Proposed Rule2021-19797
Requirements Related to Air Ambulance Services, Agent and Broker Disclosures, and Provider Enforcement
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Published
September 16, 2021
Issuing agencies
Personnel Management OfficeTreasury DepartmentInternal Revenue ServiceLabor DepartmentEmployee Benefits Security AdministrationHealth and Human Services Department
Abstract
This document sets forth proposed rules implementing certain provisions of Title I (No Surprises Act) and Title II (Transparency) of Division BB of the Consolidated Appropriations Act, 2021 (CAA). These proposed rules would amend and add provisions to existing rules under the Internal Revenue Code (Code), the Employee Retirement Income Security Act (ERISA), the Public Health Service Act (PHS Act), and the Federal Employees Health Benefits (FEHB) Act. These proposed rules would implement certain provisions of the No Surprises Act that would increase transparency by requiring group health plans and health insurance issuers in the group and individual markets, and FEHB carriers, to submit certain information about air ambulance services to the Secretaries of Health and Human Services (HHS), Labor, and the Treasury, and the Director of the Office of Personnel Management, as applicable, and by requiring providers of air ambulance services to submit certain information to the Secretaries of HHS and Transportation. These proposed rules also include HHS-only proposed rules that would increase transparency by requiring a health insurance issuer offering individual health insurance coverage or short-term, limited-duration insurance to disclose to policyholders and to report to HHS any direct or indirect compensation provided by the issuer to an agent or broker associated with enrolling individuals in such coverage. These proposed rules would also provide the process by which HHS would investigate complaints and potential violations of PHS Act provisions and, if warranted, take enforcement action, including the imposition of civil money penalties, against providers and facilities, including providers of air ambulance services. These proposed rules would amend existing regulations to clarify the process to investigate complaints and potential violations of the PHS Act and impose civil money penalties against plans and issuers. These proposed rules would also establish the process by which HHS would impose civil money penalties if a provider of air ambulance services fails to submit some or all required data to HHS.
Full Text
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<title>Federal Register, Volume 86 Issue 177 (Thursday, September 16, 2021)</title>
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[Federal Register Volume 86, Number 177 (Thursday, September 16, 2021)]
[Proposed Rules]
[Pages 51730-51779]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-19797]
[[Page 51729]]
Vol. 86
Thursday,
No. 177
September 16, 2021
Part II
Office of Personnel Management
Department of the Treasury
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Internal Revenue Service
Department of Labor
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Employee Benefits Security Administration
Department of Health and Human Services
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5 CFR Part 890
26 CFR Part 54
29 CFR Part 2590
45 CFR Parts 144, 148, 149, et al.
Requirements Related to Air Ambulance Services, Agent and Broker
Disclosures, and Provider Enforcement; Proposed Rule
Federal Register / Vol. 86 , No. 177 / Thursday, September 16, 2021 /
Proposed Rules
[[Page 51730]]
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OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 890
RIN 3206-AO28
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 54
[REG-114676-21]
RIN 1545-BQ15
DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Part 2590
RIN 1210-AC08
DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Parts 144, 148, 149, and 150
[CMS-9907-P]
RIN 0938-AU61
Requirements Related to Air Ambulance Services, Agent and Broker
Disclosures, and Provider Enforcement
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: Proposed rules.
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SUMMARY: This document sets forth proposed rules implementing certain
provisions of Title I (No Surprises Act) and Title II (Transparency) of
Division BB of the Consolidated Appropriations Act, 2021 (CAA). These
proposed rules would amend and add provisions to existing rules under
the Internal Revenue Code (Code), the Employee Retirement Income
Security Act (ERISA), the Public Health Service Act (PHS Act), and the
Federal Employees Health Benefits (FEHB) Act. These proposed rules
would implement certain provisions of the No Surprises Act that would
increase transparency by requiring group health plans and health
insurance issuers in the group and individual markets, and FEHB
carriers, to submit certain information about air ambulance services to
the Secretaries of Health and Human Services (HHS), Labor, and the
Treasury, and the Director of the Office of Personnel Management, as
applicable, and by requiring providers of air ambulance services to
submit certain information to the Secretaries of HHS and
Transportation. These proposed rules also include HHS-only proposed
rules that would increase transparency by requiring a health insurance
issuer offering individual health insurance coverage or short-term,
limited-duration insurance to disclose to policyholders and to report
to HHS any direct or indirect compensation provided by the issuer to an
agent or broker associated with enrolling individuals in such coverage.
These proposed rules would also provide the process by which HHS would
investigate complaints and potential violations of PHS Act provisions
and, if warranted, take enforcement action, including the imposition of
civil money penalties, against providers and facilities, including
providers of air ambulance services. These proposed rules would amend
existing regulations to clarify the process to investigate complaints
and potential violations of the PHS Act and impose civil money
penalties against plans and issuers. These proposed rules would also
establish the process by which HHS would impose civil money penalties
if a provider of air ambulance services fails to submit some or all
required data to HHS.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, by October 18, 2021.
ADDRESSES: In commenting, please refer to file code CMS-9907-P.
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 <a href="https://www.regulations.gov">https://www.regulations.gov</a>. 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-9907-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-9907-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: For matters related to air ambulance
reporting: Padma Babubhai Shah, Office of Personnel Management, (202)
606-4056; Kari DiCecco, Internal Revenue Service, Department of the
Treasury, (202) 317-5500; Matthew Meidell or Pinar Shapiro, Employee
Benefits Security Administration, Department of Labor, (202) 693-8335;
Christina Whitefield, Centers for Medicare & Medicaid Services,
Department of Health and Human Services, (301) 492-4172. For matters
related to agent and broker disclosures under Part 148: Adam Wheeler,
(410) 786-3942.
For matters related to enforcement under Part 150: Judah Katz,
(410) 786-3879 or Lisa Cuozzo, (410) 786-1746.
SUPPLEMENTARY INFORMATION: Inspection of Public Comments: Comments
received before the close of the comment period are available for
viewing by the public, including any personally identifiable or
confidential business information that is included in a comment. We
post comments received before the close of the comment period on the
following website as soon as possible after they have been received:
<a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the search instructions on that
website to view public comments. The Centers for Medicare & Medicaid
Services (CMS) will not post on <a href="http://Regulations.gov">Regulations.gov</a> public comments that
make threats to individuals or institutions or suggest that the
individual will take actions to harm the individual. CMS continues to
encourage individuals not to submit duplicative comments. We will post
acceptable comments from multiple unique commenters even if the content
is identical or nearly identical to other comments.
I. Background
A. Legislative and Regulatory Overview
Title I of the Health Insurance Portability and Accountability Act
of 1996 (HIPAA) added Title XXVII to the Public Health Service Act (PHS
Act) to establish various reforms to the group and individual health
insurance markets. The Patient Protection and Affordable Care Act,
Public Law 111-148, was enacted on March 23, 2010, and the Health Care
and Education Reconciliation Act of 2010, Public Law 111-152, was
enacted on March 30, 2010. (These statutes are collectively known as
the ``Affordable Care Act'' or ``ACA.'') The ACA reorganized,
[[Page 51731]]
amended, and added to the provisions of Part A of Title XXVII of the
PHS Act relating to group health plans and health insurance issuers in
the group and individual markets. The term ``group health plan''
includes both insured and self-insured group health plans. The ACA
added section 9815(a)(1) to the Internal Revenue Code (Code) and
section 715(a)(1) to the Employee Retirement Income Security Act
(ERISA) to incorporate the provisions of Part A of Title XXVII of the
PHS Act into the Code and ERISA, and made them applicable to group
health plans and health insurance issuers providing health insurance
coverage in connection with group health plans. Sections 2701 through
2728 of the PHS Act are thereby incorporated into the Code and ERISA.
The Consolidated Appropriations Act, 2021 (CAA) was enacted on
December 27, 2020 and includes Title I (No Surprises Act) and Title II
(Transparency) in Division BB. The CAA added provisions that apply to
plans and issuers offering group or individual health insurance
coverage in chapter 100 of the Code, in part 7 of ERISA, and in a new
Part D of Title XXVII of the PHS Act. The CAA also amended the Federal
Employees Health Benefits (FEHB) Act, 5 U.S.C. 8901, et seq., by adding
a new subsection (p) to 5 U.S.C. 8902 that requires each contract with
an FEHB carrier to require the carrier to comply with requirements
described in certain provisions of the Code, ERISA, and the PHS Act in
the same manner as those provisions apply to a group health plan or
health insurance issuer offering group or individual health insurance
coverage. The CAA provisions that apply to providers, facilities, and
providers of air ambulance services, such as requirements related to
cost sharing, prohibitions on balance billing for certain items and
services, and requirements related to disclosures about balance billing
protections, were added to Title XXVII of the PHS Act in a new Part E.
Section 106(a) of the No Surprises Act requires providers of air
ambulance services to report certain information to the Secretaries of
HHS and Transportation. Section 106(b) of the No Surprises Act added
parallel provisions at section 9823 of the Code, section 723 of ERISA,
and section 2799A-8 of the PHS Act. These provisions include
requirements for plans and issuers to report claims and other
information regarding air ambulance services and providers of air
ambulance services.
The Director of the Office of Personnel Management (OPM) is of the
view that the collection of FEHB plan air ambulance claims data is
necessary and appropriate for a more complete understanding of air
ambulance services provided across the industry. Further, the OPM
Director is of the view that this data would inform OPM for purposes of
enforcing the protections provided under 5 U.S.C. 8902(p) and for the
appropriate administration and oversight of FEHB plans.
Sections 106(a) and (b) of the No Surprises Act impose these air
ambulance data reporting requirements for 2 years. Section 106(c) of
the No Surprises Act further requires HHS, in consultation with the
Secretary of Transportation, to issue a comprehensive public report
summarizing the data and providing an assessment of the state and
certain aspects and characteristics of the air ambulance market.
Section 106(e) of the No Surprises Act provides for the imposition of
civil money penalties of not more than $10,000 on providers of air
ambulance services for failure to submit required data. Section
106(e)(3) specifies that certain provisions of section 1128A of the
Social Security Act (SSA) shall apply to a civil money penalty under
section 106(e) of the No Surprises Act in the same manner as such
provisions apply to a penalty or proceeding under section 1128A of the
SSA. In addition, section 418 of the Federal Aviation Administration
(FAA) Reauthorization Act of 2018 \1\ directs the Secretary of
Transportation, in consultation with HHS, to form an Advisory Committee
on Air Ambulance and Patient Billing (Advisory Committee). Section
106(d) of the No Surprises Act directs HHS, in consultation with the
Secretary of Transportation, to take into consideration (as applicable
and to the extent feasible) any recommendations included in the
Advisory Committee's report.
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\1\ Public Law 115-254.
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The charter of the Advisory Committee allowed for the formation of
subcommittees to perform specific assignments. The Advisory Committee
formed three subcommittees, which included a subcommittee on the
Prevention of Balance Billing. At its second full Committee meeting in
May 2021, the Advisory Committee recommended the collection of eight
specific data elements from providers of air ambulance services: (1)
Average cost per trip; (2) air ambulance base rates and patient-loaded
statute mileage rates; (3) ancillary fees for specialty services, like
neonatal, cardiac, and ``other'' (for example, specialized medicines
like snakebites in rural areas); (4) reimbursement data aggregated by
payor type (Medicare, Medicaid, self-insured, private insurance) and
per transport, based on median rate and zip code, as well as further
identifying data regarding private insurance by provider type
(hospital-sponsored program, municipality-sponsored program, hospital
independent partnership (hybrid) program, or independent program); (5)
alternate revenue sources (for example, subsidies or membership
programs) broken down per transport for reporting purposes; (6) volume
of transports, segregated by aircraft type (fixed wing and rotary wing)
and takeoff zip code for government purposes, or for public use when
aggregated with other data; (7) market share for air transport,
obtained from the FAA certificate holder and identifying the
certificate holder's parent company; and (8) market share for health
care, by looking at the program type for the FAA certificate holder.\2\
Section 9823 of the Code, section 723 of ERISA, and section 2799A-8 of
the PHS Act require information to be reported jointly to HHS, the
Department of Labor (DOL), and the Department of the Treasury
(collectively, the Departments).
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\2\ ``Meeting Summary, Second Meeting of the AAPB Advisory
Committee,'' U.S. Department of Transportation, Air Ambulance and
Patient Billing Advisory Committee, May 27-28, 2021, Washington, DC
pp. 15-17. Available at: <a href="https://www.transportation.gov/sites/dot.gov/files/2021-07/AAPB%20Second%20Meeting%20Minutes.pdf">https://www.transportation.gov/sites/dot.gov/files/2021-07/AAPB%20Second%20Meeting%20Minutes.pdf</a>.
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Section 106(d) of the No Surprises Act requires HHS, in
consultation with the Secretary of Transportation, to undertake notice
and comment rulemaking to specify the form and manner in which plans
and issuers must submit this information.
The CAA amended the FEHB Act to require that protections from air
ambulance surprise billing must be offered by carriers in the same
manner as those protections apply under section 9817 of the Code,
section 717 of ERISA, and section 2799B-2 of the PHS Act and to require
that protections from surprise billing by providers of air ambulance
services with respect to FEHB enrollees apply in the same manner as
those protections apply under section 2799B-5 of the PHS Act.
The CAA also amended Title XXVII of the PHS Act to add section
2746, which requires a health insurance issuer offering individual
health insurance coverage or short-term, limited-duration insurance to
disclose to enrollees in such coverage and to report annually to HHS
the direct or indirect compensation provided by the issuer to an agent
or broker associated with enrolling
[[Page 51732]]
individuals in such coverage. Section 2746(d) directs HHS to finalize,
through notice and comment rulemaking, the timing, form, and manner in
which issuers must make these disclosures to consumers and submit
reports to HHS. These new statutory requirements are applicable
beginning December 27, 2021.
Section 2723(b) of the PHS Act, as amended by the CAA, authorizes
HHS to impose civil money penalties as a means of enforcing the
individual and group market requirements contained in Part A and Part D
of Title XXVII of the PHS Act with respect to health insurance issuers
when a state fails to substantially enforce these provisions, as well
as with respect to group health plans that are non-Federal governmental
plans.\3\ Section 2799B-4 of the PHS Act, as added by section 104 of
the No Surprises Act, establishes a similar framework for HHS's
enforcement authority over providers and facilities, including
providers of air ambulance services, in states that fail to
substantially enforce the requirements of Part E of Title XXVII of the
PHS Act, as added by the CAA. This provision also authorizes HHS to
impose civil money penalties of up to $10,000 per violation on
providers and facilities, including providers of air ambulance
services, that fail to comply with the applicable PHS Act requirements
in such states. It further provides that certain provisions of section
1128A of the SSA shall apply to a civil money penalty or assessment
under section 2799B-4 of the PHS Act in the same manner as such
provisions apply to a penalty, assessment, or proceeding under
subsection (a) of section 1128A of the SSA.
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\3\ Also see section 2761 of the PHS Act, which establishes a
parallel framework for enforcement of the individual market
requirements contained in Part B of Title XXVII of the PHS Act.
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The Departments are issuing regulations in several phases
implementing provisions of Title I (No Surprises Act) and Title II
(Transparency) of Division BB of the CAA. Later this year, the
Departments intend to issue regulations regarding the Federal
independent dispute resolution (IDR) process (sections 103 and 105 of
the No Surprises Act) and patient protections through transparency and
the patient-provider dispute resolution process (section 112 of the No
Surprises Act).
On July 13, 2021, the Departments and OPM issued interim final
rules entitled Requirements Related to Surprise Billing; Part I,\4\
which generally apply to group health plans and health insurance
issuers offering group or individual health insurance coverage
(including grandfathered health plans) with respect to plan years (in
the individual market, policy years) beginning on or after January 1,
2022; FEHB health benefits plans with respect to contract years
beginning on or after January 1, 2022; and health care providers and
facilities, and providers of air ambulance services beginning on
January 1, 2022 (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; sections 2799A-1(a)-(b),
2799A-2(a), 2799B-1, 2799B-2, 2799B-3, and 2799B-5 of the PHS Act; and
5 U.S.C. 8902(p), to protect consumers from surprise medical bills for
emergency services, air ambulance services furnished by
nonparticipating providers of air ambulance services, and non-emergency
services furnished by nonparticipating providers at participating
facilities in certain circumstances.
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\4\ Requirements Related to Surprise Billing; Part I, 86 FR
36872, (July 13, 2021). Public comments on this rule are due by
September 7, 2021.
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Among other requirements, the July 2021 interim final rules require
emergency services to be covered without any prior authorization,
without regard to whether the health care provider or facility
furnishing the emergency services is a participating provider or a
participating emergency facility with respect to the services, and
without regard to any other term or condition of the plan or coverage
other than the exclusion or coordination of benefits or a permitted
affiliation or waiting period. With respect to emergency services
furnished by nonparticipating providers or facilities, air ambulance
services furnished by nonparticipating providers of air ambulance
services, and non-emergency services furnished by nonparticipating
providers at certain participating facilities, the July 2021 interim
final rules generally limit cost sharing for out-of-network services to
in-network levels, require such cost sharing to count toward any in-
network deductibles and out-of-pocket maximums, and prohibit balance
billing in certain circumstances. Balance billing refers to the
practice of out-of-network providers billing patients for the
difference between: (1) The provider's billed charges; and (2) the
amount collected from the plan or issuer plus the amount collected from
the patient in the form of cost sharing (such as a copayment,
coinsurance, or amounts paid toward a deductible).
Division BB of the CAA also includes: Provisions regarding
transparency in plan and insurance identification cards (section 107);
continuity of care (section 113); accuracy of provider network
directories (section 116); prohibition on gag clauses (section 201)
that are applicable for plan years beginning on or after January 1,
2022; and pharmacy benefit and drug cost reporting (section 204) that
is required by December 27, 2021. The Departments intend to undertake
rulemaking to fully implement these provisions, but rules regarding
some of these provisions might not be issued until after January 1,
2022. The Departments note that any such rulemaking to fully implement
these provisions would include a prospective applicability date that
provides plans, issuers, providers, and facilities, as applicable, a
reasonable amount of time to comply with new or clarified requirements.
Until rulemaking to fully implement these provisions is finalized and
effective, plans and issuers are expected to implement the requirements
using a good faith, reasonable interpretation of the statute.
B. Stakeholder Consultation and Input
The Departments consulted with stakeholders on policies related to
Division BB of the CAA, including air ambulance data collection,
disclosure and reporting of agent and broker compensation, and
enforcement of the PHS Act. The Departments held several listening
sessions with consumers, health care providers, facilities, providers
of air ambulance services, employers, agents, brokers, health plans and
health insurance issuers, advocacy groups, and the actuarial community
to gather public input. The Departments also solicited input from state
representatives on numerous relevant topics and consulted with
stakeholders through regular meetings with the National Association of
Insurance Commissioners (NAIC), and regular contact with state
regulators, issuers, trade groups, consumer advocates, employers, and
other interested parties. The Departments considered all public input
received as the Departments developed the policies in these proposed
rules and welcome additional public comment as part of these proposed
rules.
C. Structure of Proposed Rules
The regulations outlined in these proposed rules would be codified
in 5 CFR part 890; 26 CFR part 54; 29 CFR part 2590; and 45 CFR parts
144, 148, 149, and 150.
[[Page 51733]]
The proposed changes to 45 CFR part 144 would make technical and
conforming amendments regarding the purpose of part 150.
