28790 Federal Register / Vol. 77, No. 95 / Wednesday, May 16, 2012 / Rules and Regulations 

2. On page 74884, third column, fifth 

full paragraph— 

A. In line 14, remove the words ‘‘then 

current.’’ 

B. In line 15, revise the phrase 

‘‘premium credit’’ to read ‘‘rebate.’’ 

IV. Waiver of Proposed Rulemaking 

and Delay in Effective Date 

We ordinarily publish a notice of 

proposed rulemaking in the Federal 

Register to provide a period for public 

comment before the provisions of a rule 

take effect in accordance with section 

553(b) of the Administrative Procedure 

Act (APA) (5 U.S.C. 553(b)), and section 

553(d) of the APA ordinarily requires a 

30-day delay in effective date of final 

rules after the date of their publication 

in the Federal Register. These 

requirements may be waived, however, 

if an agency finds for good cause that 

the delay is impracticable, unnecessary, 

or contrary to the public interest, and 

the agency incorporates a statement of 

the findings and its reasons in the rule 

issued. 

In this case, we believe that it is 

unnecessary to provide for a public 

comment period or to delay 

implementing these corrections, as they 

clarify provisions of a final rule that has 

been subjected to notice and comment 

procedures and do not make any 

substantive changes to it. 

List of Subjects in 45 CFR Part 158 

Administrative practice and 

procedure, Claims, Health care, Health 

insurance, Health plans, Penalties, 

Reporting and recordkeeping 

requirements. 

Accordingly, 45 CFR part 158 is 

corrected by making the following 

correcting amendments: 

PART 158—ISSUER USE OF PREMIUM 

REVENUE: REPORTING AND REBATE 

REQUIREMENTS 

■ 1. The authority citation for part 158 

continues to read as follows: 

Authority: Sec. 2718 of the Public Health 

Service Act (42 U.S.C. 300gg–18, as 

amended). 

■ 2. Amend § 158.103 as follows: 

■ A. Remove the definition for ‘‘MultiState blended rate.’’ 

■ B. Add a new definition for ‘‘Blended 

rate’’ in alphabetical order. 

The addition reads as follows: 

§ 158.103 Definitions. 

* * * * * 

Blended rate means a single rate 

charged for health insurance coverage 

provided to a single employer through 

two or more of an issuer’s affiliated 

companies for employees in one or more 

States. 

* * * * * 

■ 3. Amend § 158.120 by revising 

paragraphs (d)(1) and (d)(2) to read as 

follows: 

§ 158.120 Aggregate reporting. 

* * * * * 

(d) * * * 

(1) For individual market business 

sold through an association or trust, the 

experience of the issuer must be 

included in the State report for the issue 

State of the certificate of coverage. 

(2) For employer business issued 

through a group trust or multiple 

employer welfare association (MEWA), 

the experience of the issuer must be 

included in the State report for the State 

where the employer (if sold through a 

trust) or the MEWA (if the MEWA is the 

policyholder) has its principal place of 

business. 

* * * * * 

§ 158.130 [Amended] 

■ 4. In § 158.130(b)(3) remove the words 

‘‘paid or received’’ and add the word 

‘‘incurred’’ in their place. 

■ 5. Amend § 158.140 by revising 

paragraph (a) introductory text and 

paragraph (a)(5) to read as follows: 

§ 158.140 Reimbursement for clinical 

services provided to enrollees. 

(a) General requirements. The report 

required in § 158.110 must include 

direct claims paid to or received by 

providers, including under capitation 

contracts with physicians, whose 

services are covered by the policy for 

clinical services or supplies covered by 

the policy. In addition, the report must 

include claim reserves associated with 

claims incurred during the MLR 

reporting year, the change in contract 

reserves, reserves for contingent benefits 

and the medical claim portion of 

lawsuits, and any incurred experience 

rating refunds. Reimbursement for 

clinical services, as defined in this 

section, is referred to as ‘‘incurred 

claims.’’ All components of and 

adjustments to incurred claims, with the 

exception of contract reserves, must be 

calculated based on claims incurred 

only during the MLR reporting year and 

paid through March 31st of the 

following year. Contract reserves must 

be calculated as of December 31st of the 

applicable year. 

* * * * * 

(5) Incurred claims must include 

incurred experience rating refunds and 

exclude rebates paid as required by 

§ 158.240 based upon prior MLR 

reporting year experience. 

* * * * * 

§ 158.150 [Amended] 

■ 6. Amend § 158.150 as follows: 

■ A. In paragraph (b)(2)(i)(A)(1), remove 

‘‘section 3606’’ and add in its place 

‘‘section 3502.’’ 

■ B. In paragraph (c)(14), remove the 

reference ‘‘paragraph (c) of this section’’ 

and add in its place the reference 

‘‘paragraph (a) or (b) of this section.’’ 

■ 7. Amend § 158.232 by revising 

paragraph (c)(1)(i) to read as follows: 

§ 158.232 Calculating the credibility 

adjustment. 

* * * * * 

(c) * * * 

(1) * * * 

(i) The per person deductible for a 

policy that covers a subscriber and the 

subscriber’s dependents shall be the 

lesser of: The sum of the deductible 

applicable to each of the individual 

family members; or the overall family 

deductible for the subscriber and 

subscriber’s family, divided by two 

(regardless of the total number of 

individuals covered through the 

subscriber). 

* * * * * 

Dated: May 10, 2012. 

Jennifer Cannistra, 

Executive Secretary to the Department. 

[FR Doc. 2012–11773 Filed 5–15–12; 8:45 am] 

BILLING CODE 4120–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

45 CFR Part 158 

[CMS–9998–F] 

RIN 0938–AR41 

Medical Loss Ratio Requirements 

Under the Patient Protection and 

Affordable Care Act 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Final rule. 

SUMMARY: This final rule amends the 

regulations implementing medical loss 

ratio (MLR) standards for health 

insurance issuers under the Public 

Health Service Act in order to establish 

notice requirements for issuers in the 

group and individual markets that meet 

or exceed the applicable MLR standard 

in the 2011 MLR reporting year. 

DATES: Effective date. This rule is 

effective on June 15, 2012. 

Applicability date. The amendments 

to part 158 generally apply beginning 


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Federal Register / Vol. 77, No. 95 / Wednesday, May 16, 2012 / Rules and Regulations 28791 

July 1, 2012, to health insurance issuers 

offering group or individual health 

insurance coverage. 

