[Federal Register Volume 86, Number 131 (Tuesday, July 13, 2021)]
[Rules and Regulations]
[Pages 36872-36985]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-14379]



  Federal Register / Vol. 86 , No. 131 / Tuesday, July 13, 2021 / Rules 
and Regulations  

[[Page 36872]]


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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 890

RIN 3206-AO30

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

[TD9951]
RIN 1545-BQ04

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2590

RIN 1210-AB99

DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Parts 144, 147, 149, and 156

[CMS-9909-IFC]
RIN 0938-AU63


Requirements Related to Surprise Billing; Part I

AGENCY: Office of Personnel Management; 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.

ACTION: Interim final rules with request for comments.

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SUMMARY: This document sets forth interim final rules implementing 
certain provisions of the No Surprises Act, which was enacted as part 
of the Consolidated Appropriations Act, 2021. These interim final rules 
amend and add provisions to existing rules under the Internal Revenue 
Code, the Employee Retirement Income Security Act, the Public Health 
Service Act, and the Federal Employees Health Benefits Act. These 
interim final rules implement provisions of the No Surprises Act that 
protect participants, beneficiaries, and enrollees in group health 
plans and group and individual health insurance coverage from surprise 
medical bills when they receive emergency services, non-emergency 
services from nonparticipating providers at participating facilities, 
and air ambulance services from nonparticipating providers of air 
ambulance services, under certain circumstances. In this rulemaking, 
the Department of Health and Human Services (HHS), the Department of 
Labor (DOL), and the Department of the Treasury (collectively, the 
Departments) are issuing interim final rules with largely parallel 
provisions that apply to group health plans and health insurance 
issuers offering group or individual health insurance coverage. HHS is 
also issuing in this rulemaking additional interim final rules that 
apply to emergency departments of hospitals and independent 
freestanding emergency departments, health care providers and 
facilities, and providers of air ambulance services related to the 
protections against surprise billing. The Office of Personnel 
Management (OPM) is issuing in this rulemaking interim final rules that 
specify how certain provisions of the No Surprises Act apply to health 
benefits plans offered by carriers under the Federal Employees Health 
Benefits Act (FEHBA).

DATES: Effective date: These regulations are effective on September 13, 
2021.
    Applicability date: The regulations are generally applicable for 
plan years (in the individual market, policy years) beginning on or 
after January 1, 2022. The HHS-only regulations that apply to health 
care providers, facilities, and providers of air ambulance services are 
applicable beginning on January 1, 2022. The OPM-only regulations that 
apply to health benefits plans are applicable to contract years 
beginning on or after January 1, 2022.
    Comment date: To be assured consideration, comments must be 
received at one of the addresses provided below, no later than 5 p.m. 
on September 7, 2021.

ADDRESSES: Written comments may be submitted to the addresses specified 
below. Any comment that is submitted will be shared among the 
Departments and OPM. Please do not submit duplicates.
    Comments will be made available to the public. Warning: Do not 
include any personally identifiable information (such as name, address, 
or other contact information) or confidential business information that 
you do not want publicly disclosed. Comments are posted on the internet 
exactly as received and can be retrieved by most internet search 
engines. No deletions, modifications, or redactions will be made to the 
comments received, as they are public records. Comments may be 
submitted anonymously.
    In commenting, refer to file code CMS-9909-IFC. Because of staff 
and resource limitations, we cannot accept comments by facsimile (FAX) 
transmission.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (please choose only one of the ways 
listed):
    1. Electronically. You may submit electronic comments on this 
regulation at https://www.regulations.gov by entering the file code in 
the search window and then clicking on ``Comment''.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-9909-IFC, P.O. Box 8016, 
Baltimore, MD 21244-8016.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-9909-IFC, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Padma Babubhai Shah, Office of 
Personnel Management, at 202-606-4056; Kari DiCecco, Internal Revenue 
Service, Department of the Treasury, at 202-317-5500; Matt Litton or 
David Sydlik, Employee Benefits Security Administration, Department of 
Labor, at 202-693-8335; Lindsey Murtagh, Centers for Medicare & 
Medicaid Services, Department of Health and Human Services, at 301-492-
4106. Customer Service Information: Information from OPM on health 
benefits plans offered under the Federal Employees Health Benefits 
(FEHB) Program can be found on the OPM website (www.opm.gov/healthcare-insurance/healthcare/). Individuals interested in obtaining information 
from the DOL concerning employment-based health coverage laws may call 
the Employee Benefits Security Administration (EBSA) Toll-Free Hotline 
at 1-866-444-EBSA (3272) or visit the DOL's website (www.dol.gov/ebsa). 
In addition, information from HHS on private health insurance coverage 
and coverage provided by non-federal governmental group health plans 
can be found on the Centers for Medicare & Medicaid Services (CMS) 
website (www.cms.gov/cciio), and information on health care reform can 
be found at www.HealthCare.gov.

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SUPPLEMENTARY INFORMATION: Inspection of Public Comments: Comments 
received before the close of the comment period are available for 
viewing by the public, including any personally identifiable or 
confidential business information that is included in a comment. We 
post comments received before the close of the comment period on the 
following website as soon as possible after they have been received: 
https://regulations.gov. Follow the search instructions on that website 
to view public comments.

I. Background

A. Patient Protections and Requirements Related to Emergency Services 
Under Section 2719A of the Public Health Service Act

    The Patient Protection and Affordable Care Act (Pub. L. 111-148), 
was enacted on March 23, 2010 and the Health Care and Education 
Reconciliation Act of 2010, Public Law 111-152, was enacted on March 
30, 2010 (these statutes are collectively known as the ``Affordable 
Care Act'' or ``ACA''). The Affordable Care Act reorganizes, amends, 
and adds to the provisions of part A of title XXVII of the Public 
Health Service Act (PHS Act) relating to group health plans and health 
insurance issuers in the group and individual markets.\1\ The 
Affordable Care Act adds section 715(a)(1) to the Employee Retirement 
Income Security Act (ERISA) and section 9815(a)(1) to the Internal 
Revenue Code (the Code) to incorporate the provisions of part A of 
title XXVII of the PHS Act into ERISA and the Code, and make them 
applicable to group health plans and health insurance issuers providing 
health insurance coverage in connection with group health plans. 
Sections 2701 through 2728 of the PHS Act are incorporated into ERISA 
and the Code.
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    \1\ The term ``group health plan'' includes both insured and 
self-insured group health plans.
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    Under section 2719A of the PHS Act, as added by the Affordable Care 
Act and incorporated into ERISA and the Code, if a non-grandfathered 
group health plan or health insurance issuer offering non-grandfathered 
group or individual health insurance coverage provides any benefits 
with respect to emergency services in an emergency department of a 
hospital, the plan or issuer must cover emergency services without the 
individual or the health care provider having to obtain prior 
authorization (including when the emergency services are provided out-
of-network) and without regard to whether the health care provider 
furnishing the emergency services is an in-network provider with 
respect to the services. The emergency services must be provided 
without regard to any other term or condition of the plan or health 
insurance coverage other than the exclusion or coordination of 
benefits, an affiliation or waiting period permitted under the Code, 
ERISA, and the PHS Act, or applicable cost-sharing requirements. For a 
plan or health insurance coverage with a network of providers that 
provides benefits for emergency services, the plan or issuer may not 
impose any administrative requirement or limitation on benefits for 
out-of-network emergency services that is more restrictive than the 
requirements or limitations that apply to in-network emergency 
services. In addition, carriers offering FEHB plans must comply with 
requirements described in section 2719A of the PHS Act in the same 
manner as they apply to a plan or issuer.
    For purposes of the requirements under section 2719A of the PHS 
Act, emergency services mean, with respect to an emergency medical 
condition, (1) a medical screening examination (as required under 
section 1867 of the Social Security Act) that is within the capability 
of the emergency department of a hospital, including ancillary services 
routinely available to the emergency department to evaluate such 
emergency medical condition, and (2) that is within the capabilities of 
the staff and facilities available at the hospital, such further 
medical examination and treatment as are required under section 1867 of 
the Social Security Act to stabilize the patient.
    Regulations implementing section 2719A of the PHS Act include these 
consumer protections.\2\ Section 2719A of the PHS Act did not prohibit 
balance billing. Balance billing refers to the practice of out-of-
network providers billing patients for the difference between (1) the 
provider's billed charges, and (2) the amount collected from the plan 
or issuer plus the amount collected from the patient in the form of 
cost sharing (such as a copayment, coinsurance, or amounts paid toward 
a deductible). To avoid the circumvention of the protections of section 
2719A of the PHS Act, in the implementing regulations, the Departments 
determined it was necessary that a reasonable amount be paid by a plan 
or issuer before a patient becomes responsible for a balance billing 
amount.\3\ Therefore, under the Departments' final regulations 
published in the Federal Register on November 18, 2015 (Patient 
Protections Final Rule), a plan or issuer satisfies the out-of-network 
emergency care cost-sharing limitations in the statute if it provides 
benefits for out-of-network emergency services in an amount at least 
equal to the greatest of the following three amounts (adjusted for in-
network cost sharing): (1) The median amount negotiated with in-network 
providers for the emergency service; (2) the amount for the emergency 
service calculated using the same method the plan generally uses to 
determine payments for out-of-network services (such as the usual, 
customary, and reasonable (UCR) amount); or (3) the amount that would 
be paid under Medicare Part A or Part B for the emergency service 
(collectively, minimum payment standards).\4\ The Departments' 
regulations clarify that the cost-sharing requirements create a minimum 
payment requirement for the plan or issuer.\5\ The Departments also 
clarified that the cost-sharing requirements do not prohibit a group 
health plan or health insurance issuer from providing benefits with 
respect to an emergency service that are greater than the amounts 
specified in the regulations. However, those regulations address 
balance billing with respect to only emergency services and, even in 
that context, they serve only to minimize the amount of a balance bill 
by requiring that plans and issuers must pay a reasonable amount for 
emergency services before a patient becomes responsible for a balance 
billing amount. Prior to the enactment of the No Surprises Act, these 
minimum payment standards were the only federal consumer protections to 
reduce potential amounts of balance billing for individuals enrolled in 
group health plans and group and individual health insurance coverage.
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    \2\ 26 CFR 54.9815-2719A(b); 29 CFR 2590.715-2719A(b); 45 CFR 
147.138(b).
    \3\ 75 FR 37188, 37194 (June 28, 2010); see also 80 FR 72192 
(Nov. 18, 2015). Additional clarification of these rules was also 
provided in 2018. See 83 FR 19431 (May 3, 2018).
    \4\ 26 CFR 54.9815-2719A(b)(3); 29 CFR 2590.715-2719A(b)(3); 45 
CFR 147.138(b)(3).
    \5\ If state law prohibits balance billing, or in cases in which 
a group health plan or health insurance issuer is contractually 
responsible for balance billing amounts, plans and issuers are not 
required to satisfy the minimum payment standards set forth in the 
regulations, but may not impose any copayment or coinsurance 
requirement for out-of-network emergency services that is higher 
than the copayment or coinsurance requirement that would apply if 
the services were provided in-network. See 26 CFR 54.9815-
2719A(b)(3)(iii); 29 CFR 2590.715-2719A(b)(3)(iii); 45 CFR 
147.138(b)(3)(iii); FAQs about Affordable Care Act Implementation 
(Part I), Q15 (Sept. 20, 2010), available at https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/aca-implementation-faqs; www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs.html.

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    The No Surprises Act added section 9816 of the Code, section 716 of 
ERISA, and section 2799A-1 of the PHS Act, which expand the patient 
protections related to emergency services under section 2719A of the 
PHS Act, in part, by providing additional consumer protections related 
to balance billing.\6\ The No Surprises Act amended section 2719A of 
the PHS Act to include a sunset provision effective for plan years 
beginning on or after January 1, 2022, when the new protections under 
the No Surprises Act take effect.
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    \6\ These new protections apply regardless of whether the plan 
or coverage is a grandfathered health plan under section 1251 of the 
Affordable Care Act. The No Surprises Act also amended 5 U.S.C. 
8902(p) to ensure that covered individuals enrolled in FEHB plans 
receive these protections.
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    Additionally, the No Surprises Act recodified the patient 
protections regarding choice of health care professional from section 
2719A(a), (c), and (d) of the PHS Act at new section 9822 of the Code, 
section 722 of ERISA, and section 2799A-7 of the PHS Act. If a plan or 
issuer requires or provides for designation by a participant, 
beneficiary, or enrollee of a participating primary care provider, 
these provisions permit individuals to designate any participating 
primary care providers available to accept them, including 
pediatricians, and prohibit the plan or issuer from requiring 
authorization or referral for obstetrical or gynecological care.

B. Surprise Billing and the Need for Greater Consumer Protections

    Most group health plans, and health insurance issuers offering 
group or individual health insurance coverage, have a network of 
providers and health care facilities (participating providers or 
preferred providers) who agree by contract to accept a specific amount 
for their services.\7\ By contrast, providers and facilities that are 
not part of a plan or issuer's network (nonparticipating providers) 
usually charge higher amounts than the contracted rates that plans and 
issuers have negotiated with participating providers and facilities. 
When a participant, beneficiary, or enrollee receives care from a 
nonparticipating provider, the individual's plan or issuer may decline 
to pay for the service or may pay an amount that is lower than the 
provider's billed charges, and may subject the individual to greater 
cost-sharing requirements than would have been charged had the services 
been furnished by a participating provider. Prior to the No Surprises 
Act, the nonparticipating provider could generally balance bill the 
individual for the difference between the provider's billed charges and 
the sum of the amount paid by the plan or issuer and the cost sharing 
paid by the individual, unless otherwise prohibited by state law.
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    \7\ These interim final rules refer to providers both in terms 
of their participation (participating provider) and in terms of a 
network (in-network provider). In both situations, the intent is to 
refer to a provider that has a contractual relationship or other 
arrangement with a plan or issuer to provide health care items and 
services for participants, beneficiaries, and enrollees of the plan 
or issuer.
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    A balance bill may come as a surprise for the individual. A 
surprise medical bill is an unexpected bill from a health care provider 
or facility that occurs when a covered person receives medical services 
from a provider or facility that, usually unknown to the participant, 
beneficiary, or enrollee, is a nonparticipating provider or facility 
with respect to the individual's coverage. Surprise billing occurs both 
for emergency and non-emergency care. In an emergency, a person usually 
goes (or is taken by emergency transport) to a nearby emergency 
department. Even if they go to a participating hospital or facility for 
emergency care, they may receive care from nonparticipating providers 
working at that facility. For non-emergency care, a person may choose a 
participating facility (and possibly even a participating provider), 
but not know that at least one provider involved in their care (for 
example, an anesthesiologist or radiologist) is a nonparticipating 
provider. In either circumstance, the person might not be in a position 
to choose the provider, or to ensure that the provider is a 
participating provider. Therefore, in addition to a bill for their 
cost-sharing amount, which tends to be higher for out-of-network 
services, the person might receive a balance bill from the 
nonparticipating provider or facility. This scenario also plays out 
frequently for air ambulance services, where individuals generally do 
not have the ability to select a provider of air ambulance services, 
and, therefore, have little or no control over whether the provider is 
in-network with their plan or coverage.
    When individuals are unable to avoid nonparticipating providers, it 
raises health care costs and exposes patients to financial risk.\8\ The 
evidence suggests that the ability to balance bill is used as leverage 
by some providers to obtain higher in-network payments, which results 
in higher premiums, higher cost sharing for individuals, and increased 
health care expenditures overall.\9\ Studies have shown that surprise 
bills can be large. For example, a recent study found that physicians 
collected, on average, 65 percent of the total charged amount for 
emergency department visits that likely included surprise bills, 
compared to 52 percent of the total charged amount for emergency 
department visits that likely did not include surprise bills. The study 
also found that nine percent of the individuals who likely received 
surprise bills paid physicians an amount more than $400, which may 
cause financial hardship to many individuals.\10\ In addition, out-of-
network cost sharing and payments for surprise bills usually do not 
count towards an individual's deductible and maximum out-of-pocket 
expenditure limits. Therefore, individuals with surprise bills may have 
difficulty reaching those limits, even after a significant health care 
event.
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    \8\ Cooper Z et al., Out-of-Network Billing and Negotiated 
Payments for Hospital-Based Physicians, Health Affairs 39, No. 1, 
2020. doi: 10.1377/hlthaff.2019.00507.
    \9\ See Cooper, Z. et al., Surprise! Out-Of-Network Billing For 
Emergency Care in the United States, NBER Working Paper 23623, 
20173623; Duffy, E. et al., Policies to Address Surprise Billing Can 
Affect Health Insurance Premiums. The American Journal of Managed 
Care 26.9 (2020): 401-404.; and Brown E.C.F., et al., The Unfinished 
Business of Air Ambulance Bills, Health Affairs Blog (March 26, 
2021), DOI: 10.1377/hblog20210323.911379, available at https://www.healthaffairs.org/do/10.1377/hblog20210323.911379/full/.
    \10\ Biener, A. et al., Emergency Physicians Recover a Higher 
Share of Charges From Out-Of-Network Care Than From In-Network Care, 
Health Affairs 40, No, 4 (2021): 622-628.
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    Another study using claims data from a large commercial issuer for 
the period 2010-2016 found that over 39 percent of emergency department 
visits to in-network hospitals resulted in an out-of-network bill, and 
the incidence increased from 32.3 percent in 2010 to 42.8 percent in 
2016. The average potential amount of surprise medical bills also 
increased from $220 in 2010 to $628 in 2016. During the same period, 37 
percent of inpatient admissions to in-network hospitals resulted in at 
least one out-of-network bill, increasing from 26.3 percent in 2010 to 
42 percent in 2016, and the average potential surprise medical bill 
increased from $804 to $2,040.\11\
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    \11\ Sun EC, Mello MM, Moshfegh J, Baker LC, Assessment of Out-
of-Network Billing for Privately Insured Patients Receiving Care in 
In-Network Hospitals. JAMA Intern Med. 2019; 179(11):1543-1550 
(2019). doi:10.1001/jamainternmed.2019.3451.
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    Although some states have enacted laws to reduce or eliminate 
balance billing, these efforts have created a patchwork of consumer 
protections. Even within a state that has enacted such protections, 
those protections typically apply only to individuals enrolled in 
individual and group health insurance coverage, as ERISA generally

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preempts state laws that regulate self-insured group health plans 
sponsored by private employers. In addition, states are limited in 
their ability to address surprise bills that involve an out-of-state 
provider.
    Surprise medical bills can lead to medical debt for individuals who 
have difficulty paying their bills. The impact is most keenly felt by 
those communities experiencing poverty and other social risk factors, 
as surprise medical bills and medical debt can negatively affect 
individuals' abilities to eliminate debt and create wealth, and 
ultimately can affect a family for generations.\12\ A recent survey 
reported that while 68 percent of respondents said that it was 
difficult to pay a surprise bill, the likelihood of such difficulty was 
higher for middle income respondents (77 percent) and African Americans 
(74 percent). In addition, while 11 percent of survey respondents were 
unable to pay the surprise bill, 21 percent of low income respondents, 
19 percent of African Americans, and 17 percent of respondents in rural 
areas were unable to do so.\13\ In addition, individuals are often 
confused by medical bills. A 2016 survey found that 61 percent of 
individuals are confused by medical bills, and for 49 percent of 
individuals surveyed, the amount owed was a surprise.\14\ These 
challenges are exacerbated for underserved communities, which are more 
likely to experience poor communication, underlying mistrust of the 
medical system, and lower levels of patient engagement than other 
populations.\15\ Effective, culturally, and linguistically tailored 
communication at appropriate literacy levels, coupled with policies 
that address the social risk factors and other barriers underserved 
communities face to accessing, trusting, and understanding health care 
costs and coverage, can reduce disparities and promote health 
equity.\16\
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    \12\ Taylor, J. Racism, inequality, and health care for African 
Americans. The Century Foundation: Report (December 19, 2019). 
https://tcf.org/content/report/racism-inequality-health-care-african-americans/; Chavis, B. Op-Ed: Big insurance must help end 
surprise medical billing. blackpressUSA (February 24, 2020).
    \13\ Families USA, Surprise Medical Bills, Results from a 
National Survey, November 2019. https://familiesusa.org/wp-content/uploads/2019/11/Surprise-Billing-National-Poll-Report-FINAL.pdf.
    \14\ Gooch, Kelly. 61% of patients confused by medical bills, 
survey finds. Becker's Hospital Review (July 14, 2016). https://www.beckershospitalreview.com/finance/61-of-patients-confused-by-medical-bills-survey-finds.html.
    \15\ See Butler S, Sherriff N. How poor communication 
exacerbates health inequities and what to do about it. Brookings 
Institution: Report (February 22, 2021). https://www.brookings.edu/research/how-poor-communication-exacerbates-health-inequities-and-what-to-do-about-it/; Hamel, L., Lopes, L., Mu[ntilde]ana, C., 
Artiga, S., Brodie, M. Race, Health, and COVID-19: The Views and 
Experiences of Black Americans. Kaiser Family Foundation (October 
2020). https://files.kff.org/attachment/Report-Race-Health-and-COVID-19-The-Views-and-Experiences-of-Black-Americans.pdf; Shen 
M.J., Peterson E.B., Costas-Mu[ntilde]iz R. et al. The Effects of 
Race and Racial Concordance on Patient-Physician Communication: A 
Systematic Review of the Literature. J. Racial and Ethnic Health 
Disparities 5, 117-140 (2018). https://doi.org/10.1007/s40615-017-0350-4.
    \16\ P[eacute]rez-Stable EJ, El-Toukhy S. Communicating with 
diverse patients: How patient and clinician factors affect 
disparities. Patient Educ Couns. 2018;101(12):2186-2194. 
doi:10.1016/j.pec.2018.08.021; McNally, M. Confronting disparities 
in access to healthcare for underserved populations. MedCity News 
(February 22, 2021). https://medcitynews.com/2021/02/confronting-disparities-in-access-to-healthcare-for-underserved-populations-in-2021/.
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    Communication among providers, plans, consumers, communities, and 
consumer advocates must be consistent with and reinforce all relevant 
consumer protections related to surprise bills. Such communication must 
be accessible, linguistically tailored, and at an appropriate literacy 
level. This includes compliance with requirements to provide effective 
communication for individuals with disabilities under the Americans 
with Disabilities Act of 1990,\17\ section 504 of the Rehabilitation 
Act of 1973 \18\ and, where applicable, section 1557 of the Affordable 
Care Act,\19\ as well as compliance with race, color, and national 
origin protections under title VI of the Civil Rights Act of 1964 \20\ 
and section 1557 of the Affordable Care Act. Section 1557 prohibits 
discrimination on the basis of race, color, national origin, sex 
(including sexual orientation and gender identity), age, or disability 
in covered health programs or activities, including requiring covered 
entities to take reasonable steps to ensure meaningful access for 
individuals with limited English proficiency.
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    \17\ 42 U.S.C. 12101 et seq.
    \18\ 29 U.S.C. 794 and 794d.
    \19\ 42 U.S.C. 18116(a).
    \20\ 42 U.S.C. 2000d.
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    On January 20, 2021, President Biden issued Executive Order 13985, 
``On Advancing Racial Equity and Support for Underserved Communities 
Through the Federal Government,'' \21\ directing that as a policy 
matter, the federal government should pursue a comprehensive approach 
to advancing equity for all, including people of color and others who 
have been historically underserved, marginalized, and adversely 
affected by persistent poverty and inequality. Executive Order 13985 
also directs HHS to assess whether, and to what extent, its programs 
and policies perpetuate systemic barriers to opportunities and benefits 
for people of color and other underserved groups. Consistent with 
Executive Order 13985, regulations issued pursuant to the No Surprises 
Act must ensure that communication from plans, issuers, providers, 
facilities, and providers of air ambulance services recognizes these 
inequities and upholds all relevant consumer protections. Regulations 
issued pursuant to the No Surprises Act should ensure that all 
individuals, particularly those from underserved and minority 
communities, trust and believe information they receive related to 
costs and network coverage. Regulations and policies should enable and 
encourage regulated entities to address barriers to accessing care, 
including mistrust of the health care system. They should also 
encourage entities to communicate with individuals in a language they 
can understand, in a respectful way that addresses cultural 
differences, and at an appropriate literacy level. To ensure all 
consumers, particularly those in minority and underserved communities, 
are able to understand and benefit from these consumer protections, 
deliberate attention must be paid to the unique barriers and challenges 
underserved communities face in understanding and accessing health 
care. The Departments seek comment from those who are members of, 
advocate for, and work with underserved communities regarding the 
impact of these interim final rules.
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    \21\ 86 FR 7009 (Jan. 25, 2021).
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C. Preventing Surprise Medical Bills Under the Consolidated 
Appropriations Act, 2021

    On December 27, 2020, the Consolidated Appropriations Act, 2021 
(CAA), which included the No Surprises Act, was signed into law. The No 
Surprises Act provides federal protections against surprise billing and 
limits out-of-network cost sharing under many of the circumstances in 
which surprise bills arise most frequently.\22\
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    \22\ Public Law 116-260.
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    The CAA added provisions that apply to group health plans and 
health insurance issuers in the group and individual market in a new 
Part D of title XXVII of the PHS Act, and also added new provisions to 
part 7 of ERISA, and subchapter B of chapter 100 of the Code. Section 
102 of the No Surprises Act added section 9816 of the Code, section 716 
of ERISA, and section 2799A-1 of the PHS Act, which contain limitations 
on cost sharing, and requirements for initial payments for emergency 
services and for non-emergency services provided by

[[Page 36876]]

nonparticipating providers at certain participating health care 
facilities. Section 103 of the No Surprises Act amended section 9816 of 
the Code, section 716 of ERISA, and section 2799A-1 of the PHS Act to 
establish an independent dispute resolution (IDR) process that allows 
plans and issuers and nonparticipating providers and nonparticipating 
emergency facilities to resolve disputes over out-of-network rates. 
Section 105 of the No Surprises Act added section 9817 of the Code, 
section 717 of ERISA, and section 2799A-2 of the PHS Act, which contain 
limitations on cost sharing and requirements for initial payments to 
nonparticipating providers of air ambulance services, and allow plans 
and issuers and such providers of air ambulance services to access the 
IDR process. The CAA also amended the FEHBA, as discussed in more 
detail in section I.D. of this preamble.
    The CAA provisions that apply to health care providers and 
facilities and providers of air ambulance services, such as cost-
sharing requirements, prohibitions on balance billing for certain items 
and services, and requirements related to disclosures about balance 
billing protections, were added to title XXVII of the PHS Act in a new 
part E.
    The Departments are issuing regulations in several phases 
implementing provisions of title I (No Surprises Act) and title II 
(Transparency) of Division BB of the CAA. Later this year, the 
Departments intend to issue regulations regarding the federal IDR 
process (sections 103 and 105 of Division BB), patient protections 
through transparency and the patient-provider dispute resolution 
process (section 112), and price comparison tools (section 114). The 
Departments also intend to undertake rulemaking this year to propose 
the form and manner in which plans, issuers, and providers of air 
ambulance services would report information regarding air ambulance 
services (section 106). In addition, HHS intends to undertake 
rulemaking to implement requirements on health insurance issuers 
offering individual health insurance coverage or short-term, limited-
duration insurance to disclose and report information regarding direct 
or indirect compensation provided to agents and brokers (section 
202(c)), as well as provisions related to HHS enforcement of 
requirements on issuers, non-federal governmental group health plans, 
providers, facilities, and providers of air ambulance services.
    The CAA also includes provisions regarding transparency in plan and 
insurance identification cards (section 107), continuity of care 
(section 113), accuracy of provider network directories (section 116), 
and prohibition on gag clauses (section 201) that are applicable for 
plan years beginning on or after January 1, 2022; and pharmacy benefit 
and drug cost reporting (section 204) that is required by December 27, 
2021. The Departments intend to undertake rulemaking to fully implement 
these provisions, but rulemaking regarding some of these provisions 
might not occur until after January 1, 2022. The Departments note that 
any such rulemaking to fully implement these provisions will include a 
prospective applicability date that provides plans, issuers, providers, 
and facilities, as applicable, a reasonable amount of time to comply 
with new or clarified requirements. Until rulemaking to fully implement 
these provisions is finalized and effective, plans and issuers are 
expected to implement the requirements using a good faith, reasonable 
interpretation of the statute. The Departments intend to issue guidance 
in the near future regarding their expectations related to good faith 
compliance with these provisions.

D. Preventing Surprise Medical Bills for Federal Employees Health 
Benefits Plans

    The No Surprises Act also amended the FEHBA, 5 U.S.C. 8901 et seq., 
by adding a new subsection (p) to 5 U.S.C. 8902. Under this new 
provision, each FEHB Program contract must require a carrier to comply 
with provisions of sections 9816, 9817, and 9822 of the Code; sections 
716, 717, and 722 of ERISA; and sections 2799A-1, 2799A-2, and 2799A-7 
of the PHS Act (as applicable) in the same manner as they apply with 
respect to a group health plan or health insurance issuer offering 
group or individual health insurance coverage. Likewise, the provisions 
of sections 2799B-1, 2799B-2, 2799B-3, and 2799B-5 of the PHS Act apply 
to health care providers, facilities, and providers of air ambulance 
services with respect to covered individuals in FEHB plans in the same 
manner as they apply to participants, beneficiaries, or enrollees in 
group health plans or coverage offered by health insurance issuers.
    OPM is charged with administering the FEHB Program and maintains 
oversight and enforcement authority with respect to FEHB health 
benefits plans, which are federal governmental plans. Generally, under 
5 U.S.C. 8902(p), each FEHB contract must require a carrier to comply 
with certain PHS Act, ERISA, and Code requirements in the same manner 
as they apply to a group health plan or health insurance issuer.

II. Executive Summary

    These interim final rules implement provisions of the No Surprises 
Act that: (1) Apply to group health plans, health insurance issuers 
offering group or individual health insurance coverage, and carriers in 
the FEHB Program to provide protections against balance billing and 
out-of-network cost sharing with respect to emergency services, non-
emergency services furnished by nonparticipating providers at certain 
participating health care facilities, and air ambulance services 
furnished by nonparticipating providers of air ambulance services; (2) 
prohibit nonparticipating providers, health care facilities, and 
providers of air ambulance services from balance billing participants, 
beneficiaries, and enrollees in certain situations, and permit these 
providers and facilities to balance bill individuals if certain notice 
and consent requirements in the No Surprises Act are satisfied; (3) 
require certain health care facilities and providers to provide 
disclosures of federal and state patient protections against balance 
billing; (4) recodify certain patient protections that initially 
appeared in the ACA and that the No Surprises Act applies to 
grandfathered plans; and (5) set forth complaints processes with 
respect to violations of the protections against balance billing and 
out-of-network cost sharing under the No Surprises Act.
    These interim final rules protect individuals from surprise medical 
bills for emergency services, air ambulance services furnished by 
nonparticipating providers, and non-emergency services furnished by 
nonparticipating providers at participating facilities in certain 
circumstances. Among other requirements, these interim final rules 
require emergency services to be covered without any prior 
authorization, without regard to whether the health care provider 
furnishing the emergency services is a participating provider or a 
participating emergency facility with respect to the services, and 
without regard to any other term or condition of the plan or coverage 
other than the exclusion or coordination of benefits or a permitted 
affiliation or waiting period. Additionally, emergency services include 
certain services in an emergency department of a hospital or an 
independent freestanding emergency department, as well as post-
stabilization services in certain instances.
    With respect to emergency services, air ambulance services 
furnished by nonparticipating providers, and non-

[[Page 36877]]

emergency services furnished by nonparticipating providers at 
participating facilities, these interim final rules limit cost sharing 
for out-of-network services to in-network levels, require such cost 
sharing to count toward any in-network deductibles and out-of-pocket 
maximums, and prohibit balance billing, as required by the No Surprises 
Act.
    These interim final rules specify that cost-sharing amounts for 
such services furnished by nonparticipating emergency facilities and 
nonparticipating providers at participating facilities must be 
calculated based on one of the following amounts: (1) An amount 
determined by an applicable All-Payer Model Agreement under section 
1115A of the Social Security Act; (2) if there is no such applicable 
All-Payer Model Agreement, an amount determined by a specified state 
law; or (3) if there is no such applicable All-Payer Model Agreement or 
specified state law, the lesser of the billed charge or the plan's or 
issuer's median contracted rate, referred to as the qualifying payment 
amount (QPA). Cost-sharing amounts for air ambulance services provided 
by nonparticipating providers must be calculated using the lesser of 
the billed charge or the QPA, and the cost-sharing requirement that 
would apply if such services were provided by a participating provider.
    Under these interim final rules, balance billing for services 
covered by the rules generally is prohibited, and the total amount to 
be paid to the provider or facility, including any cost sharing, is 
based on: (1) An amount determined by an applicable All-Payer Model 
Agreement under section 1115A of the Social Security Act; (2) if there 
is no such applicable All-Payer Model Agreement, an amount determined 
by a specified state law; (3) if there is no such applicable All-Payer 
Model Agreement or specified state law, an amount agreed upon by the 
plan or issuer and the provider or facility; or (4) if none of those 
three conditions apply, an amount determined by an IDR entity.
    In general, under the No Surprises Act and these interim final 
rules, the protections that limit cost sharing and prohibit balance 
billing do not apply to certain post-stabilization services, or to 
certain non-emergency services performed by nonparticipating providers 
at participating health care facilities, if the provider or facility 
provides notice to the participant, beneficiary, or enrollee, and 
obtains the individual's consent to waive the balance billing 
protections. However, providers and facilities may not provide such 
notice or seek consent from individuals in certain circumstances where 
surprise bills are likely to occur, such as for ancillary services 
provided by nonparticipating providers in connection with non-emergency 
care in a participating facility. In such circumstances, balance 
billing is prohibited, and the other protections of the No Surprises 
Act, such as in-network cost-sharing requirements, continue to apply.
    Neither the No Surprises Act, nor these interim final rules, 
universally protect individuals from every high or unexpected medical 
bill. For example, an individual may be enrolled in a group health plan 
or health insurance coverage that provides little or no coverage for 
their particular health care condition or the items and services 
necessary to treat that condition. In addition, balance billing 
continues to be permitted, unless prohibited by state law or contract, 
in circumstances where these interim final rules do not apply, such as 
for non-emergency items or services provided at facilities that are not 
included within the definition of health care facility in these interim 
final rules. Nonetheless, the No Surprises Act and these interim final 
rules provide relief from some of the more common scenarios where a 
participant, beneficiary, or enrollee might otherwise be faced with 
high and unexpected medical costs.
    These interim final rules establish a complaints process for 
receiving and resolving complaints related to these new balance billing 
protections.
    These interim final rules also implement the requirement of the No 
Surprises Act that certain health care providers and facilities make 
publicly available, post on a public website, and provide a one-page 
notice to individuals regarding: (1) The requirements and prohibitions 
applicable to the provider or facility under sections 2799B-1 and 
2799B-2 of the PHS Act and their implementing regulations; (2) any 
applicable state balance billing requirements; and (3) how to contact 
appropriate state and federal agencies if the individual believes the 
provider or facility has violated the requirements described in the 
notice.
    Section 116 of the No Surprises Act also added section 9820(c) of 
the Code, section 720(c) of ERISA, and section 2799A-5(c) of the PHS 
Act, which include similar disclosure requirements applicable to plans 
and issuers. In general, under these provisions, plans and issuers must 
make publicly available, post on a public website of the plan or 
issuer, and include on each explanation of benefits for an item or 
service with respect to which the requirements under section 9816 of 
the Code, section 716 of ERISA, and section 2799A-1 of the PHS Act 
apply, information on the requirements applied under these 
aforementioned sections, as applicable; on the requirements and 
prohibitions applied under sections 2799B-1 and 2799B-2 of the PHS Act; 
on other applicable state laws on out-of-network balance billing; and 
on contacting appropriate state and federal agencies in the case that 
an individual believes that such a provider or facility has violated 
the prohibition against balance billing. These disclosure requirements 
are applicable for plan years beginning on or after January 1, 2022. To 
reduce burden and facilitate compliance with these disclosure 
requirements, the Departments are concurrently issuing a model 
disclosure notice that health care providers, facilities, group health 
plans, and health insurance issuers may, but are not required to, use 
to satisfy the disclosure requirements regarding the balance billing 
protections. The Departments will consider use of the model notice in 
accordance with the accompanying instructions to be good faith 
compliance with the disclosure requirements of section 9820(c) of the 
Code, section 720(c) of ERISA, and section 2799A-5(c) of the PHS Act, 
if all other applicable requirements are met. In addition, HHS will 
consider use of the model notice in accordance with the accompanying 
instructions to be good faith compliance with the disclosure 
requirements of section 2799B-3 of the PHS Act and 45 CFR 149.430, if 
all other applicable PHS Act requirements are met. The Departments may 
address the requirements under section 9820(c) of the Code, section 
720(c) of ERISA, and section 2799A-5(c) of the PHS Act, as added by the 
No Surprises Act, in more detail in future guidance or rulemaking. 
Until further guidance is issued, plans and issuers are expected to 
implement the requirements of section 9820(c) of the Code, section 
720(c) of ERISA, and section 2799A-5(c) of the PHS Act using a good 
faith, reasonable interpretation of the law. The Departments will take 
into account the statutory applicability date and the timeframe for 
implementation when determining good faith compliance with the law.
    These interim final rules generally apply to group health plans and 
health insurance issuers offering group or individual health insurance 
coverage (including grandfathered health plans) with respect to plan 
years (in the individual market, policy years) beginning on or after 
January 1, 2022, as

[[Page 36878]]

well as to health care providers and facilities, and providers of air 
ambulance services beginning on January 1, 2022.
    In the OPM interim final rules included in this rulemaking, OPM 
adopts all provisions of the Departments' interim final rules that 
address the sections of the Code, ERISA, and the PHS Act that are 
referenced in 5 U.S.C. 8902(p). In the OPM interim final rules, OPM 
defines terms unique to the FEHB Program, adapts some of the 
Departments' rules as necessary to properly integrate with the existing 
FEHB Program regulatory and contractual structure, sets forth the 
circumstances in which OPM will enforce these rules against FEHB 
carriers, and sets forth the types of court actions involving the FEHB 
Program that may be brought against OPM with respect to the No 
Surprises Act.
    In effectuating compliance with 5 U.S.C. 8902(p), FEHB contract 
terms that relate to the nature, provision, or extent of coverage or 
benefits (including payments with respect to benefits) supersede and 
preempt state law or local law, or any regulation issued thereunder, 
which relates to health insurance or plans.\23\ OPM contracts with FEHB 
carriers may include terms that adopt state law as governing for a 
particular purpose.
---------------------------------------------------------------------------

    \23\ 5 U.S.C. 8902(m)(1); see Coventry Health Care of Missouri, 
Inc. v. Nevils, 137 S. Ct. 1190 (2017).
---------------------------------------------------------------------------

III. Overview of the Interim Final Rules--Departments of HHS, Labor, 
and the Treasury

A. Definitions

    The provisions of the Code, ERISA, and the PHS Act added by the No 
Surprises Act, as well as these interim final rules, include defined 
terms that are specific to the requirements and implementation of the 
law. Definitions of these key terms are described throughout this 
preamble. These terms help define the scope of the balance billing 
protections and how cost-sharing amounts and payment levels are 
determined.
    The Departments note that these interim final rules define the term 
``physician or health care provider'' to mean a physician or other 
health care provider who is acting within the scope of practice of that 
provider's license or certification under applicable state law, but the 
definition specifically excludes providers of air ambulance services. 
The Departments recognize that, although the No Surprises Act does not 
define ``provider,'' it uses the term in a manner that includes 
providers of air ambulance services in some provisions. For example, 
the No Surprises Act added section 2799B-4 of the PHS Act, which 
specifically includes providers of air ambulance services when 
referencing providers. However, certain other provisions in the No 
Surprises Act apply only to providers of air ambulance services, or 
apply to health care providers generally, but by their terms are 
inapplicable to providers of air ambulance services. As an example of 
the latter, the No Surprises Act added section 2799B-2 of the PHS Act, 
which generally prohibits balance billing by nonparticipating health 
care providers furnishing non-emergency services at participating 
health care facilities. Although this provision does not explicitly 
exclude providers of air ambulance services, providers of air ambulance 
services would not furnish non-emergency services at participating 
health care facilities. Therefore, the provision does not apply to 
providers of air ambulance services (such providers are, however, 
prohibited from balance billing under section 2799B-5 of the PHS Act). 
Similarly, section 2799B-3 of the PHS Act, which requires a health care 
provider to inform individuals of the requirements and prohibitions on 
such health care provider in sections 2799B-1 and 2799B-2 of the PHS 
Act (neither of which apply to providers of air ambulance services), 
does not by its terms apply to providers of air ambulance services. 
Therefore, these interim final rules define ``physician or health care 
provider'' to exclude providers of air ambulance services, in order to 
help clarify which provisions of the No Surprises Act and interim final 
rules apply to providers of air ambulance services. In instances where 
provisions under the No Surprises Act, as implemented in these interim 
final rules, apply to providers of air ambulance services, the 
provisions explicitly reference air ambulance providers. Conversely, 
where providers of air ambulance services are not explicitly mentioned, 
the provisions do not apply.
    The Departments seek comment on the terms defined in these interim 
final rules, including the appropriateness and usability of the 
definitions, and whether additional terms should be defined in future 
rulemaking.

B. Preventing Surprise Medical Bills

1. Scope of the New Surprise Billing Protections
i. Emergency Services
    Under section 9816(a) of the Code, section 716(a) of ERISA, and 
section 2799A-1(a) of the PHS Act, and these interim final rules, if a 
group health plan, or a health insurance issuer offering group or 
individual health insurance coverage, provides or covers any benefits 
with respect to services in an emergency department of a hospital or 
with respect to emergency services in an independent freestanding 
emergency department, the plan or issuer must cover emergency services 
as defined in these interim final rules and such coverage must be 
provided in accordance with these interim final rules.
    A plan or issuer providing coverage of emergency services must do 
so without the individual or the health care provider having to obtain 
prior authorization (including when the emergency services are provided 
out-of-network) and without regard to whether the health care provider 
furnishing the emergency services is a participating provider or a 
participating emergency facility with respect to the services. The 
emergency services must be provided without regard to any other term or 
condition of the plan or coverage other than the exclusion or 
coordination of benefits (to the extent not inconsistent with benefits 
for an emergency medical condition as defined in these interim final 
rules), an affiliation or waiting period as permitted under the Code, 
ERISA, or the PHS Act, or applicable cost-sharing requirements. For a 
plan or health insurance coverage with a network of providers that 
provides benefits for emergency services, the plan or issuer may not 
impose any administrative requirement or limitation on coverage for 
emergency services received from nonparticipating providers or 
nonparticipating emergency facilities that is more restrictive than the 
requirements or limitations that apply to emergency services received 
from participating providers or participating emergency facilities. In 
addition, such plan or health insurance coverage must comply with the 
requirements regarding cost sharing, payment amounts, and processes for 
resolving billing disputes described elsewhere in this preamble.
    The terms ``emergency medical condition,'' ``emergency services,'' 
and ``to stabilize'' generally have the meaning given to them under the 
Emergency Medical Treatment and Labor Act (EMTALA), section 1867 of the 
Social Security Act.\24\ Emergency services include: (1) An appropriate 
medical screening examination that is within the capability of the 
emergency department of a hospital or of an independent freestanding 
emergency department, including ancillary services

[[Page 36879]]

routinely available to the emergency department, to evaluate whether an 
emergency medical condition exists; and (2) such further medical 
examination and treatment as may be required to stabilize the 
individual (regardless of the department of the hospital in which the 
further medical examination and treatment is furnished) within the 
capabilities of the staff and facilities available at the hospital or 
the independent freestanding emergency department.
---------------------------------------------------------------------------

    \24\ 42 U.S.C. 1395dd.
---------------------------------------------------------------------------

    Under section 2719A of the PHS Act, emergency services were defined 
to include: (1) A medical screening examination (as required under 
section 1867 of the Social Security Act) that is within the capability 
of the emergency department of a hospital, including ancillary services 
routinely available to the emergency department to evaluate such 
emergency medical condition; and (2) such further medical examination 
and treatment as are required under section 1867 of the Social Security 
Act to stabilize the patient within the capabilities of the staff and 
facilities available at the hospital. HHS has previously interpreted 
the obligations on hospitals under EMTALA to provide medical 
examination and stabilization services to end when a patient is 
formally admitted in good faith.\25\ Section 9816(a) of the Code, 
section 716(a) of ERISA, and section 2799A-1(a) of the PHS Act expand 
the definition of emergency services (as compared to section 2719A of 
the PHS Act) to include stabilization services ``regardless of the 
department of the hospital in which the further medical examination and 
treatment is furnished.'' Therefore, the definition of emergency 
services in these interim final rules includes pre-stabilization 
services that are provided after the patient is moved out of the 
emergency department and admitted to a hospital, and these services 
will be subject to the protections of the No Surprises Act.
---------------------------------------------------------------------------

    \25\ 42 CFR 489.24(a)(1)(ii); 68 FR 53221-53264 (Sept. 9, 2003); 
73 FR 48654-48668 (Aug. 19, 2008).
---------------------------------------------------------------------------

    Section 102 of the No Surprises Act further broadens the definition 
of emergency services to include emergency services provided at an 
independent freestanding emergency department. An independent 
freestanding emergency department is a health care facility (not 
limited to those described in the definition of health care facility at 
section 9816(b)(2)(A)(ii) of the Code, section 716(b)(2)(A)(ii) of 
ERISA, and section 2799A-1(b)(2)(A)(ii) of the PHS Act, as applicable) 
that provides emergency services, and is geographically separate and 
distinct from a hospital, and separately licensed as such by a state. 
The definition of ``independent freestanding emergency department'' is 
intended to include any health care facility that is geographically 
separate and distinct from a hospital, and that is licensed by a state 
to provide emergency services, even if the facility is not licensed 
under the term ``independent freestanding emergency department.''
    Regulation of health care facilities varies by state. In 
particular, state regulation of urgent care centers varies 
significantly, and is evolving as these types of centers become more 
common.\26\ If under state licensure laws, urgent care centers are 
permitted to provide emergency services, then urgent care centers in 
that state that are geographically separate and distinct from a 
hospital would fall within the definition of independent freestanding 
emergency department for purposes of these interim final rules. In 
contrast, if state licensure of urgent care centers does not permit 
such facilities to provide emergency services as defined in these 
interim final rules, then urgent care centers in that state would not 
be treated as independent freestanding emergency departments for 
purposes of these interim final rules. Finally, the definition of 
emergency services also includes additional post-stabilization 
services, as discussed in section III.B.1.ii of this preamble.
---------------------------------------------------------------------------

    \26\ Association of State and Territorial Health Officials. As 
Urgent Care Centers Increase, Licensing Authority Falling Under 
State Health Agencies, (Oct. 11, 2018) available at https://www.astho.org/StatePublicHealth/As-Urgent-Care-Centers-Increase-Licensing-Authority-Falling-Under-State-Health-Agencies/10-11-18/.
---------------------------------------------------------------------------

    The term ``emergency medical condition'' means a medical condition 
manifesting itself by acute symptoms of sufficient severity (including 
severe pain) such that a prudent layperson, who possesses an average 
knowledge of health and medicine, could reasonably expect the absence 
of immediate medical attention to result in a condition described in 
EMTALA, including (1) placing the health of the individual (or, with 
respect to a pregnant woman, the health of the woman or her unborn 
child) in serious jeopardy, (2) serious impairment to bodily functions, 
or (3) serious dysfunction of any bodily organ or part.\27\ This 
definition includes mental health conditions and substance use 
disorders.
---------------------------------------------------------------------------

    \27\ See 42 U.S.C. 1395dd(e)(1)(A).
---------------------------------------------------------------------------

    The Departments are aware that some plans and issuers currently 
deny coverage of certain services provided in the emergency department 
of a hospital by determining whether an episode of care involves an 
emergency medical condition based solely on final diagnosis codes, such 
as International Classification of Diseases, Tenth Revision, Clinical 
Modification (ICD-10-CM) codes . In addition, some plans and issuers 
might automatically deny coverage based on a list of final diagnosis 
codes initially, without regard to the individual's presenting symptoms 
or any additional review. Following an initial denial, plans and 
issuers might then provide for complete consideration of the claim, and 
apply the prudent layperson standard, only as part of an appeals 
process if the participant, beneficiary, or enrollee appeals. These 
practices are inconsistent with the emergency services requirements of 
the No Surprises Act and the ACA.\28\ This is true even if the process 
for complete consideration of the claim following an initial denial is 
not designated as a formal appeal. Instead, the determination of 
whether the prudent layperson standard is met must be made on a case-
by-case basis before an initial denial of an emergency services claim.
---------------------------------------------------------------------------

    \28\ See also Am. Coll. of Emergency Physicians v. Blue Cross & 
Blue Shield of Georgia, No. 20-11511, 2020 WL 6165852 (11th Cir. 
Oct. 22, 2020) (per curiam) (reversing dismissal of plaintiffs' ACA 
and ERISA claims alleging defendants violated prudent layperson 
standard where review process was based upon physician review of 
medical records and diagnostic codes; prudent layperson standard 
ignores a patient's final diagnosis and instead asks whether a 
person with average medical knowledge would reasonably think they 
need emergency services to address their symptoms).
---------------------------------------------------------------------------

    These interim final rules make clear that if a group health plan, 
or a health insurance issuer offering group or individual health 
insurance coverage, provides or covers any benefits with respect to 
services in an emergency department of a hospital or with respect to 
emergency services in an independent freestanding emergency department, 
the plan or issuer must cover emergency services without limiting what 
constitutes an emergency medical condition (as defined in these interim 
final rules) solely on the basis of diagnosis codes. When a plan or 
issuer denies coverage, in whole or in part, for a claim for payment of 
a service rendered in the emergency department of a hospital or 
independent freestanding emergency department, including services 
rendered during observation or surgical services, the determination of 
whether the prudent layperson standard has been met must be based on 
all pertinent documentation and be focused on the presenting symptoms 
(and not solely on the final diagnosis). This determination must take 
into account that the legal standard

[[Page 36880]]

regarding the decision to seek emergency services is based on whether a 
prudent layperson (rather than a medical professional) would reasonably 
consider the situation to be an emergency.\29\ In covering emergency 
services, plans and issuers must also ensure that they do not restrict 
the coverage of emergency services by imposing a time limit between the 
onset of symptoms and the presentation of the participant, beneficiary, 
or enrollee at the emergency department. Similarly, plans and issuers 
also may not restrict the coverage of emergency services because the 
patient did not experience a sudden onset of the condition.
---------------------------------------------------------------------------

    \29\ However, nothing in the statute or these interim final 
rules prevents a plan or issuer from approving coverage for 
emergency services solely on the basis of diagnosis codes, or from 
taking diagnostic codes into account when deciding payment for a 
claim for emergency services, provided a denial of coverage is not 
based solely on diagnosis codes.
---------------------------------------------------------------------------

    The Departments are also aware that some plans and issuers that 
generally provide coverage for emergency services have nonetheless 
denied benefits for such services based on other general plan 
exclusions. For example, the Departments are aware of some plans and 
issuers denying claims for emergency services provided to dependent 
women who are pregnant, based on a general plan exclusion for dependent 
maternity care. As explained previously, both the coverage of emergency 
services rules issued under section 2719A of the PHS Act and the new 
emergency services requirements included in these interim final rules 
provide, in part, that if a plan or issuer provides or covers any 
benefits with respect to services in an emergency department of a 
hospital (or under these interim final rules, in an independent 
freestanding emergency department), emergency services must be provided 
``without regard to any other term or condition of the plan or coverage 
(other than the exclusion or coordination of benefits . . . ).'' The 
Departments clarify that this provision does not permit plans and 
issuers to exclude benefits for items and services that would otherwise 
constitute benefits for an emergency medical condition as defined under 
these interim final rules. This provision does not permit plans and 
issuers that cover emergency services to deny benefits for a 
participant, beneficiary, or enrollee with an emergency medical 
condition that receives emergency services, based on a general plan 
exclusion that would apply to items and services other than emergency 
services.
ii. Post-Stabilization Services
    Under section 9816(a)(3)(C)(ii) of the Code, section 
716(a)(3)(C)(ii) of ERISA, and section 2799A-1(a)(3)(C)(ii) of the PHS 
Act, emergency services include any additional items and services that 
are covered under a plan or coverage and furnished by a 
nonparticipating provider or nonparticipating emergency facility 
(regardless of the department of the hospital in which such items and 
services are furnished) after a participant, beneficiary, or enrollee 
is stabilized and as part of outpatient observation or an inpatient or 
outpatient stay with respect to the visit in which the other emergency 
services are furnished. Such additional items and services (referred to 
in this preamble as post-stabilization services) are considered 
emergency services subject to surprise billing protections unless the 
conditions enumerated in section 9816(a)(3)(C)(ii)(II)(aa)-(cc) of the 
Code, section 716(a)(3)(C)(ii)(II)(aa)-(cc) of ERISA, or section 2799A-
1(a)(3)(C)(ii)(II)(aa)-(cc) of the PHS Act, as applicable, are met, as 
well as such other conditions as specified by the Departments under 
paragraph (dd) of the respective sections. Therefore, these interim 
final rules provide that post-stabilization services are emergency 
services unless all of the following conditions are met.
    First, the attending emergency physician or treating provider must 
determine that the participant, beneficiary, or enrollee is able to 
travel using nonmedical transportation or nonemergency medical 
transportation to an available participating provider or facility 
located within a reasonable travel distance, taking into consideration 
the individual's medical condition. The HHS interim final rules codify 
this requirement at 45 CFR 149.410(b)(1). For this purpose, a treating 
provider is a physician or health care provider who has evaluated the 
individual. It is generally expected that a treating provider with 
medical training and experience related to the individual's specific 
medical condition will determine if the individual is able to travel 
using nonmedical transportation or nonemergency medical transportation 
to an available participating provider or facility located within a 
reasonable travel distance. This determination is based on all the 
relevant facts and circumstances and the individual should be involved 
in the decision-making process, if possible. The determination by the 
attending emergency physician or treating provider is binding on the 
facility for purposes of this requirement. This requirement is based on 
the Departments' understanding that such provider is in the best 
position to make this determination.
    For individuals receiving care in or near their plan's or issuer's 
covered service area, as well as individuals with coverage that uses a 
national network of providers and facilities, the statutory criterion 
would generally be sufficient to ensure that an individual can freely 
choose, based on their medical condition, to receive post-stabilization 
services at a participating facility or participating provider. The 
additional requirement in these interim final rules that the individual 
be able to travel to an available participating provider or facility 
located within a reasonable travel distance, taking into consideration 
the individual's medical condition, is necessary and appropriate to 
carry out the provision of the No Surprises Act, as the requirement is 
intended to address the common situations in which an individual has 
received emergency services in a geographic region far from where any 
participating providers or facilities are located. In cases where the 
individual cannot travel using nonmedical transportation or 
nonemergency medical transportation, or cases where there are no 
participating facilities or participating providers located within a 
reasonable travel distance, taking into account the individual's 
medical condition, the Departments are of the view that individuals are 
unable to provide consent freely and, therefore, balance billing 
protections continue to apply.
    In addition, the Departments recognize that an individual's 
transportation options may vary based on the individual's location, 
social risk, and other risk factors. In cases of underserved and 
geographically isolated communities and those with social risk factors 
related to income and transportation options, individuals may face 
additional barriers to obtaining post-stabilization services without a 
disruption in care. For example, individuals may not have the ability 
to pay for a taxi, may not have access to a car, may not be able to 
safely take public transit due to their medical condition, or may not 
have public transit options available. In these cases, the net effect 
would be the same: The individual would face unreasonable travel 
burdens that could prevent them from being able to consent freely to a 
waiver of the otherwise applicable balance billing protections. The 
Departments expect the attending emergency physician or treating 
provider to consider such factors when

[[Page 36881]]

assessing the individual's ability to travel to a participating 
provider or facility. The Departments seek comment on the definition of 
``reasonable travel distance'' and whether specific standards or 
examples should be provided regarding what constitutes an unreasonable 
travel burden. For example, should reasonable travel distance take into 
account only mileage, or also other factors, such as traffic or other 
route conditions that might make traveling difficult, time consuming, 
or hazardous?
    In contrast to situations where a participant, beneficiary, or 
enrollee is able to travel using nonmedical transportation or 
nonemergency medical transportation following stabilization, in the 
event that the individual requires medical transportation to travel, 
including transportation by either ground or air ambulance vehicle, the 
individual is not in a condition to receive notice or provide consent. 
Therefore, the surprise billing protections continue to apply to post-
stabilization services provided in connection with the visit for which 
the individual received emergency services.
    Second, the provider or facility furnishing post-stabilization 
services must satisfy the notice and consent criteria of section 2799B-
2(d) of the PHS Act with respect to such items and services (which are 
implemented in HHS-only interim final rules at 45 CFR 149.410(b)(2), 
and incorporate by reference the criteria for notice and consent in 45 
CFR 149.420(c) through (g)).
    Third, the individual (or the individual's authorized 
representative) must be in a condition to receive the information in 
the notice described in section 2799B-2 of the PHS Act (which is also 
implemented in 45 CFR 149.410(b)(3)) and to provide informed consent 
under such section, in accordance with applicable state law. Whether an 
individual is in a condition to receive the information in the notice 
is determined by the attending physician or treating provider using 
appropriate medical judgment. It is generally expected that an 
attending physician or treating provider with medical training and 
experience related to the individual's specific medical condition will 
make this determination based on all the relevant facts and 
circumstances. In addition to applying any requirements under state 
law, such medical professionals should apply the same principles as 
they would when determining if a patient is able to provide informed 
consent for treatment.\30\ They should assess whether an individual is 
capable of understanding the information provided in the notice and the 
implications of consenting. Consideration must be given to the 
individual's state of mind after receiving the emergency services and 
the individual's emotional state at the time of consent. For example, 
consideration must be given to the effect of any alcohol or drug use by 
the individual, including the use or administration of prescribed 
medications, as well as to any pain the individual is experiencing, and 
the impact of those factors on the patient's state of mind. If the 
individual is experiencing a mental or behavioral health episode or 
displaying symptoms of a mental or behavioral health disorder, or is 
impaired by a substance abuse disorder, consideration should also be 
given as to whether the individual's condition impairs their ability to 
receive the information in the notice and provide informed consent. In 
addition, consideration must be given to cultural and contextual 
factors that may affect the informed decision-making and consent 
process for members of underserved communities, including lack of trust 
arising from historical inequities, misinformation about the informed 
consent process, or barriers to comprehension of the information given 
through the informed consent process and after the informed consent 
document is signed.\31\ These barriers may include accessibility, 
language, and literacy barriers. In addition, the informed consent must 
be obtained in a way that adheres to all civil rights protections cited 
within this rulemaking, ensuring that all individuals including those 
from underserved, underrepresented communities, with limited English 
proficiency, and with disabilities, are able to understand and freely 
make informed decisions.
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    \30\ Ethics guidance for physicians, published by the American 
Medical Association, states that physicians should ``[a]ssess the 
patient's ability to understand relevant medical information and the 
implications of treatment alternatives and to make an independent, 
voluntary decision'' as part of the process of seeking informed 
consent. American Medical Association, Code of Medical Ethics 
Opinion 2.1.1, available at https://www.ama-assn.org/system/files/2019-06/code-of-medical-ethics-chapter-2.pdf (last visited April 5, 
2021). See also Gostin, LO. Public Health Law, 217-218 (2000) 
(discussing the four elements of the doctrine of informed consent: 
Information, competency, voluntariness, and specificity).
    \31\ For a discussion of strategies to improve informed consent 
processes for minority communities, see Quinn, S.C., et al. 
Improving Informed Consent with Minority Participants: Results from 
Researcher and Community Surveys, Journal of Empirical Research on 
Human Research Ethics, 7(5): 44-55 (Dec. 2012).
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    Consent must be made voluntarily, meaning the individual must be 
able to consent freely, without undue influence, fraud, or duress. If 
post-stabilization services must be provided quickly after the 
emergency services are provided, it may be challenging for the 
individual or their authorized representative to have adequate time to 
make a clear-minded decision regarding consent. Consent obtained 
through a threat of restraint or immediacy of the need for treatment is 
not voluntary. In addition, the emergency physician or treating 
provider should consider whether the individual has reasonable options 
regarding post-stabilization services, transport, or service provider 
or facility. The Departments are of the view that the post-
stabilization notice and consent procedures should generally be applied 
in limited circumstances, where the individual knowingly and 
purposefully seeks care from a nonparticipating provider or facility 
(such as deciding to go under the care of a specific provider or 
facility that the individual is familiar or comfortable with), and that 
the process should not be permitted to circumvent the consumer 
protections in the No Surprises Act.
    Fourth, the provider or facility must satisfy any additional 
requirements or prohibitions as may be imposed under applicable state 
law. These interim final rules include this criterion recognizing that 
some state laws do not permit exceptions to state balance billing 
protections, such as allowing individuals to consent to waive 
protections. Thus, states may impose stricter standards by which post-
stabilization services will be exempted from the surprise billing 
protections under these interim final rules, or states might not permit 
exceptions at all. This requirement is codified in the HHS interim 
final rules at 45 CFR 149.410(b)(5).
    The No Surprises Act authorizes the Departments to specify other 
conditions that must be satisfied for post-stabilization services to be 
excepted from the definition of emergency services for purposes of the 
No Surprises Act. The Departments solicit comments on the conditions 
described earlier in this section. The Departments also seek comment on 
whether there are any additional conditions that would be appropriate 
to designate under the definition of emergency services, such as 
conditions relating to coordinating care transitions to participating 
providers and facilities. The Departments also solicit comments on

[[Page 36882]]

what guidelines, beyond state laws regarding informed consent, may be 
needed to determine when an individual is in a condition to receive the 
written notice and provide consent. For example, are standards needed 
to account for individuals who are experiencing severe pain, 
intoxication, incapacitation, or dementia after being stabilized 
following an emergency medical condition?
iii. Non-Emergency Services Performed by Nonparticipating Providers at 
Participating Health Care Facilities
    Section 9816(b) of the Code, section 716(b) of ERISA, section 
2799A-1(b) of the PHS Act, and these interim final rules, apply 
surprise billing protections in the case of non-emergency services 
furnished by nonparticipating providers during a visit by a 
participant, beneficiary, or enrollee at a participating health care 
facility, unless the notice and consent requirements, as specified in 
these interim final rules, have been met.
    Specifically, if a group health plan, or a health insurance issuer 
offering group or individual health insurance coverage, provides or 
covers benefits with respect to items and services (other than 
emergency services to which section 9816(a) of the Code, section 716(a) 
of ERISA, or section 2799A-1(a) of the PHS Act applies), the plan or 
issuer must cover such items and services furnished to a participant, 
beneficiary, or enrollee of the plan or coverage by a nonparticipating 
provider with respect to a visit at a participating health care 
facility in accordance with these interim final rules, including the 
requirements regarding cost sharing, payment amounts, and processes for 
resolving billing disputes described elsewhere in this preamble.
iv. Health Care Facilities
    These interim final rules, consistent with section 9816(b)(2)(A) of 
the Code, section 716(b)(2)(A) of ERISA, and section 2799A-1(b)(2)(A) 
of the PHS Act, define a participating health care facility, in the 
context of non-emergency services, as a health care facility that has a 
contractual relationship directly or indirectly with a group health 
plan or health insurance issuer offering group or individual health 
insurance coverage setting forth the terms and conditions on which a 
relevant item or service is provided to a participant, beneficiary, or 
enrollee under the plan or coverage, respectively. These interim final 
rules also specify that a single case agreement between a health care 
facility and a plan or issuer, used to address unique situations in 
which a participant, beneficiary, or enrollee requires services that 
typically occur out-of-network constitutes a contractual relationship 
for purposes of this definition, and is limited to the parties to the 
agreement with respect to the particular individual involved. Thus, 
when non-emergency services are furnished by a nonparticipating 
provider at a health care facility that has a single case agreement in 
place with respect to the individual being treated, as opposed to an 
agreement or contract that would apply to all the plan's or issuer's 
participants, beneficiaries, or enrollees, those non-emergency services 
would be subject to the protections described in 26 CFR 54.9816-5T, 29 
CFR 2590.716-5, and 45 CFR 149.120, as applicable, and the 
corresponding requirements on providers at 45 CFR 149.420. The 
Departments are of the view that it is reasonable that an individual 
would expect items and services delivered at a health care facility 
that has a single case agreement in place with respect to the 
individual's care to be delivered on an in-network basis. Thus, these 
interim final rules apply the same protections in this circumstance as 
would apply at health care facilities that participate in the plan or 
issuer's network.\32\ The facility is considered a participating 
facility only with respect to items and services furnished to the 
individual whose care is covered by the single case agreement. 
Similarly, these interim final rules define a participating emergency 
facility to include a facility that has a single case agreement in 
place with a plan or issuer with respect to a specific individual's 
care. The Departments seek comment on this approach.
---------------------------------------------------------------------------

    \32\ In contrast, as discussed in section III.B.2.vi of this 
preamble, these interim final rules do not include negotiated rates 
under single-case agreements in the methodology for calculating the 
qualifying payment amount.
---------------------------------------------------------------------------

    For this purpose, a health care facility described in the statute 
is each of the following, in the context of non-emergency services: (1) 
A hospital (as defined in 1861(e) of the Social Security Act); (2) a 
hospital outpatient department; (3) a critical access hospital (as 
defined in section 1861(mm)(1) of the Social Security Act); or (4) an 
ambulatory surgical center described in section 1833(i)(1)(A) of the 
Social Security Act.
    In addition, section 9816(b)(2)(A)(ii)(V) of the Code, section 
716(b)(2)(A)(ii)(V) of ERISA, and section 2799A-1(b)(2)(A)(ii)(V) of 
the PHS Act authorize the Departments to designate additional 
facilities as health care facilities. The Departments solicit comments 
on other facilities that would be appropriate to designate as health 
care facilities. The Departments are interested in comments identifying 
types of facilities in which surprise bills frequently arise, and are 
particularly interested in comments regarding whether urgent care 
centers or retail clinics should be designated as health care 
facilities for purposes of these interim final rules.
    The Departments recognize that state regulation of urgent care 
centers varies significantly, as does the type of services they are 
permitted to provide under state law. Under these interim final rules, 
emergency services provided at urgent care centers that are licensed in 
a manner that brings them within the definition of independent 
freestanding emergency department would be subject to cost-sharing and 
balance billing protections, among others. However, given significant 
variation in state law definitions, urgent care centers are not 
included within the definition of health care facilities, in the 
context of non-emergency services. Thus, in cases where non-emergency 
services are furnished at participating urgent care centers by 
nonparticipating providers, those services would not receive the 
protections under these interim final rules. However, the Departments 
are of the view that it is possible that individuals may be using 
urgent care centers (regardless of how they are licensed) in a similar 
way to how they use independent freestanding emergency departments, in 
which case it may be appropriate to designate urgent care centers as 
health care facilities. The Departments seek comment on the degree to 
which individuals may be using urgent care centers in a similar way to 
how they use independent freestanding emergency departments. The 
Departments seek data on how frequently surprise bills arise in the 
context of urgent care centers. The Departments also seek comment on 
whether plans and issuers generally contract separately with urgent 
care centers and the providers who work at the centers, and how 
frequently contracting practices result in nonparticipating providers 
furnishing services at participating urgent care centers. The 
Departments also seek comment on potential definitions of the term 
urgent care center.
v. Items and Services Within the Scope of a Visit
    In addition to items and services furnished by a provider at the 
facility, a ``visit'' to a participating health care facility includes 
the furnishing of equipment and devices, telemedicine services, imaging 
services, laboratory services, and preoperative and

[[Page 36883]]

postoperative services, regardless of whether the provider furnishing 
such items or services is at the facility. These services are not 
limited based on whether the provider furnishing the services is 
physically located at the facility. For example, if a sample is 
collected during an individual's hospital visit and sent to an off-site 
laboratory, the laboratory services would be considered to be part of 
the individual's visit to a participating health care facility, if 
laboratory services are covered by the plan or coverage. Similarly, if 
an individual receives a consultation with a specialist via 
telemedicine during a visit to a participating hospital, those 
telemedicine services would be considered part of the individual's 
visit to a participating health care facility. The statutory definition 
of ``visit'' also provides authority for the Departments to specify 
other items and services. The Departments solicit comments regarding 
other items and services that would be appropriate to include within 
the scope of a visit for purposes of these interim final rules.
    The No Surprises Act and these interim final rules provide for 
exceptions to the balance billing prohibitions and cost-sharing 
requirements if the participant, beneficiary, or enrollee is provided a 
compliant written notice and consents to receive such services from a 
nonparticipating provider at a participating health care facility. 
However, these exceptions do not apply with respect to certain 
ancillary services (in the context of non-emergency services) and other 
services under certain conditions, as discussed later in this preamble.
vi. Air Ambulance Services
    Section 105 of the No Surprises Act added section 9817 of the Code, 
section 717 of ERISA, and section 2799A-2 of the PHS Act to address 
surprise air ambulance bills. These provisions apply in the case of a 
participant, beneficiary, or enrollee who receives services from a 
nonparticipating provider of air ambulance services, meaning medical 
transport by a rotary-wing air ambulance, as defined in 42 CFR 414.605, 
or fixed-wing air ambulance, as defined in 42 CFR 414.605. These 
interim final rules apply these provisions where a plan or coverage 
generally has a network of participating providers and provides or 
covers any benefits for air ambulance services, even if the plan or 
coverage does not have in its network any providers of air ambulance 
services. With respect to air ambulance services furnished by 
nonparticipating providers (including inter-facility transports), plans 
and issuers must comply with the requirements regarding cost sharing, 
payment amounts, and processes for resolving billing disputes described 
elsewhere in this preamble, if such services would be covered if 
provided by a participating provider with respect to such plan or 
coverage.
2. Determination of the Cost-Sharing Amount and Payment Amount to 
Providers and Facilities
i. In General
    Under section 9816(a) of the Code, section 716(a) of ERISA, section 
2799A-1(a) of the PHS Act, and these interim final rules, if a plan or 
issuer provides or covers any benefits with respect to services in an 
emergency department of a hospital or with respect to emergency 
services in an independent freestanding emergency department, the cost-
sharing requirement for such services performed by a nonparticipating 
provider or nonparticipating emergency facility must not be greater 
than the requirement that would apply if such services were provided by 
a participating provider or a participating emergency facility. 
Additionally, if a plan or issuer provides or covers any benefits for 
non-emergency items and services furnished by a nonparticipating 
provider with respect to a visit at a participating health care 
facility, unless the provider has satisfied certain notice and consent 
criteria with respect to such items and services, the plan or issuer 
may not impose a cost-sharing requirement for such items and services 
that is greater than the cost-sharing requirement that would apply had 
such items or services been furnished by a participating provider. 
Similarly, if a plan or issuer provides or covers benefits for air 
ambulance services, the plan or issuer must cover such services from a 
nonparticipating provider in such a manner that the cost-sharing 
requirement with respect to such services must be the same requirement 
that would apply if such services were provided by a participating 
provider. For example, if a plan or issuer imposes a 20 percent 
coinsurance rate for emergency services from participating providers or 
participating emergency facilities, the plan or issuer may not impose a 
coinsurance rate on emergency services from nonparticipating providers 
or facilities that exceeds 20 percent. Stakeholders have reported that 
network participation rates are low among providers of air ambulance 
services. In instances where a plan or issuer does not have an 
established cost-sharing requirement that applies specifically to 
participating providers, the plan or issuer must calculate the cost-
sharing amount using the generally applicable cost-sharing requirement 
for the relevant item or service under the plan or coverage.
    Under sections 9816(a) and (b) and 9817(a) of the Code, sections 
716(a) and (b) and 717(a) of ERISA, sections 2799A-1(a) and (b) and 
2799A-2(a) of the PHS Act, and these interim final rules, any cost-
sharing payments for emergency services, non-emergency services 
furnished by a nonparticipating provider in a participating health care 
facility, and air ambulance services furnished by a nonparticipating 
provider must be counted toward any in-network deductible or out-of-
pocket maximums applied under the plan or coverage (including the 
annual limitation on cost sharing under section 2707(b) of the PHS Act) 
(as applicable), respectively (and these in-network deductibles and 
out-of-pocket maximums must be applied) in the same manner as if such 
cost-sharing payments were made with respect to services furnished by a 
participating provider or facility.
ii. Cost-Sharing Amount
    Section 9816(a)(1)(C)(iii) of the Code, section 716(a)(1)(C)(iii) 
of ERISA, section 2799A-1(a)(1)(C)(iii) of the PHS Act, and these 
interim final rules also specify that for emergency services furnished 
by a nonparticipating emergency facility, and for non-emergency 
services furnished by nonparticipating providers in a participating 
health care facility, cost sharing is generally calculated as if the 
total amount that would have been charged for the services by a 
participating emergency facility or participating provider were equal 
to the recognized amount for such services, as defined by the statute 
and in these interim final rules.
    The ``recognized amount'' is: (1) An amount determined by an 
applicable All-Payer Model Agreement under section 1115A of the Social 
Security Act; (2) if there is no applicable All-Payer Model Agreement, 
an amount determined by a specified state law; or (3) if there is no 
applicable All-Payer Model Agreement or specified state law, the lesser 
of the amount billed by the provider or facility or the QPA, which 
under these interim final rules generally is the median of the 
contracted rates of the plan or issuer for the item or service in the 
geographic region.
    By requiring plans and issuers to calculate the cost-sharing amount 
using the recognized amount, rather than the

[[Page 36884]]

amount the plan or issuer ultimately pays the nonparticipating provider 
or nonparticipating emergency facility for the furnished items or 
services, the No Surprises Act and these interim final rules limit the 
effect of provider-payer disputes about payment amounts on participant, 
beneficiary, or enrollee cost sharing. Under the statute and these 
interim final rules, the provider or facility and plan or issuer 
separately determine the total payment amount for the furnished items 
or services, but that amount generally does not affect the cost-sharing 
amount the individual must pay.
    The Departments are aware that there may be some instances where a 
nonparticipating health care provider or facility might bill a plan or 
issuer for an item or service that is subject to these surprise billing 
protections in an amount less than the QPA. For example, this might be 
a relatively common occurrence for items whose patent expires after 
2019, in instances where the QPA is based off the median of the 
contracted rates from 2019. In these instances, assuming the plan or 
issuer would not pay more than the billed charge, calculating cost 
sharing based on the QPA would require a participant, beneficiary, or 
enrollee to pay a higher percentage in cost sharing than if the items 
or services had been furnished by a participating provider. However, 
section 9816(a)(1)(C)(ii) of the Code, section 716(a)(1)(C)(ii) of 
ERISA, and section 2799A-1(a)(1)(C)(ii) of the PHS Act expressly 
prohibit plans and issuers from applying a cost-sharing requirement 
that is greater than the requirement that would apply if such services 
were provided by a participating provider or a participating emergency 
facility. Therefore, under these interim final rules, in circumstances 
where a specified state law or All-Payer Model Agreement does not apply 
to determine the cost-sharing amount, cost sharing must be based on the 
lesser of the QPA or the amount billed by the provider for the item or 
service. The different methods for determining the recognized amount 
are discussed in separate sections of this section III.B.2 of this 
preamble.
    With respect to air ambulance services furnished by 
nonparticipating providers, the recognized amount is not used for 
purposes of determining cost sharing. Rather, the statute specifies 
that the cost-sharing requirement with respect to such services must be 
the same requirement that would apply if such services were provided by 
a participating provider, and any coinsurance or deductible must be 
based on rates that would apply for such services if they were 
furnished by a participating provider. These interim final rules 
require that plans and issuers base any coinsurance and deductible for 
air ambulance services provided by a nonparticipating provider on the 
lesser of the QPA or the billed amount. The Departments have concluded 
that this policy is consistent with the statute's general intent to 
protect participants, beneficiaries, and enrollees from excessive 
bills, and to remove the individuals as much as possible from disputes 
between plans and issuers and providers of air ambulance services. In 
addition, using the QPA is one method of ensuring that any coinsurance 
or deductible is based on rates that would apply for the services if 
they were furnished by a participating provider, given that the QPA is 
generally based on median contracted rates, as opposed to rates charged 
by nonparticipating providers, and is one basis used for determining 
the cost-sharing amount in the context of emergency services and items 
and services furnished by nonparticipating providers at participating 
health care facilities.
    As discussed in this preamble, the Airline Deregulation Act of 1978 
(ADA) broadly preempts state laws that relate to air ambulance 
providers, and the Departments are unaware of any instances in which an 
All-Payer Model Agreement or a specified state law might apply. In 
addition, since an All-Payer Model Agreement or a specified state law 
would not need to follow an approach based on rates that would apply 
for such services if they were furnished by a participating provider 
(for example, Medicare rates could be used instead), it is the 
Departments' view that Congress did not intend to apply the concept of 
the recognized amount to nonparticipating providers of air ambulance 
services. The Departments seek comment on any potential alternate 
approaches for calculating the cost-sharing amount for air ambulance 
services furnished by nonparticipating providers of air ambulance 
services.
iii. Out-of-Network Rate
    In addition to establishing requirements related to cost sharing, 
the No Surprises Act and these interim final rules also establish 
requirements related to the total amount paid by a plan or issuer for 
items and services subject to these provisions, referred to as the out-
of-network rate. The plan or issuer must make a total payment equal to 
one of the following amounts, less any cost sharing from the 
participant, beneficiary, or enrollee: (1) An amount determined by an 
applicable All-Payer Model Agreement under section 1115A of the Social 
Security Act; (2) if there is no such applicable All-Payer Model 
Agreement, an amount determined by a specified state law; (3) in the 
absence of an applicable All-Payer Model Agreement or specified state 
law, if the plan or issuer and the provider or facility have agreed on 
a payment amount, the agreed on amount; or (4) if none of those three 
conditions apply, and the parties enter into the IDR process and do not 
agree on a payment amount before the date when the IDR entity makes a 
determination of the amount, the amount determined by the IDR entity. 
These four approaches for determining the out-of-network rate are 
discussed more fully later in this preamble.
    The requirements related to cost sharing and to the out-of-network 
rate apply when a group health plan or coverage provides or covers 
benefits for services subject to these provisions. The Departments 
interpret this to mean that the requirements apply when a plan or 
issuer provides coverage for such items and services, pursuant to the 
terms of the plan or coverage, even in cases where an individual has 
not satisfied their deductible.\33\ Because the cost-sharing amount is 
calculated using the recognized amount (or for air ambulance services 
the lesser of the QPA or the billed amount) that is calculated 
separately from the determination of the out-of-network rate, these 
requirements may result in circumstances where a plan or issuer must 
make payment prior to an individual meeting their deductible. 
Specifically, where the surprise billing protections apply, and the 
out-of-network rate exceeds the amount upon which cost sharing is 
based, a plan or issuer must pay the provider or facility the 
difference between the out-of-network rate and the cost-sharing amount 
(the latter of which in this case would equal the recognized amount, or 
the lesser of the QPA or the billed amount), even in cases where an 
individual has not satisfied their deductible, as illustrated in the 
following example.
---------------------------------------------------------------------------

    \33\ Absent the balance billing protections under the No 
Surprises Act and these interim final rules, the plan or issuer 
would not generally be expected to make a payment to the provider or 
facility prior to an individual satisfying the deductible.
---------------------------------------------------------------------------

    Example. An individual is enrolled in a high deductible health plan 
with a $1,500 deductible and has not yet accumulated any costs towards 
the deductible at the time the individual receives emergency services 
at an out-of-network facility. The plan determines that the recognized 
amount for the services is $1,000. Because the

[[Page 36885]]

individual has not satisfied the deductible, the individual's cost-
sharing amount is $1,000, which accumulates towards the deductible. The 
out-of-network rate is subsequently determined to be $1,500. Under the 
requirements of the statute and these interim final rules, the plan is 
required to pay the difference between the out-of-network rate and the 
cost-sharing amount. Therefore, the plan pays $500 for the emergency 
services, even though the individual has not satisfied the deductible. 
The individual's out-of-pocket costs are limited to the amount of cost-
sharing originally calculated using the recognized amount (that is, 
$1,000).
    Although such a payment would generally cause a high deductible 
health plan to lose its status as a high deductible health plan, the No 
Surprises Act added section 223(c)(2)(F) to the Code to specify that a 
plan shall not fail to be treated as a high deductible health plan by 
reason of providing benefits for medical care in accordance with 
section 9816 or 9817 of the Code, section 716 or 717 of ERISA, or 
section 2799A-1 or 2799A-2 of the PHS Act (the provisions added by the 
No Surprises Act related to surprise medical and air ambulance bills), 
or any state law providing similar protections to individuals, prior to 
the satisfaction of the deductible.\34\
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    \34\ See section IV.A.5 of this preamble for a discussion of 
HHS-only interim final rules addressing catastrophic plans' 
compliance with these requirements.
---------------------------------------------------------------------------

iv. Specified State Law
    Under section 9816(a)(3)(I) of the Code, section 716(a)(3)(I) of 
ERISA, section 2799A-1(a)(3)(I) of the PHS Act, and these interim final 
rules, a specified state law is a state law that provides a method for 
determining the total amount payable under a group health plan or group 
or individual health insurance coverage to the extent the state law 
applies. This includes instances where the Departments have interpreted 
this term to include state laws where the state law applies because the 
state has allowed a plan that is not otherwise subject to applicable 
state law an opportunity to opt in to a program established under state 
law, subject to section 514 of ERISA, for an item or service furnished 
by a nonparticipating provider or nonparticipating emergency facility. 
In cases where a specified state law applies, the recognized amount 
(the amount upon which cost sharing is based) and out-of-network rate 
for emergency and non-emergency services subject to the surprise 
billing protections is calculated based on such specified state law.
    In order for a state law to determine the recognized amount or out-
of-network rate, any such law must apply to: (1) The plan, issuer, or 
coverage involved, including where a state law applies because the 
state has allowed a plan that is not otherwise subject to applicable 
state law an opportunity to opt in, subject to section 514 of ERISA; 
(2) the nonparticipating provider or nonparticipating emergency 
facility involved (and in the case of state out-of-network rate laws, 
the nonparticipating provider of air ambulance services involved); and 
(3) the item or service involved. In instances where a state law does 
not satisfy all of these criteria, the state law does not apply to 
determine the recognized amount or out-of-network rate. For example, 
where a particular state surprise billing law that governs the 
recognized amount and out-of-network rate applies to a particular plan 
or coverage but does not apply to nonparticipating neonatologists, who 
provide a specified ancillary service under section 2799B-2(b)(2) of 
the PHS Act, the consumer protections under federal law would determine 
the recognized amount and out-of-network rate with respect to 
neonatology services while the state law would apply with respect to 
other provider specialties covered under that state law. Similarly, 
where a state's surprise billing laws apply only to health maintenance 
organizations (HMOs), federal protections against surprise billing 
would govern with respect to other types of coverage while the state 
protections would apply to HMOs for purposes of determining the 
recognized amount and out-of-network rate.
    The same definition of ``out-of-network rate''--including the 
reference to specified state laws--applies to air ambulance services as 
to other services. The Departments note, however, that the ADA states 
in relevant part: ``. . . a State, political subdivision of a State, or 
political authority of at least 2 States may not enact or enforce a 
law, regulation, or other provision having the force and effect of law 
related to a price, route, or service of an air carrier that may 
provide air transportation under this subpart.'' \35\ Assuming that a 
provider of air ambulance services is an ``air carrier'' covered by 
this provision, as is typical,\36\ the provision preempts state laws 
that would limit the amount of payment that the provider of air 
ambulance services would otherwise be entitled to receive.\37\ Given 
the applicability of the ADA, the Departments are not aware of any 
state laws that would meet the criteria to set the out-of-network rate 
for nonparticipating providers of air ambulance services when providing 
services subject to the protections in the No Surprises Act.
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    \35\ 49 U.S.C. 41713(b).
    \36\ An air ambulance provider is a covered ``air carrier'' if 
it has economic authority from the Department of Transportation to 
provide interstate air transportation. Most air ambulance providers 
have such authority under the provisions of 14 CFR part 298. See, 
e.g., Scarlett v. Air Methods Corp., 922 F.3d 1053 (10th Cir. 2019); 
Air Evac EMS v. Cheatham, 910 F.3d 751 (4th Cir. 2018).
    \37\ See, e.g., Guardian Flight LLC v. Godfread, 991 F.3d 916, 
921 (8th Cir. 2021) (holding that ADA preempted state law 
prohibiting out-of-network air ambulance providers from balance 
billing and requiring them to accept amounts paid by insurers); 
Bailey v. Rocky Mountain Holdings, LLC, 889 F.3d 1259, 1269-72 (11th 
Cir. 2018) (holding that ADA preempted state law that prohibited air 
ambulance providers from collecting more than amount specified in 
fee schedule).
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    The Departments also seek comment on whether health insurance 
issuers, health care providers, or health care facilities, in instances 
where they are not otherwise subject to a specified state law that 
provides for a method for determining the total amount payable under a 
group health plan or group or individual health insurance coverage, 
should have an opportunity, for purposes of these interim final rules, 
to opt in to a program established under state law, with respect to an 
item or service furnished by a nonparticipating provider or 
nonparticipating emergency facility. The Departments seek comment on 
whether this approach would allow for more flexibility for state laws 
to apply when, for example, by their terms, they apply to the health 
insurance issuer and item and service in question, but not to the 
provider; whether an issuer, provider, or facility would still be 
subject to any specified state laws in their ``home'' state if they opt 
in to a program established under another state's law; and whether an 
issuer, provider, or facility should be permitted to opt in on an 
episodic basis. The Departments are concerned that allowing providers 
and facilities to opt in to a program established under state law could 
increase health care prices if providers and facilities selectively opt 
in to state programs that favor providers and facilities in the 
determination of the out-of-network rate. The Departments seek comment 
on the potential impact of expanding the ability to opt in to a state 
program to providers and facilities. The Departments specifically seek 
comment from health insurance issuers, health care providers, or health 
care facilities located within or serving

