Requirements Related to Surprise Billing; Part II

OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 890

RIN 3206-AO29

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

[TD 9955]

RIN 1545-BQ05

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Parts 2510 and 2590

RIN 1210-AC00

DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Parts 147 and 149

[CMS-9908-IFC]

RIN 0938-AU62

Requirements Related to Surprise Billing; Part II

AGENCY:

Office of Personnel Management; Internal Revenue Service, Department of the Treasury; Employee Benefits Security Administration, Department of Labor; Centers for Medicare & Medicaid Services, Department of Health and Human Services.

ACTION:

Interim final rules with request for comments.

SUMMARY:

This document sets forth interim final rules implementing certain provisions of the No Surprises Act, which was enacted as part of the Consolidated Appropriations Act, 2021. These interim final rules implement provisions of the No Surprises Act that provide for a Federal independent dispute resolution (IDR) (Federal IDR) process to permit group health plans and health insurance issuers offering group or individual health insurance coverage and nonparticipating providers, facilities, and providers of air ambulance services to determine the out-of-network rate for items and services that are emergency services, nonemergency services furnished by nonparticipating providers at participating facilities, and air ambulance services furnished by nonparticipating providers of air ambulance services, under certain circumstances. The Department of Health and Human Services (HHS), the Department of Labor (DOL), and the Department of the Treasury (collectively, the Departments) are issuing these interim final rules with largely parallel provisions that apply to group health plans and health insurance issuers offering group or individual health insurance coverage and certified IDR entities, providers, facilities, and providers of air ambulance services. In addition to the interim final rules issued jointly by the Departments, this document also includes interim final rules issued by the Office of Personnel Management (OPM) to clarify how certain No Surprises Act provisions apply to health benefits plans offered by carriers under the Federal Employees Health Benefits (FEHB) Act. In addition to the interim final rules issued jointly by the Departments and OPM, this document includes interim final rules issued by HHS that address good faith estimates of health care items and services for uninsured or self-pay individuals and the associated patient-provider dispute resolution process. The HHS-only interim final rules apply to selected dispute resolution (SDR) entities, providers, facilities, and providers of air ambulance services.

DATES:

Effective date:

These regulations are effective on October 7, 2021.

Applicability date:

Except as otherwise specified in this paragraph, the regulations issued jointly by the Departments of HHS, Labor, and the Treasury are generally applicable for plan or policy years beginning on or after January 1, 2022. The regulations regarding certification of IDR entities at 26 CFR 54.9816-8T(a) and (e), 29 CFR 2590.716-8(a) and (e), and 45 CFR 149.510(a) and (e) are applicable beginning on October 7, 2021. The OPM-only regulations that apply to health benefits plans are applicable to contract years beginning on or after January 1, 2022. The regulations issued by HHS alone that apply to health care providers, facilities, providers of air ambulance services, and SDR entities are applicable beginning on January 1, 2022, except that the regulations at 45 CFR 149.620(a) and (d) are applicable beginning on October 7, 2021.

Comment date:

To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on December 6, 2021.

ADDRESSES:

Written comments may be submitted to the addresses specified below. Any comment that is submitted will be shared among the Departments. Please do not submit duplicates.

Comments will be made available to the public. Warning: Do not include any personally identifiable information (such as name, address, or other contact information) or confidential business information that you do not want publicly disclosed. Comments are posted on the internet exactly as received and can be retrieved by most internet search engines. No deletions, modifications, or redactions will be made to the comments received, as they are public records. Comments may be submitted anonymously.

In commenting, refer to file code RIN 1210-AB00. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.

Comments, including mass comment submissions, must be submitted in one of the following two ways (please choose only one of the ways listed):

1.

Electronically.

You may submit electronic comments on this regulation to

https://www.regulations.gov.

Follow the “Submit a comment” instructions.

2.

By mail.

You may mail written comments to the following address ONLY: Office of Health Plan Standards and Compliance Assistance, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue NW, Room N-5653, Washington, DC 20210, Attention: RIN 1210-AB00.

You may mail written comments regarding the HHS-only regulations to the following address: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention CMS-9908-IFC, P.O. Box 8010, Baltimore, MD 21244-8010. Attention: RIN 0938-AU62.

Please allow sufficient time for mailed comments to be received before the close of the comment period.

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

SUPPLEMENTARY INFORMATION

section.

FOR FURTHER INFORMATION CONTACT:

Padma Babubhai Shah, Office of Personnel Management, at 202-606-4056; Kari DiCecco, Internal Revenue Service, Department of the Treasury, at 202-317-5500; Elizabeth Schumacher or David Sydlik, Employee Benefits Security Administration, Department of Labor, at 202-693-8335; Deborah Bryant, Centers for Medicare & Medicaid Services, Department of Health and Human Services, at 301-492-4293.

Customer Service Information:

Information from OPM on health benefits plans offered under the FEHB

Program can be found on the OPM website (

www.opm.gov/healthcare-insurance/healthcare/

).

Individuals interested in obtaining information from the DOL concerning employment-based health coverage laws may call the Employee Benefits Security Administration (EBSA) Toll-Free Hotline at 1-866-444-EBSA (3272) or visit the DOL's website (

www.dol.gov/agencies/ebsa

).

In addition, information from HHS on private health insurance coverage, coverage provided by non-Federal governmental group health plans, and requirements that apply to health care providers, health care facilities, and providers of air ambulance services can be found on the Centers for Medicare & Medicaid Services (CMS) website (

www.cms.gov/cciio

), and information on health care reform can be found at

www.HealthCare.gov.

SUPPLEMENTARY INFORMATION:

Inspection of Public Comments:

Comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post comments received before the close of the comment period on the following website as soon as possible after they have been received:

https://regulations.gov.

Follow the search instructions on that website to view public comments.

I. Background

A. Preventing Surprise Medical Bills Under the Consolidated Appropriations Act, 2021

On December 27, 2020, the Consolidated Appropriations Act, 2021 (CAA), which includes the No Surprises Act, was enacted.

1

The No Surprises Act provides Federal protections against surprise billing and limits out-of-network cost sharing under many of the circumstances in which surprise bills arise most frequently. Surprise billing occurs when an individual receives an unexpected medical bill from a health care provider or facility after receiving medical services from a provider or facility that, usually unknown to the participant, beneficiary, or enrollee, is a nonparticipating provider or facility with respect to the individual's coverage.

1

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

The No Surprises Act added new provisions applicable to group health plans and health insurance issuers offering group or individual health insurance coverage in Subchapter B of chapter 100 of the Internal Revenue Code (Code), Part 7 of the Employee Retirement Income Security Act (ERISA), and Part D of title XXVII of the Public Health Service Act (PHS Act). Section 102 of the No Surprises Act added Code section 9816, ERISA section 716, and PHS Act section 2799A-1,

2

which contain limitations on cost sharing and requirements regarding the timing of initial payments for emergency services furnished by nonparticipating providers and emergency facilities, and for nonemergency services furnished by nonparticipating providers at certain participating health care facilities. Section 103 of the No Surprises Act amended Code section 9816, ERISA section 716, and PHS Act section 2799A-1 to establish a Federal IDR process that allows plans and issuers and nonparticipating providers and facilities to resolve disputes regarding out-of-network rates. Section 105 of the No Surprises Act created Code section 9817, ERISA section 717, and PHS Act section 2799A-2, which contain limitations on cost sharing and requirements for the timing of initial payments for nonparticipating providers of air ambulance services and allow plans and issuers and providers of air ambulance services to access the Federal IDR process described in Code section 9816, ERISA section 716, and PHS Act section 2799A-1. The No Surprises Act provisions that apply to health care providers and facilities and providers of air ambulance services, such as prohibitions on balance billing for certain items and services and requirements related to disclosures about balance billing protections, were added to title XXVII of the PHS Act in a new part E.

2

As discussed later in this preamble, section 102(d)(1) of the No Surprises Act amended the Federal Employees Health Benefits Act, 5 U.S.C. 8901

et seq.,

by adding a new subsection (p) to 5 U.S.C. 8902. Under this new provision, each FEHB Program contract must require a carrier to comply with requirements described in section 9816 of the Code, section 716 of ERISA, and section 2799A-1 (as applicable) in the same manner as these provisions apply with respect to a group health plan or health insurance issuer offering group or individual health insurance coverage.

On July 13, 2021, the Departments of the Treasury, Labor, and Health and Human Services (Departments) and the Office of Personnel Management (OPM) published interim final rules with request for comments titled,

Requirements Related to Surprise Billing; Part I,

which generally apply to group health plans and health insurance issuers offering group or individual health insurance coverage (including grandfathered health plans) with respect to plan years (in the individual market, policy years) beginning on or after January 1, 2022; to carriers in the FEHB Program with respect to contract years beginning on or after January 1, 2022; and to health care providers and facilities, and providers of air ambulance services beginning on January 1, 2022 (July 2021 interim final rules).

3

The July 2021 interim final rules implement Code sections 9816(a)-(b) and 9817(a), ERISA sections 716(a)-(b) and 717(a), and PHS Act sections 2799A-1(a)-(b), 2799A-2(a), 2799A-7, 2799B-1, 2799B-2, 2799B-3, and 2799B-5 to protect consumers from surprise medical bills for emergency services, nonemergency services furnished by nonparticipating providers at participating facilities in certain circumstances, and air ambulance services furnished by nonparticipating providers of air ambulance services. Among other requirements, the July 2021 interim final rules require plans and issuers that provide or cover any benefits with respect to services in an emergency department of a hospital or with respect to emergency services in an independent freestanding emergency department to cover emergency services without any prior authorization; without regard to whether the health care provider furnishing the emergency services is a participating provider or the services are provided in a participating emergency facility; and without regard to any other term or condition of the plan or coverage other than the exclusion or coordination of benefits or a permitted affiliation or waiting period. With respect to emergency services furnished by nonparticipating providers or facilities, nonemergency services furnished by nonparticipating providers at certain participating facilities, and air ambulance services furnished by nonparticipating providers of air ambulance services, the July 2021 interim final rules generally limit cost sharing for out-of-network services to in-network levels, require such cost sharing to count toward any in-network deductibles and out-of-pocket maximums, and prohibit balance billing.

3

86 FR 36872 (July 13, 2021).

The July 2021 interim final rules also specify that consumer cost-sharing amounts for emergency services furnished by nonparticipating providers or facilities, and for nonemergency services furnished by nonparticipating providers at certain participating facilities, must be calculated based on one of the following amounts: (1) An amount determined by an applicable All-Payer Model Agreement under

Social Security Act section 1115A; (2) if there is no such applicable All-Payer Model Agreement, an amount determined by a specified state law; or (3) if there is no such applicable All-Payer Model Agreement or specified state law, the lesser of the billed charge or the plan's or issuer's median contracted rate, the latter referred to as the qualifying payment amount (QPA). Cost-sharing amounts for air ambulance services provided by nonparticipating providers of air ambulance services must meet the same standards as would apply if the services were provided by a participating provider of air ambulance services and must be calculated using the lesser of the billed charges or the QPA.

Under the July 2021 interim final rules, balance billing for services subject to the requirements in those interim final rules generally is prohibited.

4

In general, the protections in the July 2021 interim final rules that limit cost sharing and prohibit balance billing do not apply to certain post-stabilization services, or to certain nonemergency services performed by nonparticipating providers at participating health care facilities, if the provider makes certain disclosures to the participant, beneficiary, or enrollee, and obtains the individual's consent to waive balance billing protections. However, this exception to the prohibition on balance billing is narrow. In particular, it is not available in certain circumstances where surprise bills are likely to occur, such as for ancillary services provided by nonparticipating providers in connection with nonemergency care in a participating health care facility. The July 2021 interim final rules also include a number of other specific requirements regarding notice and consent that must be met in order for a provider or facility to be permitted to balance bill a participant, beneficiary, or enrollee for items and services that would otherwise be subject to the prohibition on balance billing.

4

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

The Departments are issuing regulations in several phases implementing provisions of title I (No Surprises Act) and title II (Transparency) of Division BB of the CAA. These interim final rules build upon the protections in the July 2021 interim final rules and implement the Federal IDR provisions under Code sections 9816(c) and 9817(b), ERISA sections 716(c) and 717(b), and PHS Act sections 2799A-1(c) and 2799A-2(b). OPM is also issuing regulations in phases to implement 5 U.S.C. 8902(p).

The Departments and OPM also published a notice of proposed rulemaking on September 16, 2021, titled

Requirements Related to Air Ambulance Services, Agent and Broker Disclosures, and Provider Enforcement.

5

The proposed rule would, if finalized, implement reporting requirements for air ambulance claims data; requirements on health insurance issuers offering individual health insurance coverage or short term, limited-duration insurance to disclose and report information regarding direct or indirect compensation provided to agents and brokers (section 202(c) of title II of Division BB of the CAA); as well as provisions related to HHS enforcement of requirements on issuers, non-Federal governmental group health plans, providers, facilities, and providers of air ambulance services. Later this year, the Departments intend to undertake rulemaking to implement reporting requirements related to pharmacy benefits and prescription drug costs (section 204 of title II of Division BB of the CAA).

5

86 FR 51730 (Sept. 16, 2021).

The provisions of the No Surprises Act that are applicable to group health plans and health insurance issuers offering group or individual health insurance coverage in the Code, ERISA, and the PHS Act apply to grandfathered health plans. Section 1251 of the Affordable Care Act provides that grandfathered health plans are not subject to certain provisions of the Code, ERISA, and the PHS Act, as added by the Affordable Care Act, for as long as they maintain their status as grandfathered health plans.

6

For example, grandfathered health plans are neither subject to the requirement to cover certain preventive services without cost sharing under PHS Act section 2713 nor to the annual limitation on cost sharing set forth under PHS Act section 2707(b). If a plan or coverage were to relinquish its grandfathered status, it would be required to comply with both provisions, in addition to several other requirements. However, the CAA does not include an exception for grandfathered health plans that is comparable to section 1251 of the Affordable Care Act. Furthermore, section 102(d)(2) of the No Surprises Act amended section 1251(a) of the Affordable Care Act to clarify that the new and recodified patient protections provisions of the No Surprises Act, including those related to choice of health care professional, apply to grandfathered health plans. Therefore, not only do the provisions of these interim final rules and the provisions of the July 2021 interim final rules that apply to group health plans and issuers of group or individual health insurance coverage apply to grandfathered plans, so do the other provisions applicable to group health plans and issuers of group or individual health insurance coverage in titles I and II of Division BB of the CAA.

6

For a list of the market reform provisions applicable to grandfathered health plans under title XXVII of the PHS Act that the Affordable Care Act added or amended and that were incorporated into ERISA and the Code, visit

https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/grandfathered-health-plans-provisions-summary-chart.pdf.