FOR FURTHER INFORMATION CONTACT: 

Carol Jimenez, (301) 492–4457. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Patient Protection and Affordable 

Care Act (Pub. L. 111–148) was enacted 

on March 23, 2010; the Health Care and 

Education Reconciliation Act (Pub. L. 

111–152) was enacted on March 30, 

2010. In this preamble, we refer to the 

two statutes collectively as the 

Affordable Care Act. The Affordable 

Care Act reorganizes, amends, and adds 

to the provisions of Part A of title XXVII 

of the Public Health Service Act (PHS 

Act) relating to group health plans and 

health insurance issuers in the group 

and individual markets. 

A request for information relating to 

the medical loss ratio (MLR) provisions 

of section 2718 of the PHS Act was 

published in the Federal Register on 

April 14, 2010 (75 FR 19297). On 

December 1, 2010, the Department of 

Health and Human Services (HHS) 

published an interim final rule (75 FR 

74864) with a 60-day public comment 

period, entitled ‘‘Health Insurance 

Issuers Implementing Medical Loss 

Ratio (MLR) Requirements Under the 

Patient Protection and Affordable Care 

Act,’’ that added a new 45 CFR part 158. 

A technical correction to the interim 

final rule was issued on December 30, 

2010 (75 FR 82277). 

On December 7, 2011, the Centers for 

Medicare & Medicaid Services (CMS) 

published an interim final rule (76 FR 

76596) with a 60-day public comment 

period entitled, ‘‘Medical Loss Ratio 

Rebate Requirements for Non-Federal 

Governmental Plans,’’ establishing rules 

governing the distribution of rebates by 

health insurance issuers in group 

markets for non-Federal governmental 

plans. Also on December 7, 2011, CMS 

published a final rule (76 FR 76574) 

with a 30-day public comment period, 

entitled ‘‘Medical Loss Ratio 

Requirements Under the Patient 

Protection and Affordable Care Act,’’ 

that addressed the treatment of ‘‘minimed’’ and expatriate policies under the 

MLR regulations for years after 2011; 

modified the way the regulations treat 

International Statistical Classification of 

Diseases and Related Health Problems, 

10th Revision (ICD–10) conversion 

costs; changed the rules on deducting 

community benefit expenditures; and 

revised the rules governing the 

distribution of rebates by issuers in 

group markets. 

In the December 7, 2011 final rule 

with comment period, we noted that the 

notice requirements finalized in the rule 

only applied to issuers that owed 

rebates as a result of not meeting the 

applicable MLR standard. Consequently, 

policyholders and subscribers of issuers 

meeting or exceeding the MLR standard 

would not receive MLR information, an 

important tool to increase transparency 

to consumers. In the rule, we noted that 

extending a notice requirement to such 

cases would serve the policy goal of 

greater transparency in how premium 

dollars are used, and provide an 

additional incentive for issuers that 

already met the minimum standard to 

achieve the highest MLR possible. We 

therefore solicited comments on 

whether an issuer that meets or exceeds 

the MLR standard for the applicable 

MLR reporting year should send a 

notice to policyholders and subscribers 

with information about the MLR 

standard and its own MLR, as a 

measurement of issuer performance. We 

also solicited comments on whether it 

would be useful to include information 

in the notices about the issuer’s prior 

year MLR in addition to the current year 

MLR. We noted that this approach 

would allow enrollees to determine if 

the issuer was doing a better or worse 

job of efficiently using premium 

revenue than in the prior year. 

Based on the comments received and 

weighing consumer transparency and 

competition gains with burden on 

issuers, this final rule establishes a 

simple, straightforward notice 

requirement for health insurance issuers 

that meet or exceed the MLR standards 

established by the Affordable Care Act, 

but only requires the notice for the 2011 

MLR reporting year, the first year that 

the MLR rules are in effect, and does not 

require issuers to include information 

about the current or prior year MLR. 

The notice will direct enrollees to the 

HHS Web site for specific information 

about issuers’ MLRs. 

II. Analysis of and Responses to Public 

Comments 

We received 56 public comments on 

the December 7, 2011 final rule with 

comment period. Commenters included 

consumer and patient advocacy 

organizations, insurance regulators, 

health insurance issuers, business 

advocacy organizations, provider 

groups, an actuarial professional group, 

and others. In addition, we received 11 

public comments in response to the 

draft MLR Notices and Instructions 

contained in the MLR Paperwork 

Reduction Act (PRA) package (CMS– 

10418) posted on February 16, 2012. 

Commenters consisted of consumer 

groups, health insurance issuers, an 

issuer trade association, and a business 

trade association. Several of these 

commenters recommended technical 

corrections to the draft notices and 

instructions. We note that their 

comments will be addressed through the 

PRA process. In addition, commenters 

recommended several amendments to 

the December 1, 2010 interim final rule 

that were beyond the scope of this final 

rulemaking; therefore, we are not 

making changes in this final rule based 

on these comments. In this final rule, 

we only address the public comments 

received on the following issues: (1) 

Whether a notice requirement should 

apply to issuers that meet or exceed the 

applicable MLR standards in a 

particular MLR reporting year; and (2) 

whether MLR notices should include 

information on an issuer’s prior year 

MLR. The comments received are 

summarized below with our responses. 

Comments: We received comments 

that both support and oppose expanding 

the notice to issuers that do not owe 

rebates because they meet or exceed the 

MLR standards. Commenters who 

opposed expanding the notice rules 

generally claimed that requiring issuers 

that do not owe rebates to provide an 

MLR notice would impose a burden on 

issuers that meet the MLR requirement 

and provide little value to consumers. 

Specifically, issuers, an issuer trade 

association, and a business advocacy 

organization stated that MLR data 

would confuse or mislead consumers 

who may misinterpret the information 

or who may mistakenly believe they are 

owed a rebate. Commenters in support 

of expanding the notice rules, such as 

consumer and patient advocacy 

organizations, stated that expanding the 

notice rules would increase health plan 

transparency and ensure that every 

enrollee receives information about the 

meaning of the MLR, rather than only 

those owed a rebate. 

We also received several comments 

on the question of whether all MLR 

notices should include the issuer’s MLR 

from the prior MLR reporting year. 

Issuers and trade associations opposed 

this requirement, noting that an issuer’s 

MLR from the prior MLR reporting year 

is not necessarily a reliable indicator of 

health plan performance. These 

commenters stated that numerous 

factors other than health plan efficiency, 

such as variation in incurred claims, 

premium revenue, and adjustments, 

affect issuers’ year-to-year MLRs and 

that consumers may be misled when 

comparing MLRs for multiple years. 

