Rule2021-21441
Requirements Related to Surprise Billing; Part II
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 7, 2021
Effective
October 7, 2021
Issuing agencies
Personnel Management OfficeTreasury DepartmentInternal Revenue ServiceLabor DepartmentEmployee Benefits Security AdministrationHealth and Human Services Department
Abstract
This document sets forth interim final rules implementing certain provisions of the No Surprises Act, which was enacted as part of the Consolidated Appropriations Act, 2021. These interim final rules implement provisions of the No Surprises Act that provide for a Federal independent dispute resolution (IDR) (Federal IDR) process to permit group health plans and health insurance issuers offering group or individual health insurance coverage and nonparticipating providers, facilities, and providers of air ambulance services to determine the out-of-network rate for items and services that are emergency services, nonemergency services furnished by nonparticipating providers at participating facilities, and air ambulance services furnished by nonparticipating providers of air ambulance services, under certain circumstances. The Department of Health and Human Services (HHS), the Department of Labor (DOL), and the Department of the Treasury (collectively, the Departments) are issuing these interim final rules with largely parallel provisions that apply to group health plans and health insurance issuers offering group or individual health insurance coverage and certified IDR entities, providers, facilities, and providers of air ambulance services. In addition to the interim final rules issued jointly by the Departments, this document also includes interim final rules issued by the Office of Personnel Management (OPM) to clarify how certain No Surprises Act provisions apply to health benefits plans offered by carriers under the Federal Employees Health Benefits (FEHB) Act. In addition to the interim final rules issued jointly by the Departments and OPM, this document includes interim final rules issued by HHS that address good faith estimates of health care items and services for uninsured or self-pay individuals and the associated patient-provider dispute resolution process. The HHS-only interim final rules apply to selected dispute resolution (SDR) entities, providers, facilities, and providers of air ambulance services.
Full Text
<html>
<head>
<title>Federal Register, Volume 86 Issue 192 (Thursday, October 7, 2021)</title>
</head>
<body><pre>
[Federal Register Volume 86, Number 192 (Thursday, October 7, 2021)]
[Rules and Regulations]
[Pages 55980-56142]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-21441]
[[Page 55979]]
Vol. 86
Thursday,
No. 192
October 7, 2021
Part III
Office of Personnel Management
Department of the Treasury
-----------------------------------------------------------------------
Internal Revenue Service
Department of Labor
-----------------------------------------------------------------------
Employee Benefits Security Administration
Department of Health and Human Services
-----------------------------------------------------------------------
5 CFR Part 890
26 CFR Part 54
29 CFR Parts 2510 and 2590
45 CFR Parts 147 and 149
Requirements Related to Surprise Billing; Part II; Interim Final Rule
Federal Register / Vol. 86, No. 192 / Thursday, October 7, 2021 /
Rules and Regulations
[[Page 55980]]
-----------------------------------------------------------------------
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 890
RIN 3206-AO29
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 54
[TD 9955]
RIN 1545-BQ05
DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Parts 2510 and 2590
RIN 1210-AC00
DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Parts 147 and 149
[CMS-9908-IFC]
RIN 0938-AU62
Requirements Related to Surprise Billing; Part II
AGENCY: Office of Personnel Management; Internal Revenue Service,
Department of the Treasury; Employee Benefits Security Administration,
Department of Labor; Centers for Medicare & Medicaid Services,
Department of Health and Human Services.
ACTION: Interim final rules with request for comments.
-----------------------------------------------------------------------
SUMMARY: This document sets forth interim final rules implementing
certain provisions of the No Surprises Act, which was enacted as part
of the Consolidated Appropriations Act, 2021. These interim final rules
implement provisions of the No Surprises Act that provide for a Federal
independent dispute resolution (IDR) (Federal IDR) process to permit
group health plans and health insurance issuers offering group or
individual health insurance coverage and nonparticipating providers,
facilities, and providers of air ambulance services to determine the
out-of-network rate for items and services that are emergency services,
nonemergency services furnished by nonparticipating providers at
participating facilities, and air ambulance services furnished by
nonparticipating providers of air ambulance services, under certain
circumstances. The Department of Health and Human Services (HHS), the
Department of Labor (DOL), and the Department of the Treasury
(collectively, the Departments) are issuing these interim final rules
with largely parallel provisions that apply to group health plans and
health insurance issuers offering group or individual health insurance
coverage and certified IDR entities, providers, facilities, and
providers of air ambulance services. In addition to the interim final
rules issued jointly by the Departments, this document also includes
interim final rules issued by the Office of Personnel Management (OPM)
to clarify how certain No Surprises Act provisions apply to health
benefits plans offered by carriers under the Federal Employees Health
Benefits (FEHB) Act. In addition to the interim final rules issued
jointly by the Departments and OPM, this document includes interim
final rules issued by HHS that address good faith estimates of health
care items and services for uninsured or self-pay individuals and the
associated patient-provider dispute resolution process. The HHS-only
interim final rules apply to selected dispute resolution (SDR)
entities, providers, facilities, and providers of air ambulance
services.
DATES:
Effective date: These regulations are effective on October 7, 2021.
Applicability date: Except as otherwise specified in this
paragraph, the regulations issued jointly by the Departments of HHS,
Labor, and the Treasury are generally applicable for plan or policy
years beginning on or after January 1, 2022. The regulations regarding
certification of IDR entities at 26 CFR 54.9816-8T(a) and (e), 29 CFR
2590.716-8(a) and (e), and 45 CFR 149.510(a) and (e) are applicable
beginning on October 7, 2021. The OPM-only regulations that apply to
health benefits plans are applicable to contract years beginning on or
after January 1, 2022. The regulations issued by HHS alone that apply
to health care providers, facilities, providers of air ambulance
services, and SDR entities are applicable beginning on January 1, 2022,
except that the regulations at 45 CFR 149.620(a) and (d) are applicable
beginning on October 7, 2021.
Comment date: To be assured consideration, comments must be
received at one of the addresses provided below, no later than 5 p.m.
on December 6, 2021.
ADDRESSES: Written comments may be submitted to the addresses specified
below. Any comment that is submitted will be shared among the
Departments. Please do not submit duplicates.
Comments will be made available to the public. Warning: Do not
include any personally identifiable information (such as name, address,
or other contact information) or confidential business information that
you do not want publicly disclosed. Comments are posted on the internet
exactly as received and can be retrieved by most internet search
engines. No deletions, modifications, or redactions will be made to the
comments received, as they are public records. Comments may be
submitted anonymously.
In commenting, refer to file code RIN 1210-AB00. Because of staff
and resource limitations, we cannot accept comments by facsimile (FAX)
transmission.
Comments, including mass comment submissions, must be submitted in
one of the following two ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the ``Submit a
comment'' instructions.
2. By mail. You may mail written comments to the following address
ONLY: Office of Health Plan Standards and Compliance Assistance,
Employee Benefits Security Administration, U.S. Department of Labor,
200 Constitution Avenue NW, Room N-5653, Washington, DC 20210,
Attention: RIN 1210-AB00.
You may mail written comments regarding the HHS-only regulations to
the following address: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention CMS-9908-IFC, P.O.
Box 8010, Baltimore, MD 21244-8010. Attention: RIN 0938-AU62.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Padma Babubhai Shah, Office of
Personnel Management, at 202-606-4056; Kari DiCecco, Internal Revenue
Service, Department of the Treasury, at 202-317-5500; Elizabeth
Schumacher or David Sydlik, Employee Benefits Security Administration,
Department of Labor, at 202-693-8335; Deborah Bryant, Centers for
Medicare & Medicaid Services, Department of Health and Human Services,
at 301-492-4293.
Customer Service Information: Information from OPM on health
benefits plans offered under the FEHB
[[Page 55981]]
Program can be found on the OPM website (<a href="http://www.opm.gov/healthcare-insurance/healthcare/">www.opm.gov/healthcare-insurance/healthcare/</a>).
Individuals interested in obtaining information from the DOL
concerning employment-based health coverage laws may call the Employee
Benefits Security Administration (EBSA) Toll-Free Hotline at 1-866-444-
EBSA (3272) or visit the DOL's website (<a href="http://www.dol.gov/agencies/ebsa">www.dol.gov/agencies/ebsa</a>).
In addition, information from HHS on private health insurance
coverage, coverage provided by non-Federal governmental group health
plans, and requirements that apply to health care providers, health
care facilities, and providers of air ambulance services can be found
on the Centers for Medicare & Medicaid Services (CMS) website
(<a href="http://www.cms.gov/cciio">www.cms.gov/cciio</a>), and information on health care reform can be found
at <a href="http://www.HealthCare.gov">www.HealthCare.gov</a>.
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://regulations.gov">https://regulations.gov</a>.
Follow the search instructions on that website to view public comments.
I. Background
A. Preventing Surprise Medical Bills Under the Consolidated
Appropriations Act, 2021
On December 27, 2020, the Consolidated Appropriations Act, 2021
(CAA), which includes the No Surprises Act, was enacted.\1\ The No
Surprises Act provides Federal protections against surprise billing and
limits out-of-network cost sharing under many of the circumstances in
which surprise bills arise most frequently. Surprise billing occurs
when an individual receives an unexpected medical bill from a health
care provider or facility after receiving medical services from a
provider or facility that, usually unknown to the participant,
beneficiary, or enrollee, is a nonparticipating provider or facility
with respect to the individual's coverage.
---------------------------------------------------------------------------
\1\ Public Law 116-260 (December 27, 2020).
---------------------------------------------------------------------------
The No Surprises Act added new provisions applicable to group
health plans and health insurance issuers offering group or individual
health insurance coverage in Subchapter B of chapter 100 of the
Internal Revenue Code (Code), Part 7 of the Employee Retirement Income
Security Act (ERISA), and Part D of title XXVII of the Public Health
Service Act (PHS Act). Section 102 of the No Surprises Act added Code
section 9816, ERISA section 716, and PHS Act section 2799A-1,\2\ which
contain limitations on cost sharing and requirements regarding the
timing of initial payments for emergency services furnished by
nonparticipating providers and emergency facilities, and for
nonemergency services furnished by nonparticipating providers at
certain participating health care facilities. Section 103 of the No
Surprises Act amended Code section 9816, ERISA section 716, and PHS Act
section 2799A-1 to establish a Federal IDR process that allows plans
and issuers and nonparticipating providers and facilities to resolve
disputes regarding out-of-network rates. Section 105 of the No
Surprises Act created Code section 9817, ERISA section 717, and PHS Act
section 2799A-2, which contain limitations on cost sharing and
requirements for the timing of initial payments for nonparticipating
providers of air ambulance services and allow plans and issuers and
providers of air ambulance services to access the Federal IDR process
described in Code section 9816, ERISA section 716, and PHS Act section
2799A-1. The No Surprises Act provisions that apply to health care
providers and facilities and providers of air ambulance services, such
as prohibitions on balance billing for certain items and services and
requirements related to disclosures about balance billing protections,
were added to title XXVII of the PHS Act in a new part E.
---------------------------------------------------------------------------
\2\ As discussed later in this preamble, section 102(d)(1) of
the No Surprises Act amended the Federal Employees Health Benefits
Act, 5 U.S.C. 8901 et seq., by adding a new subsection (p) to 5
U.S.C. 8902. Under this new provision, each FEHB Program contract
must require a carrier to comply with requirements described in
section 9816 of the Code, section 716 of ERISA, and section 2799A-1
(as applicable) in the same manner as these provisions apply with
respect to a group health plan or health insurance issuer offering
group or individual health insurance coverage.
---------------------------------------------------------------------------
On July 13, 2021, the Departments of the Treasury, Labor, and
Health and Human Services (Departments) and the Office of Personnel
Management (OPM) published interim final rules with request for
comments titled, Requirements Related to Surprise Billing; Part I,
which generally apply to group health plans and health insurance
issuers offering group or individual health insurance coverage
(including grandfathered health plans) with respect to plan years (in
the individual market, policy years) beginning on or after January 1,
2022; to carriers in the FEHB Program with respect to contract years
beginning on or after January 1, 2022; and to health care providers and
facilities, and providers of air ambulance services beginning on
January 1, 2022 (July 2021 interim final rules).\3\ The July 2021
interim final rules implement Code sections 9816(a)-(b) and 9817(a),
ERISA sections 716(a)-(b) and 717(a), and PHS Act sections 2799A-1(a)-
(b), 2799A-2(a), 2799A-7, 2799B-1, 2799B-2, 2799B-3, and 2799B-5 to
protect consumers from surprise medical bills for emergency services,
nonemergency services furnished by nonparticipating providers at
participating facilities in certain circumstances, and air ambulance
services furnished by nonparticipating providers of air ambulance
services. Among other requirements, the July 2021 interim final rules
require plans and issuers that provide or cover any benefits with
respect to services in an emergency department of a hospital or with
respect to emergency services in an independent freestanding emergency
department to cover emergency services without any prior authorization;
without regard to whether the health care provider furnishing the
emergency services is a participating provider or the services are
provided in a participating emergency facility; and without regard to
any other term or condition of the plan or coverage other than the
exclusion or coordination of benefits or a permitted affiliation or
waiting period. With respect to emergency services furnished by
nonparticipating providers or facilities, nonemergency services
furnished by nonparticipating providers at certain participating
facilities, and air ambulance services furnished by nonparticipating
providers of air ambulance services, the July 2021 interim final rules
generally limit cost sharing for out-of-network services to in-network
levels, require such cost sharing to count toward any in-network
deductibles and out-of-pocket maximums, and prohibit balance billing.
---------------------------------------------------------------------------
\3\ 86 FR 36872 (July 13, 2021).
---------------------------------------------------------------------------
The July 2021 interim final rules also specify that consumer cost-
sharing amounts for emergency services furnished by nonparticipating
providers or facilities, and for nonemergency services furnished by
nonparticipating providers at certain participating facilities, must be
calculated based on one of the following amounts: (1) An amount
determined by an applicable All-Payer Model Agreement under
[[Page 55982]]
Social Security Act section 1115A; (2) if there is no such applicable
All-Payer Model Agreement, an amount determined by a specified state
law; or (3) if there is no such applicable All-Payer Model Agreement or
specified state law, the lesser of the billed charge or the plan's or
issuer's median contracted rate, the latter referred to as the
qualifying payment amount (QPA). Cost-sharing amounts for air ambulance
services provided by nonparticipating providers of air ambulance
services must meet the same standards as would apply if the services
were provided by a participating provider of air ambulance services and
must be calculated using the lesser of the billed charges or the QPA.
Under the July 2021 interim final rules, balance billing for
services subject to the requirements in those interim final rules
generally is prohibited.\4\ In general, the protections in the July
2021 interim final rules that limit cost sharing and prohibit balance
billing do not apply to certain post-stabilization services, or to
certain nonemergency services performed by nonparticipating providers
at participating health care facilities, if the provider makes certain
disclosures to the participant, beneficiary, or enrollee, and obtains
the individual's consent to waive balance billing protections. However,
this exception to the prohibition on balance billing is narrow. In
particular, it is not available in certain circumstances where surprise
bills are likely to occur, such as for ancillary services provided by
nonparticipating providers in connection with nonemergency care in a
participating health care facility. The July 2021 interim final rules
also include a number of other specific requirements regarding notice
and consent that must be met in order for a provider or facility to be
permitted to balance bill a participant, beneficiary, or enrollee for
items and services that would otherwise be subject to the prohibition
on balance billing.
---------------------------------------------------------------------------
\4\ 45 CFR 149.410(a), 149.420(a) and 149.440(a).
---------------------------------------------------------------------------
The Departments are issuing regulations in several phases
implementing provisions of title I (No Surprises Act) and title II
(Transparency) of Division BB of the CAA. These interim final rules
build upon the protections in the July 2021 interim final rules and
implement the Federal IDR provisions under Code sections 9816(c) and
9817(b), ERISA sections 716(c) and 717(b), and PHS Act sections 2799A-
1(c) and 2799A-2(b). OPM is also issuing regulations in phases to
implement 5 U.S.C. 8902(p).
The Departments and OPM also published a notice of proposed
rulemaking on September 16, 2021, titled Requirements Related to Air
Ambulance Services, Agent and Broker Disclosures, and Provider
Enforcement.\5\ The proposed rule would, if finalized, implement
reporting requirements for air ambulance claims data; requirements on
health insurance issuers offering individual health insurance coverage
or short term, limited-duration insurance to disclose and report
information regarding direct or indirect compensation provided to
agents and brokers (section 202(c) of title II of Division BB of the
CAA); as well as provisions related to HHS enforcement of requirements
on issuers, non-Federal governmental group health plans, providers,
facilities, and providers of air ambulance services. Later this year,
the Departments intend to undertake rulemaking to implement reporting
requirements related to pharmacy benefits and prescription drug costs
(section 204 of title II of Division BB of the CAA).
---------------------------------------------------------------------------
\5\ 86 FR 51730 (Sept. 16, 2021).
---------------------------------------------------------------------------
The provisions of the No Surprises Act that are applicable to group
health plans and health insurance issuers offering group or individual
health insurance coverage in the Code, ERISA, and the PHS Act apply to
grandfathered health plans. Section 1251 of the Affordable Care Act
provides that grandfathered health plans are not subject to certain
provisions of the Code, ERISA, and the PHS Act, as added by the
Affordable Care Act, for as long as they maintain their status as
grandfathered health plans.\6\ For example, grandfathered health plans
are neither subject to the requirement to cover certain preventive
services without cost sharing under PHS Act section 2713 nor to the
annual limitation on cost sharing set forth under PHS Act section
2707(b). If a plan or coverage were to relinquish its grandfathered
status, it would be required to comply with both provisions, in
addition to several other requirements. However, the CAA does not
include an exception for grandfathered health plans that is comparable
to section 1251 of the Affordable Care Act. Furthermore, section
102(d)(2) of the No Surprises Act amended section 1251(a) of the
Affordable Care Act to clarify that the new and recodified patient
protections provisions of the No Surprises Act, including those related
to choice of health care professional, apply to grandfathered health
plans. Therefore, not only do the provisions of these interim final
rules and the provisions of the July 2021 interim final rules that
apply to group health plans and issuers of group or individual health
insurance coverage apply to grandfathered plans, so do the other
provisions applicable to group health plans and issuers of group or
individual health insurance coverage in titles I and II of Division BB
of the CAA.
---------------------------------------------------------------------------
\6\ For a list of the market reform provisions applicable to
grandfathered health plans under title XXVII of the PHS Act that the
Affordable Care Act added or amended and that were incorporated into
ERISA and the Code, visit <a href="https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/grandfathered-health-plans-provisions-summary-chart.pdf">https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/grandfathered-health-plans-provisions-summary-chart.pdf</a>.
---------------------------------------------------------------------------
B. PHS Act Section 2719 and Scope of Claims Eligible for External
Review
PHS Act section 2719, as added by the Affordable Care Act, applies
to group health plans that are not grandfathered health plans and
health insurance issuers offering non-grandfathered coverage in the
group and individual markets, and sets forth standards for plans and
issuers regarding both internal claims and appeals and external review.
With respect to external review, PHS Act section 2719 provides for both
state external review processes and a Federal external review process
that applies in the absence of an applicable state process that meets
the requirements of section 2719. Non-grandfathered group health plans
that are not self-insured plans (as self-insured plans are not subject
to state insurance regulations) and health insurance issuers offering
non-grandfathered group or individual health insurance coverage must
comply with an applicable state external review process if that process
includes, at a minimum, the consumer protections set forth in the
Uniform Health Carrier External Review Model Act issued by the National
Association of Insurance Commissioners (the NAIC Uniform Model Act). If
a state's external review process does not meet the minimum consumer
protection standards set forth in the NAIC Uniform Model Act (or if a
plan is self-insured and not subject to state insurance regulation),
group health plans and health insurance issuers in the group and
individual markets in that state are required to implement an effective
external review process that meets minimum standards established by the
Departments through rulemaking.
