These synopses are intended only as aids to the reader in

Agency decision

Ask Donna

What actually matters in this document.

Text

HIGHLIGHTS

OF THIS ISSUE

Bulletin No. 2024–5

January 29, 2024

These synopses are intended only as aids to the reader in

identifying the subject matter covered. They may not be

relied upon as authoritative interpretations.

ADMINISTRATIVE

EMPLOYEE PLANS

Notice 2024-18, page 625.

T.D. 9986, page 610.

This notice addresses the availability of administrative

exemptions from and waivers of the requirements to file

returns and other documents in electronic form. This notice

provides information about publications pertaining to failed

attempts to electronically file Forms 1120, 1120-S, and

1120-F using Internal Revenue Service (IRS) filing systems.

In addition, this notice obsoletes Notice 2010-13, 2010-4

I.R.B. 327 (January 25, 2010), Form 1120, Form 1120-F,

Form 1120S, Form 990, and Form 990-PF Electronic Filing

Waiver Request Procedures. This notice also modifies Notice

2023-60 as released on August 11, 2023, but not published

in the Internal Revenue Bulletin.

ADMINISTRATIVE, INCOME TAX

Notice 2024-19, page 627.

This notice provides relief from certain penalties imposed

solely for failure of a partnership with unrealized receivables

or inventory items to furnish Part IV of Form 8308, Report of a

Sale or Exchange of Certain Partnership Interests, by January

31, 2024, to the transferor and transferee in certain transfers

of partnership interests that occurred in calendar year 2023.

EXEMPT ORGANIZATIONS

Announcement 2024-6, page 635.

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

the code section requirements. Contributions made to the

organizations by individual donors are no longer deductible

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

Finding Lists begin on page ii.

These regulations specify the methodology for constructing

the corporate bond yield curve that is used to derive the

interest rates used in calculating present value and making

other calculations under a defined benefit plan, as well as for

discounting unpaid losses and estimated salvage recoverable of insurance companies.

EXCISE TAX

T.D. 9985, page 573.

This document finalizes rules related to the fees established by the No Surprises Act for the Federal independent dispute resolution (IDR) process, as established by

the Consolidated Appropriations Act, 2021 (CAA). These

final rules amend existing regulations to provide that the

administrative fee amount charged by the Department of

the Treasury, the Department of Labor, and the Department of Health and Human Services (the Departments) to

participate in the Federal IDR process, and the ranges for

certified IDR entity fees for single and batched determinations, will be set by the Departments through notice and

comment rulemaking. The preamble to these final rules

also sets forth the methodology used to calculate the

administrative fee and the considerations used to develop

the certified IDR entity fee ranges. This document also

finalizes the amount of the administrative fee for disputes

initiated on or after the effective date of these rules.

Finally, this document finalizes the certified IDR entity fee

ranges for disputes initiated on or after the effective date

of these rules.

EMPLOYEE PLANS

tion Reduction Act of 2022. This notice requests comments

on this PIN requirement.

Notice 2024-16, page 622.

REG-121010-17, page 636.

This notice announces that Treasury and the IRS intend to

issue proposed regulations that will address certain basis

consequences of internal restructuring transactions in which

a U.S. corporation acquires stock of a controlled foreign corporation (“CFC”) from another CFC. In particular, the notice

announces rules under which basis provided under section

961(c) in stock of a second-tier CFC held by a first-tier CFC

will be transferred to a U.S. corporation that acquires the second-tier CFC from the first-tier CFC in a liquidation described

in section 332 or an asset reorganization described in section 368(a)(1).

This document contains proposed regulations that would provide guidance under section 166 regarding whether a debt

instrument is worthless for Federal income tax purposes.

The proposed regulations update the standard for determining when a debt instrument held by a regulated financial

company or a member of a regulated financial group will be

conclusively presumed to be worthless.

Rev. Proc. 2024-9, page 628.

Revenue Procedure 2024-9 provides procedures for obtaining automatic consent to change methods of accounting for

specified research or experimental expenditures under § 174

paid or incurred in taxable years beginning after December

31, 2021. Revenue Procedure 2024-9 also clarifies section

9 of Revenue Procedure 2023-24 to provide that section 5 of

Revenue Procedure 2000-50 is obsoleted for costs of developing computer software paid or incurred in any taxable year

beginning after December 31, 2021, and continues to apply

to costs of developing computer software paid or incurred

in any taxable year beginning on or before December 31,

2021.

INCOME TAX

Notice 2024-12, page 616.

Notice 2024-12 clarifies and modifies Notice 2023-63, which

provided interim guidance to address issues regarding specified research or experimental expenditures under § 174. Specifically, Notice 2024-12 clarifies and modifies Notice 202363 regarding (1) the treatment of costs paid or incurred by a

research provider for research performed under contract, (2)

the requirement that a taxpayer that chooses to rely on any

of the rules described in Notice 2023-63 must rely on all the

rules described in sections 3 through 9 of the notice, and (3)

the obsoletion of section 5 of Revenue Procedure 2000-50.

TAX CONVENTIONS

Announcement 2024-5, page 635.

The United States provided a diplomatic notification, dated

July 8, 2022, to the Government of the Republic of Hungary

of its termination of the United States-Hungary Tax Treaty. In

respect of tax withheld at source, the United States-Hungary

Tax Treaty ceases to have effect with respect to amounts

paid or credited on or after January 1, 2024. In respect of

other taxes, the United States-Hungary Tax Treaty ceases to

have effect with respect to taxable periods beginning on or

after January 1, 2024.

Notice 2024-13, page 618.

This notice announces that the Department of the Treasury and the Internal Revenue Service intend to propose

regulations to implement the product identification number

(PIN) requirement with respect to the energy efficient home

improvement credit under § 25C of the Internal Revenue

Code, as amended by § 13301 of Public Law 117-169, 136.

Stat. 1818 (August 16, 2022), commonly known as the Infla-

January 29, 2024

Bulletin No. 2024–5

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.

January 29, 2024

Bulletin No. 2024–5

Part I

(26 CFR 54.9816-8 Independent dispute resolution

process; 26 CFR 54.9816-8T Independent dispute

resolution process (temporary))

T.D. 9985

DEPARTMENT OF THE

TREASURY

Internal Revenue Service

26 CFR Part 54

DEPARTMENT OF LABOR

Employee Benefits Security

Administration

29 CFR Part 2590

DEPARTMENT OF HEALTH

AND HUMAN SERVICES

45 CFR Part 149

Federal Independent

Dispute Resolution (IDR)

Process Administrative Fee

and Certified IDR Entity Fee

Ranges

AGENCY: Internal Revenue Service (IRS),

Department of the Treasury; Employee

Benefits Security Administration, Department of Labor; Centers for Medicare &

Medicaid Services, Department of Health

and Human Services (HHS).

ACTION: Final rules.

SUMMARY: This document finalizes

rules related to the fees established by the

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

Appropriations Act, 2021 (CAA). These

final rules amend existing regulations

to provide that the administrative fee

amount charged by the Department of the

Treasury, the Department of Labor, and

the Department of Health and Human

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

ranges for certified IDR entity fees for

single and batched determinations, will

be set by the Departments through notice

and comment rulemaking. The preamble to these final rules also sets forth

the methodology used to calculate the

administrative fee and the considerations

used to develop the certified IDR entity

fee ranges. This document also finalizes

the amount of the administrative fee for

disputes initiated on or after the effective

date of these rules. Finally, this document finalizes the certified IDR entity fee

ranges for disputes initiated on or after

the effective date of these rules.

DATES: These final rules are effective on

[insert date 30 days after date of publication in the Federal Register].

FOR FURTHER INFORMATION

CONTACT: Shira B. McKinlay or William Fischer, Internal Revenue Service,

Department of the Treasury, 202-3175500; Shannon Hysjulien or Rebecca

Miller, Employee Benefits Security

Administration, Department of Labor,

202-693-8335; and Jacquelyn Rudich or

Nora Simmons, Centers for Medicare &

Medicaid Services, Department of Health

and Human Services, 301-492-5211.

SUPPLEMENTARY INFORMATION:

I. Background

A. Preventing Surprise Medical Bills and

Establishing the Federal IDR Process

under the Consolidated Appropriations

Act, 2021

On December 27, 2020, the CAA was

enacted.1 Title I, also known as the No Surprises Act, and title II (Transparency) of

Division BB of the CAA amended chapter

100 of the Internal Revenue Code (Code),

part 7 of the Employee Retirement Income

Security Act (ERISA), and title XXVII of

the Public Health Service Act (PHS Act).

The No Surprises Act provides Federal

protections against surprise billing by

limiting out-of-network cost sharing and

prohibiting balance billing in many of the

circumstances in which surprise bills most

frequently arise. In particular, the No Surprises Act added new provisions applicable to group health plans and health insurance issuers offering group or individual

health insurance coverage. Section 102 of

the No Surprises Act added section 9816

of the Code,2 section 716 of ERISA,3 and

section 2799A-1 of the PHS Act,4 which

contain limitations on cost sharing and

requirements regarding the timing of initial payments and notices of denial of payment by plans and issuers for emergency

services furnished by nonparticipating

providers and nonparticipating emergency

facilities, and for non-emergency services

furnished by nonparticipating providers

for patient visits to participating health

care facilities, generally defined as hospitals, hospital outpatient departments,

Public Law 116-260 (Dec. 27, 2020).

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

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

42 U.S.C. 300gg–111, et seq.

Bulletin No. 2024–5

573

January 29, 2024

critical access hospitals, and ambulatory surgical centers.5

Section 103 of the No Surprises Act

established a Federal IDR process that

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

certain disputes regarding out-of-network

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

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

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

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

provide that each party to a determination

under the Federal IDR process shall pay

a fee for participating in the Federal IDR

process, and the amount of the fee is an

amount established by the Departments

in a manner such that the total amount of

fees paid by all parties is estimated to be

equal to the amount of expenditures estimated to be made by the Departments for

the year in carrying out the Federal IDR

process.

Section 105 of the No Surprises Act

added section 9817 of the Code,12 section

717 of ERISA,13 and section 2799A-2

of the PHS Act.14 These sections contain

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

and notices of denial of payment by plans

and issuers for air ambulance services furnished by nonparticipating providers of

air ambulance services, and allow plans

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

Federal IDR process.

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

a new part E15 that apply to health care

providers, facilities, and providers of

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

and services and requirements related to

disclosures about balance billing protections.

The Departments, along with the

Office of Personnel Management (OPM),

have issued rules in 2021 and 2022 to

implement various provisions of the No

Surprises Act. More specifically relevant to this rulemaking, the Departments

and OPM issued interim final rules (July

2021 interim final rules16 and October 2021 interim final rules17) and final

rules (August 2022 final rules18) implementing provisions of sections 9816 and

9817 of the Code,19 sections 716 and 717

of ERISA,20 and sections 2799A-1 and

2799A-2 of the PHS Act.21 Those rules

implement provisions to protect consumers from surprise medical bills for emergency services, non-emergency services

furnished by nonparticipating providers

for patient visits to participating facilities22 in certain circumstances, and air

ambulance services furnished by nonparticipating providers of air ambulance services. Those rules also implement provisions to establish a Federal IDR process

to determine payment amounts when

there is a dispute between plans or issuers and providers, facilities, or providers

of air ambulance services about the outof-network rate for these services if a

specified State law as defined in 26 CFR

54.9816-3T, 29 CFR 2590.716-3, and 45

CFR 149.30 or an applicable All-Payer

Model Agreement under section 1115A

of the Social Security Act does not provide a method for determining the total

amount payable.

The July 2021 interim final rules and

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

grandfathered health plans) for plan years

(in the individual market, policy years)

beginning on or after January 1, 2022,

and to health care providers, facilities,

and providers of air ambulance services

for items and services furnished during

plan years (in the individual market, policy years) beginning on or after January

1, 2022.23 The August 2022 final rules

became effective October 25, 2022, and

are applicable for items or services provided or furnished on or after October

25, 2022, for plan years (in the individual market, policy years) beginning on or

after January 1, 2022.

B. October 2021 Interim Final Rules and

Related Guidance

The October 2021 interim final rules

implement the Federal IDR process under

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

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

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

Section 102(d)(1) of the No Surprises Act amended the Federal Employees Health Benefits (FEHB) Act, 5 U.S.C. 8901 et seq., by adding a new subsection (p) to 5 U.S.C. 8902. Under

this new provision, each FEHB Program contract must require a carrier to comply with requirements described in sections 9816 and 9817 of the Code, sections 716 and 717 of ERISA, and

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

individual health insurance coverage.

26 U.S.C. 9816.

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

42 U.S.C. 300gg–111, et seq.

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

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

42 U.S.C. 300gg–111(c)(8).

26 U.S.C. 9817.

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

42 U.S.C. 300gg–112, et seq.

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

86 FR 36872 (July 13, 2021).

86 FR 55980 (October 7, 2021).

87 FR 52618 (August 26, 2022).

26 U.S.C. 9816 and 26 U.S.C. 9817.

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

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

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

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

plans offered by carriers under the FEHB Act. These provisions apply to carriers in the FEHB Program with respect to contract years beginning on or after January 1, 2022. The disclosure

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

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

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

January 29, 2024

574

Bulletin No. 2024–5

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

furnished by nonparticipating providers

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

individual has been provided notice and

waived the individual’s surprise billing

protections, in accordance with 45 CFR

149.410 or 149.420, as applicable), and

air ambulance services furnished by nonparticipating providers of air ambulance

services, for situations in which neither a

specified State law as defined in 26 CFR

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

45 CFR 149.30 nor an All-Payer Model

Agreement under section 1115A of the

Social Security Act applies.