The proposed changes to 45 CFR part 148 would set forth
requirements for health insurance issuers offering individual health
insurance coverage or short-term, limited-duration insurance to
disclose to policyholders information regarding direct and indirect
compensation provided by the issuer to an agent or broker associated
with enrolling individuals in such coverage. The proposed amendments to
45 CFR part 148 also set forth proposed requirements related to the
annual reports that health insurance issuers offering individual health
insurance coverage or short-term, limited-duration insurance would be
required to submit to HHS regarding the direct and indirect
compensation paid to agents and brokers. In addition, these proposed
rules would make technical and conforming amendments regarding the
basis, purpose, and scope of 45 CFR part 148.
The proposed changes to 45 CFR part 149 would require plans,
issuers, and providers of air ambulance services to submit to HHS
certain data regarding air ambulance services. Proposed rules under 26
CFR 54.9823-1 and 29 CFR 2590.723 would provide that group health plans
and health insurance issuers offering group health insurance coverage
that satisfy the requirements under 45 CFR part 149 that implement
section 2799A-8 of the PHS Act would be treated as satisfying the
parallel requirements under section 9823 of the Code and section 723 of
ERISA. The proposed change to 5 CFR part 890 would require FEHB
carriers to comply with the requirements of 45 CFR 149.230 with respect
to an FEHB plan in the same manner as such provisions apply to a group
health plan or health insurance issuer offering group or individual
health insurance coverage. OPM would coordinate with HHS to receive
FEHB air ambulance services data.
The proposed changes to 45 CFR part 150 would make procedural
changes to the process HHS utilizes to investigate possible violations
of the PHS Act, including proposed amendments to clarify the process to
investigate complaints and potential violations of the PHS Act and to
impose civil money penalties against non-Federal governmental plans and
issuers of group or individual health insurance coverage. The proposed
changes would also set forth the process for imposing civil money
penalties on providers and facilities, including providers of air
ambulance services, for failure to comply with 45 CFR part 149 and
failure to provide data required in section 106(a) of the No Surprises
Act.
II. Provisions of the Proposed Rules on Reporting Requirements
Regarding Air Ambulance Services--Departments of HHS, Labor, and the
Treasury
A. In General
These proposed rules propose requirements related to data
collection from providers of air ambulance services, as required by
section 106(a) of the No Surprises Act, and from plans and issuers
offering group or individual health insurance coverage, as required by
section 9823 of the Code, section 723 of ERISA, and section 2799A-8 of
the PHS Act, as added by section 106(b) of the No Surprises Act.
These proposed rules also include an HHS-only proposed rule that
sets forth civil money penalties specified in section 106(e) of the No
Surprises Act that would apply to providers of air ambulance services
for failure to submit data as required under section 106(a) of the No
Surprises Act.\5\
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\5\ Section 106(b) of the No Surprises Act amends part D of
Title XXVII of the PHS Act by adding new section 2799A-8. As such,
the enforcement provisions under PHS Act section 2723 and 45 CFR
part 150 extend to PHS Act section 2799A-8 air ambulance data
reporting requirements on issuers and non-Federal governmental group
health plans. Section 106(a) of the No Surprises Act is codified in
the United States Code as a note to PHS Act section 2799A-8.
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Air ambulance services frequently result in surprise medical bills
due to individuals' inabilities to select an in-network provider of air
ambulance services when faced with an urgent medical situation. Because
of low network participation rates by providers of air ambulance
services, individuals are also unable to avoid potential higher cost
sharing and balance billing by out-of-network providers. A 2019 study
by the Government Accountability Office (GAO) analyzed data from 2017
and found that 69 percent of air ambulance transports of privately-
insured patients were out-of-network.\6\
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\6\ Air Ambulance: Available Data Show Privately-Insured
Patients Are at Financial Risk. GAO-19-292 (March 2019).
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When individuals are unable to avoid providers or providers of air
ambulance services that are not in their plan's network, it raises
health care costs and exposes individuals to financial risk.\7\ The
ability to balance bill is often used as leverage by providers to
obtain higher in-network payments, which results in higher premiums,
higher cost sharing for consumers, and overall increased health care
expenditures.\8\ Studies have shown that surprise medical bills can be
substantial, including with respect to air ambulance services. The GAO
found that for privately-insured patients, the median price charged by
providers of air ambulance services was about $36,400 for a rotary-wing
transport and $40,600 for a fixed-wing transport in 2017.\9\ In an
earlier study,\10\ the GAO noted that there is no national data on
balance billing and the extent to which providers of air ambulance
services have contracts with health insurance companies. Some states
have attempted to collect data on balance billing. The GAO study stated
that a Michigan state review of 19 cases of balance billing for air
ambulance services between 2013 and 2016 showed an average balance bill
of $31,000. Data on cases investigated and closed by the Maryland
Insurance Administration between January 2014 and April 2018 showed
that the amount of balance bills for air ambulance services ranged from
$12,300 to $52,000.
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\7\ Cooper Z et al., Out-of-Network Billing and Negotiated
Payments for Hospital-Based Physicians, Health Affairs 39, No. 1,
2020. doi: 10.1377/hlthaff.2019.00507.
\8\ See, Cooper, Z. et al, Surprise! Out-Of-Network Billing For
Emergency Care in the United States, NBER Working Paper 23623,
20173623; Duffy, E. et al., ``Policies to Address Surprise Billing
Can Affect Health Insurance Premiums.'' The American Journal of
Managed Care 26.9 (2020): 401-404; and Brown E.C.F., et al., The
Unfinished Business of Air Ambulance Bills, Health Affairs Blog
(March 26, 2021), DOI: 10.1377/hblog20210323.911379, available at
<a href="https://www.healthaffairs.org/do/10.1377/hblog20210323.911379/full/">https://www.healthaffairs.org/do/10.1377/hblog20210323.911379/full/</a>.
\9\ Air Ambulance: Available Data Show Privately-Insured
Patients Are at Financial Risk. GAO-19-292 (March, 2019).
\10\ Air Ambulance: Data Collection and Transparency Needed to
Enhance DOT Oversight. GAO-17-637 (July 27, 2017).
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Although some states have enacted laws to regulate the billing
practices of providers of air ambulance services, many of these efforts
have been unsuccessful due to a preemption provision in the Airline
Deregulation Act of 1978 (ADA). The ADA states, in relevant part, ``. .
. a State, political subdivision of a State, or political authority of
at least two States may not enact or enforce a law, regulation, or
other provision having the force and effect of law related to a price,
route, or service of an air carrier that may provide air transportation
under this subpart.'' \11\ Assuming that a provider of air ambulance
services is an ``air carrier'' covered by this provision, as is
typical,\12\ the provision preempts state
[[Page 51734]]
laws that would limit the amount of payment that the provider of air
ambulance services would otherwise be entitled to receive.\13\ Even
within states that have enacted protections against surprise billing,
state insurance regulations typically apply only to health insurance
coverage, as ERISA generally preempts state laws that would otherwise
regulate self-insured group health plans sponsored by private
employers.\14\ Finally, states are limited in their ability to address
surprise bills that involve an out-of-state provider, including an out-
of-state provider of air ambulance services.
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\11\ 49 U.S.C. 41713(b).
\12\ A provider of air ambulance services is a covered ``air
carrier'' if it has economic authority from the Department of
Transportation to provide interstate air transportation. Most
providers of air ambulance services have such authority under the
provisions of 14 CFR part 298. See, for example, Scarlett v. Air
Methods Corp., 922 F.3d 1053 (10th Cir. 2019); Air Evac EMS v.
Cheatham, 910 F.3d 751 (4th Cir. 2018).
\13\ See, for example, Guardian Flight LLC v. Godfread, 991 F.3d
916, 921 (8th Cir. 2021) (holding that ADA preempted state law
prohibiting out-of-network providers of air ambulance services from
balance billing and requiring them to accept amounts paid by
insurers); Bailey v. Rocky Mountain Holdings, LLC, 889 F.3d 1259,
1269-72 (11th Cir. 2018) (holding that ADA preempted state law that
prohibited providers of air ambulance services from collecting more
than amount specified in fee schedule).
\14\ In addition, FEHB contract terms preempt state law in
accordance with 5 U.S.C. 8902(m)(1).
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As states, the Federal Government, oversight agencies, and advocacy
groups have examined the issue of air ambulance services and balance
billing, it has become clear that there is a lack of comprehensive,
national data on air ambulance costs, transports, and contractual
arrangements between providers of air ambulance services and plans and
issuers. In its 2017 report, the GAO recommended that the Federal
Government assess available data to determine what additional
information would be needed to address future concerns regarding unfair
or deceptive practices.\15\ In addition, section 418 of the FAA
Reauthorization Act of 2018 directed the Secretary of Transportation,
in consultation with HHS, to form an Advisory Committee on Air
Ambulance and Patient Billing (Advisory Committee). In January 2021,
the Advisory Committee's subcommittee on the Prevention of Balance
Billing recommended to the full Advisory Committee the collection of
data to ``(a) improve understanding of the air ambulance industry by
policymakers, (b) increase transparency of market conditions impacting
air ambulance services, and (c) indirectly improve contract negotiation
between payors and air ambulance providers and suppliers.'' \16\
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\15\ See Air Ambulance: Data Collection and Transparency Needed
to Enhance DOT Oversight. GAO-17-637 (July 27, 2017).
\16\ Air Ambulance and Patient Billing Advisory Committee's
Subcommittee on Prevention of Balance Billing, ``A Report on the
Prevention of Balance Billing'', January 2021, DOT-OST-2018-0206-
0026_attachment_1. At its second full committee meeting in May 2021,
the Advisory Committee recommended the collection of eight specific
data elements from providers of air ambulance services. See section
I.A of the preamble. The Committee's final report containing this
recommendation had yet to be produced at the time this rulemaking
was published.
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Section 106 of the No Surprises Act takes important steps to
increase transparency regarding air ambulance services. Specifically,
section 106(a) of the No Surprises Act requires providers of air
ambulance services to submit certain data to the Secretaries of HHS and
Transportation. Section 106(b) of the No Surprises Act requires plans
and issuers to submit certain data on air ambulance services to the
Secretaries of HHS, DOL, and the Treasury, through section 9823 of the
Code, section 723 of ERISA and section 2799A-8 of the PHS Act. Section
106(d) of the No Surprises Act requires HHS, in consultation with the
Secretary of Transportation, to specify through notice and comment
rulemaking, the form and manner in which the reports described under
section 106(a) of the No Surprises Act (regarding reporting by
providers of air ambulance services) and section 9823 of the Code,
section 723 of ERISA, and section 2799A-8 of the PHS Act (regarding
reporting by plans and issuers) must be submitted to such Secretaries.
Therefore, in these proposed rules, HHS proposes amendments to 45 CFR
part 149 that specify the form and manner of these reports. In
addition, the Department of the Treasury and DOL propose to add 26 CFR
54.9823-1 and 29 CFR 2590.723 to specify that group health plans and
health insurance issuers offering group health insurance coverage would
satisfy the requirements under section 9823 of the Code and section 723
of ERISA, respectively, by submitting a report to HHS that satisfies
the requirements of 45 CFR 149.230. In the interest of burden reduction
and efficiency, the Departments propose that the required information
reporting by group health plans and health insurance issuers offering
group and individual health insurance coverage, together with the
required information reporting by FEHB carriers,\17\ would be satisfied
through reporting to HHS.
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\17\ OPM proposes to authorize and require FEHB carriers to
submit air ambulance data to HHS. OPM will coordinate with HHS to
receive FEHB air ambulance services data.
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B. Basis and Scope (45 CFR 149.10)
HHS proposes to amend 45 CFR 149.10(a) to add a reference to
section 106(a) of the No Surprises Act, which requires data reporting
by providers of air ambulance services, to the basis of part 149.
C. Applicability (45 CFR 149.20)
HHS proposes to amend 45 CFR 149.20 to include a reference to the
new subpart C, which under these proposed rules would include data
submission requirements for plans and issuers. See section II.F. of the
preamble for discussion of the applicability of the proposed rules
regarding data submission requirements for providers of air ambulance
services.
D. Definitions (45 CFR 149.30)
HHS proposes to amend 45 CFR 149.30 by adding definitions relevant
to data submission requirements for providers of air ambulance services
and plans and issuers. The Departments propose to define an air
ambulance base as a site from which a provider of air ambulance
services operates to provide air ambulance services. The Departments
propose to define a National Provider Identifier (NPI) by referencing
the definition in 45 CFR 162.406. The Departments seek comment on these
proposed definitions.
E. Reporting Requirements for Plans and Issuers Regarding Air Ambulance
Services (45 CFR 149.230)
HHS proposes to amend part 149 by adding 45 CFR 149.230 to subpart
C to describe the data reporting requirements for plans and issuers.
Proposed 45 CFR 149.230(a) includes general requirements, the timing
and form of the data submission, and the reporting requirements in
circumstances when a transfer of business occurs.
As discussed in sections I.A and II.A of the preamble, section
106(b) of the No Surprises Act added parallel provisions at section
9823 of the Code, section 723 of ERISA, and section 2799A-8 of the PHS
Act requiring plans and issuers to submit information regarding air
ambulance services jointly to the Departments. Section 106(d) of the No
Surprises Act directs HHS, in consultation with the Secretary of
Transportation, to undertake notice and comment rulemaking to specify
the form and manner in which plans and issuers must submit this
information. Therefore, in these proposed rules, HHS proposes
amendments to 45 CFR part 149 that specify the form and manner for the
reports required in section 9823 of the Code, section 723 of ERISA, and
section 2799A-8 of the PHS Act, as enacted in section 106(b) of the No
Surprises Act. In the interest of burden reduction and efficiency, the
Department of the Treasury and DOL
[[Page 51735]]
propose to add 26 CFR 54.9823-1 and 29 CFR 2590.723, respectively, to
provide that plans and issuers would satisfy the requirements to submit
information pursuant to section 9823 of the Code and section 723 of
ERISA by satisfying the information reporting requirements under
proposed 45 CFR 149.230. Similarly, as discussed further in section IV
of the preamble, OPM proposes to add conforming reporting requirements
to require FEHB carriers to comply with the requirements of proposed 45
CFR 149.230 with respect to an FEHB plan in the same manner as such
provisions apply to a group health plan or health insurance issuer
offering group or individual health insurance coverage.
The Departments interpret section 9823 of the Code, section 723 of
ERISA, and section 2799A-8 of the PHS Act to require plans and issuers
to submit data regarding air ambulance services on a calendar year
basis. The Departments are of the view that a calendar year reporting
period would maximize the uniformity of the data across all submitters
and provide a suitable basis for performing the trend analyses that
section 106(c) of the No Surprises Act requires HHS to conduct as part
of developing a comprehensive public report. In order to ensure
completeness of the data, the Departments propose that data with
respect to a calendar year would include both data relevant to air
ambulance services furnished within the calendar year, as well as data
relevant to services for which payments were made within the calendar
year (even if the service was provided in a different calendar year).
The Departments are of the view that this approach is necessary due to
the limited duration of the data collection and statutory deadlines
that may not allow sufficient time for claims run-out, particularly
with respect to providers of air ambulance services that do not have
contractual relationships with plans and issuers.
Based on the expectation that this rulemaking would be finalized
during 2021, as required in section 106(d) of the No Surprises Act, and
consistent with the statutory requirement on plans and issuers to
report the required data not later than 90 days after the last day of
the applicable calendar year, the Departments propose that plans and
issuers would be required to submit the data for calendar year 2022 by
March 31, 2023, and the data for calendar year 2023 by March 30, 2024.
In order to ensure the completeness of the data, in proposed 45 CFR
149.230(a)(3), the Departments further propose that an issuer that
acquires from another issuer a line or block of business that provided
coverage of air ambulance services during calendar years 2022 or 2023
would be required to report the air ambulance services data on behalf
of the acquired business for the entire applicable calendar year. The
Departments propose that these reporting requirements would apply to
the selling and acquiring issuers if a sale or transfer occurs as a
result of issuers being merged, combined, spun off, affected by, or
engaging in any similar transaction during a calendar year. In
addition, to ensure completeness and timeliness of reporting of all
relevant air ambulance services data, the proposed rule would provide
that the Secretary of HHS may provide examples of these transactions in
guidance.
In addition, the Departments and OPM are publishing a proposed
information collection, which would provide additional technical
details regarding the required data elements, for public comment at the
same time as or shortly after publishing these proposed rules. The
proposed information collection would include a proposed data template
and instructions. The proposed information collection would specify
that plans and issuers do not need to submit information required in
proposed 45 CFR 149.230 if they did not receive claims or make or
expect to make payments for air ambulance services with respect to the
reporting period.
Section 9823 of the Code, section 723 of ERISA, and section 2799A-8
of the PHS Act require plans and issuers offering group or individual
health insurance coverage to submit claims data for air ambulance
services that include the following information about the claims:
Whether the services were provided on an emergent or non-emergent
basis; whether the provider of such services is part of a hospital-
owned or sponsored program, municipality-sponsored program, hospital
independent partnership (hybrid) program, independent program, or
tribally operated program in Alaska; whether the transport originated
in a rural or urban area; the type of aircraft used for the transport
(fixed-wing or rotary-wing air ambulance); and whether the provider of
the air ambulance service has a contract with the plan or issuer to
provide air ambulance services.
Those statutory sections further require plans and issuers to
provide, in addition to the information described in the preceding
paragraph of the preamble, such other information regarding providers
of air ambulance services as the Departments may specify. Section
106(c) of the No Surprises Act requires HHS, in consultation with the
Secretary of Transportation, to produce a comprehensive public report
that must include several different analyses that require collection of
other data not specifically identified in section 9823 of the Code,
section 723 of ERISA, and section 2799A-8 of the PHS Act. These
analyses include: An assessment of the average charges for air
ambulance services; amounts paid by plans and issuers to providers of
air ambulance services; amounts paid out-of-pocket by consumers; the
frequency of patient balance billing; the frequency of claims appeals
made by providers of air ambulance services to plans and issuers; and
any other data relating to air ambulance services determined necessary
and appropriate by Secretaries of HHS and Transportation. To perform
these analyses, the Secretaries of HHS and Transportation would need to
be able to match the information collected from plans and issuers to
the information collected from providers of air ambulance services
under section 106(a) of the No Surprises Act.
Therefore, in proposed 45 CFR 149.230(b), HHS proposes to require
submission of claims-level data on air ambulance services in order to
collect the information necessary to satisfy these statutory
requirements related to the HHS public report. Moreover, the
Departments are of the view that submission of claims-level data would
be less burdensome than submission of multiple sets of total claims
data aggregated by the various categories described in section 9823 of
the Code, section 723 of ERISA, and section 2799A-8 of the PHS Act,
particularly given the relatively small volume of claims for air
ambulance services. It is the Departments' understanding that
information regarding the service delivery model of the provider of air
ambulance services (such as affiliation with a hospital or municipality
or other similar program) may not be available to plans and issuers.
Therefore, the Departments propose to require plans and issuers to
report that data element only to the extent it is available to them.
The Departments appreciate the need to ensure both stakeholder and
consumer privacy, particularly when collecting claims-level data, and
therefore would take precautions to protect the confidentiality of
claims-level data. HHS proposes to collect only that claims-level data
that would be sufficient for producing the comprehensive report
required by the statute. Moreover, HHS intends to
[[Page 51736]]
collect and maintain the information using information technology (IT)
systems that are designed to meet all of the security standards
protocols established under Federal law or by HHS relevant to such
information.\18\
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\18\ HHS's enterprise-wide information security and privacy
program was launched in FY 2003, to help protect HHS against
potential IT threats and vulnerabilities. The program ensures
compliance with Federal mandates and legislation, including the
Federal Information Security Management Act and the President's
Management Agenda. The HHS Cybersecurity Program plays an important
role in protecting HHS's ability to provide mission-critical
operations. In addition, the HHS Cybersecurity Program is the
cornerstone of the HHS IT Strategic Plan.
