefit patients, specifically by improving access to mental health and substance use disorder treatments. Several commenters stated the proposed rules would ensure more equitable access to care by addressing burdensome administrative practices, such as NQTLs and other utilization management techniques, which negatively impact patient access to mental health and substance use disorder benefits. Additionally, many other commenters suggested that the enhanced clarity and transparency provided by the proposed rules would alleviate administrative burdens and, as such, help to streamline access to behavioral health care. The Departments acknowledge these supportive comments and agree that the final rules will increase access to mental health and substance use disorder treatments.
Given those concerns highlighted by commenters regarding challenges related to accessing mental health substance use disorder benefits, the final rules particularly highlight parity in NQTLs related to network composition as an area that requires improvement. By requiring plans and issuers to collect and evaluate relevant data on provider networks, including for network composition NQTLs, the final rules will help to ensure that individuals have more equitable access to in-network providers that are available to provide care for mental health conditions and substance use disorders. Additionally, by ensuring that plans and issuers collect and evaluate data related to NQTLs for network composition for mental health and substance use disorder benefits and medical/surgical benefits, and as necessary address material differences in access between these benefits, the Departments expect that the final rules will improve the ability of participants, beneficiaries, and enrollees to access available in-network mental health and substance use disorder providers. Thus, the final rules will reduce barriers to accessing mental health and substance use disorder care.
This discussion focuses on the benefits for participants, beneficiaries, and enrollees who were previously prevented from receiving mental health or substance use disorder treatment. For a discussion of the effects on participants, beneficiaries, and enrollees who were previously paying out-of-pocket for treatment, refer to section IV.9.1 of this regulatory impact analysis pertaining to transfers.
The implementation of the CAA, 2023 provision that sunsets the MHPAEA opt-out election is expected to reduce financial and non-financial barriers to accessing mental health and substance use disorder treatment for participants and beneficiaries of self-funded non-Federal governmental plans that elected to opt out of requirements under MHPAEA. This is expected to result in increased access to mental health and substance use disorder care and, as discussed in more detail in the section IV.7.3, lead to better health outcomes for plan participants and beneficiaries who need mental health or substance use disorder services.
The Departments are of the view that by ensuring parity in medical management techniques and other NQTLs imposed by plans and issuers, the final rules will reduce barriers for participants, beneficiaries, and enrollees seeking mental health and substance use disorder care. As discussed later in this regulatory impact analysis, the removal of barriers preventing individuals from accessing mental health and substance use disorder treatment on par with medical/surgical treatment will in turn produce better patient outcomes, including potentially lives saved.
Research has demonstrated that MHPAEA has already had a positive effect on improving access to treatment. A 2016 study examining the initial effects of MHPAEA found that following implementation, prior authorization requirements were less common for behavioral health care services than in previous years.
If, as the Departments expect, these final rules similarly increase access to mental health and substance use
These benefits further illustrate the value of receiving treatment earlier and the harms of delaying treatment. While 75 percent of mental illness onsets before age 25, individuals between age 18 and 25 have a considerably higher prevalence of serious mental illness
Mental health research often evaluates the benefits of mental health care in terms of a quality-adjusted life year (QALY), an assessment metric that evaluates the changes to a person's quality of life arising from an intervention. According to the National Institute for Health and Care Excellence, one QALY “is equal to 1 year of life in perfect health.”
Another study compared the cost effectiveness of early intervention to standard care for the treatment of first-episode psychosis, finding that from a societal perspective (that is, quality of life, educational attainment, and gainful employment), early intervention resulted in higher discounted QALYs and lower costs than standard care. While acknowledging that earlier interventions result in higher lifetime costs than the standard care perspective, the authors still found early intervention to be cost effective.
The Departments do not anticipate the benefits to be exclusive to prevented suicides. The final rules are also expected to increase access to and utilization of behavioral health services and substance use disorder services.
To illustrate the potential impact of these final rules, the Departments employ this lower estimate of a 16 percent reduction in overdoses following treatment, and estimate that increased treatment for expanded OUD access and utilization could result in the prevention of approximately 730 non-fatal overdoses each year.
The benefits of individuals diagnosed with an OUD receiving treatment may go beyond the benefit of reduced harms from overdoses. Mortality data of individuals diagnosed with an OUD indicate overdoses comprise approximately half of fatalities for such individuals, who are increasingly at risk of death from infectious disease, common co-morbid conditions such as liver or heart disease, accidental deaths, suicide, and other physical traumas.
Employing this estimate of an approximately 35 percent reduction in fatalities following treatment to illustrate the potential impact of these final rules, the Departments estimate that increased treatment for expanded OUD access and utilization could result in the prevention of approximately 702 fatalities from all causes in persons receiving treatment for OUD each year.
Mental health and substance use disorders do not always occur in isolation, but are commonly co-occurring conditions, as individuals with substance use disorders are more likely to experience a mental health condition than the general population and nearly half of adults with serious mental illness also have a substance use disorder.
As mental health conditions and substance use disorders can make preventing, managing, and treating physical comorbidities difficult, improvements in mental health and substance use disorder outcomes may also improve overall physical health outcomes and lower healthcare costs for participants.
These final rules will help employees, caregivers and their families meet their mental health and substance use disorder care needs, and thus, may improve the productivity and resulting earnings of workers dealing with mental health conditions and substance use disorder. Among adults with any mental health condition in 2022, only 50.6 percent received treatment.
The economic impact of untreated mental health conditions and substance use disorders can be significant. A 2021 study of claims data for large, self-funded health plans looked at the economic burden attributable to major depressive disorder, including the direct costs associated with treatment, suicide-related costs, and workplace costs, between 2010 and 2018. During that period, overall economic burden of adults with a major depressive disorder increased 37.9 percent (from $236.6 billion to $326.2 billion). While part of the cost increase can be attributed to a 12.9 percent increase in the number of adults with major depressive disorders, direct costs became a smaller share of the total costs, with workplaces costs, defined as missed work (due to injury/illness, discretionary time off and disability) and lower productivity while at work, constituting 61 percent of the costs in 2018 and increasing from $48.3 billion in 2010 to $70.8 billion in 2018.
These final rules will also have significant indirect impacts on families, friends, caregivers, and coworkers with untreated or poorly managed mental health conditions and substance use disorders, as well as society at large. By prohibiting inequitable barriers to coverage and thereby increasing access to mental health and substance use disorder services, these final rules will lead to more people receiving treatment, reducing the burden on family members and other support systems. For example, this includes untreated maternal mental health conditions, which can lead to a reduced ability to work, increased risk of suicide, increased use of public services, and worse maternal and child health. A 2022 study of the cost of maternal mental health conditions to Texas women and their children projected costs for the 2019 birth cohort from the time of conception through 5 years postpartum to total $2.2 billion.
The cost in missed productivity for workers with fair or poor mental health due to unplanned absences was estimated as $47.6 billion annually in 2022.
These final rules are expected to improve access to and utilization of mental health and substance use disorder services by removing barriers to access to mental health and substance use disorder benefits caused by NQTLs. By enhancing treatment for these conditions and disorders, these final rules will likely result in reduced productivity loss or missed workdays for individuals suffering from mental health conditions or substance use disorders. Furthermore, the improved management and treatment of these conditions and disorders will potentially lead to reduced adverse impacts on the families, friends, and coworkers of those affected, as untreated or poorly managed mental health conditions and substance use disorders can have significant spillover effects on an individual's personal and professional lives.
These final rules aim to promote access to mental health and substance use disorder benefits by clarifying how plans and issuers must ensure that their plans and coverage are designed, as written and in operation, to comply with MHPAEA's parity requirements for mental health and substance use disorder benefits and medical/surgical benefits, and allowing them to more easily identify changes needed to bring their plans and coverage into compliance. The Departments acknowledge that plans and issuers, in revising their approach to performing and documenting their already required comparative analyses, will incur additional costs. Moreover, by removing some of the barriers to access to mental health and substance use disorder treatments caused by existing NQTLs, the Departments expect increased utilization of mental health and substance use disorder services, which will also increase costs. This collection of costs would appropriately be included in any comparison with the benefits described, and in some cases illustratively quantified, elsewhere in this regulatory impact analysis.
It is notable that the Departments are clarifying existing requirements, and only the cost burden limited to those additional content elements outlined in these final rules is a key topic discussed in the following sections.
In response to the proposal, many commenters expressed concern that the Departments underestimated the burden of collecting the required data, the burden required in conducting the proposed mathematical substantially all and predominant tests, the number of NQTLs that would need to be analyzed for each plan and issuer, and the amount of time that it would take to conduct those analyses. Commenters stated that in order to comply with the proposed rules, plans and issuers would need to purchase new data systems and hire additional staff or contractors. One commenter further stated that existing systems to provide mental health and substance use disorder benefits, such as carve out plans, would be eliminated under the proposed rule, as vendors would not be able to build networks of mental health and substance use disorder providers in alignment with networks of medical/surgical providers, as required under the proposed special rule for network composition.
Several commenters questioned the Departments' assumptions related to the number of NQTLs for which plans and issuers would need to produce comparative analyses. While the Departments assumed that issuers would impose twice as many NQTLs as plans, several commenters did not think the number of NQTLs would vary between plans and issuers. Commenters also argued that the number of NQTLs that plans and issuers would need to analyze would be roughly twice the Departments' proposed assumption for issuers, 16 NQTLs rather than 8, based on the Departments' descriptions of types of NQTLs listed in the proposed rule. Consistent with the explanation earlier in this preamble, the Departments note that they do not intend to provide an exhaustive list of NQTLs. Plans and issuers may be analyzing a fewer or greater number of NQTLs than the number of NQTLs listed in the illustrative, non-exhaustive list in these final rules.
Commenters also questioned the amount of time that it would take to conduct the NQTL comparative analyses under the proposal. While the Departments assumed that the plans and issuers preparing their own comparative analyses would incur an incremental burden of 10 hours per NQTL in the first year and 4 hours per NQTL in subsequent years, several commenters thought this was an underestimate. For instance, one commenter stated that it currently takes a team of subject matter experts, compliance officials, a project manager, and attorneys or consultants 60 hours in the first year and 12 hours in subsequent years to produce NQTL comparative analyses as required under the CAA, 2021 and current guidance. The commenter suggested that the added requirements for the comparative analysis under these final rules could require at least an additional 60 hours per NQTL.
Another commenter estimated that the cost to issuers of fully insured plans to conduct the comparative analyses for all NQTLs is approximately between $200,000 and $300,000 (200 to 300 external attorney or consultant hours in addition to several hundred in-house staff hours). The commenter also reported that for large, self-funded plans, while issuers and TPAs prepare and distribute baseline comparative analysis, plans would still need to customize the comparative analysis. The commenter estimated that the cost for large self-funded plans to customize the comparative analysis and request additional information and data for all NQTLs is approximately between $50,000 and $150,000 (100 to 200 external attorney or consultant hours in addition to in-house staff work). The Departments are not clear whether these suggested costs represent current expenditures or projections of the added requirements for the comparative analyses. The commenter further stated that time and cost estimates for plans with behavioral carve-out vendors should be higher.
In preparing these final rules, the Departments have considered these comments and have clarified the requirements and reevaluated their estimates as appropriate. The specific adjustments to the estimates are discussed in section IV.8.4 of this regulatory impact analysis.
As discussed earlier in this regulatory impact analysis, commenters questioned the Departments' assumptions related to the number of NQTLs imposed by plans and issuers on mental health and substance use disorder benefits and medical/surgical benefits, and the amount of time that it would take to conduct the additional requirements for producing comparative analyses and analyzing data, beyond what was required in CAA, 2021. The Departments have reviewed these comments, which include estimates made by those commenters, on the expected additional costs to prepare NQTL comparative analyses under the proposed rules. While these comments are helpful to understand the cost implications of the final rules and how they differ from the proposal, the Departments disagree with some of the inputs and underlying assumptions of these cost estimates and use different assumptions in section IV.8.4 of this regulatory impact analysis. The
The Departments considered estimates and assumptions regarding the costs to prepare the NQTL comparative analyses under the proposed rules made by the Association for Behavioral Health and Wellness (ABHW). ABHW reports that the amendments would require plans and issuers to analyze 15 NQTLs on average. They also reported that it currently takes a team of subject matter experts, compliance officials, a project manager, and attorneys or consultants 60 hours to prepare each comparative analysis for a typical NQTL as required under the CAA, 2021 and current guidance. Thus, ABHW estimates that a comparable burden (60 hours per NQTL) is needed to review and revise the analyses under the updated requirements in the first year. In addition, they also estimate it would require 12 hours in each subsequent year to produce the comparative analyses. For the purpose of this calculation, the Departments have estimated a composite wage rate of $167.48, which consist of attorneys, actuaries, and data analysts.
ABHW also suggested that issuers and plans would need to hire at least three full-time equivalent new staff members to help with the proposed relevant data evaluation requirements. This additional cost was not included in their cost estimates.
The Departments conducted a sensitivity analysis of the assumption that 50 percent of self-funded plans and another 50 percent of self-funded non-Federal governmental plans with more than 500 participants will receive a generic comparative analysis from TPAs or service providers, which they will then need to customize. For every 10-percentage-point increase or decrease in the number of self-funded plans and self-funded non-Federal governmental
The Blue Cross Blue Shield Association (BCBSA) asked the Departments to specifically quantify the costs of preparing additional comparative analysis beyond the four priority NQTLs outlined in FAQs Part 45. BCBSA stated that based on the number of NQTLs identified in the regulation, and the additional NQTLs identified in the preamble, the proposed rules would require plans and issuers to prepare comparative analyses for at least 17 NQTLs (7 from the preamble, and 10 from the regulation, counting those related to network composition as 3 separate NQTLs), all with the associated documentation and outcomes data.
BCBSA estimated that the cost of issuers of fully insured plans to conduct the comparative analyses for all NQTLs would range between $200,000 and $300,000. BCBSA also estimated the cost for large self-funded plans that receive a generic comparative analysis from the issuer, which they then need to customize and request additional information and data for all NQTLs referenced in the proposal, is between $50,000 and $150,000. BCBSA did not explain if these cost estimates were for all years or were applicable to just the first year. Based on BCBSA's assumptions, and the Departments' estimates of affected entities, this will result in a lower bound cost of $957.4 million and an upper bound cost of $2 billion. See Table 4 for more details.
