Bulletin No. 2023–47

Agency decision

Ask Donna

What actually matters in this document.

Text

HIGHLIGHTS

OF THIS ISSUE

Bulletin No. 2023–47

November 20, 2023

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

Announcement 2023-32, page 1258.

The Office of Professional Responsibility (OPR) announces

recent disciplinary sanctions involving attorneys, certified

public accountants, enrolled agents, enrolled actuaries,

enrolled retirement plan agents, and appraisers. These individuals are subject to the regulations governing practice

before the Internal Revenue Service (IRS), which are set out in

Title 31, Code of Federal Regulations, Part 10, and which are

published in pamphlet form as Treasury Department Circular

No. 230. The regulations prescribe the duties and restrictions relating to such practice and prescribe the disciplinary

sanctions for violating the regulations.

EMPLOYEE PLANS

Notice 2023-75, page 1256.

Section 415 of the Internal Revenue Code (the Code) provides for dollar limitations on benefits and contributions

under qualified retirement plans. Section 415(d) requires

that the Secretary of the Treasury annually adjust these

limits for cost of living increases. Other limitations applicable to deferred compensation plans are also affected

by these adjustments under § 415. Under § 415(d), the

adjustments are to be made under adjustment procedures

similar to those used to adjust benefit amounts under

§ 215(i)(2)(A) of the Social Security Act.

EXEMPT ORGANIZATIONS

Announcement 2023-33, page 1261.

Revocation of IRC 501(c)(3) Organizations for failure to meet

the code section requirements. Contributions made to the

Finding Lists begin on page ii.

organizations by individual donors are no longer deductible

under IRC 170(b)(1)(A).

EXCISE TAX

REG-115762-23, page 1262.

This document sets forth proposed rules related to the fees

established by the No Surprises Act for the Federal independent dispute resolution (IDR) process, as established by

the Consolidated Appropriations Act, 2021 (CAA). These proposed rules would amend existing regulations to provide that

the administrative fee amount charged by the Department of

the Treasury, the Department of Labor, and the Department

of Health and Human Services (the Departments) to participate in the Federal IDR process, and the ranges for certified IDR entity fees for single and batched determinations

will be set by the Departments through notice and comment

rulemaking. These proposed rules would also set forth the

methodology used to calculate the administrative fee and

the considerations used to develop the certified IDR entity

fee ranges. This document also proposes the amount of the

administrative fee for disputes initiated on or after the later of

the effective date of these rules or January 1, 2024. Finally,

this document proposes the certified IDR entity fee ranges

for disputes initiated on or after the later of the effective date

of these rules or January 1, 2024.

REG-120727-21, page 1285.

This document extends the comment period for the proposed

rules entitled “Requirements Related to the Mental Health

Parity and Addiction Equity Act” that were published in the

August 3, 2023, issue of the Federal Register. The comment

period for the proposed rules, which had been scheduled to

close on October 2, 2023, is extended 15 days to October

17, 2023.

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.

November 20, 2023

Bulletin No. 2023–47

Part III

2024 Limitations Adjusted

as Provided in Section

415(d), etc.

Notice 2023-75

Section 415 of the Internal Revenue

Code (“Code”) provides for dollar limitations on benefits and contributions under

qualified retirement plans. Section 415(d)

requires that the Secretary of the Treasury

annually adjust these limits for cost-of-living increases. Other limitations applicable

to deferred compensation plans are also

affected by these adjustments under section 415. Under section 415(d), the adjustments are to be made under adjustment

procedures similar to those used to adjust

benefit amounts under section 215(i)(2)

(A) of the Social Security Act.

Cost-of-Living Adjusted Limits for

2024

Effective January 1, 2024, the limitation on the annual benefit under a defined

benefit plan under section 415(b)(1)(A) of

the Code is increased from $265,000 to

$275,000.

For a participant who separated from

service before January 1, 2024, the participant’s limitation under a defined benefit plan under section 415(b)(1)(B) is

computed by multiplying the participant’s

compensation limitation, as adjusted

through 2023, by 1.0351.

The limitation for defined contribution plans under section 415(c)(1)(A) is

increased in 2024 from $66,000 to $69,000.

The Code provides that various other

dollar amounts are to be adjusted at the

same time and in the same manner as the

dollar limitation of section 415(b)(1)(A).

After taking into account the applicable

rounding rules, the amounts for 2024 are

as follows:

The limitation under section 402(g)

(1) on the exclusion for elective deferrals described in section 402(g)(3) is

increased from $22,500 to $23,000.

The annual compensation limit under

sections 401(a)(17), 404(l), 408(k)(3)

(C), and 408(k)(6)(D)(ii) is increased

from $330,000 to $345,000.

The dollar limitation under section

416(i)(1)(A)(i) concerning the definition of “key employee” in a top-heavy

plan is increased from $215,000 to

$220,000.

The dollar amount under section 409(o)

(1)(C)(ii) for determining the maximum account balance in an employee

stock ownership plan subject to a

5‑year distribution period is increased

from $1,330,000 to $1,380,000, while

the dollar amount used to determine

the lengthening of the 5-year distribution period is increased from $265,000

to $275,000.

The limitation used in the definition of

“highly compensated employee” under

section 414(q)(1)(B) is increased from

$150,000 to $155,000.

The dollar limitation under section

414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan

other than a plan described in section 401(k)(11) or section 408(p) for

individuals aged 50 or over remains

$7,500. The dollar limitation under section 414(v)(2)(B)(ii) for catch-up contributions to an applicable employer

plan described in section 401(k)(11) or

section 408(p) for individuals aged 50

or over remains $3,500.

The annual compensation limitation

under section 401(a)(17) for eligible

participants in certain governmental

plans that, under the plan as in effect

on July 1, 1993, allowed cost-of-living adjustments to the compensation

limitation under the plan under section

401(a)(17) to be taken into account, is

increased from $490,000 to $505,000.

The compensation amount under section 408(k)(2)(C) regarding simplified

employee pensions remains $750.

The limitation under section 408(p)

(2)(E) regarding SIMPLE retirement

accounts is increased from $15,500 to

$16,000.

The limitation on the aggregate amount

of length of service awards accruing

with respect to any year of service

for any bona fide volunteer under

section 457(e)(11)(B)(ii) concerning

deferred compensation plans of state

and local governments and tax-exempt

organizations is increased from $7,000

to $7,500.

The limitation on deferrals under section 457(e)(15) concerning deferred

compensation plans of state and local

governments and tax-exempt organizations is increased from $22,500 to

$23,000.

The limitation under section 664(g)

(7) concerning the qualified gratuitous

transfer of qualified employer securities to an employee stock ownership

plan remains $60,000.

The compensation amount under §

1.61-21(f)(5)(i) of the Income Tax

Regulations concerning the definition

of “control employee” for fringe benefit valuation purposes is increased

from $130,000 to $135,000. The compensation amount under § 1.61-21(f)

(5)(iii) is increased from $265,000 to

$275,000.

The dollar limitation on premiums paid

for a qualifying longevity annuity contract under § 1.401(a)(9)-6, A-17(b)(2)

(i), which was increased to $200,000

pursuant to section 202 of the SECURE

2.0 Act of 2022 (“SECURE 2.0 Act”1)

with respect to contracts purchased or

received in an exchange on or after

December 29, 2022 remains $200,000.

The Code provides that the

$1,000,000,000 threshold used to determine whether a multiemployer plan is a

systemically important plan under section 432(e)(9)(H)(v)(III)(aa) of the Code

is adjusted using the cost-of-living adjustment provided under section 432(e)(9)(H)

(v)(III)(bb). After taking the applicable

rounding rule into account, the threshold

Division T of the Consolidated Appropriations Act, 2023, Pub. L. 117-328, 136 Stat. 4459 (2022).

November 20, 2023

1256

Bulletin No. 2023–47

used to determine whether a multiemployer plan is a systemically important

plan under section 432(e)(9)(H)(v)(III)

(aa) is increased from $1,256,000,000 to

$1,369,000,000.

The Code also provides that several

retirement-related amounts are to be

adjusted using the cost-of-living adjustment under section 1(f)(3). After taking

the applicable rounding rules into account,

the amounts for 2024 are as follows:

The adjusted gross income limitation

under section 25B(b)(1)(A) for determining the retirement savings contributions credit for married taxpayers

filing a joint return is increased from

$43,500 to $46,000; the limitation

under section 25B(b)(1)(B) is increased

from $47,500 to $50,000; and the limitation under sections 25B(b)(1)(C)

and 25B(b)(1)(D) is increased from

$73,000 to $76,500.

The adjusted gross income limitation

under section 25B(b)(1)(A) for determining the retirement savings contributions credit for taxpayers filing as

head of household is increased from

$32,625 to $34,500; the limitation

under section 25B(b)(1)(B) is increased

from $35,625 to $37,500; and the limitation under sections 25B(b)(1)(C)

and 25B(b)(1)(D) is increased from

$54,750 to $57,375.

The adjusted gross income limitation

under section 25B(b)(1)(A) for determining the retirement savings contributions credit for all other taxpayers

is increased from $21,750 to $23,000;

the limitation under section 25B(b)

(1)(B) is increased from $23,750 to

$25,000; and the limitation under sections 25B(b)(1)(C) and 25B(b)(1)(D) is

increased from $36,500 to $38,250.

The deductible amount under section 219(b)(5)(A), which limits the

amount of an individual’s deductible

qualified retirement contributions for a

taxable year, is increased from $6,500

to $7,000. The increase in the deductible amount pursuant to section 219(b)

(5)(B)(ii) for individuals who have

attained age 50 before the close of the

taxable year remains $1,000.

Bulletin No. 2023–47

The applicable dollar amount under

section 219(g)(3)(B)(i) for determining

the deductible amount of an IRA contribution for taxpayers who are active

participants filing a joint return or as a

qualifying widow(er) is increased from

$116,000 to $123,000. The applicable

dollar amount under section 219(g)(3)

(B)(ii) for all other taxpayers who are

active participants (other than married

taxpayers filing separate returns) is

increased from $73,000 to $77,000. If

an individual or the individual’s spouse

is an active participant, the applicable

dollar amount under section 219(g)

(3)(B)(iii) for a married individual filing a separate return is not subject to

an annual cost-of-living adjustment

and remains $0. The applicable dollar

amount under section 219(g)(7)(A) for

a taxpayer who is not an active participant but whose spouse is an active participant is increased from $218,000 to

$230,000.

Accordingly, under section 219(g)(2)

(A), the deduction for taxpayers making contributions to a traditional IRA

is phased out for single individuals and

heads of household who are active participants in a qualified plan (or another

retirement plan specified in section

219(g)(5)) and have adjusted gross

incomes (as defined in section 219(g)

(3)(A)) between $77,000 and $87,000,

increased from between $73,000 and

$83,000. For married couples filing

jointly, if the spouse who makes the IRA

contribution is an active participant,

the income phase‑out range is between

$123,000 and $143,000, increased from

between $116,000 and $136,000. For

an IRA contributor who is not an active

participant and is married to someone

who is an active participant, the deduction is phased out if the couple’s income

is between $230,000 and $240,000,

increased from between $218,000 and

$228,000. For a married individual filing a separate return who is an active

participant, the phase-out range is not

subject to an annual cost‑of‑living

adjustment and remains $0 to $10,000.

The adjusted gross income limitation

under section 408A(c)(3)(B)(ii)(I)

1257

for determining the maximum Roth

IRA contribution for married taxpayers filing a joint return or for taxpayers filing as a qualifying widow(er) is

increased from $218,000 to $230,000.

The adjusted gross income limitation

under section 408A(c)(3)(B)(ii)(II) for

all other taxpayers (other than married

taxpayers filing separate returns) is

increased from $138,000 to $146,000.

The applicable dollar amount under

section 408A(c)(3)(B)(ii)(III) for a

married individual filing a separate

return is not subject to an annual costof-living adjustment and remains $0.

Accordingly, under section 408A(c)(3)

(A), the adjusted gross income phaseout range for taxpayers making contributions to a Roth IRA is between

$230,000 and $240,000 for married

couples filing jointly, increased from

between $218,000 and $228,000. For

singles and heads of household, the

income phase-out range is between

$146,000 and $161,000, increased

from between $138,000 and $153,000.

For a married individual filing a separate return, the phase-out range is

not subject to an annual cost-of-living

adjustment and remains between $0

and $10,000.

The aggregate amount of qualified

charitable distributions that are not

includible in gross income under section 408(d)(8)(A) is increased from

$100,000 to $105,000. The amount of

qualified charitable distributions made

directly to a split-interest entity that are

not includible in gross income under

section 408(d)(8)(F) pursuant to a onetime election is increased from $50,000

to $53,000.

Drafting Information

The principal author of this notice is

Tom Morgan of the Office of Associate

Chief Counsel (Employee Benefits,

Exempt Organizations, and Employment

Taxes). However, other personnel from

the IRS participated in the development

of this guidance. For further information

regarding this notice, contact Mr. Morgan

at (202) 317‑6700 (not a toll-free number).

November 20, 2023

Part IV

Announcement of

Disciplinary Sanctions

From the Office of

Professional Responsibility

Announcement 2023-32

The

Office

Professional

Responsibility (OPR) announces recent

disciplinary sanctions involving attorneys, certified public accountants,

enrolled agents, enrolled actuaries,

enrolled retirement plan agents, appraisers, and unenrolled/unlicensed return

preparers (individuals who are not

enrolled to practice and are not licensed

as attorneys or certified public accountants). Licensed or enrolled practitioners

are subject to the regulations governing practice before the Internal Revenue

Service (IRS), which are set out in Title

31, Code of Federal Regulations, Subtitle

A, Part 10, and which are released as

Treasury Department Circular No. 230.

The regulations prescribe the duties and

restrictions relating to such practice and

prescribe the disciplinary sanctions for

violating the regulations. Unenrolled/

unlicensed return preparers are subject

to Revenue Procedure 81-38 and superseding guidance in Revenue Procedure

2014-42, which govern a preparer’s eligibility to represent taxpayers before the

IRS in examinations of tax returns the

preparer both prepared for the taxpayer

and signed as the preparer. Additionally,

unenrolled/unlicensed return preparers

who voluntarily participate in the Annual

Filing Season Program under Revenue

Procedure 2014-42 agree to be subject to

the duties and restrictions in Circular 230,

including the restrictions on incompetent

or disreputable conduct.

The disciplinary sanctions to be

imposed for violation of the applicable

standards are:

Disbarred from practice before the

IRS—An individual who is disbarred

is not eligible to practice before the IRS

as defined at 31 C.F.R. § 10.2(a)(4) for a

minimum period of five (5) years.

November 20, 2023

Suspended from practice before the

IRS—An individual who is suspended is

not eligible to practice before the IRS as

defined at 31 C.F.R. § 10.2(a)(4) during

the term of the suspension.

Censured in practice before the

IRS—Censure is a public reprimand.

Unlike disbarment or suspension, censure

does not affect an individual’s eligibility

to practice before the IRS, but OPR may

subject the individual’s future practice

rights to conditions designed to promote

high standards of conduct.

Monetary penalty—A monetary penalty may be imposed on an individual who

engages in conduct subject to sanction,

or on an employer, firm, or entity if the

individual was acting on its behalf and it

knew, or reasonably should have known,

of the individual’s conduct.

Disqualification of appraiser—An

appraiser who is disqualified is barred

from presenting evidence or testimony in

any administrative proceeding before the

Department of the Treasury or the IRS.

Ineligible for limited practice—An

unenrolled/unlicensed return preparer

who fails to comply with the requirements

in Revenue Procedure 81-38 or to comply

with Circular 230 as required by Revenue

Procedure 2014-42 may be determined

ineligible to engage in limited practice as

a representative of any taxpayer.

Under the regulations, individuals

subject to Circular 230 may not assist, or

accept assistance from, individuals who

are suspended or disbarred with respect

to matters constituting practice (i.e., representation) before the IRS, and they may

not aid or abet suspended or disbarred

individuals to practice before the IRS.

Disciplinary sanctions are described in

these terms:

Disbarred by decision, Suspended

by decision, Censured by decision,

Monetary penalty imposed by decision,

and Disqualified after hearing—An

administrative law judge (ALJ) issued a

decision imposing one of these sanctions

after the ALJ either (1) granted the government’s summary judgment motion or

(2) conducted an evidentiary hearing upon

OPR’s complaint alleging violation of the

1258

regulations. After 30 days from the issuance of the decision, in the absence of an

appeal, the ALJ’s decision becomes the

final agency decision.