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The claims-level data elements that HHS proposes to require plans
and issuers to submit to support HHS's publication of the comprehensive
public report, but that are not explicitly listed in section 9823 of
the Code, section 723 of ERISA, and section 2799A-8 of the PHS Act,
include: The date of service; billing NPI and Current Procedural
Terminology (CPT)/Healthcare Common Procedure Coding System (HCPCS)
codes information; and certain information about each air ambulance
transport (such as the loaded miles and whether the transport was an
inter-facility transport). These data elements, specifically the NPI
and the date of service, would enable the Secretaries of HHS and
Transportation to combine and validate the information collected from
plans and issuers and the information collected from providers of air
ambulance services.
Similarly, to enable the Secretaries of HHS and Transportation to
analyze and summarize the data in an appropriate and meaningful manner
in a comprehensive public report, HHS also proposes that the claims-
level data elements include the market type of the plan or coverage
associated with the air ambulance services. For fully-insured coverage,
this would include the individual, small group, and large group
markets, as defined in section 2791(e) of the PHS Act. For self-insured
group health plans, this would include identification of the plan
sponsor as a small employer or large employer, as defined in section
2791(e) of the PHS Act, with reasonable estimates allowed when the
exact information on the size of the employer is not available. Under
this proposal, FEHB plans would also be separately identified.
Further, to satisfy the requirements for the comprehensive public
report described in section 106(c) of the No Surprises Act, including
the required assessments of the frequency of patient balance billing
and claims appeals made by air ambulance providers, HHS proposes that
the claims-level data elements include certain claim adjudication
information (including whether the claim was paid, partially paid,
denied, or appealed, and the reason for the denial and the outcome of
the appeal, if applicable), as well as certain claim payment
information (including submitted charges, amounts paid by the payor,
and cost-sharing amount).
In order to streamline the provision of the required disclosures
and to avoid unnecessary duplication of reporting with respect to group
health insurance coverage, the Departments propose that, to the extent
coverage under a plan consists of group health insurance coverage, the
plan satisfies the reporting requirements if the plan requires the
issuer offering the coverage to provide the information pursuant to a
written agreement between the plan and the issuer. For example, if a
plan and an issuer enter into a written agreement under which the
issuer agrees to report the information required under proposed 45 CFR
149.230, and the issuer fails to submit a complete or timely report,
then the issuer, but not the plan, would have violated these reporting
requirements. However, if a plan has knowledge that the required report
has not been submitted, the Departments would encourage the plan to
work with the issuer to correct the noncompliance as soon as
practicable or notify the applicable agency enforcing this requirement.
The Departments also highlight that nothing prevents a self-insured
group health plan from contracting with another party, such as a third-
party administrator (TPA), to report the required information,
including, to the extent permitted under other Federal or state laws,
entering into a written agreement for the other party to indemnify the
plan in the event the other party fails to submit a complete or timely
report. However, the plan would be required to monitor the other party
to ensure that the entity is submitting the required information as it
is ultimately the responsibility of the self-insured group health plan
to report the information required under proposed 45 CFR 149.230. The
proposed information collection instrument is designed in a manner that
would enable a TPA that submits information on behalf of multiple self-
insured group health plans to submit a single submission that includes
the required data elements for all such plans.
Excepted benefits are exempt from requirements in chapter 100 of
the Code, part 7 of ERISA, and Part A and Part D of Title XXVII of the
PHS Act.<SUP>19 20</SUP> Short-term, limited-duration insurance is
excluded from the definition of individual health insurance coverage
and is exempt from the new requirements established in section 2799A-8
of the PHS Act. Therefore, short-term, limited-duration insurance (as
defined in 26 CFR 54.9801-2, 29 CFR 2590.701-2, and 45 CFR 144.103) and
coverage that consists solely of excepted benefits (as described in
section 9832 of the Code, section 733 of ERISA, and section 2791 of the
PHS Act) would not be subject to the reporting requirements set forth
in 45 CFR 149.230 in these proposed rules. Individual coverage health
reimbursement arrangements and other account-based plans, as described
in 26 CFR 54.9815-2711(d)(6)(i), 29 CFR 2590.715-2711(d)(6)(i), and 45
CFR 147.126(d)(6)(i), make reimbursements subject to a maximum fixed
dollar amount for a period, such that the benefit design of these
coverage options makes concepts related to the reporting of data
related to air ambulance services inapplicable. Therefore, under these
proposed rules, the reporting requirements also would not apply to
individual coverage health reimbursement arrangements and other
account-based plans, consistent with the existing applicability
provisions in 45 CFR 149.20 with respect to other No Surprises Act
requirements in 45 CFR part 149.
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\19\ See section 9831 of the Code, section 732 of ERISA, and
section 2722 of the PHS Act.
\20\ The CAA amended the PHS Act statutory exemption for these
products to include the new requirements established under the new
Part D of the PHS Act. See section 102(a)(3)(B) of the No Surprises
Act, which made conforming amendments to add the phrase ``and Part
D'' to section 2722(b), (c)(1), (c)(2) and (c)(3) of the PHS Act.
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Section 9823 of the Code, section 723 of ERISA, and section 2799A-8
of the PHS Act (and other provisions of the No Surprises Act that are
applicable to group health plans and health insurance issuers offering
group or individual health insurance coverage) apply to grandfathered
health plans. Section 1251 of the Affordable Care Act provides that
grandfathered health plans are not subject to certain provisions of the
Code, ERISA, and the PHS Act, as added by the Affordable Care Act, for
as long as they maintain their status as grandfathered health plans.
For example, grandfathered health plans are subject neither to the
requirement to cover certain preventive services without cost sharing
under section 2713 of the PHS Act, nor to the annual limitation on cost
sharing set forth
[[Page 51737]]
under section 2707(b) of the PHS Act. If a plan or coverage were to
lose its grandfathered status, it would be required to comply with both
provisions, in addition to several other requirements. However, the CAA
does not include an exception for grandfathered health plans that is
comparable to section 1251 of the Affordable Care Act. Furthermore,
section 102(d)(2) of the No Surprises Act amended section 1251(a) of
the Affordable Care Act to clarify that the new and recodified patient
protections provisions of the No Surprises Act, including those related
to choice of health care professional, apply to grandfathered health
plans. Therefore, the provisions of these proposed rules that apply to
plans and issuers, proposed to be codified at 45 CFR 149.460, would
apply to grandfathered plans.
The Departments seek comment on the use of the calendar year as the
reporting period, including the time it typically takes to fully
adjudicate and pay claims for air ambulance services (furnished by
either participating or nonparticipating providers of air ambulance
services), and the proposed data elements, as well as any potential
challenges that plans and issuers may face in reporting the proposed
data elements. The Departments also seek comment on the potential
format for reporting the data.
F. Reporting Requirements Regarding Air Ambulance Services for
Providers of Air Ambulance Services (45 CFR 149.460)
HHS proposes to amend 45 CFR part 149 by adding 45 CFR 149.460 to
subpart E to describe the data reporting requirements for providers of
air ambulance services. Proposed 45 CFR 149.460(a) includes the general
requirements, the timing and form of the report, and the reporting
requirements in circumstances where a transfer of business occurs.
Proposed 45 CFR 149.460(b) outlines the information that would be
required to be reported.
In proposed 45 CFR 149.460(a)(2), HHS interprets section 106(a) of
the No Surprises Act to require providers of air ambulance services to
submit data regarding air ambulance services on a calendar year basis,
consistent with the proposal for the reporting period in proposed 45
CFR 149.230(a)(2). Moreover, typically, providers of air ambulance
services do not operate based on plan years. HHS proposes that data
with respect to a calendar year would include data relevant to air
ambulance services furnished within the calendar year as well as data
relevant to services for which payments were made within the calendar
year (even if the service was provided in a different calendar year).
HHS expects that these proposed rules would be finalized during 2021,
as required in section 106(d) of the No Surprises Act, and consistent
with the requirement at section 106(a) of the No Surprises Act on
providers of air ambulance services to report the required data not
later than 90 days after the last day of the applicable calendar year.
Thus, HHS proposes that providers of air ambulance services would be
required to submit the data for calendar year 2022 by March 31, 2023,
and submit the data for calendar year 2023 by March 30, 2024. In order
to ensure completeness of the data, in proposed 45 CFR 149.460(a)(3),
HHS further proposes that a provider of air ambulance services that
acquires a line or block of business from another provider of air
ambulance services that provided such services during calendar years
2022 or 2023 would be required to report the air ambulance services
data on behalf of the acquired business for the entire applicable
calendar year. The Departments propose that these reporting
requirements would apply to the selling and acquiring providers of air
ambulance services if a sale or transfer occurs as a result of
providers of air ambulance services being merged, combined, spun off,
affected by, or engaging in any similar transaction during a calendar
year. In addition, to ensure completeness and timeliness of reporting
of all relevant air ambulance services data, the proposed rule would
provide that the Secretary of HHS may provide examples of these
transactions in guidance.
Section 106(a) of the No Surprises Act requires providers of air
ambulance services to submit the following information regarding air
ambulance services: Cost data separated to the maximum extent possible
by air transportation costs and costs of medical services and supplies
associated with furnishing air ambulance services; the number and
location of all air ambulance bases; the number and type of aircraft
operated by the provider; the number of transports by payor mix
(including plans, issuers, government payors, and the uninsured); the
number of claims denied by group health plans or health insurance
issuers and the reasons for denials; and the number of emergency and
non-emergency transports by base and by type of aircraft.
Section 106(a) of the No Surprises Act further requires providers
of air ambulance services to report, in addition to the information
described in the preceding paragraph, such other information regarding
air ambulance services as the Secretaries of HHS and Transportation may
specify. As noted in section II.E. of the preamble, section 106(c) of
the No Surprises Act requires HHS to produce a comprehensive public
report that must address several topics that require collection of
additional information not specifically identified in section 106(a) of
the No Surprises Act. These topics include: The percentage of providers
of air ambulance services in various service delivery models (such as
hospital-sponsored or municipality-sponsored programs); an assessment
of the extent of competition among providers of air ambulance services
on the basis of price and services offered; the average charges for air
ambulance services; amounts paid by plans, issuers, and consumers; an
assessment of the presence of air ambulance bases in, or with the
capability to serve, rural areas and the relative growth in air
ambulance bases in rural and urban areas over time; the percentage of
providers of air ambulance services that have contracts with plans or
issuers; unreasonable market concentration or excessive market
domination that enable unreasonable price increases, and analyses of
the debt collection practices against patients under various service
delivery models; the frequency of patient balance billing, and the
frequency of claims appeals made by providers of air ambulance services
to plans and issuers; and any other data relating to air ambulance
services determined necessary and appropriate by the Secretaries of HHS
and Transportation. To address these topics, including performing the
required analyses and assessments, HHS would need to be able to match
the information collected from plans and issuers to the information
collected from providers of air ambulance services.
Section 106(c)(2) of the No Surprises Act permits the Secretaries
of HHS and Transportation to incorporate information from independent
experts and third-party sources in the development of the report. HHS
examined various sources of data and spoke with several industry
experts and determined that in several areas, the data required to
produce the analyses required in section 106(c)(1) of the No Surprises
Act are not available from other sources. Therefore, in order to
support the development of the report required in section 106(c)(1),
HHS proposes collecting the necessary data from providers of air
ambulance
[[Page 51738]]
services as described in these proposed rules. However, HHS seeks
comment on additional data sources that may inform the development of
the report, and the extent to which such data sources could be used in
lieu of collecting specific data elements.
In proposed 45 CFR 149.460(b), HHS proposes requiring submission of
air ambulance base-level and transport-level data on air ambulance
services, as well as data elements not specifically identified in
section 106(a) of the No Surprises Act, in order to collect the
information necessary to satisfy these statutory requirements. For
example, collection of data on revenue of the provider of air ambulance
services from various sources, including non-transport sources, is
necessary and appropriate to assess the competitiveness of the market
for air ambulance services for purposes of the public report required
under section 106(c) of the No Surprises Act, as well as to validate
the data against the data collected from plans and issuers. Similarly,
collection of air ambulance base-level data would help inform
assessments regarding the competitiveness of the markets as well as
capacity, service availability, and gaps in rural access to air
ambulance services, which the Secretaries of HHS and Transportation are
required to assess under section 106(c). Further, collection of
transport-level data would enable the Secretaries of HHS and
Transportation to conduct the assessments required under section 106(c)
regarding the prices and services offered, the average charges for air
ambulance services, and amounts paid by plans, issuers, and consumers,
and would allow the Secretaries to complete the analyses of the debt
collection practices, the frequency of patient balance billing, and the
frequency of claims appeals.
Section 106(a)(2) of the No Surprises Act requires providers of air
ambulance services to submit data on the number and location of all air
ambulance bases they operate, the number and type of aircraft they
operate, and the number of transports disaggregated by payor mix. In
proposed 45 CFR 149.460(b)(2), HHS proposes collecting this information
for each base, as well as additional information specific to the base
and the aircraft that would enable the Secretaries of HHS and
Transportation to conduct the assessments required in section 106(c) of
the No Surprises Act. This additional information would include the
NPIs associated with the base, the number and type of staff, the number
and type of air ambulance transports per aircraft (including scene
response patient transports, inter-facility patient transports, and
transports of organs, medical personnel, and medical supplies), and the
number of air ambulance responses for the base, including the number of
such responses that did not result in transports. The additional
information would also include the service delivery model(s) of the
base (a hospital-owned or sponsored program, municipality-sponsored
program, hospital independent partnership (hybrid) program, independent
program, or tribally operated program in Alaska) and whether the base
shares operational costs with the affiliated or sponsor organizations,
to complement and support the data required to be collected under
section 9823(b)(1)(B) of the Code, section 723(b)(1)(B) of ERISA,
section 2799A-8(b)(1)(B) of the PHS Act, and section 106(a)(2)(D) of
the No Surprises Act. The rationale for collecting this additional
information is that service delivery models may vary by air ambulance
base in addition to by provider. The additional information would also
include base-specific data related to the providers' of air ambulance
services in-network contractual arrangements with plans and issuers as
well as other, non-direct payor contracts with plans, issuers, or other
entities (including, but not limited to, TPAs or provider networks).
This additional information would complement and support required data
submissions and would also include air medical subscriptions or
ambulance/emergency medical service membership programs associated with
the base, and whether the base operates ground ambulance services in
addition to air ambulance services. Finally, collection of this
additional information would enable analyses under various provisions
of section 106(c)(1) of the No Surprises Act.
Section 106(a) of the No Surprises Act requires providers of air
ambulance services to submit cost data for air ambulance services, as
HHS determines appropriate, and section 106(a) requires providers of
air ambulance services to separate, to the maximum extent possible, air
transportation costs and the costs of medical services and supplies.
HHS reviewed the ambulance cost reporting forms developed for the
Medicare Ground Ambulance Data Collection System, ambulance cost
reporting forms developed by states, a cost report study prepared for
the Association of Air Medical Services and Members, a review of
several studies on air ambulances services, consulted with the
Secretary of Transportation and subject matter experts, and held
listening sessions and additional conversations with providers of air
ambulance services. Based on these activities, HHS determined that the
service delivery or organizational model of a provider of air ambulance
services, the designation of the service area of a base (rural or
urban),\21\ and the identification of fixed and variable costs are all
important factors affecting the costs and revenues of providers of air
ambulance services. Because these factors vary at the air ambulance
base level, HHS proposes in 45 CFR 149.460(b) to require submission of
detailed cost and revenue data at the air ambulance base level, as well
as at the regional and corporate level, for each air ambulance base, if
applicable. The data HHS proposes to collect would enable the
separation of fixed and variable costs of providers of air ambulance
services, as well as medical costs as opposed to air transportation
costs.
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\21\ HHS may apply a custom definition or a broadly accepted
definition, such as the one used by CMS for the Medicare Ambulance
Fee Schedule, to determine whether air ambulance bases and services
are provided in rural or urban areas. More detail on the Medicare
Ambulance Fee Schedule is available at: <a href="https://www.cms.gov/medicare/medicare-fee-for-service-payment/ambulancefeeschedule">https://www.cms.gov/medicare/medicare-fee-for-service-payment/ambulancefeeschedule</a>.
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HHS proposes in 45 CFR 149.460(b)(3) that the required cost data be
reported in the following categories: Labor costs by type of staff;
facility costs by facility (including annual lease, rental, or mortgage
costs, other costs of ownership, insurance, maintenance and
improvements, utilities, taxes, computers and software, and other
facility costs); vehicle costs by vehicle (including vendor fees,
depreciation, safety enhancements, non-medical equipment (such as
communications technology), registration and license, taxes, insurance,
maintenance equipment and parts, fuel, and capital medical equipment);
equipment and supplies; and overhead and vendor costs (including
insurance, training, billing, accounting and finance, human resources,
travel, marketing, sales, dispatch or call center, IT support, legal,
medical direction, fees, fines, and taxes).
HHS proposes in 45 CFR 149.460(b)(4) that the required revenue data
would include: Total revenue from paid air ambulance transports, by
payor type, as well as revenue from other sources (such as contracts
with facilities such as hospitals, prisons, and nursing homes); revenue
from emergency air medical services other than for transports (for
example, for transportation of organs, medical personnel, supplies, or
equipment on an
[[Page 51739]]
emergency basis); revenue from sub-contracted ambulance services; fees
for standby events; payments from non-direct contracts such as waiver,
rental, lease, and supplemental arrangements; air medical subscriptions
and ambulance or emergency medical service membership programs;
charitable donations and foundation funding; program-related
investments; receipt of local taxes earmarked for emergency medical
services; contract revenues from local governments in return for air
ambulance services; enterprise funds and utility rates; sales of assets
and services; bond or debt financing; state or local donation of
vehicles or durable equipment; and funding grants or the provision of
time-limited funding from a government entity (including Federal,
state, local, or other). The revenue data would enable the Secretaries
of HHS and Transportation to conduct the holistic assessments required
in various provisions of section 106(c)(1) of the No Surprises Act,
including with respect to the ability of providers of air ambulance
services to compete on the basis of price and services in various
geographic areas, these providers' financial capability to serve rural
areas, the relationship of the average charges for air ambulance
services to business costs and market dynamics and characteristics,
potential anti-competitive behaviors by providers of air ambulance
services, and other factors that may affect the costs of air ambulance
services.
Finally, section 106(a)(2) of the No Surprises Act requires
providers of air ambulance services to submit the following data
regarding air ambulance transports: The number of transports by payor
mix (group health plans, health insurance issuers, state and Federal
Government payors, and the uninsured); the number of claims for air
ambulance services that have been denied payment by plans or issuers
and the reasons for such denials; and the number of emergent and non-
emergent transports disaggregated by air ambulance base and type of
aircraft. In 45 CFR 149.460(b)(5), HHS proposes to require submission
of transport-level data on air ambulance services in order to satisfy
these statutory reporting requirements, as well as to collect the data
necessary to enable HHS, in consultation with the Secretary of
Transportation, to conduct the assessments required in section 106(c)
of the No Surprises Act.