The Departments conducted a sensitivity analysis of the assumption that 50 percent of self-funded plans and another 50 percent of self-funded non-Federal governmental plans with more than 500 participants will receive a generic comparative analysis from the issuer, and will then customize it. For every 10-percentage-point increase or decrease in the number of self-funded plans and self-funded non-Federal governmental plans with more than 500 participants that need to customize documentation received from TPAs or service providers, the cost would increase or decrease by $34.9 million in the total lower bound cost
As part of these final rules, the Departments have added new definitions, amended existing definitions, and clarified and added new requirements for NQTLs imposed with respect to mental health or substance use disorder benefits. For example, as discussed earlier in this preamble, the final rules clarify that any condition or disorder defined by the plan or coverage as being or as not being a mental health condition or a substance use disorder must be defined consistent with generally recognized independent standards of current medical practice. To be consistent with those generally recognized independent standards of current medical practice, these final rules state that the plan's or coverage's definition of “mental health benefits” must include all conditions covered under the plan or coverage, except for substance use disorders, that fall under any of the diagnostic categories listed in the mental, behavioral, and neurodevelopmental disorders chapter (or equivalent chapter) of the most current version of the ICD or that are listed in the most current version of the DSM. Similarly, the definition of “substance use disorder benefits” must include all disorders covered under the plan or coverage that fall under any of the diagnostic categories listed as a mental or behavioral disorder due to psychoactive substance use (or equivalent category) in the mental, behavioral, and neurodevelopmental disorders chapter (or equivalent
Under these final rules, plans and issuers are required to collect and evaluate relevant data in a manner reasonably designed to assess the impact of the NQTL on relevant outcomes related to access to mental health and substance use disorder benefits and medical/surgical benefits. In addition, these final rules require plans and issuers to determine whether the relevant data reflect material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits and take reasonable action, as necessary to address such differences to ensure compliance, in operation, with 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4). Relevant data for all NQTLs could include, as appropriate, but are not limited to, the number and percentage of claims denials and any other data relevant to the NQTL required by State law or private accreditation standards. Additionally, for NQTLs related to network composition, relevant data could include, as appropriate, but are not limited to, in-network and out-of-network utilization rates (including data related to provider claim submissions), network adequacy metrics (including time and distance data, and data on providers accepting new patients), and provider reimbursement rates (for comparable services and as benchmarked to a reference standard).
The proposed rules would have required plans and issuers to apply the proposed mathematical substantially all and predominant tests to each NQTL applicable to mental health or substance use disorder benefits and medical/surgical benefits. As discussed earlier in this preamble, the Departments decline to finalize the proposed mathematical tests for applying the substantially all and predominant tests in these final rules. However, plans and issuers are required to collect and evaluate relevant data for NQTLs applicable to mental health and substance use disorder benefits and medical/surgical benefits under these final rules. For NQTLs related to network composition, plans and issuers must collect and evaluate relevant data in a manner reasonably designed to assess the aggregate impact of all such NQTLs on relevant outcomes related to access to mental health and substance use disorder benefits and medical/surgical benefits. Under these final rules, the Departments may specify the type, form, and manner for the relevant data evaluation requirement in future guidance, but for some plans and issuers already subject to existing data requirements under MHPAEA, Federal transparency rules,
These final rules could cause plans and issuers to revise their policies and procedures to remove or modify NQTLs in response to the Departments' clarifications and examples. Requirements such as covering meaningful benefits for mental health conditions and substance use disorders (determined in comparison to the benefits provided for medical conditions and surgical procedures); assessing whether the relevant data evaluated suggest that the NQTL contributes to material differences in access to mental health and substance use disorder benefits as compared to medical/surgical benefits; and not using or taking the steps necessary to correct, cure, or supplement the information, evidence, sources, or standards used to inform a factor or evidentiary standard that would have been biased or not objective in the absence of such steps could also cause plans and issuers to revise their policies and procedures.
For example, a 2016 study examined how private health plans responded to the 2010 interim final rules implementing MHPAEA and found that the majority of plans had eliminated quantitative treatment limitations referred to as “special annual limits” related to behavioral health treatments. The percentage of health insurance products with such limits on mental health treatments decreased from 28 percent in 2009 to 4 percent in 2010, and a similar decrease was observed for health insurance products with such limits on substance use disorder treatments (from 26 percent in 2009 to 3 percent in 2010).
Plans and issuers could incur costs to implement changes associated with revising coverage and plan provisions to ensure that they comply with the requirements of these final rules or ceasing the imposition of an NQTL as directed by the Departments or an applicable State authority after a final determination of noncompliance under Code section 9812(a)(8), ERISA section 712(a)(8), or PHS Act section 2726(a)(8), or 26 CFR 54.9812-2, 29 CFR 2590.712-1, or 45 CFR 146.137, which might result in increased costs from expanded utilization of mental health and substance use disorder services. Recent data suggests that mental health and substance use disorder services account for a small portion of total health care expenditures, representing just 8.4 percent of all expenses in 2021 for individuals with private insurance.
As discussed in section 2 of this regulatory impact analysis, individuals seeking mental health or substance use disorder treatment often face barriers preventing them from accessing care, such as inadequate networks. Telehealth is one method of care that has the potential to improve access to treatment for mental health conditions or substance use disorders, particularly as research has documented that it can be as effective as in-person treatment,
David Turgoose, Rachel Ashwick, & Dominic Murphy,
Lori Uscher-Pines, Lauren E. Riedel, Ateev Mehrotra, Sherri Rose, Alisa B. Busch, & Haiden A. Huskamp,
The COVID-19 pandemic sparked increased demand for health care services, including behavioral health services delivered remotely. While in February 2020 telehealth claims accounted for only around 1 percent of claims pertaining to mental health or substance use disorder benefits, by April 2020 they accounted for over 50 percent of the claims and still accounted for approximately 40 percent of claims at the end of 2021.
While the COVID-19 PHE ended on May 11, 2023,
By nature, telehealth makes accessing treatment for mental health conditions and substance use disorders more convenient for many patients, particularly for those who do not have the ability, time, or means to travel to an appointment or who need care from a provider that specializes in a particular treatment that is not available in their geographic area. Despite observing similar levels of mental illness and psychiatric disorders in urban residents, one research paper remarked that rural residents face “challenges accessing care systems due to geographic isolation, reduced access to and engagement with appropriate providers, lower socioeconomic status, generally lower levels of educational attainment, as well as reluctance to seek help due to discrimination and stigma.”
As with rural populations, many underserved racial, ethnic, cultural minorities, and individuals with disabilities face barriers to receiving treatment for mental health conditions and substance use disorders. These barriers may include language, stigma, or finding a therapist that understands their situation. While important in many areas of health care, many underserved populations prefer to receive treatment for mental health conditions and substance use disorders specifically from a provider with an understanding of their cultural background. A 2022 study found that there was an overall increase in the use and willingness to use video telehealth during the pandemic, with the highest levels of increase being seen among Black adults and adults with lower educational attainment. Certain communities became more willing to use telehealth, since many patients had their first telehealth experience with their trusted health care provider during the pandemic and their positive
In addition to expanding access, telehealth has also been found to improve the retention of patients receiving mental health and substance use disorder care. A 2023 retrospective cohort study of treatment-seeking patients enrolled in a substance use disorder treatment program in Ohio found that “[p]atients who received services through telehealth with video in the initial 14 days of diagnosis had a lower hazard of dropout, compared to patients receiving solely in-person services.” Moreover, when compared to in-person care, patients receiving services through either video or telephone were more likely to have higher treatment engagement, which was defined as “initiating treatment and completing at least two treatment visits within 34 days of the initiation visit.”
Research has demonstrated that telehealth for medical appointments saves patients time and money.
It is important to note that, while telehealth may improve access, it is not a perfect solution. For instance, it has limitations in certain segments of the population, such as individuals with limited English proficiency
These final rules set forth content requirements for comparative analyses required by the CAA, 2021 and outline the timeframes and processes for plans and issuers to provide their comparative analyses to the Departments and applicable State authorities upon request. Under these final rules, the Departments outlined the elements that a comparative analysis must include for each NQTL (in addition to the requirements to include a written list of all NQTLs imposed under the plan or coverage). They include, as described in more detail earlier in this preamble:
• A description of the NQTL,
• Identification and definition of the factors used to design or apply the NQTL,
• A description of how factors are used in the design and application of the NQTL,
• A demonstration of comparability and stringency, as written,
• A demonstration of comparability and stringency, in operation, and
• Findings and conclusions.
However, because these elements are already required under the CAA, 2021, the cost of these final rules is more limited than the full cost of generating a comparative analysis. For instance, plans and issuers are already required under the CAA, 2021 to provide a description of the specific plan or coverage terms or other relevant terms regarding the NQTLs that applies to such plan or coverage, and a description of all the mental health and substance use disorder benefits and medical or surgical benefits to which each such term applies in each respective benefit classification.
In their comparative analyses, plans and issuers must describe each NQTL and identify and define all the factors and evidentiary standards used to design or apply the NQTL. The plan or issuer also must describe how the factors identified are used in the design and application of the NQTL, and evaluate whether any processes, strategies, evidentiary standards, or other factors used in designing and applying the NQTL to mental health or substance use disorder benefits are comparable to, and are applied no more stringently than, those with respect to medical/surgical benefits, both as written and in operation. The explanation of how the plan or issuer evaluates compliance, in operation, with MHPAEA must identify the relevant data collected and evaluated, and document the outcomes that resulted from the application of the NQTL to mental health or substance use disorder benefits and medical/surgical benefits. In limited circumstances where relevant data is temporarily unavailable for a newly imposed NQTL, the comparative analysis must include a detailed explanation of the lack of relevant data, the basis for the plan's or issuer's conclusion that there is a lack of relevant data, and when and how the data will become available and be collected and analyzed. Additionally, in rare instances where no data exists that can reasonably assess any relevant impact of an NQTL on relevant outcomes related to access to mental health and substance use disorder benefits and medical/surgical benefits, the plan or issuer must provide a reasoned justification as to the basis for the conclusion that there are no data that can reasonably assess the NQTL's impact, an explanation of why the nature of the NQTL prevents the plan or issuer from reasonably measuring its impact, an explanation of what data was considered and rejected, and documentation of any additional safeguards or protocols used to ensure that the NQTL complies with MHPAEA. In the instances where there is a temporary data lag for a newly imposed NQTL or no data exists that can reasonably assess any relevant impact of an NQTL, providing this justification for the temporary data lag is likely to be less expensive than the estimated burden for doing an analysis when there is data. However, as explained earlier in this preamble, the Departments are of the view that nearly all NQTLs will have some relevant data to collect and evaluate; therefore, the Departments estimate the burden as if every plan and issuer performs the data analysis.
These final rules require additional specificity with regard to the findings and conclusion of the comparative analysis. While these final rules provide specificity for how a plan or issuer must comply with the comparative analysis requirements, they are primarily providing additional clarification and requirements with respect to the statutory content elements of a comparative analysis outlined in the CAA, 2021, so that plans and issuers can perform and document sufficient comparative analyses.
Additionally, for ERISA plans, these final rules also require the comparative analysis to include a certification by one or more named fiduciaries that they have engaged in a prudent process to select one or more qualified service providers to perform and document a comparative analysis in connection with the imposition of any NQTLs that apply to mental health and substance use disorder benefits under the plan in accordance with applicable law and regulations, and have satisfied their duty to monitor those service providers as required under part 4 of ERISA with respect to the performance and documentation of such comparative analysis. The cost to provide the certification is included in the cost estimates to prepare the comparative analysis.
In the proposed rules, the Departments estimated that, on average, plans would need to analyze four separate NQTLs and issuers would need to analyze eight NQTLs to satisfy the comparative analysis requirements.
In response to commenters' concerns that the Departments underestimated the number of NQTLs that each plan or issuer would need to provide comparative analyses for, and that plans and issuers would on average have the same number of NQTLs, the Department have revised their assumptions to 10 NQTLs for both plans and issuers. While one commenter suggested the average number of NQTLs should be more than 15 at a minimum, and another commenter noted that the proposal and guidance referenced at least 17 NQTLs, the Departments note that the number of NQTLs vary by issuer and plans and that most will not incorporate every NQTL listed in the proposal and the guidance (while some plans and issuers might incorporate others not listed). Taking into account the Departments' experience and comments received, the Departments assume 10 NQTLs but present a sensitivity analysis using 15 NQTLs.
The Departments assume that the incremental costs to collect the data and review and revise the comparative analyses will require 60 hours per NQTL in the first year and 12 hours per NQTL in subsequent years. For plan sponsors that receive a generic comparative analysis from a TPA that will require customizing to suit the plan's specific needs, the Departments assume that it will take 30 hours per NQTL in the first year and 6 hours per NQTL in subsequent years. While plans and issuers can use other professionals to fulfill their requirements, for purposes of developing the wage estimate, the Departments assume that it will take a team of data analysts, actuaries, and attorneys to collect the data and prepare the comparative analyses, and have estimated a composite wage rate of $167.48.
The Departments conducted a sensitivity analysis of the assumption that plans and issuers would each analyze 10 NQTLs. If the Departments assume that plans and issuers analyze 15 NQTLs, the cost burden would increase by $328.1 million in the first year and $65.6 million in the subsequent years, resulting in a 3-year average cost increase of $153.1 million.
Additionally, plans and issuers must make the comparative analyses and other applicable information required by the CAA, 2021 available upon request to participants, beneficiaries, and enrollees in all non-grandfathered group health plans and non-grandfathered group or individual health insurance coverage (including a provider or other person acting as a participant's, beneficiary's, or enrollee's authorized representative) in connection with an adverse benefit determination, as well as to participants and beneficiaries in plans subject to ERISA. The Departments estimate that on average each plan or issuer will receive one request annually and that plans and issuers will annually incur a burden of 5 minutes for a clerical worker to prepare and send the comparative analyses to each requesting participant or beneficiary. The Departments received comments suggesting that this
The Departments further assume that 58.3 percent of requests will be delivered electronically, resulting in a de minimis cost.
Finally, these final rules require that group health plans and health insurance issuers offering group or individual health insurance coverage must make comparative analyses available upon request to the Departments or an applicable State authority. The CAA, 2021 requires the Departments to collect no fewer than 20 comparative analyses per year, but it also provides that the Departments shall request that a group health plan or issuer submit the comparative analyses for plans that involve potential MHPAEA violations or complaints regarding noncompliance with MHPAEA that concern NQTLs, and any other instances in which the Departments determine appropriate. Based on prior experience and current funding, DOL and HHS expect to each request 20 comparative analyses each year. To provide the Departments with their comparative analyses and associated documentation, the Departments estimate, based on internal discussion, that it will take a total of 5 hours for plans, with 1 hour for a general or operations manager and 4 hours for a business operations specialist. See Table 8 for calculations and burden totals.
In the first year, group health plans and issuers will need time to familiarize themselves with these final rules to ensure that their comparative analyses comply with all applicable requirements. The Departments assume that on average it will require 6.5 hours for an attorney to review these final rules.
According to the 2022 National Health Expenditure Data, the total contribution of private employers to health insurance premiums is $592.2 billion. The total contribution of State and local employers to health insurance premiums is $194.5 billion.
