36872 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

OFFICE OF PERSONNEL 

MANAGEMENT 

5 CFR Part 890 

RIN 3206–AO30 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 54 

[TD9951] 

RIN 1545–BQ04 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

29 CFR Part 2590 

RIN 1210–AB99 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

45 CFR Parts 144, 147, 149, and 156 

[CMS–9909–IFC] 

RIN 0938–AU63 

Requirements Related to Surprise 

Billing; Part I 

AGENCY: Office of Personnel 

Management; Internal Revenue Service, 

Department of the Treasury; Employee 

Benefits Security Administration, 

Department of Labor; Centers for 

Medicare & Medicaid Services, 

Department of Health and Human 

Services. 

ACTION: Interim final rules with request 

for comments. 

SUMMARY: This document sets forth 

interim final rules implementing certain 

provisions of the No Surprises Act, 

which was enacted as part of the 

Consolidated Appropriations Act, 2021. 

These interim final rules amend and 

add provisions to existing rules under 

the Internal Revenue Code, the 

Employee Retirement Income Security 

Act, the Public Health Service Act, and 

the Federal Employees Health Benefits 

Act. These interim final rules 

implement provisions of the No 

Surprises Act that protect participants, 

beneficiaries, and enrollees in group 

health plans and group and individual 

health insurance coverage from surprise 

medical bills when they receive 

emergency services, non-emergency 

services from nonparticipating 

providers at participating facilities, and 

air ambulance services from 

nonparticipating providers of air 

ambulance services, under certain 

circumstances. In this rulemaking, the 

Department of Health and Human 

Services (HHS), the Department of Labor 

(DOL), and the Department of the 

Treasury (collectively, the Departments) 

are issuing interim final rules with 

largely parallel provisions that apply to 

group health plans and health insurance 

issuers offering group or individual 

health insurance coverage. HHS is also 

issuing in this rulemaking additional 

interim final rules that apply to 

emergency departments of hospitals and 

independent freestanding emergency 

departments, health care providers and 

facilities, and providers of air 

ambulance services related to the 

protections against surprise billing. The 

Office of Personnel Management (OPM) 

is issuing in this rulemaking interim 

final rules that specify how certain 

provisions of the No Surprises Act 

apply to health benefits plans offered by 

carriers under the Federal Employees 

Health Benefits Act (FEHBA). 

DATES: Effective date: These regulations 

are effective on September 13, 2021. 

Applicability date: The regulations are 

generally applicable for plan years (in 

the individual market, policy years) 

beginning on or after January 1, 2022. 

The HHS-only regulations that apply to 

health care providers, facilities, and 

providers of air ambulance services are 

applicable beginning on January 1, 

2022. The OPM-only regulations that 

apply to health benefits plans are 

applicable to contract years beginning 

on or after January 1, 2022. 

Comment date: To be assured 

consideration, comments must be 

received at one of the addresses 

provided below, no later than 5 p.m. on 

September 7, 2021. 

ADDRESSES: Written comments may be 

submitted to the addresses specified 

below. Any comment that is submitted 

will be shared among the Departments 

and OPM. 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–9909–IFC. Because of staff and 

resource limitations, we cannot accept 

comments by facsimile (FAX) 

transmission. 

Comments, including mass comment 

submissions, must be submitted in one 

of the following three ways (please 

choose only one of the ways listed): 

1. Electronically. You may submit 

electronic comments on this regulation 

at https://www.regulations.gov by 

entering the file code in the search 

window and then clicking on 

‘‘Comment’’. 

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–9909–IFC, P.O. Box 8016, 

Baltimore, MD 21244–8016. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

3. By express or overnight mail. You 

may send written comments to the 

following address ONLY: Centers for 

Medicare & Medicaid Services, 

Department of Health and Human 

Services, Attention: CMS–9909–IFC, 

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: 

Padma Babubhai Shah, Office of 

Personnel Management, at 202–606– 

4056; Kari DiCecco, Internal Revenue 

Service, Department of the Treasury, at 

202–317–5500; Matt Litton or David 

Sydlik, Employee Benefits Security 

Administration, Department of Labor, at 

202–693–8335; Lindsey Murtagh, 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, at 301–492–4106. 

Customer Service Information: 

Information from OPM on health 

benefits plans offered under the Federal 

Employees Health Benefits (FEHB) 

Program can be found on the OPM 

website (www.opm.gov/healthcareinsurance/healthcare/). Individuals 

interested in obtaining information from 

the DOL concerning employment-based 

health coverage laws may call the 

Employee Benefits Security 

Administration (EBSA) Toll-Free 

Hotline at 1–866–444–EBSA (3272) or 

visit the DOL’s website (www.dol.gov/ 

ebsa). In addition, information from 

HHS on private health insurance 

coverage and coverage provided by nonfederal governmental group health plans 

can be found on the Centers for 

Medicare & Medicaid Services (CMS) 

website (www.cms.gov/cciio), and 

information on health care reform can 

be found at www.HealthCare.gov. 


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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 36873 

1The term ‘‘group health plan’’ includes both 

insured and self-insured group health plans. 

2 26 CFR 54.9815–2719A(b); 29 CFR 2590.715– 

2719A(b); 45 CFR 147.138(b). 3 75 FR 37188, 37194 (June 28, 2010); see also 80 

FR 72192 (Nov. 18, 2015). Additional clarification 

of these rules was also provided in 2018. See 83 FR 

19431 (May 3, 2018). 

4 26 CFR 54.9815–2719A(b)(3); 29 CFR 2590.715– 

2719A(b)(3); 45 CFR 147.138(b)(3). 

5 If state law prohibits balance billing, or in cases 

in which a group health plan or health insurance 

issuer is contractually responsible for balance 

billing amounts, plans and issuers are not required 

to satisfy the minimum payment standards set forth 

in the regulations, but may not impose any 

copayment or coinsurance requirement for out-ofnetwork emergency services that is higher than the 

copayment or coinsurance requirement that would 

apply if the services were provided in-network. See 

26 CFR 54.9815–2719A(b)(3)(iii); 29 CFR 2590.715– 

2719A(b)(3)(iii); 45 CFR 147.138(b)(3)(iii); FAQs 

about Affordable Care Act Implementation (Part I), 

Q15 (Sept. 20, 2010), available at https://

www.dol.gov/agencies/ebsa/laws-and-regulations/ 

laws/affordable-care-act/for-employers-andadvisers/aca-implementation-faqs; www.cms.gov/ 

CCIIO/Resources/Fact-Sheets-and-FAQs/aca_

implementation_faqs.html. 

SUPPLEMENTARY INFORMATION: Inspection 

of Public Comments: Comments 

received before the close of the 

comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. We post comments received 

before the close of the comment period 

on the following website as soon as 

possible after they have been received: 

https://regulations.gov. Follow the 

search instructions on that website to 

view public comments. 

I. Background 

A. Patient Protections and Requirements 

Related to Emergency Services Under 

Section 2719A of the Public Health 

Service Act 

The Patient Protection and Affordable 

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

on March 23, 2010 and the Health Care 

and Education Reconciliation Act of 

2010, Public Law 111–152, was enacted 

on March 30, 2010 (these statutes are 

collectively known as the ‘‘Affordable 

Care Act’’ or ‘‘ACA’’). The 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.1 The Affordable 

Care Act adds section 715(a)(1) to the 

Employee Retirement Income Security 

Act (ERISA) and section 9815(a)(1) to 

the Internal Revenue Code (the Code) to 

incorporate the provisions of part A of 

title XXVII of the PHS Act into ERISA 

and the Code, and make them 

applicable to group health plans and 

health insurance issuers providing 

health insurance coverage in connection 

with group health plans. Sections 2701 

through 2728 of the PHS Act are 

incorporated into ERISA and the Code. 

Under section 2719A of the PHS Act, 

as added by the Affordable Care Act and 

incorporated into ERISA and the Code, 

if a non-grandfathered group health plan 

or health insurance issuer offering nongrandfathered group or individual 

health insurance coverage provides any 

benefits with respect to emergency 

services in an emergency department of 

a hospital, the plan or issuer must cover 

emergency services without the 

individual or the health care provider 

having to obtain prior authorization 

(including when the emergency services 

are provided out-of-network) and 

without regard to whether the health 

care provider furnishing the emergency 

services is an in-network provider with 

respect to the services. The emergency 

services must be provided without 

regard to any other term or condition of 

the plan or health insurance coverage 

other than the exclusion or coordination 

of benefits, an affiliation or waiting 

period permitted under the Code, 

ERISA, and the PHS Act, or applicable 

cost-sharing requirements. For a plan or 

health insurance coverage with a 

network of providers that provides 

benefits for emergency services, the plan 

or issuer may not impose any 

administrative requirement or limitation 

on benefits for out-of-network 

emergency services that is more 

restrictive than the requirements or 

limitations that apply to in-network 

emergency services. In addition, carriers 

offering FEHB plans must comply with 

requirements described in section 

2719A of the PHS Act in the same 

manner as they apply to a plan or issuer. 

For purposes of the requirements 

under section 2719A of the PHS Act, 

emergency services mean, with respect 

to an emergency medical condition, (1) 

a medical screening examination (as 

required under section 1867 of the 

Social Security Act) that is within the 

capability of the emergency department 

of a hospital, including ancillary 

services routinely available to the 

emergency department to evaluate such 

emergency medical condition, and (2) 

that is within the capabilities of the staff 

and facilities available at the hospital, 

such further medical examination and 

treatment as are required under section 

1867 of the Social Security Act to 

stabilize the patient. 

Regulations implementing section 

2719A of the PHS Act include these 

consumer protections.2 Section 2719A 

of the PHS Act did not prohibit balance 

billing. Balance billing refers to the 

practice of out-of-network providers 

billing patients for the difference 

between (1) the provider’s billed 

charges, and (2) the amount collected 

from the plan or issuer plus the amount 

collected from the patient in the form of 

cost sharing (such as a copayment, 

coinsurance, or amounts paid toward a 

deductible). To avoid the circumvention 

of the protections of section 2719A of 

the PHS Act, in the implementing 

regulations, the Departments 

determined it was necessary that a 

reasonable amount be paid by a plan or 

issuer before a patient becomes 

responsible for a balance billing 

amount.3 Therefore, under the 

Departments’ final regulations 

published in the Federal Register on 

November 18, 2015 (Patient Protections 

Final Rule), a plan or issuer satisfies the 

out-of-network emergency care costsharing limitations in the statute if it 

provides benefits for out-of-network 

emergency services in an amount at 

least equal to the greatest of the 

following three amounts (adjusted for 

in-network cost sharing): (1) The 

median amount negotiated with innetwork providers for the emergency 

service; (2) the amount for the 

emergency service calculated using the 

same method the plan generally uses to 

determine payments for out-of-network 

services (such as the usual, customary, 

and reasonable (UCR) amount); or (3) 

the amount that would be paid under 

Medicare Part A or Part B for the 

emergency service (collectively, 

minimum payment standards).4 The 

Departments’ regulations clarify that the 

cost-sharing requirements create a 

minimum payment requirement for the 

plan or issuer.5 The Departments also 

clarified that the cost-sharing 

requirements do not prohibit a group 

health plan or health insurance issuer 

from providing benefits with respect to 

an emergency service that are greater 

than the amounts specified in the 

regulations. However, those regulations 

address balance billing with respect to 

only emergency services and, even in 

that context, they serve only to 

minimize the amount of a balance bill 

by requiring that plans and issuers must 

pay a reasonable amount for emergency 

services before a patient becomes 

responsible for a balance billing 

amount. Prior to the enactment of the 

No Surprises Act, these minimum 

payment standards were the only 

federal consumer protections to reduce 

potential amounts of balance billing for 

individuals enrolled in group health 

plans and group and individual health 

insurance coverage. 


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36874 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

6These new protections apply regardless of 

whether the plan or coverage is a grandfathered 

health plan under section 1251 of the Affordable 

Care Act. The No Surprises Act also amended 5 

U.S.C. 8902(p) to ensure that covered individuals 

enrolled in FEHB plans receive these protections. 

7These interim final rules refer to providers both 

in terms of their participation (participating 

provider) and in terms of a network (in-network 

provider). In both situations, the intent is to refer 

to a provider that has a contractual relationship or 

other arrangement with a plan or issuer to provide 

health care items and services for participants, 

beneficiaries, and enrollees of the plan or issuer. 

8Cooper Z et al., Out-of-Network Billing and 

Negotiated Payments for Hospital-Based Physicians, 

Health Affairs 39, No. 1, 2020. doi: 10.1377/ 

hlthaff.2019.00507. 

9See Cooper, Z. et al., Surprise! Out-Of-Network 

Billing For Emergency Care in the United States, 

NBER Working Paper 23623, 20173623; Duffy, E. et 

al., Policies to Address Surprise Billing Can Affect 

Health Insurance Premiums. The American Journal 

of Managed Care 26.9 (2020): 401–404.; and Brown 

E.C.F., et al., The Unfinished Business of Air 

Ambulance Bills, Health Affairs Blog (March 26, 

2021), DOI: 10.1377/hblog20210323.911379, 

available at https://www.healthaffairs.org/do/ 

10.1377/hblog20210323.911379/full/. 

10Biener, A. et al., Emergency Physicians Recover 

a Higher Share of Charges From Out-Of-Network 

Care Than From In-Network Care, Health Affairs 40, 

No, 4 (2021): 622–628. 

11Sun EC, Mello MM, Moshfegh J, Baker LC, 

Assessment of Out-of-Network Billing for Privately 

Insured Patients Receiving Care in In-Network 

Hospitals. JAMA Intern Med. 2019; 179(11):1543– 

1550 (2019). doi:10.1001/jamainternmed.2019.3451. 

The No Surprises Act added section 

9816 of the Code, section 716 of ERISA, 

and section 2799A–1 of the PHS Act, 

which expand the patient protections 

related to emergency services under 

section 2719A of the PHS Act, in part, 

by providing additional consumer 

protections related to balance billing.6

The No Surprises Act amended section 

2719A of the PHS Act to include a 

sunset provision effective for plan years 

beginning on or after January 1, 2022, 

when the new protections under the No 

Surprises Act take effect. 

Additionally, the No Surprises Act 

recodified the patient protections 

regarding choice of health care 

professional from section 2719A(a), (c), 

and (d) of the PHS Act at new section 

9822 of the Code, section 722 of ERISA, 

and section 2799A–7 of the PHS Act. If 

a plan or issuer requires or provides for 

designation by a participant, 

beneficiary, or enrollee of a 

participating primary care provider, 

these provisions permit individuals to 

designate any participating primary care 

providers available to accept them, 

including pediatricians, and prohibit 

the plan or issuer from requiring 

authorization or referral for obstetrical 

or gynecological care. 

B. Surprise Billing and the Need for 

Greater Consumer Protections 

Most group health plans, and health 

insurance issuers offering group or 

individual health insurance coverage, 

have a network of providers and health 

care facilities (participating providers or 

preferred providers) who agree by 

contract to accept a specific amount for 

their services.7 By contrast, providers 

and facilities that are not part of a plan 

or issuer’s network (nonparticipating 

providers) usually charge higher 

amounts than the contracted rates that 

plans and issuers have negotiated with 

participating providers and facilities. 

When a participant, beneficiary, or 

enrollee receives care from a 

nonparticipating provider, the 

individual’s plan or issuer may decline 

to pay for the service or may pay an 

amount that is lower than the provider’s 

billed charges, and may subject the 

individual to greater cost-sharing 

requirements than would have been 

charged had the services been furnished 

by a participating provider. Prior to the 

No Surprises Act, the nonparticipating 

provider could generally balance bill the 

individual for the difference between 

the provider’s billed charges and the 

sum of the amount paid by the plan or 

issuer and the cost sharing paid by the 

individual, unless otherwise prohibited 

by state law. 

A balance bill may come as a surprise 

for the individual. A surprise medical 

bill is an unexpected bill from a health 

care provider or facility that occurs 

when a covered person receives medical 

services from a provider or facility that, 

usually unknown to the participant, 

beneficiary, or enrollee, is a 

nonparticipating provider or facility 

with respect to the individual’s 

coverage. Surprise billing occurs both 

for emergency and non-emergency care. 

In an emergency, a person usually goes 

(or is taken by emergency transport) to 

a nearby emergency department. Even if 

they go to a participating hospital or 

facility for emergency care, they may 

receive care from nonparticipating 

providers working at that facility. For 

non-emergency care, a person may 

choose a participating facility (and 

possibly even a participating provider), 

but not know that at least one provider 

involved in their care (for example, an 

anesthesiologist or radiologist) is a 

nonparticipating provider. In either 

circumstance, the person might not be 

in a position to choose the provider, or 

to ensure that the provider is a 

participating provider. Therefore, in 

addition to a bill for their cost-sharing 

amount, which tends to be higher for 

out-of-network services, the person 

might receive a balance bill from the 

nonparticipating provider or facility. 

This scenario also plays out frequently 

for air ambulance services, where 

individuals generally do not have the 

ability to select a provider of air 

ambulance services, and, therefore, have 

little or no control over whether the 

provider is in-network with their plan 

or coverage. 

When individuals are unable to avoid 

nonparticipating providers, it raises 

health care costs and exposes patients to 

financial risk.8 The evidence suggests 

that the ability to balance bill is used as 

leverage by some providers to obtain 

higher in-network payments, which 

results in higher premiums, higher cost 

sharing for individuals, and increased 

health care expenditures overall.9

Studies have shown that surprise bills 

can be large. For example, a recent 

study found that physicians collected, 

on average, 65 percent of the total 

charged amount for emergency 

department visits that likely included 

surprise bills, compared to 52 percent of 

the total charged amount for emergency 

department visits that likely did not 

include surprise bills. The study also 

found that nine percent of the 

individuals who likely received surprise 

bills paid physicians an amount more 

than $400, which may cause financial 

hardship to many individuals.10 In 

addition, out-of-network cost sharing 

and payments for surprise bills usually 

do not count towards an individual’s 

deductible and maximum out-of-pocket 

expenditure limits. Therefore, 

individuals with surprise bills may have 

difficulty reaching those limits, even 

after a significant health care event. 

Another study using claims data from 

a large commercial issuer for the period 

2010–2016 found that over 39 percent of 

emergency department visits to innetwork hospitals resulted in an out-ofnetwork bill, and the incidence 

increased from 32.3 percent in 2010 to 

42.8 percent in 2016. The average 

potential amount of surprise medical 

bills also increased from $220 in 2010 

to $628 in 2016. During the same 

period, 37 percent of inpatient 

admissions to in-network hospitals 

resulted in at least one out-of-network 

bill, increasing from 26.3 percent in 

2010 to 42 percent in 2016, and the 

average potential surprise medical bill 

increased from $804 to $2,040.11

Although some states have enacted 

laws to reduce or eliminate balance 

billing, these efforts have created a 

patchwork of consumer protections. 

Even within a state that has enacted 

such protections, those protections 

typically apply only to individuals 

enrolled in individual and group health 

insurance coverage, as ERISA generally 


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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 36875 

12Taylor, J. Racism, inequality, and health care 

for African Americans. The Century Foundation: 

Report (December 19, 2019). https://tcf.org/content/ 

report/racism-inequality-health-care-africanamericans/; Chavis, B. Op-Ed: Big insurance must 

help end surprise medical billing. blackpressUSA 

(February 24, 2020). 

13Families USA, Surprise Medical Bills, Results 

from a National Survey, November 2019. https://

familiesusa.org/wp-content/uploads/2019/11/ 

Surprise-Billing-National-Poll-Report-FINAL.pdf. 

14 Gooch, Kelly. 61% of patients confused by 

medical bills, survey finds. Becker’s Hospital 

Review (July 14, 2016). https://

www.beckershospitalreview.com/finance/61-ofpatients-confused-by-medical-bills-surveyfinds.html. 

15See Butler S, Sherriff N. How poor 

communication exacerbates health inequities and 

what to do about it. Brookings Institution: Report 

(February 22, 2021). https://www.brookings.edu/ 

research/how-poor-communication-exacerbateshealth-inequities-and-what-to-do-about-it/; Hamel, 

L., Lopes, L., Mun ̃ ana, C., Artiga, S., Brodie, M. 

Race, Health, and COVID–19: The Views and 

Experiences of Black Americans. Kaiser Family 

Foundation (October 2020). https://files.kff.org/ 

attachment/Report-Race-Health-and-COVID-19- 

The-Views-and-Experiences-of-BlackAmericans.pdf; Shen M.J., Peterson E.B., CostasMun ̃iz R. et al. The Effects of Race and Racial 

Concordance on Patient-Physician Communication: 

A Systematic Review of the Literature. J. Racial and 

Ethnic Health Disparities 5, 117–140 (2018). https:// 

doi.org/10.1007/s40615-017-0350-4. 

16Pe ́rez-Stable EJ, El-Toukhy S. Communicating 

with diverse patients: How patient and clinician 

factors affect disparities. Patient Educ Couns. 

2018;101(12):2186–2194. doi:10.1016/ 

j.pec.2018.08.021; McNally, M. Confronting 

disparities in access to healthcare for underserved 

populations. MedCity News (February 22, 2021). 

https://medcitynews.com/2021/02/confrontingdisparities-in-access-to-healthcare-for-underservedpopulations-in-2021/. 

17 42 U.S.C. 12101 et seq. 

18 29 U.S.C. 794 and 794d. 

19 42 U.S.C. 18116(a). 

20 42 U.S.C. 2000d. 

21 86 FR 7009 (Jan. 25, 2021). 22Public Law 116–260. 

preempts state laws that regulate selfinsured group health plans sponsored 

by private employers. In addition, states 

are limited in their ability to address 

surprise bills that involve an out-of-state 

provider. 

Surprise medical bills can lead to 

medical debt for individuals who have 

difficulty paying their bills. The impact 

is most keenly felt by those 

communities experiencing poverty and 

other social risk factors, as surprise 

medical bills and medical debt can 

negatively affect individuals’ abilities to 

eliminate debt and create wealth, and 

ultimately can affect a family for 

generations.12 A recent survey reported 

that while 68 percent of respondents 

said that it was difficult to pay a 

surprise bill, the likelihood of such 

difficulty was higher for middle income 

respondents (77 percent) and African 

Americans (74 percent). In addition, 

while 11 percent of survey respondents 

were unable to pay the surprise bill, 21 

percent of low income respondents, 19 

percent of African Americans, and 17 

percent of respondents in rural areas 

were unable to do so.13 In addition, 

individuals are often confused by 

medical bills. A 2016 survey found that 

61 percent of individuals are confused 

by medical bills, and for 49 percent of 

individuals surveyed, the amount owed 

was a surprise.14 These challenges are 

exacerbated for underserved 

communities, which are more likely to 

experience poor communication, 

underlying mistrust of the medical 

system, and lower levels of patient 

engagement than other populations.15

Effective, culturally, and linguistically 

tailored communication at appropriate 

literacy levels, coupled with policies 

that address the social risk factors and 

other barriers underserved communities 

face to accessing, trusting, and 

understanding health care costs and 

coverage, can reduce disparities and 

promote health equity.16

Communication among providers, 

plans, consumers, communities, and 

consumer advocates must be consistent 

with and reinforce all relevant 

consumer protections related to surprise 

bills. Such communication must be 

accessible, linguistically tailored, and at 

an appropriate literacy level. This 

includes compliance with requirements 

to provide effective communication for 

individuals with disabilities under the 

Americans with Disabilities Act of 

1990,17 section 504 of the Rehabilitation 

Act of 1973 18 and, where applicable, 

section 1557 of the Affordable Care 

Act,19 as well as compliance with race, 

color, and national origin protections 

under title VI of the Civil Rights Act of 

1964 20 and section 1557 of the 

Affordable Care Act. Section 1557 

prohibits discrimination on the basis of 

race, color, national origin, sex 

(including sexual orientation and 

gender identity), age, or disability in 

covered health programs or activities, 

including requiring covered entities to 

take reasonable steps to ensure 

meaningful access for individuals with 

limited English proficiency. 

On January 20, 2021, President Biden 

issued Executive Order 13985, ‘‘On 

Advancing Racial Equity and Support 

for Underserved Communities Through 

the Federal Government,’’ 21 directing 

that as a policy matter, the federal 

government should pursue a 

comprehensive approach to advancing 

equity for all, including people of color 

and others who have been historically 

underserved, marginalized, and 

adversely affected by persistent poverty 

and inequality. Executive Order 13985 

also directs HHS to assess whether, and 

to what extent, its programs and policies 

perpetuate systemic barriers to 

opportunities and benefits for people of 

color and other underserved groups. 

Consistent with Executive Order 13985, 

regulations issued pursuant to the No 

Surprises Act must ensure that 

communication from plans, issuers, 

providers, facilities, and providers of air 

ambulance services recognizes these 

inequities and upholds all relevant 

consumer protections. Regulations 

issued pursuant to the No Surprises Act 

should ensure that all individuals, 

particularly those from underserved and 

minority communities, trust and believe 

information they receive related to costs 

and network coverage. Regulations and 

policies should enable and encourage 

regulated entities to address barriers to 

accessing care, including mistrust of the 

health care system. They should also 

encourage entities to communicate with 

individuals in a language they can 

understand, in a respectful way that 

addresses cultural differences, and at an 

appropriate literacy level. To ensure all 

consumers, particularly those in 

minority and underserved communities, 

are able to understand and benefit from 

these consumer protections, deliberate 

attention must be paid to the unique 

barriers and challenges underserved 

communities face in understanding and 

accessing health care. The Departments 

seek comment from those who are 

members of, advocate for, and work 

with underserved communities 

regarding the impact of these interim 

final rules. 

C. Preventing Surprise Medical Bills 

Under the Consolidated Appropriations 

Act, 2021 

On December 27, 2020, the 

Consolidated Appropriations Act, 2021 

(CAA), which included the No Surprises 

Act, was signed into law. The No 

Surprises Act provides federal 

protections against surprise billing and 

limits out-of-network cost sharing under 

many of the circumstances in which 

surprise bills arise most frequently.22

The CAA added provisions that apply 

to group health plans and health 

insurance issuers in the group and 

individual market in a new Part D of 

title XXVII of the PHS Act, and also 

added new provisions to part 7 of 

ERISA, and subchapter B of chapter 100 

of the Code. Section 102 of the No 

Surprises Act added section 9816 of the 

Code, section 716 of ERISA, and section 

2799A–1 of the PHS Act, which contain 

limitations on cost sharing, and 

requirements for initial payments for 

emergency services and for nonemergency services provided by 


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nonparticipating providers at certain 

participating health care facilities. 

Section 103 of the No Surprises Act 

amended section 9816 of the Code, 

section 716 of ERISA, and section 

2799A–1 of the PHS Act to establish an 

independent dispute resolution (IDR) 

process that allows plans and issuers 

and nonparticipating providers and 

nonparticipating emergency facilities to 

resolve disputes over out-of-network 

rates. Section 105 of the No Surprises 

Act added section 9817 of the Code, 

section 717 of ERISA, and section 

2799A–2 of the PHS Act, which contain 

limitations on cost sharing and 

requirements for initial payments to 

nonparticipating providers of air 

ambulance services, and allow plans 

and issuers and such providers of air 

ambulance services to access the IDR 

process. The CAA also amended the 

FEHBA, as discussed in more detail in 

section I.D. of this preamble. 

The CAA provisions that apply to 

health care providers and facilities and 

providers of air ambulance services, 

such as cost-sharing requirements, 

prohibitions on balance billing for 

certain items and services, and 

requirements related to disclosures 

about balance billing protections, were 

added to title XXVII of the PHS Act in 

a new part E. 

The Departments are issuing 

regulations in several phases 

implementing provisions of title I (No 

Surprises Act) and title II 

(Transparency) of Division BB of the 

CAA. Later this year, the Departments 

intend to issue regulations regarding the 

federal IDR process (sections 103 and 

105 of Division BB), patient protections 

through transparency and the patientprovider dispute resolution process 

(section 112), and price comparison 

tools (section 114). The Departments 

also intend to undertake rulemaking this 

year to propose the form and manner in 

which plans, issuers, and providers of 

air ambulance services would report 

information regarding air ambulance 

services (section 106). In addition, HHS 

intends to undertake rulemaking to 

implement requirements on health 

insurance issuers offering individual 

health insurance coverage or short-term, 

limited-duration insurance to disclose 

and report information regarding direct 

or indirect compensation provided to 

agents and brokers (section 202(c)), as 

well as provisions related to HHS 

enforcement of requirements on issuers, 

non-federal governmental group health 

plans, providers, facilities, and 

providers of air ambulance services. 

The CAA also includes provisions 

regarding transparency in plan and 

insurance identification cards (section 

107), continuity of care (section 113), 

accuracy of provider network directories 

(section 116), and prohibition on gag 

clauses (section 201) that are applicable 

for plan years beginning on or after 

January 1, 2022; and pharmacy benefit 

and drug cost reporting (section 204) 

that is required by December 27, 2021. 

The Departments intend to undertake 

rulemaking to fully implement these 

provisions, but rulemaking regarding 

some of these provisions might not 

occur until after January 1, 2022. The 

Departments note that any such 

rulemaking to fully implement these 

provisions will include a prospective 

applicability date that provides plans, 

issuers, providers, and facilities, as 

applicable, a reasonable amount of time 

to comply with new or clarified 

requirements. Until rulemaking to fully 

implement these provisions is finalized 

and effective, plans and issuers are 

expected to implement the requirements 

using a good faith, reasonable 

interpretation of the statute. The 

Departments intend to issue guidance in 

the near future regarding their 

expectations related to good faith 

compliance with these provisions. 

D. Preventing Surprise Medical Bills for 

Federal Employees Health Benefits 

Plans 

The No Surprises Act also amended 

the FEHBA, 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 provisions of 

sections 9816, 9817, and 9822 of the 

Code; sections 716, 717, and 722 of 

ERISA; and sections 2799A–1, 2799A–2, 

and 2799A–7 of the PHS Act (as 

applicable) in the same manner as they 

apply with respect to a group health 

plan or health insurance issuer offering 

group or individual health insurance 

coverage. Likewise, the provisions of 

sections 2799B–1, 2799B–2, 2799B–3, 

and 2799B–5 of the PHS Act apply to 

health care providers, facilities, and 

providers of air ambulance services with 

respect to covered individuals in FEHB 

plans in the same manner as they apply 

to participants, beneficiaries, or 

enrollees in group health plans or 

coverage offered by health insurance 

issuers. 

OPM is charged with administering 

the FEHB Program and maintains 

oversight and enforcement authority 

with respect to FEHB health benefits 

plans, which are federal governmental 

plans. Generally, under 5 U.S.C. 

8902(p), each FEHB contract must 

require a carrier to comply with certain 

PHS Act, ERISA, and Code requirements 

in the same manner as they apply to a 

group health plan or health insurance 

issuer. 

II. Executive Summary 

These interim final rules implement 

provisions of the No Surprises Act that: 

(1) Apply to group health plans, health 

insurance issuers offering group or 

individual health insurance coverage, 

and carriers in the FEHB Program to 

provide protections against balance 

billing and out-of-network cost sharing 

with respect to emergency services, nonemergency services furnished by 

nonparticipating providers at certain 

participating health care facilities, and 

air ambulance services furnished by 

nonparticipating providers of air 

ambulance services; (2) prohibit 

nonparticipating providers, health care 

facilities, and providers of air 

ambulance services from balance billing 

participants, beneficiaries, and enrollees 

in certain situations, and permit these 

providers and facilities to balance bill 

individuals if certain notice and consent 

requirements in the No Surprises Act 

are satisfied; (3) require certain health 

care facilities and providers to provide 

disclosures of federal and state patient 

protections against balance billing; (4) 

recodify certain patient protections that 

initially appeared in the ACA and that 

the No Surprises Act applies to 

grandfathered plans; and (5) set forth 

complaints processes with respect to 

violations of the protections against 

balance billing and out-of-network cost 

sharing under the No Surprises Act. 

These interim final rules protect 

individuals from surprise medical bills 

for emergency services, air ambulance 

services furnished by nonparticipating 

providers, and non-emergency services 

furnished by nonparticipating providers 

at participating facilities in certain 

circumstances. Among other 

requirements, these interim final rules 

require emergency services to be 

covered without any prior 

authorization, without regard to 

whether the health care provider 

furnishing the emergency services is a 

participating provider or a participating 

emergency facility with respect to the 

services, and without regard to any 

other term or condition of the plan or 

coverage other than the exclusion or 

coordination of benefits or a permitted 

affiliation or waiting period. 

Additionally, emergency services 

include certain services in an 

emergency department of a hospital or 

an independent freestanding emergency 

department, as well as post-stabilization 

services in certain instances. 

With respect to emergency services, 

air ambulance services furnished by 

nonparticipating providers, and nonVerDate Sep<11>2014 20:26 Jul 12, 2021 Jkt 253001 PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 E:\FR\FM\13JYR2.SGM 13JYR2

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emergency services furnished by 

nonparticipating providers at 

participating facilities, these interim 

final rules limit cost sharing for out-ofnetwork services to in-network levels, 

require such cost sharing to count 

toward any in-network deductibles and 

out-of-pocket maximums, and prohibit 

balance billing, as required by the No 

Surprises Act. 

These interim final rules specify that 

cost-sharing amounts for such services 

furnished by nonparticipating 

emergency facilities and 

nonparticipating providers at 

participating facilities must be 

calculated based on one of the following 

amounts: (1) An amount determined by 

an applicable All-Payer Model 

Agreement under section 1115A of the 

Social Security Act; (2) if there is no 

such applicable All-Payer Model 

Agreement, an amount determined by a 

specified state law; or (3) if there is no 

such applicable All-Payer Model 

Agreement or specified state law, the 

lesser of the billed charge or the plan’s 

or issuer’s median contracted rate, 

referred to as the qualifying payment 

amount (QPA). Cost-sharing amounts for 

air ambulance services provided by 

nonparticipating providers must be 

calculated using the lesser of the billed 

charge or the QPA, and the cost-sharing 

requirement that would apply if such 

services were provided by a 

participating provider. 

Under these interim final rules, 

balance billing for services covered by 

the rules generally is prohibited, and the 

total amount to be paid to the provider 

or facility, including any cost sharing, is 

based on: (1) An amount determined by 

an applicable All-Payer Model 

Agreement under section 1115A of the 

Social Security Act; (2) if there is no 

such applicable All-Payer Model 

Agreement, an amount determined by a 

specified state law; (3) if there is no 

such applicable All-Payer Model 

Agreement or specified state law, an 

amount agreed upon by the plan or 

issuer and the provider or facility; or (4) 

if none of those three conditions apply, 

an amount determined by an IDR entity. 

In general, under the No Surprises Act 

and these interim final rules, the 

protections that limit cost sharing and 

prohibit balance billing do not apply to 

certain post-stabilization services, or to 

certain non-emergency services 

performed by nonparticipating 

providers at participating health care 

facilities, if the provider or facility 

provides notice to the participant, 

beneficiary, or enrollee, and obtains the 

individual’s consent to waive the 

balance billing protections. However, 

providers and facilities may not provide 

such notice or seek consent from 

individuals in certain circumstances 

where surprise bills are likely to occur, 

such as for ancillary services provided 

by nonparticipating providers in 

connection with non-emergency care in 

a participating facility. In such 

circumstances, balance billing is 

prohibited, and the other protections of 

the No Surprises Act, such as innetwork cost-sharing requirements, 

continue to apply. 

Neither the No Surprises Act, nor 

these interim final rules, universally 

protect individuals from every high or 

unexpected medical bill. For example, 

an individual may be enrolled in a 

group health plan or health insurance 

coverage that provides little or no 

coverage for their particular health care 

condition or the items and services 

necessary to treat that condition. In 

addition, balance billing continues to be 

permitted, unless prohibited by state 

law or contract, in circumstances where 

these interim final rules do not apply, 

such as for non-emergency items or 

services provided at facilities that are 

not included within the definition of 

health care facility in these interim final 

rules. Nonetheless, the No Surprises Act 

and these interim final rules provide 

relief from some of the more common 

scenarios where a participant, 

beneficiary, or enrollee might otherwise 

be faced with high and unexpected 

medical costs. 

These interim final rules establish a 

complaints process for receiving and 

resolving complaints related to these 

new balance billing protections. 

These interim final rules also 

implement the requirement of the No 

Surprises Act that certain health care 

providers and facilities make publicly 

available, post on a public website, and 

provide a one-page notice to individuals 

regarding: (1) The requirements and 

prohibitions applicable to the provider 

or facility under sections 2799B–1 and 

2799B–2 of the PHS Act and their 

implementing regulations; (2) any 

applicable state balance billing 

requirements; and (3) how to contact 

appropriate state and federal agencies if 

the individual believes the provider or 

facility has violated the requirements 

described in the notice. 

Section 116 of the No Surprises Act 

also added section 9820(c) of the Code, 

section 720(c) of ERISA, and section 

2799A–5(c) of the PHS Act, which 

include similar disclosure requirements 

applicable to plans and issuers. In 

general, under these provisions, plans 

and issuers must make publicly 

available, post on a public website of 

the plan or issuer, and include on each 

explanation of benefits for an item or 

service with respect to which the 

requirements under section 9816 of the 

Code, section 716 of ERISA, and section 

2799A–1 of the PHS Act apply, 

information on the requirements 

applied under these aforementioned 

sections, as applicable; on the 

requirements and prohibitions applied 

under sections 2799B–1 and 2799B–2 of 

the PHS Act; on other applicable state 

laws on out-of-network balance billing; 

and on contacting appropriate state and 

federal agencies in the case that an 

individual believes that such a provider 

or facility has violated the prohibition 

against balance billing. These disclosure 

requirements are applicable for plan 

years beginning on or after January 1, 

2022. To reduce burden and facilitate 

compliance with these disclosure 

requirements, the Departments are 

concurrently issuing a model disclosure 

notice that health care providers, 

facilities, group health plans, and health 

insurance issuers may, but are not 

required to, use to satisfy the disclosure 

requirements regarding the balance 

billing protections. The Departments 

will consider use of the model notice in 

accordance with the accompanying 

instructions to be good faith compliance 

with the disclosure requirements of 

section 9820(c) of the Code, section 

720(c) of ERISA, and section 2799A–5(c) 

of the PHS Act, if all other applicable 

requirements are met. In addition, HHS 

will consider use of the model notice in 

accordance with the accompanying 

instructions to be good faith compliance 

with the disclosure requirements of 

section 2799B–3 of the PHS Act and 45 

CFR 149.430, if all other applicable PHS 

Act requirements are met. The 

Departments may address the 

requirements under section 9820(c) of 

the Code, section 720(c) of ERISA, and 

section 2799A–5(c) of the PHS Act, as 

added by the No Surprises Act, in more 

detail in future guidance or rulemaking. 

Until further guidance is issued, plans 

and issuers are expected to implement 

the requirements of section 9820(c) of 

the Code, section 720(c) of ERISA, and 

section 2799A–5(c) of the PHS Act using 

a good faith, reasonable interpretation of 

the law. The Departments will take into 

account the statutory applicability date 

and the timeframe for implementation 

when determining good faith 

compliance with the law. 

These interim final rules generally 

apply to group health plans and health 

insurance issuers offering group or 

individual health insurance coverage 

(including grandfathered health plans) 

with respect to plan years (in the 

individual market, policy years) 

beginning on or after January 1, 2022, as 


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23 5 U.S.C. 8902(m)(1); see Coventry Health Care 

of Missouri, Inc. v. Nevils, 137 S. Ct. 1190 (2017). 24 42 U.S.C. 1395dd. 

well as to health care providers and 

facilities, and providers of air 

ambulance services beginning on 

January 1, 2022. 

In the OPM interim final rules 

included in this rulemaking, OPM 

adopts all provisions of the 

Departments’ interim final rules that 

address the sections of the Code, ERISA, 

and the PHS Act that are referenced in 

5 U.S.C. 8902(p). In the OPM interim 

final rules, OPM defines terms unique to 

the FEHB Program, adapts some of the 

Departments’ rules as necessary to 

properly integrate with the existing 

FEHB Program regulatory and 

contractual structure, sets forth the 

circumstances in which OPM will 

enforce these rules against FEHB 

carriers, and sets forth the types of court 

actions involving the FEHB Program 

that may be brought against OPM with 

respect to the No Surprises Act. 

In effectuating compliance with 5 

U.S.C. 8902(p), FEHB contract terms 

that relate to the nature, provision, or 

extent of coverage or benefits (including 

payments with respect to benefits) 

supersede and preempt state law or 

local law, or any regulation issued 

thereunder, which relates to health 

insurance or plans.23 OPM contracts 

with FEHB carriers may include terms 

that adopt state law as governing for a 

particular purpose. 

III. Overview of the Interim Final 

Rules—Departments of HHS, Labor, 

and the Treasury 

A. Definitions 

The provisions of the Code, ERISA, 

and the PHS Act added by the No 

Surprises Act, as well as these interim 

final rules, include defined terms that 

are specific to the requirements and 

implementation of the law. Definitions 

of these key terms are described 

throughout this preamble. These terms 

help define the scope of the balance 

billing protections and how cost-sharing 

amounts and payment levels are 

determined. 

The Departments note that these 

interim final rules define the term 

‘‘physician or health care provider’’ to 

mean a physician or other health care 

provider who is acting within the scope 

of practice of that provider’s license or 

certification under applicable state law, 

but the definition specifically excludes 

providers of air ambulance services. The 

Departments recognize that, although 

the No Surprises Act does not define 

‘‘provider,’’ it uses the term in a manner 

that includes providers of air ambulance 

services in some provisions. For 

example, the No Surprises Act added 

section 2799B–4 of the PHS Act, which 

specifically includes providers of air 

ambulance services when referencing 

providers. However, certain other 

provisions in the No Surprises Act 

apply only to providers of air 

ambulance services, or apply to health 

care providers generally, but by their 

terms are inapplicable to providers of 

air ambulance services. As an example 

of the latter, the No Surprises Act added 

section 2799B–2 of the PHS Act, which 

generally prohibits balance billing by 

nonparticipating health care providers 

furnishing non-emergency services at 

participating health care facilities. 

Although this provision does not 

explicitly exclude providers of air 

ambulance services, providers of air 

ambulance services would not furnish 

non-emergency services at participating 

health care facilities. Therefore, the 

provision does not apply to providers of 

air ambulance services (such providers 

are, however, prohibited from balance 

billing under section 2799B–5 of the 

PHS Act). Similarly, section 2799B–3 of 

the PHS Act, which requires a health 

care provider to inform individuals of 

the requirements and prohibitions on 

such health care provider in sections 

2799B–1 and 2799B–2 of the PHS Act 

(neither of which apply to providers of 

air ambulance services), does not by its 

terms apply to providers of air 

ambulance services. Therefore, these 

interim final rules define ‘‘physician or 

health care provider’’ to exclude 

providers of air ambulance services, in 

order to help clarify which provisions of 

the No Surprises Act and interim final 

rules apply to providers of air 

ambulance services. In instances where 

provisions under the No Surprises Act, 

as implemented in these interim final 

rules, apply to providers of air 

ambulance services, the provisions 

explicitly reference air ambulance 

providers. Conversely, where providers 

of air ambulance services are not 

explicitly mentioned, the provisions do 

not apply. 

The Departments seek comment on 

the terms defined in these interim final 

rules, including the appropriateness and 

usability of the definitions, and whether 

additional terms should be defined in 

future rulemaking. 

B. Preventing Surprise Medical Bills 

1. Scope of the New Surprise Billing 

Protections 

i. Emergency Services 

Under section 9816(a) of the Code, 

section 716(a) of ERISA, and section 

2799A–1(a) of the PHS Act, and these 

interim final rules, if a group health 

plan, or a health insurance issuer 

offering group or individual health 

insurance coverage, provides or covers 

any benefits with respect to services in 

an emergency department of a hospital 

or with respect to emergency services in 

an independent freestanding emergency 

department, the plan or issuer must 

cover emergency services as defined in 

these interim final rules and such 

coverage must be provided in 

accordance with these interim final 

rules. 

A plan or issuer providing coverage of 

emergency services must do so without 

the individual or the health care 

provider having to obtain prior 

authorization (including when the 

emergency services are provided out-ofnetwork) and without regard to whether 

the health care provider furnishing the 

emergency services is a participating 

provider or a participating emergency 

facility with respect to the services. The 

emergency services must be provided 

without regard to any other term or 

condition of the plan or coverage other 

than the exclusion or coordination of 

benefits (to the extent not inconsistent 

with benefits for an emergency medical 

condition as defined in these interim 

final rules), an affiliation or waiting 

period as permitted under the Code, 

ERISA, or the PHS Act, or applicable 

cost-sharing requirements. For a plan or 

health insurance coverage with a 

network of providers that provides 

benefits for emergency services, the plan 

or issuer may not impose any 

administrative requirement or limitation 

on coverage for emergency services 

received from nonparticipating 

providers or nonparticipating 

emergency facilities that is more 

restrictive than the requirements or 

limitations that apply to emergency 

services received from participating 

providers or participating emergency 

facilities. In addition, such plan or 

health insurance coverage must comply 

with the requirements regarding cost 

sharing, payment amounts, and 

processes for resolving billing disputes 

described elsewhere in this preamble. 

The terms ‘‘emergency medical 

condition,’’ ‘‘emergency services,’’ and 

‘‘to stabilize’’ generally have the 

meaning given to them under the 

Emergency Medical Treatment and 

Labor Act (EMTALA), section 1867 of 

the Social Security Act.24 Emergency 

services include: (1) An appropriate 

medical screening examination that is 

within the capability of the emergency 

department of a hospital or of an 

independent freestanding emergency 

department, including ancillary services 


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25 42 CFR 489.24(a)(1)(ii); 68 FR 53221–53264 

(Sept. 9, 2003); 73 FR 48654–48668 (Aug. 19, 2008). 

26Association of State and Territorial Health 

Officials. As Urgent Care Centers Increase, 

Licensing Authority Falling Under State Health 

Agencies, (Oct. 11, 2018) available at https://

www.astho.org/StatePublicHealth/As-Urgent-CareCenters-Increase-Licensing-Authority-FallingUnder-State-Health-Agencies/10-11-18/. 

27See 42 U.S.C. 1395dd(e)(1)(A). 

28See also Am. Coll. of Emergency Physicians v. 

Blue Cross & Blue Shield of Georgia, No. 20–11511, 

2020 WL 6165852 (11th Cir. Oct. 22, 2020) (per 

curiam) (reversing dismissal of plaintiffs’ ACA and 

ERISA claims alleging defendants violated prudent 

layperson standard where review process was based 

upon physician review of medical records and 

diagnostic codes; prudent layperson standard 

ignores a patient’s final diagnosis and instead asks 

whether a person with average medical knowledge 

would reasonably think they need emergency 

services to address their symptoms). 

routinely available to the emergency 

department, to evaluate whether an 

emergency medical condition exists; 

and (2) such further medical 

examination and treatment as may be 

required to stabilize the individual 

(regardless of the department of the 

hospital in which the further medical 

examination and treatment is furnished) 

within the capabilities of the staff and 

facilities available at the hospital or the 

independent freestanding emergency 

department. 

Under section 2719A of the PHS Act, 

emergency services were defined to 

include: (1) A medical screening 

examination (as required under section 

1867 of the Social Security Act) that is 

within the capability of the emergency 

department of a hospital, including 

ancillary services routinely available to 

the emergency department to evaluate 

such emergency medical condition; and 

(2) such further medical examination 

and treatment as are required under 

section 1867 of the Social Security Act 

to stabilize the patient within the 

capabilities of the staff and facilities 

available at the hospital. HHS has 

previously interpreted the obligations 

on hospitals under EMTALA to provide 

medical examination and stabilization 

services to end when a patient is 

formally admitted in good faith.25

Section 9816(a) of the Code, section 

716(a) of ERISA, and section 2799A–1(a) 

of the PHS Act expand the definition of 

emergency services (as compared to 

section 2719A of the PHS Act) to 

include stabilization services 

‘‘regardless of the department of the 

hospital in which the further medical 

examination and treatment is 

furnished.’’ Therefore, the definition of 

emergency services in these interim 

final rules includes pre-stabilization 

services that are provided after the 

patient is moved out of the emergency 

department and admitted to a hospital, 

and these services will be subject to the 

protections of the No Surprises Act. 

Section 102 of the No Surprises Act 

further broadens the definition of 

emergency services to include 

emergency services provided at an 

independent freestanding emergency 

department. An independent 

freestanding emergency department is a 

health care facility (not limited to those 

described in the definition of health 

care facility at section 9816(b)(2)(A)(ii) 

of the Code, section 716(b)(2)(A)(ii) of 

ERISA, and section 2799A–1(b)(2)(A)(ii) 

of the PHS Act, as applicable) that 

provides emergency services, and is 

geographically separate and distinct 

from a hospital, and separately licensed 

as such by a state. The definition of 

‘‘independent freestanding emergency 

department’’ is intended to include any 

health care facility that is geographically 

separate and distinct from a hospital, 

and that is licensed by a state to provide 

emergency services, even if the facility 

is not licensed under the term 

‘‘independent freestanding emergency 

department.’’ 

Regulation of health care facilities 

varies by state. In particular, state 

regulation of urgent care centers varies 

significantly, and is evolving as these 

types of centers become more 

common.26 If under state licensure laws, 

urgent care centers are permitted to 

provide emergency services, then urgent 

care centers in that state that are 

geographically separate and distinct 

from a hospital would fall within the 

definition of independent freestanding 

emergency department for purposes of 

these interim final rules. In contrast, if 

state licensure of urgent care centers 

does not permit such facilities to 

provide emergency services as defined 

in these interim final rules, then urgent 

care centers in that state would not be 

treated as independent freestanding 

emergency departments for purposes of 

these interim final rules. Finally, the 

definition of emergency services also 

includes additional post-stabilization 

services, as discussed in section 

III.B.1.ii of this preamble. 

The term ‘‘emergency medical 

condition’’ means a medical condition 

manifesting itself by acute symptoms of 

sufficient severity (including severe 

pain) such that a prudent layperson, 

who possesses an average knowledge of 

health and medicine, could reasonably 

expect the absence of immediate 

medical attention to result in a 

condition described in EMTALA, 

including (1) placing the health of the 

individual (or, with respect to a 

pregnant woman, the health of the 

woman or her unborn child) in serious 

jeopardy, (2) serious impairment to 

bodily functions, or (3) serious 

dysfunction of any bodily organ or 

part.27 This definition includes mental 

health conditions and substance use 

disorders. 

The Departments are aware that some 

plans and issuers currently deny 

coverage of certain services provided in 

the emergency department of a hospital 

by determining whether an episode of 

care involves an emergency medical 

condition based solely on final 

diagnosis codes, such as International 

Classification of Diseases, Tenth 

Revision, Clinical Modification (ICD– 

10–CM) codes . In addition, some plans 

and issuers might automatically deny 

coverage based on a list of final 

diagnosis codes initially, without regard 

to the individual’s presenting symptoms 

or any additional review. Following an 

initial denial, plans and issuers might 

then provide for complete consideration 

of the claim, and apply the prudent 

layperson standard, only as part of an 

appeals process if the participant, 

beneficiary, or enrollee appeals. These 

practices are inconsistent with the 

emergency services requirements of the 

No Surprises Act and the ACA.28 This 

is true even if the process for complete 

consideration of the claim following an 

initial denial is not designated as a 

formal appeal. Instead, the 

determination of whether the prudent 

layperson standard is met must be made 

on a case-by-case basis before an initial 

denial of an emergency services claim. 

These interim final rules make clear 

that if a group health plan, or a health 

insurance issuer offering group or 

individual health insurance coverage, 

provides or covers any benefits with 

respect to services in an emergency 

department of a hospital or with respect 

to emergency services in an 

independent freestanding emergency 

department, the plan or issuer must 

cover emergency services without 

limiting what constitutes an emergency 

medical condition (as defined in these 

interim final rules) solely on the basis 

of diagnosis codes. When a plan or 

issuer denies coverage, in whole or in 

part, for a claim for payment of a service 

rendered in the emergency department 

of a hospital or independent 

freestanding emergency department, 

including services rendered during 

observation or surgical services, the 

determination of whether the prudent 

layperson standard has been met must 

be based on all pertinent documentation 

and be focused on the presenting 

symptoms (and not solely on the final 

diagnosis). This determination must 

take into account that the legal standard 


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29However, nothing in the statute or these 

interim final rules prevents a plan or issuer from 

approving coverage for emergency services solely 

on the basis of diagnosis codes, or from taking 

diagnostic codes into account when deciding 

payment for a claim for emergency services, 

provided a denial of coverage is not based solely on 

diagnosis codes. 

regarding the decision to seek 

emergency services is based on whether 

a prudent layperson (rather than a 

medical professional) would reasonably 

consider the situation to be an 

emergency.29 In covering emergency 

services, plans and issuers must also 

ensure that they do not restrict the 

coverage of emergency services by 

imposing a time limit between the onset 

of symptoms and the presentation of the 

participant, beneficiary, or enrollee at 

the emergency department. Similarly, 

plans and issuers also may not restrict 

the coverage of emergency services 

because the patient did not experience 

a sudden onset of the condition. 

The Departments are also aware that 

some plans and issuers that generally 

provide coverage for emergency services 

have nonetheless denied benefits for 

such services based on other general 

plan exclusions. For example, the 

Departments are aware of some plans 

and issuers denying claims for 

emergency services provided to 

dependent women who are pregnant, 

based on a general plan exclusion for 

dependent maternity care. As explained 

previously, both the coverage of 

emergency services rules issued under 

section 2719A of the PHS Act and the 

new emergency services requirements 

included in these interim final rules 

provide, in part, that if a plan or issuer 

provides or covers any benefits with 

respect to services in an emergency 

department of a hospital (or under these 

interim final rules, in an independent 

freestanding emergency department), 

emergency services must be provided 

‘‘without regard to any other term or 

condition of the plan or coverage (other 

than the exclusion or coordination of 

benefits . . . ).’’ The Departments clarify 

that this provision does not permit 

plans and issuers to exclude benefits for 

items and services that would otherwise 

constitute benefits for an emergency 

medical condition as defined under 

these interim final rules. This provision 

does not permit plans and issuers that 

cover emergency services to deny 

benefits for a participant, beneficiary, or 

enrollee with an emergency medical 

condition that receives emergency 

services, based on a general plan 

exclusion that would apply to items and 

services other than emergency services. 

ii. Post-Stabilization Services 

Under section 9816(a)(3)(C)(ii) of the 

Code, section 716(a)(3)(C)(ii) of ERISA, 

and section 2799A–1(a)(3)(C)(ii) of the 

PHS Act, emergency services include 

any additional items and services that 

are covered under a plan or coverage 

and furnished by a nonparticipating 

provider or nonparticipating emergency 

facility (regardless of the department of 

the hospital in which such items and 

services are furnished) after a 

participant, beneficiary, or enrollee is 

stabilized and as part of outpatient 

observation or an inpatient or outpatient 

stay with respect to the visit in which 

the other emergency services are 

furnished. Such additional items and 

services (referred to in this preamble as 

post-stabilization services) are 

considered emergency services subject 

to surprise billing protections unless the 

conditions enumerated in section 

9816(a)(3)(C)(ii)(II)(aa)–(cc) of the Code, 

section 716(a)(3)(C)(ii)(II)(aa)–(cc) of 

ERISA, or section 2799A– 

1(a)(3)(C)(ii)(II)(aa)–(cc) of the PHS Act, 

as applicable, are met, as well as such 

other conditions as specified by the 

Departments under paragraph (dd) of 

the respective sections. Therefore, these 

interim final rules provide that poststabilization services are emergency 

services unless all of the following 

conditions are met. 

First, the attending emergency 

physician or treating provider must 

determine that the participant, 

beneficiary, or enrollee is able to travel 

using nonmedical transportation or 

nonemergency medical transportation to 

an available participating provider or 

facility located within a reasonable 

travel distance, taking into 

consideration the individual’s medical 

condition. The HHS interim final rules 

codify this requirement at 45 CFR 

149.410(b)(1). For this purpose, a 

treating provider is a physician or 

health care provider who has evaluated 

the individual. It is generally expected 

that a treating provider with medical 

training and experience related to the 

individual’s specific medical condition 

will determine if the individual is able 

to travel using nonmedical 

transportation or nonemergency medical 

transportation to an available 

participating provider or facility located 

within a reasonable travel distance. This 

determination is based on all the 

relevant facts and circumstances and the 

individual should be involved in the 

decision-making process, if possible. 

The determination by the attending 

emergency physician or treating 

provider is binding on the facility for 

purposes of this requirement. This 

requirement is based on the 

Departments’ understanding that such 

provider is in the best position to make 

this determination. 

For individuals receiving care in or 

near their plan’s or issuer’s covered 

service area, as well as individuals with 

coverage that uses a national network of 

providers and facilities, the statutory 

criterion would generally be sufficient 

to ensure that an individual can freely 

choose, based on their medical 

condition, to receive post-stabilization 

services at a participating facility or 

participating provider. The additional 

requirement in these interim final rules 

that the individual be able to travel to 

an available participating provider or 

facility located within a reasonable 

travel distance, taking into 

consideration the individual’s medical 

condition, is necessary and appropriate 

to carry out the provision of the No 

Surprises Act, as the requirement is 

intended to address the common 

situations in which an individual has 

received emergency services in a 

geographic region far from where any 

participating providers or facilities are 

located. In cases where the individual 

cannot travel using nonmedical 

transportation or nonemergency medical 

transportation, or cases where there are 

no participating facilities or 

participating providers located within a 

reasonable travel distance, taking into 

account the individual’s medical 

condition, the Departments are of the 

view that individuals are unable to 

provide consent freely and, therefore, 

balance billing protections continue to 

apply. 

In addition, the Departments 

recognize that an individual’s 

transportation options may vary based 

on the individual’s location, social risk, 

and other risk factors. In cases of 

underserved and geographically isolated 

communities and those with social risk 

factors related to income and 

transportation options, individuals may 

face additional barriers to obtaining 

post-stabilization services without a 

disruption in care. For example, 

individuals may not have the ability to 

pay for a taxi, may not have access to 

a car, may not be able to safely take 

public transit due to their medical 

condition, or may not have public 

transit options available. In these cases, 

the net effect would be the same: The 

individual would face unreasonable 

travel burdens that could prevent them 

from being able to consent freely to a 

waiver of the otherwise applicable 

balance billing protections. The 

Departments expect the attending 

emergency physician or treating 

provider to consider such factors when 


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30Ethics guidance for physicians, published by 

the American Medical Association, states that 

physicians should ‘‘[a]ssess the patient’s ability to 

understand relevant medical information and the 

implications of treatment alternatives and to make 

an independent, voluntary decision’’ as part of the 

process of seeking informed consent. American 

Medical Association, Code of Medical Ethics 

Opinion 2.1.1, available at https://www.amaassn.org/system/files/2019-06/code-of-medicalethics-chapter-2.pdf (last visited April 5, 2021). See 

also Gostin, LO. Public Health Law, 217–218 (2000) 

(discussing the four elements of the doctrine of 

informed consent: Information, competency, 

voluntariness, and specificity). 

31For a discussion of strategies to improve 

informed consent processes for minority 

communities, see Quinn, S.C., et al. Improving 

Informed Consent with Minority Participants: 

Results from Researcher and Community Surveys, 

Journal of Empirical Research on Human Research 

Ethics, 7(5): 44–55 (Dec. 2012). 

assessing the individual’s ability to 

travel to a participating provider or 

facility. The Departments seek comment 

on the definition of ‘‘reasonable travel 

distance’’ and whether specific 

standards or examples should be 

provided regarding what constitutes an 

unreasonable travel burden. For 

example, should reasonable travel 

distance take into account only mileage, 

or also other factors, such as traffic or 

other route conditions that might make 

traveling difficult, time consuming, or 

hazardous? 

In contrast to situations where a 

participant, beneficiary, or enrollee is 

able to travel using nonmedical 

transportation or nonemergency medical 

transportation following stabilization, in 

the event that the individual requires 

medical transportation to travel, 

including transportation by either 

ground or air ambulance vehicle, the 

individual is not in a condition to 

receive notice or provide consent. 

Therefore, the surprise billing 

protections continue to apply to poststabilization services provided in 

connection with the visit for which the 

individual received emergency services. 

Second, the provider or facility 

furnishing post-stabilization services 

must satisfy the notice and consent 

criteria of section 2799B–2(d) of the 

PHS Act with respect to such items and 

services (which are implemented in 

HHS-only interim final rules at 45 CFR 

149.410(b)(2), and incorporate by 

reference the criteria for notice and 

consent in 45 CFR 149.420(c) through 

(g)). 

Third, the individual (or the 

individual’s authorized representative) 

must be in a condition to receive the 

information in the notice described in 

section 2799B–2 of the PHS Act (which 

is also implemented in 45 CFR 

149.410(b)(3)) and to provide informed 

consent under such section, in 

accordance with applicable state law. 

Whether an individual is in a condition 

to receive the information in the notice 

is determined by the attending 

physician or treating provider using 

appropriate medical judgment. It is 

generally expected that an attending 

physician or treating provider with 

medical training and experience related 

to the individual’s specific medical 

condition will make this determination 

based on all the relevant facts and 

circumstances. In addition to applying 

any requirements under state law, such 

medical professionals should apply the 

same principles as they would when 

determining if a patient is able to 

provide informed consent for 

treatment.30 They should assess 

whether an individual is capable of 

understanding the information provided 

in the notice and the implications of 

consenting. Consideration must be given 

to the individual’s state of mind after 

receiving the emergency services and 

the individual’s emotional state at the 

time of consent. For example, 

consideration must be given to the effect 

of any alcohol or drug use by the 

individual, including the use or 

administration of prescribed 

medications, as well as to any pain the 

individual is experiencing, and the 

impact of those factors on the patient’s 

state of mind. If the individual is 

experiencing a mental or behavioral 

health episode or displaying symptoms 

of a mental or behavioral health 

disorder, or is impaired by a substance 

abuse disorder, consideration should 

also be given as to whether the 

individual’s condition impairs their 

ability to receive the information in the 

notice and provide informed consent. In 

addition, consideration must be given to 

cultural and contextual factors that may 

affect the informed decision-making and 

consent process for members of 

underserved communities, including 

lack of trust arising from historical 

inequities, misinformation about the 

informed consent process, or barriers to 

comprehension of the information given 

through the informed consent process 

and after the informed consent 

document is signed.31 These barriers 

may include accessibility, language, and 

literacy barriers. In addition, the 

informed consent must be obtained in a 

way that adheres to all civil rights 

protections cited within this 

rulemaking, ensuring that all 

individuals including those from 

underserved, underrepresented 

communities, with limited English 

proficiency, and with disabilities, are 

able to understand and freely make 

informed decisions. 

Consent must be made voluntarily, 

meaning the individual must be able to 

consent freely, without undue 

influence, fraud, or duress. If poststabilization services must be provided 

quickly after the emergency services are 

provided, it may be challenging for the 

individual or their authorized 

representative to have adequate time to 

make a clear-minded decision regarding 

consent. Consent obtained through a 

threat of restraint or immediacy of the 

need for treatment is not voluntary. In 

addition, the emergency physician or 

treating provider should consider 

whether the individual has reasonable 

options regarding post-stabilization 

services, transport, or service provider 

or facility. The Departments are of the 

view that the post-stabilization notice 

and consent procedures should 

generally be applied in limited 

circumstances, where the individual 

knowingly and purposefully seeks care 

from a nonparticipating provider or 

facility (such as deciding to go under 

the care of a specific provider or facility 

that the individual is familiar or 

comfortable with), and that the process 

should not be permitted to circumvent 

the consumer protections in the No 

Surprises Act. 

Fourth, the provider or facility must 

satisfy any additional requirements or 

prohibitions as may be imposed under 

applicable state law. These interim final 

rules include this criterion recognizing 

that some state laws do not permit 

exceptions to state balance billing 

protections, such as allowing 

individuals to consent to waive 

protections. Thus, states may impose 

stricter standards by which poststabilization services will be exempted 

from the surprise billing protections 

under these interim final rules, or states 

might not permit exceptions at all. This 

requirement is codified in the HHS 

interim final rules at 45 CFR 

149.410(b)(5). 

The No Surprises Act authorizes the 

Departments to specify other conditions 

that must be satisfied for poststabilization services to be excepted 

from the definition of emergency 

services for purposes of the No 

Surprises Act. The Departments solicit 

comments on the conditions described 

earlier in this section. The Departments 

also seek comment on whether there are 

any additional conditions that would be 

appropriate to designate under the 

definition of emergency services, such 

as conditions relating to coordinating 

care transitions to participating 

providers and facilities. The 

Departments also solicit comments on 


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32 In contrast, as discussed in section III.B.2.vi of 

this preamble, these interim final rules do not 

include negotiated rates under single-case 

agreements in the methodology for calculating the 

qualifying payment amount. 

what guidelines, beyond state laws 

regarding informed consent, may be 

needed to determine when an 

individual is in a condition to receive 

the written notice and provide consent. 

For example, are standards needed to 

account for individuals who are 

experiencing severe pain, intoxication, 

incapacitation, or dementia after being 

stabilized following an emergency 

medical condition? 

iii. Non-Emergency Services Performed 

by Nonparticipating Providers at 

Participating Health Care Facilities 

Section 9816(b) of the Code, section 

716(b) of ERISA, section 2799A–1(b) of 

the PHS Act, and these interim final 

rules, apply surprise billing protections 

in the case of non-emergency services 

furnished by nonparticipating providers 

during a visit by a participant, 

beneficiary, or enrollee at a participating 

health care facility, unless the notice 

and consent requirements, as specified 

in these interim final rules, have been 

met. 

Specifically, if a group health plan, or 

a health insurance issuer offering group 

or individual health insurance coverage, 

provides or covers benefits with respect 

to items and services (other than 

emergency services to which section 

9816(a) of the Code, section 716(a) of 

ERISA, or section 2799A–1(a) of the 

PHS Act applies), the plan or issuer 

must cover such items and services 

furnished to a participant, beneficiary, 

or enrollee of the plan or coverage by a 

nonparticipating provider with respect 

to a visit at a participating health care 

facility in accordance with these interim 

final rules, including the requirements 

regarding cost sharing, payment 

amounts, and processes for resolving 

billing disputes described elsewhere in 

this preamble. 

iv. Health Care Facilities 

These interim final rules, consistent 

with section 9816(b)(2)(A) of the Code, 

section 716(b)(2)(A) of ERISA, and 

section 2799A–1(b)(2)(A) of the PHS 

Act, define a participating health care 

facility, in the context of non-emergency 

services, as a health care facility that has 

a contractual relationship directly or 

indirectly with a group health plan or 

health insurance issuer offering group or 

individual health insurance coverage 

setting forth the terms and conditions 

on which a relevant item or service is 

provided to a participant, beneficiary, or 

enrollee under the plan or coverage, 

respectively. These interim final rules 

also specify that a single case agreement 

between a health care facility and a plan 

or issuer, used to address unique 

situations in which a participant, 

beneficiary, or enrollee requires services 

that typically occur out-of-network 

constitutes a contractual relationship for 

purposes of this definition, and is 

limited to the parties to the agreement 

with respect to the particular individual 

involved. Thus, when non-emergency 

services are furnished by a 

nonparticipating provider at a health 

care facility that has a single case 

agreement in place with respect to the 

individual being treated, as opposed to 

an agreement or contract that would 

apply to all the plan’s or issuer’s 

participants, beneficiaries, or enrollees, 

those non-emergency services would be 

subject to the protections described in 

26 CFR 54.9816–5T, 29 CFR 2590.716– 

5, and 45 CFR 149.120, as applicable, 

and the corresponding requirements on 

providers at 45 CFR 149.420. The 

Departments are of the view that it is 

reasonable that an individual would 

expect items and services delivered at a 

health care facility that has a single case 

agreement in place with respect to the 

individual’s care to be delivered on an 

in-network basis. Thus, these interim 

final rules apply the same protections in 

this circumstance as would apply at 

health care facilities that participate in 

the plan or issuer’s network.32 The 

facility is considered a participating 

facility only with respect to items and 

services furnished to the individual 

whose care is covered by the single case 

agreement. Similarly, these interim final 

rules define a participating emergency 

facility to include a facility that has a 

single case agreement in place with a 

plan or issuer with respect to a specific 

individual’s care. The Departments seek 

comment on this approach. 

For this purpose, a health care facility 

described in the statute is each of the 

following, in the context of nonemergency services: (1) A hospital (as 

defined in 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. 

In addition, section 

9816(b)(2)(A)(ii)(V) of the Code, section 

716(b)(2)(A)(ii)(V) of ERISA, and section 

2799A–1(b)(2)(A)(ii)(V) of the PHS Act 

authorize the Departments to designate 

additional facilities as health care 

facilities. The Departments solicit 

comments on other facilities that would 

be appropriate to designate as health 

care facilities. The Departments are 

interested in comments identifying 

types of facilities in which surprise bills 

frequently arise, and are particularly 

interested in comments regarding 

whether urgent care centers or retail 

clinics should be designated as health 

care facilities for purposes of these 

interim final rules. 

The Departments recognize that state 

regulation of urgent care centers varies 

significantly, as does the type of 

services they are permitted to provide 

under state law. Under these interim 

final rules, emergency services provided 

at urgent care centers that are licensed 

in a manner that brings them within the 

definition of independent freestanding 

emergency department would be subject 

to cost-sharing and balance billing 

protections, among others. However, 

given significant variation in state law 

definitions, urgent care centers are not 

included within the definition of health 

care facilities, in the context of nonemergency services. Thus, in cases 

where non-emergency services are 

furnished at participating urgent care 

centers by nonparticipating providers, 

those services would not receive the 

protections under these interim final 

rules. However, the Departments are of 

the view that it is possible that 

individuals may be using urgent care 

centers (regardless of how they are 

licensed) in a similar way to how they 

use independent freestanding 

emergency departments, in which case 

it may be appropriate to designate 

urgent care centers as health care 

facilities. The Departments seek 

comment on the degree to which 

individuals may be using urgent care 

centers in a similar way to how they use 

independent freestanding emergency 

departments. The Departments seek data 

on how frequently surprise bills arise in 

the context of urgent care centers. The 

Departments also seek comment on 

whether plans and issuers generally 

contract separately with urgent care 

centers and the providers who work at 

the centers, and how frequently 

contracting practices result in 

nonparticipating providers furnishing 

services at participating urgent care 

centers. The Departments also seek 

comment on potential definitions of the 

term urgent care center. 

v. Items and Services Within the Scope 

of a Visit 

In addition to items and services 

furnished by a provider at the facility, 

a ‘‘visit’’ to a participating health care 

facility includes the furnishing of 

equipment and devices, telemedicine 

services, imaging services, laboratory 

services, and preoperative and 


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postoperative services, regardless of 

whether the provider furnishing such 

items or services is at the facility. These 

services are not limited based on 

whether the provider furnishing the 

services is physically located at the 

facility. For example, if a sample is 

collected during an individual’s 

hospital visit and sent to an off-site 

laboratory, the laboratory services 

would be considered to be part of the 

individual’s visit to a participating 

health care facility, if laboratory services 

are covered by the plan or coverage. 

Similarly, if an individual receives a 

consultation with a specialist via 

telemedicine during a visit to a 

participating hospital, those 

telemedicine services would be 

considered part of the individual’s visit 

to a participating health care facility. 

The statutory definition of ‘‘visit’’ also 

provides authority for the Departments 

to specify other items and services. The 

Departments solicit comments regarding 

other items and services that would be 

appropriate to include within the scope 

of a visit for purposes of these interim 

final rules. 

The No Surprises Act and these 

interim final rules provide for 

exceptions to the balance billing 

prohibitions and cost-sharing 

requirements if the participant, 

beneficiary, or enrollee is provided a 

compliant written notice and consents 

to receive such services from a 

nonparticipating provider at a 

participating health care facility. 

However, these exceptions do not apply 

with respect to certain ancillary services 

(in the context of non-emergency 

services) and other services under 

certain conditions, as discussed later in 

this preamble. 

vi. Air Ambulance Services 

Section 105 of the No Surprises Act 

added section 9817 of the Code, section 

717 of ERISA, and section 2799A–2 of 

the PHS Act to address surprise air 

ambulance bills. These provisions apply 

in the case of a participant, beneficiary, 

or enrollee who receives services from 

a nonparticipating provider of air 

ambulance services, meaning medical 

transport by a rotary-wing air 

ambulance, as defined in 42 CFR 

414.605, or fixed-wing air ambulance, as 

defined in 42 CFR 414.605. These 

interim final rules apply these 

provisions where a plan or coverage 

generally has a network of participating 

providers and provides or covers any 

benefits for air ambulance services, even 

if the plan or coverage does not have in 

its network any providers of air 

ambulance services. With respect to air 

ambulance services furnished by 

nonparticipating providers (including 

inter-facility transports), plans and 

issuers must comply with the 

requirements regarding cost sharing, 

payment amounts, and processes for 

resolving billing disputes described 

elsewhere in this preamble, if such 

services would be covered if provided 

by a participating provider with respect 

to such plan or coverage. 

2. Determination of the Cost-Sharing 

Amount and Payment Amount to 

Providers and Facilities 

i. In General 

Under section 9816(a) of the Code, 

section 716(a) of ERISA, section 2799A– 

1(a) of the PHS Act, and these interim 

final rules, if a plan or issuer provides 

or covers any benefits with respect to 

services in an emergency department of 

a hospital or with respect to emergency 

services in an independent freestanding 

emergency department, the cost-sharing 

requirement for such services performed 

by a nonparticipating provider or 

nonparticipating emergency facility 

must not be greater than the 

requirement that would apply if such 

services were provided by a 

participating provider or a participating 

emergency facility. Additionally, if a 

plan or issuer provides or covers any 

benefits for non-emergency items and 

services furnished by a nonparticipating 

provider with respect to a visit at a 

participating health care facility, unless 

the provider has satisfied certain notice 

and consent criteria with respect to such 

items and services, the plan or issuer 

may not impose a cost-sharing 

requirement for such items and services 

that is greater than the cost-sharing 

requirement that would apply had such 

items or services been furnished by a 

participating provider. Similarly, if a 

plan or issuer provides or covers 

benefits for air ambulance services, the 

plan or issuer must cover such services 

from a nonparticipating provider in 

such a manner that the cost-sharing 

requirement with respect to such 

services must be the same requirement 

that would apply if such services were 

provided by a participating provider. 

For example, if a plan or issuer imposes 

a 20 percent coinsurance rate for 

emergency services from participating 

providers or participating emergency 

facilities, the plan or issuer may not 

impose a coinsurance rate on emergency 

services from nonparticipating 

providers or facilities that exceeds 20 

percent. Stakeholders have reported that 

network participation rates are low 

among providers of air ambulance 

services. In instances where a plan or 

issuer does not have an established costsharing requirement that applies 

specifically to participating providers, 

the plan or issuer must calculate the 

cost-sharing amount using the generally 

applicable cost-sharing requirement for 

the relevant item or service under the 

plan or coverage. 

Under sections 9816(a) and (b) and 

9817(a) of the Code, sections 716(a) and 

(b) and 717(a) of ERISA, sections 

2799A–1(a) and (b) and 2799A–2(a) of 

the PHS Act, and these interim final 

rules, any cost-sharing payments for 

emergency services, non-emergency 

services furnished by a nonparticipating 

provider in a participating health care 

facility, and air ambulance services 

furnished by a nonparticipating 

provider must be counted toward any 

in-network deductible or out-of-pocket 

maximums applied under the plan or 

coverage (including the annual 

limitation on cost sharing under section 

2707(b) of the PHS Act) (as applicable), 

respectively (and these in-network 

deductibles and out-of-pocket 

maximums must be applied) in the same 

manner as if such cost-sharing payments 

were made with respect to services 

furnished by a participating provider or 

facility. 

ii. Cost-Sharing Amount 

Section 9816(a)(1)(C)(iii) of the Code, 

section 716(a)(1)(C)(iii) of ERISA, 

section 2799A–1(a)(1)(C)(iii) of the PHS 

Act, and these interim final rules also 

specify that for emergency services 

furnished by a nonparticipating 

emergency facility, and for nonemergency services furnished by 

nonparticipating providers in a 

participating health care facility, cost 

sharing is generally calculated as if the 

total amount that would have been 

charged for the services by a 

participating emergency facility or 

participating provider were equal to the 

recognized amount for such services, as 

defined by the statute and in these 

interim final rules. 

The ‘‘recognized amount’’ is: (1) An 

amount determined by an applicable 

All-Payer Model Agreement under 

section 1115A of the Social Security 

Act; (2) if there is no applicable AllPayer Model Agreement, an amount 

determined by a specified state law; or 

(3) if there is no applicable All-Payer 

Model Agreement or specified state law, 

the lesser of the amount billed by the 

provider or facility or the QPA, which 

under these interim final rules generally 

is the median of the contracted rates of 

the plan or issuer for the item or service 

in the geographic region. 

By requiring plans and issuers to 

calculate the cost-sharing amount using 

the recognized amount, rather than the 


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33Absent the balance billing protections under 

the No Surprises Act and these interim final rules, 

the plan or issuer would not generally be expected 

to make a payment to the provider or facility prior 

to an individual satisfying the deductible. 

amount the plan or issuer ultimately 

pays the nonparticipating provider or 

nonparticipating emergency facility for 

the furnished items or services, the No 

Surprises Act and these interim final 

rules limit the effect of provider-payer 

disputes about payment amounts on 

participant, beneficiary, or enrollee cost 

sharing. Under the statute and these 

interim final rules, the provider or 

facility and plan or issuer separately 

determine the total payment amount for 

the furnished items or services, but that 

amount generally does not affect the 

cost-sharing amount the individual 

must pay. 

The Departments are aware that there 

may be some instances where a 

nonparticipating health care provider or 

facility might bill a plan or issuer for an 

item or service that is subject to these 

surprise billing protections in an 

amount less than the QPA. For example, 

this might be a relatively common 

occurrence for items whose patent 

expires after 2019, in instances where 

the QPA is based off the median of the 

contracted rates from 2019. In these 

instances, assuming the plan or issuer 

would not pay more than the billed 

charge, calculating cost sharing based 

on the QPA would require a participant, 

beneficiary, or enrollee to pay a higher 

percentage in cost sharing than if the 

items or services had been furnished by 

a participating provider. However, 

section 9816(a)(1)(C)(ii) of the Code, 

section 716(a)(1)(C)(ii) of ERISA, and 

section 2799A–1(a)(1)(C)(ii) of the PHS 

Act expressly prohibit plans and issuers 

from applying a cost-sharing 

requirement that is greater than the 

requirement that would apply if such 

services were provided by a 

participating provider or a participating 

emergency facility. Therefore, under 

these interim final rules, in 

circumstances where a specified state 

law or All-Payer Model Agreement does 

not apply to determine the cost-sharing 

amount, cost sharing must be based on 

the lesser of the QPA or the amount 

billed by the provider for the item or 

service. The different methods for 

determining the recognized amount are 

discussed in separate sections of this 

section III.B.2 of this preamble. 

With respect to air ambulance 

services furnished by nonparticipating 

providers, the recognized amount is not 

used for purposes of determining cost 

sharing. Rather, the statute specifies that 

the cost-sharing requirement with 

respect to such services must be the 

same requirement that would apply if 

such services were provided by a 

participating provider, and any 

coinsurance or deductible must be 

based on rates that would apply for such 

services if they were furnished by a 

participating provider. These interim 

final rules require that plans and issuers 

base any coinsurance and deductible for 

air ambulance services provided by a 

nonparticipating provider on the lesser 

of the QPA or the billed amount. The 

Departments have concluded that this 

policy is consistent with the statute’s 

general intent to protect participants, 

beneficiaries, and enrollees from 

excessive bills, and to remove the 

individuals as much as possible from 

disputes between plans and issuers and 

providers of air ambulance services. In 

addition, using the QPA is one method 

of ensuring that any coinsurance or 

deductible is based on rates that would 

apply for the services if they were 

furnished by a participating provider, 

given that the QPA is generally based on 

median contracted rates, as opposed to 

rates charged by nonparticipating 

providers, and is one basis used for 

determining the cost-sharing amount in 

the context of emergency services and 

items and services furnished by 

nonparticipating providers at 

participating health care facilities. 

As discussed in this preamble, the 

Airline Deregulation Act of 1978 (ADA) 

broadly preempts state laws that relate 

to air ambulance providers, and the 

Departments are unaware of any 

instances in which an All-Payer Model 

Agreement or a specified state law 

might apply. In addition, since an AllPayer Model Agreement or a specified 

state law would not need to follow an 

approach based on rates that would 

apply for such services if they were 

furnished by a participating provider 

(for example, Medicare rates could be 

used instead), it is the Departments’ 

view that Congress did not intend to 

apply the concept of the recognized 

amount to nonparticipating providers of 

air ambulance services. The 

Departments seek comment on any 

potential alternate approaches for 

calculating the cost-sharing amount for 

air ambulance services furnished by 

nonparticipating providers of air 

ambulance services. 

iii. Out-of-Network Rate 

In addition to establishing 

requirements related to cost sharing, the 

No Surprises Act and these interim final 

rules also establish requirements related 

to the total amount paid by a plan or 

issuer for items and services subject to 

these provisions, referred to as the outof-network rate. The plan or issuer must 

make a total payment equal to one of the 

following amounts, less any cost sharing 

from the participant, beneficiary, or 

enrollee: (1) An amount determined by 

an applicable All-Payer Model 

Agreement under section 1115A of the 

Social Security Act; (2) if there is no 

such applicable All-Payer Model 

Agreement, an amount determined by a 

specified state law; (3) in the absence of 

an applicable All-Payer Model 

Agreement or specified state law, if the 

plan or issuer and the provider or 

facility have agreed on a payment 

amount, the agreed on amount; or (4) if 

none of those three conditions apply, 

and the parties enter into the IDR 

process and do not agree on a payment 

amount before the date when the IDR 

entity makes a determination of the 

amount, the amount determined by the 

IDR entity. These four approaches for 

determining the out-of-network rate are 

discussed more fully later in this 

preamble. 

The requirements related to cost 

sharing and to the out-of-network rate 

apply when a group health plan or 

coverage provides or covers benefits for 

services subject to these provisions. The 

Departments interpret this to mean that 

the requirements apply when a plan or 

issuer provides coverage for such items 

and services, pursuant to the terms of 

the plan or coverage, even in cases 

where an individual has not satisfied 

their deductible.33 Because the costsharing amount is calculated using the 

recognized amount (or for air ambulance 

services the lesser of the QPA or the 

billed amount) that is calculated 

separately from the determination of the 

out-of-network rate, these requirements 

may result in circumstances where a 

plan or issuer must make payment prior 

to an individual meeting their 

deductible. Specifically, where the 

surprise billing protections apply, and 

the out-of-network rate exceeds the 

amount upon which cost sharing is 

based, a plan or issuer must pay the 

provider or facility the difference 

between the out-of-network rate and the 

cost-sharing amount (the latter of which 

in this case would equal the recognized 

amount, or the lesser of the QPA or the 

billed amount), even in cases where an 

individual has not satisfied their 

deductible, as illustrated in the 

following example. 

Example. An individual is enrolled in 

a high deductible health plan with a 

$1,500 deductible and has not yet 

accumulated any costs towards the 

deductible at the time the individual 

receives emergency services at an outof-network facility. The plan determines 

that the recognized amount for the 

services is $1,000. Because the 


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34See section IV.A.5 of this preamble for a 

discussion of HHS-only interim final rules 

addressing catastrophic plans’ compliance with 

these requirements. 

35 49 U.S.C. 41713(b). 

36An air ambulance provider is a covered ‘‘air 

carrier’’ if it has economic authority from the 

Department of Transportation to provide interstate 

air transportation. Most air ambulance providers 

have such authority under the provisions of 14 CFR 

part 298. See, e.g., Scarlett v. Air Methods Corp., 

922 F.3d 1053 (10th Cir. 2019); Air Evac EMS v. 

Cheatham, 910 F.3d 751 (4th Cir. 2018). 

37See, e.g., Guardian Flight LLC v. Godfread, 991 

F.3d 916, 921 (8th Cir. 2021) (holding that ADA 

preempted state law prohibiting out-of-network air 

ambulance providers from balance billing and 

requiring them to accept amounts paid by insurers); 

Bailey v. Rocky Mountain Holdings, LLC, 889 F.3d 

1259, 1269–72 (11th Cir. 2018) (holding that ADA 

preempted state law that prohibited air ambulance 

providers from collecting more than amount 

specified in fee schedule). 

individual has not satisfied the 

deductible, the individual’s cost-sharing 

amount is $1,000, which accumulates 

towards the deductible. The out-ofnetwork rate is subsequently 

determined to be $1,500. Under the 

requirements of the statute and these 

interim final rules, the plan is required 

to pay the difference between the outof-network rate and the cost-sharing 

amount. Therefore, the plan pays $500 

for the emergency services, even though 

the individual has not satisfied the 

deductible. The individual’s out-ofpocket costs are limited to the amount 

of cost-sharing originally calculated 

using the recognized amount (that is, 

$1,000). 

Although such a payment would 

generally cause a high deductible health 

plan to lose its status as a high 

deductible health plan, the No Surprises 

Act added section 223(c)(2)(F) to the 

Code to specify that a plan shall not fail 

to be treated as a high deductible health 

plan by reason of providing benefits for 

medical care in accordance with section 

9816 or 9817 of the Code, section 716 

or 717 of ERISA, or section 2799A–1 or 

2799A–2 of the PHS Act (the provisions 

added by the No Surprises Act related 

to surprise medical and air ambulance 

bills), or any state law providing similar 

protections to individuals, prior to the 

satisfaction of the deductible.34

iv. Specified State Law 

Under section 9816(a)(3)(I) of the 

Code, section 716(a)(3)(I) of ERISA, 

section 2799A–1(a)(3)(I) of the PHS Act, 

and these interim final rules, a specified 

state law is a state law that provides a 

method for determining the total 

amount payable under a group health 

plan or group or individual health 

insurance coverage to the extent the 

state law applies. This includes 

instances where the Departments have 

interpreted this term to include state 

laws where the state law applies 

because the state has allowed a plan that 

is not otherwise subject to applicable 

state law an opportunity to opt in to a 

program established under state law, 

subject to section 514 of ERISA, for an 

item or service furnished by a 

nonparticipating provider or 

nonparticipating emergency facility. In 

cases where a specified state law 

applies, the recognized amount (the 

amount upon which cost sharing is 

based) and out-of-network rate for 

emergency and non-emergency services 

subject to the surprise billing 

protections is calculated based on such 

specified state law. 

In order for a state law to determine 

the recognized amount or out-ofnetwork rate, any such law must apply 

to: (1) The plan, issuer, or coverage 

involved, including where a state law 

applies because the state has allowed a 

plan that is not otherwise subject to 

applicable state law an opportunity to 

opt in, subject to section 514 of ERISA; 

(2) the nonparticipating provider or 

nonparticipating emergency facility 

involved (and in the case of state outof-network rate laws, the 

nonparticipating provider of air 

ambulance services involved); and (3) 

the item or service involved. In 

instances where a state law does not 

satisfy all of these criteria, the state law 

does not apply to determine the 

recognized amount or out-of-network 

rate. For example, where a particular 

state surprise billing law that governs 

the recognized amount and out-ofnetwork rate applies to a particular plan 

or coverage but does not apply to 

nonparticipating neonatologists, who 

provide a specified ancillary service 

under section 2799B–2(b)(2) of the PHS 

Act, the consumer protections under 

federal law would determine the 

recognized amount and out-of-network 

rate with respect to neonatology services 

while the state law would apply with 

respect to other provider specialties 

covered under that state law. Similarly, 

where a state’s surprise billing laws 

apply only to health maintenance 

organizations (HMOs), federal 

protections against surprise billing 

would govern with respect to other 

types of coverage while the state 

protections would apply to HMOs for 

purposes of determining the recognized 

amount and out-of-network rate. 

The same definition of ‘‘out-ofnetwork rate’’—including the reference 

to specified state laws—applies to air 

ambulance services as to other services. 

The Departments note, however, that 

the ADA states in relevant part: ‘‘. . . a 

State, political subdivision of a State, or 

political authority of at least 2 States 

may not enact or enforce a law, 

regulation, or other provision having the 

force and effect of law related to a price, 

route, or service of an air carrier that 

may provide air transportation under 

this subpart.’’ 35 Assuming that a 

provider of air ambulance services is an 

‘‘air carrier’’ covered by this provision, 

as is typical,36 the provision preempts 

state laws that would limit the amount 

of payment that the provider of air 

ambulance services would otherwise be 

entitled to receive.37 Given the 

applicability of the ADA, the 

Departments are not aware of any state 

laws that would meet the criteria to set 

the out-of-network rate for 

nonparticipating providers of air 

ambulance services when providing 

services subject to the protections in the 

No Surprises Act. 

The Departments also seek comment 

on whether health insurance issuers, 

health care providers, or health care 

facilities, in instances where they are 

not otherwise subject to a specified state 

law that provides for a method for 

determining the total amount payable 

under a group health plan or group or 

individual health insurance coverage, 

should have an opportunity, for 

purposes of these interim final rules, to 

opt in to a program established under 

state law, with respect to an item or 

service furnished by a nonparticipating 

provider or nonparticipating emergency 

facility. The Departments seek comment 

on whether this approach would allow 

for more flexibility for state laws to 

apply when, for example, by their terms, 

they apply to the health insurance 

issuer and item and service in question, 

but not to the provider; whether an 

issuer, provider, or facility would still 

be subject to any specified state laws in 

their ‘‘home’’ state if they opt in to a 

program established under another 

state’s law; and whether an issuer, 

provider, or facility should be permitted 

to opt in on an episodic basis. The 

Departments are concerned that 

allowing providers and facilities to opt 

in to a program established under state 

law could increase health care prices if 

providers and facilities selectively opt 

in to state programs that favor providers 

and facilities in the determination of the 

out-of-network rate. The Departments 

seek comment on the potential impact 

of expanding the ability to opt in to a 

state program to providers and facilities. 