The transport-level data elements in addition to those specifically
identified in section 106(a) of the No Surprises Act that HHS proposes
to collect from providers of air ambulance services include: Date of
service; billing NPI and CPT/HCPCS codes information; and certain
information about the transport (such as the air ambulance base, flight
duration, loaded miles, pick-up (origin) and drop-off (destination)
locations and the point of ambulance pick-up zip code, and whether the
transport was a scene response patient transport, inter-facility
patient transport, or other transport (such as organ, medical
personnel, or medical supplies transport)). These data elements would
enable the Secretaries of HHS and Transportation to identify, combine,
and validate the information collected from plans and issuers, and the
information collected from providers of air ambulance services, as well
as evaluate potential gaps in rural access. Consistent with the
requirements in section 106(a) of the No Surprises Act and to enable
HHS to combine and validate the information collected from providers of
air ambulance services under these proposed rules with air ambulance
data from other sources, as well as to enable HHS to assess abusive
patient collection practices across various payors as required in
section 106(c)(1)(I) of the No Surprises Act, HHS proposes requiring
identification of the primary payor type for each transport, such as
Medicare fee-for-service (FFS), Medicare Advantage, Medicaid, Veterans'
Health Administration, TRICARE, Indian Health Service, group health
plan, health insurance issuer, FEHB plan, Workers' Compensation,
patient cost-sharing, and patient self-pay. Further, to satisfy the
requirements for the comprehensive public report described in section
106(c) of the No Surprises Act, HHS proposes that the transport-level
data elements should include information regarding the contractual
arrangement with the plan or issuer, if applicable, to furnish air
ambulance services under the plan or coverage, respectively, to support
the assessment required in section 106(c)(1)(F) of the No Surprises
Act, as well as the payment methodology for the transport (such as the
base rate, mileage, and intervention or other charges), if applicable,
as recommended by experts. For the same reasons, HHS proposes that the
transport-level data elements should also include: Certain claim
adjudication information (including whether the claim was paid, denied,
or appealed, and the reason for the denial or the outcome of the
appeal, if applicable) to support the data collection and analyses
required in sections 106(a)(2)(E) and (c)(1)(J) of the No Surprises
Act; certain payment information (including submitted charges, amounts
paid by the payor not including the patient, and cost-sharing amount
(if applicable)) to support the assessment required in section
106(c)(1)(C) of the No Surprises Act; the amount billed to the patient,
the amount collected from the patient, and whether the bill was
referred for collection, including lawsuits, liens, or wage garnishment
actions to support the assessments required in section 106(c)(1)(G) and
(c)(1)(I) of the No Surprises Act; and information on any payments from
sources other than the primary payor, such as membership fees and state
or municipal subsidies to support the analyses required in section
106(c)(1)(B), (c)(1)(H), and (c)(1)(K) of the No Surprises Act.
In order to protect stakeholder and consumer privacy, particularly
when collecting transport-level data, HHS would take precautions to
protect the confidentiality of transport-level data. HHS proposes to
collect only that transport-level data that would be sufficient for
producing the comprehensive report required by the statute. HHS intends
to collect and maintain the information using information technology
(IT) systems that are designed to meet all of the security standard
protocols established under Federal law or by HHS relevant to such
information.
HHS is publishing the proposed information collection for public
comment at the same time as or shortly after these proposed rules. The
proposed information collection would include a proposed data template
and instructions.
HHS seeks comment on the use of the calendar year as the reporting
period, including the time it typically takes payors to fully
adjudicate and pay claims for air ambulance services (furnished by
either participating or nonparticipating providers of air ambulance
services), the proposed data elements described in this section of the
preamble, the appropriate levels for reporting of these data elements
(regional/corporate, base, transport), and potential challenges that
providers of air ambulance services may face in reporting the proposed
data elements, including any special considerations for the reporting
of the proposed data elements with respect to municipality and other
government-owned or sponsored providers of air ambulance services. HHS
also seeks comment on the potential format for reporting the data.
[[Page 51740]]
III. Provisions of the Proposed Rules--Department of HHS
A. Part 144--Requirements Relating to Health Insurance Coverage
1. Basis and Purpose (45 CFR 144.101)
HHS proposes conforming amendments to 45 CFR 144.101 to reflect the
proposed amendments to 45 CFR part 150, described in section III.C of
the preamble. Specifically, HHS proposes to revise 45 CFR 144.101(e)
\22\ to include references to the enforcement-related provisions added
by the No Surprises Act (section 2799B-4 of the PHS Act and section
106(e) of the No Surprises Act), and to specify that the enforcement
provisions in 45 CFR part 150 apply to the provisions of 45 CFR part
149 concerning group or individual health insurance, providers and
facilities, and providers of air ambulance services.
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\22\ The July 2021 interim final rules redesignated paragraph
(d) of 45 CFR 144.101 as paragraph (e) and further redesignated
paragraph (e) of 45 CFR 144.101 as paragraph (f). Although the
effective date of the July 2021 interim final rules is not until
September 13, 2021, references to paragraph (e) in these proposed
rules are references to the newly redesignated paragraph (e)
(formerly paragraph (d)). This rule also proposes a technical
correction to 45 CFR 144.103(e)(2) to correct a cross-reference that
was inadvertently not updated when paragraph (d) was redesignated.
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B. Part 148--Requirements for the Individual Health Insurance Market
1. Authority
HHS proposes to make technical corrections to the authority listed
for 45 CFR part 148. More specifically, HHS proposes to update the list
to reference the Federal insurance reforms applicable to the individual
market captured in PHS Act sections 2722 through 2763, codified at 42
U.S.C. 300gg-21 through 300gg-63, along with PHS Act sections 2791 and
2792, codified at 42 U.S.C. 300gg-91 and 300gg-92. This would include
new section 2746 of the PHS Act, as added by section 202(c) of Title II
of Division BB of the CAA, in the list of authorities for 45 CFR part
148. Finally, HHS proposes to remove the reference to PHS Act section
2711, codified at 42 U.S.C. 300gg-11, because this statutory provision
is not implemented as part of the HHS regulations in 45 CFR part
148.\23\
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\23\ See 45 CFR 147.126. Also see 45 CFR 146.123.
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2. Basis and Purpose (45 CFR 148.101)
HHS proposes to amend 45 CFR 148.101 to expand the purpose of 45
CFR part 148. Specifically, HHS proposes to add a reference to the new
reporting and disclosure requirements regarding agent and broker
compensation that these proposed rules would add as a new subpart F to
45 CFR part 148 to implement the requirements of section 2746 of the
PHS Act, as added by section 202(c) of Title II of Division BB of the
CAA.
3. Scope and Applicability Date (45 CFR 148.102)
HHS proposes to amend 45 CFR 148.102 by adding paragraph (a)(3) to
specify that the requirements in proposed 45 CFR 148.410 would apply to
health insurance issuers of individual health insurance coverage and
short-term, limited-duration insurance. HHS also proposes to amend
paragraph (b) by excepting 45 CFR 148.410 from the applicability dates
specified in paragraph (b), as these proposed rules set forth the
applicability date specific to 45 CFR 148.410 in that section.
Section 2746 of the PHS Act, as added by section 202(c) of Title II
of Division BB of the CAA, applies to grandfathered individual health
insurance coverage, for the reasons set forth in section II.E. of the
preamble. Therefore, the provisions in proposed 45 CFR 148.410 that
apply to individual health insurance coverage, would apply to
grandfathered as well as nongrandfathered individual health insurance
coverage.
4. Subpart F--Requirements Related to Reporting and Disclosure
HHS proposes to add a new subpart F to 45 CFR part 148 and new 45
CFR 148.410 within that subpart to implement the requirements of
section 2746 of the PHS Act, as added by section 202(c) of Title II of
Division BB of the CAA. Section 2746 of the PHS Act requires health
insurance issuers offering individual health insurance coverage or
short-term, limited-duration insurance to make disclosures to enrollees
and submit reports to HHS regarding direct and indirect compensation
provided by the issuer to an agent or broker associated with enrolling
individuals in such coverage. Sections 2746(b) and (c) of the PHS Act
detail the specific requirements for disclosure and reporting,
respectively. HHS proposes to codify these requirements in new proposed
45 CFR 148.410.
Agents and brokers enter into appointment arrangements with health
insurance issuers; these arrangements, which are generally regulated by
state law, govern compensation provided to agents and brokers for
assisting consumer enrollment in an issuer's plans. The specific
compensation arrangement between a health insurance issuer and the
agent or broker is typically laid out in a written document such as a
commission schedule. Compensation arrangements may also include other
types of compensation, such as fees and bonuses. Section 2746 of the
PHS Act improves the transparency of this compensation system by
requiring the disclosure of this compensation information to consumers
and reporting of this information to HHS.
5. Subpart F--Requirements Related to Reporting and Disclosure--
Disclosure of Agent and Broker Compensation to Individuals in
Individual Health Insurance Coverage or Short-Term, Limited-Duration
Insurance (45 CFR 148.410)
a. Health Insurance Issuer Standards
HHS proposes to add, in 45 CFR 148.410(a), a general statement of
the obligations of health insurance issuers offering individual health
insurance coverage or short-term, limited-duration insurance, to
disclose to policyholders and report to HHS on an annual basis direct
and indirect compensation provided by the issuer to an agent or broker
associated with enrolling individuals in such coverage.
HHS proposes to add, in 45 CFR 148.410(b), definitions of key terms
in these proposed rules. HHS proposes to define ``agent or broker''
through a cross-reference to the definition for the term in 45 CFR
155.20. Section 2746 of the PHS Act applies to both direct and indirect
compensation paid to an agent or broker by a health insurance issuer
offering individual health insurance coverage or short-term, limited-
duration insurance, but does not define direct and indirect
compensation. Therefore, HHS proposes regulatory definitions for these
key terms that define direct and indirect compensation in a manner that
covers all forms of consideration that might be transferred between an
issuer offering individual health insurance coverage or short-term,
limited-duration insurance and an agent or broker for enrollment in
such coverage, regardless of the method by which that consideration is
transferred.
In new proposed 45 CFR 148.410(b)(3), direct compensation is
defined as monetary amounts, including sales and base commissions, paid
by an issuer that are attributable directly to the policy, certificate,
or contract of insurance and that are paid to an agent or broker for
the sale, placement, or renewal of individual health insurance coverage
or short-term, limited-duration insurance. HHS proposes in new proposed
45 CFR 148.410(b)(4) to define
[[Page 51741]]
indirect compensation as payments by an issuer attributable indirectly
to a policy, certificate, or contract of insurance to agents, brokers,
and other persons for items other than sales and base commission.
Examples of indirect compensation include service fees, consulting
fees, finders' fees, profitability and persistency bonuses, awards,
prizes, volume-based incentives, and non-monetary forms of
compensation. HHS proposes in new proposed 45 CFR 148.410(b)(2) to
define a commission schedule as an itemized list or table that provides
the commission levels that are paid by an issuer for the sale,
placement, or renewal of individual health insurance coverage or short-
term, limited-duration insurance. These definitions are based on the
most common and essential terms HHS has observed in various examples of
issuer commission schedules in the individual market. HHS proposes to
define policyholder in new proposed 45 CFR 148.410(b)(5) for purposes
of this section as the individual who purchases individual health
insurance coverage or short-term, limited-duration insurance and is
responsible for the payment of premiums.
b. Disclosure Requirements
To ensure transparency of agent and broker compensation when
purchasing individual health insurance coverage or short-term, limited-
duration insurance, and to implement sections 2746(b)(1) and (2) of the
PHS Act, HHS proposes in new proposed 45 CFR 148.410(c) to codify the
requirement that health insurance issuers offering individual health
insurance coverage or short-term, limited-duration insurance must
disclose to a potential or existing policyholder the amount of direct
and indirect compensation provided to an agent or broker associated
with enrolling the policyholder in the individual health insurance
coverage or short-term, limited-duration insurance. This disclosure
would be required to include the commission schedule used to determine
the compensation owed to an agent or broker as part of the appointment
contract between the agent or broker and the health insurance issuer
offering individual health insurance coverage or short-term, limited-
duration insurance, as well as the structure for compensation not
captured on the commission schedule.
Consistent with the requirements in section 2746(b) of the PHS Act,
HHS proposes in new proposed 45 CFR 148.410(c)(2) that for new, initial
enrollments, this disclosure would be required to be made prior to when
potential policyholders finalize plan selection and also to be included
on any documentation confirming the initial enrollment, including
enrollment documentation required in applicable state or Federal law or
an initial enrollment package. Section 2746(b)(2) of the PHS Act
requires health insurance issuers offering individual health insurance
coverage or short-term, limited-duration insurance to include the
disclosure on any documentation confirming the individual's enrollment.
HHS recognizes that the term ``any documentation'' could be read
broadly to refer to any documentation that a health insurance issuer
provides during a plan year that serves as confirmation that the
individual is enrolled in the coverage. However, HHS is of the view
that requiring such a broad reading of the statutory requirement would
be burdensome to issuers, without producing a commensurate benefit to
individuals who receive the disclosure. Therefore, HHS proposes to
interpret the statutory language more narrowly. Specifically, with
respect to initial enrollments, HHS proposes, in 45 CFR 148.410(c)(2),
to require disclosure on any documentation confirming initial
enrollment, including enrollment documentation required in applicable
state or Federal law or an initial enrollment package.\24\ In addition,
consistent with the provisions in section 2746(d) of the PHS Act that
recognize the need to account for the different processes for plan
renewals, HHS proposes in new proposed 45 CFR 148.410(c)(3) that for
renewals of enrollment in a plan, an issuer must provide the required
disclosure to the policyholder with the renewal notice required in 45
CFR 147.106(f) or 148.122(i), if applicable. HHS proposes this because
plan renewals in the individual market generally do not have a moment
when a consumer finalizes plan selection, as many of these renewals
occur automatically, and because these renewal notices can also be
considered to confirm enrollment in the plan for the upcoming plan
year. Therefore, issuers would be required to provide the required
disclosure as part of an initial enrollment package or renewal notice,
but would not be required to provide the required disclosure on other
documents that could be considered to confirm enrollment, such as
explanations of benefits.
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\24\ For example, pursuant to 45 CFR 147.200(a)(1)(iv), a health
insurance issuer offering individual health insurance coverage must
provide a summary of benefits and coverage to an individual covered
under the policy upon application, by the first day of coverage (if
there are changes), upon renewal, reissuance, or reenrollment, and
upon request.
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In the absence of any documentation required by applicable state or
Federal law to confirm initial enrollment, or the requirement for a
notice of renewal of coverage with respect to short-term, limited-
duration insurance, HHS proposes, as a default in new proposed 45 CFR
148.410(c)(4), that issuers would be required to provide the disclosure
with the invoice for the first premium payment for the initial coverage
term and for each renewal period. HHS invites comment on whether there
are other forms of documentation confirming enrollment for either
individual health insurance coverage or short-term, limited-duration
insurance on which disclosure of compensation information should be
required and whether requiring delivery of the disclosure at another
time, such as between the final plan selection and issuance of the
invoice for the first premium payment, may be more appropriate.
HHS proposes to codify in new proposed 45 CFR 148.410(c)(5) minimum
requirements for disclosure of direct and indirect compensation
information. HHS proposes that, at a minimum, a health insurance issuer
offering individual health insurance coverage or short-term, limited-
duration insurance could satisfy the disclosure requirement using the
commission schedules or other documents that detail the applicable
commission levels and indirect compensation, such as bonuses. When used
to satisfy this new disclosure requirement, these documents must
clearly specify commissions paid by an issuer to an agent or broker for
the applicable plans for which the agent or broker has an appointment
arrangement with the issuer, distinguish between commission payments
for new enrollments and such payments for renewed enrollments if the
issuer differentiates compensation for those two types of enrollment,
and explain the qualifying thresholds for the payment of indirect
compensation to an agent or broker. Requiring that the disclosure must
include a commission schedule would ensure a consistent and readily
available document for all policyholders to use to understand the
compensation that their insurance agent or broker would receive and
make informed purchasing decisions. If an issuer of individual health
insurance coverage or short-term, limited-duration insurance also
offers direct or indirect compensation that is not captured by the
commission schedule, the issuer must supplement the disclosure of the
information on the commission
[[Page 51742]]
schedule with additional documentation disclosing such other
compensation.
HHS expects that issuers subject to the requirements of this
section would integrate this new disclosure requirement into their
existing compliance operations. An issuer's obligation could be
satisfied by the agent or broker making the required disclosure on the
issuer's behalf. For example, issuers may provide agents or brokers who
have an appointment arrangement with the issuer printed versions of the
commission schedule and other documentation disclosing direct and
indirect compensation, if applicable, to attach to enrollment materials
or may provide a link to an online version of the document. This would
equip agents and brokers with the information necessary to ensure that
consumers would be aware of any compensation being paid by the issuer
to the agent or broker prior to enrolling. Whether issuers choose to
comply directly with this obligation or partner with their agents and
brokers to provide the required disclosure, materials provided would be
required to be made available in accessible formats for people with
disabilities (at no cost to the individual) and people with limited
English proficiency. Issuers would be required to comply with
applicable Federal language and accessibility requirements regarding
disclosure documents.\25\ This typically requires documents to be made
available in any of the 15 most common languages in the state.\26\
Issuers would also be required to ensure effective communication with
individuals with disabilities, including provision of appropriate
auxiliary aids and services at no cost to the individual. Auxiliary
aids and services may include interpreters, large print materials,
accessible information and communication technology, open and closed
captioning, and other aids or services for persons who are blind or
have low vision, or who are deaf or hard of hearing. Information
provided through information and communication technology also must be
accessible to individuals with disabilities, unless certain exceptions
apply.\27\ HHS is of the view that individuals cannot receive
meaningful disclosure if they cannot understand the information
provided in the disclosure documents. HHS seeks comment on these
proposals.
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\25\ See, for example, Guidance and Population Data for
Exchanges, Qualified Health Plan Issuers, and Web-Brokers to Ensure
Meaningful Access by Limited-English Proficient Speakers Under 45
CFR 155.205(c) and 156.250 (March 30, 2016) <a href="https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Language-accessguidance.pdf">https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Language-accessguidance.pdf</a> and ``Appendix A--Top 15 Non-English Languages by
State'' <a href="https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Appendix-A-Top-15-non-englishby-state-MM-508_update12-20-16.pd">https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Appendix-A-Top-15-non-englishby-state-MM-508_update12-20-16.pd</a>. See also 42 U.S.C. 18116, 42 U.S.C. 2000d et
seq., 269 U.S.C. 794, 42 U.S.C. 12101 et seq.
\26\ Ibid.
\27\ See 42 U.S.C. 18116, 42 U.S.C. 2000d et seq., 269 U.S.C.
794, 42 U.S.C. 12101 et seq.
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These proposed rules do not prescribe a specific format for
issuers' commission schedules or other documents that detail the
applicable direct or indirect compensation. Instead, HHS proposes in 45
CFR 148.410(c)(5) that, to the extent the commission schedules or other
documents that detail the applicable direct or indirect compensation
are used to satisfy the requirements of this section, the schedules or
other documents would be required to comply with the minimum standards
outlined therein regarding agent and broker compensation. This proposed
requisite information includes information on initial and renewal
commissions and explanation of the qualifying thresholds for the
payment of indirect compensation to an agent and broker, at a minimum.
Commission schedules are widely used in the health insurance industry
and customarily include this minimum informational content with respect
to initial and renewal commission rates. However, the format can vary
by issuer. It is HHS's view, at this time, that the benefits of
prescribing and standardizing the proposed minimum required content in
a specific format for commission schedules would not outweigh the costs
of implementation. HHS is also not proposing a specific format for the
additional documentation that detail the applicable direct or indirect
compensation. Instead, HHS is proposing minimum standards for the
information that must be disclosed and permitting issuers to determine
what documentation may contain that information and be used to satisfy
the disclosure requirement, whether the issuer calls it a commission
schedule or refers to it by another term. HHS invites comments on these
proposals, especially the considerations of costs and benefits
associated with standardizing the format for compensation disclosure.