Disbarred by default decision,

Suspended by default decision,

Censured by default decision, Monetary

penalty imposed by default decision,

and Disqualified by default decision—

An ALJ, after finding that no answer to

OPR’s complaint was filed, granted OPR’s

motion for a default judgment and issued a

decision imposing one of these sanctions.

Disbarment by decision on appeal,

Suspended by decision on appeal,

Censured by decision on appeal,

Monetary penalty imposed by decision

on appeal, and Disqualified by decision

on appeal—The decision of the ALJ was

appealed to the agency appeal authority,

acting as the delegate of the Secretary

of the Treasury, and the appeal authority

issued a decision imposing one of these

sanctions.

Disbarred by consent, Suspended

by consent, Censured by consent,

Monetary penalty imposed by consent,

and Disqualified by consent—In lieu of

a disciplinary proceeding being instituted

or continued, an individual offered a consent to one of these sanctions and OPR

accepted the offer. Typically, an offer of

consent will provide for: suspension for

an indefinite term; conditions that the

individual must observe during the suspension; and the individual’s opportunity, after a stated number of months, to

file with OPR a petition for reinstatement

affirming compliance with the terms of

the consent and affirming current fitness

and eligibility to practice (i.e., an active

professional license or active enrollment

status, with no intervening violations of

the regulations).

Suspended indefinitely by decision in

expedited proceeding, Suspended indefinitely by default decision in expedited

proceeding, Suspended by consent in

expedited proceeding—OPR instituted

an expedited proceeding for suspension

(based on certain limited grounds, including loss of a professional license for cause,

and criminal convictions).

Bulletin No. 2023–47

Determined ineligible for limited

practice---There has been a final determination that an unenrolled/unlicensed

return preparer is not eligible for limited

representation of any taxpayer because the

preparer violated standards of conduct or

failed to comply with any of the requirements to act as a representative.

A practitioner who has been disbarred

or suspended under 31 C.F.R. § 10.60, or

suspended under § 10.82, or a disqualified

appraiser may petition for reinstatement

before the IRS after the expiration of 5

years following such disbarment, suspension, or disqualification (or immediately

following the expiration of the suspension

or disqualification period if shorter than 5

years). Reinstatement will not be granted

unless the IRS is satisfied that the petitioner is not likely to engage thereafter in

conduct contrary to Circular 230, and that

granting such reinstatement would not be

contrary to the public interest.

Reinstatement decisions are published

at the individual’s request, and described

in these terms:

Reinstated to practice before the

IRS---The individual’s petition for

reinstatement has been granted. The

agent, and eligible to practice before the

IRS, or in the case of an appraiser, the

individual is no longer disqualified.

Reinstated to engage in limited

practice before the IRS---The individual’s petition for reinstatement has been

granted. The individual is an unenrolled/

unlicensed return preparer and eligible to

engage in limited practice before the IRS,

subject to requirements the IRS has prescribed for limited practice by tax return

preparers.

OPR has authority to disclose the

grounds for disciplinary sanctions in these

situations: (1) an ALJ or the Secretary’s

delegate on appeal has issued a final

decision; (2) the individual has settled a

disciplinary case by signing OPR’s “consent to sanction” agreement admitting to

one or more violations of the regulations

and consenting to the disclosure of the

admitted violations (for example, failure

to file Federal income tax returns, lack of

due diligence, conflict of interest, etc.); (3)

OPR has issued a decision in an expedited

proceeding for indefinite suspension; or

(4) OPR has made a final determination

(including any decision on appeal) that an

unenrolled/unlicensed return preparer is

ineligible to represent any taxpayer before

the IRS.

Announcements of disciplinary sanctions appear in the Internal Revenue

Bulletin at the earliest practicable date.

The sanctions announced below are alphabetized first by state and second by the last

names of the sanctioned individuals.

City & State

Name

Professional

Designation

Disciplinary Sanction

Effective Date(s)

Alabama

Birmingham

Stewart, Jr., Otis J.

Attorney/CPA

Suspended by ALJ Decision

Indefinite from

May 21, 2023

California

Buena Park

Pak, James J.

Attorney/CPA

Colorado

Highlands Ranch

Parsons, Robert L.

CPA

Suspended by default decision

in expedited proceeding under

31 C.F.R. § 10.82(b)

Indefinite from

July 25, 2023

Georgia

Covington

Murray, Walter V.

CPA

Suspended by decision in

expedited proceeding under

31 C.F.R. § 10.82(b)

Indefinite from

July 25, 2023

Kentucky

Louisville

Brauckmann, John A.

CPA

Suspended by default decision

in expedited proceeding under

31 C.F.R. § 10.82(b)

Indefinite from

July 25, 2023

Maine

Carabaset Valley

Dardis, Edward G.

Attorney

Suspended by default decision

in expedited proceeding under

31 C.F.R. § 10.82(b)

Indefinite from

July 11, 2023

Bulletin No. 2023–47

Reinstated to practice

before the IRS, effective

09/28/2023

1259

November 20, 2023

City & State

Name

Professional

Designation

Disciplinary Sanction

Effective Date(s)

Minneapolis

Saint Paul

Shah, Ronak R.

CPA

Suspended by decision in

expedited proceeding under

31 C.F.R. § 10.82(b)

Indefinite from

September 28, 2023

Mississippi

Jackson

Seawright, John D.

Attorney

Suspended by default decision

in expedited proceeding under

31 C.F.R. § 10.82(b)

Indefinite from

September 28, 2023

New York

Thornwood

Vigna, Anthony P.

Attorney

Indefinite from

July 25, 2023

White Plains

Savignano, John J.

CPA

Suspended by default decision

in expedited proceeding under

31 C.F.R. § 10.82(b)

Suspended by consent for

admitted violations of

31 C.F.R § 10.51(a)(2)

Sharper, Sr.,

Anthony M.

CPA

Indefinite from

July 25, 2023

Garner, Jonathan B.

Attorney

Suspended by default decision

in expedited proceeding under

31 C.F.R. § 10.82(b)

Suspended by default decision

in expedited proceeding under

31 C.F.R. § 10.82(b)

North Carolina

Charlotte

Hamlet

Indefinite from

July 06, 2023

Indefinite from

September 28, 2023

South Carolina

Sharper, Sr.,

Anthony M., see North

Carolina

Tennessee

Knoxville

Gee, Jr., Edgar H.

CPA

Texas

Georgetown

Corn, Pamela L.

CPA

Heckathorn, Milton Ben

(aka Ben Heckathorn)

Attorney/CPA

Canfield, James L.

Enrolled Agent

Red Oak

Wisconsin

Wisconsin Rapids

November 20, 2023

Reinstated to practice

before the IRS, effective

July 25, 2023

Suspended by decision in

expedited proceeding under

31 C.F.R. § 10.82(b)

Suspended by default decision

in expedited proceeding under

31 C.F.R. § 10.82(b)

Indefinite from

July 25, 2023

Suspended by default decision

in expedited proceeding under

31 C.F.R. § 10.82(b)

Indefinite from

July 25, 2023

1260

Indefinite from

September 28, 2023

Bulletin No. 2023–47

Deletions From Cumulative

List of Organizations,

Contributions to Which are

Deductible Under Section

170 of the Code

Announcement 2023-33

The Internal Revenue Service has

revoked its determination that the organizations listed below qualify as organizations described in sections 501(c)(3) and

170(c)(2) of the Internal Revenue Code of

1986.

Generally, the IRS will not disallow

deductions for contributions made to a

listed organization on or before the date

of announcement in the Internal Revenue

Bulletin that an organization no longer

qualifies. However, the IRS is not precluded from disallowing a deduction for

any contributions made after an organization ceases to qualify under section 170(c)

(2) if the organization has not timely filed

a suit for declaratory judgment under section 7428 and if the contributor (1) had

knowledge of the revocation of the ruling

or determination letter, (2) was aware that

such revocation was imminent, or (3) was

in part responsible for or was aware of the

activities or omissions of the organization

that brought about this revocation.

NAME OF ORGANIZATION

GUATEMALA INSTITUTE FOR BIBICAL EVENGELISM INC.

CAMBRIDGEPORT TEACHER ORGANIZATION INC

HARMON COUNTY HEALTHCARE AUTHORITY

DOGS DAYS RANCH AND RESCUE

Bulletin No. 2023–47

1261

If on the other hand a suit for declaratory judgment has been timely filed,

contributions from individuals and organizations described in section 170(c)(2)

that are otherwise allowable will continue

to be deductible. Protection under section 7428(c) would begin on November

20, 2023 and would end on the date the

court first determines the organization is

not described in section 170(c)(2) as more

particularly set for in section 7428(c)(1).

For individual contributors, the maximum

deduction protected is $1,000, with a husband and wife treated as one contributor.

This benefit is not extended to any individual, in whole or in part, for the acts or

omissions of the organization that were

the basis for revocation.

Effective Date of

Revocation

01/01/2020

07/01/2020

03/01/2019

01/01/2021

LOCATION

BELTON, TX

CAMBRIDGE, MA

HOLLIS, OK

WINONA, TX

November 20, 2023

Notice of Proposed

Rulemaking

Federal Independent

Dispute Resolution (IDR)

Process Administrative Fee

and Certified IDR Entity Fee

Ranges

REG 115762-23

DEPARTMENT OF THE

TREASURY

Internal Revenue Service

26 CFR Part 54

DEPARTMENT OF LABOR

Employee Benefits Security

Administration

29 CFR Part 2590

DEPARTMENT OF HEALTH

AND HUMAN SERVICES

Centers for Medicare &

Medicaid Services

45 CFR Part 149

AGENCY: Internal Revenue Service,

Department of the Treasury; Employee

Benefits

Security

Administration,

Department of Labor; Centers for Medicare

& Medicaid Services, Department of

Health and Human Services.

ACTION: Proposed rules.

SUMMARY: This document sets forth

proposed rules related to the fees established by the No Surprises Act for the

Federal independent dispute resolution

(IDR) process, as established by the

Consolidated Appropriations Act, 2021

(CAA). These proposed rules would

amend existing regulations to provide that the administrative fee amount

charged by the Department of the

Treasury, the Department of Labor, and

the Department of Health and Human

Services (the Departments) to participate in the Federal IDR process, and

November 20, 2023

the ranges for certified IDR entity fees

for single and batched determinations

will be set by the Departments through

notice and comment rulemaking. These

proposed rules would also set forth the

methodology used to calculate the administrative fee and the considerations used

to develop the certified IDR entity fee

ranges. This document also proposes the

amount of the administrative fee for disputes initiated on or after the later of the

effective date of these rules or January

1, 2024. Finally, this document proposes

the certified IDR entity fee ranges for disputes initiated on or after the later of the

effective date of these rules or January 1,

2024. In accordance with 5 U.S.C. 553(b)

(4), a summary of this rule may be found

at https://www.regulations.gov/.

DATES: To be assured consideration,

comments must be received at one of the

addresses provided below by October 26,

2023.

ADDRESSES: Written comments may

be submitted to the addresses specified

below. Any comment that is submitted

will be shared among the Departments.

Please do not submit duplicates.

Comments will be made available

to the public. Warning: Do not include

any personally identifiable information

(such as name, address, or other contact

information) or confidential business

information that you do not want publicly disclosed. Comments are posted

on the internet exactly as received

and can be retrieved by most internet

search engines. No deletions, modifications, or redactions will be made to the

comments received, as they are public

records. Comments may be submitted

anonymously.

In commenting, refer to file code CMS9890-P. Because of staff and resource

limitations, the Departments cannot

accept comments by facsimile (FAX)

transmission.

Comments, including mass comment

submissions, must be submitted in one of

the following three ways (please choose

only one of the ways listed):

1. Electronically. You may submit

electronic comments on this regulation to

https://www.regulations.gov. Follow the

“Submit a comment” instructions.

1262

2. By regular mail. You may mail written comments to the following address

ONLY:

Centers for Medicare & Medicaid

Services,

Department of Health and Human

Services,

Attention: CMS-9890-P,

P.O. Box 8016,

Baltimore, MD 21244-8016.

Please allow sufficient time for mailed

comments to be received before the close

of the comment period.

3. By express or overnight mail. You

may send written comments to the following address ONLY:

enters for Medicare & Medicaid

Services,

Department of Health and Human

Services,

Attention: CMS-9890-P,

Mail Stop C4-26-05,

7500 Security Boulevard,

Baltimore, MD 21244-1850.

For information on viewing public comments, see the beginning of the

“SUPPLEMENTARY INFORMATION”

section.

FOR FURTHER INFORMATION

CONTACT: Shira B. McKinlay,

Internal Revenue Service, Department

of the Treasury, 202-317-5500; Shannon

Hysjulien or Rebecca Miller, Employee

Benefits

Security

Administration,

Department of Labor, 202-693-8335;

and Jacquelyn Rudich or Nora Simmons,

Centers for Medicare & Medicaid

Services, Department of Health and

Human Services, 301-492-5211.

SUPPLEMENTARY INFORMATION:

Inspection

Public

Comments:

Comments received before the close of

the comment period will be available

for viewing by the public, including any

personally identifiable or confidential

business information that is included in

a comment. The Departments will post

comments on the following website as

soon as possible after they have been

received:

https://www.regulations.gov.

Follow the search instructions on that

website to view public comments. The

Bulletin No. 2023–47

Departments will not post on Regulations.

gov public comments that make threats to

individuals or institutions or suggest that

the commenter will take actions to harm

an individual. The Departments continue

to encourage individuals not to submit

duplicative comments. The Departments

will post acceptable comments from multiple unique commenters even if the content is identical or nearly identical to other

comments.

I. Background

A. Preventing Surprise Medical Bills and

Establishing the Federal IDR Process

under the Consolidated Appropriations

Act, 2021

On December 27, 2020, the CAA was

enacted.1 Title I, also known as the No

Surprises Act, and title II (Transparency)

of Division BB of the CAA amended

chapter 100 of the Internal Revenue Code

(Code), Part 7 of the Employee Retirement

Income Security Act (ERISA), and title

XXVII of the Public Health Service Act

(PHS Act). The No Surprises Act provides Federal protections against surprise

billing by limiting out-of-network cost

sharing and prohibiting balance billing

in many of the circumstances in which

surprise bills most frequently arise. In

particular, the No Surprises Act added

new provisions applicable to group health

plans and health insurance issuers offering group or individual health insurance

coverage. Section 102 of the No Surprises

Act added section 9816 of the Code,2 section 716 of ERISA,3 and section 2799A-1

of the PHS Act,4 which contain limitations on cost sharing and requirements

regarding the timing of initial payments

and notices of denial of payment by

plans and issuers for emergency services

furnished by nonparticipating providers

and nonparticipating emergency facilities, and for non-emergency services furnished by nonparticipating providers for

patient visits to participating health care

facilities, generally defined as hospitals,

hospital outpatient departments, critical

access hospitals, and ambulatory surgical

centers.5

Section 103 of the No Surprises Act

established a Federal IDR process that

plans and issuers and nonparticipating providers and facilities may utilize to resolve

certain disputes regarding out-of-network

rates under section 9816 of the Code,6 section 716 of ERISA,7 and section 2799A-1

of the PHS Act.8 Section 9816(c)(8) of the

Code,9 section 716(c)(8) of ERISA,10 and

section 2799A-1(c)(8) of the PHS Act11

provide that each party to a determination

under the Federal IDR process shall pay

a fee for participating in the Federal IDR

process, and the amount of the fee is an

amount established by the Departments in

a manner such that the total amount of fees

paid by all parties is estimated to be equal

to the amount of expenditures estimated to

be made by the Departments for the year in

carrying out the Federal IDR process.

Section 105 of the No Surprises Act

added section 9817 of the Code,12 section

717 of ERISA,13 and section 2799A-2

of the PHS Act.14 These sections contain

limitations on cost sharing and requirements for the timing of initial payments

and notices of denial of payment by plans

and issuers for air ambulance services furnished by nonparticipating providers of

air ambulance services, and allow plans

and issuers and nonparticipating providers of air ambulance services to utilize the

Federal IDR process.

The No Surprises Act also added provisions to title XXVII of the PHS Act in

a new part E15 that apply to health care

providers, facilities, and providers of

air ambulance services, such as prohibitions on balance billing for certain items

and services and requirements related

to disclosures about balance billing

protections.

The Departments of the Treasury,

Labor, and Health and Human Services

(HHS) (the Departments), along with the

Office of Personnel Management (OPM),

have issued rulemakings in 2021 and 2022

to implement various provisions of the No

Surprises Act. More specifically relevant to

this proposed rulemaking, the Departments

and OPM issued interim final rules (July

2021 interim final rules16 and October

2021 interim final rules17) and final rules

(August 2022 final rules18) implementing

provisions of sections 9816 and 9817 of the

Code,19 sections 716 and 717 of ERISA,20

and sections 2799A-1 and 2799A-2 of

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

26 U.S.C. 9816, et seq.

29 U.S.C. 1185e, et seq.

42 U.S.C. 300gg–111, et seq.

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 sections 9816 and 9817 of the Code, sections 716 and 717 of ERISA, and sections

2799A-1 and 2799A-2 of the PHS Act (as applicable) in the same manner as these provisions apply with respect to a group health plan or health insurance issuer offering group or individual

health insurance coverage.

