51730 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

OFFICE OF PERSONNEL 

MANAGEMENT 

5 CFR Part 890 

RIN 3206–AO28 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 54 

[REG–114676–21] 

RIN 1545–BQ15 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

29 CFR Part 2590 

RIN 1210–AC08 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

45 CFR Parts 144, 148, 149, and 150 

[CMS–9907–P] 

RIN 0938–AU61 

Requirements Related to Air 

Ambulance Services, Agent and 

Broker Disclosures, and Provider 

Enforcement 

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: Proposed rules. 

SUMMARY: This document sets forth 

proposed rules implementing certain 

provisions of Title I (No Surprises Act) 

and Title II (Transparency) of Division 

BB of the Consolidated Appropriations 

Act, 2021 (CAA). These proposed rules 

would amend and add provisions to 

existing rules under the Internal 

Revenue Code (Code), the Employee 

Retirement Income Security Act 

(ERISA), the Public Health Service Act 

(PHS Act), and the Federal Employees 

Health Benefits (FEHB) Act. These 

proposed rules would implement 

certain provisions of the No Surprises 

Act that would increase transparency by 

requiring group health plans and health 

insurance issuers in the group and 

individual markets, and FEHB carriers, 

to submit certain information about air 

ambulance services to the Secretaries of 

Health and Human Services (HHS), 

Labor, and the Treasury, and the 

Director of the Office of Personnel 

Management, as applicable, and by 

requiring providers of air ambulance 

services to submit certain information to 

the Secretaries of HHS and 

Transportation. These proposed rules 

also include HHS-only proposed rules 

that would increase transparency by 

requiring a health insurance issuer 

offering individual health insurance 

coverage or short-term, limited-duration 

insurance to disclose to policyholders 

and to report to HHS any direct or 

indirect compensation provided by the 

issuer to an agent or broker associated 

with enrolling individuals in such 

coverage. These proposed rules would 

also provide the process by which HHS 

would investigate complaints and 

potential violations of PHS Act 

provisions and, if warranted, take 

enforcement action, including the 

imposition of civil money penalties, 

against providers and facilities, 

including providers of air ambulance 

services. These proposed rules would 

amend existing regulations to clarify the 

process to investigate complaints and 

potential violations of the PHS Act and 

impose civil money penalties against 

plans and issuers. These proposed rules 

would also establish the process by 

which HHS would impose civil money 

penalties if a provider of air ambulance 

services fails to submit some or all 

required data to HHS. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided below, by 

October 18, 2021. 

ADDRESSES: In commenting, please refer 

to file code CMS–9907–P. 

Comments, including mass comment 

submissions, must be submitted in one 

of the following three ways (please 

choose only one of the ways listed): 

1. Electronically. You may submit 

electronic comments on this regulation 

to https://www.regulations.gov. Follow 

the ‘‘Submit a comment’’ instructions. 

2. By regular mail. You may mail 

written comments to the following 

address ONLY: Centers for Medicare & 

Medicaid Services, Department of 

Health and Human Services, Attention: 

CMS–9907–P, P.O. Box 8016, Baltimore, 

MD 21244–8016. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

3. By express or overnight mail. You 

may send written comments to the 

following address ONLY: Centers for 

Medicare & Medicaid Services, 

Department of Health and Human 

Services, Attention: CMS–9907–P, Mail 

Stop C4–26–05, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: For 

matters related to air ambulance 

reporting: Padma Babubhai Shah, Office 

of Personnel Management, (202) 606– 

4056; Kari DiCecco, Internal Revenue 

Service, Department of the Treasury, 

(202) 317–5500; Matthew Meidell or 

Pinar Shapiro, Employee Benefits 

Security Administration, Department of 

Labor, (202) 693–8335; Christina 

Whitefield, Centers for Medicare & 

Medicaid Services, Department of 

Health and Human Services, (301) 492– 

4172. For matters related to agent and 

broker disclosures under Part 148: 

Adam Wheeler, (410) 786–3942. 

For matters related to enforcement 

under Part 150: Judah Katz, (410) 786– 

3879 or Lisa Cuozzo, (410) 786–1746. 

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://www.regulations.gov. Follow the 

search instructions on that website to 

view public comments. The Centers for 

Medicare & Medicaid Services (CMS) 

will not post on Regulations.gov public 

comments that make threats to 

individuals or institutions or suggest 

that the individual will take actions to 

harm the individual. CMS continues to 

encourage individuals not to submit 

duplicative comments. We will post 

acceptable comments from multiple 

unique commenters even if the content 

is identical or nearly identical to other 

comments. 

I. Background 

A. Legislative and Regulatory Overview 

Title I of the Health Insurance 

Portability and Accountability Act of 

1996 (HIPAA) added Title XXVII to the 

Public Health Service Act (PHS Act) to 

establish various reforms to the group 

and individual health insurance 

markets. The Patient Protection and 

Affordable Care Act, Public Law 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 ACA reorganized, 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51731 

1Public Law 115–254. 

2 ‘‘Meeting Summary, Second Meeting of the 

AAPB Advisory Committee,’’ U.S. Department of 

Transportation, Air Ambulance and Patient Billing 

Advisory Committee, May 27–28, 2021, 

Washington, DC pp. 15–17. Available at: https://

www.transportation.gov/sites/dot.gov/files/2021-07/ 

AAPB%20Second%20Meeting%20Minutes.pdf. 

amended, and added to the provisions 

of Part A of Title XXVII of the PHS Act 

relating to group health plans and 

health insurance issuers in the group 

and individual markets. The term 

‘‘group health plan’’ includes both 

insured and self-insured group health 

plans. The ACA added section 

9815(a)(1) to the Internal Revenue Code 

(Code) and section 715(a)(1) to the 

Employee Retirement Income Security 

Act (ERISA) to incorporate the 

provisions of Part A of Title XXVII of 

the PHS Act into the Code and ERISA, 

and made 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 thereby 

incorporated into the Code and ERISA. 

The Consolidated Appropriations Act, 

2021 (CAA) was enacted on December 

27, 2020 and includes Title I (No 

Surprises Act) and Title II 

(Transparency) in Division BB. The 

CAA added provisions that apply to 

plans and issuers offering group or 

individual health insurance coverage in 

chapter 100 of the Code, in part 7 of 

ERISA, and in a new Part D of Title 

XXVII of the PHS Act. The CAA also 

amended the Federal Employees Health 

Benefits (FEHB) Act, 5 U.S.C. 8901, et 

seq., by adding a new subsection (p) to 

5 U.S.C. 8902 that requires each contract 

with an FEHB carrier to require the 

carrier to comply with requirements 

described in certain provisions of the 

Code, ERISA, and the PHS Act in the 

same manner as those provisions apply 

to a group health plan or health 

insurance issuer offering group or 

individual health insurance coverage. 

The CAA provisions that apply to 

providers, facilities, and providers of air 

ambulance services, such as 

requirements related to cost sharing, 

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. 

Section 106(a) of the No Surprises Act 

requires providers of air ambulance 

services to report certain information to 

the Secretaries of HHS and 

Transportation. Section 106(b) of the No 

Surprises Act added parallel provisions 

at section 9823 of the Code, section 723 

of ERISA, and section 2799A–8 of the 

PHS Act. These provisions include 

requirements for plans and issuers to 

report claims and other information 

regarding air ambulance services and 

providers of air ambulance services. 

The Director of the Office of 

Personnel Management (OPM) is of the 

view that the collection of FEHB plan 

air ambulance claims data is necessary 

and appropriate for a more complete 

understanding of air ambulance services 

provided across the industry. Further, 

the OPM Director is of the view that this 

data would inform OPM for purposes of 

enforcing the protections provided 

under 5 U.S.C. 8902(p) and for the 

appropriate administration and 

oversight of FEHB plans. 

Sections 106(a) and (b) of the No 

Surprises Act impose these air 

ambulance data reporting requirements 

for 2 years. Section 106(c) of the No 

Surprises Act further requires HHS, in 

consultation with the Secretary of 

Transportation, to issue a 

comprehensive public report 

summarizing the data and providing an 

assessment of the state and certain 

aspects and characteristics of the air 

ambulance market. Section 106(e) of the 

No Surprises Act provides for the 

imposition of civil money penalties of 

not more than $10,000 on providers of 

air ambulance services for failure to 

submit required data. Section 106(e)(3) 

specifies that certain provisions of 

section 1128A of the Social Security Act 

(SSA) shall apply to a civil money 

penalty under section 106(e) of the No 

Surprises Act in the same manner as 

such provisions apply to a penalty or 

proceeding under section 1128A of the 

SSA. In addition, section 418 of the 

Federal Aviation Administration (FAA) 

Reauthorization Act of 2018 1 directs the 

Secretary of Transportation, in 

consultation with HHS, to form an 

Advisory Committee on Air Ambulance 

and Patient Billing (Advisory 

Committee). Section 106(d) of the No 

Surprises Act directs HHS, in 

consultation with the Secretary of 

Transportation, to take into 

consideration (as applicable and to the 

extent feasible) any recommendations 

included in the Advisory Committee’s 

report. 

The charter of the Advisory 

Committee allowed for the formation of 

subcommittees to perform specific 

assignments. The Advisory Committee 

formed three subcommittees, which 

included a subcommittee on the 

Prevention of Balance Billing. At its 

second full Committee meeting in May 

2021, the Advisory Committee 

recommended the collection of eight 

specific data elements from providers of 

air ambulance services: (1) Average cost 

per trip; (2) air ambulance base rates 

and patient-loaded statute mileage rates; 

(3) ancillary fees for specialty services, 

like neonatal, cardiac, and ‘‘other’’ (for 

example, specialized medicines like 

snakebites in rural areas); (4) 

reimbursement data aggregated by payor 

type (Medicare, Medicaid, self-insured, 

private insurance) and per transport, 

based on median rate and zip code, as 

well as further identifying data 

regarding private insurance by provider 

type (hospital-sponsored program, 

municipality-sponsored program, 

hospital independent partnership 

(hybrid) program, or independent 

program); (5) alternate revenue sources 

(for example, subsidies or membership 

programs) broken down per transport 

for reporting purposes; (6) volume of 

transports, segregated by aircraft type 

(fixed wing and rotary wing) and takeoff 

zip code for government purposes, or for 

public use when aggregated with other 

data; (7) market share for air transport, 

obtained from the FAA certificate 

holder and identifying the certificate 

holder’s parent company; and (8) market 

share for health care, by looking at the 

program type for the FAA certificate 

holder.2 Section 9823 of the Code, 

section 723 of ERISA, and section 

2799A–8 of the PHS Act require 

information to be reported jointly to 

HHS, the Department of Labor (DOL), 

and the Department of the Treasury 

(collectively, the Departments). 

Section 106(d) of the No Surprises Act 

requires HHS, in consultation with the 

Secretary of Transportation, to 

undertake notice and comment 

rulemaking to specify the form and 

manner in which plans and issuers must 

submit this information. 

The CAA amended the FEHB Act to 

require that protections from air 

ambulance surprise billing must be 

offered by carriers in the same manner 

as those protections apply under section 

9817 of the Code, section 717 of ERISA, 

and section 2799B–2 of the PHS Act and 

to require that protections from surprise 

billing by providers of air ambulance 

services with respect to FEHB enrollees 

apply in the same manner as those 

protections apply under section 2799B– 

5 of the PHS Act. 

The CAA also amended Title XXVII of 

the PHS Act to add section 2746, which 

requires a health insurance issuer 

offering individual health insurance 

coverage or short-term, limited-duration 

insurance to disclose to enrollees in 

such coverage and to report annually to 

HHS the direct or indirect compensation 

provided by the issuer to an agent or 

broker associated with enrolling 

51732 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

3Also see section 2761 of the PHS Act, which 

establishes a parallel framework for enforcement of 

the individual market requirements contained in 

Part B of Title XXVII of the PHS Act. 

4Requirements Related to Surprise Billing; Part I, 

86 FR 36872, (July 13, 2021). Public comments on 

this rule are due by September 7, 2021. 

individuals in such coverage. Section 

2746(d) directs HHS to finalize, through 

notice and comment rulemaking, the 

timing, form, and manner in which 

issuers must make these disclosures to 

consumers and submit reports to HHS. 

These new statutory requirements are 

applicable beginning December 27, 

2021. 

Section 2723(b) of the PHS Act, as 

amended by the CAA, authorizes HHS 

to impose civil money penalties as a 

means of enforcing the individual and 

group market requirements contained in 

Part A and Part D of Title XXVII of the 

PHS Act with respect to health 

insurance issuers when a state fails to 

substantially enforce these provisions, 

as well as with respect to group health 

plans that are non-Federal governmental 

plans.3 Section 2799B–4 of the PHS Act, 

as added by section 104 of the No 

Surprises Act, establishes a similar 

framework for HHS’s enforcement 

authority over providers and facilities, 

including providers of air ambulance 

services, in states that fail to 

substantially enforce the requirements 

of Part E of Title XXVII of the PHS Act, 

as added by the CAA. This provision 

also authorizes HHS to impose civil 

money penalties of up to $10,000 per 

violation on providers and facilities, 

including providers of air ambulance 

services, that fail to comply with the 

applicable PHS Act requirements in 

such states. It further provides that 

certain provisions of section 1128A of 

the SSA shall apply to a civil money 

penalty or assessment under section 

2799B–4 of the PHS Act in the same 

manner as such provisions apply to a 

penalty, assessment, or proceeding 

under subsection (a) of section 1128A of 

the SSA. 

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 independent dispute resolution 

(IDR) process (sections 103 and 105 of 

the No Surprises Act) and patient 

protections through transparency and 

the patient-provider dispute resolution 

process (section 112 of the No Surprises 

Act). 

On July 13, 2021, the Departments 

and OPM issued interim final rules 

entitled Requirements Related to 

Surprise Billing; Part I,4 which generally 

apply to group health plans and health 

insurance issuers offering group or 

individual health insurance coverage 

(including grandfathered health plans) 

with respect to plan years (in the 

individual market, policy years) 

beginning on or after January 1, 2022; 

FEHB health benefits plans with respect 

to contract years beginning on or after 

January 1, 2022; and health care 

providers and facilities, and providers 

of air ambulance services beginning on 

January 1, 2022 (July 2021 interim final 

rules). The July 2021 interim final rules 

implement sections 9816(a)–(b) and 

9817(a) of the Code; sections 716(a)–(b) 

and 717(a) of ERISA; sections 2799A– 

1(a)–(b), 2799A–2(a), 2799B–1, 2799B– 

2, 2799B–3, and 2799B–5 of the PHS 

Act; and 5 U.S.C. 8902(p), to protect 

consumers from surprise medical bills 

for emergency services, air ambulance 

services furnished by nonparticipating 

providers of air ambulance services, and 

non-emergency services furnished by 

nonparticipating providers at 

participating facilities in certain 

circumstances. 

Among other requirements, the July 

2021 interim final rules require 

emergency services to be covered 

without any prior authorization, 

without regard to whether the health 

care provider or facility 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. With respect to 

emergency services furnished by 

nonparticipating providers or facilities, 

air ambulance services furnished by 

nonparticipating providers of air 

ambulance services, and non-emergency 

services furnished by nonparticipating 

providers at certain participating 

facilities, the July 2021 interim final 

rules generally limit cost sharing for 

out-of-network services to in-network 

levels, require such cost sharing to 

count toward any in-network 

deductibles and out-of-pocket 

maximums, and prohibit balance billing 

in certain circumstances. 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). 

Division BB of 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); 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 rules 

regarding some of these provisions 

might not be issued until after January 

1, 2022. The Departments note that any 

such rulemaking to fully implement 

these provisions would 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. 

B. Stakeholder Consultation and Input 

The Departments consulted with 

stakeholders on policies related to 

Division BB of the CAA, including air 

ambulance data collection, disclosure 

and reporting of agent and broker 

compensation, and enforcement of the 

PHS Act. The Departments held several 

listening sessions with consumers, 

health care providers, facilities, 

providers of air ambulance services, 

employers, agents, brokers, health plans 

and health insurance issuers, advocacy 

groups, and the actuarial community to 

gather public input. The Departments 

also solicited input from state 

representatives on numerous relevant 

topics and consulted with stakeholders 

through regular meetings with the 

National Association of Insurance 

Commissioners (NAIC), and regular 

contact with state regulators, issuers, 

trade groups, consumer advocates, 

employers, and other interested parties. 

The Departments considered all public 

input received as the Departments 

developed the policies in these 

proposed rules and welcome additional 

public comment as part of these 

proposed rules. 

C. Structure of Proposed Rules 

The regulations outlined in these 

proposed rules would be codified in 5 

CFR part 890; 26 CFR part 54; 29 CFR 

part 2590; and 45 CFR parts 144, 148, 

149, and 150. 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51733 

5Section 106(b) of the No Surprises Act amends 

part D of Title XXVII of the PHS Act by adding new 

section 2799A–8. As such, the enforcement 

provisions under PHS Act section 2723 and 45 CFR 

part 150 extend to PHS Act section 2799A–8 air 

ambulance data reporting requirements on issuers 

and non-Federal governmental group health plans. 

Section 106(a) of the No Surprises Act is codified 

in the United States Code as a note to PHS Act 

section 2799A–8. 

6Air Ambulance: Available Data Show PrivatelyInsured Patients Are at Financial Risk. GAO–19– 

292 (March 2019). 

7Cooper 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. 

8See, 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/. 

9Air Ambulance: Available Data Show PrivatelyInsured Patients Are at Financial Risk. GAO–19– 

292 (March, 2019). 

10Air Ambulance: Data Collection and 

Transparency Needed to Enhance DOT Oversight. 

GAO–17–637 (July 27, 2017). 

11 49 U.S.C. 41713(b). 

12A provider of air ambulance services is a 

covered ‘‘air carrier’’ if it has economic authority 

from the Department of Transportation to provide 

interstate air transportation. Most providers of air 

ambulance services have such authority under the 

Continued 

The proposed changes to 45 CFR part 

144 would make technical and 

conforming amendments regarding the 

purpose of part 150. 

The proposed changes to 45 CFR part 

148 would set forth requirements for 

health insurance issuers offering 

individual health insurance coverage or 

short-term, limited-duration insurance 

to disclose to policyholders information 

regarding direct and indirect 

compensation provided by the issuer to 

an agent or broker associated with 

enrolling individuals in such coverage. 

The proposed amendments to 45 CFR 

part 148 also set forth proposed 

requirements related to the annual 

reports that health insurance issuers 

offering individual health insurance 

coverage or short-term, limited-duration 

insurance would be required to submit 

to HHS regarding the direct and indirect 

compensation paid to agents and 

brokers. In addition, these proposed 

rules would make technical and 

conforming amendments regarding the 

basis, purpose, and scope of 45 CFR part 

148. 

The proposed changes to 45 CFR part 

149 would require plans, issuers, and 

providers of air ambulance services to 

submit to HHS certain data regarding air 

ambulance services. Proposed rules 

under 26 CFR 54.9823–1 and 29 CFR 

2590.723 would provide that group 

health plans and health insurance 

issuers offering group health insurance 

coverage that satisfy the requirements 

under 45 CFR part 149 that implement 

section 2799A–8 of the PHS Act would 

be treated as satisfying the parallel 

requirements under section 9823 of the 

Code and section 723 of ERISA. The 

proposed change to 5 CFR part 890 

would require FEHB carriers to comply 

with the requirements of 45 CFR 

149.230 with respect to an FEHB plan 

in the same manner as such provisions 

apply to a group health plan or health 

insurance issuer offering group or 

individual health insurance coverage. 

OPM would coordinate with HHS to 

receive FEHB air ambulance services 

data. 

The proposed changes to 45 CFR part 

150 would make procedural changes to 

the process HHS utilizes to investigate 

possible violations of the PHS Act, 

including proposed amendments to 

clarify the process to investigate 

complaints and potential violations of 

the PHS Act and to impose civil money 

penalties against non-Federal 

governmental plans and issuers of group 

or individual health insurance coverage. 

The proposed changes would also set 

forth the process for imposing civil 

money penalties on providers and 

facilities, including providers of air 

ambulance services, for failure to 

comply with 45 CFR part 149 and 

failure to provide data required in 

section 106(a) of the No Surprises Act. 

II. Provisions of the Proposed Rules on 

Reporting Requirements Regarding Air 

Ambulance Services—Departments of 

HHS, Labor, and the Treasury 

A. In General 

These proposed rules propose 

requirements related to data collection 

from providers of air ambulance 

services, as required by section 106(a) of 

the No Surprises Act, and from plans 

and issuers offering group or individual 

health insurance coverage, as required 

by section 9823 of the Code, section 723 

of ERISA, and section 2799A–8 of the 

PHS Act, as added by section 106(b) of 

the No Surprises Act. 

These proposed rules also include an 

HHS-only proposed rule that sets forth 

civil money penalties specified in 

section 106(e) of the No Surprises Act 

that would apply to providers of air 

ambulance services for failure to submit 

data as required under section 106(a) of 

the No Surprises Act.5

Air ambulance services frequently 

result in surprise medical bills due to 

individuals’ inabilities to select an innetwork provider of air ambulance 

services when faced with an urgent 

medical situation. Because of low 

network participation rates by providers 

of air ambulance services, individuals 

are also unable to avoid potential higher 

cost sharing and balance billing by outof-network providers. A 2019 study by 

the Government Accountability Office 

(GAO) analyzed data from 2017 and 

found that 69 percent of air ambulance 

transports of privately-insured patients 

were out-of-network.6

When individuals are unable to avoid 

providers or providers of air ambulance 

services that are not in their plan’s 

network, it raises health care costs and 

exposes individuals to financial risk.7

The ability to balance bill is often used 

as leverage by providers to obtain higher 

in-network payments, which results in 

higher premiums, higher cost sharing 

for consumers, and overall increased 

health care expenditures.8 Studies have 

shown that surprise medical bills can be 

substantial, including with respect to air 

ambulance services. The GAO found 

that for privately-insured patients, the 

median price charged by providers of air 

ambulance services was about $36,400 

for a rotary-wing transport and $40,600 

for a fixed-wing transport in 2017.9 In 

an earlier study,10 the GAO noted that 

there is no national data on balance 

billing and the extent to which 

providers of air ambulance services 

have contracts with health insurance 

companies. Some states have attempted 

to collect data on balance billing. The 

GAO study stated that a Michigan state 

review of 19 cases of balance billing for 

air ambulance services between 2013 

and 2016 showed an average balance 

bill of $31,000. Data on cases 

investigated and closed by the Maryland 

Insurance Administration between 

January 2014 and April 2018 showed 

that the amount of balance bills for air 

ambulance services ranged from $12,300 

to $52,000. 

Although some states have enacted 

laws to regulate the billing practices of 

providers of air ambulance services, 

many of these efforts have been 

unsuccessful due to a preemption 

provision in the Airline Deregulation 

Act of 1978 (ADA). The ADA states, in 

relevant part, ‘‘. . . a State, political 

subdivision of a State, or political 

authority of at least two 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.’’ 11

Assuming that a provider of air 

ambulance services is an ‘‘air carrier’’ 

covered by this provision, as is 

typical,12 the provision preempts state 

51734 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

provisions of 14 CFR part 298. See, for example, 

Scarlett v. Air Methods Corp., 922 F.3d 1053 (10th 

Cir. 2019); Air Evac EMS v. Cheatham, 910 F.3d 751 

(4th Cir. 2018). 13See, for example, Guardian Flight LLC v. 

Godfread, 991 F.3d 916, 921 (8th Cir. 2021) 

(holding that ADA preempted state law prohibiting 

out-of-network providers of air ambulance services 

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 providers of air ambulance 

services from collecting more than amount 

specified in fee schedule). 

14 In addition, FEHB contract terms preempt state 

law in accordance with 5 U.S.C. 8902(m)(1). 15See Air Ambulance: Data Collection and 

Transparency Needed to Enhance DOT Oversight. 

GAO–17–637 (July 27, 2017). 

16Air Ambulance and Patient Billing Advisory 

Committee’s Subcommittee on Prevention of 

Balance Billing, ‘‘A Report on the Prevention of 

Balance Billing’’, January 2021, DOT–OST–2018– 

0206–0026_attachment_1. At its second full 

committee meeting in May 2021, the Advisory 

Committee recommended the collection of eight 

specific data elements from providers of air 

ambulance services. See section I.A of the 

preamble. The Committee’s final report containing 

this recommendation had yet to be produced at the 

time this rulemaking was published. 

17OPM proposes to authorize and require FEHB 

carriers to submit air ambulance data to HHS. OPM 

will coordinate with HHS to receive FEHB air 

ambulance services data. 

laws that would limit the amount of 

payment that the provider of air 

ambulance services would otherwise be 

entitled to receive.13 Even within states 

that have enacted protections against 

surprise billing, state insurance 

regulations typically apply only to 

health insurance coverage, as ERISA 

generally preempts state laws that 

would otherwise regulate self-insured 

group health plans sponsored by private 

employers.14 Finally, states are limited 

in their ability to address surprise bills 

that involve an out-of-state provider, 

including an out-of-state provider of air 

ambulance services. 

As states, the Federal Government, 

oversight agencies, and advocacy groups 

have examined the issue of air 

ambulance services and balance billing, 

it has become clear that there is a lack 

of comprehensive, national data on air 

ambulance costs, transports, and 

contractual arrangements between 

providers of air ambulance services and 

plans and issuers. In its 2017 report, the 

GAO recommended that the Federal 

Government assess available data to 

determine what additional information 

would be needed to address future 

concerns regarding unfair or deceptive 

practices.15 In addition, section 418 of 

the FAA Reauthorization Act of 2018 

directed the Secretary of Transportation, 

in consultation with HHS, to form an 

Advisory Committee on Air Ambulance 

and Patient Billing (Advisory 

Committee). In January 2021, the 

Advisory Committee’s subcommittee on 

the Prevention of Balance Billing 

recommended to the full Advisory 

Committee the collection of data to ‘‘(a) 

improve understanding of the air 

ambulance industry by policymakers, 

(b) increase transparency of market 

conditions impacting air ambulance 

services, and (c) indirectly improve 

contract negotiation between payors and 

air ambulance providers and 

suppliers.’’ 16

Section 106 of the No Surprises Act 

takes important steps to increase 

transparency regarding air ambulance 

services. Specifically, section 106(a) of 

the No Surprises Act requires providers 

of air ambulance services to submit 

certain data to the Secretaries of HHS 

and Transportation. Section 106(b) of 

the No Surprises Act requires plans and 

issuers to submit certain data on air 

ambulance services to the Secretaries of 

HHS, DOL, and the Treasury, through 

section 9823 of the Code, section 723 of 

ERISA and section 2799A–8 of the PHS 

Act. Section 106(d) of the No Surprises 

Act requires HHS, in consultation with 

the Secretary of Transportation, to 

specify through notice and comment 

rulemaking, the form and manner in 

which the reports described under 

section 106(a) of the No Surprises Act 

(regarding reporting by providers of air 

ambulance services) and section 9823 of 

the Code, section 723 of ERISA, and 

section 2799A–8 of the PHS Act 

(regarding reporting by plans and 

issuers) must be submitted to such 

Secretaries. Therefore, in these 

proposed rules, HHS proposes 

amendments to 45 CFR part 149 that 

specify the form and manner of these 

reports. In addition, the Department of 

the Treasury and DOL propose to add 26 

CFR 54.9823–1 and 29 CFR 2590.723 to 

specify that group health plans and 

health insurance issuers offering group 

health insurance coverage would satisfy 

the requirements under section 9823 of 

the Code and section 723 of ERISA, 

respectively, by submitting a report to 

HHS that satisfies the requirements of 

45 CFR 149.230. In the interest of 

burden reduction and efficiency, the 

Departments propose that the required 

information reporting by group health 

plans and health insurance issuers 

offering group and individual health 

insurance coverage, together with the 

required information reporting by FEHB 

carriers,17 would be satisfied through 

reporting to HHS. 