HHS proposes that issuers would be required to make the necessary
disclosures prior to the potential policyholder finalizing plan
selection and, in addition, that the disclosure be included on any
documentation confirming the individual's enrollment, as required under
section 2746(b) of the PHS Act. This requirement would ensure that the
person who is choosing the coverage and agreeing to be financially
responsible for premiums and other payments due under the insurance
contract (who HHS proposes to define as the `policyholder') can
evaluate whether and to what extent the advice they received from an
agent or broker may be influenced by the agent's or broker's
compensation arrangement with an issuer prior to finalizing the plan
selection.
HHS considered whether to propose requiring that issuers make these
required disclosures to all plan enrollees, but are of the view that
such a requirement would be needlessly burdensome. First, requiring
issuers to disclose direct and indirect agent or broker compensation to
each person in an enrollment group would be unreasonable as many
enrollees are infants, minor children, or otherwise not responsible for
choosing their health insurance coverage. As noted, requiring the
disclosure be made to the policyholder would allow that individual to
evaluate whether and to what extent the advice they received from an
agent or broker may be influenced by the compensation received. HHS
expects that the policyholder would be able to relay information from
the disclosure to the other enrollees on the policy, similar to how the
policyholder is entrusted to relay other information about the plan
selection to the other enrollees in the policy. HHS is also of the view
that requiring issuers to make these disclosures to each enrollee could
place a larger burden on issuers and enrollees than necessary without
adding meaningful consumer benefit. For example, to the extent an
issuer uses the agent or broker to provide the disclosure, requiring
disclosure to be made to all enrollees prior to finalizing the plan
selection would necessitate an adult, seeking to purchase coverage for
their family, to bring that entire family to the office of the
insurance agent or broker in order to receive the disclosure of
information about direct and indirect compensation before finalizing
the plan selection in which the family members would be enrolled.
A similar burden exists for virtual or telephonic enrollments. The
agent or broker assisting with the enrollment would need to contact
each individual on the plan prior to finalizing plan selection, which
could be time-consuming or nigh impossible. This would require all plan
enrollees to be near a phone or computer at the time of enrollment and
either answer a phone call or respond to an email prior to
[[Page 51743]]
finalizing plan selection. This amount of coordination seems unduly
burdensome on consumers and would virtually eliminate parents' ability
to finalize a plan selection while their children are in school, as the
children would generally be unable to be contacted by the agent or
broker while attending classes. In addition, emails or phone calls from
unknown individuals are often not answered or responded to promptly, if
at all, meaning a policyholder would need to first contact the other
plan enrollees, telling them to expect a call from the agent or broker,
which adds another layer of coordination and complexity. Additionally,
children or developmentally challenged individuals may not be mentally
capable of providing their consent or may not have an email address or
phone number, meaning if they were not physically with the policyholder
at the time directly prior to finalizing plan selection, contacting
them would be impossible.
c. Reporting Requirements
To implement the requirement at section 2746(c) of the PHS Act that
health insurance issuers offering individual health insurance coverage
or short-term, limited-duration insurance must annually report to HHS
prior to the beginning of open enrollment any direct or indirect
compensation provided to an agent or broker associated with enrolling
individuals in such coverage, HHS proposes in new proposed 45 CFR
148.410(d)(1) to require issuers to submit to HHS, in a form and manner
prescribed by the Secretary, any direct and indirect compensation
provided to agents and brokers associated with enrolling individuals in
individual health insurance coverage and short-term, limited-duration
insurance sold by the issuer. HHS intends to collect data similar to
the data collected by DOL on compensation of insurance producers for
group health plans subject to the Form 5500 reporting requirement.
DOL utilizes the Form 5500 series as part of its overall reporting
and disclosure under ERISA. DOL collects information related to
insurance on Form 5500 Schedule A, which includes the identifying
information for the issuer and the agent or broker, and the amount of
compensation paid to agents and brokers. Issuers would be expected to
submit the reporting data to HHS through an online system. HHS is
proposing to require issuers provide, for each payment recipient and
intermediary organization in a specific month of the reporting year, a
single row of data in comma-separated values (CSV) format containing
the following fields/columns: (1) Payor Federal Tax ID Number (FTIN);
(2) Recipient Identifier Type (``NPN'' for writing agents or ``FTIN''
for payments made to intermediaries); (3) Recipient Identifier Value
(the actual number); (4) The date on which the payment was made to the
payment recipient; (5) Direct Compensation, expressed as a dollar
amount (the commission); (6) Indirect Compensation, expressed as a
dollar amount, if any (if indirect compensation payment amount was made
in that month, for example, a bonus was paid out; bonuses for annual
performance are accounted for in December of the reporting year rather
than disaggregated into 12 parts for each month); (7) the basis for
indirect compensation--a text field allowing entry of what the grounds
for the indirect compensation were (bonus, incentive, etc.); and (8)
other information specified by the Secretary, which may include, for
example, distinguishing between individual health insurance coverage
and short-term, limited-duration insurance, listing the appointment
arrangement duration, and providing the number of plans the agent sold.
HHS proposes to add new proposed 45 CFR 148.410(d)(2) to specify
that the reporting by issuers would be required to reflect both
compensation arrangements directly between the writing agent or broker
and the issuer, and compensation arrangements from the issuer to the
writing agent or broker involving one or more intermediary
organizations in connection with the sale of individual health
insurance coverage or short-term, limited-duration insurance. Examples
of intermediary organizations that are often involved in the sale,
placement, or renewal of individual health insurance coverage or short-
term, limited-duration insurance include general line agencies and
marketing organizations. This proposed approach would ensure that the
information reported annually to HHS reflects the full amount of
compensation received by agents and brokers related to the sale,
placement, or renewal of individual health insurance coverage and
short-term, limited-duration insurance.
HHS proposes that the annual report submitted by issuers to HHS
contain more detailed information than the disclosure to policyholders,
including information related to intermediary organizations as well as
actual compensation amounts rather than payment structures, because HHS
proposes for the report to be due after the end of the year for which
compensation was paid and prior to the beginning of open enrollment for
the following year. This timeline would enable the report to HHS to
provide a more complete reflection of compensation actually provided
throughout the previous calendar year than the disclosure to consumers,
which must be provided prior to individuals finalizing their plan
selections and at renewal. In addition, requiring issuers to provide
information to policyholders on the compensation arrangements between
insurance agents or brokers and intermediary organizations, like
general agencies, would substantially increase the complexity of the
disclosure materials without providing the same level of consumer
benefit. Disclosure of direct and indirect compensation is intended to
inform the consumer of considerations, other than the consumer's best
interests, that may impact the guidance and decision-making of the
insurance agent or broker. HHS is of the view that information about
whether that compensation would first be paid to a general agency and
the amount of compensation that agency would claim before disbursing to
the agent would not have a similar impact on the consumer's decision-
making process. However, reporting of this additional information to
HHS would assist HHS in monitoring and enforcing compliance with the
disclosure requirements and ensuring that consumer disclosures
accurately and adequately reflect direct or indirect compensation
payment practices.
HHS proposes in new proposed 45 CFR 148.410(d)(4) to require
submission to HHS of the required reports on an annual basis by the
last business day of July of the calendar year following the applicable
reporting period. For example, reporting for calendar year 2022 would
be due by July 31, 2023. Under this proposed rule, for non-calendar
year policies, which may exist in the short-term, limited-duration
insurance market, issuers would be required to split the agent and
broker compensation between the reports for two calendar years. For
example, for a short-term, limited-duration policy in effect from
December 1, 2022 to February 28, 2023, an issuer would be required to
report the compensation paid on the policy for December 2022 in the
report due by July 31, 2023 and the compensation paid on the policy for
January and February 2023 in the report due July 31, 2024. HHS seeks
comment on this proposal, and would provide additional guidance in the
final rule on special cases, as may be necessary, including indirect
compensation paid
[[Page 51744]]
for enrollments that span multiple years based on comments on this
proposed rule and feedback from regulated entities subject to these
requirements and other stakeholders.
Section 2746(c) of the PHS Act states that issuers must report the
data to HHS prior to the beginning of open enrollment. The last
business day of July would align with the statute and would avoid
significant overlap with the qualified health plan certification
process and states' rate and form review processes. This date would
also provide HHS with adequate time to review the submitted reports
prior to the beginning of open enrollment for the following year and
would provide issuers ample time after the reporting year to prepare
and validate the information.
d. Applicability
In new proposed 45 CFR 148.410(e), HHS is proposing to codify the
provisions of section 2746(d) of the PHS Act, which establishes a
transition rule for these new requirements and provides that the
requirements would not be applicable to contracts executed between
health insurance issuers offering individual health insurance coverage
or short-term, limited-duration insurance and agents or brokers before
December 27, 2021. HHS therefore proposes that these new requirements
would apply to contracts executed between an agent or broker and a
health insurance issuer offering individual health insurance coverage
or short-term, limited-duration insurance on or after December 27,
2021. For purposes of determining the date of contract execution, HHS
proposes to deem the execution of contractual addenda or revisions to
the material terms of a pre-existing contract to be the execution of a
new contract to which the disclosure and reporting requirements would
apply.
HHS does not expect that many appointment contracts would be newly
executed between the effective date of the statutory requirement,
December 27, 2021, and the beginning of the first reporting period
proposed in these proposed rules, January 1, 2022. As a result, under
this proposal, HHS may exercise discretion and adopt a temporary policy
of relaxed enforcement in connection with the enforcement of the
proposed reporting requirement on a case-by-case basis for appointment
contracts executed and policies effective within the period between
December 27, 2021 and January 1, 2022, and encourages states that are
the primary enforcers of these requirements to adopt a similar
enforcement approach.
HHS seeks comment on all aspects of these proposals regarding the
definitions, disclosure requirements, reporting requirements, and
applicability.
C. Part 150--CMS Enforcement of Group and Individual Insurance Market
and Provider and Facility Requirements
Section 2723 of the PHS Act contemplates that states would exercise
primary enforcement authority with respect to issuers that offer health
insurance coverage in the individual or group markets within the state.
If a state notifies HHS that it does not have the authority to enforce
PHS Act requirements, or if HHS determines that a state is not
substantially enforcing PHS Act requirements with respect to issuers,
HHS has the responsibility to enforce the PHS Act provision or
provisions in that state and has delegated this enforcement authority
to CMS.
The CAA enacted new provisions of the PHS Act that require health
insurance issuers to submit certain information to HHS or the
Departments. This includes the requirement under section 2746(c) for
issuers that offer individual health insurance coverage and issuers
that offer short-term, limited-duration insurance coverage to annually
report to the Secretary of HHS, prior to the beginning of open
enrollment, any direct or indirect compensation provided to an agent or
broker associated with enrolling individuals in such coverage. Health
insurance issuers must also report to the Departments certain
information regarding air ambulance services under section 2799A-8 and
certain information regarding pharmacy benefits and drug costs under
section 2799A-10. Additionally, in accordance with section 2799A-
9(a)(4), issuers must submit to HHS an annual attestation of compliance
with the prohibition of gag clauses on price and quality information
under section 2799A-9. Under section 2723 of the PHS Act, states have
the opportunity to be the primary enforcers of sections 2746(c), 2799A-
8, 2799A-9(a)(4), and 2799A-10. However, HHS is of the view that states
would not look to enforce these PHS Act provisions because they are
requirements for issuers to report to HHS or the Departments, and
states would not have access to the submissions to assess compliance.
Instead, HHS anticipates that states would focus resources on
implementing and enforcing the other requirements in the CAA. HHS
therefore proposes to have direct enforcement authority for these
issuer requirements in all states, unless the state notifies HHS of its
intent to enforce. HHS solicits comments on this approach and whether
there are states that intend to assist with enforcement of any of these
requirements.
In cases where there is a question about whether the state is
failing to substantially enforce one or more PHS Act requirements, the
procedures outlined in 45 CFR 150.201 through 150.221 govern. First, if
CMS is satisfied that there is a reasonable question whether there has
been a failure to substantially enforce one or more PHS Act
requirements, CMS notifies the appropriate state parties, providing 30
days to respond. Then, if CMS makes a preliminary determination that
the state is failing to substantially enforce, the state is provided an
opportunity to show evidence of substantial enforcement. If CMS
determines that the state's failure to substantially enforce has not
been corrected, then CMS would send a final determination notice to the
state identifying which requirements CMS would directly enforce and the
effective date for such enforcement. Finally, current regulations
provide a transition mechanism by which a state can assume or resume
primary enforcement of the applicable PHS Act requirement(s).
Most states currently work to ensure that issuers offering health
insurance coverage in the individual and group markets comply with
applicable requirements of the PHS Act. Although some states lack
direct state statutory authority to enforce, CMS has worked with many
of these states to implement collaborative enforcement agreements.
Through these agreements, a state performs the same regulatory
functions with respect to the applicable individual and group insurance
market requirements of Title XXVII of the PHS Act (market reform
provisions) as it does to ensure compliance with state law, and seeks
to achieve voluntary compliance from issuers if the state finds a
potential violation. Similarly, consumers continue to contact the state
with inquiries and to submit complaints relating to the market reform
provisions. Under this collaborative approach, if the state finds a
potential violation and is unable to obtain voluntary compliance from
an issuer, it would refer the matter to CMS for possible enforcement
action. If a state lacks authority or ability to enforce PHS Act
requirements, then CMS would directly enforce the relevant market
reform provisions in the state with respect to health insurance issuers
in the group and individual markets. Finally, CMS directly enforces the
relevant market reform provisions with
[[Page 51745]]
respect to non-Federal governmental plans in all states.
When CMS is responsible for enforcement with respect to issuers and
non-Federal governmental plans, enforcement tools CMS uses in
accordance with 45 CFR 150.301 through 150.347, include policy form
review, complaint-driven investigations, and market conduct
examinations. CMS also has authority to impose civil money penalties
against health insurance issuers in a state in which CMS is directly
enforcing the PHS Act, and against non-Federal governmental plan
sponsors in all states that fail to comply with applicable PHS Act
requirements.\28\
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\28\ See section 2723(b) of the PHS Act. Also see 45 CFR 150.301
through 150.347.
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The CAA adds additional PHS Act requirements that apply to group
health plans, including non-Federal governmental plans, health
insurance issuers, providers, including providers of air ambulance
services (providers), and health care facilities (facilities). CMS
would enforce these provisions to the extent they apply to non-Federal
governmental plans in all states and to issuers in states where CMS
directly enforces in the aforementioned manner. With respect to
enforcement of the requirements applicable to providers and facilities,
the CAA largely mirrors the current issuer enforcement structure:
Namely, states are the primary enforcers, with CMS only enforcing if a
state fails to substantially enforce, and these proposed rules reflect
this structure. However, the provisions of section 106(a) of the No
Surprises Act that apply to providers of air ambulance services are
enforced directly by CMS. The CAA and these proposed rules would
require CMS to follow the process set forth in section 1128A of the SSA
to impose civil money penalties on providers or facilities for non-
compliance with provisions of Part E of Title XXVII of the PHS Act and
on providers of air ambulance services for non-compliance with the
requirement to submit data under section 106(a) of the No Surprises
Act. The applicable state authority involved in oversight and
enforcement of providers and facilities would likely be different in
most, if not all, states from the applicable state authority
responsible for oversight and enforcement over health insurance
issuers.
HHS proposes to make conforming amendments to existing regulations
in subparts A, B, and D and to add a new subpart E to 45 CFR part 150
to provide for CMS direct enforcement when a state is not substantially
enforcing PHS Act requirements pertaining to providers and facilities
and when a provider of air ambulance services fails to submit data
required under section 106(e) of the No Surprises Act. HHS also
proposes to amend existing regulations to add references to 45 CFR part
149, which implements these PHS Act requirements and to which the
enforcement regulations in 45 CFR part 150 would also apply.
Additionally, HHS proposes revising subpart C of 45 CFR part 150 to
align these provisions with industry standards and clarify the existing
CMS enforcement procedures, and equip CMS with additional tools to
fulfill its enforcement responsibilities under the PHS Act.
HHS proposes revising the title of 45 CFR part 150 to reflect the
extension of CMS's enforcement authority to providers and facilities in
states that are not substantially enforcing the requirements in Part E
of Title XXVII of the PHS Act and to providers of air ambulance
services for purposes of the data submission requirements under section
106(e) of the No Surprises Act.
1. Basis and Scope (45 CFR 150.101)
HHS proposes to add to 45 CFR 150.101(a), which captures the basis
of 45 CFR part 150, references to section 2799B-4 of the PHS Act, which
subjects providers and facilities to the enforcement provisions of the
PHS Act that HHS proposes to implement in 45 CFR part 150, and section
106(e) of the No Surprises Act, which subjects providers of air
ambulance services to civil money penalties for failure to comply with
data reporting requirements. HHS also proposes to make conforming edits
to expand the scope of 45 CFR part 150 in 45 CFR 150.101(b), including
to specifically outline the enforcement framework that HHS proposes to
implement under subpart E of 45 CFR part 150. This includes proposed
amendments to 45 CFR 150.101(b)(2) to add a reference to 45 CFR part
149 to expand the scope of the framework applicable to enforcement over
health insurance issuers. In addition, HHS proposes to add a new
paragraph (b)(3) to capture the scope of the framework applicable to
enforcement over providers and facilities.
2. Definitions (45 CFR 150.103)
HHS proposes to amend 45 CFR 150.103 to revise the introductory
text to add a reference to 45 CFR part 149 and to add definitions
related to enforcement against providers and facilities. Specifically,
HHS proposes to define the term ``facility'' for purposes of 45 CFR
part 150 to mean a health care facility, an emergency department of a
hospital, and an independent freestanding emergency department, as
those terms are defined in 45 CFR 149.30, and any other facility
subject to the requirements in Part E of Title XXVII of the PHS Act.
HHS also proposes to define the term ``provider'' for purposes of 45
CFR part 150 to mean a physician or other health care provider, as that
term is defined in 45 CFR 149.30, as well as a provider of air
ambulance services, as that term is defined in 45 CFR 149.30. These
combined definitions would make 45 CFR part 150 easier to read and
understand, as the enforcement procedures outlined in 45 CFR part 150
apply to all the aforementioned parties separately defined in 45 CFR
149.30. HHS also proposes to make conforming amendments to add
references to 45 CFR part 149 to the definition of ``individual health
insurance policy or individual policy'' and the definition of ``PHS Act
requirements.'' HHS seeks comment on these proposals.
3. State Enforcement (45 CFR 150.201)
Under 45 CFR 150.201, states have primary enforcement authority
over health insurance issuers with respect to PHS Act requirements,
unless the state notifies CMS that it has not enacted legislation to
enforce or that it is not otherwise enforcing PHS Act requirements or
the state fails to substantially enforce the PHS Act requirements that
apply to issuers, in which case CMS would enforce those requirements.
