[Federal Register Volume 86, Number 177 (Thursday, September 16, 2021)]
[Proposed Rules]
[Pages 51730-51779]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-19797]
[[Page 51729]]
Vol. 86
Thursday,
No. 177
September 16, 2021
Part II
Office of Personnel Management
Department of the Treasury
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Internal Revenue Service
Department of Labor
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Employee Benefits Security Administration
Department of Health and Human Services
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5 CFR Part 890
26 CFR Part 54
29 CFR Part 2590
45 CFR Parts 144, 148, 149, et al.
Requirements Related to Air Ambulance Services, Agent and Broker
Disclosures, and Provider Enforcement; Proposed Rule
Federal Register / Vol. 86 , No. 177 / Thursday, September 16, 2021 /
Proposed Rules
[[Page 51730]]
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OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 890
RIN 3206-AO28
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 54
[REG-114676-21]
RIN 1545-BQ15
DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Part 2590
RIN 1210-AC08
DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Parts 144, 148, 149, and 150
[CMS-9907-P]
RIN 0938-AU61
Requirements Related to Air Ambulance Services, Agent and Broker
Disclosures, and Provider Enforcement
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: Proposed rules.
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SUMMARY: This document sets forth proposed rules implementing certain
provisions of Title I (No Surprises Act) and Title II (Transparency) of
Division BB of the Consolidated Appropriations Act, 2021 (CAA). These
proposed rules would amend and add provisions to existing rules under
the Internal Revenue Code (Code), the Employee Retirement Income
Security Act (ERISA), the Public Health Service Act (PHS Act), and the
Federal Employees Health Benefits (FEHB) Act. These proposed rules
would implement certain provisions of the No Surprises Act that would
increase transparency by requiring group health plans and health
insurance issuers in the group and individual markets, and FEHB
carriers, to submit certain information about air ambulance services to
the Secretaries of Health and Human Services (HHS), Labor, and the
Treasury, and the Director of the Office of Personnel Management, as
applicable, and by requiring providers of air ambulance services to
submit certain information to the Secretaries of HHS and
Transportation. These proposed rules also include HHS-only proposed
rules that would increase transparency by requiring a health insurance
issuer offering individual health insurance coverage or short-term,
limited-duration insurance to disclose to policyholders and to report
to HHS any direct or indirect compensation provided by the issuer to an
agent or broker associated with enrolling individuals in such coverage.
These proposed rules would also provide the process by which HHS would
investigate complaints and potential violations of PHS Act provisions
and, if warranted, take enforcement action, including the imposition of
civil money penalties, against providers and facilities, including
providers of air ambulance services. These proposed rules would amend
existing regulations to clarify the process to investigate complaints
and potential violations of the PHS Act and impose civil money
penalties against plans and issuers. These proposed rules would also
establish the process by which HHS would impose civil money penalties
if a provider of air ambulance services fails to submit some or all
required data to HHS.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, by October 18, 2021.
ADDRESSES: In commenting, please refer to file code CMS-9907-P.
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 to https://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
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-9907-P, 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-9907-P, 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: For matters related to air ambulance
reporting: Padma Babubhai Shah, Office of Personnel Management, (202)
606-4056; Kari DiCecco, Internal Revenue Service, Department of the
Treasury, (202) 317-5500; Matthew Meidell or Pinar Shapiro, Employee
Benefits Security Administration, Department of Labor, (202) 693-8335;
Christina Whitefield, Centers for Medicare & Medicaid Services,
Department of Health and Human Services, (301) 492-4172. For matters
related to agent and broker disclosures under Part 148: Adam Wheeler,
(410) 786-3942.
For matters related to enforcement under Part 150: Judah Katz,
(410) 786-3879 or Lisa Cuozzo, (410) 786-1746.
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://www.regulations.gov. Follow the search instructions on that
website to view public comments. The Centers for Medicare & Medicaid
Services (CMS) will not post on Regulations.gov public comments that
make threats to individuals or institutions or suggest that the
individual will take actions to harm the individual. CMS continues to
encourage individuals not to submit duplicative comments. We will post
acceptable comments from multiple unique commenters even if the content
is identical or nearly identical to other comments.
I. Background
A. Legislative and Regulatory Overview
Title I of the Health Insurance Portability and Accountability Act
of 1996 (HIPAA) added Title XXVII to the Public Health Service Act (PHS
Act) to establish various reforms to the group and individual health
insurance markets. The Patient Protection and Affordable Care Act,
Public Law 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 ACA reorganized,
[[Page 51731]]
amended, and added to the provisions of Part A of Title XXVII of the
PHS Act relating to group health plans and health insurance issuers in
the group and individual markets. The term ``group health plan''
includes both insured and self-insured group health plans. The ACA
added section 9815(a)(1) to the Internal Revenue Code (Code) and
section 715(a)(1) to the Employee Retirement Income Security Act
(ERISA) to incorporate the provisions of Part A of Title XXVII of the
PHS Act into the Code and ERISA, and made 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 thereby incorporated into the Code and ERISA.
The Consolidated Appropriations Act, 2021 (CAA) was enacted on
December 27, 2020 and includes Title I (No Surprises Act) and Title II
(Transparency) in Division BB. The CAA added provisions that apply to
plans and issuers offering group or individual health insurance
coverage in chapter 100 of the Code, in part 7 of ERISA, and in a new
Part D of Title XXVII of the PHS Act. The CAA also amended the Federal
Employees Health Benefits (FEHB) Act, 5 U.S.C. 8901, et seq., by adding
a new subsection (p) to 5 U.S.C. 8902 that requires each contract with
an FEHB carrier to require the carrier to comply with requirements
described in certain provisions of the Code, ERISA, and the PHS Act in
the same manner as those provisions apply to a group health plan or
health insurance issuer offering group or individual health insurance
coverage. The CAA provisions that apply to providers, facilities, and
providers of air ambulance services, such as requirements related to
cost sharing, 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.
Section 106(a) of the No Surprises Act requires providers of air
ambulance services to report certain information to the Secretaries of
HHS and Transportation. Section 106(b) of the No Surprises Act added
parallel provisions at section 9823 of the Code, section 723 of ERISA,
and section 2799A-8 of the PHS Act. These provisions include
requirements for plans and issuers to report claims and other
information regarding air ambulance services and providers of air
ambulance services.
The Director of the Office of Personnel Management (OPM) is of the
view that the collection of FEHB plan air ambulance claims data is
necessary and appropriate for a more complete understanding of air
ambulance services provided across the industry. Further, the OPM
Director is of the view that this data would inform OPM for purposes of
enforcing the protections provided under 5 U.S.C. 8902(p) and for the
appropriate administration and oversight of FEHB plans.
Sections 106(a) and (b) of the No Surprises Act impose these air
ambulance data reporting requirements for 2 years. Section 106(c) of
the No Surprises Act further requires HHS, in consultation with the
Secretary of Transportation, to issue a comprehensive public report
summarizing the data and providing an assessment of the state and
certain aspects and characteristics of the air ambulance market.
Section 106(e) of the No Surprises Act provides for the imposition of
civil money penalties of not more than $10,000 on providers of air
ambulance services for failure to submit required data. Section
106(e)(3) specifies that certain provisions of section 1128A of the
Social Security Act (SSA) shall apply to a civil money penalty under
section 106(e) of the No Surprises Act in the same manner as such
provisions apply to a penalty or proceeding under section 1128A of the
SSA. In addition, section 418 of the Federal Aviation Administration
(FAA) Reauthorization Act of 2018 \1\ directs the Secretary of
Transportation, in consultation with HHS, to form an Advisory Committee
on Air Ambulance and Patient Billing (Advisory Committee). Section
106(d) of the No Surprises Act directs HHS, in consultation with the
Secretary of Transportation, to take into consideration (as applicable
and to the extent feasible) any recommendations included in the
Advisory Committee's report.
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\1\ Public Law 115-254.
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The charter of the Advisory Committee allowed for the formation of
subcommittees to perform specific assignments. The Advisory Committee
formed three subcommittees, which included a subcommittee on the
Prevention of Balance Billing. At its second full Committee meeting in
May 2021, the Advisory Committee recommended the collection of eight
specific data elements from providers of air ambulance services: (1)
Average cost per trip; (2) air ambulance base rates and patient-loaded
statute mileage rates; (3) ancillary fees for specialty services, like
neonatal, cardiac, and ``other'' (for example, specialized medicines
like snakebites in rural areas); (4) reimbursement data aggregated by
payor type (Medicare, Medicaid, self-insured, private insurance) and
per transport, based on median rate and zip code, as well as further
identifying data regarding private insurance by provider type
(hospital-sponsored program, municipality-sponsored program, hospital
independent partnership (hybrid) program, or independent program); (5)
alternate revenue sources (for example, subsidies or membership
programs) broken down per transport for reporting purposes; (6) volume
of transports, segregated by aircraft type (fixed wing and rotary wing)
and takeoff zip code for government purposes, or for public use when
aggregated with other data; (7) market share for air transport,
obtained from the FAA certificate holder and identifying the
certificate holder's parent company; and (8) market share for health
care, by looking at the program type for the FAA certificate holder.\2\
Section 9823 of the Code, section 723 of ERISA, and section 2799A-8 of
the PHS Act require information to be reported jointly to HHS, the
Department of Labor (DOL), and the Department of the Treasury
(collectively, the Departments).
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\2\ ``Meeting Summary, Second Meeting of the AAPB Advisory
Committee,'' U.S. Department of Transportation, Air Ambulance and
Patient Billing Advisory Committee, May 27-28, 2021, Washington, DC
pp. 15-17. Available at: https://www.transportation.gov/sites/dot.gov/files/2021-07/AAPB%20Second%20Meeting%20Minutes.pdf.
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Section 106(d) of the No Surprises Act requires HHS, in
consultation with the Secretary of Transportation, to undertake notice
and comment rulemaking to specify the form and manner in which plans
and issuers must submit this information.
The CAA amended the FEHB Act to require that protections from air
ambulance surprise billing must be offered by carriers in the same
manner as those protections apply under section 9817 of the Code,
section 717 of ERISA, and section 2799B-2 of the PHS Act and to require
that protections from surprise billing by providers of air ambulance
services with respect to FEHB enrollees apply in the same manner as
those protections apply under section 2799B-5 of the PHS Act.
The CAA also amended Title XXVII of the PHS Act to add section
2746, which requires a health insurance issuer offering individual
health insurance coverage or short-term, limited-duration insurance to
disclose to enrollees in such coverage and to report annually to HHS
the direct or indirect compensation provided by the issuer to an agent
or broker associated with enrolling
[[Page 51732]]
individuals in such coverage. Section 2746(d) directs HHS to finalize,
through notice and comment rulemaking, the timing, form, and manner in
which issuers must make these disclosures to consumers and submit
reports to HHS. These new statutory requirements are applicable
beginning December 27, 2021.
Section 2723(b) of the PHS Act, as amended by the CAA, authorizes
HHS to impose civil money penalties as a means of enforcing the
individual and group market requirements contained in Part A and Part D
of Title XXVII of the PHS Act with respect to health insurance issuers
when a state fails to substantially enforce these provisions, as well
as with respect to group health plans that are non-Federal governmental
plans.\3\ Section 2799B-4 of the PHS Act, as added by section 104 of
the No Surprises Act, establishes a similar framework for HHS's
enforcement authority over providers and facilities, including
providers of air ambulance services, in states that fail to
substantially enforce the requirements of Part E of Title XXVII of the
PHS Act, as added by the CAA. This provision also authorizes HHS to
impose civil money penalties of up to $10,000 per violation on
providers and facilities, including providers of air ambulance
services, that fail to comply with the applicable PHS Act requirements
in such states. It further provides that certain provisions of section
1128A of the SSA shall apply to a civil money penalty or assessment
under section 2799B-4 of the PHS Act in the same manner as such
provisions apply to a penalty, assessment, or proceeding under
subsection (a) of section 1128A of the SSA.
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\3\ Also see section 2761 of the PHS Act, which establishes a
parallel framework for enforcement of the individual market
requirements contained in Part B of Title XXVII of the PHS Act.
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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
independent dispute resolution (IDR) process (sections 103 and 105 of
the No Surprises Act) and patient protections through transparency and
the patient-provider dispute resolution process (section 112 of the No
Surprises Act).
On July 13, 2021, the Departments and OPM issued interim final
rules entitled Requirements Related to Surprise Billing; Part I,\4\
which 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; FEHB health benefits plans with respect to contract years
beginning on or after January 1, 2022; and health care providers and
facilities, and providers of air ambulance services beginning on
January 1, 2022 (July 2021 interim final rules). The July 2021 interim
final rules implement sections 9816(a)-(b) and 9817(a) of the Code;
sections 716(a)-(b) and 717(a) of ERISA; sections 2799A-1(a)-(b),
2799A-2(a), 2799B-1, 2799B-2, 2799B-3, and 2799B-5 of the PHS Act; and
5 U.S.C. 8902(p), to protect consumers from surprise medical bills for
emergency services, air ambulance services furnished by
nonparticipating providers of air ambulance services, and non-emergency
services furnished by nonparticipating providers at participating
facilities in certain circumstances.
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\4\ Requirements Related to Surprise Billing; Part I, 86 FR
36872, (July 13, 2021). Public comments on this rule are due by
September 7, 2021.
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Among other requirements, the July 2021 interim final rules require
emergency services to be covered without any prior authorization,
without regard to whether the health care provider or facility
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. With respect to emergency services
furnished by nonparticipating providers or facilities, air ambulance
services furnished by nonparticipating providers of air ambulance
services, and non-emergency services furnished by nonparticipating
providers at certain participating facilities, the July 2021 interim
final rules generally 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 in certain circumstances. 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).
Division BB of 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); 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 rules regarding
some of these provisions might not be issued until after January 1,
2022. The Departments note that any such rulemaking to fully implement
these provisions would 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.
B. Stakeholder Consultation and Input
The Departments consulted with stakeholders on policies related to
Division BB of the CAA, including air ambulance data collection,
disclosure and reporting of agent and broker compensation, and
enforcement of the PHS Act. The Departments held several listening
sessions with consumers, health care providers, facilities, providers
of air ambulance services, employers, agents, brokers, health plans and
health insurance issuers, advocacy groups, and the actuarial community
to gather public input. The Departments also solicited input from state
representatives on numerous relevant topics and consulted with
stakeholders through regular meetings with the National Association of
Insurance Commissioners (NAIC), and regular contact with state
regulators, issuers, trade groups, consumer advocates, employers, and
other interested parties. The Departments considered all public input
received as the Departments developed the policies in these proposed
rules and welcome additional public comment as part of these proposed
rules.
C. Structure of Proposed Rules
The regulations outlined in these proposed rules would be codified
in 5 CFR part 890; 26 CFR part 54; 29 CFR part 2590; and 45 CFR parts
144, 148, 149, and 150.
[[Page 51733]]
The proposed changes to 45 CFR part 144 would make technical and
conforming amendments regarding the purpose of part 150.
The proposed changes to 45 CFR part 148 would set forth
requirements for health insurance issuers offering individual health
insurance coverage or short-term, limited-duration insurance to
disclose to policyholders information regarding direct and indirect
compensation provided by the issuer to an agent or broker associated
with enrolling individuals in such coverage. The proposed amendments to
45 CFR part 148 also set forth proposed requirements related to the
annual reports that health insurance issuers offering individual health
insurance coverage or short-term, limited-duration insurance would be
required to submit to HHS regarding the direct and indirect
compensation paid to agents and brokers. In addition, these proposed
rules would make technical and conforming amendments regarding the
basis, purpose, and scope of 45 CFR part 148.
The proposed changes to 45 CFR part 149 would require plans,
issuers, and providers of air ambulance services to submit to HHS
certain data regarding air ambulance services. Proposed rules under 26
CFR 54.9823-1 and 29 CFR 2590.723 would provide that group health plans
and health insurance issuers offering group health insurance coverage
that satisfy the requirements under 45 CFR part 149 that implement
section 2799A-8 of the PHS Act would be treated as satisfying the
parallel requirements under section 9823 of the Code and section 723 of
ERISA. The proposed change to 5 CFR part 890 would require FEHB
carriers to comply with the requirements of 45 CFR 149.230 with respect
to an FEHB plan in the same manner as such provisions apply to a group
health plan or health insurance issuer offering group or individual
health insurance coverage. OPM would coordinate with HHS to receive
FEHB air ambulance services data.
The proposed changes to 45 CFR part 150 would make procedural
changes to the process HHS utilizes to investigate possible violations
of the PHS Act, including proposed amendments to clarify the process to
investigate complaints and potential violations of the PHS Act and to
impose civil money penalties against non-Federal governmental plans and
issuers of group or individual health insurance coverage. The proposed
changes would also set forth the process for imposing civil money
penalties on providers and facilities, including providers of air
ambulance services, for failure to comply with 45 CFR part 149 and
failure to provide data required in section 106(a) of the No Surprises
Act.
II. Provisions of the Proposed Rules on Reporting Requirements
Regarding Air Ambulance Services--Departments of HHS, Labor, and the
Treasury
A. In General
These proposed rules propose requirements related to data
collection from providers of air ambulance services, as required by
section 106(a) of the No Surprises Act, and from plans and issuers
offering group or individual health insurance coverage, as required by
section 9823 of the Code, section 723 of ERISA, and section 2799A-8 of
the PHS Act, as added by section 106(b) of the No Surprises Act.
These proposed rules also include an HHS-only proposed rule that
sets forth civil money penalties specified in section 106(e) of the No
Surprises Act that would apply to providers of air ambulance services
for failure to submit data as required under section 106(a) of the No
Surprises Act.\5\
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\5\ Section 106(b) of the No Surprises Act amends part D of
Title XXVII of the PHS Act by adding new section 2799A-8. As such,
the enforcement provisions under PHS Act section 2723 and 45 CFR
part 150 extend to PHS Act section 2799A-8 air ambulance data
reporting requirements on issuers and non-Federal governmental group
health plans. Section 106(a) of the No Surprises Act is codified in
the United States Code as a note to PHS Act section 2799A-8.
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Air ambulance services frequently result in surprise medical bills
due to individuals' inabilities to select an in-network provider of air
ambulance services when faced with an urgent medical situation. Because
of low network participation rates by providers of air ambulance
services, individuals are also unable to avoid potential higher cost
sharing and balance billing by out-of-network providers. A 2019 study
by the Government Accountability Office (GAO) analyzed data from 2017
and found that 69 percent of air ambulance transports of privately-
insured patients were out-of-network.\6\
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\6\ Air Ambulance: Available Data Show Privately-Insured
Patients Are at Financial Risk. GAO-19-292 (March 2019).
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When individuals are unable to avoid providers or providers of air
ambulance services that are not in their plan's network, it raises
health care costs and exposes individuals to financial risk.\7\ The
ability to balance bill is often used as leverage by providers to
obtain higher in-network payments, which results in higher premiums,
higher cost sharing for consumers, and overall increased health care
expenditures.\8\ Studies have shown that surprise medical bills can be
substantial, including with respect to air ambulance services. The GAO
found that for privately-insured patients, the median price charged by
providers of air ambulance services was about $36,400 for a rotary-wing
transport and $40,600 for a fixed-wing transport in 2017.\9\ In an
earlier study,\10\ the GAO noted that there is no national data on
balance billing and the extent to which providers of air ambulance
services have contracts with health insurance companies. Some states
have attempted to collect data on balance billing. The GAO study stated
that a Michigan state review of 19 cases of balance billing for air
ambulance services between 2013 and 2016 showed an average balance bill
of $31,000. Data on cases investigated and closed by the Maryland
Insurance Administration between January 2014 and April 2018 showed
that the amount of balance bills for air ambulance services ranged from
$12,300 to $52,000.
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\7\ 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.
\8\ 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/.
\9\ Air Ambulance: Available Data Show Privately-Insured
Patients Are at Financial Risk. GAO-19-292 (March, 2019).
\10\ Air Ambulance: Data Collection and Transparency Needed to
Enhance DOT Oversight. GAO-17-637 (July 27, 2017).
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Although some states have enacted laws to regulate the billing
practices of providers of air ambulance services, many of these efforts
have been unsuccessful due to a preemption provision in the Airline
Deregulation Act of 1978 (ADA). The ADA states, in relevant part, ``. .
. a State, political subdivision of a State, or political authority of
at least two 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.'' \11\ Assuming that a provider of air ambulance
services is an ``air carrier'' covered by this provision, as is
typical,\12\ the provision preempts state
[[Page 51734]]
laws that would limit the amount of payment that the provider of air
ambulance services would otherwise be entitled to receive.\13\ Even
within states that have enacted protections against surprise billing,
state insurance regulations typically apply only to health insurance
coverage, as ERISA generally preempts state laws that would otherwise
regulate self-insured group health plans sponsored by private
employers.\14\ Finally, states are limited in their ability to address
surprise bills that involve an out-of-state provider, including an out-
of-state provider of air ambulance services.
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\11\ 49 U.S.C. 41713(b).
\12\ A provider of air ambulance services is a covered ``air
carrier'' if it has economic authority from the Department of
Transportation to provide interstate air transportation. Most
providers of air ambulance services have such authority under the
provisions of 14 CFR part 298. See, for example, Scarlett v. Air
Methods Corp., 922 F.3d 1053 (10th Cir. 2019); Air Evac EMS v.
Cheatham, 910 F.3d 751 (4th Cir. 2018).
\13\ See, for example, Guardian Flight LLC v. Godfread, 991 F.3d
916, 921 (8th Cir. 2021) (holding that ADA preempted state law
prohibiting out-of-network providers of air ambulance services 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 providers of air ambulance services from collecting more
than amount specified in fee schedule).
\14\ In addition, FEHB contract terms preempt state law in
accordance with 5 U.S.C. 8902(m)(1).
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As states, the Federal Government, oversight agencies, and advocacy
groups have examined the issue of air ambulance services and balance
billing, it has become clear that there is a lack of comprehensive,
national data on air ambulance costs, transports, and contractual
arrangements between providers of air ambulance services and plans and
issuers. In its 2017 report, the GAO recommended that the Federal
Government assess available data to determine what additional
information would be needed to address future concerns regarding unfair
or deceptive practices.\15\ In addition, section 418 of the FAA
Reauthorization Act of 2018 directed the Secretary of Transportation,
in consultation with HHS, to form an Advisory Committee on Air
Ambulance and Patient Billing (Advisory Committee). In January 2021,
the Advisory Committee's subcommittee on the Prevention of Balance
Billing recommended to the full Advisory Committee the collection of
data to ``(a) improve understanding of the air ambulance industry by
policymakers, (b) increase transparency of market conditions impacting
air ambulance services, and (c) indirectly improve contract negotiation
between payors and air ambulance providers and suppliers.'' \16\
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\15\ See Air Ambulance: Data Collection and Transparency Needed
to Enhance DOT Oversight. GAO-17-637 (July 27, 2017).
\16\ Air Ambulance and Patient Billing Advisory Committee's
Subcommittee on Prevention of Balance Billing, ``A Report on the
Prevention of Balance Billing'', January 2021, DOT-OST-2018-0206-
0026_attachment_1. At its second full committee meeting in May 2021,
the Advisory Committee recommended the collection of eight specific
data elements from providers of air ambulance services. See section
I.A of the preamble. The Committee's final report containing this
recommendation had yet to be produced at the time this rulemaking
was published.
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Section 106 of the No Surprises Act takes important steps to
increase transparency regarding air ambulance services. Specifically,
section 106(a) of the No Surprises Act requires providers of air
ambulance services to submit certain data to the Secretaries of HHS and
Transportation. Section 106(b) of the No Surprises Act requires plans
and issuers to submit certain data on air ambulance services to the
Secretaries of HHS, DOL, and the Treasury, through section 9823 of the
Code, section 723 of ERISA and section 2799A-8 of the PHS Act. Section
106(d) of the No Surprises Act requires HHS, in consultation with the
Secretary of Transportation, to specify through notice and comment
rulemaking, the form and manner in which the reports described under
section 106(a) of the No Surprises Act (regarding reporting by
providers of air ambulance services) and section 9823 of the Code,
section 723 of ERISA, and section 2799A-8 of the PHS Act (regarding
reporting by plans and issuers) must be submitted to such Secretaries.
Therefore, in these proposed rules, HHS proposes amendments to 45 CFR
part 149 that specify the form and manner of these reports. In
addition, the Department of the Treasury and DOL propose to add 26 CFR
54.9823-1 and 29 CFR 2590.723 to specify that group health plans and
health insurance issuers offering group health insurance coverage would
satisfy the requirements under section 9823 of the Code and section 723
of ERISA, respectively, by submitting a report to HHS that satisfies
the requirements of 45 CFR 149.230. In the interest of burden reduction
and efficiency, the Departments propose that the required information
reporting by group health plans and health insurance issuers offering
group and individual health insurance coverage, together with the
required information reporting by FEHB carriers,\17\ would be satisfied
through reporting to HHS.
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\17\ OPM proposes to authorize and require FEHB carriers to
submit air ambulance data to HHS. OPM will coordinate with HHS to
receive FEHB air ambulance services data.
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B. Basis and Scope (45 CFR 149.10)
HHS proposes to amend 45 CFR 149.10(a) to add a reference to
section 106(a) of the No Surprises Act, which requires data reporting
by providers of air ambulance services, to the basis of part 149.
C. Applicability (45 CFR 149.20)
HHS proposes to amend 45 CFR 149.20 to include a reference to the
new subpart C, which under these proposed rules would include data
submission requirements for plans and issuers. See section II.F. of the
preamble for discussion of the applicability of the proposed rules
regarding data submission requirements for providers of air ambulance
services.
D. Definitions (45 CFR 149.30)
HHS proposes to amend 45 CFR 149.30 by adding definitions relevant
to data submission requirements for providers of air ambulance services
and plans and issuers. The Departments propose to define an air
ambulance base as a site from which a provider of air ambulance
services operates to provide air ambulance services. The Departments
propose to define a National Provider Identifier (NPI) by referencing
the definition in 45 CFR 162.406. The Departments seek comment on these
proposed definitions.
E. Reporting Requirements for Plans and Issuers Regarding Air Ambulance
Services (45 CFR 149.230)
HHS proposes to amend part 149 by adding 45 CFR 149.230 to subpart
C to describe the data reporting requirements for plans and issuers.
Proposed 45 CFR 149.230(a) includes general requirements, the timing
and form of the data submission, and the reporting requirements in
circumstances when a transfer of business occurs.
As discussed in sections I.A and II.A of the preamble, section
106(b) of the No Surprises Act added parallel provisions at section
9823 of the Code, section 723 of ERISA, and section 2799A-8 of the PHS
Act requiring plans and issuers to submit information regarding air
ambulance services jointly to the Departments. Section 106(d) of the No
Surprises Act directs HHS, in consultation with the Secretary of
Transportation, to undertake notice and comment rulemaking to specify
the form and manner in which plans and issuers must submit this
information. Therefore, in these proposed rules, HHS proposes
amendments to 45 CFR part 149 that specify the form and manner for the
reports required in section 9823 of the Code, section 723 of ERISA, and
section 2799A-8 of the PHS Act, as enacted in section 106(b) of the No
Surprises Act. In the interest of burden reduction and efficiency, the
Department of the Treasury and DOL
[[Page 51735]]
propose to add 26 CFR 54.9823-1 and 29 CFR 2590.723, respectively, to
provide that plans and issuers would satisfy the requirements to submit
information pursuant to section 9823 of the Code and section 723 of
ERISA by satisfying the information reporting requirements under
proposed 45 CFR 149.230. Similarly, as discussed further in section IV
of the preamble, OPM proposes to add conforming reporting requirements
to require FEHB carriers to comply with the requirements of proposed 45
CFR 149.230 with respect to an FEHB plan in the same manner as such
provisions apply to a group health plan or health insurance issuer
offering group or individual health insurance coverage.
The Departments interpret section 9823 of the Code, section 723 of
ERISA, and section 2799A-8 of the PHS Act to require plans and issuers
to submit data regarding air ambulance services on a calendar year
basis. The Departments are of the view that a calendar year reporting
period would maximize the uniformity of the data across all submitters
and provide a suitable basis for performing the trend analyses that
section 106(c) of the No Surprises Act requires HHS to conduct as part
of developing a comprehensive public report. In order to ensure
completeness of the data, the Departments propose that data with
respect to a calendar year would include both data relevant to air
ambulance services furnished within the calendar year, as well as data
relevant to services for which payments were made within the calendar
year (even if the service was provided in a different calendar year).
The Departments are of the view that this approach is necessary due to
the limited duration of the data collection and statutory deadlines
that may not allow sufficient time for claims run-out, particularly
with respect to providers of air ambulance services that do not have
contractual relationships with plans and issuers.
Based on the expectation that this rulemaking would be finalized
during 2021, as required in section 106(d) of the No Surprises Act, and
consistent with the statutory requirement on plans and issuers to
report the required data not later than 90 days after the last day of
the applicable calendar year, the Departments propose that plans and
issuers would be required to submit the data for calendar year 2022 by
March 31, 2023, and the data for calendar year 2023 by March 30, 2024.
In order to ensure the completeness of the data, in proposed 45 CFR
149.230(a)(3), the Departments further propose that an issuer that
acquires from another issuer a line or block of business that provided
coverage of air ambulance services during calendar years 2022 or 2023
would be required to report the air ambulance services data on behalf
of the acquired business for the entire applicable calendar year. The
Departments propose that these reporting requirements would apply to
the selling and acquiring issuers if a sale or transfer occurs as a
result of issuers being merged, combined, spun off, affected by, or
engaging in any similar transaction during a calendar year. In
addition, to ensure completeness and timeliness of reporting of all
relevant air ambulance services data, the proposed rule would provide
that the Secretary of HHS may provide examples of these transactions in
guidance.
In addition, the Departments and OPM are publishing a proposed
information collection, which would provide additional technical
details regarding the required data elements, for public comment at the
same time as or shortly after publishing these proposed rules. The
proposed information collection would include a proposed data template
and instructions. The proposed information collection would specify
that plans and issuers do not need to submit information required in
proposed 45 CFR 149.230 if they did not receive claims or make or
expect to make payments for air ambulance services with respect to the
reporting period.
Section 9823 of the Code, section 723 of ERISA, and section 2799A-8
of the PHS Act require plans and issuers offering group or individual
health insurance coverage to submit claims data for air ambulance
services that include the following information about the claims:
Whether the services were provided on an emergent or non-emergent
basis; whether the provider of such services is part of a hospital-
owned or sponsored program, municipality-sponsored program, hospital
independent partnership (hybrid) program, independent program, or
tribally operated program in Alaska; whether the transport originated
in a rural or urban area; the type of aircraft used for the transport
(fixed-wing or rotary-wing air ambulance); and whether the provider of
the air ambulance service has a contract with the plan or issuer to
provide air ambulance services.
Those statutory sections further require plans and issuers to
provide, in addition to the information described in the preceding
paragraph of the preamble, such other information regarding providers
of air ambulance services as the Departments may specify. Section
106(c) of the No Surprises Act requires HHS, in consultation with the
Secretary of Transportation, to produce a comprehensive public report
that must include several different analyses that require collection of
other data not specifically identified in section 9823 of the Code,
section 723 of ERISA, and section 2799A-8 of the PHS Act. These
analyses include: An assessment of the average charges for air
ambulance services; amounts paid by plans and issuers to providers of
air ambulance services; amounts paid out-of-pocket by consumers; the
frequency of patient balance billing; the frequency of claims appeals
made by providers of air ambulance services to plans and issuers; and
any other data relating to air ambulance services determined necessary
and appropriate by Secretaries of HHS and Transportation. To perform
these analyses, the Secretaries of HHS and Transportation would need to
be able to match the information collected from plans and issuers to
the information collected from providers of air ambulance services
under section 106(a) of the No Surprises Act.
Therefore, in proposed 45 CFR 149.230(b), HHS proposes to require
submission of claims-level data on air ambulance services in order to
collect the information necessary to satisfy these statutory
requirements related to the HHS public report. Moreover, the
Departments are of the view that submission of claims-level data would
be less burdensome than submission of multiple sets of total claims
data aggregated by the various categories described in section 9823 of
the Code, section 723 of ERISA, and section 2799A-8 of the PHS Act,
particularly given the relatively small volume of claims for air
ambulance services. It is the Departments' understanding that
information regarding the service delivery model of the provider of air
ambulance services (such as affiliation with a hospital or municipality
or other similar program) may not be available to plans and issuers.
Therefore, the Departments propose to require plans and issuers to
report that data element only to the extent it is available to them.
The Departments appreciate the need to ensure both stakeholder and
consumer privacy, particularly when collecting claims-level data, and
therefore would take precautions to protect the confidentiality of
claims-level data. HHS proposes to collect only that claims-level data
that would be sufficient for producing the comprehensive report
required by the statute. Moreover, HHS intends to
[[Page 51736]]
collect and maintain the information using information technology (IT)
systems that are designed to meet all of the security standards
protocols established under Federal law or by HHS relevant to such
information.\18\
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\18\ HHS's enterprise-wide information security and privacy
program was launched in FY 2003, to help protect HHS against
potential IT threats and vulnerabilities. The program ensures
compliance with Federal mandates and legislation, including the
Federal Information Security Management Act and the President's
Management Agenda. The HHS Cybersecurity Program plays an important
role in protecting HHS's ability to provide mission-critical
operations. In addition, the HHS Cybersecurity Program is the
cornerstone of the HHS IT Strategic Plan.
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The claims-level data elements that HHS proposes to require plans
and issuers to submit to support HHS's publication of the comprehensive
public report, but that are not explicitly listed in section 9823 of
the Code, section 723 of ERISA, and section 2799A-8 of the PHS Act,
include: The date of service; billing NPI and Current Procedural
Terminology (CPT)/Healthcare Common Procedure Coding System (HCPCS)
codes information; and certain information about each air ambulance
transport (such as the loaded miles and whether the transport was an
inter-facility transport). These data elements, specifically the NPI
and the date of service, would enable the Secretaries of HHS and
Transportation to combine and validate the information collected from
plans and issuers and the information collected from providers of air
ambulance services.