[[Page 36886]]

underserved and rural communities, and other communities facing a 
shortage of providers on the impact of these provisions on services, 
coverage, and payment for and within medically underserved, rural, and 
urban communities.
a. State Law Interaction With ERISA
    Under the general preemption clause of section 514(a) of ERISA, 
state laws are preempted to the extent that they ``relate'' to employee 
benefit plans subject to title I of ERISA. There are, however, a number 
of exceptions to this broad preemption provision. Section 514(b)(2)(A), 
referred to as the ``savings clause,'' provides in pertinent part that 
``nothing in this title (title I of ERISA) shall be construed to exempt 
or relieve any person from any law of any State which regulates 
insurance. . . .'' Additionally, the preemption provisions of section 
731 of ERISA (implemented in 29 CFR 2590.731(a)) apply so that the 
requirements of part 7 of ERISA 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 issuers in 
connection with group health insurance coverage except to the extent 
that such standard or requirement prevents the application of a 
`requirement' of a federal standard.'' The conference report 
accompanying the Health Insurance Portability and Accountability Act of 
1996 (HIPAA), which applied this preemption standard to state laws with 
respect to its title I health insurance reform provisions, indicates 
that this preemption is intended to be the ``narrowest'' preemption of 
states' laws.\38\ States may therefore continue to apply state law 
requirements to issuers except to the extent they prevent the 
application of ERISA requirements. Additionally, states have 
significant latitude to impose requirements on issuers that are more 
restrictive than the federal law. State laws that impose comparable or 
additional requirements on health insurance issuers would generally 
constitute a ``specified state law'' notwithstanding section 514 of 
ERISA and would continue to apply.
---------------------------------------------------------------------------

    \38\ See House Conf. Rep. No. 104-736, at 205, reprinted in 1996 
U.S. Code Cong. & Admin. News 2018.
---------------------------------------------------------------------------

    While section 514(b)(2)(A) saves from ERISA preemption state laws 
regulating insurance, section 514(b)(2)(B) of ERISA, referred to as the 
``deemer clause,'' provides that a state law ``purporting to regulate 
insurance'' generally cannot deem an employee benefit plan to be an 
insurance company (or in the business of insurance) for the purpose of 
regulating such a plan as an insurance company (section 514(b)(6)(A) 
creates a partial exception to the deemer clause for employee welfare 
benefit plans that are also multiple employer welfare arrangements 
(MEWAs)). Thus, to the extent that a state law has a ``reference to'' 
or an impermissible connection with ERISA plans (such as laws that 
govern the payment of benefits), these laws are preempted, to the 
extent they apply to self-insured plans sponsored by private 
employers.\39\ However, section 514 of ERISA does not prevent states 
from expanding access to a state program and allowing self-insured, 
ERISA-covered plans to choose to voluntarily comply with it. For 
example, the Departments allowed such plans to comply with their 
obligations for external review under section 2719 of the PHS Act by 
voluntarily opting in to the state external review process.\40\ 
Similarly, these interim final rules allow self-insured plans 
(including non-federal governmental plans) to voluntarily opt in to 
state law that provides for a method for determining the cost-sharing 
amount or total amount payable under such a plan, where a state has 
chosen to expand access to such plans, to satisfy their obligations 
under section 9816(a)-(d) of the Code, section 716(a)-(d) of ERISA, and 
section 2799A-1(a)-(d) of the PHS Act. A group health plan that opts in 
to such a state law must do so for all items and services to which the 
state law applies. Under these interim final rules, a self-insured plan 
that has chosen to opt in to a state law must prominently display in 
its plan materials describing the coverage of out-of-network services a 
statement that the plan has opted in to a specified state law, identify 
the relevant state (or states), and include a general description of 
the items and services provided by nonparticipating facilities and 
providers that are covered by the specified state law.
---------------------------------------------------------------------------

    \39\ See Gobeille v. Liberty Mutual Ins. Co. 577 U.S. 312 
(2015); Egelhoff v. Egelhoff, 532 U.S. 141 (2001).
    \40\ See, e.g., Technical Release 2010-01; 76 FR 37208, 37211 
fn. 13 (June 24, 2011).
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b. Examples Involving Specified State Laws
    The following examples illustrate how state laws may or may not 
apply. In each example, assume there is no applicable All-Payer Model 
Agreement that would determine the recognized amount or out-of-network 
rate.
    Example 1. (i) Facts. A health insurance issuer licensed in State A 
covers a specific non-emergency service that is provided to an enrollee 
by a nonparticipating provider in a participating health care facility, 
both of which are also licensed in State A. State A has a law that 
prohibits balance billing for non-emergency services provided to 
individuals by nonparticipating providers in a participating health 
care facility, and provides for a method for determining the cost-
sharing amount and total amount payable. The state law applies to 
health insurance issuers and providers licensed in State A. The state 
law also applies to the type of service provided.
    (ii) Conclusion. In this Example 1, State A's law would apply to 
determine the recognized amount and the out-of-network rate.
    Example 2. (i) Facts. Same facts as Example 1, except that the 
nonparticipating provider and participating health care facility are 
located and licensed in State B. State A's law does not apply to the 
provider, because the provider is licensed and located in State B.
    (ii) Conclusion. In this Example 2, State A's law would not apply 
to determine the recognized amount and out-of-network rate. Instead, 
the lesser of the billed amount or QPA would apply to determine the 
recognized amount, and either an amount determined through agreement 
between the provider and issuer or an amount determined by an IDR 
entity would apply to determine the out-of-network rate.
    Example 3. (i) Facts. An individual receives emergency services at 
a nonparticipating hospital located in State A. The emergency services 
furnished include post-stabilization services, as described in 26 CFR 
54.9816-4T(c)(2)(ii), 29 CFR 2590.716-4(c)(2)(ii), and 45 CFR 
149.110(c)(2)(ii). The individual's coverage is through a health 
insurance issuer licensed in State A, and the coverage includes 
benefits with respect to services in an emergency department of a 
hospital. State A has a law that prohibits balance billing for 
emergency services provided to an individual at a nonparticipating 
hospital located in State A and provides a method for determining the 
cost-sharing amount and total amount payable in such cases. The law 
applies to issuers licensed in State A. However, State A's law has a 
definition of emergency services that does not include post-
stabilization services.
    (ii) Conclusion. In this Example 3, State A's law would apply to 
determine the cost-sharing amount and out-of-network rate for the 
emergency services, as defined under State A's law. State A's

[[Page 36887]]

law would not apply for purposes of determining the cost-sharing amount 
and out-of-network rate for the post-stabilization services. Instead, 
the lesser of the QPA or billed amount would apply to determine the 
recognized amount, and either an amount determined through agreement 
between the hospital and issuer or an amount determined by an IDR 
entity would apply to determine the out-of-network rate, with respect 
to post-stabilization services.
    Example 4. (i) Facts. A self-insured plan, subject to ERISA, covers 
a specific non-emergency service that is provided to a participant by a 
nonparticipating provider in a participating health care facility, both 
of which are licensed in State A. State A has a law that prohibits 
balance billing for non-emergency services provided to individuals by 
nonparticipating providers in a participating health care facility, and 
provides for a method for determining the cost-sharing amount and total 
amount payable. The law applies to health insurance issuers and 
providers licensed in State A, and provides that plans that are not 
otherwise subject to the law may opt in. The law also applies to the 
type of service provided. The self-insured plan has opted in.
    (ii) Conclusion. In this Example 4, State A's law would apply to 
determine the recognized amount and the out-of-network rate.
    The Departments are of the view that it would be uncommon for laws 
of more than one state to each apply to the same health insurance 
issuer, and to the same provider for a particular item or service. 
Therefore, the Departments do not foresee many instances where there 
might be a question as to which state's law applies to determine the 
recognized amount or out-of-network rate. However, in such uncommon 
scenarios, one approach might be for the states involved to make that 
decision. Another approach might be that the law enacted by the state 
in which the service is provided would apply. Yet another approach 
would be for the QPA to apply to determine the recognized amount, and 
either a negotiated amount or an amount determined by an IDR entity to 
apply to determine the out-of-network rate. The Departments seek 
comment on these and any other approaches for resolving this choice-of-
law question. The Departments also seek comment on how states have 
handled such questions prior to the enactment of the No Surprises Act, 
should these types of conflicts exist.
    The Departments are of the view that Congress intended that where 
state law provides a method for determining the total amount payable 
under a plan or coverage, the state law regarding balance billing would 
govern, rather than the alternative method for determining the out-of-
network rate under the No Surprises Act. The Departments interpret the 
statutory phrase ``a State law that provides for a method for 
determining the total amount payable under such a plan, coverage, or 
issuer, respectively'' broadly as referring not only to state laws that 
set a mathematical formula for determining the out-of-network rate, or 
that set a predetermined amount for an out-of-network item or service. 
Rather, the Departments interpret that language to also include, for 
example, state laws that require or permit a plan or issuer and a 
provider or facility to negotiate, and then to engage in a state 
arbitration process to determine the out-of-network rate. Such state 
laws provide a process for determining the total amount payable, and in 
such instances, the timeframes and processes under such a state law 
related to negotiations and arbitration would apply, as opposed to the 
timeframes and IDR process under the No Surprises Act.
    In addition, the Departments are of the view that Congress did not 
intend for the No Surprises Act to preempt provisions in state balance 
billing laws that address issues beyond how to calculate the cost-
sharing amount and out-of-network rate. To the extent state laws do not 
prevent the application of a federal requirement or prohibition on 
balance billing, the Departments are of the view that such state laws 
are consistent with the statutory framework of the No Surprises Act and 
would not be preempted.\41\ This view extends to any state law that 
provides balance billing protections beyond what these interim final 
rules provide. In fact, Congress specifically indicated that such state 
balance billing laws may continue in effect along with the balance 
billing protections set forth in the statute, by requiring in new 
section 2799B-3 of the PHS Act that providers must disclose to 
participants, beneficiaries, and enrollees information about federal 
balance billing protections, plus any other protections that apply 
under state law. A more detailed discussion of the disclosure 
requirements appears in section IV.A.3 of this preamble, which 
discusses the provisions codified in 45 CFR 149.430.
---------------------------------------------------------------------------

    \41\ Section 731(a) of ERISA and section 2724(a) of the PHS Act. 
As noted above, the HIPAA conference report indicates that this 
preemption standard is intended to be the ``narrowest'' preemption 
of states' laws. See House Conf. Rep. No. 104-736, at 205, reprinted 
in 1996 U.S. Code Cong. & Admin. News 2018.
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v. All-Payer Model Agreements
    As described earlier, in instances where an All-Payer Model 
Agreement is applicable, the recognized amount (the amount upon which 
cost sharing is based with respect to items and services furnished by 
nonparticipating emergency facilities, and nonparticipating providers 
of nonemergency items and services in participating facilities) and the 
out-of-network rate are determined using the amount that the state 
approves under the All-Payer Model Agreement for such items or 
services.
    An All-Payer Model Agreement is an agreement between the Centers 
for Medicare & Medicaid Services (CMS) and a state to test and operate 
systems of all-payer payment reform for the medical care of residents 
of the state, under the authority granted under section 1115A the 
Social Security Act. Under the terms of section 1115A of the Social 
Security Act, such Agreements may waive specific provisions of titles 
XI and XVIII and of sections 1902(a)(1), 1902(a)(13), 
1903(m)(2)(A)(iii), and 1934 (other than subsections (b)(1)(A) and 
(c)(5) of such section) as may be necessary solely for the purposes of 
testing the Model. All-Payer Model Agreements can vary significantly by 
state, including in using different approaches for approving payment 
amounts for items or services covered by the Agreements. The 
Departments are of the view that it is important to maximally preserve 
states' abilities to test all-payer payment reform through these 
Agreements, including their abilities to do so using varied approaches 
to setting payment amounts. These interim final rules defer to the 
state to determine the circumstances under which, and how, it will 
approve an amount for an item or service under a payment system 
established by an All-Payer Model Agreement. Participating in an all-
payer model governed by an All-Payer Model Agreement may be voluntary 
or mandatory for a given payer; the system of all-payer payment reform 
may apply statewide or only in certain regions, such as rural regions; 
and payments under the system of all-payer payment reform may apply 
only to certain providers or facilities and certain items and 
services.\42\ To account

[[Page 36888]]

for potential variations among All-Payer Model Agreements, the 
Departments are proposing to take a similar approach that these interim 
final rules establish with respect to state laws. Specifically, in 
order for an All-Payer Model Agreement to determine the recognized 
amount or out-of-network rate, any such Agreement must apply to the 
coverage involved; to the nonparticipating provider or nonparticipating 
emergency facility involved (and in the case of the out-of-network 
rate, to the nonparticipating provider of air ambulance services 
involved); and to the item or service involved. In instances where an 
All-Payer Model Agreement does not satisfy all of these criteria, the 
Agreement does not apply to determine the recognized amount or out-of-
network rate, and, unless a specified state law applies, the recognized 
amount would be determined by the QPA (or the billed charge if less 
than the QPA), and the out-of-network rate would be the amount 
determined through agreement between the provider or facility and plan 
or issuer or the IDR process.
---------------------------------------------------------------------------

    \42\ See, e.g., CMS. Vermont All-Payer ACO Model, (updated Apr. 
8, 2020) available at https://innovation.cms.gov/innovation-models/vermont-all-payer-aco-model; CMS. Pennsylvania Rural Health Model, 
(updated Jan. 1, 2021) available at https://innovation.cms.gov/innovation-models/pa-rural-health-model; CMS. Maryland Total Cost of 
Care Model available at https://innovation.cms.gov/innovation-models/md-tccm.
---------------------------------------------------------------------------

    Under these interim final rules, an All-Payer Model Agreement is 
treated as applicable to a given provider or facility and plan or 
issuer if the terms of the Agreement, or any agreements described in 
that Agreement, are binding upon the provider, facility, plan, or 
issuer, which may occur through different mechanisms. For example, 
under the All-Payer Model Agreement for the Maryland Total Cost of Care 
Model and under the Maryland state all-payer law, all payers (including 
group health plans and health insurance issuers offering group or 
individual health insurance coverage) pay the amount determined under 
the Agreement with respect to hospital services covered by the 
Agreement.\43\ However, the Agreement generally does not apply to the 
amount paid to a provider, such as a physician, who furnishes services 
at a hospital. In Maryland, therefore, the recognized amount and out-
of-network rate would be set by the All-Payer Model Agreement for all 
plans and issuers for hospital charges covered under the Agreement. 
But, the All-Payer Model Agreement would generally not be used to set 
the recognized amount or out-of-network rate with respect to a 
nonparticipating provider's charges, unless the All-Payer Model 
Agreement, or any agreements described in that Agreement, specify the 
payment amount in a particular instance.
---------------------------------------------------------------------------

    \43\ See CMS. Maryland Total Cost of Care Model, (updated Oct. 
22, 2020) available at https://innovation.cms.gov/innovation-models/md-tccm. Under Maryland law, hospitals regulated by the Maryland 
Health Services Cost Review Commission (HSCRC) must charge payers 
the rates set the by HSCRC, and payers, including group health plans 
and issuers offering individual or group health insurance, must pay 
the rates set by HSCRC. Maryland Code, Health-General Article 
Sec. Sec.  19-212 and 19-219(a)(3) and (b)(2)(i) and Maryland Code, 
Insurance Article Sec.  15-604.
---------------------------------------------------------------------------

    Although under state law plans and issuers in Maryland do not have 
discretion regarding whether to participate in the all-payer rate 
setting system under the Maryland Total Cost of Care Model, 
participation in other state-based models governed by All-Payer Model 
Agreements is voluntary. For example, under the All-Payer Model 
Agreement for the Vermont All-Payer Accountable Care Organization (ACO) 
Model, participation by providers, facilities, group health plans, and 
health insurance issuers is voluntary.\44\ To the extent that both the 
provider or facility and plan or issuer has opted to participate in the 
Vermont All-Payer ACO Model and the Vermont All-Payer Model Agreement, 
or an agreement described in that Agreement, applies to a specific item 
or service, then that All-Payer Model Agreement would determine the 
recognized amount and out-of-network rate. But, for example, if a plan 
has opted to participate, but the provider furnishing the service has 
not, then the All-Payer Model Agreement would not be used to determine 
either the recognized amount or out-of-network rate. Instead, if a 
state law is applicable, the state law would apply. If no state law is 
applicable, then the recognized amount would be determined using the 
QPA,\45\ and the out-of-network rate would be the amount agreed upon by 
the parties or determined through the IDR process established in the No 
Surprises Act, as discussed further elsewhere in this preamble.
---------------------------------------------------------------------------

    \44\ https://innovation.cms.gov/innovation-models/vermont-all-payer-aco-model.
    \45\ See prior explanation regarding the requirement that when 
the surprise billing protections apply, in the event the billed 
charge is less than the recognized amount, cost sharing would be 
based on the billed charge.
---------------------------------------------------------------------------

vi. Methodology for Calculating the Qualifying Payment Amount
    The No Surprises Act directs the Departments to establish through 
rulemaking the methodology that a group health plan or health insurance 
issuer offering group or individual health insurance coverage must use 
to determine the qualifying payment amount (QPA). As discussed earlier 
in this preamble, the No Surprises Act and these interim final rules 
require cost-sharing requirements imposed by plans and issuers in 
connection with emergency services furnished by a nonparticipating 
emergency facility or nonparticipating provider, or in connection with 
non-emergency services performed by nonparticipating providers at 
certain participating facilities to be based on the lesser of the 
billed charge or the QPA where an All-Payer Model Agreement under 
section 1115A of the Social Security Act or a specified state law does 
not apply. In addition, IDR entities are directed by statute to 
consider the QPA when selecting between the offer submitted by a plan 
or issuer and the offer submitted by a facility or provider in order to 
determine the total payment for emergency services furnished by a 
nonparticipating emergency facility or nonparticipating provider, or 
non-emergency services performed by nonparticipating providers at 
certain participating facilities that are items and services subject to 
the IDR process.
    In general, under section 9816(a)(3)(E) of the Code, section 
716(a)(3)(E) of ERISA, and section 2799A-1(a)(3)(E) of the PHS Act, for 
a given item or service, the QPA is the median of the contracted rates 
recognized by the plan or issuer on January 31, 2019, for the same or 
similar item or service that is provided by a provider in the same or 
similar specialty and provided in a geographic region in which the item 
or service is furnished, increased for inflation. The median contracted 
rate is determined with respect to all group health plans of the plan 
sponsor or all group or individual health insurance coverage offered by 
the health insurance issuer that are offered in the same insurance 
market, consistent with the methodology established by the Departments.
    The No Surprises Act specifies an alternative methodology for 
determining the QPA in cases where a plan or issuer has insufficient 
information to calculate a median contracted rate for an item or 
service. The statute, however, envisions that these alternative 
methodologies, such as use of a third-party database, will be used in 
only limited circumstances where the plan or issuer cannot rely on its 
contracted rates as a reflection of the market dynamics in a geographic 
region. Consistent with this statutory goal, these interim final rules 
generally seek to ensure that plans and issuers can meet the 
sufficient-information standard when determining the QPA and that use 
of alternative methodologies is minimized wherever possible.
    The Departments seek comment on all aspects of the methodology 
established

[[Page 36889]]

in these interim final rules for determining the QPA. In particular, 
the Departments seek comment on whether there are any considerations or 
factors that are not sufficiently accounted for in the methodology 
established in these interim final rules; the impact of the methodology 
on cost sharing, payment amounts, and provider network participation; 
and whether there are areas where commenters believe additional 
rulemaking or guidance is necessary. The Departments also seek comment 
as to the impact of large consolidated health care systems on 
contracted rates, and the impact of such contracted rates on prices and 
the QPA. The Departments are concerned that the contracting practices 
of such health care systems could inflate the QPA, and seek comment on 
whether adjustments to the QPA methodology are needed.
a. Median Contracted Rate
    These interim final rules establish the methodology that plans and 
issuers must use to calculate the median of contracted rates. The plan 
or issuer will generally then apply an inflation adjustment to 
determine the QPA for items and services furnished in the relevant 
year.
    In general, the median contracted rate for an item or service is 
calculated by arranging in order from least to greatest the contracted 
rates of all plans of the plan sponsor (or of the administering entity, 
if applicable) or all coverage offered by the issuer in the same 
insurance market for the same or similar item or service that is 
provided by a provider in the same or similar specialty or facility of 
the same or similar facility type and provided in the geographic region 
in which the item or service is furnished, and selecting the middle 
number. These interim final rules define each of the relevant terms, as 
discussed in more detail in this section of the preamble.
    In determining the median contracted rate, the amount negotiated 
under each contract is treated as a separate amount. For example, 
assume the contracted rates for all plans of a sponsor in the same 
insurance market for a particular item or service provided by a 
provider in the same or similar specialty in a specified geographic 
region are $475, $490, and $510. The median contracted rate for this 
service is $490. If there are an even number of contracted rates, the 
median contracted rate is the average of the middle two contracted 
rates. If, in the previous example, there were a fourth contracted rate 
in the amount of $515, the median contracted rate would be the average 
of the two middle amounts ($490 and $510), or $500 (($490+$510)2). If 
the same amount is paid under two or more separate contracts, each 
contract is counted separately. Thus, in the previous example, if there 
were a fifth contracted rate also in the amount of $515, the median 
contracted rate would be $510, since there are two contracted rates 
below that amount ($475 and $490) and two contracted rates above that 
amount ($515 and $515).
Contracted Rate
    The interim final rules define a ``contracted rate'' as the total 
amount (including cost sharing) that a group health plan or health 
insurance issuer has contractually agreed to pay a participating 
provider, facility, or provider of air ambulance services for covered 
items and services, whether directly or indirectly, including through a 
third-party administrator or pharmacy benefit manager.\46\
---------------------------------------------------------------------------

    \46\ This definition is substantially similar to the definition 
of ``negotiated rate'' used for purposes of the transparency in 
coverage regulations at 26 CFR 54.9815-2715A1(a)(2)(xvi), 29 CFR 
2590.715-2715A1(a)(2)(xvi), and 45 CFR 147.210(a)(2)(xvi).
---------------------------------------------------------------------------

    The No Surprises Act envisions that each contracted rate for a 
given item or service be treated as a single data point when 
calculating a median contracted rate. Therefore, if a plan or issuer 
has a contract with a provider group or facility, the rate negotiated 
with that provider group or facility under the contract is treated as a 
single contracted rate, if the same rate applies to all providers of 
such provider group or facility under the single contract. Likewise, 
the rate negotiated under a contract constitutes a single contracted 
rate regardless of the number of claims paid at that contracted rate. 
However, if a plan or issuer has a contract with multiple providers, 
with separate negotiated rates with each particular provider for a 
given item or service, each unique contracted rate constitutes a single 
contracted rate for purposes of determining the median contracted 
rate.\47\ Further, if a plan or issuer has separate contracts with 
individual providers, the contracted rate under each such contract 
constitutes a single contracted rate (even if the same amount is paid 
to other providers under separate contracts).
---------------------------------------------------------------------------

    \47\ If a plan or issuer has a contract with multiple providers, 
with separate negotiated rates with several subgroups of providers, 
each unique contracted rate will generally constitute a single 
contracted rate for purposes of determining the median contracted 
rate. However, as discussed later in this section of the preamble, 
these interim final rules specify that if a plan or issuer has 
contracted rates that vary based on provider specialty for a service 
code, the median contracted rate is calculated separately for each 
provider specialty, as applicable. In such cases, the QPA for the 
particular item or service would take into account only the 
contracted rates for the applicable provider specialty, and would 
disregard other unique contracted rates under the same contract.
---------------------------------------------------------------------------

    The Departments understand that some plans or issuers may rent 
provider networks or otherwise contract with third parties to manage 
provider networks. In these situations, contracted rates between 
providers and the entity responsible for managing the provider network 
on behalf of a plan or issuer would be treated as the plan's or 
issuer's contracted rates for purposes of calculating the QPA. The 
Departments seek comment on whether additional guidance or special 
rules are needed regarding how to define a contract in this situation.
    The Departments also understand that plans and issuers sometimes 
enter into special agreements with providers and facilities that 
generally are not otherwise contracted to participate in any of the 
networks of the plan or issuer. For example, a plan or issuer may 
negotiate an ad hoc arrangement with a nonparticipating provider or 
facility to supplement the network of the plan or coverage for a 
specific participant, beneficiary, or enrollee in unique circumstances. 
These interim final rules specify that solely for purposes of the 
definition of contracted rate, a single case agreement, letter of 
agreement, or other similar arrangement between a plan or issuer and a 
provider, facility, or provider of air ambulance services does not 
constitute a contract, and the rate paid under such an agreement should 
not be counted among the plan's or issuer's contracted rates. The term 
``contracted rate'' refers only to the rate negotiated with providers 
and facilities that are contracted to participate in any of the 
networks of the plan or issuer under generally applicable terms of the 
plan or coverage and excludes rates negotiated with other providers and 
facilities. The Departments are of the view that this definition most 
closely aligns with the statutory intent of ensuring that the QPA 
reflects market rates under typical contract negotiations.\48\
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    \48\ In contrast, as discussed earlier in this preamble, these 
interim final rules specify that a single case agreement constitutes 
a contractual relationship for purposes of the definition of 
participating health care facility and participating emergency 
facility. The Departments are of the view that it is reasonable that 
an individual would expect items and services delivered at a health 
care facility that has a single case agreement in place with respect 
to the individual's care to be delivered on an in-network basis, and 
therefore, that the balance billing protections should apply.
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Insurance Market
    In calculating the median contracted rate for a given item or 
service, the plan

[[Page 36890]]

or issuer must take into account the contracted rates under all group 
health plans of the sponsor or all group or individual health insurance 
coverage offered by the issuer that are offered in the same insurance 
market.\49\ The term ``insurance market'' for purposes of these interim 
final rules means one of the following: The individual market, small 
group market, or large group market (each as defined under section 
2791(e) of the PHS Act). The relevant insurance market is determined 
irrespective of the state. For example, in calculating the QPA for an 
item or service furnished to an enrollee in individual health insurance 
coverage, an issuer must take into account the contracted rates with 
providers or facilities in the applicable geographic region across the 
issuer's individual market offerings, inclusive of contracted rates for 
all individual health insurance coverage offered by the issuer in all 
states in which the issuer offers coverage in the individual market.
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    \49\ The term ``health insurance issuer'' has the meaning given 
the term in section 2791(b) of the PHS Act, which, in relevant part, 
defines a health insurance issuer as an entity that is licensed to 
engage in the business of insurance in a state. Thus, an issuer is 
the licensed entity and the contracted rates of separate licensees 
under the same holding company are not taken into account.
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    With respect to self-insured group health plans, these interim 
final rules define the term ``insurance market'' to mean all self-
insured group health plans (other than account-based plans and plans 
that consist solely of excepted benefits) of the plan sponsor, or at 
the option of the plan sponsor, all self-insured group health plans 
administered by the same entity (including a third-party administrator 
contracted by the plan), to the extent otherwise permitted by law, that 
is responsible for calculating the QPA on behalf of the plan. The 
Departments understand that many self-insured group health plans are 
administered by entities other than the plan sponsor (such as a third-
party administrator contracted by the plan) that would be responsible 
for calculating the QPA on behalf of the sponsor. To reduce the burden 
imposed on sponsors of self-insured group health plans, these interim 
final rules permit sponsors of self-insured group health plans to allow 
their third-party administrators to determine the QPA for the sponsor 
by calculating the median contracted rate using the contracted rates 
recognized by all self-insured group health plans administered by the 
third-party administrator (not only those of the particular plan 
sponsor). Under this approach, the Departments anticipate there will be 
fewer instances where a self-insured group health plan sponsor will 
lack sufficient information to calculate a median contracted rate for 
an item or service.
    The Departments seek comment on the definition of insurance market 
with respect to self-insured group health plans and whether any 
contractual or other issues may prevent an entity, such as a third-
party administrator, from using contracted rates from the different 
self-insured plans it administers to calculate the QPA for a particular 
self-insured group health plan. DOL also seeks comment on the ability 
of self-insured group health plan fiduciaries to monitor the 
calculation of the QPA by the administering entities for compliance 
with the applicable requirements (for example, by ensuring the entities 
are using the correct contracted rates).
    The Departments have determined that including rates negotiated 
under other more limited forms of coverage, such as excepted benefits, 
short-term, limited-duration insurance, and account-based plans, 
including health reimbursement arrangements, could skew the calculation 
of the median contracted rate, and these forms of coverage should not 
be included in the definition of the applicable insurance market. 
Furthermore, the definition of ``qualifying payment amount'' under 
section 2799A-1(a)(3)(E)(i)(I) of the PHS Act refers to individual 
health insurance coverage, and the term individual health insurance 
coverage, as defined under section 2791(b)(5) of the PHS Act, excludes 
short-term, limited-duration insurance.\50\ Therefore, under these 
interim final rules, when referring to coverage offered by an issuer 
within the same insurance market for purposes of determining the QPA, 
the individual market excludes short-term, limited-duration insurance 
(as defined in 26 CFR 54.9801-2, 29 CFR 2590.701-2, and 45 CFR 
144.103). In addition, under these interim final rules, all markets 
exclude coverage that consists solely of excepted benefits (as 
described in section 9832 of the Code, section 733 of ERISA, and 
section 2791 of the PHS Act). While excepted benefits can be offered in 
the individual or group markets, they are exempt from the federal 
insurance market reforms,\51\ and Congress amended the statutory 
exemption for these products to include the additional coverage 
provisions established under new Part D of title XXVII of the PHS 
Act.\52\ Account-based plans, including health reimbursement 
arrangements as described in 26 CFR 54.9815-2711(d)(6)(i), 29 CFR 
2590.715-2711(d)(6)(i), and 45 CFR 147.126(d)(6)(i), make 
reimbursements subject to a maximum fixed dollar amount for a period, 
such that the benefit design of these coverage options makes concepts 
related to surprise billing and choice of health care professionals 
inapplicable. Therefore, under these interim final rules, for purposes 
of calculating the QPA, all group markets similarly exclude coverage 
provided under account-based plans.
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    \50\ Since short-term, limited duration insurance is not 
individual health insurance coverage, it is also generally not 
subject to the federal individual market reforms. See, e.g., 81 FR 
75316 at 75317 (Oct. 31, 2016) and 83 FR 38212 at 38213 (Aug. 3, 
2018).
    \51\ Section 9831 of the Code, section 732 of ERISA, and 
sections 2722 and 2763 of the PHS Act.
    \52\ These amendments add the phrase ``and Part D'' to section 
2722(b), (c)(1), (c)(2), and (c)(3) of the PHS Act.
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    The Departments also clarify that any plan or coverage that is not 
a ``group health plan'' or ``group or individual health insurance 
coverage'' offered by a ``health insurance issuer,'' as those terms are 
defined in the Code, ERISA, and the PHS Act, such as a Medicare 
Advantage or Medicaid managed care organization plan, must also not be 
included in any insurance market for purposes of determining the QPA. 
This approach is consistent with the statutory requirement that the 
median contracted rate is determined with respect to all ``group health 
plans'' of the sponsor or all ``group or individual health insurance 
coverage'' offered by a health insurance issuer in the same insurance 
market.
Same or Similar Item or Service
    Section 9816(a)(3)(E) of the Code, section 716(a)(3)(E) of ERISA, 
section 2799A-1(a)(3)(E) of the PHS Act, and these interim final rules 
provide that a plan or issuer must calculate the median contracted rate 
for an item or service using contracted rates for the same or similar 
item or service. Under the interim final rules, the term ``same or 
similar item or service'' means a health care item or service billed 
under the same service code, or a comparable code under a different 
procedural code system. Service code means the code that describes an 
item or service, including a Current Procedural Terminology (CPT), 
Healthcare Common Procedure Coding System (HCPCS), or Diagnosis-Related 
Group (DRG) code. A service code is a unique identifier, typically 
consisting of a string of numeric digits or alphanumeric characters, 
that corresponds to a standardized description, which is used

[[Page 36891]]

to identify with specificity the item or service that was furnished to 
a patient. Different codes may be assigned to the same general service 
on the basis of certain variations in the provider's method or 
approach, the complexity of the procedure or medical decision-making, 
and patient acuity level. Payers, providers, and facilities understand 
these service codes and commonly use them for billing and paying claims 
(including for both individual items and services, and for items and 
services provided under a bundled payment arrangement). Thus, defining 
``same or similar item or service'' by service code will make it easier 
for plans and issuers to calculate the QPA, and for providers and 
facilities to understand the QPA.
    These interim final rules include specific requirements to account 
for modifiers (when applicable), which are codes applied to the service 
code that provide a more specific description of the furnished item or 
service and that may adjust the payment rate or affect the processing 
or payment of the code billed. For example, modifiers include hospital 
revenue codes, which indicate the department or place in the hospital 
in which a procedure or treatment is performed, as well as codes 
indicating whether services or procedures were performed by certain 
types of providers, such as physician assistants, nurse practitioners, 
certified registered nurse anesthetists, or assistant surgeons. In 
addition, modifiers can be used to indicate that the work required to 
provide a service in a particular instance was significantly greater--
or significantly less--than the service typically requires. The 
Departments are of the view that it is important that the QPA 
methodology account for modifiers that affect payment rates under 
contracts with participating providers and facilities.
    Under the methodology established in these interim final rules, 
plans and issuers must calculate separate median contracted rates for 
CPT code modifiers that distinguish the professional services component 
(``26'') from the technical component (``TC''). This will result in 
separate median contracted rates being calculated for services when 
billed by a facility versus a provider. In addition, where a plan's or 
issuer's contracted rates otherwise vary based on applying a modifier 
code, the plan or issuer must calculate a separate median contracted 
rate for each such service code-modifier combination. Modifiers that do 
not cause contracted rates to vary must not be taken into account when 
calculating the median contracted rate. These rules are intended to 
ensure that if a plan or issuer adjusts contracted rates with 
participating providers and facilities based on modifier codes, those 
payment adjustments are appropriately reflected in the median 
contracted rate.
Provider in the Same or Similar Specialty
    These interim final rules specify that if a plan or issuer has 
contracted rates for a service code that vary based on provider 
specialty, the median contracted rate is calculated separately for each 
provider specialty, as applicable. These interim final rules define 
``provider in the same or similar specialty'' as the practice specialty 
of a provider, as identified by the plan or issuer consistent with the 
plan's or issuer's usual business practice. This definition is intended 
to provide plans or issuers with the flexibility necessary to calculate 
the median contracted rate, relying on their contracting practices with 
participating providers. If a plan's or issuer's usual business 
practice for identifying a provider's practice specialty differs for 
contracting purposes and other business needs, the plan or issuer 
should use the method of identifying the practice specialty that it 
uses for contracting purposes.
    The Departments considered requiring a plan or issuer to calculate 
separate median contracted rates for every provider specialty, but 
concluded that this approach would lead to more instances in which the 
plan or issuer would not have sufficient information to calculate the 
QPAs using its contracted rates. In addition, the Departments 
understand that not all plans or issuers vary contracted rates by 
provider specialty, in which case requiring plans and issuers to 
calculate separate median contracted rates for each provider specialty 
would increase the burden associated with calculating the QPA without 
adding specificity to the QPA. Given that the No Surprises Act 
generally relies on using contracted rates to determine the QPA, the 
Departments conclude that plans and issuers should be required to 
calculate median contracted rates separately by provider specialty only 
where the plan or issuer otherwise varies its contracted rates based on 
provider specialty.
    With respect to air ambulance services, all providers of air 
ambulance services (including inter-facility transports) are considered 
to be a single provider specialty for purposes of these interim final 
rules. The Departments understand that contracted rates may vary 
depending on whether the air ambulance services are provided using a 
fixed-wing or rotary-wing aircraft. However, these distinctions based 
on vehicle type are accounted for in the QPA methodology established 
under these interim final rules through the use of service codes that 
are specific to fixed-wing or rotary-wing aircraft. Therefore, the 
Departments anticipate that median contracted rates for fixed-wing and 
rotary-wing aircraft would be determined separately based on the 
requirement under these interim final rules that median contracted 
rates be based on the contracted rates for the same or similar item or 
service, and concluded that it would be redundant to require plans and 
issuers to also calculate separate median contracted rates on the basis 
of vehicle type.
    The Departments also understand that hospital-based air ambulance 
providers sometimes have lower contracted rates than independent, non-
hospital-based air ambulance providers. The Departments, however, are 
of the view that because participants, beneficiaries, and enrollees 
frequently do not have the ability to choose their air ambulance 
provider, they should not be required to pay higher cost-sharing 
amounts (such as coinsurance or a deductible) solely because the air 
ambulance provider assigned to them has negotiated higher contracted 
rates in order to cover its higher costs, or because it has a different 
revenue model, than other types of air ambulance providers. This 
approach is consistent with the approach these interim final rules take 
with respect to facilities, discussed in the following section of this 
preamble, which also generally does not provide for separate median 
contracted rates to be calculated based on characteristics of a 
particular facility. The Departments have concluded that this 
interpretation is consistent with the statute's intent to protect 
individuals from surprise medical bills.
Facility of the Same or Similar Facility Type
    If a plan or issuer has contracted rates for emergency services 
that vary based on the type of facility (that is, whether a facility is 
an emergency department of a hospital or an independent freestanding 
emergency department), the median contracted rate is calculated 
separately for each such facility type. Plans and issuers subject to 
the protections in the No Surprises Act are required to cover emergency 
services at both types of facilities. However, the Departments are 
aware that plans and issuers have not typically contracted with 
independent freestanding emergency departments, which may be a 
reflection of independent freestanding emergency departments' 
historical ability (prior to the enactment of the No Surprises Act) to 
charge higher rates for

[[Page 36892]]

services furnished on an out-of-network basis, and to balance bill 
enrollees when the charges were denied in part or in full.\53\ The 
Departments are also aware that there may be appreciable differences in 
the case-mix and level of patient acuity between these types of 
facilities.\54\ Therefore, where a plan or issuer has established 
contracts with both hospital emergency departments and independent 
freestanding emergency departments, and its contracts vary the payment 
rate based on the facility type, the median contracted rate is to be 
calculated separately for each facility type. The Departments are of 
the view that this approach will maintain the ability of plans and 
issuers to develop QPAs that are appropriate to the different types of 
emergency facilities specified by statute. The Departments seek comment 
on this approach, and whether it would be more appropriate for plans 
and issuers to always calculate separate QPAs for hospital emergency 
departments and independent freestanding emergency departments 
regardless of whether the plan or issuer varies the payment rate based 
on facility type, or whether a plan or issuer should never calculate 
separate QPAs for hospital emergency departments and independent 
freestanding emergency departments.
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    \53\ See Medicare Payment Advisory Commission, Report to the 
Congress: Medicare and the Health Care Delivery System, ch. 8, 
Stand-alone Emergency Departments, June 2017, available at http://www.medpac.gov/docs/default-source/reports/jun17_ch8.pdf (last 
visited June 19, 2021).
    \54\ See id.
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    However, these interim final rules do not allow plans or issuers to 
separately calculate a median contracted rate based on other 
characteristics of facilities that might cause contracted rates to 
vary, such as whether a hospital is an academic medical center or 
teaching hospital. Given that participants, beneficiaries, and 
enrollees with emergency medical conditions typically go (or are taken) 
to the nearest or most convenient emergency department, the Departments 
are of the view that, individuals generally should not be required to 
pay higher cost sharing (such as coinsurance or a deductible) based on 
features of the emergency facility that may have a bearing on its 
contracted rate with plans and issuers, but which are unrelated or 
incidental to the facility's role as a provider of emergency services.
Geographic Regions
    Under the No Surprises Act, plans and issuers must calculate the 
median contracted rate for an item or service using contracted rates 
for the same or similar item or service provided in the geographic 
region in which the item or service is furnished. The No Surprises Act 
directs the Departments, in consultation with the National Association 
of Insurance Commissioners (NAIC), to establish through rulemaking the 
geographic regions to be applied when determining the QPA, taking into 
account access to items and services in rural and underserved areas, 
including health professional shortage areas, as defined in section 332 
of the PHS Act.\55\
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    \55\ Under section 332 of the PHS Act, a health professional 
shortage area is (A) an area in an urban or rural area (which need 
not conform to the geographic boundaries of a political subdivision 
and which is a rational area for the delivery of health services) 
which the Secretary of HHS determines has a health manpower shortage 
and which is not reasonably accessible to an adequately served area, 
(B) a population group which the Secretary determines has such a 
shortage, or (C) a public or nonprofit private medical facility or 
other public facility which the Secretary determines has such a 
shortage. All Federally qualified health centers and rural health 
clinics, as defined in section 1861(aa) of the Social Security Act 
(42 U.S.C. 1395x(aa)), that meet the requirements of section 254g of 
title 42 shall be automatically designated as having such a 
shortage.
---------------------------------------------------------------------------

    In consulting on the geographic regions to be applied under the No 
Surprises Act, the NAIC recommended that geographic regions correspond 
to the applicable rating area used for purposes of the individual 
market and small group market rating rules under section 2701 of the 
PHS Act, implemented at 45 CFR 147.102, while allowing states the 
flexibility to establish alternative geographic regions. However, some 
states define rating area by county, resulting in large numbers of 
rating areas in a state, some of which might include very few, if any, 
facilities and providers. Therefore, adopting the rating area 
definitions as the standard for geographic regions could lead to a 
large number of geographic regions for which a plan or issuer would 
have to calculate separate median contracted rates, a large number of 
geographic regions without sufficient information, as well as a large 
number of geographic regions in which the median contracted rate is 
influenced by outliers.
    After consultation with the NAIC, the Departments are establishing 
geographic regions under these interim final rules that reflect 
differences in health care costs based on whether care is provided in 
urban or rural areas. The Departments are of the view that these 
geographic regions take into account access to items and services in 
rural and underserved areas, including health professional shortage 
areas, as defined at section 332 of the PHS Act. The Departments intend 
to monitor the effect of these geographic regions and periodically 
update such regions, as appropriate, taking into account the findings 
of the report submitted under section 109(a) of the No Surprises Act, 
which addresses, among other things, access to health care items and 
services in rural areas and health professional shortage areas.
    In defining ``geographic regions,'' the Departments have sought not 
only to minimize instances in which a plan or issuer lacks sufficient 
information to calculate the median of contracted rates in any 
particular geographic region, but also to limit the instances in which 
a plan or issuer has only the minimum amount of information to meet the 
sufficient information standard, as discussed later in this preamble. 
Using larger geographic regions, for which plans and issuers are likely 
to have more information, is expected to reduce the likelihood that the 
median of contracted rates would be skewed by contracts under which the 
parties have agreed to particularly high or low payment amounts.
    Under these interim final rules, for items and services other than 
air ambulance services, a geographic region is generally defined as one 
region for each metropolitan statistical area (MSA) in a state and one 
region consisting of all other portions of the state. The delineations 
for MSAs are described by the U.S. Office of Management and Budget 
(OMB) and published by the U.S. Census Bureau.\56\ MSAs encompass at 
least one urbanized area with a population of 50,000 or more people, 
plus adjacent territory that has a high degree of social and economic 
integration with the core as measured by commuting ties. MSAs are 
always established along county boundaries, but may include counties 
from more than one state. Under this definition, MSAs that cross state 
boundaries are divided between the respective states, with all the 
counties in a particular MSA in each state counted as a geographic 
region.
---------------------------------------------------------------------------

    \56\ OMB Bulletin No. 20-01. ``Revised Delineations of 
Metropolitan Statistical Areas, Micropolitan Statistical Areas, and 
Combined Statistical Areas, and Guidance on Uses of the Delineations 
of These Areas'' (Mar. 6, 2020), available at https://www.whitehouse.gov/wp-content/uploads/2020/03/Bulletin-20-01.pdf. 
U.S. Census Bureau, Delineation Files, available at https://www.census.gov/geographies/reference-files/time-series/demo/metro-micro/delineation-files.html.
---------------------------------------------------------------------------

    However, under this definition, if a plan or issuer does not have 
sufficient information to calculate the median of contracted rates for 
an item or service provided in an MSA, the plan or issuer must consider 
all MSAs in the state to be a single region when calculating the median 
of contracted rates for the item

[[Page 36893]]

or service provided in that MSA. In such cases, all MSAs in the state 
will constitute one geographic region, and all other portions of the 
state will continue to constitute a different region. If after applying 
these broader regions, a plan or issuer continues to have insufficient 
information to calculate the median of contracted rates, geographic 
regions will be based on Census divisions, with one region consisting 
of all MSAs in the Census division, and one region consisting of all 
other portions of the Census division. There are nine Census divisions, 
as published by the U.S. Census Bureau.\57\ This approach will help to 
reduce instances in which a plan or issuer cannot rely on its own 
contracted rates to determine the QPA in cases where the plan or issuer 
is not limited to operating within a single state but instead has 
provider contracts in a multi-state region.
---------------------------------------------------------------------------

    \57\ U.S. Department of Commerce Economics and Statistics 
Administration, U.S. Census Bureau, available at https://www2.census.gov/geo/pdfs/maps-data/maps/reference/us_regdiv.pdf.
---------------------------------------------------------------------------

    These interim final rules establish alternate geographic regions 
with respect to air ambulance services. Given the nature of air 
ambulance services, the infrequency with which they are provided 
relative to the other types of items and services subject to the No 
Surprises Act, and the lower prevalence of participating providers of 
air ambulance services, the Departments have determined not to apply a 
definition of geographic regions based on MSAs, as narrow regions would 
result in more instances of insufficient information.
    Thus, for air ambulance services, a geographic region means one 
region consisting of all MSAs in the state, and one region consisting 
of all other portions of the state. If a plan or issuer does not have 
sufficient information to calculate the median of the contracted rates 
for an air ambulance service using that definition of a geographic 
region, these interim final rules apply broader regions based on Census 
divisions--that is, one region consisting of all MSAs in each Census 
division and one region consisting of all other portions of the Census 
division. Because air ambulance services can be furnished over large 
distances, these interim final rules provide that the geographic region 
to be applied for air ambulance services is determined based on the 
point of pick-up, meaning the location of the individual at the time 
the individual is placed on board the air ambulance. This approach is 
generally consistent with prevailing market practices among both 
private and public payers.
Non-Fee-for-Service Contractual Arrangements
    The No Surprises Act provides that rulemaking to establish the 
methodology used to determine the QPA must take into account payments 
that are made by a plan or issuer that are not on a fee-for-service 
basis. The Departments are aware that many types of alternative 
reimbursement models exist that are not standard fee-for-service 
arrangements. For example, under a bundled payment arrangement, plans 
and issuers may reimburse a provider for multiple items and services 
under a single billing code. Other payers have capitation arrangements, 
under which a provider or panel of providers is paid a fixed amount per 
member per month.
    The Departments understand that when a plan or issuer has a fully- 
or partially-capitated payment arrangement, the plan or issuer also 
typically has an internal methodology used to value claims for those 
payments made on a capitated basis. For example, a plan or issuer with 
capitation arrangements may have an underlying fee schedule that is 
used to calculate an individual's cost sharing. The Departments are of 
the view that, when a plan or issuer has an underlying fee schedule 
used to determine cost sharing under non-fee-for-service contracts, it 
is reasonable for the plan or issuer to use the same methodology to 
assign a value to the item or service for purposes of determining the 
QPA. This approach is used by plans and issuers in other similar 
contexts, including when providing data for the risk adjustment program 
\58\ and when making publicly available in-network rates under the 
transparency in coverage regulations.\59\
---------------------------------------------------------------------------

    \58\ See 45 CFR 153.710(c) (requiring an issuer of a risk 
adjustment covered plan or a reinsurance-eligible plan in a state in 
which HHS is operating the risk adjustment or reinsurance program, 
as applicable, that does not generate individual enrollee claims in 
the normal course of business to derive the costs of all applicable 
provider encounters using its principal internal methodology for 
purposes of pricing those encounters).
    \59\ See 26 CFR 54.9815-2715A3(b)(1)(C); 29 CFR 2590.715-
2715A3(b)(1)(C); 45 CFR 147.212(b)(1)(C) (requiring plans and 
issuers that use underlying fee schedule rates for calculating cost 
sharing to make publicly available on an internet website the 
underlying fee schedule rates for all covered items and services).
---------------------------------------------------------------------------

    Therefore, in the case of these alternative payment models, such as 
bundled and fully or partially capitated arrangements, where payment 
made by a plan or issuer is not fully on a fee-for-service basis, these 
interim final rules provide that the plan or issuer must calculate a 
median contracted rate for each item or service using the underlying 
fee schedule rates for the relevant items and services, if underlying 
fee schedule rates are available. The term ``underlying fee schedule 
rate'' means the rate for a covered item or service from a particular 
participating provider, providers, or facility that a group health plan 
or health insurance issuer uses to determine a participant's, 
beneficiary's, or enrollee's cost-sharing liability for the item or 
service, when that rate is different from the contracted rate.\60\ If 
there is no underlying fee schedule rate for an item or service, these 
interim final rules provide that the plan or issuer must calculate the 
median contracted rate using a derived amount, which, consistent with 
the definition in the transparency in coverage regulations, is the 
price that a plan or issuer assigns an item or service for the purpose 
of internal accounting, reconciliation with providers, or for the 
purpose of submitting data in accordance with the requirements of 45 
CFR 153.710(c).
---------------------------------------------------------------------------

    \60\ This definition is substantially similar to the definition 
of ``underlying fee schedule rate'' in the transparency in coverage 
regulations at 26 CFR 54.9815-2715A1(a)(2)(xxii), 29 CFR 2590.715-
2715A1(a)(2)(xxii), and 45 CFR 147.210(a)(2)(xxii).
---------------------------------------------------------------------------

    The Departments considered alternative approaches to account for 
non-fee-for-service contractual arrangements, such as requiring plans 
and issuers to calculate median contracted rates for service bundles, 
or allowing plans or issuers to disregard certain types of non-fee-for-
service contracts for purposes of calculating the median contracted 
rate. However, the approach specified in these interim final rules will 
ensure that the median contracted rate calculation accounts for a range 
of different contractual arrangements, including instances where a plan 
or issuer uses different types of contracting models with different 
providers and facilities. Using an underlying fee schedule or derived 
amount will allow plans or issuers to, in essence, convert each of 
their non-fee-for-service contracts into fee-for-service arrangements 
for purposes of calculating the median contracted rate. By avoiding 
instances where plans or issuers might have been required to disregard 
some of their contracts, this approach minimizes the number of 
instances in which a plan or issuer would not have sufficient 
information to calculate a median contracted rate and ensures that 
arrangements that pay for value over service volume are reflected in 
the QPA. In addition, this approach will result in the calculation of a 
QPA that aligns with a service code (or service-code modifier

[[Page 36894]]

combination). The Departments anticipate this result will be helpful to 
nonparticipating providers and facilities in understanding how much 
cost sharing they are permitted to charge for a given item or service, 
and as they negotiate with the plan or issuer to determine the out-of-
network rate.
    It is the Departments' understanding that under certain capitated 
and bundled payment arrangements, providers' payments may be reconciled 
retrospectively to account for utilization, value adjustments, or other 
weighting factors that can affect the final payment to a provider. In 
addition, payers and providers may agree to certain incentive payments 
during the contracting process to promote the provision of higher-
quality, lower-cost health care to participants, beneficiaries, or 
enrollees over time. These interim final rules specify that when 
calculating median contracted rates, plans and issuers must exclude 
risk sharing, bonus, or penalty, and other incentive-based and 
retrospective payments or payment adjustments. The Departments are of 
the view that excluding these payments and payment adjustments from the 
median contracted rates used to determine cost sharing for items and 
services furnished by nonparticipating providers or facilities is 
consistent with how cost sharing is typically calculated for in-network 
items and services, where the cost-sharing amount is customarily 
determined at or near the time an item or service is furnished, and is 
not subject to adjustment based on changes in the amount ultimately 
paid to the provider or facility as a result of any incentives or 
reconciliation process.
b. Indexing
    The No Surprises Act provides that, in instances when the median 
contracted rate is determined as of January 31, 2019, the QPA for items 
and services furnished during 2022 is calculated by increasing the 
median contracted rate by the percentage increase in the consumer price 
index for all urban consumers (U.S. city average) (CPI-U) over 2019, 
the percentage increase over 2020, and the percentage increase over 
2021. The No Surprises Act further provides that the QPA for 2022 is 
then adjusted annually for items and services furnished during 2023 or 
a subsequent year. Therefore, the increase for any year is the CPI-U 
for the year, as so defined, divided by the CPI-U for the prior year. 
The combined percentage increase for 2019, 2020, and 2021 to determine 
the amount for 2022 is the product of the CPI-U increases for 2019, 
2020, and 2021 multiplied together. For any year, the factor will be 
the quotient of CPI-U for the current year divided by the CPI-U for the 
prior year. For example, for an item or service provided in 2023, the 
2023 QPA is the 2022 QPA multiplied by the CPI-U 2022/CPI-U 2021.
    These interim final rules provide specifications for calculating 
the percentage increase in CPI-U to ensure that all plans and issuers 
adjust the percentage in a uniform manner. In order to ensure that 
uniformity, these interim final rules provide that plans and issuers 
will calculate the increases using the factors determined by the 
Treasury Department and the IRS, and published in guidance by the IRS. 
In determining the factors, these interim final rules provide that the 
percentage increase for any year is calculated by using the CPI-U 
published by the Bureau of Labor Statistics of the DOL. For this 
purpose, the CPI-U for each calendar year is the average of the CPI-U 
as of the close of the 12-month period ending on August 31 of the 
calendar year, rounded to 10 decimal places. This allows the 
Departments to provide the percentage increase factor before January 1 
of each applicable year with sufficient time to adjust the QPAs for the 
year.
c. Special Rules for Unit-Based Services
    These interim final rules provide special rules for calculating the 
QPA for items or services for which a plan or issuer generally 
determines the reimbursement level for the same or similar items or 
services by multiplying the contracted rate by another unit, such as 
time or mileage. In these cases, indexing the median contracted rate to 
calculate the QPA would result in an amount that does not reflect the 
other units that are generally considered when calculating the in-
network payment amount. Therefore, when reimbursement levels are 
determined using this approach, these interim final rules specify that 
the QPA is calculated by determining the median contracted rate used 
for that item or service, indexing that median amount in accordance 
with the otherwise applicable rules regarding indexing, and then 
applying the pertinent multipliers. These interim final rules also 
include specific instructions for calculating the QPA for anesthesia 
services and for certain service codes for air ambulance services.
Anesthesia Services
    Payers generally calculate payment amounts for anesthesia services 
by multiplying the negotiated rate for the anesthesia conversion factor 
that has been negotiated between the payer and the provider (expressed 
in dollars per unit) by (1) the base unit for the anesthesia service 
code, (2) the time unit, and (3) the physical status modifier unit. The 
base unit, time unit, and physical status modifier unit are specific to 
the individual receiving the anesthesia services. These units are not 
expressed in dollars per unit, nor do they vary by contract. The base 
units for an anesthesia service code are the American Society of 
Anesthesiologists Relative Value Guide base units for that service 
code. The time unit represents the length of time during which the 
anesthesia services were furnished, and for purposes of the QPA 
methodology, is measured in 15-minute increments or a fraction thereof. 
The physical status modifier on a claim is a standard modifier 
describing the physical status of the patient and is used to 
distinguish between the various levels of complexity of the anesthesia 
services provided, and is expressed as a unit with a value between zero 
(0) and three (3).
    These interim final rules include a methodology for calculating the 
QPA for these anesthesiology services that reflects the manner in which 
providers are generally paid for these services. To calculate the QPA 
for anesthesia services furnished during 2022, these interim final 
rules require the plan or issuer to, first, take the median contracted 
rate for the anesthesia conversion factor (determined in accordance 
with the methodology for calculating median contracted rates for 
service code-modifier combinations) for the same or similar item or 
service as of January 31, 2019, and increase that amount to account for 
changes in the CPI-U, using the methodology described earlier in this 
section of the preamble. This amount is referred to as the indexed 
median contract rate. The plan or issuer must then multiply this 
indexed median contracted rate for the anesthesia conversion factor by 
the sum of the base unit (using the value specified in the most 
recently published edition (as of the date of service) of the American 
Society of Anesthesiologists Relative Value Guide), time unit, and 
physical status modifier units of the participant, beneficiary, or 
enrollee to whom anesthesia services are furnished to determine the 
QPA.
    To calculate the QPA for anesthesia services furnished during 2023 
or a subsequent year, the plan or issuer must use the indexed median 
contracted rate for the anesthesia conversion factor, and adjust that 
amount by the percentage increase in the CPI-U over the previous year 
using the methodology described earlier in this section of the 
preamble.

[[Page 36895]]

The plan or issuer must then multiply that amount by the sum of the 
base unit (using the value specified in the most recently published 
edition (as of the date of service) of the American Society of 
Anesthesiologists Relative Value Guide), time unit, and physical status 
modifier units for the participant, beneficiary, or enrollee to whom 
anesthesia services are furnished to determine the QPA.
Air Ambulance Services
    Payers often reimburse for air ambulance services in part by using 
air mileage service codes (A0435 and A0436) and reimbursement levels 
that reflect the number of miles an individual is transported by the 
air ambulance, which are referred to as loaded miles. Payment amounts 
are calculated by multiplying the negotiated rate for the service code, 
referred to in this rule as the air mileage rate, by the number of 
loaded miles. These interim final rules include a methodology for 
calculating the QPA for these air mileage service codes that reflects 
the manner in which providers are generally paid for the service codes.
    To calculate the QPA for the portion of air ambulance services 
billed using the air mileage service codes that are furnished during 
2022, the plan or issuer must first increase the median contracted 
rate, in accordance with 26 CFR 54.9816-6T(c)(1)(i), 29 CFR 2590.716-
6(c)(1)(i), or 45 CFR 149.140(c)(1)(i), as applicable. This amount is 
referred to as the indexed median air mileage rate. The plan or issuer 
must then multiply the indexed median air mileage rate by the number of 
loaded miles provided to the participant, beneficiary, or enrollee to 
determine the QPA.
    To calculate the QPA for air ambulance services billed using the 
air mileage service codes (A0435 and A0436) that are furnished during 
2023 or a subsequent year, the plan or issuer must increase the indexed 
median air mileage rate, determined for such services furnished in the 
immediately preceding year, using the methodology described in 26 CFR 
54.9816-6T(c)(1)(ii), 29 CFR 2590.716-6(c)(1)(ii), or 45 CFR 
149.140(c)(1)(ii), as applicable. The plan or issuer must then multiply 
the indexed median air mileage rate by the number of loaded miles 
provided to the participant, beneficiary, or enrollee to determine the 
QPA.
d. Cases With Insufficient Information
    Section 9816(a)(3)(E)(iii) of the Code, section 716(a)(3)(E)(iii) 
of ERISA, and section 2799A-1(a)(3)(E)(iii) of the PHS Act, as added by 
the No Surprises Act, specify an alternative process to determine the 
QPA in cases where a group health plan or health insurance issuer 
offering group or individual health insurance coverage lacks sufficient 
information to calculate the median of contracted rates in 2019, as 
well as for newly covered items or services in the first coverage year 
after 2019.
Definition of Sufficient Information
    Under these interim final rules, a plan or issuer is considered to 
have sufficient information to calculate the median of contracted rates 
if the plan or issuer has at least three contracted rates on January 
31, 2019, to calculate the median of the contracted rates in accordance 
with the methodology in these interim final rules. In the Departments' 
view, while a median contracted rate could be calculated with a smaller 
number of contracts, requiring a minimum of three contracted rates is 
supported by the statute's direction to calculate a median, rather than 
a mean. Furthermore, the Departments have determined that three 
contracted rates for a particular item or service in a geographic 
region represents the minimum number of contracts necessary to 
reasonably reflect typical market negotiations while reducing the 
potential for outlier rates to unduly influence the calculation of the 
QPA.
    Under section 9816(a)(3)(E)(iii) of the Code, section 
716(a)(3)(E)(iii) of ERISA, section 2799A-1(a)(3)(E)(iii) of the PHS 
Act, and these interim final rules, where a plan or issuer that 
initially does not have sufficient information to calculate the median 
contracted rate based on January 31, 2019 contracted rates (or for new 
plans and coverage or new service codes, as discussed in more detail in 
this section of the preamble) later gains sufficient information, the 
plan or issuer must calculate the QPA using the median contracted rate 
for the first sufficient information year. The first sufficient 
information year is defined as: (1) In the case of an item or service 
for which a plan or issuer does not have sufficient information to 
calculate the median of contracted rates in 2019, the first year after 
2022 for which the plan or issuer has sufficient information to 
calculate the median of contracted rates in the year immediately 
preceding that first year after 2022; and (2) in the case of a newly 
covered item or service, the first year after the first coverage year 
for such item or service with respect to such plan or coverage for 
which the plan or issuer has sufficient information to calculate the 
median of the contracted rates in the year immediately preceding that 
first year.
    In cases in which contracted rates for a year after 2019 must be 
used to calculate the median contracted rate, a plan or issuer will be 
considered to have sufficient information to calculate the median 
contracted rate for a year if, with respect to that year, both of the 
following conditions are met: (1) The plan or issuer has at least three 
contracted rates on January 31 of the year immediately preceding that 
year to calculate the median of the contracted rates in accordance with 
the methodology in these interim final rules; and (2) the contracted 
rates account (or are reasonably expected to account) for at least 25 
percent of the total number of claims paid for that item or service for 
that year with respect to all plans of the sponsor (or of the 
administering entity, if applicable) or all coverage offered by the 
issuer that are offered in the same insurance market.
    The requirement that a plan or issuer have at least three 
contracted rates for a particular item or service in a geographic 
region is the same as the requirement that applies when determining 
whether there is sufficient information to calculate a median 
contracted rate for items and services furnished during 2022 using the 
median of contracted rates as of January 31, 2019. The 25 percent 
minimum claims volume requirement, however, applies where only 
contracted rates for years after 2019 are used to determine whether a 
plan or issuer has sufficient information to calculate the median 
contracted rate in the first sufficient information year. While the 
Departments are not concerned about manipulation of the QPA in the 
majority of cases where the median contracted rate is based on 2019 
contracted rates, the Departments recognize the potential for plans and 
issuers to engage in selective contracting practices that artificially 
change the median contracted rate in cases where subsequent year 
contracted rates are used to determine the QPA. Therefore, this 
requirement will help to ensure that when contracted rates for years 
after 2019 are used to calculate a median contracted rate, those 
network contracts represent a reasonable proportion of a plan's or 
issuer's total claims and are not designed to manipulate the QPA.
Eligible Databases
    In cases in which a plan or issuer does not have ``sufficient 
information'' to calculate a median contracted rate, the No Surprises 
Act directs the plan or issuer to determine the QPA through use of any 
database that is determined, in accordance with rulemaking issued by 
the Departments, to not have any

[[Page 36896]]

conflicts of interest and to have sufficient information reflecting 
allowed amounts paid to a health care provider or facility for relevant 
services furnished in the applicable geographic region (such as a state 
all-payer claims database).
    These interim final rules establish standards for databases, 
referred to as eligible databases, that may be used to determine the 
QPA. State all-payer claims databases are categorically eligible under 
these interim final rules because they are specifically identified as 
not having any conflicts of interest and as having sufficient 
information reflecting allowed amounts in section 9816(a)(3)(E)(iii)(I) 
of the Code, section 716(a)(3)(E)(iii)(I) of ERISA, and section 2799-
1(a)(3)(E)(iii)(I) of the PHS Act. Other third-party databases may also 
be eligible, provided all of the following conditions are satisfied.
    First, the database or the organization maintaining the database 
cannot be affiliated with, or owned or controlled by, any health 
insurance issuer, or a health care provider, facility, or provider of 
air ambulance services, or any member of the same controlled group as, 
or under common control with, any such entity. For example, if a 
majority of the members on the governing board of a database or the 
organization maintaining the database are associated with a health 
insurance issuer, the database would be considered to have a conflict 
of interest under these interim final rules, since it is controlled by 
the issuer. As another example, if an issuer owns 40 percent of the 
stock of the organization that maintains a database, and its subsidiary 
owns an additional 20 percent of the stock of the organization that 
maintains the database, the database would be considered to have a 
conflict of interest under these interim final rules, since it is 
effectively controlled by the issuer. As a third example, if an issuer 
and the organization that maintains a database are both subsidiaries of 
the same parent organization, the database would be considered to have 
a conflict of interest under these interim final rules, since it is 
affiliated with the issuer. In the Departments' view, this standard is 
critical to ensuring the independence of any database used to determine 
the QPA. The Departments solicit comment on whether a database should 
not be affiliated with, or owned or controlled by, other entities, such 
as plan sponsors or third-party administrators, in order to avoid a 
conflict of interest. The Departments also seek comment on whether to 
establish a specific threshold that a party's minority ownership 
interest must meet or exceed in order to create a conflict of interest 
for purposes of these interim final rules.
    For purposes of applying the controlled group rules to eligible 
databases, a controlled group means a group of two or more persons that 
is treated as a single employer under Code sections 52(a), 52(b), 
414(m), or 414(o). The Treasury Department and the IRS are considering 
whether further guidance is needed under section 52(a) or (b) of the 
Code to address either organizations exempt from tax under section 
501(a) of the Code or nonprofit organizations that, although not exempt 
from tax under section 501(a) of the Code, do not have members or 
shareholders that are entitled to receive distributions of the 
organization's income or assets (including upon dissolution) or that 
otherwise retain equity interests similar to those generally held by 
owners of for-profit entities. Until further guidance is issued, those 
two types of organizations may either rely on a reasonable, good-faith 
application of section 52(a) and (b) of the Code (taking into account 
the reasons for which the controlled group rules are incorporated into 
the definition of eligible database) or apply the rules set forth in 26 
CFR 1.414(c)-5(a) through (d) (but substituting ``more than 50 
percent'' in place of ``at least 80 percent'' each place it appears in 
26 CFR 1.414(c)-5).
    Second, the database must have sufficient information reflecting 
in-network amounts paid by group health plans or health insurance 
issuers offering group or individual health insurance coverage to 
providers, facilities, or providers of air ambulance services for 
relevant items and services furnished in the applicable geographic 
region. The Departments recognize that for a database to be used to 
calculate the QPA, the database should contain sufficient data to 
reflect the true market dynamics in a given geographic region. However, 
in order to provide flexibility in the initial implementation of the No 
Surprises Act, these interim final rules do not establish a specific 
definition of when a database is considered to have sufficient 
information. The Departments seek comment on how to define when a 
database has sufficient information, including whether to establish 
specific criteria that a claims database would need to satisfy in order 
to demonstrate that it has sufficient information reflecting in-network 
payment amounts for providers or facilities in the applicable 
geographic region, such as a requirement that the database represents a 
specified minimum percentage of the claims volume for the region.
    Third, the database must have the ability to distinguish amounts 
paid to participating providers and facilities by commercial payers, 
such as group health plans and health insurance issuers offering group 
or individual health insurance coverage, from all other claims data, 
such as amounts billed by nonparticipating providers or facilities and 
amounts paid by public payers, including the Medicare program under 
title XVIII of the Social Security Act, the Medicaid program under 
title XIX of the Social Security Act (or a demonstration project under 
title XI of the Social Security Act),\61\ and the Children's Health 
Insurance Program under title XXI of the Social Security Act.
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    \61\ Under section 1115 of the Social Security Act, the 
Secretary of HHS has the authority to approve experimental, pilot, 
or demonstration projects that, in his judgment, are likely to 
assist in promoting the objectives of the Medicaid statute. Under 
section 1115 authority, the Secretary may waive compliance with 
certain provisions of Medicaid and CHIP law and may authorize 
federal matching funds for state expenditures that would not 
otherwise be federally matchable under the Medicaid and CHIP 
statutes. Many states have section 1115 demonstrations under which 
they cover services that would not otherwise be covered under the 
Medicaid or CHIP programs.
---------------------------------------------------------------------------

    To calculate the QPA for an item or service furnished during 2022 
(or in the case of newly covered items or services, in the first 
coverage year) using an eligible database, the plan or issuer must 
first identify the rate in the database that is equal to the median of 
the in-network allowed amounts for the same or similar item or service 
in the geographic region in the year immediately preceding the year in 
which the item or service is furnished (or in the case of a newly 
covered item or service, the year immediately preceding the first 
coverage year). It is the Departments' view that in-network allowed 
amounts for items and services are a reasonable proxy for contracted 
rates, and that where there is insufficient information to calculate 
the QPA based on the median of a plan's or issuer's own contracted 
rates, using the median of in-network allowed amounts for all private 
payers in an eligible database is a reasonable method for approximating 
the median contracted rate for items and services in the applicable 
geographic region. The Departments are also of the view that 
determining the QPA for an item or service using the median of in-
network allowed amounts for the same or similar item or service in the 
geographic region in the year immediately preceding the year in which 
the item or service is furnished is reasonably likely to result in 
levels of cost sharing that are

[[Page 36897]]

generally in line with the cost-sharing liability incurred by 
participants, beneficiaries, and enrollees in plans with similar levels 
of in-network cost-sharing for the same or similar items or services.
    Once the median in-network allowed amount has been identified, that 
rate is then increased by the percentage increase in the CPI-U over the 
previous year using the methodology described earlier in this section 
of the preamble. For each subsequent year before the first sufficient 
information year, the plan or issuer must increase the QPA applicable 
to items or services furnished in the immediately preceding year by the 
percentage increase in CPI-U over the preceding year. Plans and issuers 
must continue to use this methodology until the first sufficient 
information year, at which point the plan or issuer must calculate the 
median contracted rate and determine the QPA using the standard 
methodology discussed earlier in this section of the preamble.
    These interim final rules require that plans and issuers use a 
consistent methodology when relying on an eligible database. 
Specifically, for any particular item or service, a plan or issuer 
using a database must use the same database to determine the QPA for 
that item or service through the last day of the calendar year, and if 
a different database is selected for some items or services, the basis 
for that selection must be one or more factors not directly related to 
the rate of those items or services (such as sufficiency of data for 
those items or services).\62\ This consistency requirement is designed 
to ensure that when relying on an eligible database to determine the 
QPA for an item or service, a plan or issuer cannot vary the database 
selected due to the rates associated with that item or service. The 
Departments seek comment on this consistency requirement and whether 
additional standards or guidance are needed to ensure compliance and 
prevent abuse.
---------------------------------------------------------------------------

    \62\ For example, these interim final rules permit a plan or 
issuer to rely on different state all-payer claims databases, based 
on the geographic region in which an item or service is furnished, 
as state all-payer claims databases may not have sufficient data for 
items and service furnished outside of the state.
---------------------------------------------------------------------------

    Finally, these interim final rules codify section 9816(d) of Code, 
section 716(d) of ERISA, and section 2799A-1(d) of PHS Act, as added by 
the No Surprises Act, which provide that a plan or issuer that uses an 
eligible database to determine the QPA by reason of having insufficient 
information is responsible for any costs associated with accessing such 
database. The Departments solicit comment on ways to help ensure that 
plans and issuers are charged only reasonable costs for accessing such 
databases and that entities that provide eligible databases are 
transparent about their fees and fee structures associated with this 
process.
New Plans and Coverage
    The No Surprises Act directs the Departments to establish a 
methodology for the sponsor of a group health plan or a health 
insurance issuer that did not offer any plan or coverage in a 
geographic region in 2019 to determine QPAs for the first year in which 
the plan or coverage will be offered in the geographic region. For each 
subsequent year, that amount is increased by the percentage increase in 
the consumer price index for all urban consumers over the previous 
year.
    The Departments recognize that while a sponsor or issuer may be 
newly offering coverage in a geographic region, the sponsor or issuer 
may have sufficient existing provider contracts under other current 
coverage in the geographic region where an item or service is furnished 
to calculate the QPA. The Departments clarify that it is not necessary 
to establish special procedures to calculate the QPA in these 
situations. Therefore, under these interim final rules, if the plan or 
issuer newly offering coverage in a geographic region for a year after 
2019 otherwise has sufficient information to calculate a median 
contracted rate in 2019 in the geographic region where the item or 
service is furnished, the QPA is determined using the standard 
methodology for calculating median contracted rates discussed earlier 
in this section of the preamble.
    The Departments recognize that the standard methodology would not 
be available, however, in cases where the plan or issuer does not have 
sufficient information to calculate a median contracted rate in the 
geographic region in which the item or service is furnished, such as in 
situations where the sponsor or issuer did not offer any plan or 
coverage in 2019. In this case, the plan or issuer must determine the 
QPA in accordance with the rules applicable to plans or issuers with 
insufficient information, or for newly covered items and services, 
including the use of an eligible database, as discussed earlier in this 
section of the preamble.
    For each subsequent year the plan or coverage is offered in the 
geographic region, the plan or issuer must increase the QPA for items 
or services furnished in the immediately preceding year by the 
percentage increase in the CPI-U over the previous year to determine 
the QPA for items and services furnished in that year. Under this 
approach, new plans and coverage that initially do not have sufficient 
information to calculate a median contracted rate must use a QPA based 
on information for the first year of coverage from an eligible database 
indefinitely, updated only by the inflation adjustment. The Departments 
seek comment on whether the methodology should instead allow new plans 
and coverage to transition to calculating a QPA using median contracted 
rates in an applicable first sufficient information year.
New Service Codes
    When service codes are created, plans and issuers may be unable to 
calculate the QPA using the approaches discussed earlier, because 
neither the plan or issuer nor any eligible databases have sufficient 
information regarding the new service code. This situation may occur 
for new service codes when the service codes describe items or services 
that have not previously been widely furnished. This situation may also 
occur when service codes are substantially revised, resulting in new 
service codes or new descriptors for existing service codes that 
substantially alter the types of services that would be billed using 
the original service codes. In this case, the plan, issuer, or eligible 
database may have sufficient information regarding rates for items and 
services billed under the service code prior to the revision, but that 
information may no longer reflect the rates associated with the items 
and services billed under the revised service code. The No Surprises 
Act does not specify a methodology for calculating the QPA in these 
circumstances. However, in the Departments' view, it is necessary that 
these interim final rules establish a methodology that plans and 
issuers can rely on for calculating QPAs for new service codes during 
periods of time when no eligible databases would reasonably be expected 
to have sufficient data to calculate a QPA.
    These interim final rules define ``new service code'' to mean a 
service code that was created or substantially revised in a year after 
2019. In situations in which a plan or issuer is billed for a covered 
item or service using a new service code, the plan or issuer must first 
identify a reasonably related service code that existed in the 
immediately preceding year. For example, a reasonably related service 
code might be another service code within the same family of codes, or 
might involve services that represent similar relative value units. 
This related service code will be used as a benchmark for

[[Page 36898]]

determining the QPA for the new service code. The Departments seek 
comment on whether additional rules are needed regarding how plans and 
issuers should be required to identify a reasonably related service 
code, and on whether the Departments should develop a crosswalk 
methodology to identify related service codes for each new service 
code.
    The Departments are of the view that, although Medicare payment 
rates may differ substantially from rates paid by plans and issuers, it 
is reasonable to use Medicare payment rates to approximate the relative 
cost of two different but reasonably related service codes. Therefore, 
if CMS has established a payment rate under the Medicare program for an 
item or service billed under the new service code, the plan or issuer 
must calculate the ratio of the rate that Medicare pays for the item or 
service billed under the new service code compared to the rate that 
Medicare pays for the item or service under the related service code 
(with both rates disregarding any adjustments for value-based 
purchasing arrangements that could lead to bonuses or deductions), and 
multiply that ratio by the QPA for the related service code for the 
year in which the item or service is furnished.
    The Departments recognize that in some cases the Medicare program 
might not immediately establish a payment rate for items and services 
billed under a new service code. Therefore, these interim final rules 
establish a secondary approach to determine the QPA in these 
situations. Specifically, for items and services billed using a new 
service code for which Medicare has not established a payment rate, the 
plan or issuer must calculate the QPA by first calculating the ratio of 
the rate that the plan or issuer reimburses for an item or service 
billed under the new service code compared to the rate that the plan or 
issuer reimburses for an item or service under the related service code 
(the relativity ratio), and then multiplying the relativity ratio by 
the QPA for the item or service billed under the related service code. 
These interim final rules do not specify a particular method that plans 
and issuers must use to calculate this relativity ratio. However, the 
Departments expect plans and issuers to use a reasonable method for 
making the calculation, and seek comment on whether future rulemaking 
should specify additional requirements for determining the relativity 
ratio. For example, plans and issuers could be required to calculate 
the ratio using the medians or means of the contracted rates for each 
of the two services. However, the Departments recognize that it may 
take time for plans and issuers to enter into negotiated rates for new 
service codes, and therefore the medians or means may change over time. 
Alternatively, plans and issuers could be required to calculate the 
relativity ratio using rates from one contract, based on the assumption 
that negotiated rates within any given contract would generally produce 
a similar relativity ratio. The Departments are of the view that using 
rates from two different contracts would not constitute a reasonable 
method for calculating the relativity ratio, as this approach could 
introduce into the relativity ratio, variation from factors that are 
unrelated to the relative cost of furnishing the item or service, such 
as the negotiating power of the parties to the contract.
    Under the methodology in these interim final rules, for items or 
services furnished in any subsequent year (before the first sufficient 
information year for such item or service with respect to such plan or 
coverage or before the first year for which an eligible database has 
sufficient information in the immediately preceding year), the plan or 
issuer must calculate the QPA by increasing the QPA calculated for the 
prior year by the percentage increase in CPI-U over the immediately 
preceding year.
    However, for an item or service billed using a new service code, 
and furnished in the first sufficient information year for such item or 
service with respect to such plan or coverage, or furnished in the 
first year for which an eligible database has sufficient information to 
enable the plan or issuer to calculate the QPA using the processes that 
generally apply when an issuer or plan has insufficient information, 
the plan or issuer must calculate the QPA in accordance with 26 CFR 
54.9816-6T(c)(3), 29 CFR 2590.716-6(c)(3), or 45 CFR 149.140(c)(3), as 
applicable. Thus, once the plan or issuer or an eligible database has 
sufficient information to calculate a QPA, the QPA for a new service 
code would be calculated using the median contracted rate of the plan 
or issuer, or the median of the in-network allowed amounts in the 
eligible database.
    The Departments seek comment on any alternate approaches that could 
be used to determine the QPA for new service codes.
e. Information To Be Shared About the QPA
    The No Surprises Act directs the Departments to specify the 
information that a plan or issuer must share with a nonparticipating 
provider or nonparticipating emergency facility, as applicable, when 
making a determination of a QPA.
    The Departments recognize that providers, emergency facilities, and 
air ambulance providers subject to the surprise billing rules need 
transparency regarding how the QPA was determined. This information is 
also important in informing the negotiation process. In addition, IDR 
entities are directed by statute to consider the QPA when selecting an 
offer submitted by the parties through the IDR process. Therefore, to 
decide whether to initiate the IDR process and what offer to submit, a 
provider, emergency facility, or provider of air ambulance services 
must know not only the value of the QPA, but also certain information 
on how it was calculated.
    The Departments seek to ensure transparent and meaningful 
disclosure about the calculation of the QPA while minimizing 
administrative burdens on plans and issuers. These interim final rules 
therefore require that plans and issuers make certain disclosures with 
each initial payment or notice of denial of payment, and that plans and 
issuers must provide additional information upon request of the 
provider or facility. This information must be provided in writing, 
either on paper or electronically, to a nonparticipating provider, 
emergency facility, or provider of air ambulance services, as 
applicable, when the QPA serves as the recognized amount.
    First, a plan or issuer must provide the QPA for each item or 
service involved.
    Second, a plan or issuer must provide a statement certifying that, 
based on the determination of the plan or issuer: (1) The QPA applies 
for purposes of the recognized amount (or, in the case of air ambulance 
services, for calculating the participant's, beneficiary's, or 
enrollee's cost sharing), and (2) each QPA shared with the provider or 
facility was determined in compliance with the methodology outlined in 
these interim final rules. These interim final rules require a 
statement from the plan or issuer that the QPA applies for purposes of 
the recognized amount so that providers and facilities will understand 
that the plan or issuer has determined that neither an All-Payer Model 
Agreement nor a specified state law applies for purposes of calculating 
a participant's, beneficiary's, or enrollee's cost-sharing liability, 
but rather that cost-sharing liability has been calculated using the 
QPA. With respect to air ambulance services, the statement will ensure 
providers of air ambulance services understand that the QPA, rather 
than the billed charge, applies for

[[Page 36899]]

purposes of calculating the cost-sharing liability, because the plan or 
issuer has determined that the QPA is lower than the billed charge. The 
Departments expect that in most if not all cases where the QPA serves 
as the basis for determining the recognized amount, the federal IDR 
process will govern any dispute over payment instead of a specified 
state law or process. Therefore, this notice will also serve to direct 
providers or facilities to the federal IDR process if the parties 
cannot agree on an out-of-network rate.
    Third, a plan or issuer must provide a statement that if the 
provider or facility, as applicable, wishes to initiate a 30-day open 
negotiation period for purposes of determining the amount of total 
payment, the provider or facility may contact the appropriate person or 
office to initiate open negotiation, and that if the 30-day open 
negotiation period does not result in a determination, generally, the 
provider or facility may initiate the IDR process within 4 days after 
the end of the open negotiation period. The plan or issuer must also 
provide contact information, including a telephone number and email 
address, for the appropriate office or person to initiate open 
negotiations for purposes of determining an amount of payment 
(including cost sharing) for such item or service.
    In addition, upon request of the provider or facility, a plan or 
issuer must provide, in a timely manner, information about whether the 
QPA includes contracted rates that were not set on a fee-for-service 
basis for the specific items and services at issue and whether the QPA 
for those items and services was determined using underlying fee 
schedule rates or a derived amount. If a related service code was used 
to determine the QPA for a new service code, a plan or issuer must 
provide information to identify which related service code was used. 
Similarly, if an eligible database was used to determine the QPA, a 
plan or issuer must provide information to identify which database was 
used to determine the QPA.
    Finally, if applicable upon request, a plan or issuer must provide 
a statement that the plan's or issuer's contracted rates include risk-
sharing, bonus, penalty, or other incentive-based or retrospective 
payments or payment adjustments for the items and services involved 
that were excluded for purposes of calculating the QPA. Having 
information about whether the median contracted rate excludes these 
types of payment adjustments will better inform the open negotiation 
and IDR process.
    The Departments seek comment on these disclosure requirements and 
on what additional information a plan or issuer should be required to 
share with a provider or facility about the QPA, either in all cases or 
upon request. The Departments also seek comment on whether a specific 
definition or standard is needed to ensure that information provided 
upon request is disclosed in a timely manner.
f. Audits
    The No Surprises Act requires rulemaking to establish a process 
under which group health plans and health insurance issuers offering 
group or individual health insurance coverage are audited by the 
applicable Secretary or applicable state authority to ensure that such 
plans and coverage are in compliance with the requirement of applying a 
QPA and that the QPA applied satisfies the definition under the No 
Surprises Act with respect to the year involved.\63\
---------------------------------------------------------------------------

    \63\ See section 9816(a)(2)(A) of the Code; section 2799A-
1(a)(2)(A) of the PHS Act. The DOL and OPM will rely on the existing 
agency processes to ensure compliance with the No Surprises Act, as 
discussed in this section of the preamble.
---------------------------------------------------------------------------

    The enforcement responsibilities of HHS and the states with respect 
to oversight of health insurance issuer compliance with the federal 
insurance market reforms are set forth in the PHS Act. Pursuant to 
section 2723(a)(1) of the PHS Act, as amended by the No Surprises Act, 
states have primary enforcement authority over health insurance issuers 
regarding the provisions of Parts A and D of title XXVII of the PHS 
Act. Under this framework, HHS has enforcement authority over issuers 
in a state if the Secretary of HHS makes a determination that the state 
is failing to substantially enforce a provision (or provisions) of Part 
A or D of title XXVII of the PHS Act.\64\
---------------------------------------------------------------------------

    \64\ Section 2723(a)(2) and (b)(1)(A) of the PHS Act. See also 
45 CFR 150.203.
---------------------------------------------------------------------------

    DOL and the Treasury Department generally have primary enforcement 
authority over private sector employment-based group health plans. The 
IRS has jurisdiction over certain church plans. HHS also has primary 
enforcement authority over non-federal governmental plans, such as 
those sponsored by state and local government employers.\65\ OPM has 
jurisdiction over FEHB plans, which are federal governmental plans.
---------------------------------------------------------------------------