B. Basis and Scope (45 CFR 149.10) 

HHS proposes to amend 45 CFR 

149.10(a) to add a reference to section 

106(a) of the No Surprises Act, which 

requires data reporting by providers of 

air ambulance services, to the basis of 

part 149. 

C. Applicability (45 CFR 149.20) 

HHS proposes to amend 45 CFR 

149.20 to include a reference to the new 

subpart C, which under these proposed 

rules would include data submission 

requirements for plans and issuers. See 

section II.F. of the preamble for 

discussion of the applicability of the 

proposed rules regarding data 

submission requirements for providers 

of air ambulance services. 

D. Definitions (45 CFR 149.30) 

HHS proposes to amend 45 CFR 

149.30 by adding definitions relevant to 

data submission requirements for 

providers of air ambulance services and 

plans and issuers. The Departments 

propose to define an air ambulance base 

as a site from which a provider of air 

ambulance services operates to provide 

air ambulance services. The 

Departments propose to define a 

National Provider Identifier (NPI) by 

referencing the definition in 45 CFR 

162.406. The Departments seek 

comment on these proposed definitions. 

E. Reporting Requirements for Plans and 

Issuers Regarding Air Ambulance 

Services (45 CFR 149.230) 

HHS proposes to amend part 149 by 

adding 45 CFR 149.230 to subpart C to 

describe the data reporting requirements 

for plans and issuers. Proposed 45 CFR 

149.230(a) includes general 

requirements, the timing and form of the 

data submission, and the reporting 

requirements in circumstances when a 

transfer of business occurs. 

As discussed in sections I.A and II.A 

of the preamble, section 106(b) of the No 

Surprises Act added parallel provisions 

at section 9823 of the Code, section 723 

of ERISA, and section 2799A–8 of the 

PHS Act requiring plans and issuers to 

submit information regarding air 

ambulance services jointly to the 

Departments. Section 106(d) of the No 

Surprises Act directs HHS, in 

consultation with the Secretary of 

Transportation, to undertake notice and 

comment rulemaking to specify the form 

and manner in which plans and issuers 

must submit this information. 

Therefore, in these proposed rules, HHS 

proposes amendments to 45 CFR part 

149 that specify the form and manner 

for the reports required in section 9823 

of the Code, section 723 of ERISA, and 

section 2799A–8 of the PHS Act, as 

enacted in section 106(b) of the No 

Surprises Act. In the interest of burden 

reduction and efficiency, the 

Department of the Treasury and DOL 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51735 

propose to add 26 CFR 54.9823–1 and 

29 CFR 2590.723, respectively, to 

provide that plans and issuers would 

satisfy the requirements to submit 

information pursuant to section 9823 of 

the Code and section 723 of ERISA by 

satisfying the information reporting 

requirements under proposed 45 CFR 

149.230. Similarly, as discussed further 

in section IV of the preamble, OPM 

proposes to add conforming reporting 

requirements to require FEHB carriers to 

comply with the requirements of 

proposed 45 CFR 149.230 with respect 

to an FEHB plan in the same manner as 

such provisions apply to a group health 

plan or health insurance issuer offering 

group or individual health insurance 

coverage. 

The Departments interpret section 

9823 of the Code, section 723 of ERISA, 

and section 2799A–8 of the PHS Act to 

require plans and issuers to submit data 

regarding air ambulance services on a 

calendar year basis. The Departments 

are of the view that a calendar year 

reporting period would maximize the 

uniformity of the data across all 

submitters and provide a suitable basis 

for performing the trend analyses that 

section 106(c) of the No Surprises Act 

requires HHS to conduct as part of 

developing a comprehensive public 

report. In order to ensure completeness 

of the data, the Departments propose 

that data with respect to a calendar year 

would include both data relevant to air 

ambulance services furnished within 

the calendar year, as well as data 

relevant to services for which payments 

were made within the calendar year 

(even if the service was provided in a 

different calendar year). The 

Departments are of the view that this 

approach is necessary due to the limited 

duration of the data collection and 

statutory deadlines that may not allow 

sufficient time for claims run-out, 

particularly with respect to providers of 

air ambulance services that do not have 

contractual relationships with plans and 

issuers. 

Based on the expectation that this 

rulemaking would be finalized during 

2021, as required in section 106(d) of 

the No Surprises Act, and consistent 

with the statutory requirement on plans 

and issuers to report the required data 

not later than 90 days after the last day 

of the applicable calendar year, the 

Departments propose that plans and 

issuers would be required to submit the 

data for calendar year 2022 by March 

31, 2023, and the data for calendar year 

2023 by March 30, 2024. In order to 

ensure the completeness of the data, in 

proposed 45 CFR 149.230(a)(3), the 

Departments further propose that an 

issuer that acquires from another issuer 

a line or block of business that provided 

coverage of air ambulance services 

during calendar years 2022 or 2023 

would be required to report the air 

ambulance services data on behalf of the 

acquired business for the entire 

applicable calendar year. The 

Departments propose that these 

reporting requirements would apply to 

the selling and acquiring issuers if a sale 

or transfer occurs as a result of issuers 

being merged, combined, spun off, 

affected by, or engaging in any similar 

transaction during a calendar year. In 

addition, to ensure completeness and 

timeliness of reporting of all relevant air 

ambulance services data, the proposed 

rule would provide that the Secretary of 

HHS may provide examples of these 

transactions in guidance. 

In addition, the Departments and 

OPM are publishing a proposed 

information collection, which would 

provide additional technical details 

regarding the required data elements, for 

public comment at the same time as or 

shortly after publishing these proposed 

rules. The proposed information 

collection would include a proposed 

data template and instructions. The 

proposed information collection would 

specify that plans and issuers do not 

need to submit information required in 

proposed 45 CFR 149.230 if they did not 

receive claims or make or expect to 

make payments for air ambulance 

services with respect to the reporting 

period. 

Section 9823 of the Code, section 723 

of ERISA, and section 2799A–8 of the 

PHS Act require plans and issuers 

offering group or individual health 

insurance coverage to submit claims 

data for air ambulance services that 

include the following information about 

the claims: Whether the services were 

provided on an emergent or nonemergent basis; whether the provider of 

such services is part of a hospital-owned 

or sponsored program, municipalitysponsored program, hospital 

independent partnership (hybrid) 

program, independent program, or 

tribally operated program in Alaska; 

whether the transport originated in a 

rural or urban area; the type of aircraft 

used for the transport (fixed-wing or 

rotary-wing air ambulance); and 

whether the provider of the air 

ambulance service has a contract with 

the plan or issuer to provide air 

ambulance services. 

Those statutory sections further 

require plans and issuers to provide, in 

addition to the information described in 

the preceding paragraph of the 

preamble, such other information 

regarding providers of air ambulance 

services as the Departments may 

specify. Section 106(c) of the No 

Surprises Act requires HHS, in 

consultation with the Secretary of 

Transportation, to produce a 

comprehensive public report that must 

include several different analyses that 

require collection of other data not 

specifically identified in section 9823 of 

the Code, section 723 of ERISA, and 

section 2799A–8 of the PHS Act. These 

analyses include: An assessment of the 

average charges for air ambulance 

services; amounts paid by plans and 

issuers to providers of air ambulance 

services; amounts paid out-of-pocket by 

consumers; the frequency of patient 

balance billing; the frequency of claims 

appeals made by providers of air 

ambulance services to plans and issuers; 

and any other data relating to air 

ambulance services determined 

necessary and appropriate by 

Secretaries of HHS and Transportation. 

To perform these analyses, the 

Secretaries of HHS and Transportation 

would need to be able to match the 

information collected from plans and 

issuers to the information collected from 

providers of air ambulance services 

under section 106(a) of the No Surprises 

Act. 

Therefore, in proposed 45 CFR 

149.230(b), HHS proposes to require 

submission of claims-level data on air 

ambulance services in order to collect 

the information necessary to satisfy 

these statutory requirements related to 

the HHS public report. Moreover, the 

Departments are of the view that 

submission of claims-level data would 

be less burdensome than submission of 

multiple sets of total claims data 

aggregated by the various categories 

described in section 9823 of the Code, 

section 723 of ERISA, and section 

2799A–8 of the PHS Act, particularly 

given the relatively small volume of 

claims for air ambulance services. It is 

the Departments’ understanding that 

information regarding the service 

delivery model of the provider of air 

ambulance services (such as affiliation 

with a hospital or municipality or other 

similar program) may not be available to 

plans and issuers. Therefore, the 

Departments propose to require plans 

and issuers to report that data element 

only to the extent it is available to them. 

The Departments appreciate the need 

to ensure both stakeholder and 

consumer privacy, particularly when 

collecting claims-level data, and 

therefore would take precautions to 

protect the confidentiality of claimslevel data. HHS proposes to collect only 

that claims-level data that would be 

sufficient for producing the 

comprehensive report required by the 

statute. Moreover, HHS intends to 

51736 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

18HHS’s enterprise-wide information security 

and privacy program was launched in FY 2003, to 

help protect HHS against potential IT threats and 

vulnerabilities. The program ensures compliance 

with Federal mandates and legislation, including 

the Federal Information Security Management Act 

and the President’s Management Agenda. The HHS 

Cybersecurity Program plays an important role in 

protecting HHS’s ability to provide mission-critical 

operations. In addition, the HHS Cybersecurity 

Program is the cornerstone of the HHS IT Strategic 

Plan. 

19See section 9831 of the Code, section 732 of 

ERISA, and section 2722 of the PHS Act. 

20The CAA amended the PHS Act statutory 

exemption for these products to include the new 

requirements established under the new Part D of 

the PHS Act. See section 102(a)(3)(B) of the No 

Surprises Act, which made conforming 

amendments to add the phrase ‘‘and Part D’’ to 

section 2722(b), (c)(1), (c)(2) and (c)(3) of the PHS 

Act. 

collect and maintain the information 

using information technology (IT) 

systems that are designed to meet all of 

the security standards protocols 

established under Federal law or by 

HHS relevant to such information.18

The claims-level data elements that 

HHS proposes to require plans and 

issuers to submit to support HHS’s 

publication of the comprehensive public 

report, but that are not explicitly listed 

in section 9823 of the Code, section 723 

of ERISA, and section 2799A–8 of the 

PHS Act, include: The date of service; 

billing NPI and Current Procedural 

Terminology (CPT)/Healthcare Common 

Procedure Coding System (HCPCS) 

codes information; and certain 

information about each air ambulance 

transport (such as the loaded miles and 

whether the transport was an interfacility transport). These data elements, 

specifically the NPI and the date of 

service, would enable the Secretaries of 

HHS and Transportation to combine and 

validate the information collected from 

plans and issuers and the information 

collected from providers of air 

ambulance services. 

Similarly, to enable the Secretaries of 

HHS and Transportation to analyze and 

summarize the data in an appropriate 

and meaningful manner in a 

comprehensive public report, HHS also 

proposes that the claims-level data 

elements include the market type of the 

plan or coverage associated with the air 

ambulance services. For fully-insured 

coverage, this would include the 

individual, small group, and large group 

markets, as defined in section 2791(e) of 

the PHS Act. For self-insured group 

health plans, this would include 

identification of the plan sponsor as a 

small employer or large employer, as 

defined in section 2791(e) of the PHS 

Act, with reasonable estimates allowed 

when the exact information on the size 

of the employer is not available. Under 

this proposal, FEHB plans would also be 

separately identified. 

Further, to satisfy the requirements 

for the comprehensive public report 

described in section 106(c) of the No 

Surprises Act, including the required 

assessments of the frequency of patient 

balance billing and claims appeals made 

by air ambulance providers, HHS 

proposes that the claims-level data 

elements include certain claim 

adjudication information (including 

whether the claim was paid, partially 

paid, denied, or appealed, and the 

reason for the denial and the outcome 

of the appeal, if applicable), as well as 

certain claim payment information 

(including submitted charges, amounts 

paid by the payor, and cost-sharing 

amount). 

In order to streamline the provision of 

the required disclosures and to avoid 

unnecessary duplication of reporting 

with respect to group health insurance 

coverage, the Departments propose that, 

to the extent coverage under a plan 

consists of group health insurance 

coverage, the plan satisfies the reporting 

requirements if the plan requires the 

issuer offering the coverage to provide 

the information pursuant to a written 

agreement between the plan and the 

issuer. For example, if a plan and an 

issuer enter into a written agreement 

under which the issuer agrees to report 

the information required under 

proposed 45 CFR 149.230, and the 

issuer fails to submit a complete or 

timely report, then the issuer, but not 

the plan, would have violated these 

reporting requirements. However, if a 

plan has knowledge that the required 

report has not been submitted, the 

Departments would encourage the plan 

to work with the issuer to correct the 

noncompliance as soon as practicable or 

notify the applicable agency enforcing 

this requirement. 

The Departments also highlight that 

nothing prevents a self-insured group 

health plan from contracting with 

another party, such as a third-party 

administrator (TPA), to report the 

required information, including, to the 

extent permitted under other Federal or 

state laws, entering into a written 

agreement for the other party to 

indemnify the plan in the event the 

other party fails to submit a complete or 

timely report. However, the plan would 

be required to monitor the other party 

to ensure that the entity is submitting 

the required information as it is 

ultimately the responsibility of the selfinsured group health plan to report the 

information required under proposed 45 

CFR 149.230. The proposed information 

collection instrument is designed in a 

manner that would enable a TPA that 

submits information on behalf of 

multiple self-insured group health plans 

to submit a single submission that 

includes the required data elements for 

all such plans. 

Excepted benefits are exempt from 

requirements in chapter 100 of the 

Code, part 7 of ERISA, and Part A and 

Part D of Title XXVII of the PHS Act.19 20

Short-term, limited-duration insurance 

is excluded from the definition of 

individual health insurance coverage 

and is exempt from the new 

requirements established in section 

2799A–8 of the PHS Act. Therefore, 

short-term, limited-duration insurance 

(as defined in 26 CFR 54.9801–2, 29 

CFR 2590.701–2, and 45 CFR 144.103) 

and 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) would not be subject to the 

reporting requirements set forth in 45 

CFR 149.230 in these proposed rules. 

Individual coverage health 

reimbursement arrangements and 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), 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 the reporting 

of data related to air ambulance services 

inapplicable. Therefore, under these 

proposed rules, the reporting 

requirements also would not apply to 

individual coverage health 

reimbursement arrangements and other 

account-based plans, consistent with the 

existing applicability provisions in 45 

CFR 149.20 with respect to other No 

Surprises Act requirements in 45 CFR 

part 149. 

Section 9823 of the Code, section 723 

of ERISA, and section 2799A–8 of the 

PHS Act (and other provisions of the No 

Surprises Act that are applicable to 

group health plans and health insurance 

issuers offering group or individual 

health insurance coverage) apply to 

grandfathered health plans. Section 

1251 of the Affordable Care Act 

provides that grandfathered health plans 

are not subject to certain provisions of 

the Code, ERISA, and the PHS Act, as 

added by the Affordable Care Act, for as 

long as they maintain their status as 

grandfathered health plans. For 

example, grandfathered health plans are 

subject neither to the requirement to 

cover certain preventive services 

without cost sharing under section 2713 

of the PHS Act, nor to the annual 

limitation on cost sharing set forth 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51737 

under section 2707(b) of the PHS Act. If 

a plan or coverage were to lose its 

grandfathered status, it would be 

required to comply with both 

provisions, in addition to several other 

requirements. However, the CAA does 

not include an exception for 

grandfathered health plans that is 

comparable to section 1251 of the 

Affordable Care Act. Furthermore, 

section 102(d)(2) of the No Surprises 

Act amended section 1251(a) of the 

Affordable Care Act to clarify that the 

new and recodified patient protections 

provisions of the No Surprises Act, 

including those related to choice of 

health care professional, apply to 

grandfathered health plans. Therefore, 

the provisions of these proposed rules 

that apply to plans and issuers, 

proposed to be codified at 45 CFR 

149.460, would apply to grandfathered 

plans. 

The Departments seek comment on 

the use of the calendar year as the 

reporting period, including the time it 

typically takes to fully adjudicate and 

pay claims for air ambulance services 

(furnished by either participating or 

nonparticipating providers of air 

ambulance services), and the proposed 

data elements, as well as any potential 

challenges that plans and issuers may 

face in reporting the proposed data 

elements. The Departments also seek 

comment on the potential format for 

reporting the data. 

F. Reporting Requirements Regarding 

Air Ambulance Services for Providers of 

Air Ambulance Services (45 CFR 

149.460) 

HHS proposes to amend 45 CFR part 

149 by adding 45 CFR 149.460 to 

subpart E to describe the data reporting 

requirements for providers of air 

ambulance services. Proposed 45 CFR 

149.460(a) includes the general 

requirements, the timing and form of the 

report, and the reporting requirements 

in circumstances where a transfer of 

business occurs. Proposed 45 CFR 

149.460(b) outlines the information that 

would be required to be reported. 

In proposed 45 CFR 149.460(a)(2), 

HHS interprets section 106(a) of the No 

Surprises Act to require providers of air 

ambulance services to submit data 

regarding air ambulance services on a 

calendar year basis, consistent with the 

proposal for the reporting period in 

proposed 45 CFR 149.230(a)(2). 

Moreover, typically, providers of air 

ambulance services do not operate 

based on plan years. HHS proposes that 

data with respect to a calendar year 

would include data relevant to air 

ambulance services furnished within 

the calendar year as well as data 

relevant to services for which payments 

were made within the calendar year 

(even if the service was provided in a 

different calendar year). HHS expects 

that these proposed rules would be 

finalized during 2021, as required in 

section 106(d) of the No Surprises Act, 

and consistent with the requirement at 

section 106(a) of the No Surprises Act 

on providers of air ambulance services 

to report the required data not later than 

90 days after the last day of the 

applicable calendar year. Thus, HHS 

proposes that providers of air 

ambulance services would be required 

to submit the data for calendar year 

2022 by March 31, 2023, and submit the 

data for calendar year 2023 by March 

30, 2024. In order to ensure 

completeness of the data, in proposed 

45 CFR 149.460(a)(3), HHS further 

proposes that a provider of air 

ambulance services that acquires a line 

or block of business from another 

provider of air ambulance services that 

provided such services during calendar 

years 2022 or 2023 would be required to 

report the air ambulance services data 

on behalf of the acquired business for 

the entire applicable calendar year. The 

Departments propose that these 

reporting requirements would apply to 

the selling and acquiring providers of 

air ambulance services if a sale or 

transfer occurs as a result of providers 

of air ambulance services being merged, 

combined, spun off, affected by, or 

engaging in any similar transaction 

during a calendar year. In addition, to 

ensure completeness and timeliness of 

reporting of all relevant air ambulance 

services data, the proposed rule would 

provide that the Secretary of HHS may 

provide examples of these transactions 

in guidance. 

Section 106(a) of the No Surprises Act 

requires providers of air ambulance 

services to submit the following 

information regarding air ambulance 

services: Cost data separated to the 

maximum extent possible by air 

transportation costs and costs of 

medical services and supplies 

associated with furnishing air 

ambulance services; the number and 

location of all air ambulance bases; the 

number and type of aircraft operated by 

the provider; the number of transports 

by payor mix (including plans, issuers, 

government payors, and the uninsured); 

the number of claims denied by group 

health plans or health insurance issuers 

and the reasons for denials; and the 

number of emergency and nonemergency transports by base and by 

type of aircraft. 

Section 106(a) of the No Surprises Act 

further requires providers of air 

ambulance services to report, in 

addition to the information described in 

the preceding paragraph, such other 

information regarding air ambulance 

services as the Secretaries of HHS and 

Transportation may specify. As noted in 

section II.E. of the preamble, section 

106(c) of the No Surprises Act requires 

HHS to produce a comprehensive public 

report that must address several topics 

that require collection of additional 

information not specifically identified 

in section 106(a) of the No Surprises 

Act. These topics include: The 

percentage of providers of air 

ambulance services in various service 

delivery models (such as hospitalsponsored or municipality-sponsored 

programs); an assessment of the extent 

of competition among providers of air 

ambulance services on the basis of price 

and services offered; the average charges 

for air ambulance services; amounts 

paid by plans, issuers, and consumers; 

an assessment of the presence of air 

ambulance bases in, or with the 

capability to serve, rural areas and the 

relative growth in air ambulance bases 

in rural and urban areas over time; the 

percentage of providers of air 

ambulance services that have contracts 

with plans or issuers; unreasonable 

market concentration or excessive 

market domination that enable 

unreasonable price increases, and 

analyses of the debt collection practices 

against patients under various service 

delivery models; the frequency of 

patient balance billing, and the 

frequency of claims appeals made by 

providers of air ambulance services to 

plans and issuers; and any other data 

relating to air ambulance services 

determined necessary and appropriate 

by the Secretaries of HHS and 

Transportation. To address these topics, 

including performing the required 

analyses and assessments, HHS would 

need to be able to match the information 

collected from plans and issuers to the 

information collected from providers of 

air ambulance services. 

Section 106(c)(2) of the No Surprises 

Act permits the Secretaries of HHS and 

Transportation to incorporate 

information from independent experts 

and third-party sources in the 

development of the report. HHS 

examined various sources of data and 

spoke with several industry experts and 

determined that in several areas, the 

data required to produce the analyses 

required in section 106(c)(1) of the No 

Surprises Act are not available from 

other sources. Therefore, in order to 

support the development of the report 

required in section 106(c)(1), HHS 

proposes collecting the necessary data 

from providers of air ambulance 

51738 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

21HHS may apply a custom definition or a 

broadly accepted definition, such as the one used 

by CMS for the Medicare Ambulance Fee Schedule, 

to determine whether air ambulance bases and 

services are provided in rural or urban areas. More 

detail on the Medicare Ambulance Fee Schedule is 

available at: https://www.cms.gov/medicare/ 

medicare-fee-for-service-payment/ambulancefee

schedule. 

services as described in these proposed 

rules. However, HHS seeks comment on 

additional data sources that may inform 

the development of the report, and the 

extent to which such data sources could 

be used in lieu of collecting specific 

data elements. 

In proposed 45 CFR 149.460(b), HHS 

proposes requiring submission of air 

ambulance base-level and transportlevel data on air ambulance services, as 

well as data elements not specifically 

identified in section 106(a) of the No 

Surprises Act, in order to collect the 

information necessary to satisfy these 

statutory requirements. For example, 

collection of data on revenue of the 

provider of air ambulance services from 

various sources, including non-transport 

sources, is necessary and appropriate to 

assess the competitiveness of the market 

for air ambulance services for purposes 

of the public report required under 

section 106(c) of the No Surprises Act, 

as well as to validate the data against 

the data collected from plans and 

issuers. Similarly, collection of air 

ambulance base-level data would help 

inform assessments regarding the 

competitiveness of the markets as well 

as capacity, service availability, and 

gaps in rural access to air ambulance 

services, which the Secretaries of HHS 

and Transportation are required to 

assess under section 106(c). Further, 

collection of transport-level data would 

enable the Secretaries of HHS and 

Transportation to conduct the 

assessments required under section 

106(c) regarding the prices and services 

offered, the average charges for air 

ambulance services, and amounts paid 

by plans, issuers, and consumers, and 

would allow the Secretaries to complete 

the analyses of the debt collection 

practices, the frequency of patient 

balance billing, and the frequency of 

claims appeals. 

Section 106(a)(2) of the No Surprises 

Act requires providers of air ambulance 

services to submit data on the number 

and location of all air ambulance bases 

they operate, the number and type of 

aircraft they operate, and the number of 

transports disaggregated by payor mix. 

In proposed 45 CFR 149.460(b)(2), HHS 

proposes collecting this information for 

each base, as well as additional 

information specific to the base and the 

aircraft that would enable the 

Secretaries of HHS and Transportation 

to conduct the assessments required in 

section 106(c) of the No Surprises Act. 

This additional information would 

include the NPIs associated with the 

base, the number and type of staff, the 

number and type of air ambulance 

transports per aircraft (including scene 

response patient transports, interfacility patient transports, and 

transports of organs, medical personnel, 

and medical supplies), and the number 

of air ambulance responses for the base, 

including the number of such responses 

that did not result in transports. The 

additional information would also 

include the service delivery model(s) of 

the base (a hospital-owned or sponsored 

program, municipality-sponsored 

program, hospital independent 

partnership (hybrid) program, 

independent program, or tribally 

operated program in Alaska) and 

whether the base shares operational 

costs with the affiliated or sponsor 

organizations, to complement and 

support the data required to be collected 

under section 9823(b)(1)(B) of the Code, 

section 723(b)(1)(B) of ERISA, section 

2799A–8(b)(1)(B) of the PHS Act, and 

section 106(a)(2)(D) of the No Surprises 

Act. The rationale for collecting this 

additional information is that service 

delivery models may vary by air 

ambulance base in addition to by 

provider. The additional information 

would also include base-specific data 

related to the providers’ of air 

ambulance services in-network 

contractual arrangements with plans 

and issuers as well as other, non-direct 

payor contracts with plans, issuers, or 

other entities (including, but not limited 

to, TPAs or provider networks). This 

additional information would 

complement and support required data 

submissions and would also include air 

medical subscriptions or ambulance/ 

emergency medical service membership 

programs associated with the base, and 

whether the base operates ground 

ambulance services in addition to air 

ambulance services. Finally, collection 

of this additional information would 

enable analyses under various 

provisions of section 106(c)(1) of the No 

Surprises Act. 

Section 106(a) of the No Surprises Act 

requires providers of air ambulance 

services to submit cost data for air 

ambulance services, as HHS determines 

appropriate, and section 106(a) requires 

providers of air ambulance services to 

separate, to the maximum extent 

possible, air transportation costs and the 

costs of medical services and supplies. 

HHS reviewed the ambulance cost 

reporting forms developed for the 

Medicare Ground Ambulance Data 

Collection System, ambulance cost 

reporting forms developed by states, a 

cost report study prepared for the 

Association of Air Medical Services and 

Members, a review of several studies on 

air ambulances services, consulted with 

the Secretary of Transportation and 

subject matter experts, and held 

listening sessions and additional 

conversations with providers of air 

ambulance services. Based on these 

activities, HHS determined that the 

service delivery or organizational model 

of a provider of air ambulance services, 

the designation of the service area of a 

base (rural or urban),21 and the 

identification of fixed and variable costs 

are all important factors affecting the 

costs and revenues of providers of air 

ambulance services. Because these 

factors vary at the air ambulance base 

level, HHS proposes in 45 CFR 

149.460(b) to require submission of 

detailed cost and revenue data at the air 

ambulance base level, as well as at the 

regional and corporate level, for each air 

ambulance base, if applicable. The data 

HHS proposes to collect would enable 

the separation of fixed and variable 

costs of providers of air ambulance 

services, as well as medical costs as 

opposed to air transportation costs. 