These proposed rules would make a conforming amendment at 45 CFR
150.201 to specify that states also have primary enforcement authority
over providers and facilities that furnishes items or services to
individuals in the state, unless the state notifies CMS that it has not
enacted legislation to enforce or that it is not otherwise enforcing
PHS Act requirements or the state fails to substantially enforce the
PHS Act requirements that apply to providers and facilities, in which
case CMS would enforce these requirements. Under this proposed rule, a
state would be the primary enforcer of the PHS Act requirements against
providers or facilities that furnish services via telehealth to
individuals located in the state, even in circumstances where the
provider or facility is located in a different state. While many states
require licensure of out-of-state telehealth providers furnishing care
to individuals within the state, HHS understands that this is not
always true, and that many states have relaxed licensure requirements
in response to
[[Page 51746]]
the COVID-19 public health emergency.\29\ HHS seeks comment on whether
the approach taken in this proposed rule presents challenges with
respect to providers or facilities furnishing telehealth services.
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\29\ See, for example, Center for Connected Health Policy.
Cross-State Licensing. Available at: <a href="https://www.cchpca.org/topic/cross-state-licensing-professional-requirements/">https://www.cchpca.org/topic/cross-state-licensing-professional-requirements/</a> (last accessed
August 8, 2021); and Federation of State Medical Boards. U.S. States
and Territories Modifying Requirements for Telehealth in Response to
COVID-19. (July 28, 2021.) Available at: <a href="https://www.fsmb.org/siteassets/advocacy/pdf/states-waiving-licensure-requirements-for-telehealth-in-response-to-covid-19.pdf">https://www.fsmb.org/siteassets/advocacy/pdf/states-waiving-licensure-requirements-for-telehealth-in-response-to-covid-19.pdf</a>.
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HHS also proposes to make a technical correction to the title of
subpart B to reflect that this subpart would apply to multiple PHS Act
requirements rather than only one requirement. HHS proposes to revise
the title of subpart B by changing ``requirement'' to ``requirements''
as the term should have been plural.
4. Circumstances Requiring CMS Enforcement (45 CFR 150.203)
HHS proposes to make technical corrections to the introductory
language at 45 CFR 150.203 to reflect that this section would apply to
multiple PHS Act requirements rather than only one requirement. HHS is
not proposing further amendments because HHS would interpret and apply
the current language outlining the circumstances requiring CMS
enforcement, which generally refers to states, to situations involving
providers and facilities in the same manner in which it applies to
health insurance issuers in situations where the applicable state
authority fails to substantially enforce applicable PHS Act
requirements.
5. Sources of Information Triggering an Investigation of State
Enforcement (45 CFR 150.205)
Section 150.205(d) provides that if information regarding the
status of state enforcement of PHS Act requirements comes from state
governors and commissioners of insurance, such information may trigger
a CMS investigation of whether a state is failing to substantially
enforce these requirements. Because governors, commissioners, and other
applicable state insurance agency or entity leaders may not have
oversight or enforcement authority over providers and facilities,
information regarding state enforcement of PHS Act requirements with
respect to providers and facilities may instead come from the state
departments of health or other state agencies with that authority.
Additionally, some states have officials distinct from the
commissioners of insurance who are responsible for regulating health
maintenance organizations (HMOs). Therefore, HHS proposes to amend 45
CFR 150.205(d) to add a reference to officials responsible for
regulating HMOs, directors of public health or any other state
department, agency, or board with applicable oversight authority over
entities subject to PHS Act requirements to the list of state officials
who may be the source of information triggering an investigation.
Proposed amendments to 45 CFR 150.205(e)(2) would correct a
typographical error which incorrectly referenced in 45 CFR 148.120
instead of 45 CFR 148.210.
6. Notice to the State (45 CFR 150.211)
Under these proposed rules, in determining whether a state is
failing to substantially enforce PHS Act requirements that apply to
providers and facilities, CMS would use the processes and standards
already established with respect to state enforcement of applicable PHS
Act requirements with respect to health insurance issuers in 45 CFR
150.205 through 150.221. CMS is of the view that these processes can
largely also apply to state enforcement of the new PHS Act requirements
applicable to providers and facilities without change. However, the
current regulatory language at 45 CFR 150.211 specifies that if there
is a reasonable question regarding state enforcement, CMS will send a
notice to the governor or chief executive officer of the state, the
insurance commissioner or chief insurance regulatory official, or the
official responsible for regulating HMOs. Those individuals may not be
the appropriate recipients if there is a reasonable question regarding
state enforcement of PHS Act requirements that apply to providers or
facilities. Therefore, HHS proposes to amend 45 CFR 150.211 to add
paragraph (d) specifying that a notice of possible failure to
substantially enforce PHS Act requirements in such circumstances would
be sent to the relevant state official responsible for regulating
providers and facilities and to make conforming changes to paragraph
(b) to reflect that notices would be sent to the insurance commissioner
or chief insurance regulatory official when there is a reasonable
question regarding state enforcement of PHS Act requirements that apply
to health insurance issuers. Paragraph (c) would be retained, which
provides that such notices would be sent to the state official
responsible for regulating HMOs, if different from the official listed
in paragraph (b), when the alleged failure involves HMOs.
7. Transition to State Enforcement (45 CFR 150.221)
HHS proposes to make conforming amendments to 45 CFR 150.221(a)(2)
to provide that the discussions between CMS and state officials
regarding transition to state enforcement would include instructions to
providers and facilities, rather than instructions only to issuers. HHS
also proposes to amend 45 CFR 150.221(b) to similarly add references to
providers and facilities to make clear that CMS may also negotiate a
process to ensure that, to the extent practicable, and as permitted by
law, its records documenting compliance and other relevant areas of
CMS's enforcement operations are made available for incorporation into
the records of the applicable state authority responsible for oversight
and enforcement of providers and facilities. These proposed changes
would capture a reference to the new PHS Act requirements enacted in
the CAA applicable to providers and facilities to ensure the regulation
includes situations where a transition back to state enforcement of
applicable Federal requirements over such entities is appropriate. HHS
also proposes to replace the language about making CMS enforcement
records available to states by removing the language about
``incorporation into the records'' of the State regulatory authority
that would assume enforcement to more generally refer to making such
records available to the State regulatory authority.
8. Basis for Initiating an Investigation (45 CFR 150.303)
Currently, 45 CFR 150.303 provides that if CMS receives information
that an issuer or non-Federal governmental plan may be failing to meet
a PHS Act requirement, then an investigation may be warranted. HHS
proposes to revise 45 CFR 150.303(a) to specify that CMS may undertake
either an investigation or a market conduct examination, rather than
only an investigation, within its discretion based on this information.
This proposed revision would align 45 CFR 150.303(a) with the
regulatory text in 45 CFR 150.313(b), which provides that CMS may
initiate a market conduct examination when, based on the information
described in 45 CFR 150.303, it finds evidence that a specific entity
may be in violation of the PHS Act.
When determining whether to undertake an investigation or
examination, CMS would consider a number of different factors,
including the facts and circumstances surrounding the potential
violation, the potential
[[Page 51747]]
number of impacted consumers, an issuer or non-Federal governmental
plan's past history of substantiated complaints, the effect of the
alleged violation on a consumer, the deterrent effect that knowledge of
the investigation or examination may have on others who may consider
committing similar violations, and other considerations that CMS deems
appropriate.
HHS further proposes to revise 45 CFR 150.303(a) to add a new
sentence to clarify that CMS may review any information it deems useful
to determine if a violation of the PHS Act has occurred when
undertaking an investigation or examination. HHS proposes this change
to more clearly describe current CMS procedures, which may include a
review of applicable data and documentation, such as paid and denied
claims, summary plan documents, summary of benefits and coverage, and
notifications to enrollees, to assess whether the entity may be in
violation of the PHS Act. Additionally, HHS proposes a conforming
amendment to paragraph (a)(2) to capture a reference to reports from
providers and facilities--along with reports from state insurance
departments, the NAIC and other Federal and state agencies--as
potential sources or types of information that could lead to an
investigation or examination to ensure compliance with the applicable
PHS Act requirements.
HHS proposes to remove and replace 45 CFR 150.303(c), which
currently states that a complaint may be directed to any CMS regional
office. HHS proposes this change because the CMS regional offices no
longer process complaints. Instead, CMS offers several methods for
entities or individuals to submit complaints. These methods vary based
on the type of coverage or plan in which an individual is enrolled and
the substance of the complaint, and are described on CMS's public web
pages. For PHS Act complaints regarding non-Federal governmental plans,
consumers can email <a href="/cdn-cgi/l/email-protection#ce9e8687898eada3bde0a6a6bde0a9a1b8"><span class="__cf_email__" data-cfemail="06564e4f4146656b75286e6e7528616970">[email protected]</span></a>. For complaints with respect to
issuers, consumers in states that are directly enforcing the applicable
PHS Act provision are referred to the state department of insurance;
for states in which CMS is directly enforcing PHS Act requirements,
consumers can email <a href="/cdn-cgi/l/email-protection#175a76657c72635478797362746357747a64397f7f6439707861"><span class="__cf_email__" data-cfemail="4e032f3c252b3a0d21202a3b2d3a0e2d233d6026263d60292138">[email protected]</span></a>. The list of current
states in which CMS is directly enforcing one or more PHS Act
provisions is available on the CMS website at <a href="https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Market-Reforms/compliance">https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Market-Reforms/compliance</a>.
HHS proposes to remove the complaint provision that is currently in
45 CFR 150.303(c), and replace it with a new provision specifying that
CMS may conduct random or targeted investigations and market conduct
examinations of issuers and non-Federal governmental plans to ensure
compliance with the PHS Act. HHS is proposing this regulation to codify
another enforcement tool for CMS for situations where it is responsible
for enforcement of the Federal market reform provisions. The proposal
is also intended to codify in regulation the new statutory obligations
established under the CAA for HHS to conduct certain specified audits
and reviews. More specifically, section 2799A-1(a)(2)(A)(ii) of the PHS
Act directs HHS to conduct audits of a sample of claims data with
respect to a year (beginning with 2022) from not more than 25 group
health plans and health insurance issuers offering group or individual
health insurance coverage to verify compliance with the qualifying
payment amount requirements described in section 2799A-1 of the PHS
Act, as enacted by the No Surprises Act. HHS expects states with
primary enforcement authority with respect to section 2799A-1 of the
PHS Act will carry out enforcement activities to verify compliance with
the qualifying payment amount requirements in section 2799A-1 of the
PHS Act and 45 CFR 149.140 to the extent that the qualifying payment
amount is used to determine the ``recognized amount'' for purposes of
calculating cost sharing under section 2799A-1. As noted in 45 CFR
149.140(f), HHS intends to carry out these statutory provisions in
states in which CMS is directly enforcing using the market conduct
examination procedures described in 45 CFR 150.313, as proposed to be
amended, when conducting random and targeted audits for compliance with
the requirements for applying a qualifying payment amount.\30\
Additionally, section 203 of Title II of Division BB of the CAA amended
section 2726(a) of the PHS Act to expressly require group health plans
and health insurance issuers offering group or individual health
insurance coverage \31\ that provide both medical/surgical (M/S)
benefits and mental health or substance use disorder (MH/SUD) benefits
and that impose nonquantitative treatment limitations (NQTLs) on MH/SUD
benefits to perform, document, and make available upon request to HHS
(or the applicable state authority) comparative analyses of the design
and application of their NQTLs. PHS Act section 2726(a)(8)(B), as added
by section 203 of Title II of Division BB of the CAA further directs
HHS to request, review, and report to Congress its findings regarding
NQTL comparative analyses from group health plans and health insurance
issuers each year. In order to satisfy the newly codified statutory
obligations for HHS to conduct these specified audits and reviews under
the CAA, CMS currently intends to focus random or targeted
investigations under the new proposed 45 CFR 150.303(c) on ensuring
compliance with (i) qualifying payment amount requirements described in
section 2799A-1 of the PHS Act, which was added by the No Surprises
Act, and (ii) the NQTL comparative analysis requirements described in
section 2726(a)(8) of the PHS Act. CMS is committed to robust
enforcement of these new requirements and ensuring compliance with
other applicable PHS Act provisions. HHS is of the view that this is a
necessary and appropriate exercise of its enforcement and rulemaking
authorities under sections 2723 and 2792 of the PHS Act, respectively.
Further, HHS is of the view that having authority to conduct random or
targeted investigations or examinations for all PHS Act provisions,
including but not limited to qualifying payment amount requirements
described in section 2799A-1 of the PHS Act, which was added by the No
Surprises Act and codified in regulations at 45 CFR 149.140, and the
NQTL comparative analysis requirements described in section 2726(a)(8)
of the PHS Act, would create a more efficient and effective enforcement
program in that CMS would be able to proactively ensure consumers are
receiving the benefits to which they are entitled rather than having to
wait to receive a complaint or other information indicating a potential
PHS Act violation in situations where CMS is responsible for
enforcement. For example, an investigation or examination by CMS of one
responsible entity may identify a potential systematic error or issue
that the agency suspects may impact similarly situated entities subject
to CMS's enforcement authority. These proposed rules would provide CMS
[[Page 51748]]
with another enforcement tool to investigate whether these other
entities have experienced the same error or issue without having to
wait to receive a complaint or other information indicating a PHS Act
violation to take action.
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\30\ 86 FR 36899 and 36979 (July 13, 2021).
\31\ Pursuant to section 2723(b)(1) of the PHS Act, CMS enforces
section 2726 of the PHS Act and other applicable provisions of Title
XXVII of the PHS Act with respect to non-Federal governmental group
health plans in all states and with respect to health insurance
issuers selling products in the individual and fully insured group
markets in states that elect not to enforce or fail to substantially
enforce section 2726 of the PHS Act and other applicable provisions
of Title XXVII of the PHS Act.
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HHS also proposes a conforming amendment to the title for this
section to also capture a reference to examinations and to remove the
reference to a potential violation. This would align with the proposed
amendments to 45 CFR 150.303, as outlined in this section of the
preamble, to allow CMS to randomly select non-Federal governmental
plans and issuers for investigation and market conduct examination to
ensure compliance with applicable PHS Act requirements when CMS is
responsible for enforcement, as well as the other amendments to 45 CFR
150.303 to specify that CMS may also undertake an examination based on
information the agency receives that an issuer or non-Federal
governmental plan may be failing to meet a PHS Act requirement.
HHS seeks comment on these proposed changes.
9. Notice to Responsible Entities (45 CFR 150.307)
HHS proposes to revise several provisions in 45 CFR 150.307
regarding the notice that is sent to responsible entities when there is
a potential violation, to reflect and clarify the current CMS
enforcement procedures. The proposed revisions are further intended to
provide responsible entities additional information and clarity
regarding CMS's authority and process for conducting
investigations.\32\ Specifically, HHS proposes to replace the word
``investigation'' with ``information'' in the introductory text to
align this section with the regulatory text in 45 CFR 150.303, which
generally addresses information that may warrant an investigation or an
examination. HHS is also proposing to revise the introductory text to
clarify that the notice would also be sent to initiate investigations
of randomly selected non-Federal governmental plans and issuers under
new proposed 45 CFR 150.303(c). The proposed revision to the
introductory text also provides that CMS would also send this notice to
the responsible entity or entities in situations where information
received under 45 CFR 150.303(a) indicates a potential violation. HHS
is also proposing to remove the provision in 45 CFR 150.307(a), which
currently states that the notice describes the substance of the
complaint or other information received, and to replace it with a new
provision specifying that the notice describes the information received
under 45 CFR 150.303 that gives rise to the investigation or notifies
the responsible entity that it was selected by CMS for a random
investigation under 45 CFR 150.303(c). HHS is proposing this change to
clarify that CMS does not provide personally identifiable information
(PII) or PHI via a complaint without the complainant's express consent.
HHS also would not disclose confidential or other sensitive information
protected from disclosure that may be included in the complaint.
However, the notice would include other information sufficient to
explain the potential violation(s) and provide the responsible entity
an adequate opportunity to respond to the allegation(s), or to notify
the responsible entity of its selection for, and the PHS Act
provision(s) that are the focus of, a random investigation under new
proposed 45 CFR 150.303(c).
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\32\ HHS is not proposing to incorporate a reference to market
conduct examinations in 45 CFR 150.307 due to the separate
regulation, 45 CFR 150.313, that addresses and details CMS's
authority and processes for conducting such examinations.
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Consistent with current text at 45 CFR 150.307(b), CMS generally
contacts the responsible entity once it reviews the information
received under 45 CFR 150.303 and provides the responsible entity 30
days to respond with additional information, including documentation of
compliance as described in 45 CFR 150.311. CMS also directs the
responsible entity to submit any data or documentation that CMS
identifies as relevant and may use to assess whether the responsible
entity is violating applicable PHS Act provisions. However, there are
circumstances in which CMS has determined it is not appropriate to
provide the responsible entity 30 days to respond. Such circumstances
include complaints involving urgent medical issues, allegations of
fraud or abuse, and when CMS must complete the investigation within a
specified time frame under the statute. Accordingly, CMS proposes to
revise 45 CFR 150.307(b) to clarify that the notice provided under this
section would direct the responsible entity to provide any
documentation that CMS identifies as relevant to the investigation, in
addition to other documentation, such as documentation of compliance as
described in 45 CFR 150.311, that in the responsible entity's view
would aid CMS in evaluating the allegations and the entity's compliance
with the PHS Act requirements identified in the notice. HHS further
proposes to revise 45 CFR 150.307(b) such that CMS would provide the
date by which the responsible entity must respond to the notice; the
goal is to ensure the efficient administration of investigations. CMS
anticipates generally providing 14 days for response. In circumstances
that warrant a more rapid response, CMS anticipates providing at least
24 hours for response. In circumstances that warrant additional time,
such when CMS requests large amounts of data, CMS anticipates providing
more than 14 days for response. HHS is not proposing any amendments to
45 CFR 150.307(c) and therefore would retain the requirement that the
notice also inform the responsible entity that a civil money penalty
may be assessed. Lastly, under the new proposed 45 CFR 150.307(d), the
notice would also inform responsible entities that CMS may require the
responsible entity to take certain corrective actions as necessary to
bring it into compliance with the applicable PHS Act requirements. HHS
believes it is necessary and appropriate to highlight, as part of this
notice, that corrective actions may be required because, similar to the
potential for a civil money penalty to be assessed, this is another
potential outcome of an investigation.
HHS seeks comment on these proposed changes.
10. Request for Extension (45 CFR 150.309)
HHS is proposing conforming amendments to revise 45 CFR 150.309 by
removing the references to 30 days and clarifying that a responsible
entity may request an extension when it cannot prepare a response or
provide the requested information to CMS by the deadline provided in
the notice under 45 CFR 150.307, and that failure to respond by the
initial deadline provided in the notice or an extended deadline granted
by CMS may result in CMS's imposition of a civil money penalty based
upon the complaint or other information alleging or indicating a
violation of PHS Act requirements. To align with proposed amendments to
45 CFR 150.313, HHS proposes to codify examples of what CMS would
consider good cause, which include but are not limited to situations
when a responsible entity indicates it has limited staffing resources
to prepare a response, or when a responsible entity requests
clarification from CMS regarding its request for information.
11. Responses to Allegations of Noncompliance (45 CFR 150.311)
HHS proposes a conforming revision at 45 CFR 150.311(e) to add a
reference
[[Page 51749]]
to the proposed notice to initiate a market conduct examination under
new proposed 45 CFR 150.313(e), which is described in section III.C.12
of the preamble.
12. Market Conduct Examinations (45 CFR 150.313)
The proposed revisions to 45 CFR 150.313 would bring this rule in
line with standard industry practices adopted by the NAIC, which CMS
generally follows, and would also codify additional CMS procedures for
market conduct examinations. HHS also proposes several amendments to
reorganize the order and presentation of information in this regulation
to improve clarity.