    \65\ See section 2723(b)(1)(B) of the PHS Act.
---------------------------------------------------------------------------

    The Departments will generally use existing processes to ensure 
compliance with Code, ERISA, and PHS Act requirements that apply to 
group health plans and health insurance issuers, including the 
provisions added by the No Surprises Act. HHS's enforcement procedures 
related to the PHS Act federal insurance market reforms are set forth 
in section 2723 of the PHS Act and 45 CFR 150.101 et seq., including 
bases for initiating investigations and performing market conduct 
examinations. Section 504 of ERISA provides DOL with authority to 
determine whether any person has violated or is about to violate any 
provision of ERISA or any regulation or order thereunder. The interim 
final rules include an audit provision establishing that HHS's existing 
enforcement procedures will apply with respect to ensuring that a plan 
or coverage is in compliance with the requirement of determining and 
applying a QPA consistent with these interim final rules. HHS intends 
to amend its enforcement regulations through future notice and comment 
rulemaking to reflect the amendments made to the PHS Act by the No 
Surprises Act. OPM will audit FEHB plans to ensure that such plans are 
in compliance with the requirement of determining and applying a QPA.
vii. Determination of Out-of-Network Rate in the Absence of a Specified 
State Law or an Applicable All-Payer Model Agreement
    In instances in which a specified state law or All-Payer Model 
Agreement does not apply for purposes of specifying the out-of-network 
rate, the out-of-network rate is determined either through agreement 
between the provider or facility and plan or issuer; or through an IDR 
process, if agreement cannot be reached and such process is initiated. 
If the parties agree to an amount of payment prior to the date on which 
a certified IDR entity makes a determination with respect to such items 
or services, that agreed upon amount is the out-of-network rate. 
Otherwise, the out-of-network rate is the amount of payment determined 
by the certified IDR entity for the items or services.\66\
---------------------------------------------------------------------------

    \66\ As noted previously, the Departments intend to implement 
the federal IDR process in future rulemaking.
---------------------------------------------------------------------------

3. Additional Plan and Issuer Requirements Regarding Making Initial 
Payments or Providing a Notice of Denial
    The No Surprises Act and these interim final rules establish 
several procedural requirements that apply to group health plans and 
health insurance issuers to ensure that billing disputes

[[Page 36900]]

related to items and services subject to the balance billing 
protections in the No Surprises Act are resolved in a timely fashion. 
These include timeframes for: A plan or issuer to send a notice of 
denial of payment or make an initial payment; the length of any open 
negotiation period regarding payment; and initiating the IDR process 
following an open negotiation period. However, those three requirements 
do not apply under certain circumstances with regard to post-
stabilization services or to out-of-network non-emergency services 
(other than out-of-network air ambulance services) if the provider or 
facility provided notice to, and received consent from, the 
participant, beneficiary, or enrollee (or their authorized 
representative), as discussed later in this preamble.
    Therefore, it is critical that a group health plan or health 
insurance issuer have knowledge of any notice provided and consent 
given under these interim final rules for items and services that it 
covers, and that would otherwise be subject to the surprise billing 
provisions in the statute and these interim final rules. As discussed 
later in this preamble, the interim final rules issued by HHS in this 
rulemaking require providers and facilities to notify plans and issuers 
when the notice and consent criteria have been satisfied. Absent 
receiving this information, a plan or issuer must assume that the 
individual has not waived the protections provided in these interim 
final rules, and must therefore calculate cost sharing, apply cost 
sharing to deductibles and out-of-pocket limits, and make any payments 
to providers and facilities before an individual has satisfied the 
coverage deductible, accordingly. In instances where a plan or issuer 
does receive this information, it may rely on the provider's or 
facility's representation as being true and accurate, unless and until 
the plan or issuer knows or reasonably should know otherwise. Thus, if 
a provider or facility indicates to a plan or issuer that the notice 
and consent described in these interim final rules was properly and 
timely given and received, the plan or issuer may rely on that 
information and, for example, apply out-of-network cost sharing for the 
applicable items and services, unless and until the plan or issuer 
knows or reasonably should know that the notice and consent was not 
properly and timely given and received. In cases where a plan or issuer 
believes that notice was not properly and timely given and received, 
notwithstanding a provider's or facility's assertion to the contrary, 
the plan or issuer should apply the cost-sharing and other requirements 
set forth in these interim final rules and applicable state law by, 
among other actions, reprocessing any claims that were not processed 
consistently with those requirements. The plan or issuer may also 
submit a complaint against the provider or facility as set forth in 
these interim final rules at 45 CFR 149.450.
    Sections 9816(a)(1)(iv)(I) and 9817(a)(3)(A) of the Code, sections 
716(a)(1)(iv)(I) and 717(a)(3)(A) of ERISA, sections 2799A-
1(a)(1)(iv)(I) and 2799A-2(a)(3)(A) of the PHS Act, and these interim 
final rules, require plans and issuers to send ``an initial payment or 
notice of denial of payment'' not later than 30 calendar days after a 
nonparticipating provider or facility submits a bill related to the 
items and services that fall within the scope of the new surprise 
billing protections for emergency services, non-emergency services 
performed by nonparticipating providers at participating facilities, 
and air ambulance services furnished by nonparticipating providers of 
air ambulance services. Given that plans and issuers cannot comply with 
this requirement unless the plan or issuer first determines that the 
billed items and services are covered under the plan or coverage, these 
interim final rules require that the plan or issuer make such 
determination not later than 30 calendar days after a nonparticipating 
provider or facility submits a bill related to the items and services 
that fall within the scope of the new surprise billing protections for 
emergency services, non-emergency services performed by 
nonparticipating providers at participating facilities, and air 
ambulance services furnished by nonparticipating providers of air 
ambulance services.
    The Departments specify in these interim final rules that the 30-
calendar-day period generally begins on the date the plan or issuer 
receives the information necessary to decide a claim for payment for 
such services, commonly known as a ``clean claim'' under many existing 
state laws. To the extent feasible, the Departments encourage providers 
and facilities to include information about whether the surprise 
billing protections apply to an item or service on the claim form 
itself. With respect to non-emergency services, HHS requires, under 45 
CFR 149.420(i), nonparticipating providers (or the participating 
facility on behalf of the nonparticipating provider) to timely notify 
the plan or issuer that the item or service was furnished during a 
visit at a participating health care facility. In addition, in all 
cases, under either 45 CFR 149.410(e) or 45 CFR 149.420(i), providers 
and facilities must notify the plan or issuer as to whether the 
requirements for notice and consent have been met when transmitting the 
bill, either on the bill or in a separate document. The Departments 
seek comments with recommendations on how HIPAA standard transactions 
to submit claims could be modified to accommodate the submission of 
several types of information on the claim itself. Specifically, the 
Departments seek comment on how HIPAA standard transactions to submit 
claims could be modified to include whether the surprise billing 
protections apply to the items and services included on a claim, 
whether the item or service was furnished during a visit at a 
participating health care facility, and whether the requirements for 
notice and consent have been met. The 30-calendar-day initial payment 
period also does not prohibit payments outside of the 30-calendar-day 
timeframe for any future adjustments for errors in payment, such as in 
cases of duplicate bills where providers and plans or issuers reconcile 
overpayments. The Departments expect that plans and issuers will act 
reasonably and in good faith when requesting additional information, by 
providing specific detail to help ensure that the claimant, provider, 
or facility understands what is required to perfect the claim. The 
Departments may specify additional standards if the Departments become 
aware of instances of abuse and gaming where plans and issuers are 
unduly delaying making an initial payment or sending a notice of denial 
to providers on the basis that the provider has not submitted a clean 
claim. The Departments solicit comment on whether any additional 
standards are necessary to prevent abusive claims payment practices. 
Under these interim final rules, a notice of denial of payment means, 
with respect to an item or service for which benefits are subject to 
the surprise billing protections, a written notice from the plan or 
issuer to the provider or facility that payment for the item or service 
will not be made by the plan or coverage and which explains the reason 
for denial. A notice of denial of payment could be provided, for 
example, if the item or service is covered but is subject to a 
deductible greater than the recognized amount.
    In the Departments' view, the statute's reference to an ``initial'' 
payment does not refer to a first installment. Rather, this initial 
payment should be an amount that the plan or issuer reasonably intends 
to be payment in full

[[Page 36901]]

based on the relevant facts and circumstances and as required under the 
terms of the plan or coverage, prior to the beginning of any open 
negotiations or initiation of the IDR process. In cases where the 
provider or facility is willing to accept the cost-sharing amount plus 
the initial payment (or the cost-sharing amount alone, in cases where a 
denial of payment is sent) as payment in full, this amount will be 
treated as the out-of-network rate. If plans and issuers make initial 
payments that providers and facilities are willing to accept (when 
combined with the cost-sharing amount) as payment in full, the 
administrative costs of determining the out-of-network amount will be 
significantly reduced through the avoidance of an open negotiation 
period and IDR process.
    These interim final rules do not require plans and issuers, when 
making an initial payment to providers or facilities, to make any 
specific amount of minimum initial payment. However, several state 
balance billing laws set standards for minimum initial payment amounts. 
For example, in Washington State, issuers are required to pay an out-
of-network provider or facility a commercially reasonable amount, 
reduced by the applicable cost-sharing amount, within 30 calendar days 
of receipt of a claim to which the state's balance billing protections 
apply. Requiring a minimum initial payment amount may help reduce the 
number of cases that go to arbitration in some states, and could help 
to reduce the number of cases that go to the federal IDR process 
established under the No Surprises Act.
    The Departments seek comment on whether to set a minimum payment 
rate or methodology for a minimum initial payment in future rulemaking, 
and if so, what that rate or methodology should be. For example, a 
minimum payment rate could be a specific percentage of the Medicare 
rate, a specific percentage of the plan or issuer's QPA for the item or 
service, an amount calculated in the same way the plan or issuer 
typically calculates payment for the specific item or service to 
nonparticipating providers or facilities, an amount representing the 
highest amount that would result from applying two or more of these or 
other methodologies, or any other method. To the extent comments 
suggest that a percentage of a rate calculated or determined in a 
specific way would be appropriate, the Departments seek comment 
regarding an appropriate specific percentage. The Departments also seek 
comment on whether a minimum payment rate should be defined as a 
commercially reasonable rate based on payments for the same or similar 
services in a similar area, without requiring any specific methodology. 
In addition, the Departments seek comment regarding the impact of these 
provisions on underserved and rural communities, and other communities 
facing a shortage of providers.
    The Departments are aware that the timeframes for deciding post-
service claims under the claims and appeals rules issued under section 
2719 of the PHS Act and the timeframes for sending an initial payment 
or notice of denial of payment under these final rules may not always 
align. The Departments seek to minimize confusion about which types of 
disputes should be resolved through a plan or issuer's internal claims 
and appeals process instead of the IDR process established by the No 
Surprises Act.
    The ERISA claims procedure regulation requires group health plans 
to notify a claimant of a benefit determination for post-service claims 
not later than 30 days after receipt of the claim. A plan can generally 
extend this period once for up to 15 days for matters beyond the 
control of the plan, including if the claimant fails to provide 
information necessary to decide the claim. In such cases, the plan may 
notify the claimant they provided insufficient information within 30 
days, and the plan must give the claimant at least 45 days to provide 
additional information. After the information is provided, the plan has 
15 days to make a determination. Claims that result in an adverse 
benefit determination (ABD) may be appealed within 180 days following 
receipt of the notice of the ABD. The requirements of the ERISA claims 
procedure regulation are incorporated by reference in the internal 
claims and appeals and external review requirements added by the 
Affordable Care Act to section 2719 of the PHS Act and, therefore, 
subject to limited exceptions, apply to all non-grandfathered group 
health plans and health insurance issuers offering non-grandfathered 
coverage in the group and individual markets.
    If an initial claim submitted is a clean claim, the timeframes for 
making the relevant determinations would generally be aligned under 
these interim final rules and the ERISA claims procedure regulation. 
However, if a claim is submitted without sufficient information to make 
a benefit determination, under the ERISA claims procedure regulation, 
the plan would only have 15 days to make a determination once the claim 
is resubmitted with the additional information. Yet, under the No 
Surprises Act and these interim final rules, the plan would have up to 
30 calendar days to send a notice of denial of payment or an initial 
payment to the out-of-network provider from the time the claim is 
resubmitted with additional information. Consistent with the 
requirement that plans and issuers provide an initial payment or notice 
of denial of payment within 30 calendar days of a provider or facility 
submitting a clean claim, the Departments clarify that while the ERISA 
claims procedure regulation would require plans to make a benefit 
determination within 15 days of a claim being resubmitted with 
additional information, plans and issuers have 30 calendar days (which 
is an additional 15 days) to make an initial payment to an 
nonparticipating provider or facility, or send a separate notice of 
denial of payment.
    The Departments note that there is also a significant distinction 
between an ABD, which may be disputed through a plan's or issuer's 
claims and appeals process, and a denial of payment or an initial 
payment that is less than the billed amount under these interim final 
rules, which may be disputed through the open negotiation process or 
through the IDR process. In general, when adjudication of a claim 
results in a participant, beneficiary, or enrollee being personally 
liable for payment to a provider or facility, this determination may be 
an ABD that can be disputed through a plan's or issuer's claims and 
appeals process. Conversely, when: (1) The adjudication of a claim 
results in a decision that does not affect the amount the participant, 
beneficiary, or enrollee owes; (2) the dispute only involves payment 
amounts due from the plan to the provider; and (3) the provider has no 
recourse against the participant, beneficiary, or enrollee, the 
decision is not an ABD and the payment dispute may be resolved through 
the open negotiation or the IDR process. This clarification is 
consistent with previous guidance included in FAQs related to the ERISA 
claims procedure regulation, which have explained that with respect to 
in-network benefits, the regulation does not apply to requests by 
health care providers for payments due to the provider, rather than due 
to the claimant, where the provider has no recourse against the 
claimant for amounts, in whole or in part, not paid by the plan.\67\ 
The Departments

[[Page 36902]]

acknowledge that there may be instances where a participant, 
beneficiary, or enrollee appeals an ABD (such as, a determination of 
cost-sharing amounts) through the claims and appeals process 
concurrently with a provider's challenge to a payment amount through 
the IDR process.
---------------------------------------------------------------------------

    \67\ See Benefit Claims Procedure Regulation FAQs, Q A-8, 
available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/benefit-claims-procedure-regulation; 
see also Q C-12 (clarifying that failure to make payment in whole or 
in part due to the imposition of cost-sharing requirements is an 
ABD).
---------------------------------------------------------------------------

4. Surprise Billing Complaints Regarding Group Health Plans and Health 
Insurance Issuers
    Section 9816(a)(2)(B)(iv) of the Code, section 716(a)(2)(B)(iv) of 
ERISA, and section 2799A-1(a)(2)(B)(iv) of the PHS Act direct the 
Departments to establish a process to receive complaints regarding 
violations of the application of QPA requirements by group health plans 
and health insurance issuers offering group or individual health 
coverage. The Departments are of the view that, in order to effectively 
enforce the No Surprises Act balance billing protections, the 
complaints process should extend to all of the consumer protection and 
balance billing requirements as described in these interim final rules 
that apply to group health plans and health insurance issuers offering 
group or individual health coverage. As such, these interim final rules 
establish a process by which the Departments will receive complaints 
regarding violations by plans and issuers of the requirements under 
sections 9816 and 9817 of the Code, sections 716 and 717 of ERISA, and 
sections 2799A-1 and 2799A-2 of the PHS Act. The Departments seek 
comment on whether the complaints process should be restricted to the 
QPA or extended as described in these interim final rules.
    The No Surprises Act also adds section 2799B-4(b)(3) of the PHS 
Act, which directs HHS to establish a process to receive consumer 
complaints regarding violations by health care providers, facilities, 
and providers of air ambulance services regarding balance billing 
requirements under sections 2799B-1, 2799B-2, 2799B-3, and 2799B-5 of 
the PHS Act and to respond to such complaints within 60 days. As such, 
HHS is issuing HHS-only interim final rules to establish a process by 
which HHS will receive complaints regarding violations of these 
requirements by health care providers, facilities, and providers of air 
ambulance services.
    For purposes of the complaint processes for plans and issuers, 
providers, facilities, and providers of air ambulance services, these 
interim final rules define a complaint as a written or oral 
communication that indicates there has been a potential violation by a 
plan or issuer of sections 9816 or 9817 of the Code, sections 716 or 
717 of ERISA, or sections 2799A-1, 2799A-2 of the PHS Act, or a 
potential violation by a provider, facility, or provider of air 
ambulance services of sections 2799B-1, 2799B-2, 2799B-3 and 2799B-5 of 
the PHS Act, whether or not a violation actually occurred. A 
complainant means any individual, or their authorized representative, 
who files a complaint as defined in these interim final rules.
    The Departments seek to minimize the burden of filing a complaint 
and seek to require only the information necessary to process the 
complaint and conduct an investigation if deemed necessary. Therefore, 
these interim final rules specify that the Departments will consider a 
complaint to be filed on the date on which the Departments receive an 
oral or written statement with information about the complaint 
sufficient to identify the parties involved (including the plan 
sponsor, if the complaint involves a group health plan), and the action 
or inaction that is the subject of the complaint. The information may 
also include the timing of the alleged violation, and the state where 
the alleged violation occurred. The Departments seek comment on the 
information needed to file a complaint, and the definitions in this 
section.
    The Departments have considered whether a complaint should be filed 
within a defined amount of time of the alleged violation. The 
Departments understand that timely action is necessary to investigate 
and adjudicate billing matters and therefore considered whether 
complainants should be required to file a complaint regarding an 
alleged violation of the requirements in these interim final rules by a 
plan, issuer, health care provider or provider of air ambulance 
services within 90 or 180 calendar days after learning of the alleged 
violation. Without a time requirement for filing a complaint, the 
Departments may be restricted in directing the complainant to other 
state or federal resolution processes with timing requirements such as 
the internal and external claims review process as described in section 
2719 of the PHS Act, or an appropriate IDR process as defined in 
sections 9816 and 9817 of the Code, sections 716 and 717 of ERISA, and 
sections 2799A-1 and 2799A-2 of the PHS Act. However, the Departments 
are of the view that every complaint should be processed and 
investigated as appropriate to ensure that any necessary enforcement 
action can be taken. Therefore, these interim final rules do not 
include a time period upon which a complaint must be filed. The 
Departments seek comment on whether a complainant should be required to 
file a complaint within a given time period and if so within what time 
period a complaint should be filed for the purpose of this section.
    Section 2799B-4 of the PHS Act directs HHS to respond to complaints 
regarding violations of balance billing protections by health care 
providers, facilities, and providers of air ambulance services within 
60 days of receipt. The Departments are of the view that the timing for 
responding to complaints regarding plans and issuers should be the same 
as that for providers to ensure timely resolution. Therefore, upon 
receiving the information necessary to file a complaint regarding a 
plan or issuer, the Departments will respond to complainants under 
section 9816(a)(2)(B)(iv) of the Code, section 716(a)(2)(B)(iv) of 
ERISA, and section 2799A-1(a)(2)(B)(iv) of the PHS Act no later than 60 
business days after the complaint is received. Similarly, HHS will 
respond to a processed complaint regarding a health care provider, 
facility, or provider of air ambulance services under section 2799B-4 
of the PHS Act no later than 60 business days after the complaint is 
received.
    The response will be by oral or written means, and will acknowledge 
receipt of the complaint, notify the complainant of their rights and 
obligations under the complaints process, and describe the next steps 
of the complaint resolution process. The Departments may also request 
any additional information needed to process the complaint. The 
requested information may include an explanation of benefits, processed 
claims, information about the health care provider, facility, or air 
ambulance service involved; information about the plan or issuer 
covering the individual; information to support a determination 
regarding whether the service was an emergency service or non-emergency 
service; the summary plan description, policy, certificate, contract of 
insurance, membership booklet, outline of coverage or other evidence of 
coverage the plan or issuer provides to their participant, beneficiary, 
or enrollee; documents regarding asserted facts in the complaint that 
are in the possession of or otherwise attainable by the complainant; or 
any other information the Departments may need to make a determination 
of facts for an investigation.
    HHS may also request additional information to process a complaint 
under section 2799B-4 of the PHS Act

[[Page 36903]]

regarding a health care provider, facility, or provider of air 
ambulance services. This information may include, but is not limited 
to, the bills or network status of a health care provider, health care 
facility, or provider of air ambulance services; information regarding 
the health care plan or health insurance coverage of a participant, 
beneficiary or enrollee; information to support a determination 
regarding whether the service was an emergency service or non-emergency 
service; documents that support the asserted facts in the complaint in 
the possession of, or otherwise attainable by the complainant; or any 
other information HHS needs to make a determination of facts for an 
investigation. The Departments seek comment on additional information 
that may be required to process a complaint.
    The response may be provided directly upon receipt of the 
complaint, or it may be provided afterwards, though no later than 60 
business days after the complaint is received. The next steps of the 
complaint resolution process may include referring the complainant to 
another appropriate state or federal resolution process, referring a 
complainant to the state or federal regulatory authority with 
enforcement jurisdiction, or initiating an investigation for 
enforcement action. The Departments will make reasonable efforts 
consistent with agency practices to notify the complainant of the 
outcome of such investigations or enforcement actions, including an 
explanation of the findings, resolution, or any corrective action 
taken. The Departments will also make reasonable efforts to notify the 
complainant if the complaint is transferred to another state or Federal 
regulatory authority. The Departments seek comment on whether a 
complainant should receive the notification of the outcome of the 
complaint within a given time period and if so within what time period 
a complainant should receive the notice for the purpose of this 
section.
    The Departments intend to provide the public with a seamless 
experience for filing complaints by creating one system to intake all 
complaints on behalf of all complainants under section 
9816(a)(2)(B)(iv) of the Code, section 716(a)(2)(B)(iv) of ERISA, and 
sections 2799A-1(a)(2)(B)(iv) and 2799B-4 of the PHS Act. The 
Departments understand that a complainant may not know which Department 
has enforcement jurisdiction; therefore, the Departments intend to 
provide one system that will direct complaints to the appropriate 
Department for processing, investigation, and enforcement action as 
necessary. The Departments will release guidance on where the public 
can file complaints and welcome comments on the operations, 
protections, user experience, or other facets of this complaint system. 
The Departments also seek comment on ways to ensure consumers are aware 
and know how to use this system.
    The Departments seek to uphold Executive Order 13985 and all civil 
rights protections regarding non-discrimination and accessibility, as 
noted in prior sections. The Departments will make all reasonable 
efforts to implement a robust complaint process, including but not 
limited to, acknowledgement of receipt of a complaint, explanations of 
rights and information requested, explanations of findings, and 
referrals to other authorities. The Departments will ensure that the 
complaints process is accessible to all individuals, that communication 
and language needs are met, and that all individuals are able to 
understand the options available to them and information required of 
them. The Departments seek comment from individuals in underserved and 
rural communities, minority communities, and persons otherwise 
adversely affected by persistent poverty or inequality on specific 
barriers to the complaint process and solutions to address these 
barriers and ensure equitable access to all aspects of the complaint 
processes.

C. Choice of Health Care Professionals

    In the Patient Protections Final Rule, the Departments finalized 
regulations addressing the provisions in section 2719A of the PHS Act, 
regarding patient protections related to choice of health care 
professional and emergency services.\68\ As explained earlier, the No 
Surprises Act amended section 2719A of the PHS Act to sunset when the 
new emergency services protections under the No Surprises Act take 
effect. The provisions of section 2719A of the PHS Act will no longer 
apply with respect to plan years beginning on or after January 1, 
2022.\69\ The No Surprises Act re-codified the patient protections 
related to choice of health care professional in newly added section 
9822 of the Code, section 722 of ERISA, and section 2799A-7 of the PHS 
Act.
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    \68\ 80 FR 72191 (November 18, 2015).
    \69\ Section 2719A(e) of the PHS Act states, ``The provisions of 
this section shall not apply with respect to a group health plan, 
health insurance issuers, or group or individual health insurance 
coverage with respect to plan years beginning on or on January 1, 
2022.'' The Departments interpret subsection (e) to sunset section 
2719A for plan years beginning on or after January 1, 2022.
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    To reflect these statutory amendments, these interim final rules 
add a sunset clause to the current patient protection provisions 
codified in the Patient Protections Final Rule, and re-codify the 
provisions related to choice of health care professional without 
substantive change at 26 CFR 54.9822-1T, 29 CFR 2590.722, and 45 CFR 
149.310. These interim final rules make minor technical edits to the 
original provisions for clarity.
    The Departments note that, although the substantive requirements of 
these regulations have not changed, the No Surprises Act extends the 
applicability of the patient protections for choice of health care 
professionals to grandfathered health plans. The patient protections 
under section 2719A of the PHS Act apply to only non-grandfathered 
group health plans and health insurance issuers offering non-
grandfathered group or individual health insurance coverage. In 
contrast, the patient protections under the No Surprises Act apply 
generally to all group health plans and group and individual health 
insurance coverage, including grandfathered health plans.\70\ 
Therefore, the requirements regarding patient protections for choice of 
health care professional under these interim final rules will newly 
apply to grandfathered health plans for plan years beginning on or 
after January 1, 2022. Until the requirements under section 9822 of the 
Code, section 722 of ERISA, and section 2799A-7 of the PHS Act and 
these interim final rules become applicable, non-grandfathered group 
health plans and health insurance issuers offering non-grandfathered 
group or individual health insurance coverage must continue to comply 
with the applicable requirements under section 2719A of the PHS Act and 
its implementing regulations.
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    \70\ Section 2719A was added to the PHS Act by the Affordable 
Care Act. Section 1251 of the Affordable Care Act provides that 
certain requirements, including those in section 2719A of the PHS 
Act, do not apply to grandfathered health plans. The No Surprises 
Act does not include a comparable exception for grandfathered health 
plans. Furthermore, section 103(d)(2) of the No Surprises Act amends 
section 1251(a) of the Affordable Care Act to clarify that the new 
and recodified patient protections provisions, including those 
related choice of choice of health care professional, apply to 
grandfathered health plans.
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D. Applicability

    These interim final rules generally apply to group health plans and 
health insurance issuers offering group or individual health insurance 
coverage with respect to plan years (in the

[[Page 36904]]

individual market, policy years) beginning on or after January 1, 2022. 
The term ``group health plan'' includes both insured and self-insured 
group health plans. Group health plans include private employment-based 
group health plans subject to ERISA, non-federal governmental plans 
(such as plans sponsored by states and local governments) subject to 
the PHS Act, and church plans subject to the Code. Individual health 
insurance coverage includes coverage offered in the individual market, 
through or outside of an Exchange, and includes student health 
insurance coverage as defined at 45 CFR 147.145. In addition, as 
discussed further in section V of the preamble, under the OPM interim 
final rules, FEHB carriers must comply with the Departments' interim 
final rules, subject to OPM regulation and contract provisions.
    The No Surprises Act amended section 1251(a) of the Affordable Care 
Act to specify that sections 2799A-1, 2799A-2, and 2799A-7 of the PHS 
Act apply to grandfathered health plans for plan years beginning on or 
after January 1, 2022. Therefore, these interim final rules apply to 
grandfathered health plans (as defined in 26 CFR 54.9815-1251, 29 CFR 
2590.715-1251, and 45 CFR 147.140). In addition, these interim final 
rules apply to certain non-grandfathered health insurance coverage in 
the individual and small group markets with respect to which CMS has 
announced it will not take enforcement action with respect to certain 
specified market requirements even though the coverage is out of 
compliance with those requirements (sometimes referred to as 
grandmothered or transitional plans).\71\
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    \71\ CMS Insurance Standards Bulletin Series--INFORMATION--
Extension of Limited Non-Enforcement Policy through 2022 (January 
19, 2021), available at https://www.cms.gov/files/document/extension-limited-non-enforcement-policy-through-calendar-year-2022.pdf.
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    These interim final rules do not apply to health reimbursement 
arrangements, or other account-based plans, as described in 26 CFR 
54.9815-2711(d)(6)(i), 29 CFR 2590.715-2711(d)(6)(i), and 45 CFR 
147.126(d)(6)(i), that make reimbursements subject to a maximum fixed 
dollar amount for a period, as the benefit design of such plans makes 
concepts related to surprise billing and choice of health care 
professionals inapplicable.
    By statute, certain plans and coverage are not subject to these 
interim final rules. This includes a plan or coverage consisting solely 
of excepted benefits,\72\ as well as short-term, limited-duration 
insurance. Excepted benefits are described in section 9832 of the Code, 
section 733 ERISA, and section 2791 of the PHS Act. Under section 
2791(b)(5) of the PHS Act, short-term, limited-duration insurance is 
excluded from the definition of individual health insurance coverage 
and is, therefore, exempt from these interim final rules and the 
statutory provisions the regulations implement. Short-term, limited-
duration insurance is defined in regulations at 26 CFR 54.9801-2, 29 
CFR 2590.701-2, and 45 CFR 144.103.
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    \72\ Section 9831 of the Code, section 9832 of ERISA, and 
section 2722 of the PHS Act.
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    These interim final rules do not apply to retiree-only plans. ERISA 
section 732(a) generally provides that part 7 of ERISA--and section 
9831(a) of the Code generally provides that chapter 100 of the Code--
does not apply to plans with less than two participants who are current 
employees (including retiree-only plans, which cover less than two 
participants who are current employees). Title XXVII of the PHS Act, as 
amended by the Affordable Care Act, no longer contains a parallel 
provision at section 2721(a) of the PHS Act. However, as explained in 
prior rulemaking, HHS will not enforce the requirements of title XXVII 
of the PHS Act with respect to non-federal governmental retiree-only 
plans and encourages states to adopt a similar approach with respect to 
health insurance coverage of retiree-only plans.\73\ HHS intends to 
continue to follow this same approach, including with respect to the 
new market reforms established in the No Surprises Act.
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    \73\ 75 FR 34537, 34540 (June 17, 2010).
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    These interim final rules are generally applicable to traditional 
indemnity plans, meaning plans that do not have networks of providers 
or facilities. However, the Departments recognize that indemnity plans 
may have unique benefit designs that cause certain provisions of these 
interim final rules not to be relevant. For example, the requirements 
regarding balance billing for non-emergency services provided by 
nonparticipating providers at certain participating facilities would 
never be triggered if a plan does not have a network of participating 
facilities. On the other hand, such requirements could be triggered by 
plans that have participating facilities but do not have participating 
providers, either for certain provider types or at all. In addition, 
requirements that are unrelated to whether a plan or coverage has a 
network of participating providers or facilities, such as the 
requirement that emergency services be covered without the need for any 
prior authorization determination, even if the services are provided on 
an out-of-network basis, are applicable to traditional indemnity plans.
    The Departments seek comment as to whether there are any other 
plans with unique benefit designs that should be exempt from all or 
some of these interim final rules.

IV. Overview of Interim Final Rules--Department of Health and Human 
Services

A. Preventing Surprise Medical Bills

1. In General
    In addition to the new provisions applicable to group health plans 
and health insurance issuers, discussed in section III of this 
preamble, the No Surprises Act adds a new Part E of title XXVII of the 
PHS Act establishing requirements applicable to health care providers, 
facilities, and providers of air ambulance services. Specifically, the 
No Surprises Act adds new sections 2799B-1, 2799B-2, 2799B-3, and 
2799B-5 of the PHS Act, which protect participants, beneficiaries, and 
enrollees in group health plans and group and individual health 
insurance coverage from balance bills by prohibiting nonparticipating 
providers, facilities, and providers of air ambulance services from 
billing or holding liable individuals for an amount that exceeds in-
network cost sharing determined in accordance with the balance billing 
provisions in circumstances where the balance billing provisions apply. 
This includes: (1) When emergency services are provided by a 
nonparticipating provider or nonparticipating emergency facility; (2) 
when non-emergency services are provided by a nonparticipating provider 
at a participating health care facility; and (3) when air ambulance 
services are furnished by a nonparticipating provider of air ambulance 
services.
    Under 5 U.S.C. 8902(p), as added by the No Surprises Act, sections 
2799B-1, 2799B-2, 2799B-3, and 2799B-5 of the PHS Act apply to a health 
care provider, a facility, and a provider of air ambulance services 
with respect to a covered individual in a health benefits plan offered 
by a FEHB carrier in the same manner as they apply with respect to a 
participant, beneficiary, or enrollee in a group health plan or group 
or individual health insurance coverage offered by a health insurance 
issuer. These interim final rules apply to a health care provider, a 
facility, and a provider of air ambulance services in

[[Page 36905]]

this same manner.\74\ The applicability of these interim final rules 
with respect to FEHB carriers is discussed in more detail in section V 
of this preamble.
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    \74\ For purposes of these interim final rules, references to 
participants, beneficiaries, and enrollees should be construed to 
include covered individuals in a FEHB plan.
---------------------------------------------------------------------------

    With respect to post-stabilization services provided by 
nonparticipating emergency facilities or nonparticipating providers, 
and non-emergency services furnished by nonparticipating providers at 
participating health care facilities (including off-site 
nonparticipating providers who furnish items or services that an 
individual receives as part of a visit to such health care facility), 
the prohibitions on balance billing do not apply if certain notice is 
provided to the participant, beneficiary, or enrollee, and the 
individual acknowledges receipt of the information in the notice and 
consents to waive the balance billing protections with respect to the 
nonparticipating emergency facility or nonparticipating providers to 
which the notice and consent apply. Under the No Surprises Act and 
these interim final rules, with respect to certain types of non-
emergency services furnished by nonparticipating providers in a 
participating health care facility, the notice and consent provisions 
do not apply, meaning the prohibitions on balance billing apply without 
exception.
    Given that the statute and these interim final rules authorize HHS 
to impose civil money penalties on facilities and providers that 
violate these requirements, nonparticipating providers should take 
steps necessary to ensure compliance by, among other actions, 
determining whether a given item or service is being furnished under 
circumstances that would trigger the surprise billing protections. For 
example, nonparticipating providers furnishing non-emergency services 
at a facility must determine whether the facility is a participating 
health care facility to determine whether balance billing protections 
apply. Relatedly, nonparticipating providers and nonparticipating 
emergency facilities will need to timely communicate with plans and 
issuers regarding when the limitations on cost sharing in these interim 
final rules do not apply because the notice and consent criteria 
(described more fully elsewhere in this preamble) have been satisfied. 
These HHS interim final rules address the steps providers and 
facilities must take to ensure the balance billing and cost-sharing 
protections are applied appropriately and consistently with the 
statute.
    HHS also recognizes that compliance with these requirements may 
require nonparticipating providers and nonparticipating emergency 
facilities to refrain from billing an individual directly, even in 
cases that are not subject to these requirements. For example, the 
protections applicable to non-emergency services provided by a 
nonparticipating provider in a participating health care facility apply 
only with respect to services for which benefits are provided or 
covered by the plan or coverage. A nonparticipating provider may not 
have the information necessary to determine whether the services are a 
covered benefit under the plan or coverage. As a result, the 
nonparticipating provider may need to bill the plan or issuer directly 
for the services in order to determine whether the protections apply. 
Otherwise, the provider risks violating the statute and these interim 
final rules by billing individuals. HHS understands that 
nonparticipating providers and facilities frequently bill individuals 
directly for out-of-network services, leaving the individual to submit 
the bill to the plan or coverage. HHS seeks comment on the impact this 
change will have on nonparticipating providers and facilities, and on 
plans and issuers receiving bills from nonparticipating providers and 
facilities.
    In instances where a provider or facility does balance bill a 
participant, beneficiary, or enrollee for services in violation of the 
statute and these interim final rules, the Secretary of HHS (the 
Secretary) may impose civil money penalties in states where HHS is 
directly enforcing the balance billing provisions with respect to 
health care providers, facilities, and providers of air ambulance 
services. However, the statute provides that the Secretary shall waive 
the penalties with respect to a health care provider, facility, or 
provider of air ambulance services who does not knowingly violate, and 
should not have reasonably known it violated, the provisions, with 
respect to a participant, beneficiary, or enrollee, if such provider or 
facility, within 30 days of the violation, withdraws the bill that was 
in violation of such provision and reimburses the health plan or 
individual, as applicable, in an amount equal to the difference between 
the amount billed and the amount allowed to be billed under the 
provision, plus interest, at an interest rate determined by the 
Secretary. HHS intends to address enforcement of the requirements of 
the No Surprises Act applicable to health care providers, facilities, 
and providers of air ambulance services in future rulemaking.
2. Notice and Consent Exception to Prohibition on Balance Billing
    Under the No Surprises Act and these interim final rules, the 
protections that limit cost sharing and prohibit balance billing do not 
apply to certain non-emergency services or to certain post-
stabilization services provided in the context of emergency care, if 
the nonparticipating provider or nonparticipating emergency facility 
furnishing those items or services provides the participant, 
beneficiary, or enrollee, with notice, the individual acknowledges 
receipt of the information in the notice, and the individual consents 
to waive the balance billing protections with respect to the 
nonparticipating emergency facility or nonparticipating providers named 
in the notice.
    Non-emergency services furnished by a nonparticipating provider at 
a participating health care facility are exempt from cost sharing 
protections and balance billing protections when the notice and consent 
requirements are met. In contrast, the notice and consent exception 
does not apply to emergency services, other than post-stabilization 
services, under certain circumstances, or air ambulance services. A 
nonparticipating provider or nonparticipating emergency facility may 
obtain notice and consent from the individual in order to balance bill 
for post-stabilization services only in the case where a participant, 
beneficiary, or enrollee has received emergency services and that 
individual's condition has stabilized, and then only if certain 
additional conditions are met. Such conditions are described later in 
this preamble and codified at 45 CFR 149.410(b).
    If an individual receives a notice, but does not provide (or 
revokes) consent to waive their balance billing protections, those 
protections remain in place. A provider or facility may, subject to 
other state or federal laws, refuse to treat the individual if the 
individual does not consent.\75\ However, the cost-sharing and balance 
billing protections applicable to plans, issuers, providers and 
facilities would apply with respect to any items or services furnished 
by the provider or facility subsequent to the

[[Page 36906]]

provision of the notice, and absent consent.
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    \75\ HHS is aware that some providers and facilities charge fees 
for cancelled appointments. HHS is of the view that an individual 
cannot provide consent freely if a provider or facility will require 
the individual to pay a fee if the appointment is cancelled because 
the individual refuses or revokes consent.
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    The requirements related to the notice and consent exception are 
set forth in section 2799B-2 of the PHS Act, as added by the No 
Surprises Act, and implemented at 45 CFR 149.410 and 45 CFR 149.420 of 
the HHS interim final rules, describing the requirements for post-
stabilization services and non-emergency services, respectively. These 
interim final rules outline the requirements related to the content, 
method, and timing of the notice and consent communications; 
requirements related to language access; exceptions to the 
applicability of the notice and consent process; requirements for the 
retention of notice and consent documents; and requirements to notify 
the plan or issuer regarding consent provided by the participant, 
beneficiary, or enrollee.
i. Standards for Notice
    The No Surprises Act and these interim final rules allow an 
individual to waive balance billing protections only after receiving a 
written notice that includes detailed information designed to ensure 
that individuals knowingly accept out-of-pocket charges (including 
charges associated with balance bills) for care received from a 
nonparticipating provider or nonparticipating emergency facility. In 
HHS's view, the option to consent to waive balance billing protections 
may be valuable to individuals in certain instances where they 
knowingly and purposefully seek care from a nonparticipating provider. 
For example, an individual with a complex health condition may want to 
be treated by a specialist who is not in their plan's network. If that 
specialist will not treat the individual unless the specialist can bill 
the individual directly for the care (and balance bill the individual), 
that individual may want to waive the balance billing protections. HHS 
seeks comment on striking the appropriate balance between allowing a 
specialist to refuse to treat an individual unless the specialist can 
balance bill the individual, while ensuring that the individual is not 
being pressured into waiving the balance billing protections. In HHS's 
view, it is important that these consumer protections do not present a 
barrier to obtaining out-of-network care, when an individual knowingly 
seeks out such care. However, it is equally important that individuals 
are not unknowingly subject to balance billing. Therefore, the No 
Surprises Act and these interim final rules allow an individual to 
waive balance billing protections in limited circumstances only, and 
only if the nonparticipating providers or nonparticipating emergency 
facility have provided the participant, beneficiary, or enrollee with 
appropriate notice explaining the applicable consumer protections and 
the implications of providing consent.
    Section 2799B-2(d)(1)(A) of the PHS Act requires providers and 
facilities to use a written notice specified by HHS in guidance. 
Therefore, these interim final rules require providers and facilities 
to provide the notice using the standard notice document provided by 
HHS in guidance. The standard notice document will contain the elements 
required by the statute in a manner that is intended to be easy to read 
and comprehend. The notice must be provided in accordance with guidance 
issued by HHS. HHS is of the view that requiring use of the standard 
notice will help to ensure that the notice includes the content that is 
required to be included in the notice under the No Surprises Act and 
these interim final rules. Providers and facilities will need to tailor 
the document in each case to include information specific to the 
individual (for example, by identifying the provider or facility, as 
applicable, and adding the good faith estimated amount).
    HHS is concerned that individuals may be less likely to review the 
notice carefully if it is embedded within other information or provided 
with additional consent forms. Therefore, these interim final rules 
require that the notice be provided with the consent document, and 
together these documents be given physically separate from, and not 
attached to or incorporated into any other documents. Providers and 
facilities must provide the notice within the required timeframe. The 
notice must be written and provided on paper, or, as practicable, 
electronically, as selected by the individual. The notice must meet 
applicable language access requirements, as described in this HHS 
interim final rule. A participating health care facility may provide 
the notice on behalf of the nonparticipating provider.\76\
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    \76\ However, if a facility that has agreed to provide the 
notice on behalf of the nonparticipating provider fails to provide 
the notice and obtain consent, or provides notice and obtains 
consent in a manner that does not satisfy the regulatory 
requirements in these interim final rules, the notice and consent 
criteria would not be considered to be met. Therefore, the cost-
sharing and balance billing protections would continue to apply to 
the items and services furnished by the nonparticipating provider.
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Authorized Representatives
    The notice may be provided to the individual's authorized 
representative instead of the individual, and consent may be provided 
by the authorized representative on behalf of the individual. These 
interim final rules specify that for purposes of 45 CFR 149.410 and 
149.420, an authorized representative is an individual authorized under 
state law to provide consent on behalf of the participant, beneficiary, 
or enrollee, provided that the individual is not a provider affiliated 
with the facility or an employee of the facility, unless such provider 
or employee is a family member of the participant, beneficiary, or 
enrollee. Although treating providers may be authorized under state law 
to provide consent to treatment, HHS is of the view that providers 
should generally not be permitted to receive notice or provide consent 
regarding treatment by a nonparticipating provider or facility because 
of the strong likelihood of an inherent financial or professional 
conflict of interest. These same concerns extend to employees of the 
facility at which the items or services are furnished. HHS is also of 
the view that these concerns are not warranted for providers or 
facility employees that are family members of the individual, because 
of their presumed interest in the well-being of the individual, or 
providers that are unaffiliated with the provider or facility 
furnishing the care. HHS is of the view that these limitations provide 
important consumer protections to ensure that an individual's 
authorized representative is acting in the individual's best interest 
rather than the interests of the provider or facility. HHS seeks 
comment on whether and how the term ``family member'' should be 
defined. HHS is sensitive to concerns that some individuals may not 
have a familial relation formally recognized under applicable state 
law, or other documented legal partnership with individuals whom they 
consider family. Therefore, when interpreting this requirement, HHS 
will construe the term ``family member'' broadly to include such 
individuals prior to the issuance of additional guidance.
Timing of Notice
    In order to ensure that a participant, beneficiary, enrollee, or 
authorized representative has an opportunity to properly review and 
consent to a notice to receive items or services furnished by a 
nonparticipating provider or nonparticipating emergency facility and 
waive balance billing protections, the provider or facility must 
provide such a notice in the timeframe specified in the statute and 
this interim final rule. As specified in section 2799B-2(d) of the PHS 
Act, if an individual schedules an

[[Page 36907]]

appointment for such items or services at least 72 hours before the 
date of the appointment, the provider or facility must provide the 
notice to the individual, or their authorized representative, no later 
than 72 hours before the date of the appointment; and if an individual 
schedules an appointment for such items or services within 72 hours of 
the date of the appointment, the provider or facility must provide the 
notice to the individual, or their authorized representative, on the 
day that the appointment is made. In addition, these interim final 
rules specify that in the situation where an individual is provided the 
notice on the same day that the items or services are furnished, 
providers and facilities are required to provide the notice no later 
than 3 hours prior to furnishing items or services to which the notice 
and consent requirements apply.
    This 3-hour requirement is intended to address situations where an 
individual might be asked to provide consent immediately before a 
provider furnishes the item or service, which may prevent their consent 
from being truly voluntary. Stakeholders have recommended that notice 
and consent procedures be unavailable when an individual visits a 
participating facility and receives care from a nonparticipating 
provider from whom the individual did not seek out services (for 
example, if a specialist furnishes an unexpected consultation on the 
recommendation of the attending physician). Stakeholders expressed 
concern that such providers might provide the notice at the time they 
appear for the consultation, and the individual might feel compelled to 
consent to receive care. HHS is of the view that the requirement that 
the notice be provided no later than 3 hours prior to furnishing items 
or services helps to ensure individuals can voluntarily provide 
informed consent, while not removing the informed consent option 
entirely in instances where the appointment is made the same day as the 
date the services are scheduled. HHS seeks comment on whether such a 
time limit is a reasonable approach, as well as whether the 3 hours' 
time requirement should be shorter or longer, in order to best ensure 
that consent is freely given while also facilitating timely access to 
care. For example, HHS is interested in understanding if there are 
situations where this time requirement may unduly delay access to 
urgently necessary care, including in the post-stabilization care 
context.\77\ Alternatively, HHS is interested in understanding if more 
time may be necessary for an individual to read, understand, and 
consider their options, including considering whether they can resolve 
prior authorization or other care management limitations, before 
voluntarily consenting to treatment. HHS is also interested in whether 
these timing requirements present barriers to providers' and 
facilities' ability to comply with the requirement that the notice and 
consent documents be provided to the individual in paper or, as 
practicable, electronic form, as selected by the individual.
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    \77\ A provider or facility is never required to provide notice 
and seek consent from a participant, beneficiary, or enrollee. To 
the extent a provider is concerned that the 3 hours' prior 
requirement will result in a delay in care that is detrimental to 
the individual, the provider or facility can furnish the items or 
services, subject to the balance billing protections, rather than 
providing notice and seeking consent to waive the protections.
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Content of Notice
    As stated previously, a provider or facility must provide the 
written notice using the form specified by HHS in guidance, customized 
to include the information specified in 45 CFR 149.420(d) (and 45 CFR 
149.410(b)(2), for post-stabilization services, as applicable).
    The notice must state that the health care provider furnishing the 
items or services is a nonparticipating provider, or that the health 
care facility furnishing the items or services is a nonparticipating 
emergency facility, as applicable, with respect to the health plan or 
coverage. The provider or facility will need to customize the form to 
identify the provider or facility by name. This will help ensure 
individuals understand for which specific providers or facilities they 
would be waiving their balance billing protections.
    The notice must include the good faith estimated amount that such 
nonparticipating provider or nonparticipating emergency facility may 
charge the individual for the items and services involved, including 
any item or service that the nonparticipating provider reasonably 
expects to provide in conjunction with such items and services. In the 
case of a nonparticipating emergency facility, the notice must include 
the good faith estimate for such items or services that would 
reasonably be expected to be provided by the nonparticipating emergency 
facility or by nonparticipating providers as part of the visit at such 
facility. HHS is including the requirement regarding disclosing items 
and services reasonably expected to be provided in order to ensure that 
the participant, beneficiary, or enrollee has an accurate understanding 
of the cost of care. As discussed in section IV.A.2.iv of this 
preamble, individuals cannot waive the balance billing protections for 
items or services furnished as a result of unforeseen, urgent medical 
needs that arise at the time an item or service is furnished for which 
the nonparticipating provider or nonparticipating facility satisfied 
the notice and consent criteria.
    Nonparticipating providers who are providing this notice are 
required to provide a good faith estimate for only the items or 
services that they would be furnishing and are not required to provide 
a good faith estimate for items or services furnished by other 
providers at the facility. However, if a nonparticipating provider has 
not satisfied the notice and consent criteria, balance billing and 
cost-sharing protections will apply to the individual with respect to 
items and services furnished by that nonparticipating provider, even if 
a different nonparticipating provider has satisfied the notice and 
consent criteria with respect to the same visit. If they choose, 
multiple nonparticipating providers that are furnishing related items 
and services for an individual may provide a single notice to the 
individual, provided that: (1) Each provider's name is specifically 
listed on the notice document; (2) each provider includes in the notice 
a good faith estimate for the items and services they are furnishing, 
and the notice specifies which provider is providing which items and 
services within the good faith estimate; and (3) the individual has the 
option to consent to waive balance billing protections with respect to 
each provider separately.
    HHS is of the view that an individual cannot consent to waive 
balance billing and cost-sharing protections unless they have been 
informed of their potential liability with respect to both the facility 
and provider charges related to receiving post-stabilization services 
at a nonparticipating emergency facility. Therefore, nonparticipating 
emergency facilities must include in the written notice the good faith 
estimated amount that the participant, beneficiary, or enrollee may be 
charged for items or services furnished by the nonparticipating 
emergency facility or by nonparticipating providers with respect to the 
visit at such facility (including any item or service that is 
reasonably expected to be furnished by the nonparticipating emergency 
facility or nonparticipating providers in conjunction with such items 
or

[[Page 36908]]

services). HHS seeks comment regarding potential challenges 
nonparticipating emergency facilities may have in coordinating the 
development of a good faith estimate on behalf of both the facility and 
providers. To the extent that the nonparticipating facility omits from 
the good faith estimate information about items and services provided 
by a nonparticipating provider, the notice and consent criteria will be 
not be considered met for items and services furnished by that 
provider, and the requirements in 45 CFR 149.410(a) (and the 
corresponding requirements on plans and issuers) would apply.
    HHS is aware that nonparticipating providers and nonparticipating 
emergency facilities generally are unable to calculate what an 
individual's final out-of-pocket costs (inclusive of balance bills) 
will be for items and services partially or wholly covered by the 
individual's plan or coverage. Therefore, the good faith estimated 
amount should reflect the amount the provider or facility expects to 
charge for furnishing such items or services, even if the provider or 
facility intends to bill the plan or coverage directly. In calculating 
this good faith estimated amount, the provider or facility is expected 
to apply the same process and considerations used to calculate the good 
faith estimate that is required under section 2799B-6(2) of the PHS 
Act. HHS seeks comment regarding the method by which this good faith 
estimated amount should be calculated, and anticipates addressing this 
requirement in future rulemaking. The notice must make clear that the 
provision of the good faith estimate in the notice, or the individual's 
consent to be treated, does not constitute a contract with respect to 
the charges estimated for such items and services, or a contract that 
binds the participant, beneficiary, or enrollee to be treated by that 
provider or facility. HHS seeks comment regarding whether the provider 
or the facility should be required to include information about what 
may be covered by the individual's plan or coverage and an estimate of 
the individual's out-of-pocket costs.
    The notice must provide information about whether prior 
authorization or other care management limitations may be required in 
advance of receiving such items or services at the facility or from the 
provider. HHS recognizes that there may be challenges for 
nonparticipating providers or facilities to identify what prior 
authorization and other care management limitations may apply with 
respect to a plan or coverage in which they do not participate. 
Therefore, providers and facilities may provide general information in 
order to satisfy this requirement, but to the extent possible, HHS 
encourages them to contact the issuer or plan about any such 
limitations so that they can include specific information in the 
notice. HHS interprets this statutory provision to require information 
on prior authorization or care management requirements to extend to 
care furnished by both providers and facilities, in order for 
participants, beneficiaries, and enrollees to understand all 
requirements associated with their care before they consent to 
treatment and balance billing. Requiring that the notice include 
specificity regarding prior authorization or care management 
requirements could improve the usefulness of the information to 
individuals compared to general information about what requirements may 
apply, but may make providing notices overly burdensome for providers 
and facilities. HHS seeks comment on whether providers and facilities 
should instead be required to include in the notice specific 
information about any prior authorization and care management 
requirements that apply to any items and services covered under the 
notice. HHS also seeks comment on barriers or other burdens facing 
nonparticipating providers or facilities in obtaining this information 
from a plan or issuer.
    The notice must clearly state that the individual is not required 
to consent to receive such items or services from such nonparticipating 
provider or nonparticipating emergency facility. The notice must state 
that the individual may instead seek care from an available 
participating provider or at a participating emergency facility, with 
respect to the plan or coverage, as applicable, and that in such cases, 
in-network cost-sharing amounts will apply.
    In cases where post-stabilization services are being furnished by a 
nonparticipating provider at a participating emergency facility, the 
notice must include a list of any participating providers at the 
participating emergency facility who are able to furnish the items or 
services involved. The notice must inform the individual that they may 
be referred, at their option, to such a participating provider. HHS 
seeks comment regarding the format and content of the referral list to 
be included in the notice, including any challenges that providers may 
have in providing this information, and any further requirements that 
should be applied to providers when furnishing this information to the 
individual.
ii. Standards for Consent
    In order to meet the notice and consent requirements of the No 
Surprises Act and these interim final rules, the nonparticipating 
provider, participating health care facility on behalf of the 
nonparticipating provider, or nonparticipating emergency facility must 
obtain from the participant, beneficiary, or enrollee the individual's 
acknowledgment that they consent to be treated and balance billed by 
the nonparticipating emergency facility or nonparticipating provider 
under circumstances where the individual elects to receive such items 
or services. The consent must be provided voluntarily, meaning that the 
individual has consented freely, without undue influence, fraud, or 
duress. An incomplete consent document will be treated as a lack of 
consent and balance billing protections will still apply.
    As with the notice document, providers and facilities must use the 
standard consent document specified by HHS in guidance, and the consent 
document must be provided in accordance with such guidance. The consent 
document, specified in guidance, contains the information (or fillable 
fields for the information) required to be included in the consent form 
under these interim final rules, and described further in this section 
of the preamble. Providers and facilities will need to tailor the 
document to include information specific to the individual. In 
addition, as discussed previously, these interim final rules require 
that the consent be accompanied by the notice document, and that these 
documents be given together at the same time, physically separate from 
and not attached to or incorporated into any other documents. The 
consent document must be signed (including by electronic signature) by 
the individual, or the individual's authorized representative.
    The nonparticipating provider, participating health care facility 
on behalf of the nonparticipating provider, or nonparticipating 
emergency facility must provide the individual with a copy of the 
signed notice and consent in-person, or through mail or email, as 
selected by the individual.
    The notice and consent documents must meet applicable language 
access requirements, as described in these interim final rules. The 
signed consent document must acknowledge that the individual has been 
provided with the written notice as described in these interim final 
rules, in the form selected by the individual. The signed consent 
document must also acknowledge that

[[Page 36909]]

the individual has been informed that the payment made by the 
individual might not accrue toward meeting any limitation that the plan 
or coverage places on cost sharing, including an explanation that the 
payment might not apply to an in-network deductible or out-of-pocket 
maximum under the plan or coverage.
    The consent document must state that, by signing the consent 
document, the individual agrees to be treated by the nonparticipating 
provider or nonparticipating emergency facility and understands that 
the individual may be balance billed and subject to cost-sharing 
requirements that apply to services furnished by nonparticipating 
providers or nonparticipating emergency facilities. In the case of a 
nonparticipating provider seeking consent, by signing the consent 
document, the individual agrees to waive balance billing and cost-
sharing protections for only the items or services furnished by the 
provider or providers specifically named in the notice. In HHS's view, 
an individual cannot provide informed consent to waive balance billing 
protections with respect to an unnamed provider, as the individual 
would not be on notice that the individual may be balance billed for 
items or services furnished by that provider. In addition, the 
individual may choose to consent to waive balance billing protections 
with respect to items or services furnished by none, some, or all of 
the nonparticipating providers listed in the notice.
    The signed consent document must include the date on which the 
individual received the written notice and the date on which the 
individual signed such consent to be furnished the items or services 
covered in the notice. In order to ensure that consent is provided 
prior to when the item or service is received, HHS also requires that 
the signed consent document include the time at which the individual 
signed the consent.
    The signed consent provided by the individual constitutes the 
individual's consent to the receipt of the information contained in the 
notice document, and includes an acknowledgement that they may be 
balance billed for the receipt of the items or services. The consent 
does not constitute a contractual agreement with regard to any 
estimated charge or amount included in the notice or consent document, 
or a contract that binds the participant, beneficiary, or enrollee to 
be treated by that provider or facility. Consent obtained by the 
provider or facility under this notice and consent process in no way 
substitutes for or modifies requirements for informed medical consent 
otherwise required of the provider or facility, under state law or 
codes of medical ethics.
    The participant, beneficiary, or enrollee may revoke consent by 
notifying the provider or facility in writing prior to the furnishing 
of the items or services. If an individual revokes consent, the balance 
billing protections apply to applicable items or services provided 
after the revocation as if consent was never provided. HHS is of the 
view that the option to revoke consent is a critical safeguard to 
ensure that balance billing protections are waived only when 
individuals knowingly, purposefully, and freely provide informed 
consent. HHS seeks comment on whether additional rulemaking or guidance 
is needed on how an individual can revoke consent.
iii. Language Access
    A nonparticipating provider or nonparticipating emergency facility 
providing a participant, beneficiary, or enrollee, or such individual's 
authorized representative, with a notice under section 2799B-2(d) of 
the PHS Act must make the notice available in any of the 15 most common 
languages in the geographic region in which the applicable facility is 
located. HHS is of the view that individuals cannot provide meaningful 
consent if they cannot understand the information provided in the 
written notice and consent documents. These interim final rules, 
therefore, also require that the notice and consent document be made 
available in any of the 15 most common languages in the geographic 
region in which the applicable facility is located. Providers and 
facilities will need to translate the standard notice and consent 
documents specified by HHS in guidance into the applicable 15 
languages.
    A provider or facility meets this requirement if it provides the 
notice and consent documents in the 15 most common languages in its 
state. However, HHS recognizes that in some cases, particularly in 
larger states or metropolitan areas, these 15 languages may not 
adequately represent the languages spoken by the population served by 
the provider or facility.\78\ Therefore, the provider or facility may 
alternatively choose to provide the notice and consent documents in the 
15 most common languages in its geographic region, which reasonably 
reflects the geographic region served by the applicable facility. For 
example, a facility that serves the greater Los Angeles area may choose 
to provide the notice and consent documents in the 15 most common 
languages within that geographic region, instead of the 15 most common 
languages in the state of California.
---------------------------------------------------------------------------

    \78\ See, e.g., ``Understanding Communication and Language Needs 
of Medicare Beneficiaries'' (2017), https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Issue-Briefs-Understanding-Communication-and-Language-Needs-of-Medicare-Beneficiaries.pdf 
(``The common languages in a given region, city, or town may vary 
greatly from those spoken in the state or in the U.S. as a 
whole.'').
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    HHS considered different standards to apply in defining such 
geographic regions, and is seeking comment regarding the appropriate 
standard. HHS's objective is to implement a standard that ensures that 
the language accessibility requirement is responsive to the needs of 
the individuals served by the provider or facility, while mitigating 
inconsistencies in the way that such geographic regions are determined. 
HHS is interested in comments regarding the use of metropolitan 
statistical areas (MSAs),\79\ hospital service areas (HSAs),\80\ 
hospital referral regions (HRRs),\81\ and public use microdata areas 
(PUMAs),\82\ applied based on where the applicable facility is located, 
as well as other standards that may be well-suited for this purpose. 
HHS also seeks comment on what language access standards would be 
appropriate in circumstances where the applicable facility serves 
populations in multiple states.
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    \79\ https://www.census.gov/programs-surveys/metro-micro/about.html.
    \80\ https://www.dartmouthatlas.org/faq/.
    \81\ https://www.dartmouthatlas.org/faq/.
    \82\ https://www.census.gov/programs-surveys/geography/guidance/
geo-areas/
pumas.html#:~:text=Public%20Use%20Microdata%20Areas%20(PUMAs)%20are%2
0non% 2Doverlapping%2C,and%20the%20U.S.%20Virgin%20Islands.
---------------------------------------------------------------------------

    As noted earlier in this section, HHS is of the view that 
individuals cannot provide meaningful consent if they cannot understand 
the information provided in the written notice and consent document. 
These interim final rules, therefore, add a language access requirement 
to address circumstances in which the individual cannot understand any 
of the 15 languages in which the notice and consent document are 
available. If the individual's preferred language is not among the 15 
most common languages in which the documents are made available by the 
nonparticipating provider or nonparticipating emergency facility, or 
the individual cannot understand the language in which the notice and 
consent documents are provided, as self-reported by the individual, the

[[Page 36910]]

notice and consent requirements described in these interim final rules 
are not met unless the provider or facility furnishes the individual 
with a qualified interpreter.
    The provider or facility should provide the notice and consent 
documents, or the qualified interpretive services, as applicable, in 
the individual's self-reported, preferred language. Individuals should 
be asked what language they prefer to communicate in regarding health 
care information, for written or verbal communication, as applicable. 
An individual's preference might not be the same for written and verbal 
communication, and an individual's preference might not correlate with 
the individual's native language.
    In interpreting the statutory requirements regarding language 
access in the notice and consent process, HHS recognizes communication, 
language, and literacy barriers are associated with decreased quality 
of care, poorer health outcomes, and increased utilization.\83\ 
Alternatively, the use of appropriate language services and at 
appropriate literacy levels in health care settings is associated with 
increased quality of care, improved patient safety outcomes, and lower 
utilization of costly medical procedures.\84\ HHS is of the view that 
it is imperative that health care providers and facilities take these 
efforts to provide the required notice and consent information in a 
manner understandable to the participant, beneficiary, or enrollee, to 
help achieve the goal of the statute and ensure that individuals are 
aware their rights and the options available to them.
---------------------------------------------------------------------------

    \83\ Batencourt, J.R., et al., Improving Patient Safety Systems 
for Patients with Limited English Proficiency: A Guide for 
Hospitals, Agency for healthcare Research and Quality, Publication 
No. 12-0041, September 2012; Proctor, K. et al., The Limited English 
Proficient Population: Describing Medicare, Medicaid, and Dual 
Beneficiaries, Health Equity Vol. 2.1, 2018; Green, A.R. and Nze, C. 
Language-Based Inequity in Health Care: Who is the ``Poor 
Historian''?, American Medical Association Journal of Ethics, Vol. 
19, Number 3: 263-271, March 2017; Shamsi, H. et al., Implications 
of Language Barriers for Healthcare: A Systematic Review, Oman 
Medical Journal, Vol. 53, No. 2:e122, 2020; de Moissac, D., Bowen, 
S., Impact of Language Barriers on Quality of Care and Patient 
Safety for Official Language Minority Francophones in Canada, 
Journal of Patient Experience, Vol. 6(1) 24-32, 2019; Napoles, A.N., 
et al., Inaccurate Language Interpretation and its Clinical 
Significance in the Medical Encounters of Spanish-speaking Latinos, 
Med Care. 2015 November; 53(11): 940-947; Divi, C., et al., Language 
Proficiency and Adverse Events in U.S. Hospitals: a Pilot Study, 
Int'l Journal for Quality in Health Care, vol. 19, no.2; Ali, P.A. 
and Watson, R., Language Barriers and their Impact of Provision of 
Care to Patients with Limited English Proficiency: Nurses 
Perspective, J. Clin. Nurs., 2018 Mar;27(5-6); Flores G. Language 
barriers to health care in the United States. N Engl J Med 2006; 
355:229-231. Ku L, and Flores G. Pay now or pay later: Providing 
interpreter services in health care. Health Affairs. 2005;24(2): 
435-444; Hampers L.C., et al. Language barriers and resource 
utilization in a pediatric emergency department. Pediatrics. 1999; 
103(6): 1253-1256; Dewalt D.A., et al. Literacy and health outcomes: 
A systematic review of the literature. J. Gen Intern Med. 
2004;19(12):1228-1239. doi:10.1111/j.1525-1497.2004.40153.x.
    \84\ Id.
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    Providers and facilities are also required to comply with other 
state and federal laws regarding language access, to the extent 
applicable. HHS reminds health care providers and facilities that 
recipients of federal financial assistance must comply with federal 
civil rights laws that prohibit discrimination. These laws include 
section 1557 of the Affordable Care Act,\85\ title VI of the Civil 
Rights Act of 1964,\86\ section 504 of the Rehabilitation Act of 
1973,\87\ and the Americans with Disabilities Act of 1990.\88\ Section 
1557 and title VI require covered entities to take reasonable steps to 
ensure meaningful access to individuals with limited English 
proficiency, which may include provision of language assistance 
services such as written translation of written content in paper or 
electronic form into languages other than English. Section 1557 and 
section 504 require covered entities to take appropriate steps to 
ensure effective communication with individuals with disabilities, 
including provision of appropriate auxiliary aids and services at no 
cost to the individual. Auxiliary aids and services may include 
interpreters, large print materials, accessible information and 
communication technology, open and closed captioning, and other aids or 
services for persons who are blind or have low vision, or who are deaf 
or hard of hearing. Information provided through information and 
communication technology also must be accessible to individuals with 
disabilities, unless certain exceptions apply. Consistent with 
Executive Order 13985 and civil rights protections cited in these 
regulations, HHS particularly seeks comments from minority and 
underserved communities including those with limited English 
proficiency and those with disabilities who prefer information in 
alternate and accessible formats, and stakeholders who serve such 
communities, on whether the provisions and protections related to 
communication, language, and literacy sufficiently address barriers 
that exist to ensuring all individuals can read, understand, and 
consider their options related to notice and consent. HHS also seeks 
comment on what additional or alternate policies HHS may consider to 
help address and remove such barriers.
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    \85\ 42 U.S.C. 18116.
    \86\ 42 U.S.C. 2000d et seq.
    \87\ 269 U.S.C. 794.
    \88\ 42 U.S.C. 12101 et seq.
---------------------------------------------------------------------------

    HHS understands that the technical nature of these protections may 
inherently pose barriers to individuals or their authorized 
representatives as they consider their options. Numerous studies have 
indicated that consumer comprehension of common health insurance 
concepts is varied and that many are not able to accurately answer 
questions about their health plan's benefit design or health care 
costs.\89\ Individuals may also face intersecting and overlapping 
barriers (commonly referred to as the Social Determinants of Health) as 
they interact with the health care system, in addition to numerous 
technical forms and documents as part of receiving care. HHS solicits 
comment on how to best strike the balance between consumer friendliness 
and usability of such documents, while ensuring that they are 
consistent with these interim final rules and the statutory intent. HHS 
specifically seeks comment from those with experience in supporting 
individuals with low health literacy, including providers, patient 
advocates, and navigators, as well as those with experience in user 
design, in order to ensure that documents conveying these protections 
and opportunities to convey notice and consent are understandable and 
accurate.
---------------------------------------------------------------------------

    \89\ https://www.policygenius.com/blog/health-insurance-literacy-survey-2019/; https://www.cmu.edu/dietrich/sds/docs/loewenstein/ConsumerMisUnderstandHealthIns.pdf.
---------------------------------------------------------------------------

iv. Exceptions to the Availability of Notice and Consent
    The notice and consent exception is not applicable with respect to 
some non-emergency items or services.\90\ Instead, the prohibition on 
balance billing and the in-network cost-sharing requirements, as 
described in these interim final rules, always apply with respect to 
those items or services. In addition, the exception for notice and 
consent is not applicable with respect to emergency services, except 
for post-stabilization services, under certain conditions.
---------------------------------------------------------------------------

    \90\ 45 CFR 149.420(b) applies in cases of non-emergency 
services furnished by a nonparticipating provider at a participating 
facility and not in cases of emergency services. Additionally, 45 
CFR 149.410(c) specifies that the notice and consent exception for 
post-stabilization services does not apply to items or services 
furnished as a result of unforeseen, urgent medical needs that arise 
at the time a post-stabilization service is furnished for which the 
nonparticipating provider or nonparticipating emergency facility 
already satisfied the notice and consent criteria.
---------------------------------------------------------------------------

    First, as specified in section 2799B-2(b) of the PHS Act, with 
respect to non-

[[Page 36911]]

emergency services, the notice and consent exception does not apply to 
ancillary services, which include items and services related to 
emergency medicine, anesthesiology, pathology, radiology, and 
neonatology, whether provided by a physician or non-physician 
practitioner; items and services provided by assistant surgeons, 
hospitalists, and intensivists; diagnostic services, including 
radiology and laboratory services; and items and services provided by a 
nonparticipating provider, only if there is no participating provider 
who can furnish such item or service at such facility.
    Additionally, as specified in section 2799B-2(c) of the PHS Act, 
the notice and consent exception does not apply to items or services 
furnished as a result of unforeseen, urgent medical needs that arise at 
the time an item or service is furnished for which a nonparticipating 
provider satisfied the notice and consent criteria. For example, even 
if an individual has consented to waive balance billing and in-network 
cost-sharing protections with respect to items and services provided by 
certain nonparticipating providers related to a knee surgery, that 
individual has not consented, nor are providers permitted to seek 
consent under the statute and these interim final rules, to waive those 
protections with respect to unforeseen, urgent medical needs that arise 
during the knee surgery. Because individuals lack the requisite 
information to provide informed consent to waive balance billing and 
cost-sharing protections with respect to unforeseen, urgent medical 
needs, HHS has determined that the rationale for the statutory 
exception for notice and consent to not extend to unforeseen, urgent 
medical needs with respect to non-emergency services also applies to 
unforeseen, urgent post-stabilization services. Therefore, these 
interim final rules provide that any notice provided and consent 
obtained with regard to the furnishing of certain items or services 
does not extend to additional items or services furnished in response 
to unforeseen, urgent medical needs either in the context of a 
nonparticipating provider in a participating facility, or of post-
stabilization services.
    The statute authorizes HHS to expand the definition of ancillary 
services to include items and services provided by other types of 
providers. HHS seeks comment on other ancillary services that should be 
considered to be made ineligible for the notice and consent exception. 
In particular, HHS is interested in comments on whether there are other 
ancillary services for which individuals are likely to have little 
control over the particular provider who furnishes items or services. 
HHS is of the view that it is with respect to these types of providers 
that notice and consent procedures are least appropriate. HHS is also 
interested in comments regarding the types of ancillary services for 
which surprise bills are most common, and whether they should be added 
to the definition of ancillary services that are not subject to the 
notice and consent exception. Finally, HHS seeks comment on what 
criteria HHS should use in determining whether other ancillary services 
should be added to the definition.
    Furthermore, the statute authorizes HHS to specify a list of 
advanced diagnostic laboratory tests that would not be considered 
ancillary services under this definition. Any such advanced diagnostic 
laboratory tests would still be subject to the surprise billing 
protections described in these interim final rules, but the notice and 
consent exemption process would also be available for these tests. HHS 
seeks comment on what criteria HHS should consider in determining 
whether an advanced diagnostic laboratory test should be excepted from 
the definition of ancillary services, and on any specific advanced 
diagnostic laboratory tests that should be considered to be made 
eligible for the notice and consent exception.
v. Retention of Certain Documents
    Under Section 2799B-2(e) of the PHS Act and these interim final 
rules, nonparticipating emergency facilities, participating health care 
facilities, and nonparticipating providers are required to retain 
written notice and consent documents for at least a 7-year period after 
the date on which the item or service in question was furnished. 
Specifically, when a nonparticipating emergency facility obtains a 
signed consent from a participant, beneficiary, or enrollee, or such 
individual's authorized representative, for an item or service 
furnished to the individual by the facility or any nonparticipating 
provider at such facility, the facility must retain the written notice 
and consent for the 7-year period. Similarly, when a participating 
health care facility obtains a signed consent from a participant, 
beneficiary, or enrollee, or such individual's authorized 
representative, for an item or service furnished to the individual by a 
nonparticipating provider at such facility, the facility must retain 
the written notice and consent for a 7-year period. If a 
nonparticipating provider obtains a signed consent from a participant, 
beneficiary, or enrollee, or such individual's authorized 
representative, where the facility does not otherwise obtain the 
consent on behalf of the provider, the provider may either coordinate 
with the facility so that the facility retains the written notice and 
consent for a 7-year period, or the provider must retain the written 
notice and consent for a 7-year period. HHS interprets the retention 
requirement to apply to providers as well as facilities, in order to 
ensure that all notice and consent documents are appropriately 
retained, regardless of how they are obtained.
vi. Requirements To Notify the Plan or Issuer
    For each item or service furnished by a nonparticipating provider 
or nonparticipating emergency facility, the provider (or participating 
facility on behalf of the nonparticipating provider) or 
nonparticipating emergency facility, as applicable, must timely notify 
the plan or issuer as to whether balance billing and in-network cost 
sharing protections apply to the item or service, and provide to the 
plan or issuer a signed copy of any signed written notice and consent 
documents. With respect to non-emergency services described in 45 CFR 
149.410(a), the nonparticipating provider (or the participating 
facility on behalf of the provider) must timely notify the plan or 
issuer that the item or service was furnished during a visit at a 
participating health care facility. With respect to post-stabilization 
services, the nonparticipating provider or nonparticipating emergency 
facility must notify the plan or issuer as to whether all the 
conditions described in 45 CFR 149.410(b) are met with respect to each 
of the items and services for which the bill is submitted. With respect 
to non-emergency services only, in instances where the nonparticipating 
provider bills the participant, beneficiary, or enrollee directly 
(where permitted under these interim final rules), the provider (or 
participating health care facility on behalf of the provider) may 
satisfy the requirement to timely notify the plan or issuer by 
including the notification with the bill to the individual.
    In interpreting the statutory requirements, HHS recognizes that it 
is critical that a group health plan or health insurance issuer have 
knowledge of whether the balance billing and in-network cost-sharing 
requirements apply, including whether an item or service is furnished 
during a visit at a participating health care facility and if any 
notice was provided and consent given what items and services were 
consented to, where such items and

[[Page 36912]]

services would otherwise be subject to the balance billing protections. 
This information is crucial for the plan or issuer to be able to 
appropriately assign cost sharing and adjudicate the claim in 
compliance with the No Surprises Act. These interim final rules require 
the provider or facility to notify the plan or issuer so that the plan 
or issuer is aware when the balance billing and in-network cost sharing 
protections apply and can process the claim appropriately.\91\
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    \91\ The Departments note that whether a provider or facility 
provides such a notification to the plan or issuer and whether a 
plan or issuer processes a claim as if notice and consent were 
obtained based on a provider's notification is not determinative of 
whether the balance billing protections apply. A participant, 
beneficiary, or enrollee who is balance billed or whose cost-sharing 
responsibility is calculated at out-of-network rates would still be 
able to contend that they did not receive sufficient notice or did 
not provide consent, and challenge the provider or facility's right 
to balance bill them, as well as and the plan or issuer's handling 
of the claim.
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    HHS seeks comment on whether additional rulemaking would be helpful 
regarding the process and timing for such notification, including the 
definition of `timely,' and what processes for conveying the 
notification would be most efficient, including existing processes that 
could be leveraged to convey the information. HHS is particularly 
interested in comments regarding the requirement that providers or 
facilities provide to the plan or issuer a copy of the signed written 
notice and consent document, including comments on barriers and burdens 
associated with such requirement, and recommendations on how best to 
ensure plans and issuers have information regarding the notice and 
consent documents without imposing undue burden on providers and 
facilities.
3. Provider and Facility Disclosure Requirements Regarding Patient 
Protections Against Balance Billing
    Section 2799B-3 of the PHS Act, added by the No Surprises Act, 
requires providers and facilities to provide disclosures regarding 
patient protections against balance billing. Among other things, the 
statute requires health care providers and facilities (including an 
emergency department of a hospital or independent freestanding 
emergency department) to make publicly available, post on a public 
website of the provider or facility (if applicable), and provide to 
participants, beneficiaries, and enrollees a one-page notice about the 
balance billing requirements and prohibitions that apply to the 
provider or facility under sections 2799B-1 and 2799B-2 of the PHS Act. 
The notice must include information about any applicable state 
requirements, and about how to contact appropriate state and federal 
agencies if the individual believes the provider or facility has 
violated the balance billing rules. These interim final rules codify 
the statutory requirements and information that these disclosures must 
include. In addition, as stated previously, under section 9820(c) of 
the Code, section 720(c) of ERISA, and section 2799A-5(c) of the PHS 
Act, plans and issuers must provide information in plain language on 
the prohibition against balance billing and information on contacting 
appropriate state and federal agencies in the case that an individual 
believes that such a provider or facility has violated the prohibition 
against balance billing. These disclosure requirements are applicable 
for plan years beginning on or after January 1, 2022. To reduce burden 
and facilitate compliance with these disclosure requirements, the 
Departments are concurrently issuing a model disclosure notice that 
health care providers, facilities, group health plans, and health 
insurance issuers may, but are not required to, use to satisfy the 
disclosure requirements regarding the balance billing protections. The 
Departments will consider use of the model notice in accordance with 
the accompanying instructions to be good faith compliance with the 
disclosure requirements of section 9820(c) of the Code, section 720(c) 
of ERISA, and section 2799A-5(c) of the PHS Act, if all other 
applicable requirements are met. The Departments may address these 
requirements in more detail in future guidance or rulemaking. Until 
such guidance or rulemaking implementing the requirements under section 
9820(c) of the Code, section 720(c) of ERISA, and section 2799A-5(c) of 
the PHS Act becomes effective and applicable, plans and issuers should 
exercise good-faith compliance with those statutory provisions.
    These disclosures are critical to helping raise awareness and 
enhance the public's understanding of state and federal balance billing 
protections. The purpose of these disclosures is to empower individuals 
to better understand the balance billing protections afforded under 
applicable state and federal law. In addition, these disclosures are 
important in ensuring individuals are able to identify violations of 
these interim final rules and related state law requirements and, if 
necessary, file complaints against providers and facilities. These 
disclosures further the efforts to help achieve the goals of the No 
Surprises Act and ensure that individuals are aware of their rights and 
the options available to them. These interim final rules codify the 
provider and facility disclosure requirements at 45 CFR 149.430. These 
requirements apply to health care providers and health care facilities 
(including independent freestanding emergency departments). These 
interim final rules outline requirements regarding the content of the 
one-page disclosure, methods for disclosure, timing of disclosure to 
individuals, exceptions to the requirements, and a special rule to 
prevent unnecessary duplication with respect to providers. These 
disclosure requirements do not apply to providers of air ambulance 
services, as section 2799B-3 of the PHS Act requires providers and 
facilities to disclose information regarding the requirements and 
prohibitions applicable to the provider or facility under sections 
2799B-1 of the PHS Act (relating to balance billing for emergency 
services) and 2799B-2 of the PHS Act (relating to balance billing for 
non-emergency services furnished by nonparticipating providers at 
certain participating facilities), but not under section 2799B-5 of the 
PHS Act (relating to balance billing for air ambulance services). 
Although this provision does not apply to providers of air ambulance 
services, as the definition of health care providers in 45 CFR 149.30 
excludes providers of air ambulance services, HHS encourages providers 
of air ambulance services to make available clear and understandable 
information about the requirements and prohibitions on balance billing 
for air ambulance services.
i. Content of Disclosure
    The statute and these interim final rules require that the 
disclosure must include a clear and understandable statement that 
explains the requirements and prohibitions applicable to the provider 
or facility under sections 2799B-1 and 2799B-2 of the PHS Act and their 
implementing regulations, relating to prohibitions on balance billing 
in cases of emergency services and non-emergency services performed by 
a nonparticipating provider at certain participating facilities as 
described earlier in this preamble.
    In addition, the disclosure must include clear and understandable 
language that explains any applicable state law requirements regarding 
the amounts such provider or facility may charge a participant, 
beneficiary, or enrollee after receiving payment, if any,

[[Page 36913]]

from a plan or coverage (with which the provider or facility does not 
have a contractual relationship) and any applicable cost-sharing 
payment from such participant, beneficiary, or enrollee.
    HHS recognizes that there may be some state laws that are more 
protective of consumers than sections 2799B-1 and 2799B-2 of the PHS 
Act and their implementing regulations. For example, a state law might 
prohibit an individual from providing consent to be balance billed 
under more circumstances than those in which balance billing are 
prohibited under those sections and their implementing regulations. If 
the more protective state law causes certain provisions of sections 
2799B-1 and 2799B-2 of the PHS Act and their implementing regulations 
to be inapplicable to the provider or facility, the provider or 
facility is not required to include language containing information on 
those inapplicable provisions in the disclosures regarding the federal 
requirements and prohibitions, to the extent permitted under state law. 
However, the provider or facility would continue to be required to 
include information in the disclosures about any provisions in sections 
2799B-1 and 2799B-2 of the PHS Act and their implementing regulations 
that remain applicable to the provider or facility.
    Last, the statute and these interim final rules require that the 
disclosure must include clear and understandable language providing 
contact information for the appropriate state and federal agencies that 
an individual may contact if the individual believes the provider or 
facility has violated a requirement described in the notice. If only 
one federal or state agency has oversight with respect to providers or 
facilities in the state, the disclosure may include contact information 
for only that agency.
    In an effort to reduce the burden on health care providers and 
facilities, HHS has developed a model notice that health care providers 
and facilities may adopt, but are not required to use. HHS would 
consider a provider or facility that uses the HHS-developed model 
notice to be compliant with these federal disclosure rules with respect 
to the information regarding sections 2799B-1 and 2799B-2 of the PHS 
Act and their implementing regulations. HHS encourages states to 
develop model language to assist health care providers and facilities 
in fulfilling the disclosure requirements related to applicable state 
law requirements and contact information. If a state develops model 
language that is consistent with section 2799B-3 of the PHS Act, HHS 
will consider a provider or facility that makes appropriate use of the 
state-developed model language to be compliant with the federal 
requirement to include information about state law protections.
    To ensure clear and understandable language for the required 
information, HHS encourages health care providers and facilities to 
utilize plain language in the disclosure statements and to consider 
user testing in the development of such notices.\92\ Providers and 
facilities must comply with applicable state or federal language access 
standards in providing the disclosures.\93\ Communication and language 
barriers are associated with decreased quality of care and poorer 
health outcomes.\94\ Studies have shown the benefits associated with 
the use of language services in clinics and hospitals include (1) 
increased quality of care, (2) improved patient safety outcomes, and 
(3) lower utilization of costly medical procedures. The presence of a 
language barrier is associated with higher rates of costly resource 
utilizations for diagnostic testing, increased emergency department 
visits, decreased use of preventive services, higher rates of 
hospitalization, and higher rates of adverse health outcomes.\95\ HHS 
believes it is imperative that health care providers and facilities 
provide the required disclosure information in a clear and 
understandable manner to help achieve the goal of the No Surprises Act 
and ensure that individuals are aware of their rights related to 
protections against balance billing.
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    \92\ See https://methods.18f.gov/ for information on user 
testing.
    \93\ See section IV.2.iii of this preamble for discussion of 
select federal access standards.
    \94\ https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Language-Access-Plan-508.pdf.
    \95\ See Dewalt DA, Berkman ND, Sheridan S, Lohr KN, Pignone MP. 
Literacy and health outcomes: a systematic review of the literature. 
J Gen Intern Med. 2004;19(12):1228-1239. doi:10.1111/j.1525-
1497.2004.40153.x; Scott TL, Gazmararian JA, Williams MV, Baker DW. 
Health literacy and preventive health care use among Medicare 
enrollees in a managed care organization. Med Care. 2002;40:395-404; 
Baker DW, Parker RM, Williams MV, Clark WS. Health literacy and the 
risk of hospital admission. J Gen Intern Med. 1998;13:791-8; Neira 
L. The importance of addressing language barriers in the US health 
system. Duke Center for Personalized Health Care (July 17, 2018), 
available at: https://dukepersonalizedhealth.org/2018/07/the-importance-of-addressing-language-barriers-in-the-us-health-system/.
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    In addition, HHS reminds health care providers and facilities that 
these notices must comply with applicable federal civil rights laws, 
including that providers and facilities must take reasonable steps to 
provide meaningful access for individuals with limited English 
proficiency and appropriate steps to ensure effective communication 
with individuals with disabilities, including accessibility of 
information and communication technology.
    HHS seeks comment on the content of the required disclosures. 
Consistent with Executive Order 13985 and civil rights protections 
cited in these interim final rules, HHS particularly seeks comments 
from minority and underserved communities, including from those with 
limited English proficiency, those who prefer information in alternate 
and accessible formats, those who are otherwise adversely affected by 
persistent poverty and inequality, as well as from stakeholders who 
serve these communities, on what additional barriers may exist so as to 
ensure individuals can read, understand, and consider disclosure 
information and on what policies HHS may consider for addressing and 
removing these barriers.
ii. Methods of Disclosure
    The statute and these interim final rules require that each health 
care provider and facility must make the required disclosure publicly 
available, and (if applicable) post it on a public website of such 
provider or facility. In addition, providers and facilities must 
provide a one-page notice to individuals who are participants, 
beneficiaries, or enrollees of a group health plan or individual health 
insurance coverage offered by a health insurance issuer.
    To satisfy the requirement to post the disclosure on a public 
website, the disclosure or a link to such disclosure must be searchable 
on the provider's or facility's public website. HHS is of the view that 
the required disclosure information would not be publicly available 
unless displayed in a manner that is easily accessible, without 
barriers, and that ensures that the information is accessible to the 
general public, including that it is findable through public search 
engines. For example, HHS is of the view that a public website must be 
accessible free of charge, without having to establish a user account, 
password, or other credentials, accept any terms or conditions, and 
without having to submit any personal identifying information such as a 
name or email address. HHS seeks comment on whether additional 
regulatory standards are needed regarding what constitutes disclosure 
on a provider's or facility's public website to ensure the information 
is accessible to the public.