26 U.S.C. 9816, et seq.

29 U.S.C. 1185e, et seq.

42 U.S.C. 300gg–111, et seq.

26 U.S.C. 9816(c)(8).

29 U.S.C. 1185e(c)(8).

42 U.S.C. 300gg–111(c)(8).

26 U.S.C. 9817, et seq.

29 U.S.C. 1185f, et seq.

42 U.S.C. 300gg–112, et seq.

42 U.S.C. 300gg-131-139.

86 FR 36872 (July 13, 2021).

86 FR 55980 (October 7, 2021).

87 FR 52618 (August 26, 2022).

26 U.S.C. 9816, et seq. and 26 U.S.C. 9817, et seq.

29 U.S.C. 1185e, et seq. and 29 U.S.C. 1185f, et seq.

Bulletin No. 2023–47

1263

November 20, 2023

the PHS Act.21 These rules implement

provisions to protect consumers from

surprise medical bills for emergency services, non-emergency services furnished

by nonparticipating providers for patient

visits to participating facilities22 in certain

circumstances, and air ambulance services

furnished by nonparticipating providers

of air ambulance services. These rules

also implement provisions to establish a

Federal IDR process to determine payment

amounts when there is a dispute between

plans or issuers and providers, facilities, or

providers of air ambulance services about

the out-of-network rate for these services

if a specified State law as defined in 26

CFR 54.9816-3T, 29 CFR 2590.716-3, and

45 CFR 149.30 or an applicable All-Payer

Model Agreement under section 1115A of

the Social Security Act does not provide a

method for determining the total amount

payable.

The July 2021 interim final rules and

October 2021 interim final rules generally apply to plans and issuers (including

grandfathered health plans) for plan years

(in the individual market, policy years)

beginning on or after January 1, 2022, and

to health care providers, facilities, and providers of air ambulance services for items

and services furnished during plan years

(in the individual market, policy years)

beginning on or after January 1, 2022.23

The August 2022 final rules became effective October 25, 2022, and are applicable

for items or services provided or furnished

on or after October 25, 2022 for plan years

(in the individual market, policy years)

beginning on or after January 1, 2022.

B. October 2021 Interim Final Rules and

Related Guidance

The October 2021 interim final rules

implement the Federal IDR process under

sections 9816(c) and 9817(b) of the Code,24

sections 716(c) and 717(b) of ERISA,25

and sections 2799A-1(c) and 2799A-2(b)

of the PHS Act.26 The rules apply to emergency services, non-emergency services

furnished by nonparticipating providers

for patient visits to certain types of participating health care facilities27 (unless an

individual has been provided notice and

waived the individual’s surprise billing

protections, in accordance with 45 CFR

149.410 or 149.420, as applicable), and

air ambulance services furnished by nonparticipating providers of air ambulance

services, for situations in which neither a

specified State law as defined in 26 CFR

54.9816-3T, 29 CFR 2590.716-3, and

45 CFR 149.30 nor an All-Payer Model

Agreement under section 1115A of the

Social Security Act applies.

To implement the Federal IDR process, the October 2021 interim final rules

include requirements governing the costs

of the Federal IDR process. Under section 9816(c)(5)(F)(i) of the Code, 28 section 716(c)(5)(F)(i) of ERISA,29 section

2799A-1(c)(5)(F)(i) of the PHS Act,30

and the October 2021 interim final rules,

the party whose offer is not selected is

responsible for the payment of the fee

charged by the certified IDR entity (certified IDR entity fee).31 Under the October

2021 interim final rules, as a condition of

certification, the certified IDR entity must

notify the Departments of the amount of

the certified IDR entity fees it intends to

charge for payment determinations, which

is limited to a fixed certified IDR entity

fee amount for single determinations and

a separate fixed certified IDR entity fee

amount for batched determinations.32 Each

of these fixed certified IDR entity fees

must be within a range set forth in guidance by the Departments, unless the certified IDR entity receives written approval

from the Departments to charge a certified

IDR entity fee outside that range.33 The

October 2021 interim final rules describe

the considerations that the Departments

will use to develop the certified IDR entity

fee ranges, including the anticipated time

and resources needed for certified IDR

entities to meet the requirements of those

interim final rules, the volume of payment

determinations, and the adequacy of the

Federal IDR process capacity to efficiently

handle the volume of IDR initiations and

payment determinations, and discuss that

the Departments will review and update

the allowable fee ranges annually based

on these factors, the impact of inflation,

and other cost increases. Those rules also

provide that on an annual basis, the certified IDR entity may update its certified

IDR entity fees within the ranges set forth

in current guidance and seek approval

from the Departments to charge fixed certified IDR entity fees beyond the upper or

lower limits for certified IDR entity fees.34

Additionally, pursuant to section

9816(c)(8) of the Code,35 section 716(c)(8)

of ERISA,36 and section 2799A-1(c)(8) of

the PHS Act,37 and under the October 2021

42 U.S.C. 300gg–111, et seq. and 42 U.S.C. 300gg–112, et seq.

References to a “participating facility” in this preamble mean a “participating health care facility,” as defined at 26 CFR 54.9816-3T, 29 CFR 2590.716-3, and 45 CFR 149.30.

The interim final rules also include interim final regulations under 5 U.S.C. 8902(p) issued by OPM that specify how certain provisions of the No Surprises Act apply to health benefit plans

offered by carriers under the Federal Employees Health Benefits Act. These provisions apply to carriers in the FEHB Program with respect to contract years beginning on or after January 1,

2022. The disclosure requirements at 45 CFR 149.430 regarding patient protections against balance billing are applicable as of January 1, 2022.

26 U.S.C. 9816(c) and 26 U.S.C. 9817(b).

29 U.S.C. 1185e(c) and 29 U.S.C. 1185f(b).

42 U.S.C. 300gg–111(c) and 42 U.S.C. 300gg–112(b).

A health care facility, in the context of non-emergency services, is defined as (1) a hospital (as defined in section 1861(e) of the Social Security Act), (2) a hospital outpatient department,

(3) a critical access hospital (as defined in section 1861(mm)(1) of the Social Security Act), or (4) an ambulatory surgical center described in section 1833(i)(1)(A) of the Social Security Act.

Code section 9816(b)(2)(A)(ii), ERISA section 716(b)(2)(A)(ii), and PHS Act section 2799A–1(b)(2)(A)(ii). 26 CFR 54.9816-3T, 29 CFR 2590.716-3, and 45 CFR 149.30.

26 U.S.C. 9816(c)(5)(F)(i).

29 U.S.C. 1185e(c)(5)(F)(i).

42 U.S.C. 300gg–111(c)(5)(F)(i).

In the case of a batched dispute, the party with fewest determinations in its favor is considered the non-prevailing party and is responsible for paying the certified IDR entity fee. In the event

that each party prevails in an equal number of determinations, the certified IDR entity fee will be split evenly between the parties. 86 FR 55980, 56001.

26 CFR 54.9816-8T(e)(2)(vii), 29 CFR 2590.716-8(e)(2)(vii), and 45 CFR 149.510(e)(2)(vii).

Id.

26 U.S.C. 9816(c)(8).

29 U.S.C. 1185e(c)(8).

42 U.S.C. 300gg–111(c)(8).

November 20, 2023

1264

Bulletin No. 2023–47

interim final rules, each party must pay an

administrative fee for participating in the

Federal IDR process. The administrative

fee is established in guidance in a manner

so that, in accordance with the requirements of section 9816(c)(8)(B) of the

Code,38 section 716(c)(8)(B) of ERISA,39

and section 2799A-1(c)(8)(B) of the PHS

Act,40 the total administrative fees paid

for a year are estimated to be equal to the

amount of expenditures estimated to be

made by the Departments to carry out the

Federal IDR process for that year.41

Contemporaneously with the October

2021 interim final rules, the Departments

released the Calendar Year 2022 Fee

Guidance for the Federal Independent

Dispute Resolution Process Under the

No Surprises Act (October 2021 guidance), setting the administrative fee

for both parties to a dispute at $50 per

party.42 The October 2021 guidance also

established the range for fixed certified

IDR entity fees for single determinations

as $200–$500, and the range for fixed

certified IDR entity fees for batched

determinations as $268–$670, unless

otherwise approved by the Departments.

In October 2022, the Departments

released the Calendar Year 2023 Fee

Guidance for the Federal Independent

Dispute Resolution Process Under the

No Surprises Act (October 2022 guidance), again setting the administrative

fee for both parties to a dispute at $50

per party.43 The October 2022 guidance

explained that the data available regarding take-up and usage of the Federal

IDR process was not reliable enough to

support a change to either the estimated

number of payment determinations for

which administrative fees would be paid

or the estimated ongoing program costs

for 2023; therefore, the 2023 administrative fee amount due from each party

for participating in the Federal IDR process would remain the same as the 2022

administrative fee. The October 2022

guidance permits certified IDR entities to

charge a fee between $200 and $700 for

single determinations and between $268

and $938 for batched determinations,

unless the Departments otherwise grant

approval for the certified IDR entity to

charge a fee outside of these ranges. In

addition, to account for the heightened

workload for batched determinations, the

October 2022 guidance permits a certified IDR entity to charge the following

percentage of its approved certified IDR

entity batched determination fee (“batching percentage”) for batched determinations, which are based on the number of

line items initially submitted in the batch:

• 2-20 line items: 100 percent of the

approved batched determination fee;

• 21-50 line items: 110 percent of the

approved batched determination fee;

• 51-80 line items: 120 percent of the

approved batched determination fee;

and

• 81 line items or more: 130 percent of

the approved batched determination

fee.

In December 2022, the Departments

released the Amendment to the Calendar

Year 2023 Fee Guidance for the Federal

Independent Dispute Resolution Process

Under the No Surprises Act (December

2022 guidance), which amended the

$50 per party administrative fee set in

the October 2022 guidance to $350 for

calendar year 2023.44 The change in the

administrative fee for 2023 reflected

the additional costs to the Departments

to carry out the Federal IDR process as

a result of the Departments’ enhanced

role in calendar year 2023 in conducting

pre-eligibility reviews to allow the certified IDR entities to complete their eligibility determinations more efficiently,45

as well as systemic improvements that

allowed for the aggregation of data needed

to estimate the rate at which disputes were

determined eligible for the Federal IDR

process and the rate at which one or both

parties paid the administrative fee for purposes of calculating the administrative

fee. The December 2022 guidance did not

amend the certified IDR entity fee ranges.

C. Recent Litigation

On November 30, 2022, the Texas

Medical Association, Tyler Regional

Hospital, and a Texas physician filed

a lawsuit (TMA III)46 against the

Departments and OPM, asserting that the

July 2021 interim final rules47 and certain

related guidance documents were in conflict with the statutory language, including

the regulations governing how the qualifying payment amount (QPA) should be

calculated. On August 24, 2023, the U.S.

District Court for the Eastern District of

Texas (Texas District Court) issued a

memorandum opinion and order48 that

vacated certain portions of the July 2021

interim final rules and associated regulatory provisions49 and portions of guidance

26 U.S.C. 9816(c)(8)(B).

29 U.S.C. 1185e(c)(8)(B).

42 U.S.C. 300gg–111(c)(8)(B).

26 CFR 54.9816-8T(d)(2)(ii), 29 CFR 2590.716-8(d)(2)(ii), and 45 CFR 149.510(d)(2)(ii).

Centers for Medicare & Medicaid Services (September 30, 2021). Calendar Year 2022 Fee Guidance for the Federal Independent Dispute Resolution Process under the No Surprises Act.

https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Technical-Guidance-CY2022-Fee-Guidance-Federal-Independent-Dispute-Resolution-Process-NSA.pdf.

Centers for Medicare & Medicaid Services (October 31, 2022). Calendar Year 2023 Fee Guidance for the Federal Independent Dispute Resolution Process under the No Surprises Act.

https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.

Centers for Medicare & Medicaid Services (December 23, 2022). Amendment to the Calendar Year 2023 Fee Guidance for the Federal Independent Dispute Resolution Process under the

No Surprises Act: Change in Administrative Fee. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/amended-cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.

Centers for Medicare & Medicaid Services (November 21, 2022). Notice of the Federal Independent Dispute Resolution (IDR) Team Technical Assistance to Certified Independent Dispute

Resolution Entities (IDREs) in the Dispute Eligibility Determination Process. https://www.cms.gov/files/document/idre-eligibility-support-guidance-11212022-final-updated.pdf.

Tex. Med. Ass’n, v. U. S. Dep’t of Health and Human Servs., Case No. 6:22-cv-00450-JDK (E.D. Tex. November 30, 2022).

86 FR 36872 (July 13, 2021).

See Memorandum Opinion and Order, Tex. Med. Ass’n. v. U.S. Dep’t of Health & Hum. Servs, No. 6:22-cv-00450-JDK (E.D. Tex. August 24, 2023).

Specifically, the Texas District Court vacated certain subprovisions of 45 CFR § 149.130 and 149.140, 26 CFR § 54.9816-6T and 54.9817-1T, and 29 CFR § 2590.716-6 and 2590.717-1.

The Texas District Court also vacated 5 CFR § 890.114(a).

Bulletin No. 2023–47

1265

November 20, 2023

documents,50 including those portions that

provided the methodology for calculating

the QPA and interpretations for certified

IDR entities related to the processing of

disputes for air ambulance services.

On January 30, 2023, the Texas

Medical Association, Houston Radiology

Associated, Texas Radiological Society,

Tyler Regional Hospital, and a Texas physician filed a lawsuit (TMA IV)51 against

the Departments and OPM, asserting that

the December 2022 guidance was unlawfully issued without notice and comment

rulemaking.52 On August 3, 2023, the

Texas District Court issued a memorandum opinion and order53 that vacated the

portion of the December 2022 guidance54

that increased the administrative fee for

the Federal IDR process to $350 per party

for disputes initiated during the calendar year beginning January 1, 2023. The

Texas District Court also vacated certain

provisions of the October 2021 interim

final rules setting forth the batching criteria under which multiple IDR items or

services are treated as related to the “treatment of a similar condition.”55

As a result of the TMA IV opinion and

order, on August 3, 2023, the Departments

instructed certified IDR entities to pause

all work in the Federal IDR portal until the

Departments updated the Federal IDR process guidance, systems, and related documents to make them consistent with the

TMA IV opinion and order. Subsequently,

on August 7, 2023, the Departments

directed certified IDR entities to resume

processing all single and bundled disputes for which the administrative fee

had already been paid and all batched disputes for which the certified IDR entity

had already determined the dispute to be

eligible and administrative fees had been

paid (or the deadline for collecting fees

had expired) before August 3, 2023. On

August 8, 2023, the Departments directed

certified IDR entities to resume processing single and bundled disputes initiated

in 2022 for which the administrative fee

had not been paid before August 3, 2023.

On August 11, 2023, the Departments

released guidance56 to reflect the TMA

IV decision related to the administrative

fee and to clarify the applicability of the

$50 per party per dispute administrative

fee amount for 2023, as provided in the

October 2022 guidance. On the same

date, the Departments directed certified

IDR entities to resume processing single

and bundled disputes initiated in 2023 for

which the administrative fees had not been

paid before August 3, 2023. As a result of

the TMA III opinion and order issued on

August 24, 2023, the Departments again

paused all IDR-related activities in order

to evaluate the Texas District Court’s order

and review current Federal IDR processes,

templates, and system updates that are

necessary to comply with the order. As of

the publication of this proposed rulemaking, the Departments have directed certified IDR entities only to perform limited

Federal IDR process functions.

D. Scope and Purpose of Rulemaking

These rules propose amendments to 26

CFR 54.9816-8(d)(2)(ii) and (e)(2)(vii),

29 CFR 2590.716-8(d)(2)(ii) and (e)(2)

(vii), and 45 CFR 149.510(d)(2)(ii) and

(e)(2)(vii) to provide that the administrative fee amount and the ranges for certified IDR entity fees for single and batched

disputes would be set by the Departments

through notice and comment rulemaking,

rather than in guidance published annually. This rulemaking also proposes to set

forth the methodology used to calculate

the administrative fee and the considerations used to develop the certified IDR

entity fee ranges. These rules would also

propose the administrative fee amount and

certified IDR entity fee ranges for disputes

initiated on or after the later of the effective date of these rules or January 1, 2024.