B. PHS Act Section 2719 and Scope of Claims Eligible for External Review

PHS Act section 2719, as added by the Affordable Care Act, applies to group health plans that are not grandfathered health plans and health insurance issuers offering non-grandfathered coverage in the group and individual markets, and sets forth standards for plans and issuers regarding both internal claims and appeals and external review. With respect to external review, PHS Act section 2719 provides for both state external review processes and a Federal external review process that applies in the absence of an applicable state process that meets the requirements of section 2719. Non-grandfathered group health plans that are not self-insured plans (as self-insured plans are not subject to state insurance regulations) and health insurance issuers offering non-grandfathered group or individual health insurance coverage must comply with an applicable state external review process if that process includes, at a minimum, the consumer protections set forth in the Uniform Health Carrier External Review Model Act issued by the National Association of Insurance Commissioners (the NAIC Uniform Model Act). If a state's external review process does not meet the minimum consumer protection standards set forth in the NAIC Uniform Model Act (or if a plan is self-insured and not subject to state insurance regulation), group health plans and health insurance issuers in the group and individual markets in that state are required to implement an effective external review process that meets minimum standards established by the Departments through rulemaking.

The Departments issued interim final regulations to implement PHS Act section 2719, including the provisions related to external review, in 2010.

7

An

amendment to the interim final rules was issued in 2011.

8

In 2015, the Departments issued final rules to finalize the interim final regulations.

9

Among other things, the 2015 final rules address the scope of claims eligible for external review.

10

State external review processes that meet the minimum standards must provide for the external review of adverse benefit determinations that are based on requirements for medical necessity, appropriateness, health care setting, level of care, or effectiveness of a covered benefit. The Federal external review process must be available for any adverse benefit determination by a plan or issuer that involves medical judgment, as well as rescissions. Section 110 of the No Surprises Act directs the Departments, in applying section 2719(b) of the PHS Act, to require the external review process to apply with respect to any adverse determination by a plan or issuer under Code section 9816 or 9817, ERISA section 716 or 717, or PHS Act section 2799A-1 or 2799A-2.

7

75 FR 43329 (July 23, 2010).

8

76 FR 37207 (June 10, 2011).

9

80 FR 72191 (Nov. 18, 2015).

10

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

C. Protecting Uninsured Individuals Through Transparency and Patient-Provider Dispute Resolution

On July 9, 2021, President Biden signed Executive Order 14036, Promoting Competition in the American Economy in order to promote the interests of American workers, businesses, and consumers.

11

The executive order acknowledges that robust competition is critical to providing consumers with more choices, better service, and lower prices and directs the Secretary of HHS to support existing price transparency initiatives for hospitals, other providers, and insurers along with any new price transparency initiatives or changes made necessary by the No Surprises Act or any other statues. Consistent with Executive Order 14036, these interim final rules implement provisions of the No Surprises Act that will provide individuals with more pricing information prior to seeking care, allowing them to shop for the care that is best for them and increase competition in the health care market.

11

86 FR 36987 (Jul 9, 2021).

The No Surprises Act also adds a new Part E of title XXVII of the PHS Act establishing requirements applicable to health care providers, providers of air ambulance services, and health care facilities. Section 112 of the No Surprises Act adds PHS Act sections 2799B-6 and 2799B-7. PHS Act section 2799B-6 requires providers and facilities to furnish a good faith estimate of expected charges upon request or upon scheduling an item or service. Providers and facilities are required to inquire if an individual is enrolled in a group health plan, group or individual health insurance coverage, an FEHB plan,

12

or a Federal health care program, and, if enrolled in a group health plan, or group or individual health insurance coverage, or a health benefits plan under chapter 89 of title 5,

13

whether the individual is seeking to have a claim for such item or service submitted to such plan or coverage. In the case that the individual is enrolled in such a plan or coverage (and is seeking to have a claim for such an item or services submitted to such plan or coverage), PHS Act section 2799B-6(2)(A) requires that the provider or facility furnish the good faith estimate to the individual's plan or issuer of such coverage to inform the advanced explanation of benefits that plans and issuers are required to provide a participant, beneficiary, enrollee, or FEHB covered individual under Code section 9816(f), ERISA section 716(f), PHS Act section 2799A-1(f), and 5 U.S.C. 8902(p). In the case that the individual requesting a good faith estimate for an item or service or seeking to schedule an item or service to be furnished who is not enrolled in a plan or coverage, or is not seeking to file a claim with such plan or coverage (self-pay), PHS Act section 2799B-6(2)(B) and these interim final rules at 45 CFR 149.610 require providers and facilities to furnish the good faith estimate to the individual.

12

HHS interprets the requirements described in PHS Act section 2799B-6 to apply with respect to FEHB covered individuals as they would to other individuals enrolled in a group health plan, group or individual health insurance coverage offered by a health insurance issuer. Although PHS Act section 2799B-6 does not reference health benefits plans under chapter 89 of title 5, the definition of “uninsured individual” at PHS Act section 2799B-7 does include individuals who do not have benefits under these health benefits plans, and these sections work together to provide protections for the uninsured (or self-pay) population. Moreover, the requirement for the provision of an advance explanation of benefits required by Code section 9816(f), ERISA section 716(f), and PHS Act section 2799A-(1)(f), as well as 5 U.S.C. 8902(p) cannot be accomplished by a FEHB carrier unless it receives a good faith estimate from a provider in accordance with PHS Act section 2799B-6(2)(A).

13

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

These interim final rules do not include requirements regarding PHS Act section 2799B-6(2)(A), which require providers and facilities to furnish good faith estimates to plans or issuers. Under Code section 9816(f), ERISA section 716(f), and PHS Act section 2799A-1(f) and 5 U.S.C. 8902(p), plans and issuers are required to include the good faith estimates in an advanced explanation of benefits provided to participants, beneficiaries, enrollees, and FEHB covered individuals. As stated in the August 20, 2021, FAQs issued by the Departments, the Departments have received feedback from the public about the challenges of developing the technical infrastructure necessary for providers and facilities to transmit to plans and issuers starting January 1, 2022, the good faith estimates required under PHS Act section 2799B-6, which plans and issuers must then include in the advanced explanation of benefits. Accordingly, until rulemaking to fully implement this requirement to provide such a good faith estimate to an individual's plan or coverage is adopted and applicable, HHS will defer enforcement of the requirement that providers and facilities provide good faith estimate information for individuals enrolled in a health plan or coverage and seeking to submit a claim for scheduled items or services to their plan or coverage. Additionally, stakeholders have requested that the Departments delay the applicability date of Code section 9816(f), ERISA section 716(f), and PHS Act section 2799A-1(f) until the Departments have established standards for the data transfer between providers and facilities and plans and issuers and have given enough time for plans and issuers and providers and facilities to build the infrastructure necessary to support the transfers. The Departments agree that compliance with this section is likely not possible by January 1, 2022, and therefore intend to undertake notice and comment rulemaking in the future to implement this provision, including establishing appropriate data transfer standards. Until such time, the Departments will defer enforcement of the requirement that plans and issuers must provide an advanced explanation of benefits. HHS will consider whether additional interim solutions for insured consumers are feasible. The Departments note that any rulemaking to fully implement Code section 9816(f), ERISA section 716(f), and PHS Act sections 2799A-1(f) and 2799B-6(2)(A) will include a prospective applicability date that provides plans, issuers, providers, and facilities with a reasonable amount of time to comply with new requirements. HHS encourages states that are primary enforcers of these requirements with regard to providers and issuers to take a similar enforcement approach, and

will not determine that a state is failing to substantially enforce these requirements if it takes such an approach.

Nonetheless, providers and facilities will be subject to enforcement action for failure to provide a good faith estimate to individuals not enrolled in a plan or coverage, or not seeking to have a claim for such item or services submitted to such plan or issuer of such coverage, as specified under these interim final rules. HHS seeks comment on this approach.

On November 12, 2020, the Departments issued the Transparency in Coverage final rules,

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which require group health plans and health insurance issuers of group or individual health insurance coverage to make price comparison information available to participants, beneficiaries, and enrollees through an internet-based self-service tool and in paper form, upon request. This information must be available for plan years—or in the individual market, for policy years—beginning on or after January 1, 2023 with respect to 500 specified items and services, and with respect to all covered items and services, for plan or policy years beginning on or after January 1, 2024. The Departments are of the view that the disclosure requirements to participants, beneficiaries, and enrollees under the Transparency in Coverage final rules, and those required under Code section 9816(f), ERISA section 716(f), and PHS Act section 2799A-1(f), are substantially similar and therefore the Departments seek comment on whether there are ways to leverage the Transparency in Coverage requirements, including whether there are ways for plans and issuers to provide the information required in the Transparency in Coverage final rules to participants, beneficiaries, and enrollees during plan or policy years beginning in 2022. The Departments also seek comment on whether it would be feasible for providers and facilities to provide an estimate or range of estimated costs for insured consumers upon request for 2022.

14

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

Section 112 of the No Surprises Act also adds PHS Act section 2799B-7, which directs the Secretary of HHS to establish a process under which uninsured (or self-pay) individuals can avail themselves of a patient-provider dispute resolution process if their billed charges after receiving an item or service are substantially in excess of the expected charges listed in the good faith estimate furnished by the provider or facility, pursuant to PHS Act section 2799B-6. Under PHS Act section 2799B-7, an uninsured (or self-pay) individual means, with respect to an item or service, an individual who does not have benefits for such item or service under a group health plan, group or individual health insurance coverage offered by a health insurance issuer, Federal health care program (as defined in section 1128B(f) of the Social Security Act), or a health benefits plan under chapter 89 of title 5, United States Code (or an individual who has benefits for such item or service under a group health plan or individual or group health insurance coverage offered by a health insurance issuer, but does not seek to have a claim for such item or service submitted to such plan or coverage).

II. Executive Summary

A. Departments of the Treasury, Labor, and HHS: Federal IDR Process and External Review

In order to implement the Federal IDR provisions under Code sections 9816(c) and 9817(b), ERISA sections 716(c) and 717(b), and PHS Act sections 2799A-1(c) and 2799A-2(b), as added by sections 103 and 105 of the No Surprises Act, these interim final rules establish a Federal IDR process that nonparticipating providers or facilities, nonparticipating providers of air ambulance services, and group health plans and health insurance issuers in the group and individual market may use following the end of an unsuccessful open negotiation period to determine the out-of-network rate for certain services. More specifically, the Federal IDR provisions may be used to determine the out-of-network rate for certain emergency services, nonemergency items and services furnished by nonparticipating providers at participating health care facilities, and air ambulance services furnished by nonparticipating providers of air ambulance services where an All-Payer Model Agreement or specified state law does not apply.

Under Code sections 9816(c)(1)(A) and 9817(b)(1)(A), ERISA sections 716(c)(1)(A) and 717(b)(1)(A), PHS Act sections 2799A-1(c)(1)(A) and 2799A-2(b)(1)(A), and these interim final rules, upon receiving an initial payment or notice of denial of payment from a plan or issuer with respect to such items or services, such provider or facility or provider of air ambulance services (as applicable) or plan or issuer (as applicable) may initiate an open negotiation period within 30 business days beginning on the date the provider or facility receives the initial payment or notice of denial of payment. The open negotiation period may continue for up to 30 business days beginning on the date that either party first initiates the open negotiation period. The parties may discontinue the negotiation if they agree on an out-of-network rate before the last day of the 30-business-day open negotiation period. If the parties cannot agree on an out-of-network rate, they must exhaust the 30-business-day open negotiation period before initiating the Federal IDR process. Either party may initiate the Federal IDR process during the 4-business-day period beginning on the 31st business day after the start of the open negotiation period. The parties may select a certified IDR entity, or if the parties do not select a certified IDR entity, the Departments will do so. The No Surprises Act and these interim final rules specify that the certified IDR entity selected cannot be a party to the determination or an employee or agent of such a party, or have a material familial, financial, or professional relationship with such party.

In resolving the disputes through the Federal IDR process, the No Surprises Act and these interim final rules provide that each party must submit to the certified IDR entity an offer for a payment amount for the qualified IDR item or service in dispute and other information related to the offer as requested by the certified IDR entity within 10 business days of selection of the certified IDR entity and may submit additional information for the certified IDR entity to consider. In making a determination of which payment offer to select, these interim final rules specify that the certified IDR entity must begin with the presumption that the QPA is the appropriate out-of-network rate for the qualified IDR item or service under consideration. These interim final rules further provide that the certified IDR entity must select the offer closest to the QPA unless the certified IDR entity determines that credible information submitted by either party clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate, based on the additional factors set forth in Code sections 9816(c)(5)(C)(ii) and 9817(b)(5)(C)(ii), ERISA sections 716(c)(5)(C)(ii) and 717(b)(5)(C)(ii), and PHS Act sections 2799A-1(c)(5)(C)(ii) and 2799A-2(b)(5)(C)(ii). The certified IDR entity may not consider usual and customary charges, the amount that would have been billed (including billed charges that are directed to the plan or issuer) if the protections of 45 CFR 149.410,

149.420, or 149.440

15

(as applicable) had not applied, or any public payor payment or reimbursement rates.

16

As discussed more fully in section III.D.4.ii. of this preamble, this approach is consistent with the No Surprises Act's emphasis on the QPA, both as the basis of the surprise billing protections also included in the statute and implemented by the July 2021 interim final rules and as the sole factor identified without any qualification by the statute.

17

The Departments are of the view that implementing the Federal IDR process in this manner encourages predictable outcomes, which will reduce the use of the Federal IDR process over time and the associated administrative fees born by the parties, while providing equitable and clear standards for when payment amounts may deviate from the QPA, as appropriate.

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The July 2021 interim final rules prohibit nonparticipating emergency facilities and nonparticipating providers furnishing emergency services from billing participants, beneficiaries, or enrollees for payment amounts that exceed the cost-sharing requirement for those items or services. The July 2021 interim final rules also generally prohibit nonparticipating providers furnishing nonemergency items and services at participating facilities from balance billing participants, beneficiaries, or enrollees for those items or services. In addition, the July 2021 interim final rules prohibit nonparticipating providers of air ambulance services furnishing air ambulance services for which benefits are available under a group health plan or group or individual health insurance coverage from balance billing participants, beneficiaries, or enrollees for those items or services.

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Public payor payment and reimbursement rates include reimbursement rates under the Medicare program under title XVIII of the Social Security Act, under the Medicaid program under title XIX of such Act, under the Children's Health Insurance Program under title XXI of such Act, under the TRICARE program under chapter 55 of title 10, United States Code, and under chapter 17 of title 38, United States Code.

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The No Surprises Act limits the certified IDR entity's consideration of additional factors by prohibiting the certified IDR entity from considering certain other factors, such as usual and customary charges and billed charges, in making a payment determination.

