Requirements Related to Surprise Billing; Part II
| Published date | 07 October 2021 |
| Citation | 86 FR 55980 |
| Record Number | 2021-21441 |
| Section | Rules and Regulations |
| Court | Employee Benefits Security Administration,Personnel Management Office |
Federal Register, Volume 86 Issue 192 (Thursday, October 7, 2021)
[Federal Register Volume 86, Number 192 (Thursday, October 7, 2021)]
[Rules and Regulations]
[Pages 55980-56142]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-21441]
[[Page 55979]]
Vol. 86
Thursday,
No. 192
October 7, 2021
Part IIIOffice of Personnel Management
Department of the Treasury-----------------------------------------------------------------------Internal Revenue ServiceDepartment of Labor-----------------------------------------------------------------------Employee Benefits Security AdministrationDepartment of Health and Human Services-----------------------------------------------------------------------5 CFR Part 890
26 CFR Part 54
29 CFR Parts 2510 and 2590
45 CFR Parts 147 and 149Requirements Related to Surprise Billing; Part II; Interim Final Rule
Federal Register / Vol. 86, No. 192 / Thursday, October 7, 2021 /
Rules and Regulations
[[Page 55980]]
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OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 890
RIN 3206-AO29
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 54
[TD 9955]
RIN 1545-BQ05
DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Parts 2510 and 2590
RIN 1210-AC00
DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Parts 147 and 149
[CMS-9908-IFC]
RIN 0938-AU62
Requirements Related to Surprise Billing; Part II
AGENCY: Office of Personnel Management; Internal Revenue Service,
Department of the Treasury; Employee Benefits Security Administration,
Department of Labor; Centers for Medicare & Medicaid Services,
Department of Health and Human Services.
ACTION: Interim final rules with request for comments.
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SUMMARY: This document sets forth interim final rules implementing
certain provisions of the No Surprises Act, which was enacted as part
of the Consolidated Appropriations Act, 2021. These interim final rules
implement provisions of the No Surprises Act that provide for a Federal
independent dispute resolution (IDR) (Federal IDR) process to permit
group health plans and health insurance issuers offering group or
individual health insurance coverage and nonparticipating providers,
facilities, and providers of air ambulance services to determine the
out-of-network rate for items and services that are emergency services,
nonemergency services furnished by nonparticipating providers at
participating facilities, and air ambulance services furnished by
nonparticipating providers of air ambulance services, under certain
circumstances. The Department of Health and Human Services (HHS), the
Department of Labor (DOL), and the Department of the Treasury
(collectively, the Departments) are issuing these interim final rules
with largely parallel provisions that apply to group health plans and
health insurance issuers offering group or individual health insurance
coverage and certified IDR entities, providers, facilities, and
providers of air ambulance services. In addition to the interim final
rules issued jointly by the Departments, this document also includes
interim final rules issued by the Office of Personnel Management (OPM)
to clarify how certain No Surprises Act provisions apply to health
benefits plans offered by carriers under the Federal Employees Health
Benefits (FEHB) Act. In addition to the interim final rules issued
jointly by the Departments and OPM, this document includes interim
final rules issued by HHS that address good faith estimates of health
care items and services for uninsured or self-pay individuals and the
associated patient-provider dispute resolution process. The HHS-only
interim final rules apply to selected dispute resolution (SDR)
entities, providers, facilities, and providers of air ambulance
services.
DATES:
Effective date: These regulations are effective on October 7, 2021.
Applicability date: Except as otherwise specified in this
paragraph, the regulations issued jointly by the Departments of HHS,
Labor, and the Treasury are generally applicable for plan or policy
years beginning on or after January 1, 2022. The regulations regarding
certification of IDR entities at 26 CFR 54.9816-8T(a) and (e), 29 CFR
2590.716-8(a) and (e), and 45 CFR 149.510(a) and (e) are applicable
beginning on October 7, 2021. The OPM-only regulations that apply to
health benefits plans are applicable to contract years beginning on or
after January 1, 2022. The regulations issued by HHS alone that apply
to health care providers, facilities, providers of air ambulance
services, and SDR entities are applicable beginning on January 1, 2022,
except that the regulations at 45 CFR 149.620(a) and (d) are applicable
beginning on October 7, 2021.
Comment date: To be assured consideration, comments must be
received at one of the addresses provided below, no later than 5 p.m.
on December 6, 2021.
ADDRESSES: Written comments may be submitted to the addresses specified
below. Any comment that is submitted will be shared among the
Departments. Please do not submit duplicates.
Comments will be made available to the public. Warning: Do not
include any personally identifiable information (such as name, address,
or other contact information) or confidential business information that
you do not want publicly disclosed. Comments are posted on the internet
exactly as received and can be retrieved by most internet search
engines. No deletions, modifications, or redactions will be made to the
comments received, as they are public records. Comments may be
submitted anonymously.
In commenting, refer to file code RIN 1210-AB00. Because of staff
and resource limitations, we cannot accept comments by facsimile (FAX)
transmission.
Comments, including mass comment submissions, must be submitted in
one of the following two ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to https://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By mail. You may mail written comments to the following address
ONLY: Office of Health Plan Standards and Compliance Assistance,
Employee Benefits Security Administration, U.S. Department of Labor,
200 Constitution Avenue NW, Room N-5653, Washington, DC 20210,
Attention: RIN 1210-AB00.
You may mail written comments regarding the HHS-only regulations to
the following address: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention CMS-9908-IFC, P.O.
Box 8010, Baltimore, MD 21244-8010. Attention: RIN 0938-AU62.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Padma Babubhai Shah, Office of
Personnel Management, at 202-606-4056; Kari DiCecco, Internal Revenue
Service, Department of the Treasury, at 202-317-5500; Elizabeth
Schumacher or David Sydlik, Employee Benefits Security Administration,
Department of Labor, at 202-693-8335; Deborah Bryant, Centers for
Medicare & Medicaid Services, Department of Health and Human Services,
at 301-492-4293.
Customer Service Information: Information from OPM on health
benefits plans offered under the FEHB
[[Page 55981]]
Program can be found on the OPM website (www.opm.gov/healthcare-insurance/healthcare/).
Individuals interested in obtaining information from the DOL
concerning employment-based health coverage laws may call the Employee
Benefits Security Administration (EBSA) Toll-Free Hotline at 1-866-444-
EBSA (3272) or visit the DOL's website (www.dol.gov/agencies/ebsa).
In addition, information from HHS on private health insurance
coverage, coverage provided by non-Federal governmental group health
plans, and requirements that apply to health care providers, health
care facilities, and providers of air ambulance services can be found
on the Centers for Medicare & Medicaid Services (CMS) website
(www.cms.gov/cciio), and information on health care reform can be found
at www.HealthCare.gov.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: Comments received before the close
of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post comments received
before the close of the comment period on the following website as soon
as possible after they have been received: https://regulations.gov.
Follow the search instructions on that website to view public comments.
I. Background
A. Preventing Surprise Medical Bills Under the Consolidated
Appropriations Act, 2021
On December 27, 2020, the Consolidated Appropriations Act, 2021
(CAA), which includes the No Surprises Act, was enacted.\1\ The No
Surprises Act provides Federal protections against surprise billing and
limits out-of-network cost sharing under many of the circumstances in
which surprise bills arise most frequently. Surprise billing occurs
when an individual receives an unexpected medical bill from a health
care provider or facility after receiving medical services from a
provider or facility that, usually unknown to the participant,
beneficiary, or enrollee, is a nonparticipating provider or facility
with respect to the individual's coverage.
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\1\ Public Law 116-260 (December 27, 2020).
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The No Surprises Act added new provisions applicable to group
health plans and health insurance issuers offering group or individual
health insurance coverage in Subchapter B of chapter 100 of the
Internal Revenue Code (Code), Part 7 of the Employee Retirement Income
Security Act (ERISA), and Part D of title XXVII of the Public Health
Service Act (PHS Act). Section 102 of the No Surprises Act added Code
section 9816, ERISA section 716, and PHS Act section 2799A-1,\2\ which
contain limitations on cost sharing and requirements regarding the
timing of initial payments for emergency services furnished by
nonparticipating providers and emergency facilities, and for
nonemergency services furnished by nonparticipating providers at
certain participating health care facilities. Section 103 of the No
Surprises Act amended Code section 9816, ERISA section 716, and PHS Act
section 2799A-1 to establish a Federal IDR process that allows plans
and issuers and nonparticipating providers and facilities to resolve
disputes regarding out-of-network rates. Section 105 of the No
Surprises Act created Code section 9817, ERISA section 717, and PHS Act
section 2799A-2, which contain limitations on cost sharing and
requirements for the timing of initial payments for nonparticipating
providers of air ambulance services and allow plans and issuers and
providers of air ambulance services to access the Federal IDR process
described in Code section 9816, ERISA section 716, and PHS Act section
2799A-1. The No Surprises Act provisions that apply to health care
providers and facilities and providers of air ambulance services, such
as prohibitions on balance billing for certain items and services and
requirements related to disclosures about balance billing protections,
were added to title XXVII of the PHS Act in a new part E.
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\2\ As discussed later in this preamble, section 102(d)(1) of
the No Surprises Act amended the Federal Employees Health Benefits
Act, 5 U.S.C. 8901 et seq., by adding a new subsection (p) to 5
U.S.C. 8902. Under this new provision, each FEHB Program contract
must require a carrier to comply with requirements described in
section 9816 of the Code, section 716 of ERISA, and section 2799A-1
(as applicable) in the same manner as these provisions apply with
respect to a group health plan or health insurance issuer offering
group or individual health insurance coverage.
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On July 13, 2021, the Departments of the Treasury, Labor, and
Health and Human Services (Departments) and the Office of Personnel
Management (OPM) published interim final rules with request for
comments titled, Requirements Related to Surprise Billing; Part I,
which generally apply to group health plans and health insurance
issuers offering group or individual health insurance coverage
(including grandfathered health plans) with respect to plan years (in
the individual market, policy years) beginning on or after January 1,
2022; to carriers in the FEHB Program with respect to contract years
beginning on or after January 1, 2022; and to health care providers and
facilities, and providers of air ambulance services beginning on
January 1, 2022 (July 2021 interim final rules).\3\ The July 2021
interim final rules implement Code sections 9816(a)-(b) and 9817(a),
ERISA sections 716(a)-(b) and 717(a), and PHS Act sections 2799A-1(a)-
(b), 2799A-2(a), 2799A-7, 2799B-1, 2799B-2, 2799B-3, and 2799B-5 to
protect consumers from surprise medical bills for emergency services,
nonemergency services furnished by nonparticipating providers at
participating facilities in certain circumstances, and air ambulance
services furnished by nonparticipating providers of air ambulance
services. Among other requirements, the July 2021 interim final rules
require plans and issuers that provide or cover any benefits with
respect to services in an emergency department of a hospital or with
respect to emergency services in an independent freestanding emergency
department to cover emergency services without any prior authorization;
without regard to whether the health care provider furnishing the
emergency services is a participating provider or the services are
provided in a participating emergency facility; and without regard to
any other term or condition of the plan or coverage other than the
exclusion or coordination of benefits or a permitted affiliation or
waiting period. With respect to emergency services furnished by
nonparticipating providers or facilities, nonemergency services
furnished by nonparticipating providers at certain participating
facilities, and air ambulance services furnished by nonparticipating
providers of air ambulance services, the July 2021 interim final rules
generally limit cost sharing for out-of-network services to in-network
levels, require such cost sharing to count toward any in-network
deductibles and out-of-pocket maximums, and prohibit balance billing.
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\3\ 86 FR 36872 (July 13, 2021).
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The July 2021 interim final rules also specify that consumer cost-
sharing amounts for emergency services furnished by nonparticipating
providers or facilities, and for nonemergency services furnished by
nonparticipating providers at certain participating facilities, must be
calculated based on one of the following amounts: (1) An amount
determined by an applicable All-Payer Model Agreement under
[[Page 55982]]
Social Security Act section 1115A; (2) if there is no such applicable
All-Payer Model Agreement, an amount determined by a specified state
law; or (3) if there is no such applicable All-Payer Model Agreement or
specified state law, the lesser of the billed charge or the plan's or
issuer's median contracted rate, the latter referred to as the
qualifying payment amount (QPA). Cost-sharing amounts for air ambulance
services provided by nonparticipating providers of air ambulance
services must meet the same standards as would apply if the services
were provided by a participating provider of air ambulance services and
must be calculated using the lesser of the billed charges or the QPA.
Under the July 2021 interim final rules, balance billing for
services subject to the requirements in those interim final rules
generally is prohibited.\4\ In general, the protections in the July
2021 interim final rules that limit cost sharing and prohibit balance
billing do not apply to certain post-stabilization services, or to
certain nonemergency services performed by nonparticipating providers
at participating health care facilities, if the provider makes certain
disclosures to the participant, beneficiary, or enrollee, and obtains
the individual's consent to waive balance billing protections. However,
this exception to the prohibition on balance billing is narrow. In
particular, it is not available in certain circumstances where surprise
bills are likely to occur, such as for ancillary services provided by
nonparticipating providers in connection with nonemergency care in a
participating health care facility. The July 2021 interim final rules
also include a number of other specific requirements regarding notice
and consent that must be met in order for a provider or facility to be
permitted to balance bill a participant, beneficiary, or enrollee for
items and services that would otherwise be subject to the prohibition
on balance billing.
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\4\ 45 CFR 149.410(a), 149.420(a) and 149.440(a).
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The Departments are issuing regulations in several phases
implementing provisions of title I (No Surprises Act) and title II
(Transparency) of Division BB of the CAA. These interim final rules
build upon the protections in the July 2021 interim final rules and
implement the Federal IDR provisions under Code sections 9816(c) and
9817(b), ERISA sections 716(c) and 717(b), and PHS Act sections 2799A-
1(c) and 2799A-2(b). OPM is also issuing regulations in phases to
implement 5 U.S.C. 8902(p).
The Departments and OPM also published a notice of proposed
rulemaking on September 16, 2021, titled Requirements Related to Air
Ambulance Services, Agent and Broker Disclosures, and Provider
Enforcement.\5\ The proposed rule would, if finalized, implement
reporting requirements for air ambulance claims data; requirements on
health insurance issuers offering individual health insurance coverage
or short term, limited-duration insurance to disclose and report
information regarding direct or indirect compensation provided to
agents and brokers (section 202(c) of title II of Division BB of the
CAA); as well as provisions related to HHS enforcement of requirements
on issuers, non-Federal governmental group health plans, providers,
facilities, and providers of air ambulance services. Later this year,
the Departments intend to undertake rulemaking to implement reporting
requirements related to pharmacy benefits and prescription drug costs
(section 204 of title II of Division BB of the CAA).
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\5\ 86 FR 51730 (Sept. 16, 2021).
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The provisions of the No Surprises Act that are applicable to group
health plans and health insurance issuers offering group or individual
health insurance coverage in the Code, ERISA, and the PHS Act apply to
grandfathered health plans. Section 1251 of the Affordable Care Act
provides that grandfathered health plans are not subject to certain
provisions of the Code, ERISA, and the PHS Act, as added by the
Affordable Care Act, for as long as they maintain their status as
grandfathered health plans.\6\ For example, grandfathered health plans
are neither subject to the requirement to cover certain preventive
services without cost sharing under PHS Act section 2713 nor to the
annual limitation on cost sharing set forth under PHS Act section
2707(b). If a plan or coverage were to relinquish its grandfathered
status, it would be required to comply with both provisions, in
addition to several other requirements. However, the CAA does not
include an exception for grandfathered health plans that is comparable
to section 1251 of the Affordable Care Act. Furthermore, section
102(d)(2) of the No Surprises Act amended section 1251(a) of the
Affordable Care Act to clarify that the new and recodified patient
protections provisions of the No Surprises Act, including those related
to choice of health care professional, apply to grandfathered health
plans. Therefore, not only do the provisions of these interim final
rules and the provisions of the July 2021 interim final rules that
apply to group health plans and issuers of group or individual health
insurance coverage apply to grandfathered plans, so do the other
provisions applicable to group health plans and issuers of group or
individual health insurance coverage in titles I and II of Division BB
of the CAA.
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\6\ For a list of the market reform provisions applicable to
grandfathered health plans under title XXVII of the PHS Act that the
Affordable Care Act added or amended and that were incorporated into
ERISA and the Code, visit https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/grandfathered-health-plans-provisions-summary-chart.pdf.
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B. PHS Act Section 2719 and Scope of Claims Eligible for External
Review
PHS Act section 2719, as added by the Affordable Care Act, applies
to group health plans that are not grandfathered health plans and
health insurance issuers offering non-grandfathered coverage in the
group and individual markets, and sets forth standards for plans and
issuers regarding both internal claims and appeals and external review.
With respect to external review, PHS Act section 2719 provides for both
state external review processes and a Federal external review process
that applies in the absence of an applicable state process that meets
the requirements of section 2719. Non-grandfathered group health plans
that are not self-insured plans (as self-insured plans are not subject
to state insurance regulations) and health insurance issuers offering
non-grandfathered group or individual health insurance coverage must
comply with an applicable state external review process if that process
includes, at a minimum, the consumer protections set forth in the
Uniform Health Carrier External Review Model Act issued by the National
Association of Insurance Commissioners (the NAIC Uniform Model Act). If
a state's external review process does not meet the minimum consumer
protection standards set forth in the NAIC Uniform Model Act (or if a
plan is self-insured and not subject to state insurance regulation),
group health plans and health insurance issuers in the group and
individual markets in that state are required to implement an effective
external review process that meets minimum standards established by the
Departments through rulemaking.
The Departments issued interim final regulations to implement PHS
Act section 2719, including the provisions related to external review,
in 2010.\7\ An
[[Page 55983]]
amendment to the interim final rules was issued in 2011.\8\ In 2015,
the Departments issued final rules to finalize the interim final
regulations.\9\ Among other things, the 2015 final rules address the
scope of claims eligible for external review.\10\ State external review
processes that meet the minimum standards must provide for the external
review of adverse benefit determinations that are based on requirements
for medical necessity, appropriateness, health care setting, level of
care, or effectiveness of a covered benefit. The Federal external
review process must be available for any adverse benefit determination
by a plan or issuer that involves medical judgment, as well as
rescissions. Section 110 of the No Surprises Act directs the
Departments, in applying section 2719(b) of the PHS Act, to require the
external review process to apply with respect to any adverse
determination by a plan or issuer under Code section 9816 or 9817,
ERISA section 716 or 717, or PHS Act section 2799A-1 or 2799A-2.
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\7\ 75 FR 43329 (July 23, 2010).
\8\ 76 FR 37207 (June 10, 2011).
\9\ 80 FR 72191 (Nov. 18, 2015).
\10\ 26 CFR 54.9815-2719(d)(1); 29 CFR 2590.715-2719(d)(1); 45
CFR 147.136(d)(1).
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C. Protecting Uninsured Individuals Through Transparency and Patient-
Provider Dispute Resolution
On July 9, 2021, President Biden signed Executive Order 14036,
Promoting Competition in the American Economy in order to promote the
interests of American workers, businesses, and consumers.\11\ The
executive order acknowledges that robust competition is critical to
providing consumers with more choices, better service, and lower prices
and directs the Secretary of HHS to support existing price transparency
initiatives for hospitals, other providers, and insurers along with any
new price transparency initiatives or changes made necessary by the No
Surprises Act or any other statues. Consistent with Executive Order
14036, these interim final rules implement provisions of the No
Surprises Act that will provide individuals with more pricing
information prior to seeking care, allowing them to shop for the care
that is best for them and increase competition in the health care
market.
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\11\ 86 FR 36987 (Jul 9, 2021).
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The No Surprises Act also adds a new Part E of title XXVII of the
PHS Act establishing requirements applicable to health care providers,
providers of air ambulance services, and health care facilities.
Section 112 of the No Surprises Act adds PHS Act sections 2799B-6 and
2799B-7. PHS Act section 2799B-6 requires providers and facilities to
furnish a good faith estimate of expected charges upon request or upon
scheduling an item or service. Providers and facilities are required to
inquire if an individual is enrolled in a group health plan, group or
individual health insurance coverage, an FEHB plan,\12\ or a Federal
health care program, and, if enrolled in a group health plan, or group
or individual health insurance coverage, or a health benefits plan
under chapter 89 of title 5,\13\ whether the individual is seeking to
have a claim for such item or service submitted to such plan or
coverage. In the case that the individual is enrolled in such a plan or
coverage (and is seeking to have a claim for such an item or services
submitted to such plan or coverage), PHS Act section 2799B-6(2)(A)
requires that the provider or facility furnish the good faith estimate
to the individual's plan or issuer of such coverage to inform the
advanced explanation of benefits that plans and issuers are required to
provide a participant, beneficiary, enrollee, or FEHB covered
individual under Code section 9816(f), ERISA section 716(f), PHS Act
section 2799A-1(f), and 5 U.S.C. 8902(p). In the case that the
individual requesting a good faith estimate for an item or service or
seeking to schedule an item or service to be furnished who is not
enrolled in a plan or coverage, or is not seeking to file a claim with
such plan or coverage (self-pay), PHS Act section 2799B-6(2)(B) and
these interim final rules at 45 CFR 149.610 require providers and
facilities to furnish the good faith estimate to the individual.
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\12\ HHS interprets the requirements described in PHS Act
section 2799B-6 to apply with respect to FEHB covered individuals as
they would to other individuals enrolled in a group health plan,
group or individual health insurance coverage offered by a health
insurance issuer. Although PHS Act section 2799B-6 does not
reference health benefits plans under chapter 89 of title 5, the
definition of ``uninsured individual'' at PHS Act section 2799B-7
does include individuals who do not have benefits under these health
benefits plans, and these sections work together to provide
protections for the uninsured (or self-pay) population. Moreover,
the requirement for the provision of an advance explanation of
benefits required by Code section 9816(f), ERISA section 716(f), and
PHS Act section 2799A-(1)(f), as well as 5 U.S.C. 8902(p) cannot be
accomplished by a FEHB carrier unless it receives a good faith
estimate from a provider in accordance with PHS Act section 2799B-
6(2)(A).
\13\ A health benefits plan offered under chapter 89 of title 5,
United States Code is also known as an FEHB plan.
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These interim final rules do not include requirements regarding PHS
Act section 2799B-6(2)(A), which require providers and facilities to
furnish good faith estimates to plans or issuers. Under Code section
9816(f), ERISA section 716(f), and PHS Act section 2799A-1(f) and 5
U.S.C. 8902(p), plans and issuers are required to include the good
faith estimates in an advanced explanation of benefits provided to
participants, beneficiaries, enrollees, and FEHB covered individuals.
As stated in the August 20, 2021, FAQs issued by the Departments, the
Departments have received feedback from the public about the challenges
of developing the technical infrastructure necessary for providers and
facilities to transmit to plans and issuers starting January 1, 2022,
the good faith estimates required under PHS Act section 2799B-6, which
plans and issuers must then include in the advanced explanation of
benefits. Accordingly, until rulemaking to fully implement this
requirement to provide such a good faith estimate to an individual's
plan or coverage is adopted and applicable, HHS will defer enforcement
of the requirement that providers and facilities provide good faith
estimate information for individuals enrolled in a health plan or
coverage and seeking to submit a claim for scheduled items or services
to their plan or coverage. Additionally, stakeholders have requested
that the Departments delay the applicability date of Code section
9816(f), ERISA section 716(f), and PHS Act section 2799A-1(f) until the
Departments have established standards for the data transfer between
providers and facilities and plans and issuers and have given enough
time for plans and issuers and providers and facilities to build the
infrastructure necessary to support the transfers. The Departments
agree that compliance with this section is likely not possible by
January 1, 2022, and therefore intend to undertake notice and comment
rulemaking in the future to implement this provision, including
establishing appropriate data transfer standards. Until such time, the
Departments will defer enforcement of the requirement that plans and
issuers must provide an advanced explanation of benefits. HHS will
consider whether additional interim solutions for insured consumers are
feasible. The Departments note that any rulemaking to fully implement
Code section 9816(f), ERISA section 716(f), and PHS Act sections 2799A-
1(f) and 2799B-6(2)(A) will include a prospective applicability date
that provides plans, issuers, providers, and facilities with a
reasonable amount of time to comply with new requirements. HHS
encourages states that are primary enforcers of these requirements with
regard to providers and issuers to take a similar enforcement approach,
and
[[Page 55984]]
will not determine that a state is failing to substantially enforce
these requirements if it takes such an approach.
Nonetheless, providers and facilities will be subject to
enforcement action for failure to provide a good faith estimate to
individuals not enrolled in a plan or coverage, or not seeking to have
a claim for such item or services submitted to such plan or issuer of
such coverage, as specified under these interim final rules. HHS seeks
comment on this approach.
On November 12, 2020, the Departments issued the Transparency in
Coverage final rules,\14\ which require group health plans and health
insurance issuers of group or individual health insurance coverage to
make price comparison information available to participants,
beneficiaries, and enrollees through an internet-based self-service
tool and in paper form, upon request. This information must be
available for plan years--or in the individual market, for policy
years--beginning on or after January 1, 2023 with respect to 500
specified items and services, and with respect to all covered items and
services, for plan or policy years beginning on or after January 1,
2024. The Departments are of the view that the disclosure requirements
to participants, beneficiaries, and enrollees under the Transparency in
Coverage final rules, and those required under Code section 9816(f),
ERISA section 716(f), and PHS Act section 2799A-1(f), are substantially
similar and therefore the Departments seek comment on whether there are
ways to leverage the Transparency in Coverage requirements, including
whether there are ways for plans and issuers to provide the information
required in the Transparency in Coverage final rules to participants,
beneficiaries, and enrollees during plan or policy years beginning in
2022. The Departments also seek comment on whether it would be feasible
for providers and facilities to provide an estimate or range of
estimated costs for insured consumers upon request for 2022.
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\14\ 26 CFR 54.9815-2715A2(b), 29 CFR 2590.715-2715A2(b), and 45
CFR 147.211(b).
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Section 112 of the No Surprises Act also adds PHS Act section
2799B-7, which directs the Secretary of HHS to establish a process
under which uninsured (or self-pay) individuals can avail themselves of
a patient-provider dispute resolution process if their billed charges
after receiving an item or service are substantially in excess of the
expected charges listed in the good faith estimate furnished by the
provider or facility, pursuant to PHS Act section 2799B-6. Under PHS
Act section 2799B-7, an uninsured (or self-pay) individual means, with
respect to an item or service, an individual who does not have benefits
for such item or service under a group health plan, group or individual
health insurance coverage offered by a health insurance issuer, Federal
health care program (as defined in section 1128B(f) of the Social
Security Act), or a health benefits plan under chapter 89 of title 5,
United States Code (or an individual who has benefits for such item or
service under a group health plan or individual or group health
insurance coverage offered by a health insurance issuer, but does not
seek to have a claim for such item or service submitted to such plan or
coverage).
II. Executive Summary
A. Departments of the Treasury, Labor, and HHS: Federal IDR Process and
External Review
In order to implement the Federal IDR provisions under Code
sections 9816(c) and 9817(b), ERISA sections 716(c) and 717(b), and PHS
Act sections 2799A-1(c) and 2799A-2(b), as added by sections 103 and
105 of the No Surprises Act, these interim final rules establish a
Federal IDR process that nonparticipating providers or facilities,
nonparticipating providers of air ambulance services, and group health
plans and health insurance issuers in the group and individual market
may use following the end of an unsuccessful open negotiation period to
determine the out-of-network rate for certain services. More
specifically, the Federal IDR provisions may be used to determine the
out-of-network rate for certain emergency services, nonemergency items
and services furnished by nonparticipating providers at participating
health care facilities, and air ambulance services furnished by
nonparticipating providers of air ambulance services where an All-Payer
Model Agreement or specified state law does not apply.
Under Code sections 9816(c)(1)(A) and 9817(b)(1)(A), ERISA sections
716(c)(1)(A) and 717(b)(1)(A), PHS Act sections 2799A-1(c)(1)(A) and
2799A-2(b)(1)(A), and these interim final rules, upon receiving an
initial payment or notice of denial of payment from a plan or issuer
with respect to such items or services, such provider or facility or
provider of air ambulance services (as applicable) or plan or issuer
(as applicable) may initiate an open negotiation period within 30
business days beginning on the date the provider or facility receives
the initial payment or notice of denial of payment. The open
negotiation period may continue for up to 30 business days beginning on
the date that either party first initiates the open negotiation period.
The parties may discontinue the negotiation if they agree on an out-of-
network rate before the last day of the 30-business-day open
negotiation period. If the parties cannot agree on an out-of-network
rate, they must exhaust the 30-business-day open negotiation period
before initiating the Federal IDR process. Either party may initiate
the Federal IDR process during the 4-business-day period beginning on
the 31st business day after the start of the open negotiation period.
The parties may select a certified IDR entity, or if the parties do not
select a certified IDR entity, the Departments will do so. The No
Surprises Act and these interim final rules specify that the certified
IDR entity selected cannot be a party to the determination or an
employee or agent of such a party, or have a material familial,
financial, or professional relationship with such party.
In resolving the disputes through the Federal IDR process, the No
Surprises Act and these interim final rules provide that each party
must submit to the certified IDR entity an offer for a payment amount
for the qualified IDR item or service in dispute and other information
related to the offer as requested by the certified IDR entity within 10
business days of selection of the certified IDR entity and may submit
additional information for the certified IDR entity to consider. In
making a determination of which payment offer to select, these interim
final rules specify that the certified IDR entity must begin with the
presumption that the QPA is the appropriate out-of-network rate for the
qualified IDR item or service under consideration. These interim final
rules further provide that the certified IDR entity must select the
offer closest to the QPA unless the certified IDR entity determines
that credible information submitted by either party clearly
demonstrates that the QPA is materially different from the appropriate
out-of-network rate, based on the additional factors set forth in Code
sections 9816(c)(5)(C)(ii) and 9817(b)(5)(C)(ii), ERISA sections
716(c)(5)(C)(ii) and 717(b)(5)(C)(ii), and PHS Act sections 2799A-
1(c)(5)(C)(ii) and 2799A-2(b)(5)(C)(ii). The certified IDR entity may
not consider usual and customary charges, the amount that would have
been billed (including billed charges that are directed to the plan or
issuer) if the protections of 45 CFR 149.410,
[[Page 55985]]
149.420, or 149.440 \15\ (as applicable) had not applied, or any public
payor payment or reimbursement rates.\16\ As discussed more fully in
section III.D.4.ii. of this preamble, this approach is consistent with
the No Surprises Act's emphasis on the QPA, both as the basis of the
surprise billing protections also included in the statute and
implemented by the July 2021 interim final rules and as the sole factor
identified without any qualification by the statute.\17\ The
Departments are of the view that implementing the Federal IDR process
in this manner encourages predictable outcomes, which will reduce the
use of the Federal IDR process over time and the associated
administrative fees born by the parties, while providing equitable and
clear standards for when payment amounts may deviate from the QPA, as
appropriate.
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\15\ The July 2021 interim final rules prohibit nonparticipating
emergency facilities and nonparticipating providers furnishing
emergency services from billing participants, beneficiaries, or
enrollees for payment amounts that exceed the cost-sharing
requirement for those items or services. The July 2021 interim final
rules also generally prohibit nonparticipating providers furnishing
nonemergency items and services at participating facilities from
balance billing participants, beneficiaries, or enrollees for those
items or services. In addition, the July 2021 interim final rules
prohibit nonparticipating providers of air ambulance services
furnishing air ambulance services for which benefits are available
under a group health plan or group or individual health insurance
coverage from balance billing participants, beneficiaries, or
enrollees for those items or services.
\16\ Public payor payment and reimbursement rates include
reimbursement rates under the Medicare program under title XVIII of
the Social Security Act, under the Medicaid program under title XIX
of such Act, under the Children's Health Insurance Program under
title XXI of such Act, under the TRICARE program under chapter 55 of
title 10, United States Code, and under chapter 17 of title 38,
United States Code.
\17\ The No Surprises Act limits the certified IDR entity's
consideration of additional factors by prohibiting the certified IDR
entity from considering certain other factors, such as usual and
customary charges and billed charges, in making a payment
determination.
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The No Surprises Act and these interim final rules also set forth
requirements for certification of IDR entities by the Departments. To
become certified IDR entities, IDR entities must provide written
documentation demonstrating that they meet the eligibility criteria,
including having sufficient expertise and staffing to conduct
determinations on a timely basis, being free of conflicts of interest,
being accredited by a nationally recognized and relevant accrediting
body (such as URAC) or otherwise ensuring that IDR entity personnel
possess the requisite training to conduct payment determinations (for
example, providing documentation that personnel employed by the IDR
entity have completed arbitration training by the American Arbitration
Association (AAA), the American Health Law Association (AHLA), or a
similar organization), ensuring policies and procedures are in place to
maintain confidentiality of individually identifiable health
information, providing a fixed fee for single determinations and a
separate fee for batched determinations, having a procedure in place to
retain certified IDR entity fees and retain and remit administrative
fees, meeting appropriate indicators of fiscal integrity and stability,
evidencing its ability to collect and transmit the information required
to be reported to the Departments, and properly carrying out the
requirements of the Federal IDR process in accordance with the law.
These interim final rules also establish a process whereby members of
the public, providers, facilities, providers of air ambulance services,
plans, or issuers may petition for the denial or revocation of
certification of an IDR entity. Finally, these interim final rules
require the collection of information related to the Federal IDR
process from certified IDR entities in order to allow the Departments
to quarterly publish information on IDR payment determinations.
The Departments are also establishing a Federal IDR portal to
administer the Federal IDR process. The Departments' Federal IDR portal
will be available at https://www.nsa-idr.cms.gov and will be used
throughout the Federal IDR process to maximize efficiency and reduce
burden. As discussed throughout this preamble, the Federal IDR portal
may be used to satisfy various requirements under these interim final
rules, including provision of notices, Federal IDR initiation,
submission of an application to be a certified IDR entity, as well as
satisfying reporting requirements.
These interim final rules also amend final regulations issued by
the Departments in 2015 related to external review in order to
implement section 110 of the No Surprises Act. Section 110 requires
that ``[i]n applying the provisions of section 2719(b) of the [PHS Act]
to group health plans and health insurance issuers offering group or
individual health insurance coverage, the Secretary of [HHS], Secretary
of Labor, and Secretary of the Treasury, shall require, beginning not
later than January 1, 2022, the external review process described in
paragraph (1) of such section to apply with respect to any adverse
determination by such a plan or issuer under Code section 9816 or 9817,
ERISA section 716 or 717, or PHS Act section 2799A-1 or 2799A-2,
including with respect to whether an item or service that is the
subject to such a determination is an item or service to which such
respective section applies.'' Accordingly, these interim final rules
amend the final regulations regarding external review in two ways.
First, the scope of adverse benefit determinations eligible for
external review is amended to ensure that issues related to compliance
with the specified provisions of the No Surprises Act fall within that
scope. Several examples are also added to provide greater clarity to
stakeholders regarding the expanded scope. Second, applicability
provisions are amended to require that grandfathered health plans,
which generally are exempt from requirements related to external
review, must nonetheless provide for external review of adverse benefit
determinations for claims subject to the cost-sharing and surprise
billing protections in the No Surprises Act. The Departments seek
comment on all aspects of these interim final rules.
B. Office of Personnel Management: Federal IDR Process for FEHB
Carriers
The OPM interim final rules amend existing 5 CFR 890.114(a) to
include references to the Treasury, DOL, and HHS interim final rules to
clarify that pursuant to 5 U.S.C. 8902(p), FEHB carriers are also
subject to the Federal IDR process set forth in those regulations with
respect to an item or service eligible for determination through open
negotiation or the Federal IDR process furnished by a FEHB carrier
offering a health benefits plan in the same manner as those provisions
apply to a group health plan or health insurance issuer offering group
or individual health insurance coverage, subject to 5 U.S.C. 8902(m)(1)
and the provisions of the FEHB carrier's contract. Through new 5 CFR
890.114(d), OPM adopts the Departments' interim final rules as
conformed by terms unique to the FEHB Program. In 5 CFR 890.114(d), OPM
adopts the Departments' rules as necessary to properly integrate with
existing FEHB Program structure and sets forth circumstances in which
OPM will enforce these rules as applied to FEHB carriers. The OPM
interim final rules require FEHB carrier notice to the OPM Director
(herein, the Director) of an FEHB carrier's notice of initiation, or
receipt of a provider's notice of initiation, of the Federal IDR
process. The Director will coordinate with the Departments in matters
regarding FEHB
[[Page 55986]]
carriers requiring resolution under the Federal IDR process and with
respect to oversight of certified IDR entities' reports regarding FEHB
carriers. As discussed in the July 2021 interim final rules, all out-
of-network rate determinations regarding IDR items or services eligible
for determination through open negotiation or the Federal IDR process
under the No Surprises Act with respect to FEHB plans or carriers that
are not resolved by open negotiation are subject to the Federal IDR
process unless OPM contracts with FEHB carriers include terms that
adopt state law as governing for this purpose.
C. Department of HHS: Protections for the Uninsured
To ensure that uninsured (or self-pay) individuals are also
afforded protections against surprise health care costs, the No
Surprises Act includes provisions that require providers and facilities
to furnish good faith estimates to uninsured (or self-pay) individuals
upon their request and at the time of scheduling the item or service.
In order to implement these provisions under PHS Act sections 2799B-
6(1) and 2799B-6(2)(B), HHS is adding 45 CFR 149.610 to establish
requirements for providers and facilities to specifically inquire about
an individual's health coverage status and requirements for providing a
good faith estimate to uninsured (or self-pay) individuals. These
interim final rules define uninsured (or self-pay) individuals to
include those who do not have benefits for an item or service under a
group health plan, group or individual health insurance coverage
offered by a health insurance issuer, a Federal health care program (as
defined in section 1128B(f) of the Social Security Act), or a health
benefits plan under chapter 89 of title 5, United States Code, or an
individual who has benefits for such item or service under a group
health plan or individual or group health insurance coverage offered by
a health insurance issuer, but who does not seek to have a claim for
such item or service submitted to such plan or coverage. PHS Act
section 2799B-6, added by section 112 of the No Surprises Act, does not
specifically define a Federal health care program and also does not
reference health benefits plans under chapter 89 of title 5. However,
PHS Act section 2799B-7, which was also added by section 112 of the No
Surprises Act, and which provides protections related to the good faith
estimate required under PHS Act section 2799B-6, defines an uninsured
individual to include individuals not enrolled in a Federal health care
program (as defined in section 1128B(f) of the Social Security Act) and
individuals not enrolled in health benefits plans under chapter 89 of
title 5. To align these two related sections, HHS is adopting the
definition of an uninsured (or self-pay) individual at PHS Act section
2799B-7 for the purposes of the interim final rules at 45 CFR 149.610
which implements PHS Act section 2799B-6(1) and 2799B-6(2)(B) and 45
CFR 149.620 which implements PHS Act section 2799B-7.
The definition of uninsured (or self-pay) individuals in these
interim final rules includes individuals enrolled in individual or
group health insurance coverage offered by a health insurance issuer,
or a health benefits plan under chapter 89 of title 5, but not seeking
to have a claim for such item or service submitted to such plan or
coverage. These individuals are often referred to as self-pay
individuals, therefore these interim final rules include the term self-
pay when discussing uninsured individuals.
Under PHS Act section 2791(b)(5), short-term, limited-duration
insurance is excluded from the definition of individual health
insurance coverage. Therefore, for purposes of 45 CFR 149.610 and 45
CFR 149.620, uninsured (or self-pay) individuals include individuals
who are enrolled in short-term, limited-duration insurance and not also
enrolled in a group health plan, group or individual health insurance
coverage offered by a health insurance issuer, Federal health care
program (as defined in section 1128B(f) of the Social Security Act), or
a health benefits plan under chapter 89 of title 5, United States Code.
Thus, providers and facilities will be required to provide to such
individuals a good faith estimate and such individuals will be able to
avail themselves of the patient-provider dispute resolution process,
where applicable.
PHS Act section 2799B-6(2) and these interim final rules specify
that a provider or facility must provide a notification (in clear and
understandable language) of the good faith estimate of the expected
charges for furnishing the items or services listed on the good faith
estimate (including any items or services that are reasonably expected
to be provided in conjunction with such scheduled or requested items or
services and such items or services reasonably expected to be so
provided by another health care provider or health care facility), with
the expected billing and diagnostic codes for any such items or
services.
As discussed in section I.C. of this preamble, requirements to
implement PHS Act section 2799B-6(2)(A) are not included in these
interim final rules given the challenges of developing the technical
infrastructure necessary to transmit such data from providers and
facilities to plans and issuers. The requirements in these interim
final rules apply only to good faith estimate notifications for
uninsured (or self-pay) individuals as described in PHS Act section
2799B-6(2)(B) and in these interim final rules. HHS acknowledges that
PHS Act section 2799B-6 also requires providers and facilities to make
certain disclosures to an individual's plan or coverage if the
individual is enrolled in such a plan or coverage and is seeking to
have a claim for such items or services submitted to such plan or
coverage. Specifically, section 2799B-6(2)(A) requires a provider or
facility to provide such a plan or issuer notification of the good
faith estimate of expected charges for furnishing an item or service on
the same terms as provided to individuals.
Health care providers and health care facilities are required under
PHS Act section 2799B-6 to furnish a notification of the good faith
estimate of expected charges to an uninsured (or self-pay) individual
who schedules an item or service, and to an individual who has not yet
scheduled an item or service, but requests a good faith estimate. PHS
Act section 2799B-6 requires providers and facilities to furnish a good
faith estimate to an uninsured (or self-pay) individual who schedules
an item or service at least 3 business days before the date such item
or service is to be so furnished, not later than 1 business day after
the date of such scheduling (or, in the case of such an item or service
scheduled at least 10 business days before the date such item or
service is to be so furnished (or if requested by the uninsured (or
self-pay) individual), not later than 3 business days after the date of
such scheduling or such request). As further discussed in section VI of
this preamble, in instances where an uninsured (or self-pay) individual
requests a good faith estimate of expected charges, but the item or
service has not been scheduled, these interim final rules require that
the treating provider furnish a good faith estimate to the uninsured
(or self-pay) individual, within 3 business days of such request. For
example, if an uninsured (or self-pay) individual schedules an item or
service on Monday, January 3 to be provided on Thursday, January 6, the
provider and facility must furnish a good faith estimate no later than
Tuesday, January 4. If scheduling occurs on Monday, January 3 for items
or services to be
[[Page 55987]]
provided on Thursday, January 13, the provider and facility must
furnish a good faith estimate no later than Thursday, January 6. If an
uninsured (or self-pay) individual requests a good faith estimate on
Monday, January 3 for items or services not yet scheduled, the provider
and facility must furnish the good faith estimate no later than
Thursday, January 6.
These interim final rules include definitions relating to good
faith estimates of expected charges for uninsured (or self-pay)
individuals for scheduled items or services and upon request. These
interim final rules also include requirements for providers and
facilities regarding the contents of the good faith estimates and the
manner in which good faith estimates must be provided.
PHS Act section 2799B-7 provides further protections for the
uninsured (or self-pay) individual by requiring the Secretary of HHS to
establish a process (in this section referred to as patient-provider
dispute resolution) under which an uninsured (or self-pay) individual
who received from a provider or facility a good faith estimate of the
expected charges, and who, after being furnished the item or service,
is billed an amount that is substantially in excess of the expected
charges in the good faith estimate, may seek a determination from a
certified dispute resolution entity of the amount to be paid to the
provider or facility.
HHS is adding new 45 CFR 149.620 to implement this patient-provider
dispute resolution process, including specific definitions related to
the process. HHS is also codifying provisions related to eligibility
for the patient-provider dispute resolution process, and selection of
an SDR entity. HHS clarifies that while SDR entities provide a similar
function and must meet similar requirements as certified IDR entities,
SDR entities are specific to the patient-provider dispute resolution
process. These interim final rules also codify requirements related to
the determination of payment amounts by SDR entities, fees associated
with the patient-provider dispute resolution process, certification of
SDR entities, and deferral to state-established patient-provider
dispute resolution processes that meet certain minimum Federal
standards.
III. Overview of the Interim Final Rules Regarding the Federal
Independent Dispute Resolution Process for Plans, Issuers, Providers,
Facilities, and Providers of Air Ambulance Services--Departments of the
Treasury, Labor, and HHS
A. Definitions
Code section 9816, ERISA section 716, and PHS Act sections 2799A-1
and 2799A-2 include defined terms that are specific to the law's
requirements and implementation.\18\ The definitions in 26 CFR 54.9816-
3T, 29 CFR 2590.716-3, and 45 CFR 149.30 apply to these interim final
rules; these interim final rules also define additional terms specific
to the Federal IDR process. Under these interim final rules, ``batched
items and services'' means multiple qualified IDR items or services
that are considered jointly as part of one payment determination by a
certified IDR entity for purposes of the Federal IDR process. For a
qualified IDR item or service to be included as a batched item or
service, the qualified IDR item or service must satisfy the criteria
for batching set forth in 26 CFR 54.9816-8T(c)(3), 29 CFR 2590.716-
8(c)(3), and 45 CFR 149.510(c)(3). ``Certified IDR entity'' means an
entity responsible for conducting determinations under 26 CFR 54.9816-
8T(c), 29 CFR 2590.716-8(c), and 45 CFR 149.510(c) that meets the
certification criteria specified in 26 CFR 54.9816-8T(e), 29 CFR
2590.716-8(e), and 45 CFR 149.510(e) and that has been certified by the
Departments. Separately, ``IDR entity'' means an entity that may apply
or has applied for certification to conduct determinations under 26 CFR
54.9816-8T(c), 29 CFR 2590.716-8(c), and 45 CFR 149.510(c) and
currently is not certified by the Departments pursuant to 26 CFR
54.9816-8T(e), 29 CFR 2590.716-8(e), and 45 CFR 149.510(e). If a
certified IDR entity's certification has expired or has been revoked as
a result of the process described in 26 CFR 54.9816-8T(e)(6), 29 CFR
2590.716-8(e)(6), and 45 CFR 149.510(e)(6), upon the date of the
expiration or revocation, the formerly-certified IDR entity will be
referred to as an IDR entity.
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\18\ To implement these interim final rules regarding the
Federal IDR process under the PHS Act, HHS is amending 45 part CFR
149 by adding new Subparts F and G. Additionally, the Departments
are amending 26 CFR 54.9816-1T and 54.9816-2T, 29 CFR 2590.716-1 and
2590.716-2 and 45 CFR 149.10 and 149.20 to expand the scope and
applicability of this part to include IDR entities and the Federal
IDR process. HHS is also amending 45 CFR 149.10 and 149.20 to expand
the scope and applicability of this part to include SDR entities,
the good faith estimate requirements, and patient-provider dispute
resolution process.
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These interim final rules also define certain terms related to
conflict-of-interest standards applicable to certified IDR entities.
Stakeholders have emphasized the importance of ensuring a broad
conflict-of-interest standard in order to avoid the risk of biased IDR
payment determinations (or the appearance of biased IDR payment
determinations). In general, a ``conflict of interest'' means, with
respect to a party to a payment determination, a certified IDR entity,
a material relationship, status, or condition of the party, or
certified IDR entity that impacts the ability of a certified IDR entity
to make an unbiased and impartial payment determination. For purposes
of these interim final rules, a conflict of interest exists when a
certified IDR entity is a group health plan; a health insurance issuer
offering group health insurance coverage, individual health insurance
coverage or short-term, limited-duration insurance; an FEHB carrier; or
a provider, a facility,\19\ or a provider of air ambulance services.
While the statute does not specify that the IDR entity must not be a
health insurance issuer offering short-term, limited-duration
insurance, the Departments have determined that such entities should
not be eligible for certification, due to their similarity to health
insurance issuers offering group and individual health insurance
coverage and their inherent interest as issuers in keeping
reimbursement rates for providers, facilities, and providers of air
ambulance services low. A conflict of interest also exists when a
certified IDR entity is an affiliate or a subsidiary of a group health
plan; a health insurance issuer offering group health insurance
coverage, individual health insurance coverage or short-term, limited-
duration insurance; an FEHB carrier; or provider, facility, or provider
of air ambulance services. A conflict of interest also exists when a
certified IDR
[[Page 55988]]
entity is an affiliate or subsidiary of a professional or trade
association representing group health plans; health insurance issuers
offering group health insurance coverage, individual health insurance
coverage or short-term, limited-duration insurance; FEHB carriers; or
providers, facilities, or providers of air ambulance services.
Additionally, a conflict of interest exists when a certified IDR entity
has, or any personnel assigned to a determination have a material
familial, financial, or professional relationship with a party to the
payment determination being disputed, or with any officer, director, or
management employee of the plan, issuer or carrier offering a health
benefits plan under 5 U.S.C. 8902; the plan administrator, plan
fiduciaries, or plan, issuer, or carrier's employees; the health care
provider, the health care provider's group or practice association; the
provider of air ambulance services, the provider of air ambulance
services' group or practice association, or the facility that is a
party to the dispute. The Departments are of the view that an officer,
director, or management employee of the plan issuer, or carrier
offering a health benefits plan under 5 U.S.C. 8902; the plan
administrator, plan fiduciaries, or plan, issuer or carrier employees;
the health care provider, the health care provider's group or practice
association; the provider of air ambulance services, the provider of
air ambulance services' group or practice association, or the facility
that is a party to the dispute are individuals who could have
significant involvement with the dispute. Relationships with these
individuals could therefore improperly affect the certified IDR
entities' ability to be impartial.
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\19\ Similar to the July 2021 interim final rules, the term
``facility'' indicates a facility that furnishes health care
services that is subject to the surprise billing protections of the
No Surprises Act, such as a hospital (including a hospital's
emergency department), urgent care center, or ambulatory surgical
center. For purposes of good faith estimates under 45 CFR 149.610
and the Patient-Provider dispute resolution process in 45 CFR
149.620 ``facility'' includes an institution (such as a hospital or
hospital outpatient department, critical access hospital, ambulatory
surgical center, rural health center, federally qualified health
center, laboratory, or imaging center) in any state in which state
or applicable local law provides for the licensing of such an
institution, that is licensed as such an institution pursuant to
such law or is approved by the agency of such state or locality
responsible for licensing such institution as meeting the standards
established for such licensing.
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These interim final rules also define what constitutes a material
familial relationship, a material financial relationship, or material
professional relationship with a party to the payment determination. In
developing these definitions, the Departments looked to states'
conflict-of-interest standards for external review and arbitrations of
surprise billing claims. These state standards typically use terms that
are similar to those used in Code section 9816(c)(4)(F)(i)(II), ERISA
section 716(c)(4)(F)(i)(II), and PHS Act section 2799A-
1(c)(4)(F)(i)(II).\20\ By adopting definitions that largely mirror
these state standards, the Departments seek to ensure that the
definitions are workable and increase the likelihood that IDR entities
may be familiar with these standards, if they have performed services
in these states. Accordingly, these interim final rules provide that
the term ``material familial relationship'' means any relationship as a
spouse, domestic partner, child, parent, sibling, spouse's or domestic
partner's parent, spouse's or domestic partner's sibling, spouse's or
domestic partner's child, child's parent, child's spouse or domestic
partner, or sibling's spouse or domestic partner. ``Material financial
relationship'' means any financial interest of more than five percent
of total annual revenue or total annual income of a certified IDR
entity or an officer, director, or manager thereof, or of a reviewer or
reviewing physician employed or engaged by a certified IDR entity to
conduct or participate in any payment determination under the Federal
IDR process. Under the definition of ``material financial
relationship,'' annual revenue and annual income do not include
mediation fees received by mediators who are also arbitrators, provided
that the mediator acts in the capacity of a mediator and does not
represent a party in the mediation. Finally, with respect to terms
related to the conflict-of-interest standards, ``material professional
relationship'' means any physician-patient relationship, any
partnership or employment relationship or affiliation, any shareholder
or similar ownership interest in a professional corporation,
partnership, or other similar entity, or any independent contractor
arrangement that constitutes a material financial relationship with any
expert used by the certified IDR entity or any officer or director of
the certified IDR entity. The Departments solicit comment on whether
the defined terms related to the conflict-of-interest standards should
include threshold requirements to further define the level of
relationship that would rise to the level of a conflict of interest.
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\20\ See e.g., WAC 284-43A-010; N.Y. Comp. Codes R. & Regs. tit.
11 section 410.2.
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Additionally, under these interim final rules, the Departments
define certain terms related to confidentiality, information security,
and privacy requirements that apply to an IDR entity seeking
certification under these interim final rules. Code section
9816(c)(4)(A)(v), ERISA section 716(c)(4)(A)(v), and PHS Act section
2799A-1(c)(4)(A)(v) require certified IDR entities to maintain the
confidentiality of individually identifiable health information (IIHI)
obtained while making payment determinations and engaging in other
activities related to the Federal IDR process. In establishing
definitions for these terms, the Departments looked to existing Federal
standards, particularly the Health Insurance Portability and
Accountability Act of 1996 (HIPAA), the Health Information Technology
for Economic and Clinical Health (HITECH) Act, and the privacy,
security, and breach notification standards under 45 CFR part 160 A and
subparts A, C, D, and E of part 164, because the Departments are of the
view that these provisions are industry standards. The Departments have
modified these standards in some cases to fit the circumstances of IDR
entities.
These interim final rules define ``Individually identifiable health
information (IIHI)'' to mean any information, including demographic
data, that relates to the past, present, or future physical or mental
health or condition of an individual; the provision of health care to
an individual; or the past, present, or future payment for the
provision of health care to an individual; and that identifies the
individual; or with respect to which there is a reasonable basis to
believe the information can be used to identify the individual.\21\
Finally, these interim final rules define ``Unsecured IIHI'' to mean
IIHI that is not rendered unusable, unreadable, or indecipherable to
unauthorized persons through the use of a technology or methodology
specified by the Departments. For technologies and methodologies
approved for this purpose, certified IDR entities should refer to the
HHS Guidance to Render Unsecured Protected Health Information Unusable,
Unreadable, or Indecipherable to Unauthorized Individuals.\22\
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\21\ Note that this definition is broader than the definition of
IIHI set forth in the Health Insurance Portability and
Accountability Act (HIPAA) Rules at 45 CFR 160.103.
\22\ HHS Office for Civil Rights, ``Guidance to Render Unsecured
Protected Health Information Unusable, Unreadable, or Indecipherable
to Unauthorized Individuals,'' available at https://www.hhs.gov/guidance/document/guidance-render-unsecured-protected-health-information-unusable-unreadable-or.
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These interim final rules provide that the term ``breach'' means
the acquisition, access, use, or disclosure of IIHI in a manner not
permitted under 26 CFR 54.9816-8T(e)(2)(v), 29 CFR 2590.716-8(e)(2)(v),
and 45 CFR 149.510(e)(2)(v) that compromises the security or privacy of
the IIHI. Under these interim final rules, a breach excludes any
unintentional acquisition, access, or use of IIHI by personnel,
including a contractor or subcontractor, acting under the authority of
a certified IDR entity, if the acquisition, access, or use was made in
good faith and within the scope of authority and does not result in
further use or disclosure in a
[[Page 55989]]
manner not permitted under 26 CFR 54.9816-8T(e)(2)(v), 29 CFR 2590.716-
8(e)(2)(v), and 45 CFR 149.510(e)(2)(v). Also excluded is any
inadvertent disclosure by a person who is authorized to access IIHI as
personnel of a certified IDR entity to another person authorized to
access IIHI as personnel of the same certified IDR entity (including a
contractor or subcontractor of the certified IDR entity), and the
information received as a result of such disclosure is not further used
or disclosed in a manner not permitted under 26 CFR 54.9816-
8T(e)(2)(v), 29 CFR 2590.716-8(e)(2)(v), and 45 CFR 149.510(e)(2)(v).
Finally, also excluded is a disclosure of IIHI when a certified IDR
entity has a good faith belief that an unauthorized person to whom the
disclosure was made would not reasonably have been able to retain such
information. For example, if, while conducting an IDR payment
determination, a certified IDR entity sends paperwork containing IIHI
to the wrong address and the paperwork is returned by the post office,
unopened, as undeliverable, the certified IDR entity can conclude that
the entity at the improper address could not reasonably have retained
the information. The definition of breach additionally provides that an
acquisition, access, use, or disclosure of IIHI in a manner not
permitted under 26 CFR 54.9816-8T(e)(2)(v), 29 CFR 2590.716-8(e)(2)(v),
and 45 CFR 149.510(e)(2)(v) is presumed to be a breach unless the
certified IDR entity demonstrates that there is a low probability that
the security or privacy of the IIHI has been compromised based on a
risk assessment of at least the following factors: (1) The nature and
extent of the IIHI involved, including the types of identifiers and the
likelihood of re-identification; (2) the unauthorized person who used
the IIHI or to whom the disclosure was made; (3) whether the IIHI was
actually acquired or viewed; and (4) the extent to which the risk to
the IIHI has been mitigated.
Additionally, ``qualified IDR item or service'' means an item or
service that is either an emergency service furnished by a
nonparticipating provider or nonparticipating emergency facility
subject to the protections of 26 CFR 54.9816-4T, 29 CFR 2590.716-4, or
45 CFR 149.110, for which the conditions of 45 CFR 149.410(b)
(regarding receipt of notice of surprise billing protections and
providing consent to waive them) are not met. The term also means an
item or service furnished by a nonparticipating provider at a
participating health care facility subject to the requirements of 26
CFR 54.9816-5T, 29 CFR 2590.716-5, and 45 CFR 149.120, for which the
conditions of 149.420(c)-(i) (regarding receipt of notice of surprise
billing protections and providing consent to waive them) are not met,
for which the provider or facility (as applicable) or plan or issuer
submits a valid Notice of IDR Initiation initiating the Federal IDR
process. For the Notice of IDR Initiation to be valid, the open
negotiation period under 26 CFR 54.9816-8T(b)(1), 29 CFR 2590.716-
8(b)(1), and 45 CFR 149.510(b)(1) must have lapsed, and an agreement on
the payment amount must not have been reached. The term qualified IDR
item or service includes air ambulance services provided by
nonparticipating providers of air ambulance services subject to the
protections of 26 CFR 54.9817-1T, 29 CFR 2590.717-1, and 45 CFR
149.130, as these services are defined in 26 CFR 54.9816-3T, 29 CFR
2590.716-3, and 45 CFR 149.30, for which the open negotiation period
under 26 CFR 54.9816-8T(b)(1), 29 CFR 2590.716-8(b)(1), and 45 CFR
149.510(b)(1) has lapsed, and no agreement on the payment amount has
been reached.
The term ``qualified IDR item or service'' does not include items
and services for which the out-of-network rate is determined by an All-
Payer Model Agreement under section 1115A of the Social Security Act,
or by reference to a specified state law. Additionally, this term does
not include items or services submitted by the initiating party that
are subject to the 90-calendar-day suspension period under 26 CFR
54.9816-8T(c)(4)(vii)(B), 29 CFR 2590.716-8(c)(4)(vii)(B), and 45 CFR
149.510(c)(4)(vii)(B). However, the term may include items or services
that are subject to the 90-calendar-day suspension period if they are
submitted during the subsequent 30-business-day period, as allowed
under these interim final rules. The Departments solicit comment on
these definitions, including whether other terms should be defined.
B. The Term ``Days''
The No Surprises Act specifies a number of time periods that
providers, facilities, providers of air ambulance services, plans,
issuers, certified IDR entities, and the Departments must abide by
throughout the course of the Federal IDR process, including time
periods for initiation of the Federal IDR process, selection of a
certified IDR entity, submission of documents, and payment
determinations. The statute is largely silent on whether the term
``days'' used in these provisions means business days or calendar days.
However, in certain provisions, the No Surprises Act specifies the use
of calendar days or business days, indicating that where the statute is
silent the Departments may choose either meaning. The Departments
received feedback from stakeholders that meeting various deadlines
under the Federal IDR process may be challenging (for example,
depending on a certified IDR entity's case load or the number of claims
that a provider or facility batches together) and that, if possible,
additional time should be provided for the parties and the certified
IDR entity to meet these deadlines. The Departments are of the view
that in order to provide parties with the most time permitted under the
statute to meet the various deadlines under the Federal IDR process as
set forth in the No Surprises Act, business days should be used, unless
there is a reason to use calendar days. For example, these interim
final rules provide that calendar days are used for the timing
requirement for the non-prevailing party to make payment after the
certified IDR entity issues a written determination, as well as the
requirement barring the initiation of the Federal IDR process for a
payment dispute that concerns the same or similar qualified IDR item or
service that was the subject of the initial notification during the 90-
calendar-day period following the initial determination discussed later
in this preamble. In these instances, the Departments are of the view
that once a decision has been rendered, these interim final rules
should not unduly delay the payment entitled under that decision.
Moreover, in terms of the 90-day suspension period, the Departments are
of the view that using a business day standard here has the potential
to create an unnecessary barrier to accessing the Federal IDR process.
Furthermore, the Departments are of the view that using business
days will avoid issues that may arise if deadlines were to fall on
weekends or Federal holidays. Therefore, business days (Monday through
Friday, not including Federal holidays) instead of calendar days are
used throughout these interim final rules for the Federal IDR process
unless otherwise indicated, regardless of whether a nonparticipating
provider or facility, or a plan or issuer's business typically operates
on weekend days.
C. Open Negotiation and Initiation of the Federal IDR Process
Code section 9816(c)(1)(A), ERISA section 716(c)(1)(A), PHS Act
section 2799A-1(c)(1)(A), and these interim final rules provide that
with respect to an emergency service, a nonemergency
[[Page 55990]]
item or service furnished by a nonparticipating provider at a
participating facility subject to the surprise billing protections for
which the notice and consent exceptions do not apply, and for which the
out-of-network rate is not determined by reference to an All-Payer
Model Agreement under section 1115A of the Social Security Act or
specified state law as defined in 26 CFR 54.9816-3T, 29 CFR 2590.716-3,
and 45 CFR 149.30, the provider or facility, or plan or issuer, may
engage in open negotiations to determine the total out-of-network rate
(including any cost sharing). If the parties fail to reach an agreement
through open negotiation, they may initiate the Federal IDR process.
Code section 9817(b), ERISA section 717(b), and PHS Act section 2799A-
2(b) provide that out-of-network rates for air ambulance services may
be determined through open negotiation or an IDR process that is
largely identical to the process provided for in Code section 9816(c),
ERISA section 716(c), and PHS Act section 2799A-1(c), provided the out-
of-network rate is not determined by reference to an All-Payer Model
Agreement under section 1115A of the Social Security Act or specified
state law as defined in 26 CFR 54.9816-3T, 29 CFR 2590.716-3, and 45
CFR 149.30. Therefore, where applicable, providers of air ambulance
services are included in the preamble and regulatory language text
describing open negotiations and the Federal IDR process. The primary
distinctions between air ambulance services and other health care
services apply in how the certified IDR entity should select an offer
and in the obligations on the certified IDR entity regarding reporting
of information relating to the Federal IDR process.
1. Open Negotiation
The open negotiation period may be initiated by any party during
the 30-business-day period beginning on the day the nonparticipating
provider, facility, or nonparticipating provider of air ambulance
services receives either an initial payment or a notice of denial of
payment for an item or service.\23\ If the provider, facility, or
provider of air ambulance services accepts such initial payment as the
total payment, that initial payment combined with the cost-sharing
amount for the item or service is the out-of-network rate, as defined
in 26 CFR 54.9816-3T, 29 CFR 2590.716-3, and 45 CFR 149.30. Under the
July 2021 interim final rules, the plan or issuer must provide in
writing, with each initial payment or notice of denial of payment,
certain information, including a statement that if the provider,
facility, or provider of air ambulance services, as applicable, wishes
to initiate a 30-business-day open negotiation period for purposes of
determining the out-of-network rate, the provider, facility, or
provider of air ambulance services may contact the appropriate person
or office to initiate open negotiation, and that if the 30-business-day
open negotiation period does not result in an agreement on the out-of-
network rate, generally, the provider, facility, or provider of air
ambulance services may initiate the Federal IDR process. The plan or
issuer must also provide contact information, including a telephone
number and email address, for the appropriate person or office to
initiate open negotiations for purposes of determining an amount of
payment (including cost sharing) for the item or service.
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\23\ As clarified in the July 2021 interim final rules, the
initial payment should be an amount that the plan or issuer
reasonably intends to be payment in full based on the relevant facts
and circumstances, prior to the beginning of any open negotiations
or initiation of the Federal IDR process.
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In order for a plan, issuer, provider, facility, or provider of air
ambulance services to know when it is a party to an open negotiation
period and which items or services are subject to negotiation, these
interim final rules require that the party initiating the open
negotiation must provide written notice to the other party of its
intent to negotiate, referred to as an open negotiation notice. The
open negotiation notice must include information sufficient to identify
the items or services subject to negotiation, including the date the
item or service was furnished, the service code, the initial payment
amount or notice of denial of payment, as applicable, an offer for the
out-of-network rate, and contact information of the party sending the
open negotiation notice. The open negotiation notice must be sent
within 30 business days of the initial payment or notice of denial of
payment from the plan or issuer regarding such item or service and must
be provided in writing. The party sending the open negotiation notice
may satisfy this requirement by providing the notice to the opposing
party electronically (such as by email) if the following two conditions
are satisfied: (1) The party sending the open negotiation notice has a
good faith belief that the electronic method is readily accessible to
the other party; and (2) the notice is provided in paper form free of
charge upon request. For example, if a provider sends an open
negotiation notice to the email address identified by the group health
plan or issuer in the notice of denial or initial payment, such
electronic delivery would satisfy this requirement (as long as the
provider also sends the notice in paper form free of charge upon
request). Similarly, if a provider, facility, or provider of air
ambulance services submits a claim electronically, this could provide
the plan or issuer with a good faith belief that the electronic method
is readily accessible to the other party.
The 30-business-day open negotiation period begins on the day on
which the open negotiation notice is first sent by a party. The
Departments expect that most open negotiation notices will be sent
electronically, and that, in general, the date the notice is sent will
also be the date the notice is received. Furthermore, given that the
parties have already made initial contact (namely that the provider or
facility has transmitted a bill to the plan or issuer, and the plan or
issuer has sent a notice of denial or initial payment to the provider
or facility), the Departments anticipate that the parties should be
able to provide effective notice without problems, and encourage the
parties to take reasonable measures to ensure that actual notice is
provided, such as confirming that the email address is accurate. The
Departments caution that if the open negotiation notice is not properly
provided to the other party (and no reasonable measures have been taken
to ensure actual notice has been provided), the Departments may
determine that the 30-business-day open negotiation period has not
begun. In such case, any subsequent payment determination from a
certified IDR entity may be unenforceable due to the failure of the
party sending the open negotiation notice to meet the open negotiation
requirement of these interim final rules. Therefore, the Departments
encourage parties submitting open negotiation notices to take steps to
confirm the other party's contact information and confirm receipt by
the other party, through approaches such as read receipts, especially
where a party does not initially respond to an open negotiation notice.
The Departments solicit comment on whether there are any challenges or
additional clarifications needed to ensure the parties are afforded the
full open negotiation period, including whether there are any
challenges regarding designating the date the notice is sent as the
commencement date of the open negotiation period.
To facilitate communication between parties and compliance with
this notice requirement, the Departments are concurrently issuing a
standard notice
[[Page 55991]]
that the parties must use to satisfy the open negotiation notice
requirement.
Negotiation during the open negotiation period will occur without
the involvement of the Departments or a certified IDR entity. The
Departments note that this requirement for a 30-business-day open
negotiation period prior to initiating the Federal IDR process does not
preclude the parties from reaching an agreement in fewer than 30
business days. However, in the event the parties do not reach an
agreement, the parties must still exhaust the 30-business-day open
negotiation period before either party may initiate the Federal IDR
process. The Departments encourage parties to negotiate in good faith
during this time period to reach an agreement on the out-of-network
rate. To the extent parties reach agreement during this period, they
can avoid the administrative costs associated with the Federal IDR
process.
2. Initiating the Federal IDR Process and the Notice of IDR Initiation
Code section 9816(c)(1)(B), ERISA section 716(c)(1)(B), PHS Act
section 2799A-1(c)(1)(B), and these interim final rules provide that
with respect to items or services that were subject to open
negotiation, if the parties have not reached an agreed-upon amount for
the out-of-network rate by the last day of the open negotiation period,
either party may initiate the Federal IDR process during the 4-
business-day period beginning on the 31st business day after the start
of the open negotiation period. A party may not initiate the Federal
IDR process if, with respect to an item or service, the party knows or
reasonably should have known that the provider or facility provided
notice and obtained consent from a participant, beneficiary, or
enrollee to waive surprise billing protections consistent with PHS Act
sections 2799B-1(a) and 2799B-2(a) and the implementing regulations at
45 CFR 149.410(b) and 149.420(c)-(i).
To initiate the Federal IDR process, the initiating party must
submit a notice to the other party and to the Departments (Notice of
IDR Initiation) through the Federal IDR portal. The Notice of IDR
Initiation must include: (1) Information sufficient to identify the
qualified IDR items or services (and whether the qualified IDR items or
services are designated as batched items and services), including the
dates and location of the items or services, the type of qualified IDR
items or services (such as emergency services, post-stabilization
services, professional services, hospital-based services),
corresponding service and place-of-service codes, the amount of cost
sharing allowed and the amount of the initial payment made by the plan
or issuer for the qualified IDR items or services, if applicable; (2)
the names and contact information of the parties involved, including
email addresses, phone numbers, and mailing addresses; (3) the state
where the qualified IDR items or services were furnished; (4) the
commencement date of the open negotiation period; (5) the initiating
party's preferred certified IDR entity; (6) an attestation that the
items or services are qualified IDR items and services within the scope
of the Federal IDR process; (7) the QPA; (8) information about the QPA
as described in 26 CFR 54.9816-6T(d), 29 CFR 2590.716-6(d), and 45 CFR
149.140(d); and (9) general information describing the Federal IDR
process. This general information will help ensure that the non-
initiating party is informed about the process and is familiar with the
next steps. Such general information should include a description of
the scope of the Federal IDR process and key deadlines in the Federal
IDR process, including the dates to initiate the Federal IDR process,
how to select a certified IDR entity, and the process for selecting an
offer. The Departments have developed a form that parties must use to
satisfy this requirement to provide general information describing the
Federal IDR process.
As with the open negotiation notice, the initiating party may
provide the Notice of IDR Initiation to the opposing party
electronically (such as by email) if the following two conditions are
satisfied: (1) The initiating party has a good faith belief that the
electronic method is readily accessible by the other party; and (2) the
notice is provided in paper form free of charge upon request.
In addition to furnishing notice to the non-initiating party, the
initiating party must also furnish the Notice of IDR Initiation to the
Departments on the same day the notice is furnished to the non-
initiating party. The initiating party must provide its Notice of IDR
Initiation through the Departments' Federal IDR portal. Moreover, IDR
entities, certified IDR entities and disputing parties will be required
to use the Federal IDR portal to perform certain functions related to
the Federal IDR process. The Federal IDR portal will be used to
facilitate and support IDR entity certification, the initiation of the
Federal IDR process, the selection of certified IDR entities, the
submission of supporting documentation to certified IDR entities, and
the submission of certified IDR entity reporting metrics, as required
by these interim final rules.
Under Code section 9816(c)(1)(B), ERISA section 716(c)(1)(B), and
PHS Act section 2799A-1(c)(1)(B), the date of initiation of the Federal
IDR process will be the date of the submission or such other date
specified by the Departments that is not later than the date of receipt
of the Notice of IDR Initiation by both the other party and the
Departments. Consistent with the flexibility provided by the statute to
specify an alternate date of initiation, these interim final rules
specify that the initiation date of the Federal IDR process is the date
of receipt of the Notice of IDR Initiation by the Departments. As
noted, since the Departments will monitor the Federal IDR portal,
submitting the Notice of IDR Initiation through the Federal IDR portal
will provide a clear date on which the Notice of IDR Initiation has
been received by the Departments. This approach will better enable the
Departments to meet the statutory requirement to select a certified IDR
entity within 6 business days of the initiation of the IDR process in
instances in which the parties have not jointly selected a certified
IDR entity. The Departments will acknowledge and confirm the initiation
date with both parties upon receipt of the Notice of IDR Initiation.
Given that the Departments expect most of these notices to be provided
electronically, and that the parties will have been in continuous
contact by this point in the process (through the submission of the
initial bill, the remittance of the initial payment of the claim or
notice of denial of payment, the submission of the open negotiation
notice, and negotiations during the open negotiation period), the
Departments expect minimal delay between when the Departments are
notified through the portal and when the opposing party is notified
(either by the initiating party or the Departments). The Departments
solicit comment on both the content of the Notice of IDR Initiation as
well as the manner for providing the notices as set forth under these
interim final rules.
D. Federal IDR Process Following Initiation
1. Selection of Certified IDR Entity
Under Code section 9816(c)(4)(F), ERISA section 716(c)(4)(F), and
PHS Act section 2799A-1(c)(4)(F), the plan or issuer and the
nonparticipating provider, nonparticipating emergency facility, or
nonparticipating provider of air ambulance services (as applicable)
that are parties to the Federal IDR process may jointly select a
certified IDR entity no later than 3 business days
[[Page 55992]]
following the date of the IDR initiation. As stated above, in
initiating the Federal IDR process, the initiating party will indicate
its preferred certified IDR entity in the Notice of IDR Initiation.
Under these interim final rules, the party in receipt of the Notice of
IDR Initiation may agree or object to the selection of the preferred
certified IDR entity identified in the Notice of IDR Initiation. If the
non-initiating party in receipt of the Notice of IDR Initiation fails
to object within 3 business days of the date of initiation of the
Federal IDR process, the preferred certified IDR entity identified in
the Notice of IDR Initiation will be the selected certified IDR entity,
provided that the certified IDR entity does not have a conflict of
interest. If the party in receipt of the Notice of IDR Initiation
timely objects, that party must timely notify the initiating party of
the objection, including an explanation of the reason for objecting,
and propose an alternative certified IDR entity. The initiating party
must then agree or object to the alternative certified IDR entity. In
order to jointly select a certified IDR entity, the plan or issuer and
the nonparticipating provider, nonparticipating emergency facility, or
nonparticipating provider of air ambulance services must agree on a
certified IDR entity not later than 3 business days after the date of
initiation of the Federal IDR process. Due to the short timeframe for
this selection, the Departments anticipate that communication between
the parties regarding certified IDR entity selection will typically be
conducted through electronic mail to the email addresses used to send
and receive the Notice of IDR Initiation. The Departments anticipate
that most users of the Federal IDR process will be providers,
facilities, providers of air ambulance services, plans, and issuers,
which are likely to use electronic communications regularly. If both
parties agree on and select a certified IDR entity, or fail to agree
upon a certified IDR entity within the specified timeframe, the
initiating party must notify the Departments by electronically
submitting the notice of the certified IDR entity selection or failure
to select (as applicable), no later than 1 business day after the end
of the 3-business-day period (or in other words, 4 business days after
the date of initiation of the Federal IDR process) through the Federal
IDR portal. In addition, in instances where the non-initiating party
believes that the Federal IDR process is not applicable, the non-
initiating party must notify the Departments through the Federal IDR
portal within the same timeframe that the notice of selection (or
failure to select) is required and provide information regarding the
lack of applicability. Based upon this information and any additional
information requested by the selected certified IDR entity, the
selected certified IDR entity will determine whether the Federal IDR
process is applicable. The Departments seek comment on this approach
and whether any challenges exist in relying solely upon electronic
notifications.
The Departments will make available on the Federal IDR portal a
list of certified IDR entities among which parties to the Federal IDR
process may select, including basic information about the certified IDR
entities, such as contact information, certified IDR entity numbers
(unique identification numbers assigned to each certified IDR entity by
the Departments), websites, and service areas. The Departments seek
comment on this approach, including whether additional information
about the certified IDR entities should be made public, and whether any
challenges exist in relying solely upon electronic notifications.
Under these interim final rules, the selected certified IDR entity
must not have a conflict of interest as defined in 26 CFR 54.9816-
8T(a)(2), 29 CFR 2590.716-8(a)(2), and 45 CFR 149.510(a)(2). The
selected certified IDR entity must also ensure that assignment of
personnel to the dispute and decisions regarding hiring, compensation,
termination, promotion, or other similar matters related to personnel
assigned to the dispute are not made based upon the likelihood that the
assigned personnel will support a particular party or type of party
(that is, provider, facility, provider of air ambulance services, plan,
or issuer) to the determination being disputed other than as outlined
under 26 CFR 54.9816-8T(c)(4)(iii), 29 CFR 2590.716-8(c)(4)(iii), and
45 CFR 149.510(c)(4)(iii). Also, as agents of the certified IDR entity,
personnel responsible for handling individual payment determinations
must comply with the certification requirements of these interim final
rules as set forth by their principal, the certified IDR entity, in its
procedures. Therefore, the personnel assigned to disputes by the
certified IDR entity must not have a conflict of interest, as defined
by 26 CFR 54.9816-8T(a)(2), 29 CFR 2590.716-8(a)(2), and 45 CFR
149.510(a)(2). In addition, any personnel assigned to the matter must
not have been a party to the determination being disputed or an
employee or agent of such a party within the 1 year immediately
preceding the dispute resolution assignment, similar to the ``revolving
door'' laws \24\ laid out in 18 U.S.C. 207(b), 207(c), and 207(e).
Under 18 U.S.C. 207(b), 207(c), and 207(e), former officers or
employees of the executive branch, including independent agencies, are
prohibited from aiding or advising on matters with which they were
involved while in the executive branch for 1 year. These interim final
rules adopt the same 1-year timeframe by prohibiting former employees'
or agents' involvement in dispute resolution processes involving former
employers for 1 year. The Departments are of the view that this
approach provides a reasonable and appropriate standard for preventing
conflicts of interest. Although 18 U.S.C. 207(b), 207(c), and 207(e)
are typically used in reference to trade or treaty negotiations, the 1-
year prohibition is also a standard applied generally to employees of
the executive and legislative branches and independent agencies. These
statutes represent conflict-of-interest standards that the Departments
view as reasonable and appropriate for developing standards for
preventing conflicts of interest involving certified IDR entities that
are resolving disputes in the Federal IDR process. Certified IDR
entities are expected to ensure staff compliance with the standards of
these interim final rules, and as such, attestations of no conflict of
interest at the organization level are intended also to represent the
absence of conflicts of interest among the employees and agents of the
certified IDR entity.
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\24\ Maskell, J., Post-Employment, ``Revolving Door,'' Laws for
Federal Personnel. Congressional Research Service. 2014. https://fas.org/sgp/crs/misc/R42728.pdf.
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The Departments anticipate that certified IDR entities will likely
be limited to organizations with sufficient staff who have arbitration
and health care claims experience, including entities currently
providing services for external review or state IDR determinations. To
further ensure that personnel assigned to any determination in the
Federal IDR process do not have a conflict of interest, the Departments
have included additional safeguards for personnel, as well as an
additional requirement that the certified IDR entity have procedures in
place to ensure adherence by personnel with these additional
safeguards. Accordingly, at the time of application for certification,
the IDR entity must attest that it has procedures in place to ensure
that no conflicts of interest exist or will exist, as set forth in the
discussion of
[[Page 55993]]
certification requirements later in this preamble. As an additional
requirement, certified IDR entities will have had to submit, as part of
their application to be certified IDR entities, policies and procedures
for conducting ongoing audits for conflicts of interest, to ensure that
should any arise, the certified IDR entity procedures in place to
inform the Departments of the conflict of interest and mitigate the
risk by reassigning the dispute to other personnel in the event that
any personnel previously assigned have a conflict of interest.
If the parties have agreed on a certified IDR entity, the notice of
the certified IDR entity selection must include the following
information: (1) The name of the certified IDR entity; (2) the
certified IDR entity number; and (3) an attestation by both parties (or
by the initiating party if the other party has not responded) that the
selected certified IDR entity does not have a conflict of interest. The
attestation must be submitted based on conducting a conflicts of
interest check using information available (or accessible using
reasonable means) to the parties (or the initiating party if the other
party has not responded) at the time of the selection.
As stated earlier in this preamble, upon receipt of notification
that the parties failed to agree on a certified IDR entity, the
Departments will select a certified IDR entity. In such instances, the
Departments will randomly select a certified IDR entity that charges a
fee within the allowed range provided for in guidance and defined
further in section III.D.4.viii of this preamble. If there are
insufficient certified IDR entities that charge a fee within the
allowed range available to adjudicate the payment determination, the
Departments will randomly select a certified IDR entity that has
received approval to charge a fee outside of the allowed range. The
Departments will make the random selection not later than 6 business
days after the date of initiation of the Federal IDR process, and will
notify the parties of the selection. The Departments considered
alternative approaches to randomly selecting a certified IDR entity,
including whether the Departments should consider the specific fee of
the certified IDR entity or look to other factors, such as how often
the certified IDR entity chooses the amount closest to the QPA.
Following consideration of various approaches, the Departments have
chosen to utilize a random selection method to select a certified IDR
entity that charges a fee within the allowed range (or has received
approval from the Departments to charge a fee outside of the allowed
range, if there are insufficient certified IDR entities that charge a
fee within the allowed range available) and that does not have a
conflict of interest with either party. The Departments are of the view
that this approach will help ensure that requests for IDR and workload
associated with making determinations for such requests are
appropriately distributed across the certified IDR entities, will
result in an efficient and timely assignment of a certified IDR entity
to payment determinations, and will protect against bias in the types
of cases a certified IDR entity reviews while encouraging certified IDR
entities to charge reasonable fees for their services. Additionally,
the Departments are of the view that this approach will provide
predictability to the parties regarding the fees they will be expected
to pay if they do not select the certified IDR entity. The Departments
seek comment on this approach, including whether the random selection
method should be limited only to certified IDR entities that charge a
fee within the allowed range. The Departments may issue future guidance
regarding whether entities that have received approval from the
Departments to charge a fee outside of the allowed range may be
selected by the Departments under the random selection method.
After selection by the parties (including when the initiating party
selects a certified IDR entity and the other party does not object), or
by the Departments, the certified IDR entity must also review its
selection to ensure that it meets the requirements of 26 CFR 54.9816-
8T(c)(1)(ii), 29 CFR 2590.716-8(c)(1)(ii), and 45 CFR 149.510(c)(1)(ii)
related to potential conflicts of interest. If the selected certified
IDR entity meets these requirements, the certified IDR entity must
attest to meeting these requirements. If the certified IDR entity is
unable to attest that it meets these requirements, the certified IDR
entity must notify the Departments through the Federal IDR portal
within 3 business days, after which the Departments will notify the
parties. Upon notification, the parties will have 3 business days to
select another certified IDR entity under the process described in 26
CFR 54.9816-8T(c)(1), 29 CFR 2590.716-8(c)(1), or 45 CFR 149.510(c)(1).
If the parties notify the Departments that they have not agreed on a
certified IDR entity, the Departments may randomly select another
certified IDR entity.
The certified IDR entity must also review the information submitted
by the parties to determine whether the Federal IDR process applies,
including whether an All-Payer Model Agreement or specified state law
applies. If the Federal IDR process does not apply, the certified IDR
entity must notify the Departments and the parties within 3 business
days of making this determination.
2. Authority To Continue Negotiation
Code sections 9816(c)(2)(B) and 9817(b)(2)(B), ERISA sections
716(c)(2)(B) and 717(b)(2)(B), PHS Act sections 2799A-1(c)(2)(B) and
2799A-2(b)(2)(B), and these interim final rules provide that, in
instances in which the parties agree on an amount for a qualified IDR
item or service after the Federal IDR process is initiated but prior to
a determination by a certified IDR entity, the agreed-upon amount will
be treated as the out-of-network rate and will be treated as resolving
the dispute. If the parties to the Federal IDR process agree on an out-
of-network rate for a qualified IDR item or service after providing to
the Departments the Notice of IDR Initiation, but before the certified
IDR entity has made its payment determination, the initiating party
must notify the Departments and the certified IDR entity (if selected)
by electronically submitting notification of such agreement through the
Federal IDR portal as soon as possible but no later than 3 business
days after the date of the agreement. As is the case in instances where
the parties do not come to an agreement before the certified IDR entity
selects the amount submitted by one of the parties, the amount by which
this agreed-upon out-of-network rate exceeds the cost-sharing amount
for the qualified IDR item or service is the total plan or coverage
payment.\25\ The plan or issuer must pay the balance of the total plan
or coverage amount of the agreed-upon out-of-network rate (with any
initial payment made counted towards the total plan or coverage
payment) to the nonparticipating provider, nonparticipating emergency
facility, or nonparticipating provider of air ambulance services not
later than 30 business days after the agreement is reached. As noted in
section III.D.4.viii of this preamble regarding costs of the Federal
IDR process, when there is an agreement after initiation and a
certified IDR entity is selected but prior to a determination by the
certified IDR entity, each party must pay half of the certified IDR
entity fee, unless the parties agree otherwise on a method for
allocating the applicable fee. In no instance may either party seek
[[Page 55994]]
additional payment from the participant or beneficiary, including in
instances in which the out-of-network rate exceeds the QPA. When an
agreement is reached, either before or after a certified IDR entity is
selected, notification to the Departments must include the out-of-
network rate (that is, the total payment amount, including both cost
sharing and the total plan or coverage payment) and signatures from an
authorized signatory for each party.
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\25\ See 26 CFR 54.9816-4T, 54.9816-5T, and 54.9817-1T; 29 CFR
2590.716-4, 2590.716-5, and 2590.717-1; and 45 CFR 149.110, 149.120,
and 149.130.
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3. Treatment of Batched Items and Services
Code section 9816(c)(3), ERISA section 716(c)(3), and PHS Act
section 2799A-1(c)(3) direct the Departments to specify criteria under
which multiple qualified IDR items and services may be considered
jointly as part of one payment determination (batching). Under these
interim final rules, multiple claims for qualified IDR items and
services may be submitted and considered jointly as part of one payment
determination by a certified IDR entity (batched items and services)
only if certain conditions are met. Batched items and services
submitted and considered jointly as part of one payment determination
under 26 CFR 54.9816-8T(c)(3)(i), 29 CFR 2590.716-8(c)(3)(i), 45 CFR
149.510(c)(3)(i) are subject to the fee for batched determinations
under these interim final rules.
First, the qualified IDR items and services must be billed by the
same provider or group of providers or facility or same provider of air
ambulance services. Items and services are billed by the same provider
or group of providers or facility or same provider of air ambulance
services if the items or services are billed with the same National
Provider Identifier (NPI) or Taxpayer Identification Number (TIN).
Second, the payment for the items and services would be made by the
same group health plan or health insurance issuer.
Third, the qualified IDR items and services must be the same or
similar items or services. The definition of a same or similar item or
service in these interim final rules is consistent with the definition
under the July 2021 interim final rules. The Departments defined a same
or similar item or service in 26 CFR 54.9816-6T(a)(13), 29 CFR
2590.716-6(a)(13), and 45 CFR 149.140(a)(13) as those items and
services that are billed under the same service code, or a comparable
code under a different procedural code system, and the Departments
defined the service codes as the code that describes an item or service
using Current Procedural Terminology (CPT), Healthcare Common Procedure
Coding System (HCPCS), or Diagnosis-Related Group (DRG) codes.
Finally, all the qualified IDR items and services must have been
furnished within the same 30-business-day period, or the 90-calendar-
day suspension period described later in this preamble. Therefore, if
items or services are furnished within the 90-calendar-day suspension
period and meet the other applicable requirements, they may be
submitted and considered jointly as part of one payment determination
by a certified IDR entity, once the suspension period has ended. Under
Code section 9816(c)(9), ERISA section 716(c)(9), and PHS Act section
2799A-1(c)(9), the Departments may provide an alternative period to the
aforementioned 30-business-day period as determined by the Departments
for certain circumstances, such as low-volume items and services. The
Departments are using this authority to ensure that items and services
delivered during the 90-calendar-day suspension period are eligible for
the Federal IDR process and may be included in the same batch.
The Departments are of the view that the approach set forth to
allow for batching of multiple qualified IDR items and services will
avoid combinations of unrelated claims, providers, facilities,
providers of air ambulance services and plans and issuers in a single
dispute that could unnecessarily complicate an IDR payment
determination and create inefficiencies in the Federal IDR process. The
Departments solicit comment on this approach and whether there is a
need to prescribe an alternative period for other qualified IDR items
and services different from the 30-business-day period discussed
earlier in the discussion of the batching requirements and what
circumstances should be considered in defining any alternative period.
Additionally, in some cases, a plan or issuer may pay a provider,
facility, or provider of air ambulance services a single payment for
multiple services an individual received during an episode of care
(bundling). In the case of qualified IDR items or services that are
billed by a provider, facility, or provider of air ambulance services
as part of a bundled arrangement, or where a plan or issuer makes an
initial payment as a bundled payment (or specifies that a denial of
payment is made on a bundled payment basis), these interim final rules
provide that those qualified items or services may be submitted and
considered as part of one payment determination by a certified IDR
entity (and is subject to the fee for single determinations under 26
CFR 54.9816-8T(c)(3)(ii), 29 CFR 2590.716-8(c)(3)(ii), 45 CFR
149.510(c)(3)(ii)).
The Departments recognize that certain batched items and services
may have different QPAs. For example, if a determination includes
multiple batched claims for Service A furnished by Provider B to
individuals covered by Issuer C, with some individuals covered by plans
in the individual market and others covered by plans in the large group
market, there likely would be two different QPAs for the certified IDR
entity to consider--one QPA for the services furnished to individuals
enrolled in individual market coverage, and one QPA for individuals
with large group market coverage. As discussed elsewhere in this
preamble, when this is the case, the parties must provide the relevant
information for each QPA, and the certified IDR entity must consider
each QPA for each item or service separately. However, since batched
items and services involve the same or similar medical procedure,
batching is likely to reduce redundant IDR proceedings as well as
streamline the certified IDR entity's decision-making, as some of the
considerations relate to factors not specific to the individual
encounter.
The Departments seek comment on all aspects of the criteria for
batching claims and bundling, including whether additional conditions
should be added to limit batching or whether the conditions should be
amended to facilitate broader batching of qualified IDR items and
services. The Departments also seek comment on how frequently
nonparticipating providers, nonparticipating emergency facilities, or
nonparticipating providers of air ambulance services will be reimbursed
through a bundled payment and whether allowing items or services
included in a bundled payment by a provider or facility to be treated
as one payment determination could be used to circumvent the batching
requirements by not requiring precise consideration of what specific
claims within the batch should be arbitrated and which claims should
not, thereby resulting in potential overuse of the Federal IDR process
in a manner that creates inefficiencies.
4. Payment Determination
i. Submission of Offers
Code section 9816(c)(5)(B), ERISA section 716(c)(5)(B), and PHS Act
section 2799A-1(c)(5)(B) provide that, not later than 10 days after the
date of selection of the certified IDR entity with respect to a
determination for a
[[Page 55995]]
qualified IDR item or service, the plan or issuer and the
nonparticipating provider, nonparticipating emergency facility, or
provider of air ambulance services must each submit to the certified
IDR entity an offer for a payment amount for such qualified IDR item or
service. Under these interim final rules, the offer must be submitted
not later than 10 business days after the selection of the certified
IDR entity and must be expressed as both a dollar amount and the
corresponding percentage of the QPA represented by that dollar amount,
to facilitate the certified IDR entity reporting the offer as a
percentage of the QPA to the Departments. Where batched items and
services have different QPAs, the parties should provide these
different QPAs and may provide different offers for these batched items
and services, provided that the same offer should apply for all items
and services with the same QPA.
Parties to the Federal IDR process must also submit information
requested by the certified IDR entity relating to the offer. The
Departments intend for the Federal IDR portal to collect this
information as part of the offer submission process, such that
certified IDR entities will not have to directly request this
information. Providers and facilities must also indicate the size of
their practices and facilities at the time the information is
submitted. This will enable certified IDR entities to report on the
size of the provider practices and facilities, as required under 26 CFR
54.9816-8T(f)(1)(ii), 29 CFR 2590.716-8(f)(1)(ii), and 45 CFR
149.510(f)(1)(ii). Specifically, the provider must specify whether the
provider practice or organization has fewer than 20 employees, 20 to 50
employees, 51 to 100 employees, 101 to 500 employees, or more than 500
employees. For facilities, the facility must specify whether the
facility has 50 or fewer employees, 51 to 100 employees, 101 to 500
employees, or more than 500 employees. Providers and facilities must
also provide information on the practice specialty or type,
respectively (if applicable). Similarly, plans and issuers must provide
the coverage area of the plan or issuer, the relevant geographic region
for purposes of the QPA, and, for group health plans, whether they are
fully-insured, or partially or fully self-insured.\26\ FEHB carriers
must identify if a particular item or service relates to FEHB plans.
The information such as practice or facility size, coverage area,
geographic region, and whether a plan is fully-insured or partially or
fully self-insured is required to be submitted as part of an offer so
that the certified IDR entities can report this information to the
Departments. This information will inform the reports required from the
Departments under Code section 9816(c)(7), ERISA section 716(c)(7), and
PHS Act section 2799A-1(c)(7). Both parties must submit any other
information requested by the certified IDR entity relating to such
offer. In addition, parties may submit any information relating to the
offer, except that the information may not include information that
relates to usual and customary charges, billed amounts, and public
payor rates as discussed later in this preamble.
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\26\ Pursuant to OPM contracts with FEHB carriers under 5 U.S.C.
Ch. 89, all FEHB carriers offer fully insured health benefits plans
in consideration of premium payments pursuant to contract terms, and
no health benefits plan is self-insured by OPM or the federal
government.
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With regard to the number of employees of a provider or facility,
the Departments understand that hospitals and facilities may use a
variety of methods for staffing, such as through contracting with
physicians' practices or foundations whose physicians or medical staff
are not considered employees of the hospital or facility. The
Departments seek comment on whether additional guidance is needed to
account for these situations in the reporting of provider and facility
size.
ii. Selection of Offer for Qualified IDR Items or Services That Are Not
Air Ambulance Services
These interim final rules provide that, not later than 30 business
days after the selection of the certified IDR entity, the certified IDR
entity must select one of the offers submitted by the plan or issuer
and the provider or facility to be the out-of-network rate for the
qualified IDR item or service. For each qualified IDR item or service,
the amount by which this out-of-network rate exceeds the cost-sharing
amount for the qualified IDR item or service is the total plan or
coverage payment (with any initial payment made counted towards the
total plan or coverage payment). In selecting the offer, the certified
IDR entity must presume that the QPA is an appropriate payment amount
but must also consider the additional circumstances, following the
requirements of 26 CFR 54.9816-8T(c)(4)(iii)(B) through (D), 29 CFR
2590.716-8(c)(4)(iii)(B) through (D), and 45 CFR 149.510(c)(4)(iii)(B)
through (D), only if the information is submitted by the parties.
However, to be considered by the certified IDR entity, information
submitted by the parties must be credible and relate to the offer
submitted by either party, and must not include information on the
prohibited factors described in 26 CFR 54.9816-8T(c)(4)(v), 29 CFR
2590.716-8(c)(4)(v), or 45 CFR 149.510(c)(4)(v). After considering the
QPA, additional information requested by the certified IDR entity from
the parties, and all of the credible information that the parties
submit that is consistent with the requirements in 26 CFR 54.9816-
8T(c)(4)(i)(A), 29 CFR 2590.716-8(c)(4)(i)(A), or 45 CFR
149.510(c)(4)(i)(A), the certified IDR entity must select the offer
closest to the QPA, unless the credible information submitted by the
parties clearly demonstrates that the QPA is materially different from
the appropriate out-of-network rate, based on the additional
circumstances allowed under 26 CFR 54.9816-8T(c)(4)(iii)(B) through
(D), 29 CFR 2590.716-8(c)(4)(iii)(B) through (D), or 45 CFR
149.510(c)(4)(iii)(B) through (D) with respect to the qualified IDR
item or service. In these cases, or when the offers are equally distant
from the QPA but in opposing directions, the certified IDR entity must
select the offer that the certified IDR entity determines best
represents the value of the items or services, which could be either
party's offer.
These interim final rules define information as credible if upon
critical analysis the information is worthy of belief and is
trustworthy. These interim final rules also specify that a material
difference exists where there is substantial likelihood that a
reasonable person with the training and qualifications of a certified
IDR entity making a payment determination would consider the
information important in determining the out of network rate and view
the information as showing that the QPA is not the appropriate out-of-
network rate under such additional circumstances.
If the certified IDR entity determines that credible information
about additional circumstances clearly demonstrates that the QPA is
materially different from the appropriate out-of-network rate, the
certified IDR entity must select the offer that the certified IDR
entity determines best represents the appropriate out-of-network rate
for the qualified IDR items or services, which could be either party's
offer. Not later than 30 business days after the selection of the
certified IDR entity, the certified IDR entity must also notify the
plan or issuer and the provider or facility of the selection of the
offer, and provide the written decision required under 26 CFR 54.9816-
8T(c)(4)(vi), 29 CFR 2590.716-8(c)(4)(vi), and 45 CFR
149.510(c)(4)(vi).
[[Page 55996]]
The Departments are of the view that the best interpretation of
Code section 9816, ERISA section 716, and PHS Act section 2799A-1 is
that when selecting an offer, a certified IDR entity must look first to
the QPA, as it represents a reasonable market-based payment for
relevant items and services, and then to other considerations. This
presumption that the QPA is the appropriate out-of-network rate can be
rebutted by presentation of credible information about additional
circumstances, following the requirements of 26 CFR 54.9816-
8T(c)(4)(iii)(B) through (D), 29 CFR 2590.716-8(c)(4)(iii)(B) through
(D), and 45 CFR 149.510(c)(4)(iii)(B) through (D), that clearly
demonstrate that the QPA is materially different from the appropriate
out-of-network rate. The statutory text lists the QPA as the first
factor that the certified IDR entity must consider in determining which
offer to select. The ``additional circumstances'' that the certified
IDR entity must consider if relevant, credible information is provided
are described in a separate paragraph, and the certified IDR entity's
consideration of additional circumstances is subject to a prohibition
on considering certain factors. Additionally, whereas the statute
provides relatively limited guidance on how to consider or define these
additional circumstances, the statute sets out detailed rules for
calculating the QPA, suggesting that an accurate and clear calculation
of the QPA is integral to the application of consumer cost sharing and
to the certified IDR entity's determination of the out-of-network rate.
For example, the statute includes a requirement that when plans and
issuers do not have sufficient information to calculate their own
median contracted rates, they utilize a database free of conflicts of
interest.\27\ Plans and issuers must also provide specific information
on how the QPA is calculated to nonparticipating providers and
facilities, ensuring that they are aware of how this amount is
calculated.\28\ Plans and issuers are also subject to audit
requirements that will be enforced by the Departments to ensure that
they follow these rules.\29\ Cost sharing for participants,
beneficiaries, and enrollees for items and services will be based on
the recognized amount, which will generally be the QPA for services
eligible for the Federal IDR process, indicating that the QPA is a
reasonable out-of-network rate. The Departments are also required to
report how payment determinations compare to the corresponding QPA,
reflecting that the QPA is a benchmark for determining the appropriate
out-of-network rate.\30\ Taken together, these statutory elements
reflect the importance the No Surprises Act assigns to the QPA in the
Federal IDR process, and show that the statute contemplates that
typically the QPA will be a reasonable out-of-network rate.
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\27\ Code section 9816(a)(2), (3)(E); ERISA section 716(a)(2),
(3)(E), and PHS Act section 2799A-1(a)(2), (3)(E); 26 CFR 54.9816-
6T, 29 CFR 2590.716-6, and 45 CFR 149.140.
\28\ Id.
\29\ 86 FR 36872, 36899 (July 13, 2021).
\30\ Code section 9816(c)(7)(A)(v), (B)(iii) and (iv); ERISA
section 716(c)(7)(A)(v), (B)(iii) and (iv); and PHS Act section
2799A-1(c)(7)(A)(v), (B)(iii) and (iv).
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The Departments are also of the view that policy considerations
support the approach taken under these interim final rules regarding
which offer a certified IDR entity must select. Generally, the QPA
should reflect standard market rates arrived at through typical
contract negotiations and should therefore be a reasonable out-of-
network rate under most circumstances. The QPA is generally based on
the median of contracted rates, and these contracted rates are
established through arms-length negotiations between providers and
facilities and plans and issuers (or their service providers).
Anchoring the determination of the out-of-network rate to the QPA will
increase the predictability of IDR outcomes, which may encourage
parties to reach an agreement outside of the Federal IDR process to
avoid the administrative costs, and will aid in reducing prices that
may have been inflated due to the practice of surprise billing prior to
the No Surprises Act. Finally, anchoring the determination to the QPA
will help limit the indirect impact on participants, beneficiaries, and
enrollees that would occur from higher out-of-network rates if plans
and issuers were to pass higher costs on to individuals in the form of
increases in premiums.
Accordingly, the certified IDR entity must begin with the
presumption that the QPA is the appropriate out-of-network rate for the
qualified IDR item or service under consideration. Therefore, in
determining which offer to select, these interim final rules provide
that the certified IDR entity must select the offer closest to the QPA,
unless credible information presented by the parties rebuts that
presumption and clearly demonstrates the QPA is materially different
from the appropriate out-of-network rate, as discussed earlier in this
section of the preamble.
The Departments clarify that it is not the role of the certified
IDR entity to determine whether the QPA has been calculated by the plan
or issuer correctly, to make determinations of medical necessity, or
review denials of coverage.\31\ Rather, the certified IDR entity is
responsible for considering only the information presented by the
parties to determine whether either party has presented credible
information regarding additional circumstances, following the
requirements set forth in paragraphs 26 CFR 54.9816-8T(c)(4)(iii)(B)
through (D), 29 CFR 2590.716-8(c)(4)(iii)(B) through (D), and 45 CFR
149.510(c)(4)(iii)(B) through (D), demonstrating that the QPA is
materially different from the appropriate out-of-network rate, in order
to rebut the presumption that the QPA is the appropriate out-of-network
rate. For batched items and services, the certified IDR entity may
select different offers, from either or both parties, when the QPAs for
the qualified IDR items or services within the batch are different. The
certified IDR entity may do so even if it does not select the offer
closest to the QPA for a particular qualified IDR item or service due
to the factors listed later in this section of the preamble, and
instead selects the offer closest to the QPA for other qualified IDR
items and services within the batch.
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\31\ However, if either the certified IDR entity or one of the
parties believes the QPA has not been calculated in accordance with
the requirements in 26 CFR 54.9816-6T, 29 CFR 2590.716-6, or 45 CFR
149.140, the Departments encourage the certified IDR entity or the
provider or facility to notify the applicable state or federal
authority, or submit a complaint against the plan or issuer as set
forth in 26 CFR 54.9816-7T, 29 CFR 2590.716-7, or 45 CFR 149.150, as
applicable.
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In the Departments' view, the requirements set forth in these
interim final rules regarding which offer a certified IDR entity must
select, based on the presumption that the QPA is the appropriate
payment amount and on the parties' ability to rebut that presumption,
will help promote efficiency and predictability in the Federal IDR
process, and will increase the likelihood that a certified IDR entity
will generally select the offer closest to the QPA. While the QPA is
the presumptive factor, the Departments are of the view that a clear
standard indicating how a certified IDR entity may select an offer that
is not closest to the QPA is necessary to help ensure consistency in
how different certified IDR entities evaluate offers, which will help
ensure that the Federal IDR process yields predictable outcomes and
reduces administrative costs. Establishing a standard framework for
certified IDR entities to evaluate factors furthers the intent of these
interim final
[[Page 55997]]
rules to create equity and consistency in the Federal IDR process and
aligns with other policies set forth in these interim final rules, such
as the conflict-of-interest standards and the certification standards
for IDR entities. Ensuring that all certified IDR entities apply the
same standards will help ensure that the Federal IDR process is
appropriately predictable, fair, and equitable.
Although these interim final rules establish the QPA as the
presumptive factor, these interim final rules and the underlying
statute also specify additional circumstances that certified IDR
entities must consider in selecting an offer, if a party submits
information about the additional circumstance that the certified IDR
entity determines is credible. These interim final rules also require
that the parties provide certain information to the certified IDR
entity, described previously in this preamble, regarding practice size,
practice specialty or type; information about the plan or issuer's
coverage area; information about the QPA; and, if applicable,
information showing that the Federal IDR process is inapplicable to the
dispute. In addition, the certified IDR entity may request additional
information relating to the parties' offers and must consider credible
information submitted to determine if it demonstrates that the QPA is
materially different from the appropriate out-of-network rate (unless
the information relates to a factor that the certified IDR entity is
prohibited from considering).
Regarding those factors, first, to the extent credible information
is submitted by a party, the certified IDR entity must consider whether
the credible information about the level of training, experience, and
quality and outcome measurements (such as those endorsed by the
consensus-based entity authorized under section 1890 of the Social
Security Act) of the provider or facility that furnished the qualified
IDR item or service clearly demonstrates that the QPA is materially
different from the appropriate out-of-network rate for the qualified
IDR item or service. In order for a certified IDR entity to consider
this additional information submitted by a party, the credible
information must clearly demonstrate that the QPA failed to take into
account that the experience or level of training of a provider was
necessary for providing the qualified IDR item or service to the
patient or that the experience or training made an impact on the care
that was provided. The Departments are of the view that qualified IDR
items or services should not necessitate an out-of-network rate higher
than the offer closest to the QPA, simply based on the level of
experience or training of a provider, as this would lead to an increase
in prices without a valid reason and does not align with the goals of
the No Surprises Act. For instance, the out-of-network payment amount
for the simple repair of a superficial wound (CPT codes 12001-12007) in
most cases would not necessitate a rate higher than the QPA just
because a provider has 30 years of experience versus 10 years of
experience. Alternatively, if the plan's or issuer's contracted rates
included risk-sharing, bonus, penalty, or other incentive-based or
retrospective payments that were excluded for purposes of calculating
the QPA for the items and services as required by the July 2021 interim
final rules, a party may provide evidence as to why the provider's or
facility's quality or outcome measures support an out-of-network rate
that is different from the QPA and the certified IDR entity should
consider whether this requires selecting an out-of-network rate that is
higher (in the case of a bonus) or lower (in the case of a penalty)
than the offer closest to the QPA.
Second, to the extent credible information is submitted by a party,
the certified IDR entity must consider whether the credible information
about the market share held by the nonparticipating provider or
facility or the plan (including, for self-insured plans, the market
share of their third-party administrator (TPA) in instances where the
self-insured plan relies on the TPA's networks) or issuer in the
geographic region in which the qualified IDR item or service was
provided, clearly demonstrates that the QPA is materially different
from the appropriate out-of-network rate for the qualified IDR item or
service. Research suggests that the market dominance of a provider or
facility, or that of a plan or issuer, can drive reimbursement rates up
or down in a given region.\32\ For instance, a plan or issuer having
the majority of the market share in a geographic region may signal a
QPA that is unreasonably low, as plans and issuers with a large market
share may drive down rates,\33\ in which case an out-of-network rate
higher than the offer closest to the QPA may be appropriate.
Alternatively, a provider having the majority of the market share in a
geographic region may signal a QPA that is unreasonably high, as
providers with a large market share may drive up rates, in which case
an out-of-network rate lower than the offer closest to the QPA may be
appropriate.
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\32\ Schwartz, K., Lopez, E., Rae, M., Neuman, T. What We Know
About Provider Consolidation. Kaiser Family Foundation. September
2020. https://www.kff.org/health-costs/issue-brief/what-we-know-about-provider-consolidation/.
\33\ See Richard M. Scheffler and Daniel R. Arnold. ``Insurer
Market Power Lowers Prices in Numerous Concentrated Provider
Markets.'' Health Affairs. 2017 36:9, 1539-1546; Glenn Melnick, Yu-
Chu Shen and Vivian Wu. ``The Increased Concentration Of Health Plan
Markets Can Benefit Consumers Through Lower Hospital Prices.''
Health Affairs 30, no. 9.
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Third, to the extent credible information is submitted by a party,
the certified IDR entity must consider whether the credible information
about patient acuity or the complexity of furnishing the qualified IDR
item or service to the participant, beneficiary, or enrollee clearly
demonstrates that the QPA is materially different from the appropriate
out-of-network rate for the qualified IDR item or service. In many
cases, because the plan or issuer is required to calculate the QPA
using median contracted rates for service codes, as well as modifiers,
if applicable, and because service codes and modifiers reflect patient
acuity and the complexity of the service provided,\34\ these factors
will already be reflected in the QPA. Therefore, the Departments
anticipate that there would only be rare instances in which the QPA
would not adequately account for the acuity of the patient or
complexity of the service. For example, if the complexity of a case is
an outlier such that the time or intensity of care exceeds what is
typical for a service code, the certified IDR entity may conclude that
the QPA does not adequately take the factor into account. Similarly,
the QPA for a qualified IDR item or service may be considered too high
for items or services that become less complex or are furnished more
frequently over time, such as items for which the QPA reflects
reimbursement for a product with a patent that expires after 2019, in
instances where the QPA is based off the median of the contracted rates
from 2019. A certified IDR entity may also conclude that the QPA does
not adequately account for patient acuity, or the complexity of
furnishing the qualified IDR item or service in instances where the
parties disagree on what service code or modifier accurately describes
the qualified IDR item or service. For instance, the Departments are
aware that some plans and issuers review claims and alter the service
code or modifier submitted by the provider or facility to another
service code or modifier that the plan or issuer determines to be more
appropriate (a practice commonly referred to as ``downcoding'' when the
adjustment
[[Page 55998]]
results in lower reimbursement).\35\ If a plan or issuer has altered
the service code or modifier(s) for a submitted claim and applies a QPA
that uses a different service code or modifier(s) than the service code
or modifier(s) submitted by the provider or facility, the provider or
facility could submit credible information to the certified IDR entity
demonstrating that the QPA applied by the plan or issuer to the claim
is based on a service code or modifier that did not properly encompass
patient acuity, the complexity of furnishing the qualified IDR item or
service. If the certified IDR entity agrees that either of the parties
have presented credible information that clearly demonstrates that the
QPA is materially different from the appropriate out-of-network rate,
and adequately takes into account the considerations allowed under 26
CFR 54.9816-8T(c)(4)(iii)(B) through (D), 29 CFR 2590.716-
8(c)(4)(iii)(B) through (D), and 45 CFR 149.510(c)(4)(iii)(B) through
(D), then it could select either offer, but must select the offer that
the certified IDR entity determines best represents the value of the
qualified IDR item or service.\36\
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\34\ https://www.medicalbillingandcoding.org/cpt-modifiers/.
\35\ The Departments clarify that the July 2021 interim final
rules do not require the plan or issuer to calculate the
participant's, beneficiary's, or enrollee's cost sharing using a QPA
for the service code submitted by the provider or facility. The plan
or issuer could instead calculate the participant's, beneficiary's,
or enrollee's cost sharing using a QPA for the service code that the
plan or issuer determined was more appropriate. However, the QPA
methodology under 26 CFR 54.9816-6T, 29 CFR 2590.716-6, and 45 CFR
149.140 requires plans and issuers to calculate the median
contracted rate for an item or service using contracted rates for
the same or similar item or service. A plan or issuer would be
considered out of compliance with these requirements if the plan or
issuer calculated a QPA using a service code that does not
reasonably reflect the furnished item or service.
\36\ The Departments note that in instances in which the
certified IDR entity selects an offer based on a determination that
a service code other than the one upon which the QPA was based more
accurately describes the qualified IDR item or service, neither the
plan or issuer nor provider or facility is permitted to adjust the
participant's, beneficiary's, or enrollee's cost-sharing amount. The
cost-sharing amount remains the same as originally calculated in
accordance with 26 CFR 54.9816-4T(b)(3)(ii) and (iii), 29 CFR
2590.716-4(b)(3)(ii) and (iii), and 45 CFR 149.110(b)(3)(ii) and
(iii); 26 CFR 54.9816-5T(c)(1) and (2), 29 CFR 2590.717-1(c)(1) and
(2), and 45 CFR 149.120(c)(1) and (2); or 26 CFR 54.9817-1T(b)(1)
and (2), 29 CFR 2590.717-1(b)(1) and (2), and 45 CFR 149.130(b)(1)
and (2).
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Fourth, to the extent credible information is submitted by a party,
the certified IDR entity must also consider whether the credible
information about the teaching status, case mix, and scope of services
of the nonparticipating facility, clearly demonstrates that the QPA is
materially different from the appropriate out-of-network rate for the
qualified IDR item or service. Similar to the other factors, it is the
view of the Departments that the QPA, which is intended to reflect the
market-driven rate, should be considered the prevailing rate unless a
party provides credible information that the characteristic of the
teaching status, case mix, or scope of services of the nonparticipating
facility was in some way critical to the delivery of the qualified IDR
item or service, and not adequately accounted for in the QPA, thereby
rebutting the presumption that the QPA is the appropriate out-of-
network rate. For example, a certified IDR entity could consider the
trauma level of a hospital when the dispute involves trauma care or
qualified IDR items or services that could not be performed at a lower-
level hospital, but only to the extent the QPA does not otherwise
reflect this factor. The Departments seek comment on whether additional
requirements should be considered to address any potentially abusive
scenarios, including scenarios in which parties could potentially
distort information that informs the enumerated considerations, such as
overestimating the teaching experience of providers at the facility or
upcoding the costs for items or services, and seek comment on the
potential for gaming of the Federal IDR process.
Fifth, to the extent credible information is submitted by a party,
the certified IDR entity must also consider whether the credible
information about any demonstrations of good faith efforts (or lack
thereof) made by the nonparticipating provider, nonparticipating
facility, or nonparticipating provider of air ambulance services or the
plan or issuer, as applicable, to enter into network agreements and, if
applicable, contracted rates between the provider or facility and the
plan or issuer, as applicable during the previous 4 plan years, clearly
demonstrates that the QPA is materially different from the appropriate
out-of-network rate for the qualified IDR item or service. For example,
a certified IDR entity must consider what the contracted rate might
have been had the good faith negotiations resulted in the
nonparticipating provider, facility, or provider of air ambulance
services being in-network, if a party is able to provide related
credible information of good faith efforts or the lack thereof.
Beyond these enumerated factors, the certified IDR entity must also
generally consider additional information submitted by a party,
provided the information is credible and relates to the offer submitted
by either party. The certified IDR entity is not permitted to consider
that information if it includes information on factors described in 26
CFR 54.9816-8T(c)(4)(v), 29 CFR 2590.716-8(c)(4)(v), and 45 CFR
149.510(c)(4)(v). This prohibition is discussed further in the next
section of this preamble.
The Departments intend to provide additional guidance to certified
IDR entities as necessary to clarify how the allowable factors should
be considered and seek comment on this approach, including the
appropriateness and scope of the factors previously discussed.
iii. Selection of Offer for Qualified IDR Services That Are Air
Ambulance Services
The process for a certified IDR entity to select an offer in a
dispute related to qualified IDR services that are air ambulance
services is essentially the same as the process applicable to disputes
related to qualified IDR items or services that are not air ambulance
services. As with disputes related to qualified IDR items or services
that are not air ambulance services, in determining which offer to
select, these interim final rules provide that the certified IDR entity
must consider the QPA for the applicable year for the qualified IDR
services that are air ambulance services. However, Code section
9817(b)(5)(C), ERISA section 717(b)(5)(C), PHS Act section 2799A-
2(b)(5)(C), and these interim final rules specify additional
circumstances, in addition to the QPA, that the certified IDR entity
must also consider in making the determination for air ambulance
services, to the extent the parties provide credible information on
such criteria. As with qualified IDR items or services, the certified
IDR entity should only consider this information to the extent the
certified IDR entity determines that either party submitted credible
information that clearly demonstrates that the QPA is materially
different from the appropriate out-of-network rate. If a party presents
credible information clearly demonstrating that the QPA is materially
different from the appropriate out-of-network rate, the certified IDR
entity must consider the additional circumstances.
To the extent credible information is submitted by a party, the
certified IDR entity must consider whether credible information about
the quality and outcomes measurements of the provider of air ambulance
services that furnished the services clearly demonstrates that the QPA
is materially different from the appropriate out-of-network rate.
Additionally, to the extent credible
[[Page 55999]]
information is submitted by a party, the certified IDR entity must
consider whether credible information about the acuity of the condition
of the participant, beneficiary, or enrollee receiving the services, or
the complexity of providing the services to the participant,
beneficiary, or enrollee, clearly demonstrates that the QPA is
materially different from the appropriate out-of-network rate. Further,
to the extent credible information is submitted by a party, the
certified IDR entity must consider credible information submitted by a
party about whether the level of training, experience, and quality of
medical personnel that furnished the air ambulance services clearly
demonstrates that the QPA is materially different from the appropriate
out-of-network rate for the air ambulance services. To the extent a
party submits any such credible information, the certified IDR entity
must also consider whether credible information about the ambulance
vehicle type, including the clinical capability level of the vehicle,
clearly demonstrates that the QPA is materially different from the
appropriate out-of-network rate for the air ambulance services. In
considering the ambulance vehicle type, the certified IDR entity may
not consider whether the air ambulance is fixed wing or rotary wing,
because the QPA will reflect this difference, as different service
codes are used to bill for air ambulance services depending on whether
fixed wing or rotary wing vehicles are used. Instead, the certified IDR
entity should consider air ambulance vehicle type only to the extent
that it is not already taken into account by the QPA.
To the extent a party submits any such credible information, the
certified IDR entity must also consider whether credible information
about the population density of the point of pick-up (as defined in 42
CFR 414.605) for the air ambulance (such as urban, suburban, rural, or
frontier \37\), clearly demonstrates that the QPA is materially
different from the appropriate out-of-network rate for a particular air
ambulance service. Under the July 2021 interim final rules, the QPA is
calculated by reference to the geographic region, which for air
ambulance services distinguishes between one region containing all
metropolitan statistical areas (as described by the U.S. Office of
Management and Budget (OMB) and published by the U.S. Census Bureau) in
a state and one region consisting of all other portions of the state,
determined based on the point of pick-up (as defined in 42 CFR
414.605). If these geographic regions do not provide sufficient
information, the QPA is calculated in reference to Census divisions,
with one region consisting of all metropolitan statistical areas in
each Census division, and one region consisting of all other portions
of the Census division, determined at the point of pick-up. Therefore,
the QPA for these geographic regions may already reflect the population
density of the pick-up location. Nevertheless, in certain
circumstances, the QPA for air ambulance services may not adequately
capture the population density, due to additional distinctions, such as
between metropolitan areas within a state, or between rural and
frontier areas. To the extent that there is credible information about
additional circumstances clearly demonstrating that the QPA is
materially different from the appropriate out-of-network rate for a
particular air ambulance service, the certified IDR entity must
consider these distinctions.