The Departments issued interim final regulations to implement PHS
Act section 2719, including the provisions related to external review,
in 2010.\7\ An
[[Page 55983]]
amendment to the interim final rules was issued in 2011.\8\ In 2015,
the Departments issued final rules to finalize the interim final
regulations.\9\ Among other things, the 2015 final rules address the
scope of claims eligible for external review.\10\ State external review
processes that meet the minimum standards must provide for the external
review of adverse benefit determinations that are based on requirements
for medical necessity, appropriateness, health care setting, level of
care, or effectiveness of a covered benefit. The Federal external
review process must be available for any adverse benefit determination
by a plan or issuer that involves medical judgment, as well as
rescissions. Section 110 of the No Surprises Act directs the
Departments, in applying section 2719(b) of the PHS Act, to require the
external review process to apply with respect to any adverse
determination by a plan or issuer under Code section 9816 or 9817,
ERISA section 716 or 717, or PHS Act section 2799A-1 or 2799A-2.
---------------------------------------------------------------------------
\7\ 75 FR 43329 (July 23, 2010).
\8\ 76 FR 37207 (June 10, 2011).
\9\ 80 FR 72191 (Nov. 18, 2015).
\10\ 26 CFR 54.9815-2719(d)(1); 29 CFR 2590.715-2719(d)(1); 45
CFR 147.136(d)(1).
---------------------------------------------------------------------------
C. Protecting Uninsured Individuals Through Transparency and Patient-
Provider Dispute Resolution
On July 9, 2021, President Biden signed Executive Order 14036,
Promoting Competition in the American Economy in order to promote the
interests of American workers, businesses, and consumers.\11\ The
executive order acknowledges that robust competition is critical to
providing consumers with more choices, better service, and lower prices
and directs the Secretary of HHS to support existing price transparency
initiatives for hospitals, other providers, and insurers along with any
new price transparency initiatives or changes made necessary by the No
Surprises Act or any other statues. Consistent with Executive Order
14036, these interim final rules implement provisions of the No
Surprises Act that will provide individuals with more pricing
information prior to seeking care, allowing them to shop for the care
that is best for them and increase competition in the health care
market.
---------------------------------------------------------------------------
\11\ 86 FR 36987 (Jul 9, 2021).
---------------------------------------------------------------------------
The No Surprises Act also adds a new Part E of title XXVII of the
PHS Act establishing requirements applicable to health care providers,
providers of air ambulance services, and health care facilities.
Section 112 of the No Surprises Act adds PHS Act sections 2799B-6 and
2799B-7. PHS Act section 2799B-6 requires providers and facilities to
furnish a good faith estimate of expected charges upon request or upon
scheduling an item or service. Providers and facilities are required to
inquire if an individual is enrolled in a group health plan, group or
individual health insurance coverage, an FEHB plan,\12\ or a Federal
health care program, and, if enrolled in a group health plan, or group
or individual health insurance coverage, or a health benefits plan
under chapter 89 of title 5,\13\ whether the individual is seeking to
have a claim for such item or service submitted to such plan or
coverage. In the case that the individual is enrolled in such a plan or
coverage (and is seeking to have a claim for such an item or services
submitted to such plan or coverage), PHS Act section 2799B-6(2)(A)
requires that the provider or facility furnish the good faith estimate
to the individual's plan or issuer of such coverage to inform the
advanced explanation of benefits that plans and issuers are required to
provide a participant, beneficiary, enrollee, or FEHB covered
individual under Code section 9816(f), ERISA section 716(f), PHS Act
section 2799A-1(f), and 5 U.S.C. 8902(p). In the case that the
individual requesting a good faith estimate for an item or service or
seeking to schedule an item or service to be furnished who is not
enrolled in a plan or coverage, or is not seeking to file a claim with
such plan or coverage (self-pay), PHS Act section 2799B-6(2)(B) and
these interim final rules at 45 CFR 149.610 require providers and
facilities to furnish the good faith estimate to the individual.
---------------------------------------------------------------------------
\12\ HHS interprets the requirements described in PHS Act
section 2799B-6 to apply with respect to FEHB covered individuals as
they would to other individuals enrolled in a group health plan,
group or individual health insurance coverage offered by a health
insurance issuer. Although PHS Act section 2799B-6 does not
reference health benefits plans under chapter 89 of title 5, the
definition of ``uninsured individual'' at PHS Act section 2799B-7
does include individuals who do not have benefits under these health
benefits plans, and these sections work together to provide
protections for the uninsured (or self-pay) population. Moreover,
the requirement for the provision of an advance explanation of
benefits required by Code section 9816(f), ERISA section 716(f), and
PHS Act section 2799A-(1)(f), as well as 5 U.S.C. 8902(p) cannot be
accomplished by a FEHB carrier unless it receives a good faith
estimate from a provider in accordance with PHS Act section 2799B-
6(2)(A).
\13\ A health benefits plan offered under chapter 89 of title 5,
United States Code is also known as an FEHB plan.
---------------------------------------------------------------------------
These interim final rules do not include requirements regarding PHS
Act section 2799B-6(2)(A), which require providers and facilities to
furnish good faith estimates to plans or issuers. Under Code section
9816(f), ERISA section 716(f), and PHS Act section 2799A-1(f) and 5
U.S.C. 8902(p), plans and issuers are required to include the good
faith estimates in an advanced explanation of benefits provided to
participants, beneficiaries, enrollees, and FEHB covered individuals.
As stated in the August 20, 2021, FAQs issued by the Departments, the
Departments have received feedback from the public about the challenges
of developing the technical infrastructure necessary for providers and
facilities to transmit to plans and issuers starting January 1, 2022,
the good faith estimates required under PHS Act section 2799B-6, which
plans and issuers must then include in the advanced explanation of
benefits. Accordingly, until rulemaking to fully implement this
requirement to provide such a good faith estimate to an individual's
plan or coverage is adopted and applicable, HHS will defer enforcement
of the requirement that providers and facilities provide good faith
estimate information for individuals enrolled in a health plan or
coverage and seeking to submit a claim for scheduled items or services
to their plan or coverage. Additionally, stakeholders have requested
that the Departments delay the applicability date of Code section
9816(f), ERISA section 716(f), and PHS Act section 2799A-1(f) until the
Departments have established standards for the data transfer between
providers and facilities and plans and issuers and have given enough
time for plans and issuers and providers and facilities to build the
infrastructure necessary to support the transfers. The Departments
agree that compliance with this section is likely not possible by
January 1, 2022, and therefore intend to undertake notice and comment
rulemaking in the future to implement this provision, including
establishing appropriate data transfer standards. Until such time, the
Departments will defer enforcement of the requirement that plans and
issuers must provide an advanced explanation of benefits. HHS will
consider whether additional interim solutions for insured consumers are
feasible. The Departments note that any rulemaking to fully implement
Code section 9816(f), ERISA section 716(f), and PHS Act sections 2799A-
1(f) and 2799B-6(2)(A) will include a prospective applicability date
that provides plans, issuers, providers, and facilities with a
reasonable amount of time to comply with new requirements. HHS
encourages states that are primary enforcers of these requirements with
regard to providers and issuers to take a similar enforcement approach,
and
[[Page 55984]]
will not determine that a state is failing to substantially enforce
these requirements if it takes such an approach.
Nonetheless, providers and facilities will be subject to
enforcement action for failure to provide a good faith estimate to
individuals not enrolled in a plan or coverage, or not seeking to have
a claim for such item or services submitted to such plan or issuer of
such coverage, as specified under these interim final rules. HHS seeks
comment on this approach.
On November 12, 2020, the Departments issued the Transparency in
Coverage final rules,\14\ which require group health plans and health
insurance issuers of group or individual health insurance coverage to
make price comparison information available to participants,
beneficiaries, and enrollees through an internet-based self-service
tool and in paper form, upon request. This information must be
available for plan years--or in the individual market, for policy
years--beginning on or after January 1, 2023 with respect to 500
specified items and services, and with respect to all covered items and
services, for plan or policy years beginning on or after January 1,
2024. The Departments are of the view that the disclosure requirements
to participants, beneficiaries, and enrollees under the Transparency in
Coverage final rules, and those required under Code section 9816(f),
ERISA section 716(f), and PHS Act section 2799A-1(f), are substantially
similar and therefore the Departments seek comment on whether there are
ways to leverage the Transparency in Coverage requirements, including
whether there are ways for plans and issuers to provide the information
required in the Transparency in Coverage final rules to participants,
beneficiaries, and enrollees during plan or policy years beginning in
2022. The Departments also seek comment on whether it would be feasible
for providers and facilities to provide an estimate or range of
estimated costs for insured consumers upon request for 2022.
---------------------------------------------------------------------------
\14\ 26 CFR 54.9815-2715A2(b), 29 CFR 2590.715-2715A2(b), and 45
CFR 147.211(b).
---------------------------------------------------------------------------
Section 112 of the No Surprises Act also adds PHS Act section
2799B-7, which directs the Secretary of HHS to establish a process
under which uninsured (or self-pay) individuals can avail themselves of
a patient-provider dispute resolution process if their billed charges
after receiving an item or service are substantially in excess of the
expected charges listed in the good faith estimate furnished by the
provider or facility, pursuant to PHS Act section 2799B-6. Under PHS
Act section 2799B-7, an uninsured (or self-pay) individual means, with
respect to an item or service, an individual who does not have benefits
for such item or service under a group health plan, group or individual
health insurance coverage offered by a health insurance issuer, Federal
health care program (as defined in section 1128B(f) of the Social
Security Act), or a health benefits plan under chapter 89 of title 5,
United States Code (or an individual who has benefits for such item or
service under a group health plan or individual or group health
insurance coverage offered by a health insurance issuer, but does not
seek to have a claim for such item or service submitted to such plan or
coverage).
II. Executive Summary
A. Departments of the Treasury, Labor, and HHS: Federal IDR Process and
External Review
In order to implement the Federal IDR provisions under Code
sections 9816(c) and 9817(b), ERISA sections 716(c) and 717(b), and PHS
Act sections 2799A-1(c) and 2799A-2(b), as added by sections 103 and
105 of the No Surprises Act, these interim final rules establish a
Federal IDR process that nonparticipating providers or facilities,
nonparticipating providers of air ambulance services, and group health
plans and health insurance issuers in the group and individual market
may use following the end of an unsuccessful open negotiation period to
determine the out-of-network rate for certain services. More
specifically, the Federal IDR provisions may be used to determine the
out-of-network rate for certain emergency services, nonemergency items
and services furnished by nonparticipating providers at participating
health care facilities, and air ambulance services furnished by
nonparticipating providers of air ambulance services where an All-Payer
Model Agreement or specified state law does not apply.
Under Code sections 9816(c)(1)(A) and 9817(b)(1)(A), ERISA sections
716(c)(1)(A) and 717(b)(1)(A), PHS Act sections 2799A-1(c)(1)(A) and
2799A-2(b)(1)(A), and these interim final rules, upon receiving an
initial payment or notice of denial of payment from a plan or issuer
with respect to such items or services, such provider or facility or
provider of air ambulance services (as applicable) or plan or issuer
(as applicable) may initiate an open negotiation period within 30
business days beginning on the date the provider or facility receives
the initial payment or notice of denial of payment. The open
negotiation period may continue for up to 30 business days beginning on
the date that either party first initiates the open negotiation period.
The parties may discontinue the negotiation if they agree on an out-of-
network rate before the last day of the 30-business-day open
negotiation period. If the parties cannot agree on an out-of-network
rate, they must exhaust the 30-business-day open negotiation period
before initiating the Federal IDR process. Either party may initiate
the Federal IDR process during the 4-business-day period beginning on
the 31st business day after the start of the open negotiation period.
The parties may select a certified IDR entity, or if the parties do not
select a certified IDR entity, the Departments will do so. The No
Surprises Act and these interim final rules specify that the certified
IDR entity selected cannot be a party to the determination or an
employee or agent of such a party, or have a material familial,
financial, or professional relationship with such party.
In resolving the disputes through the Federal IDR process, the No
Surprises Act and these interim final rules provide that each party
must submit to the certified IDR entity an offer for a payment amount
for the qualified IDR item or service in dispute and other information
related to the offer as requested by the certified IDR entity within 10
business days of selection of the certified IDR entity and may submit
additional information for the certified IDR entity to consider. In
making a determination of which payment offer to select, these interim
final rules specify that the certified IDR entity must begin with the
presumption that the QPA is the appropriate out-of-network rate for the
qualified IDR item or service under consideration. These interim final
rules further provide that the certified IDR entity must select the
offer closest to the QPA unless the certified IDR entity determines
that credible information submitted by either party clearly
demonstrates that the QPA is materially different from the appropriate
out-of-network rate, based on the additional factors set forth in Code
sections 9816(c)(5)(C)(ii) and 9817(b)(5)(C)(ii), ERISA sections
716(c)(5)(C)(ii) and 717(b)(5)(C)(ii), and PHS Act sections 2799A-
1(c)(5)(C)(ii) and 2799A-2(b)(5)(C)(ii). The certified IDR entity may
not consider usual and customary charges, the amount that would have
been billed (including billed charges that are directed to the plan or
issuer) if the protections of 45 CFR 149.410,
[[Page 55985]]
149.420, or 149.440 \15\ (as applicable) had not applied, or any public
payor payment or reimbursement rates.\16\ As discussed more fully in
section III.D.4.ii. of this preamble, this approach is consistent with
the No Surprises Act's emphasis on the QPA, both as the basis of the
surprise billing protections also included in the statute and
implemented by the July 2021 interim final rules and as the sole factor
identified without any qualification by the statute.\17\ The
Departments are of the view that implementing the Federal IDR process
in this manner encourages predictable outcomes, which will reduce the
use of the Federal IDR process over time and the associated
administrative fees born by the parties, while providing equitable and
clear standards for when payment amounts may deviate from the QPA, as
appropriate.
---------------------------------------------------------------------------
\15\ The July 2021 interim final rules prohibit nonparticipating
emergency facilities and nonparticipating providers furnishing
emergency services from billing participants, beneficiaries, or
enrollees for payment amounts that exceed the cost-sharing
requirement for those items or services. The July 2021 interim final
rules also generally prohibit nonparticipating providers furnishing
nonemergency items and services at participating facilities from
balance billing participants, beneficiaries, or enrollees for those
items or services. In addition, the July 2021 interim final rules
prohibit nonparticipating providers of air ambulance services
furnishing air ambulance services for which benefits are available
under a group health plan or group or individual health insurance
coverage from balance billing participants, beneficiaries, or
enrollees for those items or services.
\16\ Public payor payment and reimbursement rates include
reimbursement rates under the Medicare program under title XVIII of
the Social Security Act, under the Medicaid program under title XIX
of such Act, under the Children's Health Insurance Program under
title XXI of such Act, under the TRICARE program under chapter 55 of
title 10, United States Code, and under chapter 17 of title 38,
United States Code.
\17\ The No Surprises Act limits the certified IDR entity's
consideration of additional factors by prohibiting the certified IDR
entity from considering certain other factors, such as usual and
customary charges and billed charges, in making a payment
determination.
---------------------------------------------------------------------------
The No Surprises Act and these interim final rules also set forth
requirements for certification of IDR entities by the Departments. To
become certified IDR entities, IDR entities must provide written
documentation demonstrating that they meet the eligibility criteria,
including having sufficient expertise and staffing to conduct
determinations on a timely basis, being free of conflicts of interest,
being accredited by a nationally recognized and relevant accrediting
body (such as URAC) or otherwise ensuring that IDR entity personnel
possess the requisite training to conduct payment determinations (for
example, providing documentation that personnel employed by the IDR
entity have completed arbitration training by the American Arbitration
Association (AAA), the American Health Law Association (AHLA), or a
similar organization), ensuring policies and procedures are in place to
maintain confidentiality of individually identifiable health
information, providing a fixed fee for single determinations and a
separate fee for batched determinations, having a procedure in place to
retain certified IDR entity fees and retain and remit administrative
fees, meeting appropriate indicators of fiscal integrity and stability,
evidencing its ability to collect and transmit the information required
to be reported to the Departments, and properly carrying out the
requirements of the Federal IDR process in accordance with the law.
These interim final rules also establish a process whereby members of
the public, providers, facilities, providers of air ambulance services,
plans, or issuers may petition for the denial or revocation of
certification of an IDR entity. Finally, these interim final rules
require the collection of information related to the Federal IDR
process from certified IDR entities in order to allow the Departments
to quarterly publish information on IDR payment determinations.
The Departments are also establishing a Federal IDR portal to
administer the Federal IDR process. The Departments' Federal IDR portal
will be available at <a href="https://www.nsa-idr.cms.gov">https://www.nsa-idr.cms.gov</a> and will be used
throughout the Federal IDR process to maximize efficiency and reduce
burden. As discussed throughout this preamble, the Federal IDR portal
may be used to satisfy various requirements under these interim final
rules, including provision of notices, Federal IDR initiation,
submission of an application to be a certified IDR entity, as well as
satisfying reporting requirements.
These interim final rules also amend final regulations issued by
the Departments in 2015 related to external review in order to
implement section 110 of the No Surprises Act. Section 110 requires
that ``[i]n applying the provisions of section 2719(b) of the [PHS Act]
to group health plans and health insurance issuers offering group or
individual health insurance coverage, the Secretary of [HHS], Secretary
of Labor, and Secretary of the Treasury, shall require, beginning not
later than January 1, 2022, the external review process described in
paragraph (1) of such section to apply with respect to any adverse
determination by such a plan or issuer under Code section 9816 or 9817,
ERISA section 716 or 717, or PHS Act section 2799A-1 or 2799A-2,
including with respect to whether an item or service that is the
subject to such a determination is an item or service to which such
respective section applies.'' Accordingly, these interim final rules
amend the final regulations regarding external review in two ways.
First, the scope of adverse benefit determinations eligible for
external review is amended to ensure that issues related to compliance
with the specified provisions of the No Surprises Act fall within that
scope. Several examples are also added to provide greater clarity to
stakeholders regarding the expanded scope. Second, applicability
provisions are amended to require that grandfathered health plans,
which generally are exempt from requirements related to external
review, must nonetheless provide for external review of adverse benefit
determinations for claims subject to the cost-sharing and surprise
billing protections in the No Surprises Act. The Departments seek
comment on all aspects of these interim final rules.
B. Office of Personnel Management: Federal IDR Process for FEHB
Carriers
The OPM interim final rules amend existing 5 CFR 890.114(a) to
include references to the Treasury, DOL, and HHS interim final rules to
clarify that pursuant to 5 U.S.C. 8902(p), FEHB carriers are also
subject to the Federal IDR process set forth in those regulations with
respect to an item or service eligible for determination through open
negotiation or the Federal IDR process furnished by a FEHB carrier
offering a health benefits plan in the same manner as those provisions
apply to a group health plan or health insurance issuer offering group
or individual health insurance coverage, subject to 5 U.S.C. 8902(m)(1)
and the provisions of the FEHB carrier's contract. Through new 5 CFR
890.114(d), OPM adopts the Departments' interim final rules as
conformed by terms unique to the FEHB Program. In 5 CFR 890.114(d), OPM
adopts the Departments' rules as necessary to properly integrate with
existing FEHB Program structure and sets forth circumstances in which
OPM will enforce these rules as applied to FEHB carriers. The OPM
interim final rules require FEHB carrier notice to the OPM Director
(herein, the Director) of an FEHB carrier's notice of initiation, or
receipt of a provider's notice of initiation, of the Federal IDR
process. The Director will coordinate with the Departments in matters
regarding FEHB
[[Page 55986]]
carriers requiring resolution under the Federal IDR process and with
respect to oversight of certified IDR entities' reports regarding FEHB
carriers. As discussed in the July 2021 interim final rules, all out-
of-network rate determinations regarding IDR items or services eligible
for determination through open negotiation or the Federal IDR process
under the No Surprises Act with respect to FEHB plans or carriers that
are not resolved by open negotiation are subject to the Federal IDR
process unless OPM contracts with FEHB carriers include terms that
adopt state law as governing for this purpose.
