[Federal Register Volume 88, Number 244 (Thursday, December 21, 2023)]
[Rules and Regulations]
[Pages 88494-88525]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-27931]



[[Page 88493]]

Vol. 88

Thursday,

No. 244

December 21, 2023

Part II





Department of the Treasury





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Internal Revenue Service





Department of Labor





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Employee Benefits Security Administration





Department of Health and Human Services





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26 CFR Part 54

29 CFR Part 2590

45 CFR Part 149





Federal Independent Dispute Resolution (IDR) Process Administrative Fee 
and Certified IDR Entity Fee Ranges; Final Rule

  Federal Register / Vol. 88 , No. 244 / Thursday, December 21, 2023 / 
Rules and Regulations  

[[Page 88494]]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

[TD 9985]
RIN 1545-BQ94

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2590

RIN 1210-AC24

DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Part 149

[CMS-9890-F]
RIN 0938-AV39


Federal Independent Dispute Resolution (IDR) Process 
Administrative Fee and Certified IDR Entity Fee Ranges

AGENCY: Internal Revenue Service (IRS), Department of the Treasury; 
Employee Benefits Security Administration, Department of Labor; Centers 
for Medicare & Medicaid Services, Department of Health and Human 
Services (HHS).

ACTION: Final rules.

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SUMMARY: This document finalizes rules related to the fees established 
by the No Surprises Act for the Federal independent dispute resolution 
(IDR) process, as established by the Consolidated Appropriations Act, 
2021 (CAA). These final rules amend existing regulations to provide 
that the administrative fee amount charged by the Department of the 
Treasury, the Department of Labor, and the Department of Health and 
Human Services (the Departments) to participate in the Federal IDR 
process, and the ranges for certified IDR entity fees for single and 
batched determinations, will be set by the Departments through notice 
and comment rulemaking. The preamble to these final rules also sets 
forth the methodology used to calculate the administrative fee and the 
considerations used to develop the certified IDR entity fee ranges. 
This document also finalizes the amount of the administrative fee for 
disputes initiated on or after the effective date of these rules. 
Finally, this document finalizes the certified IDR entity fee ranges 
for disputes initiated on or after the effective date of these rules.

DATES: These final rules are effective on January 22, 2024.

FOR FURTHER INFORMATION CONTACT: Shira B. McKinlay or William Fischer, 
Internal Revenue Service, Department of the Treasury, 202-317-5500;
    Shannon Hysjulien or Rebecca Miller, Employee Benefits Security 
Administration, Department of Labor, 202-693-8335; and
    Jacquelyn Rudich or Nora Simmons, Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 301-492-5211.

SUPPLEMENTARY INFORMATION:

I. Background

A. Preventing Surprise Medical Bills and Establishing the Federal IDR 
Process Under the Consolidated Appropriations Act, 2021

    On December 27, 2020, the CAA was enacted.\1\ Title I, also known 
as the No Surprises Act, and title II (Transparency) of Division BB of 
the CAA amended chapter 100 of the Internal Revenue Code (Code), part 7 
of the Employee Retirement Income Security Act (ERISA), and title XXVII 
of the Public Health Service Act (PHS Act). The No Surprises Act 
provides Federal protections against surprise billing by limiting out-
of-network cost sharing and prohibiting balance billing in many of the 
circumstances in which surprise bills most frequently arise. In 
particular, the No Surprises Act added new provisions applicable to 
group health plans and health insurance issuers offering group or 
individual health insurance coverage. Section 102 of the No Surprises 
Act added section 9816 of the Code,\2\ section 716 of ERISA,\3\ and 
section 2799A-1 of the PHS Act,\4\ which contain limitations on cost 
sharing and requirements regarding the timing of initial payments and 
notices of denial of payment by plans and issuers for emergency 
services furnished by nonparticipating providers and nonparticipating 
emergency facilities, and for non-emergency services furnished by 
nonparticipating providers for patient visits to participating health 
care facilities, generally defined as hospitals, hospital outpatient 
departments, critical access hospitals, and ambulatory surgical 
centers.\5\
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    \1\ Public Law 116-260 (Dec. 27, 2020).
    \2\ 26 U.S.C. 9816, et seq.
    \3\ 29 U.S.C. 1185e, et seq.
    \4\ 42 U.S.C. 300gg-111, et seq.
    \5\ Section 102(d)(1) of the No Surprises Act amended the 
Federal Employees Health Benefits (FEHB) Act, 5 U.S.C. 8901 et seq., 
by adding a new subsection (p) to 5 U.S.C. 8902. Under this new 
provision, each FEHB Program contract must require a carrier to 
comply with requirements described in sections 9816 and 9817 of the 
Code, sections 716 and 717 of ERISA, and sections 2799A-1 and 2799A-
2 of the PHS Act (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.
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    Section 103 of the No Surprises Act established a Federal IDR 
process that plans and issuers and nonparticipating providers and 
facilities may utilize to resolve certain disputes regarding out-of-
network rates under section 9816 of the Code,\6\ section 716 of 
ERISA,\7\ and section 2799A-1 of the PHS Act.\8\ Section 9816(c)(8) of 
the Code,\9\ section 716(c)(8) of ERISA,\10\ and section 2799A-1(c)(8) 
of the PHS Act \11\ provide that each party to a determination under 
the Federal IDR process shall pay a fee for participating in the 
Federal IDR process, and the amount of the fee is an amount established 
by the Departments in a manner such that the total amount of fees paid 
by all parties is estimated to be equal to the amount of expenditures 
estimated to be made by the Departments for the year in carrying out 
the Federal IDR process.
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    \6\ 26 U.S.C. 9816.
    \7\ 29 U.S.C. 1185e, et seq.
    \8\ 42 U.S.C. 300gg-111, et seq.
    \9\ 26 U.S.C. 9816(c)(8).
    \10\ 29 U.S.C. 1185e(c)(8).
    \11\ 42 U.S.C. 300gg-111(c)(8).
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    Section 105 of the No Surprises Act added section 9817 of the 
Code,\12\ section 717 of ERISA,\13\ and section 2799A-2 of the PHS 
Act.\14\ These sections contain limitations on cost sharing and 
requirements for the timing of initial payments and notices of denial 
of payment by plans and issuers for air ambulance services furnished by 
nonparticipating providers of air ambulance services, and allow plans 
and issuers and nonparticipating providers of air ambulance services to 
utilize the Federal IDR process.
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    \12\ 26 U.S.C. 9817.
    \13\ 29 U.S.C. 1185f, et seq.
    \14\ 42 U.S.C. 300gg-112, et seq.
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    The No Surprises Act also added provisions to title XXVII of the 
PHS Act in a new part E \15\ that apply to health care providers, 
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.
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    \15\ 42 U.S.C. 300gg-131-139.
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    The Departments, along with the Office of Personnel Management 
(OPM), have issued rules in 2021 and 2022 to implement various 
provisions of the No Surprises Act. More specifically relevant to this 
rulemaking, the Departments and OPM issued interim final rules (July 
2021 interim final

[[Page 88495]]

rules \16\ and October 2021 interim final rules) \17\ and final rules 
(August 2022 final rules) \18\ implementing provisions of sections 9816 
and 9817 of the Code,\19\ sections 716 and 717 of ERISA,\20\ and 
sections 2799A-1 and 2799A-2 of the PHS Act.\21\ Those rules implement 
provisions to protect consumers from surprise medical bills for 
emergency services, non-emergency services furnished by 
nonparticipating providers for patient visits to participating 
facilities \22\ in certain circumstances, and air ambulance services 
furnished by nonparticipating providers of air ambulance services. 
Those rules also implement provisions to establish a Federal IDR 
process to determine payment amounts when there is a dispute between 
plans or issuers and providers, facilities, or providers of air 
ambulance services about the out-of-network rate for these services if 
a specified State law as defined in 26 CFR 54.9816-3T, 29 CFR 2590.716-
3, and 45 CFR 149.30 or an applicable All-Payer Model Agreement under 
section 1115A of the Social Security Act does not provide a method for 
determining the total amount payable.
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    \16\ 86 FR 36872 (July 13, 2021).
    \17\ 86 FR 55980 (October 7, 2021).
    \18\ 87 FR 52618 (August 26, 2022).
    \19\ 26 U.S.C. 9816 and 26 U.S.C. 9817.
    \20\ 29 U.S.C. 1185e, et seq. and 29 U.S.C. 1185f, et seq.
    \21\ 42 U.S.C. 300gg-111, et seq. and 42 U.S.C. 300gg-112, et 
seq.
    \22\ References to a ``participating facility'' in this preamble 
mean a ``participating health care facility,'' as defined at 26 CFR 
54.9816-3T, 29 CFR 2590.716-3, and 45 CFR 149.30.
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    The July 2021 interim final rules and October 2021 interim final 
rules generally apply to plans and issuers (including grandfathered 
health plans) for plan years (in the individual market, policy years) 
beginning on or after January 1, 2022, and to health care providers, 
facilities, and providers of air ambulance services for items and 
services furnished during plan years (in the individual market, policy 
years) beginning on or after January 1, 2022.\23\ The August 2022 final 
rules became effective October 25, 2022, and are applicable for items 
or services provided or furnished on or after October 25, 2022, for 
plan years (in the individual market, policy years) beginning on or 
after January 1, 2022.
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    \23\ The interim final rules also include interim final 
regulations under 5 U.S.C. 8902(p) issued by OPM that specify how 
certain provisions of the No Surprises Act apply to health benefit 
plans offered by carriers under the FEHB Act. These provisions apply 
to carriers in the FEHB Program with respect to contract years 
beginning on or after January 1, 2022. The disclosure requirements 
at 45 CFR 149.430 regarding patient protections against balance 
billing are applicable as of January 1, 2022.
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B. October 2021 Interim Final Rules and Related Guidance

    The October 2021 interim final rules implement the Federal IDR 
process under sections 9816(c) and 9817(b) of the Code,\24\ sections 
716(c) and 717(b) of ERISA,\25\ and sections 2799A-1(c) and 2799A-2(b) 
of the PHS Act.\26\ The rules apply to emergency services, non-
emergency services furnished by nonparticipating providers for patient 
visits to certain types of participating health care facilities \27\ 
(unless an individual has been provided notice and waived the 
individual's surprise billing protections, in accordance with 45 CFR 
149.410 or 149.420, as applicable), and air ambulance services 
furnished by nonparticipating providers of air ambulance services, for 
situations in which neither a specified State law as defined in 26 CFR 
54.9816-3T, 29 CFR 2590.716-3, and 45 CFR 149.30 nor an All-Payer Model 
Agreement under section 1115A of the Social Security Act applies.
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    \24\ 26 U.S.C. 9816(c) and 26 U.S.C. 9817(b).
    \25\ 29 U.S.C. 1185e(c) and 29 U.S.C. 1185f(b).
    \26\ 42 U.S.C. 300gg-111(c) and 42 U.S.C. 300gg-112(b).
    \27\ A health care facility, in the context of non-emergency 
services, is defined as (1) a hospital (as defined in section 
1861(e) of the Social Security Act), (2) a hospital outpatient 
department, (3) a critical access hospital (as defined in section 
1861(mm)(1) of the Social Security Act), or (4) an ambulatory 
surgical center described in section 1833(i)(1)(A) of the Social 
Security Act. Code section 9816(b)(2)(A)(ii), ERISA section 
716(b)(2)(A)(ii), and PHS Act section 2799A-1(b)(2)(A)(ii). 26 CFR 
54.9816-3T, 29 CFR 2590.716-3, and 45 CFR 149.30.
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    To implement the Federal IDR process, the October 2021 interim 
final rules include requirements governing the costs of the Federal IDR 
process. Under section 9816(c)(5)(F)(i) of the Code,\28\ section 
716(c)(5)(F)(i) of ERISA,\29\ section 2799A-1(c)(5)(F)(i) of the PHS 
Act,\30\ and the October 2021 interim final rules, the party whose 
offer is not selected is responsible for the payment of the fee charged 
by the certified IDR entity (certified IDR entity fee).\31\ Under the 
October 2021 interim final rules, as a condition of certification, the 
certified IDR entity must notify the Departments of the amount of the 
certified IDR entity fees it intends to charge for payment 
determinations, which is limited to a fixed certified IDR entity fee 
amount for single determinations and a separate fixed certified IDR 
entity fee amount for batched determinations.\32\ Each of these fixed 
certified IDR entity fees must be within a range set forth in guidance 
by the Departments, unless the certified IDR entity receives written 
approval from the Departments to charge a certified IDR entity fee 
outside that range.\33\ The October 2021 interim final rules describe 
the considerations that the Departments will use to develop the 
certified IDR entity fee ranges, including the anticipated time and 
resources needed for certified IDR entities to meet the requirements of 
those interim final rules, the volume of payment determinations, and 
the capacity of the Federal IDR process to efficiently handle the 
volume of IDR initiations and payment determinations, and provide that 
the Departments will review and update the allowable fee ranges 
annually based on these factors, the impact of inflation, and other 
cost increases. Those rules also provide that on an annual basis, the 
certified IDR entity may update its certified IDR entity fees within 
the ranges set forth in current guidance and seek approval from the 
Departments to charge fixed certified IDR entity fees beyond the upper 
or lower limits for certified IDR entity fees.\34\
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    \28\ 26 U.S.C. 9816(c)(5)(F)(i).
    \29\ 29 U.S.C. 1185e(c)(5)(F)(i).
    \30\ 42 U.S.C. 300gg-111(c)(5)(F)(i).
    \31\ In the case of a batched dispute, 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. 86 FR 55980, 56001.
    \32\ 26 CFR 54.9816-8T(e)(2)(vii), 29 CFR 2590.716-8(e)(2)(vii), 
and 45 CFR 149.510(e)(2)(vii).
    \33\ Id.
    \34\ Id.
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    Additionally, pursuant to section 9816(c)(8) of the Code,\35\ 
section 716(c)(8) of ERISA,\36\ and section 2799A-1(c)(8) of the PHS 
Act,\37\ and under the October 2021 interim final rules, each party 
must pay an administrative fee for participating in the Federal IDR 
process. The administrative fee is established in guidance in a manner 
so that, in accordance with the requirements of section 9816(c)(8)(B) 
of the Code,\38\ section 716(c)(8)(B) of ERISA,\39\ and section 2799A-
1(c)(8)(B) of the PHS Act,\40\ the total administrative fees paid for a 
year are estimated to be equal to the amount of expenditures estimated 
to be made by the Departments in carrying

[[Page 88496]]

out the Federal IDR process for that year.\41\
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    \35\ 26 U.S.C. 9816(c)(8).
    \36\ 29 U.S.C. 1185e(c)(8).
    \37\ 42 U.S.C. 300gg-111(c)(8).
    \38\ 26 U.S.C. 9816(c)(8)(B).
    \39\ 29 U.S.C. 1185e(c)(8)(B).
    \40\ 42 U.S.C. 300gg-111(c)(8)(B).
    \41\ 26 CFR 54.9816-8T(d)(2)(ii), 29 CFR 2590.716-8(d)(2)(ii), 
and 45 CFR 149.510(d)(2)(ii).
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    Contemporaneously with the October 2021 interim final rules, the 
Departments released the Calendar Year 2022 Fee Guidance for the 
Federal Independent Dispute Resolution Process Under the No Surprises 
Act (October 2021 guidance), setting the administrative fee for both 
parties to a dispute at $50 per party.\42\ The October 2021 guidance 
also established the range for fixed certified IDR entity fees for 
single determinations as $200-$500, and the range for fixed certified 
IDR entity fees for batched determinations as $268-$670, unless the 
Departments otherwise grant approval for the certified IDR entity to 
charge a fee outside these ranges. In October 2022, the Departments 
released the Calendar Year 2023 Fee Guidance for the Federal 
Independent Dispute Resolution Process Under the No Surprises Act 
(October 2022 guidance), again setting the administrative fee for both 
parties to a dispute at $50 per party.\43\ The October 2022 guidance 
explained that the data available regarding usage of the Federal IDR 
process was not sufficiently reliable to support a change to either the 
estimated number of payment determinations for which administrative 
fees would be paid or the estimated ongoing program costs for 2023; 
therefore, the 2023 administrative fee amount due from each party for 
participating in the Federal IDR process would remain the same as the 
2022 administrative fee amount. The October 2022 guidance permits 
certified IDR entities to charge a fee between $200 and $700 for single 
determinations and between $268 and $938 for batched determinations, 
unless the Departments otherwise grant approval for the certified IDR 
entity to charge a fee outside of these ranges. In addition, to account 
for the heightened workload for batched determinations, the October 
2022 guidance permits a certified IDR entity to charge the following 
percentage of its approved certified IDR entity batched determination 
fee (``batching percentage'') for batched determinations, which are 
based on the number of line items initially submitted in the batch:
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    \42\ Centers for Medicare & Medicaid Services (September 30, 
2021). Calendar Year 2022 Fee Guidance for the Federal Independent 
Dispute Resolution Process under the No Surprises Act. https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Technical-Guidance-CY2022-Fee-Guidance-Federal-Independent-Dispute-Resolution-Process-NSA.pdf.
    \43\ Centers for Medicare & Medicaid Services (October 31, 
2022). Calendar Year 2023 Fee Guidance for the Federal Independent 
Dispute Resolution Process under the No Surprises Act. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.
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     2-20 line items: 100 percent of the approved batched 
determination fee;
     21-50 line items: 110 percent of the approved batched 
determination fee;
     51-80 line items: 120 percent of the approved batched 
determination fee; and
     81 line items or more: 130 percent of the approved batched 
determination fee.
    In December 2022, the Departments released the Amendment to the 
Calendar Year 2023 Fee Guidance for the Federal Independent Dispute 
Resolution Process Under the No Surprises Act: Change in Administrative 
Fee (December 2022 guidance), which amended the $50 per party 
administrative fee set in the October 2022 guidance to $350 for 
calendar year 2023.\44\ The change in the administrative fee for 2023 
reflected the additional costs to the Departments to carry out the 
Federal IDR process as a result of the Departments' enhanced role in 
calendar year 2023 in conducting pre-eligibility reviews to allow the 
certified IDR entities to complete their eligibility determinations 
more efficiently,\45\ as well as systemic improvements that allowed for 
the aggregation of data needed to estimate the rate at which disputes 
were determined eligible for the Federal IDR process and the rate at 
which one or both parties paid the administrative fee for purposes of 
calculating the administrative fee. The December 2022 guidance did not 
amend the certified IDR entity fee ranges provided in the October 2022 
guidance.
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    \44\ Centers for Medicare & Medicaid Services (December 23, 
2022). Amendment to the Calendar Year 2023 Fee Guidance for the 
Federal Independent Dispute Resolution Process under the No 
Surprises Act: Change in Administrative Fee. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/amended-cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.
    \45\ Centers for Medicare & Medicaid Services (November 21, 
2022). Notice of the Federal Independent Dispute Resolution (IDR) 
Team Technical Assistance to Certified Independent Dispute 
Resolution Entities (IDREs) in the Dispute Eligibility Determination 
Process. https://www.cms.gov/files/document/idre-eligibility-support-guidance-11212022-final-updated.pdf.
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C. Recent Litigation

    On November 30, 2022, the Texas Medical Association, Tyler Regional 
Hospital, and a Texas physician filed a lawsuit (TMA III) \46\ against 
the Departments and OPM, asserting that the July 2021 interim final 
rules,\47\ including the regulations governing how the qualifying 
payment amount (QPA) should be calculated, and certain related guidance 
documents conflicted with the statutory language. On August 24, 2023, 
the U.S. District Court for the Eastern District of Texas (District 
Court) issued a memorandum opinion and order \48\ that vacated certain 
portions of the July 2021 interim final rules and associated regulatory 
provisions \49\ and portions of guidance documents,\50\ including 
portions that provided the methodology for calculating the QPA and 
interpretations for certified IDR entities related to the processing of 
disputes for air ambulance services.
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    \46\ Complaint, Tex. Med. Ass'n v. U. S. Dep't of Health and 
Human Servs., No. 6:22-cv-00450-JDK (E.D. Tex. Nov. 30, 2022) (ECF 
No. 1).
    \47\ 86 FR 36872 (July 13, 2021).
    \48\ See Memorandum Opinion and Order, Tex. Med. Ass'n. v. U.S. 
Dep't of Health & Hum. Servs., No. 6:22-cv-00450-JDK, 2023 WL 
5489028 (E.D. Tex. Aug. 24, 2023).
    \49\ Specifically, the District Court vacated certain provisions 
of 26 CFR 54.9816-6T and 54.9817-1T, 29 CFR 2590.716-6 and 2590.717-
1, and 45 CFR 149.130 and 149.140. The District Court also vacated 5 
CFR 890.114(a), insofar as it requires compliance with the vacated 
regulations and guidance.
    \50\ Specifically, the District Court vacated FAQs 14 and 15 of 
FAQs about Affordable Care Act and Consolidated Appropriations Act, 
2021 Implementation Part 55 (August 19, 2022), as well as portions 
of Technical Guidance for Certified IDR Entities at 2-3 (August 18, 
2022).
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    On January 30, 2023, the Texas Medical Association, Houston 
Radiology Associated, Texas Radiological Society, Tyler Regional 
Hospital, and a Texas physician filed a lawsuit (TMA IV) \51\ against 
the Departments and OPM, asserting that the December 2022 guidance \52\ 
that set the $350 per party administrative fee amount for 2023 was 
unlawfully issued without notice and comment rulemaking.\53\ On August 
3, 2023, the District Court issued a memorandum opinion and order \54\ 
vacating the portion of the December 2022 guidance \55\ that increased 
the

[[Page 88497]]

administrative fee for the Federal IDR process to $350 per party for 
disputes initiated during the calendar year beginning January 1, 2023. 
The District Court also vacated certain provisions of the October 2021 
interim final rules setting forth the batching criteria under which 
multiple IDR items or services may be considered jointly as part of a 
single IDR dispute.\56\ On August 11, 2023, the Departments released 
guidance \57\ to reflect the TMA IV opinion and order related to the 
administrative fee to clarify that the $50 per party per dispute 
administrative fee amount established in the October 2022 guidance 
applies for disputes initiated on or after August 3, 2023, and until 
the Departments take action to set a new administrative fee amount.
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    \51\ Complaint, Tex. Med. Ass'n. v. U. S. Dep't of Health and 
Human Servs., No. 6:23-cv-00059-JDK (E.D. Tex. Jan. 30, 2023) (ECF 
No. 1).
    \52\ Centers for Medicare & Medicaid Services (December 23, 
2022). Amendment to the Calendar Year 2023 Fee Guidance for the 
Federal Independent Dispute Resolution Process Under the No 
Surprises Act: Change in Administrative Fee. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/amended-cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.
    \53\ Complaint, Tex. Med. Ass'n. v. U. S. Dep't of Health and 
Human Servs., No. 6:23-cv-00059-JDK (E.D. Tex. Jan. 30, 2023) (ECF 
No. 1).
    \54\ See Memorandum Opinion and Order, Tex. Med. Ass'n. v. U.S. 
Dep't of Health & Hum. Servs., No. 6:23-cv-00059-JDK, 2023 WL 
4977746 (E.D. Tex. Aug. 3, 2023).
    \55\ Centers for Medicare & Medicaid Services (December 23, 
2022). Amendment to the Calendar Year 2023 Fee Guidance for the 
Federal Independent Dispute Resolution Process under the No 
Surprises Act: Change in Administrative Fee. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/amended-cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.
    \56\ Specifically, the District Court vacated the requirement 
under 26 CFR 54.9816-8T(c)(3)(i)(C), 29 CFR 2590.716-8(c)(3)(i)(C), 
and 45 CFR 149.510(c)(3)(i)(C) that for a qualified IDR item and 
service to be considered the same or similar item and service, it 
must be billed under the same service code or a comparable code 
under a different procedural code system, such as the 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.
    \57\ U.S. Department of Health and Human Services, U.S. 
Department of Labor, and U.S. Department of the Treasury (August 
2023). Federal Independent Dispute Resolution (IDR) Process 
Administrative Fee FAQs. https://www.cms.gov/files/document/idr-admin-fees-faqs-081123-508.pdf-0.
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    On October 6, 2023, the Departments and OPM released ``FAQs About 
Consolidated Appropriations Act, 2021 Implementation Part 62'' \58\ to 
provide guidance related to the TMA III opinion and order. On November 
28, 2023, the Departments released guidance in accordance with the TMA 
III and TMA IV opinions and orders \59\ to clarify how certified IDR 
entities should determine whether a dispute is appropriately batched 
and how to submit single and batched air ambulance disputes.\60\
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    \58\ See U.S. Department of Health and Human Services, U.S. 
Department of Labor, U.S. Department of Treasury, Office of 
Personnel Management (October 6, 2023), FAQs about Consolidated 
Appropriations Act, 2021 Implementation Part 62, available at 
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-62.pdf and https://www.cms.gov/files/document/faqs-part-62.pdf.
    \59\ See U.S. Department of Health and Human Services, U.S. 
Department of Labor, U.S. Department of Treasury, Office of 
Personnel Management (November 28, 2023), FAQs about Consolidated 
Appropriations Act, 2021 Implementation Part 63, available at 
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-62.pdf and https://www.cms.gov/files/document/faqs-part-63.pdf.
    \60\ See U.S. Department of Health and Human Services, U.S. 
Department of Labor, U.S. Department of Treasury, Office of 
Personnel Management (November 28, 2023), Federal Independent 
Dispute Resolution (IDR) Process Batching and Air Ambulance FAQs, 
available at https://www.cms.gov/files/document/faqs-batching-air-ambulance.pdf.
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D. Federal Independent Dispute Resolution Operations Proposed Rules

    On November 3, 2023, the Departments published the Federal 
Independent Dispute Resolution Operations proposed rules \61\ (IDR 
Operations proposed rules). Those proposed rules included new proposed 
requirements for disclosing information when initiating the Federal IDR 
process and the provision of certain claims codes with paper or 
electronic remittances. Additionally, those proposed rules would amend 
certain requirements related to the open negotiation period, initiation 
of the Federal IDR process, eligibility determinations, batched 
disputes, extensions due to extenuating circumstances, and the 
collection of administrative fees and certified IDR entity fees. 
Lastly, those proposed rules would require plans and issuers to 
register with the Federal IDR portal.
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    \61\ 88 FR 75744.
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    With respect to the administrative fee, the Departments proposed in 
the IDR Operations proposed rules to collect the administrative fee 
directly from the parties rather than having the certified IDR entities 
collect the administrative fee on the Departments' behalf. The 
Departments also proposed required timeframes for the initiating and 
non-initiating parties to pay the administrative fee and proposed to 
establish consequences for non-payment of the administrative fee for 
each party. Finally, to ensure that the Federal IDR process is 
accessible to all parties, the Departments proposed to charge both 
parties a reduced administrative fee when the highest offer made during 
open negotiation by either party was less than a predetermined 
threshold and proposed to charge the non-initiating party a reduced 
administrative fee when the dispute is determined ineligible by either 
the certified IDR entity or the Departments, as applicable.
    To align with these proposals, the Departments also set forth the 
methodology inputs used to calculate the proposed administrative fee 
amounts in the preamble to the IDR Operations proposed rules that would 
be effective for disputes initiated on or after January 1, 2025. The 
Departments proposed that the full administrative fee amount would be 
$150 per party per dispute, the reduced administrative fee for both 
parties when the highest offer made by either party during open 
negotiation was less than the threshold would be $75 per party per 
dispute (50 percent of the full administrative fee amount), and the 
reduced administrative fee for non-initiating parties in ineligible 
disputes would be $30 per non-initiating party per ineligible dispute 
(20 percent of the full administrative fee amount).
    The inputs to the methodology set forth in this preamble and the 
administrative fee amount the Departments are finalizing in these final 
rules are effective for disputes initiated on or after the effective 
date of these final rules. In contrast, the proposed administrative fee 
structure and administrative fee amounts based on inputs to the 
methodology set forth in the IDR Operations proposed rules, if 
finalized, would be effective for disputes initiated on or after 
January 1, 2025. The administrative fee policies finalized in these 
final rules are effective, and unchanged by the proposals in the IDR 
Operations proposed rules, unless and until superseding administrative 
fee policies in the IDR Operations proposed rules are adopted.

