Bulletin No. 2021–42

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HIGHLIGHTS

OF THIS ISSUE

Bulletin No. 2021–42

October 18, 2021

These synopses are intended only as aids to the reader in

identifying the subject matter covered. They may not be

relied upon as authoritative interpretations.

ADMINISTRATIVE

REG-100718-21, page 653.

This guidance contains proposed amendments to the regulations relating to the user fees for the special enrollment

examinations for enrolled agents and enrolled retirement

plan agents, the EA SEE and ERPA SEE, respectively. In

accordance with the guidelines in OMB Circular A-25, the

IRS has re-calculated its cost of overseeing the EA SEE and

determined that the full cost has increased to $99 per part,

plus an amount payable directly to a third-party contractor.

The IRS no longer offers new enrollment as an ERPA or the

ERPA SEE. Therefore, the proposed regulations increase the

amount of the user fee for the EA SEE from $81 to $99 per

part and remove the user fee for the ERPA SEE.

Rev. Proc. 2021-44, page 469.

This procedure publishes the amounts of unused housing

credit carryovers allocated to qualified states under section

42(h)(3)(D) of the Code for calendar year 2021.

EXCISE TAX

REG-107707-21, page 657.

This document sets forth proposed regulations regarding

certain requirements regarding implementation of the protections against balance billing provided under the No Surprises

Act. The text of the temporary regulations issued jointly with

the Department of Health and Human Services, the Department of Labor, and the Office of Personnel Management

serves as the text of these proposed regulations.

T.D. 9955, page 471.

This document, issued jointly with the Department of Health

and Human Services, the Department of Labor, and the Office

Finding Lists begin on page ii.

of Personnel Management, provides for a federal independent dispute resolution process to permit group health plans

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. Additionally, the temporary

regulations expand the scope of claims eligible for external

review to include adverse benefit determinations related to

compliance with the surprise billing and cost-sharing protections under the No Surprises Act.

INCOME TAX

Rev. Proc. 2021-32, page 465.

This revenue procedure updates and supersedes Rev. Proc.

2020-15. One country, Chile, is added to the list of countries with which the United States has in force an information

exchange agreement, such that bank deposit interest paid

to residents of such countries must be reported by payors

to the extent required under Treas. Reg. §§1.6049-8(a) and

1.6049-4(b)(5). Two countries, the Dominican Republic and

Singapore, are added to the list of countries with which Treasury and the IRS have determined it is appropriate to have an

automatic exchange relationship with respect to such bank

deposit interest.

Rev. Rul. 2021-19, page 470.

Fringe benefits aircraft valuation formula. For purposes of

section 1.61-21(g) of the Income Tax Regulations, relating to

the rule for valuing non-commercial flights on employer-provided aircraft, the Standard Industry Fare Level (SIFL) centsper-mile rates and terminal charges in effect for the second

half of 2021 are set forth.

The IRS Mission

Provide America’s taxpayers top-quality service by helping

them understand and meet their tax responsibilities and

enforce the law with integrity and fairness to all.

Introduction

The Internal Revenue Bulletin is the authoritative instrument

of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service

and for publishing Treasury Decisions, Executive Orders, Tax

Conventions, legislation, court decisions, and other items of

general interest. It is published weekly.

It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application

of the tax laws, including all rulings that supersede, revoke,

modify, or amend any of those previously published in the

Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of

internal practices and procedures that affect the rights and

duties of taxpayers are published.

Revenue rulings represent the conclusions of the Service

on the application of the law to the pivotal facts stated in

the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices,

identifying details and information of a confidential nature are

deleted to prevent unwarranted invasions of privacy and to

comply with statutory requirements.

Rulings and procedures reported in the Bulletin do not have the

force and effect of Treasury Department Regulations, but they

may be used as precedents. Unpublished rulings will not be

relied on, used, or cited as precedents by Service personnel in

the disposition of other cases. In applying published rulings and

procedures, the effect of subsequent legislation, regulations,

court decisions, rulings, and procedures must be considered,

and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless

the facts and circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

Part I.—1986 Code.

This part includes rulings and decisions based on provisions

of the Internal Revenue Code of 1986.

Part II.—Treaties and Tax Legislation.

This part is divided into two subparts as follows: Subpart A,

Tax Conventions and Other Related Items, and Subpart B,

Legislation and Related Committee Reports.