II. Overview of the Proposed Rules—

Departments of the Treasury, Labor, and

HHS

A. Administrative Fee Amount and

Methodology

Under section 9816(c)(8)(A) of the

Code,57 section 716(c)(8)(A) of ERISA,58

section 2799A-1(c)(8)(A) of the PHS

Act,59 and the October 2021 interim final

rules,60 each party to a determination for

which a certified IDR entity is selected

must pay an administrative fee for participating in the Federal IDR process. Under

section 9816(c)(8)(B) of the Code,61 section 716(c)(8)(B) of ERISA,62 section

2799A-1(c)(8)(B) of the PHS Act,63 and

the October 2021 interim final rules,64 the

administrative fee is established in a manner such that the total administrative fees

Specifically, the Texas District Court vacated FAQs 14 and 15 of FAQs about Affordable Care Act and Consolidated Appropriations Act, 2021 Implementation Part 55 (August 19, 2022),

as well as portions of Technical Guidance for Certified IDR Entities at 2-3 (August 18, 2022).

Tex. Med. Ass’n, v. U. S. Dep’t of Health and Human Servs., Case No. 6:23-cv-00059-JDK (E.D. Tex. January 30, 2023).

See Motion for Summary Judgment and Reply in Support of Summary Judgment, p. 1, Tex. Med. Ass’n. v. U.S. Dep’t of Health & Hum. Servs, No. 6:23-cv-00059-JDK (E.D. Tex. March

27, 2023). https://ecf.txed.uscourts.gov/doc1/175113317945.

See Memorandum Opinion and Order, Tex. Med. Ass’n. v. U.S. Dep’t of Health & Hum. Servs, No. 6:23-cv-00059-JDK (E.D. Tex. August 3, 2023).

Centers for Medicare & Medicaid Services (December 23, 2022). Amendment to the Calendar Year 2023 Fee Guidance for the Federal Independent Dispute Resolution Process under the

Specifically, the Texas District Court vacated the requirement under 26 CFR 54.9816-8T(c)(3)(i)(C), 29 CFR 2590.716-8(c)(3)(i)(C), and 45 CFR 149.510(c)(3)(i)(C) that for a qualified

IDR item and service to be considered the same or similar item and service, it must be billed under the same service code or a comparable code under a different procedural code system,

such as the Current Procedural Terminology (CPT) codes with modifiers, if applicable, Healthcare Common Procedure Coding System (HCPCS) with modifiers, if applicable, or DiagnosisRelated Group (DRG) codes with modifiers, if applicable.

Centers for Medicare & Medicaid Services (August 11, 2023). Federal Independent Dispute Resolution (IDR) Process Administrative Fee FAQs. https://www.cms.gov/cciio/resources/

regulations-and-guidance/downloads/no-surprises-act-independent-dispute-resolution-administrative-fee-frequently-asked-questions.pdf.

26 U.S.C. 9816(c)(8)(A).

29 U.S.C. 1185e(c)(8)(A).

42 U.S.C. 300gg–111(c)(8)(A).

26 CFR 54.9816-8T(d)(2)(i), 29 CFR 2590.716-8(d)(2)(i), and 45 CFR 149.510(d)(2)(i).

26 U.S.C. 9816(c)(8)(B).

29 U.S.C. 1185e(c)(8)(B).

42 U.S.C. 300gg–111(c)(8)(B).

26 CFR 54.9816-8T(d)(2)(ii), 29 CFR 2590.716-8(d)(2)(ii), and 45 CFR 149.510(d)(2)(ii).

November 20, 2023

1266

Bulletin No. 2023–47

paid for a year are estimated to be equal

to the amount of expenditures estimated to

be made by the Departments to carry out

the Federal IDR process for that year.

In TMA IV,65 the Texas District Court

issued an opinion and order holding that

the process by which the Departments

amended the 2023 administrative fee guidance to increase the administrative fee for

the Federal IDR process from $50 to $350

per party for disputes initiated during the

calendar year beginning January 1, 202366

was a violation of the Departments’ obligation under the Administrative Procedure

Act to give affected parties notice of and

an opportunity to comment on the administrative fee.67 In light of the Texas District

Court’s opinion and order, as well as the

Departments’ reassessment regarding the

practicability of establishing the administrative fee through notice and comment

rulemaking, the Departments propose to

establish the amount of the administrative

fee through notice and comment rulemaking. To reflect this, the Departments propose to amend 26 CFR 54.9816-8(d)(2)

(ii), 29 CFR 2590.716-8(d)(2)(ii), and

45 CFR 149.510(d)(2)(ii) to state that the

Departments will set the administrative fee

through notice and comment rulemaking.

The Departments also propose at

26 CFR 54.9816-8(d)(2)(ii), 29 CFR

2590.716-8(d)(2)(ii), and 45 CFR

149.510(d)(2)(ii) that, for disputes initiated on or after the later of the effective date of these rules or January 1,

2024, the proposed administrative fee

amount would be $150 per party per dispute, which would remain in effect until

changed by subsequent rulemaking. Under

this proposed rule, the Departments propose to retain the flexibility to update the

administrative fee more frequently or less

frequently than annually. With this flexibility, the Departments intend to update

the administrative fee amount when the

total projected amount of administrative fees paid or projected expenditures

made by the Departments to carry out the

Federal IDR process changes, such that

a new administrative fee amount would

be required for the Departments to cover

the costs of carrying out the Federal IDR

process. For example, the Departments’

expenditures may be impacted by changes

to regulations governing the Federal IDR

process or the implementation of that process, the volume of disputes initiated and

closed under the Federal IDR process, and

the Departments’ costs. In such cases, the

Departments would propose a different

administrative fee amount in notice and

comment rulemaking before applying a

new administrative fee amount. Thus,

the proposal to amend the current regulation to remove the requirement to set the

administrative fee amount annually would

help mitigate the risk of the Departments

being unable to collect administrative fees

sufficient to carry out the Federal IDR process in response to evolving conditions,

such as the rates at which disputes are

being initiated and closed. Additionally,

the Departments could determine that the

projected amount of administrative fees

paid at the current fee amount will equal

the projected expenditures made to carry

out the Federal IDR process in a subsequent year, and therefore, no adjustment

of the fee amount in rulemaking would be

necessary. This proposed approach would

comport with the statutory requirement

to set the administrative fee amount in a

manner such that the total amount of fees

paid in a year is estimated to be equal to

the amount of expenditures estimated to

be made by the Departments in such year

in carrying out the Federal IDR process.

The Departments propose to set the

administrative fee amount by projecting

the amount of expenditures to be made

by the Departments in carrying out the

Federal IDR process and dividing this

by the projected number of administrative fees to be paid by the parties. The

Departments project the number of administrative fees to be paid based on the total

volume of disputes to be closed. Under

the current Federal IDR process and

the policies proposed in these proposed

rules, both the initiating and non-initiating parties to a dispute are required to

pay the non-refundable administrative fee

in full, and therefore the total amount of

administrative fees paid is calculated to

reflect that both parties to a dispute pay

the administrative fee. In calculating the

Departments’ estimated administrative

fee, the Departments use the total volume

of disputes projected to be closed, rather

than the total volume of disputes projected

to be initiated, because the total volume of

closed disputes is more indicative of the

total volume of disputes for which fees are

paid under the Departments’ current collections process.68

For the purposes of calculating the

administrative fee amount proposed in

this rulemaking, the Departments project approximately 225,000 disputes will

be closed annually. This projection is

based on Federal IDR process data from

February 2023 through July 2023, which

is the most recent 6-month period before

Federal IDR process operations were

temporarily paused in August 2023.69

Using this projected volume of disputes,

the Departments assume a prospective

reduction of approximately 25 percent in

the volume of closed disputes to account

for the impact of the TMA IV opinion and

order’s vacatur of the batching regulations

at 26 CFR 54.9816-8T(c)(3)(i)(C), 29

CFR 2590.716-8(c)(3)(i)(C), and 45 CFR

149.510(c)(3)(i)(C). The Departments

anticipate that the vacatur of the batching

regulations as a result of TMA IV discussed

in sections I.C. and II.B. of this preamble

6:23-cv-00059-JDK (E.D. Tex. Jan. 30, 2023).

Centers for Medicare & Medicaid Services (December 23, 2022). Amendment to the Calendar Year 2023 Fee Guidance for the Federal Independent Dispute Resolution Process under the

See Memorandum Opinion and Order, Tex. Med. Ass’n. v. U.S. Dep’t of Health & Hum. Servs, No. 6:23-cv-00059-JDK (E.D. Tex. August 3, 2023). https://ecf.txed.uscourts.gov/

doc1/175113317945.

Under current policy and guidance, the administrative fee may be collected by certified IDR entities up until the time the parties submit their offers, and therefore the administrative fee

is not collected for all disputes initiated. See, for example, Centers for Medicare & Medicaid Services (March 2023). Federal Independent Dispute Resolution (IDR) Process Guidance for

Certified IDR Entities. https://www.cms.gov/files/document/federal-idr-guidance-idr-entities-march-2023.pdf.

For this calculation, we used our Federal IDR process collections data from February 2023 through July 2023 to calculate the average monthly volume of disputes closed. We applied the

25 percent reduction described in this rule to the average monthly volume and multiplied this number by 12 to project the annual volume of closed disputes.

Bulletin No. 2023–47

1267

November 20, 2023

may result in the initiation and closure of

fewer disputes due to the possibility that

batched disputes may involve more line

items and take more time to close.

Additionally, to calculate the administrative fee amount proposed in this

rulemaking, the Departments projected

the expenditures to carry out the Federal

IDR process. These projected expenditures include the Federal resources needed

to carry out the Federal IDR process, such

as personnel costs, as well as activities

included as part of contract costs, such

as resources used for targeted improvements of the overall process. The costs

to the Departments for carrying out the

Federal IDR process in 2024 are projected to be approximately $70 million,70

which includes contract costs and Federal

resources associated with:

• Maintaining the Federal IDR portal,

which is intended to make the parties’

and certified IDR entities’ experiences

using the portal more efficient, clear,

and streamlined;

• Certifying IDR entities and collecting

data from them, which is intended to

increase the number of certified IDR

entities, improving the speed of eligibility and payment determinations,

and to assist the Departments in understanding where some efficiencies may

still be gained in the process;

• Conducting program integrity activities, such as QPA audits and IDR

decision audits, which are intended to

ensure program integrity of the Federal

IDR process by reducing and preventing errors in the Federal IDR process;

• Investigating relevant complaints,

which is intended to ensure compliance

with the Federal IDR process;

• Providing outreach to parties and technical assistance to certified IDR entities, which is intended to streamline

the experience and further improve the

speed and integrity of eligibility and

payment determinations;

• Collecting administrative fees, which

is intended to operationalize, maintain,

and oversee administrative fee collections from certified IDR entities;

• Assisting with eligibility determinations when the volume of disputes submitted exceeds the capacity of certified

IDR entities to perform those determinations, which is intended to expedite

and facilitate eligibility reviews conducted by certified IDR entities;71 and

• Retaining and making available

Federal personnel dedicated to carrying out Federal IDR process activities.

Using this methodology, as proposed

in paragraphs 26 CFR 54.9816-8(d)(2)(ii),

29 CFR 2590.716-8(d)(2)(ii), and 45 CFR

149.510(d)(2)(ii), the proposed administrative fee for disputes initiated on or after

the later of the effective date of these rules

or on January 1, 2024, and continuing until

changed by subsequent rulemaking, would

be calculated by dividing the projected

annual expenditures of approximately $70

million to be made by the Departments in

carrying out the Federal IDR process by

the projected annual number of administrative fees to be paid by the disputing

parties. As previously explained, the projected total number of administrative fees

is calculated using the projected volume

of disputes closed and reflects that both

parties to a dispute pay the administrative

fee. We project 225,000 closed disputes

in calendar year 2024. Therefore,450,000

administrative fees would be paid by

the parties in the year, because initiating

and non-initiating parties to a dispute are

required to pay the full administrative fee

under the current Federal IDR process.

This would result in a proposed administrative fee amount of $150 per party per

dispute.72 This administrative fee amount

is based on the most current collections

data (February through July 2023), which

the Departments have determined to be

the best available data for estimation of

future collections, and the Departments’

projected expenditures as of the publication of these proposed rules. These projections may change between the publication

of the proposed and final rules based on

more recent data available at that time;

thus, the Departments propose to finalize

an administrative fee amount methodology proposed here, as finalized, using the

updated data, if applicable.

The Departments continue to consider improvements to the Federal IDR

process, including how collection of the

administrative fee could be more efficient

and how the administrative fee amount

could better ensure equitable access to

the Federal IDR process across the various parties seeking to initiate disputes.

Accordingly, the Departments intend to

propose additional policies related to the

administrative fee in future notice and

comment rulemaking, including policies

that would change the manner and timeframe in which the administrative fee is

paid, reduce the administrative fee amount

for disputes that are determined ineligible

or that involve low-dollar claims, and codify the consequences of failing to pay the

administrative fee. Therefore, it is likely

that these potential future proposals could

require changes to the administrative fee

amount, and any such change would be

set forth in future notice and comment

rulemaking.

The Departments solicit comments on

this proposal, including the methodology

used to calculate the administrative fee

amount and the proposed administrative

fee amount for disputes initiated on or

after the later of the effective date of these

rules or on January 1, 2024, as well as any

potential effects on interested parties as a

result of increasing the administrative fee

from $50 to $150 per party. For example, the Departments solicit comments on

whether this proposed administrative fee

amount could be cost prohibitive for certain parties disputing low-dollar items and

services, and whether it would reduce the

number of disputes initiated in calendar

year 2024 and beyond. The Departments

also solicit comment on the proposal to

set the administrative fee amount more

frequently or less frequently than annually and whether the Departments should

Because the Departments generally are not permitted to publicly provide information that is confidential due to trade secrets associated with future contracting, the Departments are limited

in their ability to provide detailed information about projected total Federal IDR process expenditures. See 45 CFR 5.31(d).

Centers for Medicare & Medicaid Services (November 21, 2022). Notice of the Federal Independent Dispute Resolution (IDR) Team Technical Assistance to Certified Independent Dispute

Resolution Entities (IDREs) in the Dispute Eligibility Determination Process. https://www.cms.gov/files/document/idre-eligibility-support-guidance-11212022-final-updated.pdf.

As described later in this rule, we estimate that the proposed administrative fee of $150 per party, per dispute would result in an estimated annual collection approximately equal to the

projected annual expenditures of approximately $70 million.

November 20, 2023

1268

Bulletin No. 2023–47

instead retain the current policy that the

administrative fee amount is set annually.

Additionally, the Departments seek comment on any implications of TMA III and

TMA IV that could impact these administrative fee proposals that are not already

noted in this proposed rulemaking.

Finally, the Departments solicit comment on whether, in future years, they

should apply an inflationary adjustment,

such as the consumer price index for all

urban consumers (CPI-U), to the projected expenditures to be made by the

Departments in carrying out the Federal

IDR process when calculating the administrative fee amount each year and set forth

the adjusted administrative fee amount in

guidance, rather than in notice and comment rulemaking, as long as there are no

other changes to the methodology.

B. Certified IDR Entity Fee Ranges

Under current regulations at 26 CFR

54.9816-8T(e)(2)(vii), 29 CFR 2590.7168(e)(2)(vii), and 45 CFR 149.510(e)(2)

(vii), the certified IDR entity fees for

single determinations and batched determinations are set by the certified IDR

entities within the upper and lower limits

of ranges for each as set forth in guidance

issued annually by the Departments.

The Departments propose to amend

the provisions of the regulations establishing the ranges for certified IDR entity

fees for single and batched disputes to

refer to the ranges being established in

notice and comment rulemaking, rather

than in guidance. These changes would

be reflected at 26 CFR 54.9816-8(e)(2)

(vii), 29 CFR 2590.716-8(e)(2)(vii), and

45 CFR 149.510(e)(2)(vii), which would

specify that certified IDR entities must,

on an annual basis, provide a fixed fee for

single determinations and separate fixed

fees for batched determinations within the

upper and lower limits for each as set in

notice and comment rulemaking. Further,

the proposed rules would provide that the

certified IDR entity fee ranges established

by the Departments in rulemaking would

remain in effect until new certified IDR

entity fee ranges are changed by a subsequent notice and comment rulemaking.

Under this approach, the Departments

would retain the discretion to update the

certified IDR entity fee ranges more or

less frequently than annually. Consistent

with the current process, the certified IDR

entity could not charge a fee outside the

limits set forth in rulemaking unless the

certified IDR entity or IDR entity seeking certification receives advance written

approval from the Secretary to charge a

fixed fee beyond the upper or lower limits. Finally, the Departments propose that

the certified IDR entity or IDR entity

seeking certification may seek advance

written approval from the Departments to

update its fees more frequently than once

annually.