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

include requirements governing the costs

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

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

and the October 2021 interim final rules,

the party whose offer is not selected is

responsible for the payment of the fee

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

2021 interim final rules, as a condition of

certification, the certified IDR entity must

notify the Departments of the amount of

the certified IDR entity fees it intends to

charge for payment determinations, which

is limited to a fixed certified IDR entity

fee amount for single determinations and

a separate fixed certified IDR entity fee

amount for batched determinations.32 Each

of these fixed certified IDR entity fees

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

from the Departments to charge a certified

IDR entity fee outside that range.33 The

October 2021 interim final rules describe

the considerations that the Departments

will use to develop the certified IDR entity

fee ranges, including the anticipated time

and resources needed for certified IDR

entities to meet the requirements of those

interim final rules, the volume of payment

determinations, and the capacity of the

Federal IDR process to efficiently handle

the volume of IDR initiations and payment determinations, and provide that the

Departments will review and update the

allowable fee ranges annually based on

these factors, the impact of inflation, and

other cost increases. Those rules also provide that on an annual basis, the certified

IDR entity may update its certified IDR

entity fees within the ranges set forth in

current guidance and seek approval from

the Departments to charge fixed certified

IDR entity fees beyond the upper or lower

limits for certified IDR entity fees.34

Additionally, pursuant to section

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

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

(8) of the PHS Act,37 and under the October 2021 interim final rules, each party

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

administrative fee is established in guid-

ance in a manner so that, in accordance

with the requirements of section 9816(c)

(8)(B) of the Code,38 section 716(c)(8)(B)

of ERISA,39 and section 2799A-1(c)(8)(B)

of the PHS Act,40 the total administrative

fees paid for a year are estimated to be

equal to the amount of expenditures estimated to be made by the Departments in

carrying out the Federal IDR process for

that year.41

Contemporaneously with the October 2021 interim final rules, the Departments released the Calendar Year 2022

Fee Guidance for the Federal Independent

Dispute Resolution Process Under the No

Surprises Act (October 2021 guidance),

setting the administrative fee for both

parties to a dispute at $50 per party.42 The

October 2021 guidance also established

the range for fixed certified IDR entity

fees for single determinations as $200–

$500, and the range for fixed certified IDR

entity fees for batched determinations as

$268–$670, unless the Departments otherwise grant approval for the certified

IDR entity to charge a fee outside these

ranges. In October 2022, the Departments released the Calendar Year 2023

Fee Guidance for the Federal Independent

Dispute Resolution Process Under the No

Surprises Act (October 2022 guidance),

again setting the administrative fee for

both parties to a dispute at $50 per party.43

The October 2022 guidance explained that

the data available regarding usage of the

Federal IDR process was not sufficiently

reliable to support a change to either the

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

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

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

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

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

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

42 U.S.C. 300gg–111(c)(5)(F)(i).

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

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

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

Id.

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

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

42 U.S.C. 300gg–111(c)(8).

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

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

42 U.S.C. 300gg–111(c)(8)(B).

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

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

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

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

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

Bulletin No. 2024–5

575

January 29, 2024

estimated number of payment determinations for which administrative fees would

be paid or the estimated ongoing program

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

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

administrative fee amount. The October

2022 guidance permits certified IDR entities to charge a fee between $200 and $700

for single determinations and between

$268 and $938 for batched determinations, unless the Departments otherwise

grant approval for the certified IDR entity

to charge a fee outside of these ranges. In

addition, to account for the heightened

workload for batched determinations, the

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

percentage of its approved certified IDR

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

line items initially submitted in the batch:

• 2-20 line items: 100 percent of the

approved batched determination fee;

• 21-50 line items: 110 percent of the

approved batched determination fee;

• 51-80 line items: 120 percent of the

approved batched determination fee;

and

• 81 line items or more: 130 percent of

the approved batched determination

fee.

In December 2022, the Departments

released the Amendment to the Calendar

Year 2023 Fee Guidance for the Federal

Independent Dispute Resolution Process

Under the No Surprises Act: Change in

Administrative Fee (December 2022 guidance), which amended the $50 per party

administrative fee set in the October 2022

guidance to $350 for calendar year 2023.44

The change in the administrative fee for

2023 reflected the additional costs to the

Departments to carry out the Federal IDR

process as a result of the Departments’

enhanced role in calendar year 2023 in

conducting pre-eligibility reviews to

allow the certified IDR entities to complete their eligibility determinations more

efficiently,45 as well as systemic improvements that allowed for the aggregation of

data needed to estimate the rate at which

disputes were determined eligible for the

Federal IDR process and the rate at which

one or both parties paid the administrative fee for purposes of calculating the

administrative fee. The December 2022

guidance did not amend the certified IDR

entity fee ranges provided in the October

2022 guidance.

C. Recent Litigation

On November 30, 2022, the Texas

Medical Association, Tyler Regional Hospital, and a Texas physician filed a lawsuit

(TMA III)46 against the Departments and

OPM, asserting that the July 2021 interim

final rules,47 including the regulations

governing how the qualifying payment

amount (QPA) should be calculated, and

certain related guidance documents con-

flicted with the statutory language. On

August 24, 2023, the U.S. District Court

for the Eastern District of Texas (District

Court) issued a memorandum opinion and

order48 that vacated certain portions of the

July 2021 interim final rules and associated regulatory provisions49 and portions

of guidance documents,50 including portions that provided the methodology for

calculating the QPA and interpretations

for certified IDR entities related to the

processing of disputes for air ambulance

services.

On January 30, 2023, the Texas Medical Association, Houston Radiology

Associated, Texas Radiological Society,

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

the Departments and OPM, asserting

that the December 2022 guidance52 that

set the $350 per party administrative fee

amount for 2023 was unlawfully issued

without notice and comment rulemaking.53 On August 3, 2023, the District

Court issued a memorandum opinion and

order54 vacating the portion of the December 2022 guidance55 that increased the

administrative fee for the Federal IDR

process to $350 per party for disputes initiated during the calendar year beginning

January 1, 2023. The District Court also

vacated certain provisions of the October

2021 interim final rules setting forth the

batching criteria under which multiple

IDR items or services may be considered

jointly as part of a single IDR dispute.56

On August 11, 2023, the Departments

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

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

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

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

Complaint, Tex. Med. Ass’n v. U. S. Dep’t of Health and Human Servs., No. 6:22-cv-00450-JDK (E.D. Tex. Nov. 30, 2022) (ECF No. 1).

86 FR 36872 (July 13, 2021).

See Memorandum Opinion and Order, Tex. Med. Ass’n. v. U.S. Dep’t of Health & Hum. Servs., No. 6:22-cv-00450-JDK, 2023 WL 5489028 (E.D. Tex. Aug. 24, 2023).

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

also vacated 5 CFR 890.114(a), insofar as it requires compliance with the vacated regulations and guidance.

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

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

Complaint, Tex. Med. Ass’n. v. U. S. Dep’t of Health and Human Servs., No. 6:23-cv-00059-JDK (E.D. Tex. Jan. 30, 2023) (ECF No. 1).

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

Complaint, Tex. Med. Ass’n. v. U. S. Dep’t of Health and Human Servs., No. 6:23-cv-00059-JDK (E.D. Tex. Jan. 30, 2023) (ECF No. 1).

See Memorandum Opinion and Order, Tex. Med. Ass’n. v. U.S. Dep’t of Health & Hum. Servs., No. 6:23-cv-00059-JDK, 2023 WL 4977746 (E.D. Tex. Aug. 3, 2023).

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

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

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

the Current Procedural Terminology (CPT) codes with modifiers, if applicable, Healthcare Common Procedure Coding System (HCPCS) with modifiers, if applicable, or Diagnosis-Related

Group (DRG) codes with modifiers, if applicable.

January 29, 2024

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released guidance57 to reflect the TMA IV

opinion and order related to the administrative fee to clarify that the $50 per party

per dispute administrative fee amount

established in the October 2022 guidance

applies for disputes initiated on or after

August 3, 2023, and until the Departments

take action to set a new administrative fee

amount.

On October 6, 2023, the Departments

and OPM released “FAQs About Consolidated Appropriations Act, 2021 Implementation Part 62”58 to provide guidance

related to the TMA III opinion and order.

On November 28, 2023, the Departments

released guidance in accordance with the

TMA III and TMA IV opinions and orders59

to clarify how certified IDR entities should

determine whether a dispute is appropriately batched and how to submit single

and batched air ambulance disputes.60

D. Federal Independent Dispute

Resolution Operations Proposed Rules

On November 3, 2023, the Departments published the Federal Independent

Dispute Resolution Operations proposed

rules61 (IDR Operations proposed rules).

Those proposed rules included new proposed requirements for disclosing information when initiating the Federal IDR

process and the provision of certain claims

codes with paper or electronic remittances.

Additionally, those proposed rules would

amend certain requirements related to the

open negotiation period, initiation of the

Federal IDR process, eligibility determinations, batched disputes, extensions due

to extenuating circumstances, and the collection of administrative fees and certified

IDR entity fees. Lastly, those proposed

rules would require plans and issuers to

With respect to the administrative fee,

the Departments proposed in the IDR

Operations proposed rules to collect the

administrative fee directly from the parties rather than having the certified IDR

entities collect the administrative fee on

the Departments’ behalf. The Departments also proposed required timeframes

for the initiating and non-initiating parties

to pay the administrative fee and proposed

to establish consequences for non-payment of the administrative fee for each

party. Finally, to ensure that the Federal

IDR process is accessible to all parties,

the Departments proposed to charge both

parties a reduced administrative fee when

the highest offer made during open negotiation by either party was less than a

predetermined threshold and proposed to

charge the non-initiating party a reduced

administrative fee when the dispute is

determined ineligible by either the certified IDR entity or the Departments, as

applicable.

To align with these proposals, the

Departments also set forth the methodology inputs used to calculate the proposed

administrative fee amounts in the preamble to the IDR Operations proposed

rules that would be effective for disputes

initiated on or after January 1, 2025. The

Departments proposed that the full administrative fee amount would be $150 per

party per dispute, the reduced administrative fee for both parties when the highest

offer made by either party during open

negotiation was less than the threshold

would be $75 per party per dispute (50

percent of the full administrative fee

amount), and the reduced administrative

fee for non-initiating parties in ineligible

disputes would be $30 per non-initiating

party per ineligible dispute (20 percent of

the full administrative fee amount).

The inputs to the methodology set forth

in this preamble and the administrative fee

amount the Departments are finalizing in

these final rules are effective for disputes

initiated on or after the effective date of

these final rules. In contrast, the proposed

administrative fee structure and administrative fee amounts based on inputs to the

methodology set forth in the IDR Operations proposed rules, if finalized, would be

effective for disputes initiated on or after

January 1, 2025. The administrative fee

policies finalized in these final rules are

effective, and unchanged by the proposals in the IDR Operations proposed rules,

unless and until superseding administrative fee policies in the IDR Operations

proposed rules are adopted.

E. Public Comments Received in

Response to Proposed Rules

In the September 26, 2023 Federal

Federal Independent Dispute Resolution

(IDR) Process Administrative Fee and

Certified IDR Entity Fee Ranges proposed

rules (IDR Fees proposed rules),62 which

proposed to amend existing regulations to

provide that the administrative fee amount

charged by the Departments to participate

in the Federal IDR process, and the ranges

for certified IDR entity fees for single and

batched determinations, would be set by

the Departments through notice and comment rulemaking. The IDR Fees proposed

rules also discussed the methodology used

to calculate the administrative fee and the

considerations used to develop the certified IDR entity fee ranges. Finally, the

IDR Fees proposed rules proposed the

amount of the administrative fee and the

certified IDR entity fee ranges for disputes

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

The Departments received 44 comments on many different aspects of the

IDR Fees proposed rules. In particular, the

Departments received many comments

stating that the administrative fee amount

U.S. Department of Health and Human Services, U.S. Department of Labor, and U.S. Department of the Treasury (August 2023). Federal Independent Dispute Resolution (IDR) Process

Administrative Fee FAQs. https://www.cms.gov/files/document/idr-admin-fees-faqs-081123-508.pdf-0.

See U.S. Department of Health and Human Services, U.S. Department of Labor, U.S. Department of Treasury, Office of Personnel Management (October 6, 2023), FAQs about Consolidated

Appropriations Act, 2021 Implementation Part 62, available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-62.pdf and https://www.

cms.gov/files/document/faqs-part-62.pdf.

See U.S. Department of Health and Human Services, U.S. Department of Labor, U.S. Department of Treasury, Office of Personnel Management (November 28, 2023), FAQs about Consolidated Appropriations Act, 2021 Implementation Part 63, available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-62.pdf and https://

www.cms.gov/files/document/faqs-part-63.pdf.

See U.S. Department of Health and Human Services, U.S. Department of Labor, U.S. Department of Treasury, Office of Personnel Management (November 28, 2023), Federal Independent

Dispute Resolution (IDR) Process Batching and Air Ambulance FAQs, available at https://www.cms.gov/files/document/faqs-batching-air-ambulance.pdf.

88 FR 75744.

88 FR 65888.

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577

January 29, 2024

and the certified IDR entity fee ranges

create a barrier to accessing the Federal

IDR process for many parties, particularly

small, rural, or independent providers, and

these comments supported retaining the

current $50 per party per dispute administrative fee amount. The Departments also

received many comments on the proposed

certified IDR entity fee ranges, particularly

the proposed additional tiered batched fee

range for disputes with more than 25 line

items. While some commenters supported

the increased flexibility for certified IDR

entity fee ranges, many commenters were

concerned about the proposed further

increases in the certified IDR entity fee

ranges. The Departments respond to these

comments in section II of this preamble.

Many comments concerned matters that were outside of the scope of

the proposed rules and therefore are not

addressed in these final rules. For example, the Departments received comments

stating that the current Federal IDR process lacks the efficiency needed to resolve

disputes quickly. The Departments also

received many comments related to the

eligibility determination process, including on difficulties determining eligibility

in States with a specified State law and

the lack of information provided by plans

and issuers. Comments on the efficiency

of the Federal IDR process and eligibility determinations relate to operations

that are outside of the scope of these final

rules’ limited focus on the administrative

fee and certified IDR entity fee ranges and

the processes for setting such amounts.

The Departments encourage interested

parties to submit comments regarding the

proposals included in the IDR Operations

proposed rules, including the proposal to

establish a Departmental eligibility review

process, in accordance with the instructions set forth in those proposed rules.63

Some other out-of-scope comments

addressed the impacts of the Federal IDR

portal closure, which occurred in response

to litigation previously described in this

preamble. For example, the Departments

received comments requesting that, as a

result of TMA IV, the Departments should

refund $300 to each party that paid a

$350 administrative fee between Janu63

ary 1, 2023 and August 3, 2023, and the

Departments should offer an extension to

parties that would have initiated a dispute

if the administrative fee during that time

was $50, rather than $350, to now initiate

that dispute. The Departments note that

this relief was requested by the plaintiffs

in TMA IV and was denied by the court.64

Comments also addressed the impact of

TMA III on the calculation of the QPA,

specifically asking the Departments to

address underpayments to providers due

to purported artificially suppressed QPAs.

Additionally, the Departments received

comments related to the batching requirements for submission of disputes. Some

of these comments addressed specific difficulties in batching emergency medicine,

radiology, and anesthesiology services

and expressed a desire to broaden the

batching criteria. While the IDR Operations proposed rules included proposals

related to the batching requirements, these

comments were outside the scope of this

rulemaking because the IDR Fees proposed rules did not propose any changes

to the batching requirements or calculation of the QPA.

