[Federal Register Volume 86, Number 192 (Thursday, October 7, 2021)]
[Rules and Regulations]
[Pages 55980-56142]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-21441]



[[Page 55979]]

Vol. 86

Thursday,

No. 192

October 7, 2021

Part III





Office of Personnel Management

Department of the Treasury





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





Internal Revenue Service





Department of Labor





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





Employee Benefits Security Administration





Department of Health and Human Services





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





5 CFR Part 890

26 CFR Part 54

29 CFR Parts 2510 and 2590

45 CFR Parts 147 and 149





Requirements Related to Surprise Billing; Part II; Interim Final Rule

Federal Register / Vol. 86, No. 192 / Thursday, October 7, 2021 / 
Rules and Regulations

[[Page 55980]]


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

OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 890

RIN 3206-AO29

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

[TD 9955]
RIN 1545-BQ05

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Parts 2510 and 2590

RIN 1210-AC00

DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Parts 147 and 149

[CMS-9908-IFC]
RIN 0938-AU62


Requirements Related to Surprise Billing; Part II

AGENCY: Office of Personnel Management; Internal Revenue Service, 
Department of the Treasury; Employee Benefits Security Administration, 
Department of Labor; Centers for Medicare & Medicaid Services, 
Department of Health and Human Services.

ACTION: Interim final rules with request for comments.

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

SUMMARY: This document sets forth interim final rules implementing 
certain provisions of the No Surprises Act, which was enacted as part 
of the Consolidated Appropriations Act, 2021. These interim final rules 
implement provisions of the No Surprises Act that provide for a Federal 
independent dispute resolution (IDR) (Federal IDR) process to permit 
group health plans and health insurance issuers offering group or 
individual health insurance coverage and nonparticipating providers, 
facilities, and providers of air ambulance services to determine the 
out-of-network rate for items and services that are emergency services, 
nonemergency services furnished by nonparticipating providers at 
participating facilities, and air ambulance services furnished by 
nonparticipating providers of air ambulance services, under certain 
circumstances. The Department of Health and Human Services (HHS), the 
Department of Labor (DOL), and the Department of the Treasury 
(collectively, the Departments) are issuing these interim final rules 
with largely parallel provisions that apply to group health plans and 
health insurance issuers offering group or individual health insurance 
coverage and certified IDR entities, providers, facilities, and 
providers of air ambulance services. In addition to the interim final 
rules issued jointly by the Departments, this document also includes 
interim final rules issued by the Office of Personnel Management (OPM) 
to clarify how certain No Surprises Act provisions apply to health 
benefits plans offered by carriers under the Federal Employees Health 
Benefits (FEHB) Act. In addition to the interim final rules issued 
jointly by the Departments and OPM, this document includes interim 
final rules issued by HHS that address good faith estimates of health 
care items and services for uninsured or self-pay individuals and the 
associated patient-provider dispute resolution process. The HHS-only 
interim final rules apply to selected dispute resolution (SDR) 
entities, providers, facilities, and providers of air ambulance 
services.

DATES: 
    Effective date: These regulations are effective on October 7, 2021.
    Applicability date: Except as otherwise specified in this 
paragraph, the regulations issued jointly by the Departments of HHS, 
Labor, and the Treasury are generally applicable for plan or policy 
years beginning on or after January 1, 2022. The regulations regarding 
certification of IDR entities at 26 CFR 54.9816-8T(a) and (e), 29 CFR 
2590.716-8(a) and (e), and 45 CFR 149.510(a) and (e) are applicable 
beginning on October 7, 2021. The OPM-only regulations that apply to 
health benefits plans are applicable to contract years beginning on or 
after January 1, 2022. The regulations issued by HHS alone that apply 
to health care providers, facilities, providers of air ambulance 
services, and SDR entities are applicable beginning on January 1, 2022, 
except that the regulations at 45 CFR 149.620(a) and (d) are applicable 
beginning on October 7, 2021.
    Comment date: To be assured consideration, comments must be 
received at one of the addresses provided below, no later than 5 p.m. 
on December 6, 2021.

ADDRESSES: Written comments may be submitted to the addresses specified 
below. Any comment that is submitted will be shared among the 
Departments. Please do not submit duplicates.
    Comments will be made available to the public. Warning: Do not 
include any personally identifiable information (such as name, address, 
or other contact information) or confidential business information that 
you do not want publicly disclosed. Comments are posted on the internet 
exactly as received and can be retrieved by most internet search 
engines. No deletions, modifications, or redactions will be made to the 
comments received, as they are public records. Comments may be 
submitted anonymously.
    In commenting, refer to file code RIN 1210-AB00. Because of staff 
and resource limitations, we cannot accept comments by facsimile (FAX) 
transmission.
    Comments, including mass comment submissions, must be submitted in 
one of the following two 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 mail. You may mail written comments to the following address 
ONLY: Office of Health Plan Standards and Compliance Assistance, 
Employee Benefits Security Administration, U.S. Department of Labor, 
200 Constitution Avenue NW, Room N-5653, Washington, DC 20210, 
Attention: RIN 1210-AB00.
    You may mail written comments regarding the HHS-only regulations to 
the following address: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention CMS-9908-IFC, P.O. 
Box 8010, Baltimore, MD 21244-8010. Attention: RIN 0938-AU62.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Padma Babubhai Shah, Office of 
Personnel Management, at 202-606-4056; Kari DiCecco, Internal Revenue 
Service, Department of the Treasury, at 202-317-5500; Elizabeth 
Schumacher or David Sydlik, Employee Benefits Security Administration, 
Department of Labor, at 202-693-8335; Deborah Bryant, Centers for 
Medicare & Medicaid Services, Department of Health and Human Services, 
at 301-492-4293.
    Customer Service Information: Information from OPM on health 
benefits plans offered under the FEHB

[[Page 55981]]

Program can be found on the OPM website (www.opm.gov/healthcare-insurance/healthcare/).
    Individuals interested in obtaining information from the DOL 
concerning employment-based health coverage laws may call the Employee 
Benefits Security Administration (EBSA) Toll-Free Hotline at 1-866-444-
EBSA (3272) or visit the DOL's website (www.dol.gov/agencies/ebsa).
    In addition, information from HHS on private health insurance 
coverage, coverage provided by non-Federal governmental group health 
plans, and requirements that apply to health care providers, health 
care facilities, and providers of air ambulance services can be found 
on the Centers for Medicare & Medicaid Services (CMS) website 
(www.cms.gov/cciio), and information on health care reform can be found 
at www.HealthCare.gov.

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

I. Background

A. Preventing Surprise Medical Bills Under the Consolidated 
Appropriations Act, 2021

    On December 27, 2020, the Consolidated Appropriations Act, 2021 
(CAA), which includes the No Surprises Act, was enacted.\1\ The No 
Surprises Act provides Federal protections against surprise billing and 
limits out-of-network cost sharing under many of the circumstances in 
which surprise bills arise most frequently. Surprise billing occurs 
when an individual receives an unexpected medical bill from a health 
care provider or facility after receiving medical services from a 
provider or facility that, usually unknown to the participant, 
beneficiary, or enrollee, is a nonparticipating provider or facility 
with respect to the individual's coverage.
---------------------------------------------------------------------------

    \1\ Public Law 116-260 (December 27, 2020).
---------------------------------------------------------------------------

    The No Surprises Act added new provisions applicable to group 
health plans and health insurance issuers offering group or individual 
health insurance coverage in Subchapter B of chapter 100 of the 
Internal Revenue Code (Code), Part 7 of the Employee Retirement Income 
Security Act (ERISA), and Part D of title XXVII of the Public Health 
Service Act (PHS Act). Section 102 of the No Surprises Act added Code 
section 9816, ERISA section 716, and PHS Act section 2799A-1,\2\ which 
contain limitations on cost sharing and requirements regarding the 
timing of initial payments for emergency services furnished by 
nonparticipating providers and emergency facilities, and for 
nonemergency services furnished by nonparticipating providers at 
certain participating health care facilities. Section 103 of the No 
Surprises Act amended Code section 9816, ERISA section 716, and PHS Act 
section 2799A-1 to establish a Federal IDR process that allows plans 
and issuers and nonparticipating providers and facilities to resolve 
disputes regarding out-of-network rates. Section 105 of the No 
Surprises Act created Code section 9817, ERISA section 717, and PHS Act 
section 2799A-2, which contain limitations on cost sharing and 
requirements for the timing of initial payments for nonparticipating 
providers of air ambulance services and allow plans and issuers and 
providers of air ambulance services to access the Federal IDR process 
described in Code section 9816, ERISA section 716, and PHS Act section 
2799A-1. The No Surprises Act provisions that apply to health care 
providers and facilities and providers of air ambulance services, such 
as 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.
---------------------------------------------------------------------------

    \2\ As discussed later in this preamble, section 102(d)(1) of 
the No Surprises Act amended the Federal Employees Health Benefits 
Act, 5 U.S.C. 8901 et seq., by adding a new subsection (p) to 5 
U.S.C. 8902. Under this new provision, each FEHB Program contract 
must require a carrier to comply with requirements described in 
section 9816 of the Code, section 716 of ERISA, and section 2799A-1 
(as applicable) in the same manner as these provisions apply with 
respect to a group health plan or health insurance issuer offering 
group or individual health insurance coverage.
---------------------------------------------------------------------------

    On July 13, 2021, the Departments of the Treasury, Labor, and 
Health and Human Services (Departments) and the Office of Personnel 
Management (OPM) published interim final rules with request for 
comments titled, Requirements Related to Surprise Billing; Part I, 
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; to carriers in the FEHB Program with respect to contract years 
beginning on or after January 1, 2022; and to health care providers and 
facilities, and providers of air ambulance services beginning on 
January 1, 2022 (July 2021 interim final rules).\3\ The July 2021 
interim final rules implement Code sections 9816(a)-(b) and 9817(a), 
ERISA sections 716(a)-(b) and 717(a), and PHS Act sections 2799A-1(a)-
(b), 2799A-2(a), 2799A-7, 2799B-1, 2799B-2, 2799B-3, and 2799B-5 to 
protect consumers from surprise medical bills for emergency services, 
nonemergency services furnished by nonparticipating providers at 
participating facilities in certain circumstances, and air ambulance 
services furnished by nonparticipating providers of air ambulance 
services. Among other requirements, the July 2021 interim final rules 
require plans and issuers that provide or cover any benefits with 
respect to services in an emergency department of a hospital or with 
respect to emergency services in an independent freestanding emergency 
department to cover emergency services without any prior authorization; 
without regard to whether the health care provider furnishing the 
emergency services is a participating provider or the services are 
provided in a participating emergency facility; 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, nonemergency services 
furnished by nonparticipating providers at certain participating 
facilities, and air ambulance services furnished by nonparticipating 
providers of air ambulance services, 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.
---------------------------------------------------------------------------

    \3\ 86 FR 36872 (July 13, 2021).
---------------------------------------------------------------------------

    The July 2021 interim final rules also specify that consumer cost-
sharing amounts for emergency services furnished by nonparticipating 
providers or facilities, and for nonemergency services furnished by 
nonparticipating providers at certain participating facilities, must be 
calculated based on one of the following amounts: (1) An amount 
determined by an applicable All-Payer Model Agreement under

[[Page 55982]]

Social Security Act section 1115A; (2) if there is no such applicable 
All-Payer Model Agreement, an amount determined by a specified state 
law; or (3) if there is no such applicable All-Payer Model Agreement or 
specified state law, the lesser of the billed charge or the plan's or 
issuer's median contracted rate, the latter referred to as the 
qualifying payment amount (QPA). Cost-sharing amounts for air ambulance 
services provided by nonparticipating providers of air ambulance 
services must meet the same standards as would apply if the services 
were provided by a participating provider of air ambulance services and 
must be calculated using the lesser of the billed charges or the QPA.
    Under the July 2021 interim final rules, balance billing for 
services subject to the requirements in those interim final rules 
generally is prohibited.\4\ In general, the protections in the July 
2021 interim final rules that limit cost sharing and prohibit balance 
billing do not apply to certain post-stabilization services, or to 
certain nonemergency services performed by nonparticipating providers 
at participating health care facilities, if the provider makes certain 
disclosures to the participant, beneficiary, or enrollee, and obtains 
the individual's consent to waive balance billing protections. However, 
this exception to the prohibition on balance billing is narrow. In 
particular, it is not available in certain circumstances where surprise 
bills are likely to occur, such as for ancillary services provided by 
nonparticipating providers in connection with nonemergency care in a 
participating health care facility. The July 2021 interim final rules 
also include a number of other specific requirements regarding notice 
and consent that must be met in order for a provider or facility to be 
permitted to balance bill a participant, beneficiary, or enrollee for 
items and services that would otherwise be subject to the prohibition 
on balance billing.
---------------------------------------------------------------------------

    \4\ 45 CFR 149.410(a), 149.420(a) and 149.440(a).
---------------------------------------------------------------------------

    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. These interim final rules 
build upon the protections in the July 2021 interim final rules and 
implement the Federal IDR provisions under Code sections 9816(c) and 
9817(b), ERISA sections 716(c) and 717(b), and PHS Act sections 2799A-
1(c) and 2799A-2(b). OPM is also issuing regulations in phases to 
implement 5 U.S.C. 8902(p).
    The Departments and OPM also published a notice of proposed 
rulemaking on September 16, 2021, titled Requirements Related to Air 
Ambulance Services, Agent and Broker Disclosures, and Provider 
Enforcement.\5\ The proposed rule would, if finalized, implement 
reporting requirements for air ambulance claims data; requirements on 
health insurance issuers offering individual health insurance coverage 
or short term, limited-duration insurance to disclose and report 
information regarding direct or indirect compensation provided to 
agents and brokers (section 202(c) of title II of Division BB of the 
CAA); as well as provisions related to HHS enforcement of requirements 
on issuers, non-Federal governmental group health plans, providers, 
facilities, and providers of air ambulance services. Later this year, 
the Departments intend to undertake rulemaking to implement reporting 
requirements related to pharmacy benefits and prescription drug costs 
(section 204 of title II of Division BB of the CAA).
---------------------------------------------------------------------------

    \5\ 86 FR 51730 (Sept. 16, 2021).
---------------------------------------------------------------------------

    The provisions of the No Surprises Act that are applicable to group 
health plans and health insurance issuers offering group or individual 
health insurance coverage in the Code, ERISA, and the PHS Act 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.\6\ For example, grandfathered health plans 
are neither subject to the requirement to cover certain preventive 
services without cost sharing under PHS Act section 2713 nor to the 
annual limitation on cost sharing set forth under PHS Act section 
2707(b). If a plan or coverage were to relinquish 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, not only do the provisions of these interim final 
rules and the provisions of the July 2021 interim final rules that 
apply to group health plans and issuers of group or individual health 
insurance coverage apply to grandfathered plans, so do the other 
provisions applicable to group health plans and issuers of group or 
individual health insurance coverage in titles I and II of Division BB 
of the CAA.
---------------------------------------------------------------------------

    \6\ For a list of the market reform provisions applicable to 
grandfathered health plans under title XXVII of the PHS Act that the 
Affordable Care Act added or amended and that were incorporated into 
ERISA and the Code, visit https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/grandfathered-health-plans-provisions-summary-chart.pdf.
---------------------------------------------------------------------------

B. PHS Act Section 2719 and Scope of Claims Eligible for External 
Review

    PHS Act section 2719, as added by the Affordable Care Act, applies 
to group health plans that are not grandfathered health plans and 
health insurance issuers offering non-grandfathered coverage in the 
group and individual markets, and sets forth standards for plans and 
issuers regarding both internal claims and appeals and external review. 
With respect to external review, PHS Act section 2719 provides for both 
state external review processes and a Federal external review process 
that applies in the absence of an applicable state process that meets 
the requirements of section 2719. Non-grandfathered group health plans 
that are not self-insured plans (as self-insured plans are not subject 
to state insurance regulations) and health insurance issuers offering 
non-grandfathered group or individual health insurance coverage must 
comply with an applicable state external review process if that process 
includes, at a minimum, the consumer protections set forth in the 
Uniform Health Carrier External Review Model Act issued by the National 
Association of Insurance Commissioners (the NAIC Uniform Model Act). If 
a state's external review process does not meet the minimum consumer 
protection standards set forth in the NAIC Uniform Model Act (or if a 
plan is self-insured and not subject to state insurance regulation), 
group health plans and health insurance issuers in the group and 
individual markets in that state are required to implement an effective 
external review process that meets minimum standards established by the 
Departments through rulemaking.
    The Departments issued interim final regulations to implement PHS 
Act section 2719, including the provisions related to external review, 
in 2010.\7\ An

[[Page 55983]]

amendment to the interim final rules was issued in 2011.\8\ In 2015, 
the Departments issued final rules to finalize the interim final 
regulations.\9\ Among other things, the 2015 final rules address the 
scope of claims eligible for external review.\10\ State external review 
processes that meet the minimum standards must provide for the external 
review of adverse benefit determinations that are based on requirements 
for medical necessity, appropriateness, health care setting, level of 
care, or effectiveness of a covered benefit. The Federal external 
review process must be available for any adverse benefit determination 
by a plan or issuer that involves medical judgment, as well as 
rescissions. Section 110 of the No Surprises Act directs the 
Departments, in applying section 2719(b) of the PHS Act, to require the 
external review process to apply with respect to any adverse 
determination by a plan or issuer under Code section 9816 or 9817, 
ERISA section 716 or 717, or PHS Act section 2799A-1 or 2799A-2.
---------------------------------------------------------------------------

    \7\ 75 FR 43329 (July 23, 2010).
    \8\ 76 FR 37207 (June 10, 2011).
    \9\ 80 FR 72191 (Nov. 18, 2015).
    \10\ 26 CFR 54.9815-2719(d)(1); 29 CFR 2590.715-2719(d)(1); 45 
CFR 147.136(d)(1).
---------------------------------------------------------------------------

C. Protecting Uninsured Individuals Through Transparency and Patient-
Provider Dispute Resolution

    On July 9, 2021, President Biden signed Executive Order 14036, 
Promoting Competition in the American Economy in order to promote the 
interests of American workers, businesses, and consumers.\11\ The 
executive order acknowledges that robust competition is critical to 
providing consumers with more choices, better service, and lower prices 
and directs the Secretary of HHS to support existing price transparency 
initiatives for hospitals, other providers, and insurers along with any 
new price transparency initiatives or changes made necessary by the No 
Surprises Act or any other statues. Consistent with Executive Order 
14036, these interim final rules implement provisions of the No 
Surprises Act that will provide individuals with more pricing 
information prior to seeking care, allowing them to shop for the care 
that is best for them and increase competition in the health care 
market.
---------------------------------------------------------------------------

    \11\ 86 FR 36987 (Jul 9, 2021).
---------------------------------------------------------------------------

    The No Surprises Act also adds a new Part E of title XXVII of the 
PHS Act establishing requirements applicable to health care providers, 
providers of air ambulance services, and health care facilities. 
Section 112 of the No Surprises Act adds PHS Act sections 2799B-6 and 
2799B-7. PHS Act section 2799B-6 requires providers and facilities to 
furnish a good faith estimate of expected charges upon request or upon 
scheduling an item or service. Providers and facilities are required to 
inquire if an individual is enrolled in a group health plan, group or 
individual health insurance coverage, an FEHB plan,\12\ or a Federal 
health care program, and, if enrolled in a group health plan, or group 
or individual health insurance coverage, or a health benefits plan 
under chapter 89 of title 5,\13\ whether the individual is seeking to 
have a claim for such item or service submitted to such plan or 
coverage. In the case that the individual is enrolled in such a plan or 
coverage (and is seeking to have a claim for such an item or services 
submitted to such plan or coverage), PHS Act section 2799B-6(2)(A) 
requires that the provider or facility furnish the good faith estimate 
to the individual's plan or issuer of such coverage to inform the 
advanced explanation of benefits that plans and issuers are required to 
provide a participant, beneficiary, enrollee, or FEHB covered 
individual under Code section 9816(f), ERISA section 716(f), PHS Act 
section 2799A-1(f), and 5 U.S.C. 8902(p). In the case that the 
individual requesting a good faith estimate for an item or service or 
seeking to schedule an item or service to be furnished who is not 
enrolled in a plan or coverage, or is not seeking to file a claim with 
such plan or coverage (self-pay), PHS Act section 2799B-6(2)(B) and 
these interim final rules at 45 CFR 149.610 require providers and 
facilities to furnish the good faith estimate to the individual.
---------------------------------------------------------------------------

    \12\ HHS interprets the requirements described in PHS Act 
section 2799B-6 to apply with respect to FEHB covered individuals as 
they would to other individuals enrolled in a group health plan, 
group or individual health insurance coverage offered by a health 
insurance issuer. Although PHS Act section 2799B-6 does not 
reference health benefits plans under chapter 89 of title 5, the 
definition of ``uninsured individual'' at PHS Act section 2799B-7 
does include individuals who do not have benefits under these health 
benefits plans, and these sections work together to provide 
protections for the uninsured (or self-pay) population. Moreover, 
the requirement for the provision of an advance explanation of 
benefits required by Code section 9816(f), ERISA section 716(f), and 
PHS Act section 2799A-(1)(f), as well as 5 U.S.C. 8902(p) cannot be 
accomplished by a FEHB carrier unless it receives a good faith 
estimate from a provider in accordance with PHS Act section 2799B-
6(2)(A).
    \13\ A health benefits plan offered under chapter 89 of title 5, 
United States Code is also known as an FEHB plan.
---------------------------------------------------------------------------

    These interim final rules do not include requirements regarding PHS 
Act section 2799B-6(2)(A), which require providers and facilities to 
furnish good faith estimates to plans or issuers. Under Code section 
9816(f), ERISA section 716(f), and PHS Act section 2799A-1(f) and 5 
U.S.C. 8902(p), plans and issuers are required to include the good 
faith estimates in an advanced explanation of benefits provided to 
participants, beneficiaries, enrollees, and FEHB covered individuals. 
As stated in the August 20, 2021, FAQs issued by the Departments, the 
Departments have received feedback from the public about the challenges 
of developing the technical infrastructure necessary for providers and 
facilities to transmit to plans and issuers starting January 1, 2022, 
the good faith estimates required under PHS Act section 2799B-6, which 
plans and issuers must then include in the advanced explanation of 
benefits. Accordingly, until rulemaking to fully implement this 
requirement to provide such a good faith estimate to an individual's 
plan or coverage is adopted and applicable, HHS will defer enforcement 
of the requirement that providers and facilities provide good faith 
estimate information for individuals enrolled in a health plan or 
coverage and seeking to submit a claim for scheduled items or services 
to their plan or coverage. Additionally, stakeholders have requested 
that the Departments delay the applicability date of Code section 
9816(f), ERISA section 716(f), and PHS Act section 2799A-1(f) until the 
Departments have established standards for the data transfer between 
providers and facilities and plans and issuers and have given enough 
time for plans and issuers and providers and facilities to build the 
infrastructure necessary to support the transfers. The Departments 
agree that compliance with this section is likely not possible by 
January 1, 2022, and therefore intend to undertake notice and comment 
rulemaking in the future to implement this provision, including 
establishing appropriate data transfer standards. Until such time, the 
Departments will defer enforcement of the requirement that plans and 
issuers must provide an advanced explanation of benefits. HHS will 
consider whether additional interim solutions for insured consumers are 
feasible. The Departments note that any rulemaking to fully implement 
Code section 9816(f), ERISA section 716(f), and PHS Act sections 2799A-
1(f) and 2799B-6(2)(A) will include a prospective applicability date 
that provides plans, issuers, providers, and facilities with a 
reasonable amount of time to comply with new requirements. HHS 
encourages states that are primary enforcers of these requirements with 
regard to providers and issuers to take a similar enforcement approach, 
and

[[Page 55984]]

will not determine that a state is failing to substantially enforce 
these requirements if it takes such an approach.
    Nonetheless, providers and facilities will be subject to 
enforcement action for failure to provide a good faith estimate to 
individuals not enrolled in a plan or coverage, or not seeking to have 
a claim for such item or services submitted to such plan or issuer of 
such coverage, as specified under these interim final rules. HHS seeks 
comment on this approach.
    On November 12, 2020, the Departments issued the Transparency in 
Coverage final rules,\14\ which require group health plans and health 
insurance issuers of group or individual health insurance coverage to 
make price comparison information available to participants, 
beneficiaries, and enrollees through an internet-based self-service 
tool and in paper form, upon request. This information must be 
available for plan years--or in the individual market, for policy 
years--beginning on or after January 1, 2023 with respect to 500 
specified items and services, and with respect to all covered items and 
services, for plan or policy years beginning on or after January 1, 
2024. The Departments are of the view that the disclosure requirements 
to participants, beneficiaries, and enrollees under the Transparency in 
Coverage final rules, and those required under Code section 9816(f), 
ERISA section 716(f), and PHS Act section 2799A-1(f), are substantially 
similar and therefore the Departments seek comment on whether there are 
ways to leverage the Transparency in Coverage requirements, including 
whether there are ways for plans and issuers to provide the information 
required in the Transparency in Coverage final rules to participants, 
beneficiaries, and enrollees during plan or policy years beginning in 
2022. The Departments also seek comment on whether it would be feasible 
for providers and facilities to provide an estimate or range of 
estimated costs for insured consumers upon request for 2022.
---------------------------------------------------------------------------

    \14\ 26 CFR 54.9815-2715A2(b), 29 CFR 2590.715-2715A2(b), and 45 
CFR 147.211(b).
---------------------------------------------------------------------------

    Section 112 of the No Surprises Act also adds PHS Act section 
2799B-7, which directs the Secretary of HHS to establish a process 
under which uninsured (or self-pay) individuals can avail themselves of 
a patient-provider dispute resolution process if their billed charges 
after receiving an item or service are substantially in excess of the 
expected charges listed in the good faith estimate furnished by the 
provider or facility, pursuant to PHS Act section 2799B-6. Under PHS 
Act section 2799B-7, an uninsured (or self-pay) individual means, with 
respect to an item or service, an individual who does not have benefits 
for such item or service under a group health plan, group or individual 
health insurance coverage offered by a health insurance issuer, Federal 
health care program (as defined in section 1128B(f) of the Social 
Security Act), or a health benefits plan under chapter 89 of title 5, 
United States Code (or an individual who has benefits for such item or 
service under a group health plan or individual or group health 
insurance coverage offered by a health insurance issuer, but does not 
seek to have a claim for such item or service submitted to such plan or 
coverage).

II. Executive Summary

A. Departments of the Treasury, Labor, and HHS: Federal IDR Process and 
External Review

    In order to implement the Federal IDR provisions under Code 
sections 9816(c) and 9817(b), ERISA sections 716(c) and 717(b), and PHS 
Act sections 2799A-1(c) and 2799A-2(b), as added by sections 103 and 
105 of the No Surprises Act, these interim final rules establish a 
Federal IDR process that nonparticipating providers or facilities, 
nonparticipating providers of air ambulance services, and group health 
plans and health insurance issuers in the group and individual market 
may use following the end of an unsuccessful open negotiation period to 
determine the out-of-network rate for certain services. More 
specifically, the Federal IDR provisions may be used to determine the 
out-of-network rate for certain emergency services, nonemergency items 
and services furnished by nonparticipating providers at participating 
health care facilities, and air ambulance services furnished by 
nonparticipating providers of air ambulance services where an All-Payer 
Model Agreement or specified state law does not apply.
    Under Code sections 9816(c)(1)(A) and 9817(b)(1)(A), ERISA sections 
716(c)(1)(A) and 717(b)(1)(A), PHS Act sections 2799A-1(c)(1)(A) and 
2799A-2(b)(1)(A), and these interim final rules, upon receiving an 
initial payment or notice of denial of payment from a plan or issuer 
with respect to such items or services, such provider or facility or 
provider of air ambulance services (as applicable) or plan or issuer 
(as applicable) may initiate an open negotiation period within 30 
business days beginning on the date the provider or facility receives 
the initial payment or notice of denial of payment. The open 
negotiation period may continue for up to 30 business days beginning on 
the date that either party first initiates the open negotiation period. 
The parties may discontinue the negotiation if they agree on an out-of-
network rate before the last day of the 30-business-day open 
negotiation period. If the parties cannot agree on an out-of-network 
rate, they must exhaust the 30-business-day open negotiation period 
before initiating the Federal IDR process. Either party may initiate 
the Federal IDR process during the 4-business-day period beginning on 
the 31st business day after the start of the open negotiation period. 
The parties may select a certified IDR entity, or if the parties do not 
select a certified IDR entity, the Departments will do so. The No 
Surprises Act and these interim final rules specify that the certified 
IDR entity selected cannot be a party to the determination or an 
employee or agent of such a party, or have a material familial, 
financial, or professional relationship with such party.
    In resolving the disputes through the Federal IDR process, the No 
Surprises Act and these interim final rules provide that each party 
must submit to the certified IDR entity an offer for a payment amount 
for the qualified IDR item or service in dispute and other information 
related to the offer as requested by the certified IDR entity within 10 
business days of selection of the certified IDR entity and may submit 
additional information for the certified IDR entity to consider. In 
making a determination of which payment offer to select, these interim 
final rules specify that the certified IDR entity must begin with the 
presumption that the QPA is the appropriate out-of-network rate for the 
qualified IDR item or service under consideration. These interim final 
rules further provide that the certified IDR entity must select the 
offer closest to the QPA unless the certified IDR entity determines 
that credible information submitted by either party clearly 
demonstrates that the QPA is materially different from the appropriate 
out-of-network rate, based on the additional factors set forth in Code 
sections 9816(c)(5)(C)(ii) and 9817(b)(5)(C)(ii), ERISA sections 
716(c)(5)(C)(ii) and 717(b)(5)(C)(ii), and PHS Act sections 2799A-
1(c)(5)(C)(ii) and 2799A-2(b)(5)(C)(ii). The certified IDR entity may 
not consider usual and customary charges, the amount that would have 
been billed (including billed charges that are directed to the plan or 
issuer) if the protections of 45 CFR 149.410,

[[Page 55985]]

149.420, or 149.440 \15\ (as applicable) had not applied, or any public 
payor payment or reimbursement rates.\16\ As discussed more fully in 
section III.D.4.ii. of this preamble, this approach is consistent with 
the No Surprises Act's emphasis on the QPA, both as the basis of the 
surprise billing protections also included in the statute and 
implemented by the July 2021 interim final rules and as the sole factor 
identified without any qualification by the statute.\17\ The 
Departments are of the view that implementing the Federal IDR process 
in this manner encourages predictable outcomes, which will reduce the 
use of the Federal IDR process over time and the associated 
administrative fees born by the parties, while providing equitable and 
clear standards for when payment amounts may deviate from the QPA, as 
appropriate.
---------------------------------------------------------------------------

    \15\ The July 2021 interim final rules prohibit nonparticipating 
emergency facilities and nonparticipating providers furnishing 
emergency services from billing participants, beneficiaries, or 
enrollees for payment amounts that exceed the cost-sharing 
requirement for those items or services. The July 2021 interim final 
rules also generally prohibit nonparticipating providers furnishing 
nonemergency items and services at participating facilities from 
balance billing participants, beneficiaries, or enrollees for those 
items or services. In addition, the July 2021 interim final rules 
prohibit nonparticipating providers of air ambulance services 
furnishing air ambulance services for which benefits are available 
under a group health plan or group or individual health insurance 
coverage from balance billing participants, beneficiaries, or 
enrollees for those items or services.
    \16\ Public payor payment and reimbursement rates include 
reimbursement rates under the Medicare program under title XVIII of 
the Social Security Act, under the Medicaid program under title XIX 
of such Act, under the Children's Health Insurance Program under 
title XXI of such Act, under the TRICARE program under chapter 55 of 
title 10, United States Code, and under chapter 17 of title 38, 
United States Code.
    \17\ The No Surprises Act limits the certified IDR entity's 
consideration of additional factors by prohibiting the certified IDR 
entity from considering certain other factors, such as usual and 
customary charges and billed charges, in making a payment 
determination.
---------------------------------------------------------------------------

    The No Surprises Act and these interim final rules also set forth 
requirements for certification of IDR entities by the Departments. To 
become certified IDR entities, IDR entities must provide written 
documentation demonstrating that they meet the eligibility criteria, 
including having sufficient expertise and staffing to conduct 
determinations on a timely basis, being free of conflicts of interest, 
being accredited by a nationally recognized and relevant accrediting 
body (such as URAC) or otherwise ensuring that IDR entity personnel 
possess the requisite training to conduct payment determinations (for 
example, providing documentation that personnel employed by the IDR 
entity have completed arbitration training by the American Arbitration 
Association (AAA), the American Health Law Association (AHLA), or a 
similar organization), ensuring policies and procedures are in place to 
maintain confidentiality of individually identifiable health 
information, providing a fixed fee for single determinations and a 
separate fee for batched determinations, having a procedure in place to 
retain certified IDR entity fees and retain and remit administrative 
fees, meeting appropriate indicators of fiscal integrity and stability, 
evidencing its ability to collect and transmit the information required 
to be reported to the Departments, and properly carrying out the 
requirements of the Federal IDR process in accordance with the law. 
These interim final rules also establish a process whereby members of 
the public, providers, facilities, providers of air ambulance services, 
plans, or issuers may petition for the denial or revocation of 
certification of an IDR entity. Finally, these interim final rules 
require the collection of information related to the Federal IDR 
process from certified IDR entities in order to allow the Departments 
to quarterly publish information on IDR payment determinations.
    The Departments are also establishing a Federal IDR portal to 
administer the Federal IDR process. The Departments' Federal IDR portal 
will be available at https://www.nsa-idr.cms.gov and will be used 
throughout the Federal IDR process to maximize efficiency and reduce 
burden. As discussed throughout this preamble, the Federal IDR portal 
may be used to satisfy various requirements under these interim final 
rules, including provision of notices, Federal IDR initiation, 
submission of an application to be a certified IDR entity, as well as 
satisfying reporting requirements.
    These interim final rules also amend final regulations issued by 
the Departments in 2015 related to external review in order to 
implement section 110 of the No Surprises Act. Section 110 requires 
that ``[i]n applying the provisions of section 2719(b) of the [PHS Act] 
to group health plans and health insurance issuers offering group or 
individual health insurance coverage, the Secretary of [HHS], Secretary 
of Labor, and Secretary of the Treasury, shall require, beginning not 
later than January 1, 2022, the external review process described in 
paragraph (1) of such section to apply with respect to any adverse 
determination by such a plan or issuer under Code section 9816 or 9817, 
ERISA section 716 or 717, or PHS Act section 2799A-1 or 2799A-2, 
including with respect to whether an item or service that is the 
subject to such a determination is an item or service to which such 
respective section applies.'' Accordingly, these interim final rules 
amend the final regulations regarding external review in two ways. 
First, the scope of adverse benefit determinations eligible for 
external review is amended to ensure that issues related to compliance 
with the specified provisions of the No Surprises Act fall within that 
scope. Several examples are also added to provide greater clarity to 
stakeholders regarding the expanded scope. Second, applicability 
provisions are amended to require that grandfathered health plans, 
which generally are exempt from requirements related to external 
review, must nonetheless provide for external review of adverse benefit 
determinations for claims subject to the cost-sharing and surprise 
billing protections in the No Surprises Act. The Departments seek 
comment on all aspects of these interim final rules.

B. Office of Personnel Management: Federal IDR Process for FEHB 
Carriers

    The OPM interim final rules amend existing 5 CFR 890.114(a) to 
include references to the Treasury, DOL, and HHS interim final rules to 
clarify that pursuant to 5 U.S.C. 8902(p), FEHB carriers are also 
subject to the Federal IDR process set forth in those regulations with 
respect to an item or service eligible for determination through open 
negotiation or the Federal IDR process furnished by a FEHB carrier 
offering a health benefits plan in the same manner as those provisions 
apply to a group health plan or health insurance issuer offering group 
or individual health insurance coverage, subject to 5 U.S.C. 8902(m)(1) 
and the provisions of the FEHB carrier's contract. Through new 5 CFR 
890.114(d), OPM adopts the Departments' interim final rules as 
conformed by terms unique to the FEHB Program. In 5 CFR 890.114(d), OPM 
adopts the Departments' rules as necessary to properly integrate with 
existing FEHB Program structure and sets forth circumstances in which 
OPM will enforce these rules as applied to FEHB carriers. The OPM 
interim final rules require FEHB carrier notice to the OPM Director 
(herein, the Director) of an FEHB carrier's notice of initiation, or 
receipt of a provider's notice of initiation, of the Federal IDR 
process. The Director will coordinate with the Departments in matters 
regarding FEHB

[[Page 55986]]

carriers requiring resolution under the Federal IDR process and with 
respect to oversight of certified IDR entities' reports regarding FEHB 
carriers. As discussed in the July 2021 interim final rules, all out-
of-network rate determinations regarding IDR items or services eligible 
for determination through open negotiation or the Federal IDR process 
under the No Surprises Act with respect to FEHB plans or carriers that 
are not resolved by open negotiation are subject to the Federal IDR 
process unless OPM contracts with FEHB carriers include terms that 
adopt state law as governing for this purpose.

C. Department of HHS: Protections for the Uninsured

    To ensure that uninsured (or self-pay) individuals are also 
afforded protections against surprise health care costs, the No 
Surprises Act includes provisions that require providers and facilities 
to furnish good faith estimates to uninsured (or self-pay) individuals 
upon their request and at the time of scheduling the item or service. 
In order to implement these provisions under PHS Act sections 2799B-
6(1) and 2799B-6(2)(B), HHS is adding 45 CFR 149.610 to establish 
requirements for providers and facilities to specifically inquire about 
an individual's health coverage status and requirements for providing a 
good faith estimate to uninsured (or self-pay) individuals. These 
interim final rules define uninsured (or self-pay) individuals to 
include those who do not have benefits for an item or service under a 
group health plan, group or individual health insurance coverage 
offered by a health insurance issuer, a Federal health care program (as 
defined in section 1128B(f) of the Social Security Act), or a health 
benefits plan under chapter 89 of title 5, United States Code, or an 
individual who has benefits for such item or service under a group 
health plan or individual or group health insurance coverage offered by 
a health insurance issuer, but who does not seek to have a claim for 
such item or service submitted to such plan or coverage. PHS Act 
section 2799B-6, added by section 112 of the No Surprises Act, does not 
specifically define a Federal health care program and also does not 
reference health benefits plans under chapter 89 of title 5. However, 
PHS Act section 2799B-7, which was also added by section 112 of the No 
Surprises Act, and which provides protections related to the good faith 
estimate required under PHS Act section 2799B-6, defines an uninsured 
individual to include individuals not enrolled in a Federal health care 
program (as defined in section 1128B(f) of the Social Security Act) and 
individuals not enrolled in health benefits plans under chapter 89 of 
title 5. To align these two related sections, HHS is adopting the 
definition of an uninsured (or self-pay) individual at PHS Act section 
2799B-7 for the purposes of the interim final rules at 45 CFR 149.610 
which implements PHS Act section 2799B-6(1) and 2799B-6(2)(B) and 45 
CFR 149.620 which implements PHS Act section 2799B-7.
    The definition of uninsured (or self-pay) individuals in these 
interim final rules includes individuals enrolled in individual or 
group health insurance coverage offered by a health insurance issuer, 
or a health benefits plan under chapter 89 of title 5, but not seeking 
to have a claim for such item or service submitted to such plan or 
coverage. These individuals are often referred to as self-pay 
individuals, therefore these interim final rules include the term self-
pay when discussing uninsured individuals.
    Under PHS Act section 2791(b)(5), short-term, limited-duration 
insurance is excluded from the definition of individual health 
insurance coverage. Therefore, for purposes of 45 CFR 149.610 and 45 
CFR 149.620, uninsured (or self-pay) individuals include individuals 
who are enrolled in short-term, limited-duration insurance and not also 
enrolled in a group health plan, group or individual health insurance 
coverage offered by a health insurance issuer, Federal health care 
program (as defined in section 1128B(f) of the Social Security Act), or 
a health benefits plan under chapter 89 of title 5, United States Code. 
Thus, providers and facilities will be required to provide to such 
individuals a good faith estimate and such individuals will be able to 
avail themselves of the patient-provider dispute resolution process, 
where applicable.
    PHS Act section 2799B-6(2) and these interim final rules specify 
that a provider or facility must provide a notification (in clear and 
understandable language) of the good faith estimate of the expected 
charges for furnishing the items or services listed on the good faith 
estimate (including any items or services that are reasonably expected 
to be provided in conjunction with such scheduled or requested items or 
services and such items or services reasonably expected to be so 
provided by another health care provider or health care facility), with 
the expected billing and diagnostic codes for any such items or 
services.
    As discussed in section I.C. of this preamble, requirements to 
implement PHS Act section 2799B-6(2)(A) are not included in these 
interim final rules given the challenges of developing the technical 
infrastructure necessary to transmit such data from providers and 
facilities to plans and issuers. The requirements in these interim 
final rules apply only to good faith estimate notifications for 
uninsured (or self-pay) individuals as described in PHS Act section 
2799B-6(2)(B) and in these interim final rules. HHS acknowledges that 
PHS Act section 2799B-6 also requires providers and facilities to make 
certain disclosures to an individual's plan or coverage if the 
individual is enrolled in such a plan or coverage and is seeking to 
have a claim for such items or services submitted to such plan or 
coverage. Specifically, section 2799B-6(2)(A) requires a provider or 
facility to provide such a plan or issuer notification of the good 
faith estimate of expected charges for furnishing an item or service on 
the same terms as provided to individuals.
    Health care providers and health care facilities are required under 
PHS Act section 2799B-6 to furnish a notification of the good faith 
estimate of expected charges to an uninsured (or self-pay) individual 
who schedules an item or service, and to an individual who has not yet 
scheduled an item or service, but requests a good faith estimate. PHS 
Act section 2799B-6 requires providers and facilities to furnish a good 
faith estimate to an uninsured (or self-pay) individual who schedules 
an item or service at least 3 business days before the date such item 
or service is to be so furnished, not later than 1 business day after 
the date of such scheduling (or, in the case of such an item or service 
scheduled at least 10 business days before the date such item or 
service is to be so furnished (or if requested by the uninsured (or 
self-pay) individual), not later than 3 business days after the date of 
such scheduling or such request). As further discussed in section VI of 
this preamble, in instances where an uninsured (or self-pay) individual 
requests a good faith estimate of expected charges, but the item or 
service has not been scheduled, these interim final rules require that 
the treating provider furnish a good faith estimate to the uninsured 
(or self-pay) individual, within 3 business days of such request. For 
example, if an uninsured (or self-pay) individual schedules an item or 
service on Monday, January 3 to be provided on Thursday, January 6, the 
provider and facility must furnish a good faith estimate no later than 
Tuesday, January 4. If scheduling occurs on Monday, January 3 for items 
or services to be

[[Page 55987]]

provided on Thursday, January 13, the provider and facility must 
furnish a good faith estimate no later than Thursday, January 6. If an 
uninsured (or self-pay) individual requests a good faith estimate on 
Monday, January 3 for items or services not yet scheduled, the provider 
and facility must furnish the good faith estimate no later than 
Thursday, January 6.
    These interim final rules include definitions relating to good 
faith estimates of expected charges for uninsured (or self-pay) 
individuals for scheduled items or services and upon request. These 
interim final rules also include requirements for providers and 
facilities regarding the contents of the good faith estimates and the 
manner in which good faith estimates must be provided.
    PHS Act section 2799B-7 provides further protections for the 
uninsured (or self-pay) individual by requiring the Secretary of HHS to 
establish a process (in this section referred to as patient-provider 
dispute resolution) under which an uninsured (or self-pay) individual 
who received from a provider or facility a good faith estimate of the 
expected charges, and who, after being furnished the item or service, 
is billed an amount that is substantially in excess of the expected 
charges in the good faith estimate, may seek a determination from a 
certified dispute resolution entity of the amount to be paid to the 
provider or facility.
    HHS is adding new 45 CFR 149.620 to implement this patient-provider 
dispute resolution process, including specific definitions related to 
the process. HHS is also codifying provisions related to eligibility 
for the patient-provider dispute resolution process, and selection of 
an SDR entity. HHS clarifies that while SDR entities provide a similar 
function and must meet similar requirements as certified IDR entities, 
SDR entities are specific to the patient-provider dispute resolution 
process. These interim final rules also codify requirements related to 
the determination of payment amounts by SDR entities, fees associated 
with the patient-provider dispute resolution process, certification of 
SDR entities, and deferral to state-established patient-provider 
dispute resolution processes that meet certain minimum Federal 
standards.

III. Overview of the Interim Final Rules Regarding the Federal 
Independent Dispute Resolution Process for Plans, Issuers, Providers, 
Facilities, and Providers of Air Ambulance Services--Departments of the 
Treasury, Labor, and HHS

A. Definitions

    Code section 9816, ERISA section 716, and PHS Act sections 2799A-1 
and 2799A-2 include defined terms that are specific to the law's 
requirements and implementation.\18\ The definitions in 26 CFR 54.9816-
3T, 29 CFR 2590.716-3, and 45 CFR 149.30 apply to these interim final 
rules; these interim final rules also define additional terms specific 
to the Federal IDR process. Under these interim final rules, ``batched 
items and services'' means multiple qualified IDR items or services 
that are considered jointly as part of one payment determination by a 
certified IDR entity for purposes of the Federal IDR process. For a 
qualified IDR item or service to be included as a batched item or 
service, the qualified IDR item or service must satisfy the criteria 
for batching set forth in 26 CFR 54.9816-8T(c)(3), 29 CFR 2590.716-
8(c)(3), and 45 CFR 149.510(c)(3). ``Certified IDR entity'' means an 
entity responsible for conducting determinations under 26 CFR 54.9816-
8T(c), 29 CFR 2590.716-8(c), and 45 CFR 149.510(c) that meets the 
certification criteria specified in 26 CFR 54.9816-8T(e), 29 CFR 
2590.716-8(e), and 45 CFR 149.510(e) and that has been certified by the 
Departments. Separately, ``IDR entity'' means an entity that may apply 
or has applied for certification to conduct determinations under 26 CFR 
54.9816-8T(c), 29 CFR 2590.716-8(c), and 45 CFR 149.510(c) and 
currently is not certified by the Departments pursuant to 26 CFR 
54.9816-8T(e), 29 CFR 2590.716-8(e), and 45 CFR 149.510(e). If a 
certified IDR entity's certification has expired or has been revoked as 
a result of the process described in 26 CFR 54.9816-8T(e)(6), 29 CFR 
2590.716-8(e)(6), and 45 CFR 149.510(e)(6), upon the date of the 
expiration or revocation, the formerly-certified IDR entity will be 
referred to as an IDR entity.
---------------------------------------------------------------------------

    \18\ To implement these interim final rules regarding the 
Federal IDR process under the PHS Act, HHS is amending 45 part CFR 
149 by adding new Subparts F and G. Additionally, the Departments 
are amending 26 CFR 54.9816-1T and 54.9816-2T, 29 CFR 2590.716-1 and 
2590.716-2 and 45 CFR 149.10 and 149.20 to expand the scope and 
applicability of this part to include IDR entities and the Federal 
IDR process. HHS is also amending 45 CFR 149.10 and 149.20 to expand 
the scope and applicability of this part to include SDR entities, 
the good faith estimate requirements, and patient-provider dispute 
resolution process.
---------------------------------------------------------------------------

    These interim final rules also define certain terms related to 
conflict-of-interest standards applicable to certified IDR entities. 
Stakeholders have emphasized the importance of ensuring a broad 
conflict-of-interest standard in order to avoid the risk of biased IDR 
payment determinations (or the appearance of biased IDR payment 
determinations). In general, a ``conflict of interest'' means, with 
respect to a party to a payment determination, a certified IDR entity, 
a material relationship, status, or condition of the party, or 
certified IDR entity that impacts the ability of a certified IDR entity 
to make an unbiased and impartial payment determination. For purposes 
of these interim final rules, a conflict of interest exists when a 
certified IDR entity is a group health plan; a health insurance issuer 
offering group health insurance coverage, individual health insurance 
coverage or short-term, limited-duration insurance; an FEHB carrier; or 
a provider, a facility,\19\ or a provider of air ambulance services. 
While the statute does not specify that the IDR entity must not be a 
health insurance issuer offering short-term, limited-duration 
insurance, the Departments have determined that such entities should 
not be eligible for certification, due to their similarity to health 
insurance issuers offering group and individual health insurance 
coverage and their inherent interest as issuers in keeping 
reimbursement rates for providers, facilities, and providers of air 
ambulance services low. A conflict of interest also exists when a 
certified IDR entity is an affiliate or a subsidiary of a group health 
plan; a health insurance issuer offering group health insurance 
coverage, individual health insurance coverage or short-term, limited-
duration insurance; an FEHB carrier; or provider, facility, or provider 
of air ambulance services. A conflict of interest also exists when a 
certified IDR

[[Page 55988]]

entity is an affiliate or subsidiary of a professional or trade 
association representing group health plans; health insurance issuers 
offering group health insurance coverage, individual health insurance 
coverage or short-term, limited-duration insurance; FEHB carriers; or 
providers, facilities, or providers of air ambulance services. 
Additionally, a conflict of interest exists when a certified IDR entity 
has, or any personnel assigned to a determination have a material 
familial, financial, or professional relationship with a party to the 
payment determination being disputed, or with any officer, director, or 
management employee of the plan, issuer or carrier offering a health 
benefits plan under 5 U.S.C. 8902; the plan administrator, plan 
fiduciaries, or plan, issuer, or carrier's employees; the health care 
provider, the health care provider's group or practice association; the 
provider of air ambulance services, the provider of air ambulance 
services' group or practice association, or the facility that is a 
party to the dispute. The Departments are of the view that an officer, 
director, or management employee of the plan issuer, or carrier 
offering a health benefits plan under 5 U.S.C. 8902; the plan 
administrator, plan fiduciaries, or plan, issuer or carrier employees; 
the health care provider, the health care provider's group or practice 
association; the provider of air ambulance services, the provider of 
air ambulance services' group or practice association, or the facility 
that is a party to the dispute are individuals who could have 
significant involvement with the dispute. Relationships with these 
individuals could therefore improperly affect the certified IDR 
entities' ability to be impartial.
---------------------------------------------------------------------------

    \19\ Similar to the July 2021 interim final rules, the term 
``facility'' indicates a facility that furnishes health care 
services that is subject to the surprise billing protections of the 
No Surprises Act, such as a hospital (including a hospital's 
emergency department), urgent care center, or ambulatory surgical 
center. For purposes of good faith estimates under 45 CFR 149.610 
and the Patient-Provider dispute resolution process in 45 CFR 
149.620 ``facility'' includes an institution (such as a hospital or 
hospital outpatient department, critical access hospital, ambulatory 
surgical center, rural health center, federally qualified health 
center, laboratory, or imaging center) in any state in which state 
or applicable local law provides for the licensing of such an 
institution, that is licensed as such an institution pursuant to 
such law or is approved by the agency of such state or locality 
responsible for licensing such institution as meeting the standards 
established for such licensing.
---------------------------------------------------------------------------

    These interim final rules also define what constitutes a material 
familial relationship, a material financial relationship, or material 
professional relationship with a party to the payment determination. In 
developing these definitions, the Departments looked to states' 
conflict-of-interest standards for external review and arbitrations of 
surprise billing claims. These state standards typically use terms that 
are similar to those used in Code section 9816(c)(4)(F)(i)(II), ERISA 
section 716(c)(4)(F)(i)(II), and PHS Act section 2799A-
1(c)(4)(F)(i)(II).\20\ By adopting definitions that largely mirror 
these state standards, the Departments seek to ensure that the 
definitions are workable and increase the likelihood that IDR entities 
may be familiar with these standards, if they have performed services 
in these states. Accordingly, these interim final rules provide that 
the term ``material familial relationship'' means any relationship as a 
spouse, domestic partner, child, parent, sibling, spouse's or domestic 
partner's parent, spouse's or domestic partner's sibling, spouse's or 
domestic partner's child, child's parent, child's spouse or domestic 
partner, or sibling's spouse or domestic partner. ``Material financial 
relationship'' means any financial interest of more than five percent 
of total annual revenue or total annual income of a certified IDR 
entity or an officer, director, or manager thereof, or of a reviewer or 
reviewing physician employed or engaged by a certified IDR entity to 
conduct or participate in any payment determination under the Federal 
IDR process. Under the definition of ``material financial 
relationship,'' annual revenue and annual income do not include 
mediation fees received by mediators who are also arbitrators, provided 
that the mediator acts in the capacity of a mediator and does not 
represent a party in the mediation. Finally, with respect to terms 
related to the conflict-of-interest standards, ``material professional 
relationship'' means any physician-patient relationship, any 
partnership or employment relationship or affiliation, any shareholder 
or similar ownership interest in a professional corporation, 
partnership, or other similar entity, or any independent contractor 
arrangement that constitutes a material financial relationship with any 
expert used by the certified IDR entity or any officer or director of 
the certified IDR entity. The Departments solicit comment on whether 
the defined terms related to the conflict-of-interest standards should 
include threshold requirements to further define the level of 
relationship that would rise to the level of a conflict of interest.
---------------------------------------------------------------------------

    \20\ See e.g., WAC 284-43A-010; N.Y. Comp. Codes R. & Regs. tit. 
11 section 410.2.
---------------------------------------------------------------------------

    Additionally, under these interim final rules, the Departments 
define certain terms related to confidentiality, information security, 
and privacy requirements that apply to an IDR entity seeking 
certification under these interim final rules. Code section 
9816(c)(4)(A)(v), ERISA section 716(c)(4)(A)(v), and PHS Act section 
2799A-1(c)(4)(A)(v) require certified IDR entities to maintain the 
confidentiality of individually identifiable health information (IIHI) 
obtained while making payment determinations and engaging in other 
activities related to the Federal IDR process. In establishing 
definitions for these terms, the Departments looked to existing Federal 
standards, particularly the Health Insurance Portability and 
Accountability Act of 1996 (HIPAA), the Health Information Technology 
for Economic and Clinical Health (HITECH) Act, and the privacy, 
security, and breach notification standards under 45 CFR part 160 A and 
subparts A, C, D, and E of part 164, because the Departments are of the 
view that these provisions are industry standards. The Departments have 
modified these standards in some cases to fit the circumstances of IDR 
entities.
    These interim final rules define ``Individually identifiable health 
information (IIHI)'' to mean any information, including demographic 
data, that relates to the past, present, or future physical or mental 
health or condition of an individual; the provision of health care to 
an individual; or the past, present, or future payment for the 
provision of health care to an individual; and that identifies the 
individual; or with respect to which there is a reasonable basis to 
believe the information can be used to identify the individual.\21\ 
Finally, these interim final rules define ``Unsecured IIHI'' to mean 
IIHI that is not rendered unusable, unreadable, or indecipherable to 
unauthorized persons through the use of a technology or methodology 
specified by the Departments. For technologies and methodologies 
approved for this purpose, certified IDR entities should refer to the 
HHS Guidance to Render Unsecured Protected Health Information Unusable, 
Unreadable, or Indecipherable to Unauthorized Individuals.\22\
---------------------------------------------------------------------------

    \21\ Note that this definition is broader than the definition of 
IIHI set forth in the Health Insurance Portability and 
Accountability Act (HIPAA) Rules at 45 CFR 160.103.
    \22\ HHS Office for Civil Rights, ``Guidance to Render Unsecured 
Protected Health Information Unusable, Unreadable, or Indecipherable 
to Unauthorized Individuals,'' available at https://www.hhs.gov/guidance/document/guidance-render-unsecured-protected-health-information-unusable-unreadable-or.
---------------------------------------------------------------------------

    These interim final rules provide that the term ``breach'' means 
the acquisition, access, use, or disclosure of IIHI in a manner not 
permitted under 26 CFR 54.9816-8T(e)(2)(v), 29 CFR 2590.716-8(e)(2)(v), 
and 45 CFR 149.510(e)(2)(v) that compromises the security or privacy of 
the IIHI. Under these interim final rules, a breach excludes any 
unintentional acquisition, access, or use of IIHI by personnel, 
including a contractor or subcontractor, acting under the authority of 
a certified IDR entity, if the acquisition, access, or use was made in 
good faith and within the scope of authority and does not result in 
further use or disclosure in a

[[Page 55989]]

manner not permitted under 26 CFR 54.9816-8T(e)(2)(v), 29 CFR 2590.716-
8(e)(2)(v), and 45 CFR 149.510(e)(2)(v). Also excluded is any 
inadvertent disclosure by a person who is authorized to access IIHI as 
personnel of a certified IDR entity to another person authorized to 
access IIHI as personnel of the same certified IDR entity (including a 
contractor or subcontractor of the certified IDR entity), and the 
information received as a result of such disclosure is not further used 
or disclosed in a manner not permitted under 26 CFR 54.9816-
8T(e)(2)(v), 29 CFR 2590.716-8(e)(2)(v), and 45 CFR 149.510(e)(2)(v). 
Finally, also excluded is a disclosure of IIHI when a certified IDR 
entity has a good faith belief that an unauthorized person to whom the 
disclosure was made would not reasonably have been able to retain such 
information. For example, if, while conducting an IDR payment 
determination, a certified IDR entity sends paperwork containing IIHI 
to the wrong address and the paperwork is returned by the post office, 
unopened, as undeliverable, the certified IDR entity can conclude that 
the entity at the improper address could not reasonably have retained 
the information. The definition of breach additionally provides that an 
acquisition, access, use, or disclosure of IIHI in a manner not 
permitted under 26 CFR 54.9816-8T(e)(2)(v), 29 CFR 2590.716-8(e)(2)(v), 
and 45 CFR 149.510(e)(2)(v) is presumed to be a breach unless the 
certified IDR entity demonstrates that there is a low probability that 
the security or privacy of the IIHI has been compromised based on a 
risk assessment of at least the following factors: (1) The nature and 
extent of the IIHI involved, including the types of identifiers and the 
likelihood of re-identification; (2) the unauthorized person who used 
the IIHI or to whom the disclosure was made; (3) whether the IIHI was 
actually acquired or viewed; and (4) the extent to which the risk to 
the IIHI has been mitigated.
    Additionally, ``qualified IDR item or service'' means an item or 
service that is either an emergency service furnished by a 
nonparticipating provider or nonparticipating emergency facility 
subject to the protections of 26 CFR 54.9816-4T, 29 CFR 2590.716-4, or 
45 CFR 149.110, for which the conditions of 45 CFR 149.410(b) 
(regarding receipt of notice of surprise billing protections and 
providing consent to waive them) are not met. The term also means an 
item or service furnished by a nonparticipating provider at a 
participating health care facility subject to the requirements of 26 
CFR 54.9816-5T, 29 CFR 2590.716-5, and 45 CFR 149.120, for which the 
conditions of 149.420(c)-(i) (regarding receipt of notice of surprise 
billing protections and providing consent to waive them) are not met, 
for which the provider or facility (as applicable) or plan or issuer 
submits a valid Notice of IDR Initiation initiating the Federal IDR 
process. For the Notice of IDR Initiation to be valid, the open 
negotiation period under 26 CFR 54.9816-8T(b)(1), 29 CFR 2590.716-
8(b)(1), and 45 CFR 149.510(b)(1) must have lapsed, and an agreement on 
the payment amount must not have been reached. The term qualified IDR 
item or service includes air ambulance services provided by 
nonparticipating providers of air ambulance services subject to the 
protections of 26 CFR 54.9817-1T, 29 CFR 2590.717-1, and 45 CFR 
149.130, as these services are defined in 26 CFR 54.9816-3T, 29 CFR 
2590.716-3, and 45 CFR 149.30, for which the open negotiation period 
under 26 CFR 54.9816-8T(b)(1), 29 CFR 2590.716-8(b)(1), and 45 CFR 
149.510(b)(1) has lapsed, and no agreement on the payment amount has 
been reached.
    The term ``qualified IDR item or service'' does not include items 
and services for which the out-of-network rate is determined by an All-
Payer Model Agreement under section 1115A of the Social Security Act, 
or by reference to a specified state law. Additionally, this term does 
not include items or services submitted by the initiating party that 
are subject to the 90-calendar-day suspension period under 26 CFR 
54.9816-8T(c)(4)(vii)(B), 29 CFR 2590.716-8(c)(4)(vii)(B), and 45 CFR 
149.510(c)(4)(vii)(B). However, the term may include items or services 
that are subject to the 90-calendar-day suspension period if they are 
submitted during the subsequent 30-business-day period, as allowed 
under these interim final rules. The Departments solicit comment on 
these definitions, including whether other terms should be defined.

B. The Term ``Days''

    The No Surprises Act specifies a number of time periods that 
providers, facilities, providers of air ambulance services, plans, 
issuers, certified IDR entities, and the Departments must abide by 
throughout the course of the Federal IDR process, including time 
periods for initiation of the Federal IDR process, selection of a 
certified IDR entity, submission of documents, and payment 
determinations. The statute is largely silent on whether the term 
``days'' used in these provisions means business days or calendar days. 
However, in certain provisions, the No Surprises Act specifies the use 
of calendar days or business days, indicating that where the statute is 
silent the Departments may choose either meaning. The Departments 
received feedback from stakeholders that meeting various deadlines 
under the Federal IDR process may be challenging (for example, 
depending on a certified IDR entity's case load or the number of claims 
that a provider or facility batches together) and that, if possible, 
additional time should be provided for the parties and the certified 
IDR entity to meet these deadlines. The Departments are of the view 
that in order to provide parties with the most time permitted under the 
statute to meet the various deadlines under the Federal IDR process as 
set forth in the No Surprises Act, business days should be used, unless 
there is a reason to use calendar days. For example, these interim 
final rules provide that calendar days are used for the timing 
requirement for the non-prevailing party to make payment after the 
certified IDR entity issues a written determination, as well as the 
requirement barring the initiation of the Federal IDR process for a 
payment dispute that concerns the same or similar qualified IDR item or 
service that was the subject of the initial notification during the 90-
calendar-day period following the initial determination discussed later 
in this preamble. In these instances, the Departments are of the view 
that once a decision has been rendered, these interim final rules 
should not unduly delay the payment entitled under that decision. 
Moreover, in terms of the 90-day suspension period, the Departments are 
of the view that using a business day standard here has the potential 
to create an unnecessary barrier to accessing the Federal IDR process.
    Furthermore, the Departments are of the view that using business 
days will avoid issues that may arise if deadlines were to fall on 
weekends or Federal holidays. Therefore, business days (Monday through 
Friday, not including Federal holidays) instead of calendar days are 
used throughout these interim final rules for the Federal IDR process 
unless otherwise indicated, regardless of whether a nonparticipating 
provider or facility, or a plan or issuer's business typically operates 
on weekend days.

C. Open Negotiation and Initiation of the Federal IDR Process

    Code section 9816(c)(1)(A), ERISA section 716(c)(1)(A), PHS Act 
section 2799A-1(c)(1)(A), and these interim final rules provide that 
with respect to an emergency service, a nonemergency

[[Page 55990]]

item or service furnished by a nonparticipating provider at a 
participating facility subject to the surprise billing protections for 
which the notice and consent exceptions do not apply, and for which the 
out-of-network rate is not determined by reference to an All-Payer 
Model Agreement under section 1115A of the Social Security Act or 
specified state law as defined in 26 CFR 54.9816-3T, 29 CFR 2590.716-3, 
and 45 CFR 149.30, the provider or facility, or plan or issuer, may 
engage in open negotiations to determine the total out-of-network rate 
(including any cost sharing). If the parties fail to reach an agreement 
through open negotiation, they may initiate the Federal IDR process. 
Code section 9817(b), ERISA section 717(b), and PHS Act section 2799A-
2(b) provide that out-of-network rates for air ambulance services may 
be determined through open negotiation or an IDR process that is 
largely identical to the process provided for in Code section 9816(c), 
ERISA section 716(c), and PHS Act section 2799A-1(c), provided the out-
of-network rate is not determined by reference to an All-Payer Model 
Agreement under section 1115A of the Social Security Act or specified 
state law as defined in 26 CFR 54.9816-3T, 29 CFR 2590.716-3, and 45 
CFR 149.30. Therefore, where applicable, providers of air ambulance 
services are included in the preamble and regulatory language text 
describing open negotiations and the Federal IDR process. The primary 
distinctions between air ambulance services and other health care 
services apply in how the certified IDR entity should select an offer 
and in the obligations on the certified IDR entity regarding reporting 
of information relating to the Federal IDR process.
1. Open Negotiation
    The open negotiation period may be initiated by any party during 
the 30-business-day period beginning on the day the nonparticipating 
provider, facility, or nonparticipating provider of air ambulance 
services receives either an initial payment or a notice of denial of 
payment for an item or service.\23\ If the provider, facility, or 
provider of air ambulance services accepts such initial payment as the 
total payment, that initial payment combined with the cost-sharing 
amount for the item or service is the out-of-network rate, as defined 
in 26 CFR 54.9816-3T, 29 CFR 2590.716-3, and 45 CFR 149.30. Under the 
July 2021 interim final rules, the plan or issuer must provide in 
writing, with each initial payment or notice of denial of payment, 
certain information, including a statement that if the provider, 
facility, or provider of air ambulance services, as applicable, wishes 
to initiate a 30-business-day open negotiation period for purposes of 
determining the out-of-network rate, the provider, facility, or 
provider of air ambulance services may contact the appropriate person 
or office to initiate open negotiation, and that if the 30-business-day 
open negotiation period does not result in an agreement on the out-of-
network rate, generally, the provider, facility, or provider of air 
ambulance services may initiate the Federal IDR process. The plan or 
issuer must also provide contact information, including a telephone 
number and email address, for the appropriate person or office to 
initiate open negotiations for purposes of determining an amount of 
payment (including cost sharing) for the item or service.
---------------------------------------------------------------------------

    \23\ As clarified in the July 2021 interim final rules, the 
initial payment should be an amount that the plan or issuer 
reasonably intends to be payment in full based on the relevant facts 
and circumstances, prior to the beginning of any open negotiations 
or initiation of the Federal IDR process.
---------------------------------------------------------------------------

    In order for a plan, issuer, provider, facility, or provider of air 
ambulance services to know when it is a party to an open negotiation 
period and which items or services are subject to negotiation, these 
interim final rules require that the party initiating the open 
negotiation must provide written notice to the other party of its 
intent to negotiate, referred to as an open negotiation notice. The 
open negotiation notice must include information sufficient to identify 
the items or services subject to negotiation, including the date the 
item or service was furnished, the service code, the initial payment 
amount or notice of denial of payment, as applicable, an offer for the 
out-of-network rate, and contact information of the party sending the 
open negotiation notice. The open negotiation notice must be sent 
within 30 business days of the initial payment or notice of denial of 
payment from the plan or issuer regarding such item or service and must 
be provided in writing. The party sending the open negotiation notice 
may satisfy this requirement by providing the notice to the opposing 
party electronically (such as by email) if the following two conditions 
are satisfied: (1) The party sending the open negotiation notice has a 
good faith belief that the electronic method is readily accessible to 
the other party; and (2) the notice is provided in paper form free of 
charge upon request. For example, if a provider sends an open 
negotiation notice to the email address identified by the group health 
plan or issuer in the notice of denial or initial payment, such 
electronic delivery would satisfy this requirement (as long as the 
provider also sends the notice in paper form free of charge upon 
request). Similarly, if a provider, facility, or provider of air 
ambulance services submits a claim electronically, this could provide 
the plan or issuer with a good faith belief that the electronic method 
is readily accessible to the other party.
    The 30-business-day open negotiation period begins on the day on 
which the open negotiation notice is first sent by a party. The 
Departments expect that most open negotiation notices will be sent 
electronically, and that, in general, the date the notice is sent will 
also be the date the notice is received. Furthermore, given that the 
parties have already made initial contact (namely that the provider or 
facility has transmitted a bill to the plan or issuer, and the plan or 
issuer has sent a notice of denial or initial payment to the provider 
or facility), the Departments anticipate that the parties should be 
able to provide effective notice without problems, and encourage the 
parties to take reasonable measures to ensure that actual notice is 
provided, such as confirming that the email address is accurate. The 
Departments caution that if the open negotiation notice is not properly 
provided to the other party (and no reasonable measures have been taken 
to ensure actual notice has been provided), the Departments may 
determine that the 30-business-day open negotiation period has not 
begun. In such case, any subsequent payment determination from a 
certified IDR entity may be unenforceable due to the failure of the 
party sending the open negotiation notice to meet the open negotiation 
requirement of these interim final rules. Therefore, the Departments 
encourage parties submitting open negotiation notices to take steps to 
confirm the other party's contact information and confirm receipt by 
the other party, through approaches such as read receipts, especially 
where a party does not initially respond to an open negotiation notice. 
The Departments solicit comment on whether there are any challenges or 
additional clarifications needed to ensure the parties are afforded the 
full open negotiation period, including whether there are any 
challenges regarding designating the date the notice is sent as the 
commencement date of the open negotiation period.
    To facilitate communication between parties and compliance with 
this notice requirement, the Departments are concurrently issuing a 
standard notice

[[Page 55991]]

that the parties must use to satisfy the open negotiation notice 
requirement.
    Negotiation during the open negotiation period will occur without 
the involvement of the Departments or a certified IDR entity. The 
Departments note that this requirement for a 30-business-day open 
negotiation period prior to initiating the Federal IDR process does not 
preclude the parties from reaching an agreement in fewer than 30 
business days. However, in the event the parties do not reach an 
agreement, the parties must still exhaust the 30-business-day open 
negotiation period before either party may initiate the Federal IDR 
process. The Departments encourage parties to negotiate in good faith 
during this time period to reach an agreement on the out-of-network 
rate. To the extent parties reach agreement during this period, they 
can avoid the administrative costs associated with the Federal IDR 
process.
2. Initiating the Federal IDR Process and the Notice of IDR Initiation
    Code section 9816(c)(1)(B), ERISA section 716(c)(1)(B), PHS Act 
section 2799A-1(c)(1)(B), and these interim final rules provide that 
with respect to items or services that were subject to open 
negotiation, if the parties have not reached an agreed-upon amount for 
the out-of-network rate by the last day of the open negotiation period, 
either party may initiate the Federal IDR process during the 4-
business-day period beginning on the 31st business day after the start 
of the open negotiation period. A party may not initiate the Federal 
IDR process if, with respect to an item or service, the party knows or 
reasonably should have known that the provider or facility provided 
notice and obtained consent from a participant, beneficiary, or 
enrollee to waive surprise billing protections consistent with PHS Act 
sections 2799B-1(a) and 2799B-2(a) and the implementing regulations at 
45 CFR 149.410(b) and 149.420(c)-(i).
    To initiate the Federal IDR process, the initiating party must 
submit a notice to the other party and to the Departments (Notice of 
IDR Initiation) through the Federal IDR portal. The Notice of IDR 
Initiation must include: (1) Information sufficient to identify the 
qualified IDR items or services (and whether the qualified IDR items or 
services are designated as batched items and services), including the 
dates and location of the items or services, the type of qualified IDR 
items or services (such as emergency services, post-stabilization 
services, professional services, hospital-based services), 
corresponding service and place-of-service codes, the amount of cost 
sharing allowed and the amount of the initial payment made by the plan 
or issuer for the qualified IDR items or services, if applicable; (2) 
the names and contact information of the parties involved, including 
email addresses, phone numbers, and mailing addresses; (3) the state 
where the qualified IDR items or services were furnished; (4) the 
commencement date of the open negotiation period; (5) the initiating 
party's preferred certified IDR entity; (6) an attestation that the 
items or services are qualified IDR items and services within the scope 
of the Federal IDR process; (7) the QPA; (8) information about the QPA 
as described in 26 CFR 54.9816-6T(d), 29 CFR 2590.716-6(d), and 45 CFR 
149.140(d); and (9) general information describing the Federal IDR 
process. This general information will help ensure that the non-
initiating party is informed about the process and is familiar with the 
next steps. Such general information should include a description of 
the scope of the Federal IDR process and key deadlines in the Federal 
IDR process, including the dates to initiate the Federal IDR process, 
how to select a certified IDR entity, and the process for selecting an 
offer. The Departments have developed a form that parties must use to 
satisfy this requirement to provide general information describing the 
Federal IDR process.
    As with the open negotiation notice, the initiating party may 
provide the Notice of IDR Initiation to the opposing party 
electronically (such as by email) if the following two conditions are 
satisfied: (1) The initiating party has a good faith belief that the 
electronic method is readily accessible by the other party; and (2) the 
notice is provided in paper form free of charge upon request.
    In addition to furnishing notice to the non-initiating party, the 
initiating party must also furnish the Notice of IDR Initiation to the 
Departments on the same day the notice is furnished to the non-
initiating party. The initiating party must provide its Notice of IDR 
Initiation through the Departments' Federal IDR portal. Moreover, IDR 
entities, certified IDR entities and disputing parties will be required 
to use the Federal IDR portal to perform certain functions related to 
the Federal IDR process. The Federal IDR portal will be used to 
facilitate and support IDR entity certification, the initiation of the 
Federal IDR process, the selection of certified IDR entities, the 
submission of supporting documentation to certified IDR entities, and 
the submission of certified IDR entity reporting metrics, as required 
by these interim final rules.
    Under Code section 9816(c)(1)(B), ERISA section 716(c)(1)(B), and 
PHS Act section 2799A-1(c)(1)(B), the date of initiation of the Federal 
IDR process will be the date of the submission or such other date 
specified by the Departments that is not later than the date of receipt 
of the Notice of IDR Initiation by both the other party and the 
Departments. Consistent with the flexibility provided by the statute to 
specify an alternate date of initiation, these interim final rules 
specify that the initiation date of the Federal IDR process is the date 
of receipt of the Notice of IDR Initiation by the Departments. As 
noted, since the Departments will monitor the Federal IDR portal, 
submitting the Notice of IDR Initiation through the Federal IDR portal 
will provide a clear date on which the Notice of IDR Initiation has 
been received by the Departments. This approach will better enable the 
Departments to meet the statutory requirement to select a certified IDR 
entity within 6 business days of the initiation of the IDR process in 
instances in which the parties have not jointly selected a certified 
IDR entity. The Departments will acknowledge and confirm the initiation 
date with both parties upon receipt of the Notice of IDR Initiation. 
Given that the Departments expect most of these notices to be provided 
electronically, and that the parties will have been in continuous 
contact by this point in the process (through the submission of the 
initial bill, the remittance of the initial payment of the claim or 
notice of denial of payment, the submission of the open negotiation 
notice, and negotiations during the open negotiation period), the 
Departments expect minimal delay between when the Departments are 
notified through the portal and when the opposing party is notified 
(either by the initiating party or the Departments). The Departments 
solicit comment on both the content of the Notice of IDR Initiation as 
well as the manner for providing the notices as set forth under these 
interim final rules.

D. Federal IDR Process Following Initiation

1. Selection of Certified IDR Entity
    Under Code section 9816(c)(4)(F), ERISA section 716(c)(4)(F), and 
PHS Act section 2799A-1(c)(4)(F), the plan or issuer and the 
nonparticipating provider, nonparticipating emergency facility, or 
nonparticipating provider of air ambulance services (as applicable) 
that are parties to the Federal IDR process may jointly select a 
certified IDR entity no later than 3 business days

[[Page 55992]]

following the date of the IDR initiation. As stated above, in 
initiating the Federal IDR process, the initiating party will indicate 
its preferred certified IDR entity in the Notice of IDR Initiation. 
Under these interim final rules, the party in receipt of the Notice of 
IDR Initiation may agree or object to the selection of the preferred 
certified IDR entity identified in the Notice of IDR Initiation. If the 
non-initiating party in receipt of the Notice of IDR Initiation fails 
to object within 3 business days of the date of initiation of the 
Federal IDR process, the preferred certified IDR entity identified in 
the Notice of IDR Initiation will be the selected certified IDR entity, 
provided that the certified IDR entity does not have a conflict of 
interest. If the party in receipt of the Notice of IDR Initiation 
timely objects, that party must timely notify the initiating party of 
the objection, including an explanation of the reason for objecting, 
and propose an alternative certified IDR entity. The initiating party 
must then agree or object to the alternative certified IDR entity. In 
order to jointly select a certified IDR entity, the plan or issuer and 
the nonparticipating provider, nonparticipating emergency facility, or 
nonparticipating provider of air ambulance services must agree on a 
certified IDR entity not later than 3 business days after the date of 
initiation of the Federal IDR process. Due to the short timeframe for 
this selection, the Departments anticipate that communication between 
the parties regarding certified IDR entity selection will typically be 
conducted through electronic mail to the email addresses used to send 
and receive the Notice of IDR Initiation. The Departments anticipate 
that most users of the Federal IDR process will be providers, 
facilities, providers of air ambulance services, plans, and issuers, 
which are likely to use electronic communications regularly. If both 
parties agree on and select a certified IDR entity, or fail to agree 
upon a certified IDR entity within the specified timeframe, the 
initiating party must notify the Departments by electronically 
submitting the notice of the certified IDR entity selection or failure 
to select (as applicable), no later than 1 business day after the end 
of the 3-business-day period (or in other words, 4 business days after 
the date of initiation of the Federal IDR process) through the Federal 
IDR portal. In addition, in instances where the non-initiating party 
believes that the Federal IDR process is not applicable, the non-
initiating party must notify the Departments through the Federal IDR 
portal within the same timeframe that the notice of selection (or 
failure to select) is required and provide information regarding the 
lack of applicability. Based upon this information and any additional 
information requested by the selected certified IDR entity, the 
selected certified IDR entity will determine whether the Federal IDR 
process is applicable. The Departments seek comment on this approach 
and whether any challenges exist in relying solely upon electronic 
notifications.
    The Departments will make available on the Federal IDR portal a 
list of certified IDR entities among which parties to the Federal IDR 
process may select, including basic information about the certified IDR 
entities, such as contact information, certified IDR entity numbers 
(unique identification numbers assigned to each certified IDR entity by 
the Departments), websites, and service areas. The Departments seek 
comment on this approach, including whether additional information 
about the certified IDR entities should be made public, and whether any 
challenges exist in relying solely upon electronic notifications.
    Under these interim final rules, the selected certified IDR entity 
must not have a conflict of interest as defined in 26 CFR 54.9816-
8T(a)(2), 29 CFR 2590.716-8(a)(2), and 45 CFR 149.510(a)(2). The 
selected certified IDR entity must also ensure that assignment of 
personnel to the dispute and decisions regarding hiring, compensation, 
termination, promotion, or other similar matters related to personnel 
assigned to the dispute are not made based upon the likelihood that the 
assigned personnel will support a particular party or type of party 
(that is, provider, facility, provider of air ambulance services, plan, 
or issuer) to the determination being disputed other than as outlined 
under 26 CFR 54.9816-8T(c)(4)(iii), 29 CFR 2590.716-8(c)(4)(iii), and 
45 CFR 149.510(c)(4)(iii). Also, as agents of the certified IDR entity, 
personnel responsible for handling individual payment determinations 
must comply with the certification requirements of these interim final 
rules as set forth by their principal, the certified IDR entity, in its 
procedures. Therefore, the personnel assigned to disputes by the 
certified IDR entity must not have a conflict of interest, as defined 
by 26 CFR 54.9816-8T(a)(2), 29 CFR 2590.716-8(a)(2), and 45 CFR 
149.510(a)(2). In addition, any personnel assigned to the matter must 
not have been a party to the determination being disputed or an 
employee or agent of such a party within the 1 year immediately 
preceding the dispute resolution assignment, similar to the ``revolving 
door'' laws \24\ laid out in 18 U.S.C. 207(b), 207(c), and 207(e). 
Under 18 U.S.C. 207(b), 207(c), and 207(e), former officers or 
employees of the executive branch, including independent agencies, are 
prohibited from aiding or advising on matters with which they were 
involved while in the executive branch for 1 year. These interim final 
rules adopt the same 1-year timeframe by prohibiting former employees' 
or agents' involvement in dispute resolution processes involving former 
employers for 1 year. The Departments are of the view that this 
approach provides a reasonable and appropriate standard for preventing 
conflicts of interest. Although 18 U.S.C. 207(b), 207(c), and 207(e) 
are typically used in reference to trade or treaty negotiations, the 1-
year prohibition is also a standard applied generally to employees of 
the executive and legislative branches and independent agencies. These 
statutes represent conflict-of-interest standards that the Departments 
view as reasonable and appropriate for developing standards for 
preventing conflicts of interest involving certified IDR entities that 
are resolving disputes in the Federal IDR process. Certified IDR 
entities are expected to ensure staff compliance with the standards of 
these interim final rules, and as such, attestations of no conflict of 
interest at the organization level are intended also to represent the 
absence of conflicts of interest among the employees and agents of the 
certified IDR entity.
---------------------------------------------------------------------------

    \24\ Maskell, J., Post-Employment, ``Revolving Door,'' Laws for 
Federal Personnel. Congressional Research Service. 2014. https://fas.org/sgp/crs/misc/R42728.pdf.
---------------------------------------------------------------------------

    The Departments anticipate that certified IDR entities will likely 
be limited to organizations with sufficient staff who have arbitration 
and health care claims experience, including entities currently 
providing services for external review or state IDR determinations. To 
further ensure that personnel assigned to any determination in the 
Federal IDR process do not have a conflict of interest, the Departments 
have included additional safeguards for personnel, as well as an 
additional requirement that the certified IDR entity have procedures in 
place to ensure adherence by personnel with these additional 
safeguards. Accordingly, at the time of application for certification, 
the IDR entity must attest that it has procedures in place to ensure 
that no conflicts of interest exist or will exist, as set forth in the 
discussion of

[[Page 55993]]

certification requirements later in this preamble. As an additional 
requirement, certified IDR entities will have had to submit, as part of 
their application to be certified IDR entities, policies and procedures 
for conducting ongoing audits for conflicts of interest, to ensure that 
should any arise, the certified IDR entity procedures in place to 
inform the Departments of the conflict of interest and mitigate the 
risk by reassigning the dispute to other personnel in the event that 
any personnel previously assigned have a conflict of interest.
    If the parties have agreed on a certified IDR entity, the notice of 
the certified IDR entity selection must include the following 
information: (1) The name of the certified IDR entity; (2) the 
certified IDR entity number; and (3) an attestation by both parties (or 
by the initiating party if the other party has not responded) that the 
selected certified IDR entity does not have a conflict of interest. The 
attestation must be submitted based on conducting a conflicts of 
interest check using information available (or accessible using 
reasonable means) to the parties (or the initiating party if the other 
party has not responded) at the time of the selection.
    As stated earlier in this preamble, upon receipt of notification 
that the parties failed to agree on a certified IDR entity, the 
Departments will select a certified IDR entity. In such instances, the 
Departments will randomly select a certified IDR entity that charges a 
fee within the allowed range provided for in guidance and defined 
further in section III.D.4.viii of this preamble. If there are 
insufficient certified IDR entities that charge a fee within the 
allowed range available to adjudicate the payment determination, the 
Departments will randomly select a certified IDR entity that has 
received approval to charge a fee outside of the allowed range. The 
Departments will make the random selection not later than 6 business 
days after the date of initiation of the Federal IDR process, and will 
notify the parties of the selection. The Departments considered 
alternative approaches to randomly selecting a certified IDR entity, 
including whether the Departments should consider the specific fee of 
the certified IDR entity or look to other factors, such as how often 
the certified IDR entity chooses the amount closest to the QPA. 
Following consideration of various approaches, the Departments have 
chosen to utilize a random selection method to select a certified IDR 
entity that charges a fee within the allowed range (or has received 
approval from the Departments to charge a fee outside of the allowed 
range, if there are insufficient certified IDR entities that charge a 
fee within the allowed range available) and that does not have a 
conflict of interest with either party. The Departments are of the view 
that this approach will help ensure that requests for IDR and workload 
associated with making determinations for such requests are 
appropriately distributed across the certified IDR entities, will 
result in an efficient and timely assignment of a certified IDR entity 
to payment determinations, and will protect against bias in the types 
of cases a certified IDR entity reviews while encouraging certified IDR 
entities to charge reasonable fees for their services. Additionally, 
the Departments are of the view that this approach will provide 
predictability to the parties regarding the fees they will be expected 
to pay if they do not select the certified IDR entity. The Departments 
seek comment on this approach, including whether the random selection 
method should be limited only to certified IDR entities that charge a 
fee within the allowed range. The Departments may issue future guidance 
regarding whether entities that have received approval from the 
Departments to charge a fee outside of the allowed range may be 
selected by the Departments under the random selection method.
    After selection by the parties (including when the initiating party 
selects a certified IDR entity and the other party does not object), or 
by the Departments, the certified IDR entity must also review its 
selection to ensure that it meets the requirements of 26 CFR 54.9816-
8T(c)(1)(ii), 29 CFR 2590.716-8(c)(1)(ii), and 45 CFR 149.510(c)(1)(ii) 
related to potential conflicts of interest. If the selected certified 
IDR entity meets these requirements, the certified IDR entity must 
attest to meeting these requirements. If the certified IDR entity is 
unable to attest that it meets these requirements, the certified IDR 
entity must notify the Departments through the Federal IDR portal 
within 3 business days, after which the Departments will notify the 
parties. Upon notification, the parties will have 3 business days to 
select another certified IDR entity under the process described in 26 
CFR 54.9816-8T(c)(1), 29 CFR 2590.716-8(c)(1), or 45 CFR 149.510(c)(1). 
If the parties notify the Departments that they have not agreed on a 
certified IDR entity, the Departments may randomly select another 
certified IDR entity.
    The certified IDR entity must also review the information submitted 
by the parties to determine whether the Federal IDR process applies, 
including whether an All-Payer Model Agreement or specified state law 
applies. If the Federal IDR process does not apply, the certified IDR 
entity must notify the Departments and the parties within 3 business 
days of making this determination.
2. Authority To Continue Negotiation
    Code sections 9816(c)(2)(B) and 9817(b)(2)(B), ERISA sections 
716(c)(2)(B) and 717(b)(2)(B), PHS Act sections 2799A-1(c)(2)(B) and 
2799A-2(b)(2)(B), and these interim final rules provide that, in 
instances in which the parties agree on an amount for a qualified IDR 
item or service after the Federal IDR process is initiated but prior to 
a determination by a certified IDR entity, the agreed-upon amount will 
be treated as the out-of-network rate and will be treated as resolving 
the dispute. If the parties to the Federal IDR process agree on an out-
of-network rate for a qualified IDR item or service after providing to 
the Departments the Notice of IDR Initiation, but before the certified 
IDR entity has made its payment determination, the initiating party 
must notify the Departments and the certified IDR entity (if selected) 
by electronically submitting notification of such agreement through the 
Federal IDR portal as soon as possible but no later than 3 business 
days after the date of the agreement. As is the case in instances where 
the parties do not come to an agreement before the certified IDR entity 
selects the amount submitted by one of the parties, the amount by which 
this agreed-upon out-of-network rate exceeds the cost-sharing amount 
for the qualified IDR item or service is the total plan or coverage 
payment.\25\ The plan or issuer must pay the balance of the total plan 
or coverage amount of the agreed-upon out-of-network rate (with any 
initial payment made counted towards the total plan or coverage 
payment) to the nonparticipating provider, nonparticipating emergency 
facility, or nonparticipating provider of air ambulance services not 
later than 30 business days after the agreement is reached. As noted in 
section III.D.4.viii of this preamble regarding costs of the Federal 
IDR process, when there is an agreement after initiation and a 
certified IDR entity is selected but prior to a determination by the 
certified IDR entity, each party must pay half of the certified IDR 
entity fee, unless the parties agree otherwise on a method for 
allocating the applicable fee. In no instance may either party seek

[[Page 55994]]

additional payment from the participant or beneficiary, including in 
instances in which the out-of-network rate exceeds the QPA. When an 
agreement is reached, either before or after a certified IDR entity is 
selected, notification to the Departments must include the out-of-
network rate (that is, the total payment amount, including both cost 
sharing and the total plan or coverage payment) and signatures from an 
authorized signatory for each party.
---------------------------------------------------------------------------

    \25\ See 26 CFR 54.9816-4T, 54.9816-5T, and 54.9817-1T; 29 CFR 
2590.716-4, 2590.716-5, and 2590.717-1; and 45 CFR 149.110, 149.120, 
and 149.130.
---------------------------------------------------------------------------

3. Treatment of Batched Items and Services
    Code section 9816(c)(3), ERISA section 716(c)(3), and PHS Act 
section 2799A-1(c)(3) direct the Departments to specify criteria under 
which multiple qualified IDR items and services may be considered 
jointly as part of one payment determination (batching). Under these 
interim final rules, multiple claims for qualified IDR items and 
services may be submitted and considered jointly as part of one payment 
determination by a certified IDR entity (batched items and services) 
only if certain conditions are met. Batched items and services 
submitted and considered jointly as part of one payment determination 
under 26 CFR 54.9816-8T(c)(3)(i), 29 CFR 2590.716-8(c)(3)(i), 45 CFR 
149.510(c)(3)(i) are subject to the fee for batched determinations 
under these interim final rules.
    First, the qualified IDR items and services must be billed by the 
same provider or group of providers or facility or same provider of air 
ambulance services. Items and services are billed by the same provider 
or group of providers or facility or same provider of air ambulance 
services if the items or services are billed with the same National 
Provider Identifier (NPI) or Taxpayer Identification Number (TIN).
    Second, the payment for the items and services would be made by the 
same group health plan or health insurance issuer.
    Third, the qualified IDR items and services must be the same or 
similar items or services. The definition of a same or similar item or 
service in these interim final rules is consistent with the definition 
under the July 2021 interim final rules. The Departments defined a same 
or similar item or service in 26 CFR 54.9816-6T(a)(13), 29 CFR 
2590.716-6(a)(13), and 45 CFR 149.140(a)(13) as those items and 
services that are billed under the same service code, or a comparable 
code under a different procedural code system, and the Departments 
defined the service codes as the code that describes an item or service 
using Current Procedural Terminology (CPT), Healthcare Common Procedure 
Coding System (HCPCS), or Diagnosis-Related Group (DRG) codes.
    Finally, all the qualified IDR items and services must have been 
furnished within the same 30-business-day period, or the 90-calendar-
day suspension period described later in this preamble. Therefore, if 
items or services are furnished within the 90-calendar-day suspension 
period and meet the other applicable requirements, they may be 
submitted and considered jointly as part of one payment determination 
by a certified IDR entity, once the suspension period has ended. Under 
Code section 9816(c)(9), ERISA section 716(c)(9), and PHS Act section 
2799A-1(c)(9), the Departments may provide an alternative period to the 
aforementioned 30-business-day period as determined by the Departments 
for certain circumstances, such as low-volume items and services. The 
Departments are using this authority to ensure that items and services 
delivered during the 90-calendar-day suspension period are eligible for 
the Federal IDR process and may be included in the same batch.
    The Departments are of the view that the approach set forth to 
allow for batching of multiple qualified IDR items and services will 
avoid combinations of unrelated claims, providers, facilities, 
providers of air ambulance services and plans and issuers in a single 
dispute that could unnecessarily complicate an IDR payment 
determination and create inefficiencies in the Federal IDR process. The 
Departments solicit comment on this approach and whether there is a 
need to prescribe an alternative period for other qualified IDR items 
and services different from the 30-business-day period discussed 
earlier in the discussion of the batching requirements and what 
circumstances should be considered in defining any alternative period.
    Additionally, in some cases, a plan or issuer may pay a provider, 
facility, or provider of air ambulance services a single payment for 
multiple services an individual received during an episode of care 
(bundling). In the case of qualified IDR items or services that are 
billed by a provider, facility, or provider of air ambulance services 
as part of a bundled arrangement, or where a plan or issuer makes an 
initial payment as a bundled payment (or specifies that a denial of 
payment is made on a bundled payment basis), these interim final rules 
provide that those qualified items or services may be submitted and 
considered as part of one payment determination by a certified IDR 
entity (and is subject to the fee for single determinations under 26 
CFR 54.9816-8T(c)(3)(ii), 29 CFR 2590.716-8(c)(3)(ii), 45 CFR 
149.510(c)(3)(ii)).
    The Departments recognize that certain batched items and services 
may have different QPAs. For example, if a determination includes 
multiple batched claims for Service A furnished by Provider B to 
individuals covered by Issuer C, with some individuals covered by plans 
in the individual market and others covered by plans in the large group 
market, there likely would be two different QPAs for the certified IDR 
entity to consider--one QPA for the services furnished to individuals 
enrolled in individual market coverage, and one QPA for individuals 
with large group market coverage. As discussed elsewhere in this 
preamble, when this is the case, the parties must provide the relevant 
information for each QPA, and the certified IDR entity must consider 
each QPA for each item or service separately. However, since batched 
items and services involve the same or similar medical procedure, 
batching is likely to reduce redundant IDR proceedings as well as 
streamline the certified IDR entity's decision-making, as some of the 
considerations relate to factors not specific to the individual 
encounter.
    The Departments seek comment on all aspects of the criteria for 
batching claims and bundling, including whether additional conditions 
should be added to limit batching or whether the conditions should be 
amended to facilitate broader batching of qualified IDR items and 
services. The Departments also seek comment on how frequently 
nonparticipating providers, nonparticipating emergency facilities, or 
nonparticipating providers of air ambulance services will be reimbursed 
through a bundled payment and whether allowing items or services 
included in a bundled payment by a provider or facility to be treated 
as one payment determination could be used to circumvent the batching 
requirements by not requiring precise consideration of what specific 
claims within the batch should be arbitrated and which claims should 
not, thereby resulting in potential overuse of the Federal IDR process 
in a manner that creates inefficiencies.
4. Payment Determination
i. Submission of Offers
    Code section 9816(c)(5)(B), ERISA section 716(c)(5)(B), and PHS Act 
section 2799A-1(c)(5)(B) provide that, not later than 10 days after the 
date of selection of the certified IDR entity with respect to a 
determination for a

[[Page 55995]]

qualified IDR item or service, the plan or issuer and the 
nonparticipating provider, nonparticipating emergency facility, or 
provider of air ambulance services must each submit to the certified 
IDR entity an offer for a payment amount for such qualified IDR item or 
service. Under these interim final rules, the offer must be submitted 
not later than 10 business days after the selection of the certified 
IDR entity and must be expressed as both a dollar amount and the 
corresponding percentage of the QPA represented by that dollar amount, 
to facilitate the certified IDR entity reporting the offer as a 
percentage of the QPA to the Departments. Where batched items and 
services have different QPAs, the parties should provide these 
different QPAs and may provide different offers for these batched items 
and services, provided that the same offer should apply for all items 
and services with the same QPA.
    Parties to the Federal IDR process must also submit information 
requested by the certified IDR entity relating to the offer. The 
Departments intend for the Federal IDR portal to collect this 
information as part of the offer submission process, such that 
certified IDR entities will not have to directly request this 
information. Providers and facilities must also indicate the size of 
their practices and facilities at the time the information is 
submitted. This will enable certified IDR entities to report on the 
size of the provider practices and facilities, as required under 26 CFR 
54.9816-8T(f)(1)(ii), 29 CFR 2590.716-8(f)(1)(ii), and 45 CFR 
149.510(f)(1)(ii). Specifically, the provider must specify whether the 
provider practice or organization has fewer than 20 employees, 20 to 50 
employees, 51 to 100 employees, 101 to 500 employees, or more than 500 
employees. For facilities, the facility must specify whether the 
facility has 50 or fewer employees, 51 to 100 employees, 101 to 500 
employees, or more than 500 employees. Providers and facilities must 
also provide information on the practice specialty or type, 
respectively (if applicable). Similarly, plans and issuers must provide 
the coverage area of the plan or issuer, the relevant geographic region 
for purposes of the QPA, and, for group health plans, whether they are 
fully-insured, or partially or fully self-insured.\26\ FEHB carriers 
must identify if a particular item or service relates to FEHB plans. 
The information such as practice or facility size, coverage area, 
geographic region, and whether a plan is fully-insured or partially or 
fully self-insured is required to be submitted as part of an offer so 
that the certified IDR entities can report this information to the 
Departments. This information will inform the reports required from the 
Departments under Code section 9816(c)(7), ERISA section 716(c)(7), and 
PHS Act section 2799A-1(c)(7). Both parties must submit any other 
information requested by the certified IDR entity relating to such 
offer. In addition, parties may submit any information relating to the 
offer, except that the information may not include information that 
relates to usual and customary charges, billed amounts, and public 
payor rates as discussed later in this preamble.
---------------------------------------------------------------------------

    \26\ Pursuant to OPM contracts with FEHB carriers under 5 U.S.C. 
Ch. 89, all FEHB carriers offer fully insured health benefits plans 
in consideration of premium payments pursuant to contract terms, and 
no health benefits plan is self-insured by OPM or the federal 
government.
---------------------------------------------------------------------------

    With regard to the number of employees of a provider or facility, 
the Departments understand that hospitals and facilities may use a 
variety of methods for staffing, such as through contracting with 
physicians' practices or foundations whose physicians or medical staff 
are not considered employees of the hospital or facility. The 
Departments seek comment on whether additional guidance is needed to 
account for these situations in the reporting of provider and facility 
size.
ii. Selection of Offer for Qualified IDR Items or Services That Are Not 
Air Ambulance Services
    These interim final rules provide that, not later than 30 business 
days after the selection of the certified IDR entity, the certified IDR 
entity must select one of the offers submitted by the plan or issuer 
and the provider or facility to be the out-of-network rate for the 
qualified IDR item or service. For each qualified IDR item or service, 
the amount by which this out-of-network rate exceeds the cost-sharing 
amount for the qualified IDR item or service is the total plan or 
coverage payment (with any initial payment made counted towards the 
total plan or coverage payment). In selecting the offer, the certified 
IDR entity must presume that the QPA is an appropriate payment amount 
but must also consider the additional circumstances, following the 
requirements of 26 CFR 54.9816-8T(c)(4)(iii)(B) through (D), 29 CFR 
2590.716-8(c)(4)(iii)(B) through (D), and 45 CFR 149.510(c)(4)(iii)(B) 
through (D), only if the information is submitted by the parties. 
However, to be considered by the certified IDR entity, information 
submitted by the parties must be credible and relate to the offer 
submitted by either party, and must not include information on the 
prohibited factors described in 26 CFR 54.9816-8T(c)(4)(v), 29 CFR 
2590.716-8(c)(4)(v), or 45 CFR 149.510(c)(4)(v). After considering the 
QPA, additional information requested by the certified IDR entity from 
the parties, and all of the credible information that the parties 
submit that is consistent with the requirements in 26 CFR 54.9816-
8T(c)(4)(i)(A), 29 CFR 2590.716-8(c)(4)(i)(A), or 45 CFR 
149.510(c)(4)(i)(A), the certified IDR entity must select the offer 
closest to the QPA, unless the credible information submitted by the 
parties clearly demonstrates that the QPA is materially different from 
the appropriate out-of-network rate, based on the additional 
circumstances allowed under 26 CFR 54.9816-8T(c)(4)(iii)(B) through 
(D), 29 CFR 2590.716-8(c)(4)(iii)(B) through (D), or 45 CFR 
149.510(c)(4)(iii)(B) through (D) with respect to the qualified IDR 
item or service. In these cases, or when the offers are equally distant 
from the QPA but in opposing directions, the certified IDR entity must 
select the offer that the certified IDR entity determines best 
represents the value of the items or services, which could be either 
party's offer.
    These interim final rules define information as credible if upon 
critical analysis the information is worthy of belief and is 
trustworthy. These interim final rules also specify that a material 
difference exists where there is substantial likelihood that a 
reasonable person with the training and qualifications of a certified 
IDR entity making a payment determination would consider the 
information important in determining the out of network rate and view 
the information as showing that the QPA is not the appropriate out-of-
network rate under such additional circumstances.
    If the certified IDR entity determines that credible information 
about additional circumstances clearly demonstrates that the QPA is 
materially different from the appropriate out-of-network rate, the 
certified IDR entity must select the offer that the certified IDR 
entity determines best represents the appropriate out-of-network rate 
for the qualified IDR items or services, which could be either party's 
offer. Not later than 30 business days after the selection of the 
certified IDR entity, the certified IDR entity must also notify the 
plan or issuer and the provider or facility of the selection of the 
offer, and provide the written decision required under 26 CFR 54.9816-
8T(c)(4)(vi), 29 CFR 2590.716-8(c)(4)(vi), and 45 CFR 
149.510(c)(4)(vi).