The Departments specifically seek 

comment from health insurance issuers, 

health care providers, or health care 

facilities located within or serving 


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36886 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

38See House Conf. Rep. No. 104–736, at 205, 

reprinted in 1996 U.S. Code Cong. & Admin. News 

2018. 

39See Gobeille v. Liberty Mutual Ins. Co. 577 U.S. 

312 (2015); Egelhoff v. Egelhoff, 532 U.S. 141 

(2001). 40See, e.g., Technical Release 2010–01; 76 FR 

37208, 37211 fn. 13 (June 24, 2011). 

underserved and rural communities, 

and other communities facing a shortage 

of providers on the impact of these 

provisions on services, coverage, and 

payment for and within medically 

underserved, rural, and urban 

communities. 

a. State Law Interaction With ERISA 

Under the general preemption clause 

of section 514(a) of ERISA, state laws 

are preempted to the extent that they 

‘‘relate’’ to employee benefit plans 

subject to title I of ERISA. There are, 

however, a number of exceptions to this 

broad preemption provision. Section 

514(b)(2)(A), referred to as the ‘‘savings 

clause,’’ provides in pertinent part that 

‘‘nothing in this title (title I of ERISA) 

shall be construed to exempt or relieve 

any person from any law of any State 

which regulates insurance. . . .’’ 

Additionally, the preemption provisions 

of section 731 of ERISA (implemented 

in 29 CFR 2590.731(a)) apply so that the 

requirements of part 7 of ERISA are not 

to be ‘‘construed to supersede any 

provision of state law which establishes, 

implements, or continues in effect any 

standard or requirement solely relating 

to issuers in connection with group 

health insurance coverage except to the 

extent that such standard or 

requirement prevents the application of 

a ‘requirement’ of a federal standard.’’ 

The conference report accompanying 

the Health Insurance Portability and 

Accountability Act of 1996 (HIPAA), 

which applied this preemption standard 

to state laws with respect to its title I 

health insurance reform provisions, 

indicates that this preemption is 

intended to be the ‘‘narrowest’’ 

preemption of states’ laws.38 States may 

therefore continue to apply state law 

requirements to issuers except to the 

extent they prevent the application of 

ERISA requirements. Additionally, 

states have significant latitude to 

impose requirements on issuers that are 

more restrictive than the federal law. 

State laws that impose comparable or 

additional requirements on health 

insurance issuers would generally 

constitute a ‘‘specified state law’’ 

notwithstanding section 514 of ERISA 

and would continue to apply. 

While section 514(b)(2)(A) saves from 

ERISA preemption state laws regulating 

insurance, section 514(b)(2)(B) of 

ERISA, referred to as the ‘‘deemer 

clause,’’ provides that a state law 

‘‘purporting to regulate insurance’’ 

generally cannot deem an employee 

benefit plan to be an insurance company 

(or in the business of insurance) for the 

purpose of regulating such a plan as an 

insurance company (section 

514(b)(6)(A) creates a partial exception 

to the deemer clause for employee 

welfare benefit plans that are also 

multiple employer welfare arrangements 

(MEWAs)). Thus, to the extent that a 

state law has a ‘‘reference to’’ or an 

impermissible connection with ERISA 

plans (such as laws that govern the 

payment of benefits), these laws are 

preempted, to the extent they apply to 

self-insured plans sponsored by private 

employers.39 However, section 514 of 

ERISA does not prevent states from 

expanding access to a state program and 

allowing self-insured, ERISA-covered 

plans to choose to voluntarily comply 

with it. For example, the Departments 

allowed such plans to comply with their 

obligations for external review under 

section 2719 of the PHS Act by 

voluntarily opting in to the state 

external review process.40 Similarly, 

these interim final rules allow selfinsured plans (including non-federal 

governmental plans) to voluntarily opt 

in to state law that provides for a 

method for determining the cost-sharing 

amount or total amount payable under 

such a plan, where a state has chosen to 

expand access to such plans, to satisfy 

their obligations under section 9816(a)– 

(d) of the Code, section 716(a)–(d) of 

ERISA, and section 2799A–1(a)–(d) of 

the PHS Act. A group health plan that 

opts in to such a state law must do so 

for all items and services to which the 

state law applies. Under these interim 

final rules, a self-insured plan that has 

chosen to opt in to a state law must 

prominently display in its plan 

materials describing the coverage of outof-network services a statement that the 

plan has opted in to a specified state 

law, identify the relevant state (or 

states), and include a general 

description of the items and services 

provided by nonparticipating facilities 

and providers that are covered by the 

specified state law. 

b. Examples Involving Specified State 

Laws 

The following examples illustrate 

how state laws may or may not apply. 

In each example, assume there is no 

applicable All-Payer Model Agreement 

that would determine the recognized 

amount or out-of-network rate. 

Example 1. (i) Facts. A health 

insurance issuer licensed in State A 

covers a specific non-emergency service 

that is provided to an enrollee by a 

nonparticipating provider in a 

participating health care facility, both of 

which are also licensed in State A. State 

A has a law that prohibits balance 

billing for non-emergency services 

provided to individuals by 

nonparticipating providers in a 

participating health care facility, and 

provides for a method for determining 

the cost-sharing amount and total 

amount payable. The state law applies 

to health insurance issuers and 

providers licensed in State A. The state 

law also applies to the type of service 

provided. 

(ii) Conclusion. In this Example 1, 

State A’s law would apply to determine 

the recognized amount and the out-ofnetwork rate. 

Example 2. (i) Facts. Same facts as 

Example 1, except that the 

nonparticipating provider and 

participating health care facility are 

located and licensed in State B. State 

A’s law does not apply to the provider, 

because the provider is licensed and 

located in State B. 

(ii) Conclusion. In this Example 2, 

State A’s law would not apply to 

determine the recognized amount and 

out-of-network rate. Instead, the lesser 

of the billed amount or QPA would 

apply to determine the recognized 

amount, and either an amount 

determined through agreement between 

the provider and issuer or an amount 

determined by an IDR entity would 

apply to determine the out-of-network 

rate. 

Example 3. (i) Facts. An individual 

receives emergency services at a 

nonparticipating hospital located in 

State A. The emergency services 

furnished include post-stabilization 

services, as described in 26 CFR 

54.9816–4T(c)(2)(ii), 29 CFR 2590.716– 

4(c)(2)(ii), and 45 CFR 149.110(c)(2)(ii). 

The individual’s coverage is through a 

health insurance issuer licensed in State 

A, and the coverage includes benefits 

with respect to services in an emergency 

department of a hospital. State A has a 

law that prohibits balance billing for 

emergency services provided to an 

individual at a nonparticipating hospital 

located in State A and provides a 

method for determining the cost-sharing 

amount and total amount payable in 

such cases. The law applies to issuers 

licensed in State A. However, State A’s 

law has a definition of emergency 

services that does not include poststabilization services. 

(ii) Conclusion. In this Example 3, 

State A’s law would apply to determine 

the cost-sharing amount and out-ofnetwork rate for the emergency services, 

as defined under State A’s law. State A’s 


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41Section 731(a) of ERISA and section 2724(a) of 

the PHS Act. As noted above, the HIPAA 

conference report indicates that this preemption 

standard is intended to be the ‘‘narrowest’’ 

preemption of states’ laws. See House Conf. Rep. 

No. 104–736, at 205, reprinted in 1996 U.S. Code 

Cong. & Admin. News 2018. 

42See, e.g., CMS. Vermont All-Payer ACO Model, 

(updated Apr. 8, 2020) available at https://

innovation.cms.gov/innovation-models/vermont-allpayer-aco-model; CMS. Pennsylvania Rural Health 

Model, (updated Jan. 1, 2021) available at https:// 

innovation.cms.gov/innovation-models/pa-ruralContinued 

law would not apply for purposes of 

determining the cost-sharing amount 

and out-of-network rate for the poststabilization services. Instead, the lesser 

of the QPA or billed amount would 

apply to determine the recognized 

amount, and either an amount 

determined through agreement between 

the hospital and issuer or an amount 

determined by an IDR entity would 

apply to determine the out-of-network 

rate, with respect to post-stabilization 

services. 

Example 4. (i) Facts. A self-insured 

plan, subject to ERISA, covers a specific 

non-emergency service that is provided 

to a participant by a nonparticipating 

provider in a participating health care 

facility, both of which are licensed in 

State A. State A has a law that prohibits 

balance billing for non-emergency 

services provided to individuals by 

nonparticipating providers in a 

participating health care facility, and 

provides for a method for determining 

the cost-sharing amount and total 

amount payable. The law applies to 

health insurance issuers and providers 

licensed in State A, and provides that 

plans that are not otherwise subject to 

the law may opt in. The law also applies 

to the type of service provided. The selfinsured plan has opted in. 

(ii) Conclusion. In this Example 4, 

State A’s law would apply to determine 

the recognized amount and the out-ofnetwork rate. 

The Departments are of the view that 

it would be uncommon for laws of more 

than one state to each apply to the same 

health insurance issuer, and to the same 

provider for a particular item or service. 

Therefore, the Departments do not 

foresee many instances where there 

might be a question as to which state’s 

law applies to determine the recognized 

amount or out-of-network rate. 

However, in such uncommon scenarios, 

one approach might be for the states 

involved to make that decision. Another 

approach might be that the law enacted 

by the state in which the service is 

provided would apply. Yet another 

approach would be for the QPA to apply 

to determine the recognized amount, 

and either a negotiated amount or an 

amount determined by an IDR entity to 

apply to determine the out-of-network 

rate. The Departments seek comment on 

these and any other approaches for 

resolving this choice-of-law question. 

The Departments also seek comment on 

how states have handled such questions 

prior to the enactment of the No 

Surprises Act, should these types of 

conflicts exist. 

The Departments are of the view that 

Congress intended that where state law 

provides a method for determining the 

total amount payable under a plan or 

coverage, the state law regarding 

balance billing would govern, rather 

than the alternative method for 

determining the out-of-network rate 

under the No Surprises Act. The 

Departments interpret the statutory 

phrase ‘‘a State law that provides for a 

method for determining the total 

amount payable under such a plan, 

coverage, or issuer, respectively’’ 

broadly as referring not only to state 

laws that set a mathematical formula for 

determining the out-of-network rate, or 

that set a predetermined amount for an 

out-of-network item or service. Rather, 

the Departments interpret that language 

to also include, for example, state laws 

that require or permit a plan or issuer 

and a provider or facility to negotiate, 

and then to engage in a state arbitration 

process to determine the out-of-network 

rate. Such state laws provide a process 

for determining the total amount 

payable, and in such instances, the 

timeframes and processes under such a 

state law related to negotiations and 

arbitration would apply, as opposed to 

the timeframes and IDR process under 

the No Surprises Act. 

In addition, the Departments are of 

the view that Congress did not intend 

for the No Surprises Act to preempt 

provisions in state balance billing laws 

that address issues beyond how to 

calculate the cost-sharing amount and 

out-of-network rate. To the extent state 

laws do not prevent the application of 

a federal requirement or prohibition on 

balance billing, the Departments are of 

the view that such state laws are 

consistent with the statutory framework 

of the No Surprises Act and would not 

be preempted.41 This view extends to 

any state law that provides balance 

billing protections beyond what these 

interim final rules provide. In fact, 

Congress specifically indicated that 

such state balance billing laws may 

continue in effect along with the 

balance billing protections set forth in 

the statute, by requiring in new section 

2799B–3 of the PHS Act that providers 

must disclose to participants, 

beneficiaries, and enrollees information 

about federal balance billing 

protections, plus any other protections 

that apply under state law. A more 

detailed discussion of the disclosure 

requirements appears in section IV.A.3 

of this preamble, which discusses the 

provisions codified in 45 CFR 149.430. 

v. All-Payer Model Agreements 

As described earlier, in instances 

where an All-Payer Model Agreement is 

applicable, the recognized amount (the 

amount upon which cost sharing is 

based with respect to items and services 

furnished by nonparticipating 

emergency facilities, and 

nonparticipating providers of 

nonemergency items and services in 

participating facilities) and the out-ofnetwork rate are determined using the 

amount that the state approves under 

the All-Payer Model Agreement for such 

items or services. 

An All-Payer Model Agreement is an 

agreement between the Centers for 

Medicare & Medicaid Services (CMS) 

and a state to test and operate systems 

of all-payer payment reform for the 

medical care of residents of the state, 

under the authority granted under 

section 1115A the Social Security Act. 

Under the terms of section 1115A of the 

Social Security Act, such Agreements 

may waive specific provisions of titles 

XI and XVIII and of sections 1902(a)(1), 

1902(a)(13), 1903(m)(2)(A)(iii), and 1934 

(other than subsections (b)(1)(A) and 

(c)(5) of such section) as may be 

necessary solely for the purposes of 

testing the Model. All-Payer Model 

Agreements can vary significantly by 

state, including in using different 

approaches for approving payment 

amounts for items or services covered 

by the Agreements. The Departments are 

of the view that it is important to 

maximally preserve states’ abilities to 

test all-payer payment reform through 

these Agreements, including their 

abilities to do so using varied 

approaches to setting payment amounts. 

These interim final rules defer to the 

state to determine the circumstances 

under which, and how, it will approve 

an amount for an item or service under 

a payment system established by an AllPayer Model Agreement. Participating 

in an all-payer model governed by an 

All-Payer Model Agreement may be 

voluntary or mandatory for a given 

payer; the system of all-payer payment 

reform may apply statewide or only in 

certain regions, such as rural regions; 

and payments under the system of allpayer payment reform may apply only 

to certain providers or facilities and 

certain items and services.42 To account 


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36888 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

health-model; CMS. Maryland Total Cost of Care 

Model available at https://innovation.cms.gov/ 

innovation-models/md-tccm. 

43See CMS. Maryland Total Cost of Care Model, 

(updated Oct. 22, 2020) available at https://

innovation.cms.gov/innovation-models/md-tccm. 

Under Maryland law, hospitals regulated by the 

Maryland Health Services Cost Review Commission 

(HSCRC) must charge payers the rates set the by 

HSCRC, and payers, including group health plans 

and issuers offering individual or group health 

insurance, must pay the rates set by HSCRC. 

Maryland Code, Health-General Article §§ 19–212 

and 19–219(a)(3) and (b)(2)(i) and Maryland Code, 

Insurance Article § 15–604. 

44https://innovation.cms.gov/innovation-models/ 

vermont-all-payer-aco-model. 

45See prior explanation regarding the 

requirement that when the surprise billing 

protections apply, in the event the billed charge is 

less than the recognized amount, cost sharing 

would be based on the billed charge. 

for potential variations among All-Payer 

Model Agreements, the Departments are 

proposing to take a similar approach 

that these interim final rules establish 

with respect to state laws. Specifically, 

in order for an All-Payer Model 

Agreement to determine the recognized 

amount or out-of-network rate, any such 

Agreement must apply to the coverage 

involved; to the nonparticipating 

provider or nonparticipating emergency 

facility involved (and in the case of the 

out-of-network rate, to the 

nonparticipating provider of air 

ambulance services involved); and to 

the item or service involved. In 

instances where an All-Payer Model 

Agreement does not satisfy all of these 

criteria, the Agreement does not apply 

to determine the recognized amount or 

out-of-network rate, and, unless a 

specified state law applies, the 

recognized amount would be 

determined by the QPA (or the billed 

charge if less than the QPA), and the 

out-of-network rate would be the 

amount determined through agreement 

between the provider or facility and 

plan or issuer or the IDR process. 

Under these interim final rules, an 

All-Payer Model Agreement is treated as 

applicable to a given provider or facility 

and plan or issuer if the terms of the 

Agreement, or any agreements described 

in that Agreement, are binding upon the 

provider, facility, plan, or issuer, which 

may occur through different 

mechanisms. For example, under the 

All-Payer Model Agreement for the 

Maryland Total Cost of Care Model and 

under the Maryland state all-payer law, 

all payers (including group health plans 

and health insurance issuers offering 

group or individual health insurance 

coverage) pay the amount determined 

under the Agreement with respect to 

hospital services covered by the 

Agreement.43 However, the Agreement 

generally does not apply to the amount 

paid to a provider, such as a physician, 

who furnishes services at a hospital. In 

Maryland, therefore, the recognized 

amount and out-of-network rate would 

be set by the All-Payer Model 

Agreement for all plans and issuers for 

hospital charges covered under the 

Agreement. But, the All-Payer Model 

Agreement would generally not be used 

to set the recognized amount or out-ofnetwork rate with respect to a 

nonparticipating provider’s charges, 

unless the All-Payer Model Agreement, 

or any agreements described in that 

Agreement, specify the payment amount 

in a particular instance. 

Although under state law plans and 

issuers in Maryland do not have 

discretion regarding whether to 

participate in the all-payer rate setting 

system under the Maryland Total Cost 

of Care Model, participation in other 

state-based models governed by AllPayer Model Agreements is voluntary. 

For example, under the All-Payer Model 

Agreement for the Vermont All-Payer 

Accountable Care Organization (ACO) 

Model, participation by providers, 

facilities, group health plans, and health 

insurance issuers is voluntary.44 To the 

extent that both the provider or facility 

and plan or issuer has opted to 

participate in the Vermont All-Payer 

ACO Model and the Vermont All-Payer 

Model Agreement, or an agreement 

described in that Agreement, applies to 

a specific item or service, then that AllPayer Model Agreement would 

determine the recognized amount and 

out-of-network rate. But, for example, if 

a plan has opted to participate, but the 

provider furnishing the service has not, 

then the All-Payer Model Agreement 

would not be used to determine either 

the recognized amount or out-ofnetwork rate. Instead, if a state law is 

applicable, the state law would apply. If 

no state law is applicable, then the 

recognized amount would be 

determined using the QPA,45 and the 

out-of-network rate would be the 

amount agreed upon by the parties or 

determined through the IDR process 

established in the No Surprises Act, as 

discussed further elsewhere in this 

preamble. 

vi. Methodology for Calculating the 

Qualifying Payment Amount 

The No Surprises Act directs the 

Departments to establish through 

rulemaking the methodology that a 

group health plan or health insurance 

issuer offering group or individual 

health insurance coverage must use to 

determine the qualifying payment 

amount (QPA). As discussed earlier in 

this preamble, the No Surprises Act and 

these interim final rules require costsharing requirements imposed by plans 

and issuers in connection with 

emergency services furnished by a 

nonparticipating emergency facility or 

nonparticipating provider, or in 

connection with non-emergency 

services performed by nonparticipating 

providers at certain participating 

facilities to be based on the lesser of the 

billed charge or the QPA where an AllPayer Model Agreement under section 

1115A of the Social Security Act or a 

specified state law does not apply. In 

addition, IDR entities are directed by 

statute to consider the QPA when 

selecting between the offer submitted by 

a plan or issuer and the offer submitted 

by a facility or provider in order to 

determine the total payment for 

emergency services furnished by a 

nonparticipating emergency facility or 

nonparticipating provider, or nonemergency services performed by 

nonparticipating providers at certain 

participating facilities that are items and 

services subject to the IDR process. 

In general, under section 9816(a)(3)(E) 

of the Code, section 716(a)(3)(E) of 

ERISA, and section 2799A–1(a)(3)(E) of 

the PHS Act, for a given item or service, 

the QPA is the median of the contracted 

rates recognized by the plan or issuer on 

January 31, 2019, for the same or similar 

item or service that is provided by a 

provider in the same or similar specialty 

and provided in a geographic region in 

which the item or service is furnished, 

increased for inflation. The median 

contracted rate is determined with 

respect to all group health plans of the 

plan sponsor or all group or individual 

health insurance coverage offered by the 

health insurance issuer that are offered 

in the same insurance market, 

consistent with the methodology 

established by the Departments. 

The No Surprises Act specifies an 

alternative methodology for determining 

the QPA in cases where a plan or issuer 

has insufficient information to calculate 

a median contracted rate for an item or 

service. The statute, however, envisions 

that these alternative methodologies, 

such as use of a third-party database, 

will be used in only limited 

circumstances where the plan or issuer 

cannot rely on its contracted rates as a 

reflection of the market dynamics in a 

geographic region. Consistent with this 

statutory goal, these interim final rules 

generally seek to ensure that plans and 

issuers can meet the sufficientinformation standard when determining 

the QPA and that use of alternative 

methodologies is minimized wherever 

possible. 

The Departments seek comment on all 

aspects of the methodology established 


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46This definition is substantially similar to the 

definition of ‘‘negotiated rate’’ used for purposes of 

the transparency in coverage regulations at 26 CFR 

54.9815–2715A1(a)(2)(xvi), 29 CFR 2590.715– 

2715A1(a)(2)(xvi), and 45 CFR 147.210(a)(2)(xvi). 

47 If a plan or issuer has a contract with multiple 

providers, with separate negotiated rates with 

several subgroups of providers, each unique 

contracted rate will generally constitute a single 

contracted rate for purposes of determining the 

median contracted rate. However, as discussed later 

in this section of the preamble, these interim final 

rules specify that if a plan or issuer has contracted 

rates that vary based on provider specialty for a 

service code, the median contracted rate is 

calculated separately for each provider specialty, as 

applicable. In such cases, the QPA for the particular 

item or service would take into account only the 

contracted rates for the applicable provider 

specialty, and would disregard other unique 

contracted rates under the same contract. 

48 In contrast, as discussed earlier in this 

preamble, these interim final rules specify that a 

single case agreement constitutes a contractual 

relationship for purposes of the definition of 

participating health care facility and participating 

emergency facility. The Departments are of the view 

that it is reasonable that an individual would expect 

items and services delivered at a health care facility 

that has a single case agreement in place with 

respect to the individual’s care to be delivered on 

an in-network basis, and therefore, that the balance 

billing protections should apply. 

in these interim final rules for 

determining the QPA. In particular, the 

Departments seek comment on whether 

there are any considerations or factors 

that are not sufficiently accounted for in 

the methodology established in these 

interim final rules; the impact of the 

methodology on cost sharing, payment 

amounts, and provider network 

participation; and whether there are 

areas where commenters believe 

additional rulemaking or guidance is 

necessary. The Departments also seek 

comment as to the impact of large 

consolidated health care systems on 

contracted rates, and the impact of such 

contracted rates on prices and the QPA. 

The Departments are concerned that the 

contracting practices of such health care 

systems could inflate the QPA, and seek 

comment on whether adjustments to the 

QPA methodology are needed. 

a. Median Contracted Rate 

These interim final rules establish the 

methodology that plans and issuers 

must use to calculate the median of 

contracted rates. The plan or issuer will 

generally then apply an inflation 

adjustment to determine the QPA for 

items and services furnished in the 

relevant year. 

In general, the median contracted rate 

for an item or service is calculated by 

arranging in order from least to greatest 

the contracted rates of all plans of the 

plan sponsor (or of the administering 

entity, if applicable) or all coverage 

offered by the issuer in the same 

insurance market for the same or similar 

item or service that is provided by a 

provider in the same or similar specialty 

or facility of the same or similar facility 

type and provided in the geographic 

region in which the item or service is 

furnished, and selecting the middle 

number. These interim final rules define 

each of the relevant terms, as discussed 

in more detail in this section of the 

preamble. 

In determining the median contracted 

rate, the amount negotiated under each 

contract is treated as a separate amount. 

For example, assume the contracted 

rates for all plans of a sponsor in the 

same insurance market for a particular 

item or service provided by a provider 

in the same or similar specialty in a 

specified geographic region are $475, 

$490, and $510. The median contracted 

rate for this service is $490. If there are 

an even number of contracted rates, the 

median contracted rate is the average of 

the middle two contracted rates. If, in 

the previous example, there were a 

fourth contracted rate in the amount of 

$515, the median contracted rate would 

be the average of the two middle 

amounts ($490 and $510), or $500 

(($490+$510)2). If the same amount is 

paid under two or more separate 

contracts, each contract is counted 

separately. Thus, in the previous 

example, if there were a fifth contracted 

rate also in the amount of $515, the 

median contracted rate would be $510, 

since there are two contracted rates 

below that amount ($475 and $490) and 

two contracted rates above that amount 

($515 and $515). 

Contracted Rate 

The interim final rules define a 

‘‘contracted rate’’ as the total amount 

(including cost sharing) that a group 

health plan or health insurance issuer 

has contractually agreed to pay a 

participating provider, facility, or 

provider of air ambulance services for 

covered items and services, whether 

directly or indirectly, including through 

a third-party administrator or pharmacy 

benefit manager.46

The No Surprises Act envisions that 

each contracted rate for a given item or 

service be treated as a single data point 

when calculating a median contracted 

rate. Therefore, if a plan or issuer has a 

contract with a provider group or 

facility, the rate negotiated with that 

provider group or facility under the 

contract is treated as a single contracted 

rate, if the same rate applies to all 

providers of such provider group or 

facility under the single contract. 

Likewise, the rate negotiated under a 

contract constitutes a single contracted 

rate regardless of the number of claims 

paid at that contracted rate. However, if 

a plan or issuer has a contract with 

multiple providers, with separate 

negotiated rates with each particular 

provider for a given item or service, 

each unique contracted rate constitutes 

a single contracted rate for purposes of 

determining the median contracted 

rate.47 Further, if a plan or issuer has 

separate contracts with individual 

providers, the contracted rate under 

each such contract constitutes a single 

contracted rate (even if the same amount 

is paid to other providers under separate 

contracts). 

The Departments understand that 

some plans or issuers may rent provider 

networks or otherwise contract with 

third parties to manage provider 

networks. In these situations, contracted 

rates between providers and the entity 

responsible for managing the provider 

network on behalf of a plan or issuer 

would be treated as the plan’s or issuer’s 

contracted rates for purposes of 

calculating the QPA. The Departments 

seek comment on whether additional 

guidance or special rules are needed 

regarding how to define a contract in 

this situation. 

The Departments also understand that 

plans and issuers sometimes enter into 

special agreements with providers and 

facilities that generally are not 

otherwise contracted to participate in 

any of the networks of the plan or 

issuer. For example, a plan or issuer 

may negotiate an ad hoc arrangement 

with a nonparticipating provider or 

facility to supplement the network of 

the plan or coverage for a specific 

participant, beneficiary, or enrollee in 

unique circumstances. These interim 

final rules specify that solely for 

purposes of the definition of contracted 

rate, a single case agreement, letter of 

agreement, or other similar arrangement 

between a plan or issuer and a provider, 

facility, or provider of air ambulance 

services does not constitute a contract, 

and the rate paid under such an 

agreement should not be counted among 

the plan’s or issuer’s contracted rates. 

The term ‘‘contracted rate’’ refers only 

to the rate negotiated with providers 

and facilities that are contracted to 

participate in any of the networks of the 

plan or issuer under generally 

applicable terms of the plan or coverage 

and excludes rates negotiated with other 

providers and facilities. The 

Departments are of the view that this 

definition most closely aligns with the 

statutory intent of ensuring that the 

QPA reflects market rates under typical 

contract negotiations.48

Insurance Market 

In calculating the median contracted 

rate for a given item or service, the plan 


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49The term ‘‘health insurance issuer’’ has the 

meaning given the term in section 2791(b) of the 

PHS Act, which, in relevant part, defines a health 

insurance issuer as an entity that is licensed to 

engage in the business of insurance in a state. Thus, 

an issuer is the licensed entity and the contracted 

rates of separate licensees under the same holding 

company are not taken into account. 

50Since short-term, limited duration insurance is 

not individual health insurance coverage, it is also 

generally not subject to the federal individual 

market reforms. See, e.g., 81 FR 75316 at 75317 

(Oct. 31, 2016) and 83 FR 38212 at 38213 (Aug. 3, 

2018). 

51Section 9831 of the Code, section 732 of ERISA, 

and sections 2722 and 2763 of the PHS Act. 

52These amendments add the phrase ‘‘and Part 

D’’ to section 2722(b), (c)(1), (c)(2), and (c)(3) of the 

PHS Act. 

or issuer must take into account the 

contracted rates under all group health 

plans of the sponsor or all group or 

individual health insurance coverage 

offered by the issuer that are offered in 

the same insurance market.49 The term 

‘‘insurance market’’ for purposes of 

these interim final rules means one of 

the following: The individual market, 

small group market, or large group 

market (each as defined under section 

2791(e) of the PHS Act). The relevant 

insurance market is determined 

irrespective of the state. For example, in 

calculating the QPA for an item or 

service furnished to an enrollee in 

individual health insurance coverage, 

an issuer must take into account the 

contracted rates with providers or 

facilities in the applicable geographic 

region across the issuer’s individual 

market offerings, inclusive of contracted 

rates for all individual health insurance 

coverage offered by the issuer in all 

states in which the issuer offers 

coverage in the individual market. 

With respect to self-insured group 

health plans, these interim final rules 

define the term ‘‘insurance market’’ to 

mean all self-insured group health plans 

(other than account-based plans and 

plans that consist solely of excepted 

benefits) of the plan sponsor, or at the 

option of the plan sponsor, all selfinsured group health plans 

administered by the same entity 

(including a third-party administrator 

contracted by the plan), to the extent 

otherwise permitted by law, that is 

responsible for calculating the QPA on 

behalf of the plan. The Departments 

understand that many self-insured 

group health plans are administered by 

entities other than the plan sponsor 

(such as a third-party administrator 

contracted by the plan) that would be 

responsible for calculating the QPA on 

behalf of the sponsor. To reduce the 

burden imposed on sponsors of selfinsured group health plans, these 

interim final rules permit sponsors of 

self-insured group health plans to allow 

their third-party administrators to 

determine the QPA for the sponsor by 

calculating the median contracted rate 

using the contracted rates recognized by 

all self-insured group health plans 

administered by the third-party 

administrator (not only those of the 

particular plan sponsor). Under this 

approach, the Departments anticipate 

there will be fewer instances where a 

self-insured group health plan sponsor 

will lack sufficient information to 

calculate a median contracted rate for an 

item or service. 

The Departments seek comment on 

the definition of insurance market with 

respect to self-insured group health 

plans and whether any contractual or 

other issues may prevent an entity, such 

as a third-party administrator, from 

using contracted rates from the different 

self-insured plans it administers to 

calculate the QPA for a particular selfinsured group health plan. DOL also 

seeks comment on the ability of selfinsured group health plan fiduciaries to 

monitor the calculation of the QPA by 

the administering entities for 

compliance with the applicable 

requirements (for example, by ensuring 

the entities are using the correct 

contracted rates). 

The Departments have determined 

that including rates negotiated under 

other more limited forms of coverage, 

such as excepted benefits, short-term, 

limited-duration insurance, and 

account-based plans, including health 

reimbursement arrangements, could 

skew the calculation of the median 

contracted rate, and these forms of 

coverage should not be included in the 

definition of the applicable insurance 

market. Furthermore, the definition of 

‘‘qualifying payment amount’’ under 

section 2799A–1(a)(3)(E)(i)(I) of the PHS 

Act refers to individual health insurance 

coverage, and the term individual health 

insurance coverage, as defined under 

section 2791(b)(5) of the PHS Act, 

excludes short-term, limited-duration 

insurance.50 Therefore, under these 

interim final rules, when referring to 

coverage offered by an issuer within the 

same insurance market for purposes of 

determining the QPA, the individual 

market excludes short-term, limitedduration insurance (as defined in 26 

CFR 54.9801–2, 29 CFR 2590.701–2, and 

45 CFR 144.103). In addition, under 

these interim final rules, all markets 

exclude coverage that consists solely of 

excepted benefits (as described in 

section 9832 of the Code, section 733 of 

ERISA, and section 2791 of the PHS 

Act). While excepted benefits can be 

offered in the individual or group 

markets, they are exempt from the 

federal insurance market reforms,51 and 

Congress amended the statutory 

exemption for these products to include 

the additional coverage provisions 

established under new Part D of title 

XXVII of the PHS Act.52 Account-based 

plans, including health reimbursement 

arrangements as described in 26 CFR 

54.9815–2711(d)(6)(i), 29 CFR 

2590.715–2711(d)(6)(i), and 45 CFR 

147.126(d)(6)(i), make reimbursements 

subject to a maximum fixed dollar 

amount for a period, such that the 

benefit design of these coverage options 

makes concepts related to surprise 

billing and choice of health care 

professionals inapplicable. Therefore, 

under these interim final rules, for 

purposes of calculating the QPA, all 

group markets similarly exclude 

coverage provided under account-based 

plans. 

The Departments also clarify that any 

plan or coverage that is not a ‘‘group 

health plan’’ or ‘‘group or individual 

health insurance coverage’’ offered by a 

‘‘health insurance issuer,’’ as those 

terms are defined in the Code, ERISA, 

and the PHS Act, such as a Medicare 

Advantage or Medicaid managed care 

organization plan, must also not be 

included in any insurance market for 

purposes of determining the QPA. This 

approach is consistent with the 

statutory requirement that the median 

contracted rate is determined with 

respect to all ‘‘group health plans’’ of 

the sponsor or all ‘‘group or individual 

health insurance coverage’’ offered by a 

health insurance issuer in the same 

insurance market. 

Same or Similar Item or Service 

Section 9816(a)(3)(E) of the Code, 

section 716(a)(3)(E) of ERISA, section 

2799A–1(a)(3)(E) of the PHS Act, and 

these interim final rules provide that a 

plan or issuer must calculate the median 

contracted rate for an item or service 

using contracted rates for the same or 

similar item or service. Under the 

interim final rules, the term ‘‘same or 

similar item or service’’ means a health 

care item or service billed under the 

same service code, or a comparable code 

under a different procedural code 

system. Service code means the code 

that describes an item or service, 

including a Current Procedural 

Terminology (CPT), Healthcare 

Common Procedure Coding System 

(HCPCS), or Diagnosis-Related Group 

(DRG) code. A service code is a unique 

identifier, typically consisting of a string 

of numeric digits or alphanumeric 

characters, that corresponds to a 

standardized description, which is used 


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to identify with specificity the item or 

service that was furnished to a patient. 

Different codes may be assigned to the 

same general service on the basis of 

certain variations in the provider’s 

method or approach, the complexity of 

the procedure or medical decisionmaking, and patient acuity level. Payers, 

providers, and facilities understand 

these service codes and commonly use 

them for billing and paying claims 

(including for both individual items and 

services, and for items and services 

provided under a bundled payment 

arrangement). Thus, defining ‘‘same or 

similar item or service’’ by service code 

will make it easier for plans and issuers 

to calculate the QPA, and for providers 

and facilities to understand the QPA. 

These interim final rules include 

specific requirements to account for 

modifiers (when applicable), which are 

codes applied to the service code that 

provide a more specific description of 

the furnished item or service and that 

may adjust the payment rate or affect 

the processing or payment of the code 

billed. For example, modifiers include 

hospital revenue codes, which indicate 

the department or place in the hospital 

in which a procedure or treatment is 

performed, as well as codes indicating 

whether services or procedures were 

performed by certain types of providers, 

such as physician assistants, nurse 

practitioners, certified registered nurse 

anesthetists, or assistant surgeons. In 

addition, modifiers can be used to 

indicate that the work required to 

provide a service in a particular 

instance was significantly greater—or 

significantly less—than the service 

typically requires. The Departments are 

of the view that it is important that the 

QPA methodology account for modifiers 

that affect payment rates under 

contracts with participating providers 

and facilities. 

Under the methodology established in 

these interim final rules, plans and 

issuers must calculate separate median 

contracted rates for CPT code modifiers 

that distinguish the professional 

services component (‘‘26’’) from the 

technical component (‘‘TC’’). This will 

result in separate median contracted 

rates being calculated for services when 

billed by a facility versus a provider. In 

addition, where a plan’s or issuer’s 

contracted rates otherwise vary based on 

applying a modifier code, the plan or 

issuer must calculate a separate median 

contracted rate for each such service 

code-modifier combination. Modifiers 

that do not cause contracted rates to 

vary must not be taken into account 

when calculating the median contracted 

rate. These rules are intended to ensure 

that if a plan or issuer adjusts contracted 

rates with participating providers and 

facilities based on modifier codes, those 

payment adjustments are appropriately 

reflected in the median contracted rate. 

Provider in the Same or Similar 

Specialty 

These interim final rules specify that 

if a plan or issuer has contracted rates 

for a service code that vary based on 

provider specialty, the median 

contracted rate is calculated separately 

for each provider specialty, as 

applicable. These interim final rules 

define ‘‘provider in the same or similar 

specialty’’ as the practice specialty of a 

provider, as identified by the plan or 

issuer consistent with the plan’s or 

issuer’s usual business practice. This 

definition is intended to provide plans 

or issuers with the flexibility necessary 

to calculate the median contracted rate, 

relying on their contracting practices 

with participating providers. If a plan’s 

or issuer’s usual business practice for 

identifying a provider’s practice 

specialty differs for contracting 

purposes and other business needs, the 

plan or issuer should use the method of 

identifying the practice specialty that it 

uses for contracting purposes. 

The Departments considered 

requiring a plan or issuer to calculate 

separate median contracted rates for 

every provider specialty, but concluded 

that this approach would lead to more 

instances in which the plan or issuer 

would not have sufficient information to 

calculate the QPAs using its contracted 

rates. In addition, the Departments 

understand that not all plans or issuers 

vary contracted rates by provider 

specialty, in which case requiring plans 

and issuers to calculate separate median 

contracted rates for each provider 

specialty would increase the burden 

associated with calculating the QPA 

without adding specificity to the QPA. 

Given that the No Surprises Act 

generally relies on using contracted 

rates to determine the QPA, the 

Departments conclude that plans and 

issuers should be required to calculate 

median contracted rates separately by 

provider specialty only where the plan 

or issuer otherwise varies its contracted 

rates based on provider specialty. 

With respect to air ambulance 

services, all providers of air ambulance 

services (including inter-facility 

transports) are considered to be a single 

provider specialty for purposes of these 

interim final rules. The Departments 

understand that contracted rates may 

vary depending on whether the air 

ambulance services are provided using 

a fixed-wing or rotary-wing aircraft. 

However, these distinctions based on 

vehicle type are accounted for in the 

QPA methodology established under 

these interim final rules through the use 

of service codes that are specific to 

fixed-wing or rotary-wing aircraft. 

Therefore, the Departments anticipate 

that median contracted rates for fixedwing and rotary-wing aircraft would be 

determined separately based on the 

requirement under these interim final 

rules that median contracted rates be 

based on the contracted rates for the 

same or similar item or service, and 

concluded that it would be redundant to 

require plans and issuers to also 

calculate separate median contracted 

rates on the basis of vehicle type. 

The Departments also understand that 

hospital-based air ambulance providers 

sometimes have lower contracted rates 

than independent, non-hospital-based 

air ambulance providers. The 

Departments, however, are of the view 

that because participants, beneficiaries, 

and enrollees frequently do not have the 

ability to choose their air ambulance 

provider, they should not be required to 

pay higher cost-sharing amounts (such 

as coinsurance or a deductible) solely 

because the air ambulance provider 

assigned to them has negotiated higher 

contracted rates in order to cover its 

higher costs, or because it has a different 

revenue model, than other types of air 

ambulance providers. This approach is 

consistent with the approach these 

interim final rules take with respect to 

facilities, discussed in the following 

section of this preamble, which also 

generally does not provide for separate 

median contracted rates to be calculated 

based on characteristics of a particular 

facility. The Departments have 

concluded that this interpretation is 

consistent with the statute’s intent to 

protect individuals from surprise 

medical bills. 

Facility of the Same or Similar Facility 

Type 

If a plan or issuer has contracted rates 

for emergency services that vary based 

on the type of facility (that is, whether 

a facility is an emergency department of 

a hospital or an independent 

freestanding emergency department), 

the median contracted rate is calculated 

separately for each such facility type. 

Plans and issuers subject to the 

protections in the No Surprises Act are 

required to cover emergency services at 

both types of facilities. However, the 

Departments are aware that plans and 

issuers have not typically contracted 

with independent freestanding 

emergency departments, which may be 

a reflection of independent freestanding 

emergency departments’ historical 

ability (prior to the enactment of the No 

Surprises Act) to charge higher rates for 


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53See Medicare Payment Advisory Commission, 

Report to the Congress: Medicare and the Health 

Care Delivery System, ch. 8, Stand-alone Emergency 

Departments, June 2017, available at http://

www.medpac.gov/docs/default-source/reports/ 

jun17_ch8.pdf (last visited June 19, 2021). 

54See id. 

55Under section 332 of the PHS Act, a health 

professional shortage area is (A) an area in an urban 

or rural area (which need not conform to the 

geographic boundaries of a political subdivision 

and which is a rational area for the delivery of 

health services) which the Secretary of HHS 

determines has a health manpower shortage and 

which is not reasonably accessible to an adequately 

served area, (B) a population group which the 

Secretary determines has such a shortage, or (C) a 

public or nonprofit private medical facility or other 

public facility which the Secretary determines has 

such a shortage. All Federally qualified health 

centers and rural health clinics, as defined in 

section 1861(aa) of the Social Security Act (42 

U.S.C. 1395x(aa)), that meet the requirements of 

section 254g of title 42 shall be automatically 

designated as having such a shortage. 

56OMB Bulletin No. 20–01. ‘‘Revised 

Delineations of Metropolitan Statistical Areas, 

Micropolitan Statistical Areas, and Combined 

Statistical Areas, and Guidance on Uses of the 

Delineations of These Areas’’ (Mar. 6, 2020), 

available at https://www.whitehouse.gov/wpcontent/uploads/2020/03/Bulletin-20-01.pdf. U.S. 

Census Bureau, Delineation Files, available at 

https://www.census.gov/geographies/referencefiles/time-series/demo/metro-micro/delineationfiles.html. 

services furnished on an out-of-network 

basis, and to balance bill enrollees when 

the charges were denied in part or in 

full.53 The Departments are also aware 

that there may be appreciable 

differences in the case-mix and level of 

patient acuity between these types of 

facilities.54 Therefore, where a plan or 

issuer has established contracts with 

both hospital emergency departments 

and independent freestanding 

emergency departments, and its 

contracts vary the payment rate based 

on the facility type, the median 

contracted rate is to be calculated 

separately for each facility type. The 

Departments are of the view that this 

approach will maintain the ability of 

plans and issuers to develop QPAs that 

are appropriate to the different types of 

emergency facilities specified by statute. 

The Departments seek comment on this 

approach, and whether it would be 

more appropriate for plans and issuers 

to always calculate separate QPAs for 

hospital emergency departments and 

independent freestanding emergency 

departments regardless of whether the 

plan or issuer varies the payment rate 

based on facility type, or whether a plan 

or issuer should never calculate separate 

QPAs for hospital emergency 

departments and independent 

freestanding emergency departments. 

However, these interim final rules do 

not allow plans or issuers to separately 

calculate a median contracted rate based 

on other characteristics of facilities that 

might cause contracted rates to vary, 

such as whether a hospital is an 

academic medical center or teaching 

hospital. Given that participants, 

beneficiaries, and enrollees with 

emergency medical conditions typically 

go (or are taken) to the nearest or most 

convenient emergency department, the 

Departments are of the view that, 

individuals generally should not be 

required to pay higher cost sharing 

(such as coinsurance or a deductible) 

based on features of the emergency 

facility that may have a bearing on its 

contracted rate with plans and issuers, 

but which are unrelated or incidental to 

the facility’s role as a provider of 

emergency services. 

Geographic Regions 

Under the No Surprises Act, plans 

and issuers must calculate the median 

contracted rate for an item or service 

using contracted rates for the same or 

similar item or service provided in the 

geographic region in which the item or 

service is furnished. The No Surprises 

Act directs the Departments, in 

consultation with the National 

Association of Insurance Commissioners 

(NAIC), to establish through rulemaking 

the geographic regions to be applied 

when determining the QPA, taking into 

account access to items and services in 

rural and underserved areas, including 

health professional shortage areas, as 

defined in section 332 of the PHS Act.55

In consulting on the geographic 

regions to be applied under the No 

Surprises Act, the NAIC recommended 

that geographic regions correspond to 

the applicable rating area used for 

purposes of the individual market and 

small group market rating rules under 

section 2701 of the PHS Act, 

implemented at 45 CFR 147.102, while 

allowing states the flexibility to 

establish alternative geographic regions. 

However, some states define rating area 

by county, resulting in large numbers of 

rating areas in a state, some of which 

might include very few, if any, facilities 

and providers. Therefore, adopting the 

rating area definitions as the standard 

for geographic regions could lead to a 

large number of geographic regions for 

which a plan or issuer would have to 

calculate separate median contracted 

rates, a large number of geographic 

regions without sufficient information, 

as well as a large number of geographic 

regions in which the median contracted 

rate is influenced by outliers. 

After consultation with the NAIC, the 

Departments are establishing geographic 

regions under these interim final rules 

that reflect differences in health care 

costs based on whether care is provided 

in urban or rural areas. The Departments 

are of the view that these geographic 

regions take into account access to items 

and services in rural and underserved 

areas, including health professional 

shortage areas, as defined at section 332 

of the PHS Act. The Departments intend 

to monitor the effect of these geographic 

regions and periodically update such 

regions, as appropriate, taking into 

account the findings of the report 

submitted under section 109(a) of the 

No Surprises Act, which addresses, 

among other things, access to health 

care items and services in rural areas 

and health professional shortage areas. 

In defining ‘‘geographic regions,’’ the 

Departments have sought not only to 

minimize instances in which a plan or 

issuer lacks sufficient information to 

calculate the median of contracted rates 

in any particular geographic region, but 

also to limit the instances in which a 

plan or issuer has only the minimum 

amount of information to meet the 

sufficient information standard, as 

discussed later in this preamble. Using 

larger geographic regions, for which 

plans and issuers are likely to have 

more information, is expected to reduce 

the likelihood that the median of 

contracted rates would be skewed by 

contracts under which the parties have 

agreed to particularly high or low 

payment amounts. 

Under these interim final rules, for 

items and services other than air 

ambulance services, a geographic region 

is generally defined as one region for 

each metropolitan statistical area (MSA) 

in a state and one region consisting of 

all other portions of the state. The 

delineations for MSAs are described by 

the U.S. Office of Management and 

Budget (OMB) and published by the 

U.S. Census Bureau.56 MSAs encompass 

at least one urbanized area with a 

population of 50,000 or more people, 

plus adjacent territory that has a high 

degree of social and economic 

integration with the core as measured by 

commuting ties. MSAs are always 

established along county boundaries, 

but may include counties from more 

than one state. Under this definition, 

MSAs that cross state boundaries are 

divided between the respective states, 

with all the counties in a particular 

MSA in each state counted as a 

geographic region. 

However, under this definition, if a 

plan or issuer does not have sufficient 

information to calculate the median of 

contracted rates for an item or service 

provided in an MSA, the plan or issuer 

must consider all MSAs in the state to 

be a single region when calculating the 

median of contracted rates for the item 


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57U.S. Department of Commerce Economics and 

Statistics Administration, U.S. Census Bureau, 

available at https://www2.census.gov/geo/pdfs/ 

maps-data/maps/reference/us_regdiv.pdf. 

58See 45 CFR 153.710(c) (requiring an issuer of 

a risk adjustment covered plan or a reinsuranceeligible plan in a state in which HHS is operating 

the risk adjustment or reinsurance program, as 

applicable, that does not generate individual 

enrollee claims in the normal course of business to 

derive the costs of all applicable provider 

encounters using its principal internal methodology 

for purposes of pricing those encounters). 

59See 26 CFR 54.9815–2715A3(b)(1)(C); 29 CFR 

2590.715–2715A3(b)(1)(C); 45 CFR 147.212(b)(1)(C) 

(requiring plans and issuers that use underlying fee 

schedule rates for calculating cost sharing to make 

publicly available on an internet website the 

underlying fee schedule rates for all covered items 

and services). 

60This definition is substantially similar to the 

definition of ‘‘underlying fee schedule rate’’ in the 

transparency in coverage regulations at 26 CFR 

54.9815–2715A1(a)(2)(xxii), 29 CFR 2590.715– 

2715A1(a)(2)(xxii), and 45 CFR 147.210(a)(2)(xxii). 

or service provided in that MSA. In 

such cases, all MSAs in the state will 

constitute one geographic region, and all 

other portions of the state will continue 

to constitute a different region. If after 

applying these broader regions, a plan 

or issuer continues to have insufficient 

information to calculate the median of 

contracted rates, geographic regions will 

be based on Census divisions, with one 

region consisting of all MSAs in the 

Census division, and one region 

consisting of all other portions of the 

Census division. There are nine Census 

divisions, as published by the U.S. 

Census Bureau.57 This approach will 

help to reduce instances in which a plan 

or issuer cannot rely on its own 

contracted rates to determine the QPA 

in cases where the plan or issuer is not 

limited to operating within a single state 

but instead has provider contracts in a 

multi-state region. 

These interim final rules establish 

alternate geographic regions with 

respect to air ambulance services. Given 

the nature of air ambulance services, the 

infrequency with which they are 

provided relative to the other types of 

items and services subject to the No 

Surprises Act, and the lower prevalence 

of participating providers of air 

ambulance services, the Departments 

have determined not to apply a 

definition of geographic regions based 

on MSAs, as narrow regions would 

result in more instances of insufficient 

information. 

Thus, for air ambulance services, a 

geographic region means one region 

consisting of all MSAs in the state, and 

one region consisting of all other 

portions of the state. If a plan or issuer 

does not have sufficient information to 

calculate the median of the contracted 

rates for an air ambulance service using 

that definition of a geographic region, 

these interim final rules apply broader 

regions based on Census divisions—that 

is, one region consisting of all MSAs in 

each Census division and one region 

consisting of all other portions of the 

Census division. Because air ambulance 

services can be furnished over large 

distances, these interim final rules 

provide that the geographic region to be 

applied for air ambulance services is 

determined based on the point of pickup, meaning the location of the 

individual at the time the individual is 

placed on board the air ambulance. This 

approach is generally consistent with 

prevailing market practices among both 

private and public payers. 

Non-Fee-for-Service Contractual 

Arrangements 

The No Surprises Act provides that 

rulemaking to establish the 

methodology used to determine the 

QPA must take into account payments 

that are made by a plan or issuer that 

are not on a fee-for-service basis. The 

Departments are aware that many types 

of alternative reimbursement models 

exist that are not standard fee-forservice arrangements. For example, 

under a bundled payment arrangement, 

plans and issuers may reimburse a 

provider for multiple items and services 

under a single billing code. Other payers 

have capitation arrangements, under 

which a provider or panel of providers 

is paid a fixed amount per member per 

month. 

The Departments understand that 

when a plan or issuer has a fully- or 

partially-capitated payment 

arrangement, the plan or issuer also 

typically has an internal methodology 

used to value claims for those payments 

made on a capitated basis. For example, 

a plan or issuer with capitation 

arrangements may have an underlying 

fee schedule that is used to calculate an 

individual’s cost sharing. The 

Departments are of the view that, when 

a plan or issuer has an underlying fee 

schedule used to determine cost sharing 

under non-fee-for-service contracts, it is 

reasonable for the plan or issuer to use 

the same methodology to assign a value 

to the item or service for purposes of 

determining the QPA. This approach is 

used by plans and issuers in other 

similar contexts, including when 

providing data for the risk adjustment 

program 58 and when making publicly 

available in-network rates under the 

transparency in coverage regulations.59

Therefore, in the case of these 

alternative payment models, such as 

bundled and fully or partially capitated 

arrangements, where payment made by 

a plan or issuer is not fully on a fee-forservice basis, these interim final rules 

provide that the plan or issuer must 

calculate a median contracted rate for 

each item or service using the 

underlying fee schedule rates for the 

relevant items and services, if 

underlying fee schedule rates are 

available. The term ‘‘underlying fee 

schedule rate’’ means the rate for a 

covered item or service from a particular 

participating provider, providers, or 

facility that a group health plan or 

health insurance issuer uses to 

determine a participant’s, beneficiary’s, 

or enrollee’s cost-sharing liability for the 

item or service, when that rate is 

different from the contracted rate.60 If 

there is no underlying fee schedule rate 

for an item or service, these interim 

final rules provide that the plan or 

issuer must calculate the median 

contracted rate using a derived amount, 

which, consistent with the definition in 

the transparency in coverage 

regulations, is the price that a plan or 

issuer assigns an item or service for the 

purpose of internal accounting, 

reconciliation with providers, or for the 

purpose of submitting data in 

accordance with the requirements of 45 

CFR 153.710(c). 

The Departments considered 

alternative approaches to account for 

non-fee-for-service contractual 

arrangements, such as requiring plans 

and issuers to calculate median 

contracted rates for service bundles, or 

allowing plans or issuers to disregard 

certain types of non-fee-for-service 

contracts for purposes of calculating the 

median contracted rate. However, the 

approach specified in these interim final 

rules will ensure that the median 

contracted rate calculation accounts for 

a range of different contractual 

arrangements, including instances 

where a plan or issuer uses different 

types of contracting models with 

different providers and facilities. Using 

an underlying fee schedule or derived 

amount will allow plans or issuers to, in 

essence, convert each of their non-feefor-service contracts into fee-for-service 

arrangements for purposes of calculating 

the median contracted rate. By avoiding 

instances where plans or issuers might 

have been required to disregard some of 

their contracts, this approach minimizes 

the number of instances in which a plan 

or issuer would not have sufficient 

information to calculate a median 

contracted rate and ensures that 

arrangements that pay for value over 

service volume are reflected in the QPA. 

In addition, this approach will result in 

the calculation of a QPA that aligns with 

a service code (or service-code modifier 


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combination). The Departments 

anticipate this result will be helpful to 

nonparticipating providers and facilities 

in understanding how much cost 

sharing they are permitted to charge for 

a given item or service, and as they 

negotiate with the plan or issuer to 

determine the out-of-network rate. 

It is the Departments’ understanding 

that under certain capitated and 

bundled payment arrangements, 

providers’ payments may be reconciled 

retrospectively to account for 

utilization, value adjustments, or other 

weighting factors that can affect the 

final payment to a provider. In addition, 

payers and providers may agree to 

certain incentive payments during the 

contracting process to promote the 

provision of higher-quality, lower-cost 

health care to participants, beneficiaries, 

or enrollees over time. These interim 

final rules specify that when calculating 

median contracted rates, plans and 

issuers must exclude risk sharing, 

bonus, or penalty, and other incentivebased and retrospective payments or 

payment adjustments. The Departments 

are of the view that excluding these 

payments and payment adjustments 

from the median contracted rates used 

to determine cost sharing for items and 

services furnished by nonparticipating 

providers or facilities is consistent with 

how cost sharing is typically calculated 

for in-network items and services, 

where the cost-sharing amount is 

customarily determined at or near the 

time an item or service is furnished, and 

is not subject to adjustment based on 

changes in the amount ultimately paid 

to the provider or facility as a result of 

any incentives or reconciliation process. 

b. Indexing 

The No Surprises Act provides that, 

in instances when the median 

contracted rate is determined as of 

January 31, 2019, the QPA for items and 

services furnished during 2022 is 

calculated by increasing the median 

contracted rate by the percentage 

increase in the consumer price index for 

all urban consumers (U.S. city average) 

(CPI–U) over 2019, the percentage 

increase over 2020, and the percentage 

increase over 2021. The No Surprises 

Act further provides that the QPA for 

2022 is then adjusted annually for items 

and services furnished during 2023 or a 

subsequent year. Therefore, the increase 

for any year is the CPI–U for the year, 

as so defined, divided by the CPI–U for 

the prior year. The combined percentage 

increase for 2019, 2020, and 2021 to 

determine the amount for 2022 is the 

product of the CPI–U increases for 2019, 

2020, and 2021 multiplied together. For 

any year, the factor will be the quotient 

of CPI–U for the current year divided by 

the CPI–U for the prior year. For 

example, for an item or service provided 

in 2023, the 2023 QPA is the 2022 QPA 

multiplied by the CPI–U 2022/CPI–U 

2021. 

These interim final rules provide 

specifications for calculating the 

percentage increase in CPI–U to ensure 

that all plans and issuers adjust the 

percentage in a uniform manner. In 

order to ensure that uniformity, these 

interim final rules provide that plans 

and issuers will calculate the increases 

using the factors determined by the 

Treasury Department and the IRS, and 

published in guidance by the IRS. In 

determining the factors, these interim 

final rules provide that the percentage 

increase for any year is calculated by 

using the CPI–U published by the 

Bureau of Labor Statistics of the DOL. 

For this purpose, the CPI–U for each 

calendar year is the average of the CPI– 

U as of the close of the 12-month period 

ending on August 31 of the calendar 

year, rounded to 10 decimal places. This 

allows the Departments to provide the 

percentage increase factor before 

January 1 of each applicable year with 

sufficient time to adjust the QPAs for 

the year. 

c. Special Rules for Unit-Based Services 

These interim final rules provide 

special rules for calculating the QPA for 

items or services for which a plan or 

issuer generally determines the 

reimbursement level for the same or 

similar items or services by multiplying 

the contracted rate by another unit, such 

as time or mileage. In these cases, 

indexing the median contracted rate to 

calculate the QPA would result in an 

amount that does not reflect the other 

units that are generally considered 

when calculating the in-network 

payment amount. Therefore, when 

reimbursement levels are determined 

using this approach, these interim final 

rules specify that the QPA is calculated 

by determining the median contracted 

rate used for that item or service, 

indexing that median amount in 

accordance with the otherwise 

applicable rules regarding indexing, and 

then applying the pertinent multipliers. 

These interim final rules also include 

specific instructions for calculating the 

QPA for anesthesia services and for 

certain service codes for air ambulance 

services. 

Anesthesia Services 

Payers generally calculate payment 

amounts for anesthesia services by 

multiplying the negotiated rate for the 

anesthesia conversion factor that has 

been negotiated between the payer and 

the provider (expressed in dollars per 

unit) by (1) the base unit for the 

anesthesia service code, (2) the time 

unit, and (3) the physical status 

modifier unit. The base unit, time unit, 

and physical status modifier unit are 

specific to the individual receiving the 

anesthesia services. These units are not 

expressed in dollars per unit, nor do 

they vary by contract. The base units for 

an anesthesia service code are the 

American Society of Anesthesiologists 

Relative Value Guide base units for that 

service code. The time unit represents 

the length of time during which the 

anesthesia services were furnished, and 

for purposes of the QPA methodology, 

is measured in 15-minute increments or 

a fraction thereof. The physical status 

modifier on a claim is a standard 

modifier describing the physical status 

of the patient and is used to distinguish 

between the various levels of 

complexity of the anesthesia services 

provided, and is expressed as a unit 

with a value between zero (0) and three 

(3). 

These interim final rules include a 

methodology for calculating the QPA for 

these anesthesiology services that 

reflects the manner in which providers 

are generally paid for these services. To 

calculate the QPA for anesthesia 

services furnished during 2022, these 

interim final rules require the plan or 

issuer to, first, take the median 

contracted rate for the anesthesia 

conversion factor (determined in 

accordance with the methodology for 

calculating median contracted rates for 

service code-modifier combinations) for 

the same or similar item or service as of 

January 31, 2019, and increase that 

amount to account for changes in the 

CPI–U, using the methodology 

described earlier in this section of the 

preamble. This amount is referred to as 

the indexed median contract rate. The 

plan or issuer must then multiply this 

indexed median contracted rate for the 

anesthesia conversion factor by the sum 

of the base unit (using the value 

specified in the most recently published 

edition (as of the date of service) of the 

American Society of Anesthesiologists 

Relative Value Guide), time unit, and 

physical status modifier units of the 

participant, beneficiary, or enrollee to 

whom anesthesia services are furnished 

to determine the QPA. 

To calculate the QPA for anesthesia 

services furnished during 2023 or a 

subsequent year, the plan or issuer must 

use the indexed median contracted rate 

for the anesthesia conversion factor, and 

adjust that amount by the percentage 

increase in the CPI–U over the previous 

year using the methodology described 

earlier in this section of the preamble. 


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The plan or issuer must then multiply 

that amount by the sum of the base unit 

(using the value specified in the most 

recently published edition (as of the 

date of service) of the American Society 

of Anesthesiologists Relative Value 

Guide), time unit, and physical status 

modifier units for the participant, 

beneficiary, or enrollee to whom 

anesthesia services are furnished to 

determine the QPA. 

Air Ambulance Services 

Payers often reimburse for air 

ambulance services in part by using air 

mileage service codes (A0435 and 

A0436) and reimbursement levels that 

reflect the number of miles an 

individual is transported by the air 

ambulance, which are referred to as 

loaded miles. Payment amounts are 

calculated by multiplying the negotiated 

rate for the service code, referred to in 

this rule as the air mileage rate, by the 

number of loaded miles. These interim 

final rules include a methodology for 

calculating the QPA for these air 

mileage service codes that reflects the 

manner in which providers are 

generally paid for the service codes. 

To calculate the QPA for the portion 

of air ambulance services billed using 

the air mileage service codes that are 

furnished during 2022, the plan or 

issuer must first increase the median 

contracted rate, in accordance with 26 

CFR 54.9816–6T(c)(1)(i), 29 CFR 

2590.716–6(c)(1)(i), or 45 CFR 

149.140(c)(1)(i), as applicable. This 

amount is referred to as the indexed 

median air mileage rate. The plan or 

issuer must then multiply the indexed 

median air mileage rate by the number 

of loaded miles provided to the 

participant, beneficiary, or enrollee to 

determine the QPA. 

To calculate the QPA for air 

ambulance services billed using the air 

mileage service codes (A0435 and 

A0436) that are furnished during 2023 

or a subsequent year, the plan or issuer 

must increase the indexed median air 

mileage rate, determined for such 

services furnished in the immediately 

preceding year, using the methodology 

described in 26 CFR 54.9816– 

6T(c)(1)(ii), 29 CFR 2590.716–6(c)(1)(ii), 

or 45 CFR 149.140(c)(1)(ii), as 

applicable. The plan or issuer must then 

multiply the indexed median air 

mileage rate by the number of loaded 

miles provided to the participant, 

beneficiary, or enrollee to determine the 

QPA. 

d. Cases With Insufficient Information 

Section 9816(a)(3)(E)(iii) of the Code, 

section 716(a)(3)(E)(iii) of ERISA, and 

section 2799A–1(a)(3)(E)(iii) of the PHS 

Act, as added by the No Surprises Act, 

specify an alternative process to 

determine the QPA in cases where a 

group health plan or health insurance 

issuer offering group or individual 

health insurance coverage lacks 

sufficient information to calculate the 

median of contracted rates in 2019, as 

well as for newly covered items or 

services in the first coverage year after 

2019. 

Definition of Sufficient Information 

Under these interim final rules, a plan 

or issuer is considered to have sufficient 

information to calculate the median of 

contracted rates if the plan or issuer has 

at least three contracted rates on January 

31, 2019, to calculate the median of the 

contracted rates in accordance with the 

methodology in these interim final 

rules. In the Departments’ view, while a 

median contracted rate could be 

calculated with a smaller number of 

contracts, requiring a minimum of three 

contracted rates is supported by the 

statute’s direction to calculate a median, 

rather than a mean. Furthermore, the 

Departments have determined that three 

contracted rates for a particular item or 

service in a geographic region represents 

the minimum number of contracts 

necessary to reasonably reflect typical 

market negotiations while reducing the 

potential for outlier rates to unduly 

influence the calculation of the QPA. 

Under section 9816(a)(3)(E)(iii) of the 

Code, section 716(a)(3)(E)(iii) of ERISA, 

section 2799A–1(a)(3)(E)(iii) of the PHS 

Act, and these interim final rules, where 

a plan or issuer that initially does not 

have sufficient information to calculate 

the median contracted rate based on 

January 31, 2019 contracted rates (or for 

new plans and coverage or new service 

codes, as discussed in more detail in 

this section of the preamble) later gains 

sufficient information, the plan or issuer 

must calculate the QPA using the 

median contracted rate for the first 

sufficient information year. The first 

sufficient information year is defined as: 

(1) In the case of an item or service for 

which a plan or issuer does not have 

sufficient information to calculate the 

median of contracted rates in 2019, the 

first year after 2022 for which the plan 

or issuer has sufficient information to 

calculate the median of contracted rates 

in the year immediately preceding that 

first year after 2022; and (2) in the case 

of a newly covered item or service, the 

first year after the first coverage year for 

such item or service with respect to 

such plan or coverage for which the 

plan or issuer has sufficient information 

to calculate the median of the 

contracted rates in the year immediately 

preceding that first year. 

In cases in which contracted rates for 

a year after 2019 must be used to 

calculate the median contracted rate, a 

plan or issuer will be considered to have 

sufficient information to calculate the 

median contracted rate for a year if, 

with respect to that year, both of the 

following conditions are met: (1) The 

plan or issuer has at least three 

contracted rates on January 31 of the 

year immediately preceding that year to 

calculate the median of the contracted 

rates in accordance with the 

methodology in these interim final 

rules; and (2) the contracted rates 

account (or are reasonably expected to 

account) for at least 25 percent of the 

total number of claims paid for that item 

or service for that year with respect to 

all plans of the sponsor (or of the 

administering entity, if applicable) or all 

coverage offered by the issuer that are 

offered in the same insurance market. 

The requirement that a plan or issuer 

have at least three contracted rates for 

a particular item or service in a 

geographic region is the same as the 

requirement that applies when 

determining whether there is sufficient 

information to calculate a median 

contracted rate for items and services 

furnished during 2022 using the median 

of contracted rates as of January 31, 

2019. The 25 percent minimum claims 

volume requirement, however, applies 

where only contracted rates for years 

after 2019 are used to determine 

whether a plan or issuer has sufficient 

information to calculate the median 

contracted rate in the first sufficient 

information year. While the 

Departments are not concerned about 

manipulation of the QPA in the majority 

of cases where the median contracted 

rate is based on 2019 contracted rates, 

the Departments recognize the potential 

for plans and issuers to engage in 

selective contracting practices that 

artificially change the median 

contracted rate in cases where 

subsequent year contracted rates are 

used to determine the QPA. Therefore, 

this requirement will help to ensure that 

when contracted rates for years after 

2019 are used to calculate a median 

contracted rate, those network contracts 

represent a reasonable proportion of a 

plan’s or issuer’s total claims and are 

not designed to manipulate the QPA. 

Eligible Databases 

In cases in which a plan or issuer 

does not have ‘‘sufficient information’’ 

to calculate a median contracted rate, 

the No Surprises Act directs the plan or 

issuer to determine the QPA through 

use of any database that is determined, 

in accordance with rulemaking issued 

by the Departments, to not have any 


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61Under section 1115 of the Social Security Act, 

the Secretary of HHS has the authority to approve 

experimental, pilot, or demonstration projects that, 

in his judgment, are likely to assist in promoting the 

objectives of the Medicaid statute. Under section 

1115 authority, the Secretary may waive 

compliance with certain provisions of Medicaid 

and CHIP law and may authorize federal matching 

funds for state expenditures that would not 

otherwise be federally matchable under the 

Medicaid and CHIP statutes. Many states have 

section 1115 demonstrations under which they 

cover services that would not otherwise be covered 

under the Medicaid or CHIP programs. 

conflicts of interest and to have 

sufficient information reflecting allowed 

amounts paid to a health care provider 

or facility for relevant services furnished 

in the applicable geographic region 

(such as a state all-payer claims 

database). 

These interim final rules establish 

standards for databases, referred to as 

eligible databases, that may be used to 

determine the QPA. State all-payer 

claims databases are categorically 

eligible under these interim final rules 

because they are specifically identified 

as not having any conflicts of interest 

and as having sufficient information 

reflecting allowed amounts in section 

9816(a)(3)(E)(iii)(I) of the Code, section 

716(a)(3)(E)(iii)(I) of ERISA, and section 

2799–1(a)(3)(E)(iii)(I) of the PHS Act. 

Other third-party databases may also be 

eligible, provided all of the following 

conditions are satisfied. 

First, the database or the organization 

maintaining the database cannot be 

affiliated with, or owned or controlled 

by, any health insurance issuer, or a 

health care provider, facility, or 

provider of air ambulance services, or 

any member of the same controlled 

group as, or under common control 

with, any such entity. For example, if a 

majority of the members on the 

governing board of a database or the 

organization maintaining the database 

are associated with a health insurance 

issuer, the database would be 

considered to have a conflict of interest 

under these interim final rules, since it 

is controlled by the issuer. As another 

example, if an issuer owns 40 percent of 

the stock of the organization that 

maintains a database, and its subsidiary 

owns an additional 20 percent of the 

stock of the organization that maintains 

the database, the database would be 

considered to have a conflict of interest 

under these interim final rules, since it 

is effectively controlled by the issuer. 

As a third example, if an issuer and the 

organization that maintains a database 

are both subsidiaries of the same parent 

organization, the database would be 

considered to have a conflict of interest 

under these interim final rules, since it 

is affiliated with the issuer. In the 

Departments’ view, this standard is 

critical to ensuring the independence of 

any database used to determine the 

QPA. The Departments solicit comment 

on whether a database should not be 

affiliated with, or owned or controlled 

by, other entities, such as plan sponsors 

or third-party administrators, in order to 

avoid a conflict of interest. The 

Departments also seek comment on 

whether to establish a specific threshold 

that a party’s minority ownership 

interest must meet or exceed in order to 

create a conflict of interest for purposes 

of these interim final rules. 

For purposes of applying the 

controlled group rules to eligible 

databases, a controlled group means a 

group of two or more persons that is 

treated as a single employer under Code 

sections 52(a), 52(b), 414(m), or 414(o). 

The Treasury Department and the IRS 

are considering whether further 

guidance is needed under section 52(a) 

or (b) of the Code to address either 

organizations exempt from tax under 

section 501(a) of the Code or nonprofit 

organizations that, although not exempt 

from tax under section 501(a) of the 

Code, do not have members or 

shareholders that are entitled to receive 

distributions of the organization’s 

income or assets (including upon 

dissolution) or that otherwise retain 

equity interests similar to those 

generally held by owners of for-profit 

entities. Until further guidance is 

issued, those two types of organizations 

may either rely on a reasonable, goodfaith application of section 52(a) and (b) 

of the Code (taking into account the 

reasons for which the controlled group 

rules are incorporated into the 

definition of eligible database) or apply 

the rules set forth in 26 CFR 1.414(c)– 

5(a) through (d) (but substituting ‘‘more 

than 50 percent’’ in place of ‘‘at least 80 

percent’’ each place it appears in 26 

CFR 1.414(c)–5). 

Second, the database must have 

sufficient information reflecting innetwork amounts paid by group health 

plans or health insurance issuers 

offering group or individual health 

insurance coverage to providers, 

facilities, or providers of air ambulance 

services for relevant items and services 

furnished in the applicable geographic 

region. The Departments recognize that 

for a database to be used to calculate the 

QPA, the database should contain 

sufficient data to reflect the true market 

dynamics in a given geographic region. 

However, in order to provide flexibility 

in the initial implementation of the No 

Surprises Act, these interim final rules 

do not establish a specific definition of 

when a database is considered to have 

sufficient information. The Departments 

seek comment on how to define when 

a database has sufficient information, 

including whether to establish specific 

criteria that a claims database would 

need to satisfy in order to demonstrate 

that it has sufficient information 

reflecting in-network payment amounts 

for providers or facilities in the 

applicable geographic region, such as a 

requirement that the database represents 

a specified minimum percentage of the 

claims volume for the region. 

Third, the database must have the 

ability to distinguish amounts paid to 

participating providers and facilities by 

commercial payers, such as group 

health plans and health insurance 

issuers offering group or individual 

health insurance coverage, from all 

other claims data, such as amounts 

billed by nonparticipating providers or 

facilities and amounts paid by public 

payers, including the Medicare program 

under title XVIII of the Social Security 

Act, the Medicaid program under title 

XIX of the Social Security Act (or a 

demonstration project under title XI of 

the Social Security Act),61 and the 

Children’s Health Insurance Program 

under title XXI of the Social Security 

Act. 

To calculate the QPA for an item or 

service furnished during 2022 (or in the 

case of newly covered items or services, 

in the first coverage year) using an 

eligible database, the plan or issuer 

must first identify the rate in the 

database that is equal to the median of 

the in-network allowed amounts for the 

same or similar item or service in the 

geographic region in the year 

immediately preceding the year in 

which the item or service is furnished 

(or in the case of a newly covered item 

or service, the year immediately 

preceding the first coverage year). It is 

the Departments’ view that in-network 

allowed amounts for items and services 

are a reasonable proxy for contracted 

rates, and that where there is 

insufficient information to calculate the 

QPA based on the median of a plan’s or 

issuer’s own contracted rates, using the 

median of in-network allowed amounts 

for all private payers in an eligible 

database is a reasonable method for 

approximating the median contracted 

rate for items and services in the 

applicable geographic region. The 

Departments are also of the view that 

determining the QPA for an item or 

service using the median of in-network 

allowed amounts for the same or similar 

item or service in the geographic region 

in the year immediately preceding the 

year in which the item or service is 

furnished is reasonably likely to result 

in levels of cost sharing that are 


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62For example, these interim final rules permit a 

plan or issuer to rely on different state all-payer 

claims databases, based on the geographic region in 

which an item or service is furnished, as state allpayer claims databases may not have sufficient data 

for items and service furnished outside of the state. 

generally in line with the cost-sharing 

liability incurred by participants, 

beneficiaries, and enrollees in plans 

with similar levels of in-network costsharing for the same or similar items or 

services. 

Once the median in-network allowed 

amount has been identified, that rate is 

then increased by the percentage 

increase in the CPI–U over the previous 

year using the methodology described 

earlier in this section of the preamble. 

For each subsequent year before the first 

sufficient information year, the plan or 

issuer must increase the QPA applicable 

to items or services furnished in the 

immediately preceding year by the 

percentage increase in CPI–U over the 

preceding year. Plans and issuers must 

continue to use this methodology until 

the first sufficient information year, at 

which point the plan or issuer must 

calculate the median contracted rate and 

determine the QPA using the standard 

methodology discussed earlier in this 

section of the preamble. 

These interim final rules require that 

plans and issuers use a consistent 

methodology when relying on an 

eligible database. Specifically, for any 

particular item or service, a plan or 

issuer using a database must use the 

same database to determine the QPA for 

that item or service through the last day 

of the calendar year, and if a different 

database is selected for some items or 

services, the basis for that selection 

must be one or more factors not directly 

related to the rate of those items or 

services (such as sufficiency of data for 

those items or services).62 This 

consistency requirement is designed to 

ensure that when relying on an eligible 

database to determine the QPA for an 

item or service, a plan or issuer cannot 

vary the database selected due to the 

rates associated with that item or 

service. The Departments seek comment 

on this consistency requirement and 

whether additional standards or 

guidance are needed to ensure 

compliance and prevent abuse. 

Finally, these interim final rules 

codify section 9816(d) of Code, section 

716(d) of ERISA, and section 2799A– 

1(d) of PHS Act, as added by the No 

Surprises Act, which provide that a plan 

or issuer that uses an eligible database 

to determine the QPA by reason of 

having insufficient information is 

responsible for any costs associated 

with accessing such database. The 

Departments solicit comment on ways 

to help ensure that plans and issuers are 

charged only reasonable costs for 

accessing such databases and that 

entities that provide eligible databases 

are transparent about their fees and fee 

structures associated with this process. 

New Plans and Coverage 

The No Surprises Act directs the 

Departments to establish a methodology 

for the sponsor of a group health plan 

or a health insurance issuer that did not 

offer any plan or coverage in a 

geographic region in 2019 to determine 

QPAs for the first year in which the plan 

or coverage will be offered in the 

geographic region. For each subsequent 

year, that amount is increased by the 

percentage increase in the consumer 

price index for all urban consumers over 

the previous year. 

The Departments recognize that while 

a sponsor or issuer may be newly 

offering coverage in a geographic region, 

the sponsor or issuer may have 

sufficient existing provider contracts 

under other current coverage in the 

geographic region where an item or 

service is furnished to calculate the 

QPA. The Departments clarify that it is 

not necessary to establish special 

procedures to calculate the QPA in 

these situations. Therefore, under these 

interim final rules, if the plan or issuer 

newly offering coverage in a geographic 

region for a year after 2019 otherwise 

has sufficient information to calculate a 

median contracted rate in 2019 in the 

geographic region where the item or 

service is furnished, the QPA is 

determined using the standard 

methodology for calculating median 

contracted rates discussed earlier in this 

section of the preamble. 

The Departments recognize that the 

standard methodology would not be 

available, however, in cases where the 

plan or issuer does not have sufficient 

information to calculate a median 

contracted rate in the geographic region 

in which the item or service is 

furnished, such as in situations where 

the sponsor or issuer did not offer any 

plan or coverage in 2019. In this case, 

the plan or issuer must determine the 

QPA in accordance with the rules 

applicable to plans or issuers with 

insufficient information, or for newly 

covered items and services, including 

the use of an eligible database, as 

discussed earlier in this section of the 

preamble. 

For each subsequent year the plan or 

coverage is offered in the geographic 

region, the plan or issuer must increase 

the QPA for items or services furnished 

in the immediately preceding year by 

the percentage increase in the CPI–U 

over the previous year to determine the 

QPA for items and services furnished in 

that year. Under this approach, new 

plans and coverage that initially do not 

have sufficient information to calculate 

a median contracted rate must use a 

QPA based on information for the first 

year of coverage from an eligible 

database indefinitely, updated only by 

the inflation adjustment. The 

Departments seek comment on whether 

the methodology should instead allow 

new plans and coverage to transition to 

calculating a QPA using median 

contracted rates in an applicable first 

sufficient information year. 

New Service Codes 

When service codes are created, plans 

and issuers may be unable to calculate 

the QPA using the approaches discussed 

earlier, because neither the plan or 

issuer nor any eligible databases have 

sufficient information regarding the new 

service code. This situation may occur 

for new service codes when the service 

codes describe items or services that 

have not previously been widely 

furnished. This situation may also occur 

when service codes are substantially 

revised, resulting in new service codes 

or new descriptors for existing service 

codes that substantially alter the types 

of services that would be billed using 

the original service codes. In this case, 

the plan, issuer, or eligible database may 

have sufficient information regarding 

rates for items and services billed under 

the service code prior to the revision, 

but that information may no longer 

reflect the rates associated with the 

items and services billed under the 

revised service code. The No Surprises 

Act does not specify a methodology for 

calculating the QPA in these 

circumstances. However, in the 

Departments’ view, it is necessary that 

these interim final rules establish a 

methodology that plans and issuers can 

rely on for calculating QPAs for new 

service codes during periods of time 

when no eligible databases would 

reasonably be expected to have 

sufficient data to calculate a QPA. 

These interim final rules define ‘‘new 

service code’’ to mean a service code 

that was created or substantially revised 

in a year after 2019. In situations in 

which a plan or issuer is billed for a 

covered item or service using a new 

service code, the plan or issuer must 

first identify a reasonably related service 

code that existed in the immediately 

preceding year. For example, a 

reasonably related service code might be 

another service code within the same 

family of codes, or might involve 

services that represent similar relative 

value units. This related service code 

will be used as a benchmark for 


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determining the QPA for the new 

service code. The Departments seek 

comment on whether additional rules 

are needed regarding how plans and 

issuers should be required to identify a 

reasonably related service code, and on 

whether the Departments should 

develop a crosswalk methodology to 

identify related service codes for each 

new service code. 

The Departments are of the view that, 

although Medicare payment rates may 

differ substantially from rates paid by 

plans and issuers, it is reasonable to use 

Medicare payment rates to approximate 

the relative cost of two different but 

reasonably related service codes. 

Therefore, if CMS has established a 

payment rate under the Medicare 

program for an item or service billed 

under the new service code, the plan or 

issuer must calculate the ratio of the rate 

that Medicare pays for the item or 

service billed under the new service 

code compared to the rate that Medicare 

pays for the item or service under the 

related service code (with both rates 

disregarding any adjustments for valuebased purchasing arrangements that 

could lead to bonuses or deductions), 

and multiply that ratio by the QPA for 

the related service code for the year in 

which the item or service is furnished. 

The Departments recognize that in 

some cases the Medicare program might 

not immediately establish a payment 

rate for items and services billed under 

a new service code. Therefore, these 

interim final rules establish a secondary 

approach to determine the QPA in these 

situations. Specifically, for items and 

services billed using a new service code 

for which Medicare has not established 

a payment rate, the plan or issuer must 

calculate the QPA by first calculating 

the ratio of the rate that the plan or 

issuer reimburses for an item or service 

billed under the new service code 

compared to the rate that the plan or 

issuer reimburses for an item or service 

under the related service code (the 

relativity ratio), and then multiplying 

the relativity ratio by the QPA for the 

item or service billed under the related 

service code. These interim final rules 

do not specify a particular method that 

plans and issuers must use to calculate 

this relativity ratio. However, the 

Departments expect plans and issuers to 

use a reasonable method for making the 

calculation, and seek comment on 

whether future rulemaking should 

specify additional requirements for 

determining the relativity ratio. For 

example, plans and issuers could be 

required to calculate the ratio using the 

medians or means of the contracted 

rates for each of the two services. 

However, the Departments recognize 

that it may take time for plans and 

issuers to enter into negotiated rates for 

new service codes, and therefore the 

medians or means may change over 

time. Alternatively, plans and issuers 

could be required to calculate the 

relativity ratio using rates from one 

contract, based on the assumption that 

negotiated rates within any given 

contract would generally produce a 

similar relativity ratio. The Departments 

are of the view that using rates from two 

different contracts would not constitute 

a reasonable method for calculating the 

relativity ratio, as this approach could 

introduce into the relativity ratio, 

variation from factors that are unrelated 

to the relative cost of furnishing the 

item or service, such as the negotiating 

power of the parties to the contract. 

Under the methodology in these 

interim final rules, for items or services 

furnished in any subsequent year 

(before the first sufficient information 

year for such item or service with 

respect to such plan or coverage or 

before the first year for which an eligible 

database has sufficient information in 

the immediately preceding year), the 

plan or issuer must calculate the QPA 

by increasing the QPA calculated for the 

prior year by the percentage increase in 

CPI–U over the immediately preceding 

year. 

However, for an item or service billed 

using a new service code, and furnished 

in the first sufficient information year 

for such item or service with respect to 

such plan or coverage, or furnished in 

the first year for which an eligible 

database has sufficient information to 

enable the plan or issuer to calculate the 

QPA using the processes that generally 

apply when an issuer or plan has 

insufficient information, the plan or 

issuer must calculate the QPA in 

accordance with 26 CFR 54.9816– 

6T(c)(3), 29 CFR 2590.716–6(c)(3), or 45 

CFR 149.140(c)(3), as applicable. Thus, 

once the plan or issuer or an eligible 

database has sufficient information to 

calculate a QPA, the QPA for a new 

service code would be calculated using 

the median contracted rate of the plan 

or issuer, or the median of the innetwork allowed amounts in the eligible 

database. 

The Departments seek comment on 

any alternate approaches that could be 

used to determine the QPA for new 

service codes. 

e. Information To Be Shared About the 

QPA 

The No Surprises Act directs the 

Departments to specify the information 

that a plan or issuer must share with a 

nonparticipating provider or 

nonparticipating emergency facility, as 

applicable, when making a 

determination of a QPA. 

The Departments recognize that 

providers, emergency facilities, and air 

ambulance providers subject to the 

surprise billing rules need transparency 

regarding how the QPA was determined. 

This information is also important in 

informing the negotiation process. In 

addition, IDR entities are directed by 

statute to consider the QPA when 

selecting an offer submitted by the 

parties through the IDR process. 

Therefore, to decide whether to initiate 

the IDR process and what offer to 

submit, a provider, emergency facility, 

or provider of air ambulance services 

must know not only the value of the 

QPA, but also certain information on 

how it was calculated. 

The Departments seek to ensure 

transparent and meaningful disclosure 

about the calculation of the QPA while 

minimizing administrative burdens on 

plans and issuers. These interim final 

rules therefore require that plans and 

issuers make certain disclosures with 

each initial payment or notice of denial 

of payment, and that plans and issuers 

must provide additional information 

upon request of the provider or facility. 

This information must be provided in 

writing, either on paper or 

electronically, to a nonparticipating 

provider, emergency facility, or provider 

of air ambulance services, as applicable, 

when the QPA serves as the recognized 

amount. 

First, a plan or issuer must provide 

the QPA for each item or service 

involved. 

Second, a plan or issuer must provide 

a statement certifying that, based on the 

determination of the plan or issuer: (1) 

The QPA applies for purposes of the 

recognized amount (or, in the case of air 

ambulance services, for calculating the 

participant’s, beneficiary’s, or enrollee’s 

cost sharing), and (2) each QPA shared 

with the provider or facility was 

determined in compliance with the 

methodology outlined in these interim 

final rules. These interim final rules 

require a statement from the plan or 

issuer that the QPA applies for purposes 

of the recognized amount so that 

providers and facilities will understand 

that the plan or issuer has determined 

that neither an All-Payer Model 

Agreement nor a specified state law 

applies for purposes of calculating a 

participant’s, beneficiary’s, or enrollee’s 

cost-sharing liability, but rather that 

cost-sharing liability has been 

calculated using the QPA. With respect 

to air ambulance services, the statement 

will ensure providers of air ambulance 

services understand that the QPA, rather 

than the billed charge, applies for 


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63See section 9816(a)(2)(A) of the Code; section 

2799A–1(a)(2)(A) of the PHS Act. The DOL and 

OPM will rely on the existing agency processes to 

ensure compliance with the No Surprises Act, as 

discussed in this section of the preamble. 

64Section 2723(a)(2) and (b)(1)(A) of the PHS Act. 

See also 45 CFR 150.203. 

65See section 2723(b)(1)(B) of the PHS Act. 

66As noted previously, the Departments intend to 

implement the federal IDR process in future 

rulemaking. 

purposes of calculating the cost-sharing 

liability, because the plan or issuer has 

determined that the QPA is lower than 

the billed charge. The Departments 

expect that in most if not all cases 

where the QPA serves as the basis for 

determining the recognized amount, the 

federal IDR process will govern any 

dispute over payment instead of a 

specified state law or process. 

Therefore, this notice will also serve to 

direct providers or facilities to the 

federal IDR process if the parties cannot 

agree on an out-of-network rate. 

Third, a plan or issuer must provide 

a statement that if the provider or 

facility, as applicable, wishes to initiate 

a 30-day open negotiation period for 

purposes of determining the amount of 

total payment, the provider or facility 

may contact the appropriate person or 

office to initiate open negotiation, and 

that if the 30-day open negotiation 

period does not result in a 

determination, generally, the provider 

or facility may initiate the IDR process 

within 4 days after the end of the open 

negotiation period. The plan or issuer 

must also provide contact information, 

including a telephone number and 

email address, for the appropriate office 

or person to initiate open negotiations 

for purposes of determining an amount 

of payment (including cost sharing) for 

such item or service. 

In addition, upon request of the 

provider or facility, a plan or issuer 

must provide, in a timely manner, 

information about whether the QPA 

includes contracted rates that were not 

set on a fee-for-service basis for the 

specific items and services at issue and 

whether the QPA for those items and 

services was determined using 

underlying fee schedule rates or a 

derived amount. If a related service code 

was used to determine the QPA for a 

new service code, a plan or issuer must 

provide information to identify which 

related service code was used. 

Similarly, if an eligible database was 

used to determine the QPA, a plan or 

issuer must provide information to 

identify which database was used to 

determine the QPA. 

Finally, if applicable upon request, a 

plan or issuer must provide a statement 

that the plan’s or issuer’s contracted 

rates include risk-sharing, bonus, 

penalty, or other incentive-based or 

retrospective payments or payment 

adjustments for the items and services 

involved that were excluded for 

purposes of calculating the QPA. Having 

information about whether the median 

contracted rate excludes these types of 

payment adjustments will better inform 

the open negotiation and IDR process. 

The Departments seek comment on 

these disclosure requirements and on 

what additional information a plan or 

issuer should be required to share with 

a provider or facility about the QPA, 

either in all cases or upon request. The 

Departments also seek comment on 

whether a specific definition or 

standard is needed to ensure that 

information provided upon request is 

disclosed in a timely manner. 

f. Audits 

The No Surprises Act requires 

rulemaking to establish a process under 

which group health plans and health 

insurance issuers offering group or 

individual health insurance coverage 

are audited by the applicable Secretary 

or applicable state authority to ensure 

that such plans and coverage are in 

compliance with the requirement of 

applying a QPA and that the QPA 

applied satisfies the definition under 

the No Surprises Act with respect to the 

year involved.63

The enforcement responsibilities of 

HHS and the states with respect to 

oversight of health insurance issuer 

compliance with the federal insurance 

market reforms are set forth in the PHS 

Act. Pursuant to section 2723(a)(1) of 

the PHS Act, as amended by the No 

Surprises Act, states have primary 

enforcement authority over health 

insurance issuers regarding the 

provisions of Parts A and D of title 

XXVII of the PHS Act. Under this 

framework, HHS has enforcement 

authority over issuers in a state if the 

Secretary of HHS makes a determination 

that the state is failing to substantially 

enforce a provision (or provisions) of 

Part A or D of title XXVII of the PHS 

Act.64

DOL and the Treasury Department 

generally have primary enforcement 

authority over private sector 

employment-based group health plans. 

The IRS has jurisdiction over certain 

church plans. HHS also has primary 

enforcement authority over non-federal 

governmental plans, such as those 

sponsored by state and local 

government employers.65 OPM has 

jurisdiction over FEHB plans, which are 

federal governmental plans. 