Finally, the Departments received

many comments suggesting different

administrative fee structures. For example, the Departments received comments

suggesting that the administrative fee

amount be split between the parties, be

refundable to the prevailing party, be

funded 75 percent by plans and issuers

and 25 percent by providers or be payable

at the end of the Federal IDR process.

The Departments also received comments

recommending a variable administrative

fee amount tied to the amount in dispute

or the QPA, either for all disputes or just

for batched disputes. Further comments

suggested capping the administrative fee

amount or imposing a base administrative

fee amount and an additional tiered fee

amount based on the amount in dispute.

As a result of the TMA IV opinion and

order having set aside the Departments’

guidance establishing administrative fees,

the Departments set a goal of establishing

in rulemaking administrative fee amounts

that would be effective as close to January

1, 2024 as possible, because the current

$50 administrative fee amount is insufficient to satisfy the statutory requirement

that the total amount of fees paid for the

year be estimated to be equal to the amount

of expenditures estimated to be made for

the year in carrying out the Federal IDR

process. If the Departments were to continue to impose a $50 per party per dispute administrative fee amount throughout 2024, the Departments estimate that

they would collect approximately $24.6

million in administrative fees for the year

(492,000 administrative fees paid x $50

per party per dispute), as discussed further in section IV.D.2.a of this preamble.

As discussed further in section II.A of this

preamble, the Departments estimate that

their expenditures to carry out the Federal IDR process in 2024 will be approximately $56.6 million. Therefore, if the

administrative fee amount remains at $50

per party per dispute in 2024, the Departments would significantly under-collect

administrative fees required to carry out

the Federal IDR process. Accordingly,

to be able to implement an increase to

the administrative fee amount as soon

as possible, consistent with the statutory

requirement, the IDR Fees proposed rules

proposed the amount of the administrative

fee and the preamble to the proposed rules

described the methodology for calculating

it.

The Departments did not propose any

changes to the structure of the administrative fee as this would take longer to

develop and implement and would be

more efficiently operationalized with the

changes proposed in the IDR Operations

proposed rules, which are intended to be

more comprehensive. While the Departments considered alternative fee structures in this rulemaking, the Departments

were of the view that addressing the structure of the administrative fee in the IDR

Operations proposed rules would give

interested parties more time to comment,

consider, and prepare for any fee structure

change, because the effective date of the

IDR Operations proposed rules, if finalized, will be later than the effective date

of these final rules.

Additionally, the policies proposed in

the IDR Operations proposed rules would

See 88 FR 75744.

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

January 29, 2024

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require more time for the Departments to

develop and implement due to the substantial changes to the Federal IDR portal required by those proposals, if finalized, including adopting new processes

to collect the administrative fees directly

from the parties and collecting differing

amounts of administrative fees from different parties in certain circumstances, as

described further in the IDR Operations

proposed rules. Therefore, the Departments deferred those proposed changes

to the Federal IDR process and administrative fee structure and collection procedures to the IDR Operations proposed

rules and prioritized completing this

rulemaking.

The Departments encourage interested parties to submit relevant comments

regarding batching and the administrative

fee structure, the new inputs to the administrative fee methodology, and the amount

of the fee proposed in the IDR Operations

proposed rules, in response to those proposed rules.65

The Departments also sought to establish in rulemaking certified IDR entity fee

ranges that would be effective as close to

January 1, 2024 as possible, because this

effective date would provide predictability

for certified IDR entities, who must plan

for and finalize their 2024 certified IDR

entity fixed fee amounts, and parties, who

must budget for their participation in the

Federal IDR process taking into account

both the administrative and certified IDR

entity fees. Establishing the certified IDR

entity fee ranges in rulemaking with an

effective date close to January 1, 2024

would also allow for greater transparency

than the current method of establishing

the fee ranges in guidance.

CFR 2590.716-8(d)(2)(ii) and (e)(2)(vii),

and 45 CFR 149.510(d)(2)(ii) and (e)(2)

(vii) to provide that the administrative fee

amount and the ranges for certified IDR

entity fees for single and batched disputes

will be set by the Departments through

notice and comment rulemaking, rather

than in guidance published annually. The

preamble to this rulemaking also sets forth

the methodology used to calculate the

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

entity fee ranges. These rules also finalize

the administrative fee amount and certified

IDR entity fee ranges for disputes initiated

on or after the effective date of these rules.

The finalized administrative fee amount

and certified IDR entity fee ranges in these

rules will remain in effect until changed

by notice and comment rulemaking.

The IDR Fees proposed rules proposed

that the administrative fee amount and certified IDR entity fee ranges finalized in these

final rules would be effective for disputes

initiated on or after the later of the effective

date of these rules or January 1, 2024. As

these final rules will not be effective by January 1, 2024, the Departments are finalizing the proposal that the administrative fee

amount and certified IDR entity fee ranges

in these rules will be effective for disputes

initiated on or after the effective date of

these rules, which is 30 calendar days from

publication in the Federal Register.

II. Overview of the Final Rules—

Departments of the Treasury, Labor,

and HHS

A. Administrative Fee Amount and

Methodology

F. Scope and Purpose of Rulemaking

1. Summary of Proposed and Finalized

Policies

These final rules amend 26 CFR

54.9816-8(d)(2)(ii) and (e)(2)(vii), 29

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

Code,66 section 716(c)(8)(A) of ERISA,67

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

Act,68 and the October 2021 interim final

rules,69 each party to a determination for

which a certified IDR entity is selected

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

section 9816(c)(8)(B) of the Code,70 section 716(c)(8)(B) of ERISA,71 section

2799A-1(c)(8)(B) of the PHS Act,72 and

the October 2021 interim final rules,73 the

administrative fee is established in a manner such that the total amount of administrative fees paid for a year are estimated

to be equal to the amount of expenditures

estimated to be made by the Departments

in carrying out the Federal IDR process

for that year.

The Departments proposed to establish the amount of the administrative fee

through notice and comment rulemaking

by amending 26 CFR 54.9816-8(d)(2)

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

45 CFR 149.510(d)(2)(ii). The Departments also proposed at 26 CFR 54.98168(d)(2)(ii), 29 CFR 2590.716-8(d)(2)

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

for disputes initiated on or after the later

of the effective date of these rules or

January 1, 2024, the administrative fee

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

changed by subsequent rulemaking.74

Under the proposed rules, the Departments would have retained the flexibility

to update the administrative fee more or

less frequently than annually if the total

estimated amount of administrative fees

paid or amount of expenditures estimated to be made by the Departments

in carrying out the Federal IDR process

changed such that a new administrative

fee amount would be required to satisfy

the requirement that the total amount of

administrative fees paid is estimated to

be equal to the amount of expenditures

estimated to be made by the Departments

in carrying out the Federal IDR process.

See 88 FR 75744.

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

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

42 U.S.C. 300gg–111(c)(8)(A).

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

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

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

42 U.S.C. 300gg–111(c)(8)(B).

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

As previously mentioned, in the event the effective date of these final rules is after January 1, 2024, the $50 per party per dispute administrative fee amount in effect for 2023, as provided

in the October 2022 guidance, will continue to apply to disputes initiated between January 1, 2024 and the effective date of these rules.

Bulletin No. 2024–5

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January 29, 2024

The Departments proposed to set the

administrative fee amount by estimating

the amount of expenditures made by the

Departments in carrying out the Federal

IDR process and dividing this amount by

the estimated total number of administrative fees paid by the parties. As explained

in the preamble to the IDR Fees proposed

rules, the Departments estimated the total

number of administrative fees paid based

on the total volume of closed disputes.

For the purpose of calculating the

administrative fee amount in the IDR

Fees proposed rules, the Departments

projected that approximately 225,000 disputes would be closed annually, resulting

in 450,000 administrative fees paid. Additionally, the Departments estimated that

the expenditures made by the Departments

for carrying out the Federal IDR process

in 2024 would be approximately $70 million.75 Using this methodology, proposed

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

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

CFR 149.510(d)(2)(ii), the Departments

calculated the proposed administrative fee

for disputes initiated on or after the effective date of these rules, and continuing

until changed by subsequent rulemaking,

by dividing the annual expenditures of

approximately $70 million estimated to

be made by the Departments in carrying

out the Federal IDR process by 450,000,

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

parties. This resulted in a proposed administrative fee amount of $150 per party per

dispute.76

After considering comments received

on the proposals, as discussed further in

this preamble section, the Departments are

finalizing the policy to set the administrative fee amount in notice and comment

rulemaking no more frequently than once

per calendar year. The Departments may

set the administrative fee less frequently

than annually if the Departments estimate

that the total amount of administrative fees

paid under the current administrative fee

amount would continue to be equal to the

amount of expenditures estimated to be

made by the Departments in carrying out

the Federal IDR process for the upcoming

calendar year.

Additionally, in response to comments

received on the proposals, the Departments are modifying the administrative

fee methodology used to estimate the

number of administrative fees paid. The

Departments will use the estimated number of administrative fees paid to certified

IDR entities, rather than the estimated

number of closed disputes, to estimate

the total number of administrative fees

paid. In addition, the Departments will

not assume, as set forth in the IDR Fees

proposed rules, a 25 percent reduction in

the volume of disputes as the result of the

District Court vacating certain batching

requirements in TMA IV. The Departments

are also revising the expenditures estimated to be made by the Departments in

carrying out the Federal IDR process from

approximately $70 million to approximately $56.6 million to reflect a reduction

in the Departments’ anticipated assistance

with eligibility determinations, as discussed later in this preamble. Collectively,

these modifications to the methodology

result in a finalized administrative fee

amount of $115 per party per dispute for

disputes initiated on or after the effective

date of these rules. As the administrative

fee methodology in the IDR Operations

proposed rules included some of the same

elements as the administrative fee methodology in the IDR Fees proposed rules,

the Departments will consider whether

any modifications made to the administrative fee methodology in these final rules

should also be adopted when finalizing the

administrative fee amount using the methodology proposed in the IDR Operations

proposed rules.

2. Summary of Comments Received and

Responses to Comments

a. Establishing the Administrative Fee in

Notice and Comment Rulemaking

Many commenters supported the proposal to establish the administrative fee

in notice and comment rulemaking. Com-

menters stated that this transparent process would allow the public to evaluate

the administrative fee amount and provide

feedback on the feasibility of providers

using the Federal IDR process. However,

several commenters opposed the proposal

to establish the administrative fee amount

more or less frequently than annually and

stated that adopting this proposal would

introduce uncertainty in the Federal IDR

process and would make budgeting more

challenging. These commenters requested

that the Departments update the administrative fee annually, to balance stability,

transparency, and responsiveness, which

they stated would mitigate the impact of

changes to the administrative fee. One

commenter supported the proposal to

establish the administrative fee amount

more or less frequently than annually, but

only if a mid-year change led to a decrease

to the administrative fee amount. Commenters also stated that any increases to

the administrative fee amount should be

on an annual basis with advance notice

to interested parties. One of these commenters stated that the administrative fee

amount should be set predictably and with

at least 90 days’ advance notice. Some

commenters requested further clarification on the process for proposing and

finalizing administrative fee amounts in

notice and comment rulemaking.

The Departments agree that one of the

goals of establishing the administrative fee

amount in notice and comment rulemaking is to foster transparency and allow

interested parties to provide feedback on

the methodology and process for setting

the proposed fee amount. The Departments recognize commenters’ concerns

about establishing the administrative fee

amount more or less frequently than annually, and the Departments are finalizing a

policy under which they would establish

the administrative fee amount no more

frequently than once per calendar year. In

addition, the Departments are finalizing

as proposed the proposal to change the

administrative fee amount less frequently

than annually if the expenditures estimated

to be made by the Departments in carrying

The list of expenditures associated with the estimated $70 million was provided in the IDR Fees proposed rules at 88 FR 65893.

As described in the IDR Fees proposed rules, the Departments estimated that the proposed administrative fee amount of $150 per party per dispute would result in an estimated annual

collection approximately equal to the estimated annual expenditures of approximately $70 million. See 88 FR 65888 at 65899.

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out the Federal IDR process and the estimated total amount of administrative fees

paid in the upcoming year are estimated

to be equal. If the Departments determine

that the estimated total amount of administrative fees paid in a future year at the

current administrative fee amount would

be less than the expenditures estimated to

be made by the Departments in carrying

out the Federal IDR process for that year,

the Departments would propose to raise

the administrative fee amount in notice

and comment rulemaking. Alternatively,

if the Departments determine that the estimated total amount of administrative fees

paid in a future year at the current administrative fee amount would be more than

the expenditures estimated to be made in

carrying out the Federal IDR process for

that year, the Departments would propose

to lower the administrative fee amount in

notice and comment rulemaking. Consistent with the statute, the Departments

will set the administrative fee such that

the estimated total amount of administrative fees paid is equal to the amount of

expenditures estimated to be made by the

Departments in carrying out the Federal

IDR process.77

The Departments also reiterate that

using the notice and comment rulemaking process to establish the administrative

fee amount will provide interested parties

with substantial advance notice of fee

changes, so additional advance notice is

not needed. As described in the IDR Fees

proposed rules, the Departments will provide details on the methodology used to

determine the proposed administrative fee

amount, and the proposed administrative

fee amount, if finalized, would be effective prospectively. Interested parties will

be provided with a period to submit public comments on the proposals, and the

Departments will consider all comments

submitted within the comment period in

developing the final rules.

In addition, other commenters raised

concerns regarding the amount of the

administrative fee changing between any

proposed and final rules. One commenter

did not support making changes to the

administrative fee amount between the

proposed and final rules, while another

commenter stated that any such changes

should be by no more than 10 percent.

The Departments acknowledge these

commenters’ suggestions but note that the

Departments may have more recent data

available to estimate the total amount of

administrative fees paid or the amount of

expenditures estimated to be made by the

Departments in carrying out the Federal

IDR process while developing the final

rules than they had while developing the

IDR Fees proposed rules, and it is reasonable for the Departments to rely on the

more recent data in developing the final

rules, provided that they use the methodology described in the preamble to the

IDR Fees proposed rules or a methodology modified from the preamble to the

IDR Fees proposed rules in response to

comments. As in these final rules, these

circumstances may result in the Departments finalizing a different administrative

fee amount than the amount proposed.

The finalized administrative fee amount

will differ from the amount proposed, if

necessary, to comply with the statutory

requirement that the total administrative

fees paid are estimated to be equal to the

amount of expenditures estimated to be

made by the Departments in carrying out

the Federal IDR process.78

One commenter was concerned about

the ability to comment on the administrative fee amount rather than just the methodology used to calculate the amount and

stated that only seeking comment on the

methodology could inhibit commenters’

ability to accurately express the impact of

the proposed fee amount on a disputing

party’s access to the Federal IDR process.