[[Page 55996]]

    The Departments are of the view that the best interpretation of 
Code section 9816, ERISA section 716, and PHS Act section 2799A-1 is 
that when selecting an offer, a certified IDR entity must look first to 
the QPA, as it represents a reasonable market-based payment for 
relevant items and services, and then to other considerations. This 
presumption that the QPA is the appropriate out-of-network rate can be 
rebutted by presentation of credible information about additional 
circumstances, following the requirements of 26 CFR 54.9816-
8T(c)(4)(iii)(B) through (D), 29 CFR 2590.716-8(c)(4)(iii)(B) through 
(D), and 45 CFR 149.510(c)(4)(iii)(B) through (D), that clearly 
demonstrate that the QPA is materially different from the appropriate 
out-of-network rate. The statutory text lists the QPA as the first 
factor that the certified IDR entity must consider in determining which 
offer to select. The ``additional circumstances'' that the certified 
IDR entity must consider if relevant, credible information is provided 
are described in a separate paragraph, and the certified IDR entity's 
consideration of additional circumstances is subject to a prohibition 
on considering certain factors. Additionally, whereas the statute 
provides relatively limited guidance on how to consider or define these 
additional circumstances, the statute sets out detailed rules for 
calculating the QPA, suggesting that an accurate and clear calculation 
of the QPA is integral to the application of consumer cost sharing and 
to the certified IDR entity's determination of the out-of-network rate. 
For example, the statute includes a requirement that when plans and 
issuers do not have sufficient information to calculate their own 
median contracted rates, they utilize a database free of conflicts of 
interest.\27\ Plans and issuers must also provide specific information 
on how the QPA is calculated to nonparticipating providers and 
facilities, ensuring that they are aware of how this amount is 
calculated.\28\ Plans and issuers are also subject to audit 
requirements that will be enforced by the Departments to ensure that 
they follow these rules.\29\ Cost sharing for participants, 
beneficiaries, and enrollees for items and services will be based on 
the recognized amount, which will generally be the QPA for services 
eligible for the Federal IDR process, indicating that the QPA is a 
reasonable out-of-network rate. The Departments are also required to 
report how payment determinations compare to the corresponding QPA, 
reflecting that the QPA is a benchmark for determining the appropriate 
out-of-network rate.\30\ Taken together, these statutory elements 
reflect the importance the No Surprises Act assigns to the QPA in the 
Federal IDR process, and show that the statute contemplates that 
typically the QPA will be a reasonable out-of-network rate.
---------------------------------------------------------------------------

    \27\ Code section 9816(a)(2), (3)(E); ERISA section 716(a)(2), 
(3)(E), and PHS Act section 2799A-1(a)(2), (3)(E); 26 CFR 54.9816-
6T, 29 CFR 2590.716-6, and 45 CFR 149.140.
    \28\ Id.
    \29\ 86 FR 36872, 36899 (July 13, 2021).
    \30\ Code section 9816(c)(7)(A)(v), (B)(iii) and (iv); ERISA 
section 716(c)(7)(A)(v), (B)(iii) and (iv); and PHS Act section 
2799A-1(c)(7)(A)(v), (B)(iii) and (iv).
---------------------------------------------------------------------------

    The Departments are also of the view that policy considerations 
support the approach taken under these interim final rules regarding 
which offer a certified IDR entity must select. Generally, the QPA 
should reflect standard market rates arrived at through typical 
contract negotiations and should therefore be a reasonable out-of-
network rate under most circumstances. The QPA is generally based on 
the median of contracted rates, and these contracted rates are 
established through arms-length negotiations between providers and 
facilities and plans and issuers (or their service providers). 
Anchoring the determination of the out-of-network rate to the QPA will 
increase the predictability of IDR outcomes, which may encourage 
parties to reach an agreement outside of the Federal IDR process to 
avoid the administrative costs, and will aid in reducing prices that 
may have been inflated due to the practice of surprise billing prior to 
the No Surprises Act. Finally, anchoring the determination to the QPA 
will help limit the indirect impact on participants, beneficiaries, and 
enrollees that would occur from higher out-of-network rates if plans 
and issuers were to pass higher costs on to individuals in the form of 
increases in premiums.
    Accordingly, the certified IDR entity must begin with the 
presumption that the QPA is the appropriate out-of-network rate for the 
qualified IDR item or service under consideration. Therefore, in 
determining which offer to select, these interim final rules provide 
that the certified IDR entity must select the offer closest to the QPA, 
unless credible information presented by the parties rebuts that 
presumption and clearly demonstrates the QPA is materially different 
from the appropriate out-of-network rate, as discussed earlier in this 
section of the preamble.
    The Departments clarify that it is not the role of the certified 
IDR entity to determine whether the QPA has been calculated by the plan 
or issuer correctly, to make determinations of medical necessity, or 
review denials of coverage.\31\ Rather, the certified IDR entity is 
responsible for considering only the information presented by the 
parties to determine whether either party has presented credible 
information regarding additional circumstances, following the 
requirements set forth in paragraphs 26 CFR 54.9816-8T(c)(4)(iii)(B) 
through (D), 29 CFR 2590.716-8(c)(4)(iii)(B) through (D), and 45 CFR 
149.510(c)(4)(iii)(B) through (D), demonstrating that the QPA is 
materially different from the appropriate out-of-network rate, in order 
to rebut the presumption that the QPA is the appropriate out-of-network 
rate. For batched items and services, the certified IDR entity may 
select different offers, from either or both parties, when the QPAs for 
the qualified IDR items or services within the batch are different. The 
certified IDR entity may do so even if it does not select the offer 
closest to the QPA for a particular qualified IDR item or service due 
to the factors listed later in this section of the preamble, and 
instead selects the offer closest to the QPA for other qualified IDR 
items and services within the batch.
---------------------------------------------------------------------------

    \31\ However, if either the certified IDR entity or one of the 
parties believes the QPA has not been calculated in accordance with 
the requirements in 26 CFR 54.9816-6T, 29 CFR 2590.716-6, or 45 CFR 
149.140, the Departments encourage the certified IDR entity or the 
provider or facility to notify the applicable state or federal 
authority, or submit a complaint against the plan or issuer as set 
forth in 26 CFR 54.9816-7T, 29 CFR 2590.716-7, or 45 CFR 149.150, as 
applicable.
---------------------------------------------------------------------------

    In the Departments' view, the requirements set forth in these 
interim final rules regarding which offer a certified IDR entity must 
select, based on the presumption that the QPA is the appropriate 
payment amount and on the parties' ability to rebut that presumption, 
will help promote efficiency and predictability in the Federal IDR 
process, and will increase the likelihood that a certified IDR entity 
will generally select the offer closest to the QPA. While the QPA is 
the presumptive factor, the Departments are of the view that a clear 
standard indicating how a certified IDR entity may select an offer that 
is not closest to the QPA is necessary to help ensure consistency in 
how different certified IDR entities evaluate offers, which will help 
ensure that the Federal IDR process yields predictable outcomes and 
reduces administrative costs. Establishing a standard framework for 
certified IDR entities to evaluate factors furthers the intent of these 
interim final

[[Page 55997]]

rules to create equity and consistency in the Federal IDR process and 
aligns with other policies set forth in these interim final rules, such 
as the conflict-of-interest standards and the certification standards 
for IDR entities. Ensuring that all certified IDR entities apply the 
same standards will help ensure that the Federal IDR process is 
appropriately predictable, fair, and equitable.
    Although these interim final rules establish the QPA as the 
presumptive factor, these interim final rules and the underlying 
statute also specify additional circumstances that certified IDR 
entities must consider in selecting an offer, if a party submits 
information about the additional circumstance that the certified IDR 
entity determines is credible. These interim final rules also require 
that the parties provide certain information to the certified IDR 
entity, described previously in this preamble, regarding practice size, 
practice specialty or type; information about the plan or issuer's 
coverage area; information about the QPA; and, if applicable, 
information showing that the Federal IDR process is inapplicable to the 
dispute. In addition, the certified IDR entity may request additional 
information relating to the parties' offers and must consider credible 
information submitted to determine if it demonstrates that the QPA is 
materially different from the appropriate out-of-network rate (unless 
the information relates to a factor that the certified IDR entity is 
prohibited from considering).
    Regarding those factors, first, to the extent credible information 
is submitted by a party, the certified IDR entity must consider whether 
the credible information about the level of training, experience, and 
quality and outcome measurements (such as those endorsed by the 
consensus-based entity authorized under section 1890 of the Social 
Security Act) of the provider or facility that furnished the qualified 
IDR item or service clearly demonstrates that the QPA is materially 
different from the appropriate out-of-network rate for the qualified 
IDR item or service. In order for a certified IDR entity to consider 
this additional information submitted by a party, the credible 
information must clearly demonstrate that the QPA failed to take into 
account that the experience or level of training of a provider was 
necessary for providing the qualified IDR item or service to the 
patient or that the experience or training made an impact on the care 
that was provided. The Departments are of the view that qualified IDR 
items or services should not necessitate an out-of-network rate higher 
than the offer closest to the QPA, simply based on the level of 
experience or training of a provider, as this would lead to an increase 
in prices without a valid reason and does not align with the goals of 
the No Surprises Act. For instance, the out-of-network payment amount 
for the simple repair of a superficial wound (CPT codes 12001-12007) in 
most cases would not necessitate a rate higher than the QPA just 
because a provider has 30 years of experience versus 10 years of 
experience. Alternatively, if the plan's or issuer's contracted rates 
included risk-sharing, bonus, penalty, or other incentive-based or 
retrospective payments that were excluded for purposes of calculating 
the QPA for the items and services as required by the July 2021 interim 
final rules, a party may provide evidence as to why the provider's or 
facility's quality or outcome measures support an out-of-network rate 
that is different from the QPA and the certified IDR entity should 
consider whether this requires selecting an out-of-network rate that is 
higher (in the case of a bonus) or lower (in the case of a penalty) 
than the offer closest to the QPA.
    Second, to the extent credible information is submitted by a party, 
the certified IDR entity must consider whether the credible information 
about the market share held by the nonparticipating provider or 
facility or the plan (including, for self-insured plans, the market 
share of their third-party administrator (TPA) in instances where the 
self-insured plan relies on the TPA's networks) or issuer in the 
geographic region in which the qualified IDR item or service was 
provided, clearly demonstrates that the QPA is materially different 
from the appropriate out-of-network rate for the qualified IDR item or 
service. Research suggests that the market dominance of a provider or 
facility, or that of a plan or issuer, can drive reimbursement rates up 
or down in a given region.\32\ For instance, a plan or issuer having 
the majority of the market share in a geographic region may signal a 
QPA that is unreasonably low, as plans and issuers with a large market 
share may drive down rates,\33\ in which case an out-of-network rate 
higher than the offer closest to the QPA may be appropriate. 
Alternatively, a provider having the majority of the market share in a 
geographic region may signal a QPA that is unreasonably high, as 
providers with a large market share may drive up rates, in which case 
an out-of-network rate lower than the offer closest to the QPA may be 
appropriate.
---------------------------------------------------------------------------

    \32\ Schwartz, K., Lopez, E., Rae, M., Neuman, T. What We Know 
About Provider Consolidation. Kaiser Family Foundation. September 
2020. https://www.kff.org/health-costs/issue-brief/what-we-know-about-provider-consolidation/.
    \33\ See Richard M. Scheffler and Daniel R. Arnold. ``Insurer 
Market Power Lowers Prices in Numerous Concentrated Provider 
Markets.'' Health Affairs. 2017 36:9, 1539-1546; Glenn Melnick, Yu-
Chu Shen and Vivian Wu. ``The Increased Concentration Of Health Plan 
Markets Can Benefit Consumers Through Lower Hospital Prices.'' 
Health Affairs 30, no. 9.
---------------------------------------------------------------------------

    Third, to the extent credible information is submitted by a party, 
the certified IDR entity must consider whether the credible information 
about patient acuity or the complexity of furnishing the qualified IDR 
item or service to the participant, beneficiary, or enrollee clearly 
demonstrates that the QPA is materially different from the appropriate 
out-of-network rate for the qualified IDR item or service. In many 
cases, because the plan or issuer is required to calculate the QPA 
using median contracted rates for service codes, as well as modifiers, 
if applicable, and because service codes and modifiers reflect patient 
acuity and the complexity of the service provided,\34\ these factors 
will already be reflected in the QPA. Therefore, the Departments 
anticipate that there would only be rare instances in which the QPA 
would not adequately account for the acuity of the patient or 
complexity of the service. For example, if the complexity of a case is 
an outlier such that the time or intensity of care exceeds what is 
typical for a service code, the certified IDR entity may conclude that 
the QPA does not adequately take the factor into account. Similarly, 
the QPA for a qualified IDR item or service may be considered too high 
for items or services that become less complex or are furnished more 
frequently over time, such as items for which the QPA reflects 
reimbursement for a product with a patent that expires after 2019, in 
instances where the QPA is based off the median of the contracted rates 
from 2019. A certified IDR entity may also conclude that the QPA does 
not adequately account for patient acuity, or the complexity of 
furnishing the qualified IDR item or service in instances where the 
parties disagree on what service code or modifier accurately describes 
the qualified IDR item or service. For instance, the Departments are 
aware that some plans and issuers review claims and alter the service 
code or modifier submitted by the provider or facility to another 
service code or modifier that the plan or issuer determines to be more 
appropriate (a practice commonly referred to as ``downcoding'' when the 
adjustment

[[Page 55998]]

results in lower reimbursement).\35\ If a plan or issuer has altered 
the service code or modifier(s) for a submitted claim and applies a QPA 
that uses a different service code or modifier(s) than the service code 
or modifier(s) submitted by the provider or facility, the provider or 
facility could submit credible information to the certified IDR entity 
demonstrating that the QPA applied by the plan or issuer to the claim 
is based on a service code or modifier that did not properly encompass 
patient acuity, the complexity of furnishing the qualified IDR item or 
service. If the certified IDR entity agrees that either of the parties 
have presented credible information that clearly demonstrates that the 
QPA is materially different from the appropriate out-of-network rate, 
and adequately takes into account the considerations allowed under 26 
CFR 54.9816-8T(c)(4)(iii)(B) through (D), 29 CFR 2590.716-
8(c)(4)(iii)(B) through (D), and 45 CFR 149.510(c)(4)(iii)(B) through 
(D), then it could select either offer, but must select the offer that 
the certified IDR entity determines best represents the value of the 
qualified IDR item or service.\36\
---------------------------------------------------------------------------

    \34\ https://www.medicalbillingandcoding.org/cpt-modifiers/.
    \35\ The Departments clarify that the July 2021 interim final 
rules do not require the plan or issuer to calculate the 
participant's, beneficiary's, or enrollee's cost sharing using a QPA 
for the service code submitted by the provider or facility. The plan 
or issuer could instead calculate the participant's, beneficiary's, 
or enrollee's cost sharing using a QPA for the service code that the 
plan or issuer determined was more appropriate. However, the QPA 
methodology under 26 CFR 54.9816-6T, 29 CFR 2590.716-6, and 45 CFR 
149.140 requires plans and issuers to calculate the median 
contracted rate for an item or service using contracted rates for 
the same or similar item or service. A plan or issuer would be 
considered out of compliance with these requirements if the plan or 
issuer calculated a QPA using a service code that does not 
reasonably reflect the furnished item or service.
    \36\ The Departments note that in instances in which the 
certified IDR entity selects an offer based on a determination that 
a service code other than the one upon which the QPA was based more 
accurately describes the qualified IDR item or service, neither the 
plan or issuer nor provider or facility is permitted to adjust the 
participant's, beneficiary's, or enrollee's cost-sharing amount. The 
cost-sharing amount remains the same as originally calculated in 
accordance with 26 CFR 54.9816-4T(b)(3)(ii) and (iii), 29 CFR 
2590.716-4(b)(3)(ii) and (iii), and 45 CFR 149.110(b)(3)(ii) and 
(iii); 26 CFR 54.9816-5T(c)(1) and (2), 29 CFR 2590.717-1(c)(1) and 
(2), and 45 CFR 149.120(c)(1) and (2); or 26 CFR 54.9817-1T(b)(1) 
and (2), 29 CFR 2590.717-1(b)(1) and (2), and 45 CFR 149.130(b)(1) 
and (2).
---------------------------------------------------------------------------

    Fourth, to the extent credible information is submitted by a party, 
the certified IDR entity must also consider whether the credible 
information about the teaching status, case mix, and scope of services 
of the nonparticipating facility, clearly demonstrates that the QPA is 
materially different from the appropriate out-of-network rate for the 
qualified IDR item or service. Similar to the other factors, it is the 
view of the Departments that the QPA, which is intended to reflect the 
market-driven rate, should be considered the prevailing rate unless a 
party provides credible information that the characteristic of the 
teaching status, case mix, or scope of services of the nonparticipating 
facility was in some way critical to the delivery of the qualified IDR 
item or service, and not adequately accounted for in the QPA, thereby 
rebutting the presumption that the QPA is the appropriate out-of-
network rate. For example, a certified IDR entity could consider the 
trauma level of a hospital when the dispute involves trauma care or 
qualified IDR items or services that could not be performed at a lower-
level hospital, but only to the extent the QPA does not otherwise 
reflect this factor. The Departments seek comment on whether additional 
requirements should be considered to address any potentially abusive 
scenarios, including scenarios in which parties could potentially 
distort information that informs the enumerated considerations, such as 
overestimating the teaching experience of providers at the facility or 
upcoding the costs for items or services, and seek comment on the 
potential for gaming of the Federal IDR process.
    Fifth, to the extent credible information is submitted by a party, 
the certified IDR entity must also consider whether the credible 
information about any demonstrations of good faith efforts (or lack 
thereof) made by the nonparticipating provider, nonparticipating 
facility, or nonparticipating provider of air ambulance services or the 
plan or issuer, as applicable, to enter into network agreements and, if 
applicable, contracted rates between the provider or facility and the 
plan or issuer, as applicable during the previous 4 plan years, clearly 
demonstrates that the QPA is materially different from the appropriate 
out-of-network rate for the qualified IDR item or service. For example, 
a certified IDR entity must consider what the contracted rate might 
have been had the good faith negotiations resulted in the 
nonparticipating provider, facility, or provider of air ambulance 
services being in-network, if a party is able to provide related 
credible information of good faith efforts or the lack thereof.
    Beyond these enumerated factors, the certified IDR entity must also 
generally consider additional information submitted by a party, 
provided the information is credible and relates to the offer submitted 
by either party. The certified IDR entity is not permitted to consider 
that information if it includes information on factors described in 26 
CFR 54.9816-8T(c)(4)(v), 29 CFR 2590.716-8(c)(4)(v), and 45 CFR 
149.510(c)(4)(v). This prohibition is discussed further in the next 
section of this preamble.
    The Departments intend to provide additional guidance to certified 
IDR entities as necessary to clarify how the allowable factors should 
be considered and seek comment on this approach, including the 
appropriateness and scope of the factors previously discussed.
iii. Selection of Offer for Qualified IDR Services That Are Air 
Ambulance Services
    The process for a certified IDR entity to select an offer in a 
dispute related to qualified IDR services that are air ambulance 
services is essentially the same as the process applicable to disputes 
related to qualified IDR items or services that are not air ambulance 
services. As with disputes related to qualified IDR items or services 
that are not air ambulance services, in determining which offer to 
select, these interim final rules provide that the certified IDR entity 
must consider the QPA for the applicable year for the qualified IDR 
services that are air ambulance services. However, Code section 
9817(b)(5)(C), ERISA section 717(b)(5)(C), PHS Act section 2799A-
2(b)(5)(C), and these interim final rules specify additional 
circumstances, in addition to the QPA, that the certified IDR entity 
must also consider in making the determination for air ambulance 
services, to the extent the parties provide credible information on 
such criteria. As with qualified IDR items or services, the certified 
IDR entity should only consider this information to the extent the 
certified IDR entity determines that either party submitted credible 
information that clearly demonstrates that the QPA is materially 
different from the appropriate out-of-network rate. If a party presents 
credible information clearly demonstrating that the QPA is materially 
different from the appropriate out-of-network rate, the certified IDR 
entity must consider the additional circumstances.
    To the extent credible information is submitted by a party, the 
certified IDR entity must consider whether credible information about 
the quality and outcomes measurements of the provider of air ambulance 
services that furnished the services clearly demonstrates that the QPA 
is materially different from the appropriate out-of-network rate. 
Additionally, to the extent credible

[[Page 55999]]

information is submitted by a party, the certified IDR entity must 
consider whether credible information about the acuity of the condition 
of the participant, beneficiary, or enrollee receiving the services, or 
the complexity of providing the services to the participant, 
beneficiary, or enrollee, clearly demonstrates that the QPA is 
materially different from the appropriate out-of-network rate. Further, 
to the extent credible information is submitted by a party, the 
certified IDR entity must consider credible information submitted by a 
party about whether the level of training, experience, and quality of 
medical personnel that furnished the air ambulance services clearly 
demonstrates that the QPA is materially different from the appropriate 
out-of-network rate for the air ambulance services. To the extent a 
party submits any such credible information, the certified IDR entity 
must also consider whether credible information about the ambulance 
vehicle type, including the clinical capability level of the vehicle, 
clearly demonstrates that the QPA is materially different from the 
appropriate out-of-network rate for the air ambulance services. In 
considering the ambulance vehicle type, the certified IDR entity may 
not consider whether the air ambulance is fixed wing or rotary wing, 
because the QPA will reflect this difference, as different service 
codes are used to bill for air ambulance services depending on whether 
fixed wing or rotary wing vehicles are used. Instead, the certified IDR 
entity should consider air ambulance vehicle type only to the extent 
that it is not already taken into account by the QPA.
    To the extent a party submits any such credible information, the 
certified IDR entity must also consider whether credible information 
about the population density of the point of pick-up (as defined in 42 
CFR 414.605) for the air ambulance (such as urban, suburban, rural, or 
frontier \37\), clearly demonstrates that the QPA is materially 
different from the appropriate out-of-network rate for a particular air 
ambulance service. Under the July 2021 interim final rules, the QPA is 
calculated by reference to the geographic region, which for air 
ambulance services distinguishes between one region containing all 
metropolitan statistical areas (as described by the U.S. Office of 
Management and Budget (OMB) and published by the U.S. Census Bureau) in 
a state and one region consisting of all other portions of the state, 
determined based on the point of pick-up (as defined in 42 CFR 
414.605). If these geographic regions do not provide sufficient 
information, the QPA is calculated in reference to Census divisions, 
with one region consisting of all metropolitan statistical areas in 
each Census division, and one region consisting of all other portions 
of the Census division, determined at the point of pick-up. Therefore, 
the QPA for these geographic regions may already reflect the population 
density of the pick-up location. Nevertheless, in certain 
circumstances, the QPA for air ambulance services may not adequately 
capture the population density, due to additional distinctions, such as 
between metropolitan areas within a state, or between rural and 
frontier areas. To the extent that there is credible information about 
additional circumstances clearly demonstrating that the QPA is 
materially different from the appropriate out-of-network rate for a 
particular air ambulance service, the certified IDR entity must 
consider these distinctions.
---------------------------------------------------------------------------

    \37\ For these purposes, the term ``frontier'' should be 
understood as including those ZIP codes where the point of pick-up 
is in a rural area determined to be in the lowest 25 percent of 
rural population arrayed by population density (also known as super 
rural ZIP codes for purposes of determining ground ambulance base 
rates). See 42 CFR 414.610(c)(5)(ii) and 42 CFR 414.626(c)(1)(ii).
---------------------------------------------------------------------------

    Finally, to the extent credible information is submitted by a 
party, the certified IDR entity must consider whether credible 
information about demonstrations of good faith efforts (or lack 
thereof) made by the nonparticipating provider of air ambulance 
services or the plan or issuer to enter into network agreements, as 
well as contracted rates between the provider and the plan or issuer, 
as applicable, during the previous 4 plan years, clearly demonstrate 
that the QPA is materially different from the appropriate out-of-
network rate for such air ambulance services.
    As with qualified IDR items or services that are not air ambulance 
services, the certified IDR entity must begin with the presumption that 
the amount closest to the QPA is the appropriate out-of-network rate 
for the air ambulance service under consideration and select the offer 
closest to the QPA, unless credible information submitted by the 
parties clearly demonstrates that the QPA is materially different from 
the appropriate out-of-network rate, or unless the offers are equally 
distant from the QPA but in opposing directions. In those cases, the 
certified IDR entity must select the offer that the certified IDR 
entity determines best represents the value of the qualified IDR items 
or services, which could be either party's offer.
iv. Prohibition on Consideration of Certain Factors
    Code section 9816(c)(5)(D), ERISA section 716(c)(5)(D), PHS Act 
section 2799A-1(c)(5)(D), and these interim final rules provide that 
the certified IDR entity may not consider certain factors in 
determining which offer is the out-of-network rate. First, the 
certified IDR entity may not consider usual and customary charges. This 
term, also known as usual, customary and reasonable charges, refers to 
the amount providers in a geographic area usually charge for the same 
or similar medical service.\38\ This provision also prohibits 
consideration of payment or reimbursement rates expressed as a 
proportion of usual and customary charges. Second, certified IDR 
entities cannot consider the amount that would have been billed to 
either a plan or issuer, or a participant, beneficiary, or enrollee by 
a provider, facility, or provider of air ambulance services if the 
provider, facility, or provider of air ambulance services were not 
subject to a prohibition on balance billing. The Departments recognize 
that 45 CFR 149.410, 149.420, and 149.440 prohibit providers, 
facilities, and providers of air ambulance services from billing 
participants, beneficiaries, or enrollees for the full charge for items 
and services to which these provisions apply, but do not limit the 
amount that may be billed to the plan or issuer. However, the 
Departments are of the view that the intent of Code section 
9816(c)(5)(D), ERISA section 716(c)(5)(D), and PHS Act section 2799A-
1(c)(5)(D) is to prohibit the certified IDR entity from considering the 
billed charge for a qualified IDR item or service. Therefore, the 
Departments interpret this prohibition to include consideration of 
billed charges to the plan or issuer for the qualified IDR item or 
service. Finally, certified IDR entities must not consider payment or 
reimbursement rates payable by a public payor, in whole or in part, for 
items and services furnished by the providers, facilities, or providers 
of air ambulance services. This prohibition includes payments or 
reimbursement rates under the Medicare program under title XVIII of the 
Social Security Act, the Medicaid program under title XIX of the Social 
Security Act, the Children's Health Insurance Program under title XXI 
of the Social

[[Page 56000]]

Security Act, and the TRICARE program under chapter 55 of title 10, 
United States Code, chapter 17 of title 38, United States Code. This 
prohibition also applies to payment rates for demonstration projects 
under section 1115 of the Social Security Act, as these are payment or 
reimbursement rates payable by a public payor. This provision prohibits 
consideration of payment or reimbursement rates expressed as a 
proportion of rates payable by public payors. Thus, the certified IDR 
entity must not consider, for example, which offer is closest to 150 
percent of the Medicare reimbursement rate for a certain item or 
service.\39\ The Departments solicit comment regarding whether any 
additional guidance or clarification is needed on these prohibited 
factors.
---------------------------------------------------------------------------

    \38\ See Uniform Glossary of Coverage and Medical Terms, 
available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/sbc-uniform-glossary-of-coverage-and-medical-terms-new.pdf and https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/Uniform-Glossary-01-2020.pdf.
    \39\ The Departments recognize that contracted rates are 
frequently based off a percentage of the Medicare payment rate. The 
Departments clarify that even in instances where the QPA is 
calculated using contracted rates that are expressed as a proportion 
of rates payable by a public payor (or other prohibited 
considerations), the certified IDR entity is required to consider 
the QPA. In the Departments' view, this does not constitute 
consideration of the payment or reimbursement rate payable by a 
public payor.
---------------------------------------------------------------------------

v. Written Decision
    Once the certified IDR entity has made a determination, the 
certified IDR entity must provide the underlying rationale for its 
determination in a written decision submitted to the parties and the 
Departments. The certified IDR entity must submit the decision and the 
underlying rationale through the Federal IDR portal in a form and 
manner specified by the Departments in guidance. This rationale will 
inform the reports required from the Departments under Code section 
9816(c)(7), ERISA section 716(c)(7), and PHS Act section 2799A-1(c)(7), 
and will assist in ensuring that the certified IDR entities comply with 
the requirements of this process, including the requirements of 26 CFR 
54.9816-8T(c)(4)(iii), 29 CFR 2590.716-8(c)(4)(iii), and 45 CFR 
149.510(c)(4)(iii). If a certified IDR entity does not choose the offer 
closest to the QPA, the written decision's rationale must include a 
detailed explanation of the additional considerations relied upon, 
whether the information about those considerations submitted by the 
parties was credible, and the basis upon which the certified IDR entity 
determined that the credible information demonstrated that the QPA is 
materially different from the appropriate out-of-network rate.
v. Effect of Determination
    Code section 9816(c)(5)(E), ERISA section 716(c)(5)(E), PHS Act 
section 2799A-1(c)(5)(E), and these interim final rules provide that a 
determination made by a certified IDR entity is binding upon all 
parties involved, in the absence of fraud or evidence of intentional 
misrepresentation of material facts to the certified IDR entity by any 
party regarding the claim. A certified IDR entity's determination is 
not subject to judicial review, except as set forth in 9 U.S.C. 
10(a)(1)-(4).\40\
---------------------------------------------------------------------------

    \40\ Subparagraphs (1) through (4) of 9 U.S.C. 10(a) provide 
that courts may vacate an arbitration: where the award was procured 
by corruption, fraud, or undue means; where there was evident 
partiality or corruption in the arbitrators; where the arbitrators 
were guilty of misconduct in refusing to postpone the hearing, in 
refusing to hear evidence pertinent and material to the controversy; 
or of any other misbehavior prejudicing the rights of the parties; 
or where the arbitrators exceeded their powers, or so imperfectly 
executed them that a mutual, final, and definite award was not made.
---------------------------------------------------------------------------

    Under Code section 9816(c)(5)(E)(ii), ERISA section 
716(c)(5)(E)(ii), PHS Act section 2799A-1(c)(5)(E)(ii), and these 
interim final rules, when a certified IDR entity makes a determination, 
the party that submitted the initial Notice of IDR Initiation may not 
submit a subsequent Notice of IDR Initiation involving the same other 
party with respect to a claim that is the same as or similar to a 
qualified IDR item or service that was the subject of the initial 
determination during the 90-calendar-day period following the initial 
determination. The Departments interpret the 90-day period in the 
statute to refer to 90 calendar days. The Departments are of the view 
that this interpretation balances the statutory intent to provide for a 
``cooling-off'' period between disputes that relate to the same or 
similar items or services while ensuring that the initiating party is 
able to resolve outstanding payment disputes through the Federal IDR 
process as soon as permitted under the statute. The Departments 
interpret the statutory phrase of ``such item or service'' in this 
context to refer to the same or similar item or service, in order to 
maintain consistency with the statutory provisions related to the QPA 
and the provisions allowing batching of items and services. 
Additionally, such an interpretation clarifies the meaning of the 
statutory provisions at Code section 9816(c)(5)(E)(iii), ERISA section 
716(c)(5)(E)(iii), and PHS Act section 2799A-1(c)(5)(E)(iii), which 
allow subsequent submission of such an item or service only if the open 
negotiation period ended during such a 90-day period (as the open 
negotiation period for the particular item or service under dispute 
would have already ended). For claims for the same or similar item or 
service for which the end of the open negotiation period occurs during 
the 90-calendar-day suspension period, after the end of the 90-
calendar-day suspension period, either party may initiate the Federal 
IDR process for the items and services affected by the suspension. For 
these items or services, the initiating party must submit the Notice of 
IDR Initiation within 30 business days following the end of the 90-
calendar-day suspension period, as opposed to the standard 4-business-
day period following the end of the open negotiation period. The 30-
business-day period begins on the day after the last day of the 90-
calendar-day period.
    The plan or issuer must make any additional payment, if applicable, 
of the amount of the offer selected by the certified IDR entity 
directly to the provider, facility, or provider of air ambulance 
services not later than 30 calendar days after the determination by the 
certified IDR entity. This amount will be the offer selected, reduced 
by the sum of any initial payment the plan or issuer has paid to the 
provider, facility, or provider of air ambulance services and any cost 
sharing paid or owed by the participant, beneficiary, or enrollee to 
the provider, facility, or provider of air ambulance services. If the 
offer selected by the certified IDR entity is less than the sum of the 
initial payment and any cost sharing paid by the participant, 
beneficiary, or enrollee, the provider, facility, or provider of air 
ambulance services will be liable to the plan or issuer for the 
difference. This difference must be paid directly to the plan or issuer 
not later than 30 calendar days after the determination by the 
certified IDR entity. The Departments note that this determination of 
the out-of-network rate does not change the participant's, 
beneficiary's, or enrollee's cost sharing, which is based on the 
recognized amount. The cost-sharing amount remains the same as 
originally calculated in accordance with 26 CFR 54.9816-4T(b)(3)(ii) 
and (iii), 29 CFR 2590.716-4(b)(3)(ii) and (iii), and 45 CFR 
149.110(b)(3)(ii) and (iii); 26 CFR 54.9816-5T(c)(1) and (2), 29 CFR 
2590.716-5(c)(1) and (2), and 45 CFR 149.120(c)(1) and (2); or 26 CFR 
54.9817-1T(b)(1) and (2), 29 CFR 2590.717-1(b)(1) and (2), and 45 CFR 
149.130(b)(1) and (2).
vi. Recordkeeping Requirement
    These interim final rules require that the certified IDR entity 
must maintain records of relevant documentation associated with any 
Federal IDR process determination for 6 years. The 6-year

[[Page 56001]]

recordkeeping requirement is similar to other recordkeeping 
requirements under the Code, ERISA, and the PHS Act. For example, 
independent review organizations involved in the Federal external 
review process under 26 CFR 54.9815-2719, 29 CFR 2590.715-2719, and 45 
CFR 147.136 must retain records for 6 years. This recordkeeping 
requirement will help ensure that state and Federal oversight agencies 
are able to audit past determinations of certified IDR entities and 
that parties are able to obtain records of the determinations. 
Certified IDR entities must make these records available for 
examination by all parties to the dispute, except when disclosure would 
violate state or Federal privacy laws and regulations, as well as to 
state or Federal oversight agencies upon request for oversight 
purposes.
vii. Costs of the Federal IDR Process and Payment
    At the time that a certified IDR entity is selected by both of the 
parties or by the Departments, each party to a determination must pay 
to the certified IDR entity the administrative fee due to the 
Departments for participating in the Federal IDR process. At the time 
of submission of the offer by each party to a determination, the 
certified IDR entity fee must be paid to the certified IDR entity. Each 
party will be able to view the certified IDR entity fees and 
administrative fees in the Federal IDR portal when engaging in the 
certified IDR entity selection process. As discussed later in this 
preamble, certified IDR entities must set the certified IDR entity fee 
within a pre-determined range (or as otherwise approved by the 
Departments) specified by the Departments through guidance. The 
Departments anticipate issuing this guidance annually. For a discussion 
of the considerations the Departments will review when setting the 
certified IDR entity fee range, see section III.D.5 of this preamble.
    These interim final rules require each party to pay the entire 
certified IDR entity fee at the time the parties provide their offer 
under 26 CFR 54.9816-8T(c)(4)(i), 29 CFR 2590.716-8(c)(4)(i), and 45 
CFR 149.510(c)(4)(i). Certified IDR entities are required to hold these 
funds in a trust or escrow account until the certified IDR entity makes 
a determination of the out-of-network rate, or in instances in which 
the parties agree on an out-of-network rate, until the Departments 
notify the certified IDR entity that it may remit the funds as 
specified in these interim final rules. The certified IDR entity may 
(but is not required to) accrue interest on the funds. The certified 
IDR entity is not required to remit any accrued interest to any other 
party. Within 30 business days of making the determination, the 
certified IDR entity must refund to the prevailing party the amount the 
party submitted for the certified IDR entity fee. The certified IDR 
entity will retain the certified IDR entity fee submitted by the non-
prevailing party, as the non-prevailing party is required to pay the 
certified IDR entity fee. In the case of batched determinations, the 
certified IDR entity may make different payment determinations for each 
qualified IDR item or service under dispute. In these cases, the party 
with fewest determinations in its favor is considered the non-
prevailing party and is responsible for paying the certified IDR entity 
fee. In the event that each party prevails in an equal number of 
determinations, the certified IDR entity fee will be split evenly 
between the parties. The Departments are of the view that this approach 
reduces the administrative burden of fee collections and ensures 
payment of certified IDR entities. This approach also eliminates any 
concerns that certified IDR entities will make determinations based on 
which party is more likely to pay the certified IDR entity fee. The 
Departments may issue additional guidance if abusive situations or 
other issues related to the payment of the administrative fee or the 
certified IDR entity fee arise. The Departments also solicit comment on 
whether additional requirements, including procedures to offset against 
or make adjustments to amounts owed under a payment determination, are 
necessary to ensure payment or collection of the administrative fee and 
the certified IDR entity fee.
    If the parties negotiate an out-of-network rate before the 
certified IDR entity makes a determination, the certified IDR entity is 
required to return half of each party's payment for the certified IDR 
entity fee, unless directed otherwise by both parties to distribute the 
total amount of that refund in different shares.
    Under Code section 9816(c)(8), ERISA section 716(c)(8), PHS Act 
section 2799A-1(c)(8), and these interim final rules, each party to a 
determination must pay an administrative fee for participating in the 
Federal IDR process. The statute further indicates that the 
administrative fee must be paid to the Departments at the time and in 
the manner specified by the Departments. These interim final rules 
require each party to pay the administrative fee to the certified IDR 
entity at the time the certified IDR entity is selected, regardless of 
whether that certified IDR entity was selected by the parties or by the 
Departments. Having the certified IDR entity collect both the 
administrative fee and the certified IDR entity fee will help ensure 
efficiency by streamlining the process and will facilitate 
administrative convenience for the parties and the Departments. These 
interim final rules also specify that the administrative fee is non-
refundable, even in instances where the parties negotiate an out-of-
network rate before the certified IDR entity makes a determination or 
where the certified IDR entity determines that the case does not 
qualify for the Federal IDR process. Code section 9816(c)(8)(B), ERISA 
section 716(c)(8)(B), and PHS Act section 2799A-1(c)(8)(B) specify that 
the administrative fee is established such that the total amount of 
fees is approximately equal to the amount of expenditures estimated by 
the Departments in carrying out the Federal IDR process. Because the 
Departments expect that a large part of the expenditures in carrying 
out the Federal IDR process will come from the initiation of the 
Federal IDR process, the Departments will have incurred expenditures in 
instances in which the parties reach an agreement before the certified 
IDR entity makes a determination or in which the certified IDR entity 
determines that the case does not qualify for the Federal IDR process, 
and thus, it is appropriate that the parties should still be expected 
to pay the fee.
    As explained in the following section on certification, the 
certified IDR entity must remit the administrative fee to the 
Departments at the time and in the manner specified in guidance. The 
administrative fee amount will be established in guidance published by 
the Departments in a manner so that the total administrative fees 
collected by the certified IDR entities and remitted to the Departments 
during a calendar year are approximately equal to the estimated amount 
of expenditures by the Departments for that calendar year in carrying 
out the Federal IDR process. In setting the administrative fee, the 
Departments will consider the estimated costs for the Departments to 
administer the Federal IDR process for the following calendar year, 
including the staffing and contracting costs related to certifying and 
providing oversight to certified IDR entities; the costs of developing 
and publishing reports as required under Code sections 9816 and 9817, 
ERISA sections 716 and 717, and PHS Act sections 2799A-1 and 2799A-2; 
the costs of collecting the administrative fees from certified IDR

[[Page 56002]]

entities; and the cost of maintaining the Federal IDR portal. In future 
years, such projected costs will be informed by the actual costs 
incurred by the Departments to date to administer the Federal IDR 
process. The Departments expect that certain resources related to the 
Federal IDR process will also be used for the patient-provider dispute 
resolution process, such as the Federal IDR portal, certain staffing, 
and contracts. In setting the administrative fee, the Departments will 
consider the expected volume for the Federal IDR process and the 
patient-provider dispute resolution process and apportion the IDR 
administrative fee such that it reflects the appropriate usage of the 
Federal IDR process by providers, facilities, providers of air 
ambulance services, plans, and issuers.
5. Certification of IDR Entities
    Under Code section 9816(c)(4), ERISA section 716(c)(4), and PHS Act 
section 2799A-1(c)(4), an IDR entity must meet certain standards and be 
certified by the Departments to be selected for the Federal IDR 
process. Consistent with these provisions, these interim final rules 
provide that an IDR entity must provide through the Federal IDR portal 
written documentation to the Departments that demonstrates the entity 
satisfies certain standards and procedures outlined in these interim 
final rules and set forth in guidance issued by the Departments. 
Specifically, the Departments will indicate through guidance the types 
of documentation that should be submitted for each certification 
standard, in what manner they should be submitted, and how the 
documentation will be reviewed for certification. An IDR entity that 
satisfies the standards in the interim final rules and guidance issued 
by the Departments will be provided a certified IDR entity number and 
will be certified for a 5-year period, subject to the petition and 
revocation process, discussed later in this preamble.\41\ Once 
certified, the certified IDR entity must continue to satisfy these 
requirements.
---------------------------------------------------------------------------

    \41\ As discussed in the section on Economic Impact and 
Paperwork Burden, the Departments estimate there will be 50 IDR 
entities that will seek certification by the Departments.
---------------------------------------------------------------------------

    IDR entities will be expected, as part of their application for 
certification, to submit general information about their organization, 
including contact information, Taxpayer Identification Number (TIN), 
and website information, as well as the service area in which the IDR 
entity intends to conduct payment determinations under the Federal IDR 
process. IDR entities may choose to apply to operate in all states or 
self-limit to a particular subset of states. Further, anyone submitting 
the application for certification must have the legal and financial 
authority to bind the IDR entity. An IDR entity that the Departments 
certify must enter into an agreement with the Departments. That 
agreement will include specified provisions encompassed by these 
interim final rules, including, but not limited to, the requirements 
applicable to certified IDR entities when making payment determinations 
as well as the requirements regarding certification and revocation 
(such as specifications for wind down activities and reallocation of 
certified IDR entity fees, where warranted).
    In order to be certified, an IDR entity must possess (directly or 
through contracts or other arrangements) and demonstrate sufficient 
arbitration and claims administration of health care services, managed 
care, billing, coding, medical, and legal expertise. With regard to 
medical expertise, where the payment determination depends on the 
patient acuity or the complexity of furnishing the qualified IDR item 
or service, or the level of training, experience, and quality and 
outcome measurements of the provider or facility that furnished the 
qualified IDR item or service, the IDR entity should have available 
medical expertise with the appropriate training and experience in the 
field of medicine involved in the qualified IDR item or service. 
Additionally, the IDR entity must employ (directly or through contracts 
or other arrangements) sufficient personnel to make determinations 
within the 30 business days allowed for such determinations. To satisfy 
this standard, the written documentation the IDR entity submits must 
include a description of its organizational structure and capabilities, 
including an organizational chart and the credentials, 
responsibilities, and number of personnel employed to make 
determinations. The Departments considered requiring IDR entities to 
have personnel (either hired directly or through a contract) with air 
space law knowledge for making determinations related to air ambulance 
cases, but are concerned that such a requirement may limit the number 
of eligible entities and increase the likelihood of conflicts of 
interests in air ambulance cases. The Departments seek comment on 
whether IDR entities should be required to have air space law knowledge 
for IDR entity certification to make determinations for air ambulance 
cases.
    Next, an IDR entity must also maintain a current accreditation from 
a nationally recognized and relevant accreditation organization, such 
as URAC, or ensure that its personnel otherwise possess the requisite 
training to conduct payment determinations (for example, providing 
documentation that personnel employed by the IDR entity have completed 
arbitration training by the AAA, the AHLA, or a similar organization). 
This requirement will ensure the IDR entity has the operational ability 
to perform its primary functions as set forth in the No Surprises Act 
and these interim final rules. States have imposed similar requirements 
on independent review organizations for external review processes under 
PHS Act section 2719 (which is incorporated by reference into Code 
section 9815 and ERISA section 715), or for their state IDR processes. 
Similar to independent review organizations, certified IDR entity 
personnel should have the skills and training necessary to conduct 
unbiased and impartial determinations between plans or issuers and 
providers, facilities, or providers of air ambulance services, and 
similar billing, coding, and medical expertise. The Departments expect 
that many of the organizations with current experience in arbitration 
or dispute resolution will already have such accreditation and will 
employ personnel with relevant experience. The Departments seek comment 
on whether any additional accreditation or training standards would 
meet this requirement, including whether additional flexibility is 
needed to help encourage innovation in the provision of IDR services 
and new entrants as IDR entities that may be certified for the Federal 
IDR process.
    Additionally, as a condition of certification, the IDR entity must 
have a process to ensure that no conflicts of interest exist between 
the parties and the personnel the certified IDR entity assigns to each 
dispute, and to screen for any material relationships between the 
parties and the personnel assigned to each dispute. This process will 
allow certified IDR entities to comply with the requirements of 26 CFR 
54.9816-8T(c)(1)(ii), 29 CFR 2590.716-8(c)(1)(ii), and 45 CFR 
149.510(c)(1)(ii).
    While conducting the Federal IDR process, a certified IDR entity 
will be entrusted with IIHI. Code section 9816(c)(4)(A)(v), ERISA 
section 716(c)(4)(A)(v), and PHS Act section 2799A-1(c)(4)(A)(v) 
require a certified IDR entity to maintain the confidentiality of IIHI 
obtained in the course of conducting payment determinations. This IIHI 
is often protected under Federal and state law, but certain laws, such 
as the privacy and security regulations promulgated

[[Page 56003]]

under HIPAA, as amended, may not apply to IIHI when it is held by a 
certified IDR entity.
    Therefore, these interim final rules specify that a certified IDR 
entity must provide written documentation to the Departments that 
demonstrates that the certified IDR entity satisfies, among other 
things, the confidentiality standards set forth in 26 CFR 54.9816-
8T(e)(2)(v), 29 CFR 2590.716-8(e)(2)(v), and 45 CFR 149.510(e)(2)(v). 
These provisions include standards for certified IDR entities to 
maintain the confidentiality of IIHI obtained in the course of 
conducting the Federal IDR process. Because IIHI is sensitive, private 
information about consumers and their health, including information 
that is identifiable to a particular individual, IIHI warrants strong 
protection by the parties that will be handling this information. 
Therefore, the Departments are of the view that certified IDR entities 
must have procedures in place to protect consumers from improper 
storage, use, handling, or transmission of this information. The 
confidentiality standards in these interim final rules are informed by 
the privacy, security, and breach notification regulations issued under 
HIPAA and the HITECH Act, because the Departments are of the view that 
these provisions are industry standards.\42\ Drawing from those 
standards for these interim final rules promotes continuity in the way 
consumer information is protected and secured throughout systems 
involved in health care. The Departments have drawn mainly from 
relevant HIPAA standards because these are the predominant federal 
standards that apply to identifiable consumer health information, when 
possessed by some of the parties to the Federal IDR process. Therefore 
the Departments are of the view that these standards are the most 
appropriate privacy standards for certified IDR entities. The 
Departments have tailored these requirements to the particular 
functions of certified IDR entities to ensure that they have clear, 
workable, and appropriate standards to implement.
---------------------------------------------------------------------------

    \42\ 45 CFR part 160 subpart A and subparts A, C, D, and E of 
part 164.
---------------------------------------------------------------------------

    These interim final rules set forth the confidentiality 
requirements applicable to certified IDR entities and include 
provisions regarding privacy, security, and breach notification. The 
Departments begin by discussing the general privacy requirement in 26 
CFR 54.9816-8T(e)(2)(v)(A), 29 CFR 2590.716-8(e)(2)(v)(A), and 45 CFR 
149.510(e)(2)(v)(A) that specify that a certified IDR entity may 
create, collect, handle, disclose, transmit, access, maintain, store, 
and/or use IIHI only to perform two categories of activities, described 
in 26 CFR 54.9816-8T(e)(2)(v)(A)(1) through (2), 29 CFR 2590.716-
8(e)(2)(v)(A)(1) through (2), and 45 CFR 149.510(e)(2)(v)(A)(1) through 
(2): (1) To perform the certified IDR entity's required duties under 
these sections of the interim final rules; and (2) to perform functions 
related to carrying out additional obligations as may be required under 
applicable Federal or state laws or regulations.
    Additionally, certified IDR entities are required to maintain the 
security of the IIHI they obtain by ensuring the confidentiality of all 
IIHI they create, obtain, maintain, store, and transmit; protecting 
against any reasonably anticipated threats or hazards to the security 
of this information; protecting against any reasonably anticipated 
unauthorized uses or disclosures of this information; and by ensuring 
compliance by any of their personnel, including their contractors and 
subcontractors (as applicable), assigned to a payment determination. To 
satisfy this requirement, certified IDR entities are required to have 
policies and procedures in place to properly use and disclose IIHI, 
identify when IIHI should be destroyed or disposed of, properly store 
and maintain confidentiality of IIHI that is accessed or stored 
electronically, and identify the steps the certified IDR entities will 
take in the event of a breach regarding IIHI. The Departments based 
these requirements on the similar rule applicable to HIPAA covered 
entities under 45 CFR 164.306(a)(1), but because the rule for HIPAA 
covered entities applies specifically with regard to electronic 
protected health information (PHI), the requirements in these interim 
final rules specify that certified IDR entities must ensure the 
confidentiality of all IIHI they create, obtain, maintain, store, or 
transmit in accordance with Code section 9816(c)(4)(A)(v), ERISA 
section 716(c)(4)(A)(v), and PHS Act section 2799A-1(c)(4)(A)(v). A 
certified IDR entity's responsibility to comply with these 
confidentiality requirements shall survive revocation of the IDR 
entity's certification for any reason, and IDR entities must comply 
with the record retention and disposal requirements described in these 
interim final rules.
    The Departments also require certified IDR entities to securely 
destroy or dispose of IIHI in an appropriate and reasonable manner 6 
years from either the date of its creation or the first date on which 
the certified IDR entity had access to it, whichever is earlier. In 
determining what is appropriate and reasonable, certified IDR entities 
should assess potential risks to participant, beneficiary, or enrollee 
privacy, as well as consider such issues as the form, type, and amount 
of IIHI to be disposed. The Departments are of the view that 6 years is 
a reasonable timeframe for destruction of such information since 
relevant business procedures should be complete well before this 
deadline, including IDR payment determinations and certified IDR entity 
compliance with the Departments' audits as applicable. Furthermore, the 
6-year timeframe matches the record retention requirements for 
certified IDR entities under these interim final rules as well as other 
record retention requirements under ERISA. These standards are also 
similar to HIPAA Security Rule requirements \43\ under 45 CFR 
164.310(d)(2)(i) and (ii), except that the Departments have tailored 
the requirements in section 26 CFR 54.9816-8T(e)(2)(v)(B)(4), 29 CFR 
2590.716-8(e)(2)(v)(B)(4), and 45 CFR 149.510(e)(2)(v)(B)(4) to apply 
to IIHI.
---------------------------------------------------------------------------

    \43\ U.S. Dept. of Health and Human Servs., Office for Civil 
Rights, ``The HIPAA Privacy and Security Rules: Frequently Asked 
Questions About the Disposal of Protected Health Information,'' 
available at https://www.hhs.gov/sites/default/files/disposalfaqs.pdf.
---------------------------------------------------------------------------

    Next, the Departments require certified IDR entities to develop and 
utilize secure electronic interfaces when transmitting IIHI 
electronically, including through data transmission with the Federal 
IDR portal, and between disputing parties during the Federal IDR 
process and the certified IDR entity. In addition, the Departments are 
of the view that certified IDR entities must have in place requirements 
for their personnel, including their contractors and subcontractors (as 
applicable), similar to those required under HIPAA Rules to make sure 
IIHI is only handled by appropriate staff who are trained to handle 
IIHI, and that proper protocol is followed if a breach of IIHI occurs.
    Finally, 26 CFR 54.9816-8T(e)(2)(v)(D), 29 CFR 2590.716-
8(e)(2)(v)(D), and 45 CFR 14.510(e)(2)(v)(D) require that all 
confidentiality requirements applicable to certified IDR entities also 
apply to certified IDR entities' contractors and subcontractors with 
access to IIHI performing any duties related to the Federal IDR 
process. For example, if a breach rises to the level of requiring a 
breach notification, the contractor or subcontractors must notify the 
certified IDR entity to inform it of the risk assessment results, and 
the certified IDR entity must notify the provider, facility,

[[Page 56004]]

or provider of air ambulance services; plan and issuer; the 
Departments; and each individual whose unsecured IIHI has been, or is 
reasonably believed to have been, subject to the breach, to the extent 
possible, as required by these interim final rules.
    In addition to the privacy and security requirements discussed in 
this section of this preamble, these interim final rules contain breach 
notification requirements, similar to the HIPAA breach notification 
standards (the ``HIPAA Notification Rule'') at 45 CFR 164.402 and 
164.404, to address steps that a certified IDR entity must take 
following the discovery of a breach of unsecured IIHI as defined in 
these interim final rules. The Departments are of the view that 
adopting breach notification standards similar to the HIPAA breach 
notification standards for certified IDR entities provides important 
protections for IIHI. For purposes of these interim final rules, the 
Departments made changes from the HIPAA breach notification standards 
to account for IIHI and certified IDR entities, as opposed to PHI and 
covered entities, in accordance with Code section 9816(c)(4)(C), ERISA 
section 716(c)(4)(C), and PHS Act section 2799A-1(c)(4)(C). The 
Departments require a certified IDR entity, upon discovery of a 
potential breach of unsecured IIHI, to conduct a risk assessment to 
determine the probability that the security or privacy of IIHI has been 
compromised based on at least the nature and extent of the IIHI 
involved, including the types of identifiers and the likelihood of re-
identification; the unauthorized person who used the IIHI or to whom 
the disclosure was made; whether the IIHI was actually acquired or 
viewed; and the extent to which the risk to the IIHI has been 
mitigated. The Departments also require a breach to be treated as 
discovered by the certified IDR entity as of the first day on which 
such breach is known to the certified IDR entity or, by exercising 
reasonable diligence, should have been known to the certified IDR 
entity. A certified IDR entity shall be deemed to have knowledge of a 
breach if the breach is known, or by exercising reasonable diligence 
should have been known, to any person, other than the person committing 
the breach, who is an employee, officer, or other agent of the 
certified IDR entity.
    The Departments are also including requirements for timing, 
content, and method of providing the breach notification in these 
interim final rules. Under these provisions, a certified IDR entity 
must provide notification without unreasonable delay and in no case 
later than 60 calendar days after the discovery of the breach. The 
Departments are of the view that 60 calendar days provides sufficient 
time for a certified IDR entity to discover a potential breach, conduct 
a risk assessment, and send notification as required in these interim 
final rules, in line with the requirements in 45 CFR 164.404 that allow 
up to 60 calendar days for such a notification to be sent. Since a 
condition for IDR entity certification involves submission of policies 
and procedures to: Properly create, obtain, maintain, store, or 
transmit IIHI in accordance with Code section 9816(c)(4)(A)(v), ERISA 
section 716(c)(4)(A)(v), and PHS Act section 2799A-1(c)(4)(A)(v); 
monitor, periodically assess, and update the security controls and 
related system risks to ensure the continued effectiveness of these 
controls; and guard against, detect, and report malicious software, the 
Departments are of the view that 60 calendar days are sufficient for 
proper identification, risk assessment, and notification of a breach.
    When a certified IDR entity sends a breach notification, the 
content must include similar information as that required under 45 CFR 
164.404, but focused on IIHI. Certified IDR entities must include, to 
the extent possible, the identification of each individual whose 
unsecured IIHI has been, or is reasonably believed by the certified IDR 
entity to have been, subject to the breach; a brief description of the 
breach, including the date of the breach and the date of the discovery 
of the breach, if known; a description of the types of unsecured IIHI 
that were involved in the breach (for example, whether full name, 
Social Security number, date of birth, home address, account number, 
diagnosis, disability code, or other types of information were 
involved); a brief description of what the certified IDR entity is 
doing to investigate the breach, to mitigate harm to the affected 
parties, and to protect against any further breaches; and contact 
procedures for individuals to ask questions or learn additional 
information, which must include a toll-free telephone number, email 
address, website, or postal address. The Departments are of the view 
that this level of detail is necessary for full transparency for those 
who are potentially affected by such a breach.
    Finally, a certified IDR entity must submit such notification in 
written form (in clear and understandable language) either on paper, 
electronically through the Federal IDR portal, or by email to the 
Departments; the plan, issuer or FEHB carrier; the provider, facility, 
or provider of air ambulance services; and, when possible, each 
individual whose unsecured protected IIHI has been, or is reasonably 
believed by the certified IDR entity to have been, subject to the 
breach. The Departments understand that a certified IDR entity may not 
have access to contact information for each individual whose unsecured 
protected IIHI has been, or is reasonably believed by the certified IDR 
entity to have been, subject to a breach. In these cases, IDR entities 
must work with issuers, plans, providers, and facilities to ensure that 
these individuals are appropriately notified.
    The Departments seek comment on the confidentiality requirements 
enumerated in 26 CFR 54.9816-8T(e)(2)(v), 29 CFR 2590.716-8(e)(2)(v), 
and 45 CFR 149.510(e)(2)(v), which are based on certain provisions of 
the HIPAA Rules, and whether any additional or different protections 
are warranted.
    Additionally, the certified IDR entity must ensure the fiscal 
integrity and stability of its organization. In order to meet this 
standard, the IDR entity must demonstrate that it has a system of 
safeguards and controls in place to prevent and detect improper 
financial activities by its employees and agents and to assure fiscal 
integrity and accountability for all fees received and held. To 
demonstrate financial stability, IDR entities must also submit 3 years 
of financial statements, or other documentation that demonstrates 
fiscal stability as directed by the Departments if 3 years of financial 
statements are unavailable. This financial disclosure requirement is 
informed by similar requirements under the Sarbanes-Oxley Act.\44\ The 
Departments are of the view that, because the Sarbanes-Oxley Act 
represents the primary standard for corporate disclosure of financial 
information, it is appropriate to mirror its standard as a means of 
ensuring certified IDR entity compliance with the statutory 
requirements related to fiscal integrity. The Departments are also of 
the view that the disclosure of these financial statements will enable 
the Departments to assess whether the IDR entity is financially viable 
and capable of maintaining its operations, independent of any future 
revenue earned under the Federal IDR process as a certified IDR entity.
---------------------------------------------------------------------------

    \44\ Public Law 107-204, available at https://www.govinfo.gov/content/pkg/PLAW-107publ204/html/PLAW-107publ204.htm.
---------------------------------------------------------------------------

    As a condition of certification, an IDR entity must indicate to the 
Departments the fees it intends to charge for payment determinations, 
which are limited to a fixed fee amount for single

[[Page 56005]]

determinations (including determinations for bundled arrangements) and 
a separate fixed fee amount for batched determinations under paragraph 
(c)(3)(i) of these interim final rules. These fixed fees must be within 
a range set forth in guidance by the Departments, unless the IDR entity 
receives written approval from the Departments for a fee outside that 
range. The Departments are of the view that setting a range of 
permitted flat amounts, including a lower and upper limit, will permit 
certified IDR entities to charge a reasonable certified IDR entity fee 
for IDR payment determinations, while also making IDR costs clear to 
parties in advance of the Federal IDR process. Setting a minimum and a 
maximum rate will mitigate potential concerns regarding overuse of the 
Federal IDR process due to low fees and potential concerns regarding 
overcharging by certified IDR entities. For batched items and services, 
setting a separate range that is higher to account for the potential 
for a larger number of claims and increased complexity will help ensure 
that certified IDR entities are compensated adequately for their 
services. The certified IDR entity may update its fees and seek 
approval from the Departments to charge a flat rate beyond the upper or 
lower limits for fees annually, as provided in guidance.
    The Departments considered whether to allow certified IDR entities 
to set their fees without limitations and also considered imposing 
anti-abuse provisions to prevent certified IDR entities from charging 
unreasonable amounts, while also taking into account the statutory 
intent to discourage the overuse of the Federal IDR process and 
incentivize IDR entity participation in the process. The Departments 
are of the view, however, that requiring certified IDR entities to set 
fees within fixed ranges will reduce the potential for excessive 
certified IDR entity fees that could result in inflated health care and 
insurance costs that could ultimately be passed on to consumers. The 
Departments are also setting a lower bound for certified IDR entity 
fees to ensure that certified IDR entity fees do not lead to the 
overuse of the Federal IDR process, thereby encouraging parties to 
exhaust other paths to agreement, such as open negotiation, before 
entering the Federal IDR process.
    In setting the allowable certified IDR entity fee range, the 
Departments will consider current IDR entity fees for state-managed IDR 
processes that are similar to the Federal IDR process. Based on the 
Departments' research on existing IDR processes in states that have 
implemented similar surprise billing legislation, IDR entity fees 
generally range from $300-$600 per payment determination.\45\ The 
Departments acknowledge that in some states, individual arbitrators 
charge as little as $270 and as much as $6,000 per arbitration.\46\ 
However, the Departments are of the view that such drastic ranges of 
IDR entity fees risk inflating costs of care that could ultimately be 
passed on to consumers.
---------------------------------------------------------------------------

    \45\ Hoadley, J., and Maanasa, K. ``How States are Using 
Independent Dispute Resolution to Resolve Out-of-Network Payment in 
Surprise Billing,'' To the Point 9blog), Commonwealth Funds, Feb. 
27, 2020. https://doi.org/10.26099/pqt4-vy24.
    \46\ https://www.kff.org/private-insurance/fact-sheet/surprise-medical-bills-new-protections-for-consumers-take-effect-in-2022/amp/.
---------------------------------------------------------------------------

    The Departments will also consider the anticipated time and 
resources needed for certified IDR entities to meet the requirements of 
these interim final rules, such as the time and resources needed to 
obtain certification, making payment determinations (including 
determining whether the dispute belongs in the Federal IDR process), 
data reporting, and audits. The Departments will also consider factors 
such as the anticipated volume of payment determinations under the 
Federal IDR process and adequacy of the Federal IDR process capacity to 
efficiently handle the volume of IDR initiations and payment 
determinations. The Departments will review and update the allowable 
fee range annually based on these factors and the impact of inflation 
and other cost increases. The Departments seek comment on these factors 
and any additional factors that should be considered when determining 
the range for allowable certified IDR entity fees.
    The certified IDR entity may not charge a fee that is beyond the 
upper or lower limits for fees set forth in annual guidance published 
by the Departments as approved fixed fees, unless the IDR entity or 
certified IDR entity requests and can provide justification for the 
higher or lower fee, and the Departments provide written approval for 
the certified IDR entity to charge a fee beyond the upper or lower 
limits for fees set forth in guidance. For example, if the IDR entity 
or certified IDR entity is able to show that, due to matters the 
Department has not considered, the cost of making determinations under 
26 CFR 54.9816-8T(c)(4), 29 CFR 2590.716-8(c)(4), and 45 CFR 
149.510(c)(4) will be higher than the upper limit for fees set forth in 
guidance, the certified IDR entity may charge a higher fee for 
determinations in that calendar year with the Departments' written 
approval in accordance with 26 CFR 54.9816-8T(e)(2)(vii), 29 CFR 
2590.716-8(e)(2)(vii), 45 CFR 149.510(e)(2)(vii). Certified IDR 
entities will not be permitted to vary their fees from any approved 
higher fees during the year for which such higher fees were approved.
    Specifically, in order for the certified IDR entity to receive the 
Departments' written approval to charge a fee beyond the upper or lower 
bounds for fees as set forth in guidance, the IDR entity or certified 
IDR entity must submit a written proposal that includes: (1) The 
alternative flat fee the IDR entity or certified IDR entity believes is 
appropriate; (2) a description of the circumstances that require the 
alternative flat fee; and (3) a description of how the alternative flat 
fee will be used to mitigate such circumstances. A fee other than the 
higher (or lower) fee previously approved, including one outside the 
allowable range, will be permitted only upon the Departments' written 
approval to charge the fee documented in the IDR entity's or certified 
IDR entity's written proposal. The Federal IDR portal will provide the 
functionality for IDR entities and certified IDR entities to request a 
fixed fee beyond the lower and upper limits set forth in guidance. As 
discussed earlier in this preamble, in instances where the disputing 
parties do not select a certified IDR entity, the Departments will 
select a certified IDR entity that charges a fee within the allowed 
range as provided for in guidance by the Departments. Only if there are 
insufficient certified IDR entities that charge a fee within the 
allowed range available to make the payment determination will the 
Departments select a certified IDR entity that charges a fee that has 
been approved by the Department but that is outside the allowed range.
    A certified IDR entity must also have procedures in place to retain 
the certified IDR entity fees paid by both parties at the initiation of 
the Federal IDR process in a trust or escrow account separate from 
other funds and to return the certified IDR entity fees paid by the 
prevailing party of an IDR payment determination, or a portion of the 
fees paid by both parties should they agree on an out-of-network rate 
through ongoing open negotiations, within 30 business days of the 
determination, as specified in these interim final rules. The certified 
IDR entity may (but is not required to) accrue interest on the funds 
held in a trust or escrow account and is not required to include 
accrued interest with the returned fee. Additionally, the IDR entity 
must also have a procedure in place to retain the administrative fee

[[Page 56006]]

required under 26 CFR 54.9816-8T(e)(2)(ix), 29 CFR 2590.716-
8(e)(2)(ix), and 45 CFR 149.510(e)(2)(ix), and to remit it to the 
Departments in accordance with the timeframe and procedures set forth 
in guidance.
    As a condition of certification, the IDR entity must show that it 
is able to conduct the Federal IDR process as required under these 
interim final rules. As part of this requirement, the IDR entity must 
have processes and procedures in place to ensure that it will not make 
a determination under the Federal IDR process with respect to which the 
certified IDR entity would not be eligible for selection due to a 
conflict of interest.
    Therefore, in order to be certified, an IDR entity must provide 
written documentation that shows the IDR entity satisfies certain 
standards related to conflicts of interest. Under 26 CFR 54.9816-
8T(e)(3)(i), 29 CFR 2590.716-8(e)(3)(i), and 45 CFR 149.510(e)(3)(i) 
the IDR entity must attest that it does not have a conflict of interest 
as defined in 26 CFR 54.9816-8T(a)(2)(iv), 29 CFR 2590.716-8(a)(2)(iv), 
and 45 CFR 149.510(a)(2)(iv). Additionally, to be certified, an IDR 
entity must demonstrate that it has procedures in place to ensure that 
the specific personnel assigned to a payment determination do not have 
conflicts of interest regarding any party to the dispute within the 1 
year immediately preceding an assignment of dispute determination. This 
requirement is similar to the requirements set forth in 18 U.S.C. 
207(b) and, as discussed earlier in this section of the preamble, 
provides a reasonable and appropriate standard for preventing conflicts 
of interest.\47\
---------------------------------------------------------------------------

    \47\ 18 U.S.C. 207 provides for certain restrictions on former 
officers, employees, and elected officials of the executive and 
legislative branches of the federal government.
---------------------------------------------------------------------------

    Finally, to preserve the integrity of the Federal IDR process, 
following certification, if a certified IDR entity, at any time 
acquires control of, becomes controlled by, or comes under common 
control with any entity described in paragraphs 26 CFR 54.9816-
8T(e)(3)(i), 29 CFR 2590.716-8(e)(3)(i), and 45 CFR 149.510(e)(3)(i), 
the certified IDR entity must notify the Departments in writing no 
later than 3 business days after the acquisition or exercise of 
control. As the certified IDR entity would no longer meet the 
certification criteria, it will have its certification revoked under 
the processes set forth in 26 CFR 54.9816-8T(e)(6), 29 CFR 2590.716-
8(e)(6), and 45 CFR 149.510(e)(6) (including the prohibition on 
accepting new payment determinations). The Departments seek comment on 
whether any additional protections are necessary.
    Certified IDR entities must also adhere to audit standards set 
forth in these interim final rules and by the Departments in guidance 
to ensure that certified IDR entities are adhering to the requirements 
of these interim final rules, including those regarding certification 
as a certified IDR entity and those outlining how entities must conduct 
payment determinations as defined in Code section 9816(c), ERISA 
section 716(c), and PHS Act section 2799A-1(c). To ensure adherence, 
the Departments intend to perform audits on a select number of 
certified IDR entities. Certified IDR entities may be randomly selected 
by the Departments for an audit or selected based upon stakeholder 
complaints (including those received in connection with a petition for 
revocation of certification) received by the Departments. Resulting 
findings may be used for revocation of certification or in re-
certification decisions made by the Departments.
    Finally, the IDR entity must collect and provide the information 
required to be reported to the Departments under 26 CFR 54.9816-8T(f), 
29 CFR 2590.716-8(f), and 45 CFR 149.510(f) and report such information 
about the Federal IDR process on a timely basis to the Departments in 
the form and manner provided by the Departments in guidance.
6. Petition for Denial or Revocation of IDR Entity Certification
    An individual, provider, facility, provider of air ambulance 
services, plan, or issuer may petition for the denial of a 
certification of an IDR entity or a revocation of a certification of a 
certified IDR entity for failure to meet the requirements of Code 
section 9816(c), ERISA section 716(c), PHS Act section 2799A-1(c), or 
these interim final rules, through the Federal IDR portal in the form 
and manner set forth in guidance to be issued by the Departments. The 
petitioner must submit a written petition to the Departments that 
identifies the IDR entity seeking certification or the certified IDR 
entity that is the subject of the petition and outlines the reasons for 
the petition. The petition must also specify whether the petition seeks 
denial or revocation of a certification and must be signed by the 
petitioner. The petitioner may use the standard petition notice issued 
by the Departments and submit any supporting documentation for 
consideration by the Departments. The Departments will make public the 
list of IDR entities seeking certification, as well as the list of 
certified IDR entities, to help facilitate the petition process. 
Petitioners submitting a petition for denial of a certification will 
have 5 business days from the announcement that an IDR entity is 
seeking certification to submit the written petition. This 5-business-
day period is applicable until the Departments issue guidance outlining 
a different period for petitions for a denial of certification.
    The Departments will acknowledge receipt of the petition within 10 
business days of receipt. If, after review, the Departments find that 
the petition adequately shows a failure to comply with the requirements 
of Code section 9816(c), ERISA section 716(c), PHS Act section 2799A-
1(c), or these interim final rules, the Departments shall notify the 
IDR entity seeking certification or the certified IDR entity by 
providing a de-identified copy of the petition. Following this 
notification, the IDR entity seeking certification or the certified IDR 
entity will have 10 business days to provide a response. After the time 
period for providing the response has passed, the Departments will 
review the response (if any) and determine whether a denial or a 
revocation of certification is warranted. The decision will be subject 
to the appeal requirements of 26 CFR 54.9816-8T(e)(6)(v), 29 CFR 
2590.716-8(e)(6)(v), and 45 CFR 149.510(e)(6)(v). If the Departments, 
after reviewing a certified IDR entity's response, find that the 
petition shows a failure to comply with the requirements of Code 
section 9816(c), ERISA section 716(c), or PHS Act section 2799A-1(c) 
but have not yet made a final decision pending appeal, a certified IDR 
entity may continue to work on previously assigned determinations. 
However, the certified IDR entity will not be permitted to accept new 
requests for IDR payment determinations unless and until the 
Departments issue a notice of the decision to the certified IDR entity 
finding that a revocation of certification is not warranted. If the 
entity is seeking certification, and the Departments find that denying 
certification is warranted, then the Departments will deny 
certification.
    The IDR entity certification requirements included in these final 
rules are developed to ensure the integrity of the Federal IDR process. 
Failure to meet these standards puts at risk the Departments' ability 
to ensure providers, facilities, providers of air ambulance services, 
plans, and issuers can avail themselves of an equitable and efficient 
process. Therefore, the Departments may deny an IDR entity

[[Page 56007]]

certification if, during the process of certification, including as a 
result of a petition, the Departments determine the IDR entity fails to 
meet the applicable standards required for certification. Additionally, 
these interim final rules set forth other reasons that certification 
may be denied. For example, if the IDR entity has knowingly committed 
or participated in fraudulent or abusive activities such as by 
submitting to the Departments fraudulent data or information during the 
certification process or submitting data or information that the IDR 
entity knows to be false, certification may be denied. Another 
situation in which an IDR entity's application for certification might 
be denied for knowingly committing or participating in fraudulent or 
abusive activities would be when an IDR entity has engaged in 
fraudulent practices related to activities conducted outside the 
Federal IDR process. Additionally, if the IDR entity submits 
information as part of the certification process that demonstrates that 
the IDR entity cannot fulfill the responsibilities required of 
certified IDR entities, certification will be denied.
    Also, to the extent the IDR entity has failed to comply with 
requests for information from the Departments as part of the 
certification process, certification may be denied. The Departments 
expect that as part of the certification process, the Departments may 
need to contact the IDR entities and request clarifying information.
    Moreover, if in conducting payment determinations, including those 
conducted outside the Federal IDR process, the IDR entity has failed to 
meet the standards that applied to those determinations or reviews, 
including standards of independence and impartiality, certification may 
be denied. With respect to certified IDR entities applying for 
recertification, the Departments will also consider whether, in 
conducting payment determinations under the Federal IDR process, the 
certified IDR entity has met the standards applicable to those payment 
determinations. It is the Departments' view that, although certain 
conduct (for example, unethical conduct regarding payment 
determinations conducted outside the Federal IDR process) may not 
constitute a violation of the Federal IDR process, this conduct could 
indicate that the IDR entity may be unable to comply with the 
requirements of the Federal IDR process. Additionally, to the extent it 
is otherwise determined that the IDR entity is not fit or qualified to 
make determinations, certification may be denied.
    If the Departments find, after review of the evidence, that a 
certified IDR entity is no longer qualified to make determinations due 
to an audit, a petition, or otherwise, the certification of the IDR 
entity may be revoked. A certified IDR entity's certification may be 
revoked prior to the end of the 5-year term for the following reasons.
    First, a certified IDR entity's certification may be revoked prior 
to the end of the 5-year term if the Departments determine that the 
certified IDR entity has a pattern or practice of noncompliance with 
any of the requirements applicable to certified IDR entities under the 
Federal IDR process.
    Second, if the certified IDR entity is operating in a manner that 
hinders the efficient and effective administration of the Federal IDR 
process, its certification may be revoked prior to the end of the 5-
year term. For example, if a certified IDR entity consistently fails to 
meet the deadline for rendering its decisions as set forth in these 
interim final rules, its certification may be revoked. Also, if a 
certified IDR entity repeatedly fails to check for a conflict of 
interest between itself, its personnel, and third parties with which 
the certified IDR entity contracts, and the disputing parties, its 
certification may be revoked prior to the end of the 5-year term.
    Third, if the certified IDR entity no longer meets the applicable 
certification standards set forth in these interim final rules under 26 
CFR 54.9816-8T(e)(1), 29 CFR 2590.716-8(e)(1), and 45 CFR 
149.510(e)(1), its certification may be revoked prior to the end of the 
5-year term.
    Fourth, if the certified IDR entity has committed or knowingly 
participated in fraudulent or abusive activities, including submission 
of false or fraudulent data to the Departments, its certification may 
be revoked prior to the end of the 5-year term. A situation in which an 
IDR entity's application for certification might be revoked for 
knowingly committing or participating in fraudulent or abusive 
activities would be where a certified IDR entity has engaged in 
fraudulent practices related to activities conducted outside the 
Federal IDR process.
    Fifth, if the certified IDR entity no longer possesses the 
financial viability to provide dispute resolution under the Federal IDR 
process, its certification may be revoked prior to the end of the 5-
year term. The Departments are of the view that a certified IDR entity 
must possess the requisite level of fiscal stability that demonstrates 
the entity is a viable entity able to continue to carry out the Federal 
IDR process in a timely and efficient manner as set forth in the No 
Surprises Act and these interim final rules.
    Sixth, if the certified IDR entity has failed to comply with 
requests from the Departments made as part of an audit, including 
submission of records, its certification may be revoked prior to the 
end of the 5-year term. The audit process plays an important part in 
helping to ensure that certified IDR entities are abiding by the 
requirements set forth in these interim final rules. In order to ensure 
that the Federal IDR process is fair, equitable, and does not have an 
inflationary effect on health care costs due to certified IDR entities 
failing to properly apply the factors as set forth in these interim 
final rules, the Departments are of the view that it will be prudent to 
review certified IDR entities' processes and procedures. Therefore, 
failure to comply with such audits will be a basis for revocation of 
certification.
    Seventh, if it is otherwise determined that the certified IDR 
entity is no longer fit or qualified to make payment determinations, 
its certification may be revoked prior to the end of the 5-year term. 
For example, the Departments may determine that an IDR entity is unfit 
to participate in the Federal IDR process if the IDR entity is engaged 
in actions that risk the integrity of the Federal IDR process.
    If the Departments make a preliminary determination that an IDR 
entity's certification should be denied or that a certified IDR 
entity's certification should be revoked, the Departments will issue a 
notice of proposed denial to the IDR entity seeking certification or a 
notice of proposed revocation to the certified IDR entity within 10 
business days of the preliminary determination. The notice will include 
the proposed effective date of denial or revocation, explain the 
reasons for denial or revocation, and provide an opportunity to request 
an appeal of the proposed denial or revocation. The Departments seek 
comment on whether final rules should include additional bases for 
revocation. The Departments also seek comment on whether certain facts 
and circumstances should result in immediate revocation of 
certification of the certified IDR entity and reassignment of any 
pending payment determinations prior to completion by that certified 
IDR entity.
    In order for an IDR entity that has received a notice of proposed 
denial or certified IDR entity that has received a notice of proposed 
revocation to request an appeal of its proposed denial or revocation, 
as applicable, it must submit its request for an appeal to the 
Departments within 30 business days of

[[Page 56008]]

the date of the notice and in the manner prescribed by the notice. 
During the period when the IDR entity or certified IDR entity may 
appeal the denial or revocation, the Departments will not issue a 
notice of final denial or revocation. Furthermore, until a final 
decision on the appeal is rendered by the Departments, the certified 
IDR entity may complete any open IDR payment determinations assigned to 
it at the time of notification, but may not receive new assignments 
until a final decision regarding revocation has been made. Relevant 
information to support a request for appeal may include a statement of 
the facts, law, and arguments that negate or mitigate the evidence 
provided in support of the IDR entity's certification denial or the 
revocation of a certified IDR entity's certification, including a 
description of the actions the certified IDR entity or IDR entity has 
taken, is taking, or intends to take to cure the failures identified in 
the notice (if possible) and to prevent the failures from reoccurring.
    In the event the IDR entity or certified IDR entity does not timely 
submit a request for appeal of the proposed denial or revocation, the 
Departments will issue a final notice of denial or revocation as 
described under 26 CFR 54.9816-8T(e)(6)(ii), 29 CFR 2590.716-
8(e)(6)(iii), and 45 CFR 149.510(e)(6)(iii). Similarly, if the 
Departments reach a final determination upon appeal that the IDR 
entity's certification is denied or the certified IDR entity's 
certification is revoked, the Departments will issue a final notice of 
denial or revocation including an explanation of the reasons for final 
denial or revocation and consequences of such denial or revocation of 
certification to the IDR entity and the petitioner. Upon final notice 
of denial or revocation, the IDR entity shall not be considered a 
certified IDR entity and therefore shall not be eligible to accept 
payment determinations under the Federal IDR process. If, following a 
final decision denying or revoking a certification, the IDR entity 
comes into compliance with the requirements of 26 CFR 54.9816-8T(e), 29 
CFR 2590.716-8(e), and 45 CFR 149.510(e), the IDR entity may again 
apply for certification beginning on the 181st calendar day after the 
date of the final notice of denial or revocation. The Departments are 
of the view that providing a 180-calendar-day cooling-off period 
provides adequate time for an IDR entity to correct and improve its 
processes to comply with the standards of these interim final rules, 
ensuring that IDR entities are afforded an opportunity to come into 
compliance and re-apply for certification. The Departments are using 
calendar days for this standard rather than business days for 
consistency with other, similar suspension periods, such as those in 
the guaranteed availability provisions under PHS Act section 
2702(d)(2), as implemented at 45 CFR 147.104(c)(2).
    The Departments will monitor the implementation of the Federal IDR 
process, as well as the petition process, to determine whether 
certified IDR entities are abiding by the applicable requirements. The 
Departments seek comment on any additional requirements regarding 
denial and revocation, and whether other steps may be required to 
prevent patterns and practices of noncompliance.
7. Reporting of Information Relating to the Federal IDR Process for 
Qualified IDR Items and Services That Are Not Air Ambulance Services
    Code section 9816(c)(7), ERISA section 716(c)(7), and PHS Act 
section 2799A-1(c)(7) direct the Departments to make certain 
information related to the Federal IDR process available on a public 
website for each calendar quarter in 2022 and each calendar quarter in 
subsequent years. Code section 9816(c)(7)(C), ERISA section 
716(c)(7)(C), and PHS Act section 2799A-1(c)(7)(C) specifically require 
the certified IDR entities to provide information to the Departments as 
determined necessary to carry out the requirements regarding 
publication of information related to the Federal IDR process. To 
ensure the Departments have the information needed to satisfy this 
requirement, these interim final rules provide that, within 30 business 
days of the close of each month, each certified IDR entity must report 
certain data and information in a form and manner specified by the 
Departments for qualified IDR items and services furnished on or after 
January 1, 2022 that were subject to payment determinations. Such 
reporting will be required as an ongoing condition of certification. 
The Departments anticipate that much of this information will be 
captured by the certified IDR entities during the normal course of the 
Federal IDR process. As discussed elsewhere in this preamble, the 
Departments expect that many of these reporting requirements will be 
captured as information submitted through the Federal IDR portal. To 
the extent the necessary information is captured directly through the 
portal, the Departments do not intend for certified IDR entities to 
report duplicative information. The Departments will provide additional 
guidance to certified IDR entities on their reporting obligations.
    Under these interim final rules, the certified IDR entity must 
report the number of Notices of IDR Initiation submitted to the 
certified IDR entity during the immediately preceding month. In 
instances where the provider or facility submits the initial Notice of 
IDR Initiation, the certified IDR entity must submit to the Departments 
information on the size of the provider practice and the size of the 
facilities submitting Notices of IDR Initiation. Specifically, the 
certified IDR entity must specify whether the provider practice has 
fewer than 20 employees, 20 to 50 employees, 51 to 100 employees, 101-
500 employees or more than 500 employees. For facilities, the certified 
IDR entity must specify whether the facility has 50 or fewer employees, 
51 to 100 employees, 101-500 employees, or more than 500 employees. 
This information will allow the Departments to determine whether 
smaller providers and facilities have the resources necessary to make 
use of the Federal IDR process and will assist the Departments in 
determining whether larger organizations may have an unfair advantage 
in the process. It also will assist the Departments in determining the 
effect of the Federal IDR process on horizontal and vertical 
integration of providers and facilities, and in reporting on this 
effect to Congress, as required by statute in Code section 9816(c), 
ERISA section 716(c), PHS Act section 2799A-1(c), and section 109 of 
the No Surprises Act.
    Additionally, with respect to Notices of IDR Initiation submitted 
during the immediately preceding month, certified IDR entities must 
report the number of Notices of IDR Initiation for which a final 
determination was made by the certified IDR entity under these interim 
final rules. The certified IDR entity also must report a description of 
the qualified IDR items and services for each Notice of IDR Initiation 
submitted during the immediately preceding month for which a payment 
determination was made. This information should include the relevant 
billing and service codes, such as the CPT, HCPCS, DRG codes, or 
National Drug Codes (if applicable). The certified IDR entity must also 
report the relevant geographic region for purposes of the QPA for the 
qualified IDR items and services with respect to which the Notice of 
IDR Initiation was provided.
    These interim final rules also require that for each determination 
issued in relation to a Notice of IDR Initiation submitted during the 
immediately

[[Page 56009]]

preceding month, the certified IDR entity must report the offers 
submitted by each party expressed as both a dollar amount and the 
corresponding percentage of the QPA represented by that dollar amount, 
and whether the offer selected by the certified IDR entity was 
submitted by the plan or issuer, or the provider or facility. Where 
batched items and services have multiple QPAs, the certified IDR 
entities must report the offer as a percentage of each QPA that applied 
with respect to the batched items and services to which the offer 
applied. For example, if one batch of services included services to 
which two different QPAs applied, and the parties each submitted the 
same offer for all batched services, then the certified IDR entity must 
report each offer as a dollar amount and as a percentage of both QPAs. 
However, if instead each party submitted two offers--one that applied 
to the services for which one QPA applied and one that applied to the 
services for which the other QPA applied--then the certified IDR entity 
is required to report each offer separately and must express each offer 
as a dollar amount and as a percentage of the applicable QPA. As 
discussed earlier in this preamble, in making the determination, the 
certified IDR entity must provide a rationale for its decision, 
including the extent to which a decision relied on criteria other than 
the QPA. The certified IDR entity must also report the number of times 
the out-of-network rate determined exceeded the QPA. Where the QPA 
differs within a group of batched items and services, the certified IDR 
entity also must include whether the out-of-network rate (or various 
out-of-network rates, when more than one out-of-network rate is 
selected) exceeded the applicable QPA.
    For each determination issued in relation to a Notice of IDR 
Initiation submitted during the immediately preceding month, the 
certified IDR entity must also report certain additional information on 
the parties involved. Specifically, the certified IDR entity must 
report the practice specialty or type of each provider or facility 
involved in furnishing the qualified IDR items or services at issue 
with respect to the determination. Additionally, the certified IDR 
entity must provide each party's name and address.
    The certified IDR entity also must report the number of business 
days taken between the selection of the certified IDR entity and the 
selection of the payment amount by the certified IDR entity for each 
determination issued in relation to a Notice of IDR Initiation 
submitted during the immediately preceding month. Finally, the 
certified IDR entity must report the total amount of certified IDR 
entity fees paid to the certified IDR entity during the immediately 
preceding month. This total amount of certified IDR entity fees should 
not include amounts refunded by the certified IDR entity to the 
prevailing party or the administrative fees that are collected on 
behalf of the Departments.
8. Reporting of Information Relating to the Federal IDR Process for 
Qualified IDR Items or Services That Are Air Ambulance Services
    Under Code section 9817, ERISA section 717, and PHS Act section 
2799A-2, the Departments must publish on a public website for each 
calendar quarter in 2022 and each calendar quarter in a subsequent year 
certain information regarding disputes about air ambulance services 
that differs from the information required under Code section 9816, 
ERISA section 716, and PHS Act section 2799A-1 regarding disputes for 
other items and services to which the protections of the No Surprises 
Act apply. Therefore, 26 CFR 54.9817-2T(b)(3), 29 CFR 2590.717-2(b)(3) 
and 45 CFR 149.520(b)(3) specify that in applying the requirements of 
26 CFR 54.9816-8T(f), 29 CFR 2590.716-8(f), and 45 CFR 149.510(f) to 
air ambulance services, the information that the certified IDR entity 
must report within 30 business days of the close of each month, for 
services furnished on or after January 1, 2022, in a form and manner 
specified by the Departments, is as follows.
    The certified IDR entity must report the number of Notices of IDR 
Initiation submitted to the certified IDR entity that pertain to air 
ambulance services during the immediately preceding month. 
Additionally, with respect to Notices of IDR Initiation submitted 
during the immediately preceding month, the certified IDR entity must 
report the number of Notices of IDR Initiation for which there was a 
determination under 26 CFR 54.9816-8T(c)(4)(ii), 29 CFR 2590.716-
8(c)(4)(ii), and 45 CFR 149.510(c)(4)(ii), as applied by 26 CFR 
54.9817-2T(b)(1), 29 CFR 2590.717-2(b)(1), and 45 CFR 149.520(b)(1) for 
air ambulance services. The certified IDR entity must also report the 
number of times the out-of-network rate determined (or agreed to) 
exceeded the QPA for air ambulance services.
    With respect to each Notice of IDR Initiation submitted during the 
immediately preceding month, the certified IDR entity must provide a 
description of each air ambulance service, including the relevant 
billing and service codes and point of pick-up (as defined in 42 CFR 
414.605) for the services included in such Notice of IDR Initiation. 
For each Notice of IDR Initiation, the certified IDR entity must also 
provide the amount of the offer submitted by a plan or issuer (as 
applicable) and by the nonparticipating provider of air ambulance 
services, expressed as both a dollar amount and the corresponding 
percentage of the QPA represented by that dollar amount. Of these 
amounts, the certified IDR entity must also indicate whether the offer 
selected by the certified IDR entity was the offer submitted by the 
plan or issuer or by the provider of air ambulance services and the 
amount of the offer so selected, expressed as both a dollar amount and 
a percentage of the QPA. The certified IDR entity must also report the 
rationale for the certified IDR entity's decision, including the extent 
to which the decision relied on the criteria listed under 26 CFR 
54.9817-2T(b)(2), 29 CFR 2590.717-2(b)(2), and 45 CFR 149.520(b)(2). 
Additionally, the certified IDR entity must identify the air ambulance 
vehicle type, including whether the vehicle is fixed wing or rotary 
wing (information which should be included in the relevant service 
code), and the clinical capability level of the vehicle (if the parties 
have provided such information). The certified IDR entity must also 
report the identity of each plan or issuer, and provider of air 
ambulance services, with respect to the Notice of IDR Initiation 
submitted during the immediately preceding month. Specifically, each 
certified IDR entity must provide each party's name and address, as 
applicable. The certified IDR entity must report the number of business 
days taken between the selection of the certified IDR entity and the 
certified IDR entity's selection of the payment amount. Finally, the 
certified IDR entity must also report the total amount of certified IDR 
entity fees paid to the certified IDR entity for the immediately 
preceding month. This total amount of certified IDR entity fees should 
not include amounts refunded by the certified IDR entity to prevailing 
parties or the administrative fees that are collected on behalf of the 
Departments.
9. Extension of Time Periods for Extenuating Circumstances
    Under Code section 9816(c)(9), ERISA section 716(c)(9), PHS Act 
section 2799A-1(c)(9), and these interim final rules, the time periods 
specified in these interim final rules (other than the timing of the 
payments, including, if applicable, payments to the provider, facility 
or provider of air ambulance services) may be extended in the case of

[[Page 56010]]

extenuating circumstances at the Departments' discretion. The 
Departments may extend time periods on a case-by-case basis if the 
extension is necessary to address delays due to matters beyond the 
control of the parties or for good cause. Such extension may be 
necessary if, for example, a natural disaster impedes efforts by plans, 
issuers, providers, facilities, and providers of air ambulance services 
to comply with the terms of these interim final rules. Additionally, 
for the extension to be granted, the parties must attest that prompt 
action will be taken to ensure that the payment determination under 
this section is made as soon as administratively practicable. Parties 
may request an extension by submitting a Request for Extension due to 
Extenuating Circumstances through the Federal IDR portal, including an 
explanation about the extenuating circumstances that require an 
extension and why the extension is needed.

E. Applicability of the Rules Regarding the Federal IDR Process

    The applicability of these interim final rules with respect to the 
items and services, plans and issuers, and providers, facilities, and 
providers of air ambulance services subject to these interim final 
rules, parallels that of the July 2021 interim final rules to ensure 
that the surprise billing protections of the No Surprises Act are 
implemented in a consistent manner. Finally, these interim final rules 
provide standards for certifying IDR entities, and standards for 
certified IDR entities. Accordingly, these interim final rules amend 26 
CFR 54.9816-2T, 29 CFR 2590.716-2, and 45 CFR 149.20 to include 
references to 26 CFR 54.9816-8T and 54.9817-2T; 29 CFR 2590.716-8 and 
2590.717-2; and 45 CFR 149.510 and 149.520 to ensure that the items and 
services, as well as entities subject to the balance billing 
protections under the July 2021 interim final rules, are eligible for 
the Federal IDR process under these interim final rules. The 
Departments solicit comment on whether any differences or departures 
from the approach taken in the July 2021 interim final rules are 
warranted.
    These interim final rules implementing the Federal IDR process 
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 
and to certified IDR entities, health care providers and facilities, 
and providers of air ambulance services beginning on January 1, 2022. 
The interim final rules regarding IDR entity certification at 26 CFR 
54.9816-8T(a), 26 CFR 54.9816-8T(e), 29 CFR 2590.718-8(a), 29 CFR 
2590.718-8(e), 45 CFR 149.510(a) and 45 CFR 149.510(e), are applicable 
beginning on October 7, 2021 so that the Departments can begin 
certifying IDR entities before the Federal IDR process becomes 
applicable. The term ``group health plan'' includes both insured and 
self-insured group health plans. Group health plans include private 
employment-based group health plans subject to ERISA, non-Federal 
governmental plans (such as plans sponsored by states and local 
governments) subject to the PHS Act, and church plans subject to the 
Code. Individual health insurance coverage includes coverage offered in 
the individual market, through or outside of an Exchange, and includes 
student health insurance coverage as defined at 45 CFR 147.145. In 
addition, under the OPM interim final rules, FEHB carriers must comply 
with the Departments' interim final rules, subject to OPM regulation 
and contract provisions. The No Surprises Act amended section 1251(a) 
of the Affordable Care Act to specify that PHS Act sections 2799A-1, 
2799A-2, and 2799A-7 apply to grandfathered health plans for plan years 
beginning on or after January 1, 2022. Therefore, these interim final 
rules apply to grandfathered health plans (as defined in 26 CFR 
54.9815-1251, 29 CFR 2590.715-1251, and 45 CFR 147.140) for plans years 
beginning on or after January 1, 2022. In addition, these interim final 
rules implementing the Federal IDR process apply to certain non-
grandfathered health insurance coverage in the individual and small 
group markets with respect to which CMS has announced it will not take 
enforcement action with respect to certain specified market 
requirements even though the coverage is out of compliance with those 
requirements (sometimes referred to as grandmothered or transitional 
plans). These interim final rules implementing the Federal IDR process 
do not apply to health reimbursement arrangements (HRAs), or other 
account-based group health plans, as described in 26 CFR 54.9815-
2711(d)(6)(i), 29 CFR 2590.715-2711(d)(6)(i), and 45 CFR 
147.126(d)(6)(i), that make reimbursements subject to a maximum fixed 
dollar amount for a period, as the benefit design of these plans makes 
concepts related to surprise billing, including the IDR process, 
inapplicable. Additionally, the Departments expect that account-based 
group health plans typically will be integrated with other coverage 
that will have protections against surprise billing (such as individual 
coverage HRAs) or will be otherwise exempt from these requirements 
(such as excepted benefit HRAs). Therefore, under these interim final 
rules, these requirements do not apply to individual coverage HRAs and 
other account-based plans, consistent with the existing applicability 
provisions in 26 CFR 54.9816-2T, 29 CFR 2590.716-2, and 45 CFR 149.20 
with respect to other requirements in 26 CFR part 54, 29 CFR subpart D, 
and 45 CFR part 149. The Departments note that by statute certain plans 
and coverage are not subject to the interim final rules implementing 
the Federal IDR process. This includes a plan or coverage consisting 
solely of excepted benefits \48\ as well as short-term, limited-
duration insurance as defined under PHS Act section 2791(b)(5).\49\ 
Excepted benefits are described in Code section 9832, ERISA section 733 
and PHS Act section 2791. Under PHS Act section 2791(b)(5), short-term, 
limited-duration insurance is excluded from the definition of 
individual health insurance coverage and is therefore exempt from these 
interim final rules regarding the Federal IDR process and the statutory 
provisions these interim final rules implement. In addition, these 
interim final rules do not apply to retiree-only plans, because ERISA 
section 732(a) and Code section 9831(a) generally provide that part 7 
of ERISA and chapter 100 of the Code respectively do not apply to plans 
with fewer than two participants who are current employees (including 
retiree-only plans, which cover fewer than two participants who are 
current employees). Title XXVII of the PHS Act, as amended by the 
Affordable Care Act, no longer contains a parallel provision at section 
2721(a) of the PHS Act. However, as explained in prior rulemaking, HHS 
will not enforce the requirements of title XXVII of the PHS Act with 
respect to non-Federal governmental retiree-only plans and encourages 
states to adopt a similar approach with respect to health insurance 
coverage of retiree-only plans.\50\ HHS intends to continue to follow 
this same approach, including with respect to the new market reforms 
established in the No Surprises Act.
---------------------------------------------------------------------------

    \48\ Code section 9831, ERISA section 732, and PHS Act section 
2722; 26 CFR 54.9831-1(c), 29 CFR 2590.732(c), and 45 CFR 
146.145(b).
    \49\ 26 CFR 54.9801-2, 29 CFR 2590.701-2, and 45 CFR 144.103.
    \50\ 75 FR 34537, 34540 (June 17, 2010).

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

[[Page 56011]]

IV. External Review and Section 110 of the No Surprises Act

    Section 110 of the No Surprises Act states that ``[i]n applying the 
provisions of section 2719(b) of the [PHS Act] to group health plans 
and health insurance issuers offering group or individual health 
insurance coverage, the Secretary of HHS, Secretary of Labor, and 
Secretary of the Treasury, shall require, beginning not later than 
January 1, 2022, the external review process described in paragraph (1) 
of such section to apply with respect to any adverse determination by 
such a plan or issuer under Code section 9816 or 9817, ERISA section 
716 or 717 or PHS Act section 2799A-1 or 2799A-2, including with 
respect to whether an item or service that is the subject to such a 
determination is an item or service to which such respective section 
applies.'' The statute defines the terms group health plan and health 
insurance issuer by reference to PHS Act section 2791, ERISA section 
733, and Code section 9832, as applicable.
    These interim final rules implement section 110 of the No Surprises 
Act in two ways. First, these interim final rules amend the scope of 
claims eligible for external review set forth in the regulations 
implementing PHS Act section 2719 to include adverse benefit 
determinations related to compliance with the surprise billing and 
cost-sharing protections under the No Surprises Act. Additionally, 
these interim final rules clarify the scope of external review in light 
of new surprise billing and cost-sharing protections under the No 
Surprises Act and provide examples of which types of adverse benefit 
determinations will be eligible for external review. Second, these 
interim final regulations extend the external review requirement to 
grandfathered health plans and health insurance issuers for adverse 
benefit determinations involving items and services covered by 
requirements of Code section 9816 or 9817, ERISA section 716 or 717, or 
PHS Act section 2799A-1 or 2799A-2, as added by the No Surprises Act. 
The Departments solicit comment on whether and to what extent 
additional guidance or changes to the existing regulations are needed 
to protect participants, beneficiaries, and enrollees from surprise 
medical bills, consistent with section 110 of the No Surprises Act.