Similarly, to enable the Secretaries of HHS and Transportation to
analyze and summarize the data in an appropriate and meaningful manner
in a comprehensive public report, HHS also proposes that the claims-
level data elements include the market type of the plan or coverage
associated with the air ambulance services. For fully-insured coverage,
this would include the individual, small group, and large group
markets, as defined in section 2791(e) of the PHS Act. For self-insured
group health plans, this would include identification of the plan
sponsor as a small employer or large employer, as defined in section
2791(e) of the PHS Act, with reasonable estimates allowed when the
exact information on the size of the employer is not available. Under
this proposal, FEHB plans would also be separately identified.
Further, to satisfy the requirements for the comprehensive public
report described in section 106(c) of the No Surprises Act, including
the required assessments of the frequency of patient balance billing
and claims appeals made by air ambulance providers, HHS proposes that
the claims-level data elements include certain claim adjudication
information (including whether the claim was paid, partially paid,
denied, or appealed, and the reason for the denial and the outcome of
the appeal, if applicable), as well as certain claim payment
information (including submitted charges, amounts paid by the payor,
and cost-sharing amount).
In order to streamline the provision of the required disclosures
and to avoid unnecessary duplication of reporting with respect to group
health insurance coverage, the Departments propose that, to the extent
coverage under a plan consists of group health insurance coverage, the
plan satisfies the reporting requirements if the plan requires the
issuer offering the coverage to provide the information pursuant to a
written agreement between the plan and the issuer. For example, if a
plan and an issuer enter into a written agreement under which the
issuer agrees to report the information required under proposed 45 CFR
149.230, and the issuer fails to submit a complete or timely report,
then the issuer, but not the plan, would have violated these reporting
requirements. However, if a plan has knowledge that the required report
has not been submitted, the Departments would encourage the plan to
work with the issuer to correct the noncompliance as soon as
practicable or notify the applicable agency enforcing this requirement.
The Departments also highlight that nothing prevents a self-insured
group health plan from contracting with another party, such as a third-
party administrator (TPA), to report the required information,
including, to the extent permitted under other Federal or state laws,
entering into a written agreement for the other party to indemnify the
plan in the event the other party fails to submit a complete or timely
report. However, the plan would be required to monitor the other party
to ensure that the entity is submitting the required information as it
is ultimately the responsibility of the self-insured group health plan
to report the information required under proposed 45 CFR 149.230. The
proposed information collection instrument is designed in a manner that
would enable a TPA that submits information on behalf of multiple self-
insured group health plans to submit a single submission that includes
the required data elements for all such plans.
Excepted benefits are exempt from requirements in chapter 100 of
the Code, part 7 of ERISA, and Part A and Part D of Title XXVII of the
PHS Act.19 20 Short-term, limited-duration insurance is
excluded from the definition of individual health insurance coverage
and is exempt from the new requirements established in section 2799A-8
of the PHS Act. Therefore, short-term, limited-duration insurance (as
defined in 26 CFR 54.9801-2, 29 CFR 2590.701-2, and 45 CFR 144.103) and
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) would not be subject to the reporting requirements set forth
in 45 CFR 149.230 in these proposed rules. Individual coverage health
reimbursement arrangements and 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), 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 the reporting of data
related to air ambulance services inapplicable. Therefore, under these
proposed rules, the reporting requirements also would not apply to
individual coverage health reimbursement arrangements and other
account-based plans, consistent with the existing applicability
provisions in 45 CFR 149.20 with respect to other No Surprises Act
requirements in 45 CFR part 149.
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\19\ See section 9831 of the Code, section 732 of ERISA, and
section 2722 of the PHS Act.
\20\ The CAA amended the PHS Act statutory exemption for these
products to include the new requirements established under the new
Part D of the PHS Act. See section 102(a)(3)(B) of the No Surprises
Act, which made conforming amendments to 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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Section 9823 of the Code, section 723 of ERISA, and section 2799A-8
of the PHS Act (and other provisions of the No Surprises Act that are
applicable to group health plans and health insurance issuers offering
group or individual health insurance coverage) apply to grandfathered
health plans. Section 1251 of the Affordable Care Act provides that
grandfathered health plans are not subject to certain provisions of the
Code, ERISA, and the PHS Act, as added by the Affordable Care Act, for
as long as they maintain their status as grandfathered health plans.
For example, grandfathered health plans are subject neither to the
requirement to cover certain preventive services without cost sharing
under section 2713 of the PHS Act, nor to the annual limitation on cost
sharing set forth
[[Page 51737]]
under section 2707(b) of the PHS Act. If a plan or coverage were to
lose its grandfathered status, it would be required to comply with both
provisions, in addition to several other requirements. However, the CAA
does not include an exception for grandfathered health plans that is
comparable to section 1251 of the Affordable Care Act. Furthermore,
section 102(d)(2) of the No Surprises Act amended section 1251(a) of
the Affordable Care Act to clarify that the new and recodified patient
protections provisions of the No Surprises Act, including those related
to choice of health care professional, apply to grandfathered health
plans. Therefore, the provisions of these proposed rules that apply to
plans and issuers, proposed to be codified at 45 CFR 149.460, would
apply to grandfathered plans.
The Departments seek comment on the use of the calendar year as the
reporting period, including the time it typically takes to fully
adjudicate and pay claims for air ambulance services (furnished by
either participating or nonparticipating providers of air ambulance
services), and the proposed data elements, as well as any potential
challenges that plans and issuers may face in reporting the proposed
data elements. The Departments also seek comment on the potential
format for reporting the data.
F. Reporting Requirements Regarding Air Ambulance Services for
Providers of Air Ambulance Services (45 CFR 149.460)
HHS proposes to amend 45 CFR part 149 by adding 45 CFR 149.460 to
subpart E to describe the data reporting requirements for providers of
air ambulance services. Proposed 45 CFR 149.460(a) includes the general
requirements, the timing and form of the report, and the reporting
requirements in circumstances where a transfer of business occurs.
Proposed 45 CFR 149.460(b) outlines the information that would be
required to be reported.
In proposed 45 CFR 149.460(a)(2), HHS interprets section 106(a) of
the No Surprises Act to require providers of air ambulance services to
submit data regarding air ambulance services on a calendar year basis,
consistent with the proposal for the reporting period in proposed 45
CFR 149.230(a)(2). Moreover, typically, providers of air ambulance
services do not operate based on plan years. HHS proposes that data
with respect to a calendar year would include data relevant to air
ambulance services furnished within the calendar year as well as data
relevant to services for which payments were made within the calendar
year (even if the service was provided in a different calendar year).
HHS expects that these proposed rules would be finalized during 2021,
as required in section 106(d) of the No Surprises Act, and consistent
with the requirement at section 106(a) of the No Surprises Act on
providers of air ambulance services to report the required data not
later than 90 days after the last day of the applicable calendar year.
Thus, HHS proposes that providers of air ambulance services would be
required to submit the data for calendar year 2022 by March 31, 2023,
and submit the data for calendar year 2023 by March 30, 2024. In order
to ensure completeness of the data, in proposed 45 CFR 149.460(a)(3),
HHS further proposes that a provider of air ambulance services that
acquires a line or block of business from another provider of air
ambulance services that provided such services during calendar years
2022 or 2023 would be required to report the air ambulance services
data on behalf of the acquired business for the entire applicable
calendar year. The Departments propose that these reporting
requirements would apply to the selling and acquiring providers of air
ambulance services if a sale or transfer occurs as a result of
providers of air ambulance services being merged, combined, spun off,
affected by, or engaging in any similar transaction during a calendar
year. In addition, to ensure completeness and timeliness of reporting
of all relevant air ambulance services data, the proposed rule would
provide that the Secretary of HHS may provide examples of these
transactions in guidance.
Section 106(a) of the No Surprises Act requires providers of air
ambulance services to submit the following information regarding air
ambulance services: Cost data separated to the maximum extent possible
by air transportation costs and costs of medical services and supplies
associated with furnishing air ambulance services; the number and
location of all air ambulance bases; the number and type of aircraft
operated by the provider; the number of transports by payor mix
(including plans, issuers, government payors, and the uninsured); the
number of claims denied by group health plans or health insurance
issuers and the reasons for denials; and the number of emergency and
non-emergency transports by base and by type of aircraft.
Section 106(a) of the No Surprises Act further requires providers
of air ambulance services to report, in addition to the information
described in the preceding paragraph, such other information regarding
air ambulance services as the Secretaries of HHS and Transportation may
specify. As noted in section II.E. of the preamble, section 106(c) of
the No Surprises Act requires HHS to produce a comprehensive public
report that must address several topics that require collection of
additional information not specifically identified in section 106(a) of
the No Surprises Act. These topics include: The percentage of providers
of air ambulance services in various service delivery models (such as
hospital-sponsored or municipality-sponsored programs); an assessment
of the extent of competition among providers of air ambulance services
on the basis of price and services offered; the average charges for air
ambulance services; amounts paid by plans, issuers, and consumers; an
assessment of the presence of air ambulance bases in, or with the
capability to serve, rural areas and the relative growth in air
ambulance bases in rural and urban areas over time; the percentage of
providers of air ambulance services that have contracts with plans or
issuers; unreasonable market concentration or excessive market
domination that enable unreasonable price increases, and analyses of
the debt collection practices against patients under various service
delivery models; the frequency of patient balance billing, and the
frequency of claims appeals made by providers of air ambulance services
to plans and issuers; and any other data relating to air ambulance
services determined necessary and appropriate by the Secretaries of HHS
and Transportation. To address these topics, including performing the
required analyses and assessments, HHS would need to be able to match
the information collected from plans and issuers to the information
collected from providers of air ambulance services.
Section 106(c)(2) of the No Surprises Act permits the Secretaries
of HHS and Transportation to incorporate information from independent
experts and third-party sources in the development of the report. HHS
examined various sources of data and spoke with several industry
experts and determined that in several areas, the data required to
produce the analyses required in section 106(c)(1) of the No Surprises
Act are not available from other sources. Therefore, in order to
support the development of the report required in section 106(c)(1),
HHS proposes collecting the necessary data from providers of air
ambulance
[[Page 51738]]
services as described in these proposed rules. However, HHS seeks
comment on additional data sources that may inform the development of
the report, and the extent to which such data sources could be used in
lieu of collecting specific data elements.
In proposed 45 CFR 149.460(b), HHS proposes requiring submission of
air ambulance base-level and transport-level data on air ambulance
services, as well as data elements not specifically identified in
section 106(a) of the No Surprises Act, in order to collect the
information necessary to satisfy these statutory requirements. For
example, collection of data on revenue of the provider of air ambulance
services from various sources, including non-transport sources, is
necessary and appropriate to assess the competitiveness of the market
for air ambulance services for purposes of the public report required
under section 106(c) of the No Surprises Act, as well as to validate
the data against the data collected from plans and issuers. Similarly,
collection of air ambulance base-level data would help inform
assessments regarding the competitiveness of the markets as well as
capacity, service availability, and gaps in rural access to air
ambulance services, which the Secretaries of HHS and Transportation are
required to assess under section 106(c). Further, collection of
transport-level data would enable the Secretaries of HHS and
Transportation to conduct the assessments required under section 106(c)
regarding the prices and services offered, the average charges for air
ambulance services, and amounts paid by plans, issuers, and consumers,
and would allow the Secretaries to complete the analyses of the debt
collection practices, the frequency of patient balance billing, and the
frequency of claims appeals.
Section 106(a)(2) of the No Surprises Act requires providers of air
ambulance services to submit data on the number and location of all air
ambulance bases they operate, the number and type of aircraft they
operate, and the number of transports disaggregated by payor mix. In
proposed 45 CFR 149.460(b)(2), HHS proposes collecting this information
for each base, as well as additional information specific to the base
and the aircraft that would enable the Secretaries of HHS and
Transportation to conduct the assessments required in section 106(c) of
the No Surprises Act. This additional information would include the
NPIs associated with the base, the number and type of staff, the number
and type of air ambulance transports per aircraft (including scene
response patient transports, inter-facility patient transports, and
transports of organs, medical personnel, and medical supplies), and the
number of air ambulance responses for the base, including the number of
such responses that did not result in transports. The additional
information would also include the service delivery model(s) of the
base (a hospital-owned or sponsored program, municipality-sponsored
program, hospital independent partnership (hybrid) program, independent
program, or tribally operated program in Alaska) and whether the base
shares operational costs with the affiliated or sponsor organizations,
to complement and support the data required to be collected under
section 9823(b)(1)(B) of the Code, section 723(b)(1)(B) of ERISA,
section 2799A-8(b)(1)(B) of the PHS Act, and section 106(a)(2)(D) of
the No Surprises Act. The rationale for collecting this additional
information is that service delivery models may vary by air ambulance
base in addition to by provider. The additional information would also
include base-specific data related to the providers' of air ambulance
services in-network contractual arrangements with plans and issuers as
well as other, non-direct payor contracts with plans, issuers, or other
entities (including, but not limited to, TPAs or provider networks).
This additional information would complement and support required data
submissions and would also include air medical subscriptions or
ambulance/emergency medical service membership programs associated with
the base, and whether the base operates ground ambulance services in
addition to air ambulance services. Finally, collection of this
additional information would enable analyses under various provisions
of section 106(c)(1) of the No Surprises Act.
Section 106(a) of the No Surprises Act requires providers of air
ambulance services to submit cost data for air ambulance services, as
HHS determines appropriate, and section 106(a) requires providers of
air ambulance services to separate, to the maximum extent possible, air
transportation costs and the costs of medical services and supplies.
HHS reviewed the ambulance cost reporting forms developed for the
Medicare Ground Ambulance Data Collection System, ambulance cost
reporting forms developed by states, a cost report study prepared for
the Association of Air Medical Services and Members, a review of
several studies on air ambulances services, consulted with the
Secretary of Transportation and subject matter experts, and held
listening sessions and additional conversations with providers of air
ambulance services. Based on these activities, HHS determined that the
service delivery or organizational model of a provider of air ambulance
services, the designation of the service area of a base (rural or
urban),\21\ and the identification of fixed and variable costs are all
important factors affecting the costs and revenues of providers of air
ambulance services. Because these factors vary at the air ambulance
base level, HHS proposes in 45 CFR 149.460(b) to require submission of
detailed cost and revenue data at the air ambulance base level, as well
as at the regional and corporate level, for each air ambulance base, if
applicable. The data HHS proposes to collect would enable the
separation of fixed and variable costs of providers of air ambulance
services, as well as medical costs as opposed to air transportation
costs.
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\21\ HHS may apply a custom definition or a broadly accepted
definition, such as the one used by CMS for the Medicare Ambulance
Fee Schedule, to determine whether air ambulance bases and services
are provided in rural or urban areas. More detail on the Medicare
Ambulance Fee Schedule is available at: https://www.cms.gov/medicare/medicare-fee-for-service-payment/ambulancefeeschedule.
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HHS proposes in 45 CFR 149.460(b)(3) that the required cost data be
reported in the following categories: Labor costs by type of staff;
facility costs by facility (including annual lease, rental, or mortgage
costs, other costs of ownership, insurance, maintenance and
improvements, utilities, taxes, computers and software, and other
facility costs); vehicle costs by vehicle (including vendor fees,
depreciation, safety enhancements, non-medical equipment (such as
communications technology), registration and license, taxes, insurance,
maintenance equipment and parts, fuel, and capital medical equipment);
equipment and supplies; and overhead and vendor costs (including
insurance, training, billing, accounting and finance, human resources,
travel, marketing, sales, dispatch or call center, IT support, legal,
medical direction, fees, fines, and taxes).
HHS proposes in 45 CFR 149.460(b)(4) that the required revenue data
would include: Total revenue from paid air ambulance transports, by
payor type, as well as revenue from other sources (such as contracts
with facilities such as hospitals, prisons, and nursing homes); revenue
from emergency air medical services other than for transports (for
example, for transportation of organs, medical personnel, supplies, or
equipment on an
[[Page 51739]]
emergency basis); revenue from sub-contracted ambulance services; fees
for standby events; payments from non-direct contracts such as waiver,
rental, lease, and supplemental arrangements; air medical subscriptions
and ambulance or emergency medical service membership programs;
charitable donations and foundation funding; program-related
investments; receipt of local taxes earmarked for emergency medical
services; contract revenues from local governments in return for air
ambulance services; enterprise funds and utility rates; sales of assets
and services; bond or debt financing; state or local donation of
vehicles or durable equipment; and funding grants or the provision of
time-limited funding from a government entity (including Federal,
state, local, or other). The revenue data would enable the Secretaries
of HHS and Transportation to conduct the holistic assessments required
in various provisions of section 106(c)(1) of the No Surprises Act,
including with respect to the ability of providers of air ambulance
services to compete on the basis of price and services in various
geographic areas, these providers' financial capability to serve rural
areas, the relationship of the average charges for air ambulance
services to business costs and market dynamics and characteristics,
potential anti-competitive behaviors by providers of air ambulance
services, and other factors that may affect the costs of air ambulance
services.
Finally, section 106(a)(2) of the No Surprises Act requires
providers of air ambulance services to submit the following data
regarding air ambulance transports: The number of transports by payor
mix (group health plans, health insurance issuers, state and Federal
Government payors, and the uninsured); the number of claims for air
ambulance services that have been denied payment by plans or issuers
and the reasons for such denials; and the number of emergent and non-
emergent transports disaggregated by air ambulance base and type of
aircraft. In 45 CFR 149.460(b)(5), HHS proposes to require submission
of transport-level data on air ambulance services in order to satisfy
these statutory reporting requirements, as well as to collect the data
necessary to enable HHS, in consultation with the Secretary of
Transportation, to conduct the assessments required in section 106(c)
of the No Surprises Act.
The transport-level data elements in addition to those specifically
identified in section 106(a) of the No Surprises Act that HHS proposes
to collect from providers of air ambulance services include: Date of
service; billing NPI and CPT/HCPCS codes information; and certain
information about the transport (such as the air ambulance base, flight
duration, loaded miles, pick-up (origin) and drop-off (destination)
locations and the point of ambulance pick-up zip code, and whether the
transport was a scene response patient transport, inter-facility
patient transport, or other transport (such as organ, medical
personnel, or medical supplies transport)). These data elements would
enable the Secretaries of HHS and Transportation to identify, combine,
and validate the information collected from plans and issuers, and the
information collected from providers of air ambulance services, as well
as evaluate potential gaps in rural access. Consistent with the
requirements in section 106(a) of the No Surprises Act and to enable
HHS to combine and validate the information collected from providers of
air ambulance services under these proposed rules with air ambulance
data from other sources, as well as to enable HHS to assess abusive
patient collection practices across various payors as required in
section 106(c)(1)(I) of the No Surprises Act, HHS proposes requiring
identification of the primary payor type for each transport, such as
Medicare fee-for-service (FFS), Medicare Advantage, Medicaid, Veterans'
Health Administration, TRICARE, Indian Health Service, group health
plan, health insurance issuer, FEHB plan, Workers' Compensation,
patient cost-sharing, and patient self-pay. Further, to satisfy the
requirements for the comprehensive public report described in section
106(c) of the No Surprises Act, HHS proposes that the transport-level
data elements should include information regarding the contractual
arrangement with the plan or issuer, if applicable, to furnish air
ambulance services under the plan or coverage, respectively, to support
the assessment required in section 106(c)(1)(F) of the No Surprises
Act, as well as the payment methodology for the transport (such as the
base rate, mileage, and intervention or other charges), if applicable,
as recommended by experts. For the same reasons, HHS proposes that the
transport-level data elements should also include: Certain claim
adjudication information (including whether the claim was paid, denied,
or appealed, and the reason for the denial or the outcome of the
appeal, if applicable) to support the data collection and analyses
required in sections 106(a)(2)(E) and (c)(1)(J) of the No Surprises
Act; certain payment information (including submitted charges, amounts
paid by the payor not including the patient, and cost-sharing amount
(if applicable)) to support the assessment required in section
106(c)(1)(C) of the No Surprises Act; the amount billed to the patient,
the amount collected from the patient, and whether the bill was
referred for collection, including lawsuits, liens, or wage garnishment
actions to support the assessments required in section 106(c)(1)(G) and
(c)(1)(I) of the No Surprises Act; and information on any payments from
sources other than the primary payor, such as membership fees and state
or municipal subsidies to support the analyses required in section
106(c)(1)(B), (c)(1)(H), and (c)(1)(K) of the No Surprises Act.
In order to protect stakeholder and consumer privacy, particularly
when collecting transport-level data, HHS would take precautions to
protect the confidentiality of transport-level data. HHS proposes to
collect only that transport-level data that would be sufficient for
producing the comprehensive report required by the statute. HHS intends
to collect and maintain the information using information technology
(IT) systems that are designed to meet all of the security standard
protocols established under Federal law or by HHS relevant to such
information.
HHS is publishing the proposed information collection for public
comment at the same time as or shortly after these proposed rules. The
proposed information collection would include a proposed data template
and instructions.
HHS seeks comment on the use of the calendar year as the reporting
period, including the time it typically takes payors to fully
adjudicate and pay claims for air ambulance services (furnished by
either participating or nonparticipating providers of air ambulance
services), the proposed data elements described in this section of the
preamble, the appropriate levels for reporting of these data elements
(regional/corporate, base, transport), and potential challenges that
providers of air ambulance services may face in reporting the proposed
data elements, including any special considerations for the reporting
of the proposed data elements with respect to municipality and other
government-owned or sponsored providers of air ambulance services. HHS
also seeks comment on the potential format for reporting the data.
[[Page 51740]]
III. Provisions of the Proposed Rules--Department of HHS
A. Part 144--Requirements Relating to Health Insurance Coverage
1. Basis and Purpose (45 CFR 144.101)
HHS proposes conforming amendments to 45 CFR 144.101 to reflect the
proposed amendments to 45 CFR part 150, described in section III.C of
the preamble. Specifically, HHS proposes to revise 45 CFR 144.101(e)
\22\ to include references to the enforcement-related provisions added
by the No Surprises Act (section 2799B-4 of the PHS Act and section
106(e) of the No Surprises Act), and to specify that the enforcement
provisions in 45 CFR part 150 apply to the provisions of 45 CFR part
149 concerning group or individual health insurance, providers and
facilities, and providers of air ambulance services.
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\22\ The July 2021 interim final rules redesignated paragraph
(d) of 45 CFR 144.101 as paragraph (e) and further redesignated
paragraph (e) of 45 CFR 144.101 as paragraph (f). Although the
effective date of the July 2021 interim final rules is not until
September 13, 2021, references to paragraph (e) in these proposed
rules are references to the newly redesignated paragraph (e)
(formerly paragraph (d)). This rule also proposes a technical
correction to 45 CFR 144.103(e)(2) to correct a cross-reference that
was inadvertently not updated when paragraph (d) was redesignated.
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B. Part 148--Requirements for the Individual Health Insurance Market
1. Authority
HHS proposes to make technical corrections to the authority listed
for 45 CFR part 148. More specifically, HHS proposes to update the list
to reference the Federal insurance reforms applicable to the individual
market captured in PHS Act sections 2722 through 2763, codified at 42
U.S.C. 300gg-21 through 300gg-63, along with PHS Act sections 2791 and
2792, codified at 42 U.S.C. 300gg-91 and 300gg-92. This would include
new section 2746 of the PHS Act, as added by section 202(c) of Title II
of Division BB of the CAA, in the list of authorities for 45 CFR part
148. Finally, HHS proposes to remove the reference to PHS Act section
2711, codified at 42 U.S.C. 300gg-11, because this statutory provision
is not implemented as part of the HHS regulations in 45 CFR part
148.\23\
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\23\ See 45 CFR 147.126. Also see 45 CFR 146.123.
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2. Basis and Purpose (45 CFR 148.101)
HHS proposes to amend 45 CFR 148.101 to expand the purpose of 45
CFR part 148. Specifically, HHS proposes to add a reference to the new
reporting and disclosure requirements regarding agent and broker
compensation that these proposed rules would add as a new subpart F to
45 CFR part 148 to implement the requirements of section 2746 of the
PHS Act, as added by section 202(c) of Title II of Division BB of the
CAA.
3. Scope and Applicability Date (45 CFR 148.102)
HHS proposes to amend 45 CFR 148.102 by adding paragraph (a)(3) to
specify that the requirements in proposed 45 CFR 148.410 would apply to
health insurance issuers of individual health insurance coverage and
short-term, limited-duration insurance. HHS also proposes to amend
paragraph (b) by excepting 45 CFR 148.410 from the applicability dates
specified in paragraph (b), as these proposed rules set forth the
applicability date specific to 45 CFR 148.410 in that section.
Section 2746 of the PHS Act, as added by section 202(c) of Title II
of Division BB of the CAA, applies to grandfathered individual health
insurance coverage, for the reasons set forth in section II.E. of the
preamble. Therefore, the provisions in proposed 45 CFR 148.410 that
apply to individual health insurance coverage, would apply to
grandfathered as well as nongrandfathered individual health insurance
coverage.
4. Subpart F--Requirements Related to Reporting and Disclosure
HHS proposes to add a new subpart F to 45 CFR part 148 and new 45
CFR 148.410 within that subpart to implement the requirements of
section 2746 of the PHS Act, as added by section 202(c) of Title II of
Division BB of the CAA. Section 2746 of the PHS Act requires health
insurance issuers offering individual health insurance coverage or
short-term, limited-duration insurance to make disclosures to enrollees
and submit reports to HHS regarding direct and indirect compensation
provided by the issuer to an agent or broker associated with enrolling
individuals in such coverage. Sections 2746(b) and (c) of the PHS Act
detail the specific requirements for disclosure and reporting,
respectively. HHS proposes to codify these requirements in new proposed
45 CFR 148.410.
Agents and brokers enter into appointment arrangements with health
insurance issuers; these arrangements, which are generally regulated by
state law, govern compensation provided to agents and brokers for
assisting consumer enrollment in an issuer's plans. The specific
compensation arrangement between a health insurance issuer and the
agent or broker is typically laid out in a written document such as a
commission schedule. Compensation arrangements may also include other
types of compensation, such as fees and bonuses. Section 2746 of the
PHS Act improves the transparency of this compensation system by
requiring the disclosure of this compensation information to consumers
and reporting of this information to HHS.
5. Subpart F--Requirements Related to Reporting and Disclosure--
Disclosure of Agent and Broker Compensation to Individuals in
Individual Health Insurance Coverage or Short-Term, Limited-Duration
Insurance (45 CFR 148.410)
a. Health Insurance Issuer Standards
HHS proposes to add, in 45 CFR 148.410(a), a general statement of
the obligations of health insurance issuers offering individual health
insurance coverage or short-term, limited-duration insurance, to
disclose to policyholders and report to HHS on an annual basis direct
and indirect compensation provided by the issuer to an agent or broker
associated with enrolling individuals in such coverage.
HHS proposes to add, in 45 CFR 148.410(b), definitions of key terms
in these proposed rules. HHS proposes to define ``agent or broker''
through a cross-reference to the definition for the term in 45 CFR
155.20. Section 2746 of the PHS Act applies to both direct and indirect
compensation paid to an agent or broker by a health insurance issuer
offering individual health insurance coverage or short-term, limited-
duration insurance, but does not define direct and indirect
compensation. Therefore, HHS proposes regulatory definitions for these
key terms that define direct and indirect compensation in a manner that
covers all forms of consideration that might be transferred between an
issuer offering individual health insurance coverage or short-term,
limited-duration insurance and an agent or broker for enrollment in
such coverage, regardless of the method by which that consideration is
transferred.
In new proposed 45 CFR 148.410(b)(3), direct compensation is
defined as monetary amounts, including sales and base commissions, paid
by an issuer that are attributable directly to the policy, certificate,
or contract of insurance and that are paid to an agent or broker for
the sale, placement, or renewal of individual health insurance coverage
or short-term, limited-duration insurance. HHS proposes in new proposed
45 CFR 148.410(b)(4) to define
[[Page 51741]]
indirect compensation as payments by an issuer attributable indirectly
to a policy, certificate, or contract of insurance to agents, brokers,
and other persons for items other than sales and base commission.
Examples of indirect compensation include service fees, consulting
fees, finders' fees, profitability and persistency bonuses, awards,
prizes, volume-based incentives, and non-monetary forms of
compensation. HHS proposes in new proposed 45 CFR 148.410(b)(2) to
define a commission schedule as an itemized list or table that provides
the commission levels that are paid by an issuer for the sale,
placement, or renewal of individual health insurance coverage or short-
term, limited-duration insurance. These definitions are based on the
most common and essential terms HHS has observed in various examples of
issuer commission schedules in the individual market. HHS proposes to
define policyholder in new proposed 45 CFR 148.410(b)(5) for purposes
of this section as the individual who purchases individual health
insurance coverage or short-term, limited-duration insurance and is
responsible for the payment of premiums.
b. Disclosure Requirements
To ensure transparency of agent and broker compensation when
purchasing individual health insurance coverage or short-term, limited-
duration insurance, and to implement sections 2746(b)(1) and (2) of the
PHS Act, HHS proposes in new proposed 45 CFR 148.410(c) to codify the
requirement that health insurance issuers offering individual health
insurance coverage or short-term, limited-duration insurance must
disclose to a potential or existing policyholder the amount of direct
and indirect compensation provided to an agent or broker associated
with enrolling the policyholder in the individual health insurance
coverage or short-term, limited-duration insurance. This disclosure
would be required to include the commission schedule used to determine
the compensation owed to an agent or broker as part of the appointment
contract between the agent or broker and the health insurance issuer
offering individual health insurance coverage or short-term, limited-
duration insurance, as well as the structure for compensation not
captured on the commission schedule.
Consistent with the requirements in section 2746(b) of the PHS Act,
HHS proposes in new proposed 45 CFR 148.410(c)(2) that for new, initial
enrollments, this disclosure would be required to be made prior to when
potential policyholders finalize plan selection and also to be included
on any documentation confirming the initial enrollment, including
enrollment documentation required in applicable state or Federal law or
an initial enrollment package. Section 2746(b)(2) of the PHS Act
requires health insurance issuers offering individual health insurance
coverage or short-term, limited-duration insurance to include the
disclosure on any documentation confirming the individual's enrollment.
HHS recognizes that the term ``any documentation'' could be read
broadly to refer to any documentation that a health insurance issuer
provides during a plan year that serves as confirmation that the
individual is enrolled in the coverage. However, HHS is of the view
that requiring such a broad reading of the statutory requirement would
be burdensome to issuers, without producing a commensurate benefit to
individuals who receive the disclosure. Therefore, HHS proposes to
interpret the statutory language more narrowly. Specifically, with
respect to initial enrollments, HHS proposes, in 45 CFR 148.410(c)(2),
to require disclosure on any documentation confirming initial
enrollment, including enrollment documentation required in applicable
state or Federal law or an initial enrollment package.\24\ In addition,
consistent with the provisions in section 2746(d) of the PHS Act that
recognize the need to account for the different processes for plan
renewals, HHS proposes in new proposed 45 CFR 148.410(c)(3) that for
renewals of enrollment in a plan, an issuer must provide the required
disclosure to the policyholder with the renewal notice required in 45
CFR 147.106(f) or 148.122(i), if applicable. HHS proposes this because
plan renewals in the individual market generally do not have a moment
when a consumer finalizes plan selection, as many of these renewals
occur automatically, and because these renewal notices can also be
considered to confirm enrollment in the plan for the upcoming plan
year. Therefore, issuers would be required to provide the required
disclosure as part of an initial enrollment package or renewal notice,
but would not be required to provide the required disclosure on other
documents that could be considered to confirm enrollment, such as
explanations of benefits.
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\24\ For example, pursuant to 45 CFR 147.200(a)(1)(iv), a health
insurance issuer offering individual health insurance coverage must
provide a summary of benefits and coverage to an individual covered
under the policy upon application, by the first day of coverage (if
there are changes), upon renewal, reissuance, or reenrollment, and
upon request.
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In the absence of any documentation required by applicable state or
Federal law to confirm initial enrollment, or the requirement for a
notice of renewal of coverage with respect to short-term, limited-
duration insurance, HHS proposes, as a default in new proposed 45 CFR
148.410(c)(4), that issuers would be required to provide the disclosure
with the invoice for the first premium payment for the initial coverage
term and for each renewal period. HHS invites comment on whether there
are other forms of documentation confirming enrollment for either
individual health insurance coverage or short-term, limited-duration
insurance on which disclosure of compensation information should be
required and whether requiring delivery of the disclosure at another
time, such as between the final plan selection and issuance of the
invoice for the first premium payment, may be more appropriate.
HHS proposes to codify in new proposed 45 CFR 148.410(c)(5) minimum
requirements for disclosure of direct and indirect compensation
information. HHS proposes that, at a minimum, a health insurance issuer
offering individual health insurance coverage or short-term, limited-
duration insurance could satisfy the disclosure requirement using the
commission schedules or other documents that detail the applicable
commission levels and indirect compensation, such as bonuses. When used
to satisfy this new disclosure requirement, these documents must
clearly specify commissions paid by an issuer to an agent or broker for
the applicable plans for which the agent or broker has an appointment
arrangement with the issuer, distinguish between commission payments
for new enrollments and such payments for renewed enrollments if the
issuer differentiates compensation for those two types of enrollment,
and explain the qualifying thresholds for the payment of indirect
compensation to an agent or broker. Requiring that the disclosure must
include a commission schedule would ensure a consistent and readily
available document for all policyholders to use to understand the
compensation that their insurance agent or broker would receive and
make informed purchasing decisions. If an issuer of individual health
insurance coverage or short-term, limited-duration insurance also
offers direct or indirect compensation that is not captured by the
commission schedule, the issuer must supplement the disclosure of the
information on the commission
[[Page 51742]]
schedule with additional documentation disclosing such other
compensation.
