Federal Independent Dispute Resolution Operations

OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 890

RIN 3206-AO48

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

[REG-122319-22]

RIN 1545-BQ55

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2590

RIN 1210-AC17

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

45 CFR Part 149

[CMS-9897-P]

RIN 0938-AV15

Federal Independent Dispute Resolution Operations

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:

Notice of proposed rulemaking.

SUMMARY:

This document sets forth proposed rules related to certain provisions of the No Surprises Act regarding the Federal independent dispute resolution (IDR) process, which was established as part of the Consolidated Appropriations Act, 2021 (CAA). These proposed rules would set forth new requirements relating to the disclosure of information that group health plans and health insurance issuers offering group or individual health insurance coverage must include along with the initial payment or notice of denial of payment for certain items and services subject to the surprise billing protections in the No Surprises Act. These proposed rules would also require plans and issuers to communicate information by using claim adjustment reason codes (CARCs) and remittance advice remark codes (RARCs), as specified in guidance, when providing any paper or electronic remittance advice to an entity that does not have a contractual relationship with the plan or issuer. This document also proposes to amend certain requirements related to the open negotiation period preceding the Federal IDR process, the initiation of the Federal IDR process, the Federal IDR dispute eligibility review, and the payment and collection of administrative fees and certified IDR entity fees. This document also proposes to define bundled payment arrangements, amend requirements related to batched items and services, and amend the rules for extensions of timeframes due to extenuating circumstances. Additionally, this document proposes to require plans and issuers to register in the Federal IDR portal. In accordance with Federal law, a summary of these rules may be found at

https://www.regulations.gov/.

DATES:

To be assured consideration, comments must be received at one of the addresses provided below by January 2, 2024.

ADDRESSES:

Written comments may be submitted to the addresses specified below. Any comment that is submitted will be shared among the Department of the Treasury, the Department of Labor, the Department of Health and Human Services (the Departments), and the Office of Personnel Management. 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 0938-AV15. Because of staff and resource limitations, the Departments cannot accept comments by facsimile (FAX) transmission.

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

1.

Electronically.

You may submit electronic comments on this regulation to

https://www.regulations.gov.

Follow the “Submit a comment” instructions.

2.

By regular mail.

You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-9897-P, P.O. Box 8016, Baltimore, MD 21244-8016.

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

3.

By express or overnight mail.

You may send written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-9897-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

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

SUPPLEMENTARY INFORMATION

section.

FOR FURTHER INFORMATION CONTACT:

Padma Babubhai Shah, Office of Personnel Management, at 202-606-4056; Shira B. McKinlay, Internal Revenue Service, Department of the Treasury, at 202-317-5500; Elizabeth Schumacher or Shannon Hysjulien, Employee Benefits Security Administration, Department of Labor, at 202-693-8335; Zarah Ghiasuddin or Bryan Kirk, Centers for Medicare & Medicaid Services, Department of Health and Human Services, at 301-492-4308.

Customer Service Information:

Information from the Office of Personnel Management (OPM) on health benefits plans offered under the Federal Employees Health Benefits (FEHB) Program can be found on the OPM website (

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

). Individuals interested in obtaining information from the Department of Labor (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 the Department of Health and Human Services (HHS) on private health insurance coverage and coverage provided by non-Federal governmental group health plans can be found on the Centers for Medicare & Medicaid Services (CMS) website (

http://www.cms.gov/marketplace

), information on health care reform can be found at

http://www.healthcare.gov,

and information on surprise medical bills can be found at

http://www.cms.gov/nosurprises.

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. The Departments post comments received before the close of the comment period on the following website as soon as possible after they have been received:

http://www.regulations.gov.

Follow the search instructions on that website to view public comments. The Departments will not post on

Regulations.gov

public comments that make threats to individuals or institutions or suggest that the commenter will take actions to harm an individual. The Departments continue to encourage individuals not to submit duplicative comments. The Departments will post acceptable comments from multiple unique commenters even if the content is identical or nearly identical to other comments.

I. Background

A. Preventing Surprise Medical Bills and Establishing the Federal IDR Process Under the Consolidated Appropriations Act, 2021

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

1

Title I, also known as the No Surprises Act, and title II (Transparency) of Division BB of the CAA amended chapter 100 of the Internal Revenue Code (Code), Part 7 of the Employee Retirement Income Security Act (ERISA), and title XXVII of the Public Health Service Act (PHS Act). The No Surprises Act provides Federal protections against surprise billing by limiting out-of-network cost sharing and prohibiting balance billing in many of the circumstances in which surprise bills most frequently arise. In particular, the No Surprises Act added new provisions applicable to group health plans and health insurance issuers offering group or individual health insurance coverage. Section 102 of the No Surprises Act added section 9816 of the Code, section 716 of ERISA, and section 2799A-1 of the PHS Act, which contain limitations on cost sharing and requirements regarding the timing of initial payments and notices of denial of payment by plans and issuers for emergency services furnished by nonparticipating providers and nonparticipating emergency facilities, and for non-emergency services furnished by nonparticipating providers with respect to patient visits to participating health care facilities, generally defined as hospitals, hospital outpatient departments, critical access hospitals, and ambulatory surgical centers.

2

1

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

2

Section 102(d)(1) of the No Surprises Act amended the Federal Employees Health Benefits Act, 5 U.S.C. 8901

et seq.,

by adding a new subsection (p) to 5 U.S.C. 8902. Under this new provision, each FEHB Program contract must require a carrier to comply with requirements described in sections 9816 and 9817 of the Code, sections 716 and 717 of ERISA, and sections 2799A-1 and 2799A-2 of the PHS Act (as applicable) in the same manner as these provisions apply with respect to a group health plan or health insurance issuer offering group or individual health insurance coverage.

Section 103 of the No Surprises Act established a Federal IDR process that plans and issuers and nonparticipating providers and facilities may utilize to resolve certain disputes regarding out-of-network rates under section 9816 of the Code, section 716 of ERISA, and section 2799A-1 of the PHS Act.

Section 105 of the No Surprises Act added section 9817 of the Code, section 717 of ERISA, and section 2799A-2 of the PHS Act. These sections contain limitations on cost sharing and requirements for the timing of initial payments and notices of denial of payment by plans and issuers for air ambulance services furnished by nonparticipating providers of air ambulance services and allow plans and issuers and nonparticipating providers of air ambulance services to utilize the Federal IDR process.

The No Surprises Act also added provisions to title XXVII of the PHS Act in a new part E that apply to health care providers, facilities, and providers of air ambulance services, such as prohibitions on balance billing for certain items and services and requirements related to disclosures about balance billing protections.

The Departments of the Treasury, Labor, and HHS (the Departments), along with the Office of Personnel Management (OPM), are issuing regulations in phases that implement provisions of the No Surprises Act and have issued multiple rulemakings since 2021 to implement various provisions. More specifically relevant to this proposed rulemaking, the Departments and OPM issued interim final rules (July 2021 interim final rules

3

and October 2021 interim final rules),

4

and the Departments issued final rules (August 2022 final rules)

5

implementing provisions of sections 9816 and 9817 of the Code, sections 716 and 717 of ERISA, and sections 2799A-1 and 2799A-2 of the PHS Act. These rules implement provisions to protect consumers from surprise medical bills for emergency services, non-emergency services furnished by nonparticipating providers with respect to patient visits to participating facilities

6

in certain circumstances, and air ambulance services furnished by nonparticipating providers of air ambulance services. These rules also implement provisions to establish a Federal IDR process to determine payment amounts when there is a dispute between plans or issuers and providers, facilities, or providers of air ambulance services about the out-of-network rate for these services in cases where a specified State law or an applicable All-Payer Model Agreement does not provide a method for determining the total amount payable.

3

86 FR 36872 (July 13, 2021).

4

86 FR 55980 (Oct. 7, 2021).

5

87 FR 52618 (Aug. 26, 2022).

6

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

The July 2021 interim final rules and October 2021 interim final rules generally apply to plans and issuers (including grandfathered health plans) for plan years (in the individual market, policy years) beginning on or after January 1, 2022, and to health care providers, facilities, and providers of air ambulance services for items and services furnished during plan years (in the individual market, policy years) beginning on or after January 1, 2022.

7

The August 2022 final rules became effective October 25, 2022, and are applicable for items and services provided or furnished on or after October 25, 2022, for plan years (in the individual market, policy years) beginning on or after January 1, 2022. As discussed in sections I.D and I.F of this preamble, certain provisions of these rules relating to the methodology for calculating the qualifying payment amount (QPA), the information that a certified IDR entity must consider in making a payment determination, the establishment of the administrative fee to use the IDR process, and certain restrictions on the qualified IDR items or services that may be considered jointly as part of a batched determination have been vacated

8

by

the United States District Court for the Eastern District of Texas (District Court). On September 26, 2023, the Departments published the Federal IDR Process Administrative Fee and Certified IDR Entity Fee Ranges Proposed Rules (IDR Process Fees proposed rules)

9

to amend the administrative fee and certified IDR entity fee provisions in the October 2021 interim final rules to provide additional guidance and promote transparency in the administrative fee calculation and certified IDR fee ranges. If finalized, the rules would apply for disputes initiated on or after the later of the effective date or January 1, 2024.

7

The interim final rules also include interim final regulations under 5 U.S.C. 8902(p) issued by OPM that specify how certain provisions of the No Surprises Act apply to health benefit plans offered by carriers under the Federal Employees Health Benefits Act. These provisions apply to carriers in the FEHB Program with respect to contract years beginning on or after January 1, 2022. The disclosure requirements at 45 CFR 149.430 regarding patient protections against balance billing are applicable as of January 1, 2022.

8

See Tex. Med. Ass'n, et al.

v.

U.S. Dep't of Health and Human Servs.,

587 F. Supp. 3d 528 (E.D. Tex. 2022) (

TMA I

),

Tex. Med. Ass'n, et al.

v.

U.S. Dep't of Health and Human Servs.,

Case No. 6:22-cv-372 (E.D. Tex.) (Feb. 6, 2023) (

TMA II

),

Tex. Med. Ass'n, et al.

v.

U.S. Dep't of Health and

Human Servs.,

Case No. 6:22-cv-450-JDK (E.D. Tex. Aug. 24, 2023) (

TMA III

), and

Tex. Med. Ass'n, et al.

v.

U.S. Dep't of Health and Human Servs.,

Case No. 6:23-cv-00059-JDK, (E.D. Tex. Aug. 3, 2023) (

TMA IV

).

9

88 FR 65888 (Sept. 26, 2023).

B. July 2021 Interim Final Rules

The July 2021 interim final rules implement sections 9816(a)-(b) and 9817(a) of the Code, sections 716(a)-(b) and 717(a) of ERISA, and sections 2799A-1(a)-(b), 2799A-2(a), 2799A-7, 2799B-1, 2799B-2, 2799B-3, and 2799B-5 of the PHS Act.

The No Surprises Act directs the Departments to specify the information that a plan or issuer must share with a nonparticipating provider or nonparticipating emergency facility when determining the QPA. Therefore, 26 CFR 54.9816-6T(d), 29 CFR 2590.716-6(d), and 45 CFR 149.140(d) require that plans and issuers make certain disclosures about the QPA with each initial payment or notice of denial of payment, and that plans and issuers provide certain additional information upon the request of the provider, facility, or provider of air ambulance services. This information must be provided in writing, either on paper or electronically, to a nonparticipating provider, facility, or provider of air ambulance services, as applicable, when the QPA serves as the recognized amount.

With an initial payment or notice of denial of payment, a plan or issuer must provide the QPA for each item or service involved, as well as a statement certifying that based on the determination of the plan or issuer: (1) the QPA applies for purposes of the recognized amount (or, in the case of air ambulance services, for calculating the participant's, beneficiary's, or enrollee's cost sharing), and (2) each QPA shared with the provider, facility, or provider of air ambulance services was determined in compliance with the methodology outlined in the July 2021 interim final rules.

10

10

86 FR 36888; 26 CFR 54.9816-6T(d)(1)(iii), 29 CFR 2590.716-6(d)(1)(iii), and 45 CFR 149.140(d)(1)(iii). For guidance regarding the certification statement in light of the decision in

TMA III, see

U.S. Department of Health and Human Services, U.S. Department of Labor, U.S. Department of the Treasury, Office of Personnel Management,

FAQs about Consolidated Appropriations Act, 2021 Implementation Part 62

(Oct. 6, 2023), Q3, available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-62.pdf

and

https://www.cms.gov/files/document/faqs-part-62.pdf.

A plan or issuer is also required to provide a statement that if the provider, facility, or provider of air ambulance services wishes to initiate a 30-day open negotiation period for purposes of determining the amount of total payment, 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-day open negotiation period does not result in an agreement on the payment amount, generally, the provider, facility, or provider of air ambulance services may initiate the Federal IDR process within 4 days after the end of the open negotiation period.

11

The plan or issuer must provide contact information, including a telephone number and email address, for the appropriate office or person for the provider, facility, or provider of air ambulance services to contact to initiate open negotiation for purposes of determining a payment amount (inclusive of cost sharing) for the item or service.

12

11

86 FR 36899; 26 CFR 54.9816-6T(d)(1)(iv), 29 CFR 2590.716-6(d)(1)(iv), and 45 CFR 149.140(d)(1)(iv).

12

86 FR 36899; 26 CFR 54.9816-6T(d)(1)(v), 29 CFR 2590.716-6(d)(1)(v), and 45 CFR 149.140(d)(1)(v).

In addition, upon request by the provider or facility,

13

a plan or issuer must provide in a timely manner information about whether the QPA includes contracted rates that were not set on a fee-for-service basis for the specific items and services and whether the QPA for those items and services was determined using underlying fee schedule rates or a derived amount.

14

If an eligible database was used to determine the QPA, upon request by the provider or facility, the plan or issuer must provide information to identify which database was used.

15

Similarly, if a related service code was used to determine the QPA for an item or service billed under a new service code, upon request by the provider or facility the plan or issuer must provide information to identify which related service code was used.

16

13

As discussed further in section II.C. of this preamble, this proposed rule would add a reference to providers of air ambulance services in 26 CFR 54.9816-6T(d)(2), 29 CFR 2590.716-6(d)(2), and 45 CFR 149.140(d)(2).

14

26 CFR 54.9816-6T(d)(2)(i), 29 CFR 2590.716-6(d)(2)(i), and 45 CFR 149.140(d)(2)(i). Under the July 2021 interim final rules, plans and issuers are required to calculate the QPA using underlying fee schedule rates or derived amounts when the plan or issuer has sufficient information to calculate the median of its contracted rates but the payments under the contractual agreements are not on a fee-for-service basis (such as bundled or capitation payments). 86 FR 36893; 26 CFR 54.9816-6T(b)(2)(iii), 29 CFR 2590.716-6(b)(2)(iii), 45 CFR 149.140(b)(2)(iii). Plans and issuers are not otherwise permitted to use underlying fee schedule rates or derived amounts to calculate the QPA.

