Bulletin No. 2021–30

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Bulletin No. 2021–30

July 26, 2021

These synopses are intended only as aids to the reader in

identifying the subject matter covered. They may not be

relied upon as authoritative interpretations.

EMPLOYEE PLANS

INCOME TAX

Notice 2021-38, page 155.

Rev. Proc. 2021-14, page 158.

EXCISE TAX

Rev. Rul. 2021-13, page 152.

Notice 2021-38 provides guidance under § 432(k) of the

Code to sponsors of multiemployer defined benefit pension

plans that are required to reinstate certain previously suspended benefits as a condition of receiving special financial

assistance from the Pension Benefit Guaranty Corporation

under § 9704 of the American Rescue Plan Act of 2021.

The notice also provides guidance on whether make-up payments with respect to previously suspended benefits are eligible to be rolled over to another eligible retirement plan

under § 402(c), and the extent to which any special financial

assistance received by the plan is not taken into account in

determining contributions required under § 431.

REG-107706-21, page 162.

This document sets forth proposed regulations regarding

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

Act. The text of the temporary regulations issued jointly with

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

serves as the text of these proposed regulations.

TD 9951, page 25.

This document, issued jointly with the Department of Health

and Human Services, the Department of Labor, and the Office of Personnel Management, provides initial guidance regarding implementation of the protections against balance

billing provided under the No Surprises Act. The temporary

regulations protect consumers from surprise medical bills

for emergency services, air ambulance services furnished by

nonparticipating providers, and non-emergency services furnished by nonparticipating providers at participating facilities

in certain circumstances.

Finding Lists begin on page ii.

This revenue procedure provides guidance regarding elections and revocations related to § 2303(e) of the Coronavirus

Aid, Relief, and Economic Security Act, Public Law 116-136,

134 Stat. 281 (Mar. 27, 2020), as added by § 281 of the

COVID-related Tax Relief Act of 2020, which was enacted as

Subtitle B of Division N of the Consolidated Appropriations

Act, 2021 (CAA 2021), Public Law 116-260, 134 Stat. 1182

(Dec. 27, 2020). Section 2303(e) of the CARES Act provides

special rules for taxpayers with a net operating loss (NOL) for

any taxable year beginning in 2018, 2019, or 2020, all or a

portion of which consists of a “farming loss,” as defined by §

172(b)(1)(B)(ii) of the Internal Revenue Code.

The revenue ruling explains that: (1) an acid gas removal

unit at an industrial facility is a component of carbon capture

equipment within the meaning of § 1.45Q-2(c); (2) an investor in certain components of carbon capture equipment at

an industrial facility is not required to own every component

of carbon capture equipment within a single process train

at an industrial facility to be the person to whom the section 45Q credit is attributable under § 1.45Q-1(h), but must

own at least one component of carbon capture equipment

in the single process train of carbon capture equipment

at the industrial facility; (3) solely for purposes of section

45Q(a), the original placed-in-service date of a single process train of carbon capture equipment at an industrial facility that includes the existing acid gas removal unit and

new components of carbon capture equipment is the date

that the single process train is placed in a condition or state

of readiness and availability for the capture, processing,

and preparation of carbon oxide for transport for disposal,

injection, or utilization; and (4) the original placed-in-service

date of the single process train for purposes of §§ 167

and 168.

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.

July 26, 2021

Bulletin No. 2021–30

Part I

26 CFR 54.9816-1T through 7T: Preventing Surprise Medical Bills

T.D. 9951

DEPARTMENT OF THE

TREASURY

Internal Revenue Service

26 CFR Part 54

Requirements Related to

Surprise Billing; Part I

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

Security Administration, Department of

Labor; Centers for Medicare & Medicaid

Services, Department of Health and Human Services.

ACTION: Interim final rules with request

for comments.

SUMMARY: This document sets forth

interim final rules implementing certain

provisions of the No Surprises Act, which

was enacted as part of the Consolidated

Appropriations Act, 2021. These interim

final rules amend and add provisions to

existing rules under the Internal Revenue

Code, the Employee Retirement Income

Security Act, the Public Health Service

Act, and the Federal Employees Health

Benefits Act. These interim final rules

implement provisions of the No Surprises

Act that protect participants, beneficiaries, and enrollees in group health plans

and group and individual health insurance coverage from surprise medical bills

when they receive emergency services,

non-emergency services from nonparticipating providers at participating facilities,

and air ambulance services from nonparticipating providers of air ambulance services, under certain circumstances. In this

rulemaking, the Department of Health and

Human Services (HHS), the Department

of Labor (DOL), and the Department of

the Treasury (collectively, the Departments) are issuing interim final rules with

largely parallel provisions that apply to

Bulletin No. 2021–30

group health plans and health insurance

issuers offering group or individual health

insurance coverage. HHS is also issuing

in this rulemaking additional interim final

rules that apply to emergency departments

of hospitals and independent freestanding

emergency departments, health care providers and facilities, and providers of air

ambulance services related to the protections against surprise billing. The Office

of Personnel Management (OPM) is issuing in this rulemaking interim final rules

that specify how certain provisions of the

No Surprises Act apply to health benefits

plans offered by carriers under the Federal

Employees Health Benefits Act (FEHBA).

DATES: Effective date: These regulations

are effective on September 13, 2021.

Applicability date: The regulations are

generally applicable for plan years (in

the individual market, policy years) beginning on or after January 1, 2022. The

HHS-only regulations that apply to health

care providers, facilities, and providers of

air ambulance services are applicable beginning on January 1, 2022. The OPM-only regulations that apply to health benefits

plans are applicable to contract years beginning on or after January 1, 2022.

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

of the addresses provided below, no later

than 5 p.m. on September 7, 2021.

ADDRESSES: Written comments may be

submitted to the addresses specified below. Any comment that is submitted will

be shared among the Departments and

OPM. 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 CMS9909-IFC. Because of staff and resource

limitations, we cannot accept comments

by facsimile (FAX) transmission.

Comments, including mass comment

submissions, must be submitted in one of

the following three ways (please choose

only one of the ways listed):

1. Electronically. You may submit electronic comments on this regulation

at https://www.regulations.gov by

entering the file code in the search

window and then clicking on “Comment”.

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-9909-IFC,

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:

Centers for Medicare & Medicaid

Services,

Department of Health and Human

Services,

Attention: CMS-9909-IFC,

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: Padma Babubhai Shah, Office of Personnel Management, at 202606-4056; Kari DiCecco, Internal Revenue Service, Department of the Treasury,

at 202‑317-5500; Matt Litton or David

Sydlik, Employee Benefits Security Administration, Department of Labor, at

202-693-8335; Lindsey Murtagh, Centers

for Medicare & Medicaid Services, Department of Health and Human Services,

at 301-492-4106.

Customer Service Information: Information from OPM on health benefits

plans offered under the Federal Employ-

July 26, 2021

ees Health Benefits (FEHB) Program can

be found on the OPM website (www.

opm.gov/healthcare-insurance/healthcare/). Individuals interested in obtaining

information from the DOL concerning

employment-based health coverage laws

may call the Employee Benefits Security

Administration (EBSA) Toll-Free Hotline at 1-866-444-EBSA (3272) or visit

the DOL’s website (www.dol.gov/ebsa).

In addition, information from HHS on

private health insurance coverage and

coverage provided by non‑federal governmental group health plans can be found on

the Centers for Medicare & Medicaid Services (CMS) website (www.cms.gov/cciio), and information on health care reform

can be found at www.HealthCare.gov.

SUPPLEMENTARY INFORMATION:

Inspection of Public Comments: Comments received before the close of the

comment period are available for viewing

by the public, including any personally

identifiable or confidential business information that is included in a comment. We

post comments received before the close

of the comment period on the following

website as soon as possible after they

have been received: https://regulations.

gov. Follow the search instructions on that

website to view public comments.

I. Background

A. Patient Protections and Requirements

Related to Emergency Services under

Section 2719A of the Public Health

Service Act

The Patient Protection and Affordable

Care Act (Pub. L. 111–148), was enacted

on March 23, 2010 and the Health Care

and Education Reconciliation Act of

2010, Public Law 111–152, was enacted

on March 30, 2010 (these statutes are collectively known as the “Affordable Care

Act” or “ACA”). The Affordable Care

Act reorganizes, amends, and adds to the

provisions of part A of title XXVII of the

Public Health Service Act (PHS Act) relating to group health plans and health in-

surance issuers in the group and individual markets.1 The Affordable Care Act adds

section 715(a)(1) to the Employee Retirement Income Security Act (ERISA) and

section 9815(a)(1) to the Internal Revenue

Code (the Code) to incorporate the provisions of part A of title XXVII of the PHS

Act into ERISA and the Code, and make

them applicable to group health plans and

health insurance issuers providing health

insurance coverage in connection with

group health plans. Sections 2701 through

2728 of the PHS Act are incorporated into

ERISA and the Code.

Under section 2719A of the PHS Act,

as added by the Affordable Care Act and

incorporated into ERISA and the Code,

if a non-grandfathered group health

plan or health insurance issuer offering

non-grandfathered group or individual

health insurance coverage provides any

benefits with respect to emergency services in an emergency department of a

hospital, the plan or issuer must cover

emergency services without the individual or the health care provider having

to obtain prior authorization (including

when the emergency services are provided out-of-network) and without regard to whether the health care provider

furnishing the emergency services is an

in-network provider with respect to the

services. The emergency services must

be provided without regard to any other

term or condition of the plan or health insurance coverage other than the exclusion

or coordination of benefits, an affiliation

or waiting period permitted under the

Code, ERISA, and the PHS Act, or applicable cost-sharing requirements. For a

plan or health insurance coverage with a

network of providers that provides benefits for emergency services, the plan or

issuer may not impose any administrative

requirement or limitation on benefits for

out-of-network emergency services that

is more restrictive than the requirements

or limitations that apply to in-network

emergency services. In addition, carriers

offering FEHB plans must comply with

requirements described in section 2719A

of the PHS Act in the same manner as

they apply to a plan or issuer.

For purposes of the requirements under

section 2719A of the PHS Act, emergency

services mean, with respect to an emergency medical condition, (1) a medical

screening examination (as required under

section 1867 of the Social Security Act)

that is within the capability of the emergency department of a hospital, including ancillary services routinely available

to the emergency department to evaluate

such emergency medical condition, and

(2) that is within the capabilities of the

staff and facilities available at the hospital, such further medical examination and

treatment as are required under section

1867 of the Social Security Act to stabilize the patient.

Regulations implementing section

2719A of the PHS Act include these consumer protections.2 Section 2719A of the

PHS Act did not prohibit balance billing.

Balance billing refers to the practice of

out-of-network providers billing patients

for the difference between (1) the provider’s billed charges, and (2) the amount

collected from the plan or issuer plus the

amount collected from the patient in the

form of cost sharing (such as a copayment,

coinsurance, or amounts paid toward a deductible). To avoid the circumvention of

the protections of section 2719A of the

PHS Act, in the implementing regulations,

the Departments determined it was necessary that a reasonable amount be paid by

a plan or issuer before a patient becomes

responsible for a balance billing amount.3

Therefore, under the Departments’ final regulations published in the Federal

Protections Final Rule), a plan or issuer

satisfies the out-of-network emergency

care cost-sharing limitations in the statute

if it provides benefits for out-of-network

emergency services in an amount at least

equal to the greatest of the following three

amounts (adjusted for in-network cost

sharing): (1) the median amount negotiated with in-network providers for the

emergency service; (2) the amount for

the emergency service calculated using

the same method the plan generally uses

to determine payments for out-of-network

services (such as the usual, customary,

The term “group health plan” includes both insured and self-insured group health plans.

26 CFR 54.9815-2719A(b); 29 CFR 2590.715-2719A(b); 45 CFR 147.138(b).

75 FR 37188, 37194 (June 28, 2010); see also 80 FR 72192 (Nov. 18, 2015). Additional clarification of these rules was also provided in 2018. See 83 FR 19431 (May 3, 2018).

July 26, 2021

Bulletin No. 2021–30

and reasonable (UCR) amount); or (3) the

amount that would be paid under Medicare Part A or Part B for the emergency

service (collectively, minimum payment

standards).4 The Departments’ regulations

clarify that the cost-sharing requirements

create a minimum payment requirement

for the plan or issuer.5 The Departments

also clarified that the cost-sharing requirements do not prohibit a group health plan

or health insurance issuer from providing

benefits with respect to an emergency

service that are greater than the amounts

specified in the regulations. However,

those regulations address balance billing

with respect to only emergency services

and, even in that context, they serve only

to minimize the amount of a balance bill

by requiring that plans and issuers must

pay a reasonable amount for emergency

services before a patient becomes responsible for a balance billing amount. Prior

to the enactment of the No Surprises Act,

these minimum payment standards were

the only federal consumer protections

to reduce potential amounts of balance

billing for individuals enrolled in group

health plans and group and individual

health insurance coverage.

The No Surprises Act added section

9816 of the Code, section 716 of ERISA, and section 2799A-1 of the PHS Act,

which expand the patient protections related to emergency services under section

2719A of the PHS Act, in part, by providing additional consumer protections related to balance billing.6 The No Surprises

Act amended section 2719A of the PHS

Act to include a sunset provision effective

for plan years beginning on or after January 1, 2022, when the new protections under the No Surprises Act take effect.

Additionally, the No Surprises Act recodified the patient protections regarding

choice of health care professional from

section 2719A(a), (c), and (d) of the PHS

Act at new section 9822 of the Code, sec-

tion 722 of ERISA, and section 2799A7 of the PHS Act. If a plan or issuer requires or provides for designation by a

participant, beneficiary, or enrollee of a

participating primary care provider, these

provisions permit individuals to designate

any participating primary care providers

available to accept them, including pediatricians, and prohibit the plan or issuer

from requiring authorization or referral

for obstetrical or gynecological care.

B. Surprise Billing and the Need for

Greater Consumer Protections

Most group health plans, and health

insurance issuers offering group or individual health insurance coverage, have a

network of providers and health care facilities (participating providers or preferred

providers) who agree by contract to accept

a specific amount for their services.7 By

contrast, providers and facilities that are

not part of a plan or issuer’s network (nonparticipating providers) usually charge

higher amounts than the contracted rates

that plans and issuers have negotiated

with participating providers and facilities.

When a participant, beneficiary, or enrollee receives care from a nonparticipating

provider, the individual’s plan or issuer

may decline to pay for the service or may

pay an amount that is lower than the provider’s billed charges, and may subject

the individual to greater cost-sharing requirements than would have been charged

had the services been furnished by a participating provider. Prior to the No Surprises Act, the nonparticipating provider

could generally balance bill the individual

for the difference between the provider’s

billed charges and the sum of the amount

paid by the plan or issuer and the cost

sharing paid by the individual, unless otherwise prohibited by state law.

A balance bill may come as a surprise

for the individual. A surprise medical bill

is an unexpected bill from a health care

provider or facility that occurs when a

covered person receives medical services

from a provider or facility that, usually

unknown to the participant, beneficiary,

or enrollee, is a nonparticipating provider or facility with respect to the individual’s coverage. Surprise billing occurs

both for emergency and non-emergency

care. In an emergency, a person usually

goes (or is taken by emergency transport) to a nearby emergency department. Even if they go to a participating

hospital or facility for emergency care,

they may receive care from nonparticipating providers working at that facility.