HHS expects that issuers subject to the requirements of this
section would integrate this new disclosure requirement into their
existing compliance operations. An issuer's obligation could be
satisfied by the agent or broker making the required disclosure on the
issuer's behalf. For example, issuers may provide agents or brokers who
have an appointment arrangement with the issuer printed versions of the
commission schedule and other documentation disclosing direct and
indirect compensation, if applicable, to attach to enrollment materials
or may provide a link to an online version of the document. This would
equip agents and brokers with the information necessary to ensure that
consumers would be aware of any compensation being paid by the issuer
to the agent or broker prior to enrolling. Whether issuers choose to
comply directly with this obligation or partner with their agents and
brokers to provide the required disclosure, materials provided would be
required to be made available in accessible formats for people with
disabilities (at no cost to the individual) and people with limited
English proficiency. Issuers would be required to comply with
applicable Federal language and accessibility requirements regarding
disclosure documents.\25\ This typically requires documents to be made
available in any of the 15 most common languages in the state.\26\
Issuers would also be required 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.\27\ HHS is of the view that individuals cannot receive
meaningful disclosure if they cannot understand the information
provided in the disclosure documents. HHS seeks comment on these
proposals.
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\25\ See, for example, Guidance and Population Data for
Exchanges, Qualified Health Plan Issuers, and Web-Brokers to Ensure
Meaningful Access by Limited-English Proficient Speakers Under 45
CFR 155.205(c) and 156.250 (March 30, 2016) https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Language-accessguidance.pdf and ``Appendix A--Top 15 Non-English Languages by
State'' https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Appendix-A-Top-15-non-englishby-state-MM-508_update12-20-16.pd. See also 42 U.S.C. 18116, 42 U.S.C. 2000d et
seq., 269 U.S.C. 794, 42 U.S.C. 12101 et seq.
\26\ Ibid.
\27\ See 42 U.S.C. 18116, 42 U.S.C. 2000d et seq., 269 U.S.C.
794, 42 U.S.C. 12101 et seq.
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These proposed rules do not prescribe a specific format for
issuers' commission schedules or other documents that detail the
applicable direct or indirect compensation. Instead, HHS proposes in 45
CFR 148.410(c)(5) that, to the extent the commission schedules or other
documents that detail the applicable direct or indirect compensation
are used to satisfy the requirements of this section, the schedules or
other documents would be required to comply with the minimum standards
outlined therein regarding agent and broker compensation. This proposed
requisite information includes information on initial and renewal
commissions and explanation of the qualifying thresholds for the
payment of indirect compensation to an agent and broker, at a minimum.
Commission schedules are widely used in the health insurance industry
and customarily include this minimum informational content with respect
to initial and renewal commission rates. However, the format can vary
by issuer. It is HHS's view, at this time, that the benefits of
prescribing and standardizing the proposed minimum required content in
a specific format for commission schedules would not outweigh the costs
of implementation. HHS is also not proposing a specific format for the
additional documentation that detail the applicable direct or indirect
compensation. Instead, HHS is proposing minimum standards for the
information that must be disclosed and permitting issuers to determine
what documentation may contain that information and be used to satisfy
the disclosure requirement, whether the issuer calls it a commission
schedule or refers to it by another term. HHS invites comments on these
proposals, especially the considerations of costs and benefits
associated with standardizing the format for compensation disclosure.
HHS proposes that issuers would be required to make the necessary
disclosures prior to the potential policyholder finalizing plan
selection and, in addition, that the disclosure be included on any
documentation confirming the individual's enrollment, as required under
section 2746(b) of the PHS Act. This requirement would ensure that the
person who is choosing the coverage and agreeing to be financially
responsible for premiums and other payments due under the insurance
contract (who HHS proposes to define as the `policyholder') can
evaluate whether and to what extent the advice they received from an
agent or broker may be influenced by the agent's or broker's
compensation arrangement with an issuer prior to finalizing the plan
selection.
HHS considered whether to propose requiring that issuers make these
required disclosures to all plan enrollees, but are of the view that
such a requirement would be needlessly burdensome. First, requiring
issuers to disclose direct and indirect agent or broker compensation to
each person in an enrollment group would be unreasonable as many
enrollees are infants, minor children, or otherwise not responsible for
choosing their health insurance coverage. As noted, requiring the
disclosure be made to the policyholder would allow that individual to
evaluate whether and to what extent the advice they received from an
agent or broker may be influenced by the compensation received. HHS
expects that the policyholder would be able to relay information from
the disclosure to the other enrollees on the policy, similar to how the
policyholder is entrusted to relay other information about the plan
selection to the other enrollees in the policy. HHS is also of the view
that requiring issuers to make these disclosures to each enrollee could
place a larger burden on issuers and enrollees than necessary without
adding meaningful consumer benefit. For example, to the extent an
issuer uses the agent or broker to provide the disclosure, requiring
disclosure to be made to all enrollees prior to finalizing the plan
selection would necessitate an adult, seeking to purchase coverage for
their family, to bring that entire family to the office of the
insurance agent or broker in order to receive the disclosure of
information about direct and indirect compensation before finalizing
the plan selection in which the family members would be enrolled.
A similar burden exists for virtual or telephonic enrollments. The
agent or broker assisting with the enrollment would need to contact
each individual on the plan prior to finalizing plan selection, which
could be time-consuming or nigh impossible. This would require all plan
enrollees to be near a phone or computer at the time of enrollment and
either answer a phone call or respond to an email prior to
[[Page 51743]]
finalizing plan selection. This amount of coordination seems unduly
burdensome on consumers and would virtually eliminate parents' ability
to finalize a plan selection while their children are in school, as the
children would generally be unable to be contacted by the agent or
broker while attending classes. In addition, emails or phone calls from
unknown individuals are often not answered or responded to promptly, if
at all, meaning a policyholder would need to first contact the other
plan enrollees, telling them to expect a call from the agent or broker,
which adds another layer of coordination and complexity. Additionally,
children or developmentally challenged individuals may not be mentally
capable of providing their consent or may not have an email address or
phone number, meaning if they were not physically with the policyholder
at the time directly prior to finalizing plan selection, contacting
them would be impossible.
c. Reporting Requirements
To implement the requirement at section 2746(c) of the PHS Act that
health insurance issuers offering individual health insurance coverage
or short-term, limited-duration insurance must annually report to HHS
prior to the beginning of open enrollment any direct or indirect
compensation provided to an agent or broker associated with enrolling
individuals in such coverage, HHS proposes in new proposed 45 CFR
148.410(d)(1) to require issuers to submit to HHS, in a form and manner
prescribed by the Secretary, any direct and indirect compensation
provided to agents and brokers associated with enrolling individuals in
individual health insurance coverage and short-term, limited-duration
insurance sold by the issuer. HHS intends to collect data similar to
the data collected by DOL on compensation of insurance producers for
group health plans subject to the Form 5500 reporting requirement.
DOL utilizes the Form 5500 series as part of its overall reporting
and disclosure under ERISA. DOL collects information related to
insurance on Form 5500 Schedule A, which includes the identifying
information for the issuer and the agent or broker, and the amount of
compensation paid to agents and brokers. Issuers would be expected to
submit the reporting data to HHS through an online system. HHS is
proposing to require issuers provide, for each payment recipient and
intermediary organization in a specific month of the reporting year, a
single row of data in comma-separated values (CSV) format containing
the following fields/columns: (1) Payor Federal Tax ID Number (FTIN);
(2) Recipient Identifier Type (``NPN'' for writing agents or ``FTIN''
for payments made to intermediaries); (3) Recipient Identifier Value
(the actual number); (4) The date on which the payment was made to the
payment recipient; (5) Direct Compensation, expressed as a dollar
amount (the commission); (6) Indirect Compensation, expressed as a
dollar amount, if any (if indirect compensation payment amount was made
in that month, for example, a bonus was paid out; bonuses for annual
performance are accounted for in December of the reporting year rather
than disaggregated into 12 parts for each month); (7) the basis for
indirect compensation--a text field allowing entry of what the grounds
for the indirect compensation were (bonus, incentive, etc.); and (8)
other information specified by the Secretary, which may include, for
example, distinguishing between individual health insurance coverage
and short-term, limited-duration insurance, listing the appointment
arrangement duration, and providing the number of plans the agent sold.
HHS proposes to add new proposed 45 CFR 148.410(d)(2) to specify
that the reporting by issuers would be required to reflect both
compensation arrangements directly between the writing agent or broker
and the issuer, and compensation arrangements from the issuer to the
writing agent or broker involving one or more intermediary
organizations in connection with the sale of individual health
insurance coverage or short-term, limited-duration insurance. Examples
of intermediary organizations that are often involved in the sale,
placement, or renewal of individual health insurance coverage or short-
term, limited-duration insurance include general line agencies and
marketing organizations. This proposed approach would ensure that the
information reported annually to HHS reflects the full amount of
compensation received by agents and brokers related to the sale,
placement, or renewal of individual health insurance coverage and
short-term, limited-duration insurance.
HHS proposes that the annual report submitted by issuers to HHS
contain more detailed information than the disclosure to policyholders,
including information related to intermediary organizations as well as
actual compensation amounts rather than payment structures, because HHS
proposes for the report to be due after the end of the year for which
compensation was paid and prior to the beginning of open enrollment for
the following year. This timeline would enable the report to HHS to
provide a more complete reflection of compensation actually provided
throughout the previous calendar year than the disclosure to consumers,
which must be provided prior to individuals finalizing their plan
selections and at renewal. In addition, requiring issuers to provide
information to policyholders on the compensation arrangements between
insurance agents or brokers and intermediary organizations, like
general agencies, would substantially increase the complexity of the
disclosure materials without providing the same level of consumer
benefit. Disclosure of direct and indirect compensation is intended to
inform the consumer of considerations, other than the consumer's best
interests, that may impact the guidance and decision-making of the
insurance agent or broker. HHS is of the view that information about
whether that compensation would first be paid to a general agency and
the amount of compensation that agency would claim before disbursing to
the agent would not have a similar impact on the consumer's decision-
making process. However, reporting of this additional information to
HHS would assist HHS in monitoring and enforcing compliance with the
disclosure requirements and ensuring that consumer disclosures
accurately and adequately reflect direct or indirect compensation
payment practices.
HHS proposes in new proposed 45 CFR 148.410(d)(4) to require
submission to HHS of the required reports on an annual basis by the
last business day of July of the calendar year following the applicable
reporting period. For example, reporting for calendar year 2022 would
be due by July 31, 2023. Under this proposed rule, for non-calendar
year policies, which may exist in the short-term, limited-duration
insurance market, issuers would be required to split the agent and
broker compensation between the reports for two calendar years. For
example, for a short-term, limited-duration policy in effect from
December 1, 2022 to February 28, 2023, an issuer would be required to
report the compensation paid on the policy for December 2022 in the
report due by July 31, 2023 and the compensation paid on the policy for
January and February 2023 in the report due July 31, 2024. HHS seeks
comment on this proposal, and would provide additional guidance in the
final rule on special cases, as may be necessary, including indirect
compensation paid
[[Page 51744]]
for enrollments that span multiple years based on comments on this
proposed rule and feedback from regulated entities subject to these
requirements and other stakeholders.
Section 2746(c) of the PHS Act states that issuers must report the
data to HHS prior to the beginning of open enrollment. The last
business day of July would align with the statute and would avoid
significant overlap with the qualified health plan certification
process and states' rate and form review processes. This date would
also provide HHS with adequate time to review the submitted reports
prior to the beginning of open enrollment for the following year and
would provide issuers ample time after the reporting year to prepare
and validate the information.
d. Applicability
In new proposed 45 CFR 148.410(e), HHS is proposing to codify the
provisions of section 2746(d) of the PHS Act, which establishes a
transition rule for these new requirements and provides that the
requirements would not be applicable to contracts executed between
health insurance issuers offering individual health insurance coverage
or short-term, limited-duration insurance and agents or brokers before
December 27, 2021. HHS therefore proposes that these new requirements
would apply to contracts executed between an agent or broker and a
health insurance issuer offering individual health insurance coverage
or short-term, limited-duration insurance on or after December 27,
2021. For purposes of determining the date of contract execution, HHS
proposes to deem the execution of contractual addenda or revisions to
the material terms of a pre-existing contract to be the execution of a
new contract to which the disclosure and reporting requirements would
apply.
HHS does not expect that many appointment contracts would be newly
executed between the effective date of the statutory requirement,
December 27, 2021, and the beginning of the first reporting period
proposed in these proposed rules, January 1, 2022. As a result, under
this proposal, HHS may exercise discretion and adopt a temporary policy
of relaxed enforcement in connection with the enforcement of the
proposed reporting requirement on a case-by-case basis for appointment
contracts executed and policies effective within the period between
December 27, 2021 and January 1, 2022, and encourages states that are
the primary enforcers of these requirements to adopt a similar
enforcement approach.
HHS seeks comment on all aspects of these proposals regarding the
definitions, disclosure requirements, reporting requirements, and
applicability.
C. Part 150--CMS Enforcement of Group and Individual Insurance Market
and Provider and Facility Requirements
Section 2723 of the PHS Act contemplates that states would exercise
primary enforcement authority with respect to issuers that offer health
insurance coverage in the individual or group markets within the state.
If a state notifies HHS that it does not have the authority to enforce
PHS Act requirements, or if HHS determines that a state is not
substantially enforcing PHS Act requirements with respect to issuers,
HHS has the responsibility to enforce the PHS Act provision or
provisions in that state and has delegated this enforcement authority
to CMS.
The CAA enacted new provisions of the PHS Act that require health
insurance issuers to submit certain information to HHS or the
Departments. This includes the requirement under section 2746(c) for
issuers that offer individual health insurance coverage and issuers
that offer short-term, limited-duration insurance coverage to annually
report to the Secretary of HHS, prior to the beginning of open
enrollment, any direct or indirect compensation provided to an agent or
broker associated with enrolling individuals in such coverage. Health
insurance issuers must also report to the Departments certain
information regarding air ambulance services under section 2799A-8 and
certain information regarding pharmacy benefits and drug costs under
section 2799A-10. Additionally, in accordance with section 2799A-
9(a)(4), issuers must submit to HHS an annual attestation of compliance
with the prohibition of gag clauses on price and quality information
under section 2799A-9. Under section 2723 of the PHS Act, states have
the opportunity to be the primary enforcers of sections 2746(c), 2799A-
8, 2799A-9(a)(4), and 2799A-10. However, HHS is of the view that states
would not look to enforce these PHS Act provisions because they are
requirements for issuers to report to HHS or the Departments, and
states would not have access to the submissions to assess compliance.
Instead, HHS anticipates that states would focus resources on
implementing and enforcing the other requirements in the CAA. HHS
therefore proposes to have direct enforcement authority for these
issuer requirements in all states, unless the state notifies HHS of its
intent to enforce. HHS solicits comments on this approach and whether
there are states that intend to assist with enforcement of any of these
requirements.
In cases where there is a question about whether the state is
failing to substantially enforce one or more PHS Act requirements, the
procedures outlined in 45 CFR 150.201 through 150.221 govern. First, if
CMS is satisfied that there is a reasonable question whether there has
been a failure to substantially enforce one or more PHS Act
requirements, CMS notifies the appropriate state parties, providing 30
days to respond. Then, if CMS makes a preliminary determination that
the state is failing to substantially enforce, the state is provided an
opportunity to show evidence of substantial enforcement. If CMS
determines that the state's failure to substantially enforce has not
been corrected, then CMS would send a final determination notice to the
state identifying which requirements CMS would directly enforce and the
effective date for such enforcement. Finally, current regulations
provide a transition mechanism by which a state can assume or resume
primary enforcement of the applicable PHS Act requirement(s).
Most states currently work to ensure that issuers offering health
insurance coverage in the individual and group markets comply with
applicable requirements of the PHS Act. Although some states lack
direct state statutory authority to enforce, CMS has worked with many
of these states to implement collaborative enforcement agreements.
Through these agreements, a state performs the same regulatory
functions with respect to the applicable individual and group insurance
market requirements of Title XXVII of the PHS Act (market reform
provisions) as it does to ensure compliance with state law, and seeks
to achieve voluntary compliance from issuers if the state finds a
potential violation. Similarly, consumers continue to contact the state
with inquiries and to submit complaints relating to the market reform
provisions. Under this collaborative approach, if the state finds a
potential violation and is unable to obtain voluntary compliance from
an issuer, it would refer the matter to CMS for possible enforcement
action. If a state lacks authority or ability to enforce PHS Act
requirements, then CMS would directly enforce the relevant market
reform provisions in the state with respect to health insurance issuers
in the group and individual markets. Finally, CMS directly enforces the
relevant market reform provisions with
[[Page 51745]]
respect to non-Federal governmental plans in all states.
When CMS is responsible for enforcement with respect to issuers and
non-Federal governmental plans, enforcement tools CMS uses in
accordance with 45 CFR 150.301 through 150.347, include policy form
review, complaint-driven investigations, and market conduct
examinations. CMS also has authority to impose civil money penalties
against health insurance issuers in a state in which CMS is directly
enforcing the PHS Act, and against non-Federal governmental plan
sponsors in all states that fail to comply with applicable PHS Act
requirements.\28\
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\28\ See section 2723(b) of the PHS Act. Also see 45 CFR 150.301
through 150.347.
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The CAA adds additional PHS Act requirements that apply to group
health plans, including non-Federal governmental plans, health
insurance issuers, providers, including providers of air ambulance
services (providers), and health care facilities (facilities). CMS
would enforce these provisions to the extent they apply to non-Federal
governmental plans in all states and to issuers in states where CMS
directly enforces in the aforementioned manner. With respect to
enforcement of the requirements applicable to providers and facilities,
the CAA largely mirrors the current issuer enforcement structure:
Namely, states are the primary enforcers, with CMS only enforcing if a
state fails to substantially enforce, and these proposed rules reflect
this structure. However, the provisions of section 106(a) of the No
Surprises Act that apply to providers of air ambulance services are
enforced directly by CMS. The CAA and these proposed rules would
require CMS to follow the process set forth in section 1128A of the SSA
to impose civil money penalties on providers or facilities for non-
compliance with provisions of Part E of Title XXVII of the PHS Act and
on providers of air ambulance services for non-compliance with the
requirement to submit data under section 106(a) of the No Surprises
Act. The applicable state authority involved in oversight and
enforcement of providers and facilities would likely be different in
most, if not all, states from the applicable state authority
responsible for oversight and enforcement over health insurance
issuers.
HHS proposes to make conforming amendments to existing regulations
in subparts A, B, and D and to add a new subpart E to 45 CFR part 150
to provide for CMS direct enforcement when a state is not substantially
enforcing PHS Act requirements pertaining to providers and facilities
and when a provider of air ambulance services fails to submit data
required under section 106(e) of the No Surprises Act. HHS also
proposes to amend existing regulations to add references to 45 CFR part
149, which implements these PHS Act requirements and to which the
enforcement regulations in 45 CFR part 150 would also apply.
Additionally, HHS proposes revising subpart C of 45 CFR part 150 to
align these provisions with industry standards and clarify the existing
CMS enforcement procedures, and equip CMS with additional tools to
fulfill its enforcement responsibilities under the PHS Act.
HHS proposes revising the title of 45 CFR part 150 to reflect the
extension of CMS's enforcement authority to providers and facilities in
states that are not substantially enforcing the requirements in Part E
of Title XXVII of the PHS Act and to providers of air ambulance
services for purposes of the data submission requirements under section
106(e) of the No Surprises Act.
1. Basis and Scope (45 CFR 150.101)
HHS proposes to add to 45 CFR 150.101(a), which captures the basis
of 45 CFR part 150, references to section 2799B-4 of the PHS Act, which
subjects providers and facilities to the enforcement provisions of the
PHS Act that HHS proposes to implement in 45 CFR part 150, and section
106(e) of the No Surprises Act, which subjects providers of air
ambulance services to civil money penalties for failure to comply with
data reporting requirements. HHS also proposes to make conforming edits
to expand the scope of 45 CFR part 150 in 45 CFR 150.101(b), including
to specifically outline the enforcement framework that HHS proposes to
implement under subpart E of 45 CFR part 150. This includes proposed
amendments to 45 CFR 150.101(b)(2) to add a reference to 45 CFR part
149 to expand the scope of the framework applicable to enforcement over
health insurance issuers. In addition, HHS proposes to add a new
paragraph (b)(3) to capture the scope of the framework applicable to
enforcement over providers and facilities.
2. Definitions (45 CFR 150.103)
HHS proposes to amend 45 CFR 150.103 to revise the introductory
text to add a reference to 45 CFR part 149 and to add definitions
related to enforcement against providers and facilities. Specifically,
HHS proposes to define the term ``facility'' for purposes of 45 CFR
part 150 to mean a health care facility, an emergency department of a
hospital, and an independent freestanding emergency department, as
those terms are defined in 45 CFR 149.30, and any other facility
subject to the requirements in Part E of Title XXVII of the PHS Act.
HHS also proposes to define the term ``provider'' for purposes of 45
CFR part 150 to mean a physician or other health care provider, as that
term is defined in 45 CFR 149.30, as well as a provider of air
ambulance services, as that term is defined in 45 CFR 149.30. These
combined definitions would make 45 CFR part 150 easier to read and
understand, as the enforcement procedures outlined in 45 CFR part 150
apply to all the aforementioned parties separately defined in 45 CFR
149.30. HHS also proposes to make conforming amendments to add
references to 45 CFR part 149 to the definition of ``individual health
insurance policy or individual policy'' and the definition of ``PHS Act
requirements.'' HHS seeks comment on these proposals.
3. State Enforcement (45 CFR 150.201)
Under 45 CFR 150.201, states have primary enforcement authority
over health insurance issuers with respect to PHS Act requirements,
unless the state notifies CMS that it has not enacted legislation to
enforce or that it is not otherwise enforcing PHS Act requirements or
the state fails to substantially enforce the PHS Act requirements that
apply to issuers, in which case CMS would enforce those requirements.
These proposed rules would make a conforming amendment at 45 CFR
150.201 to specify that states also have primary enforcement authority
over providers and facilities that furnishes items or services to
individuals in the state, unless the state notifies CMS that it has not
enacted legislation to enforce or that it is not otherwise enforcing
PHS Act requirements or the state fails to substantially enforce the
PHS Act requirements that apply to providers and facilities, in which
case CMS would enforce these requirements. Under this proposed rule, a
state would be the primary enforcer of the PHS Act requirements against
providers or facilities that furnish services via telehealth to
individuals located in the state, even in circumstances where the
provider or facility is located in a different state. While many states
require licensure of out-of-state telehealth providers furnishing care
to individuals within the state, HHS understands that this is not
always true, and that many states have relaxed licensure requirements
in response to
[[Page 51746]]
the COVID-19 public health emergency.\29\ HHS seeks comment on whether
the approach taken in this proposed rule presents challenges with
respect to providers or facilities furnishing telehealth services.
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\29\ See, for example, Center for Connected Health Policy.
Cross-State Licensing. Available at: https://www.cchpca.org/topic/cross-state-licensing-professional-requirements/ (last accessed
August 8, 2021); and Federation of State Medical Boards. U.S. States
and Territories Modifying Requirements for Telehealth in Response to
COVID-19. (July 28, 2021.) Available at: https://www.fsmb.org/siteassets/advocacy/pdf/states-waiving-licensure-requirements-for-telehealth-in-response-to-covid-19.pdf.
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HHS also proposes to make a technical correction to the title of
subpart B to reflect that this subpart would apply to multiple PHS Act
requirements rather than only one requirement. HHS proposes to revise
the title of subpart B by changing ``requirement'' to ``requirements''
as the term should have been plural.
4. Circumstances Requiring CMS Enforcement (45 CFR 150.203)
HHS proposes to make technical corrections to the introductory
language at 45 CFR 150.203 to reflect that this section would apply to
multiple PHS Act requirements rather than only one requirement. HHS is
not proposing further amendments because HHS would interpret and apply
the current language outlining the circumstances requiring CMS
enforcement, which generally refers to states, to situations involving
providers and facilities in the same manner in which it applies to
health insurance issuers in situations where the applicable state
authority fails to substantially enforce applicable PHS Act
requirements.
5. Sources of Information Triggering an Investigation of State
Enforcement (45 CFR 150.205)
Section 150.205(d) provides that if information regarding the
status of state enforcement of PHS Act requirements comes from state
governors and commissioners of insurance, such information may trigger
a CMS investigation of whether a state is failing to substantially
enforce these requirements. Because governors, commissioners, and other
applicable state insurance agency or entity leaders may not have
oversight or enforcement authority over providers and facilities,
information regarding state enforcement of PHS Act requirements with
respect to providers and facilities may instead come from the state
departments of health or other state agencies with that authority.
Additionally, some states have officials distinct from the
commissioners of insurance who are responsible for regulating health
maintenance organizations (HMOs). Therefore, HHS proposes to amend 45
CFR 150.205(d) to add a reference to officials responsible for
regulating HMOs, directors of public health or any other state
department, agency, or board with applicable oversight authority over
entities subject to PHS Act requirements to the list of state officials
who may be the source of information triggering an investigation.
Proposed amendments to 45 CFR 150.205(e)(2) would correct a
typographical error which incorrectly referenced in 45 CFR 148.120
instead of 45 CFR 148.210.
6. Notice to the State (45 CFR 150.211)
Under these proposed rules, in determining whether a state is
failing to substantially enforce PHS Act requirements that apply to
providers and facilities, CMS would use the processes and standards
already established with respect to state enforcement of applicable PHS
Act requirements with respect to health insurance issuers in 45 CFR
150.205 through 150.221. CMS is of the view that these processes can
largely also apply to state enforcement of the new PHS Act requirements
applicable to providers and facilities without change. However, the
current regulatory language at 45 CFR 150.211 specifies that if there
is a reasonable question regarding state enforcement, CMS will send a
notice to the governor or chief executive officer of the state, the
insurance commissioner or chief insurance regulatory official, or the
official responsible for regulating HMOs. Those individuals may not be
the appropriate recipients if there is a reasonable question regarding
state enforcement of PHS Act requirements that apply to providers or
facilities. Therefore, HHS proposes to amend 45 CFR 150.211 to add
paragraph (d) specifying that a notice of possible failure to
substantially enforce PHS Act requirements in such circumstances would
be sent to the relevant state official responsible for regulating
providers and facilities and to make conforming changes to paragraph
(b) to reflect that notices would be sent to the insurance commissioner
or chief insurance regulatory official when there is a reasonable
question regarding state enforcement of PHS Act requirements that apply
to health insurance issuers. Paragraph (c) would be retained, which
provides that such notices would be sent to the state official
responsible for regulating HMOs, if different from the official listed
in paragraph (b), when the alleged failure involves HMOs.
7. Transition to State Enforcement (45 CFR 150.221)
HHS proposes to make conforming amendments to 45 CFR 150.221(a)(2)
to provide that the discussions between CMS and state officials
regarding transition to state enforcement would include instructions to
providers and facilities, rather than instructions only to issuers. HHS
also proposes to amend 45 CFR 150.221(b) to similarly add references to
providers and facilities to make clear that CMS may also negotiate a
process to ensure that, to the extent practicable, and as permitted by
law, its records documenting compliance and other relevant areas of
CMS's enforcement operations are made available for incorporation into
the records of the applicable state authority responsible for oversight
and enforcement of providers and facilities. These proposed changes
would capture a reference to the new PHS Act requirements enacted in
the CAA applicable to providers and facilities to ensure the regulation
includes situations where a transition back to state enforcement of
applicable Federal requirements over such entities is appropriate. HHS
also proposes to replace the language about making CMS enforcement
records available to states by removing the language about
``incorporation into the records'' of the State regulatory authority
that would assume enforcement to more generally refer to making such
records available to the State regulatory authority.
8. Basis for Initiating an Investigation (45 CFR 150.303)
Currently, 45 CFR 150.303 provides that if CMS receives information
that an issuer or non-Federal governmental plan may be failing to meet
a PHS Act requirement, then an investigation may be warranted. HHS
proposes to revise 45 CFR 150.303(a) to specify that CMS may undertake
either an investigation or a market conduct examination, rather than
only an investigation, within its discretion based on this information.
This proposed revision would align 45 CFR 150.303(a) with the
regulatory text in 45 CFR 150.313(b), which provides that CMS may
initiate a market conduct examination when, based on the information
described in 45 CFR 150.303, it finds evidence that a specific entity
may be in violation of the PHS Act.
When determining whether to undertake an investigation or
examination, CMS would consider a number of different factors,
including the facts and circumstances surrounding the potential
violation, the potential
[[Page 51747]]
number of impacted consumers, an issuer or non-Federal governmental
plan's past history of substantiated complaints, the effect of the
alleged violation on a consumer, the deterrent effect that knowledge of
the investigation or examination may have on others who may consider
committing similar violations, and other considerations that CMS deems
appropriate.
HHS further proposes to revise 45 CFR 150.303(a) to add a new
sentence to clarify that CMS may review any information it deems useful
to determine if a violation of the PHS Act has occurred when
undertaking an investigation or examination. HHS proposes this change
to more clearly describe current CMS procedures, which may include a
review of applicable data and documentation, such as paid and denied
claims, summary plan documents, summary of benefits and coverage, and
notifications to enrollees, to assess whether the entity may be in
violation of the PHS Act. Additionally, HHS proposes a conforming
amendment to paragraph (a)(2) to capture a reference to reports from
providers and facilities--along with reports from state insurance
departments, the NAIC and other Federal and state agencies--as
potential sources or types of information that could lead to an
investigation or examination to ensure compliance with the applicable
PHS Act requirements.
HHS proposes to remove and replace 45 CFR 150.303(c), which
currently states that a complaint may be directed to any CMS regional
office. HHS proposes this change because the CMS regional offices no
longer process complaints. Instead, CMS offers several methods for
entities or individuals to submit complaints. These methods vary based
on the type of coverage or plan in which an individual is enrolled and
the substance of the complaint, and are described on CMS's public web
pages. For PHS Act complaints regarding non-Federal governmental plans,
consumers can email [email protected]. For complaints with respect to
issuers, consumers in states that are directly enforcing the applicable
PHS Act provision are referred to the state department of insurance;
for states in which CMS is directly enforcing PHS Act requirements,
consumers can email [email protected]. The list of current
states in which CMS is directly enforcing one or more PHS Act
provisions is available on the CMS website at https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Market-Reforms/compliance.
HHS proposes to remove the complaint provision that is currently in
45 CFR 150.303(c), and replace it with a new provision specifying that
CMS may conduct random or targeted investigations and market conduct
examinations of issuers and non-Federal governmental plans to ensure
compliance with the PHS Act. HHS is proposing this regulation to codify
another enforcement tool for CMS for situations where it is responsible
for enforcement of the Federal market reform provisions. The proposal
is also intended to codify in regulation the new statutory obligations
established under the CAA for HHS to conduct certain specified audits
and reviews. More specifically, section 2799A-1(a)(2)(A)(ii) of the PHS
Act directs HHS to conduct audits of a sample of claims data with
respect to a year (beginning with 2022) from not more than 25 group
health plans and health insurance issuers offering group or individual
health insurance coverage to verify compliance with the qualifying
payment amount requirements described in section 2799A-1 of the PHS
Act, as enacted by the No Surprises Act. HHS expects states with
primary enforcement authority with respect to section 2799A-1 of the
PHS Act will carry out enforcement activities to verify compliance with
the qualifying payment amount requirements in section 2799A-1 of the
PHS Act and 45 CFR 149.140 to the extent that the qualifying payment
amount is used to determine the ``recognized amount'' for purposes of
calculating cost sharing under section 2799A-1. As noted in 45 CFR
149.140(f), HHS intends to carry out these statutory provisions in
states in which CMS is directly enforcing using the market conduct
examination procedures described in 45 CFR 150.313, as proposed to be
amended, when conducting random and targeted audits for compliance with
the requirements for applying a qualifying payment amount.\30\
Additionally, section 203 of Title II of Division BB of the CAA amended
section 2726(a) of the PHS Act to expressly require group health plans
and health insurance issuers offering group or individual health
insurance coverage \31\ that provide both medical/surgical (M/S)
benefits and mental health or substance use disorder (MH/SUD) benefits
and that impose nonquantitative treatment limitations (NQTLs) on MH/SUD
benefits to perform, document, and make available upon request to HHS
(or the applicable state authority) comparative analyses of the design
and application of their NQTLs. PHS Act section 2726(a)(8)(B), as added
by section 203 of Title II of Division BB of the CAA further directs
HHS to request, review, and report to Congress its findings regarding
NQTL comparative analyses from group health plans and health insurance
issuers each year. In order to satisfy the newly codified statutory
obligations for HHS to conduct these specified audits and reviews under
the CAA, CMS currently intends to focus random or targeted
investigations under the new proposed 45 CFR 150.303(c) on ensuring
compliance with (i) qualifying payment amount requirements described in
section 2799A-1 of the PHS Act, which was added by the No Surprises
Act, and (ii) the NQTL comparative analysis requirements described in
section 2726(a)(8) of the PHS Act. CMS is committed to robust
enforcement of these new requirements and ensuring compliance with
other applicable PHS Act provisions. HHS is of the view that this is a
necessary and appropriate exercise of its enforcement and rulemaking
authorities under sections 2723 and 2792 of the PHS Act, respectively.
Further, HHS is of the view that having authority to conduct random or
targeted investigations or examinations for all PHS Act provisions,
including but not limited to qualifying payment amount requirements
described in section 2799A-1 of the PHS Act, which was added by the No
Surprises Act and codified in regulations at 45 CFR 149.140, and the
NQTL comparative analysis requirements described in section 2726(a)(8)
of the PHS Act, would create a more efficient and effective enforcement
program in that CMS would be able to proactively ensure consumers are
receiving the benefits to which they are entitled rather than having to
wait to receive a complaint or other information indicating a potential
PHS Act violation in situations where CMS is responsible for
enforcement. For example, an investigation or examination by CMS of one
responsible entity may identify a potential systematic error or issue
that the agency suspects may impact similarly situated entities subject
to CMS's enforcement authority. These proposed rules would provide CMS
[[Page 51748]]
with another enforcement tool to investigate whether these other
entities have experienced the same error or issue without having to
wait to receive a complaint or other information indicating a PHS Act
violation to take action.
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\30\ 86 FR 36899 and 36979 (July 13, 2021).
\31\ Pursuant to section 2723(b)(1) of the PHS Act, CMS enforces
section 2726 of the PHS Act and other applicable provisions of Title
XXVII of the PHS Act with respect to non-Federal governmental group
health plans in all states and with respect to health insurance
issuers selling products in the individual and fully insured group
markets in states that elect not to enforce or fail to substantially
enforce section 2726 of the PHS Act and other applicable provisions
of Title XXVII of the PHS Act.