First, HHS proposes to remove the last sentence in 45 CFR
150.313(b) as the proposed adoption of 45 CFR 150.313(f), which would
outline the requirements for responsible entities to provide the
requested documentation to CMS, make this sentence unnecessary. HHS
further proposes to revise 45 CFR 150.313(b) to clarify that CMS may
initiate a market conduct examination of a randomly selected non-
Federal governmental plan or issuer subject to CMS's enforcement
authority. This change would align with the proposed revision at 45 CFR
150.303(c).
Second, HHS proposes to revise 45 CFR 150.313(c) to clarify that
CMS would appoint examiners when CMS initiates a random market conduct
examination. Conforming amendments are also proposed to the opening
clause of 45 CFR 150.313(c) to replace the current reference to
``investigation'' with ``further review'' to more clearly distinguish
the authority to initiate a market conduct examination from the
authority to conduct an investigation.
HHS additionally proposes to redesignate 45 CFR 150.313(e)(1) and
(2) as 45 CFR 150.313(h)(1) and (2) and also proposes to replace the
title of the newly designated section to clarify that it pertains to a
draft market conduct examination report. HHS also proposes to revise 45
CFR 150.313(e)(1), proposed to be redesignated at 45 CFR 150.313(h)(1),
to remove the description of CMS review of the draft report and replace
it with a general statement indicating that upon completion of the
examination, CMS would compose and provide a draft report to the
responsible entity. HHS further proposes to include in redesignated 45
CFR 150.313(h)(1) a description of the contents of the draft report.
Under current CMS market conduct examination practices and as reflected
in the second sentence in proposed 45 CFR 150.313(h)(1), the draft
report would include the scope of the examination, any findings of a
PHS Act violation, and any proposed actions the entity would need to
take to correct such violation. The entity then has an opportunity to
respond to the draft report and either concur with the draft report
findings or disagree. As reflected in proposed 45 CFR 150.313(h)(2)(i),
if the responsible entity agrees with one or more of the findings in
the draft report, the entity can inform CMS of any corrective action
planned or already undertaken. If the entity disagrees with one or more
of the findings, then the entity may provide evidence to CMS to support
its disagreement. This is included in proposed 45 CFR
150.313(h)(2)(ii).
HHS further proposes to redesignate 45 CFR 150.313(e)(3), which
currently addresses CMS's reply to a response to the market conduct
examination report from the responsible entity, as a new 45 CFR
150.313(i) and revise it so it instead pertains to the final market
conduct examination report. In the new proposed introductory sentence,
HHS proposes that upon receipt of a response from the responsible
entity under new paragraph (h)(2), CMS would provide a final
examination report containing the agency's findings relevant to each
examination issue, including the agency's reply to the responsible
entity's responses to the findings in the draft report for each
examination issue. HHS also proposes to replace the current references
to issuer or non-Federal governmental plan with references to
responsible entity in the redesignated 45 CFR 150.313(i)(1) through
(4), currently codified at 45 CFR 150.313(e)(3)(i) through (iv), for
consistency in terminology. HHS also proposes to clarify CMS's review
and response to the responsible entity's corrective actions, if
applicable, in 45 CFR 150.313(i)(3) and (4). Under current CMS market
conduct examination practices and the proposed 45 CFR 150.313(i), this
report finalizes the draft report and includes the entity's concurrence
or disagreement with each cited PHS Act violation, and CMS's responses
thereto. As detailed in 45 CFR 150.313(i)(1) through (5), CMS's reply
would consist of one or more of the following: (1) Concurrence with the
responsible entity's position; (2) disagreement with the responsible
entity's position; (3) a determination that the corrective actions
implemented by the responsible entity sufficiently addressed the
identified PHS Act violation; (4) a determination that the corrective
actions implemented by the responsible entity have not sufficiently
addressed the identified PHS Act violation, and information on any
further corrective actions deemed necessary by CMS; or (5) a notice to
the responsible entity that has disagreed with a CMS finding and that
has not undertaken corrective actions that there exists a violation of
applicable PHS Act requirements and any actions the responsible entity
must take to correct such violation. These changes are designed to
align HHS regulations with industry standards for market conduct
examinations. These industry standards, promulgated by NAIC, are used
throughout the country by states and issuers and are generally followed
by CMS. The adoption in regulation of the standard industry practices
and procedures would bring uniformity to the framework CMS and the
various states use to undertake market conduct examinations.
HHS proposes to add new text at 45 CFR 150.313(e) to provide that
CMS would initiate a market conduct examination by providing written
notice to the responsible entity and to describe the substance of the
examination notice call letter CMS would send to an entity to initiate
a market conduct examination. HHS proposes that this would be a written
notice from CMS to the responsible entity and that it would include the
following information: (1) A description of the information received
under 45 CFR 150.303(a) that served as the basis for CMS's
determination that a market conduct examination was warranted or
notification that the entity was selected by CMS for a market conduct
examination under 45 CFR 150.303(c); (2) a description of the scope of
the examination; (3) the identification of the examiners; (4) a
statement that a civil money penalty may be assessed; and (5) a
statement that CMS may require a plan of corrective action. HHS is of
the view that this set of core information, which is intended to mirror
the information provided in the notice to responsible entities under 45
CFR 150.307 when CMS initiates an investigation, is the appropriate
vehicle to commence a market conduct examination and is standard
industry practice.
HHS also proposes to add 45 CFR 150.313(f) to generally describe
the documentation collection and the initial directive for the
responsible entity to submit the information that CMS identifies as
relevant for the examination, the time frame for the entity's response,
and to specify the penalties for failing to respond timely, which may
include civil money penalties. This initial directive would provide the
deadline by which responsible entities must forward the
[[Page 51750]]
requested documentation or request an extension. Any extension request
would be required to be submitted in writing, detail the reasons for
the extension request and show good cause. CMS would consider the
following circumstances a non-exhaustive list of examples of good
cause: (i) Limited staffing resources to prepare a response, or (ii)
when a responsible entity requests clarification from CMS regarding its
request for information. If CMS grants the extension, the responsible
entity would be required to respond to the documentation request within
the time frame specified in CMS's letter granting the extension
request. The new proposed language in 45 CFR 150.313(f) also specifies
that if the responsible entity fails to respond within the initial
deadline provided or within the extended time frame (if granted by
CMS), then CMS may impose a civil money penalty based on the
information provided in the complaint or other information alleging or
indicating a violation of PHS Act requirements. New proposed 45 CFR
150.313(f) would also capture the opportunity for the responsible
entity to provide additional information, including documentation of
compliance as described in 45 CFR 150.311, that the responsible entity
believes would aid CMS in conducting the examination.
HHS also proposes to add 45 CFR 150.313(g) to describe the
fieldwork CMS undertakes during a market conduct examination. Under
current CMS practices and as reflected in new proposed 45 CFR
150.313(g), during the course of the examination, CMS may request
additional information or documentation to support the review of the
entity's data or other documents to assess the responsible entity's
compliance with applicable PHS Act requirements. The request for
additional information or documentation would specify the time frame
allotted for the responsible entity to respond and forward the
requested materials. Similar to the proposed initial documentation
requests, HHS proposes to capture a similar framework that permits
responsible entities to make a written request for an extension from
CMS detailing the reason(s) for the request and showing good cause.
Examples of what CMS would consider good cause include, but are not
limited to, when a responsible entity indicates it has limited staffing
resources to prepare a response, or when a responsible entity requests
clarification from CMS regarding its request for information. If CMS
grants the extension, the responsible entity would be required to
respond to the documentation request within the time frame specified in
CMS's letter granting the extension request. As detailed in the new
proposed 45 CFR 150.313(g), the failure to respond and provide such
additional requested documentation within the initial time frame, or
within the extended time frame (if granted by CMS), may result in CMS's
imposition of a civil money penalty based upon the complaint or other
information when there is sufficient evidence indicating a violation of
applicable PHS Act requirements. This new proposed rule also states
that, during the examination, CMS may identify and notify the
responsible entity of any potential PHS Act violations and, in such
circumstances, would provide the entity an opportunity to respond and
submit evidence of its compliance or other documentation the
responsible entity believes would aid CMS in conducting the
examination.
HHS seeks comment on these proposed changes.
13. Determining the Amount of the Penalty--Mitigating Circumstances (45
CFR 150.319)
HHS proposes to make a conforming edit to 45 CFR 150.319 to add
reference to the notice to initiate a market conduct examination under
the new proposed 45 CFR 150.313(e).
14. Determining the Amount of Penalty--Aggravating Circumstances (45
CFR 150.321)
HHS proposes to amend 45 CFR 150.321 to add a new paragraph (d),
which would specify that an entity's failure to cooperate with an
investigation or market conduct examination would be considered an
aggravating circumstance for purposes of determining the aggregate
amount of a penalty. HHS is proposing this additional aggravating
circumstance based on CMS's experience conducting examinations and
investigations. More specifically, HHS has experienced situations where
responsible entities fail to respond to requests for information in a
timely fashion or otherwise generally fail to cooperate in a CMS
enforcement action. For example, in one market conduct examination, an
issuer failed to respond to CMS's requests for information for 6 months
thereby causing significant delay to the examination. HHS is of the
view that it is appropriate and necessary to add this additional
aggravating circumstance to provide CMS a vehicle to increase the
amount of a civil money penalty (up to but not in excess of the
statutory maximum) in situations when the responsible entity fails to
cooperate with a CMS investigation or market conduct examination and
there is sufficient evidence indicating a violation of an applicable
PHS Act requirement to discourage these behaviors.
HHS seeks comment on this proposed change.
15. Settlement Authority (45 CFR 150.325)
HHS proposes to make a conforming edit to 45 CFR 150.325 to add
reference to the notice to initiate a market conduct examination under
the new proposed 45 CFR 150.313(e).
16. Definitions (45 CFR 150.401)
HHS proposes to make a conforming amendment to the definition of
respondent to add a reference to a notice of proposed determination of
a civil money penalty issued under the proposed new 45 CFR 150.515.
This proposed amendment would provide for the same process for
administrative hearings regarding civil money penalties assessed
against providers and facilities as the process established for non-
Federal governmental plans and issuers in states where CMS directly
enforces PHS Act requirements.
17. Filing of Request for Hearing (45 CFR 150.405)
HHS proposes to make a conforming edit to 45 CFR 150.405(a) to add
reference to a notice of proposed determination of a civil money
penalty issued under the new proposed 45 CFR 150.515. This would
provide providers and facilities 30 days from the date of such notice
to request a hearing with an administrative law judge to appeal the
proposed determination. This would align with the existing time frame
provided to non-Federal governmental plans and issuers for such appeals
in states where CMS directly enforces PHS Act requirements.
18. Issues To Be Heard and Decided by ALJ (45 CFR 150.417)
HHS proposes to make a conforming amendment to add a reference to
proposed 45 CFR 150.513 for factors an Administrative Law Judge (ALJ)
can apply to determine the reasonableness of a civil money penalty.
This proposed amendment would provide for the same process for
administrative hearings regarding civil money penalties assessed
against providers and facilities as the process established for non-
Federal governmental plans, and issuers in states where CMS directly
enforces PHS Act requirements.
[[Page 51751]]
19. Evidence (45 CFR 150.445)
HHS proposes to make conforming amendments to 45 CFR 150.445(g),
which pertains to admissibility of evidence of acts other than those at
issue in the instant case, to add references to the proposed 45 CFR
150.513 (which describes factors and mitigating and aggravating
circumstances considered in determination of the amount of civil money
penalty assessed against a provider or facility), and proposed 45 CFR
150.505 and 150.515 (which describe notices sent by CMS to responsible
entities regarding potential violations and civil money penalties
against a provider or facility). HHS proposes to make a similar
conforming amendment to 45 CFR 150.445(j), which pertains to
admissibility of evidence of willingness and ability to enter into and
complete a corrective action plan, to add a reference to proposed 45
CFR 150.505. These proposed amendments would provide for the same
process for administrative hearings regarding civil money penalties
assessed against providers and facilities as the process established
for non-Federal governmental plans, and issuers in states where CMS
directly enforces PHS Act requirements. In addition, HHS proposes to
amend 45 CFR 150.445(h) to provide for cross-examination of witnesses,
to conform to (i) the right to cross-examination already implicit in 45
CFR 150.419, and (ii) section 1128A(c)(2) of the SSA, as required in
section 2799B-4 of the PHS Act. The right to cross-examine witnesses is
fundamental and is being explicitly included here to ensure that the
process for hearings is fair for all parties.
20. Sanctions (45 CFR 150.455)
HHS proposes to amend 45 CFR 150.455 to add the payment of an
aggrieved party's attorneys' fees and other costs as an additional
sanction for violations of 45 CFR part 149, to conform to section
1128A(c)(4) of the SSA. Section 2799B-4 of the PHS Act subjects civil
money penalties assessed under that section to the requirements in
section 1128A(c) of the SSA (with the exception of the first sentence
of section 1128A(c)(1)). Section 1128A(c)(4) of the SSA provides that
an ALJ may sanction parties and attorneys for ``failing to comply with
an order or procedure, failing to defend an action, or other misconduct
as would interfere with the speedy, orderly, or fair conduct of the
hearing.'' Subsection (g) thereof specifically provides for ordering
the party or attorney to pay attorneys' fees and other costs caused by
the failure or misconduct.
D. 45 CFR Part 150, Subpart E--CMS Enforcement With Respect to
Providers and Facilities
HHS proposes to add a new subpart E to 45 CFR part 150, to
implement the requirements of section 2799B-4 of the PHS Act. This new
subpart would specify the CMS enforcement processes with respect to the
requirements of Part E of Title XXVII of the PHS Act (and its
implementing regulations at 45 CFR part 149) that would be applicable
to providers and facilities subject to CMS's enforcement authority.
With respect to potential violations of these requirements, HHS
proposes to follow a similar investigatory process to that which
currently exists in subpart C of 45 CFR part 150, which applies to
investigations of possible violations by plans and issuers. HHS is
proposing to use that similar process to maximize efficiency. HHS
believes that the general steps of reviewing complaints or other
indications of a potential PHS Act violation, notifying responsible
parties of the investigation and directing them to provide information
and documentation for CMS to review and assess compliance, and
directing the responsible party to take corrective actions to remedy
any violations identified are prudent and appropriate to apply to
investigations of providers and facilities. HHS believes that this
proposed approach would allow CMS to effectively enforce the new
requirements and ensure that providers and facilities are sufficiently
informed of the steps in and how to comply with the investigation
process.
In contrast, HHS is proposing a different civil money penalty
process to comply with the statutory requirements of the No Surprises
Act. Section 2799B-4 of the PHS Act delineates the process for
imposition of civil money penalties if a provider or facility is found
to be in violation of Part E of Title XXVII of the PHS Act. Section
106(e) of the No Surprises Act sets forth the process for imposition of
civil money penalties if a provider of air ambulance services fails to
provide data required in section 106(a) of the No Surprises Act. In
both cases, the process must follow section 1128A of the SSA.\33\
Therefore, although many of the investigative processes applicable to
providers and facilities are the same as those applicable to plans and
issuers, HHS proposes to codify the provider and facility enforcement
procedures in new subpart E to 45 CFR part 150.
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\33\ The applicability of section 1128A of the SSA varies
depending on the applicable enforcement provision. For violations
stemming from Section 2799B-4 of the PHS Act, provisions of
subsections (c) (with the exception of the first sentence of
paragraph (1) of such subsection), (d), (e), (g), (h), (k), and (l)
apply. For violations stemming from Section 106 of the No Surprises
Act, all provisions other than subsections (a) and (b) and the first
sentence of subsection (c)(1) apply.
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21. General Rule Regarding the Imposition of Civil Money Penalties (45
CFR 150.501)
Section 2799B-4 of the PHS Act authorizes HHS to apply a civil
money penalty with respect to a provider or facility that is found to
be in violation of Part E of Title XXVII of the PHS Act. Section 106(e)
of the No Surprises Act authorizes HHS to apply a civil money penalty
with respect to a provider of air ambulance services that fails to
submit all information required under section 106(a) of the No
Surprises Act by the required date. HHS proposes to codify those
provisions in 45 CFR 150.501.
22. Basis for Initiating an Investigation; Injunctive Relief (45 CFR
150.503)
HHS proposes that CMS may conduct an investigation based on any
information that indicates a provider or facility is failing to comply
with PHS Act requirements. Proposed 45 CFR 150.503(a) would list the
same sources of information as those that CMS may consider when
investigating potential violations by plans or issuers, including
complaints (such as complaints received under the process established
in 45 CFR 149.150 with respect to plans and issuers or 45 CFR149.450
with respect to providers and facilities), reports from state insurance
departments, the NAIC, other Federal and state agencies, and any other
information that indicates potential noncompliance with PHS Act
requirements. HHS proposes to add state health and medical boards as
additional sources in 45 CFR 150.503(a), as they may be relevant
sources to indicate potential noncompliance by providers and
facilities.
HHS proposes language in 45 CFR 150.503(b) that would clarify who
may file a complaint. This would include any entity or individual, or
any entity or personal representative acting on that individual's
behalf, who believes that a right to which the aggrieved person is
entitled under PHS Act requirements is being, or has been, denied or
abridged as a result of any action or failure to act on the part of a
provider or facility. This would ensure consistency with 45 CFR
150.303(b) which provides that such individuals or entities may submit
a complaint with respect to non-Federal governmental plans and issuers.
HHS proposes in 45 CFR 150.503(c) to establish CMS's authority to
conduct
[[Page 51752]]
random or targeted investigations of providers and facilities. This
would allow CMS to proactively identify and address issues of non-
compliance, and it would generally align CMS's enforcement procedures
with respect to providers and facilities with those applicable to non-
Federal governmental plans and issuers under newly proposed 45 CFR
150.303(c), but would exclude any reference to market conduct
examinations, as these are typically used in connection with group
health plans and health insurance issuers, and not with providers.
HHS proposes to codify in 45 CFR 150.503(d) the statutory language,
located at section 1128A(k) of the SSA and included via section 2799B-4
of the PHS Act, that allows HHS to bring an action to prevent a
provider or facility from engaging in activity that would make the
provider or facility subject to a civil money penalty. HHS also
proposes that CMS may bring an action to prevent a provider or facility
from concealing, removing, encumbering, or disposing of assets that may
be required in order to pay any civil money penalty that might be
imposed or to seek other appropriate relief.
23. Notice to Responsible Entities (45 CFR 150.505)
HHS proposes to specify in 45 CFR 150.505 that if CMS receives
information that indicates a possible violation, or selects a provider
or facility for investigation, or fails to receive data required in 45
CFR 149.460, CMS would provide a written notice to the provider or
facility. The notice would describe the information that prompted the
investigation or notify the provider or facility that it was selected
for investigation. The notice would also state that a civil money
penalty may be assessed, and that CMS may require a plan of corrective
action. The notice would provide the date by which the provider or
facility must respond with additional information, including
documentation of compliance. In the case of a provider of air ambulance
services, this could include a date by which the provider of air
ambulance services would be required to submit any missing information
from the report required under 45 CFR 149.460. HHS anticipates that CMS
would generally provide 14 days for providers and facilities to respond
to the notice with the requested documentation. This would provide
sufficient time for a recipient to investigate the substance of an
allegation and respond to CMS. HHS anticipates that the documentation
or information necessary to respond to most complaints should be
readily available to a provider (for example, in the form of
computerized patient billing records, etc.). A 14-day window for
response should provide sufficient time to gather this documentation
and formulate a response. In circumstances that warrant a more rapid
response, such as complaints involving urgent medical issues or
allegations of fraud and abuse, CMS may shorten the time frame for the
provider or facility to provide the requested documentation but does
not anticipate requesting responses within less than 24 hours.
