Proposed Rule2023-20799
Federal Independent Dispute Resolution (IDR) Process Administrative Fee and Certified IDR Entity Fee Ranges
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
September 26, 2023
Issuing agencies
Treasury DepartmentInternal Revenue ServiceLabor DepartmentEmployee Benefits Security AdministrationHealth and Human Services DepartmentCenters for Medicare & Medicaid Services
Abstract
This document sets forth proposed rules related to the fees established by the No Surprises Act for the Federal independent dispute resolution (IDR) process, as established by the Consolidated Appropriations Act, 2021 (CAA). These proposed rules would amend existing regulations to provide that the administrative fee amount charged by the Department of the Treasury, the Department of Labor, and the Department of Health and Human Services (the Departments) to participate in the Federal IDR process, and the ranges for certified IDR entity fees for single and batched determinations will be set by the Departments through notice and comment rulemaking. These proposed rules would also set forth the methodology used to calculate the administrative fee and the considerations used to develop the certified IDR entity fee ranges. This document also proposes the amount of the administrative fee for disputes initiated on or after the later of the effective date of these rules or January 1, 2024. Finally, this document proposes the certified IDR entity fee ranges for disputes initiated on or after the later of the effective date of these rules or January 1, 2024. In accordance with 5 U.S.C. 553(b)(4), a summary of this rule may be found at https://www.regulations.gov/.
Full Text
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<title>Federal Register, Volume 88 Issue 185 (Tuesday, September 26, 2023)</title>
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[Federal Register Volume 88, Number 185 (Tuesday, September 26, 2023)]
[Proposed Rules]
[Pages 65888-65907]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-20799]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 54
[REG 115762-23]
RIN 1545-BQ94
DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Part 2590
RIN 1210-AC24
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
45 CFR Part 149
[CMS-9890-P]
RIN 0938-AV39
Federal Independent Dispute Resolution (IDR) Process
Administrative Fee and Certified IDR Entity Fee Ranges
AGENCY: Internal Revenue Service, Department of the Treasury; Employee
Benefits Security Administration, Department of Labor; Centers for
Medicare & Medicaid Services, Department of Health and Human Services.
ACTION: Proposed rule.
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SUMMARY: This document sets forth proposed rules related to the fees
established by the No Surprises Act for the Federal independent dispute
resolution (IDR) process, as established by the Consolidated
Appropriations Act, 2021 (CAA). These proposed rules would amend
existing regulations to provide that the administrative fee amount
charged by the Department of the Treasury, the Department of Labor, and
the Department of Health and Human Services (the Departments) to
participate in the Federal IDR process, and the ranges for certified
IDR entity fees for single and batched determinations will be set by
the Departments through notice and comment rulemaking. These proposed
rules would also set forth the methodology used to calculate the
administrative fee and the considerations used to develop the certified
IDR entity fee ranges. This document also proposes the amount of the
administrative fee for disputes initiated on or after the later of the
effective date of these rules or January 1, 2024. Finally, this
document proposes the certified IDR entity fee ranges for disputes
initiated on or after the later of the effective date of these rules or
January 1, 2024. In accordance with 5 U.S.C. 553(b)(4), a summary of
this rule may be found at <a href="https://www.regulations.gov/">https://www.regulations.gov/</a>.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below by October 26, 2023.
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 CMS-9890-P. Because of staff and
resource limitations, the Departments cannot accept comments by
facsimile (FAX) transmission.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-9890-P, P.O. Box 8016,
Baltimore, MD 21244-8016.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for
[[Page 65889]]
Medicare & Medicaid Services, Department of Health and Human Services,
Attention: CMS-9890-P, Mail Stop C4-26-05, 7500 Security Boulevard,
Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Shira B. McKinlay, Internal Revenue Service, Department of the
Treasury, 202-317-5500;
Shannon Hysjulien or Rebecca Miller, Employee Benefits Security
Administration, Department of Labor, 202-693-8335; and
Jacquelyn Rudich or Nora Simmons, Centers for Medicare & Medicaid
Services, Department of Health and Human Services, 301-492-5211.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: Comments received before the close
of the comment period will be available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. The Departments will post
comments on the following website as soon as possible after they have
been received: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the search
instructions on that website to view public comments. The Departments
will not post on <a href="http://Regulations.gov">Regulations.gov</a> public comments that make threats to
individuals or institutions or suggest that the commenter will take
actions to harm an individual. The Departments continue to encourage
individuals not to submit duplicative comments. The Departments will
post acceptable comments from multiple unique commenters even if the
content is identical or nearly identical to other comments.
I. Background
A. Preventing Surprise Medical Bills and Establishing the Federal IDR
Process Under the Consolidated Appropriations Act, 2021
On December 27, 2020, the CAA was enacted.\1\ Title I, also known
as the No Surprises Act, and title II (Transparency) of Division BB of
the CAA amended chapter 100 of the Internal Revenue Code (Code), Part 7
of the Employee Retirement Income Security Act (ERISA), and title XXVII
of the Public Health Service Act (PHS Act). The No Surprises Act
provides Federal protections against surprise billing by limiting out-
of-network cost sharing and prohibiting balance billing in many of the
circumstances in which surprise bills most frequently arise. In
particular, the No Surprises Act added new provisions applicable to
group health plans and health insurance issuers offering group or
individual health insurance coverage. Section 102 of the No Surprises
Act added section 9816 of the Code,\2\ section 716 of ERISA,\3\ and
section 2799A-1 of the PHS Act,\4\ which contain limitations on cost
sharing and requirements regarding the timing of initial payments and
notices of denial of payment by plans and issuers for emergency
services furnished by nonparticipating providers and nonparticipating
emergency facilities, and for non-emergency services furnished by
nonparticipating providers for patient visits to participating health
care facilities, generally defined as hospitals, hospital outpatient
departments, critical access hospitals, and ambulatory surgical
centers.\5\
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\1\ Public Law 116-260 (Dec. 27, 2020).
\2\ 26 U.S.C. 9816, et seq.
\3\ 29 U.S.C. 1185e, et seq.
\4\ 42 U.S.C. 300gg-111, et seq.
\5\ Section 102(d)(1) of the No Surprises Act amended the
Federal Employees Health Benefits Act, 5 U.S.C. 8901 et seq., by
adding a new subsection (p) to 5 U.S.C. 8902. Under this new
provision, each FEHB Program contract must require a carrier to
comply with requirements described in sections 9816 and 9817 of the
Code, sections 716 and 717 of ERISA, and sections 2799A-1 and 2799A-
2 of the PHS Act (as applicable) in the same manner as these
provisions apply with respect to a group health plan or health
insurance issuer offering group or individual health insurance
coverage.
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Section 103 of the No Surprises Act established a Federal IDR
process that plans and issuers and nonparticipating providers and
facilities may utilize to resolve certain disputes regarding out-of-
network rates under section 9816 of the Code,\6\ section 716 of
ERISA,\7\ and section 2799A-1 of the PHS Act.\8\ Section 9816(c)(8) of
the Code,\9\ section 716(c)(8) of ERISA,\10\ and section 2799A-1(c)(8)
of the PHS Act \11\ provide that each party to a determination under
the Federal IDR process shall pay a fee for participating in the
Federal IDR process, and the amount of the fee is an amount established
by the Departments in a manner such that the total amount of fees paid
by all parties is estimated to be equal to the amount of expenditures
estimated to be made by the Departments for the year in carrying out
the Federal IDR process.
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\6\ 26 U.S.C. 9816, et seq.
\7\ 29 U.S.C. 1185e, et seq.
\8\ 42 U.S.C. 300gg-111, et seq.
\9\ 26 U.S.C. 9816(c)(8).
\10\ 29 U.S.C. 1185e(c)(8).
\11\ 42 U.S.C. 300gg-111(c)(8).
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Section 105 of the No Surprises Act added section 9817 of the
Code,\12\ section 717 of ERISA,\13\ and section 2799A-2 of the PHS
Act.\14\ These sections contain limitations on cost sharing and
requirements for the timing of initial payments and notices of denial
of payment by plans and issuers for air ambulance services furnished by
nonparticipating providers of air ambulance services, and allow plans
and issuers and nonparticipating providers of air ambulance services to
utilize the Federal IDR process.
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\12\ 26 U.S.C. 9817, et seq.
\13\ 29 U.S.C. 1185f, et seq.
\14\ 42 U.S.C. 300gg-112, et seq.
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The No Surprises Act also added provisions to title XXVII of the
PHS Act in a new part E \15\ that apply to health care providers,
facilities, and providers of air ambulance services, such as
prohibitions on balance billing for certain items and services and
requirements related to disclosures about balance billing protections.
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\15\ 42 U.S.C. 300gg-131-139.
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The Departments of the Treasury, Labor, and Health and Human
Services (HHS) (the Departments), along with the Office of Personnel
Management (OPM), have issued rulemakings in 2021 and 2022 to implement
various provisions of the No Surprises Act. More specifically relevant
to this proposed rulemaking, the Departments and OPM issued interim
final rules (July 2021 interim final rules \16\ and October 2021
interim final rules \17\) and final rules (August 2022 final rules
\18\) implementing provisions of sections 9816 and 9817 of the
Code,\19\ sections 716 and 717 of ERISA,\20\ and sections 2799A-1 and
2799A-2 of the PHS Act.\21\ These rules implement provisions to protect
consumers from surprise medical bills for emergency services, non-
emergency services furnished by nonparticipating providers for patient
visits to participating facilities \22\ in certain circumstances, and
air ambulance services furnished by nonparticipating providers of air
ambulance services. These rules also implement provisions to establish
a Federal IDR process to determine payment amounts when there is a
dispute between plans or issuers and providers, facilities, or
providers of air ambulance services about the out-of-network rate for
these services if a specified State law as defined in 26 CFR 54.9816-
3T, 29 CFR 2590.716-3, and 45
[[Page 65890]]
CFR 149.30 or an applicable All-Payer Model Agreement under section
1115A of the Social Security Act does not provide a method for
determining the total amount payable.
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\16\ 86 FR 36872 (July 13, 2021).
\17\ 86 FR 55980 (October 7, 2021).
\18\ 87 FR 52618 (August 26, 2022).
\19\ 26 U.S.C. 9816, et seq. and 26 U.S.C. 9817, et seq.
\20\ 29 U.S.C. 1185e, et seq. and 29 U.S.C. 1185f, et seq.
\21\ 42 U.S.C. 300gg-111, et seq. and 42 U.S.C. 300gg-112, et
seq.
\22\ References to a ``participating facility'' in this preamble
mean a ``participating health care facility,'' as defined at 26 CFR
54.9816-3T, 29 CFR 2590.716-3, and 45 CFR 149.30.
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The July 2021 interim final rules and October 2021 interim final
rules generally apply to plans and issuers (including grandfathered
health plans) for plan years (in the individual market, policy years)
beginning on or after January 1, 2022, and to health care providers,
facilities, and providers of air ambulance services for items and
services furnished during plan years (in the individual market, policy
years) beginning on or after January 1, 2022.\23\ The August 2022 final
rules became effective October 25, 2022, and are applicable for items
or services provided or furnished on or after October 25, 2022 for plan
years (in the individual market, policy years) beginning on or after
January 1, 2022.
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\23\ The interim final rules also include interim final
regulations under 5 U.S.C. 8902(p) issued by OPM that specify how
certain provisions of the No Surprises Act apply to health benefit
plans offered by carriers under the Federal Employees Health
Benefits Act. These provisions apply to carriers in the FEHB Program
with respect to contract years beginning on or after January 1,
2022. The disclosure requirements at 45 CFR 149.430 regarding
patient protections against balance billing are applicable as of
January 1, 2022.
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B. October 2021 Interim Final Rules and Related Guidance
The October 2021 interim final rules implement the Federal IDR
process under sections 9816(c) and 9817(b) of the Code,\24\ sections
716(c) and 717(b) of ERISA,\25\ and sections 2799A-1(c) and 2799A-2(b)
of the PHS Act.\26\ The rules apply to emergency services, non-
emergency services furnished by nonparticipating providers for patient
visits to certain types of participating health care facilities \27\
(unless an individual has been provided notice and waived the
individual's surprise billing protections, in accordance with 45 CFR
149.410 or 149.420, as applicable), and air ambulance services
furnished by nonparticipating providers of air ambulance services, for
situations in which neither a specified State law as defined in 26 CFR
54.9816-3T, 29 CFR 2590.716-3, and 45 CFR 149.30 nor an All-Payer Model
Agreement under section 1115A of the Social Security Act applies.
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\24\ 26 U.S.C. 9816(c) and 26 U.S.C. 9817(b).
\25\ 29 U.S.C. 1185e(c) and 29 U.S.C. 1185f(b).
\26\ 42 U.S.C. 300gg-111(c) and 42 U.S.C. 300gg-112(b).
\27\ A health care facility, in the context of non-emergency
services, is defined as (1) a hospital (as defined in section
1861(e) of the Social Security Act), (2) a hospital outpatient
department, (3) a critical access hospital (as defined in section
1861(mm)(1) of the Social Security Act), or (4) an ambulatory
surgical center described in section 1833(i)(1)(A) of the Social
Security Act. Code section 9816(b)(2)(A)(ii), ERISA section
716(b)(2)(A)(ii), and PHS Act section 2799A-1(b)(2)(A)(ii). 26 CFR
54.9816-3T, 29 CFR 2590.716-3, and 45 CFR 149.30.
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To implement the Federal IDR process, the October 2021 interim
final rules include requirements governing the costs of the Federal IDR
process. Under section 9816(c)(5)(F)(i) of the Code,\28\ section
716(c)(5)(F)(i) of ERISA,\29\ section 2799A-1(c)(5)(F)(i) of the PHS
Act,\30\ and the October 2021 interim final rules, the party whose
offer is not selected is responsible for the payment of the fee charged
by the certified IDR entity (certified IDR entity fee).\31\ Under the
October 2021 interim final rules, as a condition of certification, the
certified IDR entity must notify the Departments of the amount of the
certified IDR entity fees it intends to charge for payment
determinations, which is limited to a fixed certified IDR entity fee
amount for single determinations and a separate fixed certified IDR
entity fee amount for batched determinations.\32\ Each of these fixed
certified IDR entity fees must be within a range set forth in guidance
by the Departments, unless the certified IDR entity receives written
approval from the Departments to charge a certified IDR entity fee
outside that range.\33\ The October 2021 interim final rules describe
the considerations that the Departments will use to develop the
certified IDR entity fee ranges, including the anticipated time and
resources needed for certified IDR entities to meet the requirements of
those interim final rules, the volume of payment determinations, and
the adequacy of the Federal IDR process capacity to efficiently handle
the volume of IDR initiations and payment determinations, and discuss
that the Departments will review and update the allowable fee ranges
annually based on these factors, the impact of inflation, and other
cost increases. Those rules also provide that on an annual basis, the
certified IDR entity may update its certified IDR entity fees within
the ranges set forth in current guidance and seek approval from the
Departments to charge fixed certified IDR entity fees beyond the upper
or lower limits for certified IDR entity fees.\34\
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\28\ 26 U.S.C. 9816(c)(5)(F)(i).
\29\ 29 U.S.C. 1185e(c)(5)(F)(i).
\30\ 42 U.S.C. 300gg-111(c)(5)(F)(i).
\31\ In the case of a batched dispute, the party with fewest
determinations in its favor is considered the non-prevailing party
and is responsible for paying the certified IDR entity fee. In the
event that each party prevails in an equal number of determinations,
the certified IDR entity fee will be split evenly between the
parties. 86 FR 55980, 56001.
\32\ 26 CFR 54.9816-8T(e)(2)(vii), 29 CFR 2590.716-8(e)(2)(vii),
and 45 CFR 149.510(e)(2)(vii).
\33\ Id.
\34\ Id.
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Additionally, pursuant to section 9816(c)(8) of the Code,\35\
section 716(c)(8) of ERISA,\36\ and section 2799A-1(c)(8) of the PHS
Act,\37\ and under the October 2021 interim final rules, each party
must pay an administrative fee for participating in the Federal IDR
process. The administrative fee is established in guidance in a manner
so that, in accordance with the requirements of section 9816(c)(8)(B)
of the Code,\38\ section 716(c)(8)(B) of ERISA,\39\ and section 2799A-
1(c)(8)(B) of the PHS Act,\40\ the total administrative fees paid for a
year are estimated to be equal to the amount of expenditures estimated
to be made by the Departments to carry out the Federal IDR process for
that year.\41\
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\35\ 26 U.S.C. 9816(c)(8).