HHS proposes in 45 CFR 

149.460(b)(3) that the required cost data 

be reported in the following categories: 

Labor costs by type of staff; facility costs 

by facility (including annual lease, 

rental, or mortgage costs, other costs of 

ownership, insurance, maintenance and 

improvements, utilities, taxes, 

computers and software, and other 

facility costs); vehicle costs by vehicle 

(including vendor fees, depreciation, 

safety enhancements, non-medical 

equipment (such as communications 

technology), registration and license, 

taxes, insurance, maintenance 

equipment and parts, fuel, and capital 

medical equipment); equipment and 

supplies; and overhead and vendor 

costs (including insurance, training, 

billing, accounting and finance, human 

resources, travel, marketing, sales, 

dispatch or call center, IT support, legal, 

medical direction, fees, fines, and 

taxes). 

HHS proposes in 45 CFR 

149.460(b)(4) that the required revenue 

data would include: Total revenue from 

paid air ambulance transports, by payor 

type, as well as revenue from other 

sources (such as contracts with facilities 

such as hospitals, prisons, and nursing 

homes); revenue from emergency air 

medical services other than for 

transports (for example, for 

transportation of organs, medical 

personnel, supplies, or equipment on an 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51739 

emergency basis); revenue from subcontracted ambulance services; fees for 

standby events; payments from nondirect contracts such as waiver, rental, 

lease, and supplemental arrangements; 

air medical subscriptions and 

ambulance or emergency medical 

service membership programs; 

charitable donations and foundation 

funding; program-related investments; 

receipt of local taxes earmarked for 

emergency medical services; contract 

revenues from local governments in 

return for air ambulance services; 

enterprise funds and utility rates; sales 

of assets and services; bond or debt 

financing; state or local donation of 

vehicles or durable equipment; and 

funding grants or the provision of timelimited funding from a government 

entity (including Federal, state, local, or 

other). The revenue data would enable 

the Secretaries of HHS and 

Transportation to conduct the holistic 

assessments required in various 

provisions of section 106(c)(1) of the No 

Surprises Act, including with respect to 

the ability of providers of air ambulance 

services to compete on the basis of price 

and services in various geographic 

areas, these providers’ financial 

capability to serve rural areas, the 

relationship of the average charges for 

air ambulance services to business costs 

and market dynamics and 

characteristics, potential anticompetitive behaviors by providers of 

air ambulance services, and other 

factors that may affect the costs of air 

ambulance services. 

Finally, section 106(a)(2) of the No 

Surprises Act requires providers of air 

ambulance services to submit the 

following data regarding air ambulance 

transports: The number of transports by 

payor mix (group health plans, health 

insurance issuers, state and Federal 

Government payors, and the uninsured); 

the number of claims for air ambulance 

services that have been denied payment 

by plans or issuers and the reasons for 

such denials; and the number of 

emergent and non-emergent transports 

disaggregated by air ambulance base and 

type of aircraft. In 45 CFR 149.460(b)(5), 

HHS proposes to require submission of 

transport-level data on air ambulance 

services in order to satisfy these 

statutory reporting requirements, as well 

as to collect the data necessary to enable 

HHS, in consultation with the Secretary 

of Transportation, to conduct the 

assessments required in section 106(c) 

of the No Surprises Act. 

The transport-level data elements in 

addition to those specifically identified 

in section 106(a) of the No Surprises Act 

that HHS proposes to collect from 

providers of air ambulance services 

include: Date of service; billing NPI and 

CPT/HCPCS codes information; and 

certain information about the transport 

(such as the air ambulance base, flight 

duration, loaded miles, pick-up (origin) 

and drop-off (destination) locations and 

the point of ambulance pick-up zip 

code, and whether the transport was a 

scene response patient transport, interfacility patient transport, or other 

transport (such as organ, medical 

personnel, or medical supplies 

transport)). These data elements would 

enable the Secretaries of HHS and 

Transportation to identify, combine, and 

validate the information collected from 

plans and issuers, and the information 

collected from providers of air 

ambulance services, as well as evaluate 

potential gaps in rural access. 

Consistent with the requirements in 

section 106(a) of the No Surprises Act 

and to enable HHS to combine and 

validate the information collected from 

providers of air ambulance services 

under these proposed rules with air 

ambulance data from other sources, as 

well as to enable HHS to assess abusive 

patient collection practices across 

various payors as required in section 

106(c)(1)(I) of the No Surprises Act, 

HHS proposes requiring identification 

of the primary payor type for each 

transport, such as Medicare fee-forservice (FFS), Medicare Advantage, 

Medicaid, Veterans’ Health 

Administration, TRICARE, Indian 

Health Service, group health plan, 

health insurance issuer, FEHB plan, 

Workers’ Compensation, patient costsharing, and patient self-pay. Further, to 

satisfy the requirements for the 

comprehensive public report described 

in section 106(c) of the No Surprises 

Act, HHS proposes that the transportlevel data elements should include 

information regarding the contractual 

arrangement with the plan or issuer, if 

applicable, to furnish air ambulance 

services under the plan or coverage, 

respectively, to support the assessment 

required in section 106(c)(1)(F) of the 

No Surprises Act, as well as the 

payment methodology for the transport 

(such as the base rate, mileage, and 

intervention or other charges), if 

applicable, as recommended by experts. 

For the same reasons, HHS proposes 

that the transport-level data elements 

should also include: Certain claim 

adjudication information (including 

whether the claim was paid, denied, or 

appealed, and the reason for the denial 

or the outcome of the appeal, if 

applicable) to support the data 

collection and analyses required in 

sections 106(a)(2)(E) and (c)(1)(J) of the 

No Surprises Act; certain payment 

information (including submitted 

charges, amounts paid by the payor not 

including the patient, and cost-sharing 

amount (if applicable)) to support the 

assessment required in section 

106(c)(1)(C) of the No Surprises Act; the 

amount billed to the patient, the amount 

collected from the patient, and whether 

the bill was referred for collection, 

including lawsuits, liens, or wage 

garnishment actions to support the 

assessments required in section 

106(c)(1)(G) and (c)(1)(I) of the No 

Surprises Act; and information on any 

payments from sources other than the 

primary payor, such as membership fees 

and state or municipal subsidies to 

support the analyses required in section 

106(c)(1)(B), (c)(1)(H), and (c)(1)(K) of 

the No Surprises Act. 

In order to protect stakeholder and 

consumer privacy, particularly when 

collecting transport-level data, HHS 

would take precautions to protect the 

confidentiality of transport-level data. 

HHS proposes to collect only that 

transport-level data that would be 

sufficient for producing the 

comprehensive report required by the 

statute. HHS intends to collect and 

maintain the information using 

information technology (IT) systems that 

are designed to meet all of the security 

standard protocols established under 

Federal law or by HHS relevant to such 

information. 

HHS is publishing the proposed 

information collection for public 

comment at the same time as or shortly 

after these proposed rules. The 

proposed information collection would 

include a proposed data template and 

instructions. 

HHS seeks comment on the use of the 

calendar year as the reporting period, 

including the time it typically takes 

payors to fully adjudicate and pay 

claims for air ambulance services 

(furnished by either participating or 

nonparticipating providers of air 

ambulance services), the proposed data 

elements described in this section of the 

preamble, the appropriate levels for 

reporting of these data elements 

(regional/corporate, base, transport), and 

potential challenges that providers of air 

ambulance services may face in 

reporting the proposed data elements, 

including any special considerations for 

the reporting of the proposed data 

elements with respect to municipality 

and other government-owned or 

sponsored providers of air ambulance 

services. HHS also seeks comment on 

the potential format for reporting the 

data. 

51740 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

22The July 2021 interim final rules redesignated 

paragraph (d) of 45 CFR 144.101 as paragraph (e) 

and further redesignated paragraph (e) of 45 CFR 

144.101 as paragraph (f). Although the effective date 

of the July 2021 interim final rules is not until 

September 13, 2021, references to paragraph (e) in 

these proposed rules are references to the newly 

redesignated paragraph (e) (formerly paragraph (d)). 

This rule also proposes a technical correction to 45 

CFR 144.103(e)(2) to correct a cross-reference that 

was inadvertently not updated when paragraph (d) 

was redesignated. 

23See 45 CFR 147.126. Also see 45 CFR 146.123. 

III. Provisions of the Proposed Rules— 

Department of HHS 

A. Part 144—Requirements Relating to 

Health Insurance Coverage 

1. Basis and Purpose (45 CFR 144.101) 

HHS proposes conforming 

amendments to 45 CFR 144.101 to 

reflect the proposed amendments to 45 

CFR part 150, described in section III.C 

of the preamble. Specifically, HHS 

proposes to revise 45 CFR 144.101(e) 22

to include references to the 

enforcement-related provisions added 

by the No Surprises Act (section 2799B– 

4 of the PHS Act and section 106(e) of 

the No Surprises Act), and to specify 

that the enforcement provisions in 45 

CFR part 150 apply to the provisions of 

45 CFR part 149 concerning group or 

individual health insurance, providers 

and facilities, and providers of air 

ambulance services. 

B. Part 148—Requirements for the 

Individual Health Insurance Market 

1. Authority 

HHS proposes to make technical 

corrections to the authority listed for 45 

CFR part 148. More specifically, HHS 

proposes to update the list to reference 

the Federal insurance reforms 

applicable to the individual market 

captured in PHS Act sections 2722 

through 2763, codified at 42 U.S.C. 

300gg–21 through 300gg–63, along with 

PHS Act sections 2791 and 2792, 

codified at 42 U.S.C. 300gg–91 and 

300gg–92. This would include new 

section 2746 of the PHS Act, as added 

by section 202(c) of Title II of Division 

BB of the CAA, in the list of authorities 

for 45 CFR part 148. Finally, HHS 

proposes to remove the reference to PHS 

Act section 2711, codified at 42 U.S.C. 

300gg–11, because this statutory 

provision is not implemented as part of 

the HHS regulations in 45 CFR part 

148.23

2. Basis and Purpose (45 CFR 148.101) 

HHS proposes to amend 45 CFR 

148.101 to expand the purpose of 45 

CFR part 148. Specifically, HHS 

proposes to add a reference to the new 

reporting and disclosure requirements 

regarding agent and broker 

compensation that these proposed rules 

would add as a new subpart F to 45 CFR 

part 148 to implement the requirements 

of section 2746 of the PHS Act, as added 

by section 202(c) of Title II of Division 

BB of the CAA. 

3. Scope and Applicability Date (45 CFR 

148.102) 

HHS proposes to amend 45 CFR 

148.102 by adding paragraph (a)(3) to 

specify that the requirements in 

proposed 45 CFR 148.410 would apply 

to health insurance issuers of individual 

health insurance coverage and shortterm, limited-duration insurance. HHS 

also proposes to amend paragraph (b) by 

excepting 45 CFR 148.410 from the 

applicability dates specified in 

paragraph (b), as these proposed rules 

set forth the applicability date specific 

to 45 CFR 148.410 in that section. 

Section 2746 of the PHS Act, as added 

by section 202(c) of Title II of Division 

BB of the CAA, applies to grandfathered 

individual health insurance coverage, 

for the reasons set forth in section II.E. 

of the preamble. Therefore, the 

provisions in proposed 45 CFR 148.410 

that apply to individual health 

insurance coverage, would apply to 

grandfathered as well as 

nongrandfathered individual health 

insurance coverage. 

4. Subpart F—Requirements Related to 

Reporting and Disclosure 

HHS proposes to add a new subpart 

F to 45 CFR part 148 and new 45 CFR 

148.410 within that subpart to 

implement the requirements of section 

2746 of the PHS Act, as added by 

section 202(c) of Title II of Division BB 

of the CAA. Section 2746 of the PHS Act 

requires health insurance issuers 

offering individual health insurance 

coverage or short-term, limited-duration 

insurance to make disclosures to 

enrollees and submit reports to HHS 

regarding direct and indirect 

compensation provided by the issuer to 

an agent or broker associated with 

enrolling individuals in such coverage. 

Sections 2746(b) and (c) of the PHS Act 

detail the specific requirements for 

disclosure and reporting, respectively. 

HHS proposes to codify these 

requirements in new proposed 45 CFR 

148.410. 

Agents and brokers enter into 

appointment arrangements with health 

insurance issuers; these arrangements, 

which are generally regulated by state 

law, govern compensation provided to 

agents and brokers for assisting 

consumer enrollment in an issuer’s 

plans. The specific compensation 

arrangement between a health insurance 

issuer and the agent or broker is 

typically laid out in a written document 

such as a commission schedule. 

Compensation arrangements may also 

include other types of compensation, 

such as fees and bonuses. Section 2746 

of the PHS Act improves the 

transparency of this compensation 

system by requiring the disclosure of 

this compensation information to 

consumers and reporting of this 

information to HHS. 

5. Subpart F—Requirements Related to 

Reporting and Disclosure—Disclosure of 

Agent and Broker Compensation to 

Individuals in Individual Health 

Insurance Coverage or Short-Term, 

Limited-Duration Insurance (45 CFR 

148.410) 

a. Health Insurance Issuer Standards 

HHS proposes to add, in 45 CFR 

148.410(a), a general statement of the 

obligations of health insurance issuers 

offering individual health insurance 

coverage or short-term, limited-duration 

insurance, to disclose to policyholders 

and report to HHS on an annual basis 

direct and indirect compensation 

provided by the issuer to an agent or 

broker associated with enrolling 

individuals in such coverage. 

HHS proposes to add, in 45 CFR 

148.410(b), definitions of key terms in 

these proposed rules. HHS proposes to 

define ‘‘agent or broker’’ through a 

cross-reference to the definition for the 

term in 45 CFR 155.20. Section 2746 of 

the PHS Act applies to both direct and 

indirect compensation paid to an agent 

or broker by a health insurance issuer 

offering individual health insurance 

coverage or short-term, limited-duration 

insurance, but does not define direct 

and indirect compensation. Therefore, 

HHS proposes regulatory definitions for 

these key terms that define direct and 

indirect compensation in a manner that 

covers all forms of consideration that 

might be transferred between an issuer 

offering individual health insurance 

coverage or short-term, limited-duration 

insurance and an agent or broker for 

enrollment in such coverage, regardless 

of the method by which that 

consideration is transferred. 

In new proposed 45 CFR 

148.410(b)(3), direct compensation is 

defined as monetary amounts, including 

sales and base commissions, paid by an 

issuer that are attributable directly to 

the policy, certificate, or contract of 

insurance and that are paid to an agent 

or broker for the sale, placement, or 

renewal of individual health insurance 

coverage or short-term, limited-duration 

insurance. HHS proposes in new 

proposed 45 CFR 148.410(b)(4) to define 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51741 

24For example, pursuant to 45 CFR 

147.200(a)(1)(iv), a health insurance issuer offering 

individual health insurance coverage must provide 

a summary of benefits and coverage to an 

individual covered under the policy upon 

application, by the first day of coverage (if there are 

changes), upon renewal, reissuance, or 

reenrollment, and upon request. 

indirect compensation as payments by 

an issuer attributable indirectly to a 

policy, certificate, or contract of 

insurance to agents, brokers, and other 

persons for items other than sales and 

base commission. Examples of indirect 

compensation include service fees, 

consulting fees, finders’ fees, 

profitability and persistency bonuses, 

awards, prizes, volume-based 

incentives, and non-monetary forms of 

compensation. HHS proposes in new 

proposed 45 CFR 148.410(b)(2) to define 

a commission schedule as an itemized 

list or table that provides the 

commission levels that are paid by an 

issuer for the sale, placement, or 

renewal of individual health insurance 

coverage or short-term, limited-duration 

insurance. These definitions are based 

on the most common and essential 

terms HHS has observed in various 

examples of issuer commission 

schedules in the individual market. 

HHS proposes to define policyholder in 

new proposed 45 CFR 148.410(b)(5) for 

purposes of this section as the 

individual who purchases individual 

health insurance coverage or short-term, 

limited-duration insurance and is 

responsible for the payment of 

premiums. 

b. Disclosure Requirements 

To ensure transparency of agent and 

broker compensation when purchasing 

individual health insurance coverage or 

short-term, limited-duration insurance, 

and to implement sections 2746(b)(1) 

and (2) of the PHS Act, HHS proposes 

in new proposed 45 CFR 148.410(c) to 

codify the requirement that health 

insurance issuers offering individual 

health insurance coverage or short-term, 

limited-duration insurance must 

disclose to a potential or existing 

policyholder the amount of direct and 

indirect compensation provided to an 

agent or broker associated with 

enrolling the policyholder in the 

individual health insurance coverage or 

short-term, limited-duration insurance. 

This disclosure would be required to 

include the commission schedule used 

to determine the compensation owed to 

an agent or broker as part of the 

appointment contract between the agent 

or broker and the health insurance 

issuer offering individual health 

insurance coverage or short-term, 

limited-duration insurance, as well as 

the structure for compensation not 

captured on the commission schedule. 

Consistent with the requirements in 

section 2746(b) of the PHS Act, HHS 

proposes in new proposed 45 CFR 

148.410(c)(2) that for new, initial 

enrollments, this disclosure would be 

required to be made prior to when 

potential policyholders finalize plan 

selection and also to be included on any 

documentation confirming the initial 

enrollment, including enrollment 

documentation required in applicable 

state or Federal law or an initial 

enrollment package. Section 2746(b)(2) 

of the PHS Act requires health 

insurance issuers offering individual 

health insurance coverage or short-term, 

limited-duration insurance to include 

the disclosure on any documentation 

confirming the individual’s enrollment. 

HHS recognizes that the term ‘‘any 

documentation’’ could be read broadly 

to refer to any documentation that a 

health insurance issuer provides during 

a plan year that serves as confirmation 

that the individual is enrolled in the 

coverage. However, HHS is of the view 

that requiring such a broad reading of 

the statutory requirement would be 

burdensome to issuers, without 

producing a commensurate benefit to 

individuals who receive the disclosure. 

Therefore, HHS proposes to interpret 

the statutory language more narrowly. 

Specifically, with respect to initial 

enrollments, HHS proposes, in 45 CFR 

148.410(c)(2), to require disclosure on 

any documentation confirming initial 

enrollment, including enrollment 

documentation required in applicable 

state or Federal law or an initial 

enrollment package.24 In addition, 

consistent with the provisions in section 

2746(d) of the PHS Act that recognize 

the need to account for the different 

processes for plan renewals, HHS 

proposes in new proposed 45 CFR 

148.410(c)(3) that for renewals of 

enrollment in a plan, an issuer must 

provide the required disclosure to the 

policyholder with the renewal notice 

required in 45 CFR 147.106(f) or 

148.122(i), if applicable. HHS proposes 

this because plan renewals in the 

individual market generally do not have 

a moment when a consumer finalizes 

plan selection, as many of these 

renewals occur automatically, and 

because these renewal notices can also 

be considered to confirm enrollment in 

the plan for the upcoming plan year. 

Therefore, issuers would be required to 

provide the required disclosure as part 

of an initial enrollment package or 

renewal notice, but would not be 

required to provide the required 

disclosure on other documents that 

could be considered to confirm 

enrollment, such as explanations of 

benefits. 

In the absence of any documentation 

required by applicable state or Federal 

law to confirm initial enrollment, or the 

requirement for a notice of renewal of 

coverage with respect to short-term, 

limited-duration insurance, HHS 

proposes, as a default in new proposed 

45 CFR 148.410(c)(4), that issuers would 

be required to provide the disclosure 

with the invoice for the first premium 

payment for the initial coverage term 

and for each renewal period. HHS 

invites comment on whether there are 

other forms of documentation 

confirming enrollment for either 

individual health insurance coverage or 

short-term, limited-duration insurance 

on which disclosure of compensation 

information should be required and 

whether requiring delivery of the 

disclosure at another time, such as 

between the final plan selection and 

issuance of the invoice for the first 

premium payment, may be more 

appropriate. 

HHS proposes to codify in new 

proposed 45 CFR 148.410(c)(5) 

minimum requirements for disclosure of 

direct and indirect compensation 

information. HHS proposes that, at a 

minimum, a health insurance issuer 

offering individual health insurance 

coverage or short-term, limited-duration 

insurance could satisfy the disclosure 

requirement using the commission 

schedules or other documents that 

detail the applicable commission levels 

and indirect compensation, such as 

bonuses. When used to satisfy this new 

disclosure requirement, these 

documents must clearly specify 

commissions paid by an issuer to an 

agent or broker for the applicable plans 

for which the agent or broker has an 

appointment arrangement with the 

issuer, distinguish between commission 

payments for new enrollments and such 

payments for renewed enrollments if the 

issuer differentiates compensation for 

those two types of enrollment, and 

explain the qualifying thresholds for the 

payment of indirect compensation to an 

agent or broker. Requiring that the 

disclosure must include a commission 

schedule would ensure a consistent and 

readily available document for all 

policyholders to use to understand the 

compensation that their insurance agent 

or broker would receive and make 

informed purchasing decisions. If an 

issuer of individual health insurance 

coverage or short-term, limited-duration 

insurance also offers direct or indirect 

compensation that is not captured by 

the commission schedule, the issuer 

must supplement the disclosure of the 

information on the commission 

51742 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

25See, for example, Guidance and Population 

Data for Exchanges, Qualified Health Plan Issuers, 

and Web-Brokers to Ensure Meaningful Access by 

Limited-English Proficient Speakers Under 45 CFR 

155.205(c) and 156.250 (March 30, 2016) https://

www.cms.gov/CCIIO/Resources/Regulations-andGuidance/Downloads/Language-access

guidance.pdf and ‘‘Appendix A—Top 15 NonEnglish Languages by State’’ https://www.cms.gov/ 

CCIIO/Resources/Regulations-and-Guidance/ 

Downloads/Appendix-A-Top-15-non-englishbystate-MM-508_update12-20-16.pd. See also 42 

U.S.C. 18116, 42 U.S.C. 2000d et seq., 269 U.S.C. 

794, 42 U.S.C. 12101 et seq. 

26 Ibid. 

27See 42 U.S.C. 18116, 42 U.S.C. 2000d et seq., 

269 U.S.C. 794, 42 U.S.C. 12101 et seq. 

schedule with additional 

documentation disclosing such other 

compensation. 

HHS expects that issuers subject to 

the requirements of this section would 

integrate this new disclosure 

requirement into their existing 

compliance operations. An issuer’s 

obligation could be satisfied by the 

agent or broker making the required 

disclosure on the issuer’s behalf. For 

example, issuers may provide agents or 

brokers who have an appointment 

arrangement with the issuer printed 

versions of the commission schedule 

and other documentation disclosing 

direct and indirect compensation, if 

applicable, to attach to enrollment 

materials or may provide a link to an 

online version of the document. This 

would equip agents and brokers with 

the information necessary to ensure that 

consumers would be aware of any 

compensation being paid by the issuer 

to the agent or broker prior to enrolling. 

Whether issuers choose to comply 

directly with this obligation or partner 

with their agents and brokers to provide 

the required disclosure, materials 

provided would be required to be made 

available in accessible formats for 

people with disabilities (at no cost to 

the individual) and people with limited 

English proficiency. Issuers would be 

required to comply with applicable 

Federal language and accessibility 

requirements regarding disclosure 

documents.25 This typically requires 

documents to be made available in any 

of the 15 most common languages in the 

state.26 Issuers would also be required 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.27 HHS is of the view that 

individuals cannot receive meaningful 

disclosure if they cannot understand the 

information provided in the disclosure 

documents. HHS seeks comment on 

these proposals. 

These proposed rules do not prescribe 

a specific format for issuers’ 

commission schedules or other 

documents that detail the applicable 

direct or indirect compensation. Instead, 

HHS proposes in 45 CFR 148.410(c)(5) 

that, to the extent the commission 

schedules or other documents that 

detail the applicable direct or indirect 

compensation are used to satisfy the 

requirements of this section, the 

schedules or other documents would be 

required to comply with the minimum 

standards outlined therein regarding 

agent and broker compensation. This 

proposed requisite information includes 

information on initial and renewal 

commissions and explanation of the 

qualifying thresholds for the payment of 

indirect compensation to an agent and 

broker, at a minimum. Commission 

schedules are widely used in the health 

insurance industry and customarily 

include this minimum informational 

content with respect to initial and 

renewal commission rates. However, the 

format can vary by issuer. It is HHS’s 

view, at this time, that the benefits of 

prescribing and standardizing the 

proposed minimum required content in 

a specific format for commission 

schedules would not outweigh the costs 

of implementation. HHS is also not 

proposing a specific format for the 

additional documentation that detail the 

applicable direct or indirect 

compensation. Instead, HHS is 

proposing minimum standards for the 

information that must be disclosed and 

permitting issuers to determine what 

documentation may contain that 

information and be used to satisfy the 

disclosure requirement, whether the 

issuer calls it a commission schedule or 

refers to it by another term. HHS invites 

comments on these proposals, 

especially the considerations of costs 

and benefits associated with 

standardizing the format for 

compensation disclosure. 

HHS proposes that issuers would be 

required to make the necessary 

disclosures prior to the potential 

policyholder finalizing plan selection 

and, in addition, that the disclosure be 

included on any documentation 

confirming the individual’s enrollment, 

as required under section 2746(b) of the 

PHS Act. This requirement would 

ensure that the person who is choosing 

the coverage and agreeing to be 

financially responsible for premiums 

and other payments due under the 

insurance contract (who HHS proposes 

to define as the ‘policyholder’) can 

evaluate whether and to what extent the 

advice they received from an agent or 

broker may be influenced by the agent’s 

or broker’s compensation arrangement 

with an issuer prior to finalizing the 

plan selection. 

HHS considered whether to propose 

requiring that issuers make these 

required disclosures to all plan 

enrollees, but are of the view that such 

a requirement would be needlessly 

burdensome. First, requiring issuers to 

disclose direct and indirect agent or 

broker compensation to each person in 

an enrollment group would be 

unreasonable as many enrollees are 

infants, minor children, or otherwise 

not responsible for choosing their health 

insurance coverage. As noted, requiring 

the disclosure be made to the 

policyholder would allow that 

individual to evaluate whether and to 

what extent the advice they received 

from an agent or broker may be 

influenced by the compensation 

received. HHS expects that the 

policyholder would be able to relay 

information from the disclosure to the 

other enrollees on the policy, similar to 

how the policyholder is entrusted to 

relay other information about the plan 

selection to the other enrollees in the 

policy. HHS is also of the view that 

requiring issuers to make these 

disclosures to each enrollee could place 

a larger burden on issuers and enrollees 

than necessary without adding 

meaningful consumer benefit. For 

example, to the extent an issuer uses the 

agent or broker to provide the 

disclosure, requiring disclosure to be 

made to all enrollees prior to finalizing 

the plan selection would necessitate an 

adult, seeking to purchase coverage for 

their family, to bring that entire family 

to the office of the insurance agent or 

broker in order to receive the disclosure 

of information about direct and indirect 

compensation before finalizing the plan 

selection in which the family members 

would be enrolled. 