As previously explained, the Departments are finalizing a policy to establish

the administrative fee amount in notice

and comment rulemaking no more fre-

quently than once per calendar year and

will provide opportunity for comment

on any new proposed administrative fee

amount, as well as any changes to the

methodology used to calculate the administrative fee amount.

b. Administrative Fee Methodology

– Estimated Total Number of

Administrative Fees Paid

Many commenters opposed the

Departments’ proposed administrative

fee methodology for estimating the total

number of administrative fees to be paid.

Many commenters suggested that estimating the total number of administrative fees

paid based on the projected total number

of disputes closed would not capture all

disputes in which administrative fees are

paid. Some commenters were concerned

that this methodology could result in an

overpayment of administrative fees to the

Departments. One of these commenters

was concerned that the data from the sixmonth period in 2023 used to estimate the

number of disputes closed would be radically different from 2024 data. Several

commenters suggested using other metrics to calculate the estimated total number of administrative fees paid, including

the number of disputes initiated, the number of disputes for which a certified IDR

entity fee was paid, and the number of disputes for which parties submitted offers.

Moreover, some commenters asserted

that using disputes closed contradicts the

Departments’ regulations requiring each

party to pay the administrative fee at the

time the certified IDR entity is selected

and the Departments’ guidance permitting

certified IDR entities to collect the administrative fee from parties up to the time of

offer submission.79

The Departments proposed to use the

projected total number of disputes closed

to calculate the administrative fee amount

because that metric reflected collections

under current collections processes,80 and

Section 9816(c)(8)(B) of the Code, section 716(c)(8)(B) of ERISA, and section 2799A-1(c)(8)(B) of the PHS Act.

Id.

See 26 CFR 54.9816-8(d)(2)(i), 29 CFR 2590.716-8(d)(2)(i), and 45 CFR 149.510(d)(2)(i); see also section 4.8 of the Federal Independent Dispute Resolution (IDR) Process Guidance

for Certified IDR Entities. October 2022. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/federal-independent-dispute-resolution-process-guidance-for-certified-idr-entities.pdf.

Under current guidance, the administrative fee may be collected by certified IDR entities up until the time the parties submit their offers, and therefore the administrative fee is not collected

for all disputes initiated. See, for example, Centers for Medicare & Medicaid Services (March 2023). Federal Independent Dispute Resolution (IDR) Process Guidance for Certified IDR

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

Bulletin No. 2024–5

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January 29, 2024

the Departments were of the view that it

was a reliable metric upon which to base

the estimated total number of administrative fees to be paid. However, after considering the comments, the Departments

agree with the commenters who stated

that estimating the total number of administrative fees paid using the projected

number of disputes closed would not capture all disputes in which administrative

fees are paid because administrative fees

may be paid for disputes that have not

yet been closed. To capture all disputes in

which parties pay administrative fees, the

Departments are finalizing the administrative fee amount based on a methodology

that estimates the total number of administrative fees paid by projecting Federal

IDR portal data on the number of administrative fees paid to certified IDR entities,

as explained in the subsequent paragraphs.

The number of administrative fees paid to

certified IDR entities is currently the best

available metric in the Federal IDR portal data to capture all administrative fees

parties pay for disputes in any stage of the

Federal IDR process.

In the preamble to the IDR Fees proposed rules, the Departments set the

administrative fee amount based on the

projection that 225,000 disputes would be

closed annually. Because both initiating

and non-initiating parties to a dispute are

required to pay the administrative fee, the

Departments estimated in the preamble to

the IDR Fees proposed rules that 450,000

administrative fees would be paid annually, or 37,500 per month. As explained

above, in setting the administrative fee

in these final rules, the Departments are

using the total number of administrative

fees paid to certified IDR entities for disputes in any stage of the Federal IDR process after certified IDR entity selection.

Using the methodology being adopted in

these final rules, the Departments estimate

that 492,000 administrative fees will be

paid annually, or 41,000 administrative

fees will be paid per month, by the parties.

The Departments estimate the total number of administrative fees paid annually

based on the monthly average number of

administrative fees paid to certified IDR

entities between February 2023 and July

2023. This monthly average was approximately 41,000, and the Departments projected this figure forward by 12 months to

estimate that 492,000 administrative fees

will be paid annually.

The Departments are using data from

the same time period that was used in the

IDR Fees proposed rules (February 2023

to July 2023), without updating to newer

data. Data from this time period remains

the best available data to project future

trends due to portal closures and other

Federal IDR process changes that began

in August 2023 due to the TMA III and

TMA IV opinions and orders. While the

Departments considered using data from

the most recent six-month period prior

to the finalization of this rule (June 2023

to November 2023), they concluded this

would inaccurately reflect the monthly

average number of administrative fees

paid, as various aspects of the Federal

IDR process were temporarily suspended

from August 4, 2023 to October 6, 2023

for all disputes.81

The Departments considered comments providing alternatives for estimating the total number of administrative fees

paid in calculating the administrative fee

amount. Some commenters wanted the

Departments to estimate the total number

of administrative fees paid based on the

number of disputes initiated. This metric

is inaccurate for purposes of calculating

the administrative fee amount because the

administrative fee may not be collected

for all disputes initiated. The obligation

for parties to pay the administrative fee

attaches at the time of certified IDR entity

selection (with guidance permitting certified IDR entities to collect the administrative fee from parties until the time of

offer submission). Therefore, if a dispute

is withdrawn before selection of the cer-

tified IDR entity, there is no obligation

for the parties to pay administrative fees

for that dispute. For this reason, using the

total number of disputes initiated to estimate the number of administrative fees to

be paid in the administrative fee methodology risks the Departments underfunding

the Federal IDR process.82

Other commenters requested the

Departments to estimate the total number

of administrative fees paid based on the

number of disputes for which a certified

IDR entity fee was paid. Because parties

are not required to pay their certified IDR

entity fees and administrative fees at the

same time, the number of certified IDR

entity fees paid would not necessarily

reflect the number of administrative fees

paid. Therefore, this metric would also be

inaccurate for purposes of calculating the

administrative fee amount.

Finally, the Departments also considered estimating the total number of administrative fees paid based on the number

of disputes for which parties submitted

offers. However, the Departments did

not believe this metric would accurately

reflect the estimated number of administrative fees that would be paid, since parties may pay administrative fees without

submitting offers. Thus, the metric could

understate the total number of administrative fees paid.

In summary, the Departments are of

the view that it is most accurate to use the

total number of administrative fees paid

to certified IDR entities in the administrative fee methodology rather than the

other metrics suggested by commenters

in the prior paragraphs, as this metric

reflects actual administrative fees that

have been paid for disputes in any stage

of the Federal IDR process after certified

IDR entity selection.83 Therefore, in recognition of commenters’ concerns about a

methodology that could underestimate the

total number of administrative fees paid in

2024, resulting in an overestimate of the

amount of the administrative fee needed

Of note, batched disputes and single disputes involving air ambulance services also remained suspended after October 6, 2023 and would not be reflected in the most recent data.

In the IDR Operations proposed rules, the Departments proposed to use the total volume of disputes projected to be initiated because the proposed operational changes in those rules, if

finalized, would result in the Departments’ collection of administrative fees closer to a dispute’s date of initiation, and therefore, it may be appropriate to estimate the total volume of administrative fees paid using the total volume of disputes initiated. 88 FR 75793.

As explained in these final rules, under current processes, the total volume of administrative fees paid to certified IDR entities is the best metric to use in the administrative fee methodology

to align with statute requiring the Departments to estimate the total number of administrative fees paid. As operations of the Federal IDR process improve over time, the Departments will

consider changes to the methodology to best estimate the total number of administrative fees paid.

January 29, 2024

582

Bulletin No. 2024–5

for 2024, the Departments are establishing the administrative fee methodology

using the total number of administrative

fees paid to certified IDR entities, rather

than the total number of closed disputes,

to estimate the total number of administrative fees paid in 2024.

The Departments also received comments regarding the Departments’ projections of the total number of closed

disputes used to estimate the total number

of administrative fees paid. Several commenters suggested that the Departments’

estimate of 225,000 closed disputes is too

low. A few commenters suggested that the

Departments are underestimating utilization of the Federal IDR process and recommended that the Departments analyze

the available data from States implementing similar policies before the No Surprises Act.

In the IDR Fees proposed rules, the

Departments estimated that 225,000

disputes would be closed annually, and

because both the initiating and non-initiating parties to a dispute are required to pay

the administrative fee, 450,000 administrative fees would be paid annually. The

Departments now estimate that 492,000

administrative fees will be paid to certified

IDR entities in the year, as described earlier in this preamble section. The Departments continue to be of the view that Federal IDR process data is the best available

data to project trends in the Federal IDR

process, especially because regulations

and volume differ in State IDR processes.

As mentioned in the IDR Fees proposed

rules, the Departments initially anticipated

17,333 disputes involving non-air ambulance services would be initiated during

the first year of implementation of the Federal IDR process. The Departments developed this estimate based on the experience

of New York State. However, the use of

State data resulted in the Departments

underestimating utilization of the Federal

IDR process, as nearly 335,000 disputes

were initiated in the Federal IDR process

between April 2022 and March 2023.84 As

demonstrated by this result, past data from

State processes has limited applicability

in predicting future use of the Federal

IDR process. For this reason, the Departments are of the view that it is better to

use Federal IDR process data rather than

State data to estimate the total number of

administrative fees paid.

In addition, several commenters disagreed with the Departments’ assumption

of a 25 percent reduction in the volume

of disputes in estimating the total number

of administrative fees paid to account for

the impact of TMA IV’s vacatur of batching regulations and guidance, or asked

for more detail on how the projected 25

percent reduction factor was determined,

including the details on how the batching of claims will be treated in the future.

One commenter noted that the vacatur of

the $350 administrative fee amount and

batching regulations as a result of TMA IV

allows many additional claims to become

economically viable, so the Departments

should expect dispute volume to increase.

Another commenter stated that the Departments cannot know with certainty that the

TMA IV opinion and order will decrease

the number of disputes. This commenter

also asserted that TMA IV did not affect

the batching criteria that serve as the largest obstacle for emergency medicine, and

therefore there will not be large batches

in emergency medicine, which the commenter noted comprised over 70 percent

of disputes reflected in the Partial Report

on the Independent Dispute Resolution

(IDR) Process October 1 – December 31,

2022.85 Moreover, a few commenters suggested that the TMA III opinion and order

will increase dispute volume as providers

will continue to see low QPAs from plans

and issuers and will rely on the Federal

IDR process for appropriate payment. One

commenter agreed with the Departments’

assumption that the TMA IV opinion and

order will decrease the volume of disputes but disagreed with the Departments’

rationale that the increased number of line

items will take more time to close. This

commenter expected that providers batching claims rather than submitting claims

individually would increase efficiencies in

the Federal IDR process.

After reviewing the comments, the

Departments have reconsidered the

assumption that the number of disputes

will decrease by 25 percent as a result of

TMA IV’s vacatur of batching regulations

and guidance. Therefore, the Departments

are not finalizing the projected 25 percent

reduction in the estimated total number of

administrative fees paid.

The Departments recognize that certain

batching criteria remain in place, such as

criteria that impact the batching of emergency medicine claims, and items and services included in such claims will have to

be submitted as separate disputes if they do

not comply with the applicable batching

criteria.86 Moreover, because the Departments are finalizing the administrative

fee amount based on a methodology that

estimates the total number of administrative fees paid based on the total number of

administrative fees paid to certified IDR

entities, rather than the total number of

closed disputes, the methodology no longer requires the Departments to make an

assumption on whether batched disputes

will take more time to close after the vacatur of the batching regulations as a result

of TMA IV. In addition, the Departments

do not have data available to support commenters’ assertion that TMA III will lead

more providers to rely on the Federal IDR

process for appropriate claims payment.

Plans and issuers are required to calculate

QPAs using a good faith, reasonable interpretation of the applicable statutes and

regulations that remain in effect after the

TMA III opinion and order.87 Furthermore,

in their experience operating the Federal

IDR process, the Departments have not

seen a clear or quantifiable relationship

between changes in policy and changes

in the number of disputes initiated. The

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

U.S. Department of Health and Human Services, U.S. Department of Labor, U.S. Department of the Treasury. Partial Report on the Independent Dispute Resolution (IDR) Process October

1 – December 31, 2022. https://www.cms.gov/files/document/partial-report-idr-process-octoberdecember-2022.pdf.

U.S. Department of Health and Human Services, U.S. Department of Labor, U.S. Department of Treasury, Office of Personnel Management (October 6, 2023). FAQs about Consolidated

Appropriations Act, 2021 Implementation Part 62. https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-62.pdf and https://www.cms.gov/files/

document/faqs-part-62.pdf.

Id.

Bulletin No. 2024–5

583

January 29, 2024

Departments are of the view that the historical data from February 2023 to July

2023 is the best available data at this time

to project utilization of the Federal IDR

process in 2024, and the Departments are

therefore finalizing the administrative fee

amount based on a methodology that does

not include a 25 percent reduction in the

volume of disputes.

c. Administrative Fee Methodology –

Estimated Expenditures

The Departments also received comments related to their estimated expenditures for purposes of calculating the

administrative fee amount. Several commenters suggested that the Departments

should disclose more data supporting the

estimated costs to carry out the Federal

IDR process in the administrative fee

methodology to provide the public with

an opportunity to comment. Some of these

commenters asserted that the IDR Fees

proposed rules did not provide enough

detail on the estimated expenditures to

allow interested parties to provide meaningful comment on the proposed administrative fee amount. One commenter urged

the Departments to establish a regular

process for detailing the Departments’

data on the administrative fee, including

an annual disclosure statement with a balance sheet, to promote transparency and

predictability. A few commenters disputed

the Departments’ reference that Freedom

of Information Act (FOIA) regulations

prevent the Departments from providing

detail on certain estimated expenditure

amounts. These commenters stated that

without this transparency, interested parties were not afforded an opportunity to

meaningfully comment on the proposals

related to the administrative fee amount

and methodology inputs.

