# Bulletin No. 2021–30

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## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

HIGHLIGHTS
OF THIS ISSUE




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

25

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
Register on November 18, 2015 (Patient
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).
3
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).
1
2

July 26, 2021

26

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.
6
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.
7
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.
8
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.
4
5

Bulletin No. 2021–30

27

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/.
10
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.
11
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.
12
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).
13
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.
14
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.
15
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.
16
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/
17
42 U.S.C. 12101 et seq.
18
29 U.S.C. 794 and 794d.
19
42 U.S.C. 18116(a).
9

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28

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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).
22
Pub. L. 116-260.
20
21

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29

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.

30

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

31

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

23
24

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.

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32

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/.
27
See 42 U.S.C. 1395dd(e)(1)(A).
28
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).
25
26

Bulletin No. 2021–30

33

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-

29
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

34

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

30
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).
31
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).

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35

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.

32

July 26, 2021

36

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-

37

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-

38

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

33
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.
34
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

39

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).
37
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).
35
36

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40

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

38
39
40

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 em

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3A9b02cda419c49f12. Public record. Not legal advice.