Part III.—Administrative, Procedural, and Miscellaneous.

To the extent practicable, pertinent cross references to these

subjects are contained in the other Parts and Subparts. Also

included in this part are Bank Secrecy Act Administrative

Rulings. Bank Secrecy Act Administrative Rulings are issued

by the Department of the Treasury’s Office of the Assistant

Secretary (Enforcement).

Part IV.—Items of General Interest.

This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative index

for the matters published during the preceding months. These

monthly indexes are cumulated on a semiannual basis, and are

published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

October 18, 2021

Bulletin No. 2021–42

Part I

26 CFR 601.601: Rules and regulations

(Also Part 1, §§ 6049; 1.6049-4, 1.6049-8)

that it is appropriate to have an automatic

exchange relationship.

Implementation of

Nonresident Alien Deposit

Interest Regulations

Rev. Proc. 2021-32

SECTION 1. PURPOSE

This revenue procedure provides a list

of the jurisdictions with which the United

States has in effect a relevant information

exchange agreement such that the reporting requirement of §§ 1.6049-4(b)(5) and

1.6049-8(a) of the Income Tax Regulations may apply with respect to certain

deposit interest paid to residents of such

jurisdictions.

This revenue procedure also provides

a list of the jurisdictions with which the

Department of the Treasury (Treasury

Department) and the Internal Revenue

Service (IRS) have determined that it is

appropriate to have an automatic exchange

relationship with respect to the information collected under §§ 1.6049-4(b)(5)

and 1.6049-8(a).

These lists are updated and restated

versions of those set forth in Rev. Proc.

2020-15, 2020-23 I.R.B. 905. Chile has

been added in Section 3 of this revenue

procedure to the list of jurisdictions with

which the United States has in effect a

relevant information exchange agreement. The Dominican Republic and

Singapore have been added in Section

4 of this revenue procedure to the list

of jurisdictions with which the Treasury

Department and the IRS have determined

SECTION 2. BACKGROUND

Sections 1.6049-4(b)(5) and 1.60498(a), as revised by TD 9584, 2012-20

I.R.B. 900, require the reporting of certain

deposit interest paid to nonresident alien

individuals on or after January 1, 2013.

Section 1.6049-4(b)(5) provides that in

the case of interest aggregating $10 or

more paid to a nonresident alien individual (as defined in section 7701(b)(1)(B))

that is reportable under § 1.6049-8(a), the

payor is required to make an information

return on Form 1042-S, Foreign Person’s

U.S. Source Income Subject to Withholding, for the calendar year in which the

interest is paid.

Interest that is reportable under

§ 1.6049-8(a) is interest described in section 871(i)(2)(A) that relates to a deposit

maintained at an office within the United

States. The regulations also provide that

such deposit interest is reportable only

if paid to a resident of a jurisdiction that

is identified as a jurisdiction with which

the United States has in effect an income

tax or other convention or bilateral agreement relating to the exchange of tax information within the meaning of section

6103(k)(4), under which the competent

authority is the Secretary of the Treasury or the Secretary’s delegate and the

United States agrees to provide, as well

as receive, information. Finally, the regulations provide that jurisdictions are so

identified in an applicable revenue procedure (see § 601.601(d)(2)) as of December

31 before the calendar year in which the

interest is paid. The preamble to the regulations (at 2012-20 I.R.B. 901-02) notes

Jurisdiction

SECTION 3. JURISDICTIONS OF

RESIDENCE WITH RESPECT TO

WHICH THE DEPOSIT INTEREST

REPORTING REQUIREMENT

APPLIES

The following are the jurisdictions

with which the United States has in effect

an income tax or other convention or bilateral agreement relating to the exchange

of tax information within the meaning of

section 6103(k)(4) pursuant to which the

United States agrees to provide, as well as

receive, information and under which the

competent authority is the Secretary of the

Treasury or the Secretary’s delegate:

Rev. Proc. First Identifying Jurisdiction

2012-24

2018-36

2012-24

Antigua & Barbuda

Argentina

Aruba

Australia

Austria

Azerbaijan

Bangladesh

Bulletin No. 2021–42

that the IRS will not exchange information

with another jurisdiction, even if an information exchange agreement is in effect, if

there are concerns about confidentiality,

safeguarding of data exchanged, the use

of the information, or other factors that

would make the exchange of information

inappropriate.