A. Scope of Claims Eligible for External Review

    Under PHS Act section 2719 and its implementing regulations, non-
grandfathered group health plans and health insurance issuers offering 
non-grandfathered group or individual health insurance coverage must 
comply with any applicable state external review process, if that 
process includes, at a minimum, the consumer protections set forth in 
the NAIC Uniform External Review Model Act.\51\ However, if the state 
external review process does not meet this standard, or if a plan or 
issuer is not subject to state insurance regulation, the plan or issuer 
must comply with the Federal external review process, as described in 
26 CFR 54.9815-2719(d), 29 CFR 2590.715-2719(d), and 45 CFR 147.136(d).
---------------------------------------------------------------------------

    \51\ Available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/naic-uniform-review-model-act.pdf.
---------------------------------------------------------------------------

    State external review processes that meet the minimum standards 
must provide for the external review of adverse benefit determinations 
based on requirements for medical necessity, appropriateness, health 
care setting, level of care, or effectiveness of a covered benefit. The 
Federal external review process must be available for any adverse 
benefit determination by a plan or issuer that involves medical 
judgment, as well as a rescission of coverage. In the Departments' 
view, the scope of claims eligible for external review under state 
processes that meet the minimum standards for approval is substantially 
similar to the scope of claims eligible for external review under the 
Federal process.
    In 2010, the Departments issued interim final rules that set forth 
the original scope of claims eligible for external review under the 
Federal external review process.\52\ Specifically, any adverse benefit 
determination (including final internal adverse benefit determinations) 
could be reviewed unless it was related to a participant's or 
beneficiary's failure to meet the requirements for eligibility under 
the terms of a group health plan (for example, worker classification 
and similar issues were not within the scope of the Federal external 
review process). In response to stakeholder comments, the Departments 
issued an amendment in 2011 suspending the original rule and narrowing 
the scope to claims that involve: (1) Medical judgment (including, but 
not limited to, those based on the plan's or issuer's requirements for 
medical necessity, appropriateness, health care setting, level of care, 
or effectiveness of a covered benefit, or its determination that a 
treatment is experimental or investigational), as determined by the 
external reviewer; and (2) a rescission of coverage (whether or not the 
rescission has any effect on any particular benefit at the time).\53\ 
The Departments finalized the narrowed scope in the 2015 final 
rules.\54\
---------------------------------------------------------------------------

    \52\ 75 FR 43329 (July 23, 2010).
    \53\ 76 FR 37207 (June 10, 2011).
    \54\ 80 FR 72191 (Nov. 18, 2015).
---------------------------------------------------------------------------

    Although the scope of Federal external review was narrowed in 
comparison to the scope as outlined in the 2010 interim final 
regulations, the Departments note that the scope of claims that are 
eligible for external review in general is broad, as many adverse 
benefit determinations involve medical judgment. The 2015 final 
regulations issued by the Departments include the following examples: 
(1) Whether treatment by a specialist is medically necessary or 
appropriate (pursuant to the plan's standard for medical necessity or 
appropriateness); (2) whether treatment involved ``emergency care'' or 
``urgent care,'' affecting coverage or the level of coinsurance; (3) a 
determination that a medical condition is a preexisting condition; (4) 
whether a participant or beneficiary is entitled to a reasonable 
alternative standard for a reward under the plan's wellness program; 
and (5) whether a plan or issuer is complying with the nonquantitative 
treatment limitation provisions of the Mental Health Parity and 
Addiction Equity Act.\55\
---------------------------------------------------------------------------

    \55\ 26 CFR 54.9815-2719(d)(1); 29 CFR 2590.715-2719(d)(1); 45 
CFR 147.136(d)(1).
---------------------------------------------------------------------------

    The Departments have similarly provided a number of additional 
examples in preambles to rulemaking under PHS Act section 2719 to 
provide further clarification on the broad scope of the external review 
process. In the preamble to interim final rules issued in 2011, the 
Departments stated that examples of medical judgment would include the 
appropriate health care setting for providing medical care to an 
individual (such as outpatient versus inpatient care or home care 
versus rehabilitation facility); a plan's general exclusion of an item 
or service (such as speech therapy), if the plan covers the item or 
service in certain circumstances based on a medical condition (such as, 
to aid in the restoration of speech loss or impairment of speech 
resulting from a medical condition); and the frequency, method, 
treatment, or setting for a recommended preventive service, to the 
extent not specified in the recommendation or guideline of the U.S. 
Preventive Services Task Force, the Advisory Committee on Immunization 
Practices of the Centers for Disease Control and Prevention, or the 
Health

[[Page 56012]]

Resources and Services Administration.\56\ In the preamble to final 
rules issued in 2015, the Departments also clarified that issues 
related to how a claim is coded may also involve medical judgment 
because ``[m]edical judgment is necessary to determine whether the 
correct code was used in the patient's case.'' \57\
---------------------------------------------------------------------------

    \56\ 76 FR 37207, 37216 (June 10, 2011).
    \57\ 80 FR 72191, 72209 (Nov. 18, 2015).
---------------------------------------------------------------------------

    Consistent with this principle, the Departments are of the view 
that many claims that result in an adverse benefit determination 
involving items and services subject to the surprise billing and cost-
sharing protections under the No Surprises Act generally would be 
eligible for external review under the current scope as specified in 
the 2015 final regulations. However, as stated above, section 110 of 
the No Surprises Act directs the Departments to require the external 
review process under PHS Act section 2719 to apply with respect to any 
adverse determination by a plan or issuer under PHS Act section 2799A-1 
or 2799A-2, ERISA section 716 or 717, or Code section 9816 or 9817, 
including with respect to whether an item or service that is subject to 
such a determination is an item or service to which the respective 
section applies. The Departments are of the view that it is important 
to ensure that consumers can avail themselves of external review in 
these situations and ensure that they are afforded full protection 
against surprise medical costs (including cost sharing), as intended by 
the No Surprises Act. Accordingly, these interim final rules amend the 
2015 final rules to broaden the scope of external review requirements 
and explicitly require, to the extent not already covered, that any 
adverse determination that involves consideration of whether a plan or 
issuer is complying with PHS Act section 2799A-1 or 2799A-2, ERISA 
section 716 or 717, or Code section 9816 or 9817 is eligible for 
external review.
    These interim final rules also amend the 2015 final regulations to 
add five new examples (examples number 3 through 7 in the regulation 
text) to clarify how the external review requirements apply to certain 
adverse benefit determinations involving items and services within the 
scope of the surprise billing and cost-sharing protections for out-of-
network emergency services, nonemergency services performed by 
nonparticipating providers at participating facilities, and air 
ambulance services furnished by nonparticipating providers of air 
ambulance services under section Code section 9816 or 9817, ERISA 
section 716 or 717, or PHS Act section 2799A-1 or 2799A-2. The first 
new example illustrates that any determination of whether a claim is 
for treatment for emergency services that involves medical judgment or 
consideration of compliance with the cost-sharing and surprise billing 
protections is eligible for external review.
    The second new example clarifies that whether a claim for items and 
services furnished by a nonparticipating provider at an in-network 
facility is subject to the protections under the No Surprises Act is 
eligible for external review because adjudication of the claim requires 
consideration of health care setting and level of care or compliance 
with cost-sharing and surprise billing protections.
    The third new example clarifies that whether an individual was in a 
condition to receive a notice about the availability of the protections 
under the No Surprises Act and give informed consent to waive those 
protections is a claim eligible for external review because 
adjudication of the claim involves consideration of compliance with the 
cost-sharing and surprise billing protections and medical judgment.
    The fourth new example illustrates that whether a claim for items 
and services is coded correctly, consistent with the treatment an 
individual actually received, is a claim eligible for external review 
because adjudication of the claim involves medical judgment.
    The fifth new example illustrates that consideration of whether 
cost-sharing was appropriately calculated for claims for ancillary 
services provided by an out-of-network provider at an in-network 
facility involves consideration of compliance with the cost-sharing and 
surprise billing protections and is a claim eligible for external 
review.
    The Departments solicit comment on these examples and whether any 
additional examples are needed. The Departments intend to ensure that 
this provision is implemented in a manner that affords consumers broad 
protection under section 110 of the No Surprises Act.

B. Application to Grandfathered Plans and Coverage

    PHS Act section 2719 and its implementing regulations do not 
currently apply to coverage offered by health insurance issuers and 
group health plans that are grandfathered health plans because section 
1251 of the Affordable Care Act provides that PHS Act section 2719 does 
not apply to grandfathered plans and coverage.
    These interim final rules amend the regulations under PHS Act 
section 2719 to require grandfathered plans and coverage to provide for 
external review of claims covered by the protections of the No 
Surprises Act for plan years (or, in the individual market, policy 
years) beginning on or after January 1, 2022. This change is grounded 
in the text of section 110 of the No Surprises Act, in addition to the 
policy reasons stated earlier in this preamble regarding the 
Departments' intent to implement this provision broadly. Section 110 
states that external review requirements shall ``apply with respect to 
any adverse determination by such a plan or issuer under section 2799A-
1 or 2799A-2 of the PHS Act, section 716 or 717 of ERISA, or section 
9816 or 9817 of the Code[.]'' These sections of the PHS Act, ERISA, and 
the Code, as well as all the other provisions of the No Surprises Act, 
as discussed in section I.A of this preamble, are all applicable to 
grandfathered plans and coverage. Thus, to ensure that adverse benefit 
determinations under grandfathered plans and coverage for claims 
subject to those provisions are eligible for external review, external 
review requirements must be applicable to grandfathered plans and 
coverage for those claims. The Departments solicit comment on this 
amendment, including whether any additional guidance is warranted to 
help grandfathered plans and issuers comply with these requirements.
    The Departments recognize that the internal claims and appeals 
rules under 29 CFR 2560.503-1, as incorporated under regulations 
implementing PHS Act section 2719,\58\ do not apply to issuers offering 
grandfathered coverage in the individual market, or grandfathered non-
Federal Government plans. Those grandfathered plans and issuers 
offering that grandfathered coverage must make external review 
available for adverse benefit determinations under PHS Act section 
2799A-1 or 2799A-2 when an enrollee has exhausted applicable appeal 
rights under state law or under the terms of the enrollee's coverage. 
In cases where these plans and issuers are not subject to a requirement 
to have an internal appeals process and have not otherwise instituted 
such a process, they must allow a claimant to request external review 
of an adverse benefit determination of claims covered by the 
protections under PHS Act sections 2799A-1 or 2799A-2 upon receipt of 
the adverse benefit determination.
---------------------------------------------------------------------------

    \58\ 26 CFR 54.9815-2719; 29 CFR 2590.715-2719(c)(2)(i); 45 CFR 
147.136.

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

[[Page 56013]]

V. Federal IDR Process for FEHB Carriers--Office of Personnel 
Management

    OPM amends existing 5 CFR 890.114(a) to include references to the 
Departments' regulations to clarify that FEHB carriers are also subject 
to the Federal IDR process set forth in those regulations with respect 
to a qualified IDR item or service furnished by an FEHB carrier 
offering a health benefits plan in the same manner as those provisions 
apply to a group health plan or health insurance issuer offering group 
or individual health insurance coverage, subject to 5 U.S.C. 8902(m)(1) 
and the provisions of the FEHB carrier's contract. Through new 
paragraph 5 CFR 890.114(d), OPM adopts the Departments' rules as 
necessary to properly integrate the new standards with existing FEHB 
Program structure and sets forth the circumstances in which OPM will 
enforce these rules as applied to FEHB carriers, including by requiring 
carrier notice to the Director, in addition to the Departments, of an 
FEHB carrier's notice of initiation, or receipt of a provider's notice 
of initiation, the Federal IDR process. OPM will coordinate with the 
Departments in matters regarding FEHB carriers requiring resolution 
under the Federal IDR process and with respect to oversight of 
certified IDR entities' reports regarding FEHB carriers.
    As discussed in the July 2021 interim final rules, all out-of-
network rate determinations regarding qualified IDR items or services 
with respect to FEHB plans or carriers that are not resolved by open 
negotiation are subject to the Federal IDR process unless OPM contracts 
with FEHB carriers include terms that adopt state law as governing for 
this purpose.

VI. Overview of the Interim Final Rules Regarding Protections for the 
Uninsured--The Department of Health and Human Services

A. Good Faith Estimates for Uninsured (or Self-Pay) Individuals

1. Scope
    The No Surprises Act adds PHS Act section 2799B-6(2), which 
requires health care providers and health care facilities, upon 
scheduling an item or service to be furnished to an individual or upon 
request of an individual, to inquire about such individual's health 
coverage status and to provide a notification (in clear and 
understandable language) of the good faith estimate of the expected 
charges for furnishing such item or service (including any item or 
service that is reasonably expected to be provided in conjunction with 
such scheduled or requested item or service and such item or service 
reasonably expected to be so provided by another provider or facility), 
with the expected billing and diagnostic codes for any such item or 
service.
    In the case that the individual requesting a good faith estimate 
for an item or service or seeking to schedule an item or service to be 
furnished, is not enrolled in a certain type of plan or coverage or is 
not seeking to file a claim with such type of plan or coverage, PHS Act 
section 2799B-6(2)(B), and these interim final rules at 45 CFR 149.610, 
require providers and facilities to furnish the good faith estimate to 
the individual. These requirements under 45 CFR 149.610 apply only to 
good faith estimate notifications for uninsured (or self-pay) 
individuals as described in 45 CFR 149.610(a)(2)(xii) of these interim 
final rules. As discussed in section I.C of this preamble, these 
interim final rules do not include requirements implementing PHS Act 
section 2799B-6(2)(A), which requires providers and facilities to 
furnish good faith estimates to individuals' plans or issuers.
2. Definitions
    For purposes of 45 CFR 149.610, HHS is defining certain terms at 45 
CFR 149.610(a). Specifically, ``authorized representative'' means an 
individual authorized under state law to provide consent on behalf of 
the uninsured (or self-pay) individual, provided that the individual is 
not a provider affiliated with the facility or an employee of the 
facility represented in the good faith estimate, unless such provider 
or employee is a family member of the uninsured (or self-pay) 
individual. HHS considered defining authorized representative using the 
same definition as in 45 CFR 149.410 and 149.420; however, the 
definition in these interim final rules contain amendments to account 
for concepts that are not relevant to uninsured (or self-pay) 
individuals such as removing references to nonparticipating providers, 
participants, beneficiaries, and enrollees.
    These interim final rules define, ``convening health care provider 
or convening health care facility (convening provider or convening 
facility)'' as the provider or facility who receives the initial 
request for a good faith estimate from an uninsured (or self-pay) 
individual and who is or, in the case of a request, would be 
responsible for scheduling the primary item or service as defined in 
these interim final rules. As discussed elsewhere in this preamble, the 
convening provider is responsible for providing the good faith estimate 
to an uninsured (or self-pay) individual.
    HHS considered putting the responsibility for providing the good 
faith estimate on the ``treating health care provider,'' as defined in 
45 CFR 149.30, but for many scheduled items or services, multiple 
providers and facilities could participate in delivering an 
individual's care, or be considered, a ``treating health care 
provider''. Because it is likely that an individual would only schedule 
an item or service or request a good faith estimate from one of the 
treating providers or facilities, the convening provider or facility 
would likely need to request additional scheduling from other providers 
or facilities to participate in delivering care. Therefore, such a 
provider or facility would need to alert the other providers or 
facilities who are providing items or services in conjunction with the 
scheduled item or service, when items or services are scheduled or a 
good faith estimate is requested. Furthermore, HHS understands that 
multiple providers and facilities may bill an individual for the 
respective items or services provided during a period of care. 
Therefore, it is important to define who is responsible for furnishing 
the good faith estimate to the individual that is inclusive of all the 
items or services to be provided by co-providers and co-facilities 
involved in the scheduled items or services or the items or services 
for which a good faith estimate is requested.
    In these interim final rules, ``co-health care provider or co-
health care facility (co-provider or co-facility)'' means a provider or 
facility other than a convening provider or a convening facility that 
furnishes items or services that are customarily provided in 
conjunction with a primary item or service (as defined for purposes of 
this section). Because PHS Act section 2799B-6(2) requires that the 
good faith estimate include any item or service that is reasonably 
expected to be provided in conjunction with such scheduled item or 
service (or such item or service for which a good faith estimate is 
requested) and such an item or service reasonably expected to be so 
provided by another health care provider or health care facility, HHS 
is distinguishing co-providers and co-facilities from the convening 
provider or convening facility who will furnish the good faith estimate 
inclusive of estimates from co-providers and co-facilities.
    ``Diagnosis code'' means the code that describes an individual's 
disease,

[[Page 56014]]

disorder, injury, or other related health conditions using the 
International Classification of Diseases (ICD) code set. In 
establishing requirements for implementation of HIPAA's Administrative 
Simplification provisions, HHS adopted specific code sets for diagnoses 
and procedures for use in standard health care transactions. The 
definition of diagnosis code used in this section aligns with the 
definition contained in the HIPAA Administrative Simplification 
standards at 45 CFR part 162.\59\
---------------------------------------------------------------------------

    \59\ https://www.cms.gov/regulations-and-guidance/administrative-simplification/code-sets.
---------------------------------------------------------------------------

    For purposes of 45 CFR 149.610, ``expected charge'' means, for an 
item or service, the cash pay rate or rate established by a provider or 
facility for an uninsured (or self-pay) individual, reflecting any 
discounts for such individuals, where the good faith estimate is being 
provided to an uninsured (or self-pay) individual; or the amount the 
provider or facility would expect to charge if the provider or facility 
intended to bill a plan or issuer directly for such item or service 
when the good faith estimate is being furnished to a plan or issuer.
    HHS understands that providers and facilities establish gross 
charges or chargemaster rates that are considered their standard charge 
for an item or services and then often discounts are applied depending 
on the payer (with the exception of state laws that specify payment 
rates). For instance, in providing a good faith estimate to a plan or 
issuer, the provider or facility may include as the expected charge the 
undiscounted gross charge or chargemaster rate, which would then be 
used by the plan or issuer to determine the out-of-pocket payment 
amount of an insured individual. HHS understands that providers and 
facilities often make adjustments to their gross charges or 
chargemaster rates to establish a self-pay rate for uninsured (or self-
pay) individuals. HHS is of the view that if an individual is not 
enrolled in a plan or coverage or is enrolled but is not seeking to 
have a claim for such item or service submitted to their plan or 
coverage, the expected charges included in the good faith estimate 
should reflect what the provider or facility expects to bill or charge 
the payer (in this case the uninsured or self-pay individual), and 
therefore for the purpose of these interim final rules, HHS has defined 
expected charges specific to what the uninsured (or self-pay) 
individual would be expected to pay.
    HHS is of the view that the estimate of expected charges must 
reflect the anticipated billed charges, including any expected 
discounts or other relevant adjustments that the provider or facility 
expects to apply to an uninsured (or self-pay) individual's billed 
charges because of the role of the good faith estimate in the patient-
provider dispute resolution process under PHS Act section 2799B-7 and 
as specified in 45 CFR 149.620. Under PHS Act section 2799B-7, an 
uninsured (or self-pay) individual can seek a determination from an SDR 
entity if the total billed charge from a provider or facility is 
substantially in excess of the expected charges listed in the good 
faith estimate for the provider or facility. Therefore, as discussed in 
detail below, these interim final rules require that for each item or 
service listed in the good faith estimate, a provider or facility must 
include the expected charge for each item or service, reflecting any 
available discounts or other relevant adjustments that the provider or 
facility expects to apply to an uninsured (or self-pay) individual's 
billed charges. For instance, certain hospital organizations that meet 
the general requirements for tax exemption under Code section 
501(c)(3), are also required to meet the Financial Assistance Policy 
(FAP) requirements under Code sections 501(r)(4) through (6).\60\ In 
this example, any adjustments expected to be applied under the FAP 
would be factored in and reflected in the amount reported in the good 
faith estimate for items or services. To promote more transparency, HHS 
considered requiring both undiscounted list prices and discounted 
prices to be included when discounted prices apply. HHS seeks comment 
on whether providers and facilities should be required to include both 
the list price and discounted price for an item or service when 
discounts apply.
---------------------------------------------------------------------------

    \60\ Financial Assistance Policy and Emergency Medical Care 
Policy. https://www.irs.gov/charities-non-profits/financial-assistance-policy-and-emergency-medical-care-policy-section-501r4.
---------------------------------------------------------------------------

    Consistent with PHS Act section 2799B-6(2), these interim final 
rules define the term ``good faith estimate'' to mean a notification of 
expected charges for a scheduled or requested item or service,\61\ 
including items or services that are reasonably expected to be provided 
in conjunction with such scheduled or requested item or service, 
provided by a convening provider, convening facility, co-provider, or 
co-facility.
---------------------------------------------------------------------------

    \61\ For purposes of simplicity of language, these interim final 
rules in some instances refer to a requested good faith estimate for 
an item or service, as a requested item or service.
---------------------------------------------------------------------------

    ``Health care facility (facility)'' is defined more broadly than 
the definition in 45 CFR 149.30, which applies in the context of 
balance billing protections for non-emergency services. For purposes of 
45 CFR 149.610, ``health care facility (facility)'' means an 
institution (such as a hospital or hospital outpatient department, 
critical access hospital, ambulatory surgical center, rural health 
center, federally qualified health center, laboratory, or imaging 
center) in any state in which state or applicable local law provides 
for the licensing of such an institution, that is licensed as such an 
institution pursuant to such law or is approved by the agency of such 
state or locality responsible for licensing such institution as meeting 
the standards established for such licensing. While HHS considered 
applying the definition of health care facility from 45 CFR 149.30, 
doing so would limit the scope of providers and facilities for which 45 
CFR 149.610 applies to only those providers relevant to the balance 
billing protections related to nonemergency items or services furnished 
by participating providers in nonparticipating facilities. The 
provisions in PHS Act section 2799B-6 do not specify such limitations.
    For purposes of 45 CFR 149.610, ``health care provider (provider)'' 
means a physician or other health care provider who is acting within 
the scope of practice of that provider's license or certification under 
applicable State law, including a provider of air ambulance services. 
As the Departments noted in the July 2021 interim final rules, the No 
Surprises Act does not define ``provider.'' Some provisions use the 
word in a manner that includes providers of air ambulance services, 
while other provisions that use the word are inapplicable to providers 
of air ambulance services by the terms of the provisions. In this case, 
HHS is of the view that interpreting the term to include providers of 
air ambulance services in this context is critical to ensuring 
individuals obtain the benefits of a good faith estimate for a service 
that can be extremely costly. HHS recognizes that individuals will 
likely not be able to obtain a good faith estimate for emergency air 
ambulance services, as these are not generally scheduled in advance. 
However, making these requirements applicable to providers of air 
ambulance services helps to ensure that individuals can obtain a good 
faith estimate upon request or at the time of scheduling non-emergency 
air ambulance services, for which coverage often is not provided by a 
plan or issuer and thus even individuals with coverage often must self-
pay.

[[Page 56015]]

    ``Items or services'' has the same meaning given the term in 45 CFR 
147.210(a)(2), which includes all encounters, procedures, medical 
tests, supplies, prescription drugs, durable medical equipment, and 
fees (including facility fees), provided or assessed in connection with 
the provision of health care. The definition of items or services in 45 
CFR 147.210(a)(2) encompasses and accurately defines the types of items 
or services that are expected to be reported in the good faith estimate 
including items or services such as those related to dental health, 
vision, substance use disorders and mental health. HHS also clarifies 
that some items or services may not be included in a good faith 
estimate because they are not typically scheduled in advance and are 
not typically the subject of a requested good faith estimate, such as 
urgent, emergent trauma, or emergency items or services; however, HHS 
clarifies that to the extent an urgent care appointment is scheduled at 
least 3 days in advance, these interim final rules require a provider 
or facility to provide a good faith estimate.\62\
---------------------------------------------------------------------------

    \62\ Certain urgent, emergent trauma, or emergency care services 
may be subject to other protections discussed in the July 2021 
interim final rules (86 FR 36872).
---------------------------------------------------------------------------

    These interim final rules also define the term ``period of care'' 
to mean the day or multiple days during which the good faith estimate 
for scheduled or requested item or service (or set of scheduled or 
requested items or services) are furnished or are anticipated to be 
furnished, regardless of whether the convening provider, convening 
facility, co-providers, or co-facilities are furnishing such items or 
services, and also includes the period of time during which any 
facility equipment and devices, telemedicine services, imaging 
services, laboratory services, and preoperative and postoperative 
services that would not be scheduled separately by the individual, are 
furnished. HHS considered using the term episode of care but 
understands that the term episode of care is used within many different 
contexts regarding the provision of health care items or services.\63\ 
In the context of this section, HHS is of the view that it is important 
to use the term period of care in order to clarify which items or 
services are expected to be provided in a good faith estimate.
---------------------------------------------------------------------------

    \63\ https://www.healthaffairs.org/do/10.1377/hblog20190326.202031/full/.
---------------------------------------------------------------------------

    ``Primary item or service'' means the item or service to be 
furnished by the convening provider or convening facility that is the 
initial reason for the visit. HHS is of the view that additional 
distinctions beyond the definition of ``items or services'' must be 
made in order for providers and facilities to furnish clear and 
understandable good faith estimates. HHS considered using the term 
``scheduled item or service'' which would more directly align with the 
statutory language. However, such distinction would have excluded the 
statutory provision whereby a good faith estimate must be issued upon 
the request of an uninsured (or self-pay) individual when items or 
services have not been scheduled. HHS is of the view that using the 
term ``primary item or service'' provides clarity for providers and 
facilities to establish and identify a main item or service for which a 
good faith estimate is being issued. Based on the primary item or 
service, the provider or facility could subsequently identify and 
include all items or services that would be furnished in conjunction 
with the primary item or service, and such items or services reasonably 
expected to be provided by a co-provider or co-facility.
    ``Service code'' means the code that identifies and describes an 
item or service using the CPT, HCPCS, DRG or National Drug Code (NDC) 
code sets. As noted earlier, in establishing requirements for 
implementation of HIPAA's Administrative Simplification provisions, HHS 
adopted specific code sets for diagnoses and procedures for use in 
standard health care transactions. The definition of service code used 
in this section aligns with the definition contained in the HIPAA 
Administrative Simplification standards at 45 CFR part 162.\64\
---------------------------------------------------------------------------

    \64\ https://www.cms.gov/regulations-and-guidance/administrative-simplification/code-sets.
---------------------------------------------------------------------------

    These interim final rules define the term ``uninsured (or self-pay) 
individual'' to mean an individual who does not have benefits for an 
item or service under a group health plan, group or individual health 
insurance coverage offered by a health insurance issuer, Federal health 
care program (as defined in section 1128B(f) of the Social Security 
Act), or a health benefits plan under chapter 89 of title 5, United 
States Code; or an individual who has benefits for such item or service 
under a group health plan or individual or group health insurance 
coverage offered by a health insurance issuer, or a health benefits 
plan under chapter 89 of title 5, United States Code but who does not 
seek to have a claim for such item or service submitted to such plan or 
coverage. These individuals are often referred to as self-pay 
individuals, therefore these interim final rules include the term self-
pay when discussing uninsured individuals. As discussed elsewhere in 
this preamble, for the purposes of the interim final rules at 45 CFR 
149.610 that implement PHS Act sections 2799B-6(1) and 2799B-6(2)(B), 
HHS is adopting the definition of uninsured (or self-pay) individuals 
from PHS Act sections 2799B-7 in order to align these two related 
sections.
    HHS understands, and is of the view that it is appropriate, that 
consumers may request a good faith estimate without actually scheduling 
items or services to compare costs and make a decision about from which 
provider or facility they will seek care, or whether they will submit a 
claim to insurance or self-pay. These individuals would be considered 
self-pay for purposes of the requirement on the provider or facility to 
provide a good faith estimate. HHS clarifies that if an individual 
requests a good faith estimate as a self-pay individual and then 
ultimately decides to submit a claim to the individual's plan or issuer 
for the billed charges, the individual is no longer considered a self-
pay individual as defined in these interim final rules and would not be 
eligible to use the patient-provider dispute resolution process as 
defined in 45 CFR 149.620. HHS also clarifies that for purposes of 45 
CFR 149.610 and 149.620, the definition of uninsured (or self-pay) 
individuals includes individuals enrolled in short-term, limited-
duration insurance, as defined in regulations at 26 CFR 54.9801-2, 29 
CFR 2590.701-2, and 45 CFR 144.103, and not also enrolled in a group 
health plan, group or individual health insurance coverage offered by a 
health insurance issuer, Federal health care program (as defined in 
section 1128B(f) of the Social Security Act), or a health benefits plan 
under chapter 89 of title 5, United States Code.
    HHS seeks comment on the terms defined in these interim final rules 
for purposes of this section. HHS is particularly interested in 
receiving information related to the appropriateness and usability of 
these definitions and whether additional terms should be included or 
defined.
3. Requirements for Providers and Facilities
    For purposes of PHS Act sections 2799B-6, 2799B-6(1), and 2799B-
6(2)(B) that are being implemented in these interim final rules, 
providers and facilities must meet certain requirements related to 
uninsured (or self-pay) individuals. Section 2799B-6 places the 
requirement to provide a good faith estimate, within the statutorily 
defined timeframes, upon

[[Page 56016]]

providers and facilities with whom an individual schedules an item or 
service, or from whom an individual requests a good faith estimate for 
an item or service, defined in these interim final rules as the 
convening provider or facility. However, HHS notes that section 2799B-
6(2) requires that a good faith estimate of expected charges include 
any item or service that is reasonably expected to be provided in 
conjunction with such scheduled item or service and such items or 
services reasonably expected to be so provided by another provider or 
facility, defined in these interim final rules as a co-provider or co-
facility.
    In order for good faith estimates to provide individuals with the 
most accurate information available, HHS is of the view that it is not 
feasible to fully implement the statutory provisions under PHS Act 
section 2799B-6(2) without establishing certain requirements for 
convening providers and facilities and co-providers and co-facilities. 
In implementing these provisions, HHS is of the view that to the extent 
possible, an uninsured (or self-pay) individual is entitled to receive 
a clear and understandable document that informs the uninsured (or 
self-pay) individual of the expected costs associated with the care 
that they are considering or are scheduled to receive, and in order to 
do so, the expected charges that inform the good faith estimate should 
be provided by all providers and facilities who are reasonably expected 
to furnish the items or services that would be billed to the uninsured 
(or self-pay) individual. HHS seeks comment on publicly available 
resources, methods, and potential standardized formatting or design 
that could facilitate communication of good faith estimate information 
in a clear and understandable manner.
    To this end, HHS is of the view that issuance of separate good 
faith estimate documents from each provider and facility involved in 
furnishing care for a primary item or service would place undue 
administrative burden upon uninsured (or self-pay) individuals to then 
aggregate various good faith estimates received in order to obtain a 
clear and understandable representation of all expected charges for an 
item or service. However, HHS also acknowledges that in some instances, 
it would not be practical nor feasible to expect a convening provider 
or facility to have sufficient knowledge of the expected charges for 
each item or service provided by a co-provider or co-facility. HHS is 
also of the view that convening providers and facilities should not be 
held responsible for the accuracy of expected charges for items or 
services for which the convening provider or facility does not bill the 
uninsured (or self-pay) individual (for instance, under the patient-
provider dispute resolution process as described in 45 CFR 149.620).
    HHS notes that the accuracy of the good faith estimate is relevant 
because if the actual billed charges substantially exceed the amounts 
reported in the good faith estimate, an uninsured (or self-pay) 
individual could seek a determination under the patient-provider 
dispute resolution process under 45 CFR 149.620. HHS is also of the 
view that it would not be appropriate to solely require that a 
convening provider or facility be accountable through the patient-
provider dispute resolution process for items or services for which the 
convening provider or facility did not bill the uninsured (or self-pay) 
individual.
    Therefore, HHS is using its general rulemaking authority to 
establish requirements under 45 CFR 149.610, discussed in detail below, 
for convening providers and facilities as well as co-providers and co-
facilities for issuance of good faith estimates for uninsured (or self-
pay) individuals. HHS is of the view that use of its general rulemaking 
authority to establish such requirements is necessary in order to 
implement the provisions of PHS Act section 2799B-6 in a manner that 
balances the statutory intent of providing uninsured (or self-pay) 
individuals with clear and understandable information regarding the 
expected costs of items or services, the responsibilities of various 
providers and facilities, and the inherent accountability established 
in the statute through the interaction between the issuance of good 
faith estimates under PHS Act section 2799B-6 and the patient-provider 
dispute resolution process under PHS Act section 2799B-7.
i. Requirements for Convening Providers and Facilities
    These interim final rules establish in 45 CFR 149.610(b)(1) certain 
requirements for the convening provider or facility to verify whether 
an individual meets the definition of an uninsured (or self-pay) 
individual, to provide oral and written communication regarding the 
requirement to provide good faith estimates to uninsured (or self-pay) 
individuals upon scheduling an item or service or upon request, and to 
provide timely good faith estimates to uninsured (or self-pay) 
individuals. To determine whether a good faith estimate must be 
provided to an individual under 45 CFR 149.610(b)(1), the convening 
provider or facility must inquire and determine if the individual meets 
the definition of an uninsured (or self-pay) individual as established 
in 45 CFR 149.610(a)(2).
    HHS is of the view that conveying information about the 
availability of good faith estimates prior to or upon scheduling an 
item or service aligns with and is most relevant when uninsured (or 
self-pay) individuals are considering whether to proceed with medical 
care while interacting with their providers or facilities. Requiring 
that providers and facilities notify uninsured (or self-pay) 
individuals of the availability of good faith estimates will help 
ensure that all uninsured (or self-pay) individuals understand that 
they can request a good faith estimate and will also receive a good 
faith estimate upon scheduling an item or service and upon request.
    Therefore, HHS is using its general rulemaking authority to 
establish in 45 CFR 149.610(b)(1)(iii) that the convening provider or 
facility must inform uninsured (or self-pay) individuals that good 
faith estimates of expected charges are available to uninsured (or 
self-pay) individuals upon scheduling an item or service or upon 
request. Information regarding the availability of good faith estimates 
for uninsured (or self-pay) individuals must be provided in writing and 
orally. The convening provider or facility must provide written notice 
in a clear and understandable manner prominently displayed (and easily 
searchable from a public search engine) on the convening provider's or 
convening facility's website, in the office, and on-site where 
scheduling or questions about the cost of items or services occur. In 
addition, the convening provider or facility must orally inform 
uninsured (or self-pay) individuals of the availability of a good faith 
estimate when questions about the cost of items or services occur. 
Information regarding the availability of a good faith estimate must be 
made available in accessible formats and languages spoken by 
individuals considering or scheduling items or services with such 
convening provider or convening facility.
    HHS anticipates providing a model notice for notifying uninsured 
(or self-pay) individuals of the availability of good faith estimates. 
However, HHS is not requiring the use of such model notice in order to 
allow providers or facilities flexibility to develop notices that would 
be most effective for their patient populations. HHS also recognizes 
the potential value in having a standardized notice that uninsured (or

[[Page 56017]]

self-pay) individuals can anticipate across providers and facilities. 
Therefore, HHS seeks comment on the potential for standardizing notices 
for use by all convening providers and convening facilities and other 
alternative or concurrent options for informing uninsured (or self-pay) 
individuals of the availability of good faith estimates that would meet 
the requirements under this section.
    HHS notes that uninsured (or self-pay) individuals may use 
different terminology other than ``good faith estimate'' when 
requesting a good faith estimate. Therefore, these interim final rules 
at 45 CFR 149.610(b)(1)(iv) specify that convening providers and 
convening facilities shall consider any discussion or inquiry regarding 
the potential cost of items or services under consideration as a 
request for a good faith estimate.
    PHS Act section 2799B-6(2) requires that the good faith estimate 
include any item or service that is reasonably expected to be provided 
in conjunction with a scheduled or requested item or service by another 
provider or facility. Therefore, these interim final rules at 45 CFR 
149.610(b)(1)(v) require that the convening provider or facility 
contact all applicable co-providers and co-facilities no later than 1 
business day after the request for the good faith estimate is received 
or after the primary item or service is scheduled, and request 
submission of expected charges for items or services that meet the 
requirements for co-providers and co-facilities under 45 CFR 
149.610(b)(2) and (c)(2). The convening provider or convening facility 
must indicate in their request the date that the good faith estimate 
information must be received from the co-provider or co-facility. The 
co-provider or co-facility is responsible for providing timely 
information to the convening provider or convening facility as 
discussed later in this preamble. HHS is of the view that the convening 
provider or convening facility would not have accurate estimates to 
include in the good faith estimate without information being provided 
in a timely manner by the co-provider or co-facility. HHS seeks 
comments on methods and standardized processes, including use of HIPAA 
standard transactions, that could facilitate accurate and efficient 
transmission of good faith estimate information from co-providers or 
co-facilities to convening providers or convening facilities.
    PHS Act section 2799B-6 requires that providers and facilities 
furnish the good faith estimate of the expected charges within certain 
defined timeframes. Specifically, PHS Act section 2799B-6 states that 
in the case of an individual who schedules an item or service to be 
furnished to such individual by such provider or facility at least 3 
business days before the date such item or service is to be so 
furnished, that the notification of the good faith estimate of expected 
charges shall be provided no later than 1 business day after the date 
of such scheduling; in the case of such an item or service scheduled at 
least 10 business days before the date such item or service is to be so 
furnished (or if requested by the individual), that the notification of 
the good faith estimate of expected charges shall be provided no later 
than 3 business days after the date of such scheduling or such request. 
These interim final rules at 45 CFR 149.610(b)(1)(vi) codify these 
timeframes for good faith estimates.
    HHS recognizes that circumstances may arise where the scope of 
information included in a good faith estimate changes (such as, a 
provider or facility represented in the good faith estimate is no 
longer able to furnish the items or services reported in the good faith 
estimate). In such circumstances, these interim final rules establish 
at 45 CFR 149.610(b)(1)(vii) and (viii) that the convening provider or 
convening facility must issue an uninsured (or self-pay) individual 
with a new good faith estimate no later than 1 business day before the 
item or service is scheduled to be furnished. If any changes in 
expected providers or facilities represented in a good faith estimate 
occur less than 1 business day before that the item or service is 
scheduled to be furnished, the replacement provider or replacement 
facility must accept the good faith estimate as their expected charges 
for the items or services being furnished that were provided by the 
original provider or facility and represented in the good faith 
estimate. These interim final rules also establish at 45 CFR 
149.610(b)(2)(ii) and (iii) similar requirements for co-providers and 
co-facilities. HHS acknowledges the challenges these requirements 
impose on providers and facilities, and the potential disincentive that 
such a requirement could have on a provider's or facility's willingness 
to provide an item or service under such circumstances due to the fact 
that the patient-provider dispute resolution process, at 45 CFR 
149.620, uses the good faith estimate to determine the eligibility of 
an item or service for dispute resolution. However, HHS is of the view 
that such requirements are necessary for consumer protections against 
facing surprise medical bills and without such a requirement an 
uninsured (or self-pay) individual would be unable to avail themselves 
of the patient-provider dispute resolution process in these 
circumstances.
    HHS expects that any replacement provider or facility considering 
whether to furnish items or services will review the applicable good 
faith estimate and use that information to determine whether to furnish 
the applicable items or services. HHS is of the view that requiring the 
replacement providers or facilities to accept as their good faith 
estimate the expected charges reported in the existing good faith 
estimate mitigates the risk of providers or facilities circumventing 
the requirements of PHS Act 2799B-6 through the substitution of 
providers or facilities. Such requirements also provide important 
consumer protections intended by PHS Act 2799B-6 that are aimed to 
protect uninsured (or self-pay) individuals from unexpected medical 
bills. However, HHS seeks comment on whether this approach could have 
unintended consequences, such as delays in care if providers were to 
refuse to serve as replacements, and ways in which to alleviate any 
such effects.
    In instances where a good faith estimate is provided upon the 
request of an uninsured (or self-pay) individual, upon the subsequent 
scheduling of the item or service to be furnished, these interim final 
rules at 45 CFR 149.610(b)(1)(ix) establish that a new good faith 
estimate must be provided to the uninsured (or self-pay) individual for 
the now scheduled item or service, and within the timeframes specified 
for good faith estimates for scheduled items or services under 45 CFR 
149(b)(1)(vi)(A) and (B). HHS recognizes that uninsured (or self-pay) 
individuals might choose to request a good faith estimate in order to 
better understand anticipated costs, for instance in situations where 
an individual may wish to compare costs across providers or facilities. 
If an uninsured (or self-pay) individual had not previously scheduled 
the primary item or service, the individual may not have been evaluated 
for underlying conditions that could impact the accuracy of the good 
faith estimate. HHS encourages convening providers or facilities to 
review any previously issued good faith estimate related to the primary 
item or service and make all applicable changes when providing the new 
good faith estimate. HHS also encourages convening providers or 
convening facilities to communicate these changes upon delivery of the 
new good faith estimate to help patients understand what has changed 
between the initial

[[Page 56018]]

good faith estimate and the new good faith estimate.
    HHS acknowledges that there are circumstances where recurring items 
or services are expected to be furnished to an uninsured (or self-pay) 
individual (for example, an uninsured (or self-pay) individual may need 
multiple physical therapy visits that would occur outside of the period 
of care for a surgical procedure). These interim final rules establish 
at 45 CFR 149.610(b)(1)(x) that the convening provider or facility may 
issue a single good faith estimate for recurring primary items or 
services if certain requirements are met. The good faith estimate for 
recurring items or services must include in a clear and understandable 
manner the expected scope of the recurring items or services (such as: 
timeframes, frequency, and total number of recurring items or services) 
in the good faith estimate. The scope of such a good faith estimate 
must not exceed 12 months. If additional recurrences of furnishing such 
items or services are expected beyond 12 months, a convening provider 
or convening facility must provide an uninsured (or self-pay) 
individual a new good faith estimate. Providers must also communicate 
such changes (such as timeframes, frequency, and total number of 
recurring items or services) upon delivery of the new good faith 
estimate to help patients understand what has changed between the 
initial good faith estimate and the new good faith estimate.
ii. Requirements for Co-Providers and Co-Facilities
    Under these interim final rules at 45 CFR 149.610(b)(2)(i), a co-
provider or co-facility must submit, upon the request of the convening 
provider or convening facility, good faith estimate information for 
items or services that are reasonably expected to be furnished by the 
co-provider or co-facility in conjunction with the primary item or 
service (as specified under the content requirements discussed later in 
this section of the preamble). Good faith estimate information 
submitted by co-providers or co-facilities must be received by the 
convening provider or facility no later than 1 business day after the 
co-provider or co-facility receives the request. In addition, co-
providers and co-facilities must notify and provide new good faith 
estimate information to a convening provider or convening facility if 
the co-provider or co-facility anticipates any changes to the scope of 
good faith estimate information previously submitted to a convening 
provider or convening facility (such as anticipated changes to the 
expected charges, items, services, frequency, recurrences, duration, 
providers, or facilities). If any changes in the expected co-providers 
or co-facilities represented in a good faith estimate occur less than 1 
business day before that the item or service is scheduled to be 
furnished, the replacement co-provider or co-facility must accept as 
its good faith estimate of expected charges the good faith estimate for 
the relevant items or services included in the good faith estimate for 
the item or service being furnished that was provided by the replaced 
provider or facility.
    These interim final rules at 45 CFR 149.610(b)(2)(iv) also 
establish that in the event that an uninsured (or self-pay) individual 
separately schedules or requests a good faith estimate from a provider 
or facility that would otherwise be a co-provider or co-facility, that 
provider or facility is considered a convening provider or convening 
facility for such item or service and must meet all requirements in 
paragraphs (b)(1) and (c)(1) for issuing a good faith estimate to an 
uninsured (or self-pay) individual.
4. Content of a Good Faith Estimate for an Uninsured (or Self-Pay) 
Individual
    In 45 CFR 149.610(c), these interim final rules establish 
requirements for the content that must be included in a good faith 
estimate that is issued to an uninsured (or self-pay) individual. As 
discussed later in this section of the preamble, these interim final 
rules at 45 CFR 149.610(c)(1) establish the elements that must be 
included in the good faith estimate issued by the convening provider or 
convening facility and 45 CFR 149.610(c)(2) establishes the content 
requirements for good faith estimate information that must be submitted 
by co-providers or co-facilities to the requesting convening provider 
or convening facility.
    Specifically, the good faith estimate issued by the convening 
provider or convening facility to the uninsured (or self-pay) 
individual must include:
     Patient name and date of birth;
     Description of the primary item or service in clear and 
understandable language (and if applicable, the date the primary item 
or service is scheduled);
     Itemized list of items or services, grouped by each 
provider or facility, reasonably expected to be provided for the 
primary item or service, and items or services reasonably expected to 
be furnished in conjunction with the primary item or service, for that 
period of care including: (1) Those items or services reasonably 
expected to be furnished by the convening provider or convening 
facility, and (2) those items or services expected to be furnished by 
co-providers or co-facilities;
     Applicable diagnosis codes, expected service codes, and 
expected charges associated with each listed item or service;
     Name, NPI, and TIN of each provider or facility 
represented in the good faith estimate, and the state(s) and office or 
facility location(s) where the items or services are expected to be 
furnished by such provider or facility;
     List of items or services that the convening provider or 
convening facility anticipates will require separate scheduling and 
that are expected to occur before or following the expected period of 
care for the primary item or service. The good faith estimate must 
include a disclaimer directly above this list that states that separate 
good faith estimates will be issued to an uninsured (or self-pay) 
individual upon scheduling or upon request of the listed items or 
services and that for items or services included in this list, 
information such as diagnosis codes, service codes, expected charges 
and provider or facility identifiers do not need to be included as that 
information will be provided in separate good faith estimates upon 
scheduling or upon request of such items or services; and include 
instructions for how an uninsured (or self-pay) individual can obtain 
good faith estimates for such items or services;
     A disclaimer that informs the uninsured (or self-pay) 
individual that there may be additional items or services the convening 
provider or convening facility recommends as part of the course of care 
that must be scheduled or requested separately and are not reflected in 
the good faith estimate;
     A disclaimer that informs the uninsured (or self-pay) 
individual that the information provided in the good faith estimate is 
only an estimate of items or services reasonably expected to be 
furnished at the time the good faith estimate is issued to the 
uninsured (or self-pay) individual and that actual items, services, or 
charges may differ from the good faith estimate;
     A disclaimer that informs the uninsured (or self-pay) 
individual of their right to initiate the patient-provider dispute 
resolution process if the actual billed charges are substantially in 
excess of the expected charges included in the good faith estimate, as 
specified in 45 CFR 149.620; this disclaimer must include instructions 
for where an uninsured (or self-pay) individual can find information 
about how to initiate the patient-provider dispute resolution

[[Page 56019]]

process and state that the initiation of the patient-provider dispute 
resolution process will not adversely affect the quality of health care 
services furnished to an uninsured (or self-pay) individual by a 
provider or facility; and
     A disclaimer that the good faith estimate is not a 
contract and does not require the uninsured (or self-pay) individual to 
obtain the items or services from any of the providers or facilities 
identified in the good faith estimate.
    Given that good faith estimate information submitted by co-
providers or co-facilities must be included as part of the good faith 
estimate issued to the uninsured (or self-pay) individual, these 
interim final rules establish under 45 CFR 149.610(d)(2) that good 
faith estimate information submitted by co-providers or co-facilities 
to convening providers or convening facilities must include:
     Patient name and date of birth;
     An itemized list of items or services expected to be 
provided by the co-provider or co-facility that are reasonably expected 
to be furnished in conjunction with the primary item or service as part 
of the period of care;
     Applicable diagnosis codes, expected service codes, and 
expected charges associated with each listed item or service;
     Name, NPI, and TIN of the co-provider or co-facility, and 
the state(s) and office or facility location(s) where the items or 
services are expected to be furnished by the co-provider or co-
facility; and
     A disclaimer that the good faith estimate is not a 
contract and does not require the uninsured (or self-pay) individual to 
obtain the items or services from any of the providers or facilities 
identified in the good faith estimate.
    HHS expects that these requirements, along with the required 
methods and format for providing good faith estimates (see 45 CFR 
149.610(e)) will result in good faith estimates that inform uninsured 
(or self-pay) individuals about the expected charges for the primary 
item or service, including the items or services reasonably expected to 
be furnished in conjunction with the primary item or service during a 
period of care.
    The itemized list of items or services contained in a good faith 
estimate to an uninsured (or self-pay) individual must reflect the 
expected charges from the convening provider or facility and co-
providers or co-facilities during a period of care. As discussed 
earlier, these interim final rules define a ``period of care'' as the 
day or multiple days during which the good faith estimate for scheduled 
or requested items or services (or a set of items or services) are 
furnished or are anticipated to be furnished, regardless of whether the 
convening provider or convening facility or co-providers or co-
facilities are furnishing such items or services, and also includes the 
period of time during which any facility equipment and devices, 
telemedicine services, imaging services, laboratory services, and 
preoperative and postoperative services that would not be scheduled 
separately by the individual, are furnished. It is the intent of this 
definition of ``period of care'' to clarify that the good faith 
estimate should include all of the items or services that are typically 
scheduled as part of a primary item or service for which an individual 
does not need to engage in additional scheduling.
    These interim final rules also establish at 45 CFR 
149.610(c)(1)(vi) that in instances where a convening provider or 
convening facility anticipates that certain items or services will need 
to be separately scheduled (such as those items or services typical of 
the standard of care), the convening provider or facility must include 
a separate list of items or services that the convening provider or 
facility anticipates will require separate scheduling and that are 
expected to occur either prior to or following the expected period of 
care for the primary item or service. Additionally, the good faith 
estimate must include a disclaimer directly above this list that 
notifies the uninsured (or self-pay) individual that: (1) Separate good 
faith estimates will be issued to an uninsured (or self-pay) individual 
upon scheduling of the listed items or services or upon request; and 
(2) for items or services included in this list, information such as 
diagnosis codes, service codes, expected charges, and provider or 
facility identifiers may not be included as that information will be 
provided in separate good faith estimates upon scheduling of such items 
or services or upon request; and (3) include instructions for how an 
uninsured (or self-pay) individual can obtain good faith estimates for 
such items or services.
    HHS also considered requiring that the good faith estimate include 
contact information for a provider's or facility's financial assistance 
office. HHS seeks comment on whether or not such information should be 
required on the good faith estimate.
    HHS understands the value in having one good faith estimate that 
includes all items or services furnished prior to, as part of, and 
following the primary item or service, regardless of whether the items 
or services must be separately scheduled. HHS also understands that 
including all this information in one good faith estimate could 
potentially be helpful in allowing an uninsured (or self-pay) 
individual to fully understand their anticipated costs. However, HHS 
also appreciates the complexity in obtaining such information by a 
convening provider or convening facility, as the convening provider or 
convening facility may not be privy to or be able to reasonably predict 
which additional providers or facilities an uninsured (or self-pay) 
individual may choose to engage with outside of the period of care for 
the primary item or service. HHS seeks comment on whether the good 
faith estimate content should be expanded to include additional 
information and expected charges for items or services that are 
anticipated to be furnished prior to or following the period of care 
for the primary item or service but require separate scheduling by the 
uninsured (or self-pay) individual. HHS is particularly interested in 
the benefits, challenges, and resources that could facilitate provision 
of good faith estimates that include items or services beyond the 
period of care for the scheduled or requested primary items or 
services.
    HHS provides the following example for illustrative purposes only 
and notes that this example should not be considered or construed to be 
comprehensive or applicable to any specific individual or set of 
circumstances. In the instance of a knee surgery, a good faith estimate 
could include an itemized list of items or services in conjunction with 
and including the actual knee surgery (such as physician professional 
fees, assistant surgeon professional fees, anesthesiologist 
professional fees, facility fees, prescription drugs, and durable 
medical equipment fees) that occur during the period of care. An 
individual would not typically schedule days in the hospital post-
procedure separately from scheduling the primary service of a knee 
surgery. HHS would therefore expect that all the items or services that 
are reasonably expected to be provided from admission through discharge 
as part of that scheduled knee surgery, from all physicians, 
facilities, or providers be included in the good faith estimate.
    Additionally, in this illustrative example, a provider or facility 
would furnish separate good faith estimates upon scheduling or upon 
request for any items or services that are necessary prior to or 
following provision of the

[[Page 56020]]

primary item or service beyond the period of care. Examples could 
include certain pre-operative or post-operative items or services that 
are not typically scheduled during the period of care for the knee 
surgery, such as certain laboratory tests or post-discharge physical 
therapy as discussed earlier.
    HHS acknowledges that unforeseen factors could occur during the 
course of treatment, which could involve additional services, resulting 
in higher actual billed charges after receipt of care than was 
anticipated at the time the good faith estimate was provided to the 
uninsured (or self-pay) individual. These interim final rules do not 
require the good faith estimate to include charges for unanticipated 
items or services that are not reasonably expected and that could occur 
due to unforeseen events.
    HHS expects that providers and facilities will use the coding that 
best describes the item or service for each item or service listed in 
the good faith estimate. When a single service code is available that 
captures reporting and billing for the component parts of an item or 
service, the single service code and expected charge for that single 
service code would be reported in the good faith estimate to capture 
the most comprehensive coding level; the component parts would not be 
included in the good faith estimate as they would not be separately 
reported or billed. For example, CPT code 85027 (complete (CBC), 
automated (Hgb, Hct, RBC, WBC and platelet count)) represents a 
laboratory test that measures a patient's hematocrit, hemoglobin, red 
blood cell count, leukocyte (white blood cell) counts, and platelet 
count. There are also individual CPT codes for each of the component 
parts of the service represented by CPT code 85027 (CPT codes: 85014 
(hematocrit (Hct)), 85018 (hemoglobin (Hgb)), 85041 (red blood cell 
(RBC), automated), 85048 (leukocyte (WBC), automated), and 85049 
(platelet, automated)). However, HHS expects that the good faith 
estimate would include expected charges for CPT code 85027, not 
expected charges for each component part since there is a single CPT 
code available that better captures reporting for all of the component 
parts of the laboratory service.\65\
---------------------------------------------------------------------------

    \65\ CPT codes and descriptions are copyright 2020 American 
Medical Association. All Rights Reserved. CPT is a registered 
trademark of the American Medical Association (AMA).
---------------------------------------------------------------------------

    Items or services included in the good faith estimate must be 
itemized (by each applicable service code), and clearly grouped and 
displayed as corresponding to the respective provider or facility that 
is expected to furnish those items or services. For each provider or 
facility represented in the good faith estimate, the total amount of 
expected charges must be included and displayed. HHS is of the view 
that certain identifying information (such as the provider's or 
facility's NPI and TIN) must be included in the good faith estimate to 
ensure that each provider or facility is accurately identified, 
particularly in instances where more than one provider or facility have 
the same name, but are separate and distinct entities for purposes of 
billing for items or services.
    Chart 1 provides a visual example of how itemized lists of expected 
items or services could be displayed in the good faith estimate as 
suggested in the HHS model notice. HHS notes that this example is 
included for demonstration purposes only, is not required, and is not a 
mandatory or standardized format. HHS seeks comment on options for 
displaying and methods for standardizing the formatting for the 
itemized lists of items or services, and the required disclaimers. HHS 
also seeks comment regarding the potential benefits and challenges of 
using a standardized form that could serve as a base for good faith 
estimates issued to uninsured (or self-pay) individuals. As uninsured 
(or self-pay) individuals may be unfamiliar with reading and 
understanding itemized lists of items or services typically charged for 
by providers or facilities, HHS seeks comment regarding whether the 
notice should be required to include additional information to explain 
concepts such as itemized lists of items or services, content within 
the required disclaimers, or other information included within the good 
faith estimate. HHS is also interested in information regarding 
publicly available methods for displaying required information in good 
faith estimates in a clear and understandable manner.

Chart 1--Example of How Itemized Lists of Expected Items or Services Could Be Displayed in a Good Faith Estimate for Uninsured (or Self-Pay) Individuals
                                                 Details of Services and Items for [Provider/Facility 1]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                        Address where service/
             Service/item                item will be provided        Diagnosis code             Service code            Quantity        Expected cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                       [Street, City, State,     [ICD code]..............  [Service Code Type:      .................  .................
                                        ZIP].                                               Service Code Number].
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                 Total Expected Charges from [Provider/Facility 1]                                  .................                  $
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Additional Health Care Provider/Facility Notes
 
 
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                                 Details of Services and Items for [Provider/Facility 2]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                        Address where service/
             Service/item                item will be provided        Diagnosis code             Service code            Quantity        Expected cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                       [Street, City, State,     [ICD code]..............  [Service Code Type:      .................  .................
                                        ZIP].                                               Service Code Number].
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 56021]]

 
                                 Total Expected Charges from [Provider/Facility 1]                                  .................                  $
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Additional Health Care Provider/Facility Notes
 
 
--------------------------------------------------------------------------------------------------------------------------------------------------------

5. Required Methods for Providing Good Faith Estimates for Uninsured 
(or Self-Pay) Individuals
    In 45 CFR 149.610(e), these interim final rules establish required 
methods for providing good faith estimates to uninsured (or self-pay) 
individuals. Consistent with statutory requirements, these interim 
final rules establish at 45 CFR 149.610(e)(1) that the good faith 
estimate must be provided in written form either on paper or 
electronically (for example, electronic transmission of the good faith 
estimate through the convening provider's patient portal or electronic 
mail), pursuant to the uninsured (or self-pay) individual's requested 
method of delivery, and within the timeframes specified under 45 CFR 
149.610(b). For good faith estimates provided electronically, the good 
faith estimate must be provided in a manner that the uninsured (or 
self-pay) individual can both save and print, and must be provided and 
written using clear and understandable language and in a manner 
calculated to be understood by the average uninsured (or self-pay) 
individual.\66\
---------------------------------------------------------------------------

    \66\ For additional resources, see Federal Plain Language 
Guidelines at https://www.plainlanguage.gov/guidelines/.
---------------------------------------------------------------------------

    HHS notes that the good faith estimate is necessary for initiating 
the patient-provider dispute resolution process under 45 CFR 149.620, 
and thus must be issued in written form. Additionally, 45 CFR 
149.610(e)(2) of these interim final rules establishes that to the 
extent that an uninsured (or self-pay) individual requests a good faith 
estimate be provided other than by paper or electronically (for 
example, by phone or orally in person), the convening provider or 
facility may orally discuss the information included in the good faith 
estimate. However, in order to meet the requirements of this section, 
the convening provider or convening facility must issue the good faith 
estimate in written form. The good faith estimate may be provided to an 
uninsured (or self-pay) individual's authorized representative instead 
of the individual, to the extent not prohibited under state law. HHS 
notes that authorized representatives from state Consumer Assistance 
Programs (CAPs) or legal aid organizations may also be resources for 
assisting individuals with good faith estimates. HHS recognizes and 
notes that similar discussions related to authorized representatives 
(and communication needs of underserved populations discussed elsewhere 
in this preamble) were also discussed in the July interim final rules. 
These interim final rules adopt similar standards for authorized 
representatives as the July 2021 interim final rules, with amendments 
to account for concepts that are not relevant to uninsured (or self-
pay) individuals such as removing references to nonparticipating 
providers, participants, beneficiaries and enrollees.
    In interpreting the statutory requirements regarding the use of 
clear and understandable language, HHS recognizes that communication, 
language, and literacy barriers are associated with decreased quality 
of care, poorer health outcomes, and increased utilization.\67\ The use 
of appropriate language services and appropriate literacy levels in 
health care settings is associated with increased quality of care, 
improved patient safety outcomes, and lower utilization of costly 
medical procedures.\68\ HHS is of the view that it is imperative that 
providers and facilities make these efforts to provide good faith 
estimate information in a manner understandable to the uninsured (or 
self-pay) individual to help achieve the goal of the statute and ensure 
that uninsured (or self-pay) individuals are aware of the good faith 
estimate information and the options available to them. HHS is of the 
view that when providing a good faith estimate, providers or facilities 
should also take into account any vision, hearing, or language 
limitations; communication needs of underserved populations; 
individuals with limited English proficiency; and persons with health 
literacy needs. These factors meaningfully contribute to whether the 
uninsured (or self-pay) individual can understand and ask any questions 
about the total expected costs for items or services.
---------------------------------------------------------------------------

    \67\ Flores G. Language barriers to health care in the United 
States. N Engl J Med 2006; 355:229-231.
    \68\ Id.
---------------------------------------------------------------------------

    Providers and facilities are also required to comply with other 
state and Federal laws regarding language access, to the extent 
applicable. HHS reminds providers and facilities that are recipients of 
Federal financial assistance that they must comply with Federal civil 
rights laws that prohibit discrimination. These laws include Section 
1557 of the Patient Protection and Affordable Care Act,\69\ Title VI of 
the Civil Rights Act of 1964,\70\ and Section 504 of the Rehabilitation 
Act of 1973.\71\ Section 1557 and Title VI require covered entities to 
take reasonable steps to ensure meaningful access to individuals with 
limited English proficiency, which may include provision of language 
assistance services such as providing qualified interpreters, written 
or sight translation of written good faith estimates in paper or 
electronic form into languages other than English. When language 
assistance services are provided, they must be provided free of charge 
and be accurate and timely. Section 1557 and Section 504 require 
covered entities to take appropriate steps to ensure effective 
communication with individuals with disabilities, including provision 
of appropriate auxiliary aids and services in a timely manner and free 
of charge to the individual. Auxiliary aids and services may include 
sign language 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.
---------------------------------------------------------------------------

    \69\ 42 U.S.C. 18116.
    \70\ 42 U.S.C. 2000d et seq.
    \71\ 29 U.S.C. 794.
---------------------------------------------------------------------------

    HHS seeks comment from persons in and representatives of racial/
ethnic

[[Page 56022]]

minority and underserved communities, including those with limited 
English proficiency and those with disabilities who require information 
in alternate and accessible formats, lesbian, gay, bisexual, 
transgender, and queer (LGBTQ+) persons, and stakeholders who serve 
such communities, on whether the provisions and protections related to 
communication, language, and literacy sufficiently address barriers 
that exist to ensuring all individuals can read, understand, and 
consider their options related to good faith estimates. HHS also seeks 
comment on how to best provide additional help and resources for these 
individuals, including state CAPs, legal services or other aid that may 
help patients with good faith estimates. HHS also seeks comment on 
additional or alternate policies HHS may consider to help address and 
remove such barriers. In furtherance of the goal of reducing 
disparities in health care and coverage, HHS intends to analyze data 
related to individuals' use of the patient-provider dispute resolution 
process described under 45 CFR 149.620, as added by PHS Act section 
2799B-7, and the appeals process described under 45 CFR 147.136, as 
added by PHS Act section 2719, to understand where barriers to coverage 
or accessible information persist. HHS is seeking comment on how to use 
data related to these two processes to understand, analyze, and address 
continued disparities.
    HHS is seeking comment on how the required methods for providing a 
good faith estimate to uninsured (or self-pay) individuals established 
under 45 CFR 149.610 may affect small or rural providers or facilities. 
HHS is particularly interested in whether there are alternatives to 
these interim policies that HHS could consider for potential future 
rulemaking that could meet the statutory requirements for provision of 
good faith estimates to uninsured (or self-pay) individuals.
6. Additional Compliance Provisions
    HHS is of the view that compliance provisions (established at 45 
CFR 149.610(f) of these interim final rules) are necessary to ensure 
that providers and facilities have taken reasonable steps to ensure the 
accuracy of the information included in a good faith estimate. These 
interim final rules further clarify in 45 CFR 149.610(e)(1) that a good 
faith estimate issued to an uninsured (or self-pay) individual is 
considered part of the patient's medical record and must be maintained 
in the same manner as a patient's medical record, and that convening 
providers and facilities must provide a copy of any previously issued 
good faith estimate furnished within the last 6 years to an uninsured 
(or self-pay) individual upon the request of the uninsured (or self-
pay) individual.
    While HHS acknowledges that some states have existing state laws 
related to the furnishing of good faith estimates, HHS is of the view 
that uninsured (or self-pay) individuals should still have access to a 
good faith estimate that meets the minimum requirements established in 
these interim final rules. Therefore at 45 CFR 149.610(f)(2) these 
interim final rules establish that providers or facilities that issue 
good faith estimates under state processes that do not meet the minimum 
requirements under this section fail to comply with the requirements of 
45 CFR 149.610.
    In circumstances in which a provider or facility, acting in good 
faith, makes an error or omission in a good faith estimate, HHS is 
establishing at 45 CFR 149.610(f)(3) that a provider or facility will 
not fail to comply with this section solely because, despite acting in 
good faith and with reasonable due diligence, the provider or facility 
makes an error or omission in a good faith estimate required under this 
section, provided that the provider or facility corrects the 
information as soon as practicable. However, if the services are 
furnished before the error in the good faith estimate is addressed, the 
provider or facility may be subject to patient-provider dispute 
resolution if the billed charges are substantially in excess of the 
good faith estimate (as described in 45 CFR 149.620).
    Additionally, to the extent compliance with this section requires a 
provider or facility to obtain information from any other entity or 
individual, these interim final rules specify at 45 CFR 149.610(f)(4) 
that the provider or facility will not fail to comply with this section 
because it relied in good faith on the information from the other 
entity, unless the provider or facility knows, or reasonably should 
have known, that the information is incomplete or inaccurate. HHS notes 
that providers and facilities (including convening providers, convening 
facilities, co-providers or co-facilities) who experience other 
providers' or facilities' failures to comply with the requirements in 
these interim final rules may file a complaint for enforcement 
investigation under 45 CFR 149.450. If the provider or facility learns 
that the information is incomplete or inaccurate, the provider or 
facility must provide corrected information to the uninsured (or self-
pay) individual as soon as practicable, and as noted above, may be 
subject to patient-provider dispute resolution if items or services 
furnished before a corrected good faith estimate could be issued to an 
uninsured (or self-pay) individual.
7. Applicability of the Good Faith Estimate Requirements
    These interim final rules establish under 45 CFR 149.610(g)(1) that 
the requirements of this section are applicable for good faith 
estimates requested on or after January 1, 2022 by uninsured (or self-
pay) individuals or for good faith estimates required to be provided to 
uninsured (or self-pay) individuals in connection with items or 
services scheduled on or after January 1, 2022. HHS recognizes that 
some providers or facilities may need to establish efficient and secure 
communication channels for transmission of good faith estimate 
information between convening providers or facilities and co-providers 
and co-facilities. While HHS notes that there are longstanding 
established standards for data exchange between providers established 
under HIPAA,\72\ HHS is seeking comment on any existing challenges 
related to secure transmission of good faith estimate information 
between providers and facilities. HHS is also interested in whether 
publicly available standardized processes exist or could be developed 
that would facilitate and support efficient and timely transmission of 
good faith estimate information. HHS also seeks comments on how the 
Hospital Price Transparency requirements for hospitals to display 
standard charges in a consumer-friendly manner (45 CFR 180.60), and, 
specifically, the voluntary use of online price estimator tools (45 CFR 
180.60(a)(2)), may be leveraged to provide a good faith estimate under 
these final rules. HHS also seeks comments on whether there are other 
opportunities for the convening provider to use the Hospital Price 
Transparency machine-readable file requirements (45 CFR 180.50) to 
inform good faith estimates with expected charges of co-providers or 
co-facilities from the comprehensive machine-readable files, whether or 
not the comprehensive machine-readable files can assist uninsured (or 
self-pay) individuals in determining if the good faith estimate charges 
are reasonable and/or accurate, and what limitations exist in using the 
comprehensive machine-readable files for purposes of

[[Page 56023]]

meeting the requirements of this section for provision of the good 
faith estimates to uninsured (or self-pay) individuals. General 
information regarding relevant interoperability or data exchange 
standards would also be of interest.
---------------------------------------------------------------------------

    \72\ https://www.cms.gov/regulations-and-guidance/administrative-simplification/hipaa-aca.
---------------------------------------------------------------------------

    These interim final rules at 45 CFR 149.610(g)(2) establish that 
nothing in 45 CFR 149.610 alters or otherwise affects a provider's or 
facility's duty to comply with requirements under other applicable 
state or Federal laws, including those governing the accessibility, 
privacy, or security of information required to be disclosed under this 
section, or those governing the ability of properly authorized 
representatives to access uninsured (or self-pay) individuals' 
information held by providers or facilities, except to the extent a 
state law prevents the application of this section.
    HHS understands that it may take time for providers and facilities 
to develop systems and processes for receiving and providing the 
required information from co-providers and co-facilities. Therefore, 
for good faith estimates provided to uninsured (or self-pay) 
individuals from January 1, 2022 through December 31, 2022, HHS will 
exercise its enforcement discretion in situations where a good faith 
estimate provided to an uninsured (or self-pay) individual does not 
include expected charges from co-providers or co-facilities. HHS notes 
that nothing prohibits a co-provider or co-facility from furnishing the 
information before December 31, 2022, and nothing would prevent the 
uninsured (or self-pay) individual from separately requesting a good 
faith estimate directly from the co-provider or co-facility, in which 
case the co-provider and co-facility would be required to provide the 
good faith estimate for such items or services. Otherwise during this 
period, HHS encourages convening providers and convening facilities to 
include a range of expected charges for items or services reasonably 
expected to be provided and billed by co-providers and co-facilities. 
To the extent states are the primary enforcer of these requirements, 
HHS encourages states to take a similar approach, and will not consider 
a state to be failing to substantially enforce these requirements if it 
takes such an approach from January 1, 2022 through December 31, 2022.
8. Applicability of Requirements to Notices Provided Under 45 CFR 
149.420
    The July 2021 interim final rules included provisions at 45 CFR 
149.420(d) establishing the information that must be included in a 
written notice, if a non-participating provider or non-participating 
emergency facility seeks to obtain consent from a participant, 
beneficiary, or enrollee (or their authorized representative) to waive 
the balance bill protections. Specifically, the written notice must be 
provided in a form and manner specified by HHS in guidance, and must, 
among other things, include the good faith estimated amount that such 
nonparticipating provider may charge the participant, beneficiary, or 
enrollee for the items and services involved (including any item or 
service that is reasonably expected to be furnished by the 
nonparticipating provider in conjunction with such items or services). 
In the July 2021 interim final rules, HHS stated that in calculating 
the good faith estimated amount required to be included in the notice 
under 45 CFR 149.420(d)(2), the provider or facility is expected to 
apply the same process and considerations used to calculate the good 
faith estimate that is required under PHS Act section 2799B-6(2).
    HHS recognizes that providers and facilities have some discretion 
in the assumptions that they make regarding which items or services to 
include in a good faith estimate, and that some natural variation may 
occur across providers and facilities in terms of which items or 
services they would include in an estimate. However, HHS is of the view 
that it is critical for providers and facilities to apply the same 
process and considerations in developing the good faith estimate 
required under PHS Act section 2799B-6(2) (as partially implemented in 
these interim final rules at 45 CFR 149.610) as in 45 CFR 149.420(d)(2) 
to avoid consumers receiving two different estimates describing care 
from the same provider or facility for the same care.\73\
---------------------------------------------------------------------------

    \73\ For individuals who are seeking to submit a claim to their 
plan or coverage, the second estimate would be sent to the plan or 
issuer and used to develop the advanced explanation of benefits 
required to be provided under Code section 9816(f), ERISA section 
716(f), and PHS Act section 2799A-1(f). As discussed previously, the 
Departments will defer enforcement of these requirements until the 
Departments have issued rulemaking regarding the requirements. The 
Departments recognize that participants, beneficiaries, and 
enrollees would not receive a second estimate (in the advanced 
explanation of benefits) from their plan or issuer until this 
rulemaking goes into effect.
---------------------------------------------------------------------------

    Under 45 CFR 149.610, the ``expected charge'' for an item or 
service may vary depending on whether the good faith estimate is being 
provided to an uninsured (or self-pay) individual, or to a plan or 
issuer. HHS clarifies that the good faith estimate in the notice 
described in 45 CFR 149.420(c) must be developed using the definition 
of the expected charge that would apply when the good faith estimate is 
provided to a plan or issuer (that is, the amount the provider or 
facility would expect to charge if the provider or facility intended to 
bill a plan or issuer directly for such item or service). Because the 
notice in 45 CFR 149.420(c) would only be provided with respect to 
individuals enrolled in a group health plan or health insurance 
coverage, HHS is of the view that requiring the good faith estimate to 
align with the good faith estimate that would be provided under PHS Act 
section 2799B-6(2)(A) to a plan or issuer will help to avoid situations 
in which participants, beneficiaries, or enrollees subsequently receive 
an advanced explanation of benefits from their plan or issuer that is 
generated from a different estimate than the one provided in the 
notice, or in which participants, beneficiaries, or enrollees receive 
differing estimates regarding notice and consent under 45 CFR 
149.420(d)(2) and regarding self-pay liability under 45 CFR 149.610. In 
instances where an individual receives a notice with a good faith 
estimate reflecting the amount that would be billed to a plan or issuer 
but intends to self-pay and the item or service is scheduled in 
advance, the individual would separately receive a good faith estimate 
reflecting the amount they would be charged as a self-pay individual 
under the requirements in 45 CFR 149.610. HHS acknowledges that the 
Departments are not codifying requirements regarding PHS Act section 
2799B-6(2)(A), which requires providers and facilities to furnish good 
faith estimates to plans or issuers, and that HHS will defer 
enforcement of this requirement until rulemaking is effective to fully 
implement this requirement. That non-enforcement position does not 
extend to the requirement to provide a good faith estimate as part of 
the notice under 45 CFR 149.420(c). However, HHS seeks comment on 
whether providers and facilities should be allowed to calculate the 
good faith estimate under 45 CFR 149.420(d)(2) using the expected 
charge applicable to an uninsured (or self-pay) individual until such 
rulemaking occurs. HHS also seeks comment on whether it would be 
feasible for providers and facilities to provide an estimate or range 
of estimated costs for insured consumers upon request during this 
period of non-enforcement.
    HHS recognizes that the good faith estimates required under 45 CFR 
149.420(d)(2) and 45 CFR 149.610 may also differ if items or services 
from different provider(s) or facilities are included in the estimate. 
For example,

[[Page 56024]]

an estimate required in the notice under 45 CFR 149.420(d)(2) would 
only include items or services provided by a nonparticipating provider 
that seeks to obtain consent to balance bill. In contrast, the good 
faith estimate required under these interim final rules would not be 
limited to items or services furnished by such providers. However, HHS 
expects that the estimates regarding items or services provided by a 
specific provider or facility in the notice provided under 45 CFR 
149.420(c) would include the same items or services for that specific 
provider or facility as the good faith estimate provided under 45 CFR 
149.610. Although the grand total of a good faith estimate under each 
of the two rules might differ depending on the number of providers 
furnishing estimates as part of one good faith estimate, HHS is of the 
view that the requirements in each of the two rules generally take into 
account the same process and considerations for calculating the good 
faith estimate.

B. Patient-Provider Dispute Resolution

1. Scope
    PHS Act section 2799B-7 directs the Secretary of HHS to establish a 
process called a patient-provider dispute resolution process. Under 
this process an uninsured (or self-pay) individual who received a good 
faith estimate of the expected charges for an item or service, pursuant 
to PHS Act section 2799B-6, implemented at 45 CFR 149.610, may seek a 
determination from an SDR entity for the amount to be paid by the 
uninsured (or self-pay) individual to the provider or facility for such 
item or service. Uninsured (or self-pay) individuals are eligible for 
the patient-provider dispute resolution process after being furnished 
an item or service for which they received a good faith estimate if the 
individual is billed, by the provider or facility, charges that are 
substantially in excess of the good faith estimate.
    HHS is adding new 45 CFR 149.620 to implement this patient-provider 
dispute resolution process. These interim final rules include specific 
definitions related to the patient-provider dispute resolution process; 
specify the items and services eligible for the process; establish 
requirements for what uninsured (or self-pay) individuals must provide 
to initiate the process; and specify the information providers and 
facilities must provide to an SDR entity to inform payment 
determinations. These interim final rules also establish requirements 
for SDR entities contracted to resolve the patient-provider dispute, 
including how SDR entities determine the payment amount, and 
certification standards that HHS will consider when contracting with 
SDR entities. These interim final rules also specify the administrative 
fee associated with the patient-provider dispute resolution process, 
and the minimum requirements for state patient-provider dispute 
resolution processes to operate in place of the Federal patient-
provider dispute resolution process.
2. Definitions
    For purposes of these interim final rules, the definitions under 45 
CFR 149.610 apply. Definitions related to confidentiality set forth in 
Sec.  149.510(a)(2), including the definitions for breach, individually 
identifiable health information (IIHI), and unsecured IIHI also apply 
to this section. These interim final rules also define three additional 
terms: ``billed charge,'' ``substantially in excess,'' and ``total 
billed charges'' under new 45 CFR 149.620(a)(2).
    These interim final rules define ``billed charge'' to mean the 
amount billed by a provider or facility for an item or service. These 
interim final rules define ``total billed charges'' to mean the total 
of billed charges, by a provider or facility, for all primary items or 
services and all other items or services furnished in conjunction with 
the primary items or services to an uninsured (or self-pay) individual, 
regardless of whether such items or services were included in the good 
faith estimate.
    These interim final rules define the term ``substantially in 
excess'' to mean with respect to the total billed charges by a provider 
or facility, an amount that is at least $400 more than the total amount 
of expected charges for the provider or facility listed on the good 
faith estimate. In defining ``substantially in excess,'' HHS notes that 
PHS Act section 2799B-7 does not include a definition for 
``substantially in excess.'' HHS reviewed other uses of the term in 
existing Federal law. For example, section 1128(b)(6) of the Social 
Security Act provides that the Secretary of HHS may exclude any 
individual or entity from participation in any Federal health care 
program if the Secretary determines that the individual or entity 
submitted bills or requests for payment (where such bills or requests 
are based on charges or cost) under title XVIII of the Social Security 
Act or a state health care program containing charges (or, in 
applicable cases, requests for payment of costs) for items or services 
furnished substantially in excess of such individual's or entity's 
usual charges (or, in applicable cases, substantially in excess of such 
individual's or entity's costs) unless the Secretary finds there is 
good cause for such bills or requests containing such charges or costs. 
However, HHS notes that section 1128(b)(6) of the Social Security Act 
similarly does not include a definition for ``substantially in 
excess.'' Regardless, HHS is of the view that the term ``substantially 
in excess'' as used in PHS Act section 2799B-7 should be distinguished 
from the language of section 1128(b)(6) of the Social Security Act, as 
the provisions operate differently. Specifically, PHS Act section 
2799B-7 specifies that an uninsured (self-pay) individual is eligible 
to seek a payment determination regarding the amount to be paid when 
the total billed charges substantially exceed the total expected 
charges in the good faith estimate. HHS is of the view that such a 
process should provide clear criteria that would make it easy for 
uninsured (or self-pay) individuals, providers, facilities, SDR 
entities, and HHS to determine eligibility for dispute resolution. HHS 
is also of the view that such eligibility criteria should be based on 
objective factors that are known in advance and are simple for 
providers, facilities, and uninsured (or self-pay) individuals to 
understand, which will reduce uncertainty over which items or services 
are subject to dispute resolution and which are not.
    HHS considered establishing a definition for ``substantially in 
excess'' to mean that the total billed charges are greater than the 
total expected charges in the good faith estimate by a percentage of 
the total expected charges in the good faith estimate (for example, 20 
percent of the total expected charges). However, HHS is mindful of the 
limitations in relying on percentages for determining the threshold of 
eligibility for dispute resolution. In particular, when using 
percentages, the dollar thresholds would vary significantly based on 
the magnitude of the expected charges in the good faith estimate. For 
example, if for an item or service, the expected charge in the good 
faith estimate is $300, 20 percent would equal $60, meaning the billed 
charges would need to equal or exceed $360 to be eligible for dispute 
resolution. However, if for an item or service, the expected charge in 
the good faith estimate is $25,000, the difference between the billed 
charge and the expected charge in the good faith estimate would need to 
be $5,000 or greater to be eligible for dispute resolution. In other 
words, basing the definition of ``substantially in excess'' on a 
percentage of the total expected

[[Page 56025]]

charges in the good faith estimate would make dispute resolution easier 
to access in cases where the associated dollar amounts are small. 
Conversely, in cases where the associated dollar amounts are very 
large, the threshold would be significantly larger in terms of dollars 
and more difficult for the claims to meet, which could result in many 
uninsured (or self-pay) individuals being unable to access dispute 
resolution despite receiving bills for items or services in amounts far 
greater, in absolute value, than the expected charges in the good faith 
estimate.
    To address these limitations, HHS considered alternative approaches 
that included defining ``substantially in excess'' to mean that the 
total billed charges are greater than the total expected charges in the 
good faith estimate by the lesser of a percentage of the total expected 
charges in the good faith estimate or a flat maximum dollar amount. 
While this approach would mitigate concerns over higher cost items and 
services meeting the ``substantially in excess'' threshold, it would 
not address concerns over the uninsured (or self-pay) individual being 
easily able to bring dispute resolution claims for lower cost items or 
services. HHS is concerned that under such an approach, dispute 
resolution for lower cost items or services could be overused, thus 
potentially increasing costs for providers and facilities which could 
be passed on to individual consumers in the form of higher prices.
    Similarly, HHS considered defining ``substantially in excess'' to 
mean an amount that is the greater of either a percentage of the total 
expected charges in the good faith estimate or a flat minimum dollar 
amount. By specifying a flat minimum dollar threshold amount, such an 
approach would address concerns over overuse of the patient-provider 
dispute resolution process for items or services at the lower end of 
costs. However, HHS remains concerned that such an approach could 
effectively put dispute resolution out of reach for uninsured (or self-
pay) individuals in situations where the total expected charges for 
items or services are high, particularly for those who need to undergo 
more complex procedures. As an example, under this approach, when the 
total billed charges must be either equal to or greater than a flat 
minimum amount or predefined percentage above the expected charges, if 
the applicable flat amount is $400 and the applicable percentage of the 
expected charges in the good faith estimate were equal to 10 percent, 
total expected charges of $25,000 would mean the total billed charges 
must exceed the total expected charges in the good faith estimate by 
$2,500 or more in order to access dispute resolution. If, in this 
example, the total billed charges are less than $27,500, the uninsured 
(or self-pay) individual would be unable to resolve the unexpected bill 
using the patient-provider dispute resolution process. Even for 
individuals with sufficient savings or income, such a threshold would 
likely pose a major financial burden, and such a situation would be 
exacerbated for lower income individuals and those who lack sufficient 
savings. HHS is of the view that whether an individual needs to receive 
a high cost item or service is independent from an individual's income 
or assets or coverage status, and basing the definition of 
``substantially in excess'' for the purposes of eligibility for the 
patient-provider dispute resolution process on the expected charges of 
an item or service without any consideration for the financial means of 
the uninsured (or self-pay) individual would create a massive gap in 
the consumer protections intended under PHS Act section 2799B-7. To 
provide another example, suppose an uninsured (or self-pay) individual 
has total expected charges in the good faith estimate equal to $2,100 
and the ``substantially in excess'' standard is the greater of 10% of 
the total expected charges in the good faith estimate or $400. Under 
such a definition, the substantially in excess threshold would be $400, 
and if the total billed charges are $2,500 or greater, then the items 
or services are eligible for dispute resolution. Now, consider another 
uninsured (or self-pay) individual with total expected charges of 
$21,000; in this uninsured (or self-pay) individual's case, the total 
billed charges would need to exceed the total expected charges in the 
good faith estimate by $2,100 or more in order to be eligible for 
dispute resolution. The uninsured (or self-pay) individual with 
expected charges of $21,000 is in no less need of protection from 
surprise medical bills than the uninsured (or self-pay) individual with 
expected charges of $2,100, but in practice such individual would more 
likely be unable to access these important protections intended by the 
patient-provider dispute resolution due to the higher threshold.
    HHS also considered a tiered percentage approach in which lower-
cost services must exceed a higher percentage value, with a lower 
percentage value applicable for higher-cost items or services. However, 
HHS is of the view that such an approach would add undue complexity to 
the patient-provider dispute resolution process in determining whether 
items or services meet the ``substantially in excess'' threshold and 
would present the same concerns previously described. HHS also 
considered basing the definition of ``substantially in excess'' on 
billed charges that exceed a certain percentile for the same or similar 
services using an independent database. However, such a mechanism 
appears inconsistent with the statute, which contemplates costs for 
items or services to be determined ``substantially in excess'' based on 
the good faith estimate provided, rather than based on a specific 
benchmark, such as an independent database.
    HHS is of the view that basing the definition of ``substantially in 
excess'' on a flat dollar amount, such as $400, allows for a 
straightforward way to calculate the eligibility of an item or service 
for patient-provider dispute resolution, and reduces the concerns 
described earlier regarding lower-cost items or services too easily 
meeting the eligibility threshold for dispute resolution and making it 
more difficult for higher-cost items and services to meet the 
eligibility threshold. HHS acknowledges that such an approach may 
result in situations in which the difference between the total billed 
charges and the total expected charges in the good faith estimate is 
small in relative terms but the item or service is eligible for dispute 
resolution. As an example, if the expected charge for an item or 
service in the good faith estimate is $100,000, basing ``substantially 
in excess'' on a flat $400 threshold, a billed charge of $100,400 (0.4% 
difference) or more would make the item or service eligible for dispute 
resolution, which could be argued by some as not ``substantially in 
excess.'' However, as discussed earlier in this section of the 
preamble, HHS is of the view that while the definition of 
``substantially in excess'' should encompass the difference between the 
total billed charges and the total expected charges in the good faith 
estimate, focusing solely on the expected costs of items or services 
risks shutting out many uninsured (or self-pay) individuals from the 
patient-provider dispute resolution process and undermines the intended 
protections in PHS Act section 2799B-7. Additionally, even when the 
total expected charges are high, a relatively small additional charge 
may still create significant financial difficulties for the uninsured 
(or self-pay) individual. HHS did consider whether to have different 
flat dollar thresholds based on the

[[Page 56026]]

uninsured (or self-pay) individual's income, however, HHS is of the 
view that such a policy would be confusing to uninsured (or self-pay) 
individuals who would need to provide documentation to verify their 
income, which increases the burdens placed on such individuals and 
could pose a deterrent to participation. Based on consideration of the 
different approaches discussed earlier in this section of the preamble, 
HHS determined that the best approach for defining ``substantially in 
excess'' would be to base it on a flat dollar difference between the 
total billed charges and the total expected charges in the good faith 
estimate.
    Because HHS views the patient-provider dispute resolution process 
established under PHS Act section 2799B-7 to be intended to protect 
uninsured (or self-pay) individuals from unexpected higher health care 
costs, it is appropriate to determine whether an amount is 
substantially in excess based on the perspective of individuals who are 
likely to be uninsured or underinsured, and not only the perspective of 
the average individual or the provider or facility. To that end, HHS 
looked to existing research to assess what amount Americans may 
struggle to cover in unexpected expenses. HHS is of the view that 
looking to Americans' ability to cover unexpected expenses is an 
important consideration when establishing protections for unexpected 
medical expenses, which remain a common unexpected expense for many. In 
a 2016 survey, the Federal Reserve reported that 22 percent of 
respondents experienced what they described as a major unexpected 
medical expense that they had to pay out-of-pocket in the previous 12 
months.\74\ Further, concerns over the potential costs of medical care 
may result in many Americans choosing to forego needed care.\75\ 
Another recent study found that in 2020, 17.8 percent of individuals 
had medical debt reported to a credit bureau, the study also found that 
individuals collectively had greater medical debt in collections than 
all forms of nonmedical debt combined (the authors defined nonmedical 
debt as other sources of debt in collections, including credit cards, 
personal loans, utilities, and phone bills).\76\
---------------------------------------------------------------------------

    \74\ Board of Governors of the Federal Reserve System, Report on 
the Economic Well-Being of U.S. Households in 2015 (May 2016), 
available at: https://www.federalreserve.gov/2015-report-economic-well-being-us-households-201605.pdf.
    \75\ For example, 24 percent of adults went without some form of 
medical care due to an inability to pay, down from 27 percent in 
2017 and well below the 32 percent reported in 2013. Dental care was 
the most frequently skipped treatment (17 percent), followed by 
visiting a doctor (12 percent) and taking prescription medicines (10 
percent). Board of Governors of the Federal Reserve System, Report 
on the Economic Well-Being of U.S. Households in 2018 (May 2019), 
available at: https://www.federalreserve.gov/publications/2019-economic-well-being-of-us-households-in-2018-dealing-with-unexpected-expenses.htm.
    \76\ Kluender R., Mahoney N., Wong F., Yin W. Medical Debt in 
the U.S., 2009-2020. JAMA. 2021;326(3):250-256. doi:10.1001/
jama.2021.8694.
---------------------------------------------------------------------------

    In 2019, the Federal Reserve found that nearly 4 in 10 adults would 
have difficulty covering an emergency expense costing $400, with 12 
percent of adults unable to pay their current month's bills if they 
also had an unexpected $400 expense.\77\ The ability to cover an 
unexpected expense also varies significantly by social risk and 
demographic factors, for example, income, race, perceived health, and 
depression.\78\ A 2016 survey by the Federal Reserve found that among 
respondents with a family income under $40,000, only 34 percent 
reported they would be able to pay an unexpected $400 expense using 
cash or its functional equivalent (including money currently in their 
checking/savings accounts, or available on a credit card that they 
would pay in full at their next statement). In addition, the Federal 
Reserve found that while 61 percent of non-Hispanic white respondents 
said that they would pay for an unexpected $400 expense using cash or 
its functional equivalent, for Hispanic and non-Hispanic black 
respondents, only 38 percent and 36 percent respectively reported that 
they would be able to pay for an unexpected $400 expense using cash or 
its functional equivalent.\79\
---------------------------------------------------------------------------

    \77\ Board of Governors of the Federal Reserve System, Report on 
the Economic Well-Being of U.S. Households in 2018 (May 2019), 
available at: https://www.federalreserve.gov/publications/2019-economic-well-being-of-us-households-in-2018-dealing-with-unexpected-expenses.htm.
    \78\ Board of Governors of the Federal Reserve System, Report on 
the Economic Well-Being of U.S. Households in 2015 (May 2016), 
available at: https://www.federalreserve.gov/2015-report-economic-well-being-us-households-201605.pdf.
    \79\ Board of Governors of the Federal Reserve System, Report on 
the Economic Well-Being of U.S. Households in 2015 (May 2016), 
available at: https://www.federalreserve.gov/2015-report-economic-well-being-us-households-201605.pdf.
---------------------------------------------------------------------------

    Other surveys have found results that were consistent with the 
Federal Reserve's findings. One such survey found that only 39 percent 
of Americans would cover an unexpected $1,000 expense using their 
savings.\80\ The same survey also found that this number varied 
significantly with age and income, finding that only 33 percent of 
those in the millennial generation and only 21 percent of those making 
less than $30,000 per year would cover a hypothetical $1,000 expense 
using savings.\81\ A survey by the Robert Wood Johnson Foundation found 
that 67 percent of those making less than $35,000 per year reported 
they would have difficulty paying off a hypothetical $1,000 
expense.\82\ Research by the Pew Charitable Trust also found that 55 
percent of Americans to be ``savings-limited, meaning they can replace 
less than one month of their income through liquid savings.'' \83\ For 
Americans at the bottom quintile of income, this amount is even less, 
with the typical family having less than 2 weeks of income in 
savings.\84\
---------------------------------------------------------------------------

    \80\ https://www.bankrate.com/banking/savings/financial-security-january-2021/.
    \81\ https://www.bankrate.com/banking/savings/financial-security-january-2021/.
    \82\ https://www.rwjf.org/en/library/research/2019/12/life-experiences-and-income-inequality-in-the-united-states.html.
    \83\ https://www.pewtrusts.org/~/media/Assets/2015/01/
FSM_Balance_Sheet_Report.pdf.
    \84\ https://www.pewtrusts.org/~/media/Assets/2015/01/
FSM_Balance_Sheet_Report.pdf.
---------------------------------------------------------------------------

    While research shows that some Americans are financially prepared 
to cover unexpected costs, many Americans are unable to weather such 
unexpected expenses.\85\ The Pew Charitable Trust found that more than 
half of families that experienced a financial shock (such as an 
unplanned expense or loss of income) reported having trouble making 
ends meet, and this number increased for younger, minority, and low-
income households. The Pew Charitable Trust also found that households 
that experienced such events typically had lower savings and higher 
credit card debts than those that did not.\86\
---------------------------------------------------------------------------

    \85\ https://www.pewtrusts.org/~/media/assets/2015/10/emergency-
savings-report-1_artfinal.pdf.
    \86\ https://www.pewtrusts.org/~/media/assets/2015/10/emergency-
savings-report-1_artfinal.pdf.
---------------------------------------------------------------------------

    While health care costs are not the only unexpected expenses people 
face, they constitute a large source of surprise expenses. The Robert 
Wood Johnson Foundation found that 38 percent of lower-income Americans 
and 31 percent of middle-income Americans reported experiencing 
significant problems with paying medical bills.\87\ Many Americans, 
particularly those who are uninsured, report that they went without 
needed care, or delayed care, due to costs. For example, the Federal 
Reserve found that 38 percent of those with incomes below $40,000 went 
without some form of medical care in 2019.\88\ Among uninsured 
individuals,

[[Page 56027]]

47 percent went without some form of medical care due to concerns over 
costs.\89\ Research reinforces the findings of the Federal Reserve and 
indicates that additional risk factors such as perceived health and 
depression increase an individual's likelihood of reporting that health 
care is unaffordable.\90\ \91\ For these groups facing high health care 
related financial burdens, which include those most likely to be 
uninsured and underinsured,\92\ unexpected expenses of $400 or more 
would reasonably constitute a substantial amount.
---------------------------------------------------------------------------

    \87\ https://www.rwjf.org/en/library/research/2019/12/life-experiences-and-income-inequality-in-the-united-states.html.
    \88\ https://www.federalreserve.gov/publications/2019-economic-well-being-of-us-households-in-2018-dealing-with-unexpected-expenses.htm.
    \89\ https://www.federalreserve.gov/publications/2019-economic-well-being-of-us-households-in-2018-dealing-with-unexpected-expenses.htm.
    \90\ Kielb E.S., Rhyan C.N., Lee J.A. Comparing Health Care 
Financial Burden With an Alternative Measure of Unaffordability. 
Inquiry. 2017;54:46958017732960. doi:10.1177/0046958017732960.
    \91\ Amin K., Claxton G., Ramirez G., Cox C. How Does Cost 
Affect Access to Care? Peterson-KFF Health System Tracker. January 
2021. Available at https://www.healthsystemtracker.org/chart-collection/cost-affect-access-care/#item-start.
    \92\ Kielb E.S., Rhyan C.N., Lee J.A. Comparing Health Care 
Financial Burden With an Alternative Measure of Unaffordability. 
Inquiry. 2017;54:46958017732960. doi:10.1177/0046958017732960. Also 
see, Amin K., Claxton G., Ramirez G., Cox C. How Does Cost Affect 
Access to Care. Peterson-KFF Health System Tracker. January 2021. 
Available at https://www.healthsystemtracker.org/chart-collection/cost-affect-access-care/#item-start. Also see, Tolbert J., Orgera 
K., Key Facts About the Uninsured Population. Kaiser Family 
Foundation. November 2020. Available at https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/.
---------------------------------------------------------------------------

    HHS also considered setting the flat dollar lower than $400. 
However, as discussed in greater detail in section VI.B.8 of this 
preamble, HHS expects to contract with SDR entities directly and will 
pay the SDR entity costs. Based on conversations with stakeholders and 
research of similar state processes, HHS found that the amount that 
dispute resolution entities charge for similar dispute resolution 
processes is around $400 per case. A study by the Commonwealth Fund 
similarly found costs for dispute resolution ranging between $300 and 
$600.\93\ HHS found that other state dispute resolution processes could 
potentially charge the uninsured (or self-pay) individual high fees to 
initiate a dispute. For example, in New York, the cost to the uninsured 
(or self-pay) individual for dispute resolution could be as much as 
$395, and in Maine as much as $450.\94\ However, as is further 
discussed in section VI.B.8 of this preamble, HHS will only charge a 
small administrative fee, meaning that uninsured (or self-pay) 
individuals will be mostly insulated from the costs of dispute 
resolution. HHS acknowledges that the costs to the government for 
conducting dispute resolution would not be a consideration for the 
uninsured (or self-pay) individual in determining whether to initiate a 
dispute, as they would not be required to pay those costs. However, HHS 
is of the view that it would not make sense to conduct dispute 
resolution cases where the amount in dispute is less than the cost for 
the dispute resolution entity. As a result, HHS is of the view that 
setting the substantially-in-excess floor equal to $400 is a reasonable 
and appropriate approach and would ensure that the minimum amount in 
dispute for the patient-provider dispute resolution process is 
comparable to the expected costs for dispute resolution.
---------------------------------------------------------------------------

    \93\ https://www.commonwealthfund.org/blog/2020/how-states-are-using-independent-dispute-resolution-resolve-out-network-payments-surprise.
    \94\ https://www.dfs.ny.gov/system/files/documents/2020/10/idr_patient_application.pdf and https://dispute.maximus.com/me/indexME.
---------------------------------------------------------------------------

    In addition, HHS considered whether to set the substantially-in-
excess threshold floor at a higher amount than $400. However, HHS 
remains concerned that setting the flat dollar floor for the 
substantially-in-excess threshold greater than $400 could ultimately 
result in many uninsured (or self-pay) individuals, particularly those 
who received lower cost items or services, being unable to access the 
patient-provider dispute resolution process. As a result, HHS is of the 
view that limiting patient-provider dispute resolution to items or 
services where the total billed charges exceed the total expected 
charges in the good faith estimate by $400 or greater strikes the 
appropriate balance that helps ensure that amounts in dispute are 
sufficiently large to justify the costs of maintaining and operating 
the dispute resolution process; that burdens on providers, facilities, 
and the Federal Government are minimized; and that all uninsured (or 
self-pay) individuals are able to access the dispute resolution process 
to resolve unexpected billed amounts.
    As HHS obtains additional experience with the patient-provider 
dispute resolution process, HHS intends to review data on the use of 
the process, such as the volume of dispute resolution cases, 
differences between the total expected charges in the good faith 
estimate and the total billed charges in cases that go to dispute 
resolution, data on payment determination amounts by SDR entities, the 
success rate for uninsured (or self-pay) individuals who initiate 
dispute resolution, and characteristics of initiation requests that are 
determined ineligible, and in future years may propose adjustments to 
the definition of ``substantially in excess.''
    HHS seeks comment on the definition for ``substantially in 
excess,'' including whether the $400 amount should be set higher or 
lower, whether there is any other specific dollar value that would be 
more appropriate, or whether a different method for determining 
``substantially in excess'' should be considered. HHS also seeks 
comment on the terms defined in these interim final rules, including 
the appropriateness and usability of the definitions, and whether 
additional terms should be defined in future rulemaking. HHS also seeks 
comment on how these definitions may impact market incentives, 
including the accuracy of good faith estimates.
3. Eligibility for Patient-Provider Dispute Resolution
    The patient-provider dispute resolution process in PHS Act section 
2799B-7 applies to uninsured (or-self-pay) individuals who received, 
pursuant to PHS Act section 2799B-6, a good faith estimate of the 
expected charges for scheduled or requested items or services from a 
provider or facility, and who after being furnished such item or 
service is billed by such provider or facility charges substantially in 
excess of such estimate. To clarify what items and services are 
eligible for the patient-provider dispute resolution process, HHS is 
adding 45 CFR 149.620(b) which specifies that items or services 
provided by a convening provider, convening facility, co-provider, or 
co-facility are eligible for the patient-provider dispute resolution 
process if the total billed charges (by the particular convening 
provider, convening facility, or co-provider or co-facility listed in 
the good faith estimate), are substantially in excess of the total 
expected charges for that specific provider or facility listed on the 
good faith estimate, as required under 45 CFR 149.610, regardless of 
whether the items or services included in the total billed charges were 
listed in the good faith estimate, or whether the co-provider or co-
facility was listed on the good faith estimate.
    Good faith estimates for scheduled items or services, or when 
requested, as specified in 45 CFR 149.610, are intended to provide a 
comprehensive estimate of expected charges for items or services 
furnished during the period of care. PHS Act section 2799B-6 and 45 CFR 
149.610 require providers or facilities to include any item or service 
that is reasonably expected to be provided in conjunction with an item 
or service, including an item or service reasonably expected to be so 
provided by another provider or facility.
    HHS is of the view that an uninsured (or self-pay) individual 
should be able

[[Page 56028]]

to initiate the patient-provider dispute resolution process when the 
total billed charge for an item or service from a particular provider 
or facility represented in the good faith estimate exceeds the 
substantially in excess threshold defined at 45 CFR 149.620(a)(2). 
Therefore, these interim final rules specify that an item or service 
provided by a convening provider, convening facility, co-provider or 
co-facility are eligible for the patient-provider dispute resolution 
process if the total billed charges (by the particular convening 
provider or facility, or co-provider or co-facility listed in the good 
faith estimate), are substantially in excess of the of total expected 
charges for that specific provider or facility listed on the good faith 
estimate, as required under 45 CFR 149.610.
    As an example, an uninsured (or self-pay) individual receives a 
good faith estimate that lists expected charges for 3 services, A, B, 
and C. Services A and B are provided by provider Y and service C is 
provided by co-provider Z. The total billed charges for services A and 
B must exceed the total expected charges for services A and B by at 
least $400 more than the amount listed in the good faith estimate in 
order for the uninsured (or self-pay) individual to be eligible to 
initiate patient-provider dispute resolution against provider Y. 
Similarly, the billed charge for service C must exceed the expected 
charges for service C by at least $400 more than the amount listed in 
the good faith estimate in order for the uninsured (or self-pay) 
individual to be eligible for the patient-provider dispute resolution 
against co-provider Z.
    An item or service is eligible for patient-provider dispute 
resolution based on the total billed charges from the provider or 
facility, regardless of whether such items or services are included in 
a good faith estimate. HHS recognizes that unforeseen factors during 
the course of treatment may occur, which could involve additional items 
or services from providers and facilities, and may result in higher 
billed charges after receipt of care than was anticipated at the time 
the good faith estimate was provided to the uninsured (or self-pay) 
individual. However, HHS is of the view that if an item or service is 
eligible for patient-provider dispute resolution only if it is 
explicitly listed in the good faith estimate, providers and facilities 
may be incentivized to omit items and services from the good faith 
estimate in order to avoid the patient-provider dispute resolution 
process. It is HHS's view that Congress intended to create a process 
which allows uninsured (or self-pay) individuals to dispute the final 
billed charges, if such charges are substantially in excess of the 
expected charges in the good faith estimate; and therefore any item or 
service that was not included in the good faith estimate, yet resulted 
in total billed charges substantially in excess of the total expected 
charges in the good faith estimate, should be eligible for patient-
provider dispute resolution.
    Therefore, if the total billed charges, which includes charges for 
new items or services, exceeds the total expected charges by at least 
$400 more than the amount in the good faith estimate, the items or 
services are eligible for patient-provider dispute resolution, despite 
the new items or services not being itemized in the good faith 
estimate. For example, co-provider Z bills an uninsured (or self-pay) 
individual for services C, D, and E, even though services D and E were 
not included in the good faith estimate. If the differences between the 
total billed charges for services C, D, and E are substantially in 
excess of the total expected charges in the good faith estimate for 
service C, then the uninsured (or self-pay) individual is eligible to 
initiate patient-provider dispute resolution against co-provider Z for 
services C, D, and E.
    Although convening providers and convening facilities are required 
to include expected charges from co-providers and co-facilities in the 
good faith estimate, HHS understands that there may be instances when 
an uninsured (or self-pay) individual may receive a bill that includes 
providers or facilities that were not included in the good faith 
estimate: Specifically, if a co-provider or co-facility that is 
reflected on the good faith estimate is substituted at the last moment 
to a different co-provider or co-facility. While PHS Act section 2799B-
7 requires that an item or service where the total billed charges are 
substantially in excess of the total expected charges in the good faith 
estimate will be eligible for patient-provider dispute resolution, 
expected charges for the replacement co-provider or co-facility may not 
be available. Regardless, HHS is of the view that the consumer 
protections of PHS Act section 2799B-7 should still apply in these 
circumstances as they are aimed to protect uninsured (or self-pay) 
individuals from unexpected medical bills, and allowing a co-provider 
or co-facility to circumvent these protections simply due to not being 
directly represented on the good faith estimate would undermine these 
protections. Therefore, HHS is adding 45 CFR 149.620(b)(2) that 
specifies that an item or service billed by a co-provider or co-
facility that replaced the original co-provider or co-facility covered 
under a good faith estimate is eligible for dispute resolution if the 
total billed charge is substantially in excess of the expected charges 
included on the good faith estimate for the original co-provider or co-
facility. However, if the replacement co-provider or co-facility 
provides the uninsured (or self-pay) individual with a new good faith 
estimate of expected charges in accordance with 45 CFR 149.610(b)(2) 
then the determination of whether an item or service billed by the 
replacement co-provider or co-facility is eligible for dispute 
resolution is based on whether the total billed charges for the 
replacement co-provider or co-facility are substantially in excess of 
the total expected charges included in the good faith estimate provided 
by the replacement co-provider or co-facility.
    HHS is of the view that had the convening provider known that the 
items or services from these particular co-providers or co-facilities 
would be needed, they would have been included on the good faith 
estimate. Therefore, HHS is of the view that such an approach for an 
item or service billed by a replacement co-provider or co-facility is 
necessary and appropriate to ensure such item or service is eligible 
for dispute resolution if the total billed charges are substantially in 
excess of the total expected charges in the good faith estimate even if 
the billing provider or facility did not provide the original estimate 
of expected charges in the good faith estimate. HHS acknowledges the 
challenges these requirements impose on providers and facilities, and 
the potential disincentive that such a requirement could have on a 
provider's or facility's willingness to provide an item or service 
under such circumstances given the patient-provider dispute resolution 
process, at 45 CFR 149.620, uses the expected charges contained in the 
good faith estimate to determine the eligibility of an item or service 
for patient-provider dispute resolution. However, HHS is of the view 
that such requirements are necessary for the intended consumer 
protections regarding surprise medical bills, and that, without such a 
requirement, an uninsured (or self-pay) individual may be unable to 
avail themselves of the patient-provider dispute resolution process in 
these circumstances. HHS also recognizes that these particular 
situations may be more complex for an uninsured (or self-pay) 
individual to determine eligibility for dispute resolution. HHS seeks 
comment

[[Page 56029]]

on the approach for eligibility in cases where the co-provider or co-
facility has been replaced with a different co-provider or co-facility, 
comments on whether there are other complex situations where 
clarification would be helpful, and the feasibility of such an approach 
to eligibility, as well as comments on alternative approaches.
    HHS considered whether to base eligibility for patient-provider 
dispute resolution on whether an individual item or service listed on a 
good faith estimate is billed an amount substantially in excess of the 
expected charge for the item or service. However, HHS is of the view 
that basing the eligibility for patient-provider dispute resolution on 
each individual item or service would add complexity as each item or 
service listed on the good faith estimate would need to be assessed 
separately for eligibility. Additionally, by basing the eligibility for 
patient-provider dispute resolution on an individual item or service, 
providers and facilities could potentially avoid dispute resolution by 
ensuring that no single billed charge exceeds the estimate provided on 
the good faith estimate by more than the substantially in excess 
threshold, even though the total of all billed charges for a provider 
or facility might substantially exceed the total expected charges in 
the good faith estimate. As a result, to fully protect the uninsured 
(or self-pay) individual, the individual items and services would need 
to be totaled by provider or facility, with the total billed charges by 
provider or facility subject to the substantially in excess standard. 
HHS is of the view that, because the uninsured (or self-pay) individual 
understood the items or services to most likely cost the amount listed 
in the good faith estimate with respect to each provider or facility, 
focusing on the total billed charges by each provider or facility 
ensures that patient-provider dispute resolution is available when the 
total billed charges for each provider or facility substantially 
exceeds the amount that the individual expects to pay.
    HHS also considered basing the eligibility on the total billed 
charges for all items or services and all providers or facilities 
listed on the good faith estimate. However such an approach would be 
significantly more complex given that the good faith estimate could 
consist of estimates from multiple providers and facilities who would 
bill the uninsured (or self-pay) individual separately. It could also 
potentially increase the burden on the uninsured (or-self pay) 
individual who would likely need to submit multiple bills from multiple 
providers or facilities. Additionally, such an approach could require a 
provider or facility to respond to a notice requesting additional 
documentation from an SDR entity due to the billing of other providers, 
even when the provider or facility did not bill an uninsured (or self-
pay) individual an amount substantially in excess of the good faith 
estimate.
    As discussed in section VI.A.2 of this preamble, these interim 
final rules define expected charges, for an item or service, as, the 
cash pay rate or rate established by a provider or facility for an 
uninsured (or self-pay) individual, reflecting any discounts for such 
individuals, where the good faith estimate is being provided to an 
uninsured (or self-pay) individual; or the amount the provider or 
facility would expect to charge if the provider or facility intended to 
bill a plan or issuer directly for such item or service when the good 
faith estimate is being furnished to a plan or issuer. Therefore, HHS 
would anticipate that the expected charges in the good faith estimate 
include applicable discounts and rates the provider or facility would 
ultimately charge an uninsured (or self-pay) individual rather than a 
standard list price or chargemaster rate. However, HHS remains 
concerned about the potential incentives for providers and facilities 
to inflate good faith estimates, for example, by overestimating the 
costs for items or services, providing a higher list price (or 
chargemaster rate) rather than the price the uninsured (or self-pay) 
individual would be expected to pay when accounting for any discounts, 
upcoding to a more expensive service, or adding additional unnecessary 
services which could lead to higher good faith estimates overall and 
could discourage uninsured (or self-pay) individuals from obtaining 
needed care. Furthermore, HHS is also concerned that providers or 
facilities may interpret an individual's decision to seek care after 
receiving the good faith estimate as their ability to pay the expected 
charges and therefore be disincentivized to offer the uninsured (or 
self-pay) individuals with charity care or discounted rates. HHS 
acknowledges that the availability of the patient-provider dispute 
resolution process may lead providers or facilities to estimate prices 
higher than they otherwise would have. However, HHS is very concerned 
that a provider or facility may increase the good faith estimate amount 
specifically to circumvent the ability of the uninsured (or self-pay) 
individual to access the patient-provider dispute resolution process, 
resulting in uninsured (or self-pay) individuals being charged higher 
prices and as a result the uninsured (or self-pay) individual foregoing 
needed care due to concerns over the potential costs. Additionally, 
this behavior could potentially lead to a situation where an uninsured 
(or self-pay) individual ultimately receives an inflated good faith 
estimate, but after receiving treatment is billed an amount higher than 
the good faith estimate yet less than the substantially in excess 
threshold, and is therefore unable to access dispute resolution due to 
the expected charges in the good faith estimate being overestimated. 
HHS acknowledges that an uninsured (or self-pay) individual may not 
necessarily know if a good faith estimate is inflated. However, as 
discussed in section VI.A.4 of this preamble, the good faith estimate 
will provide an itemized list of the expected items or services in 
advance, including the applicable diagnosis codes, expected service 
codes, and expected charges associated with each listed item or 
service. HHS is of the view that this will provide needed transparency 
for uninsured (or self-pay) individuals about the items or services 
they expect to be provided and the estimated costs with which they can 
compare with good faith estimates from other providers or through price 
transparency information such as the Hospital Price Transparency 
requirements described in 45 CFR part 180. HHS seeks comment on what 
other resources are available to assist individuals in determining the 
reasonableness of the good faith estimates they receive, particularly 
those who are uninsured (or self-pay) and with low health literacy. HHS 
also seeks comments on ways to raise awareness of these resources and 
on other resources that could be utilized by uninsured (or self-pay) 
individuals.
    HHS notes that a provider or facility intentionally providing 
expected charges they know to be incomplete or inaccurate in the good 
faith estimate could violate the requirements in PHS Act section 2799B-
6, which requires that the estimates being provided be good faith 
estimates, and thus could be subject to enforcement actions under PHS 
Act section 2799B-4. HHS is of the view that it is important for an 
uninsured (or self-pay) individuals to be able to file complaints 
regarding a provider or facility who they believe is not complying with 
the good faith estimate requirements and patient-provider dispute 
resolution process requirements, such as in cases where an individual 
believes a provider or facility is inflating the good faith estimate.