15

86 FR 36899; 26 CFR 54.9816-6T(d)(2)(ii), 29 CFR 2590.716-6(d)(2)(ii), and 45 CFR 149.140(d)(2)(ii).

16

86 FR 36899; 26 CFR 54.9816-6T(d)(2)(iii), 29 CFR 2590.716-6(d)(2)(iii), and 45 CFR 149.140(d)(2)(iii).

Finally, upon request by the provider or facility, the plan or issuer must provide a statement, if applicable, that the plan's or issuer's contracted rates include risk-sharing, bonus, penalty, or other incentive-based or retrospective payments or payment adjustments that were excluded for purposes of calculating the QPA for the items and services involved.

17

17

86 FR 36899; 26 CFR 54.9816-6T(d)(2)(iv), 29 CFR 2590.716-6(d)(2)(iv), and 45 CFR 149.140(d)(2)(iv).

C. October 2021 Interim Final Rules and Related Guidance

The October 2021 interim final rules implement the Federal IDR process under sections 9816(c) and 9817(b) of the Code, sections 716(c) and 717(b) of ERISA, and sections 2799A-1(c) and 2799A-2(b) of the PHS Act. The Federal IDR process may be used by 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 certain items and services. These are emergency services, non-emergency services furnished by nonparticipating providers for patient visits to certain participating facilities (unless an individual has been provided notice and waived the individual's balance billing protections, in accordance with 45 CFR 149.410 or 149.420, as applicable), and air ambulance services furnished by nonparticipating providers of air ambulance services, for situations in which neither an All-Payer Model Agreement under section 1115A of the Social Security Act nor a specified State law as defined in 26 CFR 54.9816-3T, 29 CFR 2590.716-3, and 45 CFR 149.30 applies.

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

rules include requirements governing the 30-business-day open negotiation period; the initiation of the Federal IDR process; the Federal IDR process following initiation, including the selection of a certified IDR entity, submission of offers, payment determinations, and written decisions; costs of the Federal IDR process; certification of IDR entities, including the denial or revocation of certification of an IDR entity; and the collection of information related to the Federal IDR process from certified IDR entities to satisfy reporting requirements under the statute.

To be eligible for the Federal IDR process, the subject of the dispute must be a qualified IDR item or service as defined in 26 CFR 54.9816-8T(a)(2)(xi), 29 CFR 2590.716-8(a)(2)(xi), and 45 CFR 149.510(a)(2)(xi). The October 2021 interim final rules define “qualified IDR item or service” to mean an emergency service furnished by a nonparticipating provider or nonparticipating facility subject to the protections of 26 CFR 54.9816-4T, 29 CFR 2590.716-4, or 45 CFR 149.110, for which the exception under 45 CFR 149.410(b) (regarding receipt of notice and consent to waive surprise billing protections) does not apply. A qualified IDR item or service may also be 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 exception under 45 CFR 149.420(c)-(i) (regarding receipt of notice and consent to waive surprise billing protections) does not apply. For an item or service to be considered a qualified IDR item or service, the provider, facility, or provider of air ambulance services or plan or issuer, as applicable, must submit a valid notice of IDR initiation through the Federal IDR portal for the item or service. The notice of IDR initiation is not valid if the 30-business-day 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 not elapsed or an agreement on the payment amount has been reached. The term “qualified IDR item or service” also includes air ambulance services furnished 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 elapsed, no agreement on the payment amount has been reached, and a valid notice of IDR initiation has been submitted after the 30-business-day open negotiation period has been satisfied.

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 an item or service submitted by the initiating party that is subject to the 90-calendar-day suspension period (also referred to as the “cooling-off 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) except to the extent that it is submitted during the subsequent 30-business-day period, as allowed under the October 2021 interim final rules.

18

18

In the case of a determination made by a certified IDR entity, the party that submitted the initial notification initiating the Federal IDR process may not submit a subsequent notification involving the same other party with respect to a claim for the same or similar item or service that was the subject of the initial notification during the 90-calendar-day period following the determination (the “cooling off period”).

The open negotiation period may be initiated by either 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.

19

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 and the item or service for which the payment is to be negotiated, the party initiating the open negotiation period must provide written notice to the other party of its intent to negotiate using a standardized form, referred to as an open negotiation notice. The open negotiation notice must include information sufficient to identify the item or service 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 the contact information of the party sending the open negotiation notice. The open negotiation notice must be sent during the 30-business-day period beginning on the day the initial payment or notice of denial of payment from the plan or issuer regarding such item or service was received 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. The 30-business-day open negotiation period begins on the day on which the open negotiation notice is first sent by a party.

19

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.

See

86 FR 36900-36901.

As stated in the preamble to the October 2021 interim final rules, parties should be able to provide effective notice because the parties have already made initial contact (that is, the provider, facility, or provider of air ambulance services has transmitted a bill to the plan or issuer, and the plan or issuer sent an initial payment or a notice of denial of payment to the provider, facility, or provider of air ambulance services).

20

The Departments encouraged the parties to take reasonable measures to ensure that actual notice is provided, such as by confirming that the email address is correct, and cautioned 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 or a certified IDR entity may determine that the 30-business-day open negotiation period has not begun. In such a 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 the October 2021 interim final rules. In guidance, the Departments clarified how a provider, facility, or provider of air ambulance services should proceed if the plan or issuer fails to disclose information necessary to initiate the open negotiation period when providing the initial payment or notice of denial of payment and whether providers, facilities, or providers of air ambulance services are required to use a plan's or issuer's online portal to submit an open negotiation notice.

21

20

86 FR 55980, 55990.

21

See

U.S. Department of Health and Human Services, U.S. Department of Labor, and U.S. Department of the Treasury

FAQs about Affordable

Care Act and Consolidated Appropriations Act, 2021 Implementation Part 55, Q20 and Q21

(Aug. 19, 2022), available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-55.pdf

and

https://www.cms.gov/files/document/faqs-part-55.pdf.

The October 2021 interim final rules provide that if the parties have not negotiated an agreement on 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.

22

To initiate the Federal IDR process, the initiating party must submit the standard notice of IDR initiation to the other party and to the Departments. As stated in the preamble of the October 2021 interim final rules, this notice must be provided to the Departments and the other party on the same day.

23

The notice of IDR initiation must include: (1) information sufficient to identify the qualified IDR items and services (and whether the qualified IDR items or services are designated as batched items and services), including the furnishing date(s) and location(s) of the item or service, the type of qualified IDR item or service (such as emergency services, post-stabilization professional services, hospital-based services), corresponding service and place-of-service code(s), the amount of cost sharing allowed, and the amount of the initial payment made by the plan or issuer for the qualified IDR item or service, 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 item or service was furnished; (4) the commencement date of the open negotiation period; (5) the initiating party's preferred certified IDR entity; (6) an attestation that the item or service is a qualified IDR item or service 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 as specified by the Departments.

24

The 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.

25

The Departments have developed a form that parties must use to satisfy this requirement to provide general information describing the Federal IDR process.

22

86 FR 55991; 26 CFR 54.9816-8T(b)(2)(i), 29 CFR 2590.716-8(b)(2)(i), and 45 CFR 149.510(b)(2)(i).

23

86 FR 55991.

24

26 CFR 54.9816-8T(b)(2)(iii)(A), 29 CFR 2590.716-8(b)(2)(iii)(A), and 45 CFR 149.510(b)(2)(iii)(A).

25

86 FR 55991.

Under section 9816(c)(1)(B) of the Code, section 716(c)(1)(B) of ERISA, and section 2799A-1(c)(1)(B) of the PHS Act, the date of initiation of the Federal IDR process is the date of the submission of the notice of IDR initiation or another 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 to the dispute and the Departments. The October 2021 interim final rules establish that the initiation date of the Federal IDR process is the date of receipt of the notice of IDR initiation by the Departments.

26

26

Id.

Under the October 2021 interim final rules, the plan or issuer and the nonparticipating provider, nonparticipating emergency facility, or nonparticipating provider of air ambulance services (as applicable) may jointly select a certified IDR entity no later than 3 business days following the date of the IDR initiation.

27

As previously stated, the initiating party will select its preferred certified IDR entity in the notice of IDR initiation. The party in receipt of the notice of IDR initiation (non-initiating party) may agree or object to the preferred certified IDR entity identified by the initiating party in the notice of IDR initiation. If the non-initiating party does not 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 non-initiating party objects, that party must timely notify the initiating party of the objection and propose an alternative preferred certified IDR entity. The initiating party must then agree or object to the alternative preferred certified IDR entity. If the initiating party fails to object to the alternative preferred certified IDR entity within 3 business days of the date of initiation of the Federal IDR process, the alternative preferred certified IDR entity proposed by the non-initiating party will be the selected certified IDR entity, provided that the certified IDR entity does not have a conflict of interest. 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. If the parties fail to jointly select a certified IDR entity, the Departments will then randomly select a certified IDR entity not later than 6 business days after the date of initiation of the Federal IDR process and will notify the parties of the selection. In addition, in instances in which the non-initiating party believes that an item or service is not eligible for the Federal IDR process, the non-initiating party must notify the Departments through the Federal IDR portal within the same timeframe that the notice of certified IDR entity selection or failure to select is required (or in other words, 4 business days after the date of initiation of the Federal IDR process) and provide information that demonstrates why an item or service is not eligible for the Federal IDR process.

27

86 FR 55991 through 55992, 26 CFR 54.9816-8T(c)(1)(i), 29 CFR 2590.716-8(c)(1)(i), and 45 CFR 149.510(c)(1)(i).

After being notified of selection (either by the parties or the Departments), certified IDR entities are required within 3 business days of selection to attest that they do not have a conflict of interest as specified under 26 CFR 54.9816-8T(c)(1)(ii), 29 CFR 2590.716-8(c)(1)(ii), and 45 CFR 149.510(c)(1)(ii). Certified IDR entities are also required to review the information submitted in the notice of IDR initiation and any additional requested information to determine whether the dispute is for a qualified IDR item or service, as defined in 26 CFR 54.9816-8T(a)(2)(xi), 29 CFR 2590.716-8(a)(2)(xi), and 45 CFR 149.510(a)(2)(xi), that is eligible for the Federal IDR process, including whether an All-Payer Model Agreement or specified State law applies. If an item or service is not a qualified IDR item or service eligible for the Federal IDR process, certified IDR entities must notify the Departments and the parties within 3 business days of making this determination.

The October 2021 interim final rules provide that, not later than 30 business days after the selection of a certified IDR entity, the certified IDR entity must select one of the offers submitted by either party to the dispute to be the out-of-network rate for the qualified IDR

item or service.

28

For each qualified IDR item or service, the total plan or coverage payment is the amount by which this out-of-network rate exceeds the cost-sharing amount for the qualified IDR item or service (with any initial payment made by the plan or issuer counted toward the total plan or coverage payment).

28

26 CFR 54.9816-8T(c)(4)(ii), 29 CFR 2590.716-8(c)(4)(ii), and 45 CFR 149.510(c)(4)(ii).

The October 2021 interim final rules also provided that, after considering the QPA, the statutory factors under sections 9816(c)(5)(C)(ii) and 9817(b)(5)(C)(ii) of the Code, sections 716(c)(5)(C)(ii) and 717(b)(5)(C)(ii) of ERISA, and sections 2799A-1(c)(5)(C)(ii) and 2799A-2(b)(5)(C)(ii) of the PHS Act, additional information requested by the certified IDR entity from the parties, and all of the additional credible information submitted by the parties that was not prohibited information under 26 CFR 54.9816-8T(c)(4)(v), 29 CFR 2590.716-8(c)(4)(v), and 45 CFR 149.510(c)(4)(v), the certified IDR entity must select the offer closest to the QPA, unless the certified IDR entity determined that the credible information submitted by the parties clearly demonstrated that the QPA was materially different from the appropriate out-of-network rate, or the offers were equally distant from the QPA but in opposing directions.

29

In those situations, the October 2021 interim final rules required the certified IDR entity to select the offer that the certified IDR entity determined best represented the value of the item or service, which could be either party's offer.

30

However, as discussed in sections I.D. and I.F. of this preamble, the District Court vacated portions of these rules related to certified IDR entity determinations.

31

29

86 FR 55995.

30

Id.

31

TMA I

and

TMA II.

The October 2021 interim final rules also provide that not later than 30 business days after the selection of the certified IDR entity, the certified IDR entity must notify parties to the dispute of the selection of the offer and provide a written decision,

32

which must be submitted to the parties and the Departments through the Federal IDR portal.

33

32

86 FR 55995, 26 CFR 54.9816-8T(c)(4)(ii), 29 CFR 2590.716-8(c)(4)(ii), and 45 CFR 149.510(c)(4)(ii).

33

The Federal IDR portal is available at

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

and must be used throughout the Federal IDR process to maximize efficiency and reduce burden.

Section 9816(c)(3)(A) of the Code, section 716(c)(3)(A) of ERISA, and section 2799A-1(c)(3)(A) of the PHS Act direct the Departments to specify criteria under which multiple qualified IDR items and services are permitted to be considered jointly as part of a single determination (“batched determination” or “batched dispute”) by a certified IDR entity for purposes of encouraging the efficiency (including minimizing costs) of the Federal IDR process. These sections further require that items and services may be considered as part of a batched determination only if the items and services are furnished by the same provider or facility; payment for the items and services is required to be made by the same group health plan or health insurance issuer; such items and services are related to the treatment of a similar condition; and the items and services were furnished during the 30-day period following the date on which the first item or service included in the batched determination was furnished, or during an alternative period as determined by the Departments, for use in limited situations, such as by the consent of the parties or in the case of low-volume items and services, to encourage procedural efficiency and minimize health plan and provider administrative costs. The October 2021 interim final rules implemented these requirements for batched determinations at 26 CFR 54.9816-8T(c)(3)(i), 29 CFR 2590.716-8(c)(3)(i), and 45 CFR 149.510(c)(3)(i), which are subject to the certified IDR entity fee for batched determinations.

34

34

86 FR 55994.

See also

the October 2021 interim final rules in which the Departments defined “batched items and services” as “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.” 86 FR 55987

The October 2021 interim final rules also establish requirements related to the costs of the Federal IDR process. Under the October 2021 interim final rules, each party must pay a non-refundable administrative fee for participating in the Federal IDR process.

35

The certified IDR entity may invoice the parties for the administrative fee at the time the certified IDR entity is selected, and the parties must pay the administrative fee by the time of offer submission.

36

The administrative fee is paid by each party to the certified IDR entity and remitted to the Departments.

37

Under the October 2021 interim final rules, the administrative fee was to be established annually through guidance in a manner such that the total administrative fees collected for a year are estimated to be equal to the amount of expenditures estimated to be made by the Departments to carry out the Federal IDR process for that year.

35

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

36

See

Federal Independent Dispute Resolution (IDR) Process Guidance for Disputing Parties, available at:

https://www.cms.gov/files/document/rev-102822-idr-guidance-disputing-parties.pdf.

37

26 CFR 54.9816-8T(e)(2)(ix), 29 CFR 2590.716-8(e)(2)(ix), and 45 CFR 149.510(e)(2)(ix). The No Surprises Act directed the Departments to jointly establish one Federal IDR process. To operationalize the Federal IDR process, HHS collects administrative fees for all disputes initiated under the Federal IDR process, including the administrative fees paid in connection with the Federal IDR process for health plans that are subject to the Code or ERISA.

Additionally, under the October 2021 interim final rules, each party must also pay a certified IDR entity fee to the certified IDR entity at the time that the party submits its offer.