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\37\ For these purposes, the term ``frontier'' should be
understood as including those ZIP codes where the point of pick-up
is in a rural area determined to be in the lowest 25 percent of
rural population arrayed by population density (also known as super
rural ZIP codes for purposes of determining ground ambulance base
rates). See 42 CFR 414.610(c)(5)(ii) and 42 CFR 414.626(c)(1)(ii).
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Finally, to the extent credible information is submitted by a
party, the certified IDR entity must consider whether credible
information about demonstrations of good faith efforts (or lack
thereof) made by the nonparticipating provider of air ambulance
services or the plan or issuer to enter into network agreements, as
well as contracted rates between the provider and the plan or issuer,
as applicable, during the previous 4 plan years, clearly demonstrate
that the QPA is materially different from the appropriate out-of-
network rate for such air ambulance services.
As with qualified IDR items or services that are not air ambulance
services, the certified IDR entity must begin with the presumption that
the amount closest to the QPA is the appropriate out-of-network rate
for the air ambulance service under consideration and select the offer
closest to the QPA, unless credible information submitted by the
parties clearly demonstrates that the QPA is materially different from
the appropriate out-of-network rate, or unless the offers are equally
distant from the QPA but in opposing directions. In those cases, the
certified IDR entity must select the offer that the certified IDR
entity determines best represents the value of the qualified IDR items
or services, which could be either party's offer.
iv. Prohibition on Consideration of Certain Factors
Code section 9816(c)(5)(D), ERISA section 716(c)(5)(D), PHS Act
section 2799A-1(c)(5)(D), and these interim final rules provide that
the certified IDR entity may not consider certain factors in
determining which offer is the out-of-network rate. First, the
certified IDR entity may not consider usual and customary charges. This
term, also known as usual, customary and reasonable charges, refers to
the amount providers in a geographic area usually charge for the same
or similar medical service.\38\ This provision also prohibits
consideration of payment or reimbursement rates expressed as a
proportion of usual and customary charges. Second, certified IDR
entities cannot consider the amount that would have been billed to
either a plan or issuer, or a participant, beneficiary, or enrollee by
a provider, facility, or provider of air ambulance services if the
provider, facility, or provider of air ambulance services were not
subject to a prohibition on balance billing. The Departments recognize
that 45 CFR 149.410, 149.420, and 149.440 prohibit providers,
facilities, and providers of air ambulance services from billing
participants, beneficiaries, or enrollees for the full charge for items
and services to which these provisions apply, but do not limit the
amount that may be billed to the plan or issuer. However, the
Departments are of the view that the intent of Code section
9816(c)(5)(D), ERISA section 716(c)(5)(D), and PHS Act section 2799A-
1(c)(5)(D) is to prohibit the certified IDR entity from considering the
billed charge for a qualified IDR item or service. Therefore, the
Departments interpret this prohibition to include consideration of
billed charges to the plan or issuer for the qualified IDR item or
service. Finally, certified IDR entities must not consider payment or
reimbursement rates payable by a public payor, in whole or in part, for
items and services furnished by the providers, facilities, or providers
of air ambulance services. This prohibition includes payments or
reimbursement rates under the Medicare program under title XVIII of the
Social Security Act, the Medicaid program under title XIX of the Social
Security Act, the Children's Health Insurance Program under title XXI
of the Social
[[Page 56000]]
Security Act, and the TRICARE program under chapter 55 of title 10,
United States Code, chapter 17 of title 38, United States Code. This
prohibition also applies to payment rates for demonstration projects
under section 1115 of the Social Security Act, as these are payment or
reimbursement rates payable by a public payor. This provision prohibits
consideration of payment or reimbursement rates expressed as a
proportion of rates payable by public payors. Thus, the certified IDR
entity must not consider, for example, which offer is closest to 150
percent of the Medicare reimbursement rate for a certain item or
service.\39\ The Departments solicit comment regarding whether any
additional guidance or clarification is needed on these prohibited
factors.
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\38\ See Uniform Glossary of Coverage and Medical Terms,
available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/sbc-uniform-glossary-of-coverage-and-medical-terms-new.pdf and https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/Uniform-Glossary-01-2020.pdf.
\39\ The Departments recognize that contracted rates are
frequently based off a percentage of the Medicare payment rate. The
Departments clarify that even in instances where the QPA is
calculated using contracted rates that are expressed as a proportion
of rates payable by a public payor (or other prohibited
considerations), the certified IDR entity is required to consider
the QPA. In the Departments' view, this does not constitute
consideration of the payment or reimbursement rate payable by a
public payor.
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v. Written Decision
Once the certified IDR entity has made a determination, the
certified IDR entity must provide the underlying rationale for its
determination in a written decision submitted to the parties and the
Departments. The certified IDR entity must submit the decision and the
underlying rationale through the Federal IDR portal in a form and
manner specified by the Departments in guidance. This rationale will
inform the reports required from the Departments under Code section
9816(c)(7), ERISA section 716(c)(7), and PHS Act section 2799A-1(c)(7),
and will assist in ensuring that the certified IDR entities comply with
the requirements of this process, including the requirements of 26 CFR
54.9816-8T(c)(4)(iii), 29 CFR 2590.716-8(c)(4)(iii), and 45 CFR
149.510(c)(4)(iii). If a certified IDR entity does not choose the offer
closest to the QPA, the written decision's rationale must include a
detailed explanation of the additional considerations relied upon,
whether the information about those considerations submitted by the
parties was credible, and the basis upon which the certified IDR entity
determined that the credible information demonstrated that the QPA is
materially different from the appropriate out-of-network rate.
v. Effect of Determination
Code section 9816(c)(5)(E), ERISA section 716(c)(5)(E), PHS Act
section 2799A-1(c)(5)(E), and these interim final rules provide that a
determination made by a certified IDR entity is binding upon all
parties involved, in the absence of fraud or evidence of intentional
misrepresentation of material facts to the certified IDR entity by any
party regarding the claim. A certified IDR entity's determination is
not subject to judicial review, except as set forth in 9 U.S.C.
10(a)(1)-(4).\40\
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\40\ Subparagraphs (1) through (4) of 9 U.S.C. 10(a) provide
that courts may vacate an arbitration: where the award was procured
by corruption, fraud, or undue means; where there was evident
partiality or corruption in the arbitrators; where the arbitrators
were guilty of misconduct in refusing to postpone the hearing, in
refusing to hear evidence pertinent and material to the controversy;
or of any other misbehavior prejudicing the rights of the parties;
or where the arbitrators exceeded their powers, or so imperfectly
executed them that a mutual, final, and definite award was not made.
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Under Code section 9816(c)(5)(E)(ii), ERISA section
716(c)(5)(E)(ii), PHS Act section 2799A-1(c)(5)(E)(ii), and these
interim final rules, when a certified IDR entity makes a determination,
the party that submitted the initial Notice of IDR Initiation may not
submit a subsequent Notice of IDR Initiation involving the same other
party with respect to a claim that is the same as or similar to a
qualified IDR item or service that was the subject of the initial
determination during the 90-calendar-day period following the initial
determination. The Departments interpret the 90-day period in the
statute to refer to 90 calendar days. The Departments are of the view
that this interpretation balances the statutory intent to provide for a
``cooling-off'' period between disputes that relate to the same or
similar items or services while ensuring that the initiating party is
able to resolve outstanding payment disputes through the Federal IDR
process as soon as permitted under the statute. The Departments
interpret the statutory phrase of ``such item or service'' in this
context to refer to the same or similar item or service, in order to
maintain consistency with the statutory provisions related to the QPA
and the provisions allowing batching of items and services.
Additionally, such an interpretation clarifies the meaning of the
statutory provisions at Code section 9816(c)(5)(E)(iii), ERISA section
716(c)(5)(E)(iii), and PHS Act section 2799A-1(c)(5)(E)(iii), which
allow subsequent submission of such an item or service only if the open
negotiation period ended during such a 90-day period (as the open
negotiation period for the particular item or service under dispute
would have already ended). For claims for the same or similar item or
service for which the end of the open negotiation period occurs during
the 90-calendar-day suspension period, after the end of the 90-
calendar-day suspension period, either party may initiate the Federal
IDR process for the items and services affected by the suspension. For
these items or services, the initiating party must submit the Notice of
IDR Initiation within 30 business days following the end of the 90-
calendar-day suspension period, as opposed to the standard 4-business-
day period following the end of the open negotiation period. The 30-
business-day period begins on the day after the last day of the 90-
calendar-day period.
The plan or issuer must make any additional payment, if applicable,
of the amount of the offer selected by the certified IDR entity
directly to the provider, facility, or provider of air ambulance
services not later than 30 calendar days after the determination by the
certified IDR entity. This amount will be the offer selected, reduced
by the sum of any initial payment the plan or issuer has paid to the
provider, facility, or provider of air ambulance services and any cost
sharing paid or owed by the participant, beneficiary, or enrollee to
the provider, facility, or provider of air ambulance services. If the
offer selected by the certified IDR entity is less than the sum of the
initial payment and any cost sharing paid by the participant,
beneficiary, or enrollee, the provider, facility, or provider of air
ambulance services will be liable to the plan or issuer for the
difference. This difference must be paid directly to the plan or issuer
not later than 30 calendar days after the determination by the
certified IDR entity. The Departments note that this determination of
the out-of-network rate does not change the participant's,
beneficiary's, or enrollee's cost sharing, which is based on the
recognized amount. The cost-sharing amount remains the same as
originally calculated in accordance with 26 CFR 54.9816-4T(b)(3)(ii)
and (iii), 29 CFR 2590.716-4(b)(3)(ii) and (iii), and 45 CFR
149.110(b)(3)(ii) and (iii); 26 CFR 54.9816-5T(c)(1) and (2), 29 CFR
2590.716-5(c)(1) and (2), and 45 CFR 149.120(c)(1) and (2); or 26 CFR
54.9817-1T(b)(1) and (2), 29 CFR 2590.717-1(b)(1) and (2), and 45 CFR
149.130(b)(1) and (2).
vi. Recordkeeping Requirement
These interim final rules require that the certified IDR entity
must maintain records of relevant documentation associated with any
Federal IDR process determination for 6 years. The 6-year
[[Page 56001]]
recordkeeping requirement is similar to other recordkeeping
requirements under the Code, ERISA, and the PHS Act. For example,
independent review organizations involved in the Federal external
review process under 26 CFR 54.9815-2719, 29 CFR 2590.715-2719, and 45
CFR 147.136 must retain records for 6 years. This recordkeeping
requirement will help ensure that state and Federal oversight agencies
are able to audit past determinations of certified IDR entities and
that parties are able to obtain records of the determinations.
Certified IDR entities must make these records available for
examination by all parties to the dispute, except when disclosure would
violate state or Federal privacy laws and regulations, as well as to
state or Federal oversight agencies upon request for oversight
purposes.
vii. Costs of the Federal IDR Process and Payment
At the time that a certified IDR entity is selected by both of the
parties or by the Departments, each party to a determination must pay
to the certified IDR entity the administrative fee due to the
Departments for participating in the Federal IDR process. At the time
of submission of the offer by each party to a determination, the
certified IDR entity fee must be paid to the certified IDR entity. Each
party will be able to view the certified IDR entity fees and
administrative fees in the Federal IDR portal when engaging in the
certified IDR entity selection process. As discussed later in this
preamble, certified IDR entities must set the certified IDR entity fee
within a pre-determined range (or as otherwise approved by the
Departments) specified by the Departments through guidance. The
Departments anticipate issuing this guidance annually. For a discussion
of the considerations the Departments will review when setting the
certified IDR entity fee range, see section III.D.5 of this preamble.
These interim final rules require each party to pay the entire
certified IDR entity fee at the time the parties provide their offer
under 26 CFR 54.9816-8T(c)(4)(i), 29 CFR 2590.716-8(c)(4)(i), and 45
CFR 149.510(c)(4)(i). Certified IDR entities are required to hold these
funds in a trust or escrow account until the certified IDR entity makes
a determination of the out-of-network rate, or in instances in which
the parties agree on an out-of-network rate, until the Departments
notify the certified IDR entity that it may remit the funds as
specified in these interim final rules. The certified IDR entity may
(but is not required to) accrue interest on the funds. The certified
IDR entity is not required to remit any accrued interest to any other
party. Within 30 business days of making the determination, the
certified IDR entity must refund to the prevailing party the amount the
party submitted for the certified IDR entity fee. The certified IDR
entity will retain the certified IDR entity fee submitted by the non-
prevailing party, as the non-prevailing party is required to pay the
certified IDR entity fee. In the case of batched determinations, the
certified IDR entity may make different payment determinations for each
qualified IDR item or service under dispute. In these cases, the party
with fewest determinations in its favor is considered the non-
prevailing party and is responsible for paying the certified IDR entity
fee. In the event that each party prevails in an equal number of
determinations, the certified IDR entity fee will be split evenly
between the parties. The Departments are of the view that this approach
reduces the administrative burden of fee collections and ensures
payment of certified IDR entities. This approach also eliminates any
concerns that certified IDR entities will make determinations based on
which party is more likely to pay the certified IDR entity fee. The
Departments may issue additional guidance if abusive situations or
other issues related to the payment of the administrative fee or the
certified IDR entity fee arise. The Departments also solicit comment on
whether additional requirements, including procedures to offset against
or make adjustments to amounts owed under a payment determination, are
necessary to ensure payment or collection of the administrative fee and
the certified IDR entity fee.
If the parties negotiate an out-of-network rate before the
certified IDR entity makes a determination, the certified IDR entity is
required to return half of each party's payment for the certified IDR
entity fee, unless directed otherwise by both parties to distribute the
total amount of that refund in different shares.
Under Code section 9816(c)(8), ERISA section 716(c)(8), PHS Act
section 2799A-1(c)(8), and these interim final rules, each party to a
determination must pay an administrative fee for participating in the
Federal IDR process. The statute further indicates that the
administrative fee must be paid to the Departments at the time and in
the manner specified by the Departments. These interim final rules
require each party to pay the administrative fee to the certified IDR
entity at the time the certified IDR entity is selected, regardless of
whether that certified IDR entity was selected by the parties or by the
Departments. Having the certified IDR entity collect both the
administrative fee and the certified IDR entity fee will help ensure
efficiency by streamlining the process and will facilitate
administrative convenience for the parties and the Departments. These
interim final rules also specify that the administrative fee is non-
refundable, even in instances where the parties negotiate an out-of-
network rate before the certified IDR entity makes a determination or
where the certified IDR entity determines that the case does not
qualify for the Federal IDR process. Code section 9816(c)(8)(B), ERISA
section 716(c)(8)(B), and PHS Act section 2799A-1(c)(8)(B) specify that
the administrative fee is established such that the total amount of
fees is approximately equal to the amount of expenditures estimated by
the Departments in carrying out the Federal IDR process. Because the
Departments expect that a large part of the expenditures in carrying
out the Federal IDR process will come from the initiation of the
Federal IDR process, the Departments will have incurred expenditures in
instances in which the parties reach an agreement before the certified
IDR entity makes a determination or in which the certified IDR entity
determines that the case does not qualify for the Federal IDR process,
and thus, it is appropriate that the parties should still be expected
to pay the fee.
As explained in the following section on certification, the
certified IDR entity must remit the administrative fee to the
Departments at the time and in the manner specified in guidance. The
administrative fee amount will be established in guidance published by
the Departments in a manner so that the total administrative fees
collected by the certified IDR entities and remitted to the Departments
during a calendar year are approximately equal to the estimated amount
of expenditures by the Departments for that calendar year in carrying
out the Federal IDR process. In setting the administrative fee, the
Departments will consider the estimated costs for the Departments to
administer the Federal IDR process for the following calendar year,
including the staffing and contracting costs related to certifying and
providing oversight to certified IDR entities; the costs of developing
and publishing reports as required under Code sections 9816 and 9817,
ERISA sections 716 and 717, and PHS Act sections 2799A-1 and 2799A-2;
the costs of collecting the administrative fees from certified IDR
[[Page 56002]]
entities; and the cost of maintaining the Federal IDR portal. In future
years, such projected costs will be informed by the actual costs
incurred by the Departments to date to administer the Federal IDR
process. The Departments expect that certain resources related to the
Federal IDR process will also be used for the patient-provider dispute
resolution process, such as the Federal IDR portal, certain staffing,
and contracts. In setting the administrative fee, the Departments will
consider the expected volume for the Federal IDR process and the
patient-provider dispute resolution process and apportion the IDR
administrative fee such that it reflects the appropriate usage of the
Federal IDR process by providers, facilities, providers of air
ambulance services, plans, and issuers.
5. Certification of IDR Entities
Under Code section 9816(c)(4), ERISA section 716(c)(4), and PHS Act
section 2799A-1(c)(4), an IDR entity must meet certain standards and be
certified by the Departments to be selected for the Federal IDR
process. Consistent with these provisions, these interim final rules
provide that an IDR entity must provide through the Federal IDR portal
written documentation to the Departments that demonstrates the entity
satisfies certain standards and procedures outlined in these interim
final rules and set forth in guidance issued by the Departments.
Specifically, the Departments will indicate through guidance the types
of documentation that should be submitted for each certification
standard, in what manner they should be submitted, and how the
documentation will be reviewed for certification. An IDR entity that
satisfies the standards in the interim final rules and guidance issued
by the Departments will be provided a certified IDR entity number and
will be certified for a 5-year period, subject to the petition and
revocation process, discussed later in this preamble.\41\ Once
certified, the certified IDR entity must continue to satisfy these
requirements.
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\41\ As discussed in the section on Economic Impact and
Paperwork Burden, the Departments estimate there will be 50 IDR
entities that will seek certification by the Departments.
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IDR entities will be expected, as part of their application for
certification, to submit general information about their organization,
including contact information, Taxpayer Identification Number (TIN),
and website information, as well as the service area in which the IDR
entity intends to conduct payment determinations under the Federal IDR
process. IDR entities may choose to apply to operate in all states or
self-limit to a particular subset of states. Further, anyone submitting
the application for certification must have the legal and financial
authority to bind the IDR entity. An IDR entity that the Departments
certify must enter into an agreement with the Departments. That
agreement will include specified provisions encompassed by these
interim final rules, including, but not limited to, the requirements
applicable to certified IDR entities when making payment determinations
as well as the requirements regarding certification and revocation
(such as specifications for wind down activities and reallocation of
certified IDR entity fees, where warranted).
In order to be certified, an IDR entity must possess (directly or
through contracts or other arrangements) and demonstrate sufficient
arbitration and claims administration of health care services, managed
care, billing, coding, medical, and legal expertise. With regard to
medical expertise, where the payment determination depends on the
patient acuity or the complexity of furnishing the qualified IDR item
or service, or the level of training, experience, and quality and
outcome measurements of the provider or facility that furnished the
qualified IDR item or service, the IDR entity should have available
medical expertise with the appropriate training and experience in the
field of medicine involved in the qualified IDR item or service.
Additionally, the IDR entity must employ (directly or through contracts
or other arrangements) sufficient personnel to make determinations
within the 30 business days allowed for such determinations. To satisfy
this standard, the written documentation the IDR entity submits must
include a description of its organizational structure and capabilities,
including an organizational chart and the credentials,
responsibilities, and number of personnel employed to make
determinations. The Departments considered requiring IDR entities to
have personnel (either hired directly or through a contract) with air
space law knowledge for making determinations related to air ambulance
cases, but are concerned that such a requirement may limit the number
of eligible entities and increase the likelihood of conflicts of
interests in air ambulance cases. The Departments seek comment on
whether IDR entities should be required to have air space law knowledge
for IDR entity certification to make determinations for air ambulance
cases.
Next, an IDR entity must also maintain a current accreditation from
a nationally recognized and relevant accreditation organization, such
as URAC, or ensure that its personnel otherwise possess the requisite
training to conduct payment determinations (for example, providing
documentation that personnel employed by the IDR entity have completed
arbitration training by the AAA, the AHLA, or a similar organization).
This requirement will ensure the IDR entity has the operational ability
to perform its primary functions as set forth in the No Surprises Act
and these interim final rules. States have imposed similar requirements
on independent review organizations for external review processes under
PHS Act section 2719 (which is incorporated by reference into Code
section 9815 and ERISA section 715), or for their state IDR processes.
Similar to independent review organizations, certified IDR entity
personnel should have the skills and training necessary to conduct
unbiased and impartial determinations between plans or issuers and
providers, facilities, or providers of air ambulance services, and
similar billing, coding, and medical expertise. The Departments expect
that many of the organizations with current experience in arbitration
or dispute resolution will already have such accreditation and will
employ personnel with relevant experience. The Departments seek comment
on whether any additional accreditation or training standards would
meet this requirement, including whether additional flexibility is
needed to help encourage innovation in the provision of IDR services
and new entrants as IDR entities that may be certified for the Federal
IDR process.
Additionally, as a condition of certification, the IDR entity must
have a process to ensure that no conflicts of interest exist between
the parties and the personnel the certified IDR entity assigns to each
dispute, and to screen for any material relationships between the
parties and the personnel assigned to each dispute. This process will
allow certified IDR entities to comply with the requirements of 26 CFR
54.9816-8T(c)(1)(ii), 29 CFR 2590.716-8(c)(1)(ii), and 45 CFR
149.510(c)(1)(ii).
While conducting the Federal IDR process, a certified IDR entity
will be entrusted with IIHI. Code section 9816(c)(4)(A)(v), ERISA
section 716(c)(4)(A)(v), and PHS Act section 2799A-1(c)(4)(A)(v)
require a certified IDR entity to maintain the confidentiality of IIHI
obtained in the course of conducting payment determinations. This IIHI
is often protected under Federal and state law, but certain laws, such
as the privacy and security regulations promulgated
[[Page 56003]]
under HIPAA, as amended, may not apply to IIHI when it is held by a
certified IDR entity.
Therefore, these interim final rules specify that a certified IDR
entity must provide written documentation to the Departments that
demonstrates that the certified IDR entity satisfies, among other
things, the confidentiality standards set forth in 26 CFR 54.9816-
8T(e)(2)(v), 29 CFR 2590.716-8(e)(2)(v), and 45 CFR 149.510(e)(2)(v).
These provisions include standards for certified IDR entities to
maintain the confidentiality of IIHI obtained in the course of
conducting the Federal IDR process. Because IIHI is sensitive, private
information about consumers and their health, including information
that is identifiable to a particular individual, IIHI warrants strong
protection by the parties that will be handling this information.
Therefore, the Departments are of the view that certified IDR entities
must have procedures in place to protect consumers from improper
storage, use, handling, or transmission of this information. The
confidentiality standards in these interim final rules are informed by
the privacy, security, and breach notification regulations issued under
HIPAA and the HITECH Act, because the Departments are of the view that
these provisions are industry standards.\42\ Drawing from those
standards for these interim final rules promotes continuity in the way
consumer information is protected and secured throughout systems
involved in health care. The Departments have drawn mainly from
relevant HIPAA standards because these are the predominant federal
standards that apply to identifiable consumer health information, when
possessed by some of the parties to the Federal IDR process. Therefore
the Departments are of the view that these standards are the most
appropriate privacy standards for certified IDR entities. The
Departments have tailored these requirements to the particular
functions of certified IDR entities to ensure that they have clear,
workable, and appropriate standards to implement.
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\42\ 45 CFR part 160 subpart A and subparts A, C, D, and E of
part 164.
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These interim final rules set forth the confidentiality
requirements applicable to certified IDR entities and include
provisions regarding privacy, security, and breach notification. The
Departments begin by discussing the general privacy requirement in 26
CFR 54.9816-8T(e)(2)(v)(A), 29 CFR 2590.716-8(e)(2)(v)(A), and 45 CFR
149.510(e)(2)(v)(A) that specify that a certified IDR entity may
create, collect, handle, disclose, transmit, access, maintain, store,
and/or use IIHI only to perform two categories of activities, described
in 26 CFR 54.9816-8T(e)(2)(v)(A)(1) through (2), 29 CFR 2590.716-
8(e)(2)(v)(A)(1) through (2), and 45 CFR 149.510(e)(2)(v)(A)(1) through
(2): (1) To perform the certified IDR entity's required duties under
these sections of the interim final rules; and (2) to perform functions
related to carrying out additional obligations as may be required under
applicable Federal or state laws or regulations.
Additionally, certified IDR entities are required to maintain the
security of the IIHI they obtain by ensuring the confidentiality of all
IIHI they create, obtain, maintain, store, and transmit; protecting
against any reasonably anticipated threats or hazards to the security
of this information; protecting against any reasonably anticipated
unauthorized uses or disclosures of this information; and by ensuring
compliance by any of their personnel, including their contractors and
subcontractors (as applicable), assigned to a payment determination. To
satisfy this requirement, certified IDR entities are required to have
policies and procedures in place to properly use and disclose IIHI,
identify when IIHI should be destroyed or disposed of, properly store
and maintain confidentiality of IIHI that is accessed or stored
electronically, and identify the steps the certified IDR entities will
take in the event of a breach regarding IIHI. The Departments based
these requirements on the similar rule applicable to HIPAA covered
entities under 45 CFR 164.306(a)(1), but because the rule for HIPAA
covered entities applies specifically with regard to electronic
protected health information (PHI), the requirements in these interim
final rules specify that certified IDR entities must ensure the
confidentiality of all IIHI they create, obtain, maintain, store, or
transmit in accordance with Code section 9816(c)(4)(A)(v), ERISA
section 716(c)(4)(A)(v), and PHS Act section 2799A-1(c)(4)(A)(v). A
certified IDR entity's responsibility to comply with these
confidentiality requirements shall survive revocation of the IDR
entity's certification for any reason, and IDR entities must comply
with the record retention and disposal requirements described in these
interim final rules.
The Departments also require certified IDR entities to securely
destroy or dispose of IIHI in an appropriate and reasonable manner 6
years from either the date of its creation or the first date on which
the certified IDR entity had access to it, whichever is earlier. In
determining what is appropriate and reasonable, certified IDR entities
should assess potential risks to participant, beneficiary, or enrollee
privacy, as well as consider such issues as the form, type, and amount
of IIHI to be disposed. The Departments are of the view that 6 years is
a reasonable timeframe for destruction of such information since
relevant business procedures should be complete well before this
deadline, including IDR payment determinations and certified IDR entity
compliance with the Departments' audits as applicable. Furthermore, the
6-year timeframe matches the record retention requirements for
certified IDR entities under these interim final rules as well as other
record retention requirements under ERISA. These standards are also
similar to HIPAA Security Rule requirements \43\ under 45 CFR
164.310(d)(2)(i) and (ii), except that the Departments have tailored
the requirements in section 26 CFR 54.9816-8T(e)(2)(v)(B)(4), 29 CFR
2590.716-8(e)(2)(v)(B)(4), and 45 CFR 149.510(e)(2)(v)(B)(4) to apply
to IIHI.
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\43\ U.S. Dept. of Health and Human Servs., Office for Civil
Rights, ``The HIPAA Privacy and Security Rules: Frequently Asked
Questions About the Disposal of Protected Health Information,''
available at https://www.hhs.gov/sites/default/files/disposalfaqs.pdf.
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Next, the Departments require certified IDR entities to develop and
utilize secure electronic interfaces when transmitting IIHI
electronically, including through data transmission with the Federal
IDR portal, and between disputing parties during the Federal IDR
process and the certified IDR entity. In addition, the Departments are
of the view that certified IDR entities must have in place requirements
for their personnel, including their contractors and subcontractors (as
applicable), similar to those required under HIPAA Rules to make sure
IIHI is only handled by appropriate staff who are trained to handle
IIHI, and that proper protocol is followed if a breach of IIHI occurs.
Finally, 26 CFR 54.9816-8T(e)(2)(v)(D), 29 CFR 2590.716-
8(e)(2)(v)(D), and 45 CFR 14.510(e)(2)(v)(D) require that all
confidentiality requirements applicable to certified IDR entities also
apply to certified IDR entities' contractors and subcontractors with
access to IIHI performing any duties related to the Federal IDR
process. For example, if a breach rises to the level of requiring a
breach notification, the contractor or subcontractors must notify the
certified IDR entity to inform it of the risk assessment results, and
the certified IDR entity must notify the provider, facility,
[[Page 56004]]
or provider of air ambulance services; plan and issuer; the
Departments; and each individual whose unsecured IIHI has been, or is
reasonably believed to have been, subject to the breach, to the extent
possible, as required by these interim final rules.
In addition to the privacy and security requirements discussed in
this section of this preamble, these interim final rules contain breach
notification requirements, similar to the HIPAA breach notification
standards (the ``HIPAA Notification Rule'') at 45 CFR 164.402 and
164.404, to address steps that a certified IDR entity must take
following the discovery of a breach of unsecured IIHI as defined in
these interim final rules. The Departments are of the view that
adopting breach notification standards similar to the HIPAA breach
notification standards for certified IDR entities provides important
protections for IIHI. For purposes of these interim final rules, the
Departments made changes from the HIPAA breach notification standards
to account for IIHI and certified IDR entities, as opposed to PHI and
covered entities, in accordance with Code section 9816(c)(4)(C), ERISA
section 716(c)(4)(C), and PHS Act section 2799A-1(c)(4)(C). The
Departments require a certified IDR entity, upon discovery of a
potential breach of unsecured IIHI, to conduct a risk assessment to
determine the probability that the security or privacy of IIHI has been
compromised based on at least the nature and extent of the IIHI
involved, including the types of identifiers and the likelihood of re-
identification; the unauthorized person who used the IIHI or to whom
the disclosure was made; whether the IIHI was actually acquired or
viewed; and the extent to which the risk to the IIHI has been
mitigated. The Departments also require a breach to be treated as
discovered by the certified IDR entity as of the first day on which
such breach is known to the certified IDR entity or, by exercising
reasonable diligence, should have been known to the certified IDR
entity. A certified IDR entity shall be deemed to have knowledge of a
breach if the breach is known, or by exercising reasonable diligence
should have been known, to any person, other than the person committing
the breach, who is an employee, officer, or other agent of the
certified IDR entity.
The Departments are also including requirements for timing,
content, and method of providing the breach notification in these
interim final rules. Under these provisions, a certified IDR entity
must provide notification without unreasonable delay and in no case
later than 60 calendar days after the discovery of the breach. The
Departments are of the view that 60 calendar days provides sufficient
time for a certified IDR entity to discover a potential breach, conduct
a risk assessment, and send notification as required in these interim
final rules, in line with the requirements in 45 CFR 164.404 that allow
up to 60 calendar days for such a notification to be sent. Since a
condition for IDR entity certification involves submission of policies
and procedures to: Properly create, obtain, maintain, store, or
transmit IIHI in accordance with Code section 9816(c)(4)(A)(v), ERISA
section 716(c)(4)(A)(v), and PHS Act section 2799A-1(c)(4)(A)(v);
monitor, periodically assess, and update the security controls and
related system risks to ensure the continued effectiveness of these
controls; and guard against, detect, and report malicious software, the
Departments are of the view that 60 calendar days are sufficient for
proper identification, risk assessment, and notification of a breach.
When a certified IDR entity sends a breach notification, the
content must include similar information as that required under 45 CFR
164.404, but focused on IIHI. Certified IDR entities must include, to
the extent possible, the identification of each individual whose
unsecured IIHI has been, or is reasonably believed by the certified IDR
entity to have been, subject to the breach; a brief description of the
breach, including the date of the breach and the date of the discovery
of the breach, if known; a description of the types of unsecured IIHI
that were involved in the breach (for example, whether full name,
Social Security number, date of birth, home address, account number,
diagnosis, disability code, or other types of information were
involved); a brief description of what the certified IDR entity is
doing to investigate the breach, to mitigate harm to the affected
parties, and to protect against any further breaches; and contact
procedures for individuals to ask questions or learn additional
information, which must include a toll-free telephone number, email
address, website, or postal address. The Departments are of the view
that this level of detail is necessary for full transparency for those
who are potentially affected by such a breach.
Finally, a certified IDR entity must submit such notification in
written form (in clear and understandable language) either on paper,
electronically through the Federal IDR portal, or by email to the
Departments; the plan, issuer or FEHB carrier; the provider, facility,
or provider of air ambulance services; and, when possible, each
individual whose unsecured protected IIHI has been, or is reasonably
believed by the certified IDR entity to have been, subject to the
breach. The Departments understand that a certified IDR entity may not
have access to contact information for each individual whose unsecured
protected IIHI has been, or is reasonably believed by the certified IDR
entity to have been, subject to a breach. In these cases, IDR entities
must work with issuers, plans, providers, and facilities to ensure that
these individuals are appropriately notified.
The Departments seek comment on the confidentiality requirements
enumerated in 26 CFR 54.9816-8T(e)(2)(v), 29 CFR 2590.716-8(e)(2)(v),
and 45 CFR 149.510(e)(2)(v), which are based on certain provisions of
the HIPAA Rules, and whether any additional or different protections
are warranted.
Additionally, the certified IDR entity must ensure the fiscal
integrity and stability of its organization. In order to meet this
standard, the IDR entity must demonstrate that it has a system of
safeguards and controls in place to prevent and detect improper
financial activities by its employees and agents and to assure fiscal
integrity and accountability for all fees received and held. To
demonstrate financial stability, IDR entities must also submit 3 years
of financial statements, or other documentation that demonstrates
fiscal stability as directed by the Departments if 3 years of financial
statements are unavailable. This financial disclosure requirement is
informed by similar requirements under the Sarbanes-Oxley Act.\44\ The
Departments are of the view that, because the Sarbanes-Oxley Act
represents the primary standard for corporate disclosure of financial
information, it is appropriate to mirror its standard as a means of
ensuring certified IDR entity compliance with the statutory
requirements related to fiscal integrity. The Departments are also of
the view that the disclosure of these financial statements will enable
the Departments to assess whether the IDR entity is financially viable
and capable of maintaining its operations, independent of any future
revenue earned under the Federal IDR process as a certified IDR entity.
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\44\ Public Law 107-204, available at https://www.govinfo.gov/content/pkg/PLAW-107publ204/html/PLAW-107publ204.htm.
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As a condition of certification, an IDR entity must indicate to the
Departments the fees it intends to charge for payment determinations,
which are limited to a fixed fee amount for single
[[Page 56005]]
determinations (including determinations for bundled arrangements) and
a separate fixed fee amount for batched determinations under paragraph
(c)(3)(i) of these interim final rules. These fixed fees must be within
a range set forth in guidance by the Departments, unless the IDR entity
receives written approval from the Departments for a fee outside that
range. The Departments are of the view that setting a range of
permitted flat amounts, including a lower and upper limit, will permit
certified IDR entities to charge a reasonable certified IDR entity fee
for IDR payment determinations, while also making IDR costs clear to
parties in advance of the Federal IDR process. Setting a minimum and a
maximum rate will mitigate potential concerns regarding overuse of the
Federal IDR process due to low fees and potential concerns regarding
overcharging by certified IDR entities. For batched items and services,
setting a separate range that is higher to account for the potential
for a larger number of claims and increased complexity will help ensure
that certified IDR entities are compensated adequately for their
services. The certified IDR entity may update its fees and seek
approval from the Departments to charge a flat rate beyond the upper or
lower limits for fees annually, as provided in guidance.
The Departments considered whether to allow certified IDR entities
to set their fees without limitations and also considered imposing
anti-abuse provisions to prevent certified IDR entities from charging
unreasonable amounts, while also taking into account the statutory
intent to discourage the overuse of the Federal IDR process and
incentivize IDR entity participation in the process. The Departments
are of the view, however, that requiring certified IDR entities to set
fees within fixed ranges will reduce the potential for excessive
certified IDR entity fees that could result in inflated health care and
insurance costs that could ultimately be passed on to consumers. The
Departments are also setting a lower bound for certified IDR entity
fees to ensure that certified IDR entity fees do not lead to the
overuse of the Federal IDR process, thereby encouraging parties to
exhaust other paths to agreement, such as open negotiation, before
entering the Federal IDR process.
In setting the allowable certified IDR entity fee range, the
Departments will consider current IDR entity fees for state-managed IDR
processes that are similar to the Federal IDR process. Based on the
Departments' research on existing IDR processes in states that have
implemented similar surprise billing legislation, IDR entity fees
generally range from $300-$600 per payment determination.\45\ The
Departments acknowledge that in some states, individual arbitrators
charge as little as $270 and as much as $6,000 per arbitration.\46\
However, the Departments are of the view that such drastic ranges of
IDR entity fees risk inflating costs of care that could ultimately be
passed on to consumers.
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\45\ Hoadley, J., and Maanasa, K. ``How States are Using
Independent Dispute Resolution to Resolve Out-of-Network Payment in
Surprise Billing,'' To the Point 9blog), Commonwealth Funds, Feb.
27, 2020. https://doi.org/10.26099/pqt4-vy24.
\46\ https://www.kff.org/private-insurance/fact-sheet/surprise-medical-bills-new-protections-for-consumers-take-effect-in-2022/amp/.
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The Departments will also consider the anticipated time and
resources needed for certified IDR entities to meet the requirements of
these interim final rules, such as the time and resources needed to
obtain certification, making payment determinations (including
determining whether the dispute belongs in the Federal IDR process),
data reporting, and audits. The Departments will also consider factors
such as the anticipated volume of payment determinations under the
Federal IDR process and adequacy of the Federal IDR process capacity to
efficiently handle the volume of IDR initiations and payment
determinations. The Departments will review and update the allowable
fee range annually based on these factors and the impact of inflation
and other cost increases. The Departments seek comment on these factors
and any additional factors that should be considered when determining
the range for allowable certified IDR entity fees.
The certified IDR entity may not charge a fee that is beyond the
upper or lower limits for fees set forth in annual guidance published
by the Departments as approved fixed fees, unless the IDR entity or
certified IDR entity requests and can provide justification for the
higher or lower fee, and the Departments provide written approval for
the certified IDR entity to charge a fee beyond the upper or lower
limits for fees set forth in guidance. For example, if the IDR entity
or certified IDR entity is able to show that, due to matters the
Department has not considered, the cost of making determinations under
26 CFR 54.9816-8T(c)(4), 29 CFR 2590.716-8(c)(4), and 45 CFR
149.510(c)(4) will be higher than the upper limit for fees set forth in
guidance, the certified IDR entity may charge a higher fee for
determinations in that calendar year with the Departments' written
approval in accordance with 26 CFR 54.9816-8T(e)(2)(vii), 29 CFR
2590.716-8(e)(2)(vii), 45 CFR 149.510(e)(2)(vii). Certified IDR
entities will not be permitted to vary their fees from any approved
higher fees during the year for which such higher fees were approved.
Specifically, in order for the certified IDR entity to receive the
Departments' written approval to charge a fee beyond the upper or lower
bounds for fees as set forth in guidance, the IDR entity or certified
IDR entity must submit a written proposal that includes: (1) The
alternative flat fee the IDR entity or certified IDR entity believes is
appropriate; (2) a description of the circumstances that require the
alternative flat fee; and (3) a description of how the alternative flat
fee will be used to mitigate such circumstances. A fee other than the
higher (or lower) fee previously approved, including one outside the
allowable range, will be permitted only upon the Departments' written
approval to charge the fee documented in the IDR entity's or certified
IDR entity's written proposal. The Federal IDR portal will provide the
functionality for IDR entities and certified IDR entities to request a
fixed fee beyond the lower and upper limits set forth in guidance. As
discussed earlier in this preamble, in instances where the disputing
parties do not select a certified IDR entity, the Departments will
select a certified IDR entity that charges a fee within the allowed
range as provided for in guidance by the Departments. Only if there are
insufficient certified IDR entities that charge a fee within the
allowed range available to make the payment determination will the
Departments select a certified IDR entity that charges a fee that has
been approved by the Department but that is outside the allowed range.
A certified IDR entity must also have procedures in place to retain
the certified IDR entity fees paid by both parties at the initiation of
the Federal IDR process in a trust or escrow account separate from
other funds and to return the certified IDR entity fees paid by the
prevailing party of an IDR payment determination, or a portion of the
fees paid by both parties should they agree on an out-of-network rate
through ongoing open negotiations, within 30 business days of the
determination, as specified in these interim final rules. The certified
IDR entity may (but is not required to) accrue interest on the funds
held in a trust or escrow account and is not required to include
accrued interest with the returned fee. Additionally, the IDR entity
must also have a procedure in place to retain the administrative fee
[[Page 56006]]
required under 26 CFR 54.9816-8T(e)(2)(ix), 29 CFR 2590.716-
8(e)(2)(ix), and 45 CFR 149.510(e)(2)(ix), and to remit it to the
Departments in accordance with the timeframe and procedures set forth
in guidance.
As a condition of certification, the IDR entity must show that it
is able to conduct the Federal IDR process as required under these
interim final rules. As part of this requirement, the IDR entity must
have processes and procedures in place to ensure that it will not make
a determination under the Federal IDR process with respect to which the
certified IDR entity would not be eligible for selection due to a
conflict of interest.
Therefore, in order to be certified, an IDR entity must provide
written documentation that shows the IDR entity satisfies certain
standards related to conflicts of interest. Under 26 CFR 54.9816-
8T(e)(3)(i), 29 CFR 2590.716-8(e)(3)(i), and 45 CFR 149.510(e)(3)(i)
the IDR entity must attest that it does not have a conflict of interest
as defined in 26 CFR 54.9816-8T(a)(2)(iv), 29 CFR 2590.716-8(a)(2)(iv),
and 45 CFR 149.510(a)(2)(iv). Additionally, to be certified, an IDR
entity must demonstrate that it has procedures in place to ensure that
the specific personnel assigned to a payment determination do not have
conflicts of interest regarding any party to the dispute within the 1
year immediately preceding an assignment of dispute determination. This
requirement is similar to the requirements set forth in 18 U.S.C.
207(b) and, as discussed earlier in this section of the preamble,
provides a reasonable and appropriate standard for preventing conflicts
of interest.\47\
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\47\ 18 U.S.C. 207 provides for certain restrictions on former
officers, employees, and elected officials of the executive and
legislative branches of the federal government.
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Finally, to preserve the integrity of the Federal IDR process,
following certification, if a certified IDR entity, at any time
acquires control of, becomes controlled by, or comes under common
control with any entity described in paragraphs 26 CFR 54.9816-
8T(e)(3)(i), 29 CFR 2590.716-8(e)(3)(i), and 45 CFR 149.510(e)(3)(i),
the certified IDR entity must notify the Departments in writing no
later than 3 business days after the acquisition or exercise of
control. As the certified IDR entity would no longer meet the
certification criteria, it will have its certification revoked under
the processes set forth in 26 CFR 54.9816-8T(e)(6), 29 CFR 2590.716-
8(e)(6), and 45 CFR 149.510(e)(6) (including the prohibition on
accepting new payment determinations). The Departments seek comment on
whether any additional protections are necessary.
Certified IDR entities must also adhere to audit standards set
forth in these interim final rules and by the Departments in guidance
to ensure that certified IDR entities are adhering to the requirements
of these interim final rules, including those regarding certification
as a certified IDR entity and those outlining how entities must conduct
payment determinations as defined in Code section 9816(c), ERISA
section 716(c), and PHS Act section 2799A-1(c). To ensure adherence,
the Departments intend to perform audits on a select number of
certified IDR entities. Certified IDR entities may be randomly selected
by the Departments for an audit or selected based upon stakeholder
complaints (including those received in connection with a petition for
revocation of certification) received by the Departments. Resulting
findings may be used for revocation of certification or in re-
certification decisions made by the Departments.
Finally, the IDR entity must collect and provide the information
required to be reported to the Departments under 26 CFR 54.9816-8T(f),
29 CFR 2590.716-8(f), and 45 CFR 149.510(f) and report such information
about the Federal IDR process on a timely basis to the Departments in
the form and manner provided by the Departments in guidance.
6. Petition for Denial or Revocation of IDR Entity Certification
An individual, provider, facility, provider of air ambulance
services, plan, or issuer may petition for the denial of a
certification of an IDR entity or a revocation of a certification of a
certified IDR entity for failure to meet the requirements of Code
section 9816(c), ERISA section 716(c), PHS Act section 2799A-1(c), or
these interim final rules, through the Federal IDR portal in the form
and manner set forth in guidance to be issued by the Departments. The
petitioner must submit a written petition to the Departments that
identifies the IDR entity seeking certification or the certified IDR
entity that is the subject of the petition and outlines the reasons for
the petition. The petition must also specify whether the petition seeks
denial or revocation of a certification and must be signed by the
petitioner. The petitioner may use the standard petition notice issued
by the Departments and submit any supporting documentation for
consideration by the Departments. The Departments will make public the
list of IDR entities seeking certification, as well as the list of
certified IDR entities, to help facilitate the petition process.
Petitioners submitting a petition for denial of a certification will
have 5 business days from the announcement that an IDR entity is
seeking certification to submit the written petition. This 5-business-
day period is applicable until the Departments issue guidance outlining
a different period for petitions for a denial of certification.
The Departments will acknowledge receipt of the petition within 10
business days of receipt. If, after review, the Departments find that
the petition adequately shows a failure to comply with the requirements
of Code section 9816(c), ERISA section 716(c), PHS Act section 2799A-
1(c), or these interim final rules, the Departments shall notify the
IDR entity seeking certification or the certified IDR entity by
providing a de-identified copy of the petition. Following this
notification, the IDR entity seeking certification or the certified IDR
entity will have 10 business days to provide a response. After the time
period for providing the response has passed, the Departments will
review the response (if any) and determine whether a denial or a
revocation of certification is warranted. The decision will be subject
to the appeal requirements of 26 CFR 54.9816-8T(e)(6)(v), 29 CFR
2590.716-8(e)(6)(v), and 45 CFR 149.510(e)(6)(v). If the Departments,
after reviewing a certified IDR entity's response, find that the
petition shows a failure to comply with the requirements of Code
section 9816(c), ERISA section 716(c), or PHS Act section 2799A-1(c)
but have not yet made a final decision pending appeal, a certified IDR
entity may continue to work on previously assigned determinations.
However, the certified IDR entity will not be permitted to accept new
requests for IDR payment determinations unless and until the
Departments issue a notice of the decision to the certified IDR entity
finding that a revocation of certification is not warranted. If the
entity is seeking certification, and the Departments find that denying
certification is warranted, then the Departments will deny
certification.
The IDR entity certification requirements included in these final
rules are developed to ensure the integrity of the Federal IDR process.
Failure to meet these standards puts at risk the Departments' ability
to ensure providers, facilities, providers of air ambulance services,
plans, and issuers can avail themselves of an equitable and efficient
process. Therefore, the Departments may deny an IDR entity
[[Page 56007]]
certification if, during the process of certification, including as a
result of a petition, the Departments determine the IDR entity fails to
meet the applicable standards required for certification. Additionally,
these interim final rules set forth other reasons that certification
may be denied. For example, if the IDR entity has knowingly committed
or participated in fraudulent or abusive activities such as by
submitting to the Departments fraudulent data or information during the
certification process or submitting data or information that the IDR
entity knows to be false, certification may be denied. Another
situation in which an IDR entity's application for certification might
be denied for knowingly committing or participating in fraudulent or
abusive activities would be when an IDR entity has engaged in
fraudulent practices related to activities conducted outside the
Federal IDR process. Additionally, if the IDR entity submits
information as part of the certification process that demonstrates that
the IDR entity cannot fulfill the responsibilities required of
certified IDR entities, certification will be denied.
Also, to the extent the IDR entity has failed to comply with
requests for information from the Departments as part of the
certification process, certification may be denied. The Departments
expect that as part of the certification process, the Departments may
need to contact the IDR entities and request clarifying information.
Moreover, if in conducting payment determinations, including those
conducted outside the Federal IDR process, the IDR entity has failed to
meet the standards that applied to those determinations or reviews,
including standards of independence and impartiality, certification may
be denied. With respect to certified IDR entities applying for
recertification, the Departments will also consider whether, in
conducting payment determinations under the Federal IDR process, the
certified IDR entity has met the standards applicable to those payment
determinations. It is the Departments' view that, although certain
conduct (for example, unethical conduct regarding payment
determinations conducted outside the Federal IDR process) may not
constitute a violation of the Federal IDR process, this conduct could
indicate that the IDR entity may be unable to comply with the
requirements of the Federal IDR process. Additionally, to the extent it
is otherwise determined that the IDR entity is not fit or qualified to
make determinations, certification may be denied.
If the Departments find, after review of the evidence, that a
certified IDR entity is no longer qualified to make determinations due
to an audit, a petition, or otherwise, the certification of the IDR
entity may be revoked. A certified IDR entity's certification may be
revoked prior to the end of the 5-year term for the following reasons.
First, a certified IDR entity's certification may be revoked prior
to the end of the 5-year term if the Departments determine that the
certified IDR entity has a pattern or practice of noncompliance with
any of the requirements applicable to certified IDR entities under the
Federal IDR process.
Second, if the certified IDR entity is operating in a manner that
hinders the efficient and effective administration of the Federal IDR
process, its certification may be revoked prior to the end of the 5-
year term. For example, if a certified IDR entity consistently fails to
meet the deadline for rendering its decisions as set forth in these
interim final rules, its certification may be revoked. Also, if a
certified IDR entity repeatedly fails to check for a conflict of
interest between itself, its personnel, and third parties with which
the certified IDR entity contracts, and the disputing parties, its
certification may be revoked prior to the end of the 5-year term.
Third, if the certified IDR entity no longer meets the applicable
certification standards set forth in these interim final rules under 26
CFR 54.9816-8T(e)(1), 29 CFR 2590.716-8(e)(1), and 45 CFR
149.510(e)(1), its certification may be revoked prior to the end of the
5-year term.
Fourth, if the certified IDR entity has committed or knowingly
participated in fraudulent or abusive activities, including submission
of false or fraudulent data to the Departments, its certification may
be revoked prior to the end of the 5-year term. A situation in which an
IDR entity's application for certification might be revoked for
knowingly committing or participating in fraudulent or abusive
activities would be where a certified IDR entity has engaged in
fraudulent practices related to activities conducted outside the
Federal IDR process.
Fifth, if the certified IDR entity no longer possesses the
financial viability to provide dispute resolution under the Federal IDR
process, its certification may be revoked prior to the end of the 5-
year term. The Departments are of the view that a certified IDR entity
must possess the requisite level of fiscal stability that demonstrates
the entity is a viable entity able to continue to carry out the Federal
IDR process in a timely and efficient manner as set forth in the No
Surprises Act and these interim final rules.
Sixth, if the certified IDR entity has failed to comply with
requests from the Departments made as part of an audit, including
submission of records, its certification may be revoked prior to the
end of the 5-year term. The audit process plays an important part in
helping to ensure that certified IDR entities are abiding by the
requirements set forth in these interim final rules. In order to ensure
that the Federal IDR process is fair, equitable, and does not have an
inflationary effect on health care costs due to certified IDR entities
failing to properly apply the factors as set forth in these interim
final rules, the Departments are of the view that it will be prudent to
review certified IDR entities' processes and procedures. Therefore,
failure to comply with such audits will be a basis for revocation of
certification.
Seventh, if it is otherwise determined that the certified IDR
entity is no longer fit or qualified to make payment determinations,
its certification may be revoked prior to the end of the 5-year term.
For example, the Departments may determine that an IDR entity is unfit
to participate in the Federal IDR process if the IDR entity is engaged
in actions that risk the integrity of the Federal IDR process.
If the Departments make a preliminary determination that an IDR
entity's certification should be denied or that a certified IDR
entity's certification should be revoked, the Departments will issue a
notice of proposed denial to the IDR entity seeking certification or a
notice of proposed revocation to the certified IDR entity within 10
business days of the preliminary determination. The notice will include
the proposed effective date of denial or revocation, explain the
reasons for denial or revocation, and provide an opportunity to request
an appeal of the proposed denial or revocation. The Departments seek
comment on whether final rules should include additional bases for
revocation. The Departments also seek comment on whether certain facts
and circumstances should result in immediate revocation of
certification of the certified IDR entity and reassignment of any
pending payment determinations prior to completion by that certified
IDR entity.
In order for an IDR entity that has received a notice of proposed
denial or certified IDR entity that has received a notice of proposed
revocation to request an appeal of its proposed denial or revocation,
as applicable, it must submit its request for an appeal to the
Departments within 30 business days of
[[Page 56008]]
the date of the notice and in the manner prescribed by the notice.
During the period when the IDR entity or certified IDR entity may
appeal the denial or revocation, the Departments will not issue a
notice of final denial or revocation. Furthermore, until a final
decision on the appeal is rendered by the Departments, the certified
IDR entity may complete any open IDR payment determinations assigned to
it at the time of notification, but may not receive new assignments
until a final decision regarding revocation has been made. Relevant
information to support a request for appeal may include a statement of
the facts, law, and arguments that negate or mitigate the evidence
provided in support of the IDR entity's certification denial or the
revocation of a certified IDR entity's certification, including a
description of the actions the certified IDR entity or IDR entity has
taken, is taking, or intends to take to cure the failures identified in
the notice (if possible) and to prevent the failures from reoccurring.
In the event the IDR entity or certified IDR entity does not timely
submit a request for appeal of the proposed denial or revocation, the
Departments will issue a final notice of denial or revocation as
described under 26 CFR 54.9816-8T(e)(6)(ii), 29 CFR 2590.716-
8(e)(6)(iii), and 45 CFR 149.510(e)(6)(iii). Similarly, if the
Departments reach a final determination upon appeal that the IDR
entity's certification is denied or the certified IDR entity's
certification is revoked, the Departments will issue a final notice of
denial or revocation including an explanation of the reasons for final
denial or revocation and consequences of such denial or revocation of
certification to the IDR entity and the petitioner. Upon final notice
of denial or revocation, the IDR entity shall not be considered a
certified IDR entity and therefore shall not be eligible to accept
payment determinations under the Federal IDR process. If, following a
final decision denying or revoking a certification, the IDR entity
comes into compliance with the requirements of 26 CFR 54.9816-8T(e), 29
CFR 2590.716-8(e), and 45 CFR 149.510(e), the IDR entity may again
apply for certification beginning on the 181st calendar day after the
date of the final notice of denial or revocation. The Departments are
of the view that providing a 180-calendar-day cooling-off period
provides adequate time for an IDR entity to correct and improve its
processes to comply with the standards of these interim final rules,
ensuring that IDR entities are afforded an opportunity to come into
compliance and re-apply for certification. The Departments are using
calendar days for this standard rather than business days for
consistency with other, similar suspension periods, such as those in
the guaranteed availability provisions under PHS Act section
2702(d)(2), as implemented at 45 CFR 147.104(c)(2).
The Departments will monitor the implementation of the Federal IDR
process, as well as the petition process, to determine whether
certified IDR entities are abiding by the applicable requirements. The
Departments seek comment on any additional requirements regarding
denial and revocation, and whether other steps may be required to
prevent patterns and practices of noncompliance.
7. Reporting of Information Relating to the Federal IDR Process for
Qualified IDR Items and Services That Are Not Air Ambulance Services
Code section 9816(c)(7), ERISA section 716(c)(7), and PHS Act
section 2799A-1(c)(7) direct the Departments to make certain
information related to the Federal IDR process available on a public
website for each calendar quarter in 2022 and each calendar quarter in
subsequent years. Code section 9816(c)(7)(C), ERISA section
716(c)(7)(C), and PHS Act section 2799A-1(c)(7)(C) specifically require
the certified IDR entities to provide information to the Departments as
determined necessary to carry out the requirements regarding
publication of information related to the Federal IDR process. To
ensure the Departments have the information needed to satisfy this
requirement, these interim final rules provide that, within 30 business
days of the close of each month, each certified IDR entity must report
certain data and information in a form and manner specified by the
Departments for qualified IDR items and services furnished on or after
January 1, 2022 that were subject to payment determinations. Such
reporting will be required as an ongoing condition of certification.
The Departments anticipate that much of this information will be
captured by the certified IDR entities during the normal course of the
Federal IDR process. As discussed elsewhere in this preamble, the
Departments expect that many of these reporting requirements will be
captured as information submitted through the Federal IDR portal. To
the extent the necessary information is captured directly through the
portal, the Departments do not intend for certified IDR entities to
report duplicative information. The Departments will provide additional
guidance to certified IDR entities on their reporting obligations.
Under these interim final rules, the certified IDR entity must
report the number of Notices of IDR Initiation submitted to the
certified IDR entity during the immediately preceding month. In
instances where the provider or facility submits the initial Notice of
IDR Initiation, the certified IDR entity must submit to the Departments
information on the size of the provider practice and the size of the
facilities submitting Notices of IDR Initiation. Specifically, the
certified IDR entity must specify whether the provider practice has
fewer than 20 employees, 20 to 50 employees, 51 to 100 employees, 101-
500 employees or more than 500 employees. For facilities, the certified
IDR entity must specify whether the facility has 50 or fewer employees,
51 to 100 employees, 101-500 employees, or more than 500 employees.
This information will allow the Departments to determine whether
smaller providers and facilities have the resources necessary to make
use of the Federal IDR process and will assist the Departments in
determining whether larger organizations may have an unfair advantage
in the process. It also will assist the Departments in determining the
effect of the Federal IDR process on horizontal and vertical
integration of providers and facilities, and in reporting on this
effect to Congress, as required by statute in Code section 9816(c),
ERISA section 716(c), PHS Act section 2799A-1(c), and section 109 of
the No Surprises Act.
Additionally, with respect to Notices of IDR Initiation submitted
during the immediately preceding month, certified IDR entities must
report the number of Notices of IDR Initiation for which a final
determination was made by the certified IDR entity under these interim
final rules. The certified IDR entity also must report a description of
the qualified IDR items and services for each Notice of IDR Initiation
submitted during the immediately preceding month for which a payment
determination was made. This information should include the relevant
billing and service codes, such as the CPT, HCPCS, DRG codes, or
National Drug Codes (if applicable). The certified IDR entity must also
report the relevant geographic region for purposes of the QPA for the
qualified IDR items and services with respect to which the Notice of
IDR Initiation was provided.
These interim final rules also require that for each determination
issued in relation to a Notice of IDR Initiation submitted during the
immediately
[[Page 56009]]
preceding month, the certified IDR entity must report the offers
submitted by each party expressed as both a dollar amount and the
corresponding percentage of the QPA represented by that dollar amount,
and whether the offer selected by the certified IDR entity was
submitted by the plan or issuer, or the provider or facility. Where
batched items and services have multiple QPAs, the certified IDR
entities must report the offer as a percentage of each QPA that applied
with respect to the batched items and services to which the offer
applied. For example, if one batch of services included services to
which two different QPAs applied, and the parties each submitted the
same offer for all batched services, then the certified IDR entity must
report each offer as a dollar amount and as a percentage of both QPAs.
However, if instead each party submitted two offers--one that applied
to the services for which one QPA applied and one that applied to the
services for which the other QPA applied--then the certified IDR entity
is required to report each offer separately and must express each offer
as a dollar amount and as a percentage of the applicable QPA. As
discussed earlier in this preamble, in making the determination, the
certified IDR entity must provide a rationale for its decision,
including the extent to which a decision relied on criteria other than
the QPA. The certified IDR entity must also report the number of times
the out-of-network rate determined exceeded the QPA. Where the QPA
differs within a group of batched items and services, the certified IDR
entity also must include whether the out-of-network rate (or various
out-of-network rates, when more than one out-of-network rate is
selected) exceeded the applicable QPA.
For each determination issued in relation to a Notice of IDR
Initiation submitted during the immediately preceding month, the
certified IDR entity must also report certain additional information on
the parties involved. Specifically, the certified IDR entity must
report the practice specialty or type of each provider or facility
involved in furnishing the qualified IDR items or services at issue
with respect to the determination. Additionally, the certified IDR
entity must provide each party's name and address.
The certified IDR entity also must report the number of business
days taken between the selection of the certified IDR entity and the
selection of the payment amount by the certified IDR entity for each
determination issued in relation to a Notice of IDR Initiation
submitted during the immediately preceding month. Finally, the
certified IDR entity must report the total amount of certified IDR
entity fees paid to the certified IDR entity during the immediately
preceding month. This total amount of certified IDR entity fees should
not include amounts refunded by the certified IDR entity to the
prevailing party or the administrative fees that are collected on
behalf of the Departments.
8. Reporting of Information Relating to the Federal IDR Process for
Qualified IDR Items or Services That Are Air Ambulance Services
Under Code section 9817, ERISA section 717, and PHS Act section
2799A-2, the Departments must publish on a public website for each
calendar quarter in 2022 and each calendar quarter in a subsequent year
certain information regarding disputes about air ambulance services
that differs from the information required under Code section 9816,
ERISA section 716, and PHS Act section 2799A-1 regarding disputes for
other items and services to which the protections of the No Surprises
Act apply. Therefore, 26 CFR 54.9817-2T(b)(3), 29 CFR 2590.717-2(b)(3)
and 45 CFR 149.520(b)(3) specify that in applying the requirements of
26 CFR 54.9816-8T(f), 29 CFR 2590.716-8(f), and 45 CFR 149.510(f) to
air ambulance services, the information that the certified IDR entity
must report within 30 business days of the close of each month, for
services furnished on or after January 1, 2022, in a form and manner
specified by the Departments, is as follows.
The certified IDR entity must report the number of Notices of IDR
Initiation submitted to the certified IDR entity that pertain to air
ambulance services during the immediately preceding month.
Additionally, with respect to Notices of IDR Initiation submitted
during the immediately preceding month, the certified IDR entity must
report the number of Notices of IDR Initiation for which there was a
determination under 26 CFR 54.9816-8T(c)(4)(ii), 29 CFR 2590.716-
8(c)(4)(ii), and 45 CFR 149.510(c)(4)(ii), as applied by 26 CFR
54.9817-2T(b)(1), 29 CFR 2590.717-2(b)(1), and 45 CFR 149.520(b)(1) for
air ambulance services. The certified IDR entity must also report the
number of times the out-of-network rate determined (or agreed to)
exceeded the QPA for air ambulance services.
With respect to each Notice of IDR Initiation submitted during the
immediately preceding month, the certified IDR entity must provide a
description of each air ambulance service, including the relevant
billing and service codes and point of pick-up (as defined in 42 CFR
414.605) for the services included in such Notice of IDR Initiation.
For each Notice of IDR Initiation, the certified IDR entity must also
provide the amount of the offer submitted by a plan or issuer (as
applicable) and by the nonparticipating provider of air ambulance
services, expressed as both a dollar amount and the corresponding
percentage of the QPA represented by that dollar amount. Of these
amounts, the certified IDR entity must also indicate whether the offer
selected by the certified IDR entity was the offer submitted by the
plan or issuer or by the provider of air ambulance services and the
amount of the offer so selected, expressed as both a dollar amount and
a percentage of the QPA. The certified IDR entity must also report the
rationale for the certified IDR entity's decision, including the extent
to which the decision relied on the criteria listed under 26 CFR
54.9817-2T(b)(2), 29 CFR 2590.717-2(b)(2), and 45 CFR 149.520(b)(2).
Additionally, the certified IDR entity must identify the air ambulance
vehicle type, including whether the vehicle is fixed wing or rotary
wing (information which should be included in the relevant service
code), and the clinical capability level of the vehicle (if the parties
have provided such information). The certified IDR entity must also
report the identity of each plan or issuer, and provider of air
ambulance services, with respect to the Notice of IDR Initiation
submitted during the immediately preceding month. Specifically, each
certified IDR entity must provide each party's name and address, as
applicable. The certified IDR entity must report the number of business
days taken between the selection of the certified IDR entity and the
certified IDR entity's selection of the payment amount. Finally, the
certified IDR entity must also report the total amount of certified IDR
entity fees paid to the certified IDR entity for the immediately
preceding month. This total amount of certified IDR entity fees should
not include amounts refunded by the certified IDR entity to prevailing
parties or the administrative fees that are collected on behalf of the
Departments.
9. Extension of Time Periods for Extenuating Circumstances
Under Code section 9816(c)(9), ERISA section 716(c)(9), PHS Act
section 2799A-1(c)(9), and these interim final rules, the time periods
specified in these interim final rules (other than the timing of the
payments, including, if applicable, payments to the provider, facility
or provider of air ambulance services) may be extended in the case of
[[Page 56010]]
extenuating circumstances at the Departments' discretion. The
Departments may extend time periods on a case-by-case basis if the
extension is necessary to address delays due to matters beyond the
control of the parties or for good cause. Such extension may be
necessary if, for example, a natural disaster impedes efforts by plans,
issuers, providers, facilities, and providers of air ambulance services
to comply with the terms of these interim final rules. Additionally,
for the extension to be granted, the parties must attest that prompt
action will be taken to ensure that the payment determination under
this section is made as soon as administratively practicable. Parties
may request an extension by submitting a Request for Extension due to
Extenuating Circumstances through the Federal IDR portal, including an
explanation about the extenuating circumstances that require an
extension and why the extension is needed.
E. Applicability of the Rules Regarding the Federal IDR Process
The applicability of these interim final rules with respect to the
items and services, plans and issuers, and providers, facilities, and
providers of air ambulance services subject to these interim final
rules, parallels that of the July 2021 interim final rules to ensure
that the surprise billing protections of the No Surprises Act are
implemented in a consistent manner. Finally, these interim final rules
provide standards for certifying IDR entities, and standards for
certified IDR entities. Accordingly, these interim final rules amend 26
CFR 54.9816-2T, 29 CFR 2590.716-2, and 45 CFR 149.20 to include
references to 26 CFR 54.9816-8T and 54.9817-2T; 29 CFR 2590.716-8 and
2590.717-2; and 45 CFR 149.510 and 149.520 to ensure that the items and
services, as well as entities subject to the balance billing
protections under the July 2021 interim final rules, are eligible for
the Federal IDR process under these interim final rules. The
Departments solicit comment on whether any differences or departures
from the approach taken in the July 2021 interim final rules are
warranted.
These interim final rules implementing the Federal IDR process
generally apply to group health plans and health insurance issuers
offering group or individual health insurance coverage (including
grandfathered health plans) with respect to plan years (in the
individual market, policy years) beginning on or after January 1, 2022
and to certified IDR entities, health care providers and facilities,
and providers of air ambulance services beginning on January 1, 2022.
The interim final rules regarding IDR entity certification at 26 CFR
54.9816-8T(a), 26 CFR 54.9816-8T(e), 29 CFR 2590.718-8(a), 29 CFR
2590.718-8(e), 45 CFR 149.510(a) and 45 CFR 149.510(e), are applicable
beginning on October 7, 2021 so that the Departments can begin
certifying IDR entities before the Federal IDR process becomes
applicable. The term ``group health plan'' includes both insured and
self-insured group health plans. Group health plans include private
employment-based group health plans subject to ERISA, non-Federal
governmental plans (such as plans sponsored by states and local
governments) subject to the PHS Act, and church plans subject to the
Code. Individual health insurance coverage includes coverage offered in
the individual market, through or outside of an Exchange, and includes
student health insurance coverage as defined at 45 CFR 147.145. In
addition, under the OPM interim final rules, FEHB carriers must comply
with the Departments' interim final rules, subject to OPM regulation
and contract provisions. The No Surprises Act amended section 1251(a)
of the Affordable Care Act to specify that PHS Act sections 2799A-1,
2799A-2, and 2799A-7 apply to grandfathered health plans for plan years
beginning on or after January 1, 2022. Therefore, these interim final
rules apply to grandfathered health plans (as defined in 26 CFR
54.9815-1251, 29 CFR 2590.715-1251, and 45 CFR 147.140) for plans years
beginning on or after January 1, 2022. In addition, these interim final
rules implementing the Federal IDR process apply to certain non-
grandfathered health insurance coverage in the individual and small
group markets with respect to which CMS has announced it will not take
enforcement action with respect to certain specified market
requirements even though the coverage is out of compliance with those
requirements (sometimes referred to as grandmothered or transitional
plans). These interim final rules implementing the Federal IDR process
do not apply to health reimbursement arrangements (HRAs), or other
account-based group health plans, as described in 26 CFR 54.9815-
2711(d)(6)(i), 29 CFR 2590.715-2711(d)(6)(i), and 45 CFR
147.126(d)(6)(i), that make reimbursements subject to a maximum fixed
dollar amount for a period, as the benefit design of these plans makes
concepts related to surprise billing, including the IDR process,
inapplicable. Additionally, the Departments expect that account-based
group health plans typically will be integrated with other coverage
that will have protections against surprise billing (such as individual
coverage HRAs) or will be otherwise exempt from these requirements
(such as excepted benefit HRAs). Therefore, under these interim final
rules, these requirements do not apply to individual coverage HRAs and
other account-based plans, consistent with the existing applicability
provisions in 26 CFR 54.9816-2T, 29 CFR 2590.716-2, and 45 CFR 149.20
with respect to other requirements in 26 CFR part 54, 29 CFR subpart D,
and 45 CFR part 149. The Departments note that by statute certain plans
and coverage are not subject to the interim final rules implementing
the Federal IDR process. This includes a plan or coverage consisting
solely of excepted benefits \48\ as well as short-term, limited-
duration insurance as defined under PHS Act section 2791(b)(5).\49\
Excepted benefits are described in Code section 9832, ERISA section 733
and PHS Act section 2791. Under PHS Act section 2791(b)(5), short-term,
limited-duration insurance is excluded from the definition of
individual health insurance coverage and is therefore exempt from these
interim final rules regarding the Federal IDR process and the statutory
provisions these interim final rules implement. In addition, these
interim final rules do not apply to retiree-only plans, because ERISA
section 732(a) and Code section 9831(a) generally provide that part 7
of ERISA and chapter 100 of the Code respectively do not apply to plans
with fewer than two participants who are current employees (including
retiree-only plans, which cover fewer than two participants who are
current employees). Title XXVII of the PHS Act, as amended by the
Affordable Care Act, no longer contains a parallel provision at section
2721(a) of the PHS Act. However, as explained in prior rulemaking, HHS
will not enforce the requirements of title XXVII of the PHS Act with
respect to non-Federal governmental retiree-only plans and encourages
states to adopt a similar approach with respect to health insurance
coverage of retiree-only plans.\50\ HHS intends to continue to follow
this same approach, including with respect to the new market reforms
established in the No Surprises Act.
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\48\ Code section 9831, ERISA section 732, and PHS Act section
2722; 26 CFR 54.9831-1(c), 29 CFR 2590.732(c), and 45 CFR
146.145(b).
\49\ 26 CFR 54.9801-2, 29 CFR 2590.701-2, and 45 CFR 144.103.
\50\ 75 FR 34537, 34540 (June 17, 2010).
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[[Page 56011]]
IV. External Review and Section 110 of the No Surprises Act
Section 110 of the No Surprises Act states that ``[i]n applying the
provisions of section 2719(b) of the [PHS Act] to group health plans
and health insurance issuers offering group or individual health
insurance coverage, the Secretary of HHS, Secretary of Labor, and
Secretary of the Treasury, shall require, beginning not later than
January 1, 2022, the external review process described in paragraph (1)
of such section to apply with respect to any adverse determination by
such a plan or issuer under Code section 9816 or 9817, ERISA section
716 or 717 or PHS Act section 2799A-1 or 2799A-2, including with
respect to whether an item or service that is the subject to such a
determination is an item or service to which such respective section
applies.'' The statute defines the terms group health plan and health
insurance issuer by reference to PHS Act section 2791, ERISA section
733, and Code section 9832, as applicable.
These interim final rules implement section 110 of the No Surprises
Act in two ways. First, these interim final rules amend the scope of
claims eligible for external review set forth in the regulations
implementing PHS Act section 2719 to include adverse benefit
determinations related to compliance with the surprise billing and
cost-sharing protections under the No Surprises Act. Additionally,
these interim final rules clarify the scope of external review in light
of new surprise billing and cost-sharing protections under the No
Surprises Act and provide examples of which types of adverse benefit
determinations will be eligible for external review. Second, these
interim final regulations extend the external review requirement to
grandfathered health plans and health insurance issuers for adverse
benefit determinations involving items and services covered by
requirements of Code section 9816 or 9817, ERISA section 716 or 717, or
PHS Act section 2799A-1 or 2799A-2, as added by the No Surprises Act.
The Departments solicit comment on whether and to what extent
additional guidance or changes to the existing regulations are needed
to protect participants, beneficiaries, and enrollees from surprise
medical bills, consistent with section 110 of the No Surprises Act.
A. Scope of Claims Eligible for External Review
Under PHS Act section 2719 and its implementing regulations, non-
grandfathered group health plans and health insurance issuers offering
non-grandfathered group or individual health insurance coverage must
comply with any applicable state external review process, if that
process includes, at a minimum, the consumer protections set forth in
the NAIC Uniform External Review Model Act.\51\ However, if the state
external review process does not meet this standard, or if a plan or
issuer is not subject to state insurance regulation, the plan or issuer
must comply with the Federal external review process, as described in
26 CFR 54.9815-2719(d), 29 CFR 2590.715-2719(d), and 45 CFR 147.136(d).
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\51\ Available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/naic-uniform-review-model-act.pdf.
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State external review processes that meet the minimum standards
must provide for the external review of adverse benefit determinations
based on requirements for medical necessity, appropriateness, health
care setting, level of care, or effectiveness of a covered benefit. The
Federal external review process must be available for any adverse
benefit determination by a plan or issuer that involves medical
judgment, as well as a rescission of coverage. In the Departments'
view, the scope of claims eligible for external review under state
processes that meet the minimum standards for approval is substantially
similar to the scope of claims eligible for external review under the
Federal process.
In 2010, the Departments issued interim final rules that set forth
the original scope of claims eligible for external review under the
Federal external review process.\52\ Specifically, any adverse benefit
determination (including final internal adverse benefit determinations)
could be reviewed unless it was related to a participant's or
beneficiary's failure to meet the requirements for eligibility under
the terms of a group health plan (for example, worker classification
and similar issues were not within the scope of the Federal external
review process). In response to stakeholder comments, the Departments
issued an amendment in 2011 suspending the original rule and narrowing
the scope to claims that involve: (1) Medical judgment (including, but
not limited to, those based on the plan's or issuer's requirements for
medical necessity, appropriateness, health care setting, level of care,
or effectiveness of a covered benefit, or its determination that a
treatment is experimental or investigational), as determined by the
external reviewer; and (2) a rescission of coverage (whether or not the
rescission has any effect on any particular benefit at the time).\53\
The Departments finalized the narrowed scope in the 2015 final
rules.\54\
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\52\ 75 FR 43329 (July 23, 2010).
\53\ 76 FR 37207 (June 10, 2011).
\54\ 80 FR 72191 (Nov. 18, 2015).
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Although the scope of Federal external review was narrowed in
comparison to the scope as outlined in the 2010 interim final
regulations, the Departments note that the scope of claims that are
eligible for external review in general is broad, as many adverse
benefit determinations involve medical judgment. The 2015 final
regulations issued by the Departments include the following examples:
(1) Whether treatment by a specialist is medically necessary or
appropriate (pursuant to the plan's standard for medical necessity or
appropriateness); (2) whether treatment involved ``emergency care'' or
``urgent care,'' affecting coverage or the level of coinsurance; (3) a
determination that a medical condition is a preexisting condition; (4)
whether a participant or beneficiary is entitled to a reasonable
alternative standard for a reward under the plan's wellness program;
and (5) whether a plan or issuer is complying with the nonquantitative
treatment limitation provisions of the Mental Health Parity and
Addiction Equity Act.\55\
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\55\ 26 CFR 54.9815-2719(d)(1); 29 CFR 2590.715-2719(d)(1); 45
CFR 147.136(d)(1).
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The Departments have similarly provided a number of additional
examples in preambles to rulemaking under PHS Act section 2719 to
provide further clarification on the broad scope of the external review
process. In the preamble to interim final rules issued in 2011, the
Departments stated that examples of medical judgment would include the
appropriate health care setting for providing medical care to an
individual (such as outpatient versus inpatient care or home care
versus rehabilitation facility); a plan's general exclusion of an item
or service (such as speech therapy), if the plan covers the item or
service in certain circumstances based on a medical condition (such as,
to aid in the restoration of speech loss or impairment of speech
resulting from a medical condition); and the frequency, method,
treatment, or setting for a recommended preventive service, to the
extent not specified in the recommendation or guideline of the U.S.
Preventive Services Task Force, the Advisory Committee on Immunization
Practices of the Centers for Disease Control and Prevention, or the
Health
[[Page 56012]]
Resources and Services Administration.\56\ In the preamble to final
rules issued in 2015, the Departments also clarified that issues
related to how a claim is coded may also involve medical judgment
because ``[m]edical judgment is necessary to determine whether the
correct code was used in the patient's case.'' \57\
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\56\ 76 FR 37207, 37216 (June 10, 2011).
\57\ 80 FR 72191, 72209 (Nov. 18, 2015).
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Consistent with this principle, the Departments are of the view
that many claims that result in an adverse benefit determination
involving items and services subject to the surprise billing and cost-
sharing protections under the No Surprises Act generally would be
eligible for external review under the current scope as specified in
the 2015 final regulations. However, as stated above, section 110 of
the No Surprises Act directs the Departments to require the external
review process under PHS Act section 2719 to apply with respect to any
adverse determination by a plan or issuer under PHS Act section 2799A-1
or 2799A-2, ERISA section 716 or 717, or Code section 9816 or 9817,
including with respect to whether an item or service that is subject to
such a determination is an item or service to which the respective
section applies. The Departments are of the view that it is important
to ensure that consumers can avail themselves of external review in
these situations and ensure that they are afforded full protection
against surprise medical costs (including cost sharing), as intended by
the No Surprises Act. Accordingly, these interim final rules amend the
2015 final rules to broaden the scope of external review requirements
and explicitly require, to the extent not already covered, that any
adverse determination that involves consideration of whether a plan or
issuer is complying with PHS Act section 2799A-1 or 2799A-2, ERISA
section 716 or 717, or Code section 9816 or 9817 is eligible for
external review.
These interim final rules also amend the 2015 final regulations to
add five new examples (examples number 3 through 7 in the regulation
text) to clarify how the external review requirements apply to certain
adverse benefit determinations involving items and services within the
scope of the surprise billing and cost-sharing protections for out-of-
network emergency services, nonemergency services performed by
nonparticipating providers at participating facilities, and air
ambulance services furnished by nonparticipating providers of air
ambulance services under section Code section 9816 or 9817, ERISA
section 716 or 717, or PHS Act section 2799A-1 or 2799A-2. The first
new example illustrates that any determination of whether a claim is
for treatment for emergency services that involves medical judgment or
consideration of compliance with the cost-sharing and surprise billing
protections is eligible for external review.
The second new example clarifies that whether a claim for items and
services furnished by a nonparticipating provider at an in-network
facility is subject to the protections under the No Surprises Act is
eligible for external review because adjudication of the claim requires
consideration of health care setting and level of care or compliance
with cost-sharing and surprise billing protections.
The third new example clarifies that whether an individual was in a
condition to receive a notice about the availability of the protections
under the No Surprises Act and give informed consent to waive those
protections is a claim eligible for external review because
adjudication of the claim involves consideration of compliance with the
cost-sharing and surprise billing protections and medical judgment.
The fourth new example illustrates that whether a claim for items
and services is coded correctly, consistent with the treatment an
individual actually received, is a claim eligible for external review
because adjudication of the claim involves medical judgment.
The fifth new example illustrates that consideration of whether
cost-sharing was appropriately calculated for claims for ancillary
services provided by an out-of-network provider at an in-network
facility involves consideration of compliance with the cost-sharing and
surprise billing protections and is a claim eligible for external
review.
The Departments solicit comment on these examples and whether any
additional examples are needed. The Departments intend to ensure that
this provision is implemented in a manner that affords consumers broad
protection under section 110 of the No Surprises Act.
B. Application to Grandfathered Plans and Coverage
PHS Act section 2719 and its implementing regulations do not
currently apply to coverage offered by health insurance issuers and
group health plans that are grandfathered health plans because section
1251 of the Affordable Care Act provides that PHS Act section 2719 does
not apply to grandfathered plans and coverage.
These interim final rules amend the regulations under PHS Act
section 2719 to require grandfathered plans and coverage to provide for
external review of claims covered by the protections of the No
Surprises Act for plan years (or, in the individual market, policy
years) beginning on or after January 1, 2022. This change is grounded
in the text of section 110 of the No Surprises Act, in addition to the
policy reasons stated earlier in this preamble regarding the
Departments' intent to implement this provision broadly. Section 110
states that external review requirements shall ``apply with respect to
any adverse determination by such a plan or issuer under section 2799A-
1 or 2799A-2 of the PHS Act, section 716 or 717 of ERISA, or section
9816 or 9817 of the Code[.]'' These sections of the PHS Act, ERISA, and
the Code, as well as all the other provisions of the No Surprises Act,
as discussed in section I.A of this preamble, are all applicable to
grandfathered plans and coverage. Thus, to ensure that adverse benefit
determinations under grandfathered plans and coverage for claims
subject to those provisions are eligible for external review, external
review requirements must be applicable to grandfathered plans and
coverage for those claims. The Departments solicit comment on this
amendment, including whether any additional guidance is warranted to
help grandfathered plans and issuers comply with these requirements.
The Departments recognize that the internal claims and appeals
rules under 29 CFR 2560.503-1, as incorporated under regulations
implementing PHS Act section 2719,\58\ do not apply to issuers offering
grandfathered coverage in the individual market, or grandfathered non-
Federal Government plans. Those grandfathered plans and issuers
offering that grandfathered coverage must make external review
available for adverse benefit determinations under PHS Act section
2799A-1 or 2799A-2 when an enrollee has exhausted applicable appeal
rights under state law or under the terms of the enrollee's coverage.
In cases where these plans and issuers are not subject to a requirement
to have an internal appeals process and have not otherwise instituted
such a process, they must allow a claimant to request external review
of an adverse benefit determination of claims covered by the
protections under PHS Act sections 2799A-1 or 2799A-2 upon receipt of
the adverse benefit determination.
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\58\ 26 CFR 54.9815-2719; 29 CFR 2590.715-2719(c)(2)(i); 45 CFR
147.136.
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[[Page 56013]]
V. Federal IDR Process for FEHB Carriers--Office of Personnel
Management
OPM amends existing 5 CFR 890.114(a) to include references to the
Departments' regulations to clarify that FEHB carriers are also subject
to the Federal IDR process set forth in those regulations with respect
to a qualified IDR item or service furnished by an FEHB carrier
offering a health benefits plan in the same manner as those provisions
apply to a group health plan or health insurance issuer offering group
or individual health insurance coverage, subject to 5 U.S.C. 8902(m)(1)
and the provisions of the FEHB carrier's contract. Through new
paragraph 5 CFR 890.114(d), OPM adopts the Departments' rules as
necessary to properly integrate the new standards with existing FEHB
Program structure and sets forth the circumstances in which OPM will
enforce these rules as applied to FEHB carriers, including by requiring
carrier notice to the Director, in addition to the Departments, of an
FEHB carrier's notice of initiation, or receipt of a provider's notice
of initiation, the Federal IDR process. OPM will coordinate with the
Departments in matters regarding FEHB carriers requiring resolution
under the Federal IDR process and with respect to oversight of
certified IDR entities' reports regarding FEHB carriers.
As discussed in the July 2021 interim final rules, all out-of-
network rate determinations regarding qualified IDR items or services
with respect to FEHB plans or carriers that are not resolved by open
negotiation are subject to the Federal IDR process unless OPM contracts
with FEHB carriers include terms that adopt state law as governing for
this purpose.
VI. Overview of the Interim Final Rules Regarding Protections for the
Uninsured--The Department of Health and Human Services
A. Good Faith Estimates for Uninsured (or Self-Pay) Individuals
1. Scope
The No Surprises Act adds PHS Act section 2799B-6(2), which
requires health care providers and health care facilities, upon
scheduling an item or service to be furnished to an individual or upon
request of an individual, to inquire about such individual's health
coverage status and to provide a notification (in clear and
understandable language) of the good faith estimate of the expected
charges for furnishing such item or service (including any item or
service that is reasonably expected to be provided in conjunction with
such scheduled or requested item or service and such item or service
reasonably expected to be so provided by another provider or facility),
with the expected billing and diagnostic codes for any such item or
service.
In the case that the individual requesting a good faith estimate
for an item or service or seeking to schedule an item or service to be
furnished, is not enrolled in a certain type of plan or coverage or is
not seeking to file a claim with such type of plan or coverage, PHS Act
section 2799B-6(2)(B), and these interim final rules at 45 CFR 149.610,
require providers and facilities to furnish the good faith estimate to
the individual. These requirements under 45 CFR 149.610 apply only to
good faith estimate notifications for uninsured (or self-pay)
individuals as described in 45 CFR 149.610(a)(2)(xii) of these interim
final rules. As discussed in section I.C of this preamble, these
interim final rules do not include requirements implementing PHS Act
section 2799B-6(2)(A), which requires providers and facilities to
furnish good faith estimates to individuals' plans or issuers.
2. Definitions
For purposes of 45 CFR 149.610, HHS is defining certain terms at 45
CFR 149.610(a). Specifically, ``authorized representative'' means an
individual authorized under state law to provide consent on behalf of
the uninsured (or self-pay) individual, provided that the individual is
not a provider affiliated with the facility or an employee of the
facility represented in the good faith estimate, unless such provider
or employee is a family member of the uninsured (or self-pay)
individual. HHS considered defining authorized representative using the
same definition as in 45 CFR 149.410 and 149.420; however, the
definition in these interim final rules contain amendments to account
for concepts that are not relevant to uninsured (or self-pay)
individuals such as removing references to nonparticipating providers,
participants, beneficiaries, and enrollees.
These interim final rules define, ``convening health care provider
or convening health care facility (convening provider or convening
facility)'' as the provider or facility who receives the initial
request for a good faith estimate from an uninsured (or self-pay)
individual and who is or, in the case of a request, would be
responsible for scheduling the primary item or service as defined in
these interim final rules. As discussed elsewhere in this preamble, the
convening provider is responsible for providing the good faith estimate
to an uninsured (or self-pay) individual.
HHS considered putting the responsibility for providing the good
faith estimate on the ``treating health care provider,'' as defined in
45 CFR 149.30, but for many scheduled items or services, multiple
providers and facilities could participate in delivering an
individual's care, or be considered, a ``treating health care
provider''. Because it is likely that an individual would only schedule
an item or service or request a good faith estimate from one of the
treating providers or facilities, the convening provider or facility
would likely need to request additional scheduling from other providers
or facilities to participate in delivering care. Therefore, such a
provider or facility would need to alert the other providers or
facilities who are providing items or services in conjunction with the
scheduled item or service, when items or services are scheduled or a
good faith estimate is requested. Furthermore, HHS understands that
multiple providers and facilities may bill an individual for the
respective items or services provided during a period of care.
Therefore, it is important to define who is responsible for furnishing
the good faith estimate to the individual that is inclusive of all the
items or services to be provided by co-providers and co-facilities
involved in the scheduled items or services or the items or services
for which a good faith estimate is requested.
In these interim final rules, ``co-health care provider or co-
health care facility (co-provider or co-facility)'' means a provider or
facility other than a convening provider or a convening facility that
furnishes items or services that are customarily provided in
conjunction with a primary item or service (as defined for purposes of
this section). Because PHS Act section 2799B-6(2) requires that the
good faith estimate include any item or service that is reasonably
expected to be provided in conjunction with such scheduled item or
service (or such item or service for which a good faith estimate is
requested) and such an item or service reasonably expected to be so
provided by another health care provider or health care facility, HHS
is distinguishing co-providers and co-facilities from the convening
provider or convening facility who will furnish the good faith estimate
inclusive of estimates from co-providers and co-facilities.
``Diagnosis code'' means the code that describes an individual's
disease,
[[Page 56014]]
disorder, injury, or other related health conditions using the
International Classification of Diseases (ICD) code set. In
establishing requirements for implementation of HIPAA's Administrative
Simplification provisions, HHS adopted specific code sets for diagnoses
and procedures for use in standard health care transactions. The
definition of diagnosis code used in this section aligns with the
definition contained in the HIPAA Administrative Simplification
standards at 45 CFR part 162.\59\
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\59\ https://www.cms.gov/regulations-and-guidance/administrative-simplification/code-sets.
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For purposes of 45 CFR 149.610, ``expected charge'' means, for an
item or service, the cash pay rate or rate established by a provider or
facility for an uninsured (or self-pay) individual, reflecting any
discounts for such individuals, where the good faith estimate is being
provided to an uninsured (or self-pay) individual; or the amount the
provider or facility would expect to charge if the provider or facility
intended to bill a plan or issuer directly for such item or service
when the good faith estimate is being furnished to a plan or issuer.
HHS understands that providers and facilities establish gross
charges or chargemaster rates that are considered their standard charge
for an item or services and then often discounts are applied depending
on the payer (with the exception of state laws that specify payment
rates). For instance, in providing a good faith estimate to a plan or
issuer, the provider or facility may include as the expected charge the
undiscounted gross charge or chargemaster rate, which would then be
used by the plan or issuer to determine the out-of-pocket payment
amount of an insured individual. HHS understands that providers and
facilities often make adjustments to their gross charges or
chargemaster rates to establish a self-pay rate for uninsured (or self-
pay) individuals. HHS is of the view that if an individual is not
enrolled in a plan or coverage or is enrolled but is not seeking to
have a claim for such item or service submitted to their plan or
coverage, the expected charges included in the good faith estimate
should reflect what the provider or facility expects to bill or charge
the payer (in this case the uninsured or self-pay individual), and
therefore for the purpose of these interim final rules, HHS has defined
expected charges specific to what the uninsured (or self-pay)
individual would be expected to pay.
HHS is of the view that the estimate of expected charges must
reflect the anticipated billed charges, including any expected
discounts or other relevant adjustments that the provider or facility
expects to apply to an uninsured (or self-pay) individual's billed
charges because of the role of the good faith estimate in the patient-
provider dispute resolution process under PHS Act section 2799B-7 and
as specified in 45 CFR 149.620. Under PHS Act section 2799B-7, an
uninsured (or self-pay) individual can seek a determination from an SDR
entity if the total billed charge from a provider or facility is
substantially in excess of the expected charges listed in the good
faith estimate for the provider or facility. Therefore, as discussed in
detail below, these interim final rules require that for each item or
service listed in the good faith estimate, a provider or facility must
include the expected charge for each item or service, reflecting any
available discounts or other relevant adjustments that the provider or
facility expects to apply to an uninsured (or self-pay) individual's
billed charges. For instance, certain hospital organizations that meet
the general requirements for tax exemption under Code section
501(c)(3), are also required to meet the Financial Assistance Policy
(FAP) requirements under Code sections 501(r)(4) through (6).\60\ In
this example, any adjustments expected to be applied under the FAP
would be factored in and reflected in the amount reported in the good
faith estimate for items or services. To promote more transparency, HHS
considered requiring both undiscounted list prices and discounted
prices to be included when discounted prices apply. HHS seeks comment
on whether providers and facilities should be required to include both
the list price and discounted price for an item or service when
discounts apply.
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\60\ Financial Assistance Policy and Emergency Medical Care
Policy. https://www.irs.gov/charities-non-profits/financial-assistance-policy-and-emergency-medical-care-policy-section-501r4.
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Consistent with PHS Act section 2799B-6(2), these interim final
rules define the term ``good faith estimate'' to mean a notification of
expected charges for a scheduled or requested item or service,\61\
including items or services that are reasonably expected to be provided
in conjunction with such scheduled or requested item or service,
provided by a convening provider, convening facility, co-provider, or
co-facility.
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\61\ For purposes of simplicity of language, these interim final
rules in some instances refer to a requested good faith estimate for
an item or service, as a requested item or service.
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``Health care facility (facility)'' is defined more broadly than
the definition in 45 CFR 149.30, which applies in the context of
balance billing protections for non-emergency services. For purposes of
45 CFR 149.610, ``health care facility (facility)'' means an
institution (such as a hospital or hospital outpatient department,
critical access hospital, ambulatory surgical center, rural health
center, federally qualified health center, laboratory, or imaging
center) in any state in which state or applicable local law provides
for the licensing of such an institution, that is licensed as such an
institution pursuant to such law or is approved by the agency of such
state or locality responsible for licensing such institution as meeting
the standards established for such licensing. While HHS considered
applying the definition of health care facility from 45 CFR 149.30,
doing so would limit the scope of providers and facilities for which 45
CFR 149.610 applies to only those providers relevant to the balance
billing protections related to nonemergency items or services furnished
by participating providers in nonparticipating facilities. The
provisions in PHS Act section 2799B-6 do not specify such limitations.
For purposes of 45 CFR 149.610, ``health care provider (provider)''
means a physician or other health care provider who is acting within
the scope of practice of that provider's license or certification under
applicable State law, including a provider of air ambulance services.
As the Departments noted in the July 2021 interim final rules, the No
Surprises Act does not define ``provider.'' Some provisions use the
word in a manner that includes providers of air ambulance services,
while other provisions that use the word are inapplicable to providers
of air ambulance services by the terms of the provisions. In this case,
HHS is of the view that interpreting the term to include providers of
air ambulance services in this context is critical to ensuring
individuals obtain the benefits of a good faith estimate for a service
that can be extremely costly. HHS recognizes that individuals will
likely not be able to obtain a good faith estimate for emergency air
ambulance services, as these are not generally scheduled in advance.
However, making these requirements applicable to providers of air
ambulance services helps to ensure that individuals can obtain a good
faith estimate upon request or at the time of scheduling non-emergency
air ambulance services, for which coverage often is not provided by a
plan or issuer and thus even individuals with coverage often must self-
pay.
[[Page 56015]]
``Items or services'' has the same meaning given the term in 45 CFR
147.210(a)(2), which includes all encounters, procedures, medical
tests, supplies, prescription drugs, durable medical equipment, and
fees (including facility fees), provided or assessed in connection with
the provision of health care. The definition of items or services in 45
CFR 147.210(a)(2) encompasses and accurately defines the types of items
or services that are expected to be reported in the good faith estimate
including items or services such as those related to dental health,
vision, substance use disorders and mental health. HHS also clarifies
that some items or services may not be included in a good faith
estimate because they are not typically scheduled in advance and are
not typically the subject of a requested good faith estimate, such as
urgent, emergent trauma, or emergency items or services; however, HHS
clarifies that to the extent an urgent care appointment is scheduled at
least 3 days in advance, these interim final rules require a provider
or facility to provide a good faith estimate.\62\
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\62\ Certain urgent, emergent trauma, or emergency care services
may be subject to other protections discussed in the July 2021
interim final rules (86 FR 36872).
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These interim final rules also define the term ``period of care''
to mean the day or multiple days during which the good faith estimate
for scheduled or requested item or service (or set of scheduled or
requested items or services) are furnished or are anticipated to be
furnished, regardless of whether the convening provider, convening
facility, co-providers, or co-facilities are furnishing such items or
services, and also includes the period of time during which any
facility equipment and devices, telemedicine services, imaging
services, laboratory services, and preoperative and postoperative
services that would not be scheduled separately by the individual, are
furnished. HHS considered using the term episode of care but
understands that the term episode of care is used within many different
contexts regarding the provision of health care items or services.\63\
In the context of this section, HHS is of the view that it is important
to use the term period of care in order to clarify which items or
services are expected to be provided in a good faith estimate.
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\63\ https://www.healthaffairs.org/do/10.1377/hblog20190326.202031/full/.
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``Primary item or service'' means the item or service to be
furnished by the convening provider or convening facility that is the
initial reason for the visit. HHS is of the view that additional
distinctions beyond the definition of ``items or services'' must be
made in order for providers and facilities to furnish clear and
understandable good faith estimates. HHS considered using the term
``scheduled item or service'' which would more directly align with the
statutory language. However, such distinction would have excluded the
statutory provision whereby a good faith estimate must be issued upon
the request of an uninsured (or self-pay) individual when items or
services have not been scheduled. HHS is of the view that using the
term ``primary item or service'' provides clarity for providers and
facilities to establish and identify a main item or service for which a
good faith estimate is being issued. Based on the primary item or
service, the provider or facility could subsequently identify and
include all items or services that would be furnished in conjunction
with the primary item or service, and such items or services reasonably
expected to be provided by a co-provider or co-facility.
``Service code'' means the code that identifies and describes an
item or service using the CPT, HCPCS, DRG or National Drug Code (NDC)
code sets. As noted earlier, in establishing requirements for
implementation of HIPAA's Administrative Simplification provisions, HHS
adopted specific code sets for diagnoses and procedures for use in
standard health care transactions. The definition of service code used
in this section aligns with the definition contained in the HIPAA
Administrative Simplification standards at 45 CFR part 162.\64\
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\64\ https://www.cms.gov/regulations-and-guidance/administrative-simplification/code-sets.
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These interim final rules define the term ``uninsured (or self-pay)
individual'' to mean an individual who does not have benefits for an
item or service under a group health plan, group or individual health
insurance coverage offered by a health insurance issuer, Federal health
care program (as defined in section 1128B(f) of the Social Security
Act), or a health benefits plan under chapter 89 of title 5, United
States Code; or an individual who has benefits for such item or service
under a group health plan or individual or group health insurance
coverage offered by a health insurance issuer, or a health benefits
plan under chapter 89 of title 5, United States Code but who does not
seek to have a claim for such item or service submitted to such plan or
coverage. These individuals are often referred to as self-pay
individuals, therefore these interim final rules include the term self-
pay when discussing uninsured individuals. As discussed elsewhere in
this preamble, for the purposes of the interim final rules at 45 CFR
149.610 that implement PHS Act sections 2799B-6(1) and 2799B-6(2)(B),
HHS is adopting the definition of uninsured (or self-pay) individuals
from PHS Act sections 2799B-7 in order to align these two related
sections.
HHS understands, and is of the view that it is appropriate, that
consumers may request a good faith estimate without actually scheduling
items or services to compare costs and make a decision about from which
provider or facility they will seek care, or whether they will submit a
claim to insurance or self-pay. These individuals would be considered
self-pay for purposes of the requirement on the provider or facility to
provide a good faith estimate. HHS clarifies that if an individual
requests a good faith estimate as a self-pay individual and then
ultimately decides to submit a claim to the individual's plan or issuer
for the billed charges, the individual is no longer considered a self-
pay individual as defined in these interim final rules and would not be
eligible to use the patient-provider dispute resolution process as
defined in 45 CFR 149.620. HHS also clarifies that for purposes of 45
CFR 149.610 and 149.620, the definition of uninsured (or self-pay)
individuals includes individuals enrolled in short-term, limited-
duration insurance, as defined in regulations at 26 CFR 54.9801-2, 29
CFR 2590.701-2, and 45 CFR 144.103, and not also enrolled in a group
health plan, group or individual health insurance coverage offered by a
health insurance issuer, Federal health care program (as defined in
section 1128B(f) of the Social Security Act), or a health benefits plan
under chapter 89 of title 5, United States Code.
HHS seeks comment on the terms defined in these interim final rules
for purposes of this section. HHS is particularly interested in
receiving information related to the appropriateness and usability of
these definitions and whether additional terms should be included or
defined.
3. Requirements for Providers and Facilities
For purposes of PHS Act sections 2799B-6, 2799B-6(1), and 2799B-
6(2)(B) that are being implemented in these interim final rules,
providers and facilities must meet certain requirements related to
uninsured (or self-pay) individuals. Section 2799B-6 places the
requirement to provide a good faith estimate, within the statutorily
defined timeframes, upon
[[Page 56016]]
providers and facilities with whom an individual schedules an item or
service, or from whom an individual requests a good faith estimate for
an item or service, defined in these interim final rules as the
convening provider or facility. However, HHS notes that section 2799B-
6(2) requires that a good faith estimate of expected charges include
any item or service that is reasonably expected to be provided in
conjunction with such scheduled item or service and such items or
services reasonably expected to be so provided by another provider or
facility, defined in these interim final rules as a co-provider or co-
facility.
In order for good faith estimates to provide individuals with the
most accurate information available, HHS is of the view that it is not
feasible to fully implement the statutory provisions under PHS Act
section 2799B-6(2) without establishing certain requirements for
convening providers and facilities and co-providers and co-facilities.
In implementing these provisions, HHS is of the view that to the extent
possible, an uninsured (or self-pay) individual is entitled to receive
a clear and understandable document that informs the uninsured (or
self-pay) individual of the expected costs associated with the care
that they are considering or are scheduled to receive, and in order to
do so, the expected charges that inform the good faith estimate should
be provided by all providers and facilities who are reasonably expected
to furnish the items or services that would be billed to the uninsured
(or self-pay) individual. HHS seeks comment on publicly available
resources, methods, and potential standardized formatting or design
that could facilitate communication of good faith estimate information
in a clear and understandable manner.
To this end, HHS is of the view that issuance of separate good
faith estimate documents from each provider and facility involved in
furnishing care for a primary item or service would place undue
administrative burden upon uninsured (or self-pay) individuals to then
aggregate various good faith estimates received in order to obtain a
clear and understandable representation of all expected charges for an
item or service. However, HHS also acknowledges that in some instances,
it would not be practical nor feasible to expect a convening provider
or facility to have sufficient knowledge of the expected charges for
each item or service provided by a co-provider or co-facility. HHS is
also of the view that convening providers and facilities should not be
held responsible for the accuracy of expected charges for items or
services for which the convening provider or facility does not bill the
uninsured (or self-pay) individual (for instance, under the patient-
provider dispute resolution process as described in 45 CFR 149.620).
HHS notes that the accuracy of the good faith estimate is relevant
because if the actual billed charges substantially exceed the amounts
reported in the good faith estimate, an uninsured (or self-pay)
individual could seek a determination under the patient-provider
dispute resolution process under 45 CFR 149.620. HHS is also of the
view that it would not be appropriate to solely require that a
convening provider or facility be accountable through the patient-
provider dispute resolution process for items or services for which the
convening provider or facility did not bill the uninsured (or self-pay)
individual.
Therefore, HHS is using its general rulemaking authority to
establish requirements under 45 CFR 149.610, discussed in detail below,
for convening providers and facilities as well as co-providers and co-
facilities for issuance of good faith estimates for uninsured (or self-
pay) individuals. HHS is of the view that use of its general rulemaking
authority to establish such requirements is necessary in order to
implement the provisions of PHS Act section 2799B-6 in a manner that
balances the statutory intent of providing uninsured (or self-pay)
individuals with clear and understandable information regarding the
expected costs of items or services, the responsibilities of various
providers and facilities, and the inherent accountability established
in the statute through the interaction between the issuance of good
faith estimates under PHS Act section 2799B-6 and the patient-provider
dispute resolution process under PHS Act section 2799B-7.
i. Requirements for Convening Providers and Facilities
These interim final rules establish in 45 CFR 149.610(b)(1) certain
requirements for the convening provider or facility to verify whether
an individual meets the definition of an uninsured (or self-pay)
individual, to provide oral and written communication regarding the
requirement to provide good faith estimates to uninsured (or self-pay)
individuals upon scheduling an item or service or upon request, and to
provide timely good faith estimates to uninsured (or self-pay)
individuals. To determine whether a good faith estimate must be
provided to an individual under 45 CFR 149.610(b)(1), the convening
provider or facility must inquire and determine if the individual meets
the definition of an uninsured (or self-pay) individual as established
in 45 CFR 149.610(a)(2).
HHS is of the view that conveying information about the
availability of good faith estimates prior to or upon scheduling an
item or service aligns with and is most relevant when uninsured (or
self-pay) individuals are considering whether to proceed with medical
care while interacting with their providers or facilities. Requiring
that providers and facilities notify uninsured (or self-pay)
individuals of the availability of good faith estimates will help
ensure that all uninsured (or self-pay) individuals understand that
they can request a good faith estimate and will also receive a good
faith estimate upon scheduling an item or service and upon request.
Therefore, HHS is using its general rulemaking authority to
establish in 45 CFR 149.610(b)(1)(iii) that the convening provider or
facility must inform uninsured (or self-pay) individuals that good
faith estimates of expected charges are available to uninsured (or
self-pay) individuals upon scheduling an item or service or upon
request. Information regarding the availability of good faith estimates
for uninsured (or self-pay) individuals must be provided in writing and
orally. The convening provider or facility must provide written notice
in a clear and understandable manner prominently displayed (and easily
searchable from a public search engine) on the convening provider's or
convening facility's website, in the office, and on-site where
scheduling or questions about the cost of items or services occur. In
addition, the convening provider or facility must orally inform
uninsured (or self-pay) individuals of the availability of a good faith
estimate when questions about the cost of items or services occur.
Information regarding the availability of a good faith estimate must be
made available in accessible formats and languages spoken by
individuals considering or scheduling items or services with such
convening provider or convening facility.
HHS anticipates providing a model notice for notifying uninsured
(or self-pay) individuals of the availability of good faith estimates.
However, HHS is not requiring the use of such model notice in order to
allow providers or facilities flexibility to develop notices that would
be most effective for their patient populations. HHS also recognizes
the potential value in having a standardized notice that uninsured (or
[[Page 56017]]
self-pay) individuals can anticipate across providers and facilities.
Therefore, HHS seeks comment on the potential for standardizing notices
for use by all convening providers and convening facilities and other
alternative or concurrent options for informing uninsured (or self-pay)
individuals of the availability of good faith estimates that would meet
the requirements under this section.
HHS notes that uninsured (or self-pay) individuals may use
different terminology other than ``good faith estimate'' when
requesting a good faith estimate. Therefore, these interim final rules
at 45 CFR 149.610(b)(1)(iv) specify that convening providers and
convening facilities shall consider any discussion or inquiry regarding
the potential cost of items or services under consideration as a
request for a good faith estimate.
PHS Act section 2799B-6(2) requires that the good faith estimate
include any item or service that is reasonably expected to be provided
in conjunction with a scheduled or requested item or service by another
provider or facility. Therefore, these interim final rules at 45 CFR
149.610(b)(1)(v) require that the convening provider or facility
contact all applicable co-providers and co-facilities no later than 1
business day after the request for the good faith estimate is received
or after the primary item or service is scheduled, and request
submission of expected charges for items or services that meet the
requirements for co-providers and co-facilities under 45 CFR
149.610(b)(2) and (c)(2). The convening provider or convening facility
must indicate in their request the date that the good faith estimate
information must be received from the co-provider or co-facility. The
co-provider or co-facility is responsible for providing timely
information to the convening provider or convening facility as
discussed later in this preamble. HHS is of the view that the convening
provider or convening facility would not have accurate estimates to
include in the good faith estimate without information being provided
in a timely manner by the co-provider or co-facility. HHS seeks
comments on methods and standardized processes, including use of HIPAA
standard transactions, that could facilitate accurate and efficient
transmission of good faith estimate information from co-providers or
co-facilities to convening providers or convening facilities.
PHS Act section 2799B-6 requires that providers and facilities
furnish the good faith estimate of the expected charges within certain
defined timeframes. Specifically, PHS Act section 2799B-6 states that
in the case of an individual who schedules an item or service to be
furnished to such individual by such provider or facility at least 3
business days before the date such item or service is to be so
furnished, that the notification of the good faith estimate of expected
charges shall be provided no later than 1 business day after the date
of such scheduling; in the case of such an item or service scheduled at
least 10 business days before the date such item or service is to be so
furnished (or if requested by the individual), that the notification of
the good faith estimate of expected charges shall be provided no later
than 3 business days after the date of such scheduling or such request.
These interim final rules at 45 CFR 149.610(b)(1)(vi) codify these
timeframes for good faith estimates.
HHS recognizes that circumstances may arise where the scope of
information included in a good faith estimate changes (such as, a
provider or facility represented in the good faith estimate is no
longer able to furnish the items or services reported in the good faith
estimate). In such circumstances, these interim final rules establish
at 45 CFR 149.610(b)(1)(vii) and (viii) that the convening provider or
convening facility must issue an uninsured (or self-pay) individual
with a new good faith estimate no later than 1 business day before the
item or service is scheduled to be furnished. If any changes in
expected providers or facilities represented in a good faith estimate
occur less than 1 business day before that the item or service is
scheduled to be furnished, the replacement provider or replacement
facility must accept the good faith estimate as their expected charges
for the items or services being furnished that were provided by the
original provider or facility and represented in the good faith
estimate. These interim final rules also establish at 45 CFR
149.610(b)(2)(ii) and (iii) similar requirements for co-providers and
co-facilities. HHS acknowledges the challenges these requirements
impose on providers and facilities, and the potential disincentive that
such a requirement could have on a provider's or facility's willingness
to provide an item or service under such circumstances due to the fact
that the patient-provider dispute resolution process, at 45 CFR
149.620, uses the good faith estimate to determine the eligibility of
an item or service for dispute resolution. However, HHS is of the view
that such requirements are necessary for consumer protections against
facing surprise medical bills and without such a requirement an
uninsured (or self-pay) individual would be unable to avail themselves
of the patient-provider dispute resolution process in these
circumstances.
HHS expects that any replacement provider or facility considering
whether to furnish items or services will review the applicable good
faith estimate and use that information to determine whether to furnish
the applicable items or services. HHS is of the view that requiring the
replacement providers or facilities to accept as their good faith
estimate the expected charges reported in the existing good faith
estimate mitigates the risk of providers or facilities circumventing
the requirements of PHS Act 2799B-6 through the substitution of
providers or facilities. Such requirements also provide important
consumer protections intended by PHS Act 2799B-6 that are aimed to
protect uninsured (or self-pay) individuals from unexpected medical
bills. However, HHS seeks comment on whether this approach could have
unintended consequences, such as delays in care if providers were to
refuse to serve as replacements, and ways in which to alleviate any
such effects.
In instances where a good faith estimate is provided upon the
request of an uninsured (or self-pay) individual, upon the subsequent
scheduling of the item or service to be furnished, these interim final
rules at 45 CFR 149.610(b)(1)(ix) establish that a new good faith
estimate must be provided to the uninsured (or self-pay) individual for
the now scheduled item or service, and within the timeframes specified
for good faith estimates for scheduled items or services under 45 CFR
149(b)(1)(vi)(A) and (B). HHS recognizes that uninsured (or self-pay)
individuals might choose to request a good faith estimate in order to
better understand anticipated costs, for instance in situations where
an individual may wish to compare costs across providers or facilities.
If an uninsured (or self-pay) individual had not previously scheduled
the primary item or service, the individual may not have been evaluated
for underlying conditions that could impact the accuracy of the good
faith estimate. HHS encourages convening providers or facilities to
review any previously issued good faith estimate related to the primary
item or service and make all applicable changes when providing the new
good faith estimate. HHS also encourages convening providers or
convening facilities to communicate these changes upon delivery of the
new good faith estimate to help patients understand what has changed
between the initial
[[Page 56018]]
good faith estimate and the new good faith estimate.
HHS acknowledges that there are circumstances where recurring items
or services are expected to be furnished to an uninsured (or self-pay)
individual (for example, an uninsured (or self-pay) individual may need
multiple physical therapy visits that would occur outside of the period
of care for a surgical procedure). These interim final rules establish
at 45 CFR 149.610(b)(1)(x) that the convening provider or facility may
issue a single good faith estimate for recurring primary items or
services if certain requirements are met. The good faith estimate for
recurring items or services must include in a clear and understandable
manner the expected scope of the recurring items or services (such as:
timeframes, frequency, and total number of recurring items or services)
in the good faith estimate. The scope of such a good faith estimate
must not exceed 12 months. If additional recurrences of furnishing such
items or services are expected beyond 12 months, a convening provider
or convening facility must provide an uninsured (or self-pay)
individual a new good faith estimate. Providers must also communicate
such changes (such as timeframes, frequency, and total number of
recurring items or services) upon delivery of the new good faith
estimate to help patients understand what has changed between the
initial good faith estimate and the new good faith estimate.
ii. Requirements for Co-Providers and Co-Facilities
Under these interim final rules at 45 CFR 149.610(b)(2)(i), a co-
provider or co-facility must submit, upon the request of the convening
provider or convening facility, good faith estimate information for
items or services that are reasonably expected to be furnished by the
co-provider or co-facility in conjunction with the primary item or
service (as specified under the content requirements discussed later in
this section of the preamble). Good faith estimate information
submitted by co-providers or co-facilities must be received by the
convening provider or facility no later than 1 business day after the
co-provider or co-facility receives the request. In addition, co-
providers and co-facilities must notify and provide new good faith
estimate information to a convening provider or convening facility if
the co-provider or co-facility anticipates any changes to the scope of
good faith estimate information previously submitted to a convening
provider or convening facility (such as anticipated changes to the
expected charges, items, services, frequency, recurrences, duration,
providers, or facilities). If any changes in the expected co-providers
or co-facilities represented in a good faith estimate occur less than 1
business day before that the item or service is scheduled to be
furnished, the replacement co-provider or co-facility must accept as
its good faith estimate of expected charges the good faith estimate for
the relevant items or services included in the good faith estimate for
the item or service being furnished that was provided by the replaced
provider or facility.
These interim final rules at 45 CFR 149.610(b)(2)(iv) also
establish that in the event that an uninsured (or self-pay) individual
separately schedules or requests a good faith estimate from a provider
or facility that would otherwise be a co-provider or co-facility, that
provider or facility is considered a convening provider or convening
facility for such item or service and must meet all requirements in
paragraphs (b)(1) and (c)(1) for issuing a good faith estimate to an
uninsured (or self-pay) individual.
4. Content of a Good Faith Estimate for an Uninsured (or Self-Pay)
Individual
In 45 CFR 149.610(c), these interim final rules establish
requirements for the content that must be included in a good faith
estimate that is issued to an uninsured (or self-pay) individual. As
discussed later in this section of the preamble, these interim final
rules at 45 CFR 149.610(c)(1) establish the elements that must be
included in the good faith estimate issued by the convening provider or
convening facility and 45 CFR 149.610(c)(2) establishes the content
requirements for good faith estimate information that must be submitted
by co-providers or co-facilities to the requesting convening provider
or convening facility.
Specifically, the good faith estimate issued by the convening
provider or convening facility to the uninsured (or self-pay)
individual must include:
Patient name and date of birth;
Description of the primary item or service in clear and
understandable language (and if applicable, the date the primary item
or service is scheduled);
Itemized list of items or services, grouped by each
provider or facility, reasonably expected to be provided for the
primary item or service, and items or services reasonably expected to
be furnished in conjunction with the primary item or service, for that
period of care including: (1) Those items or services reasonably
expected to be furnished by the convening provider or convening
facility, and (2) those items or services expected to be furnished by
co-providers or co-facilities;
Applicable diagnosis codes, expected service codes, and
expected charges associated with each listed item or service;
Name, NPI, and TIN of each provider or facility
represented in the good faith estimate, and the state(s) and office or
facility location(s) where the items or services are expected to be
furnished by such provider or facility;
List of items or services that the convening provider or
convening facility anticipates will require separate scheduling and
that are expected to occur before or following the expected period of
care for the primary item or service. The good faith estimate must
include a disclaimer directly above this list that states that separate
good faith estimates will be issued to an uninsured (or self-pay)
individual upon scheduling or upon request of the listed items or
services and that for items or services included in this list,
information such as diagnosis codes, service codes, expected charges
and provider or facility identifiers do not need to be included as that
information will be provided in separate good faith estimates upon
scheduling or upon request of such items or services; and include
instructions for how an uninsured (or self-pay) individual can obtain
good faith estimates for such items or services;
A disclaimer that informs the uninsured (or self-pay)
individual that there may be additional items or services the convening
provider or convening facility recommends as part of the course of care
that must be scheduled or requested separately and are not reflected in
the good faith estimate;
A disclaimer that informs the uninsured (or self-pay)
individual that the information provided in the good faith estimate is
only an estimate of items or services reasonably expected to be
furnished at the time the good faith estimate is issued to the
uninsured (or self-pay) individual and that actual items, services, or
charges may differ from the good faith estimate;
A disclaimer that informs the uninsured (or self-pay)
individual of their right to initiate the patient-provider dispute
resolution process if the actual billed charges are substantially in
excess of the expected charges included in the good faith estimate, as
specified in 45 CFR 149.620; this disclaimer must include instructions
for where an uninsured (or self-pay) individual can find information
about how to initiate the patient-provider dispute resolution
[[Page 56019]]
process and state that the initiation of the patient-provider dispute
resolution process will not adversely affect the quality of health care
services furnished to an uninsured (or self-pay) individual by a
provider or facility; and
A disclaimer that the good faith estimate is not a
contract and does not require the uninsured (or self-pay) individual to
obtain the items or services from any of the providers or facilities
identified in the good faith estimate.
Given that good faith estimate information submitted by co-
providers or co-facilities must be included as part of the good faith
estimate issued to the uninsured (or self-pay) individual, these
interim final rules establish under 45 CFR 149.610(d)(2) that good
faith estimate information submitted by co-providers or co-facilities
to convening providers or convening facilities must include:
Patient name and date of birth;
An itemized list of items or services expected to be
provided by the co-provider or co-facility that are reasonably expected
to be furnished in conjunction with the primary item or service as part
of the period of care;
Applicable diagnosis codes, expected service codes, and
expected charges associated with each listed item or service;
Name, NPI, and TIN of the co-provider or co-facility, and
the state(s) and office or facility location(s) where the items or
services are expected to be furnished by the co-provider or co-
facility; and
A disclaimer that the good faith estimate is not a
contract and does not require the uninsured (or self-pay) individual to
obtain the items or services from any of the providers or facilities
identified in the good faith estimate.
HHS expects that these requirements, along with the required
methods and format for providing good faith estimates (see 45 CFR
149.610(e)) will result in good faith estimates that inform uninsured
(or self-pay) individuals about the expected charges for the primary
item or service, including the items or services reasonably expected to
be furnished in conjunction with the primary item or service during a
period of care.
The itemized list of items or services contained in a good faith
estimate to an uninsured (or self-pay) individual must reflect the
expected charges from the convening provider or facility and co-
providers or co-facilities during a period of care. As discussed
earlier, these interim final rules define a ``period of care'' as the
day or multiple days during which the good faith estimate for scheduled
or requested items or services (or a set of items or services) are
furnished or are anticipated to be furnished, regardless of whether the
convening provider or convening facility or co-providers or co-
facilities are furnishing such items or services, and also includes the
period of time during which any facility equipment and devices,
telemedicine services, imaging services, laboratory services, and
preoperative and postoperative services that would not be scheduled
separately by the individual, are furnished. It is the intent of this
definition of ``period of care'' to clarify that the good faith
estimate should include all of the items or services that are typically
scheduled as part of a primary item or service for which an individual
does not need to engage in additional scheduling.