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HHS also proposes a conforming amendment to the title for this
section to also capture a reference to examinations and to remove the
reference to a potential violation. This would align with the proposed
amendments to 45 CFR 150.303, as outlined in this section of the
preamble, to allow CMS to randomly select non-Federal governmental
plans and issuers for investigation and market conduct examination to
ensure compliance with applicable PHS Act requirements when CMS is
responsible for enforcement, as well as the other amendments to 45 CFR
150.303 to specify that CMS may also undertake an examination based on
information the agency receives that an issuer or non-Federal
governmental plan may be failing to meet a PHS Act requirement.
HHS seeks comment on these proposed changes.
9. Notice to Responsible Entities (45 CFR 150.307)
HHS proposes to revise several provisions in 45 CFR 150.307
regarding the notice that is sent to responsible entities when there is
a potential violation, to reflect and clarify the current CMS
enforcement procedures. The proposed revisions are further intended to
provide responsible entities additional information and clarity
regarding CMS's authority and process for conducting
investigations.\32\ Specifically, HHS proposes to replace the word
``investigation'' with ``information'' in the introductory text to
align this section with the regulatory text in 45 CFR 150.303, which
generally addresses information that may warrant an investigation or an
examination. HHS is also proposing to revise the introductory text to
clarify that the notice would also be sent to initiate investigations
of randomly selected non-Federal governmental plans and issuers under
new proposed 45 CFR 150.303(c). The proposed revision to the
introductory text also provides that CMS would also send this notice to
the responsible entity or entities in situations where information
received under 45 CFR 150.303(a) indicates a potential violation. HHS
is also proposing to remove the provision in 45 CFR 150.307(a), which
currently states that the notice describes the substance of the
complaint or other information received, and to replace it with a new
provision specifying that the notice describes the information received
under 45 CFR 150.303 that gives rise to the investigation or notifies
the responsible entity that it was selected by CMS for a random
investigation under 45 CFR 150.303(c). HHS is proposing this change to
clarify that CMS does not provide personally identifiable information
(PII) or PHI via a complaint without the complainant's express consent.
HHS also would not disclose confidential or other sensitive information
protected from disclosure that may be included in the complaint.
However, the notice would include other information sufficient to
explain the potential violation(s) and provide the responsible entity
an adequate opportunity to respond to the allegation(s), or to notify
the responsible entity of its selection for, and the PHS Act
provision(s) that are the focus of, a random investigation under new
proposed 45 CFR 150.303(c).
---------------------------------------------------------------------------
\32\ HHS is not proposing to incorporate a reference to market
conduct examinations in 45 CFR 150.307 due to the separate
regulation, 45 CFR 150.313, that addresses and details CMS's
authority and processes for conducting such examinations.
---------------------------------------------------------------------------
Consistent with current text at 45 CFR 150.307(b), CMS generally
contacts the responsible entity once it reviews the information
received under 45 CFR 150.303 and provides the responsible entity 30
days to respond with additional information, including documentation of
compliance as described in 45 CFR 150.311. CMS also directs the
responsible entity to submit any data or documentation that CMS
identifies as relevant and may use to assess whether the responsible
entity is violating applicable PHS Act provisions. However, there are
circumstances in which CMS has determined it is not appropriate to
provide the responsible entity 30 days to respond. Such circumstances
include complaints involving urgent medical issues, allegations of
fraud or abuse, and when CMS must complete the investigation within a
specified time frame under the statute. Accordingly, CMS proposes to
revise 45 CFR 150.307(b) to clarify that the notice provided under this
section would direct the responsible entity to provide any
documentation that CMS identifies as relevant to the investigation, in
addition to other documentation, such as documentation of compliance as
described in 45 CFR 150.311, that in the responsible entity's view
would aid CMS in evaluating the allegations and the entity's compliance
with the PHS Act requirements identified in the notice. HHS further
proposes to revise 45 CFR 150.307(b) such that CMS would provide the
date by which the responsible entity must respond to the notice; the
goal is to ensure the efficient administration of investigations. CMS
anticipates generally providing 14 days for response. In circumstances
that warrant a more rapid response, CMS anticipates providing at least
24 hours for response. In circumstances that warrant additional time,
such when CMS requests large amounts of data, CMS anticipates providing
more than 14 days for response. HHS is not proposing any amendments to
45 CFR 150.307(c) and therefore would retain the requirement that the
notice also inform the responsible entity that a civil money penalty
may be assessed. Lastly, under the new proposed 45 CFR 150.307(d), the
notice would also inform responsible entities that CMS may require the
responsible entity to take certain corrective actions as necessary to
bring it into compliance with the applicable PHS Act requirements. HHS
believes it is necessary and appropriate to highlight, as part of this
notice, that corrective actions may be required because, similar to the
potential for a civil money penalty to be assessed, this is another
potential outcome of an investigation.
HHS seeks comment on these proposed changes.
10. Request for Extension (45 CFR 150.309)
HHS is proposing conforming amendments to revise 45 CFR 150.309 by
removing the references to 30 days and clarifying that a responsible
entity may request an extension when it cannot prepare a response or
provide the requested information to CMS by the deadline provided in
the notice under 45 CFR 150.307, and that failure to respond by the
initial deadline provided in the notice or an extended deadline granted
by CMS may result in CMS's imposition of a civil money penalty based
upon the complaint or other information alleging or indicating a
violation of PHS Act requirements. To align with proposed amendments to
45 CFR 150.313, HHS proposes to codify examples of what CMS would
consider good cause, which include but are not limited to situations
when a responsible entity indicates it has limited staffing resources
to prepare a response, or when a responsible entity requests
clarification from CMS regarding its request for information.
11. Responses to Allegations of Noncompliance (45 CFR 150.311)
HHS proposes a conforming revision at 45 CFR 150.311(e) to add a
reference
[[Page 51749]]
to the proposed notice to initiate a market conduct examination under
new proposed 45 CFR 150.313(e), which is described in section III.C.12
of the preamble.
12. Market Conduct Examinations (45 CFR 150.313)
The proposed revisions to 45 CFR 150.313 would bring this rule in
line with standard industry practices adopted by the NAIC, which CMS
generally follows, and would also codify additional CMS procedures for
market conduct examinations. HHS also proposes several amendments to
reorganize the order and presentation of information in this regulation
to improve clarity.
First, HHS proposes to remove the last sentence in 45 CFR
150.313(b) as the proposed adoption of 45 CFR 150.313(f), which would
outline the requirements for responsible entities to provide the
requested documentation to CMS, make this sentence unnecessary. HHS
further proposes to revise 45 CFR 150.313(b) to clarify that CMS may
initiate a market conduct examination of a randomly selected non-
Federal governmental plan or issuer subject to CMS's enforcement
authority. This change would align with the proposed revision at 45 CFR
150.303(c).
Second, HHS proposes to revise 45 CFR 150.313(c) to clarify that
CMS would appoint examiners when CMS initiates a random market conduct
examination. Conforming amendments are also proposed to the opening
clause of 45 CFR 150.313(c) to replace the current reference to
``investigation'' with ``further review'' to more clearly distinguish
the authority to initiate a market conduct examination from the
authority to conduct an investigation.
HHS additionally proposes to redesignate 45 CFR 150.313(e)(1) and
(2) as 45 CFR 150.313(h)(1) and (2) and also proposes to replace the
title of the newly designated section to clarify that it pertains to a
draft market conduct examination report. HHS also proposes to revise 45
CFR 150.313(e)(1), proposed to be redesignated at 45 CFR 150.313(h)(1),
to remove the description of CMS review of the draft report and replace
it with a general statement indicating that upon completion of the
examination, CMS would compose and provide a draft report to the
responsible entity. HHS further proposes to include in redesignated 45
CFR 150.313(h)(1) a description of the contents of the draft report.
Under current CMS market conduct examination practices and as reflected
in the second sentence in proposed 45 CFR 150.313(h)(1), the draft
report would include the scope of the examination, any findings of a
PHS Act violation, and any proposed actions the entity would need to
take to correct such violation. The entity then has an opportunity to
respond to the draft report and either concur with the draft report
findings or disagree. As reflected in proposed 45 CFR 150.313(h)(2)(i),
if the responsible entity agrees with one or more of the findings in
the draft report, the entity can inform CMS of any corrective action
planned or already undertaken. If the entity disagrees with one or more
of the findings, then the entity may provide evidence to CMS to support
its disagreement. This is included in proposed 45 CFR
150.313(h)(2)(ii).
HHS further proposes to redesignate 45 CFR 150.313(e)(3), which
currently addresses CMS's reply to a response to the market conduct
examination report from the responsible entity, as a new 45 CFR
150.313(i) and revise it so it instead pertains to the final market
conduct examination report. In the new proposed introductory sentence,
HHS proposes that upon receipt of a response from the responsible
entity under new paragraph (h)(2), CMS would provide a final
examination report containing the agency's findings relevant to each
examination issue, including the agency's reply to the responsible
entity's responses to the findings in the draft report for each
examination issue. HHS also proposes to replace the current references
to issuer or non-Federal governmental plan with references to
responsible entity in the redesignated 45 CFR 150.313(i)(1) through
(4), currently codified at 45 CFR 150.313(e)(3)(i) through (iv), for
consistency in terminology. HHS also proposes to clarify CMS's review
and response to the responsible entity's corrective actions, if
applicable, in 45 CFR 150.313(i)(3) and (4). Under current CMS market
conduct examination practices and the proposed 45 CFR 150.313(i), this
report finalizes the draft report and includes the entity's concurrence
or disagreement with each cited PHS Act violation, and CMS's responses
thereto. As detailed in 45 CFR 150.313(i)(1) through (5), CMS's reply
would consist of one or more of the following: (1) Concurrence with the
responsible entity's position; (2) disagreement with the responsible
entity's position; (3) a determination that the corrective actions
implemented by the responsible entity sufficiently addressed the
identified PHS Act violation; (4) a determination that the corrective
actions implemented by the responsible entity have not sufficiently
addressed the identified PHS Act violation, and information on any
further corrective actions deemed necessary by CMS; or (5) a notice to
the responsible entity that has disagreed with a CMS finding and that
has not undertaken corrective actions that there exists a violation of
applicable PHS Act requirements and any actions the responsible entity
must take to correct such violation. These changes are designed to
align HHS regulations with industry standards for market conduct
examinations. These industry standards, promulgated by NAIC, are used
throughout the country by states and issuers and are generally followed
by CMS. The adoption in regulation of the standard industry practices
and procedures would bring uniformity to the framework CMS and the
various states use to undertake market conduct examinations.
HHS proposes to add new text at 45 CFR 150.313(e) to provide that
CMS would initiate a market conduct examination by providing written
notice to the responsible entity and to describe the substance of the
examination notice call letter CMS would send to an entity to initiate
a market conduct examination. HHS proposes that this would be a written
notice from CMS to the responsible entity and that it would include the
following information: (1) A description of the information received
under 45 CFR 150.303(a) that served as the basis for CMS's
determination that a market conduct examination was warranted or
notification that the entity was selected by CMS for a market conduct
examination under 45 CFR 150.303(c); (2) a description of the scope of
the examination; (3) the identification of the examiners; (4) a
statement that a civil money penalty may be assessed; and (5) a
statement that CMS may require a plan of corrective action. HHS is of
the view that this set of core information, which is intended to mirror
the information provided in the notice to responsible entities under 45
CFR 150.307 when CMS initiates an investigation, is the appropriate
vehicle to commence a market conduct examination and is standard
industry practice.
HHS also proposes to add 45 CFR 150.313(f) to generally describe
the documentation collection and the initial directive for the
responsible entity to submit the information that CMS identifies as
relevant for the examination, the time frame for the entity's response,
and to specify the penalties for failing to respond timely, which may
include civil money penalties. This initial directive would provide the
deadline by which responsible entities must forward the
[[Page 51750]]
requested documentation or request an extension. Any extension request
would be required to be submitted in writing, detail the reasons for
the extension request and show good cause. CMS would consider the
following circumstances a non-exhaustive list of examples of good
cause: (i) Limited staffing resources to prepare a response, or (ii)
when a responsible entity requests clarification from CMS regarding its
request for information. If CMS grants the extension, the responsible
entity would be required to respond to the documentation request within
the time frame specified in CMS's letter granting the extension
request. The new proposed language in 45 CFR 150.313(f) also specifies
that if the responsible entity fails to respond within the initial
deadline provided or within the extended time frame (if granted by
CMS), then CMS may impose a civil money penalty based on the
information provided in the complaint or other information alleging or
indicating a violation of PHS Act requirements. New proposed 45 CFR
150.313(f) would also capture the opportunity for the responsible
entity to provide additional information, including documentation of
compliance as described in 45 CFR 150.311, that the responsible entity
believes would aid CMS in conducting the examination.
HHS also proposes to add 45 CFR 150.313(g) to describe the
fieldwork CMS undertakes during a market conduct examination. Under
current CMS practices and as reflected in new proposed 45 CFR
150.313(g), during the course of the examination, CMS may request
additional information or documentation to support the review of the
entity's data or other documents to assess the responsible entity's
compliance with applicable PHS Act requirements. The request for
additional information or documentation would specify the time frame
allotted for the responsible entity to respond and forward the
requested materials. Similar to the proposed initial documentation
requests, HHS proposes to capture a similar framework that permits
responsible entities to make a written request for an extension from
CMS detailing the reason(s) for the request and showing good cause.
Examples of what CMS would consider good cause include, but are not
limited to, when a responsible entity indicates it has limited staffing
resources to prepare a response, or when a responsible entity requests
clarification from CMS regarding its request for information. If CMS
grants the extension, the responsible entity would be required to
respond to the documentation request within the time frame specified in
CMS's letter granting the extension request. As detailed in the new
proposed 45 CFR 150.313(g), the failure to respond and provide such
additional requested documentation within the initial time frame, or
within the extended time frame (if granted by CMS), may result in CMS's
imposition of a civil money penalty based upon the complaint or other
information when there is sufficient evidence indicating a violation of
applicable PHS Act requirements. This new proposed rule also states
that, during the examination, CMS may identify and notify the
responsible entity of any potential PHS Act violations and, in such
circumstances, would provide the entity an opportunity to respond and
submit evidence of its compliance or other documentation the
responsible entity believes would aid CMS in conducting the
examination.
HHS seeks comment on these proposed changes.
13. Determining the Amount of the Penalty--Mitigating Circumstances (45
CFR 150.319)
HHS proposes to make a conforming edit to 45 CFR 150.319 to add
reference to the notice to initiate a market conduct examination under
the new proposed 45 CFR 150.313(e).
14. Determining the Amount of Penalty--Aggravating Circumstances (45
CFR 150.321)
HHS proposes to amend 45 CFR 150.321 to add a new paragraph (d),
which would specify that an entity's failure to cooperate with an
investigation or market conduct examination would be considered an
aggravating circumstance for purposes of determining the aggregate
amount of a penalty. HHS is proposing this additional aggravating
circumstance based on CMS's experience conducting examinations and
investigations. More specifically, HHS has experienced situations where
responsible entities fail to respond to requests for information in a
timely fashion or otherwise generally fail to cooperate in a CMS
enforcement action. For example, in one market conduct examination, an
issuer failed to respond to CMS's requests for information for 6 months
thereby causing significant delay to the examination. HHS is of the
view that it is appropriate and necessary to add this additional
aggravating circumstance to provide CMS a vehicle to increase the
amount of a civil money penalty (up to but not in excess of the
statutory maximum) in situations when the responsible entity fails to
cooperate with a CMS investigation or market conduct examination and
there is sufficient evidence indicating a violation of an applicable
PHS Act requirement to discourage these behaviors.
HHS seeks comment on this proposed change.
15. Settlement Authority (45 CFR 150.325)
HHS proposes to make a conforming edit to 45 CFR 150.325 to add
reference to the notice to initiate a market conduct examination under
the new proposed 45 CFR 150.313(e).
16. Definitions (45 CFR 150.401)
HHS proposes to make a conforming amendment to the definition of
respondent to add a reference to a notice of proposed determination of
a civil money penalty issued under the proposed new 45 CFR 150.515.
This proposed amendment would provide for the same process for
administrative hearings regarding civil money penalties assessed
against providers and facilities as the process established for non-
Federal governmental plans and issuers in states where CMS directly
enforces PHS Act requirements.
17. Filing of Request for Hearing (45 CFR 150.405)
HHS proposes to make a conforming edit to 45 CFR 150.405(a) to add
reference to a notice of proposed determination of a civil money
penalty issued under the new proposed 45 CFR 150.515. This would
provide providers and facilities 30 days from the date of such notice
to request a hearing with an administrative law judge to appeal the
proposed determination. This would align with the existing time frame
provided to non-Federal governmental plans and issuers for such appeals
in states where CMS directly enforces PHS Act requirements.
18. Issues To Be Heard and Decided by ALJ (45 CFR 150.417)
HHS proposes to make a conforming amendment to add a reference to
proposed 45 CFR 150.513 for factors an Administrative Law Judge (ALJ)
can apply to determine the reasonableness of a civil money penalty.
This proposed amendment would provide for the same process for
administrative hearings regarding civil money penalties assessed
against providers and facilities as the process established for non-
Federal governmental plans, and issuers in states where CMS directly
enforces PHS Act requirements.
[[Page 51751]]
19. Evidence (45 CFR 150.445)
HHS proposes to make conforming amendments to 45 CFR 150.445(g),
which pertains to admissibility of evidence of acts other than those at
issue in the instant case, to add references to the proposed 45 CFR
150.513 (which describes factors and mitigating and aggravating
circumstances considered in determination of the amount of civil money
penalty assessed against a provider or facility), and proposed 45 CFR
150.505 and 150.515 (which describe notices sent by CMS to responsible
entities regarding potential violations and civil money penalties
against a provider or facility). HHS proposes to make a similar
conforming amendment to 45 CFR 150.445(j), which pertains to
admissibility of evidence of willingness and ability to enter into and
complete a corrective action plan, to add a reference to proposed 45
CFR 150.505. These proposed amendments would provide for the same
process for administrative hearings regarding civil money penalties
assessed against providers and facilities as the process established
for non-Federal governmental plans, and issuers in states where CMS
directly enforces PHS Act requirements. In addition, HHS proposes to
amend 45 CFR 150.445(h) to provide for cross-examination of witnesses,
to conform to (i) the right to cross-examination already implicit in 45
CFR 150.419, and (ii) section 1128A(c)(2) of the SSA, as required in
section 2799B-4 of the PHS Act. The right to cross-examine witnesses is
fundamental and is being explicitly included here to ensure that the
process for hearings is fair for all parties.
20. Sanctions (45 CFR 150.455)
HHS proposes to amend 45 CFR 150.455 to add the payment of an
aggrieved party's attorneys' fees and other costs as an additional
sanction for violations of 45 CFR part 149, to conform to section
1128A(c)(4) of the SSA. Section 2799B-4 of the PHS Act subjects civil
money penalties assessed under that section to the requirements in
section 1128A(c) of the SSA (with the exception of the first sentence
of section 1128A(c)(1)). Section 1128A(c)(4) of the SSA provides that
an ALJ may sanction parties and attorneys for ``failing to comply with
an order or procedure, failing to defend an action, or other misconduct
as would interfere with the speedy, orderly, or fair conduct of the
hearing.'' Subsection (g) thereof specifically provides for ordering
the party or attorney to pay attorneys' fees and other costs caused by
the failure or misconduct.
D. 45 CFR Part 150, Subpart E--CMS Enforcement With Respect to
Providers and Facilities
HHS proposes to add a new subpart E to 45 CFR part 150, to
implement the requirements of section 2799B-4 of the PHS Act. This new
subpart would specify the CMS enforcement processes with respect to the
requirements of Part E of Title XXVII of the PHS Act (and its
implementing regulations at 45 CFR part 149) that would be applicable
to providers and facilities subject to CMS's enforcement authority.
With respect to potential violations of these requirements, HHS
proposes to follow a similar investigatory process to that which
currently exists in subpart C of 45 CFR part 150, which applies to
investigations of possible violations by plans and issuers. HHS is
proposing to use that similar process to maximize efficiency. HHS
believes that the general steps of reviewing complaints or other
indications of a potential PHS Act violation, notifying responsible
parties of the investigation and directing them to provide information
and documentation for CMS to review and assess compliance, and
directing the responsible party to take corrective actions to remedy
any violations identified are prudent and appropriate to apply to
investigations of providers and facilities. HHS believes that this
proposed approach would allow CMS to effectively enforce the new
requirements and ensure that providers and facilities are sufficiently
informed of the steps in and how to comply with the investigation
process.
In contrast, HHS is proposing a different civil money penalty
process to comply with the statutory requirements of the No Surprises
Act. Section 2799B-4 of the PHS Act delineates the process for
imposition of civil money penalties if a provider or facility is found
to be in violation of Part E of Title XXVII of the PHS Act. Section
106(e) of the No Surprises Act sets forth the process for imposition of
civil money penalties if a provider of air ambulance services fails to
provide data required in section 106(a) of the No Surprises Act. In
both cases, the process must follow section 1128A of the SSA.\33\
Therefore, although many of the investigative processes applicable to
providers and facilities are the same as those applicable to plans and
issuers, HHS proposes to codify the provider and facility enforcement
procedures in new subpart E to 45 CFR part 150.
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\33\ The applicability of section 1128A of the SSA varies
depending on the applicable enforcement provision. For violations
stemming from Section 2799B-4 of the PHS Act, provisions of
subsections (c) (with the exception of the first sentence of
paragraph (1) of such subsection), (d), (e), (g), (h), (k), and (l)
apply. For violations stemming from Section 106 of the No Surprises
Act, all provisions other than subsections (a) and (b) and the first
sentence of subsection (c)(1) apply.
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21. General Rule Regarding the Imposition of Civil Money Penalties (45
CFR 150.501)
Section 2799B-4 of the PHS Act authorizes HHS to apply a civil
money penalty with respect to a provider or facility that is found to
be in violation of Part E of Title XXVII of the PHS Act. Section 106(e)
of the No Surprises Act authorizes HHS to apply a civil money penalty
with respect to a provider of air ambulance services that fails to
submit all information required under section 106(a) of the No
Surprises Act by the required date. HHS proposes to codify those
provisions in 45 CFR 150.501.
22. Basis for Initiating an Investigation; Injunctive Relief (45 CFR
150.503)
HHS proposes that CMS may conduct an investigation based on any
information that indicates a provider or facility is failing to comply
with PHS Act requirements. Proposed 45 CFR 150.503(a) would list the
same sources of information as those that CMS may consider when
investigating potential violations by plans or issuers, including
complaints (such as complaints received under the process established
in 45 CFR 149.150 with respect to plans and issuers or 45 CFR149.450
with respect to providers and facilities), reports from state insurance
departments, the NAIC, other Federal and state agencies, and any other
information that indicates potential noncompliance with PHS Act
requirements. HHS proposes to add state health and medical boards as
additional sources in 45 CFR 150.503(a), as they may be relevant
sources to indicate potential noncompliance by providers and
facilities.
HHS proposes language in 45 CFR 150.503(b) that would clarify who
may file a complaint. This would include any entity or individual, or
any entity or personal representative acting on that individual's
behalf, who believes that a right to which the aggrieved person is
entitled under PHS Act requirements is being, or has been, denied or
abridged as a result of any action or failure to act on the part of a
provider or facility. This would ensure consistency with 45 CFR
150.303(b) which provides that such individuals or entities may submit
a complaint with respect to non-Federal governmental plans and issuers.
HHS proposes in 45 CFR 150.503(c) to establish CMS's authority to
conduct
[[Page 51752]]
random or targeted investigations of providers and facilities. This
would allow CMS to proactively identify and address issues of non-
compliance, and it would generally align CMS's enforcement procedures
with respect to providers and facilities with those applicable to non-
Federal governmental plans and issuers under newly proposed 45 CFR
150.303(c), but would exclude any reference to market conduct
examinations, as these are typically used in connection with group
health plans and health insurance issuers, and not with providers.
HHS proposes to codify in 45 CFR 150.503(d) the statutory language,
located at section 1128A(k) of the SSA and included via section 2799B-4
of the PHS Act, that allows HHS to bring an action to prevent a
provider or facility from engaging in activity that would make the
provider or facility subject to a civil money penalty. HHS also
proposes that CMS may bring an action to prevent a provider or facility
from concealing, removing, encumbering, or disposing of assets that may
be required in order to pay any civil money penalty that might be
imposed or to seek other appropriate relief.
23. Notice to Responsible Entities (45 CFR 150.505)
HHS proposes to specify in 45 CFR 150.505 that if CMS receives
information that indicates a possible violation, or selects a provider
or facility for investigation, or fails to receive data required in 45
CFR 149.460, CMS would provide a written notice to the provider or
facility. The notice would describe the information that prompted the
investigation or notify the provider or facility that it was selected
for investigation. The notice would also state that a civil money
penalty may be assessed, and that CMS may require a plan of corrective
action. The notice would provide the date by which the provider or
facility must respond with additional information, including
documentation of compliance. In the case of a provider of air ambulance
services, this could include a date by which the provider of air
ambulance services would be required to submit any missing information
from the report required under 45 CFR 149.460. HHS anticipates that CMS
would generally provide 14 days for providers and facilities to respond
to the notice with the requested documentation. This would provide
sufficient time for a recipient to investigate the substance of an
allegation and respond to CMS. HHS anticipates that the documentation
or information necessary to respond to most complaints should be
readily available to a provider (for example, in the form of
computerized patient billing records, etc.). A 14-day window for
response should provide sufficient time to gather this documentation
and formulate a response. In circumstances that warrant a more rapid
response, such as complaints involving urgent medical issues or
allegations of fraud and abuse, CMS may shorten the time frame for the
provider or facility to provide the requested documentation but does
not anticipate requesting responses within less than 24 hours.
24. Request for Extension (45 CFR 150.507)
HHS proposes to provide in 45 CFR 150.507 that if a provider or
facility received a notice of possible violation from CMS, and the
provider or facility could not prepare a response by the deadline
provided in the notice under 45 CFR 150.505, such provider or facility
may make a written request for an extension. The request must detail
the reason for the extension request and must show good cause. Examples
of what CMS would consider good cause include, but are not limited to,
when a responsible entity indicates it has limited staffing resources
to prepare a response, or when a responsible entity requests
clarification from CMS regarding its request for information. If CMS
grants the extension, the provider or facility would be required to
respond within the specified time frame. Failure to respond within the
time allotted would result in CMS initiating an action to impose a
civil money penalty.
25. Responses to Notice of Potential Violations (45 CFR 150.509)
HHS proposes to provide in 45 CFR 150.509 that CMS would consider
all relevant documentation provided when determining whether to impose
a civil money penalty, including information from the complainant and
information from the provider or facility. In responding to an
allegation of noncompliance, a provider or facility may submit medical
bills; notice and consent forms signed by the participant, beneficiary,
or enrollee (or an authorized representative); proof of public
disclosure of patient protections against balance billing; or any other
evidence of compliance.
In 45 CFR 150.509(d), HHS proposes that a provider or facility may
also submit to CMS any evidence documenting the development and
implementation of internal policies and procedures to ensure compliance
with the PHS Act and section 106(a) of the No Surprises Act, as
applicable. One example would be a voluntary compliance program. A
voluntary compliance program should, at a minimum: Effectively
articulate and demonstrate the fundamental mission of compliance and
the provider or facility's commitment to the compliance process;
include the name of the individual in the organization who is
responsible for compliance; include an effective monitoring system to
identify practices that do not comply with PHS Act requirements or
section 106(a) of the No Surprises Act, as applicable, and to provide
reasonable assurance that violations are detected in a timely manner;
and address procedures to improve internal policies when noncompliant
practices are identified.
In 45 CFR 150.509(e), HHS proposes that a provider or facility may
respond to an allegation of noncompliance by submitting evidence
documenting the provider or facility's record of previous compliance
with PHS Act requirements or section 106(a) of the No Surprises Act, as
applicable. Examples of previous compliance would include copies of
signed notice and consent forms or prominently displayed disclosures of
patient protections against balance billing.
Section 106(e)(2) of the No Surprises Act provides that HHS may
waive a penalty when a provider of air ambulance services submits only
some of the data required in section 106(a) of the No Surprises Act if
the provider of air ambulance services makes a good faith effort to
submit the missing data. In 45 CFR 150.509(f), HHS proposes that such a
provider can exhibit a good faith effort by submitting and implementing
a corrective action plan that: (i) Identifies the cause underlying the
submission of incomplete data and effectively articulates and
demonstrates the measures that would be taken to submit complete data;
(ii) provides the timeline for submitting complete data; (iii) provides
the name of the individual in the organization responsible for
overseeing corrective actions and submitting complete data; and (iv)
addresses procedures to improve internal policies to ensure that
incomplete data reports are identified and completed prior to
submission for future reporting periods. HHS is of the view that these
elements would demonstrate that a provider of air ambulance services is
committed to identifying and correcting any errors that prevented it
from submitting the complete set of data required. HHS seeks comment on
this proposal.
[[Page 51753]]
26. Liability for Penalties (45 CFR 150.511)
In 45 CFR 150.511, HHS proposes to codify the provision in section
1128A(c)(1) of the SSA that provides that HHS will not commence any
action to impose a civil money penalty unless such action is commenced
within 6 years from the date when the violation occurred.
HHS also proposes that a principal is liable for penalties for the
actions of the principal's agent acting within the scope of his or her
agency, without limiting the underlying liability of the agent.
27. Amount of Penalty (45 CFR 150.513)
At 45 CFR 150.513(a)(1), HHS proposes to codify the statutory
language that permits HHS to impose a civil money penalty in an amount
not to exceed the sum of $10,000 per violation if a provider or
facility is found to be in violation of a PHS Act requirement. At 45
CFR 150.513(a)(2), HHS proposes to codify the statutory language found
in section 106(e) of the No Surprises Act that permits HHS to impose a
civil money penalty in an amount not to exceed the sum of $10,000 if a
provider of air ambulance services fails to submit required data. Such
civil money penalties would be in addition to any other penalties
prescribed or allowed by law.
HHS proposes that CMS would consider all relevant documentation
provided when determining whether to impose a civil money penalty,
including information from the complainant, provider (including a
provider of air ambulance services), or facility. In 45 CFR 150.513(b),
HHS proposes that if CMS were to determine that it would impose a civil
money penalty, there are several factors that would be considered when
determining the amount of such penalty. CMS would consider the nature
of claims of noncompliance and the circumstances under which such
claims were presented. CMS would also consider: the degree of
culpability of the provider or facility against which a civil money
penalty is proposed; the provider or facility's history of prior
violations, including whether CMS or any state previously found the
provider or facility liable for civil or administrative sanctions in
connection with a violation of PHS Act requirements or section 106(a)
of the No Surprises Act, as applicable; the frequency of the violation,
taking into consideration whether any violation is an isolated
occurrence, represents a pattern, or is widespread; and the level of
financial and other impacts on affected individuals. CMS would also
consider any other matters as justice may require.
In 45 CFR 150.513(c), HHS proposes that for every violation subject
to a civil money penalty, if there are substantial or several
mitigating circumstances, the aggregate amount of the penalty would be
set at an amount sufficiently below the statutory maximum of $10,000 to
reflect the mitigating circumstance. As guidelines for considering the
circumstances listed earlier, CMS would consider several factors as
mitigating circumstances. First, CMS would consider the provider or
facility's record of prior compliance. If, for example, the provider or
facility implemented and followed a compliance plan before receipt of
the notice of potential noncompliance, implementing and following such
compliance plan would be considered a mitigating circumstance. If the
provider or facility had no previous complaints against it for
noncompliance, that would also be considered a mitigating circumstance.
Second, CMS would consider the gravity of the violation(s). For
example, it would be considered a mitigating circumstance if the
provider or facility made adjustments to its business practices to come
into compliance with PHS Act requirements so that the provider or
facility: (i) Identified all participants, beneficiaries, and
enrollees, or all plans or issuers, that are or were wrongly billed;
(ii) withdrew the bill or reimbursed the affected individuals, or plans
or issuers, that were wrongly billed so that, to the extent
practicable, the affected individuals, plans or issuers are in the same
position that they would have been in had the violation not occurred;
and (iii) completed those adjustments to its business practices in a
timely manner. Finally, it would be considered a mitigating
circumstance if the provider or facility demonstrated that the
violation was an isolated occurrence.
HHS also proposes in 45 CFR 150.513(d) that CMS would consider
certain factors to be aggravating circumstances. HHS proposes that for
every violation subject to a civil money penalty, if there are
substantial or several aggravating circumstances, CMS may set the
aggregate amount of the penalty at an amount sufficiently close to or
at the $10,000 permitted by statute to reflect that fact. If the
frequency of violation indicates a pattern of widespread occurrence,
that would be considered an aggravating circumstance. If the
violation(s) resulted in significant financial and other impacts on the
average affected individual(s), plan or issuer, that would also be
considered an aggravating circumstance. Finally, if the provider or
facility does not provide documentation showing that substantially all
of the violations were corrected, that would be considered an
aggravating circumstance.
In 45 CFR 150.513(e), HHS proposes that if certain criteria are
met, CMS would waive a penalty. Section 2799B-4(b)(4) of the PHS Act
provides that HHS will waive a civil money penalty if the provider or
facility does not knowingly violate, and should not have reasonably
known it violated, sections 2799B-1 and 2799B-2 of the PHS Act or, in
the case of a provider of air ambulance services, section 2799B-5 of
the PHS Act, as long as the provider or facility withdraws any
erroneous bill and, if necessary, reimburses the plan or enrollee,
within 30 days of the violation in an amount equal to the difference
between the amount billed and the amount allowed to be billed, plus
interest at a rate determined by the Secretary. HHS proposes that the
interest rate be the rate established by the Treasury pursuant to 31
U.S.C. 3717. That is the rate HHS customarily uses for overpayments and
underpayments.\34\ The CAA also provides that HHS will waive a civil
money penalty in the case of a provider of air ambulance services that
submits only part of the data required in section 106(a) of the No
Surprises Act, if such provider demonstrates a good faith effort in
working with HHS to submit any missing information. HHS proposes to
codify that waiver language in 45 CFR 150.513(e)(2).