In the proposed rules, HHS assumed that most of the self-funded non-Federal governmental plans that would be affected by the implementation of the CAA, 2023 provision that sunsets the MHPAEA opt-out election offered mental health and substance use disorder benefits, but that many of these plans might not be complying with MHPAEA. HHS assumed that plans would incur costs to come into compliance and noted that, in particular, some plans might remove limits on or offer more generous mental health and substance use disorder benefits, which would likely increase utilization of mental health and substance use disorder services, increasing the number of claims submitted, and the overall costs incurred by these plans. HHS also noted that plans that have opted out of requirements under MHPAEA would also need to conduct NQTL comparative analyses if they were not already doing so. HHS solicited comments on the potential costs to these plans to come into compliance with MHPAEA. Although the Departments received comments on the potential underestimation of costs related to NQTL comparative analysis requirements (refer to section IV.8.1 of this regulatory impact analysis for further discussion), HHS did not receive any comments specific to the costs associated with coming into compliance for self-funded non-Federal governmental plans. As such, HHS is unable to estimate the costs to these plans because the extent to which these plans are currently out of compliance is unknown, and costs associated with coming into compliance are expected to vary from plan to plan.
HHS estimates that the regulatory amendments to implement a provision of the CAA, 2023 that sunsets the election option for sponsors of self-funded non-Federal governmental plans to opt out of requirements under MHPAEA eliminates the need for sponsors to submit a notice to the Federal Government regarding their plan's opt-out election, as long as the sponsors do not elect to permissibly opt out of other requirements. HHS estimates that sponsors of 185 plans will no longer submit a notice to the Federal Government regarding their plan's opt-out election. This is estimated to generate a total cost savings of approximately $11,783 for plans (as discussed later in section V.2.5 of the Paperwork Reduction Act analysis for HHS), and cost savings of approximately $5,200 for the Federal Government as HHS will no longer have to process the opt-out notices previously submitted by these plans.
As discussed in the benefits section, the Departments estimate that the final rules will increase access and subsequently the utilization or frequency of use of behavioral health services. The Departments also recognize that increased service utilization will likely increase costs for plans. These costs will likely differ significantly by the type of condition and the type of treatment. The analysis that follows provides an illustration of potential increases in costs for plans associated with depression and substance use disorder treatments.
Increasing access to mental health services is estimated to result in a significant reduction in suicides, as enumerated in section IV.7.2. While many mental health conditions and substance use disorders may increase the risk of suicide, suicide itself is an outcome that may or may not be tied directly to mental health conditions or substance use disorders. As such, it is difficult to directly tie the decrease in suicides discussed in section IV.7.2 to increased costs.
However, the most common mental health condition among those who attempt suicide, as well as one of the most highly prevalent mental health conditions in the United States, is depressive disorder.
As discussed in Section 6.1.3, MHPAEA has been found to have mixed effects on the utilization of mental health services. A 2019 study found that, outside of substance use disorder, MHPAEA was not associated with an
The 2019 study also found that the average insurer cost for members receiving treatment increased following the passage of MHPAEA. According to the study, in September 2015, the last month of data considered, MHPAEA was associated with an average insurer cost increase of $16.17 for each member receiving treatment for mental health per month.
For the purposes of this analysis, it is helpful to consider this measurement in terms of the increased cost per member with depression, regardless of treatment status. To estimate a per-member cost, regardless of treatment status, the Departments scaled the estimate by the proportion of individuals who had a major depressive episode in 2015, with private insurance, and who received treatment for depression. Applying these assumptions, the Departments estimate that in 2015, MHPAEA was associated with a $11.15 increase in average monthly insurer spending per member with depression.
The Departments do not have data on per-member per-month costs associated with a major depressive illness alone. Based on a 2018 Milliman report, the Departments estimate that the 2015 per-member per-month behavioral healthcare cost
Based on this analysis, the estimated $11.15 increase in monthly insurer spending per-member with depression accounts for 5.0 percent of the per-member per-month costs for someone with a serious and persistent mental illness or 9.6 percent of the average cost for someone with any mental illness. In 2021, total expenditures for private insurance were $981.2 billion, while total expenditures for private insurance for depression were $21.0 billion.
In their estimate of benefits associated with the prevention of suicide fatalities and reduced mortality from the utilization of OUD treatments, the Departments assumed that the effect of these final rules would be approximately 40 percent of the initial impact from MHPAEA. For consistency, applying this proportion to the estimated costs, the Departments estimate that these final rules would be associated with an increase cost for treatment related to depression for private insurers of between $0.42 billion and $0.80 billion in 2021 dollars or $0.43 billion and $0.84 billion in 2023 dollars.
It is important to note that the benefits estimated in section IV.7.2 and these cost estimates do not necessarily capture the same segment. The benefits related to more frequent treatment of depression are more expansive than the estimated benefits in section IV.7.2 that only focus on suicide prevention. On the other hand, treatment for other types
Additionally, the Departments estimate that the final rules will increase the utilization of substance use disorder services (specifically, OUD), resulting in significant benefits arising from decreased mortality related to substance use disorders. These benefits would arise from approximately 40,000 additional individuals receiving treatment each year. As recent research indicates that cost of treatment for OUD is approximately $13,500, the Departments estimate that the increased service utilization for OUD would result in an additional cost of approximately $579 million annually.
Achieving parity in coverage of mental health and substance use disorder benefits has the potential to change the spending patterns of plans and issuers, increase premiums and contributions, and change the utilization patterns of participants, beneficiaries, and enrollees. The Departments recognize these as transfers among participants, beneficiaries, and enrollees; plans and issuers; and mental health and substance use disorder providers and facilities. Specifically, the Departments expect these final rules will result in:
• transfers from plans and issuers to participants, beneficiaries, and enrollees caused by lower out-of-pocket spending;
• transfers from participants, beneficiaries, and enrollees to plans and issuers caused by higher premiums; and
• transfers between primary care providers and mental health and substance use disorder providers for the treatment of mental health and substance use disorders resulting from the anticipated shift of participants, beneficiaries, and enrollees choosing to obtain such treatment from a specialist instead of a primary care provider.
The following sections are primarily qualitative discussions of transfers that the Departments expect to occur due to these final rules. Where possible, the Departments have referenced studies with quantitative results that help indicate the potential magnitude of these transfers. The Departments requested comment or data in the proposal on how large these transfers might be but did not receive any comments.
As discussed in section IV.7.2 of this regulatory impact analysis, these final rules are expected to increase access to mental health and substance use disorder treatments by improving plan and issuer compliance with the requirements under MHPAEA. This will help ensure that NQTLs are no more restrictive for mental health and substance use disorder benefits than the predominant limitations applicable to substantially all medical/surgical benefits. For individuals who were previously prevented from accessing care because it was not covered by their plan or coverage in a manner that violated these final rules, improved access to treatment is a benefit. However, for individuals who previously resorted to out-of-network treatment, expanded coverage of treatment—resulting in more access to in-network providers or facilities—will result in a transfer from plans and issuers to participants, beneficiaries, and enrollees.
Currently, it is more common for individuals to rely on out-of-network care for mental health and substance use disorder treatment than for medical/surgical treatment. One study found that patients received out-of-network care 3.5 times more often for behavioral health clinician office visits than for medical and surgical clinician office visits (13.4 percent vs. 3.8 percent). Further, the study found that when comparing specialist care, patients received out-of-network care 8.9 times more often for psychiatrist office visits (15.3 percent vs. 1.7 percent) and 10.6 times more often for psychologist office visits (18.2 percent vs. 1.7 percent) than for medical and surgical specialist physicians.
Receiving out-of-network treatment is costly, and research has found that mental health parity decreases out-of-pocket spending on treatment. For example, a 2013 study that examined the impact of the 2001 parity directive in the FEHB Program found that annual out-of-pocket spending for FEHB enrollees diagnosed with bipolar disorder, major depression, or adjustment disorder decreased by between $78 and $86, roughly between 11 percent and 18 percent of average total out-of-pocket spending for enrollees with one of these diagnoses, as compared to before the parity directive.
A 2018 study compared commercially insured children ages 3 to 18 years in 2008 who were continuously enrolled in plans newly subject to parity under MHPAEA to children continuously enrolled in plans never subject to MHPAEA. The study found that children with mental health conditions who were enrolled in plans subject to parity had, on average, $140 lower annual out-of-pocket mental health spending than expected compared to the comparison group. The study further found that children at or above the 85th percentile in total mental health spending who were enrolled in plans subject to MHPAEA had, on average, $234 lower annual out-of-pocket mental health spending than those in the comparison group.
A 2019 study examined the impact of MHPAEA on mental health services spending in a commercially insured population diagnosed with mental health disorders and found that MHPAEA resulted in a decrease in the mean out-of-pocket spending per mental health outpatient visit.
According to the 2019 MEPS-HC, private insurance covered $33.87 billion of expenditures for treatment of mental health disorders among adults ages 18 and older
Accordingly, the Departments do not know what proportion of total out-of-pocket spending experienced in the past will be covered by group health plans and health insurance coverage following the applicability of these final rules. However, to illustrate the potential scale of transfers from participants, beneficiaries, and enrollees to plans under this rulemaking, the Departments reference a 2020 study of in-network versus out-of-network psychotherapy employer-sponsored insurance claims which found in-network cost sharing was, on average, $24.41 less that out-of-network cost-sharing for psychotherapy claims.
These final rules might also result in a transfer from participants, beneficiaries, and enrollees to plans and issuers in the form of higher premiums. By limiting the ability of plans and issuers to avoid costs of certain mental health and substance use disorder treatments while increasing access to and utilization of these services, these final rules might cause plans and issuers to increase premiums and change cost-sharing requirements (for example, by raising deductibles) to offset these costs. Similarly, plans and issuers might reduce the number of NQTLs employed and increase premiums in order to offset the costs of participants, beneficiaries, and enrollees utilizing more mental health and substance use disorder benefits.
Many studies attempt to isolate the changes in health costs associated with implementing parity requirements. One 2005 study by the Society of Actuaries on State mental health parity laws found that “overall health care costs increased minimally and in some cases were even reduced.”
The Departments requested comments or data on this transfer in the proposal. A few commenters stated that the proposal would hinder the ability of plans to utilize common medical management techniques that improve cost and quality outcomes, such as prior authorization. As a result, commenters stated there would be an increase in premiums for participants, beneficiaries, and enrollees. However, as discussed previously, these final rules do not finalize the substantially all and predominant mathematical tests for NQTLs as proposed. The final rules also do not eliminate the use of prior authorization or other medical management, but the Departments emphasize that they must be designed and applied in parity as required by law.
These final rules may result in a transfer from primary care providers to mental health and substance use disorder providers. More specifically, with improved in-network access to mental health and substance use disorder providers, patients may be more likely to seek treatment from a behavioral health specialist rather than a primary care provider.
For example, a 2012 study that examined the impact of Oregon's 2007 parity law on the choice of provider found that the law was associated with a slight increase in the likelihood of patients seeking care “with masters-level specialists, and relatively little change for generalist physicians,
HHS anticipates that the rules implementing the CAA, 2023 provision that sunsets the MHPAEA opt-out election for self-funded non-Federal governmental plans will have similar effects as the other provisions examined in this section IV.9 of the regulatory impact analysis. These final rules are generally expected to lead to improved coverage of and lower cost-sharing requirements for mental health and substance use disorder benefits for participants and beneficiaries of self-funded non-Federal governmental plans. This will lead to lower out-of-pocket costs for plan participants and beneficiaries who receive mental health or substance use disorder services, which will be a transfer from self-funded non-Federal governmental plans to participants and beneficiaries.
On the other hand, as noted in section IV.8.2 of this regulatory impact analysis, if the final rules cause plans to remove limits on or offer more generous mental health and substance use disorder benefits, utilization of mental health and substance use disorder services may increase, which may cause in the number of claims submitted, the number of claims paid, and the overall costs incurred by plans to also increase. This, in turn, might lead to higher contributions and/or deductibles for plan participants, which may seem to be a transfer from plan participants to self-funded non-Federal governmental plans, but is instead an indication of the societal cost presented in section IV.8 of this regulatory impact analysis (and who bears it).
It is unclear what percentage of plans and issuers impose greater burdens on mental health and substance use disorder benefits than on medical/surgical benefits. This frequency may differ among small and large plans and issuers. The Departments' experience in enforcing MHPAEA shows that plans and issuers are not in full compliance with MHPAEA, although the extent across all plans and issuers is not known. As documented in the fiscal year (FY) 2022 MHPAEA Enforcement Fact Sheet, DOL closed investigations on 145 health plans, with 86 of them subject to MHPAEA, in fiscal year 2022. Of these closed investigations, EBSA cited 18 MHPAEA violations in 11 investigations.
One commenter stated that the new requirements of the comparative analyses would require plans to make significant changes to their benefits design and NQTL compliance structure, which could result in more restrictions on medical/surgical benefits and/or higher premiums. The commenter did not provide any data or evidence. The Departments note that there is no evidence from previous parity requirements that such actions led to the implementation of new NQTLs, particularly to medical/surgical benefits, and impacted cost sharing, medical management provisions, or medical/surgical coverage.
There is also the possibility that some plans and issuers will stop offering mental health and substance use disorder benefits. In 2010, 2 percent of employers reported discontinuing their coverage of both mental health and substance use disorder treatments or only substance use disorder treatments since MHPAEA was passed.
Another commenter also stated that the proposed rules would largely eliminate behavioral health carve-out vendors as a business model, because such vendors would not be able to build networks in complete alignment with medical/surgical disorder networks, as required under the proposed network composition NQTL rule. In response, the Departments note that similar claims—that MHPAEA would eliminate behavioral health carve-outs—were made when MHPAEA was first enacted in 2008. Furthermore, studies have found that the number of carve-out plans have increased since the enactment of MHPAEA. A 2016 study examined the impact of MHPAEA on carve-out plans and found that MHPAEA “led to a proliferation of plans and heterogeneity in benefit design in the post-parity period among employer groups choosing to retain the carve-out model for their behavioral health coverage.” The study also found no evidence that carve-out plans dropped coverage altogether for behavioral health treatments.
Additionally, the Departments note that they are not finalizing the proposed
Further, there may be some possible societal spillover effects which may occur as a result of these final rules such as improving public safety in the long-term from an increase in access to mental health and substance use disorder treatments. For example, a 2017 study examined the effect of State parity laws for substance use disorder treatments on fatal traffic accidents and found that enactment of State parity laws were associated with reduced annual total traffic fatality rates from 4.1 percent to 5.4 percent.
The Departments face uncertainty in estimating the magnitude of savings for participants, beneficiaries, and enrollees. The Departments requested comments and data in the proposal related to how the Departments may quantify the impact in out-of-pocket spending from these rules, but did not receive any comments.