\36\ 29 U.S.C. 1185e(c)(8).
\37\ 42 U.S.C. 300gg-111(c)(8).
\38\ 26 U.S.C. 9816(c)(8)(B).
\39\ 29 U.S.C. 1185e(c)(8)(B).
\40\ 42 U.S.C. 300gg-111(c)(8)(B).
\41\ 26 CFR 54.9816-8T(d)(2)(ii), 29 CFR 2590.716-8(d)(2)(ii),
and 45 CFR 149.510(d)(2)(ii).
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Contemporaneously with the October 2021 interim final rules, the
Departments released the Calendar Year 2022 Fee Guidance for the
Federal Independent Dispute Resolution Process Under the No Surprises
Act (October 2021 guidance), setting the administrative fee for both
parties to a dispute at $50 per party.\42\ The October 2021 guidance
also established the range for fixed certified IDR entity fees for
single determinations as $200-$500, and the range for fixed certified
IDR entity fees for batched determinations as $268-$670, unless
otherwise approved by the Departments. In October 2022, the Departments
released the Calendar Year 2023 Fee Guidance for the Federal
Independent Dispute Resolution Process Under the No Surprises Act
(October 2022 guidance), again setting the administrative fee for both
parties to a dispute at $50 per party.\43\ The October 2022 guidance
explained that the data available regarding take-up and usage of
[[Page 65891]]
the Federal IDR process was not reliable enough to support a change to
either the estimated number of payment determinations for which
administrative fees would be paid or the estimated ongoing program
costs for 2023; therefore, the 2023 administrative fee amount due from
each party for participating in the Federal IDR process would remain
the same as the 2022 administrative fee. The October 2022 guidance
permits certified IDR entities to charge a fee between $200 and $700
for single determinations and between $268 and $938 for batched
determinations, unless the Departments otherwise grant approval for the
certified IDR entity to charge a fee outside of these ranges. In
addition, to account for the heightened workload for batched
determinations, the October 2022 guidance permits a certified IDR
entity to charge the following percentage of its approved certified IDR
entity batched determination fee (``batching percentage'') for batched
determinations, which are based on the number of line items initially
submitted in the batch:
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\42\ Centers for Medicare & Medicaid Services (September 30,
2021). Calendar Year 2022 Fee Guidance for the Federal Independent
Dispute Resolution Process under the No Surprises Act. <a href="https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Technical-Guidance-CY2022-Fee-Guidance-Federal-Independent-Dispute-Resolution-Process-NSA.pdf">https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Technical-Guidance-CY2022-Fee-Guidance-Federal-Independent-Dispute-Resolution-Process-NSA.pdf</a>.
\43\ Centers for Medicare & Medicaid Services (October 31,
2022). Calendar Year 2023 Fee Guidance for the Federal Independent
Dispute Resolution Process under the No Surprises Act. <a href="https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf">https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf</a>.
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<bullet> 2-20 line items: 100 percent of the approved batched
determination fee;
<bullet> 21-50 line items: 110 percent of the approved batched
determination fee;
<bullet> 51-80 line items: 120 percent of the approved batched
determination fee; and
<bullet> 81 line items or more: 130 percent of the approved batched
determination fee.
In December 2022, the Departments released the Amendment to the
Calendar Year 2023 Fee Guidance for the Federal Independent Dispute
Resolution Process Under the No Surprises Act (December 2022 guidance),
which amended the $50 per party administrative fee set in the October
2022 guidance to $350 for calendar year 2023.\44\ The change in the
administrative fee for 2023 reflected the additional costs to the
Departments to carry out the Federal IDR process as a result of the
Departments' enhanced role in calendar year 2023 in conducting pre-
eligibility reviews to allow the certified IDR entities to complete
their eligibility determinations more efficiently,\45\ as well as
systemic improvements that allowed for the aggregation of data needed
to estimate the rate at which disputes were determined eligible for the
Federal IDR process and the rate at which one or both parties paid the
administrative fee for purposes of calculating the administrative fee.
The December 2022 guidance did not amend the certified IDR entity fee
ranges.
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\44\ Centers for Medicare & Medicaid Services (December 23,
2022). Amendment to the Calendar Year 2023 Fee Guidance for the
Federal Independent Dispute Resolution Process under the No
Surprises Act: Change in Administrative Fee. <a href="https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/amended-cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf">https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/amended-cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf</a>.
\45\ Centers for Medicare & Medicaid Services (November 21,
2022). Notice of the Federal Independent Dispute Resolution (IDR)
Team Technical Assistance to Certified Independent Dispute
Resolution Entities (IDREs) in the Dispute Eligibility Determination
Process. <a href="https://www.cms.gov/files/document/idre-eligibility-support-guidance-11212022-final-updated.pdf">https://www.cms.gov/files/document/idre-eligibility-support-guidance-11212022-final-updated.pdf</a>.
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C. Recent Litigation
On November 30, 2022, the Texas Medical Association, Tyler Regional
Hospital, and a Texas physician filed a lawsuit (TMA III) \46\ against
the Departments and OPM, asserting that the July 2021 interim final
rules \47\ and certain related guidance documents were in conflict with
the statutory language, including the regulations governing how the
qualifying payment amount (QPA) should be calculated. On August 24,
2023, the U.S. District Court for the Eastern District of Texas (Texas
District Court) issued a memorandum opinion and order \48\ that vacated
certain portions of the July 2021 interim final rules and associated
regulatory provisions \49\ and portions of guidance documents,\50\
including those portions that provided the methodology for calculating
the QPA and interpretations for certified IDR entities related to the
processing of disputes for air ambulance services.
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\46\ Tex. Med. Ass'n, v. U.S. Dep't of Health and Human Servs.,
Case No. 6:22-cv-00450-JDK (E.D. Tex. November 30, 2022).
\47\ 86 FR 36872 (July 13, 2021).
\48\ See Memorandum Opinion and Order, Tex. Med. Ass'n. v. U.S.
Dep't of Health & Hum. Servs, No. 6:22-cv-00450-JDK (E.D. Tex.
August 24, 2023).
\49\ Specifically, the Texas District Court vacated certain
subprovisions of 45 CFR 149.130 and 149.140, 26 CFR 54.9816-6T and
54.9817-1T, and 29 CFR 2590.716-6 and 2590.717-1. The Texas District
Court also vacated 5 CFR 890.114(a).
\50\ Specifically, the Texas District Court vacated FAQs 14 and
15 of FAQs about Affordable Care Act and Consolidated Appropriations
Act, 2021 Implementation Part 55 (August 19, 2022), as well as
portions of Technical Guidance for Certified IDR Entities at 2-3
(August 18, 2022).
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On January 30, 2023, the Texas Medical Association, Houston
Radiology Associated, Texas Radiological Society, Tyler Regional
Hospital, and a Texas physician filed a lawsuit (TMA IV) \51\ against
the Departments and OPM, asserting that the December 2022 guidance was
unlawfully issued without notice and comment rulemaking.\52\ On August
3, 2023, the Texas District Court issued a memorandum opinion and order
\53\ that vacated the portion of the December 2022 guidance \54\ that
increased the administrative fee for the Federal IDR process to $350
per party for disputes initiated during the calendar year beginning
January 1, 2023. The Texas District Court also vacated certain
provisions of the October 2021 interim final rules setting forth the
batching criteria under which multiple IDR items or services are
treated as related to the ``treatment of a similar condition.'' \55\
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\51\ Tex. Med. Ass'n, v. U.S. Dep't of Health and Human Servs.,
Case No. 6:23-cv-00059-JDK (E.D. Tex. January 30, 2023).
\52\ See Motion for Summary Judgment and Reply in Support of
Summary Judgment, p. 1, Tex. Med. Ass'n. v. U.S. Dep't of Health &
Hum. Servs, No. 6:23-cv-00059-JDK (E.D. Tex. March 27, 2023).
<a href="https://ecf.txed.uscourts.gov/doc1/175113317945">https://ecf.txed.uscourts.gov/doc1/175113317945</a>.
\53\ See Memorandum Opinion and Order, Tex. Med. Ass'n. v. U.S.
Dep't of Health & Hum. Servs, No. 6:23-cv-00059-JDK (E.D. Tex.
August 3, 2023).
\54\ Centers for Medicare & Medicaid Services (December 23,
2022). Amendment to the Calendar Year 2023 Fee Guidance for the
Federal Independent Dispute Resolution Process under the No
Surprises Act: Change in Administrative Fee. <a href="https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/amended-cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf">https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/amended-cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf</a>.
\55\ Specifically, the Texas District Court vacated the
requirement under 26 CFR 54.9816-8T(c)(3)(i)(C), 29 CFR 2590.716-
8(c)(3)(i)(C), and 45 CFR 149.510(c)(3)(i)(C) that for a qualified
IDR item and service to be considered the same or similar item and
service, it must be billed under the same service code or a
comparable code under a different procedural code system, such as
the Current Procedural Terminology (CPT) codes with modifiers, if
applicable, Healthcare Common Procedure Coding System (HCPCS) with
modifiers, if applicable, or Diagnosis-Related Group (DRG) codes
with modifiers, if applicable.
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As a result of the TMA IV opinion and order, on August 3, 2023, the
Departments instructed certified IDR entities to pause all work in the
Federal IDR portal until the Departments updated the Federal IDR
process guidance, systems, and related documents to make them
consistent with the TMA IV opinion and order. Subsequently, on August
7, 2023, the Departments directed certified IDR entities to resume
processing all single and bundled disputes for which the administrative
fee had already been paid and all batched disputes for which the
certified IDR entity had already determined the dispute to be eligible
and administrative fees had been paid (or the deadline for collecting
fees had expired) before August 3, 2023. On August 8, 2023, the
Departments directed certified IDR entities to resume processing single
and bundled disputes initiated in 2022 for which the administrative fee
had not been paid before August 3, 2023. On August 11, 2023, the
Departments released
[[Page 65892]]
guidance \56\ to reflect the TMA IV decision related to the
administrative fee and to clarify the applicability of the $50 per
party per dispute administrative fee amount for 2023, as provided in
the October 2022 guidance. On the same date, the Departments directed
certified IDR entities to resume processing single and bundled disputes
initiated in 2023 for which the administrative fees had not been paid
before August 3, 2023. As a result of the TMA III opinion and order
issued on August 24, 2023, the Departments again paused all IDR-related
activities in order to evaluate the Texas District Court's order and
review current Federal IDR processes, templates, and system updates
that are necessary to comply with the order. As of the publication of
this proposed rulemaking, the Departments have directed certified IDR
entities only to perform limited Federal IDR process functions.
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\56\ Centers for Medicare & Medicaid Services (August 11, 2023).
Federal Independent Dispute Resolution (IDR) Process Administrative
Fee FAQs. <a href="https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/no-surprises-act-independent-dispute-resolution-administrative-fee-frequently-asked-questions.pdf">https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/no-surprises-act-independent-dispute-resolution-administrative-fee-frequently-asked-questions.pdf</a>.
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D. Scope and Purpose of Rulemaking
These rules propose amendments to 26 CFR 54.9816-8(d)(2)(ii) and
(e)(2)(vii), 29 CFR 2590.716-8(d)(2)(ii) and (e)(2)(vii), and 45 CFR
149.510(d)(2)(ii) and (e)(2)(vii) to provide that the administrative
fee amount and the ranges for certified IDR entity fees for single and
batched disputes would be set by the Departments through notice and
comment rulemaking, rather than in guidance published annually. This
rulemaking also proposes to set forth the methodology used to calculate
the administrative fee and the considerations used to develop the
certified IDR entity fee ranges. These rules would also propose the
administrative fee amount and certified IDR entity fee ranges for
disputes initiated on or after the later of the effective date of these
rules or January 1, 2024.
II. Overview of the Proposed Rules--Departments of the Treasury, Labor,
and HHS
A. Administrative Fee Amount and Methodology
Under section 9816(c)(8)(A) of the Code,\57\ section 716(c)(8)(A)
of ERISA,\58\ section 2799A-1(c)(8)(A) of the PHS Act,\59\ and the
October 2021 interim final rules,\60\ each party to a determination for
which a certified IDR entity is selected must pay an administrative fee
for participating in the Federal IDR process. Under section
9816(c)(8)(B) of the Code,\61\ section 716(c)(8)(B) of ERISA,\62\
section 2799A-1(c)(8)(B) of the PHS Act,\63\ and the October 2021
interim final rules,\64\ the administrative fee is established in a
manner such that the total administrative fees paid for a year are
estimated to be equal to the amount of expenditures estimated to be
made by the Departments to carry out the Federal IDR process for that
year.
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\57\ 26 U.S.C. 9816(c)(8)(A).
\58\ 29 U.S.C. 1185e(c)(8)(A).
\59\ 42 U.S.C. 300gg-111(c)(8)(A).
\60\ 26 CFR 54.9816-8T(d)(2)(i), 29 CFR 2590.716-8(d)(2)(i), and
45 CFR 149.510(d)(2)(i).
\61\ 26 U.S.C. 9816(c)(8)(B).
\62\ 29 U.S.C. 1185e(c)(8)(B).
\63\ 42 U.S.C. 300gg-111(c)(8)(B).
\64\ 26 CFR 54.9816-8T(d)(2)(ii), 29 CFR 2590.716-8(d)(2)(ii),
and 45 CFR 149.510(d)(2)(ii).
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In TMA IV,\65\ the Texas District Court issued an opinion and order
holding that the process by which the Departments amended the 2023
administrative fee guidance to increase the administrative fee for the
Federal IDR process from $50 to $350 per party for disputes initiated
during the calendar year beginning January 1, 2023 \66\ was a violation
of the Departments' obligation under the Administrative Procedure Act
to give affected parties notice of and an opportunity to comment on the
administrative fee.\67\ In light of the Texas District Court's opinion
and order, as well as the Departments' reassessment regarding the
practicability of establishing the administrative fee through notice
and comment rulemaking, the Departments propose to establish the amount
of the administrative fee through notice and comment rulemaking. To
reflect this, the Departments propose to amend 26 CFR 54.9816-
8(d)(2)(ii), 29 CFR 2590.716-8(d)(2)(ii), and 45 CFR 149.510(d)(2)(ii)
to state that the Departments will set the administrative fee through
notice and comment rulemaking.
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\65\ 6:23-cv-00059-JDK (E.D. Tex. Jan. 30, 2023).
\66\ Centers for Medicare & Medicaid Services (December 23,
2022). Amendment to the Calendar Year 2023 Fee Guidance for the
Federal Independent Dispute Resolution Process under the No
Surprises Act: Change in Administrative Fee. <a href="https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/amended-cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf">https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/amended-cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf</a>.
\67\ See Memorandum Opinion and Order, Tex. Med. Ass'n. v. U.S.
Dep't of Health & Hum. Servs, No. 6:23-cv-00059-JDK (E.D. Tex.
August 3, 2023). <a href="https://ecf.txed.uscourts.gov/doc1/175113317945">https://ecf.txed.uscourts.gov/doc1/175113317945</a>.
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The Departments also propose at 26 CFR 54.9816-8(d)(2)(ii), 29 CFR
2590.716-8(d)(2)(ii), and 45 CFR 149.510(d)(2)(ii) that, for disputes
initiated on or after the later of the effective date of these rules or
January 1, 2024, the proposed administrative fee amount would be $150
per party per dispute, which would remain in effect until changed by
subsequent rulemaking. Under this proposed rule, the Departments
propose to retain the flexibility to update the administrative fee more
frequently or less frequently than annually. With this flexibility, the
Departments intend to update the administrative fee amount when the
total projected amount of administrative fees paid or projected
expenditures made by the Departments to carry out the Federal IDR
process changes, such that a new administrative fee amount would be
required for the Departments to cover the costs of carrying out the
Federal IDR process. For example, the Departments' expenditures may be
impacted by changes to regulations governing the Federal IDR process or
the implementation of that process, the volume of disputes initiated
and closed under the Federal IDR process, and the Departments' costs.