C. Department of HHS: Protections for the Uninsured
To ensure that uninsured (or self-pay) individuals are also
afforded protections against surprise health care costs, the No
Surprises Act includes provisions that require providers and facilities
to furnish good faith estimates to uninsured (or self-pay) individuals
upon their request and at the time of scheduling the item or service.
In order to implement these provisions under PHS Act sections 2799B-
6(1) and 2799B-6(2)(B), HHS is adding 45 CFR 149.610 to establish
requirements for providers and facilities to specifically inquire about
an individual's health coverage status and requirements for providing a
good faith estimate to uninsured (or self-pay) individuals. These
interim final rules define uninsured (or self-pay) individuals to
include those who do not have benefits for an item or service under a
group health plan, group or individual health insurance coverage
offered by a health insurance issuer, a Federal health care program (as
defined in section 1128B(f) of the Social Security Act), or a health
benefits plan under chapter 89 of title 5, United States Code, or an
individual who has benefits for such item or service under a group
health plan or individual or group health insurance coverage offered by
a health insurance issuer, but who does not seek to have a claim for
such item or service submitted to such plan or coverage. PHS Act
section 2799B-6, added by section 112 of the No Surprises Act, does not
specifically define a Federal health care program and also does not
reference health benefits plans under chapter 89 of title 5. However,
PHS Act section 2799B-7, which was also added by section 112 of the No
Surprises Act, and which provides protections related to the good faith
estimate required under PHS Act section 2799B-6, defines an uninsured
individual to include individuals not enrolled in a Federal health care
program (as defined in section 1128B(f) of the Social Security Act) and
individuals not enrolled in health benefits plans under chapter 89 of
title 5. To align these two related sections, HHS is adopting the
definition of an uninsured (or self-pay) individual at PHS Act section
2799B-7 for the purposes of the interim final rules at 45 CFR 149.610
which implements PHS Act section 2799B-6(1) and 2799B-6(2)(B) and 45
CFR 149.620 which implements PHS Act section 2799B-7.
The definition of uninsured (or self-pay) individuals in these
interim final rules includes individuals enrolled in individual or
group health insurance coverage offered by a health insurance issuer,
or a health benefits plan under chapter 89 of title 5, but not seeking
to have a claim for such item or service submitted to such plan or
coverage. These individuals are often referred to as self-pay
individuals, therefore these interim final rules include the term self-
pay when discussing uninsured individuals.
Under PHS Act section 2791(b)(5), short-term, limited-duration
insurance is excluded from the definition of individual health
insurance coverage. Therefore, for purposes of 45 CFR 149.610 and 45
CFR 149.620, uninsured (or self-pay) individuals include individuals
who are enrolled in short-term, limited-duration insurance and not also
enrolled in a group health plan, group or individual health insurance
coverage offered by a health insurance issuer, Federal health care
program (as defined in section 1128B(f) of the Social Security Act), or
a health benefits plan under chapter 89 of title 5, United States Code.
Thus, providers and facilities will be required to provide to such
individuals a good faith estimate and such individuals will be able to
avail themselves of the patient-provider dispute resolution process,
where applicable.
PHS Act section 2799B-6(2) and these interim final rules specify
that a provider or facility must provide a notification (in clear and
understandable language) of the good faith estimate of the expected
charges for furnishing the items or services listed on the good faith
estimate (including any items or services that are reasonably expected
to be provided in conjunction with such scheduled or requested items or
services and such items or services reasonably expected to be so
provided by another health care provider or health care facility), with
the expected billing and diagnostic codes for any such items or
services.
As discussed in section I.C. of this preamble, requirements to
implement PHS Act section 2799B-6(2)(A) are not included in these
interim final rules given the challenges of developing the technical
infrastructure necessary to transmit such data from providers and
facilities to plans and issuers. The requirements in these interim
final rules apply only to good faith estimate notifications for
uninsured (or self-pay) individuals as described in PHS Act section
2799B-6(2)(B) and in these interim final rules. HHS acknowledges that
PHS Act section 2799B-6 also requires providers and facilities to make
certain disclosures to an individual's plan or coverage if the
individual is enrolled in such a plan or coverage and is seeking to
have a claim for such items or services submitted to such plan or
coverage. Specifically, section 2799B-6(2)(A) requires a provider or
facility to provide such a plan or issuer notification of the good
faith estimate of expected charges for furnishing an item or service on
the same terms as provided to individuals.
Health care providers and health care facilities are required under
PHS Act section 2799B-6 to furnish a notification of the good faith
estimate of expected charges to an uninsured (or self-pay) individual
who schedules an item or service, and to an individual who has not yet
scheduled an item or service, but requests a good faith estimate. PHS
Act section 2799B-6 requires providers and facilities to furnish a good
faith estimate to an uninsured (or self-pay) individual who schedules
an item or service at least 3 business days before the date such item
or service is to be so furnished, not later than 1 business day after
the date of such scheduling (or, in the case of such an item or service
scheduled at least 10 business days before the date such item or
service is to be so furnished (or if requested by the uninsured (or
self-pay) individual), not later than 3 business days after the date of
such scheduling or such request). As further discussed in section VI of
this preamble, in instances where an uninsured (or self-pay) individual
requests a good faith estimate of expected charges, but the item or
service has not been scheduled, these interim final rules require that
the treating provider furnish a good faith estimate to the uninsured
(or self-pay) individual, within 3 business days of such request. For
example, if an uninsured (or self-pay) individual schedules an item or
service on Monday, January 3 to be provided on Thursday, January 6, the
provider and facility must furnish a good faith estimate no later than
Tuesday, January 4. If scheduling occurs on Monday, January 3 for items
or services to be
[[Page 55987]]
provided on Thursday, January 13, the provider and facility must
furnish a good faith estimate no later than Thursday, January 6. If an
uninsured (or self-pay) individual requests a good faith estimate on
Monday, January 3 for items or services not yet scheduled, the provider
and facility must furnish the good faith estimate no later than
Thursday, January 6.
These interim final rules include definitions relating to good
faith estimates of expected charges for uninsured (or self-pay)
individuals for scheduled items or services and upon request. These
interim final rules also include requirements for providers and
facilities regarding the contents of the good faith estimates and the
manner in which good faith estimates must be provided.
PHS Act section 2799B-7 provides further protections for the
uninsured (or self-pay) individual by requiring the Secretary of HHS to
establish a process (in this section referred to as patient-provider
dispute resolution) under which an uninsured (or self-pay) individual
who received from a provider or facility a good faith estimate of the
expected charges, and who, after being furnished the item or service,
is billed an amount that is substantially in excess of the expected
charges in the good faith estimate, may seek a determination from a
certified dispute resolution entity of the amount to be paid to the
provider or facility.
HHS is adding new 45 CFR 149.620 to implement this patient-provider
dispute resolution process, including specific definitions related to
the process. HHS is also codifying provisions related to eligibility
for the patient-provider dispute resolution process, and selection of
an SDR entity. HHS clarifies that while SDR entities provide a similar
function and must meet similar requirements as certified IDR entities,
SDR entities are specific to the patient-provider dispute resolution
process. These interim final rules also codify requirements related to
the determination of payment amounts by SDR entities, fees associated
with the patient-provider dispute resolution process, certification of
SDR entities, and deferral to state-established patient-provider
dispute resolution processes that meet certain minimum Federal
standards.
III. Overview of the Interim Final Rules Regarding the Federal
Independent Dispute Resolution Process for Plans, Issuers, Providers,
Facilities, and Providers of Air Ambulance Services--Departments of the
Treasury, Labor, and HHS
A. Definitions
Code section 9816, ERISA section 716, and PHS Act sections 2799A-1
and 2799A-2 include defined terms that are specific to the law's
requirements and implementation.\18\ The definitions in 26 CFR 54.9816-
3T, 29 CFR 2590.716-3, and 45 CFR 149.30 apply to these interim final
rules; these interim final rules also define additional terms specific
to the Federal IDR process. Under these interim final rules, ``batched
items and services'' means multiple qualified IDR items or services
that are considered jointly as part of one payment determination by a
certified IDR entity for purposes of the Federal IDR process. For a
qualified IDR item or service to be included as a batched item or
service, the qualified IDR item or service must satisfy the criteria
for batching set forth in 26 CFR 54.9816-8T(c)(3), 29 CFR 2590.716-
8(c)(3), and 45 CFR 149.510(c)(3). ``Certified IDR entity'' means an
entity responsible for conducting determinations under 26 CFR 54.9816-
8T(c), 29 CFR 2590.716-8(c), and 45 CFR 149.510(c) that meets the
certification criteria specified in 26 CFR 54.9816-8T(e), 29 CFR
2590.716-8(e), and 45 CFR 149.510(e) and that has been certified by the
Departments. Separately, ``IDR entity'' means an entity that may apply
or has applied for certification to conduct determinations under 26 CFR
54.9816-8T(c), 29 CFR 2590.716-8(c), and 45 CFR 149.510(c) and
currently is not certified by the Departments pursuant to 26 CFR
54.9816-8T(e), 29 CFR 2590.716-8(e), and 45 CFR 149.510(e). If a
certified IDR entity's certification has expired or has been revoked as
a result of the process described in 26 CFR 54.9816-8T(e)(6), 29 CFR
2590.716-8(e)(6), and 45 CFR 149.510(e)(6), upon the date of the
expiration or revocation, the formerly-certified IDR entity will be
referred to as an IDR entity.
---------------------------------------------------------------------------
\18\ To implement these interim final rules regarding the
Federal IDR process under the PHS Act, HHS is amending 45 part CFR
149 by adding new Subparts F and G. Additionally, the Departments
are amending 26 CFR 54.9816-1T and 54.9816-2T, 29 CFR 2590.716-1 and
2590.716-2 and 45 CFR 149.10 and 149.20 to expand the scope and
applicability of this part to include IDR entities and the Federal
IDR process. HHS is also amending 45 CFR 149.10 and 149.20 to expand
the scope and applicability of this part to include SDR entities,
the good faith estimate requirements, and patient-provider dispute
resolution process.
---------------------------------------------------------------------------
These interim final rules also define certain terms related to
conflict-of-interest standards applicable to certified IDR entities.
Stakeholders have emphasized the importance of ensuring a broad
conflict-of-interest standard in order to avoid the risk of biased IDR
payment determinations (or the appearance of biased IDR payment
determinations). In general, a ``conflict of interest'' means, with
respect to a party to a payment determination, a certified IDR entity,
a material relationship, status, or condition of the party, or
certified IDR entity that impacts the ability of a certified IDR entity
to make an unbiased and impartial payment determination. For purposes
of these interim final rules, a conflict of interest exists when a
certified IDR entity is a group health plan; a health insurance issuer
offering group health insurance coverage, individual health insurance
coverage or short-term, limited-duration insurance; an FEHB carrier; or
a provider, a facility,\19\ or a provider of air ambulance services.
While the statute does not specify that the IDR entity must not be a
health insurance issuer offering short-term, limited-duration
insurance, the Departments have determined that such entities should
not be eligible for certification, due to their similarity to health
insurance issuers offering group and individual health insurance
coverage and their inherent interest as issuers in keeping
reimbursement rates for providers, facilities, and providers of air
ambulance services low. A conflict of interest also exists when a
certified IDR entity is an affiliate or a subsidiary of a group health
plan; a health insurance issuer offering group health insurance
coverage, individual health insurance coverage or short-term, limited-
duration insurance; an FEHB carrier; or provider, facility, or provider
of air ambulance services. A conflict of interest also exists when a
certified IDR
[[Page 55988]]
entity is an affiliate or subsidiary of a professional or trade
association representing group health plans; health insurance issuers
offering group health insurance coverage, individual health insurance
coverage or short-term, limited-duration insurance; FEHB carriers; or
providers, facilities, or providers of air ambulance services.
Additionally, a conflict of interest exists when a certified IDR entity
has, or any personnel assigned to a determination have a material
familial, financial, or professional relationship with a party to the
payment determination being disputed, or with any officer, director, or
management employee of the plan, issuer or carrier offering a health
benefits plan under 5 U.S.C. 8902; the plan administrator, plan
fiduciaries, or plan, issuer, or carrier's employees; the health care
provider, the health care provider's group or practice association; the
provider of air ambulance services, the provider of air ambulance
services' group or practice association, or the facility that is a
party to the dispute. The Departments are of the view that an officer,
director, or management employee of the plan issuer, or carrier
offering a health benefits plan under 5 U.S.C. 8902; the plan
administrator, plan fiduciaries, or plan, issuer or carrier employees;
the health care provider, the health care provider's group or practice
association; the provider of air ambulance services, the provider of
air ambulance services' group or practice association, or the facility
that is a party to the dispute are individuals who could have
significant involvement with the dispute. Relationships with these
individuals could therefore improperly affect the certified IDR
entities' ability to be impartial.
---------------------------------------------------------------------------
\19\ Similar to the July 2021 interim final rules, the term
``facility'' indicates a facility that furnishes health care
services that is subject to the surprise billing protections of the
No Surprises Act, such as a hospital (including a hospital's
emergency department), urgent care center, or ambulatory surgical
center. For purposes of good faith estimates under 45 CFR 149.610
and the Patient-Provider dispute resolution process in 45 CFR
149.620 ``facility'' includes an institution (such as a hospital or
hospital outpatient department, critical access hospital, ambulatory
surgical center, rural health center, federally qualified health
center, laboratory, or imaging center) in any state in which state
or applicable local law provides for the licensing of such an
institution, that is licensed as such an institution pursuant to
such law or is approved by the agency of such state or locality
responsible for licensing such institution as meeting the standards
established for such licensing.
---------------------------------------------------------------------------
These interim final rules also define what constitutes a material
familial relationship, a material financial relationship, or material
professional relationship with a party to the payment determination. In
developing these definitions, the Departments looked to states'
conflict-of-interest standards for external review and arbitrations of
surprise billing claims. These state standards typically use terms that
are similar to those used in Code section 9816(c)(4)(F)(i)(II), ERISA
section 716(c)(4)(F)(i)(II), and PHS Act section 2799A-
1(c)(4)(F)(i)(II).\20\ By adopting definitions that largely mirror
these state standards, the Departments seek to ensure that the
definitions are workable and increase the likelihood that IDR entities
may be familiar with these standards, if they have performed services
in these states. Accordingly, these interim final rules provide that
the term ``material familial relationship'' means any relationship as a
spouse, domestic partner, child, parent, sibling, spouse's or domestic
partner's parent, spouse's or domestic partner's sibling, spouse's or
domestic partner's child, child's parent, child's spouse or domestic
partner, or sibling's spouse or domestic partner. ``Material financial
relationship'' means any financial interest of more than five percent
of total annual revenue or total annual income of a certified IDR
entity or an officer, director, or manager thereof, or of a reviewer or
reviewing physician employed or engaged by a certified IDR entity to
conduct or participate in any payment determination under the Federal
IDR process. Under the definition of ``material financial
relationship,'' annual revenue and annual income do not include
mediation fees received by mediators who are also arbitrators, provided
that the mediator acts in the capacity of a mediator and does not
represent a party in the mediation. Finally, with respect to terms
related to the conflict-of-interest standards, ``material professional
relationship'' means any physician-patient relationship, any
partnership or employment relationship or affiliation, any shareholder
or similar ownership interest in a professional corporation,
partnership, or other similar entity, or any independent contractor
arrangement that constitutes a material financial relationship with any
expert used by the certified IDR entity or any officer or director of
the certified IDR entity. The Departments solicit comment on whether
the defined terms related to the conflict-of-interest standards should
include threshold requirements to further define the level of
relationship that would rise to the level of a conflict of interest.
---------------------------------------------------------------------------
\20\ See e.g., WAC 284-43A-010; N.Y. Comp. Codes R. & Regs. tit.
11 section 410.2.
---------------------------------------------------------------------------
Additionally, under these interim final rules, the Departments
define certain terms related to confidentiality, information security,
and privacy requirements that apply to an IDR entity seeking
certification under these interim final rules. Code section
9816(c)(4)(A)(v), ERISA section 716(c)(4)(A)(v), and PHS Act section
2799A-1(c)(4)(A)(v) require certified IDR entities to maintain the
confidentiality of individually identifiable health information (IIHI)
obtained while making payment determinations and engaging in other
activities related to the Federal IDR process. In establishing
definitions for these terms, the Departments looked to existing Federal
standards, particularly the Health Insurance Portability and
Accountability Act of 1996 (HIPAA), the Health Information Technology
for Economic and Clinical Health (HITECH) Act, and the privacy,
security, and breach notification standards under 45 CFR part 160 A and
subparts A, C, D, and E of part 164, because the Departments are of the
view that these provisions are industry standards. The Departments have
modified these standards in some cases to fit the circumstances of IDR
entities.
These interim final rules define ``Individually identifiable health
information (IIHI)'' to mean any information, including demographic
data, that relates to the past, present, or future physical or mental
health or condition of an individual; the provision of health care to
an individual; or the past, present, or future payment for the
provision of health care to an individual; and that identifies the
individual; or with respect to which there is a reasonable basis to
believe the information can be used to identify the individual.\21\
Finally, these interim final rules define ``Unsecured IIHI'' to mean
IIHI that is not rendered unusable, unreadable, or indecipherable to
unauthorized persons through the use of a technology or methodology
specified by the Departments. For technologies and methodologies
approved for this purpose, certified IDR entities should refer to the
HHS Guidance to Render Unsecured Protected Health Information Unusable,
Unreadable, or Indecipherable to Unauthorized Individuals.\22\
---------------------------------------------------------------------------
\21\ Note that this definition is broader than the definition of
IIHI set forth in the Health Insurance Portability and
Accountability Act (HIPAA) Rules at 45 CFR 160.103.
\22\ HHS Office for Civil Rights, ``Guidance to Render Unsecured
Protected Health Information Unusable, Unreadable, or Indecipherable
to Unauthorized Individuals,'' available at <a href="https://www.hhs.gov/guidance/document/guidance-render-unsecured-protected-health-information-unusable-unreadable-or">https://www.hhs.gov/guidance/document/guidance-render-unsecured-protected-health-information-unusable-unreadable-or</a>.
---------------------------------------------------------------------------
These interim final rules provide that the term ``breach'' means
the acquisition, access, use, or disclosure of IIHI in a manner not
permitted under 26 CFR 54.9816-8T(e)(2)(v), 29 CFR 2590.716-8(e)(2)(v),
and 45 CFR 149.510(e)(2)(v) that compromises the security or privacy of
the IIHI. Under these interim final rules, a breach excludes any
unintentional acquisition, access, or use of IIHI by personnel,
including a contractor or subcontractor, acting under the authority of
a certified IDR entity, if the acquisition, access, or use was made in
good faith and within the scope of authority and does not result in
further use or disclosure in a
[[Page 55989]]
manner not permitted under 26 CFR 54.9816-8T(e)(2)(v), 29 CFR 2590.716-
8(e)(2)(v), and 45 CFR 149.510(e)(2)(v). Also excluded is any
inadvertent disclosure by a person who is authorized to access IIHI as
personnel of a certified IDR entity to another person authorized to
access IIHI as personnel of the same certified IDR entity (including a
contractor or subcontractor of the certified IDR entity), and the
information received as a result of such disclosure is not further used
or disclosed in a manner not permitted under 26 CFR 54.9816-
8T(e)(2)(v), 29 CFR 2590.716-8(e)(2)(v), and 45 CFR 149.510(e)(2)(v).