The Departments are finalizing the

administrative fee amount based on

a methodology that divides the “estimated,” rather than “projected,” expen-

ditures to carry out the Federal IDR

process by the estimated total number

of administrative fees to be paid in the

year. The use of “estimated” rather than

“projected” expenditures is to ensure the

terminology used to describe the methodology is consistent with that of the statutory text.88 To calculate the estimated

expenditures to carry out the Federal

IDR process, the Departments included

the Federal resources needed to carry out

the Federal IDR process, such as future

personnel and contract costs. The preamble to the IDR Fees proposed rules provided an overview of the future contract

costs and Federal resources included in

the estimated expenditures and explained

that the estimated expenditures to carry

out the Federal IDR process in 2024 were

approximately $70 million. The Departments disagree with commenters that the

Departments did not provide sufficient

information to allow meaningful comment. In particular, in the preamble to

the IDR Fees proposed rules, the Departments provided details on the types of

costs that are included in the estimated

expenditures.89

While the Departments described the

contract costs and Federal resources associated with estimated expenditures to

carry out the Federal IDR process in the

preamble to the IDR Fees proposed rules,

in response to comments requesting additional specifics on the estimated expenditures and in an effort to promote transparency, the Departments are providing

further detail on costs included in the total

estimated expenditures in these final rules

within the bounds of the Departments’

ability to disclose these amounts. To avoid

releasing sensitive contract information,

the Departments are breaking down the

costs, which include the future contract

and Federal personnel costs, by category

of expenditure, and providing approximate cost estimates for carrying out the

following categories of Federal IDR process activities:90

•

Maintaining, operating, and improving the Federal IDR portal, certifying

IDR entities, and collecting data from

certified IDR entities (approximately

$26,360,000);

• Conducting program integrity activities, such as certain QPA audits (as

further described subsequently in

this preamble) and IDR decision

audits, and receiving and investigating Federal IDR process-related complaints (approximately $13,060,000,

of which QPA audits resulting from

complaints filed by providers, facilities, or providers of air ambulance

services comprise approximately

$5,000,000);

• Providing outreach to parties and

technical assistance to certified IDR

entities, including assisting with eligibility determinations when the volume of disputes submitted exceeds

the capacity of certified IDR entities to perform those determinations

(approximately $11,630,000, of

which assisting with eligibility determinations comprises approximately

$10,000,000);91 and

• Collecting

administrative

fees

(approximately $5,530,000), which

includes costs to invoice certified

IDR entities for administrative fees

collected, provide the system infrastructure for certified IDR entities to

record and remit administrative fees

collected, track data on fees collected

and make continuous improvements

to the collections process and invoicing systems.

The Departments are publishing summary-level estimated budget information

and have provided meaningful data for

public input for the purposes of calculating the administrative fee amount. The

Departments intend to continue to provide

data on the Federal IDR process to promote transparency and predictability in

the administrative fee amount, including

publishing quarterly public reports with

Section 9816(c)(8)(B) of the Code, section 716(c)(8)(B) of ERISA, and section 2799A-1(c)(8)(B) of the PHS Act.

88 FR 65893.

As discussed further later in this preamble section, the Departments have reconsidered costs associated with total estimated expenditures of carrying out the Federal IDR process and are

revising the total estimated expenditures for 2024 from approximately $70 million to approximately $56.6 million. Additionally, certain expenses apply across multiple categories that were

included in the IDR Fees proposed rules. This revised combination of categories better provides a meaningful cost estimate of these activities.

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

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

January 29, 2024

584

Bulletin No. 2024–5

the Departments’ expenditures and administrative fee collections.92

In response to commenters’ concerns

regarding the Departments’ reference to

the applicability of FOIA exemptions to

information shared during the rulemaking

process, the Departments clarify that they

will disclose information in response to

any requests in accordance with the FOIA

and accompanying regulations. However,

the Departments are not publishing specific future contract estimates in this rule

in response to commenters’ requests for

more detail on estimated expenditures of

Federal IDR process activities and the

data underlying those estimates because

publishing those contract estimates could

undermine future contract procurements.

For example, if the Departments were to

publish the projected future cost of the

contracts used to maintain the Federal IDR

portal, the Federal Government would be

meaningfully disadvantaged in future contract negotiations related to the Federal

IDR portal, as bidders would know how

much the Departments anticipate such

a future contract being worth. Although

current contract awards are published and

publicly available,93 these award amounts

do not necessarily reflect the future value

of the contract, as there may be future

changes in policy and operations and the

scope of work.

The Departments are of the view that

interested parties had sufficient information to meaningfully comment on the IDR

Fees proposed rules. For example, commenters provided valuable information in

their comments regarding how the Departments should estimate the total number of

administrative fees paid. Based on these

comments, the Departments modified the

methodology accordingly. Similarly, the

Departments provided detailed information in the IDR Fees proposed rules on

their calculation of the estimated expenditures to carry out the Federal IDR process.

Specifically, the Departments detailed the

types of activities included in estimating

the annual expenditures of approximately

$70 million and received comments on

these activities. After considering comments received on these details of the

administrative fee methodology, the

Departments have revised this estimate

of annual expenditures down to approximately $56.6 million, as explained in later

paragraphs.

In addition, many commenters raised

concerns about the inclusion of certain

types of expenses in the administrative fee

methodology. Several commenters recommended excluding all or some of the QPA

audit costs given that the QPA also serves

a purpose outside of the Federal IDR process in calculating patient cost sharing.

Some commenters asked the Departments

to disclose their total expenditures on

QPA audits and the portion proposed to be

funded by administrative fees compared

to other sources.

As previously mentioned, the Departments are required to include estimated

expenditures to carry out the Federal IDR

process, which include contract costs

and Federal resources, in calculating the

administrative fee amount. Accordingly,

the Departments disagree with commenters who suggested that QPA audit costs

should not be included in the calculation

of the administrative fee amount and are

adopting an administrative fee methodology that includes certain QPA audit costs

in the estimated expenditures. For any

dispute in the Federal IDR process, a plan

or issuer would have been required to disclose the QPA to the provider along with

the initial payment or notice of denial of

payment for items and services, and disputing parties must include the QPA for

items and services when initiating a dispute. Certified IDR entities are required to

consider the QPA when selecting between

the offers submitted by disputing parties

when determining the total out-of-network payment rate for items and services

subject to the Federal IDR process.94

Furthermore, it is the responsibility of

the Departments (or the applicable State

authorities), rather than the provider,

facility, provider of air ambulance services, or the certified IDR entity, to monitor plan and issuer compliance with the

QPA requirements.95 To date, the Departments have only conducted audits as

part of investigations of complaints, and

anticipate continuing to conduct these

risk-based audits in the future, though

the No Surprises Act permits the Departments to conduct random and risk-based

audits.96 Given the role of the QPA in the

Federal IDR process and the direct impact

on providers, performing audits on plans

and issuers in response to allegations that

the plan’s or issuer’s QPAs are inaccurate

is necessary to carry out the Federal IDR

process and promotes the integrity of and

confidence in the Federal IDR process.

Moreover, addressing concerns about

inaccurately calculated QPAs helps to

ensure plans and issuers provide correctly

calculated QPAs when they participate in

the Federal IDR process. For example, in

the absence of QPA audits to investigate

complaints from providers, facilities, and

providers of air ambulance services that

one or more of a plan’s or issuer’s QPAs

are inaccurate, plan and issuer compliance with QPA requirements would go

unchecked.97 Certified IDR entities must

consider the relevant QPA in making

each payment determination under the

No Surprises Act,98 and unchecked QPAs

would significantly threaten the integrity

of QPAs and the payment determinations

See, e.g., U.S. Department of Health and Human Services, U.S. Department of Labor, U.S. Department of the Treasury. Initial Report on the Independent Dispute Resolution (IDR) Process

April 15 – September 30, 2022. https://www.cms.gov/files/document/initial-report-idr-april-15-september-30-2022.pdf. U.S. Department of Health and Human Services, U.S. Department

of Labor, U.S. Department of the Treasury. Partial Report on the Independent Dispute Resolution (IDR) Process October 1 – December 31, 2022. https://www.cms.gov/files/document/

partial-report-idr-process-octoberdecember-2022.pdf.

Available at www.sam.gov.

Section 9816(c)(5)(C)(i)(I) of the Code, section 716(c)(5)(C)(i)(I) of ERISA, and section 2799A-1(c)(5)(C)(i)(I) of the PHS Act.

Section 9816(a)(2)(A)(i) of the Code, section 716(a)(2)(A) of ERISA, and section 2799A-1(a)(2)(A)(i) of the PHS Act. See also 86 FR 36899. However, a provider or facility may always

assert to the certified IDR entity that additional information points in favor of the selection of its offer as the out-of-network payment amount, even where that offer is for a payment amount

that is different from the QPA. 87 FR 52627.

Section 9816(a)(2)(A)(ii) of the Code, and section 2799A-1(a)(2)(A)(ii) of the PHS Act. The July 2021 interim final rules describe the enforcement responsibilities for each Department and

OPM. 86 FR 36899 (July 13, 2021). https://www.federalregister.gov/documents/2021/07/13/2021-14382/requirements-related-to-surprise-billing-part-i.

The accuracy of a plan’s or issuer’s QPA (or QPA methodology) may not be reviewed within a payment determination under the Federal IDR process. See 86 FR 55996.

Section 9816(c)(5)(C)(i)(I) of the Code, section 716(c)(5)(C)(i)(I) of ERISA, and section 2799A-1(c)(5)(C)(i)(I) of the PHS Act.

Bulletin No. 2024–5

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January 29, 2024

made by certified IDR entities. These

audits help to increase transparency into

the QPA calculation methodology and

encourage compliance among plans and

issuers. Accordingly, QPA audits are an

integral part of the Federal IDR process,

the costs of which are reasonably included

in the calculation of the administrative fee

amount.

In estimating the expenditures to carry

out the Federal IDR process, the Departments are including estimated costs only

for certain QPA audits that the Departments anticipate incurring to investigate

complaints regarding inaccurate QPAs

made by providers, facilities, and providers of air ambulance services under the

Federal IDR process. The Departments

are not including the costs of QPA audits

conducted: (1) in connection with Department of Labor, OPM, or Department of

the Treasury investigations; (2) randomly;

or (3) in response to complaints from consumers, as not all of these audits are necessarily related to the Federal IDR process.

The Departments are of the view that only

the costs related to QPA audits conducted

in response to complaints from entities that

are potential parties to a payment determination are sufficiently related to the Federal IDR process to justify their inclusion

in the administrative fee calculation. For

example, consumers who complain that a

plan or issuer inaccurately calculated their

cost sharing based on an erroneously calculated QPA will not be involved in the Federal IDR process, and therefore the costs

of such audits are appropriately excluded

from those costs supported by administrative fees paid by parties to the Federal IDR

process. Because HHS is primarily responsible for the implementation of the Federal

IDR process, the Departments view similarly random QPA audits that may be conducted by the Departments, as well as any

QPA audits in connection with Department

of Labor, OPM, and Department of the

Treasury investigations.

The costs of HHS conducting QPA

audits for complaints that a plan’s or issuer’s QPAs are inaccurate are estimated

to be approximately $5,000,000 in 2024.

As plans and issuers improve their compliance in calculating QPAs correctly,

the Departments anticipate that the costs

of conducting these audits will decrease,

which would be reflected in the estimated

expenditures used to determine future

administrative fee amounts.

Several commenters also disagreed

with including costs associated with

assisting with eligibility reviews in the

estimated expenditures to carry out the

Federal IDR process. A few of these commenters noted that certified IDR entities

are responsible for conducting eligibility

reviews and therefore certified IDR entity

fees should cover this cost. Some commenters asserted that such costs should be

recovered through the non-prevailing party’s certified IDR entity fee, as the eligibility determination is part of the payment

determination. One of these commenters

expressed concern that including this

expense would incentivize certified IDR

entities to understaff as HHS would intervene to address a staffing shortage.

The Departments disagree that the costs

of assisting with eligibility determinations

should be excluded from estimated expenditures. Certified IDR entities voluntarily

participate in the Federal IDR process and

set their certified IDR entity fees within

ranges established by the Departments to

ensure they remain financially viable and

that such fees can cover their operating

expenses to participate in the Federal IDR

process, which include the costs incurred

in determining the eligibility of items

and services for the Federal IDR process.

While certified IDR entities are responsible for making eligibility determinations,

and therefore incur costs associated with

this activity, the Departments have also

incurred costs since November 2022

to assist certified IDR entities in making these determinations by performing

research and outreach on disputes pending

eligibility determinations, including identifying and obtaining information necessary for certified IDR entities to make eligibility determinations, and will continue

to incur such costs in 2024.99 The Departments disagree with the commenter that

stated that the Departments’ assistance

would incentivize certified IDR entities

to understaff. Certified IDR entities could

not have reasonably predicted the amount

of personnel they would need to make eligibility determinations within the required

timeframe given the extremely high volume of disputes. Moreover, it has been

difficult for certified IDR entities to make

staffing adjustments in response to utilization of the Federal IDR process due to the

repeated temporary pauses in the Federal

IDR portal resulting from litigation matters and changes in operations.

When the Departments first developed

the Federal IDR process and the rules and

guidance establishing how certified IDR

entities were to calculate their fees for

the scope of work they were expected to

perform, the Departments and the certified

IDR entities did not anticipate the significant difficulty and costs involved in determining eligibility for the Federal IDR

process. After six months of operating the

Federal IDR process and receiving feedback from disputing parties and certified

IDR entities, the Departments determined

that it was necessary to assist certified

IDR entities with determining eligibility

through performing research and outreach

on disputes pending eligibility determinations, including identifying and obtaining

information necessary to make an eligibility determination.100 The Departments

determined that this course of action was

necessary when it became clear that eligibility determinations were taking significantly longer than the Departments had

anticipated.

In the IDR Operations proposed rules,

the Departments proposed several policies aimed at improving communication

between the parties that would make

eligibility determinations less burdensome for certified IDR entities and speed

up the Federal IDR process, as well as

allow the Departments to make eligibility determinations under extenuating circumstances.101 However, these policies, if

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

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

100

The Departments are providing technical assistance regarding eligibility but are not making eligibility determinations, as, under current regulations, only certified IDR entities may make

eligibility determinations.

Id.

101

88 FR 75744.

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finalized, will take time to implement. In

the interim, the Departments are working

to balance feedback from interested parties asking the Departments to increase the

efficiency of the Federal IDR process and

decrease the backlog of disputes with other

feedback asking the Departments to minimize expenditures and avoid increases to

the administrative fee. The Departments

have also received comments urging them

to shorten the time it takes for payment

determinations to be reached. The Departments continue to believe that some level

of assistance is necessary to address the

high volume of disputes submitted and

the backlog of disputes, due in part to

the closing and reopening of the Federal

IDR process to make necessary systems

updates in light of the TMA III and TMA

IV opinion and orders.

However, after reviewing comments,

the Departments have reconsidered the

amount of estimated costs associated

with pre-eligibility reviews that should be

included in the estimated expenditures to

carry out the Federal IDR process in calendar year 2024. In estimating the expenditures of approximately $70 million in

the IDR Fees proposed rules, the Departments included an increase in costs to

reflect the Departments taking on a greater

role in assisting with eligibility determinations to improve the efficiency of the Federal IDR process.102 Based on comments

received urging the Departments to avoid

increasing the administrative fee, the

Departments will not take on a greater role

in broadly assisting certified IDR entities

with eligibility determinations at this time.