38

However, the non-prevailing party is ultimately responsible for the full certified IDR entity fee, which is retained by the certified IDR entity for the services it performed.

39

The certified IDR entity fee that was paid by the prevailing party is returned to the prevailing party by the certified IDR entity within 30 business days following the date of the payment determination.

40

If the parties reach an agreement after initiating the Federal IDR process but before the certified IDR entity makes a payment determination, the certified IDR entity fee is split evenly between the parties, unless the parties agree on an alternative method for allocating the certified IDR entity fee.

41

Similarly, if the initiating party withdraws a dispute after a certified IDR entity has been assigned but before the certified IDR entity makes a payment determination, responsibility for the certified IDR entity fee is split evenly between the parties.

42

In the case of batched determinations, the certified IDR entity may make different payment determinations for each qualified IDR item or service under dispute. In these cases, the party with the fewest determinations in its favor is considered the non-prevailing party and is responsible for the full certified IDR entity fee. If each party prevails in an equal number of determinations, the certified IDR entity fee is split evenly between the parties. Under the October 2021 interim final rules, the

Departments set certified IDR entity fee ranges annually through guidance.

38

26 CFR 54.9816-8T(d)(1)(ii), 29 CFR 2590.716-8(d)(1)(ii), and 45 CFR 149.510(d)(1)(ii).

39

26 CFR 54.9816-8T(d)(1)(i), 29 CFR 2590.716-8(d)(1)(i), and 45 CFR 149.510(d)(1)(i).

40

26 CFR 54.9816-8T(d)(1)(ii), 29 CFR 2590.716-8(d)(1)(ii), and 45 CFR 149.510(d)(1)(ii).

41

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

42

See https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/patient-provider-dispute-resolution-administrative-fee-cy-2023.pdf.

D. Litigation Regarding the July 2021 and October 2021 Interim Final Rules and Related Guidance

On October 28, 2021, the Texas Medical Association, a trade association representing physicians, and a Texas physician filed a lawsuit against the Departments and OPM (

TMA I

),

43

stating that certain provisions of the October 2021 interim final rules relating to the certified IDR entities' consideration of the QPA, as well as additional factors related to items and services that are not air ambulance services, should be vacated. Plaintiffs argued that the October 2021 interim final rules ignored Congress's intent that certified IDR entities weigh the QPA and other factors without favoring any factor, and the plaintiffs stated that as a result, the rules would skew IDR results in favor of plans and issuers. On February 23, 2022, the District Court issued a memorandum opinion and order that vacated portions of the October 2021 interim final rules governing aspects of the Federal IDR process related to non-air ambulance qualified IDR items or services including: (1) the definition of “material difference”; (2) the requirement that a certified IDR entity must select the offer closest to the QPA unless the certified IDR entity determines that credible information submitted by either party under 26 CFR 54.9816-8T(c)(4)(i), 29 CFR 2590.716-8(c)(4)(i), and 45 CFR 149.510(c)(4)(i) clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate for non-air ambulance qualified IDR items or services, or if the offers are equally distant from the QPA but in opposing directions; (3) the requirement that the certified IDR entity may only consider the additional information submitted by either party to the extent that the credible information related to the circumstances under 26 CFR 54.9816-8T(c)(4)(i), 29 CFR 2590.716-8(c)(4)(i), and 45 CFR 149.510(c)(4)(i) clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate for non-air ambulance qualified IDR items or services; (4) the dispute resolution examples; and (5) the requirement that, if the certified IDR entity does not choose the offer closest to the QPA, the certified IDR entity's written decision must include an explanation of the credible information that the certified IDR entity determined demonstrated that the QPA was materially different from the appropriate out-of-network rate, based on the factors certified IDR entities are permitted to consider for the qualified IDR item or service.

44

43

Tex. Med. Ass'n, et al.

v.

U.S. Dep't of Health and Human Servs.,

587 F. Supp. 3d 528 (E.D. Tex. 2022).

44

Id.

On April 27, 2022, LifeNet, Inc., a provider of air ambulance services, filed a lawsuit against the Departments and OPM (

LifeNet

)

45

seeking the vacatur of additional provisions of the October 2021 interim final rules applicable to air ambulance services. In particular, LifeNet alleged that the requirement codified in the last sentence of 26 CFR 54.9817-2T(b)(2), 29 CFR 2590.717-2(b)(2), and 45 CFR 149.520(b)(2), which specifies the certified IDR entity may consider information submitted by a party only if the information “clearly demonstrate[s] that the qualifying payment amount is materially different from the appropriate out-of-network rate,” should be vacated. On July 26, 2022, the District Court issued a memorandum opinion and order vacating this language.

46

45

LifeNet, Inc.

v.

U.S. Dep't of Health and Human Servs.,

617 F.Supp.3d 547 (E.D. Tex. July 26, 2022).

46

Id.

On November 30, 2022, the Texas Medical Association, Tyler Regional Hospital, and a Texas physician filed a lawsuit (

TMA III

)

47

against the Departments and OPM, asserting that the July 2021 interim final rules, including the provisions of the regulations governing the methodology for calculating the QPA, and certain related guidance documents were in conflict with the statutory language. On August 24, 2023, the District Court issued a memorandum opinion and order

48

that vacated certain portions of the July 2021 interim final rules and associated regulatory provisions

49

and portions of guidance documents,

50

including portions related to the methodology for calculating the QPA and interpretations for certified IDR entities related to the processing of disputes for air ambulance services.

47

Tex. Med. Ass'n., et al.

v.

U.S. Dep't of Health and Human Servs.,

Case No. 6:22-cv-00450-JDK (E.D. Tex. November 30, 2022).

48

See

Memorandum Opinion and Order,

Tex. Med. Ass'n., et al.

v.

U.S. Dep't of Health and Human Servs.,

No. 6:22-cv-00450-JDK (E.D. Tex. August 24, 2023).

49

Specifically, the District Court vacated certain provisions of 54.9816-6T and 54.9817-1T, 29 CFR 2590.716-6 and 2590.717-1, and 45 CFR 149.130 and 149.140. The District Court also vacated 5 CFR 890.114(a), insofar as it requires compliance with the vacated regulations and guidance.

50

Specifically, the District Court vacated

FAQs about Affordable Care Act and Consolidated Appropriations Act, 2021 Implementation Part 55

(Aug. 19, 2022), Q14 and 15, as well as portions of

Technical Guidance for Certified IDR Entities

at 2-3 (Aug. 18, 2022).

On January 30, 2023, the Texas Medical Association, Houston Radiology Associated, Texas Radiological Society, Tyler Regional Hospital, and a Texas physician filed a lawsuit (

TMA IV

)

51

against the Departments and OPM, asserting that the December 2022 fee guidance

52

and the October 2021 interim final rules were unlawfully issued without notice and comment rulemaking and were arbitrary and capricious.

53

On August 3, 2023, the District Court issued a memorandum opinion and order

54

that vacated the portion of the December 2022 fee guidance increasing the administrative fee for the Federal IDR process to $350 per party for disputes initiated during the calendar year beginning January 1, 2023. The District Court also vacated certain provisions of the October 2021 interim final rules setting forth the batching criteria under which multiple IDR items or services are treated as related to the “treatment of a similar condition.”

55

In light of the

TMA IV

order, on August 3, 2023, the Departments instructed certified IDR entities to pause all work in the Federal IDR portal until the Departments updated Federal IDR process guidance, systems, and related documents to make them consistent with the

TMA IV

order. Subsequently, on August 7, 2023, the Departments directed certified IDR entities to resume processing all single and bundled disputes for which the administrative fee had already been paid and all batched disputes for which the certified IDR entity had already determined the dispute eligible and

administrative fees had been paid (or the deadline for collecting fees had expired) before August 3, 2023.

56

On August 8, 2023, the Departments directed certified IDR entities to resume processing single and bundled disputes initiated in 2022 for which the administrative fee had not been paid before August 3, 2023. On August 11, 2023, the Departments released guidance to reflect the

TMA IV

order related to the administrative fee and to clarify the administrative fee amount for 2023.

57

On the same date, the Departments directed certified IDR entities to resume processing single and bundled disputes initiated in 2023 for which the administrative fees had not been paid before August 3, 2023.

51

Tex. Med. Ass'n., et al.

v.

U.S. Dep't of Health and Human Servs.,

Case No. 6:23-cv-00059-JDK, (E.D. Tex. Jan. 30, 2023).

52

Centers for Medicare & Medicaid Services (Dec. 23, 2022).

Amendment to the Calendar Year 2023 Fee Guidance for the Federal Independent Dispute Resolution Process Under the No Surprises Act: Change in Administrative Fee. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/amended-cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.

53

See

Motion for Summary Judgment and Reply in Support of Summary Judgment, p. 1,

Tex. Med. Ass'n., et al.

v.

U.S. Dep't of Health and Human Servs.,

No. 6:23-cv-00059-JDK (E.D. Tex. March 27, 2023).

54

See

Memorandum Opinion and Order,

Tex. Med. Ass'n.

v.

U.S. Dep't of Health and Hum. Servs,

No. 6:23-cv-00059-JDK (E.D. Tex. August 3, 2023).

55

Specifically, the District Court vacated the requirement under 26 CFR 54.9816-8T(c)(3)(i)(C), 29 CFR 2590.716-8(c)(3)(i)(C), and 45 CFR 149.510(c)(3)(i)(C) that for a qualified IDR item and service to be considered the same or similar item and service, it must be billed under the same service code or a comparable code under a different procedural code system, such as the Current Procedural Terminology (CPT) codes with modifiers, if applicable, Healthcare Common Procedure Coding System (HCPCS) with modifiers, if applicable, or Diagnosis-Related Group (DRG) codes with modifiers, if applicable.

56

For the purposes of the Federal IDR process, the Departments in guidance interpreted a bundled payment arrangement to be an arrangement under which: (1) a provider, facility, or provider of air ambulance services bills for multiple items or services under a single service code; or (2) a plan or issuer makes an initial payment or denial of payment to a provider, facility, or provider of air ambulance services under a single service code that represents multiple items or services (

e.g.,

a DRG).

See

U.S. Department of Health and Human Services, U.S. Department of Labor, and U.S. Department of Treasury, Federal Independent Dispute Resolution (IDR) Process Technical Assistance for Certified IDR Entities, August 2022,

available at https://www.cms.gov/files/document/TA-certified-independent-dispute-resolution-entities-August-2022.pdf.

These rules, discussed in section II.A. of this preamble, propose to codify that definition in the regulations.

57

Centers for Medicare & Medicaid Services (Aug. 11, 2023).

Federal Independent Dispute Resolution (IDR) Process Administrative Fee FAQs. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/no-surprises-act-independent-dispute-resolution-administrative-fee-frequently-asked-questions.pdf.

As a result of the

TMA III

order issued on August 24, 2023, the Departments again paused all IDR-related activities in order to evaluate the District Court's order and review current Federal IDR processes, templates, and system functions necessary to comply with the order. On September 5, 2023, the Departments directed certified IDR entities to resume making eligibility and conflict-of-interest determinations for all single and bundled disputes submitted on or before August 3, 2023, and encouraged disputing parties to continue engaging in open negotiations. On September 21, 2023, the Departments directed certified IDR entities to resume processing all single and bundled disputes submitted on or before August 3, 2023. On October 6, 2023, the Departments and OPM released “FAQs About Consolidated Appropriations Act, 2021 Implementation Part 62”

58

to provide guidance in light of the

TMA III

order. On the same day, the Departments reopened the Federal IDR portal for the initiation of certain new single and bundled disputes. At the time of this proposed rulemaking and in accordance with the

TMA III

and

TMA IV

orders, the Departments plan to release guidance to clarify how certified IDR entities should determine whether a dispute is appropriately batched.

58

See

U.S. Department of Health and Human Services, U.S. Department of Labor, U.S. Department of the Treasury, Office of Personnel Management,

FAQs about Consolidated Appropriations Act, 2021 Implementation Part 62

(Oct. 6, 2023), available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-62.pdf

and

https://www.cms.gov/files/document/faqs-part-62.pdf.

E. August 2022 Final Rules

The August 2022 final rules included amendments to remove from the regulations the language vacated by the District Court in

TMA I

and

LifeNet,

59

as described in section I.D. of this preamble. In addition, the August 2022 final rules amended and finalized certain disclosure requirements related to information that plans and issuers must share about the QPA under the July 2021 interim final rules.

60

The August 2022 final rules also amended and finalized select provisions of the October 2021 interim final rules on the information to be considered by a certified IDR entity when it makes a payment determination under the Federal IDR process.

61

59

87 FR 52622.

60

87 FR 52622-52623.

61

87 FR 52628.

Specifically, the Departments amended and finalized parts of the July 2021 and October 2021 interim final rules related to: (1) the information that must be disclosed about the QPA under 26 CFR 54.9816-6T(d), 29 CFR 2590.716-6(d), and 45 CFR 149.140(d) to address downcoding; (2) the certified IDR entity's consideration of the statutory factors when making a payment determination under the Federal IDR process at 26 CFR 54.9816-8T(c)(4)(iii)-(iv) and 54.9817-2T(b)(2), 29 CFR 2590.716-8(c)(4)(iii)-(iv) and 2590.717-2(b)(2), and 45 CFR 149.510(c)(4)(iii)-(iv) and 149.520(b)(2); and (3) the certified IDR entity's written decision at 26 CFR 54.9816-8T(c)(4)(vi)(B), 29 CFR 2590.716-8(c)(4)(vi)(B), and 45 CFR 149.510(c)(4)(vi)(B).

For the information that must be disclosed with the QPA, the August 2022 final rules require that if a QPA is based on a downcoded service code or modifier, in addition to the information already required to be provided with an initial payment or notice of denial of payment, a plan or issuer must provide a statement that the service code or modifier billed by the provider, facility, or provider of air ambulance services was downcoded; an explanation of why the claim was downcoded, including a description of which service codes were altered, if any, and which modifiers were altered, added, or removed, if any; and the amount that would have been the QPA had the service code or modifier not been downcoded. The August 2022 final rules define the term “downcode,” as described in the preamble to the October 2021 interim final rules, to mean the alteration by a plan or issuer of a service code to another service code, or the alteration, addition, or removal by a plan or issuer of a modifier, if the changed code or modifier is associated with a lower QPA than the service code or modifier billed by the provider, facility, or provider of air ambulance services.

62

62

87 FR 52626.

The August 2022 final rules also provided that in determining which offer to select during the Federal IDR process, the certified IDR entity must consider the QPA for the applicable year for the same or similar item or service and then must consider all additional information submitted by a party to determine which offer best reflects the appropriate out-of-network rate, provided that the information relates to the party's offer for the payment amount for the qualified IDR item or service that is the subject of the payment determination and does not include information that the certified IDR entity is prohibited from considering in making the payment determination under section 9816(c)(5)(D) of the Code, section 716(c)(5)(D) of ERISA, and section 2799A-1(c)(5)(D) of the PHS Act. For this purpose, the preamble to the August 2022 final rules stated that information requested by a certified IDR entity, or submitted by a party, would be information relating to a party's offer if it tends to show that the offer best represents the value of the item or service under dispute. The August 2022 final rules required the certified IDR entity to evaluate whether the information relates to the offer submitted by either party for the payment amount for the qualified IDR item or service that is the subject of the payment determination. The August 2022 final rules clarified that in considering this additional information, the certified IDR entity should evaluate whether the information that is offered is credible and should not give weight to information that is not credible. The appropriate out-of-network rate must be the offer that the certified IDR entity

determines best represents the value of the qualified IDR item or service.