Additionally, HHS is unable to precisely forecast how many participants and beneficiaries will be affected by the amendments to implement the CAA, 2023 provision that sunsets the MHPAEA opt-out election for self-funded non-Federal governmental plans, as plan sponsors that have elected to opt out of requirements under MHPAEA were not required to report that information to HHS as part of their opt-out filings. See section IV.5.3 of this regulatory impact analysis for further discussion on the affected participants and beneficiaries.
It is possible that some self-funded non-Federal governmental plans will stop offering mental health and substance use disorder benefits in response to the final rules. However, HHS is unable to estimate the potential number of self-funded non-Federal governmental plans that might do so. It is also possible that some self-funded non-Federal governmental plans might increase the financial requirements and treatment limitations that apply to medical/surgical benefits in response to this provision, to ensure that financial requirements and treatment limitations applicable to mental health and substance use disorder benefits comply with MHPAEA and its implementing regulations. HHS anticipates that this is a less likely outcome of these amendments.
HHS solicited comments on the potential number of self-funded non-Federal governmental plans that might stop offering mental health and substance use disorder benefits, as well as the potential number of self-funded non-Federal governmental plans that might increase financial requirements and treatment limitations for medical/surgical benefits in response to the proposed amendments. HHS also solicited comments on the potential number of participants and beneficiaries that might be affected by these potential plan changes. HHS did not receive any comments that provided this information.
In addition to the regulatory approach outlined in these final rules, the Departments considered alternatives when developing policy regarding the implementation of MHPAEA. The Departments considered not expressly incorporating the statutory requirement that NQTLs be no more restrictive for mental health and substance use disorder benefits than for medical/surgical benefits. However, as described earlier in this preamble, it is clear that plans and issuers too often fail to consider the impact of their NQTLs on access to mental health and substance use disorder benefits before designing and applying NQTLs, in a manner that is consistent with MHPAEA's fundamental purpose. While the Departments have seen some improvements in response to their reviews of plans' and issuers' comparative analyses under the CAA, 2021 requirements, they have primarily seen a great deal of confusion about the application of the current regulation to NQTLs and about the parity obligation generally. Based on the experience with plans' and issuers' attempts to comply with the existing regulations and guidance and the CAA, 2021, the Departments have concluded that the existing MHPAEA regulations failed to sufficiently focus attention on the obligation to ensure that NQTLs, and associated processes, strategies, evidentiary standards, and other factors avoid placing disparate burdens on participants', beneficiaries', and enrollees' access to mental health and substance use disorder benefits as compared to medical/surgical benefits. Accordingly, the Departments are of the view that these final rules will be beneficial to participants, beneficiaries, and enrollees, as plans and issuers revise their policies and remove or amend NQTLs that are inconsistent with MHPAEA.
The Departments also considered not requiring plans and issuers to use specific data elements in designing and applying NQTLs and preparing their comparative analyses or to provide the data to the Departments upon request. However, during their review of comparative analyses as part of their reporting requirements to Congress, the Departments found that many plans and issuers did not initially provide sufficient information to demonstrate compliance of an NQTL as written, in operation, or both. It is often difficult to assess compliance in operation without such data. By requiring the consideration, use, and production of this data, the regulation will improve the review of plans' and issuers' policies and processes, and improved parity outcomes for participants, beneficiaries, and enrollees.
The Departments expect that these final rules will provide plans and issuers with a better understanding of the requirements of MHPAEA and improve how they measure, analyze, document, and demonstrate parity with regard to NQTLs. The Departments are of the view that these final rules will help plans and issuers produce NQTL comparative analyses that meet the requirements of the CAA, 2021, resulting in improved access to and coverage of mental health and substance use disorder treatments, which should
In accordance with the Paperwork Reduction Act of 1995 (PRA 95) (44 U.S.C. 3506(c)(2)(A)), the Departments solicited comments concerning the information collection requests (ICRs) included in the proposed rules. At the same time, the Departments also submitted ICRs to OMB, in accordance with 44 U.S.C. 3507(d).
The Departments received comments that specifically addressed the paperwork burden analysis of the ICRs contained in the proposed rules. Many commenters expressed concern that the Departments underestimated the burden of collecting the required data, the burden required in conducting the substantially all and predominant variation analysis, the number of NQTLs that would need to be analyzed for each plan and issuer, and the amount of time that it would take to conduct those analyses. The Departments reviewed these public comments in developing the paperwork burden analysis discussed here.
The changes made by these final rules affect the existing OMB control number, 1210-0138. A copy of the ICR for OMB Control Number 1210-0138 may be obtained by contacting the PRA addressee listed in the following sentence or at
These final rules add new definitions, amend existing definitions, specify new requirements related to NQTLs, including by prohibiting discriminatory factors and evidentiary standards, amend existing examples illustrating the rules for NQTLs, and add new examples illustrating the rules for NQTLs, providing clarity to interested parties. The final rules also specify that the way a plan or issuer defines mental health benefits, substance use disorder benefits, and medical/surgical benefits must be consistent with generally recognized independent standards of current medical practice and add more specificity as to what conditions or disorders plans and issuers must treat as mental health conditions, substance use disorders, and medical conditions and surgical procedures. The final rules also require that plans and issuers provide meaningful benefits for covered mental health conditions or substance use disorders in each classification in which meaningful medical/surgical benefits are provided. Additionally, these final rules require plans and issuers to collect and evaluate relevant data in a manner reasonably designed to assess the impact of the NQTL on relevant outcomes related to access to mental health and substance use disorder benefits and medical/surgical benefits. Where the relevant data suggest that the NQTL contributes to material differences in access to mental health and substance use disorder benefits as compared to medical/surgical benefits in a classification, plans and issuers are required to take reasonable action, as necessary, to address the material differences to ensure compliance, in operation, with 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4). These final rules provide guidance for how to comply with the relevant data evaluation requirements in limited circumstances where data is initially and temporarily unavailable for new and newly imposed NQTLs and where no data exists that can reasonably measure any relevant impact of the NQTL on relevant outcomes related to access to mental health and substance use disorder benefits and medical/surgical benefits. In those instances, the plan or issuer must include specific information in their comparative analyses, as explained earlier in this preamble. However, as explained earlier in this preamble, the Departments are of the view that nearly all NQTLs will have some relevant data to collect and evaluate; therefore, the Departments estimate the burden as if every plan and issuer performs the data analysis.
These final rules set more specific content and data requirements for the NQTL comparative analyses required by MHPAEA as amended by the CAA, 2021, clarify when the comparative analyses need to be performed, and outline the timeframes and process for plans and issuers to provide their comparative analyses to the Departments or applicable State authority upon request.
For the purpose of this analysis, it is assumed that health insurance issuers will fulfill the data request for fully insured group health plans. This burden is accounted for under HHS' OMB Control number 0938-1393 and is discussed later in this document. It is also assumed that TPAs and other service providers will fulfill the requirements for the vast majority of self-funded group health plans.
The final rules will affect self-funded plans and MEWAs. The Departments estimate that 709 self-funded plans with 500 or more participants will prepare the comparative analysis and data themselves. The Departments also estimate that 4,076 self-funded plans with 500 or more participants will receive a generic comparative analysis from their TPA or other service provider, which they will subsequently customize to suit their specific needs. Finally, the Departments estimate that 132 plan MEWAs and 21 non-plan MEWAs that are not fully insured will provide assistance to plans in collecting and analyzing the data, and generating the comparative analyses. For more information on how the number of each type of entity is estimated, please refer to the Affected Entities section of the regulatory impact analysis.
Non-grandfathered, fully insured ERISA plans with less than 50 participants that are subject to MHPAEA under the EHB requirements of the ACA are likely to have their issuers prepare their comparative analyses. Issuers can take advantage of economies of scale by preparing the required documents for those plans purchasing coverage. HHS has jurisdiction over issuers in States that substantially fail to enforce MHPAEA's requirements and therefore is accounting for this portion of the burden in its analysis, in addition to the burden related to non-Federal governmental plans. Accordingly, this analysis considers only the burden associated with ERISA self-funded group health plans, which are under the jurisdiction of the DOL and the Treasury.
These final rules require that a plan or issuer perform and document a comparative analysis of each NQTL applicable to mental health and substance use disorder benefits. In the proposed rules, the Departments estimated that, on average, plans would need to analyze four separate NQTLs and issuers would need to analyze eight NQTLs to satisfy their additional comparative analysis requirements. The Departments further estimated that plans and issuers preparing their own comparative analyses would incur a burden of 20 hours per NQTL in the first year, with 4 hours for a general or
In response to commenters' concerns that the Departments underestimated the number of NQTLs that each plan or issuer would need to create comparative analyses for, and that plans and issuers would on average have the same number NQTLs, the Departments have revised their assumptions to 10 NQTLs for both plans and issuers. One commenter proposed the average number of NQTLs should be more than 15 at a minimum, while another noted that there were at least 15 NQTLs referenced in the proposed rules and other guidance. However, given that the number of NQTLs vary by issuer and plan, that most plans will not have every NQTL referenced in the proposed rules and other guidance (although some might have more), and that NQTLs can be counted as an umbrella group, the Departments assume 10 NQTLs.
The Departments assume that collecting the data, and reviewing and revising the comparative analyses would require 60 hours per NQTL in the first year and 12 hours per NQTL in subsequent years. For plans that receive a generic comparative analysis that will require customizing to suit the plan's specific needs, the Departments assume that it will take 30 hours per NQTL in the first year and 6 hours per NQTL in subsequent years. While plans and issuers can use other professionals to fulfill their requirements, for purposes of developing the wage estimate, the Departments assume that it will take a team of data analysts, actuaries, and attorneys to collect the data and prepare the comparative analyses and have estimated a composite wage rate of $167.48.
These final rules also require that group health plans offering group health insurance coverage must make a comparative analysis available upon request by the Departments. The CAA, 2021 requires the Departments to collect no fewer than 20 comparative analyses per year, but it also provides that the Departments shall request that a group health plan or issuer submit the comparative analyses for plans that involve potential MHPAEA violations or complaints regarding noncompliance with MHPAEA that concern NQTLs, and any other instances in which the Departments determine appropriate. Based on its prior experience and current funding, DOL expects to request 20 comparative analyses each year. See Table 12 for calculations and burden totals.
These final rules also require plans and issuers to make the comparative analyses and other applicable information required by the CAA, 2021 available upon request to participants, beneficiaries, and enrollees in all non-grandfathered group health plans and non-grandfathered group or individual health insurance coverage (including a provider or other person acting as a participant's, beneficiary's, or enrollee's authorized representative) in connection with an adverse benefit determination, as well as to participants and beneficiaries in plans subject to ERISA. The Departments estimate that each plan will receive one request per covered health plan annually and that plans will annually incur a burden of 5 minutes for a clerical worker to prepare and send the comparative analyses to each requesting participant or beneficiary. DOL also assumes that 58.3 percent of requests will be delivered electronically, resulting in a de minimis cost.
The Departments posit that plans and issuers already maintain records as part of their regular business practices. Further, ERISA section 107 includes a general 6-year retention requirement. For these reasons, the Departments estimate a minimal additional burden. The Departments estimate that, on average, any additional recordkeeping requirements will take clerical personnel 5 minutes annually. See Table 12 for calculations and burden totals.
In summary, the total burden associated with these final rules has a 3-year average hour burden of 1,195,860 hours with an equivalent cost of $164,256,956 and a cost burden of $2,477,543.
A summary of paperwork burden estimates follows:
In accordance with the Paperwork Reduction Act of 1995 (PRA 95) (44 U.S.C. 3506(c)(2)(A)), the Department solicited comments concerning the ICRs included in the proposed rules. At the same time, the Departments also submitted ICRs to OMB, in accordance with 44 U.S.C. 3507(d).
The Departments received comments that specifically addressed the paperwork burden analysis of the ICRs contained in the proposed rules. Many commenters expressed concern that the Departments underestimated the burden of collecting the required data, the burden of conducting the substantially all and predominant variation analysis, the number of NQTLs that would need to be analyzed for each plan and issuer, and the amount of time that it would take to conduct those analyses. The Departments reviewed these public comments in developing the paperwork burden analysis discussed here.
The changes made by these final rules affect the existing OMB control number, 0938-1393. HHS will update the information collection to account for the burden related to the provisions in these final rules.
The amendments to the existing MHPAEA regulations in these final rules add new definitions, amend existing definitions, clarify the rules for NQTLs, including by prohibiting discriminatory factors and evidentiary standards, amend existing examples illustrating the rules for NQTLs, and add new examples illustrating the rules for NQTLs, providing clarity to the regulated community. The amendments also clarify that whether a condition or disorder is defined by the plan or issuer as being a mental health condition or a substance use disorder for purposes of
These final rules also require plans and issuers to collect and evaluate relevant data in a manner reasonably designed to assess the impact of the NQTL on relevant outcomes related to access to mental health and substance use disorder benefits and medical/surgical benefits. Relevant data for the majority of NQTLs could include, as appropriate, but are not limited to, the number and percentage of claims denials and any other data relevant to the NQTL required by State law or private accreditation standards. Additionally, relevant data for NQTLs related to network composition could include, as appropriate, but are not limited to, in-network and out-of-network utilization rates (including data related to provider claim submissions), network adequacy metrics (including time and distance data, and data on providers accepting new patients), and provider reimbursement rates (for comparable services and as benchmarked to a reference standard).
These final rules set forth more specific content and data requirements for the NQTL comparative analyses required by MHPAEA as amended by the CAA, 2021, clarify when the comparative analyses need to be performed, and outline the timeframes and process for plans and issuers to provide their comparative analyses to the Departments or an applicable State authority upon request.
These final rules provide guidance for how to comply with the relevant data evaluation requirements in limited circumstances where data is initially and temporarily unavailable for new and newly imposed NQTLs and where no data exists that can reasonably measure any relevant impact of the NQTL on relevant outcomes related to access to mental health and substance use disorder benefits and medical/surgical benefits. In those instances, the plan or issuer must include specific information in their comparative analyses, as explained earlier in this preamble. In such instances, providing this justification is likely to be less expensive than the estimated burden for doing an analysis when there is data. However, as explained earlier in this preamble, the Departments are of the view that nearly all NQTLs will have some relevant data to collect and evaluate; therefore, the Departments estimate the burden as if every plan and issuer performs the data analysis.
As discussed earlier in this preamble, HHS enforces applicable provisions of Title XXVII of the PHS Act, including the provisions added by MHPAEA, with respect to health insurance issuers offering group and individual health insurance coverage in States that elect not to enforce or fail to substantially enforce MHPAEA or another PHS Act provision. HHS is therefore accounting for this portion of the burden in its analysis, in addition to accounting for the burden on sponsors of self-funded non-Federal governmental plans.