E. Public Comments Received in Response to Proposed Rules

    In the September 26, 2023 Federal Register, the Departments 
published the Federal Independent Dispute Resolution (IDR) Process 
Administrative Fee and Certified IDR Entity Fee Ranges proposed rules 
(IDR Fees proposed rules),\62\ which proposed to amend existing 
regulations to provide that the administrative fee amount charged by 
the Departments to participate in the Federal IDR process, and the 
ranges for certified IDR entity fees for single and batched 
determinations, would be set by the Departments through notice and 
comment rulemaking. The IDR Fees proposed rules also discussed the 
methodology used to calculate the administrative fee and the 
considerations used to develop the certified IDR entity fee ranges. 
Finally, the IDR Fees proposed rules proposed the amount of the 
administrative fee and the certified IDR entity fee ranges for disputes 
initiated on or after the later of the effective date of these rules or 
January 1, 2024.
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    \62\ 88 FR 65888.
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    The Departments received 44 comments on many different aspects of 
the IDR Fees proposed rules. In

[[Page 88498]]

particular, the Departments received many comments stating that the 
administrative fee amount and the certified IDR entity fee ranges 
create a barrier to accessing the Federal IDR process for many parties, 
particularly small, rural, or independent providers, and these comments 
supported retaining the current $50 per party per dispute 
administrative fee amount. The Departments also received many comments 
on the proposed certified IDR entity fee ranges, particularly the 
proposed additional tiered batched fee range for disputes with more 
than 25 line items. While some commenters supported the increased 
flexibility for certified IDR entity fee ranges, many commenters were 
concerned about the proposed further increases in the certified IDR 
entity fee ranges. The Departments respond to these comments in section 
II of this preamble.
    Many comments concerned matters that were outside of the scope of 
the proposed rules and therefore are not addressed in these final 
rules. For example, the Departments received comments stating that the 
current Federal IDR process lacks the efficiency needed to resolve 
disputes quickly. The Departments also received many comments related 
to the eligibility determination process, including on difficulties 
determining eligibility in States with a specified State law and the 
lack of information provided by plans and issuers. Comments on the 
efficiency of the Federal IDR process and eligibility determinations 
relate to operations that are outside of the scope of these final 
rules' limited focus on the administrative fee and certified IDR entity 
fee ranges and the processes for setting such amounts. The Departments 
encourage interested parties to submit comments regarding the proposals 
included in the IDR Operations proposed rules, including the proposal 
to establish a Departmental eligibility review process, in accordance 
with the instructions set forth in those proposed rules.\63\
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    \63\ See 88 FR 75744.
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    Some other out-of-scope comments addressed the impacts of the 
Federal IDR portal closure, which occurred in response to litigation 
previously described in this preamble. For example, the Departments 
received comments requesting that, as a result of TMA IV, the 
Departments should refund $300 to each party that paid a $350 
administrative fee between January 1, 2023 and August 3, 2023, and the 
Departments should offer an extension to parties that would have 
initiated a dispute if the administrative fee during that time was $50, 
rather than $350, to now initiate that dispute. The Departments note 
that this relief was requested by the plaintiffs in TMA IV and was 
denied by the court.\64\ Comments also addressed the impact of TMA III 
on the calculation of the QPA, specifically asking the Departments to 
address underpayments to providers due to purported artificially 
suppressed QPAs. Additionally, the Departments received comments 
related to the batching requirements for submission of disputes. Some 
of these comments addressed specific difficulties in batching emergency 
medicine, radiology, and anesthesiology services and expressed a desire 
to broaden the batching criteria. While the IDR Operations proposed 
rules included proposals related to the batching requirements, these 
comments were outside the scope of this rulemaking because the IDR Fees 
proposed rules did not propose any changes to the batching requirements 
or calculation of the QPA.
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    \64\ See Memorandum Opinion and Order, Tex. Med. Ass'n., et al. 
v. U.S. Dep't of Health and Human Servs., et al., No. 6:23-cv-00059-
JDK (E.D. Tex. August 3, 2023).
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    Finally, the Departments received many comments suggesting 
different administrative fee structures. For example, the Departments 
received comments suggesting that the administrative fee amount be 
split between the parties, be refundable to the prevailing party, be 
funded 75 percent by plans and issuers and 25 percent by providers or 
be payable at the end of the Federal IDR process. The Departments also 
received comments recommending a variable administrative fee amount 
tied to the amount in dispute or the QPA, either for all disputes or 
just for batched disputes. Further comments suggested capping the 
administrative fee amount or imposing a base administrative fee amount 
and an additional tiered fee amount based on the amount in dispute.
    As a result of the TMA IV opinion and order having set aside the 
Departments' guidance establishing administrative fees, the Departments 
set a goal of establishing in rulemaking administrative fee amounts 
that would be effective as close to January 1, 2024 as possible, 
because the current $50 administrative fee amount is insufficient to 
satisfy the statutory requirement that the total amount of fees paid 
for the year be estimated to be equal to the amount of expenditures 
estimated to be made for the year in carrying out the Federal IDR 
process. If the Departments were to continue to impose a $50 per party 
per dispute administrative fee amount throughout 2024, the Departments 
estimate that they would collect approximately $24.6 million in 
administrative fees for the year (492,000 administrative fees paid x 
$50 per party per dispute), as discussed further in section IV.D.2.a of 
this preamble. As discussed further in section II.A of this preamble, 
the Departments estimate that their expenditures to carry out the 
Federal IDR process in 2024 will be approximately $56.6 million. 
Therefore, if the administrative fee amount remains at $50 per party 
per dispute in 2024, the Departments would significantly under-collect 
administrative fees required to carry out the Federal IDR process. 
Accordingly, to be able to implement an increase to the administrative 
fee amount as soon as possible, consistent with the statutory 
requirement, the IDR Fees proposed rules proposed the amount of the 
administrative fee and the preamble to the proposed rules described the 
methodology for calculating it.
    The Departments did not propose any changes to the structure of the 
administrative fee as this would take longer to develop and implement 
and would be more efficiently operationalized with the changes proposed 
in the IDR Operations proposed rules, which are intended to be more 
comprehensive. While the Departments considered alternative fee 
structures in this rulemaking, the Departments were of the view that 
addressing the structure of the administrative fee in the IDR 
Operations proposed rules would give interested parties more time to 
comment, consider, and prepare for any fee structure change, because 
the effective date of the IDR Operations proposed rules, if finalized, 
will be later than the effective date of these final rules.
    Additionally, the policies proposed in the IDR Operations proposed 
rules would require more time for the Departments to develop and 
implement due to the substantial changes to the Federal IDR portal 
required by those proposals, if finalized, including adopting new 
processes to collect the administrative fees directly from the parties 
and collecting differing amounts of administrative fees from different 
parties in certain circumstances, as described further in the IDR 
Operations proposed rules. Therefore, the Departments deferred those 
proposed changes to the Federal IDR process and administrative fee 
structure and collection procedures to the IDR Operations proposed 
rules and prioritized completing this rulemaking.
    The Departments encourage interested parties to submit relevant 
comments

[[Page 88499]]

regarding batching and the administrative fee structure, the new inputs 
to the administrative fee methodology, and the amount of the fee 
proposed in the IDR Operations proposed rules, in response to those 
proposed rules.\65\
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    \65\ See 88 FR 75744.
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    The Departments also sought to establish in rulemaking certified 
IDR entity fee ranges that would be effective as close to January 1, 
2024 as possible, because this effective date would provide 
predictability for certified IDR entities, who must plan for and 
finalize their 2024 certified IDR entity fixed fee amounts, and 
parties, who must budget for their participation in the Federal IDR 
process taking into account both the administrative and certified IDR 
entity fees. Establishing the certified IDR entity fee ranges in 
rulemaking with an effective date close to January 1, 2024 would also 
allow for greater transparency than the current method of establishing 
the fee ranges in guidance.

F. Scope and Purpose of Rulemaking

    These final rules amend 26 CFR 54.9816-8(d)(2)(ii) and (e)(2)(vii), 
29 CFR 2590.716-8(d)(2)(ii) and (e)(2)(vii), and 45 CFR 
149.510(d)(2)(ii) and (e)(2)(vii) to provide that the administrative 
fee amount and the ranges for certified IDR entity fees for single and 
batched disputes will be set by the Departments through notice and 
comment rulemaking, rather than in guidance published annually. The 
preamble to this rulemaking also sets forth the methodology used to 
calculate the administrative fee amount and the considerations used to 
develop the certified IDR entity fee ranges. These rules also finalize 
the administrative fee amount and certified IDR entity fee ranges for 
disputes initiated on or after the effective date of these rules. The 
finalized administrative fee amount and certified IDR entity fee ranges 
in these rules will remain in effect until changed by notice and 
comment rulemaking.
    The IDR Fees proposed rules proposed that the administrative fee 
amount and certified IDR entity fee ranges finalized in these final 
rules would be effective for disputes initiated on or after the later 
of the effective date of these rules or January 1, 2024. As these final 
rules will not be effective by January 1, 2024, the Departments are 
finalizing the proposal that the administrative fee amount and 
certified IDR entity fee ranges in these rules will be effective for 
disputes initiated on or after the effective date of these rules, which 
is 30 calendar days from publication in the Federal Register.

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

A. Administrative Fee Amount and Methodology

1. Summary of Proposed and Finalized Policies
    Under section 9816(c)(8)(A) of the Code,\66\ section 716(c)(8)(A) 
of ERISA,\67\ section 2799A-1(c)(8)(A) of the PHS Act,\68\ and the 
October 2021 interim final rules,\69\ each party to a determination for 
which a certified IDR entity is selected must pay an administrative fee 
for participating in the Federal IDR process. Under section 
9816(c)(8)(B) of the Code,\70\ section 716(c)(8)(B) of ERISA,\71\ 
section 2799A-1(c)(8)(B) of the PHS Act,\72\ and the October 2021 
interim final rules,\73\ the administrative fee is established in a 
manner such that the total amount of administrative fees paid for a 
year are estimated to be equal to the amount of expenditures estimated 
to be made by the Departments in carrying out the Federal IDR process 
for that year.
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    \66\ 26 U.S.C. 9816(c)(8)(A).
    \67\ 29 U.S.C. 1185e(c)(8)(A).
    \68\ 42 U.S.C. 300gg-111(c)(8)(A).
    \69\ 26 CFR 54.9816-8T(d)(2)(i), 29 CFR 2590.716-8(d)(2)(i), and 
45 CFR 149.510(d)(2)(i).
    \70\ 26 U.S.C. 9816(c)(8)(B).
    \71\ 29 U.S.C. 1185e(c)(8)(B).
    \72\ 42 U.S.C. 300gg-111(c)(8)(B).
    \73\ 26 CFR 54.9816-8T(d)(2)(ii), 29 CFR 2590.716-8(d)(2)(ii), 
and 45 CFR 149.510(d)(2)(ii).
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    The Departments proposed to establish the amount of the 
administrative fee through notice and comment rulemaking by amending 26 
CFR 54.9816-8(d)(2)(ii), 29 CFR 2590.716-8(d)(2)(ii), and 45 CFR 
149.510(d)(2)(ii). The Departments also proposed at 26 CFR 54.9816-
8(d)(2)(ii), 29 CFR 2590.716-8(d)(2)(ii), and 45 CFR 149.510(d)(2)(ii) 
that, for disputes initiated on or after the later of the effective 
date of these rules or January 1, 2024, the administrative fee amount 
would be $150 per party per dispute, which would remain in effect until 
changed by notice and comment rulemaking.\74\ Under the proposed rules, 
the Departments would have retained the flexibility to update the 
administrative fee more or less frequently than annually if the total 
estimated amount of administrative fees paid or amount of expenditures 
estimated to be made by the Departments in carrying out the Federal IDR 
process changed such that a new administrative fee amount would be 
required to satisfy the requirement that the total amount of 
administrative fees paid is estimated to be equal to the amount of 
expenditures estimated to be made by the Departments in carrying out 
the Federal IDR process.
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    \74\ As previously mentioned, in the event the effective date of 
these final rules is after January 1, 2024, the $50 per party per 
dispute administrative fee amount in effect for 2023, as provided in 
the October 2022 guidance, will continue to apply to disputes 
initiated between January 1, 2024 and the effective date of these 
rules.
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    The Departments proposed to set the administrative fee amount by 
estimating the amount of expenditures made by the Departments in 
carrying out the Federal IDR process and dividing this amount by the 
estimated total number of administrative fees paid by the parties. As 
explained in the preamble to the IDR Fees proposed rules, the 
Departments estimated the total number of administrative fees paid 
based on the total volume of closed disputes.
    For the purpose of calculating the administrative fee amount in the 
IDR Fees proposed rules, the Departments projected that approximately 
225,000 disputes would be closed annually, resulting in 450,000 
administrative fees paid. Additionally, the Departments estimated that 
the expenditures made by the Departments for carrying out the Federal 
IDR process in 2024 would be approximately $70 million.\75\ Using this 
methodology, proposed in paragraphs 26 CFR 54.9816-8(d)(2)(ii), 29 CFR 
2590.716-8(d)(2)(ii), and 45 CFR 149.510(d)(2)(ii), the Departments 
calculated the proposed administrative fee for disputes initiated on or 
after the effective date of these rules, and continuing until changed 
by notice and comment rulemaking, by dividing the annual expenditures 
of approximately $70 million estimated to be made by the Departments in 
carrying out the Federal IDR process by 450,000, the estimated annual 
number of administrative fees to be paid by the disputing parties. This 
resulted in a proposed administrative fee amount of $150 per party per 
dispute.\76\
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    \75\ The list of expenditures associated with the estimated $70 
million was provided in the IDR Fees proposed rules at 88 FR 65893.
    \76\ As described in the IDR Fees proposed rules, the 
Departments estimated that the proposed administrative fee amount of 
$150 per party per dispute would result in an estimated annual 
collection approximately equal to the estimated annual expenditures 
of approximately $70 million. See 88 FR 65888 at 65899.
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    After considering comments received on the proposals, as discussed 
further in this preamble section, the Departments are finalizing the 
policy to set the administrative fee amount in notice and comment 
rulemaking no more frequently than once per calendar year. The 
Departments may set the administrative fee less frequently than 
annually if the Departments estimate

[[Page 88500]]

that the total amount of administrative fees paid under the current 
administrative fee amount would continue to be equal to the amount of 
expenditures estimated to be made by the Departments in carrying out 
the Federal IDR process for the upcoming calendar year.
    Additionally, in response to comments received on the proposals, 
the Departments are modifying the administrative fee methodology used 
to estimate the number of administrative fees paid. The Departments 
will use the estimated number of administrative fees paid to certified 
IDR entities, rather than the estimated number of closed disputes, to 
estimate the total number of administrative fees paid. In addition, the 
Departments will not assume, as set forth in the IDR Fees proposed 
rules, a 25 percent reduction in the volume of disputes as the result 
of the District Court vacating certain batching requirements in TMA IV. 
The Departments are also revising the expenditures estimated to be made 
by the Departments in carrying out the Federal IDR process from 
approximately $70 million to approximately $56.6 million to reflect a 
reduction in the Departments' anticipated assistance with eligibility 
determinations, as discussed later in this preamble. Collectively, 
these modifications to the methodology result in a finalized 
administrative fee amount of $115 per party per dispute for disputes 
initiated on or after the effective date of these rules. As the 
administrative fee methodology in the IDR Operations proposed rules 
included some of the same elements as the administrative fee 
methodology in the IDR Fees proposed rules, the Departments will 
consider whether any modifications made to the administrative fee 
methodology in these final rules should also be adopted when finalizing 
the administrative fee amount using the methodology proposed in the IDR 
Operations proposed rules.
2. Summary of Comments Received and Responses to Comments
a. Establishing the Administrative Fee in Notice and Comment Rulemaking
    Many commenters supported the proposal to establish the 
administrative fee in notice and comment rulemaking. Commenters stated 
that this transparent process would allow the public to evaluate the 
administrative fee amount and provide feedback on the feasibility of 
providers using the Federal IDR process. However, several commenters 
opposed the proposal to establish the administrative fee amount more or 
less frequently than annually and stated that adopting this proposal 
would introduce uncertainty in the Federal IDR process and would make 
budgeting more challenging. These commenters requested that the 
Departments update the administrative fee annually, to balance 
stability, transparency, and responsiveness, which they stated would 
mitigate the impact of changes to the administrative fee. One commenter 
supported the proposal to establish the administrative fee amount more 
or less frequently than annually, but only if a mid-year change led to 
a decrease to the administrative fee amount. Commenters also stated 
that any increases to the administrative fee amount should be on an 
annual basis with advance notice to interested parties. One of these 
commenters stated that the administrative fee amount should be set 
predictably and with at least 90 days' advance notice. Some commenters 
requested further clarification on the process for proposing and 
finalizing administrative fee amounts in notice and comment rulemaking.
    The Departments agree that one of the goals of establishing the 
administrative fee amount in notice and comment rulemaking is to foster 
transparency and allow interested parties to provide feedback on the 
methodology and process for setting the proposed fee amount. The 
Departments recognize commenters' concerns about establishing the 
administrative fee amount more or less frequently than annually, and 
the Departments are finalizing a policy under which they would 
establish the administrative fee amount no more frequently than once 
per calendar year. In addition, the Departments are finalizing as 
proposed the proposal to change the administrative fee amount less 
frequently than annually if the expenditures estimated to be made by 
the Departments in carrying out the Federal IDR process and the 
estimated total amount of administrative fees paid in the upcoming year 
are estimated to be equal. If the Departments determine that the 
estimated total amount of administrative fees paid in a future year at 
the current administrative fee amount would be less than the 
expenditures estimated to be made by the Departments in carrying out 
the Federal IDR process for that year, the Departments would propose to 
raise the administrative fee amount in notice and comment rulemaking. 
Alternatively, if the Departments determine that the estimated total 
amount of administrative fees paid in a future year at the current 
administrative fee amount would be more than the expenditures estimated 
to be made in carrying out the Federal IDR process for that year, the 
Departments would propose to lower the administrative fee amount in 
notice and comment rulemaking. Consistent with the statute, the 
Departments will set the administrative fee such that the estimated 
total amount of administrative fees paid is equal to the amount of 
expenditures estimated to be made by the Departments in carrying out 
the Federal IDR process.\77\
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    \77\ Section 9816(c)(8)(B) of the Code, section 716(c)(8)(B) of 
ERISA, and section 2799A-1(c)(8)(B) of the PHS Act.
---------------------------------------------------------------------------

    The Departments also reiterate that using the notice and comment 
rulemaking process to establish the administrative fee amount will 
provide interested parties with substantial advance notice of fee 
changes, so additional advance notice is not needed. As described in 
the IDR Fees proposed rules, the Departments will provide details on 
the methodology used to determine the proposed administrative fee 
amount, and the proposed administrative fee amount, if finalized, would 
be effective prospectively. Interested parties will be provided with a 
period to submit public comments on the proposals, and the Departments 
will consider all comments submitted within the comment period in 
developing the final rules.
    In addition, other commenters raised concerns regarding the amount 
of the administrative fee changing between any proposed and final 
rules. One commenter did not support making changes to the 
administrative fee amount between the proposed and final rules, while 
another commenter stated that any such changes should be by no more 
than 10 percent.
    The Departments acknowledge these commenters' suggestions but note 
that the Departments may have more recent data available to estimate 
the total amount of administrative fees paid or the amount of 
expenditures estimated to be made by the Departments in carrying out 
the Federal IDR process while developing the final rules than they had 
while developing the IDR Fees proposed rules, and it is reasonable for 
the Departments to rely on the more recent data in developing the final 
rules, provided that they use the methodology described in the preamble 
to the IDR Fees proposed rules or a methodology modified from the 
preamble to the IDR Fees proposed rules in response to comments. As in 
these final rules, these circumstances may result in the Departments 
finalizing a different administrative fee amount than the amount 
proposed. The finalized