The Departments will generally use 

existing processes to ensure compliance 

with Code, ERISA, and PHS Act 

requirements that apply to group health 

plans and health insurance issuers, 

including the provisions added by the 

No Surprises Act. HHS’s enforcement 

procedures related to the PHS Act 

federal insurance market reforms are set 

forth in section 2723 of the PHS Act and 

45 CFR 150.101 et seq., including bases 

for initiating investigations and 

performing market conduct 

examinations. Section 504 of ERISA 

provides DOL with authority to 

determine whether any person has 

violated or is about to violate any 

provision of ERISA or any regulation or 

order thereunder. The interim final 

rules include an audit provision 

establishing that HHS’s existing 

enforcement procedures will apply with 

respect to ensuring that a plan or 

coverage is in compliance with the 

requirement of determining and 

applying a QPA consistent with these 

interim final rules. HHS intends to 

amend its enforcement regulations 

through future notice and comment 

rulemaking to reflect the amendments 

made to the PHS Act by the No 

Surprises Act. OPM will audit FEHB 

plans to ensure that such plans are in 

compliance with the requirement of 

determining and applying a QPA. 

vii. Determination of Out-of-Network 

Rate in the Absence of a Specified State 

Law or an Applicable All-Payer Model 

Agreement 

In instances in which a specified state 

law or All-Payer Model Agreement does 

not apply for purposes of specifying the 

out-of-network rate, the out-of-network 

rate is determined either through 

agreement between the provider or 

facility and plan or issuer; or through an 

IDR process, if agreement cannot be 

reached and such process is initiated. If 

the parties agree to an amount of 

payment prior to the date on which a 

certified IDR entity makes a 

determination with respect to such 

items or services, that agreed upon 

amount is the out-of-network rate. 

Otherwise, the out-of-network rate is the 

amount of payment determined by the 

certified IDR entity for the items or 

services.66

3. Additional Plan and Issuer 

Requirements Regarding Making Initial 

Payments or Providing a Notice of 

Denial 

The No Surprises Act and these 

interim final rules establish several 

procedural requirements that apply to 

group health plans and health insurance 

issuers to ensure that billing disputes 


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36900 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

related to items and services subject to 

the balance billing protections in the No 

Surprises Act are resolved in a timely 

fashion. These include timeframes for: 

A plan or issuer to send a notice of 

denial of payment or make an initial 

payment; the length of any open 

negotiation period regarding payment; 

and initiating the IDR process following 

an open negotiation period. However, 

those three requirements do not apply 

under certain circumstances with regard 

to post-stabilization services or to outof-network non-emergency services 

(other than out-of-network air 

ambulance services) if the provider or 

facility provided notice to, and received 

consent from, the participant, 

beneficiary, or enrollee (or their 

authorized representative), as discussed 

later in this preamble. 

Therefore, it is critical that a group 

health plan or health insurance issuer 

have knowledge of any notice provided 

and consent given under these interim 

final rules for items and services that it 

covers, and that would otherwise be 

subject to the surprise billing provisions 

in the statute and these interim final 

rules. As discussed later in this 

preamble, the interim final rules issued 

by HHS in this rulemaking require 

providers and facilities to notify plans 

and issuers when the notice and consent 

criteria have been satisfied. Absent 

receiving this information, a plan or 

issuer must assume that the individual 

has not waived the protections provided 

in these interim final rules, and must 

therefore calculate cost sharing, apply 

cost sharing to deductibles and out-ofpocket limits, and make any payments 

to providers and facilities before an 

individual has satisfied the coverage 

deductible, accordingly. In instances 

where a plan or issuer does receive this 

information, it may rely on the 

provider’s or facility’s representation as 

being true and accurate, unless and 

until the plan or issuer knows or 

reasonably should know otherwise. 

Thus, if a provider or facility indicates 

to a plan or issuer that the notice and 

consent described in these interim final 

rules was properly and timely given and 

received, the plan or issuer may rely on 

that information and, for example, apply 

out-of-network cost sharing for the 

applicable items and services, unless 

and until the plan or issuer knows or 

reasonably should know that the notice 

and consent was not properly and 

timely given and received. In cases 

where a plan or issuer believes that 

notice was not properly and timely 

given and received, notwithstanding a 

provider’s or facility’s assertion to the 

contrary, the plan or issuer should 

apply the cost-sharing and other 

requirements set forth in these interim 

final rules and applicable state law by, 

among other actions, reprocessing any 

claims that were not processed 

consistently with those requirements. 

The plan or issuer may also submit a 

complaint against the provider or 

facility as set forth in these interim final 

rules at 45 CFR 149.450. 

Sections 9816(a)(1)(iv)(I) and 

9817(a)(3)(A) of the Code, sections 

716(a)(1)(iv)(I) and 717(a)(3)(A) of 

ERISA, sections 2799A–1(a)(1)(iv)(I) and 

2799A–2(a)(3)(A) of the PHS Act, and 

these interim final rules, require plans 

and issuers to send ‘‘an initial payment 

or notice of denial of payment’’ not later 

than 30 calendar days after a 

nonparticipating provider or facility 

submits a bill related to the items and 

services that fall within the scope of the 

new surprise billing protections for 

emergency services, non-emergency 

services performed by nonparticipating 

providers at participating facilities, and 

air ambulance services furnished by 

nonparticipating providers of air 

ambulance services. Given that plans 

and issuers cannot comply with this 

requirement unless the plan or issuer 

first determines that the billed items 

and services are covered under the plan 

or coverage, these interim final rules 

require that the plan or issuer make 

such determination not later than 30 

calendar days after a nonparticipating 

provider or facility submits a bill related 

to the items and services that fall within 

the scope of the new surprise billing 

protections for emergency services, nonemergency services performed by 

nonparticipating providers at 

participating facilities, and air 

ambulance services furnished by 

nonparticipating providers of air 

ambulance services. 

The Departments specify in these 

interim final rules that the 30-calendarday period generally begins on the date 

the plan or issuer receives the 

information necessary to decide a claim 

for payment for such services, 

commonly known as a ‘‘clean claim’’ 

under many existing state laws. To the 

extent feasible, the Departments 

encourage providers and facilities to 

include information about whether the 

surprise billing protections apply to an 

item or service on the claim form itself. 

With respect to non-emergency services, 

HHS requires, under 45 CFR 149.420(i), 

nonparticipating providers (or the 

participating facility on behalf of the 

nonparticipating provider) to timely 

notify the plan or issuer that the item or 

service was furnished during a visit at 

a participating health care facility. In 

addition, in all cases, under either 45 

CFR 149.410(e) or 45 CFR 149.420(i), 

providers and facilities must notify the 

plan or issuer as to whether the 

requirements for notice and consent 

have been met when transmitting the 

bill, either on the bill or in a separate 

document. The Departments seek 

comments with recommendations on 

how HIPAA standard transactions to 

submit claims could be modified to 

accommodate the submission of several 

types of information on the claim itself. 

Specifically, the Departments seek 

comment on how HIPAA standard 

transactions to submit claims could be 

modified to include whether the 

surprise billing protections apply to the 

items and services included on a claim, 

whether the item or service was 

furnished during a visit at a 

participating health care facility, and 

whether the requirements for notice and 

consent have been met. The 30- 

calendar-day initial payment period also 

does not prohibit payments outside of 

the 30-calendar-day timeframe for any 

future adjustments for errors in 

payment, such as in cases of duplicate 

bills where providers and plans or 

issuers reconcile overpayments. The 

Departments expect that plans and 

issuers will act reasonably and in good 

faith when requesting additional 

information, by providing specific detail 

to help ensure that the claimant, 

provider, or facility understands what is 

required to perfect the claim. The 

Departments may specify additional 

standards if the Departments become 

aware of instances of abuse and gaming 

where plans and issuers are unduly 

delaying making an initial payment or 

sending a notice of denial to providers 

on the basis that the provider has not 

submitted a clean claim. The 

Departments solicit comment on 

whether any additional standards are 

necessary to prevent abusive claims 

payment practices. Under these interim 

final rules, a notice of denial of payment 

means, with respect to an item or 

service for which benefits are subject to 

the surprise billing protections, a 

written notice from the plan or issuer to 

the provider or facility that payment for 

the item or service will not be made by 

the plan or coverage and which explains 

the reason for denial. A notice of denial 

of payment could be provided, for 

example, if the item or service is 

covered but is subject to a deductible 

greater than the recognized amount. 

In the Departments’ view, the statute’s 

reference to an ‘‘initial’’ payment does 

not refer to a first installment. Rather, 

this initial payment should be an 

amount that the plan or issuer 

reasonably intends to be payment in full 


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67See Benefit Claims Procedure Regulation FAQs, 

Q A–8, available at https://www.dol.gov/agencies/ 

ebsa/about-ebsa/our-activities/resource-center/faqs/ 

benefit-claims-procedure-regulation; see also Q C– 

12 (clarifying that failure to make payment in whole 

Continued 

based on the relevant facts and 

circumstances and as required under the 

terms of the plan or coverage, prior to 

the beginning of any open negotiations 

or initiation of the IDR process. In cases 

where the provider or facility is willing 

to accept the cost-sharing amount plus 

the initial payment (or the cost-sharing 

amount alone, in cases where a denial 

of payment is sent) as payment in full, 

this amount will be treated as the outof-network rate. If plans and issuers 

make initial payments that providers 

and facilities are willing to accept 

(when combined with the cost-sharing 

amount) as payment in full, the 

administrative costs of determining the 

out-of-network amount will be 

significantly reduced through the 

avoidance of an open negotiation period 

and IDR process. 

These interim final rules do not 

require plans and issuers, when making 

an initial payment to providers or 

facilities, to make any specific amount 

of minimum initial payment. However, 

several state balance billing laws set 

standards for minimum initial payment 

amounts. For example, in Washington 

State, issuers are required to pay an outof-network provider or facility a 

commercially reasonable amount, 

reduced by the applicable cost-sharing 

amount, within 30 calendar days of 

receipt of a claim to which the state’s 

balance billing protections apply. 

Requiring a minimum initial payment 

amount may help reduce the number of 

cases that go to arbitration in some 

states, and could help to reduce the 

number of cases that go to the federal 

IDR process established under the No 

Surprises Act. 

The Departments seek comment on 

whether to set a minimum payment rate 

or methodology for a minimum initial 

payment in future rulemaking, and if so, 

what that rate or methodology should 

be. For example, a minimum payment 

rate could be a specific percentage of the 

Medicare rate, a specific percentage of 

the plan or issuer’s QPA for the item or 

service, an amount calculated in the 

same way the plan or issuer typically 

calculates payment for the specific item 

or service to nonparticipating providers 

or facilities, an amount representing the 

highest amount that would result from 

applying two or more of these or other 

methodologies, or any other method. To 

the extent comments suggest that a 

percentage of a rate calculated or 

determined in a specific way would be 

appropriate, the Departments seek 

comment regarding an appropriate 

specific percentage. The Departments 

also seek comment on whether a 

minimum payment rate should be 

defined as a commercially reasonable 

rate based on payments for the same or 

similar services in a similar area, 

without requiring any specific 

methodology. In addition, the 

Departments seek comment regarding 

the impact of these provisions on 

underserved and rural communities, 

and other communities facing a shortage 

of providers. 

The Departments are aware that the 

timeframes for deciding post-service 

claims under the claims and appeals 

rules issued under section 2719 of the 

PHS Act and the timeframes for sending 

an initial payment or notice of denial of 

payment under these final rules may not 

always align. The Departments seek to 

minimize confusion about which types 

of disputes should be resolved through 

a plan or issuer’s internal claims and 

appeals process instead of the IDR 

process established by the No Surprises 

Act. 

The ERISA claims procedure 

regulation requires group health plans 

to notify a claimant of a benefit 

determination for post-service claims 

not later than 30 days after receipt of the 

claim. A plan can generally extend this 

period once for up to 15 days for matters 

beyond the control of the plan, 

including if the claimant fails to provide 

information necessary to decide the 

claim. In such cases, the plan may 

notify the claimant they provided 

insufficient information within 30 days, 

and the plan must give the claimant at 

least 45 days to provide additional 

information. After the information is 

provided, the plan has 15 days to make 

a determination. Claims that result in an 

adverse benefit determination (ABD) 

may be appealed within 180 days 

following receipt of the notice of the 

ABD. The requirements of the ERISA 

claims procedure regulation are 

incorporated by reference in the internal 

claims and appeals and external review 

requirements added by the Affordable 

Care Act to section 2719 of the PHS Act 

and, therefore, subject to limited 

exceptions, apply to all nongrandfathered group health plans and 

health insurance issuers offering nongrandfathered coverage in the group and 

individual markets. 

If an initial claim submitted is a clean 

claim, the timeframes for making the 

relevant determinations would generally 

be aligned under these interim final 

rules and the ERISA claims procedure 

regulation. However, if a claim is 

submitted without sufficient 

information to make a benefit 

determination, under the ERISA claims 

procedure regulation, the plan would 

only have 15 days to make a 

determination once the claim is 

resubmitted with the additional 

information. Yet, under the No 

Surprises Act and these interim final 

rules, the plan would have up to 30 

calendar days to send a notice of denial 

of payment or an initial payment to the 

out-of-network provider from the time 

the claim is resubmitted with additional 

information. Consistent with the 

requirement that plans and issuers 

provide an initial payment or notice of 

denial of payment within 30 calendar 

days of a provider or facility submitting 

a clean claim, the Departments clarify 

that while the ERISA claims procedure 

regulation would require plans to make 

a benefit determination within 15 days 

of a claim being resubmitted with 

additional information, plans and 

issuers have 30 calendar days (which is 

an additional 15 days) to make an initial 

payment to an nonparticipating 

provider or facility, or send a separate 

notice of denial of payment. 

The Departments note that there is 

also a significant distinction between an 

ABD, which may be disputed through a 

plan’s or issuer’s claims and appeals 

process, and a denial of payment or an 

initial payment that is less than the 

billed amount under these interim final 

rules, which may be disputed through 

the open negotiation process or through 

the IDR process. In general, when 

adjudication of a claim results in a 

participant, beneficiary, or enrollee 

being personally liable for payment to a 

provider or facility, this determination 

may be an ABD that can be disputed 

through a plan’s or issuer’s claims and 

appeals process. Conversely, when: (1) 

The adjudication of a claim results in a 

decision that does not affect the amount 

the participant, beneficiary, or enrollee 

owes; (2) the dispute only involves 

payment amounts due from the plan to 

the provider; and (3) the provider has no 

recourse against the participant, 

beneficiary, or enrollee, the decision is 

not an ABD and the payment dispute 

may be resolved through the open 

negotiation or the IDR process. This 

clarification is consistent with previous 

guidance included in FAQs related to 

the ERISA claims procedure regulation, 

which have explained that with respect 

to in-network benefits, the regulation 

does not apply to requests by health 

care providers for payments due to the 

provider, rather than due to the 

claimant, where the provider has no 

recourse against the claimant for 

amounts, in whole or in part, not paid 

by the plan.67 The Departments 


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36902 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

or in part due to the imposition of cost-sharing 

requirements is an ABD). 

acknowledge that there may be 

instances where a participant, 

beneficiary, or enrollee appeals an ABD 

(such as, a determination of cost-sharing 

amounts) through the claims and 

appeals process concurrently with a 

provider’s challenge to a payment 

amount through the IDR process. 

4. Surprise Billing Complaints 

Regarding Group Health Plans and 

Health Insurance Issuers 

Section 9816(a)(2)(B)(iv) of the Code, 

section 716(a)(2)(B)(iv) of ERISA, and 

section 2799A–1(a)(2)(B)(iv) of the PHS 

Act direct the Departments to establish 

a process to receive complaints 

regarding violations of the application 

of QPA requirements by group health 

plans and health insurance issuers 

offering group or individual health 

coverage. The Departments are of the 

view that, in order to effectively enforce 

the No Surprises Act balance billing 

protections, the complaints process 

should extend to all of the consumer 

protection and balance billing 

requirements as described in these 

interim final rules that apply to group 

health plans and health insurance 

issuers offering group or individual 

health coverage. As such, these interim 

final rules establish a process by which 

the Departments will receive complaints 

regarding violations by plans and 

issuers of the requirements under 

sections 9816 and 9817 of the Code, 

sections 716 and 717 of ERISA, and 

sections 2799A–1 and 2799A–2 of the 

PHS Act. The Departments seek 

comment on whether the complaints 

process should be restricted to the QPA 

or extended as described in these 

interim final rules. 

The No Surprises Act also adds 

section 2799B–4(b)(3) of the PHS Act, 

which directs HHS to establish a 

process to receive consumer complaints 

regarding violations by health care 

providers, facilities, and providers of air 

ambulance services regarding balance 

billing requirements under sections 

2799B–1, 2799B–2, 2799B–3, and 

2799B–5 of the PHS Act and to respond 

to such complaints within 60 days. As 

such, HHS is issuing HHS-only interim 

final rules to establish a process by 

which HHS will receive complaints 

regarding violations of these 

requirements by health care providers, 

facilities, and providers of air 

ambulance services. 

For purposes of the complaint 

processes for plans and issuers, 

providers, facilities, and providers of air 

ambulance services, these interim final 

rules define a complaint as a written or 

oral communication that indicates there 

has been a potential violation by a plan 

or issuer of sections 9816 or 9817 of the 

Code, sections 716 or 717 of ERISA, or 

sections 2799A–1, 2799A–2 of the PHS 

Act, or a potential violation by a 

provider, facility, or provider of air 

ambulance services of sections 2799B– 

1, 2799B–2, 2799B–3 and 2799B–5 of 

the PHS Act, whether or not a violation 

actually occurred. A complainant means 

any individual, or their authorized 

representative, who files a complaint as 

defined in these interim final rules. 

The Departments seek to minimize 

the burden of filing a complaint and 

seek to require only the information 

necessary to process the complaint and 

conduct an investigation if deemed 

necessary. Therefore, these interim final 

rules specify that the Departments will 

consider a complaint to be filed on the 

date on which the Departments receive 

an oral or written statement with 

information about the complaint 

sufficient to identify the parties 

involved (including the plan sponsor, if 

the complaint involves a group health 

plan), and the action or inaction that is 

the subject of the complaint. The 

information may also include the timing 

of the alleged violation, and the state 

where the alleged violation occurred. 

The Departments seek comment on the 

information needed to file a complaint, 

and the definitions in this section. 

The Departments have considered 

whether a complaint should be filed 

within a defined amount of time of the 

alleged violation. The Departments 

understand that timely action is 

necessary to investigate and adjudicate 

billing matters and therefore considered 

whether complainants should be 

required to file a complaint regarding an 

alleged violation of the requirements in 

these interim final rules by a plan, 

issuer, health care provider or provider 

of air ambulance services within 90 or 

180 calendar days after learning of the 

alleged violation. Without a time 

requirement for filing a complaint, the 

Departments may be restricted in 

directing the complainant to other state 

or federal resolution processes with 

timing requirements such as the internal 

and external claims review process as 

described in section 2719 of the PHS 

Act, or an appropriate IDR process as 

defined 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. However, the Departments 

are of the view that every complaint 

should be processed and investigated as 

appropriate to ensure that any necessary 

enforcement action can be taken. 

Therefore, these interim final rules do 

not include a time period upon which 

a complaint must be filed. The 

Departments seek comment on whether 

a complainant should be required to file 

a complaint within a given time period 

and if so within what time period a 

complaint should be filed for the 

purpose of this section. 

Section 2799B–4 of the PHS Act 

directs HHS to respond to complaints 

regarding violations of balance billing 

protections by health care providers, 

facilities, and providers of air 

ambulance services within 60 days of 

receipt. The Departments are of the view 

that the timing for responding to 

complaints regarding plans and issuers 

should be the same as that for providers 

to ensure timely resolution. Therefore, 

upon receiving the information 

necessary to file a complaint regarding 

a plan or issuer, the Departments will 

respond to complainants under section 

9816(a)(2)(B)(iv) of the Code, section 

716(a)(2)(B)(iv) of ERISA, and section 

2799A–1(a)(2)(B)(iv) of the PHS Act no 

later than 60 business days after the 

complaint is received. Similarly, HHS 

will respond to a processed complaint 

regarding a health care provider, 

facility, or provider of air ambulance 

services under section 2799B–4 of the 

PHS Act no later than 60 business days 

after the complaint is received. 

The response will be by oral or 

written means, and will acknowledge 

receipt of the complaint, notify the 

complainant of their rights and 

obligations under the complaints 

process, and describe the next steps of 

the complaint resolution process. The 

Departments may also request any 

additional information needed to 

process the complaint. The requested 

information may include an explanation 

of benefits, processed claims, 

information about the health care 

provider, facility, or air ambulance 

service involved; information about the 

plan or issuer covering the individual; 

information to support a determination 

regarding whether the service was an 

emergency service or non-emergency 

service; the summary plan description, 

policy, certificate, contract of insurance, 

membership booklet, outline of coverage 

or other evidence of coverage the plan 

or issuer provides to their participant, 

beneficiary, or enrollee; documents 

regarding asserted facts in the complaint 

that are in the possession of or 

otherwise attainable by the 

complainant; or any other information 

the Departments may need to make a 

determination of facts for an 

investigation. 

HHS may also request additional 

information to process a complaint 

under section 2799B–4 of the PHS Act 


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68 80 FR 72191 (November 18, 2015). 

69Section 2719A(e) of the PHS Act states, ‘‘The 

provisions of this section shall not apply with 

respect to a group health plan, health insurance 

issuers, or group or individual health insurance 

coverage with respect to plan years beginning on or 

on January 1, 2022.’’ The Departments interpret 

subsection (e) to sunset section 2719A for plan 

years beginning on or after January 1, 2022. 

70Section 2719A was added to the PHS Act by 

the Affordable Care Act. Section 1251 of the 

Affordable Care Act provides that certain 

requirements, including those in section 2719A of 

the PHS Act, do not apply to grandfathered health 

plans. The No Surprises Act does not include a 

comparable exception for grandfathered health 

plans. Furthermore, section 103(d)(2) of the No 

Surprises Act amends section 1251(a) of the 

Affordable Care Act to clarify that the new and 

recodified patient protections provisions, including 

those related choice of choice of health care 

professional, apply to grandfathered health plans. 

regarding a health care provider, 

facility, or provider of air ambulance 

services. This information may include, 

but is not limited to, the bills or network 

status of a health care provider, health 

care facility, or provider of air 

ambulance services; information 

regarding the health care plan or health 

insurance coverage of a participant, 

beneficiary or enrollee; information to 

support a determination regarding 

whether the service was an emergency 

service or non-emergency service; 

documents that support the asserted 

facts in the complaint in the possession 

of, or otherwise attainable by the 

complainant; or any other information 

HHS needs to make a determination of 

facts for an investigation. The 

Departments seek comment on 

additional information that may be 

required to process a complaint. 

The response may be provided 

directly upon receipt of the complaint, 

or it may be provided afterwards, 

though no later than 60 business days 

after the complaint is received. The next 

steps of the complaint resolution 

process may include referring the 

complainant to another appropriate 

state or federal resolution process, 

referring a complainant to the state or 

federal regulatory authority with 

enforcement jurisdiction, or initiating 

an investigation for enforcement action. 

The Departments will make reasonable 

efforts consistent with agency practices 

to notify the complainant of the 

outcome of such investigations or 

enforcement actions, including an 

explanation of the findings, resolution, 

or any corrective action taken. The 

Departments will also make reasonable 

efforts to notify the complainant if the 

complaint is transferred to another state 

or Federal regulatory authority. The 

Departments seek comment on whether 

a complainant should receive the 

notification of the outcome of the 

complaint within a given time period 

and if so within what time period a 

complainant should receive the notice 

for the purpose of this section. 

The Departments intend to provide 

the public with a seamless experience 

for filing complaints by creating one 

system to intake all complaints on 

behalf of all complainants under section 

9816(a)(2)(B)(iv) of the Code, section 

716(a)(2)(B)(iv) of ERISA, and sections 

2799A–1(a)(2)(B)(iv) and 2799B–4 of the 

PHS Act. The Departments understand 

that a complainant may not know which 

Department has enforcement 

jurisdiction; therefore, the Departments 

intend to provide one system that will 

direct complaints to the appropriate 

Department for processing, 

investigation, and enforcement action as 

necessary. The Departments will release 

guidance on where the public can file 

complaints and welcome comments on 

the operations, protections, user 

experience, or other facets of this 

complaint system. The Departments also 

seek comment on ways to ensure 

consumers are aware and know how to 

use this system. 

The Departments seek to uphold 

Executive Order 13985 and all civil 

rights protections regarding nondiscrimination and accessibility, as 

noted in prior sections. The 

Departments will make all reasonable 

efforts to implement a robust complaint 

process, including but not limited to, 

acknowledgement of receipt of a 

complaint, explanations of rights and 

information requested, explanations of 

findings, and referrals to other 

authorities. The Departments will 

ensure that the complaints process is 

accessible to all individuals, that 

communication and language needs are 

met, and that all individuals are able to 

understand the options available to 

them and information required of them. 

The Departments seek comment from 

individuals in underserved and rural 

communities, minority communities, 

and persons otherwise adversely 

affected by persistent poverty or 

inequality on specific barriers to the 

complaint process and solutions to 

address these barriers and ensure 

equitable access to all aspects of the 

complaint processes. 

C. Choice of Health Care Professionals 

In the Patient Protections Final Rule, 

the Departments finalized regulations 

addressing the provisions in section 

2719A of the PHS Act, regarding patient 

protections related to choice of health 

care professional and emergency 

services.68 As explained earlier, the No 

Surprises Act amended section 2719A 

of the PHS Act to sunset when the new 

emergency services protections under 

the No Surprises Act take effect. The 

provisions of section 2719A of the PHS 

Act will no longer apply with respect to 

plan years beginning on or after January 

1, 2022.69 The No Surprises Act recodified the patient protections related 

to choice of health care professional in 

newly added section 9822 of the Code, 

section 722 of ERISA, and section 

2799A–7 of the PHS Act. 

To reflect these statutory 

amendments, these interim final rules 

add a sunset clause to the current 

patient protection provisions codified in 

the Patient Protections Final Rule, and 

re-codify the provisions related to 

choice of health care professional 

without substantive change at 26 CFR 

54.9822–1T, 29 CFR 2590.722, and 45 

CFR 149.310. These interim final rules 

make minor technical edits to the 

original provisions for clarity. 

The Departments note that, although 

the substantive requirements of these 

regulations have not changed, the No 

Surprises Act extends the applicability 

of the patient protections for choice of 

health care professionals to 

grandfathered health plans. The patient 

protections under section 2719A of the 

PHS Act apply to only nongrandfathered group health plans and 

health insurance issuers offering nongrandfathered group or individual 

health insurance coverage. In contrast, 

the patient protections under the No 

Surprises Act apply generally to all 

group health plans and group and 

individual health insurance coverage, 

including grandfathered health plans.70

Therefore, the requirements regarding 

patient protections for choice of health 

care professional under these interim 

final rules will newly apply to 

grandfathered health plans for plan 

years beginning on or after January 1, 

2022. Until the requirements under 

section 9822 of the Code, section 722 of 

ERISA, and section 2799A–7 of the PHS 

Act and these interim final rules become 

applicable, non-grandfathered group 

health plans and health insurance 

issuers offering non-grandfathered 

group or individual health insurance 

coverage must continue to comply with 

the applicable requirements under 

section 2719A of the PHS Act and its 

implementing regulations. 

D. Applicability 

These interim final rules generally 

apply to group health plans and health 

insurance issuers offering group or 

individual health insurance coverage 

with respect to plan years (in the 


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36904 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

71CMS Insurance Standards Bulletin Series— 

INFORMATION—Extension of Limited NonEnforcement Policy through 2022 (January 19, 

2021), available at https://www.cms.gov/files/ 

document/extension-limited-non-enforcementpolicy-through-calendar-year-2022.pdf. 

72Section 9831 of the Code, section 9832 of 

ERISA, and section 2722 of the PHS Act. 

73 75 FR 34537, 34540 (June 17, 2010). 

individual market, policy years) 

beginning on or after January 1, 2022. 

The term ‘‘group health plan’’ includes 

both insured and self-insured group 

health plans. Group health plans 

include private employment-based 

group health plans subject to ERISA, 

non-federal governmental plans (such as 

plans sponsored by states and local 

governments) subject to the PHS Act, 

and church plans subject to the Code. 

Individual health insurance coverage 

includes coverage offered in the 

individual market, through or outside of 

an Exchange, and includes student 

health insurance coverage as defined at 

45 CFR 147.145. In addition, as 

discussed further in section V of the 

preamble, under the OPM interim final 

rules, FEHB carriers must comply with 

the Departments’ interim final rules, 

subject to OPM regulation and contract 

provisions. 

The No Surprises Act amended 

section 1251(a) of the Affordable Care 

Act to specify that sections 2799A–1, 

2799A–2, and 2799A–7 of the PHS Act 

apply to grandfathered health plans for 

plan years beginning on or after January 

1, 2022. Therefore, these interim final 

rules apply to grandfathered health 

plans (as defined in 26 CFR 54.9815– 

1251, 29 CFR 2590.715–1251, and 45 

CFR 147.140). In addition, these interim 

final rules apply to certain nongrandfathered health insurance coverage 

in the individual and small group 

markets with respect to which CMS has 

announced it will not take enforcement 

action with respect to certain specified 

market requirements even though the 

coverage is out of compliance with 

those requirements (sometimes referred 

to as grandmothered or transitional 

plans).71

These interim final rules do not apply 

to health reimbursement arrangements, 

or other account-based plans, as 

described in 26 CFR 54.9815– 

2711(d)(6)(i), 29 CFR 2590.715– 

2711(d)(6)(i), and 45 CFR 

147.126(d)(6)(i), that make 

reimbursements subject to a maximum 

fixed dollar amount for a period, as the 

benefit design of such plans makes 

concepts related to surprise billing and 

choice of health care professionals 

inapplicable. 

By statute, certain plans and coverage 

are not subject to these interim final 

rules. This includes a plan or coverage 

consisting solely of excepted benefits,72

as well as short-term, limited-duration 

insurance. Excepted benefits are 

described in section 9832 of the Code, 

section 733 ERISA, and section 2791 of 

the PHS Act. Under section 2791(b)(5) 

of the PHS Act, short-term, limitedduration insurance is excluded from the 

definition of individual health 

insurance coverage and is, therefore, 

exempt from these interim final rules 

and the statutory provisions the 

regulations implement. Short-term, 

limited-duration insurance is defined in 

regulations at 26 CFR 54.9801–2, 29 

CFR 2590.701–2, and 45 CFR 144.103. 

These interim final rules do not apply 

to retiree-only plans. ERISA section 

732(a) generally provides that part 7 of 

ERISA—and section 9831(a) of the Code 

generally provides that chapter 100 of 

the Code—does not apply to plans with 

less than two participants who are 

current employees (including retireeonly plans, which cover less than two 

participants who are current 

employees). Title XXVII of the PHS Act, 

as amended by the Affordable Care Act, 

no longer contains a parallel provision 

at section 2721(a) of the PHS Act. 

However, as explained in prior 

rulemaking, HHS will not enforce the 

requirements of title XXVII of the PHS 

Act with respect to non-federal 

governmental retiree-only plans and 

encourages states to adopt a similar 

approach with respect to health 

insurance coverage of retiree-only 

plans.73 HHS intends to continue to 

follow this same approach, including 

with respect to the new market reforms 

established in the No Surprises Act. 

These interim final rules are generally 

applicable to traditional indemnity 

plans, meaning plans that do not have 

networks of providers or facilities. 

However, the Departments recognize 

that indemnity plans may have unique 

benefit designs that cause certain 

provisions of these interim final rules 

not to be relevant. For example, the 

requirements regarding balance billing 

for non-emergency services provided by 

nonparticipating providers at certain 

participating facilities would never be 

triggered if a plan does not have a 

network of participating facilities. On 

the other hand, such requirements could 

be triggered by plans that have 

participating facilities but do not have 

participating providers, either for 

certain provider types or at all. In 

addition, requirements that are 

unrelated to whether a plan or coverage 

has a network of participating providers 

or facilities, such as the requirement 

that emergency services be covered 

without the need for any prior 

authorization determination, even if the 

services are provided on an out-ofnetwork basis, are applicable to 

traditional indemnity plans. 

The Departments seek comment as to 

whether there are any other plans with 

unique benefit designs that should be 

exempt from all or some of these interim 

final rules. 

IV. Overview of Interim Final Rules— 

Department of Health and Human 

Services 

A. Preventing Surprise Medical Bills 

1. In General 

In addition to the new provisions 

applicable to group health plans and 

health insurance issuers, discussed in 

section III of this preamble, the No 

Surprises Act adds a new Part E of title 

XXVII of the PHS Act establishing 

requirements applicable to health care 

providers, facilities, and providers of air 

ambulance services. Specifically, the No 

Surprises Act adds new sections 2799B– 

1, 2799B–2, 2799B–3, and 2799B–5 of 

the PHS Act, which protect participants, 

beneficiaries, and enrollees in group 

health plans and group and individual 

health insurance coverage from balance 

bills by prohibiting nonparticipating 

providers, facilities, and providers of air 

ambulance services from billing or 

holding liable individuals for an amount 

that exceeds in-network cost sharing 

determined in accordance with the 

balance billing provisions in 

circumstances where the balance billing 

provisions apply. This includes: (1) 

When emergency services are provided 

by a nonparticipating provider or 

nonparticipating emergency facility; (2) 

when non-emergency services are 

provided by a nonparticipating provider 

at a participating health care facility; 

and (3) when air ambulance services are 

furnished by a nonparticipating 

provider of air ambulance services. 

Under 5 U.S.C. 8902(p), as added by 

the No Surprises Act, sections 2799B–1, 

2799B–2, 2799B–3, and 2799B–5 of the 

PHS Act apply to a health care provider, 

a facility, and a provider of air 

ambulance services with respect to a 

covered individual in a health benefits 

plan offered by a FEHB carrier in the 

same manner as they apply with respect 

to a participant, beneficiary, or enrollee 

in a group health plan or group or 

individual health insurance coverage 

offered by a health insurance issuer. 

These interim final rules apply to a 

health care provider, a facility, and a 

provider of air ambulance services in 


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74For purposes of these interim final rules, 

references to participants, beneficiaries, and 

enrollees should be construed to include covered 

individuals in a FEHB plan. 

75HHS is aware that some providers and facilities 

charge fees for cancelled appointments. HHS is of 

the view that an individual cannot provide consent 

freely if a provider or facility will require the 

individual to pay a fee if the appointment is 

cancelled because the individual refuses or revokes 

consent. 

this same manner.74 The applicability of 

these interim final rules with respect to 

FEHB carriers is discussed in more 

detail in section V of this preamble. 

With respect to post-stabilization 

services provided by nonparticipating 

emergency facilities or nonparticipating 

providers, and non-emergency services 

furnished by nonparticipating providers 

at participating health care facilities 

(including off-site nonparticipating 

providers who furnish items or services 

that an individual receives as part of a 

visit to such health care facility), the 

prohibitions on balance billing do not 

apply if certain notice is provided to the 

participant, beneficiary, or enrollee, and 

the individual acknowledges receipt of 

the information in the notice and 

consents to waive the balance billing 

protections with respect to the 

nonparticipating emergency facility or 

nonparticipating providers to which the 

notice and consent apply. Under the No 

Surprises Act and these interim final 

rules, with respect to certain types of 

non-emergency services furnished by 

nonparticipating providers in a 

participating health care facility, the 

notice and consent provisions do not 

apply, meaning the prohibitions on 

balance billing apply without exception. 

Given that the statute and these 

interim final rules authorize HHS to 

impose civil money penalties on 

facilities and providers that violate 

these requirements, nonparticipating 

providers should take steps necessary to 

ensure compliance by, among other 

actions, determining whether a given 

item or service is being furnished under 

circumstances that would trigger the 

surprise billing protections. For 

example, nonparticipating providers 

furnishing non-emergency services at a 

facility must determine whether the 

facility is a participating health care 

facility to determine whether balance 

billing protections apply. Relatedly, 

nonparticipating providers and 

nonparticipating emergency facilities 

will need to timely communicate with 

plans and issuers regarding when the 

limitations on cost sharing in these 

interim final rules do not apply because 

the notice and consent criteria 

(described more fully elsewhere in this 

preamble) have been satisfied. These 

HHS interim final rules address the 

steps providers and facilities must take 

to ensure the balance billing and costsharing protections are applied 

appropriately and consistently with the 

statute. 

HHS also recognizes that compliance 

with these requirements may require 

nonparticipating providers and 

nonparticipating emergency facilities to 

refrain from billing an individual 

directly, even in cases that are not 

subject to these requirements. For 

example, the protections applicable to 

non-emergency services provided by a 

nonparticipating provider in a 

participating health care facility apply 

only with respect to services for which 

benefits are provided or covered by the 

plan or coverage. A nonparticipating 

provider may not have the information 

necessary to determine whether the 

services are a covered benefit under the 

plan or coverage. As a result, the 

nonparticipating provider may need to 

bill the plan or issuer directly for the 

services in order to determine whether 

the protections apply. Otherwise, the 

provider risks violating the statute and 

these interim final rules by billing 

individuals. HHS understands that 

nonparticipating providers and facilities 

frequently bill individuals directly for 

out-of-network services, leaving the 

individual to submit the bill to the plan 

or coverage. HHS seeks comment on the 

impact this change will have on 

nonparticipating providers and 

facilities, and on plans and issuers 

receiving bills from nonparticipating 

providers and facilities. 

In instances where a provider or 

facility does balance bill a participant, 

beneficiary, or enrollee for services in 

violation of the statute and these interim 

final rules, the Secretary of HHS (the 

Secretary) may impose civil money 

penalties in states where HHS is directly 

enforcing the balance billing provisions 

with respect to health care providers, 

facilities, and providers of air 

ambulance services. However, the 

statute provides that the Secretary shall 

waive the penalties with respect to a 

health care provider, facility, or 

provider of air ambulance services who 

does not knowingly violate, and should 

not have reasonably known it violated, 

the provisions, with respect to a 

participant, beneficiary, or enrollee, if 

such provider or facility, within 30 days 

of the violation, withdraws the bill that 

was in violation of such provision and 

reimburses the health plan or 

individual, as applicable, in an amount 

equal to the difference between the 

amount billed and the amount allowed 

to be billed under the provision, plus 

interest, at an interest rate determined 

by the Secretary. HHS intends to 

address enforcement of the 

requirements of the No Surprises Act 

applicable to health care providers, 

facilities, and providers of air 

ambulance services in future 

rulemaking. 

2. Notice and Consent Exception to 

Prohibition on Balance Billing 

Under the No Surprises Act and these 

interim final rules, the protections that 

limit cost sharing and prohibit balance 

billing do not apply to certain nonemergency services or to certain poststabilization services provided in the 

context of emergency care, if the 

nonparticipating provider or 

nonparticipating emergency facility 

furnishing those items or services 

provides the participant, beneficiary, or 

enrollee, with notice, the individual 

acknowledges receipt of the information 

in the notice, and the individual 

consents to waive the balance billing 

protections with respect to the 

nonparticipating emergency facility or 

nonparticipating providers named in the 

notice. 

Non-emergency services furnished by 

a nonparticipating provider at a 

participating health care facility are 

exempt from cost sharing protections 

and balance billing protections when 

the notice and consent requirements are 

met. In contrast, the notice and consent 

exception does not apply to emergency 

services, other than post-stabilization 

services, under certain circumstances, 

or air ambulance services. A 

nonparticipating provider or 

nonparticipating emergency facility may 

obtain notice and consent from the 

individual in order to balance bill for 

post-stabilization services only in the 

case where a participant, beneficiary, or 

enrollee has received emergency 

services and that individual’s condition 

has stabilized, and then only if certain 

additional conditions are met. Such 

conditions are described later in this 

preamble and codified at 45 CFR 

149.410(b). 

If an individual receives a notice, but 

does not provide (or revokes) consent to 

waive their balance billing protections, 

those protections remain in place. A 

provider or facility may, subject to other 

state or federal laws, refuse to treat the 

individual if the individual does not 

consent.75 However, the cost-sharing 

and balance billing protections 

applicable to plans, issuers, providers 

and facilities would apply with respect 

to any items or services furnished by the 

provider or facility subsequent to the 


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76However, if a facility that has agreed to provide 

the notice on behalf of the nonparticipating 

provider fails to provide the notice and obtain 

consent, or provides notice and obtains consent in 

a manner that does not satisfy the regulatory 

requirements in these interim final rules, the notice 

and consent criteria would not be considered to be 

met. Therefore, the cost-sharing and balance billing 

protections would continue to apply to the items 

and services furnished by the nonparticipating 

provider. 

provision of the notice, and absent 

consent. 

The requirements related to the notice 

and consent exception are set forth in 

section 2799B–2 of the PHS Act, as 

added by the No Surprises Act, and 

implemented at 45 CFR 149.410 and 45 

CFR 149.420 of the HHS interim final 

rules, describing the requirements for 

post-stabilization services and nonemergency services, respectively. These 

interim final rules outline the 

requirements related to the content, 

method, and timing of the notice and 

consent communications; requirements 

related to language access; exceptions to 

the applicability of the notice and 

consent process; requirements for the 

retention of notice and consent 

documents; and requirements to notify 

the plan or issuer regarding consent 

provided by the participant, beneficiary, 

or enrollee. 

i. Standards for Notice 

The No Surprises Act and these 

interim final rules allow an individual 

to waive balance billing protections 

only after receiving a written notice that 

includes detailed information designed 

to ensure that individuals knowingly 

accept out-of-pocket charges (including 

charges associated with balance bills) 

for care received from a 

nonparticipating provider or 

nonparticipating emergency facility. In 

HHS’s view, the option to consent to 

waive balance billing protections may 

be valuable to individuals in certain 

instances where they knowingly and 

purposefully seek care from a 

nonparticipating provider. For example, 

an individual with a complex health 

condition may want to be treated by a 

specialist who is not in their plan’s 

network. If that specialist will not treat 

the individual unless the specialist can 

bill the individual directly for the care 

(and balance bill the individual), that 

individual may want to waive the 

balance billing protections. HHS seeks 

comment on striking the appropriate 

balance between allowing a specialist to 

refuse to treat an individual unless the 

specialist can balance bill the 

individual, while ensuring that the 

individual is not being pressured into 

waiving the balance billing protections. 

In HHS’s view, it is important that these 

consumer protections do not present a 

barrier to obtaining out-of-network care, 

when an individual knowingly seeks 

out such care. However, it is equally 

important that individuals are not 

unknowingly subject to balance billing. 

Therefore, the No Surprises Act and 

these interim final rules allow an 

individual to waive balance billing 

protections in limited circumstances 

only, and only if the nonparticipating 

providers or nonparticipating 

emergency facility have provided the 

participant, beneficiary, or enrollee with 

appropriate notice explaining the 

applicable consumer protections and 

the implications of providing consent. 

Section 2799B–2(d)(1)(A) of the PHS 

Act requires providers and facilities to 

use a written notice specified by HHS in 

guidance. Therefore, these interim final 

rules require providers and facilities to 

provide the notice using the standard 

notice document provided by HHS in 

guidance. The standard notice 

document will contain the elements 

required by the statute in a manner that 

is intended to be easy to read and 

comprehend. The notice must be 

provided in accordance with guidance 

issued by HHS. HHS is of the view that 

requiring use of the standard notice will 

help to ensure that the notice includes 

the content that is required to be 

included in the notice under the No 

Surprises Act and these interim final 

rules. Providers and facilities will need 

to tailor the document in each case to 

include information specific to the 

individual (for example, by identifying 

the provider or facility, as applicable, 

and adding the good faith estimated 

amount). 

HHS is concerned that individuals 

may be less likely to review the notice 

carefully if it is embedded within other 

information or provided with additional 

consent forms. Therefore, these interim 

final rules require that the notice be 

provided with the consent document, 

and together these documents be given 

physically separate from, and not 

attached to or incorporated into any 

other documents. Providers and 

facilities must provide the notice within 

the required timeframe. The notice must 

be written and provided on paper, or, as 

practicable, electronically, as selected 

by the individual. The notice must meet 

applicable language access 

requirements, as described in this HHS 

interim final rule. A participating health 

care facility may provide the notice on 

behalf of the nonparticipating 

provider.76

Authorized Representatives 

The notice may be provided to the 

individual’s authorized representative 

instead of the individual, and consent 

may be provided by the authorized 

representative on behalf of the 

individual. These interim final rules 

specify that for purposes of 45 CFR 

149.410 and 149.420, an authorized 

representative is an individual 

authorized under state law to provide 

consent on behalf of the participant, 

beneficiary, or enrollee, provided that 

the individual is not a provider 

affiliated with the facility or an 

employee of the facility, unless such 

provider or employee is a family 

member of the participant, beneficiary, 

or enrollee. Although treating providers 

may be authorized under state law to 

provide consent to treatment, HHS is of 

the view that providers should generally 

not be permitted to receive notice or 

provide consent regarding treatment by 

a nonparticipating provider or facility 

because of the strong likelihood of an 

inherent financial or professional 

conflict of interest. These same concerns 

extend to employees of the facility at 

which the items or services are 

furnished. HHS is also of the view that 

these concerns are not warranted for 

providers or facility employees that are 

family members of the individual, 

because of their presumed interest in 

the well-being of the individual, or 

providers that are unaffiliated with the 

provider or facility furnishing the care. 

HHS is of the view that these limitations 

provide important consumer protections 

to ensure that an individual’s 

authorized representative is acting in 

the individual’s best interest rather than 

the interests of the provider or facility. 

HHS seeks comment on whether and 

how the term ‘‘family member’’ should 

be defined. HHS is sensitive to concerns 

that some individuals may not have a 

familial relation formally recognized 

under applicable state law, or other 

documented legal partnership with 

individuals whom they consider family. 

Therefore, when interpreting this 

requirement, HHS will construe the 

term ‘‘family member’’ broadly to 

include such individuals prior to the 

issuance of additional guidance. 

Timing of Notice 

In order to ensure that a participant, 

beneficiary, enrollee, or authorized 

representative has an opportunity to 

properly review and consent to a notice 

to receive items or services furnished by 

a nonparticipating provider or 

nonparticipating emergency facility and 

waive balance billing protections, the 

provider or facility must provide such a 

notice in the timeframe specified in the 

statute and this interim final rule. As 

specified in section 2799B–2(d) of the 

PHS Act, if an individual schedules an 


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77A provider or facility is never required to 

provide notice and seek consent from a participant, 

beneficiary, or enrollee. To the extent a provider is 

concerned that the 3 hours’ prior requirement will 

result in a delay in care that is detrimental to the 

individual, the provider or facility can furnish the 

items or services, subject to the balance billing 

protections, rather than providing notice and 

seeking consent to waive the protections. 

appointment for such items or services 

at least 72 hours before the date of the 

appointment, the provider or facility 

must provide the notice to the 

individual, or their authorized 

representative, no later than 72 hours 

before the date of the appointment; and 

if an individual schedules an 

appointment for such items or services 

within 72 hours of the date of the 

appointment, the provider or facility 

must provide the notice to the 

individual, or their authorized 

representative, on the day that the 

appointment is made. In addition, these 

interim final rules specify that in the 

situation where an individual is 

provided the notice on the same day 

that the items or services are furnished, 

providers and facilities are required to 

provide the notice no later than 3 hours 

prior to furnishing items or services to 

which the notice and consent 

requirements apply. 

This 3-hour requirement is intended 

to address situations where an 

individual might be asked to provide 

consent immediately before a provider 

furnishes the item or service, which 

may prevent their consent from being 

truly voluntary. Stakeholders have 

recommended that notice and consent 

procedures be unavailable when an 

individual visits a participating facility 

and receives care from a 

nonparticipating provider from whom 

the individual did not seek out services 

(for example, if a specialist furnishes an 

unexpected consultation on the 

recommendation of the attending 

physician). Stakeholders expressed 

concern that such providers might 

provide the notice at the time they 

appear for the consultation, and the 

individual might feel compelled to 

consent to receive care. HHS is of the 

view that the requirement that the 

notice be provided no later than 3 hours 

prior to furnishing items or services 

helps to ensure individuals can 

voluntarily provide informed consent, 

while not removing the informed 

consent option entirely in instances 

where the appointment is made the 

same day as the date the services are 

scheduled. HHS seeks comment on 

whether such a time limit is a 

reasonable approach, as well as whether 

the 3 hours’ time requirement should be 

shorter or longer, in order to best ensure 

that consent is freely given while also 

facilitating timely access to care. For 

example, HHS is interested in 

understanding if there are situations 

where this time requirement may 

unduly delay access to urgently 

necessary care, including in the poststabilization care context.77

Alternatively, HHS is interested in 

understanding if more time may be 

necessary for an individual to read, 

understand, and consider their options, 

including considering whether they can 

resolve prior authorization or other care 

management limitations, before 

voluntarily consenting to treatment. 

HHS is also interested in whether these 

timing requirements present barriers to 

providers’ and facilities’ ability to 

comply with the requirement that the 

notice and consent documents be 

provided to the individual in paper or, 

as practicable, electronic form, as 

selected by the individual. 

Content of Notice 

As stated previously, a provider or 

facility must provide the written notice 

using the form specified by HHS in 

guidance, customized to include the 

information specified in 45 CFR 

149.420(d) (and 45 CFR 149.410(b)(2), 

for post-stabilization services, as 

applicable). 

The notice must state that the health 

care provider furnishing the items or 

services is a nonparticipating provider, 

or that the health care facility furnishing 

the items or services is a 

nonparticipating emergency facility, as 

applicable, with respect to the health 

plan or coverage. The provider or 

facility will need to customize the form 

to identify the provider or facility by 

name. This will help ensure individuals 

understand for which specific providers 

or facilities they would be waiving their 

balance billing protections. 

The notice must include the good 

faith estimated amount that such 

nonparticipating provider or 

nonparticipating emergency facility may 

charge the individual for the items and 

services involved, including any item or 

service that the nonparticipating 

provider reasonably expects to provide 

in conjunction with such items and 

services. In the case of a 

nonparticipating emergency facility, the 

notice must include the good faith 

estimate for such items or services that 

would reasonably be expected to be 

provided by the nonparticipating 

emergency facility or by 

nonparticipating providers as part of the 

visit at such facility. HHS is including 

the requirement regarding disclosing 

items and services reasonably expected 

to be provided in order to ensure that 

the participant, beneficiary, or enrollee 

has an accurate understanding of the 

cost of care. As discussed in section 

IV.A.2.iv of this preamble, individuals 

cannot waive the balance billing 

protections for items or services 

furnished as a result of unforeseen, 

urgent medical needs that arise at the 

time an item or service is furnished for 

which the nonparticipating provider or 

nonparticipating facility satisfied the 

notice and consent criteria. 

Nonparticipating providers who are 

providing this notice are required to 

provide a good faith estimate for only 

the items or services that they would be 

furnishing and are not required to 

provide a good faith estimate for items 

or services furnished by other providers 

at the facility. However, if a 

nonparticipating provider has not 

satisfied the notice and consent criteria, 

balance billing and cost-sharing 

protections will apply to the individual 

with respect to items and services 

furnished by that nonparticipating 

provider, even if a different 

nonparticipating provider has satisfied 

the notice and consent criteria with 

respect to the same visit. If they choose, 

multiple nonparticipating providers that 

are furnishing related items and services 

for an individual may provide a single 

notice to the individual, provided that: 

(1) Each provider’s name is specifically 

listed on the notice document; (2) each 

provider includes in the notice a good 

faith estimate for the items and services 

they are furnishing, and the notice 

specifies which provider is providing 

which items and services within the 

good faith estimate; and (3) the 

individual has the option to consent to 

waive balance billing protections with 

respect to each provider separately. 

HHS is of the view that an individual 

cannot consent to waive balance billing 

and cost-sharing protections unless they 

have been informed of their potential 

liability with respect to both the facility 

and provider charges related to 

receiving post-stabilization services at a 

nonparticipating emergency facility. 

Therefore, nonparticipating emergency 

facilities must include in the written 

notice the good faith estimated amount 

that the participant, beneficiary, or 

enrollee may be charged for items or 

services furnished by the 

nonparticipating emergency facility or 

by nonparticipating providers with 

respect to the visit at such facility 

(including any item or service that is 

reasonably expected to be furnished by 

the nonparticipating emergency facility 

or nonparticipating providers in 

conjunction with such items or 


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services). HHS seeks comment regarding 

potential challenges nonparticipating 

emergency facilities may have in 

coordinating the development of a good 

faith estimate on behalf of both the 

facility and providers. To the extent that 

the nonparticipating facility omits from 

the good faith estimate information 

about items and services provided by a 

nonparticipating provider, the notice 

and consent criteria will be not be 

considered met for items and services 

furnished by that provider, and the 

requirements in 45 CFR 149.410(a) (and 

the corresponding requirements on 

plans and issuers) would apply. 

HHS is aware that nonparticipating 

providers and nonparticipating 

emergency facilities generally are 

unable to calculate what an individual’s 

final out-of-pocket costs (inclusive of 

balance bills) will be for items and 

services partially or wholly covered by 

the individual’s plan or coverage. 

Therefore, the good faith estimated 

amount should reflect the amount the 

provider or facility expects to charge for 

furnishing such items or services, even 

if the provider or facility intends to bill 

the plan or coverage directly. In 

calculating this good faith estimated 

amount, the provider or facility is 

expected to apply the same process and 

considerations used to calculate the 

good faith estimate that is required 

under section 2799B–6(2) of the PHS 

Act. HHS seeks comment regarding the 

method by which this good faith 

estimated amount should be calculated, 

and anticipates addressing this 

requirement in future rulemaking. The 

notice must make clear that the 

provision of the good faith estimate in 

the notice, or the individual’s consent to 

be treated, does not constitute a contract 

with respect to the charges estimated for 

such items and services, or a contract 

that binds the participant, beneficiary, 

or enrollee to be treated by that provider 

or facility. HHS seeks comment 

regarding whether the provider or the 

facility should be required to include 

information about what may be covered 

by the individual’s plan or coverage and 

an estimate of the individual’s out-ofpocket costs. 

The notice must provide information 

about whether prior authorization or 

other care management limitations may 

be required in advance of receiving such 

items or services at the facility or from 

the provider. HHS recognizes that there 

may be challenges for nonparticipating 

providers or facilities to identify what 

prior authorization and other care 

management limitations may apply with 

respect to a plan or coverage in which 

they do not participate. Therefore, 

providers and facilities may provide 

general information in order to satisfy 

this requirement, but to the extent 

possible, HHS encourages them to 

contact the issuer or plan about any 

such limitations so that they can 

include specific information in the 

notice. HHS interprets this statutory 

provision to require information on 

prior authorization or care management 

requirements to extend to care furnished 

by both providers and facilities, in order 

for participants, beneficiaries, and 

enrollees to understand all requirements 

associated with their care before they 

consent to treatment and balance 

billing. Requiring that the notice 

include specificity regarding prior 

authorization or care management 

requirements could improve the 

usefulness of the information to 

individuals compared to general 

information about what requirements 

may apply, but may make providing 

notices overly burdensome for providers 

and facilities. HHS seeks comment on 

whether providers and facilities should 

instead be required to include in the 

notice specific information about any 

prior authorization and care 

management requirements that apply to 

any items and services covered under 

the notice. HHS also seeks comment on 

barriers or other burdens facing 

nonparticipating providers or facilities 

in obtaining this information from a 

plan or issuer. 

The notice must clearly state that the 

individual is not required to consent to 

receive such items or services from such 

nonparticipating provider or 

nonparticipating emergency facility. 

The notice must state that the 

individual may instead seek care from 

an available participating provider or at 

a participating emergency facility, with 

respect to the plan or coverage, as 

applicable, and that in such cases, innetwork cost-sharing amounts will 

apply. 

In cases where post-stabilization 

services are being furnished by a 

nonparticipating provider at a 

participating emergency facility, the 

notice must include a list of any 

participating providers at the 

participating emergency facility who are 

able to furnish the items or services 

involved. The notice must inform the 

individual that they may be referred, at 

their option, to such a participating 

provider. HHS seeks comment regarding 

the format and content of the referral list 

to be included in the notice, including 

any challenges that providers may have 

in providing this information, and any 

further requirements that should be 

applied to providers when furnishing 

this information to the individual. 

ii. Standards for Consent 

In order to meet the notice and 

consent requirements of the No 

Surprises Act and these interim final 

rules, the nonparticipating provider, 

participating health care facility on 

behalf of the nonparticipating provider, 

or nonparticipating emergency facility 

must obtain from the participant, 

beneficiary, or enrollee the individual’s 

acknowledgment that they consent to be 

treated and balance billed by the 

nonparticipating emergency facility or 

nonparticipating provider under 

circumstances where the individual 

elects to receive such items or services. 

The consent must be provided 

voluntarily, meaning that the individual 

has consented freely, without undue 

influence, fraud, or duress. An 

incomplete consent document will be 

treated as a lack of consent and balance 

billing protections will still apply. 

As with the notice document, 

providers and facilities must use the 

standard consent document specified by 

HHS in guidance, and the consent 

document must be provided in 

accordance with such guidance. The 

consent document, specified in 

guidance, contains the information (or 

fillable fields for the information) 

required to be included in the consent 

form under these interim final rules, 

and described further in this section of 

the preamble. Providers and facilities 

will need to tailor the document to 

include information specific to the 

individual. In addition, as discussed 

previously, these interim final rules 

require that the consent be accompanied 

by the notice document, and that these 

documents be given together at the same 

time, physically separate from and not 

attached to or incorporated into any 

other documents. The consent 

document must be signed (including by 

electronic signature) by the individual, 

or the individual’s authorized 

representative. 

The nonparticipating provider, 

participating health care facility on 

behalf of the nonparticipating provider, 

or nonparticipating emergency facility 

must provide the individual with a copy 

of the signed notice and consent inperson, or through mail or email, as 

selected by the individual. 

The notice and consent documents 

must meet applicable language access 

requirements, as described in these 

interim final rules. The signed consent 

document must acknowledge that the 

individual has been provided with the 

written notice as described in these 

interim final rules, in the form selected 

by the individual. The signed consent 

document must also acknowledge that 


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78See, e.g., ‘‘Understanding Communication and 

Language Needs of Medicare Beneficiaries’’ (2017), 

https://www.cms.gov/About-CMS/AgencyInformation/OMH/Downloads/Issue-BriefsUnderstanding-Communication-and-LanguageNeeds-of-Medicare-Beneficiaries.pdf (‘‘The common 

languages in a given region, city, or town may vary 

greatly from those spoken in the state or in the U.S. 

as a whole.’’). 

79https://www.census.gov/programs-surveys/ 

metro-micro/about.html. 

80https://www.dartmouthatlas.org/faq/. 

81https://www.dartmouthatlas.org/faq/. 

82https://www.census.gov/programs-surveys/ 

geography/guidance/geo-areas/pumas.html#:∼:

text=Public%20Use%20Microdata%20Areas%20

(PUMAs)%20are%20non% 

2Doverlapping%2C,and%20the%20U.S.

%20Virgin%20Islands. 

the individual has been informed that 

the payment made by the individual 

might not accrue toward meeting any 

limitation that the plan or coverage 

places on cost sharing, including an 

explanation that the payment might not 

apply to an in-network deductible or 

out-of-pocket maximum under the plan 

or coverage. 

The consent document must state 

that, by signing the consent document, 

the individual agrees to be treated by 

the nonparticipating provider or 

nonparticipating emergency facility and 

understands that the individual may be 

balance billed and subject to costsharing requirements that apply to 

services furnished by nonparticipating 

providers or nonparticipating 

emergency facilities. In the case of a 

nonparticipating provider seeking 

consent, by signing the consent 

document, the individual agrees to 

waive balance billing and cost-sharing 

protections for only the items or 

services furnished by the provider or 

providers specifically named in the 

notice. In HHS’s view, an individual 

cannot provide informed consent to 

waive balance billing protections with 

respect to an unnamed provider, as the 

individual would not be on notice that 

the individual may be balance billed for 

items or services furnished by that 

provider. In addition, the individual 

may choose to consent to waive balance 

billing protections with respect to items 

or services furnished by none, some, or 

all of the nonparticipating providers 

listed in the notice. 

The signed consent document must 

include the date on which the 

individual received the written notice 

and the date on which the individual 

signed such consent to be furnished the 

items or services covered in the notice. 

In order to ensure that consent is 

provided prior to when the item or 

service is received, HHS also requires 

that the signed consent document 

include the time at which the individual 

signed the consent. 

The signed consent provided by the 

individual constitutes the individual’s 

consent to the receipt of the information 

contained in the notice document, and 

includes an acknowledgement that they 

may be balance billed for the receipt of 

the items or services. The consent does 

not constitute a contractual agreement 

with regard to any estimated charge or 

amount included in the notice or 

consent document, or a contract that 

binds the participant, beneficiary, or 

enrollee to be treated by that provider or 

facility. Consent obtained by the 

provider or facility under this notice 

and consent process in no way 

substitutes for or modifies requirements 

for informed medical consent otherwise 

required of the provider or facility, 

under state law or codes of medical 

ethics. 

The participant, beneficiary, or 

enrollee may revoke consent by 

notifying the provider or facility in 

writing prior to the furnishing of the 

items or services. If an individual 

revokes consent, the balance billing 

protections apply to applicable items or 

services provided after the revocation as 

if consent was never provided. HHS is 

of the view that the option to revoke 

consent is a critical safeguard to ensure 

that balance billing protections are 

waived only when individuals 

knowingly, purposefully, and freely 

provide informed consent. HHS seeks 

comment on whether additional 

rulemaking or guidance is needed on 

how an individual can revoke consent. 

iii. Language Access 

A nonparticipating provider or 

nonparticipating emergency facility 

providing a participant, beneficiary, or 

enrollee, or such individual’s 

authorized representative, with a notice 

under section 2799B–2(d) of the PHS 

Act must make the notice available in 

any of the 15 most common languages 

in the geographic region in which the 

applicable facility is located. HHS is of 

the view that individuals cannot 

provide meaningful consent if they 

cannot understand the information 

provided in the written notice and 

consent documents. These interim final 

rules, therefore, also require that the 

notice and consent document be made 

available in any of the 15 most common 

languages in the geographic region in 

which the applicable facility is located. 

Providers and facilities will need to 

translate the standard notice and 

consent documents specified by HHS in 

guidance into the applicable 15 

languages. 

A provider or facility meets this 

requirement if it provides the notice and 

consent documents in the 15 most 

common languages in its state. 

However, HHS recognizes that in some 

cases, particularly in larger states or 

metropolitan areas, these 15 languages 

may not adequately represent the 

languages spoken by the population 

served by the provider or facility.78

Therefore, the provider or facility may 

alternatively choose to provide the 

notice and consent documents in the 15 

most common languages in its 

geographic region, which reasonably 

reflects the geographic region served by 

the applicable facility. For example, a 

facility that serves the greater Los 

Angeles area may choose to provide the 

notice and consent documents in the 15 

most common languages within that 

geographic region, instead of the 15 

most common languages in the state of 

California. 

HHS considered different standards to 

apply in defining such geographic 

regions, and is seeking comment 

regarding the appropriate standard. 

HHS’s objective is to implement a 

standard that ensures that the language 

accessibility requirement is responsive 

to the needs of the individuals served by 

the provider or facility, while mitigating 

inconsistencies in the way that such 

geographic regions are determined. HHS 

is interested in comments regarding the 

use of metropolitan statistical areas 

(MSAs),79 hospital service areas 

(HSAs),80 hospital referral regions 

(HRRs),81 and public use microdata 

areas (PUMAs),82 applied based on 

where the applicable facility is located, 

as well as other standards that may be 

well-suited for this purpose. HHS also 

seeks comment on what language access 

standards would be appropriate in 

circumstances where the applicable 

facility serves populations in multiple 

states. 

As noted earlier in this section, HHS 

is of the view that individuals cannot 

provide meaningful consent if they 

cannot understand the information 

provided in the written notice and 

consent document. These interim final 

rules, therefore, add a language access 

requirement to address circumstances in 

which the individual cannot understand 

any of the 15 languages in which the 

notice and consent document are 

available. If the individual’s preferred 

language is not among the 15 most 

common languages in which the 

documents are made available by the 

nonparticipating provider or 

nonparticipating emergency facility, or 

the individual cannot understand the 

language in which the notice and 

consent documents are provided, as 

self-reported by the individual, the 


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83Batencourt, J.R., et al., Improving Patient Safety 

Systems for Patients with Limited English 

Proficiency: A Guide for Hospitals, Agency for 

healthcare Research and Quality, Publication No. 

12–0041, September 2012; Proctor, K. et al., The 

Limited English Proficient Population: Describing 

Medicare, Medicaid, and Dual Beneficiaries, Health 

Equity Vol. 2.1, 2018; Green, A.R. and Nze, C. 

Language-Based Inequity in Health Care: Who is the 

‘‘Poor Historian’’?, American Medical Association 

Journal of Ethics, Vol. 19, Number 3: 263–271, 

March 2017; Shamsi, H. et al., Implications of 

Language Barriers for Healthcare: A Systematic 

Review, Oman Medical Journal, Vol. 53, No. 2:e122, 

2020; de Moissac, D., Bowen, S., Impact of 

Language Barriers on Quality of Care and Patient 

Safety for Official Language Minority Francophones 

in Canada, Journal of Patient Experience, Vol. 6(1) 

24–32, 2019; Napoles, A.N., et al., Inaccurate 

Language Interpretation and its Clinical 

Significance in the Medical Encounters of Spanishspeaking Latinos, Med Care. 2015 November; 

53(11): 940–947; Divi, C., et al., Language 

Proficiency and Adverse Events in U.S. Hospitals: 

a Pilot Study, Int’l Journal for Quality in Health 

Care, vol. 19, no.2; Ali, P.A. and Watson, R., 

Language Barriers and their Impact of Provision of 

Care to Patients with Limited English Proficiency: 

Nurses Perspective, J. Clin. Nurs., 2018 Mar;27(5– 

6); Flores G. Language barriers to health care in the 

United States. N Engl J Med 2006; 355:229–231. Ku 

L, and Flores G. Pay now or pay later: Providing 

interpreter services in health care. Health Affairs. 

2005;24(2): 435–444; Hampers L.C., et al. Language 

barriers and resource utilization in a pediatric 

emergency department. Pediatrics. 1999; 103(6): 

1253–1256; Dewalt D.A., et al. Literacy and health 

outcomes: A systematic review of the literature. J. 

Gen Intern Med. 2004;19(12):1228–1239. 

doi:10.1111/j.1525–1497.2004.40153.x. 

84 Id. 

85 42 U.S.C. 18116. 

86 42 U.S.C. 2000d et seq. 

87 269 U.S.C. 794. 

88 42 U.S.C. 12101 et seq. 

89https://www.policygenius.com/blog/healthinsurance-literacy-survey-2019/; https://

www.cmu.edu/dietrich/sds/docs/loewenstein/ 

ConsumerMisUnderstandHealthIns.pdf. 

90 45 CFR 149.420(b) applies in cases of nonemergency services furnished by a nonparticipating 

provider at a participating facility and not in cases 

of emergency services. Additionally, 45 CFR 

149.410(c) specifies that the notice and consent 

exception for post-stabilization services does not 

apply to items or services furnished as a result of 

unforeseen, urgent medical needs that arise at the 

time a post-stabilization service is furnished for 

which the nonparticipating provider or 

nonparticipating emergency facility already 

satisfied the notice and consent criteria. 

notice and consent requirements 

described in these interim final rules are 

not met unless the provider or facility 

furnishes the individual with a qualified 

interpreter. 

The provider or facility should 

provide the notice and consent 

documents, or the qualified interpretive 

services, as applicable, in the 

individual’s self-reported, preferred 

language. Individuals should be asked 

what language they prefer to 

communicate in regarding health care 

information, for written or verbal 

communication, as applicable. An 

individual’s preference might not be the 

same for written and verbal 

communication, and an individual’s 

preference might not correlate with the 

individual’s native language. 

In interpreting the statutory 

requirements regarding language access 

in the notice and consent process, HHS 

recognizes communication, language, 

and literacy barriers are associated with 

decreased quality of care, poorer health 

outcomes, and increased utilization.83

Alternatively, the use of appropriate 

language services and at appropriate 

literacy levels in health care settings is 

associated with increased quality of 

care, improved patient safety outcomes, 

and lower utilization of costly medical 

procedures.84 HHS is of the view that it 

is imperative that health care providers 

and facilities take these efforts to 

provide the required notice and consent 

information in a manner understandable 

to the participant, beneficiary, or 

enrollee, to help achieve the goal of the 

statute and ensure that individuals are 

aware their rights and the options 

available to them. 

Providers and facilities are also 

required to comply with other state and 

federal laws regarding language access, 

to the extent applicable. HHS reminds 

health care providers and facilities that 

recipients of federal financial assistance 

must comply with federal civil rights 

laws that prohibit discrimination. These 

laws include section 1557 of the 

Affordable Care Act,85 title VI of the 

Civil Rights Act of 1964,86 section 504 

of the Rehabilitation Act of 1973,87 and 

the Americans with Disabilities Act of 

1990.88 Section 1557 and title VI require 

covered entities to take reasonable steps 

to ensure meaningful access to 

individuals with limited English 

proficiency, which may include 

provision of language assistance 

services such as written translation of 

written content in paper or electronic 

form into languages other than English. 

Section 1557 and section 504 require 

covered entities to take appropriate 

steps to ensure effective communication 

with individuals with disabilities, 

including provision of appropriate 

auxiliary aids and services at no cost to 

the individual. Auxiliary aids and 

services may include interpreters, large 

print materials, accessible information 

and communication technology, open 

and closed captioning, and other aids or 

services for persons who are blind or 

have low vision, or who are deaf or hard 

of hearing. Information provided 

through information and 

communication technology also must be 

accessible to individuals with 

disabilities, unless certain exceptions 

apply. Consistent with Executive Order 

13985 and civil rights protections cited 

in these regulations, HHS particularly 

seeks comments from minority and 

underserved communities including 

those with limited English proficiency 

and those with disabilities who prefer 

information in alternate and accessible 

formats, and stakeholders who serve 

such communities, on whether the 

provisions and protections related to 

communication, language, and literacy 

sufficiently address barriers that exist to 

ensuring all individuals can read, 

understand, and consider their options 

related to notice and consent. HHS also 

seeks comment on what additional or 

alternate policies HHS may consider to 

help address and remove such barriers. 

HHS understands that the technical 

nature of these protections may 

inherently pose barriers to individuals 

or their authorized representatives as 

they consider their options. Numerous 

studies have indicated that consumer 

comprehension of common health 

insurance concepts is varied and that 

many are not able to accurately answer 

questions about their health plan’s 

benefit design or health care costs.89

Individuals may also face intersecting 

and overlapping barriers (commonly 

referred to as the Social Determinants of 

Health) as they interact with the health 

care system, in addition to numerous 

technical forms and documents as part 

of receiving care. HHS solicits comment 

on how to best strike the balance 

between consumer friendliness and 

usability of such documents, while 

ensuring that they are consistent with 

these interim final rules and the 

statutory intent. HHS specifically seeks 

comment from those with experience in 

supporting individuals with low health 

literacy, including providers, patient 

advocates, and navigators, as well as 

those with experience in user design, in 

order to ensure that documents 

conveying these protections and 

opportunities to convey notice and 

consent are understandable and 

accurate. 

iv. Exceptions to the Availability of 

Notice and Consent 

The notice and consent exception is 

not applicable with respect to some 

non-emergency items or services.90

Instead, the prohibition on balance 

billing and the in-network cost-sharing 

requirements, as described in these 

interim final rules, always apply with 

respect to those items or services. In 

addition, the exception for notice and 

consent is not applicable with respect to 

emergency services, except for poststabilization services, under certain 

conditions. 

First, as specified in section 2799B– 

2(b) of the PHS Act, with respect to nonVerDate Sep<11>2014 20:26 Jul 12, 2021 Jkt 253001 PO 00000 Frm 00039 Fmt 4701 Sfmt 4700 E:\FR\FM\13JYR2.SGM 13JYR2

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emergency services, the notice and 

consent exception does not apply to 

ancillary services, which include items 

and services related to emergency 

medicine, anesthesiology, pathology, 

radiology, and neonatology, whether 

provided by a physician or nonphysician practitioner; items and 

services provided by assistant surgeons, 

hospitalists, and intensivists; diagnostic 

services, including radiology and 

laboratory services; and items and 

services provided by a nonparticipating 

provider, only if there is no 

participating provider who can furnish 

such item or service at such facility. 

Additionally, as specified in section 

2799B–2(c) of the PHS Act, the notice 

and consent exception does not apply to 

items or services furnished as a result of 

unforeseen, urgent medical needs that 

arise at the time an item or service is 

furnished for which a nonparticipating 

provider satisfied the notice and 

consent criteria. For example, even if an 

individual has consented to waive 

balance billing and in-network costsharing protections with respect to 

items and services provided by certain 

nonparticipating providers related to a 

knee surgery, that individual has not 

consented, nor are providers permitted 

to seek consent under the statute and 

these interim final rules, to waive those 

protections with respect to unforeseen, 

urgent medical needs that arise during 

the knee surgery. Because individuals 

lack the requisite information to provide 

informed consent to waive balance 

billing and cost-sharing protections with 

respect to unforeseen, urgent medical 

needs, HHS has determined that the 

rationale for the statutory exception for 

notice and consent to not extend to 

unforeseen, urgent medical needs with 

respect to non-emergency services also 

applies to unforeseen, urgent poststabilization services. Therefore, these 

interim final rules provide that any 

notice provided and consent obtained 

with regard to the furnishing of certain 

items or services does not extend to 

additional items or services furnished in 

response to unforeseen, urgent medical 

needs either in the context of a 

nonparticipating provider in a 

participating facility, or of poststabilization services. 

The statute authorizes HHS to expand 

the definition of ancillary services to 

include items and services provided by 

other types of providers. HHS seeks 

comment on other ancillary services 

that should be considered to be made 

ineligible for the notice and consent 

exception. In particular, HHS is 

interested in comments on whether 

there are other ancillary services for 

which individuals are likely to have 

little control over the particular 

provider who furnishes items or 

services. HHS is of the view that it is 

with respect to these types of providers 

that notice and consent procedures are 

least appropriate. HHS is also interested 

in comments regarding the types of 

ancillary services for which surprise 

bills are most common, and whether 

they should be added to the definition 

of ancillary services that are not subject 

to the notice and consent exception. 

Finally, HHS seeks comment on what 

criteria HHS should use in determining 

whether other ancillary services should 

be added to the definition. 

Furthermore, the statute authorizes 

HHS to specify a list of advanced 

diagnostic laboratory tests that would 

not be considered ancillary services 

under this definition. Any such 

advanced diagnostic laboratory tests 

would still be subject to the surprise 

billing protections described in these 

interim final rules, but the notice and 

consent exemption process would also 

be available for these tests. HHS seeks 

comment on what criteria HHS should 

consider in determining whether an 

advanced diagnostic laboratory test 

should be excepted from the definition 

of ancillary services, and on any specific 

advanced diagnostic laboratory tests 

that should be considered to be made 

eligible for the notice and consent 

exception. 

v. Retention of Certain Documents 

Under Section 2799B–2(e) of the PHS 

Act and these interim final rules, 

nonparticipating emergency facilities, 

participating health care facilities, and 

nonparticipating providers are required 

to retain written notice and consent 

documents for at least a 7-year period 

after the date on which the item or 

service in question was furnished. 

Specifically, when a nonparticipating 

emergency facility obtains a signed 

consent from a participant, beneficiary, 

or enrollee, or such individual’s 

authorized representative, for an item or 

service furnished to the individual by 

the facility or any nonparticipating 

provider at such facility, the facility 

must retain the written notice and 

consent for the 7-year period. Similarly, 

when a participating health care facility 

obtains a signed consent from a 

participant, beneficiary, or enrollee, or 

such individual’s authorized 

representative, for an item or service 

furnished to the individual by a 

nonparticipating provider at such 

facility, the facility must retain the 

written notice and consent for a 7-year 

period. If a nonparticipating provider 

obtains a signed consent from a 

participant, beneficiary, or enrollee, or 

such individual’s authorized 

representative, where the facility does 

not otherwise obtain the consent on 

behalf of the provider, the provider may 

either coordinate with the facility so 

that the facility retains the written 

notice and consent for a 7-year period, 

or the provider must retain the written 

notice and consent for a 7-year period. 

HHS interprets the retention 

requirement to apply to providers as 

well as facilities, in order to ensure that 

all notice and consent documents are 

appropriately retained, regardless of 

how they are obtained. 

vi. Requirements To Notify the Plan or 

Issuer 

For each item or service furnished by 

a nonparticipating provider or 

nonparticipating emergency facility, the 

provider (or participating facility on 

behalf of the nonparticipating provider) 

or nonparticipating emergency facility, 

as applicable, must timely notify the 

plan or issuer as to whether balance 

billing and in-network cost sharing 

protections apply to the item or service, 

and provide to the plan or issuer a 

signed copy of any signed written notice 

and consent documents. With respect to 

non-emergency services described in 45 

CFR 149.410(a), the nonparticipating 

provider (or the participating facility on 

behalf of the provider) must timely 

notify the plan or issuer that the item or 

service was furnished during a visit at 

a participating health care facility. With 

respect to post-stabilization services, the 

nonparticipating provider or 

nonparticipating emergency facility 

must notify the plan or issuer as to 

whether all the conditions described in 

45 CFR 149.410(b) are met with respect 

to each of the items and services for 

which the bill is submitted. With 

respect to non-emergency services only, 

in instances where the nonparticipating 

provider bills the participant, 

beneficiary, or enrollee directly (where 

permitted under these interim final 

rules), the provider (or participating 

health care facility on behalf of the 

provider) may satisfy the requirement to 

timely notify the plan or issuer by 

including the notification with the bill 

to the individual. 

In interpreting the statutory 

requirements, HHS recognizes that it is 

critical that a group health plan or 

health insurance issuer have knowledge 

of whether the balance billing and innetwork cost-sharing requirements 

apply, including whether an item or 

service is furnished during a visit at a 

participating health care facility and if 

any notice was provided and consent 

given what items and services were 

consented to, where such items and 


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36912 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

91The Departments note that whether a provider 

or facility provides such a notification to the plan 

or issuer and whether a plan or issuer processes a 

claim as if notice and consent were obtained based 

on a provider’s notification is not determinative of 

whether the balance billing protections apply. A 

participant, beneficiary, or enrollee who is balance 

billed or whose cost-sharing responsibility is 

calculated at out-of-network rates would still be 

able to contend that they did not receive sufficient 

notice or did not provide consent, and challenge the 

provider or facility’s right to balance bill them, as 

well as and the plan or issuer’s handling of the 

claim. 

services would otherwise be subject to 

the balance billing protections. This 

information is crucial for the plan or 

issuer to be able to appropriately assign 

cost sharing and adjudicate the claim in 

compliance with the No Surprises Act. 

These interim final rules require the 

provider or facility to notify the plan or 

issuer so that the plan or issuer is aware 

when the balance billing and in-network 

cost sharing protections apply and can 

process the claim appropriately.91

HHS seeks comment on whether 

additional rulemaking would be helpful 

regarding the process and timing for 

such notification, including the 

definition of ‘timely,’ and what 

processes for conveying the notification 

would be most efficient, including 

existing processes that could be 

leveraged to convey the information. 

HHS is particularly interested in 

comments regarding the requirement 

that providers or facilities provide to the 

plan or issuer a copy of the signed 

written notice and consent document, 

including comments on barriers and 

burdens associated with such 

requirement, and recommendations on 

how best to ensure plans and issuers 

have information regarding the notice 

and consent documents without 

imposing undue burden on providers 

and facilities. 

3. Provider and Facility Disclosure 

Requirements Regarding Patient 

Protections Against Balance Billing 

Section 2799B–3 of the PHS Act, 

added by the No Surprises Act, requires 

providers and facilities to provide 

disclosures regarding patient 

protections against balance billing. 

Among other things, the statute requires 

health care providers and facilities 

(including an emergency department of 

a hospital or independent freestanding 

emergency department) to make 

publicly available, post on a public 

website of the provider or facility (if 

applicable), and provide to participants, 

beneficiaries, and enrollees a one-page 

notice about the balance billing 

requirements and prohibitions that 

apply to the provider or facility under 

sections 2799B–1 and 2799B–2 of the 

PHS Act. The notice must include 

information about any applicable state 

requirements, and about how to contact 

appropriate state and federal agencies if 

the individual believes the provider or 

facility has violated the balance billing 

rules. These interim final rules codify 

the statutory requirements and 

information that these disclosures must 

include. In addition, as stated 

previously, under section 9820(c) of the 

Code, section 720(c) of ERISA, and 

section 2799A–5(c) of the PHS Act, 

plans and issuers must provide 

information in plain language on the 

prohibition against balance billing and 

information on contacting appropriate 

state and federal agencies in the case 

that an individual believes that such a 

provider or facility has violated the 

prohibition against balance billing. 

These disclosure requirements are 

applicable for plan years beginning on 

or after January 1, 2022. To reduce 

burden and facilitate compliance with 

these disclosure requirements, the 

Departments are concurrently issuing a 

model disclosure notice that health care 

providers, facilities, group health plans, 

and health insurance issuers may, but 

are not required to, use to satisfy the 

disclosure requirements regarding the 

balance billing protections. The 

Departments will consider use of the 

model notice in accordance with the 

accompanying instructions to be good 

faith compliance with the disclosure 

requirements of section 9820(c) of the 

Code, section 720(c) of ERISA, and 

section 2799A–5(c) of the PHS Act, if all 

other applicable requirements are met. 

The Departments may address these 

requirements in more detail in future 

guidance or rulemaking. Until such 

guidance or rulemaking implementing 

the requirements under section 9820(c) 

of the Code, section 720(c) of ERISA, 

and section 2799A–5(c) of the PHS Act 

becomes effective and applicable, plans 

and issuers should exercise good-faith 

compliance with those statutory 

provisions. 

These disclosures are critical to 

helping raise awareness and enhance 

the public’s understanding of state and 

federal balance billing protections. The 

purpose of these disclosures is to 

empower individuals to better 

understand the balance billing 

protections afforded under applicable 

state and federal law. In addition, these 

disclosures are important in ensuring 

individuals are able to identify 

violations of these interim final rules 

and related state law requirements and, 

if necessary, file complaints against 

providers and facilities. These 

disclosures further the efforts to help 

achieve the goals of the No Surprises 

Act and ensure that individuals are 

aware of their rights and the options 

available to them. These interim final 

rules codify the provider and facility 

disclosure requirements at 45 CFR 

149.430. These requirements apply to 

health care providers and health care 

facilities (including independent 

freestanding emergency departments). 

These interim final rules outline 

requirements regarding the content of 

the one-page disclosure, methods for 

disclosure, timing of disclosure to 

individuals, exceptions to the 

requirements, and a special rule to 

prevent unnecessary duplication with 

respect to providers. These disclosure 

requirements do not apply to providers 

of air ambulance services, as section 

2799B–3 of the PHS Act requires 

providers and facilities to disclose 

information regarding the requirements 

and prohibitions applicable to the 

provider or facility under sections 

2799B–1 of the PHS Act (relating to 

balance billing for emergency services) 

and 2799B–2 of the PHS Act (relating to 

balance billing for non-emergency 

services furnished by nonparticipating 

providers at certain participating 

facilities), but not under section 2799B– 

5 of the PHS Act (relating to balance 

billing for air ambulance services). 

Although this provision does not apply 

to providers of air ambulance services, 

as the definition of health care providers 

in 45 CFR 149.30 excludes providers of 

air ambulance services, HHS encourages 

providers of air ambulance services to 

make available clear and 

understandable information about the 

requirements and prohibitions on 

balance billing for air ambulance 

services. 

i. Content of Disclosure 

The statute and these interim final 

rules require that the disclosure must 

include a clear and understandable 

statement that explains the 

requirements and prohibitions 

applicable to the provider or facility 

under sections 2799B–1 and 2799B–2 of 

the PHS Act and their implementing 

regulations, relating to prohibitions on 

balance billing in cases of emergency 

services and non-emergency services 

performed by a nonparticipating 

provider at certain participating 

facilities as described earlier in this 

preamble. 

In addition, the disclosure must 

include clear and understandable 

language that explains any applicable 

state law requirements regarding the 

amounts such provider or facility may 

charge a participant, beneficiary, or 

enrollee after receiving payment, if any, 


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92See https://methods.18f.gov/ for information on 

user testing. 

93See section IV.2.iii of this preamble for 

discussion of select federal access standards. 

94https://www.cms.gov/About-CMS/AgencyInformation/OMH/Downloads/Language-AccessPlan-508.pdf. 

95See Dewalt DA, Berkman ND, Sheridan S, Lohr 

KN, Pignone MP. Literacy and health outcomes: a 

systematic review of the literature. J Gen Intern 

Med. 2004;19(12):1228–1239. doi:10.1111/j.1525– 

1497.2004.40153.x; Scott TL, Gazmararian JA, 

Williams MV, Baker DW. Health literacy and 

preventive health care use among Medicare 

enrollees in a managed care organization. Med Care. 

2002;40:395–404; Baker DW, Parker RM, Williams 

MV, Clark WS. Health literacy and the risk of 

hospital admission. J Gen Intern Med. 1998;13:791– 

8; Neira L. The importance of addressing language 

barriers in the US health system. Duke Center for 

Personalized Health Care (July 17, 2018), available 

at: https://dukepersonalizedhealth.org/2018/07/theimportance-of-addressing-language-barriers-in-theus-health-system/. 

from a plan or coverage (with which the 

provider or facility does not have a 

contractual relationship) and any 

applicable cost-sharing payment from 

such participant, beneficiary, or 

enrollee. 

HHS recognizes that there may be 

some state laws that are more protective 

of consumers than sections 2799B–1 

and 2799B–2 of the PHS Act and their 

implementing regulations. For example, 

a state law might prohibit an individual 

from providing consent to be balance 

billed under more circumstances than 

those in which balance billing are 

prohibited under those sections and 

their implementing regulations. If the 

more protective state law causes certain 

provisions of sections 2799B–1 and 

2799B–2 of the PHS Act and their 

implementing regulations to be 

inapplicable to the provider or facility, 

the provider or facility is not required 

to include language containing 

information on those inapplicable 

provisions in the disclosures regarding 

the federal requirements and 

prohibitions, to the extent permitted 

under state law. However, the provider 

or facility would continue to be required 

to include information in the 

disclosures about any provisions in 

sections 2799B–1 and 2799B–2 of the 

PHS Act and their implementing 

regulations that remain applicable to the 

provider or facility. 

Last, the statute and these interim 

final rules require that the disclosure 

must include clear and understandable 

language providing contact information 

for the appropriate state and federal 

agencies that an individual may contact 

if the individual believes the provider or 

facility has violated a requirement 

described in the notice. If only one 

federal or state agency has oversight 

with respect to providers or facilities in 

the state, the disclosure may include 

contact information for only that 

agency. 

In an effort to reduce the burden on 

health care providers and facilities, HHS 

has developed a model notice that 

health care providers and facilities may 

adopt, but are not required to use. HHS 

would consider a provider or facility 

that uses the HHS-developed model 

notice to be compliant with these 

federal disclosure rules with respect to 

the information regarding sections 

2799B–1 and 2799B–2 of the PHS Act 

and their implementing regulations. 

HHS encourages states to develop model 

language to assist health care providers 

and facilities in fulfilling the disclosure 

requirements related to applicable state 

law requirements and contact 

information. If a state develops model 

language that is consistent with section 

2799B–3 of the PHS Act, HHS will 

consider a provider or facility that 

makes appropriate use of the statedeveloped model language to be 

compliant with the federal requirement 

to include information about state law 

protections. 

To ensure clear and understandable 

language for the required information, 

HHS encourages health care providers 

and facilities to utilize plain language in 

the disclosure statements and to 

consider user testing in the 

development of such notices.92

Providers and facilities must comply 

with applicable state or federal language 

access standards in providing the 

disclosures.93 Communication and 

language barriers are associated with 

decreased quality of care and poorer 

health outcomes.94 Studies have shown 

the benefits associated with the use of 

language services in clinics and 

hospitals include (1) increased quality 

of care, (2) improved patient safety 

outcomes, and (3) lower utilization of 

costly medical procedures. The 

presence of a language barrier is 

associated with higher rates of costly 

resource utilizations for diagnostic 

testing, increased emergency 

department visits, decreased use of 

preventive services, higher rates of 

hospitalization, and higher rates of 

adverse health outcomes.95 HHS 

believes it is imperative that health care 

providers and facilities provide the 

required disclosure information in a 

clear and understandable manner to 

help achieve the goal of the No 

Surprises Act and ensure that 

individuals are aware of their rights 

related to protections against balance 

billing. 

In addition, HHS reminds health care 

providers and facilities that these 

notices must comply with applicable 

federal civil rights laws, including that 

providers and facilities must take 

reasonable steps to provide meaningful 

access for individuals with limited 

English proficiency and appropriate 

steps to ensure effective communication 

with individuals with disabilities, 

including accessibility of information 

and communication technology. 

HHS seeks comment on the content of 

the required disclosures. Consistent 

with Executive Order 13985 and civil 

rights protections cited in these interim 

final rules, HHS particularly seeks 

comments from minority and 

underserved communities, including 

from those with limited English 

proficiency, those who prefer 

information in alternate and accessible 

formats, those who are otherwise 

adversely affected by persistent poverty 

and inequality, as well as from 

stakeholders who serve these 

communities, on what additional 

barriers may exist so as to ensure 

individuals can read, understand, and 

consider disclosure information and on 

what policies HHS may consider for 

addressing and removing these barriers. 

ii. Methods of Disclosure 

The statute and these interim final 

rules require that each health care 

provider and facility must make the 

required disclosure publicly available, 

and (if applicable) post it on a public 

website of such provider or facility. In 

addition, providers and facilities must 

provide a one-page notice to individuals 

who are participants, beneficiaries, or 

enrollees of a group health plan or 

individual health insurance coverage 

offered by a health insurance issuer. 

To satisfy the requirement to post the 

disclosure on a public website, the 

disclosure or a link to such disclosure 

must be searchable on the provider’s or 

facility’s public website. HHS is of the 

view that the required disclosure 

information would not be publicly 

available unless displayed in a manner 

that is easily accessible, without 

barriers, and that ensures that the 

information is accessible to the general 

public, including that it is findable 

through public search engines. For 

example, HHS is of the view that a 

public website must be accessible free of 

charge, without having to establish a 

user account, password, or other 

credentials, accept any terms or 

conditions, and without having to 

submit any personal identifying 

information such as a name or email 

address. HHS seeks comment on 

whether additional regulatory standards 

are needed regarding what constitutes 

disclosure on a provider’s or facility’s 

public website to ensure the information 

is accessible to the public. 