Rev. Proc. 2012-24, 2012-20 I.R.B. 913,

was published contemporaneously with

the publication of TD 9584 to provide a

list of those jurisdictions with which the

United States has in effect an information

exchange agreement, such that interest paid

to residents of such jurisdictions must be

reported by payors to the extent required

under §§ 1.6049-4(b)(5) and 1.6049-8(a),

and to provide a separate list identifying

those jurisdictions with which the automatic exchange of the information collected under the regulations has been determined by the Treasury Department and the

IRS to be appropriate. Before issuance of

this Rev. Proc. 2021-32, the most current

versions of those lists were set forth in Rev.

Proc. 2020-15.

465

October 18, 2021

Jurisdiction

Rev. Proc. First Identifying Jurisdiction

2012-24

2014-64

2012-24

2014-64

2021-32

2012-24

2014-64

2012-24

2014-64

2012-24

2017-46

2012-24

2019-23

2012-24

2017-46

2012-24

2014-64

2012-24

Barbados

Belgium

Bermuda

Brazil

British Virgin Islands

Bulgaria

Canada

Cayman Islands

Chile

China

Colombia

Costa Rica

Croatia

Curaçao

Cyprus

Czech Republic

Denmark

Dominica

Dominican Republic

Egypt

Estonia

Faroe Islands

Finland

France

Georgia

Germany

Gibraltar

Greece

Greenland

Grenada

Guernsey

Guyana

Honduras

Hong Kong

Hungary

Iceland

India

Indonesia

Ireland

Isle of Man

Israel

Italy

Jamaica

Japan

October 18, 2021

466

Bulletin No. 2021–42

Jurisdiction

Jersey

Kazakhstan

Korea, Republic of

Latvia

Liechtenstein

Lithuania

Luxembourg

Malta

Marshall Islands

Mauritius

Mexico

Moldova

Monaco

Morocco

Netherlands

Netherlands special municipalities: Bonaire, Sint

Eustatius, and Saba

New Zealand

Norway

Pakistan

Panama

Peru

Philippines

Poland

Portugal

Romania

Russian Federation

Saint Lucia

Singapore

Sint Maarten

Slovak Republic

Slovenia

South Africa

Spain

Sri Lanka

Sweden

Switzerland

Thailand

Trinidad and Tobago

Tunisia

Turkey

Ukraine

United Kingdom

Venezuela

Bulletin No. 2021–42

467

Rev. Proc. First Identifying Jurisdiction

2012-24

2014-64

2012-64

2018-36

2012-24

2016-56

2020-15

2014-64

2012-24

October 18, 2021

SECTION 4. JURISDICTIONS WITH WHICH THE TREASURY DEPARTMENT AND THE IRS HAVE DETERMINED

THAT AUTOMATIC EXCHANGE OF DEPOSIT INTEREST INFORMATION IS APPROPRIATE

The following list identifies the jurisdictions with which the automatic exchange of the information collected under §§ 1.6049-4(b)

(5) and 1.6049-8 has been determined by the Treasury Department and the IRS to be appropriate:

Jurisdiction

Rev. Proc. First Memorializing Determination

on Automatic Exchange with Jurisdiction

2014-64

2016-18

2017-31

2015-50

2012-24

2017-31

2017-46

2019-23

2015-50

2014-64

2021-32

2015-50

2014-64

2015-50

2018-36

2014-64

2015-50

2014-64

2016-56

2014-64

2016-18

2014-64

2016-56

2015-50

2014-64

2015-50

2014-64

2017-46

Australia

Azerbaijan

Belgium

Brazil

Canada

Colombia

Croatia

Curaçao

Cyprus

Czech Republic

Denmark

Dominican Republic

Estonia

Finland

France

Germany

Gibraltar

Greece

Guernsey

Hungary

Iceland

India

Ireland

Isle of Man

Israel

Italy

Jamaica

Jersey

Korea, Republic of

Latvia

Liechtenstein

Lithuania

Luxembourg

Malta

Mauritius

Mexico

Netherlands

New Zealand

Norway

Panama

October 18, 2021

468

Bulletin No. 2021–42

Jurisdiction

Rev. Proc. First Memorializing Determination

on Automatic Exchange with Jurisdiction

2015-50

2017-31

2016-56

2021-32

2016-18

2015-50

2014-64

2015-50

2014-64

Poland

Portugal

Saint Lucia

Singapore

Slovak Republic

Slovenia

South Africa

Spain

Sweden

United Kingdom

SECTION 5. EFFECT ON OTHER

DOCUMENTS

Rev. Proc. 2020-15 is superseded.