In such cases, the Departments would propose a different administrative
fee amount in notice and comment rulemaking before applying a new
administrative fee amount. Thus, the proposal to amend the current
regulation to remove the requirement to set the administrative fee
amount annually would help mitigate the risk of the Departments being
unable to collect administrative fees sufficient to carry out the
Federal IDR process in response to evolving conditions, such as the
rates at which disputes are being initiated and closed. Additionally,
the Departments could determine that the projected amount of
administrative fees paid at the current fee amount will equal the
projected expenditures made to carry out the Federal IDR process in a
subsequent year, and therefore, no adjustment of the fee amount in
rulemaking would be necessary. This proposed approach would comport
with the statutory requirement to set the administrative fee amount in
a manner such that the total amount of fees paid in a year is estimated
to be equal to the amount of expenditures estimated to be made by the
Departments in such year in carrying out the Federal IDR process.
The Departments propose to set the administrative fee amount by
projecting the amount of expenditures to be made by the Departments in
carrying out the Federal IDR process and dividing this by the projected
number of administrative fees to be paid by the parties. The
Departments project the number of administrative fees to be paid
[[Page 65893]]
based on the total volume of disputes to be closed. Under the current
Federal IDR process and the policies proposed in these proposed rules,
both the initiating and non-initiating parties to a dispute are
required to pay the non-refundable administrative fee in full, and
therefore the total amount of administrative fees paid is calculated to
reflect that both parties to a dispute pay the administrative fee. In
calculating the Departments' estimated administrative fee, the
Departments use the total volume of disputes projected to be closed,
rather than the total volume of disputes projected to be initiated,
because the total volume of closed disputes is more indicative of the
total volume of disputes for which fees are paid under the Departments'
current collections process.\68\
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\68\ Under current policy and guidance, the administrative fee
may be collected by certified IDR entities up until the time the
parties submit their offers, and therefore the administrative fee is
not collected for all disputes initiated. See, for example, Centers
for Medicare & Medicaid Services (March 2023). Federal Independent
Dispute Resolution (IDR) Process Guidance for Certified IDR
Entities. <a href="https://www.cms.gov/files/document/federal-idr-guidance-idr-entities-march-2023.pdf">https://www.cms.gov/files/document/federal-idr-guidance-idr-entities-march-2023.pdf</a>.
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For the purposes of calculating the administrative fee amount
proposed in this rulemaking, the Departments project approximately
225,000 disputes will be closed annually. This projection is based on
Federal IDR process data from February 2023 through July 2023, which is
the most recent 6-month period before Federal IDR process operations
were temporarily paused in August 2023.\69\ Using this projected volume
of disputes, the Departments assume a prospective reduction of
approximately 25 percent in the volume of closed disputes to account
for the impact of the TMA IV opinion and order's vacatur of the
batching regulations at 26 CFR 54.9816-8T(c)(3)(i)(C), 29 CFR 2590.716-
8(c)(3)(i)(C), and 45 CFR 149.510(c)(3)(i)(C). The Departments
anticipate that the vacatur of the batching regulations as a result of
TMA IV discussed in sections I.C. and II.B. of this preamble may result
in the initiation and closure of fewer disputes due to the possibility
that batched disputes may involve more line items and take more time to
close.
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\69\ For this calculation, we used our Federal IDR process
collections data from February 2023 through July 2023 to calculate
the average monthly volume of disputes closed. We applied the 25
percent reduction described in this rule to the average monthly
volume and multiplied this number by 12 to project the annual volume
of closed disputes.
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Additionally, to calculate the administrative fee amount proposed
in this rulemaking, the Departments projected the expenditures to carry
out the Federal IDR process. These projected expenditures include the
Federal resources needed to carry out the Federal IDR process, such as
personnel costs, as well as activities included as part of contract
costs, such as resources used for targeted improvements of the overall
process. The costs to the Departments for carrying out the Federal IDR
process in 2024 are projected to be approximately $70 million,\70\
which includes contract costs and Federal resources associated with:
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\70\ Because the Departments generally are not permitted to
publicly provide information that is confidential due to trade
secrets associated with future contracting, the Departments are
limited in their ability to provide detailed information about
projected total Federal IDR process expenditures. See 45 CFR
5.31(d).
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<bullet> Maintaining the Federal IDR portal, which is intended to
make the parties' and certified IDR entities' experiences using the
portal more efficient, clear, and streamlined;
<bullet> Certifying IDR entities and collecting data from them,
which is intended to increase the number of certified IDR entities,
improving the speed of eligibility and payment determinations, and to
assist the Departments in understanding where some efficiencies may
still be gained in the process;
<bullet> Conducting program integrity activities, such as QPA
audits and IDR decision audits, which are intended to ensure program
integrity of the Federal IDR process by reducing and preventing errors
in the Federal IDR process;
<bullet> Investigating relevant complaints, which is intended to
ensure compliance with the Federal IDR process;
<bullet> Providing outreach to parties and technical assistance to
certified IDR entities, which is intended to streamline the experience
and further improve the speed and integrity of eligibility and payment
determinations;
<bullet> Collecting administrative fees, which is intended to
operationalize, maintain, and oversee administrative fee collections
from certified IDR entities;
<bullet> Assisting with eligibility determinations when the volume
of disputes submitted exceeds the capacity of certified IDR entities to
perform those determinations, which is intended to expedite and
facilitate eligibility reviews conducted by certified IDR entities;
\71\ and
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\71\ Centers for Medicare & Medicaid Services (November 21,
2022). Notice of the Federal Independent Dispute Resolution (IDR)
Team Technical Assistance to Certified Independent Dispute
Resolution Entities (IDREs) in the Dispute Eligibility Determination
Process. <a href="https://www.cms.gov/files/document/idre-eligibility-support-guidance-11212022-final-updated.pdf">https://www.cms.gov/files/document/idre-eligibility-support-guidance-11212022-final-updated.pdf</a>.
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<bullet> Retaining and making available Federal personnel dedicated
to carrying out Federal IDR process activities.
Using this methodology, as proposed in paragraphs 26 CFR 54.9816-
8(d)(2)(ii), 29 CFR 2590.716-8(d)(2)(ii), and 45 CFR 149.510(d)(2)(ii),
the proposed administrative fee for disputes initiated on or after the
later of the effective date of these rules or on January 1, 2024, and
continuing until changed by subsequent rulemaking, would be calculated
by dividing the projected annual expenditures of approximately $70
million to be made by the Departments in carrying out the Federal IDR
process by the projected annual number of administrative fees to be
paid by the disputing parties. As previously explained, the projected
total number of administrative fees is calculated using the projected
volume of disputes closed and reflects that both parties to a dispute
pay the administrative fee. We project 225,000 closed disputes in
calendar year 2024. Therefore,450,000 administrative fees would be paid
by the parties in the year, because initiating and non-initiating
parties to a dispute are required to pay the full administrative fee
under the current Federal IDR process. This would result in a proposed
administrative fee amount of $150 per party per dispute.\72\ This
administrative fee amount is based on the most current collections data
(February through July 2023), which the Departments have determined to
be the best available data for estimation of future collections, and
the Departments' projected expenditures as of the publication of these
proposed rules. These projections may change between the publication of
the proposed and final rules based on more recent data available at
that time; thus, the Departments propose to finalize an administrative
fee amount methodology proposed here, as finalized, using the updated
data, if applicable.
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\72\ As described later in this rule, we estimate that the
proposed administrative fee of $150 per party, per dispute would
result in an estimated annual collection approximately equal to the
projected annual expenditures of approximately $70 million.
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The Departments continue to consider improvements to the Federal
IDR process, including how collection of the administrative fee could
be more efficient and how the administrative fee amount could better
ensure equitable access to the Federal IDR process across the various
parties seeking to initiate disputes. Accordingly, the Departments
intend to propose additional policies related to the administrative fee
in future notice and comment rulemaking, including policies that would
change the manner and timeframe in which the
[[Page 65894]]
administrative fee is paid, reduce the administrative fee amount for
disputes that are determined ineligible or that involve low-dollar
claims, and codify the consequences of failing to pay the
administrative fee. Therefore, it is likely that these potential future
proposals could require changes to the administrative fee amount, and
any such change would be set forth in future notice and comment
rulemaking.
The Departments solicit comments on this proposal, including the
methodology used to calculate the administrative fee amount and the
proposed administrative fee amount for disputes initiated on or after
the later of the effective date of these rules or on January 1, 2024,
as well as any potential effects on interested parties as a result of
increasing the administrative fee from $50 to $150 per party. For
example, the Departments solicit comments on whether this proposed
administrative fee amount could be cost prohibitive for certain parties
disputing low-dollar items and services, and whether it would reduce
the number of disputes initiated in calendar year 2024 and beyond. The
Departments also solicit comment on the proposal to set the
administrative fee amount more frequently or less frequently than
annually and whether the Departments should instead retain the current
policy that the administrative fee amount is set annually.
Additionally, the Departments seek comment on any implications of TMA
III and TMA IV that could impact these administrative fee proposals
that are not already noted in this proposed rulemaking.
Finally, the Departments solicit comment on whether, in future
years, they should apply an inflationary adjustment, such as the
consumer price index for all urban consumers (CPI-U), to the projected
expenditures to be made by the Departments in carrying out the Federal
IDR process when calculating the administrative fee amount each year
and set forth the adjusted administrative fee amount in guidance,
rather than in notice and comment rulemaking, as long as there are no
other changes to the methodology.
B. Certified IDR Entity Fee Ranges
Under current regulations at 26 CFR 54.9816-8T(e)(2)(vii), 29 CFR
2590.716-8(e)(2)(vii), and 45 CFR 149.510(e)(2)(vii), the certified IDR
entity fees for single determinations and batched determinations are
set by the certified IDR entities within the upper and lower limits of
ranges for each as set forth in guidance issued annually by the
Departments.
The Departments propose to amend the provisions of the regulations
establishing the ranges for certified IDR entity fees for single and
batched disputes to refer to the ranges being established in notice and
comment rulemaking, rather than in guidance. These changes would be
reflected at 26 CFR 54.9816-8(e)(2)(vii), 29 CFR 2590.716-8(e)(2)(vii),
and 45 CFR 149.510(e)(2)(vii), which would specify that certified IDR
entities must, on an annual basis, provide a fixed fee for single
determinations and separate fixed fees for batched determinations
within the upper and lower limits for each as set in notice and comment
rulemaking. Further, the proposed rules would provide that the
certified IDR entity fee ranges established by the Departments in
rulemaking would remain in effect until new certified IDR entity fee
ranges are changed by a subsequent notice and comment rulemaking. Under
this approach, the Departments would retain the discretion to update
the certified IDR entity fee ranges more or less frequently than
annually. Consistent with the current process, the certified IDR entity
could not charge a fee outside the limits set forth in rulemaking
unless the certified IDR entity or IDR entity seeking certification
receives advance written approval from the Secretary to charge a fixed
fee beyond the upper or lower limits. Finally, the Departments propose
that the certified IDR entity or IDR entity seeking certification may
seek advance written approval from the Departments to update its fees
more frequently than once annually.
The Departments propose that for disputes initiated on or after the
later of the effective date of these rules or January 1, 2024,
certified IDR entities would be permitted to charge a fixed certified
IDR entity fee for single determinations within the range of $200 to
$840. This fee range represents a 20 percent increase to the upper
limit from the 2023 single determination fee range.\73\ The Departments
anticipate that the proposed range for single determinations would only
minimally impact the fixed fees selected by certified IDR entities.
This is because the process of arbitrating single determinations should
remain relatively predictable in 2024, as these disputes have not been
impacted by the TMA IV decision. The Departments expect that certified
IDR entities would continue to price their single determination fees
competitively despite the proposed increase in range. Nonetheless, the
Departments are of the view that an increase to the upper limit of the
range is necessary to allow certified IDR entities flexibility to set
their fees in alignment with their operating costs.
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\73\ Beginning January 1, 2023, certified IDR entities are
permitted to charge a certified IDR entity fee for single
determinations within the range of $200-$700. See Centers for
Medicare & Medicaid Services (October 31, 2022). Calendar Year 2023
Fee Guidance for the Federal Independent Dispute Resolution Process
under the No Surprises Act. <a href="https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf">https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf</a>.
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The Departments propose that for disputes initiated on or after the
later of the effective date of these proposed rules, or January 1,
2024, certified IDR entities would be permitted to charge a fixed
certified IDR entity fee for batched determinations within the range of
$268 to $1,173, unless a fee not within that range is approved by the
Departments pursuant to paragraphs 26 CFR 54.9816-8T(e)(2)(vii)(A) and
(B), 29 CFR 2590.716-8(e)(2)(vii)(A) and (B), and 45 CFR
149.510(e)(2)(vii)(A) and (B). This fee range represents a 25 percent
increase to the upper limit from the 2023 batched determination fee
range.\74\ The Departments propose to continue to use a tiered fee
structure based on the number of line items within the batch.\75\ Under
this proposed rule, the certified IDR entities would be permitted to
charge a fixed tiered fee within the range of $75 to $250 for every
additional 25 line items within a batched dispute beginning with the
26th line item. A certified IDR entity's batched determination fee
would be applied to all batched disputes that have between 2 and 25
line items. For batched disputes with more than 25 line items, the
certified IDR entity fee would be able to increase the base amount for
every additional 25 line items by a fixed value between $75 and $250,
as determined by the certified IDR entity. Unlike the fixed certified
IDR entity fee for single and batched determinations, certified IDR
entities would not be able
[[Page 65895]]
to seek approval to charge a fee outside of the tiered fee range for
batched determinations. It is the Departments' view that the ability to
seek approval to charge a fee outside of the fixed certified IDR entity
batched fee range is sufficiently flexible to address any potential
cost concerns. This is because the certified IDR entities only need the
ability to set a fee outside one of the two batched ranges' upper and
lower limits to set their overall batched fee in a manner that allows
them to cover their expenses. Further, for batched determinations, the
fee range would not restrict the application of the additional fixed
tiered fee for batched disputes. For example, if a certified IDR entity
had, in 2024, set its batched determination fee at $1,000 (which would
be within the fee range of $268 to $1,173) and its tiered fee at $200
(which would be within the tiered fee range of $75 to $250) for each
additional increment of 25 line items, and were to be selected for a
batched determination with 53 line items (which corresponds to 2
increments of 25 line items within the tiered fee structure plus the
batched determination fee) it would be permitted to charge $1,400
($1,000 + ($200 x 2)) as its batched determination fee in calendar year
2024.
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\74\ Beginning January 1, 2023, certified IDR entities are
permitted to charge a certified IDR entity fee for batched
determinations within a range of $268-$938. See Centers for Medicare
& Medicaid Services (October 31, 2022). Calendar Year 2023 Fee
Guidance for the Federal Independent Dispute Resolution Process
under the No Surprises Act. <a href="https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf">https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf</a>.
\75\ This was first proposed in the Calendar Year 2023 Fee
Guidance for the Federal Independent Dispute Resolution Process
under the No Surprises Act and implemented for all disputes
initiated as of January 1, 2023. See Centers for Medicare & Medicaid
Services (October 31, 2022). Calendar Year 2023 Fee Guidance for the
Federal Independent Dispute Resolution Process under the No
Surprises Act. <a href="https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf">https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf</a>.
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Further, the Departments propose that the batched determination fee
would continue to be based on the number of line items included in the
initiating party's initial submission of the batched dispute to the
Federal IDR process. This would account for the time and effort
required of certified IDR entities in determining eligibility for all
line items within a batched dispute such that they can ultimately make
a payment determination. These fee ranges would apply until another set
of fee ranges were proposed and finalized through subsequent notice and
comment rulemaking.
If a certified IDR entity wishes to charge a fee outside either of
these proposed ranges, it would continue to follow the existing process
for requesting written approval from the Departments to do so outlined
in 26 CFR 54.9816-8T(e)(2)(vii)(A) and (B), 29 CFR 2590.716-
8(e)(2)(vii)(A) and (B), and 45 CFR 149.510(e)(2)(vii)(A) and (B),
which the Departments do not propose to change in this rulemaking.