Finally, also excluded is a disclosure of IIHI when a certified IDR
entity has a good faith belief that an unauthorized person to whom the
disclosure was made would not reasonably have been able to retain such
information. For example, if, while conducting an IDR payment
determination, a certified IDR entity sends paperwork containing IIHI
to the wrong address and the paperwork is returned by the post office,
unopened, as undeliverable, the certified IDR entity can conclude that
the entity at the improper address could not reasonably have retained
the information. The definition of breach additionally provides that an
acquisition, access, use, or disclosure of IIHI in a manner not
permitted under 26 CFR 54.9816-8T(e)(2)(v), 29 CFR 2590.716-8(e)(2)(v),
and 45 CFR 149.510(e)(2)(v) is presumed to be a breach unless the
certified IDR entity demonstrates that there is a low probability that
the security or privacy of the IIHI has been compromised based on a
risk assessment of at least the following factors: (1) The nature and
extent of the IIHI involved, including the types of identifiers and the
likelihood of re-identification; (2) the unauthorized person who used
the IIHI or to whom the disclosure was made; (3) whether the IIHI was
actually acquired or viewed; and (4) the extent to which the risk to
the IIHI has been mitigated.
Additionally, ``qualified IDR item or service'' means an item or
service that is either an emergency service furnished by a
nonparticipating provider or nonparticipating emergency facility
subject to the protections of 26 CFR 54.9816-4T, 29 CFR 2590.716-4, or
45 CFR 149.110, for which the conditions of 45 CFR 149.410(b)
(regarding receipt of notice of surprise billing protections and
providing consent to waive them) are not met. The term also means an
item or service furnished by a nonparticipating provider at a
participating health care facility subject to the requirements of 26
CFR 54.9816-5T, 29 CFR 2590.716-5, and 45 CFR 149.120, for which the
conditions of 149.420(c)-(i) (regarding receipt of notice of surprise
billing protections and providing consent to waive them) are not met,
for which the provider or facility (as applicable) or plan or issuer
submits a valid Notice of IDR Initiation initiating the Federal IDR
process. For the Notice of IDR Initiation to be valid, the open
negotiation period under 26 CFR 54.9816-8T(b)(1), 29 CFR 2590.716-
8(b)(1), and 45 CFR 149.510(b)(1) must have lapsed, and an agreement on
the payment amount must not have been reached. The term qualified IDR
item or service includes air ambulance services provided by
nonparticipating providers of air ambulance services subject to the
protections of 26 CFR 54.9817-1T, 29 CFR 2590.717-1, and 45 CFR
149.130, as these services are defined in 26 CFR 54.9816-3T, 29 CFR
2590.716-3, and 45 CFR 149.30, for which the open negotiation period
under 26 CFR 54.9816-8T(b)(1), 29 CFR 2590.716-8(b)(1), and 45 CFR
149.510(b)(1) has lapsed, and no agreement on the payment amount has
been reached.
The term ``qualified IDR item or service'' does not include items
and services for which the out-of-network rate is determined by an All-
Payer Model Agreement under section 1115A of the Social Security Act,
or by reference to a specified state law. Additionally, this term does
not include items or services submitted by the initiating party that
are subject to the 90-calendar-day suspension period under 26 CFR
54.9816-8T(c)(4)(vii)(B), 29 CFR 2590.716-8(c)(4)(vii)(B), and 45 CFR
149.510(c)(4)(vii)(B). However, the term may include items or services
that are subject to the 90-calendar-day suspension period if they are
submitted during the subsequent 30-business-day period, as allowed
under these interim final rules. The Departments solicit comment on
these definitions, including whether other terms should be defined.
B. The Term ``Days''
The No Surprises Act specifies a number of time periods that
providers, facilities, providers of air ambulance services, plans,
issuers, certified IDR entities, and the Departments must abide by
throughout the course of the Federal IDR process, including time
periods for initiation of the Federal IDR process, selection of a
certified IDR entity, submission of documents, and payment
determinations. The statute is largely silent on whether the term
``days'' used in these provisions means business days or calendar days.
However, in certain provisions, the No Surprises Act specifies the use
of calendar days or business days, indicating that where the statute is
silent the Departments may choose either meaning. The Departments
received feedback from stakeholders that meeting various deadlines
under the Federal IDR process may be challenging (for example,
depending on a certified IDR entity's case load or the number of claims
that a provider or facility batches together) and that, if possible,
additional time should be provided for the parties and the certified
IDR entity to meet these deadlines. The Departments are of the view
that in order to provide parties with the most time permitted under the
statute to meet the various deadlines under the Federal IDR process as
set forth in the No Surprises Act, business days should be used, unless
there is a reason to use calendar days. For example, these interim
final rules provide that calendar days are used for the timing
requirement for the non-prevailing party to make payment after the
certified IDR entity issues a written determination, as well as the
requirement barring the initiation of the Federal IDR process for a
payment dispute that concerns the same or similar qualified IDR item or
service that was the subject of the initial notification during the 90-
calendar-day period following the initial determination discussed later
in this preamble. In these instances, the Departments are of the view
that once a decision has been rendered, these interim final rules
should not unduly delay the payment entitled under that decision.
Moreover, in terms of the 90-day suspension period, the Departments are
of the view that using a business day standard here has the potential
to create an unnecessary barrier to accessing the Federal IDR process.
Furthermore, the Departments are of the view that using business
days will avoid issues that may arise if deadlines were to fall on
weekends or Federal holidays. Therefore, business days (Monday through
Friday, not including Federal holidays) instead of calendar days are
used throughout these interim final rules for the Federal IDR process
unless otherwise indicated, regardless of whether a nonparticipating
provider or facility, or a plan or issuer's business typically operates
on weekend days.
C. Open Negotiation and Initiation of the Federal IDR Process
Code section 9816(c)(1)(A), ERISA section 716(c)(1)(A), PHS Act
section 2799A-1(c)(1)(A), and these interim final rules provide that
with respect to an emergency service, a nonemergency
[[Page 55990]]
item or service furnished by a nonparticipating provider at a
participating facility subject to the surprise billing protections for
which the notice and consent exceptions do not apply, and for which the
out-of-network rate is not determined by reference to an All-Payer
Model Agreement under section 1115A of the Social Security Act or
specified state law as defined in 26 CFR 54.9816-3T, 29 CFR 2590.716-3,
and 45 CFR 149.30, the provider or facility, or plan or issuer, may
engage in open negotiations to determine the total out-of-network rate
(including any cost sharing). If the parties fail to reach an agreement
through open negotiation, they may initiate the Federal IDR process.
Code section 9817(b), ERISA section 717(b), and PHS Act section 2799A-
2(b) provide that out-of-network rates for air ambulance services may
be determined through open negotiation or an IDR process that is
largely identical to the process provided for in Code section 9816(c),
ERISA section 716(c), and PHS Act section 2799A-1(c), provided the out-
of-network rate is not determined by reference to an All-Payer Model
Agreement under section 1115A of the Social Security Act or specified
state law as defined in 26 CFR 54.9816-3T, 29 CFR 2590.716-3, and 45
CFR 149.30. Therefore, where applicable, providers of air ambulance
services are included in the preamble and regulatory language text
describing open negotiations and the Federal IDR process. The primary
distinctions between air ambulance services and other health care
services apply in how the certified IDR entity should select an offer
and in the obligations on the certified IDR entity regarding reporting
of information relating to the Federal IDR process.
1. Open Negotiation
The open negotiation period may be initiated by any party during
the 30-business-day period beginning on the day the nonparticipating
provider, facility, or nonparticipating provider of air ambulance
services receives either an initial payment or a notice of denial of
payment for an item or service.\23\ If the provider, facility, or
provider of air ambulance services accepts such initial payment as the
total payment, that initial payment combined with the cost-sharing
amount for the item or service is the out-of-network rate, as defined
in 26 CFR 54.9816-3T, 29 CFR 2590.716-3, and 45 CFR 149.30. Under the
July 2021 interim final rules, the plan or issuer must provide in
writing, with each initial payment or notice of denial of payment,
certain information, including a statement that if the provider,
facility, or provider of air ambulance services, as applicable, wishes
to initiate a 30-business-day open negotiation period for purposes of
determining the out-of-network rate, the provider, facility, or
provider of air ambulance services may contact the appropriate person
or office to initiate open negotiation, and that if the 30-business-day
open negotiation period does not result in an agreement on the out-of-
network rate, generally, the provider, facility, or provider of air
ambulance services may initiate the Federal IDR process. The plan or
issuer must also provide contact information, including a telephone
number and email address, for the appropriate person or office to
initiate open negotiations for purposes of determining an amount of
payment (including cost sharing) for the item or service.
---------------------------------------------------------------------------
\23\ As clarified in the July 2021 interim final rules, the
initial payment should be an amount that the plan or issuer
reasonably intends to be payment in full based on the relevant facts
and circumstances, prior to the beginning of any open negotiations
or initiation of the Federal IDR process.
---------------------------------------------------------------------------
In order for a plan, issuer, provider, facility, or provider of air
ambulance services to know when it is a party to an open negotiation
period and which items or services are subject to negotiation, these
interim final rules require that the party initiating the open
negotiation must provide written notice to the other party of its
intent to negotiate, referred to as an open negotiation notice. The
open negotiation notice must include information sufficient to identify
the items or services subject to negotiation, including the date the
item or service was furnished, the service code, the initial payment
amount or notice of denial of payment, as applicable, an offer for the
out-of-network rate, and contact information of the party sending the
open negotiation notice. The open negotiation notice must be sent
within 30 business days of the initial payment or notice of denial of
payment from the plan or issuer regarding such item or service and must
be provided in writing. The party sending the open negotiation notice
may satisfy this requirement by providing the notice to the opposing
party electronically (such as by email) if the following two conditions
are satisfied: (1) The party sending the open negotiation notice has a
good faith belief that the electronic method is readily accessible to
the other party; and (2) the notice is provided in paper form free of
charge upon request. For example, if a provider sends an open
negotiation notice to the email address identified by the group health
plan or issuer in the notice of denial or initial payment, such
electronic delivery would satisfy this requirement (as long as the
provider also sends the notice in paper form free of charge upon
request). Similarly, if a provider, facility, or provider of air
ambulance services submits a claim electronically, this could provide
the plan or issuer with a good faith belief that the electronic method
is readily accessible to the other party.
The 30-business-day open negotiation period begins on the day on
which the open negotiation notice is first sent by a party. The
Departments expect that most open negotiation notices will be sent
electronically, and that, in general, the date the notice is sent will
also be the date the notice is received. Furthermore, given that the
parties have already made initial contact (namely that the provider or
facility has transmitted a bill to the plan or issuer, and the plan or
issuer has sent a notice of denial or initial payment to the provider
or facility), the Departments anticipate that the parties should be
able to provide effective notice without problems, and encourage the
parties to take reasonable measures to ensure that actual notice is
provided, such as confirming that the email address is accurate. The
Departments caution that if the open negotiation notice is not properly
provided to the other party (and no reasonable measures have been taken
to ensure actual notice has been provided), the Departments may
determine that the 30-business-day open negotiation period has not
begun. In such case, any subsequent payment determination from a
certified IDR entity may be unenforceable due to the failure of the
party sending the open negotiation notice to meet the open negotiation
requirement of these interim final rules. Therefore, the Departments
encourage parties submitting open negotiation notices to take steps to
confirm the other party's contact information and confirm receipt by
the other party, through approaches such as read receipts, especially
where a party does not initially respond to an open negotiation notice.
The Departments solicit comment on whether there are any challenges or
additional clarifications needed to ensure the parties are afforded the
full open negotiation period, including whether there are any
challenges regarding designating the date the notice is sent as the
commencement date of the open negotiation period.
To facilitate communication between parties and compliance with
this notice requirement, the Departments are concurrently issuing a
standard notice
[[Page 55991]]
that the parties must use to satisfy the open negotiation notice
requirement.
Negotiation during the open negotiation period will occur without
the involvement of the Departments or a certified IDR entity. The
Departments note that this requirement for a 30-business-day open
negotiation period prior to initiating the Federal IDR process does not
preclude the parties from reaching an agreement in fewer than 30
business days. However, in the event the parties do not reach an
agreement, the parties must still exhaust the 30-business-day open
negotiation period before either party may initiate the Federal IDR
process. The Departments encourage parties to negotiate in good faith
during this time period to reach an agreement on the out-of-network
rate. To the extent parties reach agreement during this period, they
can avoid the administrative costs associated with the Federal IDR
process.
2. Initiating the Federal IDR Process and the Notice of IDR Initiation
Code section 9816(c)(1)(B), ERISA section 716(c)(1)(B), PHS Act
section 2799A-1(c)(1)(B), and these interim final rules provide that
with respect to items or services that were subject to open
negotiation, if the parties have not reached an agreed-upon amount for
the out-of-network rate by the last day of the open negotiation period,
either party may initiate the Federal IDR process during the 4-
business-day period beginning on the 31st business day after the start
of the open negotiation period. A party may not initiate the Federal
IDR process if, with respect to an item or service, the party knows or
reasonably should have known that the provider or facility provided
notice and obtained consent from a participant, beneficiary, or
enrollee to waive surprise billing protections consistent with PHS Act
sections 2799B-1(a) and 2799B-2(a) and the implementing regulations at
45 CFR 149.410(b) and 149.420(c)-(i).
To initiate the Federal IDR process, the initiating party must
submit a notice to the other party and to the Departments (Notice of
IDR Initiation) through the Federal IDR portal. The Notice of IDR
Initiation must include: (1) Information sufficient to identify the
qualified IDR items or services (and whether the qualified IDR items or
services are designated as batched items and services), including the
dates and location of the items or services, the type of qualified IDR
items or services (such as emergency services, post-stabilization
services, professional services, hospital-based services),
corresponding service and place-of-service codes, the amount of cost
sharing allowed and the amount of the initial payment made by the plan
or issuer for the qualified IDR items or services, if applicable; (2)
the names and contact information of the parties involved, including
email addresses, phone numbers, and mailing addresses; (3) the state
where the qualified IDR items or services were furnished; (4) the
commencement date of the open negotiation period; (5) the initiating
party's preferred certified IDR entity; (6) an attestation that the
items or services are qualified IDR items and services within the scope
of the Federal IDR process; (7) the QPA; (8) information about the QPA
as described in 26 CFR 54.9816-6T(d), 29 CFR 2590.716-6(d), and 45 CFR
149.140(d); and (9) general information describing the Federal IDR
process. This general information will help ensure that the non-
initiating party is informed about the process and is familiar with the
next steps. Such general information should include a description of
the scope of the Federal IDR process and key deadlines in the Federal
IDR process, including the dates to initiate the Federal IDR process,
how to select a certified IDR entity, and the process for selecting an
offer. The Departments have developed a form that parties must use to
satisfy this requirement to provide general information describing the
Federal IDR process.
As with the open negotiation notice, the initiating party may
provide the Notice of IDR Initiation to the opposing party
electronically (such as by email) if the following two conditions are
satisfied: (1) The initiating party has a good faith belief that the
electronic method is readily accessible by the other party; and (2) the
notice is provided in paper form free of charge upon request.
In addition to furnishing notice to the non-initiating party, the
initiating party must also furnish the Notice of IDR Initiation to the
Departments on the same day the notice is furnished to the non-
initiating party. The initiating party must provide its Notice of IDR
Initiation through the Departments' Federal IDR portal. Moreover, IDR
entities, certified IDR entities and disputing parties will be required
to use the Federal IDR portal to perform certain functions related to
the Federal IDR process. The Federal IDR portal will be used to
facilitate and support IDR entity certification, the initiation of the
Federal IDR process, the selection of certified IDR entities, the
submission of supporting documentation to certified IDR entities, and
the submission of certified IDR entity reporting metrics, as required
by these interim final rules.
Under Code section 9816(c)(1)(B), ERISA section 716(c)(1)(B), and
PHS Act section 2799A-1(c)(1)(B), the date of initiation of the Federal
IDR process will be the date of the submission or such other date
specified by the Departments that is not later than the date of receipt
of the Notice of IDR Initiation by both the other party and the
Departments. Consistent with the flexibility provided by the statute to
specify an alternate date of initiation, these interim final rules
specify that the initiation date of the Federal IDR process is the date
of receipt of the Notice of IDR Initiation by the Departments. As
noted, since the Departments will monitor the Federal IDR portal,
submitting the Notice of IDR Initiation through the Federal IDR portal
will provide a clear date on which the Notice of IDR Initiation has
been received by the Departments. This approach will better enable the
Departments to meet the statutory requirement to select a certified IDR
entity within 6 business days of the initiation of the IDR process in
instances in which the parties have not jointly selected a certified
IDR entity. The Departments will acknowledge and confirm the initiation
date with both parties upon receipt of the Notice of IDR Initiation.
Given that the Departments expect most of these notices to be provided
electronically, and that the parties will have been in continuous
contact by this point in the process (through the submission of the
initial bill, the remittance of the initial payment of the claim or
notice of denial of payment, the submission of the open negotiation
notice, and negotiations during the open negotiation period), the
Departments expect minimal delay between when the Departments are
notified through the portal and when the opposing party is notified
(either by the initiating party or the Departments). The Departments
solicit comment on both the content of the Notice of IDR Initiation as
well as the manner for providing the notices as set forth under these
interim final rules.
D. Federal IDR Process Following Initiation
1. Selection of Certified IDR Entity
Under Code section 9816(c)(4)(F), ERISA section 716(c)(4)(F), and
PHS Act section 2799A-1(c)(4)(F), the plan or issuer and the
nonparticipating provider, nonparticipating emergency facility, or
nonparticipating provider of air ambulance services (as applicable)
that are parties to the Federal IDR process may jointly select a
certified IDR entity no later than 3 business days
[[Page 55992]]
following the date of the IDR initiation. As stated above, in
initiating the Federal IDR process, the initiating party will indicate
its preferred certified IDR entity in the Notice of IDR Initiation.
Under these interim final rules, the party in receipt of the Notice of
IDR Initiation may agree or object to the selection of the preferred
certified IDR entity identified in the Notice of IDR Initiation. If the
non-initiating party in receipt of the Notice of IDR Initiation fails
to object within 3 business days of the date of initiation of the
Federal IDR process, the preferred certified IDR entity identified in
the Notice of IDR Initiation will be the selected certified IDR entity,
provided that the certified IDR entity does not have a conflict of
interest. If the party in receipt of the Notice of IDR Initiation
timely objects, that party must timely notify the initiating party of
the objection, including an explanation of the reason for objecting,
and propose an alternative certified IDR entity. The initiating party
must then agree or object to the alternative certified IDR entity. In
order to jointly select a certified IDR entity, the plan or issuer and
the nonparticipating provider, nonparticipating emergency facility, or
nonparticipating provider of air ambulance services must agree on a
certified IDR entity not later than 3 business days after the date of
initiation of the Federal IDR process. Due to the short timeframe for
this selection, the Departments anticipate that communication between
the parties regarding certified IDR entity selection will typically be
conducted through electronic mail to the email addresses used to send
and receive the Notice of IDR Initiation. The Departments anticipate
that most users of the Federal IDR process will be providers,
facilities, providers of air ambulance services, plans, and issuers,
which are likely to use electronic communications regularly. If both
parties agree on and select a certified IDR entity, or fail to agree
upon a certified IDR entity within the specified timeframe, the
initiating party must notify the Departments by electronically
submitting the notice of the certified IDR entity selection or failure
to select (as applicable), no later than 1 business day after the end
of the 3-business-day period (or in other words, 4 business days after
the date of initiation of the Federal IDR process) through the Federal
IDR portal. In addition, in instances where the non-initiating party
believes that the Federal IDR process is not applicable, the non-
initiating party must notify the Departments through the Federal IDR
portal within the same timeframe that the notice of selection (or
failure to select) is required and provide information regarding the
lack of applicability. Based upon this information and any additional
information requested by the selected certified IDR entity, the
selected certified IDR entity will determine whether the Federal IDR
process is applicable. The Departments seek comment on this approach
and whether any challenges exist in relying solely upon electronic
notifications.