Several commenters noted that MLR 

information will be publicly available 

on the HHS Web site and suggested that 

CMS maintain historical data so that 

consumers may monitor changes in 


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28792 Federal Register / Vol. 77, No. 95 / Wednesday, May 16, 2012 / Rules and Regulations 

1Section 2718(a) of the PHS Act provides that 

‘‘The Secretary shall make reports [concerning an 

issuer’s MLR and its components] received under 

this section available to the public on the Internet 

Web site of the Department of Health and Human 

Services.’’ In addition, section 1103(b) of the 

Affordable Care Act provides that the Federal 

health care reform insurance Web portal created by 

the Secretary under section 1103 to present 

information relating to affordable coverage options 

shall, among other things, ‘‘require the inclusion of 

information on the percentage of total premium 

revenue expended on nonclinical costs (as reported 

under section 2718(a) of the Public Health Service 

Act).’’ 

issuers’ MLR over time. In contrast, 

consumer and patient advocacy 

organizations expressed support for 

including an issuer’s prior year MLR, 

noting that it would help consumers to 

better use the MLR information when 

making plan selections and better 

understand how premium dollars are 

spent by health insurers. They indicated 

that consumers could benefit from more 

detailed information and that the notice 

should include specific information that 

explains how premium dollars are being 

spent, not just whether the MLR was 

being met. 

Response: Expanding the notice of 

MLR information to all issuers would 

further the goals of improving 

transparency of health insurance 

markets, supporting more informed 

purchase decisions, and promoting 

competition and efficiency. At the same 

time, we appreciate the concerns about 

administrative costs. Further, we 

recognize that under the Affordable Care 

Act, issuers’ MLR information will be 

available on the HHS Web site, 

HealthCare.gov, providing an efficient 

method of public disclosure.1

In light of these considerations and 

after further review and consideration of 

the costs and benefits of different notice 

alternatives, we are adding a new 45 

CFR 158.251 that establishes a basic 

notice requirement for issuers in the 

group and individual markets that meet 

or exceed the applicable MLR standard. 

This new notice will use standard 

language to inform policyholders and 

subscribers of group health plans, and 

subscribers in the individual market, 

that the issuer has met the minimum 

MLR standards established by the 

Affordable Care Act, but it will not 

include the issuer’s MLR for the current 

or prior reporting year or other specific 

measures of issuer performance. Instead, 

the notice will help educate consumers 

about the MLR measures and direct 

them to the HHS Web site, 

HealthCare.gov, for information about 

issuers’ actual MLRs. Additionally, 

under this final rule, issuers will only 

need to produce this notice for the 2011 

MLR reporting year, when consumer 

knowledge of the MLR is low and the 

greatest benefit can be achieved by 

providing enrollees with educational 

information. By leveraging existing 

Federal information resources while 

ensuring adequate notice to enrollees in 

the first year of applicability, we believe 

this new notice requirement balances 

issuers’ interest in administrative 

efficiency and consumers’ interest in 

health plan transparency. 

This notice rule will ensure that all 

consumers, not just those owed a rebate, 

are informed whether their issuer meets 

the minimum MLR standards 

established by the Affordable Care Act. 

It will provide greater transparency to 

consumers regarding how their 

premium dollars are used, promote 

informed decision-making in the 

purchase of health insurance, and 

ensure that efficiency in the use of 

premium dollars is properly valued by 

consumers. Notifying consumers of the 

MLR standards will also reduce 

confusion as to why certain individuals 

receive rebates, while others, such as 

coworkers or family members with 

different insurance plans, do not. 

Finally, the distribution of MLR notices 

to consumers with the HHS Web site, 

HealthCare.gov, will promote a more 

competitive market by creating an 

incentive for issuers to spend as high a 

percentage of premium dollars on health 

care and quality improvement as 

possible, rather than spending just 

enough to avoid paying rebates. 

III. Provisions of the Final Rule 

In paragraph (a)(1) of new § 158.251 of 

this final rule, we set forth the general 

requirement that an issuer whose MLR 

meets or exceeds the applicable MLR 

standard required by § 158.210 or 

§ 158.211 must provide each 

policyholder and subscriber of a group 

health plan, and each subscriber in the 

individual market, a notice of MLR 

information. The required language for 

the notice is specified in paragraph 

(a)(4). This notice requirement applies 

only for the 2011 MLR reporting year. 

In paragraph (a)(2), we generally align 

the timing of this new notice with the 

timing specified in § 158.240(d) for 

providing any rebates that are due and 

the accompanying notice of rebates. We 

specify that the MLR notice must be 

provided with the first plan document 

(for example, open enrollment 

materials) that is provided to enrollees 

on or after July 1, 2012. 

In paragraph (a)(3), we direct that the 

notice be prominently displayed in 

clear, conspicuous 14-point bold type 

on the front of the plan document, 

insurance policy or certificate, or as a 

separate notice. The MLR notice may be 

included in the same mailing as other 

mailed notices. Further, we specify that 

the notice may be provided 

electronically, consistent with the 

policy for providing the summary of 

benefits and coverage under section 

2715 of the PHS Act. 

In paragraph (b), we specify certain 

exceptions to the MLR notice 

requirement. We are not requiring 

health insurance issuers that sell plans 

with total annual benefit limits of 

$250,000 or less (‘‘mini-med’’ plans) or 

expatriate policies, as described in 

§ 158.120(d)(3) and (d)(4), respectively, 

to provide MLR notices to policyholders 

and subscribers if they meet or exceed 

the applicable MLR standard. As 

discussed in the preamble to the 

December 7, 2011 final rule with 

comment period, issuers of mini-med 

and expatriate policies will use a 

separate methodology for calculating the 

MLR numerator for reporting and rebate 

purposes and are subject to separate 

notice rules. We note that issuers of 

mini-med and expatriate plans must 

continue to provide notice of rebates, if 

any, to current group health plan 

policyholders and subscribers, and to 

subscribers in the individual market, as 

provided under § 158.250. 

In addition, we are not requiring 

issuers whose experience is noncredible, as defined in § 158.230(c)(3) 

and determined in accordance with 

§ 158.231, to provide MLR notices to 

policyholders and subscribers. An 

issuer that has fewer than 1,000 covered 

life-years does not have sufficiently 

credible data to determine whether the 

MLR standard has been met and thus, 

under § 158.230(d), is presumed to meet 

or exceed the applicable minimum MLR 

standard. Because non-credible issuers 

do not have an MLR to report, the MLR 

notice requirement in this final rule 

does not apply. 