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96For requirements regarding when health care 

providers are required to provide the Notice of 

Privacy Practices, see 45 CFR 164.520(c). 

These interim final rules provide that 

a health care provider or health care 

facility that does not have its own 

website is not required to make a 

disclosure on a public website. HHS 

anticipates that most facilities subject to 

the requirements in sections 2799B–1 

and 2799B–2 of the PHS Act would 

generally have a website, but recognizes 

that providers who furnish services at 

such facilities may not have their own 

website. 

To satisfy the required disclosure to 

the public, providers and facilities must 

display the required disclosure 

information on a sign posted 

prominently at the location of the health 

care provider or health care facility. 

HHS would consider a sign to be posted 

prominently, if the sign were posted in 

a central location, such as where 

individuals schedule care, check-in for 

appointments, or pay bills. Such 

locations would allow individuals to be 

aware of the protections available before 

or at the time of service or payment. 

HHS is of the view that ensuring the 

individual is aware of the surprise 

billing protections is integral to 

implementation of these requirements. 

HHS recognizes that some providers 

may not have publicly accessible 

locations and has concluded that 

requiring a sign to be posted 

prominently at a non-publicly 

accessible location would not further 

the purpose of providing a disclosure. 

Therefore, providers without a publicly 

accessible location are not required to 

make the disclosure under 45 CFR 

149.430(c)(2). 

Lastly, the statute and these interim 

final rules require that health care 

providers and facilities must provide 

the required disclosure information in a 

one-page notice to individuals who are 

participants, beneficiaries, or enrollees 

of a group health plan or group or 

individual health insurance coverage 

offered by a health insurance issuer. The 

notice must be provided in-person or 

through mail or email, as selected by the 

participant, beneficiary, or enrollee. As 

outlined in the statute, the required 

disclosure to individuals must be 

limited to one page. HHS interprets the 

statute such that the disclosure notice 

may be one double-sided page. These 

interim final rules specify that the onepage disclosure must not include print 

smaller than 12-point font. These 

specifications are important to ensure 

that the one-page document is both 

designed in a form and presented in a 

manner that is readable by the 

individual or their representative and 

that it contains sufficient content to 

meet the requirements of these interim 

final rules. 

HHS seeks comment on these 

disclosure methods, including whether 

additional methods of providing 

information should be required or 

permitted. In particular, HHS is 

interested in comments regarding 

whether posting of the disclosure 

information could be in a location other 

than a sign posted prominently at the 

location of the provider or facility. In 

addition, HHS seeks comment on ways 

to ensure that the required disclosure 

information posted on a public website 

is accessible to individuals. 

iii. Timing of Disclosure to Individuals 

These interim final rules generally 

require a health care provider or health 

care facility to provide the notice to 

participants, beneficiaries, or enrollees 

no later than the date and time on 

which the provider or facility requests 

payment from the individual (including 

requests for copayment made at the time 

of a visit to the provider or facility). In 

cases where the facility or provider does 

not request payment from the 

individual, the notice must be provided 

no later than the date on which the 

provider or facility submits a claim for 

payment to the plan or issuer. 

HHS is of the view that the notice will 

be most effective in helping individuals 

understand their rights and protections 

under federal and state balance billing 

laws and protecting individuals from 

being improperly billed, if individuals 

receive the notice in accordance with 

this timing requirement. The 

requirement will ensure the disclosures 

are meaningful and that individuals are 

aware of their rights before or at the 

time of payment, which is likely to help 

individuals to avoid paying bills that are 

prohibited under state or federal balance 

billing rules. However, these interim 

final rules offer providers and facilities 

flexibility regarding when the disclosure 

must be provided to individuals. 

Providers and facilities may provide the 

required disclosures to individuals 

earlier. For example, they could provide 

the notice when an individual 

schedules an appointment, or when 

other standard notice disclosures (such 

as the Notice of Privacy Practices for 

Protected Health Information 96) are 

shared with individuals. 

In developing these interim final 

rules, HHS considered allowing 

providers or facilities to provide the 

disclosure annually or only at the time 

a patient schedules a service, but 

wanted to ensure the timing of the 

disclosure was relevant to when the 

individual may experience a violation of 

the surprise billing protections. HHS 

encourages providers and facilities to 

provide individuals with the notice at a 

time that will maximize the notice’s 

effectiveness. 

HHS seeks comment on this timing 

requirement, and whether another 

timing requirement would be more 

appropriate. 

iv. Exceptions 

Although section 2799B–3 of the PHS 

Act could be interpreted to apply 

broadly to all health care providers and 

facilities, these interim final rules 

include two exceptions to the general 

requirement to provide disclosures 

regarding balance billing protections. 

First, health care providers are not 

required to make the disclosures 

required under this section if they do 

not furnish items or services at a health 

care facility, or in connection with visits 

at health care facilities. Second, health 

care providers are required to provide 

the required disclosure only to 

individuals to whom they furnish items 

or services, and then only if such items 

or services are furnished at a health care 

facility, or in connection with a visit at 

a health care facility. HHS further notes 

that, under section 2799B–3 of the PHS 

Act, disclosure is required only to 

individuals who are participants, 

beneficiaries, or enrollees of a group 

health plan or group or individual 

health insurance coverage offered by a 

health insurance issuer. However, as 

specified in 5 U.S.C. 8902(p), section 

2799B–3 of the PHS Act applies to a 

health care provider and facility with 

respect to a covered individual in a 

FEHB plan, as well. The disclosure 

requirement is not required with respect 

to other individuals seeking care from a 

provider or facility. 

While the statute does not explicitly 

provide for these exceptions, HHS is of 

the view that these exceptions serve two 

important purposes. First, they seek to 

avoid unnecessary confusion among 

individuals who otherwise might 

receive the disclosure under 

circumstances in which the balance 

billing protections would never apply. 

For instance, providing the disclosure of 

balance billing protections in a primary 

care provider’s office could lead 

individuals to incorrectly assume 

balance billing protections exist where 

they do not. Second, by ensuring that 

the disclosures are targeted narrowly to 

relevant individuals, the exceptions aim 

to implement the statutory requirement 

without creating additional undue 

burden on providers and facilities. 

HHS is of the view that these 

exceptions are consistent with balance 


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97Pursuant to section 2799B–4 of the PHS Act, 

states have authority to enforce the requirements of 

Part E of title XXVII of the PHS Act against a 

provider or health care facility (including a 

provider of air ambulance services), and HHS must 

enforce if a state has failed to substantially enforce 

the requirements. HHS intends to issue rulemaking 

in the future to implement section 2799B–4 of the 

PHS Act. 

billing requirements elsewhere in these 

interim final rules, related to emergency 

services or non-emergency services 

furnished by a nonparticipating 

provider at a participating facility. 

Furthermore, HHS is of the view that 

these exceptions do not lessen the 

positive impact of the disclosure 

requirement, as health care providers 

and facilities are still required to make 

the disclosures where balance billing is 

most likely to occur, which will help to 

ensure individuals are aware of their 

rights relating to consumer protections 

against balance billing. 

HHS seeks comment on these 

exceptions and whether there are other 

scenarios that should be considered. 

v. Special Rule To Prevent Unnecessary 

Duplication With Respect to Providers 

HHS realizes there may be some 

instances where an individual may 

receive two disclosure notices—one 

from a provider furnishing items or 

services at a health care facility, and the 

other from the health care facility itself. 

These interim final rules include a 

special rule to streamline the provision 

of the required disclosure to the public 

and one-page notice to individuals and 

avoid unnecessary duplication of the 

disclosures with respect to providers 

furnishing care at a health care facility. 

This special rule does not apply with 

respect to the requirement that each 

health care provider and facility post 

the required disclosure on a public 

website of such provider or facility. 

While section 2799B–3 of the PHS Act 

does not explicitly provide for a special 

rule to prevent unnecessary duplication 

with respect to providers, HHS is of the 

view that this special rule serves an 

important purpose in implementing 

these requirements while reducing 

unnecessary burden and effort for 

providers. Furthermore, HHS is of the 

view that this special rule will also help 

reduce potential consumer confusion by 

allowing individuals to receive only one 

disclosure notice when receiving 

services from a provider furnishing 

items or services at a health care facility, 

both of which are subject to the 

disclosure requirement. 

The special rule provides that to the 

extent a provider furnishes an item or 

service covered under the plan or 

coverage at a health care facility 

(including an emergency department of 

a hospital or independent freestanding 

emergency department), the provider 

satisfies the disclosure requirements if 

the facility agrees to provide the 

information, in the required form and 

manner, pursuant to a written 

agreement. In such instance, the 

disclosure must include information 

about the balance billing requirements 

and prohibitions applicable to both the 

facility and the provider. If a provider 

and facility have a written agreement 

under which the facility agrees to 

provide the information required under 

these interim final rules, and the facility 

fails to provide full or timely disclosure 

information, then the facility, but not 

the provider, would violate the provider 

disclosure requirements regarding 

balance billing protections. HHS is of 

the view that this will remove 

unnecessary burden and effort for the 

providers. HHS clarifies that a ‘‘written 

agreement’’ may be an existing contract 

between the provider and facility to 

furnish care at the facility, if amended 

to provide for this special rule. 

Alternatively, a provider and facility 

may enter into a new written agreement 

specifically outlining the disclosure 

requirements regarding balance billing 

protections. 

Providers that enter into these 

arrangements with facilities are 

encouraged to monitor the facility’s 

adherence to these requirements. In 

addition, if a provider has knowledge 

that the required disclosure information 

is not being provided in a manner 

specified in these interim final rules, 

HHS encourages the provider to work 

with the facility to correct the 

noncompliance as soon as practicable or 

notify the applicable state authority or 

HHS, in states where HHS is enforcing 

this requirement.97 HHS may provide 

additional guidance if HHS becomes 

aware of situations where participants, 

beneficiaries, and enrollees are not 

being provided the required disclosure 

information in accordance with these 

interim final rules. 

HHS recognizes that providers and 

facilities frequently bill separately for 

items and services furnished by the 

provider and the facility, and 

considered whether to make the special 

rule inapplicable in those instances. 

However, HHS concluded that applying 

the special rule is appropriate in these 

situations, since the disclosures are not 

required to be included with the bill 

itself. Although these interim final rules 

provide some flexibility around the 

timing of the notice, HHS anticipates 

that the disclosure to the individual 

would generally be provided at the 

point of care. Thus, requiring the 

provider and facility to separately 

provide notices whenever they bill 

separately could result in the individual 

receiving multiple notices for the same 

visit. Duplicative paperwork could 

overwhelm or confuse the receiving 

individual, which could detract from 

the primary purpose of clarifying and 

making known the protections that may 

apply to the individual. In addition, 

HHS is of the view that requiring a 

provider to separately post a disclosure 

within a facility is of limited additional 

benefit and may present compliance 

challenges for providers who lack 

designated space within a facility. 

Therefore, the special rule applies 

regardless of whether the provider and 

facility bill jointly or separately. 

Furthermore, since the special rule 

does not apply with respect to the 

requirement that each health care 

provider and facility make the required 

disclosure available on the public 

website of the provider or facility, HHS 

is of the view that this special rule 

works to achieve the goals of preventing 

unnecessary duplication for providers 

and facilities, while encouraging 

safeguards to ensure that individuals 

receive the required disclosure 

information and are aware of their 

rights. HHS is of the view that this 

special rule does not lessen the positive 

impact of the disclosure requirement. 

This special rule will continue to help 

to ensure individuals are aware of their 

rights relating to patient protections 

against surprise billing. 

HHS seeks comment on this special 

rule and whether there are other 

circumstances that may warrant a 

special rule to prevent unnecessary 

duplication. In addition, HHS seeks 

comment on whether providers should 

be required, rather than encouraged, to 

monitor and report whether a facility is 

not complying with the requirement 

outlined in these interim final rules. 

4. Surprise Billing Complaints 

Regarding Health Care Providers, 

Facilities, and Providers of Air 

Ambulance Services 

The No Surprises Act adds section 

2799B–4(b)(3) of the PHS Act, which 

directs HHS to establish a process to 

receive consumer complaints regarding 

violations by health care providers, 

facilities, and providers of air 

ambulance services of balance billing 

requirements under sections 2799B–1, 

2799B–2, 2799B–3, and 2799B–5 of the 

PHS Act and to respond to such 

complaints within 60 days. Therefore, 

the interim final rules establish an HHSonly complaints process for health care 

providers, facilities and providers of air 

ambulance services that parallels the 


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36916 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

process that the Departments are 

establishing through these interim final 

rules for plans and issuers. A more 

fulsome discussion of the complaints 

process for providers can be found in 

section III.B.4 of this preamble. HHS 

seeks comment on the complaints 

process for health care providers, 

facilities, and providers of air 

ambulance services described in these 

interim final rules. 

5. Catastrophic Plans 

As discussed earlier in this preamble, 

where the surprise billing protections 

apply, and the out-of-network rate 

exceeds the amount upon which cost 

sharing is based (which for emergency 

services provide by a nonparticipating 

emergency facility and for nonemergency services provided by a 

nonparticipating provider at a 

participating health care facility is the 

recognized amount, and for services 

provided by a nonparticipating provider 

of air ambulance services is the lesser of 

the billed amount or the QPA), a group 

health plan or health insurance issuer 

offering group or individual health 

insurance coverage must pay the 

provider or facility the difference 

between the out-of-network rate and the 

cost-sharing amount, even in cases 

where an individual has not satisfied 

their deductible (in which case the costsharing amount is the recognized 

amount, or the lesser of the billed 

amount or the QPA, as applicable). 

Catastrophic plans generally cannot 

provide benefits for any plan year until 

the annual limitation on cost sharing in 

section 1302(c)(1) of ACA is reached, 

other than coverage of preventive 

services under section 2713 of the PHS 

Act and at least three primary care 

visits. A catastrophic plan cannot 

comply with the new balance billing 

protections, specifically the obligation 

to make a payment to a provider or 

facility prior to the enrollee meeting the 

annual limitation on cost sharing, while 

satisfying the definition of a 

catastrophic plan at section 1302(e) of 

ACA. Because the No Surprises Act 

does not contain language eliminating 

catastrophic plans or exempting 

catastrophic plans from the law’s 

requirements, HHS interprets the statute 

as permitting catastrophic plans to make 

payments required by sections 2799A– 

1 or 2799A–2 of the PHS Act without 

losing their status as catastrophic plans. 

HHS is, therefore, amending 45 CFR 

156.155 in these interim final rules to 

specify that a catastrophic plan must 

provide benefits as required under 

sections 2799A–1 and 2799A–2 of the 

PHS Act and their implementing 

regulations, or any applicable state law 

providing similar surprise billing 

protections to individuals. Additionally, 

a health plan will not fail to be treated 

as a catastrophic plan because the plan 

provides benefits prior to the annual 

limitation on cost sharing in section 

1302(c)(1) of the ACA, as required under 

sections 2799A–1 and 2799A–2 of the 

PHS Act or any applicable state law 

providing similar protections to 

individuals. 

V. Overview of Interim Final Rules— 

Office of Personnel Management 

A. Conforming Changes for FEHB 

Program 

The OPM interim final rules, through 

new 5 CFR 890.114 in subpart A, protect 

FEHB Program covered individuals from 

surprise medical bills for emergency 

services, air ambulance services 

furnished by nonparticipating 

providers, and non-emergency services 

furnished by nonparticipating providers 

at participating health care facilities in 

certain circumstances in the same 

manner as the Departments’ rules 

protect participants, beneficiaries, or 

enrollees. The Departments’ interim 

final rules generally apply with respect 

to FEHB carriers’ compliance with the 

No Surprises Act, except to the extent 

that differences are necessitated for 

clarification or appropriate application 

in the context of the FEHB Program. In 

considering application of the 

Departments’ interim rules with respect 

to the FEHB Program, it is important to 

recognize that all FEHB carriers offer 

fully insured health benefits plans in 

consideration of premium payments 

pursuant to contract terms, and no 

health benefits plan is self-insured by 

OPM or the Federal government. OPM 

seeks comment on this approach and 

whether there should be any additional 

considerations in the application of 

these interim final rules in the context 

of the FEHB Program. 

B. Preemption and OPM Enforcement 

FEHB contract terms preempt state 

law with respect to coverage or benefits 

(including payments with respect to 

benefits) pursuant to 5 U.S.C. 

8902(m)(1). Such preemption renders 

specified state law inapplicable for the 

purposes of determining recognized 

amounts and out-of-network rates under 

26 CFR part 54, 29 CFR part 2590, and 

45 CFR part 149. However, pursuant to 

bilateral negotiation of FEHB contract 

terms, OPM and the carrier may agree to 

apply state law to determine the total 

amount payable, rendering the state law 

amount, method, or process for 

determining the total amount payable an 

effective term of the Federally-regulated, 

Federally-enforced contract. 

Accordingly, in this instance, FEHB 

contract terms will govern the 

methodology for determining 

recognized amounts and out-of-network 

rates. In the absence of a FEHB contract 

term incorporating a state law amount, 

method, or process for determining the 

total amount payable (including an 

amount determined pursuant to an AllPayer Model Agreement under section 

1115A of the Social Security Act), the 

lesser of the billed amount or the QPA 

will serve as the recognized amount 

under the FEHB plan. Likewise, in the 

absence of a FEHB contract term 

incorporating an applicable state IDR 

process, the federal IDR process will 

govern the determination of out-ofnetwork rates in cases of failed open 

negotiations. 

Example A: A community-rated FEHB 

plan covers a specific non-emergency 

service that is provided to a covered 

individual in State A by a 

nonparticipating provider in a 

participating health care facility. Both 

the provider and the facility are licensed 

in State A. State A has a law that 

prohibits balance billing for nonemergency services provided to 

individuals by nonparticipating 

providers in a participating health care 

facility, and provides for a method for 

determining the cost-sharing amount 

and total amount payable. The law 

applies to health insurance issuers and 

providers licensed in State A and 

applies to the type of service provided. 

OPM and the FEHB carrier, through the 

annual contract negotiation cycle, have 

elected to utilize State A’s law, and the 

FEHB health benefits plan contains a 

term expressly incorporating the State A 

law prohibiting balance billing. In this 

Example, the FEHB contract terms apply 

the state law to determine the 

recognized amount and the out-ofnetwork rate. 

Example B: Same facts as Example A, 

except that the FEHB contract terms do 

not incorporate or expressly refer to the 

balance billing law of State A. In this 

Example, State A’s law prohibiting 

balance billing would be preempted by 

the terms of the FEHB contract. The 

lesser of the billed amount or QPA 

would apply to determine the 

recognized amount. The out-of-network 

rate would be determined through open 

negotiation between the 

nonparticipating provider and the FEHB 

carrier, or in the case of failed 

negotiations, an amount determined 

under the federal IDR process. 

Enforcement of these interim final 

rules with respect to FEHB carriers will 

generally be governed by OPM 

authorities set forth herein and 5 U.S.C. 


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98See, Greaney, T.L., Surprise Billing: A Window 

into the U.S. Health Care System, ABA Civil Rights 

and Social Justice Section, Human Rights Magazine 

(Sept. 8, 2020); Cooper, Z. et al., Surprise! Out-OfNetwork Billing For Emergency Care in the United 

States, NBER Working Paper 23623, 20173623 (July 

2017, Revised January 2018). 

8901 et seq., 5 CFR part 890, 48 CFR 

chapter 16, or the carrier’s FEHB 

contract. Any differences in terminology 

or other clarification will be set forth in 

the applicable FEHB contract. 

C. Definitions 

The No Surprises Act and these 

interim final rules include defined 

terms that are specific to the law’s 

requirements and implementation. 

Definitions of key terms with respect to 

OPM’s enforcement of 5 U.S.C. 8902(p) 

generally align with the Departments’ 

regulations, with certain exceptions. For 

compliance with these provisions, the 

terms ‘‘group health plan or plan,’’ 

‘‘health insurance issuer or issuer,’’ and 

‘‘participant, beneficiary, or enrollee’’ 

are respectively replaced with the terms 

‘‘health benefits plan,’’ ‘‘carrier,’’ and 

‘‘enrollee or covered individual.’’ 

D. Complaints 

Complaints related to the provisions 

under Part D of title XXVII of the PHS 

Act with respect to carriers and FEHB 

plans will generally be resolved in 

accordance with the Departments’ 

interim final rules. OPM will coordinate 

with the Departments to ensure that 

complaints appropriate for OPM 

resolution under the FEHB Program 

statute, regulations or contractual 

authorities are referred to OPM. 

E. Jurisdiction of Courts 

Under 5 U.S.C. 8912, the district 

courts of the United States have original 

jurisdiction, concurrent with the United 

States Court of Federal Claims, of a civil 

action or claim against the United States 

founded on FEHBA. Pursuant to new 

paragraph (e) in 5 CFR 890.107, in the 

event of litigation under these interim 

final rules, a suit for equitable relief 

founded on 5 U.S.C. chapter 89 that is 

based on 5 U.S.C. 8902(p) and is 

governed by 5 CFR part 890 must be 

brought against OPM by December 31 of 

the 3rd year after the year in which 

disputed services were rendered. OPM 

seeks comment on amendments to its 

regulation on court review. 

F. Applicability 

OPM seeks comment on the 

appropriate manner of conforming 

compliance with sections 9816, 9817, 

and 9822 of the Code; sections 716, 717, 

and 722 of ERISA; and sections 2799A– 

1, 2799A–2, and 2799A–7 of the PHS 

Act for application to FEHB carriers, 

including the appropriateness and 

usability of the definitions and any 

additional changes to the Departments’ 

regulatory provisions that must be 

conformed for appropriate 

implementation in the FEHB Program. 

For purposes of 5 U.S.C. 8902(p), the 

HHS interim final rules apply to health 

care providers, facilities, and providers 

of air ambulance services with respect 

to covered individuals in a FEHB plan 

in the same manner as they apply with 

respect to participants, beneficiaries, 

and enrollees in a group health plan or 

group or individual health insurance 

coverage offered by a health insurance 

issuer. OPM seeks comment on the 

appropriate manner of conforming 

compliance with 5 U.S.C. 8902(p) and 

sections 2799B–1, 2799B–2, 2799B–3, 

and 2799B–5 of the PHS Act. 

Consistent with the Departments’ 

approach discussed in section III.D. of 

this preamble, OPM will not apply these 

interim final rules to health benefits 

plans that are retiree-only plans. 

VI. Waiver of Proposed Rulemaking 

Section 9833 of the Code, section 734 

of ERISA, and section 2792 of the PHS 

Act authorize the Secretaries of the 

Treasury, Labor, and HHS (collectively, 

the Secretaries), respectively, to 

promulgate any interim final rules that 

they determine are necessary or 

appropriate to carry out the provisions 

of chapter 100 of the Code, part 7 of 

subtitle B of title I of ERISA, and title 

XXVII of the PHS Act. 

In addition, under section 553(b) of 

the Administrative Procedure Act (APA) 

(5 U.S.C. 551 et seq.) a general notice of 

proposed rulemaking is not required 

when an agency finds good cause that 

notice and comment procedures are 

impracticable, unnecessary, or contrary 

to the public interest and incorporates a 

statement of the finding and its reasons 

in the rule issued. The Secretaries and 

OPM Director have determined that it 

would be impracticable and contrary to 

the public interest to delay putting the 

provisions in these interim final rules in 

place until after a full public notice and 

comment process has been completed. 

The No Surprises Act was enacted on 

December 27, 2020, as title I of Division 

BB of the Consolidated Appropriations 

Act, 2021. The cost-sharing and balance 

billing requirements on plans, issuers, 

health care providers, facilities, and 

providers of air ambulance services in 

the No Surprises Act apply for plan 

years (in the individual market, policy 

years) beginning on or after January 1, 

2022. Although this effective date may 

have allowed for the regulations, if 

promulgated with the full notice and 

comment rulemaking process, to be 

applicable in time for the applicability 

date of the provisions in the No 

Surprises Act, this timeframe would not 

provide sufficient time for the regulated 

entities to implement the requirements. 

These interim final rules require plans 

and issuers to make significant changes 

to how they pay for items and services 

that are subject to the cost-sharing and 

balance billing protections, including 

implementing claims processing 

procedures to ensure that claims for 

items and services subject to these 

protections are processed in accordance 

with the requirements in these interim 

final rules. Group health plans and 

health insurance issuers offering group 

or individual health insurance coverage 

will have to account for these changes 

in establishing their premium or 

contribution rates, and in making other 

changes to the designs of plan or policy 

benefits. In some cases, issuers will 

need time to secure approval for these 

changes in advance of the plan or policy 

year in question. The Departments and 

OPM anticipate the plans and issuers 

will have already taken into 

consideration the statutory provisions in 

the No Surprises Act as they developed 

plan designs for 2022, and preliminary 

rates. Issuing these rules as interim final 

rules, rather than as a notice of 

proposed rulemaking, may allow plans 

and issuers to account for the finalized 

regulations as they finalize rates and 

plan offerings. 

The interim final rules place new 

requirements on facilities, health care 

providers, and providers of air 

ambulance services regarding when they 

are permitted to balance bill for items 

and services. Such requirements include 

new requirements related to how 

providers and facilities must bill for 

items and services furnished on an outof-network basis, requirements related 

to providing notice and obtaining 

consent regarding balance billing 

protections in certain circumstances, 

and requirements to disclose 

information on balance billing publicly, 

on a public website and to participants, 

beneficiaries, and enrollees. Health care 

providers and facilities require time to 

implement these new requirements to 

ensure compliance by January 1, 2022. 

These interim final rules contain 

critical protections for participants, 

beneficiaries, and enrollees against 

balance billing. For individuals who 

receive balance bills, the costs can be 

astronomical and devastating.98 In 

addition, the recipients of such bills are 

not the only ones who feel their impact. 

As discussed elsewhere in this 

preamble, providers have previously 

been able to leverage the ability to 


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99See Cooper, Z. et al., Surprise! Out-Of-Network 

Billing For Emergency Care in the United States, 

NBER Working Paper 23623, 20173623 (July 2017, 

Revised January 2018); Duffy, E. et al., ‘‘Policies to 

Address Surprise Billing Can Affect Health 

Insurance Premiums.’’ The American Journal of 

Managed Care 26.9 (2020): 401–404; and Brown 

E.C.F., et al., The Unfinished Business of Air 

Ambulance Bills, Health Affairs Blog, March 26, 

2021. DOI: 10.1377/hblog20210323.911379, 

available at https://www.healthaffairs.org/do/ 

10.1377/hblog20210323.911379/full/. 

100Trish E. et al., Policies to Address Surprise 

Billing Can Effect Health Insurance Premiums, Am 

J Manag Care. 2020;26(9):401–404. https://doi.org/ 

10.37765/ajmc.2020.88491. 

101All references to the Departments in the 

Economic Impact section of the preamble include 

OPM. The analysis includes FEHB plans. 

balance bill to negotiate higher innetwork rates. This leads to higher 

premiums, higher cost sharing for 

consumers, and increased health 

expenditures.99 One study estimated 

that policies to address surprise billing 

on a federal level could decrease health 

insurance premiums by one to five 

percent.100 Additionally, consumers 

may delay receiving needed medical 

care, including for emergency medical 

conditions, over concern about surprise 

medical bills. It is therefore in the 

public interest that individuals receive 

the protections under the No Surprises 

Act on the date on which those 

protections go into effect. Accordingly, 

in order to allow plans, health insurance 

issuers, facilities, health care providers, 

and providers of air ambulance services 

sufficient time to implement these new 

requirements, these rules must be 

published and available to the public 

well in advance of the effective date of 

the requirements in the No Surprises 

Act. Allowing time for a full notice and 

comment process prior to the 

requirements taking effect would not 

provide sufficient time for these entities 

to comply with the requirements for 

plan years (in the individual market, 

policy years) beginning on or after 

January 1, 2022, which would risk 

subjecting the public to prohibited 

balance bills and excess cost sharing. 

Additionally, plans and issuers need 

certainty regarding the standards of 

these requirements in order to begin 

implementation, which these interim 

final rules seek to provide. 

Section 2723 of the PHS Act 

authorizes states to enforce the 

requirements in Part D of title XXVII of 

the PHS Act with respect to issuers. 

Section 2799B–4 of the PHS Act 

authorizes states to enforce the 

requirements in Part E of title XXVII of 

the PHS Act with respect to providers 

and health care facilities (including a 

provider of air ambulance services). 

Under both sections, HHS is required to 

enforce such requirements if a state fails 

to substantially enforce them. In order 

to ensure effective oversight of these 

new requirements as soon as they go 

into effect, states require time to assess 

the requirements contained in these 

interim final regulations, and notify 

HHS if they have not enacted legislation 

to enforce such requirements or they 

otherwise will not be enforcing such 

requirements. States that opt to enforce 

the requirements may require time to 

update their regulations or statutes and 

develop processes for enforcing the new 

requirements. Delaying the rules to 

allow for notice and comment 

procedures would not provide sufficient 

time for states to assess the new 

requirements and notify HHS of their 

ability to enforce. 

In addition, the law requires the 

Secretaries to issue rulemaking by July 

1, 2021, regarding the QPA methodology 

(including defining the geographic 

regions for purposes of the 

methodology); information plans or 

issuers must share with 

nonparticipating providers or facilities, 

as applicable, regarding the plan or 

issuer’s determination of the QPA; and 

a process to receive complaints related 

to the QPA. Allowing time for a full 

notice and comment process prior to 

July 1, 2021, would not have provided 

sufficient time for the Departments to 

develop and publish these rules by the 

statutory deadline. 

For the foregoing reasons, the 

Departments and OPM have determined 

that it is impracticable and contrary to 

the public interest to engage in full 

notice and comment rulemaking before 

putting these interim final rules into 

effect, and that it is in the public interest 

to promulgate interim final rules. 

VII. Economic Impact and Paperwork 

Burden 

A. Summary 

These interim final rules implement 

provisions of the No Surprises Act, 

which Congress enacted as part of the 

CAA, that protect participants, 

beneficiaries, and enrollees in group 

health plans and group and individual 

health insurance coverage from surprise 

medical bills when they receive 

emergency services, non-emergency 

services from nonparticipating 

providers at certain participating 

facilities, and air ambulance services, 

under certain circumstances. 

The Departments and OPM 101 have 

examined the effects of these interim 

final 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); the 

Regulatory Flexibility Act (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); 

Executive Order 13132 (64 FR 43255, 

August 10, 1999, Federalism); and the 

Congressional Review Act (5 U.S.C. 

804(2)). 

B. Executive Orders 12866 and 13563 

Executive Order 12866 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 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 

rule: (1) Having an annual effect on the 

economy of $100 million or more in any 

one 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 must be 

prepared for major rules with 

economically significant effects (for 

example, $100 million or more in any 

one year), and a ‘‘significant’’ regulatory 

action is subject to review by OMB. The 

Departments anticipate that this 

regulatory action is likely to have 

economic impacts of $100 million or 

more in at least 1 year, and thus meets 

the definition of an ‘‘economically 

significant rule’’ under Executive Order 

12866. Therefore, the Departments have 

provided an assessment of the potential 

costs, benefits, and transfers associated 

with these interim final rules. In 

accordance with the provisions of 

Executive Order 12866, these interim 

final rules were reviewed by OMB. 


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102Pollitz K., et al., US Statistics on Surprise 

Medical Billing. JAMA. 2020;323(6):498. 

doi:10.1001/jama.2020.0065. 103 Kliff S., Surprise medical bills, the high cost 

of emergency department care, and the effects on 

patients [published online August 12, 2019]. JAMA 

Intern Med. doi:10.1001/jamainternmed.2019.3448. 

104Butler S., Sherriff N. How poor 

communication exacerbates health inequities and 

what to do about it. Brookings Institution: Report 

(February 22, 2021). https://www.brookings.edu/ 

research/how-poor-communication-exacerbateshealth-inequities-and-what-to-do-about-it/; Hamel, 

L., Lopes, L., Mun ̃ ana, C., Artiga, S., Brodie, M. 

Race, Health, and COVID–19: The Views and 

Experiences of Black Americans. Kaiser Family 

Foundation (October 2020). https://files.kff.org/ 

attachment/Report-Race-Health-and-COVID-19- 

The-Views-and-Experiences-of-BlackAmericans.pdf; and Shen M.J., Peterson E.B., 

Costas-Mun ̃iz R. et al. The Effects of Race and 

Racial Concordance on Patient-Physician 

Communication: A Systematic Review of the 

Literature. J. Racial and Ethnic Health Disparities 

5, 117–140 (2018). https://doi.org/10.1007/s40615- 

017-0350-4. 

105Taylor, J., Racism, inequality, and health care 

for African Americans. The Century Foundation: 

Report (December 19, 2019). https://tcf.org/content/ 

report/racism-inequality-health-care-africanamericans/; and Chavis, B., Op-Ed: Big insurance 

must help end surprise medical billing. 

blackpressUSA (February 24, 2020). https://

blackpressusa.com/op-ed-big-insurance-must-helpend-surprise-medical-billing/. 

106Pe ́rez-Stable E.J., El-Toukhy S., 

Communicating with diverse patients: How patient 

and clinician factors affect disparities. Patient Educ 

Couns. 2018;101(12):2186–2194. doi:10.1016/ 

j.pec.2018.08.021; McNally, M., Confronting 

disparities in access to healthcare for underserved 

populations. MedCity News (February 22, 2021). 

https://medcitynews.com/2021/02/confrontingdisparities-in-access-to-healthcare-for-underservedpopulations-in-2021/. 

1. Need for Regulatory Action 

A surprise medical bill is an 

unexpected bill from a health care 

provider or facility that occurs when a 

participant, beneficiary, or enrollee 

receives medical services from a 

provider (including a provider of air 

ambulance services) or facility that, 

generally unbeknownst to the 

participant, beneficiary, or enrollee, is a 

nonparticipating provider or facility 

with respect to the individual’s 

coverage. Surprise bills usually occur in 

situations when a patient is unable to 

choose a provider (including a provider 

of air ambulance services) or emergency 

facility and ensure that they receive care 

from only providers or emergency 

facilities that are participating for their 

coverage. A recent survey revealed that 

two-thirds of adults worry about being 

able to afford unexpected medical bills 

for themselves and their families, and 

41 percent of adults with health 

insurance received a surprise medical 

bill in the previous 2 years.102 Surprise 

bills can cause significant financial 

hardship and cause individuals to forgo 

care. A project carried out by Vox, a 

news and opinion website, which 

collected emergency department 

medical bills reported instances of 

accident victims receiving care at out-ofnetwork hospitals and receiving bills of 

over $20,000.103 These challenges may 

be more keenly experienced by minority 

and underserved communities, which 

are more likely to experience poor 

communication, underlying mistrust of 

the medical system, and lower levels of 

patient engagement than other 

populations.104 Communities 

experiencing poverty and other social 

risk factors are particularly impacted as 

surprise medical bills can negatively 

affect individuals’ abilities to eliminate 

debt and create wealth, and ultimately 

can affect a family for generations.105

Effective, culturally, and linguistically 

tailored communication at appropriate 

literacy levels, along with policies that 

address the social risk factors and other 

barriers underserved communities face 

to accessing, trusting, and 

understanding health care costs and 

coverage can reduce disparities and 

promote health equity.106

The No Surprises Act provides federal 

protections against surprise billing and 

limits out-of-network cost sharing under 

many of the circumstances in which 

surprise medical bills arise most 

frequently. These interim final rules 

implement provisions of the No 

Surprises Act that protect individuals 

from surprise medical bills for 

emergency services, air ambulance 

services furnished by nonparticipating 

providers, and non-emergency services 

furnished by nonparticipating providers 

at participating facilities in certain 

circumstances. 

2. Summary of Impacts 

The provisions in these interim final 

rules will ensure that participants, 

beneficiaries, and enrollees with health 

coverage are protected from surprise 

medical bills. Individuals with health 

coverage will gain peace of mind, 

experience a reduction in out-of-pocket 

expenses, be able to meet their 

deductible and out-of-pocket maximum 

limits sooner, and may experience 

increased access to care. Plans, issuers, 

health care providers, facilities, and 

providers of air ambulance services will 

incur costs to comply with the 

requirements in these interim final 

rules. 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, costs, 

and transfers of these interim final rules 

but have sought, where possible, to 

describe these non-quantified impacts. 

The effects in Table 1 reflect nonquantified impacts and estimated direct 

monetary costs resulting from the 

provisions of these interim final rules. 

BILLING CODE 4120–01–P 


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TABLE 1: Accounting Statement 

Benefits: 

Non-Quantified: 

• Elimination of surprise medical bills for individuals from out-of-network medical care and air 

ambulance services. 

• Reduction in financial anxiety, including anxiety associated with medical debt, for individuals with 

health coverage, due to a reduction in surprise bills. 

• Increased access to care for individuals with health coverage that may have otherwise forgone or 

neglected needed treatment due to high out-of-pocket expenses, and better health outcomes as a 

result. Potential improved health outcomes for individuals with grandfathered health coverage due to 

the ability to choose their own primary care physicians, the ability to choose a pediatrician as the 

primary care physician for children, and the ability to receive obstetrical and gynecological care 

without a referral. 

Costs: Estimate Year Discount Period 

Dollar Rate Covered 

$ 2,252.23 million 2021 7 percent 

2021-

2025 Annualized Monetized ($/year) 2021- $2,177.12 million 2021 3 percent 2025 

Quantitative: 

• Costs to issuers and third-party administrators (TPAs) to comply with the requirements related to the 

recognized amount and QPA, estimated to be one-time costs of approximately $4,958 million to 

make the necessary information technology system changes in 2021 and ongoing operational costs of 

$2,047 million in 2022 and $724 million annually from 2023 onwards. 

• Costs to issuers and TP As to revise standard operating procedures and provide training to staff, 

estimated to be one-time costs of approximately $12.1 million in 2021. 

• Costs to health care facilities and emergency facilities to revise standard operating procedures and 

provide training to staff, estimated to be one-time costs of$117.2 million in 2021. 

• Costs to providers of air ambulance services to revise standard operating procedures and provide 

training to staff, estimated to be one-time costs of$517,086 in 2021. 
Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 36921 

BILLING CODE 4120–01–C 

a. Prevalence of Surprise Billing 

There is extensive research on the 

incidence of out-of-network providers 

and facilities billing patients for items 

and services furnished at in-network 

and out-of-network health care facilities. 

Most of these studies analyze claims 

data to identify cases that may 

potentially result in a surprise medical 

bill. The studies reveal that surprise 

billing is a significant issue for 

consumers across the country and 

across all types of coverage. For 

example, an analysis of claims data from 

large group health plans revealed that 

while rates varied by state, 18 percent 

of emergency department visits, on 

average, resulted in individuals 

receiving a surprise medical bill in 


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• Costs to issuers and TPAs to share information related to QPA, estimated to be approximately $55.4 

million annually starting in 2022. 

• Costs to self-insured plans opting in to state law to include disclosure in plan documents, estimated to 

be one-time costs of approximately $50,708 in 2022. 

• Costs to grandfathered health plans to provide the notice ofright to designate a primary care provider, 

estimated to be $4.5 million in 2022. 

• Costs to nonparticipating providers and nonparticipating emergency facilities to comply with 

requirements related to notice and consent, recordkeeping, and notice to plans and issuers, estimated 

to be one-time costs of approximately $22.6 million in 2021 and ongoing costs of$117.2 million 

annually starting in 2022. 

• Costs to individuals to read and understand the notice from nonparticipating providers and 

nonparticipating emergency facilities, estimated to be approximately $99.1 million annually, starting 

in 2022. 

• Costs to health care providers and facilities to provide disclosures on patient protections against 

balance billing, estimated to be one-time costs of approximately $6.8 million in 2021 and $2.5 million 

annually starting in 2022. 

• Costs to states to develop state-specific language for patient disclosures to be provided by health care 

providers and facilities, estimated to be one-time costs of approximately $10,732 in 2021. 

• Costs to health care facilities to enter into agreements for the facilities to provide the disclosure on 

patient protection on behalf of the providers, estimated to be one-time costs of approximately $6.4 

million in 2021. 

• Costs to plans and issuers to provide disclosure on patient protections to participants, beneficiaries 

and enrollees, estimated to be approximately $699,245 in 2021 and approximately $23.4 million 

annually starting in 2022. 

• Costs to individuals and providers to submit complaints related to surprise bills, estimated to be 

approximately $97,452 annually starting in 2022. 

• Costs to the federal government to build a system to receive complaints and expand existing systems, 

estimated to be one-time costs of approximately $19 million in 2021; and ongoing costs to process 

complaints, estimated to be approximately $1.6 million in 2021, $9.9 million in 2022, $10.1 million 

in 2023 and $10.3 million in 2024 and subsequent years. 

Transfers: 

Non-Quantified: 

• Increase in health care expenditures if health care utilization increases . 

Non-Quantified: 

• Transfer from plans and issuers to participants, beneficiaries, and enrollees because plans and issuers 

will now pay additional amounts for some services provided by nonparticipating providers and 

facilities and participants, beneficiaries, and enrollees will experience a reduction in out-of-pocket 

expenditures. 

• Potential transfer from providers, including air ambulance providers, and facilities to the participant, 

beneficiary or enrollee if the out-of-network rate collected is lower than what would have been 

collected had the provider or facility balance billed the participant, beneficiary or enrollee. 

More detailed analysis forthcoming in future rulemaking: 

• Potential reduction in negotiated rates for certain health care services and air ambulance services, 

leading to reductions in cost sharing for individuals with health coverage. 

• Potential change in premiums depending on the impact on provider payments . 

• Potential transfer from individuals to the federal government in the form of reduced premium tax 

credits if premiums decrease as a result of these interim fmal rules. 

• Potential transfer from the federal government to individuals in the form of increased premium tax 

credits if premiums increase as a result of these interim fmal rules. 
36922 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

107Pollitz K., et al., An examination of surprise 

medical bills and proposals to protect consumers 

from them, Peterson-KFF Health System Tracker, 

February 10, 2020, https://

www.healthsystemtracker.org/brief/anexamination-of-surprise-medical-bills-andproposals-to-protect-consumers-from-them-3/. 108Pollitz, K. et al., Surprise Bills Vary by 

Diagnosis and Type of Admission, Peterson-KFF 

Health System tracker, December 9, 2019, https:// 

www.healthsystemtracker.org/brief/surprise-billsvary-by-diagnosis-and-type-of-admission/. 

109 Kennedy K. et al., Surprise out-of-network 

medical bills during in-network hospital 

admissions varied by state and medical specialty, 

2016, Health Care Cost Institute, March 28, 2019, 

https://healthcostinstitute.org/out-of-networkbilling/oon-physician-bills-at-in-network-hospitals. 

110 Garmon C. and Chatock B., One In Five 

Inpatient Emergency Department Cases May Lead to 

Surprise Bills, Health Affairs 36, No. 1 (2017): 177– 

181. 

111Sun E.C., Mello M.M., Moshfegh J., Baker LC. 

Assessment of Out-of-Network Billing for Privately 

Insured Patients Receiving Care in In-Network 

Hospitals. JAMA Intern Med. 2019;179(11):1543– 

1550. doi:10.1001/jamainternmed.2019.3451. 

112Chhabra K.R. et al., Out-of-Network Bills for 

Privately Insured Patients Undergoing Elective 

Surgery With In-Network Primary Surgeons and 

Facilities, 2020;323(6):538–547. doi:10.1001/ 

jama.2019.21463. 

113Cooper Z. et al., Out-of-Network Billing And 

Negotiated Payments for Hospital-Based Physicians, 

Health Affairs 39, No. 1, 2020. doi: 10.1377/ 

hlthaff.2019.00507. 

114 Duffy E. et al., Prevalence And Characteristics 

Of Surprise Out-of-Network Bills from Professionals 

in Ambulatory Surgery Centers, Health Affairs 39, 

No. 5, 2020. doi:10.1377/hlthaff.2019.01138. 

115Sun E. et al., Assessment of Out-of-Network 

Billing for Privately Insured Patients Receiving Care 

in In-Network Hospitals. JAMA Intern Med. 

2019;179(11):1543–1550. 

116American Association of Medical Colleges. 

‘‘Active Physicians by Age and Specialty.’’ 

Physician Specialty Data Report. (December 2019). 

https://www.aamc.org/data-reports/workforce/

interactive-data/active-physicians-age-andspecialty-2019. The American Association of 

Medical Colleges estimated that among the 935,136 

active physicians in the U.S. in 2019, 45,134 were 

emergency physicians (4.8%). 

117Chhabra K.R. et al., Out-of-Network Bills for 

Privately Insured Patients Undergoing Elective 

Surgery With In-Network Primary Surgeons and 

Facilities, 2020;323(6):538–547. doi:10.1001/ 

jama.2019.21463. 

2017. The out-of-network charges came 

either from facilities or providers, or 

both, though the majority of the charges 

were from individual providers, rather 

than facilities.107 In addition, in 2017, 

16 percent of inpatient stays at innetwork facilities resulted in out-ofnetwork charges, though the rate of outof-network billing varied by state and 

also between rural and urban areas. 

Another study revealed that admissions 

at in-network hospitals for surgery and 

mental health/substance use disorders 

are more likely to include out-ofnetwork charges, and women with largeemployer coverage who have had a 

mastectomy at an in-network facility 

were also more likely (21 percent) to be 

billed for out-of-network charges.108 An 

analysis of commercial claims data for 

in-network hospital admissions in 2016 

found that out-of-network claims 

occurred in 14.5 percent of admissions, 

with wide variation between states.109

A study using 2007–2014 claims data 

for group health plans indicated that in 

2014, 20 percent of hospital inpatient 

admissions that originated in the 

emergency department, 14 percent of 

outpatient emergency department visits, 

and 9 percent of elective inpatient 

admissions were likely to result in 

surprise medical bills. In approximately 

40 percent of inpatient admissions and 

more than half of outpatient cases with 

surprise bills, issuers paid the claims at 

an in-network level, so the patients were 

potentially billed for the remaining 

amount.110 Another study using claims 

data from a large issuer for the period 

2010–2016 found that over 39 percent of 

emergency department visits to innetwork hospitals resulted in an out-ofnetwork bill, and that the incidence 

increased from 32.3 percent in 2010 to 

42.8 percent in 2016. The average 

potential amount of the surprise 

medical bill also increased from $220 in 

2010 to $628 in 2016. During the same 

time period, 37 percent of inpatient 

admissions to in-network hospitals 

resulted in at least one out-of-network 

bill, increasing from 26.3 percent in 

2010 to 42 percent in 2016 and the 

average potential amount of the surprise 

medical bill increased from $804 to 

$2,040.111

For elective surgeries, analysis of 

claims data from a large issuer revealed 

that between 2012 and 2017, an out-ofnetwork bill occurred in over 20 percent 

of cases, when the primary surgeon and 

facility were in-network, resulting in 

potential balance bills ranging from 

$1,255 to $3,449. Occurrences of out-ofnetwork bills were associated with 

significantly higher total charges and 

out-of-pocket costs for patients, 

compared to cases without out-ofnetwork bills.112

Researchers have also tried to 

estimate the amounts of surprise bills 

patients receive. A study using 2015 

claims data from a large issuer for 

services provided at in-network 

hospitals concluded that average 

potential balance bills from 

anesthesiologists, pathologists, 

radiologists, and assistant surgeons were 

$1,171, $177, $115, and $7,420, 

respectively.113 Another study 

analyzing 2014–2017 data related to 

ambulatory surgical centers from three 

large issuers revealed that in 10 percent 

of cases, patients treated at in-network 

facilities received care from out-ofnetwork providers, and patients may 

have received surprise bills in 8 percent 

of cases. On average, the amount of the 

surprise medical bill was $1,141, and 

the amount increased by 81 percent over 

the period, from $819 in 2014 to $1,483 

in 2017.114

Surprise billing is often associated 

with certain physician specialties, 

especially those whose services are not 

actively ‘‘shoppable’’ by consumers. 

Researchers analyzing claims data from 

a large issuer for the period 2010–2016 

found that for emergency department 

visits, out-of-network bills arose 

frequently within the context of medical 

transport encounters (resulting in outof-network bills in 85.6 percent of 

incidents involving ambulances) and 

the following physician specialties: 

Emergency medicine (32.6 percent), 

anesthesiology (22.8 percent), internal 

medicine (23.8 percent), cardiology 

(20.9 percent), family practice (20.1 

percent), radiology (18.1 percent), 

general surgery (13.3 percent), and 

pediatrics (8.4 percent). For inpatient 

admissions at in-network hospitals, in 

addition to medical transport (81.6 

percent of cases involving ambulances), 

the study found that out-of-network 

bills arose most commonly with the 

following physician specialties: 

emergency medicine (42.6 percent of 

total inpatient admissions with at least 

1 claim submitted by the given 

specialty), internal medicine (25.3 

percent), radiology (22.6 percent), 

pathology (22.2 percent), cardiology 

(19.6 percent), anesthesiology (19.3 

percent), family practice (18.2 percent), 

and obstetrics and gynecology (0.8 

percent).115 While emergency medicine 

physicians make up only approximately 

5 percent of the total number of active 

physicians,116 these studies show that 

emergency medical physicians have the 

highest percentage of out-of-network 

claims. Analysis of claims data for 

elective surgeries from a large issuer 

revealed that between 2012 and 2017, 

out-of-network claims were commonly 

associated with anesthesiologists (in 37 

percent of cases), surgical assistants (37 

percent), pathologists (22 percent), 

radiologists (7 percent), and medical 

consultants (3 percent).117 Another 

study analyzing commercial claims data 

for in-network inpatient admissions in 

2016 found that some specialties with 

large shares of out-of-network bills were 

anesthesiology (16.5 percent), primary 

care (12.6 percent), and emergency 

medicine (11 percent) and that the 

specialties that most often billed as outof-network at in-network facilities were 

independent labs (22.1 percent), 

followed by emergency medicine (12 


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118 Kennedy K. et al., Surprise out-of-network 

medical bills during in-network hospital 

admissions varied by state and medical specialty, 

2016, Health Care Cost Institute, March 28, 2019, 

https://healthcostinstitute.org/out-of-networkbilling/oon-physician-bills-at-in-network-hospitals. 119 Duffy E. et al., Prevalence And Characteristics 

Of Surprise Out-of-Network Bills from Professionals 

in Ambulatory Surgery Centers, Health Affairs 39, 

No. 5, 2020. doi:10.1377/hlthaff.2019.01138. 120Song, Z. et al., JAMA, Out-of-Network 

Laboratory Test Spending, Utilization, and Prices in 

the US, JAMA. 2021;325(16):1674–1676. 

doi:10.1001/jama.2021.0720. 

121 Duffy, E. et al., ‘‘Policies to Address Surprise 

Billing Can Affect Health Insurance Premiums.’’ 

The American Journal of Managed Care 26.9 (2020): 

401–404. 

122Cooper, Z. et al., Surprise! Out-Of-Network 

Billing For Emergency Care in the United States, 

NBER Working Paper 23623, 2017, available at 

https://www.nber.org/papers/w23623. 

123 GAO (2019) Report to Congressional 

Committees. Air Ambulance. Available Data Show 

Privately-Insured Patients Are at Financial Risk 

(GAO–19–292) available at: https://www.gao.gov/

assets/700/697684.pdf. The data analyzed included 

claims from over 50 payers in each year (including 

both fully- and self-insured plans) and accounted 

for 110.1 million covered lives in 2012 and 145.0 

million covered lives in 2017. 

124 GAO (2017) Report to the Committee on 

Transportation and Infrastructure, House of 

Representatives. Air Ambulance. Data Collection 

and Transparency Needed to Enhance DOT 

Oversight. (GAO–17–637) available at: https://

www.gao.gov/assets/gao-17-637.pdf. 

125Consumer Union. Up in the Air: Inadequate 

Regulation for Emergency Air Ambulance 

Transportation. Health Policy Report, March 2017. 

126 GAO (2019) Report to Congressional 

Committees. Air Ambulance. Available Data Show 

Privately-Insured Patients Are at Financial Risk 

(GAO–19–292) available at: https://www.gao.gov/

assets/700/697684.pdf. 

127Missouri Department of Insurance, Financial 

Institutions & Professional Registration. Policy 

Brief: Health Coverage for Air Ambulance 

Transportation. January 2019; and New Mexico 

Office of the Superintendent of Insurance. Air 

Ambulance Memorial Study Report. January 2017. 

Available at: https://www.nmlegis.gov/handouts/

ERDT%20083117%20

Item%208%20NM%20Superintendent%20of

%20Insurance%20Air%20Ambulance

%20Memorial%20Study%20Report.pdf. 

128Brown, E.C.F. et al., Out-of-Network Air 

Ambulance Bills: Prevalence, Magnitude, and 

Policy Solutions. The Milbank Quarterly, Vol. 98, 

No. 3, 2020 (pp. 747–774). 

129Chhabra, H.R., McGuire, K., Scott, J.W., 

Nuliyalu, U., and Ryan, A. Most Patients 

Undergoing Ground And Air Ambulance 

Transportation Receive Sizable Out-Of-Network 

Bills. Health Affairs 39, NO. 5 (2020): 777–782. 

percent).118 Another study analyzing 

2014–2017 data related to ambulatory 

surgical centers from three large issuers 

revealed that out-of-network bills often 

came from anesthesiologists (44 percent 

of bills), certified registered nurse 

anesthetists (25 percent), independent 

laboratories (10 percent) and 

pathologists (3 percent).119

As discussed earlier in this preamble, 

multiple studies have shown that a large 

percentage of out-of-network bills come 

from independent laboratories. An 

analysis of 2008–2016 claims data for 

individuals with group health insurance 

coverage found that there was an 

increase in the share of out-of-network 

laboratory spending, and that utilization 

and prices for out-of-network laboratory 

tests increased relative to in-network 

tests during that time period. The 

number of out-of-network laboratory 

tests increased by 18.9 percent each 

year, while the number of in-network 

laboratory tests increased by 2.3 percent 

per year. The study authors speculated 

that large suppliers of laboratory 

services have sufficient market power to 

set high out-of-network prices and 

utilization by clinicians may be 

influenced by financial incentives.120

Providers who choose to remain outof-network usually do so because it does 

not affect their patient volume. The 

ability to balance bill is often used as 

leverage by such providers to obtain 

higher in-network payments when they 

join plans’ or issuers’ networks. Higher 

in-network payments lead to higher 

premiums,121 higher cost sharing for 

consumers, and increased health care 

expenditures overall. For example, 

hospitals often outsource the staffing of 

their emergency departments to outside 

firms. A study on out-of-network billing 

in emergency departments looked at the 

behavior of the two largest emergency 

department staffing firms in the United 

States.122 The study found that one firm 

exits networks when it enters into a 

contract with a hospital, and bills as an 

out-of-network provider. The other firm 

temporarily exits networks and later 

rejoins after negotiating higher innetwork payments. 

Utilizations of air ambulance services 

also frequently result in surprise bills. A 

study by the Government 

Accountability Office (GAO) analyzed 

private health insurance claims from 

2012 and 2017 to describe the extent to 

which air ambulance transports are outof-network.123 This study analyzed 

claims data from approximately 24,100 

transports in 2012 and another 33,800 

transports in 2017 from all 50 states and 

the District of Columbia. The study 

found that in 2012, 75 percent of 

transports were out-of-network and in 

2017, 69 percent were out-of-network. 

The GAO also reported that the median 

price charged by providers of air 

ambulance services had increased from 

a rate of $22,100 for rotary-wing and 

$24,900 for fixed-wing in 2012 to 

approximately $36,400 for rotary-wing 

and $40,600 for a fixed-wing transport 

in 2017. The changes in price between 

2012 and 2017 indicate a consistent rate 

of increase as a previously published 

report by the GAO also noted that 

between 2010 and 2014, the median 

prices charged by providers of air 

ambulance services for rotary-wing 

transports approximately doubled.124

Another study found that for one of the 

largest providers of air ambulance 

services (with a market share of 

approximately 24 percent) the average 

charge increased from $17,262.23 in 

2009 to approximately $50,199.24 by 

2016.125

As the costs associated with air 

ambulance transports continue to 

increase, the GAO reported that 

providers of air ambulance services 

report entering into more network 

contracts.126 However, additional 

analyses find that many providers of air 

ambulance services, particularly those 

not affiliated with a hospital, do not 

participate in insurer networks and have 

little incentive to do so, further noting 

that network participation remains low 

and provider avoidance of insurance 

network participation combined with 

aggressive collection practices has been 

described as a business strategy of some 

providers of air ambulance services.127

A study using 2014–2017 data from 

three large issuers to evaluate the share 

of air ambulance claims that are out-ofnetwork and the prevalence and 

magnitude of potential surprise balance 

bills, found that 77 percent of air 

ambulance transports were out-ofnetwork and approximately 40 percent 

of air ambulance transports resulted in 

potential balance bills. The bills 

averaged approximately $19,851 in 

addition to the standard out-of-network 

cost sharing, which averaged $561. The 

study also found that with out-ofnetwork rotary-wing claims, issuers 

paid the providers’ full billed charges 

approximately 48 percent of the time, at 

an average of $35,733 and that for innetwork providers, billed charges were 

paid in full only 7 percent of the time. 

They noted that self-insured plans paid 

out-of-network claims in full 50 percent 

of the time, whereas fully insured plans 

paid claims in full 38 percent of the 

time.128

A study using claims data from a large 

issuer to evaluate the potential impact 

of out-of-network emergency medical 

transport services from 2013 to 2017 

identified a total of 1,498,600 

ambulance encounters of which 29,972 

(2 percent) were air ambulance 

encounters, and of these 26,375 (88 

percent) were rotary-wing and 3,597 (12 

percent) were fixed-wing. The study 

further noted that the prevalence of 

potential surprise medical billing was 

an estimated 73 percent for rotary-wing 

(18,463) and 70 percent (2,518) for 

fixed-wing transports.129 The study 

determined that the potential surprise 


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36924 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

130This study found that potential surprise bills 

in the study period increased from $41 million in 

2013 to $143 million in 2017. The study further 

found that the median potential surprise bill from 

air transportation nearly doubled from $14,356 to 

$27,513, or an increase of 15 percent annually, on 

average, after adjustment for inflation and that the 

prevalence ranged from 25 percent (Minnesota) to 

93 percent (Massachusetts) with the size of 

potential surprise bills varying widely. 

131Consumer Union. Up in the Air: Inadequate 

Regulation for Emergency Air Ambulance 

Transportation. Health Policy Report, March 2017. 

132 GAO (2019) Report to Congressional 

Committees. Air Ambulance. Available Data Show 

Privately-Insured Patients Are at Financial Risk 

(GAO–19–292) available at: https://www.gao.gov/ 

assets/700/697684.pdf. 

133Cooper, Z. et al., Surprise! Out-Of-Network 

Billing For Emergency Care in the United States, 

NBER Working Paper 23623, 2017, available at 

https://www.nber.org/papers/w23623. 

134 Duffy, E. et al., ‘‘Policies to Address Surprise 

Billing Can Affect Health Insurance Premiums.’’ 

The American Journal of Managed Care 26.9 (2020): 

401–404. 

135Cooper Z. et al., Out-of-Network Billing And 

Negotiated Payments for Hospital-Based Physicians, 

Health Affairs 39, No. 1, 2020. doi: 10.1377/ 

hlthaff.2019.00507. 

136 Garmon C. and Chatock B. One In Five 

Inpatient Emergency Department Cases May Lead to 

Surprise Bills, Health Affairs 36, No. 1 (2017): 177– 

181. 

137Board of Governors of the Federal Reserve 

System, Report on the Economic Well-Being of U.S. 

Households in 2019—May 2020, https://

www.federalreserve.gov/publications/2020- 

economic-well-being-of-us-households-in-2019- 

dealing-with-unexpected-expenses.htm. 

138Hamel, Liz et al., The Burden of Medical Debt: 

Results from the Kaiser Family Foundation/New 

York Times Medical Bills Survey, The Henry J. 

Kaiser Family Foundation, 2016, https://

www.kff.org/wp-content/uploads/2016/01/8806-theburden-of-medical-debt-results-from-the-kaiserfamily-foundation-new-york-times-medical-billssurvey.pdf. 

billing amount for the study period 

totaled approximately $456 million for 

air ambulance services, with a yearly 

average of $91 million and a median 

potential surprise medical bill of 

approximately $27,513.130

A number of studies have reviewed 

state investigations or consumer 

complaints to obtain information on the 

amount of balance billing, and costs, 

associated with air ambulance 

transports. One study reviewed state 

investigations and found that in North 

Dakota, of 20 complaints against one 

provider of air ambulance services that 

charged a total of $884,244 (an average 

of $44,212 per flight), 33 percent of the 

charges were covered by insurance. In 

an additional nine states, the study 

found that 55 complaints resulted in a 

combined $3.8 million in charges, or an 

average of $77,000 per trip; and in 

Montana, the study found the average 

out-of-network rate, of the 19 bills 

analyzed, was $53,397.131 The GAO 

further analyzed 60 consumer 

complaints related to air ambulance 

services from Maryland and North 

Dakota and found that from 24 

complaints in Maryland the balance 

billed amounts ranged from $12,300 to 

$52,000 and from 36 complaints in 

North Dakota the balance bills ranged 

from $600 to $66,000.132

b. Impact of Surprise Medical Bills 

A study of out-of-network billing in 

emergency departments considered how 

some providers use the ability to bill 

out-of-network to increase payments. 

The study found that charges from outof-network physicians in emergency 

departments were 637 percent of 

Medicare payments, which is 2.4 times 

higher than in-network payment rates, 

on average, for identical services. The 

study also found that emergency 

department physicians were paid innetwork rates of 266 percent of 

Medicare payments, a higher percentage 

of Medicare payment than most other 

specialists.133

Another study using 2017 claims data 

from 3 large issuers looked at 

expenditures on ancillary and 

emergency services that are most often 

associated with surprise bills: 

emergency medicine professionals, 

radiologists, anesthesiologists, 

pathologists, emergency outpatient 

facilities, and emergency ground 

ambulance services.134 The study 

concluded that a 15 percent reduction 

in average payments for these services 

would lower premiums by 1.4 percent 

to 1.6 percent; while a reduction in 

average payments to 150 percent of 

Medicare rates would likely lower 

premiums by 4.5 percent to 5.1 percent. 

The authors estimated that for all 

consumers with commercial insurance 

coverage, 1.6 percent and 5.1 percent 

reductions in premiums would result in 

total annual savings of $12 billion and 

$38 billion, respectively. 

A study using 2015 claims data from 

a large issuer for services provided at innetwork hospitals considered the 

impact of policies that would prevent 

anesthesiologists, pathologists, 

radiologists, and assistant surgeons from 

balance billing and would reduce their 

in-network payments to 164 percent of 

Medicare payments. The study 

concluded that such a reduction in 

payment would result in savings equal 

to 13.4 percent of spending on 

physicians and 3.4 percent of spending 

for people with employer-sponsored 

coverage, approximately $40 billion 

annually.135

Surprise bills result in higher out-ofpocket expenses and cause financial 

anxiety and medical debt for 

consumers.136 As discussed earlier in 

this preamble, the impact is most keenly 

felt by those communities experiencing 

poverty and other social risk factors. 

Potential surprise bills can vary in size, 

and are often large, as concluded by the 

studies discussed previously. A Federal 

Reserve report found that about 37 

percent of adults in the U.S. in 2019 

would not be able to pay an unexpected 

expense of $400 using cash or its 

equivalent.137 In a 2016 survey, among 

the respondents with health coverage 

who reported having difficulty paying 

medical bills, 75 percent reported that 

copayments, deductibles or coinsurance 

were more than they could afford and 

32 percent had received out-of-network 

bills that insurance either did not cover 

or only partially covered.138 Of those 

who had difficulty paying out-ofnetwork bills, 69 percent said that it was 

a surprise bill and they had not been 

aware that the provider was out-ofnetwork for their plan. Respondents also 

reported that bills from emergency room 

visits and hospitalizations often made 

up the largest share of the amount they 

owed. In the survey, respondents 

reported making sacrifices such as 

reducing expenditures on food, 

clothing, and basic household items, 

using up savings, working additional 

jobs or hours, borrowing, changing 

living arrangements, and reducing or 

delaying vacations or major household 

purchases. Survey respondents also 

reported being contacted by collection 

agencies. Survey results indicated that 

37 percent of individuals with 

household incomes less than $50,000 

(compared to 14 percent with incomes 

of $100,000 or more), and 47 percent of 

individuals with a disability (compared 

to 22 percent of individuals without 

one) had difficulties paying medical 

bills, demonstrating a disproportionate 

impact on these populations. 

In addition, out-of-network cost 

sharing and surprise bills usually do not 

count towards an individual’s 

deductible or maximum out-of-pocket 

expenditure limit. Therefore, 

individuals with surprise bills may have 

difficulty reaching those limits, even 

though they may have high health care 

expenses. This can result in reduced 

access to care, since high medical 

expenses can cause individuals to delay 

or forgo medical care. In a 2017 survey, 

64 percent of respondents reported that 

they had delayed care in the last year 

because of high medical expenses and 

44 percent stated that they would forgo 

care if their out-of-pocket expenses 


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139Heath, Sara, 64% of Patients Avoid Care Due 

to High Patient Healthcare Costs, Patient 

Engagement HIT, 2018, https://

patientengagementhit.com/news/64-of-patientsavoid-care-due-to-of-high-patient-healthcare-costs. 140Amin, K. et al., How Does Cost Affect Access 

to Care?. Peterson-KFF Health System Tracker. 

January 5, 2021. https://

www.healthsystemtracker.org/chart-collection/costaffect-access-care/#item-start. 141 Gallup and West Health, The U.S. Healthcare 

Cost Crisis. 2019. https://news.gallup.com/poll/

248081/westhealth-gallup-us-healthcare-costcrisis.aspx. 

142Chartock, B. et al., Consumers’ Responses to 

Surprise Medical Bills in Elective Situations, Health 

Affairs 38, No. 3 (2019): 425–430. 

143North Carolina Rural Health Research 

Program. Rural Health Snapshot (2017). May 2017. 

https://www.shepscenter.unc.edu/wp-content/

uploads/dlm_uploads/2017/05/Snapshot2017.pdf. 

144American Hospital Association, Fast Facts on 

U.S. Hospitals, 2021. https://www.aha.org/

statistics/fast-facts-us-hospitals. 

145Cecil G. Sheps Center for Health Services 

Research, UNC. Rural Hospital Closures. https://

www.shepscenter.unc.edu/programs-projects/ruralhealth/rural-hospital-closures/. 

146Haer, A., Senate Bill 1264: The Texan 

Template for the National Fight Against Balance 

Billing. Texas Law Review, 99(4), 813–838 (2021). 

147Hinsdale, J.G. Report of the Council on 

Medical Services: Air Ambulance Regulations and 

Payments. American Medical Association. (2018), 

available at: https://www.ama-assn.org/system/

files/2018-12/i18-cms-report2.pdf. 

148Air Evac Lifeteam. https://lifeteam.net/historyand-mission/#:∼:text=Approximately%2090

%20percent%20of%20Air,are%20based%20in

%20rural%20areas. 

149 GAO (2019) Report to Congressional 

Committees. Air Ambulance. Available Data Show 

Privately-Insured Patients Are at Financial Risk 

(GAO–19–292), available at: https://www.gao.gov/ 

assets/700/697684.pdf. 

150The Commonwealth Fund, State Balancebilling Protections. https://

www.commonwealthfund.org/sites/default/files/

2021-03/Hoadley_state_balance_billing_

protections_table_02052021.pdf. 

151See https://www.transportation.gov/

individuals/aviation-consumer-protection/airambulance-service. 

152Missouri Department of Insurance, Financial 

Institutions & Professional Registration. Policy Brief: 

Health Coverage for Air Ambulance Transportation. 

January 2019. 

153 49 U.S.C. 40102. 

154 49 U.S.C. 41713. 

155 49 U.S.C. 41713(b). 

156Cooper, Z. et al., Surprise! Out-Of-Network 

Billing For Emergency Care in the United States, 

NBER Working Paper 23623, 2017, available at 

https://www.nber.org/papers/w23623. 

would be more than $500.139 Another 

study reported that 7 percent of adults 

with health insurance delayed or went 

without care in 2019 because of cost 

reasons and adults who are in worse 

health are twice as likely to delay or 

forgo care because of cost reasons.140

This study also reported that while 10.5 

percent of all adults reported delaying 

or forgoing medical care due to costs, 

15.1 percent of Hispanic adults and 13 

percent of Non-Hispanic Black adults 

and 17.7 percent of adults with income 

below 200 percent of the federal poverty 

level reported the same, showing the 

disparate effect of high cost of care on 

these communities. Another survey 

concluded that 65 million adults had a 

health issue but did not seek treatment 

because of cost reasons in 2018.141

In addition to causing financial 

hardship, surprise medical bills may 

also cause consumers to change 

providers in the future. Analysis of a 

large national sample of claims for 

obstetrics patients who had two 

deliveries covered by insurance found 

that 11 percent of patients received a 

surprise medical bill for their first 

delivery and were 13 percent more 

likely to switch hospitals for the second 

delivery compared to patients who did 

not.142

Individuals living in rural areas 

experience socioeconomic and health 

related disparities.143 Rural areas have 

fewer primary care and mental health 

providers and higher rates of 

preventable hospitalizations. Currently, 

there are 1,805 rural hospitals in the 

United States,144 with 137 rural 

hospitals having closed since 2010.145

Individuals who live in rural or 

geographically remote areas often must 

rely on air ambulance services for 

transfer to facilities with equipment and 

expertise to treat serious medical 

conditions. Often these transports are 

costly due to lack of options for innetwork providers available to provide 

lifesaving services.146 It is estimated 

that a quarter of Americans, 

approximately 85 million people, are 

unable to access health care in less than 

an hour of travel time without an air 

ambulance, and air ambulances may be 

the only viable means of transporting 

patients to the health care center they 

need.147 One air ambulance provider 

estimates that 90 percent of their 

transports originate from rural areas, a 

defined by CMS.148 The GAO found that 

about 60 percent of rotary-wing bases 

added between 2012 and 2017 were 

located in rural areas, and about half of 

fixed-wing bases added between 2012 

and 2017 were rural.149 As a result of 

the growing reliance on air ambulance 

services, rural populations are 

disproportionately affected by high 

costs of air ambulance services. 

c. Existing State Laws Regarding 

Balance Billing 

As of February 5, 2021, 33 states have 

enacted legislation that provides some 

protection for consumers with regard to 

balance bills.150 Laws vary by state; 

there are differences in the types of 

networks, plans, facilities, and 

providers that are subject to regulations, 

and in payment standards. While most 

of these states prohibit balance billing 

for emergency services, many of them 

also prohibit balance billing for certain 

non-emergency care furnished at innetwork hospitals. It is possible that 

states may enact new legislation or 

modify existing legislation in response 

to the passage of the No Surprises Act 

and these implementing regulations. 

Even within a state that has enacted 

such protections, those protections 

typically apply only to individuals 

enrolled in group or individual health 

insurance coverage, as ERISA generally 

preempts state laws that regulate selfinsured group health plans sponsored 

by private employers. (Some state laws 

allow ERISA-covered plans to opt in to 

the consumer protections and process 

for setting payment under the state law.) 

In addition, states are limited in their 

ability to address surprise bills that 

involve out-of-state providers. 

The air ambulance industry currently 

functions and operates within the health 

care system unlike any other entity or 

service, only somewhat due to the 

unique nature of the service. There are 

limited avenues for states and the U.S. 

Department of Transportation (DOT) to 

regulate their operations. States and the 

DOT have limited authority under the 

ADA to regulate the prices, routes, or 

services of an air carrier, including an 

air ambulance operator, in air 

transportation.151 The intent of the ADA 

was to allow the prices of air 

transportation services to be controlled 

by market forces.152 The ADA defines 

an ‘‘air carrier’’ as ‘‘a citizen of the 

United States undertaking by any 

means, directly or indirectly, to provide 

air transportation;’’ defining ‘‘air 

transportation’’ to include interstate air 

transportation.153 The ADA effectively 

limits the ability of states to regulate the 

prices, routes, or services of air carriers 

that provide transportation services,154

explicitly stating that states ‘‘may not 

enact or enforce a law, regulation, or 

other provision having the force and 

effect of law related to a price, route, or 

service of an air carrier that may provide 

air transportation.’’ 155 The Departments 

are not aware of any state laws 

regulating or limiting surprise billing or 

other price control measures with regard 

to air ambulance providers or the air 

ambulance industry. 

State laws appear to have succeeded 

in providing some protection to 

consumers from balance billing. A study 

analyzing the impact of New York 

State’s law concluded that the law 

resulted in a 34 percent reduction in 

surprise billing in the state and lowered 

in-network emergency department 

physician payments by 9 percent.156 In 


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36926 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

157New York State Department of Financial 

Services. New York’s Surprise Out-of-Network 

Protection Law: Report on the Independent Dispute 

Resolution Process. September 2019. 158State of New Jersey Department of Banking 

and Insurance. The Out-of-network Consumer 

Protection, Transparency, Cost Containment, and 

Accountability Act (Pub. L. 2018, c. 32) Data 

Reporting. As of January 31, 2021. https://

www.state.nj.us/dobi/division_insurance/ 

oonarbitration/data/210131report.html. 159Health Access California. Patients Protected, 

Providers Paid: Data From Three Years of 

California’s Compromise to Stop Surprise Medical 

Bills. September 2019. https://health-access.org/wpcontent/uploads/2019/09/ha-factsheet-AB72reportfinal.pdf. 160Adler, L. et al. California Saw Reduction In 

Out-Of-Network Care From Affected Specialties 

After 2017 Surprise Billing law. U.S.C.-Brookings 

Schaeffer Initiative for Health Policy, September 26, 

2019. https://www.brookings.edu/blog/uscbrookings-schaeffer-on-health-policy/2019/09/26/ 

california-saw-reduction-in-out-of-network-carefrom-affected-specialties-after-2017-surprise-billinglaw/. 

161 Kliff S. Surprise medical bills, the high cost 

of emergency department care, and the effects on 

patients [published online August 12, 2019]. JAMA 

Intern Med. doi:10.1001/jamainternmed.2019.3448. 

162Wingerter, Megan. $64K Air Ambulance Tab 

Shows Limits of Surprise Billing Law. Claims 

Journal. January 4, 2021. https://

www.claimsjournal.com/news/national/2021/01/ 

04/301271.htm. 

163Herman, Bob. Billing squeeze: Hospitals in 

middle as insurers and doctors battle over out-ofnetwork charges. Modern Healthcare, August 29, 

2015. https://www.modernhealthcare.com/article/ 

20150829/MAGAZINE/308299987/billing-squeezehospitals-in-middle-as-insurers-and-doctors-battleover-out-of-network-charges. 

addition, between the implementation 

of the law in March 2015 and the end 

of 2018, the law saved individuals in 

the state over $400 million with respect 

to emergency services.157 These savings 

were partly due to a reduction in costs 

associated with emergency services and 

a greater incentive to participate in 

provider networks. In New Jersey, 

issuers experienced a reduction in costs 

associated with emergency and 

inadvertent out-of-network claims since 

the state law took effect.158 The total 

spending on involuntary out-of-network 

services were reduced by 56 percent for 

issuers in the individual market and by 

38 percent for the issuers in the small 

group market. A report on California 

law concluded that patients were being 

protected from surprise medical bills in 

the state and that issuers had broader 

networks such that 80 percent to 100 

percent of their hospitals and health 

care facilities had no nonparticipating 

providers practicing there.159 A study 

on the impact of California’s surprise 

billing law analyzed claims data for 

provider specialties most affected by the 

law (anesthesiology, diagnostic 

radiology, pathology, assistant surgeons, 

and neonatal-perinatal medicine) for the 

pre-implementation period from January 

2014 to June 2017 and the postimplementation period from July 2017 

to December 2018.160 The study 

concluded that the share of services 

delivered out-of-network by the affected 

specialties at inpatient hospitals and 

ambulatory surgical centers decreased 

by 17 percent, ranging from a 15 percent 

reduction for pathology to a 31 percent 

decline for neonatal-perinatal medicine. 

d. Benefits 

Provisions in these interim final rules 

will protect participants, beneficiaries, 

or enrollees with health coverage from 

receiving surprise bills for emergency 

services, air ambulance services 

furnished by nonparticipating 

providers, and non-emergency services 

furnished by nonparticipating providers 

at participating facilities in certain 

circumstances. Providers will no longer 

be able to balance bill an individual for 

emergency services. A provider will 

only be able to balance bill an 

individual for certain post-stabilization 

services, and for services performed by 

nonparticipating providers at certain 

participating facilities, if the provider or 

facility provides notice to the 

participant, beneficiary, or enrollee, and 

obtains the individual’s consent to 

receive care on an out-of-network basis 

and be balance billed. Further, 

provisions ensuring all relevant civil 

rights protections are upheld and 

communication with consumers is 

accessible, in a language that is 

understandable, and at an appropriate 

literacy level, help to effectively confer 

these protections to minority and 

underserved communities. 

These interim final rules also specify 

that for emergency services furnished by 

a nonparticipating provider or 

emergency facility, and for nonemergency services furnished by 

nonparticipating providers in a 

participating health care facility, cost 

sharing is generally calculated as if the 

total amount that would have been 

charged for the services by a 

participating emergency facility or 

participating provider were equal to the 

recognized amount for such services, as 

defined by the statute and in these 

interim final rules, while for 

nonparticipating providers of air 

ambulance services, cost sharing is 

generally calculated as if the total 

amount that would have been charged 

for the services by a participating 

provider of air ambulance services were 

equal to the lesser of the billed amount 

or QPA, as defined by the statute and in 

these interim final rules. 

In addition, these interim final rules 

require that these cost-sharing amounts 

be counted toward any in-network 

deductible or in-network out-of-pocket 

maximums applied under the plan or 

coverage in the same manner as if such 

cost-sharing payments were made with 

respect to services furnished by a 

participating provider, participating 

facility, or participating provider of air 

ambulance services. 

Consider, for example, one case 

included in the project by Vox,161 where 

a victim of a violent attack was taken to 

an emergency facility. When the 

individual was able, he checked to make 

sure that the hospital was in-network for 

his plan. He was not aware, however, 

that the surgeon who performed 

emergency jaw surgery was 

nonparticipating for his plan and the 

individual received a surprise bill of 

$7,924. Two other cases in the same 

study included an individual involved 

in a bike crash and another individual 

hit by a public bus. Both individuals 

were treated at the same emergency 

facility, which was out-of-network for 

both their plans and received surprise 

bills of $20,243 and $27,660, 

respectively. In another case, the 

parents of an infant who needed an 

inter-facility air ambulance transport for 

urgent surgery received a surprise 

medical bill of approximately $64,000 

from the air ambulance provider.162

Another case reported in the media 163

involved an expectant mother choosing 

an in-network hospital and a 

participating obstetrician for the birth of 

her baby. However, a nonparticipating 

pediatrician was called in due to a 

potential risk of post-delivery 

complications for the baby. The mother 

later received a surprise bill of $636 

from the pediatrician because her plan 

had denied the claim. In each of these 

situations, plans and issuers either 

denied the claim or paid the 

nonparticipating provider, 

nonparticipating facility, or 

nonparticipating provider of air 

ambulance services an amount that the 

plan or issuer considered reasonable for 

the services provided, and the 

nonparticipating provider or 

nonparticipating facility sent a balance 

bill to the individual. Under the No 

Surprises Act and these interim final 

rules, individuals in similar situations 

will only be responsible for in-network 

cost-sharing amounts and deductibles. 

Nonparticipating providers and 

nonparticipating facilities will not be 

able to balance bill such individuals, 

but instead will need to agree to an 

amount of payment with plans and 

issuers or enter into the independent 

dispute resolution process to determine 

an appropriate payment amount, if 


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164Olaisen, R., et al., ‘‘Assessing the Longitudinal 

Impact of Physician-Patient Relationship on 

Functional Health.’’ The 18 Annals of Family 

Medicine 5 (2020). https://www.annfammed.org/ 

content/18/5/422. 

165See AAP Policy Statement, ‘‘Guiding 

Principles for Managed Care Arrangements for the 

Health Care of Newborns, Infants, Children, 

Adolescents, and Young Adults’’. https://

pediatrics.aappublications.org/content/pediatrics/ 

132/5/e1452.full.pdf. 

166Based on data from MLR annual report for the 

2019 MLR reporting year, available at https://

www.cms.gov/CCIIO/Resources/Data-Resources/ 

mlr. 

agreement on a payment amount cannot 

be reached. 

Therefore, individuals with health 

coverage, including members of 

minority and underserved communities, 

are likely to see a significant reduction 

in balance billing, reducing one source 

of anxiety, financial stress, and medical 

debt. They will also experience a 

reduction in out-of-pocket expenditures, 

because they will only be liable for their 

in-network cost-sharing amounts when 

receiving care from nonparticipating 

providers, emergency facilities, and 

providers of air ambulance services, 

which will now count towards their 

deductible and maximum out-of-pocket 

limits, allowing individuals to reach 

those limits sooner. As discussed 

previously in this preamble, a 

significant number of individuals forgo 

or delay care due to the cost of care. A 

reduction in out-of-pocket expenses is 

likely to improve access to care and 

allow individuals to obtain needed 

treatment that they may otherwise have 

neglected or foregone due to concerns 

about the cost of care. 

These interim final rules also 

establish a complaints process for 

receiving and resolving complaints 

related to these new surprise billing 

protections. The Departments are of the 

view that this will result in increased 

compliance with balance billing 

requirements and ensure that all 

individuals, including members of 

minority and underserved communities, 

are able to benefit from the protections 

provided by the No Surprises Act and 

these interim final rules. The 

Departments also seek comment from 

members of minority and underserved 

communities to help identify barriers to 

individuals exercising their rights under 

the No Surprises Act, as well as policies 

to address and remove such barriers. 

The No Surprises Act extends the 

applicability of the patient protections 

for choice of health care professionals to 

grandfathered health plans. Participants, 

beneficiaries, and enrollees in 

grandfathered plans will now be able to 

designate any participating primary care 

provider who is available to accept the 

participant, beneficiary, or enrollee. If 

patients are able to choose physicians 

they trust and with whom they have a 

good relationship, they are likely to 

have better health outcomes.164

Similarly, allowing physicians 

specializing in pediatrics to become 

primary care physicians for children 

will also improve health outcomes for 

children. The American Academy of 

Pediatrics (AAP) strongly supports the 

idea that the choice of primary care 

clinicians for children should include 

pediatricians.165 In addition, a female 

participant, beneficiary, or enrollee in a 

grandfathered plan who seeks coverage 

for obstetrical or gynecological care 

provided by a participating health care 

professional who specializes in 

obstetrics or gynecology will not need 

an authorization or referral by the plan, 

issuer, or any person (including a 

primary care provider), which will 

allow them to obtain care without any 

delay. 

The potential financial savings to 

consumers as a result of the protections 

in these interim final rules are 

significant. As of January 1, 2022, 

individuals across the country will no 

longer receive surprise medical bills for 

out-of-network emergency services, nonemergency services provided by 

nonparticipating providers at certain 

participating health care facilities, or air 

ambulance services. The Departments 

understand that some of these savings 

will result instead in cost transfers from 

participants, beneficiaries, and enrollees 

to group health plans or issuers, as 

discussed later in this preamble, or may 

ultimately be paid for by individuals in 

the form of increased health insurance 

premiums, which will be discussed in 

future rulemaking. However, the 

Departments anticipate that there are 

potentially additional cost savings for 

individuals, but are unaware of 

comprehensive national data that 

quantifies the potential financial 

benefits to individuals of the surprise 

billing protections included in these 

rules and invite stakeholders to share 

relevant data that would help the 

Departments quantify this potential 

consumer financial benefit. 

e. Costs 

Plans, issuers, health care providers, 

facilities, and providers of air 

ambulance services will incur 

significant costs to comply with the 

requirements of these interim final 

rules. 

These interim final rules specify that 

for emergency services furnished by a 

nonparticipating provider or emergency 

facility, and for non-emergency services 

furnished by nonparticipating providers 

in a participating health care facility, 

cost sharing is generally calculated as if 

the total amount that would have been 

charged for the services by a 

participating emergency facility or 

participating provider were equal to the 

recognized amount for such services, as 

defined by the No Surprises Act and 

these interim final rules. For 

nonparticipating providers of air 

ambulance services, cost sharing is 

generally calculated as if the total 

amount that would have been charged 

for the services by a participating 

provider of air ambulance services were 

equal to the lesser of the billed amount 

or the QPA, as defined by the statute 

and in these interim final rules. In 

addition, these interim final rules 

require that such cost sharing must also 

be counted toward any in-network 

deductible or in-network out-of-pocket 

maximums applied under the plan or 

coverage in the same manner as if such 

cost sharing payments were made with 

respect to services furnished by a 

participating provider, a participating 

facility, or a participating provider of air 

ambulance services. 

Under these interim final rules, costsharing for emergency services 

furnished by a nonparticipating 

provider or emergency facility, and for 

non-emergency services furnished by 

nonparticipating providers in a 

participating health care facility, must 

be calculated based on the ‘‘recognized 

amount,’’ which is: (1) An amount 

determined by an applicable All-Payer 

Model Agreement under section 1115A 

of the Social Security Act, (2) if there is 

no such applicable All-Payer Model 

Agreement, an amount determined by a 

specified state law, or (3) if there is no 

such applicable All-Payer Model 

Agreement or specified state law, the 

lesser of the billed amount for the 

services or the QPA, which generally is 

the median of the contracted rates of the 

plan or issuer for the item or service 

furnished in the applicable geographic 

region. For air ambulance services, 

subject to these interim final rules, 

plans and issuers generally must use the 

QPA to calculate cost sharing. 

Plans and issuers will incur 

significant costs to calculate the 

recognized amount and applicable costsharing amount. The Departments 

assume that for self-insured group 

health plans, the costs will be incurred 

by third party administrators (TPAs). 

The Departments estimate a total 1,758 

entities—1,553 issuers 166 and 205 


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167Non-issuer TPAs based on data derived from 

the 2016 Benefit Year reinsurance program 

contributions. 

168The CALC tool (https://calc.gsa.gov/) was built 

to assist acquisition professionals with market 

research and price analysis for labor categories on 

multiple U.S. General Services Administration 

(GSA) & Veterans Administration (VA) contracts. 

Wages obtained from the CALC database are fully 

burdened to account for fringe benefits and 

overhead costs. 

169See May 2020 Bureau of Labor Statistics, 

Occupational Employment Statistics, National 

Occupational Employment and Wage Estimates, 

available at https://www.bls.gov/oes/current/oes_

nat.htm. 

TPAs 167—will be required to comply 

with these interim final rules with 

regard to calculating the QPA and to 

calculate an individual’s cost sharing 

liability. The Departments anticipate 

that issuers and TPAs will need to make 

changes to their information technology 

(IT) systems to include the capability to 

calculate the QPA for all out-of-network 

claims subject to the surprise billing 

protections, or the amount determined 

by state law or All-Payer Model 

Agreement, if applicable, and provide 

the required information related to the 

QPA to nonparticipating providers and 

nonparticipating emergency facilities. In 

addition, system changes will be 

necessary to accept and process out-ofnetwork claims, calculate the 

appropriate cost-sharing amounts and 

include them in deductible and out-ofpocket maximum limits. The one-time 

cost to make system changes to include 

these new functionalities may be 

slightly lower for plans (or TPAs) and 

issuers already subject to state balance 

billing laws. The Departments estimate 

that each plan (or TPA) or issuer will 

incur one-time costs of approximately 

$2.8 million, on average, to make the 

necessary system changes to automate 

the process. The total costs for all plans 

(or TPAs) and issuers will be 

approximately $4,958 million. The 

Departments assume that these one-time 

costs will be incurred in 2021. In 

addition, each issuer or TPA will incur 

ongoing costs related to system 

maintenance, processing out-of-network 

claims and to acquire external data 

necessary to calculate the QPA when 

there is insufficient information to 

calculate median contracted rates 

starting in 2022. The Departments 

estimate each issuer or TPA will incur, 

on average, ongoing costs of $1.2 

million in 2022 and approximately 

$411,840 annually starting in 2023. The 

total annual costs for all issuers and 

TPAs will be $2,047 million in 2022 and 

$724 million annually starting in 2023. 

See Tables 2 and 3 for more details. The 

Departments seek comment on these 

estimates. 