The Departments propose that for disputes initiated on or after the later of the

effective date of these rules or January

1, 2024, certified IDR entities would be

permitted to charge a fixed certified IDR

entity fee for single determinations within

the range of $200 to $840. This fee range

represents a 20 percent increase to the

upper limit from the 2023 single determination fee range.73 The Departments

anticipate that the proposed range for single determinations would only minimally

impact the fixed fees selected by certified

IDR entities. This is because the process

of arbitrating single determinations should

remain relatively predictable in 2024, as

these disputes have not been impacted by

the TMA IV decision. The Departments

expect that certified IDR entities would

continue to price their single determination fees competitively despite the proposed increase in range. Nonetheless,

the Departments are of the view that an

increase to the upper limit of the range is

necessary to allow certified IDR entities

flexibility to set their fees in alignment

with their operating costs.

The Departments propose that for disputes initiated on or after the later of the

effective date of these proposed rules, or

January 1, 2024, certified IDR entities

would be permitted to charge a fixed certified IDR entity fee for batched determinations within the range of $268 to $1,173,

unless a fee not within that range is

approved by the Departments pursuant to

paragraphs 26 CFR 54.9816-8T(e)(2)(vii)

(A) and (B), 29 CFR 2590.716-8(e)(2)

(vii)(A) and (B), and 45 CFR 149.510(e)

(2)(vii)(A) and (B). This fee range represents a 25 percent increase to the upper

limit from the 2023 batched determination

fee range.74 The Departments propose to

continue to use a tiered fee structure based

on the number of line items within the

batch.75 Under this proposed rule, the certified IDR entities would be permitted to

charge a fixed tiered fee within the range

of $75 to $250 for every additional 25 line

items within a batched dispute beginning

with the 26th line item. A certified IDR

entity’s batched determination fee would

be applied to all batched disputes that

have between 2 and 25 line items. For

batched disputes with more than 25 line

items, the certified IDR entity fee would

be able to increase the base amount for

every additional 25 line items by a fixed

value between $75 and $250, as determined by the certified IDR entity. Unlike

the fixed certified IDR entity fee for single and batched determinations, certified

IDR entities would not be able to seek

approval to charge a fee outside of the

tiered fee range for batched determinations. It is the Departments’ view that the

ability to seek approval to charge a fee

outside of the fixed certified IDR entity

batched fee range is sufficiently flexible to

address any potential cost concerns. This

is because the certified IDR entities only

need the ability to set a fee outside one of

the two batched ranges’ upper and lower

Beginning January 1, 2023, certified IDR entities are permitted to charge a certified IDR entity fee for single determinations within the range of $200–$700. See Centers for Medicare &

Medicaid Services (October 31, 2022). Calendar Year 2023 Fee Guidance for the Federal Independent Dispute Resolution Process under the No Surprises Act. https://www.cms.gov/cciio/

resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.

Beginning January 1, 2023, certified IDR entities are permitted to charge a certified IDR entity fee for batched determinations within a range of $268–$938. See Centers for Medicare &

Medicaid Services (October 31, 2022). Calendar Year 2023 Fee Guidance for the Federal Independent Dispute Resolution Process under the No Surprises Act. https://www.cms.gov/cciio/

resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.

This was first proposed in the Calendar Year 2023 Fee Guidance for the Federal Independent Dispute Resolution Process under the No Surprises Act and implemented for all disputes initiated as of January 1, 2023. See Centers for Medicare & Medicaid Services (October 31, 2022). Calendar Year 2023 Fee Guidance for the Federal Independent Dispute Resolution Process

under the No Surprises Act. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.

Bulletin No. 2023–47

1269

November 20, 2023

limits to set their overall batched fee in

a manner that allows them to cover their

expenses. Further, for batched determinations, the fee range would not restrict the

application of the additional fixed tiered

fee for batched disputes. For example, if

a certified IDR entity had, in 2024, set

its batched determination fee at $1,000

(which would be within the fee range of

$268 to $1,173) and its tiered fee at $200

(which would be within the tiered fee

range of $75 to $250) for each additional

increment of 25 line items, and were to

be selected for a batched determination

with 53 line items (which corresponds

to 2 increments of 25 line items within

the tiered fee structure plus the batched

determination fee) it would be permitted

to charge $1,400 ($1,000 + ($200 x 2)) as

its batched determination fee in calendar

year 2024.

Further, the Departments propose that

the batched determination fee would continue to be based on the number of line

items included in the initiating party’s

initial submission of the batched dispute

to the Federal IDR process. This would

account for the time and effort required of

certified IDR entities in determining eligibility for all line items within a batched

dispute such that they can ultimately make

a payment determination. These fee ranges

would apply until another set of fee ranges

were proposed and finalized through subsequent notice and comment rulemaking.

If a certified IDR entity wishes to

charge a fee outside either of these proposed ranges, it would continue to follow the existing process for requesting

written approval from the Departments to

do so outlined in 26 CFR 54.9816-8T(e)

(2)(vii)(A) and (B), 29 CFR 2590.7168(e)(2)(vii)(A) and (B), and 45 CFR

149.510(e)(2)(vii)(A) and (B), which the

Departments do not propose to change in

this rulemaking.

During calendar year 2023, certified

IDR entities continue to incur high administrative costs due to the volume of disputes and the complexity in determining

eligibility, as described in the December

2022 guidance.76 These proposed ranges

reflect the significant administrative burden, ongoing eligibility determination

challenges,77 and the Departments’ desire

to allow more flexibility for certified

IDR entities to determine a fee that best

reflects their operating costs. Given the

wide variability of certified IDR entities’

operations, structures, staffing patterns,

and expenses, it is the Departments’ position that the ranges should not overly

restrict the certified IDR entities’ ability to set their fees commensurate with

their costs. Instead, broad ranges that

allow certified IDR entities flexibility

to set their fees in accordance with their

own circumstances would allow them

to remain financially viable and encourage their continued participation in the

Federal IDR process. The Departments

acknowledge that broadening the certified

IDR entity fee ranges could have some

impact on the cost to parties to engage

in the Federal IDR process (discussed in

section IV.D.2. of this preamble) which

could implicate access to the Federal IDR

process. However, access to the Federal

IDR process is dependent on certified IDR

entities’ voluntary participation in that

process. Voluntary participation by certified IDR entities is only possible if they

are able to set their fees within ranges necessary to cover their operating expenses.

If the Departments were to set fee ranges

that could not support the certified IDR

entities’ financial viability and certified

IDR entities declined to participate in the

Federal IDR process altogether, the goal

of access would be impaired. 78 Therefore,

the Departments have endeavored to

judiciously balance access concerns with

certified IDR entities’ interests and seek

comment on the balance proposed. In setting the certified IDR entity ranges for disputes initiated on or after the later of the

effective date of these rules or on January

1, 2024, the Departments considered:

• The anticipated time and resources

needed for certified IDR entities to

make payment determinations meeting

the requirements of the statute, rules,

and guidance ;

• The anticipated time and resources

needed for data reporting;

• The anticipated time and resources

needed for complying with audit

requirements;

• The anticipated volume of Federal IDR

initiations and payment determination

quality assessments;

• The anticipated volume of Federal IDR

initiations ineligible for the Federal

IDR process; and

• The level of complexity in determining

the eligibility of items and services for

the Federal IDR process.

After reviewing these considerations,

the Departments are of the opinion that a

20 percent increase in the upper limit of

the certified IDR entity fee range for single determinations (from $200 to $840),

would provide certified IDR entities an

appropriate amount of flexibility in setting

a fixed fee for single determinations, taking into account the anticipated increase in

operational cost. The Departments relied

on these same considerations to develop

the proposed 25 percent increase in the

upper limit of the certified IDR entity

fee range for batched determinations, but

also took into account the TMA IV opinion and order when proposing the range

for batched determinations and the associated tiered fee based on the number of

line items. In particular, the Departments

have considered the impact of the TMA

IV opinion and order on the anticipated

See Centers for Medicare & Medicaid Services (December 23, 2022). Amendment to the Calendar Year 2023 Fee Guidance for the Federal Independent Dispute Resolution Process under

the No Surprises Act: Change in Administrative Fee. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/amended-cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.

Between April 15, 2022 and March 31, 2023, disputing parties initiated 334,828 disputes through the Federal IDR portal. During that time, non-initiating parties challenged the eligibility of

122,781 disputes. Even if the non-initiating party does not challenge eligibility of the dispute, the certified IDR entity must review the dispute and confirm that it is eligible before the dispute

can proceed in the Federal IDR process. These reviews involve complex eligibility determinations that require certified IDR entities to expend considerable time and resources. Eligibility

challenges are described in the following documents: Centers for Medicare & Medicaid Services (August 19, 2022). Federal Independent Dispute Resolution Process Status Update. https://

www.cms.gov/files/document/federal-idr-process-status-update-august-2022.pdf and Centers for Medicare & Medicaid Services (April 27, 2023). Federal Independent Dispute Resolution Status Update. https://www.cms.gov/files/document/federal-idr-processstatus-update-april-2023.pdf.

Indeed, during the early implementation of the Federal IDR process, some certified IDR entities did temporarily halt their operations before the Departments provided additional batching

guidance in August 2022, see: U.S. Department of Health and Human Services, U.S. Department of Labor, and U.S. Department of the Treasury (August 2022). Technical Assistance for

Certified Independent Dispute Resolution Entities. https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/Technical-Assistance-IDR-Entities-August-2022.pdf.

November 20, 2023

1270

Bulletin No. 2023–47

complexity of batched determinations to

inform the proposed increased base range

of $268 to $1,173 and proposed tiered fee

range of $75 to $250 based on the number

of line items in a batched dispute. Section

9816(c)(3)(A) of the Code,79 section

716(c)(3)(A) of the ERISA,80 and section

2799A–1(c)(3)(A) of the PHS Act81 direct

the Departments to specify criteria under

which multiple qualified IDR items and

services are permitted to be considered

jointly as part of a single determination

by a certified IDR entity for purposes of

encouraging the efficiency (including minimizing costs) of the Federal IDR process.

These sections further require that items

and services may be considered as part of

a batched determination only if the items

and services are furnished by the same

provider or facility; payment for the items

and services are made by the same group

health plan or health insurance issuer;

such items and services are related to the

treatment of a similar condition; and the

items and services were furnished during

the 30-day period following the date on

which the first item or service included in

the batched determination was furnished,

or during an alternative period as determined by the Departments, for use in limited situations, such as by the consent of

the parties or in the case of low-volume

items and services, to encourage procedural efficiency and minimize health plan

and provider administrative costs.

Since the TMA IV opinion and order

vacated 26 CFR 54.9816-8T(c)(3)(i)(C),

29 CFR 2590.716-8(c)(3)(i)(C), and 45

CFR 149.510(c)(3)(i)(C), which established standards for determining when

multiple items or services relate to “the

treatment of a similar condition” for the

purpose of batched disputes,82 the certified

IDR entities may no longer rely on the regulatory guidance provided to assist certified IDR entities when reviewing batched

disputes. Certified IDR entities must now

only rely upon statutory language when

determining whether multiple items or

services are related to the treatment of a

similar condition and are therefore appropriate to batch.

As explained in the preamble to the

October 2021 interim final rules, the

Departments originally adopted the batching standards in those rules to avoid combinations of unrelated claims of 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 further

intended to reduce redundant IDR proceedings and streamline the certified IDR

entities’ decision-making processes. The

Departments anticipate that the change

in batching parameters introduced by the

vacatur of 26 CFR 54.9816-8T(c)(3)(i)

(C), 29 CFR 2590.716-8(c)(3)(i)(C), and

45 CFR 149.510(c)(3)(i)(C) will make

certified IDR entities’ responsibilities

and processes for eligibility and payment

determinations under the Federal IDR

process more complex and less certain.

This unpredictability increases the systemic burden for certified IDR entities in

the administration of their duties. In addition, the vacatur of 26 CFR 54.9816-8T(c)

(3)(i)(C), 29 CFR 2590.716-8(c)(3)(i)(C),

and 45 CFR 149.510(c)(3)(i)(C) will also

likely increase the number of items or services batched. Certified IDR entities have

indicated to the Departments that making

determinations on large batches of dissimilar items and services is particularly

complex and burdensome. Based on certified IDR entities’ experiences during the

early stages of implementing the Federal

IDR process, prior to the Departments

having provided guidance regarding the

batching parameters in August 2022,83

the Departments observed that confusion related to the batching standards

for the same or similar items or services

contributed to increased complexity in

determining eligibility, which added time

and cost for certified IDR entities and

contributed to processing delays.84 The

Departments anticipate that the changes

to batching standards will require certified

IDR entities to update their operations,

processes, and systems, demand greater

staff resources, and increase the time

needed to render eligibility determinations, including determinations of whether

items or services may be submitted as a

batch. Therefore, the proposal to increase

the fee range for batched determinations

and apply a tiered fee for batched disputes

based on the number of line items would

allow certified IDR entities to be appropriately compensated and ensure that Federal

IDR process costs are clear to parties in

advance of initiating the Federal IDR

process.

In finalizing the fee amounts, the

Departments intend to take into account

any updated data or assumptions as

applied to the factors considered in this

preamble to set the fee ranges.

The Departments do not propose to

change the process for certified IDR entities to set their fees.85 Certified IDR entities will continue to be permitted to set

their fees within the ranges proposed in

these proposed rules, if finalized. Under

these proposed rules, a certified IDR entity

must receive the Departments’ advance

written approval to modify its fixed fees

more than once annually. If requesting to

set its fee more than once annually, the

certified IDR entity must submit to the

Departments for approval: (1) the fixed

fee that the certified IDR entity is seeking

to charge; (2) a description that reasonably

explains the circumstances that require a

change to its fee; and (3) a detailed description that reasonably explains how the

change to its fee will be used to mitigate

the effects of these circumstances. The

Departments would use their discretion

to determine if the explanations included

in the request demonstrate that the change

would ensure the certified IDR entity’s

financial viability and would not impose

on parties an undue barrier to accessing

the Federal IDR process. It is appropriate

to permit certified IDR entities to change

their fees more than once annually, with

26 U.S.C. 9816(c)(3)(A).

42 U.S.C. 300gg–111(c)(3)(A).

See Memorandum Opinion and Order, Tex. Med. Ass’n. v. U.S. Dep’t of Health & Hum. Servs, No. 6:23-cv-00059-JDK (E.D. Tex. August 3, 2023). https://ecf.txed.uscourts.gov/

doc1/175113317945.

See U.S. Department of Health and Human Services, U.S. Department of Labor, and U.S. Department of the Treasury (August 2022). Technical Assistance for Certified Independent Dispute

Resolution Entities. https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/Technical-Assistance-IDR-Entities-August-2022.pdf.

Id.

45 CFR 149.510(e)(2)(vii).

Bulletin No. 2023–47

1271

November 20, 2023

advance approval from the Departments,

as some certified IDR entities may adopt

more efficiencies throughout the year that

would allow them to charge a lower fee,

or if conditions of the Federal IDR process fluctuate throughout the year, some

certified IDR entities may need to increase

their fees to cover operating expenses.