These final rules will affect issuers, TPAs, and self-funded non-Federal governmental plans. Health insurance issuers offering individual or group health insurance coverage usually have multiple products offered in multiple States. HHS estimates a total of 479 health insurance companies offering individual or group health insurance coverage nationwide, with a total of 1,467 issuers (health insurance company/State combinations). In addition, there are an estimated 205 TPAs that provide services to group health plans, particularly for self-funded plans where TPAs often establish provider networks and adjudicate claims, which will be impacted by these final rules. Furthermore, sponsors of self-funded non-Federal governmental plans will be affected by these final rules. HHS estimates that out of the estimated 32,901 self-funded non-Federal governmental plans, 505 self-funded non-Federal governmental plans with 500 or more participants will prepare the comparative analysis and data themselves, and 2,906 self-funded non-Federal governmental plans with 500 or more participants will receive a generic comparative analysis from their TPA, which they will subsequently customize to suit their specific needs. For more information on how the number of each type of entity is estimated, please refer to section IV.5.2 of the regulatory impact analysis.
These final rules require that a plan or issuer perform and document a comparative analysis of each NQTL applicable to mental health and substance use disorder benefits. In the proposed rules, the Departments estimated that, on average, plans would need to analyze four separate NQTLs and issuers would need to analyze eight NQTLs to satisfy their additional comparative analysis requirements. The Departments further estimated that plans and issuers preparing their own comparative analyses would incur a burden of 20 hours per NQTL in the first year, with 4 hours for a general or operations manager to review the requirements and outline the changes needed for the comparative analyses and 16 hours for a business operations specialist to prepare the comparative analyses. Once the comparative analyses are performed and documented, plans and issuers would need to update the analyses when making changes to the terms of the plan or coverage, including changes to the way NQTLs are applied to mental health and substance use disorder benefits, as well as medical and surgical benefits. In subsequent years, the Departments estimated plans would incur a burden of 10 hours annually per NQTL to update the analyses, with 2 hours for a general or operations manager and 8 hours for a business operations specialist.
In response to commenters' concerns that the Departments underestimated the number of NQTLs that each plan or issuer would need to create comparative analyses for, and that plans and issuers would on average have the same number NQTLs, the Departments have revised their assumptions to 10 NQTLs for both plans and issuers. One commenter proposed the average number of NQTLs should be more than 15 at a minimum, while another noted that there were at least 15 NQTLs referenced in the proposed rules and other guidance. However, because the number of NQTLs varies by issuer and plan, most plans will not have every NQTL referenced in the rules or guidance (although some might use more), and NQTLs can be counted as an umbrella group, the Departments assume 10 NQTLs.
The Departments assume that collecting the data, and reviewing and revising the comparative analyses will require 60 hours per NQTL in the first year and 12 hours per NQTL in subsequent years. For plan sponsors that receive a generic comparative analysis from a TPA that will require customizing to suit the plan's specific needs, the Departments assume that it will take 30 hours per NQTL in the first year and 6 hours per NQTL in subsequent years. While plans and issuers can use other professionals to fulfill their requirements, for purposes of developing the wage estimate, the Departments assume that it will take a team of data analysts, actuaries, and attorneys to collect the data and prepare the comparative analyses, and have estimated a composite wage rate of
These final rules require that plans or issuers make their comparative analyses available upon request to the Departments. The CAA, 2021 requires the Departments to collect not fewer than 20 comparative analyses per year, but it also provides that the Departments shall request that a plan or issuer submit the comparative analyses for plans that involve potential MHPAEA violations or complaints regarding noncompliance with MHPAEA that concern NQTLs, and any other instances in which the Departments determine appropriate. HHS expects to request at least 20 comparative analyses each year. See Table 14 for calculations and burden totals.
These final rules also require plans and issuers to make the comparative analyses and other applicable information required by the CAA, 2021 available upon request to participants, beneficiaries, and enrollees in all non-grandfathered group health plans and non-grandfathered group or individual health insurance coverage (including a provider or other person acting as a participant's, beneficiary's, or enrollee's authorized representative) in connection with an adverse benefit determination, as well as to participants and beneficiaries in plans subject to ERISA. HHS estimates that each non-Federal governmental plan and each issuer will receive one request annually and that plans and issuers will annually incur a burden of 5 minutes for a clerical worker to prepare and send the comparative analyses to each requesting participant, beneficiary, or enrollee. HHS also assumes that 58.3 percent of requests will be delivered electronically, resulting in a de minimis cost.
HHS posits that plans and issuers already maintain records as part of their regular business practices. HHS therefore estimates a minimal additional burden associated with these final rules. HHS estimates that each non-Federal governmental plan and issuer will annually incur a burden of 5 minutes, on average. See Table 14 for calculations and burden totals.
HHS will revise the information collection approved under OMB Control
The regulatory amendments to implement a provision in the CAA, 2023 that sunsets the election option for sponsors of self-funded non-Federal governmental plans to opt out of requirements under MHPAEA eliminate the need for sponsors to submit a notice to the Federal Government regarding their plan's opt-out election (or, for sponsors of multiple plans, their plans' opt-out elections), as long as the sponsors do not elect to permissibly opt out of other requirements.
These amendments also generate cost savings for the Federal Government, as HHS will no longer have to process the opt-out notices submitted by plan sponsors. The processing of the opt-out notices is performed by an HHS employee. The average labor rate for the employee who completes this task, which includes the locality pay adjustment for the area of Washington-Baltimore-Arlington, and the cost of fringe benefits and other indirect costs, is $113.04 per hour for a GS-13, step 1 employee.
The regulatory amendments to implement the provision in the CAA, 2023 that sunsets the election option for sponsors of self-funded non-Federal governmental plans to opt out of requirements under MHPAEA also eliminate the need for those sponsors to prepare and disseminate an opt-out notice to plan participants regarding their plan sponsors' opt-out election, as long as the sponsors do not elect to permissibly opt out of other requirements. HHS estimates that sponsors of 185 plans will no longer need to prepare and disseminate an opt-out notice to plan participants. HHS estimates that for each self-funded non-Federal governmental plan whose sponsor has elected to opt out of the requirements under MHPAEA, an administrative assistant will need 15 minutes to develop and update the HHS standardized disclosure statement annually. Further, self-funded non-Federal governmental plan sponsors will no longer be required to print and mail the opt-out notice to plan participants and will therefore no longer incur costs associated with this requirement. As noted earlier in section IV.5.2 of the regulatory impact analysis, HHS estimates that there are approximately 261 participants in each self-funded non-Federal governmental plan, and therefore approximately 48,285 notices
The burden related to HIPAA opt-outs is currently approved under OMB Control Number 0938-0702.
In summary, the total new burden imposed by these final rules regarding NQTL comparative analyses and compliance, has a 3-year average hour burden of approximately 1,003,332 hours with an equivalent cost of approximately $166,471,063 and a total cost burden of approximately $107,447. The final amendments to implement the CAA, 2023 provision that sunsets the MHPAEA opt-out election for sponsors of self-funded non-Federal governmental plans will result in an annual burden reduction of approximately 92 hours with an equivalent annual cost savings of approximately $7,991 and total cost savings of approximately $10,405.
A summary of the change in paperwork burden estimates follows:
Numbers in parentheses denote a burden reduction.
The Regulatory Flexibility Act (RFA)
The Departments certify that these final rules will not have a significant impact on a substantial number of small entities. The Departments have prepared the following justification for this determination.
As documented in the 2022 MHPAEA Report to Congress and the 2023 MHPAEA Comparative Analysis Report to Congress,
These final rules clarify existing definitions, add new definitions of key terms, and provide additional examples of the application of MHPAEA to NQTLs to improve the understanding and ability of the regulated community to comply with MHPAEA. The final rules also clarify that plan and issuer definitions of conditions or disorders as mental health conditions and substance use disorders must be consistent with generally recognized independent standards of current medical practice and add more specificity as to what plans and issuers must treat as mental health conditions or substance use disorders. The final rules also require that plans and issuers must provide meaningful benefits for covered mental health conditions or substance use disorders in each such classification in which medical/surgical benefits are provided. These final rules also require plans and issuers to collect and evaluate relevant data in a manner reasonably designed to assess the impact of the NQTL on access to mental health and substance use disorder benefits and medical/surgical benefits. Relevant data for the majority of NQTLs could include, as appropriate, but are not limited to, the number and percentage of claims denials and any other data relevant to the NQTL as required by State law or private accreditation standards. Additionally, for NQTLs related to network composition, relevant data could include, as appropriate, but are not limited to, in-network and out-of-network utilization rates (including data related to provider claim submissions), network adequacy metrics (including time and distance data, and data on providers accepting new patients), and provider reimbursement rates (for comparable services and as benchmarked to a reference standard). Under these final rules, the Departments may specify the type, form, and manner for the relevant data evaluation requirements in future guidance, which will allow the Departments to adjust the data requirements as needed to account for enforcement experience and industry trends.
These final rules also set more specific content requirements for
The Departments expect that these final rules will result in plans and issuers having a better understanding of the MHPAEA requirements for NQTLs. These final rules will also improve the manner in which parity is measured, compared, and demonstrated by plans and issuers. The Departments are of the view that these final rules will improve the compliance of plans and issuers with these requirements, resulting in greater parity in access to benefits for mental health conditions and substance use disorders as compared with medical/surgical benefits, as intended by MHPAEA.
Additionally, in these final rules, HHS finalizes regulatory amendments to implement a provision in the CAA, 2023 that sunsets the election option for sponsors of self-funded non-Federal governmental plans to opt out of requirements under MHPAEA. HHS is of the view that these regulatory amendments will ultimately increase access to mental health and substance use disorder services, and increase parity of benefits for such services as compared to benefits for medical/surgical services by requiring self-funded non-Federal governmental plans that had previously opted out to come into compliance with the requirements under MHPAEA.
For purposes of analysis under the RFA, the Departments consider employee benefit plans with fewer than 100 participants to be small entities. The basis of this definition is found in section 104(a)(2) of ERISA, which permits the Secretary of Labor to prescribe simplified annual reports for plans that cover fewer than 100 participants. Under section 104(a)(3) of ERISA, the Secretary of Labor may also provide for exemptions or simplified annual reporting and disclosure for welfare benefit plans. Under the authority of section 104(a)(3), DOL has previously issued (
As discussed in section IV.5.2 of the regulatory impact analysis, these final rules will affect nearly all small ERISA-covered group health plans, including fully insured group health plans and self-funded group health plans, as well as small health insurance issuers and non-Federal governmental plans. The Departments estimate that these final rules will affect approximately 106,000 fully insured plans with 50 to 100 participants,
The Departments also estimate that approximately 25,300 self-funded plans with less than 100 participants will be affected by these final rules.
As discussed in section IV.5.1 of the regulatory impact analysis, these final rules will also affect health insurance issuers. The Departments estimate that these final rules will affect 479 health insurance companies nationwide that provide mental health and substance use disorder benefits in the group and individual health insurance markets, with a total of 1,467 issuers (health insurance company/State combinations).
Health insurance companies are generally classified under the North American Industry Classification System (NAICS) code 524114 (Direct Health and Medical Insurance Carriers). According to SBA size standards, entities with average annual receipts of $47 million or less are considered small entities for this NAICS code.
The amendments to implement the CAA, 2023 provision that sunsets the MHPAEA opt-out election will affect sponsors of self-funded non-Federal governmental plans, some of which might be small entities. As noted in section IV.8.4 of the regulatory impact analysis, the extent to which these plans are out of compliance is unknown, and the costs for them to come into compliance are expected to vary from plan to plan. HHS solicited comments in the proposal on the number of small entities that would be impacted by the implementation of the sunset provision and the potential effects on small entities. HHS did not receive any comments on these estimates.
These final rules clarify existing definitions, add new definitions, generally ensure that the NQTLs applicable to mental health and substance use disorder benefits are generally no more restrictive than the predominant NQTLs applied to substantially all medical/surgical benefits, and provide additional examples of the application of MHPAEA to NQTLs to improve the understanding and ability of the regulated community to comply with MHPAEA. These final rules also clarify that mental health benefits and substance use disorder benefits must be defined to be consistent with generally recognized independent standards of current medical practice and add more specificity as to what plans and issuers must define as mental health conditions or substance use disorders. The final rules also require that plans and issuers must provide meaningful benefits for covered mental health conditions or substance use disorders in each classification in which medical/surgical benefits are provided. These final rules also require plans and issuers to collect and evaluate relevant data and include an analysis of the data as part of each comparative analysis. The Departments are of the view that plans and issuers will incur costs in collecting, preparing, and analyzing the data.
The Departments are of the view that the final amendments might cause small plans and issuers to revise their policies and remove treatment limitations. Therefore, small plans and issuers could incur costs to revise plan provisions, which may result in increased costs from expanded utilization of mental health and substance use disorder services. The Departments face uncertainty in quantifying these costs as they cannot estimate the increase in utilization and which services may see the largest increase in utilization.
These final rules codify existing guidance, set more specific content requirements for comparative analyses required by the CAA, 2021, and outline the timeframes and process for plans and issuers to provide their comparative analyses to the Departments upon request. Participants and beneficiaries in ERISA plans may also request a copy of comparative analyses at any time, and all participants, beneficiaries, and enrollees may request a comparative analysis in connection with an adverse benefit determination. Additionally, in these final rules, HHS finalizes regulatory amendments to implement the provision in the CAA, 2023 that sunsets the election option for self-funded non-Federal governmental plans to opt out of requirements under MHPAEA.
In the first year, the Departments estimate that TPAs, MEWAs, issuers, and self-funded group health plans, most if not all of which are large entities, will conduct the comparative analysis themselves will incur an incremental per-entity cost of approximately $101,600 associated with these final rules. The Departments also estimate an incremental per-entity cost of $51,300 in the first year for self-funded group health plans that will receive a generic comparative analysis from their TPA or other service provider and subsequently will customize to suit their specific needs.
In the subsequent years, the Departments estimate that TPAs, MEWAs, issuers, and self-funded group health plans that will conduct the comparative analysis themselves, will incur an incremental per-entity cost of approximately $20,100 associated with these final rules and amendments. The Departments also estimate an incremental per-entity cost of $10,100 in subsequent years for self-funded group health plans that will receive a generic comparative analysis from their TPA or other service provider and subsequently will customize it to suit their specific needs.
The Departments note that these per-entity costs are average costs, and these costs are expected to vary by plan or issuer depending on the number of NQTL analyses performed.
In the proposal, commenters expressed concerns that the Departments underestimated the burden of collecting the required data and performing the comparative analyses. One commenter stated that small plans lack access to aggregated claims data. The same commenter suggested that the proposal was burdensome, since it required information that was beyond the possession of small plans. The commenter contended that small employers may decide to stop offering health coverage altogether in favor of having their employees purchase their own individual health insurance coverage through the ACA Exchange, stating that the penalties under the ACA for employers not offering coverage may be preferable compared to the costly requirements under the proposal. The Departments note that there are no such penalties that apply to small employers. The commenter also did not provide any data or evidence.