[[Page 36914]]

    These interim final rules provide that a health care provider or 
health care facility that does not have its own website is not required 
to make a disclosure on a public website. HHS anticipates that most 
facilities subject to the requirements in sections 2799B-1 and 2799B-2 
of the PHS Act would generally have a website, but recognizes that 
providers who furnish services at such facilities may not have their 
own website.
    To satisfy the required disclosure to the public, providers and 
facilities must display the required disclosure information on a sign 
posted prominently at the location of the health care provider or 
health care facility. HHS would consider a sign to be posted 
prominently, if the sign were posted in a central location, such as 
where individuals schedule care, check-in for appointments, or pay 
bills. Such locations would allow individuals to be aware of the 
protections available before or at the time of service or payment. HHS 
is of the view that ensuring the individual is aware of the surprise 
billing protections is integral to implementation of these 
requirements. HHS recognizes that some providers may not have publicly 
accessible locations and has concluded that requiring a sign to be 
posted prominently at a non-publicly accessible location would not 
further the purpose of providing a disclosure. Therefore, providers 
without a publicly accessible location are not required to make the 
disclosure under 45 CFR 149.430(c)(2).
    Lastly, the statute and these interim final rules require that 
health care providers and facilities must provide the required 
disclosure information in a one-page notice to individuals who are 
participants, beneficiaries, or enrollees of a group health plan or 
group or individual health insurance coverage offered by a health 
insurance issuer. The notice must be provided in-person or through mail 
or email, as selected by the participant, beneficiary, or enrollee. As 
outlined in the statute, the required disclosure to individuals must be 
limited to one page. HHS interprets the statute such that the 
disclosure notice may be one double-sided page. These interim final 
rules specify that the one-page disclosure must not include print 
smaller than 12-point font. These specifications are important to 
ensure that the one-page document is both designed in a form and 
presented in a manner that is readable by the individual or their 
representative and that it contains sufficient content to meet the 
requirements of these interim final rules.
    HHS seeks comment on these disclosure methods, including whether 
additional methods of providing information should be required or 
permitted. In particular, HHS is interested in comments regarding 
whether posting of the disclosure information could be in a location 
other than a sign posted prominently at the location of the provider or 
facility. In addition, HHS seeks comment on ways to ensure that the 
required disclosure information posted on a public website is 
accessible to individuals.
iii. Timing of Disclosure to Individuals
    These interim final rules generally require a health care provider 
or health care facility to provide the notice to participants, 
beneficiaries, or enrollees no later than the date and time on which 
the provider or facility requests payment from the individual 
(including requests for copayment made at the time of a visit to the 
provider or facility). In cases where the facility or provider does not 
request payment from the individual, the notice must be provided no 
later than the date on which the provider or facility submits a claim 
for payment to the plan or issuer.
    HHS is of the view that the notice will be most effective in 
helping individuals understand their rights and protections under 
federal and state balance billing laws and protecting individuals from 
being improperly billed, if individuals receive the notice in 
accordance with this timing requirement. The requirement will ensure 
the disclosures are meaningful and that individuals are aware of their 
rights before or at the time of payment, which is likely to help 
individuals to avoid paying bills that are prohibited under state or 
federal balance billing rules. However, these interim final rules offer 
providers and facilities flexibility regarding when the disclosure must 
be provided to individuals. Providers and facilities may provide the 
required disclosures to individuals earlier. For example, they could 
provide the notice when an individual schedules an appointment, or when 
other standard notice disclosures (such as the Notice of Privacy 
Practices for Protected Health Information \96\) are shared with 
individuals.
---------------------------------------------------------------------------

    \96\ For requirements regarding when health care providers are 
required to provide the Notice of Privacy Practices, see 45 CFR 
164.520(c).
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    In developing these interim final rules, HHS considered allowing 
providers or facilities to provide the disclosure annually or only at 
the time a patient schedules a service, but wanted to ensure the timing 
of the disclosure was relevant to when the individual may experience a 
violation of the surprise billing protections. HHS encourages providers 
and facilities to provide individuals with the notice at a time that 
will maximize the notice's effectiveness.
    HHS seeks comment on this timing requirement, and whether another 
timing requirement would be more appropriate.
iv. Exceptions
    Although section 2799B-3 of the PHS Act could be interpreted to 
apply broadly to all health care providers and facilities, these 
interim final rules include two exceptions to the general requirement 
to provide disclosures regarding balance billing protections. First, 
health care providers are not required to make the disclosures required 
under this section if they do not furnish items or services at a health 
care facility, or in connection with visits at health care facilities. 
Second, health care providers are required to provide the required 
disclosure only to individuals to whom they furnish items or services, 
and then only if such items or services are furnished at a health care 
facility, or in connection with a visit at a health care facility. HHS 
further notes that, under section 2799B-3 of the PHS Act, disclosure is 
required only to individuals who are participants, beneficiaries, or 
enrollees of a group health plan or group or individual health 
insurance coverage offered by a health insurance issuer. However, as 
specified in 5 U.S.C. 8902(p), section 2799B-3 of the PHS Act applies 
to a health care provider and facility with respect to a covered 
individual in a FEHB plan, as well. The disclosure requirement is not 
required with respect to other individuals seeking care from a provider 
or facility.
    While the statute does not explicitly provide for these exceptions, 
HHS is of the view that these exceptions serve two important purposes. 
First, they seek to avoid unnecessary confusion among individuals who 
otherwise might receive the disclosure under circumstances in which the 
balance billing protections would never apply. For instance, providing 
the disclosure of balance billing protections in a primary care 
provider's office could lead individuals to incorrectly assume balance 
billing protections exist where they do not. Second, by ensuring that 
the disclosures are targeted narrowly to relevant individuals, the 
exceptions aim to implement the statutory requirement without creating 
additional undue burden on providers and facilities.
    HHS is of the view that these exceptions are consistent with 
balance

[[Page 36915]]

billing requirements elsewhere in these interim final rules, related to 
emergency services or non-emergency services furnished by a 
nonparticipating provider at a participating facility. Furthermore, HHS 
is of the view that these exceptions do not lessen the positive impact 
of the disclosure requirement, as health care providers and facilities 
are still required to make the disclosures where balance billing is 
most likely to occur, which will help to ensure individuals are aware 
of their rights relating to consumer protections against balance 
billing.
    HHS seeks comment on these exceptions and whether there are other 
scenarios that should be considered.
v. Special Rule To Prevent Unnecessary Duplication With Respect to 
Providers
    HHS realizes there may be some instances where an individual may 
receive two disclosure notices--one from a provider furnishing items or 
services at a health care facility, and the other from the health care 
facility itself. These interim final rules include a special rule to 
streamline the provision of the required disclosure to the public and 
one-page notice to individuals and avoid unnecessary duplication of the 
disclosures with respect to providers furnishing care at a health care 
facility. This special rule does not apply with respect to the 
requirement that each health care provider and facility post the 
required disclosure on a public website of such provider or facility. 
While section 2799B-3 of the PHS Act does not explicitly provide for a 
special rule to prevent unnecessary duplication with respect to 
providers, HHS is of the view that this special rule serves an 
important purpose in implementing these requirements while reducing 
unnecessary burden and effort for providers. Furthermore, HHS is of the 
view that this special rule will also help reduce potential consumer 
confusion by allowing individuals to receive only one disclosure notice 
when receiving services from a provider furnishing items or services at 
a health care facility, both of which are subject to the disclosure 
requirement.
    The special rule provides that to the extent a provider furnishes 
an item or service covered under the plan or coverage at a health care 
facility (including an emergency department of a hospital or 
independent freestanding emergency department), the provider satisfies 
the disclosure requirements if the facility agrees to provide the 
information, in the required form and manner, pursuant to a written 
agreement. In such instance, the disclosure must include information 
about the balance billing requirements and prohibitions applicable to 
both the facility and the provider. If a provider and facility have a 
written agreement under which the facility agrees to provide the 
information required under these interim final rules, and the facility 
fails to provide full or timely disclosure information, then the 
facility, but not the provider, would violate the provider disclosure 
requirements regarding balance billing protections. HHS is of the view 
that this will remove unnecessary burden and effort for the providers. 
HHS clarifies that a ``written agreement'' may be an existing contract 
between the provider and facility to furnish care at the facility, if 
amended to provide for this special rule. Alternatively, a provider and 
facility may enter into a new written agreement specifically outlining 
the disclosure requirements regarding balance billing protections.
    Providers that enter into these arrangements with facilities are 
encouraged to monitor the facility's adherence to these requirements. 
In addition, if a provider has knowledge that the required disclosure 
information is not being provided in a manner specified in these 
interim final rules, HHS encourages the provider to work with the 
facility to correct the noncompliance as soon as practicable or notify 
the applicable state authority or HHS, in states where HHS is enforcing 
this requirement.\97\ HHS may provide additional guidance if HHS 
becomes aware of situations where participants, beneficiaries, and 
enrollees are not being provided the required disclosure information in 
accordance with these interim final rules.
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    \97\ Pursuant to section 2799B-4 of the PHS Act, states have 
authority to enforce the requirements of Part E of title XXVII of 
the PHS Act against a provider or health care facility (including a 
provider of air ambulance services), and HHS must enforce if a state 
has failed to substantially enforce the requirements. HHS intends to 
issue rulemaking in the future to implement section 2799B-4 of the 
PHS Act.
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    HHS recognizes that providers and facilities frequently bill 
separately for items and services furnished by the provider and the 
facility, and considered whether to make the special rule inapplicable 
in those instances. However, HHS concluded that applying the special 
rule is appropriate in these situations, since the disclosures are not 
required to be included with the bill itself. Although these interim 
final rules provide some flexibility around the timing of the notice, 
HHS anticipates that the disclosure to the individual would generally 
be provided at the point of care. Thus, requiring the provider and 
facility to separately provide notices whenever they bill separately 
could result in the individual receiving multiple notices for the same 
visit. Duplicative paperwork could overwhelm or confuse the receiving 
individual, which could detract from the primary purpose of clarifying 
and making known the protections that may apply to the individual. In 
addition, HHS is of the view that requiring a provider to separately 
post a disclosure within a facility is of limited additional benefit 
and may present compliance challenges for providers who lack designated 
space within a facility. Therefore, the special rule applies regardless 
of whether the provider and facility bill jointly or separately.
    Furthermore, since the special rule does not apply with respect to 
the requirement that each health care provider and facility make the 
required disclosure available on the public website of the provider or 
facility, HHS is of the view that this special rule works to achieve 
the goals of preventing unnecessary duplication for providers and 
facilities, while encouraging safeguards to ensure that individuals 
receive the required disclosure information and are aware of their 
rights. HHS is of the view that this special rule does not lessen the 
positive impact of the disclosure requirement. This special rule will 
continue to help to ensure individuals are aware of their rights 
relating to patient protections against surprise billing.
    HHS seeks comment on this special rule and whether there are other 
circumstances that may warrant a special rule to prevent unnecessary 
duplication. In addition, HHS seeks comment on whether providers should 
be required, rather than encouraged, to monitor and report whether a 
facility is not complying with the requirement outlined in these 
interim final rules.
4. Surprise Billing Complaints Regarding Health Care Providers, 
Facilities, and Providers of Air Ambulance Services
    The No Surprises Act adds section 2799B-4(b)(3) of the PHS Act, 
which directs HHS to establish a process to receive consumer complaints 
regarding violations by health care providers, facilities, and 
providers of air ambulance services of balance billing requirements 
under sections 2799B-1, 2799B-2, 2799B-3, and 2799B-5 of the PHS Act 
and to respond to such complaints within 60 days. Therefore, the 
interim final rules establish an HHS-only complaints process for health 
care providers, facilities and providers of air ambulance services that 
parallels the

[[Page 36916]]

process that the Departments are establishing through these interim 
final rules for plans and issuers. A more fulsome discussion of the 
complaints process for providers can be found in section III.B.4 of 
this preamble. HHS seeks comment on the complaints process for health 
care providers, facilities, and providers of air ambulance services 
described in these interim final rules.
5. Catastrophic Plans
    As discussed earlier in this preamble, where the surprise billing 
protections apply, and the out-of-network rate exceeds the amount upon 
which cost sharing is based (which for emergency services provide by a 
nonparticipating emergency facility and for non-emergency services 
provided by a nonparticipating provider at a participating health care 
facility is the recognized amount, and for services provided by a 
nonparticipating provider of air ambulance services is the lesser of 
the billed amount or the QPA), a group health plan or health insurance 
issuer offering group or individual health insurance coverage must pay 
the provider or facility the difference between the out-of-network rate 
and the cost-sharing amount, even in cases where an individual has not 
satisfied their deductible (in which case the cost-sharing amount is 
the recognized amount, or the lesser of the billed amount or the QPA, 
as applicable). Catastrophic plans generally cannot provide benefits 
for any plan year until the annual limitation on cost sharing in 
section 1302(c)(1) of ACA is reached, other than coverage of preventive 
services under section 2713 of the PHS Act and at least three primary 
care visits. A catastrophic plan cannot comply with the new balance 
billing protections, specifically the obligation to make a payment to a 
provider or facility prior to the enrollee meeting the annual 
limitation on cost sharing, while satisfying the definition of a 
catastrophic plan at section 1302(e) of ACA. Because the No Surprises 
Act does not contain language eliminating catastrophic plans or 
exempting catastrophic plans from the law's requirements, HHS 
interprets the statute as permitting catastrophic plans to make 
payments required by sections 2799A-1 or 2799A-2 of the PHS Act without 
losing their status as catastrophic plans. HHS is, therefore, amending 
45 CFR 156.155 in these interim final rules to specify that a 
catastrophic plan must provide benefits as required under sections 
2799A-1 and 2799A-2 of the PHS Act and their implementing regulations, 
or any applicable state law providing similar surprise billing 
protections to individuals. Additionally, a health plan will not fail 
to be treated as a catastrophic plan because the plan provides benefits 
prior to the annual limitation on cost sharing in section 1302(c)(1) of 
the ACA, as required under sections 2799A-1 and 2799A-2 of the PHS Act 
or any applicable state law providing similar protections to 
individuals.

V. Overview of Interim Final Rules--Office of Personnel Management

A. Conforming Changes for FEHB Program

    The OPM interim final rules, through new 5 CFR 890.114 in subpart 
A, protect FEHB Program covered individuals from surprise medical bills 
for emergency services, air ambulance services furnished by 
nonparticipating providers, and non-emergency services furnished by 
nonparticipating providers at participating health care facilities in 
certain circumstances in the same manner as the Departments' rules 
protect participants, beneficiaries, or enrollees. The Departments' 
interim final rules generally apply with respect to FEHB carriers' 
compliance with the No Surprises Act, except to the extent that 
differences are necessitated for clarification or appropriate 
application in the context of the FEHB Program. In considering 
application of the Departments' interim rules with respect to the FEHB 
Program, it is important to recognize that all FEHB carriers offer 
fully insured health benefits plans in consideration of premium 
payments pursuant to contract terms, and no health benefits plan is 
self-insured by OPM or the Federal government. OPM seeks comment on 
this approach and whether there should be any additional considerations 
in the application of these interim final rules in the context of the 
FEHB Program.

B. Preemption and OPM Enforcement

    FEHB contract terms preempt state law with respect to coverage or 
benefits (including payments with respect to benefits) pursuant to 5 
U.S.C. 8902(m)(1). Such preemption renders specified state law 
inapplicable for the purposes of determining recognized amounts and 
out-of-network rates under 26 CFR part 54, 29 CFR part 2590, and 45 CFR 
part 149. However, pursuant to bilateral negotiation of FEHB contract 
terms, OPM and the carrier may agree to apply state law to determine 
the total amount payable, rendering the state law amount, method, or 
process for determining the total amount payable an effective term of 
the Federally-regulated, Federally-enforced contract. Accordingly, in 
this instance, FEHB contract terms will govern the methodology for 
determining recognized amounts and out-of-network rates. In the absence 
of a FEHB contract term incorporating a state law amount, method, or 
process for determining the total amount payable (including an amount 
determined pursuant to an All-Payer Model Agreement under section 1115A 
of the Social Security Act), the lesser of the billed amount or the QPA 
will serve as the recognized amount under the FEHB plan. Likewise, in 
the absence of a FEHB contract term incorporating an applicable state 
IDR process, the federal IDR process will govern the determination of 
out-of-network rates in cases of failed open negotiations.
    Example A: A community-rated FEHB plan covers a specific non-
emergency service that is provided to a covered individual in State A 
by a nonparticipating provider in a participating health care facility. 
Both the provider and the facility are licensed in State A. State A has 
a law that prohibits balance billing for non-emergency services 
provided to individuals by nonparticipating providers in a 
participating health care facility, and provides for a method for 
determining the cost-sharing amount and total amount payable. The law 
applies to health insurance issuers and providers licensed in State A 
and applies to the type of service provided. OPM and the FEHB carrier, 
through the annual contract negotiation cycle, have elected to utilize 
State A's law, and the FEHB health benefits plan contains a term 
expressly incorporating the State A law prohibiting balance billing. In 
this Example, the FEHB contract terms apply the state law to determine 
the recognized amount and the out-of-network rate.
    Example B: Same facts as Example A, except that the FEHB contract 
terms do not incorporate or expressly refer to the balance billing law 
of State A. In this Example, State A's law prohibiting balance billing 
would be preempted by the terms of the FEHB contract. The lesser of the 
billed amount or QPA would apply to determine the recognized amount. 
The out-of-network rate would be determined through open negotiation 
between the nonparticipating provider and the FEHB carrier, or in the 
case of failed negotiations, an amount determined under the federal IDR 
process.
    Enforcement of these interim final rules with respect to FEHB 
carriers will generally be governed by OPM authorities set forth herein 
and 5 U.S.C.

[[Page 36917]]

8901 et seq., 5 CFR part 890, 48 CFR chapter 16, or the carrier's FEHB 
contract. Any differences in terminology or other clarification will be 
set forth in the applicable FEHB contract.

C. Definitions

    The No Surprises Act and these interim final rules include defined 
terms that are specific to the law's requirements and implementation. 
Definitions of key terms with respect to OPM's enforcement of 5 U.S.C. 
8902(p) generally align with the Departments' regulations, with certain 
exceptions. For compliance with these provisions, the terms ``group 
health plan or plan,'' ``health insurance issuer or issuer,'' and 
``participant, beneficiary, or enrollee'' are respectively replaced 
with the terms ``health benefits plan,'' ``carrier,'' and ``enrollee or 
covered individual.''

D. Complaints

    Complaints related to the provisions under Part D of title XXVII of 
the PHS Act with respect to carriers and FEHB plans will generally be 
resolved in accordance with the Departments' interim final rules. OPM 
will coordinate with the Departments to ensure that complaints 
appropriate for OPM resolution under the FEHB Program statute, 
regulations or contractual authorities are referred to OPM.

E. Jurisdiction of Courts

    Under 5 U.S.C. 8912, the district courts of the United States have 
original jurisdiction, concurrent with the United States Court of 
Federal Claims, of a civil action or claim against the United States 
founded on FEHBA. Pursuant to new paragraph (e) in 5 CFR 890.107, in 
the event of litigation under these interim final rules, a suit for 
equitable relief founded on 5 U.S.C. chapter 89 that is based on 5 
U.S.C. 8902(p) and is governed by 5 CFR part 890 must be brought 
against OPM by December 31 of the 3rd year after the year in which 
disputed services were rendered. OPM seeks comment on amendments to its 
regulation on court review.

F. Applicability

    OPM seeks comment on the appropriate manner of conforming 
compliance with sections 9816, 9817, and 9822 of the Code; sections 
716, 717, and 722 of ERISA; and sections 2799A-1, 2799A-2, and 2799A-7 
of the PHS Act for application to FEHB carriers, including the 
appropriateness and usability of the definitions and any additional 
changes to the Departments' regulatory provisions that must be 
conformed for appropriate implementation in the FEHB Program.
    For purposes of 5 U.S.C. 8902(p), the HHS interim final rules apply 
to health care providers, facilities, and providers of air ambulance 
services with respect to covered individuals in a FEHB plan in the same 
manner as they apply with respect to participants, beneficiaries, and 
enrollees in a group health plan or group or individual health 
insurance coverage offered by a health insurance issuer. OPM seeks 
comment on the appropriate manner of conforming compliance with 5 
U.S.C. 8902(p) and sections 2799B-1, 2799B-2, 2799B-3, and 2799B-5 of 
the PHS Act.
    Consistent with the Departments' approach discussed in section 
III.D. of this preamble, OPM will not apply these interim final rules 
to health benefits plans that are retiree-only plans.

VI. Waiver of Proposed Rulemaking

    Section 9833 of the Code, section 734 of ERISA, and section 2792 of 
the PHS Act authorize the Secretaries of the Treasury, Labor, and HHS 
(collectively, the Secretaries), respectively, to promulgate any 
interim final rules that they determine are necessary or appropriate to 
carry out the provisions of chapter 100 of the Code, part 7 of subtitle 
B of title I of ERISA, and title XXVII of the PHS Act.
    In addition, under section 553(b) of the Administrative Procedure 
Act (APA) (5 U.S.C. 551 et seq.) a general notice of proposed 
rulemaking is not required when an agency finds good cause that notice 
and comment procedures are impracticable, unnecessary, or contrary to 
the public interest and incorporates a statement of the finding and its 
reasons in the rule issued. The Secretaries and OPM Director have 
determined that it would be impracticable and contrary to the public 
interest to delay putting the provisions in these interim final rules 
in place until after a full public notice and comment process has been 
completed.
    The No Surprises Act was enacted on December 27, 2020, as title I 
of Division BB of the Consolidated Appropriations Act, 2021. The cost-
sharing and balance billing requirements on plans, issuers, health care 
providers, facilities, and providers of air ambulance services in the 
No Surprises Act apply for plan years (in the individual market, policy 
years) beginning on or after January 1, 2022. Although this effective 
date may have allowed for the regulations, if promulgated with the full 
notice and comment rulemaking process, to be applicable in time for the 
applicability date of the provisions in the No Surprises Act, this 
timeframe would not provide sufficient time for the regulated entities 
to implement the requirements. These interim final rules require plans 
and issuers to make significant changes to how they pay for items and 
services that are subject to the cost-sharing and balance billing 
protections, including implementing claims processing procedures to 
ensure that claims for items and services subject to these protections 
are processed in accordance with the requirements in these interim 
final rules. Group health plans and health insurance issuers offering 
group or individual health insurance coverage will have to account for 
these changes in establishing their premium or contribution rates, and 
in making other changes to the designs of plan or policy benefits. In 
some cases, issuers will need time to secure approval for these changes 
in advance of the plan or policy year in question. The Departments and 
OPM anticipate the plans and issuers will have already taken into 
consideration the statutory provisions in the No Surprises Act as they 
developed plan designs for 2022, and preliminary rates. Issuing these 
rules as interim final rules, rather than as a notice of proposed 
rulemaking, may allow plans and issuers to account for the finalized 
regulations as they finalize rates and plan offerings.
    The interim final rules place new requirements on facilities, 
health care providers, and providers of air ambulance services 
regarding when they are permitted to balance bill for items and 
services. Such requirements include new requirements related to how 
providers and facilities must bill for items and services furnished on 
an out-of-network basis, requirements related to providing notice and 
obtaining consent regarding balance billing protections in certain 
circumstances, and requirements to disclose information on balance 
billing publicly, on a public website and to participants, 
beneficiaries, and enrollees. Health care providers and facilities 
require time to implement these new requirements to ensure compliance 
by January 1, 2022.
    These interim final rules contain critical protections for 
participants, beneficiaries, and enrollees against balance billing. For 
individuals who receive balance bills, the costs can be astronomical 
and devastating.\98\ In addition, the recipients of such bills are not 
the only ones who feel their impact. As discussed elsewhere in this 
preamble, providers have previously been able to leverage the ability 
to

[[Page 36918]]

balance bill to negotiate higher in-network rates. This leads to higher 
premiums, higher cost sharing for consumers, and increased health 
expenditures.\99\ One study estimated that policies to address surprise 
billing on a federal level could decrease health insurance premiums by 
one to five percent.\100\ Additionally, consumers may delay receiving 
needed medical care, including for emergency medical conditions, over 
concern about surprise medical bills. It is therefore in the public 
interest that individuals receive the protections under the No 
Surprises Act on the date on which those protections go into effect. 
Accordingly, in order to allow plans, health insurance issuers, 
facilities, health care providers, and providers of air ambulance 
services sufficient time to implement these new requirements, these 
rules must be published and available to the public well in advance of 
the effective date of the requirements in the No Surprises Act. 
Allowing time for a full notice and comment process prior to the 
requirements taking effect would not provide sufficient time for these 
entities to comply with the requirements for plan years (in the 
individual market, policy years) beginning on or after January 1, 2022, 
which would risk subjecting the public to prohibited balance bills and 
excess cost sharing. Additionally, plans and issuers need certainty 
regarding the standards of these requirements in order to begin 
implementation, which these interim final rules seek to provide.
---------------------------------------------------------------------------

    \98\ See, Greaney, T.L., Surprise Billing: A Window into the 
U.S. Health Care System, ABA Civil Rights and Social Justice 
Section, Human Rights Magazine (Sept. 8, 2020); Cooper, Z. et al., 
Surprise! Out-Of-Network Billing For Emergency Care in the United 
States, NBER Working Paper 23623, 20173623 (July 2017, Revised 
January 2018).
    \99\ See Cooper, Z. et al., Surprise! Out-Of-Network Billing For 
Emergency Care in the United States, NBER Working Paper 23623, 
20173623 (July 2017, Revised January 2018); Duffy, E. et al., 
``Policies to Address Surprise Billing Can Affect Health Insurance 
Premiums.'' The American Journal of Managed Care 26.9 (2020): 401-
404; and Brown E.C.F., et al., The Unfinished Business of Air 
Ambulance Bills, Health Affairs Blog, March 26, 2021. DOI: 10.1377/
hblog20210323.911379, available at https://www.healthaffairs.org/do/10.1377/hblog20210323.911379/full/.
    \100\ Trish E. et al., Policies to Address Surprise Billing Can 
Effect Health Insurance Premiums, Am J Manag Care. 2020;26(9):401-
404. https://doi.org/10.37765/ajmc.2020.88491.
---------------------------------------------------------------------------

    Section 2723 of the PHS Act authorizes states to enforce the 
requirements in Part D of title XXVII of the PHS Act with respect to 
issuers. Section 2799B-4 of the PHS Act authorizes states to enforce 
the requirements in Part E of title XXVII of the PHS Act with respect 
to providers and health care facilities (including a provider of air 
ambulance services). Under both sections, HHS is required to enforce 
such requirements if a state fails to substantially enforce them. In 
order to ensure effective oversight of these new requirements as soon 
as they go into effect, states require time to assess the requirements 
contained in these interim final regulations, and notify HHS if they 
have not enacted legislation to enforce such requirements or they 
otherwise will not be enforcing such requirements. States that opt to 
enforce the requirements may require time to update their regulations 
or statutes and develop processes for enforcing the new requirements. 
Delaying the rules to allow for notice and comment procedures would not 
provide sufficient time for states to assess the new requirements and 
notify HHS of their ability to enforce.
    In addition, the law requires the Secretaries to issue rulemaking 
by July 1, 2021, regarding the QPA methodology (including defining the 
geographic regions for purposes of the methodology); information plans 
or issuers must share with nonparticipating providers or facilities, as 
applicable, regarding the plan or issuer's determination of the QPA; 
and a process to receive complaints related to the QPA. Allowing time 
for a full notice and comment process prior to July 1, 2021, would not 
have provided sufficient time for the Departments to develop and 
publish these rules by the statutory deadline.
    For the foregoing reasons, the Departments and OPM have determined 
that it is impracticable and contrary to the public interest to engage 
in full notice and comment rulemaking before putting these interim 
final rules into effect, and that it is in the public interest to 
promulgate interim final rules.

VII. Economic Impact and Paperwork Burden

A. Summary

    These interim final rules implement provisions of the No Surprises 
Act, which Congress enacted as part of the CAA, that protect 
participants, beneficiaries, and enrollees in group health plans and 
group and individual health insurance coverage from surprise medical 
bills when they receive emergency services, non-emergency services from 
nonparticipating providers at certain participating facilities, and air 
ambulance services, under certain circumstances.
    The Departments and OPM \101\ have examined the effects of these 
interim final rules as required by Executive Order 13563 (76 FR 3821, 
January 21, 2011, Improving Regulation and Regulatory Review); 
Executive Order 12866 (58 FR 51735, October 4, 1993, Regulatory 
Planning and Review); the Regulatory Flexibility Act (September 19, 
1980, Pub. L. 96-354); section 1102(b) of the Social Security Act (42 
U.S.C. 1102(b)); section 202 of the Unfunded Mandates Reform Act of 
1995 (March 22, 1995, Pub. L. 104-4); Executive Order 13132 (64 FR 
43255, August 10, 1999, Federalism); and the Congressional Review Act 
(5 U.S.C. 804(2)).
---------------------------------------------------------------------------

    \101\ All references to the Departments in the Economic Impact 
section of the preamble include OPM. The analysis includes FEHB 
plans.
---------------------------------------------------------------------------

B. Executive Orders 12866 and 13563

    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). Executive Order 13563 is 
supplemental to and reaffirms the principles, structures, and 
definitions governing regulatory review as established in Executive 
Order 12866.
    Section 3(f) of Executive Order 12866 defines a ``significant 
regulatory action'' as an action that is likely to result in a rule: 
(1) Having an annual effect on the economy of $100 million or more in 
any one year, or adversely and materially affecting a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or state, local or tribal governments or communities 
(also referred to as ``economically significant''); (2) creating a 
serious inconsistency or otherwise interfering with an action taken or 
planned by another agency; (3) materially altering the budgetary 
impacts of entitlement grants, user fees, or loan programs or the 
rights and obligations of recipients thereof; or (4) raising novel 
legal or policy issues arising out of legal mandates, the President's 
priorities, or the principles set forth in the Executive Order.
    A regulatory impact analysis must be prepared for major rules with 
economically significant effects (for example, $100 million or more in 
any one year), and a ``significant'' regulatory action is subject to 
review by OMB. The Departments anticipate that this regulatory action 
is likely to have economic impacts of $100 million or more in at least 
1 year, and thus meets the definition of an ``economically significant 
rule'' under Executive Order 12866. Therefore, the Departments have 
provided an assessment of the potential costs, benefits, and transfers 
associated with these interim final rules. In accordance with the 
provisions of Executive Order 12866, these interim final rules were 
reviewed by OMB.

[[Page 36919]]

1. Need for Regulatory Action
    A surprise medical bill is an unexpected bill from a health care 
provider or facility that occurs when a participant, beneficiary, or 
enrollee receives medical services from a provider (including a 
provider of air ambulance services) or facility that, generally 
unbeknownst to the participant, beneficiary, or enrollee, is a 
nonparticipating provider or facility with respect to the individual's 
coverage. Surprise bills usually occur in situations when a patient is 
unable to choose a provider (including a provider of air ambulance 
services) or emergency facility and ensure that they receive care from 
only providers or emergency facilities that are participating for their 
coverage. A recent survey revealed that two-thirds of adults worry 
about being able to afford unexpected medical bills for themselves and 
their families, and 41 percent of adults with health insurance received 
a surprise medical bill in the previous 2 years.\102\ Surprise bills 
can cause significant financial hardship and cause individuals to forgo 
care. A project carried out by Vox, a news and opinion website, which 
collected emergency department medical bills reported instances of 
accident victims receiving care at out-of-network hospitals and 
receiving bills of over $20,000.\103\ These challenges may be more 
keenly experienced by minority and underserved communities, which are 
more likely to experience poor communication, underlying mistrust of 
the medical system, and lower levels of patient engagement than other 
populations.\104\ Communities experiencing poverty and other social 
risk factors are particularly impacted as surprise medical bills can 
negatively affect individuals' abilities to eliminate debt and create 
wealth, and ultimately can affect a family for generations.\105\ 
Effective, culturally, and linguistically tailored communication at 
appropriate literacy levels, along with policies that address the 
social risk factors and other barriers underserved communities face to 
accessing, trusting, and understanding health care costs and coverage 
can reduce disparities and promote health equity.\106\
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    \102\ Pollitz K., et al., US Statistics on Surprise Medical 
Billing. JAMA. 2020;323(6):498. doi:10.1001/jama.2020.0065.
    \103\ Kliff S., Surprise medical bills, the high cost of 
emergency department care, and the effects on patients [published 
online August 12, 2019]. JAMA Intern Med. doi:10.1001/
jamainternmed.2019.3448.
    \104\ Butler S., Sherriff N. How poor communication exacerbates 
health inequities and what to do about it. Brookings Institution: 
Report (February 22, 2021). https://www.brookings.edu/research/how-poor-communication-exacerbates-health-inequities-and-what-to-do-about-it/; Hamel, L., Lopes, L., Mu[ntilde]ana, C., Artiga, S., 
Brodie, M. Race, Health, and COVID-19: The Views and Experiences of 
Black Americans. Kaiser Family Foundation (October 2020). https://files.kff.org/attachment/Report-Race-Health-and-COVID-19-The-Views-and-Experiences-of-Black-Americans.pdf; and Shen M.J., Peterson 
E.B., Costas-Mu[ntilde]iz R. et al. The Effects of Race and Racial 
Concordance on Patient-Physician Communication: A Systematic Review 
of the Literature. J. Racial and Ethnic Health Disparities 5, 117-
140 (2018). https://doi.org/10.1007/s40615-017-0350-4.
    \105\ Taylor, J., Racism, inequality, and health care for 
African Americans. The Century Foundation: Report (December 19, 
2019). https://tcf.org/content/report/racism-inequality-health-care-african-americans/; and Chavis, B., Op-Ed: Big insurance must help 
end surprise medical billing. blackpressUSA (February 24, 2020). 
https://blackpressusa.com/op-ed-big-insurance-must-help-end-surprise-medical-billing/.
    \106\ P[eacute]rez-Stable E.J., El-Toukhy S., Communicating with 
diverse patients: How patient and clinician factors affect 
disparities. Patient Educ Couns. 2018;101(12):2186-2194. 
doi:10.1016/j.pec.2018.08.021; McNally, M., Confronting disparities 
in access to healthcare for underserved populations. MedCity News 
(February 22, 2021). https://medcitynews.com/2021/02/confronting-disparities-in-access-to-healthcare-for-underserved-populations-in-2021/.
---------------------------------------------------------------------------

    The No Surprises Act provides federal protections against surprise 
billing and limits out-of-network cost sharing under many of the 
circumstances in which surprise medical bills arise most frequently. 
These interim final rules implement provisions of the No Surprises Act 
that protect individuals from surprise medical bills for emergency 
services, air ambulance services furnished by nonparticipating 
providers, and non-emergency services furnished by nonparticipating 
providers at participating facilities in certain circumstances.
2. Summary of Impacts
    The provisions in these interim final rules will ensure that 
participants, beneficiaries, and enrollees with health coverage are 
protected from surprise medical bills. Individuals with health coverage 
will gain peace of mind, experience a reduction in out-of-pocket 
expenses, be able to meet their deductible and out-of-pocket maximum 
limits sooner, and may experience increased access to care. Plans, 
issuers, health care providers, facilities, and providers of air 
ambulance services will incur costs to comply with the requirements in 
these interim final rules. 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 this regulatory 
action. The Departments are unable to quantify all benefits, costs, and 
transfers of these interim 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 interim final rules.
BILLING CODE 4120-01-P

[[Page 36920]]

[GRAPHIC] [TIFF OMITTED] TR13JY21.003


[[Page 36921]]


[GRAPHIC] [TIFF OMITTED] TR13JY21.004

BILLING CODE 4120-01-C
a. Prevalence of Surprise Billing
    There is extensive research on the incidence of out-of-network 
providers and facilities billing patients for items and services 
furnished at in-network and out-of-network health care facilities. Most 
of these studies analyze claims data to identify cases that may 
potentially result in a surprise medical bill. The studies reveal that 
surprise billing is a significant issue for consumers across the 
country and across all types of coverage. For example, an analysis of 
claims data from large group health plans revealed that while rates 
varied by state, 18 percent of emergency department visits, on average, 
resulted in individuals receiving a surprise medical bill in

[[Page 36922]]

2017. The out-of-network charges came either from facilities or 
providers, or both, though the majority of the charges were from 
individual providers, rather than facilities.\107\ In addition, in 
2017, 16 percent of inpatient stays at in-network facilities resulted 
in out-of-network charges, though the rate of out-of-network billing 
varied by state and also between rural and urban areas. Another study 
revealed that admissions at in-network hospitals for surgery and mental 
health/substance use disorders are more likely to include out-of-
network charges, and women with large-employer coverage who have had a 
mastectomy at an in-network facility were also more likely (21 percent) 
to be billed for out-of-network charges.\108\ An analysis of commercial 
claims data for in-network hospital admissions in 2016 found that out-
of-network claims occurred in 14.5 percent of admissions, with wide 
variation between states.\109\
---------------------------------------------------------------------------

    \107\ Pollitz K., et al., An examination of surprise medical 
bills and proposals to protect consumers from them, 
Peterson[hyphen]KFF Health System Tracker, February 10, 2020, 
https://www.healthsystemtracker.org/brief/an-examination-of-surprise-medical-bills-and-proposals-to-protect-consumers-from-them-3/.
    \108\ Pollitz, K. et al., Surprise Bills Vary by Diagnosis and 
Type of Admission, Peterson-KFF Health System tracker, December 9, 
2019, https://www.healthsystemtracker.org/brief/surprise-bills-vary-by-diagnosis-and-type-of-admission/.
    \109\ Kennedy K. et al., Surprise out-of-network medical bills 
during in-network hospital admissions varied by state and medical 
specialty, 2016, Health Care Cost Institute, March 28, 2019, https://healthcostinstitute.org/out-of-network-billing/oon-physician-bills-at-in-network-hospitals.
---------------------------------------------------------------------------

    A study using 2007-2014 claims data for group health plans 
indicated that in 2014, 20 percent of hospital inpatient admissions 
that originated in the emergency department, 14 percent of outpatient 
emergency department visits, and 9 percent of elective inpatient 
admissions were likely to result in surprise medical bills. In 
approximately 40 percent of inpatient admissions and more than half of 
outpatient cases with surprise bills, issuers paid the claims at an in-
network level, so the patients were potentially billed for the 
remaining amount.\110\ Another study using claims data from a large 
issuer for the period 2010-2016 found that over 39 percent of emergency 
department visits to in-network hospitals resulted in an out-of-network 
bill, and that the incidence increased from 32.3 percent in 2010 to 
42.8 percent in 2016. The average potential amount of the surprise 
medical bill also increased from $220 in 2010 to $628 in 2016. During 
the same time period, 37 percent of inpatient admissions to in-network 
hospitals resulted in at least one out-of-network bill, increasing from 
26.3 percent in 2010 to 42 percent in 2016 and the average potential 
amount of the surprise medical bill increased from $804 to $2,040.\111\
---------------------------------------------------------------------------

    \110\ Garmon C. and Chatock B., One In Five Inpatient Emergency 
Department Cases May Lead to Surprise Bills, Health Affairs 36, No. 
1 (2017): 177-181.
    \111\ Sun E.C., Mello M.M., Moshfegh J., Baker LC. Assessment of 
Out-of-Network Billing for Privately Insured Patients Receiving Care 
in In-Network Hospitals. JAMA Intern Med. 2019;179(11):1543-1550. 
doi:10.1001/jamainternmed.2019.3451.
---------------------------------------------------------------------------

    For elective surgeries, analysis of claims data from a large issuer 
revealed that between 2012 and 2017, an out-of-network bill occurred in 
over 20 percent of cases, when the primary surgeon and facility were 
in-network, resulting in potential balance bills ranging from $1,255 to 
$3,449. Occurrences of out-of-network bills were associated with 
significantly higher total charges and out-of-pocket costs for 
patients, compared to cases without out-of-network bills.\112\
---------------------------------------------------------------------------

    \112\ Chhabra K.R. et al., Out-of-Network Bills for Privately 
Insured Patients Undergoing Elective Surgery With In-Network Primary 
Surgeons and Facilities, 2020;323(6):538-547. doi:10.1001/
jama.2019.21463.
---------------------------------------------------------------------------

    Researchers have also tried to estimate the amounts of surprise 
bills patients receive. A study using 2015 claims data from a large 
issuer for services provided at in-network hospitals concluded that 
average potential balance bills from anesthesiologists, pathologists, 
radiologists, and assistant surgeons were $1,171, $177, $115, and 
$7,420, respectively.\113\ Another study analyzing 2014-2017 data 
related to ambulatory surgical centers from three large issuers 
revealed that in 10 percent of cases, patients treated at in-network 
facilities received care from out-of-network providers, and patients 
may have received surprise bills in 8 percent of cases. On average, the 
amount of the surprise medical bill was $1,141, and the amount 
increased by 81 percent over the period, from $819 in 2014 to $1,483 in 
2017.\114\
---------------------------------------------------------------------------

    \113\ Cooper Z. et al., Out-of-Network Billing And Negotiated 
Payments for Hospital-Based Physicians, Health Affairs 39, No. 1, 
2020. doi: 10.1377/hlthaff.2019.00507.
    \114\ Duffy E. et al., Prevalence And Characteristics Of 
Surprise Out-of-Network Bills from Professionals in Ambulatory 
Surgery Centers, Health Affairs 39, No. 5, 2020. doi:10.1377/
hlthaff.2019.01138.
---------------------------------------------------------------------------

    Surprise billing is often associated with certain physician 
specialties, especially those whose services are not actively 
``shoppable'' by consumers. Researchers analyzing claims data from a 
large issuer for the period 2010-2016 found that for emergency 
department visits, out-of-network bills arose frequently within the 
context of medical transport encounters (resulting in out-of-network 
bills in 85.6 percent of incidents involving ambulances) and the 
following physician specialties: Emergency medicine (32.6 percent), 
anesthesiology (22.8 percent), internal medicine (23.8 percent), 
cardiology (20.9 percent), family practice (20.1 percent), radiology 
(18.1 percent), general surgery (13.3 percent), and pediatrics (8.4 
percent). For inpatient admissions at in-network hospitals, in addition 
to medical transport (81.6 percent of cases involving ambulances), the 
study found that out-of-network bills arose most commonly with the 
following physician specialties: emergency medicine (42.6 percent of 
total inpatient admissions with at least 1 claim submitted by the given 
specialty), internal medicine (25.3 percent), radiology (22.6 percent), 
pathology (22.2 percent), cardiology (19.6 percent), anesthesiology 
(19.3 percent), family practice (18.2 percent), and obstetrics and 
gynecology (0.8 percent).\115\ While emergency medicine physicians make 
up only approximately 5 percent of the total number of active 
physicians,\116\ these studies show that emergency medical physicians 
have the highest percentage of out-of-network claims. Analysis of 
claims data for elective surgeries from a large issuer revealed that 
between 2012 and 2017, out-of-network claims were commonly associated 
with anesthesiologists (in 37 percent of cases), surgical assistants 
(37 percent), pathologists (22 percent), radiologists (7 percent), and 
medical consultants (3 percent).\117\ Another study analyzing 
commercial claims data for in-network inpatient admissions in 2016 
found that some specialties with large shares of out-of-network bills 
were anesthesiology (16.5 percent), primary care (12.6 percent), and 
emergency medicine (11 percent) and that the specialties that most 
often billed as out-of-network at in-network facilities were 
independent labs (22.1 percent), followed by emergency medicine (12

[[Page 36923]]

percent).\118\ Another study analyzing 2014-2017 data related to 
ambulatory surgical centers from three large issuers revealed that out-
of-network bills often came from anesthesiologists (44 percent of 
bills), certified registered nurse anesthetists (25 percent), 
independent laboratories (10 percent) and pathologists (3 
percent).\119\
---------------------------------------------------------------------------

    \115\ Sun E. et al., Assessment of Out-of-Network Billing for 
Privately Insured Patients Receiving Care in In-Network Hospitals. 
JAMA Intern Med. 2019;179(11):1543-1550.
    \116\ American Association of Medical Colleges. ``Active 
Physicians by Age and Specialty.'' Physician Specialty Data Report. 
(December 2019). https://www.aamc.org/data-reports/workforce/interactive-data/active-physicians-age-and-specialty-2019. The 
American Association of Medical Colleges estimated that among the 
935,136 active physicians in the U.S. in 2019, 45,134 were emergency 
physicians (4.8%).
    \117\ Chhabra K.R. et al., Out-of-Network Bills for Privately 
Insured Patients Undergoing Elective Surgery With In-Network Primary 
Surgeons and Facilities, 2020;323(6):538-547. doi:10.1001/
jama.2019.21463.
    \118\ Kennedy K. et al., Surprise out-of-network medical bills 
during in-network hospital admissions varied by state and medical 
specialty, 2016, Health Care Cost Institute, March 28, 2019, https://healthcostinstitute.org/out-of-network-billing/oon-physician-bills-at-in-network-hospitals.
    \119\ Duffy E. et al., Prevalence And Characteristics Of 
Surprise Out-of-Network Bills from Professionals in Ambulatory 
Surgery Centers, Health Affairs 39, No. 5, 2020. doi:10.1377/
hlthaff.2019.01138.
---------------------------------------------------------------------------

    As discussed earlier in this preamble, multiple studies have shown 
that a large percentage of out-of-network bills come from independent 
laboratories. An analysis of 2008-2016 claims data for individuals with 
group health insurance coverage found that there was an increase in the 
share of out-of-network laboratory spending, and that utilization and 
prices for out-of-network laboratory tests increased relative to in-
network tests during that time period. The number of out-of-network 
laboratory tests increased by 18.9 percent each year, while the number 
of in-network laboratory tests increased by 2.3 percent per year. The 
study authors speculated that large suppliers of laboratory services 
have sufficient market power to set high out-of-network prices and 
utilization by clinicians may be influenced by financial 
incentives.\120\
---------------------------------------------------------------------------

    \120\ Song, Z. et al., JAMA, Out-of-Network Laboratory Test 
Spending, Utilization, and Prices in the US, JAMA. 
2021;325(16):1674-1676. doi:10.1001/jama.2021.0720.
---------------------------------------------------------------------------

    Providers who choose to remain out-of-network usually do so because 
it does not affect their patient volume. The ability to balance bill is 
often used as leverage by such providers to obtain higher in-network 
payments when they join plans' or issuers' networks. Higher in-network 
payments lead to higher premiums,\121\ higher cost sharing for 
consumers, and increased health care expenditures overall. For example, 
hospitals often outsource the staffing of their emergency departments 
to outside firms. A study on out-of-network billing in emergency 
departments looked at the behavior of the two largest emergency 
department staffing firms in the United States.\122\ The study found 
that one firm exits networks when it enters into a contract with a 
hospital, and bills as an out-of-network provider. The other firm 
temporarily exits networks and later rejoins after negotiating higher 
in-network payments.
---------------------------------------------------------------------------

    \121\ Duffy, E. et al., ``Policies to Address Surprise Billing 
Can Affect Health Insurance Premiums.'' The American Journal of 
Managed Care 26.9 (2020): 401-404.
    \122\ Cooper, Z. et al., Surprise! Out-Of-Network Billing For 
Emergency Care in the United States, NBER Working Paper 23623, 2017, 
available at https://www.nber.org/papers/w23623.
---------------------------------------------------------------------------

    Utilizations of air ambulance services also frequently result in 
surprise bills. A study by the Government Accountability Office (GAO) 
analyzed private health insurance claims from 2012 and 2017 to describe 
the extent to which air ambulance transports are out-of-network.\123\ 
This study analyzed claims data from approximately 24,100 transports in 
2012 and another 33,800 transports in 2017 from all 50 states and the 
District of Columbia. The study found that in 2012, 75 percent of 
transports were out-of-network and in 2017, 69 percent were out-of-
network. The GAO also reported that the median price charged by 
providers of air ambulance services had increased from a rate of 
$22,100 for rotary-wing and $24,900 for fixed-wing in 2012 to 
approximately $36,400 for rotary-wing and $40,600 for a fixed-wing 
transport in 2017. The changes in price between 2012 and 2017 indicate 
a consistent rate of increase as a previously published report by the 
GAO also noted that between 2010 and 2014, the median prices charged by 
providers of air ambulance services for rotary-wing transports 
approximately doubled.\124\ Another study found that for one of the 
largest providers of air ambulance services (with a market share of 
approximately 24 percent) the average charge increased from $17,262.23 
in 2009 to approximately $50,199.24 by 2016.\125\
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    \123\ GAO (2019) Report to Congressional Committees. Air 
Ambulance. Available Data Show Privately-Insured Patients Are at 
Financial Risk (GAO-19-292) available at: https://www.gao.gov/assets/700/697684.pdf. The data analyzed included claims from over 
50 payers in each year (including both fully- and self-insured 
plans) and accounted for 110.1 million covered lives in 2012 and 
145.0 million covered lives in 2017.
    \124\ GAO (2017) Report to the Committee on Transportation and 
Infrastructure, House of Representatives. Air Ambulance. Data 
Collection and Transparency Needed to Enhance DOT Oversight. (GAO-
17-637) available at: https://www.gao.gov/assets/gao-17-637.pdf.
    \125\ Consumer Union. Up in the Air: Inadequate Regulation for 
Emergency Air Ambulance Transportation. Health Policy Report, March 
2017.
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    As the costs associated with air ambulance transports continue to 
increase, the GAO reported that providers of air ambulance services 
report entering into more network contracts.\126\ However, additional 
analyses find that many providers of air ambulance services, 
particularly those not affiliated with a hospital, do not participate 
in insurer networks and have little incentive to do so, further noting 
that network participation remains low and provider avoidance of 
insurance network participation combined with aggressive collection 
practices has been described as a business strategy of some providers 
of air ambulance services.\127\
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    \126\ GAO (2019) Report to Congressional Committees. Air 
Ambulance. Available Data Show Privately-Insured Patients Are at 
Financial Risk (GAO-19-292) available at: https://www.gao.gov/assets/700/697684.pdf.
    \127\ Missouri Department of Insurance, Financial Institutions & 
Professional Registration. Policy Brief: Health Coverage for Air 
Ambulance Transportation. January 2019; and New Mexico Office of the 
Superintendent of Insurance. Air Ambulance Memorial Study Report. 
January 2017. Available at: https://www.nmlegis.gov/handouts/ERDT%20083117%20Item%208%20NM%20Superintendent%20of%20Insurance%20Air%20Ambulance%20Memorial%20Study%20Report.pdf.
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    A study using 2014-2017 data from three large issuers to evaluate 
the share of air ambulance claims that are out-of-network and the 
prevalence and magnitude of potential surprise balance bills, found 
that 77 percent of air ambulance transports were out-of-network and 
approximately 40 percent of air ambulance transports resulted in 
potential balance bills. The bills averaged approximately $19,851 in 
addition to the standard out-of-network cost sharing, which averaged 
$561. The study also found that with out-of-network rotary-wing claims, 
issuers paid the providers' full billed charges approximately 48 
percent of the time, at an average of $35,733 and that for in-network 
providers, billed charges were paid in full only 7 percent of the time. 
They noted that self-insured plans paid out-of-network claims in full 
50 percent of the time, whereas fully insured plans paid claims in full 
38 percent of the time.\128\
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    \128\ Brown, E.C.F. et al., Out-of-Network Air Ambulance Bills: 
Prevalence, Magnitude, and Policy Solutions. The Milbank Quarterly, 
Vol. 98, No. 3, 2020 (pp. 747-774).
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    A study using claims data from a large issuer to evaluate the 
potential impact of out-of-network emergency medical transport services 
from 2013 to 2017 identified a total of 1,498,600 ambulance encounters 
of which 29,972 (2 percent) were air ambulance encounters, and of these 
26,375 (88 percent) were rotary-wing and 3,597 (12 percent) were fixed-
wing. The study further noted that the prevalence of potential surprise 
medical billing was an estimated 73 percent for rotary-wing (18,463) 
and 70 percent (2,518) for fixed-wing transports.\129\ The study 
determined that the potential surprise

[[Page 36924]]

billing amount for the study period totaled approximately $456 million 
for air ambulance services, with a yearly average of $91 million and a 
median potential surprise medical bill of approximately $27,513.\130\
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    \129\ Chhabra, H.R., McGuire, K., Scott, J.W., Nuliyalu, U., and 
Ryan, A. Most Patients Undergoing Ground And Air Ambulance 
Transportation Receive Sizable Out-Of-Network Bills. Health Affairs 
39, NO. 5 (2020): 777-782.
    \130\ This study found that potential surprise bills in the 
study period increased from $41 million in 2013 to $143 million in 
2017. The study further found that the median potential surprise 
bill from air transportation nearly doubled from $14,356 to $27,513, 
or an increase of 15 percent annually, on average, after adjustment 
for inflation and that the prevalence ranged from 25 percent 
(Minnesota) to 93 percent (Massachusetts) with the size of potential 
surprise bills varying widely.
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    A number of studies have reviewed state investigations or consumer 
complaints to obtain information on the amount of balance billing, and 
costs, associated with air ambulance transports. One study reviewed 
state investigations and found that in North Dakota, of 20 complaints 
against one provider of air ambulance services that charged a total of 
$884,244 (an average of $44,212 per flight), 33 percent of the charges 
were covered by insurance. In an additional nine states, the study 
found that 55 complaints resulted in a combined $3.8 million in 
charges, or an average of $77,000 per trip; and in Montana, the study 
found the average out-of-network rate, of the 19 bills analyzed, was 
$53,397.\131\ The GAO further analyzed 60 consumer complaints related 
to air ambulance services from Maryland and North Dakota and found that 
from 24 complaints in Maryland the balance billed amounts ranged from 
$12,300 to $52,000 and from 36 complaints in North Dakota the balance 
bills ranged from $600 to $66,000.\132\
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    \131\ Consumer Union. Up in the Air: Inadequate Regulation for 
Emergency Air Ambulance Transportation. Health Policy Report, March 
2017.
    \132\ GAO (2019) Report to Congressional Committees. Air 
Ambulance. Available Data Show Privately-Insured Patients Are at 
Financial Risk (GAO-19-292) available at: https://www.gao.gov/assets/700/697684.pdf.
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b. Impact of Surprise Medical Bills
    A study of out-of-network billing in emergency departments 
considered how some providers use the ability to bill out-of-network to 
increase payments. The study found that charges from out-of-network 
physicians in emergency departments were 637 percent of Medicare 
payments, which is 2.4 times higher than in-network payment rates, on 
average, for identical services. The study also found that emergency 
department physicians were paid in-network rates of 266 percent of 
Medicare payments, a higher percentage of Medicare payment than most 
other specialists.\133\
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    \133\ Cooper, Z. et al., Surprise! Out-Of-Network Billing For 
Emergency Care in the United States, NBER Working Paper 23623, 2017, 
available at https://www.nber.org/papers/w23623.
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    Another study using 2017 claims data from 3 large issuers looked at 
expenditures on ancillary and emergency services that are most often 
associated with surprise bills: emergency medicine professionals, 
radiologists, anesthesiologists, pathologists, emergency outpatient 
facilities, and emergency ground ambulance services.\134\ The study 
concluded that a 15 percent reduction in average payments for these 
services would lower premiums by 1.4 percent to 1.6 percent; while a 
reduction in average payments to 150 percent of Medicare rates would 
likely lower premiums by 4.5 percent to 5.1 percent. The authors 
estimated that for all consumers with commercial insurance coverage, 
1.6 percent and 5.1 percent reductions in premiums would result in 
total annual savings of $12 billion and $38 billion, respectively.
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    \134\ Duffy, E. et al., ``Policies to Address Surprise Billing 
Can Affect Health Insurance Premiums.'' The American Journal of 
Managed Care 26.9 (2020): 401-404.
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    A study using 2015 claims data from a large issuer for services 
provided at in-network hospitals considered the impact of policies that 
would prevent anesthesiologists, pathologists, radiologists, and 
assistant surgeons from balance billing and would reduce their in-
network payments to 164 percent of Medicare payments. The study 
concluded that such a reduction in payment would result in savings 
equal to 13.4 percent of spending on physicians and 3.4 percent of 
spending for people with employer-sponsored coverage, approximately $40 
billion annually.\135\
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    \135\ Cooper Z. et al., Out-of-Network Billing And Negotiated 
Payments for Hospital-Based Physicians, Health Affairs 39, No. 1, 
2020. doi: 10.1377/hlthaff.2019.00507.
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    Surprise bills result in higher out-of-pocket expenses and cause 
financial anxiety and medical debt for consumers.\136\ As discussed 
earlier in this preamble, the impact is most keenly felt by those 
communities experiencing poverty and other social risk factors. 
Potential surprise bills can vary in size, and are often large, as 
concluded by the studies discussed previously. A Federal Reserve report 
found that about 37 percent of adults in the U.S. in 2019 would not be 
able to pay an unexpected expense of $400 using cash or its 
equivalent.\137\ In a 2016 survey, among the respondents with health 
coverage who reported having difficulty paying medical bills, 75 
percent reported that copayments, deductibles or coinsurance were more 
than they could afford and 32 percent had received out-of-network bills 
that insurance either did not cover or only partially covered.\138\ Of 
those who had difficulty paying out-of-network bills, 69 percent said 
that it was a surprise bill and they had not been aware that the 
provider was out-of-network for their plan. Respondents also reported 
that bills from emergency room visits and hospitalizations often made 
up the largest share of the amount they owed. In the survey, 
respondents reported making sacrifices such as reducing expenditures on 
food, clothing, and basic household items, using up savings, working 
additional jobs or hours, borrowing, changing living arrangements, and 
reducing or delaying vacations or major household purchases. Survey 
respondents also reported being contacted by collection agencies. 
Survey results indicated that 37 percent of individuals with household 
incomes less than $50,000 (compared to 14 percent with incomes of 
$100,000 or more), and 47 percent of individuals with a disability 
(compared to 22 percent of individuals without one) had difficulties 
paying medical bills, demonstrating a disproportionate impact on these 
populations.
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    \136\ Garmon C. and Chatock B. One In Five Inpatient Emergency 
Department Cases May Lead to Surprise Bills, Health Affairs 36, No. 
1 (2017): 177-181.
    \137\ Board of Governors of the Federal Reserve System, Report 
on the Economic Well-Being of U.S. Households in 2019--May 2020, 
https://www.federalreserve.gov/publications/2020-economic-well-being-of-us-households-in-2019-dealing-with-unexpected-expenses.htm.
    \138\ Hamel, Liz et al., The Burden of Medical Debt: Results 
from the Kaiser Family Foundation/New York Times Medical Bills 
Survey, The Henry J. Kaiser Family Foundation, 2016, https://www.kff.org/wp-content/uploads/2016/01/8806-the-burden-of-medical-debt-results-from-the-kaiser-family-foundation-new-york-times-medical-bills-survey.pdf.
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    In addition, out-of-network cost sharing and surprise bills usually 
do not count towards an individual's deductible or maximum out-of-
pocket expenditure limit. Therefore, individuals with surprise bills 
may have difficulty reaching those limits, even though they may have 
high health care expenses. This can result in reduced access to care, 
since high medical expenses can cause individuals to delay or forgo 
medical care. In a 2017 survey, 64 percent of respondents reported that 
they had delayed care in the last year because of high medical expenses 
and 44 percent stated that they would forgo care if their out-of-pocket 
expenses

[[Page 36925]]

would be more than $500.\139\ Another study reported that 7 percent of 
adults with health insurance delayed or went without care in 2019 
because of cost reasons and adults who are in worse health are twice as 
likely to delay or forgo care because of cost reasons.\140\ This study 
also reported that while 10.5 percent of all adults reported delaying 
or forgoing medical care due to costs, 15.1 percent of Hispanic adults 
and 13 percent of Non-Hispanic Black adults and 17.7 percent of adults 
with income below 200 percent of the federal poverty level reported the 
same, showing the disparate effect of high cost of care on these 
communities. Another survey concluded that 65 million adults had a 
health issue but did not seek treatment because of cost reasons in 
2018.\141\
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    \139\ Heath, Sara, 64% of Patients Avoid Care Due to High 
Patient Healthcare Costs, Patient Engagement HIT, 2018, https://patientengagementhit.com/news/64-of-patients-avoid-care-due-to-of-high-patient-healthcare-costs.
    \140\ Amin, K. et al., How Does Cost Affect Access to Care?. 
Peterson-KFF Health System Tracker. January 5, 2021. https://www.healthsystemtracker.org/chart-collection/cost-affect-access-care/#item-start.
    \141\ Gallup and West Health, The U.S. Healthcare Cost Crisis. 
2019. https://news.gallup.com/poll/248081/westhealth-gallup-us-healthcare-cost-crisis.aspx.
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    In addition to causing financial hardship, surprise medical bills 
may also cause consumers to change providers in the future. Analysis of 
a large national sample of claims for obstetrics patients who had two 
deliveries covered by insurance found that 11 percent of patients 
received a surprise medical bill for their first delivery and were 13 
percent more likely to switch hospitals for the second delivery 
compared to patients who did not.\142\
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    \142\ Chartock, B. et al., Consumers' Responses to Surprise 
Medical Bills in Elective Situations, Health Affairs 38, No. 3 
(2019): 425-430.
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    Individuals living in rural areas experience socioeconomic and 
health related disparities.\143\ Rural areas have fewer primary care 
and mental health providers and higher rates of preventable 
hospitalizations. Currently, there are 1,805 rural hospitals in the 
United States,\144\ with 137 rural hospitals having closed since 
2010.\145\ Individuals who live in rural or geographically remote areas 
often must rely on air ambulance services for transfer to facilities 
with equipment and expertise to treat serious medical conditions. Often 
these transports are costly due to lack of options for in-network 
providers available to provide lifesaving services.\146\ It is 
estimated that a quarter of Americans, approximately 85 million people, 
are unable to access health care in less than an hour of travel time 
without an air ambulance, and air ambulances may be the only viable 
means of transporting patients to the health care center they 
need.\147\ One air ambulance provider estimates that 90 percent of 
their transports originate from rural areas, a defined by CMS.\148\ The 
GAO found that about 60 percent of rotary-wing bases added between 2012 
and 2017 were located in rural areas, and about half of fixed-wing 
bases added between 2012 and 2017 were rural.\149\ As a result of the 
growing reliance on air ambulance services, rural populations are 
disproportionately affected by high costs of air ambulance services.
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    \143\ North Carolina Rural Health Research Program. Rural Health 
Snapshot (2017). May 2017. https://www.shepscenter.unc.edu/wp-content/uploads/dlm_uploads/2017/05/Snapshot2017.pdf.
    \144\ American Hospital Association, Fast Facts on U.S. 
Hospitals, 2021. https://www.aha.org/statistics/fast-facts-us-hospitals.
    \145\ Cecil G. Sheps Center for Health Services Research, UNC. 
Rural Hospital Closures. https://www.shepscenter.unc.edu/programs-projects/rural-health/rural-hospital-closures/.
    \146\ Haer, A., Senate Bill 1264: The Texan Template for the 
National Fight Against Balance Billing. Texas Law Review, 99(4), 
813-838 (2021).
    \147\ Hinsdale, J.G. Report of the Council on Medical Services: 
Air Ambulance Regulations and Payments. American Medical 
Association. (2018), available at: https://www.ama-assn.org/system/files/2018-12/i18-cms-report2.pdf.
    \148\ Air Evac Lifeteam. https://lifeteam.net/history-and-
mission/
#:~:text=Approximately%2090%20percent%20of%20Air,are%20based%20in%20r
ural%20areas.
    \149\ GAO (2019) Report to Congressional Committees. Air 
Ambulance. Available Data Show Privately-Insured Patients Are at 
Financial Risk (GAO-19-292), available at: https://www.gao.gov/assets/700/697684.pdf.
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c. Existing State Laws Regarding Balance Billing
    As of February 5, 2021, 33 states have enacted legislation that 
provides some protection for consumers with regard to balance 
bills.\150\ Laws vary by state; there are differences in the types of 
networks, plans, facilities, and providers that are subject to 
regulations, and in payment standards. While most of these states 
prohibit balance billing for emergency services, many of them also 
prohibit balance billing for certain non-emergency care furnished at 
in-network hospitals. It is possible that states may enact new 
legislation or modify existing legislation in response to the passage 
of the No Surprises Act and these implementing regulations.
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    \150\ The Commonwealth Fund, State Balance-billing Protections. 
https://www.commonwealthfund.org/sites/default/files/2021-03/Hoadley_state_balance_billing_protections_table_02052021.pdf.
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    Even within a state that has enacted such protections, those 
protections typically apply only to individuals enrolled in group or 
individual health insurance coverage, as ERISA generally preempts state 
laws that regulate self-insured group health plans sponsored by private 
employers. (Some state laws allow ERISA-covered plans to opt in to the 
consumer protections and process for setting payment under the state 
law.) In addition, states are limited in their ability to address 
surprise bills that involve out-of-state providers.
    The air ambulance industry currently functions and operates within 
the health care system unlike any other entity or service, only 
somewhat due to the unique nature of the service. There are limited 
avenues for states and the U.S. Department of Transportation (DOT) to 
regulate their operations. States and the DOT have limited authority 
under the ADA to regulate the prices, routes, or services of an air 
carrier, including an air ambulance operator, in air 
transportation.\151\ The intent of the ADA was to allow the prices of 
air transportation services to be controlled by market forces.\152\ The 
ADA defines an ``air carrier'' as ``a citizen of the United States 
undertaking by any means, directly or indirectly, to provide air 
transportation;'' defining ``air transportation'' to include interstate 
air transportation.\153\ The ADA effectively limits the ability of 
states to regulate the prices, routes, or services of air carriers that 
provide transportation services,\154\ explicitly stating that states 
``may not enact or enforce a law, regulation, or other provision having 
the force and effect of law related to a price, route, or service of an 
air carrier that may provide air transportation.'' \155\ The 
Departments are not aware of any state laws regulating or limiting 
surprise billing or other price control measures with regard to air 
ambulance providers or the air ambulance industry.
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    \151\ See https://www.transportation.gov/individuals/aviation-consumer-protection/air-ambulance-service.
    \152\ Missouri Department of Insurance, Financial Institutions & 
Professional Registration. Policy Brief: Health Coverage for Air 
Ambulance Transportation. January 2019.
    \153\ 49 U.S.C. 40102.
    \154\ 49 U.S.C. 41713.
    \155\ 49 U.S.C. 41713(b).
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    State laws appear to have succeeded in providing some protection to 
consumers from balance billing. A study analyzing the impact of New 
York State's law concluded that the law resulted in a 34 percent 
reduction in surprise billing in the state and lowered in-network 
emergency department physician payments by 9 percent.\156\ In

[[Page 36926]]

addition, between the implementation of the law in March 2015 and the 
end of 2018, the law saved individuals in the state over $400 million 
with respect to emergency services.\157\ These savings were partly due 
to a reduction in costs associated with emergency services and a 
greater incentive to participate in provider networks. In New Jersey, 
issuers experienced a reduction in costs associated with emergency and 
inadvertent out-of-network claims since the state law took effect.\158\ 
The total spending on involuntary out-of-network services were reduced 
by 56 percent for issuers in the individual market and by 38 percent 
for the issuers in the small group market. A report on California law 
concluded that patients were being protected from surprise medical 
bills in the state and that issuers had broader networks such that 80 
percent to 100 percent of their hospitals and health care facilities 
had no nonparticipating providers practicing there.\159\ A study on the 
impact of California's surprise billing law analyzed claims data for 
provider specialties most affected by the law (anesthesiology, 
diagnostic radiology, pathology, assistant surgeons, and neonatal-
perinatal medicine) for the pre-implementation period from January 2014 
to June 2017 and the post-implementation period from July 2017 to 
December 2018.\160\ The study concluded that the share of services 
delivered out-of-network by the affected specialties at inpatient 
hospitals and ambulatory surgical centers decreased by 17 percent, 
ranging from a 15 percent reduction for pathology to a 31 percent 
decline for neonatal-perinatal medicine.
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    \156\ Cooper, Z. et al., Surprise! Out-Of-Network Billing For 
Emergency Care in the United States, NBER Working Paper 23623, 2017, 
available at https://www.nber.org/papers/w23623.
    \157\ New York State Department of Financial Services. New 
York's Surprise Out-of-Network Protection Law: Report on the 
Independent Dispute Resolution Process. September 2019.
    \158\ State of New Jersey Department of Banking and Insurance. 
The Out-of-network Consumer Protection, Transparency, Cost 
Containment, and Accountability Act (Pub. L. 2018, c. 32) Data 
Reporting. As of January 31, 2021. https://www.state.nj.us/dobi/division_insurance/oonarbitration/data/210131report.html.
    \159\ Health Access California. Patients Protected, Providers 
Paid: Data From Three Years of California's Compromise to Stop 
Surprise Medical Bills. September 2019. https://health-access.org/wp-content/uploads/2019/09/ha-factsheet-AB72report-final.pdf.
    \160\ Adler, L. et al. California Saw Reduction In Out-Of-
Network Care From Affected Specialties After 2017 Surprise Billing 
law. U.S.C.-Brookings Schaeffer Initiative for Health Policy, 
September 26, 2019. https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2019/09/26/california-saw-reduction-in-out-of-network-care-from-affected-specialties-after-2017-surprise-billing-law/.
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d. Benefits
    Provisions in these interim final rules will protect participants, 
beneficiaries, or enrollees with health coverage from receiving 
surprise bills for emergency services, air ambulance services furnished 
by nonparticipating providers, and non-emergency services furnished by 
nonparticipating providers at participating facilities in certain 
circumstances. Providers will no longer be able to balance bill an 
individual for emergency services. A provider will only be able to 
balance bill an individual for certain post-stabilization services, and 
for services performed by nonparticipating providers at certain 
participating facilities, if the provider or facility provides notice 
to the participant, beneficiary, or enrollee, and obtains the 
individual's consent to receive care on an out-of-network basis and be 
balance billed. Further, provisions ensuring all relevant civil rights 
protections are upheld and communication with consumers is accessible, 
in a language that is understandable, and at an appropriate literacy 
level, help to effectively confer these protections to minority and 
underserved communities.
    These interim final rules also specify that for emergency services 
furnished by a nonparticipating provider or emergency facility, and for 
non-emergency services furnished by nonparticipating providers in a 
participating health care facility, cost sharing is generally 
calculated as if the total amount that would have been charged for the 
services by a participating emergency facility or participating 
provider were equal to the recognized amount for such services, as 
defined by the statute and in these interim final rules, while for 
nonparticipating providers of air ambulance services, cost sharing is 
generally calculated as if the total amount that would have been 
charged for the services by a participating provider of air ambulance 
services were equal to the lesser of the billed amount or QPA, as 
defined by the statute and in these interim final rules.
    In addition, these interim final rules require that these cost-
sharing amounts be counted toward any in-network deductible or in-
network out-of-pocket maximums applied under the plan or coverage in 
the same manner as if such cost-sharing payments were made with respect 
to services furnished by a participating provider, participating 
facility, or participating provider of air ambulance services.
    Consider, for example, one case included in the project by 
Vox,\161\ where a victim of a violent attack was taken to an emergency 
facility. When the individual was able, he checked to make sure that 
the hospital was in-network for his plan. He was not aware, however, 
that the surgeon who performed emergency jaw surgery was 
nonparticipating for his plan and the individual received a surprise 
bill of $7,924. Two other cases in the same study included an 
individual involved in a bike crash and another individual hit by a 
public bus. Both individuals were treated at the same emergency 
facility, which was out-of-network for both their plans and received 
surprise bills of $20,243 and $27,660, respectively. In another case, 
the parents of an infant who needed an inter-facility air ambulance 
transport for urgent surgery received a surprise medical bill of 
approximately $64,000 from the air ambulance provider.\162\ Another 
case reported in the media \163\ involved an expectant mother choosing 
an in-network hospital and a participating obstetrician for the birth 
of her baby. However, a nonparticipating pediatrician was called in due 
to a potential risk of post-delivery complications for the baby. The 
mother later received a surprise bill of $636 from the pediatrician 
because her plan had denied the claim. In each of these situations, 
plans and issuers either denied the claim or paid the nonparticipating 
provider, nonparticipating facility, or nonparticipating provider of 
air ambulance services an amount that the plan or issuer considered 
reasonable for the services provided, and the nonparticipating provider 
or nonparticipating facility sent a balance bill to the individual. 
Under the No Surprises Act and these interim final rules, individuals 
in similar situations will only be responsible for in-network cost-
sharing amounts and deductibles. Nonparticipating providers and 
nonparticipating facilities will not be able to balance bill such 
individuals, but instead will need to agree to an amount of payment 
with plans and issuers or enter into the independent dispute resolution 
process to determine an appropriate payment amount, if

[[Page 36927]]

agreement on a payment amount cannot be reached.
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    \161\ Kliff S. Surprise medical bills, the high cost of 
emergency department care, and the effects on patients [published 
online August 12, 2019]. JAMA Intern Med. doi:10.1001/
jamainternmed.2019.3448.
    \162\ Wingerter, Megan. $64K Air Ambulance Tab Shows Limits of 
Surprise Billing Law. Claims Journal. January 4, 2021. https://www.claimsjournal.com/news/national/2021/01/04/301271.htm.
    \163\ Herman, Bob. Billing squeeze: Hospitals in middle as 
insurers and doctors battle over out-of-network charges. Modern 
Healthcare, August 29, 2015. https://www.modernhealthcare.com/article/20150829/MAGAZINE/308299987/billing-squeeze-hospitals-in-middle-as-insurers-and-doctors-battle-over-out-of-network-charges.
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    Therefore, individuals with health coverage, including members of 
minority and underserved communities, are likely to see a significant 
reduction in balance billing, reducing one source of anxiety, financial 
stress, and medical debt. They will also experience a reduction in out-
of-pocket expenditures, because they will only be liable for their in-
network cost-sharing amounts when receiving care from nonparticipating 
providers, emergency facilities, and providers of air ambulance 
services, which will now count towards their deductible and maximum 
out-of-pocket limits, allowing individuals to reach those limits 
sooner. As discussed previously in this preamble, a significant number 
of individuals forgo or delay care due to the cost of care. A reduction 
in out-of-pocket expenses is likely to improve access to care and allow 
individuals to obtain needed treatment that they may otherwise have 
neglected or foregone due to concerns about the cost of care.
    These interim final rules also establish a complaints process for 
receiving and resolving complaints related to these new surprise 
billing protections. The Departments are of the view that this will 
result in increased compliance with balance billing requirements and 
ensure that all individuals, including members of minority and 
underserved communities, are able to benefit from the protections 
provided by the No Surprises Act and these interim final rules. The 
Departments also seek comment from members of minority and underserved 
communities to help identify barriers to individuals exercising their 
rights under the No Surprises Act, as well as policies to address and 
remove such barriers.
    The No Surprises Act extends the applicability of the patient 
protections for choice of health care professionals to grandfathered 
health plans. Participants, beneficiaries, and enrollees in 
grandfathered plans will now be able to designate any participating 
primary care provider who is available to accept the participant, 
beneficiary, or enrollee. If patients are able to choose physicians 
they trust and with whom they have a good relationship, they are likely 
to have better health outcomes.\164\ Similarly, allowing physicians 
specializing in pediatrics to become primary care physicians for 
children will also improve health outcomes for children. The American 
Academy of Pediatrics (AAP) strongly supports the idea that the choice 
of primary care clinicians for children should include 
pediatricians.\165\ In addition, a female participant, beneficiary, or 
enrollee in a grandfathered plan who seeks coverage for obstetrical or 
gynecological care provided by a participating health care professional 
who specializes in obstetrics or gynecology will not need an 
authorization or referral by the plan, issuer, or any person (including 
a primary care provider), which will allow them to obtain care without 
any delay.
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    \164\ Olaisen, R., et al., ``Assessing the Longitudinal Impact 
of Physician-Patient Relationship on Functional Health.'' The 18 
Annals of Family Medicine 5 (2020). https://www.annfammed.org/content/18/5/422.
    \165\ See AAP Policy Statement, ``Guiding Principles for Managed 
Care Arrangements for the Health Care of Newborns, Infants, 
Children, Adolescents, and Young Adults''. https://pediatrics.aappublications.org/content/pediatrics/132/5/e1452.full.pdf.
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    The potential financial savings to consumers as a result of the 
protections in these interim final rules are significant. As of January 
1, 2022, individuals across the country will no longer receive surprise 
medical bills for out-of-network emergency services, non-emergency 
services provided by nonparticipating providers at certain 
participating health care facilities, or air ambulance services. The 
Departments understand that some of these savings will result instead 
in cost transfers from participants, beneficiaries, and enrollees to 
group health plans or issuers, as discussed later in this preamble, or 
may ultimately be paid for by individuals in the form of increased 
health insurance premiums, which will be discussed in future 
rulemaking. However, the Departments anticipate that there are 
potentially additional cost savings for individuals, but are unaware of 
comprehensive national data that quantifies the potential financial 
benefits to individuals of the surprise billing protections included in 
these rules and invite stakeholders to share relevant data that would 
help the Departments quantify this potential consumer financial 
benefit.
e. Costs
    Plans, issuers, health care providers, facilities, and providers of 
air ambulance services will incur significant costs to comply with the 
requirements of these interim final rules.
    These interim final rules specify that for emergency services 
furnished by a nonparticipating provider or emergency facility, and for 
non-emergency services furnished by nonparticipating providers in a 
participating health care facility, cost sharing is generally 
calculated as if the total amount that would have been charged for the 
services by a participating emergency facility or participating 
provider were equal to the recognized amount for such services, as 
defined by the No Surprises Act and these interim final rules. For 
nonparticipating providers of air ambulance services, cost sharing is 
generally calculated as if the total amount that would have been 
charged for the services by a participating provider of air ambulance 
services were equal to the lesser of the billed amount or the QPA, as 
defined by the statute and in these interim final rules. In addition, 
these interim final rules require that such cost sharing must also be 
counted toward any in-network deductible or in-network out-of-pocket 
maximums applied under the plan or coverage in the same manner as if 
such cost sharing payments were made with respect to services furnished 
by a participating provider, a participating facility, or a 
participating provider of air ambulance services.
    Under these interim final rules, cost-sharing for emergency 
services furnished by a nonparticipating provider or emergency 
facility, and for non-emergency services furnished by nonparticipating 
providers in a participating health care facility, must be calculated 
based on the ``recognized amount,'' which is: (1) An amount determined 
by an applicable All-Payer Model Agreement under section 1115A of the 
Social Security Act, (2) if there is no such applicable All-Payer Model 
Agreement, an amount determined by a specified state law, or (3) if 
there is no such applicable All-Payer Model Agreement or specified 
state law, the lesser of the billed amount for the services or the QPA, 
which generally is the median of the contracted rates of the plan or 
issuer for the item or service furnished in the applicable geographic 
region. For air ambulance services, subject to these interim final 
rules, plans and issuers generally must use the QPA to calculate cost 
sharing.
    Plans and issuers will incur significant costs to calculate the 
recognized amount and applicable cost-sharing amount. The Departments 
assume that for self-insured group health plans, the costs will be 
incurred by third party administrators (TPAs). The Departments estimate 
a total 1,758 entities--1,553 issuers \166\ and 205

[[Page 36928]]

TPAs \167\--will be required to comply with these interim final rules 
with regard to calculating the QPA and to calculate an individual's 
cost sharing liability. The Departments anticipate that issuers and 
TPAs will need to make changes to their information technology (IT) 
systems to include the capability to calculate the QPA for all out-of-
network claims subject to the surprise billing protections, or the 
amount determined by state law or All-Payer Model Agreement, if 
applicable, and provide the required information related to the QPA to 
nonparticipating providers and nonparticipating emergency facilities. 
In addition, system changes will be necessary to accept and process 
out-of-network claims, calculate the appropriate cost-sharing amounts 
and include them in deductible and out-of-pocket maximum limits. The 
one-time cost to make system changes to include these new 
functionalities may be slightly lower for plans (or TPAs) and issuers 
already subject to state balance billing laws. The Departments estimate 
that each plan (or TPA) or issuer will incur one-time costs of 
approximately $2.8 million, on average, to make the necessary system 
changes to automate the process. The total costs for all plans (or 
TPAs) and issuers will be approximately $4,958 million. The Departments 
assume that these one-time costs will be incurred in 2021. In addition, 
each issuer or TPA will incur ongoing costs related to system 
maintenance, processing out-of-network claims and to acquire external 
data necessary to calculate the QPA when there is insufficient 
information to calculate median contracted rates starting in 2022. The 
Departments estimate each issuer or TPA will incur, on average, ongoing 
costs of $1.2 million in 2022 and approximately $411,840 annually 
starting in 2023. The total annual costs for all issuers and TPAs will 
be $2,047 million in 2022 and $724 million annually starting in 2023. 
See Tables 2 and 3 for more details. The Departments seek comment on 
these estimates.
---------------------------------------------------------------------------

    \166\ Based on data from MLR annual report for the 2019 MLR 
reporting year, available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.
    \167\ Non-issuer TPAs based on data derived from the 2016 
Benefit Year reinsurance program contributions.
    \168\ The CALC tool (https://calc.gsa.gov/) was built to assist 
acquisition professionals with market research and price analysis 
for labor categories on multiple U.S. General Services 
Administration (GSA) & Veterans Administration (VA) contracts. Wages 
obtained from the CALC database are fully burdened to account for 
fringe benefits and overhead costs.
    \169\ See May 2020 Bureau of Labor Statistics, Occupational 
Employment Statistics, National Occupational Employment and Wage 
Estimates, available at https://www.bls.gov/oes/current/oes_nat.htm.

                     Table 2--One-Time IT Costs Related Costs for Plans and Issuers in 2021
----------------------------------------------------------------------------------------------------------------
                                                                                               2021
                                                                    Hourly wage  -------------------------------
                           Occupation:                                 rate                          Estimated
                                                                                   Time (hours)     labor cost
----------------------------------------------------------------------------------------------------------------
                                                    IT Costs
----------------------------------------------------------------------------------------------------------------
Project Manager/Team Lead.......................................         $110.00           2,080        $228,800
Scrum Master....................................................          110.00           3,640         400,400
Senior Business Analysis........................................          134.00           1,560         209,040
UX Researcher/Service Designer..................................          129.00           2,080         268,320
Technical Architect/Sr. Developer...............................          207.00           2,080         430,560
DevOps Engineer/Security Engineer...............................          143.00           1,560         223,080
Application Developer...........................................          111.00           9,360       1,038,960
                                                                 -----------------------------------------------
    Total IT Costs for Each Issuer or TPA.......................  ..............          22,360       2,799,160
        Total IT Costs for all Issuers and TPAs.................  ..............      39,308,880   4,920,923,280
----------------------------------------------------------------------------------------------------------------
                                                Management Costs
----------------------------------------------------------------------------------------------------------------
Chief Executives................................................          190.24              80          15,219
Lawyers.........................................................          143.18              40           5,727
                                                                 -----------------------------------------------
    Total.......................................................  ..............             120          20,946
        Total Management Costs for all plans and issuers........  ..............         210,960      36,823,771
        Total Costs for all Issuers and TPAs....................  ..............      39,519,840   4,957,747,051
----------------------------------------------------------------------------------------------------------------
Note: All wage rates except those related to management costs use the Contract Awarded Labor Category (CALC)
  tool.\168\ Wage rates for management costs are derived using data from the Bureau of Labor Statistics to
  derive average labor costs (including a 100 percent increase for fringe benefits and overhead).\169\


                 Table 3--Ongoing Annual Operational Costs for Issuers and TPAs starting in 2022
----------------------------------------------------------------------------------------------------------------
                                                               2022                        2023 onwards
                                    Hourly wage  ---------------------------------------------------------------
           Occupation:                 rate                          Estimated                       Estimated
                                                   Time (hours)     labor cost     Time (hours)     labor cost
----------------------------------------------------------------------------------------------------------------
Project Manager/Team Lead.......         $110.00           1,040        $114,400             520         $57,200
Scrum Master....................          110.00           1,300         143,000             520          57,200
Senior Business Analysis........          134.00             780         104,520               0               0
UX Researcher/Service Designer..          129.00             780         100,620               0               0
Technical Architect/Sr.                   207.00           1,040         215,280             520         107,640
 Developer......................
DevOps Engineer/Security                  143.00             780         111,540             520          74,360
 Engineer.......................
Application Developer...........          111.00           3,380         375,180           1,040         115,440
                                 -------------------------------------------------------------------------------
    Total for Each Plan or        ..............           9,100       1,164,540           3,120         411,840
     Issuer.....................