A similar burden exists for virtual or 

telephonic enrollments. The agent or 

broker assisting with the enrollment 

would need to contact each individual 

on the plan prior to finalizing plan 

selection, which could be timeconsuming or nigh impossible. This 

would require all plan enrollees to be 

near a phone or computer at the time of 

enrollment and either answer a phone 

call or respond to an email prior to 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51743 

finalizing plan selection. This amount of 

coordination seems unduly burdensome 

on consumers and would virtually 

eliminate parents’ ability to finalize a 

plan selection while their children are 

in school, as the children would 

generally be unable to be contacted by 

the agent or broker while attending 

classes. In addition, emails or phone 

calls from unknown individuals are 

often not answered or responded to 

promptly, if at all, meaning a 

policyholder would need to first contact 

the other plan enrollees, telling them to 

expect a call from the agent or broker, 

which adds another layer of 

coordination and complexity. 

Additionally, children or 

developmentally challenged individuals 

may not be mentally capable of 

providing their consent or may not have 

an email address or phone number, 

meaning if they were not physically 

with the policyholder at the time 

directly prior to finalizing plan 

selection, contacting them would be 

impossible. 

c. Reporting Requirements 

To implement the requirement at 

section 2746(c) of the PHS Act that 

health insurance issuers offering 

individual health insurance coverage or 

short-term, limited-duration insurance 

must annually report to HHS prior to 

the beginning of open enrollment any 

direct or indirect compensation 

provided to an agent or broker 

associated with enrolling individuals in 

such coverage, HHS proposes in new 

proposed 45 CFR 148.410(d)(1) to 

require issuers to submit to HHS, in a 

form and manner prescribed by the 

Secretary, any direct and indirect 

compensation provided to agents and 

brokers associated with enrolling 

individuals in individual health 

insurance coverage and short-term, 

limited-duration insurance sold by the 

issuer. HHS intends to collect data 

similar to the data collected by DOL on 

compensation of insurance producers 

for group health plans subject to the 

Form 5500 reporting requirement. 

DOL utilizes the Form 5500 series as 

part of its overall reporting and 

disclosure under ERISA. DOL collects 

information related to insurance on 

Form 5500 Schedule A, which includes 

the identifying information for the 

issuer and the agent or broker, and the 

amount of compensation paid to agents 

and brokers. Issuers would be expected 

to submit the reporting data to HHS 

through an online system. HHS is 

proposing to require issuers provide, for 

each payment recipient and 

intermediary organization in a specific 

month of the reporting year, a single 

row of data in comma-separated values 

(CSV) format containing the following 

fields/columns: (1) Payor Federal Tax ID 

Number (FTIN); (2) Recipient Identifier 

Type (‘‘NPN’’ for writing agents or 

‘‘FTIN’’ for payments made to 

intermediaries); (3) Recipient Identifier 

Value (the actual number); (4) The date 

on which the payment was made to the 

payment recipient; (5) Direct 

Compensation, expressed as a dollar 

amount (the commission); (6) Indirect 

Compensation, expressed as a dollar 

amount, if any (if indirect compensation 

payment amount was made in that 

month, for example, a bonus was paid 

out; bonuses for annual performance are 

accounted for in December of the 

reporting year rather than disaggregated 

into 12 parts for each month); (7) the 

basis for indirect compensation—a text 

field allowing entry of what the grounds 

for the indirect compensation were 

(bonus, incentive, etc.); and (8) other 

information specified by the Secretary, 

which may include, for example, 

distinguishing between individual 

health insurance coverage and shortterm, limited-duration insurance, listing 

the appointment arrangement duration, 

and providing the number of plans the 

agent sold. 

HHS proposes to add new proposed 

45 CFR 148.410(d)(2) to specify that the 

reporting by issuers would be required 

to reflect both compensation 

arrangements directly between the 

writing agent or broker and the issuer, 

and compensation arrangements from 

the issuer to the writing agent or broker 

involving one or more intermediary 

organizations in connection with the 

sale of individual health insurance 

coverage or short-term, limited-duration 

insurance. Examples of intermediary 

organizations that are often involved in 

the sale, placement, or renewal of 

individual health insurance coverage or 

short-term, limited-duration insurance 

include general line agencies and 

marketing organizations. This proposed 

approach would ensure that the 

information reported annually to HHS 

reflects the full amount of compensation 

received by agents and brokers related 

to the sale, placement, or renewal of 

individual health insurance coverage 

and short-term, limited-duration 

insurance. 

HHS proposes that the annual report 

submitted by issuers to HHS contain 

more detailed information than the 

disclosure to policyholders, including 

information related to intermediary 

organizations as well as actual 

compensation amounts rather than 

payment structures, because HHS 

proposes for the report to be due after 

the end of the year for which 

compensation was paid and prior to the 

beginning of open enrollment for the 

following year. This timeline would 

enable the report to HHS to provide a 

more complete reflection of 

compensation actually provided 

throughout the previous calendar year 

than the disclosure to consumers, which 

must be provided prior to individuals 

finalizing their plan selections and at 

renewal. In addition, requiring issuers 

to provide information to policyholders 

on the compensation arrangements 

between insurance agents or brokers and 

intermediary organizations, like general 

agencies, would substantially increase 

the complexity of the disclosure 

materials without providing the same 

level of consumer benefit. Disclosure of 

direct and indirect compensation is 

intended to inform the consumer of 

considerations, other than the 

consumer’s best interests, that may 

impact the guidance and decisionmaking of the insurance agent or broker. 

HHS is of the view that information 

about whether that compensation would 

first be paid to a general agency and the 

amount of compensation that agency 

would claim before disbursing to the 

agent would not have a similar impact 

on the consumer’s decision-making 

process. However, reporting of this 

additional information to HHS would 

assist HHS in monitoring and enforcing 

compliance with the disclosure 

requirements and ensuring that 

consumer disclosures accurately and 

adequately reflect direct or indirect 

compensation payment practices. 

HHS proposes in new proposed 45 

CFR 148.410(d)(4) to require submission 

to HHS of the required reports on an 

annual basis by the last business day of 

July of the calendar year following the 

applicable reporting period. For 

example, reporting for calendar year 

2022 would be due by July 31, 2023. 

Under this proposed rule, for noncalendar year policies, which may exist 

in the short-term, limited-duration 

insurance market, issuers would be 

required to split the agent and broker 

compensation between the reports for 

two calendar years. For example, for a 

short-term, limited-duration policy in 

effect from December 1, 2022 to 

February 28, 2023, an issuer would be 

required to report the compensation 

paid on the policy for December 2022 in 

the report due by July 31, 2023 and the 

compensation paid on the policy for 

January and February 2023 in the report 

due July 31, 2024. HHS seeks comment 

on this proposal, and would provide 

additional guidance in the final rule on 

special cases, as may be necessary, 

including indirect compensation paid 

51744 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

for enrollments that span multiple years 

based on comments on this proposed 

rule and feedback from regulated 

entities subject to these requirements 

and other stakeholders. 

Section 2746(c) of the PHS Act states 

that issuers must report the data to HHS 

prior to the beginning of open 

enrollment. The last business day of 

July would align with the statute and 

would avoid significant overlap with 

the qualified health plan certification 

process and states’ rate and form review 

processes. This date would also provide 

HHS with adequate time to review the 

submitted reports prior to the beginning 

of open enrollment for the following 

year and would provide issuers ample 

time after the reporting year to prepare 

and validate the information. 

d. Applicability 

In new proposed 45 CFR 148.410(e), 

HHS is proposing to codify the 

provisions of section 2746(d) of the PHS 

Act, which establishes a transition rule 

for these new requirements and 

provides that the requirements would 

not be applicable to contracts executed 

between health insurance issuers 

offering individual health insurance 

coverage or short-term, limited-duration 

insurance and agents or brokers before 

December 27, 2021. HHS therefore 

proposes that these new requirements 

would apply to contracts executed 

between an agent or broker and a health 

insurance issuer offering individual 

health insurance coverage or short-term, 

limited-duration insurance on or after 

December 27, 2021. For purposes of 

determining the date of contract 

execution, HHS proposes to deem the 

execution of contractual addenda or 

revisions to the material terms of a preexisting contract to be the execution of 

a new contract to which the disclosure 

and reporting requirements would 

apply. 

HHS does not expect that many 

appointment contracts would be newly 

executed between the effective date of 

the statutory requirement, December 27, 

2021, and the beginning of the first 

reporting period proposed in these 

proposed rules, January 1, 2022. As a 

result, under this proposal, HHS may 

exercise discretion and adopt a 

temporary policy of relaxed 

enforcement in connection with the 

enforcement of the proposed reporting 

requirement on a case-by-case basis for 

appointment contracts executed and 

policies effective within the period 

between December 27, 2021 and January 

1, 2022, and encourages states that are 

the primary enforcers of these 

requirements to adopt a similar 

enforcement approach. 

HHS seeks comment on all aspects of 

these proposals regarding the 

definitions, disclosure requirements, 

reporting requirements, and 

applicability. 

C. Part 150—CMS Enforcement of Group 

and Individual Insurance Market and 

Provider and Facility Requirements 

Section 2723 of the PHS Act 

contemplates that states would exercise 

primary enforcement authority with 

respect to issuers that offer health 

insurance coverage in the individual or 

group markets within the state. If a state 

notifies HHS that it does not have the 

authority to enforce PHS Act 

requirements, or if HHS determines that 

a state is not substantially enforcing 

PHS Act requirements with respect to 

issuers, HHS has the responsibility to 

enforce the PHS Act provision or 

provisions in that state and has 

delegated this enforcement authority to 

CMS. 

The CAA enacted new provisions of 

the PHS Act that require health 

insurance issuers to submit certain 

information to HHS or the Departments. 

This includes the requirement under 

section 2746(c) for issuers that offer 

individual health insurance coverage 

and issuers that offer short-term, 

limited-duration insurance coverage to 

annually report to the Secretary of HHS, 

prior to the beginning of open 

enrollment, any direct or indirect 

compensation provided to an agent or 

broker associated with enrolling 

individuals in such coverage. Health 

insurance issuers must also report to the 

Departments certain information 

regarding air ambulance services under 

section 2799A–8 and certain 

information regarding pharmacy 

benefits and drug costs under section 

2799A–10. Additionally, in accordance 

with section 2799A–9(a)(4), issuers 

must submit to HHS an annual 

attestation of compliance with the 

prohibition of gag clauses on price and 

quality information under section 

2799A–9. Under section 2723 of the 

PHS Act, states have the opportunity to 

be the primary enforcers of sections 

2746(c), 2799A–8, 2799A–9(a)(4), and 

2799A–10. However, HHS is of the view 

that states would not look to enforce 

these PHS Act provisions because they 

are requirements for issuers to report to 

HHS or the Departments, and states 

would not have access to the 

submissions to assess compliance. 

Instead, HHS anticipates that states 

would focus resources on implementing 

and enforcing the other requirements in 

the CAA. HHS therefore proposes to 

have direct enforcement authority for 

these issuer requirements in all states, 

unless the state notifies HHS of its 

intent to enforce. HHS solicits 

comments on this approach and 

whether there are states that intend to 

assist with enforcement of any of these 

requirements. 

In cases where there is a question 

about whether the state is failing to 

substantially enforce one or more PHS 

Act requirements, the procedures 

outlined in 45 CFR 150.201 through 

150.221 govern. First, if CMS is satisfied 

that there is a reasonable question 

whether there has been a failure to 

substantially enforce one or more PHS 

Act requirements, CMS notifies the 

appropriate state parties, providing 30 

days to respond. Then, if CMS makes a 

preliminary determination that the state 

is failing to substantially enforce, the 

state is provided an opportunity to show 

evidence of substantial enforcement. If 

CMS determines that the state’s failure 

to substantially enforce has not been 

corrected, then CMS would send a final 

determination notice to the state 

identifying which requirements CMS 

would directly enforce and the effective 

date for such enforcement. Finally, 

current regulations provide a transition 

mechanism by which a state can assume 

or resume primary enforcement of the 

applicable PHS Act requirement(s). 

Most states currently work to ensure 

that issuers offering health insurance 

coverage in the individual and group 

markets comply with applicable 

requirements of the PHS Act. Although 

some states lack direct state statutory 

authority to enforce, CMS has worked 

with many of these states to implement 

collaborative enforcement agreements. 

Through these agreements, a state 

performs the same regulatory functions 

with respect to the applicable 

individual and group insurance market 

requirements of Title XXVII of the PHS 

Act (market reform provisions) as it 

does to ensure compliance with state 

law, and seeks to achieve voluntary 

compliance from issuers if the state 

finds a potential violation. Similarly, 

consumers continue to contact the state 

with inquiries and to submit complaints 

relating to the market reform provisions. 

Under this collaborative approach, if the 

state finds a potential violation and is 

unable to obtain voluntary compliance 

from an issuer, it would refer the matter 

to CMS for possible enforcement action. 

If a state lacks authority or ability to 

enforce PHS Act requirements, then 

CMS would directly enforce the relevant 

market reform provisions in the state 

with respect to health insurance issuers 

in the group and individual markets. 

Finally, CMS directly enforces the 

relevant market reform provisions with 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51745 

28See section 2723(b) of the PHS Act. Also see 

45 CFR 150.301 through 150.347. 

respect to non-Federal governmental 

plans in all states. 

When CMS is responsible for 

enforcement with respect to issuers and 

non-Federal governmental plans, 

enforcement tools CMS uses in 

accordance with 45 CFR 150.301 

through 150.347, include policy form 

review, complaint-driven investigations, 

and market conduct examinations. CMS 

also has authority to impose civil money 

penalties against health insurance 

issuers in a state in which CMS is 

directly enforcing the PHS Act, and 

against non-Federal governmental plan 

sponsors in all states that fail to comply 

with applicable PHS Act 

requirements.28

The CAA adds additional PHS Act 

requirements that apply to group health 

plans, including non-Federal 

governmental plans, health insurance 

issuers, providers, including providers 

of air ambulance services (providers), 

and health care facilities (facilities). 

CMS would enforce these provisions to 

the extent they apply to non-Federal 

governmental plans in all states and to 

issuers in states where CMS directly 

enforces in the aforementioned manner. 

With respect to enforcement of the 

requirements applicable to providers 

and facilities, the CAA largely mirrors 

the current issuer enforcement 

structure: Namely, states are the primary 

enforcers, with CMS only enforcing if a 

state fails to substantially enforce, and 

these proposed rules reflect this 

structure. However, the provisions of 

section 106(a) of the No Surprises Act 

that apply to providers of air ambulance 

services are enforced directly by CMS. 

The CAA and these proposed rules 

would require CMS to follow the 

process set forth in section 1128A of the 

SSA to impose civil money penalties on 

providers or facilities for noncompliance with provisions of Part E of 

Title XXVII of the PHS Act and on 

providers of air ambulance services for 

non-compliance with the requirement to 

submit data under section 106(a) of the 

No Surprises Act. The applicable state 

authority involved in oversight and 

enforcement of providers and facilities 

would likely be different in most, if not 

all, states from the applicable state 

authority responsible for oversight and 

enforcement over health insurance 

issuers. 

HHS proposes to make conforming 

amendments to existing regulations in 

subparts A, B, and D and to add a new 

subpart E to 45 CFR part 150 to provide 

for CMS direct enforcement when a 

state is not substantially enforcing PHS 

Act requirements pertaining to 

providers and facilities and when a 

provider of air ambulance services fails 

to submit data required under section 

106(e) of the No Surprises Act. HHS also 

proposes to amend existing regulations 

to add references to 45 CFR part 149, 

which implements these PHS Act 

requirements and to which the 

enforcement regulations in 45 CFR part 

150 would also apply. Additionally, 

HHS proposes revising subpart C of 45 

CFR part 150 to align these provisions 

with industry standards and clarify the 

existing CMS enforcement procedures, 

and equip CMS with additional tools to 

fulfill its enforcement responsibilities 

under the PHS Act. 

HHS proposes revising the title of 45 

CFR part 150 to reflect the extension of 

CMS’s enforcement authority to 

providers and facilities in states that are 

not substantially enforcing the 

requirements in Part E of Title XXVII of 

the PHS Act and to providers of air 

ambulance services for purposes of the 

data submission requirements under 

section 106(e) of the No Surprises Act. 

1. Basis and Scope (45 CFR 150.101) 

HHS proposes to add to 45 CFR 

150.101(a), which captures the basis of 

45 CFR part 150, references to section 

2799B–4 of the PHS Act, which subjects 

providers and facilities to the 

enforcement provisions of the PHS Act 

that HHS proposes to implement in 45 

CFR part 150, and section 106(e) of the 

No Surprises Act, which subjects 

providers of air ambulance services to 

civil money penalties for failure to 

comply with data reporting 

requirements. HHS also proposes to 

make conforming edits to expand the 

scope of 45 CFR part 150 in 45 CFR 

150.101(b), including to specifically 

outline the enforcement framework that 

HHS proposes to implement under 

subpart E of 45 CFR part 150. This 

includes proposed amendments to 45 

CFR 150.101(b)(2) to add a reference to 

45 CFR part 149 to expand the scope of 

the framework applicable to 

enforcement over health insurance 

issuers. In addition, HHS proposes to 

add a new paragraph (b)(3) to capture 

the scope of the framework applicable to 

enforcement over providers and 

facilities. 

2. Definitions (45 CFR 150.103) 

HHS proposes to amend 45 CFR 

150.103 to revise the introductory text 

to add a reference to 45 CFR part 149 

and to add definitions related to 

enforcement against providers and 

facilities. Specifically, HHS proposes to 

define the term ‘‘facility’’ for purposes 

of 45 CFR part 150 to mean a health care 

facility, an emergency department of a 

hospital, and an independent 

freestanding emergency department, as 

those terms are defined in 45 CFR 

149.30, and any other facility subject to 

the requirements in Part E of Title 

XXVII of the PHS Act. HHS also 

proposes to define the term ‘‘provider’’ 

for purposes of 45 CFR part 150 to mean 

a physician or other health care 

provider, as that term is defined in 45 

CFR 149.30, as well as a provider of air 

ambulance services, as that term is 

defined in 45 CFR 149.30. These 

combined definitions would make 45 

CFR part 150 easier to read and 

understand, as the enforcement 

procedures outlined in 45 CFR part 150 

apply to all the aforementioned parties 

separately defined in 45 CFR 149.30. 

HHS also proposes to make conforming 

amendments to add references to 45 

CFR part 149 to the definition of 

‘‘individual health insurance policy or 

individual policy’’ and the definition of 

‘‘PHS Act requirements.’’ HHS seeks 

comment on these proposals. 

3. State Enforcement (45 CFR 150.201) 

Under 45 CFR 150.201, states have 

primary enforcement authority over 

health insurance issuers with respect to 

PHS Act requirements, unless the state 

notifies CMS that it has not enacted 

legislation to enforce or that it is not 

otherwise enforcing PHS Act 

requirements or the state fails to 

substantially enforce the PHS Act 

requirements that apply to issuers, in 

which case CMS would enforce those 

requirements. These proposed rules 

would make a conforming amendment 

at 45 CFR 150.201 to specify that states 

also have primary enforcement 

authority over providers and facilities 

that furnishes items or services to 

individuals in the state, unless the state 

notifies CMS that it has not enacted 

legislation to enforce or that it is not 

otherwise enforcing PHS Act 

requirements or the state fails to 

substantially enforce the PHS Act 

requirements that apply to providers 

and facilities, in which case CMS would 

enforce these requirements. Under this 

proposed rule, a state would be the 

primary enforcer of the PHS Act 

requirements against providers or 

facilities that furnish services via 

telehealth to individuals located in the 

state, even in circumstances where the 

provider or facility is located in a 

different state. While many states 

require licensure of out-of-state 

telehealth providers furnishing care to 

individuals within the state, HHS 

understands that this is not always true, 

and that many states have relaxed 

licensure requirements in response to 

51746 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

29See, for example, Center for Connected Health 

Policy. Cross-State Licensing. Available at: https:// 

www.cchpca.org/topic/cross-state-licensingprofessional-requirements/ (last accessed August 8, 

2021); and Federation of State Medical Boards. U.S. 

States and Territories Modifying Requirements for 

Telehealth in Response to COVID–19. (July 28, 

2021.) Available at: https://www.fsmb.org/ 

siteassets/advocacy/pdf/states-waiving-licensurerequirements-for-telehealth-in-response-to-covid19.pdf. 

the COVID–19 public health 

emergency.29 HHS seeks comment on 

whether the approach taken in this 

proposed rule presents challenges with 

respect to providers or facilities 

furnishing telehealth services. 

HHS also proposes to make a 

technical correction to the title of 

subpart B to reflect that this subpart 

would apply to multiple PHS Act 

requirements rather than only one 

requirement. HHS proposes to revise the 

title of subpart B by changing 

‘‘requirement’’ to ‘‘requirements’’ as the 

term should have been plural. 

4. Circumstances Requiring CMS 

Enforcement (45 CFR 150.203) 

HHS proposes to make technical 

corrections to the introductory language 

at 45 CFR 150.203 to reflect that this 

section would apply to multiple PHS 

Act requirements rather than only one 

requirement. HHS is not proposing 

further amendments because HHS 

would interpret and apply the current 

language outlining the circumstances 

requiring CMS enforcement, which 

generally refers to states, to situations 

involving providers and facilities in the 

same manner in which it applies to 

health insurance issuers in situations 

where the applicable state authority 

fails to substantially enforce applicable 

PHS Act requirements. 

5. Sources of Information Triggering an 

Investigation of State Enforcement (45 

CFR 150.205) 

Section 150.205(d) provides that if 

information regarding the status of state 

enforcement of PHS Act requirements 

comes from state governors and 

commissioners of insurance, such 

information may trigger a CMS 

investigation of whether a state is failing 

to substantially enforce these 

requirements. Because governors, 

commissioners, and other applicable 

state insurance agency or entity leaders 

may not have oversight or enforcement 

authority over providers and facilities, 

information regarding state enforcement 

of PHS Act requirements with respect to 

providers and facilities may instead 

come from the state departments of 

health or other state agencies with that 

authority. Additionally, some states 

have officials distinct from the 

commissioners of insurance who are 

responsible for regulating health 

maintenance organizations (HMOs). 

Therefore, HHS proposes to amend 45 

CFR 150.205(d) to add a reference to 

officials responsible for regulating 

HMOs, directors of public health or any 

other state department, agency, or board 

with applicable oversight authority over 

entities subject to PHS Act requirements 

to the list of state officials who may be 

the source of information triggering an 

investigation. Proposed amendments to 

45 CFR 150.205(e)(2) would correct a 

typographical error which incorrectly 

referenced in 45 CFR 148.120 instead of 

45 CFR 148.210. 

6. Notice to the State (45 CFR 150.211) 

Under these proposed rules, in 

determining whether a state is failing to 

substantially enforce PHS Act 

requirements that apply to providers 

and facilities, CMS would use the 

processes and standards already 

established with respect to state 

enforcement of applicable PHS Act 

requirements with respect to health 

insurance issuers in 45 CFR 150.205 

through 150.221. CMS is of the view 

that these processes can largely also 

apply to state enforcement of the new 

PHS Act requirements applicable to 

providers and facilities without change. 

However, the current regulatory 

language at 45 CFR 150.211 specifies 

that if there is a reasonable question 

regarding state enforcement, CMS will 

send a notice to the governor or chief 

executive officer of the state, the 

insurance commissioner or chief 

insurance regulatory official, or the 

official responsible for regulating 

HMOs. Those individuals may not be 

the appropriate recipients if there is a 

reasonable question regarding state 

enforcement of PHS Act requirements 

that apply to providers or facilities. 

Therefore, HHS proposes to amend 45 

CFR 150.211 to add paragraph (d) 

specifying that a notice of possible 

failure to substantially enforce PHS Act 

requirements in such circumstances 

would be sent to the relevant state 

official responsible for regulating 

providers and facilities and to make 

conforming changes to paragraph (b) to 

reflect that notices would be sent to the 

insurance commissioner or chief 

insurance regulatory official when there 

is a reasonable question regarding state 

enforcement of PHS Act requirements 

that apply to health insurance issuers. 

Paragraph (c) would be retained, which 

provides that such notices would be 

sent to the state official responsible for 

regulating HMOs, if different from the 

official listed in paragraph (b), when the 

alleged failure involves HMOs. 

7. Transition to State Enforcement (45 

CFR 150.221) 

HHS proposes to make conforming 

amendments to 45 CFR 150.221(a)(2) to 

provide that the discussions between 

CMS and state officials regarding 

transition to state enforcement would 

include instructions to providers and 

facilities, rather than instructions only 

to issuers. HHS also proposes to amend 

45 CFR 150.221(b) to similarly add 

references to providers and facilities to 

make clear that CMS may also negotiate 

a process to ensure that, to the extent 

practicable, and as permitted by law, its 

records documenting compliance and 

other relevant areas of CMS’s 

enforcement operations are made 

available for incorporation into the 

records of the applicable state authority 

responsible for oversight and 

enforcement of providers and facilities. 

These proposed changes would capture 

a reference to the new PHS Act 

requirements enacted in the CAA 

applicable to providers and facilities to 

ensure the regulation includes 

situations where a transition back to 

state enforcement of applicable Federal 

requirements over such entities is 

appropriate. HHS also proposes to 

replace the language about making CMS 

enforcement records available to states 

by removing the language about 

‘‘incorporation into the records’’ of the 

State regulatory authority that would 

assume enforcement to more generally 

refer to making such records available to 

the State regulatory authority. 

8. Basis for Initiating an Investigation 

(45 CFR 150.303) 

Currently, 45 CFR 150.303 provides 

that if CMS receives information that an 

issuer or non-Federal governmental plan 

may be failing to meet a PHS Act 

requirement, then an investigation may 

be warranted. HHS proposes to revise 45 

CFR 150.303(a) to specify that CMS may 

undertake either an investigation or a 

market conduct examination, rather 

than only an investigation, within its 

discretion based on this information. 

This proposed revision would align 45 

CFR 150.303(a) with the regulatory text 

in 45 CFR 150.313(b), which provides 

that CMS may initiate a market conduct 

examination when, based on the 

information described in 45 CFR 

150.303, it finds evidence that a specific 

entity may be in violation of the PHS 

Act. 

When determining whether to 

undertake an investigation or 

examination, CMS would consider a 

number of different factors, including 

the facts and circumstances surrounding 

the potential violation, the potential 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51747 

30 86 FR 36899 and 36979 (July 13, 2021). 31Pursuant to section 2723(b)(1) of the PHS Act, 

CMS enforces section 2726 of the PHS Act and 

other applicable provisions of Title XXVII of the 

PHS Act with respect to non-Federal governmental 

group health plans in all states and with respect to 

health insurance issuers selling products in the 

individual and fully insured group markets in states 

that elect not to enforce or fail to substantially 

enforce section 2726 of the PHS Act and other 

applicable provisions of Title XXVII of the PHS Act. 

number of impacted consumers, an 

issuer or non-Federal governmental 

plan’s past history of substantiated 

complaints, the effect of the alleged 

violation on a consumer, the deterrent 

effect that knowledge of the 

investigation or examination may have 

on others who may consider committing 

similar violations, and other 

considerations that CMS deems 

appropriate. 