Finally, we note that issuers of 

student health insurance coverage are 

not required to provide the MLR notices 

under this final rule, because the MLR 

reporting and rebate requirements of 45 

CFR part 158 generally apply for such 

experience beginning January 1, 2013. 

IV. Collection of Information 

Requirements 

This final rule establishes a 

notification requirement. Although 

third-party disclosures (for example, 

notification requirements) are generally 

subject to the Paperwork Reduction Act 

of 1995 (PRA), the implementing 

regulations at 5 CFR 1320.3(c)(2) 

include an exclusion for ‘‘information 

originally supplied by the Federal 

government to the recipient for the 

purpose of disclosure to the public.’’ 

Because the notification will be 


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Federal Register / Vol. 77, No. 95 / Wednesday, May 16, 2012 / Rules and Regulations 28793 

provided by the Federal government, 

and does not contain text that must be 

customized, this exclusion applies. 

V. Regulatory Impact Analysis 

A. Summary 

This final rule amends the regulations 

implementing MLR standards for health 

insurance issuers under section 2718 of 

the Public Health Service Act in order 

to establish notice requirements for 

issuers in the group and individual 

markets that meet or exceed the 

applicable MLR standard in the 2011 

MLR reporting year. 

CMS developed this rule to 

accomplish its intended benefits in the 

most economically efficient manner 

possible. We have examined the effects 

of this rule as required by Executive 

Order 13563 (76 FR 3821, January 21, 

2011), Executive Order 12866 (58 FR 

51735, September 1993, Regulatory 

Planning and Review), the Regulatory 

Flexibility Act (RFA) (September 19, 

1980, Pub. L. 96–354), section 1102(b) of 

the Social Security Act, the Unfunded 

Mandates Reform Act of 1995 (Pub. L. 

104–4), Executive Order 13132 on 

Federalism, and the Congressional 

Review Act (5 U.S.C. 804(2)). In 

accordance with the Office of 

Management and Budget (OMB) 

Circular A–4, CMS has quantified the 

benefits, costs, and transfers where 

possible and provided a qualitative 

discussion of some of the benefits, costs, 

and transfers that may stem from this 

final rule. 

B. Executive Orders 13563 and 12866 

Executive Order 12866 (58 FR 51735) 

directs 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 13563 (76 FR 

3821, January 21, 2011) is supplemental 

to and reaffirms the principles, 

structures, and definitions governing 

regulatory review as established in 

Executive Order 12866. 

Section 3(f) of Executive Order 12866 

defines a ‘‘significant regulatory action’’ 

as an action that is likely to result in a 

final rule—(1) having an annual effect 

on the economy of $100 million or more 

in any 1 year, or adversely and 

materially affecting a sector of the 

economy, productivity, competition, 

jobs, the environment, public health or 

safety, or State, local or tribal 

governments or communities (also 

referred to as ‘‘economically 

significant’’); (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 novel legal or 

policy issues arising out of legal 

mandates, the President’s priorities, or 

the principles set forth in the Executive 

Order. 

A regulatory impact analysis (RIA) 

must be prepared for major rules with 

economically significant effects ($100 

million or more in any 1 year), and a 

‘‘significant’’ regulatory action is subject 

to review by OMB. As discussed below, 

CMS has concluded that this rule is not 

likely to have an economic impact of 

$100 million or more in any 1 year, and 

therefore does not meet the definition of 

a ‘‘significant rule’’ under Executive 

Order 12866. Nevertheless, CMS has 

provided an assessment of the potential 

costs, benefits, and transfers associated 

with this final rule. Accordingly, OMB 

has reviewed this final rule pursuant to 

the Executive Order. 

1. Need for Regulatory Action 

On December 7, 2011, CMS published 

a final rule (76 FR 76574) that invited 

comment on whether the MLR notice 

requirement finalized in that rule 

should apply not only to issuers that 

owe rebates but also to issuers that meet 

or exceed the applicable MLR standard 

and therefore do not owe rebates. For 

the reasons discussed above and in 

section V.B.3.a. below, and based on 

public comments we received, this final 

rule establishes a basic, one-time notice 

requirement for issuers in the group and 

individual markets that meet or exceed 

the applicable MLR standard in the 

2011 MLR reporting year. This approach 

is consistent with Executive Order 

13563, which directs agencies to 

‘‘identify and consider regulatory 

approaches that reduce burdens and 

maintain flexibility and freedom of 

choice for the public. These approaches 

include * * * disclosure requirements 

as well as provision of information to 

the public in a form that is clear and 

intelligible.’’ 

2. Summary of Impacts 

In accordance with OMB Circular A– 

4, Table 1 below depicts an accounting 

statement summarizing CMS’s 

assessment of the benefits, costs, and 

transfers associated with this regulatory 

action. The RIA is limited to 2012 when 

the notice for the 2011 MLR reporting 

year will be provided. 

CMS anticipates that the provisions of 

this final rule will help ensure greater 

transparency for consumers regarding 

how their premium dollars are used, 

educate consumers about the MLR 

standards established by the Affordable 

Care Act, and provide an incentive for 

issuers to maximize the percentage of 

premium dollars they spend on health 

care and activities that improve health 

care quality, promoting greater 

efficiency in health insurance markets. 

Issuers that meet or exceed the 

applicable MLR standards will incur 

administrative costs related to providing 

the notices to policyholders and 

subscribers. In accordance with 

Executive Order 12866, CMS believes 

that the benefits of this regulatory action 

justify the costs. 

TABLE 1—ACCOUNTING TABLE

Benefits 

Qualitative: 

* Greater transparency regarding how premium dollars are used by issuers. 

* Incentive for issuers to maximize the percentage of premium dollars they spend on health care and activities that improve health care 

quality. 

* Improved information to assist consumers in making plan choices. 

Costs and transfers Low 

estimate 

Medium 

estimate 

High 

estimate 

Year 

dollar 

Period 

covered 

Annualized Monetized ($millions/year) ........................................................................ $2.8 $2.9 $3.0 2012 2012 


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28794 Federal Register / Vol. 77, No. 95 / Wednesday, May 16, 2012 / Rules and Regulations 

2 If a company’s premiums and reserve ratios for 

its health insurance products equals 95 percent or 

more of their total business for both the current and 

prior reporting years, a company files its annual 

statement using the Health Blank. Otherwise, a 

company files the annual statement associated with 

the type of license held in its domiciliary State, for 

example, the Life, Property & Casualty, or Fraternal 

Blank. 