For non-emergency care, a person may

choose a participating facility (and possibly even a participating provider), but not

know that at least one provider involved

in their care (for example, an anesthesiologist or radiologist) is a nonparticipating

provider. In either circumstance, the person might not be in a position to choose

the provider, or to ensure that the provider is a participating provider. Therefore,

in addition to a bill for their cost-sharing

amount, which tends to be higher for outof-network services, the person might

receive a balance bill from the nonparticipating provider or facility. This scenario

also plays out frequently for air ambulance services, where individuals generally do not have the ability to select a

provider of air ambulance services, and,

therefore, have little or no control over

whether the provider is in-network with

their plan or coverage.

When individuals are unable to avoid

nonparticipating providers, it raises health

care costs and exposes patients to financial risk.8 The evidence suggests that the

ability to balance bill is used as leverage

by some providers to obtain higher in-network payments, which results in higher

premiums, higher cost sharing for individuals, and increased health care expen-

26 CFR 54.9815-2719A(b)(3); 29 CFR 2590.715-2719A(b)(3); 45 CFR 147.138(b)(3).

If state law prohibits balance billing, or in cases in which a group health plan or health insurance issuer is contractually responsible for balance billing amounts, plans and issuers are not

required to satisfy the minimum payment standards set forth in the regulations, but may not impose any copayment or coinsurance requirement for out-of-network emergency services that

is higher than the copayment or coinsurance requirement that would apply if the services were provided in-network. See 26 CFR 54.9815-2719A(b)(3)(iii); 29 CFR 2590.715-2719A(b)(3)

(iii); 45 CFR 147.138(b)(3)(iii); FAQs about Affordable Care Act Implementation (Part I), Q15 (Sept. 20, 2010), available at https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/

affordable-care-act/for-employers-and-advisers/aca-implementation-faqs; www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs.html.

These new protections apply regardless of whether the plan or coverage is a grandfathered health plan under section 1251 of the Affordable Care Act. The No Surprises Act also amended 5

U.S.C. 8902(p) to ensure that covered individuals enrolled in FEHB plans receive these protections.

These interim final rules refer to providers both in terms of their participation (participating provider) and in terms of a network (in-network provider). In both situations, the intent is to

refer to a provider that has a contractual relationship or other arrangement with a plan or issuer to provide health care items and services for participants, beneficiaries, and enrollees of the

plan or issuer.

Cooper Z et al., Out-of-Network Billing and Negotiated Payments for Hospital-Based Physicians, Health Affairs 39, No. 1, 2020. doi: 10.1377/hlthaff.2019.00507.

Bulletin No. 2021–30

July 26, 2021

ditures overall.9 Studies have shown that

surprise bills can be large. For example,

a recent study found that physicians collected, on average, 65 percent of the total

charged amount for emergency department visits that likely included surprise

bills, compared to 52 percent of the total

charged amount for emergency department visits that likely did not include

surprise bills. The study also found that

nine percent of the individuals who likely

received surprise bills paid physicians an

amount more than $400, which may cause

financial hardship to many individuals.10

In addition, out-of-network cost sharing

and payments for surprise bills usually do

not count towards an individual’s deductible and maximum out-of-pocket expenditure limits. Therefore, individuals with

surprise bills may have difficulty reaching

those limits, even after a significant health

care event.

Another study using claims data from

a large commercial issuer for the period

2010-2016 found that over 39 percent of

emergency department visits to in-network hospitals resulted in an out-of-network bill, and the incidence increased

from 32.3 percent in 2010 to 42.8 percent

in 2016. The average potential amount of

surprise medical bills also increased from

$220 in 2010 to $628 in 2016. During the

same period, 37 percent of inpatient admissions to in-network hospitals resulted

in at least one out-of-network bill, increasing from 26.3 percent in 2010 to 42

percent in 2016, and the average potential

surprise medical bill increased from $804

to $2,040.11

Although some states have enacted

laws to reduce or eliminate balance billing, these efforts have created a patchwork of consumer protections. Even

within a state that has enacted such protections, those protections typically apply

only to individuals enrolled in individual

and group health insurance coverage, as

ERISA generally preempts state laws that

regulate self-insured group health plans

sponsored by private employers. In addition, states are limited in their ability to

address surprise bills that involve an outof-state provider.

Surprise medical bills can lead to

medical debt for individuals who have

difficulty paying their bills. The impact

is most keenly felt by those communities

experiencing poverty and other social

risk factors, as surprise medical bills and

medical debt can negatively affect individuals’ abilities to eliminate debt and

create wealth, and ultimately can affect a

family for generations.12 A recent survey

reported that while 68 percent of respondents said that it was difficult to pay a surprise bill, the likelihood of such difficulty

was higher for middle income respondents (77 percent) and African Americans (74 percent). In addition, while 11

percent of survey respondents were unable to pay the surprise bill, 21 percent

of low income respondents, 19 percent

of African Americans, and 17 percent of

respondents in rural areas were unable to

do so.13 In addition, individuals are often

confused by medical bills. A 2016 survey

found that 61 percent of individuals are

confused by medical bills, and for 49 percent of individuals surveyed, the amount

owed was a surprise.14 These challenges

are exacerbated for underserved communities, which are more likely to experience poor communication, underlying

mistrust of the medical system, and lower

levels of patient engagement than other

populations.15 Effective, culturally, and

linguistically tailored communication at

appropriate literacy levels, coupled with

policies that address the social risk factors and other barriers underserved communities face to accessing, trusting, and

understanding health care costs and coverage, can reduce disparities and promote

health equity.16

Communication among providers,

plans, consumers, communities, and consumer advocates must be consistent with

and reinforce all relevant consumer protections related to surprise bills. Such

communication must be accessible, linguistically tailored, and at an appropriate

literacy level. This includes compliance

with requirements to provide effective

communication for individuals with disabilities under the Americans with Disabilities Act of 1990,17 section 504 of the

Rehabilitation Act of 197318 and, where

applicable, section 1557 of the Affordable

Care Act,19 as well as compliance with

race, color, and national origin protections

under title VI of the Civil Rights Act of

See Cooper, Z. et al., Surprise! Out-Of-Network Billing For Emergency Care in the United States, NBER Working Paper 23623, 20173623; Duffy, E. et al., Policies to Address Surprise

Billing Can Affect Health Insurance Premiums. The American Journal of Managed Care 26.9 (2020): 401–404.; and Brown E.C.F., et al., The Unfinished Business of Air Ambulance Bills,

Health Affairs Blog (March 26, 2021), DOI: 10.1377/hblog20210323.911379, available at https://www.healthaffairs.org/do/10.1377/hblog20210323.911379/full/.

Biener, A. et al., Emergency Physicians Recover a Higher Share of Charges From Out-Of-Network Care Than From In-Network Care, Health Affairs 40, No, 4 (2021): 622-628.

Sun EC, Mello MM, Moshfegh J, Baker LC, Assessment of Out-of-Network Billing for Privately Insured Patients Receiving Care in In-Network Hospitals. JAMA Intern Med. 2019;

179(11):1543–1550 (2019). doi:10.1001/jamainternmed.2019.3451.

Taylor, J. Racism, inequality, and health care for African Americans. The Century Foundation: Report (December 19, 2019). https://tcf.org/content/report/racism-inequality-health-care-african-americans/; Chavis, B. Op-Ed: Big insurance must help end surprise medical billing. blackpressUSA (February 24, 2020).

Families USA, Surprise Medical Bills, Results from a National Survey, November 2019. https://familiesusa.org/wp-content/uploads/2019/11/Surprise-Billing-National-Poll-Report-FINAL.

pdf.

Gooch, Kelly. 61% of patients confused by medical bills, survey finds. Becker’s Hospital Review (July 14, 2016). https://www.beckershospitalreview.com/finance/61-of-patients-confusedby-medical-bills-survey-finds.html.

See Butler S, Sherriff N. How poor communication exacerbates health inequities and what to do about it. Brookings Institution: Report (February 22, 2021). https://www.brookings.edu/

research/how-poor-communication-exacerbates-health-inequities-and-what-to-do-about-it/; Hamel, L., Lopes, L., Muñana, C., Artiga, S., Brodie, M. Race, Health, and COVID-19: The

Views and Experiences of Black Americans. Kaiser Family Foundation (October 2020). https://files.kff.org/attachment/Report-Race-Health-and-COVID-19-The-Views-and-Experiencesof-Black-Americans.pdf; Shen M.J., Peterson E.B., Costas-Muñiz R. et al. The Effects of Race and Racial Concordance on Patient-Physician Communication: A Systematic Review of the

Literature. J. Racial and Ethnic Health Disparities 5, 117–140 (2018). https://doi.org/10.1007/s40615-017-0350-4.

Pérez-Stable EJ, El-Toukhy S. Communicating with diverse patients: How patient and clinician factors affect disparities. Patient Educ Couns. 2018;101(12):2186-2194. doi:10.1016/j.

pec.2018.08.021; McNally, M. Confronting disparities in access to healthcare for underserved populations. MedCity News (February 22, 2021). https://medcitynews.com/2021/02/confronting-disparities-in-access-to-healthcare-for-underserved-populations-in-2021/

42 U.S.C. 12101 et seq.

29 U.S.C. 794 and 794d.

42 U.S.C. 18116(a).

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Bulletin No. 2021–30

196420 and section 1557 of the Affordable

Care Act. Section 1557 prohibits discrimination on the basis of race, color, national

origin, sex (including sexual orientation

and gender identity), age, or disability in

covered health programs or activities, including requiring covered entities to take

reasonable steps to ensure meaningful access for individuals with limited English

proficiency.

On January 20, 2021, President Biden

issued Executive Order 13985, “On Advancing Racial Equity and Support for

Underserved Communities Through the

Federal Government,”21 directing that as

a policy matter, the federal government

should pursue a comprehensive approach

to advancing equity for all, including people of color and others who have been historically underserved, marginalized, and

adversely affected by persistent poverty

and inequality. Executive Order 13985

also directs HHS to assess whether, and to

what extent, its programs and policies perpetuate systemic barriers to opportunities

and benefits for people of color and other

underserved groups. Consistent with Executive Order 13985, regulations issued

pursuant to the No Surprises Act must

ensure that communication from plans,

issuers, providers, facilities, and providers of air ambulance services recognizes

these inequities and upholds all relevant

consumer protections. Regulations issued

pursuant to the No Surprises Act should

ensure that all individuals, particularly those from underserved and minority

communities, trust and believe information they receive related to costs and network coverage. Regulations and policies

should enable and encourage regulated

entities to address barriers to accessing

care, including mistrust of the health care

system. They should also encourage entities to communicate with individuals in

a language they can understand, in a respectful way that addresses cultural differences, and at an appropriate literacy

level. To ensure all consumers, particularly those in minority and underserved

communities, are able to understand and

benefit from these consumer protections,

deliberate attention must be paid to the

unique barriers and challenges underserved communities face in understanding

and accessing health care. The Departments seek comment from those who are

members of, advocate for, and work with

underserved communities regarding the

impact of these interim final rules.

C. Preventing Surprise Medical Bills

under the Consolidated Appropriations

Act, 2021

On December 27, 2020, the Consolidated Appropriations Act, 2021 (CAA),

which included the No Surprises Act,

was signed into law. The No Surprises

Act provides federal protections against

surprise billing and limits out-of-network

cost sharing under many of the circumstances in which surprise bills arise most

frequently.22

The CAA added provisions that apply

to group health plans and health insurance

issuers in the group and individual market

in a new Part D of title XXVII of the PHS

Act, and also added new provisions to part

7 of ERISA, and subchapter B of chapter

100 of the Code. Section 102 of the No

Surprises Act added section 9816 of the

Code, section 716 of ERISA, and section

2799A-1 of the PHS Act, which contain

limitations on cost sharing, and requirements for initial payments for emergency

services and for non-emergency services

provided by nonparticipating providers

at certain participating health care facilities. Section 103 of the No Surprises Act

amended section 9816 of the Code, section 716 of ERISA, and section 2799A-1

of the PHS Act to establish an independent dispute resolution (IDR) process that

allows plans and issuers and nonparticipating providers and nonparticipating

emergency facilities to resolve disputes

over out-of-network rates. Section 105 of

the No Surprises Act added section 9817

of the Code, section 717 of ERISA, and

section 2799A-2 of the PHS Act, which

contain limitations on cost sharing and

requirements for initial payments to nonparticipating providers of air ambulance

services, and allow plans and issuers and

such providers of air ambulance services

to access the IDR process. The CAA also

amended the FEHBA, as discussed in

more detail in section I.D. of this preamble.

The CAA provisions that apply to

health care providers and facilities and

providers of air ambulance services, such

as cost-sharing requirements, prohibitions

on balance billing for certain items and

services, and requirements related to disclosures about balance billing protections,

were added to title XXVII of the PHS Act

in a new part E.

The Departments are issuing regulations in several phases implementing provisions of title I (No Surprises Act) and

title II (Transparency) of Division BB of

the CAA. Later this year, the Departments

intend to issue regulations regarding the

federal IDR process (sections 103 and

105 of Division BB), patient protections

through transparency and the patient-provider dispute resolution process (section

112), and price comparison tools (section

114). The Departments also intend to undertake rulemaking this year to propose

the form and manner in which plans, issuers, and providers of air ambulance

services would report information regarding air ambulance services (section 106).

In addition, HHS intends to undertake

rulemaking to implement requirements on

health insurance issuers offering individual health insurance coverage or short-term,

limited-duration insurance to disclose and

report information regarding direct or indirect compensation provided to agents

and brokers (section 202(c)), as well as

provisions related to HHS enforcement of

requirements on issuers, non-federal governmental group health plans, providers,

facilities, and providers of air ambulance

services.

The CAA also includes provisions regarding transparency in plan and insurance identification cards (section 107),

continuity of care (section 113), accuracy of provider network directories (section 116), and prohibition on gag clauses

(section 201) that are applicable for plan

years beginning on or after January 1,

2022; and pharmacy benefit and drug cost

reporting (section 204) that is required by

42 U.S.C. 2000d.

86 FR 7009 (Jan. 25, 2021).

Pub. L. 116-260.

Bulletin No. 2021–30

July 26, 2021

December 27, 2021. The Departments intend to undertake rulemaking to fully implement these provisions, but rulemaking

regarding some of these provisions might

not occur until after January 1, 2022. The

Departments note that any such rulemaking to fully implement these provisions

will include a prospective applicability

date that provides plans, issuers, providers, and facilities, as applicable, a reasonable amount of time to comply with new

or clarified requirements. Until rulemaking to fully implement these provisions is

finalized and effective, plans and issuers

are expected to implement the requirements using a good faith, reasonable

interpretation of the statute. The Departments intend to issue guidance in the near

future regarding their expectations related to good faith compliance with these

provisions.