Additionally, the August 2022 final rules provided that when considering the additional information under 26 CFR 54.9816-8(c)(4)(iii), 29 CFR 2590.716-8(c)(4)(iii), and 45 CFR 149.510(c)(4)(iii), the certified IDR entity should evaluate the information and should not give weight to that information if it is already accounted for by any of the other information submitted by the parties, to avoid weighting the same information twice.

For the written decision, the August 2022 final rules require the certified IDR entity to include what information the certified IDR entity used to determine that the offer selected as the out-of-network rate is the offer that best represents the value of the qualified IDR item or service, including the weight given to the QPA and any additional credible information submitted in accordance with the rules. The August 2022 final rules required that if the certified IDR entity relied on additional information in selecting an offer, its written decision must include an explanation of why the certified IDR entity concluded that this information was not already reflected in the QPA.

F. Litigation Regarding the August 2022 Final Rules

On September 22, 2022, the Texas Medical Association, Tyler Regional Hospital, a Texas physician, LifeNet, Inc., Air Methods Corporation, Rocky Mountain Holdings, LLC, and East Texas Air One, LLC filed a lawsuit against the Departments (

TMA II

),

63

asserting that certain provisions of the August 2022 final rules relating to the certified IDR entities' consideration of the QPA, as well as additional factors, should be vacated. Plaintiffs argued that the August 2022 final rules unlawfully conflict with the No Surprises Act in the same manner as the vacated provisions of the October 2021 interim final rules—that is, such rules improperly restrict arbitrators' discretion and unlawfully tilt the arbitration process in favor of the QPA. On February 6, 2023, the District Court issued a memorandum opinion and order that vacated portions of the August 2022 final rules related to the certified IDR entity's consideration of the statutory factors when making a payment determination under the Federal IDR process at 26 CFR 54.9816-8(c)(4)(iii)-(iv) and 54.9817-2(b)(3), 29 CFR 2590.716-8(c)(4)(iii)-(iv) and 2590.717-2(b)(3), and 45 CFR 149.510(c)(4)(iii)-(iv) and 149.520(b)(3) and part of the provision related to the certified IDR entity's written decision at 26 CFR 54.9816-8(c)(4)(vi)(B), 29 CFR 2590.716-8(c)(4)(vi)(B), and 45 CFR 149.510(c)(4)(vi)(B). The vacated portions of the rules include: (1) the requirement that certified IDR entities consider the QPA and then the additional statutory factors under 26 CFR 54.9816-8(c)(4)(iii)(B)(1)-(5) and 54.9817-2(b)(3), 29 CFR 2590.716-8(c)(4)(iii)(B)(1)-(5) and 2590.717-2(b)(3), and 45 CFR 149.510(c)(4)(iii)(B)(1)-(5) and 149.520(b)(3); (2) the provision that a certified IDR entity should evaluate whether the information submitted under 26 CFR 54.9816-8(c)(4)(iii)(B)-(D) and 54.9817-2(b)(3), 29 CFR 2590.716-8(c)(4)(iii)(B)-(D) and 2590.717-2(b)(3), and 45 CFR 149.510(c)(4)(iii)(B)-(D) and 149.520(b)(3) is credible and relates to the offer submitted by either party for the payment amount for the qualified IDR item or service that is the subject of the payment determination, and the certified IDR entity should not give weight to information to the extent it is not credible, it does not relate to either party's offer for the payment amount for the qualified IDR item or service, or it is already accounted for by the QPA or another factor; (3) the dispute resolution examples; and (4) the requirement that, if the certified IDR entity relies on additional information in selecting an offer, its written decision must include an explanation of why the certified IDR entity concluded that this information was not already reflected in the QPA.

63

Tex. Med. Ass'n, et. al.

v.

U.S. Dep't of Health and Human Servs.,

Case No. 6:22-cv-372 (E.D. Tex. February 06, 2023) (

TMA II

). Air Methods Corporation, Rocky Mountain Holdings, LLC, and East Texas Air One, LLC are providers of air ambulance services.

As a result of the

TMA II

order, on February 10, 2023, the Departments instructed certified IDR entities to hold all payment determinations until the Departments updated Federal IDR process guidance, systems, and related documents to make them consistent with the

TMA II

order.

64

Subsequently, the Departments directed certified IDR entities to resume making payment determinations on February 27, 2023, for disputes involving an item or service furnished before October 25, 2022 (the effective date of the August 2022 Final Rules).

65

On March 17, 2023, the Departments released updated guidance

66

to reflect the

TMA II

order and directed certified IDR entities to resume making payment determinations in accordance with the guidance for disputes involving items or services furnished on or after October 25, 2022.

64

Centers for Medicare & Medicaid Services. (February 10, 2023).

Payment Disputes Between Providers and Health Plans, Notices. https://www.cms.gov/nosurprises/help-resolve-payment-disputes/payment-disputes-between-providers-and-health-plans.

65

Centers for Medicare & Medicaid Services. (February 27, 2023).

Payment Disputes Between Providers and Health Plans, Notices. https://www.cms.gov/nosurprises/help-resolve-payment-disputes/payment-disputes-between-providers-and-health-plans.

66

Centers for Medicare & Medicaid Services. (March 2023).

Federal Independent Dispute Resolution (IDR) Process for Certified IDR Entities (Revised). https://www.cms.gov/files/document/federal-idr-guidance-idr-entities-march-2023.pdf and Federal Independent Dispute Resolution (IDR) Process for Disputing Parties (Revised). https://www.cms.gov/files/document/federal-idr-guidance-disputing-parties-march-2023.pdf.

On April 6, 2023, the Departments filed a notice of appeal to the United States Court of Appeals for the Fifth Circuit from the District Court's order granting summary judgement to the plaintiffs and denying summary judgment to the Departments.

G. Federal IDR Process Administrative Fee and Certified IDR Entity Fee Ranges 2023 Proposed Rules

In light of

TMA IV

and to promote transparency in the administrative fee calculation, the Departments published the IDR Process Fees proposed rules on September 26, 2023. The IDR Process Fees proposed rules propose to amend the October 2021 interim final rules to provide that the administrative fee would be set in notice and comment rulemaking rather than annual guidance, propose an administrative fee amount that, if finalized, would apply for disputes initiated on or after the later of the effective date of the IDR Process Fees proposed rules or January 1, 2024, and propose a methodology that the Departments would use to calculate the administrative fee in the future. Additionally, the IDR Process Fees proposed rules would propose to amend the October 2021 interim final rules to provide that the certified IDR entity fee ranges for single and batched determinations would be set in notice and comment rulemaking rather than annual guidance, propose the certified IDR entity fee ranges for single and batched determinations, including a fixed tiered fee for batched disputes, and propose the considerations that the Departments would use to calculate the certified IDR entity fee ranges in the future. If finalized, the proposed certified IDR entity fee ranges and fixed tiered fees would apply for disputes initiated on or after the later of the effective date of the IDR Process Fees proposed rules or January 1, 2024. If finalized, the proposed administrative fee and certified IDR entity fee ranges would remain in effect until changed by subsequent rulemaking.

H. The Federal IDR Process to Date

On April 15, 2022, the Departments launched the Federal IDR portal to accept disputes regarding the appropriate out-of-network rate for claims subject to the surprise billing protections of the No Surprises Act. From April 15, 2022 to July 1, 2023, disputing parties submitted over 489,000 disputes. In the first year of operations, disputing parties submitted 14 times the number of disputes that the Departments had expected to receive in an entire calendar year.

67 68

Due to this unexpectedly high volume, the limited number of certified IDR entities,

69

the complexity of determining disputes' eligibility for the Federal IDR process, and a large number of ineligible disputes submitted, it is taking certified IDR entities longer than the timeframes established under the No Surprises Act and the October 2021 interim final rules to process payment disputes. Further, the District Court's successive orders have resulted in multiple temporary closures of the Federal IDR portal, requiring the Departments to alter guidance, implement significant system updates, and communicate changes to disputing parties and certified IDR entities to comply with the orders. These interruptions to the Federal IDR process have exacerbated delays and required certified IDR entities and disputing parties to rapidly adjust to changing operations and guidance. Accordingly, a large number of disputes still await payment determinations.

67

Federal Independent Dispute Resolution Process—Status update. Available at:

https://www.cms.gov/files/document/federal-idr-processstatus-update-april-2023.pdf.

68

In the regulatory impact analysis of the October 2021 interim final rules, the Departments estimated that 17,333 disputes involving non-air ambulance services and 4,899 disputes involving air ambulance services would be submitted to the Federal IDR process during the first year of implementation.

69

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

Several factors are likely contributing to the high volume of initiated disputes. First, providers, facilities, and providers of air ambulance services

70

have alleged that plans' and issuers' QPA calculations are sometimes artificially low and are even at times lower than Medicare rates. Providers, facilities, and providers of air ambulance services further allege that plans and issuers are making initial payments based on these artificially low QPAs, which incentivizes providers, facilities, and providers of air ambulance services to use the Federal IDR process for a larger number of items and services than they otherwise would.

70

For purposes of these proposed rules, unless otherwise stated, whenever the Departments are referring to providers, facilities, and providers of air ambulance services, the Departments are referring to nonparticipating providers, facilities, and providers of air ambulance services.

A second factor contributing to the high volume of disputes is that the disputing parties are not yet able to predict how disputes will be resolved by certified IDR entities. As the Departments stated in the preamble to the October 2021 interim final rules, a Federal IDR process with predictable outcomes will reduce the use of the Federal IDR process over time because, if outcomes are predictable in advance, parties will generally prefer to reach an agreement in line with the predicted outcome outside of the Federal IDR process to avoid the administrative costs of utilizing the process.

Third, disputing parties are failing to engage in meaningful open negotiations. Parties representing providers, facilities, providers of air ambulance services, plans, and issuers have all asserted that they experience challenges in negotiating with other parties during the 30-business-day open negotiation period, resulting in low levels of engagement during open negotiation. This lack of engagement has resulted in relatively few disputes being settled outside of the Federal IDR process, contributing to a higher-than-expected volume of disputes being initiated in the Federal IDR process. As discussed later in this section, interested parties also shared that the lack of meaningful engagement in open negotiation contributes to inefficiencies within the Federal IDR process, because disputing parties that fail to engage in open negotiation may not exchange information that would facilitate the Federal IDR process, such as contact information and other required disclosures, or may exchange only incomplete information.

Fourth, the District Court's successive rulings have necessitated multiple temporary shutdowns of the Federal IDR process to comply with the District Court's orders. Each shutdown has halted parts, or all, of the Federal IDR process, interrupting the advancement of ongoing disputes through the process and preventing new disputes from being submitted. Reopening the Federal IDR portal each time has required the Departments to draft new guidance, engage in new rulemaking, implement significant system updates, and communicate changes to disputing parties and certified IDR entities. These interruptions to the Federal IDR process have exacerbated delays and required certified IDR entities and disputing parties to rapidly adjust to changing operations and guidance, which causes confusion regarding the current state of the process while certified IDR entities and disputing parties adapt to new or different processes, such as those discussed in section I.D. of this preamble related to the

TMA III

order.

Finally, initiating parties are submitting a large number of disputes that are not eligible for the Federal IDR process, leading to both a high volume of dispute submissions and slow processing of disputes. Certified IDR entities have indicated to the Departments that determining the eligibility of disputes for the Federal IDR process is more time-consuming and burdensome than they expected. In fact, certified IDR entities report spending 50 to 80 percent of their time working on eligibility determinations. From April 15, 2022 to July 1, 2023, non-initiating parties challenged the eligibility of 190,465 disputes for the Federal IDR process, and certified IDR entities found 59,604 disputes ineligible. A dispute is not eligible for the Federal IDR process unless it concerns an item or service that meets the definition of a qualified IDR item or service.

71

Ineligible disputes often involve an item or service that is not a qualified IDR item or service because it is covered by a health plan or coverage that is not subject to the surprise billing protections of the No Surprises Act, such as Medicare or Medicaid, or because the item or service is subject to a specified State law or an All-Payer Model Agreement. Additionally, many batched disputes were found ineligible due to the initiating party incorrectly batching items or services in a manner that did not comply with the regulations, such as batching claims paid by different plans or issuers.

72

Certified IDR entities have similarly reported encountering incorrectly bundled disputes for which providers are attempting to submit, for example, an emergency room facility code as a bundled code with various item and service codes included as line items, rather than properly submitting a single service code (for example, a Diagnosis-Related Group (DRG) code under which a provider, facility, or provider of air ambulance services can bill for multiple items or services).

73

Disputes are also ineligible when the disputing parties have failed to satisfy the 30-business-day open negotiation period requirements specified under 26 CFR

54.9816-8T(b)(1), 29 CFR 2590.716-8(b)(1), and 45 CFR 149.510(b)(1) or have failed to initiate the Federal IDR process within 4 business days after the end of the 30-business-day open negotiation period as specified under 26 CFR 54.9816-8T(b)(2)(i), 29 CFR 2590.716-8(b)(2)(i), and 45 CFR 149.510(b)(2)(i).

71

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

72

26 CFR 54.9816-8T(c)(3)(i)(B), 29 CFR 2590.716-8(c)(3)(i)(B), and 45 CFR 149.510(c)(3)(i)(B).

73

26 CFR 54.9816-8T(c)(3)(ii), 29 CFR 2590.716-8(c)(3)(ii), and 45 CFR 149.510(c)(3)(ii).

The Departments' review of the disputes submitted to date and feedback received from interested parties and certified IDR entities via letters, email communication and listening sessions shows a pattern of initiating parties submitting ineligible disputes to the Federal IDR process due to miscommunication or a lack of communication between the disputing parties. The Departments intended that sufficient information would be communicated through the disclosures that plans and issuers are required to provide with their initial payment or notice of denial of payment or would be subsequently communicated during the required 30-business-day open negotiation period to identify whether the item(s) or service(s) involved in the dispute is a qualified IDR item(s) or service(s). Plans and issuers assert that providers, facilities, and providers of air ambulance services submit overwhelming numbers of ineligible disputes that overload the plans' and issuers' ability to identify and respond to dispute initiations, while providers, facilities, and providers of air ambulance services assert that plans and issuers do not provide required contact information and disclosures in a clear and convenient manner and fail to respond to their notices initiating open negotiation.

Although plans and issuers are required to provide disclosures with the initial payment or notice of denial of payment containing information related to the QPA and contact information to initiate open negotiations, providers, facilities, and providers of air ambulance services have reported difficulty locating this information. The inability of providers, facilities, and providers of air ambulance services to locate required disclosures has led to confusion about how they should contact and engage in open negotiations with the plan or issuer and ultimately submit the dispute to the Federal IDR process. If disputing parties fail to share the required information, or if they provide inaccurate information, certified IDR entities will have incomplete or inaccurate information when making eligibility determinations. As a result, certified IDR entities must dedicate additional resources and conduct outreach to determine eligibility. Many interested parties have stated that the exchange of key information in a more standardized fashion, such as through the inclusion of the information on electronic remittance advice (ERA) transactions, discussed in greater detail in section II.B. of this preamble, would ensure that disputing parties have timely access to complete and accurate information and therefore help reduce the number of ineligible disputes submitted to the Federal IDR process. This is primarily because disputing parties would have timely access to the information they need to determine whether (1) an item or service is a qualified IDR item or service and (2) it is in their interest to initiate the Federal IDR process regarding such item or service. The Departments are of the view that timely access to that type of information would help reduce the overall number of ineligible disputes, resulting in more manageable workloads for certified IDR entities and more efficient dispute processing overall.