Another commenter stated that there is a limited market of vendors for conducting the comparative analyses, mentioning that these services could cost upwards of $100,000. The same commenter expressed concern that the proposal's comparative analysis requirements would disproportionately consume the health benefits budget of plan sponsors, potentially causing small employers to discontinue offering mental health and substance use disorder benefits. The Departments note that while there is a possibility that some plans and issuers will stop offering mental health and substance use disorder benefits, the Departments anticipate that these final rules will expand the level of coverage for mental health and substance use disorder benefits, which will result in reduced out-of-pocket spending for plan participants, beneficiaries, and enrollees. The Departments also note that the commenter did not cite any data or evidence.
Furthermore, another commenter was concerned that the proposal would disrupt the operations of plans, by forcing plans to change their network composition and eliminate the use of common medical management techniques. The same commenter stated that the burden would fall on small plans, since they may have insufficient resources to cope with this unanticipated cost burden. The commenter did not provide any data or evidence to support these assertions. As discussed earlier in this preamble, these final rules do not eliminate the use of prior authorization or other medical
Finally, the Departments did not receive any comments from the Chief Counsel for Advocacy of SBA.
There are no duplicate, overlapping, or relevant Federal rules.
Under the Memorandum of Agreement, Review of Treasury Regulations under Executive Order 12866 (June 9, 2023), tax regulatory actions issued by the Internal Revenue Service (IRS) are not subject to the requirements of section 6 of Executive Order 12866, as amended. Therefore, a regulatory impact analysis is not required. As required by section 7805(f) of the Code, these regulations were submitted to the Chief Counsel for Advocacy of SBA for comment on their impact on small business.
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in an expenditure of $100 million or more (adjusted annually for inflation with the base year 1995) in any one year by State, local, and Tribal governments, in the aggregate, or by the private sector.
Executive Order 13132 outlines fundamental principles of federalism, and requires the adherence to specific criteria by Federal agencies in the process of their formulation and implementation of policies that have “substantial direct effects” on the States, the relationship between the Federal Government and States, or on the distribution of power and responsibilities among the various levels of government.
In the Departments' view, these final rules have federalism implications because they will have direct effects on the States, on the relationship between the Federal Government and the States, and on the distribution of power and responsibilities among various levels of government. These final rules could also have federalism implications because the Departments remove the reference to State guidelines in the definitions of medical/surgical benefits, mental health benefits, and substance use disorder benefits, and amend these definitions to provide that any condition or procedure defined by the plan or coverage as being or not being a mental health condition or substance use disorder, respectively, must be defined to be consistent with generally recognized independent standards of current medical practice, which for purposes of these final rules are all conditions or disorders under the relevant chapters of the ICD or DSM. Finally, these final rules have federalism implications because the implementation of the CAA, 2023 provision that sunsets the election option for sponsors of self-funded non-Federal governmental plans to opt out of requirements under MHPAEA will require State and local government sponsors of self-funded non-Federal governmental plans that currently opt out of requirements under MHPAEA to come into compliance.
In general, through section 514, ERISA supersedes State laws to the extent that they relate to any covered employee benefit plan, and preserves State laws that regulate insurance, banking, or securities. While ERISA prohibits States from regulating a plan as an insurance or investment company or bank, the preemption provisions of section 731 of ERISA and section 2724 of the PHS Act (implemented in 29 CFR 2590.731(a) and 45 CFR 146.143(a)) apply so that the MHPAEA requirements are not to be “construed to supersede any provision of State law which establishes, implements, or continues in effect any standard or requirement solely relating to health insurance issuers in connection with individual or group health insurance coverage except to the extent that such standard or requirement prevents the application of a requirement” of MHPAEA. The conference report accompanying HIPAA indicates that this is intended to be the “narrowest” preemption of State laws.
States may continue to apply State law requirements except to the extent that such requirements prevent the application of the MHPAEA requirements that are the subject of this rulemaking. State insurance laws that are more stringent than the Federal requirements are unlikely to “prevent the application of” MHPAEA and be preempted. Accordingly, States have significant latitude to impose requirements on health insurance issuers that are more restrictive than the Federal law.
Throughout the process of developing these final rules, to the extent feasible within the specific preemption provisions of HIPAA as it applies to MHPAEA, the Departments have attempted to balance the States' interests in regulating health insurance issuers, and Congress' intent to provide uniform minimum protections to consumers in every State. By doing so, it is the Departments' view that they have complied with the requirements of Executive Order 13132.
In accordance with Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (also known as the Congressional Review Act, 5 U.S.C. 801
Excise taxes, Health care, Health insurance, Pensions, Reporting and recordkeeping requirements.
Continuation coverage, Disclosure, Employee benefit plans, Group health plans, Health care, Health insurance, Medical child support, Reporting and recordkeeping requirements.
Health care, Health insurance, Reporting and recordkeeping requirements.
Aged, Citizenship and naturalization, Civil rights, Health care, Health insurance, Individuals with disabilities, Intergovernmental relations, Reporting
Accordingly, the Treasury Department and the IRS amend 26 CFR part 54 as follows:
26 U.S.C. 7805 * * *
The revisions and additions read as follows:
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(A) Medical management standards (such as prior authorization) limiting or excluding benefits based on medical necessity or medical appropriateness, or based on whether the treatment is experimental or investigative;
(B) Formulary design for prescription drugs;
(C) For plans with multiple network tiers (such as preferred providers and participating providers), network tier design;
(D) Standards related to network composition, including but not limited to, standards for provider and facility admission to participate in a network or for continued network participation, including methods for determining reimbursement rates, credentialing standards, and procedures for ensuring the network includes an adequate number of each category of provider and facility to provide services under the plan;
(E) Plan methods for determining out-of-network rates, such as allowed amounts; usual, customary, and reasonable charges; or application of other external benchmarks for out-of-network rates;
(F) Refusal to pay for higher-cost therapies until it can be shown that a lower-cost therapy is not effective (also known as fail-first policies or step therapy protocols);
(G) Exclusions based on failure to complete a course of treatment; and
(H) Restrictions based on geographic location, facility type, provider specialty, and other criteria that limit the scope or duration of benefits for services provided under the plan.
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(B) A determination by the Secretary of whether to require cessation of a nonquantitative treatment limitation under this paragraph (c)(4)(v) will be based on an evaluation of the relevant facts and circumstances involved in the specific final determination and the nature of the underlying nonquantitative treatment limitation and will take into account the interest of plan participants and beneficiaries and feedback from the plan.
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(i) This section applies to group health plans on the first day of the first plan year beginning on or after January 1, 2025, except that the requirements of paragraphs (c)(2)(ii)(A), (c)(4)(i)(B), and (c)(4)(iii) of this section apply on the first day of the first plan year beginning on or after January 1, 2026.
(ii) Until the applicability date in paragraph (i)(1)(i) of this section, plans are required to continue to comply with 26 CFR 54.9812-1, revised as of April 1, 2022.
(j)
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(i) Identification of the nonquantitative treatment limitation, including the specific terms of the plan or other relevant terms regarding the nonquantitative treatment limitation, the policies or guidelines (internal or external) in which the nonquantitative treatment limitation appears or is described, and the applicable sections of any other relevant documents, such as provider contracts, that describe the nonquantitative treatment limitation;
(ii) Identification of all mental health or substance use disorder benefits and medical/surgical benefits to which the nonquantitative treatment limitation applies, including a list of which benefits are considered mental health or substance use disorder benefits and which benefits are considered medical/surgical benefits; and
(iii) A description of which benefits are included in each classification set forth in § 54.9812-1(c)(2)(ii)(A).
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(i) Identification of every factor considered or relied upon, as well as the evidentiary standards considered or relied upon to design or apply each factor and the sources from which each evidentiary standard was derived, in determining which mental health or substance use disorder benefits and which medical/surgical benefits are subject to the nonquantitative treatment limitation; and
(ii) A definition of each factor, including:
(A) A detailed description of the factor;
(B) A description of each evidentiary standard used to design or apply each
(C) A description of any steps the plan has taken to correct, cure, or supplement any information, evidence, sources, or standards that would otherwise have been considered biased or not objective under § 54.9812-1(c)(4)(i)(B)(
(3)
(i) A detailed explanation of how each factor identified and defined in paragraph (c)(2) of this section is used to determine which mental health or substance use disorder benefits and which medical/surgical benefits are subject to the nonquantitative treatment limitation;
(ii) An explanation of the evidentiary standards or other information or sources (if any) considered or relied upon in designing or applying the factors or relied upon in designing and applying the nonquantitative treatment limitation, including in the determination of whether and how mental health or substance use disorder benefits or medical/surgical benefits are subject to the nonquantitative treatment limitation;
(iii) If the application of the factor depends on specific decisions made in the administration of benefits, the nature of the decisions, the timing of the decisions, and the professional designations and qualifications of each decision maker;
(iv) If more than one factor is identified and defined in paragraph (c)(2) of this section, an explanation of:
(A) How all of the factors relate to each other;
(B) The order in which all the factors are applied, including when they are applied;
(C) Whether and how any factors are given more weight than others; and
(D) The reasons for the ordering or weighting of the factors; and
(v) Any deviations or variations from a factor, its applicability, or its definition (including the evidentiary standards used to define the factor and the information or sources from which each evidentiary standard was derived), such as how the factor is used differently to apply the nonquantitative treatment limitation to mental health or substance use disorder benefits as compared to medical/surgical benefits, and a description of how the plan establishes such deviations or variations.
(4)
(i) Documentation of each factor identified and defined in paragraph (c)(2) of this section that was applied to determine whether the nonquantitative treatment limitation applies to mental health or substance use disorder benefits and medical/surgical benefits in a classification, including, as relevant:
(A) Quantitative data, calculations, or other analyses showing whether, in each classification in which the nonquantitative treatment limitation applies, mental health or substance use disorder benefits and medical/surgical benefits met or did not meet any applicable threshold identified in the relevant evidentiary standard to determine that the nonquantitative treatment limitation would or would not apply; and
(B) Records maintained by the plan documenting the consideration and application of all factors and evidentiary standards, as well as the results of their application;
(ii) In each classification in which the nonquantitative treatment limitation applies to mental health or substance use disorder benefits, a comparison of how the nonquantitative treatment limitation, as written, is designed and applied to mental health or substance use disorder benefits and to medical/surgical benefits, including the specific provisions of any forms, checklists, procedure manuals, or other documentation used in designing and applying the nonquantitative treatment limitation or that address the application of the nonquantitative treatment limitation;
(iii) Documentation demonstrating how the factors are comparably applied, as written, to mental health or substance use disorder benefits and medical/surgical benefits in each classification, to determine which benefits are subject to the nonquantitative treatment limitation; and
(iv) An explanation of the reasons for any deviations or variations in the application of a factor used to apply the nonquantitative treatment limitation, or the application of the nonquantitative treatment limitation, to mental health or substance use disorder benefits as compared to medical/surgical benefits, and how the plan establishes such deviations or variations, including:
(A) In the definition of the factors, the evidentiary standards used to define the factors, and the sources from which the evidentiary standards were derived;
(B) In the design of the factors or evidentiary standards; or
(C) In the application or design of the nonquantitative treatment limitation.
(5)
(i) A comprehensive explanation of how the plan evaluates whether, in operation, the processes, strategies, evidentiary standards, or other factors used in designing and applying the nonquantitative treatment limitation to mental health or substance use disorder benefits in a classification are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in designing and applying the nonquantitative treatment limitation with respect to medical/surgical benefits, including:
(A) An explanation of any methodology and underlying data used to demonstrate the application of the nonquantitative treatment limitation, in operation;
(B) The sample period, inputs used in any calculations, definitions of terms used, and any criteria used to select the mental health or substance use disorder benefits and medical/surgical benefits to which the nonquantitative treatment limitation is applicable;
(C) With respect to a nonquantitative treatment limitation for which relevant data is temporarily unavailable as described in § 54.9812-1(c)(4)(iii)(A)(
(D) With respect to a nonquantitative treatment limitation for which no data exist that can reasonably assess any relevant impact of the nonquantitative treatment limitation on relevant outcomes related to access to mental health and substance use disorder benefits and medical/surgical benefits as described in § 54.9812-1(c)(4)(iii)(A)(
(ii) Identification of the relevant data collected and evaluated, as required under § 54.9812-1(c)(4)(iii)(A);
(iii) Documentation of the outcomes that resulted from the application of the nonquantitative treatment limitation to mental health or substance use disorder benefits and medical/surgical benefits, including:
(A) The evaluation of relevant data as required under § 54.9812-1(c)(4)(iii)(A); and
(B) A reasoned justification and analysis that explains why the plan concluded that any differences in the relevant data do or do not suggest the nonquantitative treatment limitation contributes to material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits, in accordance with § 54.9812-1(c)(4)(iii)(B)(
(iv) A detailed explanation of any material differences in access demonstrated by the outcomes evaluated under paragraph (c)(5)(iii) of this section, including:
(A) A reasoned explanation of any material differences in access that are not attributable to differences in the comparability or relative stringency of the nonquantitative treatment limitation as applied to mental health or substance use disorder benefits and medical/surgical benefits (including any considerations beyond a plan's control that contribute to the existence of material differences) and a detailed explanation of the bases for concluding that material differences are not attributable to differences in the comparability or relative stringency of the nonquantitative treatment limitation; and
(B) To the extent differences in access to mental health or substance use disorder benefits are attributable to generally recognized independent professional medical or clinical standards or carefully circumscribed measures reasonably and appropriately designed to detect or prevent and prove fraud and abuse that minimize the negative impact on access to appropriate mental health and substance use disorder benefits, and such standards or measures are used as the basis for a factor or evidentiary standard used to design or apply a nonquantitative treatment limitation, documentation explaining how any such differences are attributable to those standards or measures, as required in § 54.9812-1(c)(4)(iii)(B)(
(v) A discussion of the actions that have been or are being taken by the plan to address any material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits, including the actions the plan has taken or is taking under § 54.9812-1(c)(4)(iii)(B)(
(A) A reasoned explanation of any material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits that persist despite reasonable actions that have been or are being taken; and
(B) For a plan designing and applying one or more nonquantitative treatment limitations related to network composition, a discussion of the actions that have been or are being taken to address material differences in access to in-network mental health and substance use disorder benefits as compared to in-network medical/surgical benefits, including those listed in § 54.9812-1(c)(4)(iii)(C).