These interim final rules also establish at 45 CFR
149.610(c)(1)(vi) that in instances where a convening provider or
convening facility anticipates that certain items or services will need
to be separately scheduled (such as those items or services typical of
the standard of care), the convening provider or facility must include
a separate list of items or services that the convening provider or
facility anticipates will require separate scheduling and that are
expected to occur either prior to or following the expected period of
care for the primary item or service. Additionally, the good faith
estimate must include a disclaimer directly above this list that
notifies the uninsured (or self-pay) individual that: (1) Separate good
faith estimates will be issued to an uninsured (or self-pay) individual
upon scheduling of the listed items or services or upon request; and
(2) for items or services included in this list, information such as
diagnosis codes, service codes, expected charges, and provider or
facility identifiers may not be included as that information will be
provided in separate good faith estimates upon scheduling of such items
or services or upon request; and (3) include instructions for how an
uninsured (or self-pay) individual can obtain good faith estimates for
such items or services.
HHS also considered requiring that the good faith estimate include
contact information for a provider's or facility's financial assistance
office. HHS seeks comment on whether or not such information should be
required on the good faith estimate.
HHS understands the value in having one good faith estimate that
includes all items or services furnished prior to, as part of, and
following the primary item or service, regardless of whether the items
or services must be separately scheduled. HHS also understands that
including all this information in one good faith estimate could
potentially be helpful in allowing an uninsured (or self-pay)
individual to fully understand their anticipated costs. However, HHS
also appreciates the complexity in obtaining such information by a
convening provider or convening facility, as the convening provider or
convening facility may not be privy to or be able to reasonably predict
which additional providers or facilities an uninsured (or self-pay)
individual may choose to engage with outside of the period of care for
the primary item or service. HHS seeks comment on whether the good
faith estimate content should be expanded to include additional
information and expected charges for items or services that are
anticipated to be furnished prior to or following the period of care
for the primary item or service but require separate scheduling by the
uninsured (or self-pay) individual. HHS is particularly interested in
the benefits, challenges, and resources that could facilitate provision
of good faith estimates that include items or services beyond the
period of care for the scheduled or requested primary items or
services.
HHS provides the following example for illustrative purposes only
and notes that this example should not be considered or construed to be
comprehensive or applicable to any specific individual or set of
circumstances. In the instance of a knee surgery, a good faith estimate
could include an itemized list of items or services in conjunction with
and including the actual knee surgery (such as physician professional
fees, assistant surgeon professional fees, anesthesiologist
professional fees, facility fees, prescription drugs, and durable
medical equipment fees) that occur during the period of care. An
individual would not typically schedule days in the hospital post-
procedure separately from scheduling the primary service of a knee
surgery. HHS would therefore expect that all the items or services that
are reasonably expected to be provided from admission through discharge
as part of that scheduled knee surgery, from all physicians,
facilities, or providers be included in the good faith estimate.
Additionally, in this illustrative example, a provider or facility
would furnish separate good faith estimates upon scheduling or upon
request for any items or services that are necessary prior to or
following provision of the
[[Page 56020]]
primary item or service beyond the period of care. Examples could
include certain pre-operative or post-operative items or services that
are not typically scheduled during the period of care for the knee
surgery, such as certain laboratory tests or post-discharge physical
therapy as discussed earlier.
HHS acknowledges that unforeseen factors could occur during the
course of treatment, which could involve additional services, resulting
in higher actual billed charges after receipt of care than was
anticipated at the time the good faith estimate was provided to the
uninsured (or self-pay) individual. These interim final rules do not
require the good faith estimate to include charges for unanticipated
items or services that are not reasonably expected and that could occur
due to unforeseen events.
HHS expects that providers and facilities will use the coding that
best describes the item or service for each item or service listed in
the good faith estimate. When a single service code is available that
captures reporting and billing for the component parts of an item or
service, the single service code and expected charge for that single
service code would be reported in the good faith estimate to capture
the most comprehensive coding level; the component parts would not be
included in the good faith estimate as they would not be separately
reported or billed. For example, CPT code 85027 (complete (CBC),
automated (Hgb, Hct, RBC, WBC and platelet count)) represents a
laboratory test that measures a patient's hematocrit, hemoglobin, red
blood cell count, leukocyte (white blood cell) counts, and platelet
count. There are also individual CPT codes for each of the component
parts of the service represented by CPT code 85027 (CPT codes: 85014
(hematocrit (Hct)), 85018 (hemoglobin (Hgb)), 85041 (red blood cell
(RBC), automated), 85048 (leukocyte (WBC), automated), and 85049
(platelet, automated)). However, HHS expects that the good faith
estimate would include expected charges for CPT code 85027, not
expected charges for each component part since there is a single CPT
code available that better captures reporting for all of the component
parts of the laboratory service.\65\
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\65\ CPT codes and descriptions are copyright 2020 American
Medical Association. All Rights Reserved. CPT is a registered
trademark of the American Medical Association (AMA).
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Items or services included in the good faith estimate must be
itemized (by each applicable service code), and clearly grouped and
displayed as corresponding to the respective provider or facility that
is expected to furnish those items or services. For each provider or
facility represented in the good faith estimate, the total amount of
expected charges must be included and displayed. HHS is of the view
that certain identifying information (such as the provider's or
facility's NPI and TIN) must be included in the good faith estimate to
ensure that each provider or facility is accurately identified,
particularly in instances where more than one provider or facility have
the same name, but are separate and distinct entities for purposes of
billing for items or services.
Chart 1 provides a visual example of how itemized lists of expected
items or services could be displayed in the good faith estimate as
suggested in the HHS model notice. HHS notes that this example is
included for demonstration purposes only, is not required, and is not a
mandatory or standardized format. HHS seeks comment on options for
displaying and methods for standardizing the formatting for the
itemized lists of items or services, and the required disclaimers. HHS
also seeks comment regarding the potential benefits and challenges of
using a standardized form that could serve as a base for good faith
estimates issued to uninsured (or self-pay) individuals. As uninsured
(or self-pay) individuals may be unfamiliar with reading and
understanding itemized lists of items or services typically charged for
by providers or facilities, HHS seeks comment regarding whether the
notice should be required to include additional information to explain
concepts such as itemized lists of items or services, content within
the required disclaimers, or other information included within the good
faith estimate. HHS is also interested in information regarding
publicly available methods for displaying required information in good
faith estimates in a clear and understandable manner.
Chart 1--Example of How Itemized Lists of Expected Items or Services Could Be Displayed in a Good Faith Estimate for Uninsured (or Self-Pay) Individuals
Details of Services and Items for [Provider/Facility 1]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Address where service/
Service/item item will be provided Diagnosis code Service code Quantity Expected cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
[Street, City, State, [ICD code].............. [Service Code Type: ................. .................
ZIP]. Service Code Number].
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Expected Charges from [Provider/Facility 1] ................. $
--------------------------------------------------------------------------------------------------------------------------------------------------------
Additional Health Care Provider/Facility Notes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Details of Services and Items for [Provider/Facility 2]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Address where service/
Service/item item will be provided Diagnosis code Service code Quantity Expected cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
[Street, City, State, [ICD code].............. [Service Code Type: ................. .................
ZIP]. Service Code Number].
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 56021]]
Total Expected Charges from [Provider/Facility 1] ................. $
--------------------------------------------------------------------------------------------------------------------------------------------------------
Additional Health Care Provider/Facility Notes
--------------------------------------------------------------------------------------------------------------------------------------------------------
5. Required Methods for Providing Good Faith Estimates for Uninsured
(or Self-Pay) Individuals
In 45 CFR 149.610(e), these interim final rules establish required
methods for providing good faith estimates to uninsured (or self-pay)
individuals. Consistent with statutory requirements, these interim
final rules establish at 45 CFR 149.610(e)(1) that the good faith
estimate must be provided in written form either on paper or
electronically (for example, electronic transmission of the good faith
estimate through the convening provider's patient portal or electronic
mail), pursuant to the uninsured (or self-pay) individual's requested
method of delivery, and within the timeframes specified under 45 CFR
149.610(b). For good faith estimates provided electronically, the good
faith estimate must be provided in a manner that the uninsured (or
self-pay) individual can both save and print, and must be provided and
written using clear and understandable language and in a manner
calculated to be understood by the average uninsured (or self-pay)
individual.\66\
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\66\ For additional resources, see Federal Plain Language
Guidelines at https://www.plainlanguage.gov/guidelines/.
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HHS notes that the good faith estimate is necessary for initiating
the patient-provider dispute resolution process under 45 CFR 149.620,
and thus must be issued in written form. Additionally, 45 CFR
149.610(e)(2) of these interim final rules establishes that to the
extent that an uninsured (or self-pay) individual requests a good faith
estimate be provided other than by paper or electronically (for
example, by phone or orally in person), the convening provider or
facility may orally discuss the information included in the good faith
estimate. However, in order to meet the requirements of this section,
the convening provider or convening facility must issue the good faith
estimate in written form. The good faith estimate may be provided to an
uninsured (or self-pay) individual's authorized representative instead
of the individual, to the extent not prohibited under state law. HHS
notes that authorized representatives from state Consumer Assistance
Programs (CAPs) or legal aid organizations may also be resources for
assisting individuals with good faith estimates. HHS recognizes and
notes that similar discussions related to authorized representatives
(and communication needs of underserved populations discussed elsewhere
in this preamble) were also discussed in the July interim final rules.
These interim final rules adopt similar standards for authorized
representatives as the July 2021 interim final rules, with amendments
to account for concepts that are not relevant to uninsured (or self-
pay) individuals such as removing references to nonparticipating
providers, participants, beneficiaries and enrollees.
In interpreting the statutory requirements regarding the use of
clear and understandable language, HHS recognizes that communication,
language, and literacy barriers are associated with decreased quality
of care, poorer health outcomes, and increased utilization.\67\ The use
of appropriate language services and appropriate literacy levels in
health care settings is associated with increased quality of care,
improved patient safety outcomes, and lower utilization of costly
medical procedures.\68\ HHS is of the view that it is imperative that
providers and facilities make these efforts to provide good faith
estimate information in a manner understandable to the uninsured (or
self-pay) individual to help achieve the goal of the statute and ensure
that uninsured (or self-pay) individuals are aware of the good faith
estimate information and the options available to them. HHS is of the
view that when providing a good faith estimate, providers or facilities
should also take into account any vision, hearing, or language
limitations; communication needs of underserved populations;
individuals with limited English proficiency; and persons with health
literacy needs. These factors meaningfully contribute to whether the
uninsured (or self-pay) individual can understand and ask any questions
about the total expected costs for items or services.
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\67\ Flores G. Language barriers to health care in the United
States. N Engl J Med 2006; 355:229-231.
\68\ Id.
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Providers and facilities are also required to comply with other
state and Federal laws regarding language access, to the extent
applicable. HHS reminds providers and facilities that are recipients of
Federal financial assistance that they must comply with Federal civil
rights laws that prohibit discrimination. These laws include Section
1557 of the Patient Protection and Affordable Care Act,\69\ Title VI of
the Civil Rights Act of 1964,\70\ and Section 504 of the Rehabilitation
Act of 1973.\71\ Section 1557 and Title VI require covered entities to
take reasonable steps to ensure meaningful access to individuals with
limited English proficiency, which may include provision of language
assistance services such as providing qualified interpreters, written
or sight translation of written good faith estimates in paper or
electronic form into languages other than English. When language
assistance services are provided, they must be provided free of charge
and be accurate and timely. Section 1557 and Section 504 require
covered entities to take appropriate steps to ensure effective
communication with individuals with disabilities, including provision
of appropriate auxiliary aids and services in a timely manner and free
of charge to the individual. Auxiliary aids and services may include
sign language interpreters, large print materials, accessible
information and communication technology, open and closed captioning,
and other aids or services for persons who are blind or have low
vision, or who are deaf or hard of hearing. Information provided
through information and communication technology also must be
accessible to individuals with disabilities, unless certain exceptions
apply.
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\69\ 42 U.S.C. 18116.
\70\ 42 U.S.C. 2000d et seq.
\71\ 29 U.S.C. 794.
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HHS seeks comment from persons in and representatives of racial/
ethnic
[[Page 56022]]
minority and underserved communities, including those with limited
English proficiency and those with disabilities who require information
in alternate and accessible formats, lesbian, gay, bisexual,
transgender, and queer (LGBTQ+) persons, and stakeholders who serve
such communities, on whether the provisions and protections related to
communication, language, and literacy sufficiently address barriers
that exist to ensuring all individuals can read, understand, and
consider their options related to good faith estimates. HHS also seeks
comment on how to best provide additional help and resources for these
individuals, including state CAPs, legal services or other aid that may
help patients with good faith estimates. HHS also seeks comment on
additional or alternate policies HHS may consider to help address and
remove such barriers. In furtherance of the goal of reducing
disparities in health care and coverage, HHS intends to analyze data
related to individuals' use of the patient-provider dispute resolution
process described under 45 CFR 149.620, as added by PHS Act section
2799B-7, and the appeals process described under 45 CFR 147.136, as
added by PHS Act section 2719, to understand where barriers to coverage
or accessible information persist. HHS is seeking comment on how to use
data related to these two processes to understand, analyze, and address
continued disparities.
HHS is seeking comment on how the required methods for providing a
good faith estimate to uninsured (or self-pay) individuals established
under 45 CFR 149.610 may affect small or rural providers or facilities.
HHS is particularly interested in whether there are alternatives to
these interim policies that HHS could consider for potential future
rulemaking that could meet the statutory requirements for provision of
good faith estimates to uninsured (or self-pay) individuals.
6. Additional Compliance Provisions
HHS is of the view that compliance provisions (established at 45
CFR 149.610(f) of these interim final rules) are necessary to ensure
that providers and facilities have taken reasonable steps to ensure the
accuracy of the information included in a good faith estimate. These
interim final rules further clarify in 45 CFR 149.610(e)(1) that a good
faith estimate issued to an uninsured (or self-pay) individual is
considered part of the patient's medical record and must be maintained
in the same manner as a patient's medical record, and that convening
providers and facilities must provide a copy of any previously issued
good faith estimate furnished within the last 6 years to an uninsured
(or self-pay) individual upon the request of the uninsured (or self-
pay) individual.
While HHS acknowledges that some states have existing state laws
related to the furnishing of good faith estimates, HHS is of the view
that uninsured (or self-pay) individuals should still have access to a
good faith estimate that meets the minimum requirements established in
these interim final rules. Therefore at 45 CFR 149.610(f)(2) these
interim final rules establish that providers or facilities that issue
good faith estimates under state processes that do not meet the minimum
requirements under this section fail to comply with the requirements of
45 CFR 149.610.
In circumstances in which a provider or facility, acting in good
faith, makes an error or omission in a good faith estimate, HHS is
establishing at 45 CFR 149.610(f)(3) that a provider or facility will
not fail to comply with this section solely because, despite acting in
good faith and with reasonable due diligence, the provider or facility
makes an error or omission in a good faith estimate required under this
section, provided that the provider or facility corrects the
information as soon as practicable. However, if the services are
furnished before the error in the good faith estimate is addressed, the
provider or facility may be subject to patient-provider dispute
resolution if the billed charges are substantially in excess of the
good faith estimate (as described in 45 CFR 149.620).
Additionally, to the extent compliance with this section requires a
provider or facility to obtain information from any other entity or
individual, these interim final rules specify at 45 CFR 149.610(f)(4)
that the provider or facility will not fail to comply with this section
because it relied in good faith on the information from the other
entity, unless the provider or facility knows, or reasonably should
have known, that the information is incomplete or inaccurate. HHS notes
that providers and facilities (including convening providers, convening
facilities, co-providers or co-facilities) who experience other
providers' or facilities' failures to comply with the requirements in
these interim final rules may file a complaint for enforcement
investigation under 45 CFR 149.450. If the provider or facility learns
that the information is incomplete or inaccurate, the provider or
facility must provide corrected information to the uninsured (or self-
pay) individual as soon as practicable, and as noted above, may be
subject to patient-provider dispute resolution if items or services
furnished before a corrected good faith estimate could be issued to an
uninsured (or self-pay) individual.
7. Applicability of the Good Faith Estimate Requirements
These interim final rules establish under 45 CFR 149.610(g)(1) that
the requirements of this section are applicable for good faith
estimates requested on or after January 1, 2022 by uninsured (or self-
pay) individuals or for good faith estimates required to be provided to
uninsured (or self-pay) individuals in connection with items or
services scheduled on or after January 1, 2022. HHS recognizes that
some providers or facilities may need to establish efficient and secure
communication channels for transmission of good faith estimate
information between convening providers or facilities and co-providers
and co-facilities. While HHS notes that there are longstanding
established standards for data exchange between providers established
under HIPAA,\72\ HHS is seeking comment on any existing challenges
related to secure transmission of good faith estimate information
between providers and facilities. HHS is also interested in whether
publicly available standardized processes exist or could be developed
that would facilitate and support efficient and timely transmission of
good faith estimate information. HHS also seeks comments on how the
Hospital Price Transparency requirements for hospitals to display
standard charges in a consumer-friendly manner (45 CFR 180.60), and,
specifically, the voluntary use of online price estimator tools (45 CFR
180.60(a)(2)), may be leveraged to provide a good faith estimate under
these final rules. HHS also seeks comments on whether there are other
opportunities for the convening provider to use the Hospital Price
Transparency machine-readable file requirements (45 CFR 180.50) to
inform good faith estimates with expected charges of co-providers or
co-facilities from the comprehensive machine-readable files, whether or
not the comprehensive machine-readable files can assist uninsured (or
self-pay) individuals in determining if the good faith estimate charges
are reasonable and/or accurate, and what limitations exist in using the
comprehensive machine-readable files for purposes of
[[Page 56023]]
meeting the requirements of this section for provision of the good
faith estimates to uninsured (or self-pay) individuals. General
information regarding relevant interoperability or data exchange
standards would also be of interest.
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\72\ https://www.cms.gov/regulations-and-guidance/administrative-simplification/hipaa-aca.
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These interim final rules at 45 CFR 149.610(g)(2) establish that
nothing in 45 CFR 149.610 alters or otherwise affects a provider's or
facility's duty to comply with requirements under other applicable
state or Federal laws, including those governing the accessibility,
privacy, or security of information required to be disclosed under this
section, or those governing the ability of properly authorized
representatives to access uninsured (or self-pay) individuals'
information held by providers or facilities, except to the extent a
state law prevents the application of this section.
HHS understands that it may take time for providers and facilities
to develop systems and processes for receiving and providing the
required information from co-providers and co-facilities. Therefore,
for good faith estimates provided to uninsured (or self-pay)
individuals from January 1, 2022 through December 31, 2022, HHS will
exercise its enforcement discretion in situations where a good faith
estimate provided to an uninsured (or self-pay) individual does not
include expected charges from co-providers or co-facilities. HHS notes
that nothing prohibits a co-provider or co-facility from furnishing the
information before December 31, 2022, and nothing would prevent the
uninsured (or self-pay) individual from separately requesting a good
faith estimate directly from the co-provider or co-facility, in which
case the co-provider and co-facility would be required to provide the
good faith estimate for such items or services. Otherwise during this
period, HHS encourages convening providers and convening facilities to
include a range of expected charges for items or services reasonably
expected to be provided and billed by co-providers and co-facilities.
To the extent states are the primary enforcer of these requirements,
HHS encourages states to take a similar approach, and will not consider
a state to be failing to substantially enforce these requirements if it
takes such an approach from January 1, 2022 through December 31, 2022.
8. Applicability of Requirements to Notices Provided Under 45 CFR
149.420
The July 2021 interim final rules included provisions at 45 CFR
149.420(d) establishing the information that must be included in a
written notice, if a non-participating provider or non-participating
emergency facility seeks to obtain consent from a participant,
beneficiary, or enrollee (or their authorized representative) to waive
the balance bill protections. Specifically, the written notice must be
provided in a form and manner specified by HHS in guidance, and must,
among other things, include the good faith estimated amount that such
nonparticipating provider may charge the participant, beneficiary, or
enrollee for the items and services involved (including any item or
service that is reasonably expected to be furnished by the
nonparticipating provider in conjunction with such items or services).
In the July 2021 interim final rules, HHS stated that in calculating
the good faith estimated amount required to be included in the notice
under 45 CFR 149.420(d)(2), the provider or facility is expected to
apply the same process and considerations used to calculate the good
faith estimate that is required under PHS Act section 2799B-6(2).
HHS recognizes that providers and facilities have some discretion
in the assumptions that they make regarding which items or services to
include in a good faith estimate, and that some natural variation may
occur across providers and facilities in terms of which items or
services they would include in an estimate. However, HHS is of the view
that it is critical for providers and facilities to apply the same
process and considerations in developing the good faith estimate
required under PHS Act section 2799B-6(2) (as partially implemented in
these interim final rules at 45 CFR 149.610) as in 45 CFR 149.420(d)(2)
to avoid consumers receiving two different estimates describing care
from the same provider or facility for the same care.\73\
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\73\ For individuals who are seeking to submit a claim to their
plan or coverage, the second estimate would be sent to the plan or
issuer and used to develop the advanced explanation of benefits
required to be provided under Code section 9816(f), ERISA section
716(f), and PHS Act section 2799A-1(f). As discussed previously, the
Departments will defer enforcement of these requirements until the
Departments have issued rulemaking regarding the requirements. The
Departments recognize that participants, beneficiaries, and
enrollees would not receive a second estimate (in the advanced
explanation of benefits) from their plan or issuer until this
rulemaking goes into effect.
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Under 45 CFR 149.610, the ``expected charge'' for an item or
service may vary depending on whether the good faith estimate is being
provided to an uninsured (or self-pay) individual, or to a plan or
issuer. HHS clarifies that the good faith estimate in the notice
described in 45 CFR 149.420(c) must be developed using the definition
of the expected charge that would apply when the good faith estimate is
provided to a plan or issuer (that is, the amount the provider or
facility would expect to charge if the provider or facility intended to
bill a plan or issuer directly for such item or service). Because the
notice in 45 CFR 149.420(c) would only be provided with respect to
individuals enrolled in a group health plan or health insurance
coverage, HHS is of the view that requiring the good faith estimate to
align with the good faith estimate that would be provided under PHS Act
section 2799B-6(2)(A) to a plan or issuer will help to avoid situations
in which participants, beneficiaries, or enrollees subsequently receive
an advanced explanation of benefits from their plan or issuer that is
generated from a different estimate than the one provided in the
notice, or in which participants, beneficiaries, or enrollees receive
differing estimates regarding notice and consent under 45 CFR
149.420(d)(2) and regarding self-pay liability under 45 CFR 149.610. In
instances where an individual receives a notice with a good faith
estimate reflecting the amount that would be billed to a plan or issuer
but intends to self-pay and the item or service is scheduled in
advance, the individual would separately receive a good faith estimate
reflecting the amount they would be charged as a self-pay individual
under the requirements in 45 CFR 149.610. HHS acknowledges that the
Departments are not codifying requirements regarding PHS Act section
2799B-6(2)(A), which requires providers and facilities to furnish good
faith estimates to plans or issuers, and that HHS will defer
enforcement of this requirement until rulemaking is effective to fully
implement this requirement. That non-enforcement position does not
extend to the requirement to provide a good faith estimate as part of
the notice under 45 CFR 149.420(c). However, HHS seeks comment on
whether providers and facilities should be allowed to calculate the
good faith estimate under 45 CFR 149.420(d)(2) using the expected
charge applicable to an uninsured (or self-pay) individual until such
rulemaking occurs. HHS also seeks comment on whether it would be
feasible for providers and facilities to provide an estimate or range
of estimated costs for insured consumers upon request during this
period of non-enforcement.
HHS recognizes that the good faith estimates required under 45 CFR
149.420(d)(2) and 45 CFR 149.610 may also differ if items or services
from different provider(s) or facilities are included in the estimate.
For example,
[[Page 56024]]
an estimate required in the notice under 45 CFR 149.420(d)(2) would
only include items or services provided by a nonparticipating provider
that seeks to obtain consent to balance bill. In contrast, the good
faith estimate required under these interim final rules would not be
limited to items or services furnished by such providers. However, HHS
expects that the estimates regarding items or services provided by a
specific provider or facility in the notice provided under 45 CFR
149.420(c) would include the same items or services for that specific
provider or facility as the good faith estimate provided under 45 CFR
149.610. Although the grand total of a good faith estimate under each
of the two rules might differ depending on the number of providers
furnishing estimates as part of one good faith estimate, HHS is of the
view that the requirements in each of the two rules generally take into
account the same process and considerations for calculating the good
faith estimate.
B. Patient-Provider Dispute Resolution
1. Scope
PHS Act section 2799B-7 directs the Secretary of HHS to establish a
process called a patient-provider dispute resolution process. Under
this process an uninsured (or self-pay) individual who received a good
faith estimate of the expected charges for an item or service, pursuant
to PHS Act section 2799B-6, implemented at 45 CFR 149.610, may seek a
determination from an SDR entity for the amount to be paid by the
uninsured (or self-pay) individual to the provider or facility for such
item or service. Uninsured (or self-pay) individuals are eligible for
the patient-provider dispute resolution process after being furnished
an item or service for which they received a good faith estimate if the
individual is billed, by the provider or facility, charges that are
substantially in excess of the good faith estimate.
HHS is adding new 45 CFR 149.620 to implement this patient-provider
dispute resolution process. These interim final rules include specific
definitions related to the patient-provider dispute resolution process;
specify the items and services eligible for the process; establish
requirements for what uninsured (or self-pay) individuals must provide
to initiate the process; and specify the information providers and
facilities must provide to an SDR entity to inform payment
determinations. These interim final rules also establish requirements
for SDR entities contracted to resolve the patient-provider dispute,
including how SDR entities determine the payment amount, and
certification standards that HHS will consider when contracting with
SDR entities. These interim final rules also specify the administrative
fee associated with the patient-provider dispute resolution process,
and the minimum requirements for state patient-provider dispute
resolution processes to operate in place of the Federal patient-
provider dispute resolution process.
2. Definitions
For purposes of these interim final rules, the definitions under 45
CFR 149.610 apply. Definitions related to confidentiality set forth in
Sec. 149.510(a)(2), including the definitions for breach, individually
identifiable health information (IIHI), and unsecured IIHI also apply
to this section. These interim final rules also define three additional
terms: ``billed charge,'' ``substantially in excess,'' and ``total
billed charges'' under new 45 CFR 149.620(a)(2).
These interim final rules define ``billed charge'' to mean the
amount billed by a provider or facility for an item or service. These
interim final rules define ``total billed charges'' to mean the total
of billed charges, by a provider or facility, for all primary items or
services and all other items or services furnished in conjunction with
the primary items or services to an uninsured (or self-pay) individual,
regardless of whether such items or services were included in the good
faith estimate.
These interim final rules define the term ``substantially in
excess'' to mean with respect to the total billed charges by a provider
or facility, an amount that is at least $400 more than the total amount
of expected charges for the provider or facility listed on the good
faith estimate. In defining ``substantially in excess,'' HHS notes that
PHS Act section 2799B-7 does not include a definition for
``substantially in excess.'' HHS reviewed other uses of the term in
existing Federal law. For example, section 1128(b)(6) of the Social
Security Act provides that the Secretary of HHS may exclude any
individual or entity from participation in any Federal health care
program if the Secretary determines that the individual or entity
submitted bills or requests for payment (where such bills or requests
are based on charges or cost) under title XVIII of the Social Security
Act or a state health care program containing charges (or, in
applicable cases, requests for payment of costs) for items or services
furnished substantially in excess of such individual's or entity's
usual charges (or, in applicable cases, substantially in excess of such
individual's or entity's costs) unless the Secretary finds there is
good cause for such bills or requests containing such charges or costs.
However, HHS notes that section 1128(b)(6) of the Social Security Act
similarly does not include a definition for ``substantially in
excess.'' Regardless, HHS is of the view that the term ``substantially
in excess'' as used in PHS Act section 2799B-7 should be distinguished
from the language of section 1128(b)(6) of the Social Security Act, as
the provisions operate differently. Specifically, PHS Act section
2799B-7 specifies that an uninsured (self-pay) individual is eligible
to seek a payment determination regarding the amount to be paid when
the total billed charges substantially exceed the total expected
charges in the good faith estimate. HHS is of the view that such a
process should provide clear criteria that would make it easy for
uninsured (or self-pay) individuals, providers, facilities, SDR
entities, and HHS to determine eligibility for dispute resolution. HHS
is also of the view that such eligibility criteria should be based on
objective factors that are known in advance and are simple for
providers, facilities, and uninsured (or self-pay) individuals to
understand, which will reduce uncertainty over which items or services
are subject to dispute resolution and which are not.
HHS considered establishing a definition for ``substantially in
excess'' to mean that the total billed charges are greater than the
total expected charges in the good faith estimate by a percentage of
the total expected charges in the good faith estimate (for example, 20
percent of the total expected charges). However, HHS is mindful of the
limitations in relying on percentages for determining the threshold of
eligibility for dispute resolution. In particular, when using
percentages, the dollar thresholds would vary significantly based on
the magnitude of the expected charges in the good faith estimate. For
example, if for an item or service, the expected charge in the good
faith estimate is $300, 20 percent would equal $60, meaning the billed
charges would need to equal or exceed $360 to be eligible for dispute
resolution. However, if for an item or service, the expected charge in
the good faith estimate is $25,000, the difference between the billed
charge and the expected charge in the good faith estimate would need to
be $5,000 or greater to be eligible for dispute resolution. In other
words, basing the definition of ``substantially in excess'' on a
percentage of the total expected
[[Page 56025]]
charges in the good faith estimate would make dispute resolution easier
to access in cases where the associated dollar amounts are small.
Conversely, in cases where the associated dollar amounts are very
large, the threshold would be significantly larger in terms of dollars
and more difficult for the claims to meet, which could result in many
uninsured (or self-pay) individuals being unable to access dispute
resolution despite receiving bills for items or services in amounts far
greater, in absolute value, than the expected charges in the good faith
estimate.
To address these limitations, HHS considered alternative approaches
that included defining ``substantially in excess'' to mean that the
total billed charges are greater than the total expected charges in the
good faith estimate by the lesser of a percentage of the total expected
charges in the good faith estimate or a flat maximum dollar amount.
While this approach would mitigate concerns over higher cost items and
services meeting the ``substantially in excess'' threshold, it would
not address concerns over the uninsured (or self-pay) individual being
easily able to bring dispute resolution claims for lower cost items or
services. HHS is concerned that under such an approach, dispute
resolution for lower cost items or services could be overused, thus
potentially increasing costs for providers and facilities which could
be passed on to individual consumers in the form of higher prices.
Similarly, HHS considered defining ``substantially in excess'' to
mean an amount that is the greater of either a percentage of the total
expected charges in the good faith estimate or a flat minimum dollar
amount. By specifying a flat minimum dollar threshold amount, such an
approach would address concerns over overuse of the patient-provider
dispute resolution process for items or services at the lower end of
costs. However, HHS remains concerned that such an approach could
effectively put dispute resolution out of reach for uninsured (or self-
pay) individuals in situations where the total expected charges for
items or services are high, particularly for those who need to undergo
more complex procedures. As an example, under this approach, when the
total billed charges must be either equal to or greater than a flat
minimum amount or predefined percentage above the expected charges, if
the applicable flat amount is $400 and the applicable percentage of the
expected charges in the good faith estimate were equal to 10 percent,
total expected charges of $25,000 would mean the total billed charges
must exceed the total expected charges in the good faith estimate by
$2,500 or more in order to access dispute resolution. If, in this
example, the total billed charges are less than $27,500, the uninsured
(or self-pay) individual would be unable to resolve the unexpected bill
using the patient-provider dispute resolution process. Even for
individuals with sufficient savings or income, such a threshold would
likely pose a major financial burden, and such a situation would be
exacerbated for lower income individuals and those who lack sufficient
savings. HHS is of the view that whether an individual needs to receive
a high cost item or service is independent from an individual's income
or assets or coverage status, and basing the definition of
``substantially in excess'' for the purposes of eligibility for the
patient-provider dispute resolution process on the expected charges of
an item or service without any consideration for the financial means of
the uninsured (or self-pay) individual would create a massive gap in
the consumer protections intended under PHS Act section 2799B-7. To
provide another example, suppose an uninsured (or self-pay) individual
has total expected charges in the good faith estimate equal to $2,100
and the ``substantially in excess'' standard is the greater of 10% of
the total expected charges in the good faith estimate or $400. Under
such a definition, the substantially in excess threshold would be $400,
and if the total billed charges are $2,500 or greater, then the items
or services are eligible for dispute resolution. Now, consider another
uninsured (or self-pay) individual with total expected charges of
$21,000; in this uninsured (or self-pay) individual's case, the total
billed charges would need to exceed the total expected charges in the
good faith estimate by $2,100 or more in order to be eligible for
dispute resolution. The uninsured (or self-pay) individual with
expected charges of $21,000 is in no less need of protection from
surprise medical bills than the uninsured (or self-pay) individual with
expected charges of $2,100, but in practice such individual would more
likely be unable to access these important protections intended by the
patient-provider dispute resolution due to the higher threshold.
HHS also considered a tiered percentage approach in which lower-
cost services must exceed a higher percentage value, with a lower
percentage value applicable for higher-cost items or services. However,
HHS is of the view that such an approach would add undue complexity to
the patient-provider dispute resolution process in determining whether
items or services meet the ``substantially in excess'' threshold and
would present the same concerns previously described. HHS also
considered basing the definition of ``substantially in excess'' on
billed charges that exceed a certain percentile for the same or similar
services using an independent database. However, such a mechanism
appears inconsistent with the statute, which contemplates costs for
items or services to be determined ``substantially in excess'' based on
the good faith estimate provided, rather than based on a specific
benchmark, such as an independent database.
HHS is of the view that basing the definition of ``substantially in
excess'' on a flat dollar amount, such as $400, allows for a
straightforward way to calculate the eligibility of an item or service
for patient-provider dispute resolution, and reduces the concerns
described earlier regarding lower-cost items or services too easily
meeting the eligibility threshold for dispute resolution and making it
more difficult for higher-cost items and services to meet the
eligibility threshold. HHS acknowledges that such an approach may
result in situations in which the difference between the total billed
charges and the total expected charges in the good faith estimate is
small in relative terms but the item or service is eligible for dispute
resolution. As an example, if the expected charge for an item or
service in the good faith estimate is $100,000, basing ``substantially
in excess'' on a flat $400 threshold, a billed charge of $100,400 (0.4%
difference) or more would make the item or service eligible for dispute
resolution, which could be argued by some as not ``substantially in
excess.'' However, as discussed earlier in this section of the
preamble, HHS is of the view that while the definition of
``substantially in excess'' should encompass the difference between the
total billed charges and the total expected charges in the good faith
estimate, focusing solely on the expected costs of items or services
risks shutting out many uninsured (or self-pay) individuals from the
patient-provider dispute resolution process and undermines the intended
protections in PHS Act section 2799B-7. Additionally, even when the
total expected charges are high, a relatively small additional charge
may still create significant financial difficulties for the uninsured
(or self-pay) individual. HHS did consider whether to have different
flat dollar thresholds based on the
[[Page 56026]]
uninsured (or self-pay) individual's income, however, HHS is of the
view that such a policy would be confusing to uninsured (or self-pay)
individuals who would need to provide documentation to verify their
income, which increases the burdens placed on such individuals and
could pose a deterrent to participation. Based on consideration of the
different approaches discussed earlier in this section of the preamble,
HHS determined that the best approach for defining ``substantially in
excess'' would be to base it on a flat dollar difference between the
total billed charges and the total expected charges in the good faith
estimate.
Because HHS views the patient-provider dispute resolution process
established under PHS Act section 2799B-7 to be intended to protect
uninsured (or self-pay) individuals from unexpected higher health care
costs, it is appropriate to determine whether an amount is
substantially in excess based on the perspective of individuals who are
likely to be uninsured or underinsured, and not only the perspective of
the average individual or the provider or facility. To that end, HHS
looked to existing research to assess what amount Americans may
struggle to cover in unexpected expenses. HHS is of the view that
looking to Americans' ability to cover unexpected expenses is an
important consideration when establishing protections for unexpected
medical expenses, which remain a common unexpected expense for many. In
a 2016 survey, the Federal Reserve reported that 22 percent of
respondents experienced what they described as a major unexpected
medical expense that they had to pay out-of-pocket in the previous 12
months.\74\ Further, concerns over the potential costs of medical care
may result in many Americans choosing to forego needed care.\75\
Another recent study found that in 2020, 17.8 percent of individuals
had medical debt reported to a credit bureau, the study also found that
individuals collectively had greater medical debt in collections than
all forms of nonmedical debt combined (the authors defined nonmedical
debt as other sources of debt in collections, including credit cards,
personal loans, utilities, and phone bills).\76\
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\74\ Board of Governors of the Federal Reserve System, Report on
the Economic Well-Being of U.S. Households in 2015 (May 2016),
available at: https://www.federalreserve.gov/2015-report-economic-well-being-us-households-201605.pdf.
\75\ For example, 24 percent of adults went without some form of
medical care due to an inability to pay, down from 27 percent in
2017 and well below the 32 percent reported in 2013. Dental care was
the most frequently skipped treatment (17 percent), followed by
visiting a doctor (12 percent) and taking prescription medicines (10
percent). Board of Governors of the Federal Reserve System, Report
on the Economic Well-Being of U.S. Households in 2018 (May 2019),
available at: https://www.federalreserve.gov/publications/2019-economic-well-being-of-us-households-in-2018-dealing-with-unexpected-expenses.htm.
\76\ Kluender R., Mahoney N., Wong F., Yin W. Medical Debt in
the U.S., 2009-2020. JAMA. 2021;326(3):250-256. doi:10.1001/
jama.2021.8694.
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In 2019, the Federal Reserve found that nearly 4 in 10 adults would
have difficulty covering an emergency expense costing $400, with 12
percent of adults unable to pay their current month's bills if they
also had an unexpected $400 expense.\77\ The ability to cover an
unexpected expense also varies significantly by social risk and
demographic factors, for example, income, race, perceived health, and
depression.\78\ A 2016 survey by the Federal Reserve found that among
respondents with a family income under $40,000, only 34 percent
reported they would be able to pay an unexpected $400 expense using
cash or its functional equivalent (including money currently in their
checking/savings accounts, or available on a credit card that they
would pay in full at their next statement). In addition, the Federal
Reserve found that while 61 percent of non-Hispanic white respondents
said that they would pay for an unexpected $400 expense using cash or
its functional equivalent, for Hispanic and non-Hispanic black
respondents, only 38 percent and 36 percent respectively reported that
they would be able to pay for an unexpected $400 expense using cash or
its functional equivalent.\79\
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\77\ Board of Governors of the Federal Reserve System, Report on
the Economic Well-Being of U.S. Households in 2018 (May 2019),
available at: https://www.federalreserve.gov/publications/2019-economic-well-being-of-us-households-in-2018-dealing-with-unexpected-expenses.htm.
\78\ Board of Governors of the Federal Reserve System, Report on
the Economic Well-Being of U.S. Households in 2015 (May 2016),
available at: https://www.federalreserve.gov/2015-report-economic-well-being-us-households-201605.pdf.
\79\ Board of Governors of the Federal Reserve System, Report on
the Economic Well-Being of U.S. Households in 2015 (May 2016),
available at: https://www.federalreserve.gov/2015-report-economic-well-being-us-households-201605.pdf.
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Other surveys have found results that were consistent with the
Federal Reserve's findings. One such survey found that only 39 percent
of Americans would cover an unexpected $1,000 expense using their
savings.\80\ The same survey also found that this number varied
significantly with age and income, finding that only 33 percent of
those in the millennial generation and only 21 percent of those making
less than $30,000 per year would cover a hypothetical $1,000 expense
using savings.\81\ A survey by the Robert Wood Johnson Foundation found
that 67 percent of those making less than $35,000 per year reported
they would have difficulty paying off a hypothetical $1,000
expense.\82\ Research by the Pew Charitable Trust also found that 55
percent of Americans to be ``savings-limited, meaning they can replace
less than one month of their income through liquid savings.'' \83\ For
Americans at the bottom quintile of income, this amount is even less,
with the typical family having less than 2 weeks of income in
savings.\84\
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\80\ https://www.bankrate.com/banking/savings/financial-security-january-2021/.
\81\ https://www.bankrate.com/banking/savings/financial-security-january-2021/.
\82\ https://www.rwjf.org/en/library/research/2019/12/life-experiences-and-income-inequality-in-the-united-states.html.
\83\ https://www.pewtrusts.org/~/media/Assets/2015/01/
FSM_Balance_Sheet_Report.pdf.
\84\ https://www.pewtrusts.org/~/media/Assets/2015/01/
FSM_Balance_Sheet_Report.pdf.
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While research shows that some Americans are financially prepared
to cover unexpected costs, many Americans are unable to weather such
unexpected expenses.\85\ The Pew Charitable Trust found that more than
half of families that experienced a financial shock (such as an
unplanned expense or loss of income) reported having trouble making
ends meet, and this number increased for younger, minority, and low-
income households. The Pew Charitable Trust also found that households
that experienced such events typically had lower savings and higher
credit card debts than those that did not.\86\
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\85\ https://www.pewtrusts.org/~/media/assets/2015/10/emergency-
savings-report-1_artfinal.pdf.
\86\ https://www.pewtrusts.org/~/media/assets/2015/10/emergency-
savings-report-1_artfinal.pdf.
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While health care costs are not the only unexpected expenses people
face, they constitute a large source of surprise expenses. The Robert
Wood Johnson Foundation found that 38 percent of lower-income Americans
and 31 percent of middle-income Americans reported experiencing
significant problems with paying medical bills.\87\ Many Americans,
particularly those who are uninsured, report that they went without
needed care, or delayed care, due to costs. For example, the Federal
Reserve found that 38 percent of those with incomes below $40,000 went
without some form of medical care in 2019.\88\ Among uninsured
individuals,
[[Page 56027]]
47 percent went without some form of medical care due to concerns over
costs.\89\ Research reinforces the findings of the Federal Reserve and
indicates that additional risk factors such as perceived health and
depression increase an individual's likelihood of reporting that health
care is unaffordable.\90\ \91\ For these groups facing high health care
related financial burdens, which include those most likely to be
uninsured and underinsured,\92\ unexpected expenses of $400 or more
would reasonably constitute a substantial amount.
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\87\ https://www.rwjf.org/en/library/research/2019/12/life-experiences-and-income-inequality-in-the-united-states.html.
\88\ https://www.federalreserve.gov/publications/2019-economic-well-being-of-us-households-in-2018-dealing-with-unexpected-expenses.htm.
\89\ https://www.federalreserve.gov/publications/2019-economic-well-being-of-us-households-in-2018-dealing-with-unexpected-expenses.htm.
\90\ Kielb E.S., Rhyan C.N., Lee J.A. Comparing Health Care
Financial Burden With an Alternative Measure of Unaffordability.
Inquiry. 2017;54:46958017732960. doi:10.1177/0046958017732960.
\91\ Amin K., Claxton G., Ramirez G., Cox C. How Does Cost
Affect Access to Care? Peterson-KFF Health System Tracker. January
2021. Available at https://www.healthsystemtracker.org/chart-collection/cost-affect-access-care/#item-start.
\92\ Kielb E.S., Rhyan C.N., Lee J.A. Comparing Health Care
Financial Burden With an Alternative Measure of Unaffordability.
Inquiry. 2017;54:46958017732960. doi:10.1177/0046958017732960. Also
see, Amin K., Claxton G., Ramirez G., Cox C. How Does Cost Affect
Access to Care. Peterson-KFF Health System Tracker. January 2021.
Available at https://www.healthsystemtracker.org/chart-collection/cost-affect-access-care/#item-start. Also see, Tolbert J., Orgera
K., Key Facts About the Uninsured Population. Kaiser Family
Foundation. November 2020. Available at https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/.
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HHS also considered setting the flat dollar lower than $400.
However, as discussed in greater detail in section VI.B.8 of this
preamble, HHS expects to contract with SDR entities directly and will
pay the SDR entity costs. Based on conversations with stakeholders and
research of similar state processes, HHS found that the amount that
dispute resolution entities charge for similar dispute resolution
processes is around $400 per case. A study by the Commonwealth Fund
similarly found costs for dispute resolution ranging between $300 and
$600.\93\ HHS found that other state dispute resolution processes could
potentially charge the uninsured (or self-pay) individual high fees to
initiate a dispute. For example, in New York, the cost to the uninsured
(or self-pay) individual for dispute resolution could be as much as
$395, and in Maine as much as $450.\94\ However, as is further
discussed in section VI.B.8 of this preamble, HHS will only charge a
small administrative fee, meaning that uninsured (or self-pay)
individuals will be mostly insulated from the costs of dispute
resolution. HHS acknowledges that the costs to the government for
conducting dispute resolution would not be a consideration for the
uninsured (or self-pay) individual in determining whether to initiate a
dispute, as they would not be required to pay those costs. However, HHS
is of the view that it would not make sense to conduct dispute
resolution cases where the amount in dispute is less than the cost for
the dispute resolution entity. As a result, HHS is of the view that
setting the substantially-in-excess floor equal to $400 is a reasonable
and appropriate approach and would ensure that the minimum amount in
dispute for the patient-provider dispute resolution process is
comparable to the expected costs for dispute resolution.
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\93\ https://www.commonwealthfund.org/blog/2020/how-states-are-using-independent-dispute-resolution-resolve-out-network-payments-surprise.
\94\ https://www.dfs.ny.gov/system/files/documents/2020/10/idr_patient_application.pdf and https://dispute.maximus.com/me/indexME.
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In addition, HHS considered whether to set the substantially-in-
excess threshold floor at a higher amount than $400. However, HHS
remains concerned that setting the flat dollar floor for the
substantially-in-excess threshold greater than $400 could ultimately
result in many uninsured (or self-pay) individuals, particularly those
who received lower cost items or services, being unable to access the
patient-provider dispute resolution process. As a result, HHS is of the
view that limiting patient-provider dispute resolution to items or
services where the total billed charges exceed the total expected
charges in the good faith estimate by $400 or greater strikes the
appropriate balance that helps ensure that amounts in dispute are
sufficiently large to justify the costs of maintaining and operating
the dispute resolution process; that burdens on providers, facilities,
and the Federal Government are minimized; and that all uninsured (or
self-pay) individuals are able to access the dispute resolution process
to resolve unexpected billed amounts.
As HHS obtains additional experience with the patient-provider
dispute resolution process, HHS intends to review data on the use of
the process, such as the volume of dispute resolution cases,
differences between the total expected charges in the good faith
estimate and the total billed charges in cases that go to dispute
resolution, data on payment determination amounts by SDR entities, the
success rate for uninsured (or self-pay) individuals who initiate
dispute resolution, and characteristics of initiation requests that are
determined ineligible, and in future years may propose adjustments to
the definition of ``substantially in excess.''
HHS seeks comment on the definition for ``substantially in
excess,'' including whether the $400 amount should be set higher or
lower, whether there is any other specific dollar value that would be
more appropriate, or whether a different method for determining
``substantially in excess'' should be considered. HHS also seeks
comment on the terms defined in these interim final rules, including
the appropriateness and usability of the definitions, and whether
additional terms should be defined in future rulemaking. HHS also seeks
comment on how these definitions may impact market incentives,
including the accuracy of good faith estimates.
3. Eligibility for Patient-Provider Dispute Resolution
The patient-provider dispute resolution process in PHS Act section
2799B-7 applies to uninsured (or-self-pay) individuals who received,
pursuant to PHS Act section 2799B-6, a good faith estimate of the
expected charges for scheduled or requested items or services from a
provider or facility, and who after being furnished such item or
service is billed by such provider or facility charges substantially in
excess of such estimate. To clarify what items and services are
eligible for the patient-provider dispute resolution process, HHS is
adding 45 CFR 149.620(b) which specifies that items or services
provided by a convening provider, convening facility, co-provider, or
co-facility are eligible for the patient-provider dispute resolution
process if the total billed charges (by the particular convening
provider, convening facility, or co-provider or co-facility listed in
the good faith estimate), are substantially in excess of the total
expected charges for that specific provider or facility listed on the
good faith estimate, as required under 45 CFR 149.610, regardless of
whether the items or services included in the total billed charges were
listed in the good faith estimate, or whether the co-provider or co-
facility was listed on the good faith estimate.
Good faith estimates for scheduled items or services, or when
requested, as specified in 45 CFR 149.610, are intended to provide a
comprehensive estimate of expected charges for items or services
furnished during the period of care. PHS Act section 2799B-6 and 45 CFR
149.610 require providers or facilities to include any item or service
that is reasonably expected to be provided in conjunction with an item
or service, including an item or service reasonably expected to be so
provided by another provider or facility.
HHS is of the view that an uninsured (or self-pay) individual
should be able
[[Page 56028]]
to initiate the patient-provider dispute resolution process when the
total billed charge for an item or service from a particular provider
or facility represented in the good faith estimate exceeds the
substantially in excess threshold defined at 45 CFR 149.620(a)(2).
Therefore, these interim final rules specify that an item or service
provided by a convening provider, convening facility, co-provider or
co-facility are eligible for the patient-provider dispute resolution
process if the total billed charges (by the particular convening
provider or facility, or co-provider or co-facility listed in the good
faith estimate), are substantially in excess of the of total expected
charges for that specific provider or facility listed on the good faith
estimate, as required under 45 CFR 149.610.
As an example, an uninsured (or self-pay) individual receives a
good faith estimate that lists expected charges for 3 services, A, B,
and C. Services A and B are provided by provider Y and service C is
provided by co-provider Z. The total billed charges for services A and
B must exceed the total expected charges for services A and B by at
least $400 more than the amount listed in the good faith estimate in
order for the uninsured (or self-pay) individual to be eligible to
initiate patient-provider dispute resolution against provider Y.
Similarly, the billed charge for service C must exceed the expected
charges for service C by at least $400 more than the amount listed in
the good faith estimate in order for the uninsured (or self-pay)
individual to be eligible for the patient-provider dispute resolution
against co-provider Z.
An item or service is eligible for patient-provider dispute
resolution based on the total billed charges from the provider or
facility, regardless of whether such items or services are included in
a good faith estimate. HHS recognizes that unforeseen factors during
the course of treatment may occur, which could involve additional items
or services from providers and facilities, and may result in higher
billed charges after receipt of care than was anticipated at the time
the good faith estimate was provided to the uninsured (or self-pay)
individual. However, HHS is of the view that if an item or service is
eligible for patient-provider dispute resolution only if it is
explicitly listed in the good faith estimate, providers and facilities
may be incentivized to omit items and services from the good faith
estimate in order to avoid the patient-provider dispute resolution
process. It is HHS's view that Congress intended to create a process
which allows uninsured (or self-pay) individuals to dispute the final
billed charges, if such charges are substantially in excess of the
expected charges in the good faith estimate; and therefore any item or
service that was not included in the good faith estimate, yet resulted
in total billed charges substantially in excess of the total expected
charges in the good faith estimate, should be eligible for patient-
provider dispute resolution.
Therefore, if the total billed charges, which includes charges for
new items or services, exceeds the total expected charges by at least
$400 more than the amount in the good faith estimate, the items or
services are eligible for patient-provider dispute resolution, despite
the new items or services not being itemized in the good faith
estimate. For example, co-provider Z bills an uninsured (or self-pay)
individual for services C, D, and E, even though services D and E were
not included in the good faith estimate. If the differences between the
total billed charges for services C, D, and E are substantially in
excess of the total expected charges in the good faith estimate for
service C, then the uninsured (or self-pay) individual is eligible to
initiate patient-provider dispute resolution against co-provider Z for
services C, D, and E.
Although convening providers and convening facilities are required
to include expected charges from co-providers and co-facilities in the
good faith estimate, HHS understands that there may be instances when
an uninsured (or self-pay) individual may receive a bill that includes
providers or facilities that were not included in the good faith
estimate: Specifically, if a co-provider or co-facility that is
reflected on the good faith estimate is substituted at the last moment
to a different co-provider or co-facility. While PHS Act section 2799B-
7 requires that an item or service where the total billed charges are
substantially in excess of the total expected charges in the good faith
estimate will be eligible for patient-provider dispute resolution,
expected charges for the replacement co-provider or co-facility may not
be available. Regardless, HHS is of the view that the consumer
protections of PHS Act section 2799B-7 should still apply in these
circumstances as they are aimed to protect uninsured (or self-pay)
individuals from unexpected medical bills, and allowing a co-provider
or co-facility to circumvent these protections simply due to not being
directly represented on the good faith estimate would undermine these
protections. Therefore, HHS is adding 45 CFR 149.620(b)(2) that
specifies that an item or service billed by a co-provider or co-
facility that replaced the original co-provider or co-facility covered
under a good faith estimate is eligible for dispute resolution if the
total billed charge is substantially in excess of the expected charges
included on the good faith estimate for the original co-provider or co-
facility. However, if the replacement co-provider or co-facility
provides the uninsured (or self-pay) individual with a new good faith
estimate of expected charges in accordance with 45 CFR 149.610(b)(2)
then the determination of whether an item or service billed by the
replacement co-provider or co-facility is eligible for dispute
resolution is based on whether the total billed charges for the
replacement co-provider or co-facility are substantially in excess of
the total expected charges included in the good faith estimate provided
by the replacement co-provider or co-facility.
HHS is of the view that had the convening provider known that the
items or services from these particular co-providers or co-facilities
would be needed, they would have been included on the good faith
estimate. Therefore, HHS is of the view that such an approach for an
item or service billed by a replacement co-provider or co-facility is
necessary and appropriate to ensure such item or service is eligible
for dispute resolution if the total billed charges are substantially in
excess of the total expected charges in the good faith estimate even if
the billing provider or facility did not provide the original estimate
of expected charges in the good faith estimate. HHS acknowledges the
challenges these requirements impose on providers and facilities, and
the potential disincentive that such a requirement could have on a
provider's or facility's willingness to provide an item or service
under such circumstances given the patient-provider dispute resolution
process, at 45 CFR 149.620, uses the expected charges contained in the
good faith estimate to determine the eligibility of an item or service
for patient-provider dispute resolution. However, HHS is of the view
that such requirements are necessary for the intended consumer
protections regarding surprise medical bills, and that, without such a
requirement, an uninsured (or self-pay) individual may be unable to
avail themselves of the patient-provider dispute resolution process in
these circumstances. HHS also recognizes that these particular
situations may be more complex for an uninsured (or self-pay)
individual to determine eligibility for dispute resolution. HHS seeks
comment
[[Page 56029]]
on the approach for eligibility in cases where the co-provider or co-
facility has been replaced with a different co-provider or co-facility,
comments on whether there are other complex situations where
clarification would be helpful, and the feasibility of such an approach
to eligibility, as well as comments on alternative approaches.
HHS considered whether to base eligibility for patient-provider
dispute resolution on whether an individual item or service listed on a
good faith estimate is billed an amount substantially in excess of the
expected charge for the item or service. However, HHS is of the view
that basing the eligibility for patient-provider dispute resolution on
each individual item or service would add complexity as each item or
service listed on the good faith estimate would need to be assessed
separately for eligibility. Additionally, by basing the eligibility for
patient-provider dispute resolution on an individual item or service,
providers and facilities could potentially avoid dispute resolution by
ensuring that no single billed charge exceeds the estimate provided on
the good faith estimate by more than the substantially in excess
threshold, even though the total of all billed charges for a provider
or facility might substantially exceed the total expected charges in
the good faith estimate. As a result, to fully protect the uninsured
(or self-pay) individual, the individual items and services would need
to be totaled by provider or facility, with the total billed charges by
provider or facility subject to the substantially in excess standard.
HHS is of the view that, because the uninsured (or self-pay) individual
understood the items or services to most likely cost the amount listed
in the good faith estimate with respect to each provider or facility,
focusing on the total billed charges by each provider or facility
ensures that patient-provider dispute resolution is available when the
total billed charges for each provider or facility substantially
exceeds the amount that the individual expects to pay.
HHS also considered basing the eligibility on the total billed
charges for all items or services and all providers or facilities
listed on the good faith estimate. However such an approach would be
significantly more complex given that the good faith estimate could
consist of estimates from multiple providers and facilities who would
bill the uninsured (or self-pay) individual separately. It could also
potentially increase the burden on the uninsured (or-self pay)
individual who would likely need to submit multiple bills from multiple
providers or facilities. Additionally, such an approach could require a
provider or facility to respond to a notice requesting additional
documentation from an SDR entity due to the billing of other providers,
even when the provider or facility did not bill an uninsured (or self-
pay) individual an amount substantially in excess of the good faith
estimate.
As discussed in section VI.A.2 of this preamble, these interim
final rules define expected charges, for an item or service, as, the
cash pay rate or rate established by a provider or facility for an
uninsured (or self-pay) individual, reflecting any discounts for such
individuals, where the good faith estimate is being provided to an
uninsured (or self-pay) individual; or the amount the provider or
facility would expect to charge if the provider or facility intended to
bill a plan or issuer directly for such item or service when the good
faith estimate is being furnished to a plan or issuer. Therefore, HHS
would anticipate that the expected charges in the good faith estimate
include applicable discounts and rates the provider or facility would
ultimately charge an uninsured (or self-pay) individual rather than a
standard list price or chargemaster rate. However, HHS remains
concerned about the potential incentives for providers and facilities
to inflate good faith estimates, for example, by overestimating the
costs for items or services, providing a higher list price (or
chargemaster rate) rather than the price the uninsured (or self-pay)
individual would be expected to pay when accounting for any discounts,
upcoding to a more expensive service, or adding additional unnecessary
services which could lead to higher good faith estimates overall and
could discourage uninsured (or self-pay) individuals from obtaining
needed care. Furthermore, HHS is also concerned that providers or
facilities may interpret an individual's decision to seek care after
receiving the good faith estimate as their ability to pay the expected
charges and therefore be disincentivized to offer the uninsured (or
self-pay) individuals with charity care or discounted rates. HHS
acknowledges that the availability of the patient-provider dispute
resolution process may lead providers or facilities to estimate prices
higher than they otherwise would have. However, HHS is very concerned
that a provider or facility may increase the good faith estimate amount
specifically to circumvent the ability of the uninsured (or self-pay)
individual to access the patient-provider dispute resolution process,
resulting in uninsured (or self-pay) individuals being charged higher
prices and as a result the uninsured (or self-pay) individual foregoing
needed care due to concerns over the potential costs. Additionally,
this behavior could potentially lead to a situation where an uninsured
(or self-pay) individual ultimately receives an inflated good faith
estimate, but after receiving treatment is billed an amount higher than
the good faith estimate yet less than the substantially in excess
threshold, and is therefore unable to access dispute resolution due to
the expected charges in the good faith estimate being overestimated.
HHS acknowledges that an uninsured (or self-pay) individual may not
necessarily know if a good faith estimate is inflated. However, as
discussed in section VI.A.4 of this preamble, the good faith estimate
will provide an itemized list of the expected items or services in
advance, including the applicable diagnosis codes, expected service
codes, and expected charges associated with each listed item or
service. HHS is of the view that this will provide needed transparency
for uninsured (or self-pay) individuals about the items or services
they expect to be provided and the estimated costs with which they can
compare with good faith estimates from other providers or through price
transparency information such as the Hospital Price Transparency
requirements described in 45 CFR part 180. HHS seeks comment on what
other resources are available to assist individuals in determining the
reasonableness of the good faith estimates they receive, particularly
those who are uninsured (or self-pay) and with low health literacy. HHS
also seeks comments on ways to raise awareness of these resources and
on other resources that could be utilized by uninsured (or self-pay)
individuals.
HHS notes that a provider or facility intentionally providing
expected charges they know to be incomplete or inaccurate in the good
faith estimate could violate the requirements in PHS Act section 2799B-
6, which requires that the estimates being provided be good faith
estimates, and thus could be subject to enforcement actions under PHS
Act section 2799B-4. HHS is of the view that it is important for an
uninsured (or self-pay) individuals to be able to file complaints
regarding a provider or facility who they believe is not complying with
the good faith estimate requirements and patient-provider dispute
resolution process requirements, such as in cases where an individual
believes a provider or facility is inflating the good faith estimate.
[[Page 56030]]
Therefore, HHS is amending the regulations at 45 CFR 149.450 to expand
the scope to include subpart G of part 149, which includes 45 CFR
149.610 and 45 CFR 149.620, among the provisions for which HHS can
receive and resolve complaints concerning a provider's or facility's
failure to meet the specified requirements. HHS seeks comment on this
approach.
HHS also considered whether there should be an additional backstop
that would allow an uninsured (or self-pay) individual to access
patient-process dispute resolution based on allegations that the
provider or facility willfully overestimated the expected charges in
the good faith estimate in order to avoid dispute resolution. Under
such an approach, the good faith estimate would be reviewed to ensure
that the good faith estimate reasonably reflect only the expected
charges for the item or service, and that the good faith estimate did
not include items or services extraneous to those that were reasonably
expected to be provided in conjunction with such scheduled item or
service. If HHS were to determine that such requirements had not been
met, the uninsured (or self-pay) individual would be deemed eligible to
initiate the patient-provider dispute resolution process for such items
or services. However, these interim final rules do not include such an
approach as HHS was concerned this approach would add significantly
more complexity to the patient-provider dispute resolution process. HHS
seeks comment on this potential approach of allowing uninsured (or
self-pay) individuals to initiate dispute resolution for good faith
estimates they believe to have been overinflated in order for providers
and facilities to avoid dispute resolution.
As noted elsewhere in this preamble, with regards to an item or
service furnished by co-providers and co-facilities, providers and
facilities subject to these interim final rules may need additional
implementation time to develop appropriate communication channels that
may not yet exist among various co-providers or co-facilities. As
stated in section VI.A.7 of this preamble, with respect to good faith
estimates provided to uninsured (or self-pay) individuals on or after
January 1, 2022 through December 31, 2022, HHS will exercise its
enforcement discretion in situations where the good faith estimate does
not include expected charges for items and services from a co-provider
or co-facility. During this period, HHS encourages convening providers
and facilities to include a range of expected charges for such items
and services during the period of care. HHS understands that it may
take time for providers and facilities to develop systems and processes
for receiving and providing the required information regarding items
and services provided by co-providers and co-facilities. HHS is of the
view that without having such processes in place, co-providers and co-
facilities who provide items or services may be subjected to patient-
provider dispute resolution in situations where the co-providers or co-
facilities were unable to provide complete and accurate pricing
information to the convening provider or facility, and as a result
would not provide sufficient detail to provide accurate good faith
estimates. As a result, during the period of enforcement discretion,
further discussed in section VI.A.7 of this preamble, items or services
to be provided by a co-provider or co-facility that appear on the good
faith estimate that do not include an estimate of expected charges or
that appear as a range of expected charges would not be eligible for
the patient-provider dispute resolution process. However, HHS
emphasizes that this particular application for patient-provider
dispute resolution eligibility would apply only in 2022 to allow
additional time for the convening provider and convening facility to
build the necessary systems and processes to receive accurate estimates
from co-providers and co-facilities. HHS notes, that nothing prevents a
co-provider or co-facility from furnishing the information as required
in 45 CFR 149.610 before December 31, 2022, and under such
circumstances, a co-provider or co-facility must comply with the
patient-provider dispute resolution requirements in 45 CFR 149.620.
Additionally, nothing would prevent the uninsured (or self-pay)
individual from separately requesting a good faith estimate directly
from the co-provider or co-facility in which case the patient-provider
dispute resolution requirements in 45 CFR 149.620 would apply. HHS
seeks comment on the approach for eligibility for the patient-provider
dispute resolution process, including the feasibility of such approach,
including the approach for eligibility for co-providers and co-
facilities in 2022, as well as comment on alternative approaches to
increase consumer protections against unexpected medical bills from co-
providers and co-facilities during 2022.
HHS also recognizes that uninsured (or self-pay) individuals in
underserved and racial/ethnic minority communities, including
individuals with vision, hearing, or language limitations, individuals
with limited English proficiency, lesbian, gay, bisexual, transgender,
and queer (LGBTQ+) individuals, and persons with health literacy needs,
may face additional barriers to paying for high unexpected health care
costs, understanding their rights related to good faith estimates,
patient-provider dispute resolution, and how and when to initiate the
dispute resolution process. HHS seeks comment from underserved and
racial/ethnic minority communities on additional barriers individuals
from these communities may face in understanding and exercising their
rights related to these topics, and how to address them. HHS also seeks
feedback on outreach and education activities, efforts, and resources
available for underserved and racial/ethnic minority communities,
including individuals with vision, hearing, or language limitations,
individuals with limited English proficiency, lesbian, gay, bisexual,
transgender, and queer (LGBTQ+) individuals, and persons with health
literacy needs, to help ensure that these rights and tools are
available, accessible, and understood such that they can be used
equitably by all uninsured (or self-pay) individuals in appropriate
circumstances. HHS also recognizes that groups such as CAPs and legal
aid organizations play an important role in helping consumers,
particularly those in underserved and racial/ethnic minority
communities, including individuals with vision, hearing, or language
limitations; individuals with limited English proficiency; and persons
with health literacy needs, with complex heath care issues, which may
also include assistance with the patient-provider dispute resolution
process. HHS seeks comment on how to best to support the efforts of
these organizations in assisting uninsured (or self-pay) individuals
throughout the patient-provider dispute resolution process.
4. Initiation of Patient-Provider Dispute Resolution
PHS Act section 2799B-7 requires patient-provider dispute
resolution be available when an uninsured (or self-pay) individual is
billed by a provider or facility for items or services in an amount
that is ``substantially in excess'' of the expected charges in the good
faith estimate for the provider or facility.
HHS is specifying under 45 CFR 149.620(c) that when an uninsured
(or self-pay) individual is billed for items or services where the
total billed charges for a provider or facility is substantially in
excess of the total expected charges in the good faith estimate for the
[[Page 56031]]
provider or facility, the uninsured (or self-pay) individual or their
authorized representative (excluding any providers or facilities
directly represented in the good faith estimate, providers associated
with such providers or facilities, or non-clinical staff associated
with such providers or facilities), may submit a notification
(initiation notice) to the Secretary of HHS to initiate the patient-
provider dispute resolution process. HHS is of the view that a provider
should generally not be permitted to represent the uninsured (or self-
pay) individual in dispute resolution for items or services where the
provider was represented on the good faith estimate, even if the
provider would not be a party to the dispute. HHS is of the view that
there is a likelihood of an inherent financial or professional conflict
of interest. These same concerns extend to employees of the facility at
which the items or services are furnished. However, HHS acknowledges
that many providers would generally not be inclined to assist the
uninsured (or self-pay) individuals with initiating a dispute
resolution even without this restriction. HHS further clarifies that
providers may serve as authorized representatives for uninsured (or
self-pay) individuals, provided they do not meet the previously
described exclusion criteria. HHS also clarifies that CAPs and legal
aid organizations can also serve as authorized representatives for the
purpose of the patient-provider dispute resolution process as such
organizations may have experience assisting consumers with billing
issues. Additionally, all materials created for the patient-provider
dispute resolution process, including the Federal IDR portal, will be
compliant with the language access requirements of section 508 of the
Rehabilitation Act of 1973 to meet accessibility needs.\95\ HHS seeks
comment on what additional supports are necessary for community
organizations, such as CAPs and legal aid organizations, to assist
uninsured (or self-pay) individuals with the dispute resolution
process. Providers and facilities are also required to comply with
other state and Federal laws regarding language access, to the extent
applicable. HHS reminds providers and facilities that are recipients of
Federal financial assistance that they must comply with Federal civil
rights laws that prohibit discrimination. These laws may include
Section 1557 of the Patient Protection and Affordable Care Act, Title
VI of the Civil Rights Act of 1964, and Section 504 of the
Rehabilitation Act of 1973, as applicable. Section 1557 of the Patient
Protection and Affordable Care Act and Title VI of the Civil Rights Act
of 1964 require covered entities to take reasonable steps to ensure
meaningful access for individuals with limited English proficiency,
which may include provision of language assistance services, such as
providing qualified interpreters or written translation of written good
faith estimates in paper or electronic form into languages other than
English. When language assistance services are provided, they must be
provided free of charge and be accurate and timely. Section 1557 of the
Affordable Care Act and Section 504 of the Rehabilitation Act of 1973
require covered entities to take appropriate steps to ensure effective
communication with individuals with disabilities, including provision
of appropriate auxiliary aids and services in a timely manner and free
of charge to the individual. Auxiliary aids and services may include
interpreters, large print materials, accessible information and
communication technology, open and closed captioning, and other aids or
services for persons who are blind or have low vision, or who are deaf
or hard of hearing. Information provided through information and
communication technology also must be accessible to individuals with
disabilities, unless certain exceptions apply. HHS also seeks comment
on what additional supports are necessary for persons in and
representatives of minority and underserved communities, including
those with limited English proficiency, those with disabilities who
require information in alternate and accessible formats, and
stakeholders who serve such communities.
---------------------------------------------------------------------------
\95\ For 508 standards, see the US Access Board's final rule at:
https://www.federalregister.gov/documents/2017/01/18/2017-00395/information-and-communication-technology-ict-standards-and-guidelines; see also Information and Communication Technology
Revised 508 Standards and 255 Guidelines, U.S. Access Board, https://www.access-board.gov/ict/ (last visited Sept. 10, 2021).
---------------------------------------------------------------------------
The initiation notice must be submitted to the Secretary of HHS,
and postmarked within 120 calendar days of receiving the initial bill
containing charges for the item or service that is substantially in
excess of the expected charges in the good faith estimate, for the
provider or facility. HHS is specifying calendar days instead of
business days in this instance, because it is HHS' experience in
administering other consumer-facing programs such as the Federally
Facilitated Marketplace, that consumers have an easier time calculating
and responding to deadlines that are measured by calendar days rather
than business days. HHS considered whether to specify a timeframe
shorter than 120 calendar days. However, HHS is concerned that
requiring the initiation notice to be submitted in less than 120
calendar days would not provide sufficient time for an uninsured (or
self-pay) individual to collect and submit the required information.
HHS also considered a timeframe greater than 120 calendar days, or no
time limit; but HHS is of the view that due to the requirement, as
discussed later in this section, that once the patient-provider dispute
resolution process has been initiated, a provider or facility must not
move the bill for the disputed item or service into collection or
threaten to do so, or if the bill has already moved into collection,
the provider or facility should cease collection efforts, as well as
the requirement that the provider or facility suspend the accrual of
any late fees on unpaid bill amounts until after the dispute resolution
process has concluded, providing for a longer timeframe could increase
uncertainty for a provider or facility over whether an uninsured (or
self-pay) individual will file a dispute resolution request. As a
result, HHS is of the view that having a clear timeframe with which an
uninsured (or self-pay) individual can initiate a dispute resolution
request is both necessary and appropriate. HHS seeks comment on the
appropriateness of allowing individuals 120 calendar days to initiate
the dispute resolution process, and whether more or less time should be
allowed for an uninsured (or self-pay) individual to initiate dispute
resolution, or whether there should not be a time limit at all.
The initiation notice may be submitted through the Federal IDR
portal, electronically, or on paper, in a form and manner specified by
the Secretary of HHS. The initiation notice must include: (1)
Information sufficient to identify the items or services under dispute,
including the date of service or date the item was provided and a
description of the item or service; (2) a copy of the bill for the
items and services under dispute (the copy can be a photocopy or an
electronic image so long as the document is readable); (3) a copy of
the good faith estimate for the items and services under dispute (the
copy can be a photocopy or an electronic image so long as the document
is readable); (4) the contact information of the parties involved,
including name, email address, phone number and mailing address; (5)
the state where the items or services in dispute were furnished; and
(6) the uninsured (or self-pay) individual's
[[Page 56032]]
communication preference, through the Federal IDR Portal, or electronic
or paper mail.
In addition to the required information, the uninsured (or self-
pay) individual must submit with the initiation notice an
administrative fee to the SDR entity as described in 45 CFR 149.620(g)
and section VI.B.8 of this preamble. The amount of the administrative
fee, as well as the manner in which it must be submitted, will be
clarified in guidance by HHS. PHS Act section 2799B-7(c) contemplates
that the uninsured (or self-pay) individual pay an administrative fee,
and that such fee should be set in a manner not to create a barrier to
access the process. While HHS acknowledges that requiring an uninsured
(or self-pay) individual to pay an administrative fee upfront may
discourage some individuals from initiating the patient-provider
dispute resolution process, HHS is of the view that requiring a nominal
upfront administrative fee will help prevent the submission of
unnecessary claims to the patient-provider dispute resolution process
and ensure that dispute resolution resources are available in necessary
cases. HHS also notes that as further discussed in section VI.B.8 of
this preamble, if the uninsured (or self-pay) individual prevails in
the dispute resolution process, the SDR entity will adjust the final
payment determination amount to include a reduction in the final
payment determination amount that accounts for the uninsured (or self-
pay) individual's administrative fee payment, thus allowing the
uninsured (or self-pay) individual to recoup the administrative fee
paid.
The date of initiation of the patient-provider dispute resolution
process will be the date of receipt of such initiation notice. HHS will
provide additional information in guidance on how the uninsured (or
self-pay) individual can submit the initiation notice, including
necessary steps for the process and a standard notification form to
ensure the uninsured (or self-pay) individual is able to include all
the necessary information to initiate the dispute resolution process.
In addition to the guidance, uninsured individuals will be informed of
how to initiate the patient-provider dispute resolution process through
information that providers and facilities must include on the good
faith estimates, as discussed in section VI.A.4 of this preamble. HHS
also intends to conduct outreach and education to consumer advocates,
CAPs, legal aid organizations and other stakeholders to assist
consumers through this process.
HHS expects to leverage the Federal IDR portal described in section
III of this preamble to facilitate the operation of the patient-
provider dispute resolution process. The Federal IDR portal will allow
uninsured (or self-pay) individuals or their authorized representatives
to submit the initiation notices, upload documentation, receive notices
from HHS and the SDR entity, upload additional supporting
documentation, and view the SDR entity's payment determination. HHS
expects that providers and facilities will also utilize the Federal IDR
portal to receive notices from HHS and the SDR entity, upload
documentation, upload additional supporting documentation, and view the
SDR entity's determination. HHS intends for the SDR entity to utilize
the Federal IDR portal in all cases, as HHS is of the view that
utilizing the Federal IDR portal to facilitate the patient-provider
dispute resolution process is preferable and will allow for more
efficient operation of the process, faster and easier receipt of
notices and submission of documentation, and would allow all the
relevant information on a specific patient-provider dispute resolution
case to be accessible in one place. HHS is aware that an individual or
a provider or facility may not be able to utilize the Federal IDR
portal depending on various factors and as a result the individual,
provider, or facility may choose to communicate with HHS or the SDR
entity using other methods, including electronic or paper mail.
Additionally, HHS recognizes that minority and underserved communities,
including those with limited English proficiency and those with
disabilities may prefer information in alternate and accessible formats
and may not be best served by using the Federal IDR portal. HHS intends
to put in place processes to ensure accessibility of the system for
these communities, and HHS seeks comments on this approach.
Once the initiation notice has been received, HHS will select an
SDR entity according to the process further described in section VI.B.6
of this preamble. After the SDR entity has been selected, the SDR
entity will provide notice to the uninsured (or self-pay) individual
and the provider or facility through the Federal IDR portal, or
electronic or paper mail, that a patient-provider dispute resolution
initiation request has been received and is under review, the SDR
entity will also include information identifying the item or service
under dispute, and the date the initiation notice was received. The SDR
entity will also notify the uninsured (or self-pay) individual, and the
provider or facility, that while the dispute resolution process is
pending, the provider or facility must not move bills for the disputed
items or services into collection or threaten to do so, or if the bill
has already moved into collection, the provider or facility should
cease collection efforts until the dispute has been settled. The
provider or facility must also suspend the accrual of any late fees on
unpaid bill amounts until after the dispute resolution process has
concluded. Additionally, the provider or facility must not take or
threaten to take retributive action against an uninsured (or self-pay)
individual for utilizing the patient-provider dispute resolution
process. The notice will also provide information to the uninsured (or
self-pay) individual about the availability of consumer assistance
resources that can assist them with the dispute.
The SDR entity will review the initiation notice submitted by the
uninsured (or self-pay) individual to ensure that the disputed items or
services meet the eligibility criteria for the patient-provider dispute
resolution process and that the initiation notice contains all the
required information. The SDR entity will notify the uninsured (or
self-pay) individual electronically or by mail, depending on the
individual's preference, of the outcome of the review including in
cases where the initiation notice is determined to be incomplete or the
item or service is determined ineligible for dispute resolution, in
which case the uninsured (or self-pay) individual would be provided 21
calendar days to submit any missing information or provide supplemental
information to demonstrate the item or service is eligible for the
dispute resolution process. To assist consumers with understanding the
timeline to submit the supplemental information, such insufficiency
notice will provide a date by which the additional information must be
postmarked or submitted electronically. HHS is of the view that
providing the uninsured (or self-pay) individual with 21 calendar days
is appropriate as it provides consumers with an opportunity to resolve
any deficiencies in the initiation notice and access the dispute
resolution process if eligible. If the insufficiency notice is not made
available to an individual in a format that is accessible to
individuals with disabilities or with low-English proficiency within 14
calendar days of such a request from the individual, a 14-calendar day
extension will be granted to allow sufficient time for document
[[Page 56033]]
submission, so that the individual, in this situation, will have a
total of 35 calendar days to submit supplemental information. HHS also
considered a timeframe greater than 21 calendar days, or no time limit,
however, HHS is concerned that due to the requirement that a provider
or facility must not move the bill for the disputed item or service
into collection or threaten to do so, or if the bill has already moved
into collection, the provider or facility should cease collection
efforts, and the provider or facility suspend the accrual of any late
fees on unpaid bill amounts until after the dispute resolution process
has concluded, providing for a longer timeframe could increase burdens
and uncertainty for a provider or facility. The 21-calendar-day
timeframe is also consistent with external review processes in some
states.\96\ HHS seeks comments on whether 21 calendar days is a
sufficient timeframe for uninsured (or self-pay) individuals to submit
additional documentation through the mail or electronically, or whether
a different timeframe should be considered.
---------------------------------------------------------------------------
\96\ Some state processes have a 15-business day time frame
which would generally translate to 21 calendar days. See e.g.,
https://insurance.mo.gov/consumers/health/externalreviewprocess.php.
---------------------------------------------------------------------------
Once the SDR entity has determined that an item or service is
eligible for dispute resolution, the SDR entity must provide
notification of the determination to both parties (the uninsured (or
self-pay) individual and the provider or facility) through the Federal
IDR portal, or electronic or paper mail, and must request that the
provider or facility provide certain information within 10 business
days as described in 45 CFR 149.620(d) and in section VI.B.7.ii of this
preamble.
While the dispute resolution process is pending, the provider or
facility must not move bills for the disputed items or services into
collection or threaten to do so until after dispute resolution process
has concluded, or if the bill has already moved into collection, the
provider or facility should cease collection efforts until the dispute
has been settled. The provider or facility must also suspend the
accrual of any late fees on unpaid bill amounts until after the dispute
resolution process has concluded. PHS Act section 2799B-7 established a
process that would provide a mechanism for an uninsured (or self-pay)
individual who is billed an amount for an item or service that is
substantially in excess of the expected charges in the good faith
estimate to seek a determination on the amount to be paid. If the
provider or facility were to move the bill, if fully or partially
unpaid, to collection or to accrue late fees prior to the SDR entity
determining a payment amount, the consumer protections intended in PHS
Act section 2799B-7 would be undermined. In order for an uninsured (or
self-pay) individual to avoid moving the bill into collection or the
accrual of late fees, the uninsured (or self-pay) individual would
effectively be required to pay the bill in full prior to determination
and seek a refund from the provider or facility if the individual
prevails. HHS is of the view that through the patient-provider dispute
resolution process, the uninsured (or self-pay) individual is actively
working in good faith to resolve a payment dispute and should not be
effectively punished for utilizing such process by the accrual of late
fees or movement of the bill into collections. HHS is of the view that
use of its general rulemaking authority to establish such requirements
is necessary and appropriate in order to implement the provisions of
PHS Act section 2799B-7 in a manner that furthers the statutory intent
to protect consumers by ensuring that uninsured (or self-pay)
individuals can use the patient-provider dispute resolution process
without being penalized for utilizing such process or being required to
pay the billed charges upfront to avoid late fees or collections
activities. HHS seeks comment on this approach of disallowing the
movement of a bill into collections and the suspension of the accrual
of late fees.
In addition, HHS is using its general rulemaking authority to
establish requirements under 45 CFR 149.620 to prohibit a provider or
facility from taking or threatening to take any retributive action
against an uninsured (or self-pay) individual for utilizing the
patient-provider dispute resolution process to seek resolution for a
disputed item or service. If a provider or facility were to take or
threaten to take retributive action against an uninsured (or self-pay)
individual, such action could create a chilling effect for the
uninsured (or self-pay) individual to utilize the dispute resolution
process, which would undermine the consumer protections intended in PHS
Act section 2799B-7. As a result, HHS is of the view that it is
necessary and appropriate to require a provider or facility to not take
or threaten to take any retributive action against an uninsured (or
self-pay) individual for utilizing the patient-provider dispute
resolution process.
5. Certification of Selected Dispute Resolution Entities
PHS Act section 2799B-7 requires the Secretary of HHS to recognize
or establish a process to contract with and certify entities to resolve
payment disputes between uninsured (or self-pay) individuals.
Additionally, PHS Act section 2799B-7 requires entities certified under
this process to satisfy, at a minimum, the criteria in PHS Act section
2799A-1(c). HHS intends to contract with and certify only that number
of entities it believes will be necessary to timely resolve the volume
of patient-provider disputes, rather than pursue an open process under
which all entities who meet IDR entity requirements will be certified
to resolve patient-provider payment disputes. Moreover, HHS will
compensate SDR entities directly for their services under a contract
that complies with the Federal Acquisition Regulation (FAR) as further
implemented or supplemented by the HHS Acquisition Regulation.\97\
Through this contract process, HHS will assess the dispute resolution
entity for compliance with all applicable SDR entity certification
requirements. HHS is of the view that this approach will reduce the
overall cost of the program, which is funded primarily through
appropriations to HHS, reduce the administrative burden associated with
collecting fees from a large number of certified entities who may have
differing fee schedules, and will allow for HHS to control the cost of
the program to ensure that low-income individuals are able to access
the patient-provider dispute resolution process. For the first year of
the patient-provider dispute resolution program under PHS Act section
2799B-7, HHS anticipates contracting with between 1 and 3 SDR entities.
HHS is of the view that 1 to 3 SDR entities will be sufficient in the
first year to conduct the dispute resolution process for the
anticipated number of cases outlined in the Economic Impact and
Paperwork Burden section of these interim final rules. It will also
ensure through the contracting process that the volume estimates are
tenable for the contracted SDR entities. Additionally, given the
timeline required by statute to implement the patient-provider dispute
resolution process and the timeline under which these rules will become
effective, HHS is of the view that contracting with a limited number of
entities may be necessary to ensure the timely launch of the
program.\98\ HHS is of the view that attempting to procure
[[Page 56034]]
SDR entity services from more than 3 entities will increase the burden
associated with certifying IDR entities for the Federal IDR process
discussed in section III of this preamble and with contracting SDR
entities for the patient-provider dispute resolution process, and will
limit HHS' ability to effectively launch the programs in accordance
with statutory deadlines. HHS also is of the view that contracting with
more than 3 SDR entities in the first year will unsustainably increase
the administrative burden associated with launching both programs, and
may impose sufficient risk to cause delays in implementation.
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\97\ See 48 CFR, Chapter 3 (HHS-specific regulations governing
federal acquisitions for services).
\98\ See FAR 6.302-2 (allowing less than full and open
competition where an agency's need for services is of an unusual and
compelling urgency).
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For these reasons, HHS is of the view that contracting with a
limited number of SDR entities is preferable to adopting an ``any
willing provider'' model. Accordingly, through this contract process,
HHS will assess an entity's compliance with the SDR entity
certification requirements to ensure the entity satisfies the
certification criteria discussed later in this section of the preamble.
SDR entities will be assessed on whether they meet the applicable
certification requirements during the contracting process with HHS and
such process will be separate and distinct from the certification
process applicable to IDR entities that will provide IDR services for
providers, providers of air ambulance services, facilities, plans and
issuers as required under 26 CFR 54.9816-8T and 54.9817-2T, 29 CFR
2590.716-8 and 2590.717-2, and 45 CFR 149.510, and 45 CFR 149.520.
Although an SDR entity may apply for certification as an IDR entity,
SDR entities are not required to do so. However, consistent with the
statutory requirement, SDR entities will be required to meet the same
requirements as certified IDR entities, with a few exceptions outlined
later in this section of this preamble. SDR entities will be required
to report on those data elements from providers and facilities that HHS
deems necessary to accurately describe and assess the administration of
the patient-provider dispute resolution program. Therefore, the
requirements laid out in section III.D.5 of this preamble will also
apply to SDR entities as a condition of receiving a contract award from
HHS for the patient-provider dispute resolution program.
For example, PHS Act section 2799A-1(c)(4)(A)(v) requires a
certified IDR entity to maintain the confidentiality of individually
identifiable health information (IIHI) obtained in the course of
conducting determinations. Under these interim final rules, HHS
outlines certain standards related to confidentiality, including
security, privacy, and breach notification requirements that apply to
an IDR entity seeking certification. See section III.D.5 of this
preamble for further discussion on the applicable confidentiality
requirements. Under 45 CFR 149.620(d)(1), HHS specifies that an SDR
entity must satisfy the Federal IDR entity certification criteria
specified in 45 CFR 149.510(e), with a few exceptions specified in 45
CFR 149.620(d)(2). As part of this requirement, an SDR entity must
comply with all the confidentiality requirements that apply to
certified IDR entities in 26 CFR 54.9816-8T(e)(2)(v), 29 CFR 2590.716-
8(e)(2)(v) and 45 CFR 149.510(e)(2)(v). Similarly, the definitions
related to confidentiality in 45 CFR 149.510(a)(2) also apply for 45
CFR 149.620. Therefore, the definitions for ``breach,'' ``individually
identifiable health information (IIHI)'' and ``unsecured IIHI'' that
apply for IDR entities also apply for SDR entities. HHS seeks comment
on the confidentiality requirements for an SDR entity, including
whether additional requirements should be considered.
In addition, like IDR entities, SDR entities are required to comply
with other state and Federal laws regarding language access, to the
extent applicable. HHS reminds SDR entities that they, along with
providers and facilities that are recipients of Federal financial
assistance, must comply with Federal civil rights laws that prohibit
discrimination. These laws include Section 1557 of the Patient
Protection and Affordable Care Act, Title VI of the Civil Rights Act of
1964, and Section 504 of the Rehabilitation Act of 1973. Section 1557
of the Patient Protection and Affordable Care Act and title VI of the
Civil Rights Act of 1964 require covered entities to take reasonable
steps to ensure meaningful access to individuals with limited English
proficiency, which may include provision of language assistance
services, such as providing qualified interpreters or written
translations in paper or electronic form into languages other than
English. When language assistance services are provided, they must be
provided free of charge and be accurate and timely. Section 1557 of the
Patient Protection and Affordable Care Act and Section 504 of the
Rehabilitation Act of 1973 require covered entities to take appropriate
steps to ensure effective communication with individuals with
disabilities, including provision of appropriate auxiliary aids and
services in a timely manner and free of charge to the individual.
Auxiliary aids and services may include sign language interpreters,
large print materials, accessible information and communication
technology, open and closed captioning, and other aids or services for
persons who are blind or have low vision, or who are deaf or hard of
hearing. Information provided through information and communication
technology also must be accessible to individuals with disabilities,
unless certain exceptions apply. HHS also seeks comment on what
additional measures are necessary for persons in racial/ethnic minority
and underserved communities, including those with limited English
proficiency, those with disabilities who require information in
alternate and accessible formats, lesbian, gay, bisexual, transgender,
and queer (LGBTQ+) persons, and stakeholders who serve such
communities.
Unlike the process for certifying IDR entities, HHS intends to
contract only with SDR entities that will be able to conduct patient-
provider dispute resolution in all applicable states where the patient-
provider dispute resolution process will apply. As such, SDR entities
will need to submit information on their ability to operate nationwide
through the contract process. Additionally, IDR entity fees that
certified IDR entities will charge as the cost for providing dispute
resolution services will not apply in the case of SDR entities, which
will be paid for their services through contracts with HHS. Therefore,
SDR entities will not be required to submit a fee schedule for batched
and non-batched claims. Additionally, SDR entities will not be required
to submit policies and procedures regarding holding IDR entity fees in
a trust or escrow account, though they will still be required to submit
policies and procedures regarding holding administrative fees and remit
them to HHS in a manner specified by HHS.
Additionally, an SDR entity must also submit a conflict-of-interest
mitigation policy that will not apply to IDR entities. Given that HHS
intends to contract with a limited number of SDR entities under this
program, HHS is of the view that additional standards for conflict-of-
interest mitigation should apply to SDR entities, as there will likely
be fewer entities available to conduct dispute resolution. Therefore,
in addition to the requirement for certified IDR entities to submit
policies and procedures for the ongoing auditing, mitigation, and
reporting of conflicts of interest within their
[[Page 56035]]
organizations, SDR entities will be expected to include a mitigation
plan for situations when no one in the entire organization will be able
to conduct dispute resolution on a case due to an entity-level conflict
of interest, which could include utilizing a subcontractor without a
conflict of interest that meets SDR entity requirements to conduct the
patient-provider dispute resolution for that case. Since there is a
possibility that a single SDR entity will be contracted for this
process, or that all available SDR entities indicate a conflict of
interest that cannot be mitigated, HHS is of the view that additional
requirements must be applied through these regulations and the
contracting process to ensure that in the event that an entity-level
conflict of interest occurs, SDR entities will be able to initiate
strategies to fairly and impartially resolve disputes in the absence of
another available SDR entity. Through the acquisition process, HHS will
ensure compliance with FAR subpart 9.5 regarding organizational and
consultant conflicts of interest in order to mitigate the potential for
entity-level conflicts of interest that may preclude all available SDR
entities from fairly and impartially resolving disputes.
While details on expectations for documentation and review for
certified IDR entities will come through guidance, similar details and
documentation requests will be done through the acquisition process for
SDR entities. As such, all requirements laid out in this section and
the applicable requirements outlined in section III.D.5 of this
preamble for certified IDR entities will be assessed through the
Federal acquisition process to ensure SDR entities have sufficient
expertise and capabilities to conduct dispute resolution cases for the
patient-provider dispute resolution process.
In subsequent years, case volume and other factors as necessary
will be used by HHS to determine and adjust the number of contracted
SDR entities needed for the patient-provider dispute resolution
process. HHS is of the view that this approach will reduce the overall
cost and administrative oversight burdens of the program, which is
funded primarily through appropriations to HHS. Since contracting will
allow HHS to negotiate lower rates for conducting dispute resolution
cases with a limited number of entities, rather than paying set fee
schedules associated with each SDR entity as in the Federal IDR
process, HHS will be able to reduce both costs to HHS and
administrative burdens associated with collecting varying fees from a
large number of entities. HHS also is of the view that this approach
will allow HHS to control the fees assessed to uninsured (or self-pay)
individuals entering the patient-provider dispute resolution process to
ensure that low-income individuals can participate in the process.
HHS seeks comment on the SDR entity contracting process, including
the applicable certification requirements, specifically as to whether
these are the appropriate standards regarding the patient-provider
dispute resolution process, if additional standards should be applied,
and if so, what those standards should be.
6. Selection of an SDR Entity for Patient-Provider Dispute Resolution
PHS Act section 2799B-7 requires the Secretary of HHS to provide a
method to select a patient-provider dispute resolution entity to
conduct individual dispute resolutions between patients and providers.
As described more fully in section VI.B.5 of this preamble, during the
first year of the program, HHS expects to contract with between 1 to 3
SDR entities to conduct patient-provider dispute resolutions.
Similar to the IDR process and for the same reasons described in
section III.B.1 of this preamble, the general conflict-of-interest
standards laid out in section III.B.1 of this preamble will also apply
to SDR entities contracted by HHS for the patient-provider dispute
resolution process. These standards include the mandatory period which
prohibits personnel who have been a party to the payment determination
being disputed, or who were employees or agents of such a party within
1 year immediately preceding dispute resolution assignment, from being
assigned to a case.
As discussed in section VI.B.5 of this preamble, SDR entities will
also be required to have in place an approved mitigation plan for
addressing conflicts of interest. For example, such a mitigation plan
could include processes under which any specific dispute resolution
personnel who presents a conflict of interest could be walled off from
having any role in or knowledge of the relevant payment dispute. To
address conflicts of interest that exist at the entity level, the SDR
entity could design a plan under which it would subcontract payment
disputes to a different entity that meets SDR entity requirements. As
part of the contract process, and as discussed in section VI.B.5 of
this preamble, the SDR entity must submit specific mitigation plans
such as proof of a subcontractor who meets the SDR entity requirements
for HHS to assess, and approve as part of the acquisition process, and
in accordance with the conflict-of-interest requirements set forth in
FAR subpart 9.5. HHS is of the view that this approach will
sufficiently mitigate the potential that conflicts of interest that
exist to the extent that a case may not able to be resolved fairly and
impartially, because having a subcontractor provides an avenue for
cases to be sent for dispute resolution when the SDR entity has a
conflict of interest. HHS also is of the view that ensuring that
processes are in place to identify and address potential conflicts of
interest is important to ensure impartiality in payment determinations
and the timely and efficient resolution of disputes.
Upon receiving a request to initiate patient-provider dispute
resolution case from an uninsured (or self-pay) individual, HHS will
select 1 of the contracted SDR entities to serve as the entity to
conduct the dispute resolution process. Selection of an SDR entity that
will resolve a particular dispute will occur in round robin fashion to
ensure equal allocation of cases to SDR entities, unless conflicts of
interest arise. In the event that the assigned SDR entity has a
conflict of interest that cannot be sufficiently mitigated by applying
the SDR entity's conflicts mitigation plan, the next SDR entity in line
will be selected. HHS is of the view that this approach will help
ensure the selection process runs smoothly, supports the timely
resolution of disputes consistent with applicable regulations, and that
SDR entity caseloads are allocated efficiently. Upon receiving an
assignment from the Secretary of HHS to make a determination for an
item or service, the SDR entity shall ensure that no conflict of
interest exists, and in such case no conflict exists, the SDR entity
shall notify the uninsured (or self-pay) individual and the provider or
facility of the selection of the SDR entity as described in section
VI.B.4 of this preamble.
In the event that an SDR entity attests that a conflict of interest
exists in relation to an assigned payment dispute, the SDR entity must
notify the Secretary of HHS no later than 3 business days following
selection. Additionally, either party (the uninsured (or self-pay)
individual, or the provider or facility) may attest that a conflict of
interest exists in relation to the SDR entity assigned to a payment
dispute, in which case the SDR entity must notify the Secretary of HHS
no later than 3 business days following receipt of the attestation.
In the event a conflict of interest exists, HHS will then
automatically
[[Page 56036]]
select a different SDR entity from the remaining pool of contracted
entities using a round robin approach. If no other contracted SDR
entity, and no subcontracted entity, is able to provide the patient-
provider dispute resolution services due to conflicts of interest that
cannot be sufficiently mitigated or any other reason, HHS may seek to
contract with an additional SDR entity as needed, to conduct dispute
resolution in this case. HHS recognizes that while the Department
expects these particular situations to be very rare, contracting with
an additional SDR entity could take time and would make meeting the
required patient-provider dispute resolution timeframes challenging.
HHS notes that, as discussed in section VI.B.10 of this preamble, the
time periods specified in these interim final rules may be extended in
the case of extenuating circumstances at HHS' discretion on a case-by-
case basis if the extension is necessary to address delays due to
matters beyond the control of the parties or for good cause. In these
rare cases, HHS anticipates that it may be appropriate to exercise such
discretion if needed. For example, in the event that HHS needs to
contract with an additional SDR entity, the time periods specified in
this section may be extended at HHS' discretion to allow for HHS to
contract with that SDR entity. HHS seeks comment on this approach,
including comment on the feasibility of such approach and comment on
alternative approaches HHS should consider. HHS also seeks comment on
whether it is feasible or appropriate to seek assistance from the pool
of certified IDR entities to provide patient-provider dispute
resolution services in these circumstances.
These interim final rules also define certain terms related to
conflict-of-interest standards applicable to SDR entities certified and
contracted to resolve patient-provider disputes. Such an approach to
conflict of interest is similar to the approach taken by the Federal
IDR process discussed in section III.D.5 of this preamble. HHS is of
the view that maintaining consistent standards between the Federal IDR
process and the patient-provider dispute resolution process is a
straightforward approach and serves to minimize stakeholder confusion
over what the applicable standard will be. In general, a ``conflict of
interest'' means, with respect to a party to a payment determination,
or SDR entity, a material relationship, status, or condition of the
party, or SDR entity that impacts the ability of the SDR entity to make
an unbiased and impartial payment determination. For purposes of the
patient-provider dispute resolution process, a conflict of interest
exists when an SDR entity is: A provider or a facility, an affiliate or
a subsidiary of a provider or facility, or an affiliate or subsidiary
of a professional or trade association representing a provider or
facility. A conflict of interest also exists when an SDR entity, or any
personnel assigned to a determination, has a material familial,
financial, or professional relationship with a party to the payment
determination being disputed, or with any officer, director, or
management employee of the provider, the provider's group or practice
association, or the facility that is a party to the dispute. HHS is of
the view that these requirements are necessary to ensure that payment
disputes between an uninsured (or self-pay) individual and a provider
or facility are conducted by impartial third parties. HHS seeks comment
on this approach, including the feasibility of such approach, and
whether additional requirements related to conflict of interest should
be considered.
7. Payment Determination for Patient-Provider Dispute Resolution
i. Determination of Payment Amount Through Settlement
While the SDR entity payment determination is pending, HHS
recognizes that the two parties to the patient-provider dispute
resolution process (the uninsured (or self-pay) individual and the
provider or facility) may agree to resolve the dispute by settling on a
payment amount. Therefore, new 45 CFR 149.620(f)(1) states that at any
point after the dispute resolution process has been initiated but
before the date on which a determination is made by the SDR entity, the
parties can settle the payment amount through either an offer of
financial assistance or an offer to accept a lower amount, or an
agreement by the uninsured (or self-pay) individual to pay the billed
charges in full.
In the event that the parties agree to settle on a payment amount,
the provider or facility should notify the SDR entity through the
Federal IDR Portal, electronically, or in paper form, as soon as
possible, but no later than 3 business days after the date of the
agreement. The settlement notification must contain at a minimum, the
settlement amount, the date upon which settlement was reached, and
documentation demonstrating that the provider or facility and uninsured
(or self-pay) individual have agreed to the settlement. The settlement
notice must also document that the provider or facility has applied a
reduction to the uninsured (or self-pay) individual's settlement amount
that is equal to at least half the amount of the administrative fee
paid as discussed in section VI.B.8 of this preamble. Once the SDR
entity receives the notification of the settlement, the SDR entity
shall close the dispute resolution case as settled and the agreed upon
payment amount will apply for the items or services.
HHS also clarifies that payment of the billed charges (or a portion
of the billed charges) by the uninsured (or self-pay) individual (or by
another party on behalf of the uninsured (or self-pay) individual) does
not demonstrate agreement by the uninsured (or self-pay) individual to
settle at that amount or any other amount. For example, if the
uninsured (or self-pay) individual has already made payment or entered
into a payment plan and then chooses to enter dispute resolution, the
fact that they previously paid, or agreed to pay, all or part of the
billed charges may not be used by the provider or facility to prove
that a settlement has been reached to avoid the patient-provider
dispute resolution process.
HHS is of the view that providing an opportunity for the uninsured
(or self-pay) individual and the provider or facility to come to terms
on a payment amount that is mutually agreeable for the parties involved
is appropriate as it may help resolve payment disputes quickly without
the need for a determination by an SDR entity. Such a process can also
incentivize a provider or facility to offer to accept a lower amount or
to provide financial assistance to the uninsured (or self-pay)
individual. However, HHS clarifies that neither party (the uninsured
(or self-pay) individual or the provider or facility) is required to
negotiate a settlement for the billed charges, and the decision to
enter into a settlement on the payment amount is optional. In cases
where there is no settlement, the SDR entity will make a determination
as discussed in section VI.B.7.iii of this preamble.
HHS recognizes that to the extent that a provider or facility
believes that a settlement may be more beneficial for them than the SDR
entity determination, the provider or facility may be incentivized to
seek a settlement. While such an outcome may be desirable in that it
can lead to a quick resolution and could lead to provider or facility
offering to accept a lower payment amount or other financial assistance
to the uninsured (or self-pay) individual, HHS is concerned that the
uninsured (or
[[Page 56037]]
self-pay) individual, particularly those without representation, would
be at a disadvantage when negotiating with the provider or facility.
HHS seeks comment on these concerns, including whether additional
consumer protections should be considered, and ways HHS can increase an
uninsured (or self-pay) individual's access to effective
representation, through legal aid organizations or other groups.
ii. Determination of Payment Amount Through Patient-Provider Dispute
Resolution
As part of the SDR determination process, 45 CFR 149.620(f)(2)
requires that the health care provider or health care facility must
submit information to the SDR entity not later than 10 business days
after the receipt of the notice from the SDR entity initiating the
patient-provider dispute resolution process described in section
VI.B.4. This information must include: (1) A copy of the good faith
estimate provided to the uninsured (or self-pay) individual for the
items or services under dispute (the copy can be a photocopy or an
electronic image so long as the document is readable); (2) a copy of
the billed charges provided to the uninsured (or self-pay) individual
for items or services under dispute (the copy can be a photocopy or an
electronic image so long as the document is readable); and (3)
documentation demonstrating that the difference between the billed
charges and the expected charges in the good faith estimate reflects
the costs of a medically necessary item or service and is based on
unforeseen circumstances that could not have reasonably been
anticipated by the provider or facility when the good faith estimate
was provided. While the statute does not specify what a provider or
facility should provide to the SDR entity to inform the SDR entity's
determination decision or how long a provider or facility should have
to report such information, HHS is of the view that it is both
necessary and appropriate to require the provider or facility to
provide the copies of the bill and good faith estimate for the item or
service in question as such information can be helpful for the SDR
entity to verify the eligibility of the dispute in question. Although
the uninsured (or self-pay) individual will provide a copy of the bill
and good faith estimate, requiring the provider or facility to also
provide the bill and good faith estimate will allow the SDR entity to
verify the information in the bill and good faith estimate provided by
the uninsured (or self-pay) individual and identify any potential
discrepancies. HHS believes it is also necessary and appropriate to
provide a means for a provider or facility to submit documentation or
an explanation to support the billed charges, such as information
related to the patient's relevant medical history that is necessary to
demonstrate that the item or service is medically necessary and is
based on unforeseen circumstances that could not have reasonably been
anticipated by the provider or facility when the good faith estimate
was provided. HHS is of the view that such documentation from the
provider or facility would assist the SDR entity with making a fair
assessment whether the billed charge is appropriate because otherwise
the SDR entity would be unfamiliar with the facts that would allow the
SDR entity to assess medical necessity, and whether the need for the
items or services was foreseeable. The interim final rules require that
this information be submitted within 10 business days, this time period
is similar to the Federal IDR process requirements for submitting
documentation to support a dispute resolution determination as outlined
in PHS Act section 2799B-1. HHS is of the view that a 10-business-day
time period is sufficient for a provider or facility to gather and
submit the required information, as this information should be
documented as part of the individual's patient record.
Not later than 30 business days after receipt of the information
from the provider described in section 45 CFR 149.620(f)(2)(i), the SDR
entity must make a determination on the amount to be paid by such
uninsured (or self-pay) individual taking into account the requirements
described in section VI.B.7.iii of this preamble. The 30-business day
timeframe is also similar to the requirement in the Federal IDR process
in PHS Act section 2799A-1(c)(5) where not later than 30 business days
after the selection of the certified IDR entity, the certified IDR
entity must select one of the offers submitted by the plan or issuer
and the provider or facility to be the out-of-network rate for the item
or service. HHS is of the view that 30 business days should provide
sufficient time for an SDR entity to review the submitted information
and issue a determination. The SDR entity is required to assess the
information submitted by the provider or facility according to the
requirements described in 45 CFR 149.620(f)(3) and discussed in section
VI.B.7.iii of this preamble.
iii. Requirements for Determination
45 CFR 149.620(f)(3) sets forth the requirements for SDR entities
in making payment determinations. As described in section VI.A.3 of
this preamble, the itemized list of items or services in a good faith
estimate must reflect the expected charges from the convening provider
or facility and items and services reasonably expected to be provided
by co-providers or co-facilities and must be built upon accurate
information that was known at the time the good faith estimate was
given to the uninsured (or self-pay) individual. As a result, the SDR
entity should use the expected charges in the good faith estimate as
the presumed appropriate amount and unless the provider or facility
provides credible information justifying the difference between the
total billed charges and the good faith estimate by demonstrating that
the difference between the billed charges and the expected charges in
the good faith estimate for the item or service reflects the costs of a
medically necessary item or service and is based on unforeseen
circumstances that could not have reasonably been anticipated by the
provider or facility when the good faith estimate was provided. For
this purpose, information is credible if upon critical analysis the
information is worthy of belief and consists of trustworthy
information. This is the same standard the Departments are adopting at
26 CFR 54.9816-8T, 29 CFR 2590.716-8, and 45 CFR 149.510 for the
Federal IDR processes discussed in section III.D.4 of this preamble.
HHS is of the view that maintaining a consistent standard of review
among IDR entities and SDR entities, while still recognizing the
inherent differences in the respective processes based on the
applicable parties, minimizes program complexity and reduces the
potential for confusion among providers and facilities over the
applicable standards for review.
As stated previously, HHS acknowledges that unforeseen factors
during the course of treatment could result in additional items or
services furnished and could result in higher billed amounts after
receipt of care than was anticipated at the time the good faith
estimate was provided. HHS does not expect that the good faith estimate
would include charges for unanticipated items or services that could
occur due to unforeseen events. In cases where changes in the
underlying circumstances occur during treatment and would reasonably
result in higher than expected charges, the SDR entity may consider
additional factors that support charges for medically necessary items
or services. As information to demonstrate that the difference between
[[Page 56038]]
the billed charges and the expected charges for an item or service in
the good faith estimate reflects the costs of a medically necessary
item or service and is based on unforeseen circumstances that could not
have reasonably been anticipated by the provider or facility when the
good faith estimate was provided, providers or facilities should
provide documentation, which can include a written explanation,
detailing any change in circumstances, how that change resulted in a
higher billed charge than the expected charge for the item or service
in the good faith estimate, and why the billed charge reflects the cost
of a medically necessary item or service. HHS considered requiring the
provider or facility to provide only evidence that the difference
between the billed charges and the expected charges for the item or
service in the good faith estimate reflects the costs of a medically
necessary item or service, and not require the provider or facility
demonstrate the item or service is based on unforeseen circumstance
that could not have reasonably been anticipated when the good faith
estimate was provided. However, HHS is of the view that an item or
service that is medically necessary and could reasonably have been
anticipated should already be included on the good faith estimate and
without such information the uninsured (or self-pay) individual would
not have been provided with an accurate estimate of the expected
charges. HHS is of the view that not requiring the provider or facility
to demonstrate that the item or service could not have been anticipated
could incentivize a provider or facility to not list all items or
services on the good faith estimate which could lead to less-accurate
estimates provided to uninsured (or self-pay) individuals.
Uninsured (or self-pay) individuals may also submit additional
documentation through the Federal IDR portal, although they are not
required to provide documentation beyond the information included in
the initiation notice, such as the good faith estimate and the billed
charges.
The SDR entity must review any documentation submitted by the
uninsured (or self-pay) individual or their authorized representative,
and a provider or facility, and must make a determination as to whether
the provider or facility has provided credible information for each
billed item or service to demonstrate that the difference between the
billed charge and the expected charge in the good faith estimate
reflects the costs of a medically necessary item or service and is
based on unforeseen circumstances that could not have reasonably been
anticipated by the provider or facility when the good faith estimate
was provided. The SDR entity should make this determination separately
for each unique billed item or service. HHS is of the view that this
helps ensure that the SDR entity review is comprehensive and that the
facts and circumstances for each billed charge are considered by the
SDR entity. HHS is also of the view that this approach ensures that the
uninsured (or self-pay) individual is only billed charges that reflect
medically necessary items or services and are based on unforeseen
circumstances that could not have reasonably been anticipated by the
provider or facility when the good faith estimate was provided.
For any item or service where the billed charge is equal to or less
than the expected charge in the good faith estimate, the SDR entity
will determine the payment amount to be the billed charge. If the
billed charge is higher than the expected charge for an item or service
in the good faith estimate and the SDR entity determines the provider
or facility has not provided credible information that the difference
between the billed charge and the expected charge for the item or
service in the good faith estimate reflects the costs of a medically
necessary item or service and is based on unforeseen circumstances that
could not have reasonably been anticipated by the provider or facility
when the good faith estimate was provided, the SDR entity must
determine the amount to be paid by the uninsured (or self-pay)
individual for the item or service to be equal to the expected charge
for the item or service listed in the good faith estimate. If the SDR
entity determines that the provider or facility has provided credible
information that the difference between the billed charge and the
expected charge for the item or service in the good faith estimate
reflects the costs of a medically necessary item or service and is
based on unforeseen circumstances that could not have reasonably been
anticipated by the provider or facility when the good faith estimate
was provided, the SDR entity must select as the amount to be paid by
the uninsured (or self-pay) individual to be the lesser of: (1) The
billed charge; or (2) the median payment amount for the same or similar
service in the geographic area, as defined in 45 CFR 149.140(a)(7),
that is reflected in an independent database as defined in 45 CFR
149.140(a)(2), or if the amount reflected in the independent database
is less than the expected charge in the good faith estimate, the good
faith estimate amount.
In cases in which the SDR entity determines that the provider or
facility has provided credible information that difference between the
billed charge and the expected charge for the item or service in the
good faith estimate reflects the costs of a medically necessary item or
service that could not have reasonably been anticipated by the provider
or facility when the good faith estimate was provided, HHS considered
whether to always require the SDR entity to set the payment amount
equal to the billed charge. However, HHS is concerned that such an
approach may increase the incentive for providers and facilities to
inflate their billed charges, particularly in cases where the provider
or facility believes they can justify the additional billed charge.
Requiring the SDR entity to select as a payment amount the median
payment amount for the same or similar item or service in a geographic
area, if lower than the billed charge but higher than the expected
charge in the good faith estimate, ensures that the uninsured (or self-
pay) individual is protected from billed charges that are above the
market rate for items or services provided. HHS acknowledges that under
this approach an SDR entity can determine a payment amount lower than
the original billed charge in circumstances where a provider or
facility submits credible information justifying the additional item or
service as reflecting a medically necessary item or service and is
based on unforeseen circumstances that could not have reasonably been
anticipated by the provider or facility when the good faith estimate
was provided. HHS also recognizes that such an approach could increase
the incentive for the uninsured (or self-pay) individual to initiate
patient-provider dispute resolution even in cases where the uninsured
(or self-pay) individual believes the extra billed charges to be
justified. However, HHS is of the view that PHS Act section 2799B-7
establishes important consumer protections from unexpected billed
charges that are substantially in excess of the expected charges in the
good faith estimate, even in cases where the difference between the
billed charge and the expected charges in the good faith estimate may
reflect the costs of a medically necessary item or service and is based
on unforeseen circumstances that could not reasonably been anticipated
when the good faith estimate was provided. These protections ensure
that the uninsured (or self-pay) individual is protected from excessive
billed charges even
[[Page 56039]]
when such billed charges reflect a medically necessary item or service
and are based on unforeseen circumstances that could not reasonably
been anticipated when the good faith estimate was provided. In
addition, HHS is of the view that the median payment amount is a
reasonable payment amount, as the methodology was established to
calculate a fair market rate for an item or service, and although this
methodology was developed for group health plans and health insurance
issuers offering group or individual health insurance coverage, it can
also be leveraged to determine whether the billed charge is less than a
fair market price, instead of creating separate standards regarding
median rates as applied to the QPA and payment amounts applied to the
patient provider dispute resolution process.
For new items or services not originally listed on the good faith
estimate, if the SDR entity determines the provider or facility did not
provide credible information that demonstrates that the billed charge
for the new item or service reflects the costs of a medically necessary
item or service and is based on unforeseen circumstances that could not
have reasonably been anticipated by the provider or facility when the
good faith estimate was provided, the SDR entity will determine a
payment amount equal to $0. HHS is of the view that PHS Act section
2799B-7 establishes consumer protections for uninsured (or self-pay)
individuals in the event they receive surprise charges that are not
reflected in the good faith estimate. HHS is of the view that requiring
the uninsured (or self-pay) individual to pay for items or services
they did not anticipate, absent a determination that such a billed
charge is supported by credible information that the billed charge
reflects a medically necessary item or service and is based on
unforeseen circumstances that could not have reasonably been
anticipated by the provider or facility when the good faith estimate
was provided, would run counter to the protections intended in PHS Act
section 2799B-7. If the SDR entity determines that a provider or
facility has provided credible information that the billed charge for
new items or services that did not appear on the good faith estimate
reflects the costs of a medically necessary item or service that is
based on unforeseen circumstances that could not have reasonably been
anticipated by the provider or facility when the good faith estimate
was provided, then the SDR entity must determine the charge to be paid
by the uninsured (or self-pay) individual for the new item or service
as the lesser of two payment amounts: (1) The billed charge; or (2) the
median payment amount for the same or similar service in the geographic
area, as defined in 45 CFR 149.140(a)(7), that is reflected in an
independent database as defined in 45 CFR 149.140(a)(2).
After making a determination for all items or services subject to
patient-provider dispute resolution, the SDR entity must add together
the amounts to be paid for all items and services. As further discussed
in section VI.B.8 of this preamble, in cases in which the final amount
determined by the SDR entity is lower than the total billed charges,
the SDR entity must reduce the final amount by an amount equal to the
administrative fee amount paid by the individual (to account for the
administrative fee charged to the provider or facility) to calculate
the final payment determination amount to be paid by the uninsured (or
self-pay) individual for the items or services subject to the SDR
entity determination. HHS acknowledges that under this approach,
particularly in cases where the provider or facility submits credible
information to justify the additional billed charges, the SDR entity
may still determine a lower payment amount than the billed charge and
the provider or facility would end up paying an administrative fee in a
large portion of patient-provider dispute resolution cases. However,
HHS is of the view that the intent behind the consumer protections in
PHS Act section 2799B-7 is to protect the uninsured (or self-pay)
individual from unexpected billed charges that are substantially in
excess of the expected charges in the good faith estimate, and as a
result, the uninsured (or self-pay) individual should be held harmless
in cases where the process results in a lower payment amount.
Once the final payment determination amount has been calculated,
the SDR entity must inform the uninsured (or self-pay) individual and
the provider or facility using the Federal IDR portal, and depending on
the individual's or provider's or facility's preference, electronically
or by paper mail, of such determination, along with the SDR entity's
justification for making such a determination.
To provide an example of how the payment determination would
operate in practice, consider a situation in which an uninsured (or
self-pay) individual initiates the dispute resolution process against a
provider for services A, B, C, and D. Services A and B were listed on
the good faith estimate. The expected charge for service A was higher
than the billed charge for service A, the expected charge for service B
was lower than the billed charge for service B, and services C and D
were not included on the good faith estimate and are thus new services.
The difference between the total of the billed charges for services A,
B, C, and D and the total expected charges for services A and B
(services C and D were new services and not included in the good faith
estimate) was determined to be at least $400 more than the amount
listed in the good faith estimate, and thus these services were found
to be eligible for patient-provider dispute resolution. When the SDR
entity reviews the documentation submitted by the provider, because the
billed charge for service A is less than the expected charge for
service A, the SDR entity determines the amount to be paid to be equal
the billed charge for service A. If the SDR entity determines the
provider did not provide credible information that the difference
between the higher billed charge and the expected charge for service B
reflects the costs of a medically necessary item or service and is
based on unforeseen circumstances that could not have reasonably been
anticipated by the provider or facility when the good faith estimate
was provided, then the SDR entity determines the amount to be paid for
service B to be equal to the expected charge for service B on the good
faith estimate. If the SDR entity determines the provider did provide
credible information that billed charges for services C and D reflects
the costs of medically necessary items or services and are based on
unforeseen circumstances that could not have reasonably been
anticipated by the provider or facility when the good faith estimate
was provided, the SDR entity would determine the amounts to be paid for
services C and D. Due to services C and D being new services, and as a
result not having a corresponding expected charges in the good faith
estimate, the SDR entity shall determine the payment amounts for
services C and D to be the lesser of: (1) The billed charge; or (2) the
median payment amount for the same or similar service in that
geographic area, as defined in 45 CFR 149.140(a)(7), that is reflected
in an independent database as defined in 45 CFR 149.140(a)(2) (had
expected charges for services C or D been included in the good faith
estimate, the median payment amount for the same or similar service in
that geographic area, as defined in 45 CFR 149.140(a)(7), that is
reflected in an independent database as defined in 45 CFR 149.140(a)(2)
should not be considered if less than the expected charges for the
services
[[Page 56040]]
contained in the good faith estimate). The SDR entity would then add
together all the payment amounts determined for services A, B, C, and
D. Due to the uninsured (or self-pay) individual's payment amount being
determined to be lower than the initial billed charge, the SDR entity
adjusts the final determination amount to reduce it by an amount equal
to the uninsured (or self-pay) individual's administrative fee payment,
to calculate the final determination amount. The SDR entity then
notifies the uninsured (or self-pay) individual and the provider of the
determination, the determination amount, and the reasons for the
determination and closes the case.