The Departments seek comment on

these proposals, including the proposed

fee ranges themselves. The Departments

solicit comment on whether in future years

they should apply an inflationary adjustment consideration, such as the CPI-U,

to the considerations used to develop the

certified IDR entity fee ranges each year

and set forth the adjusted fee amount in

guidance, rather than notice and comment

rulemaking. The Departments also seek

comment on whether certified IDR entities should be allowed to set their fees

based on a structure other than a fixed fee

range for single disputes and tiered fees

for batched disputes within the ranges

proposed in these rules. Specifically, the

Departments seek comment on whether

certified IDR entities should have flexibility to set a per line item fee or a per unique

service code fee. The Departments have

considered that allowing a per line item

fee or a per unique service code fee could

better address the concern of unpredictable

batching practices imposing high burdens

on certified IDR entities. However, the

Departments acknowledge that these pricing structures for batching could decrease

the accessibility of the Federal IDR process for parties, particularly small providers. In addition, the Departments seek

comment on the proposed number of line

items in each additional batched tier. The

Departments seek comment on whether

the tiers should be set at 10 line items,

50 line items, or a different number than

the proposed tiered increments of 25 line

items. The Departments acknowledge the

need to strike the correct balance between

the line item increment and the amount of

resources expended by the certified IDR

entities to review those line items. The

Departments have considered if increments of 25 line items or higher might

impose too great a burden on the certified

IDR entities so as not to be commensurate

with the proposed tiered fee range available to them. However, the Departments

also acknowledge that setting the line item

November 20, 2023

increments lower than 25 line items would

further impact the cost to parties of submitting a dispute, and that the proposed

tiered fee range of $75 to $250 may not

be appropriate at smaller line item increments. The Departments seek comment on

whether the tiered fee for batched disputes

should be set at a percentage of the certified IDR entity’s batched determination

fee, similar to how the tiering for the 2023

calendar year were implemented, rather

than a dollar value range. The Departments

also seek comment on whether to provide

a fixed fee that all certified IDR entities

must charge beyond the proposed 25 line

items per additional 25 line items rather

than permitting a range for certified IDR

entities to choose from. More specifically, the Departments seek comment on

whether certified IDR entities should be

permitted to set their batched determination fee between $268 and $1,173 and

then be permitted to charge only an additional fixed dollar amount (for example,

$125, $150, $200, etc.) per additional

25 line items. The Departments seek

comment on the appropriateness of setting a fixed dollar tiered fee structure for

batched disputes, since this could impact

the certified IDR entities’ operational

flexibility, and would limit their ability to

competitively price their fees. However,

the Departments are considering whether

establishing a fixed dollar tiered fee might

mitigate the risk of one or a few certified

IDR entities pricing their tiered fee for

batched disputes so low that they become

inundated with large batches and thus provide greater consistency across certified

IDR entities. The Departments are considering if this alternate approach would provide more consistency regarding the fees

charged by different certified IDR entities

and avoid potentially overburdening IDR

entities that select a low tiered fee for

batched disputes.

III. Severability

In the event that any portion of these

proposed rules, if finalized as proposed, is

declared invalid, the Departments intend

that the various aspects of the administrative fee proposals and certified IDR entity

fee proposals, as finalized, be severable.

For example, if a court were to find unlawful all of the administrative fee proposals,

1272

the Departments would still intend for

the certified IDR entity fee proposals to

stand, and vice versa. As another example, if a court were to find unlawful the

proposals to establish both the administrative fee and the certified IDR entity fee

ranges more or less frequently than annually, the Departments would still intend

for the administrative fee amount and

certified IDR entity fee ranges to be (1)

established through notice and comment

rulemaking and (2) established in the

amount and ranges as proposed in these

proposed rules. Likewise, if a court were

to find unlawful the proposed administrative fee amount or methodology or the

certified IDR entity fee ranges or considerations used to determine the fee ranges

as proposed in these proposed rules, the

Departments would still intend for the

administrative fee amount and certified

IDR entity ranges to be (1) established

through notice and comment rulemaking

and (2) established more or less frequently

than annually.

Thus, the Departments propose at

new paragraph 26 CFR 54.9816-8(d)(3)

(i), 29 CFR 2590.716-8(d)(3)(i), and 45

CFR 149.510(d)(3)(i) that any provision

of paragraph (d) or paragraphs (e)(2)(vii)

through (e)(2)(ix) held to be invalid or

unenforceable as applied to any person or

circumstance shall be construed so as to

continue to give the maximum effect to

the provision permitted by law, including

as applied to persons not similarly situated

or to dissimilar circumstances, unless such

holding is that the provision of these paragraphs is invalid and unenforceable in all

circumstances, in which event the provision shall be severable from the remainder

of these paragraphs and shall not affect

the remainder thereof. The Departments

further propose at new paragraph 26 CFR

54.9816-8(d)(3)(ii), 29 CFR 2590.7168(d)(3)(ii), and 45 CFR 149.510(d)(3)(ii)

that the provisions in paragraphs (d) and

(e)(2)(vii) through (ix) are intended to be

severable from each other.

The Departments are of the view that

each of the proposals for the administrative fee amount and the certified IDR

entity fee ranges would still function sensibly even if one or more of the proposals in these proposed rules, as finalized,

were found unlawful. For example, the

proposals to establish the administrative

Bulletin No. 2023–47

fee amount and certified IDR entity fee

ranges in notice and comment rulemaking

would not depend on either the lawfulness

of the methodology used to determine the

administrative fee amount or the lawfulness of the considerations used in determining the certified IDR entity fee ranges,

or whether both would be established on

an annual basis or more or less frequently

than annually. The proposal to use notice

and comment rulemaking to establish

the fees specifies only the method the

Departments would use and does not

determine how frequently the fees would

be established or the methodology for the

administrative fee amount or the considerations used to determine the certified IDR

entity fee ranges.

The Departments seek comment on

this approach.

IV. Economic Impact and Paperwork

Burden

A. Summary – Departments of Health and

Human Services and Labor

These proposed rules would establish

the administrative fee amount and the certified IDR entity fee ranges in notice and

comment rulemaking, as well as propose

the methodology for setting both fees.

The Departments have examined

the effects of these proposed rules as

required by Executive Order 13563 (76

FR 3821, January 21, 2011, Improving

Regulation and Regulatory Review);

Executive Order 12866 (58 FR 51735,

October 4, 1993, Regulatory Planning and

Review); Executive Order 14094 entitled

“Modernizing Regulatory Review” (April

6, 2023); the Regulatory Flexibility Act

(Pub. L. 96–354, enacted September 19,

1980, Pub. L. 96–354); section 1102(b)

of the Social Security Act (42 U.S.C.

1102(b)); section 202 of the Unfunded

Mandates Reform Act of 1995 (March

22, 1995, Pub. L. 104–4); and Executive

Order 13132 (64 FR 43255, August 10,

1999, Federalism).

Bulletin No. 2023–47

B. Executive Orders 12866, 13563, and

14094 – Departments of Health and

Human Services and Labor

Executive Orders 12866, 13563, and

14094 direct Federal agencies to assess

all costs and benefits of available regulatory alternatives and if regulation is necessary, to select regulatory approaches

that maximize net benefits (including

potential economic, environmental, public health and safety effects, distributive

impacts, and equity). Executive Order

14094 entitled “Modernizing Regulatory

Review” (hereinafter, the Modernizing

E.O.) amends section 3(f)(1) of Executive

Order 12866 (Regulatory Planning and

Review). The amended section 3(f) of

Executive Order 12866 defines a “significant regulatory action” as an action that

is likely to result in a rule: (1) having an

annual effect on the economy of $200 million or more in any 1 year (adjusted every

3 years by the Administrator of OMB’s

Office of Information and Regulatory

Affairs (OIRA) for changes in gross

domestic product), or adversely affect in

a material way the economy, a sector of

the economy, productivity, competition,

jobs, the environment, public health or

safety, or State, local, territorial, or tribal

governments or communities; (2) creating

a serious inconsistency or otherwise interfering with an action taken or planned by

another agency; (3) materially altering the

budgetary impacts of entitlement grants,

user fees, or loan programs or the rights

and obligations of recipients thereof;

or (4) raising legal or policy issues for

which centralized review would meaningfully further the President’s priorities or

the principles set forth in this Executive

Order, as specifically authorized in a

timely manner by the Administrator of

OIRA in each case.

A regulatory impact analysis (RIA)

must be prepared for rules deemed significant under section 3(f)(1) ($200 million

or more in any 1 year). Although based

on the Departments’ estimates, OMB’s

1273

OIRA has determined these rules are

not significant under section 3(f)(1), the

Departments have prepared an RIA that

to the best of their ability presents the

costs and benefits of these rules. OMB has

reviewed these proposed regulations, and

the Departments have provided the following assessment of their impact.

C. Need for Regulatory Action –

Departments of Health and Human

Services and Labor

The Departments propose to amend

the certified IDR entity and administrative

fee provisions of the rules for the Federal

IDR process to set the administrative fee

and the certified IDR entity fee ranges in

notice and comment rulemaking, as well

as propose the methodology for setting the

administrative fee and the considerations

for developing the certified IDR entity fee

ranges. The Departments are of the view

that these proposals would ensure that

disputing and other parties are sufficiently

notified and provided an opportunity to

comment on the fees associated with the

Federal IDR process.

D. Summary of Impacts and Accounting

Table – Departments of Health and

Human Services and Labor

The expected benefits and costs of

these proposed rules are summarized

in Table 1 and discussed in this section

of the preamble. In accordance with

OMB Circular A–4, Table 1 depicts an

accounting statement summarizing the

Departments’ assessment of the benefits, costs, and transfers associated with

this regulatory action. The Departments

are unable to quantify all benefits and

costs of these proposed rules but have

sought, where possible, to describe these

non-quantified impacts. The effects in

Table 1 reflect non-quantified impacts

and estimated direct monetary costs

resulting from the provisions of these

proposed rules.

November 20, 2023

TABLE 1: Accounting Table

Accounting Statement

Benefits:

Non-Quantified:

● Increased interested party transparency as a result of the proposals to establish the administrative fee and certified IDR

entity fee ranges in notice and comment rulemaking, as well as the methodology for calculating the administrative fee amount

and the considerations for developing the certified IDR entity fee ranges.

Costs:

Annualized Monetized

($/Year)

Estimate

$0.09 million

$0.08 million

Year Dollar

2023

Discount Rate

7 percent

3 percent

Period Covered

2023-2027

Quantified:

● Costs to interested parties of $438,543 to review and interpret these rules in 2023.

Transfers:

Estimate

Year Dollar

Discount Rate

Period Covered

Annualized Monetized

$41.69 million

2023

7 percent

2023-2027

($/year)

$42.55 million

2023

3 percent

2023-2027

Quantified:

● Transfers from disputing parties to the Federal government of approximately $45 million annually beginning in 2024 as

a result of the proposal to set the administrative fee amount at $150 per party per dispute initiated on or after the later of the

effective date of these rules or January 1, 2024.

● Transfers from disputing parties to certified IDR entities of approximately $9 million annually beginning in 2024 as a result

of the proposal to set the certified IDR entity fee ranges at $200-$840 for single determinations, $268-$1,173 for batched

determinations, and an additional $75-$250 for each 25 line items in excess of the first 25 line items.

1. Benefits

The primary benefit of this rulemaking

would be to allow the Federal IDR process to function through establishing the

administrative fee amount and certified

IDR entity fee ranges in rulemaking and

establishing the amounts of these fees for

disputes initiated on or after the later of

the effective date of these rules or January

1, 2024. In response to the opinion and

order in TMA IV, these proposed rules are

necessary in order to set the administrative fee amount. The primary non-quantifiable benefit of these proposed rules

would be the continuation of a functioning Federal IDR process, which helps to

protect consumers from surprise medical

bills and helps providers to receive compensation. Additional benefits specific to

each Federal IDR process fee type appear

in the following sections.

a. Administrative Fee Amount and

Methodology

The Departments are proposing to

establish the amount of the administrative

November 20, 2023

fee in notice and comment rulemaking for

disputes initiated on or after the later of

the effective date of these rules or January

1, 2024, as well as the methodology

for determining the administrative fee.

Utilizing notice and comment rulemaking

would increase transparency of the administrative fee setting process and allow

interested parties to provide feedback to

the Departments prior to the Departments

setting the administrative fee amount.

The Departments seek comment on these

assumptions.

b. Certified IDR Entity Fee Ranges

The Departments are proposing to

establish the certified IDR entity fee

ranges for single and batched determinations, which include a tiered fee range

for batched determinations for disputes

that exceed 25 dispute line items, in

notice and comment rulemaking for disputes initiated on or after the later of the

effective date of these rules or January

1, 2024. Utilizing notice and comment rulemaking to set the appropriate ranges for certified IDR entity fees

1274

would increase transparency for parties

interested in the certified IDR entity

fee ranges and allow interested parties

to identify in advance the impacts of

changing the certified IDR entity fee

ranges. The Departments seek comment

on these assumptions.

2. Costs

a. Administrative Fee Amount and

Methodology

The Departments are proposing to

establish the amount of the administrative

fee in notice and comment rulemaking for

disputes initiated on or after the later of

the effective date of these rules or January

1, 2024, as well as proposing the methodology for setting the administrative fee

amount, in response to the opinion and

order in TMA IV and to ensure that disputing and other parties are sufficiently

notified and provided an opportunity to

comment on the certified IDR entity fee

ranges. The Departments are also proposing the administrative fee amount for disputes initiated on or after the later of the

Bulletin No. 2023–47

effective date of these rules or January 1,

2024, at $150 per party per dispute.

The current administrative fee is $50

per party per dispute.86 Based on Federal

IDR process data from February through

July 2023, as discussed in section II.A.

of this preamble, the Departments estimate that approximately 225,000 disputes

are closed per year. Therefore, if the current administrative fee were to remain

applicable, disputing parties would pay

approximately $22.5 million in administrative fees annually (225,000 disputes x

2 parties per dispute x $50 per party).87

As the Departments are now proposing

an administrative fee of $150 for disputes initiated on or after the later of the

effective date of these rules or January 1,

2024, the Departments estimate that disputing parties would pay approximately

$67.5 million in administrative fees annually beginning in 2024 (225,000 disputes

x 2 parties per dispute x $150 per party),

assuming the number of disputes remains

stable year over year and the administrative fee amount is not subsequently

changed through notice and comment

rulemaking. Therefore, the costs associated with this proposal would be approximately $45 million ($67.5 million if this

proposal is finalized – $22.5 million if the

status quo were to continue).

The Departments seek comment on

these estimates and assumptions.

b. Certified IDR Entity Fee Ranges

The Departments are proposing to set

the certified IDR entity fee ranges for single and batched determinations, with a

tiered fee range for batched determination

for disputes that exceed 25 line items, in

notice and comment rulemaking for disputes initiated on or after January 1, 2024

in response to the opinion and order in

TMA IV and to ensure that disputing and

other parties are sufficiently notified and

provided an opportunity to comment on

the certified IDR entity fee ranges. The

proposed certified IDR entity fee range

for single determinations for disputes initiated on or after the later of effective date

of these rules or January 1, 2024, would

be $200 to $840. The proposed certified

IDR entity fee range for batched determinations for disputes initiated on or after

the later of the effective date of these

rules or January 1, 2024 would be $268

to $1,173. Further, the proposed tiered

fee range for batched determination for

disputes initiated on or after the later of

the effective date of these rules or January

1, 2024 would be $75 to $250. While

the certified IDR entities are responsible for setting their fees for single and

batched determinations, the Departments

acknowledge that the proposed changes to

the fee ranges may impact the cost to participate in the Federal IDR process for the

parties. The Departments anticipate that

the vacatur of batching standards by the

Texas District Court’s opinion and order

in TMA IV could result in initiating parties

submitting single and batched disputes in

proportions similar to those prior to the

issuance of the August 2022 guidance,

which interpreted the standards for batching qualified IDR items or services. Based

on internal data prior to the establishment

of the now vacated batching criteria that

was released in August 2022, approximately 70 percent of disputes were single

disputes and approximately 30 percent

were batched disputes.88 The Departments

anticipate that, as a result of TMA IV,

initiating parties will likely resume the

batching practices they engaged in prior

to issuance of the August 2022 guidance,

such as initiating a higher proportion of

batched disputes and including more items

or services within those batched disputes.

As discussed in section II.A. of this

preamble, the Departments estimate

that approximately 225,000 disputes are

closed annually. Further, the Departments

assume that certified IDR entities collect a

certified IDR entity fee on approximately

135,000 of those 225,000 closed disputes

annually.89 Therefore, for the purposes of

this analysis, the Departments estimate

that certified IDR entities would collect

certified IDR entity fees on approximately

94,500 single disputes and 40,500 batched

disputes closed annually (135,000 x 0.70

and 135,000 x 0.30, respectively). The

Departments acknowledge that each party

must pay a certified IDR entity fee to the

certified IDR entity no later than the time

that party submits its offer. However,

because the non-prevailing party is ultimately responsible for the full certified

IDR entity fee, which is retained by the

certified IDR entity for the IDR services

it performed, it is the Departments’ position that providing a per-dispute calculation reasonably captures the overall cost

of the dispute without implicating false

precision on the amount of certified IDR

fee costs that initiating and non-initiating

parties ultimately may incur.

To develop a reasonable estimate for

the certified IDR entity fee amount for

both single and batched disputes, the

Departments assume that the certified IDR

entities would set single determination

fixed fees approximate to the median value

of the proposed fee range and would set

batched determination fixed fees approximate to the 75th quartile of the proposed

fee range.90 Therefore, for the purposes

of this analysis, the Departments estimate

that the average single determination fixed

As a result of the opinion and order in TMA IV, which vacated the portion of the December 2022 guidance that increased the administrative fee to $350 per party per dispute for disputes

initiated during calendar year 2023, the administrative fee amount reverted to the administrative fee amount established in the October 2022 guidance. See Centers for Medicare & Medicaid

Services (August 11, 2023). Federal Independent Dispute Resolution (IDR) Process Administrative Fee FAQs. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/

no-surprises-act-independent-dispute-resolution-administrative-fee-frequently-asked-questions.pdf. Also see Centers for Medicare & Medicaid Services (October 31, 2022). Calendar

Year 2023 Fee Guidance for the Federal Independent Dispute Resolution Process under the No Surprises Act. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/

cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.