Additionally, providers and facilities have raised concerns that the existing disclosure rules do not require plans and issuers to provide information necessary for determining whether the item or service is subject to a specified State law, an All-Payer Model Agreement, or the Federal IDR process for determining the out-of-network rate. In particular, providers, facilities, and providers of air ambulance services have identified significant challenges in determining whether a claim involves a plan that is a self-insured group health plan subject to ERISA (and, if the claim involves an item or service covered by the No Surprises Act, is therefore generally subject to the Federal IDR process) or a fully-insured plan to which a specified State law or All-Payer Model Agreement may apply.

74

The Departments also are aware that there are further challenges in identifying whether a plan subject to ERISA has opted into a specified State law and, separately, whether a specific item or service, or specific provider, facility, or provider of air ambulance services, is subject to a given specified State law or All-Payer Model Agreement. Additionally, providers, facilities, and providers of air ambulance services have identified difficulties in determining the correct legal business name of the plan or issuer. As a result, when initiating the Federal IDR process, providers, facilities, and providers of air ambulance services may initiate their dispute against the wrong party or may incorrectly batch claims that were paid by different plans or issuers.

74

The July 2021 interim final rules allow self-insured group health plans, including self-insured non-Federal governmental plans, to voluntarily opt in to a State law that provides for a method for determining the total amount payable under such a plan, where a State has chosen to expand access to such plans, to satisfy their obligations under section 9816(a)-(d) of the Code, section 716(a)-(d) of ERISA, and section 2799A-1(a)-(d) of the PHS Act. A self-insured plan that has chosen to opt-in to a State law must prominently display in its plan materials describing the coverage of out-of-network services a statement that the plan has opted in to a specified State law, identify the relevant State (or States), and include a general description of the items and services provided by nonparticipating facilities, providers, and providers of air ambulance services that are covered by the specified State law.

To address the high volume of disputes submitted to the Federal IDR process and the growing backlog of cases, the Departments have provided ongoing technical assistance to certified IDR entities and disputing parties by issuing guidance as well as performing research and outreach on dispute eligibility determinations.

75

In addition, the Departments have implemented Federal IDR portal system enhancements. These system enhancements, such as enabling non-initiating parties to submit supporting documentation to contest dispute eligibility within their response to the notice of IDR initiation, allow the Departments to collect information regarding dispute eligibility earlier in the process to identify whether the eligibility requirements are met. However, despite the efforts to date, the Departments and certified IDR entities continue to experience challenges related to determining eligibility for the Federal IDR process, such as delays due to necessary outreach by the certified IDR entities to the disputing parties to obtain or verify information regarding the eligibility of a dispute.

75

U.S. Department of Health and Human Services, U.S. Department of Labor, and U.S. Department of the Treasury, Federal Independent Dispute Resolution (IDR) Process Technical Assistance for Certified IDR Entities, August 2022,

available at https://www.cms.gov/files/document/TA-certified-independent-dispute-resolution-entities-August-2022.pdf.

I. Scope and Purpose of Rulemaking

This proposed rulemaking is intended to address specific issues that are critical to ensuring the timely rendering of payment determinations and to address feedback from interested parties and certified IDR entities to improve the functioning of the Federal IDR process.

These proposed rules are intended to address some of the common communication issues between disputing parties, including those stemming from a lack of clarity as to whether items and services are qualified IDR items and services covered by the

No Surprises Act. These proposed rules would impose requirements and create incentives for parties to engage with one another during the open negotiation period, which would help reduce the volume of ineligible disputes being submitted. Specifically, these proposed rules would make changes to the information that plans, issuers, providers, facilities, and providers of air ambulance services must share before initiating the Federal IDR process by including proposals at 26 CFR 54.9816-6A, 29 CFR 2590.716-6A, and 45 CFR 149.100 to require plans and issuers to provide claim adjustment reason codes (CARCs) and remittance advice remark codes (RARCs) when providing any paper or electronic remittance advice in response to a claim for payment for health care items or services furnished by an entity with which it does not have a direct or indirect contractual relationship. Additionally, the Departments propose amendments at 26 CFR 54.9816-6, 29 CFR 2590.716-6, and 45 CFR 149.140 to the information that must be disclosed about the QPA. These proposed rules would also establish new requirements at 26 CFR 54.9816-9, 29 CFR 2590.716-9, and 45 CFR 149.530, which would require plans and issuers to register with the Federal IDR portal to better enable a provider, facility, or provider of air ambulance services to identify the appropriate plan or issuer with which it has a dispute and determine whether its coverage of an item or service that is the subject of the dispute is subject to a specified State law, an All-Payer Model Agreement, or the Federal IDR process for determining the out-of-network rate.

To further facilitate communication and improve open negotiations, these proposed rules would amend the open negotiation process that precedes the Federal IDR process. Specifically, at 26 CFR 54.9816-8(b)(1), 29 CFR 2590.716-8(b)(1), and 45 CFR 149.510(b)(1), these proposed rules would amend the content requirements of the standard open negotiation notice, would establish requirements related to an open negotiation response notice, and would clarify the timing for when the open negotiation period begins. These proposed rules would also amend the process for initiating the Federal IDR process. Specifically, at 26 CFR 54.9816-8(b)(2), 29 CFR 2590.716-8(b)(2), and 45 CFR 149.510(b)(2), these proposed rules would amend the content of the notice of IDR initiation and establish new requirements for a notice of IDR initiation response from the non-initiating party. At 26 CFR 54.9816-8T(b)(3), 29 CFR 2590.716-8(b)(3), and 45 CFR 149.510(b)(3) these proposed rules would also establish a new manner for providing notices to the other party and the Departments.

These proposed rules would also provide additional clarity regarding timeframes within the Federal IDR process. The No Surprises Act includes timeframes by which certain steps of the Federal IDR process must be completed. For example, the parties to a dispute must jointly select a certified IDR entity not later than the last day of the 3-business-day period following the date of the initiation of the Federal IDR process, and if the parties fail to jointly select a certified IDR entity, the Departments must select a certified IDR entity not later than 6 business days after the date of IDR initiation.

76

While the No Surprises Act also provides detailed timeframes for certain other steps in the process, the steps that must be conducted before a payment determination can be issued are not as clearly defined, such as when a certified IDR entity must conduct a conflict-of-interest review and must determine whether an item or service is a qualified IDR item or service, as defined in 26 CFR 54.9816-8T(a)(2)(xi), 29 CFR 2590.716-8(a)(2)(xi), and 45 CFR 149.510(a)(2)(xi), and eligible for the Federal IDR process. Therefore, the provisions in these proposed rules would adjust certain steps and establish associated timeframes (see Table 1). This includes proposed provisions related to establishing a process for the preliminary selection of the certified IDR entity and the final selection of the certified IDR entity as set out in 26 CFR 54.9816-8(c)(1), 29 CFR 2590.716-8(c)(1), and 45 CFR 149.510(c)(1), in order to account for the time it takes certified IDR entities to confirm that they do not have a conflict of interest with either party. To allow more time for certified IDR entities to conduct eligibility reviews, these proposed rules would include proposed amendments to the Federal IDR process eligibility review proposed in 26 CFR 54.9816-8T(c)(2), 29 CFR 2590.716-8(c)(2), and 45 CFR 149.510(c)(2). As discussed in section I.H. of this preamble, eligibility reviews have proven to be complex and time consuming. In extenuating circumstances, such as when dispute volume is high, it may be more appropriate for the Departments, rather than certified IDR entities, to conduct eligibility reviews to facilitate quicker dispute processing. Therefore, these proposed rules would establish a departmental eligibility review process in proposed paragraph 26 CFR 54.9816-8(c)(2)(ii), 29 CFR 2590.716-8(c)(2)(ii), and 45 CFR 149.510(c)(2)(ii). Further, to support eligibility determinations, conflict-of-interest reviews, or payment determinations, the Departments propose requirements for the submission of additional information from the disputing parties at 26 CFR 54.9816-8(c)(2)(iii), 29 CFR 2590.716-8(c)(2)(iii), and 45 CFR 149.510(c)(2)(iii). To clarify and establish a standard process for disputes to be withdrawn from the Federal IDR process, the Departments propose four conditions in which a dispute may be withdrawn at 26 CFR 54.9816-8(c)(3)(i), 29 CFR 2590.716-8(c)(3)(i), and 45 CFR 149.510(c)(3)(ii). To further adjust timeframes and processes associated with the Federal IDR process, these proposed rules would include proposed amendments related to submission of offers and payment determination and notification at 26 CFR 54.9816-8(c)(5), 29 CFR 2590.716-8(c)(5), and 45 CFR 149.510(c)(5); the collection of the certified IDR entity fee at 26 CFR 54.9816-8(d)(1), 29 CFR 2590.716-8(d)(1), and 45 CFR 149.510(d)(1); and the collection of the administrative fee, including a process for setting a reduced administrative fee for low-dollar amount disputes and for non-initiating parties in cases of ineligible disputes, at 26 CFR 54.9816-8(d)(2), 29 CFR 2590.716-8(d)(2), and 45 CFR 149.510(d)(2). These proposed rules also include provisions to expand upon situations in which Federal IDR process timeframes may be waived due to extenuating circumstances at 26 CFR 54.9816-8T(g), 29 CFR 2590.716-8(g), and 45 CFR 149.510(g).

76

Section 9816(c)(4)(F) of the Code, section 716(c)(4)(F) of ERISA, and section 2799A-1(c)(4)(F) of the PHS Act.

Lastly, to address concerns regarding the vacated batching provision at 26 CFR 54.9816-8T(c)(3)(i)(C), 29 CFR 2590.716-8(c)(3)(i)(C), and 45 CFR 149.510(c)(3(i)(C) and to create more efficiencies in the process, these proposed rules at 26 CFR 54.9816-8(c)(4), 29 CFR 2590.716-8(c)(4), and 45 CFR 149.510(c)(4) would include provisions that would allow for more flexibility in batching multiple items or services in a single dispute.

It is the Departments' intention that the implementation of the proposed provisions in these proposed rules, if finalized, would lead to a more efficient

Federal IDR process and more timely payment determinations.

BILLING CODE 6325-63-P; 4830-01-P; 4510-29-P; 4120-01-P

EP03NO23.002

EP03NO23.003

EP03NO23.004

BILLING CODE 6325-63-C; 4830-01-C; 4510-29-C; 4120-01-C

II. Overview of the Proposed Rules—Departments of the Treasury, Labor, and HHS

A. Definition of Bundled Payment Arrangement

Section 9816(c)(3)(B) of the Code, section 716(c)(3)(B) of ERISA, and section 2799A-1(c)(3)(B) of the PHS Act state that the Departments shall provide that, in the case of items and services which are included by a provider or facility as part of a bundled payment, such items and services included in such bundled payment may be part of a single determination. The October 2021 interim final rules specify that in the case of qualified IDR items and services billed by a provider, facility, or provider of air ambulance services as part of a bundled payment arrangement, or if a plan or issuer makes or denies an initial payment as a bundled payment, the qualified IDR items and services may be submitted as part of one payment determination and are subject to the rules for batched determinations and the certified IDR entity fee for single determinations.

78

The preamble to the October 2021 interim final rules describes a bundled payment arrangement as an instance in which a group health plan or health insurance issuer pays a provider, facility, or provider of air ambulance services a single payment for multiple items or services furnished during an episode of care to a single patient.

79

To clarify how certified IDR entities can identify a dispute that includes a bundled payment arrangement, the Departments provided a definition for a bundled payment arrangement in the

August 2022 Technical Assistance for Certified IDR Entities.

80

In that guidance, the Departments clarified that a single payment to one provider, facility, or provider of air ambulance services for multiple items or services must be made at the service code level for the entire bundle in order to be considered a bundled payment and therefore be treated as a single payment determination for the multiple items and services under the Federal IDR process. The Departments defined a bundled payment arrangement at the service code level because service codes are the principal mechanism by which health care services and supplies are identified and reimbursed. These rules propose to codify the clarification set forth in the

August 2022 Technical Assistance for Certified IDR Entities.

Specifically, the Departments propose to amend 26 CFR 54.9816-3T, 29 CFR 2590.716-3, and 45 CFR 149.30 by defining the term “bundled payment arrangement” as an arrangement under which: (1) a provider, facility, or provider of air ambulance services bills for multiple items or services furnished to a single patient under a single service code that represents multiple items or services (for example, a DRG code); or

(2) a plan or issuer makes an initial payment or notice of denial of payment to a provider, facility, or provider of air ambulance services under a single service code that represents multiple items or services furnished to a single patient (for example, a DRG code).

77

For a chart outlining the Federal IDR Process under the current regulations,

see

the Federal IDR Process Guidance for Disputing Parties at

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

78

86 FR 55994.

79

Id.

80

U.S. Department of Health and Human Services, U.S. Department of Labor, and U.S. Department of the Treasury. (August 2022).

Technical Assistance for Certified IDR Entities. https://www.cms.gov/files/document/TA-certified-independent-dispute-resolution-entities-August-2022.pdf.

For example, the

August 2022 Technical Assistance for Certified IDR Entities,

the

National Correct Coding Initiative (NCCI) Policy Manual

81

explains that if a physician performs bilateral mammography, the provider shall report (or for the purpose of the Federal IDR process, the provider shall bill) Current Procedural Terminology (CPT) code 77066 (

Diagnostic mammography . . . bilateral

). The provider should not submit CPT code 77065 (

Diagnostic mammography . . . unilateral

) with 2 UOS or CPT code 77065 LT (

unilateral left breast mammography

) plus CPT code 77065 RT (

unilateral right breast mammography

). Under this example, the provider performed multiple services, and therefore, if the services are billed or reimbursed under one service code (CPT code 77066), all services performed under that service code (CPT codes 77065 LT and 77065 RT) may be considered a bundled payment arrangement for purposes of the Federal IDR process.

81

The NCCI, developed by the Centers for Medicare & Medicaid Services, promotes correct national coding methodologies. Although created for the purpose of reducing improper Medicare Part B payments, the NCCI policy manual is also used by commercial payers. CMS. (Feb. 28, 2023).

Medicare National Correct Coding Initiative (NCCI) Edits. https://www.cms.gov/medicare-medicaid-coordination/national-correct-coding-initiative-ncci/ncci-medicare/medicare-ncci-policy-manual.

Further, under current rules at 26 CFR 54.9816-8T(c)(3)(ii), 29 CFR 2590.716-8(c)(3)(ii), and 45 CFR 149.510(c)(3)(ii), bundled payment arrangements can be submitted as a single dispute and are subject to certified IDR entity fees for a single dispute rather than the higher fees for batched disputes (which may include multiple items or services from different claims between the same provider and plan but reflect the same service code or a similar code under a different procedural coding system).