The No Surprises Act and these interim final rules also set forth requirements for certification of IDR entities by the Departments. To become certified IDR entities, IDR entities must provide written documentation demonstrating that they meet the eligibility criteria, including having sufficient expertise and staffing to conduct determinations on a timely basis, being free of conflicts of interest, being accredited by a nationally recognized and relevant accrediting body (such as URAC) or otherwise ensuring that IDR entity personnel possess the requisite training to conduct payment determinations (for example, providing documentation that personnel employed by the IDR entity have completed arbitration training by the American Arbitration Association (AAA), the American Health Law Association (AHLA), or a similar organization), ensuring policies and procedures are in place to maintain confidentiality of individually identifiable health information, providing a fixed fee for single determinations and a separate fee for batched determinations, having a procedure in place to retain certified IDR entity fees and retain and remit administrative fees, meeting appropriate indicators of fiscal integrity and stability, evidencing its ability to collect and transmit the information required to be reported to the Departments, and properly carrying out the requirements of the Federal IDR process in accordance with the law. These interim final rules also establish a process whereby members of the public, providers, facilities, providers of air ambulance services, plans, or issuers may petition for the denial or revocation of certification of an IDR entity. Finally, these interim final rules require the collection of information related to the Federal IDR process from certified IDR entities in order to allow the Departments to quarterly publish information on IDR payment determinations.

The Departments are also establishing a Federal IDR portal to administer the Federal IDR process. The Departments' Federal IDR portal will be available at

https://www.nsa-idr.cms.gov

and will be used throughout the Federal IDR process to maximize efficiency and reduce burden. As discussed throughout this preamble, the Federal IDR portal may be used to satisfy various requirements under these interim final rules, including provision of notices, Federal IDR initiation, submission of an application to be a certified IDR entity, as well as satisfying reporting requirements.

These interim final rules also amend final regulations issued by the Departments in 2015 related to external review in order to implement section 110 of the No Surprises Act. Section 110 requires that “[i]n applying the provisions of section 2719(b) of the [PHS Act] to group health plans and health insurance issuers offering group or individual health insurance coverage, the Secretary of [HHS], Secretary of Labor, and Secretary of the Treasury, shall require, beginning not later than January 1, 2022, the external review process described in paragraph (1) of such section to apply with respect to any adverse determination by such a plan or issuer under Code section 9816 or 9817, ERISA section 716 or 717, or PHS Act section 2799A-1 or 2799A-2, including with respect to whether an item or service that is the subject to such a determination is an item or service to which such respective section applies.” Accordingly, these interim final rules amend the final regulations regarding external review in two ways. First, the scope of adverse benefit determinations eligible for external review is amended to ensure that issues related to compliance with the specified provisions of the No Surprises Act fall within that scope. Several examples are also added to provide greater clarity to stakeholders regarding the expanded scope. Second, applicability provisions are amended to require that grandfathered health plans, which generally are exempt from requirements related to external review, must nonetheless provide for external review of adverse benefit determinations for claims subject to the cost-sharing and surprise billing protections in the No Surprises Act. The Departments seek comment on all aspects of these interim final rules.

B. Office of Personnel Management: Federal IDR Process for FEHB Carriers

The OPM interim final rules amend existing 5 CFR 890.114(a) to include references to the Treasury, DOL, and HHS interim final rules to clarify that pursuant to 5 U.S.C. 8902(p), FEHB carriers are also subject to the Federal IDR process set forth in those regulations with respect to an item or service eligible for determination through open negotiation or the Federal IDR process furnished by a FEHB carrier offering a health benefits plan in the same manner as those provisions apply to a group health plan or health insurance issuer offering group or individual health insurance coverage, subject to 5 U.S.C. 8902(m)(1) and the provisions of the FEHB carrier's contract. Through new 5 CFR 890.114(d), OPM adopts the Departments' interim final rules as conformed by terms unique to the FEHB Program. In 5 CFR 890.114(d), OPM adopts the Departments' rules as necessary to properly integrate with existing FEHB Program structure and sets forth circumstances in which OPM will enforce these rules as applied to FEHB carriers. The OPM interim final rules require FEHB carrier notice to the OPM Director (herein, the Director) of an FEHB carrier's notice of initiation, or receipt of a provider's notice of initiation, of the Federal IDR process. The Director will coordinate with the Departments in matters regarding FEHB

carriers requiring resolution under the Federal IDR process and with respect to oversight of certified IDR entities' reports regarding FEHB carriers. As discussed in the July 2021 interim final rules, all out-of-network rate determinations regarding IDR items or services eligible for determination through open negotiation or the Federal IDR process under the No Surprises Act with respect to FEHB plans or carriers that are not resolved by open negotiation are subject to the Federal IDR process unless OPM contracts with FEHB carriers include terms that adopt state law as governing for this purpose.

C. Department of HHS: Protections for the Uninsured

To ensure that uninsured (or self-pay) individuals are also afforded protections against surprise health care costs, the No Surprises Act includes provisions that require providers and facilities to furnish good faith estimates to uninsured (or self-pay) individuals upon their request and at the time of scheduling the item or service. In order to implement these provisions under PHS Act sections 2799B-6(1) and 2799B-6(2)(B), HHS is adding 45 CFR 149.610 to establish requirements for providers and facilities to specifically inquire about an individual's health coverage status and requirements for providing a good faith estimate to uninsured (or self-pay) individuals. These interim final rules define uninsured (or self-pay) individuals to include those who do not have benefits for an item or service under a group health plan, group or individual health insurance coverage offered by a health insurance issuer, a Federal health care program (as defined in section 1128B(f) of the Social Security Act), or a health benefits plan under chapter 89 of title 5, United States Code, or an individual who has benefits for such item or service under a group health plan or individual or group health insurance coverage offered by a health insurance issuer, but who does not seek to have a claim for such item or service submitted to such plan or coverage. PHS Act section 2799B-6, added by section 112 of the No Surprises Act, does not specifically define a Federal health care program and also does not reference health benefits plans under chapter 89 of title 5. However, PHS Act section 2799B-7, which was also added by section 112 of the No Surprises Act, and which provides protections related to the good faith estimate required under PHS Act section 2799B-6, defines an uninsured individual to include individuals not enrolled in a Federal health care program (as defined in section 1128B(f) of the Social Security Act) and individuals not enrolled in health benefits plans under chapter 89 of title 5. To align these two related sections, HHS is adopting the definition of an uninsured (or self-pay) individual at PHS Act section 2799B-7 for the purposes of the interim final rules at 45 CFR 149.610 which implements PHS Act section 2799B-6(1) and 2799B-6(2)(B) and 45 CFR 149.620 which implements PHS Act section 2799B-7.

The definition of uninsured (or self-pay) individuals in these interim final rules includes individuals enrolled in individual or group health insurance coverage offered by a health insurance issuer, or a health benefits plan under chapter 89 of title 5, but not seeking to have a claim for such item or service submitted to such plan or coverage. These individuals are often referred to as self-pay individuals, therefore these interim final rules include the term self-pay when discussing uninsured individuals.

Under PHS Act section 2791(b)(5), short-term, limited-duration insurance is excluded from the definition of individual health insurance coverage. Therefore, for purposes of 45 CFR 149.610 and 45 CFR 149.620, uninsured (or self-pay) individuals include individuals who are enrolled in short-term, limited-duration insurance and not also enrolled in a group health plan, group or individual health insurance coverage offered by a health insurance issuer, Federal health care program (as defined in section 1128B(f) of the Social Security Act), or a health benefits plan under chapter 89 of title 5, United States Code. Thus, providers and facilities will be required to provide to such individuals a good faith estimate and such individuals will be able to avail themselves of the patient-provider dispute resolution process, where applicable.

PHS Act section 2799B-6(2) and these interim final rules specify that a provider or facility must provide a notification (in clear and understandable language) of the good faith estimate of the expected charges for furnishing the items or services listed on the good faith estimate (including any items or services that are reasonably expected to be provided in conjunction with such scheduled or requested items or services and such items or services reasonably expected to be so provided by another health care provider or health care facility), with the expected billing and diagnostic codes for any such items or services.

As discussed in section I.C. of this preamble, requirements to implement PHS Act section 2799B-6(2)(A) are not included in these interim final rules given the challenges of developing the technical infrastructure necessary to transmit such data from providers and facilities to plans and issuers. The requirements in these interim final rules apply only to good faith estimate notifications for uninsured (or self-pay) individuals as described in PHS Act section 2799B-6(2)(B) and in these interim final rules. HHS acknowledges that PHS Act section 2799B-6 also requires providers and facilities to make certain disclosures to an individual's plan or coverage if the individual is enrolled in such a plan or coverage and is seeking to have a claim for such items or services submitted to such plan or coverage. Specifically, section 2799B-6(2)(A) requires a provider or facility to provide such a plan or issuer notification of the good faith estimate of expected charges for furnishing an item or service on the same terms as provided to individuals.

Health care providers and health care facilities are required under PHS Act section 2799B-6 to furnish a notification of the good faith estimate of expected charges to an uninsured (or self-pay) individual who schedules an item or service, and to an individual who has not yet scheduled an item or service, but requests a good faith estimate. PHS Act section 2799B-6 requires providers and facilities to furnish a good faith estimate to an uninsured (or self-pay) individual who schedules an item or service at least 3 business days before the date such item or service is to be so furnished, not later than 1 business day after the date of such scheduling (or, in the case of such an item or service scheduled at least 10 business days before the date such item or service is to be so furnished (or if requested by the uninsured (or self-pay) individual), not later than 3 business days after the date of such scheduling or such request). As further discussed in section VI of this preamble, in instances where an uninsured (or self-pay) individual requests a good faith estimate of expected charges, but the item or service has not been scheduled, these interim final rules require that the treating provider furnish a good faith estimate to the uninsured (or self-pay) individual, within 3 business days of such request. For example, if an uninsured (or self-pay) individual schedules an item or service on Monday, January 3 to be provided on Thursday, January 6, the provider and facility must furnish a good faith estimate no later than Tuesday, January 4. If scheduling occurs on Monday, January 3 for items or services to be

provided on Thursday, January 13, the provider and facility must furnish a good faith estimate no later than Thursday, January 6. If an uninsured (or self-pay) individual requests a good faith estimate on Monday, January 3 for items or services not yet scheduled, the provider and facility must furnish the good faith estimate no later than Thursday, January 6.

These interim final rules include definitions relating to good faith estimates of expected charges for uninsured (or self-pay) individuals for scheduled items or services and upon request. These interim final rules also include requirements for providers and facilities regarding the contents of the good faith estimates and the manner in which good faith estimates must be provided.

PHS Act section 2799B-7 provides further protections for the uninsured (or self-pay) individual by requiring the Secretary of HHS to establish a process (in this section referred to as patient-provider dispute resolution) under which an uninsured (or self-pay) individual who received from a provider or facility a good faith estimate of the expected charges, and who, after being furnished the item or service, is billed an amount that is substantially in excess of the expected charges in the good faith estimate, may seek a determination from a certified dispute resolution entity of the amount to be paid to the provider or facility.

HHS is adding new 45 CFR 149.620 to implement this patient-provider dispute resolution process, including specific definitions related to the process. HHS is also codifying provisions related to eligibility for the patient-provider dispute resolution process, and selection of an SDR entity. HHS clarifies that while SDR entities provide a similar function and must meet similar requirements as certified IDR entities, SDR entities are specific to the patient-provider dispute resolution process. These interim final rules also codify requirements related to the determination of payment amounts by SDR entities, fees associated with the patient-provider dispute resolution process, certification of SDR entities, and deferral to state-established patient-provider dispute resolution processes that meet certain minimum Federal standards.

III. Overview of the Interim Final Rules Regarding the Federal Independent Dispute Resolution Process for Plans, Issuers, Providers, Facilities, and Providers of Air Ambulance Services—Departments of the Treasury, Labor, and HHS

A. Definitions

Code section 9816, ERISA section 716, and PHS Act sections 2799A-1 and 2799A-2 include defined terms that are specific to the law's requirements and implementation.

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The definitions in 26 CFR 54.9816-3T, 29 CFR 2590.716-3, and 45 CFR 149.30 apply to these interim final rules; these interim final rules also define additional terms specific to the Federal IDR process. Under these interim final rules, “batched items and services” means multiple qualified IDR items or services that are considered jointly as part of one payment determination by a certified IDR entity for purposes of the Federal IDR process. For a qualified IDR item or service to be included as a batched item or service, the qualified IDR item or service must satisfy the criteria for batching set forth in 26 CFR 54.9816-8T(c)(3), 29 CFR 2590.716-8(c)(3), and 45 CFR 149.510(c)(3). “Certified IDR entity” means an entity responsible for conducting determinations under 26 CFR 54.9816-8T(c), 29 CFR 2590.716-8(c), and 45 CFR 149.510(c) that meets the certification criteria specified in 26 CFR 54.9816-8T(e), 29 CFR 2590.716-8(e), and 45 CFR 149.510(e) and that has been certified by the Departments. Separately, “IDR entity” means an entity that may apply or has applied for certification to conduct determinations under 26 CFR 54.9816-8T(c), 29 CFR 2590.716-8(c), and 45 CFR 149.510(c) and currently is not certified by the Departments pursuant to 26 CFR 54.9816-8T(e), 29 CFR 2590.716-8(e), and 45 CFR 149.510(e). If a certified IDR entity's certification has expired or has been revoked as a result of the process described in 26 CFR 54.9816-8T(e)(6), 29 CFR 2590.716-8(e)(6), and 45 CFR 149.510(e)(6), upon the date of the expiration or revocation, the formerly-certified IDR entity will be referred to as an IDR entity.

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To implement these interim final rules regarding the Federal IDR process under the PHS Act, HHS is amending 45 part CFR 149 by adding new Subparts F and G. Additionally, the Departments are amending 26 CFR 54.9816-1T and 54.9816-2T, 29 CFR 2590.716-1 and 2590.716-2 and 45 CFR 149.10 and 149.20 to expand the scope and applicability of this part to include IDR entities and the Federal IDR process. HHS is also amending 45 CFR 149.10 and 149.20 to expand the scope and applicability of this part to include SDR entities, the good faith estimate requirements, and patient-provider dispute resolution process.