The numbers in this analysis assume that all parties pay the requisite administrative fee in all closed disputes.

The Departments estimate that currently approximately 80 percent of disputes are single disputes and 20 percent of disputes are batched disputes.

The Departments use the number of closed disputes for this analysis, as the certified IDR entity fee is due from the parties at the time the parties submit their offers, in accordance with 26

CFR 54.9816-8T(d)(1)(ii), 29 CFR 2590.716-8(d)(1)(ii), and 45 CFR 149.510(d)(1)(ii). Therefore, using the number of initiated disputes for this analysis would be inappropriate as not all

initiated disputes proceed to the offer submission stage if, for example, they are determined to be ineligible for the Federal IDR process.

Currently, the median of the calendar year 2023 certified IDR entity fees is $549 for single determinations and $770 for batched determinations, which are approximately the upper quartiles

of the 2023 certified IDR entity fee ranges for single determinations ($200-$700) and batched determinations ($268-$938). The Departments anticipate that, due to the uncertainty around

batching practices as a result of the TMA IV opinion and order, the certified IDR entities will likely choose to increase their batched determination fee. Therefore, using the 75th percentile of

the proposed fee range to calculate the cost of batched determinations provides a reasonable approximation of the expected increase.

Bulletin No. 2023–47

1275

November 20, 2023

fee (range $200–$840) would be approximately $520, and that the average batched

determination fixed fee (range $268–

$1,173) would be approximately $947. At

an estimated cost of $520 per single determination for approximately 94,500 single

determinations annually, the Departments

estimate that single determinations would

cost disputing parties approximately

$49,140,000 annually ($520 x 94,500).

At an estimated cost of $947 per batched

determination for approximately 40,500

batched determinations annually, the

Departments estimate that batched determinations would cost disputing parties

approximately $38,353,500 annually

($947 x 40,500).

Further, the Departments estimate that

using the proposed tiered fee range for

batched determinations, certified IDR

entities would set and apply a fixed fee

approximate to the median of the proposed

range ($75–$250) for batched determinations based on the number of dispute line

items. The Departments estimate that certified IDR entities would set their tiered

fee at $163 on average. The Departments

acknowledge the uncertainty surrounding

the number of line items that may be submitted in batched disputes due to the TMA

IV opinion. However, to produce an estimate, and for the purposes of this analysis,

the Departments estimate that a subset of

approximately 4,455 batched determinations would potentially be subject to at least

2 applications of the tiered fee ($163 x 2

= $326).91 As such, the Departments estimate that this subset of approximately

4,455 batched determinations exceeding

25 line items would cost disputing parties

approximately $1,452,330 annually ($326

x 4,455). In total, assuming the number of

disputes remains stable year over year, the

Departments estimate the parties would

pay approximately $89 million in certified

IDR entity fees annually if these proposals

are finalized as proposed ($49,140,000 for

single determinations + $38,353,500 for

batched determinations + $1,452,330 for

the subset of batched determinations subject to the tiered fee).

The calendar year 2023 certified IDR

entity fee ranges for single determinations

and batched determinations are $200–$700

and $268–$938, respectively. Certified

IDR entities currently charge a median

fixed fee of $549 for single determinations

and $770 for batched determinations in

2023. As such, for approximately 108,000

single determinations and 24,840 batched

determinations annually,92 if current certified IDR entity fixed fees remained

applicable, the Departments estimate that

disputing parties would pay approximately

$59,292,000 for single determinations

($549 x 108,000) and $19,126,800 for

batched determinations ($770 x 24,840).

Current guidance permits certified IDR

entities to charge a batching percentage

on batched determinations based on the

number of dispute line items.93 For the

purposes of this analysis, the Departments

assume that a subset of approximately 8

percent of batched determinations potentially subject to the batched percentages

would at least receive a 120 percent

increase from the median batched determination fixed fee ($770 x 1.20). As such,

the Departments estimate that disputing

parties would pay approximately $2 million for this subset of batched determinations potentially subject to a batching

percentage (2,160 x $924), resulting in a

total cost of approximately $80 million

under the current calendar year 2023 certified IDR entity fee structure ($59,292,000

for single determinations + $19,126,800

for batched determinations + $2 million

for the subset of batched determinations

subject to the tiered fee). Therefore, taking into account the current costs to the

parties associated with the current certified IDR entity fee structure, the total

costs to disputing parties associated with

this proposal is approximately $9 million

($89 million if finalized as proposed - $80

million if the status quo fee ranges were

to continue).

The Departments seek comments on

these estimates and assumptions.

3. Uncertainties

It is unclear whether the Federal IDR

process would experience the same operating conditions, such as the number of

disputes initiated, future policy changes

finalized after future notice and comment

rulemaking, and increased or decreased

costs by the Departments to carry out the

Federal IDR process. Due to the need to

take point-in-time estimates of volume and

expenditures for the purposes of developing the analyses in these rules, there is

inherent uncertainty in the estimates in

these analyses as the data are constantly

changing. It is difficult to project the

impact on the administrative fee amount

charged to the parties if the Federal IDR

process landscape changes. Although the

Departments have analyzed the Federal

IDR process data available to inform their

projections, it is uncertain whether the

trends in this data will remain applicable. The Federal IDR process is still in an

early phase of implementation and has not

yet achieved the stabilization that would

likely occur with long-term uptake of the

process. Initially, the Departments estimated that approximately 22,000 disputes

would be submitted to the process each

year;94 uptake of the process, however,

The Departments estimate that approximately 11 percent of batched disputes submitted prior to the establishment of the batching criteria released in August 2022 exceeded 25 dispute line

items.

The Departments estimate that 80 percent of disputes are single disputes and 20 percent are batched disputes (135,000 x 0.80 and 135,000 x 0.20, respectively). For the purpose of this

analysis, the Departments estimate that a subset of approximately 8 percent, or 2,160 batched determinations would be subject to a batching percentage (27,000 x 0.08).

Without the need to seek further approval, to account for the differential in the workload of batched determinations, a certified IDR entity may charge the following percentage of its

approved certified IDR entity batched determination fee (“batching percentage”) for batched determinations, which are based on the number of line items initially submitted in the batch:

●

2-20 line items: 100 percent of the approved batched determination fee;

●

21-50 line items: 110 percent of the approved batched determination fee;

●

51-80 line items: 120 percent of the approved batched determination fee; and

●

81 line items or more: 130 percent of the approved batched determination fee.

See Centers for Medicare & Medicaid Services (October 31, 2022). Calendar Year 2023 Fee Guidance for the Federal Independent Dispute Resolution Process under the No Surprises Act.

https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.

In the regulatory impact analysis of the October 2021 interim final rules, the Departments estimated that 17,333 disputes involving non-air ambulance services and 4,899 disputes involving

air ambulance services would be submitted to the Federal IDR process during the first year of implementation, totaling 22,232 anticipated disputes.

November 20, 2023

1276

Bulletin No. 2023–47

rapidly outpaced that estimate, as dispute initiations have grown exponentially

since implementation, and analysis has

revealed an estimated number closer to

340,000 annual initiated disputes is currently more accurate. At the same time,

the Departments do not know what impact

changes to the batching policy as a result

of the Texas District Court’s opinion and

order in TMA IV will have on the number

of disputes being initiated and the time

that it will take certified IDR entities to

close those disputes.

burden to review these proposed rules

will be approximately 3,360 hours (2,100

reviewers x 1.6 hours per reviewer),

with an associated cost of approximately

$438,543 (2,100 reviewers x $208.83 per

reviewer).

The Departments welcome comments

on this approach to estimating the total

burden and cost for interested parties to

read and interpret these proposed rules.

the Departments are of the view that the

increased transparency and opportunity

for interested parties to provide feedback

on the administrative fee methodology

and amount would outweigh the potential

concern that the administrative fee might

be artificially inflated by the need to make

conservative estimates to set the administrative fee amount further in advance

through notice and comment rulemaking.

E. Regulatory Alternatives – Departments

of Health and Human Services and Labor

4. Regulatory Review Cost Estimation

In developing these proposed rules, the

Departments considered various alternative approaches.

2. Certified IDR Entity Fee Ranges (26

CFR 54.9816-8(e)(2), 29 CFR 2590.7168(e)(2), and 45 CFR 149.510(e)(2))

If regulations impose administrative

costs on entities, such as the time needed

to read and interpret rules, regulatory

agencies should estimate the total cost

associated with regulatory review. Based

on comments received for the July 2021

interim final rules and October 2021

interim final rules, the Departments estimate that more than 2,100 entities will

review these proposed rules, including

1,500 issuers, 205 third party administrators (TPAs), and at least 395 other interested parties (for example, State insurance

departments, State legislatures, industry

associations, advocacy organizations, and

providers and provider organizations).

The Departments acknowledge that this

assumption may understate or overstate

the number of entities that will review

these proposed rules.

Using the median hourly wage rate

from the Bureau of Labor Statistics for

a Lawyer (Code 23-1011) to account for

average labor costs (including a 100 percent increase for the cost of fringe benefits

and other indirect costs), the Departments

estimate that the cost of reviewing these

proposed rules would be $130.52 per

hour.95 The Departments estimate, based

on an estimated rule length of approximately 22,000 words and an average

reading speed of 200 to 250 words per

minute, that it would take each reviewing

entity approximately 1.6 hours to review

these proposed rules, with an associated cost of approximately $208.83 (1.6

hours x $130.52 per hour). Therefore,

the Departments estimate that the total

1. Administrative Fee Amount and

Methodology (26 CFR 54.9816-8(d)(2),

29 CFR 2590.716-8(d)(2), and 45 CFR

149.510(d)(2))

In TMA IV, the Texas District Court indicated that notice and comment rulemaking is necessary to set the administrative

fee amount. In light of the Texas District

Court opinion and order, as well as the

Departments’ assessment regarding the

practicability of determining the administrative fee amount through notice and

comment rulemaking, the Departments

are of the view that alternative approaches

would lead to unwarranted uncertainty.

In addition, the Departments are of the

view that providing a description of the

methodology used to calculate the fee

amount and proposing the administrative

fee amount in these proposed rules would

increase transparency for the parties and

provide interested parties the opportunity

to be included in the fee setting process.

The Departments considered that guidance has historically set the administrative fee amount based on concerns that

the requirement to collect fees sufficient

to fund the Federal IDR process, and the

lead time required to set the fee amount

in notice and comment rulemaking, could

constrain the Departments’ responsiveness to program needs and artificially

inflate the administrative fee amount due

to the need to ensure adequate funding of

the process. However, in light of TMA IV,

The Departments considered maintaining the current policy that the allowable ranges for certified IDR entity fees

would be set in guidance yearly instead

of through notice and comment rulemaking. The Departments considered whether

continuing to set the certified IDR entity

fee ranges in guidance would preserve

necessary flexibility for the certified IDR

entities to choose their fees within the

allowable ranges and submit those fees for

approval to the Departments, and would

allow the Departments time to review and

approve each certified IDR entity’s fees

and publish them in advance of the year

to which the fees apply. The Departments

balanced several considerations, including that certified IDR entities are ultimately able to choose their own fee within

the ranges established in guidance by

the Departments, and that setting the fee

ranges through guidance was intended to

create a competitive market among the

certified IDR entities to keep fees affordable, while ensuring that those entities are

able to cover their costs. Setting the allowable ranges for certified IDR entity fees

through notice and comment rulemaking

is appropriate because it would increase

transparency and provide an opportunity

for the Departments to consider comments

from interested parties.

F. Paperwork Reduction Act

These proposed rules are not subject

to the requirements of the Paperwork

Reduction Act of 1995,96 because they do

not contain a collection of information as

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

44 U.S.C. 3501 et seq.

Bulletin No. 2023–47

1277

November 20, 2023

defined in 44 U.S.C. 3502(3). Therefore,

clearance by OMB under the Paperwork

Reduction Act of 1995 is not required.

G. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA)

(5 U.S.C. 601, et seq.) requires agencies

to analyze options for regulatory relief of

small entities and to prepare an initial regulatory flexibility analysis to describe the

impact of these proposed rules on small

entities, unless the head of the agency can

certify that the rule would not have a significant economic impact on a substantial

number of small entities. The RFA generally defines a “small entity” as (1) a proprietary firm meeting the size standards of

the Small Business Administration (SBA),

(2) a not-for-profit organization that is not

dominant in its field, or (3) a small government jurisdiction with a population of

less than 50,000. States and individuals

are not included in the definition of “small

entity.” The Departments use a change

in revenues of more than 3 to 5 percent

as their measure of significant economic

impact on a substantial number of small

entities. For purposes of the RFA, small

entities include small businesses, nonprofit organizations, and small governmental jurisdictions.

The provisions in these proposed rules

would affect plans (or their TPAs),97

health insurance issuers offering group or

individual health insurance coverage, and

providers, facilities, and providers of air

ambulance services.

For purposes of analysis under the

RFA,98 the Departments consider an

employee benefit plan with fewer than

100 participants to be a small entity.99

The basis of this definition is found in

section 104(a)(2) of ERISA,100 which permits the Secretary of Labor to prescribe

simplified annual reports for plans that

cover fewer than 100 participants. Under

section 104(a)(3),101 the Secretary may

also provide for exemptions or simplified annual reporting and disclosure for

welfare benefit plans. Under the authority

of section 104(a)(3),102 the Department

of Labor has previously issued simplified reporting provisions and limited

exemptions from reporting and disclosure

requirements for small plans, including

unfunded or insured welfare plans, which

cover fewer than 100 participants and satisfy certain requirements.103 While some

large employers have small plans, small

plans are generally maintained by small

employers. Thus, the Departments are of

the view that assessing the impact of these

proposed rules on small plans is an appropriate substitute for evaluating the effect

on small entities. The definition of a small

entity considered appropriate for this purpose differs, however, from a definition of

a small business based on size standards

issued by the SBA104 in accordance with

the Small Business Act.105

In 2021, there were 1,500 issuers in the

U.S. health insurance market106 and 205

TPAs.107 Health insurance issuers are generally classified under the North American

Industry Classification System (NAICS)

code 524114 (Direct Health and Medical

Insurance Carriers). According to SBA

size standards,108 entities with average

annual receipts of $47 million or less are

considered small entities for this NAICS

code. The Departments expect that few,

if any, insurance companies underwriting health insurance policies fall below

these size thresholds. Based on data from

Medical Loss Ratio (MLR) annual report

submissions for the 2021 MLR reporting

year, approximately 87 out of 483 issuers

of health insurance coverage nationwide

had total premium revenue of $47 million

or less.109 However, it should be noted that

over 77 percent of these small companies belong to larger holding groups, and

many, if not all, of these small companies,

are likely to have non-health lines of business that would result in their revenues

exceeding $47 million. For the purposes

of this analysis, the Departments assume

8.6 percent, or 128 issuers, and 18 TPAs

are considered small entities.

These proposed rules would also

affect health care providers due to the

proposed requirements related to the certified IDR entity and administrative fees.

The Departments estimate that 140,270

physicians, on average, bill on an out-ofnetwork basis. The number of small physicians is estimated based on the SBA’s

size standards. The size standard applied

for providers is NAICS 62111 (Offices

of Physicians), for which a business with

less than $16 million in receipts is considered to be small. By this standard, the

Departments estimate that 47.2 percent or

66,207 physicians are considered small

under the SBA’s size standards.110 These

proposed rules are also expected to affect

non-physician providers who bill on an

out-of-network basis. The Departments

lack data on the number of non-physician

providers who would be impacted.

The Departments do not have the same

level of data for the air ambulance subsector. In 2020, the total revenue of providers

of air ambulance services was estimated to

be $4.2 billion, with 1,114 air ambulance

The Departments expect that most self-insured group health plans will work with a TPA to meet the requirements.

5 U.S.C. 601, et seq.

The Departments consulted with the Small Business Administration Office of Advocacy in making this determination, as required by 5 U.S.C. 603(c) and 13 CFR 121.903(c) in a memo

dated June 4, 2020.

100

29 U.S.C. 1024(a)(2).

101

29 U.S.C. 1024(a)(3).

102

29 U.S.C. 1024(a)(3).

103

29 CFR 2520.104-20, 2520.104-21, 2520.104-41, 2520.104-46, and 2520.104b-10.

104

13 CFR 121.201 (2011).

105

15 U.S.C. 631 et seq. (2011).

106

Centers for Medicare & Medicaid Services (2022). Medical Loss Ratio Data and System Resources. https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.