The Departments will make available on the Federal IDR portal a
list of certified IDR entities among which parties to the Federal IDR
process may select, including basic information about the certified IDR
entities, such as contact information, certified IDR entity numbers
(unique identification numbers assigned to each certified IDR entity by
the Departments), websites, and service areas. The Departments seek
comment on this approach, including whether additional information
about the certified IDR entities should be made public, and whether any
challenges exist in relying solely upon electronic notifications.
Under these interim final rules, the selected certified IDR entity
must not have a conflict of interest as defined in 26 CFR 54.9816-
8T(a)(2), 29 CFR 2590.716-8(a)(2), and 45 CFR 149.510(a)(2). The
selected certified IDR entity must also ensure that assignment of
personnel to the dispute and decisions regarding hiring, compensation,
termination, promotion, or other similar matters related to personnel
assigned to the dispute are not made based upon the likelihood that the
assigned personnel will support a particular party or type of party
(that is, provider, facility, provider of air ambulance services, plan,
or issuer) to the determination being disputed other than as outlined
under 26 CFR 54.9816-8T(c)(4)(iii), 29 CFR 2590.716-8(c)(4)(iii), and
45 CFR 149.510(c)(4)(iii). Also, as agents of the certified IDR entity,
personnel responsible for handling individual payment determinations
must comply with the certification requirements of these interim final
rules as set forth by their principal, the certified IDR entity, in its
procedures. Therefore, the personnel assigned to disputes by the
certified IDR entity must not have a conflict of interest, as defined
by 26 CFR 54.9816-8T(a)(2), 29 CFR 2590.716-8(a)(2), and 45 CFR
149.510(a)(2). In addition, any personnel assigned to the matter must
not have been a party to the determination being disputed or an
employee or agent of such a party within the 1 year immediately
preceding the dispute resolution assignment, similar to the ``revolving
door'' laws \24\ laid out in 18 U.S.C. 207(b), 207(c), and 207(e).
Under 18 U.S.C. 207(b), 207(c), and 207(e), former officers or
employees of the executive branch, including independent agencies, are
prohibited from aiding or advising on matters with which they were
involved while in the executive branch for 1 year. These interim final
rules adopt the same 1-year timeframe by prohibiting former employees'
or agents' involvement in dispute resolution processes involving former
employers for 1 year. The Departments are of the view that this
approach provides a reasonable and appropriate standard for preventing
conflicts of interest. Although 18 U.S.C. 207(b), 207(c), and 207(e)
are typically used in reference to trade or treaty negotiations, the 1-
year prohibition is also a standard applied generally to employees of
the executive and legislative branches and independent agencies. These
statutes represent conflict-of-interest standards that the Departments
view as reasonable and appropriate for developing standards for
preventing conflicts of interest involving certified IDR entities that
are resolving disputes in the Federal IDR process. Certified IDR
entities are expected to ensure staff compliance with the standards of
these interim final rules, and as such, attestations of no conflict of
interest at the organization level are intended also to represent the
absence of conflicts of interest among the employees and agents of the
certified IDR entity.
---------------------------------------------------------------------------
\24\ Maskell, J., Post-Employment, ``Revolving Door,'' Laws for
Federal Personnel. Congressional Research Service. 2014. <a href="https://fas.org/sgp/crs/misc/R42728.pdf">https://fas.org/sgp/crs/misc/R42728.pdf</a>.
---------------------------------------------------------------------------
The Departments anticipate that certified IDR entities will likely
be limited to organizations with sufficient staff who have arbitration
and health care claims experience, including entities currently
providing services for external review or state IDR determinations. To
further ensure that personnel assigned to any determination in the
Federal IDR process do not have a conflict of interest, the Departments
have included additional safeguards for personnel, as well as an
additional requirement that the certified IDR entity have procedures in
place to ensure adherence by personnel with these additional
safeguards. Accordingly, at the time of application for certification,
the IDR entity must attest that it has procedures in place to ensure
that no conflicts of interest exist or will exist, as set forth in the
discussion of
[[Page 55993]]
certification requirements later in this preamble. As an additional
requirement, certified IDR entities will have had to submit, as part of
their application to be certified IDR entities, policies and procedures
for conducting ongoing audits for conflicts of interest, to ensure that
should any arise, the certified IDR entity procedures in place to
inform the Departments of the conflict of interest and mitigate the
risk by reassigning the dispute to other personnel in the event that
any personnel previously assigned have a conflict of interest.
If the parties have agreed on a certified IDR entity, the notice of
the certified IDR entity selection must include the following
information: (1) The name of the certified IDR entity; (2) the
certified IDR entity number; and (3) an attestation by both parties (or
by the initiating party if the other party has not responded) that the
selected certified IDR entity does not have a conflict of interest. The
attestation must be submitted based on conducting a conflicts of
interest check using information available (or accessible using
reasonable means) to the parties (or the initiating party if the other
party has not responded) at the time of the selection.
As stated earlier in this preamble, upon receipt of notification
that the parties failed to agree on a certified IDR entity, the
Departments will select a certified IDR entity. In such instances, the
Departments will randomly select a certified IDR entity that charges a
fee within the allowed range provided for in guidance and defined
further in section III.D.4.viii of this preamble. If there are
insufficient certified IDR entities that charge a fee within the
allowed range available to adjudicate the payment determination, the
Departments will randomly select a certified IDR entity that has
received approval to charge a fee outside of the allowed range. The
Departments will make the random selection not later than 6 business
days after the date of initiation of the Federal IDR process, and will
notify the parties of the selection. The Departments considered
alternative approaches to randomly selecting a certified IDR entity,
including whether the Departments should consider the specific fee of
the certified IDR entity or look to other factors, such as how often
the certified IDR entity chooses the amount closest to the QPA.
Following consideration of various approaches, the Departments have
chosen to utilize a random selection method to select a certified IDR
entity that charges a fee within the allowed range (or has received
approval from the Departments to charge a fee outside of the allowed
range, if there are insufficient certified IDR entities that charge a
fee within the allowed range available) and that does not have a
conflict of interest with either party. The Departments are of the view
that this approach will help ensure that requests for IDR and workload
associated with making determinations for such requests are
appropriately distributed across the certified IDR entities, will
result in an efficient and timely assignment of a certified IDR entity
to payment determinations, and will protect against bias in the types
of cases a certified IDR entity reviews while encouraging certified IDR
entities to charge reasonable fees for their services. Additionally,
the Departments are of the view that this approach will provide
predictability to the parties regarding the fees they will be expected
to pay if they do not select the certified IDR entity. The Departments
seek comment on this approach, including whether the random selection
method should be limited only to certified IDR entities that charge a
fee within the allowed range. The Departments may issue future guidance
regarding whether entities that have received approval from the
Departments to charge a fee outside of the allowed range may be
selected by the Departments under the random selection method.
After selection by the parties (including when the initiating party
selects a certified IDR entity and the other party does not object), or
by the Departments, the certified IDR entity must also review its
selection to ensure that it meets the requirements of 26 CFR 54.9816-
8T(c)(1)(ii), 29 CFR 2590.716-8(c)(1)(ii), and 45 CFR 149.510(c)(1)(ii)
related to potential conflicts of interest. If the selected certified
IDR entity meets these requirements, the certified IDR entity must
attest to meeting these requirements. If the certified IDR entity is
unable to attest that it meets these requirements, the certified IDR
entity must notify the Departments through the Federal IDR portal
within 3 business days, after which the Departments will notify the
parties. Upon notification, the parties will have 3 business days to
select another certified IDR entity under the process described in 26
CFR 54.9816-8T(c)(1), 29 CFR 2590.716-8(c)(1), or 45 CFR 149.510(c)(1).
If the parties notify the Departments that they have not agreed on a
certified IDR entity, the Departments may randomly select another
certified IDR entity.
The certified IDR entity must also review the information submitted
by the parties to determine whether the Federal IDR process applies,
including whether an All-Payer Model Agreement or specified state law
applies. If the Federal IDR process does not apply, the certified IDR
entity must notify the Departments and the parties within 3 business
days of making this determination.
2. Authority To Continue Negotiation
Code sections 9816(c)(2)(B) and 9817(b)(2)(B), ERISA sections
716(c)(2)(B) and 717(b)(2)(B), PHS Act sections 2799A-1(c)(2)(B) and
2799A-2(b)(2)(B), and these interim final rules provide that, in
instances in which the parties agree on an amount for a qualified IDR
item or service after the Federal IDR process is initiated but prior to
a determination by a certified IDR entity, the agreed-upon amount will
be treated as the out-of-network rate and will be treated as resolving
the dispute. If the parties to the Federal IDR process agree on an out-
of-network rate for a qualified IDR item or service after providing to
the Departments the Notice of IDR Initiation, but before the certified
IDR entity has made its payment determination, the initiating party
must notify the Departments and the certified IDR entity (if selected)
by electronically submitting notification of such agreement through the
Federal IDR portal as soon as possible but no later than 3 business
days after the date of the agreement. As is the case in instances where
the parties do not come to an agreement before the certified IDR entity
selects the amount submitted by one of the parties, the amount by which
this agreed-upon out-of-network rate exceeds the cost-sharing amount
for the qualified IDR item or service is the total plan or coverage
payment.\25\ The plan or issuer must pay the balance of the total plan
or coverage amount of the agreed-upon out-of-network rate (with any
initial payment made counted towards the total plan or coverage
payment) to the nonparticipating provider, nonparticipating emergency
facility, or nonparticipating provider of air ambulance services not
later than 30 business days after the agreement is reached. As noted in
section III.D.4.viii of this preamble regarding costs of the Federal
IDR process, when there is an agreement after initiation and a
certified IDR entity is selected but prior to a determination by the
certified IDR entity, each party must pay half of the certified IDR
entity fee, unless the parties agree otherwise on a method for
allocating the applicable fee. In no instance may either party seek
[[Page 55994]]
additional payment from the participant or beneficiary, including in
instances in which the out-of-network rate exceeds the QPA. When an
agreement is reached, either before or after a certified IDR entity is
selected, notification to the Departments must include the out-of-
network rate (that is, the total payment amount, including both cost
sharing and the total plan or coverage payment) and signatures from an
authorized signatory for each party.
---------------------------------------------------------------------------
\25\ See 26 CFR 54.9816-4T, 54.9816-5T, and 54.9817-1T; 29 CFR
2590.716-4, 2590.716-5, and 2590.717-1; and 45 CFR 149.110, 149.120,
and 149.130.
---------------------------------------------------------------------------
3. Treatment of Batched Items and Services
Code section 9816(c)(3), ERISA section 716(c)(3), and PHS Act
section 2799A-1(c)(3) direct the Departments to specify criteria under
which multiple qualified IDR items and services may be considered
jointly as part of one payment determination (batching). Under these
interim final rules, multiple claims for qualified IDR items and
services may be submitted and considered jointly as part of one payment
determination by a certified IDR entity (batched items and services)
only if certain conditions are met. Batched items and services
submitted and considered jointly as part of one payment determination
under 26 CFR 54.9816-8T(c)(3)(i), 29 CFR 2590.716-8(c)(3)(i), 45 CFR
149.510(c)(3)(i) are subject to the fee for batched determinations
under these interim final rules.
First, the qualified IDR items and services must be billed by the
same provider or group of providers or facility or same provider of air
ambulance services. Items and services are billed by the same provider
or group of providers or facility or same provider of air ambulance
services if the items or services are billed with the same National
Provider Identifier (NPI) or Taxpayer Identification Number (TIN).
Second, the payment for the items and services would be made by the
same group health plan or health insurance issuer.
Third, the qualified IDR items and services must be the same or
similar items or services. The definition of a same or similar item or
service in these interim final rules is consistent with the definition
under the July 2021 interim final rules. The Departments defined a same
or similar item or service in 26 CFR 54.9816-6T(a)(13), 29 CFR
2590.716-6(a)(13), and 45 CFR 149.140(a)(13) as those items and
services that are billed under the same service code, or a comparable
code under a different procedural code system, and the Departments
defined the service codes as the code that describes an item or service
using Current Procedural Terminology (CPT), Healthcare Common Procedure
Coding System (HCPCS), or Diagnosis-Related Group (DRG) codes.
Finally, all the qualified IDR items and services must have been
furnished within the same 30-business-day period, or the 90-calendar-
day suspension period described later in this preamble. Therefore, if
items or services are furnished within the 90-calendar-day suspension
period and meet the other applicable requirements, they may be
submitted and considered jointly as part of one payment determination
by a certified IDR entity, once the suspension period has ended. Under
Code section 9816(c)(9), ERISA section 716(c)(9), and PHS Act section
2799A-1(c)(9), the Departments may provide an alternative period to the
aforementioned 30-business-day period as determined by the Departments
for certain circumstances, such as low-volume items and services. The
Departments are using this authority to ensure that items and services
delivered during the 90-calendar-day suspension period are eligible for
the Federal IDR process and may be included in the same batch.
The Departments are of the view that the approach set forth to
allow for batching of multiple qualified IDR items and services will
avoid combinations of unrelated claims, providers, facilities,
providers of air ambulance services and plans and issuers in a single
dispute that could unnecessarily complicate an IDR payment
determination and create inefficiencies in the Federal IDR process. The
Departments solicit comment on this approach and whether there is a
need to prescribe an alternative period for other qualified IDR items
and services different from the 30-business-day period discussed
earlier in the discussion of the batching requirements and what
circumstances should be considered in defining any alternative period.
Additionally, in some cases, a plan or issuer may pay a provider,
facility, or provider of air ambulance services a single payment for
multiple services an individual received during an episode of care
(bundling). In the case of qualified IDR items or services that are
billed by a provider, facility, or provider of air ambulance services
as part of a bundled arrangement, or where a plan or issuer makes an
initial payment as a bundled payment (or specifies that a denial of
payment is made on a bundled payment basis), these interim final rules
provide that those qualified items or services may be submitted and
considered as part of one payment determination by a certified IDR
entity (and is subject to the fee for single determinations under 26
CFR 54.9816-8T(c)(3)(ii), 29 CFR 2590.716-8(c)(3)(ii), 45 CFR
149.510(c)(3)(ii)).
The Departments recognize that certain batched items and services
may have different QPAs. For example, if a determination includes
multiple batched claims for Service A furnished by Provider B to
individuals covered by Issuer C, with some individuals covered by plans
in the individual market and others covered by plans in the large group
market, there likely would be two different QPAs for the certified IDR
entity to consider--one QPA for the services furnished to individuals
enrolled in individual market coverage, and one QPA for individuals
with large group market coverage. As discussed elsewhere in this
preamble, when this is the case, the parties must provide the relevant
information for each QPA, and the certified IDR entity must consider
each QPA for each item or service separately. However, since batched
items and services involve the same or similar medical procedure,
batching is likely to reduce redundant IDR proceedings as well as
streamline the certified IDR entity's decision-making, as some of the
considerations relate to factors not specific to the individual
encounter.
The Departments seek comment on all aspects of the criteria for
batching claims and bundling, including whether additional conditions
should be added to limit batching or whether the conditions should be
amended to facilitate broader batching of qualified IDR items and
services. The Departments also seek comment on how frequently
nonparticipating providers, nonparticipating emergency facilities, or
nonparticipating providers of air ambulance services will be reimbursed
through a bundled payment and whether allowing items or services
included in a bundled payment by a provider or facility to be treated
as one payment determination could be used to circumvent the batching
requirements by not requiring precise consideration of what specific
claims within the batch should be arbitrated and which claims should
not, thereby resulting in potential overuse of the Federal IDR process
in a manner that creates inefficiencies.
4. Payment Determination
i. Submission of Offers
Code section 9816(c)(5)(B), ERISA section 716(c)(5)(B), and PHS Act
section 2799A-1(c)(5)(B) provide that, not later than 10 days after the
date of selection of the certified IDR entity with respect to a
determination for a
[[Page 55995]]
qualified IDR item or service, the plan or issuer and the
nonparticipating provider, nonparticipating emergency facility, or
provider of air ambulance services must each submit to the certified
IDR entity an offer for a payment amount for such qualified IDR item or
service. Under these interim final rules, the offer must be submitted
not later than 10 business days after the selection of the certified
IDR entity and must be expressed as both a dollar amount and the
corresponding percentage of the QPA represented by that dollar amount,
to facilitate the certified IDR entity reporting the offer as a
percentage of the QPA to the Departments. Where batched items and
services have different QPAs, the parties should provide these
different QPAs and may provide different offers for these batched items
and services, provided that the same offer should apply for all items
and services with the same QPA.
Parties to the Federal IDR process must also submit information
requested by the certified IDR entity relating to the offer. The
Departments intend for the Federal IDR portal to collect this
information as part of the offer submission process, such that
certified IDR entities will not have to directly request this
information. Providers and facilities must also indicate the size of
their practices and facilities at the time the information is
submitted. This will enable certified IDR entities to report on the
size of the provider practices and facilities, as required under 26 CFR
54.9816-8T(f)(1)(ii), 29 CFR 2590.716-8(f)(1)(ii), and 45 CFR
149.510(f)(1)(ii). Specifically, the provider must specify whether the
provider practice or organization has fewer than 20 employees, 20 to 50
employees, 51 to 100 employees, 101 to 500 employees, or more than 500
employees. For facilities, the facility must specify whether the
facility has 50 or fewer employees, 51 to 100 employees, 101 to 500
employees, or more than 500 employees. Providers and facilities must
also provide information on the practice specialty or type,
respectively (if applicable). Similarly, plans and issuers must provide
the coverage area of the plan or issuer, the relevant geographic region
for purposes of the QPA, and, for group health plans, whether they are
fully-insured, or partially or fully self-insured.\26\ FEHB carriers
must identify if a particular item or service relates to FEHB plans.
The information such as practice or facility size, coverage area,
geographic region, and whether a plan is fully-insured or partially or
fully self-insured is required to be submitted as part of an offer so
that the certified IDR entities can report this information to the
Departments. This information will inform the reports required from the
Departments under Code section 9816(c)(7), ERISA section 716(c)(7), and
PHS Act section 2799A-1(c)(7). Both parties must submit any other
information requested by the certified IDR entity relating to such
offer. In addition, parties may submit any information relating to the
offer, except that the information may not include information that
relates to usual and customary charges, billed amounts, and public
payor rates as discussed later in this preamble.
---------------------------------------------------------------------------
\26\ Pursuant to OPM contracts with FEHB carriers under 5 U.S.C.
Ch. 89, all FEHB carriers offer fully insured health benefits plans
in consideration of premium payments pursuant to contract terms, and
no health benefits plan is self-insured by OPM or the federal
government.