These interim final rules also define certain terms related to conflict-of-interest standards applicable to certified IDR entities. Stakeholders have emphasized the importance of ensuring a broad conflict-of-interest standard in order to avoid the risk of biased IDR payment determinations (or the appearance of biased IDR payment determinations). In general, a “conflict of interest” means, with respect to a party to a payment determination, a certified IDR entity, a material relationship, status, or condition of the party, or certified IDR entity that impacts the ability of a certified IDR entity to make an unbiased and impartial payment determination. For purposes of these interim final rules, a conflict of interest exists when a certified IDR entity is a group health plan; a health insurance issuer offering group health insurance coverage, individual health insurance coverage or short-term, limited-duration insurance; an FEHB carrier; or a provider, a facility,

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or a provider of air ambulance services. While the statute does not specify that the IDR entity must not be a health insurance issuer offering short-term, limited-duration insurance, the Departments have determined that such entities should not be eligible for certification, due to their similarity to health insurance issuers offering group and individual health insurance coverage and their inherent interest as issuers in keeping reimbursement rates for providers, facilities, and providers of air ambulance services low. A conflict of interest also exists when a certified IDR entity is an affiliate or a subsidiary of a group health plan; a health insurance issuer offering group health insurance coverage, individual health insurance coverage or short-term, limited-duration insurance; an FEHB carrier; or provider, facility, or provider of air ambulance services. A conflict of interest also exists when a certified IDR

entity is an affiliate or subsidiary of a professional or trade association representing group health plans; health insurance issuers offering group health insurance coverage, individual health insurance coverage or short-term, limited-duration insurance; FEHB carriers; or providers, facilities, or providers of air ambulance services. Additionally, a conflict of interest exists when a certified IDR entity has, or any personnel assigned to a determination have a material familial, financial, or professional relationship with a party to the payment determination being disputed, or with any officer, director, or management employee of the plan, issuer or carrier offering a health benefits plan under 5 U.S.C. 8902; the plan administrator, plan fiduciaries, or plan, issuer, or carrier's employees; the health care provider, the health care provider's group or practice association; the provider of air ambulance services, the provider of air ambulance services' group or practice association, or the facility that is a party to the dispute. The Departments are of the view that an officer, director, or management employee of the plan issuer, or carrier offering a health benefits plan under 5 U.S.C. 8902; the plan administrator, plan fiduciaries, or plan, issuer or carrier employees; the health care provider, the health care provider's group or practice association; the provider of air ambulance services, the provider of air ambulance services' group or practice association, or the facility that is a party to the dispute are individuals who could have significant involvement with the dispute. Relationships with these individuals could therefore improperly affect the certified IDR entities' ability to be impartial.

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Similar to the July 2021 interim final rules, the term “facility” indicates a facility that furnishes health care services that is subject to the surprise billing protections of the No Surprises Act, such as a hospital (including a hospital's emergency department), urgent care center, or ambulatory surgical center. For purposes of good faith estimates under 45 CFR 149.610 and the Patient-Provider dispute resolution process in 45 CFR 149.620 “facility” includes an institution (such as a hospital or hospital outpatient department, critical access hospital, ambulatory surgical center, rural health center, federally qualified health center, laboratory, or imaging center) in any state in which state or applicable local law provides for the licensing of such an institution, that is licensed as such an institution pursuant to such law or is approved by the agency of such state or locality responsible for licensing such institution as meeting the standards established for such licensing.

These interim final rules also define what constitutes a material familial relationship, a material financial relationship, or material professional relationship with a party to the payment determination. In developing these definitions, the Departments looked to states' conflict-of-interest standards for external review and arbitrations of surprise billing claims. These state standards typically use terms that are similar to those used in Code section 9816(c)(4)(F)(i)(II), ERISA section 716(c)(4)(F)(i)(II), and PHS Act section 2799A-1(c)(4)(F)(i)(II).

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By adopting definitions that largely mirror these state standards, the Departments seek to ensure that the definitions are workable and increase the likelihood that IDR entities may be familiar with these standards, if they have performed services in these states. Accordingly, these interim final rules provide that the term “material familial relationship” means any relationship as a spouse, domestic partner, child, parent, sibling, spouse's or domestic partner's parent, spouse's or domestic partner's sibling, spouse's or domestic partner's child, child's parent, child's spouse or domestic partner, or sibling's spouse or domestic partner. “Material financial relationship” means any financial interest of more than five percent of total annual revenue or total annual income of a certified IDR entity or an officer, director, or manager thereof, or of a reviewer or reviewing physician employed or engaged by a certified IDR entity to conduct or participate in any payment determination under the Federal IDR process. Under the definition of “material financial relationship,” annual revenue and annual income do not include mediation fees received by mediators who are also arbitrators, provided that the mediator acts in the capacity of a mediator and does not represent a party in the mediation. Finally, with respect to terms related to the conflict-of-interest standards, “material professional relationship” means any physician-patient relationship, any partnership or employment relationship or affiliation, any shareholder or similar ownership interest in a professional corporation, partnership, or other similar entity, or any independent contractor arrangement that constitutes a material financial relationship with any expert used by the certified IDR entity or any officer or director of the certified IDR entity. The Departments solicit comment on whether the defined terms related to the conflict-of-interest standards should include threshold requirements to further define the level of relationship that would rise to the level of a conflict of interest.

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See e.g.,

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

Additionally, under these interim final rules, the Departments define certain terms related to confidentiality, information security, and privacy requirements that apply to an IDR entity seeking certification under these interim final rules. Code section 9816(c)(4)(A)(v), ERISA section 716(c)(4)(A)(v), and PHS Act section 2799A-1(c)(4)(A)(v) require certified IDR entities to maintain the confidentiality of individually identifiable health information (IIHI) obtained while making payment determinations and engaging in other activities related to the Federal IDR process. In establishing definitions for these terms, the Departments looked to existing Federal standards, particularly the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Health Information Technology for Economic and Clinical Health (HITECH) Act, and the privacy, security, and breach notification standards under 45 CFR part 160 A and subparts A, C, D, and E of part 164, because the Departments are of the view that these provisions are industry standards. The Departments have modified these standards in some cases to fit the circumstances of IDR entities.

These interim final rules define “Individually identifiable health information (IIHI)” to mean any information, including demographic data, that relates to the past, present, or future physical or mental health or condition of an individual; the provision of health care to an individual; or the past, present, or future payment for the provision of health care to an individual; and that identifies the individual; or with respect to which there is a reasonable basis to believe the information can be used to identify the individual.

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Finally, these interim final rules define “Unsecured IIHI” to mean IIHI that is not rendered unusable, unreadable, or indecipherable to unauthorized persons through the use of a technology or methodology specified by the Departments. For technologies and methodologies approved for this purpose, certified IDR entities should refer to the HHS Guidance to Render Unsecured Protected Health Information Unusable, Unreadable, or Indecipherable to Unauthorized Individuals.

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Note that this definition is broader than the definition of IIHI set forth in the Health Insurance Portability and Accountability Act (HIPAA) Rules at 45 CFR 160.103.

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HHS Office for Civil Rights, “Guidance to Render Unsecured Protected Health Information Unusable, Unreadable, or Indecipherable to Unauthorized Individuals,” available at

https://www.hhs.gov/guidance/document/guidance-render-unsecured-protected-health-information-unusable-unreadable-or.

These interim final rules provide that the term “breach” means the acquisition, access, use, or disclosure of IIHI in a manner not permitted under 26 CFR 54.9816-8T(e)(2)(v), 29 CFR 2590.716-8(e)(2)(v), and 45 CFR 149.510(e)(2)(v) that compromises the security or privacy of the IIHI. Under these interim final rules, a breach excludes any unintentional acquisition, access, or use of IIHI by personnel, including a contractor or subcontractor, acting under the authority of a certified IDR entity, if the acquisition, access, or use was made in good faith and within the scope of authority and does not result in further use or disclosure in a

manner not permitted under 26 CFR 54.9816-8T(e)(2)(v), 29 CFR 2590.716-8(e)(2)(v), and 45 CFR 149.510(e)(2)(v). Also excluded is any inadvertent disclosure by a person who is authorized to access IIHI as personnel of a certified IDR entity to another person authorized to access IIHI as personnel of the same certified IDR entity (including a contractor or subcontractor of the certified IDR entity), and the information received as a result of such disclosure is not further used or disclosed in a manner not permitted under 26 CFR 54.9816-8T(e)(2)(v), 29 CFR 2590.716-8(e)(2)(v), and 45 CFR 149.510(e)(2)(v). Finally, also excluded is a disclosure of IIHI when a certified IDR entity has a good faith belief that an unauthorized person to whom the disclosure was made would not reasonably have been able to retain such information. For example, if, while conducting an IDR payment determination, a certified IDR entity sends paperwork containing IIHI to the wrong address and the paperwork is returned by the post office, unopened, as undeliverable, the certified IDR entity can conclude that the entity at the improper address could not reasonably have retained the information. The definition of breach additionally provides that an acquisition, access, use, or disclosure of IIHI in a manner not permitted under 26 CFR 54.9816-8T(e)(2)(v), 29 CFR 2590.716-8(e)(2)(v), and 45 CFR 149.510(e)(2)(v) is presumed to be a breach unless the certified IDR entity demonstrates that there is a low probability that the security or privacy of the IIHI has been compromised based on a risk assessment of at least the following factors: (1) The nature and extent of the IIHI involved, including the types of identifiers and the likelihood of re-identification; (2) the unauthorized person who used the IIHI or to whom the disclosure was made; (3) whether the IIHI was actually acquired or viewed; and (4) the extent to which the risk to the IIHI has been mitigated.

Additionally, “qualified IDR item or service” means an item or service that is either an emergency service furnished by a nonparticipating provider or nonparticipating emergency facility subject to the protections of 26 CFR 54.9816-4T, 29 CFR 2590.716-4, or 45 CFR 149.110, for which the conditions of 45 CFR 149.410(b) (regarding receipt of notice of surprise billing protections and providing consent to waive them) are not met. The term also means an item or service furnished by a nonparticipating provider at a participating health care facility subject to the requirements of 26 CFR 54.9816-5T, 29 CFR 2590.716-5, and 45 CFR 149.120, for which the conditions of 149.420(c)-(i) (regarding receipt of notice of surprise billing protections and providing consent to waive them) are not met, for which the provider or facility (as applicable) or plan or issuer submits a valid Notice of IDR Initiation initiating the Federal IDR process. For the Notice of IDR Initiation to be valid, the open negotiation period under 26 CFR 54.9816-8T(b)(1), 29 CFR 2590.716-8(b)(1), and 45 CFR 149.510(b)(1) must have lapsed, and an agreement on the payment amount must not have been reached. The term qualified IDR item or service includes air ambulance services provided by nonparticipating providers of air ambulance services subject to the protections of 26 CFR 54.9817-1T, 29 CFR 2590.717-1, and 45 CFR 149.130, as these services are defined in 26 CFR 54.9816-3T, 29 CFR 2590.716-3, and 45 CFR 149.30, for which the open negotiation period under 26 CFR 54.9816-8T(b)(1), 29 CFR 2590.716-8(b)(1), and 45 CFR 149.510(b)(1) has lapsed, and no agreement on the payment amount has been reached.

The term “qualified IDR item or service” does not include items and services for which the out-of-network rate is determined by an All-Payer Model Agreement under section 1115A of the Social Security Act, or by reference to a specified state law. Additionally, this term does not include items or services submitted by the initiating party that are subject to the 90-calendar-day suspension period under 26 CFR 54.9816-8T(c)(4)(vii)(B), 29 CFR 2590.716-8(c)(4)(vii)(B), and 45 CFR 149.510(c)(4)(vii)(B). However, the term may include items or services that are subject to the 90-calendar-day suspension period if they are submitted during the subsequent 30-business-day period, as allowed under these interim final rules. The Departments solicit comment on these definitions, including whether other terms should be defined.

B. The Term “Days”

The No Surprises Act specifies a number of time periods that providers, facilities, providers of air ambulance services, plans, issuers, certified IDR entities, and the Departments must abide by throughout the course of the Federal IDR process, including time periods for initiation of the Federal IDR process, selection of a certified IDR entity, submission of documents, and payment determinations. The statute is largely silent on whether the term “days” used in these provisions means business days or calendar days. However, in certain provisions, the No Surprises Act specifies the use of calendar days or business days, indicating that where the statute is silent the Departments may choose either meaning. The Departments received feedback from stakeholders that meeting various deadlines under the Federal IDR process may be challenging (for example, depending on a certified IDR entity's case load or the number of claims that a provider or facility batches together) and that, if possible, additional time should be provided for the parties and the certified IDR entity to meet these deadlines. The Departments are of the view that in order to provide parties with the most time permitted under the statute to meet the various deadlines under the Federal IDR process as set forth in the No Surprises Act, business days should be used, unless there is a reason to use calendar days. For example, these interim final rules provide that calendar days are used for the timing requirement for the non-prevailing party to make payment after the certified IDR entity issues a written determination, as well as the requirement barring the initiation of the Federal IDR process for a payment dispute that concerns the same or similar qualified IDR item or service that was the subject of the initial notification during the 90-calendar-day period following the initial determination discussed later in this preamble. In these instances, the Departments are of the view that once a decision has been rendered, these interim final rules should not unduly delay the payment entitled under that decision. Moreover, in terms of the 90-day suspension period, the Departments are of the view that using a business day standard here has the potential to create an unnecessary barrier to accessing the Federal IDR process.

Furthermore, the Departments are of the view that using business days will avoid issues that may arise if deadlines were to fall on weekends or Federal holidays. Therefore, business days (Monday through Friday, not including Federal holidays) instead of calendar days are used throughout these interim final rules for the Federal IDR process unless otherwise indicated, regardless of whether a nonparticipating provider or facility, or a plan or issuer's business typically operates on weekend days.

C. Open Negotiation and Initiation of the Federal IDR Process

Code section 9816(c)(1)(A), ERISA section 716(c)(1)(A), PHS Act section 2799A-1(c)(1)(A), and these interim final rules provide that with respect to an emergency service, a nonemergency

item or service furnished by a nonparticipating provider at a participating facility subject to the surprise billing protections for which the notice and consent exceptions do not apply, and for which the out-of-network rate is not determined by reference to an All-Payer Model Agreement under section 1115A of the Social Security Act or specified state law as defined in 26 CFR 54.9816-3T, 29 CFR 2590.716-3, and 45 CFR 149.30, the provider or facility, or plan or issuer, may engage in open negotiations to determine the total out-of-network rate (including any cost sharing). If the parties fail to reach an agreement through open negotiation, they may initiate the Federal IDR process. Code section 9817(b), ERISA section 717(b), and PHS Act section 2799A-2(b) provide that out-of-network rates for air ambulance services may be determined through open negotiation or an IDR process that is largely identical to the process provided for in Code section 9816(c), ERISA section 716(c), and PHS Act section 2799A-1(c), provided the out-of-network rate is not determined by reference to an All-Payer Model Agreement under section 1115A of the Social Security Act or specified state law as defined in 26 CFR 54.9816-3T, 29 CFR 2590.716-3, and 45 CFR 149.30. Therefore, where applicable, providers of air ambulance services are included in the preamble and regulatory language text describing open negotiations and the Federal IDR process. The primary distinctions between air ambulance services and other health care services apply in how the certified IDR entity should select an offer and in the obligations on the certified IDR entity regarding reporting of information relating to the Federal IDR process.

1. Open Negotiation

The open negotiation period may be initiated by any party during the 30-business-day period beginning on the day the nonparticipating provider, facility, or nonparticipating provider of air ambulance services receives either an initial payment or a notice of denial of payment for an item or service.

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If the provider, facility, or provider of air ambulance services accepts such initial payment as the total payment, that initial payment combined with the cost-sharing amount for the item or service is the out-of-network rate, as defined in 26 CFR 54.9816-3T, 29 CFR 2590.716-3, and 45 CFR 149.30. Under the July 2021 interim final rules, the plan or issuer must provide in writing, with each initial payment or notice of denial of payment, certain information, including a statement that if the provider, facility, or provider of air ambulance services, as applicable, wishes to initiate a 30-business-day open negotiation period for purposes of determining the out-of-network rate, the provider, facility, or provider of air ambulance services may contact the appropriate person or office to initiate open negotiation, and that if the 30-business-day open negotiation period does not result in an agreement on the out-of-network rate, generally, the provider, facility, or provider of air ambulance services may initiate the Federal IDR process. The plan or issuer must also provide contact information, including a telephone number and email address, for the appropriate person or office to initiate open negotiations for purposes of determining an amount of payment (including cost sharing) for the item or service.