During calendar year 2023, certified IDR entities continue to incur
high administrative costs due to the volume of disputes and the
complexity in determining eligibility, as described in the December
2022 guidance.\76\ These proposed ranges reflect the significant
administrative burden, ongoing eligibility determination
challenges,\77\ and the Departments' desire to allow more flexibility
for certified IDR entities to determine a fee that best reflects their
operating costs. Given the wide variability of certified IDR entities'
operations, structures, staffing patterns, and expenses, it is the
Departments' position that the ranges should not overly restrict the
certified IDR entities' ability to set their fees commensurate with
their costs. Instead, broad ranges that allow certified IDR entities
flexibility to set their fees in accordance with their own
circumstances would allow them to remain financially viable and
encourage their continued participation in the Federal IDR process. The
Departments acknowledge that broadening the certified IDR entity fee
ranges could have some impact on the cost to parties to engage in the
Federal IDR process (discussed in section IV.D.2. of this preamble)
which could implicate access to the Federal IDR process. However,
access to the Federal IDR process is dependent on certified IDR
entities' voluntary participation in that process. Voluntary
participation by certified IDR entities is only possible if they are
able to set their fees within ranges necessary to cover their operating
expenses. If the Departments were to set fee ranges that could not
support the certified IDR entities' financial viability and certified
IDR entities declined to participate in the Federal IDR process
altogether, the goal of access would be impaired.\78\ Therefore, the
Departments have endeavored to judiciously balance access concerns with
certified IDR entities' interests and seek comment on the balance
proposed. In setting the certified IDR entity ranges for disputes
initiated on or after the later of the effective date of these rules or
on January 1, 2024, the Departments considered:
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\76\ See Centers for Medicare & Medicaid Services (December 23,
2022). Amendment to the Calendar Year 2023 Fee Guidance for the
Federal Independent Dispute Resolution Process under the No
Surprises Act: Change in Administrative Fee. <a href="https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/amended-cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf">https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/amended-cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf</a>.
\77\ Between April 15, 2022 and March 31, 2023, disputing
parties initiated 334,828 disputes through the Federal IDR portal.
During that time, non-initiating parties challenged the eligibility
of 122,781 disputes. Even if the non-initiating party does not
challenge eligibility of the dispute, the certified IDR entity must
review the dispute and confirm that it is eligible before the
dispute can proceed in the Federal IDR process. These reviews
involve complex eligibility determinations that require certified
IDR entities to expend considerable time and resources. Eligibility
challenges are described in the following documents: Centers for
Medicare & Medicaid Services (August 19, 2022). Federal Independent
Dispute Resolution Process Status Update. <a href="https://www.cms.gov/files/document/federal-idr-process-status-update-august-2022.pdf">https://www.cms.gov/files/document/federal-idr-process-status-update-august-2022.pdf</a> and
Centers for Medicare & Medicaid Services (April 27, 2023). Federal
Independent Dispute Resolution--Status Update. <a href="https://www.cms.gov/files/document/federal-idr-processstatus-update-april-2023.pdf">https://www.cms.gov/files/document/federal-idr-processstatus-update-april-2023.pdf</a>.
\78\ Indeed, during the early implementation of the Federal IDR
process, some certified IDR entities did temporarily halt their
operations before the Departments provided additional batching
guidance in August 2022, see: U.S. Department of Health and Human
Services, U.S. Department of Labor, and U.S. Department of the
Treasury (August 2022). Technical Assistance for Certified
Independent Dispute Resolution Entities. <a href="https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/Technical-Assistance-IDR-Entities-August-2022.pdf">https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/Technical-Assistance-IDR-Entities-August-2022.pdf</a>.
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<bullet> The anticipated time and resources needed for certified
IDR entities to make payment determinations meeting the requirements of
the statute, rules, and guidance;
<bullet> The anticipated time and resources needed for data
reporting;
<bullet> The anticipated time and resources needed for complying
with audit requirements;
<bullet> The anticipated volume of Federal IDR initiations and
payment determination quality assessments;
<bullet> The anticipated volume of Federal IDR initiations
ineligible for the Federal IDR process; and
<bullet> The level of complexity in determining the eligibility of
items and services for the Federal IDR process.
After reviewing these considerations, the Departments are of the
opinion that a 20 percent increase in the upper limit of the certified
IDR entity fee range for single determinations (from $200 to $840),
would provide certified IDR entities an appropriate amount of
flexibility in setting a fixed fee for single determinations, taking
into account the anticipated increase in operational cost. The
Departments relied on these same considerations to develop the proposed
25 percent increase in the upper limit of the certified IDR entity fee
range for batched determinations, but also took into account the TMA IV
opinion and order when proposing the range for batched determinations
and the associated tiered fee based on the number of line items. In
particular, the Departments have considered the impact of the TMA IV
opinion and order on the anticipated complexity of batched
determinations to inform the proposed increased base range of $268 to
$1,173 and proposed tiered fee range of $75 to $250 based on the number
of line items in a batched dispute. Section 9816(c)(3)(A) of the
Code,\79\ section 716(c)(3)(A) of the ERISA,\80\ and section
[[Page 65896]]
2799A-1(c)(3)(A) of the PHS Act \81\ direct the Departments to specify
criteria under which multiple qualified IDR items and services are
permitted to be considered jointly as part of a single determination by
a certified IDR entity for purposes of encouraging the efficiency
(including minimizing costs) of the Federal IDR process. These sections
further require that items and services may be considered as part of a
batched determination only if the items and services are furnished by
the same provider or facility; payment for the items and services are
made by the same group health plan or health insurance issuer; such
items and services are related to the treatment of a similar condition;
and the items and services were furnished during the 30-day period
following the date on which the first item or service included in the
batched determination was furnished, or during an alternative period as
determined by the Departments, for use in limited situations, such as
by the consent of the parties or in the case of low-volume items and
services, to encourage procedural efficiency and minimize health plan
and provider administrative costs.
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\79\ 26 U.S.C. 9816(c)(3)(A).
\80\ 26 U.S.C. 9816(c)(3)(A).
\81\ 42 U.S.C. 300gg-111(c)(3)(A).
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Since the TMA IV opinion and order vacated 26 CFR 54.9816-
8T(c)(3)(i)(C), 29 CFR 2590.716-8(c)(3)(i)(C), and 45 CFR
149.510(c)(3)(i)(C), which established standards for determining when
multiple items or services relate to ``the treatment of a similar
condition'' for the purpose of batched disputes,\82\ the certified IDR
entities may no longer rely on the regulatory guidance provided to
assist certified IDR entities when reviewing batched disputes.
Certified IDR entities must now only rely upon statutory language when
determining whether multiple items or services are related to the
treatment of a similar condition and are therefore appropriate to
batch.
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\82\ See Memorandum Opinion and Order, Tex. Med. Ass'n. v. U.S.
Dep't of Health & Hum. Servs, No. 6:23-cv-00059-JDK (E.D. Tex.
August 3, 2023). <a href="https://ecf.txed.uscourts.gov/doc1/175113317945">https://ecf.txed.uscourts.gov/doc1/175113317945</a>.
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As explained in the preamble to the October 2021 interim final
rules, the Departments originally adopted the batching standards in
those rules to avoid combinations of unrelated claims of 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 further intended to reduce redundant IDR proceedings and
streamline the certified IDR entities' decision-making processes. The
Departments anticipate that the change in batching parameters
introduced by the vacatur of 26 CFR 54.9816-8T(c)(3)(i)(C), 29 CFR
2590.716-8(c)(3)(i)(C), and 45 CFR 149.510(c)(3)(i)(C) will make
certified IDR entities' responsibilities and processes for eligibility
and payment determinations under the Federal IDR process more complex
and less certain. This unpredictability increases the systemic burden
for certified IDR entities in the administration of their duties. In
addition, the vacatur of 26 CFR 54.9816-8T(c)(3)(i)(C), 29 CFR
2590.716-8(c)(3)(i)(C), and 45 CFR 149.510(c)(3)(i)(C) will also likely
increase the number of items or services batched. Certified IDR
entities have indicated to the Departments that making determinations
on large batches of dissimilar items and services is particularly
complex and burdensome. Based on certified IDR entities' experiences
during the early stages of implementing the Federal IDR process, prior
to the Departments having provided guidance regarding the batching
parameters in August 2022,\83\ the Departments observed that confusion
related to the batching standards for the same or similar items or
services contributed to increased complexity in determining
eligibility, which added time and cost for certified IDR entities and
contributed to processing delays.\84\ The Departments anticipate that
the changes to batching standards will require certified IDR entities
to update their operations, processes, and systems, demand greater
staff resources, and increase the time needed to render eligibility
determinations, including determinations of whether items or services
may be submitted as a batch. Therefore, the proposal to increase the
fee range for batched determinations and apply a tiered fee for batched
disputes based on the number of line items would allow certified IDR
entities to be appropriately compensated and ensure that Federal IDR
process costs are clear to parties in advance of initiating the Federal
IDR process.
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\83\ See U.S. Department of Health and Human Services, U.S.
Department of Labor, and U.S. Department of the Treasury (August
2022). Technical Assistance for Certified Independent Dispute
Resolution Entities. <a href="https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/Technical-Assistance-IDR-Entities-August-2022.pdf">https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/Technical-Assistance-IDR-Entities-August-2022.pdf</a>.
\84\ Id.
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In finalizing the fee amounts, the Departments intend to take into
account any updated data or assumptions as applied to the factors
considered in this preamble to set the fee ranges.
The Departments do not propose to change the process for certified
IDR entities to set their fees.\85\ Certified IDR entities will
continue to be permitted to set their fees within the ranges proposed
in these proposed rules, if finalized. Under these proposed rules, a
certified IDR entity must receive the Departments' advance written
approval to modify its fixed fees more than once annually. If
requesting to set its fee more than once annually, the certified IDR
entity must submit to the Departments for approval: (1) the fixed fee
that the certified IDR entity is seeking to charge; (2) a description
that reasonably explains the circumstances that require a change to its
fee; and (3) a detailed description that reasonably explains how the
change to its fee will be used to mitigate the effects of these
circumstances. The Departments would use their discretion to determine
if the explanations included in the request demonstrate that the change
would ensure the certified IDR entity's financial viability and would
not impose on parties an undue barrier to accessing the Federal IDR
process. It is appropriate to permit certified IDR entities to change
their fees more than once annually, with advance approval from the
Departments, as some certified IDR entities may adopt more efficiencies
throughout the year that would allow them to charge a lower fee, or if
conditions of the Federal IDR process fluctuate throughout the year,
some certified IDR entities may need to increase their fees to cover
operating expenses.
---------------------------------------------------------------------------
\85\ 45 CFR 149.510(e)(2)(vii).
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The Departments seek comment on these proposals, including the
proposed fee ranges themselves. The Departments solicit comment on
whether in future years they should apply an inflationary adjustment
consideration, such as the CPI-U, to the considerations used to develop
the certified IDR entity fee ranges each year and set forth the
adjusted fee amount in guidance, rather than notice and comment
rulemaking. The Departments also seek comment on whether certified IDR
entities should be allowed to set their fees based on a structure other
than a fixed fee range for single disputes and tiered fees for batched
disputes within the ranges proposed in these rules. Specifically, the
Departments seek comment on whether certified IDR entities should have
flexibility to set a per line item fee or a per unique service code
fee. The Departments have considered that allowing a per line item fee
or a per
[[Page 65897]]
unique service code fee could better address the concern of
unpredictable batching practices imposing high burdens on certified IDR
entities. However, the Departments acknowledge that these pricing
structures for batching could decrease the accessibility of the Federal
IDR process for parties, particularly small providers. In addition, the
Departments seek comment on the proposed number of line items in each
additional batched tier. The Departments seek comment on whether the
tiers should be set at 10 line items, 50 line items, or a different
number than the proposed tiered increments of 25 line items. The
Departments acknowledge the need to strike the correct balance between
the line item increment and the amount of resources expended by the
certified IDR entities to review those line items. The Departments have
considered if increments of 25 line items or higher might impose too
great a burden on the certified IDR entities so as not to be
commensurate with the proposed tiered fee range available to them.
However, the Departments also acknowledge that setting the line item
increments lower than 25 line items would further impact the cost to
parties of submitting a dispute, and that the proposed tiered fee range
of $75 to $250 may not be appropriate at smaller line item increments.
The Departments seek comment on whether the tiered fee for batched
disputes should be set at a percentage of the certified IDR entity's
batched determination fee, similar to how the tiering for the 2023
calendar year were implemented, rather than a dollar value range. The
Departments also seek comment on whether to provide a fixed fee that
all certified IDR entities must charge beyond the proposed 25 line
items per additional 25 line items rather than permitting a range for
certified IDR entities to choose from. More specifically, the
Departments seek comment on whether certified IDR entities should be
permitted to set their batched determination fee between $268 and
$1,173 and then be permitted to charge only an additional fixed dollar
amount (for example, $125, $150, $200, etc.) per additional 25 line
items. The Departments seek comment on the appropriateness of setting a
fixed dollar tiered fee structure for batched disputes, since this
could impact the certified IDR entities' operational flexibility, and
would limit their ability to competitively price their fees. However,
the Departments are considering whether establishing a fixed dollar
tiered fee might mitigate the risk of one or a few certified IDR
entities pricing their tiered fee for batched disputes so low that they
become inundated with large batches and thus provide greater
consistency across certified IDR entities. The Departments are
considering if this alternate approach would provide more consistency
regarding the fees charged by different certified IDR entities and
avoid potentially overburdening IDR entities that select a low tiered
fee for batched disputes.
III. Severability
In the event that any portion of these proposed rules, if finalized
as proposed, is declared invalid, the Departments intend that the
various aspects of the administrative fee proposals and certified IDR
entity fee proposals, as finalized, be severable. For example, if a
court were to find unlawful all of the administrative fee proposals,
the Departments would still intend for the certified IDR entity fee
proposals to stand, and vice versa. As another example, if a court were
to find unlawful the proposals to establish both the administrative fee
and the certified IDR entity fee ranges more or less frequently than
annually, the Departments would still intend for the administrative fee
amount and certified IDR entity fee ranges to be (1) established
through notice and comment rulemaking and (2) established in the amount
and ranges as proposed in these proposed rules. Likewise, if a court
were to find unlawful the proposed administrative fee amount or
methodology or the certified IDR entity fee ranges or considerations
used to determine the fee ranges as proposed in these proposed rules,
the Departments would still intend for the administrative fee amount
and certified IDR entity ranges to be (1) established through notice
and comment rulemaking and (2) established more or less frequently than
annually.
Thus, the Departments propose at new paragraph 26 CFR 54.9816-
8(d)(3)(i), 29 CFR 2590.716-8(d)(3)(i), and 45 CFR 149.510(d)(3)(i)
that any provision of paragraph (d) or paragraphs (e)(2)(vii) through
(e)(2)(ix) held to be invalid or unenforceable as applied to any person
or circumstance shall be construed so as to continue to give the
maximum effect to the provision permitted by law, including as applied
to persons not similarly situated or to dissimilar circumstances,
unless such holding is that the provision of these paragraphs is
invalid and unenforceable in all circumstances, in which event the
provision shall be severable from the remainder of these paragraphs and
shall not affect the remainder thereof. The Departments further propose
at new paragraph 26 CFR 54.9816-8(d)(3)(ii), 29 CFR 2590.716-
8(d)(3)(ii), and 45 CFR 149.510(d)(3)(ii) that the provisions in
paragraphs (d) and (e)(2)(vii) through (ix) are intended to be
severable from each other.
The Departments are of the view that each of the proposals for the
administrative fee amount and the certified IDR entity fee ranges would
still function sensibly even if one or more of the proposals in these
proposed rules, as finalized, were found unlawful. For example, the
proposals to establish the administrative fee amount and certified IDR
entity fee ranges in notice and comment rulemaking would not depend on
either the lawfulness of the methodology used to determine the
administrative fee amount or the lawfulness of the considerations used
in determining the certified IDR entity fee ranges, or whether both
would be established on an annual basis or more or less frequently than
annually. The proposal to use notice and comment rulemaking to
establish the fees specifies only the method the Departments would use
and does not determine how frequently the fees would be established or
the methodology for the administrative fee amount or the considerations
used to determine the certified IDR entity fee ranges.