[[Page 88501]]

administrative fee amount will differ from the amount proposed, if 
necessary, to comply with the statutory requirement that the total 
administrative fees paid are estimated to be equal to the amount of 
expenditures estimated to be made by the Departments in carrying out 
the Federal IDR process.\78\
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    \78\ Id.
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    One commenter was concerned about the ability to comment on the 
administrative fee amount rather than just the methodology used to 
calculate the amount and stated that only seeking comment on the 
methodology could inhibit commenters' ability to accurately express the 
impact of the proposed fee amount on a disputing party's access to the 
Federal IDR process.
    As previously explained, the Departments are finalizing a policy to 
establish the administrative fee amount in notice and comment 
rulemaking no more frequently than once per calendar year and will 
provide opportunity for comment on any new proposed administrative fee 
amount, as well as any changes to the methodology used to calculate the 
administrative fee amount.
b. Administrative Fee Methodology--Estimated Total Number of 
Administrative Fees Paid
    Many commenters opposed the Departments' proposed administrative 
fee methodology for estimating the total number of administrative fees 
to be paid. Many commenters suggested that estimating the total number 
of administrative fees paid based on the projected total number of 
disputes closed would not capture all disputes in which administrative 
fees are paid. Some commenters were concerned that this methodology 
could result in an overpayment of administrative fees to the 
Departments. One of these commenters was concerned that the data from 
the six-month period in 2023 used to estimate the number of disputes 
closed would be radically different from 2024 data. Several commenters 
suggested using other metrics to calculate the estimated total number 
of administrative fees paid, including the number of disputes 
initiated, the number of disputes for which a certified IDR entity fee 
was paid, and the number of disputes for which parties submitted 
offers. Moreover, some commenters asserted that using disputes closed 
contradicts the Departments' regulations requiring each party to pay 
the administrative fee at the time the certified IDR entity is selected 
and the Departments' guidance permitting certified IDR entities to 
collect the administrative fee from parties up to the time of offer 
submission.\79\
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    \79\ See 26 CFR 54.9816-8(d)(2)(i), 29 CFR 2590.716-8(d)(2)(i), 
and 45 CFR 149.510(d)(2)(i); see also section 4.8 of the Federal 
Independent Dispute Resolution (IDR) Process Guidance for Certified 
IDR Entities. October 2022. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/federal-independent-dispute-resolution-process-guidance-for-certified-idr-entities.pdf.
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    The Departments proposed to use the projected total number of 
disputes closed to calculate the administrative fee amount because that 
metric reflected collections under current collections processes,\80\ 
and the Departments were of the view that it was a reliable metric upon 
which to base the estimated total number of administrative fees to be 
paid. However, after considering the comments, the Departments agree 
with the commenters who stated that estimating the total number of 
administrative fees paid using the projected number of disputes closed 
would not capture all disputes in which administrative fees are paid 
because administrative fees may be paid for disputes that have not yet 
been closed. To capture all disputes in which parties pay 
administrative fees, the Departments are finalizing the administrative 
fee amount based on a methodology that estimates the total number of 
administrative fees paid by projecting Federal IDR portal data on the 
number of administrative fees paid to certified IDR entities, as 
explained in the subsequent paragraphs. The number of administrative 
fees paid to certified IDR entities is currently the best available 
metric in the Federal IDR portal data to capture all administrative 
fees parties pay for disputes in any stage of the Federal IDR process.
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    \80\ Under current guidance, the administrative fee may be 
collected by certified IDR entities up until the time the parties 
submit their offers, and therefore the administrative fee is not 
collected for all disputes initiated. See, for example, Centers for 
Medicare & Medicaid Services (March 2023). Federal Independent 
Dispute Resolution (IDR) Process Guidance for Certified IDR 
Entities. https://www.cms.gov/files/document/federal-idr-guidance-idr-entities-march-2023.pdf.
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    In the preamble to the IDR Fees proposed rules, the Departments set 
the administrative fee amount based on the projection that 225,000 
disputes would be closed annually. Because both initiating and non-
initiating parties to a dispute are required to pay the administrative 
fee, the Departments estimated in the preamble to the IDR Fees proposed 
rules that 450,000 administrative fees would be paid annually, or 
37,500 per month. As explained above, in setting the administrative fee 
in these final rules, the Departments are using the total number of 
administrative fees paid to certified IDR entities for disputes in any 
stage of the Federal IDR process after certified IDR entity selection. 
Using the methodology being adopted in these final rules, the 
Departments estimate that 492,000 administrative fees will be paid 
annually, or 41,000 administrative fees will be paid per month, by the 
parties. The Departments estimate the total number of administrative 
fees paid annually based on the monthly average number of 
administrative fees paid to certified IDR entities between February 
2023 and July 2023. This monthly average was approximately 41,000, and 
the Departments projected this figure forward by 12 months to estimate 
that 492,000 administrative fees will be paid annually.
    The Departments are using data from the same time period that was 
used in the IDR Fees proposed rules (February 2023 to July 2023), 
without updating to newer data. Data from this time period remains the 
best available data to project future trends due to portal closures and 
other Federal IDR process changes that began in August 2023 due to the 
TMA III and TMA IV opinions and orders. While the Departments 
considered using data from the most recent six-month period prior to 
the finalization of this rule (June 2023 to November 2023), they 
concluded this would inaccurately reflect the monthly average number of 
administrative fees paid, as various aspects of the Federal IDR process 
were temporarily suspended from August 4, 2023 to October 6, 2023 for 
all disputes.\81\
---------------------------------------------------------------------------

    \81\ Of note, batched disputes and single disputes involving air 
ambulance services also remained suspended after October 6, 2023 and 
would not be reflected in the most recent data.
---------------------------------------------------------------------------

    The Departments considered comments providing alternatives for 
estimating the total number of administrative fees paid in calculating 
the administrative fee amount. Some commenters wanted the Departments 
to estimate the total number of administrative fees paid based on the 
number of disputes initiated. This metric is inaccurate for purposes of 
calculating the administrative fee amount because the administrative 
fee may not be collected for all disputes initiated. The obligation for 
parties to pay the administrative fee attaches at the time of certified 
IDR entity selection (with guidance permitting certified IDR entities 
to collect the administrative fee from parties until the time of offer 
submission). Therefore, if a dispute is withdrawn before selection of 
the certified IDR entity, there is no obligation for the parties to pay

[[Page 88502]]

administrative fees for that dispute. For this reason, using the total 
number of disputes initiated to estimate the number of administrative 
fees to be paid in the administrative fee methodology risks the 
Departments underfunding the Federal IDR process.\82\
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    \82\ In the IDR Operations proposed rules, the Departments 
proposed to use the total volume of disputes projected to be 
initiated because the proposed operational changes in those rules, 
if finalized, would result in the Departments' collection of 
administrative fees closer to a dispute's date of initiation, and 
therefore, it may be appropriate to estimate the total volume of 
administrative fees paid using the total volume of disputes 
initiated. 88 FR 75793.
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    Other commenters requested the Departments to estimate the total 
number of administrative fees paid based on the number of disputes for 
which a certified IDR entity fee was paid. Because parties are not 
required to pay their certified IDR entity fees and administrative fees 
at the same time, the number of certified IDR entity fees paid would 
not necessarily reflect the number of administrative fees paid. 
Therefore, this metric would also be inaccurate for purposes of 
calculating the administrative fee amount.
    Finally, the Departments also considered estimating the total 
number of administrative fees paid based on the number of disputes for 
which parties submitted offers. However, the Departments did not 
believe this metric would accurately reflect the estimated number of 
administrative fees that would be paid, since parties may pay 
administrative fees without submitting offers. Thus, the metric could 
understate the total number of administrative fees paid.
    In summary, the Departments are of the view that it is most 
accurate to use the total number of administrative fees paid to 
certified IDR entities in the administrative fee methodology rather 
than the other metrics suggested by commenters in the prior paragraphs, 
as this metric reflects actual administrative fees that have been paid 
for disputes in any stage of the Federal IDR process after certified 
IDR entity selection.\83\ Therefore, in recognition of commenters' 
concerns about a methodology that could underestimate the total number 
of administrative fees paid in 2024, resulting in an overestimate of 
the amount of the administrative fee needed for 2024, the Departments 
are establishing the administrative fee methodology using the total 
number of administrative fees paid to certified IDR entities, rather 
than the total number of closed disputes, to estimate the total number 
of administrative fees paid in 2024.
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    \83\ As explained in these final rules, under current processes, 
the total volume of administrative fees paid to certified IDR 
entities is the best metric to use in the administrative fee 
methodology to align with statute requiring the Departments to 
estimate the total number of administrative fees paid. As operations 
of the Federal IDR process improve over time, the Departments will 
consider changes to the methodology to best estimate the total 
number of administrative fees paid.
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    The Departments also received comments regarding the Departments' 
projections of the total number of closed disputes used to estimate the 
total number of administrative fees paid. Several commenters suggested 
that the Departments' estimate of 225,000 closed disputes is too low. A 
few commenters suggested that the Departments are underestimating 
utilization of the Federal IDR process and recommended that the 
Departments analyze the available data from States implementing similar 
policies before the No Surprises Act.
    In the IDR Fees proposed rules, the Departments estimated that 
225,000 disputes would be closed annually, and because both the 
initiating and non-initiating parties to a dispute are required to pay 
the administrative fee, 450,000 administrative fees would be paid 
annually. The Departments now estimate that 492,000 administrative fees 
will be paid to certified IDR entities in the year, as described 
earlier in this preamble section. The Departments continue to be of the 
view that Federal IDR process data is the best available data to 
project trends in the Federal IDR process, especially because 
regulations and volume differ in State IDR processes. As mentioned in 
the IDR Fees proposed rules, the Departments initially anticipated 
17,333 disputes involving non-air ambulance services would be initiated 
during the first year of implementation of the Federal IDR process. The 
Departments developed this estimate based on the experience of New York 
State. However, the use of State data resulted in the Departments 
underestimating utilization of the Federal IDR process, as nearly 
335,000 disputes were initiated in the Federal IDR process between 
April 2022 and March 2023.\84\ As demonstrated by this result, past 
data from State processes has limited applicability in predicting 
future use of the Federal IDR process. For this reason, the Departments 
are of the view that it is better to use Federal IDR process data 
rather than State data to estimate the total number of administrative 
fees paid.
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    \84\ Centers for Medicare & Medicaid Services (April 27, 2023). 
Federal Independent Dispute Resolution Process--Status Update. 
https://www.cms.gov/files/document/federal-idr-processstatus-update-april-2023.pdf.
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    In addition, several commenters disagreed with the Departments' 
assumption of a 25 percent reduction in the volume of disputes in 
estimating the total number of administrative fees paid to account for 
the impact of TMA IV's vacatur of batching regulations and guidance, or 
asked for more detail on how the projected 25 percent reduction factor 
was determined, including the details on how the batching of claims 
will be treated in the future. One commenter noted that the vacatur of 
the $350 administrative fee amount and batching regulations as a result 
of TMA IV allows many additional claims to become economically viable, 
so the Departments should expect dispute volume to increase. Another 
commenter stated that the Departments cannot know with certainty that 
the TMA IV opinion and order will decrease the number of disputes. This 
commenter also asserted that TMA IV did not affect the batching 
criteria that serve as the largest obstacle for emergency medicine, and 
therefore there will not be large batches in emergency medicine, which 
the commenter noted comprised over 70 percent of disputes reflected in 
the Partial Report on the Independent Dispute Resolution (IDR) Process 
October 1-December 31, 2022.\85\ Moreover, a few commenters suggested 
that the TMA III opinion and order will increase dispute volume as 
providers will continue to see low QPAs from plans and issuers and will 
rely on the Federal IDR process for appropriate payment. One commenter 
agreed with the Departments' assumption that the TMA IV opinion and 
order will decrease the volume of disputes but disagreed with the 
Departments' rationale that the increased number of line items will 
take more time to close. This commenter expected that providers 
batching claims rather than submitting claims individually would 
increase efficiencies in the Federal IDR process.
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    \85\ U.S. Department of Health and Human Services, U.S. 
Department of Labor, U.S. Department of the Treasury. Partial Report 
on the Independent Dispute Resolution (IDR) Process October 1-
December 31, 2022. https://www.cms.gov/files/document/partial-report-idr-process-octoberdecember-2022.pdf.
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    After reviewing the comments, the Departments have reconsidered the 
assumption that the number of disputes will decrease by 25 percent as a 
result of TMA IV's vacatur of batching regulations and guidance. 
Therefore, the Departments are not finalizing the projected 25 percent 
reduction in the estimated total number of administrative fees paid.
    The Departments recognize that certain batching criteria remain in 
place,

[[Page 88503]]

such as criteria that impact the batching of emergency medicine claims, 
and items and services included in such claims will have to be 
submitted as separate disputes if they do not comply with the 
applicable batching criteria.\86\ Moreover, because the Departments are 
finalizing the administrative fee amount based on a methodology that 
estimates the total number of administrative fees paid based on the 
total number of administrative fees paid to certified IDR entities, 
rather than the total number of closed disputes, the methodology no 
longer requires the Departments to make an assumption on whether 
batched disputes will take more time to close after the vacatur of the 
batching regulations as a result of TMA IV. In addition, the 
Departments do not have data available to support commenters' assertion 
that TMA III will lead more providers to rely on the Federal IDR 
process for appropriate claims payment. Plans and issuers are required 
to calculate QPAs using a good faith, reasonable interpretation of the 
applicable statutes and regulations that remain in effect after the TMA 
III opinion and order.\87\ Furthermore, in their experience operating 
the Federal IDR process, the Departments have not seen a clear or 
quantifiable relationship between changes in policy and changes in the 
number of disputes initiated. The Departments are of the view that the 
historical data from February 2023 to July 2023 is the best available 
data at this time to project utilization of the Federal IDR process in 
2024, and the Departments are therefore finalizing the administrative 
fee amount based on a methodology that does not include a 25 percent 
reduction in the volume of disputes.
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    \86\ U.S. Department of Health and Human Services, U.S. 
Department of Labor, U.S. Department of Treasury, Office of 
Personnel Management (October 6, 2023). FAQs about Consolidated 
Appropriations Act, 2021 Implementation Part 62. https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-62.pdf and https://www.cms.gov/files/document/faqs-part-62.pdf.
    \87\ Id.
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c. Administrative Fee Methodology--Estimated Expenditures
    The Departments also received comments related to their estimated 
expenditures for purposes of calculating the administrative fee amount. 
Several commenters suggested that the Departments should disclose more 
data supporting the estimated costs to carry out the Federal IDR 
process in the administrative fee methodology to provide the public 
with an opportunity to comment. Some of these commenters asserted that 
the IDR Fees proposed rules did not provide enough detail on the 
estimated expenditures to allow interested parties to provide 
meaningful comment on the proposed administrative fee amount. One 
commenter urged the Departments to establish a regular process for 
detailing the Departments' data on the administrative fee, including an 
annual disclosure statement with a balance sheet, to promote 
transparency and predictability. A few commenters disputed the 
Departments' reference that Freedom of Information Act (FOIA) 
regulations prevent the Departments from providing detail on certain 
estimated expenditure amounts. These commenters stated that without 
this transparency, interested parties were not afforded an opportunity 
to meaningfully comment on the proposals related to the administrative 
fee amount and methodology inputs.
    The Departments are finalizing the administrative fee amount based 
on a methodology that divides the ``estimated,'' rather than 
``projected,'' expenditures to carry out the Federal IDR process by the 
estimated total number of administrative fees to be paid in the year. 
The use of ``estimated'' rather than ``projected'' expenditures is to 
ensure the terminology used to describe the methodology is consistent 
with that of the statutory text.\88\ To calculate the estimated 
expenditures to carry out the Federal IDR process, the Departments 
included the Federal resources needed to carry out the Federal IDR 
process, such as future personnel and contract costs. The preamble to 
the IDR Fees proposed rules provided an overview of the future contract 
costs and Federal resources included in the estimated expenditures and 
explained that the estimated expenditures to carry out the Federal IDR 
process in 2024 were approximately $70 million. The Departments 
disagree with commenters that the Departments did not provide 
sufficient information to allow meaningful comment. In particular, in 
the preamble to the IDR Fees proposed rules, the Departments provided 
details on the types of costs that are included in the estimated 
expenditures.\89\
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    \88\ Section 9816(c)(8)(B) of the Code, section 716(c)(8)(B) of 
ERISA, and section 2799A-1(c)(8)(B) of the PHS Act.
    \89\ 88 FR 65893.
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    While the Departments described the contract costs and Federal 
resources associated with estimated expenditures to carry out the 
Federal IDR process in the preamble to the IDR Fees proposed rules, in 
response to comments requesting additional specifics on the estimated 
expenditures and in an effort to promote transparency, the Departments 
are providing further detail on costs included in the total estimated 
expenditures in these final rules within the bounds of the Departments' 
ability to disclose these amounts. To avoid releasing sensitive 
contract information, the Departments are breaking down the costs, 
which include the future contract and Federal personnel costs, by 
category of expenditure, and providing approximate cost estimates for 
carrying out the following categories of Federal IDR process 
activities: \90\
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    \90\ As discussed further later in this preamble section, the 
Departments have reconsidered costs associated with total estimated 
expenditures of carrying out the Federal IDR process and are 
revising the total estimated expenditures for 2024 from 
approximately $70 million to approximately $56.6 million. 
Additionally, certain expenses apply across multiple categories that 
were included in the IDR Fees proposed rules. This revised 
combination of categories better provides a meaningful cost estimate 
of these activities.
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     Maintaining, operating, and improving the Federal IDR 
portal, certifying IDR entities, and collecting data from certified IDR 
entities (approximately $26,360,000);
     Conducting program integrity activities, such as certain 
QPA audits (as further described subsequently in this preamble) and IDR 
decision audits, and receiving and investigating Federal IDR process-
related complaints (approximately $13,060,000, of which QPA audits 
resulting from complaints filed by providers, facilities, or providers 
of air ambulance services comprise approximately $5,000,000);
     Providing outreach to parties and technical assistance to 
certified IDR entities, including assisting with eligibility 
determinations when the volume of disputes submitted exceeds the 
capacity of certified IDR entities to perform those determinations 
(approximately $11,630,000, of which assisting with eligibility 
determinations comprises approximately $10,000,000); \91\ and
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    \91\ Centers for Medicare & Medicaid Services (November 21, 
2022). Notice of the Federal Independent Dispute Resolution (IDR) 
Team Technical Assistance to Certified Independent Dispute 
Resolution Entities (IDREs) in the Dispute Eligibility Determination 
Process. https://www.cms.gov/files/document/idre-eligibility-support-guidance-11212022-final-updated.pdf.
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     Collecting administrative fees (approximately $5,530,000), 
which includes costs to invoice certified IDR entities for 
administrative fees collected, provide the system infrastructure for 
certified IDR entities to record and remit administrative fees 
collected, track data on fees collected and make continuous 
improvements to the collections process and invoicing systems.

[[Page 88504]]

    The Departments are publishing summary-level estimated budget 
information and have provided meaningful data for public input for the 
purposes of calculating the administrative fee amount. The Departments 
intend to continue to provide data on the Federal IDR process to 
promote transparency and predictability in the administrative fee 
amount, including publishing quarterly public reports with the 
Departments' expenditures and administrative fee collections.\92\
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    \92\ See, e.g., U.S. Department of Health and Human Services, 
U.S. Department of Labor, U.S. Department of the Treasury. Initial 
Report on the Independent Dispute Resolution (IDR) Process April 15-
September 30, 2022. https://www.cms.gov/files/document/initial-report-idr-april-15-september-30-2022.pdf. U.S. Department of Health 
and Human Services, U.S. Department of Labor, U.S. Department of the 
Treasury. Partial Report on the Independent Dispute Resolution (IDR) 
Process October 1-December 31, 2022. https://www.cms.gov/files/document/partial-report-idr-process-octoberdecember-2022.pdf.
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    In response to commenters' concerns regarding the Departments' 
reference to the applicability of FOIA exemptions to information shared 
during the rulemaking process, the Departments clarify that they will 
disclose information in response to any requests in accordance with the 
FOIA and accompanying regulations. However, the Departments are not 
publishing specific future contract estimates in this rule in response 
to commenters' requests for more detail on estimated expenditures of 
Federal IDR process activities and the data underlying those estimates 
because publishing those contract estimates could undermine future 
contract procurements. For example, if the Departments were to publish 
the projected future cost of the contracts used to maintain the Federal 
IDR portal, the Federal Government would be meaningfully disadvantaged 
in future contract negotiations related to the Federal IDR portal, as 
bidders would know how much the Departments anticipate such a future 
contract being worth. Although current contract awards are published 
and publicly available,\93\ these award amounts do not necessarily 
reflect the future value of the contract, as there may be future 
changes in policy and operations and the scope of work.
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    \93\ Available at www.sam.gov.
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    The Departments are of the view that interested parties had 
sufficient information to meaningfully comment on the IDR Fees proposed 
rules. For example, commenters provided valuable information in their 
comments regarding how the Departments should estimate the total number 
of administrative fees paid. Based on these comments, the Departments 
modified the methodology accordingly. Similarly, the Departments 
provided detailed information in the IDR Fees proposed rules on their 
calculation of the estimated expenditures to carry out the Federal IDR 
process. Specifically, the Departments detailed the types of activities 
included in estimating the annual expenditures of approximately $70 
million and received comments on these activities. After considering 
comments received on these details of the administrative fee 
methodology, the Departments have revised this estimate of annual 
expenditures down to approximately $56.6 million, as explained in later 
paragraphs.
    In addition, many commenters raised concerns about the inclusion of 
certain types of expenses in the administrative fee methodology. 
Several commenters recommended excluding all or some of the QPA audit 
costs given that the QPA also serves a purpose outside of the Federal 
IDR process in calculating patient cost sharing. Some commenters asked 
the Departments to disclose their total expenditures on QPA audits and 
the portion proposed to be funded by administrative fees compared to 
other sources.
    As previously mentioned, the Departments are required to include 
estimated expenditures to carry out the Federal IDR process, which 
include contract costs and Federal resources, in calculating the 
administrative fee amount. Accordingly, the Departments disagree with 
commenters who suggested that QPA audit costs should not be included in 
the calculation of the administrative fee amount and are adopting an 
administrative fee methodology that includes certain QPA audit costs in 
the estimated expenditures. For any dispute in the Federal IDR process, 
a plan or issuer would have been required to disclose the QPA to the 
provider along with the initial payment or notice of denial of payment 
for items and services, and disputing parties must include the QPA for 
items and services when initiating a dispute. Certified IDR entities 
are required to consider the QPA when selecting between the offers 
submitted by disputing parties when determining the total out-of-
network payment rate for items and services subject to the Federal IDR 
process.\94\
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    \94\ Section 9816(c)(5)(C)(i)(I) of the Code, section 
716(c)(5)(C)(i)(I) of ERISA, and section 2799A-1(c)(5)(C)(i)(I) of 
the PHS Act.
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    Furthermore, it is the responsibility of the Departments (or the 
applicable State authorities), rather than the provider, facility, 
provider of air ambulance services, or the certified IDR entity, to 
monitor plan and issuer compliance with the QPA requirements.\95\ To 
date, the Departments have only conducted audits as part of 
investigations of complaints, and anticipate continuing to conduct 
these risk-based audits in the future, though the No Surprises Act 
permits the Departments to conduct random and risk-based audits.\96\ 
Given the role of the QPA in the Federal IDR process and the direct 
impact on providers, performing audits on plans and issuers in response 
to allegations that the plan's or issuer's QPAs are inaccurate is 
necessary to carry out the Federal IDR process and promotes the 
integrity of and confidence in the Federal IDR process.
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    \95\ Section 9816(a)(2)(A)(i) of the Code, section 716(a)(2)(A) 
of ERISA, and section 2799A-1(a)(2)(A)(i) of the PHS Act. See also 
86 FR 36899. However, a provider or facility may always assert to 
the certified IDR entity that additional information points in favor 
of the selection of its offer as the out-of-network payment amount, 
even where that offer is for a payment amount that is different from 
the QPA. 87 FR 52627.
    \96\ Section 9816(a)(2)(A)(ii) of the Code, and section 2799A-
1(a)(2)(A)(ii) of the PHS Act. The July 2021 interim final rules 
describe the enforcement responsibilities for each Department and 
OPM. 86 FR 36899 (July 13, 2021). https://www.federalregister.gov/documents/2021/07/13/2021-14382/requirements-related-to-surprise-billing-part-i.
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    Moreover, addressing concerns about inaccurately calculated QPAs 
helps to ensure plans and issuers provide correctly calculated QPAs 
when they participate in the Federal IDR process. For example, in the 
absence of QPA audits to investigate complaints from providers, 
facilities, and providers of air ambulance services that one or more of 
a plan's or issuer's QPAs are inaccurate, plan and issuer compliance 
with QPA requirements would go unchecked.\97\ Certified IDR entities 
must consider the relevant QPA in making each payment determination 
under the No Surprises Act,\98\ and unchecked QPAs would significantly 
threaten the integrity of QPAs and the payment determinations made by 
certified IDR entities. These audits help to increase transparency into 
the QPA calculation methodology and encourage compliance among plans 
and issuers. Accordingly, QPA audits are an integral part of the 
Federal IDR process, the costs of which are reasonably included in the 
calculation of the administrative fee amount.
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    \97\ The accuracy of a plan's or issuer's QPA (or QPA 
methodology) may not be reviewed within a payment determination 
under the Federal IDR process. See 86 FR 55996.
    \98\ Section 9816(c)(5)(C)(i)(I) of the Code, section 
716(c)(5)(C)(i)(I) of ERISA, and section 2799A-1(c)(5)(C)(i)(I) of 
the PHS Act.