---------------------------------------------------------------------------
With regard to the number of employees of a provider or facility,
the Departments understand that hospitals and facilities may use a
variety of methods for staffing, such as through contracting with
physicians' practices or foundations whose physicians or medical staff
are not considered employees of the hospital or facility. The
Departments seek comment on whether additional guidance is needed to
account for these situations in the reporting of provider and facility
size.
ii. Selection of Offer for Qualified IDR Items or Services That Are Not
Air Ambulance Services
These interim final rules provide that, not later than 30 business
days after the selection of the certified IDR entity, the certified IDR
entity must select one of the offers submitted by the plan or issuer
and the provider or facility to be the out-of-network rate for the
qualified IDR item or service. For each qualified IDR item or service,
the amount by which this out-of-network rate exceeds the cost-sharing
amount for the qualified IDR item or service is the total plan or
coverage payment (with any initial payment made counted towards the
total plan or coverage payment). In selecting the offer, the certified
IDR entity must presume that the QPA is an appropriate payment amount
but must also consider the additional circumstances, following the
requirements of 26 CFR 54.9816-8T(c)(4)(iii)(B) through (D), 29 CFR
2590.716-8(c)(4)(iii)(B) through (D), and 45 CFR 149.510(c)(4)(iii)(B)
through (D), only if the information is submitted by the parties.
However, to be considered by the certified IDR entity, information
submitted by the parties must be credible and relate to the offer
submitted by either party, and must not include information on the
prohibited factors described in 26 CFR 54.9816-8T(c)(4)(v), 29 CFR
2590.716-8(c)(4)(v), or 45 CFR 149.510(c)(4)(v). After considering the
QPA, additional information requested by the certified IDR entity from
the parties, and all of the credible information that the parties
submit that is consistent with the requirements in 26 CFR 54.9816-
8T(c)(4)(i)(A), 29 CFR 2590.716-8(c)(4)(i)(A), or 45 CFR
149.510(c)(4)(i)(A), the certified IDR entity must select the offer
closest to the QPA, unless the credible information submitted by the
parties clearly demonstrates that the QPA is materially different from
the appropriate out-of-network rate, based on the additional
circumstances allowed under 26 CFR 54.9816-8T(c)(4)(iii)(B) through
(D), 29 CFR 2590.716-8(c)(4)(iii)(B) through (D), or 45 CFR
149.510(c)(4)(iii)(B) through (D) with respect to the qualified IDR
item or service. In these cases, or when the offers are equally distant
from the QPA but in opposing directions, the certified IDR entity must
select the offer that the certified IDR entity determines best
represents the value of the items or services, which could be either
party's offer.
These interim final rules define information as credible if upon
critical analysis the information is worthy of belief and is
trustworthy. These interim final rules also specify that a material
difference exists where there is substantial likelihood that a
reasonable person with the training and qualifications of a certified
IDR entity making a payment determination would consider the
information important in determining the out of network rate and view
the information as showing that the QPA is not the appropriate out-of-
network rate under such additional circumstances.
If the certified IDR entity determines that credible information
about additional circumstances clearly demonstrates that the QPA is
materially different from the appropriate out-of-network rate, the
certified IDR entity must select the offer that the certified IDR
entity determines best represents the appropriate out-of-network rate
for the qualified IDR items or services, which could be either party's
offer. Not later than 30 business days after the selection of the
certified IDR entity, the certified IDR entity must also notify the
plan or issuer and the provider or facility of the selection of the
offer, and provide the written decision required under 26 CFR 54.9816-
8T(c)(4)(vi), 29 CFR 2590.716-8(c)(4)(vi), and 45 CFR
149.510(c)(4)(vi).
[[Page 55996]]
The Departments are of the view that the best interpretation of
Code section 9816, ERISA section 716, and PHS Act section 2799A-1 is
that when selecting an offer, a certified IDR entity must look first to
the QPA, as it represents a reasonable market-based payment for
relevant items and services, and then to other considerations. This
presumption that the QPA is the appropriate out-of-network rate can be
rebutted by presentation of credible information about additional
circumstances, following the requirements of 26 CFR 54.9816-
8T(c)(4)(iii)(B) through (D), 29 CFR 2590.716-8(c)(4)(iii)(B) through
(D), and 45 CFR 149.510(c)(4)(iii)(B) through (D), that clearly
demonstrate that the QPA is materially different from the appropriate
out-of-network rate. The statutory text lists the QPA as the first
factor that the certified IDR entity must consider in determining which
offer to select. The ``additional circumstances'' that the certified
IDR entity must consider if relevant, credible information is provided
are described in a separate paragraph, and the certified IDR entity's
consideration of additional circumstances is subject to a prohibition
on considering certain factors. Additionally, whereas the statute
provides relatively limited guidance on how to consider or define these
additional circumstances, the statute sets out detailed rules for
calculating the QPA, suggesting that an accurate and clear calculation
of the QPA is integral to the application of consumer cost sharing and
to the certified IDR entity's determination of the out-of-network rate.
For example, the statute includes a requirement that when plans and
issuers do not have sufficient information to calculate their own
median contracted rates, they utilize a database free of conflicts of
interest.\27\ Plans and issuers must also provide specific information
on how the QPA is calculated to nonparticipating providers and
facilities, ensuring that they are aware of how this amount is
calculated.\28\ Plans and issuers are also subject to audit
requirements that will be enforced by the Departments to ensure that
they follow these rules.\29\ Cost sharing for participants,
beneficiaries, and enrollees for items and services will be based on
the recognized amount, which will generally be the QPA for services
eligible for the Federal IDR process, indicating that the QPA is a
reasonable out-of-network rate. The Departments are also required to
report how payment determinations compare to the corresponding QPA,
reflecting that the QPA is a benchmark for determining the appropriate
out-of-network rate.\30\ Taken together, these statutory elements
reflect the importance the No Surprises Act assigns to the QPA in the
Federal IDR process, and show that the statute contemplates that
typically the QPA will be a reasonable out-of-network rate.
---------------------------------------------------------------------------
\27\ Code section 9816(a)(2), (3)(E); ERISA section 716(a)(2),
(3)(E), and PHS Act section 2799A-1(a)(2), (3)(E); 26 CFR 54.9816-
6T, 29 CFR 2590.716-6, and 45 CFR 149.140.
\28\ Id.
\29\ 86 FR 36872, 36899 (July 13, 2021).
\30\ Code section 9816(c)(7)(A)(v), (B)(iii) and (iv); ERISA
section 716(c)(7)(A)(v), (B)(iii) and (iv); and PHS Act section
2799A-1(c)(7)(A)(v), (B)(iii) and (iv).
---------------------------------------------------------------------------
The Departments are also of the view that policy considerations
support the approach taken under these interim final rules regarding
which offer a certified IDR entity must select. Generally, the QPA
should reflect standard market rates arrived at through typical
contract negotiations and should therefore be a reasonable out-of-
network rate under most circumstances. The QPA is generally based on
the median of contracted rates, and these contracted rates are
established through arms-length negotiations between providers and
facilities and plans and issuers (or their service providers).
Anchoring the determination of the out-of-network rate to the QPA will
increase the predictability of IDR outcomes, which may encourage
parties to reach an agreement outside of the Federal IDR process to
avoid the administrative costs, and will aid in reducing prices that
may have been inflated due to the practice of surprise billing prior to
the No Surprises Act. Finally, anchoring the determination to the QPA
will help limit the indirect impact on participants, beneficiaries, and
enrollees that would occur from higher out-of-network rates if plans
and issuers were to pass higher costs on to individuals in the form of
increases in premiums.
Accordingly, the certified IDR entity must begin with the
presumption that the QPA is the appropriate out-of-network rate for the
qualified IDR item or service under consideration. Therefore, in
determining which offer to select, these interim final rules provide
that the certified IDR entity must select the offer closest to the QPA,
unless credible information presented by the parties rebuts that
presumption and clearly demonstrates the QPA is materially different
from the appropriate out-of-network rate, as discussed earlier in this
section of the preamble.
The Departments clarify that it is not the role of the certified
IDR entity to determine whether the QPA has been calculated by the plan
or issuer correctly, to make determinations of medical necessity, or
review denials of coverage.\31\ Rather, the certified IDR entity is
responsible for considering only the information presented by the
parties to determine whether either party has presented credible
information regarding additional circumstances, following the
requirements set forth in paragraphs 26 CFR 54.9816-8T(c)(4)(iii)(B)
through (D), 29 CFR 2590.716-8(c)(4)(iii)(B) through (D), and 45 CFR
149.510(c)(4)(iii)(B) through (D), demonstrating that the QPA is
materially different from the appropriate out-of-network rate, in order
to rebut the presumption that the QPA is the appropriate out-of-network
rate. For batched items and services, the certified IDR entity may
select different offers, from either or both parties, when the QPAs for
the qualified IDR items or services within the batch are different. The
certified IDR entity may do so even if it does not select the offer
closest to the QPA for a particular qualified IDR item or service due
to the factors listed later in this section of the preamble, and
instead selects the offer closest to the QPA for other qualified IDR
items and services within the batch.
---------------------------------------------------------------------------
\31\ However, if either the certified IDR entity or one of the
parties believes the QPA has not been calculated in accordance with
the requirements in 26 CFR 54.9816-6T, 29 CFR 2590.716-6, or 45 CFR
149.140, the Departments encourage the certified IDR entity or the
provider or facility to notify the applicable state or federal
authority, or submit a complaint against the plan or issuer as set
forth in 26 CFR 54.9816-7T, 29 CFR 2590.716-7, or 45 CFR 149.150, as
applicable.
---------------------------------------------------------------------------
In the Departments' view, the requirements set forth in these
interim final rules regarding which offer a certified IDR entity must
select, based on the presumption that the QPA is the appropriate
payment amount and on the parties' ability to rebut that presumption,
will help promote efficiency and predictability in the Federal IDR
process, and will increase the likelihood that a certified IDR entity
will generally select the offer closest to the QPA. While the QPA is
the presumptive factor, the Departments are of the view that a clear
standard indicating how a certified IDR entity may select an offer that
is not closest to the QPA is necessary to help ensure consistency in
how different certified IDR entities evaluate offers, which will help
ensure that the Federal IDR process yields predictable outcomes and
reduces administrative costs. Establishing a standard framework for
certified IDR entities to evaluate factors furthers the intent of these
interim final
[[Page 55997]]
rules to create equity and consistency in the Federal IDR process and
aligns with other policies set forth in these interim final rules, such
as the conflict-of-interest standards and the certification standards
for IDR entities. Ensuring that all certified IDR entities apply the
same standards will help ensure that the Federal IDR process is
appropriately predictable, fair, and equitable.
Although these interim final rules establish the QPA as the
presumptive factor, these interim final rules and the underlying
statute also specify additional circumstances that certified IDR
entities must consider in selecting an offer, if a party submits
information about the additional circumstance that the certified IDR
entity determines is credible. These interim final rules also require
that the parties provide certain information to the certified IDR
entity, described previously in this preamble, regarding practice size,
practice specialty or type; information about the plan or issuer's
coverage area; information about the QPA; and, if applicable,
information showing that the Federal IDR process is inapplicable to the
dispute. In addition, the certified IDR entity may request additional
information relating to the parties' offers and must consider credible
information submitted to determine if it demonstrates that the QPA is
materially different from the appropriate out-of-network rate (unless
the information relates to a factor that the certified IDR entity is
prohibited from considering).
Regarding those factors, first, to the extent credible information
is submitted by a party, the certified IDR entity must consider whether
the credible information about the level of training, experience, and
quality and outcome measurements (such as those endorsed by the
consensus-based entity authorized under section 1890 of the Social
Security Act) of the provider or facility that furnished the qualified
IDR item or service clearly demonstrates that the QPA is materially
different from the appropriate out-of-network rate for the qualified
IDR item or service. In order for a certified IDR entity to consider
this additional information submitted by a party, the credible
information must clearly demonstrate that the QPA failed to take into
account that the experience or level of training of a provider was
necessary for providing the qualified IDR item or service to the
patient or that the experience or training made an impact on the care
that was provided. The Departments are of the view that qualified IDR
items or services should not necessitate an out-of-network rate higher
than the offer closest to the QPA, simply based on the level of
experience or training of a provider, as this would lead to an increase
in prices without a valid reason and does not align with the goals of
the No Surprises Act. For instance, the out-of-network payment amount
for the simple repair of a superficial wound (CPT codes 12001-12007) in
most cases would not necessitate a rate higher than the QPA just
because a provider has 30 years of experience versus 10 years of
experience. Alternatively, if the plan's or issuer's contracted rates
included risk-sharing, bonus, penalty, or other incentive-based or
retrospective payments that were excluded for purposes of calculating
the QPA for the items and services as required by the July 2021 interim
final rules, a party may provide evidence as to why the provider's or
facility's quality or outcome measures support an out-of-network rate
that is different from the QPA and the certified IDR entity should
consider whether this requires selecting an out-of-network rate that is
higher (in the case of a bonus) or lower (in the case of a penalty)
than the offer closest to the QPA.
Second, to the extent credible information is submitted by a party,
the certified IDR entity must consider whether the credible information
about the market share held by the nonparticipating provider or
facility or the plan (including, for self-insured plans, the market
share of their third-party administrator (TPA) in instances where the
self-insured plan relies on the TPA's networks) or issuer in the
geographic region in which the qualified IDR item or service was
provided, clearly demonstrates that the QPA is materially different
from the appropriate out-of-network rate for the qualified IDR item or
service. Research suggests that the market dominance of a provider or
facility, or that of a plan or issuer, can drive reimbursement rates up
or down in a given region.\32\ For instance, a plan or issuer having
the majority of the market share in a geographic region may signal a
QPA that is unreasonably low, as plans and issuers with a large market
share may drive down rates,\33\ in which case an out-of-network rate
higher than the offer closest to the QPA may be appropriate.
Alternatively, a provider having the majority of the market share in a
geographic region may signal a QPA that is unreasonably high, as
providers with a large market share may drive up rates, in which case
an out-of-network rate lower than the offer closest to the QPA may be
appropriate.
---------------------------------------------------------------------------
\32\ Schwartz, K., Lopez, E., Rae, M., Neuman, T. What We Know
About Provider Consolidation. Kaiser Family Foundation. September
2020. <a href="https://www.kff.org/health-costs/issue-brief/what-we-know-about-provider-consolidation/">https://www.kff.org/health-costs/issue-brief/what-we-know-about-provider-consolidation/</a>.
\33\ See Richard M. Scheffler and Daniel R. Arnold. ``Insurer
Market Power Lowers Prices in Numerous Concentrated Provider
Markets.'' Health Affairs. 2017 36:9, 1539-1546; Glenn Melnick, Yu-
Chu Shen and Vivian Wu. ``The Increased Concentration Of Health Plan
Markets Can Benefit Consumers Through Lower Hospital Prices.''
Health Affairs 30, no. 9.
---------------------------------------------------------------------------
Third, to the extent credible information is submitted by a party,
the certified IDR entity must consider whether the credible information
about patient acuity or the complexity of furnishing the qualified IDR
item or service to the participant, beneficiary, or enrollee clearly
demonstrates that the QPA is materially different from the appropriate
out-of-network rate for the qualified IDR item or service. In many
cases, because the plan or issuer is required to calculate the QPA
using median contracted rates for service codes, as well as modifiers,
if applicable, and because service codes and modifiers reflect patient
acuity and the complexity of the service provided,\34\ these factors
will already be reflected in the QPA. Therefore, the Departments
anticipate that there would only be rare instances in which the QPA
would not adequately account for the acuity of the patient or
complexity of the service. For example, if the complexity of a case is
an outlier such that the time or intensity of care exceeds what is
typical for a service code, the certified IDR entity may conclude that
the QPA does not adequately take the factor into account. Similarly,
the QPA for a qualified IDR item or service may be considered too high
for items or services that become less complex or are furnished more
frequently over time, such as items for which the QPA reflects
reimbursement for a product with a patent that expires after 2019, in
instances where the QPA is based off the median of the contracted rates
from 2019. A certified IDR entity may also conclude that the QPA does
not adequately account for patient acuity, or the complexity of
furnishing the qualified IDR item or service in instances where the
parties disagree on what service code or modifier accurately describes
the qualified IDR item or service. For instance, the Departments are
aware that some plans and issuers review claims and alter the service
code or modifier submitted by the provider or facility to another
service code or modifier that the plan or issuer determines to be more
appropriate (a practice commonly referred to as ``downcoding'' when the
adjustment
[[Page 55998]]
results in lower reimbursement).\35\ If a plan or issuer has altered
the service code or modifier(s) for a submitted claim and applies a QPA
that uses a different service code or modifier(s) than the service code
or modifier(s) submitted by the provider or facility, the provider or
facility could submit credible information to the certified IDR entity
demonstrating that the QPA applied by the plan or issuer to the claim
is based on a service code or modifier that did not properly encompass
patient acuity, the complexity of furnishing the qualified IDR item or
service. If the certified IDR entity agrees that either of the parties
have presented credible information that clearly demonstrates that the
QPA is materially different from the appropriate out-of-network rate,
and adequately takes into account the considerations allowed under 26
CFR 54.9816-8T(c)(4)(iii)(B) through (D), 29 CFR 2590.716-
8(c)(4)(iii)(B) through (D), and 45 CFR 149.510(c)(4)(iii)(B) through
(D), then it could select either offer, but must select the offer that
the certified IDR entity determines best represents the value of the
qualified IDR item or service.\36\
---------------------------------------------------------------------------
\34\ <a href="https://www.medicalbillingandcoding.org/cpt-modifiers/">https://www.medicalbillingandcoding.org/cpt-modifiers/</a>.
\35\ The Departments clarify that the July 2021 interim final
rules do not require the plan or issuer to calculate the
participant's, beneficiary's, or enrollee's cost sharing using a QPA
for the service code submitted by the provider or facility. The plan
or issuer could instead calculate the participant's, beneficiary's,
or enrollee's cost sharing using a QPA for the service code that the
plan or issuer determined was more appropriate. However, the QPA
methodology under 26 CFR 54.9816-6T, 29 CFR 2590.716-6, and 45 CFR
149.140 requires plans and issuers to calculate the median
contracted rate for an item or service using contracted rates for
the same or similar item or service. A plan or issuer would be
considered out of compliance with these requirements if the plan or
issuer calculated a QPA using a service code that does not
reasonably reflect the furnished item or service.
\36\ The Departments note that in instances in which the
certified IDR entity selects an offer based on a determination that
a service code other than the one upon which the QPA was based more
accurately describes the qualified IDR item or service, neither the
plan or issuer nor provider or facility is permitted to adjust the
participant's, beneficiary's, or enrollee's cost-sharing amount. The
cost-sharing amount remains the same as originally calculated in
accordance with 26 CFR 54.9816-4T(b)(3)(ii) and (iii), 29 CFR
2590.716-4(b)(3)(ii) and (iii), and 45 CFR 149.110(b)(3)(ii) and
(iii); 26 CFR 54.9816-5T(c)(1) and (2), 29 CFR 2590.717-1(c)(1) and
(2), and 45 CFR 149.120(c)(1) and (2); or 26 CFR 54.9817-1T(b)(1)
and (2), 29 CFR 2590.717-1(b)(1) and (2), and 45 CFR 149.130(b)(1)
and (2).