D. Preventing Surprise Medical Bills for

Federal Employees Health Benefits Plans

The No Surprises Act also amended the

FEHBA, 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 provisions of sections 9816,

9817, and 9822 of the Code; sections 716,

717, and 722 of ERISA; and sections

2799A–1, 2799A–2, and 2799A–7 of the

PHS Act (as applicable) in the same manner as they apply with respect to a group

health plan or health insurance issuer offering group or individual health insurance

coverage. Likewise, the provisions of sections 2799B–1, 2799B–2, 2799B–3, and

2799B–5 of the PHS Act apply to health

care providers, facilities, and providers

of air ambulance services with respect to

covered individuals in FEHB plans in the

same manner as they apply to participants,

beneficiaries, or enrollees in group health

plans or coverage offered by health insurance issuers.

OPM is charged with administering the

FEHB Program and maintains oversight

and enforcement authority with respect

to FEHB health benefits plans, which

are federal governmental plans. Generally, under 5 U.S.C. 8902(p), each FEHB

contract must require a carrier to comply

with certain PHS Act, ERISA, and Code

requirements in the same manner as they

July 26, 2021

apply to a group health plan or health insurance issuer.

II. Executive Summary

These interim final rules implement

provisions of the No Surprises Act that:

(1) apply to group health plans, health

insurance issuers offering group or individual health insurance coverage, and

carriers in the FEHB Program to provide

protections against balance billing and

out-of-network cost sharing with respect

to emergency services, non-emergency

services furnished by nonparticipating

providers at certain participating health

care facilities, and air ambulance services

furnished by nonparticipating providers

of air ambulance services; (2) prohibit

nonparticipating providers, health care

facilities, and providers of air ambulance

services from balance billing participants,

beneficiaries, and enrollees in certain situations, and permit these providers and

facilities to balance bill individuals if certain notice and consent requirements in the

No Surprises Act are satisfied; (3) require

certain health care facilities and providers

to provide disclosures of federal and state

patient protections against balance billing;

(4) recodify certain patient protections

that initially appeared in the ACA and that

the No Surprises Act applies to grandfathered plans; and (5) set forth complaints

processes with respect to violations of the

protections against balance billing and

out-of-network cost sharing under the No

Surprises Act.

These interim final rules protect individuals from surprise medical bills for

emergency services, air ambulance services furnished by nonparticipating providers, and non-emergency services furnished by nonparticipating providers at

participating facilities in certain circumstances. Among other requirements, these

interim final rules require emergency

services to be covered without any prior

authorization, without regard to whether

the health care provider furnishing the

emergency services is a participating provider or a participating emergency facility

with respect to the services, and without

regard to any other term or condition of

the plan or coverage other than the exclusion or coordination of benefits or a

permitted affiliation or waiting period.

Additionally, emergency services include

certain services in an emergency department of a hospital or an independent freestanding emergency department, as well

as post‑stabilization services in certain

instances.

With respect to emergency services, air

ambulance services furnished by nonparticipating providers, and non-emergency

services furnished by nonparticipating

providers at participating facilities, these

interim final rules limit cost sharing for

out-of-network services to in-network

levels, require such cost sharing to count

toward any in-network deductibles and

out-of-pocket maximums, and prohibit

balance billing, as required by the No Surprises Act.

These interim final rules specify that

cost-sharing amounts for such services

furnished by nonparticipating emergency

facilities and nonparticipating providers at

participating facilities must be calculated

based on one of the following amounts:

(1) an amount determined by an applicable All-Payer Model Agreement under

section 1115A of the Social Security Act;

(2) if there is no such applicable All-Payer

Model Agreement, an amount determined

by a specified state law; or (3) if there

is no such applicable All-Payer Model

Agreement or specified state law, the lesser of the billed charge or the plan’s or issuer’s median contracted rate, referred to

as the qualifying payment amount (QPA).

Cost-sharing amounts for air ambulance

services provided by nonparticipating providers must be calculated using the lesser

of the billed charge or the QPA, and the

cost-sharing requirement that would apply

if such services were provided by a participating provider.

Under these interim final rules, balance billing for services covered by the

rules generally is prohibited, and the total

amount to be paid to the provider or facility, including any cost sharing, is based

on: (1) an amount determined by an applicable All-Payer Model Agreement under

section 1115A of the Social Security Act;

(2) if there is no such applicable All-Payer

Model Agreement, an amount determined

by a specified state law; (3) if there is no

such applicable All-Payer Model Agreement or specified state law, an amount

agreed upon by the plan or issuer and the

provider or facility; or (4) if none of those

Bulletin No. 2021–30

three conditions apply, an amount determined by an IDR entity.

In general, under the No Surprises Act and these interim final rules, the

protections that limit cost sharing and

prohibit balance billing do not apply to

certain post-stabilization services, or

to certain non-emergency services performed by nonparticipating providers

at participating health care facilities, if

the provider or facility provides notice

to the participant, beneficiary, or enrollee, and obtains the individual’s consent

to waive the balance billing protections.

However, providers and facilities may

not provide such notice or seek consent

from individuals in certain circumstances

where surprise bills are likely to occur,

such as for ancillary services provided by

nonparticipating providers in connection

with non-emergency care in a participating facility. In such circumstances, balance billing is prohibited, and the other

protections of the No Surprises Act, such

as in-network cost-sharing requirements,

continue to apply.

Neither the No Surprises Act, nor these

interim final rules, universally protect individuals from every high or unexpected

medical bill. For example, an individual

may be enrolled in a group health plan or

health insurance coverage that provides

little or no coverage for their particular

health care condition or the items and services necessary to treat that condition. In

addition, balance billing continues to be

permitted, unless prohibited by state law

or contract, in circumstances where these

interim final rules do not apply, such as for

non‑emergency items or services provided

at facilities that are not included within the

definition of health care facility in these

interim final rules. Nonetheless, the No

Surprises Act and these interim final rules

provide relief from some of the more common scenarios where a participant, beneficiary, or enrollee might otherwise be faced

with high and unexpected medical costs.

These interim final rules establish a

complaints process for receiving and resolving complaints related to these new

balance billing protections.

These interim final rules also implement the requirement of the No Surprises

Act that certain health care providers and

facilities make publicly available, post on

a public website, and provide a one-page

Bulletin No. 2021–30

notice to individuals regarding: (1) the

requirements and prohibitions applicable

to the provider or facility under sections

2799B-1 and 2799B-2 of the PHS Act and

their implementing regulations; (2) any

applicable state balance billing requirements; and (3) how to contact appropriate

state and federal agencies if the individual believes the provider or facility has

violated the requirements described in the

notice.

Section 116 of the No Surprises Act

also added section 9820(c) of the Code,

section 720(c) of ERISA, and section

2799A-5(c) of the PHS Act, which include similar disclosure requirements

applicable to plans and issuers. In general, under these provisions, plans and issuers must make publicly available, post

on a public website of the plan or issuer,

and include on each explanation of benefits for an item or service with respect

to which the requirements under section

9816 of the Code, section 716 of ERISA, and section 2799A-1 of the PHS Act

apply, information on the requirements

applied under these aforementioned sections, as applicable; on the requirements

and prohibitions applied under sections

2799B-1 and 2799B-2 of the PHS Act; on

other applicable state laws on out-of-network balance billing; and on contacting

appropriate state and federal agencies in

the case that an individual believes that

such a provider or facility has violated

the prohibition against balance billing.

These disclosure requirements are applicable for plan years beginning on or after

January 1, 2022. To reduce burden and

facilitate compliance with these disclosure requirements, the Departments are

concurrently issuing a model disclosure

notice that health care providers, facilities, group health plans, and health insurance issuers may, but are not required

to, use to satisfy the disclosure requirements regarding the balance billing protections. The Departments will consider

use of the model notice in accordance

with the accompanying instructions to be

good faith compliance with the disclosure requirements of section 9820(c) of

the Code, section 720(c) of ERISA, and

section 2799A-5(c) of the PHS Act, if all

other applicable requirements are met.

In addition, HHS will consider use of

the model notice in accordance with the

accompanying instructions to be good

faith compliance with the disclosure requirements of section 2799B-3 of the

PHS Act and 45 CFR 149.430, if all other applicable PHS Act requirements are

met. The Departments may address the

requirements under section 9820(c) of

the Code, section 720(c) of ERISA, and

section 2799A-5(c) of the PHS Act, as

added by the No Surprises Act, in more

detail in future guidance or rulemaking.

Until further guidance is issued, plans

and issuers are expected to implement

the requirements of section 9820(c) of

the Code, section 720(c) of ERISA, and

section 2799A-5(c) of the PHS Act using

a good faith, reasonable interpretation of

the law. The Departments will take into

account the statutory applicability date

and the timeframe for implementation

when determining good faith compliance

with the law.

These interim final rules generally apply to group health plans and health insurance issuers offering group or individual health insurance coverage (including

grandfathered health plans) with respect

to plan years (in the individual market,

policy years) beginning on or after January 1, 2022, as well as to health care providers and facilities, and providers of air

ambulance services beginning on January

1, 2022.

In the OPM interim final rules included

in this rulemaking, OPM adopts all provisions of the Departments’ interim final

rules that address the sections of the Code,

ERISA, and the PHS Act that are referenced in 5 U.S.C. 8902(p). In the OPM

interim final rules, OPM defines terms

unique to the FEHB Program, adapts

some of the Departments’ rules as necessary to properly integrate with the existing

FEHB Program regulatory and contractual structure, sets forth the circumstances

in which OPM will enforce these rules

against FEHB carriers, and sets forth the

types of court actions involving the FEHB

Program that may be brought against

OPM with respect to the No Surprises Act.

In effectuating compliance with 5

U.S.C. 8902(p), FEHB contract terms that

relate to the nature, provision, or extent

of coverage or benefits (including payments with respect to benefits) supersede

and preempt state law or local law, or any

regulation issued thereunder, which re-

July 26, 2021

lates to health insurance or plans.23 OPM

contracts with FEHB carriers may include

terms that adopt state law as governing for

a particular purpose.

III. Overview of the Interim Final

Rules – Departments of HHS, Labor,

and the Treasury

A. Definitions

The provisions of the Code, ERISA,

and the PHS Act added by the No Surprises Act, as well as these interim final

rules, include defined terms that are specific to the requirements and implementation of the law. Definitions of these key

terms are described throughout this preamble. These terms help define the scope

of the balance billing protections and how

cost-sharing amounts and payment levels

are determined.

The Departments note that these interim final rules define the term “physician

or health care provider” to mean a physician or other health care provider who

is acting within the scope of practice of

that provider’s license or certification under applicable state law, but the definition

specifically excludes providers of air ambulance services. The Departments recognize that, although the No Surprises Act

does not define “provider,” it uses the term

in a manner that includes providers of air

ambulance services in some provisions.

For example, the No Surprises Act added

section 2799B-4 of the PHS Act, which

specifically includes providers of air ambulance services when referencing providers. However, certain other provisions

in the No Surprises Act apply only to providers of air ambulance services, or apply

to health care providers generally, but by

their terms are inapplicable to providers of

air ambulance services. As an example of

the latter, the No Surprises Act added section 2799B-2 of the PHS Act, which generally prohibits balance billing by nonparticipating health care providers furnishing

non-emergency services at participating

health care facilities. Although this provision does not explicitly exclude providers

of air ambulance services, providers of

air ambulance services would not furnish

non-emergency services at participating

health care facilities. Therefore, the provision does not apply to providers of air

ambulance services (such providers are,

however, prohibited from balance billing

under section 2799B-5 of the PHS Act).

Similarly, section 2799B-3 of the PHS

Act, which requires a health care provider

to inform individuals of the requirements

and prohibitions on such health care provider in sections 2799B-1 and 2799B-2

of the PHS Act (neither of which apply

to providers of air ambulance services),

does not by its terms apply to providers of

air ambulance services. Therefore, these

interim final rules define “physician or

health care provider” to exclude providers of air ambulance services, in order to

help clarify which provisions of the No

Surprises Act and interim final rules apply

to providers of air ambulance services. In

instances where provisions under the No

Surprises Act, as implemented in these

interim final rules, apply to providers of

air ambulance services, the provisions

explicitly reference air ambulance providers. Conversely, where providers of

air ambulance services are not explicitly

mentioned, the provisions do not apply.

The Departments seek comment on the

terms defined in these interim final rules,

including the appropriateness and usability of the definitions, and whether additional terms should be defined in future

rulemaking.

B. Preventing Surprise Medical Bills

1. Scope of the New Surprise Billing

Protections

i. Emergency Services

Under section 9816(a) of the Code,

section 716(a) of ERISA, and section

2799A-1(a) of the PHS Act, and these interim final rules, if a group health plan, or

a health insurance issuer offering group or

individual health insurance coverage, provides or covers any benefits with respect

to services in an emergency department

of a hospital or with respect to emergen-

cy services in an independent freestanding

emergency department, the plan or issuer

must cover emergency services as defined

in these interim final rules and such coverage must be provided in accordance with

these interim final rules.

A plan or issuer providing coverage of

emergency services must do so without

the individual or the health care provider having to obtain prior authorization

(including when the emergency services

are provided out-of-network) and without

regard to whether the health care provider furnishing the emergency services is a

participating provider or a participating

emergency facility with respect to the

services. The emergency services must

be provided without regard to any other

term or condition of the plan or coverage

other than the exclusion or coordination

of benefits (to the extent not inconsistent

with benefits for an emergency medical

condition as defined in these interim final

rules), an affiliation or waiting period as

permitted under the Code, ERISA, or the

PHS Act, or applicable cost-sharing requirements. For a plan or health insurance

coverage with a network of providers that

provides benefits for emergency services,

the plan or issuer may not impose any administrative requirement or limitation on

coverage for emergency services received

from nonparticipating providers or nonparticipating emergency facilities that is

more restrictive than the requirements or

limitations that apply to emergency services received from participating providers or participating emergency facilities.

In addition, such plan or health insurance

coverage must comply with the requirements regarding cost sharing, payment

amounts, and processes for resolving billing disputes described elsewhere in this

preamble.

The terms “emergency medical condition,” “emergency services,” and “to stabilize” generally have the meaning given

to them under the Emergency Medical

Treatment and Labor Act (EMTALA),

section 1867 of the Social Security Act.24

Emergency services include: (1) an appropriate medical screening examination that

is within the capability of the emergency

5 U.S.C. 8902(m)(1); see Coventry Health Care of Missouri, Inc. v. Nevils, 137 S. Ct. 1190 (2017).

42 U.S.C. 1395dd.

July 26, 2021

Bulletin No. 2021–30

department of a hospital or of an independent freestanding emergency department,

including ancillary services routinely

available to the emergency department,

to evaluate whether an emergency medical condition exists; and (2) such further

medical examination and treatment as

may be required to stabilize the individual

(regardless of the department of the hospital in which the further medical examination and treatment is furnished) within

the capabilities of the staff and facilities

available at the hospital or the independent freestanding emergency department.

Under section 2719A of the PHS Act,

emergency services were defined to include: (1) a medical screening examination (as required under section 1867 of

the Social Security Act) that is within the

capability of the emergency department of

a hospital, including ancillary services routinely available to the emergency department to evaluate such emergency medical

condition; and (2) such further medical

examination and treatment as are required

under section 1867 of the Social Security

Act to stabilize the patient within the capabilities of the staff and facilities available

at the hospital. HHS has previously interpreted the obligations on hospitals under

EMTALA to provide medical examination

and stabilization services to end when a

patient is formally admitted in good faith.25

Section 9816(a) of the Code, section 716(a)

of ERISA, and section 2799A-1(a) of the

PHS Act expand the definition of emergency services (as compared to section 2719A

of the PHS Act) to include stabilization services “regardless of the department of the

hospital in which the further medical examination and treatment is furnished.” Therefore, the definition of emergency services

in these interim final rules includes pre-stabilization services that are provided after

the patient is moved out of the emergency

department and admitted to a hospital, and

these services will be subject to the protections of the No Surprises Act.