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[[Page 88505]]

    In estimating the expenditures to carry out the Federal IDR 
process, the Departments are including estimated costs only for certain 
QPA audits that the Departments anticipate incurring to investigate 
complaints regarding inaccurate QPAs made by providers, facilities, and 
providers of air ambulance services under the Federal IDR process. The 
Departments are not including the costs of QPA audits conducted: (1) in 
connection with Department of Labor, OPM, or Department of the Treasury 
investigations; (2) randomly; or (3) in response to complaints from 
consumers, as not all of these audits are necessarily related to the 
Federal IDR process. The Departments are of the view that only the 
costs related to QPA audits conducted in response to complaints from 
entities that are potential parties to a payment determination are 
sufficiently related to the Federal IDR process to justify their 
inclusion in the administrative fee calculation. For example, consumers 
who complain that a plan or issuer inaccurately calculated their cost 
sharing based on an erroneously calculated QPA will not be involved in 
the Federal IDR process, and therefore the costs of such audits are 
appropriately excluded from those costs supported by administrative 
fees paid by parties to the Federal IDR process. Because HHS is 
primarily responsible for the implementation of the Federal IDR 
process, the Departments view similarly random QPA audits that may be 
conducted by the Departments, as well as any QPA audits in connection 
with Department of Labor, OPM, and Department of the Treasury 
investigations.
    The costs of HHS conducting QPA audits for complaints that a plan's 
or issuer's QPAs are inaccurate are estimated to be approximately 
$5,000,000 in 2024. As plans and issuers improve their compliance in 
calculating QPAs correctly, the Departments anticipate that the costs 
of conducting these audits will decrease, which would be reflected in 
the estimated expenditures used to determine future administrative fee 
amounts.
    Several commenters also disagreed with including costs associated 
with assisting with eligibility reviews in the estimated expenditures 
to carry out the Federal IDR process. A few of these commenters noted 
that certified IDR entities are responsible for conducting eligibility 
reviews and therefore certified IDR entity fees should cover this cost. 
Some commenters asserted that such costs should be recovered through 
the non-prevailing party's certified IDR entity fee, as the eligibility 
determination is part of the payment determination. One of these 
commenters expressed concern that including this expense would 
incentivize certified IDR entities to understaff as HHS would intervene 
to address a staffing shortage.
    The Departments disagree that the costs of assisting with 
eligibility determinations should be excluded from estimated 
expenditures. Certified IDR entities voluntarily participate in the 
Federal IDR process and set their certified IDR entity fees within 
ranges established by the Departments to ensure they remain financially 
viable and that such fees can cover their operating expenses to 
participate in the Federal IDR process, which include the costs 
incurred in determining the eligibility of items and services for the 
Federal IDR process. While certified IDR entities are responsible for 
making eligibility determinations, and therefore incur costs associated 
with this activity, the Departments have also incurred costs since 
November 2022 to assist certified IDR entities in making these 
determinations by performing research and outreach on disputes pending 
eligibility determinations, including identifying and obtaining 
information necessary for certified IDR entities to make eligibility 
determinations, and will continue to incur such costs in 2024.\99\ The 
Departments disagree with the commenter that stated that the 
Departments' assistance would incentivize certified IDR entities to 
understaff. Certified IDR entities could not have reasonably predicted 
the amount of personnel they would need to make eligibility 
determinations within the required timeframe given the extremely high 
volume of disputes. Moreover, it has been difficult for certified IDR 
entities to make staffing adjustments in response to utilization of the 
Federal IDR process due to the repeated temporary pauses in the Federal 
IDR portal resulting from litigation matters and changes in operations.
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    \99\ Centers for Medicare & Medicaid Services (November 21, 
2022). Notice of the Federal Independent Dispute Resolution (IDR) 
Team Technical Assistance to Certified Independent Dispute 
Resolution Entities (IDREs) in the Dispute Eligibility Determination 
Process. https://www.cms.gov/files/document/idre-eligibility-support-guidance-11212022-final-updated.pdf.
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    When the Departments first developed the Federal IDR process and 
the rules and guidance establishing how certified IDR entities were to 
calculate their fees for the scope of work they were expected to 
perform, the Departments and the certified IDR entities did not 
anticipate the significant difficulty and costs involved in determining 
eligibility for the Federal IDR process. After six months of operating 
the Federal IDR process and receiving feedback from disputing parties 
and certified IDR entities, the Departments determined that it was 
necessary to assist certified IDR entities with determining eligibility 
through performing research and outreach on disputes pending 
eligibility determinations, including identifying and obtaining 
information necessary to make an eligibility determination.\100\ The 
Departments determined that this course of action was necessary when it 
became clear that eligibility determinations were taking significantly 
longer than the Departments had anticipated.
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    \100\ The Departments are providing technical assistance 
regarding eligibility but are not making eligibility determinations, 
as, under current regulations, only certified IDR entities may make 
eligibility determinations. Id.
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    In the IDR Operations proposed rules, the Departments proposed 
several policies aimed at improving communication between the parties 
that would make eligibility determinations less burdensome for 
certified IDR entities and speed up the Federal IDR process, as well as 
allow the Departments to make eligibility determinations under 
extenuating circumstances.\101\ However, these policies, if finalized, 
will take time to implement. In the interim, the Departments are 
working to balance feedback from interested parties asking the 
Departments to increase the efficiency of the Federal IDR process and 
decrease the backlog of disputes with other feedback asking the 
Departments to minimize expenditures and avoid increases to the 
administrative fee. The Departments have also received comments urging 
them to shorten the time it takes for payment determinations to be 
reached. The Departments continue to believe that some level of 
assistance is necessary to address the high volume of disputes 
submitted and the backlog of disputes, due in part to the closing and 
reopening of the Federal IDR process to make necessary systems updates 
in light of the TMA III and TMA IV opinion and orders.
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    \101\ 88 FR 75744.
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    However, after reviewing comments, the Departments have 
reconsidered the amount of estimated costs associated with pre-
eligibility reviews that should be included in the estimated 
expenditures to carry out the Federal IDR process in calendar year 
2024. In estimating the expenditures of approximately $70 million in 
the IDR

[[Page 88506]]

Fees proposed rules, the Departments included an increase in costs to 
reflect the Departments taking on a greater role in assisting with 
eligibility determinations to improve the efficiency of the Federal IDR 
process.\102\ Based on comments received urging the Departments to 
avoid increasing the administrative fee, the Departments will not take 
on a greater role in broadly assisting certified IDR entities with 
eligibility determinations at this time. Instead, the Departments will 
limit their assistance with eligibility determinations to more complex 
disputes, such as disputes where there is missing information to 
determine Federal versus State jurisdictions in a State with a 
specified State law. This approach will ensure efficient use of the 
Departments' resources by leveraging the Departments' assistance and 
expertise in handling pre-eligibility reviews for disputes that 
certified IDR entities may need to spend more time on, such as disputes 
for which information was limited due to the systems in place when 
those disputes were initiated, and will allow certified IDR entities to 
focus on moving disputes through the Federal IDR process. Furthermore, 
this will allow the Departments to keep the costs of assisting with 
eligibility determinations lower in 2024 such that the expenditures 
estimated to be made by the Departments to carry out the Federal IDR 
process are now estimated to be approximately $56.6 million in 2024. 
The total estimated expenditures in the IDR Fees proposed rules 
included approximately $20 million for the Departments to assist with 
eligibility determinations via conducting research and outreach. The 
estimated cost of assisting with eligibility determinations in 2024, as 
used to calculate the administrative fee as finalized, is approximately 
$10 million.
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    \102\ While there is an implementation appropriation, the 
initial appropriation of $500 million in the CAA is finite and only 
remains available until expended through 2024. Moreover, the 
Departments note that additional mandatory funding for the Federal 
IDR process has not been appropriated beyond the initial $500 
million made available in the CAA. However, the Departments cannot 
rely on budget requests or on appropriations enacted by Congress 
when calculating this fee. The statute requires the fee to be set at 
an amount such that the total amount of fees paid is estimated to be 
equal to the amount of expenditures estimated to be made by the 
Departments in carrying out the Federal IDR process.
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    Furthermore, the Departments do not anticipate that the decision to 
focus their assistance with pre-eligibility reviews on more complex 
disputes and the revised administrative fee amount finalized in these 
rules will impact the fees certified IDR entities choose to charge. 
Given the backlog of disputes, utilization of the Federal IDR process 
strains the current capacity of certified IDR entities to make timely 
determinations. While the Departments' assistance with eligibility 
determinations is currently helping to alleviate the backlog of 
disputes, certified IDR entities' operating expenses are not expected 
to decrease as a result. If the Departments are able to decrease their 
assistance with eligibility determinations, the costs of pre-
eligibility reviews would decrease, which would be reflected in the 
estimated expenditures used to determine future administrative fee 
amounts.
    In addition, some commenters disagreed with including the costs of 
investigating complaints of non-compliance in the administrative fee 
methodology. Commenters asked for clarity in the ``investigating 
relevant complaints'' expense and asserted that ``relevant'' complaints 
beyond the Federal IDR process would be inappropriate to include in the 
calculation of the administrative fee amount. A few of these commenters 
suggested that the party found to be non-compliant should bear the 
costs of the investigation and asked the Departments to publicly report 
summary data on these investigations and the costs covered by non-
compliant parties compared to those covered by administrative fees. One 
commenter suggested that the investigation of complaints related to 
violations of the No Surprises Act should be funded by a congressional 
appropriation as these are largely unrelated to the Federal IDR 
process.
    The Departments clarify that the complaints costs included in the 
estimated expenditures in the administrative fee methodology only 
include costs associated with receiving and investigating Federal IDR 
process-related complaints. For example, such costs include 
investigating complaints within the Departments' jurisdiction regarding 
the failure of a non-prevailing party to pay the payment determination 
amount to the prevailing party within 30 days of the certified IDR 
entity's payment determination as required by the No Surprises 
Act.\103\ Complaints costs do not include costs for complaints that are 
not related to the Federal IDR process, such as those related to the 
QPA for patient cost sharing. Therefore, the Departments are of the 
view that those costs are appropriate to include in the administrative 
fee methodology and are necessary to ensure compliance with the Federal 
IDR process.\104\
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    \103\ Section 9816(c)(6) of the Code, section 716(c)(6) of 
ERISA, and section 2799A-1(c)(6) of the PHS Act.
    \104\ While there is an implementation appropriation, the 
initial appropriation of $500 million in the CAA is finite and only 
remains available until expended through 2024. Moreover, the 
Departments note that additional mandatory funding for the Federal 
IDR process has not been appropriated beyond the initial $500 
million made available in the CAA. The Departments are unable to 
appropriate this funding themselves, although they have made 
numerous requests to Congress for additional funding, and therefore 
this is not a reliable source of Federal IDR process funding.
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    Many commenters suggested that the Departments consider other 
funding sources besides the administrative fee to fund expenditures. 
Several commenters suggested that implementing penalties could help 
fund expenditures, including penalties for submitting ineligible 
disputes, failing to comply with disclosure obligations, or delaying 
the Federal IDR process. Some commenters suggested the CAA's $500 
million appropriation to implement the No Surprises Act should cover at 
least a portion of the Departments' estimated expenditures. One 
commenter asked for confirmation that the implementation appropriation 
has been exhausted fully and suggested requesting additional funds from 
Congress in upcoming budget requests to support the funding of the 
Departments' ongoing implementation. Another commenter asserted that 
the administrative fee methodology set forth in the IDR Fees proposed 
rules did not take into account any appropriations funding.
    As required by the No Surprises Act,\105\ both parties to a dispute 
must pay an administrative fee for participating in the Federal IDR 
process. By statute, the administrative fee amount must be calculated 
such that the total amount of fees paid for a year is estimated to be 
equal to the amount of expenditures estimated to be made by the 
Departments for such year in carrying out the Federal IDR process. 
While the CAA appropriated $500 million to remain available until 
expended through 2024 for preparing regulations, guidance, and reports, 
collecting data, conducting audits and enforcement activities,\106\ and

[[Page 88507]]

establishing and initially implementing the No Surprises Act and Title 
II Transparency provisions through calendar year 2024, this finite 
appropriation is not solely for the Federal IDR process. Additionally, 
while the Fiscal Year 2024 President's budget included another $500 
million appropriation request for the continued implementation of the 
No Surprises Act and Title II Transparency provisions, the 
administrative fee amount finalized in these rules must still be 
consistent with the statutory requirement to set the administrative fee 
amount such that the total amount of administrative fees paid is 
estimated to be equal to the amount of expenditures estimated to be 
made by the Departments in carrying out the Federal IDR process. As a 
result, when calculating this fee, the Departments cannot rely on 
budget requests or on appropriations enacted by Congress.
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    \105\ Section 9816(c)(8)(A) of the Code, section 716(c)(8)(A) of 
ERISA, and section 2799A-1(c)(8)(A) of the PHS Act.
    \106\ As previously explained in the preamble to these final 
rules, the Departments may conduct random or risk-based QPA audits. 
The Departments consider it appropriate to include some of the costs 
of conducting risk-based QPA audits resulting from complaints filed 
by providers, facilities, or providers of air ambulance services 
alleging that the QPA was inaccurate as expenditures made in 
carrying out the Federal IDR process, and therefore include the 
costs of conducting these audits in estimating the expenditures made 
by the Departments in carrying out the Federal IDR process. Other 
audit costs, such as the QPA audits conducted in connection with 
Department of Labor, OPM, or Department of Treasury investigations; 
audits conducted randomly; or audits conducted in response to 
complaints from consumers regarding QPAs may be funded using other 
appropriations, as applicable.
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    In addition, commenters urged the Departments to consider 
strategies to decrease utilization of the Federal IDR process, decrease 
administrative burden, increase the efficiency of the Federal IDR 
process, and ultimately reduce the cost of administering the Federal 
IDR process. Examples of commenters' suggestions include enforcing 
disclosure requirements, requiring plans and issuers to include 
remittance advance remark codes (RARCs) at the time of initial claim 
determination, easing batching requirements, disincentivizing bad faith 
conduct, making improvements to the Federal IDR portal, and 
implementing a required initial payment amount for out-of-network 
emergency services. Several commenters suggested that the volume of 
ineligible disputes and the cost of conducting eligibility reviews 
would be reduced or eliminated if the Departments enforced disclosure 
requirements or required plans and issuers to provide adequate 
information for providers to determine whether a claim is eligible for 
the Federal IDR process. One commenter suggested that plans and issuers 
should cover the cost of eligibility reviews when they fail to inform 
the provider of eligibility for the Federal IDR process. Another 
commenter suggested that the cost of eligibility reviews should be 
assessed to the party that challenges eligibility as this cost would be 
avoidable if the plan or issuer provided sufficient information. One 
commenter suggested that the Departments could reduce the 
administrative burden of the Federal IDR process by contracting with an 
established claims processing clearinghouse that currently possesses 
the capabilities to perform real-time eligibility determinations to 
create an in-portal eligibility validation process.
    The Departments continue to consider improvements to the Federal 
IDR process and recently published the IDR Operations proposed 
rules,\107\ which include policies aimed at reducing the volume of 
ineligible disputes, establishing additional disclosure requirements 
(such as requiring plans and issuers to use approved claim adjustment 
reason codes (CARCs) and RARCs), incentivizing good faith conduct with 
respect to open negotiation and exchange of information, and otherwise 
improving the Federal IDR process. Overall, these policies would, if 
finalized, support efficiency in Federal IDR process operations and 
reduce the cost of administering the Federal IDR process in the future.
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    \107\ 88 FR 75744.
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    Recognizing that the cost of certifying IDR entities is included in 
the administrative fee methodology, one commenter sought clarity on how 
the methodology considers efficiencies gained from certifying more IDR 
entities to make payment determinations and therefore reduce the 
backlog.
    The Departments note that the benefits of certifying new IDR 
entities will be achieved over time, as new certified IDR entities 
acclimate to the process and increase the speed at which they move 
disputes through the Federal IDR process. As efficiencies in the 
Federal IDR process are adopted over time, the expenditures required to 
carry out the Federal IDR process could decrease, exerting downwards 
pressure on the administrative fee amount. If any of these situations 
results in changes to the data used to calculate the administrative fee 
amount, the Departments intend to take these changes into consideration 
when establishing the administrative fee amount in the future.
d. Administrative Fee Methodology--Other Comments
    The Departments sought comments on whether, when calculating the 
administrative fee amount in future years, they should apply an 
inflationary adjustment, such as the consumer price index for all urban 
consumers (CPI-U), to the amount of estimated expenditures to be made 
by the Departments in carrying out the Federal IDR process. A few 
commenters supported using an inflationary adjustment, such as the CPI-
U, to adjust the administrative fee amount in future years. Other 
commenters opposed this approach, stating that it would not necessarily 
correlate with the Departments' expenditures to operate the Federal IDR 
process and may not align with the established methodology of dividing 
the Departments' estimated expenditures by the estimated total number 
of administrative fees to be paid. Another commenter stated that this 
proposal would be unnecessary if the Departments finalize the proposal 
to establish the administrative fee amount more or less frequently than 
annually. Finally, another commenter asked the Departments to revisit 
this proposal when data are more predictable after implementing planned 
improvements to the Federal IDR process.
    Upon consideration of the comments, the Departments are not 
finalizing the use of an inflationary adjustment, such as the CPI-U, to 
adjust the administrative fee amount in future years. The Departments 
agree with commenters that the CPI-U may not correlate with projected 
increases in the Departments' estimated expenditures to carry out the 
Federal IDR process and therefore using it could be inconsistent with 
the statute.
    Several commenters urged the Departments to improve the Federal IDR 
process before increasing the administrative fee amount by decreasing 
the backlog, enforcing timely payment, and holding all parties 
accountable to the regulatory requirements. Some commenters recommended 
maintaining the current administrative fee amount until there is 
stability in the Federal IDR process and more data are available to 
accurately forecast long-term costs. A few commenters suggested that 
the Departments modify the administrative fee amount in future years to 
make up for any shortfall or surplus created by the finalized 
administrative fee amount.
    As previously mentioned, the Departments continue to consider 
improvements to the Federal IDR process; however, implementing these 
improvements would increase the costs of carrying out the Federal IDR 
process in the short term and would take time to operationalize. As 
previously mentioned, the Departments proposed policies in the IDR 
Operations proposed rules aimed to improve the overall efficiency and 
operations of the Federal

[[Page 88508]]

IDR process.\108\ The Departments were unable to propose those policies 
in the IDR Fees proposed rules because they are much more comprehensive 
than the fee-related policies proposed in the IDR Fees proposed rules 
and would require more time to develop and implement, if finalized. 
There is an urgency to publish these final rules due to the need to 
sufficiently fund the Federal IDR process in 2024, because, as 
explained above, the current $50 administrative fee amount is 
insufficient to provide total administrative fees that are estimated to 
be equal to the expenditures estimated to be made by the Departments in 
carrying out the Federal IDR process, as required by the No Surprises 
Act.\109\
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    \108\ 88 FR 75744.
    \109\ Section 9816(c)(8)(B) of the Code, section 716(c)(8)(B) of 
ERISA, and section 2799A-1(c)(8)(B) of the PHS Act.
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e. Administrative Fee Amount and Impact
    Many commenters opposed the proposed $150 per party per dispute 
administrative fee amount and stated that it would make the Federal IDR 
process cost-prohibitive to pursue for many providers, especially small 
providers, rural providers, independent practices, and certain medical 
specialties, such as psychiatry, emergency medicine, radiology, and 
anesthesiology. Some commenters requested that the Departments analyze 
how the proposed administrative fee amount would be cost-prohibitive 
for providers and would deter and limit dispute resolution for small 
providers. A few commenters asserted that the administrative fee amount 
would unfairly favor plans and issuers over providers in the Federal 
IDR process. One commenter recommended against using a methodology to 
calculate the administrative fee amount that did not consider the 
increased financial burdens on providers compared to plans and issuers. 
Another commenter stated that the proposed administrative fee amount 
prioritizes the interest of certified IDR entities and the Departments 
in covering their costs at the expense of parties' access to the 
Federal IDR process.
    Similarly, some commenters stressed that it is important to keep 
the administrative fee amount low to prevent the administrative fee 
from serving as a de facto barrier to the Federal IDR process. These 
commenters asserted that such a de facto barrier would not align with 
congressional intent, as Congress decided against adding a dollar-value 
threshold to the No Surprises Act despite considering this while 
developing the legislation. Several commenters raised concerns that 
reducing access to the Federal IDR process would reduce providers' 
reimbursements for out-of-network services, as it would not be cost-
effective to dispute certain payment amounts in the Federal IDR 
process. Some commenters asserted that a cost-prohibitive 
administrative fee amount would reduce incentives for plans and issuers 
to negotiate fair in-network contracts or, in some cases, renew 
contracts, forcing providers out of networks.
    A few commenters suggested that patients would also be impacted by 
the increased administrative fee amount, either through plans and 
issuers narrowing provider networks or increasing premiums and cost-
sharing amounts, or providers passing on costs to patients or going out 
of business. However, several commenters noted that the proposed fee 
amount was an improvement from the previous $350 amount.
    For reasons described throughout this preamble, the Departments are 
finalizing the administrative fee amount for disputes initiated on or 
after the effective date of these rules as $115 per party per dispute. 
This change in the administrative fee amount between the proposed and 
final rules reflects modifications to the estimated expenditures and to 
the administrative fee methodology described elsewhere in this 
preamble.
    While the Departments are statutorily required to set the 
administrative fee amount such that the total amount of administrative 
fees paid is estimated to be equal to the amount of expenditures 
estimated to be made by the Departments in carrying out the Federal IDR 
process, the Departments acknowledge the concerns of commenters related 
to accessibility and affordability of the Federal IDR process and the 
impact of the proposed administrative fee amount on the parties and 
patients. In the Departments' effort to balance their statutory 
obligations with the priority of ensuring equitable access for parties 
to engage in the Federal IDR process, the Departments proposed in the 
IDR Operations proposed rules to reduce the administrative fee amount 
in certain circumstances. In the IDR Operations proposed rules, the 
Departments proposed to reduce the administrative fee amount to $75 (50 
percent of the full administrative fee amount proposed in those 
proposed rules) for both parties when the highest offer by either party 
in open negotiation was less than the full administrative fee amount 
($150 as proposed in those proposed rules) \110\ and to $30 (20 percent 
of the full administrative fee amount proposed in those proposed rules) 
for non-initiating parties in ineligible disputes.\111\ The Departments 
also proposed in the IDR Operations proposed rules to revise the 
requirements for batching qualified IDR items and services together 
into a single Federal IDR process dispute.\112\ The Departments 
anticipate that these proposals would make the Federal IDR process more 
accessible for all parties, but especially the parties for whom 
commenters expressed concerns, such as small and rural providers and 
certain medical specialties.
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    \110\ 88 FR 75799.
    \111\ 88 FR 75800.
    \112\ 88 FR 75783 through 75791.
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    The administrative fee amount being finalized in these final rules 
is applied equally to both parties to a dispute. The Departments are of 
the view that it would be inequitable to charge a smaller party a lower 
administrative fee, because a dispute initiated by a smaller party 
costs the Departments the same amount to process as a dispute initiated 
by a larger party. Furthermore, the value of a dispute, rather than the 
size of the party, determines whether it will be cost-effective for the 
party to pursue the dispute. For example, a smaller party could 
initiate a high dollar value dispute, while a larger party could 
initiate a small dollar value dispute. The Departments proposed in the 
IDR Operations proposed rules to charge both parties a reduced 
administrative fee when the highest offer made during open negotiation 
is less than the full administrative fee amount,\113\ which is intended 
to improve the accessibility of the Federal IDR process for parties to 
low-dollar disputes. The Departments anticipate that such parties may 
be smaller providers and facilities or independent practices. However, 
larger parties to low-dollar disputes would not be precluded from 
paying the reduced administrative fee as long as the dispute meets the 
aforementioned requirement.
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    \113\ 88 FR 75799.
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    The Departments considered the impact of the proposed $150 
administrative fee amount on the parties compared to the current $50 
administrative fee amount and the previous $350 administrative fee 
amount. While the Departments understand that it may be economically 
infeasible to initiate some claims in the Federal IDR process due to 
the administrative and certified IDR entity fees associated with 
accessing the process, as discussed previously, the Departments are 
statutorily obligated to

[[Page 88509]]

charge an administrative fee amount such that the administrative fees 
paid are estimated to be equal to the amount of expenditures estimated 
to be made by the Departments in carrying out the Federal IDR 
process.\114\ The methodology used by the Departments is derived from 
this statutory language.
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    \114\ Section 9816(c)(8)(B) of the Code, section 716(c)(8)(B) of 
ERISA, and section 2799A-1(c)(8)(B) of the PHS Act.
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    Congress did not include a dollar-value threshold for Federal IDR 
process disputes in the No Surprises Act. Rather, Congress opted to 
include a requirement in the No Surprises Act for each party to a 
dispute for which a certified IDR entity is selected to pay to the 
Departments, at such time and in such manner as specified by the 
Departments, a fee for participating in the Federal IDR process.\115\ 
Therefore, regardless of the administrative fee amount, disputing 
parties must always evaluate whether it would be economically efficient 
to initiate a dispute in the Federal IDR process. Congress also 
provided in the No Surprises Act that the administrative fee amount is 
established by the Departments in a manner such that the total amount 
of fees paid for such year is estimated to be equal to the amount of 
expenditures estimated to be made by the Departments for such year in 
carrying out the Federal IDR process.\116\
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    \115\ Section 9816(c)(8)(A) of the Code, section 716(c)(8)(A) of 
ERISA, and section 2799A-1(c)(8)(A) of the PHS Act.
    \116\ Section 9816(c)(8)(B) of the Code, section 716(c)(8)(B) of 
ERISA, and section 2799A-1(c)(8)(B) of the PHS Act.
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    In regard to comments stating that the administrative fee could 
result in narrowing networks, many factors may impact whether a 
provider, facility, or provider of air ambulance services and a plan or 
issuer will enter a network agreement with one another, including the 
market power of each party, Federal and State network adequacy laws, 
and other factors. The Departments acknowledge that the amount paid for 
out-of-network services is one of the factors that impacts market 
participants' decisions whether to enter network agreements. The No 
Surprises Act represents a substantial change to the way the parties 
come to agreement on payment for out-of-network services by 
prohibiting, in many circumstances, the practice of sending surprise 
medical bills to patients and establishing a Federal IDR process for 
determining the appropriate out-of-network rate. Many providers report 
that initial payments made by plans and issuers for out-of-network 
services are now substantially lower than such payments were before 
enactment of the No Surprises Act. Some providers report that plans' 
and issuers' abilities to make lower payments for out-of-network 
services has impacted their willingness to offer acceptable in-network 
payment rates in network agreement negotiations. To the extent that the 
Federal IDR process and the prohibition on surprise medical billing 
change this equilibrium among parties, they could impact the number of 
providers and plans and issuers that are able to agree on terms for 
entering a network agreement and consequently network breadth.
    In the IDR Operations proposed rules, the Departments are proposing 
a number of steps to accelerate throughput in the Federal IDR 
process,\117\ which would make it easier for the parties to use the 
process to determine the appropriate payment amount for out-of-network 
services. That said, the appropriate payment rate for out-of-network 
services is only one factor among many that influences network breadth. 
It is also important for the parties to meaningfully engage in open 
negotiation to determine an appropriate out-of-network payment rate, 
since agreeing to rates in open negotiation allow the parties to avoid 
the costs of using the Federal IDR process. Even as the Federal IDR 
process becomes faster and more parties avail themselves of the 
opportunity to agree to out-of-network payment rates during the open 
negotiation period, the price paid for out-of-network services will 
remain one among many factors in a dynamic market. Furthermore, the 
Departments anticipate that a Federal IDR process with consistent 
payment determination outcomes will lead to fewer dispute initiations, 
because parties will have a better understanding of what a 
determination will likely be and more disputes would likely be settled 
in open negotiation or even earlier, resulting in the parties avoiding 
the costs associated with the Federal IDR process.
---------------------------------------------------------------------------