TABLE 2—ONE-TIME IT COSTS RELATED COSTS FOR PLANS AND ISSUERS IN 2021 

Occupation: Hourly 

wage rate 

2021 

Time 

(hours) 

Estimated 

labor cost 

IT Costs 

Project Manager/Team Lead ....................................................................................................... $110.00 2,080 $228,800 

Scrum Master .............................................................................................................................. 110.00 3,640 400,400 

Senior Business Analysis ............................................................................................................ 134.00 1,560 209,040 

UX Researcher/Service Designer ................................................................................................ 129.00 2,080 268,320 

Technical Architect/Sr. Developer ............................................................................................... 207.00 2,080 430,560 

DevOps Engineer/Security Engineer ........................................................................................... 143.00 1,560 223,080 

Application Developer .................................................................................................................. 111.00 9,360 1,038,960 

Total IT Costs for Each Issuer or TPA ................................................................................. ........................ 22,360 2,799,160 

Total IT Costs for all Issuers and TPAs ........................................................................ ........................ 39,308,880 4,920,923,280 

Management Costs 

Chief Executives .......................................................................................................................... 190.24 80 15,219 

Lawyers ........................................................................................................................................ 143.18 40 5,727 

Total ...................................................................................................................................... ........................ 120 20,946 

Total Management Costs for all plans and issuers ...................................................... ........................ 210,960 36,823,771 

Total Costs for all Issuers and TPAs ............................................................................ ........................ 39,519,840 4,957,747,051 

Note: All wage rates except those related to management costs use the Contract Awarded Labor Category (CALC) tool.168 Wage rates for 

management costs are derived using data from the Bureau of Labor Statistics to derive average labor costs (including a 100 percent increase for 

fringe benefits and overhead).169

TABLE 3—ONGOING ANNUAL OPERATIONAL COSTS FOR ISSUERS AND TPAS STARTING IN 2022 

Occupation: Hourly 

wage rate 

2022 2023 onwards 

Time 

(hours) 

Estimated 

labor cost 

Time 

(hours) 

Estimated 

labor cost 

Project Manager/Team Lead ............................................... $110.00 1,040 $114,400 520 $57,200 

Scrum Master ....................................................................... 110.00 1,300 143,000 520 57,200 

Senior Business Analysis .................................................... 134.00 780 104,520 0 0 

UX Researcher/Service Designer ........................................ 129.00 780 100,620 0 0 

Technical Architect/Sr. Developer ....................................... 207.00 1,040 215,280 520 107,640 

DevOps Engineer/Security Engineer ................................... 143.00 780 111,540 520 74,360 

Application Developer .......................................................... 111.00 3,380 375,180 1,040 115,440 

Total for Each Plan or Issuer ....................................... ........................ 9,100 1,164,540 3,120 411,840 


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170American Hospital Association, Fast Facts on 

U.S. Hospitals, 2021. Available at https://

www.aha.org/statistics/fast-facts-us-hospitals. 171Emergency Medicine Network, 2018 National 

Emergency Department Inventory—USA. Available 

at https://www.emnet-usa.org/research/studies/

nedi/nedi2018/. 172Moriarty, A., Definitive Healthcare, How Many 

Ambulatory Surgery Centers are in the US?. Blog. 

April 10, 2019. Available at: https://blog.

definitivehc.com/how-many-ascs-are-in-theus#:∼:text=Currently%2C%20there%20are

%20more%20than,Healthcare’s%20platform

%20on%20surgery%20centers. 

173Federal Aviation Administration, Fact Sheet— 

FAA Initiatives to Improve Air Ambulance Safety, 

2014, https://www.faa.gov/news/fact_sheets/news_

story.cfm?newsId=15794. 

TABLE 3—ONGOING ANNUAL OPERATIONAL COSTS FOR ISSUERS AND TPAS STARTING IN 2022—Continued 

Occupation: Hourly 

wage rate 

2022 2023 onwards 

Time 

(hours) 

Estimated 

labor cost 

Time 

(hours) 

Estimated 

labor cost 

Total Costs for all Issuers and TPAs .................... ........................ 15,997,800 2,047,261,320 5,484,960 724,014,720 

Issuers and TPAs will also need to 

revise their standard operating 

procedures to include processes related 

to out-of-network claims, recognized 

amount and QPA, and provide training 

to their billing personnel and customer 

service representatives. The 

Departments assume that, for each 

issuer or TPA, a business operations 

specialist will need 40 hours (at an 

hourly labor cost of $81.06) and a senior 

manager (at an hourly labor cost of 

$114.24) will need 16 hours to revise 

the standard operating procedures, with 

a total cost of approximately $5,070. In 

addition, the Departments assume that, 

on average, 10 staff at each issuer and 

TPA will receive 4 hours of training at 

a cost of $1,824. For all 1,758 issuers 

and TPAs, the total cost of revising 

standard operating procedures and 

training will be $12.1 million. The 

Departments assume that these one-time 

costs will be incurred in 2021 and that 

new staff will be trained as a part of the 

usual on-boarding process at minimal 

additional cost and burden. 

Health care and emergency facilities 

will also incur costs to revise their 

standard operating procedures and 

provide training to their staff regarding 

notice and consent requirements, 

patient disclosures, and out-of-network 

billing. The Departments estimate that 

there are 16,992 emergency and health 

care facilities (6,090 hospitals,170 270 

independent freestanding emergency 

departments,171 9,280 ambulatory 

surgical centers,172 and 1,352 critical 

access hospitals) that will incur this 

cost. The Departments assume that for 

hospital-affiliated freestanding 

emergency departments, the disclosure 

will be developed by the parent 

hospitals. The Departments estimate 

that, on average, for each health care 

facility, a business operations specialist 

will need 40 hours and a senior manager 

will need 16 hours to revise the 

standard operating procedures, with a 

total cost of approximately $5,070. In 

addition, on average, 10 staff at each 

hospital will receive 4 hours of training 

at a cost of approximately $1,824. This 

estimate is an average of the costs and 

burden to be incurred by each health 

care facility and the Departments 

recognize that the costs and burden may 

vary depending on the size of each 

health care facility. The total one-time 

cost for 16,992 health care facilities is 

estimated to be approximately $117.2 

million, to be incurred in 2021, with the 

expectation that new staff will be 

trained as a part of the usual onboarding process at minimal additional 

cost and burden. 

Providers of air ambulance services 

will also incur costs to revise their 

standard operating procedures and 

provide training to their staff regarding 

out-of-network billing. The Departments 

assume that for each air ambulance 

provider, a business operations 

specialist will need 40 hours and a 

senior manager will need 16 hours to 

revise the standard operating 

procedures, with a total cost of 

approximately $5,070. In addition, on 

average, 10 staff for each provider will 

receive 4 hours of training at a cost of 

approximately $1,824. The total on-time 

cost for each provider of air ambulance 

services will be approximately $6,894 in 

2021. The total one-time cost for 75 

providers of air ambulance services 173

is estimated to be approximately 

$517,086, to be incurred in 2021, with 

the expectation that new staff will be 

trained as a part of the usual onboarding process at minimal additional 

cost and burden. 

The Departments estimate that 

grandfathered plans and issuers will 

incur a total cost of approximately 

$4,516,225 in 2022 to provide the notice 

of right to designate a primary care 

provider to participants, beneficiaries, 

and enrollees. Self-insured plans opting 

in to state law will incur one-time costs 

of $50,708 in 2022 to include a 

disclosure in plan documents. TPAs and 

issuers will also incur costs of 

approximately $55.4 million annually to 

share information related to QPAs with 

nonparticipating providers, 

nonparticipating emergency facilities, 

and nonparticipating providers of air 

ambulance services. Additionally, 

issuers and TPAs will incur costs to 

make publicly available, post on a 

public website of the plan or issuer, and 

include on each explanation of benefits 

the disclosure regarding patient 

protections against balance billing. The 

Departments estimate a one-time cost, 

incurred in 2021, for all issuers and 

TPAs to be $699,245 and ongoing 

annual costs, to begin in 2022, of 

approximately $23.4 million. These 

costs are discussed in detail in the 

Paperwork Reduction Act section of this 

preamble. 

Nonparticipating providers and 

nonparticipating emergency facilities 

may balance bill a participant, 

beneficiary, or enrollee if certain notice 

and consent requirements have been 

met. Providers and facilities will incur 

costs to prepare the notice, provide 

notice and receive consent from 

patients, retain records, and provide 

notice to plans and issuers. HHS 

estimates that the one-time cost to 

prepare the notice and consent 

documents will be approximately $22.6 

million in 2021. The ongoing annual 

cost to provide the notice and obtain 

consent, retain records and provide 

notice to plans and issuers is estimated 

to be approximately $117.2 million 

starting in 2022. In addition, individuals 

receiving the notice and consent, where 

applicable, will incur costs of 

approximately $99.1 million annually, 

starting in 2022, to read and understand 

the notice. These costs are discussed in 

detail in the Paperwork Reduction Act 

section of this preamble. 

Health care providers and facilities 

will also incur costs to make publicly 

available, post on a public website of 

the provider or facility, and provide to 

participants, beneficiaries, and enrollees 

a one-page notice disclosure on patient 

protections against surprise billing and 

for providers and facilities to enter into 

agreements for the facilities to provide 

the disclosure on behalf of the 

providers, HHS estimates the one-time 

total cost, to be incurred in 2021, to be 


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36930 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

174Cooper, Z. et al., Surprise! Out-Of-Network 

Billing For Emergency Care in the United States, 

NBER Working Paper 23623, 2017, available at 

https://www.nber.org/papers/w23623. 

175These interim final rules and the forthcoming 

regulations are interrelated, and in cases such as 

this, attribution of impacts is challenging. Inclusion 

of more detailed analysis in later rulemaking, rather 

than these interim final rules—about, for example, 

changes in premiums incentivized by the suite of 

surprise billing policies—should not be interpreted 

as indicating certainty that such impacts will not 

occur as a result of these interim final rules. 

approximately $13.1 million and the 

ongoing annual cost, to begin in 2022, 

to be approximately $2.5 million. HHS 

encourages states to develop language to 

assist facilities in fulfilling this 

disclosure requirement as it applies to 

disclosing state protections against 

balance billing. HHS estimates that the 

33 states that currently have legislation 

to provide some protection to 

consumers for surprise billing will incur 

one-time costs of approximately $10,732 

in 2021 to develop the model language. 

These costs are discussed in detail in 

the Paperwork Reduction Act section of 

this preamble. 

The No Surprises Act directs the 

Departments to establish a process to 

receive complaints regarding violations 

of the application of the QPA by group 

health plans and health insurance 

issuers offering group or individual 

health coverage. Individuals and entities 

that submit a complaint related to 

surprise billing will also incur costs to 

do so. As discussed in the Paperwork 

Reduction Act section of the preamble, 

the Departments estimate related costs 

to be approximately $97,452 annually 

starting in 2022. In addition, the federal 

government will incur a one-time cost of 

approximately $16 million in 2021 to 

build the IT system to receive and 

process complaints, an additional $3 

million to update existing systems in 

2021, and ongoing annual costs of 

approximately $1.6 million in 2021, 

$9.9 million in 2022, $10.1 million in 

2023 and $10.3 million in 2024 and 

subsequent years to process the 

complaints received and for system 

maintenance. 

As discussed previously, individuals 

with protections against surprise billing 

are likely to experience a reduction in 

out-of-pocket expenses. This may 

increase their use of health care, which 

could lead to an increase in health care 

expenditures overall. 

The Departments seek comment on 

these estimates and also on any 

additional costs incurred by plans, 

issuers, providers, and facilities. 

f. Transfers 

The provisions in these interim final 

rules will result in lower out-of-pocket 

spending by individuals. In situations 

where surprise bills currently occur, 

participants, beneficiaries, and enrollees 

will be responsible for only an 

approximation of the cost-sharing 

amounts they would have paid had the 

services been provided by a 

participating emergency facility, 

participating provider, or participating 

provider of air ambulance services. 

Plans and issuers will now be required 

to pay for some expenses for items and 

services provided by nonparticipating 

facilities, providers, and providers of air 

ambulance services that they previously 

did not pay for. Thus, expenditures will 

shift from certain individuals to plans 

and issuers. In addition, it is possible 

the out-of-network rates collected by 

some providers, including air 

ambulance providers, and facilities will 

be lower than they would have been if 

the providers and facilities were able to 

balance bill the individuals. Such 

situations will result in transfers from 

providers and facilities to individuals. If 

there is a decrease in payments to some 

participating providers, as has 

happened for in-network emergency 

department physician payments in the 

state of New York,174 there will be a 

transfer from those providers to plans, 

issuers, participants, beneficiaries, and 

enrollees. 

As discussed previously in this 

preamble, these interim final rules are 

the first of several rules implementing 

the No Surprises Act and the 

transparency provisions of title II of 

Division BB of the CAA. Later this year, 

the Departments intend to issue 

additional regulations including 

regulations regarding the federal IDR 

process. The impact of the provisions of 

the No Surprises Act on premiums will 

depend on provisions not included in 

these interim final rules, and more 

detailed analysis will therefore be 

included in future rulemaking.175

C. Regulatory Alternatives 

In developing the interim final rules, 

the Departments considered various 

alternative approaches. 

Determining the Cost-sharing 

Amount. The No Surprises Act 

generally requires that cost sharing for 

items and services subject to the 

surprise billing protections be based on 

the recognized amount. In instances 

where this requirement applies, the 

Departments considered whether it 

should apply where the billed charge is 

less than the recognized amount. In 

these instances, assuming the plan or 

issuer would not pay more than the 

billed charge, calculating cost sharing 

based on the QPA (which is one way in 

which the recognized amount might be 

determined) would require a 

participant, beneficiary, or enrollee to 

pay a higher percentage in cost sharing 

than if such items or services had been 

furnished by a participating provider. 

However, sections 9816(a)(1)(C)(ii) and 

9816(b)(1)(A) of the Code, sections 

716(a)(1)(C)(ii) and 716(b)(1)(A) of 

ERISA, and sections 2799A– 

1(a)(1)(C)(ii) and 2799A–1(b)(1)(A) of 

the PHS Act expressly prohibit plans 

and issuers from applying a cost-sharing 

requirement that is greater than the 

requirement that would apply if services 

were provided by a participating 

provider or a participating emergency 

facility. Therefore, under these interim 

final rules, in circumstances where an 

All-Payer Model Agreement or specified 

state law does not apply to determine 

the recognized amount, cost sharing 

must be based on the lesser of the QPA 

or the amount billed by the provider for 

the item or service. 

Methodology for Calculating the QPA. 

The No Surprises Act generally requires 

the QPA to be calculated based on the 

median of the contracted rates of the 

plan or issuer. The Departments 

considered whether plans and issuers 

should take into account the number of 

claims paid at the contracted rate under 

each contract in calculating the QPA. 

Doing so, however, would not result in 

a pure median of the contracted rates, 

which the Departments are of the view 

would most clearly follow the language 

of the No Surprises Act. In addition, the 

Departments are of the view that this 

approach would likely put upward 

pressure on the QPA, by giving greater 

weight to contracts of larger provider 

groups and facilities, which are more 

likely to have negotiated higher rates 

than small provider groups and 

facilities. This approach could lead to 

higher out-of-pockets costs for 

individuals. 

The Departments also considered 

requiring plans and issuers to calculate 

separate median contracted rates for 

facilities based on the characteristics of 

facilities, such as by distinguishing 

teaching hospitals from non-teaching 

hospitals, rather than distinguishing 

only on the basis of whether the facility 

is an emergency department of a 

hospital or an independent freestanding 

emergency department. The 

Departments decided against this 

approach, as doing so would result in a 

higher median contracted rate for 

facilities with higher operating costs 

and is not clearly contemplated in the 

definition of QPA under the No 

Surprises Act. The Departments are of 

the view that the different operating 

costs among facilities with different 

characteristics should not have such a 


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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 36931 

dramatic impact on median contracted 

rates. However, the Departments 

recognize that payment amounts for 

facility charges may vary depending on 

whether an emergency facility is 

connected with a hospital. Therefore, 

the interim final rules allow separate 

median contracted rates to be calculated 

for emergency services based on 

whether the facility is an emergency 

department of a hospital or an 

independent freestanding emergency 

department. 

With respect to calculating a separate 

QPA for each item and service for each 

geographic region, the Departments 

considered whether to define each 

geographic region as the applicable 

rating area as defined for purposes of 

the individual and small group market 

rating rules under PHS Act 2701 section 

and 45 CFR 147.102, while allowing 

states the flexibility to establish 

alternative geographic regions. 

However, some states define rating area 

by county, resulting in large numbers of 

rating areas in a state, some of which 

might include few, if any, facilities and 

providers. Therefore, adopting rating 

area as the standard for geographic 

region could lead to a large number of 

geographic regions for which a plan or 

issuer would have to calculate separate 

median contracted rates, a large number 

of geographic regions without sufficient 

information, as well as a large number 

of geographic regions in which the 

median contracted rate is influenced by 

outliers. Therefore, the interim final 

rules do not adopt this approach to 

defining geographic regions. 

With respect to the statutory 

requirement for plans and issuers to 

calculate separate QPAs for each 

insurance market, including for selfinsured group health plans, the 

Departments considered whether the 

market for self-insured group health 

plans should be limited to only selfinsured group health plans offered by 

the same plan sponsor. However, this 

could lead to greater instances of a selfinsured plan lacking sufficient 

information, so the interim final rules 

instead define the self-insured market as 

all self-insured group health plans 

offered by the same plan sponsor, or at 

the option of the plan sponsor, all selfinsured group health plans 

administered by the same entity that is 

responsible for determining the QPA on 

behalf of the plan (including a thirdparty administrator contracted by the 

plan). 

Participant, Beneficiary, and Enrollee 

Responsibility to Pay Recognized 

Amount Only. In instances where a 

participant, beneficiary, or enrollee has 

not satisfied their deductible, the 

Departments considered whether the 

plan or issuer should not be required to 

pay any portion of the out-of-network 

rate to the nonparticipating provider or 

facility. However, these interim final 

rules require that when the out-ofnetwork rate exceeds the recognized 

amount (the amount upon which cost 

sharing is based), a plan or issuer must 

pay the provider or facility the 

difference between the out-of-network 

rate and the cost-sharing amount (the 

latter of which in this case would equal 

the recognized amount), even in 

instances where an individual has not 

satisfied their deductible. This approach 

is consistent with the purpose of the No 

Surprises Act to protect participants, 

beneficiaries, or enrollees from surprise 

balance bills that exceed in-network 

cost-sharing requirements. This 

approach is also consistent with section 

102 of the No Surprises Act, which 

amends section 223 of the Code to 

specify that these payments will not 

prevent a plan from qualifying as a highdeductible health plan or make an 

individual ineligible to contribute to a 

health savings account. 

Definition of Health Care Facility. The 

No Surprises Act defines a health care 

facility as each of the following with 

respect to non-emergency services: (1) A 

hospital (as defined in 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); 

(4) an ambulatory surgical center 

described in section 1833(i)(1)(A) of the 

Social Security Act; or (5) any other 

facility, specified by the Departments, 

that provides items or services for 

which coverage is provided under the 

plan or coverage, respectively. The 

Departments considered whether to 

expand the definition of health care 

facility in this rulemaking, but 

concluded that the facilities at which 

balance billing are currently most 

frequent are included in the current 

definition. The Departments anticipate 

continuing to monitor the prevalence of 

surprise billing at various facilities and 

may expand the definition in future 

rulemaking. In particular, as discussed 

earlier in this preamble, the 

Departments considered including 

urgent care centers in the definition of 

health care facility. However, given the 

variation across states in how urgent 

care centers are licensed, including the 

scope of services that the centers are 

permitted to provide, the Departments 

decided to instead seek comment 

regarding whether the definition of 

health care facility should be extended 

to urgent care centers, including those 

that are not licensed as facilities under 

state law. 

With respect to the definition of 

participating health care facility and 

participating emergency facility, the 

Departments considered excluding 

facilities that had only single case 

agreements in place with a plan or 

issuer. However, the Departments are 

persuaded that doing so could harm 

participants, beneficiaries or enrollees. 

When individuals are provided with 

care, generally non-emergency items or 

services, under a single case agreement, 

they should not have to worry about 

potential surprise bills. Excluding 

facilities with single case agreements 

from the definitions of participating 

facilities and participating emergency 

facilities would be inconsistent with the 

Departments’ intent to protect 

individuals from surprise medical bills. 

Applicability of State Law. In 

determining how state laws around 

balance billing would intersect with the 

No Surprises Act, the Departments 

considered alternatives to the approach 

taken under these interim final rules, 

which seek to supplement, rather than 

supplant state balance billing laws. 

Specifically, the Departments 

considered whether to allow states to be 

more protective of consumers than the 

No Surprises Act with respect to 

whether individuals are permitted to 

waive balance billing protections upon 

notice and consent, and concluded that 

it is in the public interest to interpret 

the No Surprises Act as creating a floor 

regarding individuals’ ability to waive 

balance billing protections. The 

Departments also considered whether 

state provisions allowing ERISAcovered plans to opt in to the state 

requirements should be considered 

specified state laws for purposes of 

setting the recognized amount and outof-network rate regarding ERISAcovered plans that have opted into the 

state programs. The Departments have 

concluded such deference to state law is 

consistent with the overarching 

structure of the No Surprises Act. The 

Departments also considered allowing 

providers, facilities and providers of air 

ambulance services to opt in to state 

laws (as allowed under state laws), but 

decided to instead seek comments on 

this approach, as discussed earlier in 

this preamble. 

Notice and Consent Exception to 

Prohibition on Balance Billing. Under 

the No Surprises Act and these interim 

final rules, the protections that limit 

cost sharing and prohibit balance billing 

do not apply to certain non-emergency 

services or to certain post-stabilization 

services provided in the context of 

emergency care, if the nonparticipating 


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36932 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

176https://www.census.gov/programs-surveys/ 

metro-micro/about.html. 

177https://www.dartmouthatlas.org/faq/. 

178https://www.dartmouthatlas.org/faq/. 

179https://www.census.gov/programs-surveys/ 

geography/guidance/geo-areas/pumas.html#:∼:text=

Public%20Use%20Microdata

%20Areas%20(PUMAs)

%20are%20non%2Doverlapping

%2C,and%20the%20U.S.%20Virgin%20Islands. 

180Agency for Healthcare Research and Quality, 

HCUP Fast Stats—Trends in Emergency Department 

Visits. https://www.hcup-us.ahrq.gov/faststats/ 

NationalTrendsEDServlet?

measure1=01&characteristic1=14&measure2=&

characteristic2=11&expansionInfoState=hide&

dataTablesState=hide&definitionsState=hide&

exportState=hide#export. 

181Estimates based on data on postoperative 

office visits. Centers for Disease Control, National 

Ambulatory Medical Care Survey: 2016 National 

Summary Tables. Available at https://www.cdc.gov/ 

nchs/fastats/physician-visits.htm. 

provider or nonparticipating emergency 

facility furnishing those items or 

services provides the participant, 

beneficiary, or enrollee, with certain 

notice, the individual acknowledges 

receipt of the information in the notice, 

and the individual consents to be 

treated by the nonparticipating 

emergency facility or nonparticipating 

provider. These interim final rules 

establish the conditions under which 

notice and consent may be provided for 

certain non-emergency and poststabilization services. The Departments 

considered a number of additional 

conditions under which the notice and 

consent exception would not be 

permitted, such as if the individual 

were experiencing pain, or under the 

influence of alcohol or drugs, including 

the use or administration of prescribed 

medications. The Departments are of the 

view that these factors are critical 

considerations for whether an 

individual is able to provide informed 

consent, and concluded that these are 

factors that a provider would be 

expected to assess when determining if 

the individual is capable of 

understanding the information provided 

in the notice and the implications of 

consenting. The HHS interim final rules 

therefore establish requirements related 

to the notice and consent exception. 

HHS considered a number of 

alternatives in developing these interim 

final rules. HHS considered different 

standards to apply in defining 

geographic regions for purposes of 

language access requirements. The HHS 

interim final rules require providers and 

facilities to provide the notice and 

consent documents in the 15 most 

common language in the state, or in a 

geographic region, which reasonably 

reflects the geographic region served by 

the applicable facility. HHS also 

considered the use of MSAs,176 hospital 

service areas (HSAs),177 hospital referral 

regions (HRRs),178 and public use 

microdata areas (PUMAs),179 applied 

based on where the applicable facility is 

located. These geographic regions might 

better reflect a facility’s service area 

than a state. However, HHS is of the 

view that allowing providers and 

facilities to use the state as the 

geographic region would reduce burden, 

and concluded that the standard in the 

HHS interim final rules provides 

sufficient flexibility for providers and 

facilities to determine how best to serve 

their population. HHS considered 

requiring that a provider or facility that 

uses a region other than a state must use 

a geographic region smaller than a state, 

but determined this approach would not 

adequately address the needs to 

facilities that serve populations that 

cross state borders. HHS also considered 

alternatives regarding the 

inapplicability of the notice and consent 

exception to ancillary services. HHS 

considered expanding the definition of 

ancillary services to include other 

services for which surprise billing 

frequently occurs. In particular, 

stakeholders raised concerns about 

providers who deliver services to 

individuals during inpatient stays, but 

who the individual has little 

involvement in selecting. These 

included, for example, providers 

furnishing mental health services, 

cardiology services, and rehabilitative 

services. The Departments are 

concerned about surprise bills that arise 

in these situations, but prefer to further 

consider the recommendation. 

Individuals may have strong preferences 

to select these types of providers for outof-network care, and it is therefore not 

clear whether they would be 

appropriate to include among the types 

of specialties for which notice and 

consent to be balance billed is 

prohibited. 

Applicability date. The Departments 

considered delaying the applicability 

date of these interim final rules in 

response to stakeholder feedback 

regarding the challenges of coming into 

compliance with these interim final 

rules by January 1, 2022. The 

Departments recognize the challenges 

that providers (including providers of 

air ambulance services), facilities, plans, 

and issuers will face in making the 

necessary changes to comply with these 

new requirements. However, delaying 

the applicability date would have 

significant ramifications for 

participants, beneficiaries, and enrollees 

and would continue to leave them 

vulnerable to surprise bills. Therefore, 

the Departments concluded that it is in 

the public interest to require these 

interim final rules to be applicable in 

accordance with the applicability dates 

in the No Surprises Act. 

Provider Disclosure Requirements 

Regarding Patient Protections against 

Balance Billing. Section 2799B–3 of the 

PHS Act, as added by the No Surprises 

Act, requires providers and facilities to 

provide disclosures regarding patient 

protections against balance billing. 

These interim final rules include 

provisions to limit this disclosure 

requirement to certain providers and 

facilities, and with respect to certain 

individuals. These interim final rules 

also include a special rule to limit 

unnecessary duplication, so that a 

facility’s disclosure may satisfy the 

disclosure requirement on behalf of 

providers in certain circumstances. HHS 

considered applying the disclosure 

requirement more broadly. However, 

HHS determined that a broader 

application of the disclosure 

requirements would increase the 

administrative costs associated with the 

requirement, without commensurate 

benefits to individuals. Rather, HHS was 

concerned that requiring the disclosure 

be made by facilities and providers in 

circumstances where the protections 

against balance billing would not apply 

could create consumer confusion about 

their rights under the No Surprises Act. 

Additionally, HHS determined that 

requiring providers to provide a 

disclosure when furnishing services at a 

facility that was also required to provide 

a disclosure was unnecessary and could 

be overwhelming to consumers. If 

providers furnishing services at a 

facility were required to provide a 

disclosure as well, at the very least, the 

cost of printing and materials for the 

notices would have doubled, for an 

additional $2.5 million in costs. If, in 

addition, providers had to develop the 

notices they provided, there would have 

been additional costs. If all providers 

were required to provide a notice, 

regardless of whether the services are 

furnished at a provider’s office or a 

health care facility, then in addition to 

the 39,690,940 individuals treated in the 

emergency facilities,180 526,685,200 

individuals visiting a provider’s office 

or a health care facility would have been 

provided a disclosure, for a total of 

566,376,140 disclosures.181 The cost to 

print the disclosures would have been 

approximately $28.3 million, 

approximately $25.8 million more than 

it is estimated to be under the 

provisions in these interim final rules. 


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182See May 2020 Bureau of Labor Statistics, 

Occupational Employment Statistics, National 

Occupational Employment and Wage Estimates, available at https://www.bls.gov/oes/current/oes_

nat.htm. 

D. Paperwork Reduction Act— 

Department of Health and Human 

Services 

Under the Paperwork Reduction Act 

of 1995 (PRA), HHS is required to 

provide 30-day notice in the Federal 

Register and solicit public comment 

before a collection of information 

requirement is submitted to OMB for 

review and approval. To fairly evaluate 

whether an information collection 

should be approved by OMB, section 

3506(c)(2)(A) of the PRA requires that 

HHS solicit comment on the following 

issues: 

• The need for the information 

collection and its usefulness in carrying 

out the proper functions of our agency. 

• The accuracy of HHS’ estimate of 

the information collection burden. 

• The quality, utility, and clarity of 

the information to be collected. 

• Recommendations to minimize the 

information collection burden on the 

affected public, including automated 

collection techniques. 

HHS is soliciting public comment on 

each of the required issues under 

section 3506(c)(2)(A) of the PRA for the 

following information collection 

requirements (ICRs). 

1. Wage Estimates 

To derive wage estimates, the 

Departments generally used data from 

the Bureau of Labor Statistics to derive 

average labor costs (including a 100 

percent increase for fringe benefits and 

overhead) for estimating the burden 

associated with the ICRs.182 Table 4 

presents the mean hourly wage, the cost 

of fringe benefits and overhead, and the 

adjusted hourly wage. 

As indicated, employee hourly wage 

estimates have been adjusted by a factor 

of 100 percent. This is necessarily a 

rough adjustment, both because fringe 

benefits and overhead costs vary 

significantly across employers, and 

because methods of estimating these 

costs vary widely across studies. 

Nonetheless, there is no practical 

alternative, and the Departments are of 

the view that doubling the hourly wage 

to estimate total cost is a reasonably 

accurate estimation method. 

TABLE 4—WAGE RATES

Occupation title Occupational 

code 

Mean hourly 

wage 

($/hour) 

Fringe benefits 

and overhead 

($/hour) 

Adjusted 

hourly wage 

($/hour) 

Secretaries and Administrative Assistants, Except Legal, Medical, and Executive .......................................................................................................... 43–6014 $19.43 $19.43 $38.86 

Lawyer ............................................................................................................. 23–1011 71.59 71.59 143.18 

All Occupations ................................................................................................ 00–0000 27.07 27.07 54.14 

Computer Programmers .................................................................................. 15–1251 45.98 45.98 91.96

Medical Secretaries and Administrative Assistants ......................................... 43–6013 18.75 18.75 37.50 

Human Resources Specialists ......................................................................... 13–1071 33.38 33.38 66.76 

Business Operations Specialist ....................................................................... 13–1198 38.57 38.57 77.14 

General and Operations Manager ................................................................... 11–1021 59.15 59.15 118.30 

Compensation and Benefits Manager ............................................................. 11–3111 65.94 65.94 131.88 

Computer and Information Systems Managers ............................................... 11–3021 77.76 77.76 155.52 

2. ICRs Regarding Information To Be 

Shared About QPA (45 CFR 149.140(d)) 

These interim final rules require plans 

and issuers to provide certain 

information regarding the QPA to 

nonparticipating providers, or 

nonparticipating emergency facilities in 

cases in which the recognized amount 

with respect to an item or service 

furnished by the provider or facility is 

the QPA (and in all cases subject to 

these rules for nonparticipating 

providers of air ambulance services). 

Specifically, plans and issuers must 

provide the following information to 

providers (including air ambulance 

providers) and facilities, when making 

an initial payment or notice of denial of 

payment: (1) The QPA for each item or 

service involved; (2) a statement 

certifying that the plan or issuer has 

determined that the QPA applies for the 

purposes of the recognized amount (or, 

in the case of air ambulance services, for 

calculating the participant’s, 

beneficiary’s, or enrollee’s cost sharing), 

and each QPA was determined in 

compliance with the methodology 

established in these interim final rules; 

(3) a statement that if the provider or 

facility, as applicable, wishes to initiate 

a 30-day open negotiation period for 

purposes of determining the amount of 

total payment, the provider or facility 

may contact the appropriate person or 

office to initiate open negotiation, and 

that if the 30-day negotiation period 

does not result in a determination, 

generally, the provider or facility may 

initiate the independent dispute 

resolution process within 4 days after 

the end of the open negotiation period; 

and (4) contact information, including a 

telephone number and email address, 

for the appropriate person or office to 

initiate open negotiations for purposes 

of determining an amount of payment 

(including cost sharing) for such item or 

service. Additionally, upon request of 

the provider or facility, the plan or 

issuer must provide, in a timely manner, 

the following information: (1) Whether 

the QPA for items and services involved 

included contracted rates that were not 

on a fee-for-service basis for those 

specific items and services and whether 

the QPA for those items and services 

was determined using underlying fee 

schedule rates or a derived amount; (2) 

if a related service code was used to 

determine the QPA for a new service 

code, information to identify the related 

service code; (3) if the plan or issuer 

used an eligible database to determine 

the QPA, information to identify which 

database was used; and (4) if applicable, 

upon request, a statement that the plan’s 

or issuer’s contracted rates include risksharing, bonus, or other incentive-based 

or retrospective payments or payment 

adjustments for covered items and 

services that were excluded for 

purposes of calculating the QPA. 

The Departments assume that TPAs 

will provide this information on behalf 

of self-insured plans. In addition, the 

Departments assume that issuers and 

TPAs will automate the process of 

preparing and providing this 

information in a format similar to an 

explanation of benefits as part of the 

system to calculate the QPA. The cost to 

issuers and TPAs of making the changes 


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36934 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

183Agency for Healthcare Research and Quality, 

HCUP Fast Stats—Trends in Emergency Department 

Visits. https://www.hcup-us.ahrq.gov/faststats/ 

NationalTrendsEDServlet?measure1=01&

characteristic1=14&measure2=&

characteristic2=11&expansionInfoState=hide&

dataTablesState=hide&definitionsState=hide&

exportState=hide. 

184Estimate from Pollitz, K. et al., Surprise Bills 

Vary by Diagnosis and Type of Admission, 

Peterson-KFF Health System tracker, December 9, 

2019, https://www.healthsystemtracker.org/brief/ 

surprise-bills-vary-by-diagnosis-and-type-ofadmission/. 

185Estimate from Pollitz, K. et al., Surprise Bills 

Vary by Diagnosis and Type of Admission, 

Peterson-KFF Health System tracker, December 9, 

2019, https://www.healthsystemtracker.org/brief/ 

surprise-bills-vary-by-diagnosis-and-type-ofadmission/. 186Estimates based on data on postoperative 

office visits. Centers for Disease Control, National 

Ambulatory Medical Care Survey: 2016 National 

Summary Tables. Available at https://www.cdc.gov/ 

nchs/fastats/physician-visits.htm. 

to their IT systems is discussed 

previously in the RIA. 

The Departments estimate that a total 

of 1,758 issuers and TPAs will incur 

burden to comply with this provision. 

Currently, 14 states have established 

some payment standards for services 

provided by nonparticipating providers 

or nonparticipating emergency facilities. 

Therefore, the Departments assume that 

issuers and TPAs will potentially need 

to calculate the QPA for two-thirds of 

the claims involving nonparticipating 

providers or nonparticipating 

emergency facilities. 

In 2018, there were approximately 

39,690,940 emergency department visits 

for patients with individual market or 

group health coverage.183 The 

Departments estimate that 

approximately 18 percent of these 

visits 184 will include services provided 

by nonparticipating providers or 

nonparticipating emergency facilities 

and plans and issuers will need to 

calculate the QPA for two-thirds of such 

claims. Therefore, plans and issuers will 

be required to provide the specified 

information along with the initial 

payment or denial notice for 

approximately 4,786,727 claims 

annually from nonparticipating 

providers or nonparticipating 

emergency facilities for emergency 

department visits. In addition, in 2018, 

there were approximately 4,146,476 

emergency department visits that 

resulted in hospital admission for 

patients with individual market or 

group health coverage. Using this as an 

estimate of post-stabilization services 

provided in emergency facilities, and 

assuming that in 16 percent of cases the 

patient is treated at a nonparticipating 

emergency facility or by a 

nonparticipating provider at a 

participating facility,185 the 

Departments estimate that 

approximately 663,436 individuals will 

have the potential to be treated by a 

nonparticipating provider or facility. In 

the absence of data, the Departments 

assume that in 50 percent of cases 

services will be provided by 

nonparticipating providers without 

satisfying the notice and consent criteria 

in these interim final rules for reasons 

such as unforeseen, urgent medical 

needs and lack of participating 

providers in the facility. The 

Departments estimate that plans and 

issuers will need to calculate the QPA 

for two-thirds of such claims. Therefore, 

plans and issuers will be required to 

provide the required information along 

with the initial payment or denial notice 

for approximately 222,251 claims from 

nonparticipating providers or 

nonparticipating emergency facilities for 

post-stabilization services. Additionally, 

based on 2016 data, the Departments 

estimate that there will be 11,107,056 

visits to health care facilities annually 

for surgical and non-surgical procedures 

for individuals with group health 

coverage or individual market 

coverage.186 The Departments assume 

that in 16 percent of cases the patient 

will have the potential to receive care 

from a nonparticipating provider at a 

participating facility, and that in 

approximately 5 percent of those cases 

services will be provided by 

nonparticipating providers without 

satisfying the notice and consent criteria 

in these interim final rules for reasons 

such as the services being ancillary 

services or related to unforeseen, urgent 

medical needs, and plans and issuers 

will need to calculate the QPA for twothirds of such claims. Therefore, plans 

and issuers will be required to provide 

the required information along with the 

initial payment or denial notice for 

approximately 59,534 claims annually 

for non-emergency services furnished by 

a nonparticipating provider at a 

participating health care facility. In 

total, plans and issuers will be required 

to provide documents related to QPAs 

along with the initial payment or denial 

of payment for approximately 5,068,512 

claims annually from nonparticipating 

providers or facilities. 

The Departments estimate that for 

each issuer or TPA it will take a medical 

secretary 10 minutes (at an hourly rate 

of $37.50) to prepare the documentation 

and attach it to each payment or denial 

notice or explanation of benefits sent to 

the nonparticipating provider or facility. 

The Departments assume that this 

information will be sent electronically 

at minimal cost. The total annual 

burden for all issuers and TPAs to 

provide the QPA information and 

certification along with 5,068,512 

payments or denial notices, is estimated 

to be approximately 844,752 hours, with 

an associated equivalent cost of 

approximately $31.7 million. 

The Departments assume that for the 

5,068,512 QPA information sent to 

nonparticipating providers or 

nonparticipating emergency facilities, 

50 percent will result in requests to 

provide additional information and 

plans and issuers will be required to 

send additional information to 

approximately 2,534,256 providers or 

facilities. The Departments estimate that 

it will take a medical secretary 15 

minutes (at an hourly rate of $37.50) to 

prepare the document and provide it to 

the provider or facility that requested it. 

The Departments assume that this 

information will be delivered 

electronically with minimal additional 

cost. The total estimated burden, for all 

issuers and TPAs, will be approximately 

633,564 hours annually, with an 

associated equivalent cost of 

approximately $23.8 million. 

The total annual burden for all issuers 

and TPAs for providing the initial and 

additional information related to QPA 

will be 1,478,316 hours, with an 

equivalent cost of $55,436,853. As DOL, 

the Treasury Department and HHS share 

jurisdiction, HHS will account for 50 

percent of the burden, or approximately 

739,158 burden hours with an 

equivalent cost of approximately 

$27,718,427. The Departments seek 

comment on these burden estimates. 


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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 36935 

187Based on data on self-insured plans that have 

opted in available at: https://

www.insurance.wa.gov/self-funded-group-healthplans, https://www.dol.gov/sites/dolgov/files/EBSA/ 

researchers/data/health-and-welfare/healthinsurance-coverage-bulletin-2019.pdf, https://

scc.virginia.gov/balancebilling. 

188According to data from the National 

Telecommunications and Information Agency, 34 

percent of households in the United States accessed 

health records or health insurance online. https:// 

www.ntia.doc.gov/blog/2020/more-half-americanhouseholds-used-internet-health-related-activities2019-ntia-data-show. 

TABLE 5—ANNUAL BURDEN AND COST FOR PLANS AND ISSUERS TO PROVIDE INFORMATION RELATED TO QPA TO

NONPARTICIPATING PROVIDERS AND NONPARTICIPATING EMERGENCY FACILITIES

Estimated 

number of 

respondents 

Estimated 

number of 

responses 

Burden per 

response 

(hours) 

Total annual 

burden 

(hours) 

Total estimated 

cost 

Initial information .......................................................... 879 2,534,256 0.167 422,376 $15,839,100.93 

Additional Information .................................................. 879 1,267,128 0.25 316,782 11,879,325.70 

Total ...................................................................... 879 3,801,384 ........................ 739,158 27,718,427.63 

3. ICRs Regarding Audits of QPA (45 

CFR 149.140(f)) 

The No Surprises Act provides that 

rulemaking must establish a process 

under which group health plans and 

health insurance issuers offering group 

or individual health insurance coverage 

are audited by the applicable Secretary 

or applicable state authority to ensure 

that such plans and coverage are in 

compliance with the requirement of 

applying a QPA and that the QPA 

applied satisfies the definition under 

the No Surprises Act with respect to the 

year involved. 

These interim final rules include an 

audit provision establishing that the 

Departments’ existing enforcement 

procedures will apply with respect to 

ensuring that a plan or coverage is in 

compliance with the requirement of 

determining and applying a QPA 

consistent with these interim final rules. 

HHS has primary enforcement 

authority over issuers (in a state if the 

Secretary of HHS makes a determination 

that a state is failing to substantially 

enforce a provision (or provisions) of 

Part A or D of title XXVII of the PHS 

Act) and non-federal governmental 

plans, such as those sponsored by state 

and local government employers and 

expects to conduct no more than 9 

audits annually. Therefore, this 

collection is exempt from the PRA 

under 44 U.S.C. 3502(3)(A)(i). 

4. ICRs Regarding Disclosure for SelfInsured Plans Opting-In to State Law (45 

CFR 149.30) 

These interim final rules allow selfinsured group health plans, including 

self-insured non-federal governmental 

plans, to voluntarily opt in to state law 

that provides for a method for 

determining the cost-sharing amount or 

total amount payable under such a plan, 

where a state has chosen to expand 

access to such plans, to satisfy their 

obligations under section 9816(a)–(d) of 

the Code, section 716(a)–(d) of ERISA, 

and section 2799A–1(a)–(d) of the PHS 

Act. A self-insured plan that has chosen 

to opt-in to a state law must 

prominently display in its plan 

materials describing the coverage of outof-network services a statement that the 

plan has opted in to a specified state 

law, identify the relevant state (or 

states), and include a general 

description of the items and services 

provided by nonparticipating facilities 

and providers that are covered by the 

specified state law. 

Based on available data, HHS 

estimates that approximately 84 selfinsured non-federal governmental plans 

in New Jersey, Nevada, Virginia and 

Washington 187 will opt-in and incur the 

one-time burden and cost to include the 

disclosure in their plan documents in 

2022. It is estimated that for each plan 

an administrative assistant will spend 1 

hour (at an hourly rate of $38.86) and 

a compensation and benefits manager 

will spend 30 minutes (at an hourly rate 

of $131.88) to prepare the disclosure. 

The estimated total burden for each plan 

will be 1.5 hours with an equivalent 

cost of approximately $105. The 

estimated total annual burden for all 84 

plans will be approximately 126 hours 

with an equivalent cost of 

approximately $8,783. HHS estimates 

that there are approximately 11,956 

policyholders in these plans that will be 

provided the disclosure. HHS assumes 

that only printing and material costs are 

associated with the disclosure 

requirement, because the notice can be 

incorporated into existing plan 

documents. HHS estimates that the 

disclosure will require one-half of a 

page, at a cost of $0.05 per page for 

printing and materials, and 34 percent 

of plan documents will be delivered 

electronically at minimal cost.188

Therefore, the cost to deliver 66 percent 

of these disclosures in print is estimated 

to be approximately $197. The total onetime cost for all plans, incurred in 2022, 

is estimated to be approximately $8,981. 

TABLE 6—ONE-TIME BURDEN AND COST TO PROVIDE DISCLOSURE REGARDING OPTING IN TO STATE LAW

Year 

Estimated 

number of 

respondents 

Estimated 

number of 

responses 

Burden 

per response 

(hours) 

Total 

annual 

burden 

(hours) 

Total 

estimated 

labor 

cost 

Total 

estimated 

printing and 

materials 

cost 

Total 

estimated 

cost 

2022 ............................. 84 84 1.5 126 $8,783 $197 $8,981 

5. ICRs Regarding Complaints Process 

for Surprise Medical Bills (45 CFR 

149.150, 45 CFR 149.450) 

The No Surprises Act directs the 

Departments to establish a process to 

receive complaints regarding violations 

of the application of the QPA 

requirements by group health plans and 

health insurance issuers offering group 

or individual health coverage under 

section 9816(a)(2)(B)(iv) of the Code, 

section 716(a)(2)(B)(iv) of ERISA, and 

section 2799A–1(a)(2)(B)(iv) of the PHS 

Act, and violations by health care 

provider, facilities, and providers of air 


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36936 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

189The Departments use the average wage rate for 

all occupations. 

190According to 2020 Kaiser/HRET survey of 

Employer Health Benefits, 11 percent of employers 

offer a health maintenance organization (HMO) 

option and that 31 percent of employers offer a 

point-of-service (POS) option. Available at https:// 

www.kff.org/health-costs/report/2020-employerhealth-benefits-survey/. 

ambulance services of the requirements 

under sections 2799B–1, 2799B–2, 

2799B–3, and 2799B–5 of the PHS Act. 

The Departments are of the view that 

the complaints process should extend to 

all of the balance billing requirements 

and define a complainant as any 

individual, or their authorized 

representative, who files a complaint, as 

described and defined in these interim 

final rules. This regulatory action is 

taken as required by the No Surprises 

Act, which directs the Departments to 

create a process for balance billing 

complaints regarding plans and issuers, 

and directs HHS to create a process for 

balance billing complaints regarding 

providers and facilities. 

HHS estimates that there will be, on 

average, 3,600 balance billing 

complaints against providers, facilities, 

providers of air ambulance services, 

plans, and issuers submitted annually. 

HHS estimates that it will take each 

complainant 30 minutes (at an hourly 

rate of $54.14) 189 to collect all relevant 

documentation related to the alleged 

violation and to access and complete the 

provided complaint form, with an 

equivalent cost of approximately $27. 

The total burden for all complainants is 

estimated to be 1,800 hours, with an 

equivalent annual cost of approximately 

$97,452. As DOL, the Treasury 

Department and HHS share jurisdiction, 

HHS will account for 50 percent of the 

burden, approximately 900 burden 

hours with an equivalent cost of 

approximately $48,726. 

TABLE 7—ANNUAL BURDEN AND COSTS FOR COMPLAINTS RELATED TO SURPRISE BILLING

Estimated number of respondents 

Estimated 

number of 

responses 

Burden 

per response 

(hours) 

Cost per 

response 

Total annual 

burden 

(hours) 

Total 

estimated 

cost 

1,800 .................................................................................... 1,800 0.5 $27.07 900 $48,726 

6. ICRs Regarding Notice of Right To 

Designate a Primary Care Provider (45 

CFR 149.310(a)(4)) 

These interim final rules continue to 

require that if a group health plan or 

health insurance issuer requires the 

designation by a participant, 

beneficiary, or enrollee of a primary care 

provider, the plan or issuer must 

provide a notice informing each 

participant (in the individual market, 

primary subscriber) of the terms of the 

plan or coverage and their right to 

designate a primary care provider. For 

group health plans and group health 

insurance coverage, the notice must be 

included whenever the plan or issuer 

provides a participant with a summary 

plan description or other similar 

description of benefits under the plan or 

coverage. For individual health 

insurance coverage, the notice must be 

included whenever the issuer provides 

a primary subscriber with a policy, 

certificate, or contract of health 

insurance. These interim final rules 

continue to include model language to 

satisfy the notice requirements. The No 

Surprises Act extends the applicability 

of the patient protections for choice of 

health care professionals to 

grandfathered health plans. The patient 

protections under section 2719A of the 

PHS Act apply to only nongrandfathered group health plans and 

health insurance issuers offering nongrandfathered group or individual 

health insurance coverage. In contrast, 

the patient protections under the No 

Surprises Act apply generally to all 

group health plans and group and 

individual health insurance coverage, 

including grandfathered health plans. 

Therefore, the requirements regarding 

patient protections for choice of health 

care professional under these interim 

final rules will newly apply to 

grandfathered health plans for plan 

years beginning on or after January 1, 

2022. 

In order to satisfy the patient 

protection disclosure requirement, state 

and local government plans and issuers 

in the individual market will need to 

notify policy holders of their plans’ 

policy in regards to designating a 

primary care physician and for 

obstetrical or gynecological visits and 

will incur a one-time burden and cost to 

incorporate the notice into plan 

documents. Non-federal governmental 

plans and individual market plans that 

are currently not grandfathered have 

already incurred the one-time cost to 

prepare and incorporate this notice in 

their existing plan documents. 

There are an estimated 90,126 nonfederal governmental employers offering 

health plans to employees and 388 

health insurance issuers in the 

individual market. HHS estimates that 

there are approximately 14,417 

grandfathered non-federal government 

employer-sponsored plans and 

approximately 837,543 grandfathered 

individual market policies, with 

approximately 6,055 grandfathered nonfederal governmental plans offering 

HMO and point-of-service (POS) 

options.190 HHS assumes that all 

individual market issuers offer at least 

one HMO, exclusive provider 

organization (EPO) or POS options. 

It is estimated that in 2022, 5,450 

grandfathered non-federal governmental 

plans and individual market policies 

will be subject to this notice 

requirement. While not all HMO, EPO, 

and POS options require the designation 

of a primary care physician or a prior 

authorization or referral before an OB/ 

GYN visit, HHS is unable to estimate 

this number. Therefore, this estimate 

should be considered an overestimate of 

the number of affected entities. 

These interim final rules continue to 

provide model language for the notice. 

It is estimated that each plan or issuer 

will require a compensation and 

benefits manager (at an hourly rate of 

$131.88) to spend 10 minutes 

customizing the model notice to fit the 

plan’s specifications. Each plan or 

issuer will also require clerical staff (at 

an hourly rate of $38.86) to spend 5 

minutes adding the notice to the plan’s 

documents. The estimated total burden 

for each plan or issuer will be 0.25 

hours with an equivalent cost of 

approximately $25. In 2022, the 

estimated total annual burden for all 

5,450 plans and issuers will be 

approximately 1,362 hours with an 

equivalent cost of approximately 

$137,430. There will be no additional 

burden and cost in 2023 to prepare the 

notice, since all plans and issuers will 

have incurred the burden and cost by 

2022. 

HHS estimates that there are 

approximately 1.8 million non-federal 

governmental plan policyholders in 

grandfathered plans, with an estimated 


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191According to the 2020 Kaiser/HRET Survey of 

Employer Sponsored Health Benefits, 12 percent of 

covered workers in non-federal government plans 

have an HMO option and that 11 percent of covered 

workers have a POS option. 

192Estimate based of data reported in Unified 

Review Template Submissions for 2018 plan. Rate 

review data available at https://www.cms.gov/ 

CCIIO/Resources/Data-Resources/ratereview.html. 

193According to data from the National 

Telecommunications and Information Agency, 34 

percent of households in the United States accessed 

health records or health insurance online. https:// 

www.ntia.doc.gov/blog/2020/more-half-americanhouseholds-used-internet-health-related-activities2019-ntia-data-show. 

194 937,010 notices × 66% = 618,427 notices 

printed × $0.05 per page × 1⁄2 pages per notice = 

approximately $15,461. 

413,976 policyholders enrolled in 

grandfathered HMO and POS plans 

options.191 In addition, there are an 

estimated 837,543 policyholders with 

grandfathered individual market plans. 

It is estimated that approximately 75 

percent of individual market enrollees 

are enrolled in HMO, EPO, and POS 

options.192 Therefore, an estimated 

627,146 policyholders in the individual 

market have grandfathered plans with 

HMO, EPO, and POS options. It is 

estimated that approximately 937,010 

policyholders will remain in 

grandfathered non-federal government 

employer sponsored and individual 

market plans with HMO, EPO, and POS 

options in 2022 and will receive the 

required notice for the first time in 

2022. HHS assumes that only printing 

and material costs are associated with 

the disclosure requirement, because the 

notice can be incorporated into existing 

plan documents. HHS estimates that the 

notice will require one-half of a page, at 

a cost of $0.05 per page for printing and 

materials, and 34 percent of the notices 

will be delivered electronically at 

minimal cost.193 Therefore, the cost to 

deliver 66 percent of these notices in 

print is estimated to be approximately 

$15,461.194

TABLE 8—ONE-TIME BURDEN AND COST TO PROVIDE NOTICE OF RIGHT TO DESIGNATE A PRIMARY CARE PROVIDER

Year 

Estimated 

number of 

respondents 

Estimated 

number of 

responses 

Burden per 

response 

(hours) 

Total annual 

burden 

(hours) 

Total 

estimated 

labor cost 

Total 

estimated 

printing and 

materials 

cost 

Total 

estimated 

cost 

2022 ............................. 5,450 5,450 0.25 1,362 $137,430 $15,461 $152,891 

HHS will revise the burden currently 

approved under OMB Control Number 

0938–1094, (Notice of Rescission of 

Coverage and Disclosure Requirements 

for Patient Protection under the 

Affordable Care Act, CMS–10330, 

expiration: July 31, 2022) to account for 

this burden. 

7. ICRs Regarding Notice and Consent 

To Waive Balance Billing Protections, 

Retention of Certain Documents, and 

Notice to Plan or Issuer (45 CFR 

149.410(b)–(e), 45 CFR 149.420(c)–(i)) 

The No Surprises Act and these 

interim final rules require that a plan or 

issuer providing coverage of emergency 

services do so without the individual or 

the health care provider having to 

obtain prior authorization and without 

regard to whether the health care 

provider furnishing the emergency 

services is a participating provider or a 

participating emergency facility with 

respect to the services (regardless of the 

department of the hospital in which 

such items and services are furnished). 

Emergency services include any 

additional items and services that are 

covered under a plan or coverage after 

a participant, beneficiary, or enrollee is 

stabilized (referred to as poststabilization services) unless certain 

notice and consent requirements are 

met. The No Surprises Act and these 

interim final rules further apply surprise 

billing protections in the case of nonemergency services furnished by 

nonparticipating providers during a 

visit by a participant, beneficiary, or 

enrollee at participating health care 

facilities unless notice and consent as 

specified in these interim final rules 

have been met. The requirements 

related to the notice and consent, 

applicable exceptions, and timing are 

set forth in section 2799B–2 of the PHS 

Act, and implemented at 45 CFR 

149.410 and 45 CFR 149.420 of these 

interim final rules. 

In order to meet the notice and 

consent requirements of these interim 

final rules, nonparticipating providers 

and nonparticipating emergency 

facilities must provide the participant, 

beneficiary, or enrollee with a notice, 

meet certain timing requirements, and 

obtain consent from the participant, 

beneficiary, or enrollee as described in 

45 CFR 149.420 and these interim final 

rules. The provided notice must: (1) 

State the health care provider or facility 

is a nonparticipating provider or 

facility; (2) include the good faith 

estimate of what the individual may be 

charged, including any item or service 

that is reasonably expected to be 

provided in conjunction with such 

items and services; (3) provide 

information about whether prior 

authorization or other care management 

limitations may be required; and (4) 

clearly state that consent to receive such 

items or services is optional and that the 

participant, beneficiary, or enrollee may 

instead seek care from an available 

participating provider, in which case 

the individual’s cost-sharing 

responsibility would be at the innetwork level. In cases where poststabilization services are furnished by a 

nonparticipating provider at a 

participating emergency facility, the 

notice must also include a list of 

participating providers at the 

participating emergency facility who are 

able to furnish the items or services 

involved and inform the individual that 

they may be referred, at their option, to 

such a participating provider. 

Additionally, a nonparticipating 

provider or nonparticipating emergency 

facility must provide the participant, 

beneficiary, or enrollee, or such 

individual’s authorized representative, 

with the notice and consent documents 

in any of the 15 most common 

languages in the state, or a geographic 

region that reasonably reflects the 

geographic region served by the 

applicable facility. If the individual’s 

preferred language is not among the 15 

most common languages made available 

or the individual cannot understand the 

language in which the notice and 

consent document are provided the 

individual must be provided with a 

qualified interpreter. 

In addition to providing the required 

notice and consent, nonparticipating 

emergency facilities, participating 

health care facilities, and 

nonparticipating providers are obligated 

to retain written notice and consent 

documents for at least a 7-year period 

after the date on which the item or 

service in question was furnished. 

Where the notice and consent 

requirements described in this interim 

final rule have been met, the 


jbell on DSKJLSW7X2PROD with RULES2
36938 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

195Emergency Medicine Network, 2018 National 

Emergency Department Inventory—USA. Available 

at https://www.emnet-usa.org/research/studies/ 

nedi/nedi2018/. 

196Agency for Healthcare Research and Quality, 

HCUP Fast Stats—Trends in Emergency Department 

Visits. Available at https://www.hcup-us.ahrq.gov/ 

faststats/NationalTrendsEDServlet?measure1=01&

characteristic1=14&measure2=&

characteristic2=11&expansionInfoState=

hide&dataTablesState=hide&definitions

State=hide&exportState=hide. 

nonparticipating provider, the 

participating health care facility on 

behalf of the nonparticipating provider, 

or the nonparticipating emergency 

facility, as applicable, must timely 

notify the plan or issuer, respectively, 

that the notice and consent criteria have 

been met, and if applicable, provide to 

the plan or issuer a copy of the signed 

notice and consent documents. In 

instances where, to the extent permitted 

by these rules, the nonparticipating 

provider bills the participant, 

beneficiary, or enrollee directly, the 

provider may satisfy the requirement to 

notify the plan or issuer by including 

the notice and consent documents with 

the bill to the participant, beneficiary, or 

enrollee. In addition, for items and 

services furnished by a nonparticipating 

provider at a participating health care 

facility, the provider (or the 

participating facility on behalf of the 

provider) must timely notify the plan or 

issuer that the item or service was 

furnished during a visit at a 

participating health care facility. 

In order to meet the notice and 

consent requirements of the statute and 

these interim final rules, 

nonparticipating providers and 

nonparticipating emergency facilities 

must provide the participant, 

beneficiary, or enrollee with a notice. 

HHS is specifying in guidance 

mandatory notice and consent forms 

that will require customization by the 

provider or facility. 

HHS assumes that emergency 

facilities and health care facilities will 

provide the notice and obtain consent 

on behalf of nonparticipating providers, 

retain records and notify plans and 

issuers. HHS estimates that a total of 

17,467 health care facilities and 

emergency departments (including 475 

hospital-affiliated satellite and 270 

independent freestanding emergency 

departments) will be subject to these 

requirements. HHS assumes that for 

hospital-affiliated satellite freestanding 

emergency departments, the notice and 

consent will be developed by the parent 

hospital. Therefore, the burden to 

develop the notice and consent 

documents will be incurred by 16,992 

emergency facilities and health care 

facilities. HHS estimates that for each 

facility it will take a lawyer 1 hour (at 

an hourly rate of $143.18) to read and 

understand the notice and consent 

forms and make any required and 

applicable alteration, an administrative 

assistant half an hour (at an hourly rate 

of $38.86) to make any alterations to the 

provided notice and consent documents 

and prepare the final documentation, a 

computer programmer 1 hour (at an 

hourly rate of $91.96) to digitize and 

post on a shared network server or push 

to networked computers fillable 

versions of the notice and consent 

documents, and a Computer and 

Information Systems Manager half an 

hour (at an hourly rate of $155.52) to 

verify accessibility to, and ensure 

functionality of, the notice and consent 

documents. HHS also estimates each 

facility will incur an additional cost of 

approximately $1,000 (at $500 per 

document) to contract with an outside 

firm to translate the notice and consent 

documents into the 15 most common 

languages in the state or a geographic 

region that reasonably reflects the 

geographic region served by the 

applicable facility. HHS estimates the 

one-time first-year burden, to be 

incurred in 2021, to make alterations, 

prepare the final versions, translate and 

make accessible to the providers within 

the facility the notice and consent 

documentation, for each facility will be 

approximately 3 hours, with an 

associated equivalent cost of 

approximately $1,332. For all 16,992 

emergency facilities and health care 

facilities, HHS estimates a total one-time 

first-year burden of 50,976 hours, with 

an associated equivalent cost of 

approximately $22.6 million. 

In order to meet the notice and 

consent requirements of 45 CFR 149.420 

with respect to post-stabilization 

services, when emergency services are 

provided by nonparticipating providers 

or nonparticipating emergency facilities, 

the provider or facility must provide the 

participant, beneficiary, or enrollee with 

a notice and obtain consent to be treated 

by the nonparticipating emergency 

facility or nonparticipating provider. 

HHS estimates there are approximately 

5,533 emergency departments 

(including hospital-affiliated satellite 

and independent freestanding 

emergency departments) 195 that could 

be subject to the notice and consent 

requirements in these interim final rules 

and will incur ongoing annual costs and 

burdens, beginning in 2022. In 2018, 

there were approximately 4,146,476 

emergency department visits that 

resulted in hospital admission for 

patients with individual market or 

group health coverage.196 Using this as 

an estimate of post-stabilization services 

provided in emergency facilities, and 

assuming that in 16 percent of cases the 

patient is treated at a nonparticipating 

emergency facility or by a 

nonparticipating provider at a 

participating facility, HHS estimates 

that approximately 663,436 individuals 

will be provided with a notice and 

consent document for post-stabilization 

services. HHS anticipates that the notice 

and consent will be used infrequently 

for post-stabilization services, so this 

estimate is an upper bound. HHS 

estimates it will take a medical secretary 

2 hours (at an hourly rate of $37.50) to 

customize the required notice and 

consent documents, generate a list of 

participating providers, provide and 

explain the documents to the individual 

(or authorized representative), answer 

questions, and obtain the signed consent 

if the individual agrees, provide the 

signed documents on paper or, as 

practicable, electronically, as selected 

by the individual, and retain the 

documentation as required by these 

interim final rules. The total burden for 

providing the notice and consent 

documents to individuals at all 

emergency facilities will be 1,326,872 

hours with an equivalent cost of 

approximately $49.8 million. HHS 

assumes that these documents will be 

provided directly to each affected 

individual (or authorized 

representative) in paper format and will 

be 4 pages (2 pages printed doublesided) on average. Assuming a cost of 

$0.10 (at $0.05 per page for printing and 

material cost) for each notice and 

consent document, the total printing 

and material costs for all notices will be 

approximately $66,344. The total 

ongoing cost for all emergency facilities 

will be approximately $49.8 million 

annually. HHS assumes that 

nonparticipating providers and 

nonparticipating emergency facilities 

will notify the plan or issuer and 

provide a copy of the signed notice and 

consent documents along with the claim 

form electronically at minimal cost. 

HHS estimates that each individual 

that receives notice and consent from an 

emergency facility will require, on 

average, 45 minutes (at an hourly rate of 

$54.14) to read and understand and sign 

the required notice and consent 

documents, with a total cost of 

approximately $41. For all 663,436 

individuals that could potentially 

receive the notice and consent 

documents, HHS estimates a total 

annual burden of 497,577 hours, with 

an associated total annual cost of 

approximately $26.9 million. 

In order to meet the notice and 

consent requirements of 45 CFR 149.420 

with respect to non-emergency services 


jbell on DSKJLSW7X2PROD with RULES2
Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 36939 

197Estimates based on data on postoperative 

office visits. Centers for Disease Control, National 

Ambulatory Medical Care Survey: 2016 National 

Summary Tables. Available at https://www.cdc.gov/ 

nchs/fastats/physician-visits.htm. 

198Estimated based on information provided by 

KFF. Available at: https://www.kff.org/health-costs/ 

poll-finding/data-note-public-worries-about-andexperience-with-surprise-medical-bills/. 199According to data from the National 

Telecommunications and Information Agency, 34 

percent of households in the United States accessed 

health records or health insurance online. https:// 

www.ntia.doc.gov/blog/2020/more-half-americanhouseholds-used-internet-health-related-activities2019-ntia-data-show. 

furnished by a nonparticipating 

provider at a participating health care 

facility, if an individual schedules an 

appointment for such items or services 

at least 72 hours before the date of the 

appointment, the provider or facility 

must provide the notice to the 

individual, or their authorized 

representative, no later than 72 hours 

before the date of the appointment. If an 

individual schedules an appointment 

for such items or services within 72 

hours of the date of the appointment, 

the provider or facility must provide the 

notice to the individual, or their 

authorized representative, on the day 

that the appointment is made. In the 

situation where an individual is 

provided the notice on the same day 

that the items or services are furnished, 

providers and facilities are required to 

provide the notice no later than 3 hours 

prior to furnishing items or services to 

which the notice and consent 

requirements applies. 

HHS estimates there are 

approximately 16,722 health care 

facilities that will be subject to the 

notice requirement described in these 

interim final rules and will incur 

ongoing annual costs and burdens 

beginning in 2022. Based on 2016 data, 

HHS estimates that there will be 

11,107,056 visits to health care facilities 

annually for surgical and non-surgical 

procedures for individuals with group 

health coverage or individual market 

coverage 197 and that approximately 16 

percent of those visits will involve a 

nonparticipating provider.198 This 

estimate is a lower bound since it is 

based on the number of postoperative 

office visits and potentially excludes 

situations where such visits were not 

needed or such follow-up was 

conducted at a different setting. HHS 

therefore estimates that approximately 

1,777,129 individuals could potentially 

face balance billing and will be subject 

to the notice requirements of these 

interim final rules. With respect to nonemergency services furnished by a 

nonparticipating provider at a 

participating health care facility, HHS 

estimates it will take a medical secretary 

1 hour (at an hourly rate of $37.50) to 

customize the required notice, generate 

a list of participating providers, provide 

the document via email or mail, as 

selected by the individual, and answer 

any questions. For all health care 

facilities, HHS estimates a total annual 

ongoing annual burden of 

approximately 1,777,129 hours, with an 

associated annual cost of approximately 

$66.6 million. HHS estimates that 

approximately 66 percent of the notices 

will be mailed to individuals (34 

percent sent electronically) at a cost of 

$0.65 (at $0.05 per page for printing and 

material cost and $0.55 postage).199

Assuming minimal cost for electronic 

delivery, the total cost of printing and 

mailing the notice and consent 

documents will be approximately 

$762,388 annually. The total ongoing 

cost for all health care facilities will be 

approximately $67.4 million annually. 

HHS estimates that each individual 

that receives the notice will require, on 

average, 45 minutes (at an hourly rate of 

$54.14) to read and understand the 

required notice, with a total cost of $41. 

For all 1,777,129 individuals that could 

receive the notice document, HHS 

estimates a total annual burden of 

1,332,847 hours, with an associated 

total annual cost of $72.2 million. HHS 

assumes that nonparticipating providers 

(or the participating facilities on behalf 

of the providers) will notify the plan or 

issuer and provide a copy of the signed 

notice and consent documents along 

with the claim from the participating 

facility electronically at minimal cost. 

For all emergency and health care 

facilities, the total ongoing burden will 

be 3,104,001 hours annually and the 

total cost, including printing and 

materials cost, will be approximately 

$117,228,780 annually starting in 2022. 

For all consumers, the total annual 

burden to read and understand the 

notice will be 1,830,424 hours with an 

equivalent cost of $99,099,147 starting 

in 2022. 

TABLE 9—ONE-TIME AND ANNUAL BURDEN AND COST FOR EMERGENCY DEPARTMENTS AND FACILITIES RELATED TO

NOTICE AND CONSENT

Year 

Estimated 

number of 

respondents 

Estimated 

number of 

responses 

Total 

annual burden 

(hours) 

Total 

estimated 

labor cost 

Total 

estimated 

translating, 

printing and 

materials cost 

Total 

estimated 

cost 

2021 ......................................................... 16,992 16,992 50,976 $5,646,951 $16,992,000 $22,638,951 

2022 ......................................................... 17,467 2,440,565 3,104,001 116,400,048 828,732 117,228,780 

2023 ......................................................... 17,467 2,440,565 3,104,001 116,400,048 828,732 

183,634 

117,228,780 

3 Year Average ........................................ 17,309 1,632,707 2,086,326 79,482,349 6,216,488 85,698,837 

TABLE 10—ANNUAL BURDEN AND COST FOR INDIVIDUALS RELATED TO NOTICE AND CONSENT STARTING IN 2022 

Estimated 

number of 

respondents 

Estimated 

number of 

responses 

Total 

annual burden 

(hours) 

Total 

estimated labor 

cost 

Total 

estimated 

cost 

2,440,565 2,440,565 1,830,424 $99,099,147 $99,099,147 


jbell on DSKJLSW7X2PROD with RULES2
36940 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

8. ICRs Regarding Provider Disclosure 

on Patient Protections Against Balance 

Billing (45 CFR 149.430) 

Section 2799B–3 of the PHS Act, as 

added by the No Surprises Act and 

codified at 45 CFR 149.430, requires 

providers and facilities to provide 

disclosures regarding patient 

protections against balance billing. 

Specifically, health care providers and 

facilities (including an emergency 

department of a hospital or independent 

freestanding emergency department) are 

required to make publicly available, 

post on a public website of the provider 

or facility, and provide to participants, 

beneficiaries, and enrollees a one-page 

notice about surprise billing protections, 

which must include information about 

any applicable state requirements, and 

about how to contact appropriate state 

and federal agencies if the individual 

believes the provider or facility has 

violated the balance billing rules. The 

required notice must include clear and 

understandable language that explains 

the requirements and prohibitions 

relating to the prohibitions on balance 

billing in cases of emergency services 

and in cases of non-emergency services 

performed by a nonparticipating 

provider at certain participating 

facilities, explain any other applicable 

state laws, and provide contact 

information for the appropriate state 

and federal agencies that an individual 

may contact if they believe the provider 

or facility has violated a requirement 

described in the notice. 

Health care providers and facilities 

are required to publicly post and make 

the disclosure publicly available 

through a public website accessible free 

of charge that is easily accessible, 

without barriers, including via search 

engines, and that ensures that the 

information is accessible to the general 

public. HHS assumes that providers and 

facilities will enter into agreements for 

the facilities to provide the disclosure 

on behalf of the providers and that the 

required language and information will 

be developed, posted within the facility, 

and posted on a public website by the 

facility. This will ameliorate the burden 

and cost for the individual provider. 

Many facilities and providers will be 

able to enter into an agreement at 

minimal cost if they renew their 

contracts prior to 2022. For each facility 

whose contracts with providers are not 

due to be renewed before 2022, the 

burden to enter into agreements related 

to this disclosure will vary based on the 

number of providers that practice 

within the facility. HHS estimates that 

for each facility, on average, it will take 

a lawyer 2 hours (at an hourly rate of 

$143.18) to draft an agreement and an 

administrative assistant 2 hours (at an 

hourly rate of $38.86) to provide 

electronic copies to all providers to sign. 

The total burden for all 17,467 facilities 

will be 69,868 hours with an equivalent 

cost of approximately $6,359,385, to be 

incurred as one-time costs in 2021. HHS 

is unable to estimate how many 

providers will incur burden to sign the 

agreement, but anticipates that the 

burden to sign each agreement will be 

minimal. In future years, this agreement 

can be included in the contract between 

the facilities and providers at no 

additional cost. 

HHS estimates a total of 17,467 health 

care facilities (including 475 hospitalaffiliated satellite and 270 independent 

freestanding emergency departments) 

will incur burden and costs to comply 

with this provision. HHS assumes that 

for hospital-affiliated satellite 

freestanding emergency departments, 

the disclosure will be developed by the 

parent hospital. HHS estimates that for 

each facility, on average, it will take a 

lawyer 2 hours (at an hourly rate of 

$143.18) to read and understand the 

provided notice and draft any 

additional, clear, and understandable 

language as may be needed, an 

administrative assistant 30 minutes (at 

an hourly rate of $38.86) to prepare the 

final document for distribution and 

make the information publicly available 

within the facility, and a computer 

programmer 1 hour (at an hourly rate of 

$91.96) to post the information on a 

separate or existing web page, in a 

searchable manner, and to make the 

content available in an easily 

downloadable format. The burden will 

be higher for facilities in states with 

state laws or All-Payer Model 

Agreements, but lower for facilities in 

states without any state laws. HHS 

assumes that each facility will post a 

single page document in at least two 

prominent locations, such as where 

individuals schedule care, check-in for 

appointments, or pay bills, and 

estimates that each facility will incur a 

printing cost of $0.10 (at $0.05 per page 

for printing and materials) in order to 

post the required disclosure information 

prominently at each health care facility. 

HHS anticipates that hospitals will post 

6 notices on average, and incur an 

additional cost of $0.20 each. In 

addition, HHS assumes that each of the 

475 hospital-affiliated satellite 

freestanding emergency departments 

will post two notices on average and 

incur a cost of $0.10 each. HHS 

estimates the one-time burden, to be 

incurred in 2021, to develop, prepare, 

and post the required disclosure 

information, for each facility will be 

approximately 3.5 hours, with an 

associated equivalent cost of 

approximately $398. For all facilities, 

HHS estimates a total one-time burden 

of 59,472 hours, with an associated cost 

of approximately $6.8 million, 

including materials and printing costs. 

HHS recognizes that there are some 

small providers and facilities that do not 

maintain or provide a publicly available 

website. Such entities are not required 

to make a disclosure on a public 

website. Therefore, HHS considers the 

estimate to be a high-end estimate. 

HHS encourages states to develop 

language to assist providers and 

facilities in fulfilling this disclosure 

requirement. There are currently 33 

states that have enacted laws to provide 

some protection to consumers for 

surprise billing. Some or all of these 

states may choose to develop model 

language. HHS assumes that it will take 

a lawyer 2 hours (at an hourly rate of 

$143.18) and an administrative assistant 

1 hour (at an hourly rate of $38.86) to 

develop and amend the model language. 

The total one-time burden, to be 

incurred in 2021, for each state will be 

3 hours with an equivalent cost of 

approximately $325. For all 33 states, 

HHS estimates the total one-time burden 

will be 99 hours with an equivalent cost 

of approximately $10,732. 

In addition to requiring providers and 

facilities to publicly post and make the 

required disclosure publicly available 

through a public website, providers and 

facilities are required to provide 

individuals the required disclosure 

information in a one-page notice. The 

required notice must be provided inperson, through the mail or via email, as 

selected by the participant, beneficiary, 

or enrollee no later than the date on 

which the health care provider or health 

care facility requests payment from the 

individual (including requests for 

copayment made at the time of a visit 

to the provider or facility), or with 

respect to individual from whom the 

health care facility or health care 

provider does not request payment, no 

later than the date on which the health 

care provider or health care facility 

submits a claim to the group health plan 

or health insurance issuer. HHS 

assumes that, in order to reduce burden 

and costs, facilities will choose to 

provide the required disclosure to the 

individual (or their selected 

representative) at the time the 

individual is processed for any visit, 

upon check-in, or when other standard 

disclosures are shared with individuals 

with minimal additional burden. HHS 

estimates that there will be 

approximately 39,690,940 emergency 


jbell on DSKJLSW7X2PROD with RULES2
Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 36941 

200Agency for Healthcare Research and Quality, 

HCUP Fast Stats—Trends in Emergency Department 

Visits. 

201Estimates based on data on postoperative 

office visits. Centers for Disease Control, National 

Ambulatory Medical Care Survey: 2016 National 

Summary Tables. Available at https://www.cdc.gov/ 

nchs/fastats/physician-visits.htm. 

201Estimated based on information provided by 

KFF. Available at: https://www.kff.org/health-costs/ 

poll-finding/data-note-public-worries-about-andexperience-with-surprise-medical-bills/. 

department visits 200 and 11,107,056 

visits to health care facilities annually 

for surgical and non-surgical 

procedures 201 for individuals with 

group health coverage or individual 

market coverage. This is a lower bound 

for the number of patients who will 

receive the disclosure since HHS lacks 

comprehensive data on patients who 

receive services on all health care 

facilities. In order to provide the 

required disclosure to individuals each 

facility will incur a cost of 

approximately $0.05 for printing and 

materials for each disclosure. HHS 

assumes that this disclosure will be 

provided along with other forms and 

notices usually provided to individuals 

without incurring significant labor cost. 

For all facilities, HHS estimates a total 

annual ongoing annual cost of $2.5 

million, starting in 2022. HHS 

recognizes that the number of notices 

provided by each facility will vary 

depending on the number of annual 

visits and that some facilities could 

incur higher costs to provide the 

disclosure while others could incur 

lower costs. HHS assumes that all 

disclosures will be provided in-person; 

however, HHS acknowledges that some 

individuals will choose to have this 

notice provided to them via email, at a 

minimal cost to the facility, and others 

may choose to receive the disclosure via 

mail, in which case the facility will 

incur additional postage costs. 

HHS seeks comment on these burden 

estimates. Specifically, HHS seeks 

comment on the costs and burdens 

associated with posting the required 

information on a public website. HHS 

also seeks comment on the number of 

facilities that will be affected by these 

requirements and the number of 

individuals that would be required to 

receive the required notice. 

TABLE 11—ONE-TIME BURDEN AND COSTS RELATED TO AGREEMENTS BETWEEN FACILITIES AND PROVIDERS

Year 

Estimated 

number of 

respondents 

Estimated 

number of 

responses 

Burden 

per response 

(hours) 

Cost per 

response 

Total 

annual burden 

(hours) 

Total 

estimated 

cost 

2021 ......................................................... 17,467 17,467 4 $364.08 69,868 $6,359,385 

TABLE 12—ONE-TIME AND ANNUAL BURDEN AND COST FOR FACILITIES TO PROVIDE DISCLOSURE ON PATIENT

PROTECTIONS AGAINST BALANCE BILLING

Year 

Estimated 

number of 

respondents 

Estimated 

number of 

responses 

Total 

annual burden 

(hours) 

Total 

estimated 

labor 

cost 

Total 

estimated 

printing and 

materials 

cost 

Total 

estimated 

cost 

2021 ......................................................... 17,467 17,467 59,472 $6,758,568 $2,965 $6,761,533 

2022 ......................................................... 17,467 50,797,996 0 0 2,539,900 2,539,900 

2023 ......................................................... 17,467 50,797,996 0 0 2,539,900 2,539,900 

3 Year Average ........................................ 17,467 33,871,153 19,824 2,252,856 1,694,255 3,947,111 

TABLE 13—ONE-TIME BURDEN AND COST FOR STATES TO DEVELOP STATE SPECIFIC LANGUAGE FOR FACILITIES TO

PROVIDE DISCLOSURE ON PATIENT PROTECTIONS AGAINST BALANCE BILLING

Year 

Estimated 

number of 

respondents 

Estimated 

number of 

responses 

Total 

annual burden 

(hours) 

Total 

estimated 

labor 

cost 

2021 ................................................................................................................. 33 33 99 $10,732.26 

9. ICRs Regarding Plan and Issuer 

Disclosure on Patient Protections 

Against Balance Billing 

Section 9820(c) of the Code, section 

720(c) of ERISA, and section 2799A–5(c) 

of the PHS Act require plans and issuers 

to make publicly available, post on a 

public website of the plan or issuer, and 

include on each explanation of benefits 

for an item or service with respect to 

which the requirements under section 

9816 of the Code, section 716 of ERISA, 

and section 2799A–1 of the PHS Act 

apply, information in plain language on 

the provisions in these sections, and 

sections 2799B–1 and 2799B–2 of the 

PHS Act, and other applicable state laws 

on out-of-network balance billing, and 

information on contacting appropriate 

state and federal agencies in the case 

that an individual believes that such a 

provider or facility has violated the 

prohibition against balance billing. 

The Departments assume that plans 

and issuers will use the model notice 

developed by HHS, and that TPAs will 

develop the notice for self-insured 

plans. The Departments estimate that on 

average for each plan or issuer it will 

take a lawyer 2 hours (at an hourly rate 

of $143.18) to read and understand the 

provided notice and draft any 

additional, clear, and understandable 

language as may be needed, an 

administrative assistant 30 minutes (at 

an hourly rate of $38.86) to prepare the 

final document for distribution and 

make the information publicly available 

within the facility, and a computer 

programmer 1 hour (at an hourly rate of 

$91.96) to post the information on a 

separate or existing web page, in a 

searchable manner, and to make the 

content available in an easily 


jbell on DSKJLSW7X2PROD with RULES2
36942 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

202According to data from the National 

Telecommunications and Information Agency, 34 

percent of households in the United States accessed 

health records or health insurance online. https:// 

www.ntia.doc.gov/blog/2020/more-half-americanhouseholds-used-internet-health-related-activities2019-ntia-data-show. 

downloadable format. The total burden 

for an individual plan or issuer will be 

3.5 hours with an equivalent cost of 

approximately $398. The burden will be 

higher for issuers and TPAs in states 

with applicable state laws or All-Payer 

Model Agreements, but lower for issuers 

and TPAs in states without any 

applicable state laws. The Departments 

estimate that there are 1,553 issuers and 

205 TPAs. The total burden for all 

issuers and TPAs will be 6,153 hours 

with an equivalent cost of $699,245, to 

be incurred as a one-time cost in 2021. 

As DOL, the Treasury Department, and 

HHS share jurisdiction, HHS will 

account for 50 percent of the burden, or 

approximately 3,077 hours with an 

equivalent cost of approximately 

$349,622. 

The Departments assume that plans 

and issuers will also include the 

disclosure along with the explanation of 

benefits at no additional cost. Under the 

same assumptions used to estimate the 

number of disclosures provided by 

nonparticipating facilities and 

nonparticipating providers, the 

Departments estimate that issuers and 

TPAs will include the disclosure to 

approximately 39,690,940 individuals 

who receive services at emergency 

facilities and 11,107,056 individuals 

who received non-emergency services at 

health care facilities, for a total of 

50,797,996 disclosures. The 

Departments assume that 66 percent of 

these notices will be provided by mail 

and the cost of printing is $0.05 per 

page.202 Therefore, the total printing 

and materials cost for sending 

33,526,677 notices by mail will be 

$1,676,334 annually, starting in 2022. 

The Departments assume that for the 

disclosures sent by mail, it will take an 

administrative assistant 1 minute (at an 

hourly rate of $38.86) to print and 

enclose the notice with the explanation 

of benefits. The disclosures sent 

electronically can be sent at minimal 

cost. The total burden for all issuers and 

TPAs is estimated to be 558,778 hours 

with an equivalent cost of $21,714,111. 

There will be no additional mailing 

costs, since the disclosure will be 

enclosed with the explanation of 

benefits. The total annual cost to all 

issuers and TPAs for sending the notices 

is estimated to be approximately 

$23,390,445 starting in 2022. As DOL, 

the Treasury Department and HHS share 

jurisdiction, HHS will account for 50 

percent of the burden, or approximately 

279,389 hours, with an equivalent cost 

of $10,857,056, and printing and 

materials cost of $838,167, for a total 

annual cost of $11,695,223 starting in 

2022. 

TABLE 14—ONE-TIME AND ANNUAL BURDEN AND COST FOR PLANS AND ISSUERS TO PROVIDE DISCLOSURE ON PATIENT

PROTECTIONS AGAINST BALANCE BILLING

Year 

Estimated 

number of 

respondents 

Estimated 

number of 

responses 

Total 

annual burden 

(hours) 

Total 

estimated 

labor 

cost 

Total 

estimated 

printing and 

materials cost 

Total 

estimated 

cost 

2021 ......................................................... 879 879 3,077 $349,622 0 $349,622 

2022 ......................................................... 879 25,398,998 279,389 10,857,056 838,167 11,695,223 

2023 ......................................................... 879 25,398,998 279,389 10,857,056 838,167 11,695,223 

3 year Average ........................................ 879 16,932,958 187,285 7,354,578 558,778 7,913,356 

10. Summary of Annual Burden 

Estimates for Information Collection 

Requirements 

TABLE 15—ANNUAL RECORDKEEPING AND REPORTING REQUIREMENTS

Regulation section OMB control 

No. Respondents Responses 

Burden 

per 

response 

(hours) 

Total annual 

burden 

(hours) 

Hourly 

labor cost 

of 

reporting 

Total labor 

cost of 

reporting 

Printing and 

materials 

cost 

Total cost 

45 CFR 149.140(d) ........ 0938–NEW ... 879 3,801,384 0.19 739,158 $37.50 $27,718,427 0 $27,718,427 

45 CFR 149.30 .............. 0938–NEW ... 84 84 1.50 126 69.87 8,783 197 8,981 

45 CFR 149.150, 

149.450.

0938–NEW ... 1,800 1,800 0.5 900 54.14 48,726 0 48,726 

45 CFR 149.310(a)(4) .... 0938–1094 .... 5,450 5,450 0.25 1362 100.87 137,430 15,461 152,891 

45 CFR 149.410(b)—(e), 

149.420(c)–(i)—Facilities and Providers.

0938–NEW ... 17,309 1,632,707 1.28 2,086,326 38.10 79,482,349 6,216,488 85,698,837 

45 CFR 149.410(b)–(e), 

149.420(c)—(i) –Consumers.

0938–NEW ... 2,440,565 2,440,565 0.75 1,830,424 54.14 99,099,147 0 99,099,147 

45 CFR 149.430—Facilities and Providers.0938–NEW ... 17,467 33,871,153 * 3.5 19,824 * 113.67 2,252,856 1,694,255 3,947,111 

45 CFR 149.430—Facility and Provider agreements.0938–NEW ... 17,467 17,467 4 69,868 91.02 6,359,385 0 6,359,385 

45 CFR 149.430—States 0938–NEW ... 33 33 3 99 108.41 10,732 0 10,732 

Section 2799A–5(c) of 

the PHS Act.

0938–NEW ... 879 16,932,958 0.01 187,285 39.27 7,354,578 558,778 7,913,356 

Total ........................ ....................... 2,501,933 58,703,602 ................ 4,935,372 ................ 222,472,414 8,485,179 230,957,592 

* Estimate based on burden incurred in first year only. 


jbell on DSKJLSW7X2PROD with RULES2
Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 36943 

203 2.5 million ERISA-covered plans × 16% 

grandfathered plans × (100% minus 5% newly nongrandfathered plans) × (11% HMOs + 31% POSs) 

= 161,148 affected plans. 

204For more information on how the Department 

estimates labor costs see: https://www.dol.gov/sites/ 

dolgov/files/EBSA/laws-and-regulations/rules-andregulations/technical-appendices/labor-cost-inputsused-in-ebsa-opr-ria-and-pra-burden-calculationsjune-2019.pdf. 

205According to data from the National 

Telecommunications and Information Agency 

(NTIA), 40.0 percent of individuals age 25 and over 

have access to the internet at work. According to 

a Greenwald & Associates survey, 84 percent of 

plan participants find it acceptable to make 

electronic delivery the default option, which is 

used as the proxy for the number of participants 

who will not opt-out of electronic disclosure that 

are automatically enrolled (for a total of 33.6 

percent receiving electronic disclosure at work). 

Additionally, the NTIA reports that 40.4 percent of 

individuals age 25 and over have access to the 

internet outside of work. According to a Pew 

Research Center survey, 61.0 percent of internet 

users use online banking, which is used as the 

proxy for the number of internet users who will 

affirmatively consent to receiving electronic 

disclosures (for a total of 24.7 percent receiving 

electronic disclosure outside of work). Combining 

the 33.6 percent who receive electronic disclosure 

at work with the 24.7 percent who receive 

electronic disclosure outside of work produces a 

total of 58.2 percent who will receive electronic 

disclosure overall. 

11. Submission of PRA-Related 

Comments 

HHS has submitted a copy of this 

final rule to OMB for its review of the 

rule’s information collection 

requirements. The requirements are not 

effective until they have been approved 

by OMB. 

To obtain copies of the supporting 

statement and any related forms for the 

collections discussed in this rule (CMS– 

9909–IFC), please visit the CMS website 

at www.cms.hhs.gov/ 

PaperworkReductionActof1995, or call 

the Reports Clearance Office at 410– 

786–1326. 

E. Paperwork Reduction Act— 

Department of Labor and Department of 

the Treasury 

As part of the continuing effort to 

reduce paperwork and respondent 

burden, the Departments conduct a 

preclearance consultation program to 

provide the general public and federal 

agencies with an opportunity to 

comment on proposed and continuing 

collections of information in accordance 

with the PRA. This helps to ensure that 

the public understands the 

Departments’ collection instructions, 

respondents can provide the requested 

data in the desired format, reporting 

burden (time and financial resources) is 

minimized, collection instruments are 

clearly understood, and the 

Departments can properly assess the 

impact of collection requirements on 

respondents. 

Under the PRA, an agency may not 

conduct or sponsor, and an individual 

is not required to respond to, a 

collection of information unless it 

displays a valid OMB control number. 

The information collections are 

summarized as follows: 

1. ICRs Regarding Notice of Right To 

Designate a Primary Care Provider (26 

CFR 54.9822–1T, 29 CFR 2590.722) 

These interim final rules require that 

if a group health plan or health 

insurance issuer requires the 

designation by a participant, 

beneficiary, or enrollee of a primary care 

provider, the plan or issuer must 

provide a notice informing each 

participant (in the individual market, 

primary subscriber) of the terms of the 

plan or coverage and their right to 

designate a primary care provider. For 

group health plans and group health 

insurance coverage, the notice must be 

included whenever the plan or issuer 

provides a participant with a summary 

plan description or other similar 

description of benefits under the plan or 

coverage. For individual health 

insurance coverage, the notice must be 

included whenever the issuer provides 

a primary subscriber with a policy, 

certificate, or contract of health 

insurance. These interim final rules 

include model language to satisfy the 

notice requirements. The No Surprises 

Act extends the applicability of the 

patient protections for choice of health 

care professionals. The patient 

protections under section 2719A of the 

PHS Act apply to only nongrandfathered group health plans and 

health insurance issuers offering nongrandfathered group or individual 

health insurance coverage. In contrast, 

the patient protections under the No 

Surprises Act apply generally to all 

group health plans and group and 

individual health insurance coverage, 

including grandfathered health plans. 

Therefore, the requirements regarding 

patient protections for choice of health 

care professional under these interim 

final rules will newly apply to 

grandfathered health plans for plan 

years beginning on or after January 1, 

2022. 

DOL estimates that there are 2.5 

million ERISA-covered plans. Data 

obtained from the 2020 Kaiser/HRET 

Survey of Employer Sponsored Health 

Benefits finds that 16 percent of firms 

offering health benefits offer at least one 

grandfathered health plan. DOL 

estimates that five percent of plans will 

relinquish their grandfathered status in 

2021. The data from the 2020 Kaiser/ 

HRET Survey of Employer Sponsored 

Health Benefits also finds that 11 

percent of plans have an HMO option 

and that 31 percent of plans offer a POS 

option. Thus, DOL estimates that in 

2022, 161,148 grandfathered plans will 

be subject to this notice requirement.203

While not all HMO and POS options 

require the designation of a primary care 

physician or a prior authorization or 

referral before an OB/GYN visit, DOL is 

unable to estimate this number. 

Therefore, these estimates should be 

considered an overestimate of the 

number of affected entities. 