To further clarify the process for resolving IDR disputes for bundled payment arrangements, the Departments propose an amendment that would remove the language in the October 2021 interim final rules stating that a bundled payment arrangement is subject to the rules for batched determinations. While a bundled payment arrangement by definition is billed by the same provider or group of providers, facility, or same provider of air ambulance services and paid by the same group health plan or health insurance issuer, not all requirements for batched determinations

82

apply to bundled payment arrangements.

82

26 CFR 54.9816-8T(c)(3), 29 CFR 2590.716-8(c)(3), and 45 CFR 149.510(c)(3).

The Departments solicit comment on the definition and treatment of bundled payment arrangements. The Departments also solicit comment on examples of service or procedural codes other than DRGs that would meet the proposed definition of a bundled payment arrangement.

B. Use of CARCs and RARCs

1. Existing Payment Communication Practice and Requirements

As described in section I.E. of this preamble, plans and issuers are currently required to disclose certain information to providers, facilities, and providers of air ambulance services when making an initial payment or notice of denial of payment when the recognized amount is the QPA.

83

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) mandated the adoption of electronic standards for certain health care transactions, including health care payment and remittance advice. Under HIPAA and regulations implementing the electronic transaction standards, these disclosures, when transmitted from a plan or issuer to a provider, facility, or provider of air ambulance services,

84

meet the definition of a health care remittance advice transaction.

85

Therefore, plans and issuers must comply with the Accredited Standards Committee (ASC) X12 implementation guide adopted at 45 CFR 162.1602 when electronically transmitting the QPA disclosures required under 26 CFR 54.9816-6T(d), 29 CFR 2590.716-6(d), and 45 CFR 149.140(d) to a provider, facility, or provider of air ambulance services.

86

Further, plans and issuers are required to send remittance information electronically upon the request of a provider, facility, or provider of air ambulance services, regardless of whether the requesting individual or entity is in the plan's or issuer's network or otherwise affiliated with the plan or issuer.

87

When remittance advice is transmitted electronically, it is commonly referred to as an ERA.

83

26 CFR 54.9816-6T(d), 29 CFR 2590.716-6(d), and 45 CFR 149.140(d). As explained in section II.C. of this preamble, the Departments are proposing the following amendments to 26 CFR 54.9816-6T(d), 29 CFR 2590.716-6(d), and 45 CFR 149.140(d) to reflect that the concept of the recognized amount is not applicable to providers of air ambulance services: (1) requiring plans and issuers to disclose the QPA and certain information about the QPA when cost sharing is calculated using the QPA for an air ambulance service; and (2) requiring plans and issuers to provide these disclosures when the recognized amount (or with respect to air ambulance services, the amount on which cost sharing is based) is the QPA or the amount billed by the provider, facility, or provider of air ambulance services.

84

HIPAA requirements related to health care remittance advice transactions apply to “covered entities,” including “health plans” (which generally include plans and issuers) and “health care providers” (which include providers, facilities, and providers of air ambulance services that transmit any health information in electronic form in connection with an electronic transaction for which a standard has been adopted under HIPAA). 45 CFR 160.102 and 45 CFR 160.103. For purposes of continuity with the rest of this preamble, this section uses the terms “plan” and “issuer” to refer to entities that are subject to HIPAA requirements that apply to “health plans” and the term “providers, facilities, and providers of air ambulance services” to refer to entities that are subject to HIPAA requirements that apply to “health care providers.” However, self-administered group health plans with fewer than 50 participants are excluded from the term “health plan” under 45 CFR 160.103 and are not subject to HIPAA requirements.

85

45 CFR 162.1601 (“The health care electronic funds transfers (EFT) and remittance advice transaction is the transmission of either of the following for health care: (a) The transmission of any of the following from a health plan to a health care provider: (1) Payment. (2) Information about the transfer of funds. (3) Payment processing information. (b) The transmission of either of the following from a health plan to a health care provider: (1) Explanation of benefits. (2) Remittance advice.”).

86

The ASC X12N 835 Version 5010 (835 transaction) is the current HIPAA standard that plans and issuers must use to electronically transmit explanation of benefits or remittance advice information to providers and facilities. As discussed later in this section II.B. of this preamble, the current ASC X12 standards predate, and therefore do not address, the No Surprises Act requirements.

87

45 CFR 162.925(a)(1).

See also

Gerhardt, C. (March 22, 2022).

Guidance on health plans' payment of health care claims using Virtual Credit Cards (VCCs) and adopted HIPAA standards for Health Care Electronic Funds Transfers (EFT) and Electronic Remittance Advice (ERA) transactions.

Centers for Medicare & Medicaid Services.

https://www.cms.gov/files/document/guidance-letter-vcc-eft-era.pdf.

HIPAA regulations require that a covered entity conduct a transaction as a standard transaction when using electronic media to transmit a transaction for which the Secretary has adopted a standard (

see

45 CFR 162.923(a)). HIPAA regulations also require a health plan to conduct transactions as standard transactions when requested to do so (

see

45 CFR 162.925(a)(1)). HIPAA does not, however, obligate a health plan to conduct a transaction(s) that it would not otherwise conduct.

An ERA explains how a plan or issuer has adjusted claim charges based on factors like contract agreements, secondary payers, benefits coverage, and expected cost sharing.

88

As noted earlier in this preamble section with reference to QPA disclosures, all ERAs must

comply with the ASC X12 835 transaction standard adopted by HHS under 45 CFR 162.1602. The X12 835 implementation guide mandates the use of CARCs and RARCs to communicate remittance information (as opposed to any other code systems, such as proprietary codes developed by individual plans and issuers).

89

The terms “CARC” and “RARC” are not defined in Federal statute but are described in the ASC X12 835 implementation guide and the Council for Affordable Quality Healthcare Committee on Operating Rule for Information Exchange (CAQH CORE) operating rule adopted at 45 CFR 162.1603(a)(4). CARCs explain why a claim or service line was paid differently than it was billed.

90

RARCs provide additional explanations for an adjustment already described by a CARC or convey information about remittance processing. RARCs are either “supplemental,” meaning that they provide additional explanation for an adjustment already described by a CARC, or “informational,” meaning they convey information about remittance processing and are never related to a specific adjustment or CARC.

91

The lists of approved CARCs and RARCs are maintained by separate committees (the CARC Committee and the RARC Committee) designated by HHS to review requests to add, remove, or modify existing CARCs and RARCs. The HIPAA operating rule adopted at 45 CFR 162.1603(a)(4) requires plans and issuers to use a uniform set of CARCs and RARCs for defined business scenarios. Updated lists of approved CARCs and RARCs, along with an updated list of approved code combinations and business scenarios, are published three times each year.

92

88

Centers for Medicare & Medicaid Services. (June 16, 2022).

Health Care Payment and Remittance Advice and Electronic Funds Transfer. https://www.cms.gov/Regulations-and-Guidance/Administrative-Simplification/Transactions/HealthCarePaymentandRemittanceAdviceandElectronicFundsTransfer.

89

CARCs and RARCs are required by the ASC X12 835 transaction standard and are not currently required to be used on paper remittance advice.

90

X12. (Nov. 16, 2022).

Claim Adjustment Reason Codes. https://x12.org/codes/claim-adjustment-reason-codes.

91

X12. (March 1, 2023).

Remittance Advice Remark Codes. https://x12.org/codes/remittance-advice-remark-codes.

92

CAQH CORE. (n.d).

Ongoing Maintenance of the CORE Code Combinations. https://www.caqh.org/core/ongoing-maintenance-core-code-combinations.

The RARC Committee has approved a set of specific RARCs that convey information related to the No Surprises Act, including which of the No Surprises Act provisions apply to a claim, how cost sharing was calculated under the No Surprises Act, and whether a payment for a claim was an initial or final payment calculated in accordance with the No Surprises Act.

93

These RARCs are currently available for use by plans and issuers, although the existing No Surprises Act-specific RARCs do not address all required QPA disclosures. The current standards and operating rules that govern ERA transactions under HIPAA were adopted prior to the enactment of the No Surprises Act and do not include specific requirements that dictate which combinations of CARCs and RARCs must be used to communicate claim adjudication information in business scenarios anticipated by the No Surprises Act.

94

93

X12. (March 1, 2023).

Remittance Advice Remark Codes. https://x12.org/codes/remittance-advice-remark-codes

(complete list of approved RARC codes including No Surprises Act-specific codes); and Centers for Medicare & Medicaid Services. (March 1, 2022).

Remittance Advice Remark Codes Related to the No Surprises Act.

(unofficial reference list of No Surprises Act-specific RARC codes).

94

The ASC X12 835 transaction standard requires health plans to convey information about the adjudication of a claim using CARCS and RARCS. The Phase III 360 CORE Uniform Use of CARCs and RARCs (835) Rule, adopted at 45 CFR 162.1603 requires plans to use specified combinations of CARCs and RARCs in certain business scenarios. CAQH CORE. (August 2022).

CAQH CORE Payment and Remittance (835) Uniform Use of CARCs and RARCs Rule, Version PR.1.1. https://www.caqh.org/sites/default/files/core/Payment-Remittance-CARCs-RARCs-Rule.pdf.

Plans and issuers consequently convey the disclosures required under the No Surprises Act to providers, facilities, and providers of air ambulances through a variety of methods, including electronic and paper remittance advice. These disclosures, if more effectively communicated, would provide providers, facilities, and providers of air ambulance services with more accessible information to determine whether they may initiate open negotiation and the Federal IDR process. However, in part because plans and issuers are not able to transmit all of the required disclosures through standard transactions,

95

such as the ASC X12 835 transaction, providers, facilities, and providers of air ambulance services have reported to the Departments that they are not always aware of, or cannot understand, the disclosures even when the plan or issuer claims to have met the disclosure requirements.

96

Moreover, the Departments' ability to assess how often CARCs and RARCs are used to convey information related to the No Surprises Act is limited due to the minimal available data on uptake and the absence of guidance, standards, or operational rules specifying how these codes must be used. Informal feedback from providers, facilities, and providers of air ambulance services and plans and issuers suggests that some plans and issuers are using some of these codes, including when providing paper remittance advice, but there is not yet widespread usage.

95

“Standard transaction” means a transaction that complies with an applicable standard and associated operating rules adopted under the HIPAA Administrative Simplification requirements at 45 CFR part 162. 45 CFR 162.103.

96

For example, the Departments are aware of some cases where providers, facilities, and providers of air ambulance services used third parties to process remittances and did not realize the process for viewing the remittances through those third parties was filtering out information related to the No Surprises Act. Similarly, some providers, facilities, and providers of air ambulance services may view electronic remittance advice without realizing plans and issuers provided the QPA and related information on paper remittance advice.

2. Proposal To Require CARCs and RARCs To Improve Communication Between Plans and Issuers and Providers, Facilities, and Providers of Air Ambulance Services

Gaps in communication between plans and issuers and providers, facilities, and providers of air ambulance services contribute to inefficiencies in resolving disputes in the Federal IDR process. The Departments have identified the following areas of confusion, reported by plans, issuers, providers, facilities, providers of air ambulance services, and certified IDR entities, which are also consistent with the Departments' experience administering the Federal IDR process: (1) whether the consumer protections against balance billing and out-of-network cost sharing under the No Surprises Act apply to an item or service; (2) how cost sharing and the out-of-network rates are determined (that is, through an All-Payer Model Agreement, specified State law, or the Federal rules); (3) how and with whom to initiate open negotiations; and (4) which items or services eligible for the Federal IDR process can be batched or bundled into one dispute.

To address communication challenges described in section II.B.1. of this preamble, the Departments propose new disclosure rules at 26 CFR 54.9816-6A, 29 CFR 2590.716-6A, and 45 CFR 149.100. These proposed provisions would require plans and issuers to use CARCs and RARCs, as specified in guidance issued by the Departments (and discussed elsewhere in this section II.B. of this preamble), or as required under any applicable adopted standards and operating rules under 45 CFR part 162, to communicate information related to whether a claim for an item or service furnished by an entity that does not have a direct or indirect

contractual relationship with the plan or issuer with respect to the furnishing of such item or service under the plan or coverage is subject to the provisions of 26 CFR 54.9816 and 54.9817; 29 CFR 2590.716 and 2590.717; or 45 CFR part 149, subparts B, E, or F. To improve the functioning of the Federal IDR process and ensure timely rendering of payment determinations, the Departments are of the view that providers, facilities, and providers of air ambulance services need information to understand not only when items and services are subject to the No Surprises Act, but also when they are not, to avoid submission of ineligible disputes to the Federal IDR process.

The Departments have the authority under section 9816(a)(2)(B)(ii) of the Code, section 716(a)(2)(B) of ERISA, and section 2799A-1(a)(2)(B)(ii) of the PHS Act to establish through rulemaking the information that a plan or issuer must share with a provider or facility when making a determination of the QPA, including the form and manner of such disclosures.

97

The Departments also have authority under section 9833 of the Code, section 734 of ERISA, and section 2792 of the PHS Act to issue such regulations as may be necessary and appropriate to carry out the provisions of chapter 100 of the Code, part 7 of ERISA, and title XXVII of the PHS Act, including the provisions directing the Departments to establish the Federal IDR process.

97

The No Surprises Act does not include the same language addressing disclosures to providers of air ambulance services. However, the July 2021 interim final rules implemented the statute's cost-sharing requirements for air ambulance services by requiring that plans and issuers base any coinsurance and deductible for air ambulance services furnished by a nonparticipating provider of air ambulance services on the lesser of the QPA or the billed amount for the services. 86 FR 36884. Therefore, the July 2021 interim final rules also applied the requirement to make disclosures regarding the QPA with respect to providers of air ambulance services. As stated in the preamble to the July 2021 interim final rules, the Departments recognize that providers of air ambulance services subject to the surprise billing rules (as well as providers and emergency facilities) need transparency regarding how the QPA was calculated in order to inform the open negotiation process and the decision whether to initiate the Federal IDR process and what offer to submit. 86 FR 36898.

Under these authorities, the Departments propose to require plans and issuers to use CARCs and RARCs to convey specific information about the No Surprises Act when a plan or issuer provides a paper or electronic remittance advice to any entity with which it does not have a direct or indirect contractual relationship with respect to the furnishing of an item or service under the plan or coverage. Specifically, under these proposed rules, a plan or issuer would be required to use CARCs and RARCs in accordance with guidance issued by the Departments when, with respect to an entity with which it does not have a direct or indirect contractual relationship, the plan or issuer provides a paper or electronic remittance advice to a provider, facility, or provider of air ambulance services for an initial payment, notice of denial of payment, or total plan or coverage payment required under the No Surprises Act.

These proposed requirements would also apply to plans and issuers when sending remittance advice to entities with which they do not have a direct or indirect contractual relationship with respect to items and services to which the No Surprises Act surprise billing requirements do not apply, in order to convey that the No Surprises Act does not apply.

Requiring plans and issuers to use approved CARCs and RARCs to convey information related to the No Surprises Act on both electronic and paper remittance advice would better facilitate the flow of information between plans and issuers and providers, facilities, and providers of air ambulance services and increase efficiencies in the processing of claims subject to the No Surprises Act's surprise billing protections. This requirement would also assist providers, facilities, and providers of air ambulance services in identifying items and services that are not eligible for the Federal IDR process as early as the initial payment or notice of denial of payment, thereby reducing the submission of ineligible payment disputes to the Federal IDR process. This would decrease the need for outreach by certified IDR entities and allow them to concentrate resources on making payment determinations for eligible disputes.