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As clarified in the July 2021 interim final rules, the initial payment should be an amount that the plan or issuer reasonably intends to be payment in full based on the relevant facts and circumstances, prior to the beginning of any open negotiations or initiation of the Federal IDR process.

In order for a plan, issuer, provider, facility, or provider of air ambulance services to know when it is a party to an open negotiation period and which items or services are subject to negotiation, these interim final rules require that the party initiating the open negotiation must provide written notice to the other party of its intent to negotiate, referred to as an open negotiation notice. The open negotiation notice must include information sufficient to identify the items or services subject to negotiation, including the date the item or service was furnished, the service code, the initial payment amount or notice of denial of payment, as applicable, an offer for the out-of-network rate, and contact information of the party sending the open negotiation notice. The open negotiation notice must be sent within 30 business days of the initial payment or notice of denial of payment from the plan or issuer regarding such item or service and must be provided in writing. The party sending the open negotiation notice may satisfy this requirement by providing the notice to the opposing party electronically (such as by email) if the following two conditions are satisfied: (1) The party sending the open negotiation notice has a good faith belief that the electronic method is readily accessible to the other party; and (2) the notice is provided in paper form free of charge upon request. For example, if a provider sends an open negotiation notice to the email address identified by the group health plan or issuer in the notice of denial or initial payment, such electronic delivery would satisfy this requirement (as long as the provider also sends the notice in paper form free of charge upon request). Similarly, if a provider, facility, or provider of air ambulance services submits a claim electronically, this could provide the plan or issuer with a good faith belief that the electronic method is readily accessible to the other party.

The 30-business-day open negotiation period begins on the day on which the open negotiation notice is first sent by a party. The Departments expect that most open negotiation notices will be sent electronically, and that, in general, the date the notice is sent will also be the date the notice is received. Furthermore, given that the parties have already made initial contact (namely that the provider or facility has transmitted a bill to the plan or issuer, and the plan or issuer has sent a notice of denial or initial payment to the provider or facility), the Departments anticipate that the parties should be able to provide effective notice without problems, and encourage the parties to take reasonable measures to ensure that actual notice is provided, such as confirming that the email address is accurate. The Departments caution that if the open negotiation notice is not properly provided to the other party (and no reasonable measures have been taken to ensure actual notice has been provided), the Departments may determine that the 30-business-day open negotiation period has not begun. In such case, any subsequent payment determination from a certified IDR entity may be unenforceable due to the failure of the party sending the open negotiation notice to meet the open negotiation requirement of these interim final rules. Therefore, the Departments encourage parties submitting open negotiation notices to take steps to confirm the other party's contact information and confirm receipt by the other party, through approaches such as read receipts, especially where a party does not initially respond to an open negotiation notice. The Departments solicit comment on whether there are any challenges or additional clarifications needed to ensure the parties are afforded the full open negotiation period, including whether there are any challenges regarding designating the date the notice is sent as the commencement date of the open negotiation period.

To facilitate communication between parties and compliance with this notice requirement, the Departments are concurrently issuing a standard notice

that the parties must use to satisfy the open negotiation notice requirement.

Negotiation during the open negotiation period will occur without the involvement of the Departments or a certified IDR entity. The Departments note that this requirement for a 30-business-day open negotiation period prior to initiating the Federal IDR process does not preclude the parties from reaching an agreement in fewer than 30 business days. However, in the event the parties do not reach an agreement, the parties must still exhaust the 30-business-day open negotiation period before either party may initiate the Federal IDR process. The Departments encourage parties to negotiate in good faith during this time period to reach an agreement on the out-of-network rate. To the extent parties reach agreement during this period, they can avoid the administrative costs associated with the Federal IDR process.

2. Initiating the Federal IDR Process and the Notice of IDR Initiation

Code section 9816(c)(1)(B), ERISA section 716(c)(1)(B), PHS Act section 2799A-1(c)(1)(B), and these interim final rules provide that with respect to items or services that were subject to open negotiation, if the parties have not reached an agreed-upon amount for the out-of-network rate by the last day of the open negotiation period, either party may initiate the Federal IDR process during the 4-business-day period beginning on the 31st business day after the start of the open negotiation period. A party may not initiate the Federal IDR process if, with respect to an item or service, the party knows or reasonably should have known that the provider or facility provided notice and obtained consent from a participant, beneficiary, or enrollee to waive surprise billing protections consistent with PHS Act sections 2799B-1(a) and 2799B-2(a) and the implementing regulations at 45 CFR 149.410(b) and 149.420(c)-(i).

To initiate the Federal IDR process, the initiating party must submit a notice to the other party and to the Departments (Notice of IDR Initiation) through the Federal IDR portal. The Notice of IDR Initiation must include: (1) Information sufficient to identify the qualified IDR items or services (and whether the qualified IDR items or services are designated as batched items and services), including the dates and location of the items or services, the type of qualified IDR items or services (such as emergency services, post-stabilization services, professional services, hospital-based services), corresponding service and place-of-service codes, the amount of cost sharing allowed and the amount of the initial payment made by the plan or issuer for the qualified IDR items or services, if applicable; (2) the names and contact information of the parties involved, including email addresses, phone numbers, and mailing addresses; (3) the state where the qualified IDR items or services were furnished; (4) the commencement date of the open negotiation period; (5) the initiating party's preferred certified IDR entity; (6) an attestation that the items or services are qualified IDR items and services within the scope of the Federal IDR process; (7) the QPA; (8) information about the QPA as described in 26 CFR 54.9816-6T(d), 29 CFR 2590.716-6(d), and 45 CFR 149.140(d); and (9) general information describing the Federal IDR process. This general information will help ensure that the non-initiating party is informed about the process and is familiar with the next steps. Such general information should include a description of the scope of the Federal IDR process and key deadlines in the Federal IDR process, including the dates to initiate the Federal IDR process, how to select a certified IDR entity, and the process for selecting an offer. The Departments have developed a form that parties must use to satisfy this requirement to provide general information describing the Federal IDR process.

As with the open negotiation notice, the initiating party may provide the Notice of IDR Initiation to the opposing party electronically (such as by email) if the following two conditions are satisfied: (1) The initiating party has a good faith belief that the electronic method is readily accessible by the other party; and (2) the notice is provided in paper form free of charge upon request.

In addition to furnishing notice to the non-initiating party, the initiating party must also furnish the Notice of IDR Initiation to the Departments on the same day the notice is furnished to the non-initiating party. The initiating party must provide its Notice of IDR Initiation through the Departments' Federal IDR portal. Moreover, IDR entities, certified IDR entities and disputing parties will be required to use the Federal IDR portal to perform certain functions related to the Federal IDR process. The Federal IDR portal will be used to facilitate and support IDR entity certification, the initiation of the Federal IDR process, the selection of certified IDR entities, the submission of supporting documentation to certified IDR entities, and the submission of certified IDR entity reporting metrics, as required by these interim final rules.

Under Code section 9816(c)(1)(B), ERISA section 716(c)(1)(B), and PHS Act section 2799A-1(c)(1)(B), the date of initiation of the Federal IDR process will be the date of the submission or such other date specified by the Departments that is not later than the date of receipt of the Notice of IDR Initiation by both the other party and the Departments. Consistent with the flexibility provided by the statute to specify an alternate date of initiation, these interim final rules specify that the initiation date of the Federal IDR process is the date of receipt of the Notice of IDR Initiation by the Departments. As noted, since the Departments will monitor the Federal IDR portal, submitting the Notice of IDR Initiation through the Federal IDR portal will provide a clear date on which the Notice of IDR Initiation has been received by the Departments. This approach will better enable the Departments to meet the statutory requirement to select a certified IDR entity within 6 business days of the initiation of the IDR process in instances in which the parties have not jointly selected a certified IDR entity. The Departments will acknowledge and confirm the initiation date with both parties upon receipt of the Notice of IDR Initiation. Given that the Departments expect most of these notices to be provided electronically, and that the parties will have been in continuous contact by this point in the process (through the submission of the initial bill, the remittance of the initial payment of the claim or notice of denial of payment, the submission of the open negotiation notice, and negotiations during the open negotiation period), the Departments expect minimal delay between when the Departments are notified through the portal and when the opposing party is notified (either by the initiating party or the Departments). The Departments solicit comment on both the content of the Notice of IDR Initiation as well as the manner for providing the notices as set forth under these interim final rules.

D. Federal IDR Process Following Initiation

1. Selection of Certified IDR Entity

Under Code section 9816(c)(4)(F), ERISA section 716(c)(4)(F), and PHS Act section 2799A-1(c)(4)(F), the plan or issuer and the nonparticipating provider, nonparticipating emergency facility, or nonparticipating provider of air ambulance services (as applicable) that are parties to the Federal IDR process may jointly select a certified IDR entity no later than 3 business days

following the date of the IDR initiation. As stated above, in initiating the Federal IDR process, the initiating party will indicate its preferred certified IDR entity in the Notice of IDR Initiation. Under these interim final rules, the party in receipt of the Notice of IDR Initiation may agree or object to the selection of the preferred certified IDR entity identified in the Notice of IDR Initiation. If the non-initiating party in receipt of the Notice of IDR Initiation fails to object within 3 business days of the date of initiation of the Federal IDR process, the preferred certified IDR entity identified in the Notice of IDR Initiation will be the selected certified IDR entity, provided that the certified IDR entity does not have a conflict of interest. If the party in receipt of the Notice of IDR Initiation timely objects, that party must timely notify the initiating party of the objection, including an explanation of the reason for objecting, and propose an alternative certified IDR entity. The initiating party must then agree or object to the alternative certified IDR entity. In order to jointly select a certified IDR entity, the plan or issuer and the nonparticipating provider, nonparticipating emergency facility, or nonparticipating provider of air ambulance services must agree on a certified IDR entity not later than 3 business days after the date of initiation of the Federal IDR process. Due to the short timeframe for this selection, the Departments anticipate that communication between the parties regarding certified IDR entity selection will typically be conducted through electronic mail to the email addresses used to send and receive the Notice of IDR Initiation. The Departments anticipate that most users of the Federal IDR process will be providers, facilities, providers of air ambulance services, plans, and issuers, which are likely to use electronic communications regularly. If both parties agree on and select a certified IDR entity, or fail to agree upon a certified IDR entity within the specified timeframe, the initiating party must notify the Departments by electronically submitting the notice of the certified IDR entity selection or failure to select (as applicable), no later than 1 business day after the end of the 3-business-day period (or in other words, 4 business days after the date of initiation of the Federal IDR process) through the Federal IDR portal. In addition, in instances where the non-initiating party believes that the Federal IDR process is not applicable, the non-initiating party must notify the Departments through the Federal IDR portal within the same timeframe that the notice of selection (or failure to select) is required and provide information regarding the lack of applicability. Based upon this information and any additional information requested by the selected certified IDR entity, the selected certified IDR entity will determine whether the Federal IDR process is applicable. The Departments seek comment on this approach and whether any challenges exist in relying solely upon electronic notifications.

The Departments will make available on the Federal IDR portal a list of certified IDR entities among which parties to the Federal IDR process may select, including basic information about the certified IDR entities, such as contact information, certified IDR entity numbers (unique identification numbers assigned to each certified IDR entity by the Departments), websites, and service areas. The Departments seek comment on this approach, including whether additional information about the certified IDR entities should be made public, and whether any challenges exist in relying solely upon electronic notifications.

Under these interim final rules, the selected certified IDR entity must not have a conflict of interest as defined in 26 CFR 54.9816-8T(a)(2), 29 CFR 2590.716-8(a)(2), and 45 CFR 149.510(a)(2). The selected certified IDR entity must also ensure that assignment of personnel to the dispute and decisions regarding hiring, compensation, termination, promotion, or other similar matters related to personnel assigned to the dispute are not made based upon the likelihood that the assigned personnel will support a particular party or type of party (that is, provider, facility, provider of air ambulance services, plan, or issuer) to the determination being disputed other than as outlined under 26 CFR 54.9816-8T(c)(4)(iii), 29 CFR 2590.716-8(c)(4)(iii), and 45 CFR 149.510(c)(4)(iii). Also, as agents of the certified IDR entity, personnel responsible for handling individual payment determinations must comply with the certification requirements of these interim final rules as set forth by their principal, the certified IDR entity, in its procedures. Therefore, the personnel assigned to disputes by the certified IDR entity must not have a conflict of interest, as defined by 26 CFR 54.9816-8T(a)(2), 29 CFR 2590.716-8(a)(2), and 45 CFR 149.510(a)(2). In addition, any personnel assigned to the matter must not have been a party to the determination being disputed or an employee or agent of such a party within the 1 year immediately preceding the dispute resolution assignment, similar to the “revolving door” laws

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laid out in 18 U.S.C. 207(b), 207(c), and 207(e). Under 18 U.S.C. 207(b), 207(c), and 207(e), former officers or employees of the executive branch, including independent agencies, are prohibited from aiding or advising on matters with which they were involved while in the executive branch for 1 year. These interim final rules adopt the same 1-year timeframe by prohibiting former employees' or agents' involvement in dispute resolution processes involving former employers for 1 year. The Departments are of the view that this approach provides a reasonable and appropriate standard for preventing conflicts of interest. Although 18 U.S.C. 207(b), 207(c), and 207(e) are typically used in reference to trade or treaty negotiations, the 1-year prohibition is also a standard applied generally to employees of the executive and legislative branches and independent agencies. These statutes represent conflict-of-interest standards that the Departments view as reasonable and appropriate for developing standards for preventing conflicts of interest involving certified IDR entities that are resolving disputes in the Federal IDR process. Certified IDR entities are expected to ensure staff compliance with the standards of these interim final rules, and as such, attestations of no conflict of interest at the organization level are intended also to represent the absence of conflicts of interest among the employees and agents of the certified IDR entity.

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Maskell, J., Post-Employment, “Revolving Door,” Laws for Federal Personnel. Congressional Research Service. 2014.

https://fas.org/sgp/crs/misc/R42728.pdf.

The Departments anticipate that certified IDR entities will likely be limited to organizations with sufficient staff who have arbitration and health care claims experience, including entities currently providing services for external review or state IDR determinations. To further ensure that personnel assigned to any determination in the Federal IDR process do not have a conflict of interest, the Departments have included additional safeguards for personnel, as well as an additional requirement that the certified IDR entity have procedures in place to ensure adherence by personnel with these additional safeguards. Accordingly, at the time of application for certification, the IDR entity must attest that it has procedures in place to ensure that no conflicts of interest exist or will exist, as set forth in the discussion of

certification requirements later in this preamble. As an additional requirement, certified IDR entities will have had to submit, as part of their application to be certified IDR entities, policies and procedures for conducting ongoing audits for conflicts of interest, to ensure that should any arise, the certified IDR entity procedures in place to inform the Departments of the conflict of interest and mitigate the risk by reassigning the dispute to other personnel in the event that any personnel previously assigned have a conflict of interest.