[[Page 36929]]

 
        Total Costs for all       ..............      15,997,800   2,047,261,320       5,484,960     724,014,720
         Issuers and TPAs.......
----------------------------------------------------------------------------------------------------------------

    Issuers and TPAs will also need to revise their standard operating 
procedures to include processes related to out-of-network claims, 
recognized amount and QPA, and provide training to their billing 
personnel and customer service representatives. The Departments assume 
that, for each issuer or TPA, a business operations specialist will 
need 40 hours (at an hourly labor cost of $81.06) and a senior manager 
(at an hourly labor cost of $114.24) will need 16 hours to revise the 
standard operating procedures, with a total cost of approximately 
$5,070. In addition, the Departments assume that, on average, 10 staff 
at each issuer and TPA will receive 4 hours of training at a cost of 
$1,824. For all 1,758 issuers and TPAs, the total cost of revising 
standard operating procedures and training will be $12.1 million. The 
Departments assume that these one-time costs will be incurred in 2021 
and that new staff will be trained as a part of the usual on-boarding 
process at minimal additional cost and burden.
    Health care and emergency facilities will also incur costs to 
revise their standard operating procedures and provide training to 
their staff regarding notice and consent requirements, patient 
disclosures, and out-of-network billing. The Departments estimate that 
there are 16,992 emergency and health care facilities (6,090 
hospitals,\170\ 270 independent freestanding emergency 
departments,\171\ 9,280 ambulatory surgical centers,\172\ and 1,352 
critical access hospitals) that will incur this cost. The Departments 
assume that for hospital-affiliated freestanding emergency departments, 
the disclosure will be developed by the parent hospitals. The 
Departments estimate that, on average, for each health care facility, a 
business operations specialist will need 40 hours and a senior manager 
will need 16 hours to revise the standard operating procedures, with a 
total cost of approximately $5,070. In addition, on average, 10 staff 
at each hospital will receive 4 hours of training at a cost of 
approximately $1,824. This estimate is an average of the costs and 
burden to be incurred by each health care facility and the Departments 
recognize that the costs and burden may vary depending on the size of 
each health care facility. The total one-time cost for 16,992 health 
care facilities is estimated to be approximately $117.2 million, to be 
incurred in 2021, with the expectation that new staff will be trained 
as a part of the usual on-boarding process at minimal additional cost 
and burden.
---------------------------------------------------------------------------

    \170\ American Hospital Association, Fast Facts on U.S. 
Hospitals, 2021. Available at https://www.aha.org/statistics/fast-facts-us-hospitals.
    \171\ Emergency Medicine Network, 2018 National Emergency 
Department Inventory--USA. Available at https://www.emnet-usa.org/research/studies/nedi/nedi2018/.
    \172\ Moriarty, A., Definitive Healthcare, How Many Ambulatory 
Surgery Centers are in the US?. Blog. April 10, 2019. Available at: 
https://blog.definitivehc.com/how-many-ascs-are-in-the-
us#:~:text=Currently%2C%20there%20are%20more%20than,Healthcare's%20pl
atform%20on%20surgery%20centers.
---------------------------------------------------------------------------

    Providers of air ambulance services will also incur costs to revise 
their standard operating procedures and provide training to their staff 
regarding out-of-network billing. The Departments assume that for each 
air ambulance provider, a business operations specialist will need 40 
hours and a senior manager will need 16 hours to revise the standard 
operating procedures, with a total cost of approximately $5,070. In 
addition, on average, 10 staff for each provider will receive 4 hours 
of training at a cost of approximately $1,824. The total on-time cost 
for each provider of air ambulance services will be approximately 
$6,894 in 2021. The total one-time cost for 75 providers of air 
ambulance services \173\ is estimated to be approximately $517,086, to 
be incurred in 2021, with the expectation that new staff will be 
trained as a part of the usual on-boarding process at minimal 
additional cost and burden.
---------------------------------------------------------------------------

    \173\ Federal Aviation Administration, Fact Sheet--FAA 
Initiatives to Improve Air Ambulance Safety, 2014, https://www.faa.gov/news/fact_sheets/news_story.cfm?newsId=15794.
---------------------------------------------------------------------------

    The Departments estimate that grandfathered plans and issuers will 
incur a total cost of approximately $4,516,225 in 2022 to provide the 
notice of right to designate a primary care provider to participants, 
beneficiaries, and enrollees. Self-insured plans opting in to state law 
will incur one-time costs of $50,708 in 2022 to include a disclosure in 
plan documents. TPAs and issuers will also incur costs of approximately 
$55.4 million annually to share information related to QPAs with 
nonparticipating providers, nonparticipating emergency facilities, and 
nonparticipating providers of air ambulance services. Additionally, 
issuers and TPAs will incur costs to make publicly available, post on a 
public website of the plan or issuer, and include on each explanation 
of benefits the disclosure regarding patient protections against 
balance billing. The Departments estimate a one-time cost, incurred in 
2021, for all issuers and TPAs to be $699,245 and ongoing annual costs, 
to begin in 2022, of approximately $23.4 million. These costs are 
discussed in detail in the Paperwork Reduction Act section of this 
preamble.
    Nonparticipating providers and nonparticipating emergency 
facilities may balance bill a participant, beneficiary, or enrollee if 
certain notice and consent requirements have been met. Providers and 
facilities will incur costs to prepare the notice, provide notice and 
receive consent from patients, retain records, and provide notice to 
plans and issuers. HHS estimates that the one-time cost to prepare the 
notice and consent documents will be approximately $22.6 million in 
2021. The ongoing annual cost to provide the notice and obtain consent, 
retain records and provide notice to plans and issuers is estimated to 
be approximately $117.2 million starting in 2022. In addition, 
individuals receiving the notice and consent, where applicable, will 
incur costs of approximately $99.1 million annually, starting in 2022, 
to read and understand the notice. These costs are discussed in detail 
in the Paperwork Reduction Act section of this preamble.
    Health care providers and facilities will also incur costs to make 
publicly available, post on a public website of the provider or 
facility, and provide to participants, beneficiaries, and enrollees a 
one-page notice disclosure on patient protections against surprise 
billing and for providers and facilities to enter into agreements for 
the facilities to provide the disclosure on behalf of the providers, 
HHS estimates the one-time total cost, to be incurred in 2021, to be

[[Page 36930]]

approximately $13.1 million and the ongoing annual cost, to begin in 
2022, to be approximately $2.5 million. HHS encourages states to 
develop language to assist facilities in fulfilling this disclosure 
requirement as it applies to disclosing state protections against 
balance billing. HHS estimates that the 33 states that currently have 
legislation to provide some protection to consumers for surprise 
billing will incur one-time costs of approximately $10,732 in 2021 to 
develop the model language. These costs are discussed in detail in the 
Paperwork Reduction Act section of this preamble.
    The No Surprises Act directs the Departments to establish a process 
to receive complaints regarding violations of the application of the 
QPA by group health plans and health insurance issuers offering group 
or individual health coverage. Individuals and entities that submit a 
complaint related to surprise billing will also incur costs to do so. 
As discussed in the Paperwork Reduction Act section of the preamble, 
the Departments estimate related costs to be approximately $97,452 
annually starting in 2022. In addition, the federal government will 
incur a one-time cost of approximately $16 million in 2021 to build the 
IT system to receive and process complaints, an additional $3 million 
to update existing systems in 2021, and ongoing annual costs of 
approximately $1.6 million in 2021, $9.9 million in 2022, $10.1 million 
in 2023 and $10.3 million in 2024 and subsequent years to process the 
complaints received and for system maintenance.
    As discussed previously, individuals with protections against 
surprise billing are likely to experience a reduction in out-of-pocket 
expenses. This may increase their use of health care, which could lead 
to an increase in health care expenditures overall.
    The Departments seek comment on these estimates and also on any 
additional costs incurred by plans, issuers, providers, and facilities.
f. Transfers
    The provisions in these interim final rules will result in lower 
out-of-pocket spending by individuals. In situations where surprise 
bills currently occur, participants, beneficiaries, and enrollees will 
be responsible for only an approximation of the cost-sharing amounts 
they would have paid had the services been provided by a participating 
emergency facility, participating provider, or participating provider 
of air ambulance services. Plans and issuers will now be required to 
pay for some expenses for items and services provided by 
nonparticipating facilities, providers, and providers of air ambulance 
services that they previously did not pay for. Thus, expenditures will 
shift from certain individuals to plans and issuers. In addition, it is 
possible the out-of-network rates collected by some providers, 
including air ambulance providers, and facilities will be lower than 
they would have been if the providers and facilities were able to 
balance bill the individuals. Such situations will result in transfers 
from providers and facilities to individuals. If there is a decrease in 
payments to some participating providers, as has happened for in-
network emergency department physician payments in the state of New 
York,\174\ there will be a transfer from those providers to plans, 
issuers, participants, beneficiaries, and enrollees.
---------------------------------------------------------------------------

    \174\ Cooper, Z. et al., Surprise! Out-Of-Network Billing For 
Emergency Care in the United States, NBER Working Paper 23623, 2017, 
available at https://www.nber.org/papers/w23623.
---------------------------------------------------------------------------

    As discussed previously in this preamble, these interim final rules 
are the first of several rules implementing the No Surprises Act and 
the transparency provisions of title II of Division BB of the CAA. 
Later this year, the Departments intend to issue additional regulations 
including regulations regarding the federal IDR process. The impact of 
the provisions of the No Surprises Act on premiums will depend on 
provisions not included in these interim final rules, and more detailed 
analysis will therefore be included in future rulemaking.\175\
---------------------------------------------------------------------------

    \175\ These interim final rules and the forthcoming regulations 
are interrelated, and in cases such as this, attribution of impacts 
is challenging. Inclusion of more detailed analysis in later 
rulemaking, rather than these interim final rules--about, for 
example, changes in premiums incentivized by the suite of surprise 
billing policies--should not be interpreted as indicating certainty 
that such impacts will not occur as a result of these interim final 
rules.
---------------------------------------------------------------------------

C. Regulatory Alternatives

    In developing the interim final rules, the Departments considered 
various alternative approaches.
    Determining the Cost-sharing Amount. The No Surprises Act generally 
requires that cost sharing for items and services subject to the 
surprise billing protections be based on the recognized amount. In 
instances where this requirement applies, the Departments considered 
whether it should apply where the billed charge is less than the 
recognized amount. In these instances, assuming the plan or issuer 
would not pay more than the billed charge, calculating cost sharing 
based on the QPA (which is one way in which the recognized amount might 
be determined) would require a participant, beneficiary, or enrollee to 
pay a higher percentage in cost sharing than if such items or services 
had been furnished by a participating provider. However, sections 
9816(a)(1)(C)(ii) and 9816(b)(1)(A) of the Code, sections 
716(a)(1)(C)(ii) and 716(b)(1)(A) of ERISA, and sections 2799A-
1(a)(1)(C)(ii) and 2799A-1(b)(1)(A) of the PHS Act expressly prohibit 
plans and issuers from applying a cost-sharing requirement that is 
greater than the requirement that would apply if services were provided 
by a participating provider or a participating emergency facility. 
Therefore, under these interim final rules, in circumstances where an 
All-Payer Model Agreement or specified state law does not apply to 
determine the recognized amount, cost sharing must be based on the 
lesser of the QPA or the amount billed by the provider for the item or 
service.
    Methodology for Calculating the QPA. The No Surprises Act generally 
requires the QPA to be calculated based on the median of the contracted 
rates of the plan or issuer. The Departments considered whether plans 
and issuers should take into account the number of claims paid at the 
contracted rate under each contract in calculating the QPA. Doing so, 
however, would not result in a pure median of the contracted rates, 
which the Departments are of the view would most clearly follow the 
language of the No Surprises Act. In addition, the Departments are of 
the view that this approach would likely put upward pressure on the 
QPA, by giving greater weight to contracts of larger provider groups 
and facilities, which are more likely to have negotiated higher rates 
than small provider groups and facilities. This approach could lead to 
higher out-of-pockets costs for individuals.
    The Departments also considered requiring plans and issuers to 
calculate separate median contracted rates for facilities based on the 
characteristics of facilities, such as by distinguishing teaching 
hospitals from non-teaching hospitals, rather than distinguishing only 
on the basis of whether the facility is an emergency department of a 
hospital or an independent freestanding emergency department. The 
Departments decided against this approach, as doing so would result in 
a higher median contracted rate for facilities with higher operating 
costs and is not clearly contemplated in the definition of QPA under 
the No Surprises Act. The Departments are of the view that the 
different operating costs among facilities with different 
characteristics should not have such a

[[Page 36931]]

dramatic impact on median contracted rates. However, the Departments 
recognize that payment amounts for facility charges may vary depending 
on whether an emergency facility is connected with a hospital. 
Therefore, the interim final rules allow separate median contracted 
rates to be calculated for emergency services based on whether the 
facility is an emergency department of a hospital or an independent 
freestanding emergency department.
    With respect to calculating a separate QPA for each item and 
service for each geographic region, the Departments considered whether 
to define each geographic region as the applicable rating area as 
defined for purposes of the individual and small group market rating 
rules under PHS Act 2701 section and 45 CFR 147.102, while allowing 
states the flexibility to establish alternative geographic regions. 
However, some states define rating area by county, resulting in large 
numbers of rating areas in a state, some of which might include few, if 
any, facilities and providers. Therefore, adopting rating area as the 
standard for geographic region could lead to a large number of 
geographic regions for which a plan or issuer would have to calculate 
separate median contracted rates, a large number of geographic regions 
without sufficient information, as well as a large number of geographic 
regions in which the median contracted rate is influenced by outliers. 
Therefore, the interim final rules do not adopt this approach to 
defining geographic regions.
    With respect to the statutory requirement for plans and issuers to 
calculate separate QPAs for each insurance market, including for self-
insured group health plans, the Departments considered whether the 
market for self-insured group health plans should be limited to only 
self-insured group health plans offered by the same plan sponsor. 
However, this could lead to greater instances of a self-insured plan 
lacking sufficient information, so the interim final rules instead 
define the self-insured market as all self-insured group health plans 
offered by the same plan sponsor, or at the option of the plan sponsor, 
all self-insured group health plans administered by the same entity 
that is responsible for determining the QPA on behalf of the plan 
(including a third-party administrator contracted by the plan).
    Participant, Beneficiary, and Enrollee Responsibility to Pay 
Recognized Amount Only. In instances where a participant, beneficiary, 
or enrollee has not satisfied their deductible, the Departments 
considered whether the plan or issuer should not be required to pay any 
portion of the out-of-network rate to the nonparticipating provider or 
facility. However, these interim final rules require that when the out-
of-network rate exceeds the recognized amount (the amount upon which 
cost sharing is based), a plan or issuer must pay the provider or 
facility the difference between the out-of-network rate and the cost-
sharing amount (the latter of which in this case would equal the 
recognized amount), even in instances where an individual has not 
satisfied their deductible. This approach is consistent with the 
purpose of the No Surprises Act to protect participants, beneficiaries, 
or enrollees from surprise balance bills that exceed in-network cost-
sharing requirements. This approach is also consistent with section 102 
of the No Surprises Act, which amends section 223 of the Code to 
specify that these payments will not prevent a plan from qualifying as 
a high-deductible health plan or make an individual ineligible to 
contribute to a health savings account.
    Definition of Health Care Facility. The No Surprises Act defines a 
health care facility as each of the following with respect to non-
emergency services: (1) A hospital (as defined in 1861(e) of the Social 
Security Act); (2) a hospital outpatient department; (3) a critical 
access hospital (as defined in section 1861(mm)(1) of the Social 
Security Act); (4) an ambulatory surgical center described in section 
1833(i)(1)(A) of the Social Security Act; or (5) any other facility, 
specified by the Departments, that provides items or services for which 
coverage is provided under the plan or coverage, respectively. The 
Departments considered whether to expand the definition of health care 
facility in this rulemaking, but concluded that the facilities at which 
balance billing are currently most frequent are included in the current 
definition. The Departments anticipate continuing to monitor the 
prevalence of surprise billing at various facilities and may expand the 
definition in future rulemaking. In particular, as discussed earlier in 
this preamble, the Departments considered including urgent care centers 
in the definition of health care facility. However, given the variation 
across states in how urgent care centers are licensed, including the 
scope of services that the centers are permitted to provide, the 
Departments decided to instead seek comment regarding whether the 
definition of health care facility should be extended to urgent care 
centers, including those that are not licensed as facilities under 
state law.
    With respect to the definition of participating health care 
facility and participating emergency facility, the Departments 
considered excluding facilities that had only single case agreements in 
place with a plan or issuer. However, the Departments are persuaded 
that doing so could harm participants, beneficiaries or enrollees. When 
individuals are provided with care, generally non-emergency items or 
services, under a single case agreement, they should not have to worry 
about potential surprise bills. Excluding facilities with single case 
agreements from the definitions of participating facilities and 
participating emergency facilities would be inconsistent with the 
Departments' intent to protect individuals from surprise medical bills.
    Applicability of State Law. In determining how state laws around 
balance billing would intersect with the No Surprises Act, the 
Departments considered alternatives to the approach taken under these 
interim final rules, which seek to supplement, rather than supplant 
state balance billing laws. Specifically, the Departments considered 
whether to allow states to be more protective of consumers than the No 
Surprises Act with respect to whether individuals are permitted to 
waive balance billing protections upon notice and consent, and 
concluded that it is in the public interest to interpret the No 
Surprises Act as creating a floor regarding individuals' ability to 
waive balance billing protections. The Departments also considered 
whether state provisions allowing ERISA-covered plans to opt in to the 
state requirements should be considered specified state laws for 
purposes of setting the recognized amount and out-of-network rate 
regarding ERISA-covered plans that have opted into the state programs. 
The Departments have concluded such deference to state law is 
consistent with the overarching structure of the No Surprises Act. The 
Departments also considered allowing providers, facilities and 
providers of air ambulance services to opt in to state laws (as allowed 
under state laws), but decided to instead seek comments on this 
approach, as discussed earlier in this preamble.
    Notice and Consent Exception to Prohibition on Balance Billing. 
Under the No Surprises Act and these interim final rules, the 
protections that limit cost sharing and prohibit balance billing do not 
apply to certain non-emergency services or to certain post-
stabilization services provided in the context of emergency care, if 
the nonparticipating

[[Page 36932]]

provider or nonparticipating emergency facility furnishing those items 
or services provides the participant, beneficiary, or enrollee, with 
certain notice, the individual acknowledges receipt of the information 
in the notice, and the individual consents to be treated by the 
nonparticipating emergency facility or nonparticipating provider. These 
interim final rules establish the conditions under which notice and 
consent may be provided for certain non-emergency and post-
stabilization services. The Departments considered a number of 
additional conditions under which the notice and consent exception 
would not be permitted, such as if the individual were experiencing 
pain, or under the influence of alcohol or drugs, including the use or 
administration of prescribed medications. The Departments are of the 
view that these factors are critical considerations for whether an 
individual is able to provide informed consent, and concluded that 
these are factors that a provider would be expected to assess when 
determining if the individual is capable of understanding the 
information provided in the notice and the implications of consenting. 
The HHS interim final rules therefore establish requirements related to 
the notice and consent exception. HHS considered a number of 
alternatives in developing these interim final rules. HHS considered 
different standards to apply in defining geographic regions for 
purposes of language access requirements. The HHS interim final rules 
require providers and facilities to provide the notice and consent 
documents in the 15 most common language in the state, or in a 
geographic region, which reasonably reflects the geographic region 
served by the applicable facility. HHS also considered the use of 
MSAs,\176\ hospital service areas (HSAs),\177\ hospital referral 
regions (HRRs),\178\ and public use microdata areas (PUMAs),\179\ 
applied based on where the applicable facility is located. These 
geographic regions might better reflect a facility's service area than 
a state. However, HHS is of the view that allowing providers and 
facilities to use the state as the geographic region would reduce 
burden, and concluded that the standard in the HHS interim final rules 
provides sufficient flexibility for providers and facilities to 
determine how best to serve their population. HHS considered requiring 
that a provider or facility that uses a region other than a state must 
use a geographic region smaller than a state, but determined this 
approach would not adequately address the needs to facilities that 
serve populations that cross state borders. HHS also considered 
alternatives regarding the inapplicability of the notice and consent 
exception to ancillary services. HHS considered expanding the 
definition of ancillary services to include other services for which 
surprise billing frequently occurs. In particular, stakeholders raised 
concerns about providers who deliver services to individuals during 
inpatient stays, but who the individual has little involvement in 
selecting. These included, for example, providers furnishing mental 
health services, cardiology services, and rehabilitative services. The 
Departments are concerned about surprise bills that arise in these 
situations, but prefer to further consider the recommendation. 
Individuals may have strong preferences to select these types of 
providers for out-of-network care, and it is therefore not clear 
whether they would be appropriate to include among the types of 
specialties for which notice and consent to be balance billed is 
prohibited.
---------------------------------------------------------------------------

    \176\ https://www.census.gov/programs-surveys/metro-micro/about.html.
    \177\ https://www.dartmouthatlas.org/faq/.
    \178\ https://www.dartmouthatlas.org/faq/.
    \179\ https://www.census.gov/programs-surveys/geography/
guidance/geo-areas/
pumas.html#:~:text=Public%20Use%20Microdata%20Areas%20(PUMAs)%20are%2
0non%2Doverlapping%2C,and%20the%20U.S.%20Virgin%20Islands.
---------------------------------------------------------------------------

    Applicability date. The Departments considered delaying the 
applicability date of these interim final rules in response to 
stakeholder feedback regarding the challenges of coming into compliance 
with these interim final rules by January 1, 2022. The Departments 
recognize the challenges that providers (including providers of air 
ambulance services), facilities, plans, and issuers will face in making 
the necessary changes to comply with these new requirements. However, 
delaying the applicability date would have significant ramifications 
for participants, beneficiaries, and enrollees and would continue to 
leave them vulnerable to surprise bills. Therefore, the Departments 
concluded that it is in the public interest to require these interim 
final rules to be applicable in accordance with the applicability dates 
in the No Surprises Act.
    Provider Disclosure Requirements Regarding Patient Protections 
against Balance Billing. Section 2799B-3 of the PHS Act, as added by 
the No Surprises Act, requires providers and facilities to provide 
disclosures regarding patient protections against balance billing. 
These interim final rules include provisions to limit this disclosure 
requirement to certain providers and facilities, and with respect to 
certain individuals. These interim final rules also include a special 
rule to limit unnecessary duplication, so that a facility's disclosure 
may satisfy the disclosure requirement on behalf of providers in 
certain circumstances. HHS considered applying the disclosure 
requirement more broadly. However, HHS determined that a broader 
application of the disclosure requirements would increase the 
administrative costs associated with the requirement, without 
commensurate benefits to individuals. Rather, HHS was concerned that 
requiring the disclosure be made by facilities and providers in 
circumstances where the protections against balance billing would not 
apply could create consumer confusion about their rights under the No 
Surprises Act. Additionally, HHS determined that requiring providers to 
provide a disclosure when furnishing services at a facility that was 
also required to provide a disclosure was unnecessary and could be 
overwhelming to consumers. If providers furnishing services at a 
facility were required to provide a disclosure as well, at the very 
least, the cost of printing and materials for the notices would have 
doubled, for an additional $2.5 million in costs. If, in addition, 
providers had to develop the notices they provided, there would have 
been additional costs. If all providers were required to provide a 
notice, regardless of whether the services are furnished at a 
provider's office or a health care facility, then in addition to the 
39,690,940 individuals treated in the emergency facilities,\180\ 
526,685,200 individuals visiting a provider's office or a health care 
facility would have been provided a disclosure, for a total of 
566,376,140 disclosures.\181\ The cost to print the disclosures would 
have been approximately $28.3 million, approximately $25.8 million more 
than it is estimated to be under the provisions in these interim final 
rules.
---------------------------------------------------------------------------

    \180\ Agency for Healthcare Research and Quality, HCUP Fast 
Stats--Trends in Emergency Department Visits. https://www.hcup-us.ahrq.gov/faststats/NationalTrendsEDServlet?measure1=01&characteristic1=14&measure2=&characteristic2=11&expansionInfoState=hide&dataTablesState=hide&definitionsState=hide&exportState=hide#export.
    \181\ Estimates based on data on postoperative office visits. 
Centers for Disease Control, National Ambulatory Medical Care 
Survey: 2016 National Summary Tables. Available at https://www.cdc.gov/nchs/fastats/physician-visits.htm.

---------------------------------------------------------------------------

[[Page 36933]]

D. Paperwork Reduction Act--Department of Health and Human Services

    Under the Paperwork Reduction Act of 1995 (PRA), HHS is required to 
provide 30-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
OMB for review and approval. To fairly evaluate whether an information 
collection should be approved by OMB, section 3506(c)(2)(A) of the PRA 
requires that HHS solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of HHS' estimate of the information 
collection burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    HHS is soliciting public comment on each of the required issues 
under section 3506(c)(2)(A) of the PRA for the following information 
collection requirements (ICRs).
1. Wage Estimates
    To derive wage estimates, the Departments generally used data from 
the Bureau of Labor Statistics to derive average labor costs (including 
a 100 percent increase for fringe benefits and overhead) for estimating 
the burden associated with the ICRs.\182\ Table 4 presents the mean 
hourly wage, the cost of fringe benefits and overhead, and the adjusted 
hourly wage.
---------------------------------------------------------------------------

    \182\ See May 2020 Bureau of Labor Statistics, Occupational 
Employment Statistics, National Occupational Employment and Wage 
Estimates, available at https://www.bls.gov/oes/current/oes_nat.htm.
---------------------------------------------------------------------------

    As indicated, employee hourly wage estimates have been adjusted by 
a factor of 100 percent. This is necessarily a rough adjustment, both 
because fringe benefits and overhead costs vary significantly across 
employers, and because methods of estimating these costs vary widely 
across studies. Nonetheless, there is no practical alternative, and the 
Departments are of the view that doubling the hourly wage to estimate 
total cost is a reasonably accurate estimation method.

                                               Table 4--Wage Rates
----------------------------------------------------------------------------------------------------------------
                                                                                      Fringe
                                                   Occupational     Mean hourly    benefits and      Adjusted
                Occupation title                       code        wage ($/hour)   overhead ($/   hourly wage ($/
                                                                                       hour)           hour)
----------------------------------------------------------------------------------------------------------------
Secretaries and Administrative Assistants,               43-6014          $19.43          $19.43          $38.86
 Except Legal, Medical, and Executive...........
Lawyer..........................................         23-1011           71.59           71.59          143.18
All Occupations.................................         00-0000           27.07           27.07           54.14
Computer Programmers............................         15-1251           45.98           45.98           91.96
Medical Secretaries and Administrative                   43-6013           18.75           18.75           37.50
 Assistants.....................................
Human Resources Specialists.....................         13-1071           33.38           33.38           66.76
Business Operations Specialist..................         13-1198           38.57           38.57           77.14
General and Operations Manager..................         11-1021           59.15           59.15          118.30
Compensation and Benefits Manager...............         11-3111           65.94           65.94          131.88
Computer and Information Systems Managers.......         11-3021           77.76           77.76          155.52
----------------------------------------------------------------------------------------------------------------

2. ICRs Regarding Information To Be Shared About QPA (45 CFR 
149.140(d))
    These interim final rules require plans and issuers to provide 
certain information regarding the QPA to nonparticipating providers, or 
nonparticipating emergency facilities in cases in which the recognized 
amount with respect to an item or service furnished by the provider or 
facility is the QPA (and in all cases subject to these rules for 
nonparticipating providers of air ambulance services). Specifically, 
plans and issuers must provide the following information to providers 
(including air ambulance providers) and facilities, when making an 
initial payment or notice of denial of payment: (1) The QPA for each 
item or service involved; (2) a statement certifying that the plan or 
issuer has determined that the QPA applies for the purposes of the 
recognized amount (or, in the case of air ambulance services, for 
calculating the participant's, beneficiary's, or enrollee's cost 
sharing), and each QPA was determined in compliance with the 
methodology established in these interim final rules; (3) a statement 
that if the provider or facility, as applicable, wishes to initiate a 
30-day open negotiation period for purposes of determining the amount 
of total payment, the provider or facility may contact the appropriate 
person or office to initiate open negotiation, and that if the 30-day 
negotiation period does not result in a determination, generally, the 
provider or facility may initiate the independent dispute resolution 
process within 4 days after the end of the open negotiation period; and 
(4) contact information, including a telephone number and email 
address, for the appropriate person or office to initiate open 
negotiations for purposes of determining an amount of payment 
(including cost sharing) for such item or service. Additionally, upon 
request of the provider or facility, the plan or issuer must provide, 
in a timely manner, the following information: (1) Whether the QPA for 
items and services involved included contracted rates that were not on 
a fee-for-service basis for those specific items and services and 
whether the QPA for those items and services was determined using 
underlying fee schedule rates or a derived amount; (2) if a related 
service code was used to determine the QPA for a new service code, 
information to identify the related service code; (3) if the plan or 
issuer used an eligible database to determine the QPA, information to 
identify which database was used; and (4) if applicable, upon request, 
a statement that the plan's or issuer's contracted rates include risk-
sharing, bonus, or other incentive-based or retrospective payments or 
payment adjustments for covered items and services that were excluded 
for purposes of calculating the QPA.
    The Departments assume that TPAs will provide this information on 
behalf of self-insured plans. In addition, the Departments assume that 
issuers and TPAs will automate the process of preparing and providing 
this information in a format similar to an explanation of benefits as 
part of the system to calculate the QPA. The cost to issuers and TPAs 
of making the changes

[[Page 36934]]

to their IT systems is discussed previously in the RIA.
    The Departments estimate that a total of 1,758 issuers and TPAs 
will incur burden to comply with this provision. Currently, 14 states 
have established some payment standards for services provided by 
nonparticipating providers or nonparticipating emergency facilities. 
Therefore, the Departments assume that issuers and TPAs will 
potentially need to calculate the QPA for two-thirds of the claims 
involving nonparticipating providers or nonparticipating emergency 
facilities.
    In 2018, there were approximately 39,690,940 emergency department 
visits for patients with individual market or group health 
coverage.\183\ The Departments estimate that approximately 18 percent 
of these visits \184\ will include services provided by 
nonparticipating providers or nonparticipating emergency facilities and 
plans and issuers will need to calculate the QPA for two-thirds of such 
claims. Therefore, plans and issuers will be required to provide the 
specified information along with the initial payment or denial notice 
for approximately 4,786,727 claims annually from nonparticipating 
providers or nonparticipating emergency facilities for emergency 
department visits. In addition, in 2018, there were approximately 
4,146,476 emergency department visits that resulted in hospital 
admission for patients with individual market or group health coverage. 
Using this as an estimate of post-stabilization services provided in 
emergency facilities, and assuming that in 16 percent of cases the 
patient is treated at a nonparticipating emergency facility or by a 
nonparticipating provider at a participating facility,\185\ the 
Departments estimate that approximately 663,436 individuals will have 
the potential to be treated by a nonparticipating provider or facility. 
In the absence of data, the Departments assume that in 50 percent of 
cases services will be provided by nonparticipating providers without 
satisfying the notice and consent criteria in these interim final rules 
for reasons such as unforeseen, urgent medical needs and lack of 
participating providers in the facility. The Departments estimate that 
plans and issuers will need to calculate the QPA for two-thirds of such 
claims. Therefore, plans and issuers will be required to provide the 
required information along with the initial payment or denial notice 
for approximately 222,251 claims from nonparticipating providers or 
nonparticipating emergency facilities for post-stabilization services. 
Additionally, based on 2016 data, the Departments estimate that there 
will be 11,107,056 visits to health care facilities annually for 
surgical and non-surgical procedures for individuals with group health 
coverage or individual market coverage.\186\ The Departments assume 
that in 16 percent of cases the patient will have the potential to 
receive care from a nonparticipating provider at a participating 
facility, and that in approximately 5 percent of those cases services 
will be provided by nonparticipating providers without satisfying the 
notice and consent criteria in these interim final rules for reasons 
such as the services being ancillary services or related to unforeseen, 
urgent medical needs, and plans and issuers will need to calculate the 
QPA for two-thirds of such claims. Therefore, plans and issuers will be 
required to provide the required information along with the initial 
payment or denial notice for approximately 59,534 claims annually for 
non-emergency services furnished by a nonparticipating provider at a 
participating health care facility. In total, plans and issuers will be 
required to provide documents related to QPAs along with the initial 
payment or denial of payment for approximately 5,068,512 claims 
annually from nonparticipating providers or facilities.
---------------------------------------------------------------------------

    \183\ Agency for Healthcare Research and Quality, HCUP Fast 
Stats--Trends in Emergency Department Visits. https://www.hcup-us.ahrq.gov/faststats/NationalTrendsEDServlet?measure1=01&characteristic1=14&measure2=&characteristic2=11&expansionInfoState=hide&dataTablesState=hide&definitionsState=hide&exportState=hide.
    \184\ Estimate from Pollitz, K. et al., Surprise Bills Vary by 
Diagnosis and Type of Admission, Peterson-KFF Health System tracker, 
December 9, 2019, https://www.healthsystemtracker.org/brief/surprise-bills-vary-by-diagnosis-and-type-of-admission/.
    \185\ Estimate from Pollitz, K. et al., Surprise Bills Vary by 
Diagnosis and Type of Admission, Peterson-KFF Health System tracker, 
December 9, 2019, https://www.healthsystemtracker.org/brief/surprise-bills-vary-by-diagnosis-and-type-of-admission/.
    \186\ Estimates based on data on postoperative office visits. 
Centers for Disease Control, National Ambulatory Medical Care 
Survey: 2016 National Summary Tables. Available at https://www.cdc.gov/nchs/fastats/physician-visits.htm.
---------------------------------------------------------------------------

    The Departments estimate that for each issuer or TPA it will take a 
medical secretary 10 minutes (at an hourly rate of $37.50) to prepare 
the documentation and attach it to each payment or denial notice or 
explanation of benefits sent to the nonparticipating provider or 
facility. The Departments assume that this information will be sent 
electronically at minimal cost. The total annual burden for all issuers 
and TPAs to provide the QPA information and certification along with 
5,068,512 payments or denial notices, is estimated to be approximately 
844,752 hours, with an associated equivalent cost of approximately 
$31.7 million.
    The Departments assume that for the 5,068,512 QPA information sent 
to nonparticipating providers or nonparticipating emergency facilities, 
50 percent will result in requests to provide additional information 
and plans and issuers will be required to send additional information 
to approximately 2,534,256 providers or facilities. The Departments 
estimate that it will take a medical secretary 15 minutes (at an hourly 
rate of $37.50) to prepare the document and provide it to the provider 
or facility that requested it. The Departments assume that this 
information will be delivered electronically with minimal additional 
cost. The total estimated burden, for all issuers and TPAs, will be 
approximately 633,564 hours annually, with an associated equivalent 
cost of approximately $23.8 million.
    The total annual burden for all issuers and TPAs for providing the 
initial and additional information related to QPA will be 1,478,316 
hours, with an equivalent cost of $55,436,853. As DOL, the Treasury 
Department and HHS share jurisdiction, HHS will account for 50 percent 
of the burden, or approximately 739,158 burden hours with an equivalent 
cost of approximately $27,718,427. The Departments seek comment on 
these burden estimates.

[[Page 36935]]



 Table 5--Annual Burden and Cost for Plans and Issuers To Provide Information Related to QPA to Nonparticipating
                               Providers and Nonparticipating Emergency Facilities
----------------------------------------------------------------------------------------------------------------
                                 Estimated       Estimated      Burden per
                                 number of       number of       response      Total annual     Total estimated
                                respondents      responses        (hours)     burden (hours)         cost
----------------------------------------------------------------------------------------------------------------
Initial information.........             879       2,534,256           0.167         422,376      $15,839,100.93
Additional Information......             879       1,267,128            0.25         316,782       11,879,325.70
                             -----------------------------------------------------------------------------------
    Total...................             879       3,801,384  ..............         739,158       27,718,427.63
----------------------------------------------------------------------------------------------------------------

3. ICRs Regarding Audits of QPA (45 CFR 149.140(f))
    The No Surprises Act provides that rulemaking must establish a 
process under which group health plans and health insurance issuers 
offering group or individual health insurance coverage are audited by 
the applicable Secretary or applicable state authority to ensure that 
such plans and coverage are in compliance with the requirement of 
applying a QPA and that the QPA applied satisfies the definition under 
the No Surprises Act with respect to the year involved.
    These interim final rules include an audit provision establishing 
that the Departments' existing enforcement procedures will apply with 
respect to ensuring that a plan or coverage is in compliance with the 
requirement of determining and applying a QPA consistent with these 
interim final rules.
    HHS has primary enforcement authority over issuers (in a state if 
the Secretary of HHS makes a determination that a state is failing to 
substantially enforce a provision (or provisions) of Part A or D of 
title XXVII of the PHS Act) and non-federal governmental plans, such as 
those sponsored by state and local government employers and expects to 
conduct no more than 9 audits annually. Therefore, this collection is 
exempt from the PRA under 44 U.S.C. 3502(3)(A)(i).
4. ICRs Regarding Disclosure for Self-Insured Plans Opting-In to State 
Law (45 CFR 149.30)
    These interim final rules allow self-insured group health plans, 
including self-insured non-federal governmental plans, to voluntarily 
opt in to state law that provides for a method for determining the 
cost-sharing amount or total amount payable under such a plan, where a 
state has chosen to expand access to such plans, to satisfy their 
obligations under section 9816(a)-(d) of the Code, section 716(a)-(d) 
of ERISA, and section 2799A-1(a)-(d) of the PHS Act. A self-insured 
plan that has chosen to opt-in to a state law must prominently display 
in its plan materials describing the coverage of out-of-network 
services a statement that the plan has opted in to a specified state 
law, identify the relevant state (or states), and include a general 
description of the items and services provided by nonparticipating 
facilities and providers that are covered by the specified state law.
    Based on available data, HHS estimates that approximately 84 self-
insured non-federal governmental plans in New Jersey, Nevada, Virginia 
and Washington \187\ will opt-in and incur the one-time burden and cost 
to include the disclosure in their plan documents in 2022. It is 
estimated that for each plan an administrative assistant will spend 1 
hour (at an hourly rate of $38.86) and a compensation and benefits 
manager will spend 30 minutes (at an hourly rate of $131.88) to prepare 
the disclosure. The estimated total burden for each plan will be 1.5 
hours with an equivalent cost of approximately $105. The estimated 
total annual burden for all 84 plans will be approximately 126 hours 
with an equivalent cost of approximately $8,783. HHS estimates that 
there are approximately 11,956 policyholders in these plans that will 
be provided the disclosure. HHS assumes that only printing and material 
costs are associated with the disclosure requirement, because the 
notice can be incorporated into existing plan documents. HHS estimates 
that the disclosure will require one-half of a page, at a cost of $0.05 
per page for printing and materials, and 34 percent of plan documents 
will be delivered electronically at minimal cost.\188\ Therefore, the 
cost to deliver 66 percent of these disclosures in print is estimated 
to be approximately $197. The total one-time cost for all plans, 
incurred in 2022, is estimated to be approximately $8,981.
---------------------------------------------------------------------------

    \187\ Based on data on self-insured plans that have opted in 
available at: https://www.insurance.wa.gov/self-funded-group-health-plans, https://www.dol.gov/sites/dolgov/files/EBSA/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2019.pdf, 
https://scc.virginia.gov/balancebilling.
    \188\ According to data from the National Telecommunications and 
Information Agency, 34 percent of households in the United States 
accessed health records or health insurance online. https://www.ntia.doc.gov/blog/2020/more-half-american-households-used-internet-health-related-activities-2019-ntia-data-show.

                                Table 6--One-Time Burden and Cost To Provide Disclosure Regarding Opting in to State Law
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Estimated        Estimated        Burden per                                      Total estimated
               Year                   number of        number of         response       Total annual   Total estimated    printing and   Total estimated
                                     respondents       responses         (hours)       burden (hours)     labor cost     materials cost        cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022.............................              84               84              1.5              126           $8,783             $197           $8,981
--------------------------------------------------------------------------------------------------------------------------------------------------------

5. ICRs Regarding Complaints Process for Surprise Medical Bills (45 CFR 
149.150, 45 CFR 149.450)
    The No Surprises Act directs the Departments to establish a process 
to receive complaints regarding violations of the application of the 
QPA requirements by group health plans and health insurance issuers 
offering group or individual health coverage under section 
9816(a)(2)(B)(iv) of the Code, section 716(a)(2)(B)(iv) of ERISA, and 
section 2799A-1(a)(2)(B)(iv) of the PHS Act, and violations by health 
care provider, facilities, and providers of air

[[Page 36936]]

ambulance services of the requirements under sections 2799B-1, 2799B-2, 
2799B-3, and 2799B-5 of the PHS Act. The Departments are of the view 
that the complaints process should extend to all of the balance billing 
requirements and define a complainant as any individual, or their 
authorized representative, who files a complaint, as described and 
defined in these interim final rules. This regulatory action is taken 
as required by the No Surprises Act, which directs the Departments to 
create a process for balance billing complaints regarding plans and 
issuers, and directs HHS to create a process for balance billing 
complaints regarding providers and facilities.
    HHS estimates that there will be, on average, 3,600 balance billing 
complaints against providers, facilities, providers of air ambulance 
services, plans, and issuers submitted annually. HHS estimates that it 
will take each complainant 30 minutes (at an hourly rate of $54.14) 
\189\ to collect all relevant documentation related to the alleged 
violation and to access and complete the provided complaint form, with 
an equivalent cost of approximately $27. The total burden for all 
complainants is estimated to be 1,800 hours, with an equivalent annual 
cost of approximately $97,452. As DOL, the Treasury Department and HHS 
share jurisdiction, HHS will account for 50 percent of the burden, 
approximately 900 burden hours with an equivalent cost of approximately 
$48,726.
---------------------------------------------------------------------------

    \189\ The Departments use the average wage rate for all 
occupations.

                                       Table 7--Annual Burden and Costs for Complaints Related to Surprise Billing
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Estimated        Burden per
                  Estimated number of respondents                       number of         response         Cost per       Total annual   Total estimated
                                                                        responses         (hours)          response      burden (hours)        cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
1,800..............................................................           1,800              0.5           $27.07              900          $48,726
--------------------------------------------------------------------------------------------------------------------------------------------------------

6. ICRs Regarding Notice of Right To Designate a Primary Care Provider 
(45 CFR 149.310(a)(4))
    These interim final rules continue to require that if a group 
health plan or health insurance issuer requires the designation by a 
participant, beneficiary, or enrollee of a primary care provider, the 
plan or issuer must provide a notice informing each participant (in the 
individual market, primary subscriber) of the terms of the plan or 
coverage and their right to designate a primary care provider. For 
group health plans and group health insurance coverage, the notice must 
be included whenever the plan or issuer provides a participant with a 
summary plan description or other similar description of benefits under 
the plan or coverage. For individual health insurance coverage, the 
notice must be included whenever the issuer provides a primary 
subscriber with a policy, certificate, or contract of health insurance. 
These interim final rules continue to include model language to satisfy 
the notice requirements. The No Surprises Act extends the applicability 
of the patient protections for choice of health care professionals to 
grandfathered health plans. The patient protections under section 2719A 
of the PHS Act apply to only non-grandfathered group health plans and 
health insurance issuers offering non-grandfathered group or individual 
health insurance coverage. In contrast, the patient protections under 
the No Surprises Act apply generally to all group health plans and 
group and individual health insurance coverage, including grandfathered 
health plans. Therefore, the requirements regarding patient protections 
for choice of health care professional under these interim final rules 
will newly apply to grandfathered health plans for plan years beginning 
on or after January 1, 2022.
    In order to satisfy the patient protection disclosure requirement, 
state and local government plans and issuers in the individual market 
will need to notify policy holders of their plans' policy in regards to 
designating a primary care physician and for obstetrical or 
gynecological visits and will incur a one-time burden and cost to 
incorporate the notice into plan documents. Non-federal governmental 
plans and individual market plans that are currently not grandfathered 
have already incurred the one-time cost to prepare and incorporate this 
notice in their existing plan documents.
    There are an estimated 90,126 non-federal governmental employers 
offering health plans to employees and 388 health insurance issuers in 
the individual market. HHS estimates that there are approximately 
14,417 grandfathered non-federal government employer-sponsored plans 
and approximately 837,543 grandfathered individual market policies, 
with approximately 6,055 grandfathered non-federal governmental plans 
offering HMO and point-of-service (POS) options.\190\ HHS assumes that 
all individual market issuers offer at least one HMO, exclusive 
provider organization (EPO) or POS options.
---------------------------------------------------------------------------

    \190\ According to 2020 Kaiser/HRET survey of Employer Health 
Benefits, 11 percent of employers offer a health maintenance 
organization (HMO) option and that 31 percent of employers offer a 
point-of-service (POS) option. Available at https://www.kff.org/health-costs/report/2020-employer-health-benefits-survey/.
---------------------------------------------------------------------------

    It is estimated that in 2022, 5,450 grandfathered non-federal 
governmental plans and individual market policies will be subject to 
this notice requirement. While not all HMO, EPO, and POS options 
require the designation of a primary care physician or a prior 
authorization or referral before an OB/GYN visit, HHS is unable to 
estimate this number. Therefore, this estimate should be considered an 
overestimate of the number of affected entities.
    These interim final rules continue to provide model language for 
the notice. It is estimated that each plan or issuer will require a 
compensation and benefits manager (at an hourly rate of $131.88) to 
spend 10 minutes customizing the model notice to fit the plan's 
specifications. Each plan or issuer will also require clerical staff 
(at an hourly rate of $38.86) to spend 5 minutes adding the notice to 
the plan's documents. The estimated total burden for each plan or 
issuer will be 0.25 hours with an equivalent cost of approximately $25. 
In 2022, the estimated total annual burden for all 5,450 plans and 
issuers will be approximately 1,362 hours with an equivalent cost of 
approximately $137,430. There will be no additional burden and cost in 
2023 to prepare the notice, since all plans and issuers will have 
incurred the burden and cost by 2022.
    HHS estimates that there are approximately 1.8 million non-federal 
governmental plan policyholders in grandfathered plans, with an 
estimated

[[Page 36937]]

413,976 policyholders enrolled in grandfathered HMO and POS plans 
options.\191\ In addition, there are an estimated 837,543 policyholders 
with grandfathered individual market plans. It is estimated that 
approximately 75 percent of individual market enrollees are enrolled in 
HMO, EPO, and POS options.\192\ Therefore, an estimated 627,146 
policyholders in the individual market have grandfathered plans with 
HMO, EPO, and POS options. It is estimated that approximately 937,010 
policyholders will remain in grandfathered non-federal government 
employer sponsored and individual market plans with HMO, EPO, and POS 
options in 2022 and will receive the required notice for the first time 
in 2022. HHS assumes that only printing and material costs are 
associated with the disclosure requirement, because the notice can be 
incorporated into existing plan documents. HHS estimates that the 
notice will require one-half of a page, at a cost of $0.05 per page for 
printing and materials, and 34 percent of the notices will be delivered 
electronically at minimal cost.\193\ Therefore, the cost to deliver 66 
percent of these notices in print is estimated to be approximately 
$15,461.\194\
---------------------------------------------------------------------------

    \191\ According to the 2020 Kaiser/HRET Survey of Employer 
Sponsored Health Benefits, 12 percent of covered workers in non-
federal government plans have an HMO option and that 11 percent of 
covered workers have a POS option.
    \192\ Estimate based of data reported in Unified Review Template 
Submissions for 2018 plan. Rate review data available at https://www.cms.gov/CCIIO/Resources/Data-Resources/ratereview.html.
    \193\ According to data from the National Telecommunications and 
Information Agency, 34 percent of households in the United States 
accessed health records or health insurance online. https://www.ntia.doc.gov/blog/2020/more-half-american-households-used-internet-health-related-activities-2019-ntia-data-show.
    \194\ 937,010 notices x 66% = 618,427 notices printed x $0.05 
per page x \1/2\ pages per notice = approximately $15,461.

                            Table 8--One-Time Burden and Cost To Provide Notice of Right To Designate a Primary Care Provider
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Estimated        Estimated        Burden per                                      Total estimated
               Year                   number of        number of         response       Total annual   Total estimated    printing and   Total estimated
                                     respondents       responses         (hours)       burden (hours)     labor cost     materials cost        cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022.............................           5,450            5,450             0.25            1,362         $137,430          $15,461         $152,891
--------------------------------------------------------------------------------------------------------------------------------------------------------

    HHS will revise the burden currently approved under OMB Control 
Number 0938-1094, (Notice of Rescission of Coverage and Disclosure 
Requirements for Patient Protection under the Affordable Care Act, CMS-
10330, expiration: July 31, 2022) to account for this burden.
7. ICRs Regarding Notice and Consent To Waive Balance Billing 
Protections, Retention of Certain Documents, and Notice to Plan or 
Issuer (45 CFR 149.410(b)-(e), 45 CFR 149.420(c)-(i))
    The No Surprises Act and these interim final rules require that a 
plan or issuer providing coverage of emergency services do so without 
the individual or the health care provider having to obtain prior 
authorization and without regard to whether the health care provider 
furnishing the emergency services is a participating provider or a 
participating emergency facility with respect to the services 
(regardless of the department of the hospital in which such items and 
services are furnished). Emergency services include any additional 
items and services that are covered under a plan or coverage after a 
participant, beneficiary, or enrollee is stabilized (referred to as 
post-stabilization services) unless certain notice and consent 
requirements are met. The No Surprises Act and these interim final 
rules further apply surprise billing protections in the case of non-
emergency services furnished by nonparticipating providers during a 
visit by a participant, beneficiary, or enrollee at participating 
health care facilities unless notice and consent as specified in these 
interim final rules have been met. The requirements related to the 
notice and consent, applicable exceptions, and timing are set forth in 
section 2799B-2 of the PHS Act, and implemented at 45 CFR 149.410 and 
45 CFR 149.420 of these interim final rules.
    In order to meet the notice and consent requirements of these 
interim final rules, nonparticipating providers and nonparticipating 
emergency facilities must provide the participant, beneficiary, or 
enrollee with a notice, meet certain timing requirements, and obtain 
consent from the participant, beneficiary, or enrollee as described in 
45 CFR 149.420 and these interim final rules. The provided notice must: 
(1) State the health care provider or facility is a nonparticipating 
provider or facility; (2) include the good faith estimate of what the 
individual may be charged, including any item or service that is 
reasonably expected to be provided in conjunction with such items and 
services; (3) provide information about whether prior authorization or 
other care management limitations may be required; and (4) clearly 
state that consent to receive such items or services is optional and 
that the participant, beneficiary, or enrollee may instead seek care 
from an available participating provider, in which case the 
individual's cost-sharing responsibility would be at the in-network 
level. In cases where post-stabilization services are furnished by a 
nonparticipating provider at a participating emergency facility, the 
notice must also include a list of participating providers at the 
participating emergency facility who are able to furnish the items or 
services involved and inform the individual that they may be referred, 
at their option, to such a participating provider. Additionally, a 
nonparticipating provider or nonparticipating emergency facility must 
provide the participant, beneficiary, or enrollee, or such individual's 
authorized representative, with the notice and consent documents in any 
of the 15 most common languages in the state, or a geographic region 
that reasonably reflects the geographic region served by the applicable 
facility. If the individual's preferred language is not among the 15 
most common languages made available or the individual cannot 
understand the language in which the notice and consent document are 
provided the individual must be provided with a qualified interpreter.
    In addition to providing the required notice and consent, 
nonparticipating emergency facilities, participating health care 
facilities, and nonparticipating providers are obligated to retain 
written notice and consent documents for at least a 7-year period after 
the date on which the item or service in question was furnished. Where 
the notice and consent requirements described in this interim final 
rule have been met, the

[[Page 36938]]

nonparticipating provider, the participating health care facility on 
behalf of the nonparticipating provider, or the nonparticipating 
emergency facility, as applicable, must timely notify the plan or 
issuer, respectively, that the notice and consent criteria have been 
met, and if applicable, provide to the plan or issuer a copy of the 
signed notice and consent documents. In instances where, to the extent 
permitted by these rules, the nonparticipating provider bills the 
participant, beneficiary, or enrollee directly, the provider may 
satisfy the requirement to notify the plan or issuer by including the 
notice and consent documents with the bill to the participant, 
beneficiary, or enrollee. In addition, for items and services furnished 
by a nonparticipating provider at a participating health care facility, 
the provider (or the participating facility on behalf of the provider) 
must timely notify the plan or issuer that the item or service was 
furnished during a visit at a participating health care facility.
    In order to meet the notice and consent requirements of the statute 
and these interim final rules, nonparticipating providers and 
nonparticipating emergency facilities must provide the participant, 
beneficiary, or enrollee with a notice. HHS is specifying in guidance 
mandatory notice and consent forms that will require customization by 
the provider or facility.
    HHS assumes that emergency facilities and health care facilities 
will provide the notice and obtain consent on behalf of 
nonparticipating providers, retain records and notify plans and 
issuers. HHS estimates that a total of 17,467 health care facilities 
and emergency departments (including 475 hospital-affiliated satellite 
and 270 independent freestanding emergency departments) will be subject 
to these requirements. HHS assumes that for hospital-affiliated 
satellite freestanding emergency departments, the notice and consent 
will be developed by the parent hospital. Therefore, the burden to 
develop the notice and consent documents will be incurred by 16,992 
emergency facilities and health care facilities. HHS estimates that for 
each facility it will take a lawyer 1 hour (at an hourly rate of 
$143.18) to read and understand the notice and consent forms and make 
any required and applicable alteration, an administrative assistant 
half an hour (at an hourly rate of $38.86) to make any alterations to 
the provided notice and consent documents and prepare the final 
documentation, a computer programmer 1 hour (at an hourly rate of 
$91.96) to digitize and post on a shared network server or push to 
networked computers fillable versions of the notice and consent 
documents, and a Computer and Information Systems Manager half an hour 
(at an hourly rate of $155.52) to verify accessibility to, and ensure 
functionality of, the notice and consent documents. HHS also estimates 
each facility will incur an additional cost of approximately $1,000 (at 
$500 per document) to contract with an outside firm to translate the 
notice and consent documents into the 15 most common languages in the 
state or a geographic region that reasonably reflects the geographic 
region served by the applicable facility. HHS estimates the one-time 
first-year burden, to be incurred in 2021, to make alterations, prepare 
the final versions, translate and make accessible to the providers 
within the facility the notice and consent documentation, for each 
facility will be approximately 3 hours, with an associated equivalent 
cost of approximately $1,332. For all 16,992 emergency facilities and 
health care facilities, HHS estimates a total one-time first-year 
burden of 50,976 hours, with an associated equivalent cost of 
approximately $22.6 million.
    In order to meet the notice and consent requirements of 45 CFR 
149.420 with respect to post-stabilization services, when emergency 
services are provided by nonparticipating providers or nonparticipating 
emergency facilities, the provider or facility must provide the 
participant, beneficiary, or enrollee with a notice and obtain consent 
to be treated by the nonparticipating emergency facility or 
nonparticipating provider. HHS estimates there are approximately 5,533 
emergency departments (including hospital-affiliated satellite and 
independent freestanding emergency departments) \195\ that could be 
subject to the notice and consent requirements in these interim final 
rules and will incur ongoing annual costs and burdens, beginning in 
2022. In 2018, there were approximately 4,146,476 emergency department 
visits that resulted in hospital admission for patients with individual 
market or group health coverage.\196\ Using this as an estimate of 
post-stabilization services provided in emergency facilities, and 
assuming that in 16 percent of cases the patient is treated at a 
nonparticipating emergency facility or by a nonparticipating provider 
at a participating facility, HHS estimates that approximately 663,436 
individuals will be provided with a notice and consent document for 
post-stabilization services. HHS anticipates that the notice and 
consent will be used infrequently for post-stabilization services, so 
this estimate is an upper bound. HHS estimates it will take a medical 
secretary 2 hours (at an hourly rate of $37.50) to customize the 
required notice and consent documents, generate a list of participating 
providers, provide and explain the documents to the individual (or 
authorized representative), answer questions, and obtain the signed 
consent if the individual agrees, provide the signed documents on paper 
or, as practicable, electronically, as selected by the individual, and 
retain the documentation as required by these interim final rules. The 
total burden for providing the notice and consent documents to 
individuals at all emergency facilities will be 1,326,872 hours with an 
equivalent cost of approximately $49.8 million. HHS assumes that these 
documents will be provided directly to each affected individual (or 
authorized representative) in paper format and will be 4 pages (2 pages 
printed double-sided) on average. Assuming a cost of $0.10 (at $0.05 
per page for printing and material cost) for each notice and consent 
document, the total printing and material costs for all notices will be 
approximately $66,344. The total ongoing cost for all emergency 
facilities will be approximately $49.8 million annually. HHS assumes 
that nonparticipating providers and nonparticipating emergency 
facilities will notify the plan or issuer and provide a copy of the 
signed notice and consent documents along with the claim form 
electronically at minimal cost.
---------------------------------------------------------------------------

    \195\ Emergency Medicine Network, 2018 National Emergency 
Department Inventory--USA. Available at https://www.emnet-usa.org/research/studies/nedi/nedi2018/.
    \196\ Agency for Healthcare Research and Quality, HCUP Fast 
Stats--Trends in Emergency Department Visits. Available at https://www.hcup-us.ahrq.gov/faststats/NationalTrendsEDServlet?measure1=01&characteristic1=14&measure2=&characteristic2=11&expansionInfoState=hide&dataTablesState=hide&definitionsState=hide&exportState=hide.
---------------------------------------------------------------------------

    HHS estimates that each individual that receives notice and consent 
from an emergency facility will require, on average, 45 minutes (at an 
hourly rate of $54.14) to read and understand and sign the required 
notice and consent documents, with a total cost of approximately $41. 
For all 663,436 individuals that could potentially receive the notice 
and consent documents, HHS estimates a total annual burden of 497,577 
hours, with an associated total annual cost of approximately $26.9 
million.
    In order to meet the notice and consent requirements of 45 CFR 
149.420 with respect to non-emergency services

[[Page 36939]]

furnished by a nonparticipating provider at a participating health care 
facility, if an individual schedules an appointment for such items or 
services at least 72 hours before the date of the appointment, the 
provider or facility must provide the notice to the individual, or 
their authorized representative, no later than 72 hours before the date 
of the appointment. If an individual schedules an appointment for such 
items or services within 72 hours of the date of the appointment, the 
provider or facility must provide the notice to the individual, or 
their authorized representative, on the day that the appointment is 
made. In the situation where an individual is provided the notice on 
the same day that the items or services are furnished, providers and 
facilities are required to provide the notice no later than 3 hours 
prior to furnishing items or services to which the notice and consent 
requirements applies.
    HHS estimates there are approximately 16,722 health care facilities 
that will be subject to the notice requirement described in these 
interim final rules and will incur ongoing annual costs and burdens 
beginning in 2022. Based on 2016 data, HHS estimates that there will be 
11,107,056 visits to health care facilities annually for surgical and 
non-surgical procedures for individuals with group health coverage or 
individual market coverage \197\ and that approximately 16 percent of 
those visits will involve a nonparticipating provider.\198\ This 
estimate is a lower bound since it is based on the number of 
postoperative office visits and potentially excludes situations where 
such visits were not needed or such follow-up was conducted at a 
different setting. HHS therefore estimates that approximately 1,777,129 
individuals could potentially face balance billing and will be subject 
to the notice requirements of these interim final rules. With respect 
to non-emergency services furnished by a nonparticipating provider at a 
participating health care facility, HHS estimates it will take a 
medical secretary 1 hour (at an hourly rate of $37.50) to customize the 
required notice, generate a list of participating providers, provide 
the document via email or mail, as selected by the individual, and 
answer any questions. For all health care facilities, HHS estimates a 
total annual ongoing annual burden of approximately 1,777,129 hours, 
with an associated annual cost of approximately $66.6 million. HHS 
estimates that approximately 66 percent of the notices will be mailed 
to individuals (34 percent sent electronically) at a cost of $0.65 (at 
$0.05 per page for printing and material cost and $0.55 postage).\199\ 
Assuming minimal cost for electronic delivery, the total cost of 
printing and mailing the notice and consent documents will be 
approximately $762,388 annually. The total ongoing cost for all health 
care facilities will be approximately $67.4 million annually.
---------------------------------------------------------------------------

    \197\ Estimates based on data on postoperative office visits. 
Centers for Disease Control, National Ambulatory Medical Care 
Survey: 2016 National Summary Tables. Available at https://www.cdc.gov/nchs/fastats/physician-visits.htm.
    \198\ Estimated based on information provided by KFF. Available 
at: https://www.kff.org/health-costs/poll-finding/data-note-public-worries-about-and-experience-with-surprise-medical-bills/.
    \199\ According to data from the National Telecommunications and 
Information Agency, 34 percent of households in the United States 
accessed health records or health insurance online. https://www.ntia.doc.gov/blog/2020/more-half-american-households-used-internet-health-related-activities-2019-ntia-data-show.
---------------------------------------------------------------------------

    HHS estimates that each individual that receives the notice will 
require, on average, 45 minutes (at an hourly rate of $54.14) to read 
and understand the required notice, with a total cost of $41. For all 
1,777,129 individuals that could receive the notice document, HHS 
estimates a total annual burden of 1,332,847 hours, with an associated 
total annual cost of $72.2 million. HHS assumes that nonparticipating 
providers (or the participating facilities on behalf of the providers) 
will notify the plan or issuer and provide a copy of the signed notice 
and consent documents along with the claim from the participating 
facility electronically at minimal cost.
    For all emergency and health care facilities, the total ongoing 
burden will be 3,104,001 hours annually and the total cost, including 
printing and materials cost, will be approximately $117,228,780 
annually starting in 2022. For all consumers, the total annual burden 
to read and understand the notice will be 1,830,424 hours with an 
equivalent cost of $99,099,147 starting in 2022.

                   Table 9--One-Time and Annual Burden and Cost for Emergency Departments and Facilities Related to Notice and Consent
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                               Total
                                                             Estimated       Estimated                         Total         estimated
                          Year                               number of       number of     Total annual      estimated     translating,        Total
                                                            respondents      responses    burden (hours)    labor cost     printing and   estimated cost
                                                                                                                          materials cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021....................................................          16,992          16,992          50,976      $5,646,951     $16,992,000     $22,638,951
2022....................................................          17,467       2,440,565       3,104,001     116,400,048         828,732     117,228,780
2023....................................................          17,467       2,440,565       3,104,001     116,400,048         828,732     117,228,780
                                                                                                                                 183,634
3 Year Average..........................................          17,309       1,632,707       2,086,326      79,482,349       6,216,488      85,698,837
--------------------------------------------------------------------------------------------------------------------------------------------------------


         Table 10--Annual Burden and Cost for Individuals Related to Notice and Consent Starting in 2022
----------------------------------------------------------------------------------------------------------------
 Estimated number of    Estimated number of    Total annual burden   Total estimated labor
     respondents             responses               (hours)                  cost          Total estimated cost
----------------------------------------------------------------------------------------------------------------
        2,440,565              2,440,565              1,830,424            $99,099,147            $99,099,147
----------------------------------------------------------------------------------------------------------------


[[Page 36940]]

8. ICRs Regarding Provider Disclosure on Patient Protections Against 
Balance Billing (45 CFR 149.430)
    Section 2799B-3 of the PHS Act, as added by the No Surprises Act 
and codified at 45 CFR 149.430, requires providers and facilities to 
provide disclosures regarding patient protections against balance 
billing. Specifically, health care providers and facilities (including 
an emergency department of a hospital or independent freestanding 
emergency department) are required to make publicly available, post on 
a public website of the provider or facility, and provide to 
participants, beneficiaries, and enrollees a one-page notice about 
surprise billing protections, which must include information about any 
applicable state requirements, and about how to contact appropriate 
state and federal agencies if the individual believes the provider or 
facility has violated the balance billing rules. The required notice 
must include clear and understandable language that explains the 
requirements and prohibitions relating to the prohibitions on balance 
billing in cases of emergency services and in cases of non-emergency 
services performed by a nonparticipating provider at certain 
participating facilities, explain any other applicable state laws, and 
provide contact information for the appropriate state and federal 
agencies that an individual may contact if they believe the provider or 
facility has violated a requirement described in the notice.
    Health care providers and facilities are required to publicly post 
and make the disclosure publicly available through a public website 
accessible free of charge that is easily accessible, without barriers, 
including via search engines, and that ensures that the information is 
accessible to the general public. HHS assumes that providers and 
facilities will enter into agreements for the facilities to provide the 
disclosure on behalf of the providers and that the required language 
and information will be developed, posted within the facility, and 
posted on a public website by the facility. This will ameliorate the 
burden and cost for the individual provider. Many facilities and 
providers will be able to enter into an agreement at minimal cost if 
they renew their contracts prior to 2022. For each facility whose 
contracts with providers are not due to be renewed before 2022, the 
burden to enter into agreements related to this disclosure will vary 
based on the number of providers that practice within the facility. HHS 
estimates that for each facility, on average, it will take a lawyer 2 
hours (at an hourly rate of $143.18) to draft an agreement and an 
administrative assistant 2 hours (at an hourly rate of $38.86) to 
provide electronic copies to all providers to sign. The total burden 
for all 17,467 facilities will be 69,868 hours with an equivalent cost 
of approximately $6,359,385, to be incurred as one-time costs in 2021. 
HHS is unable to estimate how many providers will incur burden to sign 
the agreement, but anticipates that the burden to sign each agreement 
will be minimal. In future years, this agreement can be included in the 
contract between the facilities and providers at no additional cost.
    HHS estimates a total of 17,467 health care facilities (including 
475 hospital-affiliated satellite and 270 independent freestanding 
emergency departments) will incur burden and costs to comply with this 
provision. HHS assumes that for hospital-affiliated satellite 
freestanding emergency departments, the disclosure will be developed by 
the parent hospital. HHS estimates that for each facility, on average, 
it will take a lawyer 2 hours (at an hourly rate of $143.18) to read 
and understand the provided notice and draft any additional, clear, and 
understandable language as may be needed, an administrative assistant 
30 minutes (at an hourly rate of $38.86) to prepare the final document 
for distribution and make the information publicly available within the 
facility, and a computer programmer 1 hour (at an hourly rate of 
$91.96) to post the information on a separate or existing web page, in 
a searchable manner, and to make the content available in an easily 
downloadable format. The burden will be higher for facilities in states 
with state laws or All-Payer Model Agreements, but lower for facilities 
in states without any state laws. HHS assumes that each facility will 
post a single page document in at least two prominent locations, such 
as where individuals schedule care, check-in for appointments, or pay 
bills, and estimates that each facility will incur a printing cost of 
$0.10 (at $0.05 per page for printing and materials) in order to post 
the required disclosure information prominently at each health care 
facility. HHS anticipates that hospitals will post 6 notices on 
average, and incur an additional cost of $0.20 each. In addition, HHS 
assumes that each of the 475 hospital-affiliated satellite freestanding 
emergency departments will post two notices on average and incur a cost 
of $0.10 each. HHS estimates the one-time burden, to be incurred in 
2021, to develop, prepare, and post the required disclosure 
information, for each facility will be approximately 3.5 hours, with an 
associated equivalent cost of approximately $398. For all facilities, 
HHS estimates a total one-time burden of 59,472 hours, with an 
associated cost of approximately $6.8 million, including materials and 
printing costs. HHS recognizes that there are some small providers and 
facilities that do not maintain or provide a publicly available 
website. Such entities are not required to make a disclosure on a 
public website. Therefore, HHS considers the estimate to be a high-end 
estimate.
    HHS encourages states to develop language to assist providers and 
facilities in fulfilling this disclosure requirement. There are 
currently 33 states that have enacted laws to provide some protection 
to consumers for surprise billing. Some or all of these states may 
choose to develop model language. HHS assumes that it will take a 
lawyer 2 hours (at an hourly rate of $143.18) and an administrative 
assistant 1 hour (at an hourly rate of $38.86) to develop and amend the 
model language. The total one-time burden, to be incurred in 2021, for 
each state will be 3 hours with an equivalent cost of approximately 
$325. For all 33 states, HHS estimates the total one-time burden will 
be 99 hours with an equivalent cost of approximately $10,732.
    In addition to requiring providers and facilities to publicly post 
and make the required disclosure publicly available through a public 
website, providers and facilities are required to provide individuals 
the required disclosure information in a one-page notice. The required 
notice must be provided in-person, through the mail or via email, as 
selected by the participant, beneficiary, or enrollee no later than the 
date on which the health care provider or health care facility requests 
payment from the individual (including requests for copayment made at 
the time of a visit to the provider or facility), or with respect to 
individual from whom the health care facility or health care provider 
does not request payment, no later than the date on which the health 
care provider or health care facility submits a claim to the group 
health plan or health insurance issuer. HHS assumes that, in order to 
reduce burden and costs, facilities will choose to provide the required 
disclosure to the individual (or their selected representative) at the 
time the individual is processed for any visit, upon check-in, or when 
other standard disclosures are shared with individuals with minimal 
additional burden. HHS estimates that there will be approximately 
39,690,940 emergency

[[Page 36941]]

department visits \200\ and 11,107,056 visits to health care facilities 
annually for surgical and non-surgical procedures \201\ for individuals 
with group health coverage or individual market coverage. This is a 
lower bound for the number of patients who will receive the disclosure 
since HHS lacks comprehensive data on patients who receive services on 
all health care facilities. In order to provide the required disclosure 
to individuals each facility will incur a cost of approximately $0.05 
for printing and materials for each disclosure. HHS assumes that this 
disclosure will be provided along with other forms and notices usually 
provided to individuals without incurring significant labor cost. For 
all facilities, HHS estimates a total annual ongoing annual cost of 
$2.5 million, starting in 2022. HHS recognizes that the number of 
notices provided by each facility will vary depending on the number of 
annual visits and that some facilities could incur higher costs to 
provide the disclosure while others could incur lower costs. HHS 
assumes that all disclosures will be provided in-person; however, HHS 
acknowledges that some individuals will choose to have this notice 
provided to them via email, at a minimal cost to the facility, and 
others may choose to receive the disclosure via mail, in which case the 
facility will incur additional postage costs.
---------------------------------------------------------------------------

    \200\ Agency for Healthcare Research and Quality, HCUP Fast 
Stats--Trends in Emergency Department Visits.
    \201\ Estimates based on data on postoperative office visits. 
Centers for Disease Control, National Ambulatory Medical Care 
Survey: 2016 National Summary Tables. Available at https://www.cdc.gov/nchs/fastats/physician-visits.htm.
    \201\ Estimated based on information provided by KFF. Available 
at: https://www.kff.org/health-costs/poll-finding/data-note-public-worries-about-and-experience-with-surprise-medical-bills/.
---------------------------------------------------------------------------

    HHS seeks comment on these burden estimates. Specifically, HHS 
seeks comment on the costs and burdens associated with posting the 
required information on a public website. HHS also seeks comment on the 
number of facilities that will be affected by these requirements and 
the number of individuals that would be required to receive the 
required notice.

                               Table 11--One-Time Burden and Costs Related to Agreements Between Facilities and Providers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Estimated        Estimated        Burden per
                       Year                            number of        number of         response         Cost per       Total annual   Total estimated
                                                      respondents       responses         (hours)          response      burden (hours)        cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021..............................................          17,467           17,467                4          $364.08           69,868       $6,359,385
--------------------------------------------------------------------------------------------------------------------------------------------------------


            Table 12--One-Time and Annual Burden and Cost for Facilities To Provide Disclosure on Patient Protections Against Balance Billing
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                               Total
                                                             Estimated       Estimated     Total annual        Total         estimated         Total
                          Year                               number of       number of    burden (hours)     estimated     printing and   estimated cost
                                                            respondents      responses                      labor cost    materials cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021....................................................          17,467          17,467          59,472      $6,758,568          $2,965      $6,761,533
2022....................................................          17,467      50,797,996               0               0       2,539,900       2,539,900
2023....................................................          17,467      50,797,996               0               0       2,539,900       2,539,900
3 Year Average..........................................          17,467      33,871,153          19,824       2,252,856       1,694,255       3,947,111
--------------------------------------------------------------------------------------------------------------------------------------------------------


   Table 13--One-Time Burden and Cost for States To Develop State Specific Language for Facilities To Provide
                            Disclosure on Patient Protections Against Balance Billing
----------------------------------------------------------------------------------------------------------------
                                                 Estimated        Estimated
                    Year                         number of        number of       Total annual   Total estimated
                                                respondents       responses      burden (hours)     labor cost
----------------------------------------------------------------------------------------------------------------
2021........................................              33               33               99       $10,732.26
----------------------------------------------------------------------------------------------------------------

9. ICRs Regarding Plan and Issuer Disclosure on Patient Protections 
Against Balance Billing
    Section 9820(c) of the Code, section 720(c) of ERISA, and section 
2799A-5(c) of the PHS Act require plans and issuers to make publicly 
available, post on a public website of the plan or issuer, and include 
on each explanation of benefits for an item or service with respect to 
which the requirements under section 9816 of the Code, section 716 of 
ERISA, and section 2799A-1 of the PHS Act apply, information in plain 
language on the provisions in these sections, and sections 2799B-1 and 
2799B-2 of the PHS Act, and other applicable state laws on out-of-
network balance billing, and information on contacting appropriate 
state and federal agencies in the case that an individual believes that 
such a provider or facility has violated the prohibition against 
balance billing.
    The Departments assume that plans and issuers will use the model 
notice developed by HHS, and that TPAs will develop the notice for 
self-insured plans. The Departments estimate that on average for each 
plan or issuer it will take a lawyer 2 hours (at an hourly rate of 
$143.18) to read and understand the provided notice and draft any 
additional, clear, and understandable language as may be needed, an 
administrative assistant 30 minutes (at an hourly rate of $38.86) to 
prepare the final document for distribution and make the information 
publicly available within the facility, and a computer programmer 1 
hour (at an hourly rate of $91.96) to post the information on a 
separate or existing web page, in a searchable manner, and to make the 
content available in an easily

[[Page 36942]]

downloadable format. The total burden for an individual plan or issuer 
will be 3.5 hours with an equivalent cost of approximately $398. The 
burden will be higher for issuers and TPAs in states with applicable 
state laws or All-Payer Model Agreements, but lower for issuers and 
TPAs in states without any applicable state laws. The Departments 
estimate that there are 1,553 issuers and 205 TPAs. The total burden 
for all issuers and TPAs will be 6,153 hours with an equivalent cost of 
$699,245, to be incurred as a one-time cost in 2021. As DOL, the 
Treasury Department, and HHS share jurisdiction, HHS will account for 
50 percent of the burden, or approximately 3,077 hours with an 
equivalent cost of approximately $349,622.
    The Departments assume that plans and issuers will also include the 
disclosure along with the explanation of benefits at no additional 
cost. Under the same assumptions used to estimate the number of 
disclosures provided by nonparticipating facilities and 
nonparticipating providers, the Departments estimate that issuers and 
TPAs will include the disclosure to approximately 39,690,940 
individuals who receive services at emergency facilities and 11,107,056 
individuals who received non-emergency services at health care 
facilities, for a total of 50,797,996 disclosures. The Departments 
assume that 66 percent of these notices will be provided by mail and 
the cost of printing is $0.05 per page.\202\ Therefore, the total 
printing and materials cost for sending 33,526,677 notices by mail will 
be $1,676,334 annually, starting in 2022. The Departments assume that 
for the disclosures sent by mail, it will take an administrative 
assistant 1 minute (at an hourly rate of $38.86) to print and enclose 
the notice with the explanation of benefits. The disclosures sent 
electronically can be sent at minimal cost. The total burden for all 
issuers and TPAs is estimated to be 558,778 hours with an equivalent 
cost of $21,714,111. There will be no additional mailing costs, since 
the disclosure will be enclosed with the explanation of benefits. The 
total annual cost to all issuers and TPAs for sending the notices is 
estimated to be approximately $23,390,445 starting in 2022. As DOL, the 
Treasury Department and HHS share jurisdiction, HHS will account for 50 
percent of the burden, or approximately 279,389 hours, with an 
equivalent cost of $10,857,056, and printing and materials cost of 
$838,167, for a total annual cost of $11,695,223 starting in 2022.
---------------------------------------------------------------------------

    \202\ According to data from the National Telecommunications and 
Information Agency, 34 percent of households in the United States 
accessed health records or health insurance online. https://www.ntia.doc.gov/blog/2020/more-half-american-households-used-internet-health-related-activities-2019-ntia-data-show.

        Table 14--One-Time and Annual Burden and Cost for Plans and Issuers To Provide Disclosure on Patient Protections Against Balance Billing
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                               Total
                                                             Estimated       Estimated     Total annual        Total         estimated         Total
                          Year                               number of       number of    burden (hours)     estimated     printing and   estimated cost
                                                            respondents      responses                      labor cost    materials cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021....................................................             879             879           3,077        $349,622               0        $349,622
2022....................................................             879      25,398,998         279,389      10,857,056         838,167      11,695,223
2023....................................................             879      25,398,998         279,389      10,857,056         838,167      11,695,223
3 year Average..........................................             879      16,932,958         187,285       7,354,578         558,778       7,913,356
--------------------------------------------------------------------------------------------------------------------------------------------------------

10. Summary of Annual Burden Estimates for Information Collection 
Requirements

                                                                    Table 15--Annual Recordkeeping and Reporting Requirements
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                    Burden      Total       Hourly                     Printing
                                                                                                                     per        annual      labor      Total labor       and
              Regulation section                         OMB control No.            Respondents      Responses     response     burden     cost of       cost of      materials     Total cost
                                                                                                                   (hours)     (hours)    reporting     reporting        cost
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
45 CFR 149.140(d).............................  0938-NEW........................             879       3,801,384       0.19      739,158     $37.50     $27,718,427            0     $27,718,427
45 CFR 149.30.................................  0938-NEW........................              84              84       1.50          126      69.87           8,783          197           8,981
45 CFR 149.150, 149.450.......................  0938-NEW........................           1,800           1,800        0.5          900      54.14          48,726            0          48,726
45 CFR 149.310(a)(4)..........................  0938-1094.......................           5,450           5,450       0.25         1362     100.87         137,430       15,461         152,891
45 CFR 149.410(b)--(e), 149.420(c)-(i)--        0938-NEW........................          17,309       1,632,707       1.28    2,086,326      38.10      79,482,349    6,216,488      85,698,837
 Facilities and Providers.
45 CFR 149.410(b)-(e), 149.420(c)--(i) -        0938-NEW........................       2,440,565       2,440,565       0.75    1,830,424      54.14      99,099,147            0      99,099,147
 Consumers.
45 CFR 149.430--Facilities and Providers......  0938-NEW........................          17,467      33,871,153      * 3.5       19,824   * 113.67       2,252,856    1,694,255       3,947,111
45 CFR 149.430--Facility and Provider           0938-NEW........................          17,467          17,467          4       69,868      91.02       6,359,385            0       6,359,385
 agreements.
45 CFR 149.430--States........................  0938-NEW........................              33              33          3           99     108.41          10,732            0          10,732
Section 2799A-5(c) of the PHS Act.............  0938-NEW........................             879      16,932,958       0.01      187,285      39.27       7,354,578      558,778       7,913,356
                                                                                 ---------------------------------------------------------------------------------------------------------------
    Total.....................................  ................................       2,501,933      58,703,602  .........    4,935,372  .........     222,472,414    8,485,179     230,957,592
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Estimate based on burden incurred in first year only.


[[Page 36943]]

11. Submission of PRA-Related Comments
    HHS has submitted a copy of this final rule to OMB for its review 
of the rule's information collection requirements. The requirements are 
not effective until they have been approved by OMB.
    To obtain copies of the supporting statement and any related forms 
for the collections discussed in this rule (CMS-9909-IFC), please visit 
the CMS website at www.cms.hhs.gov/PaperworkReductionActof1995, or call 
the Reports Clearance Office at 410-786-1326.