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\34\ See 42 CFR 405.378 which provides that the interest rate on
overpayments and underpayments is the higher of: (i) The rate as
fixed by the Secretary of the Treasury after taking into
consideration private consumer rates of interest prevailing on the
date of final determination as defined in paragraph (c) of this
section; or (ii) The current value of funds rate (this rate is
published annually in the Federal Register by the Secretary of the
Treasury, subject to quarterly revisions). See also 45 CFR
30.18(b)(2) which provides ``unless a different rate is prescribed
by statute, contract, or a repayment agreement, the rate of interest
charged shall be the rate established annually by the Secretary of
the Treasury pursuant to 31 U.S.C. 3717.''
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In 45 CFR 150.513(f), HHS proposes that nothing in this proposed
section limits the authority of CMS to settle any issue or case
described in the notice furnished in accordance with 45 CFR 150.505 or
to compromise on any penalty provided for in 45 CFR 150.515. This is
consistent with the settlement authority described in 45 CFR 150.325.
HHS recognizes that there may be certain circumstances in which
imposition of a civil money penalty would create a significant
financial hardship for a provider or facility. Various circumstances
may give rise to
[[Page 51754]]
financial hardship, potentially including the financial impact of
natural disasters or public health emergencies, provider disability or
death, and provider solvency concerns. The No Surprises Act allows HHS
to establish a hardship exemption to the civil money penalties that
would otherwise be imposed for a violation of Part E of Title XXVII of
the PHS Act. HHS proposes to codify the hardship exemption in 45 CFR
150.513(g). HHS seeks comments regarding this proposal, including
examples of additional circumstances that may warrant a hardship
exemption.
28. Notice of Proposed Determination (45 CFR 150.515)
Section 2799B-4(b)(1) of the PHS Act and section 106(e) of the No
Surprises Act require HHS to apply certain subsections of section 1128A
of the SSA when imposing a civil money penalty upon a provider or
facility. Specifically, section 1128A(c) of the SSA provides that HHS
may initiate an action for a civil money penalty by serving notice of
the action in any manner authorized under Rule 4 of the Federal Rules
of Civil Procedure. HHS proposes to codify that procedural requirement
in 45 CFR 150.515 and specify that such written notice would include a
description of the requirements that CMS believes the provider or
facility has violated; a description of any complaint or other
information upon which CMS based its investigation; and the amount of
the proposed penalty, including any aggravating or mitigating
circumstances described in 45 CFR 150.513 that were considered when
determining the amount of the proposed penalty.
HHS proposes that the notice of proposed determination would also
include instructions for the provider or facility to respond to the
notice, including a specific statement of the provider or facility's
right to a hearing and a statement that failure to request a hearing
within 30 days of receipt of the notice permits the imposition of the
proposed penalty without right of appeal.
29. Hearing (45 CFR 150.517)
Section 2799B-4(b)(1) of the PHS Act and section 106(e)(3) of the
No Surprises Act specify that sections 1128A(c)(2) and (c)(4) of the
SSA apply to any hearing for a violation of this part. Section
1128A(c)(2) of the SSA requires HHS to provide written notice and an
opportunity for an adverse determination to be made on the record after
a hearing at which the provider or facility is entitled to be
represented by counsel, to present witnesses, and to cross-examine
witnesses.
Section 1128A(c)(4) of the SSA allows the official conducting the
hearing to sanction a person, including any party or attorney, for
failing to comply with an order or procedure, failing to defend an
action, or other misconduct that would interfere with the speedy,
orderly, or fair conduct of the hearing. Any such sanctions must
reasonably relate to the severity and nature of the failure or
misconduct and may include: (a) In the case of refusal to provide or
permit discovery, drawing negative factual inferences or treating such
refusal as an admission by deeming the matter, or certain facts, to be
established; (b) prohibiting a party from introducing certain evidence
or otherwise supporting a particular claim or defense; (c) striking
pleadings, in whole or in part; (d) staying the proceedings; (e)
dismissal of the action; (f) entering a default judgment; (g) ordering
the party or attorney to pay attorneys' fees and other costs caused by
the failure or misconduct; and (h) refusing to consider any motion or
other action which is not filed in a timely manner.
Most of these requirements regarding hearings, insofar as they
apply to hearings conducted under 45 CFR part 150, subpart E, are
codified in various sections of 45 CFR part 150, subpart D; and in
these proposed rules HHS is additionally proposing amendments to 45 CFR
150.401, 150.405, 150.417, 150.445, and 150.455 to conform to these
requirements. Therefore, HHS proposes in 45 CFR 150.517 to specify that
the provisions in 45 CFR 150.401 through 150.457 apply to a hearing
conducted under 45 CFR part 150, subpart E.
HHS proposes in 45 CFR 150.517(b) that if CMS finds a provider or
facility to be in violation of a requirement of Part E of Title XXVII
of the PHS Act, or section 106(a) of the No Surprises Act, such
provider or facility has a right to a hearing pursuant to section
1128A(c)(2) of the SSA. HHS proposes that the provider or facility
would be required to file a request for hearing within 30 days after
the date of receipt of CMS's notice of proposed determination, to
facilitate a timely resolution of the matter.
HHS proposes in 45 CFR 150.517(c) that, consistent with 45 CFR
150.347 as it applies to non-Federal governmental plans and issuers, if
the provider or facility fails to request a hearing within the 30 days,
any penalty would become final.
30. Failure To Request a Hearing (45 CFR 150.519)
HHS proposes in 45 CFR 150.519 that if the provider or facility
does not request a hearing within 30 days of the issuance of the notice
of proposed determination, or show good cause, as determined under 45
CFR 150.405(b) for failing to exercise its right to a hearing, the
determination becomes final, and CMS would notify the provider or
facility of this fact, and the final civil money penalty may be
assessed by CMS. CMS would notify the provider or facility in any
manner authorized by Rule 4 of the Federal Rules of Civil Procedure of
the means by which the provider or facility may satisfy the judgment.
HHS further proposes that the provider or facility would have no right
to appeal a penalty with respect to which it has not requested a
hearing in accordance with 45 CFR 150.405. This aligns with CMS's
enforcement procedures when an issuer or non-Federal governmental plan
fails to request a hearing.
31. Collateral Estoppel (45 CFR 150.521)
Section 1128A(c)(3) of the SSA states that a provider or facility
that requests a hearing under this part may not deny the essential
elements of a criminal offense if that provider or facility has been
convicted of a Federal crime charging fraud or false statements
(whether upon a verdict after trial or upon a plea of guilty or nolo
contendere) and the hearing under this part involves the same
transaction as the criminal action. HHS proposes to codify that
statutory language in 45 CFR 150.521.
32. Judicial Review (45 CFR 150.523)
HHS proposes in 45 CFR 150.523 that any responsible provider or
facility against which a final decision imposing a civil money penalty
is entered pursuant to this subpart may obtain review in the United
States Court of Appeals for the circuit in which the person resides, or
where the violation occurred, by filing in such court (within 60 days
following the date on which such decision becomes final) a written
petition requesting the decision be modified or set aside. Such review
would be conducted pursuant to section 1128A of the SSA. A copy of the
petition would be transmitted by the clerk of the court to CMS, and
thereupon CMS would file in the Court the record in the proceeding as
provided in 28 U.S.C. 2112.
[[Page 51755]]
33. Notice to Other Agencies (45 CFR 150.525)
At 45 CFR 150.525, HHS proposes that whenever a penalty becomes
final, CMS would notify certain organizations and entities about such
action and the reasons for it, as appropriate. Section 150.525 lists
the organizations or entities that section 1128A(h) of the SSA requires
to be notified if a penalty was imposed against a provider or facility:
The state or local medical or professional association, the state
Department of Health, the appropriate state or local licensing agency
or organization, and the appropriate utilization and quality control
peer review organization. HHS proposes that CMS may additionally notify
the following agencies by providing the final penalty notice, as
appropriate: The state Department of Insurance or similar agency, the
state Attorney General, the DOL, the Department of the Treasury, or OPM
by sharing the final penalty notice. HHS seeks comment on any other
organizations or entities that should be notified if a provider or
facility is penalized for a violation of the PHS Act or a violation of
section 106(a) of the No Surprises Act.
IV. Provisions of the Proposed Rules on Reporting Requirements
Regarding Air Ambulance Services--Office of Personnel Management
OPM proposes requirements related to data collection from FEHB
carriers with respect to air ambulance services provided to covered
individuals in an FEHB plan in the same manner as such provisions apply
to a group health plan or health insurance issuer offering group or
individual health insurance coverage. The OPM rules would clarify that
FEHB carriers are both authorized and required by OPM to report
information on air ambulance claims data to HHS in accordance with the
requirements of 45 CFR 149.230. OPM would coordinate with HHS to
receive FEHB air ambulance data. This data would be used by both HHS in
its report to Congress and by OPM in its oversight of the FEHB Program.
Under 5 U.S.C. 8902(p), FEHB carriers must comply with requirements
described in section 9817 of the Code, section 717 of ERISA, and
section 2799A-2 of the PHS Act in the same manner as those provisions
apply to group health plans and health insurance issuers offering group
or individual health insurance coverage. Similarly, 5. U.S.C. 8902(p)
applies balance billing protections described in section 2799B-5 of the
PHS Act to enrollees in an FEHB plan in the same manner as those
provisions apply to enrollees in a group health plan or coverage
offered by an issuer. Despite these parallel provisions, 5 U.S.C.
8902(p) does not reference the reporting requirements found in section
9823 of the Code, section 723 of ERISA, and section 2799A-8 of the PHS
Act.
Under 5 U.S.C. 8910(a), OPM must make a continuing study of the
operation and administration of the FEHB Program, including reports on
FEHB plans' experience. Under 5 U.S.C. 8910(b), each contract between
OPM and FEHB carriers must contain provisions requiring carriers to
furnish such reasonable reports as OPM deems necessary to carry out its
functions under the FEHB Act. Accordingly, OPM's contract with each
FEHB carrier requires the carrier to furnish reports that OPM finds
necessary to properly administer the FEHB Program.\35\ In addition, 5
U.S.C. 8910(c) requires government agencies to furnish OPM with such
information and reports as may be necessary to enable OPM to administer
the FEHB Program.
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\35\ In addition to this statutory authority and parallel
contract language, FEHB carrier contracts incorporate FEHB
regulations found at 5 CFR parts 890 through 894. As part of this
proposed rulemaking, OPM proposes to amend FEHB regulations to
direct carriers to comply with requirements of 45 CFR 149.230.
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Enactment of 5 U.S.C. 8902(p) extends new surprise billing
protections with respect to air ambulance services to FEHB plan
enrollees and their covered family members. OPM has determined that in
order to effectively carry out its functions under 5 U.S.C. 8902(p),
including the underlying goals of increased transparency and lowered
costs for FEHB covered individuals, carriers must furnish to HHS air
ambulance data as provided for in this proposed rule.
FEHB covered individuals utilize air ambulance services not only
domestically but also to transport Federal civilian personnel back to
the United States from service performed overseas, in the case of
medical emergencies. OPM currently lacks comprehensive information with
respect to air ambulance services and claims, and this data could prove
important to OPM as it negotiates benefits and rates with carriers
pursuant to 5 U.S.C. 8902 as well as relative to its general
administration and oversight of the FEHB Program.
OPM maintains authority to study the experience of plans and to
require carriers to furnish reports that OPM determines necessary
pursuant to 5 U.S.C. 8910, and this may include reports that OPM
authorizes as necessary to be submitted to HHS where OPM deems those
reports important in support of the FEHB mission. Further, 5 U.S.C.
8910(c) authorizes HHS to share data with OPM that is necessary for
OPM's study and oversight of the FEHB Program. For these reasons, OPM
proposes to authorize and require FEHB carriers to submit air ambulance
data to HHS. OPM would coordinate with HHS to receive FEHB air
ambulance services data for its administrative and oversight functions
of the FEHB Program under 5 U.S.C. 8910. OPM would enforce carrier
compliance with reporting requirements to HHS with respect to FEHB
plans. OPM would enforce compliance through its contracts with the
carriers.
OPM understands the need to ensure stakeholder and consumer privacy
when data is shared with OPM. HHS has taken steps to ensure that
claims-level data elements would be limited. OPM would collect and
store any data it receives through IT systems that meet all security
protocols established by OPM. When using these data, OPM would de-
identify and aggregate data to protect the confidentiality of
proprietary and personal information.
OPM requests comment on its proposal to require air ambulance
services claims data to be reported by FEHB carriers to HHS and for HHS
to share this data with OPM.
V. Collection of Information Requirements--The Department of Health and
Human Services
Under the Paperwork Reduction Act of 1995 (PRA), the Departments
are required to provide 60-day notice in the Federal Register and
solicit public comment before a collection of information requirement
is submitted to the Office of Management and Budget (OMB) for review
and approval. These proposed rules contain information collection
requirements (ICRs) that are subject to review by OMB. A description of
these provisions is given in the following paragraphs with an estimate
of the annual burden, summarized in Table 7. To fairly evaluate whether
an information collection should be approved by OMB, section
3506(c)(2)(A) of the PRA requires that the Departments seek comment on
the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of the agencies.
The accuracy of the Departments' 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
[[Page 51756]]
affected public, including automated collection techniques.
The Departments are soliciting public comment on each of the
required issues under section 3506(c)(2)(A) of the PRA for the
following information collection requirements.
A. Wage Estimates
To derive wage estimates, HHS 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.\36\ Table 1 in these proposed rules
presents the mean hourly wage, the cost of fringe benefits and
overhead, and the adjusted hourly wage.
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\36\ 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.
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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 HHS
is of the view that doubling the hourly wage to estimate total cost is
a reasonably accurate estimation method.
Table 1--Wage Estimates
----------------------------------------------------------------------------------------------------------------
Fringe benefits Adjusted
Occupation title Occupational Mean hourly and overhead ($/ hourly wage
code wage ($/hr.) hr.) ($/hr.)
----------------------------------------------------------------------------------------------------------------
Computer and Information Systems Managers..... 11-3021 $77.76 $77.76 $155.52
Computer Programmers.......................... 15-1251 45.98 45.98 91.96
Secretaries and Administrative Assistants, 43-6014 19.43 19.43 38.86
Except Legal, Medical, and Executive.........
Business Operations Specialist................ 13-1198 40.53 40.53 81.06
Database Administrator........................ 15-1245 48.60 48.60 97.20
Lawyer........................................ 23-1011 71.59 71.59 143.18
Insurance Sales Agents........................ 41-3021 33.22 33.22 66.44
----------------------------------------------------------------------------------------------------------------
B. ICRs Regarding Disclosure of Agent and Broker Compensation to
Individuals in Individual Health Insurance Coverage and Short-Term,
Limited-Duration Insurance (45 CFR 148.410(c)(2)(i) and (ii) and (c)(3)
and (4))
As discussed in section III.B of the preamble of these proposed
rules, section 2746 of the PHS Act, as added by section 202(c) of Title
II of Division BB of the CAA, requires health insurance issuers
offering individual health insurance coverage or short-term, limited-
duration insurance to make disclosures to enrollees regarding direct
and indirect compensation provided by the issuer to an agent or broker
associated with enrolling individuals in such coverage, prior to when
the individual finalizes their plan selection, as well as on any
documentation confirming the individual's enrollment, including
enrollment documentation required in applicable state or Federal law or
an initial enrollment package. At new proposed 45 CFR 148.410(c), HHS
proposes to codify these disclosure requirements.
HHS assumes that the compensation information to be provided to
potential policyholders prior to finalizing enrollment would be
provided by agents and brokers on behalf of issuers. As discussed in
section III.B of the preamble of these proposed rules, HHS anticipates
the required information would be provided in the form of a commission
schedule, a similar document satisfying the requirements of 45 CFR
148.410(c)(5), or a supplemental document detailing additional
compensation not on the commission schedule, detailing the compensation
structure of agents and brokers who assist consumers in enrolling in
and purchasing individual health insurance coverage or short-term,
limited-duration insurance. HHS anticipates that the burden associated
with the disclosure requirement, prior to implementation, would include
review by a lawyer. HHS assumes that a lawyer for each issuer would
need 2 hours (at an hourly rate of $143.18) to review the regulation,
and prepare instructions for issuers to relay to individual agents and
brokers to implement the disclosure requirements. The burden for each
issuer would be 2 hours, with an equivalent cost of approximately $286.
There are an estimated 1,298 issuers in the individual market \37\ and
26 issuers of short-term, limited-duration insurance coverage,\38\ for
a total of 1,324 issuers. Therefore, the total annual burden to all
issuers to implement the disclosure requirement would be 2,648 hours
with an equivalent cost of approximately $379,141. The review of the
statute, regulation, and issuer's implementation plan would likely
occur annually to ensure compliance with any potential changes to the
regulation. HHS assumes that each agent or broker would need 30 minutes
(at an hourly rate of $66.44) annually to review the requirements and
the instructions from issuers. The total burden for each agent or
broker would be 0.5 hours with an equivalent cost of approximately $33.
As of June 10, 2021, there were 55,541 agents or brokers working with
issuers and each agent or broker had approximately two appointment
arrangements which are mandated by state law and govern the
compensation provided to agents and brokers for assisting
consumers.\39\ Therefore, the total burden for all agents and brokers,
to review instructions from the issuers with which they have
appointment arrangements, would be 27,770.5 hours, with an equivalent
cost of approximately $1,845,072.
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\37\ Based on data from medical loss ratio (MLR) annual report
for the 2019 MLR reporting year, available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.
\38\ National Association of Insurance Commissioners, 2019
Accident and Health Policy Experience Report. https://content.naic.org/sites/default/files/publication-ahp-lr-accident-health-report.pdf.
\39\ Based on information found in the National Insurance
Producer Registry's Producer Database (PDB).
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HHS estimates the cost associated with this disclosure requirement,
when provided in situations related to in-person enrollment in
coverage, to be limited to only printing and material costs. HHS
estimates that each commission schedule would be, on average, 4 pages
in length, at a cost of $0.05 per page, for a total of $0.20 per
provided schedule. Printing of supplemental documentation disclosing
compensation not included on the commission schedule would be, on
[[Page 51757]]
average, 2 pages in length, at a cost of $0.05 per page, for a total of
$0.10 per provided supplemental document. HHS assumes, based on
experience with the regulation of insurance agents and brokers
operating on the Federally-facilitated Exchanges and State-based
Exchanges on the Federal Platform, that for most consumers, the
information would be provided electronically or orally at minimal cost.
HHS assumes that each agent or broker would provide, on average, ten
commission schedules and ten supplemental documents in print to
consumers annually from each arrangement, for a total of 20 commission
schedules and 20 supplemental documents provided in print. Each agent
or broker would incur an annual printing cost of approximately $6. For
all agents and brokers, HHS estimates that a total of 1,110,820 printed
commission schedules and 1,110,820 printed supplemental documents would
be provided to consumers, for a total printing cost of $333,246
annually. HHS assumes that agents and brokers would be compensated by
issuers for the printing costs associated with providing the
compensation schedules and supplemental documents to consumers.
Therefore, HHS estimates that each issuer, on average, would incur
printing costs of approximately $252 annually, starting in 2022. The
total costs to all issuers for disclosures provided prior to
enrollment, including printing costs, would be approximately $712,387.
Table 2--Proposed Annual Ongoing Costs Regarding Disclosure of Agent and Broker Compensation to Enrollees Prior to Enrollment
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Estimated Estimated Estimated
Respondent number of number of burden labor costs Estimated Estimated
respondents responses (hours) ($) printing costs total cost ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Issuer.................................................. 1,324 1,110,820 2,648 $379,141 $333,246 $712,387
Agents and Brokers...................................... 55,541 55,541 27,771.5 1,845,072 0 1,845,072
--------------------------------------------------------------------------------------------------------------------------------------------------------
Issuers would also be required to provide an agent or broker
compensation disclosure to individuals on documentation confirming
enrollment, including enrollment documentation required by applicable
state or Federal law or an initial enrollment package. HHS assumes that
the disclosure and supplemental documentation disclosing compensation
not included on the commission schedule provided along with
documentation confirming enrollment would be available to all enrollees
in the same coverage, in the same household, via the policyholder
receiving the disclosure information and informing all enrollees on the
plan. There are an estimated 1,298 issuers in the individual market
providing approximately 8,639,866 enrollment confirmations annually,
and 26 issuers of short-term, limited-duration insurance providing
approximately 121,038 enrollment confirmations annually. HHS assumes
that 50 percent of policyholders with individual health insurance
coverage \40\ and all policyholders with short-term, limited-duration
insurance are assisted by agents or brokers.
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\40\ Agents and brokers accounted for 47.8 percent of all
consumers enrolled during the plan year 2020 open enrollment period.
Source: CMS, Agents and Brokers in the Marketplace. https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/Agents-and-Brokers-in-the-Marketplace.pdf.
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In the individual market, 1,298 issuers would be required to
provide commission schedules or similar documentation, and supplemental
documentation detailing the structure for compensation not captured on
the commission schedule, along with approximately 4,319,933 enrollment
confirmations, 3,328 on average per issuer. HHS estimates that
approximately 66 percent of commission schedules and supplemental
documents (2,851,156 disclosures) would be mailed to individuals (34
percent sent electronically) \41\ in conjunction with any documents
confirming enrollment or renewal notice with no additional mailing
costs. Therefore, each issuer would provide approximately 2,197
commission schedules or similar documentation, as well as the
supplemental documents by mail annually. HHS assumes that for each
issuer, an administrative assistant would need 5 minutes (at an hourly
rate of $38.86) to print and enclose a commission schedule or similar
documentation, as well as the supplemental document, with the
enrollment confirmation or renewal notice, for a cost of $3.24 per
commission schedule or similar documentation, and the supplemental
documentation. The total burden for each issuer would be approximately
183 hours, with an equivalent cost of approximately $7,113 annually.
For all issuers, the total annual burden would be 237,596 hours with an
equivalent cost of approximately $9,232,993. Assuming that the cost of
printing each commission schedule or similar documentation would be
$0.20, and the cost of printing each supplemental document would be
$0.10, the average cost of printing for each issuer would be
approximately $659 annually and the total cost of printing for all
issuers would be approximately $855,347. The total annual cost for all
issuers, including printing costs, would be $10,088,340.
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\41\ 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.
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For short-term, limited-duration insurance, 26 issuers would be
required to provide commission schedules or similar documentation, as
well as supplemental documentation detailing the structure for
compensation not captured on the commission schedule, along with
approximately 121,038 enrollment confirmations, 4,655 on average per
issuer. HHS estimates that approximately 66 percent of commission
schedules or similar documentation, and supplemental documents (79,885
disclosures) would be mailed to individuals in conjunction with any
documents confirming enrollment or renewal notice with no additional
mailing costs. Therefore, each issuer would provide approximately 3,073
commission schedules or similar documentation, and supplemental
documentation, by mail annually. HHS assumes that for each issuer, an
administrative assistant would need 5 minutes (at an hourly rate of
$38.86) to print and enclose a commission schedule or similar
documentation, and the supplemental documentation, with the enrollment
confirmation or renewal notice, for a cost of $3.24 per disclosure. The
total burden for each issuer would be approximately 256 hours, with an
equivalent cost of approximately $9,950
[[Page 51758]]
annually. For all issuers, the total annual burden would be 6,657 hours
with an equivalent cost of approximately $258,695. Assuming that the
cost of printing each commission schedule or similar documentation
would be $0.20, and the cost of printing each supplemental document
would be $0.10, the average cost of printing for each issuer would be
approximately $35 annually and the total printing cost for all issuers
would be $922. The total annual cost for all issuers, including
printing costs would be $259,616.
For issuers of individual health insurance coverage or issuers of
short-term, limited-duration insurance, the total combined burden for
providing disclosures and supplemental documents with enrollment
materials would be 244,253 hours, with an equivalent cost of
$9,491,687. The total annual printing cost would be $856,268, with an
overall annual total cost of $10,347,956. CMS is seeking an OMB control
number and approval for the proposed information collection (OMB
control number: 0938-NEW (Agent and Broker Disclosure and Reporting
Requirements (CMS-10787)).
Table 3--Proposed Annual Ongoing Costs Related to Agent and Broker Compensation Disclosure Provided With Enrollment Materials
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Estimated
Type of coverage number of number of Total burden Estimated Estimated Estimated
respondents responses (hours) labor cost printing cost total cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Individual health insurance coverage.................... 1,298 4,319,933 237,596 $9,232,993 $855,347 $10,088,340
Short-term, limited-duration insurance.................. 26 121,038 6,657 258,695 922 259,616
-----------------------------------------------------------------------------------------------
Total............................................... 1,324 4,440,971 244,253 9,491,687 856,268 10,347,956
--------------------------------------------------------------------------------------------------------------------------------------------------------
C. ICRs Regarding Issuer Requirements for Agent and Broker Compensation
Reporting to the Secretary of HHS (45 CFR 148.410(d))
As discussed in section III.B of the preamble, section 2746 of the
PHS Act, as added by section 202(c) of Title II of Division BB of the
CAA, requires health insurance issuers offering individual health
insurance coverage or short-term, limited-duration insurance to submit
reports to HHS regarding direct and indirect compensation provided by
the issuer to an agent or broker associated with enrolling individuals
in such coverage. HHS is proposing to codify these reporting
requirements in new proposed 45 CFR 148.410(d).
HHS estimates that each issuer would incur an annual ongoing burden
and cost to submit the required information annually to HHS, starting
in 2023 (reporting for calendar year 2022 would be due by July 31,
2023). HHS acknowledges that the burden associated with this reporting
requirement would vary depending on the size of the issuer. HHS
estimates that for each issuer, on average, an administrative assistant
would need 10 hours (at an hourly rate of $38.86) and a database
administrator would need 40 hours (at an hourly rate of $97.20) to
collect and submit the required information, as described in section
III.B of the preamble, electronically. HHS estimates that each issuer
would incur an annual ongoing burden of 50 hours, with an associated
equivalent cost of $4,277. For all 1,324 issuers, HHS estimates a total
annual ongoing burden of 66,200 hours and an associated total annual
cost of $5,662,218. HHS believes the burden and costs would decrease in
subsequent years as issuers become more adept at extracting the data
from their systems and submitting it to HHS. CMS is seeking an OMB
control number and approval for the proposed information collection
(OMB control number: 0938-NEW (Agent and Broker Disclosure and
Reporting Requirements (CMS-10787)).
Table 4--Proposed Annual Ongoing Costs Regarding Issuer Reporting of Agent and Broker Compensation to HHS
----------------------------------------------------------------------------------------------------------------
Total estimated
Estimated number of Estimated number of Burden per response annual burden Total estimated
respondents responses (hours) (hours) labor cost
----------------------------------------------------------------------------------------------------------------
1,324 1,324 50 66,200 $5,662,218
----------------------------------------------------------------------------------------------------------------
D. ICRs Regarding Air Ambulance Reporting Requirements for Group Health
Plans and Health Insurance Issuers (45 CFR 149.230)
As discussed in section II.E of the preamble, section 106(b) of the
No Surprises Act added parallel provisions at section 9823 of the Code,
section 723 of ERISA, and section 2799A-8 of the PHS Act, requiring
plans and issuers to submit certain data related to air ambulance
services for dates of service falling within a calendar year and data
on claims paid within the calendar year. In this proposed rule, OPM
also proposes to direct FEHB carriers to comply with requirements of 45
CFR 149.230 with respect to an FEHB plan in the same manner as such
provisions apply to a group health plan or health insurance issuer
offering group or individual health insurance coverage. The proposed
time and manner of the reporting are set forth in 45 CFR 149.230(a) of
these proposed rules, and 45 CFR 149.230(b) includes a list of the data
elements the Departments propose to collect on air ambulance services
from plans, issuers, and FEHB carriers. The Departments and OPM assume
that TPAs generally would incur the burden to submit the data on behalf
of self-insured plans and the associated costs would likely be passed
on to those plans. The Departments and OPM acknowledge that some large
self-insured plans may seek to make needed IT changes and report the
required information to HHS without the use or assistance of a TPA or
other third-party entity. In those instances, the self-insured plan
would directly incur the burden and cost to meet the requirements of
these proposed rules. The Departments and OPM are unable to determine
how many self-insured plans may choose to develop their IT system and
report the required
[[Page 51759]]
information to HHS and seek comment as to the number of plans that may
choose to do so.
Issuers, FEHB carriers, and TPAs (and any self-insured plans that
choose not to use a TPA or third-party entity to make the appropriate
IT and system changes) would incur burdens to make IT changes to
collect, consolidate, and report the required information, in the
required format, to HHS. The Departments and OPM assume this one-time
cost would be incurred in 2022. The Departments and OPM estimate that
473 issuers, 46 FEHB carriers, and 205 TPAs would be subject to the
requirements in these proposed rules. The Departments and OPM estimate
that for each issuer, FEHB carrier, or TPA to make the appropriate IT
changes and submit the required data, it would take a computer and
systems information manager 8 hours (at an hourly rate of $155.52) to
design and direct the work required for the updates, and a computer
programmer 40 hours (at an hourly rate of $91.96) to collaborate with
the manager to design and implement system changes. The Departments and
OPM estimate each issuer, FEHB carrier, or TPA would incur a one-time
burden of 48 hours, with an equivalent cost of $4,923. For all issuers,
FEHB carriers, and TPAs to meet the proposed reporting requirements,
the Departments and OPM estimate a total one-time burden of 34,752
hours, with an equivalent cost of $3,563,933, to be incurred in 2022.
Once the process for collecting and formatting the required data is
established, the Departments and OPM assume that the resources needed
to submit the required information for the 2022 and 2023 plan years (to
be submitted by March 31, 2023 and March 30, 2024, respectively) would
be limited. The Departments estimate that each issuer, FEHB carrier, or
TPA would require a computer and systems information manager 4 hours
(at an hourly rate of $155.52) to oversee the compilation of the data,
a computer programmer 4 hours (at an hourly rate of $91.96) to extract
the required data and provide it in the required reporting format, and
an administrative secretary 4 hours (at an hourly rate of $38.86) to
assemble the documents and submit them to HHS. The Departments and OPM
estimate that each issuer, FEHB carrier, or TPA would incur an annual
burden of 12 hours, with an equivalent cost of $1,145. For all issuers,
FEHB carriers, and TPAs, the Departments and OPM estimate an annual
burden of 8,688 hours, with an equivalent cost of approximately
$829,241, to be incurred in 2023 and 2024.
The total annual burden for all issuers, FEHB carriers, and TPAs to
make the appropriate IT and system changes would be approximately
34,752 hours, at a total cost of approximately $3,563,933 to be
incurred in 2022. Issuers, FEHB carriers, and TPAs would also incur an
annual burden, in 2023 and 2024, of 8,688 hours and a total cost of
approximately $829,241 to submit the data to HHS. The total annual
burden for all respondents is likely overestimated because the estimate
does not reflect process efficiencies for FEHB carriers that are also
issuers. As HHS, DOL, the Department of the Treasury, and OPM share
jurisdiction, HHS will account for 45 percent of the burden, or
approximately 15,638 hours in 2022 with an equivalent cost of
$1,603,770 and an annual burden of approximately 3,910 hours in 2023
and 2024, with an equivalent cost of $373,158. CMS is seeking an OMB
control number and approval for the proposed information collection
(OMB control number: 0938-NEW (Reporting Requirements Regarding Air
Ambulance Services (CMS-10785)). DOL, the Department of the Treasury,
and OPM will submit their burden estimates upon approval.
Table 5--Proposed One-Time and Annual Burden and Costs for Issuers and TPAs Related to Air Ambulance Data
Reporting Requirements
----------------------------------------------------------------------------------------------------------------
Total
Estimated Estimated Burden per estimated Total
Year number of number of response annual burden estimated
respondents responses (hours) (hours) labor cost ($)
----------------------------------------------------------------------------------------------------------------
2022............................ 326 326 48 15,638 $1,603,770.05
2023............................ 326 326 12 3,910 373,158.29
2024............................ 326 326 12 3,910 373,158.29
-------------------------------------------------------------------------------
Three-year average.......... 326 326 24 7,819 783,362
----------------------------------------------------------------------------------------------------------------
E. ICRs Regarding Air Ambulance Reporting Requirements for Providers of
Air Ambulance Services (45 CFR 149.460)
As described in section II.F of the preamble, section 106(a) of the
No Surprises Act requires providers of air ambulance services to submit
cost and organizational data as well as other transport-level data
related to air ambulance services. In 45 CFR 149.460(a) of these
proposed rules, HHS sets forth the proposed time and manner of
reporting, and in 45 CFR 149.460(b), HHS lists the data elements HHS
proposes to collect on air ambulance services from providers of air
ambulance services. HHS estimates the burden associated with the data
reporting required at 45 CFR 149.460 to be the time and effort
necessary for providers of air ambulance services to submit the
required data elements, in the required format, to HHS.
HHS anticipates a one-time cost for providers of air ambulance
services to make IT changes to collect, consolidate, and report the
required information, in the required format, to HHS. This one-time
cost would be incurred in 2022. HHS estimates that 75 providers of air
ambulance services \42\ would be subject to the requirements in these
proposed rules. HHS estimates that for each provider to make the
appropriate IT changes and submit the required data, it would require a
computer and systems information manager 80 hours (at an hourly rate of
$155.52) to design and direct the work required for the updates, a
computer programmer 240 hours (at an hourly rate of $91.96) to
collaborate with the manager to design and implement system changes,
and a business operations specialist 80 hours (at an hourly rate of
$81.06) to provide input regarding the data content for the reports.
HHS estimates each provider of air ambulance services would incur a
one-time burden of 400 hours, with an equivalent cost of $40,997. For
all providers of air ambulance services to
[[Page 51760]]
meet the proposed reporting requirements, HHS estimates a total one-
time burden of 30,000 hours, with an equivalent cost of $3,074,760.
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\42\ Fact Sheet--FAA Initiatives to Improve Helicopter Air
Ambulance Safety. (February 20, 2014). Retrieved from https://www.faa.gov/news/fact_sheets/news_story.cfm?newsId=15794.