3Comprehensive major medical coverage sold to 

associations and trusts has been included in 

individual comprehensive major medical coverage 

for purposes of the RIA. CMS’s estimates exclude 

Medigap coverage, which in the NAIC data is 

reported separately from comprehensive major 

medical coverage offered in the individual and 

group markets, and which is not subject to the MLR 

requirements under 45 CFR part 158. 

4For details, see final rule with comment period, 

entitled ‘‘Medical Loss Ratio Requirements Under 

the Patient Protection and Affordable Care Act, 

published on December 7, 2011 (76 FR 76574). 

3. Anticipated Benefits, Costs, and 

Transfers 

This final rule extends a notice 

requirement to issuers in the group and 

individual markets that meet or exceed 

the applicable MLR standard in the 

2011 MLR reporting year. The notice 

must use standard language specified in 

this final rule. Issuers may provide the 

notice with other plan documents or 

through electronic transmittal, as 

permitted for the summary of benefits 

and coverage under section 2715 of the 

PHS Act. 

a. Benefits 

The MLR notices will ensure that 

consumers are informed whether their 

issuer’s coverage meets or exceeds the 

applicable minimum MLR thresholds 

established by the Affordable Care Act. 

Accordingly, the notices will provide 

greater transparency to consumers and 

may help to reduce consumers’ 

confusion regarding why they did not 

receive a rebate. The MLR notices will 

also provide consumers with 

educational information in the first year 

of applicability when consumer 

knowledge of the MLR is low. 

Additionally, the notices will inform 

enrollees of the HHS Web site where 

they can find issuers’ actual MLRs and 

compare MLR information across 

issuers and over years. This will provide 

an incentive to issuers to spend as high 

a percentage of premium dollars on 

health care and quality improvement as 

possible, rather than just enough to 

avoid paying rebates. Finally, notice of 

MLR information will assist individuals 

in comparing plans and making plan 

choices. We believe that such 

information disclosure will result in a 

more efficient, competitive market. 

b. Costs and Transfers 

Issuers that meet or exceed the 

applicable MLR standard will incur the 

administrative cost of preparing and 

mailing the notices. It is estimated that 

these costs will total approximately $3 

million in 2012. 

4. Overview of Data Sources, Methods, 

and Limitations 

On December 1, 2010, we published 

an interim final rule (75 FR 74864) with 

a 60-day public comment period. In that 

rule, we indicated that the most 

complete source of data on the number 

of licensed entities offering fully 

insured, private comprehensive major 

medical coverage in the individual and 

group markets is the National 

Association of Insurance 

Commissioners’ (NAIC) Annual 

Financial Statements and Policy 

Experience Exhibits database. These 

data contain multiple years of 

information on issuers’ revenues, 

expenses, and enrollment, collected on 

various NAIC financial exhibits 

(commonly referred to as ‘‘Blanks’’) 

including Supplemental Health Care 

Exhibits (SHCEs) that issuers submit to 

State insurance regulators through the 

NAIC. The NAIC has four different 

Blanks for different types of issuers: 

Health; Life; Property & Casualty; and 

Fraternal issuers.2

In the December 1, 2010 interim final 

rule, our analysis relied on 2009 data 

from the NAIC database. A total of 618 

issuers offering comprehensive major 

medical coverage filed annual financial 

statements in 2009, with the Health and 

Life Blank filers accounting for 

approximately 99 percent of all 

comprehensive major medical 

premiums earned. For this reason, we 

restricted our analysis to Health and 

Life Blank companies. Comprehensive 

major medical coverage 3—including 

coverage offered in the individual and 

group markets subject to this final 

rule—accounted for approximately 47.8 

percent of all Accident and Health 

(A&H) premiums in 2009. Although the 

NAIC data represent the best available 

data source with which to estimate 

impacts of the MLR rule, the data 

contain certain limitations; we 

developed imputation methods to 

account for these limitations, and we 

made several additional data edits that 

led us to exclude 176 companies from 

the analysis. We used the remaining 442 

companies to estimate the regulatory 

impacts that were discussed in the 

December 1, 2010 interim final rule, as 

well as the regulatory impacts that are 

discussed below. We refer readers to the 

regulatory impact analysis of the 

December 1, 2010 interim final rule (75 

FR 74892) for additional methodological 

information. 

5. Estimated Number of Affected 

Entities 

Given the combination of data 

limitations and behavioral uncertainties, 

the December 1, 2010 interim final rule 

provided a range of estimates, based on 

a various assumptions. For the analysis 

in this final rule, the high range 

estimates correspond to the low rebate 

estimates in the December 1, 2010 

interim final rule, while the medium 

range estimates correspond to the 

medium rebate estimates, and the low 

range estimates correspond to the high 

rebate estimates. 

As discussed above in the preamble, 

health insurance issuers that sell plans 

with total annual benefit limits of 

$250,000 or less (‘‘mini-med’’ plans) or 

expatriate policies, as described in 

§ 158.120(d)(3) and (d)(4), respectively, 

are not required to provide notice of 

MLR information to policyholders and 

subscribers. The 2009 NAIC data does 

not allow us to identify these types of 

policies separately. Under the December 

1, 2010 interim final rule, for the 2011 

MLR reporting year, issuers of mini-med 

and expatriate policies were required to 

report MLR data on a quarterly schedule 

under § 158.110(b). Based on the 

quarterly reports, it was estimated that, 

in 2011, there were 25 issuers of minimed policies with approximately 1 

million enrollees and 8 issuers of 

expatriate policies with approximately 

300,000 enrollees.4 To the extent that 

enrollees in mini-med and expatriate 

plans were included in the 2009 NAIC 

data, this analysis overestimates the 

number of entities affected by these 

requirements, the number of notices to 

be sent by issuers of such policies, and 

the administrative costs of providing 

notices. 

In addition, issuers whose experience 

is non-credible, as defined in 

§ 158.230(c)(3) and determined in 

accordance with § 158.231, are not 

required to provide notice of MLR 

information to policyholders and 

subscribers. As discussed in the 

December 1, 2010 interim final rule, 

based on 2009 NAIC data, it was 

estimated that approximately 68 percent 

of licensed entities (State/company 

combinations) had less than 1,000 

enrollees in at least one State in 2011 

and accounted for approximately 1 

percent of enrollees. The number of 

issuers with less than 1,000 enrollees in 

all market/State combinations is 

estimated to be 45 in 2011. 