E. Paperwork Reduction Act--Department of Labor and Department of the 
Treasury

    As part of the continuing effort to reduce paperwork and respondent 
burden, the Departments conduct a preclearance consultation program to 
provide the general public and federal agencies with an opportunity to 
comment on proposed and continuing collections of information in 
accordance with the PRA. This helps to ensure that the public 
understands the Departments' collection instructions, respondents can 
provide the requested data in the desired format, reporting burden 
(time and financial resources) is minimized, collection instruments are 
clearly understood, and the Departments can properly assess the impact 
of collection requirements on respondents.
    Under the PRA, an agency may not conduct or sponsor, and an 
individual is not required to respond to, a collection of information 
unless it displays a valid OMB control number.
    The information collections are summarized as follows:
1. ICRs Regarding Notice of Right To Designate a Primary Care Provider 
(26 CFR 54.9822-1T, 29 CFR 2590.722)
    These interim final rules require that if a group health plan or 
health insurance issuer requires the designation by a participant, 
beneficiary, or enrollee of a primary care provider, the plan or issuer 
must provide a notice informing each participant (in the individual 
market, primary subscriber) of the terms of the plan or coverage and 
their right to designate a primary care provider. For group health 
plans and group health insurance coverage, the notice must be included 
whenever the plan or issuer provides a participant with a summary plan 
description or other similar description of benefits under the plan or 
coverage. For individual health insurance coverage, the notice must be 
included whenever the issuer provides a primary subscriber with a 
policy, certificate, or contract of health insurance. These interim 
final rules include model language to satisfy the notice requirements. 
The No Surprises Act extends the applicability of the patient 
protections for choice of health care professionals. The patient 
protections under section 2719A of the PHS Act apply to only non-
grandfathered group health plans and health insurance issuers offering 
non-grandfathered group or individual health insurance coverage. In 
contrast, the patient protections under the No Surprises Act apply 
generally to all group health plans and group and individual health 
insurance coverage, including grandfathered health plans. Therefore, 
the requirements regarding patient protections for choice of health 
care professional under these interim final rules will newly apply to 
grandfathered health plans for plan years beginning on or after January 
1, 2022.
    DOL estimates that there are 2.5 million ERISA-covered plans. Data 
obtained from the 2020 Kaiser/HRET Survey of Employer Sponsored Health 
Benefits finds that 16 percent of firms offering health benefits offer 
at least one grandfathered health plan. DOL estimates that five percent 
of plans will relinquish their grandfathered status in 2021. The data 
from the 2020 Kaiser/HRET Survey of Employer Sponsored Health Benefits 
also finds that 11 percent of plans have an HMO option and that 31 
percent of plans offer a POS option. Thus, DOL estimates that in 2022, 
161,148 grandfathered plans will be subject to this notice 
requirement.\203\
---------------------------------------------------------------------------

    \203\ 2.5 million ERISA-covered plans x 16% grandfathered plans 
x (100% minus 5% newly non-grandfathered plans) x (11% HMOs + 31% 
POSs) = 161,148 affected plans.
---------------------------------------------------------------------------

    While not all HMO and POS options require the designation of a 
primary care physician or a prior authorization or referral before an 
OB/GYN visit, DOL is unable to estimate this number. Therefore, these 
estimates should be considered an overestimate of the number of 
affected entities.
    Each of the plans will require a compensation and benefits manager 
to spend 10 minutes individualizing the model notice to fit the plan's 
specifications at an hourly rate of $134.21.\204\ In 2022, this results 
in 26,858 hours of burden at an equivalent cost of $3,604,602.
---------------------------------------------------------------------------

    \204\ For more information on how the Department estimates labor 
costs see: https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/rules-and-regulations/technical-appendices/labor-cost-inputs-used-in-ebsa-opr-ria-and-pra-burden-calculations-june-2019.pdf.
---------------------------------------------------------------------------

    Each plan will also require clerical staff to spend 5 minutes 
adding the notice to the plan's documents at an hourly rate of $55.14. 
In 2022, this results in 13,429 hours of burden at an equivalent cost 
of $740,473.
    Thus, the total hour burden associated with this ICR is 40,287 
hours at an equivalent cost of $4,345,075. DOL shares this burden 
equally with the Department of the Treasury. Therefore, the total hour 
burden for DOL and the Treasury Department is each approximately 20,143 
hours at an equivalent cost of $2,172,537.
    The Departments assume that only printing and material costs are 
associated with the disclosure requirement, because the final 
regulations provide model language that can be incorporated into 
existing plan documents, such as an SPD. The Departments estimate that 
the notice will require one-half of a page, five cents per page 
printing and material cost will be incurred, and 58.2 percent of the 
notices will be delivered electronically.\205\
---------------------------------------------------------------------------

    \205\ According to data from the National Telecommunications and 
Information Agency (NTIA), 40.0 percent of individuals age 25 and 
over have access to the internet at work. According to a Greenwald & 
Associates survey, 84 percent of plan participants find it 
acceptable to make electronic delivery the default option, which is 
used as the proxy for the number of participants who will not opt-
out of electronic disclosure that are automatically enrolled (for a 
total of 33.6 percent receiving electronic disclosure at work). 
Additionally, the NTIA reports that 40.4 percent of individuals age 
25 and over have access to the internet outside of work. According 
to a Pew Research Center survey, 61.0 percent of internet users use 
online banking, which is used as the proxy for the number of 
internet users who will affirmatively consent to receiving 
electronic disclosures (for a total of 24.7 percent receiving 
electronic disclosure outside of work). Combining the 33.6 percent 
who receive electronic disclosure at work with the 24.7 percent who 
receive electronic disclosure outside of work produces a total of 
58.2 percent who will receive electronic disclosure overall.
---------------------------------------------------------------------------

    DOL estimates that there are 62.6 million ERISA-covered 
policyholders. Data obtained from the 2020 Kaiser/HRET Survey of 
Employer Sponsored Health Benefits finds that 14 percent of covered 
workers are enrolled in a grandfathered plan. DOL estimates that 5 
percent of plans would relinquish their grandfathered status annually 
in 2021. The data from the 2020 Kaiser/HRET Survey of Employer 
Sponsored Health Benefits also finds that 13 percent of covered workers 
have an HMO option and that 8 percent of covered workers have a POS 
option. DOL estimates that plans will produce

[[Page 36944]]

730,346 notices in 2022.\206\ This results in a cost burden of 
approximately $18,259 in 2022.\207\ DOL shares this burden equally with 
the Department of the Treasury. Therefore, the total cost burden for 
DOL is approximately $9,129 and the total cost burden for the Treasury 
Department is $9,129. The summary of burden for this information 
collection has also been provided below.
---------------------------------------------------------------------------

    \206\ 2022: 62.6 million ERISA-covered policyholders x 14% of 
covered employees in grandfathered plans x (100% minus 5% newly non-
grandfathered plans) x (13% in HMOs + 8% in POSs) * 41.8% = 730,346 
notices.
    \207\ 2022: $0.05 per page * 1/2 pages per notice * 730,346 
notices = $18,259.
---------------------------------------------------------------------------

Summary of Burden
    Type of Review: Revised Collection.
    Agency: DOL-EBSA, Treasury-IRS.
    Title: Affordable Care Act Patient Protection Notice.
    OMB Numbers: 1210-0142, 1545-2181.
    Affected Public: Businesses or other for-profits, Not-for-profit 
institutions.
    Total Respondents: 161,148.
    Total Responses: 730,346.
    Frequency of Response: Occasionally.
    Estimated Total Annual Burden Hours: 40,287 (DOL--20,143; 
Treasury--20,143).
    Estimated Total Annual Burden Cost: $18,259 (DOL--$9,129; 
Treasury-- $9,129).
2. ICRs Regarding Information To Be Shared About QPA (26 CFR 54.9816-
6T(d), 29 CFR 2590.716-6(d))
    These interim final rules require plans and issuers to provide 
certain information to nonparticipating providers or nonparticipating 
emergency facilities in cases in which the recognized amount with 
respect to an item or service furnished by a nonparticipating provider 
or nonparticipating emergency facility is the QPA. Specifically, plans 
and issuers must provide the following information to providers 
(including air ambulance providers) and facilities, when making an 
initial payment or notice of denial of payment: (i) The QPA for each 
item or service involved; and (ii) a statement certifying that the plan 
or issuer has determined that the QPA applies for the purposes of the 
recognized amount (or, in the case of air ambulance services, for 
calculating the participant's, beneficiary's, or enrollee's cost 
sharing), and that each QPA was determined in compliance with 26 CFR 
54.9816-6T(d), 29 CFR 2590.716-6, or 45 CFR 149.140, as applicable. 
Additionally, upon request of the provider or facility, the plan or 
issuer must provide in a timely manner the following information: (i) 
Whether the QPA for items and services involved included contracted 
rates that were not on a fee-for-service basis for those specific items 
and services and whether the QPA for those items and services was 
determined using underlying fee schedule rates or a derived amount; 
(ii) if applicable, information to identify which database was used to 
determine the QPA; and (iii) if applicable, a statement that the plan's 
or issuer's contracted rates include risk-sharing, bonus, or incentive 
based payments for covered items and services (as applicable) that were 
excluded for purposes of calculating the QPA.
    As discussed earlier in HHS' PRA section, the total annual burden 
for all issuers and TPAs for providing the initial and additional 
information related to QPA will be 1,478,316 hours, with an equivalent 
cost of $55,436,853. As HHS, DOL, and the Treasury Department share 
jurisdiction, it is estimated that 50 percent of the burden will be 
accounted for by the HHS, 25 percent of the burden will be accounted 
for by the Treasury Department, and the remaining 25 percent will be 
accounted for by DOL. Thus, HHS will account for approximately 739,158 
burden hours with an equivalent cost of approximately $27,718,427. DOL 
and the Treasury Department will each account for 369,579 burden hours 
with an equivalent cost of approximately $13,859,214.
3. ICRs Regarding Complaints Process for Surprise Medical Bills (26 CFR 
54.9816-7T, 29 CFR 2590.716-7)
    The No Surprises Act directs the Departments to establish a process 
to receive complaints regarding violations of the application of the 
QPA by group health plans and health insurance issuers offering group 
or individual health coverage, and violations by health care providers, 
facilities, and providers of air ambulance services of the requirements 
under sections 2799B-2 and 2799B-3 of the PHS Act. The Departments 
define a complainant as any individual, or their authorized 
representative, who files a complaint, as described and defined in 
these interim final rules. This regulatory action is taken as required 
by the No Surprises Act, which directs the Departments to create a 
process for balance billing complaints regarding plans and issuers, and 
directs HHS to create a process for balance billing complaints 
regarding providers and facilities.
    As discussed earlier in HHS' PRA section, the total burden for all 
complainants is estimated to be 1,800 hours, with an equivalent annual 
cost of approximately $97,452. As HHS, DOL, and the Treasury Department 
share jurisdiction, it is estimated that 50 percent of the burden will 
be accounted for by the HHS, 25 percent of the burden will be accounted 
for by the Treasury Department, and the remaining 25 percent will be 
accounted for by DOL. HHS will account for approximately 900 burden 
hours with an equivalent cost of approximately $48,726. DOL and the 
Treasury Department will each account for approximately 450 burden 
hours with an equivalent cost of approximately $24,363.
4. ICRs Regarding Opt-In State Balance Bill Process (26 CFR 54.9816-3T, 
29 CFR 2590.716-3)
    The interim final rules allow plans to voluntarily opt in to state 
law that provides for a method for determining the cost-sharing amount 
or total amount payable under such a plan, where a state has chosen to 
expand access to such plans, to satisfy their obligations under section 
9816(a)-(d) of the Code, section 716(a)-(d) of ERISA, and section 
2799A-1(a)-(d) of the PHS Act. A plan that has chosen to opt into a 
state law must prominently display in its plan materials describing the 
coverage of out-of-network services a statement that the plan has opted 
into a specified state law, identify the state (or states), and include 
a general description of the items and services provided by 
nonparticipating facilities and providers that are covered by the 
specified state law.
    Currently, there are four states that allow self-insured plans to 
opt in: Nevada, New Jersey, Washington, and Virginia. According to the 
Nevada Department of Health and Human Services' 2020 Annual Report, 20 
private entities or organizations have elected to participate in the 
state's balance billing law. In addition, according to the Virginia 
State Corporation Commission, 231 private self-insured plans in 
Virginia have elected to participate in the state's balance billing 
law.\208\ Furthermore, according to Washington's Office of the 
Insurance Commissioner, 309 private self-insured plans in Washington 
have elected to participate in the state's balance billing law.\209\ 
DOL does not have data on the number of self-insured plans that have 
opted into New Jersey's

[[Page 36945]]

balance billing law. In order to estimate the number of self-insured 
plans that have opted into the balance billing law for New Jersey, DOL 
has scaled Washington's estimate by the number of participants with 
self-insured ERISA-covered plans.\210\ According to the 2019 Health 
Insurance Coverage Bulletin, there are respectively, 0.7 million, 2.1 
million, and 2.7 million with self-insured ERISA-covered plans in 
Nevada, Virginia, and New Jersey. Additionally, according to the 
Washington's Office of Insurance Commissioner, about 0.5 million self-
insured participants have opted into Washington's balance billing 
law.\211\ This results in a total of 6 million participants.\212\ Thus, 
DOL estimates that 20, 231, 309, and 57 private self-insured plans will 
opt in respectively in Nevada, Virginia, Washington, and New Jersey, 
resulting in a total of 617 self-insured plans.\213\ These plans will 
incur the one-time burden and cost to include the disclosure in their 
plan documents in 2022.
---------------------------------------------------------------------------

    \208\ Virginia State Corporation Commission. https://scc.virginia.gov/balancebilling#.
    \209\ Washington's Office of Insurance Commissioner. ``Self-
Funded Group Health Plans Participating in the Balance Billing 
Protection Act.'' https://www.insurance.wa.gov/self-funded-group-health-plans.
    \210\ Nevada Department of Health and Human Services' Office of 
Consumer Health Assistance. ``Payment for Medically Necessary 
Emergency Services Provided Out-of-Network 2020 Annual Report.'' 
(2020). https://dhhs.nv.gov/uploadedFiles/dhhsnvgov/content/Programs/CHA/AB469%20LCB%20Annual%20Report%202020.pdf.
    \211\ Washington's Office of Insurance Commissioner. ``Self-
Funded Group Health Plans Participating in the Balance Billing 
Protection Act.'' https://www.insurance.wa.gov/self-funded-group-health-plans.
    \212\ Employee Benefits Security Administration. ``Health 
Insurance Coverage Bulletin: Abstract of Auxiliary Data for the 
March 2019 Annual Social and Economic Supplement to the Current 
Population Survey.'' (2019). https://www.dol.gov/sites/dolgov/files/EBSA/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2019.pdf.
    \213\ New Jersey: 335 x (0.5/2.7) = 62 self-insured plans; 62 
self-insured plans--5 non-federal self-insured plans = 57 private 
self-insured plans.
---------------------------------------------------------------------------

    DOL estimates that it will take 1 hour for an administrative 
assistant, with a wage rate of $55.14, to gather information and review 
information.\214\ This results in hour burden of 617 hours, with an 
equivalent cost of $34,023. DOL estimates that it will take 30 minutes 
for a benefits manager, with a wage rate of $134.21, to gather 
information and review information.\215\ This results in hour burden of 
309 hours, with an equivalent cost of $41,406. In 2022, the total hour 
burden is 926 hours, with an equivalent cost of $75,430.
---------------------------------------------------------------------------

    \214\ For more information on how the Department estimates labor 
costs see: https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/rules-and-regulations/technical-appendices/labor-cost-inputs-used-in-ebsa-opr-ria-and-pra-burden-calculations-june-2019.pdf.
    \215\ For more information on how the Department estimates labor 
costs see: https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/rules-and-regulations/technical-appendices/labor-cost-inputs-used-in-ebsa-opr-ria-and-pra-burden-calculations-june-2019.pdf.
---------------------------------------------------------------------------

    The average number of participants in a self-insured ERISA-covered 
plan that will opt into the four states' balance billing laws is 
9,724.\216\ DOL assumes that only printing and material costs are 
associated with the disclosure requirement, because the notice can be 
incorporated into existing plan documents. DOL estimates that the 
disclosure will require one-half of a page, at a cost of $0.05 per page 
for printing and materials, and 34 percent of plan documents will be 
delivered electronically at minimal cost.\217\ Thus, in 2022, the cost 
to deliver 66 percent of these disclosures in print is estimated to be 
approximately $321.\218\
---------------------------------------------------------------------------

    \216\ (6,000,000 participants with self-insured ERISA-covered 
plans) / 617 self-insured ERISA-covered plans = 9,724 participants 
per self-insured ERISA-covered plan.
    \217\ According to data from the National Telecommunications and 
Information Agency, 34 percent of households in the United States 
accessed health records or health insurance online. https://www.ntia.doc.gov/blog/2020/more-half-american-households-used-internet-health-related-activities-2019-ntia-data-show.
    \218\ 9,724 participants x 0.66 x $0.05 = $321.
---------------------------------------------------------------------------

    Thus, the 3-year average hour burden is 309 hours, with an 
equivalent cost of $25,143. The 3-year average cost burden is $107.
5. ICRs Regarding Plan and Issuer Disclosure on Patient Protections 
Against Balance Billing
    Section 9820(c) of the Code, section 720(c) of ERISA, and section 
2799A-5(c) of the PHS Act require plans and issuers to make publicly 
available, post on a public website of the plan or issuer, and include 
on each explanation of benefits for an item or service with respect to 
which the requirements under section 9816 of the Code, section 716 of 
ERISA, and section 2799A-1 of the PHS Act apply, information in plain 
language on the provisions in these sections, and sections 2799B-1 and 
2799B-2 of the PHS Act, and other applicable state laws on out-of-
network balance billing, and information on contacting appropriate 
state and federal agencies in the case that an individual believes that 
such a provider or facility has violated the prohibition against 
balance billing.
    As discussed earlier in HHS' PRA section, the total burden for all 
issuers and TPAs will be 6,153 hours with an equivalent cost of 
$699,245 in 2021. As HHS, DOL, and the Treasury Department share 
jurisdiction, it is estimated that 50 percent of the burden will be 
accounted for by the HHS, 25 percent of the burden will be accounted 
for by the Treasury Department, and the remaining 25 percent will be 
accounted for by DOL. HHS will account for approximately 3,077 hours 
with an equivalent cost of approximately $349,622. DOL and the Treasury 
Department will each account for approximately 1,539 hours with an 
equivalent cost of approximately $174,811.
    Starting in 2022, the total burden for all issuers and TPAs is 
estimated to be 558,778 hours with an equivalent cost of $21,714,111. 
The total printing and materials cost for sending 33,526,677 notices by 
mail will be $1,676,334 annually. As HHS, DOL, and the Treasury 
Department share jurisdiction, it is estimated that 50 percent of the 
burden will be accounted for by the HHS, 25 percent of the burden will 
be accounted for by the Treasury Department, and the remaining 25 
percent will be accounted for by DOL. Thus, HHS will account for 
279,389 hours, with an equivalent cost of $10,857,056, and printing and 
materials cost of $838,167 starting in 2022. DOL and the Treasury 
Department will each account for 139,695 hours with an equivalent cost 
of $419,084.
    Thus, the 3-year average hour burden associated with this 
requirement for DOL and the Treasury Department is 93,643 hours each 
with an equivalent cost of $7,354,578. The 3-year average cost burden 
for DOL and Treasury is $279,389 each.
    The summary of burden below encompasses the following ICRs: (1) 
Information to be Shared about the QPA (26 CFR 54.9816-6T(d), 29 CFR 
2590.716-6(d)), (2) Complaints Process for Surprise Medical Bills (26 
CFR 54.9816-7T, 29 CFR 2590.716-7), (3) Opt-In State Balance Bill 
Process (26 CFR 54.9816-3T, 29 CFR 2590.716-3), and (4) Plan and Issuer 
Disclosure on Patient Protections Against Balance Billing.
Summary of Burden
    Type of Review: New Collection.
    Agency: DOL-EBSA, Treasury.
    Title: No Surprise Billing.
    OMB Numbers: 1210-NEW, 1545-NEW.
    Affected Public: Businesses or other for-profits, Not-for-profit 
institutions.
    Total Respondents: DOL--1,985; Treasury--1,779.
    Total Responses: DOL--10,368,277; Treasury--10,368,071.
    Frequency of Response: Occasionally.
    Estimated Total Annual Burden Hours: 927,652 (DOL--463,980, 
Treasury--463,672).

[[Page 36946]]

    Estimated Total Annual Burden Cost: $558,885 (DOL--$279,496, 
Treasury--$279, 389).

F. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), (5 U.S.C. 601 et seq.), 
requires agencies to analyze options for regulatory relief of small 
entities to prepare an initial regulatory flexibility analysis to 
describe the impact of the proposed rule on small entities, unless the 
head of the agency can certify that the rule will not have a 
significant economic impact on a substantial number of small entities. 
The RFA generally defines a ``small entity'' as (1) a proprietary firm 
meeting the size standards of the Small Business Administration (SBA), 
(2) a not-for-profit organization that is not dominant in its field, or 
(3) a small government jurisdiction with a population of less than 
50,000. States and individuals are not included in the definition of 
``small entity.'' HHS uses a change in revenues of more than 3 to 5 
percent as its measure of significant economic impact on a substantial 
number of small entities. Individuals and states are not included in 
the definition of a small entity. These interim final rules are not 
preceded by a general notice of proposed rulemaking, and thus the 
requirements of RFA do not apply.

G. Unfunded Mandates Reform Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires that agencies assess anticipated costs and benefits and take 
certain other actions before issuing a proposed rule or any final rule 
for which a general notice of proposed rulemaking was published that 
includes any Federal mandate that may result in expenditures in any 1 
year by state, local, or Tribal governments, in the aggregate, or by 
the private sector, of $100 million in 1995 dollars, updated annually 
for inflation. In 2021, that threshold is approximately $158 million. 
These interim final rules were not preceded by a general notice of 
proposed rulemaking, and thus the requirements of UMRA do not apply.

H. Federalism

    Executive Order 13132 outlines fundamental principles of 
federalism. It requires adherence to specific criteria by federal 
agencies in formulating and implementing policies that have 
``substantial direct effects'' on the states, the relationship between 
the national government and states, or on the distribution of power and 
responsibilities among the various levels of government. Federal 
agencies promulgating regulations that have these federalism 
implications must consult with state and local officials, and describe 
the extent of their consultation and the nature of the concerns of 
state and local officials in the preamble to the interim final rules.
    These interim final rules protect participants, beneficiaries, or 
enrollees in group health plans and group and individual health 
insurance coverage, and covered individuals in FEHB plans, from 
surprise medical bills for emergency services, air ambulance services 
furnished by nonparticipating providers, and non-emergency services 
furnished by nonparticipating providers at participating facilities in 
certain circumstances. A number of states currently have laws related 
to surprise medical bills. The Departments are of the view that 
Congress did not intend to supplant state laws regarding balance 
billing, but rather to supplement such laws. The provisions in these 
interim final rules are consistent with the statute's general approach 
of supplementing state law. In addition, the No Surprises Act and these 
interim final rules recognize states' traditional role as the primary 
regulators of health insurance issuers, providers, and facilities. The 
No Surprises Act authorizes states to enforce the new requirements 
regarding health insurance coverage, including those related to balance 
billing, with respect to issuers, providers, facilities, and providers 
of air ambulance services, with HHS enforcing only in cases where the 
state has notified HHS that the state does not have the authority to 
enforce or is not otherwise enforcing, or HHS has made a determination 
that a state has failed to substantially enforce the requirements.
    In compliance with the requirement of Executive Order 13132 that 
agencies examine closely any policies that may have federalism 
implications or limit the policy making discretion of the states, the 
Departments have engaged in efforts to consult with and work 
cooperatively with affected states, including participating in 
conference calls with and attending conferences of the NAIC, and 
consulting with state insurance officials on a state-by-state basis. In 
addition, the Departments consulted with the NAIC, as required by the 
No Surprises Act, to establish the geographic regions to be used in the 
methodology for calculating the QPA.
    OPM concluded that it would be inappropriate for FEHB plans to 
adopt varying state standards, and consistent with the FEHBA, it would 
adopt state laws where appropriate pursuant to bilaterally negotiated 
FEHB contracts.
    While developing these interim final rules, the Departments 
attempted to balance the states' interests in regulating health 
insurance issuers, providers, and facilities with the need to ensure at 
least the minimum federal consumer protections in every state. By doing 
so, the Departments complied with the requirements of Executive Order 
13132.

I. Congressional Review Act

    These interim final rules are subject to the Congressional Review 
Act provisions of the Small Business Regulatory Enforcement Fairness 
Act of 1996 (5 U.S.C. 801 et seq.) and will be transmitted to the 
Congress and to the Comptroller General for review in accordance with 
such provisions.

Statutory Authority

    The Office of Personnel Management regulations are adopted pursuant 
to the authority contained in 5 U.S.C. 8902(p) and 5 U.S.C. 8913.
    The Department of the Treasury regulations are adopted pursuant to 
the authority contained in sections 7805 and 9833 of the Code.
    The Department of Labor regulations are adopted pursuant to the 
authority contained in 29 U.S.C. 1002, 1135, 1182, 1185d, 1191a, 1191b, 
and 1191c; Secretary of Labor's Order 1-2011, 77 FR 1088 (Jan. 9, 
2012).
    The Department of Health and Human Services regulations are adopted 
pursuant to the authority contained in sections 2701 through 2763, 
2791, 2792, 2794, 2799A-1 through 2799B-9 of the PHS Act (42 U.S.C. 
300gg--300gg-63, 300gg-91, 300gg-92, 300gg-94, 300gg-300gg139), as 
amended; sections 1311 and 1321 of the ACA (42 U.S.C. 13031 and 18041).

List of Subjects

5 CFR Part 890

    Administrative practice and procedure, Government employees, Health 
facilities, Health insurance, Health professions, Hostages, Iraq, 
Kuwait, Lebanon, Military personnel, Reporting and recordkeeping 
requirements, Retirement.

26 CFR Part 54

    Excise taxes, Health care, Health insurance, Pensions, Reporting 
and recordkeeping requirements.

29 CFR Part 2590

    Continuation coverage, Disclosure, Employee benefit plans, Group 
health plans, Health care, Health insurance, Medical child support, 
Reporting and recordkeeping requirements.

45 CFR Part 144

    Health care, Health insurance, Reporting and recordkeeping 
requirements.

[[Page 36947]]

45 CFR Part 147

    Health care, Health insurance, Reporting and recordkeeping 
requirements, and State regulation of health insurance.

45 CFR Part 149

    Balance billing, Health care, Health insurance, Reporting and 
recordkeeping requirements, Surprise billing, State regulation of 
health insurance, Transparency in coverage.

45 CFR Part 156

    Administrative practice and procedure, Advertising, Advisory 
committees, Age discrimination, Alaska, Brokers, Citizenship and 
naturalization, Civil rights, Conflict of interests, Consumer 
protection, Grant programs-health, Grants administration, Health care, 
Health insurance, Health maintenance organization (HMO), Health 
records, Hospitals, Indians, Individuals with disabilities, 
Intergovernmental relations, Loan programs-health, Medicaid, 
Organization and functions (Government agencies), Prescription drugs, 
Public assistance programs, Reporting and recordkeeping requirements, 
Sex discrimination, State and local governments, Sunshine Act, 
Technical assistance, Women, Youth.

Laurie Bodenheimer,
Associate Director, Healthcare and Insurance Office of Personnel 
Management.
Douglas W. O'Donnell,
Deputy Commissioner for Services and Enforcement, Internal Revenue 
Service.
Mark J. Mazur,
Acting Assistant Secretary of the Treasury (Tax Policy).
Ali Khawar,
Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.
Xavier Becerra,
Secretary, Department of Health and Human Services.

Office of Personnel Management

    For the reasons stated in the preamble, the Office of Personnel 
Management amends 5 CFR part 890 as follows:

PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

0
1. The authority citation for part 890 continues to read as follows:

    Authority:  5 U.S.C. 8913; Sec. 890.102 also issued under 
sections 11202(f), 11232(e), and 11246 (b) of Pub. L. 105-33, 111 
Stat. 251; Sec. 890.111 also issued under section 1622(b) of Pub. L. 
104-106, 110 Stat. 521 (36 U.S.C. 5522); Sec. 890.112 also issued 
under section 1 of Pub. L. 110-279, 122 Stat. 2604 (2 U.S.C. 2051); 
Sec. 890.113 also issued under section 1110 of Pub. L. 116-92, 133 
Stat. 1198 (5 U.S.C. 8702 note); Sec. 890.301 also issued under 
section 311 of Pub. L. 111-3, 123 Stat. 64 (26 U.S.C. 9801); Sec. 
890.302(b) also issued under section 1001 of Pub. L. 111-148, 124 
Stat. 119, as amended by Pub. L. 111-152, 124 Stat. 1029 (42 U.S.C. 
300gg-14); Sec. 890.803 also issued under 50 U.S.C. 3516 (formerly 
50 U.S.C. 403p) and 22 U.S.C. 4069c and 4069c-1; subpart L also 
issued under section 599C of Pub. L. 101-513, 104 Stat. 2064 (5 
U.S.C. 5561 note), as amended; and subpart M also issued under 
section 721 of Pub. L. 105-261 (10 U.S.C. 1108), 112 Stat. 2061.

Subpart A--Administration and General Provisions

0
2. Section 890.107 is amended by adding paragraph (e) to read as 
follows:


Sec.  890.107  Court review.

* * * * *
    (e) A suit for equitable relief founded on 5 U.S.C. chapter 89 that 
is based on 5 U.S.C. 8902(p) and is governed by 5 CFR part 890 must be 
brought against OPM by December 31 of the 3rd year after the year in 
which disputed services were rendered.

0
3. Section 890.114 is added to subpart A to read as follows:


Sec.  890.114   Surprise billing.

    (a) A carrier must comply with requirements described in 26 CFR 
54.9816-3T through 54.9816-6T, 54.9817-1T, and 54.9822-1T, 29 CFR 
2590.716-3 through 2590.716-6, 2590.717-1, and 2590.722, and 45 CFR 
149.30, 149.110 through 149.140, and 149.310 in the same manner as such 
provisions apply to a group health plan or health insurance issuer 
offering group or individual health insurance coverage, subject to 5 
U.S.C. 8902(m)(1), and the provisions of the carrier's contract. For 
purposes of application of such sections, all carriers are deemed to 
offer health benefits in the large group market.
    (b) For purposes of the provisions referenced in paragraph (a) of 
this section:
    Group health plan or plan shall mean a ``health benefits plan'' 
defined at 5 U.S.C. 8901(6), which is a Federal governmental plan 
offered pursuant to 5 U.S.C. chapter 89.
    Health insurance issuer or issuer shall include a carrier defined 
at 5 U.S.C. 8901(7). Where the carrier for a health benefits plan is a 
voluntary association, an association of organizations or entities, or 
is otherwise comprised of multiple entities, each entity is responsible 
for compliance in the same manner as such sections apply to group 
health plans and issuers. If and to the extent an entity offering a 
health benefits plan under 5 U.S.C. chapter 89 is licensed under state 
law and is properly considered an issuer as defined at section 2791 of 
the Public Health Service Act, the entity is considered a carrier to 
the extent of its FEHB health benefits plan contractual and regulatory 
compliance.
    Participant, beneficiary, or enrollee shall include an ``enrollee'' 
or ``covered individual'' as defined by 5 CFR 890.101, as appropriate.
    (c) When a complaint challenges a carrier's action or inaction with 
respect to the surprise billing provisions, OPM will coordinate with 
the Departments of Health and Human Services, Labor, and the Treasury 
to resolve the complaint.

Department of the Treasury

Internal Revenue Service

    Accordingly, 26 CFR part 54 is amended as follows:

PART 54--PENSION EXCISE TAXES

0
Paragraph 4. The authority citation for part 54 continues to read, in 
part, as follows:

    Authority:  26 U.S.C. 7805, unless otherwise noted.
* * * * *

0
Par. 5. Section 54.9801-1T is added to read as follows:


Sec.  54.9801-1T  Basis and scope (temporary).

    (a) Statutory basis. This section and Sec. Sec.  54.9801-2 through 
54.9801-6, 54.9802-1, 54.9802-2, 54.9802-3T, 54.9802-4, 54.9811-1, 
54.9812-1, 54.9815-1251, 54.9815-2704, 54.9815-2705, 54.9815-2708, 
54.9815-2711, 54.9815-2712, 54.9815-2713, 54.9815-2713A, 54.9815-2714, 
54.9815-2715, 54.9815-2715A1, 54.9815-2715A2, 54.9815-2715A3, 54.9815-
2719, 54.9815-2715A, 54.9816-1 through 9816-7, 54.9831-1, and 54.9833-1 
implement Chapter 100 of Subtitle K of the Internal Revenue Code of 
1986.
    (b) Scope. A group health plan or health insurance issuer offering 
group health insurance coverage may provide greater rights to 
participants and beneficiaries than those set forth in the portability 
and market reform sections of this part. This part sets forth minimum 
requirements for group health plans and group health insurance issuers 
offering group health insurance coverage concerning certain consumer 
protections of the Health Insurance Portability and Accountability Act 
(HIPAA), including special enrollment periods and the prohibition 
against

[[Page 36948]]

discrimination based on a health factor, as amended by the Patient 
Protection and Affordable Care Act (Affordable Care Act). Other 
consumer protection provisions, including other protections provided by 
the Affordable Care Act, the Mental Health Parity and Addiction Equity 
Act, and the No Surprises Act are set forth in this part.
    (c) Similar requirements under the Employee Retirement Income 
Security Act and the Public Health Service Act. Sections 701, 702, 703, 
711, 712, 716, 717, 732, and 733 of the Employee Retirement Income 
Security Act of 1974 and sections 2701, 2702, 2704, 2705, 2721, 2791, 
2799A-1, and 2799A-2 of the Public Health Service Act impose 
requirements similar to those imposed under Chapter 100 of Subtitle K 
with respect to health insurance issuers offering group health 
insurance coverage. See 29 CFR part 2590 and 45 CFR parts 144, 146, 
148, and 149. See also part B of Title XXVII of the Public Health 
Service Act and 45 CFR parts 148 and 149 for other rules applicable to 
health insurance offered in the individual market (defined in Sec.  
54.9801-2).

0
Par. 6. Section 54.9801-2T is added to read as follows:


Sec.  54.9801-2T  Definitions (temporary).

    Unless otherwise provided, the definitions in this section and 
Sec.  54.9801-2 govern in applying the provisions of sections 9801 
through 9825 and 9831 through 9834.
    Affiliation period means a period of time that must expire before 
health insurance coverage provided by an HMO becomes effective, and 
during which the HMO is not required to provide benefits.
    COBRA definitions:
    (1) COBRA means title X of the Consolidated Omnibus Budget 
Reconciliation Act of 1985, as amended.
    (2) COBRA continuation coverage means coverage, under a group 
health plan, that satisfies an applicable COBRA continuation provision.
    (3) COBRA continuation provision means section 4980B (other than 
paragraph (f)(1) of section 4980B insofar as it relates to pediatric 
vaccines), sections 601-608 of ERISA, or title XXII of the PHS Act.
    (4) Exhaustion of COBRA continuation coverage means that an 
individual's COBRA continuation coverage ceases for any reason other 
than either failure of the individual to pay premiums on a timely 
basis, or for cause (such as making a fraudulent claim or an 
intentional misrepresentation of a material fact in connection with the 
plan). An individual is considered to have exhausted COBRA continuation 
coverage if such coverage ceases--
    (i) Due to the failure of the employer or other responsible entity 
to remit premiums on a timely basis;
    (ii) When the individual no longer resides, lives, or works in the 
service area of an HMO or similar program (whether or not within the 
choice of the individual) and there is no other COBRA continuation 
coverage available to the individual; or
    (iii) When the individual incurs a claim that would meet or exceed 
a lifetime limit on all benefits and there is no other COBRA 
continuation coverage available to the individual.
    Condition means a medical condition.
    Creditable coverage means creditable coverage within the meaning of 
Sec.  54.9801-4(a).
    Dependent means any individual who is or may become eligible for 
coverage under the terms of a group health plan because of a 
relationship to a participant.
    Employee Retirement Income Security Act of 1974 (ERISA) means the 
Employee Retirement Income Security Act of 1974, as amended (29 U.S.C. 
1001 et seq.).
    Enroll means to become covered for benefits under a group health 
plan (that is, when coverage becomes effective), without regard to when 
the individual may have completed or filed any forms that are required 
in order to become covered under the plan. For this purpose, an 
individual who has health coverage under a group health plan is 
enrolled in the plan regardless of whether the individual elects 
coverage, the individual is a dependent who becomes covered as a result 
of an election by a participant, or the individual becomes covered 
without an election.
    Enrollment date means the first day of coverage or, if there is a 
waiting period, the first day of the waiting period. If an individual 
receiving benefits under a group health plan changes benefit packages, 
or if the plan changes group health insurance issuers, the individual's 
enrollment date does not change.
    Excepted benefits means the benefits described as excepted in Sec.  
54.9831(c).
    First day of coverage means, in the case of an individual covered 
for benefits under a group health plan, the first day of coverage under 
the plan and, in the case of an individual covered by health insurance 
coverage in the individual market, the first day of coverage under the 
policy or contract.
    Genetic information has the meaning given the term in Sec.  
54.9802-3T(a)(3).
    Group health insurance coverage means health insurance coverage 
offered in connection with a group health plan. Individual health 
insurance coverage reimbursed by the arrangements described in 29 CFR 
2510.3-1(l) is not offered in connection with a group health plan, and 
is not group health insurance coverage, provided all the conditions in 
29 CFR 2510.3-1(l) are satisfied.
    Group health plan or plan means a group health plan within the 
meaning of Sec.  54.9831-1(a).
    Group market means the market for health insurance coverage offered 
in connection with a group health plan. (However, certain very small 
plans may be treated as being in the individual market, rather than the 
group market; see the definition of individual market in this section.)
    Health insurance coverage means benefits consisting of medical care 
(provided directly, through insurance or reimbursement, or otherwise) 
under any hospital or medical service policy or certificate, hospital 
or medical service plan contract, or HMO contract offered by a health 
insurance issuer. Health insurance coverage includes group health 
insurance coverage, individual health insurance coverage, and short-
term, limited-duration insurance. However, benefits described in Sec.  
54.9831(c)(2) are not treated as benefits consisting of medical care.
    Health insurance issuer or issuer means an insurance company, 
insurance service, or insurance organization (including an HMO) that is 
required to be licensed to engage in the business of insurance in a 
State and that is subject to State law that regulates insurance (within 
the meaning of section 514(b)(2) of ERISA). Such term does not include 
a group health plan.
    Health maintenance organization or HMO means--
    (1) A federally qualified health maintenance organization (as 
defined in section 1301(a) of the PHS Act);
    (2) An organization recognized under State law as a health 
maintenance organization; or
    (3) A similar organization regulated under State law for solvency 
in the same manner and to the same extent as such a health maintenance 
organization.
    Individual health insurance coverage means health insurance 
coverage offered to individuals in the individual market, but does not 
include short-term, limited-duration insurance. Individual health 
insurance coverage can include dependent coverage.
    Individual market means the market for health insurance coverage 
offered to individuals other than in connection

[[Page 36949]]

with a group health plan. Unless a State elects otherwise in accordance 
with section 2791(e)(1)(B)(ii) of the PHS Act, such term also includes 
coverage offered in connection with a group health plan that has fewer 
than two participants who are current employees on the first day of the 
plan year.
    Issuer means a health insurance issuer.
    Late enrollee means an individual whose enrollment in a plan is a 
late enrollment.
    Late enrollment means enrollment of an individual under a group 
health plan other than on the earliest date on which coverage can 
become effective for the individual under the terms of the plan; or 
through special enrollment. (For rules relating to special enrollment, 
see Sec.  54.9801-6.) If an individual ceases to be eligible for 
coverage under a plan, and then subsequently becomes eligible for 
coverage under the plan, only the individual's most recent period of 
eligibility is taken into account in determining whether the individual 
is a late enrollee under the plan with respect to the most recent 
period of coverage. Similar rules apply if an individual again becomes 
eligible for coverage following a suspension of coverage that applied 
generally under the plan.
    Medical care has the meaning given such term by section 213(d), 
determined without regard to section 213(d)(1)(C) and so much of 
section 213(d)(1)(D) as relates to qualified long-term care insurance.
    Medical condition or condition means any condition, whether 
physical or mental, including, but not limited to, any condition 
resulting from illness, injury (whether or not the injury is 
accidental), pregnancy, or congenital malformation. However, genetic 
information is not a condition.
    Participant means participant within the meaning of section 3(7) of 
ERISA.
    Placement, or being placed, for adoption means the assumption and 
retention of a legal obligation for total or partial support of a child 
by a person with whom the child has been placed in anticipation of the 
child's adoption. The child's placement for adoption with such person 
ends upon the termination of such legal obligation.
    Plan year means the year that is designated as the plan year in the 
plan document of a group health plan, except that if the plan document 
does not designate a plan year or if there is no plan document, the 
plan year is--
    (1) The deductible or limit year used under the plan;
    (2) If the plan does not impose deductibles or limits on a yearly 
basis, then the plan year is the policy year;
    (3) If the plan does not impose deductibles or limits on a yearly 
basis, and either the plan is not insured or the insurance policy is 
not renewed on an annual basis, then the plan year is the employer's 
taxable year; or
    (4) In any other case, the plan year is the calendar year.
    Preexisting condition exclusion means a limitation or exclusion of 
benefits (including a denial of coverage) based on the fact that the 
condition was present before the effective date of coverage (or if 
coverage is denied, the date of the denial) under a group health plan 
or group or individual health insurance coverage (or other coverage 
provided to federally eligible individuals pursuant to 45 CFR part 
148), whether or not any medical advice, diagnosis, care, or treatment 
was recommended or received before that day. A preexisting condition 
exclusion includes any limitation or exclusion of benefits (including a 
denial of coverage) applicable to an individual as a result of 
information relating to an individual's health status before the 
individual's effective date of coverage (or if coverage is denied, the 
date of the denial) under a group health plan, or group or individual 
health insurance coverage (or other coverage provided to federally 
eligible individuals pursuant to 45 CFR part 148), such as a condition 
identified as a result of a pre-enrollment questionnaire or physical 
examination given to the individual, or review of medical records 
relating to the pre-enrollment period.
    Public health plan means public health plan within the meaning of 
Sec.  54.9801-4(a)(1)(ix).
    Public Health Service Act (PHS Act) means the Public Health Service 
Act (42 U.S.C. 201, et seq.).
    Short-term, limited-duration insurance means health insurance 
coverage provided pursuant to a contract with an issuer that:
    (1) Has an expiration date specified in the contract that is less 
than 12 months after the original effective date of the contract and, 
taking into account renewals or extensions, has a duration of no longer 
than 36 months in total;
    (2) With respect to policies having a coverage start date before 
January 1, 2019, displays prominently in the contract and in any 
application materials provided in connection with enrollment in such 
coverage in at least 14 point type the language in the following Notice 
1, excluding the heading ``Notice 1,'' with any additional information 
required by applicable state law:

Notice 1

    This coverage is not required to comply with certain federal 
market requirements for health insurance, principally those 
contained in the Affordable Care Act. Be sure to check your policy 
carefully to make sure you are aware of any exclusions or 
limitations regarding coverage of preexisting conditions or health 
benefits (such as hospitalization, emergency services, maternity 
care, preventive care, prescription drugs, and mental health and 
substance use disorder services). Your policy might also have 
lifetime and/or annual dollar limits on health benefits. If this 
coverage expires or you lose eligibility for this coverage, you 
might have to wait until an open enrollment period to get other 
health insurance coverage. Also, this coverage is not ``minimum 
essential coverage.'' If you don't have minimum essential coverage 
for any month in 2018, you may have to make a payment when you file 
your tax return unless you qualify for an exemption from the 
requirement that you have health coverage for that month.

    (3) With respect to policies having a coverage start date on or 
after January 1, 2019, displays prominently in the contract and in any 
application materials provided in connection with enrollment in such 
coverage in at least 14 point type the language in the following Notice 
2, excluding the heading ``Notice 2,'' with any additional information 
required by applicable state law:

Notice 2

    This coverage is not required to comply with certain federal 
market requirements for health insurance, principally those 
contained in the Affordable Care Act. Be sure to check your policy 
carefully to make sure you are aware of any exclusions or 
limitations regarding coverage of preexisting conditions or health 
benefits (such as hospitalization, emergency services, maternity 
care, preventive care, prescription drugs, and mental health and 
substance use disorder services). Your policy might also have 
lifetime and/or annual dollar limits on health benefits. If this 
coverage expires or you lose eligibility for this coverage, you 
might have to wait until an open enrollment period to get other 
health insurance coverage.

    (4) If a court holds the 36-month maximum duration provision set 
forth in paragraph (1) of this definition or its applicability to any 
person or circumstances invalid, the remaining provisions and their 
applicability to other people or circumstances shall continue in 
effect.
    Significant break in coverage means a significant break in coverage 
within the meaning of Sec.  54.9801-4(b)(2)(iii).
    Special enrollment means enrollment in a group health plan under 
the rights described in Sec.  54.9801-6 or in group health insurance 
coverage under the rights described in 29 CFR 2590.701-6 or 45 CFR 
146.117.

[[Page 36950]]

    State health benefits risk pool means a State health benefits risk 
pool within the meaning of Sec.  54.9801-4(a)(1)(vii).
    Travel insurance means insurance coverage for personal risks 
incident to planned travel, which may include, but is not limited to, 
interruption or cancellation of trip or event, loss of baggage or 
personal effects, damages to accommodations or rental vehicles, and 
sickness, accident, disability, or death occurring during travel, 
provided that the health benefits are not offered on a stand-alone 
basis and are incidental to other coverage. For this purpose, the term 
travel insurance does not include major medical plans that provide 
comprehensive medical protection for travelers with trips lasting 6 
months or longer, including, for example, those working overseas as an 
expatriate or military personnel being deployed.
    Waiting period means waiting period within the meaning of Sec.  
54.9815-2708(b).

0
Par. 7. Section 54.9815-2719AT is added to read as follows:


Sec.  54.9815-2719AT  Patient protections (temporary).

    (a)-(b) [Reserved]
    (c) Applicability date. The provisions of this section are 
applicable to group health plans and health insurance issuers for plan 
years beginning before January 1, 2022. See also Sec. Sec.  54.9816-4T 
through 54.9816-7T, 54.9817-1T, and 54.9822-1T for rules applicable 
with respect to plan years beginning on or after January 1, 2022.

0
Par. 8. Sections 54.9816-1T, 54.9816-2T, 54.9816-3T, 54.9816-4T, 
54.9816-5T, 54.9816-6T, 54.9816-7T, 54.9817-1T, and 54.9822-1T are 
added to read as follows:

Sec.
54.9816-1T Basis and scope (temporary).
54.9816-2T Applicability (temporary).
54.9816-3T Definitions (temporary).
54.9816-4T Preventing surprise medical bills for emergency services 
(temporary).
54.9816-5T Preventing surprise medical bills for non-emergency 
services performed by nonparticipating providers at certain 
participating facilities (temporary).
54.9816-6T Methodology for calculating qualifying payment amount 
(temporary).
54.9816-7T Complaints process for surprise medical bills regarding 
group health plans (temporary).
54.9817-1T Preventing surprise medical bills for air ambulance 
services (temporary).
54.9822-1T Choice of health care professional (temporary).
* * * * *


Sec.  54.9816-1T  Basis and scope (temporary).

    (a) Basis. This section and Sec. Sec.  54.9816-2T through 54.9816-
7T, 54.9817-1T, and 54.9822-1T implement subchapter B of chapter 100 of 
the Internal Revenue Code of 1986.
    (b) Scope. This part establishes standards for group health plans 
with respect to surprise medical bills, transparency in health care 
coverage, and additional patient protections.


Sec.  54.9816-2T  Applicability (temporary).

    (a) In general. The requirements in Sec. Sec.  54.9816-4T through 
54.9816-7T, 54.9817-1T, and 54.9822-1T apply to group health plans 
(including grandfathered health plans as defined in Sec.  54.9815-
1251T), except as specified in paragraph (b) of this section.
    (b) Exceptions. The requirements in Sec. Sec.  54.9816-4T through 
54.9816-7T, 54.9817-1T, and 54.9822-1T do not apply to the following:
    (1) Excepted benefits as described in Sec.  54.9831-1(c).
    (2) Short-term, limited-duration insurance as defined in Sec.  
54.9801-2.
    (3) Health reimbursement arrangements or other account-based group 
health plans as described in Sec.  54.9815-2711(d).


Sec.  54.9816-3T  Definitions (temporary).

    The definitions in Sec.  54.9801-2T apply to Sec. Sec.  54.9816-4T 
through 54.9816-7T, 54.9817-1T, and 54.9822-1T unless otherwise 
specified. In addition, for purposes of Sec. Sec.  54.9816-4T through 
54.9816-7T, 54.9817-1T, and 54.9822-1T, the following definitions 
apply:
    Air ambulance service means medical transport by a rotary wing air 
ambulance, as defined in 42 CFR 414.605, or fixed wing air ambulance, 
as defined in 42 CFR 414.605, for patients.
    Cost sharing means the amount a participant, beneficiary, or 
enrollee is responsible for paying for a covered item or service under 
the terms of the group health plan or health insurance coverage. Cost 
sharing generally includes copayments, coinsurance, and amounts paid 
towards deductibles, but does not include amounts paid towards 
premiums, balance billing by out-of-network providers, or the cost of 
items or services that are not covered under a group health plan or 
health insurance coverage.
    Emergency department of a hospital includes a hospital outpatient 
department that provides emergency services.
    Emergency medical condition has the meaning given the term in Sec.  
54.9816-4T(c)(1).
    Emergency services has the meaning given the term in Sec.  54.9816-
4T(c)(2).
    Health care facility, with respect to a group health plan, in the 
context of non-emergency services, is each of the following:
    (1) A hospital (as defined in section 1861(e) of the Social 
Security Act);
    (2) A hospital outpatient department;
    (3) A critical access hospital (as defined in section 1861(mm)(1) 
of the Social Security Act); and
    (4) An ambulatory surgical center described in section 
1833(i)(1)(A) of the Social Security Act.
    Independent freestanding emergency department means a health care 
facility (not limited to those described in the definition of health 
care facility with respect to non-emergency services) that--
    (1) Is geographically separate and distinct and licensed separately 
from a hospital under applicable State law; and
    (2) Provides any emergency services as described in Sec.  54.9816-
4T(c)(2)(i).
    Nonparticipating emergency facility means an emergency department 
of a hospital, or an independent freestanding emergency department (or 
a hospital, with respect to services that pursuant to Sec.  54.9816-
4T(c)(2)(ii) are included as emergency services), that does not have a 
contractual relationship directly or indirectly with a group health 
plan, with respect to the furnishing of an item or service under the 
plan.
    Nonparticipating provider means any physician or other health care 
provider who does not have a contractual relationship directly or 
indirectly with a group health plan, with respect to the furnishing of 
an item or service under the plan.
    Notice of denial of payment means, with respect to an item or 
service for which benefits subject to the protections of Sec. Sec.  
54.9816-4T, 54.9816-5T, and 54.9817-1T are provided or covered, a 
written notice from the plan to the health care provider, facility, or 
provider of air ambulance services, as applicable, that payment for 
such item or service will not be made by the plan and which explains 
the reason for denial. The term notice of denial of payment does not 
include a notice of benefit denial due to an adverse benefit 
determination as defined in 29 CFR 2560.503-1.
    Out-of-network rate means, with respect to an item or service 
furnished by a nonparticipating provider, nonparticipating emergency 
facility, or nonparticipating provider of air ambulance services--
    (1) Subject to paragraph (3) of this definition, in a State that 
has in effect a specified State law, the amount determined in 
accordance with such law;

[[Page 36951]]

    (2) Subject to paragraph (3) of this definition, in a State that 
does not have in effect a specified State law--
    (i) Subject to paragraph (2)(ii) of this definition, if the 
nonparticipating provider or nonparticipating emergency facility and 
the plan agree on an amount of payment (including if the amount agreed 
upon is the initial payment sent by the plan under Sec.  54.9816-
4T(b)(3)(iv)(A), Sec.  54.9816-5T(c)(3), or Sec.  54.9817-1T(b)(4)(i); 
29 CFR 2590.716-4(b)(3)(iv)(A), 2590.716-5(c)(3), or 2590.717-
1(b)(4)(i); or 45 CFR 149.110(b)(3)(iv)(A), 149.120(c)(3), or 
149.130(b)(4)(i), as applicable, or is agreed on through negotiations 
with respect to such item or service), such agreed on amount; or
    (ii) If the nonparticipating provider or nonparticipating emergency 
facility and the plan enter into the independent dispute resolution 
(IDR) process under section 9816(c) or 9817(b) of the Internal Revenue 
Code, section 716(c) or 717(b) of ERISA, or section 2799A-1(c) or 
2799A-2(b) of the PHS Act, as applicable, and do not agree before the 
date on which a certified IDR entity makes a determination with respect 
to such item or service under such subsection, the amount of such 
determination; or
    (3) In a State that has an All-Payer Model Agreement under section 
1115A of the Social Security Act that applies with respect to the plan; 
the nonparticipating provider or nonparticipating emergency facility; 
and the item or service, the amount that the State approves under the 
All-Payer Model Agreement for the item or service.
    Participating emergency facility means any emergency department of 
a hospital, or an independent freestanding emergency department (or a 
hospital, with respect to services that pursuant to Sec.  54.9816-
4T(c)(2)(ii) are included as emergency services), that has a 
contractual relationship directly or indirectly with a group health 
plan setting forth the terms and conditions on which a relevant item or 
service is provided to a participant or beneficiary under the plan. A 
single case agreement between an emergency facility and a plan that is 
used to address unique situations in which a participant or beneficiary 
requires services that typically occur out-of-network constitutes a 
contractual relationship for purposes of this definition, and is 
limited to the parties to the agreement.
    Participating health care facility means any health care facility 
described in this section that has a contractual relationship directly 
or indirectly with a group health plan setting forth the terms and 
conditions on which a relevant item or service is provided to a 
participant or beneficiary under the plan. A single case agreement 
between a health care facility and a plan that is used to address 
unique situations in which a participant or beneficiary requires 
services that typically occur out-of-network constitutes a contractual 
relationship for purposes of this definition, and is limited to the 
parties to the agreement.
    Participating provider means any physician or other health care 
provider who has a contractual relationship directly or indirectly with 
a group health plan setting forth the terms and conditions on which a 
relevant item or service is provided to a participant or beneficiary 
under the plan.
    Physician or health care provider means a physician or other health 
care provider who is acting within the scope of practice of that 
provider's license or certification under applicable State law, but 
does not include a provider of air ambulance services.
    Provider of air ambulance services means an entity that is licensed 
under applicable State and Federal law to provide air ambulance 
services.
    Same or similar item or service has the meaning given the term in 
Sec.  54.9816-6T(a)(13).
    Service code has the meaning given the term in Sec.  54.9816-
6T(a)(14).
    Qualifying payment amount has the meaning given the term in Sec.  
54.9816-6T(a)(16).
    Recognized amount means, with respect to an item or service 
furnished by a nonparticipating provider or nonparticipating emergency 
facility--
    (1) Subject to paragraph (3) of this definition, in a State that 
has in effect a specified State law, the amount determined in 
accordance with such law.
    (2) Subject to paragraph (3) of this definition, in a State that 
does not have in effect a specified State law, the lesser of--
    (i) The amount that is the qualifying payment amount (as determined 
in accordance with Sec.  54.9816-6T); or
    (ii) The amount billed by the provider or facility.
    (3) In a State that has an All-Payer Model Agreement under section 
1115A of the Social Security Act that applies with respect to the plan; 
the nonparticipating provider or nonparticipating emergency facility; 
and the item or service, the amount that the State approves under the 
All-Payer Model Agreement for the item or service.
    Specified State law means a State law that provides for a method 
for determining the total amount payable under a group health plan to 
the extent such State law applies for an item or service furnished by a 
nonparticipating provider or nonparticipating emergency facility 
(including where it applies because the State has allowed a plan that 
is not otherwise subject to applicable State law an opportunity to opt 
in, subject to section 514 of the Employee Retirement Income Security 
Act of 1974). A group health plan that opts into such a specified State 
law must do so for all items and services to which the specified State 
law applies and in a manner determined by the applicable State 
authority, and must prominently display in its plan materials 
describing the coverage of out-of-network services a statement that the 
plan has opted into the specified State law, identify the relevant 
State (or States), and include a general description of the items and 
services provided by nonparticipating facilities and providers that are 
covered by the specified State law.
    State means each of the 50 States, the District of Columbia, Puerto 
Rico, the Virgin Islands, Guam, American Samoa, and the Northern 
Mariana Islands.
    Treating provider is a physician or health care provider who has 
evaluated the individual.
    Visit, with respect to items and services furnished to an 
individual at a health care facility, includes, in addition to items 
and services furnished by a provider at the facility, equipment and 
devices, telemedicine services, imaging services, laboratory services, 
and preoperative and postoperative services, regardless of whether the 
provider furnishing such items or services is at the facility.


Sec.  54.9816-4T  Preventing surprise medical bills for emergency 
services (temporary).

    (a) In general. If a group health plan provides or covers any 
benefits with respect to services in an emergency department of a 
hospital or with respect to emergency services in an independent 
freestanding emergency department, the plan must cover emergency 
services, as defined in paragraph (c)(2) of this section, and this 
coverage must be provided in accordance with paragraph (b) of this 
section.
    (b) Coverage requirements. A plan described in paragraph (a) of 
this section must provide coverage for emergency services in the 
following manner--
    (1) Without the need for any prior authorization determination, 
even if the services are provided on an out-of-network basis.

[[Page 36952]]

    (2) Without regard to whether the health care provider furnishing 
the emergency services is a participating provider or a participating 
emergency facility, as applicable, with respect to the services.
    (3) If the emergency services are provided by a nonparticipating 
provider or a nonparticipating emergency facility--
    (i) Without imposing any administrative requirement or limitation 
on coverage that is more restrictive than the requirements or 
limitations that apply to emergency services received from 
participating providers and participating emergency facilities.
    (ii) Without imposing cost-sharing requirements that are greater 
than the requirements that would apply if the services were provided by 
a participating provider or a participating emergency facility.
    (iii) By calculating the cost-sharing requirement as if the total 
amount that would have been charged for the services by such 
participating provider or participating emergency facility were equal 
to the recognized amount for such services.
    (iv) The plan--
    (A) Not later than 30 calendar days after the bill for the services 
is transmitted by the provider or facility (or, in cases where the 
recognized amount is determined by a specified State law or All-Payer 
Model Agreement, such other timeframe as specified by the State law or 
All-Payer Model Agreement), determines whether the services are covered 
under the plan and, if the services are covered, sends to the provider 
or facility, as applicable, an initial payment or a notice of denial of 
payment. For purposes of this paragraph (b)(3)(iv)(A), the 30-calendar-
day period begins on the date the plan receives the information 
necessary to decide a claim for payment for the services.
    (B) Pays a total plan payment directly to the nonparticipating 
provider or nonparticipating facility that is equal to the amount by 
which the out-of-network rate for the services exceeds the cost-sharing 
amount for the services (as determined in accordance with paragraphs 
(b)(3)(ii) and (iii) of this section), less any initial payment amount 
made under paragraph (b)(3)(iv)(A) of this section. The total plan 
payment must be made in accordance with the timing requirement 
described in section 9816(c)(6), or in cases where the out-of-network 
rate is determined under a specified State law or All-Payer Model 
Agreement, such other timeframe as specified by the State law or All-
Payer Model Agreement.
    (v) By counting any cost-sharing payments made by the participant 
or beneficiary with respect to the emergency services toward any in-
network deductible or in-network out-of-pocket maximums (including the 
annual limitation on cost sharing under section 2707(b) of the Public 
Health Service Act) (as applicable) applied under the plan (and the in-
network deductible and in-network out-of-pocket maximums must be 
applied) in the same manner as if the cost-sharing payments were made 
with respect to emergency services furnished by a participating 
provider or a participating emergency facility.
    (4) Without limiting what constitutes an emergency medical 
condition (as defined in paragraph (c)(1) of this section) solely on 
the basis of diagnosis codes.
    (5) Without regard to any other term or condition of the coverage, 
other than--
    (i) The exclusion or coordination of benefits (to the extent not 
inconsistent with benefits for an emergency medical condition, as 
defined in paragraph (c)(1) of this section).
    (ii) An affiliation or waiting period (each as defined in Sec.  
54.9801-2).
    (iii) Applicable cost sharing.
    (c) Definitions. In this section--
    (1) Emergency medical condition means a medical condition, 
including a mental health condition or substance use disorder, 
manifesting itself by acute symptoms of sufficient severity (including 
severe pain) such that a prudent layperson, who possesses an average 
knowledge of health and medicine, could reasonably expect the absence 
of immediate medical attention to result in a condition described in 
clause (i), (ii), or (iii) of section 1867(e)(1)(A) of the Social 
Security Act (42 U.S.C. 1395dd(e)(1)(A)). (In that provision of the 
Social Security Act, clause (i) refers to placing the health of the 
individual (or, with respect to a pregnant woman, the health of the 
woman or her unborn child) in serious jeopardy; clause (ii) refers to 
serious impairment to bodily functions; and clause (iii) refers to 
serious dysfunction of any bodily organ or part.)
    (2) Emergency services means, with respect to an emergency medical 
condition--
    (i) In general. (A) An appropriate medical screening examination 
(as required under section 1867 of the Social Security Act (42 U.S.C. 
1395dd) or as would be required under such section if such section 
applied to an independent freestanding emergency department) that is 
within the capability of the emergency department of a hospital or of 
an independent freestanding emergency department, as applicable, 
including ancillary services routinely available to the emergency 
department to evaluate such emergency medical condition; and
    (B) Within the capabilities of the staff and facilities available 
at the hospital or the independent freestanding emergency department, 
as applicable, such further medical examination and treatment as are 
required under section 1867 of the Social Security Act (42 U.S.C. 
1395dd), or as would be required under such section if such section 
applied to an independent freestanding emergency department, to 
stabilize the patient (regardless of the department of the hospital in 
which such further examination or treatment is furnished).
    (ii) Inclusion of additional services. (A) Subject to paragraph 
(c)(2)(ii)(B) of this section, items and services--
    (1) For which benefits are provided or covered under the plan; and
    (2) That are furnished by a nonparticipating provider or 
nonparticipating emergency facility (regardless of the department of 
the hospital in which such items or services are furnished) after the 
participant or beneficiary is stabilized and as part of outpatient 
observation or an inpatient or outpatient stay with respect to the 
visit in which the services described in paragraph (c)(2)(i) of this 
section are furnished.
    (B) Items and services described in paragraph (c)(2)(ii)(A) of this 
section are not included as emergency services if all of the conditions 
in 45 CFR 149.410(b) are met.
    (3) To stabilize, with respect to an emergency medical condition, 
has the meaning given such term in section 1867(e)(3) of the Social 
Security Act (42 U.S.C. 1395dd(e)(3)).
    (d) Applicability date. The provisions of this section are 
applicable with respect to plan years beginning on or after January 1, 
2022.


Sec.  54.9816-5T  Preventing surprise medical bills for non-emergency 
services performed by nonparticipating providers at certain 
participating facilities (temporary).

    (a) In general. If a group health plan provides or covers any 
benefits with respect to items and services described in paragraph (b) 
of this section, the plan must cover the items and services when 
furnished by a nonparticipating provider in accordance with paragraph 
(c) of this section.
    (b) Items and services described. The items and services described 
in this paragraph (b) are items and services (other than emergency 
services) furnished to a participant or beneficiary

[[Page 36953]]

by a nonparticipating provider with respect to a visit at a 
participating health care facility, unless the provider has satisfied 
the notice and consent criteria of 45 CFR 149.420(c) through (i) with 
respect to such items and services.
    (c) Coverage requirements. In the case of items and services 
described in paragraph (b) of this section, the plan--
    (1) Must not impose a cost-sharing requirement for the items and 
services that is greater than the cost-sharing requirement that would 
apply if the items or services had been furnished by a participating 
provider.
    (2) Must calculate the cost-sharing requirements as if the total 
amount that would have been charged for the items and services by such 
participating provider were equal to the recognized amount for the 
items and services.
    (3) Not later than 30 calendar days after the bill for the items or 
services is transmitted by the provider (or in cases where the 
recognized amount is determined by a specified State law or All-Payer 
Model Agreement, such other timeframe as specified under the State law 
or All-Payer Model Agreement), must determine whether the items and 
services are covered under the plan and, if the items and services are 
covered, send to the provider an initial payment or a notice of denial 
of payment. For purposes of this paragraph (c)(3), the 30-calendar-day 
period begins on the date the plan receives the information necessary 
to decide a claim for payment for the items or services.
    (4) Must pay a total plan payment directly to the nonparticipating 
provider that is equal to the amount by which the out-of-network rate 
for the items and services involved exceeds the cost-sharing amount for 
the items and services (as determined in accordance with paragraphs 
(c)(1) and (2) of this section), less any initial payment amount made 
under paragraph (c)(3) of this section. The total plan payment must be 
made in accordance with the timing requirement described in section 
9816(c)(6) or in cases where the out-of-network rate is determined 
under a specified State law or All-Payer Model Agreement, such other 
timeframe as specified by the State law or All-Payer Model Agreement.
    (5) Must count any cost-sharing payments made by the participant or 
beneficiary toward any in-network deductible and in-network out-of-
pocket maximums (including the annual limitation on cost sharing under 
section 2707(b) of the Public Health Service Act) (as applicable) 
applied under the plan (and the in-network deductible and out-of-pocket 
maximums must be applied) in the same manner as if such cost-sharing 
payments were made with respect to items and services furnished by a 
participating provider.
    (d) Applicability date. The provisions of this section are 
applicable with respect to plan years beginning on or after January 1, 
2022.


Sec.  54.9816-6T  Methodology for calculating qualifying payment amount 
(temporary).

    (a) Definitions. For purposes of this section, the following 
definitions apply:
    (1) Contracted rate means the total amount (including cost sharing) 
that a group health plan has contractually agreed to pay a 
participating provider, facility, or provider of air ambulance services 
for covered items and services, whether directly or indirectly, 
including through a third-party administrator or pharmacy benefit 
manager. Solely for purposes of this definition, a single case 
agreement, letter of agreement, or other similar arrangement between a 
provider, facility, or air ambulance provider and a plan, used to 
supplement the network of the plan for a specific participant or 
beneficiary in unique circumstances, does not constitute a contract.
    (2) Derived amount has the meaning given the term in Sec.  54.9815-
2715A1.
    (3) Eligible database means--
    (i) A State all-payer claims database; or
    (ii) Any third-party database which--
    (A) Is not affiliated with, or owned or controlled by, any health 
insurance issuer, or a health care provider, facility, or provider of 
air ambulance services (or any member of the same controlled group as, 
or under common control with, such an entity). For purposes of this 
paragraph (a)(3)(ii)(A), the term controlled group means a group of two 
or more persons that is treated as a single employer under sections 
52(a), 52(b), 414(m), or 414(o) of the Internal Revenue Code of 1986, 
as amended;
    (B) Has sufficient information reflecting in-network amounts paid 
by group health plans or health insurance issuers offering group or 
individual health insurance coverage to providers, facilities, or 
providers of air ambulance services for relevant items and services 
furnished in the applicable geographic region; and
    (C) Has the ability to distinguish amounts paid to participating 
providers and facilities by commercial payers, such as group health 
plans and health insurance issuers offering group or individual health 
insurance coverage, from all other claims data, such as amounts billed 
by nonparticipating providers or facilities and amounts paid by public 
payers, including the Medicare program under title XVIII of the Social 
Security Act, the Medicaid program under title XIX of the Social 
Security Act (or a demonstration project under title XI of the Social 
Security Act), or the Children's Health Insurance Program under title 
XXI of the Social Security Act.
    (4) Facility of the same or similar facility type means, with 
respect to emergency services, either--
    (i) An emergency department of a hospital; or
    (ii) An independent freestanding emergency department.
    (5) First coverage year means, with respect to an item or service 
for which coverage is not offered in 2019 under a group health plan, 
the first year after 2019 for which coverage for such item or service 
is offered under that plan.
    (6) First sufficient information year means, with respect to a 
group health plan--
    (i) In the case of an item or service for which the plan does not 
have sufficient information to calculate the median of the contracted 
rates described in paragraph (b) of this section in 2019, the first 
year after 2022 for which the plan has sufficient information to 
calculate the median of such contracted rates in the year immediately 
preceding that first year after 2022; and
    (ii) In the case of a newly covered item or service, the first year 
after the first coverage year for such item or service with respect to 
such plan for which the plan has sufficient information to calculate 
the median of the contracted rates described in paragraph (b) of this 
section in the year immediately preceding that first year.
    (7) Geographic region means--
    (i) For items and services other than air ambulance services--
    (A) Subject to paragraphs (a)(7)(i)(B) and (C) of this section, one 
region for each metropolitan statistical area, as described by the U.S. 
Office of Management and Budget and published by the U.S. Census 
Bureau, in a State, and one region consisting of all other portions of 
the State.
    (B) If a plan does not have sufficient information to calculate the 
median of the contracted rates described in paragraph (b) of this 
section for an item or service provided in a geographic region 
described in paragraph (a)(7)(i)(A) of this section, one region 
consisting of all metropolitan statistical areas, as described by the 
U.S. Office of Management and Budget and published by the U.S. Census 
Bureau, in the State, and one region consisting of all other portions 
of the State.
    (C) If a plan does not have sufficient information to calculate the 
median of the contracted rates described in paragraph (b) of this 
section for an item

[[Page 36954]]

or service provided in a geographic region described in paragraph 
(a)(7)(i)(B) of this section, one region consisting of all metropolitan 
statistical areas, as described by the U.S. Office of Management and 
Budget and published by the U.S. Census Bureau, in each Census division 
and one region consisting of all other portions of the Census division, 
as described by the U.S. Census Bureau.
    (ii) For air ambulance services--
    (A) Subject to paragraph (a)(7)(ii)(B) of this section, one region 
consisting of all metropolitan statistical areas, as described by the 
U.S. Office of Management and Budget and published by the U.S. Census 
Bureau, in the State, and one region consisting of all other portions 
of the State, determined based on the point of pick-up (as defined in 
42 CFR 414.605).
    (B) If a plan does not have sufficient information to calculate the 
median of the contracted rates described in paragraph (b) of this 
section for an air ambulance service provided in a geographic region 
described in paragraph (a)(7)(ii)(A) of this section, one region 
consisting of all metropolitan statistical areas, as described by the 
U.S. Office of Management and Budget and published by the U.S. Census 
Bureau, in each Census division and one region consisting of all other 
portions of the Census division, as described by the U.S. Census 
Bureau, determined based on the point of pick-up (as defined in 42 CFR 
414.605).
    (8) Insurance market is, irrespective of the State, one of the 
following:
    (i) The individual market (other than short-term, limited-duration 
insurance or individual health insurance coverage that consists solely 
of excepted benefits).
    (ii) The large group market (other than coverage that consists 
solely of excepted benefits).
    (iii) The small group market (other than coverage that consists 
solely of excepted benefits).
    (iv) In the case of a self-insured group health plan, all self-
insured group health plans (other than account-based plans, as defined 
in Sec.  54.9815-2711(d)(6)(i), and plans that consist solely of 
excepted benefits) of the same plan sponsor, or at the option of the 
plan sponsor, all self-insured group health plans administered by the 
same entity (including a third-party administrator contracted by the 
plan), to the extent otherwise permitted by law, that is responsible 
for calculating the qualifying payment amount on behalf of the plan.
    (9) Modifiers mean codes applied to the service code that provide a 
more specific description of the furnished item or service and that may 
adjust the payment rate or affect the processing or payment of the code 
billed.
    (10) Newly covered item or service means an item or service for 
which coverage was not offered in 2019 under a group health plan, but 
that is offered under the plan in a year after 2019.
    (11) New service code means a service code that was created or 
substantially revised in a year after 2019.
    (12) Provider in the same or similar specialty means the practice 
specialty of a provider, as identified by the plan consistent with the 
plan's usual business practice, except that, with respect to air 
ambulance services, all providers of air ambulance services are 
considered to be a single provider specialty.
    (13) Same or similar item or service means a health care item or 
service billed under the same service code, or a comparable code under 
a different procedural code system.
    (14) Service code means the code that describes an item or service 
using the Current Procedural Terminology (CPT) code, Healthcare Common 
Procedure Coding System (HCPCS), or Diagnosis-Related Group (DRG) 
codes.
    (15) Sufficient information means, for purposes of determining 
whether a group health plan has sufficient information to calculate the 
median of the contracted rates described in paragraph (b) of this 
section--
    (i) The plan has at least three contracted rates on January 31, 
2019, to calculate the median of the contracted rates in accordance 
with paragraph (b) of this section; or
    (ii) For an item or service furnished during a year after 2022 that 
is used to determine the first sufficient information year--
    (A) The plan has at least three contracted rates on January 31 of 
the year immediately preceding that year to calculate the median of the 
contracted rates in accordance with paragraph (b) of this section; and
    (B) The contracted rates under paragraph (a)(15)(ii)(A) of this 
section account (or are reasonably expected to account) for at least 25 
percent of the total number of claims paid for that item or service for 
that year with respect to all plans of the sponsor (or the 
administering entity as provided in paragraph (a)(8)(iv) of this 
section, if applicable) that are offered in the same insurance market.
    (16) Qualifying payment amount means, with respect to a sponsor of 
a group health plan, the amount calculated using the methodology 
described in paragraph (c) of this section.
    (17) Underlying fee schedule rate means the rate for a covered item 
or service from a particular participating provider, providers, or 
facility that a group health plan uses to determine a participant's or 
beneficiary's cost-sharing liability for the item or service, when that 
rate is different from the contracted rate.
    (b) Methodology for calculation of median contracted rate--(1) In 
general. The median contracted rate for an item or service is 
calculated by arranging in order from least to greatest the contracted 
rates of all group health plans of the plan sponsor (or the 
administering entity as provided in paragraph (a)(8)(iv) of this 
section, if applicable) in the same insurance market for the same or 
similar item or service that is provided by a provider in the same or 
similar specialty or facility of the same or similar facility type and 
provided in the geographic region in which the item or service is 
furnished and selecting the middle number. If there are an even number 
of contracted rates, the median contracted rate is the average of the 
middle two contracted rates. In determining the median contracted rate, 
the amount negotiated under each contract is treated as a separate 
amount. If a plan or issuer has a contract with a provider group or 
facility, the rate negotiated with that provider group or facility 
under the contract is treated as a single contracted rate if the same 
amount applies with respect to all providers of such provider group or 
facility under the single contract. However, if a plan or issuer has a 
contract with multiple providers, with separate negotiated rates with 
each particular provider, each unique contracted rate with an 
individual provider constitutes a single contracted rate. Further, if a 
plan or issuer has separate contracts with individual providers, the 
contracted rate under each such contract constitutes a single 
contracted rate (even if the same amount is paid to multiple providers 
under separate contracts).
    (2) Calculation rules. In calculating the median contracted rate, a 
plan must:
    (i) Calculate the median contracted rate with respect to all plans 
of such sponsor (or the administering entity as provided in paragraph 
(a)(8)(iv) of this section, if applicable) that are offered in the same 
insurance market;
    (ii) Calculate the median contracted rate using the full contracted 
rate applicable to the service code, except that the plan must--
    (A) Calculate separate median contracted rates for CPT code 
modifiers

[[Page 36955]]

``26'' (professional component) and ``TC'' (technical component);
    (B) For anesthesia services, calculate a median contracted rate for 
the anesthesia conversion factor for each service code;
    (C) For air ambulance services, calculate a median contracted rate 
for the air mileage service codes (A0435 and A0436); and
    (D) Where contracted rates otherwise vary based on applying a 
modifier code, calculate a separate median contracted rate for each 
such service code-modifier combination;
    (iii) In the case of payments made by a plan that are not on a fee-
for-service basis (such as bundled or capitation payments), calculate a 
median contracted rate for each item or service using the underlying 
fee schedule rates for the relevant items or services. If the plan does 
not have an underlying fee schedule rate for the item or service, it 
must use the derived amount to calculate the median contracted rate; 
and
    (iv) Exclude risk sharing, bonus, penalty, or other incentive-based 
or retrospective payments or payment adjustments.
    (3) Provider specialties; facility types. (i) If a plan has 
contracted rates that vary based on provider specialty for a service 
code, the median contracted rate is calculated separately for each 
provider specialty, as applicable.
    (ii) If a plan has contracted rates for emergency services that 
vary based on facility type for a service code, the median contracted 
rate is calculated separately for each facility of the same or similar 
facility type.
    (c) Methodology for calculation of the qualifying payment amount--
(1) In general. (i) For an item or service (other than items or 
services described in paragraphs (c)(1)(iii) through (vii) of this 
section) furnished during 2022, the plan must calculate the qualifying 
payment amount by increasing the median contracted rate (as determined 
in accordance with paragraph (b) of this section) for the same or 
similar item or service under such plans, on January 31, 2019, by the 
combined percentage increase as published by the Department of the 
Treasury and the Internal Revenue Service to reflect the percentage 
increase in the CPI-U over 2019, such percentage increase over 2020, 
and such percentage increase over 2021.
    (A) The combined percentage increase for 2019, 2020, and 2021 will 
be published in guidance by the Internal Revenue Service. The 
Department of the Treasury and the Internal Revenue Service will 
calculate the percentage increase using the CPI-U published by the 
Bureau of Labor Statistics of the Department of Labor.
    (B) For purposes of this paragraph (c)(1)(i), the CPI-U for each 
calendar year is the average of the CPI-U as of the close of the 12-
month period ending on August 31 of the calendar year, rounded to 10 
decimal places.
    (C) The combined percentage increase for 2019, 2020, and 2021 will 
be calculated as:
(CPI-U 2019/CPI-U 2018) x (CPI-U 2020/CPI-U 2019) x (CPI-U 2021/CPI-U 
2020)

    (ii) For an item or service (other than items or services described 
in paragraphs (c)(1)(iii) through (vii) of this section) furnished 
during 2023 or a subsequent year, the plan must calculate the 
qualifying payment amount by increasing the qualifying payment amount 
determined under paragraph (c)(1)(i) of this section, for such an item 
or service furnished in the immediately preceding year, by the 
percentage increase as published by the Department of the Treasury and 
the Internal Revenue Service.
    (A) The percentage increase for any year after 2022 will be 
published in guidance by the Internal Revenue Service. The Department 
of the Treasury and Internal Revenue Service will calculate the 
percentage increase using the CPI-U published by the Bureau of Labor 
Statistics of the Department of Labor.
    (B) For purposes of this paragraph (c)(1)(ii), the CPI-U for each 
calendar year is the average of the CPI-U as of the close of the 12-
month period ending on August 31 of the calendar year, rounded to 10 
decimal places.
    (C) The combined percentage increase for any year will be 
calculated as CPI-U present year/CPI-U prior year.
    (iii) For anesthesia services furnished during 2022, the plan must 
calculate the qualifying payment amount by first increasing the median 
contracted rate for the anesthesia conversion factor (as determined in 
accordance with paragraph (b) of this section) for the same or similar 
item or service under such plans, on January 31, 2019, in accordance 
with paragraph (c)(1)(i) of this section (referred to in this section 
as the indexed median contracted rate for the anesthesia conversion 
factor). The plan must then multiply the indexed median contracted rate 
for the anesthesia conversion factor by the sum of the base unit, time 
unit, and physical status modifier units of the participant or 
beneficiary to whom anesthesia services are furnished to determine the 
qualifying payment amount.
    (A) The base units for an anesthesia service code are the base 
units for that service code specified in the most recent edition (as of 
the date of service) of the American Society of Anesthesiologists 
Relative Value Guide.
    (B) The time unit is measured in 15-minute increments or a fraction 
thereof.
    (C) The physical status modifier on a claim is a standard modifier 
describing the physical status of the patient and is used to 
distinguish between various levels of complexity of the anesthesia 
services provided, and is expressed as a unit with a value between zero 
(0) and three (3).
    (D) The anesthesia conversion factor is expressed in dollars per 
unit and is a contracted rate negotiated with the plan.
    (iv) For anesthesia services furnished during 2023 or a subsequent 
year, the plan must calculate the qualifying payment amount by first 
increasing the indexed median contracted rate for the anesthesia 
conversion factor, determined under paragraph (c)(1)(iii) of this 
section for such services furnished in the immediately preceding year, 
in accordance with paragraph (c)(1)(ii) of this section. The plan must 
then multiply that amount by the sum of the base unit, time unit, and 
physical status modifier units for the participant or beneficiary to 
whom anesthesia services are furnished to determine the qualifying 
payment amount.
    (v) For air ambulance services billed using the air mileage service 
codes (A0435 and A0436) that are furnished during 2022, the plan must 
calculate the qualifying payment amount for services billed using the 
air mileage service codes by first increasing the median contracted 
rate (as determined in accordance with paragraph (b) of this section), 
in accordance with paragraph (c)(1)(i) of this section (referred to in 
this section as the indexed median air mileage rate). The plan must 
then multiply the indexed median air mileage rate by the number of 
loaded miles provided to the participant or beneficiary to determine 
the qualifying payment amount.
    (A) The air mileage rate is expressed in dollars per loaded mile 
flown, is expressed in statute miles (not nautical miles), and is a 
contracted rate negotiated with the plan.
    (B) The number of loaded miles is the number of miles a patient is 
transported in the air ambulance vehicle.
    (C) The qualifying payment amount for other service codes 
associated with air ambulance services is calculated in accordance with 
paragraphs (c)(1)(i) and (ii) of this section.

[[Page 36956]]

    (vi) For air ambulance services billed using the air mileage 
service codes (A0435 and A0436) that are furnished during 2023 or a 
subsequent year, the plan must calculate the qualifying payment amount 
by first increasing the indexed median air mileage rate, determined 
under paragraph (c)(1)(v) of this section for such services furnished 
in the immediately preceding year, in accordance with paragraph 
(c)(1)(ii) of this section. The plan must then multiply the indexed 
median air mileage rate by the number of loaded miles provided to the 
participant or beneficiary to determine the qualifying payment amount.
    (vii) For any other items or services for which a plan generally 
determines payment for the same or similar items or services by 
multiplying a contracted rate by another unit value, the plan must 
calculate the qualifying payment amount using a methodology that is 
similar to the methodology required under paragraphs (c)(1)(iii) 
through (vi) of this section and reasonably reflects the payment 
methodology for same or similar items or services.
    (2) New plans. With respect to a sponsor of a group health plan in 
a geographic region in which the sponsor did not offer any group health 
plan during 2019--
    (i) For the first year in which the group health plan is offered in 
such region--
    (A) If the plan has sufficient information to calculate the median 
of the contracted rates described in paragraph (b) of this section, the 
plan must calculate the qualifying payment amount in accordance with 
paragraph (c)(1) of this section for items and services that are 
covered by the plan and furnished during the first year; and
    (B) If the plan does not have sufficient information to calculate 
the median of the contracted rates described in paragraph (b) of this 
section for an item or service provided in a geographic region, the 
plan must determine the qualifying payment amount for the item or 
service in accordance with paragraph (c)(3)(i) of this section.
    (ii) For each subsequent year the group health plan is offered in 
the region, the plan must calculate the qualifying payment amount by 
increasing the qualifying payment amount determined under this 
paragraph (c)(2) for the items and services furnished in the 
immediately preceding year, in accordance with paragraph (c)(1)(ii), 
(iv), or (vi) of this section, as applicable.
    (3) Insufficient information; newly covered items and services. In 
the case of a plan that does not have sufficient information to 
calculate the median of the contracted rates described in paragraph (b) 
of this section in 2019 (or, in the case of a newly covered item or 
service, in the first coverage year for such item or service with 
respect to such plan or coverage if the plan does not have sufficient 
information) for an item or service provided in a geographic region--
    (i) For an item or service furnished during 2022 (or, in the case 
of a newly covered item or service, during the first coverage year for 
the item or service with respect to the plan or coverage), the plan 
must calculate the qualifying payment amount by first identifying the 
rate that is equal to the median of the in-network allowed amounts for 
the same or similar item or service provided in the geographic region 
in the year immediately preceding the year in which the item or service 
is furnished (or, in the case of a newly covered item or service, the 
year immediately preceding such first coverage year) determined by the 
plan through use of any eligible database, and then increasing that 
rate by the percentage increase in the CPI-U over such preceding year. 
For purposes of this section, in cases in which an eligible database is 
used to determine the qualifying payment amount with respect to an item 
or service furnished during a calendar year, the plan must use the same 
database for determining the qualifying payment amount for that item or 
service furnished through the last day of the calendar year, and if a 
different database is selected for some items or services, the basis 
for that selection must be one or more factors not directly related to 
the rate of those items or services (such as sufficiency of data for 
those items or services).
    (ii) For an item or service furnished in a subsequent year (before 
the first sufficient information year for such item or service with 
respect to such plan), the plan must calculate the qualifying payment 
amount by increasing the qualifying payment amount determined under 
paragraph (c)(3)(i) of this section or this paragraph (c)(3)(ii), as 
applicable, for such item or service for the year immediately preceding 
such subsequent year, by the percentage increase in CPI-U over such 
preceding year;
    (iii) For an item or service furnished in the first sufficient 
information year for such item or service with respect to such plan, 
the plan must calculate the qualifying payment amount in accordance 
with paragraph (c)(1)(i), (iii), or (v) of this section, as applicable, 
except that in applying such paragraph to such item or service, the 
reference to `furnished during 2022' is treated as a reference to 
furnished during such first sufficient information year, the reference 
to `in 2019' is treated as a reference to such sufficient information 
year, and the increase described in such paragraph is not applied; and
    (iv) For an item or service furnished in any year subsequent to the 
first sufficient information year for such item or service with respect 
to such plan, the plan must calculate the qualifying payment amount in 
accordance with paragraph (c)(1)(ii), (iv), or (vi) of this section, as 
applicable, except that in applying such paragraph to such item or 
service, the reference to `furnished during 2023 or a subsequent year' 
is treated as a reference to furnished during the year after such first 
sufficient information year or a subsequent year.
    (4) New service codes. In the case of a plan that does not have 
sufficient information to calculate the median of the contracted rates 
described in paragraph (b) of this section and determine the qualifying 
payment amount under paragraphs (c)(1) through (3) of this section 
because the item or service furnished is billed under a new service 
code--
    (i) For an item or service furnished during 2022 (or, in the case 
of a newly covered item or service, during the first coverage year for 
the item or service with respect to the plan), the plan must identify a 
reasonably related service code that existed in the immediately 
preceding year and--
    (A) If the Centers for Medicare & Medicaid Services has established 
a Medicare payment rate for the item or service billed under the new 
service code, the plan must calculate the qualifying payment amount by 
first calculating the ratio of the rate that Medicare pays for the item 
or service billed under the new service code compared to the rate that 
Medicare pays for the item or service billed under the related service 
code, and then multiplying the ratio by the qualifying payment amount 
for an item or service billed under the related service code for the 
year in which the item or service is furnished.
    (B) If the Centers for Medicare & Medicaid Services has not 
established a Medicare payment rate for the item or service billed 
under the new service code, the plan must calculate the qualifying 
payment amount by first calculating the ratio of the rate that the plan 
reimburses for the item or service billed under the new service code 
compared to the rate that the plan reimburses for the item or service 
billed under the related service code, and then multiplying the ratio 
by the qualifying

[[Page 36957]]

payment amount for an item or service billed under the related service 
code.
    (ii) For an item or service furnished in a subsequent year (before 
the first sufficient information year for such item or service with 
respect to such plan or coverage or before the first year for which an 
eligible database has sufficient information to a calculate a rate 
under paragraph (c)(3)(i) of this section in the immediately preceding 
year), the plan must calculate the qualifying payment amount by 
increasing the qualifying payment amount determined under paragraph 
(c)(4)(i) of this section or this paragraph (c)(4)(ii), as applicable, 
for such item or service for the year immediately preceding such 
subsequent year, by the percentage increase in CPI-U over such 
preceding year;
    (iii) For an item or service furnished in the first sufficient 
information year for such item or service with respect to such plan or 
the first year for which an eligible database has sufficient 
information to calculate a rate under paragraph (c)(3)(i) of this 
section in the immediately preceding year, the plan or issuer must 
calculate the qualifying payment amount in accordance with paragraph 
(c)(3) of this section.
    (d) Information to be shared about qualifying payment amount. In 
cases in which the recognized amount with respect to an item or service 
furnished by a nonparticipating provider, nonparticipating emergency 
facility, or nonparticipating provider of air ambulance services is the 
qualifying payment amount, the plan must provide in writing, in paper 
or electronic form, to the provider or facility, as applicable--
    (1) With an initial payment or notice of denial of payment under 
Sec.  54.9816-4T, Sec.  54.9816-5T, or Sec.  54.9817-1T:
    (i) The qualifying payment amount for each item or service 
involved;
    (ii) A statement to certify that, based on the determination of the 
plan--
    (A) The qualifying payment amount applies for purposes of the 
recognized amount (or, in the case of air ambulance services, for 
calculating the participant's, beneficiary's, or enrollee's cost 
sharing); and
    (B) Each qualifying payment amount shared with the provider or 
facility was determined in compliance with this section;
    (iii) A statement that if the provider or facility, as applicable, 
wishes to initiate a 30-day open negotiation period for purposes of 
determining the amount of total payment, the provider or facility may 
contact the appropriate person or office to initiate open negotiation, 
and that if the 30-day negotiation period does not result in a 
determination, generally, the provider or facility may initiate the 
independent dispute resolution process within 4 days after the end of 
the open negotiation period; and
    (iv) Contact information, including a telephone number and email 
address, for the appropriate person or office to initiate open 
negotiations for purposes of determining an amount of payment 
(including cost sharing) for such item or service.
    (2) In a timely manner upon request of the provider or facility:
    (i) Information about whether the qualifying payment amount for 
items and services involved included contracted rates that were not on 
a fee-for-service basis for those specific items and services and 
whether the qualifying payment amount for those items and services was 
determined using underlying fee schedule rates or a derived amount;
    (ii) If a plan uses an eligible database under paragraph (c)(3) of 
this section to determine the qualifying payment amount, information to 
identify which database was used; and
    (iii) If a related service code was used to determine the 
qualifying payment amount for an item or service billed under a new 
service code under paragraph (c)(4)(i) or (ii) of this section, 
information to identify the related service code; and
    (iv) If applicable, a statement that the plan's contracted rates 
include risk-sharing, bonus, penalty, or other incentive-based or 
retrospective payments or payment adjustments for the items and 
services involved (as applicable) that were excluded for purposes of 
calculating the qualifying payment amount.
    (e) Certain access fees to databases. In the case of a plan that, 
pursuant to this section, uses an eligible database to determine the 
qualifying payment amount for an item or service, the plan is 
responsible for any costs associated with accessing such database.
    (f) Audits. See 45 CFR 149.140(f) for audit procedures that apply 
with respect to ensuring that a plan is in compliance with the 
requirement of applying a qualifying payment amount under Sec. Sec.  
54.9816-4T, 54.9816-5T, 54.9817-1T, and this section, and ensuring that 
such amount so applied satisfies the requirements under this section, 
as applicable.
    (g) Applicability date. The provisions of this section are 
applicable with respect to plan years beginning on or after January 1, 
2022.