In determining the median payment amount from an independent
database, the requirements and methodology set forth in 45 CFR
149.140(c)(3) apply. HHS is of the view that utilizing the same
methodology for the calculation of median rates for the QPA, when a
plan or issuer does not have sufficient internal information to
calculate the QPA, as the methodology for calculating the median
payment amounts under the patient-provider dispute resolution process
is reasonable and appropriate. This approach will allow an equivalent
standard to be applied across multiple instances where the regulation
refers to median rates, and will reduce confusion that may result from
conflicting standards or definitions. HHS is of the view that creating
a separate methodology specifically for the calculation of median
payment amounts, using an independent database, as they pertain to the
patient-provider dispute resolution process is unnecessary and
therefore SDR entities must use this methodology when determining a
median payment amount. HHS seeks comment on this methodology as a
reasonable way to calculate median payment amounts for purposes of the
patient-provider dispute resolution process.
HHS considered whether to allow the SDR entity to have discretion
to determine a payment amount lower than the expected charges in the
good faith estimate. However, HHS is of the view that such an approach
would result in less transparency and predictability for the uninsured
(or self-pay) individuals, providers, and facilities regarding the
outcome of the patient-provider dispute resolution process. PHS Act
sections 2799B-6 and 2799B-7 establishes a backstop for an uninsured
(or self-pay) individual that protects them from unexpected bills that
substantially exceed the expected charges in the good faith estimate.
Given that the provider or facility is required to provide the
uninsured (or self-pay) individual with a good faith estimate upon
scheduling or upon request prior to furnishing the items or services to
the individual. HHS is of the view that the good faith estimate
represents charges the uninsured (or self-pay) individual would likely
expect to pay for the items or services. Therefore, the good faith
estimate represents an appropriate amount to be determined as the
payment amount when the uninsured (or self-pay) individual prevails.
Additionally, setting the payment amount equal to the good faith
estimate protects the uninsured (or self-pay) individual from
unexpected billed charges in cases where the extra charges do not
reflect the costs of a medically necessary item or service that is
based on unforeseen circumstances that could not have reasonably been
anticipated by the provider or facility when the good faith estimate
was provided while providing predictability to uninsured (or self-pay)
individuals, providers and facilities on what to expect from the
patient-provider dispute resolution process. However, HHS recognizes
that such an approach may encourage providers or facilities to be
overinclusive regarding the list of expected charges in the good faith
estimate, thus leading to higher good faith estimates than they
otherwise would have provided.
HHS seeks comment on the approach for the determination of payment
amounts by the SDR entity, including the feasibility of the approach,
as well as comment on alternative approaches. HHS also seeks comment on
ways to reduce the incentives for providers and facilities to over
include items or services on the good faith estimate, and the
circumstances, if any, in which requiring the SDR entity to set a
payment amount below the expected charges in the good faith estimate
would be appropriate. HHS also seeks comment on the use of the median
amount for the same or similar service in the geographic area, as
defined in 45 CFR 149.140(a)(7), that is reflected in an independent
database as defined in 45 CFR 149.140(a)(2), including comment on the
feasibility of such an approach, and comment on whether a different
methodology should also be considered.
iv. Effects of Determination
Under the Federal IDR process established in PHS Act sections
2799A-1(c)(5)(E) and 2799A-2(c)(5)(D), determinations made by a
certified IDR entity are binding upon the parties involved, in the
absence of a fraudulent claim or evidence of misrepresentation of facts
presented to the IDR entity involved. PHS Act section 2799B-7
establishes a separate dispute resolution process to determine payment
amounts made to a provider or facility by an uninsured (or self-pay)
individual when the uninsured (or self-pay) individual is billed
charges substantially in excess of the expected charges in the good
faith estimate; however, the statute is silent regarding the effects of
such determinations. HHS is of the view that it is both necessary and
appropriate to similarly require that determinations made by SDR
entities be binding upon all parties involved, in the absence of a
fraudulent claim or evidence of misrepresentation of facts presented to
the SDR entity involved regarding such claim. HHS is of the view that
use of its general rulemaking authority to establish such requirements
is necessary and appropriate in order to implement the provisions of
PHS Act section 2799B-7 to ensure the consumer protections established
under PHS Act section 2799B-7 operate as intended. Without making the
determination binding, the consumer protections established in PHS Act
section 2799B-7 would be significantly diminished and the cost for
administering the program may outweigh the benefits. Therefore, under
45 CFR 149.620(f)(4), a determination made by an SDR entity will be
binding upon the parties involved, in the absence of a fraudulent claim
or evidence of misrepresentation of facts presented to the SDR entity
regarding such claim, except that the provider or facility may provide
financial assistance or agree to an offer for a lower payment amount
than the SDR entity's determination, or the individual may agree to pay
the billed charges in full, or the uninsured (or self-pay) individual
and the provider or facility may agree to a different payment amount.
HHS seeks comment on the approach regarding SDR entity determinations
being binding, including the feasibility of such approach, as well
comment on alternative approaches. HHS also seeks comment on subject of
judicial review. PHS Act section 2799A-1(c)(5)(E) requires that
determinations not be subject to judicial review, except in a case
described in any paragraphs (1) through (4) of section 10(a) of title
9, United States Code. HHS seeks comment on the feasibility or
desirability of adopting a similar application for the patient-provider
dispute resolution process, as well as comment on alternative
approaches.
8. Costs of Patient-Provider Dispute Resolution Process
PHS Act section 2799B-7, as added by the No Surprises Act, directs
the
[[Page 56041]]
Secretary of HHS to establish an administrative fee ``to participate in
the patient-provider dispute resolution process in such a manner as to
not create a barrier to an uninsured (or self-pay) individual's access
to such process.'' Aside from the administrative fee, discussed later
in this section, the No Surprises Act does not specifically address
requirements for how the costs for the SDR entity to conduct patient-
provider dispute resolution determinations (dispute resolution costs)
should be funded.
HHS considered various approaches with respect to how the dispute
resolution costs should be treated for the patient-provider dispute
resolution process. HHS recognizes that it is important for the SDR
entity to be appropriately compensated for providing patient-provider
dispute resolution services. HHS considered maintaining a similar fee
structure as in the Federal IDR process where the non-prevailing party
would be required to pay all the costs of the IDR entity. However, HHS
is of the view that requiring an uninsured (or self-pay) individual to
pay the entire dispute resolution costs in cases where the provider or
facility prevails in the dispute resolution process could be
prohibitive for individuals to access the dispute resolution process.
HHS is also concerned that requiring a provider or facility to pay
dispute resolution costs when they do not prevail could impose a burden
on the provider or facility and potentially provide an incentive for
the provider or facility to raise prices for uninsured (or self-pay)
individuals to account for potential dispute resolution costs or avoid
treating uninsured (or self-pay) individuals altogether.
HHS is also of the view that while the patient-provider dispute
resolution process is similar to the Federal IDR process in several
important ways, the patient-provider dispute resolution process does
have unique distinctions. In particular, while in the Federal IDR
process, both the providers (and providers of air ambulance services)
and the payers can initiate the IDR process, and both parties have an
incentive to resolve the dispute, in the patient-provider dispute
resolution process only the uninsured (or self-pay) individual can
initiate the dispute resolution process, and HHS is concerned that the
provider or facility would not have the same incentive to participate
in the dispute resolution process as the uninsured (or self-pay)
individual. Similarly, there will likely be a significant imbalance in
both power and knowledge between the provider or facility and the
uninsured (or self-pay) individual initiating the dispute resolution
process. As a result, HHS is of the view that a different approach to
dispute resolution costs is needed for the patient-provider dispute
resolution process. As a result, HHS determined that an approach where
HHS would pay dispute resolution costs by directly contracting with SDR
entities is the appropriate approach, as it would address the concerns
discussed earlier in this section of the preamble. HHS is also of the
view that such an approach will streamline the patient-provider dispute
resolution process and minimize potential burdens on uninsured (or
self-pay) individuals, and providers and facilities.
HHS is adopting an approach for the patient-provider dispute-
resolution process in which HHS will pay dispute resolution costs
through contracts with SDR entities. Such an approach ensures that the
uninsured (or self-pay) individual would not be required to pay dispute
resolution costs, and as a result, such costs would not pose a barrier
to accessing the dispute resolution process. Adopting such an approach
in which HHS pays the dispute resolution costs would minimize the
burdens placed on uninsured (or self-pay) individuals and on providers
or facilities, and reduce the incentives for providers and facilities
to increase prices or restrict an uninsured (or self-pay) individual's
access to needed care. Adopting an approach where the individual would
not be required to bear the dispute resolution costs would help ensure
that such costs would not be a barrier to the uninsured (or self-pay)
individual's access to the dispute resolution process.
Aside from dispute resolution costs, PHS Act section 2799B-7
requires that the Secretary of HHS establish an administrative fee to
participate in the patient-provider dispute resolution process in such
a manner as to not create a barrier to an uninsured (or self-pay)
individual to participate in such process. HHS is aware that not
requiring the uninsured (or self-pay) individual to pay dispute
resolution costs could lead to overutilization of the patient-provider
dispute resolution process; however, this concern is mitigated by
limiting the availability of the patient-provider dispute resolution
only to cases where the total billed charge for items or services per
provider or facility are billed in excess of the expected charges by at
least $400 more than the amount listed in the good faith estimate, as
discussed in section VI.B.2 of this preamble. In addition, HHS is of
the view that requiring parties to the dispute resolution process to
pay an administrative fee to offset some of the Federal costs for
implementing the patient-provider dispute resolution program is
appropriate. Such a requirement is also similar to the Federal IDR
process, which requires all parties to pay an administrative fee to
cover Federal costs; however, under that process, the fee is required
to equal the estimated costs to the Federal Government, while in the
patient-provider dispute resolution process the administrative fee is
required to be established so that it would not create a burden for the
uninsured (or self-pay) individual to participate in the dispute
resolution process.
HHS intends to assess an administrative fee on the non-prevailing
party (providers, facilities, and uninsured (or self-pay) individuals)
to the patient-provider dispute resolution process. For purposes of the
patient-provider dispute resolution process, the prevailing party means
the provider or facility when the SDR entity determines the total
amount to be paid to be equal to the total billed charges, whereas the
prevailing party means the uninsured (or self-pay) individual when the
SDR entity determines the total amount to be paid to be less than the
total billed charges. Upon the SDR entity determination, if the
uninsured (or self-pay) individual is the prevailing party, the SDR
entity would apply a reduction, equal to the administrative fee amount
paid by the individual, to the final determination amount to be paid by
the individual for the items or services. HHS is of the view that
requiring the non-prevailing party to pay the entire administrative fee
(either in a payment made directly to the SDR entity in the case of the
uninsured (or self-pay) individual, or in a reduction in the final
payment determination amount as in the case of the provider or
facility) ensures that both parties are treated the same with regards
to the administrative fee assessed. Additionally, requiring only the
non-prevailing party to pay the administrative fee will help ensure
that the party that prevails in dispute resolution is not penalized for
participating in the process. Under this approach, the uninsured (or
self-pay) individual who is the initiating party in the patient-
provider dispute resolution process will pay the administrative fee at
the process initiation through the SDR entity. HHS is of the view that
since the uninsured (or self-pay) individual is the initiating party,
waiting for the provider or facility to submit the administrative fee
prior to the SDR entity making a determination may result in undue
delays to the
[[Page 56042]]
process. In cases in which the uninsured (or self-pay) individual
prevails in dispute resolution, the SDR entity would apply a reduction
equal to the administrative fee paid by the individual to the final
determination amount to be paid by the individual for the items or
services. HHS is of the view that requiring the provider or facility to
pay the administrative fee to the uninsured (or self-pay) individual
through a reduction in the final determination amount to be paid is the
appropriate approach as it simplifies the number of transactions,
rather than requiring the provider or facility to provide a payment
directly to the SDR entity. This approach also ensures that in cases in
which the uninsured (or self-pay) individual prevails, the SDR entity
will reduce the amount the uninsured (or self-pay) individual
ultimately is required to pay for an item or services by the amount of
the administrative fee paid so that it is not left to the provider or
facility to apply the reduction equal to the administrative fee paid to
the final payment amount. In cases where the provider or facility
prevails in dispute resolution, the SDR entity would not reduce the
final payment amount by an amount equal to the amount of the
administrative fee paid by the uninsured (or self-pay) individual.
In cases described in section VI.B.7.i of this preamble where the
parties to dispute resolution agree to settle the payment amount prior
to the SDR entity making a determination, both parties will be
responsible for paying half the amount of the administrative fee. In
this case, the provider or facility will document in the settlement
notice described in section VI.B.7.i of this preamble that it has
reduced the settlement amount by at least half of the administrative
fee amount paid by the uninsured (or self-pay) individual.
HHS intends to establish an administrative fee in guidance in a
manner that will not create a barrier to an uninsured (or self-pay)
individual's access to the patient-provider dispute resolution process.
In setting the fee HHS is considering expected costs to HHS for
operating the patient-provider dispute resolution program, including
contractor costs, and costs to HHS for utilizing the Federal IDR portal
for patient provider dispute resolution cases. However, due to the
requirements in PHS Act section 2799B-7 that such administrative fee
must not pose a burden to participate for uninsured (or self-pay)
individual to participate in the patient-provider dispute resolution
process, HHS is of the view that it is necessary and appropriate to
limit the size of the administrative fee. As a result, HHS expects the
fee to be no more than $25, which HHS believes would allow HHS to
offset some of the costs of operating the dispute resolution process
while keeping the administrative fee low enough to ensure uninsured (or
self-pay) individuals are able to access the dispute resolution
process. HHS considered whether to base the administrative fee on
annual household income but is concerned that such an approach would
require an uninsured (or self-pay) individual to submit financial
documentation to verify their income which could significantly increase
complexity to initiate the dispute resolution process and could create
additional burdens for an uninsured (or self-pay) individual to
participate. HHS intends to evaluate patient-provider dispute
resolution case volume, contract costs, and other Federal costs for the
program and may adjust this fee in subsequent years through guidance to
ensure that the fee continues to mitigate overutilization of the
patient-provider dispute resolution process, offsets some of HHS's
costs of operating the dispute resolution process, and also does not
pose a burden for uninsured (or self-pay) individuals regarding
participation in the process. HHS seeks comment on this approach,
including comment on whether the administrative fee should be higher or
lower, the feasibility of the approach to collecting the administrative
fee, including comment on alternative approaches that HHS should
consider. HHS also seeks comment on ways to ensure public awareness of
the dispute resolution process, including the administrative fee and
how payments are handled, as well as comment on potential unintended or
disparate impacts of administrative costs on underserved and
underrepresented populations.
9. Deferral to State Patient-Provider Dispute Resolution Processes
The No Surprises Act establishes strong consumer protections for
uninsured (or self-pay) individuals to have access to the patient-
provider dispute resolution process in cases in which billed charges
substantially exceed expected charges in the good faith estimate. HHS
is of the view that PHS Act section 2799B-7 operates in such a way that
all uninsured (or self-pay) individuals, regardless of state, are
required to have at least the minimum protections set forth in the
statute. However, HHS has considered circumstances where states may
wish to develop their own processes for resolving disputes between
uninsured (or self-pay) individuals and providers or facilities. HHS is
of the view that when a state law is in effect that provides a process
for resolving disputes between an uninsured (or self-pay) individual
and a provider or facility that meets or exceeds the consumer
protections contained in PHS Act section 2799B-7, such a process should
continue to apply. In addition, HHS believes that such an approach is
consistent with other provisions of the No Surprises Act such as
allowing allow the application of a state law established to determine
the total amount payable under such a plan, coverage, or issuer for
certain emergency services. HHS is adding new 45 CFR 149.620(h) to
establish a process by which HHS will determine whether a state
patient-provider dispute resolution process provides at least the same
level of consumer protections as does the Federal process. HHS will
communicate with the state and determine whether a state law provides
for such a dispute resolution process, and ensure that such process
meets or exceeds certain minimum Federal requirements. If HHS
determines that the state has in effect a state law that meets or
exceeds the minimum Federal requirements, then HHS will defer to the
state process. In such case the patient-provider dispute resolution
process operated by HHS will not be available in that state. As further
discussed in section VI.B.5 of this preamble, as part of the
contracting and certification process for an SDR entity, the entity
must demonstrate the ability to operate nationwide, including the
ability to operate in states where a state process is terminated so
that uninsured (or self-pay) individuals continue to have access to a
process that meets Federal standards. HHS will direct any patient-
provider dispute resolution requests received by HHS from uninsured (or
self-pay) individuals in that state to the state process to adjudicate
the dispute resolution initiation request according to the state
process. HHS will assess such state process for compliance with the
minimum Federal standards to ensure any such state process includes the
same or greater level of consumer protection as would apply under the
Federal patient-provider dispute resolution process. If HHS determines
that such state process meets or exceeds the minimum Federal standards,
HHS will discuss such determination with the state as well as notify
the state in writing of such determination.
HHS considered what minimum requirements a state law must include
in order for HHS to determine that the state's law is at least as
consumer
[[Page 56043]]
protective as the protections contained in the No Surprises Act. At a
minimum, the state process should: (1) Be binding, unless the provider
or facility offers for the uninsured (or self-pay) individual to pay
lower amount than the determination amount; (2) take into consideration
a good faith estimate, that meets the minimum standards established
under 45 CFR 149.610, provided by the provider or facility to the
uninsured (or self-pay) individual; (3) have a fee to participate in
the patient-provider dispute resolution process that is equal to or
lower than the Federal administrative fee; and (4) have in place
conflict-of-interest standards that at a minimum meet the requirements
set forth in 45 CFR 149.620(d) and (e)(3).
In order to ensure that a state process continues to meet or exceed
the consumer protections contained in the No Surprises Act, HHS will
review changes to the state process on an annual basis (or at other
times if HHS receives information from the state that would indicate
the state process no longer meets the minimum Federal requirements) to
ensure the state process continues to meet or exceed the minimum
Federal standards. HHS is of the view that having a process to reassess
state dispute resolution processes is important for ensuring that
uninsured (or self-pay) individuals receive at least the same level of
protection as the Federal standard. In the event that the state process
is terminated, or HHS determines that it no longer meets the minimum
Federal requirements, HHS will make the Federal process available to
ensure that ensures the state's residents have access to a dispute
resolution process that meets the minimum Federal requirements.
Although the Federal process will be available for uninsured (or
self-pay) individuals except in states where HHS has made a
determination that the state has established a State process that
includes the same or greater level of consumer protection as would
apply under the Federal process, HHS recognizes that some states may
have in place other programs that seek to resolve payment disputes
between uninsured (or self-pay) individuals and providers or facilities
that do not meet the minimum Federal standards and thus would not take
the place of the Federal dispute resolution process. However, HHS notes
that nothing would prevent the uninsured (or self-pay) individual from
voluntarily choosing to use such state programs to resolve a payment
dispute instead of utilizing the Federal dispute resolution process.
HHS seeks comment on the approach to allow the HHS to defer to a state
established patient-provider dispute resolution process that meets
certain minimum Federal standards, including the feasibility and
appropriateness of such approach, and whether additional minimum
Federal standards should be considered.
10. Extension of Time Periods for Extenuating Circumstances
Similar to the provisions set forth in section III.D.8 in this
preamble for the Federal IDR process under Code section 9816(c)(9),
ERISA section 716(c)(9), PHS Act section 2799A-1(c)(9), and codified at
26 CFR 54.9816-8T(g), 29 CFR 2590.716-8(g), and 45 CFR 149.510(g), the
time periods specified in these interim final rules (other than the
time for payment of the administrative fees discussed in section VI.B.4
of this preamble) may be extended in the case of extenuating
circumstances at HHS' discretion on a case-by-case basis if the
extension is necessary to address delays due to matters beyond the
control of the parties or for good cause. Such extension may be
necessary if, for example, a natural disaster impedes efforts by
individuals, providers, and facilities to comply with the terms of
these interim final rules. Additionally, for the extension to be
granted, the parties must attest that prompt action will be taken to
ensure that the payment determination under this section is made as
soon as administratively practicable. The parties may request an
extension by submitting a request for an extension due to extenuating
circumstances, such as a natural disaster or other circumstances
impeding efforts to comply with the terms of these interim final rules,
through the Federal IDR portal if the extension is necessary to address
delays due to matters beyond the control of the parties or for good
cause.
11. Applicability of the Patient-Provider Dispute Resolution Process
The provisions in PHS Act section 2799B-7 require the patient-
provider dispute resolution process to be established by the Secretary
of HHS no later than January 1, 2022. Consistent with this statutory
provision, the requirements under 45 CFR 149.620 are applicable to
uninsured (or self-pay) individuals; providers, facilities, and
providers of air ambulance services; and SDR entities, beginning on or
after January 1, 2022. The interim final rules regarding SDR entity
certification at 45 CFR 149.620(a) and 45 CFR 149.620(d), are
applicable beginning on October 7, 2021 so that HHS can begin
certifying SDR entities before the patient-provider dispute resolution
process becomes applicable.
VII. Waiver of Proposed Rulemaking
Code section 9833, ERISA section 734, and PHS Act section 2792
authorize the Secretaries of the Treasury, Labor, and HHS
(collectively, the Secretaries), respectively, to promulgate any
interim final rules that they determine are necessary or appropriate to
carry out the provisions of chapter 100 of the Code, part 7 of subtitle
B of title I of ERISA, and title XXVII of the PHS Act.
Under the Administrative Procedure Act (APA) (5 U.S.C. 551 et
seq.), a general notice of proposed rulemaking is not required when an
agency for good cause finds that notice and comment procedures are
impracticable, unnecessary, or contrary to the public interest and
incorporates a statement of the finding and its reasons in the rule
issued. 5 U.S.C. 553(b)(B). In addition, section 553(d) ordinarily
requires a 30-day delay in the effective date of a final rule from the
date of its publication in the Federal Register. This 30-day delay in
effective date can be waived, however, if an agency finds good cause to
support an earlier effective date. Finally, Subtitle E of the Small
Business Regulatory Enforcement Fairness Act of 1996 (also known as the
Congressional Review Act or CRA) requires a delay in the effective date
for major rules unless an agency finds good cause that notice and
public procedure are impracticable, unnecessary, or contrary to the
public interest, in which case the rule shall take effect at such time
as the agency determines. 5 U.S.C. 801(a)(3), 808(2).
The Secretaries and the OPM Director have determined that it would
be impracticable and contrary to the public interest to delay putting
the provisions in these interim final rules in place until a full
public notice and comment process has been completed and find that
there is good cause to waive the delay in effective date for certain
provisions of these interim final rules.
The No Surprises Act was enacted on December 27, 2020, as title I
of Division BB of the Consolidated Appropriations Act, 2021. The IDR
and internal claims appeals and external review provisions generally
apply for plan years (in the individual market, policy years) beginning
on or after January 1, 2022. The provisions related to protections for
the uninsured generally apply beginning on January 1, 2022. Although
this effective date may have allowed for the regulations, if
promulgated with the full notice and comment rulemaking process, to be
applicable in time for the
[[Page 56044]]
applicability date of the provisions in the No Surprises Act, this
timeframe would not provide sufficient time for the regulated entities
to implement the requirements. The provisions related to the
certification of IDR and SDR entities, as described in the
Applicability Dates section of this final rule, apply beginning October
7, 2021.
These interim final rules require plans, issuers, providers,
facilities, and providers of air ambulance services to follow a certain
process in determining out-of-network payment amounts for certain
specified services. These regulations are intended to work in concert
with the protections against surprise billing already instituted in the
July 2021 interim final rules. Group health plans and health insurance
issuers offering group or individual health insurance coverage will
have to account for these changes in establishing premium or
contribution rates and in making other changes to benefit designs. In
some cases, issuers will need time to secure approval for required
changes in advance of plan or policy years.
These interim final rules also set up certification requirements
for IDR entities and requirements to which they must adhere in
selecting payment offers. IDR entities will need time to acquire the
necessary expertise and evidence of qualification to apply for
certification in order to be prepared to conduct payment determinations
for plan years beginning on or after January 1, 2022.
The Departments and OPM anticipate that plans and issuers will have
already taken into consideration the statutory provisions in the No
Surprises Act as they developed plan designs for 2022 and preliminary
rates. Issuing these rules as interim final rules, rather than as a
notice of proposed rulemaking, will allow plans and issuers to account
for the regulations as they finalize rates and plan offerings and will
allow IDR entities to seek certification and be available to take part
in the Federal IDR process when these interim final rules go into
effect.
Health plans and issuers, and providers, facilities and providers
of air ambulance services, require these rules to be in place to
determine the out-of-network rates for emergency services, services by
out-of-network providers at in-network facilities in certain
circumstances, and air ambulance services. Without these final rules,
providers, facilities and providers of air ambulance services will not
be able to resort to the Federal IDR process (and are no longer able to
balance bill patients), leaving the possibility that they will be
undercompensated for their services. Such undercompensation could
threaten the viability of these providers, facilities and providers of
air ambulance services. This in turn, could lead to participants,
beneficiaries and enrollees not receiving needed medical care,
undermining the goals of the No Surprises Act. Additionally, and for
the same reasons, the failure to promulgate this rule in a timely
fashion could lead to additional industry consolidation, potentially
driving health costs higher.
The Departments considered whether they could exercise enforcement
discretion while a rule was proposed and then finalized. However, the
No Surprises Act requires that the government set up and administer a
Federal IDR process to determine out-of-network rates. Therefore, the
Department must establish set rules for this process, including for the
certification of certified IDR entities, in order that certified IDR
entities, rather than the Departments, may determine out-of-network
rates as contemplated by the No Surprises Act.
These interim final rules place new requirements on providers,
facilities and providers of air ambulance services regarding how they
must initiate open negotiation and the Federal IDR process, as well as
what information they must provide to certified IDR entities when
engaging in the Federal IDR process. Providers, facilities, and
providers of air ambulance services require time to implement these new
requirements to ensure compliance by January 1, 2022.
In addition to the requirements for the Federal IDR process, these
interim final rules require providers and facilities to furnish a good
faith estimate of expected charges upon request or upon scheduling an
item or service. Providers and facilities are required to inquire if an
individual is enrolled in a group health plan, group or individual
health insurance coverage, or a Federal health care program, and if
enrolled in such plan or coverage, if the individual is seeking to have
a claim for such item or service submitted to such plan or coverage. In
the case that the individual is enrolled in such a plan or coverage
(and is seeking to have a claim for such an item or services submitted
to such plan or coverage), PHS Act section 2799B-6 requires that the
provider or facility furnish the good faith estimate to the
individual's plan or the issuer of the coverage to inform the advanced
explanation of benefits that plans and issuers are required to provide
a participant, beneficiary or enrollee under PHS section 2799A-1(f),
Code section 9816(f), and ERISA section 716(f).\99\ In the case that
the individual requesting or scheduling a good faith estimate for an
item or service is uninsured (or self-pay), these interim final rules
at 45 CFR 149.610 require providers and facilities to furnish the good
faith estimate to the individual. Providers and facilities will need
time to implement requirements for furnishing good faith estimates to
uninsured (or self-pay) individuals and time to develop processes for
sharing and receiving information required for the good faith estimate
with co-providers and co-facilities. Issuing these rules as interim
final rules, rather than as a notice of proposed rulemaking, should
allow providers and facilities to account for the regulations as they
implement requirements to inquire about an individual's enrollment in
[[Page 56045]]
health care coverage and to furnish a good faith estimate to an
uninsured (or self-pay) individual when these interim final rules goes
into effect.
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\99\ As stated in the August 20, 2021 FAQs issued by the
Departments, the Departments have received feedback from the public
about the challenges of developing the technical infrastructure
necessary for providers and facilities to transmit to plans and
issuers starting January 1, 2022 the good faith estimates required
under PHS Act section 2799B-6, which plans and issuers must then
include in the advanced explanation of benefits. Accordingly, until
rulemaking to fully implement this requirement to provide such a
good faith estimate to an individual's plan or coverage is adopted
and applicable, HHS will defer enforcement of the requirement that
providers and facilities provide good faith estimate information for
individuals enrolled in a health plan or coverage and seeking to
submit a claim for scheduled items or services to their plan or
coverage. Additionally, stakeholders have requested that the
Departments delay the applicability date of Code section 9816(f),
ERISA section 716(f), and PHS Act section 2799A-1(f) until the
Departments have established standards for the data transfer between
providers and facilities and plans and issuers and have given enough
time for plans and issuers and providers and facilities to build the
infrastructure necessary to support the transfers. The Departments
agree that compliance with these sections is likely not possible by
January 1, 2022, and therefore intend to undertake notice and
comment rulemaking in the future to implement these provisions,
including establishing appropriate data transfer standards. Until
that time, the Departments will defer enforcement of the requirement
that plans and issuers must provide an advanced explanation of
benefits. HHS will investigate whether additional interim solutions
for insured consumers are feasible. The Departments note that any
rulemaking to fully implement Code section 9816(f), ERISA section
716(f), and PHS Act sections 2799A-1(f) and 2799B-6(2)(A) will
include a prospective applicability date that provides plans,
issuers, providers, facilities, and providers of air ambulance
services with a reasonable amount of time to comply with new
requirements. HHS encourages states that are primary enforcers of
these requirements with regard to providers and issuers to take a
similar enforcement approach, and will not determine that a state is
failing to substantially enforce these requirements if it takes such
an approach. See FAQs about Affordable Care Act and Consolidated
Appropriations Act, 2021 Implementation Part 49 (August 20, 2021),
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-49.pdf and https://www.hhs.gov/guidance/document/faqs-about-affordable-care-act-and-consolidated-appropriations-act-2021-implementation.
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These interim final rules provide further protections for uninsured
(or self-pay) individuals by requiring the Secretary of HHS to
establish a process (patient-provider dispute resolution) under which
an uninsured (or self-pay) individual may seek a determination from a
certified dispute resolution entity for billed charges in excess of the
good faith estimate. These interim final rules also place new
requirements on uninsured (or self-pay) individuals, and providers or
facilities regarding how they must initiate patient-provider dispute
resolution, what information they must provide to dispute resolution
entities for the dispute resolution process, and costs associated with
patient-provider dispute resolution. Similar to the Federal IDR
process, these interim final rules also establish certification
requirements for SDR entities and requirements to which they must
adhere in determining payment amounts. SDR entities will need time to
acquire the necessary expertise, and enter into a contract with HHS to
provide patient-provider dispute resolution. Issuing these rules as
interim final rules, rather than as a notice of proposed rulemaking and
waiving the delay in effective date for the provisions related to SDR
certification will allow SDR entities to account for the regulations as
they seek to contract with HHS and be available for patient-provider
dispute resolution determinations when the related provisions in these
interim final rules go into effect. Further, uninsured (or self-pay)
individuals, providers, and facilities will need to understand what is
required of them to engage in the patient-provider dispute resolution
process when the interim final rules go into effect.
For the foregoing reasons, the Departments and OPM have determined
that it is impracticable and contrary to the public interest to engage
in full notice and comment rulemaking before these interim final rules
become effective, and that it is in the public interest to promulgate
interim final rules. Further, for the same reasons as authorized by
section 808(2) of the CRA, the Departments find it is impracticable and
contrary to the public interest not to waive the delay in effective
date for certain provisions of this IFC under section 801 of the CRA.
Therefore, the Departments find there is good cause to waive the CRA's
delay in effective date pursuant to section 808(2) of the CRA and
establish certain policies in this IFC applicable as of the date of
display at the Office of the Federal Register.
VIII. Economic Impact and Paperwork Burden
A. Summary
The Departments and OPM have examined the effects of these interim
final rules as required by Executive Order 13563 (76 FR 3821, January
21, 2011, Improving Regulation and Regulatory Review); Executive Order
12866 (58 FR 51735, October 4, 1993, Regulatory Planning and Review);
the Regulatory Flexibility Act (September 19, 1980, Pub. L. 96-354);
section 1102(b) of the Social Security Act (42 U.S.C. 1102(b)); section
202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995, Pub.
L. 104-4); Executive Order 13132 (64 FR 43255, August 10, 1999,
Federalism); and the Congressional Review Act (5 U.S.C. 804(2)).
B. Executive Orders 12866 and 13563
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health, and safety effects; distributive impacts; and equity).
Executive Order 13563 emphasizes the importance of quantifying costs
and benefits, reducing costs, harmonizing rules, and promoting
flexibility.
Under Executive Order 12866, ``significant'' regulatory actions are
subject to review by OMB. Section 3(f) of the Executive Order defines a
``significant regulatory action'' as an action that is likely to result
in a rule: (1) Having an annual effect on the economy of $100 million
or more, or adversely and materially affecting a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or state, local, or tribal governments or communities (also
referred to as ``economically significant''); (2) creating a serious
inconsistency or otherwise interfering with an action taken or planned
by another agency; (3) materially altering the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive Order. Based on the
Departments' estimates, OMB's Office of Information and Regulatory
Affairs has determined this rulemaking is ``economically significant''
as measured by the $100 million threshold, and hence also a major rule
under Subtitle E of the Small Business Regulatory Enforcement Fairness
Act of 1996 (also known as the Congressional Review Act). Accordingly,
the Departments have prepared a Regulatory Impact Analysis that, to the
best of our ability, presents the costs and benefits of this
rulemaking.
1.1. Need for Regulation
A surprise medical bill is an unexpected bill from a health care
provider or facility that occurs when a participant, beneficiary, or
enrollee receives medical services from a provider or facility that,
generally unbeknownst to the participant, beneficiary, or enrollee, is
a nonparticipating provider or facility with respect to the
individual's coverage. In the context of this discussion, medical
services include air ambulance services. Surprise bills usually occur
in situations where a patient is unable to choose a health care
provider, emergency facility, or provider of air ambulance services.
When they are unable to choose, they are unable to ensure they only
receive care from providers or emergency facilities participating in
their plan's or coverage's network.
Surprise bills can cause significant financial hardship and cause
individuals to forgo care. A recent survey revealed that two-thirds of
adults worry about being able to afford unexpected medical bills for
themselves and their families, and 41 percent of adults with health
insurance received a surprise medical bill in the previous 2
years.\100\ A project carried out by Vox, a news and opinion website,
which collected emergency department medical bills reported instances
of accident victims who received care at out-of-network hospitals and
received bills of over $20,000.\101\ These challenges may be more
keenly experienced by minority and underserved communities, which are
more likely to experience poor communication, underlying mistrust of
the medical system, and lower levels of patient engagement than other
[[Page 56046]]
populations.\102\ Communities experiencing poverty and other social
risk factors are particularly impacted as surprise medical bills can
negatively affect consumers' abilities to eliminate debt and create
wealth, and ultimately can impact a family for generations.\103\
Policies that address the social risk factors and other barriers
underserved communities face to accessing, trusting, and understanding
health care costs and coverage can reduce disparities and promote
health equity.\104\
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\100\ Pollitz K., et al., US Statistics on Surprise Medical
Billing. JAMA. 2020;323(6):498. doi:10.1001/jama.2020.0065.
\101\ Kliff S., Surprise medical bills, the high cost of
emergency department care, and the effects on patients [published
online August 12, 2019]. JAMA Intern Med. doi:10.1001/
jamainternmed.2019.3448.
\102\ Butler S., Sherriff N. How poor communication exacerbates
health inequities and what to do about it. Brookings Institution:
Report (February 22, 2021). https://www.brookings.edu/research/how-poor-communication-exacerbates-health-inequities-and-what-to-do-about-it/; Hamel, L., Lopes, L., Mu[ntilde]ana, C., Artiga, S.,
Brodie, M. Race, Health, and COVID-19: The Views and Experiences of
Black Americans. Kaiser Family Foundation (October 2020). https://files.kff.org/attachment/Report-Race-Health-and-COVID-19-The-Views-and-Experiences-of-Black-Americans.pdf; and Shen M.J., Peterson
E.B., Costas-Mu[ntilde]iz R. et al. The Effects of Race and Racial
Concordance on Patient-Physician Communication: A Systematic Review
of the Literature. J. Racial and Ethnic Health Disparities 5, 117-
140 (2018). https://doi.org/10.1007/s40615-017-0350-4.
\103\ Taylor, J., Racism, inequality, and health care for
African Americans. The Century Foundation: Report (December 19,
2019). https://tcf.org/content/report/racism-inequality-health-care-african-americans/; and Chavis, B., Op-Ed: Big insurance must help
end surprise medical billing. blackpressUSA (February 24, 2020).
https://blackpressusa.com/op-ed-big-insurance-must-help-end-surprise-medical-billing/.
\104\ P[eacute]rez-Stable E.J., El-Toukhy S., Communicating with
diverse patients: How patient and clinician factors affect
disparities. Patient Educ Couns. 2018;101(12):2186-2194.
doi:10.1016/j.pec.2018.08.021; McNally, M., Confronting disparities
in access to health care for underserved populations. MedCity News
(February 22, 2021). https://medcitynews.com/2021/02/confronting-disparities-in-access-to-healthcare-for-underserved-populations-in-2021/.
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It has become common practice in the health care system for plans,
issuers, and FEHB carriers to negotiate with health care providers.
Plans, issuers, and FEHB carriers offer preference to these providers
by listing them as ``in-network providers,'' and in return, providers
charge discounted rates to the plans, issuers, and FEHB carriers.\105\
Joining a plan's, issuer's, or FEHB carrier's network assures providers
of patient volume in exchange for lower reimbursements. However, for
specialties for which consumers typically do not shop, such as services
rendered by emergency departments, patient volume does not depend on
whether specific providers are in-network.\106\ There is less of an
incentive for these providers to engage in negotiations with plans,
issuers, and FEHB carriers.\107\ One study looked at claims data from a
large commercial issuer for the period 2010-2016 and found that over 39
percent of emergency department visits to in-network hospitals resulted
in an out-of-network bill, and 37 percent of inpatient admissions to
in-network hospitals resulted in at least one out-of-network bill.\108\
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\105\ Greaney, Thomas. ``Surprise Billing: a Window into the
U.S. Health Care System.'' American Bar Association. (September
2020). https://www.americanbar.org/groups/crsj/publications/
human_rights_magazine_home/health-matters-in-elections/surprise-
billing/
#:~:text=The%20%E2%80%9Csurprise%E2%80%9D%20typically%20occurs%20when
,the%20difference%20between%20what%20the.
\106\ Cooper, Z. et al. ``Surprise! Out-of-Network Billing for
Emergency Care in the United States.'' National Bureau of Economic
Research: Working Paper 23623 (July 2017). https://www.nber.org/papers/w23623.
\107\ Greaney, Thomas. ``Surprise Billing: a Window into the
U.S. Health Care System.'' American Bar Association. (September
2020). https://www.americanbar.org/groups/crsj/publications/
human_rights_magazine_home/health-matters-in-elections/surprise-
billing/
#:~:text=The%20%E2%80%9Csurprise%E2%80%9D%20typically%20occurs%20when
,the%20difference%20between%20what%20the.
\108\ Sun EC, Mello MM, Moshfegh J, Baker LC, Assessment of Out-
of-Network Billing for Privately Insured Patients Receiving Care in
In-Network Hospitals. JAMA Intern Med. 2019; 179(11):1543-1550
(2019). doi:10.1001/jamainternmed.2019.3451.
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Since the passage of the Emergency Medical Treatment and Labor Act
(EMTALA) in 1986, Medicare-participating hospitals are required to
provide emergency services, regardless of patients' abilities to
pay.\109\ Because of emergency physicians' legal obligation under
EMTALA, and the inability of patients to make treatment decisions,
including by selecting providers, in emergency settings, there are
fewer incentives for emergency providers to contract with issuers.\110\
A large portion of emergency providers' costs are distributed to
patients with health benefits, providing justification for plans,
issuers, and FEHB carriers to offer smaller networks. Consequently, in
recent years, plans, issuers, and FEHB carriers have been offering
narrower networks alongside larger discounts, resulting in lower
premiums but with fewer in-network options for consumers.\111\
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\109\ Centers for Medicare and Medicaid Services. ``Emergency
Medical Treatment & Labor Act (EMTALA).'' (March 2021). https://
www.cms.gov/Regulations-and-Guidance/Legislation/
EMTALA#:~:text=In%201986%2C%20Congress%20enacted%20the,regardless%20o
f%20ability%20to%20pay.
\110\ Brannon, Ike and David Kemp. ``The Potential Pitfalls of
Combatting Surprise Billing.'' CATO Institute. (Fall 2019). https://www.cato.org/sites/cato.org/files/2019-10/regulation-v42n3-1-updated.pdf.
\111\ Brannon, Ike and David Kemp. ``The Potential Pitfalls of
Combatting Surprise Billing.'' CATO Institute. (Fall 2019). https://www.cato.org/sites/cato.org/files/2019-10/regulation-v42n3-1-updated.pdf. See also Polsky, D, Cidav Z., Swanson A. ``Marketplace
Plans With Narrow Physician Networks Feature Lower Monthly Premiums
Than Plans With Larger Networks.'' Health Affairs. (October 2016).
https://www.healthaffairs.org/doi/10.1377/hlthaff.2016.0693.
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An additional factor contributing to the current environment is the
increasing participation of private equity groups in the health care
market through the acquisition of physician groups.\112\
Anesthesiology, emergency medicine, family practice, and dermatology
were the most common medical specialties in acquired physician
groups.\113\ The private equity business model often centers on risky
investments with short-term horizons. These firms often take on large
amounts of debt to acquire an asset, then introduce structural and
operational changes to extract value or increase revenue growth
potential in the aim of selling the asset for a higher valuation.\114\
These firms often take on legally complex governance structures
designed to protect the private equity firms from regulatory
liability.\115\ By 2013, two private equity firms accounted for 30
percent of the physician staffing market.\116\ One study found that in
2017, hospitals acquired by private equity groups accounted for 7.5
percent of all nongovernmental hospitals and 11 percent of all
discharges from nongovernmental hospitals.\117\ Private equity groups
are also involved in air ambulance transport services. In 2018, two of
the three
[[Page 56047]]
largest air ambulance transport companies were owned by private equity
firms.\118\
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\112\ Zhu, Jane M., Lynn M. Hua, and Daniel Polsky. ``Private
Equity Acquisitions of Physician Medical Groups across Specialties,
2013-2016.'' 323 JAMA 7 (2020): 663-665.
\113\ Zhu, Jane M., Lynn M. Hua, and Daniel Polsky. ``Private
Equity Acquisitions of Physician Medical Groups across Specialties,
2013-2016.'' 323 JAMA 7 (2020): 663-665.
\114\ Konda S, Francis J, Motaparthi K, Grant-Kels JMGroup for
Research of Corporatization and Private Equity in Dermatology.
``Future Considerations for Clinical Dermatology in the Setting of
21st Century American Policy Reform: Corporatization and the Rise of
Private Equity in Dermatology.'' Journal of the American Academy of
Dermatology, 2019;81(1):287-296.e8. https://www.jaad.org/article/S0190-9622(18)32667-7/fulltext.
\115\ Appelbaum E, Batt R. ``Private Equity Buyouts in
Healthcare: Who Wins, Who Loses?'' Institute for New Economic
Thinking. (March 2020). https://www.ineteconomics.org/research/research-papers/private-equity-buyouts-in-healthcare-who-wins-who-loses.
\116\ Appelbaum E, Batt R. ``Private Equity Buyouts in
Healthcare: Who Wins, Who Loses?'' Institute for New Economic
Thinking. (March 2020). https://www.ineteconomics.org/research/research-papers/private-equity-buyouts-in-healthcare-who-wins-who-loses.
\117\ Offodile II, Anaeze C., et al. ``Private Equity
Investments in Health Care: An Overview of Hospital and Health
System Leveraged Buyouts, 2003-17.'' Health Affairs, Vol. 40(5),
(May 2021). https://www.healthaffairs.org/doi/10.1377/hlthaff.2020.01535.
\118\ Appelbaum E, Batt R. ``Private equity buyouts in
healthcare: Who wins, who loses?'' Institute for New Economic
Thinking. (March 2020). https://www.ineteconomics.org/research/research-papers/private-equity-buyouts-in-healthcare-who-wins-who-loses.
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In addition, some private equity firms may choose not to
participate in plans' and issuers' networks in order to reap higher
payments.\119\ Private equity-owned hospitals have been found to charge
higher prices.\120\ According to one study, 204 private equity-owned
hospitals had an annual net income averaging $8.5 million prior to
their acquisition. After private equity groups purchased the hospitals,
their net income rose to $12.9 million.\121\ This represents a 52
percent increase in net income, on average. Another study found that
the entry of two private equity firms into the hospital sector
increased out-of-network billing rates by more than 30 and 80
percentage points, respectively, from 2011 to 2015.\122\ The study also
found that the payments that one private equity firm received for
emergency department physicians from insurers increased by 122 percent
and patient cost-sharing payments to emergency department (ED)
physicians increased by 83 percent. Furthermore, some hospitals and
providers do not accept private health insurance coverage. For example,
one study found that 5 percent of physicians participated in cash-only
practices in 2020.\123\ When billing out-of-network, these providers
who choose to remain out-of-network can charge much higher fees than
what public or private payers typically allow.\124\
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\119\ Cooper, Zack, Fiona Scott Morton, and Nathan Shekita.
``Surprise! Out-Of-Network Billing for Emergency Care in the United
States.'' 128 Journal of Political Economy 9. (2020).
\120\ Bruch, Joseph D., Suhas Gondi, and Zirui Song. ``Changes
in Hospital Income, Use, and Quality Associated with Private Equity
Acquisition.'' 180 JAMA Internal Medicine 11 (2020): 1428-1435.
\121\ Bruch, Joseph D., Suhas Gondi, and Zirui Song. ``Changes
in Hospital Income, Use, and Quality Associated with Private Equity
Acquisition.'' 180 JAMA Internal Medicine 11 (2020): 1428-1435.
\122\ Cooper, Zack, Fiona Scott Morton, and Nathan Shekita.
``Surprise! Out-Of-Network Billing for Emergency Care in the United
States.'' 128 Journal of Political Economy 9. (2020).
\123\ Oliver, Eric. ``What Percent Of Physicians are in a Cash-
Only Practice?--9 Stats.'' Becker's ASC Review (2021). https://www.beckersasc.com/benchmarking/what-percent-of-physicians-are-in-a-cash-only-practice-9-stats.html.
\124\ Cooper, Zack, Fiona Scott Morton, and Nathan Shekita.
``Surprise! Out-Of-Network Billing for Emergency Care in the United
States.'' 128 Journal of Political Economy 9. (2020).
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The Departments and OPM seek comment on how private equity
ownership structures may be affected by the Federal IDR process.
Surprise billing represents a market failure, as often patients
either do not have the option to seek care elsewhere or must make
decisions based on incomplete information about the network status of
providers and associated costs.\125\ This market failure is exacerbated
by the fact that patients must rely on the guidance of the provider,
insurer, or plan, which have financial incentives that can be contrary
to the patient's financial interests.\126\
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\125\ Assistant Secretary for Planning and Evaluation. ``HHS
Secretary's Report on: Addressing Surprise Medical Billing.'' Office
of Health Policy. (July 2020). https://aspe.hhs.gov/system/files/pdf/263871/Surprise-Medical-Billing.pdf.
\126\ Assistant Secretary for Planning and Evaluation. ``HHS
Secretary's Report on: Addressing Surprise Medical Billing.'' Office
of Health Policy. (July 2020). https://aspe.hhs.gov/system/files/pdf/263871/Surprise-Medical-Billing.pdf.
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As of February 28, 2021, 18 states had implemented comprehensive
legislation \127\ regulating surprise billing, 15 states had
implemented limited legislation, and 14 states had implemented an IDR
system regarding out-of-network payments.\128\ However, even in states
that have passed legislation, states cannot regulate health plans that
are self-insured by employers.\129\
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\127\ The states that have passed comprehensive legislation
include California, Colorado, Connecticut, Florida, Georgia,
Illinois, Maine, Maryland, Michigan, New Hampshire, New Jersey, New
Mexico, New York, Ohio, Oregon, Texas, Virginia, and Washington. The
Commonwealth Fund. ``State Balance-Billing Protections.'' (February
2021). https://www.commonwealthfund.org/sites/default/files/2021-03/Hoadley_state_balance_billing_protections_table_02052021.pdf.
\128\ The states that have passed limited legislation include
Arizona, Delaware, Indiana, Iowa, Massachusetts, Minnesota,
Mississippi, Missouri, Nebraska, Nevada, North Carolina,
Pennsylvania, Rhode Island, Vermont, and West Virginia. The
Commonwealth Fund. ``State Balance-Billing Protections.'' (February
2021). https://www.commonwealthfund.org/sites/default/files/2021-03/Hoadley_state_balance_billing_protections_table_02052021.pdf.
\129\ The Commonwealth Fund. ``State Balance-Billing
Protections.'' (November 2020). https://www.commonwealthfund.org/sites/default/files/2020-12/Hoadley_state_balance-billing_protections_11302020.pdf.
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On December 27, 2020, the Consolidated Appropriations Act, 2021
(CAA), which includes the No Surprises Act, was enacted.\130\ The No
Surprises Act provides Federal protections against surprise billing and
limits out-of-network cost sharing under many of the circumstances in
which surprise bills arise most frequently. The No Surprises Act added
new provisions applicable to group health plans and health insurance
issuers offering group or individual health insurance coverage in
Subchapter B of chapter 100 of the Code, Part 7 of ERISA, and Part D of
title XXVII of the PHS Act. Section 102 of the No Surprises Act added
Code section 9816, ERISA section 716, and PHS Act section 2799A-1,
which contain limitations on cost sharing and requirements regarding
the timing of initial payments for emergency services furnished by
nonparticipating providers and emergency facilities, and for
nonemergency services furnished by nonparticipating providers at
certain participating health care facilities. Section 102 of the No
Surprises Act also added 5 U.S.C. 8902(p) requiring FEHB carriers,
facilities, and providers to comply with requirements described in
applicable provisions with respect to FEHB covered individuals. Section
103 of the No Surprises Act amended Code section 9816, ERISA section
716, and PHS Act section 2799A-1 to establish a Federal IDR process
that allows plans and issuers and nonparticipating providers and
facilities to resolve disputes regarding out-of-network rates. Section
105 of the No Surprises Act created Code section 9817, ERISA section
717, and PHS Act section 2799A-2, which contain limitations on cost
sharing and requirements for the timing of initial payments for
nonparticipating providers of air ambulance services and allow plans
and issuers and providers of air ambulance services to access the
Federal IDR process described in Code section 9816, ERISA section 716,
and PHS Act section 2799A-1. The No Surprises Act provisions that apply
to health care providers and facilities, and providers of air ambulance
services, such as prohibitions on balance billing for certain items and
services and requirements related to disclosures about balance billing
protections, were added to title XXVII of the PHS Act in a new part E.
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\130\ Public Law 116-260 (December 27, 2020).
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On July 13, 2021, the Departments and OPM published the July 2021
interim final rules.\131\ The July 2021 interim final rules implemented
provisions of the No Surprises Act to protect participants,
beneficiaries, and enrollees in group health plans and group and
individual health insurance coverage from surprise medical bills when
they receive emergency services, non-emergency services from
nonparticipating providers at certain participating facilities, and air
ambulance services, under certain circumstances.
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\131\ 86 FR 36872 (July 13, 2021).
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These interim final rules build upon the protections in the July
2021 interim
[[Page 56048]]
final rules and implement the Federal IDR provisions under Code
sections 9816(c) and 9817(b), ERISA sections 716(c) and 717(b), PHS Act
sections 2799A-1(c) and 2799A-2(b), and 5 U.S.C. 8902(p). The Federal
IDR process will permit group health plans, health insurance issuers
offering group or individual health insurance coverage, FEHB carriers,
and nonparticipating providers, facilities, and providers of air
ambulance services to determine the out-of-network rate for items and
services that are emergency services, nonemergency services furnished
by nonparticipating providers at participating facilities, and air
ambulance services furnished by nonparticipating providers of air
ambulance services, under certain circumstances.
Furthermore, these interim final rules extend the balance billing
protections related to external reviews to grandfathered plans,
including non-Federal governmental plans and individual market plans.
The definitions of group health plan and health insurance issuer that
are cited in section 110 of the No Surprises Act include both
grandfathered and non-grandfathered plans and coverage. Accordingly,
the practical effect of section 110 of the No Surprises Act is that
grandfathered health plans must provide external review for adverse
benefit determinations involving benefits subject to these surprise
billing protections. Grandfathered and non-grandfathered plans must
comply either with a state external review process or the Federal
external review process. The disclosure requirements of the Federal
external review process require: (1) A preliminary review by plans of
requests for external reviews; (2) Independent Review Organizations
(IROs) to notify claimants of eligibility and acceptance for external
review; (3) the plan or issuer to provide IROs with documentation and
other information considered in making adverse benefit determination;
(4) the IRO to forward to the plan or issuer any information submitted
by the claimant; (5) plans to notify the claimant and IRO if it
reverses its decision; (6) the IRO to notify the claimant and plan of
the result of the final external review; and (7) the IRO to maintain
records for 6 years.
Additionally, these interim final rules implement provisions of the
No Surprises Act that require health care providers and health care
facilities to furnish good faith estimates upon request or upon the
scheduling of items or services for uninsured (or self-pay)
individuals. In order to implement these good faith estimate provisions
under PHS Act section 2799B-6(1) and 2799B-6(2)(B), as added by section
112 of the No Surprises Act, HHS is adding 45 CFR 149.610 to establish
requirements for providers and facilities to specifically inquire about
an individual's health coverage status and establish requirements for
providing a good faith estimate to uninsured (or self-pay) individuals.
PHS Act section 2799B-6(2) and these interim final rules specify
that a provider or facility must provide a notification (in clear and
understandable language) of the good faith estimate of the expected
charges for furnishing such items or services (including any items or
services that are reasonably expected to be provided in conjunction
with such scheduled items or services and such items or services
reasonably expected to be so provided by another health care provider
or health care facility), with the expected billing and diagnostic
codes (i.e., ICD, CPT, HCPCS, DRG and/or NDC codes) for any such items
or services. These interim final rules include definitions of certain
terms, requirements for the providers and facilities, content
requirements, and methods and manner requirements for issuing good
faith estimates consistent with the provisions of PHS Act sections
2799B-6, 2799B-6(1), and 2799B-6(2)(B).
PHS Act section 2799B-7, as added by section 112 of the No
Surprises Act, provides further protections for uninsured (or self-pay)
individuals by requiring the Secretary of HHS to establish a process
(in this section referred to as patient-provider dispute resolution)
under which an uninsured (or self-pay) individual who received a good
faith estimate of expected charges from a provider or facility, and
who, after being furnished the item or service, is billed for charges
that are substantially in excess of the estimate, may seek a
determination from a SDR entity of the amount to be paid. HHS is adding
new 45 CFR 149.620 to implement this patient-provider dispute
resolution process including specific definitions related to the
patient-provider dispute resolution process. HHS is also codifying
provisions related to the eligibility of an item or service for the
patient-provider dispute resolution process, certification and
selection of SDR entities, fees associated with the patient-provider
dispute resolution process, and deferral to state patient-provider
dispute resolution processes.
Consistent with Executive Orders 13985 and 13988, and all civil
rights laws and protections cited previously, these interim final rules
include provisions designed to address and increase the HHS'
understanding of barriers underserved and minority communities face in
accessing the protections established in the No Surprises Act,
including the provision of good faith estimates for uninsured (or self-
pay) individuals, and the process for patient-provider dispute
resolution.
The Departments seek comment from individuals from racial/ethnic
minority and underserved communities, including individuals with
vision, hearing, or language limitations, individuals with limited
English proficiency, lesbian, gay, bisexual, transgender, and queer
(LGBTQ+) persons, and individuals with health literacy needs, and
providers who serve these individuals, to help identify emerging,
persistent, or perceived barriers to individuals accessing and
understanding these processes, rights, and protections, and other
provisions of the No Surprises Act included in this rule, and policies
to address and remove these barriers.
1.2. Summary of Impacts
Plans, issuers, FEHB carriers, health care providers, facilities,
and providers of air ambulance services will incur costs to comply with
the requirements in these interim final rules, as discussed later in
this section of this preamble. However, the Departments and OPM have
determined that the benefits of these interim final rules justify the
costs.
The provisions in these interim final rules will help ensure that
participants, beneficiaries, and enrollees with health coverage are
protected from surprise medical bills. When plans, issuers, and FEHB
carriers participate in the Federal IDR process, individuals with
health coverage will gain peace of mind, experience a reduction in out-
of-pocket expenses, be able to meet their deductible and out-of-pocket
maximum limits sooner, and may experience increased access to care. One
study found that surprise billing decreased by 34 percent in New York
State between 2015 and 2018, when the state implemented an IDR
process.\132\ The study also found that New York's Out-of-Network Law
\133\ saved consumers over $400 million from the date of implementation
with respect to emergency services alone.\134\
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\132\ Marion Mass. ``Surprise Billing Legislation Should Put
Independent Dispute Resolution at Its Heart.'' Morning Consult.
(March 2020). https://morningconsult.com/opinions/surprise-billing-legislation-should-put-independent-dispute-resolution-at-its-heart/.
\133\ NY Fin Serv L Sec. 605 (2014).
\134\ New York State Department of Financial Services. ``New
York's Surprise Out-Of-Network Protection Law Report on the
Independent Dispute Resolution Process.'' (September 2019).
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[[Page 56049]]
The information regarding the good faith estimates furnished by
providers and facilities will allow uninsured (or self-pay) individuals
to have access to information about health care pricing before
receiving care. This information will allow uninsured (or self-pay)
individuals to evaluate options for receiving health care, make cost-
conscious health care purchasing decisions, and reduce surprises in
relation to their health care costs for those items and services.
Additionally, uninsured (or self-pay) individuals may use the good
faith estimate for comparison with actual billed charges received after
items or services are furnished. If the billed charges are
substantially in excess of the good faith estimate, an uninsured (or
self-pay) individual may seek a determination from an SDR entity under
the patient-provider dispute resolution process.
HHS will request information from uninsured (or self-pay)
individuals in order to initiate the patient-provider dispute
resolution process. This information will be used to help determine
eligibility for the patient-provider dispute resolution process and is
necessary for determining which provider or facility should be
contacted for dispute resolution. Providers and facilities are required
to submit information to an SDR entity to inform the SDR entity's
payment determination decisions.
In accordance with OMB Circular A-4, Table 1 depicts an accounting
statement summarizing the Departments' assessment of the benefits,
costs, and transfers associated with this regulatory action. The
Departments are unable to quantify all benefits, costs, and transfers
of these interim final rules but have sought, where possible, to
describe these non-quantified impacts. The effects in Table 1 reflect
non-quantified impacts and estimated direct monetary costs resulting
from the provisions of these interim final rules.
TABLE 1: Accounting Statement
Benefits:
Non-quantified benefits of the Federal IDR process for the
population with health coverage:
Increased protection for participants, beneficiaries, and
enrollees from surprise bills from out-of-network providers by creating
a process for plans, issuers, FEHB carriers, and nonparticipating
providers and facilities to resolve disputes regarding certain out-of-
network rates. Note that, unless specified otherwise, providers include
providers of air ambulance services.
Increased awareness of expected charges for items or
services, reduction in financial anxiety and out-of-pocket expenses for
individuals with health coverage because individuals will be able to
meet their deductibles and out-of-pocket maximum limits sooner.
Increased access to care for individuals with health
coverage that may have otherwise forgone or delayed needed treatment
due to concerns over the potential for high out-of-pocket expenses.
Non-quantified benefits of the patient-provider dispute resolution
process for uninsured (or self-pay) individuals:
Increased awareness of expected charges for items or
services, reduction in financial anxiety, more informed health care
decisions, and protection for uninsured (or self-pay) individuals by
requiring providers and facilities to furnish good faith estimates for
scheduled or requested items and services.
Improved access to care for uninsured (or self-pay)
individuals that may have otherwise forgone or delayed needed treatment
due to concerns over receiving unexpected large bills.
Protection for uninsured (or self-pay) individuals from
excessive surprise bills from providers or facilities by establishing a
patient-provider dispute resolution process that may result in lower
payments if the SDR entity determines the amount to be paid by the
uninsured (or self-pay) individual to the provider or facility are
lower than the billed charges.
Non-quantified benefits regarding external review:
Increased access to benefits for some individuals.
Reduced incidence of excessive delays and inappropriate
denials, averting serious, avoidable lapses in access to quality health
care and resultant injuries and losses to participants, beneficiaries,
enrollees, and FEHB covered individuals.
Potential increase in confidence and satisfaction among
participants, beneficiaries, and enrollees in their health care
benefits.
Improved awareness among plans, issuers, and FEHB carriers
of participant, beneficiary, enrollee, FEHB covered individuals, and
provider concerns.
Costs to Plans, Issuers, and FEHB Carriers
----------------------------------------------------------------------------------------------------------------
Costs (in millions) Estimate Year dollar Discount rate Period covered
----------------------------------------------------------------------------------------------------------------
Annualized............................ $517.12 2021 7 percent............... 2022-2031
Monetized ($/Year).................... 491.44 2021 3 percent............... 2022-2031
----------------------------------------------------------------------------------------------------------------
The annualized cost estimates reflect estimated costs associated
with the Federal IDR process for nonparticipating providers or
nonparticipating emergency facilities, the Federal IDR process for
providers of air ambulance services, IDR entity certification and
reporting requirements, the Federal IDR process for the uninsured, SDR
entity certification, and the extension of the external review to
grandfathered plans and claims under certain provisions of the No
Surprises Act. The Departments estimate a total cost of $760.95 million
in the first year and $440.67 million going forward.
Costs to the Government:
The Federal Government will incur costs to build and maintain the
Federal IDR portal and to implement and administer the patient-provider
dispute resolution process. The maintenance costs for the Federal IDR
portal are split between the Federal IDR process and the patient-
provider dispute resolution process, based on anticipated volume for
each program. The costs associated with the Federal IDR portal are
estimated to be a one-time cost of $6 million in fiscal year 2021 and
annual costs of $1 million going forward. The costs associated with the
patient provider dispute resolution process are estimated to be a one-
time cost of $10 million in fiscal year 2021 and an annual cost of $12
million going forward. Additionally, the costs associated with the
Federal external review costs are estimated to be $1.16
[[Page 56050]]
million in fiscal year 2021 and $567,000 annually going forward.
Transfers:
Non-quantified transfers associated with the Federal IDR process
for the population with health coverage:
Potential transfers from providers who had previously
balance billed for out-of-network claims to individuals who are no
longer responsible for paying these balance bills.
Potential transfers from plans, issuers, and FEHB carriers
who were previously not responsible for out-of-network balance bills to
providers and facilities that will submit out-of-network balance bills
to plans, issuers, and FEHB carriers as a result of the interim final
rules.
Potential transfers from plans, issuers, and FEHB carriers
to participants, enrollees, and beneficiaries if the Federal IDR
process results in lower premiums.
Potential transfers from participants, enrollees, and
beneficiaries to plans, issuers, and FEHB carriers if the Federal IDR
process results in higher premiums.
Potential transfers to the Federal Government in the form
of reduced Premium Tax Credits if the Federal IDR process results in
the lower premiums.
Potential transfers from the Federal Government to
eligible enrollees, in the form of increased Premium Tax Credits
payments if the Federal IDR process results in an increase in premiums.
Potential transfers from individuals with health coverage
who pay premiums to individuals with large out-of-network bills and
uninsured individuals if the Federal IDR process results in an increase
in premiums.
Potential transfers from providers, facilities, and
providers of air ambulance services to plans, issuers, and FEHB
carriers if some providers, facilities, and providers of air ambulance
services collect lower out-of-network payments.
Potential transfers between providers, facilities, and
providers of air ambulance services and individuals with health
coverage, depending on the weight place on the QPA in payment
determinations under the Federal IDR process. The presumption in favor
of the QPA in the Federal IDR process may result in transfers from
providers and facilities to participants, beneficiaries, and enrollees.
Non-quantified transfers associated with the patient-provider
dispute resolution process for uninsured (or self-pay) individuals:
Potential transfer of the patient-provider dispute
resolution administrative fee from the provider or facility to the
uninsured (or self-pay) individuals if the SDR entity makes a payment
determination in favor of the uninsured (or self-pay) individual.
Potential transfer from uninsured (or self-pay)
individuals to providers or facilities if the SDR entity makes a
payment determination that is higher than the good faith estimate.
Non-quantified transfers associated with external review:
Potential transfer from plans, issuers, and FEHB carriers
to participants, beneficiaries, and enrollees now receiving payment for
denied benefits.
1.3. Affected Entities
These interim final rules will affect health care patients, health
care providers, health care facilities, providers of air ambulance
services, self-insured plans, issuers, and FEHB carriers.
In 2019, there were 1,553 issuers in the U.S. health insurance
market, of which 1,298 issuers serve the individual market, 586 issuers
serve the small group market, and 788 issuers serve the large group
market.\135\ Additionally, the Departments and OPM estimate that 46
issuers are FEHB carriers. While there is a significant amount of
research that demonstrates the prevalence of surprise billing, as
discussed in the July 2021 interim final rules, the Departments do not
have data on what percentage of health insurance issuers cover
individuals who experience surprise billing. However, given the size
and scope of insurance companies, the Departments assume that all
health insurance issuers will be affected by these interim final rules.
The Departments estimate that 8.5 percent, or approximately 132 issuers
are considered small under the Small Business Administration's (SBA)
size standards.\136\
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\135\ Centers for Medicare and Medicaid Services. ``Medical Loss
Ratio Data and System Resources'' (2019). https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.
\136\ The issuers affected by these interim final rules are
expected to fall under the industry of Direct Health and Medical
Insurer Carries, NAICS 524114. According to the SBA Table of Size
Standards, an issuer is considered small if its annual receipts are
less than $41.5 million. (See Small Business Administration. ``Table
of Size Standards.'' (August 2019). https://www.sba.gov/document/support--table-size-standards.) Applying this standard to the 2017
County Business Patterns and Economic Census uniformly across
establishments, the Departments estimate that 132, or 8.5 percent of
issuers are small. (See Census Bureau. ``2017 SUSB Annual Data
Tables by Establishment Industry, Data by Enterprise Receipt Size.''
(May 2021). https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html.)
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Of the plans that filed a Form 5500 in 2018, 25,500 plans were
self-insured.\137\ The Departments do not have data on what percentage
of self-insured group health plans cover individuals who have received
a surprise bill. The Departments request comment on how many group
health plans will be affected by these interim final rules.
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\137\ Stewart, Al. ``Report to Congress: Annual Report on Self-
Insured Group Health Plans.'' (March 2021). https://www.dol.gov/sites/dolgov/files/EBSA/researchers/statistics/retirement-bulletins/annual-report-on-self-insured-group-health-plans-2021.pdf.
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In 2018, 296.2 million individuals had health insurance. Of the
213.2 million individuals with private insurance, 178.4 million had
employer-sponsored insurance and 34.8 million had other private
insurance, including individual market coverage.\138\ One study looked
at claims data from a large commercial issuer for the period 2010-2016
and found that over 39 percent of emergency department visits to in-
network hospitals resulted in an out-of-network bill, and 37 percent of
inpatient admissions to in-network hospitals resulted in at least one
out-of-network bill.\139\ The Departments estimate that these interim
final rules will directly affect individuals with private health
coverage who visit an emergency room, visit a hospital, or are
transported by an air ambulance.
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\138\ Employee Benefits Security Administration. ``Health
Insurance Coverage Bulletin.'' (March 2019). https://www.dol.gov/sites/dolgov/files/EBSA/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2019.pdf.
\139\ Sun EC, Mello MM, Moshfegh J, Baker LC, Assessment of Out-
of-Network Billing for Privately Insured Patients Receiving Care in
In-Network Hospitals. JAMA Intern Med. 2019; 179(11):1543-1550
(2019). doi:10.1001/jamainternmed.2019.3451.
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The Departments expect that the Federal IDR process will have
overflow effects of decreasing the incidence of surprise medical bills
in general, even for patients who do not have a claim that goes to the
Federal IDR process. The Federal IDR process relies on a ``baseball-
style'' arbitration, in which each party submits their desired amount,
and the certified IDR entity selects one of the two offers submitted.
This differs from other types of arbitration, in which the arbitrator
would often select a value between the two submissions. Accordingly,
this process encourages each party to submit a reasonable offer.
Further, the parties involved will need to weigh the costs associated
with the Federal IDR process, including payment of the administrative
fee and the certified IDR entity fee if their offer is not chosen. The
Departments are of the view this may serve as an incentive to not only
submit reasonable offers once the Federal IDR
[[Page 56051]]
process has been initiated, but also to conduct business in a way to
avoid ending up in the Federal IDR process altogether. The Departments
cannot estimate how large these overflow effects will be on a national
basis; however, the experience in New York State provides a point of
reference. In 2018, in New York State, surprise billing decreased by 34
percent after the IDR process was implemented.\140\
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\140\ Marion Mass. ``Surprise Billing Legislation Should Put
Independent Dispute Resolution at Its Heart.'' Morning Consult.
(March 2020). https://morningconsult.com/opinions/surprise-billing-legislation-should-put-independent-dispute-resolution-at-its-heart/.
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Surprise billing occurs more often in specialties that are not
shopped.\141\ A recent survey looked at 13.8 million visits to 35,000
unique providers in six specialties in 2017 to estimate the percent of
providers with at least one out-of-network claim by specialty and
whether the procedure was inpatient or outpatient. The survey found
that less than half of specialist providers surveyed billed at least
once on an out-of-network basis. Their findings are shown in the last
four columns in Table 2.\142\ The second column provides the number of
active physicians in each specialty from the American Association of
Medical Colleges.\143\ As set forth in Table 2, the prevalence of
providers who bill on an out-of-network basis and the average frequency
of visits that are billed out-of-network among providers who do bill on
an out-of-network basis varies by specialty.
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\141\ Greaney, Thomas. ``Surprise Billing: A Window into the
U.S. Health Care System.'' American Bar Association. (September
2020). https://www.americanbar.org/groups/crsj/publications/human_rights_magazine_home/health-matters-in-elections/surprise-billing/.
\142\ Fugelsten Biniek, Jean, et al. ``How Often Do Providers
Bill Out of Network?'' Health Care Cost Institute. (May 2020).
https://healthcostinstitute.org/out-of-network-billing/how-often-do-providers-bill-out-of-network.
\143\ American Association of Medical Colleges. ``Active
Physicians by Age and Specialty. Physician Specialty Data Report.
(December 2019). https://www.aamc.org/data-reports/workforce/interactive-data/active-physicians-age-and-specialty-2019.
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The Departments estimate that 16,992 emergency and other health
care facilities will be affected by these interim final rules,
including 6,090 hospitals,\144\ 29,227 diagnostic and medical
laboratories,\145\ 270 independent freestanding emergency
departments,\146\ 9,280 ambulatory surgical centers,\147\ and 1,352
critical access hospitals. The Departments acknowledge that this
estimate double counts some entities, particularly with regard to
facilities that have laboratories in-house.
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\144\ American Hospital Association. ``Fast Facts on U.S.
Hospitals, 2021.'' (January 2021). https://www.aha.org/statistics/fast-facts-us-hospitals.
\145\ IBIS World. Definitive Healthcare. ``Diagnostic & Medical
Laboratories Industry in the US--Market Research Report?'' (May
2021). https://www.ibisworld.com/industry-statistics/number-of-businesses/diagnostic-medical-laboratories-united-states/.
\146\ Emergency Medicine Network. ``2018 National Emergency
Department Inventory.'' (2021). https://www.emnet-usa.org/research/studies/nedi/nedi2018/.
\147\ Definitive Healthcare. ``How Many Ambulatory Surgery
Centers are in the US?'' (April 2019). https://www.definitivehc.com/blog/how-many-ascs-are-in-the-us.
Table 2--Physicians With Out-of-Network Claims
----------------------------------------------------------------------------------------------------------------
Percent of providers with at Mean percent of visits with
least one out-of-network services billed out-of-network
Number of claim, 2017 \149\ (%) for providers who billed out-
active -------------------------------- of-network at least once \150\
physicians (%)
\148\ Inpatient Outpatient -------------------------------
Inpatient Outpatient
----------------------------------------------------------------------------------------------------------------
Emergency....................... 45,134 44.1 49.3 14.7 34.3
Pathology....................... 12,640 44.0 33.0 44.3 31.4
Radiology....................... 28,017 27.7 32.5 11.0 17.9
Anesthesiology.................. 42,249 57.0 31.8 11.3 28.4
Behavioral Health/Psychiatry.... 38,778 29.8 14.9 21.4 24.4
Cardiovascular.................. 22,514 17.9 17.0 6.8 8.3
----------------------------------------------------------------------------------------------------------------
As seen in Table 2, among the specialist providers considered,
emergency physicians were most likely to bill on an out-of-network
basis at least once; however, emergency physicians account for less
than 5 percent of total physicians.\151\ The Departments estimate that
15 percent, or 140,270, of physicians,\152\ on average, bill on an out-
of-network basis and will be affected by these interim final rules. The
Departments estimate that 44.1 percent, or approximately 61,890
physicians, practice in a small business under the SBA size
standards.\153\ The Departments seek comment on these estimates.
---------------------------------------------------------------------------
\148\ See American Association of Medical Colleges. ``Active
Physicians by Age and Specialty. Physician Specialty Data Report.
(December 2019). https://www.aamc.org/data-reports/workforce/interactive-data/active-physicians-age-and-specialty-2019.
\149\ See Fugelsten Biniek, Jean, et al. ``How Often Do
Providers Bill Out of Network?'' Health Care Cost Institute. (May
2020). https://healthcostinstitute.org/out-of-network-billing/how-often-do-providers-bill-out-of-network.
\150\ Id.
\151\ American Association of Medical Colleges. ``Active
Physicians by Age and Specialty.'' Physician Specialty Data Report.
(December 2019). https://www.aamc.org/data-reports/workforce/interactive-data/active-physicians-age-and-specialty-2019. The
American Association of Medical Colleges estimated that among the
935,136 active physicians in the U.S. in 2019, 45,134 were emergency
physicians (4.8 percent).
\152\ The Departments do not have data on the percentage of
physicians who bill out of network across all specialties; however,
it is likely lower than the percentage of physicians who bill out of
network across the six specialties cited in the cited study. The six
specialties cited account for approximately 20 percent of
physicians. Based on the information presented in Table 2, the
Departments estimate that on average, just over 30 percent of
physicians in these specialties had at least one out-of-network
claim. The Departments assumes that the other 80 percent of
physicians bill on an out-of-network basis just 10 percent of the
time. The Departments approximate the percent of physicians who bill
on an out-of-network basis to be: (20 percent x 32 percent) + (10
percent x 80 percent) = 14.4 percent. As an approximation, the
Departments round this to 15 percent.
\153\ The physicians affected by these interim final rules are
expected to fall under the industry of Offices of Physicians, NAICS
62111. According to the SBA Table of Size Standards, an office of
physicians is considered small if its annual receipts are less than
$12.0 million. (See Small Business Administration. ``Table of Size
Standards.'' (August 2019). https://www.sba.gov/document/support--table-size-standards.) Applying this standard to the 2017 County
Business Patterns and Economic Census uniformly across employees,
the Departments estimate that 61,890, or 44.1 percent of physicians
work in an office considered a small business. (See Census Bureau.
``2017 SUSB Annual Data Tables by Establishment Industry, Data by
Enterprise Receipt Size.'' (May 2021). https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html.
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Physician staffing companies, which allow for medical facilities to
hire the services of a medical professional without hiring the medical
professional
[[Page 56052]]
themselves, may also be affected by these interim final rules, as they
provide services in medical specialties that are not shopped, including
emergency, radiology, and anesthesiology.\154\ Physician staffing
companies often bill patients directly for services rendered.\155\
Within recent years, the growth of the health care staffing industry
has accelerated, driven by staffing shortages in health care facilities
as the population ages.\156\ A survey of 200 health care executives
found that 85 percent of surveyed health care facility managers used
temporary physicians within the last year, and 72 percent were seeking
more temporary physicians.\157\ There are approximately 40 health care
staffing firms providing these services.\158\
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\154\ Appelbaum, Eileen and Rosemary Batt. ``Private Equity and
Surprise Medical Billing.'' (2021). Institute for New Economic
Thinking. https://www.ineteconomics.org/perspectives/blog/private-equity-and-surprise-medical-billing.
\155\ Moody's Investor Service. ``Surprise Billing Ban to
Constrain Physician Firms' Cash Flow, Curb Negotiating Clout for Air
Ambulances.'' (2021). https://www.moodys.com/research/Moodys-Surprise-billing-ban-to-constrain-physician-staffing-firms-cash--PBC_1263184.
\156\ Schwartz, Chris. ``Overview of the Temporary Healthcare
Staffing Sector.'' Blue Pencil Strategies. https://healthywork.uic.edu/wp-content/uploads/sites/452/2019/08/Temporary-Healthcare-Staffing-Fact-Sheet.pdf.
\157\ Gooch, Kelly. ``Temporary Physicians Staffing: Why and How
Often It Occurs.'' Becker's Hospital Review. (2020). https://www.beckershospitalreview.com/workforce/temporary-physician-staffing-why-and-how-often-it-occurs.html.
\158\ Schwartz, Chris. ``Overview of the Temporary Healthcare
Staffing Sector.'' Blue Pencil Strategies. https://healthywork.uic.edu/wp-content/uploads/sites/452/2019/08/Temporary-Healthcare-Staffing-Fact-Sheet.pdf.
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Furthermore, in 2014, it was estimated that there were 1,073
businesses in the air ambulance service industry.\159\ One study
estimated that between 2014 and 2017, 77 percent of air ambulance
claims were out-of-network.\160\ The Departments do not have data on
the number of providers of air ambulance services that submit out-of-
network claims; however, given the prevalence of out-of-network billing
among providers of air ambulance services, the Departments assume that
all businesses in the industry will be affected by these interim final
rules. The Departments estimate that 59.2 percent, or approximately 635
providers of air ambulance services, are considered small under the SBA
size standards.\161\
---------------------------------------------------------------------------
\159\ IBIS World. ``Air Ambulance Service Industry in the US--
Market Research Report.'' (December 2020). https://www.ibisworld.com/united-states/market-research-reports/air-ambulance-services-industry/.
\160\ Brown, Erin, et al. ``The Unfinished Business of Air
Ambulance Bills.'' Health Affairs Blog, March 26, 2021. https://www.healthaffairs.org/do/10.1377/hblog20210323.911379/full/.
\161\ The providers of air ambulance services affected by these
interim final rules are expected to fall under the industry of
Ambulance Services, NAICS 621910. According to the SBA Table of Size
Standards, an air ambulance service provider is considered small if
its annual receipts are less than $16.5 million. (See Small Business
Administration. ``Table of Size Standards.'' (August 2019). https://www.sba.gov/document/support--table-size-standards.) Applying this
standard to the 2017 County Business Patterns and Economic Census
uniformly across establishments, the Departments estimate that 635,
or 59.2 percent of providers of air ambulance services are small.
See Census Bureau. ``2017 SUSB Annual Data Tables by Establishment
Industry, Data by Enterprise Receipt Size.'' (May 2021). https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html.
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IDR entities must be certified under the standards and procedures
set forth in guidance by the Departments. In order to be certified, an
entity must have sufficient expertise in arbitration and claims
administration, managed care, billing and coding, medical, and legal
matters, with sufficient staffing to make determinations within 30
business days allowed for such payment determinations. Additionally,
IDR entities must meet appropriate indicators of fiscal integrity and
stability and maintain a current accreditation from a nationally
recognized and relevant accrediting organization, such as URAC, or
ensure that it otherwise possesses the requisite training to conduct
payment determinations (for example, providing documentation that
personnel employed by the IDR entity have completed arbitration
training by the AAA, the AHLA, or a similar organization), among other
requirements.
The National Association of Independent Review Organizations is an
association of URAC-accredited independent review organizations, and in
2021, they had 29 members.\162\ While this does not represent the
entire pool of independent review organizations, this offers insight
into the number of potential entities that may seek certification as
IDR entities. In 2019, New York had certified three IDR entities to
handle the state's IDR process.\163\ In 2018, the state of New York
accounted for 5.8 percent of the private insurance market.\164\ The
Departments recognize that the health care and surprise billing
experiences across states are heterogeneous; however, if this
proportion were uniform across the country, there would be
approximately 52 IDR entities. Based on these two benchmarks, the
Departments estimate that there will be 50 IDR entities that will seek
certification by the Departments. Within these 50 entities, HHS
estimates that there will be between one and three contracted SDR
entities, depending on the anticipated volume of patient-provider
dispute resolution cases and other factors necessary for administering
an efficient program.
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\162\ Lacewell, Linda. ``New York's Surprise Out-of-Network
Protection Law.'' Patient Choice Coalition.'' (September 2019).
http://www.patientchoicecoalition.com/blog/2019/11/22/report-on-the-independent-dispute-resolution-process/.
\163\ Id.
\164\ In 2018, 10.5 million individuals had employer-sponsored
insurance and 1.8 million individuals had other private insurance in
New York State, while 178.4 million individuals had employer-
sponsored insurance and 34.8 million individuals had other private
insurance nationally. The Departments estimates New York accounts
for 5.8 percent of the private insurance market ((10.5 + 1.8)/(178.4
+ 34.8) = 5.8 percent). See Employee Benefits Security
Administration. ``Health Insurance Coverage Bulletin.'' (March
2019). https://www.dol.gov/sites/dolgov/files/EBSA/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2019.pdf.
---------------------------------------------------------------------------
Health care providers and health care facilities are required to
furnish a good faith estimate of expected charges to uninsured (or
self-pay) individuals for scheduled items and services and upon
request. In 2019, there were approximately 938,966 active
physicians,\165\ 6,090 hospitals,\166\ 9,280 ambulatory surgical
centers,\167\ and 1,352 critical access hospitals.\168\ As of 2019,
there were approximately 29,349,300 uninsured individuals in the United
States.\169\ HHS estimates that approximately 3,498,942 uninsured (or
self-pay) individuals will be impacted by this rule requirement \170\
based on the
[[Page 56053]]
number of nonemergency elective procedures (surgical and non-surgical)
performed annually multiplied by the percentage of uninsured (or self-
pay) individuals (9.2%), and HHS assumes that some uninsured
individuals will forego elective procedures because of cost. HHS also
assumes that a certain number of good faith estimates will be furnished
only upon request, increasing the number of good faith estimates from
that of the total for scheduled items and services.
---------------------------------------------------------------------------
\165\ https://www.aamc.org/data-reports/workforce/interactive-data/active-physicians-us-doctor-medicine-us-md-degree-specialty-2019.
\166\ https://www.aha.org/statistics/fast-facts-us-hospitals.
\167\ https://blog.definitivehc.com/how-many-ascs-are-in-the-
us#:~:text=Currently%2C%20there%20are%20more%20than,Healthcare's%20pl
atform%20on%20surgery%20centers.
\168\ https://www.flexmonitoring.org/historical-cah-data-0).
\169\ This figure includes those without health insurance and
those who have coverage under the Indian Health Service only.
Source: https://www.kff.org/other/state-indicator/total-population/?dataView=1¤tTimeframe=0&selectedDistributions=uninsured&selectedRows=%7B%22wrapups%22:%7B%22united-states%22:%7B%7D%7D%7D&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D.
\170\ The number is estimated as follows: 51,744,200
nonemergency elective procedures (surgical and non-surgical)
performed annually x 9.2% uninsured rate = 4,760,466. HHS assumes
that some uninsured populations will forego elective procedures
because of costs. Therefore, a 30% decrease adjustment was included
resulting in 3,332,326. HHS also assumes a 5% adjustment for good
faith estimate inquires only resulting in a final value of
3,498,942. See Squitieri, Lee et al. ``Resuming Elective Surgery
during Covid-19: Can Inpatient Hospitals Collaborate with Ambulatory
Surgery Centers?.'' Plastic and reconstructive surgery. Global open
vol. 9,2 e3442. 18 Feb. 2021, doi:10.1097/GOX.0000000000003442 (The
study estimates 4,297,850 nonemergency elective procedures (surgical
and non-surgical) are performed each month. This value was
multiplied by 12 months = 51,574,200. HHS adjusted by approximately
one-third of one percent to account annual increase in volume since
study publication resulting in 51,744,200). See also KFF Health
Insurance Coverage of the Total Population.
---------------------------------------------------------------------------
These interim final rules also implement a patient-provider dispute
resolution process that applies to uninsured (or self-pay) individuals
whose billed charges exceed the expected charges in the good faith
estimate for a provider or facility by $400 or greater. HHS does not
have data on the percentage of how many uninsured (or self-pay)
individuals will initiate the patient-provider dispute resolution
process. For the purposes of the estimates in this section, HHS relied
on the experience of New York State. From 2015 to 2018, New York State
had a total of 1,486 disputes involving surprise bills submitted to the
state IDR process, and 31% of these disputes (457 in all) were found
ineligible for IDR for various reasons including 8% (approximately 36
cases) due to being self-insured.\171\ For the purposes of this
analysis, HHS assumes that, going forward, New York State will continue
to see 40 IDR adjudications each year involving surprise medical bills
for self-insured individuals. Accordingly, HHS estimates that there
will be 26,659 claims that result in patient-provider dispute
resolution cases each year. \172\ These interim final rules establish
requirements that an SDR entity must meet the same certification
standards as a certified IDR entity. HHS estimates that there will be
between one and three contracted SDR entities depending on the
anticipated volume of patient-provider dispute resolution cases and
other factors necessary for administering an efficient program. HHS
will assess if a potential SDR entity meets the certification standards
as part of the contracting process.
---------------------------------------------------------------------------
\171\ https://www.dfs.ny.gov/system/files/documents/2019/09/dfs_oon_idr.pdf.
\172\ The number is estimated as follows: 51,744,200
nonemergency elective procedures (surgical and non-surgical)
performed annually x 9.2% uninsured rate = 4,760,466. HHS assumes
that some uninsured (or self-pay) individuals will forego elective
procedures because of costs. Therefore, a 30% decrease adjustment
was included resulting in 3,332,326. HHS assumes that 10% of
uninsured (or self-pay) individuals who undergo a nonemergency
elective procedure will receive a billed charge that is $400 or more
than the total expected charges in the good faith estimate for the
provider or facility, therefore 3,332,326 x 10% = 333,232. HHS
assumes that 8% will engage the provider-patient dispute resolution
process, therefore 333,232 x 8% = 26,659.
---------------------------------------------------------------------------
Furthermore, the interim final rules extend the balance billing
protections related to external review to grandfathered plans. Prior to
the interim final rules, the Departments estimate that there are
approximately 8.1 million participants in ERISA-covered plans in states
that have no external review laws or whose laws do not meet the Federal
minimum requirements.\173\ These estimates lead to a total of 92.5
million participants not having access to external review. Among the
92.5 million participants, 80.5 million participants in non-
grandfathered plans and 12 million participants in grandfathered plans
will be required to be covered by the external review requirement.
---------------------------------------------------------------------------
\173\ These states are Alabama, Florida, Georgia, Pennsylvania,
Texas, and Wisconsin. See Affordable Care Act: Working with States
to Protect Consumers, available at https://www.cms.gov/CCIIO/Resources/Files/external_appeals.html.
---------------------------------------------------------------------------
The Departments estimate that there are approximately 1.3 external
reviews for every 10,000 participants \174\ and that there will be
approximately 12,304 external reviews annually. Experience from North
Carolina indicates that about 75 percent of requests for external
reviews are actually eligible to proceed to an external review.\175\
Therefore, the Departments expect that there will be about 15,942
requests for external review.\176\
---------------------------------------------------------------------------
\174\ AHIP Center for Policy and Research, ``An Update on State
External Review Programs, 2006,'' July 2008.
\175\ North Carolina Department of Insurance. ``Health Insurance
Smart NC: Annual Report on External Review Activity 2013.'' https://digital.ncdcr.gov/digital/collection/p249901coll22/id/730531.
\176\ 12,304/0.75 = 15,942.
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1.4. Benefits
Federal IDR Process
In the past, information asymmetries regarding health care costs
and provider or facility network status between individuals and plans,
issuers, and providers have left individuals vulnerable to surprise
billing. These interim final rules will provide a structure to guide
the resolution of pricing disparities in a way that will prevent a
patient's information asymmetry from resulting in a surprise bill, thus
alleviating the market failure.
As a result of these interim final rules, individuals with health
coverage will only be liable for their in-network cost-sharing amounts
when receiving care from nonparticipating providers at participating
facilities (in certain circumstances), nonparticipating emergency
facilities, and nonparticipating providers of air ambulance services.
Accordingly, these individuals are likely to see lower out-of-pockets
costs, reduced anxiety, reduced financial stress, and lower medical
debt. Further, these payments will now count towards their deductible
and maximum out-of-pocket limits, allowing individuals to reach those
limits sooner. A significant number of individuals forgo or delay care
due to the cost of care.\177\ A reduction in out-of-pocket expenses is
likely to improve access to care and allow individuals to obtain needed
treatment that they may otherwise have neglected or foregone due to
concerns about the cost of care.
---------------------------------------------------------------------------
\177\ According to a Kaiser Family Foundation analysis of
National Health Interview Survey data, in 2019, 10.5 percent of
adults reported forgoing or delaying medical care due to costs.
Reference: Krutika, Amin, Gary Claxton, Giorlando Ramirez, and
Cynthia Cox (2021). ``How Does Cost Affect Access to Care?''
Peterson-KFF Health System Tracker. Available at https://www.healthsystemtracker.org/chart-collection/cost-affect-access-care/.
---------------------------------------------------------------------------
Further, these interim final rules create a system in which
disputes may be resolved in a consistent and efficient manner. These
interim final rules are intended to minimize reliance on the Federal
IDR process and encourage parties to submit reasonable offers and allow
for more efficient price discovery. By requiring the non-prevailing
party to pay the certified IDR entity fees, these interim final rules
increase the financial stakes for parties that submit an offer that is
unreasonably high or low. However, if the parties agree upon a
settlement, after initiation, but prior to determination by the
certified IDR entity, each party must pay half of the certified IDR
entity's fees, unless the parties agree otherwise on a method for
allocating the fees. Thus, parties have an incentive to choose a
settlement compared to the Federal IDR process. During negotiations,
providers may be more willing to accept a lower price and similarly,
plans, issuers, and FEHB carriers may be more willing to offer a higher
price.
Similarly, these interim final rules are intended to encourage the
settlement of multiple claims. Under these interim final rules, the
party that initiates the Federal IDR process is suspended from taking
the same party to arbitration for an item or service that is the same
or similar item or service as the qualified
[[Page 56054]]
IDR item or service already subject to a certified IDR entity's
determination for 90 calendar days following a payment determination.
Furthermore, these interim final rules permit multiple qualified IDR
items and services to be batched together in a single payment
determination proceeding to encourage efficiency; however, the batched
items and services must involve the same provider or group of
providers, the same facility, the same provider of air ambulance
services, the same plan or issuer, treatments involving the same or
similar items or services (as determined by service codes), and have to
occur within a single 30-business-day period (or during the 90-
calendar-day suspension period). By batching similar qualified IDR
items and services, these interim final rules may reduce the per-
service cost of the Federal IDR process and potentially the aggregate
administrative costs, since the Federal IDR process is likely to
exhibit at least some economies of scale.\178\ For example, the per-
service cost of a payment determination involving ten services is
likely to be lower than the per-service cost of a payment determination
involving five services. Thus, these interim final rules may result in
cost savings for plans, issuers, and providers. The Departments do not
have data or a way to estimate how prevalent batching will be, and thus
the potential cost savings that may result, in comparison to a
hypothetical IDR process without batching. The Departments seek comment
and data on this topic, if available.
---------------------------------------------------------------------------
\178\ Fielder, Matthew, Loren Adler, and Benedic, Ippolito.
``Recommendations for Implementing the No Surprises Act.'' U.S.C.-
Brookings Schaeffer on Health Policy. (March 2021). https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2021/03/16/recommendations-for-implementing-the-no-surprises-act/.
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In addition, these interim final rules prohibit conflicts of
interest in the selection of certified IDR entities. The selected
certified IDR entity cannot be a group health plan; a health insurance
issuer offering group health insurance coverage, individual health
insurance coverage or short-term, limited-duration insurance; an FEHB
carrier; or a provider, a facility or a provider of air ambulance
services. Additionally, the selected certified IDR entity cannot be an
affiliate of a group health plan; a health insurance issuer offering
group health insurance coverage, individual health insurance coverage
or short-term, limited-duration insurance; an FEHB carrier; or a
provider, a facility or a provider of air ambulance services. The
selected certified IDR entity cannot be an affiliate or subsidiary of a
professional or trade association representing group health plans;
health insurance issuers; FEHB carriers; or providers, facilities, or
providers of air ambulance services. Also, the selected certified IDR
entity and its personnel cannot have a material familial, financial, or
professional relationship with a party to the payment determination
being disputed. By prohibiting conflicts of interest, these interim
final rules will help ensure that the selected certified IDR entity
will take both parties into full consideration during arbitration and
ensure that the resolution of the dispute is conducted fairly.
Furthermore, these interim final rules dictate what factors the
certified IDR entities may consider for their decisions. Specifically,
these interim final rules require that certified IDR entities consider
the QPA and requires them to consider other relevant factors, to the
extent credible information is provided by the parties, while not
allowing for the consideration of usual and customary rates, billed
charges of the provider, or public payor rates, such as those of
Medicare, Medicaid, the Children's Health Insurance Program, TRICARE,
chapter 17 of title 38, United States Code, or demonstration projects
under title XI of the Social Security Act.
The Departments seek comment addressing the benefits that will be
associated with these interim final rules. The Departments also seek
comment on how the interim final rules will affect individuals from
minority and underserved communities and providers who serve these
individuals.
Protections for the Uninsured
Health insurance and health care costs are critical determinants of
access to health care and are central reasons for existing health
inequities.\179\ In the past decade, while overall rates of health
insurance coverage have increased, the rates of health insurance
coverage among most minority groups continue to be disproportionately
lower than among non-minority groups. Estimates from the Centers for
Disease Control and Prevention (CDC) National Health Interview Survey
(NHIS), suggest that approximately 30 million U.S. residents lacked
health insurance in the first half of 2020.\180\ Prior to the COVID-19
pandemic, according to information collected in the Current Population
Survey Annual Social and Economic Supplement (CPS ASEC) and the
American Community Survey (ACS), in 2019, 8.0% of people, or 26.1
million individuals, did not have health insurance at any point during
the year.\181\ Additionally, the most recent ACS data documents the
largest annual increase in the number of uninsured children from 2018
to 2019 since the survey began asking about health insurance in 2008.
The child uninsured rate increased from 5.2% in 2018 to 5.7% in
2019.\182\
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\179\ ``Mirror, Mirror 2021: Reflecting Poorly.'' The
Commonwealth Fund (2021). https://www.commonwealthfund.org/publications/fund-reports/2021/aug/mirror-mirror-2021-reflecting-poorly.
\180\ ``Trends in the US Uninsured Population 2010-2020.'' APSE
Office of Health Policy (2020). https://aspe.hhs.gov/system/files/pdf/265041/trends-in-the-us-uninsured.pdf.
\181\ Keisler-Starkey, Katherine and Lisa N. Bunch. ``Health
Insurance Coverage in the United States: 2019.'' (2020) https://www.census.gov/library/publications/2020/demo/p60-271.html.
\182\ ``Census Data Show Largest Annual Increase in Number of
Uninsured Children in More Than a Decade.'' https://ccf.georgetown.edu/2020/09/15/census-data-show-decades-largest-annual-increase-in-number-of-uninsured-children/.
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The provisions in these interim final rules will protect uninsured
(or self-pay) individuals by allowing them to obtain a good faith
estimate of expected charges from providers and facilities prior to
receiving scheduled items and services and upon request. With this
information, uninsured (or self-pay) individuals may be more likely to
consider and compare costs across providers or facilities prior to or
upon scheduling an item or service to help inform decisions regarding
costs for an item or service. Additionally, these interim final rules
protect these uninsured (or self-pay) individuals from receiving
excessive surprise bills from providers and facilities, and allow an
uninsured (or self-pay) individual to seek a determination through the
patient-provider dispute resolution process if billed charges for items
or services from a provider or facility are substantially in excess of
the expected charges listed on the good faith estimate.
The patient-provider dispute resolution process further protects
uninsured (or self-pay) individuals as the process may result in lower
payments. During the dispute resolution process, the SDR entity must
review any documentation submitted by the uninsured (or self-pay)
individual or their authorized representative, or a provider or
facility, and must make a determination as to whether the health care
provider or health care facility has provided credible information for
each billed item or service, including an item or service that did not
originally appear on the good faith estimate, to demonstrate that the
difference between the billed charge and the expected
[[Page 56055]]
charge in the good faith estimate reflects the costs of a medically
necessary item or service and is based on unforeseen circumstances that
could not have reasonably been anticipated by the provider or facility
when the good faith estimate was provided. HHS is of the view that this
helps ensure that the SDR entity review is comprehensive and that the
facts and circumstances for the billed charge for each item or service
are considered by the SDR entity. HHS is also of the view that this
approach ensures that the uninsured (or self-pay) individual is only
billed charges that reflect medically necessary items or services and
are based on unforeseen circumstances that could not have reasonably
been anticipated by the provider or facility when the good faith
estimate was provided. This dispute resolution process protects the
uninsured (or self-pay) individual from unexpected charges in cases
where there are extra charges based on items or services that are not
medically necessary, or could have been reasonably foreseen and thus
included on the good faith estimate.
These provisions also provide protections when an uninsured (or
self-pay) individual receives a bill that includes providers or
facilities that were not included in the good faith estimate,
specifically if a co-provider or co-facility is replaced at the last
moment by a different co-provider or co-facility. These interim final
rules provide important consumer protections that are aimed to protect
uninsured (or self-pay) individuals from unexpected medical bills by
not allowing a provider or facility to essentially circumvent these
protections simply due to not being directly represented on the good
faith estimate. Therefore, HHS is of the view that it is necessary and
appropriate for billed items or services of providers or facilities to
be eligible for dispute resolution if the billed charge is
substantially in excess of the total expected charges included in the
good faith estimate for the original co-provider or co-facility. If the
replacement provider or facility provides the uninsured (or self-pay)
individual with an updated good faith estimate in accordance with 45
CFR 149.610(b)(2) then the determination of whether an item or service
billed by the replacement co-provider or co-facility is eligible for
dispute resolution is based on whether the total billed charges for the
replacement co-provider or co-facility is substantially in excess of
the total expected charges included in the good faith estimate provided
by the replacement co-provider or co-facility. HHS recognizes that
these particular situations may be more complex for an uninsured (or
self-pay) individual to determine eligibility for dispute resolution
since the provider or facility may not be reflected in the good faith
estimate.
HHS is of the view that requiring an uninsured (or self-pay)
individual to pay the entire cost of dispute resolution in cases where
the provider or facility prevails in dispute resolution could be
prohibitive for such an uninsured (or self-pay) individual to access
the dispute resolution process. HHS is also concerned that requiring a
provider or facility to pay dispute resolution costs when they do not
prevail could impose a burden on the provider or facility and
potentially provide an incentive for the provider or facility to raise
prices on uninsured (or self-pay) individuals to account for potential
dispute resolution costs or avoid treating uninsured (or self-pay)
individuals altogether. Therefore, HHS is adopting an approach in which
HHS will cover dispute resolution costs through contracts with SDR
entities for the patient-provider dispute-resolution process. HHS
estimates that the total costs to be paid for patient-provider dispute
resolution to SDR entities to be $10,633,600.\183\ Such an approach
ensures that the uninsured (or self-pay) individual would not be
required to pay dispute resolution costs and as a result would not face
a barrier to accessing the dispute resolution process. Additionally, as
the provider or facility would not be required to pay dispute
resolution costs, such approach would reduce the provider's or
facility's incentives to increase prices or restrict an uninsured (or
self-pay) individual's access to needed care.
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\183\ The number is estimated as follows: 51,744,200
nonemergency elective procedures (surgical and non-surgical)
performed annually x 9.2% uninsured rate = 4,760,466. HHS assumes
that some uninsured (or self-pay) individuals will forgo elective
procedures because of costs. HHS assumes that 333,232 of uninsured
(or self-pay) individuals who undergo a nonemergency elective
procedure will receive a billed amount that is $400 or greater more
than the total expected charges listed in the good faith estimate
for the provider or facility, therefore 3,332,326 x 10% = 333,232.
The Department assumes that 8% of these individuals will engage the
provider-patient dispute resolution process, therefore 333,232 x 8%
= 26,659. For the first year, HHS expects the SDR fee per
arbitration to be about $400 therefore $400 x 26,659 = $10,633,600.
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In addition, PHS Act section 2799B-7 requires that the Secretary of
HHS establish an administrative fee to participate in the patient-
provider dispute resolution process in such a manner as to not create a
barrier to an uninsured (or self-pay) individual to participate in such
process. HHS intends to establish an administrative fee in guidance in
a manner that will not create a barrier to an uninsured (or self-pay)
individual's access to the patient-provider dispute resolution process.
For the first year, HHS expects the fee to be no more than $25.
Although HHS is of the view that requiring all parties to the
dispute resolution to pay an administrative fee to offset some of the
Federal costs for administering the patient-provider dispute resolution
program is appropriate, only the non-prevailing party will be required
to pay the administrative fee (either as a payment made directly to the
SDR entity in the case of the uninsured (or self-pay) individual, or in
a reduction in the final payment determination amount as in the case of
the provider or facility). In cases where the SDR entity determines the
payment amount the uninsured (or self-pay) individual pays is less than
the billed charge, the SDR entity would apply a reduction equal to the
administrative fee amount paid by the uninsured (or self-pay)
individual to the payment amount to calculate the final payment
determination amount to be paid by the uninsured (or self-pay)
individual for the items or services. HHS is of the view that requiring
the SDR entity to apply a reduction equal to the administrative fee
paid by the uninsured (or self-pay) individual to the payment amount is
the appropriate approach as it simplifies the number of transactions.
HHS anticipates collecting $666,475 \184\ in administrative fees from
an anticipated 26,659 cases, which will offset some of the costs of the
patient-provider dispute resolution process, which is estimated to be
$12.6 million (which includes IDR portal system maintenance and
contracting fees for SDRs) beginning in 2022, resulting in a total cost
to the Federal Government of approximately $12 million.
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\184\ The number is estimated as follows: 51,744,200
nonemergency elective procedures (surgical and non-surgical)
performed annually x 9.2% uninsured rate = 4,760,466. HHS assumes
that some uninsured (or self-pay) individuals will forego elective
procedures because of costs. HHS assumes that 333,232 of uninsured
(or self-pay) individuals who undergo a nonemergency elective
procedure will receive a billed charge that is at least $400 more
than the total expected charges listed in the good faith estimate
for the provider or facility, therefore 3,332,326 x 10% = 333,232.
The Department assumes that 8% will engage the provider-patient
dispute resolution process, therefore 333,232 x 8% = 26,659. For the
first year, HHS expects the SDR fee per arbitration to be $25
therefore $25 x 26,659 = $666,475.
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External Review Requirements
These interim final rules will help transform the external review
process
[[Page 56056]]
into a more uniform and structured process. As stated earlier in this
preamble, these interim final rules extend the balance billing
protections related to external review to grandfathered plans.
Grandfathered health plans must provide external review for adverse
benefit determinations involving benefits subject to these surprise
billing protections. Additionally, for non-grandfathered health plans
these interim final rules clarify that, to the extent not already
covered, that any adverse determination that involves consideration of
whether a plan or issuer is complying with PHS Act section 2799A-1 or
2799A-2, ERISA section 716 or 717, or Code section 9816 or 9817 is
eligible for external review. Grandfathered and non-grandfathered plans
must comply either with a state external review process or the Federal
external review process. A more uniform external review process will
provide a broad range of direct and indirect benefits that will accrue
to varying degrees to all affected parties. In general, the Departments
expect that these interim final rules will improve the extent to which
group health plans, issuers, and FEHB carriers provide benefits
consistent with the established terms of individual plans or coverages.
This change will cause some participants to receive benefits that they
might otherwise have been denied. Furthermore, expenditures by plans
may be reduced as a fuller system of claims and appeals processing
helps facilitate enrollee acceptance of cost management efforts.
Furthermore, the more uniform standards for handling appeals and
external review provided by these interim final rules will reduce the
incidence of inappropriate denials, averting serious, avoidable lapses
in access to health care and resultant injuries and losses to
participants, beneficiaries, and enrollees. These changes also will
enhance participants', beneficiaries', and enrollees' level of
confidence in and satisfaction with their health care benefits and
improve plans' awareness of participant, beneficiary, enrollee, and
provider concerns. These changes could prompt plan and issuer responses
that improve health care quality.
1.5. Costs
These interim final rules seek to protect patients from surprise
billing, while also seeking to minimize the costs to providers,
facilities, plans, issuers, and individuals.
The ultimate effect of the Federal IDR process on health care costs
is uncertain. Discussions of the uncertainty and potential transfers
that the Departments expect are included in the Transfers and
Uncertainty sections.
1.5.1. Federal IDR Process for Nonparticipating Providers or
Nonparticipating Emergency Facilities
The Departments and OPM do not have data on how many claims will be
submitted to the Federal IDR process. For the purposes of the estimates
in this section, the Departments and OPM rely on the experience of New
York State. In 2018, New York State had 1,014 IDR decisions, up from
650 in 2017 and 396 in 2016.\185\ The Departments do not know what is
causing the increasing trend or whether the trend is likely to continue
to increase. The Departments seek comments on this trend for analytic
purposes. In 2018, the state of New York accounted for 5.8 percent of
the private insurance market.\186\ For purposes of this analysis, the
Departments assume that, going forward, New York State will continue to
see 1,000 IDR cases each year and that the number of Federal IDR cases
will be proportional to that in New York State by share of covered
individuals in the private health coverage market. Accordingly, the
Departments estimate that there will be approximately 17,000 claims
that are submitted to the Federal IDR process each year.\187\ The
Departments seek comment on this estimate.
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\185\ Adler, Loren. ``Experience with New York's Arbitration
Process for Surprise Out-of-Network Bills.'' U.S.C.-Brookings
Schaeffer on Health Policy. (October 2019). https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2019/10/24/experience-with-new-yorks-arbitration-process-for-surprise-out-of-network-bills/.
\186\ In 2018, 10.5 million individuals had employer-sponsored
insurance and 1.8 million individuals had other private coverage in
New York State, while 178.4 million individuals had employer-
sponsored coverage and 34.8 million individuals had other private
coverage nationally. The Departments estimate that New York accounts
for 5.8 percent of the private insurance market ((10.5 + 1.8)/(178.4
+ 34.8) = 5.8 percent). See Employee Benefits Security
Administration. ``Health Insurance Coverage Bulletin.'' (March
2019). https://www.dol.gov/sites/dolgov/files/EBSA/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2019.pdf.
\187\ This is calculated as: 1,000/0.058 = 17,333.
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Surprise billing decreased by 34 percent in New York State between
2015 and 2018 when the state implemented an IDR process.\188\ While the
number of IDR cases has been trending up, the decline in surprise
billing is likely to result in a decline in IDR cases. Additionally,
the usage and cost of certified IDR entities is likely to decrease when
certified IDR entities use the QPA as the rebuttable presumption in
payment determination, particularly after the first instance of using
the QPA. The Departments do not have any data or experiences on which
to base an estimate of how much use of the Federal IDR process will
decline over time. Accordingly, in these estimates, prevalence of the
use of the Federal IDR process is assumed to be constant; however, the
Departments recognize that this is likely an overestimate.
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\188\ Marion Mass. ``Surprise Billing Legislation Should Put
Independent Dispute Resolution at Its Heart.'' Morning Consult.
(March 2020). https://morningconsult.com/opinions/surprise-billing-legislation-should-put-independent-dispute-resolution-at-its-heart/.
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The Departments estimate that the cost associated with the Federal
IDR process for nonparticipating providers or nonparticipating
emergency facilities will be $38.4 million. This includes an estimated
cost of $21.1 million for paperwork requirements. For more details,
please refer to the Paperwork Reduction Act section of this preamble.
In addition to the paperwork costs for the Federal IDR process, the
Departments estimate that it will take, a medical and health services
manager 2 hours and a clerical worker 15 minutes on average to prepare
materials for open negotiation for each plan, issuer, or FEHB carrier
and provider or facility. The Departments estimate that 25 percent of
disputes will be resolved in open negotiation before entering the
Federal IDR process. The Departments request data or comments on this
assumption. Accordingly, the Departments estimate that 23,111 claims
will go through open negotiation.\189\ This results in a cost of $10.3
million.\190\
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\189\ This is calculated 17,333/(1-0.25) = 23,111.
\190\ The burden is estimated as follows: 23,111 claims x 2
hours + 23,111 claims x 0.25 hour = 51,999 hours. A labor rate of
$105.01 is used for a medical and health services manager and a
labor rate of $55.23 is used for a clerical worker. The labor rates
are applied in the following calculation: 23,111 claims x 2 hours x
$105.01 + 23,111 claims x 0.5 hour x $55.23 = $5,172,803. 2 x
$5,172,803 = $10,345,605. Labor rates are EBSA estimates.
---------------------------------------------------------------------------
If the plan, issuer, or FEHB carrier and the provider or facility
fail to select a certified IDR entity, the Departments will select a
certified IDR entity through a random selection method. The Departments
assume that in 25 percent of IDR payment determinations, a certified
IDR entity will not be selected by the parties. The Departments request
comment on this assumption.
Furthermore, the party whose offer was not chosen by the certified
IDR entity must pay the certified IDR entity fee, in addition to the
administrative fee (required to be paid by both parties upon initiation
of the IDR process). However, if the parties agreed upon an out-of-
network rate, the certified IDR entity fee must be divided equally
[[Page 56057]]
between the parties, unless otherwise agreed to by the parties. In New
York, IDR entities included independent review organizations who
contracted with board certified physicians and other insurance contract
experts.\191\ The fees charged by IDR entities in New York ranged from
$300 to $600.\192\ In Texas, the state contracted with individual
attorneys to provide IDR entities. In Texas, fixed fees ranged from
$270 to $6,000.\193\ Based on these ranges, the Departments estimate
that on average the certified IDR entity fees will be approximately
$400. This results in a cost of $6.9 million.\194\
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\191\ Kaiser Family Foundation. ``Surprise Medical Bills: New
Protections for Consumers Take Effect in 2022.'' (2019). https://www.kff.org/private-insurance/fact-sheet/surprise-medical-bills-new-protections-for-consumers-take-effect-in-2022/.
\192\ The Commonwealth Fund. ``How States are Using Independent
Dispute Resolution to Resolve Out-of-Network Payments in Surprise
Billing.'' (February 2020). https://www.commonwealthfund.org/blog/2020/how-states-are-using-independent-dispute-resolution-resolve-out-network-payments-surprise.
\193\ Kaiser Family Foundation. ``Surprise Medical Bills: New
Protections for Consumers Take Effect in 2022.'' (2019). https://www.kff.org/private-insurance/fact-sheet/surprise-medical-bills-new-protections-for-consumers-take-effect-in-2022/.
\194\ The cost is estimated as follows: (17,333 x $400) =
$6,933,200.
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1.5.2. IDR Process for Air Ambulances
In 2018, 178.4 million individuals had employer-sponsored health
insurance and 34.8 million individuals had other private insurance,
including individual market coverage.\195\ In 2017, the Health Cost
Institute (HCCI) estimated that, on average, there were 33.3 air
ambulance uses per 100,000 people,\196\ and the Government
Accountability Office (GAO) estimated that approximately 69 percent of
air transports resulted in an out-of-network bill.\197\ The Departments
do not have data on what percent of out-of-network bills will proceed
to the Federal IDR process; however, given the nature of air ambulances
services, the Departments assume that it will be substantially higher
than for hospital or emergency department claims. The Departments
assume that 10 percent of out-of-network claims for air ambulance
services will be submitted to the Federal IDR process,\198\ which would
result in nearly 4,900 air transport payment determinations in the
Federal IDR process each year.\199\ The Departments seek comment on
this estimate.
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\195\ Employee Benefits Security Administration. ``Health
Insurance Coverage Bulletin.'' (March 2019). https://www.dol.gov/sites/dolgov/files/EBSA/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2019.pdf.
\196\ Hargraves, John and Aaron Bloschichak. ``Air Ambulances-
10-Year Trends in Costs and Use.'' Health Care Cost Institute.
(2019). https://healthcostinstitute.org/emergency-room/air-ambulances-10-year-trends-in-costs-and-use.
\197\ Government Accountability Office. ``Air Ambulance:
Available Data Show Privately-Insured Patients are at Financial
Risk.'' (2019). https://www.gao.gov/assets/gao-19-292.pdf.
\198\ The Departments utilize 10 percent as an assumption to
estimate the overall number of physicians billing out-of-network at
least once in a year.
\199\ The Departments estimate that of the 213.2 million
individuals with employer-sponsored and other private health
insurance (178.4 million individuals with employer-sponsored health
insurance and 34.8 million individuals with other private
insurance), there are 33.3 air transports per 100,000 individuals,
of which 69 percent result in an out-of-network bill. The
Departments assume that 10 percent of the out-of-network bills will
end up in IDR. (213,200,000 x 0.000333 x 0.69 x 0.1= 4,899).
---------------------------------------------------------------------------
The Departments estimate that the cost associated with the Federal
IDR process for nonparticipating providers or nonparticipating
providers of air ambulance services will be $11.1 million. This
includes an estimated cost of $5.3 million for paperwork requirements.
For more details, please refer to the Paperwork Reduction Act section.
In addition to the paperwork costs, the Departments estimate that
it will take, a medical and health services manager 2 hours and a
clerical worker 15 minutes on average to prepare materials for open
negotiation for each plan, issuer, or FEHB carrier and provider of air
ambulance services. The Departments estimate that 25 percent of
disputes will be resolved in open negotiation before entering the
Federal IDR process. The Departments request data or comments on this
assumption. Accordingly, the Departments estimate that 6,532 claims
will go through open negotiation.\200\ This results in a cost of $3.8
million.\201\
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\200\ This is calculated 4,899/(1-0.25) = 6,532.
\201\ The burden is estimated as follows: 6,532 claims x 2 hours
+ 6,532 claims x 0.25 hour = 39,190 hours. A labor rate of $105.01
is used for a medical and health services manager and a labor rate
of $55.23 is used for a clerical worker. The labor rates are applied
in the following calculation: 6,532 claims x 2 hours x $105.01 +
6,532 claims x 0.5 hour x $55.23 = $1,895,077. 2 x $1,895,077 =
$3,790,154. Labor rates are EBSA estimates.
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As stated above, if the plan, issuer, or FEHB carrier, and the
nonparticipating provider of air ambulance services fail to select a
certified IDR entity, the Departments will select a certified IDR
entity through a random selection method. The Departments estimate that
in 25 percent of IDR payment determinations, a certified IDR entity
will not be selected by the parties.
Furthermore, the party whose offer was not chosen by the certified
IDR entity must pay the certified IDR entity fee, in addition to the
administrative fee (initially required to be paid by both parties upon
initiation of the Federal IDR process). However, if the parties agree
upon an out-of-network rate, the costs must be divided equally between
the parties, unless otherwise agreed to by the parties. In New York,
IDR entities included independent review organizations that contracted
with board certified physicians and other insurance contract
experts.\202\ The fees charged by IDR entities in New York ranged from
$300 to $600.\203\ In Texas, the state contracted with individual
attorneys to provide IDR entities. In Texas, fixed fees per case ranged
from $270 to $6,000.\204\ Based on these ranges, the Departments
estimate that on average the certified IDR entity fees will be
approximately $400. This results in a cost of approximately $2
million.\205\ This results in a cost of approximately $2 million.\206\
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\202\ Kaiser Family Foundation. ``Surprise Medical Bills: New
Protections for Consumers Take Effect in 2022.'' (2019). https://www.kff.org/private-insurance/fact-sheet/surprise-medical-bills-new-protections-for-consumers-take-effect-in-2022/.
\203\ The Commonwealth Fund. ``How States are Using Independent
Dispute Resolution to Resolve Out-of-Network Payments in Surprise
Billing.'' (February 2020). https://www.commonwealthfund.org/blog/2020/how-states-are-using-independent-dispute-resolution-resolve-out-network-payments-surprise.
\204\ Kaiser Family Foundation. ``Surprise Medical Bills: New
Protections for Consumers Take Effect in 2022.'' (2019). https://www.kff.org/private-insurance/fact-sheet/surprise-medical-bills-new-protections-for-consumers-take-effect-in-2022/.
\205\ The cost is estimated as follows: (4,899 x $400) =
$1,959,600.
\206\ The cost is estimated as follows: (4,899 x $400) =
$1,959,600.
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1.5.3. Requests Extension of Time Periods for Extenuating Circumstances
A plan, issuer, FEHB carrier, provider, facility, or provider of
air ambulance services may request an extension regarding the time
periods set forth in these interim final rules, other than for the
timing of the payments, including payments to the provider, facility,
or air ambulance services, under extenuating circumstances. To request
an extension, entities will need to submit the Request for Extension
due to Extenuating Circumstances form through the Federal IDR portal,
if the extension is necessary to address delays due to matters beyond
the control of the parties or for good cause. Additionally, they must
attest that prompt action will be taken to ensure that the required
action is made as soon as administratively practicable. The Departments
estimate that the costs associated with requests for the extension of
time periods will be $1,381 annually. For more details, please refer to
the Paperwork Reduction Act section of this preamble.
[[Page 56058]]
1.5.4. Requirements for Certified IDR Entities
An IDR entity must be certified under standards and procedures set
forth in these interim final rules and in guidance promulgated by the
Departments. For each month, certified IDR entities will be required to
report information on their activity to the Departments. The
Departments estimate that there will be 50 entities seeking IDR
certification, as discussed earlier in this analysis of economic and
paperwork burdens.
The Departments estimate that the cost associated with the IDR
entity certification process and reporting requirements will be
$149,616 in the first year and $124,491 in the subsequent years. For
more details, please refer to the Paperwork Reduction Act section.
1.5.5. External Review Requirements
The interim final rules require grandfathered health plans to
provide external review for adverse benefit determinations involving
benefits subject to these surprise billing protections.
The Departments estimate that there are approximately 84.4 million
participants in self-insured ERISA-covered plans. Prior to the interim
final rules, the Departments estimate that there were approximately 8.1
million participants in ERISA-covered plans in the states which
currently have no external review laws or whose laws do not meet the
Federal minimum requirements. These estimates lead to a total of 92.5
million participants. Among the 92.5 million participants, 80.5 million
participants in non-grandfathered plans and 12 million participants in
grandfathered plans will be required to be covered by the external
review requirement.