---------------------------------------------------------------------------
Once the process for collecting and formatting the required data is
established, HHS assumes that the resources required to submit the
required information to HHS for the 2022 and 2023 plan years (to be
submitted by March 31, 2023 and March 30, 2024, respectively) would be
limited. HHS estimates that each provider of air ambulance services
would require a computer and systems information manager 4 hours (at an
hourly rate of $155.52) to oversee the compilation of the data, a
computer programmer 4 hours (at an hourly rate of $91.96) to extract
the required data and provide it in the required reporting format, a
business operations specialist 8 hours (at an hourly rate of $81.06) to
review the data reports, and an administrative secretary 4 hours (at an
hourly rate of $38.86) to assist in the assembly of documents and
submit them to HHS. HHS estimates that each provider of air ambulance
services would incur an annual burden of 20 hours, with an equivalent
cost of $1,794. For all providers of air ambulance services, HHS
estimates an annual burden of 1,500 hours, with an equivalent cost of
$134,538 in 2023 and 2024.
The total one-time burden and costs, to be incurred in 2022, for
all providers of air ambulance services to make the appropriate IT and
system changes would be approximately 30,000 hours and a total cost of
approximately $3,074,760. Providers of air ambulance services would
also incur an annual burden and cost to submit the data to HHS, for
2023 and 2024, of 1,500 hours and $134,538. CMS is seeking an OMB
control number and approval for the proposed information collection
(OMB control number: 0938-NEW (Reporting Requirements Regarding Air
Ambulance Services (CMS-10785)).
Table 6--Proposed One-Time and Annual Burden and Costs Related to Air Ambulance Data Reporting Requirements for
Providers of Air Ambulance Services
----------------------------------------------------------------------------------------------------------------
Estimated Burden per
Year number of Number of response Total annual Total cost
respondents responses (hours) burden (hours)
----------------------------------------------------------------------------------------------------------------
2022............................ 75 75 400 30,000 $3,074,760
2023............................ 75 75 20 1,500 134,538
2024............................ 75 75 20 1,500 134,538
-------------------------------------------------------------------------------
Three-Year Average.......... 75 75 147 11,000 1,114,612
----------------------------------------------------------------------------------------------------------------
F. ICRs Regarding CMS Enforcement of Group and Individual Insurance
Market and Provider and Facility Requirements (45 CFR 150.303, 150.311,
150.313, 150.509, 150.517, and 150.525)
The process by which CMS investigates allegations of non-compliance
against issuers and non-Federal governmental plans is detailed in 45
CFR 150.301 through 150.347. Sections 2799A-1(a)(2)(A)(ii) and 2726(a)
of the PHS Act, as amended by the CAA, require CMS to conduct certain
targeted audits. Therefore, HHS proposed amendments to 45 CFR
150.303(c) to authorize random and targeted investigation and market
conduct examinations.
Section 2723(b) of the PHS Act, as amended by the CAA, authorizes
the Secretary of HHS to impose civil money penalties as a means of
enforcing the individual and group insurance market requirements
contained in Part A and Part D of Title XXVII of the PHS Act with
respect to health insurance issuers when a state does not have
authority to enforce or fails to substantially enforce these provisions
and with respect to group health plans that are non-Federal
governmental plans in all states. Section 2799B-4 of the PHS Act, as
added by section 104 of the No Surprises Act, adopts a similar
framework for CMS's enforcement authority over providers and
facilities, including providers of air ambulance services, in states
that do not have authority or otherwise fail to substantially enforce
the requirements of Part E of Title XXVII of the PHS Act, as added by
the CAA. In addition, section 106(e) of the No Surprises Act authorizes
HHS to impose civil money penalties on providers of air ambulance
services for failure to submit to the Secretaries of HHS and
Transportation information related to air ambulance services required
under section 106(a) of the No Surprises Act.
CMS would take enforcement action upon receiving information that
an issuer, non-Federal governmental plan, provider, facility, or
provider of air ambulance services may be violating a provision of the
PHS Act. Sources of information may include: (i) Complaints; (ii)
reports from plans or issuers, providers or facilities, state insurance
departments, state health departments, medical boards, the NAIC, and
any other Federal or state agencies; and (iii) any other information
that indicates potential noncompliance with PHS Act requirements (for
example, review of a provider's or issuer's public website). Upon
receiving information regarding a potential violation where CMS is
responsible for enforcement, or upon being selected for a targeted or
random investigation or market conduct examination, CMS would undertake
either an investigation or a market conduct examination.
When CMS becomes aware of a potential violation, CMS would commence
an investigation by issuing a notice to the responsible entity
detailing the potential violation. Such notice would give the
responsible entity an opportunity to respond, and state that it may be
subject to a civil money penalty or corrective action. HHS proposes
that the responsible entity could respond within the allotted time
frame (as communicated in the written notice to the responsible
entity), request an extension, or default and be subject to the civil
money penalty or corrective action. CMS also may subject a provider of
air ambulance services to a civil money penalty if such provider fails
to submit data required in section 106(a) of the No Surprises Act.
HHS believes this collection is exempt from the PRA under 5 CFR
1320.4(a)(2), which provides an exemption from PRA when information is
gathered ``during the conduct of a civil action to which the United
States or any official or agency thereof is a party, or during the
conduct of an administrative action, investigation, or audit involving
an agency against specific individuals or entities.''
G. Summary of Annual Burden Estimates for Proposed Requirements
[[Page 51761]]
Table 7--Proposed Annual Recordkeeping and Reporting Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Hourly Printing
OMB control Burden per annual labor cost Total labor and
Regulation section No. Respondents Responses response burden of cost of materials Total cost
(hours) (hours) reporting reporting cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
45 CFR 148.410(c)(2)(i)--Issuers 0938-NEW 1,324 1,110,820 2 2,648 $143.18 $379,141 $333,246 $712,387
45 CFR 148.410(c)(2)(i)--Agents 0938-NEW 55,541 55,541 0.5 27,771 66.44 1,845,072 0 1,845,072
and Brokers....................
45 CFR 148.410(c)(2)(ii), 0938-NEW 1,324 4,440,971 0.06 244,253 2 9,491,687 856,268 10,347,956
148.410(c)(3)..................
45 CFR 148.410(d)............... 0938-NEW 1,324 1,324 50 66,200 85.53 5,662,218 0 5,662,218
45 CFR 149.230.................. 0938-NEW 326 326 24 7,819 100 783,362 0 783,362
45 CFR 149.460.................. 0938-NEW 75 75 146.67 11,000 101 1,114,612 0 1,114,612
-----------------------------------------------------------------------------------------------------------------------
Total....................... ........... 59,914 5,609,057 ........... 359,691 ........... 19,276,093 1,189,514 20,465,607
--------------------------------------------------------------------------------------------------------------------------------------------------------
H. Submission of PRA-Related Comments
HHS has submitted a copy of these proposed rules to OMB for its
review of the rule's information collection and recordkeeping
requirements. These requirements are not effective until they have been
approved by the OMB.
To obtain copies of the supporting statement and any related forms
for the proposed collections, please visit CMS's website at
www.cms.hhs.gov/PaperworkReductionActof1995, or call the Reports
Clearance Office at (410) 786-1326.
HHS invites public comments on these potential information
collection requirements. If you wish to comment, please submit your
comments electronically as specified in the ADDRESSES section of these
proposed rules and identify the rule (CMS-9907-P), the ICR's CFR
citation, CMS ID number, and OMB control number.
ICR-related comments are due November 15, 2021.
VI. Collection of Information Requirements--The Department of Labor,
the Department of the Treasury, and OPM
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 program 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:
A. ICRs Regarding Air Ambulance Reporting Requirements for Group Health
Plans, Health Insurance Issuers, and FEHB Carriers (5 CFR 890.114(e),
26 CFR 54.9823-1, 29 CFR 2590.723)
As discussed in section V.D. of the Collection of Information
Requirements for HHS, the total annual burden for all issuers, FEHB
carriers, and TPAs (and any self-insured plans that choose not to use a
TPA or third-party entity to make the appropriate IT and system
changes) would be approximately 34,752 hours, at a total cost of
approximately $3,563,933 to be incurred in 2022. Issuers, FEHB
carriers, and TPAs would also incur an annual burden, in 2023 and 2024,
of 8,688 hours and a total cost of approximately $829,241 to submit the
data to HHS. As HHS, DOL, the Department of the Treasury, and OPM share
jurisdiction, HHS will account for 45 percent of the burden, DOL and
the Department of the Treasury will each share 25 percent of the
burden, and OPM will share five (5) percent of the burden. DOL and the
Department of the Treasury will share approximately 8,688 hours in 2022
with an equivalent cost of $890,983 and an annual burden of
approximately 2,172 hours in 2023 and 2024, with an equivalent cost of
$207,310. OPM will share approximately 1,738 hours in 2022 with an
equivalent cost of $1,738 and an annual burden of approximately 434
hours in 2023 and 2024, with an equivalent cost of $41,462.
Summary of Burden
Type of Review: New Collection.
Agency: DOL-EBSA, Treasury-IRS, OPM-FEHB.
Title: Air Ambulance Reporting Requirements for Group Health Plans,
Health Insurance Issuers, and FEHB Carriers.
OMB Numbers: DOL--1210-NEW, Treasury--1545-NEW.
Affected Public: Businesses or other for-profits, Not-for-profit
institutions.
Total Respondents: 181.
Total Responses: 181.
Frequency of Response: Annually.
Estimated Total Annual Burden Hours: 9,557 (DOL--4,344, Treasury--
4,344, OPM--869).
Estimated Total Annual Burden Cost: $957,423 (DOL--$870,402,
Treasury--$870,402, OPM--$87,040).
VII. Response to Comments
Because of the large number of public comments the Departments
normally receive on Federal Register documents, the Departments are not
able to acknowledge or respond to them individually. The Departments
will consider all comments received by the date and time specified in
the DATES section of the preamble, and, when the Departments proceed
with a subsequent document, the Departments will respond to the
comments in the preamble to that document.
VIII. Regulatory Impact Analysis
A. Statement of Need
The proposed reporting requirements in these proposed rules would
increase transparency and better understanding regarding agent and
broker compensation and the air ambulance industry.
Title II of Division BB of the CAA includes provisions related to
increased transparency. The proposed requirements in 45 CFR 148.410 of
these proposed rules are related to the agent and broker compensation
disclosure and data reporting requirements as set forth in section
202(c) of Title II of Division BB of the CAA. The proposed disclosure
requirements would inform consumers of agent and broker compensation
prior to enrolling in individual health insurance coverage or short-
term,
[[Page 51762]]
limited-duration coverage. The proposed reporting requirements would
also provide HHS with data for such coverage similar to those collected
by the DOL on the compensation provided by issuers of group health
insurance coverage.
The proposed requirements in 45 CFR 149.230 and 149.460 of these
proposed rules are related to the air ambulance data reporting
requirements as set forth in section 106(a) of the No Surprises Act for
providers of air ambulance services and section 106(b) of the No
Surprises Act, which added parallel provisions at section 9823 of the
Code, section 723 of ERISA, and section 2799A-8 of the PHS Act,
requiring plans and issuers offering group or individual health
insurance coverage to submit claims data related to air ambulance
services. The data collection would support the production of the
comprehensive report on air ambulance services required under section
106(c) of the No Surprises Act and would enable the identification and
analysis of unfair and deceptive practices and unfair methods of
competition as noted in section 106(f) of the No Surprises Act. These
proposed rules would also implement certain provisions that would allow
HHS to enforce the No Surprises Act to 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.
The proposed revisions to 45 CFR part 150, including the proposed
inclusion of a new subpart E, would accomplish three objectives: (i)
Implementing section 2799B-4 of the PHS Act, which subjects providers
and facilities, including providers of air ambulance services, to CMS
enforcement and oversight in certain circumstances; (ii) updating the
existing regulations to ensure they align with industry standards and
current CMS practices; and (iii) implementing section 106(e) of the No
Surprises Act, which states that a provider of air ambulance services
that fails to submit all information required under section 106(a)(2)
of the No Surprises Act shall be subject to a civil money penalty of
not more than $10,000. The proposed revisions and these new rules are
necessary to enable CMS to carry out this statutory mandate and enforce
the provisions of the PHS Act and the No Surprises Act against
providers and facilities, including providers of air ambulance
services. They also serve to strengthen CMS's authority and oversight
of issuer and non-Federal governmental plan compliance with applicable
PHS Act requirements.
B. Overall Impact
The Departments have examined the impacts of these proposed rules
as required by Executive Order 12866 on Regulatory Planning and Review
(September 30, 1993), Executive Order 13563 on Improving Regulation and
Regulatory Review (January 18, 2011), the Regulatory Flexibility Act
(RFA) (September 19, 1980, Pub. L. 96-354), section 202 of the Unfunded
Mandates Reform Act of 1995 (March 22, 1995, Pub. L. 104-4), Executive
Order 13132 on Federalism (August 4, 1999), and the Congressional
Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct 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 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. A regulatory impact analysis (RIA) must be prepared for
rules with economically significant effects ($100 million or more in
any 1 year).
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 1 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. An RIA
must be prepared for major rules with economically significant effects
($100 million or more in any 1 year), and a ``significant'' regulatory
action is subject to review by OMB. This rule is not likely to have
economic impacts of $100 million or more in at least 1 year, and
therefore is not expected to be economically significant under
Executive Order 12866. OMB has determined, however, that the actions
are significant within the meaning of section 3(f)(4) of the Executive
order. Therefore, the Departments have provided an assessment of the
potential benefits and costs associated with this rule. In accordance
with the provisions of Executive Order 12866, this regulation was
reviewed by OMB.
The proposed provisions related to disclosure and reporting of
direct and indirect agent and broker compensation related to
enrollments in individual health insurance coverage and short-term,
limited-duration insurance would help provide transparency to consumers
wishing to apply for such coverage. The data submitted to HHS by
issuers of such coverage would enable HHS to determine the compensation
paid to agents and brokers, the structures being used to determine
agent and broker compensation, and potentially determine if
compensation is being used to intentionally steer individuals toward
plans with less comprehensive benefits.
The provisions related to air ambulance data reporting in these
proposed rules would provide complete, uniform, nationwide information
on air ambulance services that is currently not available. The
information collected from providers of air ambulance services would be
used to satisfy the requirements for the comprehensive public report
described in section 106(c) of the No Surprises Act and to allow the
Secretary of Transportation to determine whether a provider of air
ambulance services has engaged in unfair and deceptive practices or
unfair methods of competition. The data collected from plans and
issuers regarding air ambulance services would enable HHS and the
Department of Transportation to combine and validate the information
collected from plans, issuers, and providers of air ambulance services
and would provide additional information to support the production of
the report described in section 106(c) of the No Surprises Act.
Inclusion of discrete, yet de-identified, air ambulance data from each
FEHB carrier will allow for transparency and data validation with
respect to air ambulance services provided to FEHB covered individuals,
for purposes of ensuring a comprehensive report to Congress, and to
further support the implementation of 5 U.S.C. 8902(p) which
specifically ends surprise air ambulance bills in the FEHB Program.
In addition, the enforcement provisions in these proposed rules
would establish the process by which CMS would investigate complaints
and enforce the PHS Act requirements
[[Page 51763]]
applicable to non-Federal governmental plans in all states, and
issuers, providers, and facilities, including providers of air
ambulance services, in states where HHS is directly enforcing PHS Act
requirements or in states that are not substantially enforcing the
requirements. Furthermore, these provisions detail the process by which
CMS would impose civil money penalties against providers and
facilities, including providers of air ambulance services, for a
violation of an applicable PHS Act provision or for failure to submit
required data in compliance with section 106(a) of the No Surprises
Act.
Affected entities, such as plans (or third-party administrators on
behalf of self-insured group health plans), health insurance issuers,
FEHB carriers, issuers of short-term, limited-duration insurance,
providers, including providers of air ambulance services, and
facilities would incur costs related to the submission of data on air
ambulance services, disclosure and reporting of agent and broker
compensation, and enforcement actions. In accordance with Executive
Order 12866, the Departments are of the view that the benefits of this
regulatory action justify the costs.
C. Impact Estimates and Accounting Table
The provisions in these proposed rules would ensure that plans,
issuers, providers (including providers of air ambulance services), and
facilities subject to HHS's enforcement authority comply with
requirements in the No Surprises Act and that participants,
beneficiaries and enrollees with health care coverage are protected
from surprise medical bills. In addition, having access to information
related to agent and broker compensation increases transparency and
could help enrollees with individual health insurance coverage and
short-term, limited-duration insurance coverage make more informed
decisions regarding their health care coverage. In accordance with OMB
Circular A-4, Table 8 depicts an accounting statement summarizing the
Departments' assessment of the benefits and costs associated with this
regulatory action. The Departments are unable to quantify the benefits
of these proposed rules, but have included a qualitative discussion.
The effects in Table 8 reflect qualitative impacts and estimated direct
monetary costs resulting from the provisions of these proposed rules.
Table 8--Accounting Table
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Benefits and Intended Outcomes:
----------------------------------------------------------------------------------------------------------------
Qualitative:
Increased transparency related to agent and broker compensation arrangements and structures, giving
consumers more information as they make choices regarding health care coverage.............................
Ability for the Federal Government to analyze and/or investigate potential unfair or deceptive
practices against consumers, and unfair methods of competition used by providers of air ambulance services.
Improved compliance with laws prohibiting surprise medical bills due to enforcement actions........
----------------------------------------------------------------------------------------------------------------
Costs: Estimate Year dollar Discount rate Period
(million) (%) covered
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($/year)................... $31.82 2021 7 2021-2025
32.35 2021 3 2021-2025
----------------------------------------------------------------------------------------------------------------
Quantitative:
Costs to issuers of individual health insurance coverage and short-term, limited-duration insurance
to provide proposed agent and broker compensation disclosures prior to when an individual finalizes their
plan selection, and on any documentation confirming initial enrollment, including enrollment documentation
required by applicable state or Federal law or an initial enrollment package estimated to be approximately
$11.1 million annually beginning in 2022...................................................................
Costs to agents and brokers for providing compensation disclosures prior to when an individual
finalizes their plan selection, estimated to be approximately $1.8 million annually beginning in 2022......
Costs to issuers of individual health insurance coverage and short-term, limited-duration insurance
to gather and submit proposed agent and broker compensation data to HHS, expected to be approximately $5.7
million annually beginning in 2023.........................................................................
Costs to plans, issuers, FEHB Carriers, and TPAs to submit proposed air ambulance related
information to HHS, estimated to be one-time costs of approximately $3.6 million in 2022 and annual costs
of approximately $829,241 in 2023 and 2024.................................................................
Costs to providers of air ambulance services to submit proposed information to HHS, estimated to be
one-time costs of approximately $3 million in 2022 and annual costs of approximately $134,538 in 2023 and
2024.......................................................................................................
Costs to providers and facilities, including providers of air ambulance services, related to
enforcement actions, estimated to be approximately $850,320 annually, starting in 2022.....................
Costs to the Federal Government to implement the proposed reporting requirements and enforcement
activities, estimated to be $4 million in 2021, $20.3 million in 2022, $22.2 million in 2023, $18.3 million
in 2024 and $18.4 million in 2025..........................................................................
----------------------------------------------------------------------------------------------------------------
Quantitative:
Potential reduction in income for agents and brokers and potential costs and reduction in revenue
and profits for providers of air ambulance services, if there are changes in consumer behavior and
operational changes as a result of greater transparency regarding agent and broker compensation and the air
ambulance industry.........................................................................................
----------------------------------------------------------------------------------------------------------------
1. Background
a. Agent and Broker Compensation
The issue of increasing transparency within the health insurance
industry regarding agent and broker compensation has drawn escalating
attention in recent years. Part of the increased need for transparency
stems from the expanded availability of short-term, limited-duration
insurance coverage.\43\ Insurance agents or brokers often receive
higher commission rates for enrolling consumers in short-term, limited-
duration insurance coverage compared to coverage that meets ACA
[[Page 51764]]
requirements.\44\ There are concerns agents or brokers could encourage
consumers to enroll in short-term, limited-duration insurance coverage
due to their high commission rates.\45\ In addition, there are concerns
that there may be deceptive practices surrounding the sale of short-
term, limited duration insurance.\46\ As described in section III.B of
the preamble of this proposed rule, agents and brokers enter into
appointment arrangements with health insurance issuers. These
arrangements govern compensation provided to agents and brokers for
assisting consumers with enrollment in an issuer's policies. The
specific compensation arrangement between an issuer and the agent or
broker is typically laid out in the commission schedule. Compensation
arrangements may also include other types of compensation, such as fees
and bonuses. Section 2746 of the PHS Act requires both direct and
indirect compensation to be disclosed and taken into account for all
requirements herein.
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\43\ Department of the Treasury, Department of Labor, Department
of Health and Human Services, Short-Term, Limited-Duration
Insurance, 83 FR 38212 (Aug. 3, 2018) (www.govinfo.gov/content/pkg/FR-2018-08-03/pdf/2018-16568.pdf) (final rule).
\44\ See U.S. House of Representatives Committee on Energy and
Commerce report ``Shortchanged: How the Trump Administration's
Expansion of Junk Short-Term Health Insurance Plans is Putting
Americans at Risk.'' Page 43 (stating the average commission rate
for short-term, limited-duration insurance plans was 23 percent
while the average commission rate for ACA-compliant plans was
approximately 2 percent in 2018).
\45\ Id. At 38 (stating issuers offering short-term, limited-
duration insurance coverage have business practices that incentivize
agents and brokers to engage in fraudulent or misleading practices).
\46\ See Health Care Sabotage Online: A Warning to Consumers,
October 2019 (https://www.casey.senate.gov/imo/media/doc/Senator%20Casey%20-%20Health%20Care%20Sabotage%20Online%20FINAL.pdf).
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b. Surprise Medical Bills for Air Ambulance Services
The issue of surprise medical bills for air ambulance services has
drawn increasing attention from the public as the amounts charged by
providers of air ambulance services have risen drastically in recent
years and because utilization of air ambulance services frequently
results in surprise bills. A study by the GAO analyzed private health
insurance claims from 2012 and 2017 to describe the extent to which air
ambulance transports are out-of-network.\47\ That study analyzed claims
data from approximately 24,100 air ambulance 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 prices charged
in 2017 were an increase of over 60 percent from 2012. 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.\48\ Another study found
that for one of the largest providers (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.\49\
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\47\ 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 payors 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.
\48\ 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.
\49\ 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 have
continued to increase, the GAO reported that providers of air ambulance
services report entering into more network contracts.\50\ However,
additional analyses found that many providers of air ambulance
services, particularly those not affiliated with a hospital, do not
participate in issuer 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.\51\
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\50\ 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.
\51\ 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 through 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 transports were out-of-network, and approximately 40
percent of 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
for out-of-network rotary-wing claims, issuers paid the providers' full
billed charges approximately 48 percent of the time, for an average of
$35,733 and that for in-network providers, billed charges were paid in
full only 7 percent of the time. The study 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,\52\ indicating that individuals enrolled in self-insured plans
were less likely to receive balance bills than individuals enrolled in
fully-insured plans.
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\52\ 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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As states, the Federal Government, oversight agencies, and advocacy
groups have examined the issue of air ambulance services and balance
billing, it has become clear that there is a lack of comprehensive,
national data on air ambulance costs, transports, and contractual
arrangements between providers of air ambulance services and group
health plans and health insurance issuers. Two GAO reports (2017 and
2019) and the FAA Reauthorization Act of 2018 indicate that it is
necessary to collect data to better inform policymakers and consumers
about the air ambulance services market. For example, increased
transparency regarding the costs to provide air ambulance services and
billed and paid amounts for air ambulance services would be beneficial
in assessing obstacles to network inclusion and contract negotiations
involving providers of air ambulance services. Transparency regarding
the number and location of air ambulance bases would enable assessment
of the availability of services and competition in the air ambulance
marketplace. Finally, a publicly-available report regarding air
ambulance services would help to improve policymakers' and consumers'
understanding of the air ambulance industry.
c. Enforcement
Section 2723 of the PHS Act provides that states are the primary
enforcers of the requirements applicable to issuers that issue, sell,
renew, or offer health insurance coverage in the state in the
[[Page 51765]]
individual or group market. If HHS determines that a state has failed
to substantially enforce a provision of Title XXVII of the PHS Act, HHS
enforces that provision with respect to issuers in the state. HHS
further enforces the requirements applicable to non-Federal
governmental plans in all states. Any non-Federal governmental plan or
any issuer subject to HHS's enforcement authority that fails to comply
with an applicable provision of Part A or Part D of Title XXVII is
subject to a civil money penalty.
Section 2799B-4 of the PHS Act provides that states are the primary
enforcers of the requirements applicable to providers and facilities
under Part E of Title XXVII of the PHS Act, including providers of air
ambulance services. If HHS determines that a state has failed to
substantially enforce an applicable provision, HHS enforces that
provision in the state. Any provider or facility, including a provider
of air ambulance services, that HHS has determined to be in violation
of an applicable provision in Part E of Title XXVII of the PHS Act may
be subject to a civil money penalty. Under part 106(e) of the No
Surprises Act, any provider of air ambulance services that fails to
submit data required in section 106(a) of the No Surprises Act may also
be subject to a civil money penalty.
According to researchers at the Center on Health Insurance Reforms,
Georgetown University Health Policy Institute, 18 states have adopted
comprehensive surprise billing protections, and 15 states have adopted
partial protections.\53\ The state agency responsible for implementing
and enforcing these protections vary among states. According to the
Center on Health Insurance Reforms, ``Some states direct their
insurance department to ensure compliance with the law, but while
insurance departments have clear jurisdiction over insurance companies,
they often lack jurisdiction over providers. Some states may rely on
their medical licensing authority or ``deceptive trade practice''
statutes to enforce requirements on providers; other states may be
dependent on the attorney general filing a civil lawsuit against
providers who continue to send surprise bills to patients.'' \54\
States have also identified the State Department of Health as the
agency with oversight authority over providers with respect to surprise
billing requirements. Because many of these state laws are relatively
new, there is little empirical evidence about the cost to state
regulators and the regulated parties subject to the surprise billing
protections.
---------------------------------------------------------------------------
\53\ See Kona, Maanasa ``State Balance-Billing Protections.''
The Commonwealth Fund, 5 February 2021, https://www.commonwealthfund.org/publications/maps-and-interactives/2021/feb/state-balance-billing-protections.
\54\ See https://surprisemedicalbills.chir.georgetown.edu/policy-options/enforcement/.
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2. Benefits and Intended Outcomes
The provisions of this proposed rule require health insurance
issuers offering individual health insurance coverage or short-term,
limited-duration insurance to disclose to policyholders any direct or
indirect compensation provided by the issuer to an agent or broker
associated with enrolling individuals in such coverage. The proposed
disclosure requirements would improve consumers' awareness by providing
information on how agents and brokers are compensated with regard to
the coverage sold to those individuals or renewed on behalf of the
individuals. In this way, consumers will be able to take this into
account as they make decisions about obtaining health coverage. Knowing
how much an agent or broker would earn in commissions for selling them
health insurance coverage could inform a consumer as to whether an
agent's or broker's recommendations or promotions of individual health
insurance coverage or short-term, limited-duration insurance is due to
a potential conflict of interest. Disclosing this information would
provide additional clarity to consumers and help inform whether they
want to enroll in, or renew, a particular health insurance coverage. To
the extent vulnerable populations, including those with ongoing or
prior health conditions, are being encouraged to enroll in short-term,
limited-duration insurance,\55\ the proposed disclosure requirements
might help these individuals better understand the agent's and broker's
motivations and incentives in marketing and recommending such coverage.
As short-term, limited-duration insurance is generally exempt from the
ACA's individual market consumer protection provisions,\56\ issuers of
such coverage can draw in lower-income or healthy individuals by
offering lower premiums than plans that offer the ACA consumer
protections.\57\ It is important for agents or brokers to disclose
their commissions so individuals can take into account the agent's or
broker's potential motivations for encouraging enrollment in a specific
type of coverage.
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\55\ Curran, E. U.S. House Investigation Offers New Evidence on
the Dangers of Short-Term Plans. CHIRblog, July 9, 2020, http://chirblog.org/u-s-house-investigation-offers-new-evidence-dangers-short-term-plans/.
\56\ See, for example, Excepted Benefits; Lifetime and Annual
Limited; and Short-Term Limited-Duration Insurance; final rules, 81
FR 75316 at 75317 (October 31, 2016) and Short-Term, Limited
Duration Insurance; final rule, 83 FR 38212 at 38213 (August 3,
2018).
\57\ See U.S. House of Representatives Committee on Energy and
Commerce report ``Shortchanged: How the Trump Administration's
Expansion of Junk Short-Term Health Insurance Plans is Putting
Americans at Risk.'' Page 12 (https://www.hsdl.org/?view&did=841078)
and House Committee on Energy and Commerce. E&C Investigation Finds
Millions of Americans Enrolled in Junk Health Insurance Plans That
Are Bad For Consumers & Fly Under the Radar of State Regulators,
Press Release (Jun 25, 2020), https://energycommerce.house.gov/newsroom/press-releases/ec-investigation-finds-millions-of-americans-enrolled-in-junk-health.
---------------------------------------------------------------------------
All health insurance issuers offering individual health insurance
coverage or short-term, limited-duration insurance would be required to
report annually to HHS any direct or indirect compensation provided to
an agent or broker associated with enrolling individuals in such
coverage. HHS would use analysis of this information to monitor the
marketing operations and practices of issuers of individual health
insurance coverage and short-term, limited-duration insurance and
inform future policy-making decisions.
The air ambulance data collection would advance policymakers' and
the public's understanding of the air ambulance industry and increase
the transparency of the market conditions affecting air ambulance
services. In addition, the data collected from providers of air
ambulance services may be used by the Secretary of Transportation to
investigate potential unfair or deceptive practices used by these
providers against consumers as well as potentially unfair methods of
competition in the air ambulance service market.
Surprise medical bills result in higher out-of-pocket expenses and
cause financial anxiety and medical debt for consumers.\58\ These
proposed rules would establish an enforcement process to help ensure
plans, issuers, providers, and facilities, including providers of air
ambulance services, comply with the provisions of the PHS Act. Without
strong Federal oversight and enforcement mechanisms, there would be no
practical consequences when providers and facilities, including
providers of air ambulance services, fail to comply with the PHS Act in
states that are not directly enforcing the applicable requirements. The
Federal oversight and enforcement procedures proposed in 45 CFR part
150 would increase provider and facility, compliance with the new
surprise
[[Page 51766]]
billing and transparency requirements in 45 CFR part 149. Compliance
with these provisions is necessary to inform future policy that could
help reduce financial anxiety and medical debt by reducing surprise
medical bills for individuals with health coverage.
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\58\ 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.
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3. Costs
Health insurance issuers offering individual health insurance
coverage or short-term, limited-duration insurance would incur costs to
comply with the agent and broker compensation disclosure and reporting
requirements set forth in these proposed rules. Issuers would incur
annual costs of approximately $712,387 to provide agent or broker
compensation disclosure and supplemental documentation detailing
additional compensation not on the commission schedule prior to
enrollment and approximately $10.3 million to provide the disclosure in
documentation confirming enrollment, starting in 2022. Additionally,
issuers would incur annual ongoing costs of approximately $5.7 million
to collect and submit the required agent and broker compensation and
supplemental documentation detailing additional compensation not on the
commission schedule information to HHS starting in 2023. Agents and
brokers would incur annual costs of approximately $1.8 million to
provide agent or broker compensation disclosure and supplemental
documentation detailing additional compensation not on the commission
schedule prior to enrollment beginning in 2022. These costs are
discussed in detail in the Collection of Information Requirements
section of the preamble.
Issuers, FEHB Carriers, TPAs, and providers of air ambulance
services would incur costs to comply with the air ambulance services
reporting requirements set forth in these proposed rules. The
Departments estimate that 473 issuers, 46 FEHB carriers, and 205 TPAs
would incur one-time costs of approximately $3.6 million in 2022 and
annual costs of approximately $829,241 in 2023 and 2024 to comply with
this requirement. These total costs are likely overestimated because
the estimate does not reflect process efficiencies for FEHB carriers
that are also issuers. In addition, 75 providers of air ambulance
services would incur one-time costs of approximately $3 million in 2022
and annual costs of approximately $134,538 in 2023 and 2024 to comply
with the reporting requirement. These costs are discussed in detail in
the Collection of Information Requirements section of the preamble.
Increased transparency regarding agent and broker compensation and
greater consumer awareness of potential conflicts of interest for
agents and brokers might lead fewer consumers to choose short-term,
limited-duration insurance if they feel they are being steered toward
such plans due to an agent's or broker's financial self-interest. It
might also encourage some agents and brokers to avoid such conflicts of
interest. This could result in a reduction in income for some agents
and brokers. Increased transparency regarding the air ambulance
industry might also lead to operational changes for some providers of
air ambulance services, such as an increase in the number of
participating providers of air ambulance services for plans and reduced
charges. Providers of air ambulance services that make any operational
changes would incur related costs and might experience a reduction in
profits.
Providers and facilities, including providers of air ambulance
services, would, on occasion, incur costs related to enforcement
actions taken by CMS. When CMS becomes aware of a potential violation
of the PHS Act and is responsible for enforcement, CMS would commence
an investigation by issuing a notice to the responsible entity
detailing the potential violation. Such notice would give the
responsible entity an opportunity to respond, and state that it may be
subject to a civil money penalty or corrective action. The responsible
entity could respond within the allotted time frame, request an
extension, or default and be subject to the civil money penalty or
corrective action when there is sufficient evidence indicating there is
a PHS Act violation. HHS estimates that, on average, CMS would conduct
approximately 200 investigations per month, for a total of 2,400
investigations per year, starting in 2022. HHS estimates that for each
potential violation being investigated, a medical secretary would need
3 hours on average (at a rate of $37.50 per hour) and a manager would
need 2 hours on average (at a rate of $120.90 per hour) to prepare a
response and collect supporting documents and submit them to CMS.\59\
The cost for each responsible entity subject to a CMS investigation is
estimated to be approximately $354 for each investigation. The total
annual cost related to all 2,400 investigations would be approximately
$850,320. HHS anticipates that the number of investigations and the
associated costs would decrease over time as compliance improves.