Each of the plans will require a 

compensation and benefits manager to 

spend 10 minutes individualizing the 

model notice to fit the plan’s 

specifications at an hourly rate of 

$134.21.204 In 2022, this results in 

26,858 hours of burden at an equivalent 

cost of $3,604,602. 

Each plan will also require clerical 

staff to spend 5 minutes adding the 

notice to the plan’s documents at an 

hourly rate of $55.14. In 2022, this 

results in 13,429 hours of burden at an 

equivalent cost of $740,473. 

Thus, the total hour burden associated 

with this ICR is 40,287 hours at an 

equivalent cost of $4,345,075. DOL 

shares this burden equally with the 

Department of the Treasury. Therefore, 

the total hour burden for DOL and the 

Treasury Department is each 

approximately 20,143 hours at an 

equivalent cost of $2,172,537. 

The Departments assume that only 

printing and material costs are 

associated with the disclosure 

requirement, because the final 

regulations provide model language that 

can be incorporated into existing plan 

documents, such as an SPD. The 

Departments estimate that the notice 

will require one-half of a page, five 

cents per page printing and material 

cost will be incurred, and 58.2 percent 

of the notices will be delivered 

electronically.205

DOL estimates that there are 62.6 

million ERISA-covered policyholders. 

Data obtained from the 2020 Kaiser/ 

HRET Survey of Employer Sponsored 

Health Benefits finds that 14 percent of 

covered workers are enrolled in a 

grandfathered plan. DOL estimates that 

5 percent of plans would relinquish 

their grandfathered status annually in 

2021. The data from the 2020 Kaiser/ 

HRET Survey of Employer Sponsored 

Health Benefits also finds that 13 

percent of covered workers have an 

HMO option and that 8 percent of 

covered workers have a POS option. 

DOL estimates that plans will produce 


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206 2022: 62.6 million ERISA-covered 

policyholders × 14% of covered employees in 

grandfathered plans × (100% minus 5% newly nongrandfathered plans) × (13% in HMOs + 8% in 

POSs) * 41.8% = 730,346 notices. 

207 2022: $0.05 per page * 1/2 pages per notice * 

730,346 notices = $18,259. 

208 Virginia State Corporation Commission. 

https://scc.virginia.gov/balancebilling#. 

209Washington’s Office of Insurance 

Commissioner. ‘‘Self-Funded Group Health Plans 

Participating in the Balance Billing Protection Act.’’ 

https://www.insurance.wa.gov/self-funded-grouphealth-plans. 

730,346 notices in 2022.206 This results 

in a cost burden of approximately 

$18,259 in 2022.207 DOL shares this 

burden equally with the Department of 

the Treasury. Therefore, the total cost 

burden for DOL is approximately $9,129 

and the total cost burden for the 

Treasury Department is $9,129. The 

summary of burden for this information 

collection has also been provided 

below. 

Summary of Burden 

Type of Review: Revised Collection. 

Agency: DOL–EBSA, Treasury-IRS. 

Title: Affordable Care Act Patient 

Protection Notice. 

OMB Numbers: 1210–0142, 1545– 

2181. 

Affected Public: Businesses or other 

for-profits, Not-for-profit institutions. 

Total Respondents: 161,148. 

Total Responses: 730,346. 

Frequency of Response: Occasionally. 

Estimated Total Annual Burden 

Hours: 40,287 (DOL—20,143; 

Treasury—20,143). 

Estimated Total Annual Burden Cost: 

$18,259 (DOL—$9,129; Treasury— 

$9,129). 

2. ICRs Regarding Information To Be 

Shared About QPA (26 CFR 54.9816– 

6T(d), 29 CFR 2590.716–6(d)) 

These interim final rules require plans 

and issuers to provide certain 

information to nonparticipating 

providers or nonparticipating 

emergency facilities in cases in which 

the recognized amount with respect to 

an item or service furnished by a 

nonparticipating provider or 

nonparticipating emergency facility is 

the QPA. Specifically, plans and issuers 

must provide the following information 

to providers (including air ambulance 

providers) and facilities, when making 

an initial payment or notice of denial of 

payment: (i) The QPA for each item or 

service involved; and (ii) a statement 

certifying that the plan or issuer has 

determined that the QPA applies for the 

purposes of the recognized amount (or, 

in the case of air ambulance services, for 

calculating the participant’s, 

beneficiary’s, or enrollee’s cost sharing), 

and that each QPA was determined in 

compliance with 26 CFR 54.9816–6T(d), 

29 CFR 2590.716–6, or 45 CFR 149.140, 

as applicable. Additionally, upon 

request of the provider or facility, the 

plan or issuer must provide in a timely 

manner the following information: (i) 

Whether the QPA for items and services 

involved included contracted rates that 

were not on a fee-for-service basis for 

those specific items and services and 

whether the QPA for those items and 

services was determined using 

underlying fee schedule rates or a 

derived amount; (ii) if applicable, 

information to identify which database 

was used to determine the QPA; and 

(iii) if applicable, a statement that the 

plan’s or issuer’s contracted rates 

include risk-sharing, bonus, or incentive 

based payments for covered items and 

services (as applicable) that were 

excluded for purposes of calculating the 

QPA. 

As discussed earlier in HHS’ PRA 

section, the total annual burden for all 

issuers and TPAs for providing the 

initial and additional information 

related to QPA will be 1,478,316 hours, 

with an equivalent cost of $55,436,853. 

As HHS, DOL, and the Treasury 

Department share jurisdiction, it is 

estimated that 50 percent of the burden 

will be accounted for by the HHS, 25 

percent of the burden will be accounted 

for by the Treasury Department, and the 

remaining 25 percent will be accounted 

for by DOL. Thus, HHS will account for 

approximately 739,158 burden hours 

with an equivalent cost of 

approximately $27,718,427. DOL and 

the Treasury Department will each 

account for 369,579 burden hours with 

an equivalent cost of approximately 

$13,859,214. 

3. ICRs Regarding Complaints Process 

for Surprise Medical Bills (26 CFR 

54.9816–7T, 29 CFR 2590.716–7) 

The No Surprises Act directs the 

Departments to establish a process to 

receive complaints regarding violations 

of the application of the QPA by group 

health plans and health insurance 

issuers offering group or individual 

health coverage, and violations by 

health care providers, facilities, and 

providers of air ambulance services of 

the requirements under sections 2799B– 

2 and 2799B–3 of the PHS Act. The 

Departments define a complainant as 

any individual, or their authorized 

representative, who files a complaint, as 

described and defined in these interim 

final rules. This regulatory action is 

taken as required by the No Surprises 

Act, which directs the Departments to 

create a process for balance billing 

complaints regarding plans and issuers, 

and directs HHS to create a process for 

balance billing complaints regarding 

providers and facilities. 

As discussed earlier in HHS’ PRA 

section, the total burden for all 

complainants is estimated to be 1,800 

hours, with an equivalent annual cost of 

approximately $97,452. As HHS, DOL, 

and the Treasury Department share 

jurisdiction, it is estimated that 50 

percent of the burden will be accounted 

for by the HHS, 25 percent of the burden 

will be accounted for by the Treasury 

Department, and the remaining 25 

percent will be accounted for by DOL. 

HHS will account for approximately 900 

burden hours with an equivalent cost of 

approximately $48,726. DOL and the 

Treasury Department will each account 

for approximately 450 burden hours 

with an equivalent cost of 

approximately $24,363. 

4. ICRs Regarding Opt-In State Balance 

Bill Process (26 CFR 54.9816–3T, 29 

CFR 2590.716–3) 

The interim final rules allow plans to 

voluntarily opt in to state law that 

provides for a method for determining 

the cost-sharing amount or total amount 

payable under such a plan, where a state 

has chosen to expand access to such 

plans, to satisfy their obligations under 

section 9816(a)–(d) of the Code, section 

716(a)–(d) of ERISA, and section 

2799A–1(a)–(d) of the PHS Act. A plan 

that has chosen to opt into a state law 

must prominently display in its plan 

materials describing the coverage of outof-network services a statement that the 

plan has opted into a specified state 

law, identify the state (or states), and 

include a general description of the 

items and services provided by 

nonparticipating facilities and providers 

that are covered by the specified state 

law. 

Currently, there are four states that 

allow self-insured plans to opt in: 

Nevada, New Jersey, Washington, and 

Virginia. According to the Nevada 

Department of Health and Human 

Services’ 2020 Annual Report, 20 

private entities or organizations have 

elected to participate in the state’s 

balance billing law. In addition, 

according to the Virginia State 

Corporation Commission, 231 private 

self-insured plans in Virginia have 

elected to participate in the state’s 

balance billing law.208 Furthermore, 

according to Washington’s Office of the 

Insurance Commissioner, 309 private 

self-insured plans in Washington have 

elected to participate in the state’s 

balance billing law.209 DOL does not 

have data on the number of self-insured 

plans that have opted into New Jersey’s 


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210Nevada Department of Health and Human 

Services’ Office of Consumer Health Assistance. 

‘‘Payment for Medically Necessary Emergency 

Services Provided Out-of-Network 2020 Annual 

Report.’’ (2020). https://dhhs.nv.gov/uploadedFiles/ 

dhhsnvgov/content/Programs/CHA/ 

AB469%20LCB%20Annual%20Report%20

2020.pdf. 

211Washington’s Office of Insurance 

Commissioner. ‘‘Self-Funded Group Health Plans 

Participating in the Balance Billing Protection Act.’’ 

https://www.insurance.wa.gov/self-funded-grouphealth-plans. 

212Employee Benefits Security Administration. 

‘‘Health Insurance Coverage Bulletin: Abstract of 

Auxiliary Data for the March 2019 Annual Social 

and Economic Supplement to the Current 

Population Survey.’’ (2019). https://www.dol.gov/ 

sites/dolgov/files/EBSA/researchers/data/healthand-welfare/health-insurance-coverage-bulletin2019.pdf. 

213New Jersey: 335 × (0.5/2.7) = 62 self-insured 

plans; 62 self-insured plans—5 non-federal selfinsured plans = 57 private self-insured plans. 

214For more information on how the Department 

estimates labor costs see: https://www.dol.gov/sites/ 

dolgov/files/EBSA/laws-and-regulations/rules-andregulations/technical-appendices/labor-cost-inputsused-in-ebsa-opr-ria-and-pra-burden-calculationsjune-2019.pdf. 

215For more information on how the Department 

estimates labor costs see: https://www.dol.gov/sites/ 

dolgov/files/EBSA/laws-and-regulations/rules-andregulations/technical-appendices/labor-cost-inputsused-in-ebsa-opr-ria-and-pra-burden-calculationsjune-2019.pdf. 

216 (6,000,000 participants with self-insured 

ERISA-covered plans) / 617 self-insured ERISAcovered plans = 9,724 participants per self-insured 

ERISA-covered plan. 

217According to data from the National 

Telecommunications and Information Agency, 34 

percent of households in the United States accessed 

health records or health insurance online. https:// 

www.ntia.doc.gov/blog/2020/more-half-americanhouseholds-used-internet-health-related-activities2019-ntia-data-show. 

218 9,724 participants × 0.66 × $0.05 = $321. 

balance billing law. In order to estimate 

the number of self-insured plans that 

have opted into the balance billing law 

for New Jersey, DOL has scaled 

Washington’s estimate by the number of 

participants with self-insured ERISAcovered plans.210 According to the 2019 

Health Insurance Coverage Bulletin, 

there are respectively, 0.7 million, 2.1 

million, and 2.7 million with selfinsured ERISA-covered plans in 

Nevada, Virginia, and New Jersey. 

Additionally, according to the 

Washington’s Office of Insurance 

Commissioner, about 0.5 million selfinsured participants have opted into 

Washington’s balance billing law.211

This results in a total of 6 million 

participants.212 Thus, DOL estimates 

that 20, 231, 309, and 57 private selfinsured plans will opt in respectively in 

Nevada, Virginia, Washington, and New 

Jersey, resulting in a total of 617 selfinsured plans.213 These plans will incur 

the one-time burden and cost to include 

the disclosure in their plan documents 

in 2022. 

DOL estimates that it will take 1 hour 

for an administrative assistant, with a 

wage rate of $55.14, to gather 

information and review information.214

This results in hour burden of 617 

hours, with an equivalent cost of 

$34,023. DOL estimates that it will take 

30 minutes for a benefits manager, with 

a wage rate of $134.21, to gather 

information and review information.215

This results in hour burden of 309 

hours, with an equivalent cost of 

$41,406. In 2022, the total hour burden 

is 926 hours, with an equivalent cost of 

$75,430. 

The average number of participants in 

a self-insured ERISA-covered plan that 

will opt into the four states’ balance 

billing laws is 9,724.216 DOL assumes 

that only printing and material costs are 

associated with the disclosure 

requirement, because the notice can be 

incorporated into existing plan 

documents. DOL estimates that the 

disclosure will require one-half of a 

page, at a cost of $0.05 per page for 

printing and materials, and 34 percent 

of plan documents will be delivered 

electronically at minimal cost.217 Thus, 

in 2022, the cost to deliver 66 percent 

of these disclosures in print is estimated 

to be approximately $321.218

Thus, the 3-year average hour burden 

is 309 hours, with an equivalent cost of 

$25,143. The 3-year average cost burden 

is $107. 

5. ICRs Regarding Plan and Issuer 

Disclosure on Patient Protections 

Against Balance Billing 

Section 9820(c) of the Code, section 

720(c) of ERISA, and section 2799A–5(c) 

of the PHS Act require plans and issuers 

to make publicly available, post on a 

public website of the plan or issuer, and 

include on each explanation of benefits 

for an item or service with respect to 

which the requirements under section 

9816 of the Code, section 716 of ERISA, 

and section 2799A–1 of the PHS Act 

apply, information in plain language on 

the provisions in these sections, and 

sections 2799B–1 and 2799B–2 of the 

PHS Act, and other applicable state laws 

on out-of-network balance billing, and 

information on contacting appropriate 

state and federal agencies in the case 

that an individual believes that such a 

provider or facility has violated the 

prohibition against balance billing. 

As discussed earlier in HHS’ PRA 

section, the total burden for all issuers 

and TPAs will be 6,153 hours with an 

equivalent cost of $699,245 in 2021. As 

HHS, DOL, and the Treasury 

Department share jurisdiction, it is 

estimated that 50 percent of the burden 

will be accounted for by the HHS, 25 

percent of the burden will be accounted 

for by the Treasury Department, and the 

remaining 25 percent will be accounted 

for by DOL. HHS will account for 

approximately 3,077 hours with an 

equivalent cost of approximately 

$349,622. DOL and the Treasury 

Department will each account for 

approximately 1,539 hours with an 

equivalent cost of approximately 

$174,811. 

Starting in 2022, the total burden for 

all issuers and TPAs is estimated to be 

558,778 hours with an equivalent cost of 

$21,714,111. The total printing and 

materials cost for sending 33,526,677 

notices by mail will be $1,676,334 

annually. As HHS, DOL, and the 

Treasury Department share jurisdiction, 

it is estimated that 50 percent of the 

burden will be accounted for by the 

HHS, 25 percent of the burden will be 

accounted for by the Treasury 

Department, and the remaining 25 

percent will be accounted for by DOL. 

Thus, HHS will account for 279,389 

hours, with an equivalent cost of 

$10,857,056, and printing and materials 

cost of $838,167 starting in 2022. DOL 

and the Treasury Department will each 

account for 139,695 hours with an 

equivalent cost of $419,084. 

Thus, the 3-year average hour burden 

associated with this requirement for 

DOL and the Treasury Department is 

93,643 hours each with an equivalent 

cost of $7,354,578. The 3-year average 

cost burden for DOL and Treasury is 

$279,389 each. 

The summary of burden below 

encompasses the following ICRs: (1) 

Information to be Shared about the QPA 

(26 CFR 54.9816–6T(d), 29 CFR 

2590.716–6(d)), (2) Complaints Process 

for Surprise Medical Bills (26 CFR 

54.9816–7T, 29 CFR 2590.716–7), (3) 

Opt-In State Balance Bill Process (26 

CFR 54.9816–3T, 29 CFR 2590.716–3), 

and (4) Plan and Issuer Disclosure on 

Patient Protections Against Balance 

Billing. 

Summary of Burden 

Type of Review: New Collection. 

Agency: DOL–EBSA, Treasury. 

Title: No Surprise Billing. 

OMB Numbers: 1210–NEW, 1545– 

NEW. 

Affected Public: Businesses or other 

for-profits, Not-for-profit institutions. 

Total Respondents: DOL—1,985; 

Treasury—1,779. 

Total Responses: DOL—10,368,277; 

Treasury—10,368,071. 

Frequency of Response: Occasionally. 

Estimated Total Annual Burden 

Hours: 927,652 (DOL—463,980, 

Treasury—463,672). 


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Estimated Total Annual Burden Cost: 

$558,885 (DOL—$279,496, Treasury— 

$279, 389). 

F. 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 to prepare an initial 

regulatory flexibility analysis to 

describe the impact of the proposed rule 

on small entities, unless the head of the 

agency can certify that the rule will 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-forprofit 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.’’ HHS uses a change in revenues 

of more than 3 to 5 percent as its 

measure of significant economic impact 

on a substantial number of small 

entities. Individuals and states are not 

included in the definition of a small 

entity. These interim final rules are not 

preceded by a general notice of 

proposed rulemaking, and thus the 

requirements of RFA do not apply. 

G. Unfunded Mandates Reform Act 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 (UMRA) 

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. In 2021, that 

threshold is approximately $158 

million. These interim final rules were 

not preceded by a general notice of 

proposed rulemaking, and thus the 

requirements of UMRA do not apply. 

H. Federalism 

Executive Order 13132 outlines 

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 

promulgating 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 the interim final rules. 

These interim final rules protect 

participants, beneficiaries, or enrollees 

in group health plans and group and 

individual health insurance coverage, 

and covered individuals in FEHB plans, 

from surprise medical bills for 

emergency services, air ambulance 

services furnished by nonparticipating 

providers, and non-emergency services 

furnished by nonparticipating providers 

at participating facilities in certain 

circumstances. A number of states 

currently have laws related to surprise 

medical bills. The Departments are of 

the view that Congress did not intend to 

supplant state laws regarding balance 

billing, but rather to supplement such 

laws. The provisions in these interim 

final rules are consistent with the 

statute’s general approach of 

supplementing state law. In addition, 

the No Surprises Act and these interim 

final rules recognize states’ traditional 

role as the primary regulators of health 

insurance issuers, providers, and 

facilities. The No Surprises Act 

authorizes states to enforce the new 

requirements regarding health insurance 

coverage, including those related to 

balance billing, with respect to 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 not 

otherwise enforcing, or HHS has made 

a determination that a state has failed to 

substantially enforce the requirements. 

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 NAIC, and consulting with state 

insurance officials on a state-by-state 

basis. In addition, the Departments 

consulted with the NAIC, as required by 

the No Surprises Act, to establish the 

geographic regions to be used in the 

methodology for calculating the QPA. 

OPM concluded that it would be 

inappropriate for FEHB plans to adopt 

varying state standards, and consistent 

with the FEHBA, it would adopt state 

laws where appropriate pursuant to 

bilaterally negotiated FEHB contracts. 

While developing these interim final 

rules, the Departments attempted to 

balance the states’ interests in regulating 

health insurance issuers, providers, and 

facilities with the need to ensure at least 

the minimum federal consumer 

protections in every state. By doing so, 

the Departments complied with the 

requirements of Executive Order 13132. 

I. Congressional Review Act 

These interim final rules are subject to 

the Congressional Review Act 

provisions of the Small Business 

Regulatory Enforcement Fairness Act of 

1996 (5 U.S.C. 801 et seq.) and will be 

transmitted to the Congress and to the 

Comptroller General for review in 

accordance with such provisions. 

Statutory Authority 

The Office of Personnel Management 

regulations are adopted pursuant to the 

authority contained in 5 U.S.C. 8902(p) 

and 5 U.S.C. 8913. 

The Department of the Treasury 

regulations are adopted pursuant to the 

authority contained in sections 7805 

and 9833 of the Code. 

The Department of Labor regulations 

are adopted pursuant to the authority 

contained in 29 U.S.C. 1002, 1135, 1182, 

1185d, 1191a, 1191b, and 1191c; 

Secretary of Labor’s Order 1–2011, 77 

FR 1088 (Jan. 9, 2012). 

The Department of Health and Human 

Services regulations are adopted 

pursuant to the authority contained in 

sections 2701 through 2763, 2791, 2792, 

2794, 2799A–1 through 2799B–9 of the 

PHS Act (42 U.S.C. 300gg—300gg–63, 

300gg–91, 300gg–92, 300gg–94, 300gg– 

300gg139), as amended; sections 1311 

and 1321 of the ACA (42 U.S.C. 13031 

and 18041). 

List of Subjects 

5 CFR Part 890 

Administrative practice and 

procedure, Government employees, 

Health facilities, Health insurance, 

Health professions, Hostages, Iraq, 

Kuwait, Lebanon, Military personnel, 

Reporting and recordkeeping 

requirements, Retirement. 

26 CFR Part 54 

Excise taxes, Health care, Health 

insurance, Pensions, Reporting and 

recordkeeping requirements. 

29 CFR Part 2590 

Continuation coverage, Disclosure, 

Employee benefit plans, Group health 

plans, Health care, Health insurance, 

Medical child support, Reporting and 

recordkeeping requirements. 

45 CFR Part 144 

Health care, Health insurance, 

Reporting and recordkeeping 

requirements. 


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45 CFR Part 147 

Health care, Health insurance, 

Reporting and recordkeeping 

requirements, and State regulation of 

health insurance. 

45 CFR Part 149 

Balance billing, Health care, Health 

insurance, Reporting and recordkeeping 

requirements, Surprise billing, State 

regulation of health insurance, 

Transparency in coverage. 

45 CFR Part 156 

Administrative practice and 

procedure, Advertising, Advisory 

committees, Age discrimination, Alaska, 

Brokers, Citizenship and naturalization, 

Civil rights, Conflict of interests, 

Consumer protection, Grant programshealth, Grants administration, Health 

care, Health insurance, Health 

maintenance organization (HMO), 

Health records, Hospitals, Indians, 

Individuals with disabilities, 

Intergovernmental relations, Loan 

programs-health, Medicaid, 

Organization and functions 

(Government agencies), Prescription 

drugs, Public assistance programs, 

Reporting and recordkeeping 

requirements, Sex discrimination, State 

and local governments, Sunshine Act, 

Technical assistance, Women, Youth. 

Laurie Bodenheimer, 

Associate Director, Healthcare and Insurance 

Office of Personnel Management. 

Douglas W. O’Donnell, 

Deputy Commissioner for Services and 

Enforcement, Internal Revenue Service. 

Mark J. Mazur, 

Acting Assistant Secretary of the Treasury 

(Tax Policy). 

Ali Khawar, 

Assistant Secretary, Employee Benefits 

Security Administration, Department of 

Labor. 

Xavier Becerra, 

Secretary, Department of Health and Human 

Services. 

Office of Personnel Management 

For the reasons stated in the 

preamble, the Office of Personnel 

Management amends 5 CFR part 890 as 

follows: 

PART 890—FEDERAL EMPLOYEES 

HEALTH BENEFITS PROGRAM 

■ 1. The authority citation for part 890 

continues to read as follows: 

Authority: 5 U.S.C. 8913; Sec. 890.102 

also issued under sections 11202(f), 11232(e), 

and 11246 (b) of Pub. L. 105–33, 111 Stat. 

251; Sec. 890.111 also issued under section 

1622(b) of Pub. L. 104–106, 110 Stat. 521 (36 

U.S.C. 5522); Sec. 890.112 also issued under 

section 1 of Pub. L. 110–279, 122 Stat. 2604 

(2 U.S.C. 2051); Sec. 890.113 also issued 

under section 1110 of Pub. L. 116–92, 133 

Stat. 1198 (5 U.S.C. 8702 note); Sec. 890.301 

also issued under section 311 of Pub. L. 111– 

3, 123 Stat. 64 (26 U.S.C. 9801); Sec. 

890.302(b) also issued under section 1001 of 

Pub. L. 111–148, 124 Stat. 119, as amended 

by Pub. L. 111–152, 124 Stat. 1029 (42 U.S.C. 

300gg–14); Sec. 890.803 also issued under 50 

U.S.C. 3516 (formerly 50 U.S.C. 403p) and 22 

U.S.C. 4069c and 4069c–1; subpart L also 

issued under section 599C of Pub. L. 101– 

513, 104 Stat. 2064 (5 U.S.C. 5561 note), as 

amended; and subpart M also issued under 

section 721 of Pub. L. 105–261 (10 U.S.C. 

1108), 112 Stat. 2061. 

Subpart A—Administration and 

General Provisions 

■ 2. Section 890.107 is amended by 

adding paragraph (e) to read as follows: 

§ 890.107 Court review. 

* * * * * 

(e) A suit for equitable relief founded 

on 5 U.S.C. chapter 89 that is based on 

5 U.S.C. 8902(p) and is governed by 5 

CFR part 890 must be brought against 

OPM by December 31 of the 3rd year 

after the year in which disputed services 

were rendered. 

■ 3. Section 890.114 is added to subpart 

A to read as follows: 

§ 890.114 Surprise billing. 

(a) A carrier must comply with 

requirements described in 26 CFR 

54.9816–3T through 54.9816–6T, 

54.9817–1T, and 54.9822–1T, 29 CFR 

2590.716–3 through 2590.716–6, 

2590.717–1, and 2590.722, and 45 CFR 

149.30, 149.110 through 149.140, and 

149.310 in the same manner as such 

provisions apply to a group health plan 

or health insurance issuer offering group 

or individual health insurance coverage, 

subject to 5 U.S.C. 8902(m)(1), and the 

provisions of the carrier’s contract. For 

purposes of application of such 

sections, all carriers are deemed to offer 

health benefits in the large group 

market. 

(b) For purposes of the provisions 

referenced in paragraph (a) of this 

section: 

Group health plan or plan shall mean 

a ‘‘health benefits plan’’ defined at 5 

U.S.C. 8901(6), which is a Federal 

governmental plan offered pursuant to 5 

U.S.C. chapter 89. 

Health insurance issuer or issuer shall 

include a carrier defined at 5 U.S.C. 

8901(7). Where the carrier for a health 

benefits plan is a voluntary association, 

an association of organizations or 

entities, or is otherwise comprised of 

multiple entities, each entity is 

responsible for compliance in the same 

manner as such sections apply to group 

health plans and issuers. If and to the 

extent an entity offering a health 

benefits plan under 5 U.S.C. chapter 89 

is licensed under state law and is 

properly considered an issuer as defined 

at section 2791 of the Public Health 

Service Act, the entity is considered a 

carrier to the extent of its FEHB health 

benefits plan contractual and regulatory 

compliance. 

Participant, beneficiary, or enrollee 

shall include an ‘‘enrollee’’ or ‘‘covered 

individual’’ as defined by 5 CFR 

890.101, as appropriate. 

(c) When a complaint challenges a 

carrier’s action or inaction with respect 

to the surprise billing provisions, OPM 

will coordinate with the Departments of 

Health and Human Services, Labor, and 

the Treasury to resolve the complaint. 

Department of the Treasury 

Internal Revenue Service 

Accordingly, 26 CFR part 54 is 

amended as follows: 

PART 54—PENSION EXCISE TAXES 

■ Paragraph 4. The authority citation 

for part 54 continues to read, in part, as 

follows: 

Authority: 26 U.S.C. 7805, unless 

otherwise noted. 

* * * * * 

■ Par. 5. Section 54.9801–1T is added to 

read as follows: 

§ 54.9801–1T Basis and scope 

(temporary). 

(a) Statutory basis. This section and 

§§ 54.9801–2 through 54.9801–6, 

54.9802–1, 54.9802–2, 54.9802–3T, 

54.9802–4, 54.9811–1, 54.9812–1, 

54.9815–1251, 54.9815–2704, 54.9815– 

2705, 54.9815–2708, 54.9815–2711, 

54.9815–2712, 54.9815–2713, 54.9815– 

2713A, 54.9815–2714, 54.9815–2715, 

54.9815–2715A1, 54.9815–2715A2, 

54.9815–2715A3, 54.9815–2719, 

54.9815–2715A, 54.9816–1 through 

9816–7, 54.9831–1, and 54.9833–1 

implement Chapter 100 of Subtitle K of 

the Internal Revenue Code of 1986. 

(b) Scope. A group health plan or 

health insurance issuer offering group 

health insurance coverage may provide 

greater rights to participants and 

beneficiaries than those set forth in the 

portability and market reform sections 

of this part. This part sets forth 

minimum requirements for group health 

plans and group health insurance 

issuers offering group health insurance 

coverage concerning certain consumer 

protections of the Health Insurance 

Portability and Accountability Act 

(HIPAA), including special enrollment 

periods and the prohibition against 


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36948 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

discrimination based on a health factor, 

as amended by the Patient Protection 

and Affordable Care Act (Affordable 

Care Act). Other consumer protection 

provisions, including other protections 

provided by the Affordable Care Act, the 

Mental Health Parity and Addiction 

Equity Act, and the No Surprises Act are 

set forth in this part. 

(c) Similar requirements under the 

Employee Retirement Income Security 

Act and the Public Health Service Act. 

Sections 701, 702, 703, 711, 712, 716, 

717, 732, and 733 of the Employee 

Retirement Income Security Act of 1974 

and sections 2701, 2702, 2704, 2705, 

2721, 2791, 2799A–1, and 2799A–2 of 

the Public Health Service Act impose 

requirements similar to those imposed 

under Chapter 100 of Subtitle K with 

respect to health insurance issuers 

offering group health insurance 

coverage. See 29 CFR part 2590 and 45 

CFR parts 144, 146, 148, and 149. See 

also part B of Title XXVII of the Public 

Health Service Act and 45 CFR parts 

148 and 149 for other rules applicable 

to health insurance offered in the 

individual market (defined in 

§ 54.9801–2). 

■ Par. 6. Section 54.9801–2T is added to 

read as follows: 

§ 54.9801–2T Definitions (temporary). 

Unless otherwise provided, the 

definitions in this section and 

§ 54.9801–2 govern in applying the 

provisions of sections 9801 through 

9825 and 9831 through 9834. 

Affiliation period means a period of 

time that must expire before health 

insurance coverage provided by an 

HMO becomes effective, and during 

which the HMO is not required to 

provide benefits. 

COBRA definitions: 

(1) COBRA means title X of the 

Consolidated Omnibus Budget 

Reconciliation Act of 1985, as amended. 

(2) COBRA continuation coverage 

means coverage, under a group health 

plan, that satisfies an applicable COBRA 

continuation provision. 

(3) COBRA continuation provision 

means section 4980B (other than 

paragraph (f)(1) of section 4980B insofar 

as it relates to pediatric vaccines), 

sections 601–608 of ERISA, or title XXII 

of the PHS Act. 

(4) Exhaustion of COBRA 

continuation coverage means that an 

individual’s COBRA continuation 

coverage ceases for any reason other 

than either failure of the individual to 

pay premiums on a timely basis, or for 

cause (such as making a fraudulent 

claim or an intentional 

misrepresentation of a material fact in 

connection with the plan). An 

individual is considered to have 

exhausted COBRA continuation 

coverage if such coverage ceases— 

(i) Due to the failure of the employer 

or other responsible entity to remit 

premiums on a timely basis; 

(ii) When the individual no longer 

resides, lives, or works in the service 

area of an HMO or similar program 

(whether or not within the choice of the 

individual) and there is no other 

COBRA continuation coverage available 

to the individual; or 

(iii) When the individual incurs a 

claim that would meet or exceed a 

lifetime limit on all benefits and there 

is no other COBRA continuation 

coverage available to the individual. 

Condition means a medical condition. 

Creditable coverage means creditable 

coverage within the meaning of 

§ 54.9801–4(a). 

Dependent means any individual who 

is or may become eligible for coverage 

under the terms of a group health plan 

because of a relationship to a 

participant. 

Employee Retirement Income Security 

Act of 1974 (ERISA) means the 

Employee Retirement Income Security 

Act of 1974, as amended (29 U.S.C. 1001 

et seq.). 

Enroll means to become covered for 

benefits under a group health plan (that 

is, when coverage becomes effective), 

without regard to when the individual 

may have completed or filed any forms 

that are required in order to become 

covered under the plan. For this 

purpose, an individual who has health 

coverage under a group health plan is 

enrolled in the plan regardless of 

whether the individual elects coverage, 

the individual is a dependent who 

becomes covered as a result of an 

election by a participant, or the 

individual becomes covered without an 

election. 

Enrollment date means the first day of 

coverage or, if there is a waiting period, 

the first day of the waiting period. If an 

individual receiving benefits under a 

group health plan changes benefit 

packages, or if the plan changes group 

health insurance issuers, the 

individual’s enrollment date does not 

change. 

Excepted benefits means the benefits 

described as excepted in § 54.9831(c). 

First day of coverage means, in the 

case of an individual covered for 

benefits under a group health plan, the 

first day of coverage under the plan and, 

in the case of an individual covered by 

health insurance coverage in the 

individual market, the first day of 

coverage under the policy or contract. 

Genetic information has the meaning 

given the term in § 54.9802–3T(a)(3). 

Group health insurance coverage 

means health insurance coverage offered 

in connection with a group health plan. 

Individual health insurance coverage 

reimbursed by the arrangements 

described in 29 CFR 2510.3–1(l) is not 

offered in connection with a group 

health plan, and is not group health 

insurance coverage, provided all the 

conditions in 29 CFR 2510.3–1(l) are 

satisfied. 

Group health plan or plan means a 

group health plan within the meaning of 

§ 54.9831–1(a). 

Group market means the market for 

health insurance coverage offered in 

connection with a group health plan. 

(However, certain very small plans may 

be treated as being in the individual 

market, rather than the group market; 

see the definition of individual market 

in this section.) 

Health insurance coverage means 

benefits consisting of medical care 

(provided directly, through insurance or 

reimbursement, or otherwise) under any 

hospital or medical service policy or 

certificate, hospital or medical service 

plan contract, or HMO contract offered 

by a health insurance issuer. Health 

insurance coverage includes group 

health insurance coverage, individual 

health insurance coverage, and shortterm, limited-duration insurance. 

However, benefits described in 

§ 54.9831(c)(2) are not treated as 

benefits consisting of medical care. 

Health insurance issuer or issuer 

means an insurance company, insurance 

service, or insurance organization 

(including an HMO) that is required to 

be licensed to engage in the business of 

insurance in a State and that is subject 

to State law that regulates insurance 

(within the meaning of section 514(b)(2) 

of ERISA). Such term does not include 

a group health plan. 

Health maintenance organization or 

HMO means— 

(1) A federally qualified health 

maintenance organization (as defined in 

section 1301(a) of the PHS Act); 

(2) An organization recognized under 

State law as a health maintenance 

organization; or 

(3) A similar organization regulated 

under State law for solvency in the same 

manner and to the same extent as such 

a health maintenance organization. 

Individual health insurance coverage 

means health insurance coverage offered 

to individuals in the individual market, 

but does not include short-term, 

limited-duration insurance. Individual 

health insurance coverage can include 

dependent coverage. 

Individual market means the market 

for health insurance coverage offered to 

individuals other than in connection 


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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 36949 

with a group health plan. Unless a State 

elects otherwise in accordance with 

section 2791(e)(1)(B)(ii) of the PHS Act, 

such term also includes coverage offered 

in connection with a group health plan 

that has fewer than two participants 

who are current employees on the first 

day of the plan year. 

Issuer means a health insurance 

issuer. 

Late enrollee means an individual 

whose enrollment in a plan is a late 

enrollment. 

Late enrollment means enrollment of 

an individual under a group health plan 

other than on the earliest date on which 

coverage can become effective for the 

individual under the terms of the plan; 

or through special enrollment. (For rules 

relating to special enrollment, see 

§ 54.9801–6.) If an individual ceases to 

be eligible for coverage under a plan, 

and then subsequently becomes eligible 

for coverage under the plan, only the 

individual’s most recent period of 

eligibility is taken into account in 

determining whether the individual is a 

late enrollee under the plan with respect 

to the most recent period of coverage. 

Similar rules apply if an individual 

again becomes eligible for coverage 

following a suspension of coverage that 

applied generally under the plan. 

Medical care has the meaning given 

such term by section 213(d), determined 

without regard to section 213(d)(1)(C) 

and so much of section 213(d)(1)(D) as 

relates to qualified long-term care 

insurance. 

Medical condition or condition means 

any condition, whether physical or 

mental, including, but not limited to, 

any condition resulting from illness, 

injury (whether or not the injury is 

accidental), pregnancy, or congenital 

malformation. However, genetic 

information is not a condition. 

Participant means participant within 

the meaning of section 3(7) of ERISA. 

Placement, or being placed, for 

adoption means the assumption and 

retention of a legal obligation for total or 

partial support of a child by a person 

with whom the child has been placed in 

anticipation of the child’s adoption. The 

child’s placement for adoption with 

such person ends upon the termination 

of such legal obligation. 

Plan year means the year that is 

designated as the plan year in the plan 

document of a group health plan, except 

that if the plan document does not 

designate a plan year or if there is no 

plan document, the plan year is— 

(1) The deductible or limit year used 

under the plan; 

(2) If the plan does not impose 

deductibles or limits on a yearly basis, 

then the plan year is the policy year; 

(3) If the plan does not impose 

deductibles or limits on a yearly basis, 

and either the plan is not insured or the 

insurance policy is not renewed on an 

annual basis, then the plan year is the 

employer’s taxable year; or 

(4) In any other case, the plan year is 

the calendar year. 

Preexisting condition exclusion means 

a limitation or exclusion of benefits 

(including a denial of coverage) based 

on the fact that the condition was 

present before the effective date of 

coverage (or if coverage is denied, the 

date of the denial) under a group health 

plan or group or individual health 

insurance coverage (or other coverage 

provided to federally eligible 

individuals pursuant to 45 CFR part 

148), whether or not any medical 

advice, diagnosis, care, or treatment was 

recommended or received before that 

day. A preexisting condition exclusion 

includes any limitation or exclusion of 

benefits (including a denial of coverage) 

applicable to an individual as a result of 

information relating to an individual’s 

health status before the individual’s 

effective date of coverage (or if coverage 

is denied, the date of the denial) under 

a group health plan, or group or 

individual health insurance coverage (or 

other coverage provided to federally 

eligible individuals pursuant to 45 CFR 

part 148), such as a condition identified 

as a result of a pre-enrollment 

questionnaire or physical examination 

given to the individual, or review of 

medical records relating to the preenrollment period. 

Public health plan means public 

health plan within the meaning of 

§ 54.9801–4(a)(1)(ix). 

Public Health Service Act (PHS Act) 

means the Public Health Service Act (42 

U.S.C. 201, et seq.). 

Short-term, limited-duration 

insurance means health insurance 

coverage provided pursuant to a 

contract with an issuer that: 

(1) Has an expiration date specified in 

the contract that is less than 12 months 

after the original effective date of the 

contract and, taking into account 

renewals or extensions, has a duration 

of no longer than 36 months in total; 

(2) With respect to policies having a 

coverage start date before January 1, 

2019, displays prominently in the 

contract and in any application 

materials provided in connection with 

enrollment in such coverage in at least 

14 point type the language in the 

following Notice 1, excluding the 

heading ‘‘Notice 1,’’ with any additional 

information required by applicable state 

law: 

Notice 1 

This coverage is not required to comply 

with certain federal market requirements for 

health insurance, principally those contained 

in the Affordable Care Act. Be sure to check 

your policy carefully to make sure you are 

aware of any exclusions or limitations 

regarding coverage of preexisting conditions 

or health benefits (such as hospitalization, 

emergency services, maternity care, 

preventive care, prescription drugs, and 

mental health and substance use disorder 

services). Your policy might also have 

lifetime and/or annual dollar limits on health 

benefits. If this coverage expires or you lose 

eligibility for this coverage, you might have 

to wait until an open enrollment period to get 

other health insurance coverage. Also, this 

coverage is not ‘‘minimum essential 

coverage.’’ If you don’t have minimum 

essential coverage for any month in 2018, 

you may have to make a payment when you 

file your tax return unless you qualify for an 

exemption from the requirement that you 

have health coverage for that month. 

(3) With respect to policies having a 

coverage start date on or after January 1, 

2019, displays prominently in the 

contract and in any application 

materials provided in connection with 

enrollment in such coverage in at least 

14 point type the language in the 

following Notice 2, excluding the 

heading ‘‘Notice 2,’’ with any additional 

information required by applicable state 

law: 

Notice 2 

This coverage is not required to comply 

with certain federal market requirements for 

health insurance, principally those contained 

in the Affordable Care Act. Be sure to check 

your policy carefully to make sure you are 

aware of any exclusions or limitations 

regarding coverage of preexisting conditions 

or health benefits (such as hospitalization, 

emergency services, maternity care, 

preventive care, prescription drugs, and 

mental health and substance use disorder 

services). Your policy might also have 

lifetime and/or annual dollar limits on health 

benefits. If this coverage expires or you lose 

eligibility for this coverage, you might have 

to wait until an open enrollment period to get 

other health insurance coverage. 

(4) If a court holds the 36-month 

maximum duration provision set forth 

in paragraph (1) of this definition or its 

applicability to any person or 

circumstances invalid, the remaining 

provisions and their applicability to 

other people or circumstances shall 

continue in effect. 

Significant break in coverage means a 

significant break in coverage within the 

meaning of § 54.9801–4(b)(2)(iii). 

Special enrollment means enrollment 

in a group health plan under the rights 

described in § 54.9801–6 or in group 

health insurance coverage under the 

rights described in 29 CFR 2590.701–6 

or 45 CFR 146.117. 


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State health benefits risk pool means 

a State health benefits risk pool within 

the meaning of § 54.9801–4(a)(1)(vii). 

Travel insurance means insurance 

coverage for personal risks incident to 

planned travel, which may include, but 

is not limited to, interruption or 

cancellation of trip or event, loss of 

baggage or personal effects, damages to 

accommodations or rental vehicles, and 

sickness, accident, disability, or death 

occurring during travel, provided that 

the health benefits are not offered on a 

stand-alone basis and are incidental to 

other coverage. For this purpose, the 

term travel insurance does not include 

major medical plans that provide 

comprehensive medical protection for 

travelers with trips lasting 6 months or 

longer, including, for example, those 

working overseas as an expatriate or 

military personnel being deployed. 

Waiting period means waiting period 

within the meaning of § 54.9815– 

2708(b). 

■ Par. 7. Section 54.9815–2719AT is 

added to read as follows: 

§ 54.9815–2719AT Patient protections 

(temporary). 

(a)–(b) [Reserved] 

(c) Applicability date. The provisions 

of this section are applicable to group 

health plans and health insurance 

issuers for plan years beginning before 

January 1, 2022. See also §§ 54.9816–4T 

through 54.9816–7T, 54.9817–1T, and 

54.9822–1T for rules applicable with 

respect to plan years beginning on or 

after January 1, 2022. 

■ Par. 8. Sections 54.9816–1T, 54.9816– 

2T, 54.9816–3T, 54.9816–4T, 54.9816– 

5T, 54.9816–6T, 54.9816–7T, 54.9817– 

1T, and 54.9822–1T are added to read 

as follows: 

Sec. 

54.9816–1T Basis and scope (temporary). 

54.9816–2T Applicability (temporary). 

54.9816–3T Definitions (temporary). 

54.9816–4T Preventing surprise medical 

bills for emergency services (temporary). 

54.9816–5T Preventing surprise medical 

bills for non-emergency services 

performed by nonparticipating providers 

at certain participating facilities 

(temporary). 

54.9816–6T Methodology for calculating 

qualifying payment amount (temporary). 

54.9816–7T Complaints process for surprise 

medical bills regarding group health 

plans (temporary). 

54.9817–1T Preventing surprise medical 

bills for air ambulance services 

(temporary). 

54.9822–1T Choice of health care 

professional (temporary). 

* * * * * 

§ 54.9816–1T Basis and scope 

(temporary). 

(a) Basis. This section and 

§§ 54.9816–2T through 54.9816–7T, 

54.9817–1T, and 54.9822–1T implement 

subchapter B of chapter 100 of the 

Internal Revenue Code of 1986. 

(b) Scope. This part establishes 

standards for group health plans with 

respect to surprise medical bills, 

transparency in health care coverage, 

and additional patient protections. 

§ 54.9816–2T Applicability (temporary). 

(a) In general. The requirements in 

§§ 54.9816–4T through 54.9816–7T, 

54.9817–1T, and 54.9822–1T apply to 

group health plans (including 

grandfathered health plans as defined in 

§ 54.9815–1251T), except as specified in 

paragraph (b) of this section. 

(b) Exceptions. The requirements in 

§§ 54.9816–4T through 54.9816–7T, 

54.9817–1T, and 54.9822–1T do not 

apply to the following: 

(1) Excepted benefits as described in 

§ 54.9831–1(c). 

(2) Short-term, limited-duration 

insurance as defined in § 54.9801–2. 

(3) Health reimbursement 

arrangements or other account-based 

group health plans as described in 

§ 54.9815–2711(d). 

§ 54.9816–3T Definitions (temporary). 

The definitions in § 54.9801–2T apply 

to §§ 54.9816–4T through 54.9816–7T, 

54.9817–1T, and 54.9822–1T unless 

otherwise specified. In addition, for 

purposes of §§ 54.9816–4T through 

54.9816–7T, 54.9817–1T, and 54.9822– 

1T, the following definitions apply: 

Air ambulance service means medical 

transport by a rotary wing air 

ambulance, as defined in 42 CFR 

414.605, or fixed wing air ambulance, as 

defined in 42 CFR 414.605, for patients. 

Cost sharing means the amount a 

participant, beneficiary, or enrollee is 

responsible for paying for a covered 

item or service under the terms of the 

group health plan or health insurance 

coverage. Cost sharing generally 

includes copayments, coinsurance, and 

amounts paid towards deductibles, but 

does not include amounts paid towards 

premiums, balance billing by out-ofnetwork providers, or the cost of items 

or services that are not covered under a 

group health plan or health insurance 

coverage. 

Emergency department of a hospital 

includes a hospital outpatient 

department that provides emergency 

services. 

Emergency medical condition has the 

meaning given the term in § 54.9816– 

4T(c)(1). 

Emergency services has the meaning 

given the term in § 54.9816–4T(c)(2). 

Health care facility, with respect to a 

group health plan, in the context of nonemergency services, is each of the 

following: 

(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); and 

(4) An ambulatory surgical center 

described in section 1833(i)(1)(A) of the 

Social Security Act. 

Independent freestanding emergency 

department means a health care facility 

(not limited to those described in the 

definition of health care facility with 

respect to non-emergency services) 

that— 

(1) Is geographically separate and 

distinct and licensed separately from a 

hospital under applicable State law; and 

(2) Provides any emergency services 

as described in § 54.9816–4T(c)(2)(i). 

Nonparticipating emergency facility 

means an emergency department of a 

hospital, or an independent freestanding 

emergency department (or a hospital, 

with respect to services that pursuant to 

§ 54.9816–4T(c)(2)(ii) are included as 

emergency services), that does not have 

a contractual relationship directly or 

indirectly with a group health plan, 

with respect to the furnishing of an item 

or service under the plan. 

Nonparticipating provider means any 

physician or other health care provider 

who does not have a contractual 

relationship directly or indirectly with a 

group health plan, with respect to the 

furnishing of an item or service under 

the plan. 

Notice of denial of payment means, 

with respect to an item or service for 

which benefits subject to the protections 

of §§ 54.9816–4T, 54.9816–5T, and 

54.9817–1T are provided or covered, a 

written notice from the plan to the 

health care provider, facility, or 

provider of air ambulance services, as 

applicable, that payment for such item 

or service will not be made by the plan 

and which explains the reason for 

denial. The term notice of denial of 

payment does not include a notice of 

benefit denial due to an adverse benefit 

determination as defined in 29 CFR 

2560.503–1. 

Out-of-network rate means, with 

respect to an item or service furnished 

by a nonparticipating provider, 

nonparticipating emergency facility, or 

nonparticipating provider of air 

ambulance services— 

(1) Subject to paragraph (3) of this 

definition, in a State that has in effect 

a specified State law, the amount 

determined in accordance with such 

law; 


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(2) Subject to paragraph (3) of this 

definition, in a State that does not have 

in effect a specified State law— 

(i) Subject to paragraph (2)(ii) of this 

definition, if the nonparticipating 

provider or nonparticipating emergency 

facility and the plan agree on an amount 

of payment (including if the amount 

agreed upon is the initial payment sent 

by the plan under § 54.9816– 

4T(b)(3)(iv)(A), § 54.9816–5T(c)(3), or 

§ 54.9817–1T(b)(4)(i); 29 CFR 2590.716– 

4(b)(3)(iv)(A), 2590.716–5(c)(3), or 

2590.717–1(b)(4)(i); or 45 CFR 

149.110(b)(3)(iv)(A), 149.120(c)(3), or 

149.130(b)(4)(i), as applicable, or is 

agreed on through negotiations with 

respect to such item or service), such 

agreed on amount; or 

(ii) If the nonparticipating provider or 

nonparticipating emergency facility and 

the plan enter into the independent 

dispute resolution (IDR) process under 

section 9816(c) or 9817(b) of the Internal 

Revenue Code, section 716(c) or 717(b) 

of ERISA, or section 2799A–1(c) or 

2799A–2(b) of the PHS Act, as 

applicable, and do not agree before the 

date on which a certified IDR entity 

makes a determination with respect to 

such item or service under such 

subsection, the amount of such 

determination; or 

(3) In a State that has an All-Payer 

Model Agreement under section 1115A 

of the Social Security Act that applies 

with respect to the plan; the 

nonparticipating provider or 

nonparticipating emergency facility; and 

the item or service, the amount that the 

State approves under the All-Payer 

Model Agreement for the item or 

service. 

Participating emergency facility 

means any emergency department of a 

hospital, or an independent freestanding 

emergency department (or a hospital, 

with respect to services that pursuant to 

§ 54.9816–4T(c)(2)(ii) are included as 

emergency services), that has a 

contractual relationship directly or 

indirectly with a group health plan 

setting forth the terms and conditions 

on which a relevant item or service is 

provided to a participant or beneficiary 

under the plan. A single case agreement 

between an emergency facility and a 

plan that is used to address unique 

situations in which a participant or 

beneficiary requires services that 

typically occur out-of-network 

constitutes a contractual relationship for 

purposes of this definition, and is 

limited to the parties to the agreement. 

Participating health care facility 

means any health care facility described 

in this section that has a contractual 

relationship directly or indirectly with a 

group health plan setting forth the terms 

and conditions on which a relevant item 

or service is provided to a participant or 

beneficiary under the plan. A single 

case agreement between a health care 

facility and a plan that is used to 

address unique situations in which a 

participant or beneficiary requires 

services that typically occur out-ofnetwork constitutes a contractual 

relationship for purposes of this 

definition, and is limited to the parties 

to the agreement. 

Participating provider means any 

physician or other health care provider 

who has a contractual relationship 

directly or indirectly with a group 

health plan setting forth the terms and 

conditions on which a relevant item or 

service is provided to a participant or 

beneficiary under the plan. 

Physician or health care provider 

means a physician or other health care 

provider who is acting within the scope 

of practice of that provider’s license or 

certification under applicable State law, 

but does not include a provider of air 

ambulance services. 

Provider of air ambulance services 

means an entity that is licensed under 

applicable State and Federal law to 

provide air ambulance services. 

Same or similar item or service has 

the meaning given the term in 

§ 54.9816–6T(a)(13). 

Service code has the meaning given 

the term in § 54.9816–6T(a)(14). 

Qualifying payment amount has the 

meaning given the term in § 54.9816– 

6T(a)(16). 

Recognized amount means, with 

respect to an item or service furnished 

by a nonparticipating provider or 

nonparticipating emergency facility— 

(1) Subject to paragraph (3) of this 

definition, in a State that has in effect 

a specified State law, the amount 

determined in accordance with such 

law. 

(2) Subject to paragraph (3) of this 

definition, in a State that does not have 

in effect a specified State law, the lesser 

of— 

(i) The amount that is the qualifying 

payment amount (as determined in 

accordance with § 54.9816–6T); or 

(ii) The amount billed by the provider 

or facility. 

(3) In a State that has an All-Payer 

Model Agreement under section 1115A 

of the Social Security Act that applies 

with respect to the plan; the 

nonparticipating provider or 

nonparticipating emergency facility; and 

the item or service, the amount that the 

State approves under the All-Payer 

Model Agreement for the item or 

service. 

Specified State law means a State law 

that provides for a method for 

determining the total amount payable 

under a group health plan to the extent 

such State law applies for an item or 

service furnished by a nonparticipating 

provider or nonparticipating emergency 

facility (including where it applies 

because the State has allowed a plan 

that is not otherwise subject to 

applicable State law an opportunity to 

opt in, subject to section 514 of the 

Employee Retirement Income Security 

Act of 1974). A group health plan that 

opts into such a specified State law 

must do so for all items and services to 

which the specified State law applies 

and in a manner determined by the 

applicable State authority, and must 

prominently display in its plan 

materials describing the coverage of outof-network services a statement that the 

plan has opted into the specified State 

law, identify the relevant State (or 

States), and include a general 

description of the items and services 

provided by nonparticipating facilities 

and providers that are covered by the 

specified State law. 

State means each of the 50 States, the 

District of Columbia, Puerto Rico, the 

Virgin Islands, Guam, American Samoa, 

and the Northern Mariana Islands. 

Treating provider is a physician or 

health care provider who has evaluated 

the individual. 

Visit, with respect to items and 

services furnished to an individual at a 

health care facility, includes, in 

addition to items and services furnished 

by a provider at the facility, equipment 

and devices, telemedicine services, 

imaging services, laboratory services, 

and preoperative and postoperative 

services, regardless of whether the 

provider furnishing such items or 

services is at the facility. 

§ 54.9816–4T Preventing surprise medical 

bills for emergency services (temporary). 

(a) In general. If a group health plan 

provides or covers any benefits with 

respect to services in an emergency 

department of a hospital or with respect 

to emergency services in an 

independent freestanding emergency 

department, the plan must cover 

emergency services, as defined in 

paragraph (c)(2) of this section, and this 

coverage must be provided in 

accordance with paragraph (b) of this 

section. 

(b) Coverage requirements. A plan 

described in paragraph (a) of this 

section must provide coverage for 

emergency services in the following 

manner— 

(1) Without the need for any prior 

authorization determination, even if the 

services are provided on an out-ofnetwork basis. 


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(2) Without regard to whether the 

health care provider furnishing the 

emergency services is a participating 

provider or a participating emergency 

facility, as applicable, with respect to 

the services. 

(3) If the emergency services are 

provided by a nonparticipating provider 

or a nonparticipating emergency 

facility— 

(i) Without imposing any 

administrative requirement or limitation 

on coverage that is more restrictive than 

the requirements or limitations that 

apply to emergency services received 

from participating providers and 

participating emergency facilities. 

(ii) Without imposing cost-sharing 

requirements that are greater than the 

requirements that would apply if the 

services were provided by a 

participating provider or a participating 

emergency facility. 

(iii) By calculating the cost-sharing 

requirement as if the total amount that 

would have been charged for the 

services by such participating provider 

or participating emergency facility were 

equal to the recognized amount for such 

services. 

(iv) The plan— 

(A) Not later than 30 calendar days 

after the bill for the services is 

transmitted by the provider or facility 

(or, in cases where the recognized 

amount is determined by a specified 

State law or All-Payer Model 

Agreement, such other timeframe as 

specified by the State law or All-Payer 

Model Agreement), determines whether 

the services are covered under the plan 

and, if the services are covered, sends to 

the provider or facility, as applicable, an 

initial payment or a notice of denial of 

payment. For purposes of this paragraph 

(b)(3)(iv)(A), the 30-calendar-day period 

begins on the date the plan receives the 

information necessary to decide a claim 

for payment for the services. 

(B) Pays a total plan payment directly 

to the nonparticipating provider or 

nonparticipating facility that is equal to 

the amount by which the out-of-network 

rate for the services exceeds the costsharing amount for the services (as 

determined in accordance with 

paragraphs (b)(3)(ii) and (iii) of this 

section), less any initial payment 

amount made under paragraph 

(b)(3)(iv)(A) of this section. The total 

plan payment must be made in 

accordance with the timing requirement 

described in section 9816(c)(6), or in 

cases where the out-of-network rate is 

determined under a specified State law 

or All-Payer Model Agreement, such 

other timeframe as specified by the State 

law or All-Payer Model Agreement. 

(v) By counting any cost-sharing 

payments made by the participant or 

beneficiary with respect to the 

emergency services toward any innetwork deductible or in-network outof-pocket maximums (including the 

annual limitation on cost sharing under 

section 2707(b) of the Public Health 

Service Act) (as applicable) applied 

under the plan (and the in-network 

deductible and in-network out-of-pocket 

maximums must be applied) in the same 

manner as if the cost-sharing payments 

were made with respect to emergency 

services furnished by a participating 

provider or a participating emergency 

facility. 

(4) Without limiting what constitutes 

an emergency medical condition (as 

defined in paragraph (c)(1) of this 

section) solely on the basis of diagnosis 

codes. 

(5) Without regard to any other term 

or condition of the coverage, other 

than— 

(i) The exclusion or coordination of 

benefits (to the extent not inconsistent 

with benefits for an emergency medical 

condition, as defined in paragraph (c)(1) 

of this section). 

(ii) An affiliation or waiting period 

(each as defined in § 54.9801–2). 

(iii) Applicable cost sharing. 

(c) Definitions. In this section— 

(1) Emergency medical condition 

means a medical condition, including a 

mental health condition or substance 

use disorder, manifesting itself by acute 

symptoms of sufficient severity 

(including severe pain) such that a 

prudent layperson, who possesses an 

average knowledge of health and 

medicine, could reasonably expect the 

absence of immediate medical attention 

to result in a condition described in 

clause (i), (ii), or (iii) of section 

1867(e)(1)(A) of the Social Security Act 

(42 U.S.C. 1395dd(e)(1)(A)). (In that 

provision of the Social Security Act, 

clause (i) refers to placing the health of 

the individual (or, with respect to a 

pregnant woman, the health of the 

woman or her unborn child) in serious 

jeopardy; clause (ii) refers to serious 

impairment to bodily functions; and 

clause (iii) refers to serious dysfunction 

of any bodily organ or part.) 

(2) Emergency services means, with 

respect to an emergency medical 

condition— 

(i) In general. (A) An appropriate 

medical screening examination (as 

required under section 1867 of the 

Social Security Act (42 U.S.C. 1395dd) 

or as would be required under such 

section if such section applied to an 

independent freestanding emergency 

department) that is within the capability 

of the emergency department of a 

hospital or of an independent 

freestanding emergency department, as 

applicable, including ancillary services 

routinely available to the emergency 

department to evaluate such emergency 

medical condition; and 

(B) Within the capabilities of the staff 

and facilities available at the hospital or 

the independent freestanding 

emergency department, as applicable, 

such further medical examination and 

treatment as are required under section 

1867 of the Social Security Act (42 

U.S.C. 1395dd), or as would be required 

under such section if such section 

applied to an independent freestanding 

emergency department, to stabilize the 

patient (regardless of the department of 

the hospital in which such further 

examination or treatment is furnished). 

(ii) Inclusion of additional services. 

(A) Subject to paragraph (c)(2)(ii)(B) of 

this section, items and services— 

(1) For which benefits are provided or 

covered under the plan; and 

(2) That are furnished by a 

nonparticipating provider or 

nonparticipating emergency facility 

(regardless of the department of the 

hospital in which such items or services 

are furnished) after the participant or 

beneficiary is stabilized and as part of 

outpatient observation or an inpatient or 

outpatient stay with respect to the visit 

in which the services described in 

paragraph (c)(2)(i) of this section are 

furnished. 

(B) Items and services described in 

paragraph (c)(2)(ii)(A) of this section are 

not included as emergency services if all 

of the conditions in 45 CFR 149.410(b) 

are met. 

(3) To stabilize, with respect to an 

emergency medical condition, has the 

meaning given such term in section 

1867(e)(3) of the Social Security Act (42 

U.S.C. 1395dd(e)(3)). 

(d) Applicability date. The provisions 

of this section are applicable with 

respect to plan years beginning on or 

after January 1, 2022. 

§ 54.9816–5T Preventing surprise medical 

bills for non-emergency services performed 

by nonparticipating providers at certain 

participating facilities (temporary). 

(a) In general. If a group health plan 

provides or covers any benefits with 

respect to items and services described 

in paragraph (b) of this section, the plan 

must cover the items and services when 

furnished by a nonparticipating 

provider in accordance with paragraph 

(c) of this section. 

(b) Items and services described. The 

items and services described in this 

paragraph (b) are items and services 

(other than emergency services) 

furnished to a participant or beneficiary 


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by a nonparticipating provider with 

respect to a visit at a participating 

health care facility, unless the provider 

has satisfied the notice and consent 

criteria of 45 CFR 149.420(c) through (i) 

with respect to such items and services. 

(c) Coverage requirements. In the case 

of items and services described in 

paragraph (b) of this section, the plan— 

(1) Must not impose a cost-sharing 

requirement for the items and services 

that is greater than the cost-sharing 

requirement that would apply if the 

items or services had been furnished by 

a participating provider. 

(2) Must calculate the cost-sharing 

requirements as if the total amount that 

would have been charged for the items 

and services by such participating 

provider were equal to the recognized 

amount for the items and services. 

(3) Not later than 30 calendar days 

after the bill for the items or services is 

transmitted by the provider (or in cases 

where the recognized amount is 

determined by a specified State law or 

All-Payer Model Agreement, such other 

timeframe as specified under the State 

law or All-Payer Model Agreement), 

must determine whether the items and 

services are covered under the plan and, 

if the items and services are covered, 

send to the provider an initial payment 

or a notice of denial of payment. For 

purposes of this paragraph (c)(3), the 30- 

calendar-day period begins on the date 

the plan receives the information 

necessary to decide a claim for payment 

for the items or services. 

(4) Must pay a total plan payment 

directly to the nonparticipating provider 

that is equal to the amount by which the 

out-of-network rate for the items and 

services involved exceeds the costsharing amount for the items and 

services (as determined in accordance 

with paragraphs (c)(1) and (2) of this 

section), less any initial payment 

amount made under paragraph (c)(3) of 

this section. The total plan payment 

must be made in accordance with the 

timing requirement described in section 

9816(c)(6) or in cases where the out-ofnetwork rate is determined under a 

specified State law or All-Payer Model 

Agreement, such other timeframe as 

specified by the State law or All-Payer 

Model Agreement. 

(5) Must count any cost-sharing 

payments made by the participant or 

beneficiary toward any in-network 

deductible and in-network out-of-pocket 

maximums (including the annual 

limitation on cost sharing under section 

2707(b) of the Public Health Service 

Act) (as applicable) applied under the 

plan (and the in-network deductible and 

out-of-pocket maximums must be 

applied) in the same manner as if such 

cost-sharing payments were made with 

respect to items and services furnished 

by a participating provider. 

(d) Applicability date. The provisions 

of this section are applicable with 

respect to plan years beginning on or 

after January 1, 2022. 

§ 54.9816–6T Methodology for calculating 

qualifying payment amount (temporary). 

(a) Definitions. For purposes of this 

section, the following definitions apply: 

(1) Contracted rate means the total 

amount (including cost sharing) that a 

group health plan has contractually 

agreed to pay a participating provider, 

facility, or provider of air ambulance 

services for covered items and services, 

whether directly or indirectly, including 

through a third-party administrator or 

pharmacy benefit manager. Solely for 

purposes of this definition, a single case 

agreement, letter of agreement, or other 

similar arrangement between a provider, 

facility, or air ambulance provider and 

a plan, used to supplement the network 

of the plan for a specific participant or 

beneficiary in unique circumstances, 

does not constitute a contract. 

(2) Derived amount has the meaning 

given the term in § 54.9815–2715A1. 

(3) Eligible database means— 

(i) A State all-payer claims database; 

or 

(ii) Any third-party database which— 

(A) Is not affiliated with, or owned or 

controlled by, any health insurance 

issuer, or a health care provider, facility, 

or provider of air ambulance services (or 

any member of the same controlled 

group as, or under common control 

with, such an entity). For purposes of 

this paragraph (a)(3)(ii)(A), the term 

controlled group means a group of two 

or more persons that is treated as a 

single employer under sections 52(a), 

52(b), 414(m), or 414(o) of the Internal 

Revenue Code of 1986, as amended; 

(B) Has sufficient information 

reflecting in-network amounts paid by 

group health plans or health insurance 

issuers offering group or individual 

health insurance coverage to providers, 

facilities, or providers of air ambulance 

services for relevant items and services 

furnished in the applicable geographic 

region; and 

(C) Has the ability to distinguish 

amounts paid to participating providers 

and facilities by commercial payers, 

such as group health plans and health 

insurance issuers offering group or 

individual health insurance coverage, 

from all other claims data, such as 

amounts billed by nonparticipating 

providers or facilities and amounts paid 

by public payers, including the 

Medicare program under title XVIII of 

the Social Security Act, the Medicaid 

program under title XIX of the Social 

Security Act (or a demonstration project 

under title XI of the Social Security 

Act), or the Children’s Health Insurance 

Program under title XXI of the Social 

Security Act. 

(4) Facility of the same or similar 

facility type means, with respect to 

emergency services, either— 

(i) An emergency department of a 

hospital; or 

(ii) An independent freestanding 

emergency department. 

(5) First coverage year means, with 

respect to an item or service for which 

coverage is not offered in 2019 under a 

group health plan, the first year after 

2019 for which coverage for such item 

or service is offered under that plan. 

(6) First sufficient information year 

means, with respect to a group health 

plan— 

(i) In the case of an item or service for 

which the plan does not have sufficient 

information to calculate the median of 

the contracted rates described in 

paragraph (b) of this section in 2019, the 

first year after 2022 for which the plan 

has sufficient information to calculate 

the median of such contracted rates in 

the year immediately preceding that 

first year after 2022; and 

(ii) In the case of a newly covered 

item or service, the first year after the 

first coverage year for such item or 

service with respect to such plan for 

which the plan has sufficient 

information to calculate the median of 

the contracted rates described in 

paragraph (b) of this section in the year 

immediately preceding that first year. 

(7) Geographic region means— 

(i) For items and services other than 

air ambulance services— 

(A) Subject to paragraphs (a)(7)(i)(B) 

and (C) of this section, one region for 

each metropolitan statistical area, as 

described by the U.S. Office of 

Management and Budget and published 

by the U.S. Census Bureau, in a State, 

and one region consisting of all other 

portions of the State. 

(B) If a plan does not have sufficient 

information to calculate the median of 

the contracted rates described in 

paragraph (b) of this section for an item 

or service provided in a geographic 

region described in paragraph 

(a)(7)(i)(A) of this section, one region 

consisting of all metropolitan statistical 

areas, as described by the U.S. Office of 

Management and Budget and published 

by the U.S. Census Bureau, in the State, 

and one region consisting of all other 

portions of the State. 

(C) If a plan does not have sufficient 

information to calculate the median of 

the contracted rates described in 

paragraph (b) of this section for an item 


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or service provided in a geographic 

region described in paragraph 

(a)(7)(i)(B) of this section, one region 

consisting of all metropolitan statistical 

areas, as described by the U.S. Office of 

Management and Budget and published 

by the U.S. Census Bureau, in each 

Census division and one region 

consisting of all other portions of the 

Census division, as described by the 

U.S. Census Bureau. 

(ii) For air ambulance services— 

(A) Subject to paragraph (a)(7)(ii)(B) of 

this section, one region consisting of all 

metropolitan statistical areas, as 

described by the U.S. Office of 

Management and Budget and published 

by the U.S. Census Bureau, in the State, 

and one region consisting of all other 

portions of the State, determined based 

on the point of pick-up (as defined in 42 

CFR 414.605). 

(B) If a plan does not have sufficient 

information to calculate the median of 

the contracted rates described in 

paragraph (b) of this section for an air 

ambulance service provided in a 

geographic region described in 

paragraph (a)(7)(ii)(A) of this section, 

one region consisting of all metropolitan 

statistical areas, as described by the U.S. 

Office of Management and Budget and 

published by the U.S. Census Bureau, in 

each Census division and one region 

consisting of all other portions of the 

Census division, as described by the 

U.S. Census Bureau, determined based 

on the point of pick-up (as defined in 42 

CFR 414.605). 

(8) Insurance market is, irrespective 

of the State, one of the following: 

(i) The individual market (other than 

short-term, limited-duration insurance 

or individual health insurance coverage 

that consists solely of excepted 

benefits). 

(ii) The large group market (other than 

coverage that consists solely of excepted 

benefits). 

(iii) The small group market (other 

than coverage that consists solely of 

excepted benefits). 

(iv) In the case of a self-insured group 

health plan, all self-insured group 

health plans (other than account-based 

plans, as defined in § 54.9815– 

2711(d)(6)(i), and plans that consist 

solely of excepted benefits) of the same 

plan sponsor, or at the option of the 

plan sponsor, all self-insured group 

health plans administered by the same 

entity (including a third-party 

administrator contracted by the plan), to 

the extent otherwise permitted by law, 

that is responsible for calculating the 

qualifying payment amount on behalf of 

the plan. 

(9) Modifiers mean codes applied to 

the service code that provide a more 

specific description of the furnished 

item or service and that may adjust the 

payment rate or affect the processing or 

payment of the code billed. 

(10) Newly covered item or service 

means an item or service for which 

coverage was not offered in 2019 under 

a group health plan, but that is offered 

under the plan in a year after 2019. 

(11) New service code means a service 

code that was created or substantially 

revised in a year after 2019. 

(12) Provider in the same or similar 

specialty means the practice specialty of 

a provider, as identified by the plan 

consistent with the plan’s usual 

business practice, except that, with 

respect to air ambulance services, all 

providers of air ambulance services are 

considered to be a single provider 

specialty. 

(13) Same or similar item or service 

means a health care item or service 

billed under the same service code, or 

a comparable code under a different 

procedural code system. 

(14) Service code means the code that 

describes an item or service using the 

Current Procedural Terminology (CPT) 

code, Healthcare Common Procedure 

Coding System (HCPCS), or DiagnosisRelated Group (DRG) codes. 

(15) Sufficient information means, for 

purposes of determining whether a 

group health plan has sufficient 

information to calculate the median of 

the contracted rates described in 

paragraph (b) of this section— 

(i) The plan has at least three 

contracted rates on January 31, 2019, to 

calculate the median of the contracted 

rates in accordance with paragraph (b) 

of this section; or 

(ii) For an item or service furnished 

during a year after 2022 that is used to 

determine the first sufficient 

information year— 

(A) The plan has at least three 

contracted rates on January 31 of the 

year immediately preceding that year to 

calculate the median of the contracted 

rates in accordance with paragraph (b) 

of this section; and 

(B) The contracted rates under 

paragraph (a)(15)(ii)(A) of this section 

account (or are reasonably expected to 

account) for at least 25 percent of the 

total number of claims paid for that item 

or service for that year with respect to 

all plans of the sponsor (or the 

administering entity as provided in 

paragraph (a)(8)(iv) of this section, if 

applicable) that are offered in the same 

insurance market. 

(16) Qualifying payment amount 

means, with respect to a sponsor of a 

group health plan, the amount 

calculated using the methodology 

described in paragraph (c) of this 

section. 

(17) Underlying fee schedule rate 

means the rate for a covered item or 

service from a particular participating 

provider, providers, or facility that a 

group health plan uses to determine a 

participant’s or beneficiary’s costsharing liability for the item or service, 

when that rate is different from the 

contracted rate. 

(b) Methodology for calculation of 

median contracted rate—(1) In general. 

The median contracted rate for an item 

or service is calculated by arranging in 

order from least to greatest the 

contracted rates of all group health 

plans of the plan sponsor (or the 

administering entity as provided in 

paragraph (a)(8)(iv) of this section, if 

applicable) in the same insurance 

market for the same or similar item or 

service that is provided by a provider in 

the same or similar specialty or facility 

of the same or similar facility type and 

provided in the geographic region in 

which the item or service is furnished 

and selecting the middle number. If 

there are an even number of contracted 

rates, the median contracted rate is the 

average of the middle two contracted 

rates. In determining the median 

contracted rate, the amount negotiated 

under each contract is treated as a 

separate amount. If a plan or issuer has 

a contract with a provider group or 

facility, the rate negotiated with that 

provider group or facility under the 

contract is treated as a single contracted 

rate if the same amount applies with 

respect to all providers of such provider 

group or facility under the single 

contract. However, if a plan or issuer 

has a contract with multiple providers, 

with separate negotiated rates with each 

particular provider, each unique 

contracted rate with an individual 

provider constitutes a single contracted 

rate. Further, if a plan or issuer has 

separate contracts with individual 

providers, the contracted rate under 

each such contract constitutes a single 

contracted rate (even if the same amount 

is paid to multiple providers under 

separate contracts). 

(2) Calculation rules. In calculating 

the median contracted rate, a plan must: 

(i) Calculate the median contracted 

rate with respect to all plans of such 

sponsor (or the administering entity as 

provided in paragraph (a)(8)(iv) of this 

section, if applicable) that are offered in 

the same insurance market; 

(ii) Calculate the median contracted 

rate using the full contracted rate 

applicable to the service code, except 

that the plan must— 

(A) Calculate separate median 

contracted rates for CPT code modifiers 


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‘‘26’’ (professional component) and 

‘‘TC’’ (technical component); 

(B) For anesthesia services, calculate 

a median contracted rate for the 

anesthesia conversion factor for each 

service code; 

(C) For air ambulance services, 

calculate a median contracted rate for 

the air mileage service codes (A0435 

and A0436); and 

(D) Where contracted rates otherwise 

vary based on applying a modifier code, 

calculate a separate median contracted 

rate for each such service code-modifier 

combination; 

(iii) In the case of payments made by 

a plan that are not on a fee-for-service 

basis (such as bundled or capitation 

payments), calculate a median 

contracted rate for each item or service 

using the underlying fee schedule rates 

for the relevant items or services. If the 

plan does not have an underlying fee 

schedule rate for the item or service, it 

must use the derived amount to 

calculate the median contracted rate; 

and 

(iv) Exclude risk sharing, bonus, 

penalty, or other incentive-based or 

retrospective payments or payment 

adjustments. 

(3) Provider specialties; facility types. 

(i) If a plan has contracted rates that 

vary based on provider specialty for a 

service code, the median contracted rate 

is calculated separately for each 

provider specialty, as applicable. 

(ii) If a plan has contracted rates for 

emergency services that vary based on 

facility type for a service code, the 

median contracted rate is calculated 

separately for each facility of the same 

or similar facility type. 

(c) Methodology for calculation of the 

qualifying payment amount—(1) In 

general. (i) For an item or service (other 

than items or services described in 

paragraphs (c)(1)(iii) through (vii) of this 

section) furnished during 2022, the plan 

must calculate the qualifying payment 

amount by increasing the median 

contracted rate (as determined in 

accordance with paragraph (b) of this 

section) for the same or similar item or 

service under such plans, on January 31, 

2019, by the combined percentage 

increase as published by the Department 

of the Treasury and the Internal 

Revenue Service to reflect the 

percentage increase in the CPI–U over 

2019, such percentage increase over 

2020, and such percentage increase over 

2021. 

(A) The combined percentage increase 

for 2019, 2020, and 2021 will be 

published in guidance by the Internal 

Revenue Service. The Department of the 

Treasury and the Internal Revenue 

Service will calculate the percentage 

increase using the CPI–U published by 

the Bureau of Labor Statistics of the 

Department of Labor. 

(B) For purposes of this paragraph 

(c)(1)(i), the CPI–U for each calendar 

year is the average of the CPI–U as of the 

close of the 12-month period ending on 

August 31 of the calendar year, rounded 

to 10 decimal places. 

(C) The combined percentage increase 

for 2019, 2020, and 2021 will be 

calculated as: 

(CPI–U 2019/CPI–U 2018) × (CPI–U 

2020/CPI–U 2019) × (CPI–U 2021/ 

CPI–U 2020) 

(ii) For an item or service (other than 

items or services described in 

paragraphs (c)(1)(iii) through (vii) of this 

section) furnished during 2023 or a 

subsequent year, the plan must calculate 

the qualifying payment amount by 

increasing the qualifying payment 

amount determined under paragraph 

(c)(1)(i) of this section, for such an item 

or service furnished in the immediately 

preceding year, by the percentage 

increase as published by the Department 

of the Treasury and the Internal 

Revenue Service. 

(A) The percentage increase for any 

year after 2022 will be published in 

guidance by the Internal Revenue 

Service. The Department of the Treasury 

and Internal Revenue Service will 

calculate the percentage increase using 

the CPI–U published by the Bureau of 

Labor Statistics of the Department of 

Labor. 

(B) For purposes of this paragraph 

(c)(1)(ii), the CPI–U for each calendar 

year is the average of the CPI–U as of the 

close of the 12-month period ending on 

August 31 of the calendar year, rounded 

to 10 decimal places. 

(C) The combined percentage increase 

for any year will be calculated as CPI– 

U present year/CPI–U prior year. 

(iii) For anesthesia services furnished 

during 2022, the plan must calculate the 

qualifying payment amount by first 

increasing the median contracted rate 

for the anesthesia conversion factor (as 

determined in accordance with 

paragraph (b) of this section) for the 

same or similar item or service under 

such plans, on January 31, 2019, in 

accordance with paragraph (c)(1)(i) of 

this section (referred to in this section 

as the indexed median contracted rate 

for the anesthesia conversion factor). 

The plan must then multiply the 

indexed median contracted rate for the 

anesthesia conversion factor by the sum 

of the base unit, time unit, and physical 

status modifier units of the participant 

or beneficiary to whom anesthesia 

services are furnished to determine the 

qualifying payment amount. 

(A) The base units for an anesthesia 

service code are the base units for that 

service code specified in the most recent 

edition (as of the date of service) of the 

American Society of Anesthesiologists 

Relative Value Guide. 

(B) The time unit is measured in 15- 

minute increments or a fraction thereof. 

(C) The physical status modifier on a 

claim is a standard modifier describing 

the physical status of the patient and is 

used to distinguish between various 

levels of complexity of the anesthesia 

services provided, and is expressed as a 

unit with a value between zero (0) and 

three (3). 

(D) The anesthesia conversion factor 

is expressed in dollars per unit and is 

a contracted rate negotiated with the 

plan. 

(iv) For anesthesia services furnished 

during 2023 or a subsequent year, the 

plan must calculate the qualifying 

payment amount by first increasing the 

indexed median contracted rate for the 

anesthesia conversion factor, 

determined under paragraph (c)(1)(iii) of 

this section for such services furnished 

in the immediately preceding year, in 

accordance with paragraph (c)(1)(ii) of 

this section. The plan must then 

multiply that amount by the sum of the 

base unit, time unit, and physical status 

modifier units for the participant or 

beneficiary to whom anesthesia services 

are furnished to determine the 

qualifying payment amount. 

(v) For air ambulance services billed 

using the air mileage service codes 

(A0435 and A0436) that are furnished 

during 2022, the plan must calculate the 

qualifying payment amount for services 

billed using the air mileage service 

codes by first increasing the median 

contracted rate (as determined in 

accordance with paragraph (b) of this 

section), in accordance with paragraph 

(c)(1)(i) of this section (referred to in 

this section as the indexed median air 

mileage rate). The plan must then 

multiply the indexed median air 

mileage rate by the number of loaded 

miles provided to the participant or 

beneficiary to determine the qualifying 

payment amount. 

(A) The air mileage rate is expressed 

in dollars per loaded mile flown, is 

expressed in statute miles (not nautical 

miles), and is a contracted rate 

negotiated with the plan. 

(B) The number of loaded miles is the 

number of miles a patient is transported 

in the air ambulance vehicle. 

(C) The qualifying payment amount 

for other service codes associated with 

air ambulance services is calculated in 

accordance with paragraphs (c)(1)(i) and 

(ii) of this section. 


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(vi) For air ambulance services billed 

using the air mileage service codes 

(A0435 and A0436) that are furnished 

during 2023 or a subsequent year, the 

plan must calculate the qualifying 

payment amount by first increasing the 

indexed median air mileage rate, 

determined under paragraph (c)(1)(v) of 

this section for such services furnished 

in the immediately preceding year, in 

accordance with paragraph (c)(1)(ii) of 

this section. The plan must then 

multiply the indexed median air 

mileage rate by the number of loaded 

miles provided to the participant or 

beneficiary to determine the qualifying 

payment amount. 

(vii) For any other items or services 

for which a plan generally determines 

payment for the same or similar items 

or services by multiplying a contracted 

rate by another unit value, the plan 

must calculate the qualifying payment 

amount using a methodology that is 

similar to the methodology required 

under paragraphs (c)(1)(iii) through (vi) 

of this section and reasonably reflects 

the payment methodology for same or 

similar items or services. 

(2) New plans. With respect to a 

sponsor of a group health plan in a 

geographic region in which the sponsor 

did not offer any group health plan 

during 2019— 

(i) For the first year in which the 

group health plan is offered in such 

region— 

(A) If the plan has sufficient 

information to calculate the median of 

the contracted rates described in 

paragraph (b) of this section, the plan 

must calculate the qualifying payment 

amount in accordance with paragraph 

(c)(1) of this section for items and 

services that are covered by the plan 

and furnished during the first year; and 

(B) If the plan does not have sufficient 

information to calculate the median of 

the contracted rates described in 

paragraph (b) of this section for an item 

or service provided in a geographic 

region, the plan must determine the 

qualifying payment amount for the item 

or service in accordance with paragraph 

(c)(3)(i) of this section. 

(ii) For each subsequent year the 

group health plan is offered in the 

region, the plan must calculate the 

qualifying payment amount by 

increasing the qualifying payment 

amount determined under this 

paragraph (c)(2) for the items and 

services furnished in the immediately 

preceding year, in accordance with 

paragraph (c)(1)(ii), (iv), or (vi) of this 

section, as applicable. 

(3) Insufficient information; newly 

covered items and services. In the case 

of a plan that does not have sufficient 

information to calculate the median of 

the contracted rates described in 

paragraph (b) of this section in 2019 (or, 

in the case of a newly covered item or 

service, in the first coverage year for 

such item or service with respect to 

such plan or coverage if the plan does 

not have sufficient information) for an 

item or service provided in a geographic 

region— 

(i) For an item or service furnished 

during 2022 (or, in the case of a newly 

covered item or service, during the first 

coverage year for the item or service 

with respect to the plan or coverage), 

the plan must calculate the qualifying 

payment amount by first identifying the 

rate that is equal to the median of the 

in-network allowed amounts for the 

same or similar item or service provided 

in the geographic region in the year 

immediately preceding the year in 

which the item or service is furnished 

(or, in the case of a newly covered item 

or service, the year immediately 

preceding such first coverage year) 

determined by the plan through use of 

any eligible database, and then 

increasing that rate by the percentage 

increase in the CPI–U over such 

preceding year. For purposes of this 

section, in cases in which an eligible 

database is used to determine the 

qualifying payment amount with respect 

to an item or service furnished during 

a calendar year, the plan must use the 

same database for determining the 

qualifying payment amount for that item 

or service furnished through the last day 

of the calendar year, and if a different 

database is selected for some items or 

services, the basis for that selection 

must be one or more factors not directly 

related to the rate of those items or 

services (such as sufficiency of data for 

those items or services). 

(ii) For an item or service furnished in 

a subsequent year (before the first 

sufficient information year for such item 

or service with respect to such plan), the 

plan must calculate the qualifying 

payment amount by increasing the 

qualifying payment amount determined 

under paragraph (c)(3)(i) of this section 

or this paragraph (c)(3)(ii), as applicable, 

for such item or service for the year 

immediately preceding such subsequent 

year, by the percentage increase in CPI– 

U over such preceding year; 

(iii) For an item or service furnished 

in the first sufficient information year 

for such item or service with respect to 

such plan, the plan must calculate the 

qualifying payment amount in 

accordance with paragraph (c)(1)(i), (iii), 

or (v) of this section, as applicable, 

except that in applying such paragraph 

to such item or service, the reference to 

‘furnished during 2022’ is treated as a 

reference to furnished during such first 

sufficient information year, the 

reference to ‘in 2019’ is treated as a 

reference to such sufficient information 

year, and the increase described in such 

paragraph is not applied; and 

(iv) For an item or service furnished 

in any year subsequent to the first 

sufficient information year for such item 

or service with respect to such plan, the 

plan must calculate the qualifying 

payment amount in accordance with 

paragraph (c)(1)(ii), (iv), or (vi) of this 

section, as applicable, except that in 

applying such paragraph to such item or 

service, the reference to ‘furnished 

during 2023 or a subsequent year’ is 

treated as a reference to furnished 

during the year after such first sufficient 

information year or a subsequent year. 

(4) New service codes. In the case of 

a plan that does not have sufficient 

information to calculate the median of 

the contracted rates described in 

paragraph (b) of this section and 

determine the qualifying payment 

amount under paragraphs (c)(1) through 

(3) of this section because the item or 

service furnished is billed under a new 

service code— 

(i) For an item or service furnished 

during 2022 (or, in the case of a newly 

covered item or service, during the first 

coverage year for the item or service 

with respect to the plan), the plan must 

identify a reasonably related service 

code that existed in the immediately 

preceding year and— 

(A) If the Centers for Medicare & 

Medicaid Services has established a 

Medicare payment rate for the item or 

service billed under the new service 

code, the plan must calculate the 

qualifying payment amount by first 

calculating the ratio of the rate that 

Medicare pays for the item or service 

billed under the new service code 

compared to the rate that Medicare pays 

for the item or service billed under the 

related service code, and then 

multiplying the ratio by the qualifying 

payment amount for an item or service 

billed under the related service code for 

the year in which the item or service is 

furnished. 

(B) If the Centers for Medicare & 

Medicaid Services has not established a 

Medicare payment rate for the item or 

service billed under the new service 

code, the plan must calculate the 

qualifying payment amount by first 

calculating the ratio of the rate that the 

plan reimburses for the item or service 

billed under the new service code 

compared to the rate that the plan 

reimburses for the item or service billed 

under the related service code, and then 

multiplying the ratio by the qualifying 


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payment amount for an item or service 

billed under the related service code. 

(ii) For an item or service furnished in 

a subsequent year (before the first 

sufficient information year for such item 

or service with respect to such plan or 

coverage or before the first year for 

which an eligible database has sufficient 

information to a calculate a rate under 

paragraph (c)(3)(i) of this section in the 

immediately preceding year), the plan 

must calculate the qualifying payment 

amount by increasing the qualifying 

payment amount determined under 

paragraph (c)(4)(i) of this section or this 

paragraph (c)(4)(ii), as applicable, for 

such item or service for the year 

immediately preceding such subsequent 

year, by the percentage increase in 

CPI–U over such preceding year; 

(iii) For an item or service furnished 

in the first sufficient information year 

for such item or service with respect to 

such plan or the first year for which an 

eligible database has sufficient 

information to calculate a rate under 

paragraph (c)(3)(i) of this section in the 

immediately preceding year, the plan or 

issuer must calculate the qualifying 

payment amount in accordance with 

paragraph (c)(3) of this section. 

(d) Information to be shared about 

qualifying payment amount. In cases in 

which the recognized amount with 

respect to an item or service furnished 

by a nonparticipating provider, 

nonparticipating emergency facility, or 

nonparticipating provider of air 

ambulance services is the qualifying 

payment amount, the plan must provide 

in writing, in paper or electronic form, 

to the provider or facility, as 

applicable— 

(1) With an initial payment or notice 

of denial of payment under § 54.9816– 

4T, § 54.9816–5T, or § 54.9817–1T: 

(i) The qualifying payment amount for 

each item or service involved; 

(ii) A statement to certify that, based 

on the determination of the plan— 

(A) The qualifying payment amount 

applies for purposes of the recognized 

amount (or, in the case of air ambulance 

services, for calculating the 

participant’s, beneficiary’s, or enrollee’s 

cost sharing); and 

(B) Each qualifying payment amount 

shared with the provider or facility was 

determined in compliance with this 

section; 

(iii) A statement that if the provider 

or facility, as applicable, wishes to 

initiate a 30-day open negotiation 

period for purposes of determining the 

amount of total payment, the provider 

or facility may contact the appropriate 

person or office to initiate open 

negotiation, and that if the 30-day 

negotiation period does not result in a 

determination, generally, the provider 

or facility may initiate the independent 

dispute resolution process within 4 days 

after the end of the open negotiation 

period; and 

(iv) Contact information, including a 

telephone number and email address, 

for the appropriate person or office to 

initiate open negotiations for purposes 

of determining an amount of payment 

(including cost sharing) for such item or 

service. 

(2) In a timely manner upon request 

of the provider or facility: 

(i) Information about whether the 

qualifying payment amount for items 

and services involved included 

contracted rates that were not on a feefor-service basis for those specific items 

and services and whether the qualifying 

payment amount for those items and 

services was determined using 

underlying fee schedule rates or a 

derived amount; 

(ii) If a plan uses an eligible database 

under paragraph (c)(3) of this section to 

determine the qualifying payment 

amount, information to identify which 

database was used; and 

(iii) If a related service code was used 

to determine the qualifying payment 

amount for an item or service billed 

under a new service code under 

paragraph (c)(4)(i) or (ii) of this section, 

information to identify the related 

service code; and 

(iv) If applicable, a statement that the 

plan’s contracted rates include risksharing, bonus, penalty, or other 

incentive-based or retrospective 

payments or payment adjustments for 

the items and services involved (as 

applicable) that were excluded for 

purposes of calculating the qualifying 

payment amount. 

(e) Certain access fees to databases. In 

the case of a plan that, pursuant to this 

section, uses an eligible database to 

determine the qualifying payment 

amount for an item or service, the plan 

is responsible for any costs associated 

with accessing such database. 