The Departments seek comment on this approach.
IV. Economic Impact and Paperwork Burden
A. Summary--Departments of Health and Human Services and Labor
These proposed rules would establish the administrative fee amount
and the certified IDR entity fee ranges in notice and comment
rulemaking, as well as propose the methodology for setting both fees.
The Departments have examined the effects of these proposed rules
as required by Executive Order 13563 (76 FR 3821, January 21, 2011,
Improving Regulation and Regulatory Review); Executive Order 12866 (58
FR 51735, October 4, 1993, Regulatory Planning and Review); Executive
Order 14094 entitled ``Modernizing Regulatory Review'' (April 6, 2023);
the Regulatory Flexibility Act (Pub. L. 96-354, enacted September 19,
1980, Pub. L. 96-354); section 1102(b) of the Social Security Act (42
U.S.C. 1102(b)); section 202 of the Unfunded Mandates Reform Act of
1995 (March 22, 1995, Pub. L. 104-4); and Executive Order 13132 (64 FR
43255, August 10, 1999, Federalism).
[[Page 65898]]
B. Executive Orders 12866, 13563, and 14094--Departments of Health and
Human Services and Labor
Executive Orders 12866, 13563, and 14094 direct Federal agencies to
assess all costs and benefits of available regulatory alternatives and
if regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety effects, distributive impacts, and equity).
Executive Order 14094 entitled ``Modernizing Regulatory Review''
(hereinafter, the Modernizing E.O.) amends section 3(f)(1) of Executive
Order 12866 (Regulatory Planning and Review). The amended section 3(f)
of Executive Order 12866 defines a ``significant regulatory action'' as
an action that is likely to result in a rule: (1) having an annual
effect on the economy of $200 million or more in any 1 year (adjusted
every 3 years by the Administrator of OMB's Office of Information and
Regulatory Affairs (OIRA) for changes in gross domestic product), or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, territorial, or tribal governments
or communities; (2) creating a serious inconsistency or otherwise
interfering with an action taken or planned by another agency; (3)
materially altering the budgetary impacts of entitlement grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or (4) raising legal or policy issues for which centralized
review would meaningfully further the President's priorities or the
principles set forth in this Executive Order, as specifically
authorized in a timely manner by the Administrator of OIRA in each
case.
A regulatory impact analysis (RIA) must be prepared for rules
deemed significant under section 3(f)(1) ($200 million or more in any 1
year). Although based on the Departments' estimates, OMB's OIRA has
determined these rules are not significant under section 3(f)(1), the
Departments have prepared an RIA that to the best of their ability
presents the costs and benefits of these rules. OMB has reviewed these
proposed regulations, and the Departments have provided the following
assessment of their impact.
C. Need for Regulatory Action--Departments of Health and Human Services
and Labor
The Departments propose to amend the certified IDR entity and
administrative fee provisions of the rules for the Federal IDR process
to set the administrative fee and the certified IDR entity fee ranges
in notice and comment rulemaking, as well as propose the methodology
for setting the administrative fee and the considerations for
developing the certified IDR entity fee ranges. The Departments are of
the view that these proposals would ensure that disputing and other
parties are sufficiently notified and provided an opportunity to
comment on the fees associated with the Federal IDR process.
D. Summary of Impacts and Accounting Table--Departments of Health and
Human Services and Labor
The expected benefits and costs of these proposed rules are
summarized in Table 1 and discussed in this section of the preamble. In
accordance with OMB Circular A-4, Table 1 depicts an accounting
statement summarizing the Departments' assessment of the benefits,
costs, and transfers associated with this regulatory action. The
Departments are unable to quantify all benefits and costs of these
proposed rules but have sought, where possible, to describe these non-
quantified impacts. The effects in Table 1 reflect non-quantified
impacts and estimated direct monetary costs resulting from the
provisions of these proposed rules.
Table 1--Accounting Table
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Accounting statement
----------------------------------------------------------------------------------------------------------------
Benefits:
----------------------------------------------------------------------------------------------------------------
Non-Quantified:
<bullet> Increased interested party transparency as a result of the proposals to establish the
administrative fee and certified IDR entity fee ranges in notice and comment rulemaking, as well as the
methodology for calculating the administrative fee amount and the considerations for developing the
certified IDR entity fee ranges............................................................................
----------------------------------------------------------------------------------------------------------------
Costs: Estimate Year dollar Discount rate Period
(million) (percent) covered
-------------------------------------------------------
Annualized.............................................. $0.09 2023 7 2023-2027
Monetized ($/Year)...................................... $0.08 2023 3 2023-2027
----------------------------------------------------------------------------------------------------------------
Quantified:
<bullet> Costs to interested parties of $438,543 to review and interpret these rules in 2023................
----------------------------------------------------------------------------------------------------------------
Transfers: Estimate Year dollar Discount rate Period
(million) (percent) Covered
-------------------------------------------------------
Annualized.............................................. $41.69 2023 7 2023-2027
Monetized ($/year)...................................... $42.55 2023 3 2023-2027
----------------------------------------------------------------------------------------------------------------
Quantified:
<bullet> Transfers from disputing parties to the Federal government of approximately $45 million annually
beginning in 2024 as a result of the proposal to set the administrative fee amount at $150 per party per
dispute initiated on or after the later of the effective date of these rules or January 1, 2024............
<bullet> Transfers from disputing parties to certified IDR entities of approximately $9 million annually
beginning in 2024 as a result of the proposal to set the certified IDR entity fee ranges at $200-$840 for
single determinations, $268-$1,173 for batched determinations, and an additional $75-$250 for each 25 line
items in excess of the first 25 line items.................................................................
----------------------------------------------------------------------------------------------------------------
[[Page 65899]]
1. Benefits
The primary benefit of this rulemaking would be to allow the
Federal IDR process to function through establishing the administrative
fee amount and certified IDR entity fee ranges in rulemaking and
establishing the amounts of these fees for disputes initiated on or
after the later of the effective date of these rules or January 1,
2024. In response to the opinion and order in TMA IV, these proposed
rules are necessary in order to set the administrative fee amount. The
primary non-quantifiable benefit of these proposed rules would be the
continuation of a functioning Federal IDR process, which helps to
protect consumers from surprise medical bills and helps providers to
receive compensation. Additional benefits specific to each Federal IDR
process fee type appear in the following sections.
a. Administrative Fee Amount and Methodology
The Departments are proposing to establish the amount of the
administrative fee in notice and comment rulemaking for disputes
initiated on or after the later of the effective date of these rules or
January 1, 2024, as well as the methodology for determining the
administrative fee. Utilizing notice and comment rulemaking would
increase transparency of the administrative fee setting process and
allow interested parties to provide feedback to the Departments prior
to the Departments setting the administrative fee amount. The
Departments seek comment on these assumptions.
b. Certified IDR Entity Fee Ranges
The Departments are proposing to establish the certified IDR entity
fee ranges for single and batched determinations, which include a
tiered fee range for batched determinations for disputes that exceed 25
dispute line items, in notice and comment rulemaking for disputes
initiated on or after the later of the effective date of these rules or
January 1, 2024. Utilizing notice and comment rulemaking to set the
appropriate ranges for certified IDR entity fees would increase
transparency for parties interested in the certified IDR entity fee
ranges and allow interested parties to identify in advance the impacts
of changing the certified IDR entity fee ranges. The Departments seek
comment on these assumptions.
2. Costs
a. Administrative Fee Amount and Methodology
The Departments are proposing to establish the amount of the
administrative fee in notice and comment rulemaking for disputes
initiated on or after the later of the effective date of these rules or
January 1, 2024, as well as proposing the methodology for setting the
administrative fee amount, in response to the opinion and order in TMA
IV and to ensure that disputing and other parties are sufficiently
notified and provided an opportunity to comment on the certified IDR
entity fee ranges. The Departments are also proposing the
administrative fee amount for disputes initiated on or after the later
of the effective date of these rules or January 1, 2024, at $150 per
party per dispute.
The current administrative fee is $50 per party per dispute.\86\
Based on Federal IDR process data from February through July 2023, as
discussed in section II.A. of this preamble, the Departments estimate
that approximately 225,000 disputes are closed per year. Therefore, if
the current administrative fee were to remain applicable, disputing
parties would pay approximately $22.5 million in administrative fees
annually (225,000 disputes x 2 parties per dispute x $50 per
party).\87\ As the Departments are now proposing an administrative fee
of $150 for disputes initiated on or after the later of the effective
date of these rules or January 1, 2024, the Departments estimate that
disputing parties would pay approximately $67.5 million in
administrative fees annually beginning in 2024 (225,000 disputes x 2
parties per dispute x $150 per party), assuming the number of disputes
remains stable year over year and the administrative fee amount is not
subsequently changed through notice and comment rulemaking. Therefore,
the costs associated with this proposal would be approximately $45
million ($67.5 million if this proposal is finalized -$22.5 million if
the status quo were to continue).
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\86\ As a result of the opinion and order in TMA IV, which
vacated the portion of the December 2022 guidance that increased the
administrative fee to $350 per party per dispute for disputes
initiated during calendar year 2023, the administrative fee amount
reverted to the administrative fee amount established in the October
2022 guidance. See Centers for Medicare & Medicaid Services (August
11, 2023). Federal Independent Dispute Resolution (IDR) Process
Administrative Fee FAQs. <a href="https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/no-surprises-act-independent-dispute-resolution-administrative-fee-frequently-asked-questions.pdf">https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/no-surprises-act-independent-dispute-resolution-administrative-fee-frequently-asked-questions.pdf</a>. Also see Centers for Medicare & Medicaid Services
(October 31, 2022). Calendar Year 2023 Fee Guidance for the Federal
Independent Dispute Resolution Process under the No Surprises Act.
<a href="https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf">https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf</a>.
\87\ The numbers in this analysis assume that all parties pay
the requisite administrative fee in all closed disputes.
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The Departments seek comment on these estimates and assumptions.
b. Certified IDR Entity Fee Ranges
The Departments are proposing to set the certified IDR entity fee
ranges for single and batched determinations, with a tiered fee range
for batched determination for disputes that exceed 25 line items, in
notice and comment rulemaking for disputes initiated on or after
January 1, 2024 in response to the opinion and order in TMA IV and to
ensure that disputing and other parties are sufficiently notified and
provided an opportunity to comment on the certified IDR entity fee
ranges. The proposed certified IDR entity fee range for single
determinations for disputes initiated on or after the later of
effective date of these rules or January 1, 2024, would be $200 to
$840. The proposed certified IDR entity fee range for batched
determinations for disputes initiated on or after the later of the
effective date of these rules or January 1, 2024 would be $268 to
$1,173. Further, the proposed tiered fee range for batched
determination for disputes initiated on or after the later of the
effective date of these rules or January 1, 2024 would be $75 to $250.
While the certified IDR entities are responsible for setting their fees
for single and batched determinations, the Departments acknowledge that
the proposed changes to the fee ranges may impact the cost to
participate in the Federal IDR process for the parties. The Departments
anticipate that the vacatur of batching standards by the Texas District
Court's opinion and order in TMA IV could result in initiating parties
submitting single and batched disputes in proportions similar to those
prior to the issuance of the August 2022 guidance, which interpreted
the standards for batching qualified IDR items or services. Based on
internal data prior to the establishment of the now vacated batching
criteria that was released in August 2022, approximately 70 percent of
disputes were single disputes and approximately 30 percent were batched
disputes.\88\ The Departments anticipate that, as a result of TMA IV,
initiating
[[Page 65900]]
parties will likely resume the batching practices they engaged in prior
to issuance of the August 2022 guidance, such as initiating a higher
proportion of batched disputes and including more items or services
within those batched disputes.
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\88\ The Departments estimate that currently approximately 80
percent of disputes are single disputes and 20 percent of disputes
are batched disputes.
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As discussed in section II.A. of this preamble, the Departments
estimate that approximately 225,000 disputes are closed annually.
Further, the Departments assume that certified IDR entities collect a
certified IDR entity fee on approximately 135,000 of those 225,000
closed disputes annually.\89\ Therefore, for the purposes of this
analysis, the Departments estimate that certified IDR entities would
collect certified IDR entity fees on approximately 94,500 single
disputes and 40,500 batched disputes closed annually (135,000 x 0.70
and 135,000 x 0.30, respectively). The Departments acknowledge that
each party must pay a certified IDR entity fee to the certified IDR
entity no later than the time that party submits its offer. However,
because the non-prevailing party is ultimately responsible for the full
certified IDR entity fee, which is retained by the certified IDR entity
for the IDR services it performed, it is the Departments' position that
providing a per-dispute calculation reasonably captures the overall
cost of the dispute without implicating false precision on the amount
of certified IDR fee costs that initiating and non-initiating parties
ultimately may incur.
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\89\ The Departments use the number of closed disputes for this
analysis, as the certified IDR entity fee is due from the parties at
the time the parties submit their offers, in accordance with 26 CFR
54.9816-8T(d)(1)(ii), 29 CFR 2590.716-8(d)(1)(ii), and 45 CFR
149.510(d)(1)(ii). Therefore, using the number of initiated disputes
for this analysis would be inappropriate as not all initiated
disputes proceed to the offer submission stage if, for example, they
are determined to be ineligible for the Federal IDR process.
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To develop a reasonable estimate for the certified IDR entity fee
amount for both single and batched disputes, the Departments assume
that the certified IDR entities would set single determination fixed
fees approximate to the median value of the proposed fee range and
would set batched determination fixed fees approximate to the 75th
quartile of the proposed fee range.\90\ Therefore, for the purposes of
this analysis, the Departments estimate that the average single
determination fixed fee (range $200-$840) would be approximately $520,
and that the average batched determination fixed fee (range $268-
$1,173) would be approximately $947. At an estimated cost of $520 per
single determination for approximately 94,500 single determinations
annually, the Departments estimate that single determinations would
cost disputing parties approximately $49,140,000 annually ($520 x
94,500). At an estimated cost of $947 per batched determination for
approximately 40,500 batched determinations annually, the Departments
estimate that batched determinations would cost disputing parties
approximately $38,353,500 annually ($947 x 40,500).
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\90\ Currently, the median of the calendar year 2023 certified
IDR entity fees is $549 for single determinations and $770 for
batched determinations, which are approximately the upper quartiles
of the 2023 certified IDR entity fee ranges for single
determinations ($200-$700) and batched determinations ($268-$938).
The Departments anticipate that, due to the uncertainty around
batching practices as a result of the TMA IV opinion and order, the
certified IDR entities will likely choose to increase their batched
determination fee. Therefore, using the 75th percentile of the
proposed fee range to calculate the cost of batched determinations
provides a reasonable approximation of the expected increase.
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Further, the Departments estimate that using the proposed tiered
fee range for batched determinations, certified IDR entities would set
and apply a fixed fee approximate to the median of the proposed range
($75-$250) for batched determinations based on the number of dispute
line items. The Departments estimate that certified IDR entities would
set their tiered fee at $163 on average. The Departments acknowledge
the uncertainty surrounding the number of line items that may be
submitted in batched disputes due to the TMA IV opinion. However, to
produce an estimate, and for the purposes of this analysis, the
Departments estimate that a subset of approximately 4,455 batched
determinations would potentially be subject to at least 2 applications
of the tiered fee ($163 x 2 = $326).\91\ As such, the Departments
estimate that this subset of approximately 4,455 batched determinations
exceeding 25 line items would cost disputing parties approximately
$1,452,330 annually ($326 x 4,455). In total, assuming the number of
disputes remains stable year over year, the Departments estimate the
parties would pay approximately $89 million in certified IDR entity
fees annually if these proposals are finalized as proposed ($49,140,000
for single determinations + $38,353,500 for batched determinations +
$1,452,330 for the subset of batched determinations subject to the
tiered fee).
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\91\ The Departments estimate that approximately 11 percent of
batched disputes submitted prior to the establishment of the
batching criteria released in August 2022 exceeded 25 dispute line
items.