    \117\ 88 FR 75744.
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    The Departments also do not anticipate that the policies finalized 
in these rules would cause plans and issuers to increase premiums, as 
further discussed in section IV.G of this preamble, or patient cost 
sharing, because administrative fees paid would likely represent a very 
small percentage of the costs considered by plans and issuers in 
calculating annual premiums or cost sharing.
    Many commenters emphasized the importance of considering the 
proposed administrative fee amount alongside batching requirements to 
determine whether the administrative fee amount would be cost-
prohibitive. Some commenters suggested that batching policies could 
mitigate the financial challenges providers and facilities face, 
especially when pursuing low-dollar claims. A few commenters suggested 
it was premature to update the administrative fee amount or provide 
feedback on a proposed amount until batching guidance is updated. One 
commenter viewed an administrative fee of $150 per party as reasonable 
so long as a claim is defined as an episode of care or a single medical 
encounter in the batching policy.
    The Departments are continuing to assess batching flexibilities and 
the impact of batching on various parts of the Federal IDR process. To 
further improve batching requirements, the Departments proposed 
provisions in the IDR Operations proposed rules \118\ that would allow 
for more clarity, certainty, and flexibility in batching multiple items 
or services in a single dispute.\119\ These batching proposals are 
designed so that the expenses of engaging in the Federal IDR process, 
including the administrative fee, do not unreasonably impede parties' 
access to the Federal IDR process. As previously mentioned, the IDR 
Operations proposed rules \120\ also proposed a reduced administrative 
fee for low-dollar disputes, identified as disputes for which the 
highest offer by either party in open negotiation was less than the 
administrative fee amount, which, if finalized, would mitigate 
financial burden on providers and facilities when pursuing payment on 
low-dollar claims. The Departments encourage interested parties to 
submit comments on the IDR Operations proposed rules prior to the 
comment deadline.\121\
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    \118\ 88 FR 75744.
    \119\ On November 28, 2023, the Departments released FAQs 
pertaining to batching that will be effective until the IDR 
Operations proposed rules are finalized and take effect. These FAQs 
discuss how, in light of the TMA IV and TMA III opinions and orders, 
the batching requirements of the No Surprises Act apply to qualified 
IDR items and services for disputes eligible for initiation of the 
Federal IDR process on or after August 3, 2023, until the 
Departments engage in future notice and comment rulemaking. See U.S. 
Department of Health and Human Services, U.S. Department of Labor, 
U.S. Department of Treasury, Office of Personnel Management 
(November 28, 2023), FAQs about Consolidated Appropriations Act, 
2021 Implementation Part 63, available at https://www.cms.gov/files/document/faqs-part-63.pdf.
    \120\ Id.
    \121\ As discussed earlier in this preamble section, the 
Departments were unable to propose these operational policies in the 
IDR Fees proposed rules because they are more comprehensive than the 
fee-related policies proposed in the IDR Fees proposed rules and 
require more time to develop and implement if finalized. There is an 
urgency to publish these final rules due to the need to sufficiently 
fund the Federal IDR process in 2024.

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[[Page 88510]]

    While the Departments continue to consider improvements to the 
Federal IDR process, including policies surrounding batching and low-
dollar claims, the No Surprises Act requires that the administrative 
fee be estimated to cover the expenditures estimated to be made by the 
Departments in carrying out the Federal IDR process in the year, and 
the Departments estimate that $115 per party per dispute is the 
appropriate administrative fee amount to meet this requirement for 
disputes initiated on or after the effective date of these rules.

B. Certified IDR Entity Fee Ranges

    Under current regulations at 26 CFR 54.9816-8T(e)(2)(vii), 29 CFR 
2590.716-8(e)(2)(vii), and 45 CFR 149.510(e)(2)(vii), the certified IDR 
entity fees for single and batched determinations are set by the 
certified IDR entities within the upper and lower limits of ranges for 
each as set forth in guidance issued annually by the Departments.
    In the IDR Fees proposed rules, the Departments proposed to amend 
the provisions of the regulations establishing the ranges for certified 
IDR entity fees for single and batched disputes to establish the ranges 
in notice and comment rulemaking, rather than in guidance, at 26 CFR 
54.9816-8(e)(2)(vii), 29 CFR 2590.716-8(e)(2)(vii), and 45 CFR 
149.510(e)(2)(vii). Further, the IDR Fees proposed rules provided that, 
consistent with current rules, certified IDR entities must annually 
provide a fixed fee for single determinations and separate fixed fees 
for batched determinations within the upper and lower limits for each 
as set in notice and comment rulemaking. Additionally, the IDR Fees 
proposed rules provided that the certified IDR entity fee ranges 
established by the Departments in rulemaking would remain in effect 
until new certified IDR entity fee ranges are established by notice and 
comment rulemaking,\122\ allowing the Departments to update the 
certified IDR entity fee ranges more or less frequently than annually. 
Finally, the Departments proposed that the certified IDR entity or IDR 
entity seeking certification may seek advance written approval from the 
Departments to update its fees more often than once annually.
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    \122\ 88 FR 65888.
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    The Departments proposed that for disputes initiated on or after 
the later of the effective date of these rules or January 1, 2024, 
certified IDR entities would be permitted to charge a fixed certified 
IDR entity fee for single determinations within the range of $200 to 
$840, unless a fee not within that range is approved by the Departments 
pursuant to paragraphs 26 CFR 54.9816-8(e)(2)(vii)(A) and (B), 29 CFR 
2590.716-8(e)(2)(vii)(A) and (B), and 45 CFR 149.510(e)(2)(vii)(A) and 
(B). The Departments also proposed that for disputes initiated on or 
after the later of the effective date of these rules or January 1, 
2024, certified IDR entities would be permitted to charge a fixed 
certified IDR entity fee for batched determinations within the range of 
$268 to $1,173, unless a fee outside this range is approved by the 
Departments pursuant to paragraphs 26 CFR 54.9816-8(e)(2)(vii)(A) and 
(B), 29 CFR 2590.716-8(e)(2)(vii)(A) and (B), and 45 CFR 
149.510(e)(2)(vii)(A) and (B). The Departments proposed to continue to 
use a tiered fee structure based on the number of line items within the 
batch.\123\ Under the IDR Fees proposed rules, certified IDR entities 
would be permitted to charge a fixed tiered fee within the range of $75 
to $250 for every additional 25 line items within a batched dispute 
beginning with the 26th line item.\124\ The IDR Fees proposed rules 
explained the Departments' considerations for proposing the certified 
IDR entity fee ranges, which included the anticipated time and 
resources needed for certified IDR entities to make payment 
determinations meeting the requirements of the statute, rules, and 
guidance; the anticipated time and resources needed for data reporting; 
the anticipated time and resources needed to comply with audit 
requirements; the anticipated volume of Federal IDR initiations and 
payment determination quality assessments; the anticipated volume of 
Federal IDR initiations ineligible for the Federal IDR process; and the 
level of complexity in determining the eligibility of items and 
services for the Federal IDR process.\125\ These fee ranges would apply 
until another set of fee ranges is proposed and finalized through 
notice and comment rulemaking.
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    \123\ A tiered fee structure was first proposed in the Calendar 
Year 2023 Fee Guidance for the Federal Independent Dispute 
Resolution Process under the No Surprises Act and implemented for 
all disputes initiated as of January 1, 2023. See Centers for 
Medicare & Medicaid Services (October 31, 2022). Calendar Year 2023 
Fee Guidance for the Federal Independent Dispute Resolution Process 
under the No Surprises Act. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.
    \124\ 88 FR 65888.
    \125\ 88 FR 65888 at 65895 through 65896.
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    If a certified IDR entity wishes to charge a fee outside either of 
these fee ranges, it would continue to follow the existing process for 
requesting written approval from the Departments outlined in 26 CFR 
54.9816-8(e)(2)(vii)(A) and (B), 29 CFR 2590.716-8(e)(2)(vii)(A) and 
(B), and 45 CFR 149.510(e)(2)(vii)(A) and (B).
    Since the publication of the IDR Fees proposed rules, the 
Departments have analyzed updated data and assumptions as applied to 
the factors considered in the IDR Fees proposed rules' preamble to set 
the fee ranges, and the Departments found that the results of the 
analysis remain the same. The Departments received comments on these 
proposals.
    The Departments are finalizing as proposed the policy to establish 
the certified IDR entity fee ranges through notice and comment 
rulemaking, rather than guidance. The Departments are also finalizing 
the certified IDR entity fee ranges for single and batched disputes as 
proposed. Finally, the Departments are finalizing the fixed tier fee 
structure for batched disputes, as well as the range for this 
structure, as proposed.
    However, after considering the public comments, the Departments are 
not finalizing the proposal which would have allowed the Departments to 
set the certified IDR entity fee ranges more frequently than annually 
but are instead finalizing the proposal with modifications to reflect 
that the certified IDR entity fee ranges may be established by the 
Departments no more frequently than annually through notice and comment 
rulemaking. Further, the Departments are finalizing the proposal that 
the certified IDR entity or IDR entity seeking certification may seek 
advance written approval from the Departments to update its fees more 
often than once annually, with modifications to reflect that in 
addition to setting their initial fee for the calendar year, certified 
IDR entities may only request approval from the Departments to update 
their fees one additional time per year, and with additional non-
substantive modifications for readability. Finalizing this policy would 
result in a process where the certified IDR entity or IDR entity 
seeking certification sets their fixed fees for single and batched 
determinations for the year, and then is allowed one opportunity at any 
point during the calendar year to update their fixed fees, provided 
that their request is approved by the Departments.

[[Page 88511]]

    Many commenters supported the proposal to establish the certified 
IDR entity fee ranges through notice and comment rulemaking. Several 
commenters noted that establishing the certified IDR entity fee ranges 
through notice and comment rulemaking would increase transparency and 
allow interested parties to provide feedback that would help the 
Departments appropriately adjust the fee ranges. Many commenters 
expressed opposition to the Departments' proposal to establish the 
certified IDR entity fee ranges more or less frequently than annually. 
The majority of these commenters encouraged the Departments to update 
the certified IDR entity fee ranges only once annually to create a more 
predictable and stable Federal IDR process. Several commenters 
expressed concern that changing the certified IDR entity fee ranges 
more frequently than once annually would prevent providers from 
effectively budgeting for participation in the Federal IDR process, 
which would create a barrier to access. A few commenters noted that 
unpredictable changes to the certified IDR entity fee ranges could 
impact plans' and issuers' abilities to budget for the Federal IDR 
process and could lead plans and issuers to budget more conservatively 
and pass on the cost increase to consumers.
    A few commenters generally supported the flexibility to update the 
certified IDR entity fee ranges more or less frequently than annually. 
However, one commenter supported the proposed flexibility only if the 
Departments adjusted the fee ranges less frequently than annually, 
while another commenter supported the proposed flexibility if the 
Departments provided adequate notice, such as 90 days, before 
implementing the changed fee ranges. Further, several commenters 
opposed the proposal to allow certified IDR entities or IDR entities 
seeking certification to seek advance written approval from the 
Departments to set their certified IDR entity fees more often than 
annually. Similar to the proposal to establish the certified IDR entity 
fees through notice and comment rulemaking more or less frequently than 
annually, some commenters expressed concerns that the proposed policy 
would cause unpredictability for the parties, which would impact their 
ability to effectively budget for the Federal IDR process. One 
commenter misinterpreted the proposed policy as proposing to require 
certified IDR entities to adjust their fees whenever operational or 
technological efficiencies could justify a decrease in cost, and 
expressed concern that the proposed policy may discourage certified IDR 
entities from participating in the Federal IDR process. One commenter 
opposed multiple fee adjustments within a given year but supported 
allowing certified IDR entities a limit of one additional fee 
adjustment per year following a compelling request and formal approval.
    The Departments agree with commenters that the proposal to 
establish the certified IDR entity fee ranges through notice and 
comment rulemaking will improve transparency and provide opportunity 
for greater engagement by interested parties in the establishment of 
the ranges. The Departments recognize commenters' concerns that the 
proposed flexibility to set the certified IDR entity fee ranges through 
notice and comment rulemaking more or less frequently than annually 
would enable multiple changes to the certified IDR entity fee ranges 
over the course of a year. In general, the Departments recognize that 
frequent changes to the established certified IDR entity fee ranges 
could increase unpredictability in the Federal IDR process and 
potentially burden parties, but note that they did not propose this 
policy with the intention of pursuing such frequent changes. The 
Departments contemplated establishing this proposed flexibility so that 
the certified IDR entity fee ranges could remain effective for multiple 
years. Further, updating the certified IDR entity fee ranges does not 
guarantee that certified IDR entities will set new fixed fee amounts. 
Each certified IDR entity determines their fee amounts independently, 
and there is no requirement to make a corresponding adjustment each 
time the certified IDR entity fee ranges established by the Departments 
change, provided the certified IDR entity's fee stays within the new 
range.
    While it would be unlikely that the Departments would pursue 
multiple notice and comment rulemakings in a single year to adjust the 
certified IDR entity fee ranges, the Departments acknowledge the 
potential for the proposed policy to increase uncertainty within the 
Federal IDR process. Therefore, to be responsive to commenters' 
concerns, the Departments are finalizing this proposal with 
modifications to reflect that the certified IDR entity fee ranges may 
be established no more frequently than once per calendar year. This 
allows the certified IDR entity fee ranges to remain effective over 
multiple years until they are updated in notice and comment rulemaking, 
while addressing commenters' concerns by preventing multiple 
adjustments of the certified IDR entity fee ranges in a single year.
    The Departments acknowledge that frequent increases to certified 
IDR entity fees could lead to unpredictability and complicate the 
ability of the parties to effectively budget for the Federal IDR 
process. The Departments are of the view that the proposed mechanism 
for certified IDR entities to request to set their fees more than once 
annually includes sufficient guardrails to ensure that any changes to 
the certified IDR entities' fees would not prevent parties from 
accessing the Federal IDR process. Specifically, the Departments 
proposed to require certified IDR entities to submit the following 
information to the Departments in their requests: (1) the fixed fee 
that the certified IDR entity is seeking to charge; (2) a description 
that reasonably explains the circumstances that require a change to its 
fee; and (3) a detailed description that reasonably explains how the 
change to its fee will be used to mitigate the effects of these 
circumstances. The Departments would use their discretion to determine 
if the explanations included in the request demonstrate that the change 
would ensure the certified IDR entity's financial viability and would 
not impose on parties an undue barrier to accessing the Federal IDR 
process.
    The Departments seek to strike a balance between predictable fees 
for parties participating in the Federal IDR process and certified IDR 
entities' need for flexibility to respond to circumstances that require 
fee adjustments to maintain program operations. For example, the 
Departments acknowledge that certified IDR entities consider various 
factors, including operational costs, in setting fees for the Federal 
IDR process. However, certified IDR entities have needed to increase 
staff resources, implement system updates, and adjust operations to 
respond to unexpectedly frequent changes to guidance or regulations 
governing the Federal IDR process or the volume of disputes initiated 
and closed under the Federal IDR process. To ensure that certified IDR 
entities have sufficient funding to respond to such circumstances, 
providing certified IDR entities with the ability to request an update 
to their fees one additional time during a calendar year is 
appropriate.
    To address some of the concerns expressed by commenters, the 
Departments are finalizing this proposal with modifications to reflect 
that certified IDR entities may only request approval from the 
Departments to set their fee one additional time for a

[[Page 88512]]

calendar year. In other words, if a certified IDR entity wishes to 
update its fees an additional time after already setting fees for the 
calendar year, the certified IDR entity must seek approval from the 
Departments to do so. A certified IDR entity may set its fees at most 
two times for a calendar year, once at the initial setting of the fees, 
and once after receiving approval from the Departments to update the 
fees, regardless of whether the Departments have established new 
certified IDR fee ranges in notice and comment rulemaking. If the 
Departments reject a certified IDR entity's request to update its fees 
during the calendar year, the certified IDR entity may continue to seek 
approval by submitting subsequent requests as long as these requests 
comply with the requirements finalized in this rule.
    If a certified IDR entity requests to update its fees after 
initially setting its fee for the calendar year, and the request is 
approved by the Departments, the change to its fees will be made public 
before those fees are effective, in a form and manner specified by the 
Secretary, to allow the parties time to consider the fee change in 
their decision making. Updated fees will apply to disputes initiated on 
or after the effective date of the fee amount. The modified policy will 
provide an appropriate amount of flexibility to certified IDR entities 
to make a fee adjustment to account for efficiencies and fluctuations 
in the conditions of the Federal IDR process in future years, while 
also capping the number of fee adjustments in a given calendar year and 
limiting cost volatility for parties participating in the Federal IDR 
process.
    The Departments solicited comment on whether they should apply an 
inflationary adjustment, such as the CPI-U, to the considerations used 
to develop the certified IDR entity fee ranges in future years. One 
commenter supported the use of an inflationary adjustment and suggested 
updating the certified IDR entity fee ranges annually based on 
inflation rather than through notice and comment rulemaking. A few 
commenters opposed updating the certified IDR entity fee ranges using 
an inflationary adjustment such as the CPI-U. Specifically, one 
commenter posited that since the CPI-U is updated on a monthly basis, 
the Departments might pursue monthly adjustments to the certified IDR 
entity fee ranges, which would severely complicate the Federal IDR 
process. Another commenter expressed concern that applying an 
inflationary adjustment would only drive costs up over time, prompting 
plans and issuers to pass any additional costs on to consumers. One 
commenter neither explicitly supported nor opposed the general use of 
an inflationary adjustment to set the certified IDR entity fee ranges 
but noted that setting the certified IDR entity fee ranges through 
notice and comment rulemaking could be an opportunity to adjust based 
on inflation. This commenter cautioned that if the Departments pursued 
the use of an inflationary adjustment, such an adjustment should be the 
only consideration used to update the certified IDR entity ranges.
    The Departments appreciate the comments on the use of an 
inflationary adjustment to update the certified IDR entity fee in 
future years. The Department share the commenters' desire to maintain 
predictable and accessible costs for participating in the Federal IDR 
process and agree that additional adjustments to the fee ranges more 
frequently than annually would complicate the Federal IDR process for 
all parties. As stated earlier in this preamble, based on the comments 
received, the Departments are finalizing the proposal to establish the 
certified IDR entity fee ranges through notice and comment rulemaking, 
which will allow for greater transparency and feedback related to the 
establishment of the ranges. Further, the Departments are of the view 
that the considerations being finalized in this rulemaking are 
necessary to develop reasonable certified IDR entity fee ranges, and 
that the addition of inflationary adjustment to the considerations, or 
the exclusive use of an inflationary adjustment to develop the ranges, 
is not practical or necessary at this time. The Departments will 
continue to carefully consider whether such a policy may be appropriate 
in future rulemaking.
    Several commenters expressed concerns with the proposed certified 
IDR entity fee ranges' increased upper limits. Some of these commenters 
stated that the proposed certified IDR entity fee ranges may be cost-
prohibitive and limit access to the Federal IDR process, particularly 
for small providers. A few of the commenters opposed to the proposed 
increase in the upper limits of the certified IDR entity fee ranges 
asserted that any increase in the certified IDR entity fee ranges would 
limit participation in the Federal IDR process. Specifically, one of 
these commenters asserted that the proposed ranges would result in 
costs passed on to patients in the form of increased premiums and cost-
sharing amounts.
    Some commenters, however, supported the proposed certified IDR 
entity fee ranges. Some of these commenters asserted that the increase 
to the upper limit of the certified IDR fee ranges is reasonable and 
will encourage greater plan and issuer participation prior to the 
Federal IDR process, such as during open negotiation, and will reduce 
the time needed for certified IDR entities to render payment 
determinations.
    The Departments maintain the view that the proposed certified IDR 
entity fee ranges will keep costs reasonable such that participating in 
the Federal IDR process will not be cost-prohibitive, including for 
smaller providers, while also ensuring that certified IDR entities are 
able to cover their operating costs and continue participating in the 
Federal IDR process. The Departments acknowledge that broadening the 
certified IDR entity fee ranges could have an impact on the cost to 
parties to engage in the Federal IDR process. However, the current 
range of fees charged by certified IDR entities reflects that, since 
the opening of the Federal IDR process, certified IDR entities do not 
all charge the same fees, nor do they all charge the maximum fee amount 
in the ranges set by the Departments.\126\ To remain competitive, the 
certified IDR entities have an incentive to charge fees on the lower 
end of the established range. As a result, the Departments do not 
believe that an increase to the upper limits of the certified IDR 
entity fee ranges will result in drastic increases to the fees charged 
by certified IDR entities. Further, the Departments have not seen any 
data suggesting that the proposed increases to the certified IDR entity 
fee ranges will result in a substantial enough increase in costs to 
plans and issuers that they will impact patients in the form of 
increased premiums and cost-sharing amounts. However, the Departments 
will continue to monitor this dynamic.
---------------------------------------------------------------------------

    \126\ See https://www.cms.gov/nosurprises/help-resolve-payment-disputes/certified-idre-list.
---------------------------------------------------------------------------

    The Departments agree with commenters asserting that the increases 
to the certified IDR entity fee ranges will encourage greater plan and 
issuer participation prior to the Federal IDR process, such as during 
open negotiation. The Departments believe that the increases to the 
certified IDR entity fee ranges will encourage parties to actively 
participate in open negotiation to preclude the need for the Federal 
IDR process, thereby eliminating the need for parties to pay the 
certified IDR entity fee.
    The Departments emphasize that while they establish ranges for the 
certified IDR entity fees, certified IDR entities choose the fixed fees 
they

[[Page 88513]]

charge for single and batched determinations based on a number of 
factors. As noted earlier in this preamble, certified IDR entities have 
needed to make numerous adjustments in response to high volumes of 
disputes, complex determinations, and litigation resulting in changes 
to guidance and regulations governing the Federal IDR process. The 
proposed ranges for the single and batched determination fees, 
including the proposed range for the tiered fee for batched 
determinations, allow for appropriate compensation corresponding to the 
complexity and effort associated with making eligibility and payment 
determinations. The Departments remain of the view that the proposed 
ranges would keep costs for participating in the Federal IDR process 
reasonable and reduce the potential for increased costs to be passed on 
to patients.
    Several commenters opposed the proposed tiered fee structure for 
batched determinations. Commenters were concerned that the proposed 
tiered fee structure would be cost-prohibitive, particularly due to the 
absence of a limitation on the number of line items considered in the 
price tiers (that is, no line item cap to the application of the tiered 
fee, as currently exists). Further, some commenters asserted that the 
proposed tiered fee structure and range would disincentivize the 
submission of batched disputes.
    A few commenters supported an increased fee for larger batched 
determinations but recommended that the tiering structure reflect 
intervals of 50 line items rather than 25. Further, one commenter 
supported a fixed-dollar tiered fee, as opposed to a range, suggesting 
that a fixed-dollar fee would provide more consistency across the fees 
charged by different certified IDR entities and avoid potential issues 
such as certified IDR entities being overwhelmed with disputes and 
resulting delays in the Federal IDR process.
    The proposed tiered fee structure and range reflect the 
Departments' intent to keep the costs of participating in the Federal 
IDR process affordable while ensuring that certified IDR entities are 
compensated for their work in rendering payment determinations on 
complex batched disputes. Certified IDR entities have indicated to the 
Departments that making determinations on large batches of dissimilar 
items and services is particularly complex and burdensome and that they 
generally do not realize economies of scale as the number of batched 
line items increases. The Departments considered the impact of the TMA 
IV opinion and order as discussed in section I.C of this preamble on 
the anticipated complexity and volume of batched disputes while 
determining the certified IDR entity fee ranges. The Departments 
acknowledge the efficiencies gained by batching and believe that the 
proposed tiered fee structure would maintain those efficiencies while 
allowing certified IDR entities to charge a reasonable fee for the 
level of work involved in batched determinations.
    Several commenters stated that the proposed tiered fee structure 
might increase the costs to disputing parties submitting batched 
disputes with many line items because there is no cap to the number of 
line items within a batched dispute after which the tiered fee would no 
longer apply.
    A tiered fee selected by each certified IDR entity from a dollar 
range established by the Departments allows for greater flexibility, as 
opposed to applying a standard fixed dollar amount or applying a 
percentage of the certified IDR entity's batched determination fee as 
is currently used.\127\ The tiered fee range reflects the costs 
associated with increasing line items in a batched dispute and provides 
certified IDR entities the appropriate flexibility to set fees 
commensurate with their costs. Additionally, the Departments believe 
that a dollar range based on the number of line items in a batched 
dispute would provide transparent and consistent pricing for both 
parties and certified IDR entities. The Departments agree that 
instances of batched disputes with exceedingly high numbers of line 
items occur infrequently but remain a possible occurrence. In addition, 
as mentioned previously, certified IDR entities have indicated that 
they generally do not realize economies of scale for batched disputes 
with high numbers of line items. For instance, certified IDR entities 
often need to verify the acuity of every patient in a batch, even when 
the service is the same. Given the anticipated infrequency of batched 
disputes with exceedingly high numbers of line items and in recognition 
of the need for the certified IDR entity to cover its costs for such 
batched disputes, the Departments believe the tiered fee structure is a 
reasonable approach.
---------------------------------------------------------------------------

    \127\ See Centers for Medicare & Medicaid Services (December 23, 
2022). Amendment to the Calendar Year 2023 Fee Guidance for the 
Federal Independent Dispute Resolution Process under the No 
Surprises Act: Change in Administrative Fee. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/amended-cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.
---------------------------------------------------------------------------

    The Departments also considered whether certified IDR entities 
should be permitted to charge only an additional fixed dollar amount 
(for example, $125, $150, $200, etc.) per every additional 25 line 
items but determined that the proposed range for a tiered fee would 
provide the appropriate operational flexibility for certified IDR 
entities. Providing this flexibility is important to maintain 
participation of certified IDR entities in the Federal IDR process. The 
operational costs for the Federal IDR process incurred by each 
certified IDR entity may vary, requiring certified IDR entities to 
consider their unique circumstances in determining their fixed fee 
amounts to maintain financial viability. Therefore, allowing certified 
IDR entities to select a tiered fee within a dollar range established 
by the Departments will allow the certified IDR entities the 
flexibility to tailor their pricing to fit their company's needs, while 
ensuring reasonable costs for parties participating in the Federal IDR 
process.
    For the purposes of the batched tiered fee range intervals, the 
Departments considered whether a grouping of 50 line items would be a 
more appropriate interval than the proposed interval of 25 line items. 
A few commenters suggested that 50 line items would be a more 
appropriate interval than the proposed 25-line-item increment. In 
determining the interval appropriate for the tiered fee range for 
batched determinations, the Departments considered historical trends in 
the number of line items submitted in batched disputes in addition to 
the anticipated changes in batching behaviors due to the TMA IV vacatur 
of certain batching provisions. The Departments remain of the view that 
a 25-line-item increment is the most reasonable increment to balance 
the affordability to parties and the amount of resources expended by 
the certified IDR entities to review those line items. As a result, the 
Departments are finalizing this policy as proposed.