HHS further proposes to revise 45 

CFR 150.303(a) to add a new sentence 

to clarify that CMS may review any 

information it deems useful to 

determine if a violation of the PHS Act 

has occurred when undertaking an 

investigation or examination. HHS 

proposes this change to more clearly 

describe current CMS procedures, 

which may include a review of 

applicable data and documentation, 

such as paid and denied claims, 

summary plan documents, summary of 

benefits and coverage, and notifications 

to enrollees, to assess whether the entity 

may be in violation of the PHS Act. 

Additionally, HHS proposes a 

conforming amendment to paragraph 

(a)(2) to capture a reference to reports 

from providers and facilities—along 

with reports from state insurance 

departments, the NAIC and other 

Federal and state agencies—as potential 

sources or types of information that 

could lead to an investigation or 

examination to ensure compliance with 

the applicable PHS Act requirements. 

HHS proposes to remove and replace 

45 CFR 150.303(c), which currently 

states that a complaint may be directed 

to any CMS regional office. HHS 

proposes this change because the CMS 

regional offices no longer process 

complaints. Instead, CMS offers several 

methods for entities or individuals to 

submit complaints. These methods vary 

based on the type of coverage or plan in 

which an individual is enrolled and the 

substance of the complaint, and are 

described on CMS’s public web pages. 

For PHS Act complaints regarding nonFederal governmental plans, consumers 

can email PHIG@cms.hhs.gov. For 

complaints with respect to issuers, 

consumers in states that are directly 

enforcing the applicable PHS Act 

provision are referred to the state 

department of insurance; for states in 

which CMS is directly enforcing PHS 

Act requirements, consumers can email 

MarketConduct@cms.hhs.gov. The list 

of current states in which CMS is 

directly enforcing one or more PHS Act 

provisions is available on the CMS 

website at https://www.cms.gov/CCIIO/ 

Programs-and-Initiatives/HealthInsurance-Market-Reforms/compliance. 

HHS proposes to remove the 

complaint provision that is currently in 

45 CFR 150.303(c), and replace it with 

a new provision specifying that CMS 

may conduct random or targeted 

investigations and market conduct 

examinations of issuers and non-Federal 

governmental plans to ensure 

compliance with the PHS Act. HHS is 

proposing this regulation to codify 

another enforcement tool for CMS for 

situations where it is responsible for 

enforcement of the Federal market 

reform provisions. The proposal is also 

intended to codify in regulation the new 

statutory obligations established under 

the CAA for HHS to conduct certain 

specified audits and reviews. More 

specifically, section 2799A–1(a)(2)(A)(ii) 

of the PHS Act directs HHS to conduct 

audits of a sample of claims data with 

respect to a year (beginning with 2022) 

from not more than 25 group health 

plans and health insurance issuers 

offering group or individual health 

insurance coverage to verify compliance 

with the qualifying payment amount 

requirements described in section 

2799A–1 of the PHS Act, as enacted by 

the No Surprises Act. HHS expects 

states with primary enforcement 

authority with respect to section 

2799A–1 of the PHS Act will carry out 

enforcement activities to verify 

compliance with the qualifying payment 

amount requirements in section 2799A– 

1 of the PHS Act and 45 CFR 149.140 

to the extent that the qualifying 

payment amount is used to determine 

the ‘‘recognized amount’’ for purposes 

of calculating cost sharing under section 

2799A–1. As noted in 45 CFR 

149.140(f), HHS intends to carry out 

these statutory provisions in states in 

which CMS is directly enforcing using 

the market conduct examination 

procedures described in 45 CFR 

150.313, as proposed to be amended, 

when conducting random and targeted 

audits for compliance with the 

requirements for applying a qualifying 

payment amount.30 Additionally, 

section 203 of Title II of Division BB of 

the CAA amended section 2726(a) of the 

PHS Act to expressly require group 

health plans and health insurance 

issuers offering group or individual 

health insurance coverage 31 that 

provide both medical/surgical (M/S) 

benefits and mental health or substance 

use disorder (MH/SUD) benefits and 

that impose nonquantitative treatment 

limitations (NQTLs) on MH/SUD 

benefits to perform, document, and 

make available upon request to HHS (or 

the applicable state authority) 

comparative analyses of the design and 

application of their NQTLs. PHS Act 

section 2726(a)(8)(B), as added by 

section 203 of Title II of Division BB of 

the CAA further directs HHS to request, 

review, and report to Congress its 

findings regarding NQTL comparative 

analyses from group health plans and 

health insurance issuers each year. In 

order to satisfy the newly codified 

statutory obligations for HHS to conduct 

these specified audits and reviews 

under the CAA, CMS currently intends 

to focus random or targeted 

investigations under the new proposed 

45 CFR 150.303(c) on ensuring 

compliance with (i) qualifying payment 

amount requirements described in 

section 2799A–1 of the PHS Act, which 

was added by the No Surprises Act, and 

(ii) the NQTL comparative analysis 

requirements described in section 

2726(a)(8) of the PHS Act. CMS is 

committed to robust enforcement of 

these new requirements and ensuring 

compliance with other applicable PHS 

Act provisions. HHS is of the view that 

this is a necessary and appropriate 

exercise of its enforcement and 

rulemaking authorities under sections 

2723 and 2792 of the PHS Act, 

respectively. Further, HHS is of the 

view that having authority to conduct 

random or targeted investigations or 

examinations for all PHS Act 

provisions, including but not limited to 

qualifying payment amount 

requirements described in section 

2799A–1 of the PHS Act, which was 

added by the No Surprises Act and 

codified in regulations at 45 CFR 

149.140, and the NQTL comparative 

analysis requirements described in 

section 2726(a)(8) of the PHS Act, 

would create a more efficient and 

effective enforcement program in that 

CMS would be able to proactively 

ensure consumers are receiving the 

benefits to which they are entitled 

rather than having to wait to receive a 

complaint or other information 

indicating a potential PHS Act violation 

in situations where CMS is responsible 

for enforcement. For example, an 

investigation or examination by CMS of 

one responsible entity may identify a 

potential systematic error or issue that 

the agency suspects may impact 

similarly situated entities subject to 

CMS’s enforcement authority. These 

proposed rules would provide CMS 

51748 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

32HHS is not proposing to incorporate a reference 

to market conduct examinations in 45 CFR 150.307 

due to the separate regulation, 45 CFR 150.313, that 

addresses and details CMS’s authority and 

processes for conducting such examinations. 

with another enforcement tool to 

investigate whether these other entities 

have experienced the same error or 

issue without having to wait to receive 

a complaint or other information 

indicating a PHS Act violation to take 

action. 

HHS also proposes a conforming 

amendment to the title for this section 

to also capture a reference to 

examinations and to remove the 

reference to a potential violation. This 

would align with the proposed 

amendments to 45 CFR 150.303, as 

outlined in this section of the preamble, 

to allow CMS to randomly select nonFederal governmental plans and issuers 

for investigation and market conduct 

examination to ensure compliance with 

applicable PHS Act requirements when 

CMS is responsible for enforcement, as 

well as the other amendments to 45 CFR 

150.303 to specify that CMS may also 

undertake an examination based on 

information the agency receives that an 

issuer or non-Federal governmental plan 

may be failing to meet a PHS Act 

requirement. 

HHS seeks comment on these 

proposed changes. 

9. Notice to Responsible Entities (45 

CFR 150.307) 

HHS proposes to revise several 

provisions in 45 CFR 150.307 regarding 

the notice that is sent to responsible 

entities when there is a potential 

violation, to reflect and clarify the 

current CMS enforcement procedures. 

The proposed revisions are further 

intended to provide responsible entities 

additional information and clarity 

regarding CMS’s authority and process 

for conducting investigations.32

Specifically, HHS proposes to replace 

the word ‘‘investigation’’ with 

‘‘information’’ in the introductory text 

to align this section with the regulatory 

text in 45 CFR 150.303, which generally 

addresses information that may warrant 

an investigation or an examination. HHS 

is also proposing to revise the 

introductory text to clarify that the 

notice would also be sent to initiate 

investigations of randomly selected nonFederal governmental plans and issuers 

under new proposed 45 CFR 150.303(c). 

The proposed revision to the 

introductory text also provides that 

CMS would also send this notice to the 

responsible entity or entities in 

situations where information received 

under 45 CFR 150.303(a) indicates a 

potential violation. HHS is also 

proposing to remove the provision in 45 

CFR 150.307(a), which currently states 

that the notice describes the substance 

of the complaint or other information 

received, and to replace it with a new 

provision specifying that the notice 

describes the information received 

under 45 CFR 150.303 that gives rise to 

the investigation or notifies the 

responsible entity that it was selected by 

CMS for a random investigation under 

45 CFR 150.303(c). HHS is proposing 

this change to clarify that CMS does not 

provide personally identifiable 

information (PII) or PHI via a complaint 

without the complainant’s express 

consent. HHS also would not disclose 

confidential or other sensitive 

information protected from disclosure 

that may be included in the complaint. 

However, the notice would include 

other information sufficient to explain 

the potential violation(s) and provide 

the responsible entity an adequate 

opportunity to respond to the 

allegation(s), or to notify the responsible 

entity of its selection for, and the PHS 

Act provision(s) that are the focus of, a 

random investigation under new 

proposed 45 CFR 150.303(c). 

Consistent with current text at 45 CFR 

150.307(b), CMS generally contacts the 

responsible entity once it reviews the 

information received under 45 CFR 

150.303 and provides the responsible 

entity 30 days to respond with 

additional information, including 

documentation of compliance as 

described in 45 CFR 150.311. CMS also 

directs the responsible entity to submit 

any data or documentation that CMS 

identifies as relevant and may use to 

assess whether the responsible entity is 

violating applicable PHS Act provisions. 

However, there are circumstances in 

which CMS has determined it is not 

appropriate to provide the responsible 

entity 30 days to respond. Such 

circumstances include complaints 

involving urgent medical issues, 

allegations of fraud or abuse, and when 

CMS must complete the investigation 

within a specified time frame under the 

statute. Accordingly, CMS proposes to 

revise 45 CFR 150.307(b) to clarify that 

the notice provided under this section 

would direct the responsible entity to 

provide any documentation that CMS 

identifies as relevant to the 

investigation, in addition to other 

documentation, such as documentation 

of compliance as described in 45 CFR 

150.311, that in the responsible entity’s 

view would aid CMS in evaluating the 

allegations and the entity’s compliance 

with the PHS Act requirements 

identified in the notice. HHS further 

proposes to revise 45 CFR 150.307(b) 

such that CMS would provide the date 

by which the responsible entity must 

respond to the notice; the goal is to 

ensure the efficient administration of 

investigations. CMS anticipates 

generally providing 14 days for 

response. In circumstances that warrant 

a more rapid response, CMS anticipates 

providing at least 24 hours for response. 

In circumstances that warrant additional 

time, such when CMS requests large 

amounts of data, CMS anticipates 

providing more than 14 days for 

response. HHS is not proposing any 

amendments to 45 CFR 150.307(c) and 

therefore would retain the requirement 

that the notice also inform the 

responsible entity that a civil money 

penalty may be assessed. Lastly, under 

the new proposed 45 CFR 150.307(d), 

the notice would also inform 

responsible entities that CMS may 

require the responsible entity to take 

certain corrective actions as necessary to 

bring it into compliance with the 

applicable PHS Act requirements. HHS 

believes it is necessary and appropriate 

to highlight, as part of this notice, that 

corrective actions may be required 

because, similar to the potential for a 

civil money penalty to be assessed, this 

is another potential outcome of an 

investigation. 

HHS seeks comment on these 

proposed changes. 

10. Request for Extension (45 CFR 

150.309) 

HHS is proposing conforming 

amendments to revise 45 CFR 150.309 

by removing the references to 30 days 

and clarifying that a responsible entity 

may request an extension when it 

cannot prepare a response or provide 

the requested information to CMS by the 

deadline provided in the notice under 

45 CFR 150.307, and that failure to 

respond by the initial deadline provided 

in the notice or an extended deadline 

granted by CMS may result in CMS’s 

imposition of a civil money penalty 

based upon the complaint or other 

information alleging or indicating a 

violation of PHS Act requirements. To 

align with proposed amendments to 45 

CFR 150.313, HHS proposes to codify 

examples of what CMS would consider 

good cause, which include but are not 

limited to situations when a responsible 

entity indicates it has limited staffing 

resources to prepare a response, or 

when a responsible entity requests 

clarification from CMS regarding its 

request for information. 

11. Responses to Allegations of 

Noncompliance (45 CFR 150.311) 

HHS proposes a conforming revision 

at 45 CFR 150.311(e) to add a reference 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51749 

to the proposed notice to initiate a 

market conduct examination under new 

proposed 45 CFR 150.313(e), which is 

described in section III.C.12 of the 

preamble. 

12. Market Conduct Examinations (45 

CFR 150.313) 

The proposed revisions to 45 CFR 

150.313 would bring this rule in line 

with standard industry practices 

adopted by the NAIC, which CMS 

generally follows, and would also codify 

additional CMS procedures for market 

conduct examinations. HHS also 

proposes several amendments to 

reorganize the order and presentation of 

information in this regulation to 

improve clarity. 

First, HHS proposes to remove the last 

sentence in 45 CFR 150.313(b) as the 

proposed adoption of 45 CFR 150.313(f), 

which would outline the requirements 

for responsible entities to provide the 

requested documentation to CMS, make 

this sentence unnecessary. HHS further 

proposes to revise 45 CFR 150.313(b) to 

clarify that CMS may initiate a market 

conduct examination of a randomly 

selected non-Federal governmental plan 

or issuer subject to CMS’s enforcement 

authority. This change would align with 

the proposed revision at 45 CFR 

150.303(c). 

Second, HHS proposes to revise 45 

CFR 150.313(c) to clarify that CMS 

would appoint examiners when CMS 

initiates a random market conduct 

examination. Conforming amendments 

are also proposed to the opening clause 

of 45 CFR 150.313(c) to replace the 

current reference to ‘‘investigation’’ 

with ‘‘further review’’ to more clearly 

distinguish the authority to initiate a 

market conduct examination from the 

authority to conduct an investigation. 

HHS additionally proposes to 

redesignate 45 CFR 150.313(e)(1) and (2) 

as 45 CFR 150.313(h)(1) and (2) and also 

proposes to replace the title of the 

newly designated section to clarify that 

it pertains to a draft market conduct 

examination report. HHS also proposes 

to revise 45 CFR 150.313(e)(1), proposed 

to be redesignated at 45 CFR 

150.313(h)(1), to remove the description 

of CMS review of the draft report and 

replace it with a general statement 

indicating that upon completion of the 

examination, CMS would compose and 

provide a draft report to the responsible 

entity. HHS further proposes to include 

in redesignated 45 CFR 150.313(h)(1) a 

description of the contents of the draft 

report. Under current CMS market 

conduct examination practices and as 

reflected in the second sentence in 

proposed 45 CFR 150.313(h)(1), the 

draft report would include the scope of 

the examination, any findings of a PHS 

Act violation, and any proposed actions 

the entity would need to take to correct 

such violation. The entity then has an 

opportunity to respond to the draft 

report and either concur with the draft 

report findings or disagree. As reflected 

in proposed 45 CFR 150.313(h)(2)(i), if 

the responsible entity agrees with one or 

more of the findings in the draft report, 

the entity can inform CMS of any 

corrective action planned or already 

undertaken. If the entity disagrees with 

one or more of the findings, then the 

entity may provide evidence to CMS to 

support its disagreement. This is 

included in proposed 45 CFR 

150.313(h)(2)(ii). 

HHS further proposes to redesignate 

45 CFR 150.313(e)(3), which currently 

addresses CMS’s reply to a response to 

the market conduct examination report 

from the responsible entity, as a new 45 

CFR 150.313(i) and revise it so it instead 

pertains to the final market conduct 

examination report. In the new 

proposed introductory sentence, HHS 

proposes that upon receipt of a response 

from the responsible entity under new 

paragraph (h)(2), CMS would provide a 

final examination report containing the 

agency’s findings relevant to each 

examination issue, including the 

agency’s reply to the responsible entity’s 

responses to the findings in the draft 

report for each examination issue. HHS 

also proposes to replace the current 

references to issuer or non-Federal 

governmental plan with references to 

responsible entity in the redesignated 45 

CFR 150.313(i)(1) through (4), currently 

codified at 45 CFR 150.313(e)(3)(i) 

through (iv), for consistency in 

terminology. HHS also proposes to 

clarify CMS’s review and response to 

the responsible entity’s corrective 

actions, if applicable, in 45 CFR 

150.313(i)(3) and (4). Under current 

CMS market conduct examination 

practices and the proposed 45 CFR 

150.313(i), this report finalizes the draft 

report and includes the entity’s 

concurrence or disagreement with each 

cited PHS Act violation, and CMS’s 

responses thereto. As detailed in 45 CFR 

150.313(i)(1) through (5), CMS’s reply 

would consist of one or more of the 

following: (1) Concurrence with the 

responsible entity’s position; (2) 

disagreement with the responsible 

entity’s position; (3) a determination 

that the corrective actions implemented 

by the responsible entity sufficiently 

addressed the identified PHS Act 

violation; (4) a determination that the 

corrective actions implemented by the 

responsible entity have not sufficiently 

addressed the identified PHS Act 

violation, and information on any 

further corrective actions deemed 

necessary by CMS; or (5) a notice to the 

responsible entity that has disagreed 

with a CMS finding and that has not 

undertaken corrective actions that there 

exists a violation of applicable PHS Act 

requirements and any actions the 

responsible entity must take to correct 

such violation. These changes are 

designed to align HHS regulations with 

industry standards for market conduct 

examinations. These industry standards, 

promulgated by NAIC, are used 

throughout the country by states and 

issuers and are generally followed by 

CMS. The adoption in regulation of the 

standard industry practices and 

procedures would bring uniformity to 

the framework CMS and the various 

states use to undertake market conduct 

examinations. 

HHS proposes to add new text at 45 

CFR 150.313(e) to provide that CMS 

would initiate a market conduct 

examination by providing written notice 

to the responsible entity and to describe 

the substance of the examination notice 

call letter CMS would send to an entity 

to initiate a market conduct 

examination. HHS proposes that this 

would be a written notice from CMS to 

the responsible entity and that it would 

include the following information: (1) A 

description of the information received 

under 45 CFR 150.303(a) that served as 

the basis for CMS’s determination that 

a market conduct examination was 

warranted or notification that the entity 

was selected by CMS for a market 

conduct examination under 45 CFR 

150.303(c); (2) a description of the scope 

of the examination; (3) the identification 

of the examiners; (4) a statement that a 

civil money penalty may be assessed; 

and (5) a statement that CMS may 

require a plan of corrective action. HHS 

is of the view that this set of core 

information, which is intended to 

mirror the information provided in the 

notice to responsible entities under 45 

CFR 150.307 when CMS initiates an 

investigation, is the appropriate vehicle 

to commence a market conduct 

examination and is standard industry 

practice. 

HHS also proposes to add 45 CFR 

150.313(f) to generally describe the 

documentation collection and the initial 

directive for the responsible entity to 

submit the information that CMS 

identifies as relevant for the 

examination, the time frame for the 

entity’s response, and to specify the 

penalties for failing to respond timely, 

which may include civil money 

penalties. This initial directive would 

provide the deadline by which 

responsible entities must forward the 

51750 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

requested documentation or request an 

extension. Any extension request would 

be required to be submitted in writing, 

detail the reasons for the extension 

request and show good cause. CMS 

would consider the following 

circumstances a non-exhaustive list of 

examples of good cause: (i) Limited 

staffing resources to prepare a response, 

or (ii) when a responsible entity 

requests clarification from CMS 

regarding its request for information. If 

CMS grants the extension, the 

responsible entity would be required to 

respond to the documentation request 

within the time frame specified in 

CMS’s letter granting the extension 

request. The new proposed language in 

45 CFR 150.313(f) also specifies that if 

the responsible entity fails to respond 

within the initial deadline provided or 

within the extended time frame (if 

granted by CMS), then CMS may impose 

a civil money penalty based on the 

information provided in the complaint 

or other information alleging or 

indicating a violation of PHS Act 

requirements. New proposed 45 CFR 

150.313(f) would also capture the 

opportunity for the responsible entity to 

provide additional information, 

including documentation of compliance 

as described in 45 CFR 150.311, that the 

responsible entity believes would aid 

CMS in conducting the examination. 

HHS also proposes to add 45 CFR 

150.313(g) to describe the fieldwork 

CMS undertakes during a market 

conduct examination. Under current 

CMS practices and as reflected in new 

proposed 45 CFR 150.313(g), during the 

course of the examination, CMS may 

request additional information or 

documentation to support the review of 

the entity’s data or other documents to 

assess the responsible entity’s 

compliance with applicable PHS Act 

requirements. The request for additional 

information or documentation would 

specify the time frame allotted for the 

responsible entity to respond and 

forward the requested materials. Similar 

to the proposed initial documentation 

requests, HHS proposes to capture a 

similar framework that permits 

responsible entities to make a written 

request for an extension from CMS 

detailing the reason(s) for the request 

and showing good cause. Examples of 

what CMS would consider good cause 

include, but are not limited to, when a 

responsible entity indicates it has 

limited staffing resources to prepare a 

response, or when a responsible entity 

requests clarification from CMS 

regarding its request for information. If 

CMS grants the extension, the 

responsible entity would be required to 

respond to the documentation request 

within the time frame specified in 

CMS’s letter granting the extension 

request. As detailed in the new 

proposed 45 CFR 150.313(g), the failure 

to respond and provide such additional 

requested documentation within the 

initial time frame, or within the 

extended time frame (if granted by 

CMS), may result in CMS’s imposition 

of a civil money penalty based upon the 

complaint or other information when 

there is sufficient evidence indicating a 

violation of applicable PHS Act 

requirements. This new proposed rule 

also states that, during the examination, 

CMS may identify and notify the 

responsible entity of any potential PHS 

Act violations and, in such 

circumstances, would provide the entity 

an opportunity to respond and submit 

evidence of its compliance or other 

documentation the responsible entity 

believes would aid CMS in conducting 

the examination. 

HHS seeks comment on these 

proposed changes. 

13. Determining the Amount of the 

Penalty—Mitigating Circumstances (45 

CFR 150.319) 

HHS proposes to make a conforming 

edit to 45 CFR 150.319 to add reference 

to the notice to initiate a market conduct 

examination under the new proposed 45 

CFR 150.313(e). 

14. Determining the Amount of 

Penalty—Aggravating Circumstances (45 

CFR 150.321) 

HHS proposes to amend 45 CFR 

150.321 to add a new paragraph (d), 

which would specify that an entity’s 

failure to cooperate with an 

investigation or market conduct 

examination would be considered an 

aggravating circumstance for purposes 

of determining the aggregate amount of 

a penalty. HHS is proposing this 

additional aggravating circumstance 

based on CMS’s experience conducting 

examinations and investigations. More 

specifically, HHS has experienced 

situations where responsible entities fail 

to respond to requests for information in 

a timely fashion or otherwise generally 

fail to cooperate in a CMS enforcement 

action. For example, in one market 

conduct examination, an issuer failed to 

respond to CMS’s requests for 

information for 6 months thereby 

causing significant delay to the 

examination. HHS is of the view that it 

is appropriate and necessary to add this 

additional aggravating circumstance to 

provide CMS a vehicle to increase the 

amount of a civil money penalty (up to 

but not in excess of the statutory 

maximum) in situations when the 

responsible entity fails to cooperate 

with a CMS investigation or market 

conduct examination and there is 

sufficient evidence indicating a 

violation of an applicable PHS Act 

requirement to discourage these 

behaviors. 

HHS seeks comment on this proposed 

change. 

15. Settlement Authority (45 CFR 

150.325) 

HHS proposes to make a conforming 

edit to 45 CFR 150.325 to add reference 

to the notice to initiate a market conduct 

examination under the new proposed 45 

CFR 150.313(e). 

16. Definitions (45 CFR 150.401) 

HHS proposes to make a conforming 

amendment to the definition of 

respondent to add a reference to a notice 

of proposed determination of a civil 

money penalty issued under the 

proposed new 45 CFR 150.515. This 

proposed amendment would provide for 

the same process for administrative 

hearings regarding civil money penalties 

assessed against providers and facilities 

as the process established for nonFederal governmental plans and issuers 

in states where CMS directly enforces 

PHS Act requirements. 

17. Filing of Request for Hearing (45 

CFR 150.405) 

HHS proposes to make a conforming 

edit to 45 CFR 150.405(a) to add 

reference to a notice of proposed 

determination of a civil money penalty 

issued under the new proposed 45 CFR 

150.515. This would provide providers 

and facilities 30 days from the date of 

such notice to request a hearing with an 

administrative law judge to appeal the 

proposed determination. This would 

align with the existing time frame 

provided to non-Federal governmental 

plans and issuers for such appeals in 

states where CMS directly enforces PHS 

Act requirements. 

18. Issues To Be Heard and Decided by 

ALJ (45 CFR 150.417) 

HHS proposes to make a conforming 

amendment to add a reference to 

proposed 45 CFR 150.513 for factors an 

Administrative Law Judge (ALJ) can 

apply to determine the reasonableness 

of a civil money penalty. This proposed 

amendment would provide for the same 

process for administrative hearings 

regarding civil money penalties assessed 

against providers and facilities as the 

process established for non-Federal 

governmental plans, and issuers in 

states where CMS directly enforces PHS 

Act requirements. 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51751 

33The applicability of section 1128A of the SSA 

varies depending on the applicable enforcement 

provision. For violations stemming from Section 

2799B–4 of the PHS Act, provisions of subsections 

(c) (with the exception of the first sentence of 

paragraph (1) of such subsection), (d), (e), (g), (h), 

(k), and (l) apply. For violations stemming from 

Section 106 of the No Surprises Act, all provisions 

other than subsections (a) and (b) and the first 

sentence of subsection (c)(1) apply. 

19. Evidence (45 CFR 150.445) 

HHS proposes to make conforming 

amendments to 45 CFR 150.445(g), 

which pertains to admissibility of 

evidence of acts other than those at 

issue in the instant case, to add 

references to the proposed 45 CFR 

150.513 (which describes factors and 

mitigating and aggravating 

circumstances considered in 

determination of the amount of civil 

money penalty assessed against a 

provider or facility), and proposed 45 

CFR 150.505 and 150.515 (which 

describe notices sent by CMS to 

responsible entities regarding potential 

violations and civil money penalties 

against a provider or facility). HHS 

proposes to make a similar conforming 

amendment to 45 CFR 150.445(j), which 

pertains to admissibility of evidence of 

willingness and ability to enter into and 

complete a corrective action plan, to 

add a reference to proposed 45 CFR 

150.505. These proposed amendments 

would provide for the same process for 

administrative hearings regarding civil 

money penalties assessed against 

providers and facilities as the process 

established for non-Federal 

governmental plans, and issuers in 

states where CMS directly enforces PHS 

Act requirements. In addition, HHS 

proposes to amend 45 CFR 150.445(h) to 

provide for cross-examination of 

witnesses, to conform to (i) the right to 

cross-examination already implicit in 45 

CFR 150.419, and (ii) section 

1128A(c)(2) of the SSA, as required in 

section 2799B–4 of the PHS Act. The 

right to cross-examine witnesses is 

fundamental and is being explicitly 

included here to ensure that the process 

for hearings is fair for all parties. 