The Departments estimate that there are approximately 1.3 external
reviews for every 10,000 participants and that there will be
approximately 12,304 external reviews annually. Experience from North
Carolina indicates that about 75 percent of requests for external
review are actually eligible to proceed to an external review.\207\
Therefore, the Departments expect that there will be about 15,942
requests for external review. The Departments estimate that the cost
associated with the external review requirements for ERISA-covered
plans will be $3.3 million.
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\207\ North Carolina Department of Insurance. ``Health Insurance
Smart NC: Annual Report on External Review Activity 2013.'' https://digital.ncdcr.gov/digital/collection/p249901coll22/id/730531.
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Additionally, HHS estimates that there are approximately 13.5
million individual market enrollees and 19.3 million non-Federal
governmental plans enrollees.\208\ These estimates lead to a total of
32.8 million total enrollees in individual market and non-Federal
Government plans. Among the 32.8 million participants, 2.6 million are
in grandfathered plans and 30.1 million are in non-grandfathered plans.
HHS also added a 2 percent increase in the number of out-of-networks
claims to capture the increase in burden on non-grandfathered plans
resulting from the surprise billing and cost sharing protections of the
external review requirements, resulting in an adjusted total of 30.7
million participants for non-grandfathered plans and an adjusted total
of 33.3 million participants for all individual market and non-Federal
Government plans.
---------------------------------------------------------------------------
\208\ Individual market based on data from MLR annual report for
the 2019 MLR reporting year, available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr. Non-federal government plans data from
Agency for Healthcare Research and Quality, Center for Financing,
Access and Cost Trends. 2019 Medical Expenditure Panel Survey-
Insurance Component.
---------------------------------------------------------------------------
HHS also estimates there are an estimated 1.3 external reviews for
every 10,000 participants and that there will be approximately 4,337
total external reviews annually for individual market and non-Federal
Government plans. This amount includes 3,994 reviews for non-
grandfathered plans and 343 for grandfathered plans. Experience from
North Carolina indicates that about 75 percent of requests for external
reviews are actually eligible to proceed to an external review,
therefore it is expected that there will be about 5,783 requests for
external review. This amount includes 5,326 requests for non-
grandfathered plans and 457 requests for grandfathered plans. HHS
estimates that the cost associated with the external review
requirements for individual market and non-Federal Government plans
will be $241,850.
In summary, the Departments estimate that the total annual cost
associated with the External Review for DOL will be $3.3 million and
the total annual cost associated with the External Review for HHS will
be will be $0.2 million. For more details, see the Paperwork Reduction
Act section.
1.5.6. Protections for the Uninsured
These interim final rules seek to protect uninsured (or self-pay)
individuals from surprise billing through two mechanisms: The provision
of good faith estimates from providers and facilities and the patient-
provider dispute resolution process to resolve billing disputes when an
uninsured (or self-pay) individual receives a bill for charges that are
substantially in excess of the expected charges listed in the good
faith estimates.
1.5.7. Good Faith Estimates
As discussed in the Paperwork Reduction Act section of this
preamble, HHS estimates the total annual burden to convening providers
or facilities to notify uninsured (or self-pay) individuals of the
availability of good faith estimates to be approximately 2,743,283
hours with an equivalent cost of $320,250,167. HHS estimates the annual
cost to a convening provider or facility to provide a good faith
estimate of expected charges to uninsured (or self-pay) individuals for
scheduled items and services and upon requests between 2022 and 2024 to
be $356,727,765 and total burden hours of 3,538,305.
1.5.8. Patient-Provider Dispute Resolution Process
As discussed in the Paperwork Reduction Act section of this
preamble, HHS estimates the total annual burden associated with the
patient-provider dispute resolution process for uninsured (or self-pay)
individuals and health care providers and health care facilities to be
approximately 255,524 hours with an equivalent cost of $29,764,646.
1.5.9. Patient-Provider SDR Entity Certification
As discussed in the Paperwork Reduction Act section of this
preamble, HHS estimates the total annual burden associated with the SDR
entity certification to be 16 hours with an equivalent cost of $1,873
in the first year. In subsequent years, the total hour burden
associated with the SDR entity certification or recertification is 2.25
hours with an equivalent cost of $257. HHS seeks comment on the
assumptions and calculations made in the corresponding Information
Collection Request (ICR). The Departments also seek comment on the
estimates presented in this section and on any additional costs
incurred by patients, providers, providers of air ambulance services,
facilities and uninsured (or self-pay) individuals.
1.5.10. Summary
The Departments estimate the total cost burden associated with
these interim final rules to be $760.95 million in the first year, with
$38.43 million attributable to the Federal IDR process for
nonparticipating providers or nonparticipating emergency facilities or
[[Page 56059]]
group health plans or health insurance issuers offering health
insurance coverage, $11.08 million attributable to the Federal IDR
process for air ambulance services; $149,616 attributable to costs
associated with certification and recordkeeping requirements for
certified IDR entities, $4.02 million attributable to the external
review process, and $706.7 million attributable to the patient-provider
dispute resolution process.
The Departments seek comment addressing the costs that will be
associated with these interim final rules. The Departments also seek
comment on how these interim final rules will affect individuals from
minority and underserved communities, and providers and facilities who
serve these individuals.
1.6. Transfers
These interim final rules will protect patients from surprise bills
for emergency and nonemergency medical services and air ambulance
services. The Departments and OPM recognize this as transfers between
individuals, plans, issuers, FEHB carriers, and providers, facilities,
and providers of air ambulance services. The Departments and OPM expect
that these interim final rules will result in some transfers from
providers, facilities, and providers of air ambulance services to
individuals, some transfers from plans, issuers, and FEHB carriers to
providers, facilities, and providers of air ambulance services, and
some transfers from individuals to plans, issuers, and FEHB carriers
and providers, facilities, and providers of air ambulance services. The
magnitude of each of these transfers is uncertain, and as such, the
ultimate effect of the Federal IDR process on each of entity is largely
uncertain.
These interim final rules may result in lower out-of-pocket
spending by individuals, as these interim final rules are expected to
decrease surprise billing. This result would follow from two types of
transfers: Transfers from providers, facilities, and providers of air
ambulance services who had previously balance billed individuals for
out-of-network claims to individuals who would have received those
balance bills, and transfers from plans, issuers, and FEHB carriers who
were previously not responsible for out-of-network bills to providers
who would submit out-of-network bills to plans, issuer, and FEHB
carriers as a result of these interim final rules. The Departments
request comment or data on how large each of these transfers might be.
As shown in Table 3, the mean provider charges relative to Medicare
payment rates differ across physician specialties, and the ratios for
specialties in which surprise billing is more common have a higher
ratio of mean provider charges relative to Medicare payments rates than
those specialties for which surprise billing is less common. These
higher rates have been linked to the fact that patients are not able to
select providers in these specialties, leaving patients more vulnerable
to surprise billing.\209\ The Departments expect that the proposed
interim final rules will lead to the ratio of mean provider charges to
Medicare payment rates to converge with specialties with comparatively
infrequent surprise billing.
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\209\ See Hannick, Kathleen and Loren Adler. ``Provider Charges
Relative to Medicare Rates, 2012-2018.'' USC-Brookings Schaeffer on
Health Policy. (May 2021). https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2021/05/03/provider-charges-relative-to-medicare-rates-2012-2018/.
Table 3--Ratio of Mean Provider Charges to Medicare Payment Rates by
Specialty
------------------------------------------------------------------------
Mean ratios,
Specialty 2018 \210\
------------------------------------------------------------------------
Specialties with infrequent surprise billing
------------------------------------------------------------------------
Family Practice......................................... 2.1
Internal Medicine....................................... 2.2
Primary Care............................................ 2.2
Dermatology............................................. 2.1
------------------------------------------------------------------------
Specialties with frequent surprise billing
------------------------------------------------------------------------
Anesthesiology.......................................... 7.0
Emergency Medicine...................................... 5.7
Diagnostic Radiology.................................... 4.0
Pathology............................................... 2.7
------------------------------------------------------------------------
Further, research finds that New York's Out-of-Network Law \211\
has saved consumers over $400 million from the date of implementation,
March 2015, through the end of 2018 with respect to emergency services
alone.\212\ These savings have been realized in part through a
reduction in costs associated with emergency services and an increased
incentive for network participation. By establishing an IDR process for
out-of-network emergency services, the Out-of-Network Law reduced out-
of-network billing by 34 percent and lowered in-network emergency
physician payments by 9 percent.\213\
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\210\ See Hannick, Kathleen and Loren Adler. ``Provider Charges
Relative to Medicare Rates, 2012-2018.'' USC-Brookings Schaeffer on
Health Policy. (May 2021). https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2021/05/03/provider-charges-relative-to-medicare-rates-2012-2018/.
\211\ NY Fin Serv L Sec. 605 (2014).
\212\ New York State Department of Financial Services. ``New
York's Surprise Out-Of-Network Protection Law Report on the
Independent Dispute Resolution Process.'' (September 2019). https://www.pacep.net/assets/documents/NYReportontheIDRProcess.pdf.
\213\ Cooper, Zack, Fiona Scott Morton, and Nathan Shekita.
``Surprise! Out-Of-Network Billing for Emergency Care in the United
States.'' 128 Journal of Political Economy 9. (2020).
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The interim final rules are expected to have an effect on premiums,
although there is uncertainty around how premiums will ultimately be
affected. The Congressional Budget Office estimated the provisions in
the No Surprises Act are likely to reduce premiums by 0.5 percent to 1
percent in most years.\214\ In comparison, the CMS's Office of the
Actuary (OACT) estimated the provisions are likely to increase premiums
by 0.00 percent to 0.35 percent.\215\ Neither of these estimates
isolate the effect attributable to the Federal IDR process.
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\214\ Congressional Budget Office. ``Estimate for Divisions O
Through FF. H.R. 133, Consolidated Appropriations Act, 2021. Public
Law 116-260.'' https://www.cbo.gov/system/files/2021-01/PL_116-260_div%20O-FF.pdf.
\215\ The OACT analysis assumed that an individuals' cost-
sharing is limited to their in-network cost-sharing amounts and that
plans and issuers are responsible for any excess of the allowed
amounts for nonparticipating providers over in-network reimbursement
rates. OACT assumed that that the average allowed amounts for
services provided by nonparticipating providers will remain higher
than in-network reimbursement rates after the No Surprises Act takes
effect. OACT estimated a range of values for out-of-network allowed
charges between 125 percent and 150 percent of average network
rates. OACT assumed that these estimated levels reflected the
Federal IDR process but did not make any explicit assumptions about
the separate impact of the Federal IDR process.
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The ultimate effect on premiums will depend on how much plans,
issuers, FEHB carriers, and providers, facilities, and providers of air
ambulance services will use the Federal IDR process and how the Federal
IDR process affects plan, issuer, and FEHB carrier liability. If
payments to providers decrease, this change may result in a decrease in
premiums. This decrease in premiums will result in a transfer from
providers and facilities to participants, enrollees, or beneficiaries
through plans, issuers, and FEHB carriers. Additionally, this could
result in a transfer from eligible enrollees to the Federal Government
in the form of reduced payment of the Premium Tax Credits (PTC).
Conversely, if payments to providers increase, the expenditures for
plans, issuers, and FEHB carriers may be passed on to consumers in the
form of increased premiums. This could result in three types of
transfers: (1) From the participants, enrollees, and beneficiaries to
the plans, issuers, and FEHB carriers; (2) from the Federal Government
to
[[Page 56060]]
eligible enrollees in the form of increased PTC; and (3) from insured
individuals who pay premiums to individuals with large out-of-network
bills.
In addition, these interim final rules may affect in-network and
out-of-network rates received by physicians. It is possible that the
out-of-network rates collected by some providers, facilities, and
providers of air ambulance services will be lower than they would have
been if not for the provisions in these interim final rules. There is
also uncertainty around how these interim final rules will affect the
negotiation dynamics between providers, facilities, plans, issuers, and
FEHB carriers regarding health care costs.
As evidenced in states where arbitrators are directed to base their
determinations on billed charges, there have been increased health care
costs as a result of the out-of-network payment standard being higher
than that in-network rate.\216\ However, as noted in an analysis by the
USC.-Brookings Schaeffer Initiative for Health Policy, if certified IDR
entities base their determinations on median in-network rates, which
are typically lower than billed charges, the IDR process could place
downward pressure on health care costs and premiums. If certified IDR
entities choose amounts that are above median in-network rates, this
could result in a potential increase in costs and premiums.\217\ For
example, in New York, providers prevailed in IDR at nearly twice the
rate that issuers prevailed. In the state, arbiters are told to
consider the 80th percentile of billed charges in their decision
process. A study found that even when deciding in favor of health
plans, arbitrations averaged just 11 percent below the 80th percentile
of charges, which is consistently above the typical in-network or out-
of-network rates. This result implies that plans, issuers, and FEHB
carriers only won in arbitration when paying above-market rates.\218\
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\216\ Ollove, Michael. Laws to Curb Surprise Medical Bills Might
Be Inflating Health Care Costs. PEW. (2021. https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2021/05/20/laws-to-curb-surprise-medical-bills-might-be-inflating-health-care-costs.
\217\ Adler, Loren, et al. ``Understanding the No Surprises
Act.'' USC-Brookings Schaeffer on Health Policy. (2021). https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2021/02/04/understanding-the-no-surprises-act/.
\218\ Adler, Loren. ``Experience with New York's Arbitration
Process for Surprise Out-of-Network Bills.'' USC-Brookings Schaeffer
on Health Policy. (October 2019). https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2019/10/24/experience-with-new-yorks-arbitration-process-for-surprise-out-of-network-bills/.
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Further, in the Federal IDR process, certified IDR entities are
required to consider credible information about additional factors such
as providers' expertise and patient characteristics after beginning
with a presumption in favor of the QPA, making it beneficial for a
provider or facility to initiate the process when they expect to be
paid more than the median in-network rate. A report from the
Congressional Budget Office noted that some providers, particularly
those with more specialized services, may be able to negotiate for
larger payments from insurers by threatening to initiate the Federal
IDR process.\219\ This outcome could result in a transfer from plans,
issuers, and FEHB carriers to providers. Furthermore, this outcome
could also result in higher premiums, which could ultimately result in
a transfer from patients to providers.\220\
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\219\ Congressional Budget Office Cost Estimate. ``H.R. 2328,
Reauthorizing and Extending America's Community Health Act.''
(September 2019). https://www.cbo.gov/system/files/2019-09/hr2328.pdf.
\220\ Congressional Budget Office Cost Estimate. ``H.R. 2328,
Reauthorizing and Extending America's Community Health Act.''
(September 2019). https://www.cbo.gov/system/files/2019-09/hr2328.pdf.
---------------------------------------------------------------------------
In addition, these interim final rules may affect provider and
facility payments and revenue. It is possible that the payments
collected by some providers and facilities will be lower than they
would have been if not for the provisions in these interim final rules.
These interim final rules set standards requiring certified IDR
entities to consider the QPA (typically the median in-network rate)
when making payment determinations; the Departments expect this
approach to have a downward impact on health care costs, potentially
resulting in transfers from providers and facilities to individuals
with health coverage.
Furthermore, the external review requirements of these interim
final rules may result in a transfer from plans, or issuers to
participants and beneficiaries now receiving payment for denied
benefits. These transfers will improve equity, because incorrectly
denied benefits will be paid.
These interim final rules also establish requirements for the
uninsured (or self-pay) individual to submit an administrative fee
payment when initiating the patient-provider dispute resolution process
as provided in 45 CFR 149.620(g) and described in section IV.B.8 of
this preamble. This requirement may result in a transfer to the
uninsured (or self-pay) individual from the provider or issuer if the
uninsured (or self-pay) individual prevails in the dispute resolution
process. Under such circumstances, the SDR entity must apply a
reduction equal to the administrative fee amount paid by the individual
to the final determination amount for charges to be paid by the
individual for the items or services.
1.7. Regulatory Alternatives
Section 6(a)(3)(C)(iii) of Executive Order 12866 requires an
economically significant regulation to include an assessment of the
costs and benefits of potentially effective and reasonable alternatives
to the planned regulation. The Departments considered whether the
certified IDR entity was required to consider the QPA and permitted to
consider other statutory factors only when a party presents clear and
convincing evidence that the value of the qualified IDR item or service
materially differs from the QPA due to those factors, or whether the
certified IDR entity should be required to consider all factors
equally.
The Departments are of the view, however, that applying a clear and
convincing evidence standard does not afford enough weight to the
statutory requirement that certified IDR entities consider the
additional permissible factors. Such a standard could result in a
certified IDR entity failing to consider credible information a party
provides, even where it clearly demonstrates that the QPA is materially
different from the appropriate out-of-network rate. On the other hand,
permitting consideration of all permissible factors equally disregards
the weight that the No Surprises Act places on the QPA. For example,
Code section 9816(c)(7)(B)(iii)-(iv), ERISA section 716(c)(7)(B)(iii)-
(iv), and PHS Act section 2799A-1(c)(7)(B)(iii)-(iv) require the
Departments to report the offers as a percentage of the QPA and the
amount of the offer selected, expressed as a percentage of the QPA. The
statute also provides strict rules for calculating the QPA and creates
disclosure and audit requirements regarding the QPA.
The Departments, therefore, are of the view that starting with a
rebuttable presumption that the QPA is the appropriate payment amount
properly emphasizes the QPA while requiring the consideration of the
permissible additional factors when appropriate. The QPA generally is
based on the median of contracted rates, which are the product of
contract negotiations between providers and facilities and plans (and
their service providers) and issuers, and therefore generally reflect
market rates. The statute sets out detailed rules for calculating the
QPA, including a requirement that when
[[Page 56061]]
plans, issuers, and FEHB carriers do not have sufficient information to
calculate their own median contracted rates, they utilize a database
free of conflicts of interests.\221\ Plans, issuers, and FEHB carriers
must provide specific information on how the QPA is calculated to
nonparticipating providers and facilities, ensuring that they are aware
of how this rate was calculated.\222\ Plans, issuers, and FEHB carriers
are also subject to audit requirements that will be enforced by the
Departments and OPM to ensure that they follow these standards.\223\
The Departments are also required to report how the out-of-network
rates compare to the QPA, suggesting that Congress saw it as an
appropriate analogue for the out-of-network rate.\224\ Moreover,
starting with the QPA as the rebuttable presumption for the appropriate
payment amount will increase the predictability of dispute resolution
outcomes which may encourage parties to reach an agreement outside of
the Federal IDR process to avoid the administrative costs and will aid
in reducing prices that may have been inflated due to the practice of
surprise billing prior to the No Surprises Act. Finally, the
Departments are of the view that this approach will protect
participants, beneficiaries, and enrollees from excessive costs, either
through reduced costs for items and services or through decreased
premiums. Therefore, in determining which offer to select, these
interim final rules provide that the certified IDR entity must begin
with the presumption that the QPA for the applicable year is the
appropriate payment amount for the qualified IDR items or services. The
certified IDR entity must, however, consider the other factors when a
party provides credible information, and must choose the offer closest
to the QPA, unless the credible evidence submitted by the parties
clearly demonstrates that the QPA is materially different from the
appropriate out-of-network rate.
---------------------------------------------------------------------------
\221\ Code section 9816(a)(2), (3)(E); ERISA section 716(a)(2),
(3)(E) and PHS Act section 2799A-1(a)92), (3)(E); 26 CFR 54.9816-6T,
29 CFR 2590.716-6, and 45 CFR 149.140.
\222\ Id.
\223\ 86 FR 36872, 36899 (July 13, 2021).
\224\ Code section 9816(c)(7)(A)(v), (B)(iii) and (iv); ERISA
section 716(c)(7)(A)(v), (B)(iii) and (iv); and PHS Act section
2799A-1(c)(7)(A)(v), (B)(iii) and (iv).
---------------------------------------------------------------------------
As noted previously, emphasizing the QPA will allow for
predictability. As mentioned earlier in this preamble, when the
recognized amount is the QPA, plans, issuers, and FEHB carriers must
provide the QPA to providers and facilities when submitting an initial
payment amount or denial of payment, and must provide additional
information regarding the QPA upon request. Thus, even before beginning
negotiations, all parties involved will know that the QPA is the
primary factor that the certified IDR entity will always consider
(while other factors may be considered, depending on the
circumstances). This certainty will encourage plans, issuers,
providers, and facilities to make offers that are closer to the QPA,
and to the extent another factor could support deviation from the QPA,
to focus on evidence concerning that factor. This certainty may also
encourage parties to avoid the Federal IDR process altogether and reach
an agreement during the open negotiation period. Finally, it is
anticipated that focusing on the QPA will help mitigate costs and
reduce government expenditures once the Federal IDR process is fully
implemented, as projected by the Congressional Budget Office.\225\
Therefore, after carefully considering both interpretations, the
Departments chose to emphasize the QPA.
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\225\ Congressional Budget Office, Estimate for Divisions O
Through FF, H.R. 133, Consolidated Appropriations Act, 2021, Public
Law 116-260, Enacted on December 27, 2020. https://www.cbo.gov/publication/56962.
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Furthermore, as discussed earlier in this preamble, the Departments
considered how to select a certified IDR entity if the parties fail to
do so. Academic literature is inconclusive regarding whether the
selection process of an arbitrator has an effect on the arbitration
results. One study found significant consistency between factors
affecting an arbitrator's decision,\226\ suggesting that the selection
of a certified IDR entity by parties to the IDR, or the selection
process of a certified IDR entity by the government if the parties fail
to select a certified IDR entity, should not have a significant effect
on the outcome. Contrarily, another study found large differences among
arbitrator decisions; however, the authors attributed these differences
to information disparities between parties.\227\ As the parties in the
Federal IDR process under these interim final rules are all
professionals with specialized knowledge in health care, these
information disparities are expected to be minimal in the context of
the Federal IDR process.
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\226\ Farber, Henry and Max Bazerman. ``The General Basis of
Arbitrator Behavior: An Empirical Analysis of Conventional and
Final-Offer Arbitration.'' The Econometric Society. Vol. 54(4) (July
1986). https://www.jstor.org/stable/1912838.
\227\ Egan, Mark, Gregor Matvos, and Amit Seru. ``Arbitration
with Uniformed Consumers.'' National Bureau of Economic Research.
(October 2018). https://www.nber.org/system/files/working_papers/w25150/w25150.pdf.
---------------------------------------------------------------------------
Although the academic literature suggests that the selection of an
IDR entity is unlikely to have a significant effect on the IDR entity's
determination, the Departments explored options to minimize this risk.
The Departments considered alternative approaches, including whether
the Departments should consider the specific fee of the certified IDR
entity, or look to other factors, such as how often the certified IDR
entity chooses the amount closest to the QPA. However, looking to how
often the certified IDR entity chooses the amount closest to the QPA
could unfairly penalize certified IDR entities that have correctly
handled decisions when there is credible information clearly
demonstrating that the QPA is materially different from the appropriate
out-of-network rate. Using this as a factor in assigning certified IDR
entities could incentivize decisions that do not adequately take into
account the other factors set forth in the statute and these interim
final rules, even when there is credible information clearly
demonstrating that the QPA is materially different from the appropriate
out-of-network rate. Moreover, the consideration of other factors may
encourage plans, issuers, FEHB carriers, or providers and facilities,
to decline to agree to a particular certified IDR entity, thinking that
the Departments will favor certain criteria. Given the cost controls
applicable to the certification process, it is unlikely that the cost
of a specific certified IDR entity will be a significant factor in the
inability of the parties to choose a certified IDR entity.
Thus, after carefully considering the alternatives, the Departments
have chosen to use a random selection method to select a certified IDR
entity with a fee within the allowed range. If there is an insufficient
number of certified IDR entities with a fee within the allowed range
available to arbitrate the case, the Departments will use a random
selection method to select a certified IDR entity that has received
approval from the Departments to charge a fee outside of the allowed
range.
External Review
The Departments considered different amendments to the regulations
for external review to address the scope for non-grandfathered plans
and issuers in light of section 110 of the No Surprises Act. Under the
existing rules, a claim is eligible for external review under the
Federal external review process if it involves medical judgement. The
Departments note that the scope of
[[Page 56062]]
claims that are eligible for external review in general is broad, as
many adverse benefit determinations involve medical judgment. The
examples the Departments have provided of questions involving medical
judgement (described in more detail earlier in the preamble) include
questions involving health care setting, level of care, or
effectiveness of a covered benefit, whether treatment involved
``emergency care'' or ``urgent care,'' affecting coverage, and how a
claim is coded. The Departments note that the state external review
process also extends to questions involving the requirements for
medical necessity, appropriateness, health care setting, level of care,
or effectiveness of a covered benefit. The Departments are of the view
that many claims that result in an adverse benefit determination
involving items and services subject to the surprise billing and cost-
sharing protections under the No Surprises Act generally would be
eligible for external review under the current scope as specified in
the 2015 final regulations. However, as stated above, section 110 of
the No Surprises Act directs the Departments to require the external
review process under PHS Act section 2719 to apply with respect to any
adverse determination by a plan or issuer under PHS Act section 2799A-1
or 2799A-2, ERISA section 716 or 717, or Code section 9816 or 9817,
including with respect to whether an item or service that is subject to
such a determination is an item or service to which the respective
section applies. The Departments are of the view that it is important
to ensure that consumers can avail themselves of external review in
these situations and ensure that they are afforded full protection
against surprise medical costs (including cost sharing), as intended by
the No Surprises Act. Accordingly, these interim final rules amend the
2015 final rules to broaden the scope of external review requirements
and explicitly require, to the extent not already covered, that any
adverse determination that involves consideration of whether a plan or
issuer is complying with PHS Act section 2799A-1 or 2799A-2, ERISA
section 716 or 717, or Code section 9816 or 9817 is eligible for
external review.
HHS considered certain other approaches to furnishing good faith
estimates to uninsured (or self-pay) individuals. HHS considered
notification of the availability of good faith estimates using only
broad outreach efforts and not, in addition to, specifically requiring
that providers or facilities inform uninsured (or self-pay) individuals
of the availability of good faith estimates. However, HHS is of the
view that uninsured (or self-pay) individuals are more acutely aware of
and concerned about health care costs when engaging with providers and
facilities. Not requiring providers or facilities to notify uninsured
(or self-pay) individuals of the availability of good faith estimates
would potentially deprive uninsured (or self-pay) individuals of the
ability to avail themselves of these important consumer protections
under the No Surprises Act.
HHS considered requiring good faith estimates for each instance of
a recurring item or service with the same expected charges. HHS is of
the view that to do so would unnecessarily increase the burden on
providers and facilities, particularly for those items and services
furnished weekly or more than once per week, without adding additional
informational value for the uninsured (or self-pay) individual. HHS is
of the view that, while a single good faith estimate for certain
recurring items and services is sufficient, establishing certain
limitations is necessary in order to confirm and periodically evaluate
the accuracy of the information included in the good faith estimate.
For instance, HHS includes requirements that limit the applicability of
a good faith estimate for recurring items and services to no longer
than 12 months. If additional recurrences of furnishing such items or
services are expected beyond 12 months, a convening provider or
convening facility must provide an uninsured (or self-pay) individual
with a new good faith estimate.
HHS also considered requiring the use of standardized notices for
good faith estimates issued to uninsured (or self-pay) individuals.
However, HHS is of the view that requiring the use of such model
notices for good faith estimates would not allow providers or
facilities necessary flexibilities to develop notices that would be
most effective for their patient populations.
HHS also considered basing the substantially in excess threshold as
equal to only a percentage of the expected charges in the good faith
estimate; however HHS has concerns that such an approach could make
dispute resolution easier to access for items or services where the
expected charges are small, which would include circumstances where the
difference between the billed charge and the expected charges in the
good faith estimate is too small to justify the costs of dispute
resolution. Alternatively, when the total expected charges in the good
faith estimate are very high, few items or services could be subject to
dispute resolution, despite significant unexpected charges. HHS also
considered other approaches to defining the ``substantially in excess''
standard, including setting it as the lesser of a specific percentage
of the total expected charges in the good faith estimate or a flat
maximum dollar amount, or based on a percentage of the expected charges
in the good faith estimate that varies depending on the expected costs
of the items or service. Although these approaches would mitigate some
of the concerns discussed previously and would make it easier for
higher cost items or services to meet the substantially in excess
threshold, these approaches would increase concerns that dispute
resolution for lower cost services could be overused, thus potentially
increasing costs for providers and facilities and potentially
increasing costs for such items or services. As an alternative, HHS
also considered an approach for determining ``substantially in excess''
based on an amount that is the greater of either a percentage of the
total amount of expected charges in the good faith estimate or a flat
minimum dollar amount. However, HHS remains concerned that such an
approach could effectively put dispute resolution out of reach for
uninsured (or self-pay) individuals in situations where the expected
charges for the item or service are high, particularly for those who
need to undergo more complex procedures. Finally, HHS considered a
tiered approach, either a flat dollar amount that would increase as the
total expected charges in the good faith estimate increases or a
percentage that would decrease as the total of expected charges in the
good faith estimate increases, but HHS is of the view that such an
approach would add undue complexity and could be confusing for
uninsured (or self-pay) individuals, providers, facilities, and other
stakeholders.
Lastly, HHS considered basing the definition of ``substantially in
excess'' on billed charges that exceed a certain percentage for the
same or similar services using an independent database. However, HHS is
of the view that such a mechanism is inconsistent with the statute
which contemplates items or services to be determined to be
``substantially in excess'' based on the good faith estimate provided,
rather than being based on a specific benchmark, such as that provided
by an independent database.
As HHS obtains additional experience with the patient-provider
dispute resolution process, HHS intends to review data on the use of
the dispute
[[Page 56063]]
resolution process and may propose adjustments to the definition of
``substantially in excess'' in the future.
HHS considered whether to base eligibility for patient-provider
dispute resolution on whether an individual item or service listed on a
good faith estimate is billed an amount substantially in excess to the
expected charge in the good faith estimate. However, HHS is concerned
that such an approach would add complexity as each item or service on
the good faith estimate would need to be assessed separately for
eligibility. HHS also considered basing the eligibility on the total of
all billed charges for all items or services and all providers or
facilities listed on the good faith estimate, however such an approach
would be significantly more complex given that the good faith estimate
could consist of estimates of multiple providers and facilities who
would bill the uninsured (or self-pay) individual separately. This
approach could also potentially increase the burden on the uninsured
(or-self pay) individual who would likely need to submit multiple bills
from multiple providers or facilities for dispute resolution.
Additionally, such an approach could require a provider or facility to
respond to a notice requesting additional documentation from an SDR
entity due to the billing of other providers, even when the provider or
facility did not bill an uninsured (or self-pay) individual an amount
substantially in excess of the good faith estimate. As a result, HHS is
of the view that it is appropriate to base eligibility for dispute
resolution on each provider or facility listed on the good faith
estimate.
HHS considered not requiring co-providers or co-facilities that are
not represented on a good faith estimate due to replacing an original
co-provider or co-facility that was represented in a good faith
estimate to be subject to the patient-provider dispute resolution
process due to not having provided estimates of expected charges with
which to base whether the billed charges substantially exceed the
estimate. However, HHS is of the view that such requirements should
still apply in these circumstances as they provide important consumer
protections that are aimed to protect uninsured (or self-pay)
individuals from unexpected medical bills, and allowing a replacement
co-provider or co-facility to essentially circumvent these protections
simply due to not being directly represented on the good faith estimate
would weaken these consumer protections.
HHS considered requiring the Federal IDR portal be used by an
uninsured (or self-pay) individual to initiate a patient-provider
dispute resolution process rather than making the use of the Federal
IDR portal optional. However, HHS was concerned that such a requirement
could pose an unreasonable barrier for uninsured (or self-pay)
individuals, particularly those with limited or no access to the
internet.
HHS considered not providing a mechanism for the uninsured (or
self-pay) individual to settle on a payment amount for an item or
service prior to an SDR entity issuing a payment determination.
However, HHS is of the view that providing an opportunity for the
uninsured (or self-pay) individual and the provider or facility to come
to terms on a payment amount that is mutually agreeable for the parties
involved is appropriate as it can help resolve payment disputes quickly
without the need for a determination by an SDR entity. Such a process
can also incentivize a provider or facility to accept a lower payment
amount or to provide financial assistance to the uninsured (or self-
pay) individual.
HHS considered whether to allow the SDR entity to have discretion
to determine a payment amount lower than the expected charges listed in
the good faith estimate. However, HHS is of the view that such an
approach would result in less transparency and predictability for the
uninsured (or self-pay) individuals, providers and facilities regarding
the outcomes of the patient-provider dispute resolution process.
Therefore, HHS is of the view that the good faith estimate represents
charges the uninsured (or self-pay) individual would likely expect to
pay for the items or services, and as a result the consumer protections
established in the patient-provider dispute resolution process serve as
an important backstop that protects an uninsured (or self-pay)
individual from unexpected billed charges that substantially exceed the
good faith estimate.
HHS considered allowing an SDR entity to use a different standard
for conducting determinations, other than that the information
submitted by the provider must provide credible information that the
difference between the billed charge and the expected charge for the
item or service in the good faith estimate reflects the costs of a
medically necessary item or service and is based on unforeseen
circumstances that could not have reasonably been anticipated by the
provider or facility when the good faith estimate was provided.
However, HHS is of the view is that such an approach would not align
with the standard utilized in the Federal IDR processes discussed in
section III of this preamble. This approach would result in adding
undue complexity to the patient-provider dispute resolution process and
the use of a different standard from the Federal IDR process could
potentially lead to confusion for uninsured (or self-pay) individuals,
providers and facilities.
When an SDR entity determines that the provider or facility has
provided credible information that the difference between the billed
charge and the expected charge for the item or service in the good
faith estimate reflects the costs of a medically necessary item or
service and is based on unforeseen circumstances that could not have
reasonably been anticipated by the provider or facility when the good
faith estimate was provided, HHS considered requiring that the SDR
determine that the payment amount be equal to the billed charge, rather
than the lesser of the billed charge or the payment amount for the same
or similar services contained on an independent database (or if
applicable, the good faith estimate). However, HHS is concerned that
such an approach may increase the incentive for providers and
facilities to inflate their billed charges, particularly in cases where
the provider or facility believes they can justify the billed charges.
HHS considered not requiring an SDR entity determination to be
binding upon the parties involved, in the absence of a fraudulent claim
or evidence of misrepresentation of facts presented to the IDR entity
involved. However, HHS was concerned that not having the process be
binding could lead to a provider or facility not abiding by the SDR
entity determination and holding the uninsured (or self-pay) individual
liable for the entire billed charge even if the SDR entity determined
that the uninsured (or self-pay) individual pay a lower amount. HHS is
of the view that without making the determination binding, the consumer
protections established in PHS Act section 2799B-7 would be
significantly diminished and that the cost for administering the
program may outweigh the benefit.
HHS considered various approaches to paying for the costs of the
patient-provider dispute resolution process. HHS considered requiring
the uninsured (or self-pay) individual to pay the patient-provider
dispute resolution costs (e.g., SDR entity costs) in cases where the
individual does not prevail in dispute resolution. However, such an
approach could place a significant burden on the uninsured (or
[[Page 56064]]
self-pay) individuals, especially low-income individuals. Such a
requirement would also not be in alignment with the requirements in PHS
Act section 2799B-7 that the administrative fee be set so as not to
create a burden to participation. HHS also considered requiring the
provider or facility to pay for dispute resolution costs when the
provider or facility does not prevail. However, HHS has concerns that
such an approach would impose a burden on the providers and facilities
and could potentially provide an incentive for the providers and
facilities to increase the prices on uninsured (or self-pay)
individuals to account for potential patient-provider dispute
resolution costs or avoid treating uninsured (or self-pay) individuals
altogether.
HHS considered using an open certification process for SDR entities
rather than contracting with a limited number of SDR entities that meet
the certification requirements outlined in 45 CFR 149.620(d). However,
HHS is of the view that an open certification process would increase
the administrative burden associated with certifying SDR entities and
would not allow for the same level of administrative oversight,
monitoring, and audit potential as opposed to contracting with the SDR
entities directly.
HHS considered not providing a mechanism to defer to a state that
implements a parallel patient-provider dispute resolution process that
meets certain minimum Federal requirements. However, such an approach
would not allow for states to establish processes which meet Federal
minimum standards that are specifically tailored for the state's
residents and providers and facilities in the state. Allowing a state
to establish a process that meets or exceeds the Federal minimum
standards is also consistent with other provisions of the No Surprises
Act such as allowing the application of a state law to determine the
total amount payable to out-of-network providers and facilities.
1.8. Uncertainty
It is unclear what percentage of participants, beneficiaries, and
enrollees experience surprise billing. The frequency of surprise
billing may differ among small and large health issuers.
Furthermore, among individuals who experience surprise billing, the
percentage of claims that would be resolved by the Federal IDR process
is unclear. It is possible that some claims would be resolved through
early settlement before they proceed to the Federal IDR process. It is
also possible that some claims would be determined to be ineligible for
the Federal IDR process. While there is some data from New York
regarding these questions, it is uncertain whether other states' trends
will be similar to New York's or whether New York's experience can be
extrapolated to other states.
Additionally, these interim final rules permit multiple qualified
IDR items and services to be batched in a single payment determination
to encourage efficiency. In order for qualified IDR items or services
to be batched, they must involve the same service code or comparable
code under different procedural systems. Batching by service code will
allow parties to group together qualified IDR items and services that
are medically similar, promoting efficiency by allowing the certified
IDR entity to consider similar qualified IDR items and services, and
more efficiently focus on where the value of the qualified IDR items or
services is consistently materially different from the QPA.
Additionally, the Departments require batching to be done by provider
or group of providers, the same facility, or the same provider of air
ambulance services sharing the same NPI or TIN. By allowing groupings
of providers with the same TIN, this will allow group practices to
batch together qualified IDR items or services. Due to the uncertainty
surrounding how often and how many payment determinations will consider
batched items and services, the Departments acknowledge the high degree
of uncertainty around the estimates of how many disputes will result in
the Federal IDR process each year.
Additionally, it is unclear how these interim final rules will
alter the experiences of everyone involved in the health care system,
beyond the individuals and entities that are involved in the Federal
IDR process. For example, research finds that New York's Out-of-Network
law \228\ reduced surprise billing by 34 percent and lowered in-network
emergency physician payments by 9 percent via shifting the billing
costs to emergency department physicians who bill on an out-of-network
basis.\229\ Research also finds that New York's Out-of-Network law
increased the incentive for physicians providing emergency services to
participate in health plan networks.\230\
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\228\ NY Fin Serv L Sec. 605 (2014).
\229\ Cooper, Z. et al., Surprise! Out-Of-Network Billing for
Emergency Care in the United States, NBER Working Paper 23623, 2017,
available at https://www.nber.org/papers/w23623.
\230\ New York State Department of Financial Services. ``New
York's Surprise Out-Of-Network Protection Law Report on the
Independent Dispute Resolution Process.'' (September 2019). https://www.pacep.net/assets/documents/NYReportontheIDRProcess.pdf.
---------------------------------------------------------------------------
It is unclear to what degree providers and facilities may adjust
their pricing for items and services in order to pay for the
anticipated costs of providing a good faith estimate. It also is
unclear if providers and facilities will provide higher estimates than
the amounts they intend to charge in order to avoid the patient-
provider dispute resolution process, and what impact this practice
might have on an individual's decision to seek necessary care. For
example, some providers and facilities may overestimate the costs for
items or services, up-code to a more expensive service, or add
additional unnecessary services, which could circumvent the intended
consumer protections. These actions could impact whether some patients
defer or delay needed care on the basis of perceived costs or have a
pathway to dispute bills through the patient-provider dispute
resolution process.
Among uninsured (or self-pay) individuals who receive billed
charges that are substantially in excess of the expected charges in the
good faith estimate, it is unclear to what extent such bills will be
resolved using the patient-provider dispute resolution process, or to
what extent such bills will be resolved in other ways such as a
settlement where the provider or facility would offer a lower bill,
discount, or an offer of financial assistance.>
Last, the Departments are uncertain whether the policies adopted in
these interim final rules could ultimately lead to inflation of health
care costs or could result in a reduction in uninsured (or self-pay)
individuals' access to needed care. One study, which examined the
arbitration decisions in New Jersey, where billed charges or usual and
customary rates are taken into consideration in the IDR process, found
that the median payments awarded were 5.7 times higher than the median
in-network rates for the same services. The study concluded that basing
arbitration decisions on provider-billed charges would likely increase
health care costs.\231\ In New York State, state guidance directs
arbiters to consider the 80th percentile of billed charges and the New
York Department of Financial Services has found that arbitration
decisions resulted in, on average, charges 8 percent higher than the
[[Page 56065]]
eightieth percentile of billed charges.\232\ By considering the offer
closest to the QPA and prohibiting certified IDR entities from
considering billed charges, these interim final rules will likely limit
potential inflationary effects even if arbitration leads to payment
determinations that are above the amounts plans and issuers typically
pay to in-network providers.\233\ Thus, these interim final rules may
constrain inflationary effects, but the degree to which they may do so
is uncertain.
---------------------------------------------------------------------------
\231\ Chartock, B.L., Adler, L., Ly, B., Duffy, E., & Trish, E.
(2021). Arbitration over Out-Of-Network Medical Bills: Evidence from
New Jersey Payment Disputes: Study Examines Arbitration Decisions to
Resolve Payment Disputes Between Issuers and Out-Of-Network
Providers in New Jersey. 40 Health Affairs 1, 130-137. https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2020.00217.
\232\ Adler, Loren. ``Experience with New York's Arbitration
Process for Surprise Out-of-Network Bills.'' U.S.C.-Brookings
Schaeffer on Health Policy. (October 2019). https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2019/10/24/experience-with-new-yorks-arbitration-process-for-surprise-out-of-network-bills/.
\233\ Fielder, Matthew, Loren Adler, and Benedic Ippolito.
``Recommendations for Implementing the No Surprises Act.'' U.S.C.-
Brookings Schaeffer on Health Policy. (March 2021). https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2021/03/16/recommendations-for-implementing-the-no-surprises-act/.
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1.9. Conclusion and Summary of Economic Impacts
The Departments are of the view that these interim final rules will
help ensure that consumers are protected from unexpected out-of-network
medical costs by creating a process for plans, issuers, FEHB carriers
and nonparticipating providers, facilities, and providers of air
ambulance services to resolve disputes regarding out-of-network rates.
These interim final rules provide a market-based approach that will
allow these entities to agree upon reasonable payment rates.
The Departments expect a significant reduction in the incidence of
surprise billing, potentially resulting in significant savings for
consumers. There may be a potential transfer from providers,
facilities, and providers of air ambulance services to the participant,
beneficiary, or enrollee if the out-of-network rate collected is lower
than what would have been collected had the provider or facility
balance billed the participant, beneficiary, or enrollee. Overall,
these interim final rules provide a mechanism to effectively resolve
disputes between plans, issuers, and FEHB carriers and providers and
facilities, while protecting patients.
HHS is of the view that the provisions in these interim final rules
will protect uninsured (or self-pay) individuals from surprise medical
costs by allowing them to obtain a good faith estimate of expected
charges from providers and facilities prior to receiving scheduled
items and services and upon request. With this information, uninsured
(or self-pay) individuals may be more likely to consider and compare
costs across providers or facilities prior to or upon scheduling an
item or service to help inform decisions regarding costs for an item or
service. These benefits, however, are predicated on the good faith
estimate being a reasonably predictive and accurate document that can
be understood by patients and their representatives. Additionally,
these interim final rules protect these uninsured (or self-pay)
individuals by allowing an uninsured (or self-pay) individual to seek a
determination through the patient-provider dispute resolution process
if actual billed charges for items or services from a provider or
facility are substantially in excess of the expected charges listed in
the good faith estimate. Moreover, HHS is of the view that uninsured
(or self-pay consumers) will also benefit from being able to take
advantage of the patient-provider dispute resolution process as an
intermediary step in resolving outstanding medical bills, which will
delay providers sending these outstanding bills to collection agencies.
The patient-provider dispute resolution process further protects
uninsured (or self-pay) individuals as the process may result in lower
payments if an SDR entity determines that information submitted by a
provider or facility does not provide credible information that the
billed charge for an item or service reflects the costs of a medically
necessary item or service and is based on unforeseen circumstances that
could not have reasonably been anticipated by the provider or facility
when the good faith estimate was provided, in which case the SDR entity
must determine as the payment amount the expected charge for the item
or service (or in the case of a new item or service, $0) to be paid by
the uninsured (or self-pay) individual to the provider or facility.
The Departments estimate that these interim final rules will impose
incremental costs of approximately $760.95 million in the first year
and $440.67 million in subsequent years. Over 10 years, the associated
costs will be approximately $3.62 billion with an annualized cost of
$517.12 million, using a 7 percent discount rate.\234\
---------------------------------------------------------------------------
\234\ The costs would be $4.19 billion over 10-year period with
an annualized cost of $491.44 million, applying a 3 percent discount
rate.
---------------------------------------------------------------------------
C. Paperwork Reduction Act
Contemporaneously with the publication of these interim final
rules, the Departments are each submitting a request for a new ICR
containing the information collection requirements for the Federal IDR
process, and the patient-provider dispute resolution process for HHS,
created by the No Surprises Act be processed as an Emergency Clearance
Request in accordance with section 5 CFR 1320.13 of the Paperwork
Reduction Act, Emergency Processing. The Departments and OPM have
determined that it would be impracticable and contrary to the public
interest to delay putting the provisions in these interim final rules
in place until after a full public notice and comment process has been
completed. Although this effective date may have allowed for the
regulations, if promulgated with the full notice and comment rulemaking
process, to be applicable in time for the applicability date of the
provisions in the No Surprises Act, this timeframe would not provide
sufficient time for the regulated entities to implement the
requirements. To obtain a copy of the ICR go to https://www.RegInfo.gov.
The Departments will be requesting approval of the emergency review
requests by the effective date of the interim final rules. The
Departments will be seeking approval of the ICRs for 180 days, the
maximum allowed for an ICR approved using an emergency review. As part
of the emergency review request, the Departments will be requesting
that OMB waive the notice requirement set forth in 5 CFR 1320.13(d).
Once the emergency submission is approved, the Departments will
initiate an ICR Revision, the process required under the PRA to seek up
to three (3) years of approval for the information collections. As part
of the process, the Departments and OPM will open a 60-day and 30-day
comment period for each ICR.
The Departments are particularly interested in comments that:
Evaluate whether the collection of information is
necessary for the functions of the Departments, including whether the
information will have practical utility;
Evaluate the accuracy of the Departments' estimate of the
burden of the collection of information, including the validity of the
methodology and assumptions used;
Enhance the quality, utility, and clarity of the
information to be collected; and
Minimize the burden of the collection of information on
those who are to respond, including use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology (for example permitting
electronically delivered responses).
[[Page 56066]]
Comments on these topics may also be submitted to the Departments
during the open comment period for these interim final rules. See the
Addresses section in this rule on where to send comments.
1. Labor Cost Estimates
Table 4--Wage Estimates
----------------------------------------------------------------------------------------------------------------
Hourly total Total hourly
Occupation title Occupational compensation Overhead cost labor costs ($/
code ($/hour) ($/hour) hour)
----------------------------------------------------------------------------------------------------------------
Secretaries and Administrative Assistants, 43-6014 $28.96 $26.27 $55.23
Except Legal, Medical, and Executive...........
Lawyer.......................................... 23-1011 105.28 35.68 140.96
Computer Programmers............................ 15-1251 67.62 46.15 113.77
Medical Secretaries and Administrative 43-6013 27.94 18.13 46.07
Assistants.....................................
Human Resources Specialists..................... 13-1071 49.09 42.74 91.83
Business Operations Specialist.................. 13-1198 59.60 41.72 101.32
General and Operations Manager.................. 11-1021 88.25 34.30 122.55
Compensation and Benefits Manager............... 11-3111 96.97 24.81 121.78
Computer and Information Systems Managers....... 11-3021 113.52 53.38 166.90
Medical and Health Services Manager............. 11-9110 83.39 21.62 105.01
Physician (all other)........................... 29-1228 154.74 14.66 169.40
All occupations................................. 00-0000 39.40 24.92 64.32
----------------------------------------------------------------------------------------------------------------
Group health plans, health insurance issuers, and FEHB carries are
responsible for ensuring compliance with these interim final rules.
Accordingly, in the following ICR sections, the Departments refer to
costs on plans, issuers, and FEHB carriers. However, it is expected
that most self-insured group health plans will work with a TPA to meet
the requirements of these interim rules. The Departments recognize the
potential that some of the largest self-insured plans may seek to meet
the requirements of these interim final rules in house and not use a
TPA or other third party, in such cases those plans will incur the
estimated burden and cost directly.
2. ICRs Regarding IDR Process for Nonparticipating Providers or
Nonparticipating Emergency Facilities (26 CFR 54.9816-8T, 29 CFR
2590.716-8, and 45 CFR 149.510)
As discussed in the Regulatory Impact Analysis, the Departments
estimate that 17,333 claims will be submitted as part of the Federal
IDR process each year.
The Departments estimate that 25 percent of disputes will be
resolved in open negotiation before entering the Federal IDR process.
The Departments request data or comments on this assumption.
Accordingly, the Departments estimate that 23,111 claims will go
through open negotiation.\235\ The Departments estimate that it will
take, on average, a medical and health services manager 2 hours to
write each notice of open negotiation and a clerical worker 15 minutes
to prepare and send the notice. The burden for each plan, issuer, and
FEHB carrier would be 2.25 hours, with an equivalent cost of
approximately $224. As shown in Table 5, for all 23,111 payment
determinations subject to these interim final rules proceeding through
the Federal IDR process, the annual burden would be 51,999 hours, with
an associated equivalent cost of $5.2 million.\236\ The open
negotiation notice must be sent within 30 business days beginning on
the day the provider or facility receives an initial payment or a
notice of denial of payment from the plan or issuer regarding such item
or service. The Departments assume that 5 percent of these notices
would be mailed and will incur a printing cost of $0.05 per page and
$0.55 for postage. Thus, the mailing cost is estimated to be $693.\237\
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\235\ This is calculated 17,333/(1-0.25) = 23,111.
\236\ The burden is estimated as follows: 23,111 claims x 2
hours + 23,111 claims x 0.25 hour = 51,999 hours. A labor rate of
$105.01 is used for a medical and health services manager and a
labor rate of $55.23 is used for a clerical worker. The labor rates
are applied in the following calculation: 23,111 claims x 2 hours x
$105.01 + 23,111 claims x 0.5 hour x $55.23 = $5,172,803. Labor
rates are EBSA estimates.
\237\ This is calculated 23,111 x 0.05 x ($0.05 + $0.55) = $693.
Table 5--Annual Burden and Costs To Prepare and Send the Notice of Open Negotiation Process for Nonparticipating
Providers or Nonparticipating Emergency Facilities Starting in 2022
----------------------------------------------------------------------------------------------------------------
Total annual Total estimated Total estimated
Estimated number of responses burden (hours) labor cost Mailing costs cost
----------------------------------------------------------------------------------------------------------------
23,111...................................... 51,999 $5,172,803 $693 $5,173,496
----------------------------------------------------------------------------------------------------------------
[[Page 56067]]
The Departments estimate that it will take 2 hours for a legal
professional to write the Notice of IDR Initiation and 15 minutes for a
clerical worker to prepare and send the initiating notice. The burden
for each plan, issuer, and FEHB carrier would be 2.25 hours, with an
equivalent cost of approximately $224. As shown in Table 6, for the
17,333 claims initiating the Federal IDR process, the annual burden
would be 38,999 hours, with an annual equivalent cost estimate of $3.9
million.\238\ The initiating party may furnish the Notice of IDR
Initiation to the other party electronically if the initiating party
has a good faith belief that the electronic method is readily
accessible by the other party and the notice is provided in paper form
free of charge upon request; the Departments assume that these notices
5 percent of notices would be mailed and will incur a printing cost of
$0.05 per page and $0.55 for postage. Thus, the mailing cost is
estimated to be $520.\239\
---------------------------------------------------------------------------
\238\ The burden is estimated as follows: 17,333 claims x 2
hours + 17,333 claims x 0.25 hours = 38,999 hours. A labor rate of
$105.01 is used for a medical and health services manager and a
labor rate of $55.23 is used for a clerical worker. The labor rates
are applied in the following calculation: 17,333 claims x 0.25 hours
x $105.01 + 17,333 claims x 2 hours x $55.23 = $3,879,602. Labor
rates are EBSA estimates.
\239\ This is calculated 17,333 x 0.05 x ($0.05 + $0.55) = $520.
Table 6--Annual Burden and Cost To Prepare and Send the Notice of IDR Initiation for Nonparticipating Providers
or Nonparticipating Emergency Facilities Starting in 2022
----------------------------------------------------------------------------------------------------------------
Total annual Total estimated Mailing and Total estimated
Estimated number of responses burden (hours) labor cost printing costs cost
----------------------------------------------------------------------------------------------------------------
17,333...................................... 38,999 $3,879,602 $520 $3,880,122
----------------------------------------------------------------------------------------------------------------
If the parties to the Federal IDR process agree on an out-of-
network rate for a qualified IDR item or service after providing notice
to the Departments of initiation of the Federal IDR process, but before
the certified IDR entity has made its payment determination, the
initiating party must send a notification to the Departments and to the
certified IDR entity (if selected) electronically through the Federal
IDR portal, in a form and manner specified by the Departments, as soon
as possible, but no later than 3 business days after the date of the
agreement. This notification should include the out-of-network rate for
the qualified IDR item or service and signatures from authorized
signatories for both parties. The Departments assume that 1 percent of
IDR payment determinations will be resolved by an agreement on an out-
of-network rate after the Federal IDR process has been initiated. The
Departments request comment on this assumption. The Departments
estimate that it will take, on average, a medical and health services
manager 30 minutes to write each notice of open negotiation and a
clerical worker 15 minutes to submit the notice to the Federal IDR
portal. The burden for each plan, issuer, and FEHB carrier would be 45
minutes, with an equivalent cost of approximately $66. As shown in
Table 7, for the 173 payment determinations resolved in this manner,
the annual burden would be 130 hours, with an associated equivalent
cost of $11,472.\240\
---------------------------------------------------------------------------
\240\ The burden is estimated as follows: 17,300 claims x 1
percent x 0.5 hours + 17,300 claims x 1 percent x 0.25 hours = 130
hours. A labor rate of $105.01 is used for a medical and health
services manager and a labor rate of $55.23 is used for a clerical
worker. The labor rates are applied in the following calculation:
17,300 claims x 1 percent x 0.5 hours x $105.01 + 17,300 claims x 1
percent x 0.25 hours x $55.23 = $11,472. Labor rates are EBSA
estimates.
Table 7--Annual Burden and Cost To Prepare and Send the Notice of Agreement on an Out-of-Network Rate Starting
in 2022
----------------------------------------------------------------------------------------------------------------
Total annual Total estimated Mailing and Total estimated
Estimated number of responses burden (hours) labor cost printing costs cost
----------------------------------------------------------------------------------------------------------------
173......................................... 130 $11,472 $0 $11,472
----------------------------------------------------------------------------------------------------------------
If the plan, issuer, or FEHB carrier and the nonparticipating
provider or nonparticipating emergency facility select a certified IDR
entity, or if they fail to select a certified IDR entity, they must
notify the Departments of their selection no later than 1 business day
after such selection or failure to select. To the extent the non-
initiating party does not believe that the Federal IDR process applies,
the non-initiating party must also provide information that
demonstrates the lack of applicability by the same date that the notice
of selection or failure to select must be submitted.
The Departments estimate that in 75 percent of IDR payment
determinations, a certified IDR entity will be selected by the
disputing parties. The Departments request comments on this assumption.
Additionally, the Departments assume that it will take 1 hour for a
legal professional to write the notice and 15 minutes for a clerical
worker to prepare and send the notice. The burden for each plan,
issuer, and FEHB carrier would be 1.25 hours, with an equivalent cost
of approximately $119. As shown in Table 8, for the 13,000 claims that
will have a certified IDR entity selected by the disputing parties, the
annual burden would be 16,250 hours, with an annual equivalent cost
estimate of $1.5 million.\241\ The Departments assume that 5 percent of
notices would be mailed and will incur a printing cost of $0.05 per
page and $0.55 for postage. Thus, the mailing cost is estimated to be
$390.\242\
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\241\ The burden is estimated as follows: (13,000 claims x 75
percent x 1 hour) + (13,000 claims x 75 percent x 0.25 hours) =
16,250 hours. A labor rate of $105.01 is used for a medical and
health services manager and a labor rate of $55.23 is used for a
clerical worker. The labor rates are applied in the following
calculation: (13,000 claims x 75 percent x 0.25 hours x $105.01)
+13,000 claims x 75 percent x 1 hours x $55.23) = $1,544,628. Labor
rates are EBSA estimates.
\242\ This is calculated 13,000 x 0.05 x ($0.05 + $0.55) = $390.
[[Page 56068]]
Table 8--Annual Burden and Cost To Select a Certified IDR Entity and Notify the Departments of Selection for
Nonparticipating Providers or Nonparticipating Emergency Facilities Starting in 2022
----------------------------------------------------------------------------------------------------------------
Total annual Total estimated Mailing and Total estimated
Estimated number of responses burden (hours) labor cost printing costs cost
----------------------------------------------------------------------------------------------------------------
13,000...................................... 16,250 $1,544,628 $390 $1,545,018
----------------------------------------------------------------------------------------------------------------
If the plan, issuer, or FEHB carrier and the nonparticipating
provider or nonparticipating emergency facility fail to select a
certified IDR entity, the Departments will select a certified IDR
entity that charges a fee within the allowed range of IDR entity costs
(or has received approval from the Departments to charge a fee outside
of the allowed range) through a random selection method. The
Departments estimate that in 25 percent of IDR payment determinations,
a certified IDR entity will not be selected by the parties.
Additionally, no later than 10 business days after the date of
selection of the certified IDR entity with respect to a payment
determination for a qualified IDR item or service, the provider or
facility and the plan or issuer must submit to the certified IDR entity
an offer for a payment amount for the qualified IDR item or service
furnished by such provider or facility though the Federal IDR portal.
The Departments estimate for providers and issuers, it will take an
average of 2.5 hours for a medical and health services manager to write
the offer and 30 minutes for a clerical worker to prepare and send the
offer. The burden for each plan, issuer, and FEHB carrier would be 3
hours, with an equivalent cost of approximately $290. As shown in Table
9, for the 17,333 payment determinations that will go through
submission of offer, the annual burden would be 103,998 hours, with an
annual equivalent cost estimate of $10.1 million.\243\ The Departments
assume that 5 percent of notices would be mailed and will incur a
printing cost of $0.05 per page and $0.55 for postage. Thus, the
mailing cost is estimated to be $1,040.\244\
---------------------------------------------------------------------------
\243\ The burden is estimated as follows: (17,333 claims x 2.5
hours + 17,333 claims x 0.5 hours) + (17,333 claims x 2.5 hours +
17,333 claims x 0.5 hours) = 103,998 hours for providers and
issuers. A labor rate of $105.01 is used for a medical and health
services manager and a labor rate of $55.23 is used for a clerical
worker. The labor rates are applied in the following calculation:
(17,333 claims x 2.5 hours x $105.01 + 17,333 claims x 0.5 hours x
$55.23) + (17,333 claims x 2.5 hours x $105.01 + 17,333 claims x 0.5
hours x $55.23) = $10,057,993. Labor rates are EBSA estimates.
\244\ This is calculated (17,333 x 0.05 x ($0.05 + $0.55) +
(17,333 x 0.05 x ($0.05 + $0.55) = $1,040.
Table 9--Annual Burden and Cost To Prepare and Submit Offer for Nonparticipating Providers or Nonparticipating
Emergency Facilities Starting in 2022
----------------------------------------------------------------------------------------------------------------
Total annual Total estimated Mailing and Total estimated
Estimated number of responses burden (hours) labor cost printing costs cost
----------------------------------------------------------------------------------------------------------------
17,333...................................... 103,998 $10,057,993 $1,040 $10,059,033
----------------------------------------------------------------------------------------------------------------
After the selected certified IDR entity has reviewed the offer, the
certified IDR entity must notify the provider or facility and the plan,
issuer, or FEHB carrier of the payment determination and the reason for
such determination, in a form and manner specified by the
Departments.\245\ The cost of preparing and delivering this notice is
assumed to be included in the certified IDR entity fee paid by the plan
or issuer, or provider or facility, to conduct the review.\246\
---------------------------------------------------------------------------
\245\ IDR Payment Determination Notification (ERISA
716(c)(5)(A)).
\246\ Under Section 103 of the No Surprises Act, the party whose
offer was not chosen by the certified IDR entity is responsible for
paying the IDR entity's fee.
---------------------------------------------------------------------------
If the certified IDR entity does not choose the offer closest to
the QPA, the certified IDR entity's written decision must include an
explanation of the credible information that the certified IDR entity
determined demonstrated that the QPA was materially different from the
appropriate out-of-network rate, based on the permitted considerations,
with respect to the qualified IDR item or service. The cost of
preparing and delivering this written decision is included in the
certified IDR entity fee paid by the provider, facility, plan, issuer,
or FEHB carrier. When determining the out-of-network rate, the
certified IDR entity must consider the QPA and must consider the other
statutory factors when a party presents credible information relating
to those factors clearly demonstrating the QPA is materially different
from the appropriate out-of-network rate, or where the offers are
equally distant from the QPA but in opposing directions.
Additionally, the selected certified IDR entity must provide the
payment determination and the reasons for such to the Departments. The
Departments also assume that the cost of preparing and delivering this
written decision is included in the certified IDR entity fee paid by
the provider, facility, plan, issuer, or FEHB carrier.
After a final determination, the certified IDR entity must maintain
records of all claims and notices associated with the Federal IDR
process for 6 years. The certified IDR entity must store the documents
in a manner necessary to meet the requirements of these interim final
rules. The certified IDR entities must make such records available for
examination by the plan, issuer, FEHB carrier, provider, facility, or
state or Federal oversight agency upon request, except where such
disclosure would violate state or Federal privacy laws. The Departments
assume it will take 30 minutes for a clerical worker to establish the
records for each IDR payment determinations. The burden for each
certified IDR entity would be 30 minutes, with an equivalent cost of
approximately $28. As shown in Table 10, for the maintenance and
recordkeeping of 17,333 claims, the annual burden would be 8,667 hours,
with an annual
[[Page 56069]]
equivalent cost burden estimate of $0.5 million.\247\
---------------------------------------------------------------------------
\247\ The burden is estimated as follows: (17,333 claims x 30
minutes) = 8,667 hours for providers and issuers. A labor rate of
$55.23 is used for a clerical worker. The labor rates are applied in
the following calculation: (17,333 claims x 30 minutes x $55.23) =
$478,651. Labor rates are EBSA estimates.
Table 10--Annual Burden and Cost for the Certified IDR Entity To Maintain Records for Nonparticipating Providers
or Nonparticipating Emergency Facilities Starting in 2022
----------------------------------------------------------------------------------------------------------------
Total annual Total estimated Total estimated
Estimated number of responses burden (hours) labor cost Other costs cost
----------------------------------------------------------------------------------------------------------------
17,333...................................... 0 $0 $478,651 $478,651
----------------------------------------------------------------------------------------------------------------
Summary
The total hour burden associated with the Federal IDR process for
hospital and emergency department claims is 211,376 hours with an
equivalent cost of $20,666,498. The total cost associated with the
Federal IDR process for hospital and emergency claims is $481,294.
Half of the burden associated with the Federal IDR process for
hospital and emergency departments is estimated to be allocated to
health care plans, issuers, and FEHB carriers, and the other half is
estimated be allocated to health care providers and facilities. As
shown in Tables 11 through 13, HHS, DOL, the Department of the
Treasury, and OPM share jurisdiction, HHS will account for 45 percent
of the burden, or approximately, 95,119 hours at an equivalent cost of
$9,299,924 and a cost burden of $216,582. DOL and the Department of the
Treasury will each account for 25 percent of the burden, or
approximately 52,844 hours at an equivalent cost of $5,166,624 and a
cost burden of $120,324. OPM will account for 5 percent of the burden
or approximately 10,569 hours at an equivalent cost of $1,033,325 and a
cost burden of $24,065.
Table 11--HHS Summary Annual Cost and Burden of IDR Process for Nonparticipating Providers or Nonparticipating Emergency Facilities Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total annual Total estimated Mailing and Total estimated
Estimated number of responses burden (hours) labor cost printing cost Other costs cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
49,477............................................................. 95,119 $9,299,924 $1,189 $215,393 $9,516,506
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 12--DOL and Department of the Treasury's Summary Annual Cost and Burden of IDR Process for Nonparticipating Providers or Nonparticipating
Emergency Facilities Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total annual Total estimated Mailing and Total estimated
Estimated number of responses burden (hours) labor cost printing cost Other costs cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
27,487............................................................. 52,844 $5,166,624 $661 $119,663 $5,286,948
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 13--OPM's Summary Annual Cost and Burden of IDR Process for Nonparticipating Providers or Nonparticipating Emergency Facilities Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total annual Total estimated Mailing and Total estimated
Estimated number of responses burden (hours) labor cost printing cost Other costs cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
5,497.............................................................. 10,569 $1,033,325 $132 $23,933 $1,057,390
--------------------------------------------------------------------------------------------------------------------------------------------------------
3. ICRs Regarding Federal IDR Process for Air Ambulance (26 CFR
54.9817-2T, 29 CFR 2590.717-2, and 45 CFR 149.520)
According to the March 2019 Health Insurance Coverage Bulletin, in
2018, 213.2 million individuals had private health insurance.\248\ In
2017, HCCI estimated that, on average, there were 33.3 air ambulance
uses per 100,000 people,\249\ and the GAO estimated that approximately
69 percent of air transports resulted in an out-of-network bill.\250\
The Departments do not have data on what percent of out-of-network
bills will proceed to the Federal IDR process; however, given the
nature of air ambulance services, the Departments assume that the
percentage will be substantially higher than for hospital or emergency
department claims. The Departments assume that 10 percent of out-of-
network claims for air transport will end up in the Federal IDR
process.
---------------------------------------------------------------------------
\248\ Employee Benefits Security Administration. ``Health
Insurance Coverage Bulletin.'' (March 2019). https://www.dol.gov/sites/dolgov/files/EBSA/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2019.pdf.
\249\ Hargraves, John and Aaron Bloschichak. ``Air Ambulances-
10-Year Trends in Costs and Use.'' Health Care Cost Institute.
(2019). https://healthcostinstitute.org/emergency-room/air-ambulances-10-year-trends-in-costs-and-use.
\250\ Government Accountability Office. ``Air Ambulance:
Available Data Show Privately-Insured Patients are at Financial
Risk.'' (2019). https://www.gao.gov/assets/gao-19-292.pdf.
---------------------------------------------------------------------------
Accordingly, the government estimates there will be 4,899 air
[[Page 56070]]
ambulance service claims submitted to the Federal IDR process each
year.\251\
---------------------------------------------------------------------------
\251\ The Departments estimate that of the 213.2 million
individuals with employer-sponsored health insurance, there are 33.3
air transports per 100,000 individuals, of which 69 percent result
in an out-of-network bill. The Departments assume that 10 percent of
the out-of-network bills will end up in IDR. (213,200,000 x 0.000333
x 0.69 x 0.1= 4,899).
---------------------------------------------------------------------------
In these interim final rules, air ambulance services are subject to
the same requirements for hospital and emergency services in 26 CFR
54.9816-8T, 29 CFR 2590.716-8, and 45 CFR 149.510 (as applicable),
except that the items and services for which the requirements of (b)(1)
of that section apply shall be understood to be out-of-network air
ambulance services, and ``qualified IDR items and services'' are
understood to be air ambulance services.
The Departments estimate that 4,899 air transport disputes will be
handled by the Federal IDR process each year, but the Departments
estimate that 25 percent of disputes will be resolved in open
negotiation before entering the Federal IDR process. Accordingly, the
Departments estimate that 6,532 transport payment determinations will
enter into open negotiation.\252\ The Departments estimate that it will
take an average of 2 hours for a medical and health services manager to
write each notice of open negotiation and 15 minutes for a clerical
worker to prepare and send the notice. The burden for each plan,
issuer, and FEHB carrier would be 2.25 hours, with an equivalent cost
of approximately $224. As shown in Table 14, for the 6,532 payment
determinations that will enter into open negotiation, the annual burden
would be 14,696 hours, with an annual equivalent cost estimate of $1.5
million.\253\ The open negotiation notice must be sent within 30
business days beginning on the day the provider of air ambulance
services receives an initial payment or a notice of denial of payment
from the plan, issuer, or FEHB carrier regarding such item or service.
The Departments assume that 5 percent of notices would be mailed and
will incur a printing cost of $0.05 per page and $0.55 for postage.
Thus, the mailing cost is estimated to be $196.\254\
---------------------------------------------------------------------------
\252\ This is calculated as 4,899/(1-0.25) = 6,532.
\253\ The burden is estimated as follows: 6,532 claims x 2 hours
+ 6,532 claims x 0.25 hours = 14,696 hours. A labor rate of $105.01
is used for a medical and health services manager and a labor rate
of $55.23 is used for a clerical worker. The labor rates are applied
in the following calculation: 6,532 claims x 0.25 hours x $105.01 +
6,532 claims x 2 hours x $55.23 = $1,461,951. Labor rates are EBSA
estimates.
\254\ This is calculated 6,532 x 0.05 x ($0.05 + $0.55) = $196.
Table 14--Annual Burden and Costs To Prepare and Send the Notice of Open Negotiation Period for Providers of Air
Ambulance Services Starting in 2022
----------------------------------------------------------------------------------------------------------------
Total annual Total estimated Mailing and Total estimated
Estimated number of responses burden (hours) labor cost printing cost cost
----------------------------------------------------------------------------------------------------------------
6,532....................................... 14,696 $1,461,951 $196 $1,462,147
----------------------------------------------------------------------------------------------------------------
For the estimated 4,899 payment determinations that are submitted
to the Federal IDR process, the Departments estimate that it will take
2 hours for a legal professional to write the Notice of IDR Initiation
and 15 minutes for a clerical worker to prepare and send the initiating
notice. The burden for each plan, issuer, and FEHB carrier would be
2.25 hours, with an equivalent cost of approximately $224. As shown in
Table 15, for the 4,899 payment determinations that will have selected
a certified IDR entity, the annual burden would be 11,022 hours, with
an annual equivalent cost estimate of $1.1 million.\255\ The initiating
party may furnish the Notice of IDR Initiation to the other party
electronically if the initiating party has a good faith belief that the
electronic method is readily accessible by the other party and the
notice is provided in paper form free of charge upon request. The
Departments assume that 5 percent of notices would be mailed and will
incur a printing cost of $0.05 per page and $0.55 for postage. Thus,
the mailing cost is estimated to be $147.\256\
---------------------------------------------------------------------------
\255\ The burden is estimated as follows: 4,899 claims x 2 hours
+ 4,899 claims x 0.25 hours = 11,022 hours. A labor rate of $105.01
is used for a medical and health services manager and a labor rate
of $55.23 is used for a clerical worker. The labor rates are applied
in the following calculation: 4,899 claims x 0.25 hours x $105.01 +
4,899 claims x 2 hours x $55.23 = $1,096,463. Labor rates are EBSA
estimates.
\256\ This is calculated 4,899 x 0.05 x ($0.05 + $0.55) = $147.
Table 15--Annual Burden and Cost To Prepare and Send the Notice of IDR Initiation for Providers of Air Ambulance
Services Starting in 2022
----------------------------------------------------------------------------------------------------------------
Total annual Total estimated Mailing and Total estimated
Estimated number of responses burden (hours) labor cost printing cost cost
----------------------------------------------------------------------------------------------------------------
4,899....................................... 11,022 $1,096,463 $147 $1,096,610
----------------------------------------------------------------------------------------------------------------
If the parties to the Federal IDR process agree on an out-of-
network rate for a qualified IDR item or service after providing a
Notice of IDR Initiation to the Departments, but before the certified
IDR entity has made its payment determination, the initiating party
must send a notification to the Departments and to the certified IDR
entity (if selected) electronically through the Federal IDR portal, in
a form and manner specified by the Departments, as soon as possible,
but no later than 3 business days after the date of the agreement. This
notification should include the out-of-network rate for the qualified
IDR item or service and signatures from authorized signatories for both
parties. The Departments assume that 1 percent of payment
determinations will be resolved by an agreement on an out-of-network
rate after the Federal IDR process has been initiated. The Departments
request comment on this assumption. The Departments estimate that it
will take, on average, a medical and health services manager 30 minutes
to write each notice of open negotiation and a clerical worker 15
minutes to submit the
[[Page 56071]]
notice to the Federal IDR portal. The burden for each plan, issuer, and
FEHB carrier would be 45 minutes, with an equivalent cost of
approximately $66. As shown in Table 16, for the 49 payment
determinations resolved in this manner, the annual burden would be 37
hours, with an associated equivalent cost of $3,249.\257\
---------------------------------------------------------------------------
\257\ The burden is estimated as follows: 4,899 claims x 1
percent x 0.5 hours + 4,899 claims x 1 percent x 0.25 hours = 37
hours. A labor rate of $105.01 is used for a medical and health
services manager and a labor rate of $55.23 is used for a clerical
worker. The labor rates are applied in the following calculation:
4,899 claims x 1 percent x 0.5 hours x $105.01 + 4,899 claims x 1
percent x 0.25 hours x $55.23 = $3,249. Labor rates are EBSA
estimates.
Table 16--Annual Burden and Cost To Prepare and Send the Notice of Agreement on an Out-of-Network Rate Starting
in 2022
----------------------------------------------------------------------------------------------------------------
Total annual Total estimated Mailing and Total estimated
Estimated number of responses burden (hours) labor cost printing cost cost
----------------------------------------------------------------------------------------------------------------
49.......................................... 37 $3,249 $0 $3,249
----------------------------------------------------------------------------------------------------------------
If the plan, issuer, or FEHB carrier and the nonparticipating
provider of air ambulance services select or fail to select a certified
IDR entity, they must notify the Departments of their selection or
failure to select a certified IDR entity no later than 1 day after such
selection or failure. The Departments estimate that in 75 percent of
payment determinations, a certified IDR entity will be selected. The
Departments request comment on this assumption. Additionally, the
Departments assume that it will take one hour for a legal professional
to write the notice and 15 minutes for a clerical worker to prepare and
send the notice. The burden for each plan, issuer, and FEHB carrier
would be 1.25 hours, with an equivalent cost of approximately $119. Due
to the tight turnaround, the Departments assume this notice will be
sent electronically through the Federal IDR portal. As shown in Table
17, for the 3,674 payment determinations that will have a selected a
certified IDR entity, the annual burden would be 4,593 hours, with an
annual equivalent cost estimate of $0.4 million.\258\ The Departments
assume that 5 percent of notices would be mailed and will incur a
printing cost of $0.05 per page and $0.55 for postage. Thus, the
mailing cost is estimated to be $110.\259\
---------------------------------------------------------------------------
\258\ The burden is estimated as follows: (4,899 claims x 75
percent x 1 hour) + (4,899 claims x 75 percent x 0.25 hours) = 4,593
hours. A labor rate of $105.01 is used for a medical and health
services manager and a labor rate of $55.23 is used for a clerical
worker. The labor rates are applied in the following calculation:
(4,899 claims x 75 percent x 0.25 hours x $105.01) + (4,899 claims x
75 percent x 1 hours x $55.23) = $436,535. Labor rates are EBSA
estimates.
\259\ This is calculated 3,674 x 0.05 x ($0.05 + $0.55) = $110.
Table 17--Annual Burden and Cost To Select Certified IDR Entity and Notify the Departments of Selection for
Providers of Air Ambulance Services Starting in 2022
----------------------------------------------------------------------------------------------------------------
Total annual Total estimated Mailing and Total estimated
Estimated number of responses burden (hours) labor cost printing cost cost
----------------------------------------------------------------------------------------------------------------
3,674....................................... 4,593 $436,535 $110 $436,646
----------------------------------------------------------------------------------------------------------------
If the plan, issuer, or FEHB carrier and the nonparticipating
provider of air ambulance services fail to select a certified IDR
entity, the Departments will select a certified IDR entity that charges
a fee within the allowed range of certified IDR entity costs (or has
received approval from the Departments to charge a fee outside of the
allowed range if there are an insufficient number of certified IDR
entities) through a random selection method. The range of certified IDR
entity fees and the administrative fee paid to the Departments by the
plan, issuer, or FEHB carrier and the provider of air ambulance
services will be addressed in later guidance by the Departments. The
Departments estimate that in 25 percent of IDR payment determinations,
a certified IDR entity will not be selected by the parties.
Additionally, no later than 10 business days after the date of
selection of the certified IDR entity with respect to a determination
for a qualified IDR item or service, the provider of air ambulance
services, plan, issuer, or FEHB carrier must submit to the certified
IDR entity: (1) An offer for a payment amount for the qualified IDR
item or service furnished by the provider of air ambulance services,
expressed both as a dollar amount and as a percentage of the QPA; and
(2) information as requested by the certified IDR entity relating to
the offer. With the information requested by the certified IDR entity,
the parties must include: (A) The coverage area of the plan, issuer, or
FEHB carrier; the relevant geographic region for purposes of the QPA;
(B) whether the coverage is fully-insured or fully or partially self-
insured), if applicable; and (C) the QPA. The parties may also submit
to the certified IDR entity any information relating to the offer
submitted by either party, except that the information may not include
information on factors described in paragraph 26 CFR 54.9816-
8T(c)(4)(v), 29 CFR 2590.716-8(c)(4)(v), and 45 CFR 149.510(c)(4)(v).
The Departments estimate for providers of air ambulance services,
issuers, plans, and FEHB carriers, it will take an average of 2 hours
for a medical and health services manager to write the offer and 15
minutes for a clerical worker to prepare and send the offer. The burden
for each plan, issuer, and FEHB carrier would be 2.25 hours, with an
equivalent cost of approximately $224. As shown in Table 18, for the
4,899 claims that will go through submission of offers, the annual
burden would be 22,044 hours, with an annual equivalent cost estimate
of $2.2 million.\260\ The Departments assume
[[Page 56072]]
that 5 percent of notices would be mailed and will incur a printing
cost of $0.05 per page and $0.55 for postage. Thus, the mailing cost is
estimated to be $294.\261\
---------------------------------------------------------------------------
\260\ The burden is estimated as follows: (4,899 claims x 2
hours + 4,899 claims x 0.25 hours) + (4,899 claims x 2 hours + 4,899
claims x 0.25 hours) = 22,044 hours for providers and issuers. A
labor rate of $105.01 is used for a medical and health services
manager and a labor rate of $55.23 is used for a clerical worker.
The labor rates are applied in the following calculation: (4,899
claims x 2 hours x $105.01 + 4,899 claims x 0.25 hours x $55.23) +
(4,899 claims x 2 hours x $105.01 + 4,899 claims x 0.25 hours x
$105.01) = $2,192,926. Labor rates are EBSA estimates.
\261\ This is calculated (4,899 x 0.05 x ($0.05 + $0.55)) +
(4,899 x 0.05 x ($0.05 + $0.55)) = $294.
Table 18--Annual Burden and Cost To Prepare and Submit Offer for Providers of Air Ambulance Services Starting in
2022
----------------------------------------------------------------------------------------------------------------
Total annual Total estimated Mailing and Total estimated
Estimated number of responses burden (hours) labor cost printing cost cost
----------------------------------------------------------------------------------------------------------------
4,899....................................... 22,044 $2,192,926 $294 $2,193,220
----------------------------------------------------------------------------------------------------------------
After the certified IDR entity has reviewed the offer, the
certified IDR entity must notify the provider of air ambulance services
and the plan, issuer, or FEHB carrier of the payment
determination.\262\ The cost of preparing and delivering this notice is
included in the $25 administrative fee paid by the provider of air
ambulance services, plan, issuer, or FEHB carrier to conduct the
review.
---------------------------------------------------------------------------
\262\ IDR Payment Determination Notification (ERISA
716(c)(5)(A)).
---------------------------------------------------------------------------
Certified IDR entities also need to notify the provider of air
ambulance services and the plan, issuer, or FEHB carrier of the payment
determination and the written decision explaining such determination.
If the certified IDR entity does not choose the offer closest to the
QPA, the certified IDR entity's written decision must include an
explanation of the credible information that the certified IDR entity
determined demonstrated that the QPA amount was materially different
from the appropriate out-of-network rate, based on the required
considerations, with respect to the qualified IDR item or service.
Additionally, the certified IDR entity must provide the payment
determination and the reasons for such determination to the
Departments. The Departments also assume that the cost of preparing and
delivering this written decision is included in the certified IDR
entity fee paid by the provider of air ambulance services, plan,
issuer, or FEHB carrier.
After a final determination, the certified IDR entity must maintain
records of all claims and notices associated with the Federal IDR
process for 6 years. The certified IDR entity must make such records
available for examination by the plan, issuer, FEHB carrier, provider
of air ambulance services, or state or Federal oversight agency upon
request, except where such disclosure would violate state or Federal
privacy laws. The Departments assume it will take 30 minutes for a
clerical worker to establish the records for each determination under
the Federal IDR process necessary to meet the requirements. The cost
burden for each certified IDR entity would be 30 minutes, with an
equivalent cost of approximately $28. As shown in Table 19, for the
maintenance and recordkeeping of 4,899 claims, the annual burden would
be 2,449 hours, with an estimated annual equivalent cost burden of $0.1
million.\263\
---------------------------------------------------------------------------
\263\ The burden is estimated as follows: (4,899 claims x 30
minutes) = 2,449 hours for providers and issuers. A labor rate of
$55.23 is used for a clerical worker. The labor rates are applied in
the following calculation: (4,899 claims x 30 minutes x $55.23) =
$135,278. Labor rates are EBSA estimates.
Table 19--Annual Burden and Cost for the Certified IDR Entity To Maintain Records for Providers of Air Ambulance
Services Starting in 2022
----------------------------------------------------------------------------------------------------------------
Total annual Total estimated Total estimated
Estimated number of responses burden (hours) labor cost Other costs cost
----------------------------------------------------------------------------------------------------------------
4,899....................................... 2,499 $0 $135,278 $135,278
----------------------------------------------------------------------------------------------------------------
Summary
The total hour burden associated with the Federal IDR process for
air ambulance services is 52,392 hours with an equivalent cost of
$5,191,124. The total cost burden associated with the Federal IDR
process for air ambulance services is $136,025. Half of the burden
associated with the Federal IDR process for air ambulance services is
estimated to be allocated to health plans, issuers, or TPAs, and the
other half is estimated be allocated to health care providers. The
burden associated with the Federal IDR process for air ambulance
services is assumed to be shared by the Departments and OPM. HHS is
assumed to cover 45 percent of the burden, while DOL and the Department
of the Treasury will each cover 25 percent of the burden and OPM will
cover 5 percent of the burden. As shown in Table 20, the hour burden
associated with HHS requirements is estimated to be approximately
23,576 hours at an equivalent cost of $2,336,006. The total cost burden
associated with HHS requirement is estimated to be $61,211. As shown in
Table 21, the hour burden associated with DOL and the Department of the
Treasury requirements is estimated to be approximately 13,089 hours at
an equivalent cost of $1,297,781 each. The total cost burden associated
with DOL and the Department of the Treasury requirement is estimated to
be $34,006. As shown in Table 22, the hour burden associated with OPM
requirements is estimated to be approximately 2,620 hours at an
equivalent cost of $259,556 each. The total cost burden associated with
OPM requirement is estimated to be $6,801.
[[Page 56073]]
Table 20--HHS Summary Cost and Burden of Federal IDR Process for Providers of Air Ambulance Services Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total annual Total estimated Mailing and Total estimated
Estimated number of responses burden (hours) labor cost printing cost Other costs cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
16,188............................................................. 23,576 $2,336,006 $336 $60,875 $2,397,217
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 21--DOL and Department of the Treasury's Summary Cost and Burden of Federal IDR Process for Providers of Air Ambulance Services Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total annual Total estimated Mailing and Total estimated
Estimated number of responses burden (hours) labor cost printing cost Other costs cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
8,993.............................................................. 13,098 $1,297,781 $187 $33,819 $1,331,787
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 22--OPM's Summary Cost and Burden of Federal IDR Process for Providers of Air Ambulance Services Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total annual Total estimated Mailing and Total estimated
Estimated number of responses burden (hours) labor cost printing cost Other costs cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
450................................................................ 2,620 $259,556 $37 $6,734 $266,357
--------------------------------------------------------------------------------------------------------------------------------------------------------
3. ICRs Regarding the Request of Extension of Time Periods for
Extenuating Circumstances (26 CFR 54.9816-8T, 29 CFR 2590.716-8, and 45
CFR 149.510)
The Departments do not have data on how often entities will request
an extension; however, the Departments are of the view that extenuating
circumstances will be rare. The Departments assume that 100 plans,
issuers, FEHB carriers, health care and air ambulance service
providers, or facilities will annually request an extension starting in
2022 by completing the ``Request for Extension due to Extenuating
Circumstances'' form and attesting that prompt action will be taken to
ensure the payment determination under this section is made as soon as
administratively practical. The Departments request comment on how many
entities are likely to make such a request. The Departments estimate
that it will take a clerical worker 15 minutes to prepare and send the
notice. As shown in Table 23, the annual burden would be 25 hours, with
an associated equivalent cost of $1,381.\264\ The Departments expect
these requests to be submitted through the Federal IDR portal, and
therefore have not estimated an associated mailing cost.
---------------------------------------------------------------------------
\264\ The burden is estimated as follows: 100 requests x 0.25
hour = 25 hours. A labor rate of $55.23 is used for a clerical
worker. The labor rates are applied in the following calculation:
100 requests x 0.25 hours x $55.23 = $1,381. Labor rates are EBSA
estimates.
Table 23--Annual Burden and Costs To Request an Extension of Times Periods for Extenuating Circumstances
Starting in 2022
----------------------------------------------------------------------------------------------------------------
Total annual Total estimated Total estimated
Estimated number of responses burden (hours) labor cost Mailing cost cost
----------------------------------------------------------------------------------------------------------------
100......................................... 25 $1,381 $0 $1,381
----------------------------------------------------------------------------------------------------------------
Summary
The total hour burden associated with requests for extension is 25
hours with an equivalent cost of $1,381. Half of the burden is
estimated to be allocated to health plans, issuers, or TPAs, and the
other half is estimated be allocated to health care providers. The
burden is assumed to be shared by the Departments and OPM. HHS is
assumed to cover 45 percent of the burden, while DOL and the Department
of the Treasury will each cover 25 percent of the burden and OPM will
cover 5 percent of the burden. As shown in Table 24, the hour burden
associated with HHS requirements is estimated to be approximately 11
hours at an equivalent cost of $621. As shown in Table 25, the hour
burden associated with DOL and the Department of the Treasury
requirements is estimated to be approximately 6 hours at an equivalent
cost of $345 each. As shown in Table 26, the hour burden associated
with OPM requirements is estimated to be approximately 1 hour at an
equivalent cost of $69.
[[Page 56074]]
Table 24--HHS's Annual Burden and Costs Request an Extension of Times Periods for Extenuating Circumstances
Starting in 2022
----------------------------------------------------------------------------------------------------------------
Total annual Total estimated Total estimated
Estimated number of responses burden (hours) labor cost Mailing cost cost
----------------------------------------------------------------------------------------------------------------
45.......................................... 11 $621 $0 $621
----------------------------------------------------------------------------------------------------------------
Table 25--DOL and Department of the Treasury's Annual Burden and Costs To Request an Extension of Times Periods
for Extenuating Circumstances Starting in 2022
----------------------------------------------------------------------------------------------------------------
Total annual Total estimated Total estimated
Estimated number of responses burden (hours) labor cost Mailing cost cost
----------------------------------------------------------------------------------------------------------------
25.......................................... 6 $345 $0 $345
----------------------------------------------------------------------------------------------------------------
Table 26--OPM's Annual Burden and Costs To Request an Extension of Times Periods for Extenuating Circumstances
Starting in 2022
----------------------------------------------------------------------------------------------------------------
Total annual Total estimated Total estimated
Estimated number of responses burden (hours) labor cost Mailing cost cost
----------------------------------------------------------------------------------------------------------------
5........................................... 1.25 $69 $0 $69
----------------------------------------------------------------------------------------------------------------
5. ICRs Regarding IDR Entity Certification and IDR Entity Monthly
Reporting (26 CFR 54.9816-8T, 29 CFR 2590.716-8, and 45 CFR 149.510)
An IDR entity must be certified under standards and procedures set
forth in guidance promulgated by the Departments. The Departments
estimate that there will be 50 entities that seek IDR certification.
To be certified as a certified IDR entity, the entity will need to
submit an application through the Federal IDR portal, demonstrating
that it meets the requirements described in these interim final rules.
An IDR entity must provide written documentation to the Departments
regarding general company information (such as contact information,
TIN, and website), as well as the applicable service area in which the
IDR entity intends to conduct payment determinations under the Federal
IDR process. The IDR entity must have (directly or through contracts or
other arrangements) sufficient arbitration and claims administration,
managed care, billing and coding, medical, legal, and other expertise,
and sufficient staffing. The IDR entity must also establish processes
to ensure against conflicts of interest, including to attesting that
such conflicts do not exist, as defined under these interim final
rules. The IDR entity will also need to demonstrate its financial
stability and integrity. The corresponding paperwork (including 3 years
of financial statements) will be submitted through the Federal IDR
portal. Finally, each IDR entity that the Departments certify must
enter into an agreement with the Departments. That agreement will
include specified provisions encompassed by these interim final rules,
including, but not limited to, the requirements applicable to certified
IDR entities when making payment determinations as well as the
requirements for certification and revocation (such as specifications
for wind down activities and reallocation of certified IDR entity fees,
where warranted).
The Departments estimate that on average it will take a medical and
health services manager 5.10 hours and a clerical worker 15 minutes to
satisfy the requirement. The burden for each IDR entity would be 5.35
hours, with an equivalent cost of approximately $548. As shown in Table
27, for the 50 IDR entities that will go through certification, this
results in a cost burden of $27,468 in the first year.\265\
---------------------------------------------------------------------------
\265\ The burden is estimated as follows: (50 IDR entities x
5.10 hours) + (50 IDR entities x 0.25 hours) = 268 hours. A labor
rate of $105.01 is used for a medical and health services manager
and a labor rate of $55.23 is used for a clerical worker. The labor
rates are applied in the following calculation: (50 IDR entities x
5.10 hours x $105.01) + (50 IDR entities x 0.25 hours x $55.23) =
$27,468.
Table 27--One Time and Annual Burden and Costs To Certify and Recertify
----------------------------------------------------------------------------------------------------------------
Estimated Total
Year number of Total annual estimated Other costs Total
responses burden (hours) labor cost estimated cost
----------------------------------------------------------------------------------------------------------------
2022............................ 50 0 $0 $27,468 $27,468
2033............................ 10 0 0 2,343 2,343
2024............................ 10 0 0 2,343 2,343
3 Year Average.............. 23.33 0 0 10,718 10,718
----------------------------------------------------------------------------------------------------------------
Upon selection of a certified IDR entity, the certified IDR entity
must submit the administrative fee to the Departments on behalf of
patient and the provider or facility. The Departments estimate that the
time required to complete the information collection is estimated to
average a clerical worker 18 hours annually,
[[Page 56075]]
including the time to review instructions, search existing data
resources, gather required data, and complete and review information
collection. As shown in Table 28, this results in a cost burden of
$49,707.\266\
---------------------------------------------------------------------------
\266\ The burden is estimated as follows: (18 hours x $55.23) =
$994.14 each IDR entity. A labor rate of $55.23 is used for a
clerical worker. The labor rates are applied in the following
calculation: (50 x 18 hours x $55.23) = $49,707. Labor rates are
EBSA estimates.
Table 28--Annual Burden and Costs To Submit Administrative Fee Starting in 2022
----------------------------------------------------------------------------------------------------------------
Estimated number of IDR entities Total annual Total estimated Total estimated
participating burden (hours) labor cost Other cost cost
----------------------------------------------------------------------------------------------------------------
50.......................................... 0 $0 $49,707 $49,707
----------------------------------------------------------------------------------------------------------------
Certified IDR entities are required to be recertified every 5
years. The Departments estimate that on average one-fifth of certified
IDR entities will need to be recertified each year. Similar to the
initial certification process, the IDR entities must ensure the
processes are established and complete the corresponding paperwork,
including the certification agreement, through the Federal IDR portal.
The Departments estimate that, on average, it will take a medical and
health services manager 2.10 hours and a clerical worker 15 minutes to
satisfy the requirement. The burden for each certified IDR entity would
be 2.35 hours, with an equivalent cost of approximately $224. As shown
in Table 30, for the 10 certified IDR entities that will go through
recertification, this results in a cost burden of $2,238 in subsequent
years.\267\ Table 29 summarizes these costs over time.
---------------------------------------------------------------------------
\267\ The burden is estimated as follows: (50 IDR entities x \1/
5\ x 2.1 hours) + (50 IDR entities x \1/5\ x 0.25 hours) = 24 hours.
A labor rate of $105.01 is used for a medical and health services
manager and a labor rate of $55.23 is used for a clerical worker.
The labor rates are applied in the following calculation: (50 IDR
entities x \1/5\ x 2.1 hours x $105.01) + (50 IDR entities x \1/5\ x
0.25 hours x $55.23) = $2,343.
Table 29--One Time and Annual Burden and Costs To Certify and Recertify
----------------------------------------------------------------------------------------------------------------
Estimated Total
Year number of Total annual estimated Other costs Total
responses burden (hours) labor cost estimated cost
----------------------------------------------------------------------------------------------------------------
2022............................ 50 0 $0 $27,468 $27,468
2023............................ 10 0 0 3,343 2,343
2024............................ 10 0 0 2,343 2,343
3 Year Average.............. 23.33 0 0 10,718 10,718
----------------------------------------------------------------------------------------------------------------
These interim final rules permit an individual, provider, facility,
provider of air ambulance services, or group health plan, health
insurance issuer offering group or individual health insurance
coverage, or FEHB carrier to petition for a denial of a certification
or a revocation of a certification with respect to an IDR entity
seeking certification or certified IDR entity for failure to meet
certain requirements set forth in the interim final rules. The
Departments do not have data on how often such a petition might occur;
however, the Departments assume that such a petition will be a rare
occurrence. The Departments assume that there will be 3 petitions each
year, and it will take on average a medical and health services manager
2 hours and a clerical worker 15 minutes to prepare the petition. The
burden for each IDR entity seeking certification or certified IDR
entity would be 2.25 hours, with an equivalent cost of approximately
$224. As shown in Table 30, for the three petitions, this results in a
cost burden of $560.\268\
---------------------------------------------------------------------------
\268\ The burden is estimated as follows: (3 IDR entities x 2
hours) + (3 IDR entities x 0.25 hours) = 6 hours. A labor rate of
$105.01 is used for a medical and health services manager and a
labor rate of $55.23 is used for a clerical worker. The labor rates
are applied in the following calculation: (3 IDR entities x 2 hours
x $105.01) + (3 IDR entities x 0.25 hours x $55.23) = $560.
Table 30--Annual Burden and Costs Associated With the Petition for Denial or Withdrawal of IDR Entity
Certification Starting in 2022
----------------------------------------------------------------------------------------------------------------
Total annual Total estimated Total estimated
Estimated number of responses burden (hours) labor cost Other costs cost
----------------------------------------------------------------------------------------------------------------
3........................................... 0 $0 $560 $560
----------------------------------------------------------------------------------------------------------------
For each month, certified IDR entities will be required to report
information on their activities to the Departments. The required
information will include the number of Notices of IDR Initiation
submitted to the certified IDR entity under the Federal IDR process
during the immediately preceding month; the number of such Notices of
IDR Initiation with respect to which a final determination was made;
the size of the provider practices and the size of the facilities
submitting Notices of IDR Initiation; the number of times the payment
amount determined or agreed to exceeded the QPA, specified by items and
services; and the total amount of certified IDR entity fees paid to the
certified IDR entity.
Additionally, for each Notice of IDR Initiation, the certified IDR
entity must provide a description of the qualified IDR items and
services included with respect to the Notice of IDR Initiation,
including the relevant billing and
[[Page 56076]]
service codes; the relevant geographic region for purposes of the QPA;
the amount of the offer submitted by the plan or issuer (as applicable)
and by the provider or facility (as applicable) expressed as a dollar
amount and as a percentage of the QPA; whether the offer selected by
the certified IDR entity was the offer submitted by the plan or issuer
(as applicable) or by the provider or facility (as applicable); the
amount of the selected offer expressed as a dollar amount and a
percentage of the QPA; the rationale for the certified IDR entity's
decision; the practice specialty or type of each provider or facility
(as applicable) involved in furnishing each qualified IDR item or
service; the identity for each plan or issuer, and provider or
facility, with respect to the determination; and for each
determination, the number of business days elapsed between selection of
the certified IDR entity and the determination of the out-of-network
rate by the certified IDR entity.
For each month, certified IDR entities will be required to report
information on their activities to the Departments relating to air
ambulance services. The certified IDR entities will be required to
provide the number of Notices of IDR Initiation submitted under the
Federal IDR process that pertain to air ambulance services during the
month submitted to the certified IDR entity; the number of such Notices
of IDR Initiation with respect to which a final determination was made;
the number of times the payment amount exceeded the QPA; and the total
amount of certified IDR entity fees paid to the certified IDR entity
during the month that data was collected with regard to air ambulance
services.
With respect to each Notice of IDR Initiation involving air
ambulance claims, the certified IDR entity must also provide a
description of each air ambulance service, the point of pick-up (as
defined in 42 CFR 414.605) for which the services were provided, the
amount of the offer submitted by the group health plan, health
insurance issuer, or FEHB carrier and by the nonparticipating provider
of air ambulance services expressed as a dollar amount and a percentage
of the QPA; whether the offer selected by the certified IDR entity was
the offer submitted by such plan, issuer, or FEHB carrier or by the
provider or facility; the amount of the offer so selected expressed as
a dollar amount and a percentage of the QPA, including the rationale
for the certified IDR entity's decision; the air ambulance vehicle
type; the identity of the plan, issuer, FEHB carrier, or provider of
air ambulance services with respect to such determination; and the
number of business days elapsed between selection of the certified IDR
entity and the determination of the payment amount by the certified IDR
entity.
For each month, certified IDR entities will be required to report
the information on their activity to the Departments. The report will
be submitted through the Federal IDR portal. The Departments estimate
it will take a medical and health services manager 1 hour, on average,
to prepare the reports and a clerical worker 15 minutes to prepare and
send the report to the Departments each month. The burden for each
certified IDR entity would be 1.25 hours, with an equivalent cost of
approximately $118. For the 600 IDR entities, the annual burden would
be 750 hours, with an equivalent cost burden of $71,291 each year.\269\
---------------------------------------------------------------------------
\269\ The burden is estimated as follows: (50 IDR entities x 1
hour x 12 reports annually) + (50 IDR entities x 0.25 hours x 12
reports annually) = 750 hours. A labor rate of $105.01 is used for a
medical and health services manager and a labor rate of $55.23 is
used for a clerical worker. The labor rates are applied in the
following calculation: (200 IDR entities x 1 hour x 12 reports x
$105.01) + (200 IDR entities x 0.25 hours x 12 reports x $55.23) =
$71,291.
Table 31--Annual Burden and Cost for the IDR Monthly Report Starting in 2022
----------------------------------------------------------------------------------------------------------------
Total annual Total estimated Total estimated
Estimated number of responses burden (hours) labor cost Other costs cost
----------------------------------------------------------------------------------------------------------------
600......................................... 0 0 $71,291 $71,291
----------------------------------------------------------------------------------------------------------------
The certified IDR entities are required, following the discovery of
a breach of unsecured IIHI, to notify of the breach the provider,
facility, or provider of air ambulance services; the plan or issuer;
the Departments; and each individual whose unsecured IIHI has been, or
is reasonably believed to have been, subject to the breach, to the
extent possible. The Departments estimate that three certified IDR
entities will have a breach each year. In addition, the Departments
estimate that it will take a medical and health services manager 1
hour, on average, to handle the initial breach and follow the required
protocols, and that it will take a general and operations manager 45
minutes, on average, to ensure the protocol is executed and adapt
policies accordingly. The burden for each certified IDR entity would be
1.75 hours, with an equivalent cost of approximately $197. For the
three certified IDR entities, this results in a cost burden of $591
each year.\270\ The Departments assume that 5 percent of notices would
be mailed and will incur a printing cost of $0.05 per page and $0.55
for postage. Thus, the mailing cost is estimated to be $0.09.\271\ The
Departments seek comment addressing the costs that will be associated
with these interim final rules.
---------------------------------------------------------------------------
\270\ The burden is estimated as follows: (3 certified IDR
entities x 1 hour) + (3 certified IDR entities x 0.75 hour) = 5
hours. A labor rate of $105.01 is used for a medical and health
services manager and a labor rate of $55.23 is used for a clerical
worker. The labor rates are applied in the following calculation: (3
certified IDR entities x 1 hour x $105.01) + (3 certified IDR
entities x 0.75 hour x $122.55) = $591.
\271\ This is calculated 3 x 0.05 x ($0.05 + $0.55) = $0.09.
Table 32--Annual Burden and Cost for Breach Notification Starting in 2022
----------------------------------------------------------------------------------------------------------------
Total annual Total estimated Total estimated
Estimated number of responses burden (hours) labor cost Other costs cost
----------------------------------------------------------------------------------------------------------------
3........................................... 0 $0.09 $591 $591.09
----------------------------------------------------------------------------------------------------------------
[[Page 56077]]
Summary
In the first year, the total cost burden associated with the IDR
entity certification process is $149,616. In subsequent years, the
total cost burden associated with the IDR entity certification process
is $124,491. The three-year average cost burden associated with the IDR
entity certification is $132,866. The burden associated with the IDR
entity certification is shared by HHS, DOL, the Department of the
Treasury, and OPM. As shown in Tables 33 through 35, it is estimated
that 45 percent of the burden will be accounted for by HHS, 25 percent
of the burden will be accounted for by DOL and the Department of the
Treasury each, and 5 percent will be accounted for by OPM. Therefore,
the cost burden associated with HHS requirements is $67,327 in the
first year and $56,021 in subsequent years. The three-year average cost
burden associated with HHS requirements is $59,790. The cost burden
associated with each of the DOL and the Department of the Treasury
requirements is $37,404 in the first year and $31,123 in subsequent
years. The three-year average cost burden associated with DOL and the
Department of the Treasury is $33,217 each. The cost burden associated
with OPM requirements is $7,481 in the first year and $6,225 in
subsequent years. The three-year average cost burden associated with
OPM requirements is $6,643. The Departments seek comment on the
assumptions and calculations made in this ICR.
Table 33--HHS Summary Cost and Burden of IDR Entity Certification Starting in 2022
----------------------------------------------------------------------------------------------------------------
Total annual Total estimated Total estimated
Estimated number of responses burden (hours) labor cost Other costs cost
----------------------------------------------------------------------------------------------------------------
305......................................... $0 $0 $59,790 $59,790
----------------------------------------------------------------------------------------------------------------
Table 34--DOL and the Department of the Treasury's Summary Cost and Burden of IDR Entity Certification Starting
in 2022
----------------------------------------------------------------------------------------------------------------
Total annual Total estimated Total estimated
Estimated number of responses burden (hours) labor cost Other costs cost
----------------------------------------------------------------------------------------------------------------
170......................................... 0 $0 $33,217 $33,217
----------------------------------------------------------------------------------------------------------------
TAble 35--OPM's Summary Cost and Burden of IDR Entity Certification Starting in 2022
----------------------------------------------------------------------------------------------------------------
Total annual Total estimated Total estimated
Estimated number of responses burden (hours) labor cost Other costs cost
----------------------------------------------------------------------------------------------------------------
34.......................................... 0 $0 $6,643 $6,643
----------------------------------------------------------------------------------------------------------------
ICRs Regarding Notice of the Right to Good Faith Estimates for
Uninsured (or Self-Pay) Individuals (45 CFR 149.610)
Convening providers and facilities are required under 45 CFR
149.610(b) to inform uninsured (or self-pay) individuals of the
availability of good faith estimates of expected charges. The notice
regarding the availability of good faith estimates for uninsured (or
self-pay) individuals must be written in a clear and understandable
manner and made available in accessible formats and in the language(s)
spoken by individual(s) seeking items and services with such convening
provider or convening facility. Additionally, the notice must be
prominently displayed (and easily searchable from a public search
engine), on the convening provider's or convening facility's website,
in the convening provider's or convening facility's office, and on-site
where scheduling or questions about the cost of items and services
occur. These ICRs estimate the information collection burdens for three
groups of provider types: (1) Providers associated with health care
facilities, (2) individual physician practitioners, and (3) wholly
physician-owned private practices. For all three groups of providers,
the ICRs apply the same methodology to estimate the burden, consisting
of the following steps:
Drafting notices informing uninsured (or self-pay)
individuals of their right to receive a good faith estimate of expected
charges.
Displaying the notices on the provider's website, in the
provider's office, and on-site where scheduling or questions about the
cost of items or services occur.
Posting a single page notice in at least two prominent
locations.
Printing and materials costs for posting notices.
Details about the requirements of the steps that apply to all 3
provider groups are described once for providers associated with health
care facilities and apply equally to the other two provider groups. Any
specific differences in estimating the burden to comply with these
requirements are detailed for the specific provider group below. HHS
invites comment on the assumptions and calculations made in these ICRs.
Providers Associated With Health Care Facilities
Unique to providers associated with health care facilities, HHS
assumes that such providers will enter into agreements with their
associated health care facility to provide notice of the availability
of good faith estimates of expected charges to uninsured (or self-pay)
individuals on their behalf. HHS estimates that for each health care
facility it will take an average of 2 hours for a lawyer to draft an
agreement and a medical secretary and administrative assistant 2 hours
to provide electronic copies to all associated convening providers to
sign. As shown in Table 36, this results in an equivalent cost estimate
of approximately $91,770,384 to be incurred as one-time cost in
2021.\272\ HHS cannot estimate how
[[Page 56078]]
many providers will incur burden to sign the agreement, but assumes the
burden to providers will be minimal; the use of electronic signature
portals may reduce the burden to the convening provider. In future
years, this agreement can be included in the contract between the
facilities and providers at no additional cost.
---------------------------------------------------------------------------
\272\ The burden is estimated as follows: 245,336 health care
facilities x 2 hours = 490,672 hours. A labor rate of $140.96 is
used for a lawyer. The labor rate is applied in the following
calculation: 245,336 health care facilities x 2 hours x $140.96 =
$69,165,125. 245,336 health care facilities x 2 hours = 490,672
hours. A labor rate of $46.07 is used for a medical secretary and
administrative assistant. The labor rate is applied in the following
calculation: 245,336 health care facilities x 2 hours x $46.07 =
$22,605,259. Therefore, 490,672 hours + 490,672 hours = 981,344
total burden hours and $69,165,125 + $22,605,259 = $91,770,381 total
annual respondent time cost.
Table 36--Estimated One-Time and Hour Burden for Providers Associated With Facilities To Enter Into Agreements To Provide Notice of Right to a Good
Faith Estimate
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Estimated Burden per
Year number of number of response Total burden Total estimated
respondents responses (hours) (hours) cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021............................................................... 245,336 245,336 4 981,344 $91,770,384
--------------------------------------------------------------------------------------------------------------------------------------------------------
HHS assumes that the associated facility will draft the notices
informing uninsured (or self-pay) individuals of their right to receive
a good faith estimate of expected charges. Information regarding the
availability of good faith estimates for uninsured (or self-pay)
individuals must be written in a clear and understandable manner and
made available in accessible formats and in the language(s) spoken by
individual(s) seeking items and services with such convening provider.
Additionally, the notices must be prominently displayed on the
convening provider's website, and in the convening provider's office,
and on-site where scheduling or questions about the cost of items or
services occur. Providers may satisfy this requirement by utilizing the
language in the standard notice anticipated to be issued by HHS. HHS
estimates that for each health care facility, it will take an average
of two hours for a lawyer to read and understand the anticipated notice
and draft any additions in clear and understandable language, a medical
secretary and administrative assistant 30 minutes to prepare the
document for posting within the facility, and a computer programmer 1
hour to post the information on each providers' website on behalf of
the facility. As shown in Table 37, this results in an equivalent cost
of approximately $102,754,069 to be incurred as a one-time cost in
2021.\273\
---------------------------------------------------------------------------
\273\ The burden is estimated as follows: 245,336 health care
facilities x 2 hours = 490,672 hours. A labor rate of $140.96 is
used for a lawyer. The labor rate is applied in the following
calculation: 245,336 health care facilities x 2 hours x $140.96 =
$69,165,125. 245,336 health care facilities x 0.5 hours = 122,668
hours. A labor rate of $46.07 is used for a medical secretary and
administrative assistant. The labor rate is applied in the following
calculation: 245,336 health care facilities x 0.5 hours x $46.07 =
$5,651,315. 245,336 health care facilities x 1 hours = 245,336
hours. A labor rate of $113.77 is used for a computer programmer.
The labor rate is applied to the following calculation: 245,336
health care facilities x 1 hour x $113.77= $27,911,877. Therefore,
490,672 hours + 122,668 hours + 245,336 hours = 858,676 total burden
hours. Additionally, one-time printing and material costs are
estimated using the following calculation: .05 x 2 pages x 245,336
impacted health care facilities = 25, 752 total one-time cost for
printing and materials. The total respondent time costs are
$69,165,125 + $5,651,315 + $27,911,877 + $25,752 = $102,754,069.
Table 37--Estimated One-Time Cost and Hour Burden for Health Care Facilities (Including on Behalf of Health Care Providers Associated With Health Care
Facilities) To Draft and Post Notice of Good Faith Estimate
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Estimated Burden per
Year number of number of response Total burden Printing and Total estimated
respondents responses (hours) (hours) materials costs cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021.............................................. 245,336 245,336 2.5 858,676 $25,752 $102,754,069
--------------------------------------------------------------------------------------------------------------------------------------------------------
HHS assumes that each health care facility will post a single page
document in at least 2 prominent locations so uninsured (or self-pay)
individuals are provided reasonable notice of their right to a good
faith estimate of expected charges. A prominent location in the health
care facility may include patient appointment check-in kiosks,
reception front-desks, patient appointment scheduling locations, and
where patients pay bills. The notices should be drafted in clear and
understandable language, shorter in length, and printed in legible font
size. HHS assumes that each facility will incur a printing cost of
$0.05 per page and materials for a total equivalent cost of $0.10.
Hospitals may have a greater number of posting locations because of
building size, therefore, HHS anticipates that hospitals will post four
additional notices on average and incur an additional cost of $0.20
each. This results in a one-time equivalent cost of approximately
$24,534 to all non-hospital health care facilities and an overall one-
time cost of approximately $25,752 when including hospitals.
HHS estimates that the one-time burden for providers and facilities
to enter into agreements and for facilities to develop, prepare, print,
and post the notices and update their respective websites will be
approximately 1,840,020 total burden hours with an associated
equivalent cost of approximately $194,524,453, as shown in Table 38.
[[Page 56079]]
Table 38--Total Estimated One-Time Cost and Hour Burden for Health Care Facilities (Including on Behalf of Health Care Providers Associated With Health
Care Facilities) To Provide Notice of Right to a Good Faith Estimate \274\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Estimated Burden per
Year number of number of response Total annual Printing and Total estimated
respondents responses (hours) burden (hours) materials costs cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021.............................................. 245,336 245,336 7.5 1,840,020 $25,752 $194,524,453
--------------------------------------------------------------------------------------------------------------------------------------------------------
Individual Physician Practitioners
HHS estimates that 145,887 individual physician practitioners will
incur burden and cost to comply with this provision.\275\ HHS estimates
an average of 2 hours and 30 minutes for the individual physician
practitioner to read and understand the provided notice and draft any
additions in clear and understandable language and (for 80% of
individual physician practitioners) a computer programmer one hour to
post the information in the provider's website. HHS estimates that the
one-time burden for individual physician practitioners to develop,
prepare, print, post the notices, and make website updates will be
approximately 481,426 total burden hours. This results in an equivalent
cost of approximately $75,075,712.\276\
---------------------------------------------------------------------------
\274\ Estimated cost includes the sum of Table 28 and 29. It
also includes computer programming cost to update health care
facility websites with uninsured (or self-pay) individuals' right to
the good faith estimate. Total printing and material costs for all
health care facilities of $24,534 to all non-hospital health care
facilities and an overall one-time cost of approximately $25,752 for
hospitals.
\275\ In generating these estimates, HHS reviewed data from the
American Medical Association (AMA) and Kaiser Family Foundation. See
Kane C. Policy Research Perspectives Recent Changes in Physician
Practice Arrangements: Private Practice Dropped to Less than 50
Percent of Physicians in 2020. Accessed July 15, 2021. https://www.ama-assn.org/system/files/2021-05/2020-prp-physician-practice-arrangements.pdf; Professionally Active Physicians. KFF. Published
May 20, 2020. https://www.kff.org/other/state-indicator/total-active-physicians/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22.
\276\ The burden is estimated as follows: 145,887 individual
physician practitioners x 2.5 hours = 364,717 hours. A labor rate of
$169.40 is used for a physician. The labor rate is applied to the
following calculation: 145,887 individual physician practitioners x
2.5 hours x $169.40 = $61,783,085. HHS assumes that 80 percent of
individual physician practitioners have a website resulting in
116,709 websites needed to be updated with good faith estimate
notices. HHS assumes that the physician will pay a computer
programmer to make the website update. The burden is estimated as
follows: 116,709 websites needing updates x 1 hour = 116,709 hours.
A labor rate of $113.77 is used for a computer programmer. The labor
rate is applied to the following calculation: 116,709 websites
needing updates x 1 hour x $113.77 = $13,278,038. Therefore, 364,717
hours + 116,709 hours = 481,426 total burden hours. The total annual
respondent time cost is $61,783,085 + $13,276,038 = $75,061,124.
Total printing and material costs are of $14,589. Therefore,
$75,061,124 + $14,589 = $75,075,712.
---------------------------------------------------------------------------
HHS assumes that each individual physician practitioner will incur
a printing cost of $0.05 per page and materials for a total equivalent
cost of $0.10. This results in an annual one-time equivalent cost of
approximately $14,589 to all individual physician practitioners.
HHS estimates that the annual one-time burden for individual
physician practitioners to develop, prepare, print, post the notices,
and make website updates will be approximately 481,426 total burden
hours with an associated equivalent cost of approximately $75,075,712,
as shown in Table 39.
---------------------------------------------------------------------------
\277\ HHS estimates that 80 percent (116,709) of individual
physician practitioners have a website. Therefore, estimated cost
includes computer programming cost to update individual physician
practitioners' websites with uninsured (or self-pay) individuals'
right to good faith estimate. HHS assumes that each individual
physician practitioner will incur a printing cost of $0.05 per page
and materials for a total equivalent cost of $0.10. Total printing
and material costs of $14,589 are included.
Table 39--Estimated One-Time Cost and Hour Burden for Individual Physician Practitioners To Draft and Post Notice of Good Faith Estimate Notice \277\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Burden per
Year Estimated number of number of response Total annual Printing and Total
respondents responses (hours) burden (hours) material costs estimated cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021...................................... 145,887 (All Physicians).... 145,887 2.5 364,717 .............. $61,797,674
2021...................................... 116,709 * (Additional burden * 116,709 1 116,709 .............. 13,278,038
for Subset of Physicians
with Websites).
-------------------------------------------------------------------------------------------------------------
Total................................. ............................ .............. 3.5 481,426 .............. ** 75,075,712
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This is calculated as the sum of $61,797,674 (cost for all individual physician practitioners to draft notice of right to GFE) + $13,278,038 (cost for
computer programmers to post notice of right to GFE on 80% of practitioners' websites). Total estimated cost of $75,075,712 includes burden for all
individual physician practitioners to draft the notice of right to GFE plus the additional burden for computer programmers to add the notice to the
website for the subset (80 percent) of total physicians that have websites, (80 percent of 145,887 = 116,709).
Wholly-Physician-Owned Private Practices
HHS estimates that 120,525 wholly physician-owned private practices
will incur burden and cost to comply with this provision.\278\ For each
practice, HHS estimates an average of 2 hours and 30 minutes for a
general and operations manager to read and understand the provided
notice and draft any additions in clear and understandable language and
a computer programmer one hour to post the information in the
provider's website. This results in an equivalent cost of approximately
$50,650,005 to be incurred as a one-time cost in 2021.\279\
---------------------------------------------------------------------------
\278\ In generating these estimates, HHS reviewed data from the
American Medical Association (AMA) and Kaiser Family Foundation. See
Kane C. Policy Research Perspectives Recent Changes in Physician
Practice Arrangements: Private Practice Dropped to Less than 50
Percent of Physicians in 2020. Accessed July 15, 2021. https://www.ama-assn.org/system/files/2021-05/2020-prp-physician-practice-arrangements.pdf; Professionally Active Physicians. KFF. Published
May 20, 2020. https://www.kff.org/other/state-indicator/total-active-physicians/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22.
\279\ The burden is estimated as follows: 125,525 wholly
physician-owned private practices x 2.5 hours = 301,312 hours. A
labor rate of $122,55 is used for a general and operations manager.
The labor rate is applied to the following calculation: 120,525
wholly physician-owned private practices x 2.5 hours x $122.55 =
$36,925,829. 120,525 wholly physician-owned private practices x 1
hour = 120,525 hours. A labor rate of $113.77 is used for a computer
programmer. The labor rate is applied to the following calculation:
120,525 wholly physician-owned private practices x 1 hour x $113.77
= $13,712,123. Therefore, the total burden hours are 301,312 +
120,525 = 421,837 and the total equivalent costs are $36,925,829 +
$13,712,123 = $50,637,952. The printing and material costs are
$12,052. Therefore, $50,637,952 + $12,052 = $50,650,005.
---------------------------------------------------------------------------
[[Page 56080]]
HHS assumes that each the wholly physician-owned private practice
will incur a printing cost of $0.05 per page and materials for a total
equivalent cost of $0.10. This results in a one-time equivalent cost of
approximately $12,052 to all wholly physician-owned private practices.