If the parties have agreed on a certified IDR entity, the notice of the certified IDR entity selection must include the following information: (1) The name of the certified IDR entity; (2) the certified IDR entity number; and (3) an attestation by both parties (or by the initiating party if the other party has not responded) that the selected certified IDR entity does not have a conflict of interest. The attestation must be submitted based on conducting a conflicts of interest check using information available (or accessible using reasonable means) to the parties (or the initiating party if the other party has not responded) at the time of the selection.

As stated earlier in this preamble, upon receipt of notification that the parties failed to agree on a certified IDR entity, the Departments will select a certified IDR entity. In such instances, the Departments will randomly select a certified IDR entity that charges a fee within the allowed range provided for in guidance and defined further in section III.D.4.viii of this preamble. If there are insufficient certified IDR entities that charge a fee within the allowed range available to adjudicate the payment determination, the Departments will randomly select a certified IDR entity that has received approval to charge a fee outside of the allowed range. The Departments will make the random selection not later than 6 business days after the date of initiation of the Federal IDR process, and will notify the parties of the selection. The Departments considered alternative approaches to randomly selecting a certified IDR entity, including whether the Departments should consider the specific fee of the certified IDR entity or look to other factors, such as how often the certified IDR entity chooses the amount closest to the QPA. Following consideration of various approaches, the Departments have chosen to utilize a random selection method to select a certified IDR entity that charges a fee within the allowed range (or has received approval from the Departments to charge a fee outside of the allowed range, if there are insufficient certified IDR entities that charge a fee within the allowed range available) and that does not have a conflict of interest with either party. The Departments are of the view that this approach will help ensure that requests for IDR and workload associated with making determinations for such requests are appropriately distributed across the certified IDR entities, will result in an efficient and timely assignment of a certified IDR entity to payment determinations, and will protect against bias in the types of cases a certified IDR entity reviews while encouraging certified IDR entities to charge reasonable fees for their services. Additionally, the Departments are of the view that this approach will provide predictability to the parties regarding the fees they will be expected to pay if they do not select the certified IDR entity. The Departments seek comment on this approach, including whether the random selection method should be limited only to certified IDR entities that charge a fee within the allowed range. The Departments may issue future guidance regarding whether entities that have received approval from the Departments to charge a fee outside of the allowed range may be selected by the Departments under the random selection method.

After selection by the parties (including when the initiating party selects a certified IDR entity and the other party does not object), or by the Departments, the certified IDR entity must also review its selection to ensure that it meets the requirements of 26 CFR 54.9816-8T(c)(1)(ii), 29 CFR 2590.716-8(c)(1)(ii), and 45 CFR 149.510(c)(1)(ii) related to potential conflicts of interest. If the selected certified IDR entity meets these requirements, the certified IDR entity must attest to meeting these requirements. If the certified IDR entity is unable to attest that it meets these requirements, the certified IDR entity must notify the Departments through the Federal IDR portal within 3 business days, after which the Departments will notify the parties. Upon notification, the parties will have 3 business days to select another certified IDR entity under the process described in 26 CFR 54.9816-8T(c)(1), 29 CFR 2590.716-8(c)(1), or 45 CFR 149.510(c)(1). If the parties notify the Departments that they have not agreed on a certified IDR entity, the Departments may randomly select another certified IDR entity.

The certified IDR entity must also review the information submitted by the parties to determine whether the Federal IDR process applies, including whether an All-Payer Model Agreement or specified state law applies. If the Federal IDR process does not apply, the certified IDR entity must notify the Departments and the parties within 3 business days of making this determination.

2. Authority To Continue Negotiation

Code sections 9816(c)(2)(B) and 9817(b)(2)(B), ERISA sections 716(c)(2)(B) and 717(b)(2)(B), PHS Act sections 2799A-1(c)(2)(B) and 2799A-2(b)(2)(B), and these interim final rules provide that, in instances in which the parties agree on an amount for a qualified IDR item or service after the Federal IDR process is initiated but prior to a determination by a certified IDR entity, the agreed-upon amount will be treated as the out-of-network rate and will be treated as resolving the dispute. If the parties to the Federal IDR process agree on an out-of-network rate for a qualified IDR item or service after providing to the Departments the Notice of IDR Initiation, but before the certified IDR entity has made its payment determination, the initiating party must notify the Departments and the certified IDR entity (if selected) by electronically submitting notification of such agreement through the Federal IDR portal as soon as possible but no later than 3 business days after the date of the agreement. As is the case in instances where the parties do not come to an agreement before the certified IDR entity selects the amount submitted by one of the parties, the amount by which this agreed-upon out-of-network rate exceeds the cost-sharing amount for the qualified IDR item or service is the total plan or coverage payment.

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The plan or issuer must pay the balance of the total plan or coverage amount of the agreed-upon out-of-network rate (with any initial payment made counted towards the total plan or coverage payment) to the nonparticipating provider, nonparticipating emergency facility, or nonparticipating provider of air ambulance services not later than 30 business days after the agreement is reached. As noted in section III.D.4.viii of this preamble regarding costs of the Federal IDR process, when there is an agreement after initiation and a certified IDR entity is selected but prior to a determination by the certified IDR entity, each party must pay half of the certified IDR entity fee, unless the parties agree otherwise on a method for allocating the applicable fee. In no instance may either party seek

additional payment from the participant or beneficiary, including in instances in which the out-of-network rate exceeds the QPA. When an agreement is reached, either before or after a certified IDR entity is selected, notification to the Departments must include the out-of-network rate (that is, the total payment amount, including both cost sharing and the total plan or coverage payment) and signatures from an authorized signatory for each party.

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See

26 CFR 54.9816-4T, 54.9816-5T, and 54.9817-1T; 29 CFR 2590.716-4, 2590.716-5, and 2590.717-1; and 45 CFR 149.110, 149.120, and 149.130.

3. Treatment of Batched Items and Services

Code section 9816(c)(3), ERISA section 716(c)(3), and PHS Act section 2799A-1(c)(3) direct the Departments to specify criteria under which multiple qualified IDR items and services may be considered jointly as part of one payment determination (batching). Under these interim final rules, multiple claims for qualified IDR items and services may be submitted and considered jointly as part of one payment determination by a certified IDR entity (batched items and services) only if certain conditions are met. Batched items and services submitted and considered jointly as part of one payment determination under 26 CFR 54.9816-8T(c)(3)(i), 29 CFR 2590.716-8(c)(3)(i), 45 CFR 149.510(c)(3)(i) are subject to the fee for batched determinations under these interim final rules.

First, the qualified IDR items and services must be billed by the same provider or group of providers or facility or same provider of air ambulance services. Items and services are billed by the same provider or group of providers or facility or same provider of air ambulance services if the items or services are billed with the same National Provider Identifier (NPI) or Taxpayer Identification Number (TIN).

Second, the payment for the items and services would be made by the same group health plan or health insurance issuer.

Third, the qualified IDR items and services must be the same or similar items or services. The definition of a same or similar item or service in these interim final rules is consistent with the definition under the July 2021 interim final rules. The Departments defined a same or similar item or service in 26 CFR 54.9816-6T(a)(13), 29 CFR 2590.716-6(a)(13), and 45 CFR 149.140(a)(13) as those items and services that are billed under the same service code, or a comparable code under a different procedural code system, and the Departments defined the service codes as the code that describes an item or service using Current Procedural Terminology (CPT), Healthcare Common Procedure Coding System (HCPCS), or Diagnosis-Related Group (DRG) codes.

Finally, all the qualified IDR items and services must have been furnished within the same 30-business-day period, or the 90-calendar-day suspension period described later in this preamble. Therefore, if items or services are furnished within the 90-calendar-day suspension period and meet the other applicable requirements, they may be submitted and considered jointly as part of one payment determination by a certified IDR entity, once the suspension period has ended. Under Code section 9816(c)(9), ERISA section 716(c)(9), and PHS Act section 2799A-1(c)(9), the Departments may provide an alternative period to the aforementioned 30-business-day period as determined by the Departments for certain circumstances, such as low-volume items and services. The Departments are using this authority to ensure that items and services delivered during the 90-calendar-day suspension period are eligible for the Federal IDR process and may be included in the same batch.

The Departments are of the view that the approach set forth to allow for batching of multiple qualified IDR items and services will avoid combinations of unrelated claims, providers, facilities, providers of air ambulance services and plans and issuers in a single dispute that could unnecessarily complicate an IDR payment determination and create inefficiencies in the Federal IDR process. The Departments solicit comment on this approach and whether there is a need to prescribe an alternative period for other qualified IDR items and services different from the 30-business-day period discussed earlier in the discussion of the batching requirements and what circumstances should be considered in defining any alternative period.

Additionally, in some cases, a plan or issuer may pay a provider, facility, or provider of air ambulance services a single payment for multiple services an individual received during an episode of care (bundling). In the case of qualified IDR items or services that are billed by a provider, facility, or provider of air ambulance services as part of a bundled arrangement, or where a plan or issuer makes an initial payment as a bundled payment (or specifies that a denial of payment is made on a bundled payment basis), these interim final rules provide that those qualified items or services may be submitted and considered as part of one payment determination by a certified IDR entity (and is subject to the fee for single determinations under 26 CFR 54.9816-8T(c)(3)(ii), 29 CFR 2590.716-8(c)(3)(ii), 45 CFR 149.510(c)(3)(ii)).

The Departments recognize that certain batched items and services may have different QPAs. For example, if a determination includes multiple batched claims for Service A furnished by Provider B to individuals covered by Issuer C, with some individuals covered by plans in the individual market and others covered by plans in the large group market, there likely would be two different QPAs for the certified IDR entity to consider—one QPA for the services furnished to individuals enrolled in individual market coverage, and one QPA for individuals with large group market coverage. As discussed elsewhere in this preamble, when this is the case, the parties must provide the relevant information for each QPA, and the certified IDR entity must consider each QPA for each item or service separately. However, since batched items and services involve the same or similar medical procedure, batching is likely to reduce redundant IDR proceedings as well as streamline the certified IDR entity's decision-making, as some of the considerations relate to factors not specific to the individual encounter.

The Departments seek comment on all aspects of the criteria for batching claims and bundling, including whether additional conditions should be added to limit batching or whether the conditions should be amended to facilitate broader batching of qualified IDR items and services. The Departments also seek comment on how frequently nonparticipating providers, nonparticipating emergency facilities, or nonparticipating providers of air ambulance services will be reimbursed through a bundled payment and whether allowing items or services included in a bundled payment by a provider or facility to be treated as one payment determination could be used to circumvent the batching requirements by not requiring precise consideration of what specific claims within the batch should be arbitrated and which claims should not, thereby resulting in potential overuse of the Federal IDR process in a manner that creates inefficiencies.

4. Payment Determination

i. Submission of Offers

Code section 9816(c)(5)(B), ERISA section 716(c)(5)(B), and PHS Act section 2799A-1(c)(5)(B) provide that, not later than 10 days after the date of selection of the certified IDR entity with respect to a determination for a

qualified IDR item or service, the plan or issuer and the nonparticipating provider, nonparticipating emergency facility, or provider of air ambulance services must each submit to the certified IDR entity an offer for a payment amount for such qualified IDR item or service. Under these interim final rules, the offer must be submitted not later than 10 business days after the selection of the certified IDR entity and must be expressed as both a dollar amount and the corresponding percentage of the QPA represented by that dollar amount, to facilitate the certified IDR entity reporting the offer as a percentage of the QPA to the Departments. Where batched items and services have different QPAs, the parties should provide these different QPAs and may provide different offers for these batched items and services, provided that the same offer should apply for all items and services with the same QPA.

Parties to the Federal IDR process must also submit information requested by the certified IDR entity relating to the offer. The Departments intend for the Federal IDR portal to collect this information as part of the offer submission process, such that certified IDR entities will not have to directly request this information. Providers and facilities must also indicate the size of their practices and facilities at the time the information is submitted. This will enable certified IDR entities to report on the size of the provider practices and facilities, as required under 26 CFR 54.9816-8T(f)(1)(ii), 29 CFR 2590.716-8(f)(1)(ii), and 45 CFR 149.510(f)(1)(ii). Specifically, the provider must specify whether the provider practice or organization has fewer than 20 employees, 20 to 50 employees, 51 to 100 employees, 101 to 500 employees, or more than 500 employees. For facilities, the facility must specify whether the facility has 50 or fewer employees, 51 to 100 employees, 101 to 500 employees, or more than 500 employees. Providers and facilities must also provide information on the practice specialty or type, respectively (if applicable). Similarly, plans and issuers must provide the coverage area of the plan or issuer, the relevant geographic region for purposes of the QPA, and, for group health plans, whether they are fully-insured, or partially or fully self-insured.

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FEHB carriers must identify if a particular item or service relates to FEHB plans. The information such as practice or facility size, coverage area, geographic region, and whether a plan is fully-insured or partially or fully self-insured is required to be submitted as part of an offer so that the certified IDR entities can report this information to the Departments. This information will inform the reports required from the Departments under Code section 9816(c)(7), ERISA section 716(c)(7), and PHS Act section 2799A-1(c)(7). Both parties must submit any other information requested by the certified IDR entity relating to such offer. In addition, parties may submit any information relating to the offer, except that the information may not include information that relates to usual and customary charges, billed amounts, and public payor rates as discussed later in this preamble.

26

Pursuant to OPM contracts with FEHB carriers under 5 U.S.C. Ch. 89, all FEHB carriers offer fully insured health benefits plans in consideration of premium payments pursuant to contract terms, and no health benefits plan is self-insured by OPM or the federal government.