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The calendar year 2023 certified IDR entity fee ranges for single
determinations and batched determinations are $200-$700 and $268-$938,
respectively. Certified IDR entities currently charge a median fixed
fee of $549 for single determinations and $770 for batched
determinations in 2023. As such, for approximately 108,000 single
determinations and 24,840 batched determinations annually,\92\ if
current certified IDR entity fixed fees remained applicable, the
Departments estimate that disputing parties would pay approximately
$59,292,000 for single determinations ($549 x 108,000) and $19,126,800
for batched determinations ($770 x 24,840). Current guidance permits
certified IDR entities to charge a batching percentage on batched
determinations based on the number of dispute line items.\93\ For the
purposes of this analysis, the Departments assume that a subset of
approximately 8 percent of batched determinations potentially subject
to the batched percentages would at least receive a 120 percent
increase from the median batched determination fixed fee ($770 x 1.20).
As such, the Departments estimate that disputing parties would pay
approximately $2 million for this subset of batched determinations
potentially subject to a batching percentage (2,160 x $924), resulting
in a total cost of approximately $80 million under the current calendar
year 2023 certified IDR entity fee structure ($59,292,000 for single
determinations + $19,126,800 for batched determinations + $2 million
for the subset of batched determinations subject to the tiered fee).
Therefore, taking into account the current costs to the parties
associated
[[Page 65901]]
with the current certified IDR entity fee structure, the total costs to
disputing parties associated with this proposal is approximately $9
million ($89 million if finalized as proposed-$80 million if the status
quo fee ranges were to continue).
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\92\ The Departments estimate that 80 percent of disputes are
single disputes and 20 percent are batched disputes (135,000 x 0.80
and 135,000 x 0.20, respectively). For the purpose of this analysis,
the Departments estimate that a subset of approximately 8 percent,
or 2,160 batched determinations would be subject to a batching
percentage (27,000 x 0.08).
\93\ Without the need to seek further approval, to account for
the differential in the workload of batched determinations, a
certified IDR entity may charge the following percentage of its
approved certified IDR entity batched determination fee (``batching
percentage'') for batched determinations, which are based on the
number of line items initially submitted in the batch:
<bullet> 2-20 line items: 100 percent of the approved batched
determination fee;
<bullet> 21-50 line items: 110 percent of the approved batched
determination fee;
<bullet> 51-80 line items: 120 percent of the approved batched
determination fee; and
<bullet> 81 line items or more: 130 percent of the approved
batched determination fee.
See Centers for Medicare & Medicaid Services (October 31, 2022).
Calendar Year 2023 Fee Guidance for the Federal Independent Dispute
Resolution Process under the No Surprises Act. <a href="https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf">https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf</a>.
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The Departments seek comments on these estimates and assumptions.
3. Uncertainties
It is unclear whether the Federal IDR process would experience the
same operating conditions, such as the number of disputes initiated,
future policy changes finalized after future notice and comment
rulemaking, and increased or decreased costs by the Departments to
carry out the Federal IDR process. Due to the need to take point-in-
time estimates of volume and expenditures for the purposes of
developing the analyses in these rules, there is inherent uncertainty
in the estimates in these analyses as the data are constantly changing.
It is difficult to project the impact on the administrative fee amount
charged to the parties if the Federal IDR process landscape changes.
Although the Departments have analyzed the Federal IDR process data
available to inform their projections, it is uncertain whether the
trends in this data will remain applicable. The Federal IDR process is
still in an early phase of implementation and has not yet achieved the
stabilization that would likely occur with long-term uptake of the
process. Initially, the Departments estimated that approximately 22,000
disputes would be submitted to the process each year; \94\ uptake of
the process, however, rapidly outpaced that estimate, as dispute
initiations have grown exponentially since implementation, and analysis
has revealed an estimated number closer to 340,000 annual initiated
disputes is currently more accurate. At the same time, the Departments
do not know what impact changes to the batching policy as a result of
the Texas District Court's opinion and order in TMA IV will have on the
number of disputes being initiated and the time that it will take
certified IDR entities to close those disputes.
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\94\ In the regulatory impact analysis of the October 2021
interim final rules, the Departments estimated that 17,333 disputes
involving non-air ambulance services and 4,899 disputes involving
air ambulance services would be submitted to the Federal IDR process
during the first year of implementation, totaling 22,232 anticipated
disputes.
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4. Regulatory Review Cost Estimation
If regulations impose administrative costs on entities, such as the
time needed to read and interpret rules, regulatory agencies should
estimate the total cost associated with regulatory review. Based on
comments received for the July 2021 interim final rules and October
2021 interim final rules, the Departments estimate that more than 2,100
entities will review these proposed rules, including 1,500 issuers, 205
third party administrators (TPAs), and at least 395 other interested
parties (for example, State insurance departments, State legislatures,
industry associations, advocacy organizations, and providers and
provider organizations). The Departments acknowledge that this
assumption may understate or overstate the number of entities that will
review these proposed rules.
Using the median hourly wage rate from the Bureau of Labor
Statistics for a Lawyer (Code 23-1011) to account for average labor
costs (including a 100 percent increase for the cost of fringe benefits
and other indirect costs), the Departments estimate that the cost of
reviewing these proposed rules would be $130.52 per hour.\95\ The
Departments estimate, based on an estimated rule length of
approximately 22,000 words and an average reading speed of 200 to 250
words per minute, that it would take each reviewing entity
approximately 1.6 hours to review these proposed rules, with an
associated cost of approximately $208.83 (1.6 hours x $130.52 per
hour). Therefore, the Departments estimate that the total burden to
review these proposed rules will be approximately 3,360 hours (2,100
reviewers x 1.6 hours per reviewer), with an associated cost of
approximately $438,543 (2,100 reviewers x $208.83 per reviewer).
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\95\ U.S. Bureau of Labor Statistics (May 1, 2022). May 2022
National Occupational Employment and Wage Estimates. <a href="https://www.bls.gov/oes/current/oes_nat.htm">https://www.bls.gov/oes/current/oes_nat.htm</a>.
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The Departments welcome comments on this approach to estimating the
total burden and cost for interested parties to read and interpret
these proposed rules.
E. Regulatory Alternatives--Departments of Health and Human Services
and Labor
In developing these proposed rules, the Departments considered
various alternative approaches.
1. Administrative Fee Amount and Methodology (26 CFR 54.9816-8(d)(2),
29 CFR 2590.716-8(d)(2), and 45 CFR 149.510(d)(2))
In TMA IV, the Texas District Court indicated that notice and
comment rulemaking is necessary to set the administrative fee amount.
In light of the Texas District Court opinion and order, as well as the
Departments' assessment regarding the practicability of determining the
administrative fee amount through notice and comment rulemaking, the
Departments are of the view that alternative approaches would lead to
unwarranted uncertainty. In addition, the Departments are of the view
that providing a description of the methodology used to calculate the
fee amount and proposing the administrative fee amount in these
proposed rules would increase transparency for the parties and provide
interested parties the opportunity to be included in the fee setting
process. The Departments considered that guidance has historically set
the administrative fee amount based on concerns that the requirement to
collect fees sufficient to fund the Federal IDR process, and the lead
time required to set the fee amount in notice and comment rulemaking,
could constrain the Departments' responsiveness to program needs and
artificially inflate the administrative fee amount due to the need to
ensure adequate funding of the process. However, in light of TMA IV,
the Departments are of the view that the increased transparency and
opportunity for interested parties to provide feedback on the
administrative fee methodology and amount would outweigh the potential
concern that the administrative fee might be artificially inflated by
the need to make conservative estimates to set the administrative fee
amount further in advance through notice and comment rulemaking.
2. Certified IDR Entity Fee Ranges (26 CFR 54.9816-8(e)(2), 29 CFR
2590.716-8(e)(2), and 45 CFR 149.510(e)(2))
The Departments considered maintaining the current policy that the
allowable ranges for certified IDR entity fees would be set in guidance
yearly instead of through notice and comment rulemaking. The
Departments considered whether continuing to set the certified IDR
entity fee ranges in guidance would preserve necessary flexibility for
the certified IDR entities to choose their fees within the allowable
ranges and submit those fees for approval to the Departments, and would
allow the Departments time to review and approve each certified IDR
entity's fees and publish them in advance of the year to which the fees
apply. The Departments balanced several considerations, including that
certified IDR entities are ultimately able to choose their own fee
within the ranges established in guidance by the Departments, and that
setting the fee
[[Page 65902]]
ranges through guidance was intended to create a competitive market
among the certified IDR entities to keep fees affordable, while
ensuring that those entities are able to cover their costs. Setting the
allowable ranges for certified IDR entity fees through notice and
comment rulemaking is appropriate because it would increase
transparency and provide an opportunity for the Departments to consider
comments from interested parties.
F. Paperwork Reduction Act
These proposed rules are not subject to the requirements of the
Paperwork Reduction Act of 1995,\96\ because they do not contain a
collection of information as defined in 44 U.S.C. 3502(3). Therefore,
clearance by OMB under the Paperwork Reduction Act of 1995 is not
required.
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\96\ 44 U.S.C. 3501 et seq.
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G. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601, et seq.)
requires agencies to analyze options for regulatory relief of small
entities and to prepare an initial regulatory flexibility analysis to
describe the impact of these proposed rules on small entities, unless
the head of the agency can certify that the rule would not have a
significant economic impact on a substantial number of small entities.
The RFA generally defines a ``small entity'' as (1) a proprietary firm
meeting the size standards of the Small Business Administration (SBA),
(2) a not-for-profit organization that is not dominant in its field, or
(3) a small government jurisdiction with a population of less than
50,000. States and individuals are not included in the definition of
``small entity.'' The Departments use a change in revenues of more than
3 to 5 percent as their measure of significant economic impact on a
substantial number of small entities. For purposes of the RFA, small
entities include small businesses, nonprofit organizations, and small
governmental jurisdictions.
The provisions in these proposed rules would affect plans (or their
TPAs),\97\ health insurance issuers offering group or individual health
insurance coverage, and providers, facilities, and providers of air
ambulance services.
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\97\ The Departments expect that most self-insured group health
plans will work with a TPA to meet the requirements.
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For purposes of analysis under the RFA,\98\ the Departments
consider an employee benefit plan with fewer than 100 participants to
be a small entity.\99\ The basis of this definition is found in section
104(a)(2) of ERISA,\100\ which permits the Secretary of Labor to
prescribe simplified annual reports for plans that cover fewer than 100
participants. Under section 104(a)(3),\101\ the Secretary may also
provide for exemptions or simplified annual reporting and disclosure
for welfare benefit plans. Under the authority of section
104(a)(3),\102\ the Department of Labor has previously issued
simplified reporting provisions and limited exemptions from reporting
and disclosure requirements for small plans, including unfunded or
insured welfare plans, which cover fewer than 100 participants and
satisfy certain requirements.\103\ While some large employers have
small plans, small plans are generally maintained by small employers.
Thus, the Departments are of the view that assessing the impact of
these proposed rules on small plans is an appropriate substitute for
evaluating the effect on small entities. The definition of a small
entity considered appropriate for this purpose differs, however, from a
definition of a small business based on size standards issued by the
SBA \104\ in accordance with the Small Business Act.\105\
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\98\ 5 U.S.C. 601, et seq.
\99\ The Departments consulted with the Small Business
Administration Office of Advocacy in making this determination, as
required by 5 U.S.C. 603(c) and 13 CFR 121.903(c) in a memo dated
June 4, 2020.
\100\ 29 U.S.C. 1024(a)(2).
\101\ 29 U.S.C. 1024(a)(3).
\102\ 29 U.S.C. 1024(a)(3).
\103\ 29 CFR 2520.104-20, 2520.104-21, 2520.104-41, 2520.104-46,
and 2520.104b-10.
\104\ 13 CFR 121.201 (2011).
\105\ 15 U.S.C. 631 et seq. (2011).
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In 2021, there were 1,500 issuers in the U.S. health insurance
market \106\ and 205 TPAs.\107\ Health insurance issuers are generally
classified under the North American Industry Classification System
(NAICS) code 524114 (Direct Health and Medical Insurance Carriers).
According to SBA size standards,\108\ entities with average annual
receipts of $47 million or less are considered small entities for this
NAICS code. The Departments expect that few, if any, insurance
companies underwriting health insurance policies fall below these size
thresholds. Based on data from Medical Loss Ratio (MLR) annual report
submissions for the 2021 MLR reporting year, approximately 87 out of
483 issuers of health insurance coverage nationwide had total premium
revenue of $47 million or less.\109\ However, it should be noted that
over 77 percent of these small companies belong to larger holding
groups, and many, if not all, of these small companies, are likely to
have non-health lines of business that would result in their revenues
exceeding $47 million. For the purposes of this analysis, the
Departments assume 8.6 percent, or 128 issuers, and 18 TPAs are
considered small entities.
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\106\ Centers for Medicare & Medicaid Services (2022). Medical
Loss Ratio Data and System Resources. <a href="https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr">https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr</a>.
\107\ Non-issuer TPAs based on data derived from the 2016
benefit year reinsurance program contributions.
\108\ United States Small Business Administration (March 17,
2023). Table of Size Standards. <a href="https://www.sba.gov/document/support-table-size-standards">https://www.sba.gov/document/support-table-size-standards</a>.
\109\ Centers for Medicare & Medicaid Services (2022). Medical
Loss Ratio Data and System Resources. <a href="https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr">https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr</a>.
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These proposed rules would also affect health care providers due to
the proposed requirements related to the certified IDR entity and
administrative fees. The Departments estimate that 140,270 physicians,
on average, bill on an out-of-network basis. The number of small
physicians is estimated based on the SBA's size standards. The size
standard applied for providers is NAICS 62111 (Offices of Physicians),
for which a business with less than $16 million in receipts is
considered to be small. By this standard, the Departments estimate that
47.2 percent or 66,207 physicians are considered small under the SBA's
size standards.\110\ These proposed rules are also expected to affect
non-physician providers who bill on an out-of-network basis. The
Departments lack data on the number of non-physician providers who
would be impacted.
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\110\ Based on data from the NAICS Association for NAICS code
62111, the Departments estimate the percent of businesses within the
industry of Offices of Physicians with less than $16 million in
annual sales. United States Census Bureau (May 2021). 2017 SUSB
Annual Data Tables by Establishment Industry. <a href="https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html">https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html</a>.
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The Departments do not have the same level of data for the air
ambulance subsector. In 2020, the total revenue of providers of air
ambulance services was estimated to be $4.2 billion, with 1,114 air
ambulance bases.\111\ This results in an industry average of $3.8
million per air ambulance base. Accordingly, the Departments are of the
view that most providers of air ambulance services are likely to be
small entities.
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\111\ ASPE Office of Health Policy (September 10, 2021). Air
Ambulance Use and Surprise Billing. <a href="https://aspe.hhs.gov/sites/default/files/2021-09/aspe-air-ambulance-ib-09-10-2021.pdf">https://aspe.hhs.gov/sites/default/files/2021-09/aspe-air-ambulance-ib-09-10-2021.pdf</a>.
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The proposed policies that would result in an increased burden to
small entities are described below.
The Departments propose to establish the administrative fee amount
in notice and comment rulemaking, and the
[[Page 65903]]
Departments propose that the administrative fee amount for disputes
initiated on or after of the effective date of these rules or on
January 1, 2024, would be $150 per party. The total annual burden
associated with this proposal is $45 million, split evenly between
plans and issuers and providers, facilities, and providers of air
ambulance services ($22.5 million each). For more details, please refer
to the Regulatory Impact Analysis in these proposed rules.
The Departments propose to establish the certified IDR entity fee
ranges in notice and comment rulemaking, and the Departments propose
that the ranges would be $200-$840 for single determinations and $268-
$1,173 for batched determinations, with a $75-$250 tiered fee range for
disputes that contain more than 25 line items. The total annual burden
associated with this proposal is approximately $9 million, 30 percent
($2.7 million) for providers, facilities, and providers of air
ambulance services \112\ and 70 percent ($6.3 million) for plans and
issuers.\113\ For more details, please refer to the Regulatory Impact
Analysis in these proposed rules.
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\112\ Historically, less than 1 percent of disputes for
emergency and non-emergency services have been submitted by group
health plans, health insurance issuers, or FEHB carriers. U.S.