Section 102 of the No Surprises Act

further broadens the definition of emergency services to include emergency

services provided at an independent

freestanding emergency department. An

independent freestanding emergency department is a health care facility (not limited to those described in the definition of

health care facility at section 9816(b)(2)

(A)(ii) of the Code, section 716(b)(2)(A)

(ii) of ERISA, and section 2799A-1(b)

(2)(A)(ii) of the PHS Act, as applicable)

that provides emergency services, and is

geographically separate and distinct from

a hospital, and separately licensed as such

by a state. The definition of “independent

freestanding emergency department” is

intended to include any health care facility that is geographically separate and distinct from a hospital, and that is licensed

by a state to provide emergency services,

even if the facility is not licensed under

the term “independent freestanding emergency department.”

Regulation of health care facilities varies by state. In particular, state regulation

of urgent care centers varies significantly,

and is evolving as these types of centers

become more common.26 If under state

licensure laws, urgent care centers are

permitted to provide emergency services,

then urgent care centers in that state that

are geographically separate and distinct

from a hospital would fall within the definition of independent freestanding emergency department for purposes of these

interim final rules. In contrast, if state

licensure of urgent care centers does not

permit such facilities to provide emergency services as defined in these interim final rules, then urgent care centers in that

state would not be treated as independent

freestanding emergency departments for

purposes of these interim final rules. Finally, the definition of emergency services

also includes additional post-stabilization

services, as discussed in section III.B.1.ii

of this preamble.

The term “emergency medical condition” means a medical condition manifesting itself by acute symptoms of sufficient

severity (including severe pain) such that

a prudent layperson, who possesses an average knowledge of health and medicine,

could reasonably expect the absence of

immediate medical attention to result in a

condition described in EMTALA, including (1) placing the health of the individual

(or, with respect to a pregnant woman, the

health of the woman or her unborn child)

in serious jeopardy, (2) serious impairment to bodily functions, or (3) serious

dysfunction of any bodily organ or part.27

This definition includes mental health

conditions and substance use disorders.

The Departments are aware that some

plans and issuers currently deny coverage of certain services provided in the

emergency department of a hospital by

determining whether an episode of care

involves an emergency medical condition

based solely on final diagnosis codes, such

as International Classification of Diseases, Tenth Revision, Clinical Modification

(ICD-10-CM) codes. In addition, some

plans and issuers might automatically

deny coverage based on a list of final diagnosis codes initially, without regard to the

individual’s presenting symptoms or any

additional review. Following an initial denial, plans and issuers might then provide

for complete consideration of the claim,

and apply the prudent layperson standard, only as part of an appeals process

if the participant, beneficiary, or enrollee

appeals. These practices are inconsistent

with the emergency services requirements

of the No Surprises Act and the ACA.28

This is true even if the process for complete consideration of the claim following

an initial denial is not designated as a formal appeal. Instead, the determination of

whether the prudent layperson standard is

met must be made on a case-by-case basis

before an initial denial of an emergency

services claim.

42 CFR 489.24(a)(1)(ii); 68 FR 53221-53264 (Sept. 9, 2003); 73 FR 48654-48668 (Aug. 19, 2008).

Association of State and Territorial Health Officials. As Urgent Care Centers Increase, Licensing Authority Falling Under State Health Agencies, (Oct. 11, 2018) available at https://www.

astho.org/StatePublicHealth/As-Urgent-Care-Centers-Increase-Licensing-Authority-Falling-Under-State-Health-Agencies/10-11-18/.

See 42 U.S.C. 1395dd(e)(1)(A).

See also Am. Coll. of Emergency Physicians v. Blue Cross & Blue Shield of Georgia, No. 20-11511, 2020 WL 6165852 (11th Cir. Oct. 22, 2020) (per curiam) (reversing dismissal of plaintiffs’

ACA and ERISA claims alleging defendants violated prudent layperson standard where review process was based upon physician review of medical records and diagnostic codes; prudent

layperson standard ignores a patient’s final diagnosis and instead asks whether a person with average medical knowledge would reasonably think they need emergency services to address

their symptoms).

Bulletin No. 2021–30

July 26, 2021

These interim final rules make clear

that if a group health plan, or a health insurance issuer offering group or individual health insurance coverage, provides

or covers any benefits with respect to

services in an emergency department of

a hospital or with respect to emergency

services in an independent freestanding

emergency department, the plan or issuer

must cover emergency services without

limiting what constitutes an emergency

medical condition (as defined in these

interim final rules) solely on the basis of

diagnosis codes. When a plan or issuer denies coverage, in whole or in part, for a

claim for payment of a service rendered

in the emergency department of a hospital

or independent freestanding emergency

department, including services rendered

during observation or surgical services,

the determination of whether the prudent

layperson standard has been met must

be based on all pertinent documentation

and be focused on the presenting symptoms (and not solely on the final diagnosis). This determination must take into

account that the legal standard regarding

the decision to seek emergency services

is based on whether a prudent layperson

(rather than a medical professional) would

reasonably consider the situation to be an

emergency.29 In covering emergency services, plans and issuers must also ensure

that they do not restrict the coverage of

emergency services by imposing a time

limit between the onset of symptoms and

the presentation of the participant, beneficiary, or enrollee at the emergency department. Similarly, plans and issuers also

may not restrict the coverage of emergency services because the patient did not experience a sudden onset of the condition.

The Departments are also aware that

some plans and issuers that generally

provide coverage for emergency services

have nonetheless denied benefits for such

services based on other general plan exclusions. For example, the Departments

are aware of some plans and issuers denying claims for emergency services provided to dependent women who are pregnant,

based on a general plan exclusion for dependent maternity care. As explained pre-

viously, both the coverage of emergency

services rules issued under section 2719A

of the PHS Act and the new emergency

services requirements included in these

interim final rules provide, in part, that if a

plan or issuer provides or covers any benefits with respect to services in an emergency department of a hospital (or under these

interim final rules, in an independent freestanding emergency department), emergency services must be provided “without

regard to any other term or condition of

the plan or coverage (other than the exclusion or coordination of benefits...).” The

Departments clarify that this provision

does not permit plans and issuers to exclude benefits for items and services that

would otherwise constitute benefits for an

emergency medical condition as defined

under these interim final rules. This provision does not permit plans and issuers that

cover emergency services to deny benefits

for a participant, beneficiary, or enrollee

with an emergency medical condition that

receives emergency services, based on a

general plan exclusion that would apply to

items and services other than emergency

services.

ii. Post-Stabilization Services

Under section 9816(a)(3)(C)(ii) of the

Code, section 716(a)(3)(C)(ii) of ERISA, and section 2799A-1(a)(3)(C)(ii) of

the PHS Act, emergency services include

any additional items and services that are

covered under a plan or coverage and furnished by a nonparticipating provider or

nonparticipating emergency facility (regardless of the department of the hospital in which such items and services are

furnished) after a participant, beneficiary, or enrollee is stabilized and as part

of outpatient observation or an inpatient

or outpatient stay with respect to the visit in which the other emergency services

are furnished. Such additional items and

services (referred to in this preamble as

post-stabilization services) are considered

emergency services subject to surprise

billing protections unless the conditions

enumerated in section 9816(a)(3)(C)(ii)

(II)(aa)-(cc) of the Code, section 716(a)(3)

(C)(ii)(II)(aa)-(cc) of ERISA, or section

2799A-1(a)(3)(C)(ii)(II)(aa)-(cc) of the

PHS Act, as applicable, are met, as well

as such other conditions as specified by

the Departments under paragraph (dd) of

the respective sections. Therefore, these

interim final rules provide that post-stabilization services are emergency services

unless all of the following conditions are

met.

First, the attending emergency physician or treating provider must determine

that the participant, beneficiary, or enrollee is able to travel using nonmedical

transportation or nonemergency medical

transportation to an available participating

provider or facility located within a reasonable travel distance, taking into consideration the individual’s medical condition. The HHS interim final rules codify

this requirement at 45 CFR 149.410(b)

(1). For this purpose, a treating provider

is a physician or health care provider who

has evaluated the individual. It is generally expected that a treating provider with

medical training and experience related to

the individual’s specific medical condition

will determine if the individual is able to

travel using nonmedical transportation or

nonemergency medical transportation to

an available participating provider or facility located within a reasonable travel

distance. This determination is based on

all the relevant facts and circumstances

and the individual should be involved in

the decision-making process, if possible.

The determination by the attending emergency physician or treating provider is

binding on the facility for purposes of this

requirement. This requirement is based on

the Departments’ understanding that such

provider is in the best position to make

this determination.

For individuals receiving care in or near

their plan’s or issuer’s covered service

area, as well as individuals with coverage

that uses a national network of providers

and facilities, the statutory criterion would

generally be sufficient to ensure that an individual can freely choose, based on their

medical condition, to receive post-stabilization services at a participating facility or

participating provider. The additional re-

However, nothing in the statute or these interim final rules prevents a plan or issuer from approving coverage for emergency services solely on the basis of diagnosis codes, or from taking

diagnostic codes into account when deciding payment for a claim for emergency services, provided a denial of coverage is not based solely on diagnosis codes.

July 26, 2021

Bulletin No. 2021–30

quirement in these interim final rules that

the individual be able to travel to an available participating provider or facility located within a reasonable travel distance,

taking into consideration the individual’s

medical condition, is necessary and appropriate to carry out the provision of the

No Surprises Act, as the requirement is intended to address the common situations

in which an individual has received emergency services in a geographic region far

from where any participating providers or

facilities are located. In cases where the

individual cannot travel using nonmedical

transportation or nonemergency medical

transportation, or cases where there are

no participating facilities or participating providers located within a reasonable

travel distance, taking into account the

individual’s medical condition, the Departments are of the view that individuals

are unable to provide consent freely and,

therefore, balance billing protections continue to apply.

In addition, the Departments recognize

that an individual’s transportation options

may vary based on the individual’s location, social risk, and other risk factors.

In cases of underserved and geographically isolated communities and those

with social risk factors related to income

and transportation options, individuals

may face additional barriers to obtaining

post-stabilization services without a disruption in care. For example, individuals

may not have the ability to pay for a taxi,

may not have access to a car, may not be

able to safely take public transit due to

their medical condition, or may not have

public transit options available. In these

cases, the net effect would be the same: the

individual would face unreasonable travel

burdens that could prevent them from being able to consent freely to a waiver of

the otherwise applicable balance billing

protections. The Departments expect the

attending emergency physician or treating

provider to consider such factors when

assessing the individual’s ability to travel to a participating provider or facility.

The Departments seek comment on the

definition of “reasonable travel distance”

and whether specific standards or examples should be provided regarding what

constitutes an unreasonable travel burden.

For example, should reasonable travel distance take into account only mileage, or

also other factors, such as traffic or other

route conditions that might make traveling

difficult, time consuming, or hazardous?

In contrast to situations where a participant, beneficiary, or enrollee is able to

travel using nonmedical transportation or

nonemergency medical transportation following stabilization, in the event that the

individual requires medical transportation

to travel, including transportation by either ground or air ambulance vehicle, the

individual is not in a condition to receive

notice or provide consent. Therefore, the

surprise billing protections continue to apply to post-stabilization services provided

in connection with the visit for which the

individual received emergency services.

Second, the provider or facility furnishing post-stabilization services must satisfy

the notice and consent criteria of section

2799B-2(d) of the PHS Act with respect to

such items and services (which are implemented in HHS-only interim final rules at

45 CFR 149.410(b)(2), and incorporate by

reference the criteria for notice and consent in 45 CFR 149.420(c) through (g)).

Third, the individual (or the individual’s authorized representative) must be in

a condition to receive the information in

the notice described in section 2799B-2 of

the PHS Act (which is also implemented

in 45 CFR 149.410(b)(3)) and to provide

informed consent under such section,

in accordance with applicable state law.

Whether an individual is in a condition

to receive the information in the notice is

determined by the attending physician or

treating provider using appropriate medical judgment. It is generally expected that

an attending physician or treating provider

with medical training and experience related to the individual’s specific medical

condition will make this determination

based on all the relevant facts and circumstances. In addition to applying any re-

quirements under state law, such medical

professionals should apply the same principles as they would when determining if

a patient is able to provide informed consent for treatment.30 They should assess

whether an individual is capable of understanding the information provided in the

notice and the implications of consenting.

Consideration must be given to the individual’s state of mind after receiving the

emergency services and the individual’s

emotional state at the time of consent. For

example, consideration must be given to

the effect of any alcohol or drug use by the

individual, including the use or administration of prescribed medications, as well

as to any pain the individual is experiencing, and the impact of those factors on the

patient’s state of mind. If the individual

is experiencing a mental or behavioral

health episode or displaying symptoms

of a mental or behavioral health disorder, or is impaired by a substance abuse

disorder, consideration should also be

given as to whether the individual’s condition impairs their ability to receive the

information in the notice and provide informed consent. In addition, consideration

must be given to cultural and contextual

factors that may affect the informed decision-making and consent process for

members of underserved communities,

including lack of trust arising from historical inequities, misinformation about

the informed consent process, or barriers

to comprehension of the information given through the informed consent process

and after the informed consent document

is signed.31 These barriers may include accessibility, language, and literacy barriers.

In addition, the informed consent must

be obtained in a way that adheres to all

civil rights protections cited within this

rulemaking, ensuring that all individuals

including those from underserved, underrepresented communities, with limited

English proficiency, and with disabilities,

are able to understand and freely make informed decisions.

Consent must be made voluntarily,

meaning the individual must be able to

Ethics guidance for physicians, published by the American Medical Association, states that physicians should “[a]ssess the patient’s ability to understand relevant medical information and

the implications of treatment alternatives and to make an independent, voluntary decision” as part of the process of seeking informed consent. American Medical Association, Code of Medical

Ethics Opinion 2.1.1, available at https://www.ama-assn.org/system/files/2019-06/code-of-medical-ethics-chapter-2.pdf (last visited April 5, 2021). See also Gostin, LO. Public Health Law,

217-218 (2000) (discussing the four elements of the doctrine of informed consent: information, competency, voluntariness, and specificity).

For a discussion of strategies to improve informed consent processes for minority communities, see Quinn, S.C., et al. Improving Informed Consent with Minority Participants: Results from

Researcher and Community Surveys, Journal of Empirical Research on Human Research Ethics, 7(5): 44-55 (Dec. 2012).

Bulletin No. 2021–30

July 26, 2021

consent freely, without undue influence,

fraud, or duress. If post-stabilization services must be provided quickly after the

emergency services are provided, it may

be challenging for the individual or their

authorized representative to have adequate time to make a clear-minded decision regarding consent. Consent obtained

through a threat of restraint or immediacy

of the need for treatment is not voluntary.