[[Page 56030]]

Therefore, HHS is amending the regulations at 45 CFR 149.450 to expand 
the scope to include subpart G of part 149, which includes 45 CFR 
149.610 and 45 CFR 149.620, among the provisions for which HHS can 
receive and resolve complaints concerning a provider's or facility's 
failure to meet the specified requirements. HHS seeks comment on this 
approach.
    HHS also considered whether there should be an additional backstop 
that would allow an uninsured (or self-pay) individual to access 
patient-process dispute resolution based on allegations that the 
provider or facility willfully overestimated the expected charges in 
the good faith estimate in order to avoid dispute resolution. Under 
such an approach, the good faith estimate would be reviewed to ensure 
that the good faith estimate reasonably reflect only the expected 
charges for the item or service, and that the good faith estimate did 
not include items or services extraneous to those that were reasonably 
expected to be provided in conjunction with such scheduled item or 
service. If HHS were to determine that such requirements had not been 
met, the uninsured (or self-pay) individual would be deemed eligible to 
initiate the patient-provider dispute resolution process for such items 
or services. However, these interim final rules do not include such an 
approach as HHS was concerned this approach would add significantly 
more complexity to the patient-provider dispute resolution process. HHS 
seeks comment on this potential approach of allowing uninsured (or 
self-pay) individuals to initiate dispute resolution for good faith 
estimates they believe to have been overinflated in order for providers 
and facilities to avoid dispute resolution.
    As noted elsewhere in this preamble, with regards to an item or 
service furnished by co-providers and co-facilities, providers and 
facilities subject to these interim final rules may need additional 
implementation time to develop appropriate communication channels that 
may not yet exist among various co-providers or co-facilities. As 
stated in section VI.A.7 of this preamble, with respect to good faith 
estimates provided to uninsured (or self-pay) individuals on or after 
January 1, 2022 through December 31, 2022, HHS will exercise its 
enforcement discretion in situations where the good faith estimate does 
not include expected charges for items and services from a co-provider 
or co-facility. During this period, HHS encourages convening providers 
and facilities to include a range of expected charges for such items 
and services during the period of care. HHS understands that it may 
take time for providers and facilities to develop systems and processes 
for receiving and providing the required information regarding items 
and services provided by co-providers and co-facilities. HHS is of the 
view that without having such processes in place, co-providers and co-
facilities who provide items or services may be subjected to patient-
provider dispute resolution in situations where the co-providers or co-
facilities were unable to provide complete and accurate pricing 
information to the convening provider or facility, and as a result 
would not provide sufficient detail to provide accurate good faith 
estimates. As a result, during the period of enforcement discretion, 
further discussed in section VI.A.7 of this preamble, items or services 
to be provided by a co-provider or co-facility that appear on the good 
faith estimate that do not include an estimate of expected charges or 
that appear as a range of expected charges would not be eligible for 
the patient-provider dispute resolution process. However, HHS 
emphasizes that this particular application for patient-provider 
dispute resolution eligibility would apply only in 2022 to allow 
additional time for the convening provider and convening facility to 
build the necessary systems and processes to receive accurate estimates 
from co-providers and co-facilities. HHS notes, that nothing prevents a 
co-provider or co-facility from furnishing the information as required 
in 45 CFR 149.610 before December 31, 2022, and under such 
circumstances, a co-provider or co-facility must comply with the 
patient-provider dispute resolution requirements in 45 CFR 149.620. 
Additionally, nothing would prevent the uninsured (or self-pay) 
individual from separately requesting a good faith estimate directly 
from the co-provider or co-facility in which case the patient-provider 
dispute resolution requirements in 45 CFR 149.620 would apply. HHS 
seeks comment on the approach for eligibility for the patient-provider 
dispute resolution process, including the feasibility of such approach, 
including the approach for eligibility for co-providers and co-
facilities in 2022, as well as comment on alternative approaches to 
increase consumer protections against unexpected medical bills from co-
providers and co-facilities during 2022.
    HHS also recognizes that uninsured (or self-pay) individuals in 
underserved and racial/ethnic minority communities, including 
individuals with vision, hearing, or language limitations, individuals 
with limited English proficiency, lesbian, gay, bisexual, transgender, 
and queer (LGBTQ+) individuals, and persons with health literacy needs, 
may face additional barriers to paying for high unexpected health care 
costs, understanding their rights related to good faith estimates, 
patient-provider dispute resolution, and how and when to initiate the 
dispute resolution process. HHS seeks comment from underserved and 
racial/ethnic minority communities on additional barriers individuals 
from these communities may face in understanding and exercising their 
rights related to these topics, and how to address them. HHS also seeks 
feedback on outreach and education activities, efforts, and resources 
available for underserved and racial/ethnic minority communities, 
including individuals with vision, hearing, or language limitations, 
individuals with limited English proficiency, lesbian, gay, bisexual, 
transgender, and queer (LGBTQ+) individuals, and persons with health 
literacy needs, to help ensure that these rights and tools are 
available, accessible, and understood such that they can be used 
equitably by all uninsured (or self-pay) individuals in appropriate 
circumstances. HHS also recognizes that groups such as CAPs and legal 
aid organizations play an important role in helping consumers, 
particularly those in underserved and racial/ethnic minority 
communities, including individuals with vision, hearing, or language 
limitations; individuals with limited English proficiency; and persons 
with health literacy needs, with complex heath care issues, which may 
also include assistance with the patient-provider dispute resolution 
process. HHS seeks comment on how to best to support the efforts of 
these organizations in assisting uninsured (or self-pay) individuals 
throughout the patient-provider dispute resolution process.
4. Initiation of Patient-Provider Dispute Resolution
    PHS Act section 2799B-7 requires patient-provider dispute 
resolution be available when an uninsured (or self-pay) individual is 
billed by a provider or facility for items or services in an amount 
that is ``substantially in excess'' of the expected charges in the good 
faith estimate for the provider or facility.
    HHS is specifying under 45 CFR 149.620(c) that when an uninsured 
(or self-pay) individual is billed for items or services where the 
total billed charges for a provider or facility is substantially in 
excess of the total expected charges in the good faith estimate for the

[[Page 56031]]

provider or facility, the uninsured (or self-pay) individual or their 
authorized representative (excluding any providers or facilities 
directly represented in the good faith estimate, providers associated 
with such providers or facilities, or non-clinical staff associated 
with such providers or facilities), may submit a notification 
(initiation notice) to the Secretary of HHS to initiate the patient-
provider dispute resolution process. HHS is of the view that a provider 
should generally not be permitted to represent the uninsured (or self-
pay) individual in dispute resolution for items or services where the 
provider was represented on the good faith estimate, even if the 
provider would not be a party to the dispute. HHS is of the view that 
there is a likelihood of an inherent financial or professional conflict 
of interest. These same concerns extend to employees of the facility at 
which the items or services are furnished. However, HHS acknowledges 
that many providers would generally not be inclined to assist the 
uninsured (or self-pay) individuals with initiating a dispute 
resolution even without this restriction. HHS further clarifies that 
providers may serve as authorized representatives for uninsured (or 
self-pay) individuals, provided they do not meet the previously 
described exclusion criteria. HHS also clarifies that CAPs and legal 
aid organizations can also serve as authorized representatives for the 
purpose of the patient-provider dispute resolution process as such 
organizations may have experience assisting consumers with billing 
issues. Additionally, all materials created for the patient-provider 
dispute resolution process, including the Federal IDR portal, will be 
compliant with the language access requirements of section 508 of the 
Rehabilitation Act of 1973 to meet accessibility needs.\95\ HHS seeks 
comment on what additional supports are necessary for community 
organizations, such as CAPs and legal aid organizations, to assist 
uninsured (or self-pay) individuals with the dispute resolution 
process. Providers and facilities are also required to comply with 
other state and Federal laws regarding language access, to the extent 
applicable. HHS reminds providers and facilities that are recipients of 
Federal financial assistance that they must comply with Federal civil 
rights laws that prohibit discrimination. These laws may include 
Section 1557 of the Patient Protection and Affordable Care Act, Title 
VI of the Civil Rights Act of 1964, and Section 504 of the 
Rehabilitation Act of 1973, as applicable. Section 1557 of the Patient 
Protection and Affordable Care Act and Title VI of the Civil Rights Act 
of 1964 require covered entities to take reasonable steps to ensure 
meaningful access for individuals with limited English proficiency, 
which may include provision of language assistance services, such as 
providing qualified interpreters or written translation of written good 
faith estimates in paper or electronic form into languages other than 
English. When language assistance services are provided, they must be 
provided free of charge and be accurate and timely. Section 1557 of the 
Affordable Care Act and Section 504 of the Rehabilitation Act of 1973 
require covered entities to take appropriate steps to ensure effective 
communication with individuals with disabilities, including provision 
of appropriate auxiliary aids and services in a timely manner and free 
of charge 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. HHS also seeks comment 
on what additional supports are necessary for persons in and 
representatives of minority and underserved communities, including 
those with limited English proficiency, those with disabilities who 
require information in alternate and accessible formats, and 
stakeholders who serve such communities.
---------------------------------------------------------------------------

    \95\ For 508 standards, see the US Access Board's final rule at: 
https://www.federalregister.gov/documents/2017/01/18/2017-00395/information-and-communication-technology-ict-standards-and-guidelines; see also Information and Communication Technology 
Revised 508 Standards and 255 Guidelines, U.S. Access Board, https://www.access-board.gov/ict/ (last visited Sept. 10, 2021).
---------------------------------------------------------------------------

    The initiation notice must be submitted to the Secretary of HHS, 
and postmarked within 120 calendar days of receiving the initial bill 
containing charges for the item or service that is substantially in 
excess of the expected charges in the good faith estimate, for the 
provider or facility. HHS is specifying calendar days instead of 
business days in this instance, because it is HHS' experience in 
administering other consumer-facing programs such as the Federally 
Facilitated Marketplace, that consumers have an easier time calculating 
and responding to deadlines that are measured by calendar days rather 
than business days. HHS considered whether to specify a timeframe 
shorter than 120 calendar days. However, HHS is concerned that 
requiring the initiation notice to be submitted in less than 120 
calendar days would not provide sufficient time for an uninsured (or 
self-pay) individual to collect and submit the required information. 
HHS also considered a timeframe greater than 120 calendar days, or no 
time limit; but HHS is of the view that due to the requirement, as 
discussed later in this section, that once the patient-provider dispute 
resolution process has been initiated, a provider or facility must not 
move the bill for the disputed item or service into collection or 
threaten to do so, or if the bill has already moved into collection, 
the provider or facility should cease collection efforts, as well as 
the requirement that the provider or facility suspend the accrual of 
any late fees on unpaid bill amounts until after the dispute resolution 
process has concluded, providing for a longer timeframe could increase 
uncertainty for a provider or facility over whether an uninsured (or 
self-pay) individual will file a dispute resolution request. As a 
result, HHS is of the view that having a clear timeframe with which an 
uninsured (or self-pay) individual can initiate a dispute resolution 
request is both necessary and appropriate. HHS seeks comment on the 
appropriateness of allowing individuals 120 calendar days to initiate 
the dispute resolution process, and whether more or less time should be 
allowed for an uninsured (or self-pay) individual to initiate dispute 
resolution, or whether there should not be a time limit at all.
    The initiation notice may be submitted through the Federal IDR 
portal, electronically, or on paper, in a form and manner specified by 
the Secretary of HHS. The initiation notice must include: (1) 
Information sufficient to identify the items or services under dispute, 
including the date of service or date the item was provided and a 
description of the item or service; (2) a copy of the bill for the 
items and services under dispute (the copy can be a photocopy or an 
electronic image so long as the document is readable); (3) a copy of 
the good faith estimate for the items and services under dispute (the 
copy can be a photocopy or an electronic image so long as the document 
is readable); (4) the contact information of the parties involved, 
including name, email address, phone number and mailing address; (5) 
the state where the items or services in dispute were furnished; and 
(6) the uninsured (or self-pay) individual's

[[Page 56032]]

communication preference, through the Federal IDR Portal, or electronic 
or paper mail.
    In addition to the required information, the uninsured (or self-
pay) individual must submit with the initiation notice an 
administrative fee to the SDR entity as described in 45 CFR 149.620(g) 
and section VI.B.8 of this preamble. The amount of the administrative 
fee, as well as the manner in which it must be submitted, will be 
clarified in guidance by HHS. PHS Act section 2799B-7(c) contemplates 
that the uninsured (or self-pay) individual pay an administrative fee, 
and that such fee should be set in a manner not to create a barrier to 
access the process. While HHS acknowledges that requiring an uninsured 
(or self-pay) individual to pay an administrative fee upfront may 
discourage some individuals from initiating the patient-provider 
dispute resolution process, HHS is of the view that requiring a nominal 
upfront administrative fee will help prevent the submission of 
unnecessary claims to the patient-provider dispute resolution process 
and ensure that dispute resolution resources are available in necessary 
cases. HHS also notes that as further discussed in section VI.B.8 of 
this preamble, if the uninsured (or self-pay) individual prevails in 
the dispute resolution process, the SDR entity will adjust the final 
payment determination amount to include a reduction in the final 
payment determination amount that accounts for the uninsured (or self-
pay) individual's administrative fee payment, thus allowing the 
uninsured (or self-pay) individual to recoup the administrative fee 
paid.
    The date of initiation of the patient-provider dispute resolution 
process will be the date of receipt of such initiation notice. HHS will 
provide additional information in guidance on how the uninsured (or 
self-pay) individual can submit the initiation notice, including 
necessary steps for the process and a standard notification form to 
ensure the uninsured (or self-pay) individual is able to include all 
the necessary information to initiate the dispute resolution process. 
In addition to the guidance, uninsured individuals will be informed of 
how to initiate the patient-provider dispute resolution process through 
information that providers and facilities must include on the good 
faith estimates, as discussed in section VI.A.4 of this preamble. HHS 
also intends to conduct outreach and education to consumer advocates, 
CAPs, legal aid organizations and other stakeholders to assist 
consumers through this process.
    HHS expects to leverage the Federal IDR portal described in section 
III of this preamble to facilitate the operation of the patient-
provider dispute resolution process. The Federal IDR portal will allow 
uninsured (or self-pay) individuals or their authorized representatives 
to submit the initiation notices, upload documentation, receive notices 
from HHS and the SDR entity, upload additional supporting 
documentation, and view the SDR entity's payment determination. HHS 
expects that providers and facilities will also utilize the Federal IDR 
portal to receive notices from HHS and the SDR entity, upload 
documentation, upload additional supporting documentation, and view the 
SDR entity's determination. HHS intends for the SDR entity to utilize 
the Federal IDR portal in all cases, as HHS is of the view that 
utilizing the Federal IDR portal to facilitate the patient-provider 
dispute resolution process is preferable and will allow for more 
efficient operation of the process, faster and easier receipt of 
notices and submission of documentation, and would allow all the 
relevant information on a specific patient-provider dispute resolution 
case to be accessible in one place. HHS is aware that an individual or 
a provider or facility may not be able to utilize the Federal IDR 
portal depending on various factors and as a result the individual, 
provider, or facility may choose to communicate with HHS or the SDR 
entity using other methods, including electronic or paper mail. 
Additionally, HHS recognizes that minority and underserved communities, 
including those with limited English proficiency and those with 
disabilities may prefer information in alternate and accessible formats 
and may not be best served by using the Federal IDR portal. HHS intends 
to put in place processes to ensure accessibility of the system for 
these communities, and HHS seeks comments on this approach.
    Once the initiation notice has been received, HHS will select an 
SDR entity according to the process further described in section VI.B.6 
of this preamble. After the SDR entity has been selected, the SDR 
entity will provide notice to the uninsured (or self-pay) individual 
and the provider or facility through the Federal IDR portal, or 
electronic or paper mail, that a patient-provider dispute resolution 
initiation request has been received and is under review, the SDR 
entity will also include information identifying the item or service 
under dispute, and the date the initiation notice was received. The SDR 
entity will also notify the uninsured (or self-pay) individual, and the 
provider or facility, that while the dispute resolution process is 
pending, the provider or facility must not move bills for the disputed 
items or services into collection or threaten to do so, or if the bill 
has already moved into collection, the provider or facility should 
cease collection efforts until the dispute has been settled. The 
provider or facility must also suspend the accrual of any late fees on 
unpaid bill amounts until after the dispute resolution process has 
concluded. Additionally, the provider or facility must not take or 
threaten to take retributive action against an uninsured (or self-pay) 
individual for utilizing the patient-provider dispute resolution 
process. The notice will also provide information to the uninsured (or 
self-pay) individual about the availability of consumer assistance 
resources that can assist them with the dispute.
    The SDR entity will review the initiation notice submitted by the 
uninsured (or self-pay) individual to ensure that the disputed items or 
services meet the eligibility criteria for the patient-provider dispute 
resolution process and that the initiation notice contains all the 
required information. The SDR entity will notify the uninsured (or 
self-pay) individual electronically or by mail, depending on the 
individual's preference, of the outcome of the review including in 
cases where the initiation notice is determined to be incomplete or the 
item or service is determined ineligible for dispute resolution, in 
which case the uninsured (or self-pay) individual would be provided 21 
calendar days to submit any missing information or provide supplemental 
information to demonstrate the item or service is eligible for the 
dispute resolution process. To assist consumers with understanding the 
timeline to submit the supplemental information, such insufficiency 
notice will provide a date by which the additional information must be 
postmarked or submitted electronically. HHS is of the view that 
providing the uninsured (or self-pay) individual with 21 calendar days 
is appropriate as it provides consumers with an opportunity to resolve 
any deficiencies in the initiation notice and access the dispute 
resolution process if eligible. If the insufficiency notice is not made 
available to an individual in a format that is accessible to 
individuals with disabilities or with low-English proficiency within 14 
calendar days of such a request from the individual, a 14-calendar day 
extension will be granted to allow sufficient time for document

[[Page 56033]]

submission, so that the individual, in this situation, will have a 
total of 35 calendar days to submit supplemental information. HHS also 
considered a timeframe greater than 21 calendar days, or no time limit, 
however, HHS is concerned that due to the requirement that a provider 
or facility must not move the bill for the disputed item or service 
into collection or threaten to do so, or if the bill has already moved 
into collection, the provider or facility should cease collection 
efforts, and the provider or facility suspend the accrual of any late 
fees on unpaid bill amounts until after the dispute resolution process 
has concluded, providing for a longer timeframe could increase burdens 
and uncertainty for a provider or facility. The 21-calendar-day 
timeframe is also consistent with external review processes in some 
states.\96\ HHS seeks comments on whether 21 calendar days is a 
sufficient timeframe for uninsured (or self-pay) individuals to submit 
additional documentation through the mail or electronically, or whether 
a different timeframe should be considered.
---------------------------------------------------------------------------

    \96\ Some state processes have a 15-business day time frame 
which would generally translate to 21 calendar days. See e.g., 
https://insurance.mo.gov/consumers/health/externalreviewprocess.php.
---------------------------------------------------------------------------

    Once the SDR entity has determined that an item or service is 
eligible for dispute resolution, the SDR entity must provide 
notification of the determination to both parties (the uninsured (or 
self-pay) individual and the provider or facility) through the Federal 
IDR portal, or electronic or paper mail, and must request that the 
provider or facility provide certain information within 10 business 
days as described in 45 CFR 149.620(d) and in section VI.B.7.ii of this 
preamble.
    While the dispute resolution process is pending, the provider or 
facility must not move bills for the disputed items or services into 
collection or threaten to do so until after dispute resolution process 
has concluded, or if the bill has already moved into collection, the 
provider or facility should cease collection efforts until the dispute 
has been settled. The provider or facility must also suspend the 
accrual of any late fees on unpaid bill amounts until after the dispute 
resolution process has concluded. PHS Act section 2799B-7 established a 
process that would provide a mechanism for an uninsured (or self-pay) 
individual who is billed an amount for an item or service that is 
substantially in excess of the expected charges in the good faith 
estimate to seek a determination on the amount to be paid. If the 
provider or facility were to move the bill, if fully or partially 
unpaid, to collection or to accrue late fees prior to the SDR entity 
determining a payment amount, the consumer protections intended in PHS 
Act section 2799B-7 would be undermined. In order for an uninsured (or 
self-pay) individual to avoid moving the bill into collection or the 
accrual of late fees, the uninsured (or self-pay) individual would 
effectively be required to pay the bill in full prior to determination 
and seek a refund from the provider or facility if the individual 
prevails. HHS is of the view that through the patient-provider dispute 
resolution process, the uninsured (or self-pay) individual is actively 
working in good faith to resolve a payment dispute and should not be 
effectively punished for utilizing such process by the accrual of late 
fees or movement of the bill into collections. HHS is of the view that 
use of its general rulemaking authority to establish such requirements 
is necessary and appropriate in order to implement the provisions of 
PHS Act section 2799B-7 in a manner that furthers the statutory intent 
to protect consumers by ensuring that uninsured (or self-pay) 
individuals can use the patient-provider dispute resolution process 
without being penalized for utilizing such process or being required to 
pay the billed charges upfront to avoid late fees or collections 
activities. HHS seeks comment on this approach of disallowing the 
movement of a bill into collections and the suspension of the accrual 
of late fees.
    In addition, HHS is using its general rulemaking authority to 
establish requirements under 45 CFR 149.620 to prohibit a provider or 
facility from taking or threatening to take any retributive action 
against an uninsured (or self-pay) individual for utilizing the 
patient-provider dispute resolution process to seek resolution for a 
disputed item or service. If a provider or facility were to take or 
threaten to take retributive action against an uninsured (or self-pay) 
individual, such action could create a chilling effect for the 
uninsured (or self-pay) individual to utilize the dispute resolution 
process, which would undermine the consumer protections intended in PHS 
Act section 2799B-7. As a result, HHS is of the view that it is 
necessary and appropriate to require a provider or facility to not take 
or threaten to take any retributive action against an uninsured (or 
self-pay) individual for utilizing the patient-provider dispute 
resolution process.
5. Certification of Selected Dispute Resolution Entities
    PHS Act section 2799B-7 requires the Secretary of HHS to recognize 
or establish a process to contract with and certify entities to resolve 
payment disputes between uninsured (or self-pay) individuals. 
Additionally, PHS Act section 2799B-7 requires entities certified under 
this process to satisfy, at a minimum, the criteria in PHS Act section 
2799A-1(c). HHS intends to contract with and certify only that number 
of entities it believes will be necessary to timely resolve the volume 
of patient-provider disputes, rather than pursue an open process under 
which all entities who meet IDR entity requirements will be certified 
to resolve patient-provider payment disputes. Moreover, HHS will 
compensate SDR entities directly for their services under a contract 
that complies with the Federal Acquisition Regulation (FAR) as further 
implemented or supplemented by the HHS Acquisition Regulation.\97\ 
Through this contract process, HHS will assess the dispute resolution 
entity for compliance with all applicable SDR entity certification 
requirements. HHS is of the view that this approach will reduce the 
overall cost of the program, which is funded primarily through 
appropriations to HHS, reduce the administrative burden associated with 
collecting fees from a large number of certified entities who may have 
differing fee schedules, and will allow for HHS to control the cost of 
the program to ensure that low-income individuals are able to access 
the patient-provider dispute resolution process. For the first year of 
the patient-provider dispute resolution program under PHS Act section 
2799B-7, HHS anticipates contracting with between 1 and 3 SDR entities. 
HHS is of the view that 1 to 3 SDR entities will be sufficient in the 
first year to conduct the dispute resolution process for the 
anticipated number of cases outlined in the Economic Impact and 
Paperwork Burden section of these interim final rules. It will also 
ensure through the contracting process that the volume estimates are 
tenable for the contracted SDR entities. Additionally, given the 
timeline required by statute to implement the patient-provider dispute 
resolution process and the timeline under which these rules will become 
effective, HHS is of the view that contracting with a limited number of 
entities may be necessary to ensure the timely launch of the 
program.\98\ HHS is of the view that attempting to procure

[[Page 56034]]

SDR entity services from more than 3 entities will increase the burden 
associated with certifying IDR entities for the Federal IDR process 
discussed in section III of this preamble and with contracting SDR 
entities for the patient-provider dispute resolution process, and will 
limit HHS' ability to effectively launch the programs in accordance 
with statutory deadlines. HHS also is of the view that contracting with 
more than 3 SDR entities in the first year will unsustainably increase 
the administrative burden associated with launching both programs, and 
may impose sufficient risk to cause delays in implementation.
---------------------------------------------------------------------------

    \97\ See 48 CFR, Chapter 3 (HHS-specific regulations governing 
federal acquisitions for services).
    \98\ See FAR 6.302-2 (allowing less than full and open 
competition where an agency's need for services is of an unusual and 
compelling urgency).
---------------------------------------------------------------------------

    For these reasons, HHS is of the view that contracting with a 
limited number of SDR entities is preferable to adopting an ``any 
willing provider'' model. Accordingly, through this contract process, 
HHS will assess an entity's compliance with the SDR entity 
certification requirements to ensure the entity satisfies the 
certification criteria discussed later in this section of the preamble.
    SDR entities will be assessed on whether they meet the applicable 
certification requirements during the contracting process with HHS and 
such process will be separate and distinct from the certification 
process applicable to IDR entities that will provide IDR services for 
providers, providers of air ambulance services, facilities, plans and 
issuers as required under 26 CFR 54.9816-8T and 54.9817-2T, 29 CFR 
2590.716-8 and 2590.717-2, and 45 CFR 149.510, and 45 CFR 149.520. 
Although an SDR entity may apply for certification as an IDR entity, 
SDR entities are not required to do so. However, consistent with the 
statutory requirement, SDR entities will be required to meet the same 
requirements as certified IDR entities, with a few exceptions outlined 
later in this section of this preamble. SDR entities will be required 
to report on those data elements from providers and facilities that HHS 
deems necessary to accurately describe and assess the administration of 
the patient-provider dispute resolution program. Therefore, the 
requirements laid out in section III.D.5 of this preamble will also 
apply to SDR entities as a condition of receiving a contract award from 
HHS for the patient-provider dispute resolution program.
    For example, PHS Act section 2799A-1(c)(4)(A)(v) requires a 
certified IDR entity to maintain the confidentiality of individually 
identifiable health information (IIHI) obtained in the course of 
conducting determinations. Under these interim final rules, HHS 
outlines certain standards related to confidentiality, including 
security, privacy, and breach notification requirements that apply to 
an IDR entity seeking certification. See section III.D.5 of this 
preamble for further discussion on the applicable confidentiality 
requirements. Under 45 CFR 149.620(d)(1), HHS specifies that an SDR 
entity must satisfy the Federal IDR entity certification criteria 
specified in 45 CFR 149.510(e), with a few exceptions specified in 45 
CFR 149.620(d)(2). As part of this requirement, an SDR entity must 
comply with all the confidentiality requirements that apply to 
certified IDR entities in 26 CFR 54.9816-8T(e)(2)(v), 29 CFR 2590.716-
8(e)(2)(v) and 45 CFR 149.510(e)(2)(v). Similarly, the definitions 
related to confidentiality in 45 CFR 149.510(a)(2) also apply for 45 
CFR 149.620. Therefore, the definitions for ``breach,'' ``individually 
identifiable health information (IIHI)'' and ``unsecured IIHI'' that 
apply for IDR entities also apply for SDR entities. HHS seeks comment 
on the confidentiality requirements for an SDR entity, including 
whether additional requirements should be considered.
    In addition, like IDR entities, SDR entities are required to comply 
with other state and Federal laws regarding language access, to the 
extent applicable. HHS reminds SDR entities that they, along with 
providers and facilities that are recipients of Federal financial 
assistance, must comply with Federal civil rights laws that prohibit 
discrimination. These laws include Section 1557 of the Patient 
Protection and Affordable Care Act, Title VI of the Civil Rights Act of 
1964, and Section 504 of the Rehabilitation Act of 1973. Section 1557 
of the Patient Protection and Affordable Care Act and title VI of the 
Civil Rights Act of 1964 require covered entities to take reasonable 
steps to ensure meaningful access to individuals with limited English 
proficiency, which may include provision of language assistance 
services, such as providing qualified interpreters or written 
translations in paper or electronic form into languages other than 
English. When language assistance services are provided, they must be 
provided free of charge and be accurate and timely. Section 1557 of the 
Patient Protection and Affordable Care Act and Section 504 of the 
Rehabilitation Act of 1973 require covered entities to take appropriate 
steps to ensure effective communication with individuals with 
disabilities, including provision of appropriate auxiliary aids and 
services in a timely manner and free of charge to the individual. 
Auxiliary aids and services may include sign language 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. HHS also seeks comment on what 
additional measures are necessary for persons in racial/ethnic minority 
and underserved communities, including those with limited English 
proficiency, those with disabilities who require information in 
alternate and accessible formats, lesbian, gay, bisexual, transgender, 
and queer (LGBTQ+) persons, and stakeholders who serve such 
communities.
    Unlike the process for certifying IDR entities, HHS intends to 
contract only with SDR entities that will be able to conduct patient-
provider dispute resolution in all applicable states where the patient-
provider dispute resolution process will apply. As such, SDR entities 
will need to submit information on their ability to operate nationwide 
through the contract process. Additionally, IDR entity fees that 
certified IDR entities will charge as the cost for providing dispute 
resolution services will not apply in the case of SDR entities, which 
will be paid for their services through contracts with HHS. Therefore, 
SDR entities will not be required to submit a fee schedule for batched 
and non-batched claims. Additionally, SDR entities will not be required 
to submit policies and procedures regarding holding IDR entity fees in 
a trust or escrow account, though they will still be required to submit 
policies and procedures regarding holding administrative fees and remit 
them to HHS in a manner specified by HHS.
    Additionally, an SDR entity must also submit a conflict-of-interest 
mitigation policy that will not apply to IDR entities. Given that HHS 
intends to contract with a limited number of SDR entities under this 
program, HHS is of the view that additional standards for conflict-of-
interest mitigation should apply to SDR entities, as there will likely 
be fewer entities available to conduct dispute resolution. Therefore, 
in addition to the requirement for certified IDR entities to submit 
policies and procedures for the ongoing auditing, mitigation, and 
reporting of conflicts of interest within their

[[Page 56035]]

organizations, SDR entities will be expected to include a mitigation 
plan for situations when no one in the entire organization will be able 
to conduct dispute resolution on a case due to an entity-level conflict 
of interest, which could include utilizing a subcontractor without a 
conflict of interest that meets SDR entity requirements to conduct the 
patient-provider dispute resolution for that case. Since there is a 
possibility that a single SDR entity will be contracted for this 
process, or that all available SDR entities indicate a conflict of 
interest that cannot be mitigated, HHS is of the view that additional 
requirements must be applied through these regulations and the 
contracting process to ensure that in the event that an entity-level 
conflict of interest occurs, SDR entities will be able to initiate 
strategies to fairly and impartially resolve disputes in the absence of 
another available SDR entity. Through the acquisition process, HHS will 
ensure compliance with FAR subpart 9.5 regarding organizational and 
consultant conflicts of interest in order to mitigate the potential for 
entity-level conflicts of interest that may preclude all available SDR 
entities from fairly and impartially resolving disputes.
    While details on expectations for documentation and review for 
certified IDR entities will come through guidance, similar details and 
documentation requests will be done through the acquisition process for 
SDR entities. As such, all requirements laid out in this section and 
the applicable requirements outlined in section III.D.5 of this 
preamble for certified IDR entities will be assessed through the 
Federal acquisition process to ensure SDR entities have sufficient 
expertise and capabilities to conduct dispute resolution cases for the 
patient-provider dispute resolution process.
    In subsequent years, case volume and other factors as necessary 
will be used by HHS to determine and adjust the number of contracted 
SDR entities needed for the patient-provider dispute resolution 
process. HHS is of the view that this approach will reduce the overall 
cost and administrative oversight burdens of the program, which is 
funded primarily through appropriations to HHS. Since contracting will 
allow HHS to negotiate lower rates for conducting dispute resolution 
cases with a limited number of entities, rather than paying set fee 
schedules associated with each SDR entity as in the Federal IDR 
process, HHS will be able to reduce both costs to HHS and 
administrative burdens associated with collecting varying fees from a 
large number of entities. HHS also is of the view that this approach 
will allow HHS to control the fees assessed to uninsured (or self-pay) 
individuals entering the patient-provider dispute resolution process to 
ensure that low-income individuals can participate in the process.
    HHS seeks comment on the SDR entity contracting process, including 
the applicable certification requirements, specifically as to whether 
these are the appropriate standards regarding the patient-provider 
dispute resolution process, if additional standards should be applied, 
and if so, what those standards should be.
6. Selection of an SDR Entity for Patient-Provider Dispute Resolution
    PHS Act section 2799B-7 requires the Secretary of HHS to provide a 
method to select a patient-provider dispute resolution entity to 
conduct individual dispute resolutions between patients and providers. 
As described more fully in section VI.B.5 of this preamble, during the 
first year of the program, HHS expects to contract with between 1 to 3 
SDR entities to conduct patient-provider dispute resolutions.
    Similar to the IDR process and for the same reasons described in 
section III.B.1 of this preamble, the general conflict-of-interest 
standards laid out in section III.B.1 of this preamble will also apply 
to SDR entities contracted by HHS for the patient-provider dispute 
resolution process. These standards include the mandatory period which 
prohibits personnel who have been a party to the payment determination 
being disputed, or who were employees or agents of such a party within 
1 year immediately preceding dispute resolution assignment, from being 
assigned to a case.
    As discussed in section VI.B.5 of this preamble, SDR entities will 
also be required to have in place an approved mitigation plan for 
addressing conflicts of interest. For example, such a mitigation plan 
could include processes under which any specific dispute resolution 
personnel who presents a conflict of interest could be walled off from 
having any role in or knowledge of the relevant payment dispute. To 
address conflicts of interest that exist at the entity level, the SDR 
entity could design a plan under which it would subcontract payment 
disputes to a different entity that meets SDR entity requirements. As 
part of the contract process, and as discussed in section VI.B.5 of 
this preamble, the SDR entity must submit specific mitigation plans 
such as proof of a subcontractor who meets the SDR entity requirements 
for HHS to assess, and approve as part of the acquisition process, and 
in accordance with the conflict-of-interest requirements set forth in 
FAR subpart 9.5. HHS is of the view that this approach will 
sufficiently mitigate the potential that conflicts of interest that 
exist to the extent that a case may not able to be resolved fairly and 
impartially, because having a subcontractor provides an avenue for 
cases to be sent for dispute resolution when the SDR entity has a 
conflict of interest. HHS also is of the view that ensuring that 
processes are in place to identify and address potential conflicts of 
interest is important to ensure impartiality in payment determinations 
and the timely and efficient resolution of disputes.
    Upon receiving a request to initiate patient-provider dispute 
resolution case from an uninsured (or self-pay) individual, HHS will 
select 1 of the contracted SDR entities to serve as the entity to 
conduct the dispute resolution process. Selection of an SDR entity that 
will resolve a particular dispute will occur in round robin fashion to 
ensure equal allocation of cases to SDR entities, unless conflicts of 
interest arise. In the event that the assigned SDR entity has a 
conflict of interest that cannot be sufficiently mitigated by applying 
the SDR entity's conflicts mitigation plan, the next SDR entity in line 
will be selected. HHS is of the view that this approach will help 
ensure the selection process runs smoothly, supports the timely 
resolution of disputes consistent with applicable regulations, and that 
SDR entity caseloads are allocated efficiently. Upon receiving an 
assignment from the Secretary of HHS to make a determination for an 
item or service, the SDR entity shall ensure that no conflict of 
interest exists, and in such case no conflict exists, the SDR entity 
shall notify the uninsured (or self-pay) individual and the provider or 
facility of the selection of the SDR entity as described in section 
VI.B.4 of this preamble.
    In the event that an SDR entity attests that a conflict of interest 
exists in relation to an assigned payment dispute, the SDR entity must 
notify the Secretary of HHS no later than 3 business days following 
selection. Additionally, either party (the uninsured (or self-pay) 
individual, or the provider or facility) may attest that a conflict of 
interest exists in relation to the SDR entity assigned to a payment 
dispute, in which case the SDR entity must notify the Secretary of HHS 
no later than 3 business days following receipt of the attestation.
    In the event a conflict of interest exists, HHS will then 
automatically

[[Page 56036]]

select a different SDR entity from the remaining pool of contracted 
entities using a round robin approach. If no other contracted SDR 
entity, and no subcontracted entity, is able to provide the patient-
provider dispute resolution services due to conflicts of interest that 
cannot be sufficiently mitigated or any other reason, HHS may seek to 
contract with an additional SDR entity as needed, to conduct dispute 
resolution in this case. HHS recognizes that while the Department 
expects these particular situations to be very rare, contracting with 
an additional SDR entity could take time and would make meeting the 
required patient-provider dispute resolution timeframes challenging. 
HHS notes that, as discussed in section VI.B.10 of this preamble, the 
time periods specified in these interim final rules may be extended in 
the case of extenuating circumstances at HHS' discretion on a case-by-
case basis if the extension is necessary to address delays due to 
matters beyond the control of the parties or for good cause. In these 
rare cases, HHS anticipates that it may be appropriate to exercise such 
discretion if needed. For example, in the event that HHS needs to 
contract with an additional SDR entity, the time periods specified in 
this section may be extended at HHS' discretion to allow for HHS to 
contract with that SDR entity. HHS seeks comment on this approach, 
including comment on the feasibility of such approach and comment on 
alternative approaches HHS should consider. HHS also seeks comment on 
whether it is feasible or appropriate to seek assistance from the pool 
of certified IDR entities to provide patient-provider dispute 
resolution services in these circumstances.
    These interim final rules also define certain terms related to 
conflict-of-interest standards applicable to SDR entities certified and 
contracted to resolve patient-provider disputes. Such an approach to 
conflict of interest is similar to the approach taken by the Federal 
IDR process discussed in section III.D.5 of this preamble. HHS is of 
the view that maintaining consistent standards between the Federal IDR 
process and the patient-provider dispute resolution process is a 
straightforward approach and serves to minimize stakeholder confusion 
over what the applicable standard will be. In general, a ``conflict of 
interest'' means, with respect to a party to a payment determination, 
or SDR entity, a material relationship, status, or condition of the 
party, or SDR entity that impacts the ability of the SDR entity to make 
an unbiased and impartial payment determination. For purposes of the 
patient-provider dispute resolution process, a conflict of interest 
exists when an SDR entity is: A provider or a facility, an affiliate or 
a subsidiary of a provider or facility, or an affiliate or subsidiary 
of a professional or trade association representing a provider or 
facility. A conflict of interest also exists when an SDR entity, or any 
personnel assigned to a determination, has a material familial, 
financial, or professional relationship with a party to the payment 
determination being disputed, or with any officer, director, or 
management employee of the provider, the provider's group or practice 
association, or the facility that is a party to the dispute. HHS is of 
the view that these requirements are necessary to ensure that payment 
disputes between an uninsured (or self-pay) individual and a provider 
or facility are conducted by impartial third parties. HHS seeks comment 
on this approach, including the feasibility of such approach, and 
whether additional requirements related to conflict of interest should 
be considered.
7. Payment Determination for Patient-Provider Dispute Resolution
i. Determination of Payment Amount Through Settlement
    While the SDR entity payment determination is pending, HHS 
recognizes that the two parties to the patient-provider dispute 
resolution process (the uninsured (or self-pay) individual and the 
provider or facility) may agree to resolve the dispute by settling on a 
payment amount. Therefore, new 45 CFR 149.620(f)(1) states that at any 
point after the dispute resolution process has been initiated but 
before the date on which a determination is made by the SDR entity, the 
parties can settle the payment amount through either an offer of 
financial assistance or an offer to accept a lower amount, or an 
agreement by the uninsured (or self-pay) individual to pay the billed 
charges in full.
    In the event that the parties agree to settle on a payment amount, 
the provider or facility should notify the SDR entity through the 
Federal IDR Portal, electronically, or in paper form, as soon as 
possible, but no later than 3 business days after the date of the 
agreement. The settlement notification must contain at a minimum, the 
settlement amount, the date upon which settlement was reached, and 
documentation demonstrating that the provider or facility and uninsured 
(or self-pay) individual have agreed to the settlement. The settlement 
notice must also document that the provider or facility has applied a 
reduction to the uninsured (or self-pay) individual's settlement amount 
that is equal to at least half the amount of the administrative fee 
paid as discussed in section VI.B.8 of this preamble. Once the SDR 
entity receives the notification of the settlement, the SDR entity 
shall close the dispute resolution case as settled and the agreed upon 
payment amount will apply for the items or services.
    HHS also clarifies that payment of the billed charges (or a portion 
of the billed charges) by the uninsured (or self-pay) individual (or by 
another party on behalf of the uninsured (or self-pay) individual) does 
not demonstrate agreement by the uninsured (or self-pay) individual to 
settle at that amount or any other amount. For example, if the 
uninsured (or self-pay) individual has already made payment or entered 
into a payment plan and then chooses to enter dispute resolution, the 
fact that they previously paid, or agreed to pay, all or part of the 
billed charges may not be used by the provider or facility to prove 
that a settlement has been reached to avoid the patient-provider 
dispute resolution process.
    HHS is of the view that providing an opportunity for the uninsured 
(or self-pay) individual and the provider or facility to come to terms 
on a payment amount that is mutually agreeable for the parties involved 
is appropriate as it may help resolve payment disputes quickly without 
the need for a determination by an SDR entity. Such a process can also 
incentivize a provider or facility to offer to accept a lower amount or 
to provide financial assistance to the uninsured (or self-pay) 
individual. However, HHS clarifies that neither party (the uninsured 
(or self-pay) individual or the provider or facility) is required to 
negotiate a settlement for the billed charges, and the decision to 
enter into a settlement on the payment amount is optional. In cases 
where there is no settlement, the SDR entity will make a determination 
as discussed in section VI.B.7.iii of this preamble.
    HHS recognizes that to the extent that a provider or facility 
believes that a settlement may be more beneficial for them than the SDR 
entity determination, the provider or facility may be incentivized to 
seek a settlement. While such an outcome may be desirable in that it 
can lead to a quick resolution and could lead to provider or facility 
offering to accept a lower payment amount or other financial assistance 
to the uninsured (or self-pay) individual, HHS is concerned that the 
uninsured (or

[[Page 56037]]

self-pay) individual, particularly those without representation, would 
be at a disadvantage when negotiating with the provider or facility. 
HHS seeks comment on these concerns, including whether additional 
consumer protections should be considered, and ways HHS can increase an 
uninsured (or self-pay) individual's access to effective 
representation, through legal aid organizations or other groups.
ii. Determination of Payment Amount Through Patient-Provider Dispute 
Resolution
    As part of the SDR determination process, 45 CFR 149.620(f)(2) 
requires that the health care provider or health care facility must 
submit information to the SDR entity not later than 10 business days 
after the receipt of the notice from the SDR entity initiating the 
patient-provider dispute resolution process described in section 
VI.B.4. This information must include: (1) A copy of the good faith 
estimate provided to the uninsured (or self-pay) individual for the 
items or services under dispute (the copy can be a photocopy or an 
electronic image so long as the document is readable); (2) a copy of 
the billed charges provided to the uninsured (or self-pay) individual 
for items or services under dispute (the copy can be a photocopy or an 
electronic image so long as the document is readable); and (3) 
documentation demonstrating that the difference between the billed 
charges and the expected charges in the good faith estimate reflects 
the costs of a medically necessary item or service and is based on 
unforeseen circumstances that could not have reasonably been 
anticipated by the provider or facility when the good faith estimate 
was provided. While the statute does not specify what a provider or 
facility should provide to the SDR entity to inform the SDR entity's 
determination decision or how long a provider or facility should have 
to report such information, HHS is of the view that it is both 
necessary and appropriate to require the provider or facility to 
provide the copies of the bill and good faith estimate for the item or 
service in question as such information can be helpful for the SDR 
entity to verify the eligibility of the dispute in question. Although 
the uninsured (or self-pay) individual will provide a copy of the bill 
and good faith estimate, requiring the provider or facility to also 
provide the bill and good faith estimate will allow the SDR entity to 
verify the information in the bill and good faith estimate provided by 
the uninsured (or self-pay) individual and identify any potential 
discrepancies. HHS believes it is also necessary and appropriate to 
provide a means for a provider or facility to submit documentation or 
an explanation to support the billed charges, such as information 
related to the patient's relevant medical history that is necessary to 
demonstrate that the item or service is medically necessary and is 
based on unforeseen circumstances that could not have reasonably been 
anticipated by the provider or facility when the good faith estimate 
was provided. HHS is of the view that such documentation from the 
provider or facility would assist the SDR entity with making a fair 
assessment whether the billed charge is appropriate because otherwise 
the SDR entity would be unfamiliar with the facts that would allow the 
SDR entity to assess medical necessity, and whether the need for the 
items or services was foreseeable. The interim final rules require that 
this information be submitted within 10 business days, this time period 
is similar to the Federal IDR process requirements for submitting 
documentation to support a dispute resolution determination as outlined 
in PHS Act section 2799B-1. HHS is of the view that a 10-business-day 
time period is sufficient for a provider or facility to gather and 
submit the required information, as this information should be 
documented as part of the individual's patient record.
    Not later than 30 business days after receipt of the information 
from the provider described in section 45 CFR 149.620(f)(2)(i), the SDR 
entity must make a determination on the amount to be paid by such 
uninsured (or self-pay) individual taking into account the requirements 
described in section VI.B.7.iii of this preamble. The 30-business day 
timeframe is also similar to the requirement in the Federal IDR process 
in PHS Act section 2799A-1(c)(5) where not later than 30 business days 
after the selection of the certified IDR entity, the certified IDR 
entity must select one of the offers submitted by the plan or issuer 
and the provider or facility to be the out-of-network rate for the item 
or service. HHS is of the view that 30 business days should provide 
sufficient time for an SDR entity to review the submitted information 
and issue a determination. The SDR entity is required to assess the 
information submitted by the provider or facility according to the 
requirements described in 45 CFR 149.620(f)(3) and discussed in section 
VI.B.7.iii of this preamble.
iii. Requirements for Determination
    45 CFR 149.620(f)(3) sets forth the requirements for SDR entities 
in making payment determinations. As described in section VI.A.3 of 
this preamble, the itemized list of items or services in a good faith 
estimate must reflect the expected charges from the convening provider 
or facility and items and services reasonably expected to be provided 
by co-providers or co-facilities and must be built upon accurate 
information that was known at the time the good faith estimate was 
given to the uninsured (or self-pay) individual. As a result, the SDR 
entity should use the expected charges in the good faith estimate as 
the presumed appropriate amount and unless the provider or facility 
provides credible information justifying the difference between the 
total billed charges and the good faith estimate by demonstrating that 
the difference between the billed charges and the expected charges in 
the good faith estimate for the item or service reflects the costs of a 
medically necessary item or service and is based on unforeseen 
circumstances that could not have reasonably been anticipated by the 
provider or facility when the good faith estimate was provided. For 
this purpose, information is credible if upon critical analysis the 
information is worthy of belief and consists of trustworthy 
information. This is the same standard the Departments are adopting at 
26 CFR 54.9816-8T, 29 CFR 2590.716-8, and 45 CFR 149.510 for the 
Federal IDR processes discussed in section III.D.4 of this preamble. 
HHS is of the view that maintaining a consistent standard of review 
among IDR entities and SDR entities, while still recognizing the 
inherent differences in the respective processes based on the 
applicable parties, minimizes program complexity and reduces the 
potential for confusion among providers and facilities over the 
applicable standards for review.
    As stated previously, HHS acknowledges that unforeseen factors 
during the course of treatment could result in additional items or 
services furnished and could result in higher billed amounts after 
receipt of care than was anticipated at the time the good faith 
estimate was provided. HHS does not expect that the good faith estimate 
would include charges for unanticipated items or services that could 
occur due to unforeseen events. In cases where changes in the 
underlying circumstances occur during treatment and would reasonably 
result in higher than expected charges, the SDR entity may consider 
additional factors that support charges for medically necessary items 
or services. As information to demonstrate that the difference between

[[Page 56038]]

the billed charges and the expected charges for an item or service in 
the good faith estimate reflects the costs of a medically necessary 
item or service and is based on unforeseen circumstances that could not 
have reasonably been anticipated by the provider or facility when the 
good faith estimate was provided, providers or facilities should 
provide documentation, which can include a written explanation, 
detailing any change in circumstances, how that change resulted in a 
higher billed charge than the expected charge for the item or service 
in the good faith estimate, and why the billed charge reflects the cost 
of a medically necessary item or service. HHS considered requiring the 
provider or facility to provide only evidence that the difference 
between the billed charges and the expected charges for the item or 
service in the good faith estimate reflects the costs of a medically 
necessary item or service, and not require the provider or facility 
demonstrate the item or service is based on unforeseen circumstance 
that could not have reasonably been anticipated when the good faith 
estimate was provided. However, HHS is of the view that an item or 
service that is medically necessary and could reasonably have been 
anticipated should already be included on the good faith estimate and 
without such information the uninsured (or self-pay) individual would 
not have been provided with an accurate estimate of the expected 
charges. HHS is of the view that not requiring the provider or facility 
to demonstrate that the item or service could not have been anticipated 
could incentivize a provider or facility to not list all items or 
services on the good faith estimate which could lead to less-accurate 
estimates provided to uninsured (or self-pay) individuals.
    Uninsured (or self-pay) individuals may also submit additional 
documentation through the Federal IDR portal, although they are not 
required to provide documentation beyond the information included in 
the initiation notice, such as the good faith estimate and the billed 
charges.
    The SDR entity must review any documentation submitted by the 
uninsured (or self-pay) individual or their authorized representative, 
and a provider or facility, and must make a determination as to whether 
the provider or facility has provided credible information for each 
billed item or service to demonstrate that the difference between the 
billed charge and the expected charge in the good faith estimate 
reflects the costs of a medically necessary item or service and is 
based on unforeseen circumstances that could not have reasonably been 
anticipated by the provider or facility when the good faith estimate 
was provided. The SDR entity should make this determination separately 
for each unique billed item or service. HHS is of the view that this 
helps ensure that the SDR entity review is comprehensive and that the 
facts and circumstances for each billed charge are considered by the 
SDR entity. HHS is also of the view that this approach ensures that the 
uninsured (or self-pay) individual is only billed charges that reflect 
medically necessary items or services and are based on unforeseen 
circumstances that could not have reasonably been anticipated by the 
provider or facility when the good faith estimate was provided.
    For any item or service where the billed charge is equal to or less 
than the expected charge in the good faith estimate, the SDR entity 
will determine the payment amount to be the billed charge. If the 
billed charge is higher than the expected charge for an item or service 
in the good faith estimate and the SDR entity determines the provider 
or facility has not provided credible information that the difference 
between the billed charge and the expected charge for the item or 
service in the good faith estimate reflects the costs of a medically 
necessary item or service and is based on unforeseen circumstances that 
could not have reasonably been anticipated by the provider or facility 
when the good faith estimate was provided, the SDR entity must 
determine the amount to be paid by the uninsured (or self-pay) 
individual for the item or service to be equal to the expected charge 
for the item or service listed in the good faith estimate. If the SDR 
entity determines that the provider or facility has provided credible 
information that the difference between the billed charge and the 
expected charge for the item or service in the good faith estimate 
reflects the costs of a medically necessary item or service and is 
based on unforeseen circumstances that could not have reasonably been 
anticipated by the provider or facility when the good faith estimate 
was provided, the SDR entity must select as the amount to be paid by 
the uninsured (or self-pay) individual to be the lesser of: (1) The 
billed charge; or (2) the median payment amount for the same or similar 
service in the geographic area, as defined in 45 CFR 149.140(a)(7), 
that is reflected in an independent database as defined in 45 CFR 
149.140(a)(2), or if the amount reflected in the independent database 
is less than the expected charge in the good faith estimate, the good 
faith estimate amount.
    In cases in which the SDR entity determines that the provider or 
facility has provided credible information that difference between the 
billed charge and the expected charge for the item or service in the 
good faith estimate reflects the costs of a medically necessary item or 
service that could not have reasonably been anticipated by the provider 
or facility when the good faith estimate was provided, HHS considered 
whether to always require the SDR entity to set the payment amount 
equal to the billed charge. However, HHS is concerned that such an 
approach may increase the incentive for providers and facilities to 
inflate their billed charges, particularly in cases where the provider 
or facility believes they can justify the additional billed charge. 
Requiring the SDR entity to select as a payment amount the median 
payment amount for the same or similar item or service in a geographic 
area, if lower than the billed charge but higher than the expected 
charge in the good faith estimate, ensures that the uninsured (or self-
pay) individual is protected from billed charges that are above the 
market rate for items or services provided. HHS acknowledges that under 
this approach an SDR entity can determine a payment amount lower than 
the original billed charge in circumstances where a provider or 
facility submits credible information justifying the additional item or 
service as reflecting a medically necessary item or service and is 
based on unforeseen circumstances that could not have reasonably been 
anticipated by the provider or facility when the good faith estimate 
was provided. HHS also recognizes that such an approach could increase 
the incentive for the uninsured (or self-pay) individual to initiate 
patient-provider dispute resolution even in cases where the uninsured 
(or self-pay) individual believes the extra billed charges to be 
justified. However, HHS is of the view that PHS Act section 2799B-7 
establishes important consumer protections from unexpected billed 
charges that are substantially in excess of the expected charges in the 
good faith estimate, even in cases where the difference between the 
billed charge and the expected charges in the good faith estimate may 
reflect the costs of a medically necessary item or service and is based 
on unforeseen circumstances that could not reasonably been anticipated 
when the good faith estimate was provided. These protections ensure 
that the uninsured (or self-pay) individual is protected from excessive 
billed charges even

[[Page 56039]]

when such billed charges reflect a medically necessary item or service 
and are based on unforeseen circumstances that could not reasonably 
been anticipated when the good faith estimate was provided. In 
addition, HHS is of the view that the median payment amount is a 
reasonable payment amount, as the methodology was established to 
calculate a fair market rate for an item or service, and although this 
methodology was developed for group health plans and health insurance 
issuers offering group or individual health insurance coverage, it can 
also be leveraged to determine whether the billed charge is less than a 
fair market price, instead of creating separate standards regarding 
median rates as applied to the QPA and payment amounts applied to the 
patient provider dispute resolution process.
    For new items or services not originally listed on the good faith 
estimate, if the SDR entity determines the provider or facility did not 
provide credible information that demonstrates that the billed charge 
for the new item or service reflects the costs of a medically necessary 
item or service and is based on unforeseen circumstances that could not 
have reasonably been anticipated by the provider or facility when the 
good faith estimate was provided, the SDR entity will determine a 
payment amount equal to $0. HHS is of the view that PHS Act section 
2799B-7 establishes consumer protections for uninsured (or self-pay) 
individuals in the event they receive surprise charges that are not 
reflected in the good faith estimate. HHS is of the view that requiring 
the uninsured (or self-pay) individual to pay for items or services 
they did not anticipate, absent a determination that such a billed 
charge is supported by credible information that the billed charge 
reflects a medically necessary item or service and is based on 
unforeseen circumstances that could not have reasonably been 
anticipated by the provider or facility when the good faith estimate 
was provided, would run counter to the protections intended in PHS Act 
section 2799B-7. If the SDR entity determines that a provider or 
facility has provided credible information that the billed charge for 
new items or services that did not appear on the good faith estimate 
reflects the costs of a medically necessary item or service that is 
based on unforeseen circumstances that could not have reasonably been 
anticipated by the provider or facility when the good faith estimate 
was provided, then the SDR entity must determine the charge to be paid 
by the uninsured (or self-pay) individual for the new item or service 
as the lesser of two payment amounts: (1) The billed charge; or (2) the 
median payment amount for the same or similar service in the geographic 
area, as defined in 45 CFR 149.140(a)(7), that is reflected in an 
independent database as defined in 45 CFR 149.140(a)(2).
    After making a determination for all items or services subject to 
patient-provider dispute resolution, the SDR entity must add together 
the amounts to be paid for all items and services. As further discussed 
in section VI.B.8 of this preamble, in cases in which the final amount 
determined by the SDR entity is lower than the total billed charges, 
the SDR entity must reduce the final amount by an amount equal to the 
administrative fee amount paid by the individual (to account for the 
administrative fee charged to the provider or facility) to calculate 
the final payment determination amount to be paid by the uninsured (or 
self-pay) individual for the items or services subject to the SDR 
entity determination. HHS acknowledges that under this approach, 
particularly in cases where the provider or facility submits credible 
information to justify the additional billed charges, the SDR entity 
may still determine a lower payment amount than the billed charge and 
the provider or facility would end up paying an administrative fee in a 
large portion of patient-provider dispute resolution cases. However, 
HHS is of the view that the intent behind the consumer protections in 
PHS Act section 2799B-7 is to protect the uninsured (or self-pay) 
individual from unexpected billed charges that are substantially in 
excess of the expected charges in the good faith estimate, and as a 
result, the uninsured (or self-pay) individual should be held harmless 
in cases where the process results in a lower payment amount.
    Once the final payment determination amount has been calculated, 
the SDR entity must inform the uninsured (or self-pay) individual and 
the provider or facility using the Federal IDR portal, and depending on 
the individual's or provider's or facility's preference, electronically 
or by paper mail, of such determination, along with the SDR entity's 
justification for making such a determination.
    To provide an example of how the payment determination would 
operate in practice, consider a situation in which an uninsured (or 
self-pay) individual initiates the dispute resolution process against a 
provider for services A, B, C, and D. Services A and B were listed on 
the good faith estimate. The expected charge for service A was higher 
than the billed charge for service A, the expected charge for service B 
was lower than the billed charge for service B, and services C and D 
were not included on the good faith estimate and are thus new services. 
The difference between the total of the billed charges for services A, 
B, C, and D and the total expected charges for services A and B 
(services C and D were new services and not included in the good faith 
estimate) was determined to be at least $400 more than the amount 
listed in the good faith estimate, and thus these services were found 
to be eligible for patient-provider dispute resolution. When the SDR 
entity reviews the documentation submitted by the provider, because the 
billed charge for service A is less than the expected charge for 
service A, the SDR entity determines the amount to be paid to be equal 
the billed charge for service A. If the SDR entity determines the 
provider did not provide credible information that the difference 
between the higher billed charge and the expected charge for service B 
reflects the costs of a medically necessary item or service and is 
based on unforeseen circumstances that could not have reasonably been 
anticipated by the provider or facility when the good faith estimate 
was provided, then the SDR entity determines the amount to be paid for 
service B to be equal to the expected charge for service B on the good 
faith estimate. If the SDR entity determines the provider did provide 
credible information that billed charges for services C and D reflects 
the costs of medically necessary items or services and are based on 
unforeseen circumstances that could not have reasonably been 
anticipated by the provider or facility when the good faith estimate 
was provided, the SDR entity would determine the amounts to be paid for 
services C and D. Due to services C and D being new services, and as a 
result not having a corresponding expected charges in the good faith 
estimate, the SDR entity shall determine the payment amounts for 
services C and D to be the lesser of: (1) The billed charge; or (2) the 
median payment amount for the same or similar service in that 
geographic area, as defined in 45 CFR 149.140(a)(7), that is reflected 
in an independent database as defined in 45 CFR 149.140(a)(2) (had 
expected charges for services C or D been included in the good faith 
estimate, the median payment amount for the same or similar service in 
that geographic area, as defined in 45 CFR 149.140(a)(7), that is 
reflected in an independent database as defined in 45 CFR 149.140(a)(2) 
should not be considered if less than the expected charges for the 
services

[[Page 56040]]

contained in the good faith estimate). The SDR entity would then add 
together all the payment amounts determined for services A, B, C, and 
D. Due to the uninsured (or self-pay) individual's payment amount being 
determined to be lower than the initial billed charge, the SDR entity 
adjusts the final determination amount to reduce it by an amount equal 
to the uninsured (or self-pay) individual's administrative fee payment, 
to calculate the final determination amount. The SDR entity then 
notifies the uninsured (or self-pay) individual and the provider of the 
determination, the determination amount, and the reasons for the 
determination and closes the case.
    In determining the median payment amount from an independent 
database, the requirements and methodology set forth in 45 CFR 
149.140(c)(3) apply. HHS is of the view that utilizing the same 
methodology for the calculation of median rates for the QPA, when a 
plan or issuer does not have sufficient internal information to 
calculate the QPA, as the methodology for calculating the median 
payment amounts under the patient-provider dispute resolution process 
is reasonable and appropriate. This approach will allow an equivalent 
standard to be applied across multiple instances where the regulation 
refers to median rates, and will reduce confusion that may result from 
conflicting standards or definitions. HHS is of the view that creating 
a separate methodology specifically for the calculation of median 
payment amounts, using an independent database, as they pertain to the 
patient-provider dispute resolution process is unnecessary and 
therefore SDR entities must use this methodology when determining a 
median payment amount. HHS seeks comment on this methodology as a 
reasonable way to calculate median payment amounts for purposes of the 
patient-provider dispute resolution process.
    HHS considered whether to allow the SDR entity to have discretion 
to determine a payment amount lower than the expected charges in the 
good faith estimate. However, HHS is of the view that such an approach 
would result in less transparency and predictability for the uninsured 
(or self-pay) individuals, providers, and facilities regarding the 
outcome of the patient-provider dispute resolution process. PHS Act 
sections 2799B-6 and 2799B-7 establishes a backstop for an uninsured 
(or self-pay) individual that protects them from unexpected bills that 
substantially exceed the expected charges in the good faith estimate. 
Given that the provider or facility is required to provide the 
uninsured (or self-pay) individual with a good faith estimate upon 
scheduling or upon request prior to furnishing the items or services to 
the individual. HHS is of the view that the good faith estimate 
represents charges the uninsured (or self-pay) individual would likely 
expect to pay for the items or services. Therefore, the good faith 
estimate represents an appropriate amount to be determined as the 
payment amount when the uninsured (or self-pay) individual prevails. 
Additionally, setting the payment amount equal to the good faith 
estimate protects the uninsured (or self-pay) individual from 
unexpected billed charges in cases where the extra charges do not 
reflect the costs of a medically necessary item or service that is 
based on unforeseen circumstances that could not have reasonably been 
anticipated by the provider or facility when the good faith estimate 
was provided while providing predictability to uninsured (or self-pay) 
individuals, providers and facilities on what to expect from the 
patient-provider dispute resolution process. However, HHS recognizes 
that such an approach may encourage providers or facilities to be 
overinclusive regarding the list of expected charges in the good faith 
estimate, thus leading to higher good faith estimates than they 
otherwise would have provided.
    HHS seeks comment on the approach for the determination of payment 
amounts by the SDR entity, including the feasibility of the approach, 
as well as comment on alternative approaches. HHS also seeks comment on 
ways to reduce the incentives for providers and facilities to over 
include items or services on the good faith estimate, and the 
circumstances, if any, in which requiring the SDR entity to set a 
payment amount below the expected charges in the good faith estimate 
would be appropriate. HHS also seeks comment on the use of the median 
amount for the same or similar service in the geographic area, as 
defined in 45 CFR 149.140(a)(7), that is reflected in an independent 
database as defined in 45 CFR 149.140(a)(2), including comment on the 
feasibility of such an approach, and comment on whether a different 
methodology should also be considered.
iv. Effects of Determination
    Under the Federal IDR process established in PHS Act sections 
2799A-1(c)(5)(E) and 2799A-2(c)(5)(D), determinations made by a 
certified IDR entity are binding upon the parties involved, in the 
absence of a fraudulent claim or evidence of misrepresentation of facts 
presented to the IDR entity involved. PHS Act section 2799B-7 
establishes a separate dispute resolution process to determine payment 
amounts made to a provider or facility by an uninsured (or self-pay) 
individual when the uninsured (or self-pay) individual is billed 
charges substantially in excess of the expected charges in the good 
faith estimate; however, the statute is silent regarding the effects of 
such determinations. HHS is of the view that it is both necessary and 
appropriate to similarly require that determinations made by SDR 
entities be binding upon all parties involved, in the absence of a 
fraudulent claim or evidence of misrepresentation of facts presented to 
the SDR entity involved regarding such claim. HHS is of the view that 
use of its general rulemaking authority to establish such requirements 
is necessary and appropriate in order to implement the provisions of 
PHS Act section 2799B-7 to ensure the consumer protections established 
under PHS Act section 2799B-7 operate as intended. Without making the 
determination binding, the consumer protections established in PHS Act 
section 2799B-7 would be significantly diminished and the cost for 
administering the program may outweigh the benefits. Therefore, under 
45 CFR 149.620(f)(4), a determination made by an SDR entity will be 
binding upon the parties involved, in the absence of a fraudulent claim 
or evidence of misrepresentation of facts presented to the SDR entity 
regarding such claim, except that the provider or facility may provide 
financial assistance or agree to an offer for a lower payment amount 
than the SDR entity's determination, or the individual may agree to pay 
the billed charges in full, or the uninsured (or self-pay) individual 
and the provider or facility may agree to a different payment amount. 
HHS seeks comment on the approach regarding SDR entity determinations 
being binding, including the feasibility of such approach, as well 
comment on alternative approaches. HHS also seeks comment on subject of 
judicial review. PHS Act section 2799A-1(c)(5)(E) requires that 
determinations not be subject to judicial review, except in a case 
described in any paragraphs (1) through (4) of section 10(a) of title 
9, United States Code. HHS seeks comment on the feasibility or 
desirability of adopting a similar application for the patient-provider 
dispute resolution process, as well as comment on alternative 
approaches.
8. Costs of Patient-Provider Dispute Resolution Process
    PHS Act section 2799B-7, as added by the No Surprises Act, directs 
the

[[Page 56041]]

Secretary of HHS to establish an administrative fee ``to participate in 
the patient-provider dispute resolution process in such a manner as to 
not create a barrier to an uninsured (or self-pay) individual's access 
to such process.'' Aside from the administrative fee, discussed later 
in this section, the No Surprises Act does not specifically address 
requirements for how the costs for the SDR entity to conduct patient-
provider dispute resolution determinations (dispute resolution costs) 
should be funded.
    HHS considered various approaches with respect to how the dispute 
resolution costs should be treated for the patient-provider dispute 
resolution process. HHS recognizes that it is important for the SDR 
entity to be appropriately compensated for providing patient-provider 
dispute resolution services. HHS considered maintaining a similar fee 
structure as in the Federal IDR process where the non-prevailing party 
would be required to pay all the costs of the IDR entity. However, HHS 
is of the view that requiring an uninsured (or self-pay) individual to 
pay the entire dispute resolution costs in cases where the provider or 
facility prevails in the dispute resolution process could be 
prohibitive for individuals to access the dispute resolution process. 
HHS is also concerned that requiring a provider or facility to pay 
dispute resolution costs when they do not prevail could impose a burden 
on the provider or facility and potentially provide an incentive for 
the provider or facility to raise prices for uninsured (or self-pay) 
individuals to account for potential dispute resolution costs or avoid 
treating uninsured (or self-pay) individuals altogether.
    HHS is also of the view that while the patient-provider dispute 
resolution process is similar to the Federal IDR process in several 
important ways, the patient-provider dispute resolution process does 
have unique distinctions. In particular, while in the Federal IDR 
process, both the providers (and providers of air ambulance services) 
and the payers can initiate the IDR process, and both parties have an 
incentive to resolve the dispute, in the patient-provider dispute 
resolution process only the uninsured (or self-pay) individual can 
initiate the dispute resolution process, and HHS is concerned that the 
provider or facility would not have the same incentive to participate 
in the dispute resolution process as the uninsured (or self-pay) 
individual. Similarly, there will likely be a significant imbalance in 
both power and knowledge between the provider or facility and the 
uninsured (or self-pay) individual initiating the dispute resolution 
process. As a result, HHS is of the view that a different approach to 
dispute resolution costs is needed for the patient-provider dispute 
resolution process. As a result, HHS determined that an approach where 
HHS would pay dispute resolution costs by directly contracting with SDR 
entities is the appropriate approach, as it would address the concerns 
discussed earlier in this section of the preamble. HHS is also of the 
view that such an approach will streamline the patient-provider dispute 
resolution process and minimize potential burdens on uninsured (or 
self-pay) individuals, and providers and facilities.
    HHS is adopting an approach for the patient-provider dispute-
resolution process in which HHS will pay dispute resolution costs 
through contracts with SDR entities. Such an approach ensures that the 
uninsured (or self-pay) individual would not be required to pay dispute 
resolution costs, and as a result, such costs would not pose a barrier 
to accessing the dispute resolution process. Adopting such an approach 
in which HHS pays the dispute resolution costs would minimize the 
burdens placed on uninsured (or self-pay) individuals and on providers 
or facilities, and reduce the incentives for providers and facilities 
to increase prices or restrict an uninsured (or self-pay) individual's 
access to needed care. Adopting an approach where the individual would 
not be required to bear the dispute resolution costs would help ensure 
that such costs would not be a barrier to the uninsured (or self-pay) 
individual's access to the dispute resolution process.
    Aside from dispute resolution costs, PHS Act section 2799B-7 
requires that the Secretary of HHS establish an administrative fee to 
participate in the patient-provider dispute resolution process in such 
a manner as to not create a barrier to an uninsured (or self-pay) 
individual to participate in such process. HHS is aware that not 
requiring the uninsured (or self-pay) individual to pay dispute 
resolution costs could lead to overutilization of the patient-provider 
dispute resolution process; however, this concern is mitigated by 
limiting the availability of the patient-provider dispute resolution 
only to cases where the total billed charge for items or services per 
provider or facility are billed in excess of the expected charges by at 
least $400 more than the amount listed in the good faith estimate, as 
discussed in section VI.B.2 of this preamble. In addition, HHS is of 
the view that requiring parties to the dispute resolution process to 
pay an administrative fee to offset some of the Federal costs for 
implementing the patient-provider dispute resolution program is 
appropriate. Such a requirement is also similar to the Federal IDR 
process, which requires all parties to pay an administrative fee to 
cover Federal costs; however, under that process, the fee is required 
to equal the estimated costs to the Federal Government, while in the 
patient-provider dispute resolution process the administrative fee is 
required to be established so that it would not create a burden for the 
uninsured (or self-pay) individual to participate in the dispute 
resolution process.
    HHS intends to assess an administrative fee on the non-prevailing 
party (providers, facilities, and uninsured (or self-pay) individuals) 
to the patient-provider dispute resolution process. For purposes of the 
patient-provider dispute resolution process, the prevailing party means 
the provider or facility when the SDR entity determines the total 
amount to be paid to be equal to the total billed charges, whereas the 
prevailing party means the uninsured (or self-pay) individual when the 
SDR entity determines the total amount to be paid to be less than the 
total billed charges. Upon the SDR entity determination, if the 
uninsured (or self-pay) individual is the prevailing party, the SDR 
entity would apply a reduction, equal to the administrative fee amount 
paid by the individual, to the final determination amount to be paid by 
the individual for the items or services. HHS is of the view that 
requiring the non-prevailing party to pay the entire administrative fee 
(either in a payment made directly to the SDR entity in the case of the 
uninsured (or self-pay) individual, or in a reduction in the final 
payment determination amount as in the case of the provider or 
facility) ensures that both parties are treated the same with regards 
to the administrative fee assessed. Additionally, requiring only the 
non-prevailing party to pay the administrative fee will help ensure 
that the party that prevails in dispute resolution is not penalized for 
participating in the process. Under this approach, the uninsured (or 
self-pay) individual who is the initiating party in the patient-
provider dispute resolution process will pay the administrative fee at 
the process initiation through the SDR entity. HHS is of the view that 
since the uninsured (or self-pay) individual is the initiating party, 
waiting for the provider or facility to submit the administrative fee 
prior to the SDR entity making a determination may result in undue 
delays to the

[[Page 56042]]

process. In cases in which the uninsured (or self-pay) individual 
prevails in dispute resolution, the SDR entity would apply a reduction 
equal to the administrative fee paid by the individual to the final 
determination amount to be paid by the individual for the items or 
services. HHS is of the view that requiring the provider or facility to 
pay the administrative fee to the uninsured (or self-pay) individual 
through a reduction in the final determination amount to be paid is the 
appropriate approach as it simplifies the number of transactions, 
rather than requiring the provider or facility to provide a payment 
directly to the SDR entity. This approach also ensures that in cases in 
which the uninsured (or self-pay) individual prevails, the SDR entity 
will reduce the amount the uninsured (or self-pay) individual 
ultimately is required to pay for an item or services by the amount of 
the administrative fee paid so that it is not left to the provider or 
facility to apply the reduction equal to the administrative fee paid to 
the final payment amount. In cases where the provider or facility 
prevails in dispute resolution, the SDR entity would not reduce the 
final payment amount by an amount equal to the amount of the 
administrative fee paid by the uninsured (or self-pay) individual.
    In cases described in section VI.B.7.i of this preamble where the 
parties to dispute resolution agree to settle the payment amount prior 
to the SDR entity making a determination, both parties will be 
responsible for paying half the amount of the administrative fee. In 
this case, the provider or facility will document in the settlement 
notice described in section VI.B.7.i of this preamble that it has 
reduced the settlement amount by at least half of the administrative 
fee amount paid by the uninsured (or self-pay) individual.
    HHS intends to establish an administrative fee in guidance in a 
manner that will not create a barrier to an uninsured (or self-pay) 
individual's access to the patient-provider dispute resolution process. 
In setting the fee HHS is considering expected costs to HHS for 
operating the patient-provider dispute resolution program, including 
contractor costs, and costs to HHS for utilizing the Federal IDR portal 
for patient provider dispute resolution cases. However, due to the 
requirements in PHS Act section 2799B-7 that such administrative fee 
must not pose a burden to participate for uninsured (or self-pay) 
individual to participate in the patient-provider dispute resolution 
process, HHS is of the view that it is necessary and appropriate to 
limit the size of the administrative fee. As a result, HHS expects the 
fee to be no more than $25, which HHS believes would allow HHS to 
offset some of the costs of operating the dispute resolution process 
while keeping the administrative fee low enough to ensure uninsured (or 
self-pay) individuals are able to access the dispute resolution 
process. HHS considered whether to base the administrative fee on 
annual household income but is concerned that such an approach would 
require an uninsured (or self-pay) individual to submit financial 
documentation to verify their income which could significantly increase 
complexity to initiate the dispute resolution process and could create 
additional burdens for an uninsured (or self-pay) individual to 
participate. HHS intends to evaluate patient-provider dispute 
resolution case volume, contract costs, and other Federal costs for the 
program and may adjust this fee in subsequent years through guidance to 
ensure that the fee continues to mitigate overutilization of the 
patient-provider dispute resolution process, offsets some of HHS's 
costs of operating the dispute resolution process, and also does not 
pose a burden for uninsured (or self-pay) individuals regarding 
participation in the process. HHS seeks comment on this approach, 
including comment on whether the administrative fee should be higher or 
lower, the feasibility of the approach to collecting the administrative 
fee, including comment on alternative approaches that HHS should 
consider. HHS also seeks comment on ways to ensure public awareness of 
the dispute resolution process, including the administrative fee and 
how payments are handled, as well as comment on potential unintended or 
disparate impacts of administrative costs on underserved and 
underrepresented populations.
9. Deferral to State Patient-Provider Dispute Resolution Processes
    The No Surprises Act establishes strong consumer protections for 
uninsured (or self-pay) individuals to have access to the patient-
provider dispute resolution process in cases in which billed charges 
substantially exceed expected charges in the good faith estimate. HHS 
is of the view that PHS Act section 2799B-7 operates in such a way that 
all uninsured (or self-pay) individuals, regardless of state, are 
required to have at least the minimum protections set forth in the 
statute. However, HHS has considered circumstances where states may 
wish to develop their own processes for resolving disputes between 
uninsured (or self-pay) individuals and providers or facilities. HHS is 
of the view that when a state law is in effect that provides a process 
for resolving disputes between an uninsured (or self-pay) individual 
and a provider or facility that meets or exceeds the consumer 
protections contained in PHS Act section 2799B-7, such a process should 
continue to apply. In addition, HHS believes that such an approach is 
consistent with other provisions of the No Surprises Act such as 
allowing allow the application of a state law established to determine 
the total amount payable under such a plan, coverage, or issuer for 
certain emergency services. HHS is adding new 45 CFR 149.620(h) to 
establish a process by which HHS will determine whether a state 
patient-provider dispute resolution process provides at least the same 
level of consumer protections as does the Federal process. HHS will 
communicate with the state and determine whether a state law provides 
for such a dispute resolution process, and ensure that such process 
meets or exceeds certain minimum Federal requirements. If HHS 
determines that the state has in effect a state law that meets or 
exceeds the minimum Federal requirements, then HHS will defer to the 
state process. In such case the patient-provider dispute resolution 
process operated by HHS will not be available in that state. As further 
discussed in section VI.B.5 of this preamble, as part of the 
contracting and certification process for an SDR entity, the entity 
must demonstrate the ability to operate nationwide, including the 
ability to operate in states where a state process is terminated so 
that uninsured (or self-pay) individuals continue to have access to a 
process that meets Federal standards. HHS will direct any patient-
provider dispute resolution requests received by HHS from uninsured (or 
self-pay) individuals in that state to the state process to adjudicate 
the dispute resolution initiation request according to the state 
process. HHS will assess such state process for compliance with the 
minimum Federal standards to ensure any such state process includes the 
same or greater level of consumer protection as would apply under the 
Federal patient-provider dispute resolution process. If HHS determines 
that such state process meets or exceeds the minimum Federal standards, 
HHS will discuss such determination with the state as well as notify 
the state in writing of such determination.
    HHS considered what minimum requirements a state law must include 
in order for HHS to determine that the state's law is at least as 
consumer

[[Page 56043]]

protective as the protections contained in the No Surprises Act. At a 
minimum, the state process should: (1) Be binding, unless the provider 
or facility offers for the uninsured (or self-pay) individual to pay 
lower amount than the determination amount; (2) take into consideration 
a good faith estimate, that meets the minimum standards established 
under 45 CFR 149.610, provided by the provider or facility to the 
uninsured (or self-pay) individual; (3) have a fee to participate in 
the patient-provider dispute resolution process that is equal to or 
lower than the Federal administrative fee; and (4) have in place 
conflict-of-interest standards that at a minimum meet the requirements 
set forth in 45 CFR 149.620(d) and (e)(3).
    In order to ensure that a state process continues to meet or exceed 
the consumer protections contained in the No Surprises Act, HHS will 
review changes to the state process on an annual basis (or at other 
times if HHS receives information from the state that would indicate 
the state process no longer meets the minimum Federal requirements) to 
ensure the state process continues to meet or exceed the minimum 
Federal standards. HHS is of the view that having a process to reassess 
state dispute resolution processes is important for ensuring that 
uninsured (or self-pay) individuals receive at least the same level of 
protection as the Federal standard. In the event that the state process 
is terminated, or HHS determines that it no longer meets the minimum 
Federal requirements, HHS will make the Federal process available to 
ensure that ensures the state's residents have access to a dispute 
resolution process that meets the minimum Federal requirements.
    Although the Federal process will be available for uninsured (or 
self-pay) individuals except in states where HHS has made a 
determination that the state has established a State process that 
includes the same or greater level of consumer protection as would 
apply under the Federal process, HHS recognizes that some states may 
have in place other programs that seek to resolve payment disputes 
between uninsured (or self-pay) individuals and providers or facilities 
that do not meet the minimum Federal standards and thus would not take 
the place of the Federal dispute resolution process. However, HHS notes 
that nothing would prevent the uninsured (or self-pay) individual from 
voluntarily choosing to use such state programs to resolve a payment 
dispute instead of utilizing the Federal dispute resolution process. 
HHS seeks comment on the approach to allow the HHS to defer to a state 
established patient-provider dispute resolution process that meets 
certain minimum Federal standards, including the feasibility and 
appropriateness of such approach, and whether additional minimum 
Federal standards should be considered.
10. Extension of Time Periods for Extenuating Circumstances
    Similar to the provisions set forth in section III.D.8 in this 
preamble for the Federal IDR process under Code section 9816(c)(9), 
ERISA section 716(c)(9), PHS Act section 2799A-1(c)(9), and codified at 
26 CFR 54.9816-8T(g), 29 CFR 2590.716-8(g), and 45 CFR 149.510(g), the 
time periods specified in these interim final rules (other than the 
time for payment of the administrative fees discussed in section VI.B.4 
of this preamble) may be extended in the case of extenuating 
circumstances at HHS' discretion on a case-by-case basis if the 
extension is necessary to address delays due to matters beyond the 
control of the parties or for good cause. Such extension may be 
necessary if, for example, a natural disaster impedes efforts by 
individuals, providers, and facilities to comply with the terms of 
these interim final rules. Additionally, for the extension to be 
granted, the parties must attest that prompt action will be taken to 
ensure that the payment determination under this section is made as 
soon as administratively practicable. The parties may request an 
extension by submitting a request for an extension due to extenuating 
circumstances, such as a natural disaster or other circumstances 
impeding efforts to comply with the terms of these interim final rules, 
through the Federal IDR portal if the extension is necessary to address 
delays due to matters beyond the control of the parties or for good 
cause.
11. Applicability of the Patient-Provider Dispute Resolution Process
    The provisions in PHS Act section 2799B-7 require the patient-
provider dispute resolution process to be established by the Secretary 
of HHS no later than January 1, 2022. Consistent with this statutory 
provision, the requirements under 45 CFR 149.620 are applicable to 
uninsured (or self-pay) individuals; providers, facilities, and 
providers of air ambulance services; and SDR entities, beginning on or 
after January 1, 2022. The interim final rules regarding SDR entity 
certification at 45 CFR 149.620(a) and 45 CFR 149.620(d), are 
applicable beginning on October 7, 2021 so that HHS can begin 
certifying SDR entities before the patient-provider dispute resolution 
process becomes applicable.