24. Request for Extension (45 CFR 150.507)
HHS proposes to provide in 45 CFR 150.507 that if a provider or
facility received a notice of possible violation from CMS, and the
provider or facility could not prepare a response by the deadline
provided in the notice under 45 CFR 150.505, such provider or facility
may make a written request for an extension. The request must detail
the reason for the extension request and must show good cause. Examples
of what CMS would consider good cause include, but are not limited to,
when a responsible entity indicates it has limited staffing resources
to prepare a response, or when a responsible entity requests
clarification from CMS regarding its request for information. If CMS
grants the extension, the provider or facility would be required to
respond within the specified time frame. Failure to respond within the
time allotted would result in CMS initiating an action to impose a
civil money penalty.
25. Responses to Notice of Potential Violations (45 CFR 150.509)
HHS proposes to provide in 45 CFR 150.509 that CMS would consider
all relevant documentation provided when determining whether to impose
a civil money penalty, including information from the complainant and
information from the provider or facility. In responding to an
allegation of noncompliance, a provider or facility may submit medical
bills; notice and consent forms signed by the participant, beneficiary,
or enrollee (or an authorized representative); proof of public
disclosure of patient protections against balance billing; or any other
evidence of compliance.
In 45 CFR 150.509(d), HHS proposes that a provider or facility may
also submit to CMS any evidence documenting the development and
implementation of internal policies and procedures to ensure compliance
with the PHS Act and section 106(a) of the No Surprises Act, as
applicable. One example would be a voluntary compliance program. A
voluntary compliance program should, at a minimum: Effectively
articulate and demonstrate the fundamental mission of compliance and
the provider or facility's commitment to the compliance process;
include the name of the individual in the organization who is
responsible for compliance; include an effective monitoring system to
identify practices that do not comply with PHS Act requirements or
section 106(a) of the No Surprises Act, as applicable, and to provide
reasonable assurance that violations are detected in a timely manner;
and address procedures to improve internal policies when noncompliant
practices are identified.
In 45 CFR 150.509(e), HHS proposes that a provider or facility may
respond to an allegation of noncompliance by submitting evidence
documenting the provider or facility's record of previous compliance
with PHS Act requirements or section 106(a) of the No Surprises Act, as
applicable. Examples of previous compliance would include copies of
signed notice and consent forms or prominently displayed disclosures of
patient protections against balance billing.
Section 106(e)(2) of the No Surprises Act provides that HHS may
waive a penalty when a provider of air ambulance services submits only
some of the data required in section 106(a) of the No Surprises Act if
the provider of air ambulance services makes a good faith effort to
submit the missing data. In 45 CFR 150.509(f), HHS proposes that such a
provider can exhibit a good faith effort by submitting and implementing
a corrective action plan that: (i) Identifies the cause underlying the
submission of incomplete data and effectively articulates and
demonstrates the measures that would be taken to submit complete data;
(ii) provides the timeline for submitting complete data; (iii) provides
the name of the individual in the organization responsible for
overseeing corrective actions and submitting complete data; and (iv)
addresses procedures to improve internal policies to ensure that
incomplete data reports are identified and completed prior to
submission for future reporting periods. HHS is of the view that these
elements would demonstrate that a provider of air ambulance services is
committed to identifying and correcting any errors that prevented it
from submitting the complete set of data required. HHS seeks comment on
this proposal.
[[Page 51753]]
26. Liability for Penalties (45 CFR 150.511)
In 45 CFR 150.511, HHS proposes to codify the provision in section
1128A(c)(1) of the SSA that provides that HHS will not commence any
action to impose a civil money penalty unless such action is commenced
within 6 years from the date when the violation occurred.
HHS also proposes that a principal is liable for penalties for the
actions of the principal's agent acting within the scope of his or her
agency, without limiting the underlying liability of the agent.
27. Amount of Penalty (45 CFR 150.513)
At 45 CFR 150.513(a)(1), HHS proposes to codify the statutory
language that permits HHS to impose a civil money penalty in an amount
not to exceed the sum of $10,000 per violation if a provider or
facility is found to be in violation of a PHS Act requirement. At 45
CFR 150.513(a)(2), HHS proposes to codify the statutory language found
in section 106(e) of the No Surprises Act that permits HHS to impose a
civil money penalty in an amount not to exceed the sum of $10,000 if a
provider of air ambulance services fails to submit required data. Such
civil money penalties would be in addition to any other penalties
prescribed or allowed by law.
HHS proposes that CMS would consider all relevant documentation
provided when determining whether to impose a civil money penalty,
including information from the complainant, provider (including a
provider of air ambulance services), or facility. In 45 CFR 150.513(b),
HHS proposes that if CMS were to determine that it would impose a civil
money penalty, there are several factors that would be considered when
determining the amount of such penalty. CMS would consider the nature
of claims of noncompliance and the circumstances under which such
claims were presented. CMS would also consider: the degree of
culpability of the provider or facility against which a civil money
penalty is proposed; the provider or facility's history of prior
violations, including whether CMS or any state previously found the
provider or facility liable for civil or administrative sanctions in
connection with a violation of PHS Act requirements or section 106(a)
of the No Surprises Act, as applicable; the frequency of the violation,
taking into consideration whether any violation is an isolated
occurrence, represents a pattern, or is widespread; and the level of
financial and other impacts on affected individuals. CMS would also
consider any other matters as justice may require.
In 45 CFR 150.513(c), HHS proposes that for every violation subject
to a civil money penalty, if there are substantial or several
mitigating circumstances, the aggregate amount of the penalty would be
set at an amount sufficiently below the statutory maximum of $10,000 to
reflect the mitigating circumstance. As guidelines for considering the
circumstances listed earlier, CMS would consider several factors as
mitigating circumstances. First, CMS would consider the provider or
facility's record of prior compliance. If, for example, the provider or
facility implemented and followed a compliance plan before receipt of
the notice of potential noncompliance, implementing and following such
compliance plan would be considered a mitigating circumstance. If the
provider or facility had no previous complaints against it for
noncompliance, that would also be considered a mitigating circumstance.
Second, CMS would consider the gravity of the violation(s). For
example, it would be considered a mitigating circumstance if the
provider or facility made adjustments to its business practices to come
into compliance with PHS Act requirements so that the provider or
facility: (i) Identified all participants, beneficiaries, and
enrollees, or all plans or issuers, that are or were wrongly billed;
(ii) withdrew the bill or reimbursed the affected individuals, or plans
or issuers, that were wrongly billed so that, to the extent
practicable, the affected individuals, plans or issuers are in the same
position that they would have been in had the violation not occurred;
and (iii) completed those adjustments to its business practices in a
timely manner. Finally, it would be considered a mitigating
circumstance if the provider or facility demonstrated that the
violation was an isolated occurrence.
HHS also proposes in 45 CFR 150.513(d) that CMS would consider
certain factors to be aggravating circumstances. HHS proposes that for
every violation subject to a civil money penalty, if there are
substantial or several aggravating circumstances, CMS may set the
aggregate amount of the penalty at an amount sufficiently close to or
at the $10,000 permitted by statute to reflect that fact. If the
frequency of violation indicates a pattern of widespread occurrence,
that would be considered an aggravating circumstance. If the
violation(s) resulted in significant financial and other impacts on the
average affected individual(s), plan or issuer, that would also be
considered an aggravating circumstance. Finally, if the provider or
facility does not provide documentation showing that substantially all
of the violations were corrected, that would be considered an
aggravating circumstance.
In 45 CFR 150.513(e), HHS proposes that if certain criteria are
met, CMS would waive a penalty. Section 2799B-4(b)(4) of the PHS Act
provides that HHS will waive a civil money penalty if the provider or
facility does not knowingly violate, and should not have reasonably
known it violated, sections 2799B-1 and 2799B-2 of the PHS Act or, in
the case of a provider of air ambulance services, section 2799B-5 of
the PHS Act, as long as the provider or facility withdraws any
erroneous bill and, if necessary, reimburses the plan or enrollee,
within 30 days of the violation in an amount equal to the difference
between the amount billed and the amount allowed to be billed, plus
interest at a rate determined by the Secretary. HHS proposes that the
interest rate be the rate established by the Treasury pursuant to 31
U.S.C. 3717. That is the rate HHS customarily uses for overpayments and
underpayments.\34\ The CAA also provides that HHS will waive a civil
money penalty in the case of a provider of air ambulance services that
submits only part of the data required in section 106(a) of the No
Surprises Act, if such provider demonstrates a good faith effort in
working with HHS to submit any missing information. HHS proposes to
codify that waiver language in 45 CFR 150.513(e)(2).
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\34\ See 42 CFR 405.378 which provides that the interest rate on
overpayments and underpayments is the higher of: (i) The rate as
fixed by the Secretary of the Treasury after taking into
consideration private consumer rates of interest prevailing on the
date of final determination as defined in paragraph (c) of this
section; or (ii) The current value of funds rate (this rate is
published annually in the Federal Register by the Secretary of the
Treasury, subject to quarterly revisions). See also 45 CFR
30.18(b)(2) which provides ``unless a different rate is prescribed
by statute, contract, or a repayment agreement, the rate of interest
charged shall be the rate established annually by the Secretary of
the Treasury pursuant to 31 U.S.C. 3717.''
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In 45 CFR 150.513(f), HHS proposes that nothing in this proposed
section limits the authority of CMS to settle any issue or case
described in the notice furnished in accordance with 45 CFR 150.505 or
to compromise on any penalty provided for in 45 CFR 150.515. This is
consistent with the settlement authority described in 45 CFR 150.325.
HHS recognizes that there may be certain circumstances in which
imposition of a civil money penalty would create a significant
financial hardship for a provider or facility. Various circumstances
may give rise to
[[Page 51754]]
financial hardship, potentially including the financial impact of
natural disasters or public health emergencies, provider disability or
death, and provider solvency concerns. The No Surprises Act allows HHS
to establish a hardship exemption to the civil money penalties that
would otherwise be imposed for a violation of Part E of Title XXVII of
the PHS Act. HHS proposes to codify the hardship exemption in 45 CFR
150.513(g). HHS seeks comments regarding this proposal, including
examples of additional circumstances that may warrant a hardship
exemption.
28. Notice of Proposed Determination (45 CFR 150.515)
Section 2799B-4(b)(1) of the PHS Act and section 106(e) of the No
Surprises Act require HHS to apply certain subsections of section 1128A
of the SSA when imposing a civil money penalty upon a provider or
facility. Specifically, section 1128A(c) of the SSA provides that HHS
may initiate an action for a civil money penalty by serving notice of
the action in any manner authorized under Rule 4 of the Federal Rules
of Civil Procedure. HHS proposes to codify that procedural requirement
in 45 CFR 150.515 and specify that such written notice would include a
description of the requirements that CMS believes the provider or
facility has violated; a description of any complaint or other
information upon which CMS based its investigation; and the amount of
the proposed penalty, including any aggravating or mitigating
circumstances described in 45 CFR 150.513 that were considered when
determining the amount of the proposed penalty.
HHS proposes that the notice of proposed determination would also
include instructions for the provider or facility to respond to the
notice, including a specific statement of the provider or facility's
right to a hearing and a statement that failure to request a hearing
within 30 days of receipt of the notice permits the imposition of the
proposed penalty without right of appeal.
29. Hearing (45 CFR 150.517)
Section 2799B-4(b)(1) of the PHS Act and section 106(e)(3) of the
No Surprises Act specify that sections 1128A(c)(2) and (c)(4) of the
SSA apply to any hearing for a violation of this part. Section
1128A(c)(2) of the SSA requires HHS to provide written notice and an
opportunity for an adverse determination to be made on the record after
a hearing at which the provider or facility is entitled to be
represented by counsel, to present witnesses, and to cross-examine
witnesses.
Section 1128A(c)(4) of the SSA allows the official conducting the
hearing to sanction a person, including any party or attorney, for
failing to comply with an order or procedure, failing to defend an
action, or other misconduct that would interfere with the speedy,
orderly, or fair conduct of the hearing. Any such sanctions must
reasonably relate to the severity and nature of the failure or
misconduct and may include: (a) In the case of refusal to provide or
permit discovery, drawing negative factual inferences or treating such
refusal as an admission by deeming the matter, or certain facts, to be
established; (b) prohibiting a party from introducing certain evidence
or otherwise supporting a particular claim or defense; (c) striking
pleadings, in whole or in part; (d) staying the proceedings; (e)
dismissal of the action; (f) entering a default judgment; (g) ordering
the party or attorney to pay attorneys' fees and other costs caused by
the failure or misconduct; and (h) refusing to consider any motion or
other action which is not filed in a timely manner.
Most of these requirements regarding hearings, insofar as they
apply to hearings conducted under 45 CFR part 150, subpart E, are
codified in various sections of 45 CFR part 150, subpart D; and in
these proposed rules HHS is additionally proposing amendments to 45 CFR
150.401, 150.405, 150.417, 150.445, and 150.455 to conform to these
requirements. Therefore, HHS proposes in 45 CFR 150.517 to specify that
the provisions in 45 CFR 150.401 through 150.457 apply to a hearing
conducted under 45 CFR part 150, subpart E.
HHS proposes in 45 CFR 150.517(b) that if CMS finds a provider or
facility to be in violation of a requirement of Part E of Title XXVII
of the PHS Act, or section 106(a) of the No Surprises Act, such
provider or facility has a right to a hearing pursuant to section
1128A(c)(2) of the SSA. HHS proposes that the provider or facility
would be required to file a request for hearing within 30 days after
the date of receipt of CMS's notice of proposed determination, to
facilitate a timely resolution of the matter.
HHS proposes in 45 CFR 150.517(c) that, consistent with 45 CFR
150.347 as it applies to non-Federal governmental plans and issuers, if
the provider or facility fails to request a hearing within the 30 days,
any penalty would become final.
30. Failure To Request a Hearing (45 CFR 150.519)
HHS proposes in 45 CFR 150.519 that if the provider or facility
does not request a hearing within 30 days of the issuance of the notice
of proposed determination, or show good cause, as determined under 45
CFR 150.405(b) for failing to exercise its right to a hearing, the
determination becomes final, and CMS would notify the provider or
facility of this fact, and the final civil money penalty may be
assessed by CMS. CMS would notify the provider or facility in any
manner authorized by Rule 4 of the Federal Rules of Civil Procedure of
the means by which the provider or facility may satisfy the judgment.
HHS further proposes that the provider or facility would have no right
to appeal a penalty with respect to which it has not requested a
hearing in accordance with 45 CFR 150.405. This aligns with CMS's
enforcement procedures when an issuer or non-Federal governmental plan
fails to request a hearing.
31. Collateral Estoppel (45 CFR 150.521)
Section 1128A(c)(3) of the SSA states that a provider or facility
that requests a hearing under this part may not deny the essential
elements of a criminal offense if that provider or facility has been
convicted of a Federal crime charging fraud or false statements
(whether upon a verdict after trial or upon a plea of guilty or nolo
contendere) and the hearing under this part involves the same
transaction as the criminal action. HHS proposes to codify that
statutory language in 45 CFR 150.521.
32. Judicial Review (45 CFR 150.523)
HHS proposes in 45 CFR 150.523 that any responsible provider or
facility against which a final decision imposing a civil money penalty
is entered pursuant to this subpart may obtain review in the United
States Court of Appeals for the circuit in which the person resides, or
where the violation occurred, by filing in such court (within 60 days
following the date on which such decision becomes final) a written
petition requesting the decision be modified or set aside. Such review
would be conducted pursuant to section 1128A of the SSA. A copy of the
petition would be transmitted by the clerk of the court to CMS, and
thereupon CMS would file in the Court the record in the proceeding as
provided in 28 U.S.C. 2112.
[[Page 51755]]
33. Notice to Other Agencies (45 CFR 150.525)
At 45 CFR 150.525, HHS proposes that whenever a penalty becomes
final, CMS would notify certain organizations and entities about such
action and the reasons for it, as appropriate. Section 150.525 lists
the organizations or entities that section 1128A(h) of the SSA requires
to be notified if a penalty was imposed against a provider or facility:
The state or local medical or professional association, the state
Department of Health, the appropriate state or local licensing agency
or organization, and the appropriate utilization and quality control
peer review organization. HHS proposes that CMS may additionally notify
the following agencies by providing the final penalty notice, as
appropriate: The state Department of Insurance or similar agency, the
state Attorney General, the DOL, the Department of the Treasury, or OPM
by sharing the final penalty notice. HHS seeks comment on any other
organizations or entities that should be notified if a provider or
facility is penalized for a violation of the PHS Act or a violation of
section 106(a) of the No Surprises Act.
IV. Provisions of the Proposed Rules on Reporting Requirements
Regarding Air Ambulance Services--Office of Personnel Management
OPM proposes requirements related to data collection from FEHB
carriers with respect to air ambulance services provided to covered
individuals in an FEHB plan in the same manner as such provisions apply
to a group health plan or health insurance issuer offering group or
individual health insurance coverage. The OPM rules would clarify that
FEHB carriers are both authorized and required by OPM to report
information on air ambulance claims data to HHS in accordance with the
requirements of 45 CFR 149.230. OPM would coordinate with HHS to
receive FEHB air ambulance data. This data would be used by both HHS in
its report to Congress and by OPM in its oversight of the FEHB Program.
Under 5 U.S.C. 8902(p), FEHB carriers must comply with requirements
described in section 9817 of the Code, section 717 of ERISA, and
section 2799A-2 of the PHS Act in the same manner as those provisions
apply to group health plans and health insurance issuers offering group
or individual health insurance coverage. Similarly, 5. U.S.C. 8902(p)
applies balance billing protections described in section 2799B-5 of the
PHS Act to enrollees in an FEHB plan in the same manner as those
provisions apply to enrollees in a group health plan or coverage
offered by an issuer. Despite these parallel provisions, 5 U.S.C.
8902(p) does not reference the reporting requirements found in section
9823 of the Code, section 723 of ERISA, and section 2799A-8 of the PHS
Act.
Under 5 U.S.C. 8910(a), OPM must make a continuing study of the
operation and administration of the FEHB Program, including reports on
FEHB plans' experience. Under 5 U.S.C. 8910(b), each contract between
OPM and FEHB carriers must contain provisions requiring carriers to
furnish such reasonable reports as OPM deems necessary to carry out its
functions under the FEHB Act. Accordingly, OPM's contract with each
FEHB carrier requires the carrier to furnish reports that OPM finds
necessary to properly administer the FEHB Program.\35\ In addition, 5
U.S.C. 8910(c) requires government agencies to furnish OPM with such
information and reports as may be necessary to enable OPM to administer
the FEHB Program.
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\35\ In addition to this statutory authority and parallel
contract language, FEHB carrier contracts incorporate FEHB
regulations found at 5 CFR parts 890 through 894. As part of this
proposed rulemaking, OPM proposes to amend FEHB regulations to
direct carriers to comply with requirements of 45 CFR 149.230.
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Enactment of 5 U.S.C. 8902(p) extends new surprise billing
protections with respect to air ambulance services to FEHB plan
enrollees and their covered family members. OPM has determined that in
order to effectively carry out its functions under 5 U.S.C. 8902(p),
including the underlying goals of increased transparency and lowered
costs for FEHB covered individuals, carriers must furnish to HHS air
ambulance data as provided for in this proposed rule.
FEHB covered individuals utilize air ambulance services not only
domestically but also to transport Federal civilian personnel back to
the United States from service perf
[…truncated; see source link]Indexed from Federal Register on September 16, 2021.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.