Instead, the Departments will limit their

assistance with eligibility determinations

to more complex disputes, such as disputes where there is missing information

to determine Federal versus State jurisdictions in a State with a specified State law.

This approach will ensure efficient use of

the Departments’ resources by leveraging

the Departments’ assistance and expertise

in handling pre-eligibility reviews for disputes that certified IDR entities may need

to spend more time on, such as disputes

for which information was limited due to

the systems in place when those disputes

were initiated, and will allow certified

IDR entities to focus on moving disputes

through the Federal IDR process. Furthermore, this will allow the Departments to

keep the costs of assisting with eligibility

determinations lower in 2024 such that the

expenditures estimated to be made by the

Departments to carry out the Federal IDR

process are now estimated to be approximately $56.6 million in 2024. The total

estimated expenditures in the IDR Fees

proposed rules included approximately

$20 million for the Departments to assist

with eligibility determinations via conducting research and outreach. The estimated cost of assisting with eligibility

determinations in 2024, as used to calculate the administrative fee as finalized, is

approximately $10 million.

Furthermore, the Departments do not

anticipate that the decision to focus their

assistance with pre-eligibility reviews on

more complex disputes and the revised

administrative fee amount finalized in

these rules will impact the fees certified

IDR entities choose to charge. Given the

backlog of disputes, utilization of the

Federal IDR process strains the current

capacity of certified IDR entities to make

timely determinations. While the Departments’ assistance with eligibility determinations is currently helping to alleviate the

backlog of disputes, certified IDR entities’

operating expenses are not expected to

decrease as a result. If the Departments

are able to decrease their assistance with

eligibility determinations, the costs of

pre-eligibility reviews would decrease,

which would be reflected in the estimated

expenditures used to determine future

administrative fee amounts.

In addition, some commenters disagreed with including the costs of inves-

tigating complaints of non-compliance in

the administrative fee methodology. Commenters asked for clarity in the “investigating relevant complaints” expense

and asserted that “relevant” complaints

beyond the Federal IDR process would be

inappropriate to include in the calculation

of the administrative fee amount. A few of

these commenters suggested that the party

found to be non-compliant should bear the

costs of the investigation and asked the

Departments to publicly report summary

data on these investigations and the costs

covered by non-compliant parties compared to those covered by administrative

fees. One commenter suggested that the

investigation of complaints related to violations of the No Surprises Act should be

funded by a congressional appropriation

as these are largely unrelated to the Federal IDR process.

The Departments clarify that the complaints costs included in the estimated

expenditures in the administrative fee

methodology only include costs associated with receiving and investigating Federal IDR process-related complaints. For

example, such costs include investigating

complaints within the Departments’ jurisdiction regarding the failure of a non-prevailing party to pay the payment determination amount to the prevailing party

within 30 days of the certified IDR entity’s

payment determination as required by the

No Surprises Act.103 Complaints costs do

not include costs for complaints that are

not related to the Federal IDR process,

such as those related to the QPA for patient

cost sharing. Therefore, the Departments

are of the view that those costs are appropriate to include in the administrative fee

methodology and are necessary to ensure

compliance with the Federal IDR process.104

Many commenters suggested that

the Departments consider other funding

sources besides the administrative fee to

fund expenditures. Several commenters

102

While there is an implementation appropriation, the initial appropriation of $500 million in the CAA is finite and only remains available until expended through 2024. Moreover, the Departments note that additional mandatory funding for the Federal IDR process has not been appropriated beyond the initial $500 million made available in the CAA. However, the Departments

cannot rely on budget requests or on appropriations enacted by Congress when calculating this fee. The statute requires the fee to be set at an amount such that the total amount of fees paid

is estimated to be equal to the amount of expenditures estimated to be made by the Departments in carrying out the Federal IDR process.

103

Section 9816(c)(6) of the Code, section 716(c)(6) of ERISA, and section 2799A-1(c)(6) of the PHS Act.

104

appropriate this funding themselves, although they have made numerous requests to Congress for additional funding, and therefore this is not a reliable source of Federal IDR process funding.

Bulletin No. 2024–5

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January 29, 2024

suggested that implementing penalties

could help fund expenditures, including

penalties for submitting ineligible disputes, failing to comply with disclosure

obligations, or delaying the Federal IDR

process. Some commenters suggested

the CAA’s $500 million appropriation to

implement the No Surprises Act should

cover at least a portion of the Departments’ estimated expenditures. One commenter asked for confirmation that the

implementation appropriation has been

exhausted fully and suggested requesting

additional funds from Congress in upcoming budget requests to support the funding

of the Departments’ ongoing implementation. Another commenter asserted that

the administrative fee methodology set

forth in the IDR Fees proposed rules did

not take into account any appropriations

funding.

As required by the No Surprises

Act,105 both parties to a dispute must pay

an administrative fee for participating in

the Federal IDR process. By statute, the

administrative fee amount must be calculated such that the total amount of fees

paid for a year is estimated to be equal to

the amount of expenditures estimated to

be made by the Departments for such year

in carrying out the Federal IDR process.

While the CAA appropriated $500 million to remain available until expended

through 2024 for preparing regulations,

guidance, and reports, collecting data,

conducting audits and enforcement activities,106 and establishing and initially

implementing the No Surprises Act and

Title II Transparency provisions through

calendar year 2024, this finite appropriation is not solely for the Federal IDR process. Additionally, while the Fiscal Year

2024 President’s budget included another

$500 million appropriation request for the

continued implementation of the No Surprises Act and Title II Transparency provisions, the administrative fee amount finalized in these rules must still be consistent

with the statutory requirement to set the

administrative fee amount such that the

total amount of administrative fees paid

is estimated to be equal to the amount of

expenditures estimated to be made by the

Departments in carrying out the Federal

IDR process. As a result, when calculating this fee, the Departments cannot rely

on budget requests or on appropriations

enacted by Congress.

In addition, commenters urged the

Departments to consider strategies to

decrease utilization of the Federal IDR

process, decrease administrative burden,

increase the efficiency of the Federal

IDR process, and ultimately reduce the

cost of administering the Federal IDR

process. Examples of commenters’ suggestions include enforcing disclosure

requirements, requiring plans and issuers

to include remittance advance remark

codes (RARCs) at the time of initial claim

determination, easing batching requirements, disincentivizing bad faith conduct,

making improvements to the Federal IDR

portal, and implementing a required initial payment amount for out-of-network

emergency services. Several commenters suggested that the volume of ineligible disputes and the cost of conducting

eligibility reviews would be reduced or

eliminated if the Departments enforced

disclosure requirements or required plans

and issuers to provide adequate information for providers to determine whether a

claim is eligible for the Federal IDR process. One commenter suggested that plans

and issuers should cover the cost of eligibility reviews when they fail to inform the

provider of eligibility for the Federal IDR

process. Another commenter suggested

that the cost of eligibility reviews should

be assessed to the party that challenges

eligibility as this cost would be avoidable

if the plan or issuer provided sufficient

information. One commenter suggested

that the Departments could reduce the

administrative burden of the Federal IDR

process by contracting with an established

claims processing clearinghouse that currently possesses the capabilities to perform real-time eligibility determinations

to create an in-portal eligibility validation

process.

The Departments continue to consider

improvements to the Federal IDR process

and recently published the IDR Operations

proposed rules,107 which include policies

aimed at reducing the volume of ineligible

disputes, establishing additional disclosure

requirements (such as requiring plans and

issuers to use approved claim adjustment

reason codes (CARCs) and RARCs), incentivizing good faith conduct with respect to

open negotiation and exchange of information, and otherwise improving the Federal

IDR process. Overall, these policies would,

if finalized, support efficiency in Federal

IDR process operations and reduce the cost

of administering the Federal IDR process

in the future.

Recognizing that the cost of certifying

IDR entities is included in the administrative fee methodology, one commenter

sought clarity on how the methodology

considers efficiencies gained from certifying more IDR entities to make payment

determinations and therefore reduce the

backlog.

The Departments note that the benefits of certifying new IDR entities will

be achieved over time, as new certified

IDR entities acclimate to the process and

increase the speed at which they move

disputes through the Federal IDR process.

As efficiencies in the Federal IDR process

are adopted over time, the expenditures

required to carry out the Federal IDR process could decrease, exerting downwards

pressure on the administrative fee amount.

If any of these situations results in changes

to the data used to calculate the administrative fee amount, the Departments

intend to take these changes into consideration when establishing the administrative

fee amount in the future.

Section 9816(c)(8)(A) of the Code, section 716(c)(8)(A) of ERISA, and section 2799A-1(c)(8)(A) of the PHS Act.

As previously explained in the preamble to these final rules, the Departments may conduct random or risk-based QPA audits. The Departments consider it appropriate to include some of the

costs of conducting risk-based QPA audits resulting from complaints filed by providers, facilities, or providers of air ambulance services alleging that the QPA was inaccurate as expenditures

made in carrying out the Federal IDR process, and therefore include the costs of conducting these audits in estimating the expenditures made by the Departments in carrying out the Federal

IDR process. Other audit costs, such as the QPA audits conducted in connection with Department of Labor, OPM, or Department of Treasury investigations; audits conducted randomly; or

audits conducted in response to complaints from consumers regarding QPAs may be funded using other appropriations, as applicable.

107

88 FR 75744.

105

106

January 29, 2024

588

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d. Administrative Fee Methodology –

Other Comments

The Departments sought comments

on whether, when calculating the administrative fee amount in future years, they

should apply an inflationary adjustment,

such as the consumer price index for all

urban consumers (CPI–U), to the amount

of estimated expenditures to be made by

the Departments in carrying out the Federal IDR process. A few commenters supported using an inflationary adjustment,

such as the CPI-U, to adjust the administrative fee amount in future years. Other

commenters opposed this approach, stating that it would not necessarily correlate

with the Departments’ expenditures to

operate the Federal IDR process and may

not align with the established methodology of dividing the Departments’ estimated expenditures by the estimated total

number of administrative fees to be paid.

Another commenter stated that this proposal would be unnecessary if the Departments finalize the proposal to establish the

administrative fee amount more or less

frequently than annually. Finally, another

commenter asked the Departments to

revisit this proposal when data are more

predictable after implementing planned

improvements to the Federal IDR process.

Upon consideration of the comments,

the Departments are not finalizing the use

of an inflationary adjustment, such as the

CPI-U, to adjust the administrative fee

amount in future years. The Departments

agree with commenters that the CPI-U

may not correlate with projected increases

in the Departments’ estimated expenditures to carry out the Federal IDR process

and therefore using it could be inconsistent with the statute.

Several commenters urged the Departments to improve the Federal IDR process before increasing the administrative

fee amount by decreasing the backlog,

enforcing timely payment, and holding

all parties accountable to the regulatory

requirements. Some commenters recommended maintaining the current administrative fee amount until there is stability in

the Federal IDR process and more data are

108

109

available to accurately forecast long-term

costs. A few commenters suggested that

the Departments modify the administrative fee amount in future years to make up

for any shortfall or surplus created by the

finalized administrative fee amount.

As previously mentioned, the Departments continue to consider improvements to the Federal IDR process; however, implementing these improvements

would increase the costs of carrying out

the Federal IDR process in the short term

and would take time to operationalize. As

previously mentioned, the Departments

proposed policies in the IDR Operations

proposed rules aimed to improve the

overall efficiency and operations of the

Federal IDR process.108 The Departments

were unable to propose those policies in

the IDR Fees proposed rules because they

are much more comprehensive than the

fee-related policies proposed in the IDR

Fees proposed rules and would require

more time to develop and implement, if

finalized. There is an urgency to publish

these final rules due to the need to sufficiently fund the Federal IDR process in

2024, because, as explained above, the

current $50 administrative fee amount is

insufficient to provide total administrative

fees that are estimated to be equal to the

expenditures estimated to be made by the

Departments in carrying out the Federal

IDR process, as required by the No Surprises Act.109

e. Administrative Fee Amount and Impact

Many commenters opposed the proposed $150 per party per dispute administrative fee amount and stated that it would

make the Federal IDR process cost-prohibitive to pursue for many providers,

especially small providers, rural providers, independent practices, and certain

medical specialties, such as psychiatry,

emergency medicine, radiology, and anesthesiology. Some commenters requested

that the Departments analyze how the proposed administrative fee amount would be

cost-prohibitive for providers and would

deter and limit dispute resolution for small

providers. A few commenters asserted

that the administrative fee amount would

unfairly favor plans and issuers over providers in the Federal IDR process. One

commenter recommended against using a

methodology to calculate the administrative fee amount that did not consider the

increased financial burdens on providers

compared to plans and issuers. Another

commenter stated that the proposed

administrative fee amount prioritizes the

interest of certified IDR entities and the

Departments in covering their costs at the

expense of parties’ access to the Federal

IDR process.

Similarly, some commenters stressed

that it is important to keep the administrative fee amount low to prevent the administrative fee from serving as a de facto

barrier to the Federal IDR process. These

commenters asserted that such a de facto

barrier would not align with congressional intent, as Congress decided against

adding a dollar-value threshold to the No

Surprises Act despite considering this

while developing the legislation. Several

commenters raised concerns that reducing

access to the Federal IDR process would

reduce providers’ reimbursements for outof-network services, as it would not be

cost-effective to dispute certain payment

amounts in the Federal IDR process. Some

commenters asserted that a cost-prohibitive administrative fee amount would

reduce incentives for plans and issuers to

negotiate fair in-network contracts or, in

some cases, renew contracts, forcing providers out of networks.

A few commenters suggested that

patients would also be impacted by the

increased administrative fee amount,

either through plans and issuers narrowing

provider networks or increasing premiums

and cost-sharing amounts, or providers

passing on costs to patients or going out

of business. However, several commenters noted that the proposed fee amount

was an improvement from the previous

$350 amount.

For reasons described throughout this

preamble, the Departments are finalizing

the administrative fee amount for disputes

initiated on or after the effective date of

these rules as $115 per party per dispute.

88 FR 75744.

Section 9816(c)(8)(B) of the Code, section 716(c)(8)(B) of ERISA, and section 2799A-1(c)(8)(B) of the PHS Act.

Bulletin No. 2024–5

589

January 29, 2024

This change in the administrative fee

amount between the proposed and final

rules reflects modifications to the estimated expenditures and to the administrative fee methodology described elsewhere

in this preamble.