Sec.  54.9816-7T  Complaints process for surprise medical bills 
regarding group health plans (temporary).

    See 45 CFR 149.150 for the process to receive and resolve 
complaints that a specific group health plan may be failing to meet the 
requirement of applying a qualifying payment amount under Sec. Sec.  
54.9816-4T, 54.9816-5T, 54.9816-6T, and 54.9817-1T, which may warrant 
an investigation.


Sec.  54.9817-1T  Preventing surprise medical bills for air ambulance 
services (temporary).

    (a) In general. If a group health plan provides or covers any 
benefits for air ambulance services, the plan must cover such services 
from a nonparticipating provider of air ambulance services in 
accordance with paragraph (b) of this section.
    (b) Coverage requirements. A plan described in paragraph (a) of 
this section must provide coverage of air ambulance services in the 
following manner--
    (1) The cost-sharing requirements with respect to the services must 
be the same requirements that would apply if the services were provided 
by a participating provider of air ambulance services.
    (2) The cost-sharing requirement must be calculated as if the total 
amount that would have been charged for the services by a participating 
provider of air ambulance services were equal to the lesser of the 
qualifying payment amount (as determined in accordance with Sec.  
54.9816-6T) or the billed amount for the services.
    (3) The cost-sharing amounts must be counted towards any in-network 
deductible and in-network out-of-pocket maximums (including the annual 
limitation on cost sharing under section 2707(b) of the Public Health 
Service Act) (as applicable) applied under the plan (and the in-network 
deductible and out-of-pocket maximums must be applied) in the same 
manner as if the cost-sharing payments were made with respect to 
services furnished by a participating provider of air ambulance 
services.
    (4) The plan must--
    (i) Not later than 30 calendar days after the bill for the services 
is transmitted by the provider of air ambulance services, determine 
whether the services are covered under the plan and, if the services 
are covered, send to the provider an initial payment or a notice of 
denial of payment. For purposes of this paragraph (b)(4)(i), the 30-
calendar-day period begins on the date the plan receives the 
information necessary to decide a claim for payment for the services.

[[Page 36958]]

    (ii) Pay a total plan payment directly to the nonparticipating 
provider furnishing such air ambulance services that is equal to the 
amount by which the out-of-network rate for the services exceeds the 
cost-sharing amount for the services (as determined in accordance with 
paragraphs (b)(1) and (2) of this section), less any initial payment 
amount made under paragraph (b)(4)(i) of this section. The total plan 
payment must be made in accordance with the timing requirement 
described in section 9817(b)(6), or in cases where the out-of-network 
rate is determined under a specified State law or All-Payer Model 
Agreement, such other timeframe as specified by the State law or All-
Payer Model Agreement.
    (c) Applicability date. The provisions of this section are 
applicable with respect to plan years beginning on or after January 1, 
2022.


Sec.  54.9822-1T  Choice of health care professional (temporary).

    (a) Choice of health care professional--(1) Designation of primary 
care provider--(i) In general. If a group health plan, requires or 
provides for designation by a participant or beneficiary of a 
participating primary care provider, then the plan must permit each 
participant or beneficiary to designate any participating primary care 
provider who is available to accept the participant or beneficiary. In 
such a case, the plan must comply with the rules of paragraph (a)(4) of 
this section by informing each participant of the terms of the plan 
regarding designation of a primary care provider.
    (ii) Construction. Nothing in paragraph (a)(1)(i) of this section 
is to be construed to prohibit the application of reasonable and 
appropriate geographic limitations with respect to the selection of 
primary care providers, in accordance with the terms of the plan, the 
underlying provider contracts, and applicable State law.
    (iii) Example. The rules of this paragraph (a)(1) are illustrated 
by the following example:
    (A) Facts. A group health plan requires individuals covered under 
the plan to designate a primary care provider. The plan permits each 
individual to designate any primary care provider participating in the 
plan's network who is available to accept the individual as the 
individual's primary care provider. If an individual has not designated 
a primary care provider, the plan designates one until the individual 
has made a designation. The plan provides a notice that satisfies the 
requirements of paragraph (a)(4) of this section regarding the ability 
to designate a primary care provider.
    (B) Conclusion. In this Example, the plan has satisfied the 
requirements of this paragraph (a).
    (2) Designation of pediatrician as primary care provider--(i) In 
general. If a group health plan requires or provides for the 
designation of a participating primary care provider for a child by a 
participant or beneficiary, the plan must permit the participant or 
beneficiary to designate a physician (allopathic or osteopathic) who 
specializes in pediatrics (including pediatric subspecialties, based on 
the scope of that provider's license under applicable State law) as the 
child's primary care provider if the provider participates in the 
network of the plan and is available to accept the child. In such a 
case, the plan must comply with the rules of paragraph (a)(4) of this 
section by informing each participant of the terms of the plan 
regarding designation of a pediatrician as the child's primary care 
provider.
    (ii) Construction. Nothing in paragraph (a)(2)(i) of this section 
is to be construed to waive any exclusions of coverage under the terms 
and conditions of the plan with respect to coverage of pediatric care.
    (iii) Examples. The rules of this paragraph (a)(2) are illustrated 
by the following examples:
    (A) Example 1--(1) Facts. A group health plan's HMO designates for 
each participant a physician who specializes in internal medicine to 
serve as the primary care provider for the participant and any 
beneficiaries. Participant A requests that Pediatrician B be designated 
as the primary care provider for A's child. B is a participating 
provider in the HMO's network and is available to accept the child.
    (2) Conclusion. In this Example 1, the HMO must permit A's 
designation of B as the primary care provider for A's child in order to 
comply with the requirements of this paragraph (a)(2).
    (B) Example 2--(1) Facts. Same facts as Example 1 (paragraph 
(a)(2)(iii)(A) of this section), except that A takes A's child to B for 
treatment of the child's severe shellfish allergies. B wishes to refer 
A's child to an allergist for treatment. The HMO, however, does not 
provide coverage for treatment of food allergies, nor does it have an 
allergist participating in its network, and it therefore refuses to 
authorize the referral.
    (2) Conclusion. In this Example 2, the HMO has not violated the 
requirements of this paragraph (a)(2) because the exclusion of 
treatment for food allergies is in accordance with the terms of A's 
coverage.
    (3) Patient access to obstetrical and gynecological care--(i) 
General rights--(A) Direct access. A group health plan described in 
paragraph (a)(3)(ii) of this section, may not require authorization or 
referral by the plan, or any person (including a primary care provider) 
in the case of a female participant or beneficiary who seeks coverage 
for obstetrical or gynecological care provided by a participating 
health care professional who specializes in obstetrics or gynecology. 
In such a case, the plan must comply with the rules of paragraph (a)(4) 
of this section by informing each participant that the plan may not 
require authorization or referral for obstetrical or gynecological care 
by a participating health care professional who specializes in 
obstetrics or gynecology. The plan may require such a professional to 
agree to otherwise adhere to the plan's policies and procedures, 
including procedures regarding referrals and obtaining prior 
authorization and providing services pursuant to a treatment plan (if 
any) approved by the plan. For purposes of this paragraph (a)(3), a 
health care professional who specializes in obstetrics or gynecology is 
any individual (including a person other than a physician) who is 
authorized under applicable State law to provide obstetrical or 
gynecological care.
    (B) Obstetrical and gynecological care. A group health plan 
described in paragraph (a)(3)(ii) of this section must treat the 
provision of obstetrical and gynecological care, and the ordering of 
related obstetrical and gynecological items and services, pursuant to 
the direct access described under paragraph (a)(3)(i)(A) of this 
section, by a participating health care professional who specializes in 
obstetrics or gynecology as the authorization of the primary care 
provider.
    (ii) Application of paragraph. A group health plan is described in 
this paragraph (a)(3) if the plan--
    (A) Provides coverage for obstetrical or gynecological care; and
    (B) Requires the designation by a participant or beneficiary of a 
participating primary care provider.
    (iii) Construction. Nothing in paragraph (a)(3)(i) of this section 
is to be construed to--
    (A) Waive any exclusions of coverage under the terms and conditions 
of the plan with respect to coverage of obstetrical or gynecological 
care; or
    (B) Preclude the group health plan involved from requiring that the 
obstetrical or gynecological provider notify the primary care health 
care

[[Page 36959]]

professional or the plan of treatment decisions.
    (iv) Examples. The rules of this paragraph (a)(3) are illustrated 
by the following examples:
    (A) Example 1--(1) Facts. A group health plan requires each 
participant to designate a physician to serve as the primary care 
provider for the participant and the participant's family. Participant 
A, a female, requests a gynecological exam with Physician B, an in-
network physician specializing in gynecological care. The group health 
plan requires prior authorization from A's designated primary care 
provider for the gynecological exam.
    (2) Conclusion. In this Example 1, the group health plan has 
violated the requirements of this paragraph (a)(3) because the plan 
requires prior authorization from A's primary care provider prior to 
obtaining gynecological services.
    (B) Example 2--(1) Facts. Same facts as Example 1 (paragraph 
(a)(3)(iv)(A) of this section) except that A seeks gynecological 
services from C, an out-of-network provider.
    (2) Conclusion. In this Example 2, the group health plan has not 
violated the requirements of this paragraph (a)(3) by requiring prior 
authorization because C is not a participating health care provider.
    (C) Example 3--(1) Facts. Same facts as Example 1 (paragraph 
(a)(3)(iv)(A) of this section) except that the group health plan only 
requires B to inform A's designated primary care physician of treatment 
decisions.
    (2) Conclusion. In this Example 3, the group health plan has not 
violated the requirements of this paragraph (a)(3) because A has direct 
access to B without prior authorization. The fact that the group health 
plan requires the designated primary care physician to be notified of 
treatment decisions does not violate this paragraph (a)(3).
    (D) Example 4--(1) Facts. A group health plan requires each 
participant to designate a physician to serve as the primary care 
provider for the participant and the participant's family. The group 
health plan requires prior authorization before providing benefits for 
uterine fibroid embolization.
    (2) Conclusion. In this Example 4, the plan requirement for prior 
authorization before providing benefits for uterine fibroid 
embolization does not violate the requirements of this paragraph (a)(3) 
because, though the prior authorization requirement applies to 
obstetrical services, it does not restrict access to any providers 
specializing in obstetrics or gynecology.
    (4) Notice of right to designate a primary care provider--(i) In 
general. If a group health plan requires the designation by a 
participant or beneficiary of a primary care provider, the plan must 
provide a notice informing each participant of the terms of the plan 
regarding designation of a primary care provider and of the rights--
    (A) Under paragraph (a)(1)(i) of this section, that any 
participating primary care provider who is available to accept the 
participant or beneficiary can be designated;
    (B) Under paragraph (a)(2)(i) of this section, with respect to a 
child, that any participating physician who specializes in pediatrics 
can be designated as the primary care provider; and
    (C) Under paragraph (a)(3)(i) of this section, that the plan may 
not require authorization or referral for obstetrical or gynecological 
care by a participating health care professional who specializes in 
obstetrics or gynecology.
    (ii) Timing. In the case of a group health plan, the notice 
described in paragraph (a)(4)(i) of this section must be included 
whenever the plan provides a participant with a summary plan 
description or other similar description of benefits under the plan.
    (iii) Model language. The following model language can be used to 
satisfy the notice requirement described in paragraph (a)(4)(i) of this 
section:
    (A) For plans that require or allow for the designation of primary 
care providers by participants or beneficiaries, insert:

    [Name of group health plan] generally [requires/allows] the 
designation of a primary care provider. You have the right to 
designate any primary care provider who participates in our network 
and who is available to accept you or your family members. [If the 
plan designates a primary care provider automatically, insert: Until 
you make this designation, [name of group health plan] designates 
one for you.] For information on how to select a primary care 
provider, and for a list of the participating primary care 
providers, contact the [plan administrator] at [insert contact 
information].

    (B) For plans that require or allow for the designation of a 
primary care provider for a child, add:
    For children, you may designate a pediatrician as the primary care 
provider.
    (C) For plans that provide coverage for obstetric or gynecological 
care and require the designation by a participant or beneficiary of a 
primary care provider, add:

    You do not need prior authorization from [name of group health 
plan] or from any other person (including a primary care provider) 
in order to obtain access to obstetrical or gynecological care from 
a health care professional in our network who specializes in 
obstetrics or gynecology. The health care professional, however, may 
be required to comply with certain procedures, including obtaining 
prior authorization for certain services, following a pre-approved 
treatment plan, or procedures for making referrals. For a list of 
participating health care professionals who specialize in obstetrics 
or gynecology, contact the [plan administrator] at [insert contact 
information].

    (b) Applicability date. The provisions of this section are 
applicable with respect to plan years beginning on or after January 1, 
2022.

Department of Labor

Employee Benefits Security Administration

29 CFR Chapter XXV

    For the reasons set forth in the preamble, the Department of Labor 
amends 29 CFR part 2590 as set forth below:

PART 2590--RULES AND REGULATIONS FOR GROUP HEALTH PLANS.

0
9. The authority citation for part 2590 is revised to read as follows:

    Authority:  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; 
Division M, Pub. L. 113-235, 128 Stat. 2130; Pub. L. 116-260 134 
Stat. 1182; Secretary of Labor's Order 1-2011, 77 FR 1088 (Jan. 9, 
2012).


0
10. Section 2590.715-2719A is amended by revising paragraph (c) to read 
as follows:


Sec.  2590.715-2719A  Patient protections.

* * * * *
    (c) Applicability date. The provisions of this section are 
applicable to group health plans and health insurance issuers for plan 
years beginning before January 1, 2022. See also Sec. Sec.  2590.716-4 
through 2590.716-7, 2590.717-1, and 2590.722 of this part for rules 
applicable with respect to plan years beginning on or after January 1, 
2022.

Subpart D [Redesignated as Subpart E]

0
11. Redesignate subpart D as subpart E and add a new subpart D to read 
as follows:

[[Page 36960]]

Subpart D--Surprise Billing and Transparency Requirements

Sec.
2590.716-1 Basis and scope.
2590.716-2 Applicability.
2590.716-3 Definitions.
2590.716-4 Preventing surprise medical bills for emergency services.
2590.716-5 Preventing surprise medical bills for non-emergency 
services performed by nonparticipating providers at certain 
participating facilities.
2590.716-6 Methodology for calculating qualifying payment amount.
2590.716-7 Complaints process for surprise medical bills regarding 
group health plans and group health insurance coverage.
2590.717-1 Preventing surprise medical bills for air ambulance 
services.
2590.722 Choice of health care professional.

Subpart D--Surprise Billing and Transparency Requirements


Sec.  2590.716-1  Basis and scope.

    (a) Basis. Sections 2590.716-1 through 2590.722 implement section 
716-722 of ERISA.
    (b) Scope. This part establishes standards for group health plans 
and health insurance issuers offering group health insurance coverage 
with respect to surprise medical bills, transparency in health care 
coverage, and additional patient protections.


Sec.  2590.716-2  Applicability.

    (a) In general. The requirements in Sec. Sec.  2590.716-4 through 
2590.716-7, 2590.717-1, and 2590.722 apply to group health plans and 
health insurance issuers offering group health insurance coverage 
(including grandfathered health plans as defined in Sec.  2590.715-
1251), except as specified in paragraph (b) of this section.
    (b) Exceptions. The requirements in Sec. Sec.  2590.716-4 through 
2590.716-7, 2590.717-1, and 2590.722 do not apply to the following:
    (1) Excepted benefits as described in Sec.  2590.732.
    (2) Short-term, limited-duration insurance as defined in Sec.  
2590.701-2.
    (3) Health reimbursement arrangements or other account-based group 
health plans as described in Sec.  2590.715-2711(d).


Sec.  2590.716-3  Definitions.

    The definitions in this part apply to Sec. Sec.  2590.716 through 
2590.722, unless otherwise specified. In addition, for purposes of 
Sec. Sec.  2590.716 through 2590.722, the following definitions apply:
    Air ambulance service means medical transport by a rotary wing air 
ambulance, as defined in 42 CFR 414.605, or fixed wing air ambulance, 
as defined in 42 CFR 414.605, for patients.
    Cost sharing means the amount a participant or beneficiary is 
responsible for paying for a covered item or service under the terms of 
the group health plan or health insurance coverage. Cost sharing 
generally includes copayments, coinsurance, and amounts paid towards 
deductibles, but does not include amounts paid towards premiums, 
balance billing by out-of-network providers, or the cost of items or 
services that are not covered under a group health plan or health 
insurance coverage.
    Emergency department of a hospital includes a hospital outpatient 
department that provides emergency services.
    Emergency medical condition has the meaning given the term in Sec.  
2590.716-4(c)(1).
    Emergency services has the meaning given the term in Sec.  
2590.716-4(c)(2).
    Health care facility, with respect to a group health plan or group 
health insurance coverage, in the context of non-emergency services, is 
each of the following:
    (1) A hospital (as defined in section 1861(e) of the Social 
Security Act);
    (2) A hospital outpatient department;
    (3) A critical access hospital (as defined in section 1861(mm)(1) 
of the Social Security Act); and
    (4) An ambulatory surgical center described in section 
1833(i)(1)(A) of the Social Security Act.
    Independent freestanding emergency department means a health care 
facility (not limited to those described in the definition of health 
care facility with respect to non-emergency services) that--
    (1) Is geographically separate and distinct and licensed separately 
from a hospital under applicable State law; and
    (2) Provides any emergency services as described in Sec.  2590.716-
4(c)(2)(i).
    Nonparticipating emergency facility means an emergency department 
of a hospital, or an independent freestanding emergency department (or 
a hospital, with respect to services that pursuant to Sec.  2590.716-
4(c)(2)(ii) are included as emergency services), that does not have a 
contractual relationship directly or indirectly with a group health 
plan or group health insurance coverage offered by a health insurance 
issuer, with respect to the furnishing of an item or service under the 
plan or coverage, respectively.
    Nonparticipating provider means any physician or other health care 
provider who does not have a contractual relationship directly or 
indirectly with a group health plan or group health insurance coverage 
offered by a health insurance issuer, with respect to the furnishing of 
an item or service under the plan or coverage, respectively.
    Notice of denial of payment means, with respect to an item or 
service for which benefits subject to the protections of Sec. Sec.  
2590.716-4, 2590.716-5, and 2590.717-1 are provided or covered, a 
written notice from the plan or issuer to the health care provider, 
facility, or provider of air ambulance services, as applicable, that 
payment for such item or service will not be made by the plan or 
coverage and which explains the reason for denial. The term notice of 
denial of payment does not include a notice of benefit denial due to an 
adverse benefit determination as defined in Sec.  2560.503-1 of this 
chapter.
    Out-of-network rate means, with respect to an item or service 
furnished by a nonparticipating provider, nonparticipating emergency 
facility, or nonparticipating provider of air ambulance services--
    (1) Subject to paragraph (3) of this definition, in a State that 
has in effect a specified State law, the amount determined in 
accordance with such law;
    (2) Subject to paragraph (3) of this definition, in a State that 
does not have in effect a specified State law--
    (i) Subject to paragraph (2)(ii) of this definition, if the 
nonparticipating provider or nonparticipating emergency facility and 
the plan or issuer agree on an amount of payment (including if the 
amount agreed upon is the initial payment sent by the plan or issuer 
under 26 CFR 54.9816-4T(b)(3)(iv)(A), 54.9816-5T(c)(3), or 54.9817-
1T(b)(4)(i); Sec.  2590.716-4(b)(3)(iv)(A), Sec.  2590.716-5(c)(3), or 
Sec.  2590.717-1(b)(4)(i); or 45 CFR 149.110(b)(3)(iv)(A), 
149.120(c)(3), or 149.130(b)(4)(i), as applicable, or is agreed on 
through negotiations with respect to such item or service), such agreed 
on amount; or
    (ii) If the nonparticipating provider or nonparticipating emergency 
facility and the plan or issuer enter into the independent dispute 
resolution (IDR) process under section 9816(c) or 9817(b) of the 
Internal Revenue Code, section 716(c) or 717(b) of ERISA, or section 
2799A-1(c) or 2799A-2(b) of the PHS Act, as applicable, and do not 
agree before the date on which a certified IDR entity makes a 
determination with respect to such item or service under such 
subsection, the amount of such determination; or
    (3) In a State that has an All-Payer Model Agreement under section 
1115A of the Social Security Act that applies with respect to the plan 
or issuer; the nonparticipating provider or

[[Page 36961]]

nonparticipating emergency facility; and the item or service, the 
amount that the State approves under the All-Payer Model Agreement for 
the item or service.
    Participating emergency facility means any emergency department of 
a hospital, or an independent freestanding emergency department (or a 
hospital, with respect to services that pursuant to Sec.  2590.716-
4(c)(2)(ii) are included as emergency services), that has a contractual 
relationship directly or indirectly with a group health plan or health 
insurance issuer offering group health insurance coverage setting forth 
the terms and conditions on which a relevant item or service is 
provided to a participant or beneficiary under the plan or coverage, 
respectively. A single case agreement between an emergency facility and 
a plan or issuer that is used to address unique situations in which a 
participant or beneficiary requires services that typically occur out-
of-network constitutes a contractual relationship for purposes of this 
definition, and is limited to the parties to the agreement.
    Participating health care facility means any health care facility 
described in this section that has a contractual relationship directly 
or indirectly with a group health plan or health insurance issuer 
offering group health insurance coverage setting forth the terms and 
conditions on which a relevant item or service is provided to a 
participant or beneficiary under the plan or coverage, respectively. A 
single case agreement between a health care facility and a plan or 
issuer that is used to address unique situations in which a participant 
or beneficiary requires services that typically occur out-of-network 
constitutes a contractual relationship for purposes of this definition, 
and is limited to the parties to the agreement.
    Participating provider means any physician or other health care 
provider who has a contractual relationship directly or indirectly with 
a group health plan or health insurance issuer offering group health 
insurance coverage setting forth the terms and conditions on which a 
relevant item or service is provided to a participant or beneficiary 
under the plan or coverage, respectively.
    Physician or health care provider means a physician or other health 
care provider who is acting within the scope of practice of that 
provider's license or certification under applicable State law, but 
does not include a provider of air ambulance services.
    Provider of air ambulance services means an entity that is licensed 
under applicable State and Federal law to provide air ambulance 
services.
    Same or similar item or service has the meaning given the term in 
Sec.  2590.716-6(a)(13).
    Service code has the meaning given the term in Sec.  2590.716-
6(a)(14).
    Qualifying payment amount has the meaning given the term in Sec.  
2590.716-6(a)(16).
    Recognized amount means, with respect to an item or service 
furnished by a nonparticipating provider or nonparticipating emergency 
facility--
    (1) Subject to paragraph (3) of this definition, in a State that 
has in effect a specified State law, the amount determined in 
accordance with such law.
    (2) Subject to paragraph (3) of this definition, in a State that 
does not have in effect a specified State law, the lesser of--
    (i) The amount that is the qualifying payment amount (as determined 
in accordance with Sec.  2590.716-6); or
    (ii) The amount billed by the provider or facility.
    (3) In a State that has an All-Payer Model Agreement under section 
1115A of the Social Security Act that applies with respect to the plan 
or issuer; the nonparticipating provider or nonparticipating emergency 
facility; and the item or service, the amount that the State approves 
under the All-Payer Model Agreement for the item or service.
    Specified State law means a State law that provides for a method 
for determining the total amount payable under a group health plan or 
group health insurance coverage offered by a health insurance issuer to 
the extent such State law applies for an item or service furnished by a 
nonparticipating provider or nonparticipating emergency facility 
(including where it applies because the State has allowed a plan that 
is not otherwise subject to applicable State law an opportunity to opt 
in, subject to section 514 of ERISA). A group health plan that opts 
into such a specified State law must do so for all items and services 
to which the specified State law applies and in a manner determined by 
the applicable State authority, and must prominently display in its 
plan materials describing the coverage of out-of-network services a 
statement that the plan has opted into the specified State law, 
identify the relevant State (or States), and include a general 
description of the items and services provided by nonparticipating 
facilities and providers that are covered by the specified State law.
    State means each of the 50 States, the District of Columbia, Puerto 
Rico, the Virgin Islands, Guam, American Samoa, and the Northern 
Mariana Islands.
    Treating provider is a physician or health care provider who has 
evaluated the individual.
    Visit, with respect to items and services furnished to an 
individual at a health care facility, includes, in addition to items 
and services furnished by a provider at the facility, equipment and 
devices, telemedicine services, imaging services, laboratory services, 
and preoperative and postoperative services, regardless of whether the 
provider furnishing such items or services is at the facility.


Sec.  2590.716-4  Preventing surprise medical bills for emergency 
services.

    (a) In general. If a group health plan, or a health insurance 
issuer offering group health insurance coverage, provides or covers any 
benefits with respect to services in an emergency department of a 
hospital or with respect to emergency services in an independent 
freestanding emergency department, the plan or issuer must cover 
emergency services, as defined in paragraph (c)(2) of this section, and 
this coverage must be provided in accordance with paragraph (b) of this 
section.
    (b) Coverage requirements. A plan or issuer described in paragraph 
(a) of this section must provide coverage for emergency services in the 
following manner--
    (1) Without the need for any prior authorization determination, 
even if the services are provided on an out-of-network basis.
    (2) Without regard to whether the health care provider furnishing 
the emergency services is a participating provider or a participating 
emergency facility, as applicable, with respect to the services.
    (3) If the emergency services are provided by a nonparticipating 
provider or a nonparticipating emergency facility--
    (i) Without imposing any administrative requirement or limitation 
on coverage that is more restrictive than the requirements or 
limitations that apply to emergency services received from 
participating providers and participating emergency facilities.
    (ii) Without imposing cost-sharing requirements that are greater 
than the requirements that would apply if the services were provided by 
a participating provider or a participating emergency facility.
    (iii) By calculating the cost-sharing requirement as if the total 
amount that would have been charged for the services by such 
participating provider

[[Page 36962]]

or participating emergency facility were equal to the recognized amount 
for such services.
    (iv) The plan or issuer--
    (A) Not later than 30 calendar days after the bill for the services 
is transmitted by the provider or facility (or, in cases where the 
recognized amount is determined by a specified State law or All-Payer 
Model Agreement, such other timeframe as specified by the State law or 
All-Payer Model Agreement), determines whether the services are covered 
under the plan or coverage and, if the services are covered, sends to 
the provider or facility, as applicable, an initial payment or a notice 
of denial of payment. For purposes of this paragraph (b)(3)(iv)(A), the 
30-calendar-day period begins on the date the plan or issuer receives 
the information necessary to decide a claim for payment for the 
services.
    (B) Pays a total plan or coverage payment directly to the 
nonparticipating provider or nonparticipating facility that is equal to 
the amount by which the out-of-network rate for the services exceeds 
the cost-sharing amount for the services (as determined in accordance 
with paragraphs (b)(3)(ii) and (iii) of this section), less any initial 
payment amount made under paragraph (b)(3)(iv)(A) of this section. The 
total plan or coverage payment must be made in accordance with the 
timing requirement described in section 716(c)(6) of ERISA, or in cases 
where the out-of-network rate is determined under a specified State law 
or All-Payer Model Agreement, such other timeframe as specified by the 
State law or All-Payer Model Agreement.
    (v) By counting any cost-sharing payments made by the participant 
or beneficiary with respect to the emergency services toward any in-
network deductible or in-network out-of-pocket maximums (including the 
annual limitation on cost sharing under section 2707(b) of the PHS Act) 
(as applicable) applied under the plan or coverage (and the in-network 
deductible and in-network out-of-pocket maximums must be applied) in 
the same manner as if the cost-sharing payments were made with respect 
to emergency services furnished by a participating provider or a 
participating emergency facility.
    (4) Without limiting what constitutes an emergency medical 
condition (as defined in paragraph (c)(1) of this section) solely on 
the basis of diagnosis codes.
    (5) Without regard to any other term or condition of the coverage, 
other than--
    (i) The exclusion or coordination of benefits (to the extent not 
inconsistent with benefits for an emergency medical condition, as 
defined in paragraph (c)(1) of this section).
    (ii) An affiliation or waiting period (each as defined in Sec.  
2590.701-2).
    (iii) Applicable cost sharing.
    (c) Definitions. In this section--
    (1) Emergency medical condition means a medical condition, 
including a mental health condition or substance use disorder, 
manifesting itself by acute symptoms of sufficient severity (including 
severe pain) such that a prudent layperson, who possesses an average 
knowledge of health and medicine, could reasonably expect the absence 
of immediate medical attention to result in a condition described in 
clause (i), (ii), or (iii) of section 1867(e)(1)(A) of the Social 
Security Act (42 U.S.C. 1395dd(e)(1)(A)). (In that provision of the 
Social Security Act, clause (i) refers to placing the health of the 
individual (or, with respect to a pregnant woman, the health of the 
woman or her unborn child) in serious jeopardy; clause (ii) refers to 
serious impairment to bodily functions; and clause (iii) refers to 
serious dysfunction of any bodily organ or part.)
    (2) Emergency services means, with respect to an emergency medical 
condition--
    (i) In general. (A) An appropriate medical screening examination 
(as required under section 1867 of the Social Security Act (42 U.S.C. 
1395dd) or as would be required under such section if such section 
applied to an independent freestanding emergency department) that is 
within the capability of the emergency department of a hospital or of 
an independent freestanding emergency department, as applicable, 
including ancillary services routinely available to the emergency 
department to evaluate such emergency medical condition; and
    (B) Within the capabilities of the staff and facilities available 
at the hospital or the independent freestanding emergency department, 
as applicable, such further medical examination and treatment as are 
required under section 1867 of the Social Security Act (42 U.S.C. 
1395dd), or as would be required under such section if such section 
applied to an independent freestanding emergency department, to 
stabilize the patient (regardless of the department of the hospital in 
which such further examination or treatment is furnished).
    (ii) Inclusion of additional services. (A) Subject to paragraph 
(c)(2)(ii)(B) of this section, items and services--
    (1) For which benefits are provided or covered under the plan or 
coverage; and
    (2) That are furnished by a nonparticipating provider or 
nonparticipating emergency facility (regardless of the department of 
the hospital in which such items or services are furnished) after the 
participant or beneficiary is stabilized and as part of outpatient 
observation or an inpatient or outpatient stay with respect to the 
visit in which the services described in paragraph (c)(2)(i) of this 
section are furnished.
    (B) Items and services described in paragraph (c)(2)(ii)(A) of this 
section are not included as emergency services if all of the conditions 
in 45 CFR 149.410(b) are met.
    (3) To stabilize, with respect to an emergency medical condition, 
has the meaning given such term in section 1867(e)(3) of the Social 
Security Act (42 U.S.C. 1395dd(e)(3)).
    (d) Applicability date. The provisions of this section are 
applicable with respect to plan years beginning on or after January 1, 
2022.


Sec.  2590.716-5  Preventing surprise medical bills for non-emergency 
services performed by nonparticipating providers at certain 
participating facilities.

    (a) In general. If a group health plan, or a health insurance 
issuer offering group health insurance coverage, provides or covers any 
benefits with respect to items and services described in paragraph (b) 
of this section, the plan or issuer must cover the items and services 
when furnished by a nonparticipating provider in accordance with 
paragraph (c) of this section.
    (b) Items and services described. The items and services described 
in this paragraph (b) are items and services (other than emergency 
services) furnished to a participant or beneficiary by a 
nonparticipating provider with respect to a visit at a participating 
health care facility, unless the provider has satisfied the notice and 
consent criteria of 45 CFR 149.420(c) through (i) with respect to such 
items and services.
    (c) Coverage requirements. In the case of items and services 
described in paragraph (b) of this section, the plan or issuer--
    (1) Must not impose a cost-sharing requirement for the items and 
services that is greater than the cost-sharing requirement that would 
apply if the items or services had been furnished by a participating 
provider.
    (2) Must calculate the cost-sharing requirements as if the total 
amount that would have been charged for the items and services by such 
participating provider were equal to the recognized amount for the 
items and services.
    (3) Not later than 30 calendar days after the bill for the items or 
services is

[[Page 36963]]

transmitted by the provider (or in cases where the recognized amount is 
determined by a specified State law or All-Payer Model Agreement, such 
other timeframe as specified under the State law or All-Payer Model 
Agreement), must determine whether the items and services are covered 
under the plan or coverage and, if the items and services are covered, 
send to the provider an initial payment or a notice of denial of 
payment. For purposes of this paragraph (c)(3), the 30-calendar-day 
period begins on the date the plan or issuer receives the information 
necessary to decide a claim for payment for the items or services.
    (4) Must pay a total plan or coverage payment directly to the 
nonparticipating provider that is equal to the amount by which the out-
of-network rate for the items and services involved exceeds the cost-
sharing amount for the items and services (as determined in accordance 
with paragraphs (c)(1) and (2) of this section), less any initial 
payment amount made under paragraph (c)(3) of this section. The total 
plan or coverage payment must be made in accordance with the timing 
requirement described in section 716(c)(6) of ERISA, or in cases where 
the out-of-network rate is determined under a specified State law or 
All-Payer Model Agreement, such other timeframe as specified by the 
State law or All-Payer Model Agreement.
    (5) Must count any cost-sharing payments made by the participant or 
beneficiary toward any in-network deductible and in-network out-of-
pocket maximums (including the annual limitation on cost sharing under 
section 2707(b) of the PHS Act) (as applicable) applied under the plan 
or coverage (and the in-network deductible and out-of-pocket maximums 
must be applied) in the same manner as if such cost-sharing payments 
were made with respect to items and services furnished by a 
participating provider.
    (d) Applicability date. The provisions of this section are 
applicable with respect to plan years beginning on or after January 1, 
2022.


Sec.  2590.716-6  Methodology for calculating qualifying payment 
amount.

    (a) Definitions. For purposes of this section, the following 
definitions apply:
    (1) Contracted rate means the total amount (including cost sharing) 
that a group health plan or health insurance issuer has contractually 
agreed to pay a participating provider, facility, or provider of air 
ambulance services for covered items and services, whether directly or 
indirectly, including through a third-party administrator or pharmacy 
benefit manager. Solely for purposes of this definition, a single case 
agreement, letter of agreement, or other similar arrangement between a 
provider, facility, or air ambulance provider and a plan or issuer, 
used to supplement the network of the plan or coverage for a specific 
participant or beneficiary in unique circumstances, does not constitute 
a contract.
    (2) Derived amount has the meaning given the term in Sec.  
2590.715-2715A1.
    (3) Eligible database means--
    (i) A State all-payer claims database; or
    (ii) Any third-party database which--
    (A) Is not affiliated with, or owned or controlled by, any health 
insurance issuer, or a health care provider, facility, or provider of 
air ambulance services (or any member of the same controlled group as, 
or under common control with, such an entity). For purposes of this 
paragraph (a)(3)(ii)(A), the term controlled group means a group of two 
or more persons that is treated as a single employer under sections 
52(a), 52(b), 414(m), or 414(o) of the Internal Revenue Code of 1986, 
as amended;
    (B) Has sufficient information reflecting in-network amounts paid 
by group health plans or health insurance issuers offering group health 
insurance coverage to providers, facilities, or providers of air 
ambulance services for relevant items and services furnished in the 
applicable geographic region; and
    (C) Has the ability to distinguish amounts paid to participating 
providers and facilities by commercial payers, such as group health 
plans and health insurance issuers offering group health insurance 
coverage, from all other claims data, such as amounts billed by 
nonparticipating providers or facilities and amounts paid by public 
payers, including the Medicare program under title XVIII of the Social 
Security Act, the Medicaid program under title XIX of the Social 
Security Act (or a demonstration project under title XI of the Social 
Security Act), or the Children's Health Insurance Program under title 
XXI of the Social Security Act.
    (4) Facility of the same or similar facility type means, with 
respect to emergency services, either--
    (i) An emergency department of a hospital; or
    (ii) An independent freestanding emergency department.
    (5) First coverage year means, with respect to an item or service 
for which coverage is not offered in 2019 under a group health plan or 
group health insurance coverage offered by a health insurance issuer, 
the first year after 2019 for which coverage for such item or service 
is offered under that plan or coverage.
    (6) First sufficient information year means, with respect to a 
group health plan or group health insurance coverage offered by a 
health insurance issuer--
    (i) In the case of an item or service for which the plan or 
coverage does not have sufficient information to calculate the median 
of the contracted rates described in paragraph (b) of this section in 
2019, the first year after 2022 for which the plan or issuer has 
sufficient information to calculate the median of such contracted rates 
in the year immediately preceding that first year after 2022; and
    (ii) In the case of a newly covered item or service, the first year 
after the first coverage year for such item or service with respect to 
such plan or coverage for which the plan or issuer has sufficient 
information to calculate the median of the contracted rates described 
in paragraph (b) of this section in the year immediately preceding that 
first year.
    (7) Geographic region means--
    (i) For items and services other than air ambulance services--
    (A) Subject to paragraphs (a)(7)(i)(B) and (C) of this section, one 
region for each metropolitan statistical area, as described by the U.S. 
Office of Management and Budget and published by the U.S. Census 
Bureau, in a State, and one region consisting of all other portions of 
the State.
    (B) If a plan or issuer does not have sufficient information to 
calculate the median of the contracted rates described in paragraph (b) 
of this section for an item or service provided in a geographic region 
described in paragraph (a)(7)(i)(A) of this section, one region 
consisting of all metropolitan statistical areas, as described by the 
U.S. Office of Management and Budget and published by the U.S. Census 
Bureau, in the State, and one region consisting of all other portions 
of the State.
    (C) If a plan or issuer does not have sufficient information to 
calculate the median of the contracted rates described in paragraph (b) 
of this section for an item or service provided in a geographic region 
described in paragraph (a)(7)(i)(B) of this section, one region 
consisting of all metropolitan statistical areas, as described by the 
U.S. Office of Management and Budget and published by the U.S. Census 
Bureau, in each Census division and one region consisting of all other 
portions of the Census division, as described by the U.S. Census 
Bureau.
    (ii) For air ambulance services--
    (A) Subject to paragraph (a)(7)(ii)(B) of this section, one region 
consisting of all metropolitan statistical areas, as described by the 
U.S. Office of

[[Page 36964]]

Management and Budget and published by the U.S. Census Bureau, in the 
State, and one region consisting of all other portions of the State, 
determined based on the point of pick-up (as defined in 42 CFR 
414.605).
    (B) If a plan or issuer does not have sufficient information to 
calculate the median of the contracted rates described in paragraph (b) 
of this section for an air ambulance service provided in a geographic 
region described in paragraph (a)(7)(ii)(A) of this section, one region 
consisting of all metropolitan statistical areas, as described by the 
U.S. Office of Management and Budget and published by the U.S. Census 
Bureau, in each Census division and one region consisting of all other 
portions of the Census division, as described by the U.S. Census 
Bureau, determined based on the point of pick-up (as defined in 42 CFR 
414.605).
    (8) Insurance market is, irrespective of the State, one of the 
following:
    (i) The individual market (other than short-term, limited-duration 
insurance or individual health insurance coverage that consists solely 
of excepted benefits).
    (ii) The large group market (other than coverage that consists 
solely of excepted benefits).
    (iii) The small group market (other than coverage that consists 
solely of excepted benefits).
    (iv) In the case of a self-insured group health plan, all self-
insured group health plans (other than account-based plans, as defined 
in Sec.  2590.715-2711(d)(6)(i), and plans that consist solely of 
excepted benefits) of the same plan sponsor, or at the option of the 
plan sponsor, all self-insured group health plans administered by the 
same entity (including a third-party administrator contracted by the 
plan), to the extent otherwise permitted by law, that is responsible 
for calculating the qualifying payment amount on behalf of the plan.
    (9) Modifiers mean codes applied to the service code that provide a 
more specific description of the furnished item or service and that may 
adjust the payment rate or affect the processing or payment of the code 
billed.
    (10) Newly covered item or service means an item or service for 
which coverage was not offered in 2019 under a group health plan or 
group health insurance coverage offered by a health insurance issuer, 
but that is offered under the plan or coverage in a year after 2019.
    (11) New service code means a service code that was created or 
substantially revised in a year after 2019.
    (12) Provider in the same or similar specialty means the practice 
specialty of a provider, as identified by the plan or issuer consistent 
with the plan's or issuer's usual business practice, except that, with 
respect to air ambulance services, all providers of air ambulance 
services are considered to be a single provider specialty.
    (13) Same or similar item or service means a health care item or 
service billed under the same service code, or a comparable code under 
a different procedural code system.
    (14) Service code means the code that describes an item or service 
using the Current Procedural Terminology (CPT) code, Healthcare Common 
Procedure Coding System (HCPCS), or Diagnosis-Related Group (DRG) 
codes.
    (15) Sufficient information means, for purposes of determining 
whether a group health plan or health insurance issuer offering group 
health insurance coverage has sufficient information to calculate the 
median of the contracted rates described in paragraph (b) of this 
section--
    (i) The plan or issuer has at least three contracted rates on 
January 31, 2019, to calculate the median of the contracted rates in 
accordance with paragraph (b) of this section; or
    (ii) For an item or service furnished during a year after 2022 that 
is used to determine the first sufficient information year--
    (A) The plan or issuer has at least three contracted rates on 
January 31 of the year immediately preceding that year to calculate the 
median of the contracted rates in accordance with paragraph (b) of this 
section; and
    (B) The contracted rates under paragraph (a)(15)(ii)(A) of this 
section account (or are reasonably expected to account) for at least 25 
percent of the total number of claims paid for that item or service for 
that year with respect to all plans of the sponsor (or the 
administering entity as provided in paragraph (a)(8)(iv) of this 
section, if applicable) or all coverage offered by the issuer that are 
offered in the same insurance market.
    (16) Qualifying payment amount means, with respect to a sponsor of 
a group health plan or health insurance issuer offering group health 
insurance coverage, the amount calculated using the methodology 
described in paragraph (c) of this section.
    (17) Underlying fee schedule rate means the rate for a covered item 
or service from a particular participating provider, providers, or 
facility that a group health plan or health insurance issuer uses to 
determine a participant's or beneficiary's cost-sharing liability for 
the item or service, when that rate is different from the contracted 
rate.
    (b) Methodology for calculation of median contracted rate--(1) In 
general. The median contracted rate for an item or service is 
calculated by arranging in order from least to greatest the contracted 
rates of all group health plans of the plan sponsor (or the 
administering entity as provided in paragraph (a)(8)(iv) of this 
section, if applicable) or all group health insurance coverage offered 
by the issuer in the same insurance market for the same or similar item 
or service that is provided by a provider in the same or similar 
specialty or facility of the same or similar facility type and provided 
in the geographic region in which the item or service is furnished and 
selecting the middle number. If there are an even number of contracted 
rates, the median contracted rate is the average of the middle two 
contracted rates. In determining the median contracted rate, the amount 
negotiated under each contract is treated as a separate amount. If a 
plan or issuer has a contract with a provider group or facility, the 
rate negotiated with that provider group or facility under the contract 
is treated as a single contracted rate if the same amount applies with 
respect to all providers of such provider group or facility under the 
single contract. However, if a plan or issuer has a contract with 
multiple providers, with separate negotiated rates with each particular 
provider, each unique contracted rate with an individual provider 
constitutes a single contracted rate. Further, if a plan or issuer has 
separate contracts with individual providers, the contracted rate under 
each such contract constitutes a single contracted rate (even if the 
same amount is paid to multiple providers under separate contracts).
    (2) Calculation rules. In calculating the median contracted rate, a 
plan or issuer must:
    (i) Calculate the median contracted rate with respect to all plans 
of such sponsor (or the administering entity as provided in paragraph 
(a)(8)(iv) of this section, if applicable) or all coverage offered by 
such issuer that are offered in the same insurance market;
    (ii) Calculate the median contracted rate using the full contracted 
rate applicable to the service code, except that the plan or issuer 
must--
    (A) Calculate separate median contracted rates for CPT code 
modifiers ``26'' (professional component) and ``TC'' (technical 
component);
    (B) For anesthesia services, calculate a median contracted rate for 
the

[[Page 36965]]

anesthesia conversion factor for each service code;
    (C) For air ambulance services, calculate a median contracted rate 
for the air mileage service codes (A0435 and A0436); and
    (D) Where contracted rates otherwise vary based on applying a 
modifier code, calculate a separate median contracted rate for each 
such service code-modifier combination;
    (iii) In the case of payments made by a plan or issuer that are not 
on a fee-for-service basis (such as bundled or capitation payments), 
calculate a median contracted rate for each item or service using the 
underlying fee schedule rates for the relevant items or services. If 
the plan or issuer does not have an underlying fee schedule rate for 
the item or service, it must use the derived amount to calculate the 
median contracted rate; and
    (iv) Exclude risk sharing, bonus, penalty, or other incentive-based 
or retrospective payments or payment adjustments.
    (3) Provider specialties; facility types. (i) If a plan or issuer 
has contracted rates that vary based on provider specialty for a 
service code, the median contracted rate is calculated separately for 
each provider specialty, as applicable.
    (ii) If a plan or issuer has contracted rates for emergency 
services that vary based on facility type for a service code, the 
median contracted rate is calculated separately for each facility of 
the same or similar facility type.
    (c) Methodology for calculation of the qualifying payment amount--
(1) In general. (i) For an item or service (other than items or 
services described in paragraphs (c)(1)(iii) through (vii) of this 
section) furnished during 2022, the plan or issuer must calculate the 
qualifying payment amount by increasing the median contracted rate (as 
determined in accordance with paragraph (b) of this section) for the 
same or similar item or service under such plans or coverage, 
respectively, on January 31, 2019, by the combined percentage increase 
as published by the Department of the Treasury and the Internal Revenue 
Service to reflect the percentage increase in the CPI-U over 2019, such 
percentage increase over 2020, and such percentage increase over 2021.
    (A) The combined percentage increase for 2019, 2020, and 2021 will 
be published in guidance by the Internal Revenue Service. The 
Department of the Treasury and the Internal Revenue Service will 
calculate the percentage increase using the CPI-U published by the 
Bureau of Labor Statistics of the Department of Labor.
    (B) For purposes of this paragraph (c)(1)(i), the CPI-U for each 
calendar year is the average of the CPI-U as of the close of the 12-
month period ending on August 31 of the calendar year, rounded to 10 
decimal places.
    (C) The combined percentage increase for 2019, 2020, and 2021 will 
be calculated as:

(CPI-U 2019/CPI-U 2018) x (CPI-U 2020/CPI-U 2019) x (CPI-U 2021/CPI-U 
2020)

    (ii) For an item or service (other than items or services described 
in paragraphs (c)(1)(iii) through (vii) of this section) furnished 
during 2023 or a subsequent year, the plan or issuer must calculate the 
qualifying payment amount by increasing the qualifying payment amount 
determined under paragraph (c)(1)(i) of this section, for such an item 
or service furnished in the immediately preceding year, by the 
percentage increase as published by the Department of the Treasury and 
the Internal Revenue Service.
    (A) The percentage increase for any year after 2022 will be 
published in guidance by the Internal Revenue Service. The Department 
of the Treasury and Internal Revenue Service will calculate the 
percentage increase using the CPI-U published by the Bureau of Labor 
Statistics of the Department of Labor.
    (B) For purposes of this paragraph (c)(1)(ii), the CPI-U for each 
calendar year is the average of the CPI-U as of the close of the 12-
month period ending on August 31 of the calendar year, rounded to 10 
decimal places.
    (C) The combined percentage increase for any year will be 
calculated as CPI-U present year/CPI-U prior year.
    (iii) For anesthesia services furnished during 2022, the plan or 
issuer must calculate the qualifying payment amount by first increasing 
the median contracted rate for the anesthesia conversion factor (as 
determined in accordance with paragraph (b) of this section) for the 
same or similar item or service under such plans or coverage, 
respectively, on January 31, 2019, in accordance with paragraph 
(c)(1)(i) of this section (referred to in this section as the indexed 
median contracted rate for the anesthesia conversion factor). The plan 
or issuer must then multiply the indexed median contracted rate for the 
anesthesia conversion factor by the sum of the base unit, time unit, 
and physical status modifier units of the participant or beneficiary to 
whom anesthesia services are furnished to determine the qualifying 
payment amount.
    (A) The base units for an anesthesia service code are the base 
units for that service code specified in the most recent edition (as of 
the date of service) of the American Society of Anesthesiologists 
Relative Value Guide.
    (B) The time unit is measured in 15-minute increments or a fraction 
thereof.
    (C) The physical status modifier on a claim is a standard modifier 
describing the physical status of the patient and is used to 
distinguish between various levels of complexity of the anesthesia 
services provided, and is expressed as a unit with a value between zero 
(0) and three (3).
    (D) The anesthesia conversion factor is expressed in dollars per 
unit and is a contracted rate negotiated with the plan or issuer.
    (iv) For anesthesia services furnished during 2023 or a subsequent 
year, the plan or issuer must calculate the qualifying payment amount 
by first increasing the indexed median contracted rate for the 
anesthesia conversion factor, determined under paragraph (c)(1)(iii) of 
this section for such services furnished in the immediately preceding 
year, in accordance with paragraph (c)(1)(ii) of this section. The plan 
or issuer must then multiply that amount by the sum of the base unit, 
time unit, and physical status modifier units for the participant or 
beneficiary to whom anesthesia services are furnished to determine the 
qualifying payment amount.
    (v) For air ambulance services billed using the air mileage service 
codes (A0435 and A0436) that are furnished during 2022, the plan or 
issuer must calculate the qualifying payment amount for services billed 
using the air mileage service codes by first increasing the median 
contracted rate (as determined in accordance with paragraph (b) of this 
section), in accordance with paragraph (c)(1)(i) of this section 
(referred to in this section as the indexed median air mileage rate). 
The plan or issuer must then multiply the indexed median air mileage 
rate by the number of loaded miles provided to the participant or 
beneficiary to determine the qualifying payment amount.
    (A) The air mileage rate is expressed in dollars per loaded mile 
flown, is expressed in statute miles (not nautical miles), and is a 
contracted rate negotiated with the plan or issuer.
    (B) The number of loaded miles is the number of miles a patient is 
transported in the air ambulance vehicle.
    (C) The qualifying payment amount for other service codes 
associated with air ambulance services is calculated in accordance with 
paragraphs (c)(1)(i) and (ii) of this section.

[[Page 36966]]

    (vi) For air ambulance services billed using the air mileage 
service codes (A0435 and A0436) that are furnished during 2023 or a 
subsequent year, the plan or issuer must calculate the qualifying 
payment amount by first increasing the indexed median air mileage rate, 
determined under paragraph (c)(1)(v) of this section for such services 
furnished in the immediately preceding year, in accordance with 
paragraph (c)(1)(ii) of this section. The plan or issuer must then 
multiply the indexed median air mileage rate by the number of loaded 
miles provided to the participant or beneficiary to determine the 
qualifying payment amount.
    (vii) For any other items or services for which a plan or issuer 
generally determines payment for the same or similar items or services 
by multiplying a contracted rate by another unit value, the plan or 
issuer must calculate the qualifying payment amount using a methodology 
that is similar to the methodology required under paragraphs 
(c)(1)(iii) through (vi) of this section and reasonably reflects the 
payment methodology for same or similar items or services.
    (2) New plans and coverage. With respect to a sponsor of a group 
health plan or health insurance issuer offering group health insurance 
coverage in a geographic region in which the sponsor or issuer, 
respectively, did not offer any group health plan or health insurance 
coverage during 2019--
    (i) For the first year in which the group health plan or group 
health insurance coverage, respectively, is offered in such region--
    (A) If the plan or issuer has sufficient information to calculate 
the median of the contracted rates described in paragraph (b) of this 
section, the plan or issuer must calculate the qualifying payment 
amount in accordance with paragraph (c)(1) of this section for items 
and services that are covered by the plan or coverage and furnished 
during the first year; and
    (B) If the plan or issuer does not have sufficient information to 
calculate the median of the contracted rates described in paragraph (b) 
of this section for an item or service provided in a geographic region, 
the plan or issuer must determine the qualifying payment amount for the 
item or service in accordance with paragraph (c)(3)(i) of this section.
    (ii) For each subsequent year the group health plan or group health 
insurance coverage, respectively, is offered in the region, the plan or 
issuer must calculate the qualifying payment amount by increasing the 
qualifying payment amount determined under this paragraph (c)(2) for 
the items and services furnished in the immediately preceding year, in 
accordance with paragraph (c)(1)(ii), (iv), or (vi) of this section, as 
applicable.
    (3) Insufficient information; newly covered items and services. In 
the case of a plan or issuer that does not have sufficient information 
to calculate the median of the contracted rates described in paragraph 
(b) of this section in 2019 (or, in the case of a newly covered item or 
service, in the first coverage year for such item or service with 
respect to such plan or coverage if the plan or issuer does not have 
sufficient information) for an item or service provided in a geographic 
region--
    (i) For an item or service furnished during 2022 (or, in the case 
of a newly covered item or service, during the first coverage year for 
the item or service with respect to the plan or coverage), the plan or 
issuer must calculate the qualifying payment amount by first 
identifying the rate that is equal to the median of the in-network 
allowed amounts for the same or similar item or service provided in the 
geographic region in the year immediately preceding the year in which 
the item or service is furnished (or, in the case of a newly covered 
item or service, the year immediately preceding such first coverage 
year) determined by the plan or issuer, respectively, through use of 
any eligible database, and then increasing that rate by the percentage 
increase in the CPI-U over such preceding year. For purposes of this 
section, in cases in which an eligible database is used to determine 
the qualifying payment amount with respect to an item or service 
furnished during a calendar year, the plan or issuer must use the same 
database for determining the qualifying payment amount for that item or 
service furnished through the last day of the calendar year, and if a 
different database is selected for some items or services, the basis 
for that selection must be one or more factors not directly related to 
the rate of those items or services (such as sufficiency of data for 
those items or services).
    (ii) For an item or service furnished in a subsequent year (before 
the first sufficient information year for such item or service with 
respect to such plan or coverage), the plan or issuer must calculate 
the qualifying payment amount by increasing the qualifying payment 
amount determined under paragraph (c)(3)(i) of this section or this 
paragraph (c)(3)(ii), as applicable, for such item or service for the 
year immediately preceding such subsequent year, by the percentage 
increase in CPI-U over such preceding year;
    (iii) For an item or service furnished in the first sufficient 
information year for such item or service with respect to such plan or 
coverage, the plan or issuer must calculate the qualifying payment 
amount in accordance with paragraph (c)(1)(i), (iii), or (v) of this 
section, as applicable, except that in applying such paragraph to such 
item or service, the reference to `furnished during 2022' is treated as 
a reference to furnished during such first sufficient information year, 
the reference to `in 2019' is treated as a reference to such sufficient 
information year, and the increase described in such paragraph is not 
applied; and
    (iv) For an item or service furnished in any year subsequent to the 
first sufficient information year for such item or service with respect 
to such plan or coverage, the plan or issuer must calculate the 
qualifying payment amount in accordance with paragraph (c)(1)(ii), 
(iv), or (vi) of this section, as applicable, except that in applying 
such paragraph to such item or service, the reference to `furnished 
during 2023 or a subsequent year' is treated as a reference to 
furnished during the year after such first sufficient information year 
or a subsequent year.
    (4) New service codes. In the case of a plan or issuer that does 
not have sufficient information to calculate the median of the 
contracted rates described in paragraph (b) of this section and 
determine the qualifying payment amount under paragraphs (c)(1) through 
(3) of this section because the item or service furnished is billed 
under a new service code--
    (i) For an item or service furnished during 2022 (or, in the case 
of a newly covered item or service, during the first coverage year for 
the item or service with respect to the plan or coverage), the plan or 
issuer must identify a reasonably related service code that existed in 
the immediately preceding year and--
    (A) If the Centers for Medicare & Medicaid Services has established 
a Medicare payment rate for the item or service billed under the new 
service code, the plan or issuer must calculate the qualifying payment 
amount by first calculating the ratio of the rate that Medicare pays 
for the item or service billed under the new service code compared to 
the rate that Medicare pays for the item or service billed under the 
related service code, and then multiplying the ratio by the qualifying 
payment amount for an item or service billed under the related service 
code for

[[Page 36967]]

the year in which the item or service is furnished.
    (B) If the Centers for Medicare & Medicaid Services has not 
established a Medicare payment rate for the item or service billed 
under the new service code, the plan or issuer must calculate the 
qualifying payment amount by first calculating the ratio of the rate 
that the plan or issuer reimburses for the item or service billed under 
the new service code compared to the rate that the plan or issuer 
reimburses for the item or service billed under the related service 
code, and then multiplying the ratio by the qualifying payment amount 
for an item or service billed under the related service code.
    (ii) For an item or service furnished in a subsequent year (before 
the first sufficient information year for such item or service with 
respect to such plan or coverage or before the first year for which an 
eligible database has sufficient information to a calculate a rate 
under paragraph (c)(3)(i) of this section in the immediately preceding 
year), the plan or issuer must calculate the qualifying payment amount 
by increasing the qualifying payment amount determined under paragraph 
(c)(4)(i) of this section or this paragraph (c)(4)(ii), as applicable, 
for such item or service for the year immediately preceding such 
subsequent year, by the percentage increase in CPI-U over such 
preceding year;
    (iii) For an item or service furnished in the first sufficient 
information year for such item or service with respect to such plan or 
coverage or the first year for which an eligible database has 
sufficient information to calculate a rate under paragraph (c)(3)(i) of 
this section in the immediately preceding year, the plan or issuer must 
calculate the qualifying payment amount in accordance with paragraph 
(c)(3) of this section.
    (d) Information to be shared about qualifying payment amount. In 
cases in which the recognized amount with respect to an item or service 
furnished by a nonparticipating provider, nonparticipating emergency 
facility, or nonparticipating provider of air ambulance services is the 
qualifying payment amount, the plan or issuer must provide in writing, 
in paper or electronic form, to the provider or facility, as 
applicable--
    (1) With each initial payment or notice of denial of payment under 
Sec.  2590.716-4, Sec.  2590.716-5, or Sec.  2590.717-1 of this part:
    (i) The qualifying payment amount for each item or service 
involved;
    (ii) A statement to certify that, based on the determination of the 
plan or issuer--
    (A) The qualifying payment amount applies for purposes of the 
recognized amount (or, in the case of air ambulance services, for 
calculating the participant's or beneficiary's cost sharing); and
    (B) Each qualifying payment amount shared with the provider or 
facility was determined in compliance with this section;
    (iii) A statement that if the provider or facility, as applicable, 
wishes to initiate a 30-day open negotiation period for purposes of 
determining the amount of total payment, the provider or facility may 
contact the appropriate person or office to initiate open negotiation, 
and that if the 30-day negotiation period does not result in a 
determination, generally, the provider or facility may initiate the 
independent dispute resolution process within 4 days after the end of 
the open negotiation period; and
    (iv) Contact information, including a telephone number and email 
address, for the appropriate person or office to initiate open 
negotiations for purposes of determining an amount of payment 
(including cost sharing) for such item or service.
    (2) In a timely manner upon request of the provider or facility:
    (i) Information about whether the qualifying payment amount for 
items and services involved included contracted rates that were not on 
a fee-for-service basis for those specific items and services and 
whether the qualifying payment amount for those items and services was 
determined using underlying fee schedule rates or a derived amount;
    (ii) If a plan or issuer uses an eligible database under paragraph 
(c)(3) of this section to determine the qualifying payment amount, 
information to identify which database was used; and
    (iii) If a related service code was used to determine the 
qualifying payment amount for an item or service billed under a new 
service code under paragraph (c)(4)(i) or (ii) of this section, 
information to identify the related service code;
    (iv) If applicable, a statement that the plan's or issuer's 
contracted rates include risk-sharing, bonus, penalty, or other 
incentive-based or retrospective payments or payment adjustments for 
the items and services involved (as applicable) that were excluded for 
purposes of calculating the qualifying payment amount.
    (e) Certain access fees to databases. In the case of a plan or 
issuer that, pursuant to this section, uses an eligible database to 
determine the qualifying payment amount for an item or service, the 
plan or issuer is responsible for any costs associated with accessing 
such database.
    (f) Applicability date. The provisions of this section are 
applicable with respect to plan years beginning on or after January 1, 
2022.


Sec.  2590.716-7  Complaints process for surprise medical bills 
regarding group health plans and group health insurance coverage.

    (a) Scope and definitions--(1) Scope. This section establishes a 
process to receive and resolve complaints regarding information that a 
specific group health plan or health insurance issuer offering group 
health insurance coverage may be failing to meet the requirements under 
subpart D of this part, which may warrant an investigation.
    (2) Definitions. In this section--
    (i) Complaint means a communication, written or oral, that 
indicates there has been a potential violation of the requirements 
under subpart D of this part, whether or not a violation actually 
occurred.
    (ii) Complainant means any individual, or their authorized 
representative, who files a complaint as defined in paragraph (a)(2)(i) 
of this section.
    (b) Complaints process. (1) DOL will consider the date a complaint 
is filed to be the date upon which DOL receives an oral or written 
statement that identifies information about the complaint sufficient to 
identify the parties involved and the action or inaction complained of.
    (2) DOL will notify complainants, by oral or written means, of 
receipt of the complaint no later than 60 business days after the 
complaint is received. DOL will include a response acknowledging 
receipt of the complaint, notifying the complainant of their rights and 
obligations under the complaints process, and describing the next steps 
of the complaint resolution process. As part of the response, DOL may 
request additional information needed to process the complaint. Such 
additional information may include:
    (i) Explanations of benefits;
    (ii) Processed claims;
    (iii) Information about the health care provider, facility, or 
provider of air ambulance services involved;
    (iv) Information about the group health plan or health insurance 
issuer covering the individual;
    (v) Information to support a determination regarding whether the 
service was an emergency service or non-emergency service;
    (vi) The summary plan description, policy, certificate, contract of 
insurance,

[[Page 36968]]

membership booklet, outline of coverage, or other evidence of coverage 
the plan or issuer provides to participants or beneficiaries;
    (vii) Documents regarding the facts in the complaint in the 
possession of, or otherwise attainable by, the complainant; or
    (viii) Any other information DOL may need to make a determination 
of facts for an investigation.
    (3) DOL will make reasonable efforts consistent with agency 
practices to notify the complainant of the outcome of the complaint 
after the submission is processed through appropriate methods as 
determined by DOL. A complaint is considered processed after DOL has 
reviewed the complaint and accompanying information and made an outcome 
determination. Based on the nature of the complaint and the plan or 
issuer involved, DOL may--
    (i) Refer the complainant to another appropriate Federal or State 
resolution process;
    (ii) Notify the complainant and make reasonable efforts to refer 
the complainant to the appropriate State or Federal regulatory 
authority if DOL receives a complaint where another entity has 
enforcement jurisdiction over the plan or issuer;
    (iii) Refer the plan or issuer for an investigation for enforcement 
action; or
    (iv) Provide the complainant with an explanation of the resolution 
of the complaint and any corrective action taken.


Sec.  2590.717-1  Preventing surprise medical bills for air ambulance 
services.

    (a) In general. If a group health plan or a health insurance issuer 
offering group health insurance coverage provides or covers any 
benefits for air ambulance services, the plan or issuer must cover such 
services from a nonparticipating provider of air ambulance services in 
accordance with paragraph (b) of this section.
    (b) Coverage requirements. A plan or issuer described in paragraph 
(a) of this section must provide coverage of air ambulance services in 
the following manner--
    (1) The cost-sharing requirements with respect to the services must 
be the same requirements that would apply if the services were provided 
by a participating provider of air ambulance services.
    (2) The cost-sharing requirement must be calculated as if the total 
amount that would have been charged for the services by a participating 
provider of air ambulance services were equal to the lesser of the 
qualifying payment amount (as determined in accordance with Sec.  
2590.716-6) or the billed amount for the services.
    (3) The cost-sharing amounts must be counted towards any in-network 
deductible and in-network out-of-pocket maximums (including the annual 
limitation on cost sharing under section 2707(b) of the PHS Act) (as 
applicable) applied under the plan or coverage (and the in-network 
deductible and out-of-pocket maximums must be applied) in the same 
manner as if the cost-sharing payments were made with respect to 
services furnished by a participating provider of air ambulance 
services.
    (4) The plan or issuer must--
    (i) Not later than 30 calendar days after the bill for the services 
is transmitted by the provider of air ambulance services, determine 
whether the services are covered under the plan or coverage and, if the 
services are covered, send to the provider an initial payment or a 
notice of denial of payment. For purposes of this paragraph (b)(4)(i), 
the 30-calendar-day period begins on the date the plan or issuer 
receives the information necessary to decide a claim for payment for 
the services.
    (ii) Pay a total plan or coverage payment directly to the 
nonparticipating provider furnishing such air ambulance services that 
is equal to the amount by which the out-of-network rate for the 
services exceeds the cost-sharing amount for the services (as 
determined in accordance with paragraphs (b)(1) and (2) of this 
section), less any initial payment amount made under paragraph 
(b)(4)(i) of this section. The total plan or coverage payment must be 
made in accordance with the timing requirement described in section 
717(b)(6) of ERISA, or in cases where the out-of-network rate is 
determined under a specified State law or All-Payer Model Agreement, 
such other timeframe as specified by the State law or All-Payer Model 
Agreement.
    (c) Applicability date. The provisions of this section are 
applicable with respect to plan years beginning on or after January 1, 
2022.


Sec.  2590.722  Choice of health care professional.

    (a) Choice of health care professional--(1) Designation of primary 
care provider--(i) In general. If a group health plan, or a health 
insurance issuer offering group health insurance coverage, requires or 
provides for designation by a participant or beneficiary of a 
participating primary care provider, then the plan or issuer must 
permit each participant or beneficiary to designate any participating 
primary care provider who is available to accept the participant or 
beneficiary. In such a case, the plan or issuer must comply with the 
rules of paragraph (a)(4) of this section by informing each participant 
of the terms of the plan or health insurance coverage regarding 
designation of a primary care provider.
    (ii) Construction. Nothing in paragraph (a)(1)(i) of this section 
is to be construed to prohibit the application of reasonable and 
appropriate geographic limitations with respect to the selection of 
primary care providers, in accordance with the terms of the plan or 
coverage, the underlying provider contracts, and applicable State law.
    (iii) Example. The rules of this paragraph (a)(1) are illustrated 
by the following example:
    (A) Facts. A group health plan requires individuals covered under 
the plan to designate a primary care provider. The plan permits each 
individual to designate any primary care provider participating in the 
plan's network who is available to accept the individual as the 
individual's primary care provider. If an individual has not designated 
a primary care provider, the plan designates one until the individual 
has made a designation. The plan provides a notice that satisfies the 
requirements of paragraph (a)(4) of this section regarding the ability 
to designate a primary care provider.
    (B) Conclusion. In this Example, the plan has satisfied the 
requirements of paragraph (a) of this section.
    (2) Designation of pediatrician as primary care provider--(i) In 
general. If a group health plan, or a health insurance issuer offering 
group health insurance coverage, requires or provides for the 
designation of a participating primary care provider for a child by a 
participant or beneficiary, the plan or issuer must permit the 
participant or beneficiary to designate a physician (allopathic or 
osteopathic) who specializes in pediatrics (including pediatric 
subspecialties, based on the scope of that provider's license under 
applicable State law) as the child's primary care provider if the 
provider participates in the network of the plan or issuer and is 
available to accept the child. In such a case, the plan or issuer must 
comply with the rules of paragraph (a)(4) of this section by informing 
each participant (in the individual market, primary subscriber) of the 
terms of the plan or health insurance coverage regarding designation of 
a pediatrician as the child's primary care provider.
    (ii) Construction. Nothing in paragraph (a)(2)(i) of this section 
is to be construed to waive any exclusions of

[[Page 36969]]

coverage under the terms and conditions of the plan or health insurance 
coverage with respect to coverage of pediatric care.
    (iii) Examples. The rules of this paragraph (a)(2) are illustrated 
by the following examples:
    (A) Example 1--(1) Facts. A group health plan's HMO designates for 
each participant a physician who specializes in internal medicine to 
serve as the primary care provider for the participant and any 
beneficiaries. Participant A requests that Pediatrician B be designated 
as the primary care provider for A's child. B is a participating 
provider in the HMO's network and is available to accept the child.
    (2) Conclusion. In this Example 1, the HMO must permit A's 
designation of B as the primary care provider for A's child in order to 
comply with the requirements of this paragraph (a)(2).
    (B) Example 2--(1) Facts. Same facts as Example 1 (paragraph 
(a)(2)(iii)(A) of this section), except that A takes A's child to B for 
treatment of the child's severe shellfish allergies. B wishes to refer 
A's child to an allergist for treatment. The HMO, however, does not 
provide coverage for treatment of food allergies, nor does it have an 
allergist participating in its network, and it therefore refuses to 
authorize the referral.
    (2) Conclusion. In this Example 2, the HMO has not violated the 
requirements of this paragraph (a)(2) because the exclusion of 
treatment for food allergies is in accordance with the terms of A's 
coverage.
    (3) Patient access to obstetrical and gynecological care--(i) 
General rights--(A) Direct access. A group health plan, or a health 
insurance issuer offering group health insurance coverage, described in 
paragraph (a)(3)(ii) of this section, may not require authorization or 
referral by the plan, issuer, or any person (including a primary care 
provider) in the case of a female participant or beneficiary who seeks 
coverage for obstetrical or gynecological care provided by a 
participating health care professional who specializes in obstetrics or 
gynecology. In such a case, the plan or issuer must comply with the 
rules of paragraph (a)(4) of this section by informing each participant 
that the plan may not require authorization or referral for obstetrical 
or gynecological care by a participating health care professional who 
specializes in obstetrics or gynecology. The plan or issuer may require 
such a professional to agree to otherwise adhere to the plan's or 
issuer's policies and procedures, including procedures regarding 
referrals and obtaining prior authorization and providing services 
pursuant to a treatment plan (if any) approved by the plan or issuer. 
For purposes of this paragraph (a)(3), a health care professional who 
specializes in obstetrics or gynecology is any individual (including a 
person other than a physician) who is authorized under applicable State 
law to provide obstetrical or gynecological care.
    (B) Obstetrical and gynecological care. A group health plan or 
health insurance issuer described in paragraph (a)(3)(ii) of this 
section must treat the provision of obstetrical and gynecological care, 
and the ordering of related obstetrical and gynecological items and 
services, pursuant to the direct access described under paragraph 
(a)(3)(i)(A) of this section, by a participating health care 
professional who specializes in obstetrics or gynecology as the 
authorization of the primary care provider.
    (ii) Application of paragraph. A group health plan, or a health 
insurance issuer offering group health insurance coverage, is described 
in this paragraph (a)(3) if the plan or issuer--
    (A) Provides coverage for obstetrical or gynecological care; and
    (B) Requires the designation by a participant or beneficiary of a 
participating primary care provider.
    (iii) Construction. Nothing in paragraph (a)(3)(i) of this section 
is to be construed to--
    (A) Waive any exclusions of coverage under the terms and conditions 
of the plan or health insurance coverage with respect to coverage of 
obstetrical or gynecological care; or
    (B) Preclude the group health plan or health insurance issuer 
involved from requiring that the obstetrical or gynecological provider 
notify the primary care health care professional or the plan or issuer 
of treatment decisions.
    (iv) Examples. The rules of this paragraph (a)(3) are illustrated 
by the following examples:
    (A) Example 1--(1) Facts. A group health plan requires each 
participant to designate a physician to serve as the primary care 
provider for the participant and the participant's family. Participant 
A, a female, requests a gynecological exam with Physician B, an in-
network physician specializing in gynecological care. The group health 
plan requires prior authorization from A's designated primary care 
provider for the gynecological exam.
    (2) Conclusion. In this Example 1, the group health plan has 
violated the requirements of this paragraph (a)(3) because the plan 
requires prior authorization from A's primary care provider prior to 
obtaining gynecological services.
    (B) Example 2--(1) Facts. Same facts as Example 1 (paragraph 
(a)(3)(iv)(A) of this section) except that A seeks gynecological 
services from C, an out-of-network provider.
    (2) Conclusion. In this Example 2, the group health plan has not 
violated the requirements of this paragraph (a)(3) by requiring prior 
authorization because C is not a participating health care provider.
    (C) Example 3--(1) Facts. Same facts as Example 1 (paragraph 
(a)(3)(iv)(A) of this section) except that the group health plan only 
requires B to inform A's designated primary care physician of treatment 
decisions.
    (2) Conclusion. In this Example 3, the group health plan has not 
violated the requirements of this paragraph (a)(3) because A has direct 
access to B without prior authorization. The fact that the group health 
plan requires the designated primary care physician to be notified of 
treatment decisions does not violate this paragraph (a)(3).
    (D) Example 4--(1) Facts. A group health plan requires each 
participant to designate a physician to serve as the primary care 
provider for the participant and the participant's family. The group 
health plan requires prior authorization before providing benefits for 
uterine fibroid embolization.
    (2) Conclusion. In this Example 4, the plan requirement for prior 
authorization before providing benefits for uterine fibroid 
embolization does not violate the requirements of this paragraph (a)(3) 
because, though the prior authorization requirement applies to 
obstetrical services, it does not restrict access to any providers 
specializing in obstetrics or gynecology.
    (4) Notice of right to designate a primary care provider--(i) In 
general. If a group health plan or health insurance issuer requires the 
designation by a participant or beneficiary of a primary care provider, 
the plan or issuer must provide a notice informing each participant (in 
the individual market, primary subscriber) of the terms of the plan or 
health insurance coverage regarding designation of a primary care 
provider and of the rights--
    (A) Under paragraph (a)(1)(i) of this section, that any 
participating primary care provider who is available to accept the 
participant or beneficiary can be designated;
    (B) Under paragraph (a)(2)(i) of this section, with respect to a 
child, that any participating physician who specializes in pediatrics 
can be designated as the primary care provider; and

[[Page 36970]]

    (C) Under paragraph (a)(3)(i) of this section, that the plan may 
not require authorization or referral for obstetrical or gynecological 
care by a participating health care professional who specializes in 
obstetrics or gynecology.
    (ii) Timing. In the case of a group health plan or group health 
insurance coverage, the notice described in paragraph (a)(4)(i) of this 
section must be included whenever the plan or issuer provides a 
participant with a summary plan description or other similar 
description of benefits under the plan or health insurance coverage. In 
the case of individual health insurance coverage, the notice described 
in paragraph (a)(4)(i) of this section must be included whenever the 
issuer provides a primary subscriber with a policy, certificate, or 
contract of health insurance.
    (iii) Model language. The following model language can be used to 
satisfy the notice requirement described in paragraph (a)(4)(i) of this 
section:
    (A) For plans and issuers that require or allow for the designation 
of primary care providers by participants, or beneficiaries, insert:

    [Name of group health plan or health insurance issuer] generally 
[requires/allows] the designation of a primary care provider. You 
have the right to designate any primary care provider who 
participates in our network and who is available to accept you or 
your family members. [If the plan or health insurance coverage 
designates a primary care provider automatically, insert: Until you 
make this designation, [name of group health plan or health 
insurance issuer] designates one for you.] For information on how to 
select a primary care provider, and for a list of the participating 
primary care providers, contact the [plan administrator or issuer] 
at [insert contact information].

    (B) For plans and issuers that require or allow for the designation 
of a primary care provider for a child, add:
    For children, you may designate a pediatrician as the primary care 
provider.
    (C) For plans and issuers that provide coverage for obstetric or 
gynecological care and require the designation by a participant or 
beneficiary of a primary care provider, add:

    You do not need prior authorization from [name of group health 
plan or issuer] or from any other person (including a primary care 
provider) in order to obtain access to obstetrical or gynecological 
care from a health care professional in our network who specializes 
in obstetrics or gynecology. The health care professional, however, 
may be required to comply with certain procedures, including 
obtaining prior authorization for certain services, following a pre-
approved treatment plan, or procedures for making referrals. For a 
list of participating health care professionals who specialize in 
obstetrics or gynecology, contact the [plan administrator or issuer] 
at [insert contact information].

    (b) Applicability date. The provisions of this section are 
applicable with respect to plan years beginning on or after January 1, 
2022.

Department of Health and Human Services

45 CFR Subtitle A, Subchapter B

    For the reasons stated in the preamble, the Department of Health 
and Human Services amends 45 CFR parts 144, 147, 149, and 156 as set 
forth below:

PART 144--REQUIREMENTS RELATING TO HEALTH INSURANCE COVERAGE

0
12. The authority citation for part 144 is revised to read as follows:

    Authority:  42 U.S.C. 300gg through 300gg-63, 300gg-91, 300gg-
92, and 300gg-111 through 300gg-139, as amended.


0
13. Section 144.101 is amended by:
0
a. Redesignating paragraphs (d) and (e) as paragraphs (e) and (f), 
respectively; and
0
b. Adding new paragraph (d).
    The addition reads as follows:


Sec.  144.101  Basis and purpose.

* * * * *
    (d) Part 149 of this subchapter implements the provisions of parts 
D and E of title XXVII of the PHS Act that apply to group health plans, 
health insurance issuers in the group and individual markets, health 
care providers and facilities, and providers of air ambulance services.
* * * * *

0
14. Section 144.102 is revised to read as follows:


Sec.  144.102  Scope and applicability.

    (a) For purposes of 45 CFR parts 144 through 149, all health 
insurance coverage is generally divided into two markets--the group 
market and the individual market. The group market is further divided 
into the large group market and the small group market.
    (b) The protections afforded under 45 CFR parts 144 through 149 to 
individuals and employers (and other sponsors of health insurance 
offered in connection with a group health plan) are determined by 
whether the coverage involved is obtained in the small group market, 
the large group market, or the individual market.
    (c) Coverage that is provided to associations, but not related to 
employment, and sold to individuals is not considered group coverage 
under 45 CFR parts 144 through 149. If the coverage is offered to an 
association member other than in connection with a group health plan, 
the coverage is considered individual health insurance coverage for 
purposes of 45 CFR parts 144 through 149. The coverage is considered 
coverage in the individual market, regardless of whether it is 
considered group coverage under state law. If the health insurance 
coverage is offered in connection with a group health plan as defined 
at 45 CFR 144.103, it is considered group health insurance coverage for 
purposes of 45 CFR parts 144 through 149.
    (d) Provisions relating to CMS enforcement of parts 146, 147, 148, 
and 149 are contained in part 150 of this subchapter.

0
15. Section 144.103 is amended by revising the introductory text to 
read as follows:


Sec.  144.103  Definitions.

    For purposes of parts 146 (group market), 147 (group and individual 
market), 148 (individual market), 149 (surprise billing and 
transparency), and 150 (enforcement) of this subchapter, the following 
definitions apply unless otherwise provided:
* * * * *

PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND 
INDIVIDUAL HEALTH INSURANCE MARKETS

0
16. The authority citation for part 147 is revised to read as follows:

    Authority:  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.


0
17. Section 147.138 is amended by revising paragraph (c) to read as 
follows:


Sec.  147.138   Patient protections.

* * * * *
    (c) Applicability date. The provisions of this section are 
applicable to group health plans and health insurance issuers for plan 
years (in the individual market, policy years) beginning before January 
1, 2022. See also subparts B and D of part 149 of this subchapter for 
rules applicable with respect to plan years (in the individual market, 
policy years) beginning on or after January 1, 2022.

0
18. Add part 149 to read as follows:

PART 149--SURPRISE BILLING AND TRANSPARENCY REQUIREMENTS

Subpart A--General Provisions
Sec.
149.10 Basis and scope.
149.20 Applicability.

[[Page 36971]]

149.30 Definitions.
Subpart B--Protections against Balance Billing for the Group and 
Individual Health Insurance Markets
149.110 Preventing surprise medical bills for emergency services.
149.120 Preventing surprise medical bills for non-emergency services 
performed by nonparticipating providers at certain participating 
facilities.
149.130 Preventing surprise medical bills for air ambulance 
services.
149.140 Methodology for calculating qualifying payment amount.
149.150 Complaints process for surprise medical bills regarding 
group health plans and group and individual health insurance 
coverage.
Subpart C--[Reserved]
Subpart D--Additional Patient Protections
149.310 Choice of health care professional.
Subpart E--Health Care Provider, Health Care Facility, and Air 
Ambulance Service Provider Requirements
149.410 Balance billing in cases of emergency services.
149.420 Balance billing in cases of non-emergency services performed 
by nonparticipating providers at certain participating health care 
facilities.
149.430 Provider and facility disclosure requirements regarding 
patient protections against balance billing.
149.440 Balance billing in cases of air ambulance services.
149.450 Complaints process for balance billing regarding providers 
and facilities.

    Authority: 42 U.S.C. 300gg-111 through 300gg-139, as amended.

Subpart A--General Provisions


Sec.  149.10  Basis and scope.

    (a) Basis. This part implements parts D and E of title XXVII of the 
PHS Act.
    (b) Scope. This part establishes standards for group health plans, 
health insurance issuers offering group or individual health insurance 
coverage, health care providers and facilities, and providers of air 
ambulance services with respect to surprise medical bills, transparency 
in health care coverage, and additional patient protections.


Sec.  149.20  Applicability.

    (a) In general. (1) The requirements in subparts B and D of this 
part apply to group health plans and health insurance issuers offering 
group or individual health insurance coverage (including grandfathered 
health plans as defined in Sec.  147.140 of this subchapter), except as 
specified in paragraph (b) of this section.
    (2) The requirements in subpart E of this part apply to health care 
providers, health care facilities, and providers of air ambulance 
services.
    (b) Exceptions. The requirements in subparts B and D of this part 
do not apply to the following:
    (1) Excepted benefits as described in Sec. Sec.  146.145 and 
148.220 of this subchapter.
    (2) Short-term, limited-duration insurance as defined in Sec.  
144.103 of this subchapter.
    (3) Health reimbursement arrangements or other account-based group 
health plans as described in Sec.  147.126(d) of this subchapter.


Sec.  149.30  Definitions.