SECTION 6. EFFECTIVE DATES

For purposes of the reporting

requirement of § 1.6049-4(b)(5), the

list of jurisdictions in Section 3 of this

revenue procedure is effective: (i) with

respect to Chile, for interest paid on

or after January 1, 2022; and (ii) with

respect to each other listed jurisdiction,

for interest paid on or after January 1

of the calendar year following the issuance of the revenue procedure (as cited

in Section 3) first identifying the jurisdiction as having in effect an agreement

with the United States as described in

§ 1.6049-8(a).

The list of jurisdictions in Section 4 of

this revenue procedure is effective from

the date of issuance of this revenue procedure with respect to information reported

to the IRS pursuant to §§ 1.6049-4(b)(5)

and 1.6049-8(a) for any tax year for which

the jurisdiction was included in the list in

Section 3. The revenue procedure citations in the Section 4 list are included for

historical reference.

SECTION 7. DRAFTING

INFORMATION

The principal authors of this revenue

procedure are Jackie B. Manasterli and

Michelle R. Phillips of the Office of Associate Chief Counsel (International). For

further information regarding this revenue

Bulletin No. 2021–42

procedure, contact Ms. Manasterli or Ms.

Phillips at (202) 317-6941 (not a toll-free

number).

Rev. Proc. 2021-44

SECTION 1. PURPOSE

This revenue procedure publishes the

amounts of unused housing credit carryovers allocated to qualified states under

§ 42(h)(3)(D) of the Internal Revenue

Code for calendar year 2021.

SECTION 2. BACKGROUND

Rev. Proc. 2019-45, 2019-48 I.R.B.

524, provides guidance to state housing

credit agencies of qualified states on the

procedure for requesting an allocation of

unused housing credit carryovers under

§ 42(h)(3)(D). The amount of unused

housing credit carryovers allocated to

qualified states for a calendar year from

a national pool of unused credit authority

(the National Pool) is published by the

Internal Revenue Service in the Internal

Revenue Bulletin. This revenue procedure publishes these amounts for calendar year 2021.

SECTION 3. PROCEDURE

The unused housing credit carryover

amount allocated from the National Pool

by the Secretary to each qualified state for

calendar year 2021 is as follows:

469

Qualified State

Alabama

Arkansas

California

Connecticut

Delaware

Florida

Georgia

Idaho

Indiana

Kentucky

Maryland

Massachusetts

Michigan

Minnesota

Nebraska

New Jersey

New Mexico

New York

Oklahoma

Pennsylvania

Rhode Island

South Dakota

Texas

Utah

Vermont

Virginia

Washington

West Virginia

Wisconsin

Amount Allocated

169,738

104,519

1,357,757

122,677

34,034

749,555

369,375

63,008

232,970

154,415

208,857

237,751

343,734

195,115

66,824

306,342

72,644

666,902

137,292

440,879

36,459

30,789

1,012,617

112,084

21,498

296,278

265,343

61,555

201,161

October 18, 2021

EFFECTIVE DATE

DRAFTING INFORMATION

This revenue procedure is effective

for allocations of housing credit dollar

amounts attributable to the National Pool

component of a qualified state’s housing

credit ceiling for calendar year 2021.

The principal author of this revenue

procedure is YoungNa Lee of the Office

of Associate Chief Counsel (Passthroughs

and Special Industries). For further information regarding this revenue procedure,

contact Ms. Lee at (202) 317-4137 (not a

toll-free number).

Rev. Rul. 2021-19

the Department of Transportation (DOT)

and are reviewed semi-annually.

According to DOT, due to the effect

of the COVID-19 pandemic, airline

industry capacity (as measured by airline seat miles) was reduced faster than

airline industry expenses were reduced.

Generally, the SIFL rate is the result of

airline industry expenses divided by airline seat miles. Because airline seat miles

were reduced faster than airline industry

expenses, the SIFL rate for the 6-month

Tax Period Effective 1/1/2021 increased

substantially.