In addition, the emergency physician or

treating provider should consider whether the individual has reasonable options

regarding post-stabilization services,

transport, or service provider or facility. The Departments are of the view that

the post-stabilization notice and consent

procedures should generally be applied

in limited circumstances, where the individual knowingly and purposefully seeks

care from a nonparticipating provider or

facility (such as deciding to go under the

care of a specific provider or facility that

the individual is familiar or comfortable

with), and that the process should not be

permitted to circumvent the consumer

protections in the No Surprises Act.

Fourth, the provider or facility must

satisfy any additional requirements or

prohibitions as may be imposed under

applicable state law. These interim final

rules include this criterion recognizing

that some state laws do not permit exceptions to state balance billing protections,

such as allowing individuals to consent to

waive protections. Thus, states may impose stricter standards by which post-stabilization services will be exempted from

the surprise billing protections under these

interim final rules, or states might not permit exceptions at all. This requirement is

codified in the HHS interim final rules at

45 CFR 149.410(b)(5).

The No Surprises Act authorizes the

Departments to specify other conditions

that must be satisfied for post-stabilization

services to be excepted from the definition

of emergency services for purposes of the

No Surprises Act. The Departments solicit comments on the conditions described

earlier in this section. The Departments

also seek comment on whether there are

any additional conditions that would be

appropriate to designate under the defi-

nition of emergency services, such as

conditions relating to coordinating care

transitions to participating providers and

facilities. The Departments also solicit

comments on what guidelines, beyond

state laws regarding informed consent,

may be needed to determine when an individual is in a condition to receive the

written notice and provide consent. For

example, are standards needed to account

for individuals who are experiencing severe pain, intoxication, incapacitation, or

dementia after being stabilized following

an emergency medical condition?

iii. Non-Emergency Services Performed

by Nonparticipating Providers at

Participating Health Care Facilities

Section 9816(b) of the Code, section

716(b) of ERISA, section 2799A-1(b) of

the PHS Act, and these interim final rules,

apply surprise billing protections in the

case of non-emergency services furnished

by nonparticipating providers during a

visit by a participant, beneficiary, or enrollee at a participating health care facility, unless the notice and consent requirements, as specified in these interim final

rules, have been met.

Specifically, if a group health plan, or

a health insurance issuer offering group

or individual health insurance coverage,

provides or covers benefits with respect to

items and services (other than emergency

services to which section 9816(a) of the

Code, section 716(a) of ERISA, or section

2799A-1(a) of the PHS Act applies), the

plan or issuer must cover such items and

services furnished to a participant, beneficiary, or enrollee of the plan or coverage by

a nonparticipating provider with respect to

a visit at a participating health care facility in accordance with these interim final

rules, including the requirements regarding cost sharing, payment amounts, and

processes for resolving billing disputes

described elsewhere in this preamble.

iv. Health Care Facilities

These interim final rules, consistent

with section 9816(b)(2)(A) of the Code,

section 716(b)(2)(A) of ERISA, and sec-

tion 2799A-1(b)(2)(A) of the PHS Act,

define a participating health care facility, in the context of non-emergency services, as a health care facility that has a

contractual relationship directly or indirectly with a group health plan or health

insurance issuer offering group or individual health insurance coverage setting

forth the terms and conditions on which

a relevant item or service is provided to

a participant, beneficiary, or enrollee under the plan or coverage, respectively.

These interim final rules also specify that

a single case agreement between a health

care facility and a plan or issuer, used to

address unique situations in which a participant, beneficiary, or enrollee requires

services that typically occur out-of-network constitutes a contractual relationship for purposes of this definition, and

is limited to the parties to the agreement

with respect to the particular individual involved. Thus, when non-emergency

services are furnished by a nonparticipating provider at a health care facility that

has a single case agreement in place with

respect to the individual being treated, as

opposed to an agreement or contract that

would apply to all the plan’s or issuer’s

participants, beneficiaries, or enrollees,

those non-emergency services would be

subject to the protections described in 26

CFR 54.9816-5T, 29 CFR 2590.716-5,

and 45 CFR 149.120, as applicable, and

the corresponding requirements on providers at 45 CFR 149.420. The Departments are of the view that it is reasonable

that an individual would expect items and

services delivered at a health care facility

that has a single case agreement in place

with respect to the individual’s care to be

delivered on an in-network basis. Thus,

these interim final rules apply the same

protections in this circumstance as would

apply at health care facilities that participate in the plan or issuer’s network.32

The facility is considered a participating

facility only with respect to items and services furnished to the individual whose

care is covered by the single case agreement. Similarly, these interim final rules

define a participating emergency facility

to include a facility that has a single case

agreement in place with a plan or issu-

In contrast, as discussed in section III.B.2.vi of this preamble, these interim final rules do not include negotiated rates under single-case agreements in the methodology for calculating the

qualifying payment amount.

July 26, 2021

Bulletin No. 2021–30

er with respect to a specific individual’s

care. The Departments seek comment on

this approach.

For this purpose, a health care facility described in the statute is each of the

following, in the context of non-emergency services: (1) a hospital (as defined in

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.

In addition, section 9816(b)(2)(A)(ii)

(V) of the Code, section 716(b)(2)(A)(ii)

(V) of ERISA, and section 2799A-1(b)(2)

(A)(ii)(V) of the PHS Act authorize the

Departments to designate additional facilities as health care facilities. The Departments solicit comments on other facilities

that would be appropriate to designate as

health care facilities. The Departments

are interested in comments identifying

types of facilities in which surprise bills

frequently arise, and are particularly interested in comments regarding whether

urgent care centers or retail clinics should

be designated as health care facilities for

purposes of these interim final rules.

The Departments recognize that state

regulation of urgent care centers varies

significantly, as does the type of services

they are permitted to provide under state

law. Under these interim final rules, emergency services provided at urgent care

centers that are licensed in a manner that

brings them within the definition of independent freestanding emergency department would be subject to cost-sharing and

balance billing protections, among others. However, given significant variation

in state law definitions, urgent care centers are not included within the definition

of health care facilities, in the context of

non-emergency services. Thus, in cases

where non-emergency services are furnished at participating urgent care centers

by nonparticipating providers, those services would not receive the protections

under these interim final rules. However,

the Departments are of the view that it is

possible that individuals may be using urgent care centers (regardless of how they

are licensed) in a similar way to how they

use independent freestanding emergency

departments, in which case it may be ap-

Bulletin No. 2021–30

propriate to designate urgent care centers

as health care facilities. The Departments

seek comment on the degree to which individuals may be using urgent care centers

in a similar way to how they use independent freestanding emergency departments.

The Departments seek data on how frequently surprise bills arise in the context

of urgent care centers. The Departments

also seek comment on whether plans and

issuers generally contract separately with

urgent care centers and the providers who

work at the centers, and how frequently

contracting practices result in nonparticipating providers furnishing services at

participating urgent care centers. The Departments also seek comment on potential

definitions of the term urgent care center.

v. Items and Services within the Scope of

a Visit

In addition to items and services furnished by a provider at the facility, a “visit” to a participating health care facility

includes the furnishing of equipment and

devices, telemedicine services, imaging

services, laboratory services, and preoperative and postoperative services, regardless of whether the provider furnishing

such items or services is at the facility.

These services are not limited based on

whether the provider furnishing the services is physically located at the facility. For example, if a sample is collected

during an individual’s hospital visit and

sent to an off-site laboratory, the laboratory services would be considered to be part

of the individual’s visit to a participating

health care facility, if laboratory services

are covered by the plan or coverage. Similarly, if an individual receives a consultation with a specialist via telemedicine

during a visit to a participating hospital,

those telemedicine services would be considered part of the individual’s visit to a

participating health care facility. The statutory definition of “visit” also provides

authority for the Departments to specify

other items and services. The Departments

solicit comments regarding other items

and services that would be appropriate to

include within the scope of a visit for purposes of these interim final rules.

The No Surprises Act and these interim final rules provide for exceptions to the

balance billing prohibitions and cost-shar-

ing requirements if the participant, beneficiary, or enrollee is provided a compliant

written notice and consents to receive such

services from a nonparticipating provider

at a participating health care facility. However, these exceptions do not apply with

respect to certain ancillary services (in the

context of non-emergency services) and

other services under certain conditions, as

discussed later in this preamble.

vi. Air Ambulance Services

Section 105 of the No Surprises Act

added section 9817 of the Code, section

717 of ERISA, and section 2799A-2 of the

PHS Act to address surprise air ambulance

bills. These provisions apply in the case of

a participant, beneficiary, or enrollee who

receives services from a nonparticipating

provider of air ambulance services, meaning medical transport by a rotary-wing air

ambulance, as defined in 42 CFR 414.605,

or fixed-wing air ambulance, as defined

in 42 CFR 414.605. These interim final

rules apply these provisions where a plan

or coverage generally has a network of

participating providers and provides or

covers any benefits for air ambulance services, even if the plan or coverage does

not have in its network any providers of

air ambulance services. With respect to air

ambulance services furnished by nonparticipating providers (including inter-facility transports), plans and issuers must comply with the requirements regarding cost

sharing, payment amounts, and processes

for resolving billing disputes described

elsewhere in this preamble, if such services would be covered if provided by a

participating provider with respect to such

plan or coverage.

2. Determination of the Cost-Sharing

Amount and Payment Amount to

Providers and Facilities

i. In General

Under section 9816(a) of the Code, section 716(a) of ERISA, section 2799A-1(a)

of the PHS Act, and these interim final

rules, if a plan or issuer provides or covers any benefits with respect to services in

an emergency department of a hospital or

with respect to emergency services in an

independent freestanding emergency de-

July 26, 2021

partment, the cost-sharing requirement for

such services performed by a nonparticipating provider or nonparticipating emergency facility must not be greater than the

requirement that would apply if such services were provided by a participating provider or a participating emergency facility.

Additionally, if a plan or issuer provides

or covers any benefits for non-emergency

items and services furnished by a nonparticipating provider with respect to a visit at

a participating health care facility, unless

the provider has satisfied certain notice

and consent criteria with respect to such

items and services, the plan or issuer may

not impose a cost-sharing requirement

for such items and services that is greater than the cost-sharing requirement that

would apply had such items or services

been furnished by a participating provider. Similarly, if a plan or issuer provides or

covers benefits for air ambulance services,

the plan or issuer must cover such services

from a nonparticipating provider in such a

manner that the cost-sharing requirement

with respect to such services must be the

same requirement that would apply if such

services were provided by a participating

provider. For example, if a plan or issuer imposes a 20 percent coinsurance rate

for emergency services from participating

providers or participating emergency facilities, the plan or issuer may not impose

a coinsurance rate on emergency services

from nonparticipating providers or facilities that exceeds 20 percent. Stakeholders have reported that network participation rates are low among providers of air

ambulance services. In instances where a

plan or issuer does not have an established

cost-sharing requirement that applies specifically to participating providers, the

plan or issuer must calculate the cost-sharing amount using the generally applicable

cost-sharing requirement for the relevant

item or service under the plan or coverage.

Under sections 9816(a) and (b) and

9817(a) of the Code, sections 716(a)

and (b) and 717(a) of ERISA, sections

2799A-1(a) and (b) and 2799A-2(a) of the

PHS Act, and these interim final rules, any

cost-sharing payments for emergency services, non-emergency services furnished

by a nonparticipating provider in a participating health care facility, and air ambulance services furnished by a nonparticipating provider must be counted toward

July 26, 2021

any in-network deductible or out-of-pocket maximums applied under the plan or

coverage (including the annual limitation

on cost sharing under section 2707(b) of

the PHS Act) (as applicable), respectively

(and these in-network deductibles and outof-pocket maximums must be applied) in

the same manner as if such cost-sharing

payments were made with respect to services furnished by a participating provider

or facility.

ii. Cost-Sharing Amount

Section 9816(a)(1)(C)(iii) of the Code,

section 716(a)(1)(C)(iii) of ERISA, section 2799A-1(a)(1)(C)(iii) of the PHS Act,

and these interim final rules also specify

that for emergency services furnished by

a nonparticipating emergency facility, and

for non-emergency services furnished by

nonparticipating providers in a participating health care facility, cost sharing is

generally calculated as if the total amount

that would have been charged for the services by a participating emergency facility

or participating provider were equal to the

recognized amount for such services, as

defined by the statute and in these interim

final rules.

The “recognized amount” is: (1) an

amount determined by an applicable

All-Payer Model Agreement under section 1115A of the Social Security Act; (2)

if there is no applicable All-Payer Model Agreement, an amount determined by

a specified state law; or (3) if there is no

applicable All-Payer Model Agreement

or specified state law, the lesser of the

amount billed by the provider or facility or

the QPA, which under these interim final

rules generally is the median of the contracted rates of the plan or issuer for the

item or service in the geographic region.

By requiring plans and issuers to calculate the cost-sharing amount using the recognized amount, rather than the amount

the plan or issuer ultimately pays the nonparticipating provider or nonparticipating

emergency facility for the furnished items

or services, the No Surprises Act and

these interim final rules limit the effect

of provider-payer disputes about payment

amounts on participant, beneficiary, or enrollee cost sharing. Under the statute and

these interim final rules, the provider or

facility and plan or issuer separately deter-

mine the total payment amount for the furnished items or services, but that amount

generally does not affect the cost-sharing

amount the individual must pay.

The Departments are aware that there

may be some instances where a nonparticipating health care provider or facility

might bill a plan or issuer for an item or

service that is subject to these surprise

billing protections in an amount less than

the QPA. For example, this might be a

relatively common occurrence for items

whose patent expires after 2019, in instances where the QPA is based off the

median of the contracted rates from 2019.

In these instances, assuming the plan or

issuer would not pay more than the billed

charge, calculating cost sharing based on

the QPA would require a participant, beneficiary, or enrollee to pay a higher percentage in cost sharing than if the items or

services had been furnished by a participating provider. However, section 9816(a)

(1)(C)(ii) of the Code, section 716(a)(1)

(C)(ii) of ERISA, and section 2799A-1(a)

(1)(C)(ii) of the PHS Act expressly prohibit plans and issuers from applying a

cost-sharing requirement that is greater

than the requirement that would apply if

such services were provided by a participating provider or a participating emergency facility. Therefore, under these interim final rules, in circumstances where

a specified state law or All-Payer Model

Agreement does not apply to determine

the cost-sharing amount, cost sharing

must be based on the lesser of the QPA or

the amount billed by the provider for the

item or service. The different methods for

determining the recognized amount are

discussed in separate sections of this section III.B.2 of this preamble.

With respect to air ambulance services

furnished by nonparticipating providers,

the recognized amount is not used for purposes of determining cost sharing. Rather,

the statute specifies that the cost-sharing

requirement with respect to such services

must be the same requirement that would

apply if such services were provided by a

participating provider, and any coinsurance or deductible must be based on rates

that would apply for such services if they

were furnished by a participating provider.

These interim final rules require that plans

and issuers base any coinsurance and deductible for air ambulance services pro-

Bulletin No. 2021–30

vided by a nonparticipating provider on

the lesser of the QPA or the billed amount.