While the Departments are statutorily required to set the administrative

fee amount such that the total amount of

administrative fees paid is estimated to be

equal to the amount of expenditures estimated to be made by the Departments in

carrying out the Federal IDR process, the

Departments acknowledge the concerns

of commenters related to accessibility and

affordability of the Federal IDR process

and the impact of the proposed administrative fee amount on the parties and patients.

In the Departments’ effort to balance their

statutory obligations with the priority of

ensuring equitable access for parties to

engage in the Federal IDR process, the

Departments proposed in the IDR Operations proposed rules to reduce the administrative fee amount in certain circumstances.

In the IDR Operations proposed rules,

the Departments proposed to reduce the

administrative fee amount to $75 (50 percent of the full administrative fee amount

proposed in those proposed rules) for both

parties when the highest offer by either

party in open negotiation was less than

the full administrative fee amount ($150

as proposed in those proposed rules)110

and to $30 (20 percent of the full administrative fee amount proposed in those

proposed rules) for non-initiating parties

in ineligible disputes.111 The Departments

also proposed in the IDR Operations proposed rules to revise the requirements for

batching qualified IDR items and services

together into a single Federal IDR process

dispute.112 The Departments anticipate that

these proposals would make the Federal

IDR process more accessible for all parties, but especially the parties for whom

commenters expressed concerns, such as

small and rural providers and certain medical specialties.

The administrative fee amount being

finalized in these final rules is applied

equally to both parties to a dispute. The

Departments are of the view that it would

be inequitable to charge a smaller party a

lower administrative fee, because a dispute initiated by a smaller party costs the

Departments the same amount to process

as a dispute initiated by a larger party.

Furthermore, the value of a dispute, rather

than the size of the party, determines

whether it will be cost-effective for the

party to pursue the dispute. For example,

a smaller party could initiate a high dollar

value dispute, while a larger party could

initiate a small dollar value dispute. The

Departments proposed in the IDR Operations proposed rules to charge both parties a reduced administrative fee when the

highest offer made during open negotiation is less than the full administrative fee

amount,113 which is intended to improve

the accessibility of the Federal IDR process for parties to low-dollar disputes. The

Departments anticipate that such parties

may be smaller providers and facilities or

independent practices. However, larger

parties to low-dollar disputes would not

be precluded from paying the reduced

administrative fee as long as the dispute

meets the aforementioned requirement.

The Departments considered the

impact of the proposed $150 administrative fee amount on the parties compared to

the current $50 administrative fee amount

and the previous $350 administrative fee

amount. While the Departments understand that it may be economically infeasible to initiate some claims in the Federal

IDR process due to the administrative

and certified IDR entity fees associated

with accessing the process, as discussed

previously, the Departments are statutorily obligated to charge an administrative

fee amount such that the administrative

fees paid are estimated to be equal to the

amount of expenditures estimated to be

made by the Departments in carrying out

the Federal IDR process.114 The method-

ology used by the Departments is derived

from this statutory language.

Congress did not include a dollar-value

threshold for Federal IDR process disputes in the No Surprises Act. Rather,

Congress opted to include a requirement

in the No Surprises Act for each party to

a dispute for which a certified IDR entity

is selected to pay to the Departments, at

such time and in such manner as specified

by the Departments, a fee for participating in the Federal IDR process.115 Therefore, regardless of the administrative fee

amount, disputing parties must always

evaluate whether it would be economically efficient to initiate a dispute in the

Federal IDR process. Congress also provided in the No Surprises Act that the

administrative fee amount is established

by the Departments in a manner such that

the total amount of fees paid for such year

is estimated to be equal to the amount of

expenditures estimated to be made by the

Departments for such year in carrying out

the Federal IDR process.116

In regard to comments stating that the

administrative fee could result in narrowing networks, many factors may impact

whether a provider, facility, or provider of

air ambulance services and a plan or issuer

will enter a network agreement with one

another, including the market power of

each party, Federal and State network adequacy laws, and other factors. The Departments acknowledge that the amount paid

for out-of-network services is one of the

factors that impacts market participants’

decisions whether to enter network agreements. The No Surprises Act represents

a substantial change to the way the parties come to agreement on payment for

out-of-network services by prohibiting,

in many circumstances, the practice of

sending surprise medical bills to patients

and establishing a Federal IDR process

for determining the appropriate out-ofnetwork rate. Many providers report that

initial payments made by plans and issuers for out-of-network services are now

88 FR 75799.

88 FR 75800.

88 FR 75783 through 75791.

113

88 FR 75799.

114

Section 9816(c)(8)(B) of the Code, section 716(c)(8)(B) of ERISA, and section 2799A-1(c)(8)(B) of the PHS Act.

115

Section 9816(c)(8)(A) of the Code, section 716(c)(8)(A) of ERISA, and section 2799A-1(c)(8)(A) of the PHS Act.

116

Section 9816(c)(8)(B) of the Code, section 716(c)(8)(B) of ERISA, and section 2799A-1(c)(8)(B) of the PHS Act.

110

111

112

January 29, 2024

590

Bulletin No. 2024–5

substantially lower than such payments

were before enactment of the No Surprises Act. Some providers report that

plans’ and issuers’ abilities to make lower

payments for out-of-network services has

impacted their willingness to offer acceptable in-network payment rates in network

agreement negotiations. To the extent that

the Federal IDR process and the prohibition on surprise medical billing change

this equilibrium among parties, they could

impact the number of providers and plans

and issuers that are able to agree on terms

for entering a network agreement and consequently network breadth.

In the IDR Operations proposed rules,

the Departments are proposing a number of steps to accelerate throughput in

the Federal IDR process,117 which would

make it easier for the parties to use the

process to determine the appropriate payment amount for out-of-network services.

That said, the appropriate payment rate for

out-of-network services is only one factor among many that influences network

breadth. It is also important for the parties

to meaningfully engage in open negotiation to determine an appropriate out-ofnetwork payment rate, since agreeing to

rates in open negotiation allow the parties

to avoid the costs of using the Federal IDR

process. Even as the Federal IDR process

becomes faster and more parties avail

themselves of the opportunity to agree to

out-of-network payment rates during the

open negotiation period, the price paid for

out-of-network services will remain one

among many factors in a dynamic market.

Furthermore, the Departments anticipate

that a Federal IDR process with consistent payment determination outcomes will

lead to fewer dispute initiations, because

parties will have a better understanding

of what a determination will likely be and

more disputes would likely be settled in

open negotiation or even earlier, resulting

in the parties avoiding the costs associated

with the Federal IDR process.

The Departments also do not anticipate

that the policies finalized in these rules

would cause plans and issuers to increase

premiums, as further discussed in section IV.G of this preamble, or patient cost

sharing, because administrative fees paid

would likely represent a very small percentage of the costs considered by plans

and issuers in calculating annual premiums or cost sharing.

Many commenters emphasized the

importance of considering the proposed

administrative fee amount alongside

batching requirements to determine

whether the administrative fee amount

would be cost-prohibitive. Some commenters suggested that batching policies

could mitigate the financial challenges

providers and facilities face, especially

when pursuing low-dollar claims. A few

commenters suggested it was premature

to update the administrative fee amount or

provide feedback on a proposed amount

until batching guidance is updated. One

commenter viewed an administrative fee

of $150 per party as reasonable so long as

a claim is defined as an episode of care or

a single medical encounter in the batching

policy.

The Departments are continuing to

assess batching flexibilities and the impact

of batching on various parts of the Federal

IDR process. To further improve batching

requirements, the Departments proposed

provisions in the IDR Operations proposed rules118 that would allow for more

clarity, certainty, and flexibility in batching multiple items or services in a single

dispute.119 These batching proposals are

designed so that the expenses of engaging in the Federal IDR process, including

the administrative fee, do not unreasonably impede parties’ access to the Federal

IDR process. As previously mentioned,

the IDR Operations proposed rules120 also

proposed a reduced administrative fee

for low-dollar disputes, identified as disputes for which the highest offer by either

party in open negotiation was less than

the administrative fee amount, which, if

finalized, would mitigate financial burden

on providers and facilities when pursuing payment on low-dollar claims. The

Departments encourage interested parties

to submit comments on the IDR Operations proposed rules prior to the comment

deadline.121

While the Departments continue to

consider improvements to the Federal

IDR process, including policies surrounding batching and low-dollar claims, the

No Surprises Act requires that the administrative fee be estimated to cover the

expenditures estimated to be made by the

Departments in carrying out the Federal

IDR process in the year, and the Departments estimate that $115 per party per

dispute is the appropriate administrative

fee amount to meet this requirement for

disputes initiated on or after the effective

date of these rules.

B. Certified IDR Entity Fee Ranges

Under current regulations at 26 CFR

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

(vii), the certified IDR entity fees for single and batched determinations are set by

the certified IDR entities within the upper

and lower limits of ranges for each as set

forth in guidance issued annually by the

Departments.

In the IDR Fees proposed rules, the

Departments proposed to amend the provisions of the regulations establishing the

ranges for certified IDR entity fees for single and batched disputes to establish the

ranges in notice and comment rulemaking, rather than in guidance, at 26 CFR

88 FR 75744.

119

On November 28, 2023, the Departments released FAQs pertaining to batching that will be effective until the IDR Operations proposed rules are finalized and take effect. These FAQs

discuss how, in light of the TMA IV and TMA III opinions and orders, the batching requirements of the No Surprises Act apply to qualified IDR items and services for disputes eligible for

initiation of the Federal IDR process on or after August 3, 2023, until the Departments engage in future notice and comment rulemaking. See U.S. Department of Health and Human Services,

U.S. Department of Labor, U.S. Department of Treasury, Office of Personnel Management (November 28, 2023), FAQs about Consolidated Appropriations Act, 2021 Implementation Part

63, available at https://www.cms.gov/files/document/faqs-part-63.pdf.

120

Id.

121

As discussed earlier in this preamble section, the Departments were unable to propose these operational policies in the IDR Fees proposed rules because they are more comprehensive than

the fee-related policies proposed in the IDR Fees proposed rules and require more time to develop and implement if finalized. There is an urgency to publish these final rules due to the need

to sufficiently fund the Federal IDR process in 2024.

117

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January 29, 2024

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

(vii). Further, the IDR Fees proposed rules

provided that, consistent with current

rules, certified IDR entities must annually

provide a fixed fee for single determinations and separate fixed fees for batched

determinations within the upper and lower

limits for each as set in notice and comment rulemaking. Additionally, the IDR

Fees proposed rules provided that the certified IDR entity fee ranges established

by the Departments in rulemaking would

remain in effect until new certified IDR

entity fee ranges are established by subsequent notice and comment rulemaking,122

allowing the Departments to update the

certified IDR entity fee ranges more or

less frequently than annually. Finally, the

Departments proposed that the certified

IDR entity or IDR entity seeking certification may seek advance written approval

from the Departments to update its fees

more often than once annually.

The Departments proposed that for

disputes initiated on or after the later of

the effective date of these rules or January 1, 2024, certified IDR entities would

be permitted to charge a fixed certified

IDR entity fee for single determinations

within the range of $200 to $840, unless

a fee not within that range is approved by

the Departments pursuant to paragraphs

26 CFR 54.9816-8(e)(2)(vii)(A) and (B),

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

(B), and 45 CFR 149.510(e)(2)(vii)(A)

and (B). The Departments also proposed

that for disputes initiated on or after the

later of the effective date of these rules

or January 1, 2024, certified IDR entities

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

$1,173, unless a fee outside this range is

approved by the Departments pursuant to

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

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

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

(2)(vii)(A) and (B). The Departments

proposed to continue to use a tiered fee

structure based on the number of line

items within the batch.123 Under the

IDR Fees proposed rules, certified IDR

entities would be permitted to charge a

fixed tiered fee within the range of $75

to $250 for every additional 25 line items

within a batched dispute beginning with

the 26th line item.124 The IDR Fees proposed rules explained the Departments’

considerations for proposing the certified

IDR entity fee ranges, which included the

anticipated time and resources needed for

certified IDR entities to make payment

determinations meeting the requirements

of the statute, rules, and guidance; the

anticipated time and resources needed

for data reporting; the anticipated time

and resources needed to comply with

audit requirements; the anticipated volume of Federal IDR initiations and payment determination quality assessments;

the anticipated volume of Federal IDR

initiations ineligible for the Federal IDR

process; and the level of complexity in

determining the eligibility of items and

services for the Federal IDR process.125

These fee ranges would apply until

another set of fee ranges is proposed and

finalized through subsequent notice and

comment rulemaking.

If a certified IDR entity wishes to

charge a fee outside either of these fee

ranges, it would continue to follow the

existing process for requesting written

approval from the Departments outlined

in 26 CFR 54.9816-8(e)(2)(vii)(A) and

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

(B), and 45 CFR 149.510(e)(2)(vii)(A)

and (B).

Since the publication of the IDR Fees

proposed rules, the Departments have

analyzed updated data and assumptions

as applied to the factors considered in the

IDR Fees proposed rules’ preamble to set

the fee ranges, and the Departments found

that the results of the analysis remain the

same. The Departments received comments on these proposals.

The Departments are finalizing as proposed the policy to establish the certified

IDR entity fee ranges through notice and

comment rulemaking, rather than guidance. The Departments are also finalizing the certified IDR entity fee ranges for

single and batched disputes as proposed.

Finally, the Departments are finalizing

the fixed tier fee structure for batched disputes, as well as the range for this structure, as proposed.

However, after considering the public comments, the Departments are not

finalizing the proposal which would have

allowed the Departments to set the certified IDR entity fee ranges more frequently

than annually but are instead finalizing the

proposal with modifications to reflect that

the certified IDR entity fee ranges may be

established by the Departments no more

frequently than annually through notice

and comment rulemaking. Further, the

Departments are finalizing the proposal

that the certified IDR entity or IDR entity

seeking certification may seek advance

written approval from the Departments

to update its fees more often than once

annually, with modifications to reflect

that in addition to setting their initial fee

for the calendar year, certified IDR entities may only request approval from the

Departments to update their fees one

additional time per year, and with additional non-substantive modifications for

readability. Finalizing this policy would

result in a process where the certified

IDR entity or IDR entity seeking certification sets their fixed fees for single and

batched determinations for the year, and

then is allowed one opportunity at any

point during the calendar year to update

their fixed fees, provided that their request

is approved by the Departments.