(f) Audits. See 45 CFR 149.140(f) for 

audit procedures that apply with respect 

to ensuring that a plan is in compliance 

with the requirement of applying a 

qualifying payment amount under 

§§ 54.9816–4T, 54.9816–5T, 54.9817– 

1T, and this section, and ensuring that 

such amount so applied satisfies the 

requirements under this section, as 

applicable. 

(g) Applicability date. The provisions 

of this section are applicable with 

respect to plan years beginning on or 

after January 1, 2022. 

§ 54.9816–7T Complaints process for 

surprise medical bills regarding group 

health plans (temporary). 

See 45 CFR 149.150 for the process to 

receive and resolve complaints that a 

specific group health plan may be 

failing to meet the requirement of 

applying a qualifying payment amount 

under §§ 54.9816–4T, 54.9816–5T, 

54.9816–6T, and 54.9817–1T, which 

may warrant an investigation. 

§ 54.9817–1T Preventing surprise medical 

bills for air ambulance services (temporary). 

(a) In general. If a group health plan 

provides or covers any benefits for air 

ambulance services, the plan must cover 

such services from a nonparticipating 

provider of air ambulance services in 

accordance with paragraph (b) of this 

section. 

(b) Coverage requirements. A plan 

described in paragraph (a) of this 

section must provide coverage of air 

ambulance services in the following 

manner— 

(1) The cost-sharing requirements 

with respect to the services must be the 

same requirements that would apply if 

the services were provided by a 

participating provider of air ambulance 

services. 

(2) The cost-sharing requirement must 

be calculated as if the total amount that 

would have been charged for the 

services by a participating provider of 

air ambulance services were equal to the 

lesser of the qualifying payment amount 

(as determined in accordance with 

§ 54.9816–6T) or the billed amount for 

the services. 

(3) The cost-sharing amounts must be 

counted towards any in-network 

deductible and in-network out-of-pocket 

maximums (including the annual 

limitation on cost sharing under section 

2707(b) of the Public Health Service 

Act) (as applicable) applied under the 

plan (and the in-network deductible and 

out-of-pocket maximums must be 

applied) in the same manner as if the 

cost-sharing payments were made with 

respect to services furnished by a 

participating provider of air ambulance 

services. 

(4) The plan must— 

(i) Not later than 30 calendar days 

after the bill for the services is 

transmitted by the provider of air 

ambulance services, determine whether 

the services are covered under the plan 

and, if the services are covered, send to 

the provider an initial payment or a 

notice of denial of payment. For 

purposes of this paragraph (b)(4)(i), the 

30-calendar-day period begins on the 

date the plan receives the information 

necessary to decide a claim for payment 

for the services. 


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(ii) Pay a total plan payment directly 

to the nonparticipating provider 

furnishing such air ambulance services 

that is equal to the amount by which the 

out-of-network rate for the services 

exceeds the cost-sharing amount for the 

services (as determined in accordance 

with paragraphs (b)(1) and (2) of this 

section), less any initial payment 

amount made under paragraph (b)(4)(i) 

of this section. The total plan payment 

must be made in accordance with the 

timing requirement described in section 

9817(b)(6), or in cases where the out-ofnetwork rate is determined under a 

specified State law or All-Payer Model 

Agreement, such other timeframe as 

specified by the State law or All-Payer 

Model Agreement. 

(c) Applicability date. The provisions 

of this section are applicable with 

respect to plan years beginning on or 

after January 1, 2022. 

§ 54.9822–1T Choice of health care 

professional (temporary). 

(a) Choice of health care 

professional—(1) Designation of 

primary care provider—(i) In general. If 

a group health plan, requires or 

provides for designation by a participant 

or beneficiary of a participating primary 

care provider, then the plan must permit 

each participant or beneficiary to 

designate any participating primary care 

provider who is available to accept the 

participant or beneficiary. In such a 

case, the plan must comply with the 

rules of paragraph (a)(4) of this section 

by informing each participant of the 

terms of the plan regarding designation 

of a primary care provider. 

(ii) Construction. Nothing in 

paragraph (a)(1)(i) of this section is to be 

construed to prohibit the application of 

reasonable and appropriate geographic 

limitations with respect to the selection 

of primary care providers, in accordance 

with the terms of the plan, the 

underlying provider contracts, and 

applicable State law. 

(iii) Example. The rules of this 

paragraph (a)(1) are illustrated by the 

following example: 

(A) Facts. A group health plan 

requires individuals covered under the 

plan to designate a primary care 

provider. The plan permits each 

individual to designate any primary care 

provider participating in the plan’s 

network who is available to accept the 

individual as the individual’s primary 

care provider. If an individual has not 

designated a primary care provider, the 

plan designates one until the individual 

has made a designation. The plan 

provides a notice that satisfies the 

requirements of paragraph (a)(4) of this 

section regarding the ability to designate 

a primary care provider. 

(B) Conclusion. In this Example, the 

plan has satisfied the requirements of 

this paragraph (a). 

(2) Designation of pediatrician as 

primary care provider—(i) In general. If 

a group health plan requires or provides 

for the designation of a participating 

primary care provider for a child by a 

participant or beneficiary, the plan must 

permit the participant or beneficiary to 

designate a physician (allopathic or 

osteopathic) who specializes in 

pediatrics (including pediatric 

subspecialties, based on the scope of 

that provider’s license under applicable 

State law) as the child’s primary care 

provider if the provider participates in 

the network of the plan and is available 

to accept the child. In such a case, the 

plan must comply with the rules of 

paragraph (a)(4) of this section by 

informing each participant of the terms 

of the plan regarding designation of a 

pediatrician as the child’s primary care 

provider. 

(ii) Construction. Nothing in 

paragraph (a)(2)(i) of this section is to be 

construed to waive any exclusions of 

coverage under the terms and 

conditions of the plan with respect to 

coverage of pediatric care. 

(iii) Examples. The rules of this 

paragraph (a)(2) are illustrated by the 

following examples: 

(A) Example 1—(1) Facts. A group 

health plan’s HMO designates for each 

participant a physician who specializes 

in internal medicine to serve as the 

primary care provider for the participant 

and any beneficiaries. Participant A 

requests that Pediatrician B be 

designated as the primary care provider 

for A’s child. B is a participating 

provider in the HMO’s network and is 

available to accept the child. 

(2) Conclusion. In this Example 1, the 

HMO must permit A’s designation of B 

as the primary care provider for A’s 

child in order to comply with the 

requirements of this paragraph (a)(2). 

(B) Example 2—(1) Facts. Same facts 

as Example 1 (paragraph (a)(2)(iii)(A) of 

this section), except that A takes A’s 

child to B for treatment of the child’s 

severe shellfish allergies. B wishes to 

refer A’s child to an allergist for 

treatment. The HMO, however, does not 

provide coverage for treatment of food 

allergies, nor does it have an allergist 

participating in its network, and it 

therefore refuses to authorize the 

referral. 

(2) Conclusion. In this Example 2, the 

HMO has not violated the requirements 

of this paragraph (a)(2) because the 

exclusion of treatment for food allergies 

is in accordance with the terms of A’s 

coverage. 

(3) Patient access to obstetrical and 

gynecological care—(i) General rights— 

(A) Direct access. A group health plan 

described in paragraph (a)(3)(ii) of this 

section, may not require authorization 

or referral by the plan, or any person 

(including a primary care provider) in 

the case of a female participant or 

beneficiary who seeks coverage for 

obstetrical or gynecological care 

provided by a participating health care 

professional who specializes in 

obstetrics or gynecology. In such a case, 

the plan must comply with the rules of 

paragraph (a)(4) of this section by 

informing each participant that the plan 

may not require authorization or referral 

for obstetrical or gynecological care by 

a participating health care professional 

who specializes in obstetrics or 

gynecology. The plan may require such 

a professional to agree to otherwise 

adhere to the plan’s policies and 

procedures, including procedures 

regarding referrals and obtaining prior 

authorization and providing services 

pursuant to a treatment plan (if any) 

approved by the plan. For purposes of 

this paragraph (a)(3), a health care 

professional who specializes in 

obstetrics or gynecology is any 

individual (including a person other 

than a physician) who is authorized 

under applicable State law to provide 

obstetrical or gynecological care. 

(B) Obstetrical and gynecological 

care. A group health plan described in 

paragraph (a)(3)(ii) of this section must 

treat the provision of obstetrical and 

gynecological care, and the ordering of 

related obstetrical and gynecological 

items and services, pursuant to the 

direct access described under paragraph 

(a)(3)(i)(A) of this section, by a 

participating health care professional 

who specializes in obstetrics or 

gynecology as the authorization of the 

primary care provider. 

(ii) Application of paragraph. A group 

health plan is described in this 

paragraph (a)(3) if the plan— 

(A) Provides coverage for obstetrical 

or gynecological care; and 

(B) Requires the designation by a 

participant or beneficiary of a 

participating primary care provider. 

(iii) Construction. Nothing in 

paragraph (a)(3)(i) of this section is to be 

construed to— 

(A) Waive any exclusions of coverage 

under the terms and conditions of the 

plan with respect to coverage of 

obstetrical or gynecological care; or 

(B) Preclude the group health plan 

involved from requiring that the 

obstetrical or gynecological provider 

notify the primary care health care 


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professional or the plan of treatment 

decisions. 

(iv) Examples. The rules of this 

paragraph (a)(3) are illustrated by the 

following examples: 

(A) Example 1—(1) Facts. A group 

health plan requires each participant to 

designate a physician to serve as the 

primary care provider for the participant 

and the participant’s family. Participant 

A, a female, requests a gynecological 

exam with Physician B, an in-network 

physician specializing in gynecological 

care. The group health plan requires 

prior authorization from A’s designated 

primary care provider for the 

gynecological exam. 

(2) Conclusion. In this Example 1, the 

group health plan has violated the 

requirements of this paragraph (a)(3) 

because the plan requires prior 

authorization from A’s primary care 

provider prior to obtaining 

gynecological services. 

(B) Example 2—(1) Facts. Same facts 

as Example 1 (paragraph (a)(3)(iv)(A) of 

this section) except that A seeks 

gynecological services from C, an out-ofnetwork provider. 

(2) Conclusion. In this Example 2, the 

group health plan has not violated the 

requirements of this paragraph (a)(3) by 

requiring prior authorization because C 

is not a participating health care 

provider. 

(C) Example 3—(1) Facts. Same facts 

as Example 1 (paragraph (a)(3)(iv)(A) of 

this section) except that the group 

health plan only requires B to inform 

A’s designated primary care physician 

of treatment decisions. 

(2) Conclusion. In this Example 3, the 

group health plan has not violated the 

requirements of this paragraph (a)(3) 

because A has direct access to B without 

prior authorization. The fact that the 

group health plan requires the 

designated primary care physician to be 

notified of treatment decisions does not 

violate this paragraph (a)(3). 

(D) Example 4—(1) Facts. A group 

health plan requires each participant to 

designate a physician to serve as the 

primary care provider for the participant 

and the participant’s family. The group 

health plan requires prior authorization 

before providing benefits for uterine 

fibroid embolization. 

(2) Conclusion. In this Example 4, the 

plan requirement for prior authorization 

before providing benefits for uterine 

fibroid embolization does not violate the 

requirements of this paragraph (a)(3) 

because, though the prior authorization 

requirement applies to obstetrical 

services, it does not restrict access to 

any providers specializing in obstetrics 

or gynecology. 

(4) Notice of right to designate a 

primary care provider—(i) In general. If 

a group health plan requires the 

designation by a participant or 

beneficiary of a primary care provider, 

the plan must provide a notice 

informing each participant of the terms 

of the plan regarding designation of a 

primary care provider and of the 

rights— 

(A) Under paragraph (a)(1)(i) of this 

section, that any participating primary 

care provider who is available to accept 

the participant or beneficiary can be 

designated; 

(B) Under paragraph (a)(2)(i) of this 

section, with respect to a child, that any 

participating physician who specializes 

in pediatrics can be designated as the 

primary care provider; and 

(C) Under paragraph (a)(3)(i) of this 

section, that the plan may not require 

authorization or referral for obstetrical 

or gynecological care by a participating 

health care professional who specializes 

in obstetrics or gynecology. 

(ii) Timing. In the case of a group 

health plan, the notice described in 

paragraph (a)(4)(i) of this section must 

be included whenever the plan provides 

a participant with a summary plan 

description or other similar description 

of benefits under the plan. 

(iii) Model language. The following 

model language can be used to satisfy 

the notice requirement described in 

paragraph (a)(4)(i) of this section: 

(A) For plans that require or allow for 

the designation of primary care 

providers by participants or 

beneficiaries, insert: 

[Name of group health plan] generally 

[requires/allows] the designation of a primary 

care provider. You have the right to designate 

any primary care provider who participates 

in our network and who is available to accept 

you or your family members. [If the plan 

designates a primary care provider 

automatically, insert: Until you make this 

designation, [name of group health plan] 

designates one for you.] For information on 

how to select a primary care provider, and for 

a list of the participating primary care 

providers, contact the [plan administrator] at 

[insert contact information]. 

(B) For plans that require or allow for 

the designation of a primary care 

provider for a child, add: 

For children, you may designate a 

pediatrician as the primary care 

provider. 

(C) For plans that provide coverage for 

obstetric or gynecological care and 

require the designation by a participant 

or beneficiary of a primary care 

provider, add: 

You do not need prior authorization from 

[name of group health plan] or from any 

other person (including a primary care 

provider) in order to obtain access to 

obstetrical or gynecological care from a 

health care professional in our network who 

specializes in obstetrics or gynecology. The 

health care professional, however, may be 

required to comply with certain procedures, 

including obtaining prior authorization for 

certain services, following a pre-approved 

treatment plan, or procedures for making 

referrals. For a list of participating health 

care professionals who specialize in 

obstetrics or gynecology, contact the [plan 

administrator] at [insert contact information]. 

(b) Applicability date. The provisions 

of this section are applicable with 

respect to plan years beginning on or 

after January 1, 2022. 

Department of Labor 

Employee Benefits Security 

Administration 

29 CFR Chapter XXV 

For the reasons set forth in the 

preamble, the Department of Labor 

amends 29 CFR part 2590 as set forth 

below: 

PART 2590—RULES AND 

REGULATIONS FOR GROUP HEALTH 

PLANS. 

■ 9. The authority citation for part 2590 

is revised to read as follows: 

Authority: 29 U.S.C. 1027, 1059, 1135, 

1161–1168, 1169, 1181–1183, 1181 note, 

1185, 1185a–n, 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; 

Pub. L. 116–260 134 Stat. 1182; Secretary of 

Labor’s Order 1–2011, 77 FR 1088 (Jan. 9, 

2012). 

■ 10. Section 2590.715–2719A is 

amended by revising paragraph (c) to 

read as follows: 

§ 2590.715–2719A Patient protections. 

* * * * * 

(c) Applicability date. The provisions 

of this section are applicable to group 

health plans and health insurance 

issuers for plan years beginning before 

January 1, 2022. See also §§ 2590.716– 

4 through 2590.716–7, 2590.717–1, and 

2590.722 of this part for rules applicable 

with respect to plan years beginning on 

or after January 1, 2022. 

Subpart D [Redesignated as Subpart E] 

■ 11. Redesignate subpart D as subpart 

E and add a new subpart D to read as 

follows: 


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36960 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

Subpart D—Surprise Billing and 

Transparency Requirements 

Sec. 

2590.716–1 Basis and scope. 

2590.716–2 Applicability. 

2590.716–3 Definitions. 

2590.716–4 Preventing surprise medical 

bills for emergency services. 

2590.716–5 Preventing surprise medical 

bills for non-emergency services 

performed by nonparticipating providers 

at certain participating facilities. 

2590.716–6 Methodology for calculating 

qualifying payment amount. 

2590.716–7 Complaints process for surprise 

medical bills regarding group health 

plans and group health insurance 

coverage. 

2590.717–1 Preventing surprise medical 

bills for air ambulance services. 

2590.722 Choice of health care professional. 

Subpart D—Surprise Billing and 

Transparency Requirements 

§ 2590.716–1 Basis and scope. 

(a) Basis. Sections 2590.716–1 

through 2590.722 implement section 

716–722 of ERISA. 

(b) Scope. This part establishes 

standards for group health plans and 

health insurance issuers offering group 

health insurance coverage with respect 

to surprise medical bills, transparency 

in health care coverage, and additional 

patient protections. 

§ 2590.716–2 Applicability. 

(a) In general. The requirements in 

§§ 2590.716–4 through 2590.716–7, 

2590.717–1, and 2590.722 apply to 

group health plans and health insurance 

issuers offering group health insurance 

coverage (including grandfathered 

health plans as defined in § 2590.715– 

1251), except as specified in paragraph 

(b) of this section. 

(b) Exceptions. The requirements in 

§§ 2590.716–4 through 2590.716–7, 

2590.717–1, and 2590.722 do not apply 

to the following: 

(1) Excepted benefits as described in 

§ 2590.732. 

(2) Short-term, limited-duration 

insurance as defined in § 2590.701–2. 

(3) Health reimbursement 

arrangements or other account-based 

group health plans as described in 

§ 2590.715–2711(d). 

§ 2590.716–3 Definitions. 

The definitions in this part apply to 

§§ 2590.716 through 2590.722, unless 

otherwise specified. In addition, for 

purposes of §§ 2590.716 through 

2590.722, the following definitions 

apply: 

Air ambulance service means medical 

transport by a rotary wing air 

ambulance, as defined in 42 CFR 

414.605, or fixed wing air ambulance, as 

defined in 42 CFR 414.605, for patients. 

Cost sharing means the amount a 

participant or beneficiary is responsible 

for paying for a covered item or service 

under the terms of the group health plan 

or health insurance coverage. Cost 

sharing generally includes copayments, 

coinsurance, and amounts paid towards 

deductibles, but does not include 

amounts paid towards premiums, 

balance billing by out-of-network 

providers, or the cost of items or 

services that are not covered under a 

group health plan or health insurance 

coverage. 

Emergency department of a hospital 

includes a hospital outpatient 

department that provides emergency 

services. 

Emergency medical condition has the 

meaning given the term in § 2590.716– 

4(c)(1). 

Emergency services has the meaning 

given the term in § 2590.716–4(c)(2). 

Health care facility, with respect to a 

group health plan or group health 

insurance coverage, in the context of 

non-emergency services, is each of the 

following: 

(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); and 

(4) An ambulatory surgical center 

described in section 1833(i)(1)(A) of the 

Social Security Act. 

Independent freestanding emergency 

department means a health care facility 

(not limited to those described in the 

definition of health care facility with 

respect to non-emergency services) 

that— 

(1) Is geographically separate and 

distinct and licensed separately from a 

hospital under applicable State law; and 

(2) Provides any emergency services 

as described in § 2590.716–4(c)(2)(i). 

Nonparticipating emergency facility 

means an emergency department of a 

hospital, or an independent freestanding 

emergency department (or a hospital, 

with respect to services that pursuant to 

§ 2590.716–4(c)(2)(ii) are included as 

emergency services), that does not have 

a contractual relationship directly or 

indirectly with a group health plan or 

group health insurance coverage offered 

by a health insurance issuer, with 

respect to the furnishing of an item or 

service under the plan or coverage, 

respectively. 

Nonparticipating provider means any 

physician or other health care provider 

who does not have a contractual 

relationship directly or indirectly with a 

group health plan or group health 

insurance coverage offered by a health 

insurance issuer, with respect to the 

furnishing of an item or service under 

the plan or coverage, respectively. 

Notice of denial of payment means, 

with respect to an item or service for 

which benefits subject to the protections 

of §§ 2590.716–4, 2590.716–5, and 

2590.717–1 are provided or covered, a 

written notice from the plan or issuer to 

the health care provider, facility, or 

provider of air ambulance services, as 

applicable, that payment for such item 

or service will not be made by the plan 

or coverage and which explains the 

reason for denial. The term notice of 

denial of payment does not include a 

notice of benefit denial due to an 

adverse benefit determination as 

defined in § 2560.503–1 of this chapter. 

Out-of-network rate means, with 

respect to an item or service furnished 

by a nonparticipating provider, 

nonparticipating emergency facility, or 

nonparticipating provider of air 

ambulance services— 

(1) Subject to paragraph (3) of this 

definition, in a State that has in effect 

a specified State law, the amount 

determined in accordance with such 

law; 

(2) Subject to paragraph (3) of this 

definition, in a State that does not have 

in effect a specified State law— 

(i) Subject to paragraph (2)(ii) of this 

definition, if the nonparticipating 

provider or nonparticipating emergency 

facility and the plan or issuer agree on 

an amount of payment (including if the 

amount agreed upon is the initial 

payment sent by the plan or issuer 

under 26 CFR 54.9816–4T(b)(3)(iv)(A), 

54.9816–5T(c)(3), or 54.9817–1T(b)(4)(i); 

§ 2590.716–4(b)(3)(iv)(A), § 2590.716– 

5(c)(3), or § 2590.717–1(b)(4)(i); or 45 

CFR 149.110(b)(3)(iv)(A), 149.120(c)(3), 

or 149.130(b)(4)(i), as applicable, or is 

agreed on through negotiations with 

respect to such item or service), such 

agreed on amount; or 

(ii) If the nonparticipating provider or 

nonparticipating emergency facility and 

the plan or issuer enter into the 

independent dispute resolution (IDR) 

process under section 9816(c) or 9817(b) 

of the Internal Revenue Code, section 

716(c) or 717(b) of ERISA, or section 

2799A–1(c) or 2799A–2(b) of the PHS 

Act, as applicable, and do not agree 

before the date on which a certified IDR 

entity makes a determination with 

respect to such item or service under 

such subsection, the amount of such 

determination; or 

(3) In a State that has an All-Payer 

Model Agreement under section 1115A 

of the Social Security Act that applies 

with respect to the plan or issuer; the 

nonparticipating provider or 


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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 36961 

nonparticipating emergency facility; and 

the item or service, the amount that the 

State approves under the All-Payer 

Model Agreement for the item or 

service. 

Participating emergency facility 

means any emergency department of a 

hospital, or an independent freestanding 

emergency department (or a hospital, 

with respect to services that pursuant to 

§ 2590.716–4(c)(2)(ii) are included as 

emergency services), that has a 

contractual relationship directly or 

indirectly with a group health plan or 

health insurance issuer offering group 

health insurance coverage setting forth 

the terms and conditions on which a 

relevant item or service is provided to 

a participant or beneficiary under the 

plan or coverage, respectively. A single 

case agreement between an emergency 

facility and a plan or issuer that is used 

to address unique situations in which a 

participant or beneficiary requires 

services that typically occur out-ofnetwork constitutes a contractual 

relationship for purposes of this 

definition, and is limited to the parties 

to the agreement. 

Participating health care facility 

means any health care facility described 

in this section that has a contractual 

relationship directly or indirectly with a 

group health plan or health insurance 

issuer offering group health insurance 

coverage setting forth the terms and 

conditions on which a relevant item or 

service is provided to a participant or 

beneficiary under the plan or coverage, 

respectively. A single case agreement 

between a health care facility and a plan 

or issuer that is used to address unique 

situations in which a participant or 

beneficiary requires services that 

typically occur out-of-network 

constitutes a contractual relationship for 

purposes of this definition, and is 

limited to the parties to the agreement. 

Participating provider means any 

physician or other health care provider 

who has a contractual relationship 

directly or indirectly with a group 

health plan or health insurance issuer 

offering group health insurance 

coverage setting forth the terms and 

conditions on which a relevant item or 

service is provided to a participant or 

beneficiary under the plan or coverage, 

respectively. 

Physician or health care provider 

means a physician or other health care 

provider who is acting within the scope 

of practice of that provider’s license or 

certification under applicable State law, 

but does not include a provider of air 

ambulance services. 

Provider of air ambulance services 

means an entity that is licensed under 

applicable State and Federal law to 

provide air ambulance services. 

Same or similar item or service has 

the meaning given the term in 

§ 2590.716–6(a)(13). 

Service code has the meaning given 

the term in § 2590.716–6(a)(14). 

Qualifying payment amount has the 

meaning given the term in § 2590.716– 

6(a)(16). 

Recognized amount means, with 

respect to an item or service furnished 

by a nonparticipating provider or 

nonparticipating emergency facility— 

(1) Subject to paragraph (3) of this 

definition, in a State that has in effect 

a specified State law, the amount 

determined in accordance with such 

law. 

(2) Subject to paragraph (3) of this 

definition, in a State that does not have 

in effect a specified State law, the lesser 

of— 

(i) The amount that is the qualifying 

payment amount (as determined in 

accordance with § 2590.716–6); or 

(ii) The amount billed by the provider 

or facility. 

(3) In a State that has an All-Payer 

Model Agreement under section 1115A 

of the Social Security Act that applies 

with respect to the plan or issuer; the 

nonparticipating provider or 

nonparticipating emergency facility; and 

the item or service, the amount that the 

State approves under the All-Payer 

Model Agreement for the item or 

service. 

Specified State law means a State law 

that provides for a method for 

determining the total amount payable 

under a group health plan or group 

health insurance coverage offered by a 

health insurance issuer to the extent 

such State law applies for an item or 

service furnished by a nonparticipating 

provider or nonparticipating emergency 

facility (including where it applies 

because the State has allowed a plan 

that is not otherwise subject to 

applicable State law an opportunity to 

opt in, subject to section 514 of ERISA). 

A group health plan that opts into such 

a specified State law must do so for all 

items and services to which the 

specified State law applies and in a 

manner determined by the applicable 

State authority, and must prominently 

display in its plan materials describing 

the coverage of out-of-network services 

a statement that the plan has opted into 

the specified State law, identify the 

relevant State (or States), and include a 

general description of the items and 

services provided by nonparticipating 

facilities and providers that are covered 

by the specified State law. 

State means each of the 50 States, the 

District of Columbia, Puerto Rico, the 

Virgin Islands, Guam, American Samoa, 

and the Northern Mariana Islands. 

Treating provider is a physician or 

health care provider who has evaluated 

the individual. 

Visit, with respect to items and 

services furnished to an individual at a 

health care facility, includes, in 

addition to items and services furnished 

by a provider at the facility, equipment 

and devices, telemedicine services, 

imaging services, laboratory services, 

and preoperative and postoperative 

services, regardless of whether the 

provider furnishing such items or 

services is at the facility. 

§ 2590.716–4 Preventing surprise medical 

bills for emergency services. 

(a) In general. If a group health plan, 

or a health insurance issuer offering 

group health insurance coverage, 

provides or covers any benefits with 

respect to services in an emergency 

department of a hospital or with respect 

to emergency services in an 

independent freestanding emergency 

department, the plan or issuer must 

cover emergency services, as defined in 

paragraph (c)(2) of this section, and this 

coverage must be provided in 

accordance with paragraph (b) of this 

section. 

(b) Coverage requirements. A plan or 

issuer described in paragraph (a) of this 

section must provide coverage for 

emergency services in the following 

manner— 

(1) Without the need for any prior 

authorization determination, even if the 

services are provided on an out-ofnetwork basis. 

(2) Without regard to whether the 

health care provider furnishing the 

emergency services is a participating 

provider or a participating emergency 

facility, as applicable, with respect to 

the services. 

(3) If the emergency services are 

provided by a nonparticipating provider 

or a nonparticipating emergency 

facility— 

(i) Without imposing any 

administrative requirement or limitation 

on coverage that is more restrictive than 

the requirements or limitations that 

apply to emergency services received 

from participating providers and 

participating emergency facilities. 

(ii) Without imposing cost-sharing 

requirements that are greater than the 

requirements that would apply if the 

services were provided by a 

participating provider or a participating 

emergency facility. 

(iii) By calculating the cost-sharing 

requirement as if the total amount that 

would have been charged for the 

services by such participating provider 


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36962 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

or participating emergency facility were 

equal to the recognized amount for such 

services. 

(iv) The plan or issuer— 

(A) Not later than 30 calendar days 

after the bill for the services is 

transmitted by the provider or facility 

(or, in cases where the recognized 

amount is determined by a specified 

State law or All-Payer Model 

Agreement, such other timeframe as 

specified by the State law or All-Payer 

Model Agreement), determines whether 

the services are covered under the plan 

or coverage and, if the services are 

covered, sends to the provider or 

facility, as applicable, an initial 

payment or a notice of denial of 

payment. For purposes of this paragraph 

(b)(3)(iv)(A), the 30-calendar-day period 

begins on the date the plan or issuer 

receives the information necessary to 

decide a claim for payment for the 

services. 

(B) Pays a total plan or coverage 

payment directly to the nonparticipating 

provider or nonparticipating facility that 

is equal to the amount by which the outof-network rate for the services exceeds 

the cost-sharing amount for the services 

(as determined in accordance with 

paragraphs (b)(3)(ii) and (iii) of this 

section), less any initial payment 

amount made under paragraph 

(b)(3)(iv)(A) of this section. The total 

plan or coverage payment must be made 

in accordance with the timing 

requirement described in section 

716(c)(6) of ERISA, or in cases where 

the out-of-network rate is determined 

under a specified State law or All-Payer 

Model Agreement, such other timeframe 

as specified by the State law or AllPayer Model Agreement. 

(v) By counting any cost-sharing 

payments made by the participant or 

beneficiary with respect to the 

emergency services toward any innetwork deductible or in-network outof-pocket maximums (including the 

annual limitation on cost sharing under 

section 2707(b) of the PHS Act) (as 

applicable) applied under the plan or 

coverage (and the in-network deductible 

and in-network out-of-pocket 

maximums must be applied) in the same 

manner as if the cost-sharing payments 

were made with respect to emergency 

services furnished by a participating 

provider or a participating emergency 

facility. 

(4) Without limiting what constitutes 

an emergency medical condition (as 

defined in paragraph (c)(1) of this 

section) solely on the basis of diagnosis 

codes. 

(5) Without regard to any other term 

or condition of the coverage, other 

than— 

(i) The exclusion or coordination of 

benefits (to the extent not inconsistent 

with benefits for an emergency medical 

condition, as defined in paragraph (c)(1) 

of this section). 

(ii) An affiliation or waiting period 

(each as defined in § 2590.701–2). 

(iii) Applicable cost sharing. 

(c) Definitions. In this section— 

(1) Emergency medical condition 

means a medical condition, including a 

mental health condition or substance 

use disorder, manifesting itself by acute 

symptoms of sufficient severity 

(including severe pain) such that a 

prudent layperson, who possesses an 

average knowledge of health and 

medicine, could reasonably expect the 

absence of immediate medical attention 

to result in a condition described in 

clause (i), (ii), or (iii) of section 

1867(e)(1)(A) of the Social Security Act 

(42 U.S.C. 1395dd(e)(1)(A)). (In that 

provision of the Social Security Act, 

clause (i) refers to placing the health of 

the individual (or, with respect to a 

pregnant woman, the health of the 

woman or her unborn child) in serious 

jeopardy; clause (ii) refers to serious 

impairment to bodily functions; and 

clause (iii) refers to serious dysfunction 

of any bodily organ or part.) 

(2) Emergency services means, with 

respect to an emergency medical 

condition— 

(i) In general. (A) An appropriate 

medical screening examination (as 

required under section 1867 of the 

Social Security Act (42 U.S.C. 1395dd) 

or as would be required under such 

section if such section applied to an 

independent freestanding emergency 

department) that is within the capability 

of the emergency department of a 

hospital or of an independent 

freestanding emergency department, as 

applicable, including ancillary services 

routinely available to the emergency 

department to evaluate such emergency 

medical condition; and 

(B) Within the capabilities of the staff 

and facilities available at the hospital or 

the independent freestanding 

emergency department, as applicable, 

such further medical examination and 

treatment as are required under section 

1867 of the Social Security Act (42 

U.S.C. 1395dd), or as would be required 

under such section if such section 

applied to an independent freestanding 

emergency department, to stabilize the 

patient (regardless of the department of 

the hospital in which such further 

examination or treatment is furnished). 

(ii) Inclusion of additional services. 

(A) Subject to paragraph (c)(2)(ii)(B) of 

this section, items and services— 

(1) For which benefits are provided or 

covered under the plan or coverage; and 

(2) That are furnished by a 

nonparticipating provider or 

nonparticipating emergency facility 

(regardless of the department of the 

hospital in which such items or services 

are furnished) after the participant or 

beneficiary is stabilized and as part of 

outpatient observation or an inpatient or 

outpatient stay with respect to the visit 

in which the services described in 

paragraph (c)(2)(i) of this section are 

furnished. 

(B) Items and services described in 

paragraph (c)(2)(ii)(A) of this section are 

not included as emergency services if all 

of the conditions in 45 CFR 149.410(b) 

are met. 

(3) To stabilize, with respect to an 

emergency medical condition, has the 

meaning given such term in section 

1867(e)(3) of the Social Security Act (42 

U.S.C. 1395dd(e)(3)). 

(d) Applicability date. The provisions 

of this section are applicable with 

respect to plan years beginning on or 

after January 1, 2022. 

§ 2590.716–5 Preventing surprise medical 

bills for non-emergency services performed 

by nonparticipating providers at certain 

participating facilities. 

(a) In general. If a group health plan, 

or a health insurance issuer offering 

group health insurance coverage, 

provides or covers any benefits with 

respect to items and services described 

in paragraph (b) of this section, the plan 

or issuer must cover the items and 

services when furnished by a 

nonparticipating provider in accordance 

with paragraph (c) of this section. 

(b) Items and services described. The 

items and services described in this 

paragraph (b) are items and services 

(other than emergency services) 

furnished to a participant or beneficiary 

by a nonparticipating provider with 

respect to a visit at a participating 

health care facility, unless the provider 

has satisfied the notice and consent 

criteria of 45 CFR 149.420(c) through (i) 

with respect to such items and services. 

(c) Coverage requirements. In the case 

of items and services described in 

paragraph (b) of this section, the plan or 

issuer— 

(1) Must not impose a cost-sharing 

requirement for the items and services 

that is greater than the cost-sharing 

requirement that would apply if the 

items or services had been furnished by 

a participating provider. 

(2) Must calculate the cost-sharing 

requirements as if the total amount that 

would have been charged for the items 

and services by such participating 

provider were equal to the recognized 

amount for the items and services. 

(3) Not later than 30 calendar days 

after the bill for the items or services is 


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transmitted by the provider (or in cases 

where the recognized amount is 

determined by a specified State law or 

All-Payer Model Agreement, such other 

timeframe as specified under the State 

law or All-Payer Model Agreement), 

must determine whether the items and 

services are covered under the plan or 

coverage and, if the items and services 

are covered, send to the provider an 

initial payment or a notice of denial of 

payment. For purposes of this paragraph 

(c)(3), the 30-calendar-day period begins 

on the date the plan or issuer receives 

the information necessary to decide a 

claim for payment for the items or 

services. 

(4) Must pay a total plan or coverage 

payment directly to the nonparticipating 

provider that is equal to the amount by 

which the out-of-network rate for the 

items and services involved exceeds the 

cost-sharing amount for the items and 

services (as determined in accordance 

with paragraphs (c)(1) and (2) of this 

section), less any initial payment 

amount made under paragraph (c)(3) of 

this section. The total plan or coverage 

payment must be made in accordance 

with the timing requirement described 

in section 716(c)(6) of ERISA, or in cases 

where the out-of-network rate is 

determined under a specified State law 

or All-Payer Model Agreement, such 

other timeframe as specified by the State 

law or All-Payer Model Agreement. 

(5) Must count any cost-sharing 

payments made by the participant or 

beneficiary toward any in-network 

deductible and in-network out-of-pocket 

maximums (including the annual 

limitation on cost sharing under section 

2707(b) of the PHS Act) (as applicable) 

applied under the plan or coverage (and 

the in-network deductible and out-ofpocket maximums must be applied) in 

the same manner as if such cost-sharing 

payments were made with respect to 

items and services furnished by a 

participating provider. 

(d) Applicability date. The provisions 

of this section are applicable with 

respect to plan years beginning on or 

after January 1, 2022. 

§ 2590.716–6 Methodology for calculating 

qualifying payment amount. 

(a) Definitions. For purposes of this 

section, the following definitions apply: 

(1) Contracted rate means the total 

amount (including cost sharing) that a 

group health plan or health insurance 

issuer has contractually agreed to pay a 

participating provider, facility, or 

provider of air ambulance services for 

covered items and services, whether 

directly or indirectly, including through 

a third-party administrator or pharmacy 

benefit manager. Solely for purposes of 

this definition, a single case agreement, 

letter of agreement, or other similar 

arrangement between a provider, 

facility, or air ambulance provider and 

a plan or issuer, used to supplement the 

network of the plan or coverage for a 

specific participant or beneficiary in 

unique circumstances, does not 

constitute a contract. 

(2) Derived amount has the meaning 

given the term in § 2590.715–2715A1. 

(3) Eligible database means— 

(i) A State all-payer claims database; 

or 

(ii) Any third-party database which— 

(A) Is not affiliated with, or owned or 

controlled by, any health insurance 

issuer, or a health care provider, facility, 

or provider of air ambulance services (or 

any member of the same controlled 

group as, or under common control 

with, such an entity). For purposes of 

this paragraph (a)(3)(ii)(A), the term 

controlled group means a group of two 

or more persons that is treated as a 

single employer under sections 52(a), 

52(b), 414(m), or 414(o) of the Internal 

Revenue Code of 1986, as amended; 

(B) Has sufficient information 

reflecting in-network amounts paid by 

group health plans or health insurance 

issuers offering group health insurance 

coverage to providers, facilities, or 

providers of air ambulance services for 

relevant items and services furnished in 

the applicable geographic region; and 

(C) Has the ability to distinguish 

amounts paid to participating providers 

and facilities by commercial payers, 

such as group health plans and health 

insurance issuers offering group health 

insurance coverage, from all other 

claims data, such as amounts billed by 

nonparticipating providers or facilities 

and amounts paid by public payers, 

including the Medicare program under 

title XVIII of the Social Security Act, the 

Medicaid program under title XIX of the 

Social Security Act (or a demonstration 

project under title XI of the Social 

Security Act), or the Children’s Health 

Insurance Program under title XXI of the 

Social Security Act. 

(4) Facility of the same or similar 

facility type means, with respect to 

emergency services, either— 

(i) An emergency department of a 

hospital; or 

(ii) An independent freestanding 

emergency department. 

(5) First coverage year means, with 

respect to an item or service for which 

coverage is not offered in 2019 under a 

group health plan or group health 

insurance coverage offered by a health 

insurance issuer, the first year after 2019 

for which coverage for such item or 

service is offered under that plan or 

coverage. 

(6) First sufficient information year 

means, with respect to a group health 

plan or group health insurance coverage 

offered by a health insurance issuer— 

(i) In the case of an item or service for 

which the plan or coverage does not 

have sufficient information to calculate 

the median of the contracted rates 

described in paragraph (b) of this 

section in 2019, the first year after 2022 

for which the plan or issuer has 

sufficient information to calculate the 

median of such contracted rates in the 

year immediately preceding that first 

year after 2022; and 

(ii) In the case of a newly covered 

item or service, the first year after the 

first coverage year for such item or 

service with respect to such plan or 

coverage for which the plan or issuer 

has sufficient information to calculate 

the median of the contracted rates 

described in paragraph (b) of this 

section in the year immediately 

preceding that first year. 

(7) Geographic region means— 

(i) For items and services other than 

air ambulance services— 

(A) Subject to paragraphs (a)(7)(i)(B) 

and (C) of this section, one region for 

each metropolitan statistical area, as 

described by the U.S. Office of 

Management and Budget and published 

by the U.S. Census Bureau, in a State, 

and one region consisting of all other 

portions of the State. 

(B) If a plan or issuer does not have 

sufficient information to calculate the 

median of the contracted rates described 

in paragraph (b) of this section for an 

item or service provided in a geographic 

region described in paragraph 

(a)(7)(i)(A) of this section, one region 

consisting of all metropolitan statistical 

areas, as described by the U.S. Office of 

Management and Budget and published 

by the U.S. Census Bureau, in the State, 

and one region consisting of all other 

portions of the State. 

(C) If a plan or issuer does not have 

sufficient information to calculate the 

median of the contracted rates described 

in paragraph (b) of this section for an 

item or service provided in a geographic 

region described in paragraph 

(a)(7)(i)(B) of this section, one region 

consisting of all metropolitan statistical 

areas, as described by the U.S. Office of 

Management and Budget and published 

by the U.S. Census Bureau, in each 

Census division and one region 

consisting of all other portions of the 

Census division, as described by the 

U.S. Census Bureau. 

(ii) For air ambulance services— 

(A) Subject to paragraph (a)(7)(ii)(B) of 

this section, one region consisting of all 

metropolitan statistical areas, as 

described by the U.S. Office of 


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Management and Budget and published 

by the U.S. Census Bureau, in the State, 

and one region consisting of all other 

portions of the State, determined based 

on the point of pick-up (as defined in 42 

CFR 414.605). 

(B) If a plan or issuer does not have 

sufficient information to calculate the 

median of the contracted rates described 

in paragraph (b) of this section for an air 

ambulance service provided in a 

geographic region described in 

paragraph (a)(7)(ii)(A) of this section, 

one region consisting of all metropolitan 

statistical areas, as described by the U.S. 

Office of Management and Budget and 

published by the U.S. Census Bureau, in 

each Census division and one region 

consisting of all other portions of the 

Census division, as described by the 

U.S. Census Bureau, determined based 

on the point of pick-up (as defined in 42 

CFR 414.605). 

(8) Insurance market is, irrespective 

of the State, one of the following: 

(i) The individual market (other than 

short-term, limited-duration insurance 

or individual health insurance coverage 

that consists solely of excepted 

benefits). 

(ii) The large group market (other than 

coverage that consists solely of excepted 

benefits). 

(iii) The small group market (other 

than coverage that consists solely of 

excepted benefits). 

(iv) In the case of a self-insured group 

health plan, all self-insured group 

health plans (other than account-based 

plans, as defined in § 2590.715– 

2711(d)(6)(i), and plans that consist 

solely of excepted benefits) of the same 

plan sponsor, or at the option of the 

plan sponsor, all self-insured group 

health plans administered by the same 

entity (including a third-party 

administrator contracted by the plan), to 

the extent otherwise permitted by law, 

that is responsible for calculating the 

qualifying payment amount on behalf of 

the plan. 

(9) Modifiers mean codes applied to 

the service code that provide a more 

specific description of the furnished 

item or service and that may adjust the 

payment rate or affect the processing or 

payment of the code billed. 

(10) Newly covered item or service 

means an item or service for which 

coverage was not offered in 2019 under 

a group health plan or group health 

insurance coverage offered by a health 

insurance issuer, but that is offered 

under the plan or coverage in a year 

after 2019. 

(11) New service code means a service 

code that was created or substantially 

revised in a year after 2019. 

(12) Provider in the same or similar 

specialty means the practice specialty of 

a provider, as identified by the plan or 

issuer consistent with the plan’s or 

issuer’s usual business practice, except 

that, with respect to air ambulance 

services, all providers of air ambulance 

services are considered to be a single 

provider specialty. 

(13) Same or similar item or service 

means a health care item or service 

billed under the same service code, or 

a comparable code under a different 

procedural code system. 

(14) Service code means the code that 

describes an item or service using the 

Current Procedural Terminology (CPT) 

code, Healthcare Common Procedure 

Coding System (HCPCS), or DiagnosisRelated Group (DRG) codes. 

(15) Sufficient information means, for 

purposes of determining whether a 

group health plan or health insurance 

issuer offering group health insurance 

coverage has sufficient information to 

calculate the median of the contracted 

rates described in paragraph (b) of this 

section— 

(i) The plan or issuer has at least three 

contracted rates on January 31, 2019, to 

calculate the median of the contracted 

rates in accordance with paragraph (b) 

of this section; or 

(ii) For an item or service furnished 

during a year after 2022 that is used to 

determine the first sufficient 

information year— 

(A) The plan or issuer has at least 

three contracted rates on January 31 of 

the year immediately preceding that 

year to calculate the median of the 

contracted rates in accordance with 

paragraph (b) of this section; and 

(B) The contracted rates under 

paragraph (a)(15)(ii)(A) of this section 

account (or are reasonably expected to 

account) for at least 25 percent of the 

total number of claims paid for that item 

or service for that year with respect to 

all plans of the sponsor (or the 

administering entity as provided in 

paragraph (a)(8)(iv) of this section, if 

applicable) or all coverage offered by the 

issuer that are offered in the same 

insurance market. 

(16) Qualifying payment amount 

means, with respect to a sponsor of a 

group health plan or health insurance 

issuer offering group health insurance 

coverage, the amount calculated using 

the methodology described in paragraph 

(c) of this section. 

(17) Underlying fee schedule rate 

means the rate for a covered item or 

service from a particular participating 

provider, providers, or facility that a 

group health plan or health insurance 

issuer uses to determine a participant’s 

or beneficiary’s cost-sharing liability for 

the item or service, when that rate is 

different from the contracted rate. 

(b) Methodology for calculation of 

median contracted rate—(1) In general. 

The median contracted rate for an item 

or service is calculated by arranging in 

order from least to greatest the 

contracted rates of all group health 

plans of the plan sponsor (or the 

administering entity as provided in 

paragraph (a)(8)(iv) of this section, if 

applicable) or all group health insurance 

coverage offered by the issuer in the 

same insurance market for the same or 

similar item or service that is provided 

by a provider in the same or similar 

specialty or facility of the same or 

similar facility type and provided in the 

geographic region in which the item or 

service is furnished and selecting the 

middle number. If there are an even 

number of contracted rates, the median 

contracted rate is the average of the 

middle two contracted rates. In 

determining the median contracted rate, 

the amount negotiated under each 

contract is treated as a separate amount. 

If a plan or issuer has a contract with 

a provider group or facility, the rate 

negotiated with that provider group or 

facility under the contract is treated as 

a single contracted rate if the same 

amount applies with respect to all 

providers of such provider group or 

facility under the single contract. 

However, if a plan or issuer has a 

contract with multiple providers, with 

separate negotiated rates with each 

particular provider, each unique 

contracted rate with an individual 

provider constitutes a single contracted 

rate. Further, if a plan or issuer has 

separate contracts with individual 

providers, the contracted rate under 

each such contract constitutes a single 

contracted rate (even if the same amount 

is paid to multiple providers under 

separate contracts). 

(2) Calculation rules. In calculating 

the median contracted rate, a plan or 

issuer must: 

(i) Calculate the median contracted 

rate with respect to all plans of such 

sponsor (or the administering entity as 

provided in paragraph (a)(8)(iv) of this 

section, if applicable) or all coverage 

offered by such issuer that are offered in 

the same insurance market; 

(ii) Calculate the median contracted 

rate using the full contracted rate 

applicable to the service code, except 

that the plan or issuer must— 

(A) Calculate separate median 

contracted rates for CPT code modifiers 

‘‘26’’ (professional component) and 

‘‘TC’’ (technical component); 

(B) For anesthesia services, calculate 

a median contracted rate for the 


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anesthesia conversion factor for each 

service code; 

(C) For air ambulance services, 

calculate a median contracted rate for 

the air mileage service codes (A0435 

and A0436); and 

(D) Where contracted rates otherwise 

vary based on applying a modifier code, 

calculate a separate median contracted 

rate for each such service code-modifier 

combination; 

(iii) In the case of payments made by 

a plan or issuer that are not on a fee-forservice basis (such as bundled or 

capitation payments), calculate a 

median contracted rate for each item or 

service using the underlying fee 

schedule rates for the relevant items or 

services. If the plan or issuer does not 

have an underlying fee schedule rate for 

the item or service, it must use the 

derived amount to calculate the median 

contracted rate; and 

(iv) Exclude risk sharing, bonus, 

penalty, or other incentive-based or 

retrospective payments or payment 

adjustments. 

(3) Provider specialties; facility types. 

(i) If a plan or issuer has contracted rates 

that vary based on provider specialty for 

a service code, the median contracted 

rate is calculated separately for each 

provider specialty, as applicable. 

(ii) If a plan or issuer has contracted 

rates for emergency services that vary 

based on facility type for a service code, 

the median contracted rate is calculated 

separately for each facility of the same 

or similar facility type. 

(c) Methodology for calculation of the 

qualifying payment amount—(1) In 

general. (i) For an item or service (other 

than items or services described in 

paragraphs (c)(1)(iii) through (vii) of this 

section) furnished during 2022, the plan 

or issuer must calculate the qualifying 

payment amount by increasing the 

median contracted rate (as determined 

in accordance with paragraph (b) of this 

section) for the same or similar item or 

service under such plans or coverage, 

respectively, on January 31, 2019, by the 

combined percentage increase as 

published by the Department of the 

Treasury and the Internal Revenue 

Service to reflect the percentage 

increase in the CPI–U over 2019, such 

percentage increase over 2020, and such 

percentage increase over 2021. 

(A) The combined percentage increase 

for 2019, 2020, and 2021 will be 

published in guidance by the Internal 

Revenue Service. The Department of the 

Treasury and the Internal Revenue 

Service will calculate the percentage 

increase using the CPI–U published by 

the Bureau of Labor Statistics of the 

Department of Labor. 

(B) For purposes of this paragraph 

(c)(1)(i), the CPI–U for each calendar 

year is the average of the CPI–U as of the 

close of the 12-month period ending on 

August 31 of the calendar year, rounded 

to 10 decimal places. 

(C) The combined percentage increase 

for 2019, 2020, and 2021 will be 

calculated as: 

(CPI–U 2019/CPI–U 2018) × (CPI–U 

2020/CPI–U 2019) × (CPI–U 2021/ 

CPI–U 2020) 

(ii) For an item or service (other than 

items or services described in 

paragraphs (c)(1)(iii) through (vii) of this 

section) furnished during 2023 or a 

subsequent year, the plan or issuer must 

calculate the qualifying payment 

amount by increasing the qualifying 

payment amount determined under 

paragraph (c)(1)(i) of this section, for 

such an item or service furnished in the 

immediately preceding year, by the 

percentage increase as published by the 

Department of the Treasury and the 

Internal Revenue Service. 

(A) The percentage increase for any 

year after 2022 will be published in 

guidance by the Internal Revenue 

Service. The Department of the Treasury 

and Internal Revenue Service will 

calculate the percentage increase using 

the CPI–U published by the Bureau of 

Labor Statistics of the Department of 

Labor. 

(B) For purposes of this paragraph 

(c)(1)(ii), the CPI–U for each calendar 

year is the average of the CPI–U as of the 

close of the 12-month period ending on 

August 31 of the calendar year, rounded 

to 10 decimal places. 

(C) The combined percentage increase 

for any year will be calculated as CPI– 

U present year/CPI–U prior year. 

(iii) For anesthesia services furnished 

during 2022, the plan or issuer must 

calculate the qualifying payment 

amount by first increasing the median 

contracted rate for the anesthesia 

conversion factor (as determined in 

accordance with paragraph (b) of this 

section) for the same or similar item or 

service under such plans or coverage, 

respectively, on January 31, 2019, in 

accordance with paragraph (c)(1)(i) of 

this section (referred to in this section 

as the indexed median contracted rate 

for the anesthesia conversion factor). 

The plan or issuer must then multiply 

the indexed median contracted rate for 

the anesthesia conversion factor by the 

sum of the base unit, time unit, and 

physical status modifier units of the 

participant or beneficiary to whom 

anesthesia services are furnished to 

determine the qualifying payment 

amount. 

(A) The base units for an anesthesia 

service code are the base units for that 

service code specified in the most recent 

edition (as of the date of service) of the 

American Society of Anesthesiologists 

Relative Value Guide. 

(B) The time unit is measured in 15- 

minute increments or a fraction thereof. 

(C) The physical status modifier on a 

claim is a standard modifier describing 

the physical status of the patient and is 

used to distinguish between various 

levels of complexity of the anesthesia 

services provided, and is expressed as a 

unit with a value between zero (0) and 

three (3). 

(D) The anesthesia conversion factor 

is expressed in dollars per unit and is 

a contracted rate negotiated with the 

plan or issuer. 

(iv) For anesthesia services furnished 

during 2023 or a subsequent year, the 

plan or issuer must calculate the 

qualifying payment amount by first 

increasing the indexed median 

contracted rate for the anesthesia 

conversion factor, determined under 

paragraph (c)(1)(iii) of this section for 

such services furnished in the 

immediately preceding year, in 

accordance with paragraph (c)(1)(ii) of 

this section. The plan or issuer must 

then multiply that amount by the sum 

of the base unit, time unit, and physical 

status modifier units for the participant 

or beneficiary to whom anesthesia 

services are furnished to determine the 

qualifying payment amount. 

(v) For air ambulance services billed 

using the air mileage service codes 

(A0435 and A0436) that are furnished 

during 2022, the plan or issuer must 

calculate the qualifying payment 

amount for services billed using the air 

mileage service codes by first increasing 

the median contracted rate (as 

determined in accordance with 

paragraph (b) of this section), in 

accordance with paragraph (c)(1)(i) of 

this section (referred to in this section 

as the indexed median air mileage rate). 

The plan or issuer must then multiply 

the indexed median air mileage rate by 

the number of loaded miles provided to 

the participant or beneficiary to 

determine the qualifying payment 

amount. 

(A) The air mileage rate is expressed 

in dollars per loaded mile flown, is 

expressed in statute miles (not nautical 

miles), and is a contracted rate 

negotiated with the plan or issuer. 

(B) The number of loaded miles is the 

number of miles a patient is transported 

in the air ambulance vehicle. 

(C) The qualifying payment amount 

for other service codes associated with 

air ambulance services is calculated in 

accordance with paragraphs (c)(1)(i) and 

(ii) of this section. 


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(vi) For air ambulance services billed 

using the air mileage service codes 

(A0435 and A0436) that are furnished 

during 2023 or a subsequent year, the 

plan or issuer must calculate the 

qualifying payment amount by first 

increasing the indexed median air 

mileage rate, determined under 

paragraph (c)(1)(v) of this section for 

such services furnished in the 

immediately preceding year, in 

accordance with paragraph (c)(1)(ii) of 

this section. The plan or issuer must 

then multiply the indexed median air 

mileage rate by the number of loaded 

miles provided to the participant or 

beneficiary to determine the qualifying 

payment amount. 

(vii) For any other items or services 

for which a plan or issuer generally 

determines payment for the same or 

similar items or services by multiplying 

a contracted rate by another unit value, 

the plan or issuer must calculate the 

qualifying payment amount using a 

methodology that is similar to the 

methodology required under paragraphs 

(c)(1)(iii) through (vi) of this section and 

reasonably reflects the payment 

methodology for same or similar items 

or services. 

(2) New plans and coverage. With 

respect to a sponsor of a group health 

plan or health insurance issuer offering 

group health insurance coverage in a 

geographic region in which the sponsor 

or issuer, respectively, did not offer any 

group health plan or health insurance 

coverage during 2019— 

(i) For the first year in which the 

group health plan or group health 

insurance coverage, respectively, is 

offered in such region— 

(A) If the plan or issuer has sufficient 

information to calculate the median of 

the contracted rates described in 

paragraph (b) of this section, the plan or 

issuer must calculate the qualifying 

payment amount in accordance with 

paragraph (c)(1) of this section for items 

and services that are covered by the 

plan or coverage and furnished during 

the first year; and 

(B) If the plan or issuer does not have 

sufficient information to calculate the 

median of the contracted rates described 

in paragraph (b) of this section for an 

item or service provided in a geographic 

region, the plan or issuer must 

determine the qualifying payment 

amount for the item or service in 

accordance with paragraph (c)(3)(i) of 

this section. 

(ii) For each subsequent year the 

group health plan or group health 

insurance coverage, respectively, is 

offered in the region, the plan or issuer 

must calculate the qualifying payment 

amount by increasing the qualifying 

payment amount determined under this 

paragraph (c)(2) for the items and 

services furnished in the immediately 

preceding year, in accordance with 

paragraph (c)(1)(ii), (iv), or (vi) of this 

section, as applicable. 

(3) Insufficient information; newly 

covered items and services. In the case 

of a plan or issuer that does not have 

sufficient information to calculate the 

median of the contracted rates described 

in paragraph (b) of this section in 2019 

(or, in the case of a newly covered item 

or service, in the first coverage year for 

such item or service with respect to 

such plan or coverage if the plan or 

issuer does not have sufficient 

information) for an item or service 

provided in a geographic region— 

(i) For an item or service furnished 

during 2022 (or, in the case of a newly 

covered item or service, during the first 

coverage year for the item or service 

with respect to the plan or coverage), 

the plan or issuer must calculate the 

qualifying payment amount by first 

identifying the rate that is equal to the 

median of the in-network allowed 

amounts for the same or similar item or 

service provided in the geographic 

region in the year immediately 

preceding the year in which the item or 

service is furnished (or, in the case of a 

newly covered item or service, the year 

immediately preceding such first 

coverage year) determined by the plan 

or issuer, respectively, through use of 

any eligible database, and then 

increasing that rate by the percentage 

increase in the CPI–U over such 

preceding year. For purposes of this 

section, in cases in which an eligible 

database is used to determine the 

qualifying payment amount with respect 

to an item or service furnished during 

a calendar year, the plan or issuer must 

use the same database for determining 

the qualifying payment amount for that 

item or service furnished through the 

last day of the calendar year, and if a 

different database is selected for some 

items or services, the basis for that 

selection must be one or more factors 

not directly related to the rate of those 

items or services (such as sufficiency of 

data for those items or services). 

(ii) For an item or service furnished in 

a subsequent year (before the first 

sufficient information year for such item 

or service with respect to such plan or 

coverage), the plan or issuer must 

calculate the qualifying payment 

amount by increasing the qualifying 

payment amount determined under 

paragraph (c)(3)(i) of this section or this 

paragraph (c)(3)(ii), as applicable, for 

such item or service for the year 

immediately preceding such subsequent 

year, by the percentage increase in CPI– 

U over such preceding year; 

(iii) For an item or service furnished 

in the first sufficient information year 

for such item or service with respect to 

such plan or coverage, the plan or issuer 

must calculate the qualifying payment 

amount in accordance with paragraph 

(c)(1)(i), (iii), or (v) of this section, as 

applicable, except that in applying such 

paragraph to such item or service, the 

reference to ‘furnished during 2022’ is 

treated as a reference to furnished 

during such first sufficient information 

year, the reference to ‘in 2019’ is treated 

as a reference to such sufficient 

information year, and the increase 

described in such paragraph is not 

applied; and 

(iv) For an item or service furnished 

in any year subsequent to the first 

sufficient information year for such item 

or service with respect to such plan or 

coverage, the plan or issuer must 

calculate the qualifying payment 

amount in accordance with paragraph 

(c)(1)(ii), (iv), or (vi) of this section, as 

applicable, except that in applying such 

paragraph to such item or service, the 

reference to ‘furnished during 2023 or a 

subsequent year’ is treated as a reference 

to furnished during the year after such 

first sufficient information year or a 

subsequent year. 

(4) New service codes. In the case of 

a plan or issuer that does not have 

sufficient information to calculate the 

median of the contracted rates described 

in paragraph (b) of this section and 

determine the qualifying payment 

amount under paragraphs (c)(1) through 

(3) of this section because the item or 

service furnished is billed under a new 

service code— 

(i) For an item or service furnished 

during 2022 (or, in the case of a newly 

covered item or service, during the first 

coverage year for the item or service 

with respect to the plan or coverage), 

the plan or issuer must identify a 

reasonably related service code that 

existed in the immediately preceding 

year and— 

(A) If the Centers for Medicare & 

Medicaid Services has established a 

Medicare payment rate for the item or 

service billed under the new service 

code, the plan or issuer must calculate 

the qualifying payment amount by first 

calculating the ratio of the rate that 

Medicare pays for the item or service 

billed under the new service code 

compared to the rate that Medicare pays 

for the item or service billed under the 

related service code, and then 

multiplying the ratio by the qualifying 

payment amount for an item or service 

billed under the related service code for 


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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 36967 

the year in which the item or service is 

furnished. 

(B) If the Centers for Medicare & 

Medicaid Services has not established a 

Medicare payment rate for the item or 

service billed under the new service 

code, the plan or issuer must calculate 

the qualifying payment amount by first 

calculating the ratio of the rate that the 

plan or issuer reimburses for the item or 

service billed under the new service 

code compared to the rate that the plan 

or issuer reimburses for the item or 

service billed under the related service 

code, and then multiplying the ratio by 

the qualifying payment amount for an 

item or service billed under the related 

service code. 

(ii) For an item or service furnished in 

a subsequent year (before the first 

sufficient information year for such item 

or service with respect to such plan or 

coverage or before the first year for 

which an eligible database has sufficient 

information to a calculate a rate under 

paragraph (c)(3)(i) of this section in the 

immediately preceding year), the plan 

or issuer must calculate the qualifying 

payment amount by increasing the 

qualifying payment amount determined 

under paragraph (c)(4)(i) of this section 

or this paragraph (c)(4)(ii), as applicable, 

for such item or service for the year 

immediately preceding such subsequent 

year, by the percentage increase in CPI– 

U over such preceding year; 

(iii) For an item or service furnished 

in the first sufficient information year 

for such item or service with respect to 

such plan or coverage or the first year 

for which an eligible database has 

sufficient information to calculate a rate 

under paragraph (c)(3)(i) of this section 

in the immediately preceding year, the 

plan or issuer must calculate the 

qualifying payment amount in 

accordance with paragraph (c)(3) of this 

section. 

(d) Information to be shared about 

qualifying payment amount. In cases in 

which the recognized amount with 

respect to an item or service furnished 

by a nonparticipating provider, 

nonparticipating emergency facility, or 

nonparticipating provider of air 

ambulance services is the qualifying 

payment amount, the plan or issuer 

must provide in writing, in paper or 

electronic form, to the provider or 

facility, as applicable— 

(1) With each initial payment or 

notice of denial of payment under 

§ 2590.716–4, § 2590.716–5, or 

§ 2590.717–1 of this part: 

(i) The qualifying payment amount for 

each item or service involved; 

(ii) A statement to certify that, based 

on the determination of the plan or 

issuer— 

(A) The qualifying payment amount 

applies for purposes of the recognized 

amount (or, in the case of air ambulance 

services, for calculating the participant’s 

or beneficiary’s cost sharing); and 

(B) Each qualifying payment amount 

shared with the provider or facility was 

determined in compliance with this 

section; 

(iii) A statement that if the provider 

or facility, as applicable, wishes to 

initiate a 30-day open negotiation 

period for purposes of determining the 

amount of total payment, the provider 

or facility may contact the appropriate 

person or office to initiate open 

negotiation, and that if the 30-day 

negotiation period does not result in a 

determination, generally, the provider 

or facility may initiate the independent 

dispute resolution process within 4 days 

after the end of the open negotiation 

period; and 

(iv) Contact information, including a 

telephone number and email address, 

for the appropriate person or office to 

initiate open negotiations for purposes 

of determining an amount of payment 

(including cost sharing) for such item or 

service. 

(2) In a timely manner upon request 

of the provider or facility: 

(i) Information about whether the 

qualifying payment amount for items 

and services involved included 

contracted rates that were not on a feefor-service basis for those specific items 

and services and whether the qualifying 

payment amount for those items and 

services was determined using 

underlying fee schedule rates or a 

derived amount; 

(ii) If a plan or issuer uses an eligible 

database under paragraph (c)(3) of this 

section to determine the qualifying 

payment amount, information to 

identify which database was used; and 

(iii) If a related service code was used 

to determine the qualifying payment 

amount for an item or service billed 

under a new service code under 

paragraph (c)(4)(i) or (ii) of this section, 

information to identify the related 

service code; 

(iv) If applicable, a statement that the 

plan’s or issuer’s contracted rates 

include risk-sharing, bonus, penalty, or 

other incentive-based or retrospective 

payments or payment adjustments for 

the items and services involved (as 

applicable) that were excluded for 

purposes of calculating the qualifying 

payment amount. 

(e) Certain access fees to databases. In 

the case of a plan or issuer that, 

pursuant to this section, uses an eligible 

database to determine the qualifying 

payment amount for an item or service, 

the plan or issuer is responsible for any 

costs associated with accessing such 

database. 

(f) Applicability date. The provisions 

of this section are applicable with 

respect to plan years beginning on or 

after January 1, 2022. 

§ 2590.716–7 Complaints process for 

surprise medical bills regarding group 

health plans and group health insurance 

coverage. 

(a) Scope and definitions—(1) Scope. 

This section establishes a process to 

receive and resolve complaints 

regarding information that a specific 

group health plan or health insurance 

issuer offering group health insurance 

coverage may be failing to meet the 

requirements under subpart D of this 

part, which may warrant an 

investigation. 

(2) Definitions. In this section— 

(i) Complaint means a 

communication, written or oral, that 

indicates there has been a potential 

violation of the requirements under 

subpart D of this part, whether or not a 

violation actually occurred. 

(ii) Complainant means any 

individual, or their authorized 

representative, who files a complaint as 

defined in paragraph (a)(2)(i) of this 

section. 

(b) Complaints process. (1) DOL will 

consider the date a complaint is filed to 

be the date upon which DOL receives an 

oral or written statement that identifies 

information about the complaint 

sufficient to identify the parties 

involved and the action or inaction 

complained of. 

(2) DOL will notify complainants, by 

oral or written means, of receipt of the 

complaint no later than 60 business 

days after the complaint is received. 

DOL will include a response 

acknowledging receipt of the complaint, 

notifying the complainant of their rights 

and obligations under the complaints 

process, and describing the next steps of 

the complaint resolution process. As 

part of the response, DOL may request 

additional information needed to 

process the complaint. Such additional 

information may include: 

(i) Explanations of benefits; 

(ii) Processed claims; 

(iii) Information about the health care 

provider, facility, or provider of air 

ambulance services involved; 

(iv) Information about the group 

health plan or health insurance issuer 

covering the individual; 

(v) Information to support a 

determination regarding whether the 

service was an emergency service or 

non-emergency service; 

(vi) The summary plan description, 

policy, certificate, contract of insurance, 


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membership booklet, outline of 

coverage, or other evidence of coverage 

the plan or issuer provides to 

participants or beneficiaries; 

(vii) Documents regarding the facts in 

the complaint in the possession of, or 

otherwise attainable by, the 

complainant; or 

(viii) Any other information DOL may 

need to make a determination of facts 

for an investigation. 

(3) DOL will make reasonable efforts 

consistent with agency practices to 

notify the complainant of the outcome 

of the complaint after the submission is 

processed through appropriate methods 

as determined by DOL. A complaint is 

considered processed after DOL has 

reviewed the complaint and 

accompanying information and made an 

outcome determination. Based on the 

nature of the complaint and the plan or 

issuer involved, DOL may— 

(i) Refer the complainant to another 

appropriate Federal or State resolution 

process; 

(ii) Notify the complainant and make 

reasonable efforts to refer the 

complainant to the appropriate State or 

Federal regulatory authority if DOL 

receives a complaint where another 

entity has enforcement jurisdiction over 

the plan or issuer; 

(iii) Refer the plan or issuer for an 

investigation for enforcement action; or 

(iv) Provide the complainant with an 

explanation of the resolution of the 

complaint and any corrective action 

taken. 

§ 2590.717–1 Preventing surprise medical 

bills for air ambulance services. 

(a) In general. If a group health plan 

or a health insurance issuer offering 

group health insurance coverage 

provides or covers any benefits for air 

ambulance services, the plan or issuer 

must cover such services from a 

nonparticipating provider of air 

ambulance services in accordance with 

paragraph (b) of this section. 

(b) Coverage requirements. A plan or 

issuer described in paragraph (a) of this 

section must provide coverage of air 

ambulance services in the following 

manner— 

(1) The cost-sharing requirements 

with respect to the services must be the 

same requirements that would apply if 

the services were provided by a 

participating provider of air ambulance 

services. 

(2) The cost-sharing requirement must 

be calculated as if the total amount that 

would have been charged for the 

services by a participating provider of 

air ambulance services were equal to the 

lesser of the qualifying payment amount 

(as determined in accordance with 

§ 2590.716–6) or the billed amount for 

the services. 

(3) The cost-sharing amounts must be 

counted towards any in-network 

deductible and in-network out-of-pocket 

maximums (including the annual 

limitation on cost sharing under section 

2707(b) of the PHS Act) (as applicable) 

applied under the plan or coverage (and 

the in-network deductible and out-ofpocket maximums must be applied) in 

the same manner as if the cost-sharing 

payments were made with respect to 

services furnished by a participating 

provider of air ambulance services. 

(4) The plan or issuer must— 

(i) Not later than 30 calendar days 

after the bill for the services is 

transmitted by the provider of air 

ambulance services, determine whether 

the services are covered under the plan 

or coverage and, if the services are 

covered, send to the provider an initial 

payment or a notice of denial of 

payment. For purposes of this paragraph 

(b)(4)(i), the 30-calendar-day period 

begins on the date the plan or issuer 

receives the information necessary to 

decide a claim for payment for the 

services. 

(ii) Pay a total plan or coverage 

payment directly to the nonparticipating 

provider furnishing such air ambulance 

services that is equal to the amount by 

which the out-of-network rate for the 

services exceeds the cost-sharing 

amount for the services (as determined 

in accordance with paragraphs (b)(1) 

and (2) of this section), less any initial 

payment amount made under paragraph 

(b)(4)(i) of this section. The total plan or 

coverage payment must be made in 

accordance with the timing requirement 

described in section 717(b)(6) of ERISA, 

or in cases where the out-of-network 

rate is determined under a specified 

State law or All-Payer Model 

Agreement, such other timeframe as 

specified by the State law or All-Payer 

Model Agreement. 

(c) Applicability date. The provisions 

of this section are applicable with 

respect to plan years beginning on or 

after January 1, 2022. 

§ 2590.722 Choice of health care 

professional. 

(a) Choice of health care 

professional—(1) Designation of 

primary care provider—(i) In general. If 

a group health plan, or a health 

insurance issuer offering group health 

insurance coverage, requires or provides 

for designation by a participant or 

beneficiary of a participating primary 

care provider, then the plan or issuer 

must permit each participant or 

beneficiary to designate any 

participating primary care provider who 

is available to accept the participant or 

beneficiary. In such a case, the plan or 

issuer must comply with the rules of 

paragraph (a)(4) of this section by 

informing each participant of the terms 

of the plan or health insurance coverage 

regarding designation of a primary care 

provider. 

(ii) Construction. Nothing in 

paragraph (a)(1)(i) of this section is to be 

construed to prohibit the application of 

reasonable and appropriate geographic 

limitations with respect to the selection 

of primary care providers, in accordance 

with the terms of the plan or coverage, 

the underlying provider contracts, and 

applicable State law. 

(iii) Example. The rules of this 

paragraph (a)(1) are illustrated by the 

following example: 

(A) Facts. A group health plan 

requires individuals covered under the 

plan to designate a primary care 

provider. The plan permits each 

individual to designate any primary care 

provider participating in the plan’s 

network who is available to accept the 

individual as the individual’s primary 

care provider. If an individual has not 

designated a primary care provider, the 

plan designates one until the individual 

has made a designation. The plan 

provides a notice that satisfies the 

requirements of paragraph (a)(4) of this 

section regarding the ability to designate 

a primary care provider. 

(B) Conclusion. In this Example, the 

plan has satisfied the requirements of 

paragraph (a) of this section. 

(2) Designation of pediatrician as 

primary care provider—(i) In general. If 

a group health plan, or a health 

insurance issuer offering group health 

insurance coverage, requires or provides 

for the designation of a participating 

primary care provider for a child by a 

participant or beneficiary, the plan or 

issuer must permit the participant or 

beneficiary to designate a physician 

(allopathic or osteopathic) who 

specializes in pediatrics (including 

pediatric subspecialties, based on the 

scope of that provider’s license under 

applicable State law) as the child’s 

primary care provider if the provider 

participates in the network of the plan 

or issuer and is available to accept the 

child. In such a case, the plan or issuer 

must comply with the rules of 

paragraph (a)(4) of this section by 

informing each participant (in the 

individual market, primary subscriber) 

of the terms of the plan or health 

insurance coverage regarding 

designation of a pediatrician as the 

child’s primary care provider. 

(ii) Construction. Nothing in 

paragraph (a)(2)(i) of this section is to be 

construed to waive any exclusions of 


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coverage under the terms and 

conditions of the plan or health 

insurance coverage with respect to 

coverage of pediatric care. 

(iii) Examples. The rules of this 

paragraph (a)(2) are illustrated by the 

following examples: 

(A) Example 1—(1) Facts. A group 

health plan’s HMO designates for each 

participant a physician who specializes 

in internal medicine to serve as the 

primary care provider for the participant 

and any beneficiaries. Participant A 

requests that Pediatrician B be 

designated as the primary care provider 

for A’s child. B is a participating 

provider in the HMO’s network and is 

available to accept the child. 

(2) Conclusion. In this Example 1, the 

HMO must permit A’s designation of B 

as the primary care provider for A’s 

child in order to comply with the 

requirements of this paragraph (a)(2). 

(B) Example 2—(1) Facts. Same facts 

as Example 1 (paragraph (a)(2)(iii)(A) of 

this section), except that A takes A’s 

child to B for treatment of the child’s 

severe shellfish allergies. B wishes to 

refer A’s child to an allergist for 

treatment. The HMO, however, does not 

provide coverage for treatment of food 

allergies, nor does it have an allergist 

participating in its network, and it 

therefore refuses to authorize the 

referral. 

(2) Conclusion. In this Example 2, the 

HMO has not violated the requirements 

of this paragraph (a)(2) because the 

exclusion of treatment for food allergies 

is in accordance with the terms of A’s 

coverage. 

(3) Patient access to obstetrical and 

gynecological care—(i) General rights— 

(A) Direct access. A group health plan, 

or a health insurance issuer offering 

group health insurance coverage, 

described in paragraph (a)(3)(ii) of this 

section, may not require authorization 

or referral by the plan, issuer, or any 

person (including a primary care 

provider) in the case of a female 

participant or beneficiary who seeks 

coverage for obstetrical or gynecological 

care provided by a participating health 

care professional who specializes in 

obstetrics or gynecology. In such a case, 

the plan or issuer must comply with the 

rules of paragraph (a)(4) of this section 

by informing each participant that the 

plan may not require authorization or 

referral for obstetrical or gynecological 

care by a participating health care 

professional who specializes in 

obstetrics or gynecology. The plan or 

issuer may require such a professional 

to agree to otherwise adhere to the 

plan’s or issuer’s policies and 

procedures, including procedures 

regarding referrals and obtaining prior 

authorization and providing services 

pursuant to a treatment plan (if any) 

approved by the plan or issuer. For 

purposes of this paragraph (a)(3), a 

health care professional who specializes 

in obstetrics or gynecology is any 

individual (including a person other 

than a physician) who is authorized 

under applicable State law to provide 

obstetrical or gynecological care. 

(B) Obstetrical and gynecological 

care. A group health plan or health 

insurance issuer described in paragraph 

(a)(3)(ii) of this section must treat the 

provision of obstetrical and 

gynecological care, and the ordering of 

related obstetrical and gynecological 

items and services, pursuant to the 

direct access described under paragraph 

(a)(3)(i)(A) of this section, by a 

participating health care professional 

who specializes in obstetrics or 

gynecology as the authorization of the 

primary care provider. 

(ii) Application of paragraph. A group 

health plan, or a health insurance issuer 

offering group health insurance 

coverage, is described in this paragraph 

(a)(3) if the plan or issuer— 

(A) Provides coverage for obstetrical 

or gynecological care; and 

(B) Requires the designation by a 

participant or beneficiary of a 

participating primary care provider. 

(iii) Construction. Nothing in 

paragraph (a)(3)(i) of this section is to be 

construed to— 

(A) Waive any exclusions of coverage 

under the terms and conditions of the 

plan or health insurance coverage with 

respect to coverage of obstetrical or 

gynecological care; or 

(B) Preclude the group health plan or 

health insurance issuer involved from 

requiring that the obstetrical or 

gynecological provider notify the 

primary care health care professional or 

the plan or issuer of treatment 

decisions. 

(iv) Examples. The rules of this 

paragraph (a)(3) are illustrated by the 

following examples: 

(A) Example 1—(1) Facts. A group 

health plan requires each participant to 

designate a physician to serve as the 

primary care provider for the participant 

and the participant’s family. Participant 

A, a female, requests a gynecological 

exam with Physician B, an in-network 

physician specializing in gynecological 

care. The group health plan requires 

prior authorization from A’s designated 

primary care provider for the 

gynecological exam. 

(2) Conclusion. In this Example 1, the 

group health plan has violated the 

requirements of this paragraph (a)(3) 

because the plan requires prior 

authorization from A’s primary care 

provider prior to obtaining 

gynecological services. 

(B) Example 2—(1) Facts. Same facts 

as Example 1 (paragraph (a)(3)(iv)(A) of 

this section) except that A seeks 

gynecological services from C, an out-ofnetwork provider. 

(2) Conclusion. In this Example 2, the 

group health plan has not violated the 

requirements of this paragraph (a)(3) by 

requiring prior authorization because C 

is not a participating health care 

provider. 

(C) Example 3—(1) Facts. Same facts 

as Example 1 (paragraph (a)(3)(iv)(A) of 

this section) except that the group 

health plan only requires B to inform 

A’s designated primary care physician 

of treatment decisions. 

(2) Conclusion. In this Example 3, the 

group health plan has not violated the 

requirements of this paragraph (a)(3) 

because A has direct access to B without 

prior authorization. The fact that the 

group health plan requires the 

designated primary care physician to be 

notified of treatment decisions does not 

violate this paragraph (a)(3). 

(D) Example 4—(1) Facts. A group 

health plan requires each participant to 

designate a physician to serve as the 

primary care provider for the participant 

and the participant’s family. The group 

health plan requires prior authorization 

before providing benefits for uterine 

fibroid embolization. 

(2) Conclusion. In this Example 4, the 

plan requirement for prior authorization 

before providing benefits for uterine 

fibroid embolization does not violate the 

requirements of this paragraph (a)(3) 

because, though the prior authorization 

requirement applies to obstetrical 

services, it does not restrict access to 

any providers specializing in obstetrics 

or gynecology. 

(4) Notice of right to designate a 

primary care provider—(i) In general. If 

a group health plan or health insurance 

issuer requires the designation by a 

participant or beneficiary of a primary 

care provider, the plan or issuer must 

provide a notice informing each 

participant (in the individual market, 

primary subscriber) of the terms of the 

plan or health insurance coverage 

regarding designation of a primary care 

provider and of the rights— 

(A) Under paragraph (a)(1)(i) of this 

section, that any participating primary 

care provider who is available to accept 

the participant or beneficiary can be 

designated; 

(B) Under paragraph (a)(2)(i) of this 

section, with respect to a child, that any 

participating physician who specializes 

in pediatrics can be designated as the 

primary care provider; and 


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36970 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

(C) Under paragraph (a)(3)(i) of this 

section, that the plan may not require 

authorization or referral for obstetrical 

or gynecological care by a participating 

health care professional who specializes 

in obstetrics or gynecology. 

(ii) Timing. In the case of a group 

health plan or group health insurance 

coverage, the notice described in 

paragraph (a)(4)(i) of this section must 

be included whenever the plan or issuer 

provides a participant with a summary 

plan description or other similar 

description of benefits under the plan or 

health insurance coverage. In the case of 

individual health insurance coverage, 

the notice described in paragraph 

(a)(4)(i) of this section must be included 

whenever the issuer provides a primary 

subscriber with a policy, certificate, or 

contract of health insurance. 

(iii) Model language. The following 

model language can be used to satisfy 

the notice requirement described in 

paragraph (a)(4)(i) of this section: 

(A) For plans and issuers that require 

or allow for the designation of primary 

care providers by participants, or 

beneficiaries, insert: 

[Name of group health plan or health 

insurance issuer] generally [requires/allows] 

the designation of a primary care provider. 

You have the right to designate any primary 

care provider who participates in our 

network and who is available to accept you 

or your family members. [If the plan or health 

insurance coverage designates a primary care 

provider automatically, insert: Until you 

make this designation, [name of group health 

plan or health insurance issuer] designates 

one for you.] For information on how to 

select a primary care provider, and for a list 

of the participating primary care providers, 

contact the [plan administrator or issuer] at 

[insert contact information]. 

(B) For plans and issuers that require 

or allow for the designation of a primary 

care provider for a child, add: 

For children, you may designate a 

pediatrician as the primary care 

provider. 

(C) For plans and issuers that provide 

coverage for obstetric or gynecological 

care and require the designation by a 

participant or beneficiary of a primary 

care provider, add: 

You do not need prior authorization from 

[name of group health plan or issuer] or from 

any other person (including a primary care 

provider) in order to obtain access to 

obstetrical or gynecological care from a 

health care professional in our network who 

specializes in obstetrics or gynecology. The 

health care professional, however, may be 

required to comply with certain procedures, 

including obtaining prior authorization for 

certain services, following a pre-approved 

treatment plan, or procedures for making 

referrals. For a list of participating health 

care professionals who specialize in 

obstetrics or gynecology, contact the [plan 

administrator or issuer] at [insert contact 

information]. 

(b) Applicability date. The provisions 

of this section are applicable with 

respect to plan years beginning on or 

after January 1, 2022. 

Department of Health and Human 

Services 

45 CFR Subtitle A, Subchapter B 

For the reasons stated in the 

preamble, the Department of Health and 

Human Services amends 45 CFR parts 

144, 147, 149, and 156 as set forth 

below: 

PART 144—REQUIREMENTS 

RELATING TO HEALTH INSURANCE 

COVERAGE 

■ 12. The authority citation for part 144 

is revised to read as follows: 

Authority: 42 U.S.C. 300gg through 300gg– 

63, 300gg–91, 300gg–92, and 300gg–111 

through 300gg–139, as amended. 

■ 13. Section 144.101 is amended by: 

■ a. Redesignating paragraphs (d) and 

(e) as paragraphs (e) and (f), 

respectively; and 

■ b. Adding new paragraph (d). 

The addition reads as follows: 

§ 144.101 Basis and purpose. 

* * * * * 

(d) Part 149 of this subchapter 

implements the provisions of parts D 

and E of title XXVII of the PHS Act that 

apply to group health plans, health 

insurance issuers in the group and 

individual markets, health care 

providers and facilities, and providers 

of air ambulance services. 

* * * * * 

■ 14. Section 144.102 is revised to read 

as follows: 

§ 144.102 Scope and applicability. 

(a) For purposes of 45 CFR parts 144 

through 149, all health insurance 

coverage is generally divided into two 

markets—the group market and the 

individual market. The group market is 

further divided into the large group 

market and the small group market. 

(b) The protections afforded under 45 

CFR parts 144 through 149 to 

individuals and employers (and other 

sponsors of health insurance offered in 

connection with a group health plan) 

are determined by whether the coverage 

involved is obtained in the small group 

market, the large group market, or the 

individual market. 

(c) Coverage that is provided to 

associations, but not related to 

employment, and sold to individuals is 

not considered group coverage under 45 

CFR parts 144 through 149. If the 

coverage is offered to an association 

member other than in connection with 

a group health plan, the coverage is 

considered individual health insurance 

coverage for purposes of 45 CFR parts 

144 through 149. The coverage is 

considered coverage in the individual 

market, regardless of whether it is 

considered group coverage under state 

law. If the health insurance coverage is 

offered in connection with a group 

health plan as defined at 45 CFR 

144.103, it is considered group health 

insurance coverage for purposes of 45 

CFR parts 144 through 149. 

(d) Provisions relating to CMS 

enforcement of parts 146, 147, 148, and 

149 are contained in part 150 of this 

subchapter. 

■ 15. Section 144.103 is amended by 

revising the introductory text to read as 

follows: 

§ 144.103 Definitions. 

For purposes of parts 146 (group 

market), 147 (group and individual 

market), 148 (individual market), 149 

(surprise billing and transparency), and 

150 (enforcement) of this subchapter, 

the following definitions apply unless 

otherwise provided: 

* * * * * 

PART 147—HEALTH INSURANCE 

REFORM REQUIREMENTS FOR THE 

GROUP AND INDIVIDUAL HEALTH 

INSURANCE MARKETS 

■ 16. The authority citation for part 147 

is revised to read as follows: 

Authority: 42 U.S.C. 300gg through 300gg– 

63, 300gg–91, 300gg–92, and 300gg–111 

through 300gg–139, as amended, and section 

3203, Pub. L. 116–136, 134 Stat. 281. 

■ 17. Section 147.138 is amended by 

revising paragraph (c) to read as follows: 

§ 147.138 Patient protections. 

* * * * * 

(c) Applicability date. The provisions 

of this section are applicable to group 

health plans and health insurance 

issuers for plan years (in the individual 

market, policy years) beginning before 

January 1, 2022. See also subparts B and 

D of part 149 of this subchapter for rules 

applicable with respect to plan years (in 

the individual market, policy years) 

beginning on or after January 1, 2022. 

■ 18. Add part 149 to read as follows: 

PART 149—SURPRISE BILLING AND 

TRANSPARENCY REQUIREMENTS 

Subpart A—General Provisions 

Sec. 

149.10 Basis and scope. 

149.20 Applicability. 


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149.30 Definitions. 

Subpart B—Protections against Balance 

Billing for the Group and Individual Health 

Insurance Markets 

149.110 Preventing surprise medical bills 

for emergency services. 

149.120 Preventing surprise medical bills 

for non-emergency services performed by 

nonparticipating providers at certain 

participating facilities. 

149.130 Preventing surprise medical bills 

for air ambulance services. 

149.140 Methodology for calculating 

qualifying payment amount. 

149.150 Complaints process for surprise 

medical bills regarding group health 

plans and group and individual health 

insurance coverage. 

Subpart C—[Reserved] 

Subpart D—Additional Patient Protections 

149.310 Choice of health care professional. 

Subpart E—Health Care Provider, Health 

Care Facility, and Air Ambulance Service 

Provider Requirements 

149.410 Balance billing in cases of 

emergency services. 

149.420 Balance billing in cases of nonemergency services performed by 

nonparticipating providers at certain 

participating health care facilities. 

149.430 Provider and facility disclosure 

requirements regarding patient 

protections against balance billing. 

149.440 Balance billing in cases of air 

ambulance services. 

149.450 Complaints process for balance 

billing regarding providers and facilities. 

Authority: 42 U.S.C. 300gg–111 through 

300gg–139, as amended. 

Subpart A—General Provisions 

§ 149.10 Basis and scope. 

(a) Basis. This part implements parts 

D and E of title XXVII of the PHS Act. 

(b) Scope. This part establishes 

standards for group health plans, health 

insurance issuers offering group or 

individual health insurance coverage, 

health care providers and facilities, and 

providers of air ambulance services with 

respect to surprise medical bills, 

transparency in health care coverage, 

and additional patient protections. 

§ 149.20 Applicability. 

(a) In general. (1) The requirements in 

subparts B and D of this part apply to 

group health plans and health insurance 

issuers offering group or individual 

health insurance coverage (including 

grandfathered health plans as defined in 

§ 147.140 of this subchapter), except as 

specified in paragraph (b) of this 

section. 

(2) The requirements in subpart E of 

this part apply to health care providers, 

health care facilities, and providers of 

air ambulance services. 

(b) Exceptions. The requirements in 

subparts B and D of this part do not 

apply to the following: 

(1) Excepted benefits as described in 

§§ 146.145 and 148.220 of this 

subchapter. 

(2) Short-term, limited-duration 

insurance as defined in § 144.103 of this 

subchapter. 

(3) Health reimbursement 

arrangements or other account-based 

group health plans as described in 

§ 147.126(d) of this subchapter. 

§ 149.30 Definitions. 

The definitions in part 144 of this 

subchapter apply to this part, unless 

otherwise specified. In addition, for 

purposes of this part, the following 

definitions apply: 

Air ambulance service means medical 

transport by a rotary wing air 

ambulance, as defined in 42 CFR 

414.605, or fixed wing air ambulance, as 

defined in 42 CFR 414.605, for patients. 

Cost sharing means the amount a 

participant, beneficiary, or enrollee is 

responsible for paying for a covered 

item or service under the terms of the 

group health plan or health insurance 

coverage. Cost sharing generally 

includes copayments, coinsurance, and 

amounts paid towards deductibles, but 

does not include amounts paid towards 

premiums, balance billing by out-ofnetwork providers, or the cost of items 

or services that are not covered under a 

group health plan or health insurance 

coverage. 

Emergency department of a hospital 

includes a hospital outpatient 

department that provides emergency 

services. 

Emergency medical condition has the 

meaning given the term in 

§ 149.110(c)(1). 

Emergency services has the meaning 

given the term in § 149.110(c)(2). 

Health care facility, with respect to a 

group health plan or group or individual 

health insurance coverage, in the 

context of non-emergency services, is 

each of the following: 

(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); and 

(4) An ambulatory surgical center 

described in section 1833(i)(1)(A) of the 

Social Security Act. 

Independent freestanding emergency 

department means a health care facility 

(not limited to those described in the 

definition of health care facility with 

respect to non-emergency services) 

that— 

(1) Is geographically separate and 

distinct and licensed separately from a 

hospital under applicable State law; and 

(2) Provides any emergency services 

as described in § 149.110(c)(2)(i). 

Nonparticipating emergency facility 

means an emergency department of a 

hospital, or an independent freestanding 

emergency department (or a hospital, 

with respect to services that pursuant to 

§ 149.110(c)(2)(ii) are included as 

emergency services), that does not have 

a contractual relationship directly or 

indirectly with a group health plan or 

group or individual health insurance 

coverage offered by a health insurance 

issuer, with respect to the furnishing of 

an item or service under the plan or 

coverage, respectively. 

Nonparticipating provider means any 

physician or other health care provider 

who does not have a contractual 

relationship directly or indirectly with a 

group health plan or group or individual 

health insurance coverage offered by a 

health insurance issuer, with respect to 

the furnishing of an item or service 

under the plan or coverage, respectively. 

Notice of denial of payment means, 

with respect to an item or service for 

which benefits subject to the protections 

of §§ 149.110 through 149.130 are 

provided or covered, a written notice 

from the plan or issuer to the health care 

provider, facility, or provider of air 

ambulance services, as applicable, that 

payment for such item or service will 

not be made by the plan or coverage and 

which explains the reason for denial. 