Department of Health and Human Services, U.S. Department of Labor,
and U.S. Department of Treasury (n.d.) Initial Report on the Federal
Independent Dispute Resolution (IDR) Process, April 15-September 30,
2022. <a href="https://www.cms.gov/files/document/initial-report-idr-april-15-september-30-2022.pdf">https://www.cms.gov/files/document/initial-report-idr-april-15-september-30-2022.pdf</a>.
\113\ Data from the first full year of Federal IDR process
operations show that initiating parties prevail in approximately 70
percent of disputes. See Centers for Medicare & Medicaid Services
(April 27, 2023). Federal Independent Dispute Resolution Process--
Status Update. Therefore, as the prevailing party's certified IDR
entity fee is refunded per 26 CFR 54.9816-8T(d)(1)(ii), 29 CFR
2590.716-8(d)(1)(ii), and 45 CFR 149.510(d)(1)(ii), initiating
parties only pay the certified IDR entity fee for 30 percent of
disputes, while non-initiating parties pay for the other 70
percent.<a href="https://www.cms.gov/files/document/federal-idr-processstatus-update-april-2023.pdf">https://www.cms.gov/files/document/federal-idr-processstatus-update-april-2023.pdf</a>. Therefore, as the prevailing
party's certified IDR entity fee is refunded per 26 CFR 54.9816-
8T(d)(1)(ii), 29 CFR 2590.716-8(d)(1)(ii), and 45 CFR
149.510(d)(1)(ii), initiating parties only pay the certified IDR
entity fee for 30 percent of disputes, while non-initiating parties
pay for the other 70 percent.
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To estimate the proportion of the total costs that would fall on
small entities, the Departments assume that the proportion of costs is
proportional to the industry receipts. Applying data from the Census
Bureau of receipts by size for each industry, the Departments estimate
that small issuers would incur 0.2 percent of the total costs incurred
by all issuers and small providers would incur 42.4 percent of the
total cost by all providers.\114\
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\114\ United States Census Bureau (March 2020). 2017 SUSB Annual
Data Tables by Establishment Industry, Data by Enterprise Receipt
Size. <a href="https://www.census.gov/data/tables/2020/econ/susb/2020-susb-annual.html">https://www.census.gov/data/tables/2020/econ/susb/2020-susb-annual.html</a>.
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For the proposal to set the administrative fee amount at $150 per
party for disputes initiated on or after the later of the effective
date of these rules or January 1, 2024, the Departments estimate that
the total annual cost for small providers \115\ would be
$9,540,000.\116\ This results in a per-entity cost for small providers
of $144.09.\117\ The Departments estimate that the total annual cost
for small issuers and TPAs would be $45,000.\118\ This results in a
per-entity cost for small issuers and TPAs of $308.22.\119\
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\115\ Historically, less than 1 percent of disputes for
emergency and non-emergency services have been submitted by group
health plans, health insurance issuers, or FEHB carriers. U.S.
Department of Health and Human Services, U.S. Department of Labor,
and U.S. Department of Treasury (n.d.) Initial Report on the Federal
Independent Dispute Resolution (IDR) Process, April 15-September 30,
2022. <a href="https://www.cms.gov/files/document/initial-report-idr-april-15-september-30-2022.pdf">https://www.cms.gov/files/document/initial-report-idr-april-15-september-30-2022.pdf</a>.
\116\ The total annual cost for small providers is estimated as:
$22.5 million x 42.4 percent = $9,540,000.
\117\ The annual per-entity cost is estimated as: $9,540,000/
66,207 small providers = $144.09.
\118\ The total annual cost for small issuers and TPAs is
estimated as: $22.5 million x 0.2 percent = $45,000.
\119\ The annual per-entity cost for small issuers and TPAs is
estimated as: $45,000/(128 issuers + 18 TPAs) = $308.22.
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For the proposal to set the certified IDR entity fee ranges at
$200-$840 for single determinations and $268-$1,173 for batched
determinations, with a $75-$250 tiered fee range for disputes that
contain more than 25 line items, the Departments estimate that the
total annual cost for small providers \120\ would be $1,144,800.\121\
This results in a per-entity cost for small providers of $17.29.\122\
The Departments estimate that the total annual cost for small issuers
and TPAs would be $12,600.\123\ This results in a per-entity cost for
small issuers and TPAs of $86.30.\124\
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\120\ Historically, less than 1 percent of disputes for
emergency and non-emergency services have been submitted by group
health plans, health insurance issuers, or FEHB carriers. U.S.
Department of Health and Human Services, U.S. Department of Labor,
and U.S. Department of Treasury (n.d.) Initial Report on the Federal
Independent Dispute Resolution (IDR) Process, April 15-September 30,
2022. <a href="https://www.cms.gov/files/document/initial-report-idr-april-15-september-30-2022.pdf">https://www.cms.gov/files/document/initial-report-idr-april-15-september-30-2022.pdf</a>.
\121\ The total annual cost for small providers is estimated as:
$2,700,000 x 42.4 percent = $1,144,800.
\122\ The annual per-entity cost is estimated as: $1,144,800/
66,207 small providers = $17.29.
\123\ The total annual cost for small issuers and TPAs is
estimated as: $6,300,000 x 0.2 percent = $12,600.
\124\ The annual per-entity cost for small issuers and TPAs is
estimated as: $12,600/(128 issuers + 18 TPAs) = $86.30.
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Thus, the total estimated annual cost for small issuers and TPAs is
$57,600, and the total estimated annual cost for small providers is
$10,684,800. The per-entity annual cost for small issuers and TPAs is
$394.52, and the per-entity annual cost for small providers is $161.38.
The Departments seek comment on this analysis and seek information
on the number of small plans (or TPAs), issuers, or providers that may
be affected by the provisions in these proposed rules.
The number of impacted small health plans is not significant
compared to the total universe of 1.9 million small health plans.
Assuming that 340,000 disputes are submitted to the Federal IDR process
each year, 18 percent of small health plans would be impacted.\125\ The
number of impacted plans and issuers may be even smaller if some plans
and issuers have multiple disputes that are batched in the Federal IDR
process. By batching qualified IDR items and services, there may be a
reduction in the per-service cost of the Federal IDR process, and
potentially the aggregate administrative costs, because the Federal IDR
process is likely to exhibit at least some economies of scale.\126\
---------------------------------------------------------------------------
\125\ 340,000 claims/1,927,786 ERISA health plans = 18 percent
(Source: 2020 Medical Expenditure Panel Survey-Insurance Component).
\126\ Fielder, M., Adler, L., Ippolito, B. (March 16, 2021).
Recommendations for Implementing the No Surprises Act. U.S.C.-
Brookings Schaeffer on Health Policy. <a href="https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2021/03/16/recommendations-for-implementing-the-no-surprises-act/">https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2021/03/16/recommendations-for-implementing-the-no-surprises-act/</a>.
---------------------------------------------------------------------------
As its measure of significant economic impact on a substantial
number of small entities, HHS uses a change in revenue of more than 3
to 5 percent. The Departments are of the view that this threshold will
not be reached by the requirements in these proposed rules, given that
the annual per-entity cost of $413.70 per small issuer/TPA represents
0.02 percent of the average annual receipts for a small issuer/TPA and
the annual per-entity cost of $165.23 per small provider represents
0.01 percent of the average annual receipts for a small provider.\127\
Therefore, the Secretary has certified that these proposed rules will
not have
[[Page 65904]]
a significant economic impact on a substantial number of small
entities.
---------------------------------------------------------------------------
\127\ United States Census Bureau (March 2020). 2017 SUSB Annual
Data Tables by Establishment Industry, Data by Enterprise Receipt
Size. <a href="https://www.census.gov/data/tables/2020/econ/susb/2020-susb-annual.html">https://www.census.gov/data/tables/2020/econ/susb/2020-susb-annual.html</a>.
---------------------------------------------------------------------------
In addition, section 1102(b) of the Paperwork Reduction Act
requires the Departments to prepare a regulatory impact analysis if a
rule may have a significant impact on the operations of a substantial
number of small rural hospitals. This analysis must conform to the
provisions of section 603 of the RFA.\128\ For purposes of section
1102(b) of the Paperwork Reduction Act, the Departments define a small
rural hospital as a hospital that is located outside of a metropolitan
statistical area and has fewer than 100 beds. While these proposed
rules are not subject to section 1102 of the Paperwork Reduction Act,
the Departments have determined that these proposed rules will not
affect small rural hospitals. Therefore, the Secretary has certified
that these proposed rules will not have a significant impact on the
operations of a substantial number of small rural hospitals.
---------------------------------------------------------------------------
\128\ 5 U.S.C. 603.
---------------------------------------------------------------------------
H. Special Analyses--Department of the Treasury
Pursuant to the Memorandum of Agreement, Review of Treasury
Regulations under Executive Order 12866 (June 9, 2023), tax regulatory
actions issued by the IRS are not subject to the requirements of
section 6 of Executive Order 12866, as amended. Therefore, a regulatory
impact assessment is not required. Pursuant to section 7805(f) of the
Code,\129\ these regulations have been submitted to the Chief Counsel
for Advocacy of the Small Business Administration for comment on their
impact on small business.
---------------------------------------------------------------------------
\129\ 26 U.S.C. 7805(f).
---------------------------------------------------------------------------
I. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA)
\130\ requires that agencies assess anticipated costs and benefits and
take certain other actions before issuing a proposed rule or any final
rule for which a general notice of proposed rulemaking was published
that includes any Federal mandate that may result in expenditures in
any 1 year by State, local, or tribal governments, in the aggregate, or
by the private sector, of $100 million in 1995 dollars, updated
annually for inflation. That threshold is approximately $177 million in
2023. As discussed earlier in the RIA, plans, issuers, TPAs, and
providers, facilities, and providers of air ambulance services would
incur costs to comply with the provisions of these proposed rules. The
Departments estimate the combined impact on State, local, or tribal
governments and the private sector would not be above the threshold.
---------------------------------------------------------------------------
\130\ 2 U.S.C. 1511.
---------------------------------------------------------------------------
J. Federalism
Executive Order 13132 outlines the fundamental principles of
federalism. It requires adherence to specific criteria by Federal
agencies in formulating and implementing policies that have
``substantial direct effects'' on the States, the relationship between
the national government and States, or on the distribution of power and
responsibilities among the various levels of government. Federal
agencies issuing regulations that have these federalism implications
must consult with State and local officials and describe the extent of
their consultation and the nature of the concerns of State and local
officials in the preamble to these proposed rules.
The Departments do not anticipate that these proposed rules would
have federalism implications or limit the policy-making discretion of
the States in compliance with the requirement of Executive Order 13132.
State and local government health plans may be subject to the
Federal IDR process where a specified State law or All-Payer Model
Agreement does not apply. The No Surprises Act authorizes States to
enforce the new requirements, including those related to balance
billing, for issuers, providers, facilities, and providers of air
ambulance services, with HHS enforcing only in cases where the State
has notified HHS that the State does not have the authority to enforce
or is otherwise not enforcing, or HHS has made a determination that a
State has failed to substantially enforce the requirements. However, in
the Departments' view, the federalism implications of these proposed
rules are substantially mitigated because some States have their own
process for determining the total amount payable under a plan or
coverage for out-of-network emergency services and to out-of-network
providers for patient visits to in-network facilities for non-emergency
services. Where a State has a specified State law, the State law,
rather than the Federal IDR process, would apply.
In compliance with the requirement of Executive Order 13132 that
agencies examine closely any policies that may have federalism
implications or limit the policy making discretion of the States, the
Departments have engaged in efforts to consult with and work
cooperatively with affected States, including participating in
conference calls with and attending conferences of the National
Association of Insurance Commissioners and consulting with State
insurance officials on an individual basis.
While developing these rules, the Departments attempted to balance
the States' interests in regulating health insurance issuers with the
need to ensure market stability. By doing so, the Departments complied
with the requirements of Executive Order 13132.
Douglas W. O'Donnell,
Deputy Commissioner for Services and Enforcement, Internal Revenue
Service.
Lisa M. Gomez
Assistant Secretary, Employee Benefits Security Administration,
Department of Labor.
Xavier Becerra,
Secretary, Department of Health and Human Services.
List of Subjects
26 CFR Part 54
Excise taxes, Pensions, Reporting and recordkeeping requirements.
29 CFR Part 2590
Child support, Employee benefit plans, Health care, Health
insurance, Infants and children, Maternal and child health, Penalties,
Pensions, Privacy, Reporting and recordkeeping requirements.
45 CFR Part 149
Administrative practice and procedure, Health care, Health
insurance, Insurance companies, Penalties, Reporting, and recordkeeping
requirements.
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 54
Accordingly, the Department of the Treasury and the IRS proposes to
amend 26 CFR part 54 as follows:
PART 54--PENSION EXCISE TAXES
0
1. The authority citation for part 54 is amended by adding an entry for
Sec. 54.9816-8 in numerical order to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
* * * * *
Section 54.9816-8 also issued under 26 U.S.C. 9816.
* * * * *
0
2. Section 54.9816-8 is amended by revising paragraphs (a) through (e)
and the headings for paragraphs (f) and (g) to read as follows:
Sec. 54.9816-8 Independent dispute resolution process.
(a) Scope and definitions. For further guidance, see Sec. 54.9816-
8T(a).
[[Page 65905]]
(b) Determination of payment amount through open negotiation and
initiation of the Federal IDR process. For further guidance, see Sec.
54.9816-8T(b).
(c) Federal IDR process following initiation. For further guidance,
see Sec. 54.9816-8T(c).
(d) Costs of IDR process. (1) Certified IDR entity fee. For further
guidance, see Sec. 54.9816-8T(d)(1).
(2) Administrative fee. (i) For further guidance, see Sec.
54.9816-8T(d)(2)(i).
(ii) The administrative fee amount will be established through
notice and comment rulemaking in a manner such that the total
administrative fees paid for a year are estimated to be equal to the
projected amount of expenditures made by the Secretaries of the
Treasury, Labor, and Health and Human Services for the year in carrying
out the Federal IDR process. For disputes initiated on or after the
later of the effective date of Federal Independent Dispute Resolution
(IDR) Process Administrative Fee and Certified IDR Entity Fee Ranges
final rules or January 1, 2024, the administrative fee amount is $150
per party per dispute and will remain in effect until changed by
subsequent rulemaking.
(3) Severability. (i) Any provision of this paragraph (d) or
paragraphs (e)(2)(vii) through (ix) of this section held to be invalid
or unenforceable as applied to any person or circumstance shall be
construed so as to continue to give the maximum effect to the provision
permitted by law, including as applied to persons not similarly
situated or to dissimilar circumstances, unless such holding is that
the provision of these paragraphs is invalid and unenforceable in all
circumstances, in which event the provision shall be severable from the
remainder of these paragraphs and shall not affect the remainder
thereof.
(ii) The provisions in paragraphs (d) and (e)(2)(vii) through (ix)
of this section are intended to be severable from each other.
(e) Certification of IDR entity--(1) In general. For further
guidance see Sec. 54.9816-8T(e)(1).
(2) Requirements. (i) through (vi). For further guidance, see Sec.
54.8616-8T(e)(2)(i) through (vi).
(vii) Provide, on an annual basis, a fixed fee for single
determinations and separate fixed fees for batched determinations, as
well as additional fixed tiered fees for batched disputes, if
applicable, within the upper and lower limits for each, as established
by the Secretary in notice and comment rulemaking. The certified IDR
entity fee ranges established by the Secretary in rulemaking will
remain in effect until changed by subsequent rulemaking. The certified
IDR entity may not charge a fee outside the limits set forth in
rulemaking unless the certified IDR entity or IDR entity seeking
certification receives advance written approval from the Secretary to
charge a fixed fee beyond the upper or lower limits. The certified IDR
entity or IDR entity seeking certification may also seek advance
written approval from the Secretary to update its fees more frequently
than once annually. If a certified IDR entity or IDR entity seeking
certification submits to the Secretary a request to charge a fixed fee
beyond the upper or lower limits for fees as set forth in rulemaking,
the Secretary will use their discretion to determine if the information
submitted by a certified IDR entity or IDR entity seeking certification
demonstrates that the proposed change to the certified IDR entity fee
would ensure the certified IDR entity's financial viability and would
not impose on parties an undue barrier to accessing the Federal IDR
process. In order for the certified IDR entity to receive the
Secretary's written approval to charge a fee beyond the upper or lower
limits for fees as set forth in rulemaking, or to modify the fixed fees
more than once annually, it must satisfy the conditions in both
paragraphs (e)(2)(vii)(A) and (B) of this section, as follows:
(A) Submit, in writing, a proposal to the Secretary that includes:
(1) If requesting to charge a fixed fee beyond the upper or lower
limits for fees as set forth in rulemaking:
(i) The alternative fixed fee the certified IDR entity or IDR
entity seeking certification believes is appropriate for the certified
IDR entity or IDR entity seeking certification to charge;
(ii) A description of the circumstances that require the
alternative fee; and
(iii) A description that reasonably explains how the alternative
fixed fee will be used to mitigate the effects of those circumstances;
or
(2) If requesting to modify the fixed fee more than once annually:
(i) The fixed fee the certified IDR entity is seeking to charge;
(ii) A description of the circumstances that require a change to
its fixed fee; and
(iii) A detailed description that reasonably explains how the
change to its fixed fee will be used to mitigate the effects of those
circumstances.