(6)
(i) Any findings or conclusions indicating that the plan is or is not (or might or might not be) in compliance with the requirements of § 54.9812-1(c)(4), including any additional actions the plan has taken or intends to take to address any potential areas of concern or noncompliance;
(ii) A reasoned and detailed discussion of the findings and conclusions described in paragraph (c)(6)(i) of this section;
(iii) Citations to any additional specific information not otherwise included in the comparative analysis that supports the findings and conclusions described in paragraph (c)(6)(i) of this section not otherwise discussed in the comparative analysis;
(iv) The date the analysis is completed and the title and credentials of all relevant persons who participated in the performance and documentation of the comparative analysis; and
(v) If the comparative analysis relies upon an evaluation by a reviewer or consultant considered by the plan to be an expert, an assessment of each expert's qualifications and the extent to which the plan ultimately relied upon each expert's evaluation in performing and documenting the comparative analysis of the design and application of the nonquantitative treatment limitation applicable to both mental health or substance use disorder benefits and medical/surgical benefits.
(d)
(2)
(3)
(4)
(ii)
(A) The following statement prominently displayed on the first page, in no less than 14-point font: “Attention! The Department of the Treasury has determined that [insert the name of group health plan] is not in compliance with the Mental Health Parity and Addiction Equity Act.”;
(B) A summary of changes the plan has made as part of its corrective action plan specified to the Secretary following the initial determination of noncompliance, including an explanation of any opportunity for a participant or beneficiary to have a claim for benefits submitted or reprocessed;
(C) A summary of the Secretary's final determination that the plan is not in compliance with § 54.9812-1(c)(4) or this section, including any provisions or practices identified as being in violation of § 54.9812-1(c)(4) or this section, additional corrective actions identified by the Secretary in the final determination notice, and information on how participants and beneficiaries can obtain from the plan a copy of the final determination of noncompliance;
(D) Any additional actions the plan is taking to come into compliance with § 54.9812-1(c)(4) or this section, when the plan will take such actions, and a clear and accurate statement explaining whether the Secretary has concurred with those actions; and
(E) Contact information for questions and complaints, and a statement explaining how participants and beneficiaries can obtain more information about the notice, including:
(
(
(iii)
(A) The format is readily accessible;
(B) The notice is provided in paper form free of charge upon request; and
(C) In a case in which the electronic form is an internet posting, the plan timely notifies the participant or beneficiary in paper form (such as a postcard) or email, that the documents are available on the internet, provides the internet address, includes the statement required in paragraph (d)(4)(ii)(A) of this section, and notifies the participant or beneficiary that the documents are available in paper form upon request.
(e)
(1) Any applicable State authority; and
(2) A participant or beneficiary (including a provider or other person acting as a participant's or beneficiary's authorized representative) who has received an adverse benefit determination related to mental health or substance use disorder benefits.
(f)
(g)
(h)
For the reasons set forth in the preamble, the Department of Labor amends 29 CFR part 2590 as set forth below:
29 U.S.C. 1027, 1059, 1135, 1161-1168, 1169, 1181-1183, 1181 note, 1185, 1185a-n, 1191, 1191a, 1191b, and 1191c; sec. 101(g), Pub. L. 104-191, 110 Stat. 1936; sec. 401(b), Pub. L. 105-200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 512(d), Pub. L. 110-343, 122 Stat. 3881; sec. 1001, 1201, and 1562(e), Pub. L. 111-148, 124 Stat. 119, as amended by Pub. L. 111-152, 124 Stat. 1029;
The revisions and additions read as follows:
(a)
(2)
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(ii)
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(i)
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(ii)
(A) Medical management standards (such as prior authorization) limiting or excluding benefits based on medical necessity or medical appropriateness, or based on whether the treatment is experimental or investigative;
(B) Formulary design for prescription drugs;
(C) For plans with multiple network tiers (such as preferred providers and participating providers), network tier design;
(D) Standards related to network composition, including but not limited to, standards for provider and facility admission to participate in a network or for continued network participation, including methods for determining reimbursement rates, credentialing standards, and procedures for ensuring the network includes an adequate number of each category of provider and facility to provide services under the plan or coverage;
(E) Plan or issuer methods for determining out-of-network rates, such as allowed amounts; usual, customary, and reasonable charges; or application of other external benchmarks for out-of-network rates;
(F) Refusal to pay for higher-cost therapies until it can be shown that a lower-cost therapy is not effective (also known as fail-first policies or step therapy protocols);
(G) Exclusions based on failure to complete a course of treatment; and
(H) Restrictions based on geographic location, facility type, provider specialty, and other criteria that limit the scope or duration of benefits for services provided under the plan or coverage.
(iii)
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(B) A determination by the Secretary of whether to require cessation of a nonquantitative treatment limitation under this paragraph (c)(4)(v) will be based on an evaluation of the relevant facts and circumstances involved in the specific final determination and the nature of the underlying nonquantitative treatment limitation and will take into account the interest of plan participants and beneficiaries and feedback from the plan or issuer.
(vi)
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(3)
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(4)
(i) * * *
(1)
(i) This section applies to group health plans and health insurance issuers offering group health insurance coverage on the first day of the first plan year beginning on or after January 1, 2025, except that the requirements of paragraphs (c)(2)(ii)(A), (c)(4)(i)(B), and (c)(4)(iii) of this section apply on the first day of the first plan year beginning on or after January 1, 2026.
(ii) Until the applicability date in paragraph (i)(1)(i) of this section, plans and issuers are required to continue to comply with 29 CFR 2590.712, revised as of July 1, 2022.
(j)
(a)
(b)
(c)
(1)
(i) Identification of the nonquantitative treatment limitation, including the specific terms of the plan or coverage or other relevant terms regarding the nonquantitative treatment limitation, the policies or guidelines (internal or external) in which the nonquantitative treatment limitation appears or is described, and the applicable sections of any other relevant documents, such as provider contracts, that describe the nonquantitative treatment limitation;
(ii) Identification of all mental health or substance use disorder benefits and medical/surgical benefits to which the nonquantitative treatment limitation applies, including a list of which benefits are considered mental health or
(iii) A description of which benefits are included in each classification set forth in § 2590.712(c)(2)(ii)(A).
(2)
(i) Identification of every factor considered or relied upon, as well as the evidentiary standards considered or relied upon to design or apply each factor and the sources from which each evidentiary standard was derived, in determining which mental health or substance use disorder benefits and which medical/surgical benefits are subject to the nonquantitative treatment limitation; and
(ii) A definition of each factor, including:
(A) A detailed description of the factor;
(B) A description of each evidentiary standard used to design or apply each factor (and the source of each evidentiary standard) identified under paragraph (c)(2)(i) of this section; and
(C) A description of any steps the plan or issuer has taken to correct, cure, or supplement any information, evidence, sources, or standards that would otherwise have been considered biased or not objective under § 2590.712(c)(4)(i)(B)(
(3)
(i) A detailed explanation of how each factor identified and defined in paragraph (c)(2) of this section is used to determine which mental health or substance use disorder benefits and which medical/surgical benefits are subject to the nonquantitative treatment limitation;
(ii) An explanation of the evidentiary standards or other information or sources (if any) considered or relied upon in designing or applying the factors or relied upon in designing and applying the nonquantitative treatment limitation, including in the determination of whether and how mental health or substance use disorder benefits or medical/surgical benefits are subject to the nonquantitative treatment limitation;
(iii) If the application of the factor depends on specific decisions made in the administration of benefits, the nature of the decisions, the timing of the decisions, and the professional designations and qualifications of each decision maker;
(iv) If more than one factor is identified and defined in paragraph (c)(2) of this section, an explanation of:
(A) How all of the factors relate to each other;
(B) The order in which all the factors are applied, including when they are applied;
(C) Whether and how any factors are given more weight than others; and
(D) The reasons for the ordering or weighting of the factors; and
(v) Any deviations or variations from a factor, its applicability, or its definition (including the evidentiary standards used to define the factor and the information or sources from which each evidentiary standard was derived), such as how the factor is used differently to apply the nonquantitative treatment limitation to mental health or substance use disorder benefits as compared to medical/surgical benefits, and a description of how the plan or issuer establishes such deviations or variations.
(4)
(i) Documentation of each factor identified and defined in paragraph (c)(2) of this section that was applied to determine whether the nonquantitative treatment limitation applies to mental health or substance use disorder benefits and medical/surgical benefits in a classification, including, as relevant:
(A) Quantitative data, calculations, or other analyses showing whether, in each classification in which the nonquantitative treatment limitation applies, mental health or substance use disorder benefits and medical/surgical benefits met or did not meet any applicable threshold identified in the relevant evidentiary standard to determine that the nonquantitative treatment limitation would or would not apply; and
(B) Records maintained by the plan or issuer documenting the consideration and application of all factors and evidentiary standards, as well as the results of their application;
(ii) In each classification in which the nonquantitative treatment limitation applies to mental health or substance use disorder benefits, a comparison of how the nonquantitative treatment limitation, as written, is designed and applied to mental health or substance use disorder benefits and to medical/surgical benefits, including the specific provisions of any forms, checklists, procedure manuals, or other documentation used in designing and applying the nonquantitative treatment limitation or that address the application of the nonquantitative treatment limitation;
(iii) Documentation demonstrating how the factors are comparably applied, as written, to mental health or substance use disorder benefits and medical/surgical benefits in each classification, to determine which benefits are subject to the nonquantitative treatment limitation; and
(iv) An explanation of the reasons for any deviations or variations in the application of a factor used to apply the nonquantitative treatment limitation, or the application of the nonquantitative treatment limitation, to mental health or substance use disorder benefits as compared to medical/surgical benefits, and how the plan or issuer establishes such deviations or variations, including:
(A) In the definition of the factors, the evidentiary standards used to define the factors, and the sources from which the evidentiary standards were derived;
(B) In the design of the factors or evidentiary standards; or
(C) In the application or design of the nonquantitative treatment limitation.
(5)
(i) A comprehensive explanation of how the plan or issuer evaluates whether, in operation, the processes, strategies, evidentiary standards, or other factors used in designing and applying the nonquantitative treatment limitation to mental health or substance use disorder benefits in a classification are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in designing and applying the nonquantitative treatment limitation with respect to medical/surgical benefits, including:
(A) An explanation of any methodology and underlying data used to demonstrate the application of the nonquantitative treatment limitation, in operation;
(B) The sample period, inputs used in any calculations, definitions of terms used, and any criteria used to select the mental health or substance use disorder benefits and medical/surgical benefits to which the nonquantitative treatment limitation is applicable;
(C) With respect to a nonquantitative treatment limitation for which relevant data is temporarily unavailable as described in § 2590.712(c)(4)(iii)(A)(
(D) With respect to a nonquantitative treatment limitation for which no data exist that can reasonably assess any relevant impact of the nonquantitative treatment limitation on relevant outcomes related to access to mental health and substance use disorder benefits and medical/surgical benefits as described in § 2590.712(c)(4)(iii)(A)(
(ii) Identification of the relevant data collected and evaluated, as required under § 2590.712(c)(4)(iii)(A);
(iii) Documentation of the outcomes that resulted from the application of the nonquantitative treatment limitation to mental health or substance use disorder benefits and medical/surgical benefits, including:
(A) The evaluation of relevant data as required under § 2590.712(c)(4)(iii)(A); and
(B) A reasoned justification and analysis that explains why the plan or issuer concluded that any differences in the relevant data do or do not suggest the nonquantitative treatment limitation contributes to material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits, in accordance with § 2590.712(c)(4)(iii)(B)(
(iv) A detailed explanation of any material differences in access demonstrated by the outcomes evaluated under paragraph (c)(5)(iii) of this section, including:
(A) A reasoned explanation of any material differences in access that are not attributable to differences in the comparability or relative stringency of the nonquantitative treatment limitation as applied to mental health or substance use disorder benefits and medical/surgical benefits (including any considerations beyond a plan's or issuer's control that contribute to the existence of material differences) and a detailed explanation of the bases for concluding that material differences are not attributable to differences in the comparability or relative stringency of the nonquantitative treatment limitation; and
(B) To the extent differences in access to mental health or substance use disorder benefits are attributable to generally recognized independent professional medical or clinical standards or carefully circumscribed measures reasonably and appropriately designed to detect or prevent and prove fraud and abuse that minimize the negative impact on access to appropriate mental health and substance use disorder benefits, and such standards or measures are used as the basis for a factor or evidentiary standard used to design or apply a nonquantitative treatment limitation, documentation explaining how any such differences are attributable to those standards or measures, as required in § 2590.712(c)(4)(iii)(B)(
(v) A discussion of the actions that have been or are being taken by the plan or issuer to address any material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits, including the actions the plan or issuer has taken or is taking under § 2590.712(c)(4)(iii)(B)(
(A) A reasoned explanation of any material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits that persist despite reasonable actions that have been or are being taken; and
(B) For a plan or issuer designing and applying one or more nonquantitative treatment limitations related to network composition, a discussion of the actions that have been or are being taken to address material differences in access to in-network mental health and substance use disorder benefits as compared to in-network medical/surgical benefits, including those listed in § 2590.712(c)(4)(iii)(C).
(6)
(i) Any findings or conclusions indicating that the plan or coverage is or is not (or might or might not be) in compliance with the requirements of § 2590.712(c)(4), including any additional actions the plan or issuer has taken or intends to take to address any potential areas of concern or noncompliance;
(ii) A reasoned and detailed discussion of the findings and conclusions described in paragraph (c)(6)(i) of this section;
(iii) Citations to any additional specific information not otherwise included in the comparative analysis that supports the findings and conclusions described in paragraph (c)(6)(i) of this section not otherwise discussed in the comparative analysis;
(iv) The date the analysis is completed and the title and credentials of all relevant persons who participated
(v) If the comparative analysis relies upon an evaluation by a reviewer or consultant considered by the plan or issuer to be an expert, an assessment of each expert's qualifications and the extent to which the plan or issuer ultimately relied upon each expert's evaluation in performing and documenting the comparative analysis of the design and application of the nonquantitative treatment limitation applicable to both mental health or substance use disorder benefits and medical/surgical benefits; and
(vi) A certification by one or more named fiduciaries that they have engaged in a prudent process to select one or more qualified service providers to perform and document a comparative analysis in connection with the imposition of any nonquantitative treatment limitations that apply to mental health and substance use disorder benefits under the plan in accordance with applicable law and regulations, and have satisfied their duty to monitor those service providers as required under part 4 of ERISA with respect to the performance and documentation of such comparative analysis.