In addition, the Departments anticipate that the proposed requirement to use CARCs and RARCs would provide valuable information to certified IDR entities in determining whether disputing parties agree on the eligibility of a dispute for the Federal IDR process after it has been submitted. As described in section II.D.1. of this preamble, the Departments propose to require that the open negotiation notice include a copy of the initial payment or notice of denial of payment, which would, under the proposal described in this section of this preamble, include CARCs and RARCs related to the No Surprises Act. The Departments also propose, as described in section II.D.1. of this preamble, to require the open negotiation notice be submitted to the Departments through the Federal IDR portal. This would help ensure that, even if a plan or issuer does not respond to a notice of IDR initiation, the certified IDR entity has access to certain information regarding whether the plan or issuer believes the dispute could be eligible for the Federal IDR process, thereby avoiding unnecessary or duplicative outreach to the parties when possible.

As discussed in section V.D. of this preamble, requiring the use of CARCs and RARCs as described in these proposed rules would result in an increase in burden for plans (or their third party administrators (TPAs)) and issuers, as they would need to implement and automate the use of new CARCs and RARCs. However, because all plans and issuers that provide ERA transactions subject to the HIPAA Administrative Simplification requirements already are required to use CARCs and RARCs, the Departments anticipate that most plans and issuers would generally have the capacity to provide No Surprises Act-specific CARCs and RARCs. The Departments seek comment on any circumstances in which it would not be possible for a plan or issuer to determine whether an item or service included on a remittance advice is, or is not, subject to the Federal IDR process at the time the remittance advice is issued to a provider, facility, or provider of air ambulance services. The Departments also seek comment on the technical and operational steps that would be necessary to initially implement new No Surprises Act-specific CARCs and RARCs, including for plans and issuers that do not currently use CARCs and RARCs, or that are currently able to accommodate only one CARC and RARC combination per line item.

The Departments propose that certain procedural aspects of this proposal would be implemented through guidance issued by the Departments.

98

Should the proposal described in this section of the preamble be finalized, the Departments would be authorized to require plans and issuers to use CARCs and RARCs to communicate information related to whether a claim for an out-of-network item or service is or is not subject to the surprise billing provisions of the No Surprises Act. The guidance issued under this authority would identify specific CARCs and RARCs and describe the specific circumstances in

which the identified CARCs and RARCs must be used. As discussed in section II.B.1. of this preamble, this approach also mirrors the existing framework under HIPAA, in which required CARC and RARC code combinations are issued through guidance, as authorized by regulation. This would provide the Departments with the flexibility to specify the use of CARCs and RARCs, including new No Surprises Act-specific RARCs that may be developed in the future, while the Departments work to address communication challenges affecting the surprise billing provisions of the No Surprises Act. It would also provide flexibility for the Departments to discontinue the use of certain CARCs and RARCs should the information communicated using those CARCs and RARCs become readily available to providers, facilities, or providers of air ambulance services through a different mechanism or otherwise become unnecessary. As discussed in more detail in section II.H.1. of this preamble, the Departments propose that plans and issuers would have a period of time following the issuance of guidance to implement the use of CARCs and RARCs in accordance with the guidance.

98

This proposal would not alter HHS' authority under HIPAA to implement future guidance with respect to electronic remittance advice or to adopt new or modified standards or operating rules in accordance with Title XI Part C—Administrative Simplification of the Social Security Act.

HHS is not proposing changes to the HIPAA transaction standards (such as the X12 835 standard) or operating rules in these proposed rules. HHS continues to monitor the implementation of the No Surprises Act in order to determine whether future changes to the HIPAA transaction standards and operating rules, in accordance with the mandated HIPAA standards and operating rules development and adoption processes,

99

might provide a long-term mechanism for facilitating communication related to the No Surprises Act between plans and issuers and providers, facilities, and providers of air ambulance services.

99

Sections 1172 and 1173 of the Social Security Act and 45 CFR 162.910.

The Departments are of the view that it would be beneficial to standardize No Surprises Act-related communications between plans and issuers and providers, facilities, and providers of air ambulance services, regardless of whether the information is transmitted using HIPAA standard transactions. Therefore, under this proposal, the Departments would issue guidance regarding the use of CARCs and RARCs in both electronic transactions as well as formats outside the purview of the HIPAA transaction standards, including paper remittance advice. While CARCs and RARCs have not been widely used to transmit information outside of ERA transactions, the Departments understand that some plans and issuers routinely communicate with providers, facilities, and providers of air ambulance services using paper remittance advice and other formats outside the purview of the HIPAA transaction standards.

In addition to the RARCs related to the No Surprises Act described previously in this section of the preamble that have been approved for use, the Departments are assessing whether additional CARCs or RARCs could be helpful for improving communication between parties about how out-of-network claims are being processed in relation to the No Surprises Act. For example, the Departments are considering whether it would be beneficial to require the use of CARCs and RARCs when plans and issuers have insufficient information to determine coverage for a claim from a nonparticipating provider of air ambulance services.

100

The Departments are also considering whether it would be beneficial to require the use of RARCs that could be used to provide any of the information required to be disclosed about the QPA under 26 CFR 54.9816-6T(d), 26 CFR 54.9816-6(d), 29 CFR 2590.716-6(d), and 45 CFR 149.140(d). It also may be helpful to have a RARC that specifies that the No Surprises Act surprise billing protections do not apply. In addition, a large proportion of the disputes determined ineligible for the Federal IDR process by certified IDR entities involve items or services that providers, facilities, or providers of air ambulance services batched improperly because they did not realize that a TPA was administering coverage for multiple self-insured plans rather than a single issuer or group health plan, and the items and services were thus ineligible to be batched.

101

Certified IDR entities have determined that other disputes are ineligible for the Federal IDR process because the self-insured plan involved in the dispute had voluntarily opted in to a specified State law.

102

A RARC that could clearly identify a payer as a self-insured plan may reduce the number of disputes that are initiated and determined ineligible on the basis of a batching or jurisdictional error. The Departments solicit comment on whether and what information not conveyed in the existing RARCs would be helpful to convey through the creation of additional RARCs related to the No Surprises Act's surprise billing provisions.

100

In

TMA III,

the District Court vacated the language in 26 CFR 54.9817-1T(b)(4)(i), 29 CFR 2590.717-1(b)(4)(i), and 45 CFR 149.130(b)(4)(i), that stated with respect to air ambulance services, “For purposes of this paragraph (b)(4)(i), the 30-calendar-day period begins on the date the plan or issuer receives the information necessary to decide a claim for payment for the services.”

See

Memorandum Opinion and Order,

Tex. Med. Ass'n., et al.

v.

U.S. Dep't of Health and Hum. Servs.,

No. 6:22-cv-00450-JDK (E.D. Tex. August 24, 2023). Because a plan or issuer may not have the information necessary to decide a claim for payment within the 30-calendar-day period, the Departments are considering whether CARCs and RARCs may be useful in such circumstances.

101

26 CFR 54.9816-8T(c)(3)(i)(B), 29 CFR 2590.716-8(c)(3)(i)(B), and 45 CFR 149.510(c)(3)(i)(B).

102

See

discussion in section I.H. of of this preamble related to the provisions of the July 2021 interim final rules that allow self-insured group health plans, including self-insured non-Federal governmental plans, to voluntarily opt into a specified State law.

The Departments are aware that some States require issuers to use CARCs and RARCs to communicate information about State surprise billing laws. The Departments seek comment regarding experience with these requirements, including whether such requirements have been effective, and any challenges related to implementing such requirements. Should these proposed rules be finalized, the Departments note that nothing in these proposed rules would prevent a State from requiring that issuers use specific CARCs or RARCs in addition to those specified in the No Surprises Act-specific Federal guidance that the Departments would be authorized to issue; nor would a State or other entity be prevented from engaging with the relevant committees to request the creation or use of a CARC or RARC in addition to those specified in such guidance.

Prior to the enactment of the No Surprises Act, out-of-network providers, facilities, and providers of air ambulance services commonly sought reimbursement directly from patients rather than from a plan or issuer, requiring a participant, beneficiary, or enrollee to then seek reimbursement for all or part of the cost of the out-of-network service directly from their plan or issuer. Because the No Surprises Act prohibits nonparticipating providers, facilities, and providers of air ambulance services from billing or holding liable a participant, beneficiary, or enrollee for an amount greater than the applicable in-network cost-sharing requirement for items and services subject to the No Surprises Act, direct billing of patients is now largely limited to items and services to which surprise billing protections in the No Surprises Act do not apply. The Departments understand that requiring the plan or issuer to convey CARC or RARC information related to eligibility for such processes to a participant,

beneficiary, or enrollee in this circumstance would represent an administrative burden on the plan or issuer without any clear benefit to the participant, beneficiary, or enrollee. In addition, such a requirement would not further the aims of these proposed rules to facilitate timely rendering of payment determinations and to improve the functioning of the Federal IDR process, in which a participant, beneficiary, or enrollee cannot participate as a party. Therefore, the requirement to use CARCs and RARCs under these proposed rules would not apply for out-of-network items and services for which the plan or issuer makes payment directly to the participant, beneficiary, or enrollee. The Departments seek comment on whether a plan or issuer should generate a remittance advice that can be obtained upon request by the provider, facility, or provider of air ambulance services when the plan or issuer makes a payment directly to a participant, beneficiary, or enrollee, and whether the requirement to use CARCs and RARCs to convey No Surprises Act-specific information as proposed in these rules should apply in these circumstances.

While the proposal refers to any paper or electronic remittance advice,

103

the Departments seek comment on whether a more general term, such as “any remittance advice,” would be helpful in characterizing the types of communications accompanying payments for items and services. The Departments also seek comment on this proposal generally.

103

The Departments are aware that different terms are sometimes used, such as paper remittance advice or explanation of payment, when referring to the paper communication that accompanies a payment or notice of denial of payment to a provider or facility for a claim and provides additional information about the adjudication of the claim for which payment is being made.

C. Information To Be Shared About the QPA

As described in sections I.B. and I.E. of this preamble, the July 2021 interim final rules and August 2022 final rules provide that if the recognized amount with respect to an item or service is the QPA, plans and issuers must make certain disclosures about the QPA with each initial payment or notice of denial of payment and must also provide certain additional information upon request.

104

This information must be provided in writing, either on paper or electronically, to a provider, facility, or provider of air ambulance services, as applicable.

105

104

86 FR 36898; 87 FR 52633.

105

26 CFR 54.9816-6T(d) and 54.9816-6(d), 29 CFR 2590.716-6(d), and 45 CFR 149.140(d).

While these requirements were intended to ensure the disclosure of information about the QPA in any instance in which an item or service would be eligible for the Federal IDR process, the text of the current regulation directs plans and issuers to make these disclosures only if the recognized amount with respect to an item or service furnished by a provider, facility, or provider of air ambulance services is the QPA. The Departments propose a change to reflect that the term “recognized amount” is not used in the statute or regulations for purposes of determining cost sharing with respect to air ambulance services furnished by nonparticipating providers of air ambulance services. Rather, under the July 2021 interim final rules, plans and issuers must calculate the cost-sharing amount for air ambulance services furnished by a nonparticipating provider of air ambulance services as if the total amount that would have been charged were equal to the lesser of the QPA or the billed amount for the services.

106

Therefore, the Departments propose to amend the regulations to specify that plans and issuers must, in the case of air ambulance services, disclose the QPA and certain information about the QPA when cost sharing is calculated using the QPA. In addition, the Departments propose to require plans and issuers to make the same disclosures when the recognized amount (or with respect to air ambulance services, the amount on which cost sharing is based) is the amount billed by the provider, facility, or provider of air ambulance services, and not only when the recognized amount (or with respect to air ambulance services, the amount on which cost sharing is based) is the QPA, as these items and services would also be eligible for the Federal IDR process (provided all other eligibility criteria are satisfied).

106

86 FR 36884.

Under 26 CFR 54.9816-6T(d)(1)(iv), 29 CFR 2590.716-6(d)(1)(iv), and 45 CFR 149.140(d)(1)(iv), a plan or issuer making disclosures about the QPA must include a statement that if the provider or facility wishes to initiate a 30-day open negotiation period for purposes of determining the amount of total payment, the provider or facility may contact the appropriate person or office to initiate open negotiation, and if the 30-day open negotiation period does not result in a determination, generally the provider or facility may initiate the Federal IDR process 4 days after the end of the open negotiation period. Under 26 CFR 54.9816-6T(d)(2), 29 CFR 2590.716-6(d)(2), and 45 CFR 149.140(d)(2), plans and issuers are required to disclose additional information in a timely manner upon the request of the provider or facility.

The Departments propose technical and conforming amendments to align these requirements with the October 2021 interim final rules

107

and current practice. First, the Departments acknowledge that 26 CFR 54.9816-6T(d), 29 CFR 2590.716-6(d), and 45 CFR 149.140(d) do not consistently include references to providers of air ambulances services when referring to providers and facilities, and propose amendments to clarify that these disclosure requirements apply with respect to providers of air ambulance services (in addition to providers and facilities). Specifically, in 26 CFR 54.9816-6T, 29 CFR 2590.716-6, and 45 CFR 149.140, the Departments propose to amend the introductory language in paragraph (d), paragraph (d)(1)(iv), and the introductory language of paragraph (d)(2) to clarify the applicability with respect to disclosures to providers of air ambulance services.

108

Second, the Departments propose to align the timeframes described in the disclosure with the timeframes established in the October 2021 interim final rules,

109

by specifying that days are counted using business days (rather than calendar days), where applicable. The Departments also propose an amendment to align the language in 26 CFR 54.9816-6T(d)(1)(iv), 29 CFR 2590.716-6(d)(1)(iv), and 45 CFR 149.140(d)(1)(iv) with the same requirements established in the October 2021 interim final rules by replacing the phrase “amount of total payment” with the term “out-of-network rate,” as defined in 26 CFR 54.9816-3T, 29 CFR 2590.716-3, and 45 CFR 149.30, and by describing an unsuccessful open negotiation period as not resulting in an “agreement on the amount of payment” rather than a “determination.”

107

86 FR 55980.

108

The Departments anticipate finalizing additional corrections to address this issue when finalizing the remainder of the July 2021 interim final rules.

109

26 CFR 54.9816-8T(b)(1)(i), 29 CFR 2590.716-8(b)(1)(i), and 45 CFR 149.510(b)(1)(i).

The Departments further propose to require that the statement also explain that the provider, facility, or provider of air ambulance services must notify the Departments as described under proposed 26 CFR 54.9816-8(b)(1)(i), 29 CFR 2590.716-8(b)(1)(i), and 45 CFR 149.510(b)(1)(i), as applicable, to initiate

open negotiation.

110

The Departments propose that plans and issuers include this explanation as part of the disclosure once the open negotiation notice can be submitted through the Federal IDR portal.

110

For a discussion of the proposed requirement to notify the Departments when initiating open negotiation,

see

section II.D.1.c. of this preamble.