Many commenters supported the proposal to establish the certified IDR entity

fee ranges through notice and comment

rulemaking. Several commenters noted

that establishing the certified IDR entity

fee ranges through notice and comment

88 FR 65888.

A tiered fee structure was first proposed in the Calendar Year 2023 Fee Guidance for the Federal Independent Dispute Resolution Process under the No Surprises Act and implemented

for all disputes initiated as of January 1, 2023. See Centers for Medicare & Medicaid Services (October 31, 2022). Calendar Year 2023 Fee Guidance for the Federal Independent Dispute

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

124

88 FR 65888.

125

88 FR 65888 at 65895 through 65896.

122

123

January 29, 2024

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rulemaking would increase transparency

and allow interested parties to provide

feedback that would help the Departments

appropriately adjust the fee ranges. Many

commenters expressed opposition to the

Departments’ proposal to establish the

certified IDR entity fee ranges more or

less frequently than annually. The majority of these commenters encouraged the

Departments to update the certified IDR

entity fee ranges only once annually

to create a more predictable and stable

Federal IDR process. Several commenters expressed concern that changing the

certified IDR entity fee ranges more frequently than once annually would prevent

providers from effectively budgeting for

participation in the Federal IDR process,

which would create a barrier to access.

A few commenters noted that unpredictable changes to the certified IDR entity

fee ranges could impact plans’ and issuers’ abilities to budget for the Federal IDR

process and could lead plans and issuers

to budget more conservatively and pass on

the cost increase to consumers.

A few commenters generally supported the flexibility to update the certified IDR entity fee ranges more or less

frequently than annually. However, one

commenter supported the proposed flexibility only if the Departments adjusted the

fee ranges less frequently than annually,

while another commenter supported the

proposed flexibility if the Departments

provided adequate notice, such as 90

days, before implementing the changed

fee ranges. Further, several commenters

opposed the proposal to allow certified

IDR entities or IDR entities seeking certification to seek advance written approval

from the Departments to set their certified

IDR entity fees more often than annually.

Similar to the proposal to establish the

certified IDR entity fees through notice

and comment rulemaking more or less

frequently than annually, some commenters expressed concerns that the proposed

policy would cause unpredictability for

the parties, which would impact their

ability to effectively budget for the Federal IDR process. One commenter misinterpreted the proposed policy as proposing to require certified IDR entities to

adjust their fees whenever operational or

technological efficiencies could justify a

decrease in cost, and expressed concern

Bulletin No. 2024–5

that the proposed policy may discourage

certified IDR entities from participating in

the Federal IDR process. One commenter

opposed multiple fee adjustments within

a given year but supported allowing certified IDR entities a limit of one additional

fee adjustment per year following a compelling request and formal approval.

The Departments agree with commenters that the proposal to establish the certified IDR entity fee ranges through notice

and comment rulemaking will improve

transparency and provide opportunity for

greater engagement by interested parties

in the establishment of the ranges. The

Departments recognize commenters’ concerns that the proposed flexibility to set

the certified IDR entity fee ranges through

notice and comment rulemaking more

or less frequently than annually would

enable multiple changes to the certified

IDR entity fee ranges over the course of

a year. In general, the Departments recognize that frequent changes to the established certified IDR entity fee ranges

could increase unpredictability in the Federal IDR process and potentially burden

parties, but note that they did not propose

this policy with the intention of pursuing

such frequent changes. The Departments

contemplated establishing this proposed

flexibility so that the certified IDR entity

fee ranges could remain effective for multiple years. Further, updating the certified

IDR entity fee ranges does not guarantee

that certified IDR entities will set new

fixed fee amounts. Each certified IDR

entity determines their fee amounts independently, and there is no requirement to

make a corresponding adjustment each

time the certified IDR entity fee ranges

established by the Departments change,

provided the certified IDR entity’s fee

stays within the new range.

While it would be unlikely that the

Departments would pursue multiple

notice and comment rulemakings in a single year to adjust the certified IDR entity

fee ranges, the Departments acknowledge

the potential for the proposed policy to

increase uncertainty within the Federal

IDR process. Therefore, to be responsive

to commenters’ concerns, the Departments are finalizing this proposal with

modifications to reflect that the certified

IDR entity fee ranges may be established

no more frequently than once per calendar

593

year. This allows the certified IDR entity

fee ranges to remain effective over multiple years until they are updated in subsequent notice and comment rulemaking,

while addressing commenters’ concerns

by preventing multiple adjustments of the

certified IDR entity fee ranges in a single

year.

The Departments acknowledge that

frequent increases to certified IDR entity

fees could lead to unpredictability and

complicate the ability of the parties to

effectively budget for the Federal IDR

process. The Departments are of the view

that the proposed mechanism for certified IDR entities to request to set their

fees more than once annually includes

sufficient guardrails to ensure that any

changes to the certified IDR entities’ fees

would not prevent parties from accessing

the Federal IDR process. Specifically, the

Departments proposed to require certified IDR entities to submit the following

information to the Departments in their

requests: (1) the fixed fee that the certified IDR entity is seeking to charge; (2)

a description that reasonably explains the

circumstances that require a change to

its fee; and (3) a detailed description that

reasonably explains how the change to its

fee will be used to mitigate the effects of

these circumstances. The Departments

would use their discretion to determine if

the explanations included in the request

demonstrate that the change would ensure

the certified IDR entity’s financial viability and would not impose on parties

an undue barrier to accessing the Federal

IDR process.

The Departments seek to strike a balance between predictable fees for parties

participating in the Federal IDR process

and certified IDR entities’ need for flexibility to respond to circumstances that

require fee adjustments to maintain program operations. For example, the Departments acknowledge that certified IDR

entities consider various factors, including

operational costs, in setting fees for the

Federal IDR process. However, certified

IDR entities have needed to increase staff

resources, implement system updates,

and adjust operations to respond to unexpectedly frequent changes to guidance or

regulations governing the Federal IDR

process or the volume of disputes initiated

and closed under the Federal IDR process.

January 29, 2024

To ensure that certified IDR entities have

sufficient funding to respond to such circumstances, providing certified IDR entities with the ability to request an update

to their fees one additional time during a

calendar year is appropriate.

To address some of the concerns

expressed by commenters, the Departments are finalizing this proposal with

modifications to reflect that certified IDR

entities may only request approval from the

Departments to set their fee one additional

time for a calendar year. In other words, if

a certified IDR entity wishes to update its

fees an additional time after already setting

fees for the calendar year, the certified IDR

entity must seek approval from the Departments to do so. A certified IDR entity may

set its fees at most two times for a calendar

year, once at the initial setting of the fees,

and once after receiving approval from the

Departments to update the fees, regardless of whether the Departments have

established new certified IDR fee ranges

in notice and comment rulemaking. If the

Departments reject a certified IDR entity’s

request to update its fees during the calendar year, the certified IDR entity may continue to seek approval by submitting subsequent requests as long as these requests

comply with the requirements finalized in

this rule.

If a certified IDR entity requests to

update its fees after initially setting its fee

for the calendar year, and the request is

approved by the Departments, the change

to its fees will be made public before those

fees are effective, in a form and manner

specified by the Secretary, to allow the

parties time to consider the fee change in

their decision making. Updated fees will

apply to disputes initiated on or after the

effective date of the fee amount. The modified policy will provide an appropriate

amount of flexibility to certified IDR entities to make a fee adjustment to account

for efficiencies and fluctuations in the

conditions of the Federal IDR process in

future years, while also capping the number of fee adjustments in a given calendar

year and limiting cost volatility for parties

participating in the Federal IDR process.

The Departments solicited comment on

whether they should apply an inflationary

adjustment, such as the CPI-U, to the con126

siderations used to develop the certified

IDR entity fee ranges in future years. One

commenter supported the use of an inflationary adjustment and suggested updating the certified IDR entity fee ranges

annually based on inflation rather than

through notice and comment rulemaking. A few commenters opposed updating

the certified IDR entity fee ranges using

an inflationary adjustment such as the

CPI-U. Specifically, one commenter posited that since the CPI-U is updated on

a monthly basis, the Departments might

pursue monthly adjustments to the certified IDR entity fee ranges, which would

severely complicate the Federal IDR process. Another commenter expressed concern that applying an inflationary adjustment would only drive costs up over time,

prompting plans and issuers to pass any

additional costs on to consumers. One

commenter neither explicitly supported

nor opposed the general use of an inflationary adjustment to set the certified IDR

entity fee ranges but noted that setting the

certified IDR entity fee ranges through

notice and comment rulemaking could be

an opportunity to adjust based on inflation. This commenter cautioned that if the

Departments pursued the use of an inflationary adjustment, such an adjustment

should be the only consideration used to

update the certified IDR entity ranges.

The Departments appreciate the comments on the use of an inflationary adjustment to update the certified IDR entity fee

in future years. The Department share the

commenters’ desire to maintain predictable and accessible costs for participating

in the Federal IDR process and agree that

additional adjustments to the fee ranges

more frequently than annually would

complicate the Federal IDR process for

all parties. As stated earlier in this preamble, based on the comments received,

the Departments are finalizing the proposal to establish the certified IDR entity

fee ranges through notice and comment

rulemaking, which will allow for greater

transparency and feedback related to the

establishment of the ranges. Further, the

Departments are of the view that the considerations being finalized in this rulemaking are necessary to develop reasonable

certified IDR entity fee ranges, and that

the addition of inflationary adjustment to

the considerations, or the exclusive use of

an inflationary adjustment to develop the

ranges, is not practical or necessary at this

time. The Departments will continue to

carefully consider whether such a policy

may be appropriate in future rulemaking.

Several commenters expressed concerns

with the proposed certified IDR entity fee

ranges’ increased upper limits. Some of

these commenters stated that the proposed

certified IDR entity fee ranges may be

cost-prohibitive and limit access to the Federal IDR process, particularly for small providers. A few of the commenters opposed to

the proposed increase in the upper limits of

the certified IDR entity fee ranges asserted

that any increase in the certified IDR entity

fee ranges would limit participation in the

Federal IDR process. Specifically, one of

these commenters asserted that the proposed

ranges would result in costs passed on to

patients in the form of increased premiums

and cost-sharing amounts.

Some commenters, however, supported the proposed certified IDR entity

fee ranges. Some of these commenters

asserted that the increase to the upper limit

of the certified IDR fee ranges is reasonable and will encourage greater plan and

issuer participation prior to the Federal

IDR process, such as during open negotiation, and will reduce the time needed for

certified IDR entities to render payment

determinations.

The Departments maintain the view

that the proposed certified IDR entity fee

ranges will keep costs reasonable such

that participating in the Federal IDR process will not be cost-prohibitive, including for smaller providers, while also

ensuring that certified IDR entities are

able to cover their operating costs and

continue participating in the Federal IDR

process. The Departments acknowledge

that broadening the certified IDR entity

fee ranges could have an impact on the

cost to parties to engage in the Federal

IDR process. However, the current range

of fees charged by certified IDR entities

reflects that, since the opening of the Federal IDR process, certified IDR entities do

not all charge the same fees, nor do they

all charge the maximum fee amount in

the ranges set by the Departments.126 To

See https://www.cms.gov/nosurprises/help-resolve-payment-disputes/certified-idre-list.

January 29, 2024

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remain competitive, the certified IDR entities have an incentive to charge fees on

the lower end of the established range. As

a result, the Departments do not believe

that an increase to the upper limits of the

certified IDR entity fee ranges will result

in drastic increases to the fees charged by

certified IDR entities. Further, the Departments have not seen any data suggesting

that the proposed increases to the certified IDR entity fee ranges will result in

a substantial enough increase in costs to

plans and issuers that they will impact

patients in the form of increased premiums and cost-sharing amounts. However,

the Departments will continue to monitor

this dynamic.

The Departments agree with commenters asserting that the increases to the certified IDR entity fee ranges will encourage greater plan and issuer participation

prior to the Federal IDR process, such as

during open negotiation. The Departments

believe that the increases to the certified

IDR entity fee ranges will encourage parties to actively participate in open negotiation to preclude the need for the Federal

IDR process, thereby eliminating the need

for parties to pay the certified IDR entity

fee.

The Departments emphasize that while

they establish ranges for the certified IDR

entity fees, certified IDR entities choose

the fixed fees they charge for single and

batched determinations based on a number of factors. As noted earlier in this

preamble, certified IDR entities have

needed to make numerous adjustments

in response to high volumes of disputes,

complex determinations, and litigation

resulting in changes to guidance and regulations governing the Federal IDR process. The proposed ranges for the single

and batched determination fees, including

the proposed range for the tiered fee for

batched determinations, allow for appropriate compensation corresponding to

the complexity and effort associated with

making eligibility and payment determinations. The Departments remain of the

view that the proposed ranges would keep

costs for participating in the Federal IDR

process reasonable and reduce the poten-

tial for increased costs to be passed on to

patients.

Several commenters opposed the proposed tiered fee structure for batched

determinations. Commenters were concerned that the proposed tiered fee structure would be cost-prohibitive, particularly due to the absence of a limitation

on the number of line items considered in

the price tiers (that is, no line item cap to

the application of the tiered fee, as currently exists). Further, some commenters

asserted that the proposed tiered fee structure and range would disincentivize the

submission of batched disputes.

A few commenters supported an

increased fee for larger batched determinations but recommended that the tiering structure reflect intervals of 50 line

items rather than 25. Further, one commenter supported a fixed-dollar tiered

fee, as opposed to a range, suggesting that

a fixed-dollar fee would provide more

consistency across the fees charged by

different certified IDR entities and avoid

potential issues such as certified IDR entities being overwhelmed with disputes and

resulting delays in the Federal IDR process.

The proposed tiered fee structure and

range reflect the Departments’ intent to

keep the costs of participating in the Federal IDR process affordable while ensuring

that certified IDR entities are compensated

for their work in rendering payment determinations on complex batched disputes.

Certified IDR entities have indicated to

the Departments that making determinations on large batches of dissimilar items

and services is particularly complex and

burdensome and that they generally do

not realize economies of scale as the number of batched line items increases. The

Departments considered the impact of the

TMA IV opinion and order as discussed in

section I.C of this preamble on the anticipated complexity and volume of batched

disputes while determining the certified

IDR entity fee ranges. The Departments

acknowledge the efficiencies gained by

batching and believe that the proposed

tiered fee structure would maintain those

efficiencies while allowing certified IDR

entities to charge a reasonable fee for the

level of work involved in batched determinations.

Several commenters stated that the proposed tiered fee structure might increase

the costs to disputing parties submitting

batched disputes with many line items

because there is no cap to the number of

line items within a batched dispute after

which the tiered fee would no longer

apply.

A tiered fee selected by each certified

IDR entity from a dollar range established

by the Departments allows for greater

flexibility, as opposed to applying a standard fixed dollar amount or applying a

percentage of the certified IDR entity’s

batched determination fee as is currently

used.127 The tiered fee range reflects the

costs associated with increasing line items

in a batched dispute and provides certified

IDR entities the appropriate flexibility to

set fees commensurate with their costs.

Additionally, the Depar

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