The Departments have concluded that this

policy is consistent with the statute’s general intent to protect participants, beneficiaries, and enrollees from excessive bills,

and to remove the individuals as much

as possible from disputes between plans

and issuers and providers of air ambulance services. In addition, using the QPA

is one method of ensuring that any coinsurance or deductible is based on rates

that would apply for the services if they

were furnished by a participating provider, given that the QPA is generally based

on median contracted rates, as opposed to

rates charged by nonparticipating providers, and is one basis used for determining

the cost‑sharing amount in the context of

emergency services and items and services

furnished by nonparticipating providers at

participating health care facilities.

As discussed in this preamble, the

Airline Deregulation Act of 1978 (ADA)

broadly preempts state laws that relate to

air ambulance providers, and the Departments are unaware of any instances in

which an All-Payer Model Agreement or

a specified state law might apply. In addition, since an All-Payer Model Agreement or a specified state law would not

need to follow an approach based on rates

that would apply for such services if they

were furnished by a participating provider (for example, Medicare rates could be

used instead), it is the Departments’ view

that Congress did not intend to apply the

concept of the recognized amount to nonparticipating providers of air ambulance

services. The Departments seek comment

on any potential alternate approaches for

calculating the cost-sharing amount for

air ambulance services furnished by nonparticipating providers of air ambulance

services.

iii. Out-of-Network Rate

In addition to establishing requirements

related to cost sharing, the No Surprises

Act and these interim final rules also establish requirements related to the total

amount paid by a plan or issuer for items

and services subject to these provisions,

referred to as the out-of-network rate. The

plan or issuer must make a total payment

equal to one of the following amounts,

less any cost sharing from the participant,

beneficiary, or enrollee: (1) an amount determined by an applicable All-Payer Model Agreement under section 1115A of the

Social Security Act; (2) if there is no such

applicable All-Payer Model Agreement,

an amount determined by a specified state

law; (3) in the absence of an applicable

All-Payer Model Agreement or specified

state law, if the plan or issuer and the provider or facility have agreed on a payment

amount, the agreed on amount; or (4) if

none of those three conditions apply, and

the parties enter into the IDR process and

do not agree on a payment amount before

the date when the IDR entity makes a determination of the amount, the amount

determined by the IDR entity. These four

approaches for determining the out-ofnetwork rate are discussed more fully later

in this preamble.

The requirements related to cost sharing and to the out-of-network rate apply

when a group health plan or coverage

provides or covers benefits for services

subject to these provisions. The Departments interpret this to mean that the requirements apply when a plan or issuer

provides coverage for such items and services, pursuant to the terms of the plan or

coverage, even in cases where an individual has not satisfied their deductible.33 Because the cost-sharing amount is calculated using the recognized amount (or for air

ambulance services the lesser of the QPA

or the billed amount) that is calculated

separately from the determination of the

out-of-network rate, these requirements

may result in circumstances where a plan

or issuer must make payment prior to an

individual meeting their deductible. Specifically, where the surprise billing protections apply, and the out-of-network rate

exceeds the amount upon which cost sharing is based, a plan or issuer must pay the

provider or facility the difference between

the out-of-network rate and the cost-sharing amount (the latter of which in this case

would equal the recognized amount, or the

lesser of the QPA or the billed amount),

even in cases where an individual has not

satisfied their deductible, as illustrated in

the following example.

Example. An individual is enrolled in a

high deductible health plan with a $1,500

deductible and has not yet accumulated

any costs towards the deductible at the

time the individual receives emergency services at an out-of-network facility.

The plan determines that the recognized

amount for the services is $1,000. Because

the individual has not satisfied the deductible, the individual’s cost-sharing amount

is $1,000, which accumulates towards

the deductible. The out-of-network rate

is subsequently determined to be $1,500.

Under the requirements of the statute and

these interim final rules, the plan is required to pay the difference between the

out-of-network rate and the cost-sharing

amount. Therefore, the plan pays $500

for the emergency services, even though

the individual has not satisfied the deductible. The individual’s out-of-pocket costs

are limited to the amount of cost-sharing

originally calculated using the recognized

amount (that is, $1,000).

Although such a payment would generally cause a high deductible health plan to

lose its status as a high deductible health

plan, the No Surprises Act added section

223(c)(2)(F) to the Code to specify that a

plan shall not fail to be treated as a high

deductible health plan by reason of providing benefits for medical care in accordance with section 9816 or 9817 of the

Code, section 716 or 717 of ERISA, or

section 2799A–1 or 2799A–2 of the PHS

Act (the provisions added by the No Surprises Act related to surprise medical and

air ambulance bills), or any state law providing similar protections to individuals,

prior to the satisfaction of the deductible.34

iv. Specified State Law

Under section 9816(a)(3)(I) of the

Code, section 716(a)(3)(I) of ERISA, section 2799A-1(a)(3)(I) of the PHS Act, and

these interim final rules, a specified state

law is a state law that provides a method

for determining the total amount payable

Absent the balance billing protections under the No Surprises Act and these interim final rules, the plan or issuer would not generally be expected to make a payment to the provider or

facility prior to an individual satisfying the deductible.

See section IV.A.5 of this preamble for a discussion of HHS-only interim final rules addressing catastrophic plans’ compliance with these requirements.

Bulletin No. 2021–30

July 26, 2021

under a group health plan or group or

individual health insurance coverage to

the extent the state law applies. This includes instances where the Departments

have interpreted this term to include state

laws where the state law applies because

the state has allowed a plan that is not

otherwise subject to applicable state law

an opportunity to opt in to a program established under state law, subject to section 514 of ERISA, for an item or service

furnished by a nonparticipating provider

or nonparticipating emergency facility.

In cases where a specified state law applies, the recognized amount (the amount

upon which cost sharing is based) and

out-of-network rate for emergency and

non-emergency services subject to the

surprise billing protections is calculated

based on such specified state law.

In order for a state law to determine

the recognized amount or out-of-network

rate, any such law must apply to: (1) the

plan, issuer, or coverage involved, including where a state law applies because the

state has allowed a plan that is not otherwise subject to applicable state law an

opportunity to opt in, subject to section

514 of ERISA; (2) the nonparticipating

provider or nonparticipating emergency

facility involved (and in the case of state

out-of-network rate laws, the nonparticipating provider of air ambulance services

involved); and (3) the item or service involved. In instances where a state law does

not satisfy all of these criteria, the state

law does not apply to determine the recognized amount or out-of-network rate. For

example, where a particular state surprise

billing law that governs the recognized

amount and out-of-network rate applies to

a particular plan or coverage but does not

apply to nonparticipating neonatologists,

who provide a specified ancillary service

under section 2799B-2(b)(2) of the PHS

Act, the consumer protections under federal law would determine the recognized

amount and out-of-network rate with respect to neonatology services while the

state law would apply with respect to

other provider specialties covered under

that state law. Similarly, where a state’s

surprise billing laws apply only to health

maintenance organizations (HMOs), federal protections against surprise billing

would govern with respect to other types

of coverage while the state protections

would apply to HMOs for purposes of determining the recognized amount and outof-network rate.

The same definition of “out-of-network

rate”— including the reference to specified state laws—applies to air ambulance

services as to other services. The Departments note, however, that the ADA states

in relevant part: “…a State, political subdivision of a State, or political authority of

at least 2 States may not enact or enforce

a law, regulation, or other provision having the force and effect of law related to a

price, route, or service of an air carrier that

may provide air transportation under this

subpart.”35 Assuming that a provider of air

ambulance services is an “air carrier” covered by this provision, as is typical,36 the

provision preempts state laws that would

limit the amount of payment that the provider of air ambulance services would otherwise be entitled to receive.37 Given the

applicability of the ADA, the Departments

are not aware of any state laws that would

meet the criteria to set the out-of-network

rate for nonparticipating providers of air

ambulance services when providing services subject to the protections in the No

Surprises Act.

The Departments also seek comment

on whether health insurance issuers,

health care providers, or health care facilities, in instances where they are not

otherwise subject to a specified state law

that provides for a method for determining the total amount payable under a

group health plan or group or individual

health insurance coverage, should have

an opportunity, for purposes of these interim final rules, to opt in to a program

established under state law, with respect

to an item or service furnished by a nonparticipating provider or nonparticipating

emergency facility. The Departments seek

comment on whether this approach would

allow for more flexibility for state laws to

apply when, for example, by their terms,

they apply to the health insurance issuer

and item and service in question, but not

to the provider; whether an issuer, provider, or facility would still be subject to any

specified state laws in their “home” state if

they opt in to a program established under

another state’s law; and whether an issuer,

provider, or facility should be permitted to

opt in on an episodic basis. The Departments are concerned that allowing providers and facilities to opt in to a program

established under state law could increase

health care prices if providers and facilities selectively opt in to state programs

that favor providers and facilities in the

determination of the out-of-network rate.

The Departments seek comment on the

potential impact of expanding the ability

to opt in to a state program to providers

and facilities. The Departments specifically seek comment from health insurance issuers, health care providers, or health care

facilities located within or serving underserved and rural communities, and other

communities facing a shortage of providers on the impact of these provisions on

services, coverage, and payment for and

within medically underserved, rural, and

urban communities.

a. State Law Interaction with ERISA

Under the general preemption clause

of section 514(a) of ERISA, state laws

are preempted to the extent that they “relate” to employee benefit plans subject to

title I of ERISA. There are, however, a

number of exceptions to this broad preemption provision. Section 514(b)(2)(A),

referred to as the “savings clause,” provides in pertinent part that “nothing in this

title (title I of ERISA) shall be construed

to exempt or relieve any person from any

law of any State which regulates insurance . . . .” Additionally, the preemption

provisions of section 731 of ERISA (implemented in 29 CFR 2590.731(a)) apply

so that the requirements of part 7 of ERISA are not to be “construed to supersede

49 U.S.C. 41713(b).

An air ambulance provider is a covered “air carrier” if it has economic authority from the Department of Transportation to provide interstate air transportation. Most air ambulance providers

have such authority under the provisions of 14 CFR Part 298. See, e.g., Scarlett v. Air Methods Corp., 922 F.3d 1053 (10th Cir. 2019); Air Evac EMS v. Cheatham, 910 F.3d 751 (4th Cir. 2018).

See, e.g., Guardian Flight LLC v. Godfread, 991 F.3d 916, 921 (8th Cir. 2021) (holding that ADA preempted state law prohibiting out-of-network air ambulance providers from balance

billing and requiring them to accept amounts paid by insurers); Bailey v. Rocky Mountain Holdings, LLC, 889 F.3d 1259, 1269-72 (11th Cir. 2018) (holding that ADA preempted state law that

prohibited air ambulance providers from collecting more than amount specified in fee schedule).

July 26, 2021

Bulletin No. 2021–30

any provision of state law which establishes, implements, or continues in effect

any standard or requirement solely relating to issuers in connection with group

health insurance coverage except to the

extent that such standard or requirement

prevents the application of a ‘requirement’ of a federal standard.” The conference report accompanying the Health

Insurance Portability and Accountability

Act of 1996 (HIPAA), which applied this

preemption standard to state laws with

respect to its title I health insurance reform provisions, indicates that this preemption is intended to be the “narrowest”

preemption of states’ laws.38 States may

therefore continue to apply state law requirements to issuers except to the extent

they prevent the application of ERISA requirements. Additionally, states have significant latitude to impose requirements

on issuers that are more restrictive than

the federal law. State laws that impose

comparable or additional requirements

on health insurance issuers would generally constitute a “specified state law” notwithstanding section 514 of ERISA and

would continue to apply.

While section 514(b)(2)(A) saves from

ERISA preemption state laws regulating

insurance, section 514(b)(2)(B) of ERISA,

referred to as the “deemer clause,” provides that a state law “purporting to regulate insurance” generally cannot deem an

employee benefit plan to be an insurance

company (or in the business of insurance)

for the purpose of regulating such a plan

as an insurance company (section 514(b)

(6)(A) creates a partial exception to the

deemer clause for employee welfare benefit plans that are also multiple employer

welfare arrangements (MEWAs)). Thus,

to the extent that a state law has a “reference to” or an impermissible connection

with ERISA plans (such as laws that govern the payment of benefits), these laws

are preempted, to the extent they apply

to self-insured plans sponsored by private

employers.39 However, section 514 of ERISA does not prevent states from expanding access to a state program and allowing self-insured, ERISA-covered plans to

choose to voluntarily comply with it. For

example, the Departments allowed such

plans to comply with their obligations for

external review under section 2719 of the

PHS Act by voluntarily opting in to the

state external review process.40 Similarly,

these interim final rules allow self-insured

plans (including non-federal governmental plans) to voluntarily opt in to state law

that provides for a method for determining

the cost-sharing amount or total amount

payable under such a plan, where a state

has chosen to expand access to such plans,

to satisfy their obligations under section

9816(a)-(d) of the Code, section 716(a)(d) of ERISA, and section 2799A-1(a)(d) of the PHS Act. A group health plan

that opts in to such a state law must do

so for all items and services to which the

state law applies. Under these interim final

rules, a self-insured plan that has chosen

to opt in to a state law must prominently display in its plan materials describing

the coverage of out-of-network services a

statement that the plan has opted in to a

specified state law, identify the relevant

state (or states), and include a general

description of the items and services provided by nonparticipating facilities and

providers that are covered by the specified

state law.

b. Examples Involving Specified State

Laws

The following examples illustrate how

state laws may or may not apply. In each

example, assume there is no applicable

All-Payer Model Agreement that would

determine the recognized amount or outof-network rate.

Example 1. (i) Facts. A health insurance issuer

licensed in State A covers a specific non-emergency service that is provided to an enrollee by a nonparticipating provider in a participating health care

facility, both of which are also licensed in State A.

State A has a law that prohibits balance billing for

non-emergency services provided to individuals by

nonparticipating providers in a participating health

care facility, and provides for a method for determining the cost-sharing amount and total amount payable. The state law applies to health insurance issuers

and providers licensed in State A. The state law also

applies to the type of service provided.

(ii) Conclusion. In this Example 1, State A’s law

would apply to determine the recognized amount and

the out-of-network rate.

Example 2. (i) Facts. Same facts as Example 1, except that the nonparticipating provider and participating

health care facility are located and licensed in State B.

State A’s law does not apply to the provider, because the

provider is licensed and located in State B.

(ii) Conclusion. In this Example 2, State A’s law

would not apply to determine the recognized amount

and out-of-network rate. Instead, the lesser of the

billed amount or QPA would apply to determine the

recognized amount, and either an amount determined

through agreement between the provider and issuer

or an amount determined by an IDR entity would apply to determine the out-of-network rate.

Example 3. (i) Facts. An individual receives

emergency services at a nonparticipating hospital located in State A. The emergency services furnished

include post-stabilization services, as described in 26

CFR 54.9816-4T(c)(2)(ii), 29 CFR 2590.716-4(c)(2)

(ii), and 45 CFR 149.110(c)(2)(ii). The individual’s

coverage is through a health insurance issuer licensed

in State A, and the coverage includes benefits with

respect to services in an emergency department of a

hospital. State A has a law that prohibits balance billing for emergency services provided to an individual

at a nonparticipating hospital located in State A and

provides a method for determining the cost-sharing

amount and total amount payable in such cases. The

law applies to issuers licensed in State A. However,

State A’s law has a definition of emergency services

that does not include post-stabilization services.