Furthermore, in March 2020, the Coronavirus Aid, Relief, and Economic Security Act was enacted, directing the Treasury Department to allot up to $25 billion

for domestic carriers to cover payroll

expenses via grants and promissory notes,

known as the Payroll Support Program

(PSP). The PSP grants and PSP promis-

For purposes of the taxation of fringe

benefits under section 61 of the Internal

Revenue Code, section 1.61-21(g) of the

Income Tax Regulations provides a rule

for valuing noncommercial flights on

employer-provided aircraft. Section 1.6121(g)(5) provides an aircraft valuation

formula to determine the value of such

flights. The value of a flight is determined

under the base aircraft valuation formula

(also known as the Standard Industry Fare

Level formula or SIFL) by multiplying

the SIFL cents-per-mile rates applicable

for the period during which the flight was

taken by the appropriate aircraft multiple

provided in section 1.61-21(g)(7) and then

adding the applicable terminal charge. The

SIFL cents-per-mile rates in the formula

and the terminal charge are calculated by

Section 42 — Low-Income

Housing Credit.

26 CFR 1.42-14. Allocation rules for post-1989

State housing credit ceiling amounts.

Guidance is provided to state housing credit

agencies of qualified states that request an allocation of unused housing credit carryover under section 42(h)(3)(D) of the Internal Revenue Code. See

Rev. Proc. 2021-44

sory notes offset airline industry expenses.

Accordingly, DOT provided two alternatives to incorporate differing levels of the

PSP into the SIFL rate calculations to both

account for the PSP in the rate calculations and to mitigate the pandemic impact

on the SIFL rate. One calculation adjusts

the SIFL rates to account for PSP grants

only while the other calculation adjusts

the SIFL rates to account for both the PSP

grants and PSP promissory notes.

This revenue ruling contains these

three SIFL rates: (1) the Unadjusted SIFL

Rate, (2) the SIFL Rate Adjusted for PSP

Grants, and (3) the SIFL Rate Adjusted

for PSP Grants and Promissory Notes.

Taxpayers may use any of the three rates

when determining the value on noncommercial flights of employer-provided aircraft under section 1.61-21(g).

The following charts set forth the terminal charges and SIFL mileage rates:

Unadjusted SIFL Rate

Period During Which

the Flight Is Taken

Terminal

Charge

SIFL Mileage

Rates

7/1/21 - 12/31/21

$81.43

Up to 500 miles

= $.4455 per mile

501-1500 miles

= $.3396 per mile

Over 1500 miles

= $.3265 per mile

SIFL Rate Adjusted for PSP Grants

7/1/21 - 12/31/21

$43.54

Up to 500 miles

= $.2382 per mile

501-1500 miles

= $.1816 per mile

Over 1500 miles

= $.1746 per mile

October 18, 2021

470

Bulletin No. 2021–42

SIFL Rate Adjusted for PSP Grants and Promissory Notes

7/1/21 - 12/31/21

$30.69

Up to 500 miles

= $.1679 per mile

501-1500 miles

= $.1280 per mile

Over 1500 miles

= $.1231 per mile

DRAFTING INFORMATION

ers, facilities, and providers of air ambulance services.

DATES: Effective date: These regulations

are effective on [INSERT THE DATE

OF PUBLICATION IN THE FEDERAL

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 [INSERT THE DATE OF PUBLICATION IN THE FEDERAL REGISTER]. 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 [INSERT

THE DATE OF PUBLICATION IN THE

FEDERAL REGISTER].

Comment date: To be assured consideration, comments must be received at one

of the addresses provided below, no later

than 5 p.m. on [INSERT DATE 60 DAYS

AFTER DATE OF PUBLICATION IN

FEDERAL REGISTER].

The principal author of this revenue ruling is Kathleen Edmondson of the Office

of Associate Chief Counsel (Employee

Benefits, Exempt Organizations and

Employment Taxes). For further information regarding this revenue ruling, contact

Ms. Edmondson at (202) 317-6798 (not a

toll-free number).

26 CFR 54.9816-8T: Independent dispute resolution

process (temp); 26 CFR 54.9817-2T: Independent

dispute resolution process for air ambulance services (temp)

T.D. 9955

DEPARTMENT OF THE

TREASURY

Internal Revenue Service

26 CFR Part 54

Requirements Related to

Surprise Billing; Part II

AGENCY: Office of Personnel Management; Internal Revenue Service, Department of the Treasury; Employee Benefits

Security Administration, Department of

Labor; Centers for Medicare & Medicaid Services, Department of Health and

Human Services.