    The definitions in part 144 of this subchapter apply to this part, 
unless otherwise specified. In addition, for purposes of this part, the 
following definitions apply:
    Air ambulance service means medical transport by a rotary wing air 
ambulance, as defined in 42 CFR 414.605, or fixed wing air ambulance, 
as defined in 42 CFR 414.605, for patients.
    Cost sharing means the amount a participant, beneficiary, or 
enrollee is responsible for paying for a covered item or service under 
the terms of the group health plan or health insurance coverage. Cost 
sharing generally includes copayments, coinsurance, and amounts paid 
towards deductibles, but does not include amounts paid towards 
premiums, balance billing by out-of-network providers, or the cost of 
items or services that are not covered under a group health plan or 
health insurance coverage.
    Emergency department of a hospital includes a hospital outpatient 
department that provides emergency services.
    Emergency medical condition has the meaning given the term in Sec.  
149.110(c)(1).
    Emergency services has the meaning given the term in Sec.  
149.110(c)(2).
    Health care facility, with respect to a group health plan or group 
or individual health insurance coverage, in the context of non-
emergency services, is each of the following:
    (1) A hospital (as defined in section 1861(e) of the Social 
Security Act);
    (2) A hospital outpatient department;
    (3) A critical access hospital (as defined in section 1861(mm)(1) 
of the Social Security Act); and
    (4) An ambulatory surgical center described in section 
1833(i)(1)(A) of the Social Security Act.
    Independent freestanding emergency department means a health care 
facility (not limited to those described in the definition of health 
care facility with respect to non-emergency services) that--
    (1) Is geographically separate and distinct and licensed separately 
from a hospital under applicable State law; and
    (2) Provides any emergency services as described in Sec.  
149.110(c)(2)(i).
    Nonparticipating emergency facility means an emergency department 
of a hospital, or an independent freestanding emergency department (or 
a hospital, with respect to services that pursuant to Sec.  
149.110(c)(2)(ii) are included as emergency services), that does not 
have a contractual relationship directly or indirectly with a group 
health plan or group or individual health insurance coverage offered by 
a health insurance issuer, with respect to the furnishing of an item or 
service under the plan or coverage, respectively.
    Nonparticipating provider means any physician or other health care 
provider who does not have a contractual relationship directly or 
indirectly with a group health plan or group or individual health 
insurance coverage offered by a health insurance issuer, with respect 
to the furnishing of an item or service under the plan or coverage, 
respectively.
    Notice of denial of payment means, with respect to an item or 
service for which benefits subject to the protections of Sec. Sec.  
149.110 through 149.130 are provided or covered, a written notice from 
the plan or issuer to the health care provider, facility, or provider 
of air ambulance services, as applicable, that payment for such item or 
service will not be made by the plan or coverage and which explains the 
reason for denial. The term notice of denial of payment does not 
include a notice of benefit denial due to an adverse benefit 
determination as defined in 29 CFR 2560.503-1.
    Out-of-network rate means, with respect to an item or service 
furnished by a nonparticipating provider, nonparticipating emergency 
facility, or nonparticipating provider of air ambulance services--
    (1) Subject to paragraph (3) of this definition, in a State that 
has in effect a specified State law, the amount determined in 
accordance with such law;
    (2) Subject to paragraph (3) of this definition, in a State that 
does not have in effect a specified State law--
    (i) Subject to paragraph (2)(ii) of this definition, if the 
nonparticipating provider or nonparticipating emergency facility and 
the plan or issuer agree on an amount of payment (including if the 
amount agreed upon is the initial payment sent by the plan or issuer 
under 26 CFR 54.9816-4T(b)(3)(iv)(A), 54.9816-5T(c)(3), or 54.9817-
1T(b)(4)(i); 29 CFR 2590.716-4(b)(3)(iv)(A), 2590.716-5(c)(3), or 
2590.717-1(b)(4)(i);

[[Page 36972]]

or Sec.  149.110(b)(3)(iv)(A), Sec.  149.120(c)(3), or Sec.  
149.130(b)(4)(i), as applicable, or is agreed on through negotiations 
with respect to such item or service), such agreed on amount; or
    (ii) If the nonparticipating provider or nonparticipating emergency 
facility and the plan or issuer enter into the independent dispute 
resolution (IDR) process under section 9816(c) or 9817(b) of the 
Internal Revenue Code, section 716(c) or 717(b) of ERISA, or section 
2799A-1(c) or 2799A-2(b) of the PHS Act, as applicable, and do not 
agree before the date on which a certified IDR entity makes a 
determination with respect to such item or service under such 
subsection, the amount of such determination; or
    (3) In a State that has an All-Payer Model Agreement under section 
1115A of the Social Security Act that applies with respect to the plan 
or issuer; the nonparticipating provider or nonparticipating emergency 
facility; and the item or service, the amount that the State approves 
under the All-Payer Model Agreement for the item or service.
    Participating emergency facility means any emergency department of 
a hospital, or an independent freestanding emergency department (or a 
hospital, with respect to services that pursuant to Sec.  
149.110(c)(2)(ii) are included as emergency services), that has a 
contractual relationship directly or indirectly with a group health 
plan or health insurance issuer offering group or individual health 
insurance coverage setting forth the terms and conditions on which a 
relevant item or service is provided to a participant, beneficiary, or 
enrollee under the plan or coverage, respectively. A single case 
agreement between an emergency facility and a plan or issuer that is 
used to address unique situations in which a participant, beneficiary, 
or enrollee requires services that typically occur out-of-network 
constitutes a contractual relationship for purposes of this definition, 
and is limited to the parties to the agreement.
    Participating health care facility means any health care facility 
described in this section that has a contractual relationship directly 
or indirectly with a group health plan or health insurance issuer 
offering group or individual health insurance coverage setting forth 
the terms and conditions on which a relevant item or service is 
provided to a participant, beneficiary, or enrollee under the plan or 
coverage, respectively. A single case agreement between a health care 
facility and a plan or issuer that is used to address unique situations 
in which a participant, beneficiary, or enrollee requires services that 
typically occur out-of-network constitutes a contractual relationship 
for purposes of this definition, and is limited to the parties to the 
agreement.
    Participating provider means any physician or other health care 
provider who has a contractual relationship directly or indirectly with 
a group health plan or health insurance issuer offering group or 
individual health insurance coverage setting forth the terms and 
conditions on which a relevant item or service is provided to a 
participant, beneficiary, or enrollee under the plan or coverage, 
respectively.
    Physician or health care provider means a physician or other health 
care provider who is acting within the scope of practice of that 
provider's license or certification under applicable State law, but 
does not include a provider of air ambulance services.
    Provider of air ambulance services means an entity that is licensed 
under applicable State and Federal law to provide air ambulance 
services.
    Same or similar item or service has the meaning given the term in 
Sec.  149.140(a)(13).
    Service code has the meaning given the term in Sec.  
149.140(a)(14).
    Qualifying payment amount has the meaning given the term in Sec.  
149.140(a)(16).
    Recognized amount means, with respect to an item or service 
furnished by a nonparticipating provider or nonparticipating emergency 
facility--
    (1) Subject to paragraph (3) of this definition, in a State that 
has in effect a specified State law, the amount determined in 
accordance with such law.
    (2) Subject to paragraph (3) of this definition, in a State that 
does not have in effect a specified State law, the lesser of--
    (i) The amount that is the qualifying payment amount (as determined 
in accordance with Sec.  149.140); or
    (ii) The amount billed by the provider or facility.
    (3) In a State that has an All-Payer Model Agreement under section 
1115A of the Social Security Act that applies with respect to the plan 
or issuer; the nonparticipating provider or nonparticipating emergency 
facility; and the item or service, the amount that the State approves 
under the All-Payer Model Agreement for the item or service.
    Specified State law means a State law that provides for a method 
for determining the total amount payable under a group health plan or 
group or individual health insurance coverage offered by a health 
insurance issuer to the extent such State law applies for an item or 
service furnished by a nonparticipating provider or nonparticipating 
emergency facility (including where it applies because the State has 
allowed a plan that is not otherwise subject to applicable State law an 
opportunity to opt in, subject to section 514 of the Employee 
Retirement Income Security Act of 1974). A group health plan that opts 
in to such a specified State law must do so for all items and services 
to which the specified State law applies and in a manner determined by 
the applicable State authority, and must prominently display in its 
plan materials describing the coverage of out-of-network services a 
statement that the plan has opted into the specified State law, 
identify the relevant State (or States), and include a general 
description of the items and services provided by nonparticipating 
facilities and providers that are covered by the specified State law.
    State means each of the 50 States, the District of Columbia, Puerto 
Rico, the Virgin Islands, Guam, American Samoa, and the Northern 
Mariana Islands.
    Treating provider is a physician or health care provider who has 
evaluated the individual.
    Visit, with respect to items and services furnished to an 
individual at a health care facility, includes, in addition to items 
and services furnished by a provider at the facility, equipment and 
devices, telemedicine services, imaging services, laboratory services, 
and preoperative and postoperative services, regardless of whether the 
provider furnishing such items or services is at the facility.

Subpart B--Protections Against Balance Billing for the Group and 
Individual Health Insurance Markets


Sec.  149.110  Preventing surprise medical bills for emergency 
services.

    (a) In general. If a group health plan, or a health insurance 
issuer offering group or individual health insurance coverage, provides 
or covers any benefits with respect to services in an emergency 
department of a hospital or with respect to emergency services in an 
independent freestanding emergency department, the plan or issuer must 
cover emergency services, as defined in paragraph (c)(2) of this 
section, and this coverage must be provided in accordance with 
paragraph (b) of this section.
    (b) Coverage requirements. A plan or issuer described in paragraph 
(a) of this section must provide coverage for emergency services in the 
following manner--

[[Page 36973]]

    (1) Without the need for any prior authorization determination, 
even if the services are provided on an out-of-network basis.
    (2) Without regard to whether the health care provider furnishing 
the emergency services is a participating provider or a participating 
emergency facility, as applicable, with respect to the services.
    (3) If the emergency services are provided by a nonparticipating 
provider or a nonparticipating emergency facility--
    (i) Without imposing any administrative requirement or limitation 
on coverage that is more restrictive than the requirements or 
limitations that apply to emergency services received from 
participating providers and participating emergency facilities.
    (ii) Without imposing cost-sharing requirements that are greater 
than the requirements that would apply if the services were provided by 
a participating provider or a participating emergency facility.
    (iii) By calculating the cost-sharing requirement as if the total 
amount that would have been charged for the services by such 
participating provider or participating emergency facility were equal 
to the recognized amount for such services.
    (iv) The plan or issuer--
    (A) Not later than 30 calendar days after the bill for the services 
is transmitted by the provider or facility (or, in cases where the 
recognized amount is determined by a specified State law or All-Payer 
Model Agreement, such other timeframe as specified by the State law or 
All-Payer Model Agreement), determines whether the services are covered 
under the plan or coverage and, if the services are covered, sends to 
the provider or facility, as applicable, an initial payment or a notice 
of denial of payment. For purposes of this paragraph (b)(3)(iv)(A), the 
30-calendar-day period begins on the date the plan or issuer receives 
the information necessary to decide a claim for payment for the 
services.
    (B) Pays a total plan or coverage payment directly to the 
nonparticipating provider or nonparticipating facility that is equal to 
the amount by which the out-of-network rate for the services exceeds 
the cost-sharing amount for the services (as determined in accordance 
with paragraphs (b)(3)(ii) and (iii) of this section), less any initial 
payment amount made under paragraph (b)(3)(iv)(A) of this section. The 
total plan or coverage payment must be made in accordance with the 
timing requirement described in section 2799A-1(c)(6) of the PHS Act, 
or in cases where the out-of-network rate is determined under a 
specified State law or All-Payer Model Agreement, such other timeframe 
as specified by the State law or All-Payer Model Agreement.
    (v) By counting any cost-sharing payments made by the participant, 
beneficiary, or enrollee with respect to the emergency services toward 
any in-network deductible or in-network out-of-pocket maximums 
(including the annual limitation on cost sharing under section 2707(b) 
of the PHS Act) (as applicable) applied under the plan or coverage (and 
the in-network deductible and in-network out-of-pocket maximums must be 
applied) in the same manner as if the cost-sharing payments were made 
with respect to emergency services furnished by a participating 
provider or a participating emergency facility.
    (4) Without limiting what constitutes an emergency medical 
condition (as defined in paragraph (c)(1) of this section) solely on 
the basis of diagnosis codes.
    (5) Without regard to any other term or condition of the coverage, 
other than--
    (i) The exclusion or coordination of benefits (to the extent not 
inconsistent with benefits for an emergency medical condition, as 
defined in paragraph (c)(1) of this section).
    (ii) An affiliation or waiting period (each as defined in Sec.  
144.103 of this subchapter).
    (iii) Applicable cost sharing.
    (c) Definitions. In this section--
    (1) Emergency medical condition means a medical condition, 
including a mental health condition or substance use disorder, 
manifesting itself by acute symptoms of sufficient severity (including 
severe pain) such that a prudent layperson, who possesses an average 
knowledge of health and medicine, could reasonably expect the absence 
of immediate medical attention to result in a condition described in 
clause (i), (ii), or (iii) of section 1867(e)(1)(A) of the Social 
Security Act (42 U.S.C. 1395dd(e)(1)(A)). (In that provision of the 
Social Security Act, clause (i) refers to placing the health of the 
individual (or, with respect to a pregnant woman, the health of the 
woman or her unborn child) in serious jeopardy; clause (ii) refers to 
serious impairment to bodily functions; and clause (iii) refers to 
serious dysfunction of any bodily organ or part.)
    (2) Emergency services means, with respect to an emergency medical 
condition--
    (i) In general. (A) An appropriate medical screening examination 
(as required under section 1867 of the Social Security Act (42 U.S.C. 
1395dd) or as would be required under such section if such section 
applied to an independent freestanding emergency department) that is 
within the capability of the emergency department of a hospital or of 
an independent freestanding emergency department, as applicable, 
including ancillary services routinely available to the emergency 
department to evaluate such emergency medical condition; and
    (B) Within the capabilities of the staff and facilities available 
at the hospital or the independent freestanding emergency department, 
as applicable, such further medical examination and treatment as are 
required under section 1867 of the Social Security Act (42 U.S.C. 
1395dd), or as would be required under such section if such section 
applied to an independent freestanding emergency department, to 
stabilize the patient (regardless of the department of the hospital in 
which such further examination or treatment is furnished).
    (ii) Inclusion of additional services. (A) Subject to paragraph 
(c)(2)(ii)(B) of this section, items and services--
    (1) For which benefits are provided or covered under the plan or 
coverage; and
    (2) That are furnished by a nonparticipating provider or 
nonparticipating emergency facility (regardless of the department of 
the hospital in which such items or services are furnished) after the 
participant, beneficiary, or enrollee is stabilized and as part of 
outpatient observation or an inpatient or outpatient stay with respect 
to the visit in which the services described in paragraph (c)(2)(i) of 
this section are furnished.
    (B) Items and services described in paragraph (c)(2)(ii)(A) of this 
section are not included as emergency services if all of the conditions 
in Sec.  149.410(b) are met.
    (3) To stabilize, with respect to an emergency medical condition, 
has the meaning given such term in section 1867(e)(3) of the Social 
Security Act (42 U.S.C. 1395dd(e)(3)).
    (d) Applicability date. The provisions of this section are 
applicable with respect to plan years (in the individual market, policy 
years) beginning on or after January 1, 2022.


Sec.  149.120  Preventing surprise medical bills for non-emergency 
services performed by nonparticipating providers at certain 
participating facilities.

    (a) In general. If a group health plan, or a health insurance 
issuer offering group or individual health insurance coverage, provides 
or covers any benefits with respect to items and

[[Page 36974]]

services described in paragraph (b) of this section, the plan or issuer 
must cover the items and services when furnished by a nonparticipating 
provider in accordance with paragraph (c) of this section.
    (b) Items and services described. The items and services described 
in this paragraph (b) are items and services (other than emergency 
services) furnished to a participant, beneficiary, or enrollee by a 
nonparticipating provider with respect to a visit at a participating 
health care facility, unless the provider has satisfied the notice and 
consent criteria of Sec.  149.420(c) through (i) with respect to such 
items and services.
    (c) Coverage requirements. In the case of items and services 
described in paragraph (b) of this section, the plan or issuer--
    (1) Must not impose a cost-sharing requirement for the items and 
services that is greater than the cost-sharing requirement that would 
apply if the items or services had been furnished by a participating 
provider.
    (2) Must calculate the cost-sharing requirements as if the total 
amount that would have been charged for the items and services by such 
participating provider were equal to the recognized amount for the 
items and services.
    (3) Not later than 30 calendar days after the bill for the items or 
services is transmitted by the provider (or in cases where the 
recognized amount is determined by a specified State law or All-Payer 
Model Agreement, such other timeframe as specified under the State law 
or All-Payer Model Agreement), must determine whether the items and 
services are covered under the plan or coverage and, if the items and 
services are covered, send to the provider an initial payment or a 
notice of denial of payment. For purposes of this paragraph (c)(3), the 
30-calendar-day period begins on the date the plan or issuer receives 
the information necessary to decide a claim for payment for the items 
or services.
    (4) Must pay a total plan or coverage payment directly to the 
nonparticipating provider that is equal to the amount by which the out-
of-network rate for the items and services involved exceeds the cost-
sharing amount for the items and services (as determined in accordance 
with paragraphs (c)(1) and (2) of this section), less any initial 
payment amount made under paragraph (c)(3) of this section. The total 
plan or coverage payment must be made in accordance with the timing 
requirement described in section 2799A-1(c)(6) of the PHS Act, or in 
cases where the out-of-network rate is determined under a specified 
State law or All-Payer Model Agreement, such other timeframe as 
specified by the State law or All-Payer Model Agreement.
    (5) Must count any cost-sharing payments made by the participant, 
beneficiary, or enrollee toward any in-network deductible and in-
network out-of-pocket maximums (including the annual limitation on cost 
sharing under section 2707(b) of the PHS Act) (as applicable) applied 
under the plan or coverage (and the in-network deductible and out-of-
pocket maximums must be applied) in the same manner as if such cost-
sharing payments were made with respect to items and services furnished 
by a participating provider.
    (d) Applicability date. The provisions of this section are 
applicable with respect to plan years (in the individual market, policy 
years) beginning on or after January 1, 2022.


Sec.  149.130  Preventing surprise medical bills for air ambulance 
services.

    (a) In general. If a group health plan, or a health insurance 
issuer offering group or individual health insurance coverage, provides 
or covers any benefits for air ambulance services, the plan or issuer 
must cover such services from a nonparticipating provider of air 
ambulance services in accordance with paragraph (b) of this section.
    (b) Coverage requirements. A plan or issuer described in paragraph 
(a) of this section must provide coverage of air ambulance services in 
the following manner--
    (1) The cost-sharing requirements with respect to the services must 
be the same requirements that would apply if the services were provided 
by a participating provider of air ambulance services.
    (2) The cost-sharing requirement must be calculated as if the total 
amount that would have been charged for the services by a participating 
provider of air ambulance services were equal to the lesser of the 
qualifying payment amount (as determined in accordance with Sec.  
149.140) or the billed amount for the services.
    (3) The cost-sharing amounts must be counted towards any in-network 
deductible and in-network out-of-pocket maximums (including the annual 
limitation on cost sharing under section 2707(b) of the PHS Act) (as 
applicable) applied under the plan or coverage (and the in-network 
deductible and out-of-pocket maximums must be applied) in the same 
manner as if the cost-sharing payments were made with respect to 
services furnished by a participating provider of air ambulance 
services.
    (4) The plan or issuer must--
    (i) Not later than 30 calendar days after the bill for the services 
is transmitted by the provider of air ambulance services, determine 
whether the services are covered under the plan or coverage and, if the 
services are covered, send to the provider an initial payment or a 
notice of denial of payment. For purposes of this paragraph (b)(4)(i), 
the 30-calendar-day period begins on the date the plan or issuer 
receives the information necessary to decide a claim for payment for 
the services.
    (ii) Pay a total plan or coverage payment directly to the 
nonparticipating provider furnishing such air ambulance services that 
is equal to the amount by which the out-of-network rate for the 
services exceeds the cost-sharing amount for the services (as 
determined in accordance with paragraphs (b)(1) and (2) of this 
section), less any initial payment amount made under paragraph 
(b)(4)(i) of this section. The total plan or coverage payment must be 
made in accordance with the timing requirement described in section 
2799A-2(b)(6) of the PHS Act, or in cases where the out-of-network rate 
is determined under a specified State law or All-Payer Model Agreement, 
such other timeframe as specified by the State law or All-Payer Model 
Agreement.
    (c) Applicability date. The provisions of this section are 
applicable with respect to plan years (in the individual market, policy 
years) beginning on or after January 1, 2022.


Sec.  149.140  Methodology for calculating qualifying payment amount.

    (a) Definitions. For purposes of this section, the following 
definitions apply:
    (1) Contracted rate means the total amount (including cost sharing) 
that a group health plan or health insurance issuer has contractually 
agreed to pay a participating provider, facility, or provider of air 
ambulance services for covered items and services, whether directly or 
indirectly, including through a third-party administrator or pharmacy 
benefit manager. Solely for purposes of this definition, a single case 
agreement, letter of agreement, or other similar arrangement between a 
provider, facility, or air ambulance provider and a plan or issuer, 
used to supplement the network of the plan or coverage for a specific 
participant, beneficiary, or enrollee in unique circumstances, does not 
constitute a contract.
    (2) Derived amount has the meaning given the term in Sec.  147.210 
of this subchapter.
    (3) Eligible database means--
    (i) A State all-payer claims database; or

[[Page 36975]]

    (ii) Any third-party database which--
    (A) Is not affiliated with, or owned or controlled by, any health 
insurance issuer, or a health care provider, facility, or provider of 
air ambulance services (or any member of the same controlled group as, 
or under common control with, such an entity). For purposes of this 
paragraph (a)(3)(ii)(A), the term controlled group means a group of two 
or more persons that is treated as a single employer under sections 
52(a), 52(b), 414(m), or 414(o) of the Internal Revenue Code of 1986, 
as amended;
    (B) Has sufficient information reflecting in-network amounts paid 
by group health plans or health insurance issuers offering group or 
individual health insurance coverage to providers, facilities, or 
providers of air ambulance services for relevant items and services 
furnished in the applicable geographic region; and
    (C) Has the ability to distinguish amounts paid to participating 
providers and facilities by commercial payers, such as group health 
plans and health insurance issuers offering group or individual health 
insurance coverage, from all other claims data, such as amounts billed 
by nonparticipating providers or facilities and amounts paid by public 
payers, including the Medicare program under title XVIII of the Social 
Security Act, the Medicaid program under title XIX of the Social 
Security Act (or a demonstration project under title XI of the Social 
Security Act), or the Children's Health Insurance Program under title 
XXI of the Social Security Act.
    (4) Facility of the same or similar facility type means, with 
respect to emergency services, either--
    (i) An emergency department of a hospital; or
    (ii) An independent freestanding emergency department.
    (5) First coverage year means, with respect to an item or service 
for which coverage is not offered in 2019 under a group health plan or 
group or individual health insurance coverage offered by a health 
insurance issuer, the first year after 2019 for which coverage for such 
item or service is offered under that plan or coverage.
    (6) First sufficient information year means, with respect to a 
group health plan or group or individual health insurance coverage 
offered by a health insurance issuer--
    (i) In the case of an item or service for which the plan or 
coverage does not have sufficient information to calculate the median 
of the contracted rates described in paragraph (b) of this section in 
2019, the first year after 2022 for which the plan or issuer has 
sufficient information to calculate the median of such contracted rates 
in the year immediately preceding that first year after 2022; and
    (ii) In the case of a newly covered item or service, the first year 
after the first coverage year for such item or service with respect to 
such plan or coverage for which the plan or issuer has sufficient 
information to calculate the median of the contracted rates described 
in paragraph (b) of this section in the year immediately preceding that 
first year.
    (7) Geographic region means--
    (i) For items and services other than air ambulance services--
    (A) Subject to paragraphs (a)(7)(i)(B) and (C) of this section, one 
region for each metropolitan statistical area, as described by the U.S. 
Office of Management and Budget and published by the U.S. Census 
Bureau, in a State, and one region consisting of all other portions of 
the State.
    (B) If a plan or issuer does not have sufficient information to 
calculate the median of the contracted rates described in paragraph (b) 
of this section for an item or service provided in a geographic region 
described in paragraph (a)(7)(i)(A) of this section, one region 
consisting of all metropolitan statistical areas, as described by the 
U.S. Office of Management and Budget and published by the U.S. Census 
Bureau, in the State, and one region consisting of all other portions 
of the State.
    (C) If a plan or issuer does not have sufficient information to 
calculate the median of the contracted rates described in paragraph (b) 
of this section for an item or service provided in a geographic region 
described in paragraph (a)(7)(i)(B) of this section, one region 
consisting of all metropolitan statistical areas, as described by the 
U.S. Office of Management and Budget and published by the U.S. Census 
Bureau, in each Census division and one region consisting of all other 
portions of the Census division, as described by the U.S. Census 
Bureau.
    (ii) For air ambulance services--
    (A) Subject to paragraph (a)(7)(ii)(B) of this section, one region 
consisting of all metropolitan statistical areas, as described by the 
U.S. Office of Management and Budget and published by the U.S. Census 
Bureau, in the State, and one region consisting of all other portions 
of the State, determined based on the point of pick-up (as defined in 
42 CFR 414.605).
    (B) If a plan or issuer does not have sufficient information to 
calculate the median of the contracted rates described in paragraph (b) 
of this section for an air ambulance service provided in a geographic 
region described in paragraph (a)(7)(ii)(A) of this section, one region 
consisting of all metropolitan statistical areas, as described by the 
U.S. Office of Management and Budget and published by the U.S. Census 
Bureau, in each Census division and one region consisting of all other 
portions of the Census division, as described by the U.S. Census 
Bureau, determined based on the point of pick-up (as defined in 42 CFR 
414.605).
    (8) Insurance market is, irrespective of the State, one of the 
following:
    (i) The individual market (other than short-term, limited-duration 
insurance or individual health insurance coverage that consists solely 
of excepted benefits).
    (ii) The large group market (other than coverage that consists 
solely of excepted benefits).
    (iii) The small group market (other than coverage that consists 
solely of excepted benefits).
    (iv) In the case of a self-insured group health plan, all self-
insured group health plans (other than account-based plans, as defined 
in Sec.  147.126(d)(6)(i) of this subchapter, and plans that consist 
solely of excepted benefits) of the same plan sponsor, or at the option 
of the plan sponsor, all self-insured group health plans administered 
by the same entity (including a third-party administrator contracted by 
the plan), to the extent otherwise permitted by law, that is 
responsible for calculating the qualifying payment amount on behalf of 
the plan.
    (9) Modifiers mean codes applied to the service code that provide a 
more specific description of the furnished item or service and that may 
adjust the payment rate or affect the processing or payment of the code 
billed.
    (10) Newly covered item or service means an item or service for 
which coverage was not offered in 2019 under a group health plan or 
group or individual health insurance coverage offered by a health 
insurance issuer, but that is offered under the plan or coverage in a 
year after 2019.
    (11) New service code means a service code that was created or 
substantially revised in a year after 2019.
    (12) Provider in the same or similar specialty means the practice 
specialty of a provider, as identified by the plan or issuer consistent 
with the plan's or issuer's usual business practice, except that, with 
respect to air ambulance services, all providers of air ambulance 
services are considered to be a single provider specialty.
    (13) Same or similar item or service means a health care item or 
service billed under the same service code, or

[[Page 36976]]

a comparable code under a different procedural code system.
    (14) Service code means the code that describes an item or service 
using the Current Procedural Terminology (CPT) code, Healthcare Common 
Procedure Coding System (HCPCS), or Diagnosis-Related Group (DRG) 
codes.
    (15) Sufficient information means, for purposes of determining 
whether a group health plan or health insurance issuer offering group 
or individual health insurance coverage has sufficient information to 
calculate the median of the contracted rates described in paragraph (b) 
of this section--
    (i) The plan or issuer has at least three contracted rates on 
January 31, 2019, to calculate the median of the contracted rates in 
accordance with paragraph (b) of this section; or
    (ii) For an item or service furnished during a year after 2022 that 
is used to determine the first sufficient information year--
    (A) The plan or issuer has at least three contracted rates on 
January 31 of the year immediately preceding that year to calculate the 
median of the contracted rates in accordance with paragraph (b) of this 
section; and
    (B) The contracted rates under paragraph (a)(15)(ii)(A) of this 
section account (or are reasonably expected to account) for at least 25 
percent of the total number of claims paid for that item or service for 
that year with respect to all plans of the sponsor (or the 
administering entity as provided in paragraph (a)(8)(iv) of this 
section, if applicable) or all coverage offered by the issuer that are 
offered in the same insurance market.
    (16) Qualifying payment amount means, with respect to a sponsor of 
a group health plan or health insurance issuer offering group or 
individual health insurance coverage, the amount calculated using the 
methodology described in paragraph (c) of this section.
    (17) Underlying fee schedule rate means the rate for a covered item 
or service from a particular participating provider, providers, or 
facility that a group health plan or health insurance issuer uses to 
determine a participant's, beneficiary's, or enrollee's cost-sharing 
liability for the item or service, when that rate is different from the 
contracted rate.
    (b) Methodology for calculation of median contracted rate--(1) In 
general. The median contracted rate for an item or service is 
calculated by arranging in order from least to greatest the contracted 
rates of all group health plans of the plan sponsor (or the 
administering entity as provided in paragraph (a)(8)(iv) of this 
section, if applicable) or all group or individual health insurance 
coverage offered by the issuer in the same insurance market for the 
same or similar item or service that is provided by a provider in the 
same or similar specialty or facility of the same or similar facility 
type and provided in the geographic region in which the item or service 
is furnished and selecting the middle number. If there are an even 
number of contracted rates, the median contracted rate is the average 
of the middle two contracted rates. In determining the median 
contracted rate, the amount negotiated under each contract is treated 
as a separate amount. If a plan or issuer has a contract with a 
provider group or facility, the rate negotiated with that provider 
group or facility under the contract is treated as a single contracted 
rate if the same amount applies with respect to all providers of such 
provider group or facility under the single contract. However, if a 
plan or issuer has a contract with multiple providers, with separate 
negotiated rates with each particular provider, each unique contracted 
rate with an individual provider constitutes a single contracted rate. 
Further, if a plan or issuer has separate contracts with individual 
providers, the contracted rate under each such contract constitutes a 
single contracted rate (even if the same amount is paid to multiple 
providers under separate contracts).
    (2) Calculation rules. In calculating the median contracted rate, a 
plan or issuer must:
    (i) Calculate the median contracted rate with respect to all plans 
of such sponsor (or the administering entity as provided in paragraph 
(a)(8)(iv) of this section, if applicable) or all coverage offered by 
such issuer that are offered in the same insurance market;
    (ii) Calculate the median contracted rate using the full contracted 
rate applicable to the service code, except that the plan or issuer 
must--
    (A) Calculate separate median contracted rates for CPT code 
modifiers ``26'' (professional component) and ``TC'' (technical 
component);
    (B) For anesthesia services, calculate a median contracted rate for 
the anesthesia conversion factor for each service code;
    (C) For air ambulance services, calculate a median contracted rate 
for the air mileage service codes (A0435 and A0436); and
    (D) Where contracted rates otherwise vary based on applying a 
modifier code, calculate a separate median contracted rate for each 
such service code-modifier combination;
    (iii) In the case of payments made by a plan or issuer that are not 
on a fee-for-service basis (such as bundled or capitation payments), 
calculate a median contracted rate for each item or service using the 
underlying fee schedule rates for the relevant items or services. If 
the plan or issuer does not have an underlying fee schedule rate for 
the item or service, it must use the derived amount to calculate the 
median contracted rate; and
    (iv) Exclude risk sharing, bonus, penalty, or other incentive-based 
or retrospective payments or payment adjustments.
    (3) Provider specialties; facility types. (i) If a plan or issuer 
has contracted rates that vary based on provider specialty for a 
service code, the median contracted rate is calculated separately for 
each provider specialty, as applicable.
    (ii) If a plan or issuer has contracted rates for emergency 
services that vary based on facility type for a service code, the 
median contracted rate is calculated separately for each facility of 
the same or similar facility type.
    (c) Methodology for calculation of the qualifying payment amount--
(1) In general. (i) For an item or service (other than items or 
services described in paragraphs (c)(1)(iii) through (vii) of this 
section) furnished during 2022, the plan or issuer must calculate the 
qualifying payment amount by increasing the median contracted rate (as 
determined in accordance with paragraph (b) of this section) for the 
same or similar item or service under such plans or coverage, 
respectively, on January 31, 2019, by the combined percentage increase 
as published by the Department of the Treasury and the Internal Revenue 
Service to reflect the percentage increase in the CPI-U over 2019, such 
percentage increase over 2020, and such percentage increase over 2021.
    (A) The combined percentage increase for 2019, 2020, and 2021 will 
be published in guidance by the Internal Revenue Service. The 
Department of the Treasury and the Internal Revenue Service will 
calculate the percentage increase using the CPI-U published by the 
Bureau of Labor Statistics of the Department of Labor.
    (B) For purposes of this paragraph (c)(1)(i), the CPI-U for each 
calendar year is the average of the CPI-U as of the close of the 12-
month period ending on August 31 of the calendar year, rounded to 10 
decimal places.
    (C) The combined percentage increase for 2019, 2020, and 2021 will 
be calculated as:

(CPI-U 2019/CPI-U 2018) x (CPI-U 2020/CPI-U 2019) x (CPI-U 2021/CPI-U 
2020)


[[Page 36977]]


    (ii) For an item or service (other than items or services described 
in paragraphs (c)(1)(iii) through (vii) of this section) furnished 
during 2023 or a subsequent year, the plan or issuer must calculate the 
qualifying payment amount by increasing the qualifying payment amount 
determined under paragraph (c)(1)(i) of this section, for such an item 
or service furnished in the immediately preceding year, by the 
percentage increase as published by the Department of the Treasury and 
the Internal Revenue Service.
    (A) The percentage increase for any year after 2022 will be 
published in guidance by the Internal Revenue Service. The Department 
of the Treasury and Internal Revenue Service will calculate the 
percentage increase using the CPI-U published by the Bureau of Labor 
Statistics of the Department of Labor.
    (B) For purposes of this paragraph (c)(1)(ii), the CPI-U for each 
calendar year is the average of the CPI-U as of the close of the 12-
month period ending on August 31 of the calendar year, rounded to 10 
decimal places.
    (C) The combined percentage increase for any year will be 
calculated as CPI-U present year/CPI-U prior year.
    (iii) For anesthesia services furnished during 2022, the plan or 
issuer must calculate the qualifying payment amount by first increasing 
the median contracted rate for the anesthesia conversion factor (as 
determined in accordance with paragraph (b) of this section) for the 
same or similar item or service under such plans or coverage, 
respectively, on January 31, 2019, in accordance with paragraph 
(c)(1)(i) of this section (referred to in this section as the indexed 
median contracted rate for the anesthesia conversion factor). The plan 
or issuer must then multiply the indexed median contracted rate for the 
anesthesia conversion factor by the sum of the base unit, time unit, 
and physical status modifier units of the participant, beneficiary, or 
enrollee to whom anesthesia services are furnished to determine the 
qualifying payment amount.
    (A) The base units for an anesthesia service code are the base 
units for that service code specified in the most recent edition (as of 
the date of service) of the American Society of Anesthesiologists 
Relative Value Guide.
    (B) The time unit is measured in 15-minute increments or a fraction 
thereof.
    (C) The physical status modifier on a claim is a standard modifier 
describing the physical status of the patient and is used to 
distinguish between various levels of complexity of the anesthesia 
services provided, and is expressed as a unit with a value between zero 
(0) and three (3).
    (D) The anesthesia conversion factor is expressed in dollars per 
unit and is a contracted rate negotiated with the plan or issuer.
    (iv) For anesthesia services furnished during 2023 or a subsequent 
year, the plan or issuer must calculate the qualifying payment amount 
by first increasing the indexed median contracted rate for the 
anesthesia conversion factor, determined under paragraph (c)(1)(iii) of 
this section for such services furnished in the immediately preceding 
year, in accordance with paragraph (c)(1)(ii) of this section. The plan 
or issuer must then multiply that amount by the sum of the base unit, 
time unit, and physical status modifier units for the participant, 
beneficiary, or enrollee to whom anesthesia services are furnished to 
determine the qualifying payment amount.
    (v) For air ambulance services billed using the air mileage service 
codes (A0435 and A0436) that are furnished during 2022, the plan or 
issuer must calculate the qualifying payment amount for services billed 
using the air mileage service codes by first increasing the median 
contracted rate (as determined in accordance with paragraph (b) of this 
section), in accordance with paragraph (c)(1)(i) of this section 
(referred to in this section as the indexed median air mileage rate). 
The plan or issuer must then multiply the indexed median air mileage 
rate by the number of loaded miles provided to the participant, 
beneficiary, or enrollee to determine the qualifying payment amount.
    (A) The air mileage rate is expressed in dollars per loaded mile 
flown, is expressed in statute miles (not nautical miles), and is a 
contracted rate negotiated with the plan or issuer.
    (B) The number of loaded miles is the number of miles a patient is 
transported in the air ambulance vehicle.
    (C) The qualifying payment amount for other service codes 
associated with air ambulance services is calculated in accordance with 
paragraphs (c)(1)(i) and (ii) of this section.
    (vi) For air ambulance services billed using the air mileage 
service codes (A0435 and A0436) that are furnished during 2023 or a 
subsequent year, the plan or issuer must calculate the qualifying 
payment amount by first increasing the indexed median air mileage rate, 
determined under paragraph (c)(1)(v) of this section for such services 
furnished in the immediately preceding year, in accordance with 
paragraph (c)(1)(ii) of this section. The plan or issuer must then 
multiply the indexed median air mileage rate by the number of loaded 
miles provided to the participant, beneficiary, or enrollee to 
determine the qualifying payment amount.
    (vii) For any other items or services for which a plan or issuer 
generally determines payment for the same or similar items or services 
by multiplying a contracted rate by another unit value, the plan or 
issuer must calculate the qualifying payment amount using a methodology 
that is similar to the methodology required under paragraphs 
(c)(1)(iii) through (vi) of this section and reasonably reflects the 
payment methodology for same or similar items or services.
    (2) New plans and coverage. With respect to a sponsor of a group 
health plan or health insurance issuer offering group or individual 
health insurance coverage in a geographic region in which the sponsor 
or issuer, respectively, did not offer any group health plan or health 
insurance coverage during 2019--
    (i) For the first year in which the group health plan, group health 
insurance coverage, or individual health insurance coverage, 
respectively, is offered in such region--
    (A) If the plan or issuer has sufficient information to calculate 
the median of the contracted rates described in paragraph (b) of this 
section, the plan or issuer must calculate the qualifying payment 
amount in accordance with paragraph (c)(1) of this section for items 
and services that are covered by the plan or coverage and furnished 
during the first year; and
    (B) If the plan or issuer does not have sufficient information to 
calculate the median of the contracted rates described in paragraph (b) 
of this section for an item or service provided in a geographic region, 
the plan or issuer must determine the qualifying payment amount for the 
item or service in accordance with paragraph (c)(3)(i) of this section.
    (ii) For each subsequent year the group health plan, group health 
insurance coverage, or individual health insurance coverage, 
respectively, is offered in the region, the plan or issuer must 
calculate the qualifying payment amount by increasing the qualifying 
payment amount determined under this paragraph (c)(2) for the items and 
services furnished in the immediately preceding year, in accordance 
with paragraph (c)(1)(ii), (iv), or (vi) of this section, as 
applicable.
    (3) Insufficient information; newly covered items and services. In 
the case of a plan or issuer that does not have

[[Page 36978]]

sufficient information to calculate the median of the contracted rates 
described in paragraph (b) of this section in 2019 (or, in the case of 
a newly covered item or service, in the first coverage year for such 
item or service with respect to such plan or coverage if the plan or 
issuer does not have sufficient information) for an item or service 
provided in a geographic region--
    (i) For an item or service furnished during 2022 (or, in the case 
of a newly covered item or service, during the first coverage year for 
the item or service with respect to the plan or coverage), the plan or 
issuer must calculate the qualifying payment amount by first 
identifying the rate that is equal to the median of the in-network 
allowed amounts for the same or similar item or service provided in the 
geographic region in the year immediately preceding the year in which 
the item or service is furnished (or, in the case of a newly covered 
item or service, the year immediately preceding such first coverage 
year) determined by the plan or issuer, respectively, through use of 
any eligible database, and then increasing that rate by the percentage 
increase in the CPI-U over such preceding year. For purposes of this 
section, in cases in which an eligible database is used to determine 
the qualifying payment amount with respect to an item or service 
furnished during a calendar year, the plan or issuer must use the same 
database for determining the qualifying payment amount for that item or 
service furnished through the last day of the calendar year, and if a 
different database is selected for some items or services, the basis 
for that selection must be one or more factors not directly related to 
the rate of those items or services (such as sufficiency of data for 
those items or services).
    (ii) For an item or service furnished in a subsequent year (before 
the first sufficient information year for such item or service with 
respect to such plan or coverage), the plan or issuer must calculate 
the qualifying payment amount by increasing the qualifying payment 
amount determined under paragraph (c)(3)(i) of this section or this 
paragraph (c)(3)(ii), as applicable, for such item or service for the 
year immediately preceding such subsequent year, by the percentage 
increase in CPI-U over such preceding year;
    (iii) For an item or service furnished in the first sufficient 
information year for such item or service with respect to such plan or 
coverage, the plan or issuer must calculate the qualifying payment 
amount in accordance with paragraph (c)(1)(i), (iii), or (v) of this 
section, as applicable, except that in applying such paragraph to such 
item or service, the reference to `furnished during 2022' is treated as 
a reference to furnished during such first sufficient information year, 
the reference to 'in 2019' is treated as a reference to such sufficient 
information year, and the increase described in such paragraph is not 
applied; and
    (iv) For an item or service furnished in any year subsequent to the 
first sufficient information year for such item or service with respect 
to such plan or coverage, the plan or issuer must calculate the 
qualifying payment amount in accordance with paragraph (c)(1)(ii), 
(iv), or (vi) of this section, as applicable, except that in applying 
such paragraph to such item or service, the reference to `furnished 
during 2023 or a subsequent year' is treated as a reference to 
furnished during the year after such first sufficient information year 
or a subsequent year.
    (4) New service codes. In the case of a plan or issuer that does 
not have sufficient information to calculate the median of the 
contracted rates described in paragraph (b) of this section and 
determine the qualifying payment amount under paragraphs (c)(1) through 
(3) of this section because the item or service furnished is billed 
under a new service code--
    (i) For an item or service furnished during 2022 (or, in the case 
of a newly covered item or service, during the first coverage year for 
the item or service with respect to the plan or coverage), the plan or 
issuer must identify a reasonably related service code that existed in 
the immediately preceding year and--
    (A) If the Centers for Medicare & Medicaid Services has established 
a Medicare payment rate for the item or service billed under the new 
service code, the plan or issuer must calculate the qualifying payment 
amount by first calculating the ratio of the rate that Medicare pays 
for the item or service billed under the new service code compared to 
the rate that Medicare pays for the item or service billed under the 
related service code, and then multiplying the ratio by the qualifying 
payment amount for an item or service billed under the related service 
code for the year in which the item or service is furnished.
    (B) If the Centers for Medicare & Medicaid Services has not 
established a Medicare payment rate for the item or service billed 
under the new service code, the plan or issuer must calculate the 
qualifying payment amount by first calculating the ratio of the rate 
that the plan or issuer reimburses for the item or service billed under 
the new service code compared to the rate that the plan or issuer 
reimburses for the item or service billed under the related service 
code, and then multiplying the ratio by the qualifying payment amount 
for an item or service billed under the related service code.
    (ii) For an item or service furnished in a subsequent year (before 
the first sufficient information year for such item or service with 
respect to such plan or coverage or before the first year for which an 
eligible database has sufficient information to a calculate a rate 
under paragraph (c)(3)(i) of this section in the immediately preceding 
year), the plan or issuer must calculate the qualifying payment amount 
by increasing the qualifying payment amount determined under paragraph 
(c)(4)(i) of this section or this paragraph (c)(4)(ii), as applicable, 
for such item or service for the year immediately preceding such 
subsequent year, by the percentage increase in CPI-U over such 
preceding year;
    (iii) For an item or service furnished in the first sufficient 
information year for such item or service with respect to such plan or 
coverage or the first year for which an eligible database has 
sufficient information to calculate a rate under paragraph (c)(3)(i) of 
this section in the immediately preceding year, the plan or issuer must 
calculate the qualifying payment amount in accordance with paragraph 
(c)(3) of this section.
    (d) Information to be shared about qualifying payment amount. In 
cases in which the recognized amount with respect to an item or service 
furnished by a nonparticipating provider, nonparticipating emergency 
facility, or nonparticipating provider of air ambulance services is the 
qualifying payment amount, the plan or issuer must provide in writing, 
in paper or electronic form, to the provider or facility, as 
applicable--
    (1) With each initial payment or notice of denial of payment under 
Sec.  149.110, Sec.  149.120, or Sec.  149.130:
    (i) The qualifying payment amount for each item or service 
involved;
    (ii) A statement to certify that, based on the determination of the 
plan or issuer--
    (A) The qualifying payment amount applies for purposes of the 
recognized amount (or, in the case of air ambulance services, for 
calculating the participant's, beneficiary's, or enrollee's cost 
sharing); and
    (B) Each qualifying payment amount shared with the provider or 
facility was determined in compliance with this section;
    (iii) A statement that if the provider or facility, as applicable, 
wishes to

[[Page 36979]]

initiate a 30-day open negotiation period for purposes of determining 
the amount of total payment, the provider or facility may contact the 
appropriate person or office to initiate open negotiation, and that if 
the 30-day negotiation period does not result in a determination, 
generally, the provider or facility may initiate the independent 
dispute resolution process within 4 days after the end of the open 
negotiation period; and
    (iv) Contact information, including a telephone number and email 
address, for the appropriate person or office to initiate open 
negotiations for purposes of determining an amount of payment 
(including cost sharing) for such item or service.
    (2) In a timely manner upon request of the provider or facility:
    (i) Information about whether the qualifying payment amount for 
items and services involved included contracted rates that were not on 
a fee-for-service basis for those specific items and services and 
whether the qualifying payment amount for those items and services was 
determined using underlying fee schedule rates or a derived amount;
    (ii) If a plan or issuer uses an eligible database under paragraph 
(c)(3) of this section to determine the qualifying payment amount, 
information to identify which database was used; and
    (iii) If a related service code was used to determine the 
qualifying payment amount for an item or service billed under a new 
service code under paragraph (c)(4)(i) or (ii) of this section, 
information to identify the related service code; and
    (iv) If applicable, a statement that the plan's or issuer's 
contracted rates include risk-sharing, bonus, penalty, or other 
incentive-based or retrospective payments or payment adjustments for 
the items and services involved (as applicable) that were excluded for 
purposes of calculating the qualifying payment amount.
    (e) Certain access fees to databases. In the case of a plan or 
issuer that, pursuant to this section, uses an eligible database to 
determine the qualifying payment amount for an item or service, the 
plan or issuer is responsible for any costs associated with accessing 
such database.
    (f) Audits. The procedures described in part 150 of this subchapter 
apply with respect to ensuring that a plan or coverage is in compliance 
with the requirement of applying a qualifying payment amount under this 
subpart and ensuring that such amount so applied satisfies the 
requirements under this section, as applicable.
    (g) Applicability date. The provisions of this section are 
applicable with respect to plan years (in the individual market, policy 
years) beginning on or after January 1, 2022.


Sec.  149.150  Complaints process for surprise medical bills regarding 
group health plans and group and individual health insurance coverage.

    (a) Scope and definitions--(1) Scope. This section establishes a 
process to receive and resolve complaints regarding information that a 
specific group health plan or health insurance issuer offering group or 
individual health insurance coverage may be failing to meet the 
requirements under this subpart, which may warrant an investigation.
    (2) Definitions. In this section--
    (i) Complaint means a communication, written or oral, that 
indicates there has been a potential violation of the requirements 
under subpart B of this part, whether or not a violation actually 
occurred.
    (ii) Complainant means any individual, or their authorized 
representative, who files a complaint as defined in paragraph (a)(2)(i) 
of this section.
    (b) Complaints process. (1) HHS will consider the date a complaint 
is filed to be the date upon which HHS receives an oral or written 
statement that identifies information about the complaint sufficient to 
identify the parties involved and the action or inaction complained of.
    (2) HHS will notify complainants, by oral or written means, of 
receipt of the complaint no later than 60 business days after the 
complaint is received. HHS will include a response acknowledging 
receipt of the complaint, notifying the complainant of their rights and 
obligations under the complaints process, and describing the next steps 
of the complaints resolution process. As part of the response, HHS may 
request additional information needed to process the complaint. Such 
additional information may include:
    (i) Explanations of benefits;
    (ii) Processed claims;
    (iii) Information about the health care provider, facility, or 
provider of air ambulance services involved;
    (iv) Information about the group health plan or health insurance 
issuer covering the individual;
    (v) Information to support a determination regarding whether the 
service was an emergency service or non-emergency service;
    (vi) The summary plan description, policy, certificate, contract of 
insurance, membership booklet, outline of coverage, or other evidence 
of coverage the plan or issuer provides to participants, beneficiaries, 
or enrollees;
    (vii) Documents regarding the facts in the complaint in the 
possession of, or otherwise attainable by, the complainant; or
    (viii) Any other information HHS may need to make a determination 
of facts for an investigation.
    (3) HHS will make reasonable efforts consistent with agency 
practices to notify the complainant of the outcome of the complaint 
after the submission is processed through appropriate methods as 
determined by HHS. A complaint is considered processed after HHS has 
reviewed the complaint and accompanying information and made an outcome 
determination. Based on the nature of the complaint and the plan or 
issuer involved, HHS may--
    (i) Refer the complainant to another appropriate Federal or State 
resolution process;
    (ii) Notify the complainant and make reasonable efforts to refer 
the complainant to the appropriate State or Federal regulatory 
authority if HHS receives a complaint where another entity has 
enforcement jurisdiction over the plan or issuer;
    (iii) Refer the plan or issuer for an investigation for enforcement 
action under 45 CFR part 150; or
    (iv) Provide the complainant with an explanation of the resolution 
of the complaint and any corrective action taken.

Subpart C--[Reserved]

Subpart D--Additional Patient Protections


Sec.  149.310  Choice of health care professional.

    (a) Choice of health care professional--(1) Designation of primary 
care provider--(i) In general. If a group health plan, or a health 
insurance issuer offering group or individual health insurance 
coverage, requires or provides for designation by a participant, 
beneficiary, or enrollee of a participating primary care provider, then 
the plan or issuer must permit each participant, beneficiary, or 
enrollee to designate any participating primary care provider who is 
available to accept the participant, beneficiary, or enrollee. In such 
a case, the plan or issuer must comply with the rules of paragraph 
(a)(4) of this section by informing each participant (in the individual 
market, primary subscriber) of the terms of the plan or health 
insurance coverage regarding designation of a primary care provider.

[[Page 36980]]

    (ii) Construction. Nothing in paragraph (a)(1)(i) of this section 
is to be construed to prohibit the application of reasonable and 
appropriate geographic limitations with respect to the selection of 
primary care providers, in accordance with the terms of the plan or 
coverage, the underlying provider contracts, and applicable State law.
    (iii) Example. The rules of this paragraph (a)(1) are illustrated 
by the following example:
    (A) Facts. A group health plan requires individuals covered under 
the plan to designate a primary care provider. The plan permits each 
individual to designate any primary care provider participating in the 
plan's network who is available to accept the individual as the 
individual's primary care provider. If an individual has not designated 
a primary care provider, the plan designates one until the individual 
has made a designation. The plan provides a notice that satisfies the 
requirements of paragraph (a)(4) of this section regarding the ability 
to designate a primary care provider.
    (B) Conclusion. In this Example, the plan has satisfied the 
requirements of paragraph (a) of this section.
    (2) Designation of pediatrician as primary care provider--(i) In 
general. If a group health plan, or a health insurance issuer offering 
group or individual health insurance coverage, requires or provides for 
the designation of a participating primary care provider for a child by 
a participant, beneficiary, or enrollee, the plan or issuer must permit 
the participant, beneficiary, or enrollee to designate a physician 
(allopathic or osteopathic) who specializes in pediatrics (including 
pediatric subspecialties, based on the scope of that provider's license 
under applicable State law) as the child's primary care provider if the 
provider participates in the network of the plan or issuer and is 
available to accept the child. In such a case, the plan or issuer must 
comply with the rules of paragraph (a)(4) of this section by informing 
each participant (in the individual market, primary subscriber) of the 
terms of the plan or health insurance coverage regarding designation of 
a pediatrician as the child's primary care provider.
    (ii) Construction. Nothing in paragraph (a)(2)(i) of this section 
is to be construed to waive any exclusions of coverage under the terms 
and conditions of the plan or health insurance coverage with respect to 
coverage of pediatric care.
    (iii) Examples. The rules of this paragraph (a)(2) are illustrated 
by the following examples:
    (A) Example 1--(1) Facts. A group health plan's HMO designates for 
each participant a physician who specializes in internal medicine to 
serve as the primary care provider for the participant and any 
beneficiaries. Participant A requests that Pediatrician B be designated 
as the primary care provider for A's child. B is a participating 
provider in the HMO's network and is available to accept the child.
    (2) Conclusion. In this Example 1, the HMO must permit A's 
designation of B as the primary care provider for A's child in order to 
comply with the requirements of this paragraph (a)(2).
    (B) Example 2--(1) Facts. Same facts as Example 1 (paragraph 
(a)(2)(iii)(A) of this section), except that A takes A's child to B for 
treatment of the child's severe shellfish allergies. B wishes to refer 
A's child to an allergist for treatment. The HMO, however, does not 
provide coverage for treatment of food allergies, nor does it have an 
allergist participating in its network, and it therefore refuses to 
authorize the referral.
    (2) Conclusion. In this Example 2, the HMO has not violated the 
requirements of this paragraph (a)(2) because the exclusion of 
treatment for food allergies is in accordance with the terms of A's 
coverage.
    (3) Patient access to obstetrical and gynecological care--(i) 
General rights--(A) Direct access. A group health plan, or a health 
insurance issuer offering group or individual health insurance 
coverage, described in paragraph (a)(3)(ii) of this section, may not 
require authorization or referral by the plan, issuer, or any person 
(including a primary care provider) in the case of a female 
participant, beneficiary, or enrollee who seeks coverage for 
obstetrical or gynecological care provided by a participating health 
care professional who specializes in obstetrics or gynecology. In such 
a case, the plan or issuer must comply with the rules of paragraph 
(a)(4) of this section by informing each participant (in the individual 
market, primary subscriber) that the plan may not require authorization 
or referral for obstetrical or gynecological care by a participating 
health care professional who specializes in obstetrics or gynecology. 
The plan or issuer may require such a professional to agree to 
otherwise adhere to the plan's or issuer's policies and procedures, 
including procedures regarding referrals and obtaining prior 
authorization and providing services pursuant to a treatment plan (if 
any) approved by the plan or issuer. For purposes of this paragraph 
(a)(3), a health care professional who specializes in obstetrics or 
gynecology is any individual (including a person other than a 
physician) who is authorized under applicable State law to provide 
obstetrical or gynecological care.
    (B) Obstetrical and gynecological care. A group health plan or 
health insurance issuer described in paragraph (a)(3)(ii) of this 
section must treat the provision of obstetrical and gynecological care, 
and the ordering of related obstetrical and gynecological items and 
services, pursuant to the direct access described under paragraph 
(a)(3)(i)(A) of this section, by a participating health care 
professional who specializes in obstetrics or gynecology as the 
authorization of the primary care provider.
    (ii) Application of paragraph. A group health plan, or a health 
insurance issuer offering group or individual health insurance 
coverage, is described in this paragraph (a)(3) if the plan or issuer--
    (A) Provides coverage for obstetrical or gynecological care; and
    (B) Requires the designation by a participant, beneficiary, or 
enrollee of a participating primary care provider.
    (iii) Construction. Nothing in paragraph (a)(3)(i) of this section 
is to be construed to--
    (A) Waive any exclusions of coverage under the terms and conditions 
of the plan or health insurance coverage with respect to coverage of 
obstetrical or gynecological care; or
    (B) Preclude the group health plan or health insurance issuer 
involved from requiring that the obstetrical or gynecological provider 
notify the primary care health care professional or the plan or issuer 
of treatment decisions.
    (iv) Examples. The rules of this paragraph (a)(3) are illustrated 
by the following examples:
    (A) Example 1--(1) Facts. A group health plan requires each 
participant to designate a physician to serve as the primary care 
provider for the participant and the participant's family. Participant 
A, a female, requests a gynecological exam with Physician B, an in-
network physician specializing in gynecological care. The group health 
plan requires prior authorization from A's designated primary care 
provider for the gynecological exam.
    (2) Conclusion. In this Example 1, the group health plan has 
violated the requirements of this paragraph (a)(3) because the plan 
requires prior authorization from A's primary care provider prior to 
obtaning gynecological services.
    (B) Example 2--(1) Facts. Same facts as Example 1 (paragraph 
(a)(3)(iv)(A) of this section) except that A seeks

[[Page 36981]]

gynecological services from C, an out-of-network provider.
    (2) Conclusion. In this Example 2, the group health plan has not 
violated the requirements of this paragraph (a)(3) by requiring prior 
authorization because C is not a participating health care provider.
    (C) Example 3--(1) Facts. Same facts as Example 1 (paragraph 
(a)(3)(iv)(A) of this section) except that the group health plan only 
requires B to inform A's designated primary care physician of treatment 
decisions.
    (2) Conclusion. In this Example 3, the group health plan has not 
violated the requirements of this paragraph (a)(3) because A has direct 
access to B without prior authorization. The fact that the group health 
plan requires the designated primary care physician to be notified of 
treatment decisions does not violate this paragraph (a)(3).
    (D) Example 4--(1) Facts. A group health plan requires each 
participant to designate a physician to serve as the primary care 
provider for the participant and the participant's family. The group 
health plan requires prior authorization before providing benefits for 
uterine fibroid embolization.
    (2) Conclusion. In this Example 4, the plan requirement for prior 
authorization before providing benefits for uterine fibroid 
embolization does not violate the requirements of this paragraph (a)(3) 
because, though the prior authorization requirement applies to 
obstetrical services, it does not restrict access to any providers 
specializing in obstetrics or gynecology.
    (4) Notice of right to designate a primary care provider--(i) In 
general. If a group health plan or health insurance issuer requires the 
designation by a participant, beneficiary, or enrollee of a primary 
care provider, the plan or issuer must provide a notice informing each 
participant (in the individual market, primary subscriber) of the terms 
of the plan or health insurance coverage regarding designation of a 
primary care provider and of the rights--
    (A) Under paragraph (a)(1)(i) of this section, that any 
participating primary care provider who is available to accept the 
participant, beneficiary, or enrollee can be designated;
    (B) Under paragraph (a)(2)(i) of this section, with respect to a 
child, that any participating physician who specializes in pediatrics 
can be designated as the primary care provider; and
    (C) Under paragraph (a)(3)(i) of this section, that the plan may 
not require authorization or referral for obstetrical or gynecological 
care by a participating health care professional who specializes in 
obstetrics or gynecology.
    (ii) Timing. In the case of a group health plan or group health 
insurance coverage, the notice described in paragraph (a)(4)(i) of this 
section must be included whenever the plan or issuer provides a 
participant with a summary plan description or other similar 
description of benefits under the plan or health insurance coverage. In 
the case of individual health insurance coverage, the notice described 
in paragraph (a)(4)(i) of this section must be included whenever the 
issuer provides a primary subscriber with a policy, certificate, or 
contract of health insurance.
    (iii) Model language. The following model language can be used to 
satisfy the notice requirement described in paragraph (a)(4)(i) of this 
section:
    (A) For plans and issuers that require or allow for the designation 
of primary care providers by participants, beneficiaries, or enrollees, 
insert:

    [Name of group health plan or health insurance issuer] generally 
[requires/allows] the designation of a primary care provider. You 
have the right to designate any primary care provider who 
participates in our network and who is available to accept you or 
your family members. [If the plan or health insurance coverage 
designates a primary care provider automatically, insert: Until you 
make this designation, [name of group health plan or health 
insurance issuer] designates one for you.] For information on how to 
select a primary care provider, and for a list of the participating 
primary care providers, contact the [plan administrator or issuer] 
at [insert contact information].

    (B) For plans and issuers that require or allow for the designation 
of a primary care provider for a child, add:
    For children, you may designate a pediatrician as the primary 
care provider.

    (C) For plans and issuers that provide coverage for obstetric or 
gynecological care and require the designation by a participant, 
beneficiary, or enrollee of a primary care provider, add:

    You do not need prior authorization from [name of group health 
plan or issuer] or from any other person (including a primary care 
provider) in order to obtain access to obstetrical or gynecological 
care from a health care professional in our network who specializes 
in obstetrics or gynecology. The health care professional, however, 
may be required to comply with certain procedures, including 
obtaining prior authorization for certain services, following a pre-
approved treatment plan, or procedures for making referrals. For a 
list of participating health care professionals who specialize in 
obstetrics or gynecology, contact the [plan administrator or issuer] 
at [insert contact information].

    (b) Applicability date. The provisions of this section are 
applicable with respect to plan years (in the individual market, policy 
years) beginning on or after January 1, 2022.

Subpart E--Health Care Provider, Health Care Facility, and Air 
Ambulance Service Provider Requirements


Sec.  149.410  Balance billing in cases of emergency services.

    (a) In general. In the case of a participant, beneficiary, or 
enrollee with benefits under a group health plan or group or individual 
health insurance coverage offered by a health insurance issuer and who 
is furnished emergency services (for which benefits are provided under 
the plan or coverage) with respect to an emergency medical condition 
with respect to a visit at an emergency department of a hospital or an 
independent freestanding emergency department--
    (1) A nonparticipating emergency facility must not bill, and must 
not hold liable, the participant, beneficiary, or enrollee for a 
payment amount for such emergency services (as defined in 26 CFR 
54.9816-4T(c)(2), 29 CFR 2590.716-4(c)(2), and Sec.  149.110(c)(2), as 
applicable) that exceeds the cost-sharing requirement for such services 
(as determined in accordance with 26 CFR 54.9816-4T(b)(3)(ii) and 
(iii), 29 CFR 2590.716-4(b)(3)(ii) and (iii), and Sec.  
149.110(b)(3)(ii) and (iii), as applicable).
    (2) A nonparticipating provider must not bill, and must not hold 
liable, the participant, beneficiary, or enrollee for a payment amount 
for an emergency service (as defined in 26 CFR 54.9816-4T(c)(2), 29 CFR 
2590.716-4(c)(2), and Sec.  149.110(c)(2), as applicable) furnished to 
such individual by such provider with respect to such emergency medical 
condition and visit for which the individual receives emergency 
services at the hospital or independent freestanding emergency 
department that exceeds the cost-sharing requirement for such service 
(as determined in accordance with 26 CFR 54.9816-4T(b)(3)(ii) and 
(iii), 29 CFR 2590.716-4(b)(3)(ii) and (iii), and Sec.  
149.110(b)(3)(ii) and (iii), as applicable).
    (b) Notice and consent to be treated by a nonparticipating provider 
or nonparticipating emergency facility. The requirements in paragraph 
(a) of this section do not apply with respect to items and services 
described in 26 CFR, 54.9816-4T(c)(2)(ii)(A), 29 CFR 2590.716-
4(c)(2)(ii)(A), Sec.  149.110(c)(2)(ii)(A), as applicable, and are not 
included as emergency services if all of the following conditions are 
met:
    (1) The attending emergency physician or treating provider 
determines that the participant,

[[Page 36982]]

beneficiary, or enrollee is able to travel using nonmedical 
transportation or nonemergency medical transportation to an available 
participating provider or facility located within a reasonable travel 
distance, taking into account the individual's medical condition. The 
attending emergency physician's or treating provider's determination is 
binding on the facility for purposes of this requirement.
    (2) The provider or facility furnishing such additional items and 
services satisfies the notice and consent criteria of Sec.  149.420(c) 
through (g) with respect to such items and services, provided that the 
written notice additionally satisfies paragraphs (b)(2)(i) and (ii) of 
this section, as applicable. In applying this paragraph (b)(2), a 
reference in Sec.  149.420 to a nonparticipating provider is deemed to 
include a nonparticipating emergency facility.
    (i) In the case of a participating emergency facility and a 
nonparticipating provider, the written notice must also include a list 
of any participating providers at the facility who are able to furnish 
such items and services involved and notification that the participant, 
beneficiary, or enrollee may be referred, at their option, to such a 
participating provider.
    (ii) In the case of a nonparticipating emergency facility, the 
written notice must include the good faith estimated amount that the 
participant, beneficiary, or enrollee may be charged for items or 
services furnished by the nonparticipating emergency facility or by 
nonparticipating providers with respect to the visit at such facility 
(including any item or service that is reasonably expected to be 
furnished by the nonparticipating emergency facility or 
nonparticipating providers in conjunction with such items or services).
    (3) The participant, beneficiary, or enrollee (or an authorized 
representative of such individual) is in a condition to receive the 
information described in Sec.  149.420, as determined by the attending 
emergency physician or treating provider using appropriate medical 
judgment, and to provide informed consent under such section, in 
accordance with applicable State law. For purposes of this section and 
Sec.  149.420, an authorized representative is an individual authorized 
under State law to provide consent on behalf of the participant, 
beneficiary, or enrollee, provided that the individual is not a 
provider affiliated with the facility or an employee of the facility, 
unless such provider or employee is a family member of the participant, 
beneficiary, or enrollee.
    (4) The provider or facility satisfies any additional requirements 
or prohibitions as may be imposed under State law.
    (c) Inapplicability of notice and consent exception to certain 
items and services. A nonparticipating provider or nonparticipating 
facility specified in paragraph (a) of this section will always be 
subject to the prohibitions in paragraph (a) of this section, with 
respect to items or services furnished as a result of unforeseen, 
urgent medical needs that arise at the time an item or service is 
furnished, regardless of whether the nonparticipating provider or 
nonparticipating emergency facility satisfied the notice and consent 
criteria in Sec.  149.420(c) through (g).
    (d) Retention of certain documents. A nonparticipating emergency 
facility (with respect to such facility or any nonparticipating 
provider at such facility) that obtains from a participant, 
beneficiary, or enrollee of a group health plan or group or individual 
health insurance coverage (or an authorized representative of such an 
individual) a written consent in accordance with Sec.  149.420(e), with 
respect to furnishing an item or service to such an individual, must 
retain the written notice and consent for at least a 7-year period 
after the date on which the item or service is so furnished. If a 
nonparticipating provider obtains a signed consent from a participant, 
beneficiary, or enrollee, or such individual's authorized 
representative, the provider may either coordinate with the facility to 
retain the written notice and consent for a 7-year period, or the 
provider must retain the written notice and consent for a 7-year 
period.
    (e) Notification to plan or issuer. In the case of a participant, 
beneficiary, or enrollee who is stabilized and furnished additional 
items and services described in Sec.  149.110(c)(2)(ii), a 
nonparticipating provider or nonparticipating emergency facility must 
notify the plan or issuer, respectively, when transmitting the bill for 
such items and services, either on the bill or in a separate document, 
as to whether all of the conditions described in paragraph (b) of this 
section are met with respect to each of the items and services for 
which the bill is submitted, and if applicable, provide to the plan or 
issuer a copy of the signed written notice and consent document 
described in paragraph (b)(2) of this section.
    (f) Applicability date. The provisions of this section are 
applicable with respect to emergency services furnished during a plan 
year (in the individual market, policy year) beginning on or after 
January 1, 2022.


Sec.  149.420  Balance billing in cases of non-emergency services 
performed by nonparticipating providers at certain participating health 
care facilities.

    (a) In general. A nonparticipating provider of a group health plan 
or group or individual health insurance coverage who provides items or 
services (other than emergency services) for which benefits are 
provided under the plan or coverage at a participating health care 
facility must not bill, and must not hold liable, a participant, 
beneficiary, or enrollee of such plan or coverage for a payment amount 
for such an item or service furnished by such provider with respect to 
a visit at the facility that exceeds the cost-sharing requirement for 
such item or service (as determined in accordance with 26 CFR 54.9816-
5T(c)(1) and (2), 29 CFR 2590.717-1(c)(1) and (2), and Sec.  
149.120(c)(1) and (2), as applicable), unless the provider (or the 
participating health care facility on behalf of the provider) satisfies 
the notice and consent criteria of paragraph (c) of this section.
    (b) Inapplicability of notice and consent exception to certain 
items and services. The notice and consent criteria in paragraphs (c) 
through (i) of this section do not apply, and a nonparticipating 
provider specified in paragraph (a) of this section will always be 
subject to the prohibitions in paragraph (a) of this section, with 
respect to the following services:
    (1) Ancillary services, meaning--
    (i) Items and services related to emergency medicine, 
anesthesiology, pathology, radiology, and neonatology, whether provided 
by a physician or non-physician practitioner;
    (ii) Items and services provided by assistant surgeons, 
hospitalists, and intensivists;
    (iii) Diagnostic services, including radiology and laboratory 
services; and
    (iv) Items and services provided by a nonparticipating provider if 
there is no participating provider who can furnish such item or service 
at such facility.
    (2) Items or services furnished as a result of unforeseen, urgent 
medical needs that arise at the time an item or service is furnished, 
regardless of whether the nonparticipating provider satisfied the 
notice and consent criteria in paragraph (c) of this section.
    (c) Notice and consent to be treated by a nonparticipating 
provider. Subject to paragraph (f) of this section, and unless 
prohibited by State law, a nonparticipating provider satisfies the 
notice and consent criteria of this paragraph (c) with respect to items 
or services furnished by the provider to a participant, beneficiary, or 
enrollee of a group health plan or group or individual

[[Page 36983]]

health insurance coverage, if the provider (or a participating health 
care facility on behalf on a nonparticipating provider)--
    (1) Provides to the participant, beneficiary, or enrollee a written 
notice in paper or, as practicable, electronic form, as selected by the 
individual, that contains the information required under paragraph (d) 
of this section, provided such written notice is provided:
    (i) In accordance with guidance issued by HHS, and in the form and 
manner specified in such guidance;
    (ii) With the consent document, and is provided physically separate 
from other documents and not attached to or incorporated into any other 
document; and
    (iii) To such participant, beneficiary, or enrollee--
    (A) Not later than 72 hours prior to the date on which the 
individual is furnished such items or services, in the case where the 
appointment to be furnished such items or services is scheduled at 
least 72 hours prior to the date on which the individual is to be 
furnished such items and services; or
    (B) On the date the appointment to be furnished such items or 
services is scheduled, in the case where the appointment is scheduled 
within 72 hours prior to the date on which such items or services are 
to be furnished. Where an individual is provided the notice on the same 
date that the items or services are to be furnished, providers and 
facilities are required to provide the notice no later than 3 hours 
prior to furnishing items or services to which the notice and consent 
requirements apply.
    (2) Obtains from the participant, beneficiary, or enrollee the 
consent described in paragraph (e) of this section to be treated by the 
nonparticipating provider. An authorized representative may receive the 
notice on behalf of a participant, beneficiary, or enrollee, and may 
provide consent on behalf of the participant, beneficiary, or enrollee. 
For purposes of this section and Sec.  149.410, an authorized 
representative is an individual authorized under State law to provide 
consent on behalf of the participant, beneficiary, or enrollee, 
provided that the individual is not a provider affiliated with the 
facility or an employee of the facility, unless such provider or 
employee is a family member of the participant, beneficiary, or 
enrollee. The consent must--
    (i) Be provided voluntarily, meaning the individual is able to 
consent freely, without undue influence, fraud, or duress;
    (ii) Be obtained in accordance with, and in the form and manner 
specified in, guidance issued by HHS; and
    (iii) Not be revoked, in writing, by the participant, beneficiary, 
or enrollee prior to the receipt of items and services to which the 
consent applies.
    (3) Provides a copy of the signed written notice and consent to the 
participant, beneficiary, or enrollee in-person or through mail or 
email, as selected by the participant, beneficiary, or enrollee.
    (d) Information required under written notice. The written notice 
described in paragraph (c)(1) of this section must be provided in the 
form and manner specified by HHS in guidance, and must--
    (1) State that the health care provider is a nonparticipating 
provider, with respect to the health plan or coverage.
    (2) Include the good faith estimated amount that such 
nonparticipating provider may charge the participant, beneficiary, or 
enrollee for the items and services involved (including any item or 
service that is reasonably expected to be furnished by the 
nonparticipating provider in conjunction with such items or services), 
including notification that the provision of the estimate or consent to 
be treated under paragraph (e) of this section does not constitute a 
contract with respect to the charges estimated for such items and 
services or a contract that binds the participant, beneficiary, or 
enrollee to be treated by that provider or facility.
    (3) Provide a statement that prior authorization or other care 
management limitations may be required in advance of receiving such 
items or services at the facility.
    (4) Clearly state that consent to receive such items and services 
from such nonparticipating provider is optional and that the 
participant, beneficiary, or enrollee may instead seek care from an 
available participating provider, with respect to the plan or coverage, 
as applicable, and that in such cases the cost-sharing responsibility 
of the participant, beneficiary, or enrollee would not exceed the 
responsibility that would apply with respect to such an item or service 
that is furnished by a participating provider, as applicable, with 
respect to such plan.
    (e) Consent described to be treated by a nonparticipating provider. 
The consent described in this paragraph (e), with respect to a 
participant, beneficiary, or enrollee of a group health plan or group 
or individual health insurance coverage who is to be furnished items or 
services by a nonparticipating provider, must be documented on a form 
specified by the Secretary, in consultation with the Secretary of 
Labor, through guidance and provided in accordance with such guidance, 
that must be signed by the participant, beneficiary, or enrollee before 
such items and services are furnished and that--
    (1) Acknowledges in clear and understandable language that the 
participant, beneficiary, or enrollee has been--
    (i) Provided with the written notice under paragraph (c) of this 
section, in the form selected by the participant, beneficiary, or 
enrollee.
    (ii) Informed that the payment of such charge by the participant, 
beneficiary, or enrollee might not accrue toward meeting any limitation 
that the plan or coverage places on cost sharing, including an 
explanation that such payment might not apply to an in-network 
deductible or out-of-pocket maximum applied under the plan or coverage.
    (2) States that by signing the consent, the individual agrees to be 
treated by the nonparticipating provider and understands the individual 
may be balance billed and subject to cost-sharing requirements that 
apply to services furnished by the nonparticipating provider.
    (3) Documents the time and date on which the participant, 
beneficiary, or enrollee received the written notice described in 
paragraph (c) of this section and the time and date on which the 
individual signed the consent to be furnished such items or services by 
such nonparticipating provider.
    (f) Language access. (1) A nonparticipating provider (or the 
participating health care facility on behalf of the nonparticipating 
provider) must provide the individual with the choice to receive the 
written notice and consent document in any of the 15 most common 
languages in the State in which the applicable facility is located, 
except that the notice and consent document may instead be available in 
any of the 15 most common languages in a geographic region that 
reasonably reflects the geographic region served by the applicable 
facility; and
    (2) If the individual's preferred language is not among the 15 most 
common languages in which the nonparticipating provider (or the 
participating health care facility on behalf of the nonparticipating 
provider) makes the notice and consent document available and the 
individual cannot understand the language in which the notice and 
consent document are provided, the notice and consent criteria in 
paragraph (c) of this section are not met unless the nonparticipating

[[Page 36984]]

provider (or the participating health care facility on behalf of the 
nonparticipating provider) has obtained the services of a qualified 
interpreter to assist the individual with understanding the information 
contained in the notice and consent document.
    (g) Scope of consent. The consent described in paragraph (e) of 
this section will constitute consent only to the receipt of the 
information provided pursuant to this section and will not constitute a 
contractual agreement of the participant, beneficiary, or enrollee to 
any estimated charge or amount included in such information, or to be 
treated by that provider or facility.
    (h) Retention of certain documents. A participating health care 
facility (with respect to nonparticipating providers at such facility) 
that obtains from a participant, beneficiary, or enrollee of a group 
health plan or group or individual health insurance coverage a written 
consent in accordance with paragraph (e) of this section, with respect 
to furnishing an item or service to such an individual, must retain the 
written notice and consent for at least a 7-year period after the date 
on which the item or service is so furnished. If a nonparticipating 
provider obtains a signed consent from a participant, beneficiary, or 
enrollee, where the facility does not otherwise obtain the consent on 
behalf of the provider, the provider may either coordinate with the 
facility to retain the written notice and consent for a 7-year period, 
or the provider must retain the written notice and consent for a 7-year 
period.
    (i) Notification to plan or issuer. For each item or service 
furnished by a nonparticipating provider described in paragraph (a) of 
this section, the provider (or the participating facility on behalf of 
the nonparticipating provider) must timely notify the plan or issuer 
that the item or service was furnished during a visit at a 
participating health care facility, and, if applicable, provide to the 
plan or issuer a copy of the signed written notice and consent document 
described in paragraphs (c) and (e) of this section. In instances 
where, to the extent permitted by this section, the nonparticipating 
provider bills the participant, beneficiary, or enrollee directly, the 
provider may satisfy the requirement to notify the plan or issuer by 
including the notice with the bill to the participant, beneficiary, or 
enrollee.
    (j) Applicability date. The provisions of this section are 
applicable with respect to items and services furnished during a plan 
year (in the individual market, policy year) beginning on or after 
January 1, 2022.


Sec.  149.430  Provider and facility disclosure requirements regarding 
patient protections against balance billing.

    (a) In general. Each health care provider and health care facility 
(including an emergency department of a hospital and an independent 
freestanding emergency department) must make publicly available, post 
on a public website of such provider or facility (if applicable), and 
provide to any individual who is a participant, beneficiary, or 
enrollee of a group health plan or group or individual health insurance 
coverage offered by a health insurance issuer and to whom the provider 
or facility furnishes items or services, the information described in 
paragraph (b) of this section regarding patient protections against 
balance billing, except as provided in paragraphs (e) and (f) of this 
section. A provider or facility must make the disclosures in accordance 
with the method and timing requirements set forth in paragraphs (c) and 
(d) of this section.
    (b) Content. The disclosures required under this section must 
include, in clear and understandable language, all the information 
described in this paragraph (b) (and may include any additional 
information that does not conflict with that information).
    (1) A statement that explains the requirements of and prohibitions 
applicable to the health care provider or health care facility under 
sections 2799B-1 and 2799B-2 of the PHS Act and their implementing 
regulations in Sec. Sec.  149.410 and 149.420;
    (2) If applicable, a statement that explains any State law 
requirements regarding the amounts such provider or facility may, with 
respect to an item or service, charge a participant, beneficiary, or 
enrollee of a group health plan or group or individual health insurance 
coverage offered by a health insurance issuer with respect to which 
such provider or facility does not have a contractual relationship, 
after receiving payment, if any, from the plan or coverage, 
respectively, for such item or service and any applicable cost-sharing 
payment from such participant, beneficiary, or enrollee; and
    (3) A statement providing contact information for the appropriate 
State and Federal agencies that an individual may contact if the 
individual believes the provider or facility has violated a requirement 
described in the notice.
    (c) Required methods for disclosing information. Health care 
providers and health care facilities must provide the disclosure 
required under this section as follows:
    (1) With respect to the required disclosure to be posted on a 
public website, the information described in paragraph (b) of this 
section, or a link to such information, must appear on a searchable 
homepage of the provider's or facility's website. A provider or 
facility that does not have its own website is not required to make a 
disclosure under this paragraph (c)(1).
    (2) With respect to the required disclosure to the public, a 
provider or facility must make public the information described in 
paragraph (b) of this section on a sign posted prominently at the 
location of the provider or facility. A provider that does not have a 
publicly accessible location is not required to make a disclosure under 
this paragraph (c)(2).
    (3) With respect to the required disclosure to individuals who are 
participants, beneficiaries, or enrollees of a group health plan or 
group or individual health insurance coverage offered by a health 
insurance issuer, a provider or facility must provide the information 
described in paragraph (b) of this section in a one-page (double-sided) 
notice, using print no smaller than 12-point font. The notice must be 
provided in-person or through mail or email, as selected by the 
participant, beneficiary, or enrollee.
    (d) Timing of disclosure to individuals. A health care provider or 
health care facility is required to provide the notice to individuals 
who are participants, beneficiaries, or enrollees of a group health 
plan or group or individual health insurance coverage offered by a 
health insurance issuer no later than the date and time on which the 
provider or facility requests payment from the individual, or with 
respect to an individual from whom the provider or facility does not 
request payment, no later than the date on which the provider or 
facility submits a claim to the group health plan or health insurance 
issuer.
    (e) Exceptions. A health care provider is not required to make the 
disclosures required under this section--
    (1) If the provider does not furnish items or services at a health 
care facility, or in connection with visits at health care facilities; 
or
    (2) To individuals to whom the provider furnishes items or 
services, if such items or services are not furnished at a health care 
facility, or in connection with a visit at a health care facility.
    (f) Special rule to prevent unnecessary duplication with respect to 
health care providers. To the extent a provider furnishes an item or 
service covered under the plan or coverage at a health care facility 
(including an emergency

[[Page 36985]]

department of a hospital or independent freestanding emergency 
department), the provider satisfies the requirements of paragraphs 
(c)(2) and (3) of this section if the facility makes the information 
available, in the required form and manner, pursuant to a written 
agreement. Accordingly, if a provider and facility enter into a written 
agreement under which the facility agrees to make the information 
required under this section available on a sign posted prominently at 
the facility and to provide the one-page notice to individuals in 
compliance with this section, and the facility fails to do so, then the 
facility, but not the provider, violates the disclosure requirements of 
this section.
    (g) Applicability date. The provisions of this section are 
applicable beginning on January 1, 2022.


Sec.  149.440  Balance billing in cases of air ambulance services.

    (a) In general. In the case of a participant, beneficiary, or 
enrollee with benefits under a group health plan or group or individual 
health insurance coverage offered by a health insurance issuer who is 
furnished air ambulance services (for which benefits are available 
under such plan or coverage) from a nonparticipating provider of air 
ambulance services, with respect to such plan or coverage, the provider 
must not bill, and must not hold liable, the participant, beneficiary, 
or enrollee for a payment amount for the air ambulance services 
furnished by the provider that is more than the cost-sharing amount for 
such service (as determined in accordance with 26 CFR 54.9817-1T(b)(1) 
and (2), 29 CFR 2590.717-1(b)(1) and (2), and Sec.  149.130(b)(1) and 
(2), as applicable).
    (b) Applicability date. The provisions of this section are 
applicable with respect to air ambulance services furnished during a 
plan year (in the individual market, policy year) beginning on or after 
January 1, 2022.


Sec.  149.450  Complaint process for balance billing regarding 
providers and facilities.

    (a) Scope and definitions--(1) Scope. This section establishes a 
process for HHS to receive and resolve complaints regarding information 
that a health care provider, provider of air ambulance services, or 
health care facility may be failing to meet the requirements under 
subpart E of this part, which may warrant an investigation.
    (2) Definitions. In this section--
    (i) Complaint means a communication, written, or oral, that 
indicates there has been a potential violation of the requirements 
under this subpart, whether or not a violation actually occurred.
    (ii) Complainant means any individual, or their authorized 
representative, who files a complaint as defined in paragraph (a)(2)(i) 
of this section.
    (b) Complaints process. (1) HHS will consider the date a complaint 
is filed to be the date upon which HHS receives an oral, written, or 
electronic statement that identifies information about the complaint 
sufficient to identify the parties involved and the action or inaction 
complained of.
    (2) HHS will notify complainants, by oral or written means, of 
receipt of the complaint no later than 60 business days after the 
complaint is received. HHS will include a response acknowledging 
receipt of the complaint, notifying the complainant of their rights and 
obligations under the complaints process, and describing the next steps 
of the complaints resolution process. HHS may request additional 
information that may be needed to process the complaint as part of the 
response. Such additional information may include:
    (i) Health care provider, air ambulance provider, or health care 
facility bills;
    (ii) Health care provider, air ambulance provider, or health care 
facility network status;
    (iii) Information regarding the participant's, beneficiary's, or 
enrollee's health care plan or health insurance coverage;
    (iv) Information to support a determination regarding whether the 
service was an emergency service or non-emergency service;
    (v) Documents regarding the facts in the complaint in the 
possession of, or otherwise attainable by, the complainant; or
    (vi) Any other information HHS needs to make a determination of 
facts for an investigation.
    (3) HHS will make reasonable efforts consistent with agency 
practices to notify the complainant of the outcome of the complaint 
after the submission is processed through appropriate methods as 
determined by HHS. A complaint is considered processed after HHS has 
reviewed the complaint and accompanying information and made an outcome 
determination. Based on the nature of the complaint, HHS may--
    (i) Refer the complainant to another appropriate Federal or State 
resolution process;
    (ii) Notify the complainant and make reasonable efforts to refer 
the complainant to the appropriate State or Federal regulatory 
authority if HHS receives a complaint where another entity has 
enforcement jurisdiction over the health care provider, air ambulance 
provider or health care facility;
    (iii) Refer the health care provider, air ambulance provider or 
health care facility for an investigation for enforcement action under 
45 CFR part 150; or
    (iv) Provide the complainant with an explanation of resolution and 
any corrective action taken.

PART 156--HEALTH INSURANCE ISSUER STANDARDS UNDER THE AFFORDABLE 
CARE ACT, INCLUDING STANDARDS RELATED TO EXCHANGES

0
19. The authority citation for part 156 continues to read as follows:

    Authority: 42 U.S.C. 18021-18024, 18031-18032, 18041-18042, 
18044, 18054, 18061, 18063, 18071, 18082, and 26 U.S.C. 36B.


0
20. Section 156.155 is amended by:
0
a. Revising paragraph (a)(3);
0
b. Redesignating paragraph (c) as paragraph (d); and
0
c. Adding a new paragraph (c).
    The revision and addition read as follows:


Sec.  156.155  Enrollment in catastrophic plans.

    (a) * * *
    (3) Provides coverage of the essential health benefits under 
section 1302(b) of the Affordable Care Act, except that the plan 
provides no benefits for any plan year (except as provided in 
paragraphs (a)(4), (b), and (c) of this section) until the annual 
limitation on cost sharing in section 1302(c)(1) of the Affordable Care 
Act is reached.
* * * * *
    (c) Coverage to prevent surprise medical bills. A catastrophic plan 
must provide benefits as required under sections 2799A-1 and 2799A-2 of 
the Public Health Service Act and their implementing regulations in 
Sec. Sec.  149.110, 149.120, and 149.130 or any applicable State law 
providing similar protections to individuals, and will not violate 
paragraph (a)(3) of this section solely because of the provision of 
such benefits before the annual limitation on cost sharing is reached.
* * * * *
[FR Doc. 2021-14379 Filed 7-6-21; 4:15 pm]
BILLING CODE 6523-63-P; 4830-01-P; 4510-29-P; 4120-01-P