---------------------------------------------------------------------------
\59\ 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.
Medical Secretaries and Administrative Assistants (43-6013) $18.75 *
2 = $37.50 * 3 hours = $112.50 and General and Operations Manager
(11-1021) $60.45 * 2 = $120.90 * 2 = $241.80. Total cost, $112.50 +
$241.90 = $354.30.
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CMS would review the response provided by the responsible entity
and determine if the entity violated a provision of the PHS Act. HHS
proposes that if CMS determines that the responsible entity did violate
a provision of the PHS Act, then it may impose civil money penalties
not to exceed $10,000 per violation. If CMS determines that a provider
of air ambulance services failed to submit information required in
section 106(a) of the No Surprises Act by the due date, including any
extensions granted, then it may impose civil money penalties not to
exceed $10,000. If the responsible entity timely files a request for
appeal, such appeal would be heard before an administrative law judge,
who would conduct any appeal as provided in 45 CFR 150.401 through
150.465. Finally, HHS proposes that a responsible entity can appeal the
decision of an administrative law judge to the United States Court of
Appeals for the district where the provider, facility, or provider of
air ambulance services is located or the violation occurred. At this
time, HHS is unable to estimate the number of responsible entities that
would appeal a penalty or the decision of an administrative law judge
and the associated cost.
In addition, the Federal Government would incur costs to build and
maintain IT systems to receive, store, and analyze agent and broker
compensation data and air ambulance data. In addition, the Federal
Government would incur costs related to enforcement of the PHS Act,
such as enforcement of reporting requirements for issuers and providers
of air ambulance services, conducting compliance reviews of provider
and facility websites, review of complaints received, and investigating
instances of potential violations of the PHS Act by providers and
facilities, including providers of air ambulance services, in states
where HHS is directly enforcing PHS Act requirements. The Departments
estimate that the total costs associated with these activities would be
$4 million in 2021, $20.3 million in 2022, $22.2 million in 2023, $18.3
million in 2024, and $18.4 million in 2025.
D. Regulatory Alternatives Considered
In developing the policies contained in these proposed rules, the
Departments considered various alternatives to the presented proposals.
[[Page 51767]]
In determining the disclosure and data reporting requirements for
agent and broker compensation in these proposed rules, HHS considered
requiring disclosure of intermediary payments to consumers (for
example, payments made through general line agencies or marketing
organizations) prior to finalizing enrollment. That level of detail was
determined to be impractical and would not have enough positive impact
on the consumer to justify the cost to implement. HHS also considered
requiring the disclosure of actual amounts of compensation an agent or
broker would receive. That, too, was rejected as being impossible to
calculate ahead of time, as well as being potentially overly burdensome
on the sales process. Furthermore, HHS considered requiring signed
documentation from the consumer stating disclosure had occurred. This
was not pursued, given concerns regarding burden.
In determining the data reporting requirements for air ambulance
services contained in these proposed rules, the Departments considered
available alternative regulatory proposals. Given the statutory
requirements of section 106 of the No Surprises Act, these alternatives
were limited to reducing the number of data reporting elements
required. However, collecting data in a more aggregated format would
not support many of the analyses required in the statute for the
comprehensive report on air ambulance services required under section
106(c). Section 106(c) of the No Surprises Act requires, among other
analyses, assessments of amounts paid by issuers for furnishing air
ambulance services, amounts paid out-of-pocket by consumers, any
changes in the amounts paid over time and as an assessment of any
evidence of gaps in rural access to air ambulance services. The absence
of detailed transport-level data would limit the Secretaries' of HHS
and Transportation ability to conduct these analyses.
E. Regulatory Flexibility Act
The RFA (5 USC 601, et seq.), requires agencies to prepare an
initial regulatory flexibility analysis to describe the impact of these
proposed rules 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.
The provisions in these proposed rules would affect health
insurance issuers, group health plans, TPAs (on behalf of self-insured
group health plans), and issuers of short-term, limited-duration
insurance. Health insurance issuers and group health plans would be
classified under the North American Industry Classification System
(NAICS) code 524114 (Direct Health and Medical Insurance Carriers).
According to SBA size standards, entities with average annual receipts
of $41.5 million or less are considered small entities for this North
American Industry Classification System codes. Issuers could possibly
be classified in 621491 (HMO Medical Centers) and, if this is the case,
the SBA size standard would be $35 million or less.\60\ The Departments
expect that few, if any, insurance companies underwriting comprehensive
health insurance policies (in contrast, for example, to travel
insurance policies or dental discount policies) fall below these size
thresholds. Based on data from medical loss ratio (MLR) annual report
\61\ submissions for the 2019 MLR reporting year, approximately 77 out
of 473 issuers of health insurance coverage nationwide had total
premium revenue of $41.5 million or less. This estimate may overstate
the actual number of small health insurance companies that may be
affected, since over 67 percent of these small companies belong to
larger holding groups, and many, if not all, of these small companies
are likely to have non-health lines of business that will result in
their revenues exceeding $41.5 million. The Departments are of the view
that the same assumptions also apply to TPAs that would be affected by
these proposed rules.
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\60\ https://www.sba.gov/document/support--table-size-standards.
\61\ Available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.html.
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Providers of air ambulance services would be classified under NAICS
code 621910 (Ambulance Services), with a size standard of $16.5 million
or less. Based on a 2020 USC-Brookings Schaeffer report on air
ambulance services,\62\ by 2017, large private equity firms controlled
roughly two-thirds of the air ambulance market. The Departments lack
data on the number of small entities in the air ambulance market. As
discussed earlier in the Collection of Information Requirements
section, a provider of air ambulance services would incur a cost of
approximately $41,000 in 2022 and annual costs of $1,794 in 2023 and
2024 to submit the required information to HHS. The Departments seek
comment on whether any providers of air ambulance services may be
considered small entities (including entities with annual revenue under
$16.5 million or independent not-for-profit entities not dominant in
the industry) and whether these costs would result in an impact of more
than 3 to 5 percent of revenues for those small entities.
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\62\ Adler, L., Hannick, K., and Lee, S. High Air Ambulance
Charges Concentrated in Private Equity-Owned Carriers. USC-Brookings
Schaffer Initiative for Health Policy. October 13, 2020.
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Agents and brokers would be classified under NAICS code 524210
(Insurance Agencies and Brokerages), with a size standard of $8 million
or less. The proposed requirement to provide agent or broker
compensation disclosure to individuals prior to enrollment would affect
an estimated 55,541 agents and brokers, many of whom are likely to be
employed by small entities. As discussed earlier in the HHS Collection
of Information Requirements section, an agent or broker would incur a
cost of approximately $33 to comply with the proposed requirement. This
is unlikely to cause a change in revenue of more than 3 to 5 percent
for agents and brokers.
As discussed earlier in the Regulatory Impact Analysis, the
proposed provisions related to enforcement in these proposed rules
regarding enforcement of section 2799B-4 of the PHS Act would also
affect approximately 2,400 providers (including providers of air
ambulance services) and facilities annually, some of which might be
small entities. A provider or facility subject to investigation would
incur a cost of approximately $354. This is unlikely to cause a change
in revenue of more than 3 to 5 percent for providers and facilities.
Therefore, the Departments do not anticipate that the proposed
provisions in these proposed rules would have a significant effect on a
substantial number of small entities. The Departments seek comment on
this analysis.
In addition, section 1102(b) of the SSA requires the Departments to
prepare a regulatory impact analysis if a rule under Title XVIII, Title
XIX, or part B of Title 42 of the SSA may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to
[[Page 51768]]
the provisions of section 603 of the RFA. For purposes of section
1102(b) of the SSA, the Departments define a small rural hospital as a
hospital that is located outside of a metropolitan statistical area and
has fewer than 100 beds. While this rule is not subject to section 1102
of the SSA, the Departments have determined that these proposed rules
would only affect small rural hospitals if they are subject to an
enforcement action. However, as discussed earlier in the RIA, a
facility subject to investigation would incur a cost of approximately
$354. Therefore, the Departments are of the view that these proposed
rules would not have a significant impact on the operations of a
substantial number of small rural hospitals. The Departments seek
comment on this analysis.
F. Unfunded Mandates
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 that includes any
Federal mandate that may result in expenditures in any 1 year by a
state, local, or Tribal governments, in the aggregate, or by the
private sector, of $100 million in 1995 dollars, updated annually for
inflation. Currently, that threshold is approximately $158 million. As
discussed earlier in the RIA, plans, issuers, providers, and
facilities, including providers of air ambulance services, would incur
costs to comply with the proposed provisions of these proposed rules.
The Departments estimate the combined impact on state, local, or Tribal
governments and the private sector would not be above the threshold.
G. Federalism
Executive Order 13132 establishes certain requirements that Federal
agencies must meet when they issue proposed rules that imposes
substantial direct costs on state and local governments, preempts state
law, or otherwise has federalism implications.
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 an individual basis.
While developing this rule, the Departments attempted to balance
the states' interests in regulating health insurance issuers,
providers, including providers of air ambulance services, and
facilities with the need to ensure market stability. By doing so, the
Departments complied with the requirements of Executive Order 13132.
Section 2799B-4(a)(1) of the PHS Act provides that states serve as
the primary enforcement authority for these new requirements.\63\
Section 2799B-4(a)(2) of the PHS Act provides that if the Secretary of
HHS determines that a state has failed to substantially enforce any of
these new requirements, then HHS shall assume enforcement of such
provision. Therefore, the proposed amendments in this rulemaking would
apply the process outlined in 45 CFR 150.201 through 150.221. by which
HHS determines that a state is not substantially enforcing a PHS Act
provision to the enforcement of the requirements in section 2799B-4.
The remaining subparts of 45 CFR part 150 that relate to CMS
enforcement of section 2799B-4 would apply only when the Secretary of
HHS makes the determination that a state has substantially failed to
enforce.
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\63\ 45 CFR 150.201 currently provides that ``. . . each State
enforces PHS Act requirements with respect to health insurance
issuers that issue, sell, renew, or offer health insurance coverage
in the State.''
---------------------------------------------------------------------------
Section 2799B-4(c) of the PHS Act provides that ``the sections
specified in subsection (a)(1) shall not be construed to supersede any
provision of state law which establishes, implements, or continues in
effect any requirement or prohibition except to the extent that such
requirement or prohibition prevents the application of a requirement or
prohibition of such a section.'' These proposed rules would not preempt
any state law except to the extent that the Secretary of HHS makes the
determination that a state has substantially failed to enforce.
Chiquita Brooks-LaSure, Administrator of the Centers for Medicare &
Medicaid Services, approved this document on August 26, 2021.
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.
45 CFR Part 148
Administrative practice and procedure, Health care, Health
insurance, Insurance companies, Penalties, Reporting and recordkeeping
requirements.
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 150
Administrative practice and procedure, Health care, Health
insurance, Penalties, Reporting and recordkeeping requirements.
Laurie Bodenheimer,
Associate Director, Healthcare and Insurance, Office of Personnel
Management.
Douglas W. O'Donnell,
Deputy Commissioner for Services and Enforcement, Internal Revenue
Service.
Ali Khawar,
Acting 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 proposes to amend 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
[[Page 51769]]
(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; 25 U.S.C. 1647b.
Subpart A--Administration and General Provisions
0
2. Section 890.114 is amended by adding reserved paragraph (d) and
paragraph (e) to read as follows:
Sec. 890.114 Surprise billing.
* * * * *
(e) A carrier must comply with requirements of 45 CFR 149.230 with
respect to an FEHB plan in the same manner as such provisions apply to
a group health plan or health insurance issuer offering group or
individual health insurance coverage and within the time frame set
forth in 45 CFR 149.230(a)(2). This paragraph (e) applies to data for
each of the 2022 and 2023 calendar years.
DEPARTMENT OF THE TREASURY
Internal Revenue Service
Accordingly, 26 CFR part 54 is proposed to be amended as follows:
PART 54--PENSION EXCISE TAXES
0
Paragraph 3. The authority citation for part 54 continues to read, in
part, as follows:
Authority: 26 U.S.C. 7805, unless otherwise noted.
* * * * *
0
Par. 4. Section 54.9823-1 is added to read as follows:
Sec. 54.9823-1 Air ambulance reporting requirements.
(a) In general. Each group health plan that satisfies the
requirements of 45 CFR 149.230 satisfies the requirements to submit a
report to the Secretary of the Treasury pursuant to section 9823 of the
Code.
(b) Applicability. This section applies to data for each of the
2022 and 2023 calendar years.
DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Chapter XXV
For the reasons set forth in the preamble, the Department of Labor
proposes to amend 29 CFR part 2590 as set forth below:
PART 2590--RULES AND REGULATIONS FOR GROUP HEALTH PLANS
0
5. The authority citation for part 2590 continues 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
6. Section 2590.723 is added to read as follows:
Sec. 2590.723 Air ambulance reporting requirements.
(a) In general. Each group health plan or health insurance issuer
offering group health insurance coverage that satisfies the
requirements of 45 CFR 149.230 satisfies the requirements to submit a
report to the Secretary of Labor pursuant to section 723 of the
Employee Retirement Income Security Act of 1974, as amended.
(b) Applicability. This section applies to data for each of the
2022 and 2023 calendar years.
DEPARTMENT OF HEALTH AND HUMAN SERVICES
For the reasons stated in the preamble, the Department of Health
and Human Services proposes to amend 45 CFR parts 144, 148, 149, and
150 as set forth below:
PART 144--REQUIREMENTS RELATING TO HEALTH INSURANCE COVERAGE
0
7. The authority citation for part 144 continues 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
8. Section 144.101 is amended by revising paragraphs (e) introductory
text and (e)(1) and (2) to read as follows:
Sec. 144.101 Basis and purpose.
* * * * *
(e) Part 150 of this subchapter implements the enforcement
provisions of sections 2723, 2761, and 2799B-4 of the PHS Act, as well
as section 106 of the No Surprises Act, with respect to the following:
(1) States that fail to substantially enforce one or more
provisions of part 146 of this subchapter concerning group health
insurance coverage, one or more provisions of part 147 of this
subchapter concerning group or individual health insurance coverage,
one or more provisions of part 148 of this subchapter concerning
individual health insurance coverage or short-term, limited-duration
insurance, or one or more provisions of part 149 of this subchapter
concerning group or individual health insurance coverage, providers and
facilities, and providers of air ambulance services.
(2) Issuers as defined in Sec. 144.103, and providers and
facilities, each as defined in Sec. 150.103 of this subchapter, in
States described in paragraph (e)(1) of this section.
* * * * *
PART 148--REQUIREMENTS FOR THE INDIVIDUAL HEALTH INSURANCE MARKET
0
9. The authority citation for part 148 is revised to read as follows:
Authority: 42 U.S.C. 300gg-21 through 300gg-63, 300gg-91, and
300gg-92, as amended.
0
10. Section 148.101 is revised to read as follows:
Sec. 148.101 Basis and purpose.
This part implements sections 2722 through 2763 and 2791 and 2792
of the PHS Act. Its purpose is to guarantee the renewability of all
coverage in the individual market. It also provides certain protections
for mothers and newborns with respect to coverage for hospital stays in
connection with childbirth and protects all individuals and family
members who have, or seek, individual health insurance coverage from
discrimination based on genetic information. It also sets forth
reporting and disclosure requirements on health insurance issuers
offering individual health insurance coverage or short-term, limited-
duration insurance regarding the amount of direct and indirect
compensation paid to agents or brokers associated with enrolling
consumers in such coverage.
0
11. Section 148.102 is amended by adding paragraph (a)(3) and revising
paragraph (b) to read as follows:
Sec. 148.102 Scope and applicability date.
(a) * * *
[[Page 51770]]
(3) The requirements in Sec. 148.410 that pertain to the
disclosure and reporting of agent and broker compensation apply to
health insurance issuers of individual health insurance coverage or
short-term, limited-duration insurance, as defined in Sec. 144.103 of
this subchapter.
(b) Applicability date. Except as provided in Sec. 148.124
(certificate of creditable coverage), Sec. 148.170 (standards relating
to benefits for mothers and newborns), Sec. 148.180 (prohibition of
health discrimination based on genetic information), and Sec. 148.410
(reporting and disclosure of agent and broker compensation), the
requirements of this part apply to health insurance coverage offered,
sold, issued, renewed, in effect, or operated in the individual market
after June 30, 1997. Notwithstanding the previous sentence, the
definition of ``short-term, limited-duration insurance'' in Sec.
144.103 of this subchapter is applicable October 2, 2018.
0
12. Add subpart F to read as follows:
Subpart F--Requirements Related to Reporting and Disclosure
Sec. 148.410 Reporting and disclosure of agent and broker
compensation for individual health insurance coverage or short-term,
limited-duration insurance.
(a) In general. A health insurance issuer offering individual
health insurance coverage or short-term, limited-duration insurance
must make disclosures to individuals, as described in paragraph (c) of
this section, and provide reports to the Secretary, as described in
paragraph (d) of this section, regarding direct and indirect
compensation provided by the issuer to an agent or broker associated
with enrolling individuals in such coverage.
(b) Definitions. The following definitions apply to this section:
(1) Agent or broker has the meaning given in Sec. 155.20 of this
subchapter.
(2) Commission schedule means an itemized list or table that
provides the commission levels that are paid by an issuer for the sale,
placement, or renewal of individual health insurance coverage or short-
term, limited-duration insurance.
(3) Direct compensation means monetary amounts, including sales and
base commissions, paid by an issuer that are attributable directly to
the policy, certificate, or contract of insurance and that are paid to
an agent or broker for the sale, placement, or renewal of individual
health insurance coverage or short-term, limited-duration insurance.
(4) Indirect compensation means payments by an issuer attributable
indirectly to a policy, certificate, or contract of insurance to
agents, brokers, and other persons for items other than sales and base
commissions (for example, service fees, consulting fees, finders' fees,
profitability and persistency bonuses, awards, prizes, volume-based
incentives, and non-monetary forms of compensation).
(5) Policyholder means the individual who purchases individual
health insurance coverage or short-term, limited-duration insurance and
who is responsible for the payment of premiums.
(c) Disclosure requirements--(1) General requirements. An issuer
described in paragraph (a) of this section must disclose to a potential
or existing policyholder the amount of direct and indirect compensation
provided to an agent or broker associated with enrolling the
policyholder in individual health insurance coverage or short-term,
limited-duration insurance.
(2) Disclosures related to initial enrollments in a plan. An issuer
must disclose to all potential or new policyholders the amount of
direct and indirect compensation, including the commission schedule
applicable to the potential or current plan selection by all potential
or new policyholders and an explanation of qualifying thresholds for
the payment of indirect compensation to an agent or broker (or, if an
issuer does not use commission schedules, the information described in
paragraph (c)(5) of this section). Such disclosure must be made--
(i) Prior to when a potential policyholder finalizes their plan
selection; and
(ii) On any documentation confirming the initial enrollment,
including enrollment documentation required by applicable State or
Federal law or an initial enrollment package.
(3) Disclosures related to renewals of enrollment in a plan. For
renewals of enrollment in a plan, an issuer must disclose to a
policyholder the amount of direct and indirect compensation, including,
but not limited to, the commission schedule applicable to a plan
renewal and an explanation of qualifying thresholds for the payment of
indirect compensation to an agent or broker (or, if an issuer does not
use commission schedules, the information described in paragraph (c)(5)
of this section). Such disclosure must accompany the plan renewal
notice required in Sec. 147.106(f) of this subchapter or Sec.
148.122(i), if applicable.
(4) Default disclosure. In the absence of any documentation
required by State law or the requirement for a notice of renewal of
coverage, issuers must disclose the amount of direct and indirect
compensation, including information typically itemized on a commission
schedule used to determine agent or broker compensation as well as an
explanation of qualifying thresholds for the payment of indirect
compensation to an agent or broker, with the invoice for the first
premium payment for the initial coverage term and for each renewal
period.
(5) Compensation information. At a minimum, commission schedules or
other documents that detail the applicable commission levels used to
satisfy the requirements of this section must clearly specify
commissions paid by the issuer to an agent or broker for the applicable
plans for which the agent or broker has an appointment with the issuer,
and distinguish between commission payments associated with new
enrollments and such payments for renewed enrollments if the issuer
differentiates compensation for those two types of enrollments. At a
minimum, compensation information must also explain the qualifying
thresholds for the payment of indirect compensation, such as bonuses,
to an agent or broker. If an issuer of individual health insurance
coverage or short-term, limited-duration insurance also offers direct
or indirect compensation that is not captured by the commission
schedule, the issuer must supplement the disclosure of the information
on the commission schedule with additional documentation disclosing
such other compensation.
(d) Reporting requirements--(1) In general. An issuer described in
paragraph (a) of this section must report to the Secretary, in a form
and manner prescribed by the Secretary, any direct and indirect
compensation provided to an agent or broker associated with enrolling
individuals in individual health insurance coverage and short-term,
limited-duration insurance sold by the issuer.
(2) Payments to intermediaries. Reporting must reflect both
compensation arrangements directly between the writing agent or broker
and the issuer and compensation arrangements from the issuer to the
writing agent or broker made through one or more intermediary
organizations, for example, general line agencies or marketing
organizations.
(3) Reporting period. The issuer must report, annually, on direct
and indirect compensation paid to agents and brokers for individual
health insurance coverage and short-term, limited-
[[Page 51771]]
duration insurance effective during the preceding calendar year.
(4) Reporting deadline. The report required under this paragraph
(d) for a specific calendar year must be submitted to HHS no later than
the last business day of July of the calendar year following the
applicable reporting period.
(e) Applicability. The requirements of this section apply with
respect to contracts executed on or after December 27, 2021, between an
agent or broker and a health insurance issuer offering individual
health insurance coverage or short-term, limited-duration insurance, as
applicable. For the purpose of determining the date of contract
execution, the execution of contractual addenda or revisions to the
material terms of a pre-existing contract is deemed the execution of a
new contract.
PART 149--SURPRISE BILLING AND TRANSPARENCY REQUIREMENTS
0
13. The authority citation for part 149 continues to read as follows:
Authority: 42 U.S.C. 300gg-111 through 300gg-139, as amended.
0
14. Section 149.10 is amended by revising paragraph (a) to read as
follows:
Sec. 149.10 Basis and scope.
(a) Basis. This part implements Parts D and E of Title XXVII of the
PHS Act, as well as section 106(a) of the No Surprises Act (Pub. L.
116-260, 134 Stat. 2852).
* * * * *
0
15. Section 149.20 is amended by revising paragraph (a)(1) to read as
follows:
Sec. 149.20 Applicability.
(a) * * *
(1) The requirements in subparts B, C, 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.
* * * * *
0
16. Section 149.30 is amended by adding the definitions of ``Air
ambulance base'' and ``National Provider Identifier (NPI)'' in
alphabetical order to read as follows:
Sec. 149.30 Definitions.
* * * * *
Air ambulance base means a site from which a provider of air
ambulance services operates to provide air ambulance services.
* * * * *
National Provider Identifier (NPI) has the meaning given in 45 CFR
162.406.
* * * * *
0
17. Add subpart C to read as follows:
Subpart C--Transparency and Reporting Requirements for the Group
and Individual Health Insurance Markets
Sec.
149.210--149.220 [Reserved]
149.230 Reporting requirements regarding air ambulance services for
plans and issuers.
Sec. Sec. 149.210-149.220 [Reserved]
Sec. 149.230 Reporting requirements regarding air ambulance services
for plans and issuers.
(a) Reporting requirements--(1) General requirements. A group
health plan or health insurance issuer offering group or individual
health insurance coverage must submit to the Secretary a report that
includes the information described in paragraph (b) of this section for
calendar years 2022 and 2023.
(2) Timing and form of report. The reports reflecting the data for
each of the 2022 and 2023 calendar year reporting periods must be
submitted to the Secretary by March 31, 2023, and by March 30, 2024,
respectively, in the form and manner prescribed by the Secretary in
guidance. The report must include data relevant to services furnished
within the reporting period as well as data relevant to services for
which payments were made within the reporting period.
(3) Transfer of business. A health insurance issuer offering group
or individual health insurance coverage that acquires a line or block
of business from another issuer offering group or individual health
insurance coverage must submit the information required in paragraph
(b) of this section on behalf of the acquired business, for the entire
calendar year during which the acquisition took place. The reporting
requirement in this paragraph (a)(3) also applies to the selling and
acquiring issuers if a sale or transfer occurs as a result of issuers
being merged, combined, spun off, affected by, or engaging in any
similar transaction during a calendar year. To ensure completeness and
timeliness of reporting of all relevant air ambulance services data,
the Secretary may provide in guidance additional examples of what
constitutes a transfer or acquisition for purposes of this paragraph
(a)(3).
(b) Required data elements. The report required in paragraph (a) of
this section must include the following data elements with respect to
air ambulance services provided under a group health plan or group or
individual health insurance coverage to participants, beneficiaries, or
enrollees during the relevant reporting period, for each claim for air
ambulance services that was received or paid for during the reporting
period:
(1) Identifying information for any group health plan, plan
sponsor, or issuer, and any entity reporting on behalf of the plan or
issuer, as applicable.
(2) Market type for the plan or coverage (individual, large group,
small group, self-insured plans offered by small employers, self-
insured plans offered by large employers, and Federal Employees Health
Benefits).
(3) Date of service.
(4) Billing NPI information.
(5) Current Procedural Terminology (CPT) code or Healthcare Common
Procedure Coding System (HCPCS) code information.
(6) Transport information (including aircraft type, loaded miles,
pick-up (origin zip code) and drop-off (destination zip code)
locations, whether the transport was emergent or non-emergent, whether
the transport was an inter-facility transport, and, to the extent this
information is available to the plan or issuer, the service delivery
model of the provider (such as government-sponsored (Federal, State,
county, city/township, other municipal), public-private partnership,
tribally-operated program in Alaska, hospital-owned or sponsored
program, hospital independent partnership (hybrid) program,
independent).
(7) Whether the provider had a contract with the group health plan
or issuer of group or individual health insurance coverage, as
applicable, to furnish air ambulance services under the plan or
coverage, respectively.
(8) Claim adjudication information, including whether the claim was
paid, denied, appealed; denial reason; and appeal outcome.
(9) Claim payment information, including submitted charges, amounts
paid by each payor, and cost sharing amount, if applicable.
(c) Special rules to prevent unnecessary duplication--(1) Special
rule for insured group health plans. To the extent coverage under a
group health plan consists of group health insurance coverage, the plan
satisfies the requirements of paragraph (a) of this section if the plan
requires the health insurance issuer offering the coverage to report
the information required by this section pursuant to a written
agreement.
[[Page 51772]]
Accordingly, if a health insurance issuer and a group health plan
sponsor enter into a written agreement under which the issuer agrees to
report the information required under paragraph (a) of this section in
compliance with this section, and the issuer fails to do so, then the
issuer, but not the plan, violates the reporting requirements of
paragraph (a) of this section.
(2) Other contractual arrangements. A group health plan or issuer
of group or individual health insurance coverage may satisfy the
requirements under paragraph (a) of this section by entering into a
written agreement under which another party (such as a third-party
administrator or health care claims clearinghouse) reports the
information required in paragraph (a) of this section in compliance
with this section. Notwithstanding the preceding sentence, if a group
health plan or health insurance issuer chooses to enter into such an
agreement and the party with which it contracts fails to provide the
information in accordance with this section, the plan or issuer
violates the reporting requirements of paragraph (a) of this section.
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18. Section 149.460 is added to read as follows:
Sec. 149.460 Reporting requirements regarding air ambulance services
for providers of air ambulance services.
(a) Reporting requirements--(1) General requirements. A provider of
air ambulance services must submit to the Secretary a report which
includes the information described in paragraph (b) of this section for
calendar years 2022 and 2023.
(2) Timing and form of report. The reports reflecting the data for
each of the 2022 and 2023 calendar year reporting periods must be
submitted to the Secretary by March 31, 2023, and by March 30, 2024,
respectively, in the form and manner prescribed by the Secretary in
guidance. The report must include data relevant to services furnished
within the reporting period as well as data relevant to services for
which payments were made within the reporting period.
(3) Transfer of business. A provider of air ambulance services that
acquires a line or block of business from another provider of air
ambulance services must submit the information required in paragraph
(b) of this section on behalf of the acquired business, for the entire
calendar year during which the acquisition took place. The reporting
requirement in this paragraph (a)(3) also applies to the selling and
acquiring providers of air ambulance services if a sale or transfer
occurs as a result of providers of air ambulance services being merged,
combined, spun off, affected by, or engaging in any similar transaction
during a calendar year. To ensure completeness and timeliness of
reporting of all relevant air ambulance services data, the Secretary
may provide in guidance additional examples of what constitutes a
transfer or acquisition for purposes of this paragraph (a)(3).
(b) Required data elements. The report required in paragraph (a) of
this section must include the following data:
(1) Corporate information. Each provider of air ambulance services
must report the following information about their company or
organization:
(i) Identifying information for the company or organization.
(ii) Identifying information for the parent organization, owner,
other proprietor, or sponsor of the provider of air ambulance services.
(iii) Information on all air ambulance bases owned, leased,
operated, or used by the provider of air ambulance services.
(iv) NPIs registered to the provider of air ambulance services.
(2) Air ambulance base information. The following information must
be reported separately for each air ambulance base owned, leased, or
operated by the provider of air ambulance services:
(i) Location (City and State of the air ambulance base).
(ii) NPIs associated with the base.
(iii) Number, type, and other characteristics of the aircraft
located on the base;
(iv) The number and type of staff.
(v) The number and type of air ambulance responses and transports
per aircraft.
(vi) Total air ambulance responses per base and total air ambulance
responses that did not result in transports.
(vii) Information regarding any contracts the provider has with
group health plans or health insurance issuers to furnish air ambulance
services associated with the base.
(viii) Air medical subscriptions or ambulance/emergency medical
service membership programs associated with the base.
(ix) Non-direct payor contracts (such as waiver, rental, lease, or
supplemental arrangements) with group health plans, health insurance
issuers, or other entities, such as third-party administrators or
provider networks, associated with the base.
(x) Service delivery model(s) (such as government-sponsored
(Federal, State, county, city/township, other municipal), public-
private partnership, tribally-operated program in Alaska, hospital-
owned or sponsored program, hospital independent partnership (hybrid)
program, independent), and whether the base shares operational costs
with affiliated or sponsor organizations (such as a hospital or
municipality), if applicable.
(xi) Whether the base operates ground ambulance services as well as
air ambulance services.
(3) Cost information. The following information must be reported
separately for each air ambulance base described in paragraph (b)(2) of
this section, as well as at the regional or corporate level, if
applicable:
(i) Labor costs.
(ii) Facility costs.
(iii) Vehicle costs.
(iv) Equipment and supplies costs.
(v) Vendor costs.
(vi) Overhead costs (including administrative and general expenses,
insurance costs, and training costs).
(4) Revenue information. The following information must be reported
separately for each air ambulance base described in paragraph (b)(2) of
this section, as well as at the regional or corporate level, if
applicable:
(i) Revenue from paid air ambulance transports, by payor type
(including Medicare fee-for-service (FFS), Medicare Advantage,
Medicaid, Veterans' Health Administration, TRICARE, Indian Health
Service, group health plan, health insurance issuer, Federal Employees
Health Benefits plan, Worker's Compensation, patient cost sharing, or
patient self-pay).
(ii) Revenue from other sources including, but not limited to:
Contracts with facilities such as hospitals, prisons, and nursing
homes; revenue from emergency air medical services other than for
transports (such as transportation of medical personnel or equipment);
revenue from sub-contracted ambulance services; fees for standby
events; payments from non-direct contracts such as waiver, rental,
lease, and supplemental arrangements; air medical subscriptions and
ambulance or emergency medical service membership programs; charitable
donations and foundation funding; program-related investments; receipt
of local taxes earmarked for emergency medical services; contract
revenues from local governments in return for air ambulance services;
enterprise funds and utility rates; sales of assets and services; bond
or debt financing; State or local donation of vehicles or durable
equipment; or funding grants or the provision of time-limited funding
from a government
[[Page 51773]]
(including Federal, State, local, or other)).
(5) Transport information. The following information must be
reported separately for each air ambulance transport provided during
the reporting period:
(i) Date of service.
(ii) Billing NPI information.
(iii) Current Procedural Terminology (CPT) code or Healthcare
Common Procedure Coding System (HCPCS) code information.
(iv) Air ambulance base.
(v) Loaded miles.
(vi) Pick-up (origin zip code) and drop-off (destination zip code)
locations.
(vii) Duration of flight.
(viii) Whether the transport was emergent or non-emergent.
(ix) Whether the transport was a scene response, inter-facility, or
other transport;
(x) Primary payor information, including payor type (such as
Medicare FFS, Medicare Advantage, Medicaid, Veterans' Health
Administration, TRICARE, Indian Health Service, group health plan,
health insurance issuer, Federal Employees Health Benefits plan,
Workers' Compensation, patient cost-sharing, or patient self-pay).
(xi) Information regarding any contracts the provider has with the
group health plan or health insurance issuer, if and as applicable, to
provide air ambulance services under the plan or coverage,
respectively.
(xii) Payment methodology (such as base rate, mileage, and
intervention or other charges), if applicable.
(xiii) Claim adjudication information, including whether the claim
was paid, denied, appealed, denial reason, and appeal outcome, if
applicable.
(xiv) Claim/transport payment information, including submitted
charges, amount paid by payor other than patient, cost-sharing amount
(if applicable), amount billed to patient, amount collected from
patient, whether the bill was referred to collections, and payments
from sources other than the primary payor.
PART 150--CMS ENFORCEMENT OF GROUP AND INDIVIDUAL INSURANCE MARKET,
AND PROVIDER AND FACILITY REQUIREMENTS
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19. The authority citation for part 150 is revised to read as follows:
Authority: 42 U.S.C. 300gg through 300gg-63, 300gg-91, 300gg-
92, 300gg-118, and 300gg-134, as amended.
0
20. The heading for part 150 is revised to read as set forth above.
0
21. Section 150.101 is amended by revising paragraphs (a) and (b)(2)
and adding paragraph (b)(3) to read as follows:
Sec. 150.101 Basis and scope.