---------------------------------------------------------------------------
Fourth, to the extent credible information is submitted by a party,
the certified IDR entity must also consider whether the credible
information about the teaching status, case mix, and scope of services
of the nonparticipating facility, clearly demonstrates that the QPA is
materially different from the appropriate out-of-network rate for the
qualified IDR item or service. Similar to the other factors, it is the
view of the Departments that the QPA, which is intended to reflect the
market-driven rate, should be considered the prevailing rate unless a
party provides credible information that the characteristic of the
teaching status, case mix, or scope of services of the nonparticipating
facility was in some way critical to the delivery of the qualified IDR
item or service, and not adequately accounted for in the QPA, thereby
rebutting the presumption that the QPA is the appropriate out-of-
network rate. For example, a certified IDR entity could consider the
trauma level of a hospital when the dispute involves trauma care or
qualified IDR items or services that could not be performed at a lower-
level hospital, but only to the extent the QPA does not otherwise
reflect this factor. The Departments seek comment on whether additional
requirements should be considered to address any potentially abusive
scenarios, including scenarios in which parties could potentially
distort information that informs the enumerated considerations, such as
overestimating the teaching experience of providers at the facility or
upcoding the costs for items or services, and seek comment on the
potential for gaming of the Federal IDR process.
Fifth, to the extent credible information is submitted by a party,
the certified IDR entity must also consider whether the credible
information about any demonstrations of good faith efforts (or lack
thereof) made by the nonparticipating provider, nonparticipating
facility, or nonparticipating provider of air ambulance services or the
plan or issuer, as applicable, to enter into network agreements and, if
applicable, contracted rates between the provider or facility and the
plan or issuer, as applicable during the previous 4 plan years, clearly
demonstrates that the QPA is materially different from the appropriate
out-of-network rate for the qualified IDR item or service. For example,
a certified IDR entity must consider what the contracted rate might
have been had the good faith negotiations resulted in the
nonparticipating provider, facility, or provider of air ambulance
services being in-network, if a party is able to provide related
credible information of good faith efforts or the lack thereof.
Beyond these enumerated factors, the certified IDR entity must also
generally consider additional information submitted by a party,
provided the information is credible and relates to the offer submitted
by either party. The certified IDR entity is not permitted to consider
that information if it includes information on factors described in 26
CFR 54.9816-8T(c)(4)(v), 29 CFR 2590.716-8(c)(4)(v), and 45 CFR
149.510(c)(4)(v). This prohibition is discussed further in the next
section of this preamble.
The Departments intend to provide additional guidance to certified
IDR entities as necessary to clarify how the allowable factors should
be considered and seek comment on this approach, including the
appropriateness and scope of the factors previously discussed.
iii. Selection of Offer for Qualified IDR Services That Are Air
Ambulance Services
The process for a certified IDR entity to select an offer in a
dispute related to qualified IDR services that are air ambulance
services is essentially the same as the process applicable to disputes
related to qualified IDR items or services that are not air ambulance
services. As with disputes related to qualified IDR items or services
that are not air ambulance services, in determining which offer to
select, these interim final rules provide that the certified IDR entity
must consider the QPA for the applicable year for the qualified IDR
services that are air ambulance services. However, Code section
9817(b)(5)(C), ERISA section 717(b)(5)(C), PHS Act section 2799A-
2(b)(5)(C), and these interim final rules specify additional
circumstances, in addition to the QPA, that the certified IDR entity
must also consider in making the determination for air ambulance
services, to the extent the parties provide credible information on
such criteria. As with qualified IDR items or services, the certified
IDR entity should only consider this information to the extent the
certified IDR entity determines that either party submitted credible
information that clearly demonstrates that the QPA is materially
different from the appropriate out-of-network rate. If a party presents
credible information clearly demonstrating that the QPA is materially
different from the appropriate out-of-network rate, the certified IDR
entity must consider the additional circumstances.
To the extent credible information is submitted by a party, the
certified IDR entity must consider whether credible information about
the quality and outcomes measurements of the provider of air ambulance
services that furnished the services clearly demonstrates that the QPA
is materially different from the appropriate out-of-network rate.
Additionally, to the extent credible
[[Page 55999]]
information is submitted by a party, the certified IDR entity must
consider whether credible information about the acuity of the condition
of the participant, beneficiary, or enrollee receiving the services, or
the complexity of providing the services to the participant,
beneficiary, or enrollee, clearly demonstrates that the QPA is
materially different from the appropriate out-of-network rate. Further,
to the extent credible information is submitted by a party, the
certified IDR entity must consider credible information submitted by a
party about whether the level of training, experience, and quality of
medical personnel that furnished the air ambulance services clearly
demonstrates that the QPA is materially different from the appropriate
out-of-network rate for the air ambulance services. To the extent a
party submits any such credible information, the certified IDR entity
must also consider whether credible information about the ambulance
vehicle type, including the clinical capability level of the vehicle,
clearly demonstrates that the QPA is materially different from the
appropriate out-of-network rate for the air ambulance services. In
considering the ambulance vehicle type, the certified IDR entity may
not consider whether the air ambulance is fixed wing or rotary wing,
because the QPA will reflect this difference, as different service
codes are used to bill for air ambulance services depending on whether
fixed wing or rotary wing vehicles are used. Instead, the certified IDR
entity should consider air ambulance vehicle type only to the extent
that it is not already taken into account by the QPA.
To the extent a party submits any such credible information, the
certified IDR entity must also consider whether credible information
about the population density of the point of pick-up (as defined in 42
CFR 414.605) for the air ambulance (such as urban, suburban, rural, or
frontier \37\), clearly demonstrates that the QPA is materially
different from the appropriate out-of-network rate for a particular air
ambulance service. Under the July 2021 interim final rules, the QPA is
calculated by reference to the geographic region, which for air
ambulance services distinguishes between one region containing all
metropolitan statistical areas (as described by the U.S. Office of
Management and Budget (OMB) and published by the U.S. Census Bureau) in
a state and one region consisting of all other portions of the state,
determined based on the point of pick-up (as defined in 42 CFR
414.605). If these geographic regions do not provide sufficient
information, the QPA is calculated in reference to Census divisions,
with one region consisting of all metropolitan statistical areas in
each Census division, and one region consisting of all other portions
of the Census division, determined at the point of pick-up. Therefore,
the QPA for these geographic regions may already reflect the population
density of the pick-up location. Nevertheless, in certain
circumstances, the QPA for air ambulance services may not adequately
capture the population density, due to additional distinctions, such as
between metropolitan areas within a state, or between rural and
frontier areas. To the extent that there is credible information about
additional circumstances clearly demonstrating that the QPA is
materially different from the appropriate out-of-network rate for a
particular air ambulance service, the certified IDR entity must
consider these distinctions.
---------------------------------------------------------------------------
\37\ For these purposes, the term ``frontier'' should be
understood as including those ZIP codes where the point of pick-up
is in a rural area determined to be in the lowest 25 percent of
rural population arrayed by population density (also known as super
rural ZIP codes for purposes of determining ground ambulance base
rates). See 42 CFR 414.610(c)(5)(ii) and 42 CFR 414.626(c)(1)(ii).
---------------------------------------------------------------------------
Finally, to the extent credible information is submitted by a
party, the certified IDR entity must consider whether credible
information about demonstrations of good faith efforts (or lack
thereof) made by the nonparticipating provider of air ambulance
services or the plan or issuer to enter into network agreements, as
well as contracted rates between the provider and the plan or issuer,
as applicable, during the previous 4 plan years, clearly demonstrate
that the QPA is materially different from the appropriate out-of-
network rate for such air ambulance services.
As with qualified IDR items or services that are not air ambulance
services, the certified IDR entity must begin with the presumption that
the amount closest to the QPA is the appropriate out-of-network rate
for the air ambulance service under consideration and select the offer
closest to the QPA, unless credible information submitted by the
parties clearly demonstrates that the QPA is materially different from
the appropriate out-of-network rate, or unless the offers are equally
distant from the QPA but in opposing directions. In those cases, the
certified IDR entity must select the offer that the certified IDR
entity determines best represents the value of the qualified IDR items
or services, which could be either party's offer.
iv. Prohibition on Consideration of Certain Factors
Code section 9816(c)(5)(D), ERISA section 716(c)(5)(D), PHS Act
section 2799A-1(c)(5)(D), and these interim final rules provide that
the certified IDR entity may not consider certain factors in
determining which offer is the out-of-network rate. First, the
certified IDR entity may not consider usual and customary charges. This
term, also known as usual, customary and reasonable charges, refers to
the amount providers in a geographic area usually charge for the same
or similar medical service.\38\ This provision also prohibits
consideration of payment or reimbursement rates expressed as a
proportion of usual and customary charges. Second, certified IDR
entities cannot consider the amount that would have been billed to
either a plan or issuer, or a participant, beneficiary, or enrollee by
a provider, facility, or provider of air ambulance services if the
provider, facility, or provider of air ambulance services were not
subject to a prohibition on balance billing. The Departments recognize
that 45 CFR 149.410, 149.420, and 149.440 prohibit providers,
facilities, and providers of air ambulance services from billing
participants, beneficiaries, or enrollees for the full charge for items
and services to which these provisions apply, but do not limit the
amount that may be billed to the plan or issuer. However, the
Departments are of the view that the intent of Code section
9816(c)(5)(D), ERISA section 716(c)(5)(D), and PHS Act section 2799A-
1(c)(5)(D) is to prohibit the certified IDR entity from considering the
billed charge for a qualified IDR item or service. Therefore, the
Departments interpret this prohibition to include consideration of
billed charges to the plan or issuer for the qualified IDR item or
service. Finally, certified IDR entities must not consider payment or
reimbursement rates payable by a public payor, in whole or in part, for
items and services furnished by the providers, facilities, or providers
of air ambulance services. This prohibition includes payments or
reimbursement rates under the Medicare program under title XVIII of the
Social Security Act, the Medicaid program under title XIX of the Social
Security Act, the Children's Health Insurance Program under title XXI
of the Social
[[Page 56000]]
Security Act, and the TRICARE program under chapter 55 of title 10,
United States Code, chapter 17 of title 38, United States Code. This
prohibition also applies to payment rates for demonstration projects
under section 1115 of the Social Security Act, as these are payment or
reimbursement rates payable by a public payor. This provision prohibits
consideration of payment or reimbursement rates expressed as a
proportion of rates payable by public payors. Thus, the certified IDR
entity must not consider, for example, which offer is closest to 150
percent of the Medicare reimbursement rate for a certain item or
service.\39\ The Departments solicit comment regarding whether any
additional guidance or clarification is needed on these prohibited
factors.
---------------------------------------------------------------------------
\38\ See Uniform Glossary of Coverage and Medical Terms,
available at <a href="https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/sbc-uniform-glossary-of-coverage-and-medical-terms-new.pdf">https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/sbc-uniform-glossary-of-coverage-and-medical-terms-new.pdf</a> and <a href="https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/Uniform-Glossary-01-2020.pdf">https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/Uniform-Glossary-01-2020.pdf</a>.
\39\ The Departments recognize that contracted rates are
frequently based off a percentage of the Medicare payment rate. The
Departments clarify that even in instances where the QPA is
calculated using contracted rates that are expressed as a proportion
of rates payable by a public payor (or other prohibited
considerations), the certified IDR entity is required to consider
the QPA. In the Departments' view, this does not constitute
consideration of the payment or reimbursement rate payable by a
public payor.
---------------------------------------------------------------------------
v. Written Decision
Once the certified IDR entity has made a determination, the
certified IDR entity must provide the underlying rationale for its
determination in a written decision submitted to the parties and the
Departments. The certified IDR entity must submit the decision and the
underlying rationale through the Federal IDR portal in a form and
manner specified by the Departments in guidance. This rationale will
inform the reports required from the Departments under Code section
9816(c)(7), ERISA section 716(c)(7), and PHS Act section 2799A-1(c)(7),
and will assist in ensuring that the certified IDR entities comply with
the requirements of this process, including the requirements of 26 CFR
54.9816-8T(c)(4)(iii), 29 CFR 2590.716-8(c)(4)(iii), and 45 CFR
149.510(c)(4)(iii). If a certified IDR entity does not choose the offer
closest to the QPA, the written decision's rationale must include a
detailed explanation of the additional considerations relied upon,
whether the information about those considerations submitted by the
parties was credible, and the basis upon which the certified IDR entity
determined that the credible information demonstrated that the QPA is
materially different from the appropriate out-of-network rate.
v. Effect of Determination
Code section 9816(c)(5)(E), ERISA section 716(c)(5)(E), PHS Act
section 2799A-1(c)(5)(E), and these interim final rules provide that a
determination made by a certified IDR entity is binding upon all
parties involved, in the absence of fraud or evidence of intentional
misrepresentation of material facts to the certified IDR entity by any
party regarding the claim. A certified IDR entity's determination is
not subject to judicial review, except as set forth in 9 U.S.C.
10(a)(1)-(4).\40\
---------------------------------------------------------------------------
\40\ Subparagraphs (1) through (4) of 9 U.S.C. 10(a) provide
that courts may vacate an arbitration: where the award was procured
by corruption, fraud, or undue means; where there was evident
partiality or corruption in the arbitrators; where the arbitrators
were guilty of misconduct in refusing to postpone the hearing, in
refusing to hear evidence pertinent and material to the controversy;
or of any other misbehavior prejudicing the rights of the parties;
or where the arbitrators exceeded their powers, or so imperfectly
executed them that a mutual, final, and definite award was not made.
---------------------------------------------------------------------------
Under Code section 9816(c)(5)(E)(ii), ERISA section
716(c)(5)(E)(ii), PHS Act section 2799A-1(c)(5)(E)(ii), and these
interim final rules, when a certified IDR entity makes a determination,
the party that submitted the initial Notice of IDR Initiation may not
submit a subsequent Notice of IDR Initiation involving the same other
party with respect to a claim that is the same as or similar to a
qualified IDR item or service that was the subject of the initial
determination during the 90-calendar-day period following the initial
determination. The Departments interpret the 90-day period in the
statute to refer to 90 calendar days. The Departments are of the view
that this interpretation balances the statutory intent to provide for a
``cooling-off'' period between disputes that relate to the same or
similar items or services while ensuring that the initiating party is
able to resolve outstanding payment disputes through the Federal IDR
process as soon as permitted under the statute. The Departments
interpret the statutory phrase of ``such item or service'' in this
context to refer to the same or similar item or service, in order to
maintain consistency with the statutory provisions related to the QPA
and the provisions allowing batching of items and services.
Additionally, such an interpretation clarifies the meaning of the
statutory provisions at Code section 9816(c)(5)(E)(iii), ERISA section
716(c)(5)(E)(iii), and PHS Act section 2799A-1(c)(5)(E)(iii), which
allow subsequent submission of such an item or service only if the open
negotiation period ended during such a 90-day period (as the open
negotiation period for the particular item or service under dispute
would have already ended). For claims for the same or similar item or
service for which the end of the open negotiation period occurs during
the 90-calendar-day suspension period, after the end of the 90-
calendar-day suspension period, either party may initiate the Federal
IDR process for the items and services affected by the suspension. For
these items or services, the initiating party must submit the Notice of
IDR Initiation within 30 business days following the end of the 90-
calendar-day suspension period, as opposed to the standard 4-business-
day period following the end of the open negotiation period. The 30-
business-day period begins on the day after the last day of the 90-
calendar-day period.
The plan or issuer must make any additional payment, if applicable,
of the amount of the offer selected by the certified IDR entity
directly to the provider, facility, or provider of air ambulance
services not later than 30 calendar days after the determination by the
certified IDR entity. This amount will be the offer selected, reduced
by the sum of any initial payment the plan or issuer has paid to the
provider, facility, or provider of air ambulance services and any cost
sharing paid or owed by the participant, beneficiary, or enrollee to
the provider, facility, or provider of air ambulance services. If the
offer selected by the certified IDR entity is less than the sum of the
initial payment and any cost sharing paid by the participant,
beneficiary, or enrollee, the provider, facility, or provider of air
ambulance services will be liable to the plan or issuer for the
difference. This difference must be paid directly to the plan or issuer
not later than 30 calendar days after the determination by the
certified IDR entity. The Departments note that this determination of
the out-of-network rate does not change the participant's,
beneficiary's, or enrollee's cost sharing, which is based on the
recognized amount. The cost-sharing amount remains the same as
originally calculated in accordance with 26 CFR 54.9816-4T(b)(3)(ii)
and (iii), 29 CFR 2590.716-4(b)(3)(ii) and (iii), and 45 CFR
149.110(b)(3)(ii) and (iii); 26 CFR 54.9816-5T(c)(1) and (2), 29 CFR
2590.716-5(c)(1) and (2), and 45 CFR 149.120(c)(1) and (2); or 26 CFR
54.9817-1T(b)(1) and (2), 29 CFR 2590.717-1(b)(1) and (2), and 45 CFR
149.130(b)(1) and (2).
vi. Recordkeeping Requirement
These interim final rules require that the certified IDR entity
must maintain records of relevant documentation associated with any
Federal IDR process determination for 6 years. The 6-year
[[Page 56001]]
recordkeeping requirement is similar to other recordkeeping
requirements under the Code, ERISA, and the PHS Act. For example,
independent review organizations involved in the Federal external
review process under 26 CFR 54.9815-2719, 29 CFR 2590.715-2719, and 45
CFR 147.136 must retain records for 6 years. This recordkeeping
requirement will help ensure that state and Federal oversight agencies
are able to audit past determinations of certified IDR entities and
that parties are able to obtain records of the determinations.
Certified IDR entities must make these records available for
examination by all parties to the dispute, except when disclosure would
violate state or Federal privacy laws and regulations, as well as to
state or Federal oversight agencies upon request for oversight
purposes.
vii. Costs of the Federal IDR Process and Payment
At the time that a certified IDR entity is selected by both of the
parties or by the Departments, each party to a determination must pay
to the certified IDR entity the administrative fee due to the
Departments for participating in the Federal IDR process. At the time
of submission of the offer by each party to a determination, the
certified IDR entity fee must be paid to the certified IDR entity. Each
party will be able to view the certified IDR entity fees and
administrative fees in the Federal IDR portal when engaging in the
certified IDR entity selection process. As discussed later in this
preamble, certified IDR entities must set the certified IDR entity fee
within a pre-determined range (or as otherwise approved by the
Departments) specified by the Departments through guidance. The
Departments anticipate issuing this guidance annually. For a discussion
of the considerations the Departments will review when setting the
certified IDR entity fee range, see section III.D.5 of this preamble.
These interim final rules require each party to pay the entire
certified IDR entity fee at the time the parties provide their offer
under 26 CFR 54.9816-8T(c)(4)(i), 29 CFR 2590.716-8(c)(4)(i), and 45
CFR 149.510(c)(4)(i). Certified IDR entities are required to hold these
funds in a trust or escrow account until the certified IDR entity makes
a determination of the out-of-network rate, or in instances in which
the parties agree on an out-of-network rate, until the Departments
notify the certified IDR entity that it may remit the funds as
specified in these interim final rules. The certified IDR entity may
(but is not required to) accrue interest on the funds. The certified
IDR entity is not required to remit any accrued interest to any other
party. Within 30 business days of making the determination, the
certified IDR entity must refund to the prevailing party the amount the
party submitted for the certified IDR entity fee. The certified IDR
entity will retain the certified IDR entity fee submitted by the non-
prevailing party, as the non-prevailing party is required to pay the
certified IDR entity fee. In the case of batched determinations, the
certified IDR entity may make different payment determinations for each
qualified IDR item or service under dispute. In these cases, the party
with fewest determinations in its favor is considered the non-
prevailing party and is responsible for paying the certified IDR entity
fee. In the event that each party prevails in an equal number of
determinations, the certified IDR entity fee will be split evenly
between the parties. The Departments are of the view that this approach
reduces the administrative burden of fee collections and ensures
payment of certified IDR entities. This approach also eliminates any
concerns that certified IDR entities will make determinations based on
which party is more likely to pay the certified IDR entity fee. The
Departments may issue additional guidance if abusive situations or
other issues related to the payment of the administrative fee or the
certified IDR entity fee arise. The Departments also solicit comment on
whether additional requirements, including procedures to offset against
or make adjustments to amounts owed under a payment determination, are
necessary to ensure payment or collection of the administrative fee and
the certified IDR entity fee.