107

Non-issuer TPAs based on data derived from the 2016 benefit year reinsurance program contributions.

108

United States Small Business Administration (March 17, 2023). Table of Size Standards. https://www.sba.gov/document/support--table-size-standards.

109

Centers for Medicare & Medicaid Services (2022). Medical Loss Ratio Data and System Resources. https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.

110

Based on data from the NAICS Association for NAICS code 62111, the Departments estimate the percent of businesses within the industry of Offices of Physicians with less than $16 million in annual sales. United States Census Bureau (May 2021). 2017 SUSB Annual Data Tables by Establishment Industry. https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html.

November 20, 2023

1278

Bulletin No. 2023–47

bases.111 This results in an industry average of $3.8 million per air ambulance

base. Accordingly, the Departments are

of the view that most providers of air

ambulance services are likely to be small

entities.

The proposed policies that would result

in an increased burden to small entities are

described below.

The Departments propose to establish the administrative fee amount in

notice and comment rulemaking, and the

Departments propose that the administrative fee amount for disputes initiated

on or after of the effective date of these

rules or on January 1, 2024, would be

$150 per party. The total annual burden

associated with this proposal is $45 million, split evenly between plans and issuers and providers, facilities, and providers

of air ambulance services ($22.5 million

each). For more details, please refer to the

Regulatory Impact Analysis in these proposed rules.

The Departments propose to establish the certified IDR entity fee ranges

in notice and comment rulemaking, and

the Departments propose that the ranges

would be $200–$840 for single determinations and $268–$1,173 for batched

determinations, with a $75–$250 tiered

fee range for disputes that contain more

than 25 line items. The total annual burden associated with this proposal is

approximately $9 million, 30 percent

($2.7 million) for providers, facilities, and

providers of air ambulance services112 and

70 percent ($6.3 million) for plans and

issuers.113 For more details, please refer to

the Regulatory Impact Analysis in these

proposed rules.

To estimate the proportion of the total

costs that would fall on small entities, the

Departments assume that the proportion

of costs is proportional to the industry

receipts. Applying data from the Census

Bureau of receipts by size for each industry, the Departments estimate that small

issuers would incur 0.2 percent of the total

costs incurred by all issuers and small

providers would incur 42.4 percent of the

total cost by all providers.114

For the proposal to set the administrative fee amount at $150 per party for disputes initiated on or after the later of the

effective date of these rules or January 1,

2024, the Departments estimate that the

total annual cost for small providers115

would be $9,540,000.116 This results in

a per-entity cost for small providers of

$144.09.117 The Departments estimate that

the total annual cost for small issuers and

TPAs would be $45,000.118 This results

in a per-entity cost for small issuers and

TPAs of $308.22.119

For the proposal to set the certified IDR

entity fee ranges at $200–$840 for single determinations and $268–$1,173 for

batched determinations, with a $75–$250

tiered fee range for disputes that contain

more than 25 line items, the Departments

estimate that the total annual cost for small

providers120 would be $1,144,800.121 This

results in a per-entity cost for small providers of $17.29.122 The Departments estimate that the total annual cost for small

issuers and TPAs would be $12,600.123

This results in a per-entity cost for small

issuers and TPAs of $86.30.124

Thus, the total estimated annual cost

for small issuers and TPAs is $57,600, and

the total estimated annual cost for small

providers is $10,684,800. The per-entity

annual cost for small issuers and TPAs is

$394.52, and the per-entity annual cost for

small providers is $161.38.

The Departments seek comment on

this analysis and seek information on the

number of small plans (or TPAs), issuers,

or providers that may be affected by the

provisions in these proposed rules.

The number of impacted small health

plans is not significant compared to the

total universe of 1.9 million small health

plans. Assuming that 340,000 disputes

are submitted to the Federal IDR process each year, 18 percent of small health

plans would be impacted.125 The number

of impacted plans and issuers may be

even smaller if some plans and issuers

have multiple disputes that are batched

in the Federal IDR process. By batching

ASPE Office of Health Policy (September 10, 2021). Air Ambulance Use and Surprise Billing. https://aspe.hhs.gov/sites/default/files/2021-09/aspe-air-ambulance-ib-09-10-2021.pdf.

Historically, less than 1 percent of disputes for emergency and non-emergency services have been submitted by group health plans, health insurance issuers, or FEHB carriers. U.S.

Department of Health and Human Services, U.S. Department of Labor, and U.S. Department of Treasury (n.d.) Initial Report on the Federal Independent Dispute Resolution (IDR) Process,

April 15 – September 30, 2022. https://www.cms.gov/files/document/initial-report-idr-april-15-september-30-2022.pdf.

113

Data from the first full year of Federal IDR process operations show that initiating parties prevail in approximately 70 percent of disputes. See Centers for Medicare & Medicaid Services

(April 27, 2023). Federal Independent Dispute Resolution Process – Status Update. Therefore, as the prevailing party’s certified IDR entity fee is refunded per 26 CFR 54.9816-8T(d)(1)(ii),

29 CFR 2590.716-8(d)(1)(ii), and 45 CFR 149.510(d)(1)(ii), initiating parties only pay the certified IDR entity fee for 30 percent of disputes, while non-initiating parties pay for the other 70

percent. https://www.cms.gov/files/document/federal-idr-processstatus-update-april-2023.pdf. Therefore, as the prevailing party’s certified IDR entity fee is refunded per 26 CFR 54.98168T(d)(1)(ii), 29 CFR 2590.716-8(d)(1)(ii), and 45 CFR 149.510(d)(1)(ii), initiating parties only pay the certified IDR entity fee for 30 percent of disputes, while non-initiating parties pay for

the other 70 percent.

114

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

susb/2020-susb-annual.html.

115

Historically, less than 1 percent of disputes for emergency and non-emergency services have been submitted by group health plans, health insurance issuers, or FEHB carriers. U.S.

Department of Health and Human Services, U.S. Department of Labor, and U.S. Department of Treasury (n.d.) Initial Report on the Federal Independent Dispute Resolution (IDR) Process,

April 15 – September 30, 2022. https://www.cms.gov/files/document/initial-report-idr-april-15-september-30-2022.pdf.

116

The total annual cost for small providers is estimated as: $22.5 million x 42.4 percent = $9,540,000.

117

The annual per-entity cost is estimated as: $9,540,000 / 66,207 small providers = $144.09.

118

The total annual cost for small issuers and TPAs is estimated as: $22.5 million x 0.2 percent = $45,000.

119

The annual per-entity cost for small issuers and TPAs is estimated as: $45,000 / (128 issuers + 18 TPAs) = $308.22.

120

Historically, less than 1 percent of disputes for emergency and non-emergency services have been submitted by group health plans, health insurance issuers, or FEHB carriers. U.S.

Department of Health and Human Services, U.S. Department of Labor, and U.S. Department of Treasury (n.d.) Initial Report on the Federal Independent Dispute Resolution (IDR) Process,

April 15 – September 30, 2022. https://www.cms.gov/files/document/initial-report-idr-april-15-september-30-2022.pdf.

121

The total annual cost for small providers is estimated as: $2,700,000 x 42.4 percent = $1,144,800.

122

The annual per-entity cost is estimated as: $1,144,800 / 66,207 small providers = $17.29.

123

The total annual cost for small issuers and TPAs is estimated as: $6,300,000 x 0.2 percent = $12,600.

124

The annual per-entity cost for small issuers and TPAs is estimated as: $12,600 / (128 issuers + 18 TPAs) = $86.30.

125

340,000 claims / 1,927,786 ERISA health plans = 18 percent (Source: 2020 Medical Expenditure Panel Survey-Insurance Component).

111

112

Bulletin No. 2023–47

1279

November 20, 2023

qualified IDR items and services, there

may be a reduction in the per-service cost

of the Federal IDR process, and potentially the aggregate administrative costs,

because the Federal IDR process is likely

to exhibit at least some economies of

scale.126

As its measure of significant economic impact on a substantial number

of small entities, HHS uses a change

in revenue of more than 3 to 5 percent.

The Departments are of the view that

this threshold will not be reached by the

requirements in these proposed rules,

given that the annual per-entity cost of

$413.70 per small issuer/TPA represents

0.02 percent of the average annual

receipts for a small issuer/TPA and the

annual per-entity cost of $165.23 per

small provider represents 0.01 percent

of the average annual receipts for a small

provider.127 Therefore, the Secretary has

certified that these proposed rules will

not have a significant economic impact

on a substantial number of small entities.

In addition, section 1102(b) of the

Paperwork Reduction Act requires

the Departments to prepare a regulatory impact analysis if a rule may have

a significant impact on the operations

of a substantial number of small rural

hospitals. This analysis must conform

to the provisions of section 603 of the

RFA.128 For purposes of section 1102(b)

of the Paperwork Reduction Act, the

Departments define a small rural hospital as a hospital that is located outside

of a metropolitan statistical area and has

fewer than 100 beds. While these proposed rules are not subject to section

1102 of the Paperwork Reduction Act,

the Departments have determined that

these proposed rules will not affect small

rural hospitals. Therefore, the Secretary

has certified that these proposed rules

will not have a significant impact on the

operations of a substantial number of

small rural hospitals.

H. Special Analyses – Department of the

Treasury

Pursuant to the Memorandum

of Agreement, Review of Treasury

Regulations under Executive Order 12866

(June 9, 2023), tax regulatory actions

issued by the IRS are not subject to the

requirements of section 6 of Executive

Order 12866, as amended. Therefore,

a regulatory impact assessment is not

required. Pursuant to section 7805(f) of the

Code,129 these regulations have been submitted to the Chief Counsel for Advocacy

of the Small Business Administration

for comment on their impact on small

business.

I. Unfunded Mandates Reform Act

Section 202 of the Unfunded Mandates

Reform Act of 1995 (UMRA)130 requires

that agencies assess anticipated costs and

benefits and take certain other actions

before issuing a proposed rule or any final

rule for which a general notice of proposed

rulemaking was published that includes

any Federal mandate that may result in

expenditures in any 1 year by State, local,

or tribal governments, in the aggregate, or

by the private sector, of $100 million in

1995 dollars, updated annually for inflation. That threshold is approximately $177

million in 2023. As discussed earlier in the

RIA, plans, issuers, TPAs, and providers,

facilities, and providers of air ambulance

services would incur costs to comply with

the provisions of these proposed rules.

The Departments estimate the combined

impact on State, local, or tribal governments and the private sector would not be

above the threshold.

J. Federalism

Executive Order 13132 outlines the

fundamental principles of federalism.

It requires adherence to specific criteria

by Federal agencies in formulating and

implementing policies that have “substantial direct effects” on the States, the relationship between the national government

and States, or on the distribution of power

and responsibilities among the various

levels of government. Federal agencies

issuing regulations that have these federalism implications must consult with State

and local officials and describe the extent

of their consultation and the nature of the

concerns of State and local officials in the

preamble to these proposed rules.

The Departments do not anticipate that

these proposed rules would have federalism implications or limit the policy-making discretion of the States in compliance

with the requirement of Executive Order

13132.

State and local government health

plans may be subject to the Federal IDR

process where a specified State law or AllPayer Model Agreement does not apply.

The No Surprises Act authorizes States to

enforce the new requirements, including

those related to balance billing, for issuers, providers, facilities, and providers of

air ambulance services, with HHS enforcing only in cases where the State has notified HHS that the State does not have the

authority to enforce or is otherwise not

enforcing, or HHS has made a determination that a State has failed to substantially

enforce the requirements. However, in the

Departments’ view, the federalism implications of these proposed rules are substantially mitigated because some States

have their own process for determining

the total amount payable under a plan or

coverage for out-of-network emergency

services and to out-of-network providers

for patient visits to in-network facilities

for non-emergency services. Where a

State has a specified State law, the State

law, rather than the Federal IDR process,

would apply.

In compliance with the requirement

of Executive Order 13132 that agencies

Fielder, M., Adler, L., Ippolito, B. (March 16, 2021). Recommendations for Implementing the No Surprises Act. U.S.C.-Brookings Schaeffer on Health Policy. https://www.brookings.edu/

blog/usc-brookings-schaeffer-on-health-policy/2021/03/16/recommendations-for-implementing-the-no-surprises-act/.

127

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

susb/2020-susb-annual.html.

128

5 U.S.C. 603.

129

26 U.S.C. 7805(f).

130

2 U.S.C. 1511.

126

November 20, 2023

1280

Bulletin No. 2023–47

examine closely any policies that may

have federalism implications or limit the

policy making discretion of the States, the

Departments have engaged in efforts to

consult with and work cooperatively with

affected States, including participating in

conference calls with and attending conferences of the National Association of

Insurance Commissioners and consulting

with State insurance officials on an individual basis.

While developing these rules, the

Departments attempted to balance the

States’ interests in regulating health insurance issuers with the need to ensure market stability. By doing so, the Departments

complied with the requirements of

Executive Order 13132.

Douglas W. O’Donnell,

Deputy Commissioner for

Services and Enforcement,

Internal Revenue Service

Lisa M. Gomez

Assistant Secretary,

Employee Benefits Security

Administration,

Department of Labor

Xavier Becerra,

Secretary,

Department of Health and

Human Services.

List of Subjects

26 CFR Part 54

Excise taxes, Pensions, Reporting and

recordkeeping requirements.

29 CFR Part 2590

Child support, Employee benefit plans,

Health care, Health insurance, Infants

and children, Maternal and child health,

Penalties, Pensions, Privacy, Reporting

and recordkeeping requirements.

45 CFR Part 149

Administrative practice and procedure,

Health care, Health insurance, Insurance

companies, Penalties, Reporting, and

recordkeeping requirements.

Bulletin No. 2023–47

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

Accordingly, the Department of the

Treasury and the IRS proposes to amend

26 CFR part 54 as follows:

PART 54 – PENSION EXCISE TAXES

1. The authority citation for part 54

is amended by adding an entry for §

54.9816-8 in numerical order to read in

part as follows:

Authority: 26 U.S.C. 7805 * * *

*****

Section 54.9816-8 also issued under 26

U.S.C. 9816.

*****

2. Section 54.9816-8 is amended by

revising paragraphs (a) through (e) and

the headings for paragraphs (f) and (g) to

read as follows:

§ 54.9816-8 Independent dispute

resolution process.

(a) Scope and definitions. For further

guidance, see § 54.9816-8T(a).

(b) Determination of payment amount

through open negotiation and initiation of

the Federal IDR process. For further guidance, see § 54.9816-8T(b).

initiation. For further guidance, see §

54.9816-8T(c).

(d) Costs of IDR process. (1) Certified

IDR entity fee. For further guidance, see

§ 54.9816-8T(d)(1).

(2) Administrative fee. (i) For further

guidance, see § 54.9816-8T(d)(2)(i).

(ii) The administrative fee amount will

be established through notice and comment rulemaking in a manner such that

the total administrative fees paid for a

year are estimated to be equal to the projected amount of expenditures made by

the Secretaries of the Treasury, Labor, and

Health and Human Services for the year in

carrying out the Federal IDR process. For

disputes initiated on or after the later of

the effective date of Federal Independent

Dispute Resolution (IDR) Process

Administrative Fee and Certified IDR

Entity Fee Ranges final rules or January

1281

1, 2024, the administrative fee amount is

$150 per party per dispute and will remain

in effect until changed by subsequent

rulemaking.

(3) Severability. (i) Any provision of

this paragraph (d) or paragraphs (e)(2)

(vii) through (ix) of this section held to

be invalid or unenforceable as applied to

any person or circumstance shall be construed so as to continue to give the maximum effect to the provision permitted by

law, including as applied to persons not

similarly situated or to dissimilar circumstances, unless such holding is that the

provision of these paragraphs is invalid

and unenforceable in all circumstances,

in which event the provision shall be severable from the remainder of these paragraphs and shall not affect the remainder

thereof.

(ii) The provisions in paragraphs (d)

and (e)(2)(vii) through (ix) of this section

are intended to be severable from each

other.

(e) Certification of IDR entity — (1)

In general. For further guidance see §

54.9816-8T(e)(1).

(2) Requirements. (i) through (vi). For

further guidance, see § 54.8616-8T(e)(2)

(i) through (vi).

(vii) Provide, on an annual basis, a

fixed fee for single determinations and

separate fixed fees for batched determinations, as well as additional fixed tiered

fees for batched disputes, if applicable,

within the upper and lower limits for each,

as established by the Secretary in notice

and comment rulemaking. The certified IDR entity fee ranges established by

the Secretary in

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.