VII. Waiver of Proposed Rulemaking

    Code section 9833, ERISA section 734, and PHS Act section 2792 
authorize the Secretaries of the Treasury, Labor, and HHS 
(collectively, the Secretaries), respectively, to promulgate any 
interim final rules that they determine are necessary or appropriate to 
carry out the provisions of chapter 100 of the Code, part 7 of subtitle 
B of title I of ERISA, and title XXVII of the PHS Act.
    Under the Administrative Procedure Act (APA) (5 U.S.C. 551 et 
seq.), a general notice of proposed rulemaking is not required when an 
agency for good cause finds that notice and comment procedures are 
impracticable, unnecessary, or contrary to the public interest and 
incorporates a statement of the finding and its reasons in the rule 
issued. 5 U.S.C. 553(b)(B). In addition, section 553(d) ordinarily 
requires a 30-day delay in the effective date of a final rule from the 
date of its publication in the Federal Register. This 30-day delay in 
effective date can be waived, however, if an agency finds good cause to 
support an earlier effective date. Finally, Subtitle E of the Small 
Business Regulatory Enforcement Fairness Act of 1996 (also known as the 
Congressional Review Act or CRA) requires a delay in the effective date 
for major rules unless an agency finds good cause that notice and 
public procedure are impracticable, unnecessary, or contrary to the 
public interest, in which case the rule shall take effect at such time 
as the agency determines. 5 U.S.C. 801(a)(3), 808(2).
    The Secretaries and the OPM Director have determined that it would 
be impracticable and contrary to the public interest to delay putting 
the provisions in these interim final rules in place until a full 
public notice and comment process has been completed and find that 
there is good cause to waive the delay in effective date for certain 
provisions of these interim final rules.
    The No Surprises Act was enacted on December 27, 2020, as title I 
of Division BB of the Consolidated Appropriations Act, 2021. The IDR 
and internal claims appeals and external review provisions generally 
apply for plan years (in the individual market, policy years) beginning 
on or after January 1, 2022. The provisions related to protections for 
the uninsured generally apply beginning on January 1, 2022. Although 
this effective date may have allowed for the regulations, if 
promulgated with the full notice and comment rulemaking process, to be 
applicable in time for the

[[Page 56044]]

applicability date of the provisions in the No Surprises Act, this 
timeframe would not provide sufficient time for the regulated entities 
to implement the requirements. The provisions related to the 
certification of IDR and SDR entities, as described in the 
Applicability Dates section of this final rule, apply beginning October 
7, 2021.
    These interim final rules require plans, issuers, providers, 
facilities, and providers of air ambulance services to follow a certain 
process in determining out-of-network payment amounts for certain 
specified services. These regulations are intended to work in concert 
with the protections against surprise billing already instituted in the 
July 2021 interim final rules. Group health plans and health insurance 
issuers offering group or individual health insurance coverage will 
have to account for these changes in establishing premium or 
contribution rates and in making other changes to benefit designs. In 
some cases, issuers will need time to secure approval for required 
changes in advance of plan or policy years.
    These interim final rules also set up certification requirements 
for IDR entities and requirements to which they must adhere in 
selecting payment offers. IDR entities will need time to acquire the 
necessary expertise and evidence of qualification to apply for 
certification in order to be prepared to conduct payment determinations 
for plan years beginning on or after January 1, 2022.
    The Departments and OPM anticipate that plans and issuers will have 
already taken into consideration the statutory provisions in the No 
Surprises Act as they developed plan designs for 2022 and preliminary 
rates. Issuing these rules as interim final rules, rather than as a 
notice of proposed rulemaking, will allow plans and issuers to account 
for the regulations as they finalize rates and plan offerings and will 
allow IDR entities to seek certification and be available to take part 
in the Federal IDR process when these interim final rules go into 
effect.
    Health plans and issuers, and providers, facilities and providers 
of air ambulance services, require these rules to be in place to 
determine the out-of-network rates for emergency services, services by 
out-of-network providers at in-network facilities in certain 
circumstances, and air ambulance services. Without these final rules, 
providers, facilities and providers of air ambulance services will not 
be able to resort to the Federal IDR process (and are no longer able to 
balance bill patients), leaving the possibility that they will be 
undercompensated for their services. Such undercompensation could 
threaten the viability of these providers, facilities and providers of 
air ambulance services. This in turn, could lead to participants, 
beneficiaries and enrollees not receiving needed medical care, 
undermining the goals of the No Surprises Act. Additionally, and for 
the same reasons, the failure to promulgate this rule in a timely 
fashion could lead to additional industry consolidation, potentially 
driving health costs higher.
    The Departments considered whether they could exercise enforcement 
discretion while a rule was proposed and then finalized. However, the 
No Surprises Act requires that the government set up and administer a 
Federal IDR process to determine out-of-network rates. Therefore, the 
Department must establish set rules for this process, including for the 
certification of certified IDR entities, in order that certified IDR 
entities, rather than the Departments, may determine out-of-network 
rates as contemplated by the No Surprises Act.
    These interim final rules place new requirements on providers, 
facilities and providers of air ambulance services regarding how they 
must initiate open negotiation and the Federal IDR process, as well as 
what information they must provide to certified IDR entities when 
engaging in the Federal IDR process. Providers, facilities, and 
providers of air ambulance services require time to implement these new 
requirements to ensure compliance by January 1, 2022.
    In addition to the requirements for the Federal IDR process, these 
interim final rules require providers and facilities to furnish a good 
faith estimate of expected charges upon request or upon scheduling an 
item or service. Providers and facilities are required to inquire if an 
individual is enrolled in a group health plan, group or individual 
health insurance coverage, or a Federal health care program, and if 
enrolled in such plan or coverage, if the individual is seeking to have 
a claim for such item or service submitted to such plan or coverage. In 
the case that the individual is enrolled in such a plan or coverage 
(and is seeking to have a claim for such an item or services submitted 
to such plan or coverage), PHS Act section 2799B-6 requires that the 
provider or facility furnish the good faith estimate to the 
individual's plan or the issuer of the coverage to inform the advanced 
explanation of benefits that plans and issuers are required to provide 
a participant, beneficiary or enrollee under PHS section 2799A-1(f), 
Code section 9816(f), and ERISA section 716(f).\99\ In the case that 
the individual requesting or scheduling a good faith estimate for an 
item or service is uninsured (or self-pay), these interim final rules 
at 45 CFR 149.610 require providers and facilities to furnish the good 
faith estimate to the individual. Providers and facilities will need 
time to implement requirements for furnishing good faith estimates to 
uninsured (or self-pay) individuals and time to develop processes for 
sharing and receiving information required for the good faith estimate 
with co-providers and co-facilities. Issuing these rules as interim 
final rules, rather than as a notice of proposed rulemaking, should 
allow providers and facilities to account for the regulations as they 
implement requirements to inquire about an individual's enrollment in

[[Page 56045]]

health care coverage and to furnish a good faith estimate to an 
uninsured (or self-pay) individual when these interim final rules goes 
into effect.
---------------------------------------------------------------------------

    \99\ As stated in the August 20, 2021 FAQs issued by the 
Departments, the Departments have received feedback from the public 
about the challenges of developing the technical infrastructure 
necessary for providers and facilities to transmit to plans and 
issuers starting January 1, 2022 the good faith estimates required 
under PHS Act section 2799B-6, which plans and issuers must then 
include in the advanced explanation of benefits. Accordingly, until 
rulemaking to fully implement this requirement to provide such a 
good faith estimate to an individual's plan or coverage is adopted 
and applicable, HHS will defer enforcement of the requirement that 
providers and facilities provide good faith estimate information for 
individuals enrolled in a health plan or coverage and seeking to 
submit a claim for scheduled items or services to their plan or 
coverage. Additionally, stakeholders have requested that the 
Departments delay the applicability date of Code section 9816(f), 
ERISA section 716(f), and PHS Act section 2799A-1(f) until the 
Departments have established standards for the data transfer between 
providers and facilities and plans and issuers and have given enough 
time for plans and issuers and providers and facilities to build the 
infrastructure necessary to support the transfers. The Departments 
agree that compliance with these sections is likely not possible by 
January 1, 2022, and therefore intend to undertake notice and 
comment rulemaking in the future to implement these provisions, 
including establishing appropriate data transfer standards. Until 
that time, the Departments will defer enforcement of the requirement 
that plans and issuers must provide an advanced explanation of 
benefits. HHS will investigate whether additional interim solutions 
for insured consumers are feasible. The Departments note that any 
rulemaking to fully implement Code section 9816(f), ERISA section 
716(f), and PHS Act sections 2799A-1(f) and 2799B-6(2)(A) will 
include a prospective applicability date that provides plans, 
issuers, providers, facilities, and providers of air ambulance 
services with a reasonable amount of time to comply with new 
requirements. HHS encourages states that are primary enforcers of 
these requirements with regard to providers and issuers to take a 
similar enforcement approach, and will not determine that a state is 
failing to substantially enforce these requirements if it takes such 
an approach. See FAQs about Affordable Care Act and Consolidated 
Appropriations Act, 2021 Implementation Part 49 (August 20, 2021), 
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-49.pdf and https://www.hhs.gov/guidance/document/faqs-about-affordable-care-act-and-consolidated-appropriations-act-2021-implementation.
---------------------------------------------------------------------------

    These interim final rules provide further protections for uninsured 
(or self-pay) individuals by requiring the Secretary of HHS to 
establish a process (patient-provider dispute resolution) under which 
an uninsured (or self-pay) individual may seek a determination from a 
certified dispute resolution entity for billed charges in excess of the 
good faith estimate. These interim final rules also place new 
requirements on uninsured (or self-pay) individuals, and providers or 
facilities regarding how they must initiate patient-provider dispute 
resolution, what information they must provide to dispute resolution 
entities for the dispute resolution process, and costs associated with 
patient-provider dispute resolution. Similar to the Federal IDR 
process, these interim final rules also establish certification 
requirements for SDR entities and requirements to which they must 
adhere in determining payment amounts. SDR entities will need time to 
acquire the necessary expertise, and enter into a contract with HHS to 
provide patient-provider dispute resolution. Issuing these rules as 
interim final rules, rather than as a notice of proposed rulemaking and 
waiving the delay in effective date for the provisions related to SDR 
certification will allow SDR entities to account for the regulations as 
they seek to contract with HHS and be available for patient-provider 
dispute resolution determinations when the related provisions in these 
interim final rules go into effect. Further, uninsured (or self-pay) 
individuals, providers, and facilities will need to understand what is 
required of them to engage in the patient-provider dispute resolution 
process when the interim final rules go into effect.
    For the foregoing reasons, the Departments and OPM have determined 
that it is impracticable and contrary to the public interest to engage 
in full notice and comment rulemaking before these interim final rules 
become effective, and that it is in the public interest to promulgate 
interim final rules. Further, for the same reasons as authorized by 
section 808(2) of the CRA, the Departments find it is impracticable and 
contrary to the public interest not to waive the delay in effective 
date for certain provisions of this IFC under section 801 of the CRA. 
Therefore, the Departments find there is good cause to waive the CRA's 
delay in effective date pursuant to section 808(2) of the CRA and 
establish certain policies in this IFC applicable as of the date of 
display at the Office of the Federal Register.

VIII. Economic Impact and Paperwork Burden

A. Summary

    The Departments and OPM have examined the effects of these interim 
final rules as required by Executive Order 13563 (76 FR 3821, January 
21, 2011, Improving Regulation and Regulatory Review); Executive Order 
12866 (58 FR 51735, October 4, 1993, Regulatory Planning and Review); 
the Regulatory Flexibility Act (September 19, 1980, Pub. L. 96-354); 
section 1102(b) of the Social Security Act (42 U.S.C. 1102(b)); section 
202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995, Pub. 
L. 104-4); Executive Order 13132 (64 FR 43255, August 10, 1999, 
Federalism); and the Congressional Review Act (5 U.S.C. 804(2)).

B. Executive Orders 12866 and 13563

    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 costs 
and benefits, reducing costs, harmonizing rules, and promoting 
flexibility.
    Under Executive Order 12866, ``significant'' regulatory actions are 
subject to review by OMB. Section 3(f) of the Executive Order 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, 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. Based on the 
Departments' estimates, OMB's Office of Information and Regulatory 
Affairs has determined this rulemaking is ``economically significant'' 
as measured by the $100 million threshold, and hence also a major rule 
under Subtitle E of the Small Business Regulatory Enforcement Fairness 
Act of 1996 (also known as the Congressional Review Act). Accordingly, 
the Departments have prepared a Regulatory Impact Analysis that, to the 
best of our ability, presents the costs and benefits of this 
rulemaking.
1.1. Need for Regulation
    A surprise medical bill is an unexpected bill from a health care 
provider or facility that occurs when a participant, beneficiary, or 
enrollee receives medical services from a provider or facility that, 
generally unbeknownst to the participant, beneficiary, or enrollee, is 
a nonparticipating provider or facility with respect to the 
individual's coverage. In the context of this discussion, medical 
services include air ambulance services. Surprise bills usually occur 
in situations where a patient is unable to choose a health care 
provider, emergency facility, or provider of air ambulance services. 
When they are unable to choose, they are unable to ensure they only 
receive care from providers or emergency facilities participating in 
their plan's or coverage's network.
    Surprise bills can cause significant financial hardship and cause 
individuals to forgo care. A recent survey revealed that two-thirds of 
adults worry about being able to afford unexpected medical bills for 
themselves and their families, and 41 percent of adults with health 
insurance received a surprise medical bill in the previous 2 
years.\100\ A project carried out by Vox, a news and opinion website, 
which collected emergency department medical bills reported instances 
of accident victims who received care at out-of-network hospitals and 
received bills of over $20,000.\101\ These challenges may be more 
keenly experienced by minority and underserved communities, which are 
more likely to experience poor communication, underlying mistrust of 
the medical system, and lower levels of patient engagement than other

[[Page 56046]]

populations.\102\ Communities experiencing poverty and other social 
risk factors are particularly impacted as surprise medical bills can 
negatively affect consumers' abilities to eliminate debt and create 
wealth, and ultimately can impact a family for generations.\103\ 
Policies that address the social risk factors and other barriers 
underserved communities face to accessing, trusting, and understanding 
health care costs and coverage can reduce disparities and promote 
health equity.\104\
---------------------------------------------------------------------------

    \100\ Pollitz K., et al., US Statistics on Surprise Medical 
Billing. JAMA. 2020;323(6):498. doi:10.1001/jama.2020.0065.
    \101\ Kliff S., Surprise medical bills, the high cost of 
emergency department care, and the effects on patients [published 
online August 12, 2019]. JAMA Intern Med. doi:10.1001/
jamainternmed.2019.3448.
    \102\ Butler S., Sherriff N. How poor communication exacerbates 
health inequities and what to do about it. Brookings Institution: 
Report (February 22, 2021). https://www.brookings.edu/research/how-poor-communication-exacerbates-health-inequities-and-what-to-do-about-it/; Hamel, L., Lopes, L., Mu[ntilde]ana, C., Artiga, S., 
Brodie, M. Race, Health, and COVID-19: The Views and Experiences of 
Black Americans. Kaiser Family Foundation (October 2020). https://files.kff.org/attachment/Report-Race-Health-and-COVID-19-The-Views-and-Experiences-of-Black-Americans.pdf; and Shen M.J., Peterson 
E.B., Costas-Mu[ntilde]iz R. et al. The Effects of Race and Racial 
Concordance on Patient-Physician Communication: A Systematic Review 
of the Literature. J. Racial and Ethnic Health Disparities 5, 117-
140 (2018). https://doi.org/10.1007/s40615-017-0350-4.
    \103\ Taylor, J., Racism, inequality, and health care for 
African Americans. The Century Foundation: Report (December 19, 
2019). https://tcf.org/content/report/racism-inequality-health-care-african-americans/; and Chavis, B., Op-Ed: Big insurance must help 
end surprise medical billing. blackpressUSA (February 24, 2020). 
https://blackpressusa.com/op-ed-big-insurance-must-help-end-surprise-medical-billing/.
    \104\ P[eacute]rez-Stable E.J., El-Toukhy S., Communicating with 
diverse patients: How patient and clinician factors affect 
disparities. Patient Educ Couns. 2018;101(12):2186-2194. 
doi:10.1016/j.pec.2018.08.021; McNally, M., Confronting disparities 
in access to health care for underserved populations. MedCity News 
(February 22, 2021). https://medcitynews.com/2021/02/confronting-disparities-in-access-to-healthcare-for-underserved-populations-in-2021/.
---------------------------------------------------------------------------

    It has become common practice in the health care system for plans, 
issuers, and FEHB carriers to negotiate with health care providers. 
Plans, issuers, and FEHB carriers offer preference to these providers 
by listing them as ``in-network providers,'' and in return, providers 
charge discounted rates to the plans, issuers, and FEHB carriers.\105\ 
Joining a plan's, issuer's, or FEHB carrier's network assures providers 
of patient volume in exchange for lower reimbursements. However, for 
specialties for which consumers typically do not shop, such as services 
rendered by emergency departments, patient volume does not depend on 
whether specific providers are in-network.\106\ There is less of an 
incentive for these providers to engage in negotiations with plans, 
issuers, and FEHB carriers.\107\ One study looked at claims data from a 
large commercial issuer for the period 2010-2016 and found that over 39 
percent of emergency department visits to in-network hospitals resulted 
in an out-of-network bill, and 37 percent of inpatient admissions to 
in-network hospitals resulted in at least one out-of-network bill.\108\
---------------------------------------------------------------------------

    \105\ Greaney, Thomas. ``Surprise Billing: a Window into the 
U.S. Health Care System.'' American Bar Association. (September 
2020). https://www.americanbar.org/groups/crsj/publications/
human_rights_magazine_home/health-matters-in-elections/surprise-
billing/
#:~:text=The%20%E2%80%9Csurprise%E2%80%9D%20typically%20occurs%20when
,the%20difference%20between%20what%20the.
    \106\ Cooper, Z. et al. ``Surprise! Out-of-Network Billing for 
Emergency Care in the United States.'' National Bureau of Economic 
Research: Working Paper 23623 (July 2017). https://www.nber.org/papers/w23623.
    \107\ Greaney, Thomas. ``Surprise Billing: a Window into the 
U.S. Health Care System.'' American Bar Association. (September 
2020). https://www.americanbar.org/groups/crsj/publications/
human_rights_magazine_home/health-matters-in-elections/surprise-
billing/
#:~:text=The%20%E2%80%9Csurprise%E2%80%9D%20typically%20occurs%20when
,the%20difference%20between%20what%20the.
    \108\ Sun EC, Mello MM, Moshfegh J, Baker LC, Assessment of Out-
of-Network Billing for Privately Insured Patients Receiving Care in 
In-Network Hospitals. JAMA Intern Med. 2019; 179(11):1543-1550 
(2019). doi:10.1001/jamainternmed.2019.3451.
---------------------------------------------------------------------------

    Since the passage of the Emergency Medical Treatment and Labor Act 
(EMTALA) in 1986, Medicare-participating hospitals are required to 
provide emergency services, regardless of patients' abilities to 
pay.\109\ Because of emergency physicians' legal obligation under 
EMTALA, and the inability of patients to make treatment decisions, 
including by selecting providers, in emergency settings, there are 
fewer incentives for emergency providers to contract with issuers.\110\ 
A large portion of emergency providers' costs are distributed to 
patients with health benefits, providing justification for plans, 
issuers, and FEHB carriers to offer smaller networks. Consequently, in 
recent years, plans, issuers, and FEHB carriers have been offering 
narrower networks alongside larger discounts, resulting in lower 
premiums but with fewer in-network options for consumers.\111\
---------------------------------------------------------------------------

    \109\ Centers for Medicare and Medicaid Services. ``Emergency 
Medical Treatment & Labor Act (EMTALA).'' (March 2021). https://
www.cms.gov/Regulations-and-Guidance/Legislation/
EMTALA#:~:text=In%201986%2C%20Congress%20enacted%20the,regardless%20o
f%20ability%20to%20pay.
    \110\ Brannon, Ike and David Kemp. ``The Potential Pitfalls of 
Combatting Surprise Billing.'' CATO Institute. (Fall 2019). https://www.cato.org/sites/cato.org/files/2019-10/regulation-v42n3-1-updated.pdf.
    \111\ Brannon, Ike and David Kemp. ``The Potential Pitfalls of 
Combatting Surprise Billing.'' CATO Institute. (Fall 2019). https://www.cato.org/sites/cato.org/files/2019-10/regulation-v42n3-1-updated.pdf. See also Polsky, D, Cidav Z., Swanson A. ``Marketplace 
Plans With Narrow Physician Networks Feature Lower Monthly Premiums 
Than Plans With Larger Networks.'' Health Affairs. (October 2016). 
https://www.healthaffairs.org/doi/10.1377/hlthaff.2016.0693.
---------------------------------------------------------------------------

    An additional factor contributing to the current environment is the 
increasing participation of private equity groups in the health care 
market through the acquisition of physician groups.\112\ 
Anesthesiology, emergency medicine, family practice, and dermatology 
were the most common medical specialties in acquired physician 
groups.\113\ The private equity business model often centers on risky 
investments with short-term horizons. These firms often take on large 
amounts of debt to acquire an asset, then introduce structural and 
operational changes to extract value or increase revenue growth 
potential in the aim of selling the asset for a higher valuation.\114\ 
These firms often take on legally complex governance structures 
designed to protect the private equity firms from regulatory 
liability.\115\ By 2013, two private equity firms accounted for 30 
percent of the physician staffing market.\116\ One study found that in 
2017, hospitals acquired by private equity groups accounted for 7.5 
percent of all nongovernmental hospitals and 11 percent of all 
discharges from nongovernmental hospitals.\117\ Private equity groups 
are also involved in air ambulance transport services. In 2018, two of 
the three

[[Page 56047]]

largest air ambulance transport companies were owned by private equity 
firms.\118\
---------------------------------------------------------------------------

    \112\ Zhu, Jane M., Lynn M. Hua, and Daniel Polsky. ``Private 
Equity Acquisitions of Physician Medical Groups across Specialties, 
2013-2016.'' 323 JAMA 7 (2020): 663-665.
    \113\ Zhu, Jane M., Lynn M. Hua, and Daniel Polsky. ``Private 
Equity Acquisitions of Physician Medical Groups across Specialties, 
2013-2016.'' 323 JAMA 7 (2020): 663-665.
    \114\ Konda S, Francis J, Motaparthi K, Grant-Kels JMGroup for 
Research of Corporatization and Private Equity in Dermatology. 
``Future Considerations for Clinical Dermatology in the Setting of 
21st Century American Policy Reform: Corporatization and the Rise of 
Private Equity in Dermatology.'' Journal of the American Academy of 
Dermatology, 2019;81(1):287-296.e8. https://www.jaad.org/article/S0190-9622(18)32667-7/fulltext.
    \115\ Appelbaum E, Batt R. ``Private Equity Buyouts in 
Healthcare: Who Wins, Who Loses?'' Institute for New Economic 
Thinking. (March 2020). https://www.ineteconomics.org/research/research-papers/private-equity-buyouts-in-healthcare-who-wins-who-loses.
    \116\ Appelbaum E, Batt R. ``Private Equity Buyouts in 
Healthcare: Who Wins, Who Loses?'' Institute for New Economic 
Thinking. (March 2020). https://www.ineteconomics.org/research/research-papers/private-equity-buyouts-in-healthcare-who-wins-who-loses.
    \117\ Offodile II, Anaeze C., et al. ``Private Equity 
Investments in Health Care: An Overview of Hospital and Health 
System Leveraged Buyouts, 2003-17.'' Health Affairs, Vol. 40(5), 
(May 2021). https://www.healthaffairs.org/doi/10.1377/hlthaff.2020.01535.
    \118\ Appelbaum E, Batt R. ``Private equity buyouts in 
healthcare: Who wins, who loses?'' Institute for New Economic 
Thinking. (March 2020). https://www.ineteconomics.org/research/research-papers/private-equity-buyouts-in-healthcare-who-wins-who-loses.
---------------------------------------------------------------------------

    In addition, some private equity firms may choose not to 
participate in plans' and issuers' networks in order to reap higher 
payments.\119\ Private equity-owned hospitals have been found to charge 
higher prices.\120\ According to one study, 204 private equity-owned 
hospitals had an annual net income averaging $8.5 million prior to 
their acquisition. After private equity groups purchased the hospitals, 
their net income rose to $12.9 million.\121\ This represents a 52 
percent increase in net income, on average. Another study found that 
the entry of two private equity firms into the hospital sector 
increased out-of-network billing rates by more than 30 and 80 
percentage points, respectively, from 2011 to 2015.\122\ The study also 
found that the payments that one private equity firm received for 
emergency department physicians from insurers increased by 122 percent 
and patient cost-sharing payments to emergency department (ED) 
physicians increased by 83 percent. Furthermore, some hospitals and 
providers do not accept private health insurance coverage. For example, 
one study found that 5 percent of physicians participated in cash-only 
practices in 2020.\123\ When billing out-of-network, these providers 
who choose to remain out-of-network can charge much higher fees than 
what public or private payers typically allow.\124\
---------------------------------------------------------------------------

    \119\ Cooper, Zack, Fiona Scott Morton, and Nathan Shekita. 
``Surprise! Out-Of-Network Billing for Emergency Care in the United 
States.'' 128 Journal of Political Economy 9. (2020).
    \120\ Bruch, Joseph D., Suhas Gondi, and Zirui Song. ``Changes 
in Hospital Income, Use, and Quality Associated with Private Equity 
Acquisition.'' 180 JAMA Internal Medicine 11 (2020): 1428-1435.
    \121\ Bruch, Joseph D., Suhas Gondi, and Zirui Song. ``Changes 
in Hospital Income, Use, and Quality Associated with Private Equity 
Acquisition.'' 180 JAMA Internal Medicine 11 (2020): 1428-1435.
    \122\ Cooper, Zack, Fiona Scott Morton, and Nathan Shekita. 
``Surprise! Out-Of-Network Billing for Emergency Care in the United 
States.'' 128 Journal of Political Economy 9. (2020).
    \123\ Oliver, Eric. ``What Percent Of Physicians are in a Cash-
Only Practice?--9 Stats.'' Becker's ASC Review (2021). https://www.beckersasc.com/benchmarking/what-percent-of-physicians-are-in-a-cash-only-practice-9-stats.html.
    \124\ Cooper, Zack, Fiona Scott Morton, and Nathan Shekita. 
``Surprise! Out-Of-Network Billing for Emergency Care in the United 
States.'' 128 Journal of Political Economy 9. (2020).
---------------------------------------------------------------------------

    The Departments and OPM seek comment on how private equity 
ownership structures may be affected by the Federal IDR process.
    Surprise billing represents a market failure, as often patients 
either do not have the option to seek care elsewhere or must make 
decisions based on incomplete information about the network status of 
providers and associated costs.\125\ This market failure is exacerbated 
by the fact that patients must rely on the guidance of the provider, 
insurer, or plan, which have financial incentives that can be contrary 
to the patient's financial interests.\126\
---------------------------------------------------------------------------

    \125\ Assistant Secretary for Planning and Evaluation. ``HHS 
Secretary's Report on: Addressing Surprise Medical Billing.'' Office 
of Health Policy. (July 2020). https://aspe.hhs.gov/system/files/pdf/263871/Surprise-Medical-Billing.pdf.
    \126\ Assistant Secretary for Planning and Evaluation. ``HHS 
Secretary's Report on: Addressing Surprise Medical Billing.'' Office 
of Health Policy. (July 2020). https://aspe.hhs.gov/system/files/pdf/263871/Surprise-Medical-Billing.pdf.
---------------------------------------------------------------------------

    As of February 28, 2021, 18 states had implemented comprehensive 
legislation \127\ regulating surprise billing, 15 states had 
implemented limited legislation, and 14 states had implemented an IDR 
system regarding out-of-network payments.\128\ However, even in states 
that have passed legislation, states cannot regulate health plans that 
are self-insured by employers.\129\
---------------------------------------------------------------------------

    \127\ The states that have passed comprehensive legislation 
include California, Colorado, Connecticut, Florida, Georgia, 
Illinois, Maine, Maryland, Michigan, New Hampshire, New Jersey, New 
Mexico, New York, Ohio, Oregon, Texas, Virginia, and Washington. The 
Commonwealth Fund. ``State Balance-Billing Protections.'' (February 
2021). https://www.commonwealthfund.org/sites/default/files/2021-03/Hoadley_state_balance_billing_protections_table_02052021.pdf.
    \128\ The states that have passed limited legislation include 
Arizona, Delaware, Indiana, Iowa, Massachusetts, Minnesota, 
Mississippi, Missouri, Nebraska, Nevada, North Carolina, 
Pennsylvania, Rhode Island, Vermont, and West Virginia. The 
Commonwealth Fund. ``State Balance-Billing Protections.'' (February 
2021). https://www.commonwealthfund.org/sites/default/files/2021-03/Hoadley_state_balance_billing_protections_table_02052021.pdf.
    \129\ The Commonwealth Fund. ``State Balance-Billing 
Protections.'' (November 2020). https://www.commonwealthfund.org/sites/default/files/2020-12/Hoadley_state_balance-billing_protections_11302020.pdf.
---------------------------------------------------------------------------

    On December 27, 2020, the Consolidated Appropriations Act, 2021 
(CAA), which includes the No Surprises Act, was enacted.\130\ The No 
Surprises Act provides Federal protections against surprise billing and 
limits out-of-network cost sharing under many of the circumstances in 
which surprise bills arise most frequently. The No Surprises Act added 
new provisions applicable to group health plans and health insurance 
issuers offering group or individual health insurance coverage in 
Subchapter B of chapter 100 of the Code, Part 7 of ERISA, and Part D of 
title XXVII of the PHS Act. Section 102 of the No Surprises Act added 
Code section 9816, ERISA section 716, and PHS Act section 2799A-1, 
which contain limitations on cost sharing and requirements regarding 
the timing of initial payments for emergency services furnished by 
nonparticipating providers and emergency facilities, and for 
nonemergency services furnished by nonparticipating providers at 
certain participating health care facilities. Section 102 of the No 
Surprises Act also added 5 U.S.C. 8902(p) requiring FEHB carriers, 
facilities, and providers to comply with requirements described in 
applicable provisions with respect to FEHB covered individuals. Section 
103 of the No Surprises Act amended Code section 9816, ERISA section 
716, and PHS Act section 2799A-1 to establish a Federal IDR process 
that allows plans and issuers and nonparticipating providers and 
facilities to resolve disputes regarding out-of-network rates. Section 
105 of the No Surprises Act created Code section 9817, ERISA section 
717, and PHS Act section 2799A-2, which contain limitations on cost 
sharing and requirements for the timing of initial payments for 
nonparticipating providers of air ambulance services and allow plans 
and issuers and providers of air ambulance services to access the 
Federal IDR process described in Code section 9816, ERISA section 716, 
and PHS Act section 2799A-1. The No Surprises Act provisions that apply 
to health care providers and facilities, and providers of air ambulance 
services, such as 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.
---------------------------------------------------------------------------

    \130\ Public Law 116-260 (December 27, 2020).
---------------------------------------------------------------------------

    On July 13, 2021, the Departments and OPM published the July 2021 
interim final rules.\131\ The July 2021 interim final rules implemented 
provisions of the No Surprises Act to protect participants, 
beneficiaries, and enrollees in group health plans and group and 
individual health insurance coverage from surprise medical bills when 
they receive emergency services, non-emergency services from 
nonparticipating providers at certain participating facilities, and air 
ambulance services, under certain circumstances.
---------------------------------------------------------------------------

    \131\ 86 FR 36872 (July 13, 2021).
---------------------------------------------------------------------------

    These interim final rules build upon the protections in the July 
2021 interim

[[Page 56048]]

final rules and implement the Federal IDR provisions under Code 
sections 9816(c) and 9817(b), ERISA sections 716(c) and 717(b), PHS Act 
sections 2799A-1(c) and 2799A-2(b), and 5 U.S.C. 8902(p). The Federal 
IDR process will permit group health plans, health insurance issuers 
offering group or individual health insurance coverage, FEHB carriers, 
and nonparticipating providers, facilities, and providers of air 
ambulance services to determine the out-of-network rate for items and 
services that are emergency services, nonemergency services furnished 
by nonparticipating providers at participating facilities, and air 
ambulance services furnished by nonparticipating providers of air 
ambulance services, under certain circumstances.
    Furthermore, these interim final rules extend the balance billing 
protections related to external reviews to grandfathered plans, 
including non-Federal governmental plans and individual market plans. 
The definitions of group health plan and health insurance issuer that 
are cited in section 110 of the No Surprises Act include both 
grandfathered and non-grandfathered plans and coverage. Accordingly, 
the practical effect of section 110 of the No Surprises Act is that 
grandfathered health plans must provide external review for adverse 
benefit determinations involving benefits subject to these surprise 
billing protections. Grandfathered and non-grandfathered plans must 
comply either with a state external review process or the Federal 
external review process. The disclosure requirements of the Federal 
external review process require: (1) A preliminary review by plans of 
requests for external reviews; (2) Independent Review Organizations 
(IROs) to notify claimants of eligibility and acceptance for external 
review; (3) the plan or issuer to provide IROs with documentation and 
other information considered in making adverse benefit determination; 
(4) the IRO to forward to the plan or issuer any information submitted 
by the claimant; (5) plans to notify the claimant and IRO if it 
reverses its decision; (6) the IRO to notify the claimant and plan of 
the result of the final external review; and (7) the IRO to maintain 
records for 6 years.
    Additionally, these interim final rules implement provisions of the 
No Surprises Act that require health care providers and health care 
facilities to furnish good faith estimates upon request or upon the 
scheduling of items or services for uninsured (or self-pay) 
individuals. In order to implement these good faith estimate provisions 
under PHS Act section 2799B-6(1) and 2799B-6(2)(B), as added by section 
112 of the No Surprises Act, HHS is adding 45 CFR 149.610 to establish 
requirements for providers and facilities to specifically inquire about 
an individual's health coverage status and establish requirements for 
providing a good faith estimate to uninsured (or self-pay) individuals.
    PHS Act section 2799B-6(2) and these interim final rules specify 
that a provider or facility must provide a notification (in clear and 
understandable language) of the good faith estimate of the expected 
charges for furnishing such items or services (including any items or 
services that are reasonably expected to be provided in conjunction 
with such scheduled items or services and such items or services 
reasonably expected to be so provided by another health care provider 
or health care facility), with the expected billing and diagnostic 
codes (i.e., ICD, CPT, HCPCS, DRG and/or NDC codes) for any such items 
or services. These interim final rules include definitions of certain 
terms, requirements for the providers and facilities, content 
requirements, and methods and manner requirements for issuing good 
faith estimates consistent with the provisions of PHS Act sections 
2799B-6, 2799B-6(1), and 2799B-6(2)(B).
    PHS Act section 2799B-7, as added by section 112 of the No 
Surprises Act, provides further protections for uninsured (or self-pay) 
individuals by requiring the Secretary of HHS to establish a process 
(in this section referred to as patient-provider dispute resolution) 
under which an uninsured (or self-pay) individual who received a good 
faith estimate of expected charges from a provider or facility, and 
who, after being furnished the item or service, is billed for charges 
that are substantially in excess of the estimate, may seek a 
determination from a SDR entity of the amount to be paid. HHS is adding 
new 45 CFR 149.620 to implement this patient-provider dispute 
resolution process including specific definitions related to the 
patient-provider dispute resolution process. HHS is also codifying 
provisions related to the eligibility of an item or service for the 
patient-provider dispute resolution process, certification and 
selection of SDR entities, fees associated with the patient-provider 
dispute resolution process, and deferral to state patient-provider 
dispute resolution processes.
    Consistent with Executive Orders 13985 and 13988, and all civil 
rights laws and protections cited previously, these interim final rules 
include provisions designed to address and increase the HHS' 
understanding of barriers underserved and minority communities face in 
accessing the protections established in the No Surprises Act, 
including the provision of good faith estimates for uninsured (or self-
pay) individuals, and the process for patient-provider dispute 
resolution.
    The Departments seek comment from individuals from racial/ethnic 
minority and underserved communities, including individuals with 
vision, hearing, or language limitations, individuals with limited 
English proficiency, lesbian, gay, bisexual, transgender, and queer 
(LGBTQ+) persons, and individuals with health literacy needs, and 
providers who serve these individuals, to help identify emerging, 
persistent, or perceived barriers to individuals accessing and 
understanding these processes, rights, and protections, and other 
provisions of the No Surprises Act included in this rule, and policies 
to address and remove these barriers.
1.2. Summary of Impacts
    Plans, issuers, FEHB carriers, health care providers, facilities, 
and providers of air ambulance services will incur costs to comply with 
the requirements in these interim final rules, as discussed later in 
this section of this preamble. However, the Departments and OPM have 
determined that the benefits of these interim final rules justify the 
costs.
    The provisions in these interim final rules will help ensure that 
participants, beneficiaries, and enrollees with health coverage are 
protected from surprise medical bills. When plans, issuers, and FEHB 
carriers participate in the Federal IDR process, individuals with 
health coverage will gain peace of mind, experience a reduction in out-
of-pocket expenses, be able to meet their deductible and out-of-pocket 
maximum limits sooner, and may experience increased access to care. One 
study found that surprise billing decreased by 34 percent in New York 
State between 2015 and 2018, when the state implemented an IDR 
process.\132\ The study also found that New York's Out-of-Network Law 
\133\ saved consumers over $400 million from the date of implementation 
with respect to emergency services alone.\134\
---------------------------------------------------------------------------

    \132\ Marion Mass. ``Surprise Billing Legislation Should Put 
Independent Dispute Resolution at Its Heart.'' Morning Consult. 
(March 2020). https://morningconsult.com/opinions/surprise-billing-legislation-should-put-independent-dispute-resolution-at-its-heart/.
    \133\ NY Fin Serv L Sec.  605 (2014).
    \134\ New York State Department of Financial Services. ``New 
York's Surprise Out-Of-Network Protection Law Report on the 
Independent Dispute Resolution Process.'' (September 2019).

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

[[Page 56049]]

    The information regarding the good faith estimates furnished by 
providers and facilities will allow uninsured (or self-pay) individuals 
to have access to information about health care pricing before 
receiving care. This information will allow uninsured (or self-pay) 
individuals to evaluate options for receiving health care, make cost-
conscious health care purchasing decisions, and reduce surprises in 
relation to their health care costs for those items and services. 
Additionally, uninsured (or self-pay) individuals may use the good 
faith estimate for comparison with actual billed charges received after 
items or services are furnished. If the billed charges are 
substantially in excess of the good faith estimate, an uninsured (or 
self-pay) individual may seek a determination from an SDR entity under 
the patient-provider dispute resolution process.
    HHS will request information from uninsured (or self-pay) 
individuals in order to initiate the patient-provider dispute 
resolution process. This information will be used to help determine 
eligibility for the patient-provider dispute resolution process and is 
necessary for determining which provider or facility should be 
contacted for dispute resolution. Providers and facilities are required 
to submit information to an SDR entity to inform the SDR entity's 
payment determination decisions.
    In accordance with OMB Circular A-4, Table 1 depicts an accounting 
statement summarizing the Departments' assessment of the benefits, 
costs, and transfers associated with this regulatory action. The 
Departments are unable to quantify all benefits, costs, and transfers 
of these interim final rules but have sought, where possible, to 
describe these non-quantified impacts. The effects in Table 1 reflect 
non-quantified impacts and estimated direct monetary costs resulting 
from the provisions of these interim final rules.
TABLE 1: Accounting Statement
    Benefits:
    Non-quantified benefits of the Federal IDR process for the 
population with health coverage:
     Increased protection for participants, beneficiaries, and 
enrollees from surprise bills from out-of-network providers by creating 
a process for plans, issuers, FEHB carriers, and nonparticipating 
providers and facilities to resolve disputes regarding certain out-of-
network rates. Note that, unless specified otherwise, providers include 
providers of air ambulance services.
     Increased awareness of expected charges for items or 
services, reduction in financial anxiety and out-of-pocket expenses for 
individuals with health coverage because individuals will be able to 
meet their deductibles and out-of-pocket maximum limits sooner.
     Increased access to care for individuals with health 
coverage that may have otherwise forgone or delayed needed treatment 
due to concerns over the potential for high out-of-pocket expenses.
    Non-quantified benefits of the patient-provider dispute resolution 
process for uninsured (or self-pay) individuals:
     Increased awareness of expected charges for items or 
services, reduction in financial anxiety, more informed health care 
decisions, and protection for uninsured (or self-pay) individuals by 
requiring providers and facilities to furnish good faith estimates for 
scheduled or requested items and services.
     Improved access to care for uninsured (or self-pay) 
individuals that may have otherwise forgone or delayed needed treatment 
due to concerns over receiving unexpected large bills.
     Protection for uninsured (or self-pay) individuals from 
excessive surprise bills from providers or facilities by establishing a 
patient-provider dispute resolution process that may result in lower 
payments if the SDR entity determines the amount to be paid by the 
uninsured (or self-pay) individual to the provider or facility are 
lower than the billed charges.
    Non-quantified benefits regarding external review:
     Increased access to benefits for some individuals.
     Reduced incidence of excessive delays and inappropriate 
denials, averting serious, avoidable lapses in access to quality health 
care and resultant injuries and losses to participants, beneficiaries, 
enrollees, and FEHB covered individuals.
     Potential increase in confidence and satisfaction among 
participants, beneficiaries, and enrollees in their health care 
benefits.
     Improved awareness among plans, issuers, and FEHB carriers 
of participant, beneficiary, enrollee, FEHB covered individuals, and 
provider concerns.

                                   Costs to Plans, Issuers, and FEHB Carriers
----------------------------------------------------------------------------------------------------------------
          Costs (in millions)              Estimate       Year dollar         Discount rate       Period covered
----------------------------------------------------------------------------------------------------------------
Annualized............................         $517.12            2021  7 percent...............       2022-2031
Monetized ($/Year)....................          491.44            2021  3 percent...............       2022-2031
----------------------------------------------------------------------------------------------------------------

    The annualized cost estimates reflect estimated costs associated 
with the Federal IDR process for nonparticipating providers or 
nonparticipating emergency facilities, the Federal IDR process for 
providers of air ambulance services, IDR entity certification and 
reporting requirements, the Federal IDR process for the uninsured, SDR 
entity certification, and the extension of the external review to 
grandfathered plans and claims under certain provisions of the No 
Surprises Act. The Departments estimate a total cost of $760.95 million 
in the first year and $440.67 million going forward.
    Costs to the Government:
    The Federal Government will incur costs to build and maintain the 
Federal IDR portal and to implement and administer the patient-provider 
dispute resolution process. The maintenance costs for the Federal IDR 
portal are split between the Federal IDR process and the patient-
provider dispute resolution process, based on anticipated volume for 
each program. The costs associated with the Federal IDR portal are 
estimated to be a one-time cost of $6 million in fiscal year 2021 and 
annual costs of $1 million going forward. The costs associated with the 
patient provider dispute resolution process are estimated to be a one-
time cost of $10 million in fiscal year 2021 and an annual cost of $12 
million going forward. Additionally, the costs associated with the 
Federal external review costs are estimated to be $1.16

[[Page 56050]]

million in fiscal year 2021 and $567,000 annually going forward.
    Transfers:
    Non-quantified transfers associated with the Federal IDR process 
for the population with health coverage:
     Potential transfers from providers who had previously 
balance billed for out-of-network claims to individuals who are no 
longer responsible for paying these balance bills.
     Potential transfers from plans, issuers, and FEHB carriers 
who were previously not responsible for out-of-network balance bills to 
providers and facilities that will submit out-of-network balance bills 
to plans, issuers, and FEHB carriers as a result of the interim final 
rules.
     Potential transfers from plans, issuers, and FEHB carriers 
to participants, enrollees, and beneficiaries if the Federal IDR 
process results in lower premiums.
     Potential transfers from participants, enrollees, and 
beneficiaries to plans, issuers, and FEHB carriers if the Federal IDR 
process results in higher premiums.
     Potential transfers to the Federal Government in the form 
of reduced Premium Tax Credits if the Federal IDR process results in 
the lower premiums.
     Potential transfers from the Federal Government to 
eligible enrollees, in the form of increased Premium Tax Credits 
payments if the Federal IDR process results in an increase in premiums.
     Potential transfers from individuals with health coverage 
who pay premiums to individuals with large out-of-network bills and 
uninsured individuals if the Federal IDR process results in an increase 
in premiums.
     Potential transfers from providers, facilities, and 
providers of air ambulance services to plans, issuers, and FEHB 
carriers if some providers, facilities, and providers of air ambulance 
services collect lower out-of-network payments.
     Potential transfers between providers, facilities, and 
providers of air ambulance services and individuals with health 
coverage, depending on the weight place on the QPA in payment 
determinations under the Federal IDR process. The presumption in favor 
of the QPA in the Federal IDR process may result in transfers from 
providers and facilities to participants, beneficiaries, and enrollees.
    Non-quantified transfers associated with the patient-provider 
dispute resolution process for uninsured (or self-pay) individuals:
     Potential transfer of the patient-provider dispute 
resolution administrative fee from the provider or facility to the 
uninsured (or self-pay) individuals if the SDR entity makes a payment 
determination in favor of the uninsured (or self-pay) individual.
     Potential transfer from uninsured (or self-pay) 
individuals to providers or facilities if the SDR entity makes a 
payment determination that is higher than the good faith estimate.
    Non-quantified transfers associated with external review:
     Potential transfer from plans, issuers, and FEHB carriers 
to participants, beneficiaries, and enrollees now receiving payment for 
denied benefits.
1.3. Affected Entities
    These interim final rules will affect health care patients, health 
care providers, health care facilities, providers of air ambulance 
services, self-insured plans, issuers, and FEHB carriers.
    In 2019, there were 1,553 issuers in the U.S. health insurance 
market, of which 1,298 issuers serve the individual market, 586 issuers 
serve the small group market, and 788 issuers serve the large group 
market.\135\ Additionally, the Departments and OPM estimate that 46 
issuers are FEHB carriers. While there is a significant amount of 
research that demonstrates the prevalence of surprise billing, as 
discussed in the July 2021 interim final rules, the Departments do not 
have data on what percentage of health insurance issuers cover 
individuals who experience surprise billing. However, given the size 
and scope of insurance companies, the Departments assume that all 
health insurance issuers will be affected by these interim final rules. 
The Departments estimate that 8.5 percent, or approximately 132 issuers 
are considered small under the Small Business Administration's (SBA) 
size standards.\136\
---------------------------------------------------------------------------

    \135\ Centers for Medicare and Medicaid Services. ``Medical Loss 
Ratio Data and System Resources'' (2019). https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.
    \136\ The issuers affected by these interim final rules are 
expected to fall under the industry of Direct Health and Medical 
Insurer Carries, NAICS 524114. According to the SBA Table of Size 
Standards, an issuer is considered small if its annual receipts are 
less than $41.5 million. (See Small Business Administration. ``Table 
of Size Standards.'' (August 2019). https://www.sba.gov/document/support--table-size-standards.) Applying this standard to the 2017 
County Business Patterns and Economic Census uniformly across 
establishments, the Departments estimate that 132, or 8.5 percent of 
issuers are small. (See Census Bureau. ``2017 SUSB Annual Data 
Tables by Establishment Industry, Data by Enterprise Receipt Size.'' 
(May 2021). https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html.)
---------------------------------------------------------------------------

    Of the plans that filed a Form 5500 in 2018, 25,500 plans were 
self-insured.\137\ The Departments do not have data on what percentage 
of self-insured group health plans cover individuals who have received 
a surprise bill. The Departments request comment on how many group 
health plans will be affected by these interim final rules.
---------------------------------------------------------------------------

    \137\ Stewart, Al. ``Report to Congress: Annual Report on Self-
Insured Group Health Plans.'' (March 2021). https://www.dol.gov/sites/dolgov/files/EBSA/researchers/statistics/retirement-bulletins/annual-report-on-self-insured-group-health-plans-2021.pdf.
---------------------------------------------------------------------------

    In 2018, 296.2 million individuals had health insurance. Of the 
213.2 million individuals with private insurance, 178.4 million had 
employer-sponsored insurance and 34.8 million had other private 
insurance, including individual market coverage.\138\ One study looked 
at claims data from a large commercial issuer for the period 2010-2016 
and found that over 39 percent of emergency department visits to in-
network hospitals resulted in an out-of-network bill, and 37 percent of 
inpatient admissions to in-network hospitals resulted in at least one 
out-of-network bill.\139\ The Departments estimate that these interim 
final rules will directly affect individuals with private health 
coverage who visit an emergency room, visit a hospital, or are 
transported by an air ambulance.
---------------------------------------------------------------------------

    \138\ Employee Benefits Security Administration. ``Health 
Insurance Coverage Bulletin.'' (March 2019). https://www.dol.gov/sites/dolgov/files/EBSA/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2019.pdf.
    \139\ Sun EC, Mello MM, Moshfegh J, Baker LC, Assessment of Out-
of-Network Billing for Privately Insured Patients Receiving Care in 
In-Network Hospitals. JAMA Intern Med. 2019; 179(11):1543-1550 
(2019). doi:10.1001/jamainternmed.2019.3451.
---------------------------------------------------------------------------

    The Departments expect that the Federal IDR process will have 
overflow effects of decreasing the incidence of surprise medical bills 
in general, even for patients who do not have a claim that goes to the 
Federal IDR process. The Federal IDR process relies on a ``baseball-
style'' arbitration, in which each party submits their desired amount, 
and the certified IDR entity selects one of the two offers submitted. 
This differs from other types of arbitration, in which the arbitrator 
would often select a value between the two submissions. Accordingly, 
this process encourages each party to submit a reasonable offer. 
Further, the parties involved will need to weigh the costs associated 
with the Federal IDR process, including payment of the administrative 
fee and the certified IDR entity fee if their offer is not chosen. The 
Departments are of the view this may serve as an incentive to not only 
submit reasonable offers once the Federal IDR

[[Page 56051]]

process has been initiated, but also to conduct business in a way to 
avoid ending up in the Federal IDR process altogether. The Departments 
cannot estimate how large these overflow effects will be on a national 
basis; however, the experience in New York State provides a point of 
reference. In 2018, in New York State, surprise billing decreased by 34 
percent after the IDR process was implemented.\140\
---------------------------------------------------------------------------

    \140\ Marion Mass. ``Surprise Billing Legislation Should Put 
Independent Dispute Resolution at Its Heart.'' Morning Consult. 
(March 2020). https://morningconsult.com/opinions/surprise-billing-legislation-should-put-independent-dispute-resolution-at-its-heart/.
---------------------------------------------------------------------------

    Surprise billing occurs more often in specialties that are not 
shopped.\141\ A recent survey looked at 13.8 million visits to 35,000 
unique providers in six specialties in 2017 to estimate the percent of 
providers with at least one out-of-network claim by specialty and 
whether the procedure was inpatient or outpatient. The survey found 
that less than half of specialist providers surveyed billed at least 
once on an out-of-network basis. Their findings are shown in the last 
four columns in Table 2.\142\ The second column provides the number of 
active physicians in each specialty from the American Association of 
Medical Colleges.\143\ As set forth in Table 2, the prevalence of 
providers who bill on an out-of-network basis and the average frequency 
of visits that are billed out-of-network among providers who do bill on 
an out-of-network basis varies by specialty.
---------------------------------------------------------------------------

    \141\ Greaney, Thomas. ``Surprise Billing: A Window into the 
U.S. Health Care System.'' American Bar Association. (September 
2020). https://www.americanbar.org/groups/crsj/publications/human_rights_magazine_home/health-matters-in-elections/surprise-billing/.
    \142\ Fugelsten Biniek, Jean, et al. ``How Often Do Providers 
Bill Out of Network?'' Health Care Cost Institute. (May 2020). 
https://healthcostinstitute.org/out-of-network-billing/how-often-do-providers-bill-out-of-network.
    \143\ American Association of Medical Colleges. ``Active 
Physicians by Age and Specialty. Physician Specialty Data Report. 
(December 2019). https://www.aamc.org/data-reports/workforce/interactive-data/active-physicians-age-and-specialty-2019.
---------------------------------------------------------------------------

    The Departments estimate that 16,992 emergency and other health 
care facilities will be affected by these interim final rules, 
including 6,090 hospitals,\144\ 29,227 diagnostic and medical 
laboratories,\145\ 270 independent freestanding emergency 
departments,\146\ 9,280 ambulatory surgical centers,\147\ and 1,352 
critical access hospitals. The Departments acknowledge that this 
estimate double counts some entities, particularly with regard to 
facilities that have laboratories in-house.
---------------------------------------------------------------------------

    \144\ American Hospital Association. ``Fast Facts on U.S. 
Hospitals, 2021.'' (January 2021). https://www.aha.org/statistics/fast-facts-us-hospitals.
    \145\ IBIS World. Definitive Healthcare. ``Diagnostic & Medical 
Laboratories Industry in the US--Market Research Report?'' (May 
2021). https://www.ibisworld.com/industry-statistics/number-of-businesses/diagnostic-medical-laboratories-united-states/.
    \146\ Emergency Medicine Network. ``2018 National Emergency 
Department Inventory.'' (2021). https://www.emnet-usa.org/research/studies/nedi/nedi2018/.
    \147\ Definitive Healthcare. ``How Many Ambulatory Surgery 
Centers are in the US?'' (April 2019). https://www.definitivehc.com/blog/how-many-ascs-are-in-the-us.

                                 Table 2--Physicians With Out-of-Network Claims
----------------------------------------------------------------------------------------------------------------
                                                   Percent of providers with at     Mean percent of visits with
                                                     least one out-of-network     services billed out-of-network
                                     Number of         claim, 2017 \149\ (%)       for providers who billed out-
                                      active     -------------------------------- of-network at least once \150\
                                    physicians                                                  (%)
                                       \148\         Inpatient      Outpatient   -------------------------------
                                                                                     Inpatient      Outpatient
----------------------------------------------------------------------------------------------------------------
Emergency.......................          45,134            44.1            49.3            14.7            34.3
Pathology.......................          12,640            44.0            33.0            44.3            31.4
Radiology.......................          28,017            27.7            32.5            11.0            17.9
Anesthesiology..................          42,249            57.0            31.8            11.3            28.4
Behavioral Health/Psychiatry....          38,778            29.8            14.9            21.4            24.4
Cardiovascular..................          22,514            17.9            17.0             6.8             8.3
----------------------------------------------------------------------------------------------------------------

    As seen in Table 2, among the specialist providers considered, 
emergency physicians were most likely to bill on an out-of-network 
basis at least once; however, emergency physicians account for less 
than 5 percent of total physicians.\151\ The Departments estimate that 
15 percent, or 140,270, of physicians,\152\ on average, bill on an out-
of-network basis and will be affected by these interim final rules. The 
Departments estimate that 44.1 percent, or approximately 61,890 
physicians, practice in a small business under the SBA size 
standards.\153\ The Departments seek comment on these estimates.
---------------------------------------------------------------------------

    \148\ See American Association of Medical Colleges. ``Active 
Physicians by Age and Specialty. Physician Specialty Data Report. 
(December 2019). https://www.aamc.org/data-reports/workforce/interactive-data/active-physicians-age-and-specialty-2019.
    \149\ See Fugelsten Biniek, Jean, et al. ``How Often Do 
Providers Bill Out of Network?'' Health Care Cost Institute. (May 
2020). https://healthcostinstitute.org/out-of-network-billing/how-often-do-providers-bill-out-of-network.
    \150\ Id.
    \151\ American Association of Medical Colleges. ``Active 
Physicians by Age and Specialty.'' Physician Specialty Data Report. 
(December 2019). https://www.aamc.org/data-reports/workforce/interactive-data/active-physicians-age-and-specialty-2019. The 
American Association of Medical Colleges estimated that among the 
935,136 active physicians in the U.S. in 2019, 45,134 were emergency 
physicians (4.8 percent).
    \152\ The Departments do not have data on the percentage of 
physicians who bill out of network across all specialties; however, 
it is likely lower than the percentage of physicians who bill out of 
network across the six specialties cited in the cited study. The six 
specialties cited account for approximately 20 percent of 
physicians. Based on the information presented in Table 2, the 
Departments estimate that on average, just over 30 percent of 
physicians in these specialties had at least one out-of-network 
claim. The Departments assumes that the other 80 percent of 
physicians bill on an out-of-network basis just 10 percent of the 
time. The Departments approximate the percent of physicians who bill 
on an out-of-network basis to be: (20 percent x 32 percent) + (10 
percent x 80 percent) = 14.4 percent. As an approximation, the 
Departments round this to 15 percent.
    \153\ The physicians affected by these interim final rules are 
expected to fall under the industry of Offices of Physicians, NAICS 
62111. According to the SBA Table of Size Standards, an office of 
physicians is considered small if its annual receipts are less than 
$12.0 million. (See Small Business Administration. ``Table of Size 
Standards.'' (August 2019). https://www.sba.gov/document/support--table-size-standards.) Applying this standard to the 2017 County 
Business Patterns and Economic Census uniformly across employees, 
the Departments estimate that 61,890, or 44.1 percent of physicians 
work in an office considered a small business. (See Census Bureau. 
``2017 SUSB Annual Data Tables by Establishment Industry, Data by 
Enterprise Receipt Size.'' (May 2021). https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html.
---------------------------------------------------------------------------

    Physician staffing companies, which allow for medical facilities to 
hire the services of a medical professional without hiring the medical 
professional

[[Page 56052]]

themselves, may also be affected by these interim final rules, as they 
provide services in medical specialties that are not shopped, including 
emergency, radiology, and anesthesiology.\154\ Physician staffing 
companies often bill patients directly for services rendered.\155\ 
Within recent years, the growth of the health care staffing industry 
has accelerated, driven by staffing shortages in health care facilities 
as the population ages.\156\ A survey of 200 health care executives 
found that 85 percent of surveyed health care facility managers used 
temporary physicians within the last year, and 72 percent were seeking 
more temporary physicians.\157\ There are approximately 40 health care 
staffing firms providing these services.\158\
---------------------------------------------------------------------------

    \154\ Appelbaum, Eileen and Rosemary Batt. ``Private Equity and 
Surprise Medical Billing.'' (2021). Institute for New Economic 
Thinking. https://www.ineteconomics.org/perspectives/blog/private-equity-and-surprise-medical-billing.
    \155\ Moody's Investor Service. ``Surprise Billing Ban to 
Constrain Physician Firms' Cash Flow, Curb Negotiating Clout for Air 
Ambulances.'' (2021). https://www.moodys.com/research/Moodys-Surprise-billing-ban-to-constrain-physician-staffing-firms-cash--PBC_1263184.
    \156\ Schwartz, Chris. ``Overview of the Temporary Healthcare 
Staffing Sector.'' Blue Pencil Strategies. https://healthywork.uic.edu/wp-content/uploads/sites/452/2019/08/Temporary-Healthcare-Staffing-Fact-Sheet.pdf.
    \157\ Gooch, Kelly. ``Temporary Physicians Staffing: Why and How 
Often It Occurs.'' Becker's Hospital Review. (2020). https://www.beckershospitalreview.com/workforce/temporary-physician-staffing-why-and-how-often-it-occurs.html.
    \158\ Schwartz, Chris. ``Overview of the Temporary Healthcare 
Staffing Sector.'' Blue Pencil Strategies. https://healthywork.uic.edu/wp-content/uploads/sites/452/2019/08/Temporary-Healthcare-Staffing-Fact-Sheet.pdf.
---------------------------------------------------------------------------

    Furthermore, in 2014, it was estimated that there were 1,073 
businesses in the air ambulance service industry.\159\ One study 
estimated that between 2014 and 2017, 77 percent of air ambulance 
claims were out-of-network.\160\ The Departments do not have data on 
the number of providers of air ambulance services that submit out-of-
network claims; however, given the prevalence of out-of-network billing 
among providers of air ambulance services, the Departments assume that 
all businesses in the industry will be affected by these interim final 
rules. The Departments estimate that 59.2 percent, or approximately 635 
providers of air ambulance services, are considered small under the SBA 
size standards.\161\
---------------------------------------------------------------------------

    \159\ IBIS World. ``Air Ambulance Service Industry in the US--
Market Research Report.'' (December 2020). https://www.ibisworld.com/united-states/market-research-reports/air-ambulance-services-industry/.
    \160\ Brown, Erin, et al. ``The Unfinished Business of Air 
Ambulance Bills.'' Health Affairs Blog, March 26, 2021. https://www.healthaffairs.org/do/10.1377/hblog20210323.911379/full/.
    \161\ The providers of air ambulance services affected by these 
interim final rules are expected to fall under the industry of 
Ambulance Services, NAICS 621910. According to the SBA Table of Size 
Standards, an air ambulance service provider is considered small if 
its annual receipts are less than $16.5 million. (See Small Business 
Administration. ``Table of Size Standards.'' (August 2019). https://www.sba.gov/document/support--table-size-standards.) Applying this 
standard to the 2017 County Business Patterns and Economic Census 
uniformly across establishments, the Departments estimate that 635, 
or 59.2 percent of providers of air ambulance services are small. 
See Census Bureau. ``2017 SUSB Annual Data Tables by Establishment 
Industry, Data by Enterprise Receipt Size.'' (May 2021). https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html.
---------------------------------------------------------------------------

    IDR entities must be certified under the standards and procedures 
set forth in guidance by the Departments. In order to be certified, an 
entity must have sufficient expertise in arbitration and claims 
administration, managed care, billing and coding, medical, and legal 
matters, with sufficient staffing to make determinations within 30 
business days allowed for such payment determinations. Additionally, 
IDR entities must meet appropriate indicators of fiscal integrity and 
stability and maintain a current accreditation from a nationally 
recognized and relevant accrediting organization, such as URAC, or 
ensure that it otherwise possesses the requisite training to conduct 
payment determinations (for example, providing documentation that 
personnel employed by the IDR entity have completed arbitration 
training by the AAA, the AHLA, or a similar organization), among other 
requirements.
    The National Association of Independent Review Organizations is an 
association of URAC-accredited independent review organizations, and in 
2021, they had 29 members.\162\ While this does not represent the 
entire pool of independent review organizations, this offers insight 
into the number of potential entities that may seek certification as 
IDR entities. In 2019, New York had certified three IDR entities to 
handle the state's IDR process.\163\ In 2018, the state of New York 
accounted for 5.8 percent of the private insurance market.\164\ The 
Departments recognize that the health care and surprise billing 
experiences across states are heterogeneous; however, if this 
proportion were uniform across the country, there would be 
approximately 52 IDR entities. Based on these two benchmarks, the 
Departments estimate that there will be 50 IDR entities that will seek 
certification by the Departments. Within these 50 entities, HHS 
estimates that there will be between one and three contracted SDR 
entities, depending on the anticipated volume of patient-provider 
dispute resolution cases and other factors necessary for administering 
an efficient program.
---------------------------------------------------------------------------

    \162\ Lacewell, Linda. ``New York's Surprise Out-of-Network 
Protection Law.'' Patient Choice Coalition.'' (September 2019). 
http://www.patientchoicecoalition.com/blog/2019/11/22/report-on-the-independent-dispute-resolution-process/.
    \163\ Id.
    \164\ In 2018, 10.5 million individuals had employer-sponsored 
insurance and 1.8 million individuals had other private insurance in 
New York State, while 178.4 million individuals had employer-
sponsored insurance and 34.8 million individuals had other private 
insurance nationally. The Departments estimates New York accounts 
for 5.8 percent of the private insurance market ((10.5 + 1.8)/(178.4 
+ 34.8) = 5.8 percent). See Employee Benefits Security 
Administration. ``Health Insurance Coverage Bulletin.'' (March 
2019). https://www.dol.gov/sites/dolgov/files/EBSA/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2019.pdf.
---------------------------------------------------------------------------

    Health care providers and health care facilities are required to 
furnish a good faith estimate of expected charges to uninsured (or 
self-pay) individuals for scheduled items and services and upon 
request. In 2019, there were approximately 938,966 active 
physicians,\165\ 6,090 hospitals,\166\ 9,280 ambulatory surgical 
centers,\167\ and 1,352 critical access hospitals.\168\ As of 2019, 
there were approximately 29,349,300 uninsured individuals in the United 
States.\169\ HHS estimates that approximately 3,498,942 uninsured (or 
self-pay) individuals will be impacted by this rule requirement \170\ 
based on the

[[Page 56053]]

number of nonemergency elective procedures (surgical and non-surgical) 
performed annually multiplied by the percentage of uninsured (or self-
pay) individuals (9.2%), and HHS assumes that some uninsured 
individuals will forego elective procedures because of cost. HHS also 
assumes that a certain number of good faith estimates will be furnished 
only upon request, increasing the number of good faith estimates from 
that of the total for scheduled items and services.
---------------------------------------------------------------------------

    \165\ https://www.aamc.org/data-reports/workforce/interactive-data/active-physicians-us-doctor-medicine-us-md-degree-specialty-2019.
    \166\ https://www.aha.org/statistics/fast-facts-us-hospitals.
    \167\ https://blog.definitivehc.com/how-many-ascs-are-in-the-
us#:~:text=Currently%2C%20there%20are%20more%20than,Healthcare's%20pl
atform%20on%20surgery%20centers.
    \168\ https://www.flexmonitoring.org/historical-cah-data-0).
    \169\ This figure includes those without health insurance and 
those who have coverage under the Indian Health Service only. 
Source: https://www.kff.org/other/state-indicator/total-population/?dataView=1¤tTimeframe=0&selectedDistributions=uninsured&selectedRows=%7B%22wrapups%22:%7B%22united-states%22:%7B%7D%7D%7D&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D.
    \170\ The number is estimated as follows: 51,744,200 
nonemergency elective procedures (surgical and non-surgical) 
performed annually x 9.2% uninsured rate = 4,760,466. HHS assumes 
that some uninsured populations will forego elective procedures 
because of costs. Therefore, a 30% decrease adjustment was included 
resulting in 3,332,326. HHS also assumes a 5% adjustment for good 
faith estimate inquires only resulting in a final value of 
3,498,942. See Squitieri, Lee et al. ``Resuming Elective Surgery 
during Covid-19: Can Inpatient Hospitals Collaborate with Ambulatory 
Surgery Centers?.'' Plastic and reconstructive surgery. Global open 
vol. 9,2 e3442. 18 Feb. 2021, doi:10.1097/GOX.0000000000003442 (The 
study estimates 4,297,850 nonemergency elective procedures (surgical 
and non-surgical) are performed each month. This value was 
multiplied by 12 months = 51,574,200. HHS adjusted by approximately 
one-third of one percent to account annual increase in volume since 
study publication resulting in 51,744,200). See also KFF Health 
Insurance Coverage of the Total Population.
---------------------------------------------------------------------------

    These interim final rules also implement a patient-provider dispute 
resolution process that applies to uninsured (or self-pay) individuals 
whose billed charges exceed the expected charges in the good faith 
estimate for a provider or facility by $400 or greater. HHS does not 
have data on the percentage of how many uninsured (or self-pay) 
individuals will initiate the patient-provider dispute resolution 
process. For the purposes of the estimates in this section, HHS relied 
on the experience of New York State. From 2015 to 2018, New York State 
had a total of 1,486 disputes involving surprise bills submitted to the 
state IDR process, and 31% of these disputes (457 in all) were found 
ineligible for IDR for various reasons including 8% (approximately 36 
cases) due to being self-insured.\171\ For the purposes of this 
analysis, HHS assumes that, going forward, New York State will continue 
to see 40 IDR adjudications each year involving surprise medical bills 
for self-insured individuals. Accordingly, HHS estimates that there 
will be 26,659 claims that result in patient-provider dispute 
resolution cases each year. \172\ These interim final rules establish 
requirements that an SDR entity must meet the same certification 
standards as a certified IDR entity. HHS estimates that there will be 
between one and three contracted SDR entities depending on the 
anticipated volume of patient-provider dispute resolution cases and 
other factors necessary for administering an efficient program. HHS 
will assess if a potential SDR entity meets the certification standards 
as part of the contracting process.
---------------------------------------------------------------------------

    \171\ https://www.dfs.ny.gov/system/files/documents/2019/09/dfs_oon_idr.pdf.
    \172\ The number is estimated as follows: 51,744,200 
nonemergency elective procedures (surgical and non-surgical) 
performed annually x 9.2% uninsured rate = 4,760,466. HHS assumes 
that some uninsured (or self-pay) individuals will forego elective 
procedures because of costs. Therefore, a 30% decrease adjustment 
was included resulting in 3,332,326. HHS assumes that 10% of 
uninsured (or self-pay) individuals who undergo a nonemergency 
elective procedure will receive a billed charge that is $400 or more 
than the total expected charges in the good faith estimate for the 
provider or facility, therefore 3,332,326 x 10% = 333,232. HHS 
assumes that 8% will engage the provider-patient dispute resolution 
process, therefore 333,232 x 8% = 26,659.
---------------------------------------------------------------------------

    Furthermore, the interim final rules extend the balance billing 
protections related to external review to grandfathered plans. Prior to 
the interim final rules, the Departments estimate that there are 
approximately 8.1 million participants in ERISA-covered plans in states 
that have no external review laws or whose laws do not meet the Federal 
minimum requirements.\173\ These estimates lead to a total of 92.5 
million participants not having access to external review. Among the 
92.5 million participants, 80.5 million participants in non-
grandfathered plans and 12 million participants in grandfathered plans 
will be required to be covered by the external review requirement.
---------------------------------------------------------------------------

    \173\ These states are Alabama, Florida, Georgia, Pennsylvania, 
Texas, and Wisconsin. See Affordable Care Act: Working with States 
to Protect Consumers, available at https://www.cms.gov/CCIIO/Resources/Files/external_appeals.html.
---------------------------------------------------------------------------

    The Departments estimate that there are approximately 1.3 external 
reviews for every 10,000 participants \174\ and that there will be 
approximately 12,304 external reviews annually. Experience from North 
Carolina indicates that about 75 percent of requests for external 
reviews are actually eligible to proceed to an external review.\175\ 
Therefore, the Departments expect that there will be about 15,942 
requests for external review.\176\
---------------------------------------------------------------------------

    \174\ AHIP Center for Policy and Research, ``An Update on State 
External Review Programs, 2006,'' July 2008.
    \175\ North Carolina Department of Insurance. ``Health Insurance 
Smart NC: Annual Report on External Review Activity 2013.'' https://digital.ncdcr.gov/digital/collection/p249901coll22/id/730531.
    \176\ 12,304/0.75 = 15,942.
---------------------------------------------------------------------------

1.4. Benefits
Federal IDR Process
    In the past, information asymmetries regarding health care costs 
and provider or facility network status between individuals and plans, 
issuers, and providers have left individuals vulnerable to surprise 
billing. These interim final rules will provide a structure to guide 
the resolution of pricing disparities in a way that will prevent a 
patient's information asymmetry from resulting in a surprise bill, thus 
alleviating the market failure.
    As a result of these interim final rules, individuals with health 
coverage will only be liable for their in-network cost-sharing amounts 
when receiving care from nonparticipating providers at participating 
facilities (in certain circumstances), nonparticipating emergency 
facilities, and nonparticipating providers of air ambulance services. 
Accordingly, these individuals are likely to see lower out-of-pockets 
costs, reduced anxiety, reduced financial stress, and lower medical 
debt. Further, these payments will now count towards their deductible 
and maximum out-of-pocket limits, allowing individuals to reach those 
limits sooner. A significant number of individuals forgo or delay care 
due to the cost of care.\177\ A reduction in out-of-pocket expenses is 
likely to improve access to care and allow individuals to obtain needed 
treatment that they may otherwise have neglected or foregone due to 
concerns about the cost of care.
---------------------------------------------------------------------------

    \177\ According to a Kaiser Family Foundation analysis of 
National Health Interview Survey data, in 2019, 10.5 percent of 
adults reported forgoing or delaying medical care due to costs. 
Reference: Krutika, Amin, Gary Claxton, Giorlando Ramirez, and 
Cynthia Cox (2021). ``How Does Cost Affect Access to Care?'' 
Peterson-KFF Health System Tracker. Available at https://www.healthsystemtracker.org/chart-collection/cost-affect-access-care/.
---------------------------------------------------------------------------

    Further, these interim final rules create a system in which 
disputes may be resolved in a consistent and efficient manner. These 
interim final rules are intended to minimize reliance on the Federal 
IDR process and encourage parties to submit reasonable offers and allow 
for more efficient price discovery. By requiring the non-prevailing 
party to pay the certified IDR entity fees, these interim final rules 
increase the financial stakes for parties that submit an offer that is 
unreasonably high or low. However, if the parties agree upon a 
settlement, after initiation, but prior to determination by the 
certified IDR entity, each party must pay half of the certified IDR 
entity's fees, unless the parties agree otherwise on a method for 
allocating the fees. Thus, parties have an incentive to choose a 
settlement compared to the Federal IDR process. During negotiations, 
providers may be more willing to accept a lower price and similarly, 
plans, issuers, and FEHB carriers may be more willing to offer a higher 
price.
    Similarly, these interim final rules are intended to encourage the 
settlement of multiple claims. Under these interim final rules, the 
party that initiates the Federal IDR process is suspended from taking 
the same party to arbitration for an item or service that is the same 
or similar item or service as the qualified

[[Page 56054]]

IDR item or service already subject to a certified IDR entity's 
determination for 90 calendar days following a payment determination. 
Furthermore, these interim final rules permit multiple qualified IDR 
items and services to be batched together in a single payment 
determination proceeding to encourage efficiency; however, the batched 
items and services must involve the same provider or group of 
providers, the same facility, the same provider of air ambulance 
services, the same plan or issuer, treatments involving the same or 
similar items or services (as determined by service codes), and have to 
occur within a single 30-business-day period (or during the 90-
calendar-day suspension period). By batching similar qualified IDR 
items and services, these interim final rules may reduce the per-
service cost of the Federal IDR process and potentially the aggregate 
administrative costs, since the Federal IDR process is likely to 
exhibit at least some economies of scale.\178\ For example, the per-
service cost of a payment determination involving ten services is 
likely to be lower than the per-service cost of a payment determination 
involving five services. Thus, these interim final rules may result in 
cost savings for plans, issuers, and providers. The Departments do not 
have data or a way to estimate how prevalent batching will be, and thus 
the potential cost savings that may result, in comparison to a 
hypothetical IDR process without batching. The Departments seek comment 
and data on this topic, if available.
---------------------------------------------------------------------------

    \178\ Fielder, Matthew, Loren Adler, and Benedic, Ippolito. 
``Recommendations for Implementing the No Surprises Act.'' U.S.C.-
Brookings Schaeffer on Health Policy. (March 2021). https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2021/03/16/recommendations-for-implementing-the-no-surprises-act/.
---------------------------------------------------------------------------

    In addition, these interim final rules prohibit conflicts of 
interest in the selection of certified IDR entities. The selected 
certified IDR entity cannot be a group health plan; a health insurance 
issuer offering group health insurance coverage, individual health 
insurance coverage or short-term, limited-duration insurance; an FEHB 
carrier; or a provider, a facility or a provider of air ambulance 
services. Additionally, the selected certified IDR entity cannot be an 
affiliate of a group health plan; a health insurance issuer offering 
group health insurance coverage, individual health insurance coverage 
or short-term, limited-duration insurance; an FEHB carrier; or a 
provider, a facility or a provider of air ambulance services. The 
selected certified IDR entity cannot be an affiliate or subsidiary of a 
professional or trade association representing group health plans; 
health insurance issuers; FEHB carriers; or providers, facilities, or 
providers of air ambulance services. Also, the selected certified IDR 
entity and its personnel cannot have a material familial, financial, or 
professional relationship with a party to the payment determination 
being disputed. By prohibiting conflicts of interest, these interim 
final rules will help ensure that the selected certified IDR entity 
will take both parties into full consideration during arbitration and 
ensure that the resolution of the dispute is conducted fairly.
    Furthermore, these interim final rules dictate what factors the 
certified IDR entities may consider for their decisions. Specifically, 
these interim final rules require that certified IDR entities consider 
the QPA and requires them to consider other relevant factors, to the 
extent credible information is provided by the parties, while not 
allowing for the consideration of usual and customary rates, billed 
charges of the provider, or public payor rates, such as those of 
Medicare, Medicaid, the Children's Health Insurance Program, TRICARE, 
chapter 17 of title 38, United States Code, or demonstration projects 
under title XI of the Social Security Act.
    The Departments seek comment addressing the benefits that will be 
associated with these interim final rules. The Departments also seek 
comment on how the interim final rules will affect individuals from 
minority and underserved communities and providers who serve these 
individuals.
Protections for the Uninsured
    Health insurance and health care costs are critical determinants of 
access to health care and are central reasons for existing health 
inequities.\179\ In the past decade, while overall rates of health 
insurance coverage have increased, the rates of health insurance 
coverage among most minority groups continue to be disproportionately 
lower than among non-minority groups. Estimates from the Centers for 
Disease Control and Prevention (CDC) National Health Interview Survey 
(NHIS), suggest that approximately 30 million U.S. residents lacked 
health insurance in the first half of 2020.\180\ Prior to the COVID-19 
pandemic, according to information collected in the Current Population 
Survey Annual Social and Economic Supplement (CPS ASEC) and the 
American Community Survey (ACS), in 2019, 8.0% of people, or 26.1 
million individuals, did not have health insurance at any point during 
the year.\181\ Additionally, the most recent ACS data documents the 
largest annual increase in the number of uninsured children from 2018 
to 2019 since the survey began asking about health insurance in 2008. 
The child uninsured rate increased from 5.2% in 2018 to 5.7% in 
2019.\182\
---------------------------------------------------------------------------

    \179\ ``Mirror, Mirror 2021: Reflecting Poorly.'' The 
Commonwealth Fund (2021). https://www.commonwealthfund.org/publications/fund-reports/2021/aug/mirror-mirror-2021-reflecting-poorly.
    \180\ ``Trends in the US Uninsured Population 2010-2020.'' APSE 
Office of Health Policy (2020). https://aspe.hhs.gov/system/files/pdf/265041/trends-in-the-us-uninsured.pdf.
    \181\ Keisler-Starkey, Katherine and Lisa N. Bunch. ``Health 
Insurance Coverage in the United States: 2019.'' (2020) https://www.census.gov/library/publications/2020/demo/p60-271.html.
    \182\ ``Census Data Show Largest Annual Increase in Number of 
Uninsured Children in More Than a Decade.'' https://ccf.georgetown.edu/2020/09/15/census-data-show-decades-largest-annual-increase-in-number-of-uninsured-children/.
---------------------------------------------------------------------------

    The provisions in these interim final rules will protect uninsured 
(or self-pay) individuals by allowing them to obtain a good faith 
estimate of expected charges from providers and facilities prior to 
receiving scheduled items and services and upon request. With this 
information, uninsured (or self-pay) individuals may be more likely to 
consider and compare costs across providers or facilities prior to or 
upon scheduling an item or service to help inform decisions regarding 
costs for an item or service. Additionally, these interim final rules 
protect these uninsured (or self-pay) individuals from receiving 
excessive surprise bills from providers and facilities, and allow an 
uninsured (or self-pay) individual to seek a determination through the 
patient-provider dispute resolution process if billed charges for items 
or services from a provider or facility are substantially in excess of 
the expected charges listed on the good faith estimate.
    The patient-provider dispute resolution process further protects 
uninsured (or self-pay) individuals as the process may result in lower 
payments. During the dispute resolution process, the SDR entity must 
review any documentation submitted by the uninsured (or self-pay) 
individual or their authorized representative, or a provider or 
facility, and must make a determination as to whether the health care 
provider or health care facility has provided credible information for 
each billed item or service, including an item or service that did not 
originally appear on the good faith estimate, to demonstrate that the 
difference between the billed charge and the expected

[[Page 56055]]

charge in the good faith estimate reflects the costs of a medically 
necessary item or service and is based on unforeseen circumstances that 
could not have reasonably been anticipated by the provider or facility 
when the good faith estimate was provided. HHS is of the view that this 
helps ensure that the SDR entity review is comprehensive and that the 
facts and circumstances for the billed charge for each item or service 
are considered by the SDR entity. HHS is also of the view that this 
approach ensures that the uninsured (or self-pay) individual is only 
billed charges that reflect medically necessary items or services and 
are based on unforeseen circumstances that could not have reasonably 
been anticipated by the provider or facility when the good faith 
estimate was provided. This dispute resolution process protects the 
uninsured (or self-pay) individual from unexpected charges in cases 
where there are extra charges based on items or services that are not 
medically necessary, or could have been reasonably foreseen and thus 
included on the good faith estimate.
    These provisions also provide protections when an uninsured (or 
self-pay) individual receives a bill that includes providers or 
facilities that were not included in the good faith estimate, 
specifically if a co-provider or co-facility is replaced at the last 
moment by a different co-provider or co-facility. These interim final 
rules provide important consumer protections that are aimed to protect 
uninsured (or self-pay) individuals from unexpected medical bills by 
not allowing a provider or facility to essentially circumvent these 
protections simply due to not being directly represented on the good 
faith estimate. Therefore, HHS is of the view that it is necessary and 
appropriate for billed items or services of providers or facilities to 
be eligible for dispute resolution if the billed charge is 
substantially in excess of the total expected charges included in the 
good faith estimate for the original co-provider or co-facility. If the 
replacement provider or facility provides the uninsured (or self-pay) 
individual with an updated good faith estimate in accordance with 45 
CFR 149.610(b)(2) then the determination of whether an item or service 
billed by the replacement co-provider or co-facility is eligible for 
dispute resolution is based on whether the total billed charges for the 
replacement co-provider or co-facility is substantially in excess of 
the total expected charges included in the good faith estimate provided 
by the replacement co-provider or co-facility. HHS recognizes that 
these particular situations may be more complex for an uninsured (or 
self-pay) individual to determine eligibility for dispute resolution 
since the provider or facility may not be reflected in the good faith 
estimate.
    HHS is of the view that requiring an uninsured (or self-pay) 
individual to pay the entire cost of dispute resolution in cases where 
the provider or facility prevails in dispute resolution could be 
prohibitive for such an uninsured (or self-pay) individual to access 
the dispute resolution process. HHS is also concerned that requiring a 
provider or facility to pay dispute resolution costs when they do not 
prevail could impose a burden on the provider or facility and 
potentially provide an incentive for the provider or facility to raise 
prices on uninsured (or self-pay) individuals to account for potential 
dispute resolution costs or avoid treating uninsured (or self-pay) 
individuals altogether. Therefore, HHS is adopting an approach in which 
HHS will cover dispute resolution costs through contracts with SDR 
entities for the patient-provider dispute-resolution process. HHS 
estimates that the total costs to be paid for patient-provider dispute 
resolution to SDR entities to be $10,633,600.\183\ Such an approach 
ensures that the uninsured (or self-pay) individual would not be 
required to pay dispute resolution costs and as a result would not face 
a barrier to accessing the dispute resolution process. Additionally, as 
the provider or facility would not be required to pay dispute 
resolution costs, such approach would reduce the provider's or 
facility's incentives to increase prices or restrict an uninsured (or 
self-pay) individual's access to needed care.
---------------------------------------------------------------------------

    \183\ The number is estimated as follows: 51,744,200 
nonemergency elective procedures (surgical and non-surgical) 
performed annually x 9.2% uninsured rate = 4,760,466. HHS assumes 
that some uninsured (or self-pay) individuals will forgo elective 
procedures because of costs. HHS assumes that 333,232 of uninsured 
(or self-pay) individuals who undergo a nonemergency elective 
procedure will receive a billed amount that is $400 or greater more 
than the total expected charges listed in the good faith estimate 
for the provider or facility, therefore 3,332,326 x 10% = 333,232. 
The Department assumes that 8% of these individuals will engage the 
provider-patient dispute resolution process, therefore 333,232 x 8% 
= 26,659. For the first year, HHS expects the SDR fee per 
arbitration to be about $400 therefore $400 x 26,659 = $10,633,600.
---------------------------------------------------------------------------

    In addition, PHS Act section 2799B-7 requires that the Secretary of 
HHS establish an administrative fee to participate in the patient-
provider dispute resolution process in such a manner as to not create a 
barrier to an uninsured (or self-pay) individual to participate in such 
process. HHS intends to establish an administrative fee in guidance in 
a manner that will not create a barrier to an uninsured (or self-pay) 
individual's access to the patient-provider dispute resolution process. 
For the first year, HHS expects the fee to be no more than $25.
    Although HHS is of the view that requiring all parties to the 
dispute resolution to pay an administrative fee to offset some of the 
Federal costs for administering the patient-provider dispute resolution 
program is appropriate, only the non-prevailing party will be required 
to pay the administrative fee (either as a payment made directly to the 
SDR entity in the case of the uninsured (or self-pay) individual, or in 
a reduction in the final payment determination amount as in the case of 
the provider or facility). In cases where the SDR entity determines the 
payment amount the uninsured (or self-pay) individual pays is less than 
the billed charge, the SDR entity would apply a reduction equal to the 
administrative fee amount paid by the uninsured (or self-pay) 
individual to the payment amount to calculate the final payment 
determination amount to be paid by the uninsured (or self-pay) 
individual for the items or services. HHS is of the view that requiring 
the SDR entity to apply a reduction equal to the administrative fee 
paid by the uninsured (or self-pay) individual to the payment amount is 
the appropriate approach as it simplifies the number of transactions. 
HHS anticipates collecting $666,475 \184\ in administrative fees from 
an anticipated 26,659 cases, which will offset some of the costs of the 
patient-provider dispute resolution process, which is estimated to be 
$12.6 million (which includes IDR portal system maintenance and 
contracting fees for SDRs) beginning in 2022, resulting in a total cost 
to the Federal Government of approximately $12 million.
---------------------------------------------------------------------------

    \184\ The number is estimated as follows: 51,744,200 
nonemergency elective procedures (surgical and non-surgical) 
performed annually x 9.2% uninsured rate = 4,760,466. HHS assumes 
that some uninsured (or self-pay) individuals will forego elective 
procedures because of costs. HHS assumes that 333,232 of uninsured 
(or self-pay) individuals who undergo a nonemergency elective 
procedure will receive a billed charge that is at least $400 more 
than the total expected charges listed in the good faith estimate 
for the provider or facility, therefore 3,332,326 x 10% = 333,232. 
The Department assumes that 8% will engage the provider-patient 
dispute resolution process, therefore 333,232 x 8% = 26,659. For the 
first year, HHS expects the SDR fee per arbitration to be $25 
therefore $25 x 26,659 = $666,475.
---------------------------------------------------------------------------

External Review Requirements
    These interim final rules will help transform the external review 
process

[[Page 56056]]

into a more uniform and structured process. As stated earlier in this 
preamble, these interim final rules extend the balance billing 
protections related to external review to grandfathered plans. 
Grandfathered health plans must provide external review for adverse 
benefit determinations involving benefits subject to these surprise 
billing protections. Additionally, for non-grandfathered health plans 
these interim final rules clarify that, to the extent not already 
covered, that any adverse determination that involves consideration of 
whether a plan or issuer is complying with PHS Act section 2799A-1 or 
2799A-2, ERISA section 716 or 717, or Code section 9816 or 9817 is 
eligible for external review. Grandfathered and non-grandfathered plans 
must comply either with a state external review process or the Federal 
external review process. A more uniform external review process will 
provide a broad range of direct and indirect benefits that will accrue 
to varying degrees to all affected parties. In general, the Departments 
expect that these interim final rules will improve the extent to which 
group health plans, issuers, and FEHB carriers provide benefits 
consistent with the established terms of individual plans or coverages. 
This change will cause some participants to receive benefits that they 
might otherwise have been denied. Furthermore, expenditures by plans 
may be reduced as a fuller system of claims and appeals processing 
helps facilitate enrollee acceptance of cost management efforts.
    Furthermore, the more uniform standards for handling appeals and 
external review provided by these interim final rules will reduce the 
incidence of inappropriate denials, averting serious, avoidable lapses 
in access to health care and resultant injuries and losses to 
participants, beneficiaries, and enrollees. These changes also will 
enhance participants', beneficiaries', and enrollees' level of 
confidence in and satisfaction with their health care benefits and 
improve plans' awareness of participant, beneficiary, enrollee, and 
provider concerns. These changes could prompt plan and issuer responses 
that improve health care quality.
1.5. Costs
    These interim final rules seek to protect patients from surprise 
billing, while also seeking to minimize the costs to providers, 
facilities, plans, issuers, and individuals.
    The ultimate effect of the Federal IDR process on health care costs 
is uncertain. Discussions of the uncertainty and potential transfers 
that the Departments expect are included in the Transfers and 
Uncertainty sections.
1.5.1. Federal IDR Process for Nonparticipating Providers or 
Nonparticipating Emergency Facilities
    The Departments and OPM do not have data on how many claims will be 
submitted to the Federal IDR process. For the purposes of the estimates 
in this section, the Departments and OPM rely on the experience of New 
York State. In 2018, New York State had 1,014 IDR decisions, up from 
650 in 2017 and 396 in 2016.\185\ The Departments do not know what is 
causing the increasing trend or whether the trend is likely to continue 
to increase. The Departments seek comments on this trend for analytic 
purposes. In 2018, the state of New York accounted for 5.8 percent of 
the private insurance market.\186\ For purposes of this analysis, the 
Departments assume that, going forward, New York State will continue to 
see 1,000 IDR cases each year and that the number of Federal IDR cases 
will be proportional to that in New York State by share of covered 
individuals in the private health coverage market. Accordingly, the 
Departments estimate that there will be approximately 17,000 claims 
that are submitted to the Federal IDR process each year.\187\ The 
Departments seek comment on this estimate.
---------------------------------------------------------------------------

    \185\ Adler, Loren. ``Experience with New York's Arbitration 
Process for Surprise Out-of-Network Bills.'' U.S.C.-Brookings 
Schaeffer on Health Policy. (October 2019). https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2019/10/24/experience-with-new-yorks-arbitration-process-for-surprise-out-of-network-bills/.
    \186\ In 2018, 10.5 million individuals had employer-sponsored 
insurance and 1.8 million individuals had other private coverage in 
New York State, while 178.4 million individuals had employer-
sponsored coverage and 34.8 million individuals had other private 
coverage nationally. The Departments estimate that New York accounts 
for 5.8 percent of the private insurance market ((10.5 + 1.8)/(178.4 
+ 34.8) = 5.8 percent). See Employee Benefits Security 
Administration. ``Health Insurance Coverage Bulletin.'' (March 
2019). https://www.dol.gov/sites/dolgov/files/EBSA/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2019.pdf.
    \187\ This is calculated as: 1,000/0.058 = 17,333.
---------------------------------------------------------------------------

    Surprise billing decreased by 34 percent in New York State between 
2015 and 2018 when the state implemented an IDR process.\188\ While the 
number of IDR cases has been trending up, the decline in surprise 
billing is likely to result in a decline in IDR cases. Additionally, 
the usage and cost of certified IDR entities is likely to decrease when 
certified IDR entities use the QPA as the rebuttable presumption in 
payment determination, particularly after the first instance of using 
the QPA. The Departments do not have any data or experiences on which 
to base an estimate of how much use of the Federal IDR process will 
decline over time. Accordingly, in these estimates, prevalence of the 
use of the Federal IDR process is assumed to be constant; however, the 
Departments recognize that this is likely an overestimate.
---------------------------------------------------------------------------

    \188\ Marion Mass. ``Surprise Billing Legislation Should Put 
Independent Dispute Resolution at Its Heart.'' Morning Consult. 
(March 2020). https://morningconsult.com/opinions/surprise-billing-legislation-should-put-independent-dispute-resolution-at-its-heart/.
---------------------------------------------------------------------------

    The Departments estimate that the cost associated with the Federal 
IDR process for nonparticipating providers or nonparticipating 
emergency facilities will be $38.4 million. This includes an estimated 
cost of $21.1 million for paperwork requirements. For more details, 
please refer to the Paperwork Reduction Act section of this preamble.
    In addition to the paperwork costs for the Federal IDR process, the 
Departments estimate that it will take, a medical and health services 
manager 2 hours and a clerical worker 15 minutes on average to prepare 
materials for open negotiation for each plan, issuer, or FEHB carrier 
and provider or facility. The Departments estimate that 25 percent of 
disputes will be resolved in open negotiation before entering the 
Federal IDR process. The Departments request data or comments on this 
assumption. Accordingly, the Departments estimate that 23,111 claims 
will go through open negotiation.\189\ This results in a cost of $10.3 
million.\190\
---------------------------------------------------------------------------

    \189\ This is calculated 17,333/(1-0.25) = 23,111.
    \190\ The burden is estimated as follows: 23,111 claims x 2 
hours + 23,111 claims x 0.25 hour = 51,999 hours. A labor rate of 
$105.01 is used for a medical and health services manager and a 
labor rate of $55.23 is used for a clerical worker. The labor rates 
are applied in the following calculation: 23,111 claims x 2 hours x 
$105.01 + 23,111 claims x 0.5 hour x $55.23 = $5,172,803. 2 x 
$5,172,803 = $10,345,605. Labor rates are EBSA estimates.
---------------------------------------------------------------------------

    If the plan, issuer, or FEHB carrier and the provider or facility 
fail to select a certified IDR entity, the Departments will select a 
certified IDR entity through a random selection method. The Departments 
assume that in 25 percent of IDR payment determinations, a certified 
IDR entity will not be selected by the parties. The Departments request 
comment on this assumption.
    Furthermore, the party whose offer was not chosen by the certified 
IDR entity must pay the certified IDR entity fee, in addition to the 
administrative fee (required to be paid by both parties upon initiation 
of the IDR process). However, if the parties agreed upon an out-of-
network rate, the certified IDR entity fee must be divided equally

[[Page 56057]]

between the parties, unless otherwise agreed to by the parties. In New 
York, IDR entities included independent review organizations who 
contracted with board certified physicians and other insurance contract 
experts.\191\ The fees charged by IDR entities in New York ranged from 
$300 to $600.\192\ In Texas, the state contracted with individual 
attorneys to provide IDR entities. In Texas, fixed fees ranged from 
$270 to $6,000.\193\ Based on these ranges, the Departments estimate 
that on average the certified IDR entity fees will be approximately 
$400. This results in a cost of $6.9 million.\194\
---------------------------------------------------------------------------

    \191\ Kaiser Family Foundation. ``Surprise Medical Bills: New 
Protections for Consumers Take Effect in 2022.'' (2019). https://www.kff.org/private-insurance/fact-sheet/surprise-medical-bills-new-protections-for-consumers-take-effect-in-2022/.
    \192\ The Commonwealth Fund. ``How States are Using Independent 
Dispute Resolution to Resolve Out-of-Network Payments in Surprise 
Billing.'' (February 2020). https://www.commonwealthfund.org/blog/2020/how-states-are-using-independent-dispute-resolution-resolve-out-network-payments-surprise.
    \193\ Kaiser Family Foundation. ``Surprise Medical Bills: New 
Protections for Consumers Take Effect in 2022.'' (2019). https://www.kff.org/private-insurance/fact-sheet/surprise-medical-bills-new-protections-for-consumers-take-effect-in-2022/.
    \194\ The cost is estimated as follows: (17,333 x $400) = 
$6,933,200.
---------------------------------------------------------------------------

1.5.2. IDR Process for Air Ambulances
    In 2018, 178.4 million individuals had employer-sponsored health 
insurance and 34.8 million individuals had other private insurance, 
including individual market coverage.\195\ In 2017, the Health Cost 
Institute (HCCI) estimated that, on average, there were 33.3 air 
ambulance uses per 100,000 people,\196\ and the Government 
Accountability Office (GAO) estimated that approximately 69 percent of 
air transports resulted in an out-of-network bill.\197\ The Departments 
do not have data on what percent of out-of-network bills will proceed 
to the Federal IDR process; however, given the nature of air ambulances 
services, the Departments assume that it will be substantially higher 
than for hospital or emergency department claims. The Departments 
assume that 10 percent of out-of-network claims for air ambulance 
services will be submitted to the Federal IDR process,\198\ which would 
result in nearly 4,900 air transport payment determinations in the 
Federal IDR process each year.\199\ The Departments seek comment on 
this estimate.
---------------------------------------------------------------------------

    \195\ Employee Benefits Security Administration. ``Health 
Insurance Coverage Bulletin.'' (March 2019). https://www.dol.gov/sites/dolgov/files/EBSA/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2019.pdf.
    \196\ Hargraves, John and Aaron Bloschichak. ``Air Ambulances-
10-Year Trends in Costs and Use.'' Health Care Cost Institute. 
(2019). https://healthcostinstitute.org/emergency-room/air-ambulances-10-year-trends-in-costs-and-use.
    \197\ Government Accountability Office. ``Air Ambulance: 
Available Data Show Privately-Insured Patients are at Financial 
Risk.'' (2019). https://www.gao.gov/assets/gao-19-292.pdf.
    \198\ The Departments utilize 10 percent as an assumption to 
estimate the overall number of physicians billing out-of-network at 
least once in a year.
    \199\ The Departments estimate that of the 213.2 million 
individuals with employer-sponsored and other private health 
insurance (178.4 million individuals with employer-sponsored health 
insurance and 34.8 million individuals with other private 
insurance), there are 33.3 air transports per 100,000 individuals, 
of which 69 percent result in an out-of-network bill. The 
Departments assume that 10 percent of the out-of-network bills will 
end up in IDR. (213,200,000 x 0.000333 x 0.69 x 0.1= 4,899).
---------------------------------------------------------------------------

    The Departments estimate that the cost associated with the Federal 
IDR process for nonparticipating providers or nonparticipating 
providers of air ambulance services will be $11.1 million. This 
includes an estimated cost of $5.3 million for paperwork requirements. 
For more details, please refer to the Paperwork Reduction Act section.
    In addition to the paperwork costs, the Departments estimate that 
it will take, a medical and health services manager 2 hours and a 
clerical worker 15 minutes on average to prepare materials for open 
negotiation for each plan, issuer, or FEHB carrier and provider of air 
ambulance services. The Departments estimate that 25 percent of 
disputes will be resolved in open negotiation before entering the 
Federal IDR process. The Departments request data or comments on this 
assumption. Accordingly, the Departments estimate that 6,532 claims 
will go through open negotiation.\200\ This results in a cost of $3.8 
million.\201\
---------------------------------------------------------------------------

    \200\ This is calculated 4,899/(1-0.25) = 6,532.
    \201\ The burden is estimated as follows: 6,532 claims x 2 hours 
+ 6,532 claims x 0.25 hour = 39,190 hours. A labor rate of $105.01 
is used for a medical and health services manager and a labor rate 
of $55.23 is used for a clerical worker. The labor rates are applied 
in the following calculation: 6,532 claims x 2 hours x $105.01 + 
6,532 claims x 0.5 hour x $55.23 = $1,895,077. 2 x $1,895,077 = 
$3,790,154. Labor rates are EBSA estimates.
---------------------------------------------------------------------------

    As stated above, if the plan, issuer, or FEHB carrier, and the 
nonparticipating provider of air ambulance services fail to select a 
certified IDR entity, the Departments will select a certified IDR 
entity through a random selection method. The Departments estimate that 
in 25 percent of IDR payment determinations, a certified IDR entity 
will not be selected by the parties.
    Furthermore, the party whose offer was not chosen by the certified 
IDR entity must pay the certified IDR entity fee, in addition to the 
administrative fee (initially required to be paid by both parties upon 
initiation of the Federal IDR process). However, if the parties agree 
upon an out-of-network rate, the costs must be divided equally between 
the parties, unless otherwise agreed to by the parties. In New York, 
IDR entities included independent review organizations that contracted 
with board certified physicians and other insurance contract 
experts.\202\ The fees charged by IDR entities in New York ranged from 
$300 to $600.\203\ In Texas, the state contracted with individual 
attorneys to provide IDR entities. In Texas, fixed fees per case ranged 
from $270 to $6,000.\204\ Based on these ranges, the Departments 
estimate that on average the certified IDR entity fees will be 
approximately $400. This results in a cost of approximately $2 
million.\205\ This results in a cost of approximately $2 million.\206\
---------------------------------------------------------------------------

    \202\ Kaiser Family Foundation. ``Surprise Medical Bills: New 
Protections for Consumers Take Effect in 2022.'' (2019). https://www.kff.org/private-insurance/fact-sheet/surprise-medical-bills-new-protections-for-consumers-take-effect-in-2022/.
    \203\ The Commonwealth Fund. ``How States are Using Independent 
Dispute Resolution to Resolve Out-of-Network Payments in Surprise 
Billing.'' (February 2020). https://www.commonwealthfund.org/blog/2020/how-states-are-using-independent-dispute-resolution-resolve-out-network-payments-surprise.
    \204\ Kaiser Family Foundation. ``Surprise Medical Bills: New 
Protections for Consumers Take Effect in 2022.'' (2019). https://www.kff.org/private-insurance/fact-sheet/surprise-medical-bills-new-protections-for-consumers-take-effect-in-2022/.
    \205\ The cost is estimated as follows: (4,899 x $400) = 
$1,959,600.
    \206\ The cost is estimated as follows: (4,899 x $400) = 
$1,959,600.
---------------------------------------------------------------------------

1.5.3. Requests Extension of Time Periods for Extenuating Circumstances
    A plan, issuer, FEHB carrier, provider, facility, or provider of 
air ambulance services may request an extension regarding the time 
periods set forth in these interim final rules, other than for the 
timing of the payments, including payments to the provider, facility, 
or air ambulance services, under extenuating circumstances. To request 
an extension, entities will need to submit the Request for Extension 
due to Extenuating Circumstances form through the Federal IDR portal, 
if the extension is necessary to address delays due to matters beyond 
the control of the parties or for good cause. Additionally, they must 
attest that prompt action will be taken to ensure that the required 
action is made as soon as administratively practicable. The Departments 
estimate that the costs associated with requests for the extension of 
time periods will be $1,381 annually. For more details, please refer to 
the Paperwork Reduction Act section of this preamble.