If the parties negotiate an out-of-network rate before the
certified IDR entity makes a determination, the certified IDR entity is
required to return half of each party's payment for the certified IDR
entity fee, unless directed otherwise by both parties to distribute the
total amount of that refund in different shares.
Under Code section 9816(c)(8), ERISA section 716(c)(8), PHS Act
section 2799A-1(c)(8), and these interim final rules, each party to a
determination must pay an administrative fee for participating in the
Federal IDR process. The statute further indicates that the
administrative fee must be paid to the Departments at the time and in
the manner specified by the Departments. These interim final rules
require each party to pay the administrative fee to the certified IDR
entity at the time the certified IDR entity is selected, regardless of
whether that certified IDR entity was selected by the parties or by the
Departments. Having the certified IDR entity collect both the
administrative fee and the certified IDR entity fee will help ensure
efficiency by streamlining the process and will facilitate
administrative convenience for the parties and the Departments. These
interim final rules also specify that the administrative fee is non-
refundable, even in instances where the parties negotiate an out-of-
network rate before the certified IDR entity makes a determination or
where the certified IDR entity determines that the case does not
qualify for the Federal IDR process. Code section 9816(c)(8)(B), ERISA
section 716(c)(8)(B), and PHS Act section 2799A-1(c)(8)(B) specify that
the administrative fee is established such that the total amount of
fees is approximately equal to the amount of expenditures estimated by
the Departments in carrying out the Federal IDR process. Because the
Departments expect that a large part of the expenditures in carrying
out the Federal IDR process will come from the initiation of the
Federal IDR process, the Departments will have incurred expenditures in
instances in which the parties reach an agreement before the certified
IDR entity makes a determination or in which the certified IDR entity
determines that the case does not qualify for the Federal IDR process,
and thus, it is appropriate that the parties should still be expected
to pay the fee.
As explained in the following section on certification, the
certified IDR entity must remit the administrative fee to the
Departments at the time and in the manner specified in guidance. The
administrative fee amount will be established in guidance published by
the Departments in a manner so that the total administrative fees
collected by the certified IDR entities and remitted to the Departments
during a calendar year are approximately equal to the estimated amount
of expenditures by the Departments for that calendar year in carrying
out the Federal IDR process. In setting the administrative fee, the
Departments will consider the estimated costs for the Departments to
administer the Federal IDR process for the following calendar year,
including the staffing and contracting costs related to certifying and
providing oversight to certified IDR entities; the costs of developing
and publishing reports as required under Code sections 9816 and 9817,
ERISA sections 716 and 717, and PHS Act sections 2799A-1 and 2799A-2;
the costs of collecting the administrative fees from certified IDR
[[Page 56002]]
entities; and the cost of maintaining the Federal IDR portal. In future
years, such projected costs will be informed by the actual costs
incurred by the Departments to date to administer the Federal IDR
process. The Departments expect that certain resources related to the
Federal IDR process will also be used for the patient-provider dispute
resolution process, such as the Federal IDR portal, certain staffing,
and contracts. In setting the administrative fee, the Departments will
consider the expected volume for the Federal IDR process and the
patient-provider dispute resolution process and apportion the IDR
administrative fee such that it reflects the appropriate usage of the
Federal IDR process by providers, facilities, providers of air
ambulance services, plans, and issuers.
5. Certification of IDR Entities
Under Code section 9816(c)(4), ERISA section 716(c)(4), and PHS Act
section 2799A-1(c)(4), an IDR entity must meet certain standards and be
certified by the Departments to be selected for the Federal IDR
process. Consistent with these provisions, these interim final rules
provide that an IDR entity must provide through the Federal IDR portal
written documentation to the Departments that demonstrates the entity
satisfies certain standards and procedures outlined in these interim
final rules and set forth in guidance issued by the Departments.
Specifically, the Departments will indicate through guidance the types
of documentation that should be submitted for each certification
standard, in what manner they should be submitted, and how the
documentation will be reviewed for certification. An IDR entity that
satisfies the standards in the interim final rules and guidance issued
by the Departments will be provided a certified IDR entity number and
will be certified for a 5-year period, subject to the petition and
revocation process, discussed later in this preamble.\41\ Once
certified, the certified IDR entity must continue to satisfy these
requirements.
---------------------------------------------------------------------------
\41\ As discussed in the section on Economic Impact and
Paperwork Burden, the Departments estimate there will be 50 IDR
entities that will seek certification by the Departments.
---------------------------------------------------------------------------
IDR entities will be expected, as part of their application for
certification, to submit general information about their organization,
including contact information, Taxpayer Identification Number (TIN),
and website information, as well as the service area in which the IDR
entity intends to conduct payment determinations under the Federal IDR
process. IDR entities may choose to apply to operate in all states or
self-limit to a particular subset of states. Further, anyone submitting
the application for certification must have the legal and financial
authority to bind the IDR entity. An IDR entity that the Departments
certify must enter into an agreement with the Departments. That
agreement will include specified provisions encompassed by these
interim final rules, including, but not limited to, the requirements
applicable to certified IDR entities when making payment determinations
as well as the requirements regarding certification and revocation
(such as specifications for wind down activities and reallocation of
certified IDR entity fees, where warranted).
In order to be certified, an IDR entity must possess (directly or
through contracts or other arrangements) and demonstrate sufficient
arbitration and claims administration of health care services, managed
care, billing, coding, medical, and legal expertise. With regard to
medical expertise, where the payment determination depends on the
patient acuity or the complexity of furnishing the qualified IDR item
or service, or the level of training, experience, and quality and
outcome measurements of the provider or facility that furnished the
qualified IDR item or service, the IDR entity should have available
medical expertise with the appropriate training and experience in the
field of medicine involved in the qualified IDR item or service.
Additionally, the IDR entity must employ (directly or through contracts
or other arrangements) sufficient personnel to make determinations
within the 30 business days allowed for such determinations. To satisfy
this standard, the written documentation the IDR entity submits must
include a description of its organizational structure and capabilities,
including an organizational chart and the credentials,
responsibilities, and number of personnel employed to make
determinations. The Departments considered requiring IDR entities to
have personnel (either hired directly or through a contract) with air
space law knowledge for making determinations related to air ambulance
cases, but are concerned that such a requirement may limit the number
of eligible entities and increase the likelihood of conflicts of
interests in air ambulance cases. The Departments seek comment on
whether IDR entities should be required to have air space law knowledge
for IDR entity certification to make determinations for air ambulance
cases.
Next, an IDR entity must also maintain a current accreditation from
a nationally recognized and relevant accreditation organization, such
as URAC, or ensure that its personnel otherwise possess the requisite
training to conduct payment determinations (for example, providing
documentation that personnel employed by the IDR entity have completed
arbitration training by the AAA, the AHLA, or a similar organization).
This requirement will ensure the IDR entity has the operational ability
to perform its primary functions as set forth in the No Surprises Act
and these interim final rules. States have imposed similar requirements
on independent review organizations for external review processes under
PHS Act section 2719 (which is incorporated by reference into Code
section 9815 and ERISA section 715), or for their state IDR processes.
Similar to independent review organizations, certified IDR entity
personnel should have the skills and training necessary to conduct
unbiased and impartial determinations between plans or issuers and
providers, facilities, or providers of air ambulance services, and
similar billing, coding, and medical expertise. The Departments expect
that many of the organizations with current experience in arbitration
or dispute resolution will already have such accreditation and will
employ personnel with relevant experience. The Departments seek comment
on whether any additional accreditation or training standards would
meet this requirement, including whether additional flexibility is
needed to help encourage innovation in the provision of IDR services
and new entrants as IDR entities that may be certified for the Federal
IDR process.
Additionally, as a condition of certification, the IDR entity must
have a process to ensure that no conflicts of interest exist between
the parties and the personnel the certified IDR entity assigns to each
dispute, and to screen for any material relationships between the
parties and the personnel assigned to each dispute. This process will
allow certified IDR entities to comply with the requirements of 26 CFR
54.9816-8T(c)(1)(ii), 29 CFR 2590.716-8(c)(1)(ii), and 45 CFR
149.510(c)(1)(ii).
While conducting the Federal IDR process, a certified IDR entity
will be entrusted with IIHI. Code section 9816(c)(4)(A)(v), ERISA
section 716(c)(4)(A)(v), and PHS Act section 2799A-1(c)(4)(A)(v)
require a certified IDR entity to maintain the confidentiality of IIHI
obtained in the course of conducting payment determinations. This IIHI
is often protected under Federal and state law, but certain laws, such
as the privacy and security regulations promulgated
[[Page 56003]]
under HIPAA, as amended, may not apply to IIHI when it is held by a
certified IDR entity.
Therefore, these interim final rules specify that a certified IDR
entity must provide written documentation to the Departments that
demonstrates that the certified IDR entity satisfies, among other
things, the confidentiality standards set forth in 26 CFR 54.9816-
8T(e)(2)(v), 29 CFR 2590.716-8(e)(2)(v), and 45 CFR 149.510(e)(2)(v).
These provisions include standards for certified IDR entities to
maintain the confidentiality of IIHI obtained in the course of
conducting the Federal IDR process. Because IIHI is sensitive, private
information about consumers and their health, including information
that is identifiable to a particular individual, IIHI warrants strong
protection by the parties that will be handling this information.
Therefore, the Departments are of the view that certified IDR entities
must have procedures in place to protect consumers from improper
storage, use, handling, or transmission of this information. The
confidentiality standards in these interim final rules are informed by
the privacy, security, and breach notification regulations issued under
HIPAA and the HITECH Act, because the Departments are of the view that
these provisions are industry standards.\42\ Drawing from those
standards for these interim final rules promotes continuity in the way
consumer information is protected and secured throughout systems
involved in health care. The Departments have drawn mainly from
relevant HIPAA standards because these are the predominant federal
standards that apply to identifiable consumer health information, when
possessed by some of the parties to the Federal IDR process. Therefore
the Departments are of the view that these standards are the most
appropriate privacy standards for certified IDR entities. The
Departments have tailored these requirements to the particular
functions of certified IDR entities to ensure that they have clear,
workable, and appropriate standards to implement.
---------------------------------------------------------------------------
\42\ 45 CFR part 160 subpart A and subparts A, C, D, and E of
part 164.
---------------------------------------------------------------------------
These interim final rules set forth the confidentiality
requirements applicable to certified IDR entities and include
provisions regarding privacy, security, and breach notification. The
Departments begin by discussing the general privacy requirement in 26
CFR 54.9816-8T(e)(2)(v)(A), 29 CFR 2590.716-8(e)(2)(v)(A), and 45 CFR
149.510(e)(2)(v)(A) that specify that a certified IDR entity may
create, collect, handle, disclose, transmit, access, maintain, store,
and/or use IIHI only to perform two categories of activities, described
in 26 CFR 54.9816-8T(e)(2)(v)(A)(1) through (2), 29 CFR 2590.716-
8(e)(2)(v)(A)(1) through (2), and 45 CFR 149.510(e)(2)(v)(A)(1) through
(2): (1) To perform the certified IDR entity's required duties under
these sections of the interim final rules; and (2) to perform functions
related to carrying out additional obligations as may be required under
applicable Federal or state laws or regulations.
Additionally, certified IDR entities are required to maintain the
security of the IIHI they obtain by ensuring the confidentiality of all
IIHI they create, obtain, maintain, store, and transmit; protecting
against any reasonably anticipated threats or hazards to the security
of this information; protecting against any reasonably anticipated
unauthorized uses or disclosures of this information; and by ensuring
compliance by any of their personnel, including their contractors and
subcontractors (as applicable), assigned to a payment determination. To
satisfy this requirement, certified IDR entities are required to have
policies and procedures in place to properly use and disclose IIHI,
identify when IIHI should be destroyed or disposed of, properly store
and maintain confidentiality of IIHI that is accessed or stored
electronically, and identify the steps the certified IDR entities will
take in the event of a breach regarding IIHI. The Departments based
these requirements on the similar rule applicable to HIPAA covered
entities under 45 CFR 164.306(a)(1), but because the rule for HIPAA
covered entities applies specifically with regard to electronic
protected health information (PHI), the requirements in these interim
final rules specify that certified IDR entities must ensure the
confidentiality of all IIHI they create, obtain, maintain, store, or
transmit in accordance with Code section 9816(c)(4)(A)(v), ERISA
section 716(c)(4)(A)(v), and PHS Act section 2799A-1(c)(4)(A)(v). A
certified IDR entity's responsibility to comply with these
confidentiality requirements shall survive revocation of the IDR
entity's certification for any reason, and IDR entities must comply
with the record retention and disposal requirements described in these
interim final rules.
The Departments also require certified IDR entities to securely
destroy or dispose of IIHI in an appropriate and reasonable manner 6
years from either the date of its creation or the first date on which
the certified IDR entity had access to it, whichever is earlier. In
determining what is appropriate and reasonable, certified IDR entities
should assess potential risks to participant, beneficiary, or enrollee
privacy, as well as consider such issues as the form, type, and amount
of IIHI to be disposed. The Departments are of the view that 6 years is
a reasonable timeframe for destruction of such information since
relevant business procedures should be complete well before this
deadline, including IDR payment determinations and certified IDR entity
compliance with the Departments' audits as applicable. Furthermore, the
6-year timeframe matches the record retention requirements for
certified IDR entities under these interim final rules as well as other
record retention requirements under ERISA. These standards are also
similar to HIPAA Security Rule requirements \43\ under 45 CFR
164.310(d)(2)(i) and (ii), except that the Departments have tailored
the requirements in section 26 CFR 54.9816-8T(e)(2)(v)(B)(4), 29 CFR
2590.716-8(e)(2)(v)(B)(4), and 45 CFR 149.510(e)(2)(v)(B)(4) to apply
to IIHI.
---------------------------------------------------------------------------
\43\ U.S. Dept. of Health and Human Servs., Office for Civil
Rights, ``The HIPAA Privacy and Security Rules: Frequently Asked
Questions About the Disposal of Protected Health Information,''
available at <a href="https://www.hhs.gov/sites/default/files/disposalfaqs.pdf">https://www.hhs.gov/sites/default/files/disposalfaqs.pdf</a>.
---------------------------------------------------------------------------
Next, the Departments require certified IDR entities to develop and
utilize secure electronic interfaces when transmitting IIHI
electronically, including through data transmission with the Federal
IDR portal, and between disputing parties during the Federal IDR
process and the certified IDR entity. In addition, the Departments are
of the view that certified IDR entities must have in place requirements
for their personnel, including their contractors and subcontractors (as
applicable), similar to those required under HIPAA Rules to make sure
IIHI is only handled by appropriate staff who are trained to handle
IIHI, and that proper protocol is followed if a breach of IIHI occurs.
Finally, 26 CFR 54.9816-8T(e)(2)(v)(D), 29 CFR 2590.716-
8(e)(2)(v)(D), and 45 CFR 14.510(e)(2)(v)(D) require that all
confidentiality requirements applicable to certified IDR entities also
apply to certified IDR entities' contractors and subcontractors with
access to IIHI performing any duties related to the Federal IDR
process. For example, if a breach rises to the level of requiring a
breach notification, the contractor or subcontractors must notify the
certified IDR entity to inform it of the risk assessment results, and
the certified IDR entity must notify the provider, facility,
[[Page 56004]]
or provider of air ambulance services; plan and issuer; the
Departments; and each individual whose unsecured IIHI has been, or is
reasonably believed to have been, subject to the breach, to the extent
possible, as required by these interim final rules.
In addition to the privacy and security requirements discussed in
this section of this preamble, these interim final rules contain breach
notification requirements, similar to the HIPAA breach notification
standards (the ``HIPAA Notification Rule'') at 45 CFR 164.402 and
164.404, to address steps that a certified IDR entity must take
following the discovery of a breach of unsecured IIHI as defined in
these interim final rules. The Departments are of the view that
adopting breach notification standards similar to the HIPAA breach
notification standards for certified IDR entities provides important
protections for IIHI. For purposes of these interim final rules, the
Departments made changes from the HIPAA breach notification standards
to account for IIHI and certified IDR entities, as opposed to PHI and
covered entities, in accordance with Code section 9816(c)(4)(C), ERISA
section 716(c)(4)(C), and PHS Act section 2799A-1(c)(4)(C). The
Departments require a certified IDR entity, upon discovery of a
potential breach of unsecured IIHI, to conduct a risk assessment to
determine the probability that the security or privacy of IIHI has been
compromised based on at least the nature and extent of the IIHI
involved, including the types of identifiers and the likelihood of re-
identification; the unauthorized person who used the IIHI or to whom
the disclosure was made; whether the IIHI was actually acquired or
viewed; and the extent to which the risk to the IIHI has been
mitigated. The Departments also require a breach to be treated as
discovered by the certified IDR entity as of the first day on which
such breach is known to the certified IDR entity or, by exercising
reasonable diligence, should have been known to the certified IDR
entity. A certified IDR entity shall be deemed to have knowledge of a
breach if the breach is known, or by exercising reasonable diligence
should have been known, to any person, other than the person committing
the breach, who is an employee, officer, or other agent of the
certified IDR entity.
The Departments are also including requirements for timing,
content, and method of providing the breach notification in these
interim final rules. Under these provisions, a certified IDR entity
must provide notification without unreasonable delay and in no case
later than 60 calendar days after the discovery of the breach. The
Departments are of the view that 60 calendar days provides sufficient
time for a certified IDR entity to discover a potential breach, conduct
a risk assessment, and send notification as required in these interim
final rules, in line with the requirements in 45 CFR 164.404 that allow
up to 60 calendar days for such a notification to be sent. Since a
condition for IDR entity certification involves submission of policies
and procedures to: Properly create, obtain, maintain, store, or
transmit IIHI in accordance with Code section 9816(c)(4)(A)(v), ERISA
section 716(c)(4)(A)(v), and PHS Act section 2799A-1(c)(4)(A)(v);
monitor, periodically assess, and update the security controls and
related system risks to ensure the continued effectiveness of these
controls; and guard against, detect, and report malicious software, the
Departments are of the view that 60 calendar days are sufficient for
proper identification, risk assessment, and notification of a breach.
When a certified IDR entity sends a breach notification, the
content must include similar information as that required under 45 CFR
164.404, but focused on IIHI. Certified IDR entities must include, to
the extent possible, the identification of each individual whose
unsecured IIHI has been, or is reasonably believed by the certified IDR
entity to have been, subject to the breach; a brief description of the
breach, including the date of the breach and the date of the discovery
of the breach, if known; a description of the types of unsecured IIHI
that were involved in the breach (for example, whether full name,
Social Security number, date of birth, home address, account number,
diagnosis, disability code, or other types of information were
involved); a brief description of what the certified IDR entity is
doing to investigate the breach, to mitigate harm to the affected
parties, and to protect against any further breaches; and contact
procedures for individuals to ask questions or learn additional
information, which must include a toll-free telephone number, email
address, website, or postal address. The Departments are of the view
that this level of detail is necessary for full transparency for those
who are potentially affected by such a breach.
Finally, a certified IDR entity must submit such notification in
written form (in clear and understandable language) either on paper,
electronically through the Federal IDR portal, or by email to the
Departments; the plan, issuer or FEHB carrier; the provider, facility,
or provider of air ambulance services; and, when possible, each
individual whose unsecured protected IIHI has been, or is reason
[…truncated; see source link]Indexed from Federal Register on October 7, 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.