As stated in the preamble to the July 2021 interim final rules

111

and the August 2022 final rules,

112

the Departments seek to ensure transparent and meaningful disclosure of information relating to the calculation of the QPA for providers, facilities, and providers of air ambulance services, while at the same time minimizing administrative burdens on plans and issuers and on the Federal IDR process. The Departments are now of the view that additional disclosure of information with the QPA is critical to ensuring that all parties have the information necessary to determine whether a payment dispute is eligible for the Federal IDR process. The Departments therefore propose to amend 26 CFR 54.9816-6T, 29 CFR 2590.716-6, and 45 CFR 149.140 by re-designating paragraph (d)(1)(v) as (d)(1)(vi) and adding a new paragraph (d)(1)(v) that would require plans and issuers to disclose the legal business name of the plan (if any) or issuer; the legal business name of the plan sponsor (if applicable); and the registration number assigned under proposed 26 CFR 54.9816-9, 29 CFR 2590.716-9, or 45 CFR 149.530, as applicable, if the plan or issuer is registered with the Federal IDR registry.

113

The Departments seek comment on the specific technical and operational steps that would be necessary for plans and issuers to disclose this additional information when providing an initial payment or notice of denial of payment. Further, the Departments are seeking comment on the appropriate implementation period that would allow plans and issuers to complete these steps to comply with these proposed rules, if finalized. As noted in section II.B. of this preamble, the Departments are also seeking comment on whether any of the additional proposed disclosures should be required to be communicated using a CARC or RARC specified in guidance issued by the Departments.

111

86 FR 36898.

112

87 FR 52625.

113

For a discussion of the proposal to establish a Federal IDR registry and assign a registration number to each plan and issuer,

see

section II.F. of this preamble.

D. Open Negotiation and Initiation of the Federal IDR Process

Section 9816(c)(1)(A) of the Code, section 716(c)(1)(A) of ERISA, section 2799A-1(c)(1)(A) of the PHS Act, and the October 2021 interim final rules establish that, when 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 plan or issuer or provider or facility may engage in open negotiations to determine the total out-of-network rate (inclusive of any cost sharing).

114

If the parties fail to reach an agreement through open negotiation, they may initiate the Federal IDR process. Section 9817(b) of the Code, section 717(b) of ERISA, and section 2799A-2(b) of the PHS Act 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 section 9816(c) of the Code, section 716(c) of ERISA, and section 2799A-1(c) of the PHS Act. Thus, the preamble and regulatory text describing open negotiations and the Federal IDR process generally apply to providers of air ambulance services, unless otherwise specified.

114

86 FR 55990.

1. Open Negotiation

The Departments propose to amend the open negotiation provisions of 26 CFR 54.9816-8T(b)(1)(i) and (ii), 29 CFR 2590.716-8(b)(1)(i) and (ii), and 45 CFR 149.510(b)(1)(i) and (ii) to establish additional requirements for initiating open negotiation and to revise the open negotiation period start date. In addition, the Departments propose to add a new paragraph at 26 CFR 54.9816-8(b)(1)(iii), 29 CFR 2590.716-8(b)(1)(iii), and 45 CFR 149.510(b)(1)(iii) that would establish a requirement that in response to a party's written notice of its intent to negotiate (open negotiation notice), the party in receipt of the notice must provide a written open negotiation response notice. In these proposed rules, the Departments propose amendments to the content requirements for the open negotiation notice. The Departments also propose to require an open negotiation response notice from non-initiating parties, including specific content requirements.

Section 9816(c)(1)(A) of the Code, section 716(c)(1)(A) of ERISA, section 2799A-1(c)(1)(A) of the PHS Act, and the October 2021 interim final rules establish that the open negotiation period may be initiated by either party during the 30-business-day period beginning on the day the provider, facility, or provider of air ambulance services receives either an initial payment or a notice of denial of payment for an item or service.

115

The October 2021 interim final rules provide that 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 the item or service for which the payment is the subject of open negotiation, the party initiating open negotiation must provide to the other party a written open negotiation notice.

116

Under 26 CFR 54.9816-8T(b)(1)(ii)(A), 29 CFR 2590.716-8(b)(1)(ii)(A), and 45 CFR 149.510(b)(1)(ii)(A), an open negotiation notice must include information sufficient to identify the item(s) and service(s) (including the date(s) the item(s) or service(s) were furnished, the service code, and the initial amount, if applicable, an offer of an out-of-network rate, and contact information for the party sending the open negotiation notice). The day on which the open negotiation notice is first sent by the party is the date that the 30-business-day open negotiation period begins. Consistent with the October 2021 interim final rules, negotiation during the open negotiation period occurs without the involvement of the Departments or a certified IDR entity.

117

Furthermore, the requirement to complete a 30-business-day open negotiation period before 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, they still must exhaust the 30-business-day open negotiation period before either party may initiate the Federal IDR process. The Departments encourage disputing parties to negotiate in good faith during this time period to reach an agreement on the out-of-network rate. The Departments expect parties to make a genuine effort to exchange information with one another at reasonable times and intervals with the goal of reaching a solution satisfactory to both parties. To the extent parties reach an agreement during the open negotiation period, they can avoid the administrative fee and

other costs associated with the Federal IDR process.

115

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. (86 FR 36900 through 36901).

116

86 FR 55990.

117

See

86 FR 55991.

The preamble to the October 2021 interim final rules explained that, given that the parties already would have made initial contact (namely, the provider, facility, or provider of air ambulance services transmitted a bill to the plan or issuer, and the plan or issuer sent an initial payment or notice of denial of payment to the provider, facility, or provider of air ambulance services), the Departments expected the parties to provide effective notice and encouraged the parties to take reasonable measures to confirm the other party's contact information and confirm electronic receipt through approaches such as read receipts, especially if a party does not initially respond to an open negotiation notice.

118

Further, the Departments contemplated that issues related to eligibility and jurisdiction would be resolved through the disclosures that plans and issuers are required to provide with their initial payment or notice of denial of payment or, through the required 30-business-day open negotiation period. However, disputing parties and certified IDR entities have reported that disputing parties are sometimes not actively negotiating with each other during the required period as expected by the Departments. In addition, non-initiating parties and certified IDR entities continue to express concern that initiating parties sometimes do not properly initiate or complete the open negotiation period before initiating the Federal IDR process. Plans and issuers also have expressed concern with the Departments and the certified IDR entities, that providers, facilities, and providers of air ambulance services overwhelm them with requests to negotiate items or services that are ineligible for the Federal IDR process. At the same time, providers, facilities, and providers of air ambulance services assert that plans and issuers rarely respond to their notices initiating open negotiation or provide inadequate information to determine whether the Federal IDR process applies during the open negotiation period.

118

86 FR 55990.

a. Determination of Payment Amount Through Open Negotiation

To improve communication and information exchange between disputing parties and promote efficiencies in the Federal IDR process, the Departments propose to amend the open negotiation provisions of 26 CFR 54.9816-8(b), 29 CFR 2590.716-8(b), and 45 CFR 149.510(b)(1) to impose new information exchange requirements and processes and to establish a process for tracking open negotiations through the Federal IDR portal in anticipation of initiation of a Federal IDR dispute.

First, the Departments propose to amend paragraph 26 CFR 9816-8(b)(1)(i), 29 CFR 2590.716-8(b)(1)(i), and 45 CFR 149.510(b)(1)(i) to establish a requirement that a party must provide a written open negotiation notice to the other party and to the Departments through the Federal IDR portal to initiate the open negotiation period.

119

Requiring a party to submit the open negotiation notice to the Departments in addition to the other party would provide a record of whether and when the open negotiation period was properly initiated, which is essential in determining eligibility for the Federal IDR process, and would create greater transparency among parties engaged in open negotiation, the Departments, and certified IDR entities.

119

26 CFR 9816-8T(b)(3), 29 CFR 2590.716-8(b)(3), and 45 CFR 149.510(b)(3).

Second, the Departments propose to amend 26 CFR 54.9816-8(b)(1)(i), 29 CFR 2590.716-8(b)(1)(i), and 45 CFR 149.510(b)(1)(i) to specify that the 30-business-day open negotiation period begins on the day a party first submits the open negotiation notice and a copy of the initial payment, notice of denial of payment, or other remittance advice, as specified at proposed 26 CFR 54.9816-8(b)(1)(ii)(A)(

12

), 29 CFR 2590.716-8(b)(1)(ii)(A)(

12

), and 45 CFR 149.510(b)(1)(ii)(A)(

12

), to the other party and the Departments through the Federal IDR portal. This amendment would not change the timeframe for engaging in open negotiations but would provide greater clarity for parties engaged in open negotiation and improve the shared understanding of deadlines related to the open negotiation period. The Departments seek comment on these proposed amendments.

b. Open Negotiation Response Notice

To have a meaningful open negotiation, the Departments are of the view that both parties must be active and responsive participants. The Departments' experience and feedback from disputing parties and certified IDR entities indicate that the Federal IDR process is less efficient overall when disputing parties are not engaging with each other during the open negotiation period. Therefore, the Departments propose at 26 CFR 54.9816-8(b)(1)(iii), 29 CFR 2590.716-8(b)(1)(iii), and 45 CFR 149.510(b)(1)(iii) to require that the party in receipt of the open negotiation notice provide a written notice and supporting documentation in response to the open negotiation notice (open negotiation response notice) to the other party and the Departments through the Federal IDR portal as soon as practicable, but no later than the 15th business day of the 30-business-day open negotiation period. Requiring the party in receipt of the open negotiation notice to submit an open negotiation response notice to both the other party and the Departments through the Federal IDR portal would help ensure that parties are responding to open negotiation notices and engaging with one another during the open negotiation period. To better inform the parties' negotiations, the Departments are proposing this 15-business-day timeframe to give the party in receipt of the open negotiation notice sufficient time to review and respond to the open negotiation notice. This would also allow the party that submitted the open negotiation notice to consider, at its discretion, the information included in the open negotiation response notice during (at a minimum) the remaining 15 business days in the 30-business-day open negotiation period.

These deadlines are intended to encourage meaningful participation in open negotiations and allow both parties time to consider offers and raise eligibility concerns prior to initiating the Federal IDR process. If a party were to fail to furnish an open negotiation response notice containing all required information to the other party and the Departments, the Departments would review and determine whether enforcement actions may be appropriate. However, failure to timely furnish an open negotiation response notice in any specific open negotiation would not extend the open negotiation period, delay the timeframe for initiation of the Federal IDR process, or affect either party's ability to initiate the Federal IDR process.

The Departments solicit comment on the proposed modifications to the requirements for submitting the open negotiation notice and the newly proposed open negotiation response notice. Specifically, the Departments seek comment on whether the party in receipt of the open negotiation notice should be required to furnish the open negotiation response notice to the other party and the Departments earlier than proposed to allow additional time for the party submitting the open negotiation notice to review the open negotiation response notice. The Departments also seek comment on imposing a deadline for the open

negotiation response notice later than the proposed deadline, including by the 20th business day or up to the last day of the 30-business-day open negotiation period. A longer response timeframe may be necessary for a party in receipt of open negotiation notice to review and respond if the party receives a high number of open negotiation notices within a short time period. However, submission of the open negotiation response notice at the end of the open negotiation period would not provide the party that submitted the open negotiation notice sufficient time to review, consider, and engage with the party submitting the open negotiation response notice in a meaningful manner prior to the deadline for initiation of the Federal IDR process. Additionally, the Departments seek comment on allowing the certified IDR entities, as a means of incentivizing participation in the proposed exchange of notices, to take into consideration a party's compliance with the 15-business-day deadline for the open negotiation response notice when making their payment determinations.

c. Open Negotiation Notice Content

The Departments propose to amend 26 CFR 54.9816-8(b)(1)(ii)(A), 29 CFR 2590.716-8(b)(1)(ii)(A), and 45 CFR 149.510(b)(1)(ii)(A) and add 26 CFR 54.9816-8(b)(1)(ii)(A)(

1

) through (

12

), 29 CFR 2590.716-8(b)(1)(ii)(A)(

1

) through (

12

), and 45 CFR 149.510(b)(1)(ii)(A)(

1

) through (

12

) to require that the open negotiation notice include additional information regarding the item or service under dispute and the party sending the open negotiation notice. The proposed amendments would add new elements and expand the information required on the open negotiation notice.

Under these proposed rules, the content elements to identify the item or service on the open negotiation notice would align with those that the Departments propose to require in the notice of IDR initiation to identify an item or service under dispute as specified in 26 CFR 54.9816-8(b)(2)(iii)(A), 29 CFR 2590.716-8(b)(2)(iii)(A), and 45 CFR 149.510(b)(2)(iii)(A) and would encourage consistency between open negotiation and the Federal IDR process. The Departments are of the view that requiring the additional elements as part of the open negotiation notice would help parties identify the item or service, the reasons for the denial of payment or initial payment amount, and whether the Federal IDR process applies. Each proposed new or amended element on the open negotiation notice is described in this section, and the Departments' reasoning for the proposed change is explained.

Under current rules, the open negotiation notice must include contact information for the party sending the notice. At proposed paragraphs 26 CFR 54.9816-8(b)(2)(iii)(A)(

1

) through (3), 29 CFR 2590.716-8(b)(2)(iii)(A)(

1

) through (3), and 45 CFR 149.510(b)(1)(ii)(A)(

1

) through (3), the Departments would require specific contact information sufficient to identify the provider, facility, or provider of air ambulance services, the plan or issuer, and any third party representing the parties in the open negotiation. This contact information would include legal business name, email address, phone number, and mailing address, as provided with the claim form submitted by the provider, facility, or air ambulance provider to the plan or issuer, which would encourage open negotiation initiation between the correct parties and effective communication of the required information.

In addition to the proposed standard contact information elements, parties would also be required to include the National Provider Identification (NPI) number to identify the provider, facility, or provider of air ambulance services and the IDR registration number, assigned under proposed 26 CFR 54.9816-9, 29 CFR 2590.716-9, and 45 CFR 149.530, to identify the plan or issuer (described further in section II.F. of this preamble).

Providers, facilities, and providers of air ambulance services would obtain the IDR registration number from the plan or issuer when the plan or issuer provides it with the initial payment or notice of denial of payment. The proposed registration number would help the provider, facility, or provider of air ambulance services to accurately identify the plan and issuer with which to initiate open negotiation, and the contact and plan information necessary to initiate open negotiation, particularly if the plan or issuer fails to clearly disclose such information. Including this element on the open negotiation notice would streamline the process of submitting the open negotiation notice by providing a validated source of plan and issuer business and contact information, which providers, facilities, and providers of air ambulance services often struggle to identify on documentation provided with the initial payment or the notice of denial of payment and would promote greater consistency and accuracy in initiating open negotiation with the correct plan or issuer.

The Departments acknowledge, as described in section II.F. of this preamble, that the plan or issuer may not be registered in the IDR registry at the time the provider, facility, or provider of air ambulance services initiates the open negotiation period. In these circumstances, the party submitting the open negotiation notice would attest that the party receiving the open negotiation notice was not registered prior to the date the party submitted its open negotiation notice and the registration number would not be required to be included in the notice. The submitting party would use the contact information currently required by the disclosure requirements established in sections 26 CFR 54.9816-6T(d)(1), 29 CFR 2590.716-6(d)(1), and 45 CFR 149.140(d)(1) with the

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