III. Severability

    In the event that any portion of these final rules is declared 
invalid, the Departments intend that the various aspects of the 
finalized administrative fee provisions and certified IDR entity fee 
provisions be severable. The Departments proposed at 26 CFR 54.9816-
8(d)(3)(i), 29 CFR 2590.716-8(d)(3)(i), and 45 CFR 149.510(d)(3)(i) 
that any provision of paragraph (d) or paragraphs (e)(2)(vii) through 
(e)(2)(ix) held to be invalid or unenforceable as applied to any person 
or circumstance would be construed so as to continue to give the 
maximum effect to the provision permitted by law, including as applied 
to persons not similarly

[[Page 88514]]

situated or to dissimilar circumstances, unless such holding is that 
the provision of these paragraphs is invalid and unenforceable in all 
circumstances, in which event the provision would be severable from the 
remainder of these paragraphs and would not affect the remainder 
thereof. The Departments further proposed at new 26 CFR 54.9816-
8(d)(3)(ii), 29 CFR 2590.716-8(d)(3)(ii), and 45 CFR 149.510(d)(3)(ii) 
that the provisions in paragraphs (d) and (e)(2)(vii) through (ix) are 
intended to be severable from each other. Additionally, the Departments 
further proposed that if a court were to find unlawful the 
administrative fee policies, the certified IDR entity fee policies 
should stand. In the alternative, if a court were to find unlawful the 
certified IDR entity fee policies, the administrative fee policies 
should stand.
    A few commenters supported the proposed severability provisions. 
These commenters stated that the provisions would help mitigate 
uncertainty that may result from future court decisions if a lawsuit 
occurs.
    The Departments agree that the severability clause will help 
mitigate uncertainty. After considering the comments, the Departments 
are finalizing these policies as proposed, with a technical 
modification that the provisions in 26 CFR 54.9816-8(d) and (e)(2)(vii) 
and (viii), 29 CFR 2590.716-8(d) and (e)(2)(vii) and (viii), and 45 CFR 
149.510(d) and (e)(2)(vii) and (viii) are intended to be severable, 
rather than 26 CFR 54.9816-8(d) and (e)(2)(vii) through (ix), 29 CFR 
2590.716-8(d) and (e)(2)(vii) through (ix), and 45 CFR 149.510(d) and 
(e)(2)(vii) through (ix). This technical modification is due to the 
restructuring of the regulatory text in these final rules pertaining to 
certified IDR entity fees at 26 CFR 54.9816-8(e)(2)(vii) and (viii), 29 
CFR 2590.716-8(e)(2)(vii) and (viii), and 45 CFR 149.510(e)(2)(vii) and 
(viii) compared to what was proposed, as discussed further in section 
II.B of this preamble.
    The Departments further clarify their intent that the methodology 
being adopted here to set the administrative fee amount and the 
considerations the Departments used in developing the certified IDR 
entity fee ranges are also intended to be severable. Should any aspect 
of the methodology or considerations be determined to be unlawful, the 
Departments intend for the administrative fee amount or certified IDR 
entity fee ranges to be adjusted by applying the methodology in 
accordance with the remaining elements of the methodology or 
considerations. For instance, if it is determined that certain 
expenditures should not have been included in calculating the 
administrative fee amount, then the Departments would implement these 
rules by eliminating those expenditures from the total expenditures 
estimated to be made by the Departments in carrying out the Federal IDR 
process, and dividing the new expenditures amount by the same estimated 
number of administrative fees paid to calculate the new administrative 
fee amount. The resulting administrative fee amount would be 
immediately effective, without requiring additional notice and comment 
rulemaking.

IV. Economic Impact and Paperwork Burden

A. Summary--Departments of Health and Human Services and Labor

    These final rules establish the administrative fee amount and the 
certified IDR entity fee ranges in notice and comment rulemaking, and 
the preamble sets forth the methodology for setting the administrative 
fee amount and the considerations used to develop the certified IDR 
entity fee. The Departments have examined the effects of these 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); 
Executive Order 14094 (88 FR 21879, April 11, 2023, Modernizing 
Regulatory Review); the Regulatory Flexibility Act (Pub. L. 96-354, 
September 19, 1980); section 1102(b) of the Social Security Act (42 
U.S.C. 1102(b)); section 202 of the Unfunded Mandates Reform Act of 
1995 (Pub. L. 104-4, March 22, 1995); and Executive Order 13132 (64 FR 
43255, August 10, 1999, Federalism).

B. Executive Orders 12866, 13563, and 14094--Departments of Health and 
Human Services and Labor

    Executive Orders 12866, 13563, and 14094 direct Federal 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). 
Under Executive Order 12866, ``significant'' regulatory actions are 
subject to review by the Office of Management and Budget (OMB). 
Executive Order 14094, entitled ``Modernizing Regulatory Review'' 
(hereinafter, the Modernizing E.O.), amends section 3(f) of Executive 
Order 12866 (Regulatory Planning and Review). The amended section 3(f) 
of Executive Order 12866 defines a ``significant regulatory action'' as 
an action that is likely to result in a rule: (1) having an annual 
effect on the economy of $200 million or more in any 1 year (adjusted 
every 3 years by the Administrator of OMB's Office of Information and 
Regulatory Affairs (OIRA) for changes in gross domestic product), or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, territorial, or tribal governments 
or communities; (2) 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 legal or policy issues for which centralized 
review would meaningfully further the President's priorities or the 
principles set forth in this Executive order, as specifically 
authorized in a timely manner by the Administrator of OIRA in each 
case.
    A regulatory impact analysis (RIA) must be prepared for rules 
deemed significant. OMB's OIRA has deemed this rule significant. The 
Departments have prepared an RIA that to the best of their ability 
presents the costs and benefits of these rules. OMB has reviewed these 
final regulations, and the Departments have provided the following 
assessment of their impact.

C. Need for Regulatory Action--Departments of Health and Human Services 
and Labor

    The Departments are amending the certified IDR entity and 
administrative fee provisions of the rules for the Federal IDR process 
to set the administrative fee amount and the certified IDR entity fee 
ranges in notice and comment rulemaking, and set forth the methodology 
for setting the administrative fee amount and the considerations for 
developing the certified IDR entity fee ranges. These policies will 
ensure that all interested parties are sufficiently notified and 
provided an opportunity to comment on the fees associated with the 
Federal IDR process.

D. Summary of Impacts and Accounting Table--Departments of Health and 
Human Services and Labor

    The expected benefits and costs of these final rules are summarized 
in Table 1 and discussed in this section of the preamble. In accordance 
with OMB Circular A-4, Table 1 depicts an

[[Page 88515]]

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 and costs of these 
final rules but have sought, where possible, to describe these non-
quantified impacts. The effects in Table 1 reflect non-quantified 
impacts and estimated direct monetary costs resulting from the 
provisions of these final rules.
[GRAPHIC] [TIFF OMITTED] TR21DE23.000

1. Benefits
    The primary benefit of these final rules is to allow the Federal 
IDR process to function through establishing the administrative fee 
amount and certified IDR entity fee ranges in rulemaking and 
establishing the amounts of these fees for disputes initiated on or 
after the effective date of these rules. In response to the opinion and 
order in TMA IV, these final rules are necessary in order to set the 
administrative fee amount as close to January 1, 2024 as possible, 
because the current $50 administrative fee amount is insufficient to 
satisfy the statutory requirement that the total amount of fees paid 
for the year be estimated to be equal to the amount of expenditures 
estimated to be made by the Departments in carrying out the Federal IDR 
process. The primary non-quantifiable benefit of these final rules is 
the continuation of a functioning Federal IDR process, which helps to 
protect consumers from certain surprise medical bills and helps 
providers to receive compensation for certain out-of-network services. 
Additional benefits specific to each Federal IDR process fee type 
appear in the following sections.
a. Administrative Fee Amount and Methodology
    The Departments are finalizing the proposal to establish the 
administrative fee amount in notice and comment rulemaking for disputes 
initiated on or after the effective date of these rules, and the 
Departments are setting forth the methodology for determining the 
administrative fee amount. Utilizing notice and comment rulemaking will 
increase transparency of the administrative fee-setting process and 
allow interested parties to provide feedback to the Departments prior 
to the Departments setting the administrative fee amount.
    The Departments sought comment on these benefits. The Departments 
received comments on these benefits and respond to these comments in 
section II.A of this preamble. The Departments are finalizing these 
benefits as proposed.
b. Certified IDR Entity Fee Ranges
    The Departments proposed to establish the certified IDR entity fee 
ranges for single and batched determinations, which include a tiered 
fee range for batched determinations that exceed 25 line items, in 
notice and comment rulemaking for disputes initiated on or after the 
effective date of these rules. Utilizing notice and comment rulemaking 
to set the appropriate ranges for certified IDR entity fees will 
increase transparency for parties interested in the certified IDR 
entity fee ranges and allow these parties to identify in advance the 
impacts of changing the certified IDR entity fee ranges.
    The Departments sought comment on these benefits. The Departments 
received comments on these benefits and respond to these comments in 
section II.B of this preamble. The Departments are finalizing these 
benefits as proposed.

[[Page 88516]]

2. Costs
a. Administrative Fee Amount and Methodology
    The Departments are finalizing the proposal to establish the 
administrative fee amount in notice and comment rulemaking for disputes 
initiated on or after the effective date of these rules, and set forth 
the methodology for setting the administrative fee amount with 
modifications described in section II.A of this preamble to ensure that 
disputing and other parties are sufficiently notified and provided an 
opportunity to comment on the administrative fee amount. The 
Departments are also finalizing the administrative fee amount for 
disputes initiated on or after the effective date of these rules at 
$115 per party per dispute.
    The current administrative fee is $50 per party per dispute.\128\ 
In the IDR Fees proposed rules, the Departments estimated that 
approximately 225,000 disputes are closed per year.\129\ Therefore, if 
the current administrative fee were to remain applicable, the 
Departments estimated in the IDR Fees proposed rules that the parties 
would pay approximately $22.5 million in administrative fees annually 
(225,000 disputes x 2 parties per dispute x $50 per party). In the IDR 
Fees proposed rules, the Departments also estimated that if they were 
to finalize an administrative fee amount of $150 per party per dispute 
for disputes initiated on or after the effective date of these rules, 
the parties would pay approximately $67.5 million in administrative 
fees annually beginning in 2024 (225,000 disputes x 2 parties per 
dispute x $150 per party), assuming the number of disputes remains 
stable year over year and the administrative fee amount is not 
subsequently changed through notice and comment rulemaking. Therefore, 
in the IDR Fees proposed rules, the Departments estimated that the 
costs associated with this proposal, if finalized, would be 
approximately $45 million ($67.5 million if this proposal is finalized 
minus $22.5 million if the status quo were to continue).
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    \128\ As a result of the opinion and order in TMA IV, which 
vacated the portion of the December 2022 guidance that increased the 
administrative fee amount to $350 per party per dispute for disputes 
initiated during calendar year 2023, the administrative fee amount 
reverted to the amount established in the October 2022 guidance. See 
Centers for Medicare & Medicaid Services (August 11, 2023). Federal 
Independent Dispute Resolution (IDR) Process Administrative Fee 
FAQs. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/no-surprises-act-independent-dispute-resolution-administrative-fee-frequently-asked-questions.pdf. Also see Centers 
for Medicare & Medicaid Services (October 31, 2022). Calendar Year 
2023 Fee Guidance for the Federal Independent Dispute Resolution 
Process under the No Surprises Act. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.
    \129\ The details of the calculation of the number of disputes 
are provided at 88 FR 65893.
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    The Departments sought comment on these costs and assumptions. The 
Departments received comments on these assumptions.
    Several commenters suggested that the Departments' estimate of 
225,000 closed disputes is too low. A few commenters suggested that the 
Departments are underestimating utilization of the Federal IDR process 
and recommended that the Departments analyze the available data from 
States implementing similar policies before the No Surprises Act. 
Several commenters disagreed with the assumption used to calculate the 
225,000 closed disputes, which assumed that TMA IV's vacatur of 
batching regulations and guidance would reduce the volume of disputes 
by 25 percent.
    As discussed in section II.A of this preamble, after consideration 
of comments, the Departments are finalizing the administrative fee 
using the estimated total number of administrative fees paid to 
certified IDR entities, rather than the projected total number of 
closed disputes, to estimate the number of administrative fees to be 
paid under the administrative fee methodology. Federal IDR process data 
show that the monthly average number of administrative fees paid to 
certified IDR entities between February 2023 and July 2023 was 41,000. 
The Departments project this monthly average forward by 12 months to 
estimate 492,000 administrative fees paid in a year.
    After consideration of public comments, the Departments are 
modifying the proposed assumptions and cost estimates as follows. If 
the current administrative fee were to remain applicable, the parties 
would pay approximately $24.6 million in administrative fees annually 
(492,000 administrative fees paid x $50 per party per dispute). As 
stated in section II.A of this preamble, the estimated $24.6 million in 
administrative fee collections if the Departments were to retain the 
current $50 administrative fee would be inadequate for the Departments 
to carry out the Federal IDR process in 2024, as they estimate the 
expenditures to be made in 2024 to be approximately $56.6 million. As 
the Departments are now finalizing an administrative fee amount of $115 
per party per dispute for disputes initiated on or after the effective 
date of these rules, the Departments estimate that the parties will pay 
approximately $56.6 million in administrative fees annually beginning 
in 2024 (492,000 administrative fees paid x $115 per party per 
dispute), which is sufficient to cover the estimated annual 
expenditures of approximately $56.6 million, assuming the number of 
administrative fees paid remains stable year over year and the 
administrative fee amount is not subsequently changed through notice 
and comment rulemaking. Therefore, the costs associated with this 
policy are approximately $32.0 million ($56.6 million minus $24.6 
million if the status quo were to continue).
b. Certified IDR Entity Fee Ranges
    The Departments are finalizing the proposal to set the certified 
IDR entity fee ranges for single and batched determinations, with a 
tiered fee range for batched determinations that exceed 25 line items, 
in notice and comment rulemaking for disputes initiated on or after the 
effective date of these rules in response to the opinion and order in 
TMA IV to ensure that interested parties are sufficiently notified and 
provided an opportunity to comment on the certified IDR entity fee 
ranges. The certified IDR entity fee range for single determinations 
for disputes initiated on or after the effective date of these rules is 
$200 to $840. The certified IDR entity fee range for batched disputes 
initiated on or after the effective date of these rules is $268 to 
$1,173. Further, the tiered fee range for batched determination for 
disputes initiated on or after the effective date of these rules is $75 
to $250.
    While the certified IDR entities are responsible for setting their 
fees for single and batched determinations, the Departments acknowledge 
that the changes to the certified IDR entity fee ranges may impact the 
cost to the parties to participate in the Federal IDR process. The 
Departments anticipate that the vacatur of batching standards by the 
District Court's opinion and order in TMA IV could result in initiating 
parties submitting single and batched disputes in proportions similar 
to those prior to the issuance of the August 2022 guidance, which 
interpreted the now-vacated standards for batching qualified IDR items 
or services. Based on internal data relating to disputes initiated 
prior to the establishment of the now vacated batching criteria that 
were released in August 2022, approximately 70 percent of disputes at 
the time were single disputes and approximately 30 percent were batched 
disputes.\130\ The

[[Page 88517]]

Departments anticipate that, as a result of TMA IV, initiating parties 
will return to the batching practices they engaged in prior to issuance 
of the August 2022 guidance, such as initiating a higher proportion of 
batched disputes and including more items or services within those 
batched disputes.
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    \130\ The Departments estimate that currently approximately 80 
percent of disputes are single disputes and 20 percent of disputes 
are batched disputes, and the Departments anticipate that this ratio 
will return to 70 percent of disputes being single disputes and 30 
percent of disputes being batched disputes beginning in calendar 
year 2024.
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    Based on internal Federal IDR process data, the Departments 
estimate that certified IDR entities collect a certified IDR entity fee 
for approximately 135,000 disputes annually.\131\ Therefore, for the 
purposes of this analysis, the Departments estimate that certified IDR 
entities will collect certified IDR entity fees for approximately 
94,500 single disputes and 40,500 batched disputes annually (135,000 x 
0.70 and 135,000 x 0.30, respectively). The Departments acknowledge 
that each party must pay a certified IDR entity fee to the certified 
IDR entity no later than the time that party submits its offer. 
However, because the non-prevailing party is ultimately responsible for 
the full certified IDR entity fee, which is retained by the certified 
IDR entity for the IDR services it performed, it is the Departments' 
position that providing a per-dispute calculation reasonably captures 
the overall cost of the dispute with respect to the certified IDR 
entity fee without implicating false precision on the amount of 
certified IDR entity fee costs that initiating and non-initiating 
parties ultimately may incur.
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    \131\ While the administrative fee must be paid by the disputing 
party for any dispute for which a certified IDR entity is selected, 
the certified IDR entity fee is only assessed for disputes that are 
determined eligible for the Federal IDR process.
---------------------------------------------------------------------------

    To develop a reasonable estimate for the certified IDR entity fee 
amount for both single and batched disputes, the Departments assume 
that the certified IDR entities will set single determination fixed 
fees that approximate the median value of the finalized fee range and 
will set batched determination fixed fees that approximate the 3rd 
quartile of the finalized fee range.\132\ Therefore, for the purposes 
of this analysis, the Departments estimate that the typical single 
determination fixed fee (range $200-$840) will be approximately $520, 
and that the typical batched determination fixed fee (range $268-
$1,173) will be approximately $947. At an estimated cost of $520 per 
single determination for approximately 94,500 single determinations 
annually, the Departments estimate that single determinations will cost 
disputing parties approximately $49,140,000 annually ($520 x 94,500). 
At an estimated cost of $947 per batched determination for 
approximately 40,500 batched determinations annually, the Departments 
estimate that batched determinations will cost disputing parties 
approximately $38,353,500 annually ($947 x 40,500).
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    \132\ The Departments anticipate that, due to the uncertainty 
around batching practices as a result of the TMA IV opinion and 
order, certified IDR entities will likely choose to increase their 
batched determination fee. Therefore, using the 75th percentile of 
the proposed fee range to calculate the cost of batched 
determinations provides a reasonable approximation of the expected 
increase.
---------------------------------------------------------------------------

    Further, the Departments estimate that using the finalized tiered 
fee range for batched determinations, certified IDR entities will set 
and apply a fixed fee that approximates the average of the proposed 
range ($75-$250) for batched determinations based on the number of line 
items. The Departments estimate that certified IDR entities will 
typically set their tiered fee at approximately $163. The Departments 
acknowledge the uncertainty surrounding the number of line items that 
may be submitted in batched disputes due to the TMA IV opinion and 
order. However, to produce an estimate, and for the purposes of this 
analysis, the Departments estimate that of the total estimated 40,500 
batched disputes, approximately 4,455 batched determinations will 
potentially be subject to at least 2 applications of the tiered fee 
($163 x 2 = $326).\133\ The Departments therefore estimate that this 
subset of approximately 4,455 batched determinations exceeding 25 line 
items will cost disputing parties approximately $1,452,330 annually 
($326 x 4,455). In total, assuming the number of disputes remains 
stable year over year, the Departments estimate the parties will pay 
approximately $89 million in certified IDR entity fees annually in 
accordance with the finalized policies ($49,140,000 for single 
determinations + $38,353,500 for batched determinations + $1,452,330 
for the subset of batched determinations subject to the tiered fee).
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    \133\ Based on internal data the Departments estimate that 
approximately 11 percent of batched disputes submitted prior to the 
establishment of the batching criteria released in August 2022 
exceeded 25 line items. For this reason, we project that a similar 
number of batched disputes with number of line items exceeding 25 
line items will be submitted due to TMA IV.
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    The calendar year 2023 certified IDR entity fee ranges for single 
determinations and batched determinations are $200-$700 and $268-$938, 
respectively. Certified IDR entities currently charge a median fixed 
fee of $549 for single determinations and $770 for batched 
determinations in 2023. Therefore, for approximately 108,000 single 
determinations and 24,840 batched determinations (not subject to the 
batched percentage fee amount) annually,\134\ if current certified IDR 
entity fixed fees remained applicable, the Departments estimate that 
the parties would pay approximately $59,292,000 for single 
determinations ($549 x 108,000) and $19,126,800 for batched 
determinations ($770 x 24,840). Current guidance permits certified IDR 
entities to charge a batching percentage on batched determinations 
based on the number of line items.\135\ For the purposes of this 
analysis, the Departments assume that a subset of approximately 8 
percent of batched determinations, or 2,160 determinations, potentially 
subject to the batched percentages would receive at least a 120 percent 
increase from the median batched determination fixed fee ($770 x 1.20 = 
$924). As such, the Departments estimate that the parties would pay 
approximately $1,995,840 for this subset of batched determinations 
potentially subject to a batching percentage (2,160 x $924), resulting 
in a total cost of approximately $80 million under the current calendar 
year 2023 certified IDR entity fee structure ($59,292,000 for single 
determinations + $19,126,800 for batched determinations + $1,995,840 
for the subset of batched determinations subject to the tiered fee). 
Therefore, taking into account the current costs to the parties 
associated with the current certified IDR entity fee structure, the 
total cost to the parties

[[Page 88518]]

associated with this policy is approximately $9 million ($89 million as 
finalized minus $80 million if the status quo fee ranges were to 
continue).
---------------------------------------------------------------------------