Further, issuers of student health 

insurance coverage are not required to 

provide the MLR notice since the MLR 

requirements apply beginning January 1, 

2013 for such experience. In the Student 


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Federal Register / Vol. 77, No. 95 / Wednesday, May 16, 2012 / Rules and Regulations 28795 

5Source: Agency for Healthcare Research and 

Quality, Center for Financing, Access and Cost 

Trends, 2010 Medical Expenditures Panel SurveyInsurance Component, Table I.A.2.a, ‘‘Percent of 

private-sector establishments that offer health 

insurance that self-insure at least one plan by firm 

size and selected characteristics: United States, 

2010’’, available at http://meps.ahrq.gov/mepsweb/ 

data_stats/summ_tables/insr/national/series_1/ 

2010/tia2a.pdf. 

6The estimate was based on the methodology 

used to analyze the cost burden for the Department 

of Labor’s claims procedure regulation (OMB 

Control Number 1210–0053), and refers to the 

ERISA e-disclosure rule at 29 CFR 2520.104b–1. 

7U.S. Department of Commerce, Exploring the 

Digital Nation—Computer and Internet Use at Home 

(November, 2011), available at http:// 

www.ntia.doc.gov/report/2011/exploring-digitalnation-computer-and-internet-use-home. 

Health Insurance Coverage Final Rule 

(77 FR 16453) published on March 21, 

2012, we estimated that there are 75 

issuers of student health insurance 

plans with approximately 1.1 million to 

1.5 million enrollees. To the extent that 

enrollees in student health insurance 

plans were included in the 2009 NAIC 

data, this analysis overestimates the 

number of entities affected by these 

requirements, the number of notices to 

be provided by issuers of such policies, 

and the administrative costs of 

providing notices. 

Table 2 includes estimates of the 

number of issuers that will need to 

provide MLR notices pursuant to this 

final rule. Issuers are required to 

provide notices to group policyholders 

and each of their subscribers, and to 

subscribers in the individual market. If 

there are multiple enrollees in the same 

household enrolled in the same health 

plan, issuers would need to provide 

only one notice to the subscriber. It is 

estimated that in the 2011 MLR 

reporting year, between 278 and 337 

issuers with 65.8 million to 72.2 million 

enrollees will meet or exceed the 

applicable MLR standard. According to 

a large issuer, there are 2.2 covered lives 

per family. Therefore, it is estimated 

that in 2012, between 278 and 337 

issuers will send MLR notices for the 

2011 MLR reporting year to 29.9 million 

to 32.7 million individual market and 

group market subscribers. 

In addition, issuers are required to 

provide MLR notices to group 

policyholders. In the regulatory impact 

analysis for the Interim Final Rule for 

Group Health Plans and Health 

Insurance Coverage Relating to Status as 

a Grandfathered Health Plan Under the 

Patient Protection and Affordable Care 

Act (75 FR 34538) published on June 17, 

2010, it was estimated that there are 

approximately 3 million large and small 

group plans, which include self-insured 

plans (self-insured experience is not 

subject to the MLR requirements). 

According to Medical Expenditure 

Panel Survey data, in 2010, 35.8 percent 

of all private sector employers that 

offered health insurance self-insured at 

least one plan.5 In the December 1, 2010 

MLR interim final rule, it was estimated 

that between 1 percent and 3 percent of 

enrollees in fully insured group health 

plans would receive rebates during the 

2011 MLR reporting year. In the absence 

of data on the number of group health 

plans in the NAIC database used for this 

analysis, we use the percentages of 

enrollees not receiving rebates and 

employers offering self-insured plans to 

estimate the number of fully insured 

group health plans whose enrollees 

would not receive rebates for the 2011 

MLR reporting year. Therefore, it is 

estimated that approximately 1.9 

million fully insured group 

policyholders would receive MLR 

notices, pursuant to this final rule, for 

the 2011 MLR reporting year. 

6. Estimated Costs Related to Notice 

Requirement 

CMS specifies in this rule standard 

language to be used for the notices, 

which will minimize the burden for 

issuers. Issuers have the option of 

providing the notices with other plan 

documents or, if the requirements for 

electronic disclosure under section 2715 

of the PHS Act are satisfied, by using 

electronic methods. In the Summary of 

Benefits and Coverage and Uniform 

Glossary Final Rule (77 FR 8668) 

published on February 14, 2012, we 

estimated that electronic distribution 

would account for 38 percent of all 

disclosures in the group market.6 In 

addition, according to a report by the 

Department of Commerce, 71 percent of 

homes in the U.S. had home Internet 

access in 2010.7 We therefore estimate 

that 38 percent of notices to subscribers 

in the group market and 71 percent of 

notices to subscribers in the individual 

market will be sent electronically, and 

the remaining notices will be sent by 

mail. Further, we assume that all notices 

to group policyholders or employers 

will be sent electronically. We assume 

that issuers will use clerical staff to 

prepare the notices that are distributed 

with other plan materials by mail and 

will need approximately 0.25 minutes 

(or 0.004 hours) to prepare each notice. 

The cost of supplies is assumed to be 

$0.03 per notice, and labor costs are 

assumed to be $30.67 per hour (or $0.13 

per notice). Since the notice may be 

included with other plan documents, 

we assume there will be no additional 

mailing costs. 

Table 2 includes the estimated total 

and average administrative costs to 

issuers of preparing and sending the 

notices by mail. We estimate that in 

2012, issuers will incur total annual 

costs of about $3 million and average 

costs between $9,000 and $10,000 per 

issuer to provide notices for the 2011 

MLR reporting year. The average cost of 

preparing and sending a notice by mail 

is about $0.16 (including labor and 

supply costs). 

TABLE 2—ESTIMATED ADMINISTRATIVE COST OF MLR NOTICES IN 2012 

MLR reporting year 

Estimated 

number of affected issuers 

Estimated 

number of notices distributed by mail 

Estimated total 

hours for preparing notices 

distributed by 

mail 

Estimated supplies cost per 

notice distributed by mail 

Estimated total 

cost of distributing notices 

by mail 

Estimated average cost per 

affected issuer 

High Range Estimate 

2011 ......................................................... 337 19,000,000 79,000 $0.03 $3,002,919 $8,911 

Medium Range Estimate 

2011 ......................................................... 305 18,700,000 78,000 $0.03 $2,946,544 $9,661 

Low Range Estimate 

2011 ......................................................... 278 17,700,000 74,000 $0.03 $2,800,587 $10,074 


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28796 Federal Register / Vol. 77, No. 95 / Wednesday, May 16, 2012 / Rules and Regulations 

8 ‘‘Table of Small Business Size Standards 

Matched to North American Industry Classification 

System Codes,’’ effective March 26, 2012, U.S. 