HHS estimates that the annual one-time burden for wholly physician-
owned private practices to develop, prepare, print, and post the
notices, and make website updates will be approximately 421,837 total
burden hours with an associated equivalent cost of approximately
$50,650,005, as shown in Table 40.
---------------------------------------------------------------------------
\280\ 301,312 + 120,525 = 421,837 and the total equivalent costs
are $36,925,829 + $13,712,123 = $50,637,952. The printing and
material costs are $12,052. Therefore, $50,637,952 + $12,052 =
$50,650,005.
Table 40--Estimated One-Time Cost and Hour Burden for Wholly Physician-Owned Private Practices To Draft and Post Notice of Good Faith Estimate Notice *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Estimated Burden per
Year number of number of response Total annual Material and Total estimated cost
respondents responses (hours) burden (hours) printing costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021..................................... 120,525 120,525 3.5 421,837 $12,052 \280\ $50,650,005
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Estimated cost includes computer programming cost to update wholly physician-owned private practice website with uninsured (or self-pay) individuals'
right to a good faith estimate. HHS assumes that each the wholly physician-owned private practice will incur a printing cost of $0.05 per page and
materials for a total equivalent cost of $0.10. Total printing and material costs of $12,052 are included.
Summary
HHS estimates that the one-time burden for health care providers
(including providers associated with health care facilities, individual
physician practitioners, and wholly physician-owned private practices)
and health care facilities to provide notice of the right to a good
faith estimate of expected charges to uninsured (self-pay) individuals
will be approximately 2,743,283 total burden hours with an associated
equivalent cost of approximately $320,250,169.
---------------------------------------------------------------------------
\281\ This includes the time for providers associated with
health care facilities to enter into agreements with health care
facilities to provide good faith estimates on their behalf.
Table 41--Estimated Total One-Time Cost Related to Notice of Right to Good Faith Estimate *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Estimated Burden per Total annual Total printing
Year number of number of response labor burden and material Total estimated
respondents responses (hours) \281\ (hours) costs cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021.............................................. 511,748 511,748 15.5 2,743,283 $52,393 $320,250,169
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Tables 38 through 40 are combined to estimate total amounts. This table presents a cumulative 15.5 hours of burden per response for summary purposes.
7. ICRs Regarding Requirements for Provision of Good Faith Estimate of
Expected Charges Upon Request of Uninsured (or Self-Pay) Individuals
and for Scheduled Items and Services (45 CFR 149.610)
These interim final rules require a convening provider or facility
to provide a good faith estimate of expected charges to uninsured (or
self-pay) individuals for scheduled items and services and upon request
(45 CFR 149.610) including those items or services furnished by a co-
provider or co-facility in conjunction with the primary items or
services. HHS estimates that approximately 3,498,942 uninsured (or
self-pay) individuals will be impacted by this rule requirement.\282\ A
total of 511,748 providers associated with health care facilities,
individual physician practitioners, and wholly physician-owned private
practices will incur the burden and costs associated with generating a
good faith estimate.\283\ HHS welcomes comments on this estimate.
---------------------------------------------------------------------------
\282\ The number is estimated as follows: 51,744,200
nonemergency elective procedures (surgical and non-surgical)
performed annually x 9.2% uninsured rate = 4,760,466. HHS assumes
that some uninsured populations will forego elective procedures
because of costs. Therefore, a 30% decrease adjustment was included
resulting in 3,332,326. HHS also assumes a 5% adjustment for good
faith estimate inquires only resulting in a final value of
3,498,942. See Squitieri, Lee et al. ``Resuming Elective Surgery
during Covid-19: Can Inpatient Hospitals Collaborate with Ambulatory
Surgery Centers?.'' Plastic and reconstructive surgery. Global open
vol. 9,2 e3442. 18 Feb. 2021, doi:10.1097/GOX.0000000000003442 (The
study estimates 4,297,850 nonemergency elective procedures (surgical
and non-surgical) are performed each month. This value was
multiplied by 12 months = 51,574,200. HHS adjusted by approximately
one-third of one percent to account annual increase in volume since
study publication resulting in 51,744,200). See also KFF Health
Insurance Coverage of the Total Population.
\283\ These estimates include the total number of health care
facilities and health care providers from the preceding ICR
Regarding Notice of Right to Good Faith Estimate.
---------------------------------------------------------------------------
HHS estimates that it will take an average of 30 minutes for a
business operations specialist to determine a patient's insurance
status, orally inform the patient of their right to receive a good
faith estimate of expected charges, and provide an oral good faith
estimate, if no additional items and services are needed. HHS assumes
1,749,471 (50 percent) of uninsured (or self-pay) individuals fall in
this category. Therefore, the annual equivalent cost estimate for
provision of good faith estimates where no additional items and
services are needed is of $88,628,201.\284\
---------------------------------------------------------------------------
\284\ The burden is estimated as follows: 1,749,471 uninsured
(or self-pay) individuals in need of good faith estimates without
items and services x 0.50 hours = 874,736 hours. A labor rate of
$101.32 is used for a business operations specialist. The labor rate
is applied in the following calculation: 1,749,471 claims x 0.50
hours x $101.32 = $88,628,201.
---------------------------------------------------------------------------
HHS estimates that it will take an average of 30 minutes for a
business operations specialist to generate a good faith estimate of
expected charges furnished by a co-provider and co-facility for items
and services to the convening provider. Given that 1,749,471 (50
percent) of uninsured (or
[[Page 56081]]
self-pay) individuals require additional items and services, same
number (1,749,471) of claims will be generated by co-providers or co-
facilities. Therefore, the annual equivalent cost estimate for good
faith estimates sent to convening providers by co-providers or co-
facilities is $88,628,201.\285\ HHS assumes that all communication
between convening provider and convening facility, and co-provider or
co-facility will be done electronically. Thus, the cost to generate a
good faith estimate for both cases where additional items and services
are needed and where no additional items and services are needed is
$354,512,803.\286\
---------------------------------------------------------------------------
\285\ The burden is estimated as follows: 1,749,471 uninsured
individuals in need of good faith estimates with additional items
and services x 0.50 hours = 874,736 hours. A labor rate of $101.32
is used for a business operations specialist. The labor rate is
applied in the following calculation: 1,749,471 claims x 0.50 hours
x $101.32 = $88,628,201.
\286\ The burden is estimated as follows: $88,628,201 +
$177,256,402 + $88,628,201 = $354,512,803.
---------------------------------------------------------------------------
HHS estimates that it will take an average of 1 hour for a business
operations specialist to determine a patient's insurance status, inform
uninsured (or self-pay) individuals of their right to receive a good
faith estimate of expected charges, and provide a good faith estimate,
if additional items and services are needed. HHS assumes 1,749,471 (50
percent) of uninsured (or self-pay) individuals fall in this category.
Therefore, the annual equivalent cost estimate is $177,256,402.\287\
Thus, a total of $265,884,603 is estimated for business operations
specialists, when adding the cost if no additional items and services
are needed ($88,628,201) to the cost if additional items and services
are needed ($177,256,402).
---------------------------------------------------------------------------
\287\ The burden is estimated as follows: 1,749,471 claims x 1
hour = 1,749,471 hours. A labor rate of $101.32 is used for a
business operations specialist. The labor rate is applied in the
following calculation: 1,749,471 claims x 1 hour x $101.32 =
$177,256,402.
---------------------------------------------------------------------------
HHS estimates that approximately 90 percent of uninsured (or self-
pay) individuals will receive a good faith estimate of expected charges
through the mail that is 2 pages in length.\288\ The remaining 10
percent of uninsured (or self-pay) individuals will receive the good
faith estimate via electronic correspondence; costs are therefore
accounted for in the 2 preceding paragraphs. HHS assumes that each
convening provider or facility will incur a printing cost of $0.05 per
page and materials for a total equivalent cost of $0.10 per good faith
estimate. Therefore, the annual equivalent cost estimate for printing
good faith estimates is $314,905 for all health care providers and
health care facilities.\289\
---------------------------------------------------------------------------
\288\ HHS assumes that the good faith estimate will be printed
in 8.5'' x 11'' letter sized paper.
\289\ The estimate is calculated as follows: $0.05 cost per page
x 2 pages x 3,149,048 uninsured (or self-pay) individuals who
receive a written good faith estimate = $314,905.
---------------------------------------------------------------------------
HHS assumes that 5% of uninsured (or self-pay) individuals (i.e.,
157,452 uninsured (or self-pay) individuals) will request a mailed copy
of their written good faith estimate of expected charges to a preferred
location.\290\ HHS assumes that it will take an average of 15 minutes
for a medical secretary and administrative assistant to print and mail
the good faith estimate to the uninsured (or self-pay) individual. HHS
estimates a postage cost of $0.55 per mailing. Therefore, the annual
equivalent cost estimate is $1,900,057 to mail the good faith estimate
for all health care providers and health care facilities.\291\
---------------------------------------------------------------------------
\290\ An estimated 3,149,048 uninsured (or self-pay) individuals
who receive a written good faith estimate x 5% = 157,452 uninsured
(or self-pay) individuals who request a mailed good faith estimate
of expected charges.
\291\ The burden is estimated as follows: 157,452 good faith
estimates x 0.25 hours = 39,363 hours. A labor rate of $46.07 is
used for a medical secretary and administrative assistant. The labor
rate is applied in the following calculation: 157,452 good faith
estimates x 0.25 hours x $46.07 = $1,813,458. Therefore, 157,452
mailed good faith estimates x $0.55 postage cost = $86,599 in
mailing costs + $1,813,458 in annual respondent time cost =
$1,900,057.
Table 42--Estimated Annual Cost and Hour Burden per Response per Health Care Provider and Health Care Facility
To Accept and Fulfill Requests for Mailed Good Faith Estimates of Expected Charges
[Mailing costs only]
----------------------------------------------------------------------------------------------------------------
Total mailing
Occupation Burden hours Labor cost per cost per
per response hour response
----------------------------------------------------------------------------------------------------------------
Medical Secretary and Administrative Assistant.................. 0.25 $46.07 \292\ $3.71
-----------------------------------------------
Total per Response.......................................... 0.25 .............. 3.71
----------------------------------------------------------------------------------------------------------------
Table 43--Estimated Annual Cost and Hour Burden for All Health Care Provider and Health Care Facility To Accept and Fulfill Requests for Mailed Good
Faith Estimates of Expected Charges
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total labor
Number of respondents Number of Burden hours Total burden costs of Mailing cost Total annual
responses per respondent hours reporting cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
511,748........................................... 157,452 0.25 39,363 $1,813,458 $86,599 \293\
$1,900,057
--------------------------------------------------------------------------------------------------------------------------------------------------------
Summary
HHS estimates the annual cost to a convening provider or facility
to provide a good faith estimate of expected charges to uninsured (or
self-pay) individuals for scheduled items and services and upon
requests between 2022-2024 to be $356,727,765 (inclusive of printing,
materials, mailing costs) and total burden hours of 3,538,305, as shown
in Table 44.
---------------------------------------------------------------------------
\292\ The cost per respondent is calculated as: $1,900,057 in
medical secretary and administrative assistant annual respondent
time cost to mail good faith estimate and mailing costs (printing
costs are already accounted for in preceding section) divided by
511,748 health care providers and health care facilities = $3.71
cost per respondent.
\293\ Therefore, 157,452 mailed good faith estimates x $0.55
postage cost = $86,599 in mailing costs + $1,813,458 in annual
respondent time cost = $1,900,057.
---------------------------------------------------------------------------
HHS estimates the annual cost for printing and materials to provide
written good faith estimates to uninsured (or self-pay) individuals to
be $314,905. The mailing costs of good faith estimates to uninsured (or
self-pay)
[[Page 56082]]
individuals is $86,599 with an annual total burden hour estimate of
39,363 hours and a total annual respondent time cost of $1,813,458.
This estimate is included in the total cost of $356,727,765. HHS
invites comment on the assumptions and calculations made in this ICR.
Table 44--Annual Burden and Total Cost Related to Provision of Good Faith Estimates for Uninsured (or-Self-Pay) Individuals (Labor, Printing, and
Mailing)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Printing and
Estimated Burden per Total annual Total annual mailing costs Total estimated
Estimated number of respondents number of response burden (hours) respondent time (labor cost cost
responses (hours) cost included) *
--------------------------------------------------------------------------------------------------------------------------------------------------------
3,498,942...................................... 3,498,942 2.0 3,538,305 $354,512,803 $2,214,961 ** $356,727,765
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This is calculated as following: $314,905 in printing costs + $86,599 in mailing costs + $1,813,458 in estimated annual respondent time cost to mail
good faith estimate = $2,214,961. The Department assumes that it will take an average of fifteen minutes for a medical secretary and administrative
assistant to print and mail the good faith estimate to the uninsured (or self-pay) individual. The annual burden hours associated with printing and
mailing a good faith estimate of expected charges is 39,363 hours.
** The total estimated cost burden is the sum $88,628,201 (the GFE costs without co-providers or co-facilities) + $177,256,402 (the GFE costs with co-
providers or co-facilities) + 88, 628, 201 (the GFE costs to convening providers) + $2,214,961 (printing and mailing costs, including labor).
8. ICRs Regarding Patient-Provider Dispute Resolution Process (45 CFR
149.620)
These interim final rules enable uninsured (or self-pay)
individuals to initiate a patient-provider dispute resolution process
if their final billed charges are in excess of the expected charges by
at least $400 more than the amount listed in the good faith estimate
supplied by the provider or facility. HHS does not have data on how
many claims will be likely to result in patient-provider dispute
resolution. For the estimates in this section, HHS relied on the
experience of New York State. In 2015-2018 New York State had 1,486
disputes involving surprise bills submitted to IDR, 31% of these
disputes (457 in all) were found ineligible for IDR for various reasons
including 8% (approximately 36 cases) due to enrollment in self-insured
plans.\294\ For purposes of this analysis, HHS assumes that going
forward, New York State will continue to see 40 IDR cases each year
involving surprise bills for individuals enrolled with self-insured
plans. Accordingly, the Departments estimate that there will be 26,659
claims that result in patient-provider dispute resolution each
year.\295\
---------------------------------------------------------------------------
\294\ See https://www.dfs.ny.gov/system/files/documents/2019/09/dfs_oon_idr.pdf.
\295\ The number is estimated as follows: 51,744,200
nonemergency elective procedures (surgical and non-surgical)
performed annually x 9.2% uninsured rate = 4,760,466. HHS assumes
that some uninsured (or self-pay) individuals will forego elective
procedures because of costs. Therefore, a 30% decrease adjustment
was included resulting in 3,332,326. HHS assumes that 10% of
uninsured (or self-pay) individuals who undergo a nonemergency
elective procedure will receive a billed charge that is $400 or
greater more than the total expected charges listed in the good
faith estimate, therefore 3,332,326 x 10% = 333,233. HHS assumes
that 8% will engage the provider-patient dispute resolution process,
therefore 333,233 x 8% = 26,659.
---------------------------------------------------------------------------
HHS estimates that it will take an average of 2 hours for an
uninsured (or self-pay) individual or, if they use an authorized
representative, 1 hour for their authorized representative to write,
prepare, and send the notice to initiate the patient-provider dispute
resolution to the Secretary of HHS. HHS assumes that uninsured (or
self-pay) individuals will self-represent in 90% of the cases, while
the remaining 10% will be represented by the uninsured (or self-pay)
individual's authorized representative, as allowed by these interim
final rules.
HHS assumes the authorized representative will be a lawyer.
Additionally, HHS assumes that a small percentage of uninsured (or
self-pay) individuals or their authorized representatives will be asked
to resubmit or send additional materials to complete the initiation
process. This results in an annual equivalent cost estimate of
$3,789,694.\296\ The patient-provider dispute resolution initiation
notice must be submitted to the Secretary of HHS within 120 calendar
days of receiving billed charges substantially in excess of the good
faith estimate. HHS assumes for uninsured (or self-pay) individuals
that 8,973 (34%) of initiation notices, including those that need to be
resubmitted with additional materials, will be sent electronically and
17,419 (66%) of the initiation notices, including those that need to be
resubmitted with additional materials will be mailed with an associated
printing and materials and postage costs of $12,193.\297\ \298\ To
facilitate communication between parties and compliance with this
notice requirement, HHS is concurrently issuing a model notice that the
parties may use to satisfy the patient-provider dispute resolution
initiation notice requirement. HHS will consider timely use of the
model notice in accordance with the accompanying instructions to
satisfy the notice requirement.
---------------------------------------------------------------------------
\296\ The burden is estimated as follows: 26,659 x 90% = 23,993
uninsured (or self-pay) individuals will self-represent. 23,993 x 2
hours = 47,986 hours. A labor rate of $64.32 is used for uninsured
(or self-pay) individuals (all occupations). The labor rate is
applied in the following calculation: 23,993 claims x 2 hours x
$64.32 = $3,086,427. HHS assumes that uninsured (or self-pay)
individual will appoint an authorized representative in 10% of
cases. .26,659 x 10% = 2,666 claims represented by an authorized
representative. HHS assumes approximately 15% of uninsured (or self-
pay) individuals will need to resubmit or submit additional
materials to initiate IDR, either themselves or through their
authorized representative. Therefore, the burden estimate is
calculated as follows: 23,993 claims x 10% = 2,399 resubmitted
claims by individual x 2 hours x $64.32 (labor rate) = $129,899.
2,666 claims x 5% = 133 resubmitted claims by authorized
representative x 1 hour x $140.96 (labor rate) = $18,789. The total
annual respondent time cost estimates are added as follows:
$3,086,472 + $375,785 + $308,647 + $18,789 = $3,789,694. The total
burden hours are 55,584.
\297\ HHS assumes that the average initiation notice sent via
mail by uninsured (or self-pay) individuals will be three pages in
length and printed on 8.5'' x 11'' sized paper. HHS assumes a $0.05
cost in printing and materials cost per page and $0.55 in postage
cost. Therefore, $0.05 cost per page x 3 pages x 17,419 mailed
initiation notices (inclusive of notices that needed to be
resubmitted) = $2,613 in printing and material costs. The postage
costs are calculated as $0.55 cost per postage x 17,419 mailed
initiation notices = $9,580 in postage cost. The total printing and
materials and postage costs are therefore $2,613 + $9,580 = $12,193.
\298\ According to data from the National Telecommunications and
Information Agency, 34% of households in the United States accessed
health records or health insurance online. https://www.ntia.doc.gov/blog/2020/more-half-american-households-used-internet-health-related-activities-2019-ntia-data-show.
---------------------------------------------------------------------------
These interim final rules require the SDR entity to attest to the
Secretary of HHS whether a conflict of interest exists with the
uninsured (or self-pay) individual, provider, or facility. HHS assumes
that it will take an average of one hour for a general and operations
manager and one hour for a lawyer to
[[Page 56083]]
determine whether a conflict of interest exists. HHS assumes all
communication will be done electronically. This results in annual
equivalent cost estimate of $7,024,811, as shown in Table 45.\299\
---------------------------------------------------------------------------
\299\ The burden is estimated as follows: 26,659 claims x 1 hour
= 26,659 hours. A labor rate of $122.55 is used for a general and
operations manager. The labor rate is applied in the following
calculation: 26,659 claims x 1 hour x $122.55 = $3,267,013. The
burden for legal review is estimated as follows: 26,659 claims x 1
hour = 26,659 hours. A labor rate of $140.96 is used for a lawyer.
The labor rates are applied in the following calculation: 26,659
claims x 1 hour x $140.96 = $3,757,798. The total annual response
time cost estimates are added as follows: $3,267,013 + $3,757,798 =
$7,024,811. The total burden hours are 53,317.
Table 45--Estimated Annual Cost and Hour Burden Related to Attestation of Conflict of Interest With a Patient-
Provider Dispute Resolution Initiation Notice
----------------------------------------------------------------------------------------------------------------
Estimated Burden per
Estimated number of respondents number of response Total annual Total
responses (hours) burden (hours) estimated cost
----------------------------------------------------------------------------------------------------------------
26,659...................................... 26,659 2 53,317 $7,024,811
----------------------------------------------------------------------------------------------------------------
These interim final rules also require the selected SDR entity to
review eligibility and completeness of the initiation notice and notify
uninsured (or self-pay) individuals, providers or facilities of the SDR
entity's selection to conduct dispute resolution. Providers and
facilities are thereafter required to furnish additional information to
the SDR entity within 10 business days after receiving notification of
SDR entity selection. This information must include: (1) A copy of the
good faith estimate provided to the uninsured (or self-pay) individual
for the items or services under dispute; (2) a copy of the bill
provided to the uninsured (or self-pay) individual for items or
services under dispute; and (3) documentation providing evidence to
demonstrate the difference between the billed charge and the expected
charges in the good faith estimate reflects a medically necessary item
or service and is based on unforeseen circumstances that could not have
reasonably been anticipated by the provider or facility when the good
faith estimate was provided. HHS estimates that it will take an average
of 1 hour for a general and operations manager to address these
requirements and send to the SDR entity. This results in an annual
equivalent cost estimate of $3,267,013.\300\
---------------------------------------------------------------------------
\300\ The burden is estimated as follows: 26,659 claims x 1 hour
= 26,659 hours. A labor rate of $101.32 is used for a general and
operations manager. The labor rate is applied in the following
calculation: 26,659 claims x 1 hour x $122.55 = $3,267,013. Total
burden hours are 26,659 hours.
---------------------------------------------------------------------------
These interim final rules require the SDR entity to assess the
information provided by the provider or facility according to the
standards described in 45 CFR 149.620(f) and discussed in section
VI.B.7 of the preamble. The SDR entity must respond within 30 days
after receipt information from the provider or facility to make
determinations on charges to the paid by the uninsured (or self-pay)
individual. HHS estimates that it will take an average of 2 hours for a
general and operations manager and 2 hours for a lawyer to assess the
merits of the submitted information and determine a prevailing party.
This results in an annual equivalent cost estimate of $14,049,622.\301\
---------------------------------------------------------------------------
\301\ The burden is estimated as follows: 26,659 claims x 2
hours = 53,317 hours. A labor rate of $122.55 is used for a general
and operations manager. The labor rate is applied in the following
calculation: 26,659 claims x 2 hours x $122.55 = $6,534,026. The
burden for legal review is estimated as follows: 26,659 claims x 2
hours = 53,317 hours. A labor rate of $140.96 is used for a lawyer.
The labor rates are applied in the following calculation: 53,317 x 2
hours x $140.96 = $7,515,596. The total annual respond time cost
estimates are calculated as follows: $6,534,026 + $7,515,596 =
$14,049,622. The total annual burden hours are 106,634 hours.
Table 46--Estimated Annual Burden To Assess the Submitted Information and Determine a Prevailing Party
----------------------------------------------------------------------------------------------------------------
Estimated Burden per
Estimated number of respondents number of response Total annual Total estimated
responses (hours) burden (hours) cost
----------------------------------------------------------------------------------------------------------------
26,659...................................... 26,659 4 106,634 $14,049,622
----------------------------------------------------------------------------------------------------------------
HHS estimates that it will take an average of 30 minutes for an SDR
entity's general and operations manager to notify parties of the IDR
determination. This results in an annual equivalent cost estimate of
$1,633,506.\302\
---------------------------------------------------------------------------
\302\ The burden is estimated as follows: 26,659 claims x 0.50
hours = 13,329 hours. A labor rate of $122.55 is used for a general
and operations manager. The labor rate is applied in the following
calculation: 26,659 claims x 0.50 hours x $122.55 = $1,633,506.
---------------------------------------------------------------------------
The SDR entity must also submit the administrative fee to the
Secretary of HHS on behalf of uninsured (or self-pay) individuals. This
burden includes time to review instructions, search existing data
resources, gather data needed, and complete and review information
collection. HHS estimates that the time required to complete and submit
this information collection is estimated to average a clerical worker
1.5 hours per month (or 18 hours annually), with a total annual cost of
$2,982.42, as shown in Table 47.\303\ HHS estimates the total annual
ongoing costs associated with the implementation and administration of
the patient-provider dispute resolution program, including system
maintenance, and program support, is estimated to be 12.6 million this
cost will be offset by the collection of the $25 administrative fee,
resulting in a total anticipated collection of $655,475 and a total
annual cost to the Federal Government of $12 million.
---------------------------------------------------------------------------
\303\ The burden is estimated as follows: A labor rate of $55.23
is used for a clerical worker. The labor rate is applied in the
following calculation: 3 annual responses x 18 hours x $55.23 =
$2,982.42.
[[Page 56084]]
Table 47--Estimated Annual Burden and Cost Related to SDR Submission of the Administrative Fee to HHS
----------------------------------------------------------------------------------------------------------------
Total annual
burden (1.5 Annual cost per Annual cost for
Estimated number of responses hours x 12 IDR entity all responses
months)
----------------------------------------------------------------------------------------------------------------
3............................................................ 18 994.14 $2,982.42
----------------------------------------------------------------------------------------------------------------
Summary
The total annual burden associated with the patient-provider
dispute resolution process for uninsured (or self-pay) individuals and
providers and facilities is 255,524 hours with an equivalent cost of
$29,764,646, as shown in Table 48.\304\ HHS invites comment on the
assumptions and calculations made in this ICR.
---------------------------------------------------------------------------
\304\ The total estimated cost burden is the sum of $3,789,694
(the cost for uninsured or self-pay individuals and authorized
representatives to write, prepare and send the initiation notice for
the patient-provider dispute resolution to the Secretary of HHS,
including resubmission costs) + $7,024,811 (the cost for SDR
entities to attest whether a Conflict of Interest exists with the
uninsured or self-pay individual, provider or facility) + $3,267,013
(the cost for uninsured or self-pay individuals and providers or
facilities to furnish additional information to selected SDR
entities) + $14,049,622 (the cost for the SDR entity to carry out
the dispute outcome analysis for uninsured or self-pay individuals
and providers and facilities) + 1,633,506 (the cost for the SDR
entity to notify the parties of the SDR entity's determination) =
$29,764,646. These costs represent 13.5 burden hours.
Table 48--Annual Burden and Cost Related to Patient-Provider Dispute Resolution Process for Uninsured (Self-Pay)
Individuals and Providers and Facilities
----------------------------------------------------------------------------------------------------------------
Estimated Burden per
Estimated number of respondents number of response Total annual Total estimated
responses (hours) burden (hours) cost
----------------------------------------------------------------------------------------------------------------
26,659...................................... 26,659 13.50 255,524 $29,764,646
----------------------------------------------------------------------------------------------------------------
9. ICRs Regarding Patient-Provider Dispute Resolution Entity
Certification (45 CR 149.620)
An SDR entity contracted by HHS must be certified under standards
and procedures set forth in 45 CFR 149.620(d). HHS estimates that there
will be between 1 and 3 entities that HHS contracts with to be an SDR
entity.
To be an SDR entity, the entity will need to establish the
processes and complete the corresponding paperwork. HHS estimates that
on average it will take a general and operations manager 5 hours and
medical secretary and administrative assistant 15 minutes to satisfy
the requirement. As shown in Table 49, this result in an equivalent
cost burden of $1,554 in the first year.\305\
---------------------------------------------------------------------------
\305\ The burden is estimated as follows: (3 SDR entities x 5
hours) + (3 SDR entities x 0.25 hours) = 15.75 hours. A labor rate
of $101.32 is used for a general and operations manager and a labor
rate of $46.07 is used for a medical secretary and administrative
assistant. The labor rates are applied in the following calculation:
(3 SDR entities x 5 hours x $101.32) + (3 SDR entities x 0.25 hours
x $46.07) = $1,554.
Table 49--Estimated First Year One-Time Cost Annual Burden and Cost Related to Patient-Provider SDR Entity
Certification Process Cost Related to Patient-Provider Dispute Resolution Process
----------------------------------------------------------------------------------------------------------------
Estimated Burden per
Estimated number of respondents number of response Total annual Total estimated
responses (hours) burden (hours) cost
----------------------------------------------------------------------------------------------------------------
3........................................... 3 5.25 15.75 $1,873
----------------------------------------------------------------------------------------------------------------
HHS estimates that on average one-third of SDR entities (i.e., one
of the three contracted organizations) will need to be recertified or
reapproved, through the contracting process, each year and that on
average it will take a general and operations manager 2 hours and
medical secretary and administrative assistant 15 minutes to satisfy
the requirement. This results in an equivalent cost burden of
$257.\306\
---------------------------------------------------------------------------
\306\ The burden is estimated as follows: (1 SDR entities x 2
hours) + (1 SDR entities x 0.25 hours) = 2.25 hours. A labor rate of
$122.55 is used for a general and operations manager and a labor
rate of $46.07 is used for medical secretary and administrative
assistant. The labor rates are applied in the following calculation:
(1 SDR entities x 2 hours x $122.55) + (1 SDR entities x 0.25 hours
x $46.07) = $257.
---------------------------------------------------------------------------
The total annual burden associated with the SDR entity
certification is 16 hours with an equivalent cost of $1,873. In
subsequent years, the total hour burden associated with the SDR entity
certification or recertification is 2.25 hours with an equivalent cost
of $257. HHS will assess whether the SDR entity's meets the
certification standards as discussed in section VI.B.5. of this
preamble as part of contracting per the contract period. HHS invites
comment on the assumptions and calculations made in this ICR.
[[Page 56085]]
Table 50--Annual Burden and Cost Related to SDR Entity Re-Certification Process
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Estimated Burden per
Year number of number of response Total annual Total estimated
respondents responses (hours) burden (hours) cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2023............................................................... 1 1 2.25 2.25 $257
--------------------------------------------------------------------------------------------------------------------------------------------------------
10. Summary
The total hour burden in the first six months associated with the
Federal IDR process is 3,400,460 hours with an equivalent cost burden
of $366,082,073. The total annual hour burden associated with the
Federal IDR process is 4,972,056 hours with an equivalent cost burden
of $518,688,160.
The Departments assume that half of the burden associated with the
required notices will be allocated to plans, issuers, and FEHB carriers
and the other half of the burden will be allocated to providers,
facilities, and providers of air ambulance services. The burden of the
plans, issuers, and FEHB carriers will be allocated toward the hour
burden of DOL, the Department of the Treasury, and OPM, and the burden
of the providers will be allocated toward the hour burden of HHS. The
burden of IDR entities will be fully allocated toward the cost burden.
The total annual hour burden in the first six months associated
with the Federal IDR process associated with HHS requirements is
estimated to be 3,327,917 hours with an equivalent cost burden of
$358,970,847. The total annual hour burden is 4,826,970 hours with an
equivalent cost burden of $504,465,709.
The total annual hour burden in the first six months associated
with the Federal IDR process associated with DOL requirements is
estimated to be estimated to be 32,974 hours with an equivalent cost of
$3,232,375. The total annual hour burden is 65,948 hours with an
equivalent cost burden of $6,464,751.
The total annual hour burden in the first six months associated
with the Federal IDR process for the Department of the Treasury is
estimated to be 32,974 hours with an equivalent cost of $3,232,375. The
total annual hour burden is estimated to be 65,948 hours with an
equivalent cost burden of $6,464,751.
The total annual hour burden in the first six months associated
with the Federal IDR process for OPM is estimated to be 6,595 hours
with an equivalent cost of $646,475. The total annual hour burden is
estimated to be 13,190 hours with an equivalent cost burden of
$1,292,950.
In terms of the cost burden, the total cost burden in the first six
months associated with the Federal IDR process is $610,675. The first
year associated with the Federal IDR process is $1,206,242. In
subsequent years, the total cost burden associated with the Federal IDR
process is $1,143,314. Thus, the 3-year average cost burden is
$1,164,290.
The Departments classify the burden born by IDR entities and
certified IDR entities as a cost burden. For certification, re-
certification, and monthly reporting requirements, 45 percent of the
burden will be allocated toward the cost burden of HHS, while DOL and
the Department of the Treasury will each be allocated 25 percent of the
burden, and OPM will be allocated 5 percent of the burden. As shown in
Table 51, for HHS requirements, the total cost burden associated with
the Federal IDR process in the first six months is $392,214. The total
cost burden in the first year is estimated to be $784,429 and in
subsequent years, the total cost burden associated with the Federal IDR
process is estimated to be $735,318. Thus, the 3-year average cost
burden associated with HHS requirements is $751,688.
As shown in Table 52, for DOL requirements, the total cost burden
associated with the Federal IDR process in the first six months is
$99,300. The total cost burden in the first year is estimated to be
$191,734 and in subsequent years, the total cost burden associated with
the Federal IDR process is estimated to be $185,452. Thus, the 3-year
average cost burden associated with DOL requirements is $187,546.
As shown in Table 52, for the Department of the Treasury
requirements, the total cost burden associated with the Federal IDR
process in the first six months is $99,300. The total cost burden in
the first year is estimated to be $191,734 and in subsequent years, the
total cost burden associated with the Federal IDR process is estimated
to be $185,452. Thus, the 3-year average cost burden associated with
the Department of the Treasury requirements is $187,546.
As shown in Table 53, for OPM requirements, the total cost burden
associated with the Federal IDR process in the first six months is
$19,860. The total cost burden in the first year is estimated to
$38,347 and in subsequent years, the total cost burden associated with
the Federal IDR process is estimated to be $37,090. Thus, the 3-year
average cost burden associated with OPM requirements is $37,509.
Table 51--HHS Summary Table
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Estimated Burden per Total
Year number of number of response Total annual estimated Total
respondents responses (hours) burden (hours) labor cost estimated cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022.................................................... 4,059,610 4,103,368 1.1763434 4,826,970 $504,465,709 $784,429
2023.................................................... 4,059,610 4,103,368 1.1763434 4,826,970 504,465,709 735,318
2024.................................................... 4,059,610 4,103,368 1.1763434 4,826,970 504,465,709 735,318
3 Year Average...................................... 4,059,610 4,103,368 1.1763434 4,826,970 504,465,709 751,688
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 52--DOL's and Department of the Treasury's Summary Table
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Estimated Burden per Total
Year number of number of response Total annual estimated Total
respondents responses (hours) burden (hours) labor cost estimated cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022.................................................... 22,257 36,675 1.7981697 65,948 $6,464,751 $191,734
[[Page 56086]]
2023.................................................... 22,257 36,675 1.7981697 65,948 6,464,751 185,452
2024.................................................... 22,257 36,675 1.7981697 65,948 6,464,751 185,452
3 Year Average...................................... 22,257 36,675 1.7981697 65,948 6,464,751 187,546
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 53--OPM's Summary Table
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Estimated Burden per Total
Year number of number of response Total annual estimated Total
respondents responses (hours) burden (hours) labor cost estimated cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022.................................................... 22,257 5,986 2.2034535 13,190 $1,292,950 $38,347
2023.................................................... 22,257 5,986 2.2034535 13,190 1,292,950 37,090
2024.................................................... 22,257 5,986 2.2034535 13,190 1,292,950 37,090
3 Year Average...................................... 22,257 5,986 2.2034535 13,190 1,292,950 37,509
--------------------------------------------------------------------------------------------------------------------------------------------------------
These paperwork burden estimates are summarized as follows:
Agency: Centers for Medicare & Medicaid Services, Department of
Health and Human Services.
Type of Review: New collection.
Title: Surprise Medical Billing: Independent Dispute Resolution.
OMB Control Number: 0938-NEW.
Affected Public: Businesses or other for-profits; not-for-profit
institutions.
Estimated Number of Respondents: 4,059,610.
Estimated Number of Annual Responses: 4,103,368.
Frequency of Response: Occasionally.
Estimated Total Annual Burden Hours: 4,826,970 (3,327,917 during
the first six months).
Estimated Total Annual Burden Cost: $751,688 ($392,214 during the
first six months).
Agency: Employee Benefits Security Administration, Department of
Labor.
Type of Review: New collection.
Title: Surprise Medical Billing: Independent Dispute Resolution.
OMB Control Number: 1210-New.
Affected Public: Businesses or other for-profits; not-for-profit
institutions.
Estimated Number of Respondents: 22,257.
Estimated Number of Annual Responses: 36,675.
Frequency of Response: Occasionally.
Estimated Total Annual Burden Hours: 65,948 (32,974 during the
first six months).
Estimated Total Annual Burden Cost: $187,546 ($99,300 during the
first six months).
Agency: Internal Revenue Service, Department of the Treasury.
Type of Review: New collection.
Title: Surprise Medical Billing: Independent Dispute Resolution.
OMB Control Number: 1545-New.
Affected Public: Businesses or other for-profits; not-for-profit
institutions.
Estimated Number of Respondents: 22,257
Estimated Number of Annual Responses: 36,675.
Frequency of Response: Occasionally.
Estimated Total Annual Burden Hours: 65,948 (32,974 during the
first six months).
Estimated Total Annual Burden Cost: $187,546 ($99,300 during the
first six months).
Agency: Office of Personnel Management.
Type of Review: New collection.
Title: Surprise Medical Billing: Independent Dispute Resolution.
OMB Control Number: NEW.
Affected Public: Businesses or other for-profits; not-for-profit
institutions.
Estimated Number of Respondents: 22,257.
Estimated Number of Annual Responses: 5,986.
Frequency of Response: Occasionally.
Estimated Total Annual Burden Hours: 13,190 (6,595 during the first
six months).
Estimated Total Annual Burden Cost: $37,509 ($19,860 during the
first six months).
11. ICRs Regarding Internal Claims and Appeals and External Review
Requirements for Non- Grandfathered Plans and Grandfathered Plans--
Applicability (26 CFR 54.9815-2719, 29 CFR 2590.715-2719, and 45 CFR
147.136)
The No Surprises Act extends the protections related to external
reviews to grandfathered plans. Grandfathered plans must comply either
with a state external review process or a Federal review process. The
disclosure requirements of the Federal external review process require:
(1) A preliminary review by plans of requests for external review; (2)
IROs to notify claimants of eligibility and acceptance for external
review; (3) the plan or issuer to provide IROs with documentation and
other information considered in making adverse benefit determination;
(4) the IRO to forward to the plan or issuer any information submitted
by the claimant; (5) plans to notify the claimant and IRO if it
reverses its decision; (6) the IRO to provide notice of the final
external review decision to the claimant and plan; and (7) the IRO to
maintain records for six years.
The Departments already have an existing information collection on
the claim, appeals, and external review requirements for non-
grandfathered plans (1210-0144). Due to these interim final rules, the
Departments have added the burden associated with the external review
requirements for grandfathered plans and non-grandfathered plans in the
information collection. The burden associated with the additional
standards that non-grandfathered and grandfathered ERISA-covered plans
must meet is shared equally between the Department of Labor and the
Department of the Treasury. The burden associated with the additional
standards that non-grandfathered and grandfathered non-Federal
governmental plans and individual market policies must meet is assigned
to the Department of Health and Human Services.
The Departments estimate that there are approximately 84.4 million
participants in self-insured ERISA-covered plans. Prior to the interim
final rules, the Departments estimate that there are approximately 8.1
million participants in ERISA-covered plans in
[[Page 56087]]
the states which have no external review laws or whose laws do not meet
the Federal minimum requirements.\307\ These estimates lead to a total
of 92.5 million participants. Among the 92.5 million participants, 80.5
million participants in non-grandfathered plans and 12 million
participants in grandfathered plans will be required to be covered by
the external review requirement.
---------------------------------------------------------------------------
\307\ These states are Alabama, Florida, Georgia, Pennsylvania,
Texas, and Wisconsin. See Affordable Care Act: Working with States
to Protect Consumers, available at https://www.cms.gov/CCIIO/Resources/Files/external_appeals.html. https://www.cms.gov/CCIIO/Resources/Files/external_appeals.html.
---------------------------------------------------------------------------
The Departments estimate that there are approximately 1.3 external
reviews for every 10,000 participants \308\ and that there will be
approximately 12,275 external reviews annually. Experience from North
Carolina indicates that about 75 percent of requests for external
reviews are actually eligible to proceed to an external review,\309\
therefore it is expected that there will be about 16,261 (12,275/
0.7549) requests for external review. In addition, a 2 percent increase
in the number of out-of-networks claims was incorporated in the
estimate to capture the increase in burden on non-grandfathered plans
resulting from the surprise billing and cost sharing protections of the
external review.
---------------------------------------------------------------------------
\308\ AHIP Center for Policy and Research, ``An Update on State
External Review Programs, 2006,'' July 2008.
\309\ North Carolina Department of Insurance. ``Health Insurance
Smart NC: Annual Report on External Review Activity 2013.'' https://digital.ncdcr.gov/digital/collection/p249901coll22/id/730531.
---------------------------------------------------------------------------
As shown in Table 54, the hour burden related to the preliminary
review by grandfathered and non-grandfathered plans subject to ERISA of
the request for external review is estimated to be 4,0655 hours (16,261
* 0.25 hours) with an equivalent cost of $373,303 (4,065 hours *
$91.83). The Departments assume that plans have a human resources
specialist with a labor rate of $91.83. The human resource specialist
will spend an average of 15 minutes for each of the requests, for a
plan to make an eligibility determination. Plans will already have
conducted internal reviews for eligible claimants; therefore, the
required information for plans to make this determination should be
readily available. Additionally, plans will incur material costs of
$0.05 for paper and printing and $0.55 for postage for each request for
external review, resulting in a cost of $9,756 (16,261 * $0.60).
Table 54--Annual Burden and Cost for Plans To Conduct a Preliminary Review of the Request for the External Review Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Total
Year number of Total annual estimated Other costs Total
responses burden (hours) labor cost estimated cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022............................................................... 16,261 4,065 $373,303 $9,756 $383,060
--------------------------------------------------------------------------------------------------------------------------------------------------------
Once an eligibility determination is made, plans must provide the
IRO with all documentation and other information considered in making
an adverse benefit determination. The Departments assume that plans
have clerical staff with a labor rate of $55.23. The clerical staff
will spend an average of 5 minutes for each of the requests for a plan
to send documentation to the IRO. As shown in Table 55, for the 12,275
verified requests for external review the hour burden for grandfathered
and non-grandfathered plans is estimated as 1,023 hours (12,275 * 5
minutes), with an equivalent cost of $56,494 (1,023 * $55.23).
Additionally, plans will incur material costs of $0.05 for each sheet
of paper. The Departments assume that each set of documentation will be
20 pages. Plans will also incur a cost of $0.55 for postage for each
set of documentation, resulting in a cost burden of $19,026 (12,275 x
$0.05 x 20 + 12,275 * $0.55). The Departments estimate that this will
cost, on average, $1.55 per claimant.
Table 55--Annual Burden and Cost for Plans To Provide the IRO With Documentation Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Total
Year number of Total annual estimated Other costs Total
responses burden (hours) labor cost estimated cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022............................................................... 12,275 1,023 $56,494 $19,026 $75,519
--------------------------------------------------------------------------------------------------------------------------------------------------------
IROs must also send each eligible claimant a notice of eligibility
and acceptance. The Departments assume that the IRO has clerical staff
with a labor rate of $55.23 that will spend, on average 5 minutes per
claimant preparing the notice, and that IROs incur an average cost of
$0.60 to print and mail the notice. As shown in Table 56, for the
12,275 verified requests for external review, the cost burden for the
clerical worker to send the notice of eligibility and acceptance is
estimated to be $56,493 (12,275 x 5 minutes x $55.23). Additionally,
IROs will incur material costs of $0.05 for each sheet of paper. The
Departments assume that each notice of eligibility and acceptance will
be 1 page. Plans will also incur a cost of $0.55 for postage for each
set of documentation, resulting in a cost of $7,365 (12,275 x $0.05 +
12,275 * $0.55). Thus, the total cost burden relating to the notice of
eligibility and acceptance is $63,858.
[[Page 56088]]
Table 56--Annual Burden and Cost for IROs To Send Notices of Eligibility and Acceptance Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Total
Year number of Total annual estimated Other costs Total
responses burden (hours) labor cost estimated cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022............................................................... 12,275 0 $0 $63,858 $63,858
--------------------------------------------------------------------------------------------------------------------------------------------------------
IROs are required to send to plans all documents that claimants
submit. The Departments do not know what fraction of claimants will
submit additional documentation, but for purposes of this burden
analysis assume that half of claimants (6,137) do. The Departments
assume that the IRO has clerical staff with a labor rate of $55.23 that
will spend, on average 5 minutes per claimant preparing and forwarding
the required documents, and that IROs incur an average cost of $1.05 to
print and mail the documents. As shown in Table 57, for the 6,137
verified requests for external review, the cost burden for the clerical
worker to send the claimants' documentation to the plans is estimated
to be $28,247 (6,137 x 5 minutes x $55.23). Additionally, IROs will
incur material costs of $0.05 for each sheet of paper. The Departments
assume that such documentation will be 10 pages. Plans will also incur
a cost of $0.55 for postage for each set of documentation, resulting in
a cost of $6,444 (6,137 x $0.05 x 10 + 12,275 * $0.55). Thus, the total
cost burden relating to preparing and forwarding the required documents
is $34,691.
Table 57--Annual Burden and Cost for IROs To Send Plans All Documents That Claimants Submit Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Total
Year number of Total annual estimated Other costs Total
responses burden (hours) labor cost estimated cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022............................................................... 6,137 0 $0 $34,691 $34,691
--------------------------------------------------------------------------------------------------------------------------------------------------------
IROs are required to provide the notice of the final external
review decision to the claimant and plan. The Departments estimate that
preparing and sending the notices for each of the 12,275 external
reviews will take IRO clerical staff, with a labor rate of $55.23, on
average 5 minutes per claimant, and that IROs will incur an average
cost of $1.05 to mail the documents. As shown in Table 58, for the
12,275 verified requests for external review, the cost burden for the
clerical worker to send the notice is estimated to be $56,494 (12,275 x
5 minutes x $55.23). Additionally, IROs will incur material costs of
$0.05 for each sheet of paper. The Departments assume that such
documentation will be 10 pages. Plans will also incur a cost of $0.55
for postage for each set of documentation, resulting in a cost of
$12,888 (12,275 x $0.05 x 10 + 12,275 * $0.55). Thus, the total cost
burden relating to notifying the claimant and plan of the final
external review decision is $69,382.
Table 58--Annual Burden and Cost for IROs To Notify the Claimant and Plan of the Result of the Final External Review Decision Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Total
Year number of Total annual estimated Other costs Total
responses burden (hours) labor cost estimated cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022............................................................... 12,275 0 $0 $69,382 $69,382
--------------------------------------------------------------------------------------------------------------------------------------------------------
IROs also are required to maintain records of all claims and
notices associated with the external review process for six years. The
Departments are of the view that these documents would be retained as a
customary part of business, but estimate that clerical staff will spend
on average an additional 5 minutes per claimant ensuring all files are
complete. As shown in Table 59, for the 12,275 verified requests for
external review, the cost burden for the clerical worker to maintain
records is estimated to be $56,494 (12,275 x 5 minutes x $55.23).
Table 59--Annual Burden and Cost for IROs To Maintain Record of All Claims and Notices Starting in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Total
Year number of Total annual estimated labor Other costs Total
responses burden (hours) cost estimated cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022............................................................... 12,275 0 $0 $56,494 $56,494
--------------------------------------------------------------------------------------------------------------------------------------------------------
The Departments estimate that the Federal external review process
will result in an hour burden of 5,088 hours with an equivalent cost of
$429,797 related to external reviews. The cost burden of approximately
$253,207 annually. The cost burden results from the cost associated
with preparing and
[[Page 56089]]
mailing required notices and documents.
The Departments are not able to estimate the number of reversals
and the associated notices to claimants and IROs that plans would send
due to reversing prior decisions, but the Departments are of the view
that the number would be small.
The existing information collection had an estimated hour burden of
1,394 hours with an equivalent cost of $97,616 and an estimated cost
burden by $3,002,150.
In summary, the total burden associated the information collection
for DOL and the Department of the Treasury, including the existing
collection, is approximately 6,482 hours at an equivalent cost of
$527,413 annually. The cost burden is approximately $3,255,357
annually. Because the burden is shared equally between the DOL and the
Department of the Treasury, the DOL's share is 3,241 hours at an
equivalent cost of $263,706 annually. The DOL's share of the cost
burden is $1,627,679 annually. The summary of burden for DOL and the
Department of the Treasury's information collection has also been
provided below.
Table 60--DOL and Department of the Treasury's Summary Table
----------------------------------------------------------------------------------------------------------------
Estimated Total annual Total Total
Year number of burden estimated Other costs estimated
responses (hours) labor cost cost
----------------------------------------------------------------------------------------------------------------
2022............................ 381,826 3,241 $263,706 $1,627,679 $1,891,385
2023............................ 381,826 3,241 263,706 1,627,679 1,891,385
2024............................ 381,826 3,241 263,706 1,627,679 1,891,385
3 Year Average.............. 381,826 3,241 263,706 1,627,679 1,891,385
----------------------------------------------------------------------------------------------------------------
HHS estimates that there are approximately 13.5 million individual
market enrollees and 19.3 million non-Federal governmental plans
enrollees.\310\ These estimates lead to a total of 32.8 million total
enrollees in individual market and non-Federal Government plans. Among
the 32.8 million participants, 2.6 million are in grandfathered plans
and 30.1 million are in non-grandfathered plans. HHS also added a two
percent increase in the number of out-of-networks claims to capture the
increase in burden on non-grandfathered plans resulting from the
surprise billing and cost sharing protections of the external review
resulting in an adjusted total of 30.7 million for non-grandfathered
plans and an adjusted total of 33.3 million for all individual market
and non-Federal Government plans.
---------------------------------------------------------------------------
\310\ Individual market data is based on data from MLR annual
report for the 2019 MLR reporting year, available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr. Non-federal
government plans data from Agency for Healthcare Research and
Quality, Center for Financing, Access and Cost Trends. 2019 Medical
Expenditure Panel Survey-Insurance Component.
---------------------------------------------------------------------------
HHS also estimates there are an estimated 1.3 external reviews for
every 10,000 participants and that there will be approximately 4,337
total external reviews annually for individual market and non-Federal
Government plans. This amount includes 3,994 reviews for non-
grandfathered plans and 343 for grandfathered plans. Experience from
North Carolina indicates that about 75 percent of requests for external
reviews are actually eligible to proceed to an external review,
therefore it is expected that there will be about 5,783 requests for
external review. This amount includes 5,326 requests for non-
grandfathered plans and 457 requests for grandfathered plans.
HHS estimated the burden for the disclosure requirements of the
Federal external review process to align with the methodologies used to
calculate the amounts in Tables 54 through 59. As shown in Table 61,
HHS estimates that the disclosure requirements will require 3,066
burden hours that result in $222,224 in estimated labor costs and
$19,625 in other costs for printing and mailing. The total estimated
updated burden for Federal external review to individual market and
non-Federal Government plans is $241,850. This amount includes $222,729
in costs for non-grandfathered plans and $19,121 for grandfathered
plans. The existing collection for HHS for Federal external review is
$128,876.
Table 61--HHS' Summary Table New Collection Burden for Federal External Review
----------------------------------------------------------------------------------------------------------------
Estimated Total annual Total Total
Year number of burden estimated Other costs estimated
responses (hours) labor cost cost
----------------------------------------------------------------------------------------------------------------
2022............................ 5,783 3,066 $222,224 $19,625 $241,850
2023............................ 5,783 3,066 222,224 19,625 241,850
2024............................ 5,783 3,066 222,224 19,625 241,850
3 Year Average.............. 5,783 3,066 222,224 19,625 241,850
----------------------------------------------------------------------------------------------------------------
Summary of Burden
Type of Review: Revised Collection.
Agency: DOL-EBSA.
Title: Affordable Care Act Internal Claims and Appeals and External
Review Procedures for Plans.
OMB Numbers: 1210-0144.
Affected Public: Businesses or other for-profits, Not-for-profit
institutions.
Estimated Number of Respondents: 2,524,241.
Estimated Number of Annual Responses: 381,826.
Frequency of Response: Occasionally.
Estimated Total Annual Burden Hours: 3,241.
Estimated Total Annual Burden Cost: $1,627,679.
Type of Review: Revised Collection.
Agency: Treasury--IRS.
Title: Affordable Care Act Internal Claims and Appeals and External
Review Procedures for Plans.
OMB Numbers: 1545-2182.
Affected Public: Businesses or other for-profits, Not-for-profit
institutions.
Estimated Number of Respondents: 2,524,241.
[[Page 56090]]
Estimated Number of Annual Responses: 381,826.
Frequency of Response: Occasionally.
Estimated Total Annual Burden Hours: 3,241.
Estimated Total Annual Burden Cost: $1,627,679.
Type of Review: Revised Collection.
Agency: Centers for Medicare & Medicaid Services, Department of
Health and Human Services.
Title: Affordable Care Act Internal Claims and Appeals and External
Review Procedures for Plans.
OMB Numbers: 0938-1099.
Affected Public: Businesses or other for-profits, Not-for-profit
institutions.
Estimated Number of Respondents: 5,783.
Estimated Number of Annual Responses: 5,783.
Frequency of Response: Occasionally.
Estimated Total Annual Burden Hours: 3,066.
Estimated Total Annual Burden Cost: $241,850.
D. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes
certain requirements with respect to Federal rules that are (1)
required to be published as a notice of proposed rulemaking subject to
the notice and comment requirements of the Administrative Procedure Act
(5 U.S.C. 553(b)) and (2) likely to have a significant economic impact
on a substantial number of small entities. The RFA generally defines a
``small entity'' as (1) a proprietary firm meeting the size standards
of the Small Business Administration (SBA), (2) a not-for-profit
organization that is not dominant in its field, or (3) a small
government jurisdiction with a population of less than 50,000. States
and individuals are not included in the definition of ``small entity.''
The Departments use a change in revenues of more than 3 to 5 percent as
its measure of significant economic impact on a substantial number of
small entities.
These interim final rules are exempt from the RFA because the
Departments were not required to publish a notice of proposed
rulemaking. Therefore, the RFA does not apply and the Departments are
not required to either certify that the interim final rules will not
have a significant economic impact on a substantial number of small
entities or conduct a regulatory flexibility analysis. Nevertheless,
the Departments carefully considered the likely impact of the interim
final rules on small entities in connection with its assessment of the
interim final rules' cost and benefits under Executive Order 12866.
Table 58 summarizes the estimated costs on small issuers,
physicians, and providers of air ambulance services. The original
analysis was based on a cost per IDR payment determination basis. To
break down the cost to a per-entity basis, the Departments assume that
the distribution of per-entity costs is proportional to annual
receipts. The affected entities are estimated based on the SBA's size
standards. The size standards applied for issuers is North American
Industry Classification System (NAICS) 524114, for which a business
with less than $41.5 million in receipts is considered to be small. The
size standard applied for physicians is NAICS 62111, for which a
business with less than $12.0 million in receipts is considered to be
small.\311\
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\311\ U.S. Small Business Administration. ``Table of Size
Standards.'' (August 2019). https://www.sba.gov/document/support--table-size-standards.
Table 62--Summary of Estimates Costs on Small Entities
----------------------------------------------------------------------------------------------------------------
Aggregate
Affected small annual cost Annual cost
Affected entity entities \312\ for small per entity
entities \313\ \314\
----------------------------------------------------------------------------------------------------------------
Issuer.......................................................... 132 $714,065 $5,410
Physicians \315\................................................ 61,890 136,976,819 2,213
----------------------------------------------------------------------------------------------------------------
The Departments do not have the same level of data used in the
table above the air ambulance sub-sector and are of the view that this
sub-sector is likely to differ from the ambulance services industry as
a whole. In 2020, the total revenue of providers of air ambulance
services is estimated to be $4.2 billion with 1,073 businesses in the
industry.\316\ This results in an industry average of $3.9 million per
business. Accordingly, the Departments are of the view that most
providers of air ambulance services are likely to be small entities.
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\312\ For issuers, it is assumed that the size distribution
across establishments is the same for issuers as their respective
industry. For physicians, it is assumed that the size distribution
across employment is the same for physicians as the respective
industry. For more information, refer to the Affected Entities
section in the Regulatory Impact Analysis.
\313\ To estimate the proportion of the total costs that would
fall onto small entities, the Departments assume that the proportion
of costs is proportional to the industry receipts. The Departments
are of the view that this assumption is reasonable, as the number of
IDR payment determinations an entity is involved in is likely to be
proportional to the amount of business in which the entity is
involved. Applying data from the Census bureau of receipts by size
for each industry, the Departments estimate that small issuers will
incur 0.2 percent of the total costs incurred by all issuers, that
physicians in small offices will incur 36.8 percent of total costs
incurred by all physicians, and small providers of air ambulance
services will incur 31.0 percent of total costs incurred by all
providers of air ambulance services. (See Census Bureau. ``2017 SUSB
Annual Data Tables by Establishment Industry, Data by Enterprise
Receipt Size.'' (May 2021). https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html.)
\314\ The Annual Cost per Entity is calculated by dividing the
estimated Aggregate Annual Cost for Small Entities by the Estimated
Affected Small Entities.
\315\ The costs for physicians refers to the cost associated
with each physician. The Departments estimate that 140,270
physicians, on average, bill on an out-of-network basis and will be
affected by these interim final rules, but the Departments do not
have data on how many of the affected physicians are employed in
small offices. This analysis is based on the number physicians
affected, not the number of physician offices.
\316\ IBIS World. ``Air Ambulance Service Industry in the US--
Market Research Report.'' (December 2020). https://www.ibisworld.com/united-states/market-research-reports/air-ambulance-services-industry/.
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Additionally, this analysis also excludes certified IDR entities
and their respective costs, as the Departments do not have information
on how many certified IDR entities are likely to be small entities.
Consistent with the policy of the RFA, the Departments seek comment
regarding the impact of these interim final rules on small entities.
E. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires each Federal agency to prepare a written statement assessing
the effects of any Federal mandate in a proposed agency rule, or a
finalization of such a proposal, that may result in an expenditure of
$100 million or more (adjusted annually
[[Page 56091]]
for inflation with the base year 1995) in any one year by state, local,
and tribal governments, in the aggregate, or by the private
sector.\317\ However, Section 202 of UMRA does not apply to interim
final rules or non-notice rules issued under the `good cause' exemption
in 5 U.S.C. 553(b)(B).\318\ For purposes of the UMRA, this rule does
not include any Federal mandate that the Departments expect to result
in such expenditures by state, local, or tribal governments.
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\317\ 2 U.S.C. 1501 et seq. (1995).
\318\ See OMB, Memorandum for the Heads of Executive Departments
and Agencies, M-95-09, ``Guidance for Implementing Title II of
S.1,'' 1995, available at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/memoranda/1995-1998/m95-09.pdf.
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F. Federalism Statement
Executive Order 13132 outlines fundamental principles of Federalism
and requires Federal agencies to adhere to specific criteria when
formulating and implementing policies that have ``substantial direct
effects'' on the states, the relationship between the national
government and states, or on the distribution of power and
responsibilities among the various levels of government. Federal
agencies promulgating regulations that have Federalism implications
must consult with state and local officials and describe the extent of
their consultation and the nature of the concerns of state and local
officials in the preamble to the final rule.
In the Departments' view, these interim final rules have Federalism
implications because they have direct effects on the states, the
relationship between the national government and the states, or the
distribution of power and responsibilities among various levels of
government. State and local government health plans may be subject to
the Federal IDR process, where a specified state law does not apply.
Additionally, the No Surprises Act authorizes states to enforce the new
requirements, including those related to balance billing, with respect
to issuers, providers, facilities, and providers of air ambulance
services, with HHS enforcing only in cases where the state has notified
HHS that the state does not have the authority to enforce or is
otherwise not enforcing, or HHS has made a determination that a state
has failed to substantially enforce the requirements. However, in the
Departments' view, the Federalism implications of these interim final
rules are substantially mitigated because the Departments expect that
some states will have their own process for determining the total
amount payable under such a plan or coverage for emergency services and
to out-of-network providers at in-network facilities. Where a state has
such a specified state law, the state law, rather than the Federal IDR
process, will apply. The Departments anticipate that some states with
their own IDR process may want to change their laws or adopt new laws
in response to these interim final rules. The Departments anticipate
that these states will incur a small incremental cost when making
changes to their laws.
In general, ERISA section 514 supersedes state laws to the extent
that they relate to any covered employee benefit plan, including
covered group health plans, and preserves state laws that regulate
insurance, banking, or securities. While ERISA prohibits states from
regulating a plan as an insurance or investment company or bank, the
preemption provisions of ERISA section 731 and PHS Act section 2724
(implemented in 29 CFR 2590.731(a) and 45 CFR 146.143(a)) apply so that
requirements of Part 7 of ERISA and title XXVII of the PHS Act
(including those of the Affordable Care Act) are not to be ``construed
to supersede any provision of state law which establishes, implements,
or continues in effect any standard or requirement solely relating to
health insurance issuers in connection with group health insurance
coverage except to the extent that such standard or requirement
prevents the application of a requirement'' of a Federal standard. The
conference report accompanying HIPAA indicates that this is intended to
be the ``narrowest'' preemption of state laws.\319\ Additionally, the
No Surprises Act requires that when a state law determines the total
amount payable under such a plan, coverage, or issuer for emergency
services or to out-of-network providers at in-network facilities, such
state law will apply, rather than the Federal IDR process specified in
these regulations.
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\319\ See House Conf. Rep. No. 104-736, at 205, reprinted in
1996 U.S. Code Cong. & Admin. News 2018.
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In compliance with the requirement of Executive Order 13132 that
agencies examine closely any policies that may have Federalism
implications or limit the policy making discretion of the states, the
Departments have engaged in efforts to consult with and work
cooperatively with affected states, including participating in
conference calls with and attending conferences of the NAIC, and
consulting with state insurance officials on a state-by-state basis. In
addition, the Departments consulted with the NAIC, as required by the
No Surprises Act, to establish the geographic regions to be used in the
methodology for calculating the QPA as detailed in the July 2021
interim final rule.
While developing these interim final rules, the Departments and OPM
attempted to balance the states' interests in regulating health
insurance issuers, providers, and facilities with the need to ensure at
least the minimum Federal consumer protections in every state. By doing
so, the Departments and OPM complied with the requirements of Executive
Order 13132. The Departments welcome input from affected states
regarding this assessment.
G. Congressional Review Act
These interim final rules are determined to be major and are
subject to the Congressional Review Act provisions of the Small
Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et
seq.) and will be transmitted to the Congress and to the Comptroller
General for review in accordance with such provisions.
Laurie Bodenheimer,
Associate Director Healthcare and Insurance Office of Personnel
Management
Douglas W. O'Donnell,
Deputy Commissioner for Services and Enforcement, Internal Revenue
Service.
Lily L. Batchelder,
Assistant Secretary of the Treasury (Tax Policy).
Ali Khawar,
Acting Assistant Secretary, Employee Benefits Security Administration,
U.S. Department of Labor.
Xavier Becerra,
Secretary, Department of Health and Human Services.
Office of Personnel Management
5 CFR Chapter I
For the reasons stated in the preamble, the Office of Personnel
Management amends 5 CFR part 890 as follows:
PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM
0
1. The authority citation for part 890 continues to read as follows:
Authority: 5 U.S.C. 8913; Sec. 890.102 also issued under
sections 11202(f), 11232(e), and 11246 (b) of Pub. L. 105-33, 111
Stat. 251; Sec. 890.111 also issued under section 1622(b) of Pub. L.
104-106, 110 Stat. 521 (36 U.S.C. 5522); Sec. 890.112 also issued
under section 1 of Pub. L. 110-279, 122 Stat. 2604 (2 U.S.C. 2051);
Sec. 890.113 also issued under section 1110 of Pub. L. 116-92, 133
Stat. 1198 (5 U.S.C. 8702 note); Sec. 890.301
[[Page 56092]]
also issued under section 311 of Pub. L. 111-3, 123 Stat. 64 (26
U.S.C. 9801); Sec. 890.302(b) also issued under section 1001 of Pub.
L. 111-148, 124 Stat. 119, as amended by Pub. L. 111-152, 124 Stat.
1029 (42 U.S.C. 300gg-14); Sec. 890.803 also issued under 50 U.S.C.
3516 (formerly 50 U.S.C. 403p) and 22 U.S.C. 4069c and 4069c-1;
subpart L also issued under section 599C of Pub. L. 101-513, 104
Stat. 2064 (5 U.S.C. 5561 note), as amended; and subpart M also
issued under section 721 of Pub. L. 105-261 (10 U.S.C. 1108), 112
Stat. 2061.
Subpart A--Administration and General Provisions
0
2. Amend Sec. 890.114 by revising paragraph (a) and adding paragraph
(d) to read as follows:
Sec. 890.114 Surprise billing.
(a) A carrier must comply with requirements described in 26 CFR
54.9816-3T through 54.9816-8T, 54.9817-1T, 54.9817-2T and 54.9822-1T;
29 CFR 2590.716-3 through 2590.716-8, 2590.717-1, 2590.717-2 and
2590.722; and 45 CFR 149.30, 149.110 through 149.140, 149.310, 149.510,
and 149.520, in the same manner as such provisions apply to a group
health plan or health insurance issuer offering group or individual
health insurance coverage, subject to 5 U.S.C. 8902(m)(1), and the
provisions of the carrier's contract. For purposes of application of
such sections, all carriers are deemed to offer health benefits in the
large group market.
* * * * *
(d)(1) In addition to notification to the Department per 26 CFR
54.9816-8T(b)(2)(iii), 29 CFR 2590.716-8(b)(2)(iii), and 45 CFR
149.510(b)(2)(iii), a carrier must notify the Director of its intent to
initiate the Federal IDR process, or its receipt of written notice that
a provider, facility, or provider of air ambulance services has
initiated the Federal IDR process, upon sending or receiving such
notice.
(2) The Director will coordinate with the Departments in resolving
matters under 26 CFR 54.9816-8T(c)(4)(vi)(A)(1), 29 CFR 2590.716-
8(c)(4)(vi)(A)(1), or 45 CFR 149.510(c)(4)(vi)(A)(1) where fraud or
misrepresentation are presented, and matters involving 26 CFR 54.9816-
8T(c)(4)(vii)(A)(2), 29 CFR 2590.716-8(c)(4)(vii)(A)(2), and 45 CFR
149.510(c)(4)(vii)(A)(2). The Director will coordinate with the
Departments in oversight of reports submitted by certified IDR entities
with respect to carriers pursuant to 26 CFR 54.9816-8T(f), 29 CFR
2590.716-8(f), or 45 CFR 149.510(f).
Department of the Treasury
Internal Revenue Service
26 CFR Chapter I
Accordingly, 26 CFR part 54 is amended as follows:
PART 54--PENSION EXCISE TAXES
0
3. The authority citation for part 54 continues to read, in part, as
follows:
Authority: 26 U.S.C. 7805, unless otherwise noted.
* * * * *
0
4. Section 54.9815-2719T is added to read as follows:
Sec. 54.9815-2719T Internal claims and appeals and external review
processes (temporary).
(a) Scope and definitions--(1) Scope--(i) In general. This section
sets forth requirements with respect to internal claims and appeals and
external review processes for group health plans and health insurance
issuers. Paragraph (b) of this section provides requirements for
internal claims and appeals processes. Paragraph (c) of this section
sets forth rules governing the applicability of State external review
processes. Paragraph (d) of this section sets forth a Federal external
review process for plans and issuers not subject to an applicable State
external review process. Paragraph (e) of this section prescribes
requirements for ensuring that notices required to be provided under
this section are provided in a culturally and linguistically
appropriate manner. Paragraph (f) of this section describes the
authority of the Secretary to deem certain external review processes in
existence on March 23, 2010, as in compliance with paragraph (c) or (d)
of this section.
(ii) Application to grandfathered health plans and health insurance
coverage. The provisions of this section generally do not apply to
coverage offered by health insurance issuers and group health plans
that are grandfathered health plans, as defined under Sec. 54.9815-
1251. However, the external review process requirements under
paragraphs (c) and (d) of this section, and related notice requirements
under paragraph (e) of this section, apply to grandfathered health
plans or coverage with respect to adverse benefit determinations
involving items and services within the scope of the requirements for
out-of-network emergency services, nonemergency services performed by
nonparticipating providers at participating facilities, and air
ambulance services furnished by nonparticipating providers of air
ambulance services under sections 9816 and 9817 and Sec. Sec. 54.9816-
4T through 54.9816-5T and 54.9817-1T.
(2) Definitions. For purposes of this section, the following
definitions apply--
(i) Adverse benefit determination. An adverse benefit determination
means an adverse benefit determination as defined in 29 CFR 2560.503-1,
as well as any rescission of coverage, as described in Sec. 54.9815-
2712(a)(2) (whether or not, in connection with the rescission, there is
an adverse effect on any particular benefit at that time).
(ii) Appeal (or internal appeal). An appeal or internal appeal
means review by a plan or issuer of an adverse benefit determination,
as required in paragraph (b) of this section.
(iii) Claimant. Claimant means an individual who makes a claim
under this section. For purposes of this section, references to
claimant include a claimant's authorized representative.
(iv) External review. External review means a review of an adverse
benefit determination (including a final internal adverse benefit
determination) conducted pursuant to an applicable State external
review process described in paragraph (c) of this section or the
Federal external review process of paragraph (d) of this section.
(v) Final internal adverse benefit determination. A final internal
adverse benefit determination means an adverse benefit determination
that has been upheld by a plan or issuer at the completion of the
internal appeals process applicable under paragraph (b) of this section
(or an adverse benefit determination with respect to which the internal
appeals process has been exhausted under the deemed exhaustion rules of
paragraph (b)(2)(ii)(F) of this section).
(vi) Final external review decision. A final external review
decision means a determination by an independent review organization at
the conclusion of an external review.
(vii) Independent review organization (or IRO). An independent
review organization (or IRO) means an entity that conducts independent
external reviews of adverse benefit determinations and final internal
adverse benefit determinations pursuant to paragraph (c) or (d) of this
section.
(viii) NAIC Uniform Model Act. The NAIC Uniform Model Act means the
Uniform Health Carrier External Review Model Act promulgated by the
National Association of Insurance Commissioners in place on July 23,
2010.
(b) Internal claims and appeals process--(1) In general. A group
health plan and a health insurance issuer offering group health
insurance
[[Page 56093]]
coverage must implement an effective internal claims and appeals
process, as described in this paragraph (b).
(2) Requirements for group health plans and group health insurance
issuers. A group health plan and a health insurance issuer offering
group health insurance coverage must comply with all the requirements
of this paragraph (b)(2). In the case of health insurance coverage
offered in connection with a group health plan, if either the plan or
the issuer complies with the internal claims and appeals process of
this paragraph (b)(2), then the obligation to comply with this
paragraph (b)(2) is satisfied for both the plan and the issuer with
respect to the health insurance coverage.
(i) Minimum internal claims and appeals standards. A group health
plan and a health insurance issuer offering group health insurance
coverage must comply with all the requirements applicable to group
health plans under 29 CFR 2560.503-1, except to the extent those
requirements are modified by paragraph (b)(2)(ii) of this section.
Accordingly, under this paragraph (b), with respect to health insurance
coverage offered in connection with a group health plan, the group
health insurance issuer is subject to the requirements in 29 CFR
2560.503-1 to the same extent as the group health plan.
(ii) Additional standards. In addition to the requirements in
paragraph (b)(2)(i) of this section, the internal claims and appeals
processes of a group health plan and a health insurance issuer offering
group health insurance coverage must meet the requirements of this
paragraph (b)(2)(ii).
(A) Clarification of meaning of adverse benefit determination. For
purposes of this paragraph (b)(2), an ``adverse benefit determination''
includes an adverse benefit determination as defined in paragraph
(a)(2)(i) of this section. Accordingly, in complying with 29 CFR
2560.503-1, as well as the other provisions of this paragraph (b)(2), a
plan or issuer must treat a rescission of coverage (whether or not the
rescission has an adverse effect on any particular benefit at that
time) as an adverse benefit determination. (Rescissions of coverage are
subject to the requirements of Sec. 54.9815-2712.)
(B) Expedited notification of benefit determinations involving
urgent care. The requirements of 29 CFR 2560.503-1(f)(2)(i) (which
generally provide, among other things, in the case of urgent care
claims for notification of the plan's benefit determination (whether
adverse or not) as soon as possible, taking into account the medical
exigencies, but not later than 72 hours after the receipt of the claim)
continue to apply to the plan and issuer. For purposes of this
paragraph (b)(2)(ii)(B), a claim involving urgent care has the meaning
given in 29 CFR 2560.503-1(m)(1), as determined by the attending
provider, and the plan or issuer shall defer to such determination of
the attending provider.
(C) Full and fair review. A plan and issuer must allow a claimant
to review the claim file and to present evidence and testimony as part
of the internal claims and appeals process. Specifically, in addition
to complying with the requirements of 29 CFR 2560.503-1(h)(2)--
(1) The plan or issuer must provide the claimant, free of charge,
with any new or additional evidence considered, relied upon, or
generated by the plan or issuer (or at the direction of the plan or
issuer) in connection with the claim; such evidence must be provided as
soon as possible and sufficiently in advance of the date on which the
notice of final internal adverse benefit determination is required to
be provided under 29 CFR 2560.503-1(i) to give the claimant a
reasonable opportunity to respond prior to that date; and
(2) Before the plan or issuer can issue a final internal adverse
benefit determination based on a new or additional rationale, the
claimant must be provided, free of charge, with the rationale; the
rationale must be provided as soon as possible and sufficiently in
advance of the date on which the notice of final internal adverse
benefit determination is required to be provided under 29 CFR 2560.503-
1(i) to give the claimant a reasonable opportunity to respond prior to
that date. Notwithstanding the rules of 29 CFR 2560.503-1(i), if the
new or additional evidence is received so late that it would be
impossible to provide it to the claimant in time for the claimant to
have a reasonable opportunity to respond, the period for providing a
notice of final internal adverse benefit determination is tolled until
such time as the claimant has a reasonable opportunity to respond.
After the claimant responds, or has a reasonable opportunity to respond
but fails to do so, the plan administrator shall notify the claimant of
the plan's benefit determination as soon as a plan acting in a
reasonable and prompt fashion can provide the notice, taking into
account the medical exigencies.
(D) Avoiding conflicts of interest. In addition to the requirements
of 29 CFR 2560.503-1(b) and (h) regarding full and fair review, the
plan and issuer must ensure that all claims and appeals are adjudicated
in a manner designed to ensure the independence and impartiality of the
persons involved in making the decision. Accordingly, decisions
regarding hiring, compensation, termination, promotion, or other
similar matters with respect to any individual (such as a claims
adjudicator or medical expert) must not be made based upon the
likelihood that the individual will support the denial of benefits.
(E) Notice. A plan and issuer must provide notice to individuals,
in a culturally and linguistically appropriate manner (as described in
paragraph (e) of this section) that complies with the requirements of
29 CFR 2560.503-1(g) and (j). The plan and issuer must also comply with
the additional requirements of this paragraph (b)(2)(ii)(E).
(1) The plan and issuer must ensure that any notice of adverse
benefit determination or final internal adverse benefit determination
includes information sufficient to identify the claim involved
(including the date of service, the health care provider, the claim
amount (if applicable), and a statement describing the availability,
upon request, of the diagnosis code and its corresponding meaning, and
the treatment code and its corresponding meaning).
(2) The plan and issuer must provide to participants and
beneficiaries, as soon as practicable, upon request, the diagnosis code
and its corresponding meaning, and the treatment code and its
corresponding meaning, associated with any adverse benefit
determination or final internal adverse benefit determination. The plan
or issuer must not consider a request for such diagnosis and treatment
information, in itself, to be a request for an internal appeal under
this paragraph (b) or an external review under paragraphs (c) and (d)
of this section.
(3) The plan and issuer must ensure that the reason or reasons for
the adverse benefit determination or final internal adverse benefit
determination includes the denial code and its corresponding meaning,
as well as a description of the plan's or issuer's standard, if any,
that was used in denying the claim. In the case of a notice of final
internal adverse benefit determination, this description must include a
discussion of the decision.
(4) The plan and issuer must provide a description of available
internal appeals and external review processes, including information
regarding how to initiate an appeal.
(5) The plan and issuer must disclose the availability of, and
contact
[[Page 56094]]
information for, any applicable office of health insurance consumer
assistance or ombudsman established under PHS Act section 2793 to
assist individuals with the internal claims and appeals and external
review processes.
(F) Deemed exhaustion of internal claims and appeals processes. (1)
In the case of a plan or issuer that fails to strictly adhere to all
the requirements of this paragraph (b)(2) with respect to a claim, the
claimant is deemed to have exhausted the internal claims and appeals
process of this paragraph (b), except as provided in paragraph
(b)(2)(ii)(F)(2) of this section. Accordingly the claimant may initiate
an external review under paragraph (c) or (d) of this section, as
applicable. The claimant is also entitled to pursue any available
remedies under section 502(a) of ERISA or under State law, as
applicable, on the basis that the plan or issuer has failed to provide
a reasonable internal claims and appeals process that would yield a
decision on the merits of the claim. If a claimant chooses to pursue
remedies under section 502(a) of ERISA under such circumstances, the
claim or appeal is deemed denied on review without the exercise of
discretion by an appropriate fiduciary.
(2) Notwithstanding paragraph (b)(2)(ii)(F)(1) of this section, the
internal claims and appeals process of this paragraph (b) will not be
deemed exhausted based on de minimis violations that do not cause, and
are not likely to cause, prejudice or harm to the claimant so long as
the plan or issuer demonstrates that the violation was for good cause
or due to matters beyond the control of the plan or issuer and that the
violation occurred in the context of an ongoing, good faith exchange of
information between the plan and the claimant. This exception is not
available if the violation is part of a pattern or practice of
violations by the plan or issuer. The claimant may request a written
explanation of the violation from the plan or issuer, and the plan or
issuer must provide such explanation within 10 days, including a
specific description of its bases, if any, for asserting that the
violation should not cause the internal claims and appeals process of
this paragraph (b) to be deemed exhausted. If an external reviewer or a
court rejects the claimant's request for immediate review under
paragraph (b)(2)(ii)(F)(1) of this section on the basis that the plan
met the standards for the exception under this paragraph
(b)(2)(ii)(F)(2), the claimant has the right to resubmit and pursue the
internal appeal of the claim. In such a case, within a reasonable time
after the external reviewer or court rejects the claim for immediate
review (not to exceed 10 days), the plan shall provide the claimant
with notice of the opportunity to resubmit and pursue the internal
appeal of the claim. Time periods for re-filing the claim shall begin
to run upon claimant's receipt of such notice.
(iii) Requirement to provide continued coverage pending the outcome
of an appeal. A plan and issuer subject to the requirements of this
paragraph (b)(2) are required to provide continued coverage pending the
outcome of an appeal. For this purpose, the plan and issuer must comply
with the requirements of 29 CFR 2560.503-1(f)(2)(ii), which generally
provides that benefits for an ongoing course of treatment cannot be
reduced or terminated without providing advance notice and an
opportunity for advance review.
(c) State standards for external review--(1) In general. (i) If a
State external review process that applies to and is binding on a
health insurance issuer offering group health insurance coverage
includes at a minimum the consumer protections in the NAIC Uniform
Model Act, then the issuer must comply with the applicable State
external review process and is not required to comply with the Federal
external review process of paragraph (d) of this section. In such a
case, to the extent that benefits under a group health plan are
provided through health insurance coverage, the group health plan is
not required to comply with either this paragraph (c) or the Federal
external review process of paragraph (d) of this section.
(ii) To the extent that a group health plan provides benefits other
than through health insurance coverage (that is, the plan is self-
insured) and is subject to a State external review process that applies
to and is binding on the plan (for example, is not preempted by ERISA)
and the State external review process includes at a minimum the
consumer protections in the NAIC Uniform Model Act, then the plan must
comply with the applicable State external review process and is not
required to comply with the Federal external review process of
paragraph (d) of this section. Where a self-insured plan is not subject
to an applicable State external review process, but the State has
chosen to expand access to its process for plans that are not subject
to the applicable State laws, the plan may choose to comply with either
the applicable State external review process or the Federal external
review process of paragraph (d) of this section.
(iii) If a plan or issuer is not required under paragraph (c)(1)(i)
or (ii) of this section to comply with the requirements of this
paragraph (c), then the plan or issuer must comply with the Federal
external review process of paragraph (d) of this section, except to the
extent, in the case of a plan, the plan is not required under paragraph
(c)(1)(i) of this section to comply with paragraph (d) of this section.
(2) Minimum standards for State external review processes. An
applicable State external review process must meet all the minimum
consumer protections in this paragraph (c)(2). The Department of Health
and Human Services will determine whether State external review
processes meet these requirements.
(i) The State process must provide for the external review of
adverse benefit determinations (including final internal adverse
benefit determinations) by issuers (or, if applicable, plans) that are
based on the issuer's (or plan's) requirements for medical necessity,
appropriateness, health care setting, level of care, or effectiveness
of a covered benefit, as well as a consideration of whether a plan or
issuer is complying with the surprise billing and cost-sharing
protections under sections 9816 and 9817 and Sec. Sec. 54.9816-1T
through 54.9816-6T and 54.9817-1T.
(ii) The State process must require issuers (or, if applicable,
plans) to provide effective written notice to claimants of their rights
in connection with an external review for an adverse benefit
determination.
(iii) To the extent the State process requires exhaustion of an
internal claims and appeals process, exhaustion must be unnecessary
where the issuer (or, if applicable, the plan) has waived the
requirement; the issuer (or the plan) is considered to have exhausted
the internal claims and appeals process under applicable law (including
by failing to comply with any of the requirements for the internal
appeal process, as outlined in paragraph (b)(2) of this section), or
the claimant has applied for expedited external review at the same time
as applying for an expedited internal appeal.
(iv) The State process provides that the issuer (or, if applicable,
the plan) against which a request for external review is filed must pay
the cost of the IRO for conducting the external review. Notwithstanding
this requirement, a State external review process that expressly
authorizes, as of November 18, 2015, a nominal filing fee may continue
to permit such fees. For this purpose, to be considered nominal, a
filing fee must not exceed $25; it must be refunded to the claimant if
the adverse benefit determination (or final
[[Page 56095]]
internal adverse benefit determination) is reversed through external
review; it must be waived if payment of the fee would impose an undue
financial hardship; and the annual limit on filing fees for any
claimant within a single plan year must not exceed $75.
(v) The State process may not impose a restriction on the minimum
dollar amount of a claim for it to be eligible for external review.
Thus, the process may not impose, for example, a $500 minimum claims
threshold.
(vi) The State process must allow at least four months after the
receipt of a notice of an adverse benefit determination or final
internal adverse benefit determination for a request for an external
review to be filed.
(vii) The State process must provide that IROs will be assigned on
a random basis or another method of assignment that assures the
independence and impartiality of the assignment process (such as
rotational assignment) by a State or independent entity, and in no
event selected by the issuer, plan, or the individual.
(viii) The State process must provide for maintenance of a list of
approved IROs qualified to conduct the external review based on the
nature of the health care service that is the subject of the review.
The State process must provide for approval only of IROs that are
accredited by a nationally recognized private accrediting organization.
(ix) The State process must provide that any approved IRO has no
conflicts of interest that will influence its independence. Thus, the
IRO may not own or control, or be owned or controlled by a health
insurance issuer, a group health plan, the sponsor of a group health
plan, a trade association of plans or issuers, or a trade association
of health care providers. The State process must further provide that
the IRO and the clinical reviewer assigned to conduct an external
review may not have a material professional, familial, or financial
conflict of interest with the issuer or plan that is the subject of the
external review; the claimant (and any related parties to the claimant)
whose treatment is the subject of the external review; any officer,
director, or management employee of the issuer; the plan administrator,
plan fiduciaries, or plan employees; the health care provider, the
health care provider's group, or practice association recommending the
treatment that is subject to the external review; the facility at which
the recommended treatment would be provided; or the developer or
manufacturer of the principal drug, device, procedure, or other therapy
being recommended.
(x) The State process allows the claimant at least five business
days to submit to the IRO in writing additional information that the
IRO must consider when conducting the external review, and it requires
that the claimant is notified of the right to do so. The process must
also require that any additional information submitted by the claimant
to the IRO must be forwarded to the issuer (or, if applicable, the
plan) within one business day of receipt by the IRO.
(xi) The State process must provide that the decision is binding on
the plan or issuer, as well as the claimant except to the extent the
other remedies are available under State or Federal law, and except
that the requirement that the decision be binding shall not preclude
the plan or issuer from making payment on the claim or otherwise
providing benefits at any time, including after a final external review
decision that denies the claim or otherwise fails to require such
payment or benefits. For this purpose, the plan or issuer must provide
benefits (including by making payment on the claim) pursuant to the
final external review decision without delay, regardless of whether the
plan or issuer intends to seek judicial review of the external review
decision and unless or until there is a judicial decision otherwise.
(xii) The State process must require, for standard external review,
that the IRO provide written notice to the issuer (or, if applicable,
the plan) and the claimant of its decision to uphold or reverse the
adverse benefit determination (or final internal adverse benefit
determination) within no more than 45 days after the receipt of the
request for external review by the IRO.
(xiii) The State process must provide for an expedited external
review if the adverse benefit determination (or final internal adverse
benefit determination) concerns an admission, availability of care,
continued stay, or health care service for which the claimant received
emergency services, but has not been discharged from a facility; or
involves a medical condition for which the standard external review
time frame would seriously jeopardize the life or health of the
claimant or jeopardize the claimant's ability to regain maximum
function. As expeditiously as possible but within no more than 72 hours
after the receipt of the request for expedited external review by the
IRO, the IRO must make its decision to uphold or reverse the adverse
benefit determination (or final internal adverse benefit determination)
and notify the claimant and the issuer (or, if applicable, the plan) of
the determination. If the notice is not in writing, the IRO must
provide written confirmation of the decision within 48 hours after the
date of the notice of the decision.
(xiv) The State process must require that issuers (or, if
applicable, plans) include a description of the external review process
in or attached to the summary plan description, policy, certificate,
membership booklet, outline of coverage, or other evidence of coverage
it provides to participants, beneficiaries, or enrollees, substantially
similar to what is set forth in section 17 of the NAIC Uniform Model
Act.
(xv) The State process must require that IROs maintain written
records and make them available upon request to the State,
substantially similar to what is set forth in section 15 of the NAIC
Uniform Model Act.
(xvi) The State process follows procedures for external review of
adverse benefit determinations (or final internal adverse benefit
determinations) involving experimental or investigational treatment,
substantially similar to what is set forth in section 10 of the NAIC
Uniform Model Act.
(3) Transition period for external review processes. (i) Through
December 31, 2017, an applicable State external review process
applicable to a health insurance issuer or group health plan is
considered to meet the requirements of PHS Act section 2719(b).
Accordingly, through December 31, 2017, an applicable State external
review process will be considered binding on the issuer or plan (in
lieu of the requirements of the Federal external review process). If
there is no applicable State external review process, the issuer or
plan is required to comply with the requirements of the Federal
external review process in paragraph (d) of this section.
(ii) An applicable State external review process must apply for
final internal adverse benefit determinations (or, in the case of
simultaneous internal appeal and external review, adverse benefit
determinations) provided on or after January 1, 2018. The Federal
external review process will apply to such internal adverse benefit
determinations unless the Department of Health and Human Services
determines that a State law meets all the minimum standards of
paragraph (c)(2) of this section. Through December 31, 2017, a State
external review process applicable to a health insurance issuer or
group health plan may be considered to meet the minimum standards of
paragraph (c)(2), if it meets the temporary standards established by
the
[[Page 56096]]
Secretary in guidance for a process similar to the NAIC Uniform Model
Act.
(d) Federal external review process. A plan or issuer not subject
to an applicable State external review process under paragraph (c) of
this section must provide an effective Federal external review process
in accordance with this paragraph (d) (except to the extent, in the
case of a plan, the plan is described in paragraph (c)(1)(i) of this
section as not having to comply with this paragraph (d)). In the case
of health insurance coverage offered in connection with a group health
plan, if either the plan or the issuer complies with the Federal
external review process of this paragraph (d), then the obligation to
comply with this paragraph (d) is satisfied for both the plan and the
issuer with respect to the health insurance coverage. A Multi State
Plan or MSP, as defined by 45 CFR 800.20, must provide an effective
Federal external review process in accordance with this paragraph (d).
In such circumstances, the requirement to provide external review under
this paragraph (d) is satisfied when a Multi State Plan or MSP complies
with standards established by the Office of Personnel Management.
(1) Scope.--(i) In general. The Federal external review process
established pursuant to this paragraph (d) applies to the following:
(A) An adverse benefit determination (including a final internal
adverse benefit determination) by a plan or issuer that involves
medical judgment (including, but not limited to, those based on the
plan's or issuer's requirements for medical necessity, appropriateness,
health care setting, level of care, or effectiveness of a covered
benefit; its determination that a treatment is experimental or
investigational; its determination whether a participant or beneficiary
is entitled to a reasonable alternative standard for a reward under a
wellness program; its determination whether a plan or issuer is
complying with the nonquantitative treatment limitation provisions of
Code section 9812 and Sec. 54.9812-1, which generally require, among
other things, parity in the application of medical management
techniques), as determined by the external reviewer. (A denial,
reduction, termination, or a failure to provide payment for a benefit
based on a determination that a participant or beneficiary fails to
meet the requirements for eligibility under the terms of a group health
plan or health insurance coverage is not eligible for the Federal
external review process under this paragraph (d));
(B) An adverse benefit determination that involves consideration of
whether a plan or issuer is complying with the surprise billing and
cost-sharing protections set forth in sections 9816 and 9817 and
Sec. Sec. 54.9816-4T through 54.9816-5T and 54.9817-1T; and
(C) A rescission of coverage (whether or not the rescission has any
effect on any particular benefit at that time).
(ii) Examples. The rules of paragraph (d)(1)(i) of this section are
illustrated by the following examples:
(A) Example 1--(1) Facts. A group health plan provides coverage for
30 physical therapy visits generally. After the 30th visit, coverage is
provided only if the service is preauthorized pursuant to an approved
treatment plan that takes into account medical necessity using the
plan's definition of the term. Individual A seeks coverage for a 31st
physical therapy visit. A's health care provider submits a treatment
plan for approval, but it is not approved by the plan, so coverage for
the 31st visit is not preauthorized. With respect to the 31st visit, A
receives a notice of final internal adverse benefit determination
stating that the maximum visit limit is exceeded.
(2) Conclusion. In this Example 1, the plan's denial of benefits is
based on medical necessity and involves medical judgment. Accordingly,
the claim is eligible for external review under paragraph (d)(1)(i) of
this section. Moreover, the plan's notification of final internal
adverse benefit determination is inadequate under paragraphs (b)(2)(i)
and (b)(2)(ii)(E)(3) of this section because it fails to make clear
that the plan will pay for more than 30 visits if the service is
preauthorized pursuant to an approved treatment plan that takes into
account medical necessity using the plan's definition of the term.
Accordingly, the notice of final internal adverse benefit determination
should refer to the plan provision governing the 31st visit and should
describe the plan's standard for medical necessity, as well as how the
treatment fails to meet the plan's standard.
(B) Example 2--(1) Facts. A group health plan does not provide
coverage for services provided out of network, unless the service
cannot effectively be provided in network. Individual B seeks coverage
for a specialized medical procedure from an out-of-network provider
because B believes that the procedure cannot be effectively provided in
network. B receives a notice of final internal adverse benefit
determination stating that the claim is denied because the provider is
out-of-network.
(2) Conclusion. In this Example 2, the plan's denial of benefits is
based on whether a service can effectively be provided in network and,
therefore, involves medical judgment. Accordingly, the claim is
eligible for external review under paragraph (d)(1)(i) of this section.
Moreover, the plan's notice of final internal adverse benefit
determination is inadequate under paragraphs (b)(2)(i) and
(b)(2)(ii)(E)(3) of this section because the plan does provide benefits
for services on an out-of-network basis if the services cannot
effectively be provided in network. Accordingly, the notice of final
internal adverse benefit determination is required to refer to the
exception to the out-of-network exclusion and should describe the
plan's standards for determining effectiveness of services, as well as
how services available to the claimant within the plan's network meet
the plan's standard for effectiveness of services.
(C) Example 3--(1) Facts. A group health plan generally provides
benefits for services in an emergency department of a hospital or
independent freestanding emergency department. Individual C receives
pre-stabilization emergency treatment in an out-of-network emergency
department of a hospital. The group health plan determines that
protections for emergency services under Sec. 54.9816-4T do not apply
because the treatment did not involve ``emergency services'' within the
meaning of Sec. 54.9816-4T(c)(2)(i). C receives an adverse benefit
determination, and the plan imposes cost-sharing requirements that are
greater than the requirements that would apply if the same services
were provided in an in-network emergency department.
(2) Conclusion. In this Example 3, the plan's determination that
treatment received by C did not include emergency services involves
medical judgment and consideration of whether the plan complied with
Sec. 54.9816-4T. Accordingly, the claim is eligible for external
review under paragraph (d)(1)(i) of this section.
(D) Example 4--(1) Facts. A group health plan generally provides
benefits for anesthesiology services. Individual D undergoes a surgery
at an in-network health care facility and during the course of the
surgery, receives anesthesiology services from an out-of-network
provider. The plan decides the claim for these services without regard
to the protections related to items and services furnished by out-of-
network providers at in-network facilities under Sec. 54.9816-5T. As a
result, D receives an adverse benefit determination for the
[[Page 56097]]
services and is subject to cost-sharing liability that is greater than
it would be if cost sharing had been calculated in a manner consistent
with the requirements of Sec. 54.9816-5T.
(2) Conclusion. In this Example 4, whether the plan was required to
decide the claim in a manner consistent with the requirements of Sec.
54.9816-5T involves considering whether the plan complied with Sec.
54.9816-5T, as well as medical judgment, because it requires
consideration of the health care setting and level of care.
Accordingly, the claim is eligible for external review under paragraph
(d)(1)(i) of this section.
(E) Example 5--(1) Facts. A group health plan generally provides
benefits for services in an emergency department of a hospital or
independent freestanding emergency department. Individual E receives
emergency services in an out-of-network emergency department of a
hospital, including certain post-stabilization services. The plan
processes the claim for the post-stabilization services as not being
for emergency services under Sec. 54.9816-4T(c)(2)(ii) based on
representations made by the treating provider that E was in a condition
to receive notice from the provider about cost-sharing and surprise
billing protections for these services, and subsequently gave informed
consent to waive those protections. E receives an adverse benefit
determination and is subject to cost-sharing requirements that are
greater than the cost-sharing requirements that would apply if the
services were processed in a manner consistent with Sec. 54.9816-4T.
(2) Conclusion. In this Example 5, whether E was in a condition to
receive notice about the availability of cost-sharing and surprise
billing protections and give informed consent to waive those
protections involves medical judgment and consideration of whether the
plan complied with the requirements under Sec. 54.9816-4T(c)(2)(ii).
Accordingly, the claim is eligible for external review under paragraph
(d)(1)(i) of this section.
(F) Example 6--(1) Facts. Individual F gives birth to a baby at an
in-network hospital. The baby is born prematurely and receives certain
neonatology services from a nonparticipating provider during the same
visit as the birth. F was given notice about cost-sharing and surprise
billing protections for these services, and subsequently gave informed
consent to waive those protections. The claim for the neonatology
services is coded as a claim for routine post-natal services and the
plan decides the claim without regard to the requirements under Sec.
54.9816-5T(a) and the fact that those protections may not be waived for
neonatology services under Sec. 54.9816-5T(b).
(2) Conclusion. In this Example 6, medical judgment is necessary to
determine whether the correct code was used and compliance with Sec.
54.9816-5T(a) and (b) must also be considered. Accordingly, the claim
is eligible for external review under paragraph (d)(1)(i) of this
section. The Departments also note that, to the extent the
nonparticipating provider balance bills Individual F for the
outstanding amounts not paid by the plan for the neonatology services,
such provider would be in violation of PHS Act section 2799B-2 and its
implementing regulations at 45 CFR 149.420(a).
(G) Example 7--(1) Facts. A group health plan generally provides
benefits to cover knee replacement surgery. Individual G receives a
knee replacement surgery at an in-network facility and, after receiving
proper notice about the availability of cost-sharing and surprise
billing protections, provides informed consent to waive those
protections. However, during the surgery, certain anesthesiology
services are provided by an out-of-network nurse anesthetist. The claim
for these anesthesiology services is decided by the plan without regard
to the requirements under Sec. 54.9816-5T(a) or to the fact that those
protections may not be waived for ancillary services such as
anesthesiology services provided by an out-of-network provider at an
in-network facility under Sec. 54.9816-5T(b). G receives an adverse
benefit determination and is subject to cost-sharing requirements that
are greater than the cost-sharing requirements that would apply if the
services were provided in a manner consistent with Sec. 54.9816-5T(a)
and (b).
(2) Conclusion. In this Example 7, consideration of whether the
plan complied with the requirements in Sec. 54.9816-5T(a) and (b) is
necessary to determine whether cost-sharing requirements were applied
appropriately. Accordingly, the claim is eligible for external review
under paragraph (d)(1)(i) of this section.
(2) External review process standards. The Federal external review
process established pursuant to this paragraph (d) is considered
similar to the process set forth in the NAIC Uniform Model Act and,
therefore satisfies the requirements of paragraph (d)(2) if such
process provides the following.
(i) Request for external review. A group health plan or health
insurance issuer must allow a claimant to file a request for an
external review with the plan or issuer if the request is filed within
four months after the date of receipt of a notice of an adverse benefit
determination or final internal adverse benefit determination. If there
is no corresponding date four months after the date of receipt of such
a notice, then the request must be filed by the first day of the fifth
month following the receipt of the notice. For example, if the date of
receipt of the notice is October 30, because there is no February 30,
the request must be filed by March 1. If the last filing date would
fall on a Saturday, Sunday, or Federal holiday, the last filing date is
extended to the next day that is not a Saturday, Sunday, or Federal
holiday.
(ii) Preliminary review--(A) In general. Within five business days
following the date of receipt of the external review request, the group
health plan or health insurance issuer must complete a preliminary
review of the request to determine whether:
(1) The claimant is or was covered under the plan or coverage at
the time the health care item or service was requested or, in the case
of a retrospective review, was covered under the plan or coverage at
the time the health care item or service was provided;
(2) The adverse benefit determination or the final adverse benefit
determination does not relate to the claimant's failure to meet the
requirements for eligibility under the terms of the group health plan
or health insurance coverage (e.g., worker classification or similar
determination);
(3) The claimant has exhausted the plan's or issuer's internal
appeal process unless the claimant is not required to exhaust the
internal appeals process under paragraph (b)(1) of this section; and
(4) The claimant has provided all the information and forms
required to process an external review.
(B) Within one business day after completion of the preliminary
review, the plan or issuer must issue a notification in writing to the
claimant. If the request is complete but not eligible for external
review, such notification must include the reasons for its
ineligibility and current contact information, including the phone
number, for the Employee Benefits Security Administration. If the
request is not complete, such notification must describe the
information or materials needed to make the request complete, and the
plan or issuer must allow a claimant to perfect the request for
external review within the four-month filing period or within the 48
hour period following the receipt of the notification, whichever is
later.
[[Page 56098]]
(iii) Referral to Independent Review Organization--(A) In general.
The group health plan or health insurance issuer must assign an IRO
that is accredited by URAC or by similar nationally-recognized
accrediting organization to conduct the external review. The IRO
referral process must provide for the following:
(1) The plan or issuer must ensure that the IRO process is not
biased and ensures independence;
(2) The plan or issuer must contract with at least three (3) IROs
for assignments under the plan or coverage and rotate claims
assignments among them (or incorporate other independent, unbiased
methods for selection of IROs, such as random selection); and
(3) The IRO may not be eligible for any financial incentives based
on the likelihood that the IRO will support the denial of benefits.
(4) The IRO process may not impose any costs, including filing
fees, on the claimant requesting the external review.
(B) IRO contracts. A group health plan or health insurance issuer
must include the following standards in the contract between the plan
or issuer and the IRO:
(1) The assigned IRO will utilize legal experts where appropriate
to make coverage determinations under the plan or coverage.
(2) The assigned IRO will timely notify a claimant in writing
whether the request is eligible for external review. This notice will
include a statement that the claimant may submit in writing to the
assigned IRO, within ten business days following the date of receipt of
the notice, additional information. This additional information must be
considered by the IRO when conducting the external review. The IRO is
not required to, but may, accept and consider additional information
submitted after ten business days.
(3) Within five business days after the date of assignment of the
IRO, the plan or issuer must provide to the assigned IRO the documents
and any information considered in making the adverse benefit
determination or final internal adverse benefit determination. Failure
by the plan or issuer to timely provide the documents and information
must not delay the conduct of the external review. If the plan or
issuer fails to timely provide the documents and information, the
assigned IRO may terminate the external review and make a decision to
reverse the adverse benefit determination or final internal adverse
benefit determination. Within one business day after making the
decision, the IRO must notify the claimant and the plan.
(4) Upon receipt of any information submitted by the claimant, the
assigned IRO must within one business day forward the information to
the plan or issuer. Upon receipt of any such information, the plan or
issuer may reconsider its adverse benefit determination or final
internal adverse benefit determination that is the subject of the
external review. Reconsideration by the plan or issuer must not delay
the external review. The external review may be terminated as a result
of the reconsideration only if the plan decides, upon completion of its
reconsideration, to reverse its adverse benefit determination or final
internal adverse benefit determination and provide coverage or payment.
Within one business day after making such a decision, the plan must
provide written notice of its decision to the claimant and the assigned
IRO. The assigned IRO must terminate the external review upon receipt
of the notice from the plan or issuer.
(5) The IRO will review all of the information and documents timely
received. In reaching a decision, the assigned IRO will review the
claim de novo and not be bound by any decisions or conclusions reached
during the plan's or issuer's internal claims and appeals process
applicable under paragraph (b) of this section. In addition to the
documents and information provided, the assigned IRO, to the extent the
information or documents are available and the IRO considers them
appropriate, will consider the following in reaching a decision:
(i) The claimant's medical records;
(ii) The attending health care professional's recommendation;
(iii) Reports from appropriate health care professionals and other
documents submitted by the plan or issuer, claimant, or the claimant's
treating provider;
(iv) The terms of the claimant's plan or coverage to ensure that
the IRO's decision is not contrary to the terms of the plan or
coverage, unless the terms are inconsistent with applicable law;
(v) Appropriate practice guidelines, which must include applicable
evidence-based standards and may include any other practice guidelines
developed by the Federal Government, national or professional medical
societies, boards, and associations;
(vi) Any applicable clinical review criteria developed and used by
the plan or issuer, unless the criteria are inconsistent with the terms
of the plan or coverage or with applicable law; and
(vii) To the extent the final IRO decision maker is different from
the IRO's clinical reviewer, the opinion of such clinical reviewer,
after considering information described in this notice, to the extent
the information or documents are available and the clinical reviewer or
reviewers consider such information or documents appropriate.
(6) The assigned IRO must provide written notice of the final
external review decision within 45 days after the IRO receives the
request for the external review. The IRO must deliver the notice of the
final external review decision to the claimant and the plan or issuer.
(7) The assigned IRO's written notice of the final external review
decision must contain the following:
(i) A general description of the reason for the request for
external review, including information sufficient to identify the claim
(including the date or dates of service, the health care provider, the
claim amount (if applicable), and a statement describing the
availability, upon request, of the diagnosis code and its corresponding
meaning, the treatment code and its corresponding meaning, and the
reason for the plan's or issuer's denial);
(ii) The date the IRO received the assignment to conduct the
external review and the date of the IRO decision;
(iii) References to the evidence or documentation, including the
specific coverage provisions and evidence-based standards, considered
in reaching its decision;
(iv) A discussion of the principal reason or reasons for its
decision, including the rationale for its decision and any evidence-
based standards that were relied on in making its decision;
(v) A statement that the IRO's determination is binding except to
the extent that other remedies may be available under State or Federal
law to either the group health plan or health insurance issuer or to
the claimant, or to the extent the health plan or health insurance
issuer voluntarily makes payment on the claim or otherwise provides
benefits at any time, including after a final external review decision
that denies the claim or otherwise fails to require such payment or
benefits;
(vi) A statement that judicial review may be available to the
claimant; and
(vii) Current contact information, including phone number, for any
applicable office of health insurance consumer assistance or ombudsman
established under PHS Act section 2793.
(viii) After a final external review decision, the IRO must
maintain records of all claims and notices associated with the external
review process for six years. An IRO must make such records available
for examination by the claimant, plan, issuer, or State or Federal
oversight agency upon request,
[[Page 56099]]
except where such disclosure would violate State or Federal privacy
laws.
(iv) Reversal of plan's or issuer's decision. Upon receipt of a
notice of a final external review decision reversing the adverse
benefit determination or final adverse benefit determination, the plan
or issuer immediately must provide coverage or payment (including
immediately authorizing care or immediately paying benefits) for the
claim.
(3) Expedited external review. A group health plan or health
insurance issuer must comply with the following standards with respect
to an expedited external review:
(i) Request for external review. A group health plan or health
insurance issuer must allow a claimant to make a request for an
expedited external review with the plan or issuer at the time the
claimant receives:
(A) An adverse benefit determination if the adverse benefit
determination involves a medical condition of the claimant for which
the timeframe for completion of an expedited internal appeal under
paragraph (b) of this section would seriously jeopardize the life or
health of the claimant or would jeopardize the claimant's ability to
regain maximum function and the claimant has filed a request for an
expedited internal appeal; or
(B) A final internal adverse benefit determination, if the claimant
has a medical condition where the timeframe for completion of a
standard external review would seriously jeopardize the life or health
of the claimant or would jeopardize the claimant's ability to regain
maximum function, or if the final internal adverse benefit
determination concerns an admission, availability of care, continued
stay, or health care item or service for which the claimant received
emergency services, but has not been discharged from the facility.
(ii) Preliminary review. Immediately upon receipt of the request
for expedited external review, the plan or issuer must determine
whether the request meets the reviewability requirements set forth in
paragraph (d)(2)(ii) of this section for standard external review. The
plan or issuer must immediately send a notice that meets the
requirements set forth in paragraph (d)(2)(ii)(B) for standard review
to the claimant of its eligibility determination.
(iii) Referral to independent review organization. (A) Upon a
determination that a request is eligible for expedited external review
following the preliminary review, the plan or issuer will assign an IRO
pursuant to the requirements set forth in paragraph (d)(2)(iii) of this
section for standard review. The plan or issuer must provide or
transmit all necessary documents and information considered in making
the adverse benefit determination or final internal adverse benefit
determination to the assigned IRO electronically or by telephone or
facsimile or any other available expeditious method.
(B) The assigned IRO, to the extent the information or documents
are available and the IRO considers them appropriate, must consider the
information or documents described above under the procedures for
standard review. In reaching a decision, the assigned IRO must review
the claim de novo and is not bound by any decisions or conclusions
reached during the plan's or issuer's internal claims and appeals
process.
(iv) Notice of final external review decision. The plan's or
issuer's contract with the assigned IRO must require the IRO to provide
notice of the final external review decision, in accordance with the
requirements set forth in paragraph (d)(2)(iii)(B) of this section, as
expeditiously as the claimant's medical condition or circumstances
require, but in no event more than 72 hours after the IRO receives the
request for an expedited external review. If the notice is not in
writing, within 48 hours after the date of providing that notice, the
assigned IRO must provide written confirmation of the decision to the
claimant and the plan or issuer.
(4) Alternative, federally-administered external review process.
Insured coverage not subject to an applicable State external review
process under paragraph (c) of this section may elect to use either the
Federal external review process, as set forth under paragraph (d) of
this section or the federally-administered external review process, as
set forth by HHS in guidance. In such circumstances, the requirement to
provide external review under this paragraph (d) is satisfied.
(e) Form and manner of notice--(1) In general. For purposes of this
section, a group health plan and a health insurance issuer offering
group health insurance coverage are considered to provide relevant
notices in a culturally and linguistically appropriate manner if the
plan or issuer meets all the requirements of paragraph (e)(2) of this
section with respect to the applicable non-English languages described
in paragraph (e)(3) of this section.
(2) Requirements. (i) The plan or issuer must provide oral language
services (such as a telephone customer assistance hotline) that
includes answering questions in any applicable non-English language and
providing assistance with filing claims and appeals (including external
review) in any applicable non-English language;
(ii) The plan or issuer must provide, upon request, a notice in any
applicable non-English language; and
(iii) The plan or issuer must include in the English versions of
all notices, a statement prominently displayed in any applicable non-
English language clearly indicating how to access the language services
provided by the plan or issuer.
(3) Applicable non-English language. With respect to an address in
any United States county to which a notice is sent, a non-English
language is an applicable non-English language if ten percent or more
of the population residing in the county is literate only in the same
non-English language, as determined in guidance published by the
Secretary.
(f) Secretarial authority. The Secretary may determine that the
external review process of a group health plan or health insurance
issuer, in operation as of March 23, 2010, is considered in compliance
with the applicable process established under paragraph (c) or (d) of
this section if it substantially meets the requirements of paragraph
(c) or (d) of this section, as applicable.
(g) Applicability date. The provisions of this section generally
are applicable to group health plans and health insurance issuers for
plan years beginning on or after January 1, 2017. The external review
scope provision at paragraph (d)(1)(i)(B) of this section is applicable
for plan years beginning on or after January 1, 2022. The external
review provisions described in paragraphs (c) and (d) of this section
are applicable to grandfathered health plans, with respect to the types
of claims specified under paragraph (a)(1)(ii) of this section, for
plan years beginning on or after January 1, 2022.
0
5. Section 54.9816-1T is revised to read as follows:
Sec. 54.9816-1T Basis and scope (temporary).
(a) Basis. This section and Sec. Sec. 54.9816-2T through 54.9816-
8T, 54.9817-1T, 54.9817-2T, and 54.9822-1T implement subchapter B of
chapter 100 of the Internal Revenue Code of 1986.
(b) Scope. This part establishes standards for group health plans
with respect to surprise medical bills, transparency in health care
coverage, and additional patient protections. This part also
establishes an independent dispute resolution process and standards for
certifying independent dispute resolution entities.
[[Page 56100]]
0
6. Section 54.9816-2T is amended by revising paragraph (a) and
paragraph (b) introductory text to read as follows:
Sec. 54.9816-2T Applicability (temporary).
(a) In general. (1) The requirements in Sec. Sec. 54.9816-4T
through 54.9816-7T, 54.9817-1T, and 54.9822-1T apply to group health
plans (including grandfathered health plans as defined in Sec.
54.9815-1251), except as specified in paragraph (b) of this section.
(2) The requirements in Sec. Sec. 54.9816-8T and 54.9817-2T apply
to certified IDR entities and group health plans (including
grandfathered health plans as defined in Sec. 54.9815-1251) except as
specified in paragraph (b) of this section.
(b) Exceptions. The requirements in Sec. Sec. 54.9816-4T through
54.9816-8T, 54.9817-1T, 54.9817-2T, and 54.9822-1T do not apply to the
following:
* * * * *
0
7. Section 54.9816-8T is added to read as follows:
Sec. 54.9816-8T Independent dispute resolution process (temporary).
(a) Scope and definitions--(1) Scope. This section sets forth
requirements with respect to the independent dispute resolution (IDR)
process (referred to in this section as the Federal IDR process) under
which a nonparticipating provider, nonparticipating emergency facility,
or nonparticipating provider of air ambulance services (as applicable);
and a group health plan complete a requisite open negotiation period,
and at least one party submits a notification under paragraph (b) of
this section to initiate the Federal IDR process under paragraph (c) of
this section, and under which an IDR entity (as certified under
paragraph (e) of this section) determines the amount of payment under
the plan for an item or service furnished by the provider or facility.
(2) Definitions. Unless otherwise stated, the definitions in Sec.
54.9816-3T apply to this section. Additionally, for purposes of this
section, the following definitions apply:
(i) Batched items and services means multiple qualified IDR items
or services that are considered jointly as part of one payment
determination by a certified IDR entity for purposes of the Federal IDR
process. In order for a qualified IDR item or service to be included in
a batched item or service, the qualified IDR item or service must meet
the criteria set forth in paragraph (c)(3) of this section.
(ii) Breach means the acquisition, access, use, or disclosure of
individually identifiable health information (IIHI) in a manner not
permitted under paragraph (e)(2)(v) of this section that compromises
the security or privacy of the IIHI.
(A) Breach excludes:
(1) Any unintentional acquisition, access, or use of IIHI by
personnel, a contractor, or a subcontractor of a certified IDR entity
that is acting under the authority of that certified IDR entity, if the
acquisition, access, or use was made in good faith and within the scope
of that authority and that does not result in further use or disclosure
in a manner not permitted under paragraph (e)(2)(v) of this section.
(2) Any inadvertent disclosure by a person who is authorized to
access IIHI at a certified IDR entity to another person authorized to
access IIHI at the same certified IDR entity, and the information
received as a result of the disclosure is not further used or disclosed
in a manner not permitted under paragraph (e)(2)(v) of this section.
(3) A disclosure of IIHI in which a certified IDR entity has a good
faith belief that an unauthorized person to whom the disclosure was
made would not reasonably have been able to retain such information.
(B) Except as provided in paragraph (a)(2)(ii)(A) of this section,
access, use, or disclosure of IIHI in a manner not permitted under
paragraph (e)(2)(v) of this section is presumed to be a breach unless
the certified IDR entity demonstrates that there is a low probability
that the security or privacy of the IIHI has been compromised based on
a risk assessment encompassing at least the following factors:
(1) The nature and extent of the IIHI involved, including the types
of identifiers and the likelihood of re-identification;
(2) The unauthorized person who used the IIHI or to whom the
disclosure was made;
(3) Whether the IIHI was actually acquired or viewed; and
(4) The extent to which the risk to the IIHI has been mitigated.
(iii) Certified IDR entity means an entity responsible for
conducting determinations under paragraph (c) of this section that
meets the certification criteria specified in paragraph (e) of this
section and that has been certified by the Secretary, jointly with the
Secretaries of Health and Human Services and Labor.
(iv) Conflict of interest means, with respect to a party to a
payment determination or certified IDR entity, a material relationship,
status, or condition of the party or certified IDR entity that impacts
the ability of the certified IDR entity to make an unbiased and
impartial payment determination. For purposes of this section, a
conflict of interest exists when a certified IDR entity is:
(A) A group health plan; a health insurance issuer offering group
health insurance coverage, individual health insurance coverage, or
short-term, limited-duration insurance; a carrier offering a health
benefits plan under 5 U.S.C. 8902; or a provider, a facility or a
provider of air ambulance services;
(B) An affiliate or a subsidiary of a group health plan; a health
insurance issuer offering group health insurance coverage, individual
health insurance coverage, or short-term, limited-duration insurance; a
carrier offering a health benefits plan under 5 U.S.C. 8902; or a
provider, a facility, or a provider of air ambulance services;
(C) An affiliate or subsidiary of a professional or trade
association representing group health plans; health insurance issuers
offering group health insurance coverage, individual health insurance
coverage, or short-term, limited-duration insurance; carriers offering
a health benefits plan under 5 U.S.C. 8902; or providers, facilities,
or providers of air ambulance services.
(D) A certified IDR entity that has, or that has any personnel,
contractors, or subcontractors assigned to a determination who have, a
material familial, financial, or professional relationship with a party
to the payment determination being disputed, or with any officer,
director, or management employee of the plan, issuer, or carrier
offering a health benefits plan under 5 U.S.C. 8902; the plan
administrator, plan fiduciaries, or plan, issuer, or carrier employees;
the health care provider, the health care provider's group or practice
association; the provider of air ambulance services, the provider of
air ambulance services' group or practice association, or the facility
that is a party to the dispute.
(v) Credible information means information that upon critical
analysis is worthy of belief and is trustworthy.
(vi) IDR entity means an entity that may apply or has applied for
certification to conduct determinations under paragraph (c) of this
section, and that currently is not certified by the Secretary, jointly
with the Secretaries of Health and Human Services and Labor, pursuant
to paragraph (e) of this section.
(vii) Individually identifiable health information (IIHI) means any
information, including demographic data, that relates to the past,
present, or future physical or mental health or condition of an
individual; the provision of health care to an individual; or the past,
present, or
[[Page 56101]]
future payment for the provision of health care to an individual; and
(A) That identifies the individual; or
(B) With respect to which there is a reasonable basis to believe
the information can be used to identify the individual.
(viii) Material difference means a substantial likelihood that a
reasonable person with the training and qualifications of a certified
IDR entity making a payment determination would consider the submitted
information significant in determining the out of network rate and
would view the information as showing that the qualifying payment
amount is not the appropriate out-of-network rate.
(ix) Material familial relationship means any relationship as a
spouse, domestic partner, child, parent, sibling, spouse's or domestic
partner's parent, spouse's or domestic partner's sibling, spouse's or
domestic partner's child, child's parent, child's spouse or domestic
partner, or sibling's spouse or domestic partner.
(x) Material financial relationship means any financial interest of
more than five percent of total annual revenue or total annual income
of a certified IDR entity, or an officer, director, or manager thereof,
or of a reviewer or reviewing physician employed or engaged by a
certified IDR entity to conduct or participate in any review in the
Federal IDR process. The terms annual revenue and annual income do not
include mediation fees received by mediators who are also arbitrators,
provided that the mediator acts in the capacity of a mediator and does
not represent a party in the mediation.
(xi) Material professional relationship means any physician-patient
relationship, any partnership or employment relationship, any
shareholder or similar ownership interest in a professional
corporation, partnership, or other similar entity; or any independent
contractor arrangement that constitutes a material financial
relationship with any expert used by the certified IDR entity or any
officer or director of the certified IDR entity.
(xii) Qualified IDR item or service means an item or service:
(A) That is an emergency service furnished by a nonparticipating
provider or nonparticipating facility subject to the protections of
Sec. 54.9816-4T, 29 CFR 2590.716-4, or 45 CFR 149.110, as applicable,
for which the conditions of 45 CFR 149.410(b) are not met, or an item
or service furnished by a nonparticipating provider at a participating
health care facility, subject to the requirements of Sec. 54.9816-5T,
29 CFR 2590.716-5, or 45 CFR 149.120, as applicable, for which the
conditions of 45 CFR 149.420(c) through (i) are not met, or air
ambulance services furnished by a nonparticipating provider of air
ambulance services subject to the protections of Sec. 54.9817-1T, 29
CFR 2590.717-1, or 45 CFR 149.130, as applicable, and for which the
out-of-network rate is not determined by reference to an All-Payer
Model Agreement under section 1115A of the Social Security Act or a
specified State law as defined in Sec. 54.9816-3T;
(B) With respect to which a provider or facility (as applicable) or
group health plan submits a notification under paragraph (b)(2) of this
section;
(C) That is not an item or service that is the subject of an open
negotiation under paragraph (b)(1) of this section; and
(D) That is not an item or service for which a notification under
paragraph (b)(2) of this section is submitted during the 90-calendar-
day period under paragraph (c)(4)(vi)(B) of this section, but that may
include such an item or service if the notification is submitted during
the subsequent 30-business-day period under paragraph (c)(4)(vi)(C) of
this section.