    \134\ The Departments estimate that 80 percent of disputes are 
single disputes and 20 percent are batched disputes (135,000 x 0.80 
and 135,000 x 0.20, respectively). For the purposes of this 
analysis, the Departments estimate that a subset of approximately 8 
percent, or 2,160 batched disputes would be subject to a batching 
percentage (27,000 x 0.08).
    \135\ Without the need to seek further approval, to account for 
the differential in the workload of batched determinations, a 
certified IDR entity may charge the following percentages of its 
approved certified IDR entity batched determination fee (``batching 
percentage'') for batched determinations, which are based on the 
number of line items initially submitted in the batch:
     2-20 line items: 100 percent of the approved batched 
determination fee;
     21-50 line items: 110 percent of the approved batched 
determination fee;
     51-80 line items: 120 percent of the approved batched 
determination fee; and
     81 line items or more: 130 percent of the approved 
batched determination fee.
    See Centers for Medicare & Medicaid Services (October 31, 2022). 
Calendar Year 2023 Fee Guidance for the Federal Independent Dispute 
Resolution Process under the No Surprises Act. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.
---------------------------------------------------------------------------

    The Departments sought comment on these costs and assumptions. The 
Departments did not receive comments on these costs or assumptions and 
are finalizing them as proposed.
3. Uncertainties
    It is unclear whether the Federal IDR process will experience the 
same operating conditions when these rules are effective compared to 
the current state, such as the number of disputes initiated, future 
policy changes finalized after future notice and comment rulemaking, or 
increased or decreased costs by the Departments to carry out the 
Federal IDR process. Due to the need to take point-in-time estimates of 
volume and expenditures for the purposes of developing the analyses in 
the preamble to these rules, there is inherent uncertainty in the 
estimates in these analyses as the data are constantly changing. It is 
difficult to project the impact on the administrative fee amount 
charged to the parties if the Federal IDR process landscape changes. 
Although the Departments have analyzed the Federal IDR process data 
available to inform their projections, it is uncertain whether the 
trends in these data will remain applicable in the future. At the same 
time, the Departments do not know what impact the changes to the 
Federal IDR process as a result of the District Court's opinions and 
orders in TMA IV and TMA III will have on the number of disputes 
initiated and the time it will take certified IDR entities to close 
those disputes. The Departments continue to monitor trends in the 
Federal IDR process and will make any necessary changes through future 
notice and comment rulemaking.
4. Regulatory Review Cost Estimation
    If regulations impose administrative costs on entities, such as the 
time needed to read and interpret rules, regulatory agencies should 
estimate the total cost associated with regulatory review. Based on 
comments received for the July 2021 interim final rules and October 
2021 interim final rules, the Departments estimate that more than 2,100 
entities will review these final rules, including 1,500 issuers, 205 
third party administrators (TPAs), and at least 395 other interested 
parties (for example, State insurance departments, State legislatures, 
industry associations, advocacy organizations, and providers and 
provider organizations). The Departments acknowledge that this 
assumption may understate or overstate the number of entities that will 
review these final rules.
    Using the median hourly wage rate from the Bureau of Labor 
Statistics for a Lawyer (Code 23-1011) to account for average labor 
costs (including a 100 percent increase for the cost of fringe benefits 
and other indirect costs), the Departments estimate that the cost of 
reviewing these final rules will be $130.52 per hour.\136\ The 
Departments estimate, based on an estimated rule length of 
approximately 35,000 words and an average reading speed of 200 to 250 
words per minute, that it will take each reviewing entity approximately 
2.33 hours to review these final rules, with an associated cost of 
approximately $304.11 (2.33 hours x $130.52 per hour). Therefore, the 
Departments estimate that the total burden to review these final rules 
will be approximately 4,893 hours (2,100 reviewers x 2.33 hours per 
reviewer), with an associated cost of approximately $638,631 (2,100 
reviewers x $304.11 per reviewer).
---------------------------------------------------------------------------

    \136\ U.S. Bureau of Labor Statistics (May 1, 2022). May 2022 
National Occupational Employment and Wage Estimates. https://www.bls.gov/oes/current/oes_nat.htm.
---------------------------------------------------------------------------

    The Departments sought comments in the IDR Fees proposed rules on 
this approach to estimating the total burden and cost for interested 
parties to read and interpret the IDR Fees proposed rules, which is the 
same approach used to estimate the total burden and cost for interested 
parties to read and interpret these final rules. The Departments did 
not receive comments on this approach and cost. The Departments are 
finalizing these estimates as proposed.

E. Regulatory Alternatives--Departments of Health and Human Services 
and Labor

    In developing these final rules, the Departments considered various 
alternative approaches.
1. Administrative Fee Amount and Methodology (26 CFR 54.9816-8(d)(2), 
29 CFR 2590.716-8(d)(2), and 45 CFR 149.510(d)(2))
    In its TMA IV opinion and order, the District Court indicated that 
notice and comment rulemaking is necessary to set the administrative 
fee, and the Departments are of the view that alternative approaches 
would lead to unnecessary uncertainty. In addition, providing a 
description of the methodology used to calculate the fee amount and 
proposing the administrative fee amount in the IDR Fees proposed rules 
would increase transparency for the parties and provide interested 
parties the opportunity to be included in the fee setting process. The 
Departments considered that guidance has historically been used to set 
the administrative fee amount based on concerns that the requirement to 
collect fees sufficient to fund the Federal IDR process. The lead time 
required to set the fee amount in notice and comment rulemaking could 
constrain the Departments' responsiveness to program needs and 
artificially inflate the administrative fee amount due to the need to 
ensure adequate funding of the process. However, in light of TMA IV, 
the increased transparency and opportunity for interested parties to 
provide feedback on the administrative fee methodology and amount 
outweighed the potential concern that the administrative fee might be 
artificially inflated by the need to make conservative estimates to set 
the administrative fee amount further in advance through notice and 
comment rulemaking.
    The Departments considered proposing other administrative fee 
policies in the IDR Fees proposed rules, such as those proposed in the 
IDR Operations proposed rules.\137\ However, as discussed in section 
II.A of this preamble, the Departments were unable to propose those 
policies in the IDR Fees proposed rules because they are much more 
comprehensive than the fee-related policies proposed in the IDR Fees 
proposed rules and would require more time to develop and implement if 
finalized. There is an urgency to publish these final rules to be 
effective as close to January 1, 2024 as possible due to the need to 
sufficiently fund the Federal IDR process in 2024. As discussed in 
sections I.E and II.A of these final rules, the current $50 
administrative amount is insufficient to satisfy the statutory 
requirement that the total amount of fees paid for a year be estimated 
to be equal to the amount of expenditures estimated to be made by the 
Departments for the year in carrying out the Federal IDR process. 
Therefore, the Departments deferred those substantial changes to the 
Federal IDR process and administrative fee structure and collection 
procedures to the IDR Operations proposed rules, which are aimed at 
improving Federal IDR process operations and making the process more 
accessible.
---------------------------------------------------------------------------

    \137\ 88 FR 75744.
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2. Certified IDR Entity Fee Ranges (26 CFR 54.9816-8(e)(2), 29 CFR 
2590.716-8(e)(2), and 45 CFR 149.510(e)(2))
    The Departments considered maintaining the current policy that the 
allowable ranges for certified IDR entity

[[Page 88519]]

fees would be set in guidance yearly instead of through notice and 
comment rulemaking. The Departments considered whether continuing to 
set the certified IDR entity fee ranges in guidance would preserve 
necessary flexibility for the certified IDR entities to choose their 
fixed fees within the allowable ranges and submit those fees for 
approval to the Departments, and would allow the Departments time to 
review and approve each certified IDR entity's fees and publish them in 
advance of the year to which the fees apply. The Departments concluded 
that publishing the fee ranges in guidance could be a more expedient 
process compared to rulemaking because of the lack of required comment 
period; however, establishing the fee ranges through notice and comment 
rulemaking would not prevent the Departments from reviewing and 
approving each certified IDR entity's fixed fee amounts in a timely 
manner. The Departments are of the view that there would be no impact 
to the ability of the certified IDR entities to select their fees from 
the established ranges if those ranges were published through notice 
and comment rulemaking. Further, setting the certified IDR entity fee 
ranges through guidance does not allow interested parties to engage 
through the submission of public comments, while the notice and comment 
rulemaking process increases transparency and will afford an 
opportunity for the Departments to consider feedback from interested 
parties on the appropriateness of proposed fee ranges.

F. Paperwork Reduction Act

    These final rules are not subject to the requirements of the 
Paperwork Reduction Act of 1995,\138\ because the Departments 
anticipate that fewer than 10 certified IDR entities will submit 
requests to update their certified IDR entity fees an additional time 
during the calendar year based on current experience operating the 
Federal IDR process, and they do not contain any other collection of 
information as defined in 44 U.S.C. 3502(3). Therefore, clearance by 
OMB under the Paperwork Reduction Act of 1995 is not required.
---------------------------------------------------------------------------

    \138\ 44 U.S.C. 3501 et seq.
---------------------------------------------------------------------------

G. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601, et seq.) 
requires agencies to analyze options for regulatory relief of small 
entities and to prepare a final regulatory flexibility analysis to 
describe the impact of these final rules on small entities, unless the 
head of the agency can certify that the rule would not have a 
significant economic impact on a substantial number of small entities. 
The RFA generally defines a ``small entity'' as (1) a proprietary firm 
meeting the size standards of the Small Business Administration (SBA), 
(2) a not-for-profit organization that is not dominant in its field, or 
(3) a small government jurisdiction with a population of less than 
50,000. States and individuals are not included in the definition of 
``small entity.'' The Departments use a change in revenues of more than 
3 to 5 percent as their measure of significant economic impact on a 
substantial number of small entities. For purposes of the RFA, small 
entities include small businesses, nonprofit organizations, and small 
governmental jurisdictions. The Secretaries of Labor, the Treasury, and 
Health and Human Services certify that these final rules will not have 
a significant economic impact on a substantial number of small 
entities, as presented in the analysis in the following subsections of 
this preamble.
1. Small Entities Regulated
    The provisions in these final rules will affect plans (or their 
TPAs),\139\ health insurance issuers offering group or individual 
health insurance coverage, and providers, facilities, and providers of 
air ambulance services.
---------------------------------------------------------------------------

    \139\ The Departments expect that most self-insured group health 
plans will work with a TPA to meet the requirements.
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    For purposes of analysis under the RFA,\140\ the Departments 
consider an employee benefit plan with fewer than 100 participants to 
be a small entity.\141\ The basis of this definition is found in 
section 104(a)(2) of ERISA,\142\ which permits the Secretary of Labor 
to prescribe simplified annual reports for plans that cover fewer than 
100 participants. Under section 104(a)(3),\143\ the Secretary may also 
provide for exemptions or simplified annual reporting and disclosure 
for welfare benefit plans. Under the authority of section 
104(a)(3),\144\ the Department of Labor has previously issued 
simplified reporting provisions and limited exemptions from reporting 
and disclosure requirements for small plans, including unfunded or 
insured welfare plans, which cover fewer than 100 participants and 
satisfy certain requirements.\145\ While some large employers have 
small plans, small plans are generally maintained by small employers. 
Thus, the Departments are of the view that assessing the impact of 
these final rules on small plans is an appropriate substitute for 
evaluating the effect on small entities. The definition of a small 
entity considered appropriate for this purpose differs, however, from a 
definition of a small business based on size standards issued by the 
SBA \146\ in accordance with the Small Business Act.\147\
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    \140\ 5 U.S.C. 601, et seq.
    \141\ The Department of Labor consulted with the Small Business 
Administration Office of Advocacy in making this determination, as 
required by 5 U.S.C. 603(c) and 13 CFR 121.903(c) in a memo dated 
June 4, 2020.
    \142\ 29 U.S.C. 1024(a)(2).
    \143\ 29 U.S.C. 1024(a)(3).
    \144\ Id.
    \145\ 29 CFR 2520.104-20, 2520.104-21, 2520.104-41, 2520.104-46, 
and 2520.104b-10.
    \146\ 13 CFR 121.201 (2011).
    \147\ 15 U.S.C. 631 et seq. (2011).
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    In 2021, there were 1,500 issuers in the U.S. health insurance 
market \148\ and 205 TPAs.\149\ Health insurance issuers are generally 
classified under the North American Industry Classification System 
(NAICS) code 524114 (Direct Health and Medical Insurance Carriers). 
According to SBA size standards,\150\ entities with average annual 
receipts of $47 million or less are considered small entities for this 
NAICS code. The Departments expect that few, if any, insurance 
companies underwriting health insurance policies fall below these size 
thresholds. Based on data from Medical Loss Ratio (MLR) annual report 
submissions for the 2021 MLR reporting year, approximately 87 out of 
483 issuers of health insurance coverage nationwide had total premium 
revenue of $47 million or less.\151\ However, it should be noted that 
also based on MLR data, over 77 percent of these small companies belong 
to larger holding groups, and many, if not all, of these small 
companies, are likely to have non-health lines of business that would 
result in their revenues exceeding $47 million. The Departments are of 
the view that the same assumptions also apply to TPAs that would be 
affected by these proposed rules.\152\ To produce a conservative 
estimate, for the purposes of this analysis, the Departments assume 4.1 
percent, or 62 issuers and 8 TPAs, of the total of 1,500 health 
insurance

[[Page 88520]]

issuers and 205 TPAs across the country, are considered small 
entities.\153\
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    \148\ Centers for Medicare & Medicaid Services (2022). Medical 
Loss Ratio Data and System Resources. https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.
    \149\ Non-issuer TPAs based on data derived from the 2016 
benefit year reinsurance program contributions.
    \150\ United States Small Business Administration (March 17, 
2023). Table of Size Standards. https://www.sba.gov/document/support--table-size-standards.
    \151\ Centers for Medicare & Medicaid Services (2022). Medical 
Loss Ratio Data and System Resources. https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.
    \152\ The Departments are of the view that most TPAs are also 
issuers.
    \153\ These numbers are calculated as follows: 77 percent of 
small companies belong to larger holding groups, so 23 percent do 
not and would be small entities. 87 issuers x 0.23 = 20. 20/483 = 
4.1 percent. Applying the 4.1 percent to 1,500 issuers and 205 TPAs 
total = 62 small issuers and 8 small TPAs.
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    These final rules also affect health care providers and facilities 
due to the proposed requirements related to the certified IDR entity 
and administrative fees. The Departments estimate that 140,270 
physicians, on average, bill on an out-of-network basis annually.\154\ 
The number of small physician providers is estimated based on the SBA's 
size standards. The size standard applied for providers is NAICS 62111 
(Offices of Physicians), for which a business with less than $16 
million in receipts is considered to be small. By this standard, the 
Departments estimate that 47.2 percent or 66,207 physicians are 
considered small under the SBA's size standards.\155\ The size standard 
for facilities is NAICS 62211 (General Medical and Surgical Hospitals), 
for which a business with less than $47 million in receipts is 
considered to be small. By this standard, the Departments estimate that 
43.5 percent or 1,113 facilities are considered small under the SBA's 
size standards.\156\ These final rules are also expected to affect non-
physician providers who bill on an out-of-network basis. The 
Departments lack data on the number of non-physician providers who will 
be impacted by these final rules.
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    \154\ See 86 FR 56051 for more information on this estimate.
    \155\ Based on data from the NAICS Association for NAICS code 
62111, the Departments estimate the percent of businesses within the 
industry of Offices of Physicians with less than $16 million in 
annual sales. United States Census Bureau (May 2021). 2017 SUSB 
Annual Data Tables by Establishment Industry. https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html.
    \156\ Based on data from the NAICS Association for NAICS code 
62211, the Departments estimate the percent of businesses within the 
industry of General Medical and Surgical Hospitals with less than 
$47 million in annual sales. United States Census Bureau (May 2021). 
2017 SUSB Annual Data Tables by Establishment Industry. https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html.
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    The Departments do not have the same level of data for the air 
ambulance subsector. In 2020, the total revenue of providers of air 
ambulance services was estimated to be $4.2 billion, with 1,114 air 
ambulance bases.\157\ This results in an industry average of $3.8 
million per air ambulance base. Based on a 2020 U.S.C.-Brookings 
Schaeffer report on air ambulance services,\158\ by 2017, large private 
equity firms controlled roughly two-thirds of the air ambulance market.
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    \157\ ASPE Office of Health Policy (September 10, 2021). Air 
Ambulance Use and Surprise Billing. https://aspe.hhs.gov/sites/default/files/2021-09/aspe-air-ambulance-ib-09-10-2021.pdf.
    \158\ Adler, L., Hannick, K., and Lee, S. ``High Air Ambulance 
Charges Concentrated in Private Equity-Owned Carriers.'' U.S.C.-
Brookings Schaffer Initiative for Health Policy. October 13, 2020. 
https://www.brookings.edu/articles/high-air-ambulance-charges-concentrated-in-private-equity-owned-carriers/.
---------------------------------------------------------------------------

    Although based on the Departments' experience operating the Federal 
IDR process, significantly fewer than 67,320 small providers and 
facilities have accessed the process to date,\159\ the Departments lack 
adequate data to better inform the number of small providers impacted 
by these final rules. Therefore, although the estimate of 67,320 small 
providers and facilities is likely a significant overestimate of the 
number of small providers and facilities impacted by these final rules, 
the Departments use this number of small providers and facilities in 
this analysis to be conservative.\160\
---------------------------------------------------------------------------

    \159\ See U.S. Department of Health and Human Services, U.S. 
Department of Labor, and U.S. Department of the Treasury, Partial 
Report on the Federal Independent Dispute Resolution (IDR) Process, 
October 1-December 31, 2022. (n.d.). https://www.cms.gov/files/document/partial-report-idr-process-octoberdecember-2022.pdf.
    \160\ Based on the Departments' experience operating the Federal 
IDR process, the estimate of 67,320 small providers and facilities 
is likely a significant overestimate, and therefore the Departments 
assume that this estimate accounts for any non-physician providers 
who may be impacted by these rules for whom the Departments lack 
data to estimate.
---------------------------------------------------------------------------

    Additionally, as discussed in the Partial Report on the Federal 
Independent Dispute Resolution (IDR) Process, October 1-December 31, 
2022, the top 10 initiating parties (or entities acting on behalf of 
initiating parties) are large companies that initiate approximately 85 
percent of disputes, and the top 10 non-initiating parties are large 
companies that are initiated against in approximately 95 percent of 
disputes.\161\ Therefore, for purposes of this analysis, the 
Departments assume that only 15 percent of all disputes involve small 
providers. The 5 percent of all disputes that do not involve the top 10 
non-initiating parties could involve any of the 1,695 issuers and TPAs 
that are not the top 10 non-initiating parties (1,500 issuers and 205 
TPAs total -10 top non-initiating parties = 1,695 remaining issuers and 
TPAs). The Departments assume that the proportion of small issuers and 
TPAs to non-top 10 issuers and TPAs is the same as the proportion of 
disputes involving small issuers and TPAs to disputes involving non-top 
10 issuers and TPAs, as the volume of disputes issuers and TPAs are 
involved in should be proportional to the size of their enrollment. 
Taking into consideration these estimates of the small entities, the 
policies in these rules that result in an increased burden to small 
entities are described below.
---------------------------------------------------------------------------

    \161\ Top initiating parties represent hundreds of individual 
providers across multiple states. Top non-initiating parties operate 
across multiple states and market segments. See U.S. Department of 
Health and Human Services, U.S. Department of Labor, and U.S. 
Department of the Treasury, Partial Report on the Federal 
Independent Dispute Resolution (IDR) Process, October 1-December 31, 
2022. (n.d.). https://www.cms.gov/files/document/partial-report-idr-process-octoberdecember-2022.pdf.
---------------------------------------------------------------------------

2. Compliance Costs
    The Departments are finalizing the policy to establish the 
administrative fee amount in notice and comment rulemaking and are 
finalizing that the administrative fee amount for disputes initiated on 
or after the effective date of these rules is $115 per party per 
dispute. The annual burden per small provider or facility associated 
with this policy is $115,\162\ and the annual burden per small issuer/
TPA is $805.\163\ For more details, please refer to the Regulatory 
Impact Analysis in these final rules.
---------------------------------------------------------------------------

    \162\ 492,000 administrative fees paid/2 types of parties = 
246,000 administrative fees paid by providers. 246,000 
administrative fees paid by providers -85 percent (209,100) 
administrative fees paid for disputes initiated by the top 10 
initiating parties = 36,900 administrative fees paid for disputes 
initiated by other initiating parties. 36,900 disputes/67,320 small 
providers and facilities = approximately 0.5 disputes initiated per 
small provider or facility annually. For simplicity and to be 
conservative, the Departments assume 1 dispute per provider or 
facility. 1 dispute x $115 per dispute = $115 per small provider or 
facility.
    \163\ 492,000 administrative fees paid/2 types of parties = 
246,000 administrative fees paid by issuers/TPAs. 246,000 
administrative fees paid by issuers/TPAs -95 percent (233,700) 
administrative fees paid for disputes initiated against the top 10 
non-initiating parties = 12,300 administrative fees paid for 
disputes initiated against other non-initiating parties. 12,300 
disputes/1,695 issuers/TPAs = approximately 7 disputes per small 
issuer/TPA annually. 7 disputes x $115 per dispute = $805.

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

[[Page 88521]]

    The Departments are finalizing the policy to establish the 
certified IDR entity fee ranges in notice and comment rulemaking and 
are finalizing that the ranges are $200-$840 for single determinations 
and $268-$1,173 for batched determinations, with a $75-$250 tiered fee 
range for disputes that contain more than 25 line items. The annual 
burden per small provider or facility associated with this policy is 
$657,\164\ and the annual burden per small issuer/TPA is $1,971.\165\ 
For more details, please refer to the Regulatory Impact Analysis in 
these final rules.
---------------------------------------------------------------------------

    \164\ Data from the first full year of Federal IDR process 
operations show that initiating parties prevail in approximately 70 
percent of disputes. See Centers for Medicare & Medicaid Services 
(April 27, 2023). Federal Independent Dispute Resolution Process--
Status Update. Therefore, as the prevailing party's certified IDR 
entity fee is refunded per 26 CFR 54.9816-8T(d)(1)(ii), 29 CFR 
2590.716-8(d)(1)(ii), and 45 CFR 149.510(d)(1)(ii), initiating 
parties only pay the certified IDR entity fee for 30 percent of 
disputes, while non-initiating parties pay for the other 70 
percent.https://www.cms.gov/files/document/federal-idr-processstatus-update-april-2023.pdf. The Departments estimate based 
on internal data that certified IDR entity fees are paid for 
approximately 135,000 disputes annually. Of those 135,000 disputes, 
the Departments estimate that 30 percent (or 40,500) have their 
certified IDR entity fees paid by providers/facilities, and 70 
percent (or 94,500) have their certified IDR entity fees paid by 
issuers/TPAs. Of the 40,500 disputes for which the certified IDR 
entity fee is paid by providers or facilities, 85 percent (or 
34,425) are paid by the top 10 initiating parties. The remaining 15 
percent (or 6,075) are paid by other initiating parties. 6,075 
disputes/67,320 small providers and facilities = less than 1 
certified IDR entity fee paid per small provider or facility. For 
simplicity and to be conservative, the Departments assume 1 
certified IDR entity fee paid per small provider or facility. The 
average certified IDR entity fee across both single and batched 
disputes, including the tiered batched fee, in 2024 is $657 as 
calculated in accordance with these final rules.
    \165\ Of the 94,500 disputes that have their certified IDR 
entity fees paid by issuers, 95 percent (or 89,775) are paid by the 
top 10 non-initiating parties. The remaining 5 percent (or 4,725) 
are paid by other non-initiating parties. 4,725 disputes/1,695 
issuers/TPAs = approximately 3 certified IDR entity fees paid per 
small issuer/TPA. The average certified IDR entity fee across both 
single and batched disputes, including the tiered batched fee, in 
2024 is $657 as calculated in accordance with these final rules. 3 
disputes x $657 per dispute = $1,971 per small issuer/TPA.
---------------------------------------------------------------------------

    Thus, the per-entity annual cost for small providers and facilities 
is $772, and the per-entity annual cost for small issuers and TPAs is 
$2,776. The total estimated annual cost for small providers and 
facilities is $51,971,040, and the total estimated annual cost for 
small issuers and TPA is $194,320. See Tables 2 and 3. 
[GRAPHIC] [TIFF OMITTED] TR21DE23.001

 [GRAPHIC] [TIFF OMITTED] TR21DE23.002

3. Analysis and Certification Statement
    The annual cost per small provider or facility of $772 is 
approximately 0.07 percent of the average annual receipts per small 
provider and approximately 0.04 percent of the average annual receipts 
per small facility. The Departments anticipate that small providers and 
facilities would be unlikely to initiate disputes and thereby incur 
these costs unless they anticipate prevailing in the dispute and 
receiving payment from plans or issuers that exceed the costs incurred 
to initiate the dispute. Additionally, data from the public reports on 
the Federal IDR process released to date by the Departments show that 
providers and facilities prevail in approximately 70 percent of 
disputes.\166\ Therefore, small providers and facilities are likely to 
experience an increase in receipts commensurate or larger than the 
increase in costs.
---------------------------------------------------------------------------

    \166\ See U.S. Department of Health and Human Services, U.S. 
Department of Labor, and U.S. Department of the Treasury, Partial 
Report on the Federal Independent Dispute Resolution (IDR) Process, 
October 1-December 31, 2022. (n.d.). https://www.cms.gov/files/document/partial-report-idr-process-octoberdecember-2022.pdf.
---------------------------------------------------------------------------