Small Business Administration, available at 

www.sba.gov. 

C. Regulatory Alternatives 

Under the Executive Order, CMS is 

required to consider alternatives to 

issuing rules and alternative regulatory 

approaches. CMS considered the 

regulatory alternative of not requiring 

issuers that meet or exceed the 

applicable MLR standard to provide 

notices with MLR information to 

policyholders and subscribers. 

However, that would result in reduced 

transparency for consumers regarding 

the MLR of their issuer for their State 

and market, and how it compares to the 

applicable standard. CMS also 

considered the regulatory alternatives of 

requiring issuers that meet or exceed the 

applicable MLR standard to provide 

notices that include the issuer’s MLR 

from the current and prior MLR 

reporting years and of making the notice 

an ongoing annual requirement. 

However, this would result in increased 

burden for issuers, particularly since 

their MLR information will be available 

on the HHS Web site and consumer 

knowledge of MLR is expected to 

increase after rebates and MLR notices 

are provided in 2012. As discussed 

earlier, we believe that the greatest 

benefit can be achieved by providing 

consumers with educational 

information in the first year of 

applicability, when consumer 

knowledge of the MLR is low, and 

helping to reduce consumers’ confusion 

regarding why they did not receive a 

rebate. CMS believes that the option 

adopted in this final rule strikes the best 

balance of providing valuable 

information to consumers while 

providing an incentive for issuers to 

maximize the percentage of premium 

dollars they spend on health care and 

quality improving activities. 

D. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

requires agencies that issue a rule to 

analyze options for regulatory relief of 

small businesses if a rule has a 

significant 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 nonprofit 

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’’). CMS uses as its measure of 

significant economic impact on a 

substantial number of small entities a 

change in revenue of more than 3 to 5 

percent. 

As discussed in the interim final rule 

with comment period published on May 

5, 2010 (75 FR 24470) relating to the 

Federal health care reform insurance 

Web Portal requirements, CMS 

examined the health insurance industry 

in depth in the Regulatory Impact 

Analysis prepared for the proposed rule 

on establishment of the Medicare 

Advantage program (69 FR 46866, 

August 3, 2004). In that analysis, it was 

determined that there were few, if any, 

insurance firms underwriting 

comprehensive health insurance 

policies (in contrast, for example, to 

travel insurance policies or dental 

discount policies) that fell below the 

size thresholds for ‘‘small’’ business 

established by the SBA (currently $7 

million in annual receipts for health 

issuers).8

For the December 1, 2010 interim 

final rule (75 FR 74892), we used the 

data set created from the 2009 NAIC 

Health and Life Blank annual financial 

statement data to develop an updated 

estimate of the number of small entities 

that offer comprehensive major medical 

coverage in the individual and small 

group markets, and are therefore subject 

to the MLR reporting requirements. For 

purposes of this analysis, we used total 

Accident and Health (A&H) earned 

premiums as a proxy for annual 

receipts. These estimates may overstate 

the actual number of small health 

insurance issuers that would be 

affected, since they do not include 

receipts from these companies’ other 

lines of business. 

In the December 1, 2010 interim final 

rule, it was estimated that there are 28 

small entities with less than $7 million 

in A&H earned premiums that offer 

individual or group comprehensive 

major medical coverage, and would 

therefore be subject to the requirements 

of this final rule. These small entities 

accounted for 6 percent of the estimated 

442 total issuers that would be affected 

by the MLR requirements. It was 

estimated that 86 percent of these small 

issuers are subsidiaries of larger issuers, 

75 percent only offer coverage in a 

single State, 68 percent only offer 

individual or group comprehensive 

coverage in a single market, 46 percent 

also offer other types of A&H coverage, 

and 29 percent are Life Blank filers. 

CMS estimates that in 2012, of the 28 

small entities discussed above, 8 are 

subject to the requirements of this final 

rule and will incur approximately $100 

per issuer in administrative costs related 

to providing notices for the 2011 MLR 

reporting year (accounting for less than 

0.002 percent of their total A&H 

premiums). 

CMS believes that these estimates 

overstate the number of small entities 

that will be affected by the requirements 

in this final rule, as well as the relative 

impact of these requirements on these 

entities, because CMS has based its 

analysis on issuers’ total A&H earned 

premiums (rather than their total annual 

receipts). Therefore, the Secretary 

certifies that this final rule will not have 

significant impact on a substantial 

number of small entities. 

In addition, section 1102(b) of the 

Social Security Act requires us to 

prepare a regulatory impact analysis if 

a final rule may have a significant 

economic impact on the operations of a 

substantial number of small rural 

hospitals. This analysis must conform to 

the provisions of section 604 of the 

RFA. This final rule would not affect 

small rural hospitals. Therefore, the 

Secretary has determined that this final 

rule would not have a significant impact 

on the operations of a substantial 

number of small rural hospitals. 

E. Unfunded Mandates Reform Act 

Section 202 of the Unfunded 

Mandates Reform Act (UMRA) of 1995 

requires that agencies assess anticipated 

costs and benefits before issuing any 

final rule that includes a Federal 

mandate that could 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. In 2012, that 

threshold level is approximately $139 

million. 

UMRA does not address the total cost 

of a final rule. Rather, it focuses on 

certain categories of cost, mainly those 

‘‘Federal mandate’’ costs resulting 

from—(1) Imposing enforceable duties 

on State, local, or tribal governments, or 

on the private sector; or (2) increasing 

the stringency of conditions in, or 

decreasing the funding of, State, local, 

or tribal governments under entitlement 

programs. 

Consistent with policy embodied in 

UMRA, this final rule has been designed 

to be the least burdensome alternative 

for State, local and tribal governments, 

and the private sector, while achieving 

the objectives of the Affordable Care 

Act. 

This final rule contains MLR notice 

requirements for private sector firms (for 

example, health insurance issuers 

providing coverage in the individual 

and group markets), but it is estimated 

that these requirements will not cost 


pmangrum on DSK3VPTVN1PROD with RULES
Federal Register / Vol. 77, No. 95 / Wednesday, May 16, 2012 / Rules and Regulations 28797 

issuers more than approximately $3 

million dollars in administrative costs 

in 2012. The rule contains no mandates 

on State, local or tribal governments. 