ACTION: Interim final rules with request

for comments.

SUMMARY: This document sets forth

interim final rules implementing certain provisions of the No Surprises Act,

which was enacted as part of the Consolidated Appropriations Act, 2021.

These interim final rules implement pro-

Bulletin No. 2021–42

visions 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, provid-

471

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 infor-

October 18, 2021

mation) 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 202606-4056; Kari DiCecco, Internal Revenue Service, Department of the Treasury,

at 202-317-5500; Elizabeth Schumacher

or David Sydlik, Employee Benefits Secu-

rity 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 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 1-866444-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.

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 outof-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 Sur-

Pub. L. 116-260 (December 27, 2020).

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.

October 18, 2021

472

Bulletin No. 2021–42

prises 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.

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 outof-network services to in-network levels,

require such cost sharing to count toward

any in-network deductibles and out-ofpocket maximums, and prohibit balance

billing.

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 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.

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. section 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

86 FR 36872 (July 13, 2021).

45 CFR 149.410(a), 149.420(a) and 149.440(a).

86 FR 51730 (Sept. 16, 2021).

Bulletin No. 2021–42

473

October 18, 2021

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).

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.

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 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.

C. Protecting Uninsured Individuals

Through Transparency and PatientProvider 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.

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.

75 FR 43329 (July 23, 2010).

76 FR 37207 (June 10, 2011).

80 FR 72191 (Nov. 18, 2015).

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

86 FR 36987 (Jul 9, 2021).

October 18, 2021

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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.

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 (selfpay), 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 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 2799B6, 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

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

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).

A health benefits plan offered under chapter 89 of title 5, United States Code is also known as an FEHB plan.

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

Bulletin No. 2021–42

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October 18, 2021

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.

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,

October 18, 2021

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-ofnetwork rate for certain services. More

specifically, the Federal IDR provisions

may be used to determine the out-ofnetwork 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

476

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-ofnetwork 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

Bulletin No. 2021–42

45 CFR 149.410, 149.420, or 149.44015

(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.

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

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.

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.

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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October 18, 2021

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 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 selfpay) 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 selfpay) individuals. These interim final rules

October 18, 2021

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 2799B7, 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 selfpay) 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

478

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

Bulletin No. 2021–42

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 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 Mon-

day, 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 selfpay) 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 selfpay) 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 2590.7163, 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 2590.7168(c), and 45 CFR 149.510(c) that meets

the certification criteria specified in 26

CFR 54.9816-8T(e), 29 CFR 2590.7168(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-

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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October 18, 2021

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.

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

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.

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 arbi-

trations 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

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.

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

October 18, 2021

480

Bulletin No. 2021–42

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.

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

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 54.98168T(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 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 54.98168T(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 pro-

vides 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

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.

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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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 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

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.

October 18, 2021

482

Bulletin No. 2021–42

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.

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

Bulletin No. 2021–42

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 informa-

483

tion 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 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-ofnetwork 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

October 18, 2021

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 2799B2(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

October 18, 2021

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

484

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 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

Bulletin No. 2021–42

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 2590.7168(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 2590.7168(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 pre-

ceding the dispute resolution assignment,

similar to the “revolving door” laws24

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.

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

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

Bulletin No. 2021–42

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October 18, 2021

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 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

October 18, 2021

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

486

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

Bulletin No. 2021–42

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 outof-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

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.

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 54.98168T(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 54.98166T(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 54.98168T(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,

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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October 18, 2021

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 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 2590.7168(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.

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 outof-network rate for the qualified IDR item

or service. For each qualified IDR item

or service, the amount by which this outof-network rate exceeds the cost-sharing

amount for the qualified IDR item or service is the total plan or coverage payment

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.

October 18, 2021

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Bulletin No. 2021–42

(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 2590.7168(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-ofnetwork 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).

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-ofnetwork 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.

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 circum-

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.

Id.

86 FR 36872, 36899 (July 13, 2021).

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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October 18, 2021

stances. 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.

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 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 fac-

tor, 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-ofnetwork 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

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.

October 18, 2021

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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.

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

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 pa

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