[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 [www.gpo.gov]
[FR Doc No: 2023-20799]


-----------------------------------------------------------------------

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.

-----------------------------------------------------------------------

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 https://www.regulations.gov/.

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 https://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-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: https://www.regulations.gov. Follow the search 
instructions on that website to view public comments. The Departments 
will not post on Regulations.gov public comments that make threats to 
individuals or institutions or suggest that the commenter will take 
actions to harm an individual. The Departments continue to encourage 
individuals not to submit duplicative comments. The Departments will 
post acceptable comments from multiple unique commenters even if the 
content is identical or nearly identical to other comments.

I. Background

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

    On December 27, 2020, the 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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \15\ 42 U.S.C. 300gg-131-139.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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:
---------------------------------------------------------------------------

    \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. https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Technical-Guidance-CY2022-Fee-Guidance-Federal-Independent-Dispute-Resolution-Process-NSA.pdf.
    \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. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.
---------------------------------------------------------------------------

    <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.
---------------------------------------------------------------------------

    \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. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/amended-cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.
    \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. https://www.cms.gov/files/document/idre-eligibility-support-guidance-11212022-final-updated.pdf.
---------------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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). 
https://ecf.txed.uscourts.gov/doc1/175113317945.
    \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. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/amended-cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.
    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \56\ Centers for Medicare & Medicaid Services (August 11, 2023). 
Federal Independent Dispute Resolution (IDR) Process Administrative 
Fee FAQs. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/no-surprises-act-independent-dispute-resolution-administrative-fee-frequently-asked-questions.pdf.
---------------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/amended-cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.
    \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). https://ecf.txed.uscourts.gov/doc1/175113317945.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

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

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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:
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    <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
---------------------------------------------------------------------------

    \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. https://www.cms.gov/files/document/idre-eligibility-support-guidance-11212022-final-updated.pdf.
---------------------------------------------------------------------------

    <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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.
    \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. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.
---------------------------------------------------------------------------

    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:
---------------------------------------------------------------------------

    \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. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/amended-cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.
    \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. https://www.cms.gov/files/document/federal-idr-process-status-update-august-2022.pdf and 
Centers for Medicare & Medicaid Services (April 27, 2023). Federal 
Independent Dispute Resolution--Status Update. https://www.cms.gov/files/document/federal-idr-processstatus-update-april-2023.pdf.
    \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. https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/Technical-Assistance-IDR-Entities-August-2022.pdf.
---------------------------------------------------------------------------

    <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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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). https://ecf.txed.uscourts.gov/doc1/175113317945.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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. https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/Technical-Assistance-IDR-Entities-August-2022.pdf.
    \84\ Id.
---------------------------------------------------------------------------

    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).
---------------------------------------------------------------------------

    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).
---------------------------------------------------------------------------

    \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. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/no-surprises-act-independent-dispute-resolution-administrative-fee-frequently-asked-questions.pdf. 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. 
https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.
    \87\ The numbers in this analysis assume that all parties pay 
the requisite administrative fee in all closed disputes.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \88\ The Departments estimate that currently approximately 80 
percent of disputes are single disputes and 20 percent of disputes 
are batched disputes.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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).
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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).
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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).
---------------------------------------------------------------------------

    \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. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

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).
---------------------------------------------------------------------------

    \95\ U.S. Bureau of Labor Statistics (May 1, 2022). May 2022 
National Occupational Employment and Wage Estimates. https://www.bls.gov/oes/current/oes_nat.htm.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \96\ 44 U.S.C. 3501 et seq.
---------------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \97\ The Departments expect that most self-insured group health 
plans will work with a TPA to meet the requirements.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \106\ Centers for Medicare & Medicaid Services (2022). Medical 
Loss Ratio Data and System Resources. https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.
    \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. https://www.sba.gov/document/support-table-size-standards.
    \109\ Centers for Medicare & Medicaid Services (2022). Medical 
Loss Ratio Data and System Resources. https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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. https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \111\ ASPE Office of Health Policy (September 10, 2021). Air 
Ambulance Use and Surprise Billing. https://aspe.hhs.gov/sites/default/files/2021-09/aspe-air-ambulance-ib-09-10-2021.pdf.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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. https://www.cms.gov/files/document/initial-report-idr-april-15-september-30-2022.pdf.
    \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.https://www.cms.gov/files/document/federal-idr-processstatus-update-april-2023.pdf. 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.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \114\ United States Census Bureau (March 2020). 2017 SUSB Annual 
Data Tables by Establishment Industry, Data by Enterprise Receipt 
Size. https://www.census.gov/data/tables/2020/econ/susb/2020-susb-annual.html.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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. https://www.cms.gov/files/document/initial-report-idr-april-15-september-30-2022.pdf.
    \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.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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. https://www.cms.gov/files/document/initial-report-idr-april-15-september-30-2022.pdf.
    \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.
---------------------------------------------------------------------------

    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. https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2021/03/16/recommendations-for-implementing-the-no-surprises-act/.
---------------------------------------------------------------------------

    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. https://www.census.gov/data/tables/2020/econ/susb/2020-susb-annual.html.
---------------------------------------------------------------------------

    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