20. Sanctions (45 CFR 150.455) 

HHS proposes to amend 45 CFR 

150.455 to add the payment of an 

aggrieved party’s attorneys’ fees and 

other costs as an additional sanction for 

violations of 45 CFR part 149, to 

conform to section 1128A(c)(4) of the 

SSA. Section 2799B–4 of the PHS Act 

subjects civil money penalties assessed 

under that section to the requirements 

in section 1128A(c) of the SSA (with the 

exception of the first sentence of section 

1128A(c)(1)). Section 1128A(c)(4) of the 

SSA provides that an ALJ may sanction 

parties and attorneys for ‘‘failing to 

comply with an order or procedure, 

failing to defend an action, or other 

misconduct as would interfere with the 

speedy, orderly, or fair conduct of the 

hearing.’’ Subsection (g) thereof 

specifically provides for ordering the 

party or attorney to pay attorneys’ fees 

and other costs caused by the failure or 

misconduct. 

D. 45 CFR Part 150, Subpart E—CMS 

Enforcement With Respect to Providers 

and Facilities 

HHS proposes to add a new subpart 

E to 45 CFR part 150, to implement the 

requirements of section 2799B–4 of the 

PHS Act. This new subpart would 

specify the CMS enforcement processes 

with respect to the requirements of Part 

E of Title XXVII of the PHS Act (and its 

implementing regulations at 45 CFR part 

149) that would be applicable to 

providers and facilities subject to CMS’s 

enforcement authority. With respect to 

potential violations of these 

requirements, HHS proposes to follow a 

similar investigatory process to that 

which currently exists in subpart C of 

45 CFR part 150, which applies to 

investigations of possible violations by 

plans and issuers. HHS is proposing to 

use that similar process to maximize 

efficiency. HHS believes that the general 

steps of reviewing complaints or other 

indications of a potential PHS Act 

violation, notifying responsible parties 

of the investigation and directing them 

to provide information and 

documentation for CMS to review and 

assess compliance, and directing the 

responsible party to take corrective 

actions to remedy any violations 

identified are prudent and appropriate 

to apply to investigations of providers 

and facilities. HHS believes that this 

proposed approach would allow CMS to 

effectively enforce the new 

requirements and ensure that providers 

and facilities are sufficiently informed 

of the steps in and how to comply with 

the investigation process. 

In contrast, HHS is proposing a 

different civil money penalty process to 

comply with the statutory requirements 

of the No Surprises Act. Section 

2799B–4 of the PHS Act delineates the 

process for imposition of civil money 

penalties if a provider or facility is 

found to be in violation of Part E of Title 

XXVII of the PHS Act. Section 106(e) of 

the No Surprises Act sets forth the 

process for imposition of civil money 

penalties if a provider of air ambulance 

services fails to provide data required in 

section 106(a) of the No Surprises Act. 

In both cases, the process must follow 

section 1128A of the SSA.33 Therefore, 

although many of the investigative 

processes applicable to providers and 

facilities are the same as those 

applicable to plans and issuers, HHS 

proposes to codify the provider and 

facility enforcement procedures in new 

subpart E to 45 CFR part 150. 

21. General Rule Regarding the 

Imposition of Civil Money Penalties (45 

CFR 150.501) 

Section 2799B–4 of the PHS Act 

authorizes HHS to apply a civil money 

penalty with respect to a provider or 

facility that is found to be in violation 

of Part E of Title XXVII of the PHS Act. 

Section 106(e) of the No Surprises Act 

authorizes HHS to apply a civil money 

penalty with respect to a provider of air 

ambulance services that fails to submit 

all information required under section 

106(a) of the No Surprises Act by the 

required date. HHS proposes to codify 

those provisions in 45 CFR 150.501. 

22. Basis for Initiating an Investigation; 

Injunctive Relief (45 CFR 150.503) 

HHS proposes that CMS may conduct 

an investigation based on any 

information that indicates a provider or 

facility is failing to comply with PHS 

Act requirements. Proposed 45 CFR 

150.503(a) would list the same sources 

of information as those that CMS may 

consider when investigating potential 

violations by plans or issuers, including 

complaints (such as complaints received 

under the process established in 45 CFR 

149.150 with respect to plans and 

issuers or 45 CFR149.450 with respect 

to providers and facilities), reports from 

state insurance departments, the NAIC, 

other Federal and state agencies, and 

any other information that indicates 

potential noncompliance with PHS Act 

requirements. HHS proposes to add 

state health and medical boards as 

additional sources in 45 CFR 150.503(a), 

as they may be relevant sources to 

indicate potential noncompliance by 

providers and facilities. 

HHS proposes language in 45 CFR 

150.503(b) that would clarify who may 

file a complaint. This would include 

any entity or individual, or any entity or 

personal representative acting on that 

individual’s behalf, who believes that a 

right to which the aggrieved person is 

entitled under PHS Act requirements is 

being, or has been, denied or abridged 

as a result of any action or failure to act 

on the part of a provider or facility. This 

would ensure consistency with 45 CFR 

150.303(b) which provides that such 

individuals or entities may submit a 

complaint with respect to non-Federal 

governmental plans and issuers. 

HHS proposes in 45 CFR 150.503(c) to 

establish CMS’s authority to conduct 

51752 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

random or targeted investigations of 

providers and facilities. This would 

allow CMS to proactively identify and 

address issues of non-compliance, and it 

would generally align CMS’s 

enforcement procedures with respect to 

providers and facilities with those 

applicable to non-Federal governmental 

plans and issuers under newly proposed 

45 CFR 150.303(c), but would exclude 

any reference to market conduct 

examinations, as these are typically 

used in connection with group health 

plans and health insurance issuers, and 

not with providers. 

HHS proposes to codify in 45 CFR 

150.503(d) the statutory language, 

located at section 1128A(k) of the SSA 

and included via section 2799B–4 of the 

PHS Act, that allows HHS to bring an 

action to prevent a provider or facility 

from engaging in activity that would 

make the provider or facility subject to 

a civil money penalty. HHS also 

proposes that CMS may bring an action 

to prevent a provider or facility from 

concealing, removing, encumbering, or 

disposing of assets that may be required 

in order to pay any civil money penalty 

that might be imposed or to seek other 

appropriate relief. 

23. Notice to Responsible Entities (45 

CFR 150.505) 

HHS proposes to specify in 45 CFR 

150.505 that if CMS receives 

information that indicates a possible 

violation, or selects a provider or facility 

for investigation, or fails to receive data 

required in 45 CFR 149.460, CMS would 

provide a written notice to the provider 

or facility. The notice would describe 

the information that prompted the 

investigation or notify the provider or 

facility that it was selected for 

investigation. The notice would also 

state that a civil money penalty may be 

assessed, and that CMS may require a 

plan of corrective action. The notice 

would provide the date by which the 

provider or facility must respond with 

additional information, including 

documentation of compliance. In the 

case of a provider of air ambulance 

services, this could include a date by 

which the provider of air ambulance 

services would be required to submit 

any missing information from the report 

required under 45 CFR 149.460. HHS 

anticipates that CMS would generally 

provide 14 days for providers and 

facilities to respond to the notice with 

the requested documentation. This 

would provide sufficient time for a 

recipient to investigate the substance of 

an allegation and respond to CMS. HHS 

anticipates that the documentation or 

information necessary to respond to 

most complaints should be readily 

available to a provider (for example, in 

the form of computerized patient billing 

records, etc.). A 14-day window for 

response should provide sufficient time 

to gather this documentation and 

formulate a response. In circumstances 

that warrant a more rapid response, 

such as complaints involving urgent 

medical issues or allegations of fraud 

and abuse, CMS may shorten the time 

frame for the provider or facility to 

provide the requested documentation 

but does not anticipate requesting 

responses within less than 24 hours. 

24. Request for Extension (45 CFR 

150.507) 

HHS proposes to provide in 45 CFR 

150.507 that if a provider or facility 

received a notice of possible violation 

from CMS, and the provider or facility 

could not prepare a response by the 

deadline provided in the notice under 

45 CFR 150.505, such provider or 

facility may make a written request for 

an extension. The request must detail 

the reason for the extension request and 

must show good cause. Examples of 

what CMS would consider good cause 

include, but are not limited to, when a 

responsible entity indicates it has 

limited staffing resources to prepare a 

response, or when a responsible entity 

requests clarification from CMS 

regarding its request for information. If 

CMS grants the extension, the provider 

or facility would be required to respond 

within the specified time frame. Failure 

to respond within the time allotted 

would result in CMS initiating an action 

to impose a civil money penalty. 

25. Responses to Notice of Potential 

Violations (45 CFR 150.509) 

HHS proposes to provide in 45 CFR 

150.509 that CMS would consider all 

relevant documentation provided when 

determining whether to impose a civil 

money penalty, including information 

from the complainant and information 

from the provider or facility. In 

responding to an allegation of 

noncompliance, a provider or facility 

may submit medical bills; notice and 

consent forms signed by the participant, 

beneficiary, or enrollee (or an 

authorized representative); proof of 

public disclosure of patient protections 

against balance billing; or any other 

evidence of compliance. 

In 45 CFR 150.509(d), HHS proposes 

that a provider or facility may also 

submit to CMS any evidence 

documenting the development and 

implementation of internal policies and 

procedures to ensure compliance with 

the PHS Act and section 106(a) of the 

No Surprises Act, as applicable. One 

example would be a voluntary 

compliance program. A voluntary 

compliance program should, at a 

minimum: Effectively articulate and 

demonstrate the fundamental mission of 

compliance and the provider or 

facility’s commitment to the compliance 

process; include the name of the 

individual in the organization who is 

responsible for compliance; include an 

effective monitoring system to identify 

practices that do not comply with PHS 

Act requirements or section 106(a) of 

the No Surprises Act, as applicable, and 

to provide reasonable assurance that 

violations are detected in a timely 

manner; and address procedures to 

improve internal policies when 

noncompliant practices are identified. 

In 45 CFR 150.509(e), HHS proposes 

that a provider or facility may respond 

to an allegation of noncompliance by 

submitting evidence documenting the 

provider or facility’s record of previous 

compliance with PHS Act requirements 

or section 106(a) of the No Surprises 

Act, as applicable. Examples of previous 

compliance would include copies of 

signed notice and consent forms or 

prominently displayed disclosures of 

patient protections against balance 

billing. 

Section 106(e)(2) of the No Surprises 

Act provides that HHS may waive a 

penalty when a provider of air 

ambulance services submits only some 

of the data required in section 106(a) of 

the No Surprises Act if the provider of 

air ambulance services makes a good 

faith effort to submit the missing data. 

In 45 CFR 150.509(f), HHS proposes that 

such a provider can exhibit a good faith 

effort by submitting and implementing a 

corrective action plan that: (i) Identifies 

the cause underlying the submission of 

incomplete data and effectively 

articulates and demonstrates the 

measures that would be taken to submit 

complete data; (ii) provides the timeline 

for submitting complete data; (iii) 

provides the name of the individual in 

the organization responsible for 

overseeing corrective actions and 

submitting complete data; and (iv) 

addresses procedures to improve 

internal policies to ensure that 

incomplete data reports are identified 

and completed prior to submission for 

future reporting periods. HHS is of the 

view that these elements would 

demonstrate that a provider of air 

ambulance services is committed to 

identifying and correcting any errors 

that prevented it from submitting the 

complete set of data required. HHS 

seeks comment on this proposal. 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51753 

34See 42 CFR 405.378 which provides that the 

interest rate on overpayments and underpayments 

is the higher of: (i) The rate as fixed by the Secretary 

of the Treasury after taking into consideration 

private consumer rates of interest prevailing on the 

date of final determination as defined in paragraph 

(c) of this section; or (ii) The current value of funds 

rate (this rate is published annually in the Federal 

Register by the Secretary of the Treasury, subject to 

quarterly revisions). See also 45 CFR 30.18(b)(2) 

which provides ‘‘unless a different rate is 

prescribed by statute, contract, or a repayment 

agreement, the rate of interest charged shall be the 

rate established annually by the Secretary of the 

Treasury pursuant to 31 U.S.C. 3717.’’ 

26. Liability for Penalties (45 CFR 

150.511) 

In 45 CFR 150.511, HHS proposes to 

codify the provision in section 

1128A(c)(1) of the SSA that provides 

that HHS will not commence any action 

to impose a civil money penalty unless 

such action is commenced within 6 

years from the date when the violation 

occurred. 

HHS also proposes that a principal is 

liable for penalties for the actions of the 

principal’s agent acting within the scope 

of his or her agency, without limiting 

the underlying liability of the agent. 

27. Amount of Penalty (45 CFR 150.513) 

At 45 CFR 150.513(a)(1), HHS 

proposes to codify the statutory 

language that permits HHS to impose a 

civil money penalty in an amount not to 

exceed the sum of $10,000 per violation 

if a provider or facility is found to be in 

violation of a PHS Act requirement. At 

45 CFR 150.513(a)(2), HHS proposes to 

codify the statutory language found in 

section 106(e) of the No Surprises Act 

that permits HHS to impose a civil 

money penalty in an amount not to 

exceed the sum of $10,000 if a provider 

of air ambulance services fails to submit 

required data. Such civil money 

penalties would be in addition to any 

other penalties prescribed or allowed by 

law. 

HHS proposes that CMS would 

consider all relevant documentation 

provided when determining whether to 

impose a civil money penalty, including 

information from the complainant, 

provider (including a provider of air 

ambulance services), or facility. In 45 

CFR 150.513(b), HHS proposes that if 

CMS were to determine that it would 

impose a civil money penalty, there are 

several factors that would be considered 

when determining the amount of such 

penalty. CMS would consider the nature 

of claims of noncompliance and the 

circumstances under which such claims 

were presented. CMS would also 

consider: the degree of culpability of the 

provider or facility against which a civil 

money penalty is proposed; the provider 

or facility’s history of prior violations, 

including whether CMS or any state 

previously found the provider or facility 

liable for civil or administrative 

sanctions in connection with a violation 

of PHS Act requirements or section 

106(a) of the No Surprises Act, as 

applicable; the frequency of the 

violation, taking into consideration 

whether any violation is an isolated 

occurrence, represents a pattern, or is 

widespread; and the level of financial 

and other impacts on affected 

individuals. CMS would also consider 

any other matters as justice may require. 

In 45 CFR 150.513(c), HHS proposes 

that for every violation subject to a civil 

money penalty, if there are substantial 

or several mitigating circumstances, the 

aggregate amount of the penalty would 

be set at an amount sufficiently below 

the statutory maximum of $10,000 to 

reflect the mitigating circumstance. As 

guidelines for considering the 

circumstances listed earlier, CMS would 

consider several factors as mitigating 

circumstances. First, CMS would 

consider the provider or facility’s record 

of prior compliance. If, for example, the 

provider or facility implemented and 

followed a compliance plan before 

receipt of the notice of potential 

noncompliance, implementing and 

following such compliance plan would 

be considered a mitigating 

circumstance. If the provider or facility 

had no previous complaints against it 

for noncompliance, that would also be 

considered a mitigating circumstance. 

Second, CMS would consider the 

gravity of the violation(s). For example, 

it would be considered a mitigating 

circumstance if the provider or facility 

made adjustments to its business 

practices to come into compliance with 

PHS Act requirements so that the 

provider or facility: (i) Identified all 

participants, beneficiaries, and 

enrollees, or all plans or issuers, that are 

or were wrongly billed; (ii) withdrew 

the bill or reimbursed the affected 

individuals, or plans or issuers, that 

were wrongly billed so that, to the 

extent practicable, the affected 

individuals, plans or issuers are in the 

same position that they would have 

been in had the violation not occurred; 

and (iii) completed those adjustments to 

its business practices in a timely 

manner. Finally, it would be considered 

a mitigating circumstance if the 

provider or facility demonstrated that 

the violation was an isolated 

occurrence. 

HHS also proposes in 45 CFR 

150.513(d) that CMS would consider 

certain factors to be aggravating 

circumstances. HHS proposes that for 

every violation subject to a civil money 

penalty, if there are substantial or 

several aggravating circumstances, CMS 

may set the aggregate amount of the 

penalty at an amount sufficiently close 

to or at the $10,000 permitted by statute 

to reflect that fact. If the frequency of 

violation indicates a pattern of 

widespread occurrence, that would be 

considered an aggravating circumstance. 

If the violation(s) resulted in significant 

financial and other impacts on the 

average affected individual(s), plan or 

issuer, that would also be considered an 

aggravating circumstance. Finally, if the 

provider or facility does not provide 

documentation showing that 

substantially all of the violations were 

corrected, that would be considered an 

aggravating circumstance. 

In 45 CFR 150.513(e), HHS proposes 

that if certain criteria are met, CMS 

would waive a penalty. Section 2799B– 

4(b)(4) of the PHS Act provides that 

HHS will waive a civil money penalty 

if the provider or facility does not 

knowingly violate, and should not have 

reasonably known it violated, sections 

2799B–1 and 2799B–2 of the PHS Act 

or, in the case of a provider of air 

ambulance services, section 2799B–5 of 

the PHS Act, as long as the provider or 

facility withdraws any erroneous bill 

and, if necessary, reimburses the plan or 

enrollee, within 30 days of the violation 

in an amount equal to the difference 

between the amount billed and the 

amount allowed to be billed, plus 

interest at a rate determined by the 

Secretary. HHS proposes that the 

interest rate be the rate established by 

the Treasury pursuant to 31 U.S.C. 3717. 

That is the rate HHS customarily uses 

for overpayments and underpayments.34

The CAA also provides that HHS will 

waive a civil money penalty in the case 

of a provider of air ambulance services 

that submits only part of the data 

required in section 106(a) of the No 

Surprises Act, if such provider 

demonstrates a good faith effort in 

working with HHS to submit any 

missing information. HHS proposes to 

codify that waiver language in 45 CFR 

150.513(e)(2). 

In 45 CFR 150.513(f), HHS proposes 

that nothing in this proposed section 

limits the authority of CMS to settle any 

issue or case described in the notice 

furnished in accordance with 45 CFR 

150.505 or to compromise on any 

penalty provided for in 45 CFR 150.515. 

This is consistent with the settlement 

authority described in 45 CFR 150.325. 

HHS recognizes that there may be 

certain circumstances in which 

imposition of a civil money penalty 

would create a significant financial 

hardship for a provider or facility. 

Various circumstances may give rise to 

51754 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

financial hardship, potentially 

including the financial impact of natural 

disasters or public health emergencies, 

provider disability or death, and 

provider solvency concerns. The No 

Surprises Act allows HHS to establish a 

hardship exemption to the civil money 

penalties that would otherwise be 

imposed for a violation of Part E of Title 

XXVII of the PHS Act. HHS proposes to 

codify the hardship exemption in 45 

CFR 150.513(g). HHS seeks comments 

regarding this proposal, including 

examples of additional circumstances 

that may warrant a hardship exemption. 

28. Notice of Proposed Determination 

(45 CFR 150.515) 

Section 2799B–4(b)(1) of the PHS Act 

and section 106(e) of the No Surprises 

Act require HHS to apply certain 

subsections of section 1128A of the SSA 

when imposing a civil money penalty 

upon a provider or facility. Specifically, 

section 1128A(c) of the SSA provides 

that HHS may initiate an action for a 

civil money penalty by serving notice of 

the action in any manner authorized 

under Rule 4 of the Federal Rules of 

Civil Procedure. HHS proposes to codify 

that procedural requirement in 45 CFR 

150.515 and specify that such written 

notice would include a description of 

the requirements that CMS believes the 

provider or facility has violated; a 

description of any complaint or other 

information upon which CMS based its 

investigation; and the amount of the 

proposed penalty, including any 

aggravating or mitigating circumstances 

described in 45 CFR 150.513 that were 

considered when determining the 

amount of the proposed penalty. 

HHS proposes that the notice of 

proposed determination would also 

include instructions for the provider or 

facility to respond to the notice, 

including a specific statement of the 

provider or facility’s right to a hearing 

and a statement that failure to request a 

hearing within 30 days of receipt of the 

notice permits the imposition of the 

proposed penalty without right of 

appeal. 

29. Hearing (45 CFR 150.517) 

Section 2799B–4(b)(1) of the PHS Act 

and section 106(e)(3) of the No 

Surprises Act specify that sections 

1128A(c)(2) and (c)(4) of the SSA apply 

to any hearing for a violation of this 

part. Section 1128A(c)(2) of the SSA 

requires HHS to provide written notice 

and an opportunity for an adverse 

determination to be made on the record 

after a hearing at which the provider or 

facility is entitled to be represented by 

counsel, to present witnesses, and to 

cross-examine witnesses. 

Section 1128A(c)(4) of the SSA allows 

the official conducting the hearing to 

sanction a person, including any party 

or attorney, for failing to comply with 

an order or procedure, failing to defend 

an action, or other misconduct that 

would interfere with the speedy, 

orderly, or fair conduct of the hearing. 

Any such sanctions must reasonably 

relate to the severity and nature of the 

failure or misconduct and may include: 

(a) In the case of refusal to provide or 

permit discovery, drawing negative 

factual inferences or treating such 

refusal as an admission by deeming the 

matter, or certain facts, to be 

established; (b) prohibiting a party from 

introducing certain evidence or 

otherwise supporting a particular claim 

or defense; (c) striking pleadings, in 

whole or in part; (d) staying the 

proceedings; (e) dismissal of the action; 

(f) entering a default judgment; (g) 

ordering the party or attorney to pay 

attorneys’ fees and other costs caused by 

the failure or misconduct; and (h) 

refusing to consider any motion or other 

action which is not filed in a timely 

manner. 

Most of these requirements regarding 

hearings, insofar as they apply to 

hearings conducted under 45 CFR part 

150, subpart E, are codified in various 

sections of 45 CFR part 150, subpart D; 

and in these proposed rules HHS is 

additionally proposing amendments to 

45 CFR 150.401, 150.405, 150.417, 

150.445, and 150.455 to conform to 

these requirements. Therefore, HHS 

proposes in 45 CFR 150.517 to specify 

that the provisions in 45 CFR 150.401 

through 150.457 apply to a hearing 

conducted under 45 CFR part 150, 

subpart E. 

HHS proposes in 45 CFR 150.517(b) 

that if CMS finds a provider or facility 

to be in violation of a requirement of 

Part E of Title XXVII of the PHS Act, or 

section 106(a) of the No Surprises Act, 

such provider or facility has a right to 

a hearing pursuant to section 

1128A(c)(2) of the SSA. HHS proposes 

that the provider or facility would be 

required to file a request for hearing 

within 30 days after the date of receipt 

of CMS’s notice of proposed 

determination, to facilitate a timely 

resolution of the matter. 

HHS proposes in 45 CFR 150.517(c) 

that, consistent with 45 CFR 150.347 as 

it applies to non-Federal governmental 

plans and issuers, if the provider or 

facility fails to request a hearing within 

the 30 days, any penalty would become 

final. 

30. Failure To Request a Hearing (45 

CFR 150.519) 

HHS proposes in 45 CFR 150.519 that 

if the provider or facility does not 

request a hearing within 30 days of the 

issuance of the notice of proposed 

determination, or show good cause, as 

determined under 45 CFR 150.405(b) for 

failing to exercise its right to a hearing, 

the determination becomes final, and 

CMS would notify the provider or 

facility of this fact, and the final civil 

money penalty may be assessed by 

CMS. CMS would notify the provider or 

facility in any manner authorized by 

Rule 4 of the Federal Rules of Civil 

Procedure of the means by which the 

provider or facility may satisfy the 

judgment. HHS further proposes that the 

provider or facility would have no right 

to appeal a penalty with respect to 

which it has not requested a hearing in 

accordance with 45 CFR 150.405. This 

aligns with CMS’s enforcement 

procedures when an issuer or nonFederal governmental plan fails to 

request a hearing. 

31. Collateral Estoppel (45 CFR 150.521) 

Section 1128A(c)(3) of the SSA states 

that a provider or facility that requests 

a hearing under this part may not deny 

the essential elements of a criminal 

offense if that provider or facility has 

been convicted of a Federal crime 

charging fraud or false statements 

(whether upon a verdict after trial or 

upon a plea of guilty or nolo 

contendere) and the hearing under this 

part involves the same transaction as the 

criminal action. HHS proposes to codify 

that statutory language in 45 CFR 

150.521. 

32. Judicial Review (45 CFR 150.523) 

HHS proposes in 45 CFR 150.523 that 

any responsible provider or facility 

against which a final decision imposing 

a civil money penalty is entered 

pursuant to this subpart may obtain 

review in the United States Court of 

Appeals for the circuit in which the 

person resides, or where the violation 

occurred, by filing in such court (within 

60 days following the date on which 

such decision becomes final) a written 

petition requesting the decision be 

modified or set aside. Such review 

would be conducted pursuant to section 

1128A of the SSA. A copy of the 

petition would be transmitted by the 

clerk of the court to CMS, and 

thereupon CMS would file in the Court 

the record in the proceeding as provided 

in 28 U.S.C. 2112. 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51755 

35 In addition to this statutory authority and 

parallel contract language, FEHB carrier contracts 

incorporate FEHB regulations found at 5 CFR parts 

890 through 894. As part of this proposed 

rulemaking, OPM proposes to amend FEHB 

regulations to direct carriers to comply with 

requirements of 45 CFR 149.230. 

33. Notice to Other Agencies (45 CFR 

150.525) 

At 45 CFR 150.525, HHS proposes 

that whenever a penalty becomes final, 

CMS would notify certain organizations 

and entities about such action and the 

reasons for it, as appropriate. Section 

150.525 lists the organizations or 

entities that section 1128A(h) of the 

SSA requires to be notified if a penalty 

was imposed against a provider or 

facility: The state or local medical or 

professional association, the state 

Department of Health, the appropriate 

state or local licensing agency or 

organization, and the appropriate 

utilization and quality control peer 

review organization. HHS proposes that 

CMS may additionally notify the 

following agencies by providing the 

final penalty notice, as appropriate: The 

state Department of Insurance or similar 

agency, the state Attorney General, the 

DOL, the Department of the Treasury, or 

OPM by sharing the final penalty notice. 

HHS seeks comment on any other 

organizations or entities that should be 

notified if a provider or facility is 

penalized for a violation of the PHS Act 

or a violation of section 106(a) of the No 

Surprises Act. 

IV. Provisions of the Proposed Rules on 

Reporting Requirements Regarding Air 

Ambulance Services—Office of 

Personnel Management 

OPM proposes requirements related to 

data collection from FEHB carriers with 

respect to air ambulance services 

provided to covered individuals in an 

FEHB plan in the same manner as such 

provisions apply to a group health plan 

or health insurance issuer offering group 

or individual health insurance coverage. 