Thus, this final rule does not impose an 

unfunded mandate on State, local or 

tribal governments. 

F. Federalism 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a final 

rule that imposes substantial direct 

requirement costs on State and local 

governments, preempts State law, or 

otherwise has federalism implications. 

The requirements specified in this final 

rule would not impose substantial direct 

costs on State and local governments. 

Throughout the process of developing 

this final rule, CMS has attempted to 

balance States’ interests in regulating 

health insurance issuers and the 

Congress’ intent to provide uniform 

protections to consumers in every State. 

By doing so, it is CMS’ view that it has 

complied with the requirements of 

Executive Order 13132. Under the 

requirements set forth in section 8(a) of 

Executive Order 13132, and by the 

signatures affixed to this rule, HHS 

certifies that CMS has complied with 

the requirements of Executive Order 

13132 for the attached final rule in a 

meaningful and timely manner. 

G. Congressional Review Act 

This final rule is subject to the 

Congressional Review Act provisions of 

the Small Business Regulatory 

Enforcement Fairness Act of 1996 (5 

U.S.C. 801 et seq.), which specifies that 

before a rule can take effect, the Federal 

agency promulgating the rule shall 

submit to each House of the Congress 

and to the Comptroller General a report 

containing a copy of the rule along with 

other specified information, and has 

been transmitted to the Congress and 

the Comptroller General for review. 

List of Subjects in 45 CFR Part 158 

Administrative practice and 

procedure, Claims, Health care, Health 

insurance, Health plans, Penalties, 

Reporting and recordkeeping 

requirements. 

For the reasons stated in the 

preamble, the Department of Health and 

Human Services amends 45 CFR part 

158 as set forth below: 

PART 158—ISSUER USE OF PREMIUM 

REVENUE: REPORTING AND REBATE 

REQUIREMENTS 

■ 1. The authority citation for part 158 

continues to read as follows: 

Authority: Section 2718 of the Public 

Health Service Act (42 U.S.C. 300gg–18), as 

amended. 

■ 2. Section 158.251 is added to read as 

follows: 

§ 158.251 Notice of MLR information. 

(a) Notice of MLR information when 

the MLR standard is met or exceeded.— 

(1) General requirement. Except as 

provided in paragraph (b) of this 

section, for the 2011 MLR reporting 

year, an issuer whose MLR meets or 

exceeds the applicable MLR standard 

required by § 158.210 or § 158.211 must 

provide each policyholder and 

subscriber of a group health plan, and 

each subscriber in the individual 

market, a notice in accordance with the 

requirements of this section. 

(2) Timing. An issuer must provide 

the notice required in this paragraph (a) 

with the first plan document that the 

issuer provides to enrollees on or after 

July 1, 2012. 

(3) Form and appearance. The notice 

must be prominently displayed in clear, 

conspicuous 14-point bold type on the 

front of the plan document or as a 

separate notice. The notice may be 

provided electronically, if the 

requirements for electronic disclosure 

under section 2715 of the Public Health 

Service Act are met. 

(4) Language. The following language 

must be used to satisfy the notice 

requirement of this paragraph (a): 

Medical Loss Ratio Information—The 

Affordable Care Act requires health 

insurers in the individual and small 

group markets to spend at least 80 

percent of the premiums they receive on 

health care services and activities to 

improve health care quality (in the large 

group market, this amount is 85 

percent). This is referred to as the 

Medical Loss Ratio (MLR) rule or the 

80/20 rule. If a health insurer does not 

spend at least 80 percent of the 

premiums it receives on health care 

services and activities to improve health 

care quality, the insurer must rebate the 

difference. 

A health insurer’s Medical Loss Ratio 

is determined separately for each State’s 

individual, small group and large group 

markets in which the health insurer 

offers health insurance. In some States, 

health insurers must meet a higher or 

lower Medical Loss Ratio. No later than 

August 1, 2012, health insurers must 

send any rebates due for 2011 and 

information to employers and 

individuals regarding any rebates due 

for 2011. 

You are receiving this notice because 

your health insurer had a Medical Loss 

Ratio for 2011 that met or exceeded the 

required Medical Loss Ratio. For more 

information on Medical Loss Ratio and 

your health insurer’s Medical Loss 

Ratio, visit www.HealthCare.gov.’’ 

(b) Exceptions. The requirements of 

paragraph (a) of this section do not 

apply to an issuer that reports its 

experience separately under 

§ 158.120(d)(3) or (d)(4), or to an issuer 

whose experience is non-credible as 

defined in § 158.230(c)(3) and 

determined in accordance with 

§ 158.231. 

Dated: March 8, 2012. 

Marilyn Tavenner, 

Acting Administrator, Centers for Medicare 

& Medicaid Services. 

Approved: May 10, 2012. 

Kathleen Sebelius, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2012–11753 Filed 5–11–12; 11:15 am] 

BILLING CODE 4120–01–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Parts 12 and 90 

[DA 11–1838] 

Redundancy of Communications 

Systems: Backup Power Private Land 

Mobile Radio Services: Selection and 

Assignment of Frequencies, and 

Transition of the Upper 200 Channels 

in the 800 MHz Band to EA Licensing 

AGENCY: Federal Communications 

Commission. 

ACTION: Final rule. 

SUMMARY: In this document the Federal 

Communications Commission’s 

(Commission) Public Safety and 

Homeland Security Bureau (Bureau) and 

Office of Managing Director (OMD) 

make nonsubstantive, editorial revisions 

to the Commission’s rules. The Bureau 

and OMD make these revisions to delete 

certain rule provisions that are without 

current legal effect and obsolete. These 

nonsubstantive revisions are part of the 

Commission’s ongoing examination and 

improvement of its processes and 

procedures. The revisions and the 

specific reasons for each one are set 

forth below. 

DATES: Effective May 16, 2012. 

FOR FURTHER INFORMATION CONTACT: Eric 

Ehrenreich, Policy and Licensing 

Division, Public Safety and Homeland 

Security Bureau, at (202) 418–1726, or 

by email at Eric.Ehrenreich@fcc.gov. 

SUPPLEMENTARY INFORMATION: This is a 

summary of the Bureau and OMD’s 

Order, DA 11–1838, adopted and 

released on November 1, 2011. The full 


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