(a) Basis. This part implements CMS's enforcement authority under
sections 2723, 2761, and 2799B-4 of the PHS Act, as well as section
106(e) of the No Surprises Act (Pub. L. 116-260, 134 Stat. 2852).
(b) * * *
(2) Enforcement with respect to health insurance issuers. The
States have primary enforcement authority with respect to the
requirements of Title XXVII of the PHS Act that apply to health
insurance issuers offering coverage in the group or individual health
insurance market. If CMS determines under subpart B of this part that a
State is not substantially enforcing Title XXVII of the PHS Act,
including the implementing regulations in parts 146, 147, 148, and 149
of this subchapter, CMS enforces them under subpart C of this part.
(3) Enforcement with respect to providers and facilities. The
States have primary enforcement authority with respect to the
requirements of Part E of Title XXVII of the PHS Act that apply to
providers and facilities. If CMS determines under subpart B of this
part that a State is not substantially enforcing Part E of Title XXVII
of the PHS Act, and its implementing regulations in part 149 of this
subchapter, CMS enforces them under subpart E of this part. CMS has
primary enforcement authority with respect to the provisions of section
106(a) of the No Surprises Act, including the implementing regulations
in part 149 of this subchapter, which CMS enforces under subpart E of
this part.
0
22. Section 150.103 is amended by--
0
a. Revising the introductory text;
0
b. Adding the definition of ``Facility'' in alphabetical order;
0
c. In the definition of ``Individual health insurance policy or
individual policy,'' revising the introductory text and paragraph (2);
0
d. Revising the definition of ``PHS Act requirements;'' and
0
e. Adding the definitions ``Provider'' in alphabetical order.
The revisions and additions read as follows:
Sec. 150.103 Definitions.
The definitions that appear in parts 144 and 149 of this subchapter
apply to this part unless stated otherwise. As used in this part:
* * * * *
Facility means a health care facility, an emergency department of a
hospital, and an independent freestanding emergency department, as
those terms are defined in Sec. 149.30 of this subchapter, and any
other facility subject to the requirements in Part E of Title XXVII of
the PHS Act.
* * * * *
Individual health insurance policy or individual policy means the
legal document or contract issued by an issuer to an individual that
contains the conditions and terms of the insurance. Any association or
trust arrangement that is not a group health plan as defined in Sec.
144.103 of this subchapter or does not provide coverage in connection
with one or more group health plans is individual health insurance
coverage subject to the requirements of parts 147, 148, and 149 of this
subchapter. The term ``individual health insurance policy'' includes a
policy that is--
* * * * *
(2) Administered, or placed in a trust, and is not sold in
connection with a group health plan subject to the provisions of parts
146, 147, and 149 of this subchapter.
PHS Act requirements means the requirements of Title XXVII of the
PHS Act and its implementing regulations in parts 146, 147, 148, and
149 of this subchapter.
* * * * *
Provider means a physician or other health care provider as defined
in Sec. 149.30 of this subchapter, and a provider of air ambulance
services as defined in Sec. 149.30 of this subchapter.
* * * * *
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23. Revise the heading for subpart B to read as follows:
Subpart B--CMS Enforcement Processes for Determining Whether States
Are Failing to Substantially Enforce PHS Act Requirements
0
24. Section 150.201 is revised to read as follows:
Sec. 150.201 State enforcement.
Except as provided in subparts C and E of this part, each State
enforces PHS Act requirements with respect to health insurance issuers
that issue, sell, renew, or offer health insurance coverage in the
State and with respect to providers and facilities that furnish items
or services to individuals in the State.
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25. Section 150.203 is amended by revising the introductory text to
read as follows:
Sec. 150.203 Circumstances requiring CMS enforcement.
CMS enforces PHS Act requirements to the extent warranted (as
determined
[[Page 51774]]
by CMS) in any of the following circumstances:
* * * * *
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26. Section 150.205 is amended by revising paragraphs (d) and (e)(2) to
read as follows:
Sec. 150.205 Sources of information triggering an investigation of
State enforcement.
* * * * *
(d) Information from the governors; commissioners of insurance, or
chief insurance regulatory officials, or officials responsible for
regulating health maintenance organizations (HMOs) of the various
States; and directors of public health or any other State department,
agency, or board of the various States with applicable oversight
authority regarding the status of their enforcement of PHS Act
requirements.
(e) * * *
(2) Not pre-empted as provided in Sec. 146.143 (relating to group
market provisions) and Sec. 148.210 (relating to individual market
requirements) on the basis that they prevent the application of a PHS
Act requirement.
* * * * *
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27. Section 150.211 is amended by revising paragraph (b) and adding
paragraph (d) to read as follows:
Sec. 150.211 Notice to the State.
* * * * *
(b) If the alleged failure involves a health insurance issuer, the
insurance commissioner or chief insurance regulatory official.
* * * * *
(d) If the alleged failure involves a provider or facility, the
official responsible for regulating such provider or facility, if
different from the officials listed in paragraphs (b) and (c) of this
section.
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28. Section 150.221 is amended by revising paragraphs (a)(2) and (b) to
read as follows:
Sec. 150.221 Transition to State enforcement.
(a) * * *
(2) Instructions to issuers, providers, and facilities, as
applicable.
* * * * *
(b) CMS may also negotiate a process to ensure that, to the extent
practicable, as permitted by law, and as applicable, its records
documenting issuer, provider, and facility compliance and other
relevant areas of CMS's enforcement operations are made available to
the State regulatory authority that will assume enforcement
responsibility.
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29. Section 150.303 is amended by revising the section heading and
paragraphs (a) introductory text, (a)(2), and (c) to read as follows:
Sec. 150.303 Basis for initiating an investigation or examination.
(a) Information. Any information that indicates that any issuer may
be failing to meet the PHS Act requirements or that any group health
plan that is a non-Federal governmental plan may be failing to meet an
applicable PHS Act requirement, may warrant an investigation or market
conduct examination at CMS's discretion. An investigation or
examination may include a review of any information CMS identifies as
relevant to determine if a violation of the PHS Act has occurred. CMS
may consider, but is not limited to considering, the following sources
or types of information to determine if an investigation or market
conduct examination is warranted:
* * *
(2) Reports from providers and facilities, State insurance
departments, the National Association of Insurance Commissioners, and
other Federal and State agencies.
* * *
(c) Random and targeted investigations and market conduct
examinations. CMS may conduct random or targeted investigations or
market conduct examinations to ensure that health insurance issuers
offering health insurance coverage in the individual or group markets,
and non-Federal governmental plans, are in compliance with applicable
PHS Act requirements.
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30. Section 150.307 is amended by revising the introductory text and
paragraphs (a) and (b) and adding paragraph (d) to read as follows:
Sec. 150.307 Notice to responsible entities.
If information received under Sec. 150.303(a) indicates a
potential violation, or if CMS selects an issuer or non-Federal
governmental plan for investigation under Sec. 150.303(c), CMS
provides written notice to the responsible entity or entities
identified under Sec. 150.305. The notice does the following:
(a) Describes the information received under Sec. 150.303(a) that
gave rise to the investigation, or notifies the responsible entity that
it was selected by CMS for investigation under Sec. 150.303(c) and
identifies the PHS Act requirements that are the focus of the
investigation, as applicable.
(b) Provides the date by which the responsible entity or entities
must respond and provide any documentation CMS identifies as relevant
for purposes of an investigation, and by which the responsible entity
or entities can provide additional information, including documentation
of compliance as described in Sec. 150.311, that, in the responsible
entity's view, will aid CMS in evaluating the entity's compliance with
the PHS Act requirements identified in the notice.
* * * * *
(d) States that CMS may require a plan of corrective action.
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31. Section 150.309 is revised to read as follows:
Sec. 150.309 Request for extension.
In circumstances in which an entity cannot prepare a response to
CMS or provide the requested information by the deadline provided in
the notice under Sec. 150.307, the entity may submit a written request
for an extension from CMS detailing the reason for the extension
request and showing good cause. Examples of what CMS would consider
good cause include, but are not limited to, when a responsible entity
indicates it has limited staffing resources to prepare a response, or
when a responsible entity requests clarification from CMS regarding its
request for information. If CMS grants the extension, the responsible
entity must respond to the notice within the time frame specified in
CMS's letter granting the extension of time. Failure to respond within
the initial deadline provided in the notice, or within any extended
time frame, may result in CMS's imposition of a civil money penalty
based upon the complaint or other information alleging or indicating a
violation of PHS Act requirements.
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32. Section 150.311 is amended by revising paragraph (e) to read as
follows:
Sec. 150.311 Responses to allegations of noncompliance.
* * * * *
(e) Documentation of the entity's issuance of conforming policies,
certificates of insurance, plan documents, or amendments to
policyholders or certificate holders before the issuance of the notice
to the responsible entity or entities described in Sec. 150.307 or
Sec. 150.313(e).
* * * * *
0
33. Section 150.313 is amended by revising paragraphs (b), (c), and (e)
and adding paragraphs (f), (g), (h), and (i) to read as follows:
Sec. 150.313 Market conduct examinations.
* * * * *
(b) General. If, based on the information described in Sec.
150.303(a), CMS finds evidence that a responsible entity may be in
violation of a PHS Act
[[Page 51775]]
requirement, or if CMS randomly selects an issuer or non-Federal
governmental plan for examination under Sec. 150.303(c), CMS may
initiate a market conduct examination to ensure the entity is in
compliance with applicable PHS Act requirements. CMS may conduct the
examination either at the site of the issuer or other responsible
entity, or a site CMS selects.
(c) Appointment of examiners. When CMS identifies an issue that
warrants further review or randomly selects an issuer or non-Federal
governmental plan for examination, CMS will appoint one or more
examiners to perform the examination and instruct them as to the scope
of the examination.
* * * * *
(e) Initiation of examination. CMS initiates an examination by
providing written notice to the responsible entity. The notice does the
following:
(1) Describes the information received under Sec. 150.303(a) that
served as the basis for CMS's determination that a market conduct
examination is warranted, or notifies the responsible entity that it
was selected by CMS for examination under Sec. 150.303(c), as
applicable;
(2) Describes the scope of the examination;
(3) Identifies the examiners;
(4) States that a civil money penalty may be assessed; and
(5) States that CMS may require a plan of corrective action.
(f) Documentation requests; extension of time. The responsible
entity must forward to the site of examination any documentation CMS
identifies as relevant for purposes of the examination. CMS will
provide the responsible entity with an opportunity to provide
additional information, including documentation of compliance as
described in Sec. 150.311, that the responsible entity believes will
aid CMS in conducting the examination. This initial request will
provide the responsible entity the date by which to forward the
specified documentation to the location that CMS identifies. In
circumstances in which an entity cannot prepare a response and provide
the requested information to CMS by the deadline provided in the
initial request, the entity may make a written request for an extension
from CMS detailing the reason for the extension request and showing
good cause. Examples of what CMS would consider good cause include, but
are not limited to, when a responsible entity indicates it has limited
staffing resources to prepare a response, or when a responsible entity
requests clarification from CMS regarding its request for information.
If CMS grants the extension, the responsible entity must respond to the
documentation request within the time frame specified in CMS's letter
granting the extension request. Failure to respond by the deadline
provided in the initial request, or within the extended time frame, may
result in CMS's imposition of a civil money penalty based upon the
complaint or other information alleging or indicating a potential
violation of applicable PHS Act requirements.
(g) Field work. CMS will review the documentation submitted under
paragraph (f) of this section. During the course of the examination,
CMS may request additional information or documentation and will
specify in the request the time frame allotted for providing it. In
circumstances in which an entity cannot prepare a response and provide
the requested information to CMS within the allotted time frame, the
entity may submit to CMS a written request for an extension from CMS
detailing the reason for the extension request and showing good cause.
Examples of what CMS would consider good cause include, but are not
limited to, when a responsible entity indicates it has limited staffing
resources to prepare a response, or when a responsible entity requests
clarification from CMS regarding its request for information. If CMS
grants the extension, the responsible entity must respond to the
documentation request within the time frame specified in CMS's letter
granting the extension request. Failure to respond and provide such
additional documentation to CMS within the allotted time frame, or
within an extended time frame as granted by CMS, may result in CMS's
imposition of a civil money penalty based upon the complaint or other
information alleging or indicating a potential violation of applicable
PHS Act requirements. During the course of the examination, upon review
of the documentation submitted, CMS may identify and notify the
responsible entity of any potential PHS Act violations and provide the
responsible entity an opportunity to respond with additional
information, including documentation of compliance as described in
Sec. 150.311, that the responsible entity believes demonstrates
compliance or will otherwise aid CMS in conducting the examination.
(h) Draft report of market conduct examination--(1) Contents of
report. CMS will, upon completion of the examination, provide to the
responsible entity a draft examination report that will include the
scope of the examination, any findings of a PHS Act violation, and any
proposed actions the responsible entity would need to take to correct
such violation.
(2) Response from the responsible entity. With respect to each
examination issue identified in the draft examination report, the
responsible entity may:
(i) Concur, in whole or in part, with CMS's position(s) as outlined
in the draft examination report, explaining any corrective actions that
have been or will be implemented; or
(ii) Dispute, in whole or in part, CMS's position(s), clearly
outlining the basis for its dispute and submitting illustrative
examples where appropriate.
(i) Final report of market conduct examination. Upon receipt of a
response from the responsible entity under paragraph (h)(2) of this
section, CMS will provide to the responsible entity a final examination
report containing CMS's findings relevant to each examination issue
that will consist of one or more of the following:
(1) CMS's concurrence with the responsible entity's position;
(2) CMS's disagreement with the responsible entity's position;
(3) CMS's determination that any corrective actions implemented by
the responsible entity sufficiently addressed the identified PHS Act
violation;
(4) CMS's determination that the corrective actions implemented by
the responsible entity have not sufficiently addressed the identified
PHS Act violation, and information on any further corrective actions
deemed necessary by CMS; or
(5) Notice to the responsible entity that has disagreed with a CMS
finding and that has not undertaken corrective actions that there
exists a violation of applicable PHS Act requirements and any actions
the responsible entity must take prospectively to correct such
violation.
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34. Section 150.319 is amended by revising paragraph (a)(1) to read as
follows:
Sec. 150.319 Determining the amount of the penalty--mitigating
circumstances.
* * * * *
(a) * * *
(1) Before receipt of the notice issued under Sec. 150.307 or
Sec. 150.313(e), implemented and followed a compliance plan as
described in Sec. 150.311(f).
* * * * *
0
35. Section 150.321 is amended by adding paragraph (d) to read as
follows:
Sec. 150.321 Determining the amount of penalty--aggravating
circumstances.
* * * * *
[[Page 51776]]
(d) The entity fails to cooperate with a CMS investigation or
market conduct examination.
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36. Section 150.325 is revised to read as follows:
Sec. 150.325 Settlement authority.
Nothing in Sec. Sec. 150.315 through 150.323 limits the authority
of CMS to settle any issue or case described in the notice furnished in
accordance with Sec. 150.307 or Sec. 150.313(e), or to compromise on
any penalty provided for in Sec. Sec. 150.315 through 150.323.
0
37. Section Sec. 150.401 is amended by revising the definition of
``Respondent'' to read as follows:
Sec. 150.401 Definitions.
* * * * *
Respondent means an entity that received a notice of proposed
assessment of a civil money penalty issued pursuant to Sec. 150.343 or
Sec. 150.515.
0
38. Section 150.405 is amended by revising paragraph (a) to read as
follows:
Sec. 150.405 Filing of request for hearing.
(a) A respondent has a right to a hearing before an ALJ if it files
a request for hearing that complies with Sec. 150.407(a), within 30
days after the date of issuance of either CMS's notice of proposed
determination under Sec. 150.343 or Sec. 150.515, or notice that an
alternative dispute resolution process has terminated. The request for
hearing must be addressed as instructed in the notice of proposed
determination. ``Date of issuance'' is five (5) days after the filing
date, unless there is a showing that the document was received earlier.
* * * * *
0
39. Section 150.417 is amended by revising paragraph (b)(1) to read as
follows:
Sec. 150.417 Issues to be heard and decided by ALJ.
* * * * *
(b) * * *
(1) Applies the factors that are identified in Sec. 150.317 or
Sec. 150.513.
* * * * *
0
40. Section 150.445 is amended by revising paragraphs (g), (h), and (j)
to read as follows:
Sec. 150.445 Evidence.
* * * * *
(g) Evidence of acts other than those at issue in the instant case
is admissible in determining the amount of any civil money penalty if
those acts are used under Sec. 150.317, Sec. 150.323, or Sec.
150.513 to consider the entity's prior record of compliance, to show
motive, opportunity, intent, knowledge, preparation, identity, or lack
of mistake. This evidence is admissible regardless of whether the acts
occurred during the statute of limitations period applicable to the
acts that constitute the basis for liability in the case and regardless
of whether CMS's notice sent in accordance with Sec. 150.307, Sec.
150.313(e), Sec. 150.343, Sec. 150.505, or Sec. 150.515 referred to
them.
(h) The ALJ will permit the parties to introduce rebuttal witnesses
and evidence, and to cross-examine witnesses.
* * * * *
(j) The ALJ may not consider evidence regarding the willingness and
ability to enter into and successfully complete a corrective action
plan when that evidence pertains to matters occurring after CMS's
notice under Sec. 150.307, Sec. 150.313(e), or Sec. 150.505.
0
41. Section 150.455 is amended by adding paragraph (b)(9) to read as
follows:
Sec. 150.455 Sanctions.
* * * * *
(b) * * *
(9) In the case of a violation of part 149 of this subchapter,
ordering the party or attorney to pay attorneys' fees and other costs
caused by the failure or misconduct.
0
42. Add subpart E to read as follows:
Subpart E--CMS Enforcement with Respect to Providers and Facilities
Sec.
150.501 General rule regarding the imposition of civil money
penalties.
150.503 Basis for initiating an investigation; injunctive relief.
150.505 Notice to providers or facilities.
150.507 Request for extension.
150.509 Responses to allegations of noncompliance.
150.511 Liability for penalties.
150.513 Amount of penalty.
150.515 Notice of proposed determination.
150.517 Hearing.
150.519 Failure to request a hearing.
150.521 Collateral estoppel.
150.523 Judicial review.
150.525 Notice to other agencies.
Subpart E--CMS Enforcement with Respect to Providers and Facilities
Sec. 150.501 General rule regarding the imposition of civil money
penalties.
(a) If any provider or facility that is subject to CMS's
enforcement authority under Sec. 150.101(b)(3) fails to comply with a
requirement in Title XXVII, Part E of the PHS Act, such provider or
facility may be subject to a civil money penalty as described in this
subpart.
(b) If any provider of air ambulance services fails to timely
submit the information required in section 106(a) of the No Surprises
Act, such provider may be subject to a civil money penalty as described
in this subpart.
Sec. 150.503 Basis for initiating an investigation; injunctive
relief.
(a) Basis for investigation. Any information that indicates that
any provider or facility may be failing to meet the PHS Act
requirements or submit the information required in section 106(a) of
the No Surprises Act may warrant an investigation at CMS's discretion.
An investigation may include a review of any information CMS identifies
as relevant to determine if a violation of the PHS Act or section
106(a) of the No Surprises Act has occurred. CMS may consider, but is
not limited to considering, the following sources or types of
information to determine if an investigation is warranted:
(1) Complaints.
(2) Reports from plans or issuers, State insurance departments,
State health departments, medical boards, the National Association of
Insurance Commissioners, and any other Federal or State agencies.
(3) Any other information that indicates potential noncompliance
with PHS Act requirements or section 106(a) of the No Surprises Act.
(b) Who may file a complaint. Any aggrieved entity or individual,
or any entity or personal representative acting on that individual or
entity's behalf, may file a complaint with CMS if he or she believes
that a right to which the aggrieved individual or entity is entitled
under PHS Act requirements is being, or has been, denied or abridged as
a result of any action or failure to act on the part of a provider or
facility.
(c) Random and targeted investigations. CMS may conduct random or
targeted investigations to ensure that providers and facilities are in
compliance with applicable PHS Act requirements and section 106(a) of
the No Surprises Act.
(d) Injunctive relief. Whenever CMS has reason to believe that any
provider or facility has engaged, is engaging, or is about to engage in
any activity which makes such provider or facility subject to a civil
money penalty under this subpart, CMS may bring an action in an
appropriate district court of the United States (or, if applicable, a
United States court of any territory) to enjoin such activity, or to
enjoin the provider or facility from concealing, removing, encumbering,
or disposing of assets which may be required in order to pay a civil
money penalty if any such penalty were to be imposed or to seek other
appropriate relief.
[[Page 51777]]
Sec. 150.505 Notice to providers or facilities.
If CMS receives information under Sec. 150.503(a) that indicates a
potential violation of the PHS Act or section 106(a) of the No
Surprises Act, or if CMS selects a provider or facility for
investigation under Sec. 150.503(c), CMS provides written notice to
the provider or facility. The notice does the following:
(a) Describes the information received under Sec. 150.503(a) that
gives rise to the potential violation, notifies the provider or
facility that it was selected by CMS for investigation under Sec.
150.503(c) and the PHS Act requirements that are the focus of the
investigation, or describes the data that was required under section
106(a) of the No Surprises Act and the implementing regulations in part
149 of this subchapter but not submitted by a provider of air ambulance
services, as applicable.
(b) Provides the date by which the provider or facility must
respond and forward any documentation CMS identifies as relevant for
purposes of an investigation, including overdue data regarding air
ambulance services, and can provide additional information, including
documentation of compliance as described in Sec. 150.509 that, in the
provider or facility's view, will aid CMS in evaluating the entity's
compliance with the PHS Act or No Surprises Act requirements identified
in the notice.
(c) States that a civil money penalty may be assessed should the
entity be found to be out of compliance with applicable PHS Act
requirements or section 106(a) of the No Surprises Act.
(d) States that CMS may require a plan of corrective action.
Sec. 150.507 Request for extension.
In circumstances in which a provider or facility cannot prepare a
response to CMS or provide the requested information by the deadline
provided in the notice under Sec. 150.505, the provider or facility
may make a written request for an extension from CMS detailing the
reason for the extension request and showing good cause. Examples of
what CMS would consider good cause include, but are not limited to,
when a responsible entity indicates it has limited staffing resources
to prepare a response, or when a responsible entity requests
clarification from CMS regarding its request for information. If CMS
grants the extension, the provider or facility must respond to the
notice within the time frame specified in CMS's letter granting the
extension of time. Failure to respond within the initial deadline
provided in the notice, or within the extended time frame, may result
in CMS's imposition of a civil money penalty based upon the complaint
or other information alleging or indicating a violation of PHS Act
requirements or section 106(a) of the No Surprises Act.
Sec. 150.509 Responses to allegations of noncompliance.
In determining whether to impose a civil money penalty, CMS reviews
and considers documentation provided in any complaint or other
information, as well as any additional information provided by the
provider or facility to demonstrate that it has complied with relevant
requirements. The following are examples of documentation that a
provider or facility may submit for CMS's consideration in determining
whether a civil money penalty should be assessed and the amount of any
civil money penalty:
(a) Any documentation indicating a provider or facility complied
with the requirements in part 149 of this subchapter, including but not
limited to claims, medical bills, notice and consent forms,
disclosures, data related to air ambulance services, or any other
documents if those documents form the basis of a complaint or
allegation of noncompliance, or the basis for the provider or facility
to refute the complaint or allegation.
(b) Any other evidence that refutes an allegation of noncompliance.
(c) Evidence that the provider or facility did not know, and
exercising due diligence could not have known, of the violation, and,
if applicable, that the provider or facility undertook a corrective
action, such as withdrawing the bill that was in violation and
reimbursing the health plan or participant, beneficiary, or enrollee
for any payment received in response to the bill that was withdrawn.
(d) Evidence documenting the development and implementation of
internal policies and procedures by a provider or facility to ensure
compliance with PHS Act requirements and section 106(a) of the No
Surprises Act, as applicable. Those policies and procedures may include
or consist of a voluntary compliance program. Any such program must do
the following:
(1) Effectively articulate and demonstrate the fundamental mission
of compliance and the provider or facility's commitment to the
compliance process.
(2) Include the name of an individual responsible for compliance.
(3) Describe an effective monitoring process designed to identify
practices that do not comply with PHS Act requirements and section
106(a) of the No Surprises Act, as applicable, and to provide
reasonable assurances that noncompliant practices are detected in a
timely manner.
(4) Address procedures to improve internal policies when
noncompliant practices are identified.
(e) Evidence documenting the provider's or facility's record of
previous compliance with PHS Act requirements and section 106(a) of the
No Surprises Act, as applicable.
(f) Evidence documenting a provider of air ambulance services' good
faith efforts to submit missing information that such providers are
required to submit pursuant to Sec. 149.460 of this chapter. This must
include the submission and implementation of a corrective action plan
that does the following:
(1) Identifies the cause underlying the submission of incomplete
data and effectively articulates and demonstrates the measures that
will be taken to submit complete data;
(2) Provides the timeline for submitting complete data;
(3) Provides the name of the individual in the organization
responsible for overseeing the corrective actions and submitting
complete data; and
(4) Addresses procedures to improve internal policies to ensure
that incomplete data reports are identified and completed prior to
submission for future reporting periods.
Sec. 150.511 Liability for penalties.
(a) No action under this part will be entertained unless commenced
within 6 years from the date when the claim was presented, the request
for payment was made, or the violation occurred.
(b) Under this part, a principal is liable for penalties for the
actions of his or her agent acting within the scope of his or her
agency. This paragraph (b) does not limit the underlying liability of
the agent.
Sec. 150.513 Amount of penalty.
(a) Maximum amount. (1) If a provider or facility is found to be in
violation of a PHS Act requirement, CMS may impose a civil money
penalty in an amount not to exceed $10,000 per violation, adjusted
annually under 45 CFR part 102. Penalties imposed under this part are
in addition to any other penalties prescribed or allowed by law.
(2) If a provider of air ambulance services is found to be in
violation of section 106(a) of the No Surprises Act, CMS may impose a
civil money penalty in an amount not to exceed $10,000 per year of
violation, adjusted annually under 45 CFR part 102. Penalties imposed
under this part are in addition
[[Page 51778]]
to any other penalties prescribed or allowed by law.
(b) Factors. Except as otherwise provided in this part, in
determining the amount of any penalty in accordance with this part, CMS
will consider the following factors--
(1) The nature of violations and circumstances under which they
were presented.
(2) The degree of culpability of the provider or facility against
which a civil money penalty is proposed.
(3) The provider or facility's history of prior violations,
including whether at any time before determination of the current
violation or violations, CMS or any State found the provider or
facility liable for civil or administrative sanctions in connection
with a violation of PHS Act requirements or section 106(a) of the No
Surprises Act, as applicable.
(4) The frequency of the violation, taking into consideration
whether any violation is an isolated occurrence, represents a pattern,
or is widespread.
(5) The level of financial and other impacts on affected
individuals.
(6) Such other matters as justice may require.
(c) Mitigating circumstances. For every violation subject to a
civil money penalty, if there are substantial or several mitigating
circumstances, the aggregate amount of the penalty is set at an amount
sufficiently below the maximum permitted in paragraph (a) of this
section to reflect that fact. As guidelines for taking into account the
factors listed in paragraph (b) of this section, CMS considers the
following as mitigating circumstances:
(1) Before receipt of the notice issued under Sec. 150.505, the
provider or facility implemented and followed a compliance plan as
described in Sec. 150.509.
(2) There were no previous complaints of noncompliance against the
provider or facility.
(3) In the case of a provider or facility responsible for an
erroneous bill, the provider or facility made adjustments to business
practices to come into compliance with PHS Act requirements, so that
the following occur:
(i) The provider or facility identified all participants,
beneficiaries and enrollees who are or were wrongly billed.
(ii) The provider or facility withdrew the bill or reimbursed the
affected individuals who were wrongly billed so that, to the extent
practicable, the affected individuals are in the same position that
they would have been in had the violation not occurred.
(iii) The provider or facility completed the adjustments to
business practices in a timely manner.
(4) The provider or facility demonstrated that the violation is an
isolated occurrence.
(d) Aggravating circumstances. For every violation subject to a
civil money penalty, if there are substantial or several aggravating
circumstances, CMS sets the aggregate amount of the penalty at an
amount sufficiently close to or at the maximum permitted by this
section to reflect that fact. CMS considers the following circumstances
to be aggravating circumstances:
(1) The frequency of violation indicates a pattern of widespread
occurrence.
(2) The violation(s) resulted in significant financial and other
impacts on the average affected individual.
(3) The provider or facility does not provide documentation showing
that substantially all of the violations were corrected.
(e) Waiver of the penalty. CMS shall waive a civil money penalty
if:
(1) The provider or facility does not knowingly violate, and
exercising due diligence should not have reasonably known it violated,
part 149 of this subchapter with respect to a participant, beneficiary,
or enrollee, and such provider or facility withdraws the bill that was
in violation of such provision and reimburses the group health plan,
health insurance issuer, or affected individual, as applicable, in an
amount equal to the difference between the amount billed and the amount
allowed to be billed, plus interest at the rate established annually by
the Secretary of the Treasury pursuant to 31 U.S.C. 3717, within 30
days of the violation; or
(2) In the case of a provider of air ambulance services that
submits only part of the information required in Sec. 149.460 of this
subchapter, if the provider demonstrates a good faith effort in working
with the Secretary to submit any missing information.
(f) Settlement authority. Nothing in this section limits the
authority of CMS to settle any issue or case described in the notice
furnished in accordance with Sec. 150.505 or to compromise on any
penalty provided for in Sec. 150.515.
(g) Hardship exemption. The Secretary may establish a hardship
exemption to the penalties under this subpart.
Sec. 150.515 Notice of proposed determination.
(a) If CMS proposes a penalty, in accordance with this subpart, CMS
will serve on the provider or facility, in any manner authorized by
Rule 4 of the Federal Rules of Civil Procedure, written notice of CMS's
intent to impose a penalty. The notice will include:
(1) A description of the PHS Act requirements or the No Surprises
Act requirements that CMS has determined the provider or facility
violated.
(2) A description of any complaint or other information upon which
CMS based its investigation, including the basis for determining the
number of violations.
(3) The amount of the proposed penalty as of the date of the
notice.
(4) Any circumstances described in Sec. 150.513 that were
considered when determining the amount of the proposed penalty.
(5) Instructions for responding to the notice, including:
(i) A specific statement of the provider or facility's right to a
hearing; and
(ii) A statement that failure to request a hearing within 30 days
of receipt of the notice permits the imposition of the proposed penalty
without right of appeal in accordance with Sec. 150.519.
(b) [Reserved]
Sec. 150.517 Hearing.
(a) The provisions found in Sec. Sec. 150.401 through 150.457
shall apply to a hearing conducted under this subpart.
(b) Any provider or facility upon which CMS has proposed the
imposition of a penalty may appeal such proposed penalty by requesting
a hearing before an ALJ in accordance with Sec. 150.405. The form and
content of the request for a hearing must comply with Sec. 150.407.
(c) If the provider or facility fails, within the time period
permitted, to exercise the right to a hearing under this section, the
proposed penalty becomes final.
Sec. 150.519 Failure to request a hearing.
If the provider or facility does not request a hearing within 30
days of the issuance of the notice described in Sec. 150.515, or show
good cause, as determined under Sec. 150.405(b), for failing to timely
exercise its right to a hearing, CMS may assess the proposed civil
money penalty. CMS will notify the provider or facility in any manner
authorized by Rule 4 of the Federal Rules of Civil Procedure of any
penalty that has been assessed and of the means by which the provider
or facility may satisfy the judgment. The provider or facility has no
right to appeal a penalty with respect to which it has not requested a
hearing in accordance with Sec. 150.405.
[[Page 51779]]
Sec. 150.521 Collateral estoppel.
(a) Where a final decision pertaining to the provider or facility's
liability for acts that violate this part has been rendered in any
proceeding in which the provider or facility was a party and had an
opportunity to be heard, the provider or facility shall be bound by
such decision in any proceeding under this part.
(b) In a proceeding under this part, a provider or facility is
estopped from denying the essential elements of a criminal offense if
the proceeding:
(1) Is against a provider or facility which has been convicted
(whether upon a verdict after trial or upon a plea of guilty or nolo
contendere) of a Federal crime charging fraud or false statements; and
(2) Involves the same transactions as in the criminal action.
Sec. 150.523 Judicial review.
(a) Any provider or facility against which a final decision
imposing a civil money penalty is entered by the ALJ pursuant to this
subpart may obtain review in the United States Court of Appeals for the
circuit in which the person resides, or where the violation occurred,
by filing in such court (within 60 days following the date on which
such decision becomes final) a written petition requesting the decision
be modified or set aside. Such review will be conducted pursuant to
section 1128A(e) of the Social Security Act.
(b) A provider or facility must exhaust all administrative appeal
procedures established under this part before the provider or facility
may bring an action in Federal court, as provided in section 1128A(e)
of the Social Security Act, concerning any penalty imposed pursuant to
this part.
(c) Administrative remedies are exhausted on the date an ALJ's
initial decision becomes final under Sec. 150.453, or the date of the
Administrator's decision affirming, reversing, modifying, or remanding
the ALJ's initial decision under Sec. 150.457, as applicable.
(d) After the clerk of the court transmits a copy of the petition
specified in paragraph (a) of this section to the Secretary, the
Secretary will file in the Court the record in the proceeding as
provided in section 2112 of Title 28, United States Code.
Sec. 150.525 Notice to other agencies.
Whenever a penalty becomes final, the Secretary will notify the
following organizations and entities about such action and the reasons
for it: The appropriate State or local medical or professional
association, the State Department of Health, the appropriate State or
local licensing agency or organization, and the appropriate utilization
and quality control peer review organization. The Secretary may
additionally notify the following entities, as appropriate: The State
Department of Insurance or similar agency, the State Attorney General,
the Secretary of Labor, the Secretary of the Treasury, or the Director
of the U.S. Office of Personnel Management.
[FR Doc. 2021-19797 Filed 9-10-21; 5:00 pm]
BILLING CODE 6523-63-P; 4120-01-P; 4830-01-P; 4510-29-P