The OPM rules would clarify that FEHB 

carriers are both authorized and 

required by OPM to report information 

on air ambulance claims data to HHS in 

accordance with the requirements of 45 

CFR 149.230. OPM would coordinate 

with HHS to receive FEHB air 

ambulance data. This data would be 

used by both HHS in its report to 

Congress and by OPM in its oversight of 

the FEHB Program. 

Under 5 U.S.C. 8902(p), FEHB carriers 

must comply with requirements 

described in section 9817 of the Code, 

section 717 of ERISA, and section 

2799A–2 of the PHS Act in the same 

manner as those provisions apply to 

group health plans and health insurance 

issuers offering group or individual 

health insurance coverage. Similarly, 5. 

U.S.C. 8902(p) applies balance billing 

protections described in section 2799B– 

5 of the PHS Act to enrollees in an 

FEHB plan in the same manner as those 

provisions apply to enrollees in a group 

health plan or coverage offered by an 

issuer. Despite these parallel provisions, 

5 U.S.C. 8902(p) does not reference the 

reporting requirements found in section 

9823 of the Code, section 723 of ERISA, 

and section 2799A–8 of the PHS Act. 

Under 5 U.S.C. 8910(a), OPM must 

make a continuing study of the 

operation and administration of the 

FEHB Program, including reports on 

FEHB plans’ experience. Under 5 U.S.C. 

8910(b), each contract between OPM 

and FEHB carriers must contain 

provisions requiring carriers to furnish 

such reasonable reports as OPM deems 

necessary to carry out its functions 

under the FEHB Act. Accordingly, 

OPM’s contract with each FEHB carrier 

requires the carrier to furnish reports 

that OPM finds necessary to properly 

administer the FEHB Program.35 In 

addition, 5 U.S.C. 8910(c) requires 

government agencies to furnish OPM 

with such information and reports as 

may be necessary to enable OPM to 

administer the FEHB Program. 

Enactment of 5 U.S.C. 8902(p) extends 

new surprise billing protections with 

respect to air ambulance services to 

FEHB plan enrollees and their covered 

family members. OPM has determined 

that in order to effectively carry out its 

functions under 5 U.S.C. 8902(p), 

including the underlying goals of 

increased transparency and lowered 

costs for FEHB covered individuals, 

carriers must furnish to HHS air 

ambulance data as provided for in this 

proposed rule. 

FEHB covered individuals utilize air 

ambulance services not only 

domestically but also to transport 

Federal civilian personnel back to the 

United States from service performed 

overseas, in the case of medical 

emergencies. OPM currently lacks 

comprehensive information with respect 

to air ambulance services and claims, 

and this data could prove important to 

OPM as it negotiates benefits and rates 

with carriers pursuant to 5 U.S.C. 8902 

as well as relative to its general 

administration and oversight of the 

FEHB Program. 

OPM maintains authority to study the 

experience of plans and to require 

carriers to furnish reports that OPM 

determines necessary pursuant to 5 

U.S.C. 8910, and this may include 

reports that OPM authorizes as 

necessary to be submitted to HHS where 

OPM deems those reports important in 

support of the FEHB mission. Further, 5 

U.S.C. 8910(c) authorizes HHS to share 

data with OPM that is necessary for 

OPM’s study and oversight of the FEHB 

Program. For these reasons, OPM 

proposes to authorize and require FEHB 

carriers to submit air ambulance data to 

HHS. OPM would coordinate with HHS 

to receive FEHB air ambulance services 

data for its administrative and oversight 

functions of the FEHB Program under 5 

U.S.C. 8910. OPM would enforce carrier 

compliance with reporting requirements 

to HHS with respect to FEHB plans. 

OPM would enforce compliance 

through its contracts with the carriers. 

OPM understands the need to ensure 

stakeholder and consumer privacy when 

data is shared with OPM. HHS has taken 

steps to ensure that claims-level data 

elements would be limited. OPM would 

collect and store any data it receives 

through IT systems that meet all 

security protocols established by OPM. 

When using these data, OPM would deidentify and aggregate data to protect 

the confidentiality of proprietary and 

personal information. 

OPM requests comment on its 

proposal to require air ambulance 

services claims data to be reported by 

FEHB carriers to HHS and for HHS to 

share this data with OPM. 

V. Collection of Information 

Requirements—The Department of 

Health and Human Services 

Under the Paperwork Reduction Act 

of 1995 (PRA), the Departments are 

required to provide 60-day notice in the 

Federal Register and solicit public 

comment before a collection of 

information requirement is submitted to 

the Office of Management and Budget 

(OMB) for review and approval. These 

proposed rules contain information 

collection requirements (ICRs) that are 

subject to review by OMB. A description 

of these provisions is given in the 

following paragraphs with an estimate 

of the annual burden, summarized in 

Table 7. To fairly evaluate whether an 

information collection should be 

approved by OMB, section 3506(c)(2)(A) 

of the PRA requires that the 

Departments seek comment on the 

following issues: 

• The need for the information 

collection and its usefulness in carrying 

out the proper functions of the agencies. 

• The accuracy of the Departments’ 

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 

51756 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

36See 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. 

37Based on data from medical loss ratio (MLR) 

annual report for the 2019 MLR reporting year, 

available at https://www.cms.gov/CCIIO/Resources/ 

Data-Resources/mlr. 

38National Association of Insurance 

Commissioners, 2019 Accident and Health Policy 

Experience Report. https://content.naic.org/sites/ 

default/files/publication-ahp-lr-accident-healthreport.pdf. 

39Based on information found in the National 

Insurance Producer Registry’s Producer Database 

(PDB). 

affected public, including automated 

collection techniques. 

The Departments are soliciting public 

comment on each of the required issues 

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

for the following information collection 

requirements. 

A. Wage Estimates 

To derive wage estimates, HHS 

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.36 Table 1 in these proposed 

rules 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 HHS is of the view that 

doubling the hourly wage to estimate 

total cost is a reasonably accurate 

estimation method. 

TABLE 1—WAGE ESTIMATES

Occupation title Occupational 

code 

Mean hourly 

wage 

($/hr.) 

Fringe benefits 

and overhead 

($/hr.) 

Adjusted 

hourly wage 

($/hr.) 

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

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

Secretaries and Administrative Assistants, Except Legal, Medical, and 

Executive .................................................................................................. 43–6014 19.43 19.43 38.86 

Business Operations Specialist ................................................................... 13–1198 40.53 40.53 81.06 

Database Administrator ............................................................................... 15–1245 48.60 48.60 97.20 

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

Insurance Sales Agents ............................................................................... 41–3021 33.22 33.22 66.44 

B. ICRs Regarding Disclosure of Agent 

and Broker Compensation to 

Individuals in Individual Health 

Insurance Coverage and Short-Term, 

Limited-Duration Insurance (45 CFR 

148.410(c)(2)(i) and (ii) and (c)(3) and 

(4)) 

As discussed in section III.B of the 

preamble of these proposed rules, 

section 2746 of the PHS Act, as added 

by section 202(c) of Title II of Division 

BB of the CAA, requires health 

insurance issuers offering individual 

health insurance coverage or short-term, 

limited-duration insurance to make 

disclosures to enrollees regarding direct 

and indirect compensation provided by 

the issuer to an agent or broker 

associated with enrolling individuals in 

such coverage, prior to when the 

individual finalizes their plan selection, 

as well as on any documentation 

confirming the individual’s enrollment, 

including enrollment documentation 

required in applicable state or Federal 

law or an initial enrollment package. At 

new proposed 45 CFR 148.410(c), HHS 

proposes to codify these disclosure 

requirements. 

HHS assumes that the compensation 

information to be provided to potential 

policyholders prior to finalizing 

enrollment would be provided by agents 

and brokers on behalf of issuers. As 

discussed in section III.B of the 

preamble of these proposed rules, HHS 

anticipates the required information 

would be provided in the form of a 

commission schedule, a similar 

document satisfying the requirements of 

45 CFR 148.410(c)(5), or a supplemental 

document detailing additional 

compensation not on the commission 

schedule, detailing the compensation 

structure of agents and brokers who 

assist consumers in enrolling in and 

purchasing individual health insurance 

coverage or short-term, limited-duration 

insurance. HHS anticipates that the 

burden associated with the disclosure 

requirement, prior to implementation, 

would include review by a lawyer. HHS 

assumes that a lawyer for each issuer 

would need 2 hours (at an hourly rate 

of $143.18) to review the regulation, and 

prepare instructions for issuers to relay 

to individual agents and brokers to 

implement the disclosure requirements. 

The burden for each issuer would be 2 

hours, with an equivalent cost of 

approximately $286. There are an 

estimated 1,298 issuers in the 

individual market 37 and 26 issuers of 

short-term, limited-duration insurance 

coverage,38 for a total of 1,324 issuers. 

Therefore, the total annual burden to all 

issuers to implement the disclosure 

requirement would be 2,648 hours with 

an equivalent cost of approximately 

$379,141. The review of the statute, 

regulation, and issuer’s implementation 

plan would likely occur annually to 

ensure compliance with any potential 

changes to the regulation. HHS assumes 

that each agent or broker would need 30 

minutes (at an hourly rate of $66.44) 

annually to review the requirements and 

the instructions from issuers. The total 

burden for each agent or broker would 

be 0.5 hours with an equivalent cost of 

approximately $33. As of June 10, 2021, 

there were 55,541 agents or brokers 

working with issuers and each agent or 

broker had approximately two 

appointment arrangements which are 

mandated by state law and govern the 

compensation provided to agents and 

brokers for assisting consumers.39

Therefore, the total burden for all agents 

and brokers, to review instructions from 

the issuers with which they have 

appointment arrangements, would be 

27,770.5 hours, with an equivalent cost 

of approximately $1,845,072. 

HHS estimates the cost associated 

with this disclosure requirement, when 

provided in situations related to inperson enrollment in coverage, to be 

limited to only printing and material 

costs. HHS estimates that each 

commission schedule would be, on 

average, 4 pages in length, at a cost of 

$0.05 per page, for a total of $0.20 per 

provided schedule. Printing of 

supplemental documentation disclosing 

compensation not included on the 

commission schedule would be, on 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51757 

40Agents and brokers accounted for 47.8 percent 

of all consumers enrolled during the plan year 2020 

open enrollment period. Source: CMS, Agents and 

Brokers in the Marketplace. https://www.cms.gov/ 

CCIIO/Resources/Forms-Reports-and-OtherResources/Downloads/Agents-and-Brokers-in-theMarketplace.pdf. 

41According 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. 

average, 2 pages in length, at a cost of 

$0.05 per page, for a total of $0.10 per 

provided supplemental document. HHS 

assumes, based on experience with the 

regulation of insurance agents and 

brokers operating on the Federallyfacilitated Exchanges and State-based 

Exchanges on the Federal Platform, that 

for most consumers, the information 

would be provided electronically or 

orally at minimal cost. HHS assumes 

that each agent or broker would provide, 

on average, ten commission schedules 

and ten supplemental documents in 

print to consumers annually from each 

arrangement, for a total of 20 

commission schedules and 20 

supplemental documents provided in 

print. Each agent or broker would incur 

an annual printing cost of 

approximately $6. For all agents and 

brokers, HHS estimates that a total of 

1,110,820 printed commission 

schedules and 1,110,820 printed 

supplemental documents would be 

provided to consumers, for a total 

printing cost of $333,246 annually. HHS 

assumes that agents and brokers would 

be compensated by issuers for the 

printing costs associated with providing 

the compensation schedules and 

supplemental documents to consumers. 

Therefore, HHS estimates that each 

issuer, on average, would incur printing 

costs of approximately $252 annually, 

starting in 2022. The total costs to all 

issuers for disclosures provided prior to 

enrollment, including printing costs, 

would be approximately $712,387. 

TABLE 2—PROPOSED ANNUAL ONGOING COSTS REGARDING DISCLOSURE OF AGENT AND BROKER COMPENSATION TO

ENROLLEES PRIOR TO ENROLLMENT

Respondent 

Estimated 

number of 

respondents 

Estimated 

number of 

responses 

Estimated 

burden 

(hours) 

Estimated 

labor costs 

($) 

Estimated 

printing costs 

Estimated total 

cost 

($) 

Issuer ....................................................... 1,324 1,110,820 2,648 $379,141 $333,246 $712,387 

Agents and Brokers ................................. 55,541 55,541 27,771.5 1,845,072 0 1,845,072 

Issuers would also be required to 

provide an agent or broker 

compensation disclosure to individuals 

on documentation confirming 

enrollment, including enrollment 

documentation required by applicable 

state or Federal law or an initial 

enrollment package. HHS assumes that 

the disclosure and supplemental 

documentation disclosing compensation 

not included on the commission 

schedule provided along with 

documentation confirming enrollment 

would be available to all enrollees in the 

same coverage, in the same household, 

via the policyholder receiving the 

disclosure information and informing 

all enrollees on the plan. There are an 

estimated 1,298 issuers in the 

individual market providing 

approximately 8,639,866 enrollment 

confirmations annually, and 26 issuers 

of short-term, limited-duration 

insurance providing approximately 

121,038 enrollment confirmations 

annually. HHS assumes that 50 percent 

of policyholders with individual health 

insurance coverage 40 and all 

policyholders with short-term, limitedduration insurance are assisted by 

agents or brokers. 

In the individual market, 1,298 

issuers would be required to provide 

commission schedules or similar 

documentation, and supplemental 

documentation detailing the structure 

for compensation not captured on the 

commission schedule, along with 

approximately 4,319,933 enrollment 

confirmations, 3,328 on average per 

issuer. HHS estimates that 

approximately 66 percent of 

commission schedules and 

supplemental documents (2,851,156 

disclosures) would be mailed to 

individuals (34 percent sent 

electronically) 41 in conjunction with 

any documents confirming enrollment 

or renewal notice with no additional 

mailing costs. Therefore, each issuer 

would provide approximately 2,197 

commission schedules or similar 

documentation, as well as the 

supplemental documents by mail 

annually. HHS assumes that for each 

issuer, an administrative assistant 

would need 5 minutes (at an hourly rate 

of $38.86) to print and enclose a 

commission schedule or similar 

documentation, as well as the 

supplemental document, with the 

enrollment confirmation or renewal 

notice, for a cost of $3.24 per 

commission schedule or similar 

documentation, and the supplemental 

documentation. The total burden for 

each issuer would be approximately 183 

hours, with an equivalent cost of 

approximately $7,113 annually. For all 

issuers, the total annual burden would 

be 237,596 hours with an equivalent 

cost of approximately $9,232,993. 

Assuming that the cost of printing each 

commission schedule or similar 

documentation would be $0.20, and the 

cost of printing each supplemental 

document would be $0.10, the average 

cost of printing for each issuer would be 

approximately $659 annually and the 

total cost of printing for all issuers 

would be approximately $855,347. The 

total annual cost for all issuers, 

including printing costs, would be 

$10,088,340. 

For short-term, limited-duration 

insurance, 26 issuers would be required 

to provide commission schedules or 

similar documentation, as well as 

supplemental documentation detailing 

the structure for compensation not 

captured on the commission schedule, 

along with approximately 121,038 

enrollment confirmations, 4,655 on 

average per issuer. HHS estimates that 

approximately 66 percent of 

commission schedules or similar 

documentation, and supplemental 

documents (79,885 disclosures) would 

be mailed to individuals in conjunction 

with any documents confirming 

enrollment or renewal notice with no 

additional mailing costs. Therefore, 

each issuer would provide 

approximately 3,073 commission 

schedules or similar documentation, 

and supplemental documentation, by 

mail annually. HHS assumes that for 

each issuer, an administrative assistant 

would need 5 minutes (at an hourly rate 

of $38.86) to print and enclose a 

commission schedule or similar 

documentation, and the supplemental 

documentation, with the enrollment 

confirmation or renewal notice, for a 

cost of $3.24 per disclosure. The total 

burden for each issuer would be 

approximately 256 hours, with an 

equivalent cost of approximately $9,950 

51758 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

annually. For all issuers, the total 

annual burden would be 6,657 hours 

with an equivalent cost of 

approximately $258,695. Assuming that 

the cost of printing each commission 

schedule or similar documentation 

would be $0.20, and the cost of printing 

each supplemental document would be 

$0.10, the average cost of printing for 

each issuer would be approximately $35 

annually and the total printing cost for 

all issuers would be $922. The total 

annual cost for all issuers, including 

printing costs would be $259,616. 

For issuers of individual health 

insurance coverage or issuers of shortterm, limited-duration insurance, the 

total combined burden for providing 

disclosures and supplemental 

documents with enrollment materials 

would be 244,253 hours, with an 

equivalent cost of $9,491,687. The total 

annual printing cost would be $856,268, 

with an overall annual total cost of 

$10,347,956. CMS is seeking an OMB 

control number and approval for the 

proposed information collection (OMB 

control number: 0938–NEW (Agent and 

Broker Disclosure and Reporting 

Requirements (CMS–10787)). 

TABLE 3—PROPOSED ANNUAL ONGOING COSTS RELATED TO AGENT AND BROKER COMPENSATION DISCLOSURE

PROVIDED WITH ENROLLMENT MATERIALS

Type of coverage 

Estimated 

number of 

respondents 

Estimated 

number of 

responses 

Total burden 

(hours) 

Estimated 

labor cost 

Estimated 

printing cost 

Estimated 

total cost 

Individual health insurance coverage ...... 1,298 4,319,933 237,596 $9,232,993 $855,347 $10,088,340 

Short-term, limited-duration insurance ..... 26 121,038 6,657 258,695 922 259,616 

Total .................................................. 1,324 4,440,971 244,253 9,491,687 856,268 10,347,956 

C. ICRs Regarding Issuer Requirements 

for Agent and Broker Compensation 

Reporting to the Secretary of HHS (45 

CFR 148.410(d)) 

As discussed in section III.B of the 

preamble, section 2746 of the PHS Act, 

as added by section 202(c) of Title II of 

Division BB of the CAA, requires health 

insurance issuers offering individual 

health insurance coverage or short-term, 

limited-duration insurance to submit 

reports to HHS regarding direct and 

indirect compensation provided by the 

issuer to an agent or broker associated 

with enrolling individuals in such 

coverage. HHS is proposing to codify 

these reporting requirements in new 

proposed 45 CFR 148.410(d). 

HHS estimates that each issuer would 

incur an annual ongoing burden and 

cost to submit the required information 

annually to HHS, starting in 2023 

(reporting for calendar year 2022 would 

be due by July 31, 2023). HHS 

acknowledges that the burden 

associated with this reporting 

requirement would vary depending on 

the size of the issuer. HHS estimates 

that for each issuer, on average, an 

administrative assistant would need 10 

hours (at an hourly rate of $38.86) and 

a database administrator would need 40 

hours (at an hourly rate of $97.20) to 

collect and submit the required 

information, as described in section III.B 

of the preamble, electronically. HHS 

estimates that each issuer would incur 

an annual ongoing burden of 50 hours, 

with an associated equivalent cost of 

$4,277. For all 1,324 issuers, HHS 

estimates a total annual ongoing burden 

of 66,200 hours and an associated total 

annual cost of $5,662,218. HHS believes 

the burden and costs would decrease in 

subsequent years as issuers become 

more adept at extracting the data from 

their systems and submitting it to HHS. 

CMS is seeking an OMB control number 

and approval for the proposed 

information collection (OMB control 

number: 0938–NEW (Agent and Broker 

Disclosure and Reporting Requirements 

(CMS–10787)). 

TABLE 4—PROPOSED ANNUAL ONGOING COSTS REGARDING ISSUER REPORTING OF AGENT AND BROKER COMPENSATION

TO HHS 

Estimated 

number of 

respondents 

Estimated 

number of responses 

Burden per 

response 

(hours) 

Total 

estimated annual burden 

(hours) 

Total 

estimated 

labor cost 

1,324 1,324 50 66,200 $5,662,218 

D. ICRs Regarding Air Ambulance 

Reporting Requirements for Group 

Health Plans and Health Insurance 

Issuers (45 CFR 149.230) 

As discussed in section II.E of the 

preamble, section 106(b) of the No 

Surprises Act added parallel provisions 

at section 9823 of the Code, section 723 

of ERISA, and section 2799A–8 of the 

PHS Act, requiring plans and issuers to 

submit certain data related to air 

ambulance services for dates of service 

falling within a calendar year and data 

on claims paid within the calendar year. 

In this proposed rule, OPM also 

proposes to direct FEHB carriers to 

comply with requirements of 45 CFR 

149.230 with respect to an FEHB plan 

in the same manner as such provisions 

apply to a group health plan or health 

insurance issuer offering group or 

individual health insurance coverage. 

The proposed time and manner of the 

reporting are set forth in 45 CFR 

149.230(a) of these proposed rules, and 

45 CFR 149.230(b) includes a list of the 

data elements the Departments propose 

to collect on air ambulance services 

from plans, issuers, and FEHB carriers. 

The Departments and OPM assume that 

TPAs generally would incur the burden 

to submit the data on behalf of selfinsured plans and the associated costs 

would likely be passed on to those 

plans. The Departments and OPM 

acknowledge that some large selfinsured plans may seek to make needed 

IT changes and report the required 

information to HHS without the use or 

assistance of a TPA or other third-party 

entity. In those instances, the selfinsured plan would directly incur the 

burden and cost to meet the 

requirements of these proposed rules. 

The Departments and OPM are unable 

to determine how many self-insured 

plans may choose to develop their IT 

system and report the required 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51759 

42Fact Sheet—FAA Initiatives to Improve 

Helicopter Air Ambulance Safety. (February 20, 

2014). Retrieved from https://www.faa.gov/news/ 

fact_sheets/news_story.cfm?newsId=15794. 

information to HHS and seek comment 

as to the number of plans that may 

choose to do so. 

Issuers, FEHB carriers, and TPAs (and 

any self-insured plans that choose not to 

use a TPA or third-party entity to make 

the appropriate IT and system changes) 

would incur burdens to make IT 

changes to collect, consolidate, and 

report the required information, in the 

required format, to HHS. The 

Departments and OPM assume this onetime cost would be incurred in 2022. 

The Departments and OPM estimate that 

473 issuers, 46 FEHB carriers, and 205 

TPAs would be subject to the 

requirements in these proposed rules. 

The Departments and OPM estimate that 

for each issuer, FEHB carrier, or TPA to 

make the appropriate IT changes and 

submit the required data, it would take 

a computer and systems information 

manager 8 hours (at an hourly rate of 

$155.52) to design and direct the work 

required for the updates, and a 

computer programmer 40 hours (at an 

hourly rate of $91.96) to collaborate 

with the manager to design and 

implement system changes. The 

Departments and OPM estimate each 

issuer, FEHB carrier, or TPA would 

incur a one-time burden of 48 hours, 

with an equivalent cost of $4,923. For 

all issuers, FEHB carriers, and TPAs to 

meet the proposed reporting 

requirements, the Departments and 

OPM estimate a total one-time burden of 

34,752 hours, with an equivalent cost of 

$3,563,933, to be incurred in 2022. 

Once the process for collecting and 

formatting the required data is 

established, the Departments and OPM 

assume that the resources needed to 

submit the required information for the 

2022 and 2023 plan years (to be 

submitted by March 31, 2023 and March 

30, 2024, respectively) would be 

limited. The Departments estimate that 

each issuer, FEHB carrier, or TPA would 

require a computer and systems 

information manager 4 hours (at an 

hourly rate of $155.52) to oversee the 

compilation of the data, a computer 

programmer 4 hours (at an hourly rate 

of $91.96) to extract the required data 

and provide it in the required reporting 

format, and an administrative secretary 

4 hours (at an hourly rate of $38.86) to 

assemble the documents and submit 

them to HHS. The Departments and 

OPM estimate that each issuer, FEHB 

carrier, or TPA would incur an annual 

burden of 12 hours, with an equivalent 

cost of $1,145. For all issuers, FEHB 

carriers, and TPAs, the Departments and 

OPM estimate an annual burden of 

8,688 hours, with an equivalent cost of 

approximately $829,241, to be incurred 

in 2023 and 2024. 

The total annual burden for all 

issuers, FEHB carriers, and TPAs to 

make the appropriate IT and system 

changes would be approximately 34,752 

hours, at a total cost of approximately 

$3,563,933 to be incurred in 2022. 

Issuers, FEHB carriers, and TPAs would 

also incur an annual burden, in 2023 

and 2024, of 8,688 hours and a total cost 

of approximately $829,241 to submit the 

data to HHS. The total annual burden 

for all respondents is likely 

overestimated because the estimate does 

not reflect process efficiencies for FEHB 

carriers that are also issuers. As HHS, 

DOL, the Department of the Treasury, 

and OPM share jurisdiction, HHS will 

account for 45 percent of the burden, or 

approximately 15,638 hours in 2022 

with an equivalent cost of $1,603,770 

and an annual burden of approximately 

3,910 hours in 2023 and 2024, with an 

equivalent cost of $373,158. CMS is 

seeking an OMB control number and 

approval for the proposed information 

collection (OMB control number: 0938– 

NEW (Reporting Requirements 

Regarding Air Ambulance Services 

(CMS–10785)). DOL, the Department of 

the Treasury, and OPM will submit their 

burden estimates upon approval. 

TABLE 5—PROPOSED ONE-TIME AND ANNUAL BURDEN AND COSTS FOR ISSUERS AND TPAS RELATED TO AIR

AMBULANCE DATA REPORTING REQUIREMENTS

Year 

Estimated 

number of 

respondents 

Estimated 

number of 

responses 

Burden per 

response 

(hours) 

Total 

estimated 

annual 

burden 

(hours) 

Total 

estimated 

labor cost 

($) 

2022 ..................................................................................... 326 326 48 15,638 $1,603,770.05 

2023 ..................................................................................... 326 326 12 3,910 373,158.29 

2024 ..................................................................................... 326 326 12 3,910 373,158.29 

Three-year average ...................................................... 326 326 24 7,819 783,362 

E. ICRs Regarding Air Ambulance 

Reporting Requirements for Providers of 

Air Ambulance Services (45 CFR 

149.460) 

As described in section II.F of the 

preamble, section 106(a) of the No 

Surprises Act requires providers of air 

ambulance services to submit cost and 

organizational data as well as other 

transport-level data related to air 

ambulance services. In 45 CFR 

149.460(a) of these proposed rules, HHS 

sets forth the proposed time and manner 

of reporting, and in 45 CFR 149.460(b), 

HHS lists the data elements HHS 

proposes to collect on air ambulance 

services from providers of air 

ambulance services. HHS estimates the 

burden associated with the data 

reporting required at 45 CFR 149.460 to 

be the time and effort necessary for 

providers of air ambulance services to 

submit the required data elements, in 

the required format, to HHS. 

HHS anticipates a one-time cost for 

providers of air ambulance services to 

make IT changes to collect, consolidate, 

and report the required information, in 

the required format, to HHS. This onetime cost would be incurred in 2022. 