[[Page 56058]]

1.5.4. Requirements for Certified IDR Entities
    An IDR entity must be certified under standards and procedures set 
forth in these interim final rules and in guidance promulgated by the 
Departments. For each month, certified IDR entities will be required to 
report information on their activity to the Departments. The 
Departments estimate that there will be 50 entities seeking IDR 
certification, as discussed earlier in this analysis of economic and 
paperwork burdens.
    The Departments estimate that the cost associated with the IDR 
entity certification process and reporting requirements will be 
$149,616 in the first year and $124,491 in the subsequent years. For 
more details, please refer to the Paperwork Reduction Act section.
1.5.5. External Review Requirements
    The interim final rules require grandfathered health plans to 
provide external review for adverse benefit determinations involving 
benefits subject to these surprise billing protections.
    The Departments estimate that there are approximately 84.4 million 
participants in self-insured ERISA-covered plans. Prior to the interim 
final rules, the Departments estimate that there were approximately 8.1 
million participants in ERISA-covered plans in the states which 
currently have no external review laws or whose laws do not meet the 
Federal minimum requirements. These estimates lead to a total of 92.5 
million participants. Among the 92.5 million participants, 80.5 million 
participants in non-grandfathered plans and 12 million participants in 
grandfathered plans will be required to be covered by the external 
review requirement.
    The Departments estimate that there are approximately 1.3 external 
reviews for every 10,000 participants and that there will be 
approximately 12,304 external reviews annually. Experience from North 
Carolina indicates that about 75 percent of requests for external 
review are actually eligible to proceed to an external review.\207\ 
Therefore, the Departments expect that there will be about 15,942 
requests for external review. The Departments estimate that the cost 
associated with the external review requirements for ERISA-covered 
plans will be $3.3 million.
---------------------------------------------------------------------------

    \207\ North Carolina Department of Insurance. ``Health Insurance 
Smart NC: Annual Report on External Review Activity 2013.'' https://digital.ncdcr.gov/digital/collection/p249901coll22/id/730531.
---------------------------------------------------------------------------

    Additionally, HHS estimates that there are approximately 13.5 
million individual market enrollees and 19.3 million non-Federal 
governmental plans enrollees.\208\ These estimates lead to a total of 
32.8 million total enrollees in individual market and non-Federal 
Government plans. Among the 32.8 million participants, 2.6 million are 
in grandfathered plans and 30.1 million are in non-grandfathered plans. 
HHS also added a 2 percent increase in the number of out-of-networks 
claims to capture the increase in burden on non-grandfathered plans 
resulting from the surprise billing and cost sharing protections of the 
external review requirements, resulting in an adjusted total of 30.7 
million participants for non-grandfathered plans and an adjusted total 
of 33.3 million participants for all individual market and non-Federal 
Government plans.
---------------------------------------------------------------------------

    \208\ Individual market based on data from MLR annual report for 
the 2019 MLR reporting year, available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr. Non-federal government plans data from 
Agency for Healthcare Research and Quality, Center for Financing, 
Access and Cost Trends. 2019 Medical Expenditure Panel Survey-
Insurance Component.
---------------------------------------------------------------------------

    HHS also estimates there are an estimated 1.3 external reviews for 
every 10,000 participants and that there will be approximately 4,337 
total external reviews annually for individual market and non-Federal 
Government plans. This amount includes 3,994 reviews for non-
grandfathered plans and 343 for grandfathered plans. Experience from 
North Carolina indicates that about 75 percent of requests for external 
reviews are actually eligible to proceed to an external review, 
therefore it is expected that there will be about 5,783 requests for 
external review. This amount includes 5,326 requests for non-
grandfathered plans and 457 requests for grandfathered plans. HHS 
estimates that the cost associated with the external review 
requirements for individual market and non-Federal Government plans 
will be $241,850.
    In summary, the Departments estimate that the total annual cost 
associated with the External Review for DOL will be $3.3 million and 
the total annual cost associated with the External Review for HHS will 
be will be $0.2 million. For more details, see the Paperwork Reduction 
Act section.
1.5.6. Protections for the Uninsured
    These interim final rules seek to protect uninsured (or self-pay) 
individuals from surprise billing through two mechanisms: The provision 
of good faith estimates from providers and facilities and the patient-
provider dispute resolution process to resolve billing disputes when an 
uninsured (or self-pay) individual receives a bill for charges that are 
substantially in excess of the expected charges listed in the good 
faith estimates.
1.5.7. Good Faith Estimates
    As discussed in the Paperwork Reduction Act section of this 
preamble, HHS estimates the total annual burden to convening providers 
or facilities to notify uninsured (or self-pay) individuals of the 
availability of good faith estimates to be approximately 2,743,283 
hours with an equivalent cost of $320,250,167. HHS estimates the annual 
cost to a convening provider or facility to provide a good faith 
estimate of expected charges to uninsured (or self-pay) individuals for 
scheduled items and services and upon requests between 2022 and 2024 to 
be $356,727,765 and total burden hours of 3,538,305.
1.5.8. Patient-Provider Dispute Resolution Process
    As discussed in the Paperwork Reduction Act section of this 
preamble, HHS estimates the total annual burden associated with the 
patient-provider dispute resolution process for uninsured (or self-pay) 
individuals and health care providers and health care facilities to be 
approximately 255,524 hours with an equivalent cost of $29,764,646.
1.5.9. Patient-Provider SDR Entity Certification
    As discussed in the Paperwork Reduction Act section of this 
preamble, HHS estimates the total annual burden associated with the SDR 
entity certification to be 16 hours with an equivalent cost of $1,873 
in the first year. In subsequent years, the total hour burden 
associated with the SDR entity certification or recertification is 2.25 
hours with an equivalent cost of $257. HHS seeks comment on the 
assumptions and calculations made in the corresponding Information 
Collection Request (ICR). The Departments also seek comment on the 
estimates presented in this section and on any additional costs 
incurred by patients, providers, providers of air ambulance services, 
facilities and uninsured (or self-pay) individuals.
1.5.10. Summary
    The Departments estimate the total cost burden associated with 
these interim final rules to be $760.95 million in the first year, with 
$38.43 million attributable to the Federal IDR process for 
nonparticipating providers or nonparticipating emergency facilities or

[[Page 56059]]

group health plans or health insurance issuers offering health 
insurance coverage, $11.08 million attributable to the Federal IDR 
process for air ambulance services; $149,616 attributable to costs 
associated with certification and recordkeeping requirements for 
certified IDR entities, $4.02 million attributable to the external 
review process, and $706.7 million attributable to the patient-provider 
dispute resolution process.
    The Departments seek comment addressing the costs that will be 
associated with these interim final rules. The Departments also seek 
comment on how these interim final rules will affect individuals from 
minority and underserved communities, and providers and facilities who 
serve these individuals.
1.6. Transfers
    These interim final rules will protect patients from surprise bills 
for emergency and nonemergency medical services and air ambulance 
services. The Departments and OPM recognize this as transfers between 
individuals, plans, issuers, FEHB carriers, and providers, facilities, 
and providers of air ambulance services. The Departments and OPM expect 
that these interim final rules will result in some transfers from 
providers, facilities, and providers of air ambulance services to 
individuals, some transfers from plans, issuers, and FEHB carriers to 
providers, facilities, and providers of air ambulance services, and 
some transfers from individuals to plans, issuers, and FEHB carriers 
and providers, facilities, and providers of air ambulance services. The 
magnitude of each of these transfers is uncertain, and as such, the 
ultimate effect of the Federal IDR process on each of entity is largely 
uncertain.
    These interim final rules may result in lower out-of-pocket 
spending by individuals, as these interim final rules are expected to 
decrease surprise billing. This result would follow from two types of 
transfers: Transfers from providers, facilities, and providers of air 
ambulance services who had previously balance billed individuals for 
out-of-network claims to individuals who would have received those 
balance bills, and transfers from plans, issuers, and FEHB carriers who 
were previously not responsible for out-of-network bills to providers 
who would submit out-of-network bills to plans, issuer, and FEHB 
carriers as a result of these interim final rules. The Departments 
request comment or data on how large each of these transfers might be.
    As shown in Table 3, the mean provider charges relative to Medicare 
payment rates differ across physician specialties, and the ratios for 
specialties in which surprise billing is more common have a higher 
ratio of mean provider charges relative to Medicare payments rates than 
those specialties for which surprise billing is less common. These 
higher rates have been linked to the fact that patients are not able to 
select providers in these specialties, leaving patients more vulnerable 
to surprise billing.\209\ The Departments expect that the proposed 
interim final rules will lead to the ratio of mean provider charges to 
Medicare payment rates to converge with specialties with comparatively 
infrequent surprise billing.
---------------------------------------------------------------------------

    \209\ See Hannick, Kathleen and Loren Adler. ``Provider Charges 
Relative to Medicare Rates, 2012-2018.'' USC-Brookings Schaeffer on 
Health Policy. (May 2021). https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2021/05/03/provider-charges-relative-to-medicare-rates-2012-2018/.

  Table 3--Ratio of Mean Provider Charges to Medicare Payment Rates by
                                Specialty
------------------------------------------------------------------------
                                                           Mean ratios,
                        Specialty                           2018 \210\
------------------------------------------------------------------------
              Specialties with infrequent surprise billing
------------------------------------------------------------------------
Family Practice.........................................             2.1
Internal Medicine.......................................             2.2
Primary Care............................................             2.2
Dermatology.............................................             2.1
------------------------------------------------------------------------
               Specialties with frequent surprise billing
------------------------------------------------------------------------
Anesthesiology..........................................             7.0
Emergency Medicine......................................             5.7
Diagnostic Radiology....................................             4.0
Pathology...............................................             2.7
------------------------------------------------------------------------

    Further, research finds that New York's Out-of-Network Law \211\ 
has saved consumers over $400 million from the date of implementation, 
March 2015, through the end of 2018 with respect to emergency services 
alone.\212\ These savings have been realized in part through a 
reduction in costs associated with emergency services and an increased 
incentive for network participation. By establishing an IDR process for 
out-of-network emergency services, the Out-of-Network Law reduced out-
of-network billing by 34 percent and lowered in-network emergency 
physician payments by 9 percent.\213\
---------------------------------------------------------------------------

    \210\ See Hannick, Kathleen and Loren Adler. ``Provider Charges 
Relative to Medicare Rates, 2012-2018.'' USC-Brookings Schaeffer on 
Health Policy. (May 2021). https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2021/05/03/provider-charges-relative-to-medicare-rates-2012-2018/.
    \211\ NY Fin Serv L Sec.  605 (2014).
    \212\ New York State Department of Financial Services. ``New 
York's Surprise Out-Of-Network Protection Law Report on the 
Independent Dispute Resolution Process.'' (September 2019). https://www.pacep.net/assets/documents/NYReportontheIDRProcess.pdf.
    \213\ Cooper, Zack, Fiona Scott Morton, and Nathan Shekita. 
``Surprise! Out-Of-Network Billing for Emergency Care in the United 
States.'' 128 Journal of Political Economy 9. (2020).
---------------------------------------------------------------------------

    The interim final rules are expected to have an effect on premiums, 
although there is uncertainty around how premiums will ultimately be 
affected. The Congressional Budget Office estimated the provisions in 
the No Surprises Act are likely to reduce premiums by 0.5 percent to 1 
percent in most years.\214\ In comparison, the CMS's Office of the 
Actuary (OACT) estimated the provisions are likely to increase premiums 
by 0.00 percent to 0.35 percent.\215\ Neither of these estimates 
isolate the effect attributable to the Federal IDR process.
---------------------------------------------------------------------------

    \214\ Congressional Budget Office. ``Estimate for Divisions O 
Through FF. H.R. 133, Consolidated Appropriations Act, 2021. Public 
Law 116-260.'' https://www.cbo.gov/system/files/2021-01/PL_116-260_div%20O-FF.pdf.
    \215\ The OACT analysis assumed that an individuals' cost-
sharing is limited to their in-network cost-sharing amounts and that 
plans and issuers are responsible for any excess of the allowed 
amounts for nonparticipating providers over in-network reimbursement 
rates. OACT assumed that that the average allowed amounts for 
services provided by nonparticipating providers will remain higher 
than in-network reimbursement rates after the No Surprises Act takes 
effect. OACT estimated a range of values for out-of-network allowed 
charges between 125 percent and 150 percent of average network 
rates. OACT assumed that these estimated levels reflected the 
Federal IDR process but did not make any explicit assumptions about 
the separate impact of the Federal IDR process.
---------------------------------------------------------------------------

    The ultimate effect on premiums will depend on how much plans, 
issuers, FEHB carriers, and providers, facilities, and providers of air 
ambulance services will use the Federal IDR process and how the Federal 
IDR process affects plan, issuer, and FEHB carrier liability. If 
payments to providers decrease, this change may result in a decrease in 
premiums. This decrease in premiums will result in a transfer from 
providers and facilities to participants, enrollees, or beneficiaries 
through plans, issuers, and FEHB carriers. Additionally, this could 
result in a transfer from eligible enrollees to the Federal Government 
in the form of reduced payment of the Premium Tax Credits (PTC). 
Conversely, if payments to providers increase, the expenditures for 
plans, issuers, and FEHB carriers may be passed on to consumers in the 
form of increased premiums. This could result in three types of 
transfers: (1) From the participants, enrollees, and beneficiaries to 
the plans, issuers, and FEHB carriers; (2) from the Federal Government 
to

[[Page 56060]]

eligible enrollees in the form of increased PTC; and (3) from insured 
individuals who pay premiums to individuals with large out-of-network 
bills.
    In addition, these interim final rules may affect in-network and 
out-of-network rates received by physicians. It is possible that the 
out-of-network rates collected by some providers, facilities, and 
providers of air ambulance services will be lower than they would have 
been if not for the provisions in these interim final rules. There is 
also uncertainty around how these interim final rules will affect the 
negotiation dynamics between providers, facilities, plans, issuers, and 
FEHB carriers regarding health care costs.
    As evidenced in states where arbitrators are directed to base their 
determinations on billed charges, there have been increased health care 
costs as a result of the out-of-network payment standard being higher 
than that in-network rate.\216\ However, as noted in an analysis by the 
USC.-Brookings Schaeffer Initiative for Health Policy, if certified IDR 
entities base their determinations on median in-network rates, which 
are typically lower than billed charges, the IDR process could place 
downward pressure on health care costs and premiums. If certified IDR 
entities choose amounts that are above median in-network rates, this 
could result in a potential increase in costs and premiums.\217\ For 
example, in New York, providers prevailed in IDR at nearly twice the 
rate that issuers prevailed. In the state, arbiters are told to 
consider the 80th percentile of billed charges in their decision 
process. A study found that even when deciding in favor of health 
plans, arbitrations averaged just 11 percent below the 80th percentile 
of charges, which is consistently above the typical in-network or out-
of-network rates. This result implies that plans, issuers, and FEHB 
carriers only won in arbitration when paying above-market rates.\218\
---------------------------------------------------------------------------

    \216\ Ollove, Michael. Laws to Curb Surprise Medical Bills Might 
Be Inflating Health Care Costs. PEW. (2021. https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2021/05/20/laws-to-curb-surprise-medical-bills-might-be-inflating-health-care-costs.
    \217\ Adler, Loren, et al. ``Understanding the No Surprises 
Act.'' USC-Brookings Schaeffer on Health Policy. (2021). https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2021/02/04/understanding-the-no-surprises-act/.
    \218\ Adler, Loren. ``Experience with New York's Arbitration 
Process for Surprise Out-of-Network Bills.'' USC-Brookings Schaeffer 
on Health Policy. (October 2019). https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2019/10/24/experience-with-new-yorks-arbitration-process-for-surprise-out-of-network-bills/.
---------------------------------------------------------------------------

    Further, in the Federal IDR process, certified IDR entities are 
required to consider credible information about additional factors such 
as providers' expertise and patient characteristics after beginning 
with a presumption in favor of the QPA, making it beneficial for a 
provider or facility to initiate the process when they expect to be 
paid more than the median in-network rate. A report from the 
Congressional Budget Office noted that some providers, particularly 
those with more specialized services, may be able to negotiate for 
larger payments from insurers by threatening to initiate the Federal 
IDR process.\219\ This outcome could result in a transfer from plans, 
issuers, and FEHB carriers to providers. Furthermore, this outcome 
could also result in higher premiums, which could ultimately result in 
a transfer from patients to providers.\220\
---------------------------------------------------------------------------

    \219\ Congressional Budget Office Cost Estimate. ``H.R. 2328, 
Reauthorizing and Extending America's Community Health Act.'' 
(September 2019). https://www.cbo.gov/system/files/2019-09/hr2328.pdf.
    \220\ Congressional Budget Office Cost Estimate. ``H.R. 2328, 
Reauthorizing and Extending America's Community Health Act.'' 
(September 2019). https://www.cbo.gov/system/files/2019-09/hr2328.pdf.
---------------------------------------------------------------------------

    In addition, these interim final rules may affect provider and 
facility payments and revenue. It is possible that the payments 
collected by some providers and facilities will be lower than they 
would have been if not for the provisions in these interim final rules. 
These interim final rules set standards requiring certified IDR 
entities to consider the QPA (typically the median in-network rate) 
when making payment determinations; the Departments expect this 
approach to have a downward impact on health care costs, potentially 
resulting in transfers from providers and facilities to individuals 
with health coverage.
    Furthermore, the external review requirements of these interim 
final rules may result in a transfer from plans, or issuers to 
participants and beneficiaries now receiving payment for denied 
benefits. These transfers will improve equity, because incorrectly 
denied benefits will be paid.
    These interim final rules also establish requirements for the 
uninsured (or self-pay) individual to submit an administrative fee 
payment when initiating the patient-provider dispute resolution process 
as provided in 45 CFR 149.620(g) and described in section IV.B.8 of 
this preamble. This requirement may result in a transfer to the 
uninsured (or self-pay) individual from the provider or issuer if the 
uninsured (or self-pay) individual prevails in the dispute resolution 
process. Under such circumstances, the SDR entity must apply a 
reduction equal to the administrative fee amount paid by the individual 
to the final determination amount for charges to be paid by the 
individual for the items or services.
1.7. Regulatory Alternatives
    Section 6(a)(3)(C)(iii) of Executive Order 12866 requires an 
economically significant regulation to include an assessment of the 
costs and benefits of potentially effective and reasonable alternatives 
to the planned regulation. The Departments considered whether the 
certified IDR entity was required to consider the QPA and permitted to 
consider other statutory factors only when a party presents clear and 
convincing evidence that the value of the qualified IDR item or service 
materially differs from the QPA due to those factors, or whether the 
certified IDR entity should be required to consider all factors 
equally.
    The Departments are of the view, however, that applying a clear and 
convincing evidence standard does not afford enough weight to the 
statutory requirement that certified IDR entities consider the 
additional permissible factors. Such a standard could result in a 
certified IDR entity failing to consider credible information a party 
provides, even where it clearly demonstrates that the QPA is materially 
different from the appropriate out-of-network rate. On the other hand, 
permitting consideration of all permissible factors equally disregards 
the weight that the No Surprises Act places on the QPA. For example, 
Code section 9816(c)(7)(B)(iii)-(iv), ERISA section 716(c)(7)(B)(iii)-
(iv), and PHS Act section 2799A-1(c)(7)(B)(iii)-(iv) require the 
Departments to report the offers as a percentage of the QPA and the 
amount of the offer selected, expressed as a percentage of the QPA. The 
statute also provides strict rules for calculating the QPA and creates 
disclosure and audit requirements regarding the QPA.
    The Departments, therefore, are of the view that starting with a 
rebuttable presumption that the QPA is the appropriate payment amount 
properly emphasizes the QPA while requiring the consideration of the 
permissible additional factors when appropriate. The QPA generally is 
based on the median of contracted rates, which are the product of 
contract negotiations between providers and facilities and plans (and 
their service providers) and issuers, and therefore generally reflect 
market rates. The statute sets out detailed rules for calculating the 
QPA, including a requirement that when

[[Page 56061]]

plans, issuers, and FEHB carriers do not have sufficient information to 
calculate their own median contracted rates, they utilize a database 
free of conflicts of interests.\221\ Plans, issuers, and FEHB carriers 
must provide specific information on how the QPA is calculated to 
nonparticipating providers and facilities, ensuring that they are aware 
of how this rate was calculated.\222\ Plans, issuers, and FEHB carriers 
are also subject to audit requirements that will be enforced by the 
Departments and OPM to ensure that they follow these standards.\223\ 
The Departments are also required to report how the out-of-network 
rates compare to the QPA, suggesting that Congress saw it as an 
appropriate analogue for the out-of-network rate.\224\ Moreover, 
starting with the QPA as the rebuttable presumption for the appropriate 
payment amount will increase the predictability of dispute resolution 
outcomes which may encourage parties to reach an agreement outside of 
the Federal IDR process to avoid the administrative costs and will aid 
in reducing prices that may have been inflated due to the practice of 
surprise billing prior to the No Surprises Act. Finally, the 
Departments are of the view that this approach will protect 
participants, beneficiaries, and enrollees from excessive costs, either 
through reduced costs for items and services or through decreased 
premiums. Therefore, in determining which offer to select, these 
interim final rules provide that the certified IDR entity must begin 
with the presumption that the QPA for the applicable year is the 
appropriate payment amount for the qualified IDR items or services. The 
certified IDR entity must, however, consider the other factors when a 
party provides credible information, and must choose the offer closest 
to the QPA, unless the credible evidence submitted by the parties 
clearly demonstrates that the QPA is materially different from the 
appropriate out-of-network rate.
---------------------------------------------------------------------------

    \221\ Code section 9816(a)(2), (3)(E); ERISA section 716(a)(2), 
(3)(E) and PHS Act section 2799A-1(a)92), (3)(E); 26 CFR 54.9816-6T, 
29 CFR 2590.716-6, and 45 CFR 149.140.
    \222\ Id.
    \223\ 86 FR 36872, 36899 (July 13, 2021).
    \224\ Code section 9816(c)(7)(A)(v), (B)(iii) and (iv); ERISA 
section 716(c)(7)(A)(v), (B)(iii) and (iv); and PHS Act section 
2799A-1(c)(7)(A)(v), (B)(iii) and (iv).
---------------------------------------------------------------------------

    As noted previously, emphasizing the QPA will allow for 
predictability. As mentioned earlier in this preamble, when the 
recognized amount is the QPA, plans, issuers, and FEHB carriers must 
provide the QPA to providers and facilities when submitting an initial 
payment amount or denial of payment, and must provide additional 
information regarding the QPA upon request. Thus, even before beginning 
negotiations, all parties involved will know that the QPA is the 
primary factor that the certified IDR entity will always consider 
(while other factors may be considered, depending on the 
circumstances). This certainty will encourage plans, issuers, 
providers, and facilities to make offers that are closer to the QPA, 
and to the extent another factor could support deviation from the QPA, 
to focus on evidence concerning that factor. This certainty may also 
encourage parties to avoid the Federal IDR process altogether and reach 
an agreement during the open negotiation period. Finally, it is 
anticipated that focusing on the QPA will help mitigate costs and 
reduce government expenditures once the Federal IDR process is fully 
implemented, as projected by the Congressional Budget Office.\225\ 
Therefore, after carefully considering both interpretations, the 
Departments chose to emphasize the QPA.
---------------------------------------------------------------------------

    \225\ Congressional Budget Office, Estimate for Divisions O 
Through FF, H.R. 133, Consolidated Appropriations Act, 2021, Public 
Law 116-260, Enacted on December 27, 2020. https://www.cbo.gov/publication/56962.
---------------------------------------------------------------------------

    Furthermore, as discussed earlier in this preamble, the Departments 
considered how to select a certified IDR entity if the parties fail to 
do so. Academic literature is inconclusive regarding whether the 
selection process of an arbitrator has an effect on the arbitration 
results. One study found significant consistency between factors 
affecting an arbitrator's decision,\226\ suggesting that the selection 
of a certified IDR entity by parties to the IDR, or the selection 
process of a certified IDR entity by the government if the parties fail 
to select a certified IDR entity, should not have a significant effect 
on the outcome. Contrarily, another study found large differences among 
arbitrator decisions; however, the authors attributed these differences 
to information disparities between parties.\227\ As the parties in the 
Federal IDR process under these interim final rules are all 
professionals with specialized knowledge in health care, these 
information disparities are expected to be minimal in the context of 
the Federal IDR process.
---------------------------------------------------------------------------

    \226\ Farber, Henry and Max Bazerman. ``The General Basis of 
Arbitrator Behavior: An Empirical Analysis of Conventional and 
Final-Offer Arbitration.'' The Econometric Society. Vol. 54(4) (July 
1986). https://www.jstor.org/stable/1912838.
    \227\ Egan, Mark, Gregor Matvos, and Amit Seru. ``Arbitration 
with Uniformed Consumers.'' National Bureau of Economic Research. 
(October 2018). https://www.nber.org/system/files/working_papers/w25150/w25150.pdf.
---------------------------------------------------------------------------

    Although the academic literature suggests that the selection of an 
IDR entity is unlikely to have a significant effect on the IDR entity's 
determination, the Departments explored options to minimize this risk. 
The Departments considered alternative approaches, including whether 
the Departments should consider the specific fee of the certified IDR 
entity, or look to other factors, such as how often the certified IDR 
entity chooses the amount closest to the QPA. However, looking to how 
often the certified IDR entity chooses the amount closest to the QPA 
could unfairly penalize certified IDR entities that have correctly 
handled decisions when there is credible information clearly 
demonstrating that the QPA is materially different from the appropriate 
out-of-network rate. Using this as a factor in assigning certified IDR 
entities could incentivize decisions that do not adequately take into 
account the other factors set forth in the statute and these interim 
final rules, even when there is credible information clearly 
demonstrating that the QPA is materially different from the appropriate 
out-of-network rate. Moreover, the consideration of other factors may 
encourage plans, issuers, FEHB carriers, or providers and facilities, 
to decline to agree to a particular certified IDR entity, thinking that 
the Departments will favor certain criteria. Given the cost controls 
applicable to the certification process, it is unlikely that the cost 
of a specific certified IDR entity will be a significant factor in the 
inability of the parties to choose a certified IDR entity.
    Thus, after carefully considering the alternatives, the Departments 
have chosen to use a random selection method to select a certified IDR 
entity with a fee within the allowed range. If there is an insufficient 
number of certified IDR entities with a fee within the allowed range 
available to arbitrate the case, the Departments will use a random 
selection method to select a certified IDR entity that has received 
approval from the Departments to charge a fee outside of the allowed 
range.
External Review
    The Departments considered different amendments to the regulations 
for external review to address the scope for non-grandfathered plans 
and issuers in light of section 110 of the No Surprises Act. Under the 
existing rules, a claim is eligible for external review under the 
Federal external review process if it involves medical judgement. The 
Departments note that the scope of

[[Page 56062]]

claims that are eligible for external review in general is broad, as 
many adverse benefit determinations involve medical judgment. The 
examples the Departments have provided of questions involving medical 
judgement (described in more detail earlier in the preamble) include 
questions involving health care setting, level of care, or 
effectiveness of a covered benefit, whether treatment involved 
``emergency care'' or ``urgent care,'' affecting coverage, and how a 
claim is coded. The Departments note that the state external review 
process also extends to questions involving the requirements for 
medical necessity, appropriateness, health care setting, level of care, 
or effectiveness of a covered benefit. The Departments are of the view 
that many claims that result in an adverse benefit determination 
involving items and services subject to the surprise billing and cost-
sharing protections under the No Surprises Act generally would be 
eligible for external review under the current scope as specified in 
the 2015 final regulations. However, as stated above, section 110 of 
the No Surprises Act directs the Departments to require the external 
review process under PHS Act section 2719 to apply with respect to any 
adverse determination by a plan or issuer under PHS Act section 2799A-1 
or 2799A-2, ERISA section 716 or 717, or Code section 9816 or 9817, 
including with respect to whether an item or service that is subject to 
such a determination is an item or service to which the respective 
section applies. The Departments are of the view that it is important 
to ensure that consumers can avail themselves of external review in 
these situations and ensure that they are afforded full protection 
against surprise medical costs (including cost sharing), as intended by 
the No Surprises Act. Accordingly, these interim final rules amend the 
2015 final rules to broaden the scope of external review requirements 
and explicitly require, to the extent not already covered, that any 
adverse determination that involves consideration of whether a plan or 
issuer is complying with PHS Act section 2799A-1 or 2799A-2, ERISA 
section 716 or 717, or Code section 9816 or 9817 is eligible for 
external review.
    HHS considered certain other approaches to furnishing good faith 
estimates to uninsured (or self-pay) individuals. HHS considered 
notification of the availability of good faith estimates using only 
broad outreach efforts and not, in addition to, specifically requiring 
that providers or facilities inform uninsured (or self-pay) individuals 
of the availability of good faith estimates. However, HHS is of the 
view that uninsured (or self-pay) individuals are more acutely aware of 
and concerned about health care costs when engaging with providers and 
facilities. Not requiring providers or facilities to notify uninsured 
(or self-pay) individuals of the availability of good faith estimates 
would potentially deprive uninsured (or self-pay) individuals of the 
ability to avail themselves of these important consumer protections 
under the No Surprises Act.
    HHS considered requiring good faith estimates for each instance of 
a recurring item or service with the same expected charges. HHS is of 
the view that to do so would unnecessarily increase the burden on 
providers and facilities, particularly for those items and services 
furnished weekly or more than once per week, without adding additional 
informational value for the uninsured (or self-pay) individual. HHS is 
of the view that, while a single good faith estimate for certain 
recurring items and services is sufficient, establishing certain 
limitations is necessary in order to confirm and periodically evaluate 
the accuracy of the information included in the good faith estimate. 
For instance, HHS includes requirements that limit the applicability of 
a good faith estimate for recurring items and services to no longer 
than 12 months. If additional recurrences of furnishing such items or 
services are expected beyond 12 months, a convening provider or 
convening facility must provide an uninsured (or self-pay) individual 
with a new good faith estimate.
    HHS also considered requiring the use of standardized notices for 
good faith estimates issued to uninsured (or self-pay) individuals. 
However, HHS is of the view that requiring the use of such model 
notices for good faith estimates would not allow providers or 
facilities necessary flexibilities to develop notices that would be 
most effective for their patient populations.
    HHS also considered basing the substantially in excess threshold as 
equal to only a percentage of the expected charges in the good faith 
estimate; however HHS has concerns that such an approach could make 
dispute resolution easier to access for items or services where the 
expected charges are small, which would include circumstances where the 
difference between the billed charge and the expected charges in the 
good faith estimate is too small to justify the costs of dispute 
resolution. Alternatively, when the total expected charges in the good 
faith estimate are very high, few items or services could be subject to 
dispute resolution, despite significant unexpected charges. HHS also 
considered other approaches to defining the ``substantially in excess'' 
standard, including setting it as the lesser of a specific percentage 
of the total expected charges in the good faith estimate or a flat 
maximum dollar amount, or based on a percentage of the expected charges 
in the good faith estimate that varies depending on the expected costs 
of the items or service. Although these approaches would mitigate some 
of the concerns discussed previously and would make it easier for 
higher cost items or services to meet the substantially in excess 
threshold, these approaches would increase concerns that dispute 
resolution for lower cost services could be overused, thus potentially 
increasing costs for providers and facilities and potentially 
increasing costs for such items or services. As an alternative, HHS 
also considered an approach for determining ``substantially in excess'' 
based on an amount that is the greater of either a percentage of the 
total amount of expected charges in the good faith estimate or a flat 
minimum dollar amount. However, HHS remains concerned that such an 
approach could effectively put dispute resolution out of reach for 
uninsured (or self-pay) individuals in situations where the expected 
charges for the item or service are high, particularly for those who 
need to undergo more complex procedures. Finally, HHS considered a 
tiered approach, either a flat dollar amount that would increase as the 
total expected charges in the good faith estimate increases or a 
percentage that would decrease as the total of expected charges in the 
good faith estimate increases, but HHS is of the view that such an 
approach would add undue complexity and could be confusing for 
uninsured (or self-pay) individuals, providers, facilities, and other 
stakeholders.
    Lastly, HHS considered basing the definition of ``substantially in 
excess'' on billed charges that exceed a certain percentage for the 
same or similar services using an independent database. However, HHS is 
of the view that such a mechanism is inconsistent with the statute 
which contemplates items or services to be determined to be 
``substantially in excess'' based on the good faith estimate provided, 
rather than being based on a specific benchmark, such as that provided 
by an independent database.
    As HHS obtains additional experience with the patient-provider 
dispute resolution process, HHS intends to review data on the use of 
the dispute

[[Page 56063]]

resolution process and may propose adjustments to the definition of 
``substantially in excess'' in the future.
    HHS considered whether to base eligibility for patient-provider 
dispute resolution on whether an individual item or service listed on a 
good faith estimate is billed an amount substantially in excess to the 
expected charge in the good faith estimate. However, HHS is concerned 
that such an approach would add complexity as each item or service on 
the good faith estimate would need to be assessed separately for 
eligibility. HHS also considered basing the eligibility on the total of 
all billed charges for all items or services and all providers or 
facilities listed on the good faith estimate, however such an approach 
would be significantly more complex given that the good faith estimate 
could consist of estimates of multiple providers and facilities who 
would bill the uninsured (or self-pay) individual separately. This 
approach could also potentially increase the burden on the uninsured 
(or-self pay) individual who would likely need to submit multiple bills 
from multiple providers or facilities for dispute resolution. 
Additionally, such an approach could require a provider or facility to 
respond to a notice requesting additional documentation from an SDR 
entity due to the billing of other providers, even when the provider or 
facility did not bill an uninsured (or self-pay) individual an amount 
substantially in excess of the good faith estimate. As a result, HHS is 
of the view that it is appropriate to base eligibility for dispute 
resolution on each provider or facility listed on the good faith 
estimate.
    HHS considered not requiring co-providers or co-facilities that are 
not represented on a good faith estimate due to replacing an original 
co-provider or co-facility that was represented in a good faith 
estimate to be subject to the patient-provider dispute resolution 
process due to not having provided estimates of expected charges with 
which to base whether the billed charges substantially exceed the 
estimate. However, HHS is of the view that such requirements should 
still apply in these circumstances as they provide important consumer 
protections that are aimed to protect uninsured (or self-pay) 
individuals from unexpected medical bills, and allowing a replacement 
co-provider or co-facility to essentially circumvent these protections 
simply due to not being directly represented on the good faith estimate 
would weaken these consumer protections.
    HHS considered requiring the Federal IDR portal be used by an 
uninsured (or self-pay) individual to initiate a patient-provider 
dispute resolution process rather than making the use of the Federal 
IDR portal optional. However, HHS was concerned that such a requirement 
could pose an unreasonable barrier for uninsured (or self-pay) 
individuals, particularly those with limited or no access to the 
internet.
    HHS considered not providing a mechanism for the uninsured (or 
self-pay) individual to settle on a payment amount for an item or 
service prior to an SDR entity issuing a payment determination. 
However, HHS is of the view that providing an opportunity for the 
uninsured (or self-pay) individual and the provider or facility to come 
to terms on a payment amount that is mutually agreeable for the parties 
involved is appropriate as it can help resolve payment disputes quickly 
without the need for a determination by an SDR entity. Such a process 
can also incentivize a provider or facility to accept a lower payment 
amount or to provide financial assistance to the uninsured (or self-
pay) individual.
    HHS considered whether to allow the SDR entity to have discretion 
to determine a payment amount lower than the expected charges listed in 
the good faith estimate. However, HHS is of the view that such an 
approach would result in less transparency and predictability for the 
uninsured (or self-pay) individuals, providers and facilities regarding 
the outcomes of the patient-provider dispute resolution process. 
Therefore, HHS is of the view that the good faith estimate represents 
charges the uninsured (or self-pay) individual would likely expect to 
pay for the items or services, and as a result the consumer protections 
established in the patient-provider dispute resolution process serve as 
an important backstop that protects an uninsured (or self-pay) 
individual from unexpected billed charges that substantially exceed the 
good faith estimate.
    HHS considered allowing an SDR entity to use a different standard 
for conducting determinations, other than that the information 
submitted by the provider must provide credible information that the 
difference between the billed charge and the expected charge for the 
item or service in the good faith estimate reflects the costs of a 
medically necessary item or service and is based on unforeseen 
circumstances that could not have reasonably been anticipated by the 
provider or facility when the good faith estimate was provided. 
However, HHS is of the view is that such an approach would not align 
with the standard utilized in the Federal IDR processes discussed in 
section III of this preamble. This approach would result in adding 
undue complexity to the patient-provider dispute resolution process and 
the use of a different standard from the Federal IDR process could 
potentially lead to confusion for uninsured (or self-pay) individuals, 
providers and facilities.
    When an SDR entity determines that the provider or facility has 
provided credible information that the difference between the billed 
charge and the expected charge for the item or service in the good 
faith estimate reflects the costs of a medically necessary item or 
service and is based on unforeseen circumstances that could not have 
reasonably been anticipated by the provider or facility when the good 
faith estimate was provided, HHS considered requiring that the SDR 
determine that the payment amount be equal to the billed charge, rather 
than the lesser of the billed charge or the payment amount for the same 
or similar services contained on an independent database (or if 
applicable, the good faith estimate). However, HHS is concerned that 
such an approach may increase the incentive for providers and 
facilities to inflate their billed charges, particularly in cases where 
the provider or facility believes they can justify the billed charges.
    HHS considered not requiring an SDR entity determination to be 
binding upon the parties involved, in the absence of a fraudulent claim 
or evidence of misrepresentation of facts presented to the IDR entity 
involved. However, HHS was concerned that not having the process be 
binding could lead to a provider or facility not abiding by the SDR 
entity determination and holding the uninsured (or self-pay) individual 
liable for the entire billed charge even if the SDR entity determined 
that the uninsured (or self-pay) individual pay a lower amount. HHS is 
of the view that without making the determination binding, the consumer 
protections established in PHS Act section 2799B-7 would be 
significantly diminished and that the cost for administering the 
program may outweigh the benefit.
    HHS considered various approaches to paying for the costs of the 
patient-provider dispute resolution process. HHS considered requiring 
the uninsured (or self-pay) individual to pay the patient-provider 
dispute resolution costs (e.g., SDR entity costs) in cases where the 
individual does not prevail in dispute resolution. However, such an 
approach could place a significant burden on the uninsured (or

[[Page 56064]]

self-pay) individuals, especially low-income individuals. Such a 
requirement would also not be in alignment with the requirements in PHS 
Act section 2799B-7 that the administrative fee be set so as not to 
create a burden to participation. HHS also considered requiring the 
provider or facility to pay for dispute resolution costs when the 
provider or facility does not prevail. However, HHS has concerns that 
such an approach would impose a burden on the providers and facilities 
and could potentially provide an incentive for the providers and 
facilities to increase the prices on uninsured (or self-pay) 
individuals to account for potential patient-provider dispute 
resolution costs or avoid treating uninsured (or self-pay) individuals 
altogether.
    HHS considered using an open certification process for SDR entities 
rather than contracting with a limited number of SDR entities that meet 
the certification requirements outlined in 45 CFR 149.620(d). However, 
HHS is of the view that an open certification process would increase 
the administrative burden associated with certifying SDR entities and 
would not allow for the same level of administrative oversight, 
monitoring, and audit potential as opposed to contracting with the SDR 
entities directly.
    HHS considered not providing a mechanism to defer to a state that 
implements a parallel patient-provider dispute resolution process that 
meets certain minimum Federal requirements. However, such an approach 
would not allow for states to establish processes which meet Federal 
minimum standards that are specifically tailored for the state's 
residents and providers and facilities in the state. Allowing a state 
to establish a process that meets or exceeds the Federal minimum 
standards is also consistent with other provisions of the No Surprises 
Act such as allowing the application of a state law to determine the 
total amount payable to out-of-network providers and facilities.
1.8. Uncertainty
    It is unclear what percentage of participants, beneficiaries, and 
enrollees experience surprise billing. The frequency of surprise 
billing may differ among small and large health issuers.
    Furthermore, among individuals who experience surprise billing, the 
percentage of claims that would be resolved by the Federal IDR process 
is unclear. It is possible that some claims would be resolved through 
early settlement before they proceed to the Federal IDR process. It is 
also possible that some claims would be determined to be ineligible for 
the Federal IDR process. While there is some data from New York 
regarding these questions, it is uncertain whether other states' trends 
will be similar to New York's or whether New York's experience can be 
extrapolated to other states.
    Additionally, these interim final rules permit multiple qualified 
IDR items and services to be batched in a single payment determination 
to encourage efficiency. In order for qualified IDR items or services 
to be batched, they must involve the same service code or comparable 
code under different procedural systems. Batching by service code will 
allow parties to group together qualified IDR items and services that 
are medically similar, promoting efficiency by allowing the certified 
IDR entity to consider similar qualified IDR items and services, and 
more efficiently focus on where the value of the qualified IDR items or 
services is consistently materially different from the QPA. 
Additionally, the Departments require batching to be done by provider 
or group of providers, the same facility, or the same provider of air 
ambulance services sharing the same NPI or TIN. By allowing groupings 
of providers with the same TIN, this will allow group practices to 
batch together qualified IDR items or services. Due to the uncertainty 
surrounding how often and how many payment determinations will consider 
batched items and services, the Departments acknowledge the high degree 
of uncertainty around the estimates of how many disputes will result in 
the Federal IDR process each year.
    Additionally, it is unclear how these interim final rules will 
alter the experiences of everyone involved in the health care system, 
beyond the individuals and entities that are involved in the Federal 
IDR process. For example, research finds that New York's Out-of-Network 
law \228\ reduced surprise billing by 34 percent and lowered in-network 
emergency physician payments by 9 percent via shifting the billing 
costs to emergency department physicians who bill on an out-of-network 
basis.\229\ Research also finds that New York's Out-of-Network law 
increased the incentive for physicians providing emergency services to 
participate in health plan networks.\230\
---------------------------------------------------------------------------

    \228\ NY Fin Serv L Sec.  605 (2014).
    \229\ Cooper, Z. et al., Surprise! Out-Of-Network Billing for 
Emergency Care in the United States, NBER Working Paper 23623, 2017, 
available at https://www.nber.org/papers/w23623.
    \230\ New York State Department of Financial Services. ``New 
York's Surprise Out-Of-Network Protection Law Report on the 
Independent Dispute Resolution Process.'' (September 2019). https://www.pacep.net/assets/documents/NYReportontheIDRProcess.pdf.
---------------------------------------------------------------------------

    It is unclear to what degree providers and facilities may adjust 
their pricing for items and services in order to pay for the 
anticipated costs of providing a good faith estimate. It also is 
unclear if providers and facilities will provide higher estimates than 
the amounts they intend to charge in order to avoid the patient-
provider dispute resolution process, and what impact this practice 
might have on an individual's decision to seek necessary care. For 
example, some providers and facilities may overestimate the costs for 
items or services, up-code to a more expensive service, or add 
additional unnecessary services, which could circumvent the intended 
consumer protections. These actions could impact whether some patients 
defer or delay needed care on the basis of perceived costs or have a 
pathway to dispute bills through the patient-provider dispute 
resolution process.
    Among uninsured (or self-pay) individuals who receive billed 
charges that are substantially in excess of the expected charges in the 
good faith estimate, it is unclear to what extent such bills will be 
resolved using the patient-provider dispute resolution process, or to 
what extent such bills will be resolved in other ways such as a 
settlement where the provider or facility would offer a lower bill, 
discount, or an offer of financial assistance.>
    Last, the Departments are uncertain whether the policies adopted in 
these interim final rules could ultimately lead to inflation of health 
care costs or could result in a reduction in uninsured (or self-pay) 
individuals' access to needed care. One study, which examined the 
arbitration decisions in New Jersey, where billed charges or usual and 
customary rates are taken into consideration in the IDR process, found 
that the median payments awarded were 5.7 times higher than the median 
in-network rates for the same services. The study concluded that basing 
arbitration decisions on provider-billed charges would likely increase 
health care costs.\231\ In New York State, state guidance directs 
arbiters to consider the 80th percentile of billed charges and the New 
York Department of Financial Services has found that arbitration 
decisions resulted in, on average, charges 8 percent higher than the

[[Page 56065]]

eightieth percentile of billed charges.\232\ By considering the offer 
closest to the QPA and prohibiting certified IDR entities from 
considering billed charges, these interim final rules will likely limit 
potential inflationary effects even if arbitration leads to payment 
determinations that are above the amounts plans and issuers typically 
pay to in-network providers.\233\ Thus, these interim final rules may 
constrain inflationary effects, but the degree to which they may do so 
is uncertain.
---------------------------------------------------------------------------

    \231\ Chartock, B.L., Adler, L., Ly, B., Duffy, E., & Trish, E. 
(2021). Arbitration over Out-Of-Network Medical Bills: Evidence from 
New Jersey Payment Disputes: Study Examines Arbitration Decisions to 
Resolve Payment Disputes Between Issuers and Out-Of-Network 
Providers in New Jersey. 40 Health Affairs 1, 130-137. https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2020.00217.
    \232\ Adler, Loren. ``Experience with New York's Arbitration 
Process for Surprise Out-of-Network Bills.'' U.S.C.-Brookings 
Schaeffer on Health Policy. (October 2019). https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2019/10/24/experience-with-new-yorks-arbitration-process-for-surprise-out-of-network-bills/.
    \233\ Fielder, Matthew, Loren Adler, and Benedic Ippolito. 
``Recommendations for Implementing the No Surprises Act.'' U.S.C.-
Brookings Schaeffer on Health Policy. (March 2021). https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2021/03/16/recommendations-for-implementing-the-no-surprises-act/.
---------------------------------------------------------------------------

1.9. Conclusion and Summary of Economic Impacts
    The Departments are of the view that these interim final rules will 
help ensure that consumers are protected from unexpected out-of-network 
medical costs by creating a process for plans, issuers, FEHB carriers 
and nonparticipating providers, facilities, and providers of air 
ambulance services to resolve disputes regarding out-of-network rates. 
These interim final rules provide a market-based approach that will 
allow these entities to agree upon reasonable payment rates.
    The Departments expect a significant reduction in the incidence of 
surprise billing, potentially resulting in significant savings for 
consumers. There may be a potential transfer from providers, 
facilities, and providers of air ambulance services to the participant, 
beneficiary, or enrollee if the out-of-network rate collected is lower 
than what would have been collected had the provider or facility 
balance billed the participant, beneficiary, or enrollee. Overall, 
these interim final rules provide a mechanism to effectively resolve 
disputes between plans, issuers, and FEHB carriers and providers and 
facilities, while protecting patients.
    HHS is of the view that the provisions in these interim final rules 
will protect uninsured (or self-pay) individuals from surprise medical 
costs by allowing them to obtain a good faith estimate of expected 
charges from providers and facilities prior to receiving scheduled 
items and services and upon request. With this information, uninsured 
(or self-pay) individuals may be more likely to consider and compare 
costs across providers or facilities prior to or upon scheduling an 
item or service to help inform decisions regarding costs for an item or 
service. These benefits, however, are predicated on the good faith 
estimate being a reasonably predictive and accurate document that can 
be understood by patients and their representatives. Additionally, 
these interim final rules protect these uninsured (or self-pay) 
individuals by allowing an uninsured (or self-pay) individual to seek a 
determination through the patient-provider dispute resolution process 
if actual billed charges for items or services from a provider or 
facility are substantially in excess of the expected charges listed in 
the good faith estimate. Moreover, HHS is of the view that uninsured 
(or self-pay consumers) will also benefit from being able to take 
advantage of the patient-provider dispute resolution process as an 
intermediary step in resolving outstanding medical bills, which will 
delay providers sending these outstanding bills to collection agencies.
    The patient-provider dispute resolution process further protects 
uninsured (or self-pay) individuals as the process may result in lower 
payments if an SDR entity determines that information submitted by a 
provider or facility does not provide credible information that the 
billed charge for an item or service reflects the costs of a medically 
necessary item or service and is based on unforeseen circumstances that 
could not have reasonably been anticipated by the provider or facility 
when the good faith estimate was provided, in which case the SDR entity 
must determine as the payment amount the expected charge for the item 
or service (or in the case of a new item or service, $0) to be paid by 
the uninsured (or self-pay) individual to the provider or facility.
    The Departments estimate that these interim final rules will impose 
incremental costs of approximately $760.95 million in the first year 
and $440.67 million in subsequent years. Over 10 years, the associated 
costs will be approximately $3.62 billion with an annualized cost of 
$517.12 million, using a 7 percent discount rate.\234\
---------------------------------------------------------------------------

    \234\ The costs would be $4.19 billion over 10-year period with 
an annualized cost of $491.44 million, applying a 3 percent discount 
rate.
---------------------------------------------------------------------------

C. Paperwork Reduction Act

    Contemporaneously with the publication of these interim final 
rules, the Departments are each submitting a request for a new ICR 
containing the information collection requirements for the Federal IDR 
process, and the patient-provider dispute resolution process for HHS, 
created by the No Surprises Act be processed as an Emergency Clearance 
Request in accordance with section 5 CFR 1320.13 of the Paperwork 
Reduction Act, Emergency Processing. The Departments and OPM have 
determined that it would be impracticable and contrary to the public 
interest to delay putting the provisions in these interim final rules 
in place until after a full public notice and comment process has been 
completed. Although this effective date may have allowed for the 
regulations, if promulgated with the full notice and comment rulemaking 
process, to be applicable in time for the applicability date of the 
provisions in the No Surprises Act, this timeframe would not provide 
sufficient time for the regulated entities to implement the 
requirements. To obtain a copy of the ICR go to https://www.RegInfo.gov.
    The Departments will be requesting approval of the emergency review 
requests by the effective date of the interim final rules. The 
Departments will be seeking approval of the ICRs for 180 days, the 
maximum allowed for an ICR approved using an emergency review. As part 
of the emergency review request, the Departments will be requesting 
that OMB waive the notice requirement set forth in 5 CFR 1320.13(d). 
Once the emergency submission is approved, the Departments will 
initiate an ICR Revision, the process required under the PRA to seek up 
to three (3) years of approval for the information collections. As part 
of the process, the Departments and OPM will open a 60-day and 30-day 
comment period for each ICR.
    The Departments are particularly interested in comments that:
     Evaluate whether the collection of information is 
necessary for the functions of the Departments, including whether the 
information will have practical utility;
     Evaluate the accuracy of the Departments' estimate of the 
burden of the collection of information, including the validity of the 
methodology and assumptions used;
     Enhance the quality, utility, and clarity of the 
information to be collected; and
     Minimize the burden of the collection of information on 
those who are to respond, including use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology (for example permitting 
electronically delivered responses).

[[Page 56066]]

    Comments on these topics may also be submitted to the Departments 
during the open comment period for these interim final rules. See the 
Addresses section in this rule on where to send comments.
1. Labor Cost Estimates

                                             Table 4--Wage Estimates
----------------------------------------------------------------------------------------------------------------
                                                                   Hourly total                    Total hourly
                Occupation title                   Occupational    compensation    Overhead cost  labor costs ($/
                                                       code          ($/hour)        ($/hour)          hour)
----------------------------------------------------------------------------------------------------------------
Secretaries and Administrative Assistants,               43-6014          $28.96          $26.27          $55.23
 Except Legal, Medical, and Executive...........
Lawyer..........................................         23-1011          105.28           35.68          140.96
Computer Programmers............................         15-1251           67.62           46.15          113.77
Medical Secretaries and Administrative                   43-6013           27.94           18.13           46.07
 Assistants.....................................
Human Resources Specialists.....................         13-1071           49.09           42.74           91.83
Business Operations Specialist..................         13-1198           59.60           41.72          101.32
General and Operations Manager..................         11-1021           88.25           34.30          122.55
Compensation and Benefits Manager...............         11-3111           96.97           24.81          121.78
Computer and Information Systems Managers.......         11-3021          113.52           53.38          166.90
Medical and Health Services Manager.............         11-9110           83.39           21.62          105.01
Physician (all other)...........................         29-1228          154.74           14.66          169.40
All occupations.................................         00-0000           39.40           24.92           64.32
----------------------------------------------------------------------------------------------------------------

    Group health plans, health insurance issuers, and FEHB carries are 
responsible for ensuring compliance with these interim final rules. 
Accordingly, in the following ICR sections, the Departments refer to 
costs on plans, issuers, and FEHB carriers. However, it is expected 
that most self-insured group health plans will work with a TPA to meet 
the requirements of these interim rules. The Departments recognize the 
potential that some of the largest self-insured plans may seek to meet 
the requirements of these interim final rules in house and not use a 
TPA or other third party, in such cases those plans will incur the 
estimated burden and cost directly.
2. ICRs Regarding IDR Process for Nonparticipating Providers or 
Nonparticipating Emergency Facilities (26 CFR 54.9816-8T, 29 CFR 
2590.716-8, and 45 CFR 149.510)
    As discussed in the Regulatory Impact Analysis, the Departments 
estimate that 17,333 claims will be submitted as part of the Federal 
IDR process each year.
    The Departments estimate that 25 percent of disputes will be 
resolved in open negotiation before entering the Federal IDR process. 
The Departments request data or comments on this assumption. 
Accordingly, the Departments estimate that 23,111 claims will go 
through open negotiation.\235\ The Departments estimate that it will 
take, on average, a medical and health services manager 2 hours to 
write each notice of open negotiation and a clerical worker 15 minutes 
to prepare and send the notice. The burden for each plan, issuer, and 
FEHB carrier would be 2.25 hours, with an equivalent cost of 
approximately $224. As shown in Table 5, for all 23,111 payment 
determinations subject to these interim final rules proceeding through 
the Federal IDR process, the annual burden would be 51,999 hours, with 
an associated equivalent cost of $5.2 million.\236\ The open 
negotiation notice must be sent within 30 business days beginning on 
the day the provider or facility receives an initial payment or a 
notice of denial of payment from the plan or issuer regarding such item 
or service. The Departments assume that 5 percent of these notices 
would be mailed and will incur a printing cost of $0.05 per page and 
$0.55 for postage. Thus, the mailing cost is estimated to be $693.\237\
---------------------------------------------------------------------------

    \235\ This is calculated 17,333/(1-0.25) = 23,111.
    \236\ The burden is estimated as follows: 23,111 claims x 2 
hours + 23,111 claims x 0.25 hour = 51,999 hours. A labor rate of 
$105.01 is used for a medical and health services manager and a 
labor rate of $55.23 is used for a clerical worker. The labor rates 
are applied in the following calculation: 23,111 claims x 2 hours x 
$105.01 + 23,111 claims x 0.5 hour x $55.23 = $5,172,803. Labor 
rates are EBSA estimates.
    \237\ This is calculated 23,111 x 0.05 x ($0.05 + $0.55) = $693.

Table 5--Annual Burden and Costs To Prepare and Send the Notice of Open Negotiation Process for Nonparticipating
                       Providers or Nonparticipating Emergency Facilities Starting in 2022
----------------------------------------------------------------------------------------------------------------
                                                Total annual   Total estimated                   Total estimated
        Estimated number of responses          burden (hours)     labor cost     Mailing costs         cost
----------------------------------------------------------------------------------------------------------------
23,111......................................          51,999       $5,172,803             $693       $5,173,496
----------------------------------------------------------------------------------------------------------------


[[Page 56067]]

    The Departments estimate that it will take 2 hours for a legal 
professional to write the Notice of IDR Initiation and 15 minutes for a 
clerical worker to prepare and send the initiating notice. The burden 
for each plan, issuer, and FEHB carrier would be 2.25 hours, with an 
equivalent cost of approximately $224. As shown in Table 6, for the 
17,333 claims initiating the Federal IDR process, the annual burden 
would be 38,999 hours, with an annual equivalent cost estimate of $3.9 
million.\238\ The initiating party may furnish the Notice of IDR 
Initiation to the other party electronically if the initiating party 
has a good faith belief that the electronic method is readily 
accessible by the other party and the notice is provided in paper form 
free of charge upon request; the Departments assume that these notices 
5 percent of notices would be mailed and will incur a printing cost of 
$0.05 per page and $0.55 for postage. Thus, the mailing cost is 
estimated to be $520.\239\
---------------------------------------------------------------------------

    \238\ The burden is estimated as follows: 17,333 claims x 2 
hours + 17,333 claims x 0.25 hours = 38,999 hours. A labor rate of 
$105.01 is used for a medical and health services manager and a 
labor rate of $55.23 is used for a clerical worker. The labor rates 
are applied in the following calculation: 17,333 claims x 0.25 hours 
x $105.01 + 17,333 claims x 2 hours x $55.23 = $3,879,602. Labor 
rates are EBSA estimates.
    \239\ This is calculated 17,333 x 0.05 x ($0.05 + $0.55) = $520.

 Table 6--Annual Burden and Cost To Prepare and Send the Notice of IDR Initiation for Nonparticipating Providers
                            or Nonparticipating Emergency Facilities Starting in 2022
----------------------------------------------------------------------------------------------------------------
                                                Total annual   Total estimated    Mailing and    Total estimated
        Estimated number of responses          burden (hours)     labor cost     printing costs        cost
----------------------------------------------------------------------------------------------------------------
17,333......................................          38,999       $3,879,602             $520       $3,880,122
----------------------------------------------------------------------------------------------------------------

    If the parties to the Federal IDR process agree on an out-of-
network rate for a qualified IDR item or service after providing notice 
to the Departments of initiation of the Federal IDR process, but before 
the certified IDR entity has made its payment determination, the 
initiating party must send a notification to the Departments and to the 
certified IDR entity (if selected) electronically through the Federal 
IDR portal, in a form and manner specified by the Departments, as soon 
as possible, but no later than 3 business days after the date of the 
agreement. This notification should include the out-of-network rate for 
the qualified IDR item or service and signatures from authorized 
signatories for both parties. The Departments assume that 1 percent of 
IDR payment determinations will be resolved by an agreement on an out-
of-network rate after the Federal IDR process has been initiated. The 
Departments request comment on this assumption. The Departments 
estimate that it will take, on average, a medical and health services 
manager 30 minutes to write each notice of open negotiation and a 
clerical worker 15 minutes to submit the notice to the Federal IDR 
portal. The burden for each plan, issuer, and FEHB carrier would be 45 
minutes, with an equivalent cost of approximately $66. As shown in 
Table 7, for the 173 payment determinations resolved in this manner, 
the annual burden would be 130 hours, with an associated equivalent 
cost of $11,472.\240\
---------------------------------------------------------------------------

    \240\ The burden is estimated as follows: 17,300 claims x 1 
percent x 0.5 hours + 17,300 claims x 1 percent x 0.25 hours = 130 
hours. A labor rate of $105.01 is used for a medical and health 
services manager and a labor rate of $55.23 is used for a clerical 
worker. The labor rates are applied in the following calculation: 
17,300 claims x 1 percent x 0.5 hours x $105.01 + 17,300 claims x 1 
percent x 0.25 hours x $55.23 = $11,472. Labor rates are EBSA 
estimates.

 Table 7--Annual Burden and Cost To Prepare and Send the Notice of Agreement on an Out-of-Network Rate Starting
                                                     in 2022
----------------------------------------------------------------------------------------------------------------
                                                Total annual   Total estimated    Mailing and    Total estimated
        Estimated number of responses          burden (hours)     labor cost     printing costs        cost
----------------------------------------------------------------------------------------------------------------
173.........................................             130          $11,472               $0          $11,472
----------------------------------------------------------------------------------------------------------------

    If the plan, issuer, or FEHB carrier and the nonparticipating 
provider or nonparticipating emergency facility select a certified IDR 
entity, or if they fail to select a certified IDR entity, they must 
notify the Departments of their selection no later than 1 business day 
after such selection or failure to select. To the extent the non-
initiating party does not believe that the Federal IDR process applies, 
the non-initiating party must also provide information that 
demonstrates the lack of applicability by the same date that the notice 
of selection or failure to select must be submitted.
    The Departments estimate that in 75 percent of IDR payment 
determinations, a certified IDR entity will be selected by the 
disputing parties. The Departments request comments on this assumption. 
Additionally, the Departments assume that it will take 1 hour for a 
legal professional to write the notice and 15 minutes for a clerical 
worker to prepare and send the notice. The burden for each plan, 
issuer, and FEHB carrier would be 1.25 hours, with an equivalent cost 
of approximately $119. As shown in Table 8, for the 13,000 claims that 
will have a certified IDR entity selected by the disputing parties, the 
annual burden would be 16,250 hours, with an annual equivalent cost 
estimate of $1.5 million.\241\ The Departments assume that 5 percent of 
notices would be mailed and will incur a printing cost of $0.05 per 
page and $0.55 for postage. Thus, the mailing cost is estimated to be 
$390.\242\
---------------------------------------------------------------------------

    \241\ The burden is estimated as follows: (13,000 claims x 75 
percent x 1 hour) + (13,000 claims x 75 percent x 0.25 hours) = 
16,250 hours. A labor rate of $105.01 is used for a medical and 
health services manager and a labor rate of $55.23 is used for a 
clerical worker. The labor rates are applied in the following 
calculation: (13,000 claims x 75 percent x 0.25 hours x $105.01) 
+13,000 claims x 75 percent x 1 hours x $55.23) = $1,544,628. Labor 
rates are EBSA estimates.
    \242\ This is calculated 13,000 x 0.05 x ($0.05 + $0.55) = $390.

[[Page 56068]]



  Table 8--Annual Burden and Cost To Select a Certified IDR Entity and Notify the Departments of Selection for
              Nonparticipating Providers or Nonparticipating Emergency Facilities Starting in 2022
----------------------------------------------------------------------------------------------------------------
                                                Total annual   Total estimated    Mailing and    Total estimated
        Estimated number of responses          burden (hours)     labor cost     printing costs        cost
----------------------------------------------------------------------------------------------------------------
13,000......................................          16,250       $1,544,628             $390       $1,545,018
----------------------------------------------------------------------------------------------------------------

    If the plan, issuer, or FEHB carrier and the nonparticipating 
provider or nonparticipating emergency facility fail to select a 
certified IDR entity, the Departments will select a certified IDR 
entity that charges a fee within the allowed range of IDR entity costs 
(or has received approval from the Departments to charge a fee outside 
of the allowed range) through a random selection method. The 
Departments estimate that in 25 percent of IDR payment determinations, 
a certified IDR entity will not be selected by the parties.
    Additionally, no later than 10 business days after the date of 
selection of the certified IDR entity with respect to a payment 
determination for a qualified IDR item or service, the provider or 
facility and the plan or issuer must submit to the certified IDR entity 
an offer for a payment amount for the qualified IDR item or service 
furnished by such provider or facility though the Federal IDR portal. 
The Departments estimate for providers and issuers, it will take an 
average of 2.5 hours for a medical and health services manager to write 
the offer and 30 minutes for a clerical worker to prepare and send the 
offer. The burden for each plan, issuer, and FEHB carrier would be 3 
hours, with an equivalent cost of approximately $290. As shown in Table 
9, for the 17,333 payment determinations that will go through 
submission of offer, the annual burden would be 103,998 hours, with an 
annual equivalent cost estimate of $10.1 million.\243\ The Departments 
assume that 5 percent of notices would be mailed and will incur a 
printing cost of $0.05 per page and $0.55 for postage. Thus, the 
mailing cost is estimated to be $1,040.\244\
---------------------------------------------------------------------------

    \243\ The burden is estimated as follows: (17,333 claims x 2.5 
hours + 17,333 claims x 0.5 hours) + (17,333 claims x 2.5 hours + 
17,333 claims x 0.5 hours) = 103,998 hours for providers and 
issuers. A labor rate of $105.01 is used for a medical and health 
services manager and a labor rate of $55.23 is used for a clerical 
worker. The labor rates are applied in the following calculation: 
(17,333 claims x 2.5 hours x $105.01 + 17,333 claims x 0.5 hours x 
$55.23) + (17,333 claims x 2.5 hours x $105.01 + 17,333 claims x 0.5 
hours x $55.23) = $10,057,993. Labor rates are EBSA estimates.
    \244\ This is calculated (17,333 x 0.05 x ($0.05 + $0.55) + 
(17,333 x 0.05 x ($0.05 + $0.55) = $1,040.

 Table 9--Annual Burden and Cost To Prepare and Submit Offer for Nonparticipating Providers or Nonparticipating
                                      Emergency Facilities Starting in 2022
----------------------------------------------------------------------------------------------------------------
                                                Total annual   Total estimated    Mailing and    Total estimated
        Estimated number of responses          burden (hours)     labor cost     printing costs        cost
----------------------------------------------------------------------------------------------------------------
17,333......................................         103,998      $10,057,993           $1,040      $10,059,033
----------------------------------------------------------------------------------------------------------------

    After the selected certified IDR entity has reviewed the offer, the 
certified IDR entity must notify the provider or facility and the plan, 
issuer, or FEHB carrier of the payment determination and the reason for 
such determination, in a form and manner specified by the 
Departments.\245\ The cost of preparing and delivering this notice is 
assumed to be included in the certified IDR entity fee paid by the plan 
or issuer, or provider or facility, to conduct the review.\246\
---------------------------------------------------------------------------

    \245\ IDR Payment Determination Notification (ERISA 
716(c)(5)(A)).
    \246\ Under Section 103 of the No Surprises Act, the party whose 
offer was not chosen by the certified IDR entity is responsible for 
paying the IDR entity's fee.
---------------------------------------------------------------------------

    If the certified IDR entity does not choose the offer closest to 
the QPA, the certified IDR entity's written decision must include an 
explanation of the credible information that the certified IDR entity 
determined demonstrated that the QPA was materially different from the 
appropriate out-of-network rate, based on the permitted considerations, 
with respect to the qualified IDR item or service. The cost of 
preparing and delivering this written decision is included in the 
certified IDR entity fee paid by the provider, facility, plan, issuer, 
or FEHB carrier. When determining the out-of-network rate, the 
certified IDR entity must consider the QPA and must consider the other 
statutory factors when a party presents credible information relating 
to those factors clearly demonstrating the QPA is materially different 
from the appropriate out-of-network rate, or where the offers are 
equally distant from the QPA but in opposing directions.
    Additionally, the selected certified IDR entity must provide the 
payment determination and the reasons for such to the Departments. The 
Departments also assume that the cost of preparing and delivering this 
written decision is included in the certified IDR entity fee paid by 
the provider, facility, plan, issuer, or FEHB carrier.
    After a final determination, the certified IDR entity must maintain 
records of all claims and notices associated with the Federal IDR 
process for 6 years. The certified IDR entity must store the documents 
in a manner necessary to meet the requirements of these interim final 
rules. The certified IDR entities must make such records available for 
examination by the plan, issuer, FEHB carrier, provider, facility, or 
state or Federal oversight agency upon request, except where such 
disclosure would violate state or Federal privacy laws. The Departments 
assume it will take 30 minutes for a clerical worker to establish the 
records for each IDR payment determinations. The burden for each 
certified IDR entity would be 30 minutes, with an equivalent cost of 
approximately $28. As shown in Table 10, for the maintenance and 
recordkeeping of 17,333 claims, the annual burden would be 8,667 hours, 
with an annual

[[Page 56069]]

equivalent cost burden estimate of $0.5 million.\247\
---------------------------------------------------------------------------

    \247\ The burden is estimated as follows: (17,333 claims x 30 
minutes) = 8,667 hours for providers and issuers. A labor rate of 
$55.23 is used for a clerical worker. The labor rates are applied in 
the following calculation: (17,333 claims x 30 minutes x $55.23) = 
$478,651. Labor rates are EBSA estimates.

Table 10--Annual Burden and Cost for the Certified IDR Entity To Maintain Records for Nonparticipating Providers
                            or Nonparticipating Emergency Facilities Starting in 2022
----------------------------------------------------------------------------------------------------------------
                                                Total annual   Total estimated                   Total estimated
        Estimated number of responses          burden (hours)     labor cost      Other costs          cost
----------------------------------------------------------------------------------------------------------------
17,333......................................               0               $0         $478,651         $478,651
----------------------------------------------------------------------------------------------------------------

Summary
    The total hour burden associated with the Federal IDR process for 
hospital and emergency department claims is 211,376 hours with an 
equivalent cost of $20,666,498. The total cost associated with the 
Federal IDR process for hospital and emergency claims is $481,294.
    Half of the burden associated with the Federal IDR process for 
hospital and emergency departments is estimated to be allocated to 
health care plans, issuers, and FEHB carriers, and the other half is 
estimated be allocated to health care providers and facilities. As 
shown in Tables 11 through 13, HHS, DOL, the Department of the 
Treasury, and OPM share jurisdiction, HHS will account for 45 percent 
of the burden, or approximately, 95,119 hours at an equivalent cost of 
$9,299,924 and a cost burden of $216,582. DOL and the Department of the 
Treasury will each account for 25 percent of the burden, or 
approximately 52,844 hours at an equivalent cost of $5,166,624 and a 
cost burden of $120,324. OPM will account for 5 percent of the burden 
or approximately 10,569 hours at an equivalent cost of $1,033,325 and a 
cost burden of $24,065.

  Table 11--HHS Summary Annual Cost and Burden of IDR Process for Nonparticipating Providers or Nonparticipating Emergency Facilities Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Total annual   Total estimated    Mailing and                     Total estimated
                   Estimated number of responses                      burden (hours)     labor cost     printing cost     Other costs          cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
49,477.............................................................          95,119       $9,299,924           $1,189         $215,393       $9,516,506
--------------------------------------------------------------------------------------------------------------------------------------------------------


     Table 12--DOL and Department of the Treasury's Summary Annual Cost and Burden of IDR Process for Nonparticipating Providers or Nonparticipating
                                                          Emergency Facilities Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Total annual   Total estimated    Mailing and                     Total estimated
                   Estimated number of responses                      burden (hours)     labor cost     printing cost     Other costs          cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
27,487.............................................................          52,844       $5,166,624             $661         $119,663       $5,286,948
--------------------------------------------------------------------------------------------------------------------------------------------------------


 Table 13--OPM's Summary Annual Cost and Burden of IDR Process for Nonparticipating Providers or Nonparticipating Emergency Facilities Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Total annual   Total estimated    Mailing and                     Total estimated
                   Estimated number of responses                      burden (hours)     labor cost     printing cost     Other costs          cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
5,497..............................................................          10,569       $1,033,325             $132          $23,933       $1,057,390
--------------------------------------------------------------------------------------------------------------------------------------------------------

3. ICRs Regarding Federal IDR Process for Air Ambulance (26 CFR 
54.9817-2T, 29 CFR 2590.717-2, and 45 CFR 149.520)
    According to the March 2019 Health Insurance Coverage Bulletin, in 
2018, 213.2 million individuals had private health insurance.\248\ In 
2017, HCCI estimated that, on average, there were 33.3 air ambulance 
uses per 100,000 people,\249\ and the GAO estimated that approximately 
69 percent of air transports resulted in an out-of-network bill.\250\ 
The Departments do not have data on what percent of out-of-network 
bills will proceed to the Federal IDR process; however, given the 
nature of air ambulance services, the Departments assume that the 
percentage will be substantially higher than for hospital or emergency 
department claims. The Departments assume that 10 percent of out-of-
network claims for air transport will end up in the Federal IDR 
process.
---------------------------------------------------------------------------

    \248\ Employee Benefits Security Administration. ``Health 
Insurance Coverage Bulletin.'' (March 2019). https://www.dol.gov/sites/dolgov/files/EBSA/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2019.pdf.
    \249\ Hargraves, John and Aaron Bloschichak. ``Air Ambulances-
10-Year Trends in Costs and Use.'' Health Care Cost Institute. 
(2019). https://healthcostinstitute.org/emergency-room/air-ambulances-10-year-trends-in-costs-and-use.
    \250\ Government Accountability Office. ``Air Ambulance: 
Available Data Show Privately-Insured Patients are at Financial 
Risk.'' (2019). https://www.gao.gov/assets/gao-19-292.pdf.
---------------------------------------------------------------------------

    Accordingly, the government estimates there will be 4,899 air

[[Page 56070]]

ambulance service claims submitted to the Federal IDR process each 
year.\251\
---------------------------------------------------------------------------

    \251\ The Departments estimate that of the 213.2 million 
individuals with employer-sponsored health insurance, there are 33.3 
air transports per 100,000 individuals, of which 69 percent result 
in an out-of-network bill. The Departments assume that 10 percent of 
the out-of-network bills will end up in IDR. (213,200,000 x 0.000333 
x 0.69 x 0.1= 4,899).
---------------------------------------------------------------------------

    In these interim final rules, air ambulance services are subject to 
the same requirements for hospital and emergency services in 26 CFR 
54.9816-8T, 29 CFR 2590.716-8, and 45 CFR 149.510 (as applicable), 
except that the items and services for which the requirements of (b)(1) 
of that section apply shall be understood to be out-of-network air 
ambulance services, and ``qualified IDR items and services'' are 
understood to be air ambulance services.
    The Departments estimate that 4,899 air transport disputes will be 
handled by the Federal IDR process each year, but the Departments 
estimate that 25 percent of disputes will be resolved in open 
negotiation before entering the Federal IDR process. Accordingly, the 
Departments estimate that 6,532 transport payment determinations will 
enter into open negotiation.\252\ The Departments estimate that it will 
take an average of 2 hours for a medical and health services manager to 
write each notice of open negotiation and 15 minutes for a clerical 
worker to prepare and send the notice. The burden for each plan, 
issuer, and FEHB carrier would be 2.25 hours, with an equivalent cost 
of approximately $224. As shown in Table 14, for the 6,532 payment 
determinations that will enter into open negotiation, the annual burden 
would be 14,696 hours, with an annual equivalent cost estimate of $1.5 
million.\253\ The open negotiation notice must be sent within 30 
business days beginning on the day the provider of air ambulance 
services receives an initial payment or a notice of denial of payment 
from the plan, issuer, or FEHB carrier regarding such item or service. 
The Departments assume that 5 percent of notices would be mailed and 
will incur a printing cost of $0.05 per page and $0.55 for postage. 
Thus, the mailing cost is estimated to be $196.\254\
---------------------------------------------------------------------------

    \252\ This is calculated as 4,899/(1-0.25) = 6,532.
    \253\ The burden is estimated as follows: 6,532 claims x 2 hours 
+ 6,532 claims x 0.25 hours = 14,696 hours. A labor rate of $105.01 
is used for a medical and health services manager and a labor rate 
of $55.23 is used for a clerical worker. The labor rates are applied 
in the following calculation: 6,532 claims x 0.25 hours x $105.01 + 
6,532 claims x 2 hours x $55.23 = $1,461,951. Labor rates are EBSA 
estimates.
    \254\ This is calculated 6,532 x 0.05 x ($0.05 + $0.55) = $196.

Table 14--Annual Burden and Costs To Prepare and Send the Notice of Open Negotiation Period for Providers of Air
                                       Ambulance Services Starting in 2022
----------------------------------------------------------------------------------------------------------------
                                                Total annual   Total estimated    Mailing and    Total estimated
        Estimated number of responses          burden (hours)     labor cost     printing cost         cost
----------------------------------------------------------------------------------------------------------------
6,532.......................................          14,696       $1,461,951             $196       $1,462,147
----------------------------------------------------------------------------------------------------------------

    For the estimated 4,899 payment determinations that are submitted 
to the Federal IDR process, the Departments estimate that it will take 
2 hours for a legal professional to write the Notice of IDR Initiation 
and 15 minutes for a clerical worker to prepare and send the initiating 
notice. The burden for each plan, issuer, and FEHB carrier would be 
2.25 hours, with an equivalent cost of approximately $224. As shown in 
Table 15, for the 4,899 payment determinations that will have selected 
a certified IDR entity, the annual burden would be 11,022 hours, with 
an annual equivalent cost estimate of $1.1 million.\255\ The initiating 
party may furnish the Notice of IDR Initiation to the other party 
electronically if the initiating party has a good faith belief that the 
electronic method is readily accessible by the other party and the 
notice is provided in paper form free of charge upon request. The 
Departments assume that 5 percent of notices would be mailed and will 
incur a printing cost of $0.05 per page and $0.55 for postage. Thus, 
the mailing cost is estimated to be $147.\256\
---------------------------------------------------------------------------

    \255\ The burden is estimated as follows: 4,899 claims x 2 hours 
+ 4,899 claims x 0.25 hours = 11,022 hours. A labor rate of $105.01 
is used for a medical and health services manager and a labor rate 
of $55.23 is used for a clerical worker. The labor rates are applied 
in the following calculation: 4,899 claims x 0.25 hours x $105.01 + 
4,899 claims x 2 hours x $55.23 = $1,096,463. Labor rates are EBSA 
estimates.
    \256\ This is calculated 4,899 x 0.05 x ($0.05 + $0.55) = $147.

Table 15--Annual Burden and Cost To Prepare and Send the Notice of IDR Initiation for Providers of Air Ambulance
                                            Services Starting in 2022
----------------------------------------------------------------------------------------------------------------
                                                Total annual   Total estimated    Mailing and    Total estimated
        Estimated number of responses          burden (hours)     labor cost     printing cost         cost
----------------------------------------------------------------------------------------------------------------
4,899.......................................          11,022       $1,096,463             $147       $1,096,610
----------------------------------------------------------------------------------------------------------------

    If the parties to the Federal IDR process agree on an out-of-
network rate for a qualified IDR item or service after providing a 
Notice of IDR Initiation to the Departments, but before the certified 
IDR entity has made its payment determination, the initiating party 
must send a notification to the Departments and to the certified IDR 
entity (if selected) electronically through the Federal IDR portal, in 
a form and manner specified by the Departments, as soon as possible, 
but no later than 3 business days after the date of the agreement. This 
notification should include the out-of-network rate for the qualified 
IDR item or service and signatures from authorized signatories for both 
parties. The Departments assume that 1 percent of payment 
determinations will be resolved by an agreement on an out-of-network 
rate after the Federal IDR process has been initiated. The Departments 
request comment on this assumption. The Departments estimate that it 
will take, on average, a medical and health services manager 30 minutes 
to write each notice of open negotiation and a clerical worker 15 
minutes to submit the

[[Page 56071]]

notice to the Federal IDR portal. The burden for each plan, issuer, and 
FEHB carrier would be 45 minutes, with an equivalent cost of 
approximately $66. As shown in Table 16, for the 49 payment 
determinations resolved in this manner, the annual burden would be 37 
hours, with an associated equivalent cost of $3,249.\257\
---------------------------------------------------------------------------

    \257\ The burden is estimated as follows: 4,899 claims x 1 
percent x 0.5 hours + 4,899 claims x 1 percent x 0.25 hours = 37 
hours. A labor rate of $105.01 is used for a medical and health 
services manager and a labor rate of $55.23 is used for a clerical 
worker. The labor rates are applied in the following calculation: 
4,899 claims x 1 percent x 0.5 hours x $105.01 + 4,899 claims x 1 
percent x 0.25 hours x $55.23 = $3,249. Labor rates are EBSA 
estimates.

 Table 16--Annual Burden and Cost To Prepare and Send the Notice of Agreement on an Out-of-Network Rate Starting
                                                     in 2022
----------------------------------------------------------------------------------------------------------------
                                                Total annual   Total estimated    Mailing and    Total estimated
        Estimated number of responses          burden (hours)     labor cost     printing cost         cost
----------------------------------------------------------------------------------------------------------------
49..........................................              37           $3,249               $0           $3,249
----------------------------------------------------------------------------------------------------------------

    If the plan, issuer, or FEHB carrier and the nonparticipating 
provider of air ambulance services select or fail to select a certified 
IDR entity, they must notify the Departments of their selection or 
failure to select a certified IDR entity no later than 1 day after such 
selection or failure. The Departments estimate that in 75 percent of 
payment determinations, a certified IDR entity will be selected. The 
Departments request comment on this assumption. Additionally, the 
Departments assume that it will take one hour for a legal professional 
to write the notice and 15 minutes for a clerical worker to prepare and 
send the notice. The burden for each plan, issuer, and FEHB carrier 
would be 1.25 hours, with an equivalent cost of approximately $119. Due 
to the tight turnaround, the Departments assume this notice will be 
sent electronically through the Federal IDR portal. As shown in Table 
17, for the 3,674 payment determinations that will have a selected a 
certified IDR entity, the annual burden would be 4,593 hours, with an 
annual equivalent cost estimate of $0.4 million.\258\ The Departments 
assume that 5 percent of notices would be mailed and will incur a 
printing cost of $0.05 per page and $0.55 for postage. Thus, the 
mailing cost is estimated to be $110.\259\
---------------------------------------------------------------------------

    \258\ The burden is estimated as follows: (4,899 claims x 75 
percent x 1 hour) + (4,899 claims x 75 percent x 0.25 hours) = 4,593 
hours. A labor rate of $105.01 is used for a medical and health 
services manager and a labor rate of $55.23 is used for a clerical 
worker. The labor rates are applied in the following calculation: 
(4,899 claims x 75 percent x 0.25 hours x $105.01) + (4,899 claims x 
75 percent x 1 hours x $55.23) = $436,535. Labor rates are EBSA 
estimates.
    \259\ This is calculated 3,674 x 0.05 x ($0.05 + $0.55) = $110.

   Table 17--Annual Burden and Cost To Select Certified IDR Entity and Notify the Departments of Selection for
                              Providers of Air Ambulance Services Starting in 2022
----------------------------------------------------------------------------------------------------------------
                                                Total annual   Total estimated    Mailing and    Total estimated
        Estimated number of responses          burden (hours)     labor cost     printing cost         cost
----------------------------------------------------------------------------------------------------------------
3,674.......................................           4,593         $436,535             $110         $436,646
----------------------------------------------------------------------------------------------------------------

    If the plan, issuer, or FEHB carrier and the nonparticipating 
provider of air ambulance services fail to select a certified IDR 
entity, the Departments will select a certified IDR entity that charges 
a fee within the allowed range of certified IDR entity costs (or has 
received approval from the Departments to charge a fee outside of the 
allowed range if there are an insufficient number of certified IDR 
entities) through a random selection method. The range of certified IDR 
entity fees and the administrative fee paid to the Departments by the 
plan, issuer, or FEHB carrier and the provider of air ambulance 
services will be addressed in later guidance by the Departments. The 
Departments estimate that in 25 percent of IDR payment determinations, 
a certified IDR entity will not be selected by the parties.
    Additionally, no later than 10 business days after the date of 
selection of the certified IDR entity with respect to a determination 
for a qualified IDR item or service, the provider of air ambulance 
services, plan, issuer, or FEHB carrier must submit to the certified 
IDR entity: (1) An offer for a payment amount for the qualified IDR 
item or service furnished by the provider of air ambulance services, 
expressed both as a dollar amount and as a percentage of the QPA; and 
(2) information as requested by the certified IDR entity relating to 
the offer. With the information requested by the certified IDR entity, 
the parties must include: (A) The coverage area of the plan, issuer, or 
FEHB carrier; the relevant geographic region for purposes of the QPA; 
(B) whether the coverage is fully-insured or fully or partially self-
insured), if applicable; and (C) the QPA. The parties may also submit 
to the certified IDR entity any information relating to the offer 
submitted by either party, except that the information may not include 
information on factors described in paragraph 26 CFR 54.9816-
8T(c)(4)(v), 29 CFR 2590.716-8(c)(4)(v), and 45 CFR 149.510(c)(4)(v). 
The Departments estimate for providers of air ambulance services, 
issuers, plans, and FEHB carriers, it will take an average of 2 hours 
for a medical and health services manager to write the offer and 15 
minutes for a clerical worker to prepare and send the offer. The burden 
for each plan, issuer, and FEHB carrier would be 2.25 hours, with an 
equivalent cost of approximately $224. As shown in Table 18, for the 
4,899 claims that will go through submission of offers, the annual 
burden would be 22,044 hours, with an annual equivalent cost estimate 
of $2.2 million.\260\ The Departments assume

[[Page 56072]]

that 5 percent of notices would be mailed and will incur a printing 
cost of $0.05 per page and $0.55 for postage. Thus, the mailing cost is 
estimated to be $294.\261\
---------------------------------------------------------------------------

    \260\ The burden is estimated as follows: (4,899 claims x 2 
hours + 4,899 claims x 0.25 hours) + (4,899 claims x 2 hours + 4,899 
claims x 0.25 hours) = 22,044 hours for providers and issuers. A 
labor rate of $105.01 is used for a medical and health services 
manager and a labor rate of $55.23 is used for a clerical worker. 
The labor rates are applied in the following calculation: (4,899 
claims x 2 hours x $105.01 + 4,899 claims x 0.25 hours x $55.23) + 
(4,899 claims x 2 hours x $105.01 + 4,899 claims x 0.25 hours x 
$105.01) = $2,192,926. Labor rates are EBSA estimates.
    \261\ This is calculated (4,899 x 0.05 x ($0.05 + $0.55)) + 
(4,899 x 0.05 x ($0.05 + $0.55)) = $294.

Table 18--Annual Burden and Cost To Prepare and Submit Offer for Providers of Air Ambulance Services Starting in
                                                      2022
----------------------------------------------------------------------------------------------------------------
                                                Total annual   Total estimated    Mailing and    Total estimated
        Estimated number of responses          burden (hours)     labor cost     printing cost         cost
----------------------------------------------------------------------------------------------------------------
4,899.......................................          22,044       $2,192,926             $294       $2,193,220
----------------------------------------------------------------------------------------------------------------

    After the certified IDR entity has reviewed the offer, the 
certified IDR entity must notify the provider of air ambulance services 
and the plan, issuer, or FEHB carrier of the payment 
determination.\262\ The cost of preparing and delivering this notice is 
included in the $25 administrative fee paid by the provider of air 
ambulance services, plan, issuer, or FEHB carrier to conduct the 
review.
---------------------------------------------------------------------------

    \262\ IDR Payment Determination Notification (ERISA 
716(c)(5)(A)).
---------------------------------------------------------------------------

    Certified IDR entities also need to notify the provider of air 
ambulance services and the plan, issuer, or FEHB carrier of the payment 
determination and the written decision explaining such determination. 
If the certified IDR entity does not choose the offer closest to the 
QPA, the certified IDR entity's written decision must include an 
explanation of the credible information that the certified IDR entity 
determined demonstrated that the QPA amount was materially different 
from the appropriate out-of-network rate, based on the required 
considerations, with respect to the qualified IDR item or service.
    Additionally, the certified IDR entity must provide the payment 
determination and the reasons for such determination to the 
Departments. The Departments also assume that the cost of preparing and 
delivering this written decision is included in the certified IDR 
entity fee paid by the provider of air ambulance services, plan, 
issuer, or FEHB carrier.
    After a final determination, the certified IDR entity must maintain 
records of all claims and notices associated with the Federal IDR 
process for 6 years. The certified IDR entity must make such records 
available for examination by the plan, issuer, FEHB carrier, provider 
of air ambulance services, or state or Federal oversight agency upon 
request, except where such disclosure would violate state or Federal 
privacy laws. The Departments assume it will take 30 minutes for a 
clerical worker to establish the records for each determination under 
the Federal IDR process necessary to meet the requirements. The cost 
burden for each certified IDR entity would be 30 minutes, with an 
equivalent cost of approximately $28. As shown in Table 19, for the 
maintenance and recordkeeping of 4,899 claims, the annual burden would 
be 2,449 hours, with an estimated annual equivalent cost burden of $0.1 
million.\263\
---------------------------------------------------------------------------

    \263\ The burden is estimated as follows: (4,899 claims x 30 
minutes) = 2,449 hours for providers and issuers. A labor rate of 
$55.23 is used for a clerical worker. The labor rates are applied in 
the following calculation: (4,899 claims x 30 minutes x $55.23) = 
$135,278. Labor rates are EBSA estimates.

Table 19--Annual Burden and Cost for the Certified IDR Entity To Maintain Records for Providers of Air Ambulance
                                            Services Starting in 2022
----------------------------------------------------------------------------------------------------------------
                                                Total annual   Total estimated                   Total estimated
        Estimated number of responses          burden (hours)     labor cost      Other costs          cost
----------------------------------------------------------------------------------------------------------------
4,899.......................................           2,499               $0         $135,278         $135,278
----------------------------------------------------------------------------------------------------------------

Summary
    The total hour burden associated with the Federal IDR process for 
air ambulance services is 52,392 hours with an equivalent cost of 
$5,191,124. The total cost burden associated with the Federal IDR 
process for air ambulance services is $136,025. Half of the burden 
associated with the Federal IDR process for air ambulance services is 
estimated to be allocated to health plans, issuers, or TPAs, and the 
other half is estimated be allocated to health care providers. The 
burden associated with the Federal IDR process for air ambulance 
services is assumed to be shared by the Departments and OPM. HHS is 
assumed to cover 45 percent of the burden, while DOL and the Department 
of the Treasury will each cover 25 percent of the burden and OPM will 
cover 5 percent of the burden. As shown in Table 20, the hour burden 
associated with HHS requirements is estimated to be approximately 
23,576 hours at an equivalent cost of $2,336,006. The total cost burden 
associated with HHS requirement is estimated to be $61,211. As shown in 
Table 21, the hour burden associated with DOL and the Department of the 
Treasury requirements is estimated to be approximately 13,089 hours at 
an equivalent cost of $1,297,781 each. The total cost burden associated 
with DOL and the Department of the Treasury requirement is estimated to 
be $34,006. As shown in Table 22, the hour burden associated with OPM 
requirements is estimated to be approximately 2,620 hours at an 
equivalent cost of $259,556 each. The total cost burden associated with 
OPM requirement is estimated to be $6,801.

[[Page 56073]]



                  Table 20--HHS Summary Cost and Burden of Federal IDR Process for Providers of Air Ambulance Services Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Total annual   Total estimated    Mailing and                     Total estimated
                   Estimated number of responses                      burden (hours)     labor cost     printing cost     Other costs          cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
16,188.............................................................          23,576       $2,336,006             $336          $60,875       $2,397,217
--------------------------------------------------------------------------------------------------------------------------------------------------------


 Table 21--DOL and Department of the Treasury's Summary Cost and Burden of Federal IDR Process for Providers of Air Ambulance Services Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Total annual   Total estimated    Mailing and                     Total estimated
                   Estimated number of responses                      burden (hours)     labor cost     printing cost     Other costs          cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
8,993..............................................................          13,098       $1,297,781             $187          $33,819       $1,331,787
--------------------------------------------------------------------------------------------------------------------------------------------------------


                 Table 22--OPM's Summary Cost and Burden of Federal IDR Process for Providers of Air Ambulance Services Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Total annual   Total estimated    Mailing and                     Total estimated
                   Estimated number of responses                      burden (hours)     labor cost     printing cost     Other costs          cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
450................................................................           2,620         $259,556              $37           $6,734         $266,357
--------------------------------------------------------------------------------------------------------------------------------------------------------

3. ICRs Regarding the Request of Extension of Time Periods for 
Extenuating Circumstances (26 CFR 54.9816-8T, 29 CFR 2590.716-8, and 45 
CFR 149.510)
    The Departments do not have data on how often entities will request 
an extension; however, the Departments are of the view that extenuating 
circumstances will be rare. The Departments assume that 100 plans, 
issuers, FEHB carriers, health care and air ambulance service 
providers, or facilities will annually request an extension starting in 
2022 by completing the ``Request for Extension due to Extenuating 
Circumstances'' form and attesting that prompt action will be taken to 
ensure the payment determination under this section is made as soon as 
administratively practical. The Departments request comment on how many 
entities are likely to make such a request. The Departments estimate 
that it will take a clerical worker 15 minutes to prepare and send the 
notice. As shown in Table 23, the annual burden would be 25 hours, with 
an associated equivalent cost of $1,381.\264\ The Departments expect 
these requests to be submitted through the Federal IDR portal, and 
therefore have not estimated an associated mailing cost.
---------------------------------------------------------------------------

    \264\ The burden is estimated as follows: 100 requests x 0.25 
hour = 25 hours. A labor rate of $55.23 is used for a clerical 
worker. The labor rates are applied in the following calculation: 
100 requests x 0.25 hours x $55.23 = $1,381. Labor rates are EBSA 
estimates.

    Table 23--Annual Burden and Costs To Request an Extension of Times Periods for Extenuating Circumstances
                                                Starting in 2022
----------------------------------------------------------------------------------------------------------------
                                                Total annual   Total estimated                   Total estimated
        Estimated number of responses          burden (hours)     labor cost      Mailing cost         cost
----------------------------------------------------------------------------------------------------------------
100.........................................              25           $1,381               $0           $1,381
----------------------------------------------------------------------------------------------------------------

Summary
    The total hour burden associated with requests for extension is 25 
hours with an equivalent cost of $1,381. Half of the burden is 
estimated to be allocated to health plans, issuers, or TPAs, and the 
other half is estimated be allocated to health care providers. The 
burden is assumed to be shared by the Departments and OPM. HHS is 
assumed to cover 45 percent of the burden, while DOL and the Department 
of the Treasury will each cover 25 percent of the burden and OPM will 
cover 5 percent of the burden. As shown in Table 24, the hour burden 
associated with HHS requirements is estimated to be approximately 11 
hours at an equivalent cost of $621. As shown in Table 25, the hour 
burden associated with DOL and the Department of the Treasury 
requirements is estimated to be approximately 6 hours at an equivalent 
cost of $345 each. As shown in Table 26, the hour burden associated 
with OPM requirements is estimated to be approximately 1 hour at an 
equivalent cost of $69.

[[Page 56074]]



   Table 24--HHS's Annual Burden and Costs Request an Extension of Times Periods for Extenuating Circumstances
                                                Starting in 2022
----------------------------------------------------------------------------------------------------------------
                                                Total annual   Total estimated                   Total estimated
        Estimated number of responses          burden (hours)     labor cost      Mailing cost         cost
----------------------------------------------------------------------------------------------------------------
45..........................................              11             $621               $0             $621
----------------------------------------------------------------------------------------------------------------


 Table 25--DOL and Department of the Treasury's Annual Burden and Costs To Request an Extension of Times Periods
                                 for Extenuating Circumstances Starting in 2022
----------------------------------------------------------------------------------------------------------------
                                                Total annual   Total estimated                   Total estimated
        Estimated number of responses          burden (hours)     labor cost      Mailing cost         cost
----------------------------------------------------------------------------------------------------------------
25..........................................               6             $345               $0             $345
----------------------------------------------------------------------------------------------------------------


 Table 26--OPM's Annual Burden and Costs To Request an Extension of Times Periods for Extenuating Circumstances
                                                Starting in 2022
----------------------------------------------------------------------------------------------------------------
                                                Total annual   Total estimated                   Total estimated
        Estimated number of responses          burden (hours)     labor cost      Mailing cost         cost
----------------------------------------------------------------------------------------------------------------
5...........................................            1.25              $69               $0              $69
----------------------------------------------------------------------------------------------------------------

5. ICRs Regarding IDR Entity Certification and IDR Entity Monthly 
Reporting (26 CFR 54.9816-8T, 29 CFR 2590.716-8, and 45 CFR 149.510)
    An IDR entity must be certified under standards and procedures set 
forth in guidance promulgated by the Departments. The Departments 
estimate that there will be 50 entities that seek IDR certification.
    To be certified as a certified IDR entity, the entity will need to 
submit an application through the Federal IDR portal, demonstrating 
that it meets the requirements described in these interim final rules. 
An IDR entity must provide written documentation to the Departments 
regarding general company information (such as contact information, 
TIN, and website), as well as the applicable service area in which the 
IDR entity intends to conduct payment determinations under the Federal 
IDR process. The IDR entity must have (directly or through contracts or 
other arrangements) sufficient arbitration and claims administration, 
managed care, billing and coding, medical, legal, and other expertise, 
and sufficient staffing. The IDR entity must also establish processes 
to ensure against conflicts of interest, including to attesting that 
such conflicts do not exist, as defined under these interim final 
rules. The IDR entity will also need to demonstrate its financial 
stability and integrity. The corresponding paperwork (including 3 years 
of financial statements) will be submitted through the Federal IDR 
portal. Finally, each IDR entity that the Departments certify must 
enter into an agreement with the Departments. That agreement will 
include specified provisions encompassed by these interim final rules, 
including, but not limited to, the requirements applicable to certified 
IDR entities when making payment determinations as well as the 
requirements for certification and revocation (such as specifications 
for wind down activities and reallocation of certified IDR entity fees, 
where warranted).
    The Departments estimate that on average it will take a medical and 
health services manager 5.10 hours and a clerical worker 15 minutes to 
satisfy the requirement. The burden for each IDR entity would be 5.35 
hours, with an equivalent cost of approximately $548. As shown in Table 
27, for the 50 IDR entities that will go through certification, this 
results in a cost burden of $27,468 in the first year.\265\
---------------------------------------------------------------------------

    \265\ The burden is estimated as follows: (50 IDR entities x 
5.10 hours) + (50 IDR entities x 0.25 hours) = 268 hours. A labor 
rate of $105.01 is used for a medical and health services manager 
and a labor rate of $55.23 is used for a clerical worker. The labor 
rates are applied in the following calculation: (50 IDR entities x 
5.10 hours x $105.01) + (50 IDR entities x 0.25 hours x $55.23) = 
$27,468.

                     Table 27--One Time and Annual Burden and Costs To Certify and Recertify
----------------------------------------------------------------------------------------------------------------
                                     Estimated                         Total
              Year                   number of     Total annual      estimated      Other costs        Total
                                     responses    burden (hours)    labor cost                    estimated cost
----------------------------------------------------------------------------------------------------------------
2022............................              50               0              $0         $27,468         $27,468
2033............................              10               0               0           2,343           2,343
2024............................              10               0               0           2,343           2,343
    3 Year Average..............           23.33               0               0          10,718          10,718
----------------------------------------------------------------------------------------------------------------

    Upon selection of a certified IDR entity, the certified IDR entity 
must submit the administrative fee to the Departments on behalf of 
patient and the provider or facility. The Departments estimate that the 
time required to complete the information collection is estimated to 
average a clerical worker 18 hours annually,

[[Page 56075]]

including the time to review instructions, search existing data 
resources, gather required data, and complete and review information 
collection. As shown in Table 28, this results in a cost burden of 
$49,707.\266\
---------------------------------------------------------------------------

    \266\ The burden is estimated as follows: (18 hours x $55.23) = 
$994.14 each IDR entity. A labor rate of $55.23 is used for a 
clerical worker. The labor rates are applied in the following 
calculation: (50 x 18 hours x $55.23) = $49,707. Labor rates are 
EBSA estimates.

                 Table 28--Annual Burden and Costs To Submit Administrative Fee Starting in 2022
----------------------------------------------------------------------------------------------------------------
      Estimated number of IDR entities          Total annual   Total estimated                   Total estimated
                participating                  burden (hours)     labor cost       Other cost          cost
----------------------------------------------------------------------------------------------------------------
50..........................................               0               $0          $49,707          $49,707
----------------------------------------------------------------------------------------------------------------

    Certified IDR entities are required to be recertified every 5 
years. The Departments estimate that on average one-fifth of certified 
IDR entities will need to be recertified each year. Similar to the 
initial certification process, the IDR entities must ensure the 
processes are established and complete the corresponding paperwork, 
including the certification agreement, through the Federal IDR portal. 
The Departments estimate that, on average, it will take a medical and 
health services manager 2.10 hours and a clerical worker 15 minutes to 
satisfy the requirement. The burden for each certified IDR entity would 
be 2.35 hours, with an equivalent cost of approximately $224. As shown 
in Table 30, for the 10 certified IDR entities that will go through 
recertification, this results in a cost burden of $2,238 in subsequent 
years.\267\ Table 29 summarizes these costs over time.
---------------------------------------------------------------------------

    \267\ The burden is estimated as follows: (50 IDR entities x \1/
5\ x 2.1 hours) + (50 IDR entities x \1/5\ x 0.25 hours) = 24 hours. 
A labor rate of $105.01 is used for a medical and health services 
manager and a labor rate of $55.23 is used for a clerical worker. 
The labor rates are applied in the following calculation: (50 IDR 
entities x \1/5\ x 2.1 hours x $105.01) + (50 IDR entities x \1/5\ x 
0.25 hours x $55.23) = $2,343.

                     Table 29--One Time and Annual Burden and Costs To Certify and Recertify
----------------------------------------------------------------------------------------------------------------
                                     Estimated                         Total
              Year                   number of     Total annual      estimated      Other costs        Total
                                     responses    burden (hours)    labor cost                    estimated cost
----------------------------------------------------------------------------------------------------------------
2022............................              50               0              $0         $27,468         $27,468
2023............................              10               0               0           3,343           2,343
2024............................              10               0               0           2,343           2,343
    3 Year Average..............           23.33               0               0          10,718          10,718
----------------------------------------------------------------------------------------------------------------

    These interim final rules permit an individual, provider, facility, 
provider of air ambulance services, or group health plan, health 
insurance issuer offering group or individual health insurance 
coverage, or FEHB carrier to petition for a denial of a certification 
or a revocation of a certification with respect to an IDR entity 
seeking certification or certified IDR entity for failure to meet 
certain requirements set forth in the interim final rules. The 
Departments do not have data on how often such a petition might occur; 
however, the Departments assume that such a petition will be a rare 
occurrence. The Departments assume that there will be 3 petitions each 
year, and it will take on average a medical and health services manager 
2 hours and a clerical worker 15 minutes to prepare the petition. The 
burden for each IDR entity seeking certification or certified IDR 
entity would be 2.25 hours, with an equivalent cost of approximately 
$224. As shown in Table 30, for the three petitions, this results in a 
cost burden of $560.\268\
---------------------------------------------------------------------------

    \268\ The burden is estimated as follows: (3 IDR entities x 2 
hours) + (3 IDR entities x 0.25 hours) = 6 hours. A labor rate of 
$105.01 is used for a medical and health services manager and a 
labor rate of $55.23 is used for a clerical worker. The labor rates 
are applied in the following calculation: (3 IDR entities x 2 hours 
x $105.01) + (3 IDR entities x 0.25 hours x $55.23) = $560.