(ii) Conclusion. In this Example 3, State A’s law

would apply to determine the cost-sharing amount

and out-of-network rate for the emergency services, as defined under State A’s law. State A’s law

would not apply for purposes of determining the

cost-sharing amount and out-of-network rate for the

post-stabilization services. Instead, the lesser of the

QPA or billed amount would apply to determine the

recognized amount, and either an amount determined

through agreement between the hospital and issuer

or an amount determined by an IDR entity would

apply to determine the out-of-network rate, with respect to post-stabilization services.

Example 4. (i) Facts. A self-insured plan, subject

to ERISA, covers a specific non-emergency service

that is provided to a participant by a nonparticipating

provider in a participating health care facility, both of

which are licensed in State A. State A has a law that

prohibits balance billing for non-emergency services

provided to individuals by nonparticipating providers in a participating health care facility, and provides for a method for determining the cost-sharing

amount and total amount payable. The law applies

to health insurance issuers and providers licensed in

State A, and provides that plans that are not otherwise subject to the law may opt in. The law also applies to the type of service provided. The self-insured

plan has opted in.

(ii) Conclusion. In this Example 4, State A’s law

would apply to determine the recognized amount and

the out-of-network rate.

The Departments are of the view that

it would be uncommon for laws of more

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

See Gobeille v. Liberty Mutual Ins. Co. 577 U.S. 312 (2015); Egelhoff v. Egelhoff, 532 U.S. 141 (2001).

See, e.g., Technical Release 2010-01; 76 FR 37208, 37211 fn. 13 (June 24, 2011).

Bulletin No. 2021–30

July 26, 2021

than one state to each apply to the same

health insurance issuer, and to the same

provider for a particular item or service.

Therefore, the Departments do not foresee

many instances where there might be a

question as to which state’s law applies to

determine the recognized amount or outof-network rate. However, in such uncommon scenarios, one approach might be for

the states involved to make that decision.

Another approach might be that the law

enacted by the state in which the service

is provided would apply. Yet another approach would be for the QPA to apply to

determine the recognized amount, and

either a negotiated amount or an amount

determined by an IDR entity to apply to

determine the out-of-network rate. The

Departments seek comment on these and

any other approaches for resolving this

choice-of-law question. The Departments

also seek comment on how states have

handled such questions prior to the enactment of the No Surprises Act, should these

types of conflicts exist.

The Departments are of the view that

Congress intended that where state law

provides a method for determining the total amount payable under a plan or coverage, the state law regarding balance billing

would govern, rather than the alternative

method for determining the out-of-network rate under the No Surprises Act. The

Departments interpret the statutory phrase

“a State law that provides for a method

for determining the total amount payable

under such a plan, coverage, or issuer, respectively” broadly as referring not only

to state laws that set a mathematical formula for determining the out-of-network

rate, or that set a predetermined amount

for an out-of-network item or service.

Rather, the Departments interpret that language to also include, for example, state

laws that require or permit a plan or issuer and a provider or facility to negotiate,

and then to engage in a state arbitration

process to determine the out-of-network

rate. Such state laws provide a process

for determining the total amount payable,

and in such instances, the timeframes and

processes under such a state law related to

negotiations and arbitration would apply,

as opposed to the timeframes and IDR

process under the No Surprises Act.

In addition, the Departments are of

the view that Congress did not intend

for the No Surprises Act to preempt provisions in state balance billing laws that

address issues beyond how to calculate

the cost-sharing amount and out-of-network rate. To the extent state laws do

not prevent the application of a federal

requirement or prohibition on balance

billing, the Departments are of the view

that such state laws are consistent with the

statutory framework of the No Surprises

Act and would not be preempted.41 This

view extends to any state law that provides balance billing protections beyond

what these interim final rules provide. In

fact, Congress specifically indicated that

such state balance billing laws may continue in effect along with the balance billing protections set forth in the statute, by

requiring in new section 2799B-3 of the

PHS Act that providers must disclose to

participants, beneficiaries, and enrollees

information about federal balance billing

protections, plus any other protections

that apply under state law. A more detailed

discussion of the disclosure requirements

appears in section IV.A.3 of this preamble,

which discusses the provisions codified in

45 CFR 149.430.

v. All-Payer Model Agreements

As described earlier, in instances where

an All-Payer Model Agreement is applicable, the recognized amount (the amount

upon which cost sharing is based with respect to items and services furnished by

nonparticipating emergency facilities, and

nonparticipating providers of nonemergency items and services in participating

facilities) and the out-of-network rate

are determined using the amount that the

state approves under the All-Payer Model

Agreement for such items or services.

An All-Payer Model Agreement is

an agreement between the Centers for

Medicare & Medicaid Services (CMS)

and a state to test and operate systems of

all-payer payment reform for the medical

care of residents of the state, under the

authority granted under section 1115A the

Social Security Act. Under the terms of

section 1115A of the Social Security Act,

such Agreements may waive specific provisions of titles XI and XVIII and of sections 1902(a)(1), 1902(a)(13), 1903(m)(2)

(A)(iii), and 1934 (other than subsections

(b)(1)(A) and (c)(5) of such section) as

may be necessary solely for the purposes of testing the Model. All-Payer Model

Agreements can vary significantly by state,

including in using different approaches

for approving payment amounts for items

or services covered by the Agreements.

The Departments are of the view that it

is important to maximally preserve states’

abilities to test all-payer payment reform

through these Agreements, including their

abilities to do so using varied approaches

to setting payment amounts. These interim

final rules defer to the state to determine

the circumstances under which, and how,

it will approve an amount for an item or

service under a payment system established by an All-Payer Model Agreement.

Participating in an all-payer model governed by an All-Payer Model Agreement

may be voluntary or mandatory for a

given payer; the system of all-payer payment reform may apply statewide or only

in certain regions, such as rural regions;

and payments under the system of all-payer payment reform may apply only to

certain providers or facilities and certain

items and services.42 To account for potential variations among All-Payer Model

Agreements, the Departments are proposing to take a similar approach that these

interim final rules establish with respect

to state laws. Specifically, in order for an

All-Payer Model Agreement to determine

the recognized amount or out-of-network

rate, any such Agreement must apply to

the coverage involved; to the nonparticipating provider or nonparticipating emergency facility involved (and in the case of

the out-of-network rate, to the nonpartici-

Section 731(a) of ERISA and section 2724(a) of the PHS Act. As noted above, the HIPAA conference report indicates that this preemption standard is intended to be the “narrowest” preemption of states’ laws. See House Conf. Rep. No. 104-736, at 205, reprinted in 1996 U.S. Code Cong. & Admin. News 2018.

See, e.g., CMS. Vermont All-Payer ACO Model, (updated Apr. 8, 2020) available at https://innovation.cms.gov/innovation-models/vermont-all-payer-aco-model; CMS. Pennsylvania

Rural Health Model, (updated Jan. 1, 2021) available at https://innovation.cms.gov/innovation-models/pa-rural-health-model; CMS. Maryland Total Cost of Care Model available at https://

innovation.cms.gov/innovation-models/md-tccm.

July 26, 2021

Bulletin No. 2021–30

pating provider of air ambulance services

involved); and to the item or service involved. In instances where an All-Payer

Model Agreement does not satisfy all of

these criteria, the Agreement does not apply to determine the recognized amount or

out-of-network rate, and, unless a specified state law applies, the recognized

amount would be determined by the QPA

(or the billed charge if less than the QPA),

and the out-of-network rate would be the

amount determined through agreement

between the provider or facility and plan

or issuer or the IDR process.

Under these interim final rules, an

All-Payer Model Agreement is treated as

applicable to a given provider or facility and plan or issuer if the terms of the

Agreement, or any agreements described

in that Agreement, are binding upon the

provider, facility, plan, or issuer, which

may occur through different mechanisms.

For example, under the All-Payer Model

Agreement for the Maryland Total Cost

of Care Model and under the Maryland

state all-payer law, all payers (including

group health plans and health insurance

issuers offering group or individual health

insurance coverage) pay the amount determined under the Agreement with respect

to hospital services covered by the Agreement.43 However, the Agreement generally does not apply to the amount paid to

a provider, such as a physician, who furnishes services at a hospital. In Maryland,

therefore, the recognized amount and

out-of-network rate would be set by the

All-Payer Model Agreement for all plans

and issuers for hospital charges covered

under the Agreement. But, the All-Payer

Model Agreement would generally not

be used to set the recognized amount or

out-of-network rate with respect to a nonparticipating provider’s charges, unless

the All-Payer Model Agreement, or any

agreements described in that Agreement,

specify the payment amount in a particular instance.

Although under state law plans and

issuers in Maryland do not have discretion regarding whether to participate in

the all-payer rate setting system under

the Maryland Total Cost of Care Model,

participation in other state-based models governed by All-Payer Model Agreements is voluntary. For example, under

the All-Payer Model Agreement for the

Vermont All-Payer Accountable Care Organization (ACO) Model, participation by

providers, facilities, group health plans,

and health insurance issuers is voluntary.44 To the extent that both the provider

or facility and plan or issuer has opted to

participate in the Vermont All-Payer ACO

Model and the Vermont All-Payer Model

Agreement, or an agreement described

in that Agreement, applies to a specific

item or service, then that All-Payer Model

Agreement would determine the recognized amount and out-of-network rate.

But, for example, if a plan has opted to

participate, but the provider furnishing

the service has not, then the All-Payer

Model Agreement would not be used to

determine either the recognized amount

or out-of-network rate. Instead, if a state

law is applicable, the state law would apply. If no state law is applicable, then the

recognized amount would be determined

using the QPA,45 and the out-of-network

rate would be the amount agreed upon by

the parties or determined through the IDR

process established in the No Surprises

Act, as discussed further elsewhere in this

preamble.

vi. Methodology for Calculating the

Qualifying Payment Amount

The No Surprises Act directs the Departments to establish through rulemaking

the methodology that a group health plan

or health insurance issuer offering group or

individual health insurance coverage must

use to determine the qualifying payment

amount (QPA). As discussed earlier in this

preamble, the No Surprises Act and these

interim final rules require cost-sharing requirements imposed by plans and issuers

in connection with emergency services

furnished by a nonparticipating emergency facility or nonparticipating provider,

or in connection with non-emergency

services performed by nonparticipating

providers at certain participating facilities to be based on the lesser of the billed

charge or the QPA where an All-Payer

Model Agreement under section 1115A

of the Social Security Act or a specified

state law does not apply. In addition, IDR

entities are directed by statute to consider

the QPA when selecting between the offer

submitted by a plan or issuer and the offer submitted by a facility or provider in

order to determine the total payment for

emergency services furnished by a nonparticipating emergency facility or nonparticipating provider, or non-emergency

services performed by nonparticipating

providers at certain participating facilities

that are items and services subject to the

IDR process.

In general, under section 9816(a)(3)(E)

of the Code, section 716(a)(3)(E) of ERISA, and section 2799A-1(a)(3)(E) of the

PHS Act, for a given item or service, the

QPA is the median of the contracted rates

recognized by the plan or issuer on January 31, 2019, for the same or similar item

or service that is provided by a provider in

the same or similar specialty and provided

in a geographic region in which the item

or service is furnished, increased for inflation. The median contracted rate is determined with respect to all group health

plans of the plan sponsor or all group or

individual health insurance coverage offered by the health insurance issuer that

are offered in the same insurance market,

consistent with the methodology established by the Departments.

The No Surprises Act specifies an alternative methodology for determining the

QPA in cases where a plan or issuer has

insufficient information to calculate a median contracted rate for an item or service.

The statute, however, envisions that these

alternative methodologies, such as use of

a third-party database, will be used in only

limited circumstances where the plan or

issuer cannot rely on its contracted rates

as a reflection of the market dynamics in

a geographic region. Consistent with this

See CMS. Maryland Total Cost of Care Model, (updated Oct. 22, 2020) available at https://innovation.cms.gov/innovation-models/md-tccm. Under Maryland law, hospitals regulated by the

Maryland Health Services Cost Review Commission (HSCRC) must charge payers the rates set the by HSCRC, and payers, including group health plans and issuers offering individual or

group health insurance, must pay the rates set by HSCRC. Maryland Code, Health-General Article §§ 19-212 and 19-219(a)(3) and (b)(2)(i) and Maryland Code, Insurance Article §15-604.

https://innovation.cms.gov/innovation-models/vermont-all-payer-aco-model.

See prior explanation regarding the requirement that when the surprise billing protections apply, in the event the billed charge is less than the recognized amount, cost sharing would be

based on the billed charge.

Bulletin No. 2021–30

July 26, 2021

statutory goal, these interim final rules

generally seek to ensure that plans and issuers can meet the sufficient-information

standard when determining the QPA and

that use of alternative methodologies is

minimized wherever possible.

The Departments seek comment on all

aspects of the methodology established in

these interim final rules for determining

the QPA. In particular, the Departments

seek comment on whether there are any

considerations or factors that are not sufficiently accounted for in the methodology

established in these interim final rules; the

impact of the methodology on cost sharing, payment amounts, and provider network participation; and whether there are

areas where commenters believe additional rulemaking or guidance is necessary.

The Departments also seek comment as

to the impact of large consolidated health

care systems on contracted rates, and the

impact of such contracted rates on prices

and the QPA. The Departments are concerned that the contracting practices of

such health care systems could inflate

the QPA, and seek comment on whether

adjustments to the QPA methodology are

needed.

a. Median Contracted Rate

These interim final rules establish the

methodology that plans and issuers must

use to calculate the median of contracted

rates. The plan or issuer will generally

then apply an inflation adjustment to determine the QPA for items and services

furnished in the relevant year.

In general, the median contracted rate

for an item or service is calculated by arranging in order from least to greatest the

contracted rates of all plans of the plan

sponsor (or of the administering entity, if

applicable) or all coverage offered by the

issuer in the same insurance market for the

same or similar item or service that is provided by a provider in the same or similar

specialty or facility of the same or similar facility type and provided in the geographic region in which the item or ser-

vice is furnished, and selecting the middle

number. These interim final rules define

each of the relevant terms, as discussed in

more detail in this section of the preamble.

In determining the median contracted

rate, the amount negotiated under each

contract is treated as a separate amount.

For example, assume the contracted rates

for all plans of a sponsor in the same insurance market for a particular item or service provided by a provider in the same or

similar specialty in a specified geographic region are $475, $490, and $510. The

median contracted rate for this service

is $490. If there are an even number of

contracted rates, the median contracted

rate is the average of the middle two contracted rates. If, in the previous example,

there were a fourth contracted rate in the

amount of $515, the median contracted rate would be the average of the two

middle amounts ($490 and $510), or $500

(($490+$510)⁄2). If the same amount is

paid under two or more separate contracts,

each contract is counted separately. Thus,

in the previous example, if there were a

fifth contracted rate also in the amount of

$515, the median contracted rate would be

$510, since there are two contracted rates

below that amount ($475 and $490) and

two contracted rates above that amount

($515 and $515).