The term notice of denial of payment 

does not include a notice of benefit 

denial due to an adverse benefit 

determination as defined in 29 CFR 

2560.503–1. 

Out-of-network rate means, with 

respect to an item or service furnished 

by a nonparticipating provider, 

nonparticipating emergency facility, or 

nonparticipating provider of air 

ambulance services— 

(1) Subject to paragraph (3) of this 

definition, in a State that has in effect 

a specified State law, the amount 

determined in accordance with such 

law; 

(2) Subject to paragraph (3) of this 

definition, in a State that does not have 

in effect a specified State law— 

(i) Subject to paragraph (2)(ii) of this 

definition, if the nonparticipating 

provider or nonparticipating emergency 

facility and the plan or issuer agree on 

an amount of payment (including if the 

amount agreed upon is the initial 

payment sent by the plan or issuer 

under 26 CFR 54.9816–4T(b)(3)(iv)(A), 

54.9816–5T(c)(3), or 54.9817–1T(b)(4)(i); 

29 CFR 2590.716–4(b)(3)(iv)(A), 

2590.716–5(c)(3), or 2590.717–1(b)(4)(i); 


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or § 149.110(b)(3)(iv)(A), § 149.120(c)(3), 

or § 149.130(b)(4)(i), as applicable, or is 

agreed on through negotiations with 

respect to such item or service), such 

agreed on amount; or 

(ii) If the nonparticipating provider or 

nonparticipating emergency facility and 

the plan or issuer enter into the 

independent dispute resolution (IDR) 

process under section 9816(c) or 9817(b) 

of the Internal Revenue Code, section 

716(c) or 717(b) of ERISA, or section 

2799A–1(c) or 2799A–2(b) of the PHS 

Act, as applicable, and do not agree 

before the date on which a certified IDR 

entity makes a determination with 

respect to such item or service under 

such subsection, the amount of such 

determination; or 

(3) In a State that has an All-Payer 

Model Agreement under section 1115A 

of the Social Security Act that applies 

with respect to the plan or issuer; the 

nonparticipating provider or 

nonparticipating emergency facility; and 

the item or service, the amount that the 

State approves under the All-Payer 

Model Agreement for the item or 

service. 

Participating emergency facility 

means any emergency department of a 

hospital, or an independent freestanding 

emergency department (or a hospital, 

with respect to services that pursuant to 

§ 149.110(c)(2)(ii) are included as 

emergency services), that has a 

contractual relationship directly or 

indirectly with a group health plan or 

health insurance issuer offering group or 

individual health insurance coverage 

setting forth the terms and conditions 

on which a relevant item or service is 

provided to a participant, beneficiary, or 

enrollee under the plan or coverage, 

respectively. A single case agreement 

between an emergency facility and a 

plan or issuer that is used to address 

unique situations in which a 

participant, beneficiary, or enrollee 

requires services that typically occur 

out-of-network constitutes a contractual 

relationship for purposes of this 

definition, and is limited to the parties 

to the agreement. 

Participating health care facility 

means any health care facility described 

in this section that has a contractual 

relationship directly or indirectly with a 

group health plan or health insurance 

issuer offering group or individual 

health insurance coverage setting forth 

the terms and conditions on which a 

relevant item or service is provided to 

a participant, beneficiary, or enrollee 

under the plan or coverage, respectively. 

A single case agreement between a 

health care facility and a plan or issuer 

that is used to address unique situations 

in which a participant, beneficiary, or 

enrollee requires services that typically 

occur out-of-network constitutes a 

contractual relationship for purposes of 

this definition, and is limited to the 

parties to the agreement. 

Participating provider means any 

physician or other health care provider 

who has a contractual relationship 

directly or indirectly with a group 

health plan or health insurance issuer 

offering group or individual health 

insurance coverage setting forth the 

terms and conditions on which a 

relevant item or service is provided to 

a participant, beneficiary, or enrollee 

under the plan or coverage, respectively. 

Physician or health care provider 

means a physician or other health care 

provider who is acting within the scope 

of practice of that provider’s license or 

certification under applicable State law, 

but does not include a provider of air 

ambulance services. 

Provider of air ambulance services 

means an entity that is licensed under 

applicable State and Federal law to 

provide air ambulance services. 

Same or similar item or service has 

the meaning given the term in 

§ 149.140(a)(13). 

Service code has the meaning given 

the term in § 149.140(a)(14). 

Qualifying payment amount has the 

meaning given the term in 

§ 149.140(a)(16). 

Recognized amount means, with 

respect to an item or service furnished 

by a nonparticipating provider or 

nonparticipating emergency facility— 

(1) Subject to paragraph (3) of this 

definition, in a State that has in effect 

a specified State law, the amount 

determined in accordance with such 

law. 

(2) Subject to paragraph (3) of this 

definition, in a State that does not have 

in effect a specified State law, the lesser 

of— 

(i) The amount that is the qualifying 

payment amount (as determined in 

accordance with § 149.140); or 

(ii) The amount billed by the provider 

or facility. 

(3) In a State that has an All-Payer 

Model Agreement under section 1115A 

of the Social Security Act that applies 

with respect to the plan or issuer; the 

nonparticipating provider or 

nonparticipating emergency facility; and 

the item or service, the amount that the 

State approves under the All-Payer 

Model Agreement for the item or 

service. 

Specified State law means a State law 

that provides for a method for 

determining the total amount payable 

under a group health plan or group or 

individual health insurance coverage 

offered by a health insurance issuer to 

the extent such State law applies for an 

item or service furnished by a 

nonparticipating provider or 

nonparticipating emergency facility 

(including where it applies because the 

State has allowed a plan that is not 

otherwise subject to applicable State 

law an opportunity to opt in, subject to 

section 514 of the Employee Retirement 

Income Security Act of 1974). A group 

health plan that opts in to such a 

specified State law must do so for all 

items and services to which the 

specified State law applies and in a 

manner determined by the applicable 

State authority, and must prominently 

display in its plan materials describing 

the coverage of out-of-network services 

a statement that the plan has opted into 

the specified State law, identify the 

relevant State (or States), and include a 

general description of the items and 

services provided by nonparticipating 

facilities and providers that are covered 

by the specified State law. 

State means each of the 50 States, the 

District of Columbia, Puerto Rico, the 

Virgin Islands, Guam, American Samoa, 

and the Northern Mariana Islands. 

Treating provider is a physician or 

health care provider who has evaluated 

the individual. 

Visit, with respect to items and 

services furnished to an individual at a 

health care facility, includes, in 

addition to items and services furnished 

by a provider at the facility, equipment 

and devices, telemedicine services, 

imaging services, laboratory services, 

and preoperative and postoperative 

services, regardless of whether the 

provider furnishing such items or 

services is at the facility. 

Subpart B—Protections Against 

Balance Billing for the Group and 

Individual Health Insurance Markets 

§ 149.110 Preventing surprise medical bills 

for emergency services. 

(a) In general. If a group health plan, 

or a health insurance issuer offering 

group or individual health insurance 

coverage, provides or covers any 

benefits with respect to services in an 

emergency department of a hospital or 

with respect to emergency services in an 

independent freestanding emergency 

department, the plan or issuer must 

cover emergency services, as defined in 

paragraph (c)(2) of this section, and this 

coverage must be provided in 

accordance with paragraph (b) of this 

section. 

(b) Coverage requirements. A plan or 

issuer described in paragraph (a) of this 

section must provide coverage for 

emergency services in the following 

manner— 


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(1) Without the need for any prior 

authorization determination, even if the 

services are provided on an out-ofnetwork basis. 

(2) Without regard to whether the 

health care provider furnishing the 

emergency services is a participating 

provider or a participating emergency 

facility, as applicable, with respect to 

the services. 

(3) If the emergency services are 

provided by a nonparticipating provider 

or a nonparticipating emergency 

facility— 

(i) Without imposing any 

administrative requirement or limitation 

on coverage that is more restrictive than 

the requirements or limitations that 

apply to emergency services received 

from participating providers and 

participating emergency facilities. 

(ii) Without imposing cost-sharing 

requirements that are greater than the 

requirements that would apply if the 

services were provided by a 

participating provider or a participating 

emergency facility. 

(iii) By calculating the cost-sharing 

requirement as if the total amount that 

would have been charged for the 

services by such participating provider 

or participating emergency facility were 

equal to the recognized amount for such 

services. 

(iv) The plan or issuer— 

(A) Not later than 30 calendar days 

after the bill for the services is 

transmitted by the provider or facility 

(or, in cases where the recognized 

amount is determined by a specified 

State law or All-Payer Model 

Agreement, such other timeframe as 

specified by the State law or All-Payer 

Model Agreement), determines whether 

the services are covered under the plan 

or coverage and, if the services are 

covered, sends to the provider or 

facility, as applicable, an initial 

payment or a notice of denial of 

payment. For purposes of this paragraph 

(b)(3)(iv)(A), the 30-calendar-day period 

begins on the date the plan or issuer 

receives the information necessary to 

decide a claim for payment for the 

services. 

(B) Pays a total plan or coverage 

payment directly to the nonparticipating 

provider or nonparticipating facility that 

is equal to the amount by which the outof-network rate for the services exceeds 

the cost-sharing amount for the services 

(as determined in accordance with 

paragraphs (b)(3)(ii) and (iii) of this 

section), less any initial payment 

amount made under paragraph 

(b)(3)(iv)(A) of this section. The total 

plan or coverage payment must be made 

in accordance with the timing 

requirement described in section 

2799A–1(c)(6) of the PHS Act, or in 

cases where the out-of-network rate is 

determined under a specified State law 

or All-Payer Model Agreement, such 

other timeframe as specified by the State 

law or All-Payer Model Agreement. 

(v) By counting any cost-sharing 

payments made by the participant, 

beneficiary, or enrollee with respect to 

the emergency services toward any innetwork deductible or in-network outof-pocket maximums (including the 

annual limitation on cost sharing under 

section 2707(b) of the PHS Act) (as 

applicable) applied under the plan or 

coverage (and the in-network deductible 

and in-network out-of-pocket 

maximums must be applied) in the same 

manner as if the cost-sharing payments 

were made with respect to emergency 

services furnished by a participating 

provider or a participating emergency 

facility. 

(4) Without limiting what constitutes 

an emergency medical condition (as 

defined in paragraph (c)(1) of this 

section) solely on the basis of diagnosis 

codes. 

(5) Without regard to any other term 

or condition of the coverage, other 

than— 

(i) The exclusion or coordination of 

benefits (to the extent not inconsistent 

with benefits for an emergency medical 

condition, as defined in paragraph (c)(1) 

of this section). 

(ii) An affiliation or waiting period 

(each as defined in § 144.103 of this 

subchapter). 

(iii) Applicable cost sharing. 

(c) Definitions. In this section— 

(1) Emergency medical condition 

means a medical condition, including a 

mental health condition or substance 

use disorder, manifesting itself by acute 

symptoms of sufficient severity 

(including severe pain) such that a 

prudent layperson, who possesses an 

average knowledge of health and 

medicine, could reasonably expect the 

absence of immediate medical attention 

to result in a condition described in 

clause (i), (ii), or (iii) of section 

1867(e)(1)(A) of the Social Security Act 

(42 U.S.C. 1395dd(e)(1)(A)). (In that 

provision of the Social Security Act, 

clause (i) refers to placing the health of 

the individual (or, with respect to a 

pregnant woman, the health of the 

woman or her unborn child) in serious 

jeopardy; clause (ii) refers to serious 

impairment to bodily functions; and 

clause (iii) refers to serious dysfunction 

of any bodily organ or part.) 

(2) Emergency services means, with 

respect to an emergency medical 

condition— 

(i) In general. (A) An appropriate 

medical screening examination (as 

required under section 1867 of the 

Social Security Act (42 U.S.C. 1395dd) 

or as would be required under such 

section if such section applied to an 

independent freestanding emergency 

department) that is within the capability 

of the emergency department of a 

hospital or of an independent 

freestanding emergency department, as 

applicable, including ancillary services 

routinely available to the emergency 

department to evaluate such emergency 

medical condition; and 

(B) Within the capabilities of the staff 

and facilities available at the hospital or 

the independent freestanding 

emergency department, as applicable, 

such further medical examination and 

treatment as are required under section 

1867 of the Social Security Act (42 

U.S.C. 1395dd), or as would be required 

under such section if such section 

applied to an independent freestanding 

emergency department, to stabilize the 

patient (regardless of the department of 

the hospital in which such further 

examination or treatment is furnished). 

(ii) Inclusion of additional services. 

(A) Subject to paragraph (c)(2)(ii)(B) of 

this section, items and services— 

(1) For which benefits are provided or 

covered under the plan or coverage; and 

(2) That are furnished by a 

nonparticipating provider or 

nonparticipating emergency facility 

(regardless of the department of the 

hospital in which such items or services 

are furnished) after the participant, 

beneficiary, or enrollee is stabilized and 

as part of outpatient observation or an 

inpatient or outpatient stay with respect 

to the visit in which the services 

described in paragraph (c)(2)(i) of this 

section are furnished. 

(B) Items and services described in 

paragraph (c)(2)(ii)(A) of this section are 

not included as emergency services if all 

of the conditions in § 149.410(b) are 

met. 

(3) To stabilize, with respect to an 

emergency medical condition, has the 

meaning given such term in section 

1867(e)(3) of the Social Security Act (42 

U.S.C. 1395dd(e)(3)). 

(d) Applicability date. The provisions 

of this section are applicable with 

respect to plan years (in the individual 

market, policy years) beginning on or 

after January 1, 2022. 

§ 149.120 Preventing surprise medical bills 

for non-emergency services performed by 

nonparticipating providers at certain 

participating facilities. 

(a) In general. If a group health plan, 

or a health insurance issuer offering 

group or individual health insurance 

coverage, provides or covers any 

benefits with respect to items and 


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services described in paragraph (b) of 

this section, the plan or issuer must 

cover the items and services when 

furnished by a nonparticipating 

provider in accordance with paragraph 

(c) of this section. 

(b) Items and services described. The 

items and services described in this 

paragraph (b) are items and services 

(other than emergency services) 

furnished to a participant, beneficiary, 

or enrollee by a nonparticipating 

provider with respect to a visit at a 

participating health care facility, unless 

the provider has satisfied the notice and 

consent criteria of § 149.420(c) through 

(i) with respect to such items and 

services. 

(c) Coverage requirements. In the case 

of items and services described in 

paragraph (b) of this section, the plan or 

issuer— 

(1) Must not impose a cost-sharing 

requirement for the items and services 

that is greater than the cost-sharing 

requirement that would apply if the 

items or services had been furnished by 

a participating provider. 

(2) Must calculate the cost-sharing 

requirements as if the total amount that 

would have been charged for the items 

and services by such participating 

provider were equal to the recognized 

amount for the items and services. 

(3) Not later than 30 calendar days 

after the bill for the items or services is 

transmitted by the provider (or in cases 

where the recognized amount is 

determined by a specified State law or 

All-Payer Model Agreement, such other 

timeframe as specified under the State 

law or All-Payer Model Agreement), 

must determine whether the items and 

services are covered under the plan or 

coverage and, if the items and services 

are covered, send to the provider an 

initial payment or a notice of denial of 

payment. For purposes of this paragraph 

(c)(3), the 30-calendar-day period begins 

on the date the plan or issuer receives 

the information necessary to decide a 

claim for payment for the items or 

services. 

(4) Must pay a total plan or coverage 

payment directly to the nonparticipating 

provider that is equal to the amount by 

which the out-of-network rate for the 

items and services involved exceeds the 

cost-sharing amount for the items and 

services (as determined in accordance 

with paragraphs (c)(1) and (2) of this 

section), less any initial payment 

amount made under paragraph (c)(3) of 

this section. The total plan or coverage 

payment must be made in accordance 

with the timing requirement described 

in section 2799A–1(c)(6) of the PHS Act, 

or in cases where the out-of-network 

rate is determined under a specified 

State law or All-Payer Model 

Agreement, such other timeframe as 

specified by the State law or All-Payer 

Model Agreement. 

(5) Must count any cost-sharing 

payments made by the participant, 

beneficiary, or enrollee toward any innetwork deductible and in-network outof-pocket maximums (including the 

annual limitation on cost sharing under 

section 2707(b) of the PHS Act) (as 

applicable) applied under the plan or 

coverage (and the in-network deductible 

and out-of-pocket maximums must be 

applied) in the same manner as if such 

cost-sharing payments were made with 

respect to items and services furnished 

by a participating provider. 

(d) Applicability date. The provisions 

of this section are applicable with 

respect to plan years (in the individual 

market, policy years) beginning on or 

after January 1, 2022. 

§ 149.130 Preventing surprise medical bills 

for air ambulance services. 

(a) In general. If a group health plan, 

or a health insurance issuer offering 

group or individual health insurance 

coverage, provides or covers any 

benefits for air ambulance services, the 

plan or issuer must cover such services 

from a nonparticipating provider of air 

ambulance services in accordance with 

paragraph (b) of this section. 

(b) Coverage requirements. A plan or 

issuer described in paragraph (a) of this 

section must provide coverage of air 

ambulance services in the following 

manner— 

(1) The cost-sharing requirements 

with respect to the services must be the 

same requirements that would apply if 

the services were provided by a 

participating provider of air ambulance 

services. 

(2) The cost-sharing requirement must 

be calculated as if the total amount that 

would have been charged for the 

services by a participating provider of 

air ambulance services were equal to the 

lesser of the qualifying payment amount 

(as determined in accordance with 

§ 149.140) or the billed amount for the 

services. 

(3) The cost-sharing amounts must be 

counted towards any in-network 

deductible and in-network out-of-pocket 

maximums (including the annual 

limitation on cost sharing under section 

2707(b) of the PHS Act) (as applicable) 

applied under the plan or coverage (and 

the in-network deductible and out-ofpocket maximums must be applied) in 

the same manner as if the cost-sharing 

payments were made with respect to 

services furnished by a participating 

provider of air ambulance services. 

(4) The plan or issuer must— 

(i) Not later than 30 calendar days 

after the bill for the services is 

transmitted by the provider of air 

ambulance services, determine whether 

the services are covered under the plan 

or coverage and, if the services are 

covered, send to the provider an initial 

payment or a notice of denial of 

payment. For purposes of this paragraph 

(b)(4)(i), the 30-calendar-day period 

begins on the date the plan or issuer 

receives the information necessary to 

decide a claim for payment for the 

services. 

(ii) Pay a total plan or coverage 

payment directly to the nonparticipating 

provider furnishing such air ambulance 

services that is equal to the amount by 

which the out-of-network rate for the 

services exceeds the cost-sharing 

amount for the services (as determined 

in accordance with paragraphs (b)(1) 

and (2) of this section), less any initial 

payment amount made under paragraph 

(b)(4)(i) of this section. The total plan or 

coverage payment must be made in 

accordance with the timing requirement 

described in section 2799A–2(b)(6) of 

the PHS Act, or in cases where the outof-network rate is determined under a 

specified State law or All-Payer Model 

Agreement, such other timeframe as 

specified by the State law or All-Payer 

Model Agreement. 

(c) Applicability date. The provisions 

of this section are applicable with 

respect to plan years (in the individual 

market, policy years) beginning on or 

after January 1, 2022. 

§ 149.140 Methodology for calculating 

qualifying payment amount. 

(a) Definitions. For purposes of this 

section, the following definitions apply: 

(1) Contracted rate means the total 

amount (including cost sharing) that a 

group health plan or health insurance 

issuer has contractually agreed to pay a 

participating provider, facility, or 

provider of air ambulance services for 

covered items and services, whether 

directly or indirectly, including through 

a third-party administrator or pharmacy 

benefit manager. Solely for purposes of 

this definition, a single case agreement, 

letter of agreement, or other similar 

arrangement between a provider, 

facility, or air ambulance provider and 

a plan or issuer, used to supplement the 

network of the plan or coverage for a 

specific participant, beneficiary, or 

enrollee in unique circumstances, does 

not constitute a contract. 

(2) Derived amount has the meaning 

given the term in § 147.210 of this 

subchapter. 

(3) Eligible database means— 

(i) A State all-payer claims database; 

or 


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(ii) Any third-party database which— 

(A) Is not affiliated with, or owned or 

controlled by, any health insurance 

issuer, or a health care provider, facility, 

or provider of air ambulance services (or 

any member of the same controlled 

group as, or under common control 

with, such an entity). For purposes of 

this paragraph (a)(3)(ii)(A), the term 

controlled group means a group of two 

or more persons that is treated as a 

single employer under sections 52(a), 

52(b), 414(m), or 414(o) of the Internal 

Revenue Code of 1986, as amended; 

(B) Has sufficient information 

reflecting in-network amounts paid by 

group health plans or health insurance 

issuers offering group or individual 

health insurance coverage to providers, 

facilities, or providers of air ambulance 

services for relevant items and services 

furnished in the applicable geographic 

region; and 

(C) Has the ability to distinguish 

amounts paid to participating providers 

and facilities by commercial payers, 

such as group health plans and health 

insurance issuers offering group or 

individual health insurance coverage, 

from all other claims data, such as 

amounts billed by nonparticipating 

providers or facilities and amounts paid 

by public payers, including the 

Medicare program under title XVIII of 

the Social Security Act, the Medicaid 

program under title XIX of the Social 

Security Act (or a demonstration project 

under title XI of the Social Security 

Act), or the Children’s Health Insurance 

Program under title XXI of the Social 

Security Act. 

(4) Facility of the same or similar 

facility type means, with respect to 

emergency services, either— 

(i) An emergency department of a 

hospital; or 

(ii) An independent freestanding 

emergency department. 

(5) First coverage year means, with 

respect to an item or service for which 

coverage is not offered in 2019 under a 

group health plan or group or individual 

health insurance coverage offered by a 

health insurance issuer, the first year 

after 2019 for which coverage for such 

item or service is offered under that 

plan or coverage. 

(6) First sufficient information year 

means, with respect to a group health 

plan or group or individual health 

insurance coverage offered by a health 

insurance issuer— 

(i) In the case of an item or service for 

which the plan or coverage does not 

have sufficient information to calculate 

the median of the contracted rates 

described in paragraph (b) of this 

section in 2019, the first year after 2022 

for which the plan or issuer has 

sufficient information to calculate the 

median of such contracted rates in the 

year immediately preceding that first 

year after 2022; and 

(ii) In the case of a newly covered 

item or service, the first year after the 

first coverage year for such item or 

service with respect to such plan or 

coverage for which the plan or issuer 

has sufficient information to calculate 

the median of the contracted rates 

described in paragraph (b) of this 

section in the year immediately 

preceding that first year. 

(7) Geographic region means— 

(i) For items and services other than 

air ambulance services— 

(A) Subject to paragraphs (a)(7)(i)(B) 

and (C) of this section, one region for 

each metropolitan statistical area, as 

described by the U.S. Office of 

Management and Budget and published 

by the U.S. Census Bureau, in a State, 

and one region consisting of all other 

portions of the State. 

(B) If a plan or issuer does not have 

sufficient information to calculate the 

median of the contracted rates described 

in paragraph (b) of this section for an 

item or service provided in a geographic 

region described in paragraph 

(a)(7)(i)(A) of this section, one region 

consisting of all metropolitan statistical 

areas, as described by the U.S. Office of 

Management and Budget and published 

by the U.S. Census Bureau, in the State, 

and one region consisting of all other 

portions of the State. 

(C) If a plan or issuer does not have 

sufficient information to calculate the 

median of the contracted rates described 

in paragraph (b) of this section for an 

item or service provided in a geographic 

region described in paragraph 

(a)(7)(i)(B) of this section, one region 

consisting of all metropolitan statistical 

areas, as described by the U.S. Office of 

Management and Budget and published 

by the U.S. Census Bureau, in each 

Census division and one region 

consisting of all other portions of the 

Census division, as described by the 

U.S. Census Bureau. 

(ii) For air ambulance services— 

(A) Subject to paragraph (a)(7)(ii)(B) of 

this section, one region consisting of all 

metropolitan statistical areas, as 

described by the U.S. Office of 

Management and Budget and published 

by the U.S. Census Bureau, in the State, 

and one region consisting of all other 

portions of the State, determined based 

on the point of pick-up (as defined in 42 

CFR 414.605). 

(B) If a plan or issuer does not have 

sufficient information to calculate the 

median of the contracted rates described 

in paragraph (b) of this section for an air 

ambulance service provided in a 

geographic region described in 

paragraph (a)(7)(ii)(A) of this section, 

one region consisting of all metropolitan 

statistical areas, as described by the U.S. 

Office of Management and Budget and 

published by the U.S. Census Bureau, in 

each Census division and one region 

consisting of all other portions of the 

Census division, as described by the 

U.S. Census Bureau, determined based 

on the point of pick-up (as defined in 42 

CFR 414.605). 

(8) Insurance market is, irrespective 

of the State, one of the following: 

(i) The individual market (other than 

short-term, limited-duration insurance 

or individual health insurance coverage 

that consists solely of excepted 

benefits). 

(ii) The large group market (other than 

coverage that consists solely of excepted 

benefits). 

(iii) The small group market (other 

than coverage that consists solely of 

excepted benefits). 

(iv) In the case of a self-insured group 

health plan, all self-insured group 

health plans (other than account-based 

plans, as defined in § 147.126(d)(6)(i) of 

this subchapter, and plans that consist 

solely of excepted benefits) of the same 

plan sponsor, or at the option of the 

plan sponsor, all self-insured group 

health plans administered by the same 

entity (including a third-party 

administrator contracted by the plan), to 

the extent otherwise permitted by law, 

that is responsible for calculating the 

qualifying payment amount on behalf of 

the plan. 

(9) Modifiers mean codes applied to 

the service code that provide a more 

specific description of the furnished 

item or service and that may adjust the 

payment rate or affect the processing or 

payment of the code billed. 

(10) Newly covered item or service 

means an item or service for which 

coverage was not offered in 2019 under 

a group health plan or group or 

individual health insurance coverage 

offered by a health insurance issuer, but 

that is offered under the plan or 

coverage in a year after 2019. 

(11) New service code means a service 

code that was created or substantially 

revised in a year after 2019. 

(12) Provider in the same or similar 

specialty means the practice specialty of 

a provider, as identified by the plan or 

issuer consistent with the plan’s or 

issuer’s usual business practice, except 

that, with respect to air ambulance 

services, all providers of air ambulance 

services are considered to be a single 

provider specialty. 

(13) Same or similar item or service 

means a health care item or service 

billed under the same service code, or 


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a comparable code under a different 

procedural code system. 

(14) Service code means the code that 

describes an item or service using the 

Current Procedural Terminology (CPT) 

code, Healthcare Common Procedure 

Coding System (HCPCS), or DiagnosisRelated Group (DRG) codes. 

(15) Sufficient information means, for 

purposes of determining whether a 

group health plan or health insurance 

issuer offering group or individual 

health insurance coverage has sufficient 

information to calculate the median of 

the contracted rates described in 

paragraph (b) of this section— 

(i) The plan or issuer has at least three 

contracted rates on January 31, 2019, to 

calculate the median of the contracted 

rates in accordance with paragraph (b) 

of this section; or 

(ii) For an item or service furnished 

during a year after 2022 that is used to 

determine the first sufficient 

information year— 

(A) The plan or issuer has at least 

three contracted rates on January 31 of 

the year immediately preceding that 

year to calculate the median of the 

contracted rates in accordance with 

paragraph (b) of this section; and 

(B) The contracted rates under 

paragraph (a)(15)(ii)(A) of this section 

account (or are reasonably expected to 

account) for at least 25 percent of the 

total number of claims paid for that item 

or service for that year with respect to 

all plans of the sponsor (or the 

administering entity as provided in 

paragraph (a)(8)(iv) of this section, if 

applicable) or all coverage offered by the 

issuer that are offered in the same 

insurance market. 

(16) Qualifying payment amount 

means, with respect to a sponsor of a 

group health plan or health insurance 

issuer offering group or individual 

health insurance coverage, the amount 

calculated using the methodology 

described in paragraph (c) of this 

section. 

(17) Underlying fee schedule rate 

means the rate for a covered item or 

service from a particular participating 

provider, providers, or facility that a 

group health plan or health insurance 

issuer uses to determine a participant’s, 

beneficiary’s, or enrollee’s cost-sharing 

liability for the item or service, when 

that rate is different from the contracted 

rate. 

(b) Methodology for calculation of 

median contracted rate—(1) In general. 

The median contracted rate for an item 

or service is calculated by arranging in 

order from least to greatest the 

contracted rates of all group health 

plans of the plan sponsor (or the 

administering entity as provided in 

paragraph (a)(8)(iv) of this section, if 

applicable) or all group or individual 

health insurance coverage offered by the 

issuer in the same insurance market for 

the same or similar item or service that 

is provided by a provider in the same 

or similar specialty or facility of the 

same or similar facility type and 

provided in the geographic region in 

which the item or service is furnished 

and selecting the middle number. If 

there are an even number of contracted 

rates, the median contracted rate is the 

average of the middle two contracted 

rates. In determining the median 

contracted rate, the amount negotiated 

under each contract is treated as a 

separate amount. If a plan or issuer has 

a contract with a provider group or 

facility, the rate negotiated with that 

provider group or facility under the 

contract is treated as a single contracted 

rate if the same amount applies with 

respect to all providers of such provider 

group or facility under the single 

contract. However, if a plan or issuer 

has a contract with multiple providers, 

with separate negotiated rates with each 

particular provider, each unique 

contracted rate with an individual 

provider constitutes a single contracted 

rate. Further, if a plan or issuer has 

separate contracts with individual 

providers, the contracted rate under 

each such contract constitutes a single 

contracted rate (even if the same amount 

is paid to multiple providers under 

separate contracts). 

(2) Calculation rules. In calculating 

the median contracted rate, a plan or 

issuer must: 

(i) Calculate the median contracted 

rate with respect to all plans of such 

sponsor (or the administering entity as 

provided in paragraph (a)(8)(iv) of this 

section, if applicable) or all coverage 

offered by such issuer that are offered in 

the same insurance market; 

(ii) Calculate the median contracted 

rate using the full contracted rate 

applicable to the service code, except 

that the plan or issuer must— 

(A) Calculate separate median 

contracted rates for CPT code modifiers 

‘‘26’’ (professional component) and 

‘‘TC’’ (technical component); 

(B) For anesthesia services, calculate 

a median contracted rate for the 

anesthesia conversion factor for each 

service code; 

(C) For air ambulance services, 

calculate a median contracted rate for 

the air mileage service codes (A0435 

and A0436); and 

(D) Where contracted rates otherwise 

vary based on applying a modifier code, 

calculate a separate median contracted 

rate for each such service code-modifier 

combination; 

(iii) In the case of payments made by 

a plan or issuer that are not on a fee-forservice basis (such as bundled or 

capitation payments), calculate a 

median contracted rate for each item or 

service using the underlying fee 

schedule rates for the relevant items or 

services. If the plan or issuer does not 

have an underlying fee schedule rate for 

the item or service, it must use the 

derived amount to calculate the median 

contracted rate; and 

(iv) Exclude risk sharing, bonus, 

penalty, or other incentive-based or 

retrospective payments or payment 

adjustments. 

(3) Provider specialties; facility types. 

(i) If a plan or issuer has contracted rates 

that vary based on provider specialty for 

a service code, the median contracted 

rate is calculated separately for each 

provider specialty, as applicable. 

(ii) If a plan or issuer has contracted 

rates for emergency services that vary 

based on facility type for a service code, 

the median contracted rate is calculated 

separately for each facility of the same 

or similar facility type. 

(c) Methodology for calculation of the 

qualifying payment amount—(1) In 

general. (i) For an item or service (other 

than items or services described in 

paragraphs (c)(1)(iii) through (vii) of this 

section) furnished during 2022, the plan 

or issuer must calculate the qualifying 

payment amount by increasing the 

median contracted rate (as determined 

in accordance with paragraph (b) of this 

section) for the same or similar item or 

service under such plans or coverage, 

respectively, on January 31, 2019, by the 

combined percentage increase as 

published by the Department of the 

Treasury and the Internal Revenue 

Service to reflect the percentage 

increase in the CPI–U over 2019, such 

percentage increase over 2020, and such 

percentage increase over 2021. 

(A) The combined percentage increase 

for 2019, 2020, and 2021 will be 

published in guidance by the Internal 

Revenue Service. The Department of the 

Treasury and the Internal Revenue 

Service will calculate the percentage 

increase using the CPI–U published by 

the Bureau of Labor Statistics of the 

Department of Labor. 

(B) For purposes of this paragraph 

(c)(1)(i), the CPI–U for each calendar 

year is the average of the CPI–U as of the 

close of the 12-month period ending on 

August 31 of the calendar year, rounded 

to 10 decimal places. 

(C) The combined percentage increase 

for 2019, 2020, and 2021 will be 

calculated as: 

(CPI–U 2019/CPI–U 2018) × (CPI–U 

2020/CPI–U 2019) × (CPI–U 2021/ 

CPI–U 2020) 


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(ii) For an item or service (other than 

items or services described in 

paragraphs (c)(1)(iii) through (vii) of this 

section) furnished during 2023 or a 

subsequent year, the plan or issuer must 

calculate the qualifying payment 

amount by increasing the qualifying 

payment amount determined under 

paragraph (c)(1)(i) of this section, for 

such an item or service furnished in the 

immediately preceding year, by the 

percentage increase as published by the 

Department of the Treasury and the 

Internal Revenue Service. 

(A) The percentage increase for any 

year after 2022 will be published in 

guidance by the Internal Revenue 

Service. The Department of the Treasury 

and Internal Revenue Service will 

calculate the percentage increase using 

the CPI–U published by the Bureau of 

Labor Statistics of the Department of 

Labor. 

(B) For purposes of this paragraph 

(c)(1)(ii), the CPI–U for each calendar 

year is the average of the CPI–U as of the 

close of the 12-month period ending on 

August 31 of the calendar year, rounded 

to 10 decimal places. 

(C) The combined percentage increase 

for any year will be calculated as CPI– 

U present year/CPI–U prior year. 

(iii) For anesthesia services furnished 

during 2022, the plan or issuer must 

calculate the qualifying payment 

amount by first increasing the median 

contracted rate for the anesthesia 

conversion factor (as determined in 

accordance with paragraph (b) of this 

section) for the same or similar item or 

service under such plans or coverage, 

respectively, on January 31, 2019, in 

accordance with paragraph (c)(1)(i) of 

this section (referred to in this section 

as the indexed median contracted rate 

for the anesthesia conversion factor). 

The plan or issuer must then multiply 

the indexed median contracted rate for 

the anesthesia conversion factor by the 

sum of the base unit, time unit, and 

physical status modifier units of the 

participant, beneficiary, or enrollee to 

whom anesthesia services are furnished 

to determine the qualifying payment 

amount. 

(A) The base units for an anesthesia 

service code are the base units for that 

service code specified in the most recent 

edition (as of the date of service) of the 

American Society of Anesthesiologists 

Relative Value Guide. 

(B) The time unit is measured in 15- 

minute increments or a fraction thereof. 

(C) The physical status modifier on a 

claim is a standard modifier describing 

the physical status of the patient and is 

used to distinguish between various 

levels of complexity of the anesthesia 

services provided, and is expressed as a 

unit with a value between zero (0) and 

three (3). 

(D) The anesthesia conversion factor 

is expressed in dollars per unit and is 

a contracted rate negotiated with the 

plan or issuer. 

(iv) For anesthesia services furnished 

during 2023 or a subsequent year, the 

plan or issuer must calculate the 

qualifying payment amount by first 

increasing the indexed median 

contracted rate for the anesthesia 

conversion factor, determined under 

paragraph (c)(1)(iii) of this section for 

such services furnished in the 

immediately preceding year, in 

accordance with paragraph (c)(1)(ii) of 

this section. The plan or issuer must 

then multiply that amount by the sum 

of the base unit, time unit, and physical 

status modifier units for the participant, 

beneficiary, or enrollee to whom 

anesthesia services are furnished to 

determine the qualifying payment 

amount. 

(v) For air ambulance services billed 

using the air mileage service codes 

(A0435 and A0436) that are furnished 

during 2022, the plan or issuer must 

calculate the qualifying payment 

amount for services billed using the air 

mileage service codes by first increasing 

the median contracted rate (as 

determined in accordance with 

paragraph (b) of this section), in 

accordance with paragraph (c)(1)(i) of 

this section (referred to in this section 

as the indexed median air mileage rate). 

The plan or issuer must then multiply 

the indexed median air mileage rate by 

the number of loaded miles provided to 

the participant, beneficiary, or enrollee 

to determine the qualifying payment 

amount. 

(A) The air mileage rate is expressed 

in dollars per loaded mile flown, is 

expressed in statute miles (not nautical 

miles), and is a contracted rate 

negotiated with the plan or issuer. 

(B) The number of loaded miles is the 

number of miles a patient is transported 

in the air ambulance vehicle. 

(C) The qualifying payment amount 

for other service codes associated with 

air ambulance services is calculated in 

accordance with paragraphs (c)(1)(i) and 

(ii) of this section. 

(vi) For air ambulance services billed 

using the air mileage service codes 

(A0435 and A0436) that are furnished 

during 2023 or a subsequent year, the 

plan or issuer must calculate the 

qualifying payment amount by first 

increasing the indexed median air 

mileage rate, determined under 

paragraph (c)(1)(v) of this section for 

such services furnished in the 

immediately preceding year, in 

accordance with paragraph (c)(1)(ii) of 

this section. The plan or issuer must 

then multiply the indexed median air 

mileage rate by the number of loaded 

miles provided to the participant, 

beneficiary, or enrollee to determine the 

qualifying payment amount. 

(vii) For any other items or services 

for which a plan or issuer generally 

determines payment for the same or 

similar items or services by multiplying 

a contracted rate by another unit value, 

the plan or issuer must calculate the 

qualifying payment amount using a 

methodology that is similar to the 

methodology required under paragraphs 

(c)(1)(iii) through (vi) of this section and 

reasonably reflects the payment 

methodology for same or similar items 

or services. 

(2) New plans and coverage. With 

respect to a sponsor of a group health 

plan or health insurance issuer offering 

group or individual health insurance 

coverage in a geographic region in 

which the sponsor or issuer, 

respectively, did not offer any group 

health plan or health insurance coverage 

during 2019— 

(i) For the first year in which the 

group health plan, group health 

insurance coverage, or individual health 

insurance coverage, respectively, is 

offered in such region— 

(A) If the plan or issuer has sufficient 

information to calculate the median of 

the contracted rates described in 

paragraph (b) of this section, the plan or 

issuer must calculate the qualifying 

payment amount in accordance with 

paragraph (c)(1) of this section for items 

and services that are covered by the 

plan or coverage and furnished during 

the first year; and 

(B) If the plan or issuer does not have 

sufficient information to calculate the 

median of the contracted rates described 

in paragraph (b) of this section for an 

item or service provided in a geographic 

region, the plan or issuer must 

determine the qualifying payment 

amount for the item or service in 

accordance with paragraph (c)(3)(i) of 

this section. 

(ii) For each subsequent year the 

group health plan, group health 

insurance coverage, or individual health 

insurance coverage, respectively, is 

offered in the region, the plan or issuer 

must calculate the qualifying payment 

amount by increasing the qualifying 

payment amount determined under this 

paragraph (c)(2) for the items and 

services furnished in the immediately 

preceding year, in accordance with 

paragraph (c)(1)(ii), (iv), or (vi) of this 

section, as applicable. 

(3) Insufficient information; newly 

covered items and services. In the case 

of a plan or issuer that does not have 


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36978 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 

sufficient information to calculate the 

median of the contracted rates described 

in paragraph (b) of this section in 2019 

(or, in the case of a newly covered item 

or service, in the first coverage year for 

such item or service with respect to 

such plan or coverage if the plan or 

issuer does not have sufficient 

information) for an item or service 

provided in a geographic region— 

(i) For an item or service furnished 

during 2022 (or, in the case of a newly 

covered item or service, during the first 

coverage year for the item or service 

with respect to the plan or coverage), 

the plan or issuer must calculate the 

qualifying payment amount by first 

identifying the rate that is equal to the 

median of the in-network allowed 

amounts for the same or similar item or 

service provided in the geographic 

region in the year immediately 

preceding the year in which the item or 

service is furnished (or, in the case of a 

newly covered item or service, the year 

immediately preceding such first 

coverage year) determined by the plan 

or issuer, respectively, through use of 

any eligible database, and then 

increasing that rate by the percentage 

increase in the CPI–U over such 

preceding year. For purposes of this 

section, in cases in which an eligible 

database is used to determine the 

qualifying payment amount with respect 

to an item or service furnished during 

a calendar year, the plan or issuer must 

use the same database for determining 

the qualifying payment amount for that 

item or service furnished through the 

last day of the calendar year, and if a 

different database is selected for some 

items or services, the basis for that 

selection must be one or more factors 

not directly related to the rate of those 

items or services (such as sufficiency of 

data for those items or services). 

(ii) For an item or service furnished in 

a subsequent year (before the first 

sufficient information year for such item 

or service with respect to such plan or 

coverage), the plan or issuer must 

calculate the qualifying payment 

amount by increasing the qualifying 

payment amount determined under 

paragraph (c)(3)(i) of this section or this 

paragraph (c)(3)(ii), as applicable, for 

such item or service for the year 

immediately preceding such subsequent 

year, by the percentage increase in CPI– 

U over such preceding year; 

(iii) For an item or service furnished 

in the first sufficient information year 

for such item or service with respect to 

such plan or coverage, the plan or issuer 

must calculate the qualifying payment 

amount in accordance with paragraph 

(c)(1)(i), (iii), or (v) of this section, as 

applicable, except that in applying such 

paragraph to such item or service, the 

reference to ‘furnished during 2022’ is 

treated as a reference to furnished 

during such first sufficient information 

year, the reference to ’in 2019’ is treated 

as a reference to such sufficient 

information year, and the increase 

described in such paragraph is not 

applied; and 

(iv) For an item or service furnished 

in any year subsequent to the first 

sufficient information year for such item 

or service with respect to such plan or 

coverage, the plan or issuer must 

calculate the qualifying payment 

amount in accordance with paragraph 

(c)(1)(ii), (iv), or (vi) of this section, as 

applicable, except that in applying such 

paragraph to such item or service, the 

reference to ‘furnished during 2023 or a 

subsequent year’ is treated as a reference 

to furnished during the year after such 

first sufficient information year or a 

subsequent year. 

(4) New service codes. In the case of 

a plan or issuer that does not have 

sufficient information to calculate the 

median of the contracted rates described 

in paragraph (b) of this section and 

determine the qualifying payment 

amount under paragraphs (c)(1) through 

(3) of this section because the item or 

service furnished is billed under a new 

service code— 

(i) For an item or service furnished 

during 2022 (or, in the case of a newly 

covered item or service, during the first 

coverage year for the item or service 

with respect to the plan or coverage), 

the plan or issuer must identify a 

reasonably related service code that 

existed in the immediately preceding 

year and— 

(A) If the Centers for Medicare & 

Medicaid Services has established a 

Medicare payment rate for the item or 

service billed under the new service 

code, the plan or issuer must calculate 

the qualifying payment amount by first 

calculating the ratio of the rate that 

Medicare pays for the item or service 

billed under the new service code 

compared to the rate that Medicare pays 

for the item or service billed under the 

related service code, and then 

multiplying the ratio by the qualifying 

payment amount for an item or service 

billed under the related service code for 

the year in which the item or service is 

furnished. 

(B) If the Centers for Medicare & 

Medicaid Services has not established a 

Medicare payment rate for the item or 

service billed under the new service 

code, the plan or issuer must calculate 

the qualifying payment amount by first 

calculating the ratio of the rate that the 

plan or issuer reimburses for the item or 

service billed under the new service 

code compared to the rate that the plan 

or issuer reimburses for the item or 

service billed under the related service 

code, and then multiplying the ratio by 

the qualifying payment amount for an 

item or service billed under the related 

service code. 

(ii) For an item or service furnished in 

a subsequent year (before the first 

sufficient information year for such item 

or service with respect to such plan or 

coverage or before the first year for 

which an eligible database has sufficient 

information to a calculate a rate under 

paragraph (c)(3)(i) of this section in the 

immediately preceding year), the plan 

or issuer must calculate the qualifying 

payment amount by increasing the 

qualifying payment amount determined 

under paragraph (c)(4)(i) of this section 

or this paragraph (c)(4)(ii), as applicable, 

for such item or service for the year 

immediately preceding such subsequent 

year, by the percentage increase in CPI– 

U over such preceding year; 

(iii) For an item or service furnished 

in the first sufficient information year 

for such item or service with respect to 

such plan or coverage or the first year 

for which an eligible database has 

sufficient information to calculate a rate 

under paragraph (c)(3)(i) of this section 

in the immediately preceding year, the 

plan or issuer must calculate the 

qualifying payment amount in 

accordance with paragraph (c)(3) of this 

section. 

(d) Information to be shared about 

qualifying payment amount. In cases in 

which the recognized amount with 

respect to an item or service furnished 

by a nonparticipating provider, 

nonparticipating emergency facility, or 

nonparticipating provider of air 

ambulance services is the qualifying 

payment amount, the plan or issuer 

must provide in writing, in paper or 

electronic form, to the provider or 

facility, as applicable— 

(1) With each initial payment or 

notice of denial of payment under 

§ 149.110, § 149.120, or § 149.130: 

(i) The qualifying payment amount for 

each item or service involved; 

(ii) A statement to certify that, based 

on the determination of the plan or 

issuer— 

(A) The qualifying payment amount 

applies for purposes of the recognized 

amount (or, in the case of air ambulance 

services, for calculating the 

participant’s, beneficiary’s, or enrollee’s 

cost sharing); and 

(B) Each qualifying payment amount 

shared with the provider or facility was 

determined in compliance with this 

section; 

(iii) A statement that if the provider 

or facility, as applicable, wishes to 


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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations 36979 

initiate a 30-day open negotiation 

period for purposes of determining the 

amount of total payment, the provider 

or facility may contact the appropriate 

person or office to initiate open 

negotiation, and that if the 30-day 

negotiation period does not result in a 

determination, generally, the provider 

or facility may initiate the independent 

dispute resolution process within 4 days 

after the end of the open negotiation 

period; and 

(iv) Contact information, including a 

telephone number and email address, 

for the appropriate person or office to 

initiate open negotiations for purposes 

of determining an amount of payment 

(including cost sharing) for such item or 

service. 

(2) In a timely manner upon request 

of the provider or facility: 

(i) Information about whether the 

qualifying payment amount for items 

and services involved included 

contracted rates that were not on a feefor-service basis for those specific items 

and services and whether the qualifying 

payment amount for those items and 

services was determined using 

underlying fee schedule rates or a 

derived amount; 

(ii) If a plan or issuer uses an eligible 

database under paragraph (c)(3) of this 

section to determine the qualifying 

payment amount, information to 

identify which database was used; and 

(iii) If a related service code was used 

to determine the qualifying payment 

amount for an item or service billed 

under a new service code under 

paragraph (c)(4)(i) or (ii) of this section, 

information to identify the related 

service code; and 

(iv) If applicable, a statement that the 

plan’s or issuer’s contracted rates 

include risk-sharing, bonus, penalty, or 

other incentive-based or retrospective 

payments or payment adjustments for 

the items and services involved (as 

applicable) that were excluded for 

purposes of calculating the qualifying 

payment amount. 

(e) Certain access fees to databases. In 

the case of a plan or issuer that, 

pursuant to this section, uses an eligible 

database to determine the qualifying 

payment amount for an item or service, 

the plan or issuer is responsible for any 

costs associated with accessing such 

database. 

(f) Audits. The procedures described 

in part 150 of this subchapter apply 

with respect to ensuring that a plan or 

coverage is in compliance with the 

requirement of applying a qualifying 

payment amount under this subpart and 

ensuring that such amount so applied 

satisfies the requirements under this 

section, as applicable. 

(g) Applicability date. The provisions 

of this section are applicable with 

respect to plan years (in the individual 

market, policy years) beginning on or 

after January 1, 2022. 

§ 149.150 Complaints process for surprise 

medical bills regarding group health plans 

and group and individual health insurance 

coverage. 

(a) Scope and definitions—(1) Scope. 

This section establishes a process to 

receive and resolve complaints 

regarding information that a specific 

group health plan or health insurance 

issuer offering group or individual 

health insurance coverage may be 

failing to meet the requirements under 

this subpart, which may warrant an 

investigation. 

(2) Definitions. In this section— 

(i) Complaint means a 

communication, written or oral, that 

indicates there has been a potential 

violation of the requirements under 

subpart B of this part, whether or not a 

violation actually occurred. 

(ii) Complainant means any 

individual, or their authorized 

representative, who files a complaint as 

defined in paragraph (a)(2)(i) of this 

section. 

(b) Complaints process. (1) HHS will 

consider the date a complaint is filed to 

be the date upon which HHS receives an 

oral or written statement that identifies 

information about the complaint 

sufficient to identify the parties 

involved and the action or inaction 

complained of. 

(2) HHS will notify complainants, by 

oral or written means, of receipt of the 

complaint no later than 60 business 

days after the complaint is received. 

HHS will include a response 

acknowledging receipt of the complaint, 

notifying the complainant of their rights 

and obligations under the complaints 

process, and describing the next steps of 

the complaints resolution process. As 

part of the response, HHS may request 

additional information needed to 

process the complaint. Such additional 

information may include: 

(i) Explanations of benefits; 

(ii) Processed claims; 

(iii) Information about the health care 

provider, facility, or provider of air 

ambulance services involved; 

(iv) Information about the group 

health plan or health insurance issuer 

covering the individual; 

(v) Information to support a 

determination regarding whether the 

service was an emergency service or 

non-emergency service; 

(vi) The summary plan description, 

policy, certificate, contract of insurance, 

membership booklet, outline of 

coverage, or other evidence of coverage 

the plan or issuer provides to 

participants, beneficiaries, or enrollees; 

(vii) Documents regarding the facts in 

the complaint in the possession of, or 

otherwise attainable by, the 

complainant; or 

(viii) Any other information HHS may 

need to make a determination of facts 

for an investigation. 

(3) HHS will make reasonable efforts 

consistent with agency practices to 

notify the complainant of the outcome 

of the complaint after the submission is 

processed through appropriate methods 

as determined by HHS. A complaint is 

considered processed after HHS has 

reviewed the complaint and 

accompanying information and made an 

outcome determination. Based on the 

nature of the complaint and the plan or 

issuer involved, HHS may— 

(i) Refer the complainant to another 

appropriate Federal or State resolution 

process; 

(ii) Notify the complainant and make 

reasonable efforts to refer the 

complainant to the appropriate State or 

Federal regulatory authority if HHS 

receives a complaint where another 

entity has enforcement jurisdiction over 

the plan or issuer; 

(iii) Refer the plan or issuer for an 

investigation for enforcement action 

under 45 CFR part 150; or 

(iv) Provide the complainant with an 

explanation of the resolution of the 

complaint and any corrective action 

taken. 

Subpart C—[Reserved] 

Subpart D—Additional Patient 

Protections 

§ 149.310 Choice of health care 

professional. 

(a) Choice of health care 

professional—(1) Designation of 

primary care provider—(i) In general. If 

a group health plan, or a health 

insurance issuer offering group or 

individual health insurance coverage, 

requires or provides for designation by 

a participant, beneficiary, or enrollee of 

a participating primary care provider, 

then the plan or issuer must permit each 

participant, beneficiary, or enrollee to 

designate any participating primary care 

provider who is available to accept the 

participant, beneficiary, or enrollee. In 

such a case, the plan or issuer must 

comply with the rules of paragraph 

(a)(4) of this section by informing each 

participant (in the individual market, 

primary subscriber) of the terms of the 

plan or health insurance coverage 

regarding designation of a primary care 

provider. 


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(ii) Construction. Nothing in 

paragraph (a)(1)(i) of this section is to be 

construed to prohibit the application of 

reasonable and appropriate geographic 

limitations with respect to the selection 

of primary care providers, in accordance 

with the terms of the plan or coverage, 

the underlying provider contracts, and 

applicable State law. 

(iii) Example. The rules of this 

paragraph (a)(1) are illustrated by the 

following example: 

(A) Facts. A group health plan 

requires individuals covered under the 

plan to designate a primary care 

provider. The plan permits each 

individual to designate any primary care 

provider participating in the plan’s 

network who is available to accept the 

individual as the individual’s primary 

care provider. If an individual has not 

designated a primary care provider, the 

plan designates one until the individual 

has made a designation. The plan 

provides a notice that satisfies the 

requirements of paragraph (a)(4) of this 

section regarding the ability to designate 

a primary care provider. 

(B) Conclusion. In this Example, the 

plan has satisfied the requirements of 

paragraph (a) of this section. 

(2) Designation of pediatrician as 

primary care provider—(i) In general. If 

a group health plan, or a health 

insurance issuer offering group or 

individual health insurance coverage, 

requires or provides for the designation 

of a participating primary care provider 

for a child by a participant, beneficiary, 

or enrollee, the plan or issuer must 

permit the participant, beneficiary, or 

enrollee to designate a physician 

(allopathic or osteopathic) who 

specializes in pediatrics (including 

pediatric subspecialties, based on the 

scope of that provider’s license under 

applicable State law) as the child’s 

primary care provider if the provider 

participates in the network of the plan 

or issuer and is available to accept the 

child. In such a case, the plan or issuer 

must comply with the rules of 

paragraph (a)(4) of this section by 

informing each participant (in the 

individual market, primary subscriber) 

of the terms of the plan or health 

insurance coverage regarding 

designation of a pediatrician as the 

child’s primary care provider. 

(ii) Construction. Nothing in 

paragraph (a)(2)(i) of this section is to be 

construed to waive any exclusions of 

coverage under the terms and 

conditions of the plan or health 

insurance coverage with respect to 

coverage of pediatric care. 

(iii) Examples. The rules of this 

paragraph (a)(2) are illustrated by the 

following examples: 

(A) Example 1—(1) Facts. A group 

health plan’s HMO designates for each 

participant a physician who specializes 

in internal medicine to serve as the 

primary care provider for the participant 

and any beneficiaries. Participant A 

requests that Pediatrician B be 

designated as the primary care provider 

for A’s child. B is a participating 

provider in the HMO’s network and is 

available to accept the child. 

(2) Conclusion. In this Example 1, the 

HMO must permit A’s designation of B 

as the primary care provider for A’s 

child in order to comply with the 

requirements of this paragraph (a)(2). 

(B) Example 2—(1) Facts. Same facts 

as Example 1 (paragraph (a)(2)(iii)(A) of 

this section), except that A takes A’s 

child to B for treatment of the child’s 

severe shellfish allergies. B wishes to 

refer A’s child to an allergist for 

treatment. The HMO, however, does not 

provide coverage for treatment of food 

allergies, nor does it have an allergist 

participating in its network, and it 

therefore refuses to authorize the 

referral. 

(2) Conclusion. In this Example 2, the 

HMO has not violated the requirements 

of this paragraph (a)(2) because the 

exclusion of treatment for food allergies 

is in accordance with the terms of A’s 

coverage. 

(3) Patient access to obstetrical and 

gynecological care—(i) General rights— 

(A) Direct access. A group health plan, 

or a health insurance issuer offering 

group or individual health insurance 

coverage, described in paragraph 

(a)(3)(ii) of this section, may not require 

authorization or referral by the plan, 

issuer, or any person (including a 

primary care provider) in the case of a 

female participant, beneficiary, or 

enrollee who seeks coverage for 

obstetrical or gynecological care 

provided by a participating health care 

professional who specializes in 

obstetrics or gynecology. In such a case, 

the plan or issuer must comply with the 

rules of paragraph (a)(4) of this section 

by informing each participant (in the 

individual market, primary subscriber) 

that the plan may not require 

authorization or referral for obstetrical 

or gynecological care by a participating 

health care professional who specializes 

in obstetrics or gynecology. The plan or 

issuer may require such a professional 

to agree to otherwise adhere to the 

plan’s or issuer’s policies and 

procedures, including procedures 

regarding referrals and obtaining prior 

authorization and providing services 

pursuant to a treatment plan (if any) 

approved by the plan or issuer. For 

purposes of this paragraph (a)(3), a 

health care professional who specializes 

in obstetrics or gynecology is any 

individual (including a person other 

than a physician) who is authorized 

under applicable State law to provide 

obstetrical or gynecological care. 

(B) Obstetrical and gynecological 

care. A group health plan or health 

insurance issuer described in paragraph 

(a)(3)(ii) of this section must treat the 

provision of obstetrical and 

gynecological care, and the ordering of 

related obstetrical and gynecological 

items and services, pursuant to the 

direct access described under paragraph 

(a)(3)(i)(A) of this section, by a 

participating health care professional 

who specializes in obstetrics or 

gynecology as the authorization of the 

primary care provider. 

(ii) Application of paragraph. A group 

health plan, or a health insurance issuer 

offering group or individual health 

insurance coverage, is described in this 

paragraph (a)(3) if the plan or issuer— 

(A) Provides coverage for obstetrical 

or gynecological care; and 

(B) Requires the designation by a 

participant, beneficiary, or enrollee of a 

participating primary care provider. 

(iii) Construction. Nothing in 

paragraph (a)(3)(i) of this section is to be 

construed to— 

(A) Waive any exclusions of coverage 

under the terms and conditions of the 

plan or health insurance coverage with 

respect to coverage of obstetrical or 

gynecological care; or 

(B) Preclude the group health plan or 

health insurance issuer involved from 

requiring that the obstetrical or 

gynecological provider notify the 

primary care health care professional or 

the plan or issuer of treatment 

decisions. 

(iv) Examples. The rules of this 

paragraph (a)(3) are illustrated by the 

following examples: 

(A) Example 1—(1) Facts. A group 

health plan requires each participant to 

designate a physician to serve as the 

primary care provider for the participant 

and the participant’s family. Participant 

A, a female, requests a gynecological 

exam with Physician B, an in-network 

physician specializing in gynecological 

care. The group health plan requires 

prior authorization from A’s designated 

primary care provider for the 

gynecological exam. 

(2) Conclusion. In this Example 1, the 

group health plan has violated the 

requirements of this paragraph (a)(3) 

because the plan requires prior 

authorization from A’s primary care 

provider prior to obtaning gynecological 

services. 

(B) Example 2—(1) Facts. Same facts 

as Example 1 (paragraph (a)(3)(iv)(A) of 

this section) except that A seeks 


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gynecological services from C, an out-ofnetwork provider. 

(2) Conclusion. In this Example 2, the 

group health plan has not violated the 

requirements of this paragraph (a)(3) by 

requiring prior authorization because C 

is not a participating health care 

provider. 

(C) Example 3—(1) Facts. Same facts 

as Example 1 (paragraph (a)(3)(iv)(A) of 

this section) except that the group 

health plan only requires B to inform 

A’s designated primary care physician 

of treatment decisions. 

(2) Conclusion. In this Example 3, the 

group health plan has not violated the 

requirements of this paragraph (a)(3) 

because A has direct access to B without 

prior authorization. The fact that the 

group health plan requires the 

designated primary care physician to be 

notified of treatment decisions does not 

violate this paragraph (a)(3). 

(D) Example 4—(1) Facts. A group 

health plan requires each participant to 

designate a physician to serve as the 

primary care provider for the participant 

and the participant’s family. The group 

health plan requires prior authorization 

before providing benefits for uterine 

fibroid embolization. 

(2) Conclusion. In this Example 4, the 

plan requirement for prior authorization 

before providing benefits for uterine 

fibroid embolization does not violate the 

requirements of this paragraph (a)(3) 

because, though the prior authorization 

requirement applies to obstetrical 

services, it does not restrict access to 

any providers specializing in obstetrics 

or gynecology. 

(4) Notice of right to designate a 

primary care provider—(i) In general. If 

a group health plan or health insurance 

issuer requires the designation by a 

participant, beneficiary, or enrollee of a 

primary care provider, the plan or issuer 

must provide a notice informing each 

participant (in the individual market, 

primary subscriber) of the terms of the 

plan or health insurance coverage 

regarding designation of a primary care 

provider and of the rights— 

(A) Under paragraph (a)(1)(i) of this 

section, that any participating primary 

care provider who is available to accept 

the participant, beneficiary, or enrollee 

can be designated; 

(B) Under paragraph (a)(2)(i) of this 

section, with respect to a child, that any 

participating physician who specializes 

in pediatrics can be designated as the 

primary care provider; and 

(C) Under paragraph (a)(3)(i) of this 

section, that the plan may not require 

authorization or referral for obstetrical 

or gynecological care by a participating 

health care professional who specializes 

in obstetrics or gynecology. 

(ii) Timing. In the case of a group 

health plan or group health insurance 

coverage, the notice described in 

paragraph (a)(4)(i) of this section must 

be included whenever the plan or issuer 

provides a participant with a summary 

plan description or other similar 

description of benefits under the plan or 

health insurance coverage. In the case of 

individual health insurance coverage, 

the notice described in paragraph 

(a)(4)(i) of this section must be included 

whenever the issuer provides a primary 

subscriber with a policy, certificate, or 

contract of health insurance. 

(iii) Model language. The following 

model language can be used to satisfy 

the notice requirement described in 

paragraph (a)(4)(i) of this section: 

(A) For plans and issuers that require 

or allow for the designation of primary 

care providers by participants, 

beneficiaries, or enrollees, insert: 

[Name of group health plan or health 

insurance issuer] generally [requires/allows] 

the designation of a primary care provider. 

You have the right to designate any primary 

care provider who participates in our 

network and who is available to accept you 

or your family members. [If the plan or health 

insurance coverage designates a primary care 

provider automatically, insert: Until you 

make this designation, [name of group health 

plan or health insurance issuer] designates 

one for you.] For information on how to 

select a primary care provider, and for a list 

of the participating primary care providers, 

contact the [plan administrator or issuer] at 

[insert contact information]. 

(B) For plans and issuers that require 

or allow for the designation of a primary 

care provider for a child, add: 

For children, you may designate a 

pediatrician as the primary care provider. 

(C) For plans and issuers that provide 

coverage for obstetric or gynecological 

care and require the designation by a 

participant, beneficiary, or enrollee of a 

primary care provider, add: 

You do not need prior authorization from 

[name of group health plan or issuer] or from 

any other person (including a primary care 

provider) in order to obtain access to 

obstetrical or gynecological care from a 

health care professional in our network who 

specializes in obstetrics or gynecology. The 

health care professional, however, may be 

required to comply with certain procedures, 

including obtaining prior authorization for 

certain services, following a pre-approved 

treatment plan, or procedures for making 

referrals. For a list of participating health 

care professionals who specialize in 

obstetrics or gynecology, contact the [plan 

administrator or issuer] at [insert contact 

information]. 

(b) Applicability date. The provisions 

of this section are applicable with 

respect to plan years (in the individual 

market, policy years) beginning on or 

after January 1, 2022. 

Subpart E—Health Care Provider, 

Health Care Facility, and Air 

Ambulance Service Provider 

Requirements 

§ 149.410 Balance billing in cases of 

emergency services. 

(a) In general. In the case of a 

participant, beneficiary, or enrollee with 

benefits under a group health plan or 

group or individual health insurance 

coverage offered by a health insurance 

issuer and who is furnished emergency 

services (for which benefits are 

provided under the plan or coverage) 

with respect to an emergency medical 

condition with respect to a visit at an 

emergency department of a hospital or 

an independent freestanding emergency 

department— 

(1) A nonparticipating emergency 

facility must not bill, and must not hold 

liable, the participant, beneficiary, or 

enrollee for a payment amount for such 

emergency services (as defined in 26 

CFR 54.9816–4T(c)(2), 29 CFR 

2590.716–4(c)(2), and § 149.110(c)(2), as 

applicable) that exceeds the cost-sharing 

requirement for such services (as 

determined in accordance with 26 CFR 

54.9816–4T(b)(3)(ii) and (iii), 29 CFR 

2590.716–4(b)(3)(ii) and (iii), and 

§ 149.110(b)(3)(ii) and (iii), as 

applicable). 

(2) A nonparticipating provider must 

not bill, and must not hold liable, the 

participant, beneficiary, or enrollee for a 

payment amount for an emergency 

service (as defined in 26 CFR 54.9816– 

4T(c)(2), 29 CFR 2590.716–4(c)(2), and 

§ 149.110(c)(2), as applicable) furnished 

to such individual by such provider 

with respect to such emergency medical 

condition and visit for which the 

individual receives emergency services 

at the hospital or independent 

freestanding emergency department that 

exceeds the cost-sharing requirement for 

such service (as determined in 

accordance with 26 CFR 54.9816– 

4T(b)(3)(ii) and (iii), 29 CFR 2590.716– 

4(b)(3)(ii) and (iii), and 

§ 149.110(b)(3)(ii) and (iii), as 

applicable). 

(b) Notice and consent to be treated 

by a nonparticipating provider or 

nonparticipating emergency facility. 

The requirements in paragraph (a) of 

this section do not apply with respect to 

items and services described in 26 CFR, 

54.9816–4T(c)(2)(ii)(A), 29 CFR 

2590.716–4(c)(2)(ii)(A), 

§ 149.110(c)(2)(ii)(A), as applicable, and 

are not included as emergency services 

if all of the following conditions are 

met: 

(1) The attending emergency 

physician or treating provider 

determines that the participant, 


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beneficiary, or enrollee is able to travel 

using nonmedical transportation or 

nonemergency medical transportation to 

an available participating provider or 

facility located within a reasonable 

travel distance, taking into account the 

individual’s medical condition. The 

attending emergency physician’s or 

treating provider’s determination is 

binding on the facility for purposes of 

this requirement. 

(2) The provider or facility furnishing 

such additional items and services 

satisfies the notice and consent criteria 

of § 149.420(c) through (g) with respect 

to such items and services, provided 

that the written notice additionally 

satisfies paragraphs (b)(2)(i) and (ii) of 

this section, as applicable. In applying 

this paragraph (b)(2), a reference in 

§ 149.420 to a nonparticipating provider 

is deemed to include a nonparticipating 

emergency facility. 

(i) In the case of a participating 

emergency facility and a 

nonparticipating provider, the written 

notice must also include a list of any 

participating providers at the facility 

who are able to furnish such items and 

services involved and notification that 

the participant, beneficiary, or enrollee 

may be referred, at their option, to such 

a participating provider. 

(ii) In the case of a nonparticipating 

emergency facility, the written notice 

must include the good faith estimated 

amount that the participant, beneficiary, 

or enrollee may be charged for items or 

services furnished by the 

nonparticipating emergency facility or 

by nonparticipating providers with 

respect to the visit at such facility 

(including any item or service that is 

reasonably expected to be furnished by 

the nonparticipating emergency facility 

or nonparticipating providers in 

conjunction with such items or 

services). 

(3) The participant, beneficiary, or 

enrollee (or an authorized representative 

of such individual) is in a condition to 

receive the information described in 

§ 149.420, as determined by the 

attending emergency physician or 

treating provider using appropriate 

medical judgment, and to provide 

informed consent under such section, in 

accordance with applicable State law. 

For purposes of this section and 

§ 149.420, an authorized representative 

is an individual authorized under State 

law to provide consent on behalf of the 

participant, beneficiary, or enrollee, 

provided that the individual is not a 

provider affiliated with the facility or an 

employee of the facility, unless such 

provider or employee is a family 

member of the participant, beneficiary, 

or enrollee. 

(4) The provider or facility satisfies 

any additional requirements or 

prohibitions as may be imposed under 

State law. 

(c) Inapplicability of notice and 

consent exception to certain items and 

services. A nonparticipating provider or 

nonparticipating facility specified in 

paragraph (a) of this section will always 

be subject to the prohibitions in 

paragraph (a) of this section, with 

respect to items or services furnished as 

a result of unforeseen, urgent medical 

needs that arise at the time an item or 

service is furnished, regardless of 

whether the nonparticipating provider 

or nonparticipating emergency facility 

satisfied the notice and consent criteria 

in § 149.420(c) through (g). 

(d) Retention of certain documents. A 

nonparticipating emergency facility 

(with respect to such facility or any 

nonparticipating provider at such 

facility) that obtains from a participant, 

beneficiary, or enrollee of a group health 

plan or group or individual health 

insurance coverage (or an authorized 

representative of such an individual) a 

written consent in accordance with 

§ 149.420(e), with respect to furnishing 

an item or service to such an individual, 

must retain the written notice and 

consent for at least a 7-year period after 

the date on which the item or service is 

so furnished. If a nonparticipating 

provider obtains a signed consent from 

a participant, beneficiary, or enrollee, or 

such individual’s authorized 

representative, the provider may either 

coordinate with the facility to retain the 

written notice and consent for a 7-year 

period, or the provider must retain the 

written notice and consent for a 7-year 

period. 

(e) Notification to plan or issuer. In 

the case of a participant, beneficiary, or 

enrollee who is stabilized and furnished 

additional items and services described 

in § 149.110(c)(2)(ii), a nonparticipating 

provider or nonparticipating emergency 

facility must notify the plan or issuer, 

respectively, when transmitting the bill 

for such items and services, either on 

the bill or in a separate document, as to 

whether all of the conditions described 

in paragraph (b) of this section are met 

with respect to each of the items and 

services for which the bill is submitted, 

and if applicable, provide to the plan or 

issuer a copy of the signed written 

notice and consent document described 

in paragraph (b)(2) of this section. 

(f) Applicability date. The provisions 

of this section are applicable with 

respect to emergency services furnished 

during a plan year (in the individual 

market, policy year) beginning on or 

after January 1, 2022. 

§ 149.420 Balance billing in cases of nonemergency services performed by 

nonparticipating providers at certain 

participating health care facilities. 

(a) In general. A nonparticipating 

provider of a group health plan or group 

or individual health insurance coverage 

who provides items or services (other 

than emergency services) for which 

benefits are provided under the plan or 

coverage at a participating health care 

facility must not bill, and must not hold 

liable, a participant, beneficiary, or 

enrollee of such plan or coverage for a 

payment amount for such an item or 

service furnished by such provider with 

respect to a visit at the facility that 

exceeds the cost-sharing requirement for 

such item or service (as determined in 

accordance with 26 CFR 54.9816– 

5T(c)(1) and (2), 29 CFR 2590.717– 

1(c)(1) and (2), and § 149.120(c)(1) and 

(2), as applicable), unless the provider 

(or the participating health care facility 

on behalf of the provider) satisfies the 

notice and consent criteria of paragraph 

(c) of this section. 

(b) Inapplicability of notice and 

consent exception to certain items and 

services. The notice and consent criteria 

in paragraphs (c) through (i) of this 

section do not apply, and a 

nonparticipating provider specified in 

paragraph (a) of this section will always 

be subject to the prohibitions in 

paragraph (a) of this section, with 

respect to the following services: 

(1) Ancillary services, meaning— 

(i) Items and services related to 

emergency medicine, anesthesiology, 

pathology, radiology, and neonatology, 

whether provided by a physician or 

non-physician practitioner; 

(ii) Items and services provided by 

assistant surgeons, hospitalists, and 

intensivists; 

(iii) Diagnostic services, including 

radiology and laboratory services; and 

(iv) Items and services provided by a 

nonparticipating provider if there is no 

participating provider who can furnish 

such item or service at such facility. 

(2) Items or services furnished as a 

result of unforeseen, urgent medical 

needs that arise at the time an item or 

service is furnished, regardless of 

whether the nonparticipating provider 

satisfied the notice and consent criteria 

in paragraph (c) of this section. 

(c) Notice and consent to be treated by 

a nonparticipating provider. Subject to 

paragraph (f) of this section, and unless 

prohibited by State law, a 

nonparticipating provider satisfies the 

notice and consent criteria of this 

paragraph (c) with respect to items or 

services furnished by the provider to a 

participant, beneficiary, or enrollee of a 

group health plan or group or individual 


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health insurance coverage, if the 

provider (or a participating health care 

facility on behalf on a nonparticipating 

provider)— 

(1) Provides to the participant, 

beneficiary, or enrollee a written notice 

in paper or, as practicable, electronic 

form, as selected by the individual, that 

contains the information required under 

paragraph (d) of this section, provided 

such written notice is provided: 

(i) In accordance with guidance 

issued by HHS, and in the form and 

manner specified in such guidance; 

(ii) With the consent document, and 

is provided physically separate from 

other documents and not attached to or 

incorporated into any other document; 

and 

(iii) To such participant, beneficiary, 

or enrollee— 

(A) Not later than 72 hours prior to 

the date on which the individual is 

furnished such items or services, in the 

case where the appointment to be 

furnished such items or services is 

scheduled at least 72 hours prior to the 

date on which the individual is to be 

furnished such items and services; or 

(B) On the date the appointment to be 

furnished such items or services is 

scheduled, in the case where the 

appointment is scheduled within 72 

hours prior to the date on which such 

items or services are to be furnished. 

Where an individual is provided the 

notice on the same date that the items 

or services are to be furnished, 

providers and facilities are required to 

provide the notice no later than 3 hours 

prior to furnishing items or services to 

which the notice and consent 

requirements apply. 

(2) Obtains from the participant, 

beneficiary, or enrollee the consent 

described in paragraph (e) of this 

section to be treated by the 

nonparticipating provider. An 

authorized representative may receive 

the notice on behalf of a participant, 

beneficiary, or enrollee, and may 

provide consent on behalf of the 

participant, beneficiary, or enrollee. For 

purposes of this section and § 149.410, 

an authorized representative is an 

individual authorized under State law 

to provide consent on behalf of the 

participant, beneficiary, or enrollee, 

provided that the individual is not a 

provider affiliated with the facility or an 

employee of the facility, unless such 

provider or employee is a family 

member of the participant, beneficiary, 

or enrollee. The consent must— 

(i) Be provided voluntarily, meaning 

the individual is able to consent freely, 

without undue influence, fraud, or 

duress; 

(ii) Be obtained in accordance with, 

and in the form and manner specified 

in, guidance issued by HHS; and 

(iii) Not be revoked, in writing, by the 

participant, beneficiary, or enrollee 

prior to the receipt of items and services 

to which the consent applies. 

(3) Provides a copy of the signed 

written notice and consent to the 

participant, beneficiary, or enrollee inperson or through mail or email, as 

selected by the participant, beneficiary, 

or enrollee. 

(d) Information required under 

written notice. The written notice 

described in paragraph (c)(1) of this 

section must be provided in the form 

and manner specified by HHS in 

guidance, and must— 

(1) State that the health care provider 

is a nonparticipating provider, with 

respect to the health plan or coverage. 

(2) Include the good faith estimated 

amount that such nonparticipating 

provider may charge the participant, 

beneficiary, or enrollee for the items and 

services involved (including any item or 

service that is reasonably expected to be 

furnished by the nonparticipating 

provider in conjunction with such items 

or services), including notification that 

the provision of the estimate or consent 

to be treated under paragraph (e) of this 

section does not constitute a contract 

with respect to the charges estimated for 

such items and services or a contract 

that binds the participant, beneficiary, 

or enrollee to be treated by that provider 

or facility. 

(3) Provide a statement that prior 

authorization or other care management 

limitations may be required in advance 

of receiving such items or services at the 

facility. 

(4) Clearly state that consent to 

receive such items and services from 

such nonparticipating provider is 

optional and that the participant, 

beneficiary, or enrollee may instead 

seek care from an available participating 

provider, with respect to the plan or 

coverage, as applicable, and that in such 

cases the cost-sharing responsibility of 

the participant, beneficiary, or enrollee 

would not exceed the responsibility that 

would apply with respect to such an 

item or service that is furnished by a 

participating provider, as applicable, 

with respect to such plan. 

(e) Consent described to be treated by 

a nonparticipating provider. The 

consent described in this paragraph (e), 

with respect to a participant, 

beneficiary, or enrollee of a group health 

plan or group or individual health 

insurance coverage who is to be 

furnished items or services by a 

nonparticipating provider, must be 

documented on a form specified by the 

Secretary, in consultation with the 

Secretary of Labor, through guidance 

and provided in accordance with such 

guidance, that must be signed by the 

participant, beneficiary, or enrollee 

before such items and services are 

furnished and that— 

(1) Acknowledges in clear and 

understandable language that the 

participant, beneficiary, or enrollee has 

been— 

(i) Provided with the written notice 

under paragraph (c) of this section, in 

the form selected by the participant, 

beneficiary, or enrollee. 

(ii) Informed that the payment of such 

charge by the participant, beneficiary, or 

enrollee might not accrue toward 

meeting any limitation that the plan or 

coverage places on cost sharing, 

including an explanation that such 

payment might not apply to an innetwork deductible or out-of-pocket 

maximum applied under the plan or 

coverage. 

(2) States that by signing the consent, 

the individual agrees to be treated by 

the nonparticipating provider and 

understands the individual may be 

balance billed and subject to costsharing requirements that apply to 

services furnished by the 

nonparticipating provider. 

(3) Documents the time and date on 

which the participant, beneficiary, or 

enrollee received the written notice 

described in paragraph (c) of this 

section and the time and date on which 

the individual signed the consent to be 

furnished such items or services by such 

nonparticipating provider. 

(f) Language access. (1) A 

nonparticipating provider (or the 

participating health care facility on 

behalf of the nonparticipating provider) 

must provide the individual with the 

choice to receive the written notice and 

consent document in any of the 15 most 

common languages in the State in which 

the applicable facility is located, except 

that the notice and consent document 

may instead be available in any of the 

15 most common languages in a 

geographic region that reasonably 

reflects the geographic region served by 

the applicable facility; and 

(2) If the individual’s preferred 

language is not among the 15 most 

common languages in which the 

nonparticipating provider (or the 

participating health care facility on 

behalf of the nonparticipating provider) 

makes the notice and consent document 

available and the individual cannot 

understand the language in which the 

notice and consent document are 

provided, the notice and consent criteria 

in paragraph (c) of this section are not 

met unless the nonparticipating 


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provider (or the participating health 

care facility on behalf of the 

nonparticipating provider) has obtained 

the services of a qualified interpreter to 

assist the individual with understanding 

the information contained in the notice 

and consent document. 

(g) Scope of consent. The consent 

described in paragraph (e) of this 

section will constitute consent only to 

the receipt of the information provided 

pursuant to this section and will not 

constitute a contractual agreement of the 

participant, beneficiary, or enrollee to 

any estimated charge or amount 

included in such information, or to be 

treated by that provider or facility. 

(h) Retention of certain documents. A 

participating health care facility (with 

respect to nonparticipating providers at 

such facility) that obtains from a 

participant, beneficiary, or enrollee of a 

group health plan or group or individual 

health insurance coverage a written 

consent in accordance with paragraph 

(e) of this section, with respect to 

furnishing an item or service to such an 

individual, must retain the written 

notice and consent for at least a 7-year 

period after the date on which the item 

or service is so furnished. If a 

nonparticipating provider obtains a 

signed consent from a participant, 

beneficiary, or enrollee, where the 

facility does not otherwise obtain the 

consent on behalf of the provider, the 

provider may either coordinate with the 

facility to retain the written notice and 

consent for a 7-year period, or the 

provider must retain the written notice 

and consent for a 7-year period. 

(i) Notification to plan or issuer. For 

each item or service furnished by a 

nonparticipating provider described in 

paragraph (a) of this section, the 

provider (or the participating facility on 

behalf of the nonparticipating provider) 

must timely notify the plan or issuer 

that the item or service was furnished 

during a visit at a participating health 

care facility, and, if applicable, provide 

to the plan or issuer a copy of the signed 

written notice and consent document 

described in paragraphs (c) and (e) of 

this section. In instances where, to the 

extent permitted by this section, the 

nonparticipating provider bills the 

participant, beneficiary, or enrollee 

directly, the provider may satisfy the 

requirement to notify the plan or issuer 

by including the notice with the bill to 

the participant, beneficiary, or enrollee. 

(j) Applicability date. The provisions 

of this section are applicable with 

respect to items and services furnished 

during a plan year (in the individual 

market, policy year) beginning on or 

after January 1, 2022. 

§ 149.430 Provider and facility disclosure 

requirements regarding patient protections 

against balance billing. 

(a) In general. Each health care 

provider and health care facility 

(including an emergency department of 

a hospital and an independent 

freestanding emergency department) 

must make publicly available, post on a 

public website of such provider or 

facility (if applicable), and provide to 

any individual who is a participant, 

beneficiary, or enrollee of a group health 

plan or group or individual health 

insurance coverage offered by a health 

insurance issuer and to whom the 

provider or facility furnishes items or 

services, the information described in 

paragraph (b) of this section regarding 

patient protections against balance 

billing, except as provided in 

paragraphs (e) and (f) of this section. A 

provider or facility must make the 

disclosures in accordance with the 

method and timing requirements set 

forth in paragraphs (c) and (d) of this 

section. 

(b) Content. The disclosures required 

under this section must include, in clear 

and understandable language, all the 

information described in this paragraph 

(b) (and may include any additional 

information that does not conflict with 

that information). 

(1) A statement that explains the 

requirements of and prohibitions 

applicable to the health care provider or 

health care facility under sections 

2799B–1 and 2799B–2 of the PHS Act 

and their implementing regulations in 

§§ 149.410 and 149.420; 

(2) If applicable, a statement that 

explains any State law requirements 

regarding the amounts such provider or 

facility may, with respect to an item or 

service, charge a participant, 

beneficiary, or enrollee of a group health 

plan or group or individual health 

insurance coverage offered by a health 

insurance issuer with respect to which 

such provider or facility does not have 

a contractual relationship, after 

receiving payment, if any, from the plan 

or coverage, respectively, for such item 

or service and any applicable costsharing payment from such participant, 

beneficiary, or enrollee; and 

(3) A statement providing contact 

information for the appropriate State 

and Federal agencies that an individual 

may contact if the individual believes 

the provider or facility has violated a 

requirement described in the notice. 

(c) Required methods for disclosing 

information. Health care providers and 

health care facilities must provide the 

disclosure required under this section as 

follows: 

(1) With respect to the required 

disclosure to be posted on a public 

website, the information described in 

paragraph (b) of this section, or a link 

to such information, must appear on a 

searchable homepage of the provider’s 

or facility’s website. A provider or 

facility that does not have its own 

website is not required to make a 

disclosure under this paragraph (c)(1). 

(2) With respect to the required 

disclosure to the public, a provider or 

facility must make public the 

information described in paragraph (b) 

of this section on a sign posted 

prominently at the location of the 

provider or facility. A provider that does 

not have a publicly accessible location 

is not required to make a disclosure 

under this paragraph (c)(2). 

(3) With respect to the required 

disclosure to individuals who are 

participants, beneficiaries, or enrollees 

of a group health plan or group or 

individual health insurance coverage 

offered by a health insurance issuer, a 

provider or facility must provide the 

information described in paragraph (b) 

of this section in a one-page (doublesided) notice, using print no smaller 

than 12-point font. The notice must be 

provided in-person or through mail or 

email, as selected by the participant, 

beneficiary, or enrollee. 

(d) Timing of disclosure to 

individuals. A health care provider or 

health care facility is required to 

provide the notice to individuals who 

are participants, beneficiaries, or 

enrollees of a group health plan or 

group or individual health insurance 

coverage offered by a health insurance 

issuer no later than the date and time on 

which the provider or facility requests 

payment from the individual, or with 

respect to an individual from whom the 

provider or facility does not request 

payment, no later than the date on 

which the provider or facility submits a 

claim to the group health plan or health 

insurance issuer. 

(e) Exceptions. A health care provider 

is not required to make the disclosures 

required under this section— 

(1) If the provider does not furnish 

items or services at a health care facility, 

or in connection with visits at health 

care facilities; or 

(2) To individuals to whom the 

provider furnishes items or services, if 

such items or services are not furnished 

at a health care facility, or in connection 

with a visit at a health care facility. 

(f) Special rule to prevent unnecessary 

duplication with respect to health care 

providers. To the extent a provider 

furnishes an item or service covered 

under the plan or coverage at a health 

care facility (including an emergency 


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department of a hospital or independent 

freestanding emergency department), 

the provider satisfies the requirements 

of paragraphs (c)(2) and (3) of this 

section if the facility makes the 

information available, in the required 

form and manner, pursuant to a written 

agreement. Accordingly, if a provider 

and facility enter into a written 

agreement under which the facility 

agrees to make the information required 

under this section available on a sign 

posted prominently at the facility and to 

provide the one-page notice to 

individuals in compliance with this 

section, and the facility fails to do so, 

then the facility, but not the provider, 

violates the disclosure requirements of 

this section. 

(g) Applicability date. The provisions 

of this section are applicable beginning 

on January 1, 2022. 

§ 149.440 Balance billing in cases of air 

ambulance services. 

(a) In general. In the case of a 

participant, beneficiary, or enrollee with 

benefits under a group health plan or 

group or individual health insurance 

coverage offered by a health insurance 

issuer who is furnished air ambulance 

services (for which benefits are available 

under such plan or coverage) from a 

nonparticipating provider of air 

ambulance services, with respect to 

such plan or coverage, the provider 

must not bill, and must not hold liable, 

the participant, beneficiary, or enrollee 

for a payment amount for the air 

ambulance services furnished by the 

provider that is more than the costsharing amount for such service (as 

determined in accordance with 26 CFR 

54.9817–1T(b)(1) and (2), 29 CFR 

2590.717–1(b)(1) and (2), and 

§ 149.130(b)(1) and (2), as applicable). 

(b) Applicability date. The provisions 

of this section are applicable with 

respect to air ambulance services 

furnished during a plan year (in the 

individual market, policy year) 

beginning on or after January 1, 2022. 

§ 149.450 Complaint process for balance 

billing regarding providers and facilities. 

(a) Scope and definitions—(1) Scope. 

This section establishes a process for 

HHS to receive and resolve complaints 

regarding information that a health care 

provider, provider of air ambulance 

services, or health care facility may be 

failing to meet the requirements under 

subpart E of this part, which may 

warrant an investigation. 

(2) Definitions. In this section— 

(i) Complaint means a 

communication, written, or oral, that 

indicates there has been a potential 

violation of the requirements under this 

subpart, whether or not a violation 

actually occurred. 

(ii) Complainant means any 

individual, or their authorized 

representative, who files a complaint as 

defined in paragraph (a)(2)(i) of this 

section. 

(b) Complaints process. (1) HHS will 

consider the date a complaint is filed to 

be the date upon which HHS receives an 

oral, written, or electronic statement 

that identifies information about the 

complaint sufficient to identify the 

parties involved and the action or 

inaction complained of. 

(2) HHS will notify complainants, by 

oral or written means, of receipt of the 

complaint no later than 60 business 

days after the complaint is received. 

HHS will include a response 

acknowledging receipt of the complaint, 

notifying the complainant of their rights 

and obligations under the complaints 

process, and describing the next steps of 

the complaints resolution process. HHS 

may request additional information that 

may be needed to process the complaint 

as part of the response. Such additional 

information may include: 

(i) Health care provider, air 

ambulance provider, or health care 

facility bills; 

(ii) Health care provider, air 

ambulance provider, or health care 

facility network status; 

(iii) Information regarding the 

participant’s, beneficiary’s, or enrollee’s 

health care plan or health insurance 

coverage; 

(iv) Information to support a 

determination regarding whether the 

service was an emergency service or 

non-emergency service; 

(v) Documents regarding the facts in 

the complaint in the possession of, or 

otherwise attainable by, the 

complainant; or 

(vi) Any other information HHS needs 

to make a determination of facts for an 

investigation. 

(3) HHS will make reasonable efforts 

consistent with agency practices to 

notify the complainant of the outcome 

of the complaint after the submission is 

processed through appropriate methods 

as determined by HHS. A complaint is 

considered processed after HHS has 

reviewed the complaint and 

accompanying information and made an 

outcome determination. Based on the 

nature of the complaint, HHS may— 

(i) Refer the complainant to another 

appropriate Federal or State resolution 

process; 

(ii) Notify the complainant and make 

reasonable efforts to refer the 

complainant to the appropriate State or 

Federal regulatory authority if HHS 

receives a complaint where another 

entity has enforcement jurisdiction over 

the health care provider, air ambulance 

provider or health care facility; 

(iii) Refer the health care provider, air 

ambulance provider or health care 

facility for an investigation for 

enforcement action under 45 CFR part 

150; or 

(iv) Provide the complainant with an 

explanation of resolution and any 

corrective action taken. 

PART 156—HEALTH INSURANCE 

ISSUER STANDARDS UNDER THE 

AFFORDABLE CARE ACT, INCLUDING 

STANDARDS RELATED TO 

EXCHANGES 

■ 19. The authority citation for part 156 

continues to read as follows: 

Authority: 42 U.S.C. 18021–18024, 18031– 

18032, 18041–18042, 18044, 18054, 18061, 

18063, 18071, 18082, and 26 U.S.C. 36B. 

■ 20. Section 156.155 is amended by: 

■ a. Revising paragraph (a)(3); 

■ b. Redesignating paragraph (c) as 

paragraph (d); and 

■ c. Adding a new paragraph (c). 

The revision and addition read as 

follows: 

§ 156.155 Enrollment in catastrophic 

plans. 

(a) * * * 

(3) Provides coverage of the essential 

health benefits under section 1302(b) of 

the Affordable Care Act, except that the 

plan provides no benefits for any plan 

year (except as provided in paragraphs 

(a)(4), (b), and (c) of this section) until 

the annual limitation on cost sharing in 

section 1302(c)(1) of the Affordable Care 

Act is reached. 

* * * * * 

(c) Coverage to prevent surprise 

medical bills. A catastrophic plan must 

provide benefits as required under 

sections 2799A–1 and 2799A–2 of the 

Public Health Service Act and their 

implementing regulations in §§ 149.110, 

149.120, and 149.130 or any applicable 

State law providing similar protections 

to individuals, and will not violate 

paragraph (a)(3) of this section solely 

because of the provision of such benefits 

before the annual limitation on cost 

sharing is reached. 

* * * * * 

[FR Doc. 2021–14379 Filed 7–6–21; 4:15 pm] 

BILLING CODE 6523–63–P; 4830–01–P; 4510–29–P; 

4120–01–P 


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