      Table 30--Annual Burden and Costs Associated With the Petition for Denial or Withdrawal of IDR Entity
                                         Certification Starting in 2022
----------------------------------------------------------------------------------------------------------------
                                                Total annual   Total estimated                   Total estimated
        Estimated number of responses          burden (hours)     labor cost      Other costs          cost
----------------------------------------------------------------------------------------------------------------
3...........................................               0               $0             $560             $560
----------------------------------------------------------------------------------------------------------------

    For each month, certified IDR entities will be required to report 
information on their activities to the Departments. The required 
information will include the number of Notices of IDR Initiation 
submitted to the certified IDR entity under the Federal IDR process 
during the immediately preceding month; the number of such Notices of 
IDR Initiation with respect to which a final determination was made; 
the size of the provider practices and the size of the facilities 
submitting Notices of IDR Initiation; the number of times the payment 
amount determined or agreed to exceeded the QPA, specified by items and 
services; and the total amount of certified IDR entity fees paid to the 
certified IDR entity.
    Additionally, for each Notice of IDR Initiation, the certified IDR 
entity must provide a description of the qualified IDR items and 
services included with respect to the Notice of IDR Initiation, 
including the relevant billing and

[[Page 56076]]

service codes; the relevant geographic region for purposes of the QPA; 
the amount of the offer submitted by the plan or issuer (as applicable) 
and by the provider or facility (as applicable) expressed as a dollar 
amount and as a percentage of the QPA; whether the offer selected by 
the certified IDR entity was the offer submitted by the plan or issuer 
(as applicable) or by the provider or facility (as applicable); the 
amount of the selected offer expressed as a dollar amount and a 
percentage of the QPA; the rationale for the certified IDR entity's 
decision; the practice specialty or type of each provider or facility 
(as applicable) involved in furnishing each qualified IDR item or 
service; the identity for each plan or issuer, and provider or 
facility, with respect to the determination; and for each 
determination, the number of business days elapsed between selection of 
the certified IDR entity and the determination of the out-of-network 
rate by the certified IDR entity.
    For each month, certified IDR entities will be required to report 
information on their activities to the Departments relating to air 
ambulance services. The certified IDR entities will be required to 
provide the number of Notices of IDR Initiation submitted under the 
Federal IDR process that pertain to air ambulance services during the 
month submitted to the certified IDR entity; the number of such Notices 
of IDR Initiation with respect to which a final determination was made; 
the number of times the payment amount exceeded the QPA; and the total 
amount of certified IDR entity fees paid to the certified IDR entity 
during the month that data was collected with regard to air ambulance 
services.
    With respect to each Notice of IDR Initiation involving air 
ambulance claims, the certified IDR entity must also provide a 
description of each air ambulance service, the point of pick-up (as 
defined in 42 CFR 414.605) for which the services were provided, the 
amount of the offer submitted by the group health plan, health 
insurance issuer, or FEHB carrier and by the nonparticipating provider 
of air ambulance services expressed as a dollar amount and a percentage 
of the QPA; whether the offer selected by the certified IDR entity was 
the offer submitted by such plan, issuer, or FEHB carrier or by the 
provider or facility; the amount of the offer so selected expressed as 
a dollar amount and a percentage of the QPA, including the rationale 
for the certified IDR entity's decision; the air ambulance vehicle 
type; the identity of the plan, issuer, FEHB carrier, or provider of 
air ambulance services with respect to such determination; and the 
number of business days elapsed between selection of the certified IDR 
entity and the determination of the payment amount by the certified IDR 
entity.
    For each month, certified IDR entities will be required to report 
the information on their activity to the Departments. The report will 
be submitted through the Federal IDR portal. The Departments estimate 
it will take a medical and health services manager 1 hour, on average, 
to prepare the reports and a clerical worker 15 minutes to prepare and 
send the report to the Departments each month. The burden for each 
certified IDR entity would be 1.25 hours, with an equivalent cost of 
approximately $118. For the 600 IDR entities, the annual burden would 
be 750 hours, with an equivalent cost burden of $71,291 each year.\269\
---------------------------------------------------------------------------

    \269\ The burden is estimated as follows: (50 IDR entities x 1 
hour x 12 reports annually) + (50 IDR entities x 0.25 hours x 12 
reports annually) = 750 hours. A labor rate of $105.01 is used for a 
medical and health services manager and a labor rate of $55.23 is 
used for a clerical worker. The labor rates are applied in the 
following calculation: (200 IDR entities x 1 hour x 12 reports x 
$105.01) + (200 IDR entities x 0.25 hours x 12 reports x $55.23) = 
$71,291.

                  Table 31--Annual Burden and Cost for the IDR Monthly Report Starting in 2022
----------------------------------------------------------------------------------------------------------------
                                                Total annual   Total estimated                   Total estimated
        Estimated number of responses          burden (hours)     labor cost      Other costs          cost
----------------------------------------------------------------------------------------------------------------
600.........................................               0                0          $71,291          $71,291
----------------------------------------------------------------------------------------------------------------

    The certified IDR entities are required, following the discovery of 
a breach of unsecured IIHI, to notify of the breach the provider, 
facility, or provider of air ambulance services; the plan or issuer; 
the Departments; and each individual whose unsecured IIHI has been, or 
is reasonably believed to have been, subject to the breach, to the 
extent possible. The Departments estimate that three certified IDR 
entities will have a breach each year. In addition, the Departments 
estimate that it will take a medical and health services manager 1 
hour, on average, to handle the initial breach and follow the required 
protocols, and that it will take a general and operations manager 45 
minutes, on average, to ensure the protocol is executed and adapt 
policies accordingly. The burden for each certified IDR entity would be 
1.75 hours, with an equivalent cost of approximately $197. For the 
three certified IDR entities, this results in a cost burden of $591 
each year.\270\ The Departments assume that 5 percent of notices would 
be mailed and will incur a printing cost of $0.05 per page and $0.55 
for postage. Thus, the mailing cost is estimated to be $0.09.\271\ The 
Departments seek comment addressing the costs that will be associated 
with these interim final rules.
---------------------------------------------------------------------------

    \270\ The burden is estimated as follows: (3 certified IDR 
entities x 1 hour) + (3 certified IDR entities x 0.75 hour) = 5 
hours. A labor rate of $105.01 is used for a medical and health 
services manager and a labor rate of $55.23 is used for a clerical 
worker. The labor rates are applied in the following calculation: (3 
certified IDR entities x 1 hour x $105.01) + (3 certified IDR 
entities x 0.75 hour x $122.55) = $591.
    \271\ This is calculated 3 x 0.05 x ($0.05 + $0.55) = $0.09.

                    Table 32--Annual Burden and Cost for Breach Notification Starting in 2022
----------------------------------------------------------------------------------------------------------------
                                                Total annual   Total estimated                   Total estimated
        Estimated number of responses          burden (hours)     labor cost      Other costs          cost
----------------------------------------------------------------------------------------------------------------
3...........................................               0            $0.09             $591          $591.09
----------------------------------------------------------------------------------------------------------------


[[Page 56077]]

Summary
    In the first year, the total cost burden associated with the IDR 
entity certification process is $149,616. In subsequent years, the 
total cost burden associated with the IDR entity certification process 
is $124,491. The three-year average cost burden associated with the IDR 
entity certification is $132,866. The burden associated with the IDR 
entity certification is shared by HHS, DOL, the Department of the 
Treasury, and OPM. As shown in Tables 33 through 35, it is estimated 
that 45 percent of the burden will be accounted for by HHS, 25 percent 
of the burden will be accounted for by DOL and the Department of the 
Treasury each, and 5 percent will be accounted for by OPM. Therefore, 
the cost burden associated with HHS requirements is $67,327 in the 
first year and $56,021 in subsequent years. The three-year average cost 
burden associated with HHS requirements is $59,790. The cost burden 
associated with each of the DOL and the Department of the Treasury 
requirements is $37,404 in the first year and $31,123 in subsequent 
years. The three-year average cost burden associated with DOL and the 
Department of the Treasury is $33,217 each. The cost burden associated 
with OPM requirements is $7,481 in the first year and $6,225 in 
subsequent years. The three-year average cost burden associated with 
OPM requirements is $6,643. The Departments seek comment on the 
assumptions and calculations made in this ICR.

               Table 33--HHS Summary Cost and Burden of IDR Entity Certification Starting in 2022
----------------------------------------------------------------------------------------------------------------
                                                Total annual   Total estimated                   Total estimated
        Estimated number of responses          burden (hours)     labor cost      Other costs          cost
----------------------------------------------------------------------------------------------------------------
305.........................................              $0               $0          $59,790          $59,790
----------------------------------------------------------------------------------------------------------------


 Table 34--DOL and the Department of the Treasury's Summary Cost and Burden of IDR Entity Certification Starting
                                                     in 2022
----------------------------------------------------------------------------------------------------------------
                                                Total annual   Total estimated                   Total estimated
        Estimated number of responses          burden (hours)     labor cost      Other costs          cost
----------------------------------------------------------------------------------------------------------------
170.........................................               0               $0          $33,217          $33,217
----------------------------------------------------------------------------------------------------------------


              TAble 35--OPM's Summary Cost and Burden of IDR Entity Certification Starting in 2022
----------------------------------------------------------------------------------------------------------------
                                                Total annual   Total estimated                   Total estimated
        Estimated number of responses          burden (hours)     labor cost      Other costs          cost
----------------------------------------------------------------------------------------------------------------
34..........................................               0               $0           $6,643           $6,643
----------------------------------------------------------------------------------------------------------------

ICRs Regarding Notice of the Right to Good Faith Estimates for 
Uninsured (or Self-Pay) Individuals (45 CFR 149.610)
    Convening providers and facilities are required under 45 CFR 
149.610(b) to inform uninsured (or self-pay) individuals of the 
availability of good faith estimates of expected charges. The notice 
regarding the availability of good faith estimates for uninsured (or 
self-pay) individuals must be written in a clear and understandable 
manner and made available in accessible formats and in the language(s) 
spoken by individual(s) seeking items and services with such convening 
provider or convening facility. Additionally, the notice must be 
prominently displayed (and easily searchable from a public search 
engine), on the convening provider's or convening facility's website, 
in the convening provider's or convening facility's office, and on-site 
where scheduling or questions about the cost of items and services 
occur. These ICRs estimate the information collection burdens for three 
groups of provider types: (1) Providers associated with health care 
facilities, (2) individual physician practitioners, and (3) wholly 
physician-owned private practices. For all three groups of providers, 
the ICRs apply the same methodology to estimate the burden, consisting 
of the following steps:
     Drafting notices informing uninsured (or self-pay) 
individuals of their right to receive a good faith estimate of expected 
charges.
     Displaying the notices on the provider's website, in the 
provider's office, and on-site where scheduling or questions about the 
cost of items or services occur.
     Posting a single page notice in at least two prominent 
locations.
     Printing and materials costs for posting notices.
    Details about the requirements of the steps that apply to all 3 
provider groups are described once for providers associated with health 
care facilities and apply equally to the other two provider groups. Any 
specific differences in estimating the burden to comply with these 
requirements are detailed for the specific provider group below. HHS 
invites comment on the assumptions and calculations made in these ICRs.
Providers Associated With Health Care Facilities
    Unique to providers associated with health care facilities, HHS 
assumes that such providers will enter into agreements with their 
associated health care facility to provide notice of the availability 
of good faith estimates of expected charges to uninsured (or self-pay) 
individuals on their behalf. HHS estimates that for each health care 
facility it will take an average of 2 hours for a lawyer to draft an 
agreement and a medical secretary and administrative assistant 2 hours 
to provide electronic copies to all associated convening providers to 
sign. As shown in Table 36, this results in an equivalent cost estimate 
of approximately $91,770,384 to be incurred as one-time cost in 
2021.\272\ HHS cannot estimate how

[[Page 56078]]

many providers will incur burden to sign the agreement, but assumes the 
burden to providers will be minimal; the use of electronic signature 
portals may reduce the burden to the convening provider. In future 
years, this agreement can be included in the contract between the 
facilities and providers at no additional cost.
---------------------------------------------------------------------------

    \272\ The burden is estimated as follows: 245,336 health care 
facilities x 2 hours = 490,672 hours. A labor rate of $140.96 is 
used for a lawyer. The labor rate is applied in the following 
calculation: 245,336 health care facilities x 2 hours x $140.96 = 
$69,165,125. 245,336 health care facilities x 2 hours = 490,672 
hours. A labor rate of $46.07 is used for a medical secretary and 
administrative assistant. The labor rate is applied in the following 
calculation: 245,336 health care facilities x 2 hours x $46.07 = 
$22,605,259. Therefore, 490,672 hours + 490,672 hours = 981,344 
total burden hours and $69,165,125 + $22,605,259 = $91,770,381 total 
annual respondent time cost.

   Table 36--Estimated One-Time and Hour Burden for Providers Associated With Facilities To Enter Into Agreements To Provide Notice of Right to a Good
                                                                     Faith Estimate
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Estimated        Estimated        Burden per
                                Year                                    number of        number of         response       Total burden   Total estimated
                                                                       respondents       responses         (hours)          (hours)            cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021...............................................................         245,336          245,336                4          981,344      $91,770,384
--------------------------------------------------------------------------------------------------------------------------------------------------------

    HHS assumes that the associated facility will draft the notices 
informing uninsured (or self-pay) individuals of their right to receive 
a good faith estimate of expected charges. Information regarding the 
availability of good faith estimates for uninsured (or self-pay) 
individuals must be written in a clear and understandable manner and 
made available in accessible formats and in the language(s) spoken by 
individual(s) seeking items and services with such convening provider. 
Additionally, the notices must be prominently displayed on the 
convening provider's website, and in the convening provider's office, 
and on-site where scheduling or questions about the cost of items or 
services occur. Providers may satisfy this requirement by utilizing the 
language in the standard notice anticipated to be issued by HHS. HHS 
estimates that for each health care facility, it will take an average 
of two hours for a lawyer to read and understand the anticipated notice 
and draft any additions in clear and understandable language, a medical 
secretary and administrative assistant 30 minutes to prepare the 
document for posting within the facility, and a computer programmer 1 
hour to post the information on each providers' website on behalf of 
the facility. As shown in Table 37, this results in an equivalent cost 
of approximately $102,754,069 to be incurred as a one-time cost in 
2021.\273\
---------------------------------------------------------------------------

    \273\ The burden is estimated as follows: 245,336 health care 
facilities x 2 hours = 490,672 hours. A labor rate of $140.96 is 
used for a lawyer. The labor rate is applied in the following 
calculation: 245,336 health care facilities x 2 hours x $140.96 = 
$69,165,125. 245,336 health care facilities x 0.5 hours = 122,668 
hours. A labor rate of $46.07 is used for a medical secretary and 
administrative assistant. The labor rate is applied in the following 
calculation: 245,336 health care facilities x 0.5 hours x $46.07 = 
$5,651,315. 245,336 health care facilities x 1 hours = 245,336 
hours. A labor rate of $113.77 is used for a computer programmer. 
The labor rate is applied to the following calculation: 245,336 
health care facilities x 1 hour x $113.77= $27,911,877. Therefore, 
490,672 hours + 122,668 hours + 245,336 hours = 858,676 total burden 
hours. Additionally, one-time printing and material costs are 
estimated using the following calculation: .05 x 2 pages x 245,336 
impacted health care facilities = 25, 752 total one-time cost for 
printing and materials. The total respondent time costs are 
$69,165,125 + $5,651,315 + $27,911,877 + $25,752 = $102,754,069.

 Table 37--Estimated One-Time Cost and Hour Burden for Health Care Facilities (Including on Behalf of Health Care Providers Associated With Health Care
                                               Facilities) To Draft and Post Notice of Good Faith Estimate
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Estimated        Estimated        Burden per
                       Year                            number of        number of         response       Total burden     Printing and   Total estimated
                                                      respondents       responses         (hours)          (hours)      materials costs        cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021..............................................         245,336          245,336              2.5          858,676          $25,752     $102,754,069
--------------------------------------------------------------------------------------------------------------------------------------------------------

    HHS assumes that each health care facility will post a single page 
document in at least 2 prominent locations so uninsured (or self-pay) 
individuals are provided reasonable notice of their right to a good 
faith estimate of expected charges. A prominent location in the health 
care facility may include patient appointment check-in kiosks, 
reception front-desks, patient appointment scheduling locations, and 
where patients pay bills. The notices should be drafted in clear and 
understandable language, shorter in length, and printed in legible font 
size. HHS assumes that each facility will incur a printing cost of 
$0.05 per page and materials for a total equivalent cost of $0.10. 
Hospitals may have a greater number of posting locations because of 
building size, therefore, HHS anticipates that hospitals will post four 
additional notices on average and incur an additional cost of $0.20 
each. This results in a one-time equivalent cost of approximately 
$24,534 to all non-hospital health care facilities and an overall one-
time cost of approximately $25,752 when including hospitals.
    HHS estimates that the one-time burden for providers and facilities 
to enter into agreements and for facilities to develop, prepare, print, 
and post the notices and update their respective websites will be 
approximately 1,840,020 total burden hours with an associated 
equivalent cost of approximately $194,524,453, as shown in Table 38.

[[Page 56079]]



 Table 38--Total Estimated One-Time Cost and Hour Burden for Health Care Facilities (Including on Behalf of Health Care Providers Associated With Health
                                       Care Facilities) To Provide Notice of Right to a Good Faith Estimate \274\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Estimated        Estimated        Burden per
                       Year                            number of        number of         response       Total annual     Printing and   Total estimated
                                                      respondents       responses         (hours)       burden (hours)  materials costs        cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021..............................................         245,336          245,336              7.5        1,840,020          $25,752     $194,524,453
--------------------------------------------------------------------------------------------------------------------------------------------------------

Individual Physician Practitioners
    HHS estimates that 145,887 individual physician practitioners will 
incur burden and cost to comply with this provision.\275\ HHS estimates 
an average of 2 hours and 30 minutes for the individual physician 
practitioner to read and understand the provided notice and draft any 
additions in clear and understandable language and (for 80% of 
individual physician practitioners) a computer programmer one hour to 
post the information in the provider's website. HHS estimates that the 
one-time burden for individual physician practitioners to develop, 
prepare, print, post the notices, and make website updates will be 
approximately 481,426 total burden hours. This results in an equivalent 
cost of approximately $75,075,712.\276\
---------------------------------------------------------------------------

    \274\ Estimated cost includes the sum of Table 28 and 29. It 
also includes computer programming cost to update health care 
facility websites with uninsured (or self-pay) individuals' right to 
the good faith estimate. Total printing and material costs for all 
health care facilities of $24,534 to all non-hospital health care 
facilities and an overall one-time cost of approximately $25,752 for 
hospitals.
    \275\ In generating these estimates, HHS reviewed data from the 
American Medical Association (AMA) and Kaiser Family Foundation. See 
Kane C. Policy Research Perspectives Recent Changes in Physician 
Practice Arrangements: Private Practice Dropped to Less than 50 
Percent of Physicians in 2020. Accessed July 15, 2021. https://www.ama-assn.org/system/files/2021-05/2020-prp-physician-practice-arrangements.pdf; Professionally Active Physicians. KFF. Published 
May 20, 2020. https://www.kff.org/other/state-indicator/total-active-physicians/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22.
    \276\ The burden is estimated as follows: 145,887 individual 
physician practitioners x 2.5 hours = 364,717 hours. A labor rate of 
$169.40 is used for a physician. The labor rate is applied to the 
following calculation: 145,887 individual physician practitioners x 
2.5 hours x $169.40 = $61,783,085. HHS assumes that 80 percent of 
individual physician practitioners have a website resulting in 
116,709 websites needed to be updated with good faith estimate 
notices. HHS assumes that the physician will pay a computer 
programmer to make the website update. The burden is estimated as 
follows: 116,709 websites needing updates x 1 hour = 116,709 hours. 
A labor rate of $113.77 is used for a computer programmer. The labor 
rate is applied to the following calculation: 116,709 websites 
needing updates x 1 hour x $113.77 = $13,278,038. Therefore, 364,717 
hours + 116,709 hours = 481,426 total burden hours. The total annual 
respondent time cost is $61,783,085 + $13,276,038 = $75,061,124. 
Total printing and material costs are of $14,589. Therefore, 
$75,061,124 + $14,589 = $75,075,712.
---------------------------------------------------------------------------

    HHS assumes that each individual physician practitioner will incur 
a printing cost of $0.05 per page and materials for a total equivalent 
cost of $0.10. This results in an annual one-time equivalent cost of 
approximately $14,589 to all individual physician practitioners.
    HHS estimates that the annual one-time burden for individual 
physician practitioners to develop, prepare, print, post the notices, 
and make website updates will be approximately 481,426 total burden 
hours with an associated equivalent cost of approximately $75,075,712, 
as shown in Table 39.
---------------------------------------------------------------------------

    \277\ HHS estimates that 80 percent (116,709) of individual 
physician practitioners have a website. Therefore, estimated cost 
includes computer programming cost to update individual physician 
practitioners' websites with uninsured (or self-pay) individuals' 
right to good faith estimate. HHS assumes that each individual 
physician practitioner will incur a printing cost of $0.05 per page 
and materials for a total equivalent cost of $0.10. Total printing 
and material costs of $14,589 are included.

  Table 39--Estimated One-Time Cost and Hour Burden for Individual Physician Practitioners To Draft and Post Notice of Good Faith Estimate Notice \277\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Estimated      Burden per
                   Year                          Estimated number of         number of       response      Total annual    Printing and        Total
                                                     respondents             responses        (hours)     burden (hours)  material costs  estimated cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021......................................  145,887 (All Physicians)....         145,887             2.5         364,717  ..............     $61,797,674
2021......................................  116,709 * (Additional burden       * 116,709               1         116,709  ..............      13,278,038
                                             for Subset of Physicians
                                             with Websites).
                                           -------------------------------------------------------------------------------------------------------------
    Total.................................  ............................  ..............             3.5         481,426  ..............   ** 75,075,712
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This is calculated as the sum of $61,797,674 (cost for all individual physician practitioners to draft notice of right to GFE) + $13,278,038 (cost for
  computer programmers to post notice of right to GFE on 80% of practitioners' websites). Total estimated cost of $75,075,712 includes burden for all
  individual physician practitioners to draft the notice of right to GFE plus the additional burden for computer programmers to add the notice to the
  website for the subset (80 percent) of total physicians that have websites, (80 percent of 145,887 = 116,709).

Wholly-Physician-Owned Private Practices
    HHS estimates that 120,525 wholly physician-owned private practices 
will incur burden and cost to comply with this provision.\278\ For each 
practice, HHS estimates an average of 2 hours and 30 minutes for a 
general and operations manager to read and understand the provided 
notice and draft any additions in clear and understandable language and 
a computer programmer one hour to post the information in the 
provider's website. This results in an equivalent cost of approximately 
$50,650,005 to be incurred as a one-time cost in 2021.\279\
---------------------------------------------------------------------------

    \278\ In generating these estimates, HHS reviewed data from the 
American Medical Association (AMA) and Kaiser Family Foundation. See 
Kane C. Policy Research Perspectives Recent Changes in Physician 
Practice Arrangements: Private Practice Dropped to Less than 50 
Percent of Physicians in 2020. Accessed July 15, 2021. https://www.ama-assn.org/system/files/2021-05/2020-prp-physician-practice-arrangements.pdf; Professionally Active Physicians. KFF. Published 
May 20, 2020. https://www.kff.org/other/state-indicator/total-active-physicians/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22.
    \279\ The burden is estimated as follows: 125,525 wholly 
physician-owned private practices x 2.5 hours = 301,312 hours. A 
labor rate of $122,55 is used for a general and operations manager. 
The labor rate is applied to the following calculation: 120,525 
wholly physician-owned private practices x 2.5 hours x $122.55 = 
$36,925,829. 120,525 wholly physician-owned private practices x 1 
hour = 120,525 hours. A labor rate of $113.77 is used for a computer 
programmer. The labor rate is applied to the following calculation: 
120,525 wholly physician-owned private practices x 1 hour x $113.77 
= $13,712,123. Therefore, the total burden hours are 301,312 + 
120,525 = 421,837 and the total equivalent costs are $36,925,829 + 
$13,712,123 = $50,637,952. The printing and material costs are 
$12,052. Therefore, $50,637,952 + $12,052 = $50,650,005.

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

[[Page 56080]]

    HHS assumes that each the wholly physician-owned private practice 
will incur a printing cost of $0.05 per page and materials for a total 
equivalent cost of $0.10. This results in a one-time equivalent cost of 
approximately $12,052 to all wholly physician-owned private practices.
    HHS estimates that the annual one-time burden for wholly physician-
owned private practices to develop, prepare, print, and post the 
notices, and make website updates will be approximately 421,837 total 
burden hours with an associated equivalent cost of approximately 
$50,650,005, as shown in Table 40.
---------------------------------------------------------------------------

    \280\ 301,312 + 120,525 = 421,837 and the total equivalent costs 
are $36,925,829 + $13,712,123 = $50,637,952. The printing and 
material costs are $12,052. Therefore, $50,637,952 + $12,052 = 
$50,650,005.

 Table 40--Estimated One-Time Cost and Hour Burden for Wholly Physician-Owned Private Practices To Draft and Post Notice of Good Faith Estimate Notice *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              Estimated        Estimated        Burden per
                   Year                       number of        number of         response       Total annual     Material and     Total estimated cost
                                             respondents       responses         (hours)       burden (hours)   printing costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021.....................................         120,525          120,525              3.5          421,837          $12,052         \280\ $50,650,005
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Estimated cost includes computer programming cost to update wholly physician-owned private practice website with uninsured (or self-pay) individuals'
  right to a good faith estimate. HHS assumes that each the wholly physician-owned private practice will incur a printing cost of $0.05 per page and
  materials for a total equivalent cost of $0.10. Total printing and material costs of $12,052 are included.

Summary
    HHS estimates that the one-time burden for health care providers 
(including providers associated with health care facilities, individual 
physician practitioners, and wholly physician-owned private practices) 
and health care facilities to provide notice of the right to a good 
faith estimate of expected charges to uninsured (self-pay) individuals 
will be approximately 2,743,283 total burden hours with an associated 
equivalent cost of approximately $320,250,169.
---------------------------------------------------------------------------

    \281\ This includes the time for providers associated with 
health care facilities to enter into agreements with health care 
facilities to provide good faith estimates on their behalf.

                               Table 41--Estimated Total One-Time Cost Related to Notice of Right to Good Faith Estimate *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Estimated        Estimated        Burden per      Total annual    Total printing
                       Year                            number of        number of         response       labor burden     and material   Total estimated
                                                      respondents       responses      (hours) \281\       (hours)           costs             cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021..............................................         511,748          511,748             15.5        2,743,283          $52,393     $320,250,169
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Tables 38 through 40 are combined to estimate total amounts. This table presents a cumulative 15.5 hours of burden per response for summary purposes.

7. ICRs Regarding Requirements for Provision of Good Faith Estimate of 
Expected Charges Upon Request of Uninsured (or Self-Pay) Individuals 
and for Scheduled Items and Services (45 CFR 149.610)
    These interim final rules require a convening provider or facility 
to provide a good faith estimate of expected charges to uninsured (or 
self-pay) individuals for scheduled items and services and upon request 
(45 CFR 149.610) including those items or services furnished by a co-
provider or co-facility in conjunction with the primary items or 
services. HHS estimates that approximately 3,498,942 uninsured (or 
self-pay) individuals will be impacted by this rule requirement.\282\ A 
total of 511,748 providers associated with health care facilities, 
individual physician practitioners, and wholly physician-owned private 
practices will incur the burden and costs associated with generating a 
good faith estimate.\283\ HHS welcomes comments on this estimate.
---------------------------------------------------------------------------

    \282\ The number is estimated as follows: 51,744,200 
nonemergency elective procedures (surgical and non-surgical) 
performed annually x 9.2% uninsured rate = 4,760,466. HHS assumes 
that some uninsured populations will forego elective procedures 
because of costs. Therefore, a 30% decrease adjustment was included 
resulting in 3,332,326. HHS also assumes a 5% adjustment for good 
faith estimate inquires only resulting in a final value of 
3,498,942. See Squitieri, Lee et al. ``Resuming Elective Surgery 
during Covid-19: Can Inpatient Hospitals Collaborate with Ambulatory 
Surgery Centers?.'' Plastic and reconstructive surgery. Global open 
vol. 9,2 e3442. 18 Feb. 2021, doi:10.1097/GOX.0000000000003442 (The 
study estimates 4,297,850 nonemergency elective procedures (surgical 
and non-surgical) are performed each month. This value was 
multiplied by 12 months = 51,574,200. HHS adjusted by approximately 
one-third of one percent to account annual increase in volume since 
study publication resulting in 51,744,200). See also KFF Health 
Insurance Coverage of the Total Population.
    \283\ These estimates include the total number of health care 
facilities and health care providers from the preceding ICR 
Regarding Notice of Right to Good Faith Estimate.
---------------------------------------------------------------------------

    HHS estimates that it will take an average of 30 minutes for a 
business operations specialist to determine a patient's insurance 
status, orally inform the patient of their right to receive a good 
faith estimate of expected charges, and provide an oral good faith 
estimate, if no additional items and services are needed. HHS assumes 
1,749,471 (50 percent) of uninsured (or self-pay) individuals fall in 
this category. Therefore, the annual equivalent cost estimate for 
provision of good faith estimates where no additional items and 
services are needed is of $88,628,201.\284\
---------------------------------------------------------------------------

    \284\ The burden is estimated as follows: 1,749,471 uninsured 
(or self-pay) individuals in need of good faith estimates without 
items and services x 0.50 hours = 874,736 hours. A labor rate of 
$101.32 is used for a business operations specialist. The labor rate 
is applied in the following calculation: 1,749,471 claims x 0.50 
hours x $101.32 = $88,628,201.
---------------------------------------------------------------------------

    HHS estimates that it will take an average of 30 minutes for a 
business operations specialist to generate a good faith estimate of 
expected charges furnished by a co-provider and co-facility for items 
and services to the convening provider. Given that 1,749,471 (50 
percent) of uninsured (or

[[Page 56081]]

self-pay) individuals require additional items and services, same 
number (1,749,471) of claims will be generated by co-providers or co-
facilities. Therefore, the annual equivalent cost estimate for good 
faith estimates sent to convening providers by co-providers or co-
facilities is $88,628,201.\285\ HHS assumes that all communication 
between convening provider and convening facility, and co-provider or 
co-facility will be done electronically. Thus, the cost to generate a 
good faith estimate for both cases where additional items and services 
are needed and where no additional items and services are needed is 
$354,512,803.\286\
---------------------------------------------------------------------------

    \285\ The burden is estimated as follows: 1,749,471 uninsured 
individuals in need of good faith estimates with additional items 
and services x 0.50 hours = 874,736 hours. A labor rate of $101.32 
is used for a business operations specialist. The labor rate is 
applied in the following calculation: 1,749,471 claims x 0.50 hours 
x $101.32 = $88,628,201.
    \286\ The burden is estimated as follows: $88,628,201 + 
$177,256,402 + $88,628,201 = $354,512,803.
---------------------------------------------------------------------------

    HHS estimates that it will take an average of 1 hour for a business 
operations specialist to determine a patient's insurance status, inform 
uninsured (or self-pay) individuals of their right to receive a good 
faith estimate of expected charges, and provide a good faith estimate, 
if additional items and services are needed. HHS assumes 1,749,471 (50 
percent) of uninsured (or self-pay) individuals fall in this category. 
Therefore, the annual equivalent cost estimate is $177,256,402.\287\ 
Thus, a total of $265,884,603 is estimated for business operations 
specialists, when adding the cost if no additional items and services 
are needed ($88,628,201) to the cost if additional items and services 
are needed ($177,256,402).
---------------------------------------------------------------------------

    \287\ The burden is estimated as follows: 1,749,471 claims x 1 
hour = 1,749,471 hours. A labor rate of $101.32 is used for a 
business operations specialist. The labor rate is applied in the 
following calculation: 1,749,471 claims x 1 hour x $101.32 = 
$177,256,402.
---------------------------------------------------------------------------

    HHS estimates that approximately 90 percent of uninsured (or self-
pay) individuals will receive a good faith estimate of expected charges 
through the mail that is 2 pages in length.\288\ The remaining 10 
percent of uninsured (or self-pay) individuals will receive the good 
faith estimate via electronic correspondence; costs are therefore 
accounted for in the 2 preceding paragraphs. HHS assumes that each 
convening provider or facility will incur a printing cost of $0.05 per 
page and materials for a total equivalent cost of $0.10 per good faith 
estimate. Therefore, the annual equivalent cost estimate for printing 
good faith estimates is $314,905 for all health care providers and 
health care facilities.\289\
---------------------------------------------------------------------------

    \288\ HHS assumes that the good faith estimate will be printed 
in 8.5'' x 11'' letter sized paper.
    \289\ The estimate is calculated as follows: $0.05 cost per page 
x 2 pages x 3,149,048 uninsured (or self-pay) individuals who 
receive a written good faith estimate = $314,905.
---------------------------------------------------------------------------

    HHS assumes that 5% of uninsured (or self-pay) individuals (i.e., 
157,452 uninsured (or self-pay) individuals) will request a mailed copy 
of their written good faith estimate of expected charges to a preferred 
location.\290\ HHS assumes that it will take an average of 15 minutes 
for a medical secretary and administrative assistant to print and mail 
the good faith estimate to the uninsured (or self-pay) individual. HHS 
estimates a postage cost of $0.55 per mailing. Therefore, the annual 
equivalent cost estimate is $1,900,057 to mail the good faith estimate 
for all health care providers and health care facilities.\291\
---------------------------------------------------------------------------

    \290\ An estimated 3,149,048 uninsured (or self-pay) individuals 
who receive a written good faith estimate x 5% = 157,452 uninsured 
(or self-pay) individuals who request a mailed good faith estimate 
of expected charges.
    \291\ The burden is estimated as follows: 157,452 good faith 
estimates x 0.25 hours = 39,363 hours. A labor rate of $46.07 is 
used for a medical secretary and administrative assistant. The labor 
rate is applied in the following calculation: 157,452 good faith 
estimates x 0.25 hours x $46.07 = $1,813,458. Therefore, 157,452 
mailed good faith estimates x $0.55 postage cost = $86,599 in 
mailing costs + $1,813,458 in annual respondent time cost = 
$1,900,057.

 Table 42--Estimated Annual Cost and Hour Burden per Response per Health Care Provider and Health Care Facility
               To Accept and Fulfill Requests for Mailed Good Faith Estimates of Expected Charges
                                              [Mailing costs only]
----------------------------------------------------------------------------------------------------------------
                                                                                                   Total mailing
                           Occupation                              Burden hours   Labor cost per     cost per
                                                                   per response        hour          response
----------------------------------------------------------------------------------------------------------------
Medical Secretary and Administrative Assistant..................            0.25          $46.07     \292\ $3.71
                                                                 -----------------------------------------------
    Total per Response..........................................            0.25  ..............            3.71
----------------------------------------------------------------------------------------------------------------


  Table 43--Estimated Annual Cost and Hour Burden for All Health Care Provider and Health Care Facility To Accept and Fulfill Requests for Mailed Good
                                                           Faith Estimates of Expected Charges
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Total labor
               Number of respondents                   Number of       Burden hours     Total burden       costs of       Mailing cost     Total annual
                                                       responses      per respondent       hours          reporting                            cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
511,748...........................................         157,452             0.25           39,363       $1,813,458          $86,599            \293\
                                                                                                                                             $1,900,057
--------------------------------------------------------------------------------------------------------------------------------------------------------

Summary
    HHS estimates the annual cost to a convening provider or facility 
to provide a good faith estimate of expected charges to uninsured (or 
self-pay) individuals for scheduled items and services and upon 
requests between 2022-2024 to be $356,727,765 (inclusive of printing, 
materials, mailing costs) and total burden hours of 3,538,305, as shown 
in Table 44.
---------------------------------------------------------------------------

    \292\ The cost per respondent is calculated as: $1,900,057 in 
medical secretary and administrative assistant annual respondent 
time cost to mail good faith estimate and mailing costs (printing 
costs are already accounted for in preceding section) divided by 
511,748 health care providers and health care facilities = $3.71 
cost per respondent.
    \293\ Therefore, 157,452 mailed good faith estimates x $0.55 
postage cost = $86,599 in mailing costs + $1,813,458 in annual 
respondent time cost = $1,900,057.
---------------------------------------------------------------------------

    HHS estimates the annual cost for printing and materials to provide 
written good faith estimates to uninsured (or self-pay) individuals to 
be $314,905. The mailing costs of good faith estimates to uninsured (or 
self-pay)

[[Page 56082]]

individuals is $86,599 with an annual total burden hour estimate of 
39,363 hours and a total annual respondent time cost of $1,813,458. 
This estimate is included in the total cost of $356,727,765. HHS 
invites comment on the assumptions and calculations made in this ICR.

    Table 44--Annual Burden and Total Cost Related to Provision of Good Faith Estimates for Uninsured (or-Self-Pay) Individuals (Labor, Printing, and
                                                                        Mailing)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                       Printing and
                                                    Estimated        Burden per      Total annual     Total annual    mailing costs     Total estimated
        Estimated number of respondents             number of         response      burden (hours)  respondent time    (labor cost           cost
                                                    responses         (hours)                             cost         included) *
--------------------------------------------------------------------------------------------------------------------------------------------------------
3,498,942......................................       3,498,942              2.0        3,538,305     $354,512,803       $2,214,961     ** $356,727,765
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This is calculated as following: $314,905 in printing costs + $86,599 in mailing costs + $1,813,458 in estimated annual respondent time cost to mail
  good faith estimate = $2,214,961. The Department assumes that it will take an average of fifteen minutes for a medical secretary and administrative
  assistant to print and mail the good faith estimate to the uninsured (or self-pay) individual. The annual burden hours associated with printing and
  mailing a good faith estimate of expected charges is 39,363 hours.
** The total estimated cost burden is the sum $88,628,201 (the GFE costs without co-providers or co-facilities) + $177,256,402 (the GFE costs with co-
  providers or co-facilities) + 88, 628, 201 (the GFE costs to convening providers) + $2,214,961 (printing and mailing costs, including labor).

8. ICRs Regarding Patient-Provider Dispute Resolution Process (45 CFR 
149.620)
    These interim final rules enable uninsured (or self-pay) 
individuals to initiate a patient-provider dispute resolution process 
if their final billed charges are in excess of the expected charges by 
at least $400 more than the amount listed in the good faith estimate 
supplied by the provider or facility. HHS does not have data on how 
many claims will be likely to result in patient-provider dispute 
resolution. For the estimates in this section, HHS relied on the 
experience of New York State. In 2015-2018 New York State had 1,486 
disputes involving surprise bills submitted to IDR, 31% of these 
disputes (457 in all) were found ineligible for IDR for various reasons 
including 8% (approximately 36 cases) due to enrollment in self-insured 
plans.\294\ For purposes of this analysis, HHS assumes that going 
forward, New York State will continue to see 40 IDR cases each year 
involving surprise bills for individuals enrolled with self-insured 
plans. Accordingly, the Departments estimate that there will be 26,659 
claims that result in patient-provider dispute resolution each 
year.\295\
---------------------------------------------------------------------------

    \294\ See https://www.dfs.ny.gov/system/files/documents/2019/09/dfs_oon_idr.pdf.
    \295\ The number is estimated as follows: 51,744,200 
nonemergency elective procedures (surgical and non-surgical) 
performed annually x 9.2% uninsured rate = 4,760,466. HHS assumes 
that some uninsured (or self-pay) individuals will forego elective 
procedures because of costs. Therefore, a 30% decrease adjustment 
was included resulting in 3,332,326. HHS assumes that 10% of 
uninsured (or self-pay) individuals who undergo a nonemergency 
elective procedure will receive a billed charge that is $400 or 
greater more than the total expected charges listed in the good 
faith estimate, therefore 3,332,326 x 10% = 333,233. HHS assumes 
that 8% will engage the provider-patient dispute resolution process, 
therefore 333,233 x 8% = 26,659.
---------------------------------------------------------------------------

    HHS estimates that it will take an average of 2 hours for an 
uninsured (or self-pay) individual or, if they use an authorized 
representative, 1 hour for their authorized representative to write, 
prepare, and send the notice to initiate the patient-provider dispute 
resolution to the Secretary of HHS. HHS assumes that uninsured (or 
self-pay) individuals will self-represent in 90% of the cases, while 
the remaining 10% will be represented by the uninsured (or self-pay) 
individual's authorized representative, as allowed by these interim 
final rules.
    HHS assumes the authorized representative will be a lawyer. 
Additionally, HHS assumes that a small percentage of uninsured (or 
self-pay) individuals or their authorized representatives will be asked 
to resubmit or send additional materials to complete the initiation 
process. This results in an annual equivalent cost estimate of 
$3,789,694.\296\ The patient-provider dispute resolution initiation 
notice must be submitted to the Secretary of HHS within 120 calendar 
days of receiving billed charges substantially in excess of the good 
faith estimate. HHS assumes for uninsured (or self-pay) individuals 
that 8,973 (34%) of initiation notices, including those that need to be 
resubmitted with additional materials, will be sent electronically and 
17,419 (66%) of the initiation notices, including those that need to be 
resubmitted with additional materials will be mailed with an associated 
printing and materials and postage costs of $12,193.\297\ \298\ To 
facilitate communication between parties and compliance with this 
notice requirement, HHS is concurrently issuing a model notice that the 
parties may use to satisfy the patient-provider dispute resolution 
initiation notice requirement. HHS will consider timely use of the 
model notice in accordance with the accompanying instructions to 
satisfy the notice requirement.
---------------------------------------------------------------------------

    \296\ The burden is estimated as follows: 26,659 x 90% = 23,993 
uninsured (or self-pay) individuals will self-represent. 23,993 x 2 
hours = 47,986 hours. A labor rate of $64.32 is used for uninsured 
(or self-pay) individuals (all occupations). The labor rate is 
applied in the following calculation: 23,993 claims x 2 hours x 
$64.32 = $3,086,427. HHS assumes that uninsured (or self-pay) 
individual will appoint an authorized representative in 10% of 
cases. .26,659 x 10% = 2,666 claims represented by an authorized 
representative. HHS assumes approximately 15% of uninsured (or self-
pay) individuals will need to resubmit or submit additional 
materials to initiate IDR, either themselves or through their 
authorized representative. Therefore, the burden estimate is 
calculated as follows: 23,993 claims x 10% = 2,399 resubmitted 
claims by individual x 2 hours x $64.32 (labor rate) = $129,899. 
2,666 claims x 5% = 133 resubmitted claims by authorized 
representative x 1 hour x $140.96 (labor rate) = $18,789. The total 
annual respondent time cost estimates are added as follows: 
$3,086,472 + $375,785 + $308,647 + $18,789 = $3,789,694. The total 
burden hours are 55,584.
    \297\ HHS assumes that the average initiation notice sent via 
mail by uninsured (or self-pay) individuals will be three pages in 
length and printed on 8.5'' x 11'' sized paper. HHS assumes a $0.05 
cost in printing and materials cost per page and $0.55 in postage 
cost. Therefore, $0.05 cost per page x 3 pages x 17,419 mailed 
initiation notices (inclusive of notices that needed to be 
resubmitted) = $2,613 in printing and material costs. The postage 
costs are calculated as $0.55 cost per postage x 17,419 mailed 
initiation notices = $9,580 in postage cost. The total printing and 
materials and postage costs are therefore $2,613 + $9,580 = $12,193.
    \298\ According to data from the National Telecommunications and 
Information Agency, 34% 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.
---------------------------------------------------------------------------

    These interim final rules require the SDR entity to attest to the 
Secretary of HHS whether a conflict of interest exists with the 
uninsured (or self-pay) individual, provider, or facility. HHS assumes 
that it will take an average of one hour for a general and operations 
manager and one hour for a lawyer to

[[Page 56083]]

determine whether a conflict of interest exists. HHS assumes all 
communication will be done electronically. This results in annual 
equivalent cost estimate of $7,024,811, as shown in Table 45.\299\
---------------------------------------------------------------------------

    \299\ The burden is estimated as follows: 26,659 claims x 1 hour 
= 26,659 hours. A labor rate of $122.55 is used for a general and 
operations manager. The labor rate is applied in the following 
calculation: 26,659 claims x 1 hour x $122.55 = $3,267,013. The 
burden for legal review is estimated as follows: 26,659 claims x 1 
hour = 26,659 hours. A labor rate of $140.96 is used for a lawyer. 
The labor rates are applied in the following calculation: 26,659 
claims x 1 hour x $140.96 = $3,757,798. The total annual response 
time cost estimates are added as follows: $3,267,013 + $3,757,798 = 
$7,024,811. The total burden hours are 53,317.

 Table 45--Estimated Annual Cost and Hour Burden Related to Attestation of Conflict of Interest With a Patient-
                                  Provider Dispute Resolution Initiation Notice
----------------------------------------------------------------------------------------------------------------
                                                 Estimated        Burden per
       Estimated number of respondents           number of         response       Total annual        Total
                                                 responses         (hours)       burden (hours)   estimated cost
----------------------------------------------------------------------------------------------------------------
26,659......................................          26,659                2           53,317       $7,024,811
----------------------------------------------------------------------------------------------------------------

    These interim final rules also require the selected SDR entity to 
review eligibility and completeness of the initiation notice and notify 
uninsured (or self-pay) individuals, providers or facilities of the SDR 
entity's selection to conduct dispute resolution. Providers and 
facilities are thereafter required to furnish additional information to 
the SDR entity within 10 business days after receiving notification of 
SDR entity selection. This information must include: (1) A copy of the 
good faith estimate provided to the uninsured (or self-pay) individual 
for the items or services under dispute; (2) a copy of the bill 
provided to the uninsured (or self-pay) individual for items or 
services under dispute; and (3) documentation providing evidence to 
demonstrate the difference between the billed charge and the expected 
charges in the good faith estimate reflects a medically necessary item 
or service and is based on unforeseen circumstances that could not have 
reasonably been anticipated by the provider or facility when the good 
faith estimate was provided. HHS estimates that it will take an average 
of 1 hour for a general and operations manager to address these 
requirements and send to the SDR entity. This results in an annual 
equivalent cost estimate of $3,267,013.\300\
---------------------------------------------------------------------------

    \300\ The burden is estimated as follows: 26,659 claims x 1 hour 
= 26,659 hours. A labor rate of $101.32 is used for a general and 
operations manager. The labor rate is applied in the following 
calculation: 26,659 claims x 1 hour x $122.55 = $3,267,013. Total 
burden hours are 26,659 hours.
---------------------------------------------------------------------------

    These interim final rules require the SDR entity to assess the 
information provided by the provider or facility according to the 
standards described in 45 CFR 149.620(f) and discussed in section 
VI.B.7 of the preamble. The SDR entity must respond within 30 days 
after receipt information from the provider or facility to make 
determinations on charges to the paid by the uninsured (or self-pay) 
individual. HHS estimates that it will take an average of 2 hours for a 
general and operations manager and 2 hours for a lawyer to assess the 
merits of the submitted information and determine a prevailing party. 
This results in an annual equivalent cost estimate of $14,049,622.\301\
---------------------------------------------------------------------------

    \301\ The burden is estimated as follows: 26,659 claims x 2 
hours = 53,317 hours. A labor rate of $122.55 is used for a general 
and operations manager. The labor rate is applied in the following 
calculation: 26,659 claims x 2 hours x $122.55 = $6,534,026. The 
burden for legal review is estimated as follows: 26,659 claims x 2 
hours = 53,317 hours. A labor rate of $140.96 is used for a lawyer. 
The labor rates are applied in the following calculation: 53,317 x 2 
hours x $140.96 = $7,515,596. The total annual respond time cost 
estimates are calculated as follows: $6,534,026 + $7,515,596 = 
$14,049,622. The total annual burden hours are 106,634 hours.

     Table 46--Estimated Annual Burden To Assess the Submitted Information and Determine a Prevailing Party
----------------------------------------------------------------------------------------------------------------
                                                 Estimated        Burden per
       Estimated number of respondents           number of         response       Total annual   Total estimated
                                                 responses         (hours)       burden (hours)        cost
----------------------------------------------------------------------------------------------------------------
26,659......................................          26,659                4          106,634      $14,049,622
----------------------------------------------------------------------------------------------------------------

    HHS estimates that it will take an average of 30 minutes for an SDR 
entity's general and operations manager to notify parties of the IDR 
determination. This results in an annual equivalent cost estimate of 
$1,633,506.\302\
---------------------------------------------------------------------------

    \302\ The burden is estimated as follows: 26,659 claims x 0.50 
hours = 13,329 hours. A labor rate of $122.55 is used for a general 
and operations manager. The labor rate is applied in the following 
calculation: 26,659 claims x 0.50 hours x $122.55 = $1,633,506.
---------------------------------------------------------------------------

    The SDR entity must also submit the administrative fee to the 
Secretary of HHS on behalf of uninsured (or self-pay) individuals. This 
burden includes time to review instructions, search existing data 
resources, gather data needed, and complete and review information 
collection. HHS estimates that the time required to complete and submit 
this information collection is estimated to average a clerical worker 
1.5 hours per month (or 18 hours annually), with a total annual cost of 
$2,982.42, as shown in Table 47.\303\ HHS estimates the total annual 
ongoing costs associated with the implementation and administration of 
the patient-provider dispute resolution program, including system 
maintenance, and program support, is estimated to be 12.6 million this 
cost will be offset by the collection of the $25 administrative fee, 
resulting in a total anticipated collection of $655,475 and a total 
annual cost to the Federal Government of $12 million.
---------------------------------------------------------------------------

    \303\ The burden is estimated as follows: A labor rate of $55.23 
is used for a clerical worker. The labor rate is applied in the 
following calculation: 3 annual responses x 18 hours x $55.23 = 
$2,982.42.

[[Page 56084]]



      Table 47--Estimated Annual Burden and Cost Related to SDR Submission of the Administrative Fee to HHS
----------------------------------------------------------------------------------------------------------------
                                                                 Total annual
                                                                 burden (1.5    Annual cost per  Annual cost for
                Estimated number of responses                     hours x 12       IDR entity     all responses
                                                                   months)
----------------------------------------------------------------------------------------------------------------
3............................................................              18           994.14        $2,982.42
----------------------------------------------------------------------------------------------------------------

Summary
    The total annual burden associated with the patient-provider 
dispute resolution process for uninsured (or self-pay) individuals and 
providers and facilities is 255,524 hours with an equivalent cost of 
$29,764,646, as shown in Table 48.\304\ HHS invites comment on the 
assumptions and calculations made in this ICR.
---------------------------------------------------------------------------

    \304\ The total estimated cost burden is the sum of $3,789,694 
(the cost for uninsured or self-pay individuals and authorized 
representatives to write, prepare and send the initiation notice for 
the patient-provider dispute resolution to the Secretary of HHS, 
including resubmission costs) + $7,024,811 (the cost for SDR 
entities to attest whether a Conflict of Interest exists with the 
uninsured or self-pay individual, provider or facility) + $3,267,013 
(the cost for uninsured or self-pay individuals and providers or 
facilities to furnish additional information to selected SDR 
entities) + $14,049,622 (the cost for the SDR entity to carry out 
the dispute outcome analysis for uninsured or self-pay individuals 
and providers and facilities) + 1,633,506 (the cost for the SDR 
entity to notify the parties of the SDR entity's determination) = 
$29,764,646. These costs represent 13.5 burden hours.

Table 48--Annual Burden and Cost Related to Patient-Provider Dispute Resolution Process for Uninsured (Self-Pay)
                                    Individuals and Providers and Facilities
----------------------------------------------------------------------------------------------------------------
                                                 Estimated        Burden per
       Estimated number of respondents           number of         response       Total annual   Total estimated
                                                 responses         (hours)       burden (hours)        cost
----------------------------------------------------------------------------------------------------------------
26,659......................................          26,659            13.50          255,524      $29,764,646
----------------------------------------------------------------------------------------------------------------

9. ICRs Regarding Patient-Provider Dispute Resolution Entity 
Certification (45 CR 149.620)
    An SDR entity contracted by HHS must be certified under standards 
and procedures set forth in 45 CFR 149.620(d). HHS estimates that there 
will be between 1 and 3 entities that HHS contracts with to be an SDR 
entity.
    To be an SDR entity, the entity will need to establish the 
processes and complete the corresponding paperwork. HHS estimates that 
on average it will take a general and operations manager 5 hours and 
medical secretary and administrative assistant 15 minutes to satisfy 
the requirement. As shown in Table 49, this result in an equivalent 
cost burden of $1,554 in the first year.\305\
---------------------------------------------------------------------------

    \305\ The burden is estimated as follows: (3 SDR entities x 5 
hours) + (3 SDR entities x 0.25 hours) = 15.75 hours. A labor rate 
of $101.32 is used for a general and operations manager and a labor 
rate of $46.07 is used for a medical secretary and administrative 
assistant. The labor rates are applied in the following calculation: 
(3 SDR entities x 5 hours x $101.32) + (3 SDR entities x 0.25 hours 
x $46.07) = $1,554.

   Table 49--Estimated First Year One-Time Cost Annual Burden and Cost Related to Patient-Provider SDR Entity
                Certification Process Cost Related to Patient-Provider Dispute Resolution Process
----------------------------------------------------------------------------------------------------------------
                                                 Estimated        Burden per
       Estimated number of respondents           number of         response       Total annual   Total estimated
                                                 responses         (hours)       burden (hours)        cost
----------------------------------------------------------------------------------------------------------------
3...........................................               3             5.25            15.75           $1,873
----------------------------------------------------------------------------------------------------------------

    HHS estimates that on average one-third of SDR entities (i.e., one 
of the three contracted organizations) will need to be recertified or 
reapproved, through the contracting process, each year and that on 
average it will take a general and operations manager 2 hours and 
medical secretary and administrative assistant 15 minutes to satisfy 
the requirement. This results in an equivalent cost burden of 
$257.\306\
---------------------------------------------------------------------------

    \306\ The burden is estimated as follows: (1 SDR entities x 2 
hours) + (1 SDR entities x 0.25 hours) = 2.25 hours. A labor rate of 
$122.55 is used for a general and operations manager and a labor 
rate of $46.07 is used for medical secretary and administrative 
assistant. The labor rates are applied in the following calculation: 
(1 SDR entities x 2 hours x $122.55) + (1 SDR entities x 0.25 hours 
x $46.07) = $257.
---------------------------------------------------------------------------

    The total annual burden associated with the SDR entity 
certification is 16 hours with an equivalent cost of $1,873. In 
subsequent years, the total hour burden associated with the SDR entity 
certification or recertification is 2.25 hours with an equivalent cost 
of $257. HHS will assess whether the SDR entity's meets the 
certification standards as discussed in section VI.B.5. of this 
preamble as part of contracting per the contract period. HHS invites 
comment on the assumptions and calculations made in this ICR.

[[Page 56085]]



                                     Table 50--Annual Burden and Cost Related to SDR Entity Re-Certification Process
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Estimated        Estimated        Burden per
                                Year                                    number of        number of         response       Total annual   Total estimated
                                                                       respondents       responses         (hours)       burden (hours)        cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2023...............................................................               1                1             2.25             2.25             $257
--------------------------------------------------------------------------------------------------------------------------------------------------------

10. Summary
    The total hour burden in the first six months associated with the 
Federal IDR process is 3,400,460 hours with an equivalent cost burden 
of $366,082,073. The total annual hour burden associated with the 
Federal IDR process is 4,972,056 hours with an equivalent cost burden 
of $518,688,160.
    The Departments assume that half of the burden associated with the 
required notices will be allocated to plans, issuers, and FEHB carriers 
and the other half of the burden will be allocated to providers, 
facilities, and providers of air ambulance services. The burden of the 
plans, issuers, and FEHB carriers will be allocated toward the hour 
burden of DOL, the Department of the Treasury, and OPM, and the burden 
of the providers will be allocated toward the hour burden of HHS. The 
burden of IDR entities will be fully allocated toward the cost burden.
    The total annual hour burden in the first six months associated 
with the Federal IDR process associated with HHS requirements is 
estimated to be 3,327,917 hours with an equivalent cost burden of 
$358,970,847. The total annual hour burden is 4,826,970 hours with an 
equivalent cost burden of $504,465,709.
    The total annual hour burden in the first six months associated 
with the Federal IDR process associated with DOL requirements is 
estimated to be estimated to be 32,974 hours with an equivalent cost of 
$3,232,375. The total annual hour burden is 65,948 hours with an 
equivalent cost burden of $6,464,751.
    The total annual hour burden in the first six months associated 
with the Federal IDR process for the Department of the Treasury is 
estimated to be 32,974 hours with an equivalent cost of $3,232,375. The 
total annual hour burden is estimated to be 65,948 hours with an 
equivalent cost burden of $6,464,751.
    The total annual hour burden in the first six months associated 
with the Federal IDR process for OPM is estimated to be 6,595 hours 
with an equivalent cost of $646,475. The total annual hour burden is 
estimated to be 13,190 hours with an equivalent cost burden of 
$1,292,950.
    In terms of the cost burden, the total cost burden in the first six 
months associated with the Federal IDR process is $610,675. The first 
year associated with the Federal IDR process is $1,206,242. In 
subsequent years, the total cost burden associated with the Federal IDR 
process is $1,143,314. Thus, the 3-year average cost burden is 
$1,164,290.
    The Departments classify the burden born by IDR entities and 
certified IDR entities as a cost burden. For certification, re-
certification, and monthly reporting requirements, 45 percent of the 
burden will be allocated toward the cost burden of HHS, while DOL and 
the Department of the Treasury will each be allocated 25 percent of the 
burden, and OPM will be allocated 5 percent of the burden. As shown in 
Table 51, for HHS requirements, the total cost burden associated with 
the Federal IDR process in the first six months is $392,214. The total 
cost burden in the first year is estimated to be $784,429 and in 
subsequent years, the total cost burden associated with the Federal IDR 
process is estimated to be $735,318. Thus, the 3-year average cost 
burden associated with HHS requirements is $751,688.
    As shown in Table 52, for DOL requirements, the total cost burden 
associated with the Federal IDR process in the first six months is 
$99,300. The total cost burden in the first year is estimated to be 
$191,734 and in subsequent years, the total cost burden associated with 
the Federal IDR process is estimated to be $185,452. Thus, the 3-year 
average cost burden associated with DOL requirements is $187,546.
    As shown in Table 52, for the Department of the Treasury 
requirements, the total cost burden associated with the Federal IDR 
process in the first six months is $99,300. The total cost burden in 
the first year is estimated to be $191,734 and in subsequent years, the 
total cost burden associated with the Federal IDR process is estimated 
to be $185,452. Thus, the 3-year average cost burden associated with 
the Department of the Treasury requirements is $187,546.
    As shown in Table 53, for OPM requirements, the total cost burden 
associated with the Federal IDR process in the first six months is 
$19,860. The total cost burden in the first year is estimated to 
$38,347 and in subsequent years, the total cost burden associated with 
the Federal IDR process is estimated to be $37,090. Thus, the 3-year 
average cost burden associated with OPM requirements is $37,509.

                                                               Table 51--HHS Summary Table
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Estimated       Estimated      Burden per                         Total
                          Year                               number of       number of       response      Total annual      estimated         Total
                                                            respondents      responses        (hours)     burden (hours)    labor cost    estimated cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022....................................................       4,059,610       4,103,368       1.1763434       4,826,970    $504,465,709        $784,429
2023....................................................       4,059,610       4,103,368       1.1763434       4,826,970     504,465,709         735,318
2024....................................................       4,059,610       4,103,368       1.1763434       4,826,970     504,465,709         735,318
    3 Year Average......................................       4,059,610       4,103,368       1.1763434       4,826,970     504,465,709         751,688
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                             Table 52--DOL's and Department of the Treasury's Summary Table
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Estimated       Estimated      Burden per                         Total
                          Year                               number of       number of       response      Total annual      estimated         Total
                                                            respondents      responses        (hours)     burden (hours)    labor cost    estimated cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022....................................................          22,257          36,675       1.7981697          65,948      $6,464,751        $191,734

[[Page 56086]]

 
2023....................................................          22,257          36,675       1.7981697          65,948       6,464,751         185,452
2024....................................................          22,257          36,675       1.7981697          65,948       6,464,751         185,452
    3 Year Average......................................          22,257          36,675       1.7981697          65,948       6,464,751         187,546
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                                              Table 53--OPM's Summary Table
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Estimated       Estimated      Burden per                         Total
                          Year                               number of       number of       response      Total annual      estimated         Total
                                                            respondents      responses        (hours)     burden (hours)    labor cost    estimated cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022....................................................          22,257           5,986       2.2034535          13,190      $1,292,950         $38,347
2023....................................................          22,257           5,986       2.2034535          13,190       1,292,950          37,090
2024....................................................          22,257           5,986       2.2034535          13,190       1,292,950          37,090
    3 Year Average......................................          22,257           5,986       2.2034535          13,190       1,292,950          37,509
--------------------------------------------------------------------------------------------------------------------------------------------------------

    These paperwork burden estimates are summarized as follows:

    Agency: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services.
    Type of Review: New collection.
    Title: Surprise Medical Billing: Independent Dispute Resolution.
    OMB Control Number: 0938-NEW.
    Affected Public: Businesses or other for-profits; not-for-profit 
institutions.
    Estimated Number of Respondents: 4,059,610.
    Estimated Number of Annual Responses: 4,103,368.
    Frequency of Response: Occasionally.
    Estimated Total Annual Burden Hours: 4,826,970 (3,327,917 during 
the first six months).
    Estimated Total Annual Burden Cost: $751,688 ($392,214 during the 
first six months).

    Agency: Employee Benefits Security Administration, Department of 
Labor.
    Type of Review: New collection.
    Title: Surprise Medical Billing: Independent Dispute Resolution.
    OMB Control Number: 1210-New.
    Affected Public: Businesses or other for-profits; not-for-profit 
institutions.
    Estimated Number of Respondents: 22,257.
    Estimated Number of Annual Responses: 36,675.
    Frequency of Response: Occasionally.
    Estimated Total Annual Burden Hours: 65,948 (32,974 during the 
first six months).
    Estimated Total Annual Burden Cost: $187,546 ($99,300 during the 
first six months).

    Agency: Internal Revenue Service, Department of the Treasury.
    Type of Review: New collection.
    Title: Surprise Medical Billing: Independent Dispute Resolution.
    OMB Control Number: 1545-New.
    Affected Public: Businesses or other for-profits; not-for-profit 
institutions.
    Estimated Number of Respondents: 22,257
    Estimated Number of Annual Responses: 36,675.
    Frequency of Response: Occasionally.
    Estimated Total Annual Burden Hours: 65,948 (32,974 during the 
first six months).
    Estimated Total Annual Burden Cost: $187,546 ($99,300 during the 
first six months).

    Agency: Office of Personnel Management.
    Type of Review: New collection.
    Title: Surprise Medical Billing: Independent Dispute Resolution.
    OMB Control Number: NEW.
    Affected Public: Businesses or other for-profits; not-for-profit 
institutions.
    Estimated Number of Respondents: 22,257.
    Estimated Number of Annual Responses: 5,986.
    Frequency of Response: Occasionally.
    Estimated Total Annual Burden Hours: 13,190 (6,595 during the first 
six months).
    Estimated Total Annual Burden Cost: $37,509 ($19,860 during the 
first six months).
11. ICRs Regarding Internal Claims and Appeals and External Review 
Requirements for Non- Grandfathered Plans and Grandfathered Plans--
Applicability (26 CFR 54.9815-2719, 29 CFR 2590.715-2719, and 45 CFR 
147.136)
    The No Surprises Act extends the protections related to external 
reviews to grandfathered plans. Grandfathered plans must comply either 
with a state external review process or a Federal review process. The 
disclosure requirements of the Federal external review process require: 
(1) A preliminary review by plans of requests for external review; (2) 
IROs to notify claimants of eligibility and acceptance for external 
review; (3) the plan or issuer to provide IROs with documentation and 
other information considered in making adverse benefit determination; 
(4) the IRO to forward to the plan or issuer any information submitted 
by the claimant; (5) plans to notify the claimant and IRO if it 
reverses its decision; (6) the IRO to provide notice of the final 
external review decision to the claimant and plan; and (7) the IRO to 
maintain records for six years.
    The Departments already have an existing information collection on 
the claim, appeals, and external review requirements for non-
grandfathered plans (1210-0144). Due to these interim final rules, the 
Departments have added the burden associated with the external review 
requirements for grandfathered plans and non-grandfathered plans in the 
information collection. The burden associated with the additional 
standards that non-grandfathered and grandfathered ERISA-covered plans 
must meet is shared equally between the Department of Labor and the 
Department of the Treasury. The burden associated with the additional 
standards that non-grandfathered and grandfathered non-Federal 
governmental plans and individual market policies must meet is assigned 
to the Department of Health and Human Services.
    The Departments estimate that there are approximately 84.4 million 
participants in self-insured ERISA-covered plans. Prior to the interim 
final rules, the Departments estimate that there are approximately 8.1 
million participants in ERISA-covered plans in

[[Page 56087]]

the states which have no external review laws or whose laws do not meet 
the Federal minimum requirements.\307\ These estimates lead to a total 
of 92.5 million participants. Among the 92.5 million participants, 80.5 
million participants in non-grandfathered plans and 12 million 
participants in grandfathered plans will be required to be covered by 
the external review requirement.
---------------------------------------------------------------------------

    \307\ These states are Alabama, Florida, Georgia, Pennsylvania, 
Texas, and Wisconsin. See Affordable Care Act: Working with States 
to Protect Consumers, available at https://www.cms.gov/CCIIO/Resources/Files/external_appeals.html. https://www.cms.gov/CCIIO/Resources/Files/external_appeals.html.
---------------------------------------------------------------------------

    The Departments estimate that there are approximately 1.3 external 
reviews for every 10,000 participants \308\ and that there will be 
approximately 12,275 external reviews annually. Experience from North 
Carolina indicates that about 75 percent of requests for external 
reviews are actually eligible to proceed to an external review,\309\ 
therefore it is expected that there will be about 16,261 (12,275/
0.7549) requests for external review. In addition, a 2 percent increase 
in the number of out-of-networks claims was incorporated in the 
estimate to capture the increase in burden on non-grandfathered plans 
resulting from the surprise billing and cost sharing protections of the 
external review.
---------------------------------------------------------------------------

    \308\ AHIP Center for Policy and Research, ``An Update on State 
External Review Programs, 2006,'' July 2008.
    \309\ North Carolina Department of Insurance. ``Health Insurance 
Smart NC: Annual Report on External Review Activity 2013.'' https://digital.ncdcr.gov/digital/collection/p249901coll22/id/730531.
---------------------------------------------------------------------------

    As shown in Table 54, the hour burden related to the preliminary 
review by grandfathered and non-grandfathered plans subject to ERISA of 
the request for external review is estimated to be 4,0655 hours (16,261 
* 0.25 hours) with an equivalent cost of $373,303 (4,065 hours * 
$91.83). The Departments assume that plans have a human resources 
specialist with a labor rate of $91.83. The human resource specialist 
will spend an average of 15 minutes for each of the requests, for a 
plan to make an eligibility determination. Plans will already have 
conducted internal reviews for eligible claimants; therefore, the 
required information for plans to make this determination should be 
readily available. Additionally, plans will incur material costs of 
$0.05 for paper and printing and $0.55 for postage for each request for 
external review, resulting in a cost of $9,756 (16,261 * $0.60).

           Table 54--Annual Burden and Cost for Plans To Conduct a Preliminary Review of the Request for the External Review Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Estimated                           Total
                                Year                                    number of       Total annual      estimated       Other costs         Total
                                                                        responses     burden  (hours)     labor cost                     estimated  cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022...............................................................          16,261            4,065         $373,303           $9,756         $383,060
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Once an eligibility determination is made, plans must provide the 
IRO with all documentation and other information considered in making 
an adverse benefit determination. The Departments assume that plans 
have clerical staff with a labor rate of $55.23. The clerical staff 
will spend an average of 5 minutes for each of the requests for a plan 
to send documentation to the IRO. As shown in Table 55, for the 12,275 
verified requests for external review the hour burden for grandfathered 
and non-grandfathered plans is estimated as 1,023 hours (12,275 * 5 
minutes), with an equivalent cost of $56,494 (1,023 * $55.23). 
Additionally, plans will incur material costs of $0.05 for each sheet 
of paper. The Departments assume that each set of documentation will be 
20 pages. Plans will also incur a cost of $0.55 for postage for each 
set of documentation, resulting in a cost burden of $19,026 (12,275 x 
$0.05 x 20 + 12,275 * $0.55). The Departments estimate that this will 
cost, on average, $1.55 per claimant.

                            Table 55--Annual Burden and Cost for Plans To Provide the IRO With Documentation Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Estimated                           Total
                                Year                                    number of       Total annual      estimated       Other costs         Total
                                                                        responses     burden  (hours)     labor cost                     estimated  cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022...............................................................          12,275            1,023          $56,494          $19,026          $75,519
--------------------------------------------------------------------------------------------------------------------------------------------------------

    IROs must also send each eligible claimant a notice of eligibility 
and acceptance. The Departments assume that the IRO has clerical staff 
with a labor rate of $55.23 that will spend, on average 5 minutes per 
claimant preparing the notice, and that IROs incur an average cost of 
$0.60 to print and mail the notice. As shown in Table 56, for the 
12,275 verified requests for external review, the cost burden for the 
clerical worker to send the notice of eligibility and acceptance is 
estimated to be $56,493 (12,275 x 5 minutes x $55.23). Additionally, 
IROs will incur material costs of $0.05 for each sheet of paper. The 
Departments assume that each notice of eligibility and acceptance will 
be 1 page. Plans will also incur a cost of $0.55 for postage for each 
set of documentation, resulting in a cost of $7,365 (12,275 x $0.05 + 
12,275 * $0.55). Thus, the total cost burden relating to the notice of 
eligibility and acceptance is $63,858.

[[Page 56088]]



                        Table 56--Annual Burden and Cost for IROs To Send Notices of Eligibility and Acceptance Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Estimated                           Total
                                Year                                    number of       Total annual      estimated       Other costs         Total
                                                                        responses     burden  (hours)     labor cost                     estimated  cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022...............................................................          12,275                0               $0          $63,858          $63,858
--------------------------------------------------------------------------------------------------------------------------------------------------------

    IROs are required to send to plans all documents that claimants 
submit. The Departments do not know what fraction of claimants will 
submit additional documentation, but for purposes of this burden 
analysis assume that half of claimants (6,137) do. The Departments 
assume that the IRO has clerical staff with a labor rate of $55.23 that 
will spend, on average 5 minutes per claimant preparing and forwarding 
the required documents, and that IROs incur an average cost of $1.05 to 
print and mail the documents. As shown in Table 57, for the 6,137 
verified requests for external review, the cost burden for the clerical 
worker to send the claimants' documentation to the plans is estimated 
to be $28,247 (6,137 x 5 minutes x $55.23). Additionally, IROs will 
incur material costs of $0.05 for each sheet of paper. The Departments 
assume that such documentation will be 10 pages. Plans will also incur 
a cost of $0.55 for postage for each set of documentation, resulting in 
a cost of $6,444 (6,137 x $0.05 x 10 + 12,275 * $0.55). Thus, the total 
cost burden relating to preparing and forwarding the required documents 
is $34,691.

                      Table 57--Annual Burden and Cost for IROs To Send Plans All Documents That Claimants Submit Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Estimated                           Total
                                Year                                    number of       Total annual      estimated       Other costs         Total
                                                                        responses     burden  (hours)     labor cost                     estimated  cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022...............................................................           6,137                0               $0          $34,691          $34,691
--------------------------------------------------------------------------------------------------------------------------------------------------------

    IROs are required to provide the notice of the final external 
review decision to the claimant and plan. The Departments estimate that 
preparing and sending the notices for each of the 12,275 external 
reviews will take IRO clerical staff, with a labor rate of $55.23, on 
average 5 minutes per claimant, and that IROs will incur an average 
cost of $1.05 to mail the documents. As shown in Table 58, for the 
12,275 verified requests for external review, the cost burden for the 
clerical worker to send the notice is estimated to be $56,494 (12,275 x 
5 minutes x $55.23). Additionally, IROs will incur material costs of 
$0.05 for each sheet of paper. The Departments assume that such 
documentation will be 10 pages. Plans will also incur a cost of $0.55 
for postage for each set of documentation, resulting in a cost of 
$12,888 (12,275 x $0.05 x 10 + 12,275 * $0.55). Thus, the total cost 
burden relating to notifying the claimant and plan of the final 
external review decision is $69,382.

     Table 58--Annual Burden and Cost for IROs To Notify the Claimant and Plan of the Result of the Final External Review Decision Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Estimated                           Total
                                Year                                    number of       Total annual      estimated       Other costs         Total
                                                                        responses     burden  (hours)     labor cost                     estimated  cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022...............................................................          12,275                0               $0          $69,382          $69,382
--------------------------------------------------------------------------------------------------------------------------------------------------------

    IROs also are required to maintain records of all claims and 
notices associated with the external review process for six years. The 
Departments are of the view that these documents would be retained as a 
customary part of business, but estimate that clerical staff will spend 
on average an additional 5 minutes per claimant ensuring all files are 
complete. As shown in Table 59, for the 12,275 verified requests for 
external review, the cost burden for the clerical worker to maintain 
records is estimated to be $56,494 (12,275 x 5 minutes x $55.23).

                         Table 59--Annual Burden and Cost for IROs To Maintain Record of All Claims and Notices Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Estimated                           Total
                                Year                                    number of       Total annual   estimated labor    Other costs         Total
                                                                        responses      burden (hours)        cost                         estimated cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022...............................................................          12,275                0               $0          $56,494          $56,494
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The Departments estimate that the Federal external review process 
will result in an hour burden of 5,088 hours with an equivalent cost of 
$429,797 related to external reviews. The cost burden of approximately 
$253,207 annually. The cost burden results from the cost associated 
with preparing and

[[Page 56089]]

mailing required notices and documents.
    The Departments are not able to estimate the number of reversals 
and the associated notices to claimants and IROs that plans would send 
due to reversing prior decisions, but the Departments are of the view 
that the number would be small.
    The existing information collection had an estimated hour burden of 
1,394 hours with an equivalent cost of $97,616 and an estimated cost 
burden by $3,002,150.
    In summary, the total burden associated the information collection 
for DOL and the Department of the Treasury, including the existing 
collection, is approximately 6,482 hours at an equivalent cost of 
$527,413 annually. The cost burden is approximately $3,255,357 
annually. Because the burden is shared equally between the DOL and the 
Department of the Treasury, the DOL's share is 3,241 hours at an 
equivalent cost of $263,706 annually. The DOL's share of the cost 
burden is $1,627,679 annually. The summary of burden for DOL and the 
Department of the Treasury's information collection has also been 
provided below.

                          Table 60--DOL and Department of the Treasury's Summary Table
----------------------------------------------------------------------------------------------------------------
                                     Estimated     Total annual        Total                           Total
              Year                   number of        burden         estimated      Other costs      estimated
                                     responses        (hours)       labor cost                         cost
----------------------------------------------------------------------------------------------------------------
2022............................         381,826           3,241        $263,706      $1,627,679      $1,891,385
2023............................         381,826           3,241         263,706       1,627,679       1,891,385
2024............................         381,826           3,241         263,706       1,627,679       1,891,385
    3 Year Average..............         381,826           3,241         263,706       1,627,679       1,891,385
----------------------------------------------------------------------------------------------------------------

    HHS estimates that there are approximately 13.5 million individual 
market enrollees and 19.3 million non-Federal governmental plans 
enrollees.\310\ These estimates lead to a total of 32.8 million total 
enrollees in individual market and non-Federal Government plans. Among 
the 32.8 million participants, 2.6 million are in grandfathered plans 
and 30.1 million are in non-grandfathered plans. HHS also added a two 
percent increase in the number of out-of-networks claims to capture the 
increase in burden on non-grandfathered plans resulting from the 
surprise billing and cost sharing protections of the external review 
resulting in an adjusted total of 30.7 million for non-grandfathered 
plans and an adjusted total of 33.3 million for all individual market 
and non-Federal Government plans.
---------------------------------------------------------------------------

    \310\ Individual market data is based on data from MLR annual 
report for the 2019 MLR reporting year, available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr. Non-federal 
government plans data from Agency for Healthcare Research and 
Quality, Center for Financing, Access and Cost Trends. 2019 Medical 
Expenditure Panel Survey-Insurance Component.
---------------------------------------------------------------------------

    HHS also estimates there are an estimated 1.3 external reviews for 
every 10,000 participants and that there will be approximately 4,337 
total external reviews annually for individual market and non-Federal 
Government plans. This amount includes 3,994 reviews for non-
grandfathered plans and 343 for grandfathered plans. Experience from 
North Carolina indicates that about 75 percent of requests for external 
reviews are actually eligible to proceed to an external review, 
therefore it is expected that there will be about 5,783 requests for 
external review. This amount includes 5,326 requests for non-
grandfathered plans and 457 requests for grandfathered plans.
    HHS estimated the burden for the disclosure requirements of the 
Federal external review process to align with the methodologies used to 
calculate the amounts in Tables 54 through 59. As shown in Table 61, 
HHS estimates that the disclosure requirements will require 3,066 
burden hours that result in $222,224 in estimated labor costs and 
$19,625 in other costs for printing and mailing. The total estimated 
updated burden for Federal external review to individual market and 
non-Federal Government plans is $241,850. This amount includes $222,729 
in costs for non-grandfathered plans and $19,121 for grandfathered 
plans. The existing collection for HHS for Federal external review is 
$128,876.

                 Table 61--HHS' Summary Table New Collection Burden for Federal External Review
----------------------------------------------------------------------------------------------------------------
                                     Estimated     Total annual        Total                           Total
              Year                   number of        burden         estimated      Other costs      estimated
                                     responses        (hours)       labor cost                         cost
----------------------------------------------------------------------------------------------------------------
2022............................           5,783           3,066        $222,224         $19,625        $241,850
2023............................           5,783           3,066         222,224          19,625         241,850
2024............................           5,783           3,066         222,224          19,625         241,850
    3 Year Average..............           5,783           3,066         222,224          19,625         241,850
----------------------------------------------------------------------------------------------------------------

Summary of Burden

    Type of Review: Revised Collection.
    Agency: DOL-EBSA.
    Title: Affordable Care Act Internal Claims and Appeals and External 
Review Procedures for Plans.
    OMB Numbers: 1210-0144.
    Affected Public: Businesses or other for-profits, Not-for-profit 
institutions.
    Estimated Number of Respondents: 2,524,241.
    Estimated Number of Annual Responses: 381,826.
    Frequency of Response: Occasionally.
    Estimated Total Annual Burden Hours: 3,241.
    Estimated Total Annual Burden Cost: $1,627,679.

    Type of Review: Revised Collection.
    Agency: Treasury--IRS.
    Title: Affordable Care Act Internal Claims and Appeals and External 
Review Procedures for Plans.
    OMB Numbers: 1545-2182.
    Affected Public: Businesses or other for-profits, Not-for-profit 
institutions.
    Estimated Number of Respondents: 2,524,241.

[[Page 56090]]

    Estimated Number of Annual Responses: 381,826.
    Frequency of Response: Occasionally.
    Estimated Total Annual Burden Hours: 3,241.
    Estimated Total Annual Burden Cost: $1,627,679.

    Type of Review: Revised Collection.
    Agency: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services.
    Title: Affordable Care Act Internal Claims and Appeals and External 
Review Procedures for Plans.
    OMB Numbers: 0938-1099.
    Affected Public: Businesses or other for-profits, Not-for-profit 
institutions.
    Estimated Number of Respondents: 5,783.
    Estimated Number of Annual Responses: 5,783.
    Frequency of Response: Occasionally.
    Estimated Total Annual Burden Hours: 3,066.
    Estimated Total Annual Burden Cost: $241,850.

D. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes 
certain requirements with respect to Federal rules that are (1) 
required to be published as a notice of proposed rulemaking subject to 
the notice and comment requirements of the Administrative Procedure Act 
(5 U.S.C. 553(b)) and (2) likely to 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.'' 
The Departments use 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.
    These interim final rules are exempt from the RFA because the 
Departments were not required to publish a notice of proposed 
rulemaking. Therefore, the RFA does not apply and the Departments are 
not required to either certify that the interim final rules will not 
have a significant economic impact on a substantial number of small 
entities or conduct a regulatory flexibility analysis. Nevertheless, 
the Departments carefully considered the likely impact of the interim 
final rules on small entities in connection with its assessment of the 
interim final rules' cost and benefits under Executive Order 12866.
    Table 58 summarizes the estimated costs on small issuers, 
physicians, and providers of air ambulance services. The original 
analysis was based on a cost per IDR payment determination basis. To 
break down the cost to a per-entity basis, the Departments assume that 
the distribution of per-entity costs is proportional to annual 
receipts. The affected entities are estimated based on the SBA's size 
standards. The size standards applied for issuers is North American 
Industry Classification System (NAICS) 524114, for which a business 
with less than $41.5 million in receipts is considered to be small. The 
size standard applied for physicians is NAICS 62111, for which a 
business with less than $12.0 million in receipts is considered to be 
small.\311\
---------------------------------------------------------------------------

    \311\ U.S. Small Business Administration. ``Table of Size 
Standards.'' (August 2019). https://www.sba.gov/document/support--table-size-standards.

                             Table 62--Summary of Estimates Costs on Small Entities
----------------------------------------------------------------------------------------------------------------
                                                                                     Aggregate
                                                                  Affected small    annual cost     Annual cost
                         Affected entity                          entities \312\     for small      per entity
                                                                                  entities \313\       \314\
----------------------------------------------------------------------------------------------------------------
Issuer..........................................................             132        $714,065          $5,410
Physicians \315\................................................          61,890     136,976,819           2,213
----------------------------------------------------------------------------------------------------------------

    The Departments do not have the same level of data used in the 
table above the air ambulance sub-sector and are of the view that this 
sub-sector is likely to differ from the ambulance services industry as 
a whole. In 2020, the total revenue of providers of air ambulance 
services is estimated to be $4.2 billion with 1,073 businesses in the 
industry.\316\ This results in an industry average of $3.9 million per 
business. Accordingly, the Departments are of the view that most 
providers of air ambulance services are likely to be small entities.
---------------------------------------------------------------------------

    \312\ For issuers, it is assumed that the size distribution 
across establishments is the same for issuers as their respective 
industry. For physicians, it is assumed that the size distribution 
across employment is the same for physicians as the respective 
industry. For more information, refer to the Affected Entities 
section in the Regulatory Impact Analysis.
    \313\ To estimate the proportion of the total costs that would 
fall onto small entities, the Departments assume that the proportion 
of costs is proportional to the industry receipts. The Departments 
are of the view that this assumption is reasonable, as the number of 
IDR payment determinations an entity is involved in is likely to be 
proportional to the amount of business in which the entity is 
involved. Applying data from the Census bureau of receipts by size 
for each industry, the Departments estimate that small issuers will 
incur 0.2 percent of the total costs incurred by all issuers, that 
physicians in small offices will incur 36.8 percent of total costs 
incurred by all physicians, and small providers of air ambulance 
services will incur 31.0 percent of total costs incurred by all 
providers of air ambulance services. (See Census Bureau. ``2017 SUSB 
Annual Data Tables by Establishment Industry, Data by Enterprise 
Receipt Size.'' (May 2021). https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html.)
    \314\ The Annual Cost per Entity is calculated by dividing the 
estimated Aggregate Annual Cost for Small Entities by the Estimated 
Affected Small Entities.
    \315\ The costs for physicians refers to the cost associated 
with each physician. The Departments estimate that 140,270 
physicians, on average, bill on an out-of-network basis and will be 
affected by these interim final rules, but the Departments do not 
have data on how many of the affected physicians are employed in 
small offices. This analysis is based on the number physicians 
affected, not the number of physician offices.
    \316\ IBIS World. ``Air Ambulance Service Industry in the US--
Market Research Report.'' (December 2020). https://www.ibisworld.com/united-states/market-research-reports/air-ambulance-services-industry/.
---------------------------------------------------------------------------

    Additionally, this analysis also excludes certified IDR entities 
and their respective costs, as the Departments do not have information 
on how many certified IDR entities are likely to be small entities.
    Consistent with the policy of the RFA, the Departments seek comment 
regarding the impact of these interim final rules on small entities.

E. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires each Federal agency to prepare a written statement assessing 
the effects of any Federal mandate in a proposed agency rule, or a 
finalization of such a proposal, that may result in an expenditure of 
$100 million or more (adjusted annually

[[Page 56091]]

for inflation with the base year 1995) in any one year by state, local, 
and tribal governments, in the aggregate, or by the private 
sector.\317\ However, Section 202 of UMRA does not apply to interim 
final rules or non-notice rules issued under the `good cause' exemption 
in 5 U.S.C. 553(b)(B).\318\ For purposes of the UMRA, this rule does 
not include any Federal mandate that the Departments expect to result 
in such expenditures by state, local, or tribal governments.
---------------------------------------------------------------------------

    \317\ 2 U.S.C. 1501 et seq. (1995).
    \318\ See OMB, Memorandum for the Heads of Executive Departments 
and Agencies, M-95-09, ``Guidance for Implementing Title II of 
S.1,'' 1995, available at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/memoranda/1995-1998/m95-09.pdf.
---------------------------------------------------------------------------

F. Federalism Statement

    Executive Order 13132 outlines fundamental principles of Federalism 
and requires Federal agencies to adhere to specific criteria when 
formulating and implementing policies that have ``substantial direct 
effects'' on the states, the relationship between the national 
government and states, or on the distribution of power and 
responsibilities among the various levels of government. Federal 
agencies promulgating regulations that have Federalism implications 
must consult with state and local officials and describe the extent of 
their consultation and the nature of the concerns of state and local 
officials in the preamble to the final rule.
    In the Departments' view, these interim final rules have Federalism 
implications because they have direct effects on the states, the 
relationship between the national government and the states, or the 
distribution of power and responsibilities among various levels of 
government. State and local government health plans may be subject to 
the Federal IDR process, where a specified state law does not apply. 
Additionally, the No Surprises Act authorizes states to enforce the new 
requirements, including those related to balance billing, with respect 
to issuers, providers, facilities, and providers of air ambulance 
services, with HHS enforcing only in cases where the state has notified 
HHS that the state does not have the authority to enforce or is 
otherwise not enforcing, or HHS has made a determination that a state 
has failed to substantially enforce the requirements. However, in the 
Departments' view, the Federalism implications of these interim final 
rules are substantially mitigated because the Departments expect that 
some states will have their own process for determining the total 
amount payable under such a plan or coverage for emergency services and 
to out-of-network providers at in-network facilities. Where a state has 
such a specified state law, the state law, rather than the Federal IDR 
process, will apply. The Departments anticipate that some states with 
their own IDR process may want to change their laws or adopt new laws 
in response to these interim final rules. The Departments anticipate 
that these states will incur a small incremental cost when making 
changes to their laws.
    In general, ERISA section 514 supersedes state laws to the extent 
that they relate to any covered employee benefit plan, including 
covered group health plans, and preserves state laws that regulate 
insurance, banking, or securities. While ERISA prohibits states from 
regulating a plan as an insurance or investment company or bank, the 
preemption provisions of ERISA section 731 and PHS Act section 2724 
(implemented in 29 CFR 2590.731(a) and 45 CFR 146.143(a)) apply so that 
requirements of Part 7 of ERISA and title XXVII of the PHS Act 
(including those of the Affordable Care Act) are not to be ``construed 
to supersede any provision of state law which establishes, implements, 
or continues in effect any standard or requirement solely relating to 
health insurance issuers in connection with group health insurance 
coverage except to the extent that such standard or requirement 
prevents the application of a requirement'' of a Federal standard. The 
conference report accompanying HIPAA indicates that this is intended to 
be the ``narrowest'' preemption of state laws.\319\ Additionally, the 
No Surprises Act requires that when a state law determines the total 
amount payable under such a plan, coverage, or issuer for emergency 
services or to out-of-network providers at in-network facilities, such 
state law will apply, rather than the Federal IDR process specified in 
these regulations.
---------------------------------------------------------------------------

    \319\ See House Conf. Rep. No. 104-736, at 205, reprinted in 
1996 U.S. Code Cong. & Admin. News 2018.
---------------------------------------------------------------------------

    In compliance with the requirement of Executive Order 13132 that 
agencies examine closely any policies that may have Federalism 
implications or limit the policy making discretion of the states, the 
Departments have engaged in efforts to consult with and work 
cooperatively with affected states, including participating in 
conference calls with and attending conferences of the NAIC, and 
consulting with state insurance officials on a state-by-state basis. In 
addition, the Departments consulted with the NAIC, as required by the 
No Surprises Act, to establish the geographic regions to be used in the 
methodology for calculating the QPA as detailed in the July 2021 
interim final rule.
    While developing these interim final rules, the Departments and OPM 
attempted to balance the states' interests in regulating health 
insurance issuers, providers, and facilities with the need to ensure at 
least the minimum Federal consumer protections in every state. By doing 
so, the Departments and OPM complied with the requirements of Executive 
Order 13132. The Departments welcome input from affected states 
regarding this assessment.

G. Congressional Review Act

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

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

Office of Personnel Management

5 CFR Chapter I

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

PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

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

    Authority:  5 U.S.C. 8913; Sec. 890.102 also issued under 
sections 11202(f), 11232(e), and 11246 (b) of Pub. L. 105-33, 111 
Stat. 251; Sec. 890.111 also issued under section 1622(b) of Pub. L. 
104-106, 110 Stat. 521 (36 U.S.C. 5522); Sec. 890.112 also issued 
under section 1 of Pub. L. 110-279, 122 Stat. 2604 (2 U.S.C. 2051); 
Sec. 890.113 also issued under section 1110 of Pub. L. 116-92, 133 
Stat. 1198 (5 U.S.C. 8702 note); Sec. 890.301

[[Page 56092]]

also issued under section 311 of Pub. L. 111-3, 123 Stat. 64 (26 
U.S.C. 9801); Sec. 890.302(b) also issued under section 1001 of Pub. 
L. 111-148, 124 Stat. 119, as amended by Pub. L. 111-152, 124 Stat. 
1029 (42 U.S.C. 300gg-14); Sec. 890.803 also issued under 50 U.S.C. 
3516 (formerly 50 U.S.C. 403p) and 22 U.S.C. 4069c and 4069c-1; 
subpart L also issued under section 599C of Pub. L. 101-513, 104 
Stat. 2064 (5 U.S.C. 5561 note), as amended; and subpart M also 
issued under section 721 of Pub. L. 105-261 (10 U.S.C. 1108), 112 
Stat. 2061.

Subpart A--Administration and General Provisions

0
2. Amend Sec.  890.114 by revising paragraph (a) and adding paragraph 
(d) to read as follows:


Sec.  890.114  Surprise billing.

    (a) A carrier must comply with requirements described in 26 CFR 
54.9816-3T through 54.9816-8T, 54.9817-1T, 54.9817-2T and 54.9822-1T; 
29 CFR 2590.716-3 through 2590.716-8, 2590.717-1, 2590.717-2 and 
2590.722; and 45 CFR 149.30, 149.110 through 149.140, 149.310, 149.510, 
and 149.520, in the same manner as such provisions apply to a group 
health plan or health insurance issuer offering group or individual 
health insurance coverage, subject to 5 U.S.C. 8902(m)(1), and the 
provisions of the carrier's contract. For purposes of application of 
such sections, all carriers are deemed to offer health benefits in the 
large group market.
* * * * *
    (d)(1) In addition to notification to the Department per 26 CFR 
54.9816-8T(b)(2)(iii), 29 CFR 2590.716-8(b)(2)(iii), and 45 CFR 
149.510(b)(2)(iii), a carrier must notify the Director of its intent to 
initiate the Federal IDR process, or its receipt of written notice that 
a provider, facility, or provider of air ambulance services has 
initiated the Federal IDR process, upon sending or receiving such 
notice.
    (2) The Director will coordinate with the Departments in resolving 
matters under 26 CFR 54.9816-8T(c)(4)(vi)(A)(1), 29 CFR 2590.716-
8(c)(4)(vi)(A)(1), or 45 CFR 149.510(c)(4)(vi)(A)(1) where fraud or 
misrepresentation are presented, and matters involving 26 CFR 54.9816-
8T(c)(4)(vii)(A)(2), 29 CFR 2590.716-8(c)(4)(vii)(A)(2), and 45 CFR 
149.510(c)(4)(vii)(A)(2). The Director will coordinate with the 
Departments in oversight of reports submitted by certified IDR entities 
with respect to carriers pursuant to 26 CFR 54.9816-8T(f), 29 CFR 
2590.716-8(f), or 45 CFR 149.510(f).

Department of the Treasury

Internal Revenue Service

26 CFR Chapter I

    Accordingly, 26 CFR part 54 is amended as follows:

PART 54--PENSION EXCISE TAXES

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

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

0
4. Section 54.9815-2719T is added to read as follows:


Sec.  54.9815-2719T  Internal claims and appeals and external review 
processes (temporary).