(xiii) Unsecured IIHI means IIHI that is not rendered unusable,
unreadable, or indecipherable to unauthorized persons through the use
of a technology or methodology specified by the Secretary, jointly with
the Secretary of Health and Human Services and the Secretary of Labor.
(b) Determination of payment amount through open negotiation and
initiation of the Federal IDR process--(1) Determination of payment
amount through open negotiation--(i) In general. With respect to an
item or service that meets the requirements of paragraph (a)(2)(xii)(A)
of this section, the provider, facility, or provider of air ambulance
services or the group health plan may, during the 30-business-day
period beginning on the day the provider, facility, or provider of air
ambulance services receives an initial payment or notice of denial of
payment regarding the item or service, initiate an open negotiation
period for purposes of determining the out-of-network rate for such
item or service. To initiate the open negotiation period, a party must
send a notice to the other party (open negotiation notice) in
accordance with paragraph (b)(1)(ii) of this section.
(ii) Open negotiation notice--(A) Content. The open negotiation
notice must include information sufficient to identify the item(s) and
service(s) (including the date(s) the item(s) or service(s) were
furnished, the service code, and initial payment amount, if
applicable), an offer of an out-of-network rate, and contact
information for the party sending the open negotiation notice.
(B) Manner. The open negotiation notice must be provided, using the
standard form developed by the Secretary, in writing within 30 business
days beginning on the day the provider, facility, or provider of air
ambulance services receives an initial payment or a notice of denial of
payment from the plan regarding the item or service. The day on which
the open negotiation notice is first sent by a party is the date the
30-business-day open negotiation period begins. This notice may be
provided to the other party electronically (such as by email) if the
following two conditions are satisfied:
(1) The party sending the open negotiation notice has a good faith
belief that the electronic method is readily accessible by the other
party; and
(2) The notice is provided in paper form free of charge upon
request.
(2) Initiating the Federal IDR process--(i) In general. With
respect to an item or service for which the parties do not agree upon
an out-of-network rate by the last day of the open negotiation period
under paragraph (b)(1) of this section, either party may initiate the
Federal IDR process. To initiate the Federal IDR process, a party must
submit a written notice of IDR initiation to the other party and to the
Secretary, using the standard form developed by the Secretary, during
the 4-business-day period beginning on the 31st business day after the
start of the open negotiation period.
(ii) Exception for items and services provided by certain
nonparticipating providers and facilities. A party may not initiate the
Federal IDR process with respect to an item or service if, with respect
to that item or service, the party knows (or reasonably should have
known) that the provider or facility provided notice and received
consent under 45 CFR 149.410(b) or 149.420(c) through (i).
(iii) Notice of IDR initiation--(A) Content. The notice of IDR
initiation must include:
(1) Information sufficient to identify the qualified IDR items or
services under dispute (and whether the qualified IDR items or services
are designated as batched items and services as described in paragraph
(c)(3) of this section), including the date(s) and location the item or
service was furnished, the type of item or service (such as whether the
qualified IDR item or service is an emergency service as defined in
Sec. 54.9816-4T(c)(2)(i), 29 CFR
[[Page 56102]]
2590.716-4(c)(2)(i), or 45 CFR 149.110(c)(2)(i), as applicable, an
emergency service as defined in Sec. 54.9816-4T(c)(2)(ii), 29 CFR
2590.716-4(c)(2)(ii), or 45 CFR 149.110(c)(2)(ii), as applicable, or a
nonemergency service; and whether any service is a professional service
or facility-based service), corresponding service codes, place of
service code, the amount of cost sharing allowed, and the amount of the
initial payment made for the qualified IDR item or service, if
applicable;
(2) Names of the parties involved and contact information,
including name, email address, phone number, and mailing address;
(3) State where the qualified IDR item or service was furnished;
(4) Commencement date of the open negotiation period under
paragraph (b)(1) of this section;
(5) Preferred certified IDR entity;
(6) An attestation that the items and services under dispute are
qualified IDR items or services;
(7) Qualifying payment amount;
(8) Information about the qualifying payment amount as described in
Sec. 54.9816-6T(d); and
(9) General information describing the Federal IDR process as
specified by the Secretary.
(B) Manner. The initiating party must provide written notice of IDR
initiation to the other party. The initiating party may satisfy this
requirement by furnishing the notice of IDR initiation to the other
party electronically (such as by email) if the following two conditions
are satisfied--
(1) The initiating party has a good faith belief that the
electronic method is readily accessible by the other party; and
(2) The notice is provided in paper form free of charge upon
request.
(C) Notice to the Secretary. The initiating party must also furnish
the notice of IDR initiation to the Secretary by submitting the notice
through the Federal IDR portal. The initiation date of the Federal IDR
process will be the date of receipt by the Secretary.
(c) Federal IDR process following initiation--(1) Selection of
certified IDR entity--(i) In general. The plan or the provider,
facility, or provider of air ambulance services receiving the notice of
IDR initiation under paragraph (b)(2) of this section may agree or
object to the preferred certified IDR entity identified in the notice
of IDR initiation. If the party in receipt of the notice of IDR
initiation fails to object within 3 business days, the preferred
certified IDR entity identified in the notice of IDR initiation will be
selected and will be treated as jointly agreed to by the parties,
provided that the certified IDR entity does not have a conflict of
interest. If the party in receipt of the notice of IDR initiation
objects, that party must notify the initiating party of the objection
and propose an alternative certified IDR entity. The initiating party
must then agree or object to the alternative certified IDR entity; if
the initiating party fails to agree or object to the alternative
certified IDR entity, the alternative certified IDR entity will be
selected and will be treated as jointly agreed to by the parties. In
order to select a preferred certified IDR entity, the plan and the
provider, facility, or provider of air ambulance services, must jointly
agree on a certified IDR entity not later than 3 business days after
the initiation date of the Federal IDR process. If the plan and the
provider, facility, or provider of air ambulance services fail to agree
upon a certified IDR entity within that time, the Secretary shall
select a certified IDR entity in accordance with paragraph (c)(1)(iv)
of this section.
(ii) Requirements for selected certified IDR entity. The certified
IDR entity selected must be an IDR entity certified under paragraph (e)
of this section, that:
(A) Does not have a conflict of interest as defined in paragraph
(a)(2) of this section;
(B) Ensures that assignment of personnel to a payment determination
and decisions regarding hiring, compensation, termination, promotion,
or other similar matters related to personnel assigned to the dispute
are not made based upon the likelihood that the assigned personnel will
support a particular party to the determination being disputed other
than as outlined under paragraph (c)(4)(iii) of this section; and
(C) Ensures that any personnel assigned to a payment determination
do not have any conflicts of interests as defined in paragraph (a)(2)
of this section regarding any party to the dispute within the 1 year
immediately preceding an assignment of dispute determination, similar
to the requirements laid out in 18 U.S.C. 207(b).
(iii) Notice of certified IDR entity selection. Upon the selection
of a certified IDR entity, in accordance with paragraph (c)(1)(i) of
this section, the plan or the provider or emergency facility that
submitted the notice of IDR initiation under paragraph (b)(2) of this
section must notify the Secretary of the selection as soon as
reasonably practicable, but no later than 1 business day after such
selection, through the Federal IDR portal. In addition, if the non-
initiating party believes that the Federal IDR process is not
applicable, the non-initiating party must also provide information
regarding the Federal IDR process's inapplicability through the Federal
IDR portal by the same date that the notice of certified IDR entity
selection must be submitted.
(A) Content. If the parties have agreed on the selection of a
certified IDR entity or the party in receipt of the notice of IDR
initiation has not objected to the other party's selection, the notice
of the certified IDR entity selection must include the following
information:
(1) Name of the certified IDR entity;
(2) The certified IDR entity number; and
(3) Attestation by both parties, or by the initiating party if the
non-initiating party fails to object to the selection of the certified
IDR entity, that the selected certified IDR entity meets the
requirements of paragraph (c)(1)(ii) of this section.
(B) [Reserved]
(iv) Failure to select a certified IDR entity. If the plan and the
provider, facility, or provider of air ambulance services fail to
select a certified IDR entity in accordance with paragraph (c)(1)(i) of
this section, the initiating party must notify the Secretary of the
failure no later than 1 business day after the date of such failure (or
in other words, 4 business days after initiation of the Federal IDR
process) by electronically submitting the notice as described in
paragraph (c)(1)(iii) of this section but indicating that the parties
have failed to select a certified IDR entity. In addition, if the non-
initiating party believes that the Federal IDR process is not
applicable, the non-initiating party must also provide information
regarding the Federal IDR process's inapplicability through the Federal
IDR portal by the same date that the notice of failure to select must
be submitted. Upon notification of the failure of the parties to select
a certified IDR entity, the Secretary will select a certified IDR
entity that charges a fee within the allowed range of certified IDR
entity fees through a random selection method not later than 6 business
days after the date of initiation of the Federal IDR process and will
notify the plan and the provider or facility of the selection. If there
are insufficient certified IDR entities that charge a fee within the
allowed range of certified IDR entity fees available to arbitrate the
dispute, the Secretary, jointly with the Secretary of Health and Human
Services and Secretary of Labor, will select a certified IDR entity
that has received approval, as described in paragraph (e)(2)(vi)(B) of
this section, to
[[Page 56103]]
charge a fee outside of the allowed range of certified IDR entity fees.
(v) Review by certified IDR entity. After selection by the parties
(including when the initiating party selects a certified IDR entity and
the other party does not object), or by the Secretary under paragraph
(c)(1)(iv) of this section, the certified IDR entity must review the
selection and attest that it meets the requirements of paragraph
(c)(1)(ii) of this section. If the certified IDR entity is unable to
attest that it meets the requirements of paragraph (c)(1)(ii) within 3
business days of selection, the parties, upon notification, must select
another certified IDR entity under paragraph (c)(1) of this section,
treating the date of notification of the failure to attest to the
requirements of (c)(1)(ii) of this section as the date of initiation of
the Federal IDR process for purposes of the time periods in paragraphs
(c)(1)(i) and (iv) of this section. Additionally, the certified IDR
entity selected must review the information submitted in the notice of
IDR initiation to determine whether the Federal IDR process applies. If
the Federal IDR process does not apply, the certified IDR entity must
notify the Secretary and the parties within 3 business days of making
that determination.
(2) Authority to continue negotiations--(i) In general. If the
parties to the Federal IDR process agree on an out-of-network rate for
a qualified IDR item or service after providing the notice of IDR
initiation to the Secretary consistent with paragraph (b)(2) of this
section, but before the certified IDR entity has made its payment
determination, the amount agreed to by the parties for the qualified
IDR item or service will be treated as the out-of-network rate for the
qualified IDR item or service. To the extent the amount exceeds the
initial payment amount (or initial denial of payment) and any cost
sharing paid or required to be paid by the participant or beneficiary,
payment must be made directly by the plan to the nonparticipating
provider, facility, or nonparticipating provider of air ambulance
services not later than 30 business days after the agreement is
reached. In no instance may either party seek additional payment from
the participant or beneficiary, including in instances in which the
out-of-network rate exceeds the qualifying payment amount. The
initiating party must send a notification to the Secretary and to the
certified IDR entity (if selected) electronically through the Federal
IDR portal, as soon as possible, but no later than 3 business days
after the date of the agreement. The notification must include the out-
of-network rate for the qualified IDR item or service and signatures
from authorized signatories for both parties.
(ii) Method of allocation of the certified IDR entity fee. In the
case of an agreement described in paragraph (c)(2)(i) of this section,
the certified IDR entity is required to return half of each parties'
certified IDR entity fee, unless directed otherwise by both parties.
The administrative fee under paragraph (d)(2) of this section will not
be returned to the parties.
(3) Treatment of batched items and services--(i) In general.
Batched items and services may be submitted and considered jointly as
part of one payment determination by a certified IDR entity only if the
batched items and services meet the requirements of this paragraph
(c)(3). Batched items and services submitted and considered jointly as
part of one payment determination under this paragraph (c)(3)(i) are
treated as a batched determination and subject to the fee for batched
determinations under this section.
(A) The qualified IDR items and services are billed by the same
provider or group of providers, the same facility, or the same provider
of air ambulance services. Items and services are billed by the same
provider or group of providers, the same facility, or the same provider
of air ambulance services if the items or services are billed with the
same National Provider Identifier or Tax Identification Number;
(B) Payment for the qualified IDR items and services would be made
by the same plan;
(C) The qualified IDR items and services are the same or similar
items and services. The qualified IDR items and services are considered
to be the same or similar items or services if each is billed under the
same service code, or a comparable code under a different procedural
code system, such as Current Procedural Terminology (CPT) codes with
modifiers, if applicable, Healthcare Common Procedure Coding System
(HCPCS) with modifiers, if applicable, or Diagnosis-Related Group (DRG)
codes with modifiers, if applicable; and
(D) All the qualified IDR items and services were furnished within
the same 30-business-day period, or the same 90-calendar-day period
under paragraph (c)(4)(vi)(B) of this section, as applicable.
(ii) Treatment of bundled payment arrangements. In the case of
qualified IDR items and services billed by a provider, facility, or
provider of air ambulance services as part of a bundled payment
arrangement, or where a plan makes or denies an initial payment as a
bundled payment, the qualified IDR items and services may be submitted
as part of one payment determination. Bundled payment arrangements
submitted under this paragraph (c)(3)(ii) are subject to the rules for
batched determinations set forth in paragraph (c)(3)(i) of this section
and the certified IDR entity fee for single determinations as set forth
in paragraph (e)(2)(vii) of this section.
(4) Payment determination for a qualified IDR item or service--(i)
Submission of offers. Not later than 10 business days after the
selection of the certified IDR entity, the plan and the provider,
facility, or provider of air ambulance services:
(A) Must each submit to the certified IDR entity:
(1) An offer of an out-of-network rate expressed as both a dollar
amount and the corresponding percentage of the qualifying payment
amount represented by that dollar amount;
(2) Information requested by the certified IDR entity relating to
the offer.
(3) The following additional information, as applicable--
(i) For providers and facilities, information on the size of the
provider's practice or of the facility (if applicable). Specifically, a
group of providers must specify whether the providers' practice has
fewer than 20 employees, 20 to 50 employees, 51 to 100 employees, 101
to 500 employees, or more than 500 employees. For facilities, the
facility must specify whether the facility has 50 or fewer employees,
51 to 100 employees, 101 to 500 employees, or more than 500 employees;
(ii) For providers and facilities, information on the practice
specialty or type, respectively (if applicable);
(iii) For plans, information on the coverage area of the plan, the
relevant geographic region for purposes of the qualifying payment
amount, whether the coverage is fully-insured or partially or fully
self-insured; and
(iv) The qualifying payment amount for the applicable year for the
same or similar item or service as the qualified IDR item or service.
(B) May each submit to the certified IDR entity any information
relating to the offer that was submitted by either party, except that
the information may not include information on factors described in
paragraph (c)(4)(v) of this section.
(ii) Payment determination and notification. Not later than 30
business days after the selection of the certified IDR entity, the
certified IDR entity must:
(A) Select as the out-of-network rate for the qualified IDR item or
service one
[[Page 56104]]
of the offers submitted under paragraph (c)(4)(i) of this section,
taking into account the considerations specified in paragraph
(c)(4)(iii) of this section (as applied to the information provided by
the parties pursuant to paragraph (c)(4)(i) of this section). The
certified IDR entity must select the offer closest to the qualifying
payment amount unless the certified IDR entity determines that credible
information submitted by either party under paragraph (c)(4)(i) clearly
demonstrates that the qualifying payment amount is materially different
from the appropriate out-of-network rate, or if the offers are equally
distant from the qualifying payment amount but in opposing directions.
In these cases, the certified IDR entity must select the offer as the
out-of-network rate that the certified IDR entity determines best
represents the value of the qualified IDR item or services, which could
be either offer.
(B) Notify the plan and the provider or facility, as applicable, of
the selection of the offer under paragraph (c)(4)(ii)(A) of this
section, and provide the written decision required under (c)(4)(vi) of
this section.
(iii) Considerations in determination. In determining which offer
to select, the certified IDR entity must consider:
(A) The qualifying payment amount(s) for the applicable year for
the same or similar item or service.
(B) Information requested by the certified IDR entity under
paragraph (c)(4)(i)(A)(2) of this section relating to the offer, to the
extent a party provides credible information.
(C) Additional information submitted by a party, provided the
information is credible and relates to the circumstances described in
paragraphs (c)(4)(iii)(C)(1) through (5) of this section, with respect
to a qualified IDR item or service of a nonparticipating provider,
facility, or group health plan that is the subject of a payment
determination. This information must also clearly demonstrate that the
qualifying payment amount is materially different from the appropriate
out-of-network rate.
(1) The level of training, experience, and quality and outcomes
measurements of the provider or facility that furnished the qualified
IDR item or service (such as those endorsed by the consensus-based
entity authorized in section 1890 of the Social Security Act).
(2) The market share held by the provider or facility or that of
the plan in the geographic region in which the qualified IDR item or
service was provided.
(3) The acuity of the participant, or beneficiary, receiving the
qualified IDR item or service, or the complexity of furnishing the
qualified IDR item or service to the participant or beneficiary.
(4) The teaching status, case mix, and scope of services of the
facility that furnished the qualified IDR item or service, if
applicable.
(5) Demonstration of good faith efforts (or lack thereof) made by
the provider or facility or the plan to enter into network agreements
with each other, and, if applicable, contracted rates between the
provider or facility, as applicable, and the plan during the previous 4
plan years.
(D) Additional information submitted by a party, provided the
information is credible and relates to the offer submitted by either
party and does not include information on factors described in
paragraph (c)(4)(v) of this section.
(iv) Examples. The rules of paragraph (c)(4)(iii) of this section
are illustrated by the following examples:
(A) Example 1--(1) Facts. A nonparticipating provider and a group
health plan are parties to a payment determination in the Federal IDR
process. The nonparticipating provider submits an offer and additional
written information asserting that the provider has made good faith
efforts to enter into network agreements with the plan. The
nonparticipating provider fails to provide any documentation of these
efforts, such as correspondence or records of conversations with
representatives of the plan.
(2) Conclusion. In this Example 1, the nonparticipating provider
has submitted additional information. However, this information is not
credible, as the nonparticipating provider has failed to provide any
documentation in support of the provider's assertions of good faith
efforts to enter into network agreements with the plan. Therefore, the
certified IDR entity cannot consider the information.
(B) Example 2--(1) Facts. A nonparticipating provider and a group
health plan are parties to a payment determination in the Federal IDR
process. The nonparticipating provider submits credible information
relating to the provider's level of training, experience, and quality
and outcome measurements from 2019. The provider also submits credible
information that clearly demonstrates that the provider's level of
training and expertise was necessary for providing the service that is
the subject of the payment determination to the particular patient.
Further, the provider submits credible information that clearly
demonstrates that the qualifying payment amount generally presumes the
service would be delivered by a provider with a lower level of
training, experience, and quality and outcome measurements. This
information, taken together, demonstrates that the qualifying payment
amount is not an appropriate payment amount, and the provider submits
an offer that is higher than the qualifying payment amount and
commensurate with the provider's level of training, experience, and
quality and outcome measurements with respect to the service provided.
The plan submits the qualifying payment amount as its offer with no
additional information.
(2) Conclusion. In this Example 2, the nonparticipating provider
has submitted information that is credible. Moreover, the credible
information clearly demonstrates that the qualifying payment amount
does not adequately take into account the provider's level of training,
experience, and quality and outcome measurements with respect to the
service provided, and that the appropriate out-of-network rate should
therefore be higher than the qualifying payment amount. Accordingly,
the certified IDR entity must select the provider's offer, as that
offer best represents the value of the service that is the subject of
the payment determination.
(C) Example 3--(1) Facts. A nonparticipating provider and a group
health plan are parties to a payment determination in the Federal IDR
process. The nonparticipating provider submits credible information to
the certified IDR entity relating to the acuity of the patient that
received the service, and the complexity of furnishing the service to
the patient, by providing details of the service at issue and the
training required to furnish the complex service. The provider contends
that this information demonstrates that the qualifying payment amount
is not an appropriate payment amount, and the provider submits an offer
that is higher than the qualifying payment amount and equal to what the
provider believes is commensurate with the acuity of the patient and
the complexity of the service that is the subject of the payment
determination. However, the evidence submitted by the provider does not
clearly demonstrate that the qualifying payment amount fails to
encompass the acuity and complexity of the service. The plan submits
the qualifying payment amount as its offer, along with credible
information that demonstrates how the qualifying payment amount was
calculated for this particular service, taking into consideration the
acuity of the patient and the complexity of the service.
[[Page 56105]]
(2) Conclusion. The information submitted by the provider to the
certified IDR entity is credible with respect to the acuity of the
patient and complexity of the service. However, in this example, the
provider has not clearly demonstrated that the qualifying payment
amount is materially different from the appropriate out-of-network
rate, based on the acuity of the patient and the complexity of the
service that is the subject of the payment determination. Accordingly,
the certified IDR entity must select the offer closest to the
qualifying payment amount, which is the plan's offer.
(D) Example 4--(1) Facts. A nonparticipating provider and a group
health plan are parties to a payment determination in the Federal IDR
process. The plan submits credible information demonstrating that the
patent for the item that is the subject of the payment determination
has expired, including written documentation that demonstrates how much
the cost of the item was at the time the provider rendered service and
how the qualifying payment amount exceeds that cost. The plan submits
an offer that is lower than the qualifying payment amount and
commensurate with the cost of the item at the time service was
rendered. The nonparticipating provider submits the qualifying payment
amount as its offer and also submits credible information demonstrating
the provider's level of training, experience, and quality and outcome
measurements from 2019, but the provider does not explain how this
additional information is relevant to the cost of the item.
(2) Conclusion. In this Example 4, both the nonparticipating
provider and plan submitted information that is credible and that may
be considered by the certified IDR entity. However, only the plan
provided credible information that was relevant to the service that is
the subject of the payment determination. Moreover, the plan has
clearly demonstrated that the qualifying payment amount does not
adequately take into account the complexity of the item furnished--in
this case that the item is no longer patent protected. While the
provider submitted credible information, the provider failed to show
how the information was relevant to the item that is the subject of the
payment determination. Accordingly, the certified IDR entity must
select the offer that best represents the value of the item, which is
the plan's offer in this example.
(v) Prohibition on consideration of certain factors. In determining
which offer to select, the certified IDR entity must not consider:
(A) Usual and customary charges (including payment or reimbursement
rates expressed as a proportion of usual and customary charges);
(B) The amount that would have been billed by the provider or
facility with respect to the qualified IDR item or service had the
provisions of 45 CFR 149.410 and 149.420 (as applicable) not applied;
or
(C) The payment or reimbursement rate for items and services
furnished by the provider or facility payable by a public payor,
including under the Medicare program under title XVIII of the Social
Security Act; the Medicaid program under title XIX of the Social
Security Act; the Children's Health Insurance Program under title XXI
of the Social Security Act; the TRICARE program under chapter 55 of
title 10, United States Code; chapter 17 of title 38, United States
Code; or demonstration projects under section 1115 of the Social
Security Act.
(vi) Written decision. (A) The certified IDR entity must explain
its determination in a written decision submitted to the parties and
the Secretary, in a form and manner specified by the Secretary;
(B) If the certified IDR entity does not choose the offer closest
to the qualifying payment amount, the certified IDR entity's written
decision must include an explanation of the credible information that
the certified IDR entity determined demonstrated that the qualifying
payment amount was materially different from the appropriate out-of-
network rate, based on the considerations allowed under paragraphs
(c)(4)(iii)(B) through (D) of this section, with respect to the
qualified IDR item or service.
(vii) Effects of determination--(A) Binding. A determination made
by a certified IDR entity under paragraph (c)(4)(ii) of this section:
(1) Is binding upon the parties, in the absence of fraud or
evidence of intentional misrepresentation of material facts presented
to the certified IDR entity regarding the claim; and
(2) Is not subject to judicial review, except in a case described
in any of paragraphs (1) through (4) of section 10(a) of title 9,
United States Code.
(B) Suspension of certain subsequent IDR requests. In the case of a
determination made by a certified IDR entity under paragraph (c)(4)(ii)
of this section, the party that submitted the initial notification
under paragraph (b)(2) of this section may not submit a subsequent
notification involving the same other party with respect to a claim for
the same or similar item or service that was the subject of the initial
notification during the 90-calendar-day period following the
determination.
(C) Subsequent submission of requests permitted. If the end of the
open negotiation period specified in paragraph (b)(1) of this section
occurs during the 90-calendar-day suspension period regarding claims
for the same or similar item or service that were the subject of the
initial notice of IDR determination as described in paragraph
(c)(4)(vi) of this section, either party may initiate the Federal IDR
process for those claims by submitting a notification as specified in
paragraph (b)(2) of this section during the 30-business-day period
beginning on the day after the last day of the 90-calendar-day
suspension period.
(viii) Recordkeeping requirements. The certified IDR entity must
maintain records of all claims and notices associated with the Federal
IDR process with respect to any determination for 6 years. The
certified IDR entity must make these records available for examination
by the plan, provider, facility, provider of air ambulance services, or
a State or Federal oversight agency upon request, except to the extent
the disclosure would violate either State or Federal privacy law.
(ix) Payment. If applicable, the amount of the offer selected by
the certified IDR entity (less the sum of the initial payment and any
cost sharing paid or owed by the participant or beneficiary) must be
paid directly to the provider, facility, or provider of air ambulance
services not later than 30 calendar days after the determination by the
certified IDR entity. If the offer selected by the certified IDR entity
is less than the sum of the initial payment and any cost sharing paid
by the participant or beneficiary, the provider, facility, or provider
of air ambulance services will be liable to the plan for the
difference. The provider, facility, or provider of air ambulance
services must pay the difference directly to the plan not later than 30
calendar days after the determination by the certified IDR entity.
(d) Costs of IDR process--(1) Certified IDR entity fee. (i) With
respect to the Federal IDR process described in paragraph (c) of this
section, the party whose offer submitted to the certified IDR entity
under paragraph (c)(4)(ii)(A) of this section is not selected is
responsible for the payment to the certified IDR entity of the
predetermined fee charged by the certified IDR entity.
(ii) Each party to a determination for which a certified IDR entity
is selected under paragraph (c)(1) of this section must pay the
predetermined certified
[[Page 56106]]
IDR entity fee charged by the certified IDR entity to the certified IDR
entity at the time the parties submit their offers under (c)(4)(i) of
this section. The certified IDR entity fee paid by the prevailing party
whose offer is selected by the certified IDR entity will be returned to
that party within 30 business days following the date of the certified
IDR entity's determination.
(2) Administrative fee. (i) Each party to a determination for which
a certified IDR entity is selected under paragraph (c)(1) of this
section must, at the time the certified IDR entity is selected under
paragraph (c)(1), pay to the certified IDR entity a non-refundable
administrative fee due to the Secretary for participating in the
Federal IDR process described in this section.
(ii) The administrative fee amount will be established in guidance
published annually by the Secretary in a manner such that the total
fees paid for a year are estimated to be equal to the projected amount
of expenditures by the Departments of the Treasury, Labor, and Health
and Human Services for the year in carrying out the Federal IDR
process.
(e) Certification of IDR entity--(1) In general. In order to be
selected under paragraph (c)(1) of this section--
(i) An IDR entity must meet the standards described in this
paragraph (e) and be certified by the Secretary, jointly with the
Secretaries of Health and Human Services and Labor, as set forth in
this paragraph (e) and guidance promulgated by the Secretary. Once
certified, the IDR entity will be provided with a certified IDR entity
number.
(ii) An IDR entity must provide written documentation to the
Secretary regarding general company information (such as contact
information, Taxpayer Identification Number, and website), as well as
the applicable service area in which the IDR entity intends to conduct
payment determinations under the Federal IDR process. IDR entities may
choose to submit their application for all States or self-limit to a
particular subset of States.
(iii) An IDR entity that the Secretary, jointly with the Secretary
of Labor and the Secretary of Health and Human Services, certifies must
enter into an agreement as a condition of certification. The agreement
shall include specified provisions encompassed by this section,
including, but not limited to, the requirements applicable to certified
IDR entities when making payment determinations, as well as the
requirements regarding certification and revocation (such as
specifications for wind-down activities and reallocation of certified
IDR entity fees, where warranted).
(2) Requirements. An IDR entity must provide written documentation
to the Secretary through the Federal IDR portal that demonstrates that
the IDR entity satisfies the following standards to be a certified IDR
entity under this paragraph (e):
(i) Possess (directly or through contracts or other arrangements)
sufficient arbitration and claims administration of health care
services, managed care, billing and coding, medical and legal expertise
to make the payment determinations described in paragraph (c) of this
section within the time prescribed in paragraph (c)(4)(ii) of this
section.
(ii) Employ (directly or through contracts or other arrangements) a
sufficient number of personnel to make the determinations described in
paragraph (c) of this section within the time prescribed by (c)(4)(ii)
of this section. To satisfy this standard, the written documentation
must include a description of the IDR entity's organizational structure
and capabilities, including an organizational chart and the
credentials, responsibilities, and number of personnel employed to make
determinations described in paragraph (c) of this section.
(iii) Maintain a current accreditation from a nationally recognized
and relevant accrediting organization, such as URAC, or ensure that it
otherwise possesses the requisite training to conduct payment
determinations (for example, providing documentation that personnel
employed by the IDR entity have completed arbitration training by the
American Arbitration Association, the American Health Law Association,
or a similar organization);
(iv) Have a process to ensure that no conflict of interest, as
defined in paragraph (a)(2) of this section, exists between the parties
and the personnel the certified IDR entity assigns to a payment
determination to avoid violating paragraph (c)(1)(ii) of this section,
including policies and procedures for conducting ongoing audits for
conflicts of interest, to ensure that should any conflicts of interest
arise, the certified IDR entity has procedures in place to inform the
Secretary, jointly with the Secretary of Health and Human Services and
the Secretary of Labor, of the conflict of interest and to mitigate the
risk by reassigning the dispute to other personnel in the event that
any personnel previously assigned have a conflict of interest.
(v) Have a process to maintain the confidentiality of IIHI obtained
in the course of conducting determinations. A certified IDR entity's
responsibility to comply with these confidentiality requirements shall
survive revocation of the IDR entity's certification for any reason,
and IDR entities must comply with the record retention and disposal
requirements described in this section. Under this process, once
certified, the certified IDR entity must comply with the following
requirements:
(A) Privacy. The certified IDR entity may create, collect, handle,
disclose, transmit, access, maintain, store, and/or use IIHI, only to
perform:
(1) The certified IDR entity's required duties described in this
section; and
(2) Functions related to carrying out additional obligations as may
be required under applicable Federal or State laws or regulations.
(B) Security. (1) The certified IDR entity must ensure the
confidentiality of all IIHI it creates, obtains, maintains, stores, and
transmits;
(2) The certified IDR entity must protect against any reasonably
anticipated threats or hazards to the security of this information;
(3) The certified IDR entity must ensure that IIHI is securely
destroyed or disposed of in an appropriate and reasonable manner 6
years from either the date of its creation or the first date on which
the certified IDR entity had access to it, whichever is earlier;
(4) The certified IDR entity must implement policies and procedures
to prevent, detect, contain, and correct security violations in the
event of a breach of IIHI;
(C) Breach notification. The certified IDR entity must, following
the discovery of a breach of unsecured IIHI, notify of the breach the
provider, facility, or provider of air ambulance services; the plan;
the Secretary, jointly with the Secretary of Health and Human Services
and the Secretary of Labor; and each individual whose unsecured IIHI
has been, or is reasonably believed to have been, subject to the
breach, to the extent possible.
(1) Breaches treated as discovered. For purposes of this paragraph
(e)(2)(v)(C), a breach shall be treated as discovered by a certified
IDR entity as of the first day on which the breach is known to the
certified IDR entity or, by exercising reasonable diligence, would have
been known to the certified IDR entity. A certified IDR entity shall be
deemed to have knowledge of a breach if the breach is known, or by
exercising reasonable diligence would have been known, to any person,
other than the person committing the breach, who is
[[Page 56107]]
an employee, officer, or other agent of the certified IDR entity;
(2) Timing of notification. A certified IDR entity must provide the
notification required by this paragraph (e)(2)(v)(C) without
unreasonable delay and in no case later than 60 calendar days after
discovery of a breach.
(3) Content of notification. The notification required by this
paragraph (e)(2)(v)(C) must include, to the extent possible:
(i) The identification of each individual whose unsecured IIHI has
been, or is reasonably believed by the certified IDR entity to have
been, subject to the breach;
(ii) A brief description of what happened, including the date of
the breach and the date of the discovery of the breach, to the extent
known;
(iii) A description of the types of unsecured IIHI that were
involved in the breach (for example whether full name, social security
number, date of birth, home address, account number, diagnosis,
disability code, or other types of information were involved);
(iv) A brief description of what the certified IDR entity involved
is doing to investigate the breach, to mitigate harm to the affected
parties, and to protect against any further breaches; and
(v) Contact procedures for individuals to ask questions or learn
additional information, which must include a toll-free telephone
number, email address, website, or postal address.
(4) Method for providing notification. A certified IDR entity must
submit the notification required by this paragraph (e)(2)(v)(C) in
written form (in clear and understandable language) either on paper or
electronically through the Federal IDR portal or electronic mail.
(D) Application to contractor and subcontractors. The certified IDR
entity must ensure compliance with this paragraph (e)(2)(v) of this
section by any contractor or subcontractor with access to IIHI
performing any duties related to the Federal IDR process.
(vi) Meet appropriate indicators of fiscal integrity and stability
by demonstrating that the certified IDR entity has a system of
safeguards and controls in place to prevent and detect improper
financial activities by its employees and agents to assure fiscal
integrity and accountability for all certified IDR entity fees and
administrative fees received, held, and disbursed and by submitting 3
years of financial statements or, if not available, other information
to demonstrate fiscal stability of the IDR entity;
(vii) Provide a fixed fee for single determinations and a separate
fixed fee for batched determinations within the upper and lower limits
for each, as set forth in guidance issued by the Secretary. The
certified IDR entity may not charge a fee that is not within the
approved limits as set forth in guidance unless the certified IDR
entity or IDR entity seeking certification receives written approval
from the Secretary to charge a flat rate beyond the upper or lower
limits approved by the Secretary for fees. The certified IDR entity or
IDR entity seeking certification may update its fees and seek approval
from the Secretary to charge a flat fee beyond the upper or lower
limits for fees annually as provided in guidance. In order for the
certified IDR entity to receive the Secretary's written approval to
charge a flat fee beyond the upper or lower limits for fees as set
forth in guidance, it must satisfy both conditions in paragraphs
(e)(2)(vii)(A) and (B) of this section as follows:
(A) Submit, in writing, a proposal to the Secretary that includes:
(1) The alternative flat fee the certified IDR entity or IDR entity
seeking certification believes is appropriate for the certified IDR
entity or IDR entity seeking certification to charge;
(2) A description of the circumstances that require the alternative
fee; and
(3) A description of how the alternative flat rate will be used to
mitigate the effects of these circumstances; and
(B) Receive from the Secretary, jointly with the Secretary of
Health and Human Services and the Secretary of Labor, written approval
to charge the fee documented in the certified IDR entity's or the IDR
entity seeking certification's written proposal.
(viii) Have a procedure in place to retain the certified IDR entity
fees described in paragraph (d)(1) of this section paid by both parties
in a trust or escrow account and to return the certified IDR entity fee
paid by the prevailing party of an IDR payment determination, or half
of each party's certified IDR entity fee in the case of an agreement
described in paragraph (c)(2)(i) of this section, within 30 business
days following the date of the determination;
(ix) Have a procedure in place to retain the administrative fees
described in paragraph (d)(2) of this section and to remit the
administrative fees to the Secretary in accordance with the timeframe
and procedures set forth in guidance published by the Secretary;
(x) Discharge its responsibilities in accordance with paragraph (c)
of this section, including not making any determination with respect to
which the certified IDR entity would not be eligible for selection
pursuant to paragraph (c)(1) of this section; and
(xi) Collect the information required to be reported to the
Secretary under paragraph (f) of this section and report the
information on a timely basis in the form and manner provided in
guidance published by the Secretary.
(3) Conflict-of-interest standards. In addition to the general
standards set forth in paragraph (e)(2)(iv) of this section, an IDR
entity must provide written documentation that the IDR entity satisfies
the standards to be a certified IDR entity under this paragraph (e)(3).
(i) The IDR entity must provide an attestation indicating that it
does not have a conflict of interest as defined in paragraph (a)(2) of
this section;
(ii) The IDR entity must have procedures in place to ensure that
personnel assigned to a determination do not have any conflicts of
interest regarding any party to the dispute within the 1 year
immediately preceding an assignment of dispute determination, similar
to the requirements laid out in 18 U.S.C. 207(b). In order to satisfy
this requirement, if certified, the IDR entity must ensure that any
personnel assigned to a determination do not have any conflicts of
interest as defined in paragraph (a)(2) of this section.
(iii) Following certification under this paragraph (e), if a
certified IDR entity acquires control of, becomes controlled by, or
comes under common control with any entity described in paragraph
(e)(3)(i) of this section, the certified IDR entity must notify the
Secretary in writing no later than 3 business days after the
acquisition or exercise of control and shall be subject to revocation
of certification under paragraph (e)(6)(ii) of this section.
(4) Period of certification. Subject to paragraphs (e)(5) and (6)
of this section, each certification (including a recertification) of a
certified IDR entity under the process described in paragraph (e)(1) of
this section will be effective for a 5-year period.
(5) Petition for denial or revocation--(i) In general. An
individual, provider, facility, provider of air ambulance services,
plan, or issuer may petition for a denial of a certification for an IDR
entity or a revocation of a certification for a certified IDR entity
for failure to meet a requirement of this section using the standard
form and manner set forth in guidance issued by the Secretary. The
petition for denial of a certification must be submitted within the
timeframe set forth in guidance issued by the Secretary.
[[Page 56108]]
(ii) Content of petition. The individual, provider, facility,
provider of air ambulance services, plan, or issuer seeking denial or
revocation of certification must submit a written petition using the
standard form issued by the Secretary including the following
information:
(A) The identity of the IDR entity seeking certification or
certified IDR entity that is the subject of the petition;
(B) The reason(s) for the petition;
(C) Whether the petition seeks denial or revocation of a
certification;
(D) Documentation to support the reasons outlined in the petition;
and
(E) Other information as may be required by the Secretary.
(iii) Process. (A) The Secretary, jointly with the Secretary of
Health and Human Services and the Secretary of Labor, will acknowledge
receipt of the petition within 10 business days of receipt of the
petition.
(B) If the Secretary finds that the petition adequately shows a
failure of the IDR entity seeking certification or the certified IDR
entity to follow the requirements of this paragraph (e), the Secretary,
jointly with the Secretary of Health and Human Services and the
Secretary of Labor, will notify the IDR entity seeking certification or
the certified IDR entity by providing a de-identified copy of the
petition. Following the notification, the IDR entity seeking
certification or certified IDR entity will have 10 business days to
provide a response. After the time period for providing the response
has passed, the Secretary, jointly with the Secretary of Health and
Human Services and the Secretary of Labor, will review the response (if
any), determine whether a denial or revocation of a certification is
warranted, and issue a notice of the decision to the IDR entity or
certified IDR entity and to the petitioner. This decision will be
subject to the appeal requirements of paragraph (e)(6)(v) of this
section.
(C) Effect on certification under petition. Regarding a petition
for revocation of a certified IDR entity's certification, if the
Secretary, jointly with the Secretary of Health and Human Services and
the Secretary of Labor, finds that the petition adequately shows a
failure to comply with the requirements of this paragraph (e),
following the Secretary's notification of the failure to the certified
IDR entity under paragraph (e)(5)(iii)(B) of this section, the
certified IDR entity may continue to work on previously assigned
determinations but may not accept new determinations until the
Secretary issues a notice of the decision to the certified IDR entity
finding that a revocation of certification is not warranted.
(6) Denial of IDR entity certification or revocation of certified
IDR entity certification--(i) Denial of IDR entity certification. The
Secretary, jointly with the Secretary of Health and Human Services and
the Secretary of Labor, may deny the certification of an IDR entity
under paragraph (e)(1) of this section if, during the process of
certification, including as a result of a petition described in
paragraph (e)(5) of this section, the Secretary determines the
following:
(A) The IDR entity fails to meet the applicable standards set forth
under this paragraph (e);
(B) The IDR entity has committed or participated in fraudulent or
abusive activities, including, during the certification process,
submitting fraudulent data, or submitting information or data the IDR
entity knows to be false to the Secretary, the Secretary of Health and
Human Services, or the Secretary of Labor;
(C) The IDR entity has failed to comply with requests for
information from the Secretary, the Secretary of Health and Human
Services, or the Secretary of Labor as part of the certification
process;
(D) In conducting payment determinations, including those outside
the Federal IDR process, the IDR entity has failed to meet the
standards that applied to those determinations or reviews, including
standards of independence and impartiality; or
(E) The IDR entity is otherwise not fit or qualified to make
determinations under the Federal IDR process.
(ii) Revocation of certification of a certified IDR entity. The
Secretary, jointly with the Secretary of Health and Human Services and
the Secretary of Labor, may revoke the certification of a certified IDR
entity under paragraph (e)(1) of this section if, as a result of an
audit, a petition described in paragraph (e)(5) of this section, or
otherwise, the Secretary determines the following:
(A) The certified IDR entity has a pattern or practice of
noncompliance with any requirements of this paragraph (e);
(B) The certified IDR entity is operating in a manner that hinders
the efficient and effective administration of the Federal IDR process;
(C) The certified IDR entity no longer meets the applicable
standards for certification set forth under this paragraph (e);
(D) The certified IDR entity has committed or participated in
fraudulent or abusive activities, including submission of false or
fraudulent data to the Secretary, the Secretary of Health and Human
Services, or the Secretary of Labor;
(E) The certified IDR entity lacks the financial viability to
provide arbitration under the Federal IDR process;
(F) The certified IDR entity has failed to comply with requests
from the Secretary, the Secretary of Health and Human Services, or the
Secretary of Labor made as part of an audit, including failing to
submit all records of the certified IDR entity that pertain to its
activities within the Federal IDR process; or
(G) The certified IDR entity is otherwise no longer fit or
qualified to make determinations.
(iii) Notice of denial or revocation. The Secretary, jointly with
the Secretary of Health and Human Services and the Secretary of Labor,
will issue a written notice of denial to the IDR entity or revocation
to the certified IDR entity within 10 business days of the Secretary's
decision, including the effective date of denial or revocation, the
reason(s) for denial or revocation, and the opportunity to request
appeal of the denial or revocation.
(iv) Request for appeal of denial or revocation. To request an
appeal, the IDR entity or certified IDR entity must submit a request
for appeal to the Secretary within 30 business days of the date of the
notice under paragraph (e)(6)(iii) of this section of denial or
revocation and in the manner prescribed by the instructions to the
notice. During this time period, the Secretary, jointly with the
Secretary of Health and Human Services and the Secretary of Labor, will
not issue a notice of final denial or revocation and a certified IDR
entity may continue to work on previously assigned determinations but
may not accept new determinations. If the IDR entity or certified IDR
entity does not timely submit a request for appeal of the denial or
revocation, the Secretary, jointly with the Secretary of Health and
Human Services and the Secretary of Labor, will issue a notice of final
denial or revocation to the IDR entity or certified IDR entity (if
applicable) and the petitioner.
(v) Denial or final revocation. Upon notice of denial or final
revocation, the IDR entity shall not be considered a certified IDR
entity and therefore shall not be eligible to accept payment
determinations under the Federal IDR process. Moreover, after a notice
of final revocation, the IDR entity may not re-apply to be a certified
IDR entity until on or after the 181st day after the date of the notice
of denial or final revocation.
[[Page 56109]]
(f) Reporting of information relating to the Federal IDR process--
(1) Reporting of information. Within 30 business days of the close of
each month, for qualified IDR items and services furnished on or after
January 1, 2022, each certified IDR entity must, in a form and manner
specified by the Secretary, report:
(i) The number of notices of IDR initiation submitted under
paragraph (b)(2) of this section to the certified IDR entity during the
immediately preceding month;
(ii) The size of the provider practices and the size of the
facilities submitting notices of IDR initiation under paragraph (b)(2)
of this section during the immediately preceding month, as required to
be provided to the certified IDR entity under paragraph (c)(4)(i)(A)(2)
of this section;
(iii) The number of such notices of IDR initiation with respect to
which a determination was made under paragraph (c)(4)(ii) of this
section;
(iv) The number of times during the month that the out-of-network
rate determined (or agreed to) under this section has exceeded the
qualifying payment amount, specified by qualified IDR items and
services;
(v) With respect to each notice of IDR initiation under paragraph
(b)(2) of this section for which such a determination was made, the
following information:
(A) A description of the qualified IDR items and services included
with respect to the notification, including the relevant billing and
service codes;
(B) The relevant geographic region for purposes of the qualifying
payment amount for the qualified IDR items and services with respect to
which the notification was provided;
(C) The amount of the offer submitted under paragraph (c)(4)(i) of
this section by the plan and by the provider or facility (as
applicable) expressed as a dollar amount and as a percentage of the
qualifying payment amount;
(D) Whether the offer selected by the certified IDR entity under
paragraph (c)(4) of this section was the offer submitted by the plan or
by the provider or facility (as applicable);
(E) The amount of the selected offer expressed as a dollar amount
and as a percentage of the qualifying payment amount;
(F) The rationale for the certified IDR entity's decision,
including the extent to which the decision relied on the criteria in
paragraph (c)(4)(iv) of this section;
(G) The practice specialty or type of each provider or facility,
respectively, involved in furnishing each qualified IDR item or
service;
(H) The identity for each plan, and provider or facility, with
respect to the notification. Specifically, each certified IDR entity
must provide each party's name and address, as applicable; and
(I) For each determination, the number of business days elapsed
between selection of the certified IDR entity and the determination of
the out-of-network rate by the certified IDR entity.
(vi) The total amount of certified IDR entity fees paid to the
certified IDR entity under paragraph (d)(1) of this section during the
month.
(g) Extension of time periods for extenuating circumstances--(1)
General. The time periods specified in this section (other than the
time for payment, if applicable, under paragraph (c)(4)(ix) of this
section) may be extended in extenuating circumstances at the
Secretary's discretion if:
(i) An extension is necessary to address delays due to matters
beyond the control of the parties or for good cause; and
(ii) The parties attest that prompt action will be taken to ensure
that the determination under this section is made as soon as
administratively practicable under the circumstances.
(2) Process to request an extension. The parties may request an
extension by submitting a request for extension due to extenuating
circumstances through the Federal IDR portal if the extension is
necessary to address delays due to matters beyond the control of the
parties or for good cause.
(h) Applicability date. The provisions of this section are
applicable with respect to plan years beginning on or after January 1,
2022, except that the provisions regarding IDR entity certification at
paragraphs (a) and (e) of this section are applicable beginning on
October 7, 2021.
0
8. Section 54.9817-2T is added to read as follows:
Sec. 54.9817-2T Independent dispute resolution process for air
ambulance services (temporary).
(a) Definitions. Unless otherwise stated, the definitions in Sec.
54.9816-3T apply.
(b) Determination of out-of-network rates to be paid by group
health plans; independent dispute resolution process--(1) In general.
Except as provided in paragraphs (b)(2) and (3) of this section, in
determining the out-of-network rate to be paid by group health plans
for out-of-network air ambulance services, plans must comply with the
requirements of Sec. 54.9816-8T, except that references in Sec.
54.9816-8T to the additional circumstances in Sec. 54.9816-
8T(c)(4)(iii)(C) shall be understood to refer to Sec. 54.9817-
2T(b)(2).
(2) Additional information. Additional information submitted by a
party, provided the information is credible, relates to the
circumstances described in paragraphs (b)(2)(i) through (vi) of this
section, with respect to a qualified IDR service of a nonparticipating
provider of air ambulance services or group health plan that is the
subject of a payment determination. This information must also clearly
demonstrate that the qualifying payment amount is materially different
from the appropriate out-of-network rate.
(i) The quality and outcomes measurements of the provider that
furnished the services.
(ii) The acuity of the condition of the participant or beneficiary
receiving the service, or the complexity of furnishing the service to
the participant or beneficiary.
(iii) The training, experience, and quality of the medical
personnel that furnished the air ambulance services.
(iv) Ambulance vehicle type, including the clinical capability
level of the vehicle.
(v) Population density of the point of pick-up (as defined in 42
CFR 414.605) for the air ambulance (such as urban, suburban, rural, or
frontier).
(vi) Demonstrations of good faith efforts (or lack thereof) made by
the nonparticipating provider of air ambulance services or the plan to
enter into network agreements with each other and, if applicable,
contracted rates between the provider of air ambulance services and the
plan during the previous 4 plan years.
(3) Reporting of information relating to the IDR process. In
applying the requirements of Sec. 54.9816-8T(f), within 30 business
days of the close of each month, for services furnished on or after
January 1, 2022, the information the certified IDR entity must report,
in a form and manner specified by the Secretary, with respect to the
Federal IDR process involving air ambulance services is:
(i) The number of notices of IDR initiation submitted under the
Federal IDR process to the certified IDR entity that pertain to air
ambulance services during the immediately preceding month;
(ii) The number of such notices of IDR initiation with respect to
which a final determination was made under Sec. 54.9816-8T(c)(4)(ii)
(as applied by paragraph (b)(1) of this section);
(iii) The number of times the payment amount determined (or agreed
to) under this subsection has exceeded the qualifying payment amount,
specified by services;
[[Page 56110]]
(iv) With respect to each notice of IDR initiation under Sec.
54.9816-8T(b)(2) (as applied by paragraph (b)(1) of this section) for
which a determination was made, the following information:
(A) A description of each air ambulance service included in such
notification, including the relevant billing and service codes;
(B) The point of pick-up (as defined in 42 CFR 414.605) for the
services included in such notification;
(C) The amount of the offers submitted under Sec. 54.9816-
8T(c)(4)(i) (as applied by paragraph (b)(1) of this section) by the
group health plan and by the nonparticipating provider of air ambulance
services, expressed as a dollar amount and as a percentage of the
qualifying payment amount;
(D) Whether the offer selected by the certified IDR entity under
Sec. 54.9816-8T(c)(4)(ii) (as applied by paragraph (b)(1) of this
section) to be the payment amount applied was the offer submitted by
the plan or by the provider of air ambulance services;
(E) The amount of the selected offer expressed as a dollar amount
and as a percentage of the qualifying payment amount;
(F) The rationale for the certified IDR entity's decision,
including the extent to which the decision relied on the criteria in
paragraph (b)(2) of this section;
(G) Air ambulance vehicle type, including the clinical capability
level of such vehicle (to the extent this information has been provided
to the certified IDR entity);
(H) The identity for each plan and provider of air ambulance
services, with respect to the notification. Specifically, each
certified IDR entity must provide each party's name and address, as
applicable; and
(I) For each determination, the number of business days elapsed
between selection of the certified IDR entity and the selection of the
payment amount by the certified IDR entity.
(v) The total amount of certified IDR entity fees paid to the
certified IDR entity under paragraph Sec. 54.9816-8T(d)(1) (as applied
by paragraph (b)(1) of this section) during the month for
determinations involving air ambulance services.
(c) Applicability date. The provisions of this section are
applicable with respect to plan years beginning on or after January 1,
2022.
Employee Benefits Security Administration
29 CFR Chapter XXV
For the reasons set forth in the preamble, the Department of Labor
amends 29 CFR part 2590 as set forth below:
PART 2590--RULES AND REGULATIONS FOR GROUP HEALTH PLANS
0
9. The authority citation for part 2590 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; Secretary of Labor's
Order 1-2011, 77 FR 1088 (Jan. 9, 2012).
Subpart C--Other Requirements
0
10. Section 2590.715-2719 is amended by:
0
a. Revising paragraphs (a)(1), (c)(2)(i), and (d)(1)(i)(A) and (B);
0
b. Adding paragraph (d)(1)(i)(C);
0
c. Adding Examples 3 through 7 to paragraph (d)(1)(ii); and
0
d. Revising paragraph (g).
The revisions and additions read as follows:
Sec. 2590.715-2719 Internal claims and appeals and external review
processes.
(a) Scope and definitions--(1) Scope--(i) In general. This section
sets forth requirements with respect to internal claims and appeals and
external review processes for group health plans and health insurance
issuers. Paragraph (b) of this section provides requirements for
internal claims and appeals processes. Paragraph (c) of this section
sets forth rules governing the applicability of State external review
processes. Paragraph (d) of this section sets forth a Federal external
review process for plans and issuers not subject to an applicable State
external review process. Paragraph (e) of this section prescribes
requirements for ensuring that notices required to be provided under
this section are provided in a culturally and linguistically
appropriate manner. Paragraph (f) of this section describes the
authority of the Secretary to deem certain external review processes in
existence on March 23, 2010 as in compliance with paragraph (c) or (d)
of this section.
(ii) Application to grandfathered health plans and health insurance
coverage. The provisions of this section generally do not apply to
coverage offered by health insurance issuers and group health plans
that are grandfathered health plans, as defined under Sec. 2590.715-
1251. However, the external review process requirements under
paragraphs (c) and (d) of this section, and related notice requirements
under paragraph (e) of this section, apply to grandfathered health
plans or coverage with respect to adverse benefit determinations
involving items and services within the scope of the requirements for
out-of-network emergency services, nonemergency services performed by
nonparticipating providers at participating facilities, and air
ambulance services furnished by nonparticipating providers of air
ambulance services under ERISA sections 716 and 717 and Sec. Sec.
2590.716-4 through 2590.716-5 and 2590.717-1.
* * * * *
(c) * * *
(2) * * *
(i) The State process must provide for the external review of
adverse benefit determinations (including final internal adverse
benefit determinations) by issuers (or, if applicable, plans) that are
based on the issuer's (or plan's) requirements for medical necessity,
appropriateness, health care setting, level of care, or effectiveness
of a covered benefit, as well as a consideration of whether a plan or
issuer is complying with the surprise billing and cost-sharing
protections under ERISA sections 716 and 717 and Sec. Sec. 2590.716-4
through 2590.716-5 and 2590.717-1.
* * * * *
(d) * * *
(1) * * *
(i) * * *
(A) An adverse benefit determination (including a final internal
adverse benefit determination) by a plan or issuer that involves
medical judgment (including, but not limited to, those based on the
plan's or issuer's requirements for medical necessity, appropriateness,
health care setting, level of care, or effectiveness of a covered
benefit; its determination that a treatment is experimental or
investigational; its determination whether a participant or beneficiary
is entitled to a reasonable alternative standard for a reward under a
wellness program; its determination whether a plan or issuer is
complying with the nonquantitative treatment limitation provisions of
ERISA section 712 and Sec. 2590.712, which generally require, among
other things, parity in the application of medical management
techniques), as determined by the external reviewer. (A denial,
reduction, termination, or a failure to provide payment for a benefit
based on a determination that a participant or beneficiary fails to
meet the
[[Page 56111]]
requirements for eligibility under the terms of a group health plan or
health insurance coverage is not eligible for the Federal external
review process under this paragraph (d));
(B) An adverse benefit determination that involves consideration of
whether a plan or issuer is complying with the surprise billing and
cost-sharing protections set forth in ERISA sections 716 and 717 and
Sec. Sec. 2590.716-4 through 2590.716-5 and 2590.717-1; and
(C) A rescission of coverage (whether or not the rescission has any
effect on any particular benefit at that time).
(ii) * * *
Example 3. (i) Facts. A group health plan generally provides
benefits for services in an emergency department of a hospital or
independent freestanding emergency department. Individual C receives
pre-stabilization emergency treatment in an out-of-network emergency
department of a hospital. The group health plan determines that
protections for emergency services under Sec. 2590.716-4 do not apply
because the treatment did not involve ``emergency services'' within the
meaning of Sec. 2590.716-4(c)(2)(i). C receives an adverse benefit
determination and the plan imposes cost-sharing requirements that are
greater than the requirements that would apply if the same services
were provided in an in-network emergency department.
(ii) Conclusion. In this Example 3, the plan's determination that
treatment received by C did not include emergency services involves
medical judgment and consideration of whether the plan complied with
Sec. 2590.716-4. Accordingly, the claim is eligible for external
review under paragraph (d)(1)(i) of this section.
* * * * *
Example 4. (i) Facts. A group health plan generally provides
benefits for anesthesiology services. Individual D undergoes a surgery
at an in-network health care facility and during the course of the
surgery, receives anesthesiology services from an out-of-network
provider. The plan decides the claim for these services without regard
to the protections related to items and services furnished by out-of-
network providers at in-network facilities under Sec. 2590.716-5. As a
result, D receives an adverse benefit determination for the services
and is subject to cost-sharing liability that is greater than it would
be if cost sharing had been calculated in a manner consistent with the
requirements of Sec. 2590.716-5.
(ii) Conclusion. In this Example 4, whether the plan was required
to decide the claim in a manner consistent with the requirements of
Sec. 2590.716-5 involves considering whether the plan complied with
Sec. 2590.716-5, as well as medical judgment, because it requires
consideration of the health care setting and level of care.
Accordingly, the claim is eligible for external review under paragraph
(d)(1)(i) of this section.
Example 5. (i) Facts. A group health plan generally provides
benefits for services in an emergency department of a hospital or
independent freestanding emergency department. Individual E receives
emergency services in an out-of-network emergency department of a
hospital, including certain post-stabilization services. The plan
processes the claim for the post-stabilization services as not being
for emergency services under Sec. 2590.716-4(c)(2)(ii) based on
representations made by the treating provider that E was in a condition
to receive notice from the provider about cost-sharing and surprise
billing protections for these services and subsequently gave informed
consent to waive those protections. E receives an adverse benefit
determination and is subject to cost-sharing requirements that are
greater than the cost-sharing requirements that would apply if the
services were processed in a manner consistent with Sec. 2590.716-4.
(ii) Conclusion. In this Example 5, whether E was in a condition to
receive notice about the availability of cost-sharing and surprise
billing protections and give informed consent to waive those
protections involves medical judgment and consideration of whether the
plan complied with the requirements under Sec. 2590.716-4(c)(2)(ii).
Accordingly, the claim is eligible for external review under paragraph
(d)(1)(i) of this section.
Example 6. (i) Facts. Individual F gives birth to a baby at an in-
network hospital. The baby is born prematurely and receives certain
neonatology services from a nonparticipating provider during the same
visit as the birth. F was given notice about cost-sharing and surprise
billing protections for these services, and subsequently gave informed
consent to waive those protections. The claim for the neonatology
services is coded as a claim for routine post-natal services and the
plan decides the claim without regard to the requirements under Sec.
2590.716-5(a) and the fact that those protections may not be waived for
neonatology services under Sec. 2590.716-5(b).
(ii) Conclusion. In this Example 6, medical judgment is necessary
to determine whether the correct code was used and compliance with
Sec. 2590.716-5(a) and (b) must also be considered. Accordingly, the
claim is eligible for external review under paragraph (d)(1)(i) of this
section. The Departments also note that, to the extent the
nonparticipating provider balance bills Individual F for the
outstanding amounts not paid by the plan for the neonatology services,
such provider would be in violation of PHS Act section 2799B-2 and its
implementing regulations at 45 CFR 149.420(a).
Example 7. (i) Facts. A group health plan generally provides
benefits to cover knee replacement surgery. Individual G receives a
knee replacement surgery at an in-network facility and, after receiving
proper notice about the availability of cost-sharing and surprise
billing protections, provides informed consent to waive those
protections. However, during the surgery, certain anesthesiology
services are provided by an out-of-network nurse anesthetist. The claim
for these anesthesiology services is decided by the plan without regard
to the requirements under Sec. 2590.716-5(a) or to the fact that those
protections may not be waived for ancillary services such as
anesthesiology services provided by an out-of-network provider at an
in-network facility under Sec. 2590.716-5(b). G receives an adverse
benefit determination and is subject to cost-sharing requirements that
are greater than the cost-sharing requirements that would apply if the
services were provided in a manner consistent with Sec. 2590.716-5(a)
and (b).
(ii) Conclusion. In this Example 7, consideration of whether the
plan complied with the requirements in Sec. 2590.716-5(a) and (b) is
necessary to determine whether cost-sharing requirements were applied
appropriately. Accordingly, the claim is eligible for external review
under paragraph (d)(1)(i) of this section.
* * * * *
(g) Applicability date. The provisions of this section generally
are applicable to group health plans and health insurance issuers for
plan years beginning on or after January 1, 2017. The external review
scope provision at paragraph (d)(1)(i)(B) of this section is applicable
for plan years beginning on or after January 1, 2022. The external
review provisions described in paragraphs (c) and (d) of this section
are applicable to grandfathered health plans, with respect to the types
of claims specified under paragraph (a)(1)(ii) of this section, for
plan years beginning on or after January 1, 2022.
0
11. Section 2590.716-1 is amended by revising paragraph (b) to read as
follows:
[[Page 56112]]
Sec. 716-1 Basis and scope.
* * * * *
(b) Scope. This part establishes standards for group health plans,
and health insurance issuers offering group or individual health
insurance coverage with respect to surprise medical bills, transparency
in health care coverage, and additional patient protections. This part
also establishes an independent dispute resolution process, and
standards for certifying independent dispute resolution entities.
0
12. Section 2590.716-2 is amended by revising paragraph (a) and
paragraph (b) introductory text to read as follows:
Sec. 2590.716-2 Applicability.
(a) In general. (1) The requirements in Sec. Sec. 2590.716-4
through 2590.716-7, 2590.717-1, and 2590.722 apply to group health
plans and health insurance issuers offering group health insurance
coverage (including grandfathered health plans as defined in Sec.
2590.715-1251), except as specified in paragraph (b) of this section.
(2) The requirements in Sec. Sec. 54.9816-8T and 54.9817-2T apply
to certified IDR entities and group health plans and health insurance
issuers offering group health insurance coverage (including
grandfathered health plans as defined in Sec. 2590.715-1251) except as
specified in paragraph (b) of this section.
(b) Exceptions. The requirements in Sec. Sec. 2590.716-4 through
2590.716-8, 2590.717-1, 2590.717-2 and 2590.722 do not apply to the
following:
* * * * *
0
13. Section 2590.716-8 is added to read as follows:
Sec. 2590.716--8 Independent dispute resolution process.
(a) Scope and definitions-(1) Scope. This section sets forth
requirements with respect to the independent dispute resolution (IDR)
process (referred to in this section as the Federal IDR process) under
which a nonparticipating provider, nonparticipating emergency facility,
or nonparticipating provider of air ambulance services (as applicable),
and a group health plan or health insurance issuer offering group
health insurance coverage completes a requisite open negotiation period
and at least one party submits a notification under paragraph (b) of
this section to initiate the Federal IDR process under paragraph (c) of
this section, and under which an IDR entity (as certified under
paragraph (e) of this section) determines the amount of payment under
the plan or coverage for an item or service furnished by the provider
or facility.
(2) Definitions. Unless otherwise stated, the definitions in Sec.
2590.716-3 of this part apply to this section. Additionally, for
purposes of this section, the following definitions apply:
(i) Batched items and services means multiple qualified IDR items
or services that are considered jointly as part of one payment
determination by a certified IDR entity for purposes of the Federal IDR
process. In order for a qualified IDR item or service to be included in
a batched item or service, the qualified IDR item or service must meet
the criteria set forth in paragraph (c)(3) of this section.
(ii) Breach means the acquisition, access, use, or disclosure of
individually identifiable health information (IIHI) in a manner not
permitted under paragraph (e)(2)(v) of this section that compromises
the security or privacy of the IIHI.
(A) Breach excludes:
(1) Any unintentional acquisition, access, or use of IIHI by
personnel, a contractor, or a subcontractor of a certified IDR entity
that is acting under the authority of that certified IDR entity, if the
acquisition, access, or use was made in good faith and within the scope
of that authority and that does not result in further use or disclosure
in a manner not permitted under paragraph (e)(2)(v) of this section.
(2) Any inadvertent disclosure by a person who is authorized to
access IIHI at a certified IDR entity to another person authorized to
access IIHI at the same certified IDR entity, and the information
received as a result of the disclosure is not further used or disclosed
in a manner not permitted under paragraph (e)(2)(v) of this section.
(3) A disclosure of IIHI in which a certified IDR entity has a good
faith belief that an unauthorized person to whom the disclosure was
made would not reasonably have been able to retain such information.
(B) Except as provided in paragraph (a)(2)(ii)(A) of this section,
access, use, or disclosure of IIHI in a manner not permitted under
paragraph (e)(2)(v) of this section is presumed to be a breach unless
the certified IDR entity demonstrates that there is a low probability
that the security or privacy of the IIHI has been compromised based on
a risk assessment encompassing at least the following factors:
(1) The nature and extent of the IIHI involved, including the types
of identifiers and the likelihood of re-identification;
(2) The unauthorized person who used the IIHI or to whom the
disclosure was made;
(3) Whether the IIHI was actually acquired or viewed; and
(4) The extent to which the risk to the IIHI has been mitigated.
(iii) Certified IDR entity means an entity responsible for
conducting determinations under paragraph (c) of this section that
meets the certification criteria specified in paragraph (e) of this
section and that has been certified by the Secretary, jointly with the
Secretaries of Health and Human Services and the Treasury.
(iv) Conflict of interest means, with respect to a party to a
payment determination, or certified IDR entity, a material
relationship, status, or condition of the party, or certified IDR
entity that impacts the ability of the certified IDR entity to make an
unbiased and impartial payment determination. For purposes of this
section, a conflict of interest exists when a certified IDR entity is:
(A) A group health plan; a health insurance issuer offering group
health insurance coverage, individual health insurance coverage, or
short-term, limited-duration insurance; a carrier offering a health
benefits plan under 5 U.S.C. 8902; or a provider, a facility, or a
provider of air ambulance services;
(B) An affiliate or a subsidiary of a group health plan; a health
insurance issuer offering group health insurance coverage, individual
health insurance coverage, or short-term limited-duration insurance; a
carrier offering a health benefits plan under 5 U.S.C. 8902; or a
provider, a facility, or a provider of air ambulance services;
(C) An affiliate or subsidiary of a professional or trade
association representing group health plans; health insurance issuers
offering group health insurance coverage, individual health insurance
coverage, or short-term limited duration insurance; carriers offering a
health benefits plan under 5 U.S.C. 8902; or providers, facilities, or
providers of air ambulance services.
(D) A certified IDR entity, that has, or that has any personnel,
contractors, or subcontractors assigned to a determination who have, a
material familial, financial, or professional relationship with a party
to the payment determination being disputed, or with any officer,
director, or management employee of the plan, issuer, or carrier
offering a health benefits plan under 5 U.S.C. 8902; the plan
administrator, plan fiduciaries, or plan, issuer, or carrier employees;
the health care provider, the health care provider's group or practice
association; the provider of air ambulance services, the provider of
air ambulance services' group or practice association, or the facility
that is a party to the dispute.
[[Page 56113]]
(v) Credible information means information that upon critical
analysis is worthy of belief and is trustworthy.
(vi) IDR entity means an entity that may apply or has applied for
certification to conduct determinations under paragraph (c) of this
section, and that currently is not certified by the Secretary, jointly
with the Secretaries of Health and Human Services and the Treasury,
pursuant to paragraph (e) of this section.
(vii) Individually identifiable health information (IIHI) means any
information, including demographic data, that relates to the past,
present, or future physical or mental health or condition of an
individual; the provision of health care to an individual; or the past,
present, or future payment for the provision of health care to an
individual; and
(A) That identifies the individual; or
(B) With respect to which there is a reasonable basis to believe
the information can be used to identify the individual.
(viii) Material difference means a substantial likelihood that a
reasonable person with the training and qualifications of a certified
IDR entity making a payment determination would consider the submitted
information significant in determining the out of network rate and
would view the information as showing that the qualifying payment
amount is not the appropriate out-of-network rate.
(ix) Material familial relationship means any relationship as a
spouse, domestic partner, child, parent, sibling, spouse's or domestic
partner's parent, spouse's or domestic partner's sibling, spouse's or
domestic partner's child, child's parent, child's spouse or domestic
partner, or sibling's spouse or domestic partner.
(x) Material financial relationship means any financial interest of
more than five percent of total annual revenue or total annual income
of a certified IDR entity, or an officer, director, or manager thereof,
or of a reviewer or reviewing physician employed or engaged by a
certified IDR entity to conduct or participate in any review in the
Federal IDR process. The terms annual revenue and annual income do not
include mediation fees received by mediators who are also arbitrators,
provided that the mediator acts in the capacity of a mediator and does
not represent a party in the mediation.
(xi) Material professional relationship means any physician-patient
relationship, any partnership or employment relationship, any
shareholder or similar ownership interest in a professional
corporation, partnership, or other similar entity; or any independent
contractor arrangement that constitutes a material financial
relationship with any expert used by the certified IDR entity or any
officer or director of the certified IDR entity.
(xii) Qualified IDR item or service means an item or service:
(A) That is an emergency service furnished by a nonparticipating
provider or nonparticipating facility subject to the protections of 26
CFR 54.9816-4T, Sec. 2590.716-4, or 45 CFR 149.110, as applicable, for
which the conditions of 45 CFR 149.410(b) are not met, or an item or
service furnished by a nonparticipating provider at a participating
health care facility, subject to the requirements of 26 CFR 54.9816-T,
Sec. 2590.716-5, or 45 CFR 149.120, as applicable, for which the
conditions of 45 CFR 149.420(c) through (i) are not met, or air
ambulance services furnished by a nonparticipating provider of air
ambulance services subject to the protections of 26 CFR 54.9817-1T,
Sec. 2590.717-1, or 45 CFR 149.130, as applicable, and for which the
out-of-network rate is not determined by reference to an All-Payer
Model Agreement under section 1115A of the Social Security Act or a
specified State law as defined in Sec. 2590.716-3;
(B) With respect to which a provider or facility (as applicable) or
group health plan or health insurance issuer offering group health
insurance coverage submits a notification under paragraph (b)(2) of
this section;
(C) That is not an item or service that is the subject of an open
negotiation under paragraph (b)(1) of this section; and
(D) That is not an item or service for which a notification under
paragraph (b)(2) of this section is submitted during the 90-calendar-
day period under paragraph (c)(4)(vi)(B) of this section, but that may
include such an item or service if the notification is submitted during
the subsequent 30-business-day period under paragraph (c)(4)(vi)(C) of
this section.
(xiii) Unsecured IIHI means IIHI that is not rendered unusable,
unreadable, or indecipherable to unauthorized persons through the use
of a technology or methodology specified by the Secretary, jointly with
the Secretary of the Treasury and the Secretary of Health and Human
Services.
(b) Determination of payment amount through open negotiation and
initiation of the Federal IDR process--(1) Determination of payment
amount through open negotiation--(i) In general. With respect to an
item or service that meets the requirements of paragraph (a)(2)(xii)(A)
of this section, the provider, facility, or provider of air ambulance
services or the group health plan or health insurance issuer offering
group or individual health insurance coverage may, during the 30-
business-day period beginning on the day the provider, facility, or
provider of air ambulance services receives an initial payment or
notice of denial of payment regarding the item or service, initiate an
open negotiation period for purposes of determining the out-of-network
rate for such item or service. To initiate the open negotiation period,
a party must send a notice to the other party (open negotiation notice)
in accordance with paragraph (b)(1)(ii) of this section.
(ii) Open negotiation notice--(A) Content. The open negotiation
notice must include information sufficient to identify the item(s) and
service(s) (including the date(s) the item(s) or service(s) were
furnished, the service code, and initial payment amount, if
applicable), an offer of an out-of-network rate, and contact
information for the party sending the open negotiation notice.
(B) Manner. The open negotiation notice must be provided, using the
standard form developed by the Secretary, in writing within 30 business
days beginning on the day the provider, facility, or provider of air
ambulance services receives an initial payment or a notice of denial of
payment from the plan or issuer regarding the item or service. The day
on which the open negotiation notice is first sent by a party is the
date the 30-business-day open negotiation period begins. This notice
may be provided to the other party electronically (such as by email) if
the following two conditions are satisfied--
(1) The party sending the open negotiation notice has a good faith
belief that the electronic method is readily accessible by the other
party; and
(2) The notice is provided in paper form free of charge upon
request.
(2) Initiating the Federal IDR process--(i) In general. With
respect to an item or service for which the parties do not agree upon
an out-of-network rate by the last day of the open negotiation period
under paragraph (b)(1) of this section, either party may initiate the
Federal IDR process. To initiate the Federal IDR process, a party must
submit a written notice of IDR initiation to the other party and to the
Secretary, using the standard form developed by the Secretary, during
the 4-business-day period beginning on the 31st business day after the
start of the open negotiation period.
(ii) Exception for items and services provided by certain
nonparticipating
[[Page 56114]]
providers and facilities. A party may not initiate the Federal IDR
process with respect to an item or service if, with respect to that
item or service, the party knows (or reasonably should have known) that
the provider or facility provided notice and received consent under 45
CFR 149.410(b) or 149.420(c) through (i).
(iii) Notice of IDR initiation--(A) Content. The notice of IDR
initiation must include:
(1) Information sufficient to identify the qualified IDR items or
services under dispute (and whether the qualified IDR items or services
are designated as batched items and services as described in paragraph
(c)(3) of this section), including the date(s) and location the item or
service was furnished, the type of item or service (such as whether the
qualified IDR item or service is an emergency service as defined in 26
CFR 54.9816-4T(c)(2)(i), Sec. 2590.716-4(c)(2)(i), or 45 CFR
149.110(c)(2)(i), as applicable, an emergency service as defined in 26
CFR 54.9816-4T(c)(2)(ii), Sec. 2590.716-4(c)(2)(ii), or 45 CFR
149.110(c)(2)(ii), as applicable, or a nonemergency service; and
whether any service is a professional service or facility-based
service), corresponding service codes, place of service code, the
amount of cost sharing allowed, and the amount of the initial payment
made for the qualified IDR item or service, if applicable;
(2) Names of the parties involved and contact information,
including name, email address, phone number, and mailing address;
(3) State where the qualified IDR item or service was furnished;
(4) Commencement date of the open negotiation period under
paragraph (b)(1) of this section;
(5) Preferred certified IDR entity;
(6) An attestation that the items and services under dispute are
qualified IDR items or services;
(7) Qualifying payment amount;
(8) Information about the qualifying payment amount as described in
Sec. 2590.716-6(d); and
(9) General information describing the Federal IDR process as
specified by the Secretary.
(B) Manner. The initiating party must provide written notice of IDR
initiation to the other party. The initiating party may satisfy this
requirement by furnishing the notice of IDR initiation to the other
party electronically (such as by email) if the following two conditions
are satisfied -
(1) The initiating party has a good faith belief that the
electronic method is readily accessible by the other party; and
(2) The notice is provided in paper form free of charge upon
request.
(C) Notice to the Secretary. The initiating party must also furnish
the notice of IDR initiation to the Secretary by submitting the notice
through the Federal IDR portal. The initiation date of the Federal IDR
process will be the date of receipt by the Secretary.
(c) Federal IDR process following initiation--(1) Selection of
certified IDR entity--(i) In general. The plan or issuer or the
provider, facility, or provider of air ambulance services receiving the
notice of IDR initiation under paragraph (b)(2) of this section may
agree or object to the preferred certified IDR entity identified in the
notice of IDR initiation. If the party in receipt of the notice of IDR
initiation fails to object within 3 business days, the preferred
certified IDR entity identified in the notice of IDR initiation will be
selected and will be treated as jointly agreed to by the parties,
provided that the certified IDR entity does not have a conflict of
interest. If the party in receipt of the notice of IDR initiation
objects, that party must notify the initiating party of the objection
and propose an alternative certified IDR entity. The initiating party
must then agree or object to the alternative certified IDR entity; if
the initiating party fails to agree or object to the alternative
certified IDR entity, the alternative certified IDR entity will be
selected and will be treated as jointly agreed to by the parties. In
order to select a preferred certified IDR entity, the plan or issuer
and the provider, facility, or provider of air ambulance services must
jointly agree on a certified IDR entity not later than 3 business days
after the initiation date of the Federal IDR process. If the plan or
issuer and the provider, facility, or provider of air ambulance
services fail to agree upon a certified IDR entity within that time,
the Secretary shall select a certified IDR entity in accordance with
paragraph (c)(1)(iv) of this section.
(ii) Requirements for selected certified IDR entity. The certified
IDR entity selected must be an IDR entity certified under paragraph (e)
of this section, that:
(A) Does not have a conflict of interest as defined in paragraph
(a)(2) of this section;
(B) Ensures that assignment of personnel to a payment determination
and decisions regarding hiring, compensation, termination, promotion,
or other similar matters related to personnel assigned to the dispute
are not made based upon the likelihood that the assigned personnel will
support a particular party to the determination being disputed other
than as outlined under paragraph (c)(4)(iii) of this section; and
(C) Ensures that any personnel assigned to a payment determination
do not have any conflicts of interests as defined in paragraph (a)(2)
of this section regarding any party to the dispute within the 1 year
immediately preceding an assignment of dispute determination, similar
to the requirements laid out in 18 U.S.C. 207(b).
(iii) Notice of certified IDR entity selection. Upon the selection
of a certified IDR entity, in accordance with paragraph (c)(1)(i) of
this section, the plan or issuer or the provider or emergency facility
that submitted the notice of IDR initiation under paragraph (b)(2) of
this section must notify the Secretary of the selection as soon as
reasonably practicable, but no later than 1 business day after such
selection, through the Federal IDR portal. In addition, if the non-
initiating party believes that the Federal IDR process is not
applicable, the non-initiating party must also provide information
regarding the Federal IDR process's inapplicability through the Federal
IDR portal by the same date that the notice of certified IDR entity
selection must be submitted.
(A) Content. If the parties have agreed on the selection of a
certified IDR entity or the party in receipt of the notice of IDR
initiation has not objected to the other party's selection, the notice
of the certified IDR entity selection must include the following
information:
(1) Name of the certified IDR entity;
(2) The certified IDR entity number; and
(3) Attestation by both parties, or by the initiating party if the
non-initiating party fails to object to the selection of the certified
IDR entity, that the selected certified IDR entity meets the
requirements of paragraph (c)(1)(ii) of this section.
(B) [Reserved]
(iv) Failure to select a certified IDR entity. If the plan or
issuer and the provider, facility, or provider of air ambulance
services fail to select a certified IDR entity in accordance with
paragraph (c)(1)(i) of this section, the initiating party must notify
the Secretary of the failure no later than 1 business day after the
date of such failure (or in other words, 4 business days after
initiation of the Federal IDR process) by electronically submitting the
notice as described in paragraph (c)(1)(iii) of this section but
indicating that the parties have failed to select a certified IDR
entity. In addition, if the non-initiating party believes that the
Federal IDR process is not applicable, the non-initiating party must
also
[[Page 56115]]
provide information regarding the Federal IDR process's inapplicability
through the Federal IDR portal by the same date that the notice of
failure to select must be submitted. Upon notification of the failure
of the parties to select a certified IDR entity, the Secretary will
select a certified IDR entity that charges a fee within the allowed
range of certified IDR entity fees through a random selection method
not later than 6 business days after the date of initiation of the
Federal IDR process and will notify the plan or issuer and the provider
or facility of the selection. If there are insufficient certified IDR
entities that charge a fee within the allowed range of certified IDR
entity fees available to arbitrate the dispute, the Secretary, jointly
with the Secretary of Health and Human Services and Secretary of the
Treasury, will select a certified IDR entity that has received
approval, as described in paragraph (e)(2)(vi)(B) of this section, to
charge a fee outside of the allowed range of certified IDR entity fees.
(v) Review by certified IDR entity. After selection by the parties
(including when the initiating party selects a certified IDR entity and
the other party does not object), or by the Secretary under paragraph
(c)(1)(iv) of this section, the certified IDR entity must review the
selection and attest that it meets the requirements of paragraph
(c)(1)(ii) of this section. If the certified IDR entity is unable to
attest that it meets the requirements of paragraph (c)(1)(ii) within 3
business days of selection, the parties, upon notification, must select
another certified IDR entity under paragraph (c)(1) of this section,
treating the date of notification of the failure to attest to the
requirements of (c)(1)(ii) as the date of initiation of the Federal IDR
process for purposes of the time periods in paragraphs (c)(1)(i) and
(iv) of this section. Additionally, the certified IDR entity selected
must review the information submitted in the notice of IDR initiation
to determine whether the Federal IDR process applies. If the Federal
IDR process does not apply, the certified IDR entity must notify the
Secretary and the parties within 3 business days of making that
determination.
(2) Authority to continue negotiations--(i) In general. If the
parties to the Federal IDR process agree on an out-of-network rate for
a qualified IDR item or service after providing the notice of IDR
initiation to the Secretary consistent with paragraph (b)(2) of this
section, but before the certified IDR entity has made its payment
determination, the amount agreed to by the parties for the qualified
IDR item or service will be treated as the out-of-network rate for the
qualified IDR item or service. To the extent the amount exceeds the
initial payment amount (or initial denial of payment) and any cost
sharing paid or required to be paid by the participant or beneficiary,
payment must be made directly by the plan or issuer to the
nonparticipating provider, facility, or nonparticipating provider of
air ambulance services, not later than 30 business days after the
agreement is reached. In no instance may either party seek additional
payment from the participant or beneficiary, including in instances in
which the out-of-network rate exceeds the qualifying payment amount.
The initiating party must send a notification to the Secretary and to
the certified IDR entity (if selected) electronically, through the
Federal IDR portal, as soon as possible, but no later than 3 business
days after the date of the agreement. The notification must include the
out-of-network rate for the qualified IDR item or service and
signatures from authorized signatories for both parties.
(ii) Method of allocation of the certified IDR entity fee. In the
case of an agreement described in paragraph (c)(2)(i) of this section,
the certified IDR entity is required to return half of each parties'
certified IDR entity fee, unless directed otherwise by both parties.
The administrative fee under paragraph (d)(2) of this section will not
be returned to the parties.
(3) Treatment of batched items and services--(i) In general.
Batched items and services may be submitted and considered jointly as
part of one payment determination by a certified IDR entity only if the
batched items and services meet the requirements of this paragraph
(c)(3)(i). Batched items and services submitted and considered jointly
as part of one payment determination under this paragraph (c)(3)(i) are
treated as a batched determination and subject to the fee for batched
determinations under this section.
(A) The qualified IDR items and services are billed by the same
provider or group of providers, the same facility, or the same provider
of air ambulance services. Items and services are billed by the same
provider or group of providers, the same facility, or the same provider
of air ambulance services if the items or services are billed with the
same National Provider Identifier or Tax Identification Number;
(B) Payment for the qualified IDR items and services would be made
by the same plan or issuer;
(C) The qualified IDR items and services are the same or similar
items and services. The qualified IDR items and services are considered
to be the same or similar items or services if each is billed under the
same service code, or a comparable code under a different procedural
code system, such as Current Procedural Terminology (CPT) codes with
modifiers, if applicable, Healthcare Common Procedure Coding System
(HCPCS) with modifiers, if applicable, or Diagnosis-Related Group (DRG)
codes with modifiers, if applicable; and
(D) All the qualified IDR items and services were furnished within
the same 30-business-day period, or the same 90-calendar-day period
under paragraph (c)(4)(vi)(B) of this section, as applicable.
(ii) Treatment of bundled payment arrangements. In the case of
qualified IDR items and services billed by a provider, facility, or
provider of air ambulance services as part of a bundled payment
arrangement, or where a plan or issuer makes or denies an initial
payment as a bundled payment, the qualified IDR items and services may
be submitted as part of one payment determination. Bundled payment
arrangements submitted under this paragraph (c)(3)(ii) are subject to
the rules for batched determinations and the certified IDR entity fee
for single determinations.
(4) Payment determination for a qualified IDR item or service--(i)
Submission of offers. Not later than 10 business days after the
selection of the certified IDR entity, the plan or issuer and the
provider, facility, or provider of air ambulance services:
(A) Must each submit to the certified IDR entity:
(1) An offer of an out-of-network rate expressed as both a dollar
amount and the corresponding percentage of the qualifying payment
amount represented by that dollar amount;
(2) Information requested by the certified IDR entity relating to
the offer.
(3) The following additional information, as applicable--
(i) For providers and facilities, information on the size of the
provider's practice or of the facility (if applicable). Specifically, a
group of providers must specify whether the providers' practice has
fewer than 20 employees, 20 to 50 employees, 51 to 100 employees, 101
to 500 employees, or more than 500 employees. For facilities, the
facility must specify whether the facility has 50 or fewer employees,
51 to 100 employees, 101 to 500 employees, or more than 500 employees;
(ii) For providers and facilities, information on the practice
specialty or type, respectively (if applicable);
[[Page 56116]]
(iii) For plans and issuers, information on the coverage area of
the plan or issuer, the relevant geographic region for purposes of the
qualifying payment amount, whether the coverage is fully-insured or
partially or fully self-insured; and
(iv) The qualifying payment amount for the applicable year for the
same or similar item or service as the qualified IDR item or service.
(B) May each submit to the certified IDR entity any information
relating to the offer that was submitted by either party, except that
the information may not include information on factors described in
paragraph (c)(4)(v) of this section.
(ii) Payment determination and notification. Not later than 30
business days after the selection of the certified IDR entity, the
certified IDR entity must:
(A) Select as the out-of-network rate for the qualified IDR item or
service one of the offers submitted under paragraph (c)(4)(i) of this
section, taking into account the considerations specified in paragraph
(c)(4)(iii) of this section (as applied to the information provided by
the parties pursuant to paragraph (c)(4)(i) of this section). The
certified IDR entity must select the offer closest to the qualifying
payment amount unless the certified IDR entity determines that credible
information submitted by either party under paragraph (c)(4)(i) clearly
demonstrates that the qualifying payment amount is materially different
from the appropriate out-of-network rate, or if the offers are equally
distant from the qualifying payment amount but in opposing directions.
In these cases, the certified IDR entity must select the offer as the
out-of-network rate that the certified IDR entity determines best
represents the value of the qualified IDR item or services, which could
be either offer.
(B) Notify the plan or issuer and the provider or facility, as
applicable, of the selection of the offer under paragraph (c)(4)(ii)(A)
of this section, and provide the written decision required under
(c)(4)(vi) of this section.
(iii) Considerations in determination. In determining which offer
to select, the certified IDR entity must consider:
(A) The qualifying payment amount(s) for the applicable year for
the same or similar item or service.
(B) Information requested by the certified IDR entity under
paragraph (c)(4)(i)(A)(2) of this section relating to the offer, to the
extent a party provides credible information.
(C) Additional information submitted by a party, provided the
information is credible and relates to the circumstances described in
paragraphs (c)(4)(iii)(C)(1) through (5) of this section, with respect
to a qualified IDR item or service of a nonparticipating provider,
facility, group health plan, or health insurance issuer of group or
individual health insurance coverage that is the subject of a payment
determination. This information must also clearly demonstrate that the
qualifying payment amount is materially different from the appropriate
out-of-network rate.
(1) The level of training, experience, and quality and outcomes
measurements of the provider or facility that furnished the qualified
IDR item or service (such as those endorsed by the consensus-based
entity authorized in section 1890 of the Social Security Act).
(2) The market share held by the provider or facility or that of
the plan or issuer in the geographic region in which the qualified IDR
item or service was provided.
(3) The acuity of the participant, or beneficiary, receiving the
qualified IDR item or service, or the complexity of furnishing the
qualified IDR item or service to the participant or beneficiary.
(4) The teaching status, case mix, and scope of services of the
facility that furnished the qualified IDR item or service, if
applicable.
(5) Demonstration of good faith efforts (or lack thereof) made by
the provider or facility or the plan or issuer to enter into network
agreements with each other, and, if applicable, contracted rates
between the provider or facility, as applicable, and the plan or
issuer, as applicable, during the previous 4 plan years.
(D) Additional information submitted by a party, provided the
information is credible and relates to the offer submitted by either
party and does not include information on factors described in
paragraph (c)(4)(v) of this section.
(iv) Examples. The rules of paragraph (c)(4)(iii) of this section
are illustrated by the following examples:
(A) Example 1--(1) Facts. A nonparticipating provider and an issuer
are parties to a payment determination in the Federal IDR process. The
nonparticipating provider submits an offer and additional written
information asserting that the provider has made good faith efforts to
enter into network agreements with the issuer. The nonparticipating
provider fails to provide any documentation of these efforts, such as
correspondence or records of conversations with representatives of the
issuer.
(2) Conclusion. In this Example 1, the nonparticipating provider
has submitted additional information. However, this information is not
credible, as the nonparticipating provider has failed to provide any
documentation in support of the provider's assertions of good faith
efforts to enter into network agreements with the issuer. Therefore,
the certified IDR entity cannot consider the information.
(B) Example 2--(1) Facts. A nonparticipating provider and an issuer
are parties to a payment determination in the Federal IDR process. The
nonparticipating provider submits credible information relating to the
provider's level of training, experience, and quality and outcome
measurements from 2019. The provider also submits credible information
that clearly demonstrates that the provider's level of training and
expertise was necessary for providing the service that is the subject
of the payment determination to the particular patient. Further, the
provider submits credible information that clearly demonstrates that
the qualifying payment amount generally presumes the service would be
delivered by a provider with a lower level of training, experience, and
quality and outcome measurements. This information, taken together,
demonstrates that the qualifying payment amount is not an appropriate
payment amount and the provider submits an offer that is higher than
the qualifying payment amount and commensurate with the provider's
level of training, experience, and quality and outcome measurements
with respect to the service provided. The issuer submits the qualifying
payment amount as its offer with no additional information.
(2) Conclusion. In this Example 2, the nonparticipating provider
has submitted information that is credible. Moreover, the credible
information clearly demonstrates that the qualifying payment amount
does not adequately take into account the provider's level of training,
experience, and quality and outcome measurements with respect to the
service provided, and that the appropriate out-of-network rate should
therefore be higher than the qualifying payment amount. Accordingly,
the certified IDR entity must select the provider's offer, as that
offer best represents the value of the service that is the subject of
the payment determination.
(C) Example 3--(1) Facts. A nonparticipating provider and an issuer
are parties to a payment determination in the Federal IDR process. The
nonparticipating provider submits credible information to the certified
IDR entity relating to the acuity of the patient that received the
service, and the complexity of furnishing the service to
[[Page 56117]]
the patient, by providing details of the service at issue and the
training required to furnish the complex service. The provider contends
that this information demonstrates that the qualifying payment amount
is not an appropriate payment amount, and the provider submits an offer
that is higher than the qualifying payment amount and equal to what the
provider believes is commensurate with the acuity of the patient and
the complexity of the service that is the subject of the payment
determination. However, the evidence submitted by the provider does not
clearly demonstrate that the qualifying payment amount fails to
encompass the acuity and complexity of the service. The issuer submits
the qualifying payment amount as its offer, along with credible
information that demonstrates how the qualifying payment amount was
calculated for this particular service, taking into consideration the
acuity of the patient and the complexity of the service.
(2) Conclusion. The information submitted by the provider to the
certified IDR entity is credible with respect to the acuity of the
patient and complexity of the service. However, in this example, the
provider has not clearly demonstrated that the qualifying payment
amount is materially different from the appropriate out-of-network
rate, based on the acuity of the patient and the complexity of the
service that is the subject of the payment determination. Accordingly,
the certified IDR entity must select the offer closest to the
qualifying payment amount, which is the issuer's offer.
(D) Example 4--(1) Facts. A nonparticipating provider and an issuer
are parties to a payment determination in the Federal IDR process. The
issuer submits credible information demonstrating that the patent for
the item that is the subject of the payment determination has expired,
including written documentation that demonstrates how much the cost of
the item was at the time the provider rendered service and how the
qualifying payment amount exceeds that cost. The issuer submits an
offer that is lower than the qualifying payment amount and commensurate
with the cost of the item at the time service was rendered. The
nonparticipating provider submits the qualifying payment amount as its
offer and also submits credible information demonstrating the
provider's level of training, experience, and quality and outcome
measurements from 2019, but the provider does not explain how this
additional information is relevant to the cost of the item.
(2) Conclusion. In this Example 4, both the nonparticipating
provider and issuer submitted information that is credible and that may
be considered by the certified IDR entity. However, only the issuer
provided credible information that was relevant to the service that is
the subject of the payment determination. Moreover, the issuer has
clearly demonstrated that the qualifying payment amount does not
adequately take into account the complexity of the item furnished--in
this case that the item is no longer patent protected. While the
provider submitted credible information, the provider failed to show
how the information was relevant to the item that is the subject of the
payment determination. Accordingly, the certified IDR entity must
select the offer that best represents the value of the item, which is
the issuer's offer in this example.
(v) Prohibition on consideration of certain factors. In determining
which offer to select, the certified IDR entity must not consider:
(A) Usual and customary charges (including payment or reimbursement
rates expressed as a proportion of usual and customary charges);
(B) The amount that would have been billed by the provider or
facility with respect to the qualified IDR item or service had the
provisions of 45 CFR 149.410 and 149.420 (as applicable) not applied;
or
(C) The payment or reimbursement rate for items and services
furnished by the provider or facility payable by a public payor,
including under the Medicare program under title XVIII of the Social
Security Act; the Medicaid program under title XIX of the Social
Security Act; the Children's Health Insurance Program under title XXI
of the Social Security Act; the TRICARE program under chapter 55 of
title 10, United States Code; chapter 17 of title 38, United States
Code; or demonstration projects under section 1115 of the Social
Security Act.
(vi) Written decision. (A) The certified IDR entity must explain
its determination in a written decision submitted to the parties and
the Secretary, in a form and manner specified by the Secretary;
(B) If the certified IDR entity does not choose the offer closest
to the qualifying payment amount, the certified IDR entity's written
decision must include an explanation of the credible information that
the certified IDR entity determined demonstrated that the qualifying
payment amount was materially different from the appropriate out-of-
network rate, based on the considerations allowed under paragraphs
(c)(4)(iii)(B) through (D) of this section, with respect to the
qualified IDR item or service.
(vii) Effects of determination--(A) Binding. A determination made
by a certified IDR entity under paragraph (c)(4)(ii) of this section:
(1) Is binding upon the parties, in the absence of fraud or
evidence of intentional misrepresentation of material facts presented
to the certified IDR entity regarding the claim; and
(2) Is not subject to judicial review, except in a case described
in any of paragraphs (1) through (4) of section 10(a) of title 9,
United States Code.
(B) Suspension of certain subsequent IDR requests. In the case of a
determination made by a certified IDR entity under paragraph (c)(4)(ii)
of this section, the party that submitted the initial notification
under paragraph (b)(2) of this section may not submit a subsequent
notification involving the same other party with respect to a claim for
the same or similar item or service that was the subject of the initial
notification during the 90-calendar-day period following the
determination.
(C) Subsequent submission of requests permitted. If the end of the
open negotiation period specified in paragraph (b)(1) of this section
occurs during the 90-calendar-day suspension period regarding claims
for the same or similar item or service that were the subject of the
initial notice of IDR determination as described in paragraph
(c)(4)(vi) of this section, either party may initiate the Federal IDR
process for those claims by submitting a notification as specified in
paragraph (b)(2) of this section during the 30-business-day period
beginning on the day after the last day of the 90-calendar-day
suspension period.
(viii) Recordkeeping requirements. The certified IDR entity must
maintain records of all claims and notices associated with the Federal
IDR process with respect to any determination for 6 years. The
certified IDR entity must make these records available for examination
by the plan, issuer, provider, facility, or provider of air ambulance
services, or a State or Federal oversight agency upon request, except
to the extent the disclosure would violate either State or Federal
privacy law.
(ix) Payment. If applicable, the amount of the offer selected by
the certified IDR entity (less the sum of the initial payment and any
cost sharing paid or owed by the participant or beneficiary) must be
paid directly to the provider, facility, or provider of air ambulance
services not later than 30 calendar days after the determination by
[[Page 56118]]
the certified IDR entity. If the offer selected by the certified IDR
entity is less than the sum of the initial payment and any cost sharing
paid by the participant or beneficiary, the provider, facility, or
provider of air ambulance services will be liable to the plan or issuer
for the difference. The provider, facility, or provider of air
ambulance services must pay the difference directly to the plan or
issuer not later than 30 calendar days after the determination by the
certified IDR entity.
(d) Costs of IDR process--(1) Certified IDR entity fee. (i) With
respect to the Federal IDR process described in paragraph (c) of this
section, the party whose offer submitted to the certified IDR entity
under paragraph (c)(4)(ii)(A) of this section is not selected is
responsible for the payment to the certified IDR entity of the
predetermined fee charged by the certified IDR entity.
(ii) Each party to a determination for which a certified IDR entity
is selected under paragraph (c)(1) of this section must pay the
predetermined certified IDR entity fee charged by the certified IDR
entity to the certified IDR entity at the time the parties submit their
offers under (c)(4)(i) of this section. The certified IDR entity fee
paid by the prevailing party whose offer is selected by the certified
IDR entity will be returned to that party within 30 business days
following the date of the certified IDR entity's determination.
(2) Administrative fee. (i) Each party to a determination for which
a certified IDR entity is selected under paragraph (c)(1) of this
section must, at the time the certified IDR entity is selected under
paragraph (c)(1), pay to the certified IDR entity a non-refundable
administrative fee due to the Secretary for participating in the
Federal IDR process described in this section.
(ii) The administrative fee amount will be established in guidance
published annually by the Secretary in a manner such that the total
fees paid for a year are estimated to be equal to the projected amount
of expenditures by the Departments of the Treasury, Labor, and Health
and Human Services for the year in carrying out the Federal IDR
process.
(e) Certification of IDR entity--(1) In general. In order to be
selected under paragraph (c)(1) of this section--
(i) An IDR entity must meet the standards described in this
paragraph (e) and be certified by the Secretary, jointly with the
Secretaries of Health and Human Services and the Treasury, as set forth
in this paragraph (e) of this section and guidance promulgated by the
Secretary. Once certified, the IDR entity will be provided with a
certified IDR entity number.
(ii) An IDR entity must provide written documentation to the
Secretary regarding general company information (such as contact
information, Taxpayer Identification Number, and website), as well as
the applicable service area in which the IDR entity intends to conduct
payment determinations under the Federal IDR process. IDR entities may
choose to submit their application for all States, or self-limit to a
particular subset of States.
(iii) An IDR entity that the Secretary, jointly with the Secretary
of the Treasury and the Secretary of Health and Human Services,
certifies must enter into an agreement as a condition of certification.
The agreement shall include specified provisions encompassed by this
section, including, but not limited to, the requirements applicable to
certified IDR entities when making payment determinations as well as
the requirements regarding certification and revocation (such as
specifications for wind down activities and reallocation of certified
IDR entity fees, where warranted).
(2) Requirements. An IDR entity must provide written documentation
to the Secretary through the Federal IDR portal that demonstrates that
the IDR entity satisfies the following standards to be a certified IDR
entity under this paragraph (e):
(i) Possess (directly or through contracts or other arrangements)
sufficient arbitration and claims administration of health care
services, managed care, billing and coding, medical and legal expertise
to make the payment determinations described in paragraph (c) of this
section within the time prescribed in paragraph (c)(4)(ii) of this
section.
(ii) Employ (directly or through contracts or other arrangements) a
sufficient number of personnel to make the determinations described in
paragraph (c) of this section within the time prescribed by (c)(4)(ii)
of this section. To satisfy this standard, the written documentation
must include a description of the IDR entity's organizational structure
and capabilities, including an organizational chart and the
credentials, responsibilities, and number of personnel employed to make
determinations described in paragraph (c) of this section.
(iii) Maintain a current accreditation from a nationally recognized
and relevant accrediting organization, such as URAC, or ensure that it
otherwise possesses the requisite training to conduct payment
determinations (for example, providing documentation that personnel
employed by the IDR entity have completed arbitration training by the
American Arbitration Association, the American Health Law Association,
or a similar organization);
(iv) Have a process to ensure that no conflict of interest, as
defined in paragraph (a)(2) of this section, exists between the parties
and the personnel the certified IDR entity assigns to a payment
determination to avoid violating paragraph (c)(1)(ii) of this section,
including policies and procedures for conducting ongoing audits for
conflicts of interest, to ensure that should any arise, the certified
IDR entity has procedures in place to inform the Secretary, jointly
with the Secretary of the Treasury and the Secretary of Health and
Human Services of the conflict of interest and to mitigate the risk by
reassigning the dispute to other personnel in the event that any
personnel previously assigned have a conflict of interest.
(v) Have a process to maintain the confidentiality of IIHI obtained
in the course of conducting determinations. A certified IDR entity's
responsibility to comply with these confidentiality requirements shall
survive revocation of the IDR entity's certification for any reason,
and IDR entities must comply with the record retention and disposal
requirements described in this section. Under this process, once
certified, the certified IDR entity must comply with the following
requirements:
(A) Privacy. The certified IDR entity may create, collect, handle,
disclose, transmit, access, maintain, store, and/or use IIHI, only to
perform:
(1) The certified IDR entity's required duties described in this
section; and
(2) Functions related to carrying out additional obligations as may
be required under applicable Federal or State laws or regulations.
(B) Security. (1) The certified IDR entity must ensure the
confidentiality of all IIHI it creates, obtains, maintains, stores, and
transmits;
(2) The certified IDR entity must protect against any reasonably
anticipated threats or hazards to the security of this information;
(3) The certified IDR entity must ensure that IIHI is securely
destroyed or disposed of in an appropriate and reasonable manner 6
years from either the date of its creation or the first date on which
the certified IDR entity had access to it, whichever is earlier;
(4) The certified IDR entity must implement policies and procedures
to prevent, detect, contain, and correct security violations in the
event of a breach of IIHI;
[[Page 56119]]
(C) Breach notification. The certified IDR entity must, following
the discovery of a breach of unsecured IIHI, notify of the breach the
provider, facility, or provider of air ambulance services; the plan and
issuer; the Secretary, jointly with the Secretary of the Treasury and
the Secretary of Health and Human Services; and each individual whose
unsecured IIHI has been, or is reasonably believed to have been,
subject to the breach, to the extent possible.
(1) Breaches treated as discovered. For purposes of this paragraph
(e)(2)(v)(C), a breach shall be treated as discovered by a certified
IDR entity as of the first day on which the breach is known to the
certified IDR entity or, by exercising reasonable diligence, would have
been known to the certified IDR entity. A certified IDR entity shall be
deemed to have knowledge of a breach if the breach is known, or by
exercising reasonable diligence would have been known, to any person,
other than the person committing the breach, who is an employee,
officer, or other agent of the certified IDR entity;
(2) Timing of notification. A certified IDR entity must provide the
notification required by this paragraph (e)(2)(v)(C) without
unreasonable delay and in no case later than 60 calendar days after
discovery of a breach.
(3) Content of notification. The notification required by this
paragraph (e)(2)(v)(C) must include, to the extent possible:
(i) The identification of each individual whose unsecured IIHI has
been, or is reasonably believed by the certified IDR entity to have
been, subject to the breach;
(ii) A brief description of what happened, including the date of
the breach and the date of the discovery of the breach, to the extent
known;
(iii) A description of the types of unsecured IIHI that were
involved in the breach (for example whether full name, social security
number, date of birth, home address, account number, diagnosis,
disability code, or other types of information were involved);
(iv) A brief description of what the certified IDR entity involved
is doing to investigate the breach, to mitigate harm to the affected
parties, and to protect against any further breaches; and
(v) Contact procedures for individuals to ask questions or learn
additional information, which must include a toll-free telephone
number, email address, website, or postal address.
(4) Method for providing notification. A certified IDR entity must
submit the notification required by this paragraph (e)(2)(v)(C) in
written form (in clear and understandable language) either on paper or
electronically through the Federal IDR portal or electronic mail.
(D) Application to contractor and subcontractors. The certified IDR
entity must ensure compliance with this paragraph (e)(2)(v) of this
section by any contractor or subcontractor with access to IIHI
performing any duties related to the Federal IDR process.
(vi) Meet appropriate indicators of fiscal integrity and stability
by demonstrating that the certified IDR entity has a system of
safeguards and controls in place to prevent and detect improper
financial activities by its employees and agents to assure fiscal
integrity and accountability for all certified IDR entity fees and
administrative fees received, held, and disbursed and by submitting 3
years of financial statements or, if not available, other information
to demonstrate fiscal stability of the IDR entity;
(vii) Provide a fixed fee for single determinations and a separate
fixed fee for batched determinations within the upper and lower limits
for each, as set forth in guidance issued by the Secretary. The
certified IDR entity may not charge a fee that is not within the
approved limits as set forth in guidance unless the certified IDR
entity or IDR entity seeking certification receives written approval
from the Secretary to charge a flat rate beyond the upper or lower
limits approved by the Secretary for fees. The certified IDR entity or
IDR entity seeking certification may update its fees and seek approval
from the Secretary to charge a flat fee beyond the upper or lower
limits for fees, annually as provided in guidance. In order for the
certified IDR entity to receive the Secretary's written approval to
charge a flat fee beyond the upper or lower limits for fees as set
forth in guidance, it must satisfy both conditions in paragraphs
(e)(2)(vii)(A) and (B) of this section as follows:
(A) Submit, in writing, a proposal to the Secretary that includes:
(1) The alternative flat fee the certified IDR entity or IDR entity
seeking certification believes is appropriate for the certified IDR
entity or IDR entity seeking certification to charge;
(2) A description of the circumstances that require the alternative
fee; and
(3) A description of how the alternative flat rate will be used to
mitigate the effects of these circumstances; and
(B) Receive from the Secretary, jointly with the Secretary of the
Treasury and the Secretary of Health and Human Services, written
approval to charge the fee documented in the certified IDR entity's or
the IDR entity seeking certification's written proposal.
(viii) Have a procedure in place to retain the certified IDR entity
fees described in paragraph (d)(1) of this section paid by both parties
in a trust or escrow account and to return the certified IDR entity fee
paid by the prevailing party of an IDR payment determination, or half
of each party's certified IDR entity fee in the case of an agreement
described in paragraph (c)(2)(i) of this section, within 30 business
days following the date of the determination;
(ix) Have a procedure in place to retain the administrative fees
described in paragraph (d)(2) of this section and to remit the
administrative fees to the Secretary in accordance with the timeframe
and procedures set forth in guidance published by the Secretary;
(x) Discharge its responsibilities in accordance with paragraph (c)
of this section, including not making any determination with respect to
which the certified IDR entity would not be eligible for selection
pursuant to paragraph (c)(1) of this section; and
(xi) Collect the information required to be reported to the
Secretary under paragraph (f) of this section and report the
information on a timely basis in the form and manner provided in
guidance published by the Secretary.
(3) Conflict-of-interest standards. In addition to the general
standards set forth in paragraph (e)(2)(iv) of this section, an IDR
entity must provide written documentation that the IDR entity satisfies
the standards to be a certified IDR entity under this paragraph (e)(3).
(i) The IDR entity must provide an attestation indicating that it
does not have a conflict of interest as defined in paragraph (a)(2) of
this section;
(ii) The IDR entity must have procedures in place to ensure that
personnel assigned to a determination do not have any conflicts of
interest regarding any party to the dispute within the 1 year
immediately preceding an assignment of dispute determination, similar
to the requirements laid out in 18 U.S.C. 207(b). In order to satisfy
this requirement, if certified, the IDR entity must ensure that any
personnel assigned to a determination do not have any conflicts of
interest as defined in paragraph (a)(2) of this section.
(iii) Following certification under this paragraph (e), if a
certified IDR entity acquires control of, becomes controlled by, or
comes under common control with any entity described in paragraph
(e)(3)(i) of this section, the certified IDR entity must notify the
Secretary in
[[Page 56120]]
writing no later than 3 business days after the acquisition or exercise
of control and shall be subject to the revocation of certification
under paragraph (e)(6)(ii) of this section.
(4) Period of certification. Subject to paragraphs (e)(5) and (6)
of this section, each certification (including a recertification) of a
certified IDR entity under the process described in paragraph (e)(1) of
this section will be effective for a 5-year period.
(5) Petition for denial or revocation--(i) In general. An
individual, provider, facility, provider of air ambulance services,
plan, or issuer may petition for a denial of a certification for an IDR
entity or a revocation of a certification for a certified IDR entity
for failure to meet a requirement of this section using the standard
form and manner set forth in guidance to be issued by the Secretary.
The petition for denial of a certification must be submitted within the
timeframe set forth in guidance issued by the Secretary.
(ii) Content of petition. The individual, provider, facility,
provider of air ambulance services, plan, or issuer seeking denial or
revocation of certification must submit a written petition using the
standard form issued by the Secretary including the following
information:
(A) The identity of the IDR entity seeking certification or
certified IDR entity that is the subject of the petition;
(B) The reason(s) for the petition;
(C) Whether the petition seeks denial or revocation of a
certification;
(D) Documentation to support the reasons outlined in the petition;
and
(E) Other information as may be required by the Secretary.
(iii) Process. (A) The Secretary, jointly with the Secretary of the
Treasury and the Secretary of Health and Human Services, will
acknowledge receipt of the petition within 10 business days of receipt
of the petition.
(B) If the Secretary finds that the petition adequately shows a
failure of the IDR entity seeking certification or the certified IDR
entity to follow the requirements of this paragraph (e), the Secretary,
jointly with the Secretary of the Treasury and the Secretary of Health
and Human Services, will notify the IDR entity seeking certification or
the certified IDR entity by providing a de-identified copy of the
petition. Following the notification, the IDR entity seeking
certification or certified IDR entity will have 10 business days to
provide a response. After the time period for providing the response
has passed, the Secretary, jointly with the Secretary of the Treasury
and the Secretary of Health and Human Services, will review the
response (if any), determine whether a denial or revocation of a
certification is warranted, and issue a notice of the decision to the
IDR entity or certified IDR entity and to the petitioner. This decision
will be subject to the appeal requirements of paragraph (e)(6)(v) of
this section.
(C) Effect on certification under petition. Regarding a petition
for revocation of a certified IDR entity's certification, if the
Secretary, jointly with the Secretary of the Treasury and the Secretary
of Health and Human Services, finds that the petition adequately shows
a failure to comply with the requirements of this paragraph (e),
following the Secretary's notification of the failure to the certified
IDR entity under paragraph (e)(5)(iii)(B) of this section, the
certified IDR entity may continue to work on previously assigned
determinations but may not accept new determinations until the
Secretary issues a notice of the decision to the certified IDR entity
finding that a revocation of certification is not warranted.
(6) Denial of IDR entity certification or revocation of certified
IDR entity certification--(i) Denial of IDR entity certification. The
Secretary, jointly with the Secretary of the Treasury and the Secretary
of Health and Human Services, may deny the certification of an IDR
entity under paragraph (e)(1) of this section if, during the process of
certification, including as a result of a petition described in
paragraph (e)(5) of this section, the Secretary determines the
following:
(A) The IDR entity fails to meet the applicable standards set forth
under this paragraph (e);
(B) The IDR entity has committed or participated in fraudulent or
abusive activities, including, during the certification process,
submitting fraudulent data, or submitting information or data the IDR
entity knows to be false to the Secretary, the Secretary of the
Treasury or the Secretary of Health and Human Services;
(C) The IDR entity has failed to comply with requests for
information from the Secretary, the Secretary of the Treasury, or the
Secretary of Health and Human Services as part of the certification
process;
(D) In conducting payment determinations, including those outside
the Federal IDR process, the IDR entity has failed to meet the
standards that applied to those determinations or reviews, including
standards of independence and impartiality; or
(E) The IDR entity is otherwise not fit or qualified to make
determinations under the Federal IDR process.
(ii) Revocation of certification of a certified IDR entity. The
Secretary, jointly with the Secretary of the Treasury and the Secretary
of Health and Human Services, may revoke the certification of a
certified IDR entity under paragraph (e)(1) of this section if, as a
result of an audit, a petition described in paragraph (e)(5) of this
section, or otherwise, the Secretary determines the following:
(A) The certified IDR entity has a pattern or practice of
noncompliance with any requirements of this paragraph (e);
(B) The certified IDR entity is operating in a manner that hinders
the efficient and effective administration of the Federal IDR process;
(C) The certified IDR entity no longer meets the applicable
standards for certification set forth under this paragraph (e);
(D) The certified IDR entity has committed or participated in
fraudulent or abusive activities, including submission of false or
fraudulent data to the Secretary, the Secretary of the Treasury, or the
Secretary of Health and Human Services;
(E) The certified IDR entity lacks the financial viability to
provide arbitration under the Federal IDR process;
(F) The certified IDR entity has failed to comply with requests
from the Secretary, the Secretary of the Treasury, or the Secretary of
Health and Human Services made as part of an audit, including failing
to submit all records of the certified IDR entity that pertain to its
activities within the Federal IDR process; or
(G) The certified IDR entity is otherwise no longer fit or
qualified to make determinations.
(iii) Notice of denial or revocation. The Secretary, jointly with
the Secretary of the Treasury and the Secretary of Health and Human
Services, will issue a written notice of denial to the IDR entity or
revocation to the certified IDR entity within 10 business days of the
Secretary's decision, including the effective date of denial or
revocation, the reason(s) for denial or revocation, and the opportunity
to request appeal of the denial or revocation.
(iv) Request for appeal of denial or revocation. To request an
appeal, the IDR entity or certified IDR entity must submit a request
for appeal to the Secretary within 30 business days of the date of the
notice under paragraph (e)(6)(iii) of this section of denial or
revocation and in the manner prescribed by the instructions to the
notice. During
[[Page 56121]]
this time period, the Secretary, jointly with the Secretary of the
Treasury and the Secretary of Health and Human Services, will not issue
a notice of final denial or revocation and a certified IDR entity may
continue to work on previously assigned determinations but may not
accept new determinations. If the IDR entity or certified IDR entity
does not timely submit a request for appeal of the denial or
revocation, the Secretary, jointly with the Secretary of the Treasury
and the Secretary of Health and Human Services, will issue a notice of
final denial or revocation to the IDR entity or certified IDR entity
(if applicable) and the petitioner.
(v) Denial or final revocation. Upon notice of denial or final
revocation, the IDR entity shall not be considered a certified IDR
entity and therefore shall not be eligible to accept payment
determinations under the Federal IDR process. Moreover, after a notice
of final revocation, the IDR entity may not re-apply to be a certified
IDR entity until on or after the 181st day after the date of the notice
of denial or final revocation.
(f) Reporting of information relating to the Federal IDR process--
(1) Reporting of information. Within 30 business days of the close of
each month, for qualified IDR items and services furnished on or after
January 1, 2022, each certified IDR entity must, in a form and manner
specified by the Secretary, report:
(i) The number of notices of IDR initiation submitted under
paragraph (b)(2) of this section to the certified IDR entity during the
immediately preceding month;
(ii) The size of the provider practices and the size of the
facilities submitting notices of IDR initiation under paragraph (b)(2)
of this section during the immediately preceding month, as required to
be provided to the certified IDR entity under paragraph (c)(4)(i)(A)(2)
of this section;
(iii) The number of such notices of IDR initiation with respect to
which a determination was made under paragraph (c)(4)(ii) of this
section;
(iv) The number of times during the month that the out-of-network
rate determined (or agreed to) under this section has exceeded the
qualifying payment amount, specified by qualified IDR items and
services;
(v) With respect to each notice of IDR initiation under paragraph
(b)(2) of this section for which such a determination was made, the
following information:
(A) A description of the qualified IDR items and services included
with respect to the notification, including the relevant billing and
service codes;
(B) The relevant geographic region for purposes of the qualifying
payment amount for the qualified IDR items and services with respect to
which the notification was provided;
(C) The amount of the offer submitted under paragraph (c)(4)(i) of
this section by the plan or issuer (as applicable) and by the provider
or facility (as applicable) expressed as a dollar amount and as a
percentage of the qualifying payment amount;
(D) Whether the offer selected by the certified IDR entity under
paragraph (c)(4) of this section was the offer submitted by the plan or
issuer (as applicable) or by the provider or facility (as applicable);
(E) The amount of the selected offer expressed as a dollar amount
and as a percentage of the qualifying payment amount;
(F) The rationale for the certified IDR entity's decision,
including the extent to which the decision relied on the criteria in
paragraph (c)(4)(iv) of this section;
(G) The practice specialty or type of each provider or facility,
respectively, involved in furnishing each qualified IDR item or
service;
(H) The identity for each plan or issuer, and provider or facility,
with respect to the notification. Specifically, each certified IDR
entity must provide each party's name and address, as applicable; and
(I) For each determination, the number of business days elapsed
between selection of the certified IDR entity and the determination of
the out-of-network rate by the certified IDR entity.
(vi) The total amount of certified IDR entity fees paid to the
certified IDR entity under paragraph (d)(1) of this section during the
month.
(2) [Reserved]
(g) Extension of time periods for extenuating circumstances--(1)
General. The time periods specified in this section (other than the
time for payment, if applicable, under paragraph (c)(4)(ix) of this
section) may be extended in extenuating circumstances at the
Secretary's discretion if:
(i) An extension is necessary to address delays due to matters
beyond the control of the parties or for good cause; and
(ii) The parties attest that prompt action will be taken to ensure
that the determination under this section is made as soon as
administratively practicable under the circumstances.
(2) Process to request an extension. The parties may request an
extension by submitting a request for extension due to extenuating
circumstances through the Federal IDR portal if the extension is
necessary to address delays due to matters beyond the control of the
parties or for good cause.
(h) Applicability date. The provisions of this section are
applicable with respect to plan years beginning on or after January 1,
2022, except that the provisions regarding IDR entity certification at
paragraphs (a) and (e) of this section are applicable beginning on
October 7, 2021.
0
14. Section 2590.717-2 is added to read as follows:
Sec. 2590.717-2 Independent dispute resolution process for air
ambulance services.