With regard to the number of employees of a provider or facility, the Departments understand that hospitals and facilities may use a variety of methods for staffing, such as through contracting with physicians' practices or foundations whose physicians or medical staff are not considered employees of the hospital or facility. The Departments seek comment on whether additional guidance is needed to account for these situations in the reporting of provider and facility size.

ii. Selection of Offer for Qualified IDR Items or Services That Are Not Air Ambulance Services

These interim final rules provide that, not later than 30 business days after the selection of the certified IDR entity, the certified IDR entity must select one of the offers submitted by the plan or issuer and the provider or facility to be the out-of-network rate for the qualified IDR item or service. For each qualified IDR item or service, the amount by which this out-of-network rate exceeds the cost-sharing amount for the qualified IDR item or service is the total plan or coverage payment (with any initial payment made counted towards the total plan or coverage payment). In selecting the offer, the certified IDR entity must presume that the QPA is an appropriate payment amount but must also consider the additional circumstances, following the requirements of 26 CFR 54.9816-8T(c)(4)(iii)(B) through (D), 29 CFR 2590.716-8(c)(4)(iii)(B) through (D), and 45 CFR 149.510(c)(4)(iii)(B) through (D), only if the information is submitted by the parties. However, to be considered by the certified IDR entity, information submitted by the parties must be credible and relate to the offer submitted by either party, and must not include information on the prohibited factors described in 26 CFR 54.9816-8T(c)(4)(v), 29 CFR 2590.716-8(c)(4)(v), or 45 CFR 149.510(c)(4)(v). After considering the QPA, additional information requested by the certified IDR entity from the parties, and all of the credible information that the parties submit that is consistent with the requirements in 26 CFR 54.9816-8T(c)(4)(i)(A), 29 CFR 2590.716-8(c)(4)(i)(A), or 45 CFR 149.510(c)(4)(i)(A), the certified IDR entity must select the offer closest to the QPA, unless the credible information submitted by the parties clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate, based on the additional circumstances allowed under 26 CFR 54.9816-8T(c)(4)(iii)(B) through (D), 29 CFR 2590.716-8(c)(4)(iii)(B) through (D), or 45 CFR 149.510(c)(4)(iii)(B) through (D) with respect to the qualified IDR item or service. In these cases, or when the offers are equally distant from the QPA but in opposing directions, the certified IDR entity must select the offer that the certified IDR entity determines best represents the value of the items or services, which could be either party's offer.

These interim final rules define information as credible if upon critical analysis the information is worthy of belief and is trustworthy. These interim final rules also specify that a material difference exists where there is substantial likelihood that a reasonable person with the training and qualifications of a certified IDR entity making a payment determination would consider the information important in determining the out of network rate and view the information as showing that the QPA is not the appropriate out-of-network rate under such additional circumstances.

If the certified IDR entity determines that credible information about additional circumstances clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate, the certified IDR entity must select the offer that the certified IDR entity determines best represents the appropriate out-of-network rate for the qualified IDR items or services, which could be either party's offer. Not later than 30 business days after the selection of the certified IDR entity, the certified IDR entity must also notify the plan or issuer and the provider or facility of the selection of the offer, and provide the written decision required under 26 CFR 54.9816-8T(c)(4)(vi), 29 CFR 2590.716-8(c)(4)(vi), and 45 CFR 149.510(c)(4)(vi).

The Departments are of the view that the best interpretation of Code section 9816, ERISA section 716, and PHS Act section 2799A-1 is that when selecting an offer, a certified IDR entity must look first to the QPA, as it represents a reasonable market-based payment for relevant items and services, and then to other considerations. This presumption that the QPA is the appropriate out-of-network rate can be rebutted by presentation of credible information about additional circumstances, following the requirements of 26 CFR 54.9816-8T(c)(4)(iii)(B) through (D), 29 CFR 2590.716-8(c)(4)(iii)(B) through (D), and 45 CFR 149.510(c)(4)(iii)(B) through (D), that clearly demonstrate that the QPA is materially different from the appropriate out-of-network rate. The statutory text lists the QPA as the first factor that the certified IDR entity must consider in determining which offer to select. The “additional circumstances” that the certified IDR entity must consider if relevant, credible information is provided are described in a separate paragraph, and the certified IDR entity's consideration of additional circumstances is subject to a prohibition on considering certain factors. Additionally, whereas the statute provides relatively limited guidance on how to consider or define these additional circumstances, the statute sets out detailed rules for calculating the QPA, suggesting that an accurate and clear calculation of the QPA is integral to the application of consumer cost sharing and to the certified IDR entity's determination of the out-of-network rate. For example, the statute includes a requirement that when plans and issuers do not have sufficient information to calculate their own median contracted rates, they utilize a database free of conflicts of interest.

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Plans and issuers must also provide specific information on how the QPA is calculated to nonparticipating providers and facilities, ensuring that they are aware of how this amount is calculated.

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Plans and issuers are also subject to audit requirements that will be enforced by the Departments to ensure that they follow these rules.

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Cost sharing for participants, beneficiaries, and enrollees for items and services will be based on the recognized amount, which will generally be the QPA for services eligible for the Federal IDR process, indicating that the QPA is a reasonable out-of-network rate. The Departments are also required to report how payment determinations compare to the corresponding QPA, reflecting that the QPA is a benchmark for determining the appropriate out-of-network rate.

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Taken together, these statutory elements reflect the importance the No Surprises Act assigns to the QPA in the Federal IDR process, and show that the statute contemplates that typically the QPA will be a reasonable out-of-network rate.

27

Code section 9816(a)(2), (3)(E); ERISA section 716(a)(2), (3)(E), and PHS Act section 2799A-1(a)(2), (3)(E); 26 CFR 54.9816-6T, 29 CFR 2590.716-6, and 45 CFR 149.140.

28

Id.

29

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

30

Code section 9816(c)(7)(A)(v), (B)(iii) and (iv); ERISA section 716(c)(7)(A)(v), (B)(iii) and (iv); and PHS Act section 2799A-1(c)(7)(A)(v), (B)(iii) and (iv).

The Departments are also of the view that policy considerations support the approach taken under these interim final rules regarding which offer a certified IDR entity must select. Generally, the QPA should reflect standard market rates arrived at through typical contract negotiations and should therefore be a reasonable out-of-network rate under most circumstances. The QPA is generally based on the median of contracted rates, and these contracted rates are established through arms-length negotiations between providers and facilities and plans and issuers (or their service providers). Anchoring the determination of the out-of-network rate to the QPA will increase the predictability of IDR outcomes, which may encourage parties to reach an agreement outside of the Federal IDR process to avoid the administrative costs, and will aid in reducing prices that may have been inflated due to the practice of surprise billing prior to the No Surprises Act. Finally, anchoring the determination to the QPA will help limit the indirect impact on participants, beneficiaries, and enrollees that would occur from higher out-of-network rates if plans and issuers were to pass higher costs on to individuals in the form of increases in premiums.

Accordingly, the certified IDR entity must begin with the presumption that the QPA is the appropriate out-of-network rate for the qualified IDR item or service under consideration. Therefore, in determining which offer to select, these interim final rules provide that the certified IDR entity must select the offer closest to the QPA, unless credible information presented by the parties rebuts that presumption and clearly demonstrates the QPA is materially different from the appropriate out-of-network rate, as discussed earlier in this section of the preamble.

The Departments clarify that it is not the role of the certified IDR entity to determine whether the QPA has been calculated by the plan or issuer correctly, to make determinations of medical necessity, or review denials of coverage.

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Rather, the certified IDR entity is responsible for considering only the information presented by the parties to determine whether either party has presented credible information regarding additional circumstances, following the requirements set forth in paragraphs 26 CFR 54.9816-8T(c)(4)(iii)(B) through (D), 29 CFR 2590.716-8(c)(4)(iii)(B) through (D), and 45 CFR 149.510(c)(4)(iii)(B) through (D), demonstrating that the QPA is materially different from the appropriate out-of-network rate, in order to rebut the presumption that the QPA is the appropriate out-of-network rate. For batched items and services, the certified IDR entity may select different offers, from either or both parties, when the QPAs for the qualified IDR items or services within the batch are different. The certified IDR entity may do so even if it does not select the offer closest to the QPA for a particular qualified IDR item or service due to the factors listed later in this section of the preamble, and instead selects the offer closest to the QPA for other qualified IDR items and services within the batch.

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However, if either the certified IDR entity or one of the parties believes the QPA has not been calculated in accordance with the requirements in 26 CFR 54.9816-6T, 29 CFR 2590.716-6, or 45 CFR 149.140, the Departments encourage the certified IDR entity or the provider or facility to notify the applicable state or federal authority, or submit a complaint against the plan or issuer as set forth in 26 CFR 54.9816-7T, 29 CFR 2590.716-7, or 45 CFR 149.150, as applicable.

In the Departments' view, the requirements set forth in these interim final rules regarding which offer a certified IDR entity must select, based on the presumption that the QPA is the appropriate payment amount and on the parties' ability to rebut that presumption, will help promote efficiency and predictability in the Federal IDR process, and will increase the likelihood that a certified IDR entity will generally select the offer closest to the QPA. While the QPA is the presumptive factor, the Departments are of the view that a clear standard indicating how a certified IDR entity may select an offer that is not closest to the QPA is necessary to help ensure consistency in how different certified IDR entities evaluate offers, which will help ensure that the Federal IDR process yields predictable outcomes and reduces administrative costs. Establishing a standard framework for certified IDR entities to evaluate factors furthers the intent of these interim final

rules to create equity and consistency in the Federal IDR process and aligns with other policies set forth in these interim final rules, such as the conflict-of-interest standards and the certification standards for IDR entities. Ensuring that all certified IDR entities apply the same standards will help ensure that the Federal IDR process is appropriately predictable, fair, and equitable.

Although these interim final rules establish the QPA as the presumptive factor, these interim final rules and the underlying statute also specify additional circumstances that certified IDR entities must consider in selecting an offer, if a party submits information about the additional circumstance that the certified IDR entity determines is credible. These interim final rules also require that the parties provide certain information to the certified IDR entity, described previously in this preamble, regarding practice size, practice specialty or type; information about the plan or issuer's coverage area; information about the QPA; and, if applicable, information showing that the Federal IDR process is inapplicable to the dispute. In addition, the certified IDR entity may request additional information relating to the parties' offers and must consider credible information submitted to determine if it demonstrates that the QPA is materially different from the appropriate out-of-network rate (unless the information relates to a factor that the certified IDR entity is prohibited from considering).

Regarding those factors, first, to the extent credible information is submitted by a party, the certified IDR entity must consider whether the credible information about the level of training, experience, and quality and outcome measurements (such as those endorsed by the consensus-based entity authorized under section 1890 of the Social Security Act) of the provider or facility that furnished the qualified IDR item or service clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate for the qualified IDR item or service. In order for a certified IDR entity to consider this additional information submitted by a party, the credible information must clearly demonstrate that the QPA failed to take into account that the experience or level of training of a provider was necessary for providing the qualified IDR item or service to the patient or that the experience or training made an impact on the care that was provided. The Departments are of the view that qualified IDR items or services should not necessitate an out-of-network rate higher than the offer closest to the QPA, simply based on the level of experience or training of a provider, as this would lead to an increase in prices without a valid reason and does not align with the goals of the No Surprises Act. For instance, the out-of-network payment amount for the simple repair of a superficial wound (CPT codes 12001-12007) in most cases would not necessitate a rate higher than the QPA just because a provider has 30 years of experience versus 10 years of experience. Alternatively, if the plan's or issuer's contracted rates included risk-sharing, bonus, penalty, or other incentive-based or retrospective payments that were excluded for purposes of calculating the QPA for the items and services as required by the July 2021 interim final rules, a party may provide evidence as to why the provider's or facility's quality or outcome measures support an out-of-network rate that is different from the QPA and the certified IDR entity should consider whether this requires selecting an out-of-network rate that is higher (in the case of a bonus) or lower (in the case of a penalty) than the offer closest to the QPA.

Second, to the extent credible information is submitted by a party, the certified IDR entity must consider whether the credible information about the market share held by the nonparticipating provider or facility or the plan (including, for self-insured plans, the market share of their third-party administrator (TPA) in instances where the self-insured plan relies on the TPA's networks) or issuer in the geographic region in which the qualified IDR item or service was provided, clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate for the qualified IDR item or service. Research suggests that the market dominance of a provider or facility, or that of a plan or issuer, can drive reimbursement rates up or down in a given region.

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For instance, a plan or issuer having the majority of the market share in a geographic region may signal a QPA that is unreasonably low, as plans and issuers with a large market share may drive down rates,

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in which case an out-of-network rate higher than the offer closest to the QPA may be appropriate. Alternatively, a provider having the majority of the market share in a geographic region may signal a QPA that is unreasonably high, as providers with a large market share may drive up rates, in which case an out-of-network rate lower than the offer closest to the QPA may be appropriate.

32

Schwartz, K., Lopez, E., Rae, M., Neuman, T. What We Know About Provider Consolidation. Kaiser Family Foundation. September 2020.

https://www.kff.org/health-costs/issue-brief/what-we-know-about-provider-consolidation/.

33

See Richard M. Scheffler and Daniel R. Arnold. “Insurer Market Power Lowers Prices in Numerous Concentrated Provider Markets.” Health Affairs. 2017 36:9, 1539-1546; Glenn Melnick, Yu-Chu Shen and Vivian Wu. “The Increased Concentration Of Health Plan Markets Can Benefit Consumers Through Lower Hospital Prices.” Health Affairs 30, no. 9.

Third, to the extent credible information is submitted by a party, the certified IDR entity must consider whether the credible information about patient acuity or the complexity of furnishing the qualified IDR item or service to the participant, beneficiary, or enrollee clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate for the qualified IDR item or service. In many cases, because the plan or issuer is required to calculate the QPA using median contracted rates for service codes, as well as modifiers, if applicable, and because service codes and modifiers reflect patient acuity and the complexity of the service provided,

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these factors will already be reflected in the QPA. Therefore, the Departments anticipate that there would only be rare instances in which the QPA would not adequately account for the acuity of the patient or complexity of the service. For example, if the complexity of a case is an outlier such that the time or intensity of care exceeds what is typical for a service code, the certified IDR entity may conclude that the QPA does not adequately take the factor into account. Similarly, the QPA for a qualified IDR item or service may be considered too high for items or services that become less complex or are furnished more frequently over time, such as items for which the QPA reflects reimbursement for a product with a patent that expires after 2019, in instances where the QPA is based off the median of the contracted rates from 2019. A certified IDR entity may also conclude that the QPA does not adequately account for patient acuity, or the complexity of furnishing the qualified IDR item or service in instances where the parties disagree on what service code or modifier accurately describes the qualified IDR item or service. For instance, the Departments are aware that some plans and issuers review claims and alter the service code or modifier submitted by the provider or facility to another service code or modifier that the plan or issuer determines to be more appropriate (a practice commonly referred to as “downcoding” when the adjustment

results in lower reimbursement).

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If a plan or issuer has altered the service code or modifier(s) for a submitted claim and applies a QPA that uses a different service code or modifier(s) than the service code or modifier(s) submitted by the provider or facility, the provider or facility could submit credible information to the certified IDR entity demonstrating that the QPA applied by the plan or issuer to the claim is based on a service code or modifier that did not properly encompass patient acuity, the complexity of furnishing the qualified IDR item or service. If the certified IDR entity agrees that either of the parties have presented credible information that clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate, and adequately takes into account the considerations allowed under 26 CFR 54.9816-8T(c)(4)(iii)(B) through (D), 29 CFR 2590.716-8(c)(4)(iii)(B) through (D), and 45 CFR 149.510(c)(4)(iii)(B) through (D), then it could select either offer, but must select the offer that the certified IDR entity determines best represents the value of the qualified IDR item or service.

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34

https://www.medicalbillingandcoding.org/cpt-modifiers/.