    (a) Scope and definitions--(1) Scope--(i) In general. This section 
sets forth requirements with respect to internal claims and appeals and 
external review processes for group health plans and health insurance 
issuers. Paragraph (b) of this section provides requirements for 
internal claims and appeals processes. Paragraph (c) of this section 
sets forth rules governing the applicability of State external review 
processes. Paragraph (d) of this section sets forth a Federal external 
review process for plans and issuers not subject to an applicable State 
external review process. Paragraph (e) of this section prescribes 
requirements for ensuring that notices required to be provided under 
this section are provided in a culturally and linguistically 
appropriate manner. Paragraph (f) of this section describes the 
authority of the Secretary to deem certain external review processes in 
existence on March 23, 2010, as in compliance with paragraph (c) or (d) 
of this section.
    (ii) Application to grandfathered health plans and health insurance 
coverage. The provisions of this section generally do not apply to 
coverage offered by health insurance issuers and group health plans 
that are grandfathered health plans, as defined under Sec.  54.9815-
1251. However, the external review process requirements under 
paragraphs (c) and (d) of this section, and related notice requirements 
under paragraph (e) of this section, apply to grandfathered health 
plans or coverage with respect to adverse benefit determinations 
involving items and services within the scope of the requirements for 
out-of-network emergency services, nonemergency services performed by 
nonparticipating providers at participating facilities, and air 
ambulance services furnished by nonparticipating providers of air 
ambulance services under sections 9816 and 9817 and Sec. Sec.  54.9816-
4T through 54.9816-5T and 54.9817-1T.
    (2) Definitions. For purposes of this section, the following 
definitions apply--
    (i) Adverse benefit determination. An adverse benefit determination 
means an adverse benefit determination as defined in 29 CFR 2560.503-1, 
as well as any rescission of coverage, as described in Sec.  54.9815-
2712(a)(2) (whether or not, in connection with the rescission, there is 
an adverse effect on any particular benefit at that time).
    (ii) Appeal (or internal appeal). An appeal or internal appeal 
means review by a plan or issuer of an adverse benefit determination, 
as required in paragraph (b) of this section.
    (iii) Claimant. Claimant means an individual who makes a claim 
under this section. For purposes of this section, references to 
claimant include a claimant's authorized representative.
    (iv) External review. External review means a review of an adverse 
benefit determination (including a final internal adverse benefit 
determination) conducted pursuant to an applicable State external 
review process described in paragraph (c) of this section or the 
Federal external review process of paragraph (d) of this section.
    (v) Final internal adverse benefit determination. A final internal 
adverse benefit determination means an adverse benefit determination 
that has been upheld by a plan or issuer at the completion of the 
internal appeals process applicable under paragraph (b) of this section 
(or an adverse benefit determination with respect to which the internal 
appeals process has been exhausted under the deemed exhaustion rules of 
paragraph (b)(2)(ii)(F) of this section).
    (vi) Final external review decision. A final external review 
decision means a determination by an independent review organization at 
the conclusion of an external review.
    (vii) Independent review organization (or IRO). An independent 
review organization (or IRO) means an entity that conducts independent 
external reviews of adverse benefit determinations and final internal 
adverse benefit determinations pursuant to paragraph (c) or (d) of this 
section.
    (viii) NAIC Uniform Model Act. The NAIC Uniform Model Act means the 
Uniform Health Carrier External Review Model Act promulgated by the 
National Association of Insurance Commissioners in place on July 23, 
2010.
    (b) Internal claims and appeals process--(1) In general. A group 
health plan and a health insurance issuer offering group health 
insurance

[[Page 56093]]

coverage must implement an effective internal claims and appeals 
process, as described in this paragraph (b).
    (2) Requirements for group health plans and group health insurance 
issuers. A group health plan and a health insurance issuer offering 
group health insurance coverage must comply with all the requirements 
of this paragraph (b)(2). In the case of health insurance coverage 
offered in connection with a group health plan, if either the plan or 
the issuer complies with the internal claims and appeals process of 
this paragraph (b)(2), then the obligation to comply with this 
paragraph (b)(2) is satisfied for both the plan and the issuer with 
respect to the health insurance coverage.
    (i) Minimum internal claims and appeals standards. A group health 
plan and a health insurance issuer offering group health insurance 
coverage must comply with all the requirements applicable to group 
health plans under 29 CFR 2560.503-1, except to the extent those 
requirements are modified by paragraph (b)(2)(ii) of this section. 
Accordingly, under this paragraph (b), with respect to health insurance 
coverage offered in connection with a group health plan, the group 
health insurance issuer is subject to the requirements in 29 CFR 
2560.503-1 to the same extent as the group health plan.
    (ii) Additional standards. In addition to the requirements in 
paragraph (b)(2)(i) of this section, the internal claims and appeals 
processes of a group health plan and a health insurance issuer offering 
group health insurance coverage must meet the requirements of this 
paragraph (b)(2)(ii).
    (A) Clarification of meaning of adverse benefit determination. For 
purposes of this paragraph (b)(2), an ``adverse benefit determination'' 
includes an adverse benefit determination as defined in paragraph 
(a)(2)(i) of this section. Accordingly, in complying with 29 CFR 
2560.503-1, as well as the other provisions of this paragraph (b)(2), a 
plan or issuer must treat a rescission of coverage (whether or not the 
rescission has an adverse effect on any particular benefit at that 
time) as an adverse benefit determination. (Rescissions of coverage are 
subject to the requirements of Sec.  54.9815-2712.)
    (B) Expedited notification of benefit determinations involving 
urgent care. The requirements of 29 CFR 2560.503-1(f)(2)(i) (which 
generally provide, among other things, in the case of urgent care 
claims for notification of the plan's benefit determination (whether 
adverse or not) as soon as possible, taking into account the medical 
exigencies, but not later than 72 hours after the receipt of the claim) 
continue to apply to the plan and issuer. For purposes of this 
paragraph (b)(2)(ii)(B), a claim involving urgent care has the meaning 
given in 29 CFR 2560.503-1(m)(1), as determined by the attending 
provider, and the plan or issuer shall defer to such determination of 
the attending provider.
    (C) Full and fair review. A plan and issuer must allow a claimant 
to review the claim file and to present evidence and testimony as part 
of the internal claims and appeals process. Specifically, in addition 
to complying with the requirements of 29 CFR 2560.503-1(h)(2)--
    (1) The plan or issuer must provide the claimant, free of charge, 
with any new or additional evidence considered, relied upon, or 
generated by the plan or issuer (or at the direction of the plan or 
issuer) in connection with the claim; such evidence must be provided as 
soon as possible and sufficiently in advance of the date on which the 
notice of final internal adverse benefit determination is required to 
be provided under 29 CFR 2560.503-1(i) to give the claimant a 
reasonable opportunity to respond prior to that date; and
    (2) Before the plan or issuer can issue a final internal adverse 
benefit determination based on a new or additional rationale, the 
claimant must be provided, free of charge, with the rationale; the 
rationale must be provided as soon as possible and sufficiently in 
advance of the date on which the notice of final internal adverse 
benefit determination is required to be provided under 29 CFR 2560.503-
1(i) to give the claimant a reasonable opportunity to respond prior to 
that date. Notwithstanding the rules of 29 CFR 2560.503-1(i), if the 
new or additional evidence is received so late that it would be 
impossible to provide it to the claimant in time for the claimant to 
have a reasonable opportunity to respond, the period for providing a 
notice of final internal adverse benefit determination is tolled until 
such time as the claimant has a reasonable opportunity to respond. 
After the claimant responds, or has a reasonable opportunity to respond 
but fails to do so, the plan administrator shall notify the claimant of 
the plan's benefit determination as soon as a plan acting in a 
reasonable and prompt fashion can provide the notice, taking into 
account the medical exigencies.
    (D) Avoiding conflicts of interest. In addition to the requirements 
of 29 CFR 2560.503-1(b) and (h) regarding full and fair review, the 
plan and issuer must ensure that all claims and appeals are adjudicated 
in a manner designed to ensure the independence and impartiality of the 
persons involved in making the decision. Accordingly, decisions 
regarding hiring, compensation, termination, promotion, or other 
similar matters with respect to any individual (such as a claims 
adjudicator or medical expert) must not be made based upon the 
likelihood that the individual will support the denial of benefits.
    (E) Notice. A plan and issuer must provide notice to individuals, 
in a culturally and linguistically appropriate manner (as described in 
paragraph (e) of this section) that complies with the requirements of 
29 CFR 2560.503-1(g) and (j). The plan and issuer must also comply with 
the additional requirements of this paragraph (b)(2)(ii)(E).
    (1) The plan and issuer must ensure that any notice of adverse 
benefit determination or final internal adverse benefit determination 
includes information sufficient to identify the claim involved 
(including the date of service, the health care provider, the claim 
amount (if applicable), and a statement describing the availability, 
upon request, of the diagnosis code and its corresponding meaning, and 
the treatment code and its corresponding meaning).
    (2) The plan and issuer must provide to participants and 
beneficiaries, as soon as practicable, upon request, the diagnosis code 
and its corresponding meaning, and the treatment code and its 
corresponding meaning, associated with any adverse benefit 
determination or final internal adverse benefit determination. The plan 
or issuer must not consider a request for such diagnosis and treatment 
information, in itself, to be a request for an internal appeal under 
this paragraph (b) or an external review under paragraphs (c) and (d) 
of this section.
    (3) The plan and issuer must ensure that the reason or reasons for 
the adverse benefit determination or final internal adverse benefit 
determination includes the denial code and its corresponding meaning, 
as well as a description of the plan's or issuer's standard, if any, 
that was used in denying the claim. In the case of a notice of final 
internal adverse benefit determination, this description must include a 
discussion of the decision.
    (4) The plan and issuer must provide a description of available 
internal appeals and external review processes, including information 
regarding how to initiate an appeal.
    (5) The plan and issuer must disclose the availability of, and 
contact

[[Page 56094]]

information for, any applicable office of health insurance consumer 
assistance or ombudsman established under PHS Act section 2793 to 
assist individuals with the internal claims and appeals and external 
review processes.
    (F) Deemed exhaustion of internal claims and appeals processes. (1) 
In the case of a plan or issuer that fails to strictly adhere to all 
the requirements of this paragraph (b)(2) with respect to a claim, the 
claimant is deemed to have exhausted the internal claims and appeals 
process of this paragraph (b), except as provided in paragraph 
(b)(2)(ii)(F)(2) of this section. Accordingly the claimant may initiate 
an external review under paragraph (c) or (d) of this section, as 
applicable. The claimant is also entitled to pursue any available 
remedies under section 502(a) of ERISA or under State law, as 
applicable, on the basis that the plan or issuer has failed to provide 
a reasonable internal claims and appeals process that would yield a 
decision on the merits of the claim. If a claimant chooses to pursue 
remedies under section 502(a) of ERISA under such circumstances, the 
claim or appeal is deemed denied on review without the exercise of 
discretion by an appropriate fiduciary.
    (2) Notwithstanding paragraph (b)(2)(ii)(F)(1) of this section, the 
internal claims and appeals process of this paragraph (b) will not be 
deemed exhausted based on de minimis violations that do not cause, and 
are not likely to cause, prejudice or harm to the claimant so long as 
the plan or issuer demonstrates that the violation was for good cause 
or due to matters beyond the control of the plan or issuer and that the 
violation occurred in the context of an ongoing, good faith exchange of 
information between the plan and the claimant. This exception is not 
available if the violation is part of a pattern or practice of 
violations by the plan or issuer. The claimant may request a written 
explanation of the violation from the plan or issuer, and the plan or 
issuer must provide such explanation within 10 days, including a 
specific description of its bases, if any, for asserting that the 
violation should not cause the internal claims and appeals process of 
this paragraph (b) to be deemed exhausted. If an external reviewer or a 
court rejects the claimant's request for immediate review under 
paragraph (b)(2)(ii)(F)(1) of this section on the basis that the plan 
met the standards for the exception under this paragraph 
(b)(2)(ii)(F)(2), the claimant has the right to resubmit and pursue the 
internal appeal of the claim. In such a case, within a reasonable time 
after the external reviewer or court rejects the claim for immediate 
review (not to exceed 10 days), the plan shall provide the claimant 
with notice of the opportunity to resubmit and pursue the internal 
appeal of the claim. Time periods for re-filing the claim shall begin 
to run upon claimant's receipt of such notice.
    (iii) Requirement to provide continued coverage pending the outcome 
of an appeal. A plan and issuer subject to the requirements of this 
paragraph (b)(2) are required to provide continued coverage pending the 
outcome of an appeal. For this purpose, the plan and issuer must comply 
with the requirements of 29 CFR 2560.503-1(f)(2)(ii), which generally 
provides that benefits for an ongoing course of treatment cannot be 
reduced or terminated without providing advance notice and an 
opportunity for advance review.
    (c) State standards for external review--(1) In general. (i) If a 
State external review process that applies to and is binding on a 
health insurance issuer offering group health insurance coverage 
includes at a minimum the consumer protections in the NAIC Uniform 
Model Act, then the issuer must comply with the applicable State 
external review process and is not required to comply with the Federal 
external review process of paragraph (d) of this section. In such a 
case, to the extent that benefits under a group health plan are 
provided through health insurance coverage, the group health plan is 
not required to comply with either this paragraph (c) or the Federal 
external review process of paragraph (d) of this section.
    (ii) To the extent that a group health plan provides benefits other 
than through health insurance coverage (that is, the plan is self-
insured) and is subject to a State external review process that applies 
to and is binding on the plan (for example, is not preempted by ERISA) 
and the State external review process includes at a minimum the 
consumer protections in the NAIC Uniform Model Act, then the plan must 
comply with the applicable State external review process and is not 
required to comply with the Federal external review process of 
paragraph (d) of this section. Where a self-insured plan is not subject 
to an applicable State external review process, but the State has 
chosen to expand access to its process for plans that are not subject 
to the applicable State laws, the plan may choose to comply with either 
the applicable State external review process or the Federal external 
review process of paragraph (d) of this section.
    (iii) If a plan or issuer is not required under paragraph (c)(1)(i) 
or (ii) of this section to comply with the requirements of this 
paragraph (c), then the plan or issuer must comply with the Federal 
external review process of paragraph (d) of this section, except to the 
extent, in the case of a plan, the plan is not required under paragraph 
(c)(1)(i) of this section to comply with paragraph (d) of this section.
    (2) Minimum standards for State external review processes. An 
applicable State external review process must meet all the minimum 
consumer protections in this paragraph (c)(2). The Department of Health 
and Human Services will determine whether State external review 
processes meet these requirements.
    (i) The State process must provide for the external review of 
adverse benefit determinations (including final internal adverse 
benefit determinations) by issuers (or, if applicable, plans) that are 
based on the issuer's (or plan's) requirements for medical necessity, 
appropriateness, health care setting, level of care, or effectiveness 
of a covered benefit, as well as a consideration of whether a plan or 
issuer is complying with the surprise billing and cost-sharing 
protections under sections 9816 and 9817 and Sec. Sec.  54.9816-1T 
through 54.9816-6T and 54.9817-1T.
    (ii) The State process must require issuers (or, if applicable, 
plans) to provide effective written notice to claimants of their rights 
in connection with an external review for an adverse benefit 
determination.
    (iii) To the extent the State process requires exhaustion of an 
internal claims and appeals process, exhaustion must be unnecessary 
where the issuer (or, if applicable, the plan) has waived the 
requirement; the issuer (or the plan) is considered to have exhausted 
the internal claims and appeals process under applicable law (including 
by failing to comply with any of the requirements for the internal 
appeal process, as outlined in paragraph (b)(2) of this section), or 
the claimant has applied for expedited external review at the same time 
as applying for an expedited internal appeal.
    (iv) The State process provides that the issuer (or, if applicable, 
the plan) against which a request for external review is filed must pay 
the cost of the IRO for conducting the external review. Notwithstanding 
this requirement, a State external review process that expressly 
authorizes, as of November 18, 2015, a nominal filing fee may continue 
to permit such fees. For this purpose, to be considered nominal, a 
filing fee must not exceed $25; it must be refunded to the claimant if 
the adverse benefit determination (or final

[[Page 56095]]

internal adverse benefit determination) is reversed through external 
review; it must be waived if payment of the fee would impose an undue 
financial hardship; and the annual limit on filing fees for any 
claimant within a single plan year must not exceed $75.
    (v) The State process may not impose a restriction on the minimum 
dollar amount of a claim for it to be eligible for external review. 
Thus, the process may not impose, for example, a $500 minimum claims 
threshold.
    (vi) The State process must allow at least four months after the 
receipt of a notice of an adverse benefit determination or final 
internal adverse benefit determination for a request for an external 
review to be filed.
    (vii) The State process must provide that IROs will be assigned on 
a random basis or another method of assignment that assures the 
independence and impartiality of the assignment process (such as 
rotational assignment) by a State or independent entity, and in no 
event selected by the issuer, plan, or the individual.
    (viii) The State process must provide for maintenance of a list of 
approved IROs qualified to conduct the external review based on the 
nature of the health care service that is the subject of the review. 
The State process must provide for approval only of IROs that are 
accredited by a nationally recognized private accrediting organization.
    (ix) The State process must provide that any approved IRO has no 
conflicts of interest that will influence its independence. Thus, the 
IRO may not own or control, or be owned or controlled by a health 
insurance issuer, a group health plan, the sponsor of a group health 
plan, a trade association of plans or issuers, or a trade association 
of health care providers. The State process must further provide that 
the IRO and the clinical reviewer assigned to conduct an external 
review may not have a material professional, familial, or financial 
conflict of interest with the issuer or plan that is the subject of the 
external review; the claimant (and any related parties to the claimant) 
whose treatment is the subject of the external review; any officer, 
director, or management employee of the issuer; the plan administrator, 
plan fiduciaries, or plan employees; the health care provider, the 
health care provider's group, or practice association recommending the 
treatment that is subject to the external review; the facility at which 
the recommended treatment would be provided; or the developer or 
manufacturer of the principal drug, device, procedure, or other therapy 
being recommended.
    (x) The State process allows the claimant at least five business 
days to submit to the IRO in writing additional information that the 
IRO must consider when conducting the external review, and it requires 
that the claimant is notified of the right to do so. The process must 
also require that any additional information submitted by the claimant 
to the IRO must be forwarded to the issuer (or, if applicable, the 
plan) within one business day of receipt by the IRO.
    (xi) The State process must provide that the decision is binding on 
the plan or issuer, as well as the claimant except to the extent the 
other remedies are available under State or Federal law, and except 
that the requirement that the decision be binding shall not preclude 
the plan or issuer from making payment on the claim or otherwise 
providing benefits at any time, including after a final external review 
decision that denies the claim or otherwise fails to require such 
payment or benefits. For this purpose, the plan or issuer must provide 
benefits (including by making payment on the claim) pursuant to the 
final external review decision without delay, regardless of whether the 
plan or issuer intends to seek judicial review of the external review 
decision and unless or until there is a judicial decision otherwise.
    (xii) The State process must require, for standard external review, 
that the IRO provide written notice to the issuer (or, if applicable, 
the plan) and the claimant of its decision to uphold or reverse the 
adverse benefit determination (or final internal adverse benefit 
determination) within no more than 45 days after the receipt of the 
request for external review by the IRO.
    (xiii) The State process must provide for an expedited external 
review if the adverse benefit determination (or final internal adverse 
benefit determination) concerns an admission, availability of care, 
continued stay, or health care service for which the claimant received 
emergency services, but has not been discharged from a facility; or 
involves a medical condition for which the standard external review 
time frame would seriously jeopardize the life or health of the 
claimant or jeopardize the claimant's ability to regain maximum 
function. As expeditiously as possible but within no more than 72 hours 
after the receipt of the request for expedited external review by the 
IRO, the IRO must make its decision to uphold or reverse the adverse 
benefit determination (or final internal adverse benefit determination) 
and notify the claimant and the issuer (or, if applicable, the plan) of 
the determination. If the notice is not in writing, the IRO must 
provide written confirmation of the decision within 48 hours after the 
date of the notice of the decision.
    (xiv) The State process must require that issuers (or, if 
applicable, plans) include a description of the external review process 
in or attached to the summary plan description, policy, certificate, 
membership booklet, outline of coverage, or other evidence of coverage 
it provides to participants, beneficiaries, or enrollees, substantially 
similar to what is set forth in section 17 of the NAIC Uniform Model 
Act.
    (xv) The State process must require that IROs maintain written 
records and make them available upon request to the State, 
substantially similar to what is set forth in section 15 of the NAIC 
Uniform Model Act.
    (xvi) The State process follows procedures for external review of 
adverse benefit determinations (or final internal adverse benefit 
determinations) involving experimental or investigational treatment, 
substantially similar to what is set forth in section 10 of the NAIC 
Uniform Model Act.
    (3) Transition period for external review processes. (i) Through 
December 31, 2017, an applicable State external review process 
applicable to a health insurance issuer or group health plan is 
considered to meet the requirements of PHS Act section 2719(b). 
Accordingly, through December 31, 2017, an applicable State external 
review process will be considered binding on the issuer or plan (in 
lieu of the requirements of the Federal external review process). If 
there is no applicable State external review process, the issuer or 
plan is required to comply with the requirements of the Federal 
external review process in paragraph (d) of this section.
    (ii) An applicable State external review process must apply for 
final internal adverse benefit determinations (or, in the case of 
simultaneous internal appeal and external review, adverse benefit 
determinations) provided on or after January 1, 2018. The Federal 
external review process will apply to such internal adverse benefit 
determinations unless the Department of Health and Human Services 
determines that a State law meets all the minimum standards of 
paragraph (c)(2) of this section. Through December 31, 2017, a State 
external review process applicable to a health insurance issuer or 
group health plan may be considered to meet the minimum standards of 
paragraph (c)(2), if it meets the temporary standards established by 
the

[[Page 56096]]

Secretary in guidance for a process similar to the NAIC Uniform Model 
Act.
    (d) Federal external review process. A plan or issuer not subject 
to an applicable State external review process under paragraph (c) of 
this section must provide an effective Federal external review process 
in accordance with this paragraph (d) (except to the extent, in the 
case of a plan, the plan is described in paragraph (c)(1)(i) of this 
section as not having to comply with this paragraph (d)). In the case 
of health insurance coverage offered in connection with a group health 
plan, if either the plan or the issuer complies with the Federal 
external review process of this paragraph (d), then the obligation to 
comply with this paragraph (d) is satisfied for both the plan and the 
issuer with respect to the health insurance coverage. A Multi State 
Plan or MSP, as defined by 45 CFR 800.20, must provide an effective 
Federal external review process in accordance with this paragraph (d). 
In such circumstances, the requirement to provide external review under 
this paragraph (d) is satisfied when a Multi State Plan or MSP complies 
with standards established by the Office of Personnel Management.
    (1) Scope.--(i) In general. The Federal external review process 
established pursuant to this paragraph (d) applies to the following:
    (A) An adverse benefit determination (including a final internal 
adverse benefit determination) by a plan or issuer that involves 
medical judgment (including, but not limited to, those based on the 
plan's or issuer's requirements for medical necessity, appropriateness, 
health care setting, level of care, or effectiveness of a covered 
benefit; its determination that a treatment is experimental or 
investigational; its determination whether a participant or beneficiary 
is entitled to a reasonable alternative standard for a reward under a 
wellness program; its determination whether a plan or issuer is 
complying with the nonquantitative treatment limitation provisions of 
Code section 9812 and Sec.  54.9812-1, which generally require, among 
other things, parity in the application of medical management 
techniques), as determined by the external reviewer. (A denial, 
reduction, termination, or a failure to provide payment for a benefit 
based on a determination that a participant or beneficiary fails to 
meet the requirements for eligibility under the terms of a group health 
plan or health insurance coverage is not eligible for the Federal 
external review process under this paragraph (d));
    (B) An adverse benefit determination that involves consideration of 
whether a plan or issuer is complying with the surprise billing and 
cost-sharing protections set forth in sections 9816 and 9817 and 
Sec. Sec.  54.9816-4T through 54.9816-5T and 54.9817-1T; and
    (C) A rescission of coverage (whether or not the rescission has any 
effect on any particular benefit at that time).
    (ii) Examples. The rules of paragraph (d)(1)(i) of this section are 
illustrated by the following examples:
    (A) Example 1--(1) Facts. A group health plan provides coverage for 
30 physical therapy visits generally. After the 30th visit, coverage is 
provided only if the service is preauthorized pursuant to an approved 
treatment plan that takes into account medical necessity using the 
plan's definition of the term. Individual A seeks coverage for a 31st 
physical therapy visit. A's health care provider submits a treatment 
plan for approval, but it is not approved by the plan, so coverage for 
the 31st visit is not preauthorized. With respect to the 31st visit, A 
receives a notice of final internal adverse benefit determination 
stating that the maximum visit limit is exceeded.
    (2) Conclusion. In this Example 1, the plan's denial of benefits is 
based on medical necessity and involves medical judgment. Accordingly, 
the claim is eligible for external review under paragraph (d)(1)(i) of 
this section. Moreover, the plan's notification of final internal 
adverse benefit determination is inadequate under paragraphs (b)(2)(i) 
and (b)(2)(ii)(E)(3) of this section because it fails to make clear 
that the plan will pay for more than 30 visits if the service is 
preauthorized pursuant to an approved treatment plan that takes into 
account medical necessity using the plan's definition of the term. 
Accordingly, the notice of final internal adverse benefit determination 
should refer to the plan provision governing the 31st visit and should 
describe the plan's standard for medical necessity, as well as how the 
treatment fails to meet the plan's standard.
    (B) Example 2--(1) Facts. A group health plan does not provide 
coverage for services provided out of network, unless the service 
cannot effectively be provided in network. Individual B seeks coverage 
for a specialized medical procedure from an out-of-network provider 
because B believes that the procedure cannot be effectively provided in 
network. B receives a notice of final internal adverse benefit 
determination stating that the claim is denied because the provider is 
out-of-network.
    (2) Conclusion. In this Example 2, the plan's denial of benefits is 
based on whether a service can effectively be provided in network and, 
therefore, involves medical judgment. Accordingly, the claim is 
eligible for external review under paragraph (d)(1)(i) of this section. 
Moreover, the plan's notice of final internal adverse benefit 
determination is inadequate under paragraphs (b)(2)(i) and 
(b)(2)(ii)(E)(3) of this section because the plan does provide benefits 
for services on an out-of-network basis if the services cannot 
effectively be provided in network. Accordingly, the notice of final 
internal adverse benefit determination is required to refer to the 
exception to the out-of-network exclusion and should describe the 
plan's standards for determining effectiveness of services, as well as 
how services available to the claimant within the plan's network meet 
the plan's standard for effectiveness of services.
    (C) Example 3--(1) Facts. A group health plan generally provides 
benefits for services in an emergency department of a hospital or 
independent freestanding emergency department. Individual C receives 
pre-stabilization emergency treatment in an out-of-network emergency 
department of a hospital. The group health plan determines that 
protections for emergency services under Sec.  54.9816-4T do not apply 
because the treatment did not involve ``emergency services'' within the 
meaning of Sec.  54.9816-4T(c)(2)(i). C receives an adverse benefit 
determination, and the plan imposes cost-sharing requirements that are 
greater than the requirements that would apply if the same services 
were provided in an in-network emergency department.
    (2) Conclusion. In this Example 3, the plan's determination that 
treatment received by C did not include emergency services involves 
medical judgment and consideration of whether the plan complied with 
Sec.  54.9816-4T. Accordingly, the claim is eligible for external 
review under paragraph (d)(1)(i) of this section.
    (D) Example 4--(1) Facts. A group health plan generally provides 
benefits for anesthesiology services. Individual D undergoes a surgery 
at an in-network health care facility and during the course of the 
surgery, receives anesthesiology services from an out-of-network 
provider. The plan decides the claim for these services without regard 
to the protections related to items and services furnished by out-of-
network providers at in-network facilities under Sec.  54.9816-5T. As a 
result, D receives an adverse benefit determination for the

[[Page 56097]]

services and is subject to cost-sharing liability that is greater than 
it would be if cost sharing had been calculated in a manner consistent 
with the requirements of Sec.  54.9816-5T.
    (2) Conclusion. In this Example 4, whether the plan was required to 
decide the claim in a manner consistent with the requirements of Sec.  
54.9816-5T involves considering whether the plan complied with Sec.  
54.9816-5T, as well as medical judgment, because it requires 
consideration of the health care setting and level of care. 
Accordingly, the claim is eligible for external review under paragraph 
(d)(1)(i) of this section.
    (E) Example 5--(1) Facts. A group health plan generally provides 
benefits for services in an emergency department of a hospital or 
independent freestanding emergency department. Individual E receives 
emergency services in an out-of-network emergency department of a 
hospital, including certain post-stabilization services. The plan 
processes the claim for the post-stabilization services as not being 
for emergency services under Sec.  54.9816-4T(c)(2)(ii) based on 
representations made by the treating provider that E was in a condition 
to receive notice from the provider about cost-sharing and surprise 
billing protections for these services, and subsequently gave informed 
consent to waive those protections. E receives an adverse benefit 
determination and is subject to cost-sharing requirements that are 
greater than the cost-sharing requirements that would apply if the 
services were processed in a manner consistent with Sec.  54.9816-4T.
    (2) Conclusion. In this Example 5, whether E was in a condition to 
receive notice about the availability of cost-sharing and surprise 
billing protections and give informed consent to waive those 
protections involves medical judgment and consideration of whether the 
plan complied with the requirements under Sec.  54.9816-4T(c)(2)(ii). 
Accordingly, the claim is eligible for external review under paragraph 
(d)(1)(i) of this section.
    (F) Example 6--(1) Facts. Individual F gives birth to a baby at an 
in-network hospital. The baby is born prematurely and receives certain 
neonatology services from a nonparticipating provider during the same 
visit as the birth. F was given notice about cost-sharing and surprise 
billing protections for these services, and subsequently gave informed 
consent to waive those protections. The claim for the neonatology 
services is coded as a claim for routine post-natal services and the 
plan decides the claim without regard to the requirements under Sec.  
54.9816-5T(a) and the fact that those protections may not be waived for 
neonatology services under Sec.  54.9816-5T(b).
    (2) Conclusion. In this Example 6, medical judgment is necessary to 
determine whether the correct code was used and compliance with Sec.  
54.9816-5T(a) and (b) must also be considered. Accordingly, the claim 
is eligible for external review under paragraph (d)(1)(i) of this 
section. The Departments also note that, to the extent the 
nonparticipating provider balance bills Individual F for the 
outstanding amounts not paid by the plan for the neonatology services, 
such provider would be in violation of PHS Act section 2799B-2 and its 
implementing regulations at 45 CFR 149.420(a).
    (G) Example 7--(1) Facts. A group health plan generally provides 
benefits to cover knee replacement surgery. Individual G receives a 
knee replacement surgery at an in-network facility and, after receiving 
proper notice about the availability of cost-sharing and surprise 
billing protections, provides informed consent to waive those 
protections. However, during the surgery, certain anesthesiology 
services are provided by an out-of-network nurse anesthetist. The claim 
for these anesthesiology services is decided by the plan without regard 
to the requirements under Sec.  54.9816-5T(a) or to the fact that those 
protections may not be waived for ancillary services such as 
anesthesiology services provided by an out-of-network provider at an 
in-network facility under Sec.  54.9816-5T(b). G receives an adverse 
benefit determination and is subject to cost-sharing requirements that 
are greater than the cost-sharing requirements that would apply if the 
services were provided in a manner consistent with Sec.  54.9816-5T(a) 
and (b).
    (2) Conclusion. In this Example 7, consideration of whether the 
plan complied with the requirements in Sec.  54.9816-5T(a) and (b) is 
necessary to determine whether cost-sharing requirements were applied 
appropriately. Accordingly, the claim is eligible for external review 
under paragraph (d)(1)(i) of this section.
    (2) External review process standards. The Federal external review 
process established pursuant to this paragraph (d) is considered 
similar to the process set forth in the NAIC Uniform Model Act and, 
therefore satisfies the requirements of paragraph (d)(2) if such 
process provides the following.
    (i) Request for external review. A group health plan or health 
insurance issuer must allow a claimant to file a request for an 
external review with the plan or issuer if the request is filed within 
four months after the date of receipt of a notice of an adverse benefit 
determination or final internal adverse benefit determination. If there 
is no corresponding date four months after the date of receipt of such 
a notice, then the request must be filed by the first day of the fifth 
month following the receipt of the notice. For example, if the date of 
receipt of the notice is October 30, because there is no February 30, 
the request must be filed by March 1. If the last filing date would 
fall on a Saturday, Sunday, or Federal holiday, the last filing date is 
extended to the next day that is not a Saturday, Sunday, or Federal 
holiday.
    (ii) Preliminary review--(A) In general. Within five business days 
following the date of receipt of the external review request, the group 
health plan or health insurance issuer must complete a preliminary 
review of the request to determine whether:
    (1) The claimant is or was covered under the plan or coverage at 
the time the health care item or service was requested or, in the case 
of a retrospective review, was covered under the plan or coverage at 
the time the health care item or service was provided;
    (2) The adverse benefit determination or the final adverse benefit 
determination does not relate to the claimant's failure to meet the 
requirements for eligibility under the terms of the group health plan 
or health insurance coverage (e.g., worker classification or similar 
determination);
    (3) The claimant has exhausted the plan's or issuer's internal 
appeal process unless the claimant is not required to exhaust the 
internal appeals process under paragraph (b)(1) of this section; and
    (4) The claimant has provided all the information and forms 
required to process an external review.
    (B) Within one business day after completion of the preliminary 
review, the plan or issuer must issue a notification in writing to the 
claimant. If the request is complete but not eligible for external 
review, such notification must include the reasons for its 
ineligibility and current contact information, including the phone 
number, for the Employee Benefits Security Administration. If the 
request is not complete, such notification must describe the 
information or materials needed to make the request complete, and the 
plan or issuer must allow a claimant to perfect the request for 
external review within the four-month filing period or within the 48 
hour period following the receipt of the notification, whichever is 
later.

[[Page 56098]]

    (iii) Referral to Independent Review Organization--(A) In general. 
The group health plan or health insurance issuer must assign an IRO 
that is accredited by URAC or by similar nationally-recognized 
accrediting organization to conduct the external review. The IRO 
referral process must provide for the following:
    (1) The plan or issuer must ensure that the IRO process is not 
biased and ensures independence;
    (2) The plan or issuer must contract with at least three (3) IROs 
for assignments under the plan or coverage and rotate claims 
assignments among them (or incorporate other independent, unbiased 
methods for selection of IROs, such as random selection); and
    (3) The IRO may not be eligible for any financial incentives based 
on the likelihood that the IRO will support the denial of benefits.
    (4) The IRO process may not impose any costs, including filing 
fees, on the claimant requesting the external review.
    (B) IRO contracts. A group health plan or health insurance issuer 
must include the following standards in the contract between the plan 
or issuer and the IRO:
    (1) The assigned IRO will utilize legal experts where appropriate 
to make coverage determinations under the plan or coverage.
    (2) The assigned IRO will timely notify a claimant in writing 
whether the request is eligible for external review. This notice will 
include a statement that the claimant may submit in writing to the 
assigned IRO, within ten business days following the date of receipt of 
the notice, additional information. This additional information must be 
considered by the IRO when conducting the external review. The IRO is 
not required to, but may, accept and consider additional information 
submitted after ten business days.
    (3) Within five business days after the date of assignment of the 
IRO, the plan or issuer must provide to the assigned IRO the documents 
and any information considered in making the adverse benefit 
determination or final internal adverse benefit determination. Failure 
by the plan or issuer to timely provide the documents and information 
must not delay the conduct of the external review. If the plan or 
issuer fails to timely provide the documents and information, the 
assigned IRO may terminate the external review and make a decision to 
reverse the adverse benefit determination or final internal adverse 
benefit determination. Within one business day after making the 
decision, the IRO must notify the claimant and the plan.
    (4) Upon receipt of any information submitted by the claimant, the 
assigned IRO must within one business day forward the information to 
the plan or issuer. Upon receipt of any such information, the plan or 
issuer may reconsider its adverse benefit determination or final 
internal adverse benefit determination that is the subject of the 
external review. Reconsideration by the plan or issuer must not delay 
the external review. The external review may be terminated as a result 
of the reconsideration only if the plan decides, upon completion of its 
reconsideration, to reverse its adverse benefit determination or final 
internal adverse benefit determination and provide coverage or payment. 
Within one business day after making such a decision, the plan must 
provide written notice of its decision to the claimant and the assigned 
IRO. The assigned IRO must terminate the external review upon receipt 
of the notice from the plan or issuer.
    (5) The IRO will review all of the information and documents timely 
received. In reaching a decision, the assigned IRO will review the 
claim de novo and not be bound by any decisions or conclusions reached 
during the plan's or issuer's internal claims and appeals process 
applicable under paragraph (b) of this section. In addition to the 
documents and information provided, the assigned IRO, to the extent the 
information or documents are available and the IRO considers them 
appropriate, will consider the following in reaching a decision:
    (i) The claimant's medical records;
    (ii) The attending health care professional's recommendation;
    (iii) Reports from appropriate health care professionals and other 
documents submitted by the plan or issuer, claimant, or the claimant's 
treating provider;
    (iv) The terms of the claimant's plan or coverage to ensure that 
the IRO's decision is not contrary to the terms of the plan or 
coverage, unless the terms are inconsistent with applicable law;
    (v) Appropriate practice guidelines, which must include applicable 
evidence-based standards and may include any other practice guidelines 
developed by the Federal Government, national or professional medical 
societies, boards, and associations;
    (vi) Any applicable clinical review criteria developed and used by 
the plan or issuer, unless the criteria are inconsistent with the terms 
of the plan or coverage or with applicable law; and
    (vii) To the extent the final IRO decision maker is different from 
the IRO's clinical reviewer, the opinion of such clinical reviewer, 
after considering information described in this notice, to the extent 
the information or documents are available and the clinical reviewer or 
reviewers consider such information or documents appropriate.
    (6) The assigned IRO must provide written notice of the final 
external review decision within 45 days after the IRO receives the 
request for the external review. The IRO must deliver the notice of the 
final external review decision to the claimant and the plan or issuer.
    (7) The assigned IRO's written notice of the final external review 
decision must contain the following:
    (i) A general description of the reason for the request for 
external review, including information sufficient to identify the claim 
(including the date or dates of service, the health care provider, the 
claim amount (if applicable), and a statement describing the 
availability, upon request, of the diagnosis code and its corresponding 
meaning, the treatment code and its corresponding meaning, and the 
reason for the plan's or issuer's denial);
    (ii) The date the IRO received the assignment to conduct the 
external review and the date of the IRO decision;
    (iii) References to the evidence or documentation, including the 
specific coverage provisions and evidence-based standards, considered 
in reaching its decision;
    (iv) A discussion of the principal reason or reasons for its 
decision, including the rationale for its decision and any evidence-
based standards that were relied on in making its decision;
    (v) A statement that the IRO's determination is binding except to 
the extent that other remedies may be available under State or Federal 
law to either the group health plan or health insurance issuer or to 
the claimant, or to the extent the health plan or health insurance 
issuer voluntarily makes payment on the claim or otherwise provides 
benefits at any time, including after a final external review decision 
that denies the claim or otherwise fails to require such payment or 
benefits;
    (vi) A statement that judicial review may be available to the 
claimant; and
    (vii) Current contact information, including phone number, for any 
applicable office of health insurance consumer assistance or ombudsman 
established under PHS Act section 2793.
    (viii) After a final external review decision, the IRO must 
maintain records of all claims and notices associated with the external 
review process for six years. An IRO must make such records available 
for examination by the claimant, plan, issuer, or State or Federal 
oversight agency upon request,

[[Page 56099]]

except where such disclosure would violate State or Federal privacy 
laws.
    (iv) Reversal of plan's or issuer's decision. Upon receipt of a 
notice of a final external review decision reversing the adverse 
benefit determination or final adverse benefit determination, the plan 
or issuer immediately must provide coverage or payment (including 
immediately authorizing care or immediately paying benefits) for the 
claim.
    (3) Expedited external review. A group health plan or health 
insurance issuer must comply with the following standards with respect 
to an expedited external review:
    (i) Request for external review. A group health plan or health 
insurance issuer must allow a claimant to make a request for an 
expedited external review with the plan or issuer at the time the 
claimant receives:
    (A) An adverse benefit determination if the adverse benefit 
determination involves a medical condition of the claimant for which 
the timeframe for completion of an expedited internal appeal under 
paragraph (b) of this section would seriously jeopardize the life or 
health of the claimant or would jeopardize the claimant's ability to 
regain maximum function and the claimant has filed a request for an 
expedited internal appeal; or
    (B) A final internal adverse benefit determination, if the claimant 
has a medical condition where the timeframe for completion of a 
standard external review would seriously jeopardize the life or health 
of the claimant or would jeopardize the claimant's ability to regain 
maximum function, or if the final internal adverse benefit 
determination concerns an admission, availability of care, continued 
stay, or health care item or service for which the claimant received 
emergency services, but has not been discharged from the facility.
    (ii) Preliminary review. Immediately upon receipt of the request 
for expedited external review, the plan or issuer must determine 
whether the request meets the reviewability requirements set forth in 
paragraph (d)(2)(ii) of this section for standard external review. The 
plan or issuer must immediately send a notice that meets the 
requirements set forth in paragraph (d)(2)(ii)(B) for standard review 
to the claimant of its eligibility determination.
    (iii) Referral to independent review organization. (A) Upon a 
determination that a request is eligible for expedited external review 
following the preliminary review, the plan or issuer will assign an IRO 
pursuant to the requirements set forth in paragraph (d)(2)(iii) of this 
section for standard review. The plan or issuer must provide or 
transmit all necessary documents and information considered in making 
the adverse benefit determination or final internal adverse benefit 
determination to the assigned IRO electronically or by telephone or 
facsimile or any other available expeditious method.
    (B) The assigned IRO, to the extent the information or documents 
are available and the IRO considers them appropriate, must consider the 
information or documents described above under the procedures for 
standard review. In reaching a decision, the assigned IRO must review 
the claim de novo and is not bound by any decisions or conclusions 
reached during the plan's or issuer's internal claims and appeals 
process.
    (iv) Notice of final external review decision. The plan's or 
issuer's contract with the assigned IRO must require the IRO to provide 
notice of the final external review decision, in accordance with the 
requirements set forth in paragraph (d)(2)(iii)(B) of this section, as 
expeditiously as the claimant's medical condition or circumstances 
require, but in no event more than 72 hours after the IRO receives the 
request for an expedited external review. If the notice is not in 
writing, within 48 hours after the date of providing that notice, the 
assigned IRO must provide written confirmation of the decision to the 
claimant and the plan or issuer.
    (4) Alternative, federally-administered external review process. 
Insured coverage not subject to an applicable State external review 
process under paragraph (c) of this section may elect to use either the 
Federal external review process, as set forth under paragraph (d) of 
this section or the federally-administered external review process, as 
set forth by HHS in guidance. In such circumstances, the requirement to 
provide external review under this paragraph (d) is satisfied.
    (e) Form and manner of notice--(1) In general. For purposes of this 
section, a group health plan and a health insurance issuer offering 
group health insurance coverage are considered to provide relevant 
notices in a culturally and linguistically appropriate manner if the 
plan or issuer meets all the requirements of paragraph (e)(2) of this 
section with respect to the applicable non-English languages described 
in paragraph (e)(3) of this section.
    (2) Requirements. (i) The plan or issuer must provide oral language 
services (such as a telephone customer assistance hotline) that 
includes answering questions in any applicable non-English language and 
providing assistance with filing claims and appeals (including external 
review) in any applicable non-English language;
    (ii) The plan or issuer must provide, upon request, a notice in any 
applicable non-English language; and
    (iii) The plan or issuer must include in the English versions of 
all notices, a statement prominently displayed in any applicable non-
English language clearly indicating how to access the language services 
provided by the plan or issuer.
    (3) Applicable non-English language. With respect to an address in 
any United States county to which a notice is sent, a non-English 
language is an applicable non-English language if ten percent or more 
of the population residing in the county is literate only in the same 
non-English language, as determined in guidance published by the 
Secretary.
    (f) Secretarial authority. The Secretary may determine that the 
external review process of a group health plan or health insurance 
issuer, in operation as of March 23, 2010, is considered in compliance 
with the applicable process established under paragraph (c) or (d) of 
this section if it substantially meets the requirements of paragraph 
(c) or (d) of this section, as applicable.
    (g) Applicability date. The provisions of this section generally 
are applicable to group health plans and health insurance issuers for 
plan years beginning on or after January 1, 2017. The external review 
scope provision at paragraph (d)(1)(i)(B) of this section is applicable 
for plan years beginning on or after January 1, 2022. The external 
review provisions described in paragraphs (c) and (d) of this section 
are applicable to grandfathered health plans, with respect to the types 
of claims specified under paragraph (a)(1)(ii) of this section, for 
plan years beginning on or after January 1, 2022.

0
5. Section 54.9816-1T is revised to read as follows:


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

    (a) Basis. This section and Sec. Sec.  54.9816-2T through 54.9816-
8T, 54.9817-1T, 54.9817-2T, and 54.9822-1T implement subchapter B of 
chapter 100 of the Internal Revenue Code of 1986.
    (b) Scope. This part establishes standards for group health plans 
with respect to surprise medical bills, transparency in health care 
coverage, and additional patient protections. This part also 
establishes an independent dispute resolution process and standards for 
certifying independent dispute resolution entities.

[[Page 56100]]


0
6. Section 54.9816-2T is amended by revising paragraph (a) and 
paragraph (b) introductory text to read as follows:


Sec.  54.9816-2T  Applicability (temporary).

    (a) In general. (1) The requirements in Sec. Sec.  54.9816-4T 
through 54.9816-7T, 54.9817-1T, and 54.9822-1T apply to group health 
plans (including grandfathered health plans as defined in Sec.  
54.9815-1251), except as specified in paragraph (b) of this section.
    (2) The requirements in Sec. Sec.  54.9816-8T and 54.9817-2T apply 
to certified IDR entities and group health plans (including 
grandfathered health plans as defined in Sec.  54.9815-1251) except as 
specified in paragraph (b) of this section.
    (b) Exceptions. The requirements in Sec. Sec.  54.9816-4T through 
54.9816-8T, 54.9817-1T, 54.9817-2T, and 54.9822-1T do not apply to the 
following:
* * * * *

0
7. Section 54.9816-8T is added to read as follows:


Sec.  54.9816-8T  Independent dispute resolution process (temporary).

    (a) Scope and definitions--(1) Scope. This section sets forth 
requirements with respect to the independent dispute resolution (IDR) 
process (referred to in this section as the Federal IDR process) under 
which a nonparticipating provider, nonparticipating emergency facility, 
or nonparticipating provider of air ambulance services (as applicable); 
and a group health plan complete a requisite open negotiation period, 
and at least one party submits a notification under paragraph (b) of 
this section to initiate the Federal IDR process under paragraph (c) of 
this section, and under which an IDR entity (as certified under 
paragraph (e) of this section) determines the amount of payment under 
the plan for an item or service furnished by the provider or facility.
    (2) Definitions. Unless otherwise stated, the definitions in Sec.  
54.9816-3T apply to this section. Additionally, for purposes of this 
section, the following definitions apply:
    (i) Batched items and services means multiple qualified IDR items 
or services that are considered jointly as part of one payment 
determination by a certified IDR entity for purposes of the Federal IDR 
process. In order for a qualified IDR item or service to be included in 
a batched item or service, the qualified IDR item or service must meet 
the criteria set forth in paragraph (c)(3) of this section.
    (ii) Breach means the acquisition, access, use, or disclosure of 
individually identifiable health information (IIHI) in a manner not 
permitted under paragraph (e)(2)(v) of this section that compromises 
the security or privacy of the IIHI.
    (A) Breach excludes:
    (1) Any unintentional acquisition, access, or use of IIHI by 
personnel, a contractor, or a subcontractor of a certified IDR entity 
that is acting under the authority of that certified IDR entity, if the 
acquisition, access, or use was made in good faith and within the scope 
of that authority and that does not result in further use or disclosure 
in a manner not permitted under paragraph (e)(2)(v) of this section.
    (2) Any inadvertent disclosure by a person who is authorized to 
access IIHI at a certified IDR entity to another person authorized to 
access IIHI at the same certified IDR entity, and the information 
received as a result of the disclosure is not further used or disclosed 
in a manner not permitted under paragraph (e)(2)(v) of this section.
    (3) A disclosure of IIHI in which a certified IDR entity has a good 
faith belief that an unauthorized person to whom the disclosure was 
made would not reasonably have been able to retain such information.
    (B) Except as provided in paragraph (a)(2)(ii)(A) of this section, 
access, use, or disclosure of IIHI in a manner not permitted under 
paragraph (e)(2)(v) of this section is presumed to be a breach unless 
the certified IDR entity demonstrates that there is a low probability 
that the security or privacy of the IIHI has been compromised based on 
a risk assessment encompassing at least the following factors:
    (1) The nature and extent of the IIHI involved, including the types 
of identifiers and the likelihood of re-identification;
    (2) The unauthorized person who used the IIHI or to whom the 
disclosure was made;
    (3) Whether the IIHI was actually acquired or viewed; and
    (4) The extent to which the risk to the IIHI has been mitigated.
    (iii) Certified IDR entity means an entity responsible for 
conducting determinations under paragraph (c) of this section that 
meets the certification criteria specified in paragraph (e) of this 
section and that has been certified by the Secretary, jointly with the 
Secretaries of Health and Human Services and Labor.
    (iv) Conflict of interest means, with respect to a party to a 
payment determination or certified IDR entity, a material relationship, 
status, or condition of the party or certified IDR entity that impacts 
the ability of the certified IDR entity to make an unbiased and 
impartial payment determination. For purposes of this section, a 
conflict of interest exists when a certified IDR entity is:
    (A) A group health plan; a health insurance issuer offering group 
health insurance coverage, individual health insurance coverage, or 
short-term, limited-duration insurance; a carrier offering a health 
benefits plan under 5 U.S.C. 8902; or a provider, a facility or a 
provider of air ambulance services;
    (B) An affiliate or a subsidiary of a group health plan; a health 
insurance issuer offering group health insurance coverage, individual 
health insurance coverage, or short-term, limited-duration insurance; a 
carrier offering a health benefits plan under 5 U.S.C. 8902; or a 
provider, a facility, or a provider of air ambulance services;
    (C) An affiliate or subsidiary of a professional or trade 
association representing group health plans; health insurance issuers 
offering group health insurance coverage, individual health insurance 
coverage, or short-term, limited-duration insurance; carriers offering 
a health benefits plan under 5 U.S.C. 8902; or providers, facilities, 
or providers of air ambulance services.
    (D) A certified IDR entity that has, or that has any personnel, 
contractors, or subcontractors assigned to a determination who have, a 
material familial, financial, or professional relationship with a party 
to the payment determination being disputed, or with any officer, 
director, or management employee of the plan, issuer, or carrier 
offering a health benefits plan under 5 U.S.C. 8902; the plan 
administrator, plan fiduciaries, or plan, issuer, or carrier employees; 
the health care provider, the health care provider's group or practice 
association; the provider of air ambulance services, the provider of 
air ambulance services' group or practice association, or the facility 
that is a party to the dispute.
    (v) Credible information means information that upon critical 
analysis is worthy of belief and is trustworthy.
    (vi) IDR entity means an entity that may apply or has applied for 
certification to conduct determinations under paragraph (c) of this 
section, and that currently is not certified by the Secretary, jointly 
with the Secretaries of Health and Human Services and Labor, pursuant 
to paragraph (e) of this section.
    (vii) Individually identifiable health information (IIHI) means any 
information, including demographic data, that relates to the past, 
present, or future physical or mental health or condition of an 
individual; the provision of health care to an individual; or the past, 
present, or

[[Page 56101]]

future payment for the provision of health care to an individual; and
    (A) That identifies the individual; or
    (B) With respect to which there is a reasonable basis to believe 
the information can be used to identify the individual.
    (viii) Material difference means a substantial likelihood that a 
reasonable person with the training and qualifications of a certified 
IDR entity making a payment determination would consider the submitted 
information significant in determining the out of network rate and 
would view the information as showing that the qualifying payment 
amount is not the appropriate out-of-network rate.
    (ix) Material familial relationship means any relationship as a 
spouse, domestic partner, child, parent, sibling, spouse's or domestic 
partner's parent, spouse's or domestic partner's sibling, spouse's or 
domestic partner's child, child's parent, child's spouse or domestic 
partner, or sibling's spouse or domestic partner.
    (x) Material financial relationship means any financial interest of 
more than five percent of total annual revenue or total annual income 
of a certified IDR entity, or an officer, director, or manager thereof, 
or of a reviewer or reviewing physician employed or engaged by a 
certified IDR entity to conduct or participate in any review in the 
Federal IDR process. The terms annual revenue and annual income do not 
include mediation fees received by mediators who are also arbitrators, 
provided that the mediator acts in the capacity of a mediator and does 
not represent a party in the mediation.
    (xi) Material professional relationship means any physician-patient 
relationship, any partnership or employment relationship, any 
shareholder or similar ownership interest in a professional 
corporation, partnership, or other similar entity; or any independent 
contractor arrangement that constitutes a material financial 
relationship with any expert used by the certified IDR entity or any 
officer or director of the certified IDR entity.
    (xii) Qualified IDR item or service means an item or service:
    (A) That is an emergency service furnished by a nonparticipating 
provider or nonparticipating facility subject to the protections of 
Sec.  54.9816-4T, 29 CFR 2590.716-4, or 45 CFR 149.110, as applicable, 
for which the conditions of 45 CFR 149.410(b) are not met, or an item 
or service furnished by a nonparticipating provider at a participating 
health care facility, subject to the requirements of Sec.  54.9816-5T, 
29 CFR 2590.716-5, or 45 CFR 149.120, as applicable, for which the 
conditions of 45 CFR 149.420(c) through (i) are not met, or air 
ambulance services furnished by a nonparticipating provider of air 
ambulance services subject to the protections of Sec.  54.9817-1T, 29 
CFR 2590.717-1, or 45 CFR 149.130, as applicable, and for which the 
out-of-network rate is not determined by reference to an All-Payer 
Model Agreement under section 1115A of the Social Security Act or a 
specified State law as defined in Sec.  54.9816-3T;
    (B) With respect to which a provider or facility (as applicable) or 
group health plan submits a notification under paragraph (b)(2) of this 
section;
    (C) That is not an item or service that is the subject of an open 
negotiation under paragraph (b)(1) of this section; and
    (D) That is not an item or service for which a notification under 
paragraph (b)(2) of this section is submitted during the 90-calendar-
day period under paragraph (c)(4)(vi)(B) of this section, but that may 
include such an item or service if the notification is submitted during 
the subsequent 30-business-day period under paragraph (c)(4)(vi)(C) of 
this section.
    (xiii) Unsecured IIHI means IIHI that is not rendered unusable, 
unreadable, or indecipherable to unauthorized persons through the use 
of a technology or methodology specified by the Secretary, jointly with 
the Secretary of Health and Human Services and the Secretary of Labor.
    (b) Determination of payment amount through open negotiation and 
initiation of the Federal IDR process--(1) Determination of payment 
amount through open negotiation--(i) In general. With respect to an 
item or service that meets the requirements of paragraph (a)(2)(xii)(A) 
of this section, the provider, facility, or provider of air ambulance 
services or the group health plan may, during the 30-business-day 
period beginning on the day the provider, facility, or provider of air 
ambulance services receives an initial payment or notice of denial of 
payment regarding the item or service, initiate an open negotiation 
period for purposes of determining the out-of-network rate for such 
item or service. To initiate the open negotiation period, a party must 
send a notice to the other party (open negotiation notice) in 
accordance with paragraph (b)(1)(ii) of this section.
    (ii) Open negotiation notice--(A) Content. The open negotiation 
notice must include information sufficient to identify the item(s) and 
service(s) (including the date(s) the item(s) or service(s) were 
furnished, the service code, and initial payment amount, if 
applicable), an offer of an out-of-network rate, and contact 
information for the party sending the open negotiation notice.
    (B) Manner. The open negotiation notice must be provided, using the 
standard form developed by the Secretary, in writing within 30 business 
days beginning on the day the provider, facility, or provider of air 
ambulance services receives an initial payment or a notice of denial of 
payment from the plan regarding the item or service. The day on which 
the open negotiation notice is first sent by a party is the date the 
30-business-day open negotiation period begins. This notice may be 
provided to the other party electronically (such as by email) if the 
following two conditions are satisfied:
    (1) The party sending the open negotiation notice has a good faith 
belief that the electronic method is readily accessible by the other 
party; and
    (2) The notice is provided in paper form free of charge upon 
request.
    (2) Initiating the Federal IDR process--(i) In general. With 
respect to an item or service for which the parties do not agree upon 
an out-of-network rate by the last day of the open negotiation period 
under paragraph (b)(1) of this section, either party may initiate the 
Federal IDR process. To initiate the Federal IDR process, a party must 
submit a written notice of IDR initiation to the other party and to the 
Secretary, using the standard form developed by the Secretary, during 
the 4-business-day period beginning on the 31st business day after the 
start of the open negotiation period.
    (ii) Exception for items and services provided by certain 
nonparticipating providers and facilities. A party may not initiate the 
Federal IDR process with respect to an item or service if, with respect 
to that item or service, the party knows (or reasonably should have 
known) that the provider or facility provided notice and received 
consent under 45 CFR 149.410(b) or 149.420(c) through (i).
    (iii) Notice of IDR initiation--(A) Content. The notice of IDR 
initiation must include:
    (1) Information sufficient to identify the qualified IDR items or 
services under dispute (and whether the qualified IDR items or services 
are designated as batched items and services as described in paragraph 
(c)(3) of this section), including the date(s) and location the item or 
service was furnished, the type of item or service (such as whether the 
qualified IDR item or service is an emergency service as defined in 
Sec.  54.9816-4T(c)(2)(i), 29 CFR

[[Page 56102]]

2590.716-4(c)(2)(i), or 45 CFR 149.110(c)(2)(i), as applicable, an 
emergency service as defined in Sec.  54.9816-4T(c)(2)(ii), 29 CFR 
2590.716-4(c)(2)(ii), or 45 CFR 149.110(c)(2)(ii), as applicable, or a 
nonemergency service; and whether any service is a professional service 
or facility-based service), corresponding service codes, place of 
service code, the amount of cost sharing allowed, and the amount of the 
initial payment made for the qualified IDR item or service, if 
applicable;
    (2) Names of the parties involved and contact information, 
including name, email address, phone number, and mailing address;
    (3) State where the qualified IDR item or service was furnished;
    (4) Commencement date of the open negotiation period under 
paragraph (b)(1) of this section;
    (5) Preferred certified IDR entity;
    (6) An attestation that the items and services under dispute are 
qualified IDR items or services;
    (7) Qualifying payment amount;
    (8) Information about the qualifying payment amount as described in 
Sec.  54.9816-6T(d); and
    (9) General information describing the Federal IDR process as 
specified by the Secretary.
    (B) Manner. The initiating party must provide written notice of IDR 
initiation to the other party. The initiating party may satisfy this 
requirement by furnishing the notice of IDR initiation to the other 
party electronically (such as by email) if the following two conditions 
are satisfied--
    (1) The initiating party has a good faith belief that the 
electronic method is readily accessible by the other party; and
    (2) The notice is provided in paper form free of charge upon 
request.
    (C) Notice to the Secretary. The initiating party must also furnish 
the notice of IDR initiation to the Secretary by submitting the notice 
through the Federal IDR portal. The initiation date of the Federal IDR 
process will be the date of receipt by the Secretary.
    (c) Federal IDR process following initiation--(1) Selection of 
certified IDR entity--(i) In general. The plan or the provider, 
facility, or provider of air ambulance services receiving the notice of 
IDR initiation under paragraph (b)(2) of this section may agree or 
object to the preferred certified IDR entity identified in the notice 
of IDR initiation. If the party in receipt of the notice of IDR 
initiation fails to object within 3 business days, the preferred 
certified IDR entity identified in the notice of IDR initiation will be 
selected and will be treated as jointly agreed to by the parties, 
provided that the certified IDR entity does not have a conflict of 
interest. If the party in receipt of the notice of IDR initiation 
objects, that party must notify the initiating party of the objection 
and propose an alternative certified IDR entity. The initiating party 
must then agree or object to the alternative certified IDR entity; if 
the initiating party fails to agree or object to the alternative 
certified IDR entity, the alternative certified IDR entity will be 
selected and will be treated as jointly agreed to by the parties. In 
order to select a preferred certified IDR entity, the plan and the 
provider, facility, or provider of air ambulance services, must jointly 
agree on a certified IDR entity not later than 3 business days after 
the initiation date of the Federal IDR process. If the plan and the 
provider, facility, or provider of air ambulance services fail to agree 
upon a certified IDR entity within that time, the Secretary shall 
select a certified IDR entity in accordance with paragraph (c)(1)(iv) 
of this section.
    (ii) Requirements for selected certified IDR entity. The certified 
IDR entity selected must be an IDR entity certified under paragraph (e) 
of this section, that:
    (A) Does not have a conflict of interest as defined in paragraph 
(a)(2) of this section;
    (B) Ensures that assignment of personnel to a payment determination 
and decisions regarding hiring, compensation, termination, promotion, 
or other similar matters related to personnel assigned to the dispute 
are not made based upon the likelihood that the assigned personnel will 
support a particular party to the determination being disputed other 
than as outlined under paragraph (c)(4)(iii) of this section; and
    (C) Ensures that any personnel assigned to a payment determination 
do not have any conflicts of interests as defined in paragraph (a)(2) 
of this section regarding any party to the dispute within the 1 year 
immediately preceding an assignment of dispute determination, similar 
to the requirements laid out in 18 U.S.C. 207(b).
    (iii) Notice of certified IDR entity selection. Upon the selection 
of a certified IDR entity, in accordance with paragraph (c)(1)(i) of 
this section, the plan or the provider or emergency facility that 
submitted the notice of IDR initiation under paragraph (b)(2) of this 
section must notify the Secretary of the selection as soon as 
reasonably practicable, but no later than 1 business day after such 
selection, through the Federal IDR portal. In addition, if the non-
initiating party believes that the Federal IDR process is not 
applicable, the non-initiating party must also provide information 
regarding the Federal IDR process's inapplicability through the Federal 
IDR portal by the same date that the notice of certified IDR entity 
selection must be submitted.
    (A) Content. If the parties have agreed on the selection of a 
certified IDR entity or the party in receipt of the notice of IDR 
initiation has not objected to the other party's selection, the notice 
of the certified IDR entity selection must include the following 
information:
    (1) Name of the certified IDR entity;
    (2) The certified IDR entity number; and
    (3) Attestation by both parties, or by the initiating party if the 
non-initiating party fails to object to the selection of the certified 
IDR entity, that the selected certified IDR entity meets the 
requirements of paragraph (c)(1)(ii) of this section.
    (B) [Reserved]
    (iv) Failure to select a certified IDR entity. If the plan and the 
provider, facility, or provider of air ambulance services fail to 
select a certified IDR entity in accordance with paragraph (c)(1)(i) of 
this section, the initiating party must notify the Secretary of the 
failure no later than 1 business day after the date of such failure (or 
in other words, 4 business days after initiation of the Federal IDR 
process) by electronically submitting the notice as described in 
paragraph (c)(1)(iii) of this section but indicating that the parties 
have failed to select a certified IDR entity. In addition, if the non-
initiating party believes that the Federal IDR process is not 
applicable, the non-initiating party must also provide information 
regarding the Federal IDR process's inapplicability through the Federal 
IDR portal by the same date that the notice of failure to select must 
be submitted. Upon notification of the failure of the parties to select 
a certified IDR entity, the Secretary will select a certified IDR 
entity that charges a fee within the allowed range of certified IDR 
entity fees through a random selection method not later than 6 business 
days after the date of initiation of the Federal IDR process and will 
notify the plan and the provider or facility of the selection. If there 
are insufficient certified IDR entities that charge a fee within the 
allowed range of certified IDR entity fees available to arbitrate the 
dispute, the Secretary, jointly with the Secretary of Health and Human 
Services and Secretary of Labor, will select a certified IDR entity 
that has received approval, as described in paragraph (e)(2)(vi)(B) of 
this section, to

[[Page 56103]]

charge a fee outside of the allowed range of certified IDR entity fees.
    (v) Review by certified IDR entity. After selection by the parties 
(including when the initiating party selects a certified IDR entity and 
the other party does not object), or by the Secretary under paragraph 
(c)(1)(iv) of this section, the certified IDR entity must review the 
selection and attest that it meets the requirements of paragraph 
(c)(1)(ii) of this section. If the certified IDR entity is unable to 
attest that it meets the requirements of paragraph (c)(1)(ii) within 3 
business days of selection, the parties, upon notification, must select 
another certified IDR entity under paragraph (c)(1) of this section, 
treating the date of notification of the failure to attest to the 
requirements of (c)(1)(ii) of this section as the date of initiation of 
the Federal IDR process for purposes of the time periods in paragraphs 
(c)(1)(i) and (iv) of this section. Additionally, the certified IDR 
entity selected must review the information submitted in the notice of 
IDR initiation to determine whether the Federal IDR process applies. If 
the Federal IDR process does not apply, the certified IDR entity must 
notify the Secretary and the parties within 3 business days of making 
that determination.
    (2) Authority to continue negotiations--(i) In general. If the 
parties to the Federal IDR process agree on an out-of-network rate for 
a qualified IDR item or service after providing the notice of IDR 
initiation to the Secretary consistent with paragraph (b)(2) of this 
section, but before the certified IDR entity has made its payment 
determination, the amount agreed to by the parties for the qualified 
IDR item or service will be treated as the out-of-network rate for the 
qualified IDR item or service. To the extent the amount exceeds the 
initial payment amount (or initial denial of payment) and any cost 
sharing paid or required to be paid by the participant or beneficiary, 
payment must be made directly by the plan to the nonparticipating 
provider, facility, or nonparticipating provider of air ambulance 
services not later than 30 business days after the agreement is 
reached. In no instance may either party seek additional payment from 
the participant or beneficiary, including in instances in which the 
out-of-network rate exceeds the qualifying payment amount. The 
initiating party must send a notification to the Secretary and to the 
certified IDR entity (if selected) electronically through the Federal 
IDR portal, as soon as possible, but no later than 3 business days 
after the date of the agreement. The notification must include the out-
of-network rate for the qualified IDR item or service and signatures 
from authorized signatories for both parties.
    (ii) Method of allocation of the certified IDR entity fee. In the 
case of an agreement described in paragraph (c)(2)(i) of this section, 
the certified IDR entity is required to return half of each parties' 
certified IDR entity fee, unless directed otherwise by both parties. 
The administrative fee under paragraph (d)(2) of this section will not 
be returned to the parties.
    (3) Treatment of batched items and services--(i) In general. 
Batched items and services may be submitted and considered jointly as 
part of one payment determination by a certified IDR entity only if the 
batched items and services meet the requirements of this paragraph 
(c)(3). Batched items and services submitted and considered jointly as 
part of one payment determination under this paragraph (c)(3)(i) are 
treated as a batched determination and subject to the fee for batched 
determinations under this section.
    (A) The qualified IDR items and services are billed by the same 
provider or group of providers, the same facility, or the same provider 
of air ambulance services. Items and services are billed by the same 
provider or group of providers, the same facility, or the same provider 
of air ambulance services if the items or services are billed with the 
same National Provider Identifier or Tax Identification Number;
    (B) Payment for the qualified IDR items and services would be made 
by the same plan;
    (C) The qualified IDR items and services are the same or similar 
items and services. The qualified IDR items and services are considered 
to be the same or similar items or services if each is billed under the 
same service code, or a comparable code under a different procedural 
code system, such as Current Procedural Terminology (CPT) codes with 
modifiers, if applicable, Healthcare Common Procedure Coding System 
(HCPCS) with modifiers, if applicable, or Diagnosis-Related Group (DRG) 
codes with modifiers, if applicable; and
    (D) All the qualified IDR items and services were furnished within 
the same 30-business-day period, or the same 90-calendar-day period 
under paragraph (c)(4)(vi)(B) of this section, as applicable.
    (ii) Treatment of bundled payment arrangements. In the case of 
qualified IDR items and services billed by a provider, facility, or 
provider of air ambulance services as part of a bundled payment 
arrangement, or where a plan makes or denies an initial payment as a 
bundled payment, the qualified IDR items and services may be submitted 
as part of one payment determination. Bundled payment arrangements 
submitted under this paragraph (c)(3)(ii) are subject to the rules for 
batched determinations set forth in paragraph (c)(3)(i) of this section 
and the certified IDR entity fee for single determinations as set forth 
in paragraph (e)(2)(vii) of this section.
    (4) Payment determination for a qualified IDR item or service--(i) 
Submission of offers. Not later than 10 business days after the 
selection of the certified IDR entity, the plan and the provider, 
facility, or provider of air ambulance services:
    (A) Must each submit to the certified IDR entity:
    (1) An offer of an out-of-network rate expressed as both a dollar 
amount and the corresponding percentage of the qualifying payment 
amount represented by that dollar amount;
    (2) Information requested by the certified IDR entity relating to 
the offer.
    (3) The following additional information, as applicable--
    (i) For providers and facilities, information on the size of the 
provider's practice or of the facility (if applicable). Specifically, a 
group of providers must specify whether the providers' practice has 
fewer than 20 employees, 20 to 50 employees, 51 to 100 employees, 101 
to 500 employees, or more than 500 employees. For facilities, the 
facility must specify whether the facility has 50 or fewer employees, 
51 to 100 employees, 101 to 500 employees, or more than 500 employees;
    (ii) For providers and facilities, information on the practice 
specialty or type, respectively (if applicable);
    (iii) For plans, information on the coverage area of the plan, the 
relevant geographic region for purposes of the qualifying payment 
amount, whether the coverage is fully-insured or partially or fully 
self-insured; and
    (iv) The qualifying payment amount for the applicable year for the 
same or similar item or service as the qualified IDR item or service.
    (B) May each submit to the certified IDR entity any information 
relating to the offer that was submitted by either party, except that 
the information may not include information on factors described in 
paragraph (c)(4)(v) of this section.
    (ii) Payment determination and notification. Not later than 30 
business days after the selection of the certified IDR entity, the 
certified IDR entity must:
    (A) Select as the out-of-network rate for the qualified IDR item or 
service one

[[Page 56104]]

of the offers submitted under paragraph (c)(4)(i) of this section, 
taking into account the considerations specified in paragraph 
(c)(4)(iii) of this section (as applied to the information provided by 
the parties pursuant to paragraph (c)(4)(i) of this section). The 
certified IDR entity must select the offer closest to the qualifying 
payment amount unless the certified IDR entity determines that credible 
information submitted by either party under paragraph (c)(4)(i) clearly 
demonstrates that the qualifying payment amount is materially different 
from the appropriate out-of-network rate, or if the offers are equally 
distant from the qualifying payment amount but in opposing directions. 
In these cases, the certified IDR entity must select the offer as the 
out-of-network rate that the certified IDR entity determines best 
represents the value of the qualified IDR item or services, which could 
be either offer.
    (B) Notify the plan and the provider or facility, as applicable, of 
the selection of the offer under paragraph (c)(4)(ii)(A) of this 
section, and provide the written decision required under (c)(4)(vi) of 
this section.
    (iii) Considerations in determination. In determining which offer 
to select, the certified IDR entity must consider:
    (A) The qualifying payment amount(s) for the applicable year for 
the same or similar item or service.
    (B) Information requested by the certified IDR entity under 
paragraph (c)(4)(i)(A)(2) of this section relating to the offer, to the 
extent a party provides credible information.
    (C) Additional information submitted by a party, provided the 
information is credible and relates to the circumstances described in 
paragraphs (c)(4)(iii)(C)(1) through (5) of this section, with respect 
to a qualified IDR item or service of a nonparticipating provider, 
facility, or group health plan that is the subject of a payment 
determination. This information must also clearly demonstrate that the 
qualifying payment amount is materially different from the appropriate 
out-of-network rate.
    (1) The level of training, experience, and quality and outcomes 
measurements of the provider or facility that furnished the qualified 
IDR item or service (such as those endorsed by the consensus-based 
entity authorized in section 1890 of the Social Security Act).
    (2) The market share held by the provider or facility or that of 
the plan in the geographic region in which the qualified IDR item or 
service was provided.
    (3) The acuity of the participant, or beneficiary, receiving the 
qualified IDR item or service, or the complexity of furnishing the 
qualified IDR item or service to the participant or beneficiary.
    (4) The teaching status, case mix, and scope of services of the 
facility that furnished the qualified IDR item or service, if 
applicable.
    (5) Demonstration of good faith efforts (or lack thereof) made by 
the provider or facility or the plan to enter into network agreements 
with each other, and, if applicable, contracted rates between the 
provider or facility, as applicable, and the plan during the previous 4 
plan years.
    (D) Additional information submitted by a party, provided the 
information is credible and relates to the offer submitted by either 
party and does not include information on factors described in 
paragraph (c)(4)(v) of this section.
    (iv) Examples. The rules of paragraph (c)(4)(iii) of this section 
are illustrated by the following examples:
    (A) Example 1--(1) Facts. A nonparticipating provider and a group 
health plan are parties to a payment determination in the Federal IDR 
process. The nonparticipating provider submits an offer and additional 
written information asserting that the provider has made good faith 
efforts to enter into network agreements with the plan. The 
nonparticipating provider fails to provide any documentation of these 
efforts, such as correspondence or records of conversations with 
representatives of the plan.
    (2) Conclusion. In this Example 1, the nonparticipating provider 
has submitted additional information. However, this information is not 
credible, as the nonparticipating provider has failed to provide any 
documentation in support of the provider's assertions of good faith 
efforts to enter into network agreements with the plan. Therefore, the 
certified IDR entity cannot consider the information.
    (B) Example 2--(1) Facts. A nonparticipating provider and a group 
health plan are parties to a payment determination in the Federal IDR 
process. The nonparticipating provider submits credible information 
relating to the provider's level of training, experience, and quality 
and outcome measurements from 2019. The provider also submits credible 
information that clearly demonstrates that the provider's level of 
training and expertise was necessary for providing the service that is 
the subject of the payment determination to the particular patient. 
Further, the provider submits credible information that clearly 
demonstrates that the qualifying payment amount generally presumes the 
service would be delivered by a provider with a lower level of 
training, experience, and quality and outcome measurements. This 
information, taken together, demonstrates that the qualifying payment 
amount is not an appropriate payment amount, and the provider submits 
an offer that is higher than the qualifying payment amount and 
commensurate with the provider's level of training, experience, and 
quality and outcome measurements with respect to the service provided. 
The plan submits the qualifying payment amount as its offer with no 
additional information.
    (2) Conclusion. In this Example 2, the nonparticipating provider 
has submitted information that is credible. Moreover, the credible 
information clearly demonstrates that the qualifying payment amount 
does not adequately take into account the provider's level of training, 
experience, and quality and outcome measurements with respect to the 
service provided, and that the appropriate out-of-network rate should 
therefore be higher than the qualifying payment amount. Accordingly, 
the certified IDR entity must select the provider's offer, as that 
offer best represents the value of the service that is the subject of 
the payment determination.
    (C) Example 3--(1) Facts. A nonparticipating provider and a group 
health plan are parties to a payment determination in the Federal IDR 
process. The nonparticipating provider submits credible information to 
the certified IDR entity relating to the acuity of the patient that 
received the service, and the complexity of furnishing the service to 
the patient, by providing details of the service at issue and the 
training required to furnish the complex service. The provider contends 
that this information demonstrates that the qualifying payment amount 
is not an appropriate payment amount, and the provider submits an offer 
that is higher than the qualifying payment amount and equal to what the 
provider believes is commensurate with the acuity of the patient and 
the complexity of the service that is the subject of the payment 
determination. However, the evidence submitted by the provider does not 
clearly demonstrate that the qualifying payment amount fails to 
encompass the acuity and complexity of the service. The plan submits 
the qualifying payment amount as its offer, along with credible 
information that demonstrates how the qualifying payment amount was 
calculated for this particular service, taking into consideration the 
acuity of the patient and the complexity of the service.

[[Page 56105]]

    (2) Conclusion. The information submitted by the provider to the 
certified IDR entity is credible with respect to the acuity of the 
patient and complexity of the service. However, in this example, the 
provider has not clearly demonstrated that the qualifying payment 
amount is materially different from the appropriate out-of-network 
rate, based on the acuity of the patient and the complexity of the 
service that is the subject of the payment determination. Accordingly, 
the certified IDR entity must select the offer closest to the 
qualifying payment amount, which is the plan's offer.
    (D) Example 4--(1) Facts. A nonparticipating provider and a group 
health plan are parties to a payment determination in the Federal IDR 
process. The plan submits credible information demonstrating that the 
patent for the item that is the subject of the payment determination 
has expired, including written documentation that demonstrates how much 
the cost of the item was at the time the provider rendered service and 
how the qualifying payment amount exceeds that cost. The plan submits 
an offer that is lower than the qualifying payment amount and 
commensurate with the cost of the item at the time service was 
rendered. The nonparticipating provider submits the qualifying payment 
amount as its offer and also submits credible information demonstrating 
the provider's level of training, experience, and quality and outcome 
measurements from 2019, but the provider does not explain how this 
additional information is relevant to the cost of the item.
    (2) Conclusion. In this Example 4, both the nonparticipating 
provider and plan submitted information that is credible and that may 
be considered by the certified IDR entity. However, only the plan 
provided credible information that was relevant to the service that is 
the subject of the payment determination. Moreover, the plan has 
clearly demonstrated that the qualifying payment amount does not 
adequately take into account the complexity of the item furnished--in 
this case that the item is no longer patent protected. While the 
provider submitted credible information, the provider failed to show 
how the information was relevant to the item that is the subject of the 
payment determination. Accordingly, the certified IDR entity must 
select the offer that best represents the value of the item, which is 
the plan's offer in this example.
    (v) Prohibition on consideration of certain factors. In determining 
which offer to select, the certified IDR entity must not consider:
    (A) Usual and customary charges (including payment or reimbursement 
rates expressed as a proportion of usual and customary charges);
    (B) The amount that would have been billed by the provider or 
facility with respect to the qualified IDR item or service had the 
provisions of 45 CFR 149.410 and 149.420 (as applicable) not applied; 
or
    (C) The payment or reimbursement rate for items and services 
furnished by the provider or facility payable by a public payor, 
including under the Medicare program under title XVIII of the Social 
Security Act; the Medicaid program under title XIX of the Social 
Security Act; the Children's Health Insurance Program under title XXI 
of the Social Security Act; the TRICARE program under chapter 55 of 
title 10, United States Code; chapter 17 of title 38, United States 
Code; or demonstration projects under section 1115 of the Social 
Security Act.
    (vi) Written decision. (A) The certified IDR entity must explain 
its determination in a written decision submitted to the parties and 
the Secretary, in a form and manner specified by the Secretary;
    (B) If the certified IDR entity does not choose the offer closest 
to the qualifying payment amount, the certified IDR entity's written 
decision must include an explanation of the credible information that 
the certified IDR entity determined demonstrated that the qualifying 
payment amount was materially different from the appropriate out-of-
network rate, based on the considerations allowed under paragraphs 
(c)(4)(iii)(B) through (D) of this section, with respect to the 
qualified IDR item or service.
    (vii) Effects of determination--(A) Binding. A determination made 
by a certified IDR entity under paragraph (c)(4)(ii) of this section:
    (1) Is binding upon the parties, in the absence of fraud or 
evidence of intentional misrepresentation of material facts presented 
to the certified IDR entity regarding the claim; and
    (2) Is not subject to judicial review, except in a case described 
in any of paragraphs (1) through (4) of section 10(a) of title 9, 
United States Code.
    (B) Suspension of certain subsequent IDR requests. In the case of a 
determination made by a certified IDR entity under paragraph (c)(4)(ii) 
of this section, the party that submitted the initial notification 
under paragraph (b)(2) of this section may not submit a subsequent 
notification involving the same other party with respect to a claim for 
the same or similar item or service that was the subject of the initial 
notification during the 90-calendar-day period following the 
determination.
    (C) Subsequent submission of requests permitted. If the end of the 
open negotiation period specified in paragraph (b)(1) of this section 
occurs during the 90-calendar-day suspension period regarding claims 
for the same or similar item or service that were the subject of the 
initial notice of IDR determination as described in paragraph 
(c)(4)(vi) of this section, either party may initiate the Federal IDR 
process for those claims by submitting a notification as specified in 
paragraph (b)(2) of this section during the 30-business-day period 
beginning on the day after the last day of the 90-calendar-day 
suspension period.
    (viii) Recordkeeping requirements. The certified IDR entity must 
maintain records of all claims and notices associated with the Federal 
IDR process with respect to any determination for 6 years. The 
certified IDR entity must make these records available for examination 
by the plan, provider, facility, provider of air ambulance services, or 
a State or Federal oversight agency upon request, except to the extent 
the disclosure would violate either State or Federal privacy law.
    (ix) Payment. If applicable, the amount of the offer selected by 
the certified IDR entity (less the sum of the initial payment and any 
cost sharing paid or owed by the participant or beneficiary) must be 
paid directly to the provider, facility, or provider of air ambulance 
services not later than 30 calendar days after the determination by the 
certified IDR entity. If the offer selected by the certified IDR entity 
is less than the sum of the initial payment and any cost sharing paid 
by the participant or beneficiary, the provider, facility, or provider 
of air ambulance services will be liable to the plan for the 
difference. The provider, facility, or provider of air ambulance 
services must pay the difference directly to the plan not later than 30 
calendar days after the determination by the certified IDR entity.
    (d) Costs of IDR process--(1) Certified IDR entity fee. (i) With 
respect to the Federal IDR process described in paragraph (c) of this 
section, the party whose offer submitted to the certified IDR entity 
under paragraph (c)(4)(ii)(A) of this section is not selected is 
responsible for the payment to the certified IDR entity of the 
predetermined fee charged by the certified IDR entity.
    (ii) Each party to a determination for which a certified IDR entity 
is selected under paragraph (c)(1) of this section must pay the 
predetermined certified

[[Page 56106]]

IDR entity fee charged by the certified IDR entity to the certified IDR 
entity at the time the parties submit their offers under (c)(4)(i) of 
this section. The certified IDR entity fee paid by the prevailing party 
whose offer is selected by the certified IDR entity will be returned to 
that party within 30 business days following the date of the certified 
IDR entity's determination.
    (2) Administrative fee. (i) Each party to a determination for which 
a certified IDR entity is selected under paragraph (c)(1) of this 
section must, at the time the certified IDR entity is selected under 
paragraph (c)(1), pay to the certified IDR entity a non-refundable 
administrative fee due to the Secretary for participating in the 
Federal IDR process described in this section.
    (ii) The administrative fee amount will be established in guidance 
published annually by the Secretary in a manner such that the total 
fees paid for a year are estimated to be equal to the projected amount 
of expenditures by the Departments of the Treasury, Labor, and Health 
and Human Services for the year in carrying out the Federal IDR 
process.
    (e) Certification of IDR entity--(1) In general. In order to be 
selected under paragraph (c)(1) of this section--
    (i) An IDR entity must meet the standards described in this 
paragraph (e) and be certified by the Secretary, jointly with the 
Secretaries of Health and Human Services and Labor, as set forth in 
this paragraph (e) and guidance promulgated by the Secretary. Once 
certified, the IDR entity will be provided with a certified IDR entity 
number.
    (ii) An IDR entity must provide written documentation to the 
Secretary regarding general company information (such as contact 
information, Taxpayer Identification Number, and website), as well as 
the applicable service area in which the IDR entity intends to conduct 
payment determinations under the Federal IDR process. IDR entities may 
choose to submit their application for all States or self-limit to a 
particular subset of States.
    (iii) An IDR entity that the Secretary, jointly with the Secretary 
of Labor and the Secretary of Health and Human Services, certifies must 
enter into an agreement as a condition of certification. The agreement 
shall include specified provisions encompassed by this section, 
including, but not limited to, the requirements applicable to certified 
IDR entities when making payment determinations, as well as the 
requirements regarding certification and revocation (such as 
specifications for wind-down activities and reallocation of certified 
IDR entity fees, where warranted).
    (2) Requirements. An IDR entity must provide written documentation 
to the Secretary through the Federal IDR portal that demonstrates that 
the IDR entity satisfies the following standards to be a certified IDR 
entity under this paragraph (e):
    (i) Possess (directly or through contracts or other arrangements) 
sufficient arbitration and claims administration of health care 
services, managed care, billing and coding, medical and legal expertise 
to make the payment determinations described in paragraph (c) of this 
section within the time prescribed in paragraph (c)(4)(ii) of this 
section.
    (ii) Employ (directly or through contracts or other arrangements) a 
sufficient number of personnel to make the determinations described in 
paragraph (c) of this section within the time prescribed by (c)(4)(ii) 
of this section. To satisfy this standard, the written documentation 
must include a description of the IDR entity's organizational structure 
and capabilities, including an organizational chart and the 
credentials, responsibilities, and number of personnel employed to make 
determinations described in paragraph (c) of this section.
    (iii) Maintain a current accreditation from a nationally recognized 
and relevant accrediting organization, such as URAC, or ensure that it 
otherwise possesses the requisite training to conduct payment 
determinations (for example, providing documentation that personnel 
employed by the IDR entity have completed arbitration training by the 
American Arbitration Association, the American Health Law Association, 
or a similar organization);
    (iv) Have a process to ensure that no conflict of interest, as 
defined in paragraph (a)(2) of this section, exists between the parties 
and the personnel the certified IDR entity assigns to a payment 
determination to avoid violating paragraph (c)(1)(ii) of this section, 
including policies and procedures for conducting ongoing audits for 
conflicts of interest, to ensure that should any conflicts of interest 
arise, the certified IDR entity has procedures in place to inform the 
Secretary, jointly with the Secretary of Health and Human Services and 
the Secretary of Labor, of the conflict of interest and to mitigate the 
risk by reassigning the dispute to other personnel in the event that 
any personnel previously assigned have a conflict of interest.
    (v) Have a process to maintain the confidentiality of IIHI obtained 
in the course of conducting determinations. A certified IDR entity's 
responsibility to comply with these confidentiality requirements shall 
survive revocation of the IDR entity's certification for any reason, 
and IDR entities must comply with the record retention and disposal 
requirements described in this section. Under this process, once 
certified, the certified IDR entity must comply with the following 
requirements:
    (A) Privacy. The certified IDR entity may create, collect, handle, 
disclose, transmit, access, maintain, store, and/or use IIHI, only to 
perform:
    (1) The certified IDR entity's required duties described in this 
section; and
    (2) Functions related to carrying out additional obligations as may 
be required under applicable Federal or State laws or regulations.
    (B) Security. (1) The certified IDR entity must ensure the 
confidentiality of all IIHI it creates, obtains, maintains, stores, and 
transmits;
    (2) The certified IDR entity must protect against any reasonably 
anticipated threats or hazards to the security of this information;
    (3) The certified IDR entity must ensure that IIHI is securely 
destroyed or disposed of in an appropriate and reasonable manner 6 
years from either the date of its creation or the first date on which 
the certified IDR entity had access to it, whichever is earlier;
    (4) The certified IDR entity must implement policies and procedures 
to prevent, detect, contain, and correct security violations in the 
event of a breach of IIHI;
    (C) Breach notification. The certified IDR entity must, following 
the discovery of a breach of unsecured IIHI, notify of the breach the 
provider, facility, or provider of air ambulance services; the plan; 
the Secretary, jointly with the Secretary of Health and Human Services 
and the Secretary of Labor; and each individual whose unsecured IIHI 
has been, or is reasonably believed to have been, subject to the 
breach, to the extent possible.
    (1) Breaches treated as discovered. For purposes of this paragraph 
(e)(2)(v)(C), a breach shall be treated as discovered by a certified 
IDR entity as of the first day on which the breach is known to the 
certified IDR entity or, by exercising reasonable diligence, would have 
been known to the certified IDR entity. A certified IDR entity shall be 
deemed to have knowledge of a breach if the breach is known, or by 
exercising reasonable diligence would have been known, to any person, 
other than the person committing the breach, who is

[[Page 56107]]

an employee, officer, or other agent of the certified IDR entity;
    (2) Timing of notification. A certified IDR entity must provide the 
notification required by this paragraph (e)(2)(v)(C) without 
unreasonable delay and in no case later than 60 calendar days after 
discovery of a breach.
    (3) Content of notification. The notification required by this 
paragraph (e)(2)(v)(C) must include, to the extent possible:
    (i) The identification of each individual whose unsecured IIHI has 
been, or is reasonably believed by the certified IDR entity to have 
been, subject to the breach;
    (ii) A brief description of what happened, including the date of 
the breach and the date of the discovery of the breach, to the extent 
known;
    (iii) A description of the types of unsecured IIHI that were 
involved in the breach (for example whether full name, social security 
number, date of birth, home address, account number, diagnosis, 
disability code, or other types of information were involved);
    (iv) A brief description of what the certified IDR entity involved 
is doing to investigate the breach, to mitigate harm to the affected 
parties, and to protect against any further breaches; and
    (v) Contact procedures for individuals to ask questions or learn 
additional information, which must include a toll-free telephone 
number, email address, website, or postal address.
    (4) Method for providing notification. A certified IDR entity must 
submit the notification required by this paragraph (e)(2)(v)(C) in 
written form (in clear and understandable language) either on paper or 
electronically through the Federal IDR portal or electronic mail.
    (D) Application to contractor and subcontractors. The certified IDR 
entity must ensure compliance with this paragraph (e)(2)(v) of this 
section by any contractor or subcontractor with access to IIHI 
performing any duties related to the Federal IDR process.
    (vi) Meet appropriate indicators of fiscal integrity and stability 
by demonstrating that the certified IDR entity has a system of 
safeguards and controls in place to prevent and detect improper 
financial activities by its employees and agents to assure fiscal 
integrity and accountability for all certified IDR entity fees and 
administrative fees received, held, and disbursed and by submitting 3 
years of financial statements or, if not available, other information 
to demonstrate fiscal stability of the IDR entity;
    (vii) Provide a fixed fee for single determinations and a separate 
fixed fee for batched determinations within the upper and lower limits 
for each, as set forth in guidance issued by the Secretary. The 
certified IDR entity may not charge a fee that is not within the 
approved limits as set forth in guidance unless the certified IDR 
entity or IDR entity seeking certification receives written approval 
from the Secretary to charge a flat rate beyond the upper or lower 
limits approved by the Secretary for fees. The certified IDR entity or 
IDR entity seeking certification may update its fees and seek approval 
from the Secretary to charge a flat fee beyond the upper or lower 
limits for fees annually as provided in guidance. In order for the 
certified IDR entity to receive the Secretary's written approval to 
charge a flat fee beyond the upper or lower limits for fees as set 
forth in guidance, it must satisfy both conditions in paragraphs 
(e)(2)(vii)(A) and (B) of this section as follows:
    (A) Submit, in writing, a proposal to the Secretary that includes:
    (1) The alternative flat fee the certified IDR entity or IDR entity 
seeking certification believes is appropriate for the certified IDR 
entity or IDR entity seeking certification to charge;
    (2) A description of the circumstances that require the alternative 
fee; and
    (3) A description of how the alternative flat rate will be used to 
mitigate the effects of these circumstances; and
    (B) Receive from the Secretary, jointly with the Secretary of 
Health and Human Services and the Secretary of Labor, written approval 
to charge the fee documented in the certified IDR entity's or the IDR 
entity seeking certification's written proposal.
    (viii) Have a procedure in place to retain the certified IDR entity 
fees described in paragraph (d)(1) of this section paid by both parties 
in a trust or escrow account and to return the certified IDR entity fee 
paid by the prevailing party of an IDR payment determination, or half 
of each party's certified IDR entity fee in the case of an agreement 
described in paragraph (c)(2)(i) of this section, within 30 business 
days following the date of the determination;
    (ix) Have a procedure in place to retain the administrative fees 
described in paragraph (d)(2) of this section and to remit the 
administrative fees to the Secretary in accordance with the timeframe 
and procedures set forth in guidance published by the Secretary;
    (x) Discharge its responsibilities in accordance with paragraph (c) 
of this section, including not making any determination with respect to 
which the certified IDR entity would not be eligible for selection 
pursuant to paragraph (c)(1) of this section; and
    (xi) Collect the information required to be reported to the 
Secretary under paragraph (f) of this section and report the 
information on a timely basis in the form and manner provided in 
guidance published by the Secretary.
    (3) Conflict-of-interest standards. In addition to the general 
standards set forth in paragraph (e)(2)(iv) of this section, an IDR 
entity must provide written documentation that the IDR entity satisfies 
the standards to be a certified IDR entity under this paragraph (e)(3).
    (i) The IDR entity must provide an attestation indicating that it 
does not have a conflict of interest as defined in paragraph (a)(2) of 
this section;
    (ii) The IDR entity must have procedures in place to ensure that 
personnel assigned to a determination do not have any conflicts of 
interest regarding any party to the dispute within the 1 year 
immediately preceding an assignment of dispute determination, similar 
to the requirements laid out in 18 U.S.C. 207(b). In order to satisfy 
this requirement, if certified, the IDR entity must ensure that any 
personnel assigned to a determination do not have any conflicts of 
interest as defined in paragraph (a)(2) of this section.
    (iii) Following certification under this paragraph (e), if a 
certified IDR entity acquires control of, becomes controlled by, or 
comes under common control with any entity described in paragraph 
(e)(3)(i) of this section, the certified IDR entity must notify the 
Secretary in writing no later than 3 business days after the 
acquisition or exercise of control and shall be subject to revocation 
of certification under paragraph (e)(6)(ii) of this section.
    (4) Period of certification. Subject to paragraphs (e)(5) and (6) 
of this section, each certification (including a recertification) of a 
certified IDR entity under the process described in paragraph (e)(1) of 
this section will be effective for a 5-year period.
    (5) Petition for denial or revocation--(i) In general. An 
individual, provider, facility, provider of air ambulance services, 
plan, or issuer may petition for a denial of a certification for an IDR 
entity or a revocation of a certification for a certified IDR entity 
for failure to meet a requirement of this section using the standard 
form and manner set forth in guidance issued by the Secretary. The 
petition for denial of a certification must be submitted within the 
timeframe set forth in guidance issued by the Secretary.

[[Page 56108]]

    (ii) Content of petition. The individual, provider, facility, 
provider of air ambulance services, plan, or issuer seeking denial or 
revocation of certification must submit a written petition using the 
standard form issued by the Secretary including the following 
information:
    (A) The identity of the IDR entity seeking certification or 
certified IDR entity that is the subject of the petition;
    (B) The reason(s) for the petition;
    (C) Whether the petition seeks denial or revocation of a 
certification;
    (D) Documentation to support the reasons outlined in the petition; 
and
    (E) Other information as may be required by the Secretary.
    (iii) Process. (A) The Secretary, jointly with the Secretary of 
Health and Human Services and the Secretary of Labor, will acknowledge 
receipt of the petition within 10 business days of receipt of the 
petition.
    (B) If the Secretary finds that the petition adequately shows a 
failure of the IDR entity seeking certification or the certified IDR 
entity to follow the requirements of this paragraph (e), the Secretary, 
jointly with the Secretary of Health and Human Services and the 
Secretary of Labor, will notify the IDR entity seeking certification or 
the certified IDR entity by providing a de-identified copy of the 
petition. Following the notification, the IDR entity seeking 
certification or certified IDR entity will have 10 business days to 
provide a response. After the time period for providing the response 
has passed, the Secretary, jointly with the Secretary of Health and 
Human Services and the Secretary of Labor, will review the response (if 
any), determine whether a denial or revocation of a certification is 
warranted, and issue a notice of the decision to the IDR entity or 
certified IDR entity and to the petitioner. This decision will be 
subject to the appeal requirements of paragraph (e)(6)(v) of this 
section.
    (C) Effect on certification under petition. Regarding a petition 
for revocation of a certified IDR entity's certification, if the 
Secretary, jointly with the Secretary of Health and Human Services and 
the Secretary of Labor, finds that the petition adequately shows a 
failure to comply with the requirements of this paragraph (e), 
following the Secretary's notification of the failure to the certified 
IDR entity under paragraph (e)(5)(iii)(B) of this section, the 
certified IDR entity may continue to work on previously assigned 
determinations but may not accept new determinations until the 
Secretary issues a notice of the decision to the certified IDR entity 
finding that a revocation of certification is not warranted.
    (6) Denial of IDR entity certification or revocation of certified 
IDR entity certification--(i) Denial of IDR entity certification. The 
Secretary, jointly with the Secretary of Health and Human Services and 
the Secretary of Labor, may deny the certification of an IDR entity 
under paragraph (e)(1) of this section if, during the process of 
certification, including as a result of a petition described in 
paragraph (e)(5) of this section, the Secretary determines the 
following:
    (A) The IDR entity fails to meet the applicable standards set forth 
under this paragraph (e);
    (B) The IDR entity has committed or participated in fraudulent or 
abusive activities, including, during the certification process, 
submitting fraudulent data, or submitting information or data the IDR 
entity knows to be false to the Secretary, the Secretary of Health and 
Human Services, or the Secretary of Labor;
    (C) The IDR entity has failed to comply with requests for 
information from the Secretary, the Secretary of Health and Human 
Services, or the Secretary of Labor as part of the certification 
process;
    (D) In conducting payment determinations, including those outside 
the Federal IDR process, the IDR entity has failed to meet the 
standards that applied to those determinations or reviews, including 
standards of independence and impartiality; or
    (E) The IDR entity is otherwise not fit or qualified to make 
determinations under the Federal IDR process.
    (ii) Revocation of certification of a certified IDR entity. The 
Secretary, jointly with the Secretary of Health and Human Services and 
the Secretary of Labor, may revoke the certification of a certified IDR 
entity under paragraph (e)(1) of this section if, as a result of an 
audit, a petition described in paragraph (e)(5) of this section, or 
otherwise, the Secretary determines the following:
    (A) The certified IDR entity has a pattern or practice of 
noncompliance with any requirements of this paragraph (e);
    (B) The certified IDR entity is operating in a manner that hinders 
the efficient and effective administration of the Federal IDR process;
    (C) The certified IDR entity no longer meets the applicable 
standards for certification set forth under this paragraph (e);
    (D) The certified IDR entity has committed or participated in 
fraudulent or abusive activities, including submission of false or 
fraudulent data to the Secretary, the Secretary of Health and Human 
Services, or the Secretary of Labor;
    (E) The certified IDR entity lacks the financial viability to 
provide arbitration under the Federal IDR process;
    (F) The certified IDR entity has failed to comply with requests 
from the Secretary, the Secretary of Health and Human Services, or the 
Secretary of Labor made as part of an audit, including failing to 
submit all records of the certified IDR entity that pertain to its 
activities within the Federal IDR process; or
    (G) The certified IDR entity is otherwise no longer fit or 
qualified to make determinations.
    (iii) Notice of denial or revocation. The Secretary, jointly with 
the Secretary of Health and Human Services and the Secretary of Labor, 
will issue a written notice of denial to the IDR entity or revocation 
to the certified IDR entity within 10 business days of the Secretary's 
decision, including the effective date of denial or revocation, the 
reason(s) for denial or revocation, and the opportunity to request 
appeal of the denial or revocation.
    (iv) Request for appeal of denial or revocation. To request an 
appeal, the IDR entity or certified IDR entity must submit a request 
for appeal to the Secretary within 30 business days of the date of the 
notice under paragraph (e)(6)(iii) of this section of denial or 
revocation and in the manner prescribed by the instructions to the 
notice. During this time period, the Secretary, jointly with the 
Secretary of Health and Human Services and the Secretary of Labor, will 
not issue a notice of final denial or revocation and a certified IDR 
entity may continue to work on previously assigned determinations but 
may not accept new determinations. If the IDR entity or certified IDR 
entity does not timely submit a request for appeal of the denial or 
revocation, the Secretary, jointly with the Secretary of Health and 
Human Services and the Secretary of Labor, will issue a notice of final 
denial or revocation to the IDR entity or certified IDR entity (if 
applicable) and the petitioner.
    (v) Denial or final revocation. Upon notice of denial or final 
revocation, the IDR entity shall not be considered a certified IDR 
entity and therefore shall not be eligible to accept payment 
determinations under the Federal IDR process. Moreover, after a notice 
of final revocation, the IDR entity may not re-apply to be a certified 
IDR entity until on or after the 181st day after the date of the notice 
of denial or final revocation.

[[Page 56109]]

    (f) Reporting of information relating to the Federal IDR process--
(1) Reporting of information. Within 30 business days of the close of 
each month, for qualified IDR items and services furnished on or after 
January 1, 2022, each certified IDR entity must, in a form and manner 
specified by the Secretary, report:
    (i) The number of notices of IDR initiation submitted under 
paragraph (b)(2) of this section to the certified IDR entity during the 
immediately preceding month;
    (ii) The size of the provider practices and the size of the 
facilities submitting notices of IDR initiation under paragraph (b)(2) 
of this section during the immediately preceding month, as required to 
be provided to the certified IDR entity under paragraph (c)(4)(i)(A)(2) 
of this section;
    (iii) The number of such notices of IDR initiation with respect to 
which a determination was made under paragraph (c)(4)(ii) of this 
section;
    (iv) The number of times during the month that the out-of-network 
rate determined (or agreed to) under this section has exceeded the 
qualifying payment amount, specified by qualified IDR items and 
services;
    (v) With respect to each notice of IDR initiation under paragraph 
(b)(2) of this section for which such a determination was made, the 
following information:
    (A) A description of the qualified IDR items and services included 
with respect to the notification, including the relevant billing and 
service codes;
    (B) The relevant geographic region for purposes of the qualifying 
payment amount for the qualified IDR items and services with respect to 
which the notification was provided;
    (C) The amount of the offer submitted under paragraph (c)(4)(i) of 
this section by the plan and by the provider or facility (as 
applicable) expressed as a dollar amount and as a percentage of the 
qualifying payment amount;
    (D) Whether the offer selected by the certified IDR entity under 
paragraph (c)(4) of this section was the offer submitted by the plan or 
by the provider or facility (as applicable);
    (E) The amount of the selected offer expressed as a dollar amount 
and as a percentage of the qualifying payment amount;
    (F) The rationale for the certified IDR entity's decision, 
including the extent to which the decision relied on the criteria in 
paragraph (c)(4)(iv) of this section;
    (G) The practice specialty or type of each provider or facility, 
respectively, involved in furnishing each qualified IDR item or 
service;
    (H) The identity for each plan, and provider or facility, with 
respect to the notification. Specifically, each certified IDR entity 
must provide each party's name and address, as applicable; and
    (I) For each determination, the number of business days elapsed 
between selection of the certified IDR entity and the determination of 
the out-of-network rate by the certified IDR entity.
    (vi) The total amount of certified IDR entity fees paid to the 
certified IDR entity under paragraph (d)(1) of this section during the 
month.
    (g) Extension of time periods for extenuating circumstances--(1) 
General. The time periods specified in this section (other than the 
time for payment, if applicable, under paragraph (c)(4)(ix) of this 
section) may be extended in extenuating circumstances at the 
Secretary's discretion if:
    (i) An extension is necessary to address delays due to matters 
beyond the control of the parties or for good cause; and
    (ii) The parties attest that prompt action will be taken to ensure 
that the determination under this section is made as soon as 
administratively practicable under the circumstances.
    (2) Process to request an extension. The parties may request an 
extension by submitting a request for extension due to extenuating 
circumstances through the Federal IDR portal if the extension is 
necessary to address delays due to matters beyond the control of the 
parties or for good cause.
    (h) Applicability date. The provisions of this section are 
applicable with respect to plan years beginning on or after January 1, 
2022, except that the provisions regarding IDR entity certification at 
paragraphs (a) and (e) of this section are applicable beginning on 
October 7, 2021.

0
8. Section 54.9817-2T is added to read as follows:


Sec.  54.9817-2T  Independent dispute resolution process for air 
ambulance services (temporary).

    (a) Definitions. Unless otherwise stated, the definitions in Sec.  
54.9816-3T apply.
    (b) Determination of out-of-network rates to be paid by group 
health plans; independent dispute resolution process--(1) In general. 
Except as provided in paragraphs (b)(2) and (3) of this section, in 
determining the out-of-network rate to be paid by group health plans 
for out-of-network air ambulance services, plans must comply with the 
requirements of Sec.  54.9816-8T, except that references in Sec.  
54.9816-8T to the additional circumstances in Sec.  54.9816-
8T(c)(4)(iii)(C) shall be understood to refer to Sec.  54.9817-
2T(b)(2).
    (2) Additional information. Additional information submitted by a 
party, provided the information is credible, relates to the 
circumstances described in paragraphs (b)(2)(i) through (vi) of this 
section, with respect to a qualified IDR service of a nonparticipating 
provider of air ambulance services or group health plan that is the 
subject of a payment determination. This information must also clearly 
demonstrate that the qualifying payment amount is materially different 
from the appropriate out-of-network rate.
    (i) The quality and outcomes measurements of the provider that 
furnished the services.
    (ii) The acuity of the condition of the participant or beneficiary 
receiving the service, or the complexity of furnishing the service to 
the participant or beneficiary.
    (iii) The training, experience, and quality of the medical 
personnel that furnished the air ambulance services.
    (iv) Ambulance vehicle type, including the clinical capability 
level of the vehicle.
    (v) Population density of the point of pick-up (as defined in 42 
CFR 414.605) for the air ambulance (such as urban, suburban, rural, or 
frontier).
    (vi) Demonstrations of good faith efforts (or lack thereof) made by 
the nonparticipating provider of air ambulance services or the plan to 
enter into network agreements with each other and, if applicable, 
contracted rates between the provider of air ambulance services and the 
plan during the previous 4 plan years.
    (3) Reporting of information relating to the IDR process. In 
applying the requirements of Sec.  54.9816-8T(f), within 30 business 
days of the close of each month, for services furnished on or after 
January 1, 2022, the information the certified IDR entity must report, 
in a form and manner specified by the Secretary, with respect to the 
Federal IDR process involving air ambulance services is:
    (i) The number of notices of IDR initiation submitted under the 
Federal IDR process to the certified IDR entity that pertain to air 
ambulance services during the immediat