    The annual cost per small issuer/TPA of $2,776 is approximately 
0.15 percent of the average annual receipts per small issuer/TPA. While 
small issuers/TPAs could pass on these increased costs to consumers in 
the form of higher premiums (or for TPAs, higher administration fees), 
resulting in an increase in receipts commensurate with the increase in 
costs, the actual increase in costs and subsequent impact on revenue 
would be de minimis as the annual cost per small issuer/TPA is so 
small. Additionally, the Departments anticipate that by batching 
qualified IDR items and services, there may be a reduction in the per-
service cost of the Federal IDR process to providers of certain 
services and specialties, and potentially the aggregate administrative 
costs, because the Federal IDR process is likely to exhibit at least 
some economies of scale.\167\
---------------------------------------------------------------------------

    \167\ Fielder, M., Adler, L., Ippolito, B. (March 16, 2021). 
Recommendations for Implementing the No Surprises Act. U.S.C.-
Brookings Schaeffer on Health Policy. https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2021/03/16/recommendations-for-implementing-the-no-surprises-act/.
---------------------------------------------------------------------------

    As its measure of significant economic impact on a substantial 
number of small entities, HHS uses a change in revenue of more than 3 
to 5

[[Page 88522]]

percent. The Departments are of the view that this threshold will not 
be reached by the requirements in these final rules, given that the 
annual per-entity cost of $2,776 per small issuer/TPA represents 0.15 
percent of the average annual receipts for a small issuer/TPA and the 
annual per-entity cost of $772 per small provider/facility represents 
0.07 percent and 0.04 percent of the average annual receipts for a 
small provider or facility, respectively.\168\ Therefore, the 
Secretaries of Labor, the Treasury, and Health and Human Services 
hereby certify that these final rules will not have a significant 
economic impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \168\ United States Census Bureau (March 2020). 2017 SUSB Annual 
Data Tables by Establishment Industry, Data by Enterprise Receipt 
Size. https://www.census.gov/data/tables/2020/econ/susb/2020-susb-annual.html.
---------------------------------------------------------------------------

    The Departments sought comment on this analysis and sought 
information on the number of small plans (or TPAs), issuers, providers, 
and facilities that may be affected by the provisions in the IDR Fees 
proposed rules. The Departments did not receive comments on this 
analysis. The Departments received comments on the impact of the 
provisions in the IDR Fees proposed rules on small providers and 
respond to those comments in section II of this preamble.
    In addition, section 1102(b) of the Social Security Act requires 
the Departments to prepare a regulatory impact analysis if a rule may 
have a significant impact on the operations of a substantial number of 
small rural hospitals. This analysis must conform to the provisions of 
section 603 of the RFA.\169\ For purposes of section 1102(b) of the 
Act, the Departments define a small rural hospital as a hospital that 
is located outside of a metropolitan statistical area and has fewer 
than 100 beds. These final rules are not subject to section 1102 of the 
Act because the IDR Fees proposed rules were not proposed under title 
XVIII, title XIX, or part B of title XI of the Act, and therefore 
section 1102(b) of the Act does not apply.
---------------------------------------------------------------------------

    \169\ 5 U.S.C. 603.
---------------------------------------------------------------------------

H. Special Analyses--Department of the Treasury

    Pursuant to the Memorandum of Agreement, Review of Treasury 
Regulations under Executive Order 12866 (June 9, 2023), tax regulatory 
actions issued by the IRS are not subject to the requirements of 
section 6 of Executive Order 12866, as amended. Therefore, a regulatory 
impact assessment is not required. Pursuant to section 7805(f) of the 
Code,\170\ these regulations have been submitted to the Chief Counsel 
for Advocacy of the Small Business Administration for comment on their 
impact on small business.
---------------------------------------------------------------------------

    \170\ 26 U.S.C. 7805(f).
---------------------------------------------------------------------------

I. Unfunded Mandates Reform Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) 
\171\ requires that agencies assess anticipated costs and benefits and 
take certain other actions before issuing a proposed rule or any final 
rule for which a general notice of proposed rulemaking was published 
that includes any Federal mandate that may result in expenditures in 
any 1 year by State, local, or tribal governments, in the aggregate, or 
by the private sector, of $100 million in 1995 dollars, updated 
annually for inflation. That threshold is approximately $177 million in 
2023. As discussed earlier in the RIA, plans, issuers, TPAs, and 
providers, facilities, and providers of air ambulance services will 
incur costs to comply with the provisions of these final rules. The 
Departments estimate the combined impact on State, local, or tribal 
governments and the private sector will not be above the threshold.
---------------------------------------------------------------------------

    \171\ 2 U.S.C. 1511.
---------------------------------------------------------------------------

J. Federalism

    Executive Order 13132 outlines the fundamental principles of 
federalism. It requires adherence to specific criteria by Federal 
agencies in formulating and implementing policies that have 
``substantial direct effects'' on the States, the relationship between 
the National Government and States, or on the distribution of power and 
responsibilities among the various levels of government. Federal 
agencies issuing regulations that have these federalism implications 
must consult with State and local officials and describe the extent of 
their consultation and the nature of the concerns of State and local 
officials in the preamble to the IDR Fees proposed rules.
    The Departments do not anticipate that these final rules will have 
federalism implications or limit the policy-making discretion of the 
States in compliance with the requirement of Executive Order 13132.
    State and local government health plans may be subject to the 
Federal IDR process where a specified State law or All-Payer Model 
Agreement does not apply. The No Surprises Act authorizes States to 
enforce the new requirements, including those related to balance 
billing, for 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 final rules 
are substantially mitigated because some States have their own process 
for determining the total amount payable under a plan or coverage for 
out-of-network emergency services and to out-of-network providers for 
patient visits to in-network facilities for non-emergency services. 
Where a State has a specified State law, the State law, rather than the 
Federal IDR process, will apply.
    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 National 
Association of Insurance Commissioners and consulting with State 
insurance officials on an individual basis.
    While developing these rules, the Departments attempted to balance 
the States' interests in regulating health insurance issuers with the 
need to ensure market stability. By doing so, the Departments complied 
with the requirements of Executive Order 13132.
    In accordance with Federal law, a summary of these rules may be 
found at https://www.regulations.gov/.

List of Subjects

26 CFR Part 54

    Excise taxes, Pensions, Reporting and recordkeeping requirements.

29 CFR Part 2590

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

[[Page 88523]]

45 CFR Part 149

    Balance billing, Health care, Health insurance, Reporting, and 
recordkeeping requirements, Surprise billing.

Douglas W. O'Donnell,
Deputy Commissioner for Services and Enforcement, Internal Revenue 
Service.
Lily L. Batchelder,
Assistant Secretary of the Treasury (Tax Policy), Department of the 
Treasury.
Lisa M. Gomez
Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.
Xavier Becerra,
Secretary, Department of Health and Human Services.

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

    For the reasons stated in the preamble, the Department of the 
Treasury and the IRS amend 26 CFR part 54 as set forth below:

PART 54--PENSION EXCISE TAXES

0
1. The authority citation for part 54 is amended by adding an entry for 
Sec.  54.9816-8 in numerical order to read in part as follows:

    Authority: 26 U.S.C. 7805 * * *
* * * * *
    Section 54.9816-8 also issued under 26 U.S.C. 9816.
* * * * *

0
2. Section 54.9816-8 is amended by revising paragraphs (a), (b), (c) 
introductory text, (d), and (e) and adding headings for paragraphs (f) 
and (g) to read as follows:


Sec.  54.9816-8  Independent dispute resolution process.

    (a) Scope and definitions. For further guidance, see Sec.  54.9816-
8T(a).
    (b) Determination of payment amount through open negotiation and 
initiation of the Federal IDR process. For further guidance, see Sec.  
54.9816-8T(b).
    (c) Federal IDR process following initiation. For further guidance, 
see Sec.  54.9816-8T(c) introductory text through (c)(3).
* * * * *
    (d) Costs of IDR process--(1) Certified IDR entity fee. For further 
guidance, see Sec.  54.9816-8T(d)(1).
    (2) Administrative fee. (i) For further guidance, see Sec.  
54.9816-8T(d)(2)(i).
    (ii) The administrative fee amount will be established through 
notice and comment rulemaking no more frequently than once per calendar 
year in a manner such that the total administrative fees paid for a 
year are estimated to be equal to the amount of expenditures estimated 
to be made by the Secretaries of the Treasury, Labor, and Health and 
Human Services for the year in carrying out the Federal IDR process. 
The administrative fee amount will remain in effect until changed by 
notice and comment rulemaking. For disputes initiated on or after 
January 22, 2024, the administrative fee amount is $115 per party per 
dispute.
    (3) Severability. (i) Any provision of this paragraph (d) or 
paragraphs (e)(2)(vii) and (viii) of this section held to be invalid or 
unenforceable as applied to any person or circumstance shall be 
construed so as to continue to give the maximum effect to the provision 
permitted by law, including as applied to persons not similarly 
situated or to dissimilar circumstances, unless such holding is that 
the provision of this paragraph (d) or paragraphs (e)(2)(vii) and 
(viii) is invalid and unenforceable in all circumstances, in which 
event the provision shall be severable from the remainder of this 
paragraph (d) or paragraphs (e)(2)(vii) and (viii) and shall not affect 
the remainder thereof.
    (ii) The provisions in this paragraph (d) and paragraphs 
(e)(2)(vii) and (viii) of this section are intended to be severable 
from each other.
    (e) Certification of IDR entity--(1) In general. For further 
guidance see Sec.  54.9816-8T(e)(1).
    (2) Requirements. (i) For further guidance, see Sec.  54.8616-
8T(e)(2)(i) through (vi).
    (ii) through (vi) [Reserved]
    (vii) Provide, no more frequently than once per calendar year, a 
fixed fee for single determinations and a separate fixed fee for 
batched determinations, as well as additional fixed tiered fees for 
batched determinations, if applicable, within the upper and lower 
limits for each, as established by the Secretary in notice and comment 
rulemaking. The certified IDR entity fee ranges established by the 
Secretary in rulemaking will remain in effect until changed by notice 
and comment rulemaking. The certified IDR entity may not charge a fee 
outside the limits set forth in rulemaking unless the certified IDR 
entity or IDR entity seeking certification receives advance written 
approval from the Secretary to charge a fixed fee beyond the upper or 
lower limits by following the process described in paragraph 
(e)(2)(vii)(A) of this section. A certified IDR entity may also seek 
advance written approval from the Secretary to update its fees one 
additional time per calendar year by meeting the requirements described 
in paragraph (e)(2)(vii)(A). The Secretary will approve a request to 
charge a fixed fee beyond the upper or lower limits for fees as set 
forth in rulemaking or to update the fixed fee during the calendar year 
if, in their discretion, they determine the information submitted by a 
certified IDR entity or IDR entity seeking certification demonstrates 
that the proposed change to the certified IDR entity fee would ensure 
the financial viability of the certified IDR entity or IDR entity 
seeking certification and would not impose on parties an undue barrier 
to accessing the Federal IDR process.
    (A) In order for the certified IDR entity or IDR entity seeking 
certification to receive the Secretary's written approval to charge a 
fixed fee beyond the upper or lower limits for fees as set forth in 
rulemaking or to update the fixed fee during the calendar year, the 
certified IDR entity or IDR entity seeking certification must submit to 
the Secretary, in the form and manner specified by the Secretary:
    (1) The fixed 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 
fixed fee, or that require a change to the fixed fee during the 
calendar year, as applicable; and
    (3) A detailed description that reasonably explains how the 
alternative fixed fee or the change to the fixed fee during the 
calendar year, as applicable, will be used to mitigate the effects of 
those circumstances.
    (B) [Reserved]
    (viii) For disputes initiated on or after January 22, 2024, 
certified IDR entities are permitted to charge a fixed certified IDR 
entity fee for single determinations within the range of $200 to $840, 
and a fixed certified IDR entity fee for batched determinations within 
the range of $268 to $1,173, unless a fee outside such ranges is 
approved by the Secretary, pursuant to paragraph (e)(2)(vii)(A) of this 
section. As part of the batched determination fee, certified IDR 
entities are permitted to charge an additional fixed tiered fee within 
the range of $75 to $250 for every additional 25 line items within a 
batched dispute, beginning with the 26th line item. The ranges for the 
certified IDR entity fees for single and batched determinations will 
remain in effect until changed by notice and comment rulemaking.
    (ix) For further guidance, see Sec.  54.9816-8T(e)(2)(ix) through 
(xii).
    (x) through (xii) [Reserved]

[[Page 88524]]

    (f) Reporting of information relating to the Federal IDR process. * 
* *
* * * * *
    (g) Extension of time periods for extenuating circumstances. * * *
* * * * *

0
3. Section 54.9816-8T is amended by:
0
a. Revising paragraph (d)(2)(ii);
0
b. Adding paragraph (d)(3);
0
c. Removing the semicolon at the end of paragraphs (e)(2)(iii) and (vi) 
and adding a period in its place;
0
d. Revising paragraph (e)(2)(vii);
0
e. Redesignating paragraphs (e)(2)(viii) through (xi) as paragraphs 
(e)(2)(ix) through (xii);
0
f. Adding new paragraph (e)(2)(viii);
0
g. Removing the semicolon at the end of newly redesignated paragraphs 
(e)(2)(ix) and (x) and adding a period in its place; and
0
h. Removing ``; and'' at the end of newly redesignated paragraph 
(e)(2)(xii) and adding a period in its place.
    The revisions and additions read as follows:


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

* * * * *
    (d) * * *
    (2) * * *
    (ii) For further guidance, see Sec.  54.9816-8(d)(2)(ii).
    (3) Severability. For further guidance, see Sec.  54.9816-8(d)(3).
    (e) * * *
    (2) * * *
    (vii) For further guidance, see Sec.  54.9816-8(e)(2)(vii).
    (viii) For further guidance, see Sec.  54.9816-8(e)(2)(viii).
* * * * *

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Chapter XXV

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

PART 2590--RULES AND REGULATIONS FOR GROUP HEALTH PLANS

0
4. The authority citation for part 2590 continues to read as follows:

    Authority: 29 U.S.C. 1027, 1059, 1135, 1161-1168, 1169, 1181-
1183, 1181 note, 1185, 1185a-n, 1191, 1191a, 1191b, and 1191c; sec. 
101(g), Pub. L. 104-191, 110 Stat. 1936; sec. 401(b), Pub. L. 105-
200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 512(d), Pub. L. 110-
343, 122 Stat. 3881; sec. 1001, 1201, and 1562(e), Pub. L. 111-148, 
124 Stat. 119, as amended by Pub. L. 111-152, 124 Stat. 1029; 
Division M, Pub. L. 113-235, 128 Stat. 2130; Pub. L. 116-260, 134 
Stat. 1182; Secretary of Labor's Order 1-2011, 77 FR 1088 (Jan. 9, 
2012).


0
5. Section 2590.716-8 is amended by:
0
a. Revising paragraph (d)(2)(ii);
0
b. Adding paragraph (d)(3);
0
c. Removing the semicolon at the end of paragraphs (e)(2)(iii) and (vi) 
and adding a period in its place;
0
d. Revising paragraph (e)(2)(vii);
0
e. Redesignating paragraphs (e)(2)(viii) through (xi) as paragraphs 
(e)(2)(ix) through (xii);
0
f. Adding new paragraph (e)(2)(viii);
0
g. Removing the semicolon at the end of newly redesignated paragraphs 
(e)(2)(ix) and (x) and adding a period in its place; and
0
h. Removing ``; and'' at the end of newly redesignated paragraph 
(e)(2)(xii) and adding a period in its place.
    The revisions and additions read as follows:


Sec.  2590.716-8  Independent dispute resolution process.

* * * * *
    (d) * * *
    (2) * * *
    (ii) The administrative fee amount will be established through 
notice and comment rulemaking no more frequently than once per calendar 
year in a manner such that the total administrative fees paid for a 
year are estimated to be equal to the amount of expenditures estimated 
to be made by the Secretaries of the Treasury, Labor, and Health and 
Human Services for the year in carrying out the Federal IDR process. 
The administrative fee amount will remain in effect until changed by 
notice and comment rulemaking. For disputes initiated on or after 
January 22, 2024, the administrative fee amount is $115 per party per 
dispute.
    (3) Severability. (i) Any provision of this paragraph (d) or 
paragraphs (e)(2)(vii) and (viii) of this section held to be invalid or 
unenforceable as applied to any person or circumstance shall be 
construed so as to continue to give the maximum effect to the provision 
permitted by law, including as applied to persons not similarly 
situated or to dissimilar circumstances, unless such holding is that 
the provision of this paragraph (d) or paragraphs (e)(2)(vii) and 
(viii) is invalid and unenforceable in all circumstances, in which 
event the provision shall be severable from the remainder of this 
paragraph (d) or paragraphs (e)(2)(vii) and (viii) and shall not affect 
the remainder thereof.
    (ii) The provisions in this paragraph (d) and paragraphs 
(e)(2)(vii) and (viii) of this section are intended to be severable 
from each other.
    (e) * * *
    (2) * * *
    (vii) Provide, no more frequently than once per calendar year, a 
fixed fee for single determinations and a separate fixed fee for 
batched determinations, as well as an additional fixed tiered fee for 
batched determinations, if applicable, within the upper and lower 
limits for each, as established by the Secretary in notice and comment 
rulemaking. The certified IDR entity fee ranges established by the 
Secretary in rulemaking will remain in effect until changed by notice 
and comment rulemaking. The certified IDR entity may not charge a fee 
outside the limits set forth in rulemaking unless the certified IDR 
entity or IDR entity seeking certification receives advance written 
approval from the Secretary to charge a fixed fee beyond the upper or 
lower limits by following the process described in paragraph 
(e)(2)(vii)(A) of this section. A certified IDR entity may also seek 
advance written approval from the Secretary to update its fees one 
additional time per calendar year by meeting the requirements described 
in paragraph (e)(2)(vii)(A). The Secretary will approve a request to 
charge a fixed fee beyond the upper or lower limits for fees as set 
forth in rulemaking, or to update the fixed fee during the calendar 
year if, in their discretion, they determine the information submitted 
by a certified IDR entity or IDR entity seeking certification 
demonstrates that the proposed change to the certified IDR entity fee 
would ensure the financial viability of the certified IDR entity or IDR 
entity seeking certification and would not impose on parties an undue 
barrier to accessing the Federal IDR process.
    (A) In order for the certified IDR entity or IDR entity seeking 
certification to receive the Secretary's written approval to charge a 
fixed fee beyond the upper or lower limits for fees as set forth in 
rulemaking or to update the fixed fee during the calendar year, the 
certified IDR entity or IDR entity seeking certification must submit to 
the Secretary, in the form and manner specified by the Secretary:
    (1) The fixed 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 
fixed fee, or that require a change to the fixed fee during the 
calendar year, as applicable; and
    (3) A detailed description that reasonably explains how the 
alternative fixed fee or the change to the fixed fee

[[Page 88525]]

during the calendar year, as applicable, will be used to mitigate the 
effects of those circumstances.
    (B) [Reserved]
    (viii) For disputes initiated on or after January 22, 2024, 
certified IDR entities are permitted to charge a fixed certified IDR 
entity fee for single determinations within the range of $200 to $840, 
and a fixed certified IDR entity fee for batched determinations within 
the range of $268 to $1,173, unless a fee outside such ranges is 
approved by the Secretary pursuant to paragraph (e)(2)(vii)(A) of this 
section. As part of the batched determination fee, certified IDR 
entities are permitted to charge an additional fixed tiered fee within 
the range of $75 to $250 for every additional 25 line items within a 
batched dispute, beginning with the 26th line item. The ranges for the 
certified IDR entity fees for single and batched determinations will 
remain in effect until changed by notice and comment rulemaking.
* * * * *

DEPARTMENT OF HEALTH AND HUMAN SERVICES

49 CFR Subtitle A

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

PART 149--SURPRISE BILLING AND TRANSPARENCY REQUIREMENTS

0
6. The authority citation for part 149 continues to read as follows:

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


0
7. Section 149.510 is amended by:
0
a. Revising paragraph (d)(2)(ii);
0
b. Adding paragraph (d)(3);
0
c. Removing the semicolon at the end of paragraphs (e)(2)(iii) and (vi) 
and adding a period in its place;
0
d. Revising paragraph (e)(2)(vii);
0
e. Redesignating paragraphs (e)(2)(viii) through (xi) as paragraphs 
(e)(2)(ix) through (xii);
0
f. Adding new paragraph (e)(2)(viii);
0
g. Removing the semicolon at the end of newly redesignated paragraphs 
(e)(2)(ix) and (x) and adding a period in its place; and
0
h. Removing ``; and'' at the end of newly redesignated paragraph 
(e)(2)(xii) and adding a period in its place.
    The revisions and additions read as follows:


Sec.  149.510  Independent dispute resolution process.

* * * * *
    (d) * * *
    (2) * * *
    (ii) The administrative fee amount will be established through 
notice and comment rulemaking no more frequently than once per calendar 
year in a manner such that the total administrative fees paid for a 
year are estimated to be equal to the amount of expenditures estimated 
to be made by the Secretaries of the Treasury, Labor, and Health and 
Human Services for the year in carrying out the Federal IDR process. 
The administrative fee amount will remain in effect until changed by 
notice and comment rulemaking. For disputes initiated on or after 
January 22, 2024, the administrative fee amount is $115 per party per 
dispute.
    (3) Severability. (i) Any provision of this paragraph (d) or 
paragraphs (e)(2)(vii) and (viii) of this section held to be invalid or 
unenforceable as applied to any person or circumstance shall be 
construed so as to continue to give the maximum effect to the provision 
permitted by law, including as applied to persons not similarly 
situated or to dissimilar circumstances, unless such holding is that 
the provision of this paragraph (d) or paragraphs (e)(2)(vii) and 
(viii) is invalid and unenforceable in all circumstances, in which 
event the provision shall be severable from the remainder of this 
paragraph (d) or paragraphs (e)(2)(vii) and (viii) and shall not affect 
the remainder thereof.
    (ii) The provisions in this paragraph (d) and paragraphs 
(e)(2)(vii) and (viii) of this section are intended to be severable 
from each other.
    (e) * * *
    (2) * * *
    (vii) Provide, no more frequently than once per calendar year, a 
fixed fee for single determinations and a separate fixed fee for 
batched determinations, as well as an additional fixed tiered fee for 
batched determinations, if applicable, within the upper and lower 
limits for each, as established by the Secretary in notice and comment 
rulemaking. The certified IDR entity fee ranges established by the 
Secretary in rulemaking will remain in effect until changed by notice 
and comment rulemaking. The certified IDR entity may not charge a fee 
outside the limits set forth in rulemaking unless the certified IDR 
entity or IDR entity seeking certification receives advance written 
approval from the Secretary to charge a fixed fee beyond the upper or 
lower limits by following the process described in paragraph 
(e)(2)(vii)(A) of this section. A certified IDR entity may also seek 
advance written approval from the Secretary to update its fees one 
additional time per calendar year by meeting the requirements described 
in paragraph (e)(2)(vii)(A). The Secretary will approve a request to 
charge a fixed fee beyond the upper or lower limits for fees as set 
forth in rulemaking or to update the fixed fee during the calendar year 
if, in their discretion, they determine the information submitted by a 
certified IDR entity or IDR entity seeking certification demonstrates 
that the proposed change to the certified IDR entity fee would ensure 
the financial viability of the certified IDR entity or IDR entity 
seeking certification and would not impose on parties an undue barrier 
to accessing the Federal IDR process.
    (A) In order for the certified IDR entity or IDR entity seeking 
certification to receive the Secretary's written approval to charge a 
fixed fee beyond the upper or lower limits for fees as set forth in 
rulemaking or to update the fixed fee during the calendar year, the 
certified IDR entity or IDR entity seeking certification must submit to 
the Secretary, in the form and manner specified by the Secretary:
    (1) The fixed 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 
fixed fee, or that require a change to the fixed fee during the 
calendar year, as applicable; and
    (3) A detailed description that reasonably explains how the 
alternative fixed fee or the change to the fixed fee during the 
calendar year, as applicable, will be used to mitigate the effects of 
those circumstances.
    (B) [Reserved]
    (viii) For disputes initiated on or after January 22, 2024, 
certified IDR entities are permitted to charge a fixed certified IDR 
entity fee for single determinations within the range of $200 to $840, 
and a fixed certified IDR entity fee for batched determinations within 
the range of $268 to $1,173, unless a fee outside such ranges is 
approved by the Secretary, pursuant to paragraph (e)(2)(vii)(A) of this 
section. As part of the batched determination fee, certified IDR 
entities are permitted to charge an additional fixed tiered fee within 
the range of $75 to $250 for every additional 25 line items within a 
batched dispute, beginning with the 26th line item. The ranges for the 
certified IDR entity fees for single and batched determinations will 
remain in effect until changed by notice and comment rulemaking.
* * * * *
[FR Doc. 2023-27931 Filed 12-18-23; 4:15 pm]
BILLING CODE 4150-29-P; 4830-01-P; 4120-01-P]