Contracted Rate

The interim final rules define a “contracted rate” as the total amount (including cost sharing) that a group health plan

or health insurance issuer has contractually agreed to pay a participating provider, facility, or provider of air ambulance

services for covered items and services,

whether directly or indirectly, including

through a third-party administrator or

pharmacy benefit manager.46

The No Surprises Act envisions that

each contracted rate for a given item or

service be treated as a single data point

when calculating a median contracted

rate. Therefore, if a plan or issuer has a

contract with a provider group or facil-

ity, the rate negotiated with that provider group or facility under the contract is

treated as a single contracted rate, if the

same rate applies to all providers of such

provider group or facility under the single

contract. Likewise, the rate negotiated under a contract constitutes a single contracted rate regardless of the number of claims

paid at that contracted rate. However, if a

plan or issuer has a contract with multiple

providers, with separate negotiated rates

with each particular provider for a given

item or service, each unique contracted

rate constitutes a single contracted rate

for purposes of determining the median

contracted rate.47 Further, if a plan or issuer has separate contracts with individual

providers, the contracted rate under each

such contract constitutes a single contracted rate (even if the same amount is paid to

other providers under separate contracts).

The Departments understand that some

plans or issuers may rent provider networks or otherwise contract with third

parties to manage provider networks. In

these situations, contracted rates between

providers and the entity responsible for

managing the provider network on behalf

of a plan or issuer would be treated as

the plan’s or issuer’s contracted rates for

purposes of calculating the QPA. The Departments seek comment on whether additional guidance or special rules are needed

regarding how to define a contract in this

situation.

The Departments also understand that

plans and issuers sometimes enter into

special agreements with providers and

facilities that generally are not otherwise

contracted to participate in any of the networks of the plan or issuer. For example, a

plan or issuer may negotiate an ad hoc arrangement with a nonparticipating provider or facility to supplement the network

of the plan or coverage for a specific participant, beneficiary, or enrollee in unique

circumstances. These interim final rules

specify that solely for purposes of the

definition of contracted rate, a single case

agreement, letter of agreement, or other

similar arrangement between a plan or is-

This definition is substantially similar to the definition of “negotiated rate” used for purposes of the transparency in coverage regulations at 26 CFR 54.9815–2715A1(a)(2)(xvi), 29 CFR

2590.715–2715A1(a)(2)(xvi), and 45 CFR 147.210(a)(2)(xvi).

If a plan or issuer has a contract with multiple providers, with separate negotiated rates with several subgroups of providers, each unique contracted rate will generally constitute a single

contracted rate for purposes of determining the median contracted rate. However, as discussed later in this section of the preamble, these interim final rules specify that if a plan or issuer has

contracted rates that vary based on provider specialty for a service code, the median contracted rate is calculated separately for each provider specialty, as applicable. In such cases, the QPA for

the particular item or service would take into account only the contracted rates for the applicable provider specialty, and would disregard other unique contracted rates under the same contract.

July 26, 2021

Bulletin No. 2021–30

suer and a provider, facility, or provider of

air ambulance services does not constitute

a contract, and the rate paid under such an

agreement should not be counted among

the plan’s or issuer’s contracted rates. The

term “contracted rate” refers only to the

rate negotiated with providers and facilities that are contracted to participate in

any of the networks of the plan or issuer

under generally applicable terms of the

plan or coverage and excludes rates negotiated with other providers and facilities.

The Departments are of the view that this

definition most closely aligns with the

statutory intent of ensuring that the QPA

reflects market rates under typical contract

negotiations.48

Insurance Market

In calculating the median contracted

rate for a given item or service, the plan or

issuer must take into account the contracted rates under all group health plans of the

sponsor or all group or individual health

insurance coverage offered by the issuer that are offered in the same insurance

market.49 The term “insurance market” for

purposes of these interim final rules means

one of the following: the individual market, small group market, or large group

market (each as defined under section

2791(e) of the PHS Act). The relevant insurance market is determined irrespective

of the state. For example, in calculating

the QPA for an item or service furnished to

an enrollee in individual health insurance

coverage, an issuer must take into account

the contracted rates with providers or facilities in the applicable geographic region across the issuer’s individual market

offerings, inclusive of contracted rates for

all individual health insurance coverage

offered by the issuer in all states in which

the issuer offers coverage in the individual

market.

With respect to self-insured group

health plans, these interim final rules de-

fine the term “insurance market” to mean

all self-insured group health plans (other

than account-based plans and plans that

consist solely of excepted benefits) of

the plan sponsor, or at the option of the

plan sponsor, all self-insured group health

plans administered by the same entity (including a third-party administrator contracted by the plan), to the extent otherwise permitted by law, that is responsible

for calculating the QPA on behalf of the

plan. The Departments understand that

many self-insured group health plans are

administered by entities other than the

plan sponsor (such as a third-party administrator contracted by the plan) that would

be responsible for calculating the QPA on

behalf of the sponsor. To reduce the burden

imposed on sponsors of self-insured group

health plans, these interim final rules permit sponsors of self-insured group health

plans to allow their third-party administrators to determine the QPA for the sponsor

by calculating the median contracted rate

using the contracted rates recognized by

all self-insured group health plans administered by the third-party administrator

(not only those of the particular plan sponsor). Under this approach, the Departments anticipate there will be fewer instances where a self-insured group health

plan sponsor will lack sufficient information to calculate a median contracted rate

for an item or service.

The Departments seek comment on the

definition of insurance market with respect

to self-insured group health plans and

whether any contractual or other issues

may prevent an entity, such as a third-party administrator, from using contracted

rates from the different self-insured plans

it administers to calculate the QPA for a

particular self-insured group health plan.

DOL also seeks comment on the ability of

self-insured group health plan fiduciaries

to monitor the calculation of the QPA by

the administering entities for compliance

with the applicable requirements (for ex-

ample, by ensuring the entities are using

the correct contracted rates).

The Departments have determined

that including rates negotiated under other more limited forms of coverage, such

as excepted benefits, short-term, limited-duration insurance, and account-based

plans, including health reimbursement

arrangements, could skew the calculation

of the median contracted rate, and these

forms of coverage should not be included

in the definition of the applicable insurance market. Furthermore, the definition

of “qualifying payment amount” under

section 2799A-1(a)(3)(E)(i)(I) of the PHS

Act refers to individual health insurance

coverage, and the term individual health

insurance coverage, as defined under section 2791(b)(5) of the PHS Act, excludes

short-term, limited-duration insurance.50

Therefore, under these interim final rules,

when referring to coverage offered by an

issuer within the same insurance market

for purposes of determining the QPA, the

individual market excludes short-term,

limited-duration insurance (as defined in

26 CFR 54.9801-2, 29 CFR 2590.701-2,

and 45 CFR 144.103). In addition, under these interim final rules, all markets

exclude coverage that consists solely of

excepted benefits (as described in section

9832 of the Code, section 733 of ERISA, and section 2791 of the PHS Act).

While excepted benefits can be offered in

the individual or group markets, they are

exempt from the federal insurance market reforms,51 and Congress amended the

statutory exemption for these products

to include the additional coverage provisions established under new Part D of title

XXVII of the PHS Act.52 Account-based

plans, including health reimbursement

arrangements as described in 26 CFR

54.9815-2711(d)(6)(i), 29 CFR 2590.7152711(d)(6)(i), and 45 CFR 147.126(d)

(6)(i), make reimbursements subject to a

maximum fixed dollar amount for a period, such that the benefit design of these

In contrast, as discussed earlier in this preamble, these interim final rules specify that a single case agreement constitutes a contractual relationship for purposes of the definition of participating health care facility and participating emergency facility. The Departments are of the view that it is reasonable that an individual would expect items and services delivered at a health care

facility that has a single case agreement in place with respect to the individual’s care to be delivered on an in-network basis, and therefore, that the balance billing protections should apply.

The term “health insurance issuer” has the meaning given the term in section 2791(b) of the PHS Act, which, in relevant part, defines a health insurance issuer as an entity that is licensed to

engage in the business of insurance in a state. Thus, an issuer is the licensed entity and the contracted rates of separate licensees under the same holding company are not taken into account.

Since short-term, limited duration insurance is not individual health insurance coverage, it is also generally not subject to the federal individual market reforms. See, e.g., 81 FR 75316 at

75317 (Oct. 31, 2016) and 83 FR 38212 at 38213 (Aug. 3, 2018).

Section 9831 of the Code, section 732 of ERISA, and sections 2722 and 2763 of the PHS Act.

These amendments add the phrase “and Part D” to section 2722(b), (c)(1), (c)(2), and (c)(3) of the PHS Act.

Bulletin No. 2021–30

July 26, 2021

coverage options makes concepts related

to surprise billing and choice of health

care professionals inapplicable. Therefore, under these interim final rules, for

purposes of calculating the QPA, all group

markets similarly exclude coverage provided under account-based plans.

The Departments also clarify that any

plan or coverage that is not a “group

health plan” or “group or individual health

insurance coverage” offered by a “health

insurance issuer,” as those terms are defined in the Code, ERISA, and the PHS

Act, such as a Medicare Advantage or

Medicaid managed care organization plan,

must also not be included in any insurance

market for purposes of determining the

QPA. This approach is consistent with the

statutory requirement that the median contracted rate is determined with respect to

all “group health plans” of the sponsor or

all “group or individual health insurance

coverage” offered by a health insurance

issuer in the same insurance market.

Same or Similar Item or Service

Section 9816(a)(3)(E) of the Code,

section 716(a)(3)(E) of ERISA, section

2799A-1(a)(3)(E) of the PHS Act, and

these interim final rules provide that a

plan or issuer must calculate the median

contracted rate for an item or service using contracted rates for the same or similar item or service. Under the interim final

rules, the term “same or similar item or

service” means a health care item or service billed under the same service code,

or a comparable code under a different

procedural code system. Service code

means the code that describes an item or

service, including a Current Procedural

Terminology (CPT), Healthcare Common

Procedure Coding System (HCPCS), or

Diagnosis-Related Group (DRG) code.

A service code is a unique identifier, typically consisting of a string of numeric

digits or alphanumeric characters, that

corresponds to a standardized description,

which is used to identify with specificity

the item or service that was furnished to a

patient. Different codes may be assigned

to the same general service on the basis of

certain variations in the provider’s method

or approach, the complexity of the procedure or medical decision-making, and patient acuity level. Payers, providers, and

July 26, 2021

facilities understand these service codes

and commonly use them for billing and

paying claims (including for both individual items and services, and for items and

services provided under a bundled payment arrangement). Thus, defining “same

or similar item or service” by service code

will make it easier for plans and issuers to

calculate the QPA, and for providers and

facilities to understand the QPA.

These interim final rules include specific requirements to account for modifiers (when applicable), which are codes

applied to the service code that provide a

more specific description of the furnished

item or service and that may adjust the

payment rate or affect the processing or

payment of the code billed. For example,

modifiers include hospital revenue codes,

which indicate the department or place

in the hospital in which a procedure or

treatment is performed, as well as codes

indicating whether services or procedures

were performed by certain types of providers, such as physician assistants, nurse

practitioners, certified registered nurse

anesthetists, or assistant surgeons. In addition, modifiers can be used to indicate that

the work required to provide a service in a

particular instance was significantly greater – or significantly less – than the service

typically requires. The Departments are of

the view that it is important that the QPA

methodology account for modifiers that

affect payment rates under contracts with

participating providers and facilities.

Under the methodology established in

these interim final rules, plans and issuers

must calculate separate median contracted

rates for CPT code modifiers that distinguish the professional services component (“26”) from the technical component

(“TC”). This will result in separate median contracted rates being calculated for

services when billed by a facility versus

a provider. In addition, where a plan’s or

issuer’s contracted rates otherwise vary

based on applying a modifier code, the

plan or issuer must calculate a separate

median contracted rate for each such service code-modifier combination. Modifiers that do not cause contracted rates to

vary must not be taken into account when

calculating the median contracted rate.

These rules are intended to ensure that if a

plan or issuer adjusts contracted rates with

participating providers and facilities based

on modifier codes, those payment adjustments are appropriately reflected in the

median contracted rate.

Provider in the Same or Similar Specialty

These interim final rules specify that if

a plan or issuer has contracted rates for a

service code that vary based on provider

specialty, the median contracted rate is

calculated separately for each provider

specialty, as applicable. These interim final rules define “provider in the same or

similar specialty” as the practice specialty

of a provider, as identified by the plan or

issuer consistent with the plan’s or issuer’s

usual business practice. This definition is

intended to provide plans or issuers with

the flexibility necessary to calculate the

median contracted rate, relying on their

contracting practices with participating

providers. If a plan’s or issuer’s usual

business practice for identifying a provider’s practice specialty differs for contracting purposes and other business needs,

the plan or issuer should use the method

of identifying the practice specialty that it

uses for contracting purposes.

The Departments considered requiring

a plan or issuer to calculate separate median contracted rates for every provider

specialty, but concluded that this approach

would lead to more instances in which the

plan or issuer would not have sufficient

information to calculate the QPAs using

its contracted rates. In addition, the Departments understand that not all plans or

issuers vary contracted rates by provider

specialty, in which case requiring plans

and issuers to calculate separate median

contracted rates for each provider specialty would increase the burden associated

with calculating the QPA without adding

specificity to the QPA. Given that the No

Surprises Act generally relies on using

contracted rates to determine the QPA,

the Departments conclude that plans and

issuers should be required to calculate median contracted rates separately by provider specialty only where the plan or issuer

otherwise varies its contracted rates based

on provider specialty.

With respect to air ambulance services,

all providers of air ambulance services

(including inter-facility transports) are

considered to be a single provider specialty for purposes of these interim final

Bulletin No. 2021–30

rules. The Departments understand that

contracted rates may vary depending

on whether the air ambulance services

are provided using a fixed-wing or rotary-wing aircraft. However, these distinctions based on vehicle type are accounted

for in the QPA methodology established

under these interim final rules through the

use of service codes that are specific to

fixed-wing or rotary-wing aircraft. Therefore, the Departments anticipate that median contracted rates for fixed-wing and

rotary-wing aircraft would be determined

separately based on the requirement under these interim final rules that median

contracted rates be based on the contracted rates for the same or similar item or

service, and concluded that it would be

redundant to require plans and issuers to

also calculate separate median contracted

rates on the basis of vehicle type.

The Departments also understand that

hospital-based air ambulance providers

sometimes have lower contracted rates

than independent, non-hospital-based air

ambulance providers. The Departments,

however, are of the view that because participants, beneficiaries, and enrollees frequently do not have the ability to choose

their air ambulance provider, they should

not be required to pay higher cost-sharing

amounts (such as coinsurance or a deductible) solely because the air ambulance

provider assigned to them has negotiated

higher contracted rates in order to cover

its higher costs, or because it has a different revenue model, than other types of

air ambulance providers. This approach is

consistent with the approach these interim

final rules take with respect to facilities,

discussed in the following section of this

preamble, which also generally does not

provide for separate median contracted

rates to be calculated based on characteristics of a particular facility. The Departments have concluded that this interpretation is consistent with the statute’s intent

to protect individuals from surprise medical bills.

Facility of the Same or Similar

Facility Type

If a plan or issuer has contracted rates

for emergency services that vary based on

the type of facility (that is, whether a facility is an emergency department of a hospital or an independent freestanding emergency department), the median contracted

rate is calculated separately for each such

facility type. Plans and issuers subject to

the protections in the No Surprises Act

are required to cover emergency services

at both types of facilities. However, the

Departments are aware that

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