HHS estimates that 75 providers of air 

ambulance services 42 would be subject 

to the requirements in these proposed 

rules. HHS estimates that for each 

provider to make the appropriate IT 

changes and submit the required data, it 

would require a computer and systems 

information manager 80 hours (at an 

hourly rate of $155.52) to design and 

direct the work required for the updates, 

a computer programmer 240 hours (at 

an hourly rate of $91.96) to collaborate 

with the manager to design and 

implement system changes, and a 

business operations specialist 80 hours 

(at an hourly rate of $81.06) to provide 

input regarding the data content for the 

reports. HHS estimates each provider of 

air ambulance services would incur a 

one-time burden of 400 hours, with an 

equivalent cost of $40,997. For all 

providers of air ambulance services to 

51760 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

meet the proposed reporting 

requirements, HHS estimates a total 

one-time burden of 30,000 hours, with 

an equivalent cost of $3,074,760. 

Once the process for collecting and 

formatting the required data is 

established, HHS assumes that the 

resources required to submit the 

required information to HHS for the 

2022 and 2023 plan years (to be 

submitted by March 31, 2023 and March 

30, 2024, respectively) would be 

limited. HHS estimates that each 

provider of air ambulance services 

would require a computer and systems 

information manager 4 hours (at an 

hourly rate of $155.52) to oversee the 

compilation of the data, a computer 

programmer 4 hours (at an hourly rate 

of $91.96) to extract the required data 

and provide it in the required reporting 

format, a business operations specialist 

8 hours (at an hourly rate of $81.06) to 

review the data reports, and an 

administrative secretary 4 hours (at an 

hourly rate of $38.86) to assist in the 

assembly of documents and submit 

them to HHS. HHS estimates that each 

provider of air ambulance services 

would incur an annual burden of 20 

hours, with an equivalent cost of $1,794. 

For all providers of air ambulance 

services, HHS estimates an annual 

burden of 1,500 hours, with an 

equivalent cost of $134,538 in 2023 and 

2024. 

The total one-time burden and costs, 

to be incurred in 2022, for all providers 

of air ambulance services to make the 

appropriate IT and system changes 

would be approximately 30,000 hours 

and a total cost of approximately 

$3,074,760. Providers of air ambulance 

services would also incur an annual 

burden and cost to submit the data to 

HHS, for 2023 and 2024, of 1,500 hours 

and $134,538. CMS is seeking an OMB 

control number and approval for the 

proposed information collection (OMB 

control number: 0938–NEW (Reporting 

Requirements Regarding Air Ambulance 

Services (CMS–10785)). 

TABLE 6—PROPOSED ONE-TIME AND ANNUAL BURDEN AND COSTS RELATED TO AIR AMBULANCE DATA REPORTING

REQUIREMENTS FOR PROVIDERS OF AIR AMBULANCE SERVICES

Year 

Estimated 

number of 

respondents 

Number of 

responses 

Burden per 

response 

(hours) 

Total annual 

burden 

(hours) 

Total cost 

2022 ..................................................................................... 75 75 400 30,000 $3,074,760 

2023 ..................................................................................... 75 75 20 1,500 134,538 

2024 ..................................................................................... 75 75 20 1,500 134,538 

Three-Year Average ..................................................... 75 75 147 11,000 1,114,612 

F. ICRs Regarding CMS Enforcement of 

Group and Individual Insurance Market 

and Provider and Facility Requirements 

(45 CFR 150.303, 150.311, 150.313, 

150.509, 150.517, and 150.525) 

The process by which CMS 

investigates allegations of noncompliance against issuers and nonFederal governmental plans is detailed 

in 45 CFR 150.301 through 150.347. 

Sections 2799A–1(a)(2)(A)(ii) and 

2726(a) of the PHS Act, as amended by 

the CAA, require CMS to conduct 

certain targeted audits. Therefore, HHS 

proposed amendments to 45 CFR 

150.303(c) to authorize random and 

targeted investigation and market 

conduct examinations. 

Section 2723(b) of the PHS Act, as 

amended by the CAA, authorizes the 

Secretary of HHS to impose civil money 

penalties as a means of enforcing the 

individual and group insurance market 

requirements contained in Part A and 

Part D of Title XXVII of the PHS Act 

with respect to health insurance issuers 

when a state does not have authority to 

enforce or fails to substantially enforce 

these provisions and with respect to 

group health plans that are non-Federal 

governmental plans in all states. Section 

2799B–4 of the PHS Act, as added by 

section 104 of the No Surprises Act, 

adopts a similar framework for CMS’s 

enforcement authority over providers 

and facilities, including providers of air 

ambulance services, in states that do not 

have authority or otherwise fail to 

substantially enforce the requirements 

of Part E of Title XXVII of the PHS Act, 

as added by the CAA. In addition, 

section 106(e) of the No Surprises Act 

authorizes HHS to impose civil money 

penalties on providers of air ambulance 

services for failure to submit to the 

Secretaries of HHS and Transportation 

information related to air ambulance 

services required under section 106(a) of 

the No Surprises Act. 

CMS would take enforcement action 

upon receiving information that an 

issuer, non-Federal governmental plan, 

provider, facility, or provider of air 

ambulance services may be violating a 

provision of the PHS Act. Sources of 

information may include: (i) 

Complaints; (ii) reports from plans or 

issuers, providers or facilities, state 

insurance departments, state health 

departments, medical boards, the NAIC, 

and any other Federal or state agencies; 

and (iii) any other information that 

indicates potential noncompliance with 

PHS Act requirements (for example, 

review of a provider’s or issuer’s public 

website). Upon receiving information 

regarding a potential violation where 

CMS is responsible for enforcement, or 

upon being selected for a targeted or 

random investigation or market conduct 

examination, CMS would undertake 

either an investigation or a market 

conduct examination. 

When CMS becomes aware of a 

potential violation, CMS would 

commence an investigation by issuing a 

notice to the responsible entity detailing 

the potential violation. Such notice 

would give the responsible entity an 

opportunity to respond, and state that it 

may be subject to a civil money penalty 

or corrective action. HHS proposes that 

the responsible entity could respond 

within the allotted time frame (as 

communicated in the written notice to 

the responsible entity), request an 

extension, or default and be subject to 

the civil money penalty or corrective 

action. CMS also may subject a provider 

of air ambulance services to a civil 

money penalty if such provider fails to 

submit data required in section 106(a) of 

the No Surprises Act. 

HHS believes this collection is 

exempt from the PRA under 5 CFR 

1320.4(a)(2), which provides an 

exemption from PRA when information 

is gathered ‘‘during the conduct of a 

civil action to which the United States 

or any official or agency thereof is a 

party, or during the conduct of an 

administrative action, investigation, or 

audit involving an agency against 

specific individuals or entities.’’ 

G. Summary of Annual Burden 

Estimates for Proposed Requirements 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51761 

TABLE 7—PROPOSED 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 148.410(c)(2)(i)— 

Issuers ............................... 0938–NEW 1,324 1,110,820 2 2,648 $143.18 $379,141 $333,246 $712,387 

45 CFR 148.410(c)(2)(i)— 

Agents and Brokers ........... 0938–NEW 55,541 55,541 0.5 27,771 66.44 1,845,072 0 1,845,072 

45 CFR 148.410(c)(2)(ii), 

148.410(c)(3) ..................... 0938–NEW 1,324 4,440,971 0.06 244,253 2 9,491,687 856,268 10,347,956 

45 CFR 148.410(d) ............... 0938–NEW 1,324 1,324 50 66,200 85.53 5,662,218 0 5,662,218 

45 CFR 149.230 .................... 0938–NEW 326 326 24 7,819 100 783,362 0 783,362 

45 CFR 149.460 .................... 0938–NEW 75 75 146.67 11,000 101 1,114,612 0 1,114,612 

Total ............................... .................... 59,914 5,609,057 .................... 359,691 .................... 19,276,093 1,189,514 20,465,607 

H. Submission of PRA-Related 

Comments 

HHS has submitted a copy of these 

proposed rules to OMB for its review of 

the rule’s information collection and 

recordkeeping requirements. These 

requirements are not effective until they 

have been approved by the OMB. 

To obtain copies of the supporting 

statement and any related forms for the 

proposed collections, please visit CMS’s 

website at www.cms.hhs.gov/ 

PaperworkReductionActof1995, or call 

the Reports Clearance Office at (410) 

786–1326. 

HHS invites public comments on 

these potential information collection 

requirements. If you wish to comment, 

please submit your comments 

electronically as specified in the 

ADDRESSES section of these proposed 

rules and identify the rule (CMS–9907– 

P), the ICR’s CFR citation, CMS ID 

number, and OMB control number. 

ICR-related comments are due 

November 15, 2021. 

VI. Collection of Information 

Requirements—The Department of 

Labor, the Department of the Treasury, 

and OPM 

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 program 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: 

A. ICRs Regarding Air Ambulance 

Reporting Requirements for Group 

Health Plans, Health Insurance Issuers, 

and FEHB Carriers (5 CFR 890.114(e), 

26 CFR 54.9823–1, 29 CFR 2590.723) 

As discussed in section V.D. of the 

Collection of Information Requirements 

for HHS, the total annual burden for all 

issuers, FEHB carriers, and TPAs (and 

any self-insured plans that choose not to 

use a TPA or third-party entity to make 

the appropriate IT and system changes) 

would be approximately 34,752 hours, 

at a total cost of approximately 

$3,563,933 to be incurred in 2022. 

Issuers, FEHB carriers, and TPAs would 

also incur an annual burden, in 2023 

and 2024, of 8,688 hours and a total cost 

of approximately $829,241 to submit the 

data to HHS. As HHS, DOL, the 

Department of the Treasury, and OPM 

share jurisdiction, HHS will account for 

45 percent of the burden, DOL and the 

Department of the Treasury will each 

share 25 percent of the burden, and 

OPM will share five (5) percent of the 

burden. DOL and the Department of the 

Treasury will share approximately 8,688 

hours in 2022 with an equivalent cost of 

$890,983 and an annual burden of 

approximately 2,172 hours in 2023 and 

2024, with an equivalent cost of 

$207,310. OPM will share 

approximately 1,738 hours in 2022 with 

an equivalent cost of $1,738 and an 

annual burden of approximately 434 

hours in 2023 and 2024, with an 

equivalent cost of $41,462. 

Summary of Burden 

Type of Review: New Collection. 

Agency: DOL–EBSA, Treasury-IRS, 

OPM–FEHB. 

Title: Air Ambulance Reporting 

Requirements for Group Health Plans, 

Health Insurance Issuers, and FEHB 

Carriers. 

OMB Numbers: DOL—1210–NEW, 

Treasury—1545–NEW. 

Affected Public: Businesses or other 

for-profits, Not-for-profit institutions. 

Total Respondents: 181. 

Total Responses: 181. 

Frequency of Response: Annually. 

Estimated Total Annual Burden 

Hours: 9,557 (DOL—4,344, Treasury— 

4,344, OPM—869). 

Estimated Total Annual Burden Cost: 

$957,423 (DOL—$870,402, Treasury— 

$870,402, OPM—$87,040). 

VII. Response to Comments 

Because of the large number of public 

comments the Departments normally 

receive on Federal Register documents, 

the Departments are not able to 

acknowledge or respond to them 

individually. The Departments will 

consider all comments received by the 

date and time specified in the DATES

section of the preamble, and, when the 

Departments proceed with a subsequent 

document, the Departments will 

respond to the comments in the 

preamble to that document. 

VIII. Regulatory Impact Analysis 

A. Statement of Need 

The proposed reporting requirements 

in these proposed rules would increase 

transparency and better understanding 

regarding agent and broker 

compensation and the air ambulance 

industry. 

Title II of Division BB of the CAA 

includes provisions related to increased 

transparency. The proposed 

requirements in 45 CFR 148.410 of these 

proposed rules are related to the agent 

and broker compensation disclosure and 

data reporting requirements as set forth 

in section 202(c) of Title II of Division 

BB of the CAA. The proposed disclosure 

requirements would inform consumers 

of agent and broker compensation prior 

to enrolling in individual health 

insurance coverage or short-term, 

51762 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

limited-duration coverage. The 

proposed reporting requirements would 

also provide HHS with data for such 

coverage similar to those collected by 

the DOL on the compensation provided 

by issuers of group health insurance 

coverage. 

The proposed requirements in 45 CFR 

149.230 and 149.460 of these proposed 

rules are related to the air ambulance 

data reporting requirements as set forth 

in section 106(a) of the No Surprises Act 

for providers of air ambulance services 

and section 106(b) of the No Surprises 

Act, which added parallel provisions at 

section 9823 of the Code, section 723 of 

ERISA, and section 2799A–8 of the PHS 

Act, requiring plans and issuers offering 

group or individual health insurance 

coverage to submit claims data related 

to air ambulance services. The data 

collection would support the 

production of the comprehensive report 

on air ambulance services required 

under section 106(c) of the No Surprises 

Act and would enable the identification 

and analysis of unfair and deceptive 

practices and unfair methods of 

competition as noted in section 106(f) of 

the No Surprises Act. These proposed 

rules would also implement certain 

provisions that would allow HHS to 

enforce the No Surprises Act to 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. 

The proposed revisions to 45 CFR part 

150, including the proposed inclusion 

of a new subpart E, would accomplish 

three objectives: (i) Implementing 

section 2799B–4 of the PHS Act, which 

subjects providers and facilities, 

including providers of air ambulance 

services, to CMS enforcement and 

oversight in certain circumstances; (ii) 

updating the existing regulations to 

ensure they align with industry 

standards and current CMS practices; 

and (iii) implementing section 106(e) of 

the No Surprises Act, which states that 

a provider of air ambulance services that 

fails to submit all information required 

under section 106(a)(2) of the No 

Surprises Act shall be subject to a civil 

money penalty of not more than 

$10,000. The proposed revisions and 

these new rules are necessary to enable 

CMS to carry out this statutory mandate 

and enforce the provisions of the PHS 

Act and the No Surprises Act against 

providers and facilities, including 

providers of air ambulance services. 

They also serve to strengthen CMS’s 

authority and oversight of issuer and 

non-Federal governmental plan 

compliance with applicable PHS Act 

requirements. 

B. Overall Impact 

The Departments have examined the 

impacts of these proposed rules as 

required by Executive Order 12866 on 

Regulatory Planning and Review 

(September 30, 1993), Executive Order 

13563 on Improving Regulation and 

Regulatory Review (January 18, 2011), 

the Regulatory Flexibility Act (RFA) 

(September 19, 1980, Pub. L. 96–354), 

section 202 of the Unfunded Mandates 

Reform Act of 1995 (March 22, 1995, 

Pub. L. 104–4), Executive Order 13132 

on Federalism (August 4, 1999), and the 

Congressional Review Act (5 U.S.C. 

804(2)). 

Executive Orders 12866 and 13563 

direct 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 

emphasizes the importance of 

quantifying both costs and benefits, of 

reducing costs, of harmonizing rules, 

and of promoting flexibility. A 

regulatory impact analysis (RIA) must 

be prepared for rules with economically 

significant effects ($100 million or more 

in any 1 year). 

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 

1 year, or adversely and materially 

affecting a sector of the economy, 

productivity, competition, jobs, the 

environment, public health or safety, or 

state, local or tribal governments or 

communities (also referred to as 

‘‘economically significant’’); (2) creating 

a serious inconsistency or otherwise 

interfering with an action taken or 

planned by another agency; (3) 

materially altering the budgetary 

impacts of entitlement grants, user fees, 

or loan programs or the rights and 

obligations of recipients thereof; or (4) 

raising novel legal or policy issues 

arising out of legal mandates, the 

President’s priorities, or the principles 

set forth in the Executive order. An RIA 

must be prepared for major rules with 

economically significant effects ($100 

million or more in any 1 year), and a 

‘‘significant’’ regulatory action is subject 

to review by OMB. This rule is not 

likely to have economic impacts of $100 

million or more in at least 1 year, and 

therefore is not expected to be 

economically significant under 

Executive Order 12866. OMB has 

determined, however, that the actions 

are significant within the meaning of 

section 3(f)(4) of the Executive order. 

Therefore, the Departments have 

provided an assessment of the potential 

benefits and costs associated with this 

rule. In accordance with the provisions 

of Executive Order 12866, this 

regulation was reviewed by OMB. 

The proposed provisions related to 

disclosure and reporting of direct and 

indirect agent and broker compensation 

related to enrollments in individual 

health insurance coverage and shortterm, limited-duration insurance would 

help provide transparency to consumers 

wishing to apply for such coverage. The 

data submitted to HHS by issuers of 

such coverage would enable HHS to 

determine the compensation paid to 

agents and brokers, the structures being 

used to determine agent and broker 

compensation, and potentially 

determine if compensation is being used 

to intentionally steer individuals toward 

plans with less comprehensive benefits. 

The provisions related to air 

ambulance data reporting in these 

proposed rules would provide complete, 

uniform, nationwide information on air 

ambulance services that is currently not 

available. The information collected 

from providers of air ambulance 

services would be used to satisfy the 

requirements for the comprehensive 

public report described in section 106(c) 

of the No Surprises Act and to allow the 

Secretary of Transportation to determine 

whether a provider of air ambulance 

services has engaged in unfair and 

deceptive practices or unfair methods of 

competition. The data collected from 

plans and issuers regarding air 

ambulance services would enable HHS 

and the Department of Transportation to 

combine and validate the information 

collected from plans, issuers, and 

providers of air ambulance services and 

would provide additional information to 

support the production of the report 

described in section 106(c) of the No 

Surprises Act. Inclusion of discrete, yet 

de-identified, air ambulance data from 

each FEHB carrier will allow for 

transparency and data validation with 

respect to air ambulance services 

provided to FEHB covered individuals, 

for purposes of ensuring a 

comprehensive report to Congress, and 

to further support the implementation of 

5 U.S.C. 8902(p) which specifically ends 

surprise air ambulance bills in the FEHB 

Program. 

In addition, the enforcement 

provisions in these proposed rules 

would establish the process by which 

CMS would investigate complaints and 

enforce the PHS Act requirements 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51763 

43 Department of the Treasury, Department of 

Labor, Department of Health and Human Services, 

Short-Term, Limited-Duration Insurance, 83 FR 

38212 (Aug. 3, 2018) (www.govinfo.gov/content/ 

pkg/FR-2018-08-03/pdf/2018-16568.pdf) (final 

rule). 

applicable to non-Federal governmental 

plans in all states, and issuers, 

providers, and facilities, including 

providers of air ambulance services, in 

states where HHS is directly enforcing 

PHS Act requirements or in states that 

are not substantially enforcing the 

requirements. Furthermore, these 

provisions detail the process by which 

CMS would impose civil money 

penalties against providers and 

facilities, including providers of air 

ambulance services, for a violation of an 

applicable PHS Act provision or for 

failure to submit required data in 

compliance with section 106(a) of the 

No Surprises Act. 

Affected entities, such as plans (or 

third-party administrators on behalf of 

self-insured group health plans), health 

insurance issuers, FEHB carriers, issuers 

of short-term, limited-duration 

insurance, providers, including 

providers of air ambulance services, and 

facilities would incur costs related to 

the submission of data on air ambulance 

services, disclosure and reporting of 

agent and broker compensation, and 

enforcement actions. In accordance with 

Executive Order 12866, the Departments 

are of the view that the benefits of this 

regulatory action justify the costs. 

C. Impact Estimates and Accounting 

Table 

The provisions in these proposed 

rules would ensure that plans, issuers, 

providers (including providers of air 

ambulance services), and facilities 

subject to HHS’s enforcement authority 

comply with requirements in the No 

Surprises Act and that participants, 

beneficiaries and enrollees with health 

care coverage are protected from 

surprise medical bills. In addition, 

having access to information related to 

agent and broker compensation 

increases transparency and could help 

enrollees with individual health 

insurance coverage and short-term, 

limited-duration insurance coverage 

make more informed decisions 

regarding their health care coverage. In 

accordance with OMB Circular A–4, 

Table 8 depicts an accounting statement 

summarizing the Departments’ 

assessment of the benefits and costs 

associated with this regulatory action. 

The Departments are unable to quantify 

the benefits of these proposed rules, but 

have included a qualitative discussion. 

The effects in Table 8 reflect qualitative 

impacts and estimated direct monetary 

costs resulting from the provisions of 

these proposed rules. 

TABLE 8—ACCOUNTING TABLE

Benefits and Intended Outcomes: 

Qualitative: 

• Increased transparency related to agent and broker compensation arrangements and structures, giving consumers more information as 

they make choices regarding health care coverage. 

• Ability for the Federal Government to analyze and/or investigate potential unfair or deceptive practices against consumers, and unfair 

methods of competition used by providers of air ambulance services. 

• Improved compliance with laws prohibiting surprise medical bills due to enforcement actions. 

Costs: Estimate 

(million) 

Year dollar Discount rate 

(%) 

Period 

covered 

Annualized Monetized ($/year) ........................................................................ $31.82 2021 7 2021–2025 

32.35 2021 3 2021–2025 

Quantitative: 

• Costs to issuers of individual health insurance coverage and short-term, limited-duration insurance to provide proposed agent and broker 

compensation disclosures prior to when an individual finalizes their plan selection, and on any documentation confirming initial enrollment, including enrollment documentation required by applicable state or Federal law or an initial enrollment package estimated to be approximately $11.1 million annually beginning in 2022. 

• Costs to agents and brokers for providing compensation disclosures prior to when an individual finalizes their plan selection, estimated to 

be approximately $1.8 million annually beginning in 2022. 

• Costs to issuers of individual health insurance coverage and short-term, limited-duration insurance to gather and submit proposed agent 

and broker compensation data to HHS, expected to be approximately $5.7 million annually beginning in 2023. 

• Costs to plans, issuers, FEHB Carriers, and TPAs to submit proposed air ambulance related information to HHS, estimated to be onetime costs of approximately $3.6 million in 2022 and annual costs of approximately $829,241 in 2023 and 2024. 

• Costs to providers of air ambulance services to submit proposed information to HHS, estimated to be one-time costs of approximately $3 

million in 2022 and annual costs of approximately $134,538 in 2023 and 2024. 

• Costs to providers and facilities, including providers of air ambulance services, related to enforcement actions, estimated to be approximately $850,320 annually, starting in 2022. 

• Costs to the Federal Government to implement the proposed reporting requirements and enforcement activities, estimated to be $4 million in 2021, $20.3 million in 2022, $22.2 million in 2023, $18.3 million in 2024 and $18.4 million in 2025. 

Quantitative: 

• Potential reduction in income for agents and brokers and potential costs and reduction in revenue and profits for providers of air ambulance services, if there are changes in consumer behavior and operational changes as a result of greater transparency regarding agent 

and broker compensation and the air ambulance industry. 

1. Background 

a. Agent and Broker Compensation 

The issue of increasing transparency 

within the health insurance industry 

regarding agent and broker 

compensation has drawn escalating 

attention in recent years. Part of the 

increased need for transparency stems 

from the expanded availability of shortterm, limited-duration insurance 

coverage.43 Insurance agents or brokers 

often receive higher commission rates 

for enrolling consumers in short-term, 

limited-duration insurance coverage 

compared to coverage that meets ACA 

51764 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

44See U.S. House of Representatives Committee 

on Energy and Commerce report ‘‘Shortchanged: 

How the Trump Administration’s Expansion of 

Junk Short-Term Health Insurance Plans is Putting 

Americans at Risk.’’ Page 43 (stating the average 

commission rate for short-term, limited-duration 

insurance plans was 23 percent while the average 

commission rate for ACA-compliant plans was 

approximately 2 percent in 2018). 

45 Id. At 38 (stating issuers offering short-term, 

limited-duration insurance coverage have business 

practices that incentivize agents and brokers to 

engage in fraudulent or misleading practices). 

46See Health Care Sabotage Online: A Warning to 

Consumers, October 2019 (https://

www.casey.senate.gov/imo/media/doc/ 

Senator%20Casey%20-%20Health%20Care%20

Sabotage%20Online%20FINAL.pdf). 

47 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 payors 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. 

48 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. 

49Consumer Union. Up in the Air: Inadequate 

Regulation for Emergency Air Ambulance 

Transportation. Health Policy Report, March 2017. 

50 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. 

51Missouri 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%20Item%208%20NM

%20Superintendent%20of%20Insurance%20Air

%20Ambulance%20Memorial%20Study

%20Report.pdf. 

52Brown, 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). 

requirements.44 There are concerns 

agents or brokers could encourage 

consumers to enroll in short-term, 

limited-duration insurance coverage due 

to their high commission rates.45 In 

addition, there are concerns that there 

may be deceptive practices surrounding 

the sale of short-term, limited duration 

insurance.46 As described in section 

III.B of the preamble of this proposed 

rule, agents and brokers enter into 

appointment arrangements with health 

insurance issuers. These arrangements 

govern compensation provided to agents 

and brokers for assisting consumers 

with enrollment in an issuer’s policies. 

The specific compensation arrangement 

between an issuer and the agent or 

broker is typically laid out in the 

commission schedule. Compensation 

arrangements may also include other 

types of compensation, such as fees and 

bonuses. Section 2746 of the PHS Act 

requires both direct and indirect 

compensation to be disclosed and taken 

into account for all requirements herein. 

b. Surprise Medical Bills for Air 

Ambulance Services 

The issue of surprise medical bills for 

air ambulance services has drawn 

increasing attention from the public as 

the amounts charged by providers of air 

ambulance services have risen 

drastically in recent years and because 

utilization of air ambulance services 

frequently results in surprise bills. A 

study by the GAO analyzed private 

health insurance claims from 2012 and 

2017 to describe the extent to which air 

ambulance transports are out-ofnetwork.47 That study analyzed claims 

data from approximately 24,100 air 

ambulance 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-ofnetwork 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 fixedwing transport in 2017. The prices 

charged in 2017 were an increase of 

over 60 percent from 2012. 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.48

Another study found that for one of the 

largest providers (with a market share of 

approximately 24 percent) the average 

charge increased from $17,262.23 in 

2009 to approximately $50,199.24 by 

2016.49

As the costs associated with air 

ambulance transports have continued to 

increase, the GAO reported that 

providers of air ambulance services 

report entering into more network 

contracts.50 However, additional 

analyses found that many providers of 

air ambulance services, particularly 

those not affiliated with a hospital, do 

not participate in issuer 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.51

A study using 2014 through 2017 data 

from three large issuers to evaluate the 

share of air ambulance claims that are 

out-of-network and the prevalence and 

magnitude of potential surprise balance 

bills found that 77 percent of transports 

were out-of-network, and approximately 

40 percent of 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 for out-of-network 

rotary-wing claims, issuers paid the 

providers’ full billed charges 

approximately 48 percent of the time, 

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

paid in full only 7 percent of the time. 

The study noted that self-insured plans 

paid out-of-network claims in full 50 

percent of the time, whereas fullyinsured plans paid claims in full 38 

percent of the time,52 indicating that 

individuals enrolled in self-insured 

plans were less likely to receive balance 

bills than individuals enrolled in fullyinsured plans. 

As states, the Federal Government, 

oversight agencies, and advocacy groups 

have examined the issue of air 

ambulance services and balance billing, 

it has become clear that there is a lack 

of comprehensive, national data on air 

ambulance costs, transports, and 

contractual arrangements between 

providers of air ambulance services and 