(d)
(2)
(3)
(4)
(ii)
(A) The following statement prominently displayed on the first page, in no less than 14-point font: “Attention! The Department of Labor has determined that [insert the name of group health plan or health insurance issuer] is not in compliance with the Mental Health Parity and Addiction Equity Act.”;
(B) A summary of changes the plan or issuer has made as part of its corrective action plan specified to the Secretary following the initial determination of noncompliance, including an explanation of any opportunity for a participant or beneficiary to have a claim for benefits submitted or reprocessed;
(C) A summary of the Secretary's final determination that the plan or issuer is not in compliance with § 2590.712(c)(4) or this section, including any provisions or practices identified as being in violation of § 2590.712(c)(4) or this section, additional corrective actions identified by the Secretary in the final determination notice, and information on how participants and beneficiaries can obtain from the plan or issuer a copy of the final determination of noncompliance;
(D) Any additional actions the plan or issuer is taking to come into compliance with § 2590.712(c)(4) or this section, when the plan or issuer will take such actions, and a clear and accurate statement explaining whether the Secretary has concurred with those actions; and
(E) Contact information for questions and complaints, and a statement explaining how participants and beneficiaries can obtain more information about the notice, including:
(
(
(iii)
(A) The format is readily accessible;
(B) The notice is provided in paper form free of charge upon request; and
(C) In a case in which the electronic form is an internet posting, the plan or issuer timely notifies the participant or beneficiary in paper form (such as a postcard) or email, that the documents are available on the internet, provides the internet address, includes the statement required in paragraph (d)(4)(ii)(A) of this section, and notifies the participant or beneficiary that the documents are available in paper form upon request.
(e)
(1) Any applicable State authority;
(2) A participant or beneficiary (including a provider or other person acting as a participant's or beneficiary's authorized representative) who has
(3) Participants and beneficiaries, who may request the comparative analysis at any time under ERISA section 104.
(f)
(g)
(h)
For the reasons set forth in the preamble, the Department of Health and Human Services amends 45 CFR parts 146 and 147 as set forth below:
42 U.S.C. 300gg-1 through 300gg-5, 300gg-11 through 300gg-23, 300gg-91, and 300gg-92.
The revisions and additions read as follows:
(a)
(2)
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(ii)
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(ii)
(A) Medical management standards (such as prior authorization) limiting or excluding benefits based on medical necessity or medical appropriateness, or based on whether the treatment is experimental or investigative;
(B) Formulary design for prescription drugs;
(C) For plans with multiple network tiers (such as preferred providers and participating providers), network tier design;
(D) Standards related to network composition, including but not limited to, standards for provider and facility admission to participate in a network or for continued network participation, including methods for determining reimbursement rates, credentialing standards, and procedures for ensuring the network includes an adequate number of each category of provider and facility to provide services under the plan or coverage;
(E) Plan or issuer methods for determining out-of-network rates, such as allowed amounts; usual, customary, and reasonable charges; or application of other external benchmarks for out-of-network rates;
(F) Refusal to pay for higher-cost therapies until it can be shown that a lower-cost therapy is not effective (also known as fail-first policies or step therapy protocols);
(G) Exclusions based on failure to complete a course of treatment; and
(H) Restrictions based on geographic location, facility type, provider specialty, and other criteria that limit the scope or duration of benefits for services provided under the plan or coverage.
(iii)
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(B) A determination by the Secretary of whether to require cessation of a nonquantitative treatment limitation under this paragraph (c)(4)(v) will be based on an evaluation of the relevant facts and circumstances involved in the specific final determination and the nature of the underlying nonquantitative treatment limitation and will take into account the interest of plan participants and beneficiaries and feedback from the plan or issuer.
(vi)
(A)
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(3)
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(4)
(i) * * *
(1)
(i) This section applies to group health plans and health insurance issuers offering group health insurance coverage on the first day of the first plan year beginning on or after January 1, 2025, except that the requirements of paragraphs (c)(2)(ii)(A), (c)(4)(i)(B), and (c)(4)(iii) of this section apply on the first day of the first plan year beginning on or after January 1, 2026.
(ii) Until the applicability date in paragraph (i)(1)(i) of this section, plans and issuers are required to continue to comply with 45 CFR 146.136, revised as of October 1, 2023.
(j)
(a)
(b)
(c)
(1)
(i) Identification of the nonquantitative treatment limitation,
(ii) Identification of all mental health or substance use disorder benefits and medical/surgical benefits to which the nonquantitative treatment limitation applies, including a list of which benefits are considered mental health or substance use disorder benefits and which benefits are considered medical/surgical benefits; and
(iii) A description of which benefits are included in each classification set forth in § 146.136(c)(2)(ii)(A).
(2)
(i) Identification of every factor considered or relied upon, as well as the evidentiary standards considered or relied upon to design or apply each factor and the sources from which each evidentiary standard was derived, in determining which mental health or substance use disorder benefits and which medical/surgical benefits are subject to the nonquantitative treatment limitation; and
(ii) A definition of each factor, including:
(A) A detailed description of the factor;
(B) A description of each evidentiary standard used to design or apply each factor (and the source of each evidentiary standard) identified under paragraph (c)(2)(i) of this section; and
(C) A description of any steps the plan or issuer has taken to correct, cure, or supplement any information, evidence, sources, or standards that would otherwise have been considered biased or not objective under § 146.136(c)(4)(i)(B)(
(3)
(i) A detailed explanation of how each factor identified and defined in paragraph (c)(2) of this section is used to determine which mental health or substance use disorder benefits and which medical/surgical benefits are subject to the nonquantitative treatment limitation;
(ii) An explanation of the evidentiary standards or other information or sources (if any) considered or relied upon in designing or applying the factors or relied upon in designing and applying the nonquantitative treatment limitation, including in the determination of whether and how mental health or substance use disorder benefits or medical/surgical benefits are subject to the nonquantitative treatment limitation;
(iii) If the application of the factor depends on specific decisions made in the administration of benefits, the nature of the decisions, the timing of the decisions, and the professional designations and qualifications of each decision maker;
(iv) If more than one factor is identified and defined in paragraph (c)(2) of this section, an explanation of:
(A) How all of the factors relate to each other;
(B) The order in which all the factors are applied, including when they are applied;
(C) Whether and how any factors are given more weight than others; and
(D) The reasons for the ordering or weighting of the factors; and
(v) Any deviations or variations from a factor, its applicability, or its definition (including the evidentiary standards used to define the factor and the information or sources from which each evidentiary standard was derived), such as how the factor is used differently to apply the nonquantitative treatment limitation to mental health or substance use disorder benefits as compared to medical/surgical benefits, and a description of how the plan or issuer establishes such deviations or variations.
(4)
(i) Documentation of each factor identified and defined in paragraph (c)(2) of this section that was applied to determine whether the nonquantitative treatment limitation applies to mental health or substance use disorder benefits and medical/surgical benefits in a classification, including, as relevant:
(A) Quantitative data, calculations, or other analyses showing whether, in each classification in which the nonquantitative treatment limitation applies, mental health or substance use disorder benefits and medical/surgical benefits met or did not meet any applicable threshold identified in the relevant evidentiary standard to determine that the nonquantitative treatment limitation would or would not apply; and
(B) Records maintained by the plan or issuer documenting the consideration and application of all factors and evidentiary standards, as well as the results of their application;
(ii) In each classification in which the nonquantitative treatment limitation applies to mental health or substance use disorder benefits, a comparison of how the nonquantitative treatment limitation, as written, is designed and applied to mental health or substance use disorder benefits and to medical/surgical benefits, including the specific provisions of any forms, checklists, procedure manuals, or other documentation used in designing and applying the nonquantitative treatment limitation or that address the application of the nonquantitative treatment limitation;
(iii) Documentation demonstrating how the factors are comparably applied, as written, to mental health or substance use disorder benefits and medical/surgical benefits in each classification, to determine which benefits are subject to the nonquantitative treatment limitation; and
(iv) An explanation of the reasons for any deviations or variations in the application of a factor used to apply the nonquantitative treatment limitation, or the application of the nonquantitative treatment limitation, to mental health or substance use disorder benefits as compared to medical/surgical benefits,
(A) In the definition of the factors, the evidentiary standards used to define the factors, and the sources from which the evidentiary standards were derived;
(B) In the design of the factors or evidentiary standards; or
(C) In the application or design of the nonquantitative treatment limitation.
(5)
(i) A comprehensive explanation of how the plan or issuer evaluates whether, in operation, the processes, strategies, evidentiary standards, or other factors used in designing and applying the nonquantitative treatment limitation to mental health or substance use disorder benefits in a classification are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in designing and applying the nonquantitative treatment limitation with respect to medical/surgical benefits, including:
(A) An explanation of any methodology and underlying data used to demonstrate the application of the nonquantitative treatment limitation, in operation;
(B) The sample period, inputs used in any calculations, definitions of terms used, and any criteria used to select the mental health or substance use disorder benefits and medical/surgical benefits to which the nonquantitative treatment limitation is applicable;
(C) With respect to a nonquantitative treatment limitation for which relevant data is temporarily unavailable as described in § 146.136(c)(4)(iii)(A)(
(D) With respect to a nonquantitative treatment limitation for which no data exist that can reasonably assess any relevant impact of the nonquantitative treatment limitation on relevant outcomes related to access to mental health and substance use disorder benefits and medical/surgical benefits as described in § 146.136(c)(4)(iii)(A)(
(ii) Identification of the relevant data collected and evaluated, as required under § 146.136(c)(4)(iii)(A);
(iii) Documentation of the outcomes that resulted from the application of the nonquantitative treatment limitation to mental health or substance use disorder benefits and medical/surgical benefits, including:
(A) The evaluation of relevant data as required under § 146.136(c)(4)(iii)(A); and
(B) A reasoned justification and analysis that explains why the plan or issuer concluded that any differences in the relevant data do or do not suggest the nonquantitative treatment limitation contributes to material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits, in accordance with § 146.136(c)(4)(iii)(B)(
(iv) A detailed explanation of any material differences in access demonstrated by the outcomes evaluated under paragraph (c)(5)(iii) of this section, including:
(A) A reasoned explanation of any material differences in access that are not attributable to differences in the comparability or relative stringency of the nonquantitative treatment limitation as applied to mental health or substance use disorder benefits and medical/surgical benefits (including any considerations beyond a plan's or issuer's control that contribute to the existence of material differences) and a detailed explanation of the bases for concluding that material differences are not attributable to differences in the comparability or relative stringency of the nonquantitative treatment limitation; and
(B) To the extent differences in access to mental health or substance use disorder benefits are attributable to generally recognized independent professional medical or clinical standards or carefully circumscribed measures reasonably and appropriately designed to detect or prevent and prove fraud and abuse that minimize the negative impact on access to appropriate mental health and substance use disorder benefits, and such standards or measures are used as the basis for a factor or evidentiary standard used to design or apply a nonquantitative treatment limitation, documentation explaining how any such differences are attributable to those standards or measures, as required in § 146.136(c)(4)(iii)(B)(
(v) A discussion of the actions that have been or are being taken by the plan or issuer to address any material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits, including the actions the plan or issuer has taken or is taking under § 146.136(c)(4)(iii)(B)(
(A) A reasoned explanation of any material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits that persist despite reasonable actions that have been or are being taken; and
(B) For a plan or issuer designing and applying one or more nonquantitative treatment limitations related to network composition, a discussion of the actions that have been or are being taken to address material differences in access to in-network mental health and substance use disorder benefits as compared to in-network medical/surgical benefits, including those listed in § 146.136(c)(4)(iii)(C).
(6)
(i) Any findings or conclusions indicating that the plan or coverage is or is not (or might or might not be) in compliance with the requirements of § 146.136(c)(4), including any additional actions the plan or issuer has taken or intends to take to address any potential areas of concern or noncompliance;
(ii) A reasoned and detailed discussion of the findings and conclusions described in paragraph (c)(6)(i) of this section;
(iii) Citations to any additional specific information not otherwise included in the comparative analysis that supports the findings and conclusions described in paragraph (c)(6)(i) of this section not otherwise discussed in the comparative analysis;
(iv) The date the analysis is completed and the title and credentials of all relevant persons who participated in the performance and documentation of the comparative analysis; and
(v) If the comparative analysis relies upon an evaluation by a reviewer or consultant considered by the plan or issuer to be an expert, an assessment of each expert's qualifications and the extent to which the plan or issuer ultimately relied upon each expert's evaluation in performing and documenting the comparative analysis of the design and application of the nonquantitative treatment limitation applicable to both mental health or substance use disorder benefits and medical/surgical benefits.
(d)
(2)
(3)
(4)
(ii)
(A) The following statement prominently displayed on the first page, in no less than 14-point font: “Attention! The Department of Health and Human Services has determined that [insert the name of group health plan or health insurance issuer] is not in compliance with the Mental Health Parity and Addiction Equity Act.”;
(B) A summary of changes the plan or issuer has made as part of its corrective action plan specified to the Secretary following the initial determination of noncompliance, including an explanation of any opportunity for a participant or beneficiary to have a claim for benefits submitted or reprocessed;
(C) A summary of the Secretary's final determination that the plan or issuer is not in compliance with § 146.136(c)(4) or this section, including any provisions or practices identified as being in violation of § 146.136(c)(4) or this section, additional corrective actions identified by the Secretary in the final determination notice, and information on how participants and beneficiaries can obtain from the plan or issuer a copy of the final determination of noncompliance;
(D) Any additional actions the plan or issuer is taking to come into compliance with § 146.136(c)(4) or this section, when the plan or issuer will take such actions, and a clear and accurate statement explaining whether the Secretary has concurred with those actions; and
(E) Contact information for questions and complaints, and a statement explaining how participants and beneficiaries can obtain more information about the notice, including:
(
(
(iii)
(A) The format is readily accessible;
(B) The notice is provided in paper form free of charge upon request; and
(C) In a case in which the electronic form is an internet posting, the plan or issuer timely notifies the participant or beneficiary in paper form (such as a postcard) or email, that the documents are available on the internet, provides the internet address, includes the statement required in paragraph (d)(4)(ii)(A) of this section, and notifies the participant or beneficiary that the documents are available in paper form upon request.
(e)
(1) Any applicable State authority; and
(2) A participant or beneficiary (including a provider or other person acting as a participant's or beneficiary's authorized representative) who has received an adverse benefit
(f)
(g)
(h)
The revisions and additions read as follows:
(a) * * *
(2)
(3)
(5)
(ii)
(7) * * *
(i) Subject to paragraph (a)(7)(ii) of this section, the purchase of stop-loss or excess risk coverage by a self-funded non-Federal governmental plan does not prevent an election under this section.
(f) * * *
(1)
(4) * * *
(iii) In the case of a plan that is subject to multiple collective bargaining agreements of varying lengths and that has an election with respect to the requirements described in paragraph (a)(1)(v) of this section in effect as of December 29, 2022, that expires on or after June 27, 2023, the plan may extend such election until the date on which the term of the last such agreement expires.
42 U.S.C. 300gg through 300gg-63, 300gg-91, 300gg-92, and 300gg-111 through 300gg-139, as amended, and section 3203, Pub. L. 116-136, 134 Stat. 281.
(a)
(b)