(B) Receive from the Secretary, the Secretary of Health and Human
Services, and the Secretary of Labor written approval to charge the fee
documented in the certified IDR entity's or the IDR entity seeking
certification's written proposal.
(viii) For disputes initiated on or after the later of the
effective date of Federal Independent Dispute Resolution (IDR) Process
Administrative Fee and Certified IDR Entity Fee Ranges final rules or
January 1, 2024, certified IDR entities are permitted to charge a fixed
certified IDR entity fee for single determinations within the range of
$200 to $840, unless a fee not within that range is approved by the
Secretary pursuant to paragraphs (e)(2)(vii)(A) and (B) of this
section. The range for the certified IDR entity fee for single
determinations will remain in effect until changed by subsequent
rulemaking.
(ix) For disputes initiated on or after the later of the effective
date of Federal Independent Dispute Resolution (IDR) Process
Administrative Fee and Certified IDR Entity Fee Ranges final rules or
January 1, 2024, certified IDR entities are permitted to charge a fixed
certified IDR entity fee for batched determinations within the range of
$268 to $1,173, unless a fee not within that range is approved by the
Secretary pursuant to paragraphs (e)(2)(vii)(A) and (B) of this
section. As part of the batched determination fee, certified IDR
entities are permitted to charge an additional fixed tiered fee within
the range of $75 to $250 for every additional 25 line items within a
batched dispute, beginning with the 26th line item. The ranges for the
certified IDR entity fees for batched determinations will remain in
effect until changed by subsequent rulemaking.
(x) through (xiii). For further guidance, see Sec. 54.9816-
8T(e)(2)(x) through (xiii).
(f) Reporting of information relating to the Federal IDR process. *
* *
(g) Extension of time periods for extenuating circumstances. * * *
* * * * *
0
3. Section 54.9816-8T is amended by:
0
a. Revising paragraph (d)(2)(ii);
0
b. Adding paragraph (d)(3);
0
c. Revising paragraph (e)(2)(vii)
0
d. Redesignating paragraphs (e)(2)(viii) through (xi) as paragraphs
(e)(2)(x) through (xiii);
0
e. Adding new paragraphs (e)(2)(viii) and (ix).
The revisions and additions read as follows:
Sec. 54.9816-8T Independent dispute resolution process (temporary).
* * * * *
(d) * * *
(2) * * *
(ii) For further guidance, see Sec. 54.9816-8(d)(2)(ii).
(3) Severability. For further guidance, see Sec. 54.9816-8(d)(3).
[[Page 65906]]
(e) * * *
(2) * * *
(vii) and (ix). For further guidance, see Sec. 54.9816-
8(e)(2)(vii) and (ix).
* * * * *
DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Chapter XXV
For the reasons stated in the preamble, the Department of Labor
proposes to amend 29 CFR part 2590 as set forth below:
PART 2590--RULES AND REGULATIONS FOR GROUP HEALTH PLANS
0
4. The authority citation for part 2590 continues to read as follows:
Authority: 29 U.S.C. 1027, 1059, 1135, 1161-1168, 1169, 1181-
1183, 1181 note, 1185, 1185a, 1185b, 1191, 1191a, 1191b, and 1191c;
sec. 101(g), Pub. L. 104-191, 110 Stat. 1936; sec. 401(b), Pub. L.
105-200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 512(d), Pub. L.
110-343, 122 Stat. 3881; sec. 1001, 1201, and 1562(e), Pub. L. 111-
148, 124 Stat. 119, as amended by Pub. L. 111-152, 124 Stat. 1029;
Division M, Pub. L. 113-235, 128 Stat. 2130; Secretary of Labor's
Order 1-2011, 77 FR 1088 (Jan. 9, 2012).
0
5. Section 2590.716-8 is amended by:
0
a. Revising paragraph (d)(2)(ii);
0
b. Adding paragraph (d)(3);
0
c. Revising paragraph (e)(2)(vii);
0
d. Redesignating paragraphs (e)(2)(viii) through (xi) as paragraphs
(e)(2)(x) through (xiii); and
0
e. Adding new paragraphs (e)(2)(viii) and (ix).
The revisions and additions read as follows:
Sec. 2590.716-8 Independent dispute resolution process.
* * * * *
(d) * * *
(2) * * *
(ii) The administrative fee amount will be established through
notice and comment rulemaking in a manner such that the total
administrative fees paid for a year are estimated to be equal to the
projected amount of expenditures made by the Secretaries of the
Treasury, Labor, and Health and Human Services for the year in carrying
out the Federal IDR process. For disputes initiated on or after the
later of the effective date of Federal Independent Dispute Resolution
(IDR) Process Administrative Fee and Certified IDR Entity Fee Ranges
final rules or January 1, 2024, the administrative fee amount is $150
per party per dispute, which will remain in effect until changed by
subsequent rulemaking.
(3) Severability. (i) Any provision of this paragraph (d) or
paragraphs (e)(2)(vii) through (ix) of this section held to be invalid
or unenforceable as applied to any person or circumstance shall be
construed so as to continue to give the maximum effect to the provision
permitted by law, including as applied to persons not similarly
situated or to dissimilar circumstances, unless such holding is that
the provision of these paragraphs is invalid and unenforceable in all
circumstances, in which event the provision shall be severable from the
remainder of these paragraphs and shall not affect the remainder
thereof.
(ii) The provisions in paragraphs (d)(2) and (e)(2)(vii), (viii),
and (ix) of this section are intended to be severable from each other.
(e) * * *
(2) * * *
(vii) Provide, on an annual basis, a fixed fee for single
determinations and separate fixed fees for batched determinations, as
well as additional fixed tiered fees for batched disputes, if
applicable, within the upper and lower limits for each, as established
by the Secretary in notice and comment rulemaking. The certified IDR
entity fee ranges established by the Secretary in rulemaking will
remain in effect until changed by subsequent rulemaking. The certified
IDR entity may not charge a fee outside the limits set forth in
rulemaking unless the certified IDR entity or IDR entity seeking
certification receives advance written approval from the Secretary to
charge a fixed fee beyond the upper or lower limits. The certified IDR
entity or IDR entity seeking certification may also seek advance
written approval from the Secretary to update its fees more frequently
than once annually. If a certified IDR entity or IDR entity seeking
certification submits to the Secretary a request to charge a fixed fee
beyond the upper or lower limited for fees set forth in rulemaking, the
Secretary will use their discretion to determine if the information
submitted by the certified IDR entity or entity seeking certification
demonstrates that the proposed change to the certified IDR entity fee
would ensure the certified IDR entity's financial viability and would
not impose on parties an undue barrier accessing the Federal IDR
process. In order for the certified IDR entity to receive the
Secretary's written approval to charge a fee beyond the upper or lower
limits for fees as set forth in rulemaking, or to modify the fixed fees
more than once annually, it must satisfy the conditions in both
paragraphs (e)(2)(vii)(A) and (B) of this section, as follows:
(A) Submit, in writing, a proposal to the Secretary that includes:
(1) If requesting to charge a fixed fee beyond the upper or lower
limits for fees as set forth in rulemaking:
(i) The alternative fixed fee the certified IDR entity or IDR
entity seeking certification believes is appropriate for the certified
IDR entity or IDR entity seeking certification to charge;
(ii) A description of the circumstances that require the
alternative fee; and
(iii) A description that reasonably explains how the alternative
fixed fee will be used to mitigate the effects of those circumstances;
or
(2) If requesting to modify the fixed fee more than once annually:
(i) The fixed fee the certified IDR entity is seeking to charge;
(ii) A description of the circumstances that require a change to
its fixed fee; and
(iii) A detailed description that reasonably explains how the
change to its fixed fee will be used to mitigate the effects of those
circumstances.
(B) Receive from the Secretary, the Secretary of the Treasury, and
the Secretary of Health and Human Services, written approval to charge
the fee documented in the certified IDR entity's or the IDR entity
seeking certification's written proposal.
(viii) For disputes initiated on or after the later of the
effective date of Federal Independent Dispute Resolution (IDR) Process
Administrative Fee and Certified IDR Entity Fee Ranges final rules or
January 1, 2024, certified IDR entities are permitted to charge a fixed
certified IDR entity fee for single determinations within the range of
$200 to $840, unless a fee not within that range is approved by the
Secretary pursuant to paragraphs (e)(2)(vii)(A) and (B) of this
section. The range for the certified IDR entity fee for single
determinations will remain in effect until changed by subsequent
rulemaking.
(ix) For disputes initiated on or after the later of the effective
date of Federal Independent Dispute Resolution (IDR) Process
Administrative Fee and Certified IDR Entity Fee Ranges final rules or
January 1, 2024, certified IDR entities are permitted to charge a fixed
certified IDR entity fee for batched determinations within the range of
$268 to $1,173, unless a fee not within that range is approved by the
Secretary pursuant to paragraphs (e)(2)(vii)(A) and (B) of this
section. As part of the batched determination fee, certified IDR
entities are permitted to charge an additional fixed tiered fee within
the range of $75 to $250 for every additional
[[Page 65907]]
25 line items within a batched dispute, beginning with the 26th line
item. The ranges for the certified IDR entity fees for batched
determinations will remain in effect until changed by subsequent
rulemaking.
* * * * *
For the reasons stated in the preamble, the Department of Health
and Human Services proposes to amend 45 CFR part 149 as set forth
below:
PART 149--SURPRISE BILLING AND TRANSPARENCY REQUIREMENTS
0
6. The authority citation for part 149 continues to read as follows:
Authority: 42 U.S.C. 300gg-92 and 300gg-111 through 300gg-139,
as amended.
0
7. Section 149.510 is amended by:
0
a. Revising paragraph (d)(2)(ii);
0
b. Adding paragraph (d)(3);
0
c. Revising paragraph (e)(2)(vii);
0
d. Redesignating paragraphs (e)(2)(viii) through (xi) as paragraphs
(e)(2)(x) through (xiii); and
0
e. Adding new paragraphs (e)(2)(viii) and (ix).
The revisions and additions read as follows:
Sec. 149.510 Independent dispute resolution process.
* * * * *
(d) * * *
(2) * * *
(ii) The administrative fee amount will be established through
notice and comment rulemaking in a manner such that the total
administrative fees paid for a year are estimated to be equal to the
projected amount of expenditures made by the Secretaries of the
Treasury, Labor, and Health and Human Services for the year in carrying
out the Federal IDR process. For disputes initiated on or after the
later of the effective date of Federal Independent Dispute Resolution
(IDR) Process Administrative Fee and Certified IDR Entity Fee Ranges
final rules or January 1, 2024, the administrative fee amount is $150
per party per dispute, which will remain in effect until changed by
subsequent rulemaking.
(3) Severability. (i) Any provision of this paragraph (d) or
paragraphs (e)(2)(vii) through (ix) of this section held to be invalid
or unenforceable as applied to any person or circumstance shall be
construed so as to continue to give the maximum effect to the provision
permitted by law, including as applied to persons not similarly
situated or to dissimilar circumstances, unless such holding is that
the provision of these paragraphs is invalid and unenforceable in all
circumstances, in which event the provision shall be severable from the
remainder of these paragraphs and shall not affect the remainder
thereof.
(ii) The provisions in this paragraph (d) and paragraphs
(e)(2)(vii) through (ix) of this section are intended to be severable
from each other.
(e) * * *
(2) * * *
(vii) Provide, on an annual basis, a fixed fee for single
determinations and a separate fixed fee for batched determinations, as
well as an additional fixed tiered fee for batched disputes, if
applicable, within the upper and lower limits for each, as established
by the Secretary in notice and comment rulemaking. The certified IDR
entity fee ranges established by the Secretary in rulemaking will
remain in effect until changed by subsequent rulemaking. The certified
IDR entity may not charge a fee outside the limits set forth in
rulemaking unless the certified IDR entity or IDR entity seeking
certification receives advance written approval from the Secretary to
charge a fixed fee beyond the upper or lower limits. The certified IDR
entity or IDR entity seeking certification may also seek advance
written approval from the Secretary to update its fees more frequently
than once annually. If a certified IDR entity or IDR entity seeking
certification submits to the Secretary a request to charge a fixed fee
beyond the upper or lower limits for fees as set forth in rulemaking,
the Secretary will use their discretion to determine if the information
submitted by a certified IDR entity or IDR entity seeking certification
demonstrates that the proposed change to the certified IDR entity fee
would ensure the certified IDR entity's financial viability and would
not impose on parties an undue barrier to accessing the Federal IDR
process. In order for the certified IDR entity to receive the
Secretary's written approval to charge a fee beyond the upper or lower
limits for fees as set forth in rulemaking, or to modify the fixed fees
more than once annually, it must satisfy the conditions in both
paragraphs (e)(2)(vii)(A) and (B) of this section, as follows:
(A) Submit, in writing, a proposal to the Secretary that includes:
(1) If requesting to charge a fixed fee beyond the upper or lower
limits for fees as set forth in rulemaking:
(i) The alternative fixed fee the certified IDR entity or IDR
entity seeking certification believes is appropriate for the certified
IDR entity or IDR entity seeking certification to charge;
(ii) A description of the circumstances that require the
alternative fee; and
(iii) A description that reasonably explains how the alternative
fixed fee will be used to mitigate the effects of those circumstances;
or
(2) If requesting to modify the fixed fee more than once annually:
(i) The fixed fee the certified IDR entity is seeking to charge;
(ii) A description of the circumstances that require a change to
its fixed fee; and
(iii) A detailed description that reasonably explains how the
change to its fixed fee will be used to mitigate the effects of those
circumstances.
(B) Receive from the Secretary, the Secretary of the Treasury, and
the Secretary of Labor, written approval to charge the fee documented
in the certified IDR entity's or the IDR entity seeking certification's
written proposal.
(viii) For disputes initiated on or after the later of the
effective date of Federal Independent Dispute Resolution (IDR) Process
Administrative Fee and Certified IDR Entity Fee Ranges final rules or
January 1, 2024, certified IDR entities are permitted to charge a fixed
certified IDR entity fee for single determinations within the range of
$200 to $840, unless a fee not within that range is approved by the
Secretary, pursuant to paragraphs (e)(2)(vii)(A) and (B) of this
section. The range for the certified IDR entity fee for single
determinations will remain in effect until changed by subsequent
rulemaking.
(ix) For disputes initiated on or after the later of the effective
date of Federal Independent Dispute Resolution (IDR) Process
Administrative Fee and Certified IDR Entity Fee Ranges final rules or
January 1, 2024, certified IDR entities are permitted to charge a fixed
certified IDR entity fee for batched determinations within the range of
$268 to $1,173, unless a fee not within that range is approved by the
Secretary pursuant to paragraphs (e)(2)(vii)(A) and (B) of this
section. As part of the batched determination fee, certified IDR
entities are permitted to charge an additional fixed tiered fee within
the range of $75 to $250 for every additional 25 line items within a
batched dispute, beginning with the 26th line item. The ranges for the
certified IDR entity fees for batched determinations will remain in
effect until changed by subsequent rulemaking.
* * * * *
[FR Doc. 2023-20799 Filed 9-21-23; 4:15 pm]
BILLING CODE 4830-01-P; 4510-29-P; 4120-01-P
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</html>Indexed from Federal Register on September 26, 2023.
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.