(a) Definitions. Unless otherwise stated, the definitions in Sec.
2590.716-3 apply.
(b) Determination of out-of-network rates to be paid by health
plans and health insurance issuers; independent dispute resolution
process--(1) In general. Except as provided in paragraphs (b)(2) and
(3) of this section, in determining the out-of-network rate to be paid
by group health plans and health insurance issuers offering group
health insurance coverage for out-of-network air ambulance services,
plans and issuers must comply with the requirements of Sec. 2590.716-
8, except that references in Sec. 2590.716-8 to the additional
circumstances in Sec. 2590.716-8(c)(4)(iii)(C) shall be understood to
refer to paragraph (b)(2) of this section.
(2) Additional information. Additional information submitted by a
party, provided the information is credible, relates to the
circumstances described in paragraphs (b)(2)(i) through (vi) of this
section, with respect to a qualified IDR service of a nonparticipating
provider of air ambulance services or health insurance issuer of group
or individual health insurance coverage that is the subject of a
payment determination. This information must also clearly demonstrate
that the qualifying payment amount is materially different from the
appropriate out-of-network rate.
(i) The quality and outcomes measurements of the provider that
furnished the services.
(ii) The acuity of the condition of the participant or beneficiary
receiving the service, or the complexity of furnishing the service to
the participant or beneficiary.
(iii) The training, experience, and quality of the medical
personnel that furnished the air ambulance services.
(iv) Ambulance vehicle type, including the clinical capability
level of the vehicle.
(v) Population density of the point of pick-up (as defined in 42
CFR 414.605)
[[Page 56122]]
for the air ambulance (such as urban, suburban, rural, or frontier).
(vi) Demonstrations of good faith efforts (or lack thereof) made by
the nonparticipating provider of air ambulance services or the plan or
issuer to enter into network agreements with each other and, if
applicable, contracted rates between the provider of air ambulance
services and the plan or issuer, as applicable, during the previous 4
plan years.
(3) Reporting of information relating to the IDR process. In
applying the requirements of Sec. 2590.716-8(f), within 30 business
days of the close of each month, for services furnished on or after
January 1, 2022, the information the certified IDR entity must report,
in a form and manner specified by the Secretary, with respect to the
Federal IDR process involving air ambulance services is:
(i) The number of notices of IDR initiation submitted under the
Federal IDR process to the certified IDR entity that pertain to air
ambulance services during the immediately preceding month;
(ii) The number of such notices of IDR initiation with respect to
which a final determination was made under Sec. 2590.716-8(c)(4)(ii)
of this part (as applied by paragraph (b)(1) of this section);
(iii) The number of times the payment amount determined (or agreed
to) under this subsection has exceeded the qualifying payment amount,
specified by services;
(iv) With respect to each notice of IDR initiation under Sec.
2590.716-8(b)(2) of this part (as applied by paragraph (b)(1) of this
section) for which a determination was made, the following information:
(A) A description of each air ambulance service included in such
notification, including the relevant billing and service codes;
(B) The point of pick-up (as defined in 42 CFR 414.605) for the
services included in such notification;
(C) The amount of the offers submitted under Sec. 2590.716-
8(c)(4)(i) (as applied by paragraph (b)(1) of this section) by the
group health plan or health insurance issuer (as applicable) and by the
nonparticipating provider of air ambulance services, expressed as a
dollar amount and as a percentage of the qualifying payment amount;
(D) Whether the offer selected by the certified IDR entity under
Sec. 2590.716-8(c)(4)(ii) of this part (as applied by paragraph (b)(1)
of this section) to be the payment amount applied was the offer
submitted by the plan or issuer (as applicable) or by the provider of
air ambulance services;
(E) The amount of the selected offer expressed as a dollar amount
and as a percentage of the qualifying payment amount;
(F) The rationale for the certified IDR entity's decision,
including the extent to which the decision relied on the criteria in
paragraph (b)(2) of this section;
(G) Air ambulance vehicle type, including the clinical capability
level of such vehicle (to the extent this information has been provided
to the certified IDR entity);
(H) The identity for each plan or issuer and provider of air
ambulance services, with respect to the notification. Specifically,
each certified IDR entity must provide each party's name and address,
as applicable; and
(I) For each determination, the number of business days elapsed
between selection of the certified IDR entity and the selection of the
payment amount by the certified IDR entity.
(v) The total amount of certified IDR entity fees paid to the
certified IDR entity under paragraph Sec. 2590.716-8(d)(1) of this
part (as applied by paragraph (b)(1) of this section) during the month
for determinations involving air ambulance services.
(c) Applicability date. The provisions of this section are
applicable with respect to plan years beginning on or after January 1,
2022.
Department of Health and Human Services
45 CFR Subtitle A, Subchapter B
For the reasons set forth in the preamble, the Department of Health
and Human Services amends 45 CFR parts 147 and 149 as set forth below:
PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND
INDIVIDUAL HEALTH INSURANCE MARKETS
0
15. The authority citation for part 147 continues to read as follows:
Authority: 42 U.S.C. 300gg through 300gg-63, 300gg-91, 300gg-
92, and 300gg-111 through 300gg-139, as amended, and section 3203,
Pub. L. 116-136, 134 Stat. 281.
0
16. Section 147.136 is amended by:
0
a. Revising paragraphs (a)(1), (c)(2)(i), and (d)(1)(i)(A) and (B);
0
b. Adding paragraph (d)(1)(i)(C);
0
c. Adding Examples 3 through 7 to paragraph (d)(1)(ii); and
0
d. Revising paragraph (g).
The revisions and additions read as follows:
Sec. 147.136 Internal claims and appeals and external review
processes.
(a) Scope and definitions--(1) Scope--(i) In general. This section
sets forth requirements with respect to internal claims and appeals and
external review processes for group health plans and health insurance
issuers. Paragraph (b) of this section provides requirements for
internal claims and appeals processes. Paragraph (c) of this section
sets forth rules governing the applicability of State external review
processes. Paragraph (d) of this section sets forth a Federal external
review process for plans and issuers not subject to an applicable State
external review process. Paragraph (e) of this section prescribes
requirements for ensuring that notices required to be provided under
this section are provided in a culturally and linguistically
appropriate manner. Paragraph (f) of this section describes the
authority of the Secretary to deem certain external review processes in
existence on March 23, 2010 as in compliance with paragraph (c) or (d)
of this section.
(ii) Application to grandfathered health plans and health insurance
coverage. The provisions of this section generally do not apply to
coverage offered by health insurance issuers and group health plans
that are grandfathered health plans, as defined under Sec. 147.140.
However, the external review process requirements under paragraphs (c)
and (d) of this section, and related notice requirements under
paragraph (e) of this section, apply to grandfathered health plans or
coverage with respect to adverse benefit determinations involving items
and services within the scope of the requirements for out-of-network
emergency services, nonemergency services performed by nonparticipating
providers at participating facilities, and air ambulance services
furnished by nonparticipating providers of air ambulance services under
PHS Act sections 2799A-1 and 2799A-2 and Sec. Sec. 149.110 through
149.130.
* * * * *
(c) * * *
(2) * * *
(i) The State process must provide for the external review of
adverse benefit determinations (including final internal adverse
benefit determinations) by issuers (or, if applicable, plans) that are
based on the issuer's (or plan's) requirements for medical necessity,
appropriateness, health care setting, level of care, or effectiveness
of a covered benefit, as well as a consideration of whether a plan or
issuer is complying with the surprise
[[Page 56123]]
billing and cost-sharing protections under PHS Act sections 2799A-1 and
2799A-2 and Sec. Sec. 149.110 through 149.130.
* * * * *
(d) * * *
(1) * * *
(i) * * *
(A) An adverse benefit determination (including a final internal
adverse benefit determination) by a plan or issuer that involves
medical judgment (including, but not limited to, those based on the
plan's or issuer's requirements for medical necessity, appropriateness,
health care setting, level of care, or effectiveness of a covered
benefit; its determination that a treatment is experimental or
investigational; its determination whether a participant, beneficiary,
or enrollee is entitled to a reasonable alternative standard for a
reward under a wellness program; its determination whether a plan or
issuer is complying with the nonquantitative treatment limitation
provisions of PHS Act section 2726 and Sec. Sec. 146.136 and 147.160,
which generally require, among other things, parity in the application
of medical management techniques), as determined by the external
reviewer. (A denial, reduction, termination, or a failure to provide
payment for a benefit based on a determination that a participant,
beneficiary, or enrollee fails to meet the requirements for eligibility
under the terms of a group health plan or health insurance coverage is
not eligible for the Federal external review process under this
paragraph (d));
(B) An adverse benefit determination that involves consideration of
whether a plan or issuer is complying with the surprise billing and
cost-sharing protections set forth in PHS Act sections 2799A-1 and
2799A-2 and Sec. Sec. 149.110 through 149.130; and
(C) A rescission of coverage (whether or not the rescission has any
effect on any particular benefit at that time).
(ii) * * *
Example 3. (i) Facts. A group health plan generally provides
benefits for services in an emergency department of a hospital or
independent freestanding emergency department. Individual C receives
pre-stabilization emergency treatment in an out-of-network emergency
department of a hospital. The group health plan determines that
protections for emergency services under Sec. 149.110 do not apply
because the treatment did not involve ``emergency services'' within the
meaning of Sec. 149.110(c)(2)(i). C receives an adverse benefit
determination and the plan imposes cost-sharing requirements that are
greater than the requirements that would apply if the same services
were provided in an in-network emergency department.
(ii) Conclusion. In this Example 3, the plan's determination that
treatment received by C did not include emergency services involves
medical judgment and consideration of whether the plan complied with
Sec. 149.110. Accordingly, the claim is eligible for external review
under paragraph (d)(1)(i) of this section.
Example 4. (i) Facts. A group health plan generally provides
benefits for anesthesiology services. Individual D undergoes a surgery
at an in-network health care facility and during the course of the
surgery, receives anesthesiology services from an out-of-network
provider. The plan decides the claim for these services without regard
to the protections related to items and services furnished by out-of-
network providers at in-network facilities under Sec. 149.120. As a
result, D receives an adverse benefit determination for the services
and is subject to cost-sharing liability that is greater than it would
be if cost sharing had been calculated in a manner consistent with the
requirements of Sec. 149.120.
(ii) Conclusion. In this Example 4, whether the plan was required
to decide the claim in a manner consistent with the requirements of
Sec. 149.120 involves considering whether the plan complied with Sec.
149.120, as well as medical judgment, because it requires consideration
of the health care setting and level of care. Accordingly, the claim is
eligible for external review under paragraph (d)(1)(i) of this section.
Example 5. (i) Facts. A group health plan generally provides
benefits for services in an emergency department of a hospital or
independent freestanding emergency department. Individual E receives
emergency services in an out-of-network emergency department of a
hospital, including certain post-stabilization services. The plan
processes the claim for the post-stabilization services as not being
for emergency services under Sec. 149.110(c)(2)(ii) based on
representations made by the treating provider that E was in a condition
to receive notice from the provider about cost-sharing and surprise
billing protections for these services, and subsequently gave informed
consent to waive those protections. E receives an adverse benefit
determination and is subject to cost-sharing requirements that are
greater than the cost-sharing requirements that would apply if the
services were processed in a manner consistent with Sec. 149.110.
(ii) Conclusion. In this Example 5, whether E was in a condition to
receive notice about the availability of cost-sharing and surprise
billing protections and give informed consent to waive those
protections involves medical judgment and consideration of whether the
plan complied with the requirements under Sec. 149.110(c)(2)(ii).
Accordingly, the claim is eligible for external review under paragraph
(d)(1)(i) of this section.
Example 6. (i) Facts. Individual F gives birth to a baby at an in-
network hospital. The baby is born prematurely and receives certain
neonatology services from a nonparticipating provider during the same
visit as the birth. F was given notice about cost-sharing and surprise
billing protections for these services, and subsequently gave informed
consent to waive those protections. The claim for the neonatology
services is coded as a claim for routine post-natal services and the
plan decides the claim without regard to the requirements under Sec.
149.120(a) and the fact that those protections may not be waived for
neonatology services under Sec. 149.120(b).
(ii) Conclusion. In this Example 6, medical judgment is necessary
to determine whether the correct code was used and compliance with
Sec. 149.120(a) and (b) must also be considered. Accordingly, the
claim is eligible for external review under paragraph (d)(1)(i) of this
section. The Departments also note that, to the extent the
nonparticipating provider balance bills Individual F for the
outstanding amounts not paid by the plan for the neonatology services,
such provider would be in violation of PHS Act section 2799B-2 and its
implementing regulations at 45 CFR 149.420(a).
Example 7. (i) Facts. A group health plan generally provides
benefits to cover knee replacement surgery. Individual G receives a
knee replacement surgery at an in-network facility and, after receiving
proper notice about the availability of cost-sharing and surprise
billing protections, provides informed consent to waive those
protections. However, during the surgery, certain anesthesiology
services are provided by an out-of-network nurse anesthetist. The claim
for these anesthesiology services is decided by the plan without regard
to the requirements under Sec. 149.120(a) or to the fact that those
protections may not be waived for ancillary services such as
anesthesiology services provided by an out-of-network provider at an
in-network facility under Sec. 149.120(b). G receives an adverse
benefit determination and is subject to cost-sharing requirements that
are
[[Page 56124]]
greater than the cost-sharing requirements that would apply if the
services were provided in a manner consistent with Sec. 149.120(a) and
(b).
(ii) Conclusion. In this Example 7, consideration of whether the
plan complied with the requirements in Sec. 149.120(a) and (b) is
necessary to determine whether cost-sharing requirements were applied
appropriately. Accordingly, the claim is eligible for external review
under paragraph (d)(1)(i) of this section.
* * * * *
(g) Applicability date. The provisions of this section generally
are applicable to group health plans and health insurance issuers for
plan years (in the individual market, policy years) beginning on or
after January 1, 2017. The external review scope provision at paragraph
(d)(1)(i)(B) of this section is applicable for plan years (in the
individual market, policy years) beginning on or after January 1, 2022.
The external review provisions described in paragraphs (c) and (d) of
this section are applicable to grandfathered health plans and
grandfathered individual market policies, with respect to the types of
claims specified under paragraph (a)(1)(ii) of this section, for plan
years (in the individual market, policy years) beginning on or after
January 1, 2022.
PART 149--SURPRISE BILLING AND TRANSPARENCY REQUIREMENTS
0
17. The authority citation for part 149 is amended to read as follows:
Authority: 42 U.S.C. 300gg-92 and 300gg-111 through 300gg-139,
as amended.
0
18. Section 149.10 is amended by revising paragraph (b) to read as
follows:
Sec. 149.10 Basis and scope.
* * * * *
(b) Scope. This part establishes standards for group health plans,
health insurance issuers offering group or individual health insurance
coverage, health care providers and facilities, and providers of air
ambulance services with respect to surprise medical bills, transparency
in health care coverage, and additional patient protections. This part
also establishes an independent dispute resolution process, and
standards for certifying independent dispute resolution entities. This
part also establishes a Patient-Provider Dispute Resolution Process and
standards for certifying Selected Dispute Resolution entities.
0
17. Section 149.20 is amended by adding paragraphs (a)(3) and (4) and
revising paragraph (b) introductory text to read as follows:
Sec. 149.20 Applicability.
(a) * * *
(3) The requirements in subpart F of this part apply to certified
IDR entities, health care providers, health care facilities, and
providers of air ambulance services and group health plans and health
insurance issuers offering group or individual health insurance
coverage (including grandfathered health plans as defined in Sec.
147.140 of this subchapter) except as specified in paragraph (b) of
this section.
(4) The requirements in subpart G of this part apply to Selected
Dispute Resolution Entities, health care providers, providers of air
ambulance services, health care facilities and uninsured (or self-pay)
individuals, as defined in subpart G.
(b) Exceptions. The requirements in subparts B, D, E, and F of this
part do not apply to the following:
* * * * *
0
18. Section 149.450 is amended by revising paragraphs (a)(1) and
(a)(2)(i) to read as follows:
Sec. 149.450 Complaint process for balance billing and good faith
estimates regarding providers and facilities.
(a) Scope and definitions--(1) Scope. This section establishes a
process for HHS to receive and resolve complaints regarding information
that a health care provider, provider of air ambulance services, or
health care facility may be failing to meet the requirements under
subpart E or subpart G of this part, which may warrant an
investigation.
(2) * * *
(i) Complaint means a communication, written, or oral, that
indicates there has been a potential violation of the requirements
under this subpart or subpart G of this part, whether or not a
violation actually occurred.
* * * * *
0
20. Subpart F, consisting of Sec. Sec. 149.510 and 149.520. is added
to read as follows:
Subpart F--Independent Dispute Resolution Process
Sec. 149.510 Independent dispute resolution process.
(a) Scope and definitions--(1) Scope. This section sets forth
requirements with respect to the independent dispute resolution (IDR)
process (referred to in this section as the Federal IDR process) under
which a nonparticipating provider, nonparticipating emergency facility,
or nonparticipating provider of air ambulance services (as applicable),
and a group health plan or health insurance issuer offering group or
individual health insurance coverage completes a requisite open
negotiation period and at least one party submits a notification under
paragraph (b) of this section to initiate the Federal IDR process under
paragraph (c) of this section, and under which an IDR entity (as
certified under paragraph (e) of this section) determines the amount of
payment under the plan or coverage for an item or service furnished by
the provider or facility.
(2) Definitions. Unless otherwise stated, the definitions in Sec.
149.30 of this part apply to this section. Additionally, for purposes
of this section, the following definitions apply:
(i) Batched items and services means multiple qualified IDR items
or services that are considered jointly as part of one payment
determination by a certified IDR entity for purposes of the Federal IDR
process. In order for a qualified IDR item or service to be included in
a batched item or service, the qualified IDR item or service must meet
the criteria set forth in paragraph (c)(3) of this section.
(ii) Breach means the acquisition, access, use, or disclosure of
individually identifiable health information (IIHI) in a manner not
permitted under paragraph (e)(2)(v) of this section that compromises
the security or privacy of the IIHI.
(A) Breach excludes:
(1) Any unintentional acquisition, access, or use of IIHI by
personnel, a contractor, or a subcontractor of a certified IDR entity
that is acting under the authority of that certified IDR entity, if the
acquisition, access, or use was made in good faith and within the scope
of that authority and that does not result in further use or disclosure
in a manner not permitted under paragraph (e)(2)(v) of this section.
(2) Any inadvertent disclosure by a person who is authorized to
access IIHI at a certified IDR entity to another person authorized to
access IIHI at the same certified IDR entity, and the information
received as a result of the disclosure is not further used or disclosed
in a manner not permitted under paragraph (e)(2)(v) of this section.
(3) A disclosure of IIHI in which a certified IDR entity has a good
faith belief that an unauthorized person to whom the disclosure was
made would not reasonably have been able to retain such information.
(B) Except as provided in paragraph (a)(2)(ii)(A) of this
definition, access, use, or disclosure of IIHI in a manner not
permitted under paragraph (e)(2)(v)
[[Page 56125]]
of this section is presumed to be a breach unless the certified IDR
entity demonstrates that there is a low probability that the security
or privacy of the IIHI has been compromised based on a risk assessment
encompassing at least the following factors:
(1) The nature and extent of the IIHI involved, including the types
of identifiers and the likelihood of re-identification;
(2) The unauthorized person who used the IIHI or to whom the
disclosure was made;
(3) Whether the IIHI was actually acquired or viewed; and
(4) The extent to which the risk to the IIHI has been mitigated.
(iii) Certified IDR entity means an entity responsible for
conducting determinations under paragraph (c) of this section that
meets the certification criteria specified in paragraph (e) of this
section and that has been certified by the Secretary, jointly with the
Secretaries of Labor and the Treasury.
(iv) Conflict of interest means, with respect to a party to a
payment determination, or certified IDR entity, a material
relationship, status, or condition of the party, or certified IDR
entity that impacts the ability of the certified IDR entity to make an
unbiased and impartial payment determination. For purposes of this
section, a conflict of interest exists when a certified IDR entity is:
(A) A group health plan; a health insurance issuer offering group
health insurance coverage, individual health insurance coverage, or
short-term, limited-duration insurance; a carrier offering a health
benefits plan under 5 U.S.C. 8902; or a provider, a facility, or a
provider of air ambulance services;
(B) An affiliate or a subsidiary of a group health plan; a health
insurance issuer offering group health insurance coverage, individual
health insurance coverage, or short-term limited-duration insurance; a
carrier offering a health benefits plan under 5 U.S.C. 8902; or a
provider, a facility, or a provider of air ambulance services;
(C) An affiliate or subsidiary of a professional or trade
association representing group health plans; health insurance issuers
offering group health insurance coverage, individual health insurance
coverage, or short-term limited duration insurance; carriers offering a
health benefits plan under 5 U.S.C. 8902; or providers, facilities, or
providers of air ambulance services.
(D) A certified IDR entity, that has, or that has any personnel,
contractors, or subcontractors assigned to a determination who have, a
material familial, financial, or professional relationship with a party
to the payment determination being disputed, or with any officer,
director, or management employee of the plan, issuer, or carrier
offering a health benefits plan under 5 U.S.C. 8902; the plan or
coverage administrator, plan or coverage fiduciaries, or plan, issuer
or carrier employees; the health care provider, the health care
provider's group or practice association; the provider of air ambulance
services, the provider of air ambulance services' group or practice
association, or the facility that is a party to the dispute.
(v) Credible information means information that upon critical
analysis is worthy of belief and is trustworthy.
(vi) IDR entity means an entity that may apply or has applied for
certification to conduct determinations under paragraph (c) of this
section, and that currently is not certified by the Secretary, jointly
with the Secretaries of Labor and the Treasury, pursuant to paragraph
(e) of this section.
(vii) Individually identifiable health information (IIHI) means any
information, including demographic data, that relates to the past,
present, or future physical or mental health or condition of an
individual; the provision of health care to an individual; or the past,
present, or future payment for the provision of health care to an
individual; and
(A) That identifies the individual; or
(B) With respect to which there is a reasonable basis to believe
the information can be used to identify the individual.
(viii) Material difference means a substantial likelihood that a
reasonable person with the training and qualifications of a certified
IDR entity making a payment determination would consider the submitted
information significant in determining the out-of-network rate and
would view the information as showing that the qualifying payment
amount is not the appropriate out-of-network rate.
(ix) Material familial relationship means any relationship as a
spouse, domestic partner, child, parent, sibling, spouse's or domestic
partner's parent, spouse's or domestic partner's sibling, spouse's or
domestic partner's child, child's parent, child's spouse or domestic
partner, or sibling's spouse or domestic partner.
(x) Material financial relationship means any financial interest of
more than five percent of total annual revenue or total annual income
of a certified IDR entity or an officer, director, or manager thereof,
or of a reviewer or reviewing physician employed or engaged by a
certified IDR entity to conduct or participate in any review in the
Federal IDR process. The terms annual revenue and annual income do not
include mediation fees received by mediators who are also arbitrators,
provided that the mediator acts in the capacity of a mediator and does
not represent a party in the mediation.
(xi) Material professional relationship means any physician-patient
relationship, any partnership or employment relationship, any
shareholder or similar ownership interest in a professional
corporation, partnership, or other similar entity; or any independent
contractor arrangement that constitutes a material financial
relationship with any expert used by the certified IDR entity or any
officer or director of the certified IDR entity.
(xii) Qualified IDR item or service means an item or service:
(A) That is an emergency service furnished by a nonparticipating
provider or nonparticipating facility subject to the protections of 26
CFR 54.9816-4T, 29 CFR 2590.716-4, or Sec. 149.110, as applicable, for
which the conditions of Sec. 149.410(b) are not met, or an item or
service furnished by a nonparticipating provider at a participating
health care facility, subject to the requirements of 26 CFR 54.9816-5T,
29 CFR 2590.717-5, or Sec. 149.120, as applicable, for which the
conditions of Sec. 149.420(c)-(i) are not met, or air ambulance
services furnished by a nonparticipating provider of air ambulance
services subject to the protections of 26 CFR 54.9817-1T, 29 CFR
2590.717-1, or Sec. 149.130, as applicable, and for which the out-of-
network rate is not determined by reference to an All-Payer Model
Agreement under section 1115A of the Social Security Act or a specified
State law as defined in Sec. 149.30;
(B) With respect to which a provider or facility (as applicable) or
group health plan or health insurance issuer offering group or
individual health insurance coverage submits a notification under
paragraph (b)(2) of this section;
(C) That is not an item or service that is the subject of an open
negotiation under paragraph (b)(1) of this section; and
(D) That is not an item or service for which a notification under
paragraph (b)(2) of this section is submitted during the 90-calendar-
day period under paragraph (c)(4)(vi)(B) of this section, but that may
include such an item or service if the notification is submitted during
the subsequent 30-business-day period under paragraph (c)(4)(vi)(C) of
this section.
[[Page 56126]]
(xiii) Unsecured IIHI means IIHI that is not rendered unusable,
unreadable, or indecipherable to unauthorized persons through the use
of a technology or methodology specified by the Secretary, jointly with
the Secretary of the Treasury and the Secretary of Labor.
(b) Determination of payment amount through open negotiation and
initiation of the Federal IDR process--(1) Determination of payment
amount through open negotiation--(i) In general. With respect to an
item or service that meets the requirements of paragraph (a)(2)(xii)(A)
of this section, the provider, facility, or provider of air ambulance
services or the group health plan or health insurance issuer offering
group or individual health insurance coverage may, during the 30-
business-day period beginning on the day the provider, facility, or
provider of air ambulance services receives an initial payment or
notice of denial of payment regarding the item or service, initiate an
open negotiation period for purposes of determining the out-of-network
rate for such item or service. To initiate the open negotiation period,
a party must send a notice to the other party (open negotiation notice)
in accordance with paragraph (b)(1)(ii) of this section.
(ii) Open negotiation notice--(A) Content. The open negotiation
notice must include information sufficient to identify the item(s) and
service(s) (including the date(s) the item(s) or service(s) were
furnished, the service code, and initial payment amount, if
applicable), an offer of an out-of-network rate, and contact
information for the party sending the open negotiation notice.
(B) Manner. The open negotiation notice must be provided, using the
standard form developed by the Secretary, in writing within 30 business
days beginning on the day the provider, facility, or provider of air
ambulance services receives an initial payment or a notice of denial of
payment from the plan or issuer regarding the item or service. The day
on which the open negotiation notice is first sent by a party is the
date the 30-business-day open negotiation period begins. This notice
may be provided to the other party electronically (such as by email) if
the following two conditions are satisfied--
(1) The party sending the open negotiation notice has a good faith
belief that the electronic method is readily accessible by the other
party; and
(2) The notice is provided in paper form free of charge upon
request.
(2) Initiating the Federal IDR process--(i) In general. With
respect to an item or service for which the parties do not agree upon
an out-of-network rate by the last day of the open negotiation period
under paragraph (b)(1) of this section, either party may initiate the
Federal IDR process. To initiate the Federal IDR process, a party must
submit a written notice of IDR initiation to the other party and to the
Secretary, using the standard form developed by the Secretary, during
the 4-business-day period beginning on the 31st business day after the
start of the open negotiation period.
(ii) Exception for items and services provided by certain
nonparticipating providers and facilities. A party may not initiate the
Federal IDR process with respect to an item or service if, with respect
to that item or service, the party knows (or reasonably should have
known) that the provider or facility provided notice and received
consent under 45 CFR 149.410(b) or 149.420(c) through (i).
(iii) Notice of IDR initiation--(A) Content. The notice of IDR
initiation must include:
(1) Information sufficient to identify the qualified IDR items or
services under dispute (and whether the qualified IDR items or services
are designated as batched items and services as described in paragraph
(c)(3) of this section), including the date(s) and location the item or
service was furnished, the type of item or service (such as whether the
qualified IDR item or service is an emergency service as defined in 26
CFR 54.9816-4T(c)(2)(i), 29 CFR 2590.716-4(c)(2)(i), or Sec.
149.110(c)(2)(i), as applicable, an emergency service as defined in 26
CFR 54.9816-4T(c)(2)(ii), 29 CFR 2590.716-4(c)(2)(ii), or Sec.
149.110(c)(2)(ii), as applicable, or a nonemergency service; and
whether any service is a professional service or facility-based
service), corresponding service codes, place of service code, the
amount of cost sharing allowed, and the amount of the initial payment
made for the qualified IDR item or service, if applicable;
(2) Names of the parties involved and contact information,
including name, email address, phone number, and mailing address;
(3) State where the qualified IDR item or service was furnished;
(4) Commencement date of the open negotiation period under
paragraph (b)(1) of this section;
(5) Preferred certified IDR entity;
(6) An attestation that the items and services under dispute are
qualified IDR items or services;
(7) Qualifying payment amount;
(8) Information about the qualifying payment amount as described in
Sec. 149.140(d); and
(9) General information describing the Federal IDR process as
specified by the Secretary.
(B) Manner. The initiating party must provide written notice of IDR
initiation to the other party. The initiating party may satisfy this
requirement by furnishing the notice of IDR initiation to the other
party electronically (such as by email) if the following two conditions
are satisfied--
(1) The initiating party has a good faith belief that the
electronic method is readily accessible by the other party; and
(2) The notice is provided in paper form free of charge upon
request.
(C) Notice to the Secretary. The initiating party must also furnish
the notice of IDR initiation to the Secretary by submitting the notice
through the Federal IDR portal. The initiation date of the Federal IDR
process will be the date of receipt by the Secretary.
(c) Federal IDR process following initiation--(1) Selection of
certified IDR entity--(i) In general. The plan or issuer or the
provider, facility, or provider of air ambulance services receiving the
notice of IDR initiation under paragraph (b)(2) of this section may
agree or object to the preferred certified IDR entity identified in the
notice of IDR initiation. If the party in receipt of the notice of IDR
initiation fails to object within 3 business days, the preferred
certified IDR entity identified in the notice of IDR initiation will be
selected and will be treated as jointly agreed to by the parties,
provided that the certified IDR entity does not have a conflict of
interest. If the party in receipt of the notice of IDR initiation
objects, that party must notify the initiating party of the objection
and propose an alternative certified IDR entity. The initiating party
must then agree or object to the alternative certified IDR entity; if
the initiating party fails to agree or object to the alternative
certified IDR entity, the alternative certified IDR entity will be
selected and will be treated as jointly agreed to by the parties. In
order to select a preferred certified IDR entity, the plan or issuer
and the provider, facility, or provider of air ambulance services must
jointly agree on a certified IDR entity not later than 3 business days
after the initiation date of the Federal IDR process. If the plan or
issuer and the provider, facility, or provider of air ambulance
services fail to agree upon a certified IDR entity within that time,
the Secretary shall select a certified IDR entity in accordance with
paragraph (c)(1)(iv) of this section.
(ii) Requirements for selected certified IDR entity. The certified
IDR entity
[[Page 56127]]
selected must be an IDR entity certified under paragraph (e) of this
section, that:
(A) Does not have a conflict of interest as defined in paragraph
(a)(2) of this section;
(B) Ensures that assignment of personnel to a payment determination
and decisions regarding hiring, compensation, termination, promotion,
or other similar matters related to personnel assigned to the dispute
are not made based upon the likelihood that the assigned personnel will
support a particular party to the determination being disputed other
than as outlined under paragraph (c)(4)(iii) of this section; and
(C) Ensures that any personnel assigned to a payment determination
do not have any conflicts of interests as defined in paragraph (a)(2)
of this section regarding any party to the dispute within the 1 year
immediately preceding an assignment of dispute determination, similar
to the requirements laid out in 18 U.S.C. 207(b).
(iii) Notice of certified IDR entity selection. Upon the selection
of a certified IDR entity, in accordance with paragraph (c)(1)(i) of
this section, the plan or issuer or the provider or emergency facility
that submitted the notice of IDR initiation under paragraph (b)(2) of
this section must notify the Secretary of the selection as soon as
reasonably practicable, but no later than 1 business day after such
selection, through the Federal IDR portal. In addition, if the non-
initiating party believes that the Federal IDR process is not
applicable, the non-initiating party must also provide information
regarding the Federal IDR process's inapplicability through the Federal
IDR portal by the same date that the notice of certified IDR entity
selection must be submitted.
(A) Content. If the parties have agreed on the selection of a
certified IDR entity or the party in receipt of the notice of IDR
initiation has not objected to the other party's selection, the notice
of the certified IDR entity selection must include the following
information:
(1) Name of the certified IDR entity;
(2) The certified IDR entity number; and
(3) Attestation by both parties, or by the initiating party if the
non-initiating party fails to object to the selection of the certified
IDR entity, that the selected certified IDR entity meets the
requirements of paragraph (c)(1)(ii) of this section.
(B) {Reserved]
(iv) Failure to select a certified IDR entity. If the plan or
issuer and the provider, facility, or provider of air ambulance
services fail to select a certified IDR entity in accordance with
paragraph (c)(1)(i) of this section, the initiating party must notify
the Secretary of the failure no later than 1 business day after the
date of such failure (or in other words, 4 business days after
initiation of the Federal IDR process) by electronically submitting the
notice as described in paragraph (c)(1)(iii) of this section but
indicating that the parties have failed to select a certified IDR
entity. In addition, if the non-initiating party believes that the
Federal IDR process is not applicable, the non-initiating party must
also provide information regarding Federal IDR process's
inapplicability through the Federal IDR portal by the same date that
the notice of failure to select must be submitted. Upon notification of
the failure of the parties to select a certified IDR entity, the
Secretary will select a certified IDR entity that charges a fee within
the allowed range of certified IDR entity fees through a random
selection method not later than 6 business days after the date of
initiation of the Federal IDR process and will notify the plan or
issuer and the provider or facility of the selection. If there are
insufficient certified IDR entities that charge a fee within the
allowed range of certified IDR entity fees available to arbitrate the
dispute, the Secretary, jointly with the Secretary of the Treasury and
Secretary of Labor, will select a certified IDR entity that has
received approval, as described in paragraph (e)(2)(vi)(B) of this
section, to charge a fee outside of the allowed range of certified IDR
entity fees.
(v) Review by certified IDR entity. After selection by the parties
(including when the initiating party selects a certified IDR entity and
the other party does not object), or by the Secretary under paragraph
(c)(1)(iv) of this section, the certified IDR entity must review the
selection and attest that it meets the requirements of paragraph
(c)(1)(ii) of this section. If the certified IDR entity is unable to
attest that it meets the requirements of paragraph (c)(1)(ii) of this
section within 3 business days of selection, the parties, upon
notification, must select another certified IDR entity under paragraph
(c)(1) of this section, treating the date of notification of the
failure to attest to the requirements of (c)(1)(ii) as the date of
initiation of the Federal IDR process for purposes of the time periods
in paragraphs (c)(1)(i) and (iv) of this section. Additionally, the
certified IDR entity selected must review the information submitted in
the notice of IDR initiation to determine whether the Federal IDR
process applies. If the Federal IDR process does not apply, the
certified IDR entity must notify the Secretary and the parties within 3
business days of making that determination.
(2) Authority to continue negotiations--(i) In general. If the
parties to the Federal IDR process agree on an out-of-network rate for
a qualified IDR item or service after providing the notice of IDR
initiation to the Secretary consistent with paragraph (b)(2) of this
section, but before the certified IDR entity has made its payment
determination, the amount agreed to by the parties for the qualified
IDR item or service will be treated as the out-of-network rate for the
qualified IDR item or service. To the extent the amount exceeds the
initial payment amount (or initial denial of payment) and any cost
sharing paid or required to be paid by the participant or beneficiary,
payment must be made directly by the plan or issuer to the
nonparticipating provider, facility, or nonparticipating provider of
air ambulance services not later than 30 business days after the
agreement is reached. In no instance may either party seek additional
payment from the participant or beneficiary, including in instances in
which the out-of-network rate exceeds the qualifying payment amount.
The initiating party must send a notification to the Secretary and to
the certified IDR entity (if selected) electronically, through the
Federal IDR portal, as soon as possible, but no later than 3 business
days after the date of the agreement. The notification must include the
out-of-network rate for the qualified IDR item or service and
signatures from authorized signatories for both parties.
(ii) Method of allocation of the certified IDR entity fee. In the
case of an agreement described in paragraph (c)(2)(i) of this section,
the certified IDR entity is required to return half of each parties'
certified IDR entity fee, unless directed otherwise by both parties.
The administrative fee under paragraph (d)(2) of this section will not
be returned to the parties.
(3) Treatment of batched items and services--(i) In general.
Batched items and services may be submitted and considered jointly as
part of one payment determination by a certified IDR entity only if the
batched items and services meet the requirements of this paragraph
(c)(3)(i). Batched items and services submitted and considered jointly
as part of one payment determination under this paragraph (c)(3)(i) are
treated as a batched determination and subject to the fee for batched
determinations under this section.
[[Page 56128]]
(A) The qualified IDR items and services are billed by the same
provider or group of providers, the same facility, or the same provider
of air ambulance services. Items and services are billed by the same
provider or group of providers, the same facility, or the same provider
of air ambulance services if the items or services are billed with the
same National Provider Identifier or Tax Identification Number;
(B) Payment for the qualified IDR items and services would be made
by the same plan or issuer;
(C) The qualified IDR items and services are the same or similar
items and services. The qualified IDR items and services are considered
to be the same or similar items or services if each is billed under the
same service code, or a comparable code under a different procedural
code system, such as Current Procedural Terminology (CPT) codes with
modifiers, if applicable, Healthcare Common Procedure Coding System
(HCPCS) with modifiers, if applicable, or Diagnosis-Related Group (DRG)
codes with modifiers, if applicable; and
(D) All the qualified IDR items and services were furnished within
the same 30-business-day period, or the same 90-calendar-day period
under paragraph (c)(4)(vi)(B) of this section, as applicable.
(ii) Treatment of bundled payment arrangements. In the case of
qualified IDR items and services billed by a provider, facility, or
provider of air ambulance services as part of a bundled payment
arrangement, or where a plan or issuer makes or denies an initial
payment as a bundled payment, the qualified IDR items and services may
be submitted as part of one payment determination. Bundled payment
arrangements submitted under this paragraph (c)(3)(ii) are subject to
the rules for batched determinations and the certified IDR entity fee
for single determinations.
(4) Payment determination for a qualified IDR item or service--(i)
Submission of offers. Not later than 10 business days after the
selection of the certified IDR entity, the plan or issuer and the
provider, facility, or provider of air ambulance services:
(A) Must each submit to the certified IDR entity:
(1) An offer of an out-of-network rate expressed as both a dollar
amount and the corresponding percentage of the qualifying payment
amount represented by that dollar amount;
(2) Information requested by the certified IDR entity relating to
the offer.
(3) The following additional information, as applicable--
(i) For providers and facilities, information on the size of the
provider's practice or of the facility (if applicable). Specifically, a
group of providers must specify whether the providers' practice has
fewer than 20 employees, 20 to 50 employees, 51 to 100 employees, 101
to 500 employees, or more than 500 employees. For facilities, the
facility must specify whether the facility has 50 or fewer employees,
51 to 100 employees, 101 to 500 employees, or more than 500 employees;
(ii) For providers and facilities, information on the practice
specialty or type, respectively (if applicable);
(iii) For plans and issuers, information on the coverage area of
the plan or issuer, the relevant geographic region for purposes of the
qualifying payment amount, whether the coverage is fully-insured or
partially or fully self-insured (or a FEHB carrier if the item or
service relates to FEHB plans); and
(iv) The qualifying payment amount for the applicable year for the
same or similar item or service as the qualified IDR item or service.
(B) May each submit to the certified IDR entity any information
relating to the offer that was submitted by either party, except that
the information may not include information on factors described in
paragraph (c)(4)(v) of this section.
(ii) Payment determination and notification. Not later than 30
business days after the selection of the certified IDR entity, the
certified IDR entity must:
(A) Select as the out-of-network rate for the qualified IDR item or
service one of the offers submitted under paragraph (c)(4)(i) of this
section, taking into account the considerations specified in paragraph
(c)(4)(iii) of this section (as applied to the information provided by
the parties pursuant to paragraph (c)(4)(i) of this section). The
certified IDR entity must select the offer closest to the qualifying
payment amount unless the certified IDR entity determines that credible
information submitted by either party under paragraph (c)(4)(i) clearly
demonstrates that the qualifying payment amount is materially different
from the appropriate out-of-network rate, or if the offers are equally
distant from the qualifying payment amount but in opposing directions.
In these cases, the certified IDR entity must select the offer as the
out-of-network rate that the certified IDR entity determines best
represents the value of the qualified IDR item or services, which could
be either offer.
(B) Notify the plan or issuer and the provider or facility, as
applicable, of the selection of the offer under paragraph (c)(4)(ii)(A)
of this section, and provide the written decision required under
(c)(4)(vi) of this section.
(iii) Considerations in determination. In determining which offer
to select, the certified IDR entity must consider:
(A) The qualifying payment amount(s) for the applicable year for
the same or similar item or service.
(B) Information requested by the certified IDR entity under
paragraph (c)(4)(i)(A)(2) of this section relating to the offer, to the
extent a party provides credible information.
(C) Additional information submitted by a party, provided the
information is credible and relates to the circumstances described in
paragraphs (c)(4)(iii)(C)(1) through (5) of this section, with respect
to a qualified IDR item or service of a nonparticipating provider,
facility, group health plan, or health insurance issuer of group or
individual health insurance coverage that is the subject of a payment
determination. This information must also clearly demonstrate that the
qualifying payment amount is materially different from the appropriate
out-of-network rate.
(1) The level of training, experience, and quality and outcomes
measurements of the provider or facility that furnished the qualified
IDR item or service (such as those endorsed by the consensus-based
entity authorized in section 1890 of the Social Security Act).
(2) The market share held by the provider or facility or that of
the plan or issuer in the geographic region in which the qualified IDR
item or service was provided.
(3) The acuity of the participant, beneficiary, or enrollee
receiving the qualified IDR item or service, or the complexity of
furnishing the qualified IDR item or service to the participant,
beneficiary, or enrollee.
(4) The teaching status, case mix, and scope of services of the
facility that furnished the qualified IDR item or service, if
applicable.
(5) Demonstration of good faith efforts (or lack thereof) made by
the provider or facility or the plan or issuer to enter into network
agreements with each other, and, if applicable, contracted rates
between the provider or facility, as applicable, and the plan or
issuer, as applicable, during the previous 4 plan years.
(D) Additional information submitted by a party, provided the
information is credible and relates to the offer submitted by either
party and does not include information on factors described in
paragraph (c)(4)(v) of this section.
[[Page 56129]]
(iv) Examples. The rules of paragraph (c)(4)(iii) of this section
are illustrated by the following examples:
(A) Example 1--(1) Facts. A nonparticipating provider and an issuer
are parties to a payment determination in the Federal IDR process. The
nonparticipating provider submits an offer and additional written
information asserting that the provider has made good faith efforts to
enter into network agreements with the issuer. The nonparticipating
provider fails to provide any documentation of these efforts, such as
correspondence or records of conversations with representatives of the
issuer.
(2) Conclusion. In this Example 1, the nonparticipating provider
has submitted additional information. However, this information is not
credible, as the nonparticipating provider has failed to provide any
documentation in support of the provider's assertions of good faith
efforts to enter into network agreements with the issuer. Therefore,
the certified IDR entity cannot consider the information.
(B) Example 2--(1) Facts. A nonparticipating provider and an issuer
are parties to a payment determination in the Federal IDR process. The
nonparticipating provider submits credible information relating to the
provider's level of training, experience, and quality and outcome
measurements from 2019. The provider also submits credible information
that clearly demonstrates that the provider's level of training and
expertise was necessary for providing the service that is the subject
of the payment determination to the particular patient. Further, the
provider submits credible information that clearly demonstrates that
the qualifying payment amount generally presumes the service would be
delivered by a provider with a lower level of training, experience, and
quality and outcome measurements. This information, taken together,
demonstrates that the qualifying payment amount is not an appropriate
payment amount and the provider submits an offer that is higher than
the qualifying payment amount and commensurate with the provider's
level of training, experience, and quality and outcome measurements
with respect to the service provided. The issuer submits the qualifying
payment amount as its offer with no additional information.
(2) Conclusion. In this Example 2, the nonparticipating provider
has submitted information that is credible. Moreover, the credible
information clearly demonstrates that the qualifying payment amount
does not adequately take into account the provider's level of training,
experience, and quality and outcome measurements with respect to the
service provided, and that the appropriate out-of-network rate should
therefore be higher than the qualifying payment amount. Accordingly,
the certified IDR entity must select the provider's offer, as that
offer best represents the value of the service that is the subject of
the payment determination.
(C) Example 3--(1) Facts. A nonparticipating provider and an issuer
are parties to a payment determination in the Federal IDR process. The
nonparticipating provider submits credible information to the certified
IDR entity relating to the acuity of the patient that received the
service, and the complexity of furnishing the service to the patient,
by providing details of the service at issue and the training required
to furnish the complex service. The provider contends that this
information demonstrates that the qualifying payment amount is not an
appropriate payment amount, and the provider submits an offer that is
higher than the qualifying payment amount and equal to what the
provider believes is commensurate with the acuity of the patient and
the complexity of the service that is the subject of the payment
determination. However, the evidence submitted by the provider does not
clearly demonstrate that the qualifying payment amount fails to
encompass the acuity and complexity of the service. The issuer submits
the qualifying payment amount as its offer, along with credible
information that demonstrates how the qualifying payment amount was
calculated for this particular service, taking into consideration the
acuity of the patient and the complexity of the service.
(2) Conclusion. The information submitted by the provider to the
certified IDR entity is credible with respect to the acuity of the
patient and complexity of the service. However, in this example, the
provider has not clearly demonstrated that the qualifying payment
amount is materially different from the appropriate out-of-network
rate, based on the acuity of the patient and the complexity of the
service that is the subject of the payment determination. Accordingly,
the certified IDR entity must select the offer closest to the
qualifying payment amount, which is the issuer's offer.
(D) Example 4--(1) Facts. A nonparticipating provider and an issuer
are parties to a payment determination in the Federal IDR process. The
issuer submits credible information demonstrating that the patent for
the item that is the subject of the payment determination has expired,
including written documentation that demonstrates how much the cost of
the item was at the time the provider rendered service and how the
qualifying payment amount exceeds that cost. The issuer submits an
offer that is lower than the qualifying payment amount and commensurate
with the cost of the item at the time service was rendered. The
nonparticipating provider submits the qualifying payment amount as its
offer and also submits credible information demonstrating the
provider's level of training, experience, and quality and outcome
measurements from 2019, but the provider does not explain how this
additional information is relevant to the cost of the item.
(2) Conclusion. In this Example 4, both the nonparticipating
provider and issuer submitted information that is credible and that may
be considered by the certified IDR entity. However, only the issuer
provided credible information that was relevant to the service that is
the subject of the payment determination. Moreover, the issuer has
clearly demonstrated that the qualifying payment amount does not
adequately take into account the complexity of the item furnished--in
this case that the item is no longer patent protected. While the
provider submitted credible information, the provider failed to show
how the information was relevant to the item that is the subject of the
payment determination. Accordingly, the certified IDR entity must
select the offer that best represents the value of the item, which is
the issuer's offer in this example.
(v) Prohibition on consideration of certain factors. In determining
which offer to select, the certified IDR entity must not consider:
(A) Usual and customary charges (including payment or reimbursement
rates expressed as a proportion of usual and customary charges);
(B) The amount that would have been billed by the provider or
facility with respect to the qualified IDR item or service had the
provisions of 45 CFR 149.410 and 149.420 (as applicable) not applied;
or
(C) The payment or reimbursement rate for items and services
furnished by the provider or facility payable by a public payor,
including under the Medicare program under title XVIII of the Social
Security Act; the Medicaid program under title XIX of the Social
Security Act; the Children's Health Insurance Program under title XXI
of the Social Security Act; the TRICARE program under chapter 55 of
title 10, United States Code; chapter 17 of title 38, United States
Code; or
[[Page 56130]]
demonstration projects under section 1115 of the Social Security Act.
(vi) Written decision. (A) The certified IDR entity must explain
its determination in a written decision submitted to the parties and
the Secretary, in a form and manner specified by the Secretary;
(B) If the certified IDR entity does not choose the offer closest
to the qualifying payment amount, the certified IDR entity's written
decision must include an explanation of the credible information that
the certified IDR entity determined demonstrated that the qualifying
payment amount was materially different from the appropriate out-of-
network rate, based on the considerations allowed under paragraph
(c)(4)(iii)(B) through (D) of this section, with respect to the
qualified IDR item or service.
(vii) Effects of determination--(A) Binding. A determination made
by a certified IDR entity under paragraph (c)(4)(ii) of this section:
(1) Is binding upon the parties, in the absence of fraud or
evidence of intentional misrepresentation of material facts presented
to the certified IDR entity regarding the claim; and
(2) Is not subject to judicial review, except in a case described
in any of paragraphs (1) through (4) of section 10(a) of title 9,
United States Code.
(B) Suspension of certain subsequent IDR requests. In the case of a
determination made by a certified IDR entity under paragraph (c)(4)(ii)
of this section, the party that submitted the initial notification
under paragraph (b)(2) of this section may not submit a subsequent
notification involving the same other party with respect to a claim for
the same or similar item or service that was the subject of the initial
notification during the 90-calendar-day period following the
determination.
(C) Subsequent submission of requests permitted. If the end of the
open negotiation period specified in paragraph (b)(1) of this section
occurs during the 90-calendar-day suspension period regarding claims
for the same or similar item or service that were the subject of the
initial notice of IDR determination as described in paragraph
(c)(4)(vi) of this section, either party may initiate the Federal IDR
process for those claims by submitting a notification as specified in
paragraph (b)(2) of this section during the 30-business-day period
beginning on the day after the last day of the 90-calendar-day
suspension period.
(viii) Recordkeeping requirements. The certified IDR entity must
maintain records of all claims and notices associated with the Federal
IDR process with respect to any determination for 6 years. The
certified IDR entity must make these records available for examination
by the plan, issuer, FEHB carrier, provider, facility, or provider of
air ambulance services, or a State or Federal oversight agency upon
request, except to the extent the disclosure would violate either State
or Federal privacy law.
(ix) Payment. If applicable, the amount of the offer selected by
the certified IDR entity (less the sum of the initial payment and any
cost sharing paid or owed by the participant or beneficiary) must be
paid directly to the provider, facility, or provider of air ambulance
services not later than 30 calendar days after the determination by the
certified IDR entity. If the offer selected by the certified IDR entity
is less than the sum of the initial payment and any cost sharing paid
by the participant or beneficiary, the provider, facility, or provider
of air ambulance services will be liable to the plan or issuer for the
difference. The provider, facility, or provider of air ambulance
services must pay the difference directly to the plan or issuer not
later than 30 calendar days after the determination by the certified
IDR entity.
(d) Costs of IDR process--(1) Certified IDR entity fee. (i) With
respect to the Federal IDR process described in paragraph (c) of this
section, the party whose offer submitted to the certified IDR entity
under paragraph (c)(4)(ii)(A) of this section is not selected is
responsible for the payment to the certified IDR entity of the
predetermined fee charged by the certified IDR entity.
(ii) Each party to a determination for which a certified IDR entity
is selected under paragraph (c)(1) of this section must pay the
predetermined certified IDR entity fee charged by the certified IDR
entity to the certified IDR entity at the time the parties submit their
offers under (c)(4)(i) of this section. The certified IDR entity fee
paid by the prevailing party whose offer is selected by the certified
IDR entity will be returned to that party within 30 business days
following the date of the certified IDR entity's determination.
(2) Administrative fee. (i) Each party to a determination for which
a certified IDR entity is selected under paragraph (c)(1) of this
section must, at the time the certified IDR entity is selected under
paragraph (c)(1) of this section, pay to the certified IDR entity a
non-refundable administrative fee due to the Secretary for
participating in the Federal IDR process described in this section.
(ii) The administrative fee amount will be established in guidance
published annually by the Secretary in a manner such that the total
fees paid for a year are estimated to be equal to the projected amount
of expenditures by the Departments of the Treasury, Labor, and Health
and Human Services for the year in carrying out the Federal IDR
process.
(e) Certification of IDR entity--(1) In general. In order to be
selected under paragraph (c)(1) of this section--(i) An IDR entity must
meet the standards described in this paragraph (e) and be certified by
the Secretary, jointly with the Secretaries of Labor and the Treasury,
as set forth in this paragraph (e) of this section and guidance
promulgated by the Secretary. Once certified, the IDR entity will be
provided with a certified IDR entity number.
(ii) An IDR entity must provide written documentation to the
Secretary regarding general company information (such as contact
information, Taxpayer Identification Number, and website), as well as
the applicable service area in which the IDR entity intends to conduct
payment determinations under the Federal IDR process. IDR entities may
choose to submit their application for all States or self-limit to a
particular subset of States.
(iii) An IDR entity that the Secretary, jointly with the Secretary
of Labor and the Secretary of the Treasury, certifies must enter into
an agreement as a condition of certification. The agreement shall
include specified provisions encompassed by this section, including,
but not limited to, the requirements applicable to certified IDR
entities when making payment determinations as well as the requirements
regarding certification and revocation (such as specifications for wind
down activities and reallocation of certified IDR entity fees, where
warranted).
(2) Requirements. An IDR entity must provide written documentation
to the Secretary through the Federal IDR portal that demonstrates that
the IDR entity satisfies the following standards to be a certified IDR
entity under this paragraph (e):
(i) Possess (directly or through contracts or other arrangements)
sufficient arbitration and claims administration of health care
services, managed care, billing and coding, medical and legal expertise
to make the payment determinations described in paragraph (c) of this
section within the time prescribed in paragraph (c)(4)(ii) of this
section.
(ii) Employ (directly or through contracts or other arrangements) a
sufficient number of personnel to make the determinations described in
[[Page 56131]]
paragraph (c) of this section within the time prescribed by (c)(4)(ii)
of this section. To satisfy this standard, the written documentation
must include a description of the IDR entity's organizational structure
and capabilities, including an organizational chart and the
credentials, responsibilities, and number of personnel employed to make
determinations described in paragraph (c) of this section.
(iii) Maintain a current accreditation from a nationally recognized
and relevant accrediting organization, such as URAC, or ensure that it
otherwise possesses the requisite training to conduct payment
determinations (for example, providing documentation that personnel
employed by the IDR entity have completed arbitration training by the
American Arbitration Association, the American Health Law Association,
or a similar organization);
(iv) Have a process to ensure that no conflict of interest, as
defined in paragraph (a)(2) of this section, exists between the parties
and the personnel the certified IDR entity assigns to a payment
determination to avoid violating paragraph (c)(1)(ii) of this section,
including policies and procedures for conducting ongoing audits for
conflicts of interest, to ensure that should any arise, the certified
IDR entity has procedures in place to inform the Secretary, jointly
with the Secretary of the Treasury and the Secretary of Labor, of the
conflict of interest and to mitigate the risk by reassigning the
dispute to other personnel in the event that any personnel previously
assigned have a conflict of interest.
(v) Have a process to maintain the confidentiality of IIHI obtained
in the course of conducting determinations. A certified IDR entity's
responsibility to comply with these confidentiality requirements shall
survive revocation of the IDR entity's certification for any reason,
and IDR entities must comply with the record retention and disposal
requirements described in this section. Under this process, once
certified, the certified IDR entity must comply with the following
requirements:
(A) Privacy. The certified IDR entity may create, collect, handle,
disclose, transmit, access, maintain, store, and/or use IIHI, only to
perform:
(1) The certified IDR entity's required duties described in this
section; and
(2) Functions related to carrying out additional obligations as may
be required under applicable Federal or State laws or regulations.
(B) Security. (1) The certified IDR entity must ensure the
confidentiality of all IIHI it creates, obtains, maintains, stores, and
transmits;
(2) The certified IDR entity must protect against any reasonably
anticipated threats or hazards to the security of this information;
(3) The certified IDR entity must ensure that IIHI is securely
destroyed or disposed of in an appropriate and reasonable manner 6
years from either the date of its creation or the first date on which
the certified IDR entity had access to it, whichever is earlier.
(4) The certified IDR entity must implement policies and procedures
to prevent, detect, contain, and correct security violations in the
event of a breach of IIHI;
(C) Breach notification. The certified IDR entity must, following
the discovery of a breach of unsecured IIHI, notify of the breach the
provider, facility, or provider of air ambulance services; the plan and
issuer; the Secretary, jointly with the Secretary of the Treasury and
the Secretary of Labor; and each individual whose unsecured IIHI has
been, or is reasonably believed to have been, subject to the breach, to
the extent possible.
(1) Breaches treated as discovered. For purposes of this paragraph
(e)(2)(v)(C), a breach shall be treated as discovered by a certified
IDR entity as of the first day on which the breach is known to the
certified IDR entity or, by exercising reasonable diligence, would have
been known to the certified IDR entity. A certified IDR entity shall be
deemed to have knowledge of a breach if the breach is known, or by
exercising reasonable diligence would have been known, to any person,
other than the person committing the breach, who is an employee,
officer, or other agent of the certified IDR entity;
(2) Timing of notification. A certified IDR entity must provide the
notification required by this paragraph (e)(2)(v)(C) without
unreasonable delay and in no case later than 60 calendar days after
discovery of a breach.
(3) Content of notification. The notification required by this
paragraph (e)(2)(v)(C) must include, to the extent possible:
(i) The identification of each individual whose unsecured IIHI has
been, or is reasonably believed by the certified IDR entity to have
been, subject to the breach;
(ii) A brief description of what happened, including the date of
the breach and the date of the discovery of the breach, to the extent
known;
(iii) A description of the types of unsecured IIHI that were
involved in the breach (for example whether full name, social security
number, date of birth, home address, account number, diagnosis,
disability code, or other types of information were involved);
(iv) A brief description of what the certified IDR entity involved
is doing to investigate the breach, to mitigate harm to the affected
parties, and to protect against any further breaches; and
(v) Contact procedures for individuals to ask questions or learn
additional information, which must include a toll-free telephone
number, email address, website, or postal address.
(4) Method for providing notification. A certified IDR entity must
submit the notification required by this paragraph (e)(2)(v)(C) in
written form (in clear and understandable language) either on paper or
electronically through the Federal IDR portal or electronic mail.
(D) Application to contractor and subcontractors. The certified IDR
entity must ensure compliance with this paragraph (e)(2)(v) of this
section by any contractor or subcontractor with access to IIHI
performing any duties related to the Federal IDR process.
(vi) Meet appropriate indicators of fiscal integrity and stability
by demonstrating that the certified IDR entity has a system of
safeguards and controls in place to prevent and detect improper
financial activities by its employees and agents to assure fiscal
integrity and accountability for all certified IDR entity fees and
administrative fees received, held, and disbursed and by submitting 3
years of financial statements or, if not available, other information
to demonstrate fiscal stability of the IDR entity;
(vii) Provide a fixed fee for single determinations and a separate
fixed fee for batched determinations within the upper and lower limits
for each, as set forth in guidance issued by the Secretary. The
certified IDR entity may not charge a fee that is not within the
approved limits as set forth in guidance unless the certified IDR
entity or IDR entity seeking certification receives written approval
from the Secretary to charge a flat rate beyond the upper or lower
limits approved by the Secretary for fees. The certified IDR entity or
IDR entity seeking certification may update its fees and seek approval
from the Secretary to charge a flat fee beyond the upper or lower
limits for fees, annually as provided in guidance. In order for the
certified IDR entity to receive the Secretary's written approval to
charge a flat fee beyond the upper or lower limits for fees as set
forth in guidance, it must satisfy both conditions in paragraphs
(e)(2)(v)(A) and (B) of this section, as follows:
(A) Submit, in writing, a proposal to the Secretary that includes:
[[Page 56132]]
(1) The alternative flat fee the certified IDR entity or IDR entity
seeking certification believes is appropriate for the certified IDR
entity or IDR entity seeking certification to charge;
(2) A description of the circumstances that require the alternative
fee; and
(3) A description of how the alternative flat rate will be used to
mitigate the effects of these circumstances; and
(B) Receive from the Secretary, jointly with the Secretary of the
Treasury and the Secretary of Labor written approval to charge the fee
documented in the certified IDR entity's or the IDR entity seeking
certification's written proposal.
(viii) Have a procedure in place to retain the certified IDR entity
fees described in paragraph (d)(1) of this section paid by both parties
in a trust or escrow account and to return the certified IDR entity fee
paid by the prevailing party of an IDR payment determination, or half
of each party's certified IDR entity fee in the case of an agreement
described in paragraph (c)(2)(i) of this section, within 30 business
days following the date of the determination;
(ix) Have a procedure in place to retain the administrative fees
described in paragraph (d)(2) of this section and to remit the
administrative fees to the Secretary in accordance with the timeframe
and procedures set forth in guidance published by the Secretary;
(x) Discharge its responsibilities in accordance with paragraph (c)
of this section, including not making any determination with respect to
which the certified IDR entity would not be eligible for selection
pursuant to paragraph (c)(1) of this section; and
(xi) Collect the information required to be reported to the
Secretary under paragraph (f) of this section and report the
information on a timely basis in the form and manner provided in
guidance published by the Secretary.
(3) Conflict-of-interest standards. In addition to the general
standards set forth in paragraph (e)(2)(iv) of this section, an IDR
entity must provide written documentation that the IDR entity satisfies
the standards to be a certified IDR entity under this paragraph (e)(3).
(i) The IDR entity must provide an attestation indicating that it
does not have a conflict of interest as defined in paragraph (a)(2) of
this section;
(ii) The IDR entity must have procedures in place to ensure that
personnel assigned to a determination do not have any conflicts of
interest regarding any party to the dispute within the 1 year
immediately preceding an assignment of dispute determination, similar
to the requirements laid out in 18 U.S.C. 207(b). In order to satisfy
this requirement, if certified, the IDR entity must ensure that any
personnel assigned to a determination do not have any conflicts of
interest as defined in paragraph (a)(2) of this section.
(iii) Following certification under this paragraph (e), if a
certified IDR entity acquires control of, becomes controlled by, or
comes under common control with any entity described in paragraph
(e)(3)(i) of this section, the certified IDR entity must notify the
Secretary in writing no later than 3 business days after the
acquisition or exercise of control and shall be subject to the
revocation of certification under paragraph (e)(6)(ii) of this section.
(4) Period of certification. Subject to paragraphs (e)(5) and (6)
of this section, each certification (including a recertification) of a
certified IDR entity under the process described in paragraph (e)(1) of
this section will be effective for a 5-year period.
(5) Petition for denial or revocation--(i) In general. An
individual, provider, facility, provider of air ambulance services,
plan, or issuer may petition for a denial of a certification for an IDR
entity or a revocation of a certification for a certified IDR entity
for failure to meet a requirement of this section using the standard
form and manner set forth in guidance to be issued by the Secretary.
The petition for denial of a certification must be submitted within the
timeframe set forth in guidance issued by the Secretary.
(ii) Content of petition. The individual, provider, facility,
provider of air ambulance services, plan, or issuer seeking denial or
revocation of certification must submit a written petition using the
standard form issued by the Secretary including the following
information:
(A) The identity of the IDR entity seeking certification or
certified IDR entity that is the subject of the petition;
(B) The reason(s) for the petition;
(C) Whether the petition seeks denial or revocation of a
certification;
(D) Documentation to support the reasons outlined in the petition;
and
(E) Other information as may be required by the Secretary.
(iii) Process. (A) The Secretary, jointly with the Secretary of the
Treasury and the Secretary of Labor will acknowledge receipt of the
petition within 10 business days of receipt of the petition.
(B) If the Secretary finds that the petition adequately shows a
failure of the IDR entity seeking certification or the certified IDR
entity to follow the requirements of this paragraph (e), the Secretary,
jointly with the Secretary of the Treasury and the Secretary of Labor,
will notify the IDR entity seeking certification or the certified IDR
entity by providing a de-identified copy of the petition. Following the
notification, the IDR entity seeking certification or certified IDR
entity will have 10 business days to provide a response. After the time
period for providing the response has passed, the Secretary, jointly
with the Secretary of the Treasury and the Secretary of Labor, will
review the response (if any), determine whether a denial or revocation
of a certification is warranted, and issue a notice of the decision to
the IDR entity or certified IDR entity and to the petitioner. This
decision will be subject to the appeal requirements of paragraph
(e)(6)(v) of this section.
(C) Effect on certification under petition. Regarding a petition
for revocation of a certified IDR entity's certification, if the
Secretary, jointly with the Secretary of the Treasury and the Secretary
of Labor, finds that the petition adequately shows a failure to comply
with the requirements of this paragraph (e), following the Secretary's
notification of the failure to the certified IDR entity under paragraph
(e)(5)(iii)(B) of this section, the certified IDR entity may continue
to work on previously assigned determinations but may not accept new
determinations until the Secretary issues a notice of the decision to
the certified IDR entity finding that a revocation of certification is
not warranted.
(6) Denial of IDR entity certification or revocation of certified
IDR entity certification--(i) Denial of IDR entity certification. The
Secretary, jointly with the Secretary of the Treasury and the Secretary
of Labor, may deny the certification of an IDR entity under paragraph
(e)(1) of this section if, during the process of certification,
including as a result of a petition described in paragraph (e)(5) of
this section, the Secretary determines the following:
(A) The IDR entity fails to meet the applicable standards set forth
under this paragraph (e);
(B) The IDR entity has committed or participated in fraudulent or
abusive activities, including, during the certification process,
submitting fraudulent data, or submitting information or data the IDR
entity knows to be false to the Secretary, the Secretary of the
Treasury or the Secretary of Labor;
(C) The IDR entity has failed to comply with requests for
information from the Secretary, the Secretary of the
[[Page 56133]]
Treasury, or the Secretary of Labor as part of the certification
process;
(D) In conducting payment determinations, including those outside
the Federal IDR process, the IDR entity has failed to meet the
standards that applied to those determinations or reviews, including
standards of independence and impartiality; or
(E) The IDR entity is otherwise not fit or qualified to make
determinations under the Federal IDR process.
(ii) Revocation of certification of a certified IDR entity. The
Secretary, jointly with the Secretary of the Treasury and the Secretary
of Labor, may revoke the certification of a certified IDR entity under
paragraph (e)(1) of this section if, as a result of an audit, a
petition described in paragraph (e)(5) of this section, or otherwise,
the Secretary determines the following:
(A) The certified IDR entity has a pattern or practice of
noncompliance with any requirements of this paragraph (e);
(B) The certified IDR entity is operating in a manner that hinders
the efficient and effective administration of the Federal IDR process;
(C) The certified IDR entity no longer meets the applicable
standards for certification set forth under this paragraph (e);
(D) The certified IDR entity has committed or participated in
fraudulent or abusive activities, including submission of false or
fraudulent data to the Secretary, the Secretary of the Treasury, or the
Secretary of Labor;
(E) The certified IDR entity lacks the financial viability to
provide arbitration under the Federal IDR process;
(F) The certified IDR entity has failed to comply with requests
from the Secretary, the Secretary of the Treasury, or the Secretary of
Labor made as part of an audit, including failing to submit all records
of the certified IDR entity that pertain to its activities within the
Federal IDR process; or
(G) The certified IDR entity is otherwise no longer fit or
qualified to make determinations.
(iii) Notice of denial or revocation. The Secretary, jointly with
the Secretary of the Treasury and the Secretary of Labor, will issue a
written notice of denial to the IDR entity or revocation to the
certified IDR entity within 10 business days of the Secretary's
decision, including the effective date of denial or revocation, the
reason(s) for denial or revocation, and the opportunity to request
appeal of the denial or revocation.
(iv) Request for appeal of denial or revocation. To request an
appeal, the IDR entity or certified IDR entity must submit a request
for appeal to the Secretary within 30 business days of the date of the
notice under paragraph (e)(6)(iii) of this section of denial or
revocation and in the manner prescribed by the instructions to the
notice. During this time period, the Secretary, jointly with the
Secretary of the Treasury and the Secretary of Labor, will not issue a
notice of final denial or revocation and a certified IDR entity may
continue to work on previously assigned determinations but may not
accept new determinations. If the IDR entity or certified IDR entity
does not timely submit a request for appeal of the denial or
revocation, the Secretary, jointly with the Secretary of the Treasury
and the Secretary of Labor, will issue a notice of final denial or
revocation to the IDR entity or certified IDR entity (if applicable)
and the petitioner.
(v) Denial or final revocation. Upon notice of denial or final
revocation, the IDR entity shall not be considered a certified IDR
entity and therefore shall not be eligible to accept payment
determinations under the Federal IDR process. Moreover, after a notice
of final revocation, the IDR entity may not re-apply to be a certified
IDR entity until on or after the 181st day after the date of the notice
of denial or final revocation.
(f) Reporting of information relating to the Federal IDR process--
(1) Reporting of information. Within 30 business days of the close of
each month, for qualified IDR items and services furnished on or after
January 1, 2022, each certified IDR entity must, in a form and manner
specified by the Secretary, report:
(i) The number of notices of IDR initiation submitted under
paragraph (b)(2) of this section to the certified IDR entity during the
immediately preceding month;
(ii) The size of the provider practices and the size of the
facilities submitting notices of IDR initiation under paragraph (b)(2)
of this section during the immediately preceding month, as required to
be provided to the certified IDR entity under paragraph (c)(4)(i)(A)(2)
of this section;
(iii) The number of such notices of IDR initiation with respect to
which a determination was made under paragraph (c)(4)(ii) of this
section;
(iv) The number of times during the month that the out-of-network
rate determined (or agreed to) under this section has exceeded the
qualifying payment amount, specified by qualified IDR items and
services;
(v) With respect to each notice of IDR initiation under paragraph
(b)(2) of this section for which such a determination was made, the
following information:
(A) A description of the qualified IDR items and services included
with respect to the notification, including the relevant billing and
service codes;
(B) The relevant geographic region for purposes of the qualifying
payment amount for the qualified IDR items and services with respect to
which the notification was provided;
(C) The amount of the offer submitted under paragraph (c)(4)(i) of
this section by the plan or issuer (as applicable) and by the provider
or facility (as applicable) expressed as a dollar amount and as a
percentage of the qualifying payment amount;
(D) Whether the offer selected by the certified IDR entity under
paragraph (c)(4) of this section was the offer submitted by the plan or
issuer (as applicable) or by the provider or facility (as applicable);
(E) The amount of the selected offer expressed as a dollar amount
and as a percentage of the qualifying payment amount;
(F) The rationale for the certified IDR entity's decision,
including the extent to which the decision relied on the criteria in
paragraph (c)(4)(iv) of this section;
(G) The practice specialty or type of each provider or facility,
respectively, involved in furnishing each qualified IDR item or
service;
(H) The identity for each plan or issuer, and provider or facility,
with respect to the notification. Specifically, each certified IDR
entity must provide each party's name and address, as applicable; and
(I) For each determination, the number of business days elapsed
between selection of the certified IDR entity and the determination of
the out-of-network rate by the certified IDR entity.
(vi) The total amount of certified IDR entity fees paid to the
certified IDR entity under paragraph (d)(1) of this section during the
month.
(2) [Reserved]
(g) Extension of time periods for extenuating circumstances--(1)
General. The time periods specified in this section (other than the
time for payment, if applicable, under paragraph (c)(4)(ix) of this
section) may be extended in extenuating circumstances at the
Secretary's discretion if:
(i) An extension is necessary to address delays due to matters
beyond the control of the parties or for good cause; and
(ii) The parties attest that prompt action will be taken to ensure
that the determination under this section is made as soon as
administratively practicable under the circumstances.
[[Page 56134]]
(2) Process to request an extension. The parties may request an
extension by submitting a request for extension due to extenuating
circumstances through the Federal IDR portal if the extension is
necessary to address delays due to matters beyond the control of the
parties or for good cause.
(h) Applicability date. The provisions of this section are
applicable with respect to plan years (in the individual market, policy
years) beginning on or after January 1, 2022, except that the
provisions regarding IDR entity certification at paragraphs (a) and (e)
of this section are applicable beginning on October 7, 2021.
Sec. 149.520 Independent dispute resolution process for air
ambulance services.
(a) Definitions. Unless otherwise stated, the definitions in Sec.
149.30 apply.
(b) Determination of out-of-network rates to be paid by health
plans and health insurance issuers; independent dispute resolution
process--(1) In general. Except as provided in paragraphs (b)(2) and
(3) of this section, in determining the out-of-network rate to be paid
by group health plans and health insurance issuers offering group or
individual health insurance coverage for out-of-network air ambulance
services, plans and issuers must comply with the requirements of Sec.
149.510, except that references in Sec. 149.510 to the additional
circumstances in Sec. 149.510(c)(4)(iii)(C) shall be understood to
refer to paragraph (b)(2) of this section.
(2) Additional information. Additional information submitted by a
party, provided the information is credible, relates to the
circumstances described in paragraphs (b)(2)(i) through (vi) of this
section, with respect to a qualified IDR service of a nonparticipating
provider of air ambulance services or health insurance issuer of group
or individual health insurance coverage that is the subject of a
payment determination. This information must also clearly demonstrate
that the qualifying payment amount is materially different from the
appropriate out-of-network rate.
(i) The quality and outcomes measurements of the provider that
furnished the services.
(ii) The acuity of the condition of the participant, beneficiary,
or enrollee receiving the service, or the complexity of furnishing the
service to the participant, beneficiary, or enrollee.
(iii) The training, experience, and quality of the medical
personnel that furnished the air ambulance services.
(iv) Ambulance vehicle type, including the clinical capability
level of the vehicle.
(v) Population density of the point of pick-up (as defined in 42
CFR 414.605) for the air ambulance (such as urban, suburban, rural, or
frontier).
(vi) Demonstrations of good faith efforts (or lack thereof) made by
the nonparticipating provider of air ambulance services or the plan or
issuer to enter into network agreements with each other and, if
applicable, contracted rates between the provider of air ambulance
services and the plan or issuer, as applicable, during the previous 4
plan years.
(3) Reporting of information relating to the IDR process. In
applying the requirements of Sec. 149.510(f), within 30 business days
of the close of each month, for services furnished on or after January
1, 2022, the information the certified IDR entity must report, in a
form and manner specified by the Secretary, with respect to the Federal
IDR process involving air ambulance services is:
(i) The number of notices of IDR initiation submitted under the
Federal IDR process to the certified IDR entity that pertain to air
ambulance services during the immediately preceding month;
(ii) The number of such notices of IDR initiation with respect to
which a final determination was made under Sec. 149.510(c)(4)(ii) (as
applied by paragraph (b)(1) of this section);
(iii) The number of times the payment amount determined (or agreed
to) under this subsection has exceeded the qualifying payment amount,
specified by services;
(iv) With respect to each notice of IDR initiation under Sec.
149.510(b)(2) of this part (as applied by paragraph (b)(1) of this
section) for which a determination was made, the following information:
(A) A description of each air ambulance service included in such
notification, including the relevant billing and service codes;
(B) The point of pick-up (as defined in 42 CFR 414.605) for the
services included in such notification;
(C) The amount of the offers submitted under Sec. 149.510(c)(4)(i)
(as applied by paragraph (b)(1) of this section) by the group health
plan or health insurance issuer (as applicable) and by the
nonparticipating provider of air ambulance services, expressed as a
dollar amount and as a percentage of the qualifying payment amount;
(D) Whether the offer selected by the certified IDR entity under
Sec. 149.510(c)(4)(ii) (as applied by paragraph (b)(1) of this
section) to be the payment amount applied was the offer submitted by
the plan or issuer (as applicable) or by the provider of air ambulance
services;
(E) The amount of the selected offer expressed as a dollar amount
and as a percentage of the qualifying payment amount;
(F) The rationale for the certified IDR entity's decision,
including the extent to which the decision relied on the criteria in
paragraph (b)(2) of this section;
(G) Air ambulance vehicle type, including the clinical capability
level of such vehicle (to the extent this information has been provided
to the certified IDR entity);
(H) The identity for each plan or issuer and provider of air
ambulance services, with respect to the notification. Specifically,
each certified IDR entity must provide each party's name and address,
as applicable; and
(I) For each determination, the number of business days elapsed
between selection of the certified IDR entity and the selection of the
payment amount by the certified IDR entity.
(v) The total amount of certified IDR entity fees paid to the
certified IDR entity under paragraph Sec. 149.510(d)(1) (as applied by
paragraph (b)(1) of this section) during the month for determinations
involving air ambulance services.
(c) Applicability date. The provisions of this section are
applicable with respect to plan years (in the individual market, policy
years) beginning on or after January 1, 2022.
0
21. Subpart G, consisting of Sec. Sec. 149.610 and 149.620, is added
to read as follows:
Subpart G--Protection of Uninsured or Self-Pay Individuals
Sec. 149.610 Requirements for provision of good faith estimates of
expected charges for uninsured (or self-pay) individuals.
(a) Scope and definitions--(1) Scope. This section sets forth
requirements for health care providers and health care facilities
related to the issuance of good faith estimates of expected charges for
uninsured (or self-pay) individuals (or their authorized
representatives), upon request or upon scheduling an item or service.
(2) Definitions. For purposes of this section, the following
definitions apply:
(i) Authorized representative means an individual authorized under
State law to provide consent on behalf of the uninsured (or self-pay)
individual, provided that the individual is not a provider affiliated
with a facility or an employee of a provider or facility represented in
the good faith estimate,
[[Page 56135]]
unless such provider or employee is a family member of the uninsured
(or self-pay) individual.
(ii) Convening health care provider or convening health care
facility (convening provider or convening facility) means the provider
or facility who receives the initial request for a good faith estimate
from an uninsured (or self-pay) individual and who is or, in the case
of a request, would be responsible for scheduling the primary item or
service.
(iii) Co-health care provider or co-health care facility (co-
provider or co-facility) means a provider or facility other than a
convening provider or a convening facility that furnishes items or
services that are customarily provided in conjunction with a primary
item or service.
(iv) Diagnosis code means the code that describes an individual's
disease, disorder, injury, or other related health conditions using the
International Classification of Diseases (ICD) code set.
(v) Expected charge means, for an item or service, the cash pay
rate or rate established by a provider or facility for an uninsured (or
self-pay) individual, reflecting any discounts for such individuals,
where the good faith estimate is being provided to an uninsured (or
self-pay) individual; or the amount the provider or facility would
expect to charge if the provider or facility intended to bill a plan or
issuer directly for such item or service when the good faith estimate
is being furnished to a plan or issuer.
(vi) Good faith estimate means a notification of expected charges
for a scheduled or requested item or service, including items or
services that are reasonably expected to be provided in conjunction
with such scheduled or requested item or service, provided by a
convening provider, convening facility, co-provider, or co-facility.
(vii) Health care facility (facility) means an institution (such as
a hospital or hospital outpatient department, critical access hospital,
ambulatory surgical center, rural health center, federally qualified
health center, laboratory, or imaging center) in any State in which
State or applicable local law provides for the licensing of such an
institution, that is licensed as such an institution pursuant to such
law or is approved by the agency of such State or locality responsible
for licensing such institution as meeting the standards established for
such licensing.
(viii) Health care provider (provider) means a physician or other
health care provider who is acting within the scope of practice of that
provider's license or certification under applicable State law,
including a provider of air ambulance services.
(ix) Items or services has the meaning given in 45 CFR
147.210(a)(2).
(x) Period of care means the day or multiple days during which the
good faith estimate for a scheduled or requested item or service (or
set of scheduled or requested items or services) are furnished or are
anticipated to be furnished, regardless of whether the convening
provider, convening facility, co-providers, or co-facilities are
furnishing such items or services, including the period of time during
which any facility equipment and devices, telemedicine services,
imaging services, laboratory services, and preoperative and
postoperative services that would not be scheduled separately by the
individual, are furnished.
(xi) Primary item or service means the item or service to be
furnished by the convening provider or convening facility that is the
initial reason for the visit.
(xii) Service code means the code that identifies and describes an
item or service using the Current Procedural Terminology (CPT),
Healthcare Common Procedure Coding System (HCPCS), Diagnosis-Related
Group (DRG) or National Drug Codes (NDC) code sets.
(xiii) Uninsured (or self-pay) individual means:
(A) An individual who does not have benefits for an item or service
under a group health plan, group or individual health insurance
coverage offered by a health insurance issuer, Federal health care
program (as defined in section 1128B(f) of the Social Security Act), or
a health benefits plan under chapter 89 of title 5, United States Code;
or
(B) An individual who has benefits for such item or service under a
group health plan, or individual or group health insurance coverage
offered by a health insurance issuer, or a health benefits plan under
chapter 89 of title 5, United States Code but who does not seek to have
a claim for such item or service submitted to such plan or coverage.
(b) Requirements of providers and facilities--(1) Requirements for
convening providers and convening facilities. A convening provider or
convening facility must determine if an individual is an uninsured (or
self-pay) individual by:
(i) Inquiring if an individual is enrolled in a group health plan,
group or individual health insurance coverage offered by a health
insurance issuer, Federal health care program (as defined in section
1128B(f) of the Social Security Act), or a health benefits plan under
chapter 89 of title 5, United States Code;
(ii) Inquiring whether an individual who is enrolled in a group
health plan, or group or individual health insurance coverage offered
by a health insurance issuer or a health benefits plan under chapter 89
of title 5, United States Code is seeking to have a claim submitted for
the primary item or service with such plan or coverage; and
(iii) Informing all uninsured (or self-pay) individuals of the
availability of a good faith estimate of expected charges upon
scheduling an item or service or upon request; information regarding
the availability of good faith estimates for uninsured (or self-pay)
individuals must be:
(A) Written in a clear and understandable manner, prominently
displayed (and easily searchable from a public search engine) on the
convening provider's or convening facility's website, in the office,
and on-site where scheduling or questions about the cost of items or
services occur;
(B) Orally provided when scheduling an item or service or when
questions about the cost of items or services occur; and
(C) Made available in accessible formats, and in the language(s)
spoken by individual(s) considering or scheduling items or services
with such convening provider or convening facility.
(iv) Convening providers and convening facilities shall consider
any discussion or inquiry regarding the potential costs of items or
services under consideration as a request for a good faith estimate;
(v) Upon the request for a good faith estimate from an uninsured
(or self-pay) individual or upon scheduling a primary item or service
to be furnished for such an individual, the convening provider or
convening facility must contact, no later than 1 business day of such
scheduling or such request, all co-providers and co-facilities who are
reasonably expected to provide items or services in conjunction with
and in support of the primary item or service and request that the co-
providers or co-facilities submit good faith estimate information (as
specified in paragraphs (b)(2) and (c)(2) of this section) to the
convening provider or facility; the request must also include the date
that good faith estimate information must be received by the convening
provider or facility;
(vi) Provide a good faith estimate (as specified in paragraph
(c)(1) of this section) to uninsured (or self-pay)
[[Page 56136]]
individuals within the following timeframes:
(A) When a primary item or service is scheduled at least 3 business
days before the date the item or service is scheduled to be furnished:
Not later than 1 business day after the date of scheduling;
(B) When a primary item or service is scheduled at least 10
business days before such item or service is scheduled to be furnished:
Not later than 3 business days after the date of scheduling; or
(C) When a good faith estimate is requested by an uninsured (or
self-pay) individual: Not later than 3 business days after the date of
the request.
(vii) A convening provider or convening facility must provide an
uninsured (or self-pay) individual who has scheduled an item or service
with a new good faith estimate if a convening provider, convening
facility, co-provider, or co-facility anticipates or is notified of any
changes to the scope of a good faith estimate (such as anticipated
changes to the expected charges, items, services, frequency,
recurrences, duration, providers, or facilities) previously furnished
at the time of scheduling; a new good faith estimate must be issued to
the uninsured (or self-pay) individual no later than 1 business day
before the items or services are scheduled to be furnished.
(viii) If any changes in expected providers or facilities
represented in a good faith estimate occur less than 1 business day
before the item or service is scheduled to be furnished, the
replacement provider or facility must accept as its good faith estimate
of expected charges the good faith estimate for the relevant items or
services included in the good faith estimate for the items or services
being furnished that was provided by the replaced provider or facility.
(ix) For good faith estimates provided upon request of an uninsured
(or self-pay) individual, upon scheduling of the requested item or
service, the convening provider or convening facility must provide the
uninsured (or self-pay) individual with a new good faith estimate for
the scheduled item or service within the timeframes specified in
paragraphs (b)(1)(vi)(A) and (B) of this section; and
(x) A convening provider or convening facility may issue a single
good faith estimate for recurring primary items or services if the
following requirements are met, in addition to the requirements under
this section:
(A) The good faith estimate for recurring items or services must
include, in a clear and understandable manner, the expected scope of
the recurring primary items or services (such as timeframes, frequency,
and total number of recurring items or services); and
(B) The scope of a good faith estimate for recurring primary items
or services must not exceed 12 months. If additional recurrences of
furnishing such items or services are expected beyond 12 months (or as
specified under paragraph (b)(vii) of this section), a convening
provider or convening facility must provide an uninsured (or self-pay)
individual with a new good faith estimate, and communicate such changes
(such as timeframes, frequency, and total number of recurring items or
services) upon delivery of the new good faith estimate to help patients
understand what has changed between the initial good faith estimate and
the new good faith estimate.
(2) Requirements for co-providers and co-facilities. (i) Co-
providers and co-facilities must submit good faith estimate information
(as specified in paragraph (c)(2) of this section) upon the request of
the convening provider or convening facility. The co-provider or co-
facility must provide, and the convening provider or convening facility
must receive, the good faith estimate information no later than 1
business day after the co-provider or co-facility receives the request
from the convening provider or convening facility.
(ii) Co-providers and co-facilities must notify and provide new
good faith estimate information to a convening provider or convening
facility if the co-provider or co-facility anticipates any changes to
the scope of good faith estimate information previously submitted to a
convening provider or convening facility (such as anticipated changes
to the expected charges, items, services, frequency, recurrences,
duration, providers, or facilities).
(iii) If any changes in the expected co-providers or co-facilities
represented in a good faith estimate occur less than 1 business day
before that the item or service is scheduled to be furnished, the
replacement co-provider or co-facility must accept as its good faith
estimate of expected charges the good faith estimate for the relevant
items or services included in the good faith estimate for the item or
service being furnished that was provided by the replaced provider or
facility.
(iv) In the event that an uninsured (or self-pay) individual
separately schedules or requests a good faith estimate from a provider
or facility that would otherwise be a co-provider or co-facility, that
provider or facility is considered a convening provider or convening
facility for such item or service and must meet all requirements in
paragraphs (b)(1) and (c)(1) of this section for issuing a good faith
estimate to an uninsured (or self-pay) individual.
(c) Content requirements of a good faith estimate issued to an
uninsured (or self-pay) individual. (1) A good faith estimate issued to
an uninsured (or self-pay) individual must include:
(i) Patient name and date of birth;
(ii) Description of the primary item or service in clear and
understandable language (and if applicable, the date the primary item
or service is scheduled);
(iii) Itemized list of items or services, grouped by each provider
or facility, reasonably expected to be furnished for the primary item
or service, and items or services reasonably expected to be furnished
in conjunction with the primary item or service, for that period of
care including:
(A) Items or services reasonably expected to be furnished by the
convening provider or convening facility for the period of care; and
(B) Items or services reasonably expected to be furnished by co-
providers or co-facilities (as specified in paragraphs (b)(2) and
(c)(2) of this section);
(iv) Applicable diagnosis codes, expected service codes, and
expected charges associated with each listed item or service;
(v) Name, National Provider Identifier, and Tax Identification
Number of each provider or facility represented in the good faith
estimate, and the State(s) and office or facility location(s) where the
items or services are expected to be furnished by such provider or
facility;
(vi) List of items or services that the convening provider or
convening facility anticipates will require separate scheduling and
that are expected to occur before or following the expected period of
care for the primary item or service. The good faith estimate must
include a disclaimer directly above this list that includes the
following information: Separate good faith estimates will be issued to
an uninsured (or self-pay) individual upon scheduling or upon request
of the listed items or services; notification that for items or
services included in this list, information such as diagnosis codes,
service codes, expected charges and provider or facility identifiers do
not need to be included as that information will be provided in
separate good faith estimates upon scheduling or upon
[[Page 56137]]
request of such items or services; and include instructions for how an
uninsured (or self-pay) individual can obtain good faith estimates for
such items or services;
(viii) A disclaimer that informs the uninsured (or self-pay)
individual that there may be additional items or services the convening
provider or convening facility recommends as part of the course of care
that must be scheduled or requested separately and are not reflected in
the good faith estimate;
(ix) A disclaimer that informs the uninsured (or self-pay)
individual that the information provided in the good faith estimate is
only an estimate regarding items or services reasonably expected to be
furnished at the time the good faith estimate is issued to the
uninsured (or self-pay) individual and that actual items, services, or
charges may differ from the good faith estimate; and
(x) A disclaimer that informs the uninsured (or self-pay)
individual of the uninsured (or self-pay) individual's right to
initiate the patient-provider dispute resolution process if the actual
billed charges are substantially in excess of the expected charges
included in the good faith estimate, as specified in Sec. 149.620;
this disclaimer must include instructions for where an uninsured (or
self-pay) individual can find information about how to initiate the
patient-provider dispute resolution process and state that the
initiation of the patient-provider dispute resolution process will not
adversely affect the quality of health care services furnished to an
uninsured (or self-pay) individual by a provider or facility; and
(xi) A disclaimer that the good faith estimate is not a contract
and does not require the uninsured (or self-pay) individual to obtain
the items or services from any of the providers or facilities
identified in the good faith estimate.
(2) [Reserved]
(d) Content Requirements for Good Faith Estimate Information
Submitted by Co-Providers or Co-Facilities to Convening Providers or
Convening Facilities. (1) Good faith estimate information submitted to
convening providers or convening facilities by co-providers or co-
facilities for inclusion in the good faith estimate (described in
paragraph (c)(1) of this section) must include:
(i) Patient name and date of birth;
(ii) Itemized list of items or services expected to be provided by
the co-provider or co-facility that are reasonably expected to be
furnished in conjunction with the primary item or service as part of
the period of care;
(iii) Applicable diagnosis codes, expected service codes, and
expected charges associated with each listed item or service;
(iv) Name, National Provider Identifiers, and Tax Identification
Numbers of the co-provider or co-facility, and the State(s) and office
or facility location(s) where the items or services are expected to be
furnished by the co-provider or co-facility; and
(v) A disclaimer that the good faith estimate is not a contract and
does not require the uninsured (or self-pay) individual to obtain the
items or services from any of the co-providers or co-facilities
identified in the good faith estimate.
(2) [Reserved]
(e) Required Methods for Providing Good Faith Estimates for
Uninsured (or Self-Pay) Individuals. (1) A good faith estimate must be
provided in written form either on paper or electronically, pursuant to
the uninsured (or self-pay) individual's requested method of delivery,
and within the timeframes described in paragraph (b) of this section.
Good faith estimates provided electronically must be provided in a
manner that the uninsured (or self-pay) individual can both save and
print. A good faith estimate must be provided and written using clear
and understandable language and in a manner calculated to be understood
by the average uninsured (or self-pay) individual.
(2) To the extent that an uninsured (or self-pay) individual
requests a good faith estimate in a method other than paper or
electronically (for example, by phone or orally in person), the
convening provider may orally inform the uninsured (or self-pay)
individual of information contained in the good faith estimate using
the method requested by the uninsured (or self-pay) individual;
however, in order for a convening provider or convening facility to
meet the requirements of this section, the convening provider or
convening facility must issue the good faith estimate to the uninsured
(or self-pay) individual in written form as specified in paragraph
(e)(1) of this section.
(f) Additional compliance provisions. (1) A good faith estimate
issued to uninsured (or self-pay) individual under this section is
considered part of the patient's medical record and must be maintained
in the same manner as a patient's medical record. Convening providers
and convening facilities must provide a copy of any previously issued
good faith estimate furnished within the last 6 years to an uninsured
(or self-pay) individual upon the request of the uninsured (or self-
pay) individual.
(2) Providers or facilities that issue good faith estimates issued
under State processes that do not meet the requirements set forth in
this section fail to comply with the requirements of this section.
(3) A provider or facility will not fail to comply with this
section solely because, despite acting in good faith and with
reasonable due diligence, the provider or facility makes an error or
omission in a good faith estimate required under this section, provided
that the provider or facility corrects the information as soon as
practicable. If items or services are furnished before an error in a
good faith estimate is addressed, the provider or facility may be
subject to patient-provider dispute resolution if the actual billed
charges are substantially in excess of the good faith estimate (as
described in Sec. 149.620).
(4) To the extent compliance with this section requires a provider
or facility to obtain information from any other entity or individual,
the provider or facility will not fail to comply with this section if
it relied in good faith on the information from the other entity,
unless the provider or facility knows, or reasonably should have known,
that the information is incomplete or inaccurate. If the provider or
facility learns that the information is incomplete or inaccurate, the
provider or facility must provide corrected information to the
uninsured (or self-pay) individual as soon as practicable. If items or
services are furnished before an error in a good faith estimate is
addressed, the provider or facility may be subject to patient-provider
dispute resolution if the actual billed charges are substantially in
excess of the good faith estimate (as described in Sec. 149.620).
(g) Applicability--(1) Applicability date. The requirements of this
section are applicable for good faith estimates requested on or after
January 1, 2022 or for good faith estimates required to be provided in
connection with items or services scheduled on or after January 1,
2022.
(2) Applicability with other laws. Nothing in this section alters
or otherwise affects a provider's or facility's requirement to comply
with other applicable State or Federal laws, including those governing
the accessibility, privacy, or security of information required to be
disclosed under this section, or those governing the ability of
properly authorized representatives to access uninsured (or self-pay)
individuals' information held by providers or facilities, except to the
[[Page 56138]]
extent a state law prevents the application of this section.
Sec. 149.620 Requirements for the patient-provider dispute resolution
process.
(a) Scope and definitions--(1) Scope. This section sets forth
requirements for the patient-provider dispute resolution process, under
which an uninsured (or self-pay) individual, with respect to eligible
items or services under paragraph (b) of this section, may submit
notification under paragraph (c) of this section to initiate the
patient-provider dispute resolution process. This section sets forth in
paragraph (d) of this section the certification requirements for a
dispute resolution entity to become a Selected Dispute Resolution (SDR)
entity contracted to resolve the patient-provider dispute, and the
process for HHS to select SDR entities for patient-provider disputes
under paragraph (e) of this section. This section sets forth in
paragraph (f) the process and requirements regarding how SDR entities
will determine the amount to be paid by an uninsured (or self-pay)
individual to a provider or facility. This section also sets forth
requirements for an administrative fee under paragraph (g) of this
section and minimum requirements under paragraph (h) of this section
for states that wish to establish processes for performing patient-
provider dispute resolution in place of the Federal process.
(2) Definitions. Unless otherwise stated, the definitions in Sec.
149.610(a)(2) apply to this section. Definitions related to
confidentiality set forth in Sec. 149.510(a)(2), including the
definitions for breach, individually identifiable health information
(IIHI), and unsecured IIHI also apply to this section. Additionally,
for purposes of this section, the following definitions apply:
(i) Billed charge(s) means the amount billed by a provider or
facility for an item or service.
(ii) Substantially in excess means, with respect to the total
billed charges by a provider or facility, an amount that is at least
$400 more than the total amount of expected charges listed on the good
faith estimate for the provider or facility.
(iii) Total billed charge(s) means the total of billed charges, by
a provider or-facility, for all primary items or services and all other
items or services furnished in conjunction with the primary items or
services to an uninsured (or self-pay) individual, regardless of
whether such items or services were included in the good faith
estimate.
(b) Eligibility for patient-provider dispute resolution--(1) In
general. In general, an item or service provided by a convening
provider, convening facility, co-provider, or co-facility is eligible
for the patient-provider dispute resolution process if the total billed
charges (by the particular convening provider, convening facility, or
co-provider or co-facility listed in the good faith estimate), are
substantially in excess of the total expected charges for that specific
provider or facility listed on the good faith estimate, as required
under Sec. 149.610.
(2) Special rule for co-provider or co-facility substitution. If a
co-provider or co-facility that provided an estimate of the expected
charge for an item or service in the good faith estimate is substituted
for a different co-provider or co-facility, an item or service billed
by the replacement co-provider or co-facility is eligible for dispute
resolution if the billed charge is substantially in excess of the total
expected charges included in the good faith estimate for the original
co-provider or co-facility. If the replacement provider or facility
provides the uninsured (or self-pay) individual with a new good faith
estimate in accordance with Sec. 149.610(b)(2), then the determination
of whether an item or service billed by the replacement co-provider or
co-facility is eligible for dispute resolution is based on whether the
total billed charge for the replacement co-provider or co-facility is
substantially in excess of the total expected charges included in the
good faith estimate provided by the replacement co-provider or co-
facility.
(c) Initiation of the Patient Provider dispute resolution process--
(1) In general. With respect to an item or service that meets the
requirements in paragraph (b) of this section, an uninsured (or self-
pay) individual (or their authorized representative, excluding any
providers directly represented in the good faith estimate, providers
associated with these providers, non-clinical staff associated with
these providers, or individuals employed or associated with a facility
that had included services in the good faith estimate) may initiate the
patient-provider dispute resolution process by submitting a
notification (initiation notice) to HHS as specified in paragraph
(c)(2) of this section postmarked within 120 calendar days of receiving
the initial bill containing charges for the item or service that is
substantially in excess of the expected charges in the good faith
estimate. In addition, the uninsured (or self-pay) individual must
submit an administrative fee as described in paragraph (g) of this
section to the SDR entity in an amount and in a manner that will be
clarified in guidance by HHS.
(2) Initiation notice--(i) Content. The notice to initiate the
patient-provider dispute resolution process must include:
(A) Information sufficient to identify the item or service under
dispute, including the date the item or service was provided, and a
description of the item or service;
(B) A copy of the provider or facility bill for the item and
service under dispute (the copy can be a photocopy or an electronic
image so long as the document is readable);
(C) A copy of the good faith estimate for the item or service under
dispute (the copy can be a photocopy or an electronic image so long as
the document is readable);
(D) If not included on the good faith estimate, contact information
of the provider or facility involved, including, if available, name,
email address, phone number, and mailing address;
(E) The State where the items or services in dispute were
furnished; and
(F) The uninsured (or self-pay) individual's communication
preference, through the Federal IDR portal, or electronic or paper
mail.
(ii) Manner. The uninsured (or self-pay) individual or their
authorized representative must submit the initiation notice, to the
Secretary by submitting the notice via the Federal IDR portal,
electronically, or on paper, in the form and manner specified by the
Secretary. The date of initiation of the patient-provider dispute
resolution process will be the date the Secretary receives such
initiation notice. In addition, the uninsured (or self-pay) individual
must submit an administrative fee as described in paragraph (g) of this
section to the SDR entity in an amount and in a manner that will be
clarified in guidance by HHS.
(3) Notification of SDR entity receipt. Upon receipt of the
initiation notice described in paragraph (c)(1) of this section, HHS
will select an SDR entity according to the process described in
paragraph (e) of this section. Upon selection, the SDR entity will,
through the Federal IDR portal, or electronic or paper mail, notify the
uninsured (or self-pay) individual, and the provider or facility that a
patient-provider dispute resolution request has been received and is
under review. Such notice shall also include:
(i) Sufficient information to identify the item or service under
dispute;
(ii) The date the initiation notice was received;
[[Page 56139]]
(iii) Notice of the additional requirements for providers or
facilities specified in paragraphs (c)(5) and (6) of this section while
the patient-provider dispute resolution process is pending; and
(iv) Information to the uninsured (or self-pay) individual about
the availability of consumer assistance resources that can assist the
individual with the dispute.
(4) Validation of initiation notice. After the selection of the SDR
entity, as described in paragraph (c)(2) of this section, the SDR
entity shall review the initiation notice to ensure the items or
services in dispute meet the eligibility criteria described in
paragraph (b) of this section and the initiation notice contains the
required information described in paragraph (c)(2). The SDR entity will
notify the uninsured (or self-pay) individual of the outcome of the
review, including, if applicable, providing the individual with 21
calendar days to submit supplemental information when the initiation
notice is determined to be incomplete or the items or services are
determined ineligible for dispute resolution.
(i) If the SDR entity determines that the item or service meets the
eligibility criteria, and the initiation notice contains the required
information, the SDR entity will notify the uninsured (or self-pay)
individual and the provider or facility that the that the item or
service has been determined eligible for dispute resolution. The SDR
entity shall request the provider or facility provide the information
described in paragraph (f)(2) of this section within 10 business days.
(ii) If the SDR entity determines that the item or service does not
meet the eligibility criteria or that the initiation notice does not
contain the required information, the SDR entity will provide an
insufficiency notice to the uninsured (or self-pay) individual of the
determination and the reasons for the determination and will notify the
uninsured (or self-pay) individual that the individual may submit
supplemental information, postmarked within 21 calendar days, to
resolve any deficiencies identified. If the insufficiency notice is not
made available to an individual in a format that is accessible to
individuals with disabilities or with low-English proficiency within 14
calendar days of such a request from the individual, a 14-calendar-day
extension will be granted so that the individual will have a total of
35 calendar days to submit supplemental information.
(5) Prohibitions on collections. While the patient-provider dispute
resolution process is pending, the provider or facility must not move
the bill for the disputed item or service into collection or threaten
to do so, or if the bill has already moved into collection, the
provider or facility should cease collection efforts. The provider or
facility must also suspend the accrual of any late fees on unpaid bill
amounts until after the dispute resolution process has concluded.
(6) Prohibitions on retributive action. The provider or facility
must not take or threaten to take any retributive action against an
uninsured (or self-pay) individual for utilizing the patient-provider
dispute resolution process to seek resolution for a disputed item or
service.
(d) Certification of SDR entities--(1) In general. The Secretary
shall contract with and certify only that number of SDR entities the
Secretary believes will be necessary to timely resolve the volume of
patient-provider disputes. As part of the contract process with HHS, a
potential SDR entity must satisfy the Federal IDR entity certification
criteria specified in Sec. 149.510(e), subject to the exceptions set
forth in paragraphs (d)(2) of this section. In addition, the SDR entity
must also meet the conflict-of-interest mitigation policy requirements
specified in paragraph (d)(3) of this section. Through this contract
process, HHS will assess the dispute resolution entity for compliance
with all applicable SDR entity certification requirements.
(2) Exception for SDR entity certification. With respect to
certified IDR entity requirements that do not apply to an SDR entity,
potential SDR entities are not required to make the following
submissions:
(i) Information regarding the service area(s) for which the entity
will arbitrate cases, however, a potential SDR entity will need to
submit information on their ability to operate nationwide through the
contract process;
(ii) Fee schedule for batched and non-batched claims;
(iii) Policies and procedures to hold dispute resolution entity
fees in a trust or escrow account, however, a potential SDR entity must
submit policies and procedures to hold administrative fees, as
described in paragraph (g) of this section, and remit them to HHS in a
manner specified by HHS.
(3) Conflict of interest mitigation policies. A potential SDR
entity must also provide additional information on the SDR entity's
conflict-of-interest policies and procedures, including outlining a
mitigation plan in the event of an entity-level conflict of interest,
under which no dispute resolution personnel affiliated with the SDR
entity can fairly and impartially adjudicate a case, in compliance with
the standards in Federal Acquisition Regulation-subpart 9.5 (48 CFR
subpart 9.5). Such conflict of interest mitigation plan could include
utilizing a subcontractor without a conflict of interest that meets SDR
entity requirements to conduct the patient-provider dispute resolution
for the case.
(e) Selection of an SDR entity. (1) After the Secretary has
received the initiation notice as described in paragraph (c) of this
section, the Secretary will assign an SDR entity that is certified and
contracted under paragraph (d) of this section to conduct the dispute
resolution process for the item or service. Upon receiving an
assignment from the Secretary to make a determination for an item or
service as described in paragraph (c)(3) of this section, the SDR
entity shall ensure that no conflict of interest exists, and in such
case, shall notify the uninsured (or self-pay) individual and the
provider or facility of the selection of the SDR entity.
(2) Should a conflict of interest exist, the SDR entity must submit
notice to the Secretary of such conflict no later than 3 business days
following selection by the Secretary. The Secretary will then
automatically select a new SDR entity to conduct the patient-provider
dispute resolution process for the item or service. In the event that
no SDR entities are available to resolve the dispute, the initially-
selected SDR entity will be required to initiate their entity-level
conflict of interest mitigation plan as described in paragraph (d)(3)
of this section. If no other contracted SDR entity, and no
subcontracted entity, is able to provide the patient-provider dispute
resolution services due to conflicts of interest that cannot be
sufficiently mitigated or any other reason, HHS may seek to contract
with an additional SDR entity as needed. In the event that HHS needs to
contract with an additional SDR entity, the time periods specified in
this section may be extended at HHS' discretion to allow for HHS to
contract with that SDR entity.
(3) Conflict of interest means, with respect to a party to a
payment determination, or SDR entity, a material relationship, status,
or condition of the party, or SDR entity that impacts the ability of
the SDR entity to make an unbiased and impartial payment determination.
For purposes of this section, a conflict of interest exists when an SDR
entity is:
(i) A provider or a facility;
(ii) An affiliate or a subsidiary of a provider or facility;
[[Page 56140]]
(iii) An affiliate or subsidiary of a professional or trade
association representing a provider or facility; or
(iv) An SDR entity, or any personnel assigned to a determination
has a material familial, financial, or professional relationship with a
party to the payment determination being disputed, or with any officer,
director, or management employee of the provider, the provider's group
or practice association, or the facility that is a party to the
dispute.
(4) Either party to the dispute resolution process (the uninsured
(or self-pay) individual, or the provider or facility) may attest that
a conflict of interest exists in relation to the SDR entity assigned to
a payment dispute, in which case the SDR entity must notify the
Secretary of HHS no later than 3 business days receiving the
attestation.
(f) Payment determination for Patient-Provider dispute resolution--
(1) Determination of payment amount through settlement--(i) In general.
If the parties to a dispute resolution process agree on a payment
amount (through either an offer of financial assistance or an offer of
a lower amount, or an agreement by the uninsured (or self-pay)
individual to pay the billed charges in full) after the dispute
resolution process has been initiated but before the date on which a
determination is made under paragraph (f)(3) of this section, the
provider or facility will notify the SDR entity through the Federal IDR
Portal, electronically, or in paper form as soon as possible, but no
later than 3 business days after the date of the agreement. The
settlement notification must contain at a minimum, the settlement
amount, the date of such settlement, and documentation demonstrating
that the provider or facility and uninsured (or self-pay) individual
have agreed to the settlement. The settlement notice must also document
that the provider or facility has applied a reduction to the uninsured
(or self-pay) individual's settlement amount equal to at least half the
amount of the administrative fee paid as set forth in paragraph (g) of
this section. Once the SDR entity receives the settlement notice, the
SDR entity shall close the dispute resolution case as settled and the
agreed upon payment amount will apply for the items or services.
(ii) Treatment of payments made prior to determination. Payment of
the billed charges (or a portion of the billed charges) by the
uninsured (or self-pay) individual (or by another party on behalf of
the uninsured (or self-pay) individual) prior to a determination under
paragraph (f)(3) of this section does not demonstrate agreement by the
uninsured (or self-pay) individual to settle at that amount or any
other amount.
(2) Determination of payment amount through the patient-provider
dispute resolution process--(i) In general. With respect to an item or
service to which an agreement described in paragraph (f)(1) of this
section does not apply, not later than 10 business days after the
receipt of the selection notice from the SDR entity described in
paragraph (c)(4)(i) of this section, the provider or facility must
submit to the SDR entity:
(A) A copy of the good faith estimate provided to the uninsured (or
self-pay) individual for the item or service under dispute (the copy
can be a photocopy or an electronic image so long as the document is
readable);
(B) A copy of the billed charges provided to the uninsured (or
self-pay) individual for the item or service under dispute (the copy
can be a photocopy or an electronic image so long as the document is
readable); and
(C) If available, documentation demonstrating that the difference
between the billed charge and the expected charges in the good faith
estimate reflects the cost of a medically necessary item or service and
is based on unforeseen circumstances that could not have reasonably
been anticipated by the provider or facility when the good faith
estimate was provided.
(ii) Timeframe for SDR entity determination. Not later than 30
business days after receipt of the information described in paragraph
(f)(2)(i) of this section, the SDR entity must make a determination
regarding the amount to be paid by such uninsured (or self-pay)
individual, taking into account the requirements in paragraph (f)(3) of
this section.
(3) Payment determination by an SDR entity--(i) In general. The SDR
entity must review any documentation submitted by the uninsured (or
self-pay) individual, and the provider or the facility, and make a
separate determination for each unique item or service charged as to
whether the provider or facility has provided credible information to
demonstrate that the difference between the billed charge and the
expected charge for the item or service in the good faith estimate
reflects the costs of a medically necessary item or service and is
based on unforeseen circumstances that could not have reasonably been
anticipated by the provider or facility when the good faith estimate
was provided.
(ii) Definition of credible information. Credible information means
information that upon critical analysis is worthy of belief and is
trustworthy.
(iii) Payment determination process. (A) For an item or service
that appears on the good faith estimate:
(1) If the billed charge is equal to or less than the expected
charge for the item or service in the good faith estimate, the SDR
entity must determine the amount to be paid for the item or service as
the billed charge.
(2) If the billed charge for the item or service is greater than
the expected charge in the good faith estimate, and the SDR entity
determines that information submitted by the provider or facility does
not provide credible information that the difference between the billed
charge and the expected charge-for the item or service in the good
faith estimate reflects the costs of a medically necessary item or
service and is based on unforeseen circumstances that could not have
reasonably been anticipated by the provider or facility when the good
faith estimate was provided, the SDR entity must determine the amount
to be paid for the item or service to be equal to the expected charge
for the item or service in the good faith estimate.
(3) If the billed charge for the item or service is greater than
the expected charge in the good faith estimate, and the SDR entity
determines that information submitted by the provider or facility
provides credible information that the difference between the billed
charge and the expected charge for the item or service in the good
faith estimate reflects the costs of a medically necessary item or
service and is based on unforeseen circumstances that could not have
reasonably been anticipated by the provider or facility when the good
faith estimate was provided, the SDR entity must determine as the
amount to be paid for the item or service, the lesser of:
(i) The billed charge; or
(ii) The median payment amount paid by a plan or issuer for the
same or similar service, by a same or similar provider in the
geographic area as defined in Sec. 149.140(a)(7) where the services
were provided, that is reflected in an independent database as defined
in Sec. 149.140(a)(3) using the methodology described in Sec.
149.140(c)(3), except that in cases where the amount determined by an
independent database is determined to be less than the expected charge
for the item or service listed on the good faith estimate, the amount
to be paid will equal to the expected charge for the item or service
listed on the good faith estimate. When comparing the billed charge
with the amount contained in an independent database, the SDR entity
[[Page 56141]]
should account for any discounts offered by the provider or facility.
(B) For an item or service that does not appear on the good faith
estimate (new item or service):
(1) If the SDR entity determines that the information submitted by
the provider or facility does not provide credible information that the
billed charge for the new item or service reflects the costs of a
medically necessary item or service and is based on unforeseen
circumstances that could not have reasonably been anticipated by the
provider or facility when the good faith estimate was provided, then
the SDR entity must determine that amount to be paid for the new item
or service to be equal to $0.
(2) If the SDR entity determines that the information submitted by
the provider or facility provides credible information that the billed
charge for the new item or service reflects the costs of a medically
necessary item or service and is based on unforeseen circumstances that
could not have reasonably been anticipated by the provider or facility
when the good faith estimate was provided, the SDR entity must select
as the amount to be paid for the new item or service, the lesser of:
(i) The billed charge; or
(ii) The median payment amount paid by a plan or issuer for the
same or similar service, by a same or similar provider in the
geographic area as defined in Sec. 149.140(a)(7) where the services
were provided, that is reflected in an independent database as defined
in Sec. 149.140(a)(3) using the methodology described in Sec.
149.140(c)(3). When comparing the billed charge with the amounts
contained in an independent database, the SDR entity should account for
any discounts offered by the provider or facility.
(C) To calculate the final payment determination amount, the SDR
entity must add together the amounts to be paid for all items or
services subject to the determination. In cases where the final amount
determined by the SDR entity is lower than the billed charges, the SDR
entity must reduce the total amount determined by the amount paid by
the individual for the administrative fee described in paragraph (g) of
this section to calculate the final payment determination amount to be
paid by the individual for the items or services. Once the final
payment determination amount has been calculated, the SDR entity will
inform the uninsured (or self-pay) individual and the provider or
facility, through the Federal IDR portal, or by electronic or paper
mail, of such determination, the determination amount and the SDR
entity's justification for making the determination. After such
notification is made, the SDR entity will close the case.
(4) Effects of determination. A determination made by an SDR entity
under this paragraph (f) will be binding upon the parties involved, in
the absence of a fraud or evidence of misrepresentation of facts
presented to the selected SDR entity regarding the claim, except that
the provider or facility may provide financial assistance or agree to
an offer for a lower payment amount than the SDR entity's
determination, the uninsured (or self-pay) individual may agree to pay
the billed charges in full, or the uninsured (or self-pay) individual
and the provider or facility may agree to a different payment amount.
(g) Costs of patient-provider dispute resolution process--(1)
Administrative fee to participate in the patient-provider dispute
resolution process. (i) The uninsured (or self-pay) individual shall
pay to the SDR entity the administrative fee amount described in
section (g)(2) of this section at the initiation of the patient-
provider dispute resolution process described in paragraph (c) of this
section. The SDR entity shall remit all administrative fees collected
to the Secretary upon receiving an invoice from HHS.
(ii) In cases where the SDR entity issues a determination and the
provider or facility is the non-prevailing party as described in
section (g)(1)(iv) of this section, the provider or facility must pay
an amount equal to the administrative fee to the uninsured (or self-
pay) individual in the form of a reduction in the payment amount that
is applied by the SDR entity to the final payment determination amount
as described in paragraph (f)(3) of this section.
(iii) If the SDR entity issues a determination and the provider or
facility is the prevailing party as described in paragraph (g)(1)(iv)
of this section, the provider or facility is not required to pay an
amount equal to the administrative fee to the uninsured (or self-pay)
individual in the form of a reduction in the payment amount that is
applied by the SDR entity to the final payment determination amount as
described in paragraph (f)(3) of this section.
(iv) For purposes of paragraphs (g)(1)(ii) and (iii) of this
section, the prevailing party is the provider or facility in cases
where the SDR entity determines the amount to be paid as equal to the
billed charges; and the prevailing party is the uninsured (or self-pay)
individual in cases where the SDR entity determines the-amount to be
paid as less than the billed charges.
(v) Allocation of administrative fee in the case of settlement. In
case of a settlement described in paragraph (f)(1) of this section, the
provider or facility must pay an amount equal to half of the
administrative fee to the uninsured (or self-pay) individual in the
form of a reduction in the payment amount that is applied to the final
settlement amount. The provider or facility will document in the
settlement notice described in paragraph (f)(1) that it has applied a
payment reduction of at least half of the administrative fee amount to
the uninsured (or self-pay) individual's settlement amount.
(2) Establishment of the administrative fee. The amount of the
administrative fee described in paragraph (g)(1) of this section will
be specified by the Secretary through guidance.
(h) Deferral to State patient-provider dispute resolution
processes--(1) In general. If the Secretary determines that a-state law
provides a process to determine the amount to be paid by an uninsured
(or self-pay) individual to a provider or facility, and that such
process meets or exceeds the requirements in paragraph (h)(2) of this
section, the Secretary shall defer to the State process and direct any
patient-provider dispute resolution requests received from uninsured
(or self-pay) individuals in such state to the State process to
adjudicate the dispute resolution initiation request.
(2) Minimum Federal requirements. A State process described in
paragraph (h)(1) of this section shall at a minimum:
(i) Be binding, unless the provider or facility offer for the
uninsured (or self-pay) individual to pay a lower payment amount than
the determination amount;
(ii) Take into consideration a good faith estimate, that meets the
minimum standards established in Sec. 149.160, provided by the
provider or facility to the uninsured (or self-pay) individual;
(iii) If the State has a fee charged to uninsured (or self-pay)
individuals to participate in the patient-provider dispute resolution
process, the fee must be equal to or less than the Federal
administrative fee-established in paragraph (g) of this section; and
(iv) Have in place conflict-of-interest standards that at a minimum
meets the requirements set forth in paragraphs (d) and (e) of this
section.
(3) HHS determination of State process. HHS will review the State
process to determine whether it meets or exceeds the minimum Federal
requirements set forth in paragraph
[[Page 56142]]
(h)(2) of this section--HHS will communicate with the state and
determine whether such process meets or exceeds such requirements. HHS
will notify the state in writing of such determination.
(4) HHS review of State process. HHS will review changes to the
State process on an annual basis (or at other times if HHS receives
information from the state that would indicate the state process no
longer meets the minimum Federal requirements) to ensure the state
process continues to meet or exceed the minimum Federal standards set
forth in this section.
(5) State process termination. In the event that the State process
is terminated, or HHS determines that the State process no longer meets
the minimum Federal requirements described in paragraph (h)(2) of this
section, HHS will make the Federal process available to uninsured (or
self-pay) individuals in that State to ensure that the state's
residents have access to a patient-provider dispute resolution process
that meets the minimum Federal requirements.
(i) Extension of time periods for extenuating circumstances--(1) In
general. The time periods specified in this section (other than the
time for payment of the administrative fees under paragraph (d)(2) of
this section) may be extended in extenuating circumstances at the
Secretary's discretion if:
(i) An extension is necessary to address delays due to matters
beyond the control of the parties or for good cause; and
(ii) The parties attest that prompt action will be taken to ensure
that the determination under this section is made as soon as
administratively practicable under the circumstances.
(2) Process to request an extension. The time periods specified in
this section may be extended in the case of extenuating circumstances
at HHS' discretion. The parties may request an extension by submitting
a request for extension due to extenuating circumstances through the
Federal IDR portal, or electronic or paper mail if the extension is
necessary to address delays due to matters beyond the control of the
parties or for good cause.
(j) Applicability date. The provisions of this section are
applicable to uninsured (or self-pay) individuals; providers (including
providers of air ambulance services) and facilities; and SDR entities,
generally beginning on or after January 1, 2022. The provisions
regarding SDR entity certification in paragraphs (a) and (d) of this
section, are applicable beginning on October 7, 2021.
[FR Doc. 2021-21441 Filed 9-30-21; 4:15 pm]
BILLING CODE 4510-29-P