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The Departments clarify that the July 2021 interim final rules do not require the plan or issuer to calculate the participant's, beneficiary's, or enrollee's cost sharing using a QPA for the service code submitted by the provider or facility. The plan or issuer could instead calculate the participant's, beneficiary's, or enrollee's cost sharing using a QPA for the service code that the plan or issuer determined was more appropriate. However, the QPA methodology under 26 CFR 54.9816-6T, 29 CFR 2590.716-6, and 45 CFR 149.140 requires plans and issuers to calculate the median contracted rate for an item or service using contracted rates for the same or similar item or service. A plan or issuer would be considered out of compliance with these requirements if the plan or issuer calculated a QPA using a service code that does not reasonably reflect the furnished item or service.

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The Departments note that in instances in which the certified IDR entity selects an offer based on a determination that a service code other than the one upon which the QPA was based more accurately describes the qualified IDR item or service, neither the plan or issuer nor provider or facility is permitted to adjust the participant's, beneficiary's, or enrollee's cost-sharing amount. The cost-sharing amount remains the same as originally calculated in accordance with 26 CFR 54.9816-4T(b)(3)(ii) and (iii), 29 CFR 2590.716-4(b)(3)(ii) and (iii), and 45 CFR 149.110(b)(3)(ii) and (iii); 26 CFR 54.9816-5T(c)(1) and (2), 29 CFR 2590.717-1(c)(1) and (2), and 45 CFR 149.120(c)(1) and (2); or 26 CFR 54.9817-1T(b)(1) and (2), 29 CFR 2590.717-1(b)(1) and (2), and 45 CFR 149.130(b)(1) and (2).

Fourth, to the extent credible information is submitted by a party, the certified IDR entity must also consider whether the credible information about the teaching status, case mix, and scope of services of the nonparticipating facility, clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate for the qualified IDR item or service. Similar to the other factors, it is the view of the Departments that the QPA, which is intended to reflect the market-driven rate, should be considered the prevailing rate unless a party provides credible information that the characteristic of the teaching status, case mix, or scope of services of the nonparticipating facility was in some way critical to the delivery of the qualified IDR item or service, and not adequately accounted for in the QPA, thereby rebutting the presumption that the QPA is the appropriate out-of-network rate. For example, a certified IDR entity could consider the trauma level of a hospital when the dispute involves trauma care or qualified IDR items or services that could not be performed at a lower-level hospital, but only to the extent the QPA does not otherwise reflect this factor. The Departments seek comment on whether additional requirements should be considered to address any potentially abusive scenarios, including scenarios in which parties could potentially distort information that informs the enumerated considerations, such as overestimating the teaching experience of providers at the facility or upcoding the costs for items or services, and seek comment on the potential for gaming of the Federal IDR process.

Fifth, to the extent credible information is submitted by a party, the certified IDR entity must also consider whether the credible information about any demonstrations of good faith efforts (or lack thereof) made by the nonparticipating provider, nonparticipating facility, or nonparticipating provider of air ambulance services or the plan or issuer, as applicable, to enter into network agreements and, if applicable, contracted rates between the provider or facility and the plan or issuer, as applicable during the previous 4 plan years, clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate for the qualified IDR item or service. For example, a certified IDR entity must consider what the contracted rate might have been had the good faith negotiations resulted in the nonparticipating provider, facility, or provider of air ambulance services being in-network, if a party is able to provide related credible information of good faith efforts or the lack thereof.

Beyond these enumerated factors, the certified IDR entity must also generally consider additional information submitted by a party, provided the information is credible and relates to the offer submitted by either party. The certified IDR entity is not permitted to consider that information if it includes information on factors described in 26 CFR 54.9816-8T(c)(4)(v), 29 CFR 2590.716-8(c)(4)(v), and 45 CFR 149.510(c)(4)(v). This prohibition is discussed further in the next section of this preamble.

The Departments intend to provide additional guidance to certified IDR entities as necessary to clarify how the allowable factors should be considered and seek comment on this approach, including the appropriateness and scope of the factors previously discussed.

iii. Selection of Offer for Qualified IDR Services That Are Air Ambulance Services

The process for a certified IDR entity to select an offer in a dispute related to qualified IDR services that are air ambulance services is essentially the same as the process applicable to disputes related to qualified IDR items or services that are not air ambulance services. As with disputes related to qualified IDR items or services that are not air ambulance services, in determining which offer to select, these interim final rules provide that the certified IDR entity must consider the QPA for the applicable year for the qualified IDR services that are air ambulance services. However, Code section 9817(b)(5)(C), ERISA section 717(b)(5)(C), PHS Act section 2799A-2(b)(5)(C), and these interim final rules specify additional circumstances, in addition to the QPA, that the certified IDR entity must also consider in making the determination for air ambulance services, to the extent the parties provide credible information on such criteria. As with qualified IDR items or services, the certified IDR entity should only consider this information to the extent the certified IDR entity determines that either party submitted credible information that clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate. If a party presents credible information clearly demonstrating that the QPA is materially different from the appropriate out-of-network rate, the certified IDR entity must consider the additional circumstances.

To the extent credible information is submitted by a party, the certified IDR entity must consider whether credible information about the quality and outcomes measurements of the provider of air ambulance services that furnished the services clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate. Additionally, to the extent credible

information is submitted by a party, the certified IDR entity must consider whether credible information about the acuity of the condition of the participant, beneficiary, or enrollee receiving the services, or the complexity of providing the services to the participant, beneficiary, or enrollee, clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate. Further, to the extent credible information is submitted by a party, the certified IDR entity must consider credible information submitted by a party about whether the level of training, experience, and quality of medical personnel that furnished the air ambulance services clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate for the air ambulance services. To the extent a party submits any such credible information, the certified IDR entity must also consider whether credible information about the ambulance vehicle type, including the clinical capability level of the vehicle, clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate for the air ambulance services. In considering the ambulance vehicle type, the certified IDR entity may not consider whether the air ambulance is fixed wing or rotary wing, because the QPA will reflect this difference, as different service codes are used to bill for air ambulance services depending on whether fixed wing or rotary wing vehicles are used. Instead, the certified IDR entity should consider air ambulance vehicle type only to the extent that it is not already taken into account by the QPA.

To the extent a party submits any such credible information, the certified IDR entity must also consider whether credible information about the population density of the point of pick-up (as defined in 42 CFR 414.605) for the air ambulance (such as urban, suburban, rural, or frontier

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), clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate for a particular air ambulance service. Under the July 2021 interim final rules, the QPA is calculated by reference to the geographic region, which for air ambulance services distinguishes between one region containing all metropolitan statistical areas (as described by the U.S. Office of Management and Budget (OMB) and published by the U.S. Census Bureau) in a state and one region consisting of all other portions of the state, determined based on the point of pick-up (as defined in 42 CFR 414.605). If these geographic regions do not provide sufficient information, the QPA is calculated in reference to Census divisions, with one region consisting of all metropolitan statistical areas in each Census division, and one region consisting of all other portions of the Census division, determined at the point of pick-up. Therefore, the QPA for these geographic regions may already reflect the population density of the pick-up location. Nevertheless, in certain circumstances, the QPA for air ambulance services may not adequately capture the population density, due to additional distinctions, such as between metropolitan areas within a state, or between rural and frontier areas. To the extent that there is credible information about additional circumstances clearly demonstrating that the QPA is materially different from the appropriate out-of-network rate for a particular air ambulance service, the certified IDR entity must consider these distinctions.

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For these purposes, the term “frontier” should be understood as including those ZIP codes where the point of pick-up is in a rural area determined to be in the lowest 25 percent of rural population arrayed by population density (also known as super rural ZIP codes for purposes of determining ground ambulance base rates).

See

42 CFR 414.610(c)(5)(ii) and 42 CFR 414.626(c)(1)(ii).

Finally, to the extent credible information is submitted by a party, the certified IDR entity must consider whether credible information about demonstrations of good faith efforts (or lack thereof) made by the nonparticipating provider of air ambulance services or the plan or issuer to enter into network agreements, as well as contracted rates between the provider and the plan or issuer, as applicable, during the previous 4 plan years, clearly demonstrate that the QPA is materially different from the appropriate out-of-network rate for such air ambulance services.

As with qualified IDR items or services that are not air ambulance services, the certified IDR entity must begin with the presumption that the amount closest to the QPA is the appropriate out-of-network rate for the air ambulance service under consideration and select the offer closest to the QPA, unless credible information submitted by the parties clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate, or unless the offers are equally distant from the QPA but in opposing directions. In those cases, the certified IDR entity must select the offer that the certified IDR entity determines best represents the value of the qualified IDR items or services, which could be either party's offer.

iv. Prohibition on Consideration of Certain Factors

Code section 9816(c)(5)(D), ERISA section 716(c)(5)(D), PHS Act section 2799A-1(c)(5)(D), and these interim final rules provide that the certified IDR entity may not consider certain factors in determining which offer is the out-of-network rate. First, the certified IDR entity may not consider usual and customary charges. This term, also known as usual, customary and reasonable charges, refers to the amount providers in a geographic area usually charge for the same or similar medical service.

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This provision also prohibits consideration of payment or reimbursement rates expressed as a proportion of usual and customary charges. Second, certified IDR entities cannot consider the amount that would have been billed to either a plan or issuer, or a participant, beneficiary, or enrollee by a provider, facility, or provider of air ambulance services if the provider, facility, or provider of air ambulance services were not subject to a prohibition on balance billing. The Departments recognize that 45 CFR 149.410, 149.420, and 149.440 prohibit providers, facilities, and providers of air ambulance services from billing participants, beneficiaries, or enrollees for the full charge for items and services to which these provisions apply, but do not limit the amount that may be billed to the plan or issuer. However, the Departments are of the view that the intent of Code section 9816(c)(5)(D), ERISA section 716(c)(5)(D), and PHS Act section 2799A-1(c)(5)(D) is to prohibit the certified IDR entity from considering the billed charge for a qualified IDR item or service. Therefore, the Departments interpret this prohibition to include consideration of billed charges to the plan or issuer for the qualified IDR item or service. Finally, certified IDR entities must not consider payment or reimbursement rates payable by a public payor, in whole or in part, for items and services furnished by the providers, facilities, or providers of air ambulance services. This prohibition includes payments or reimbursement rates under the Medicare program under title XVIII of the Social Security Act, the Medicaid program under title XIX of the Social Security Act, the Children's Health Insurance Program under title XXI of the Social

Security Act, and the TRICARE program under chapter 55 of title 10, United States Code, chapter 17 of title 38, United States Code. This prohibition also applies to payment rates for demonstration projects under section 1115 of the Social Security Act, as these are payment or reimbursement rates payable by a public payor. This provision prohibits consideration of payment or reimbursement rates expressed as a proportion of rates payable by public payors. Thus, the certified IDR entity must not consider, for example, which offer is closest to 150 percent of the Medicare reimbursement rate for a certain item or service.

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The Departments solicit comment regarding whether any additional guidance or clarification is needed on these prohibited factors.

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See Uniform Glossary of Coverage and Medical Terms, available at

https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/sbc-uniform-glossary-of-coverage-and-medical-terms-new.pdf

and

https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/Uniform-Glossary-01-2020.pdf.

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The Departments recognize that contracted rates are frequently based off a percentage of the Medicare payment rate. The Departments clarify that even in instances where the QPA is calculated using contracted rates that are expressed as a proportion of rates payable by a public payor (or other prohibited considerations), the certified IDR entity is required to consider the QPA. In the Departments' view, this does not constitute consideration of the payment or reimbursement rate payable by a public payor.

v. Written Decision

Once the certified IDR entity has made a determination, the certified IDR entity must provide the underlying rationale for its determination in a written decision submitted to the parties and the Departments. The certified IDR entity must submit the decision and the underlying rationale through the Federal IDR portal in a form and manner specified by the Departments in guidance. This rationale will inform the reports required from the Departments under Code section 9816(c)(7), ERISA section 716(c)(7), and PHS Act section 2799A-1(c)(7), and will assist in ensuring that the certified IDR entities comply with the requirements of this process, including the requirements of 26 CFR 54.9816-8T(c)(4)(iii), 29 CFR 2590.716-8(c)(4)(iii), and 45 CFR 149.510(c)(4)(iii). If a certified IDR entity does not choose the offer closest to the QPA, the written decision's rationale must include a detailed explanation of the additional considerations relied upon, whether the information about those considerations submitted by the parties was credible, and the basis upon which the certified IDR entity determined that the credible information demonstrated that the QPA is materially different from the appropriate out-of-network rate.

v. Effect of Determination

Code section 9816(c)(5)(E), ERISA section 716(c)(5)(E), PHS Act section 2799A-1(c)(5)(E), and these interim final rules provide that a determination made by a certified IDR entity is binding upon all parties involved, in the absence of fraud or evidence of intentional misrepresentation of material facts to the certified IDR entity by any party regarding the claim. A certified IDR entity's determination is not subject to judicial review, except as set forth in 9 U.S.C. 10(a)(1)-(4).

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Subparagraphs (1) through (4) of 9 U.S.C. 10(a) provide that courts may vacate an arbitration: where the award was procured by corruption, fraud, or undue means; where there was evident partiality or corruption in the arbitrators; where the arbitrators were guilty of misconduct in refusing to postpone the hearing, in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior prejudicing the rights of the parties; or where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award was not made.

Under Code section 9816(c)(5)(E)(ii), ERISA section 716(c)(5)(E)(ii), PHS Act section 2799A-1(c)(5)(E)(ii), and these interim final rules, when a certified IDR entity makes a determination, the party that submitted the initial Notice of IDR Initiation may not submit a subsequent Notice of IDR Initiation involving the same other party with respect to a claim that is the same as or similar to a qualified IDR item or service that was the subject of the initial determination during the 90-calendar-day period following the initial determination. The Departments interpret the 90-day period in the statute to refer to 90 calendar days. The Departments are of the view that this interpretation balances the statutory intent to provide for a “cooling-off” period between disputes that relate to the same or similar items or services while ensuring that the initiating party is able to resolve outstanding payment disputes through the Federal IDR process as soon as permitted under the statute. The Departments interpret the statutory phrase of “such item or service” in this context to refer to the same or similar item or service, in order to maintain consistency with the statutory provisions related to the QPA and the provisions allowing batching of items and services. Additionally, such an interpretation clarifies the meaning of the statutory provisions at Code section 9816(c)(5)(E)(iii), ERISA section 716(c)(5)(E)(iii), and PHS Act section 2799A-1(c)(5)(E)(iii), which allow subsequent submission of such an item or service only if the open negotiation period ended during such a 90-day period (as the open negotiation period for the particular item or service under dispute would have already ended). For claims for the same or similar item or service for which the end of the open negotiation period occurs during the 90-calendar-day suspension period, after the end of the 90-calendar-day suspension period, either party may initiate the Federal IDR process for the items and services affected by the suspension. For these items or services, the initiating party must submit the Notice of IDR Initiation within 30 business days following the end of the 90-calendar-day suspension period, as opposed to the standard 4-business-day period following the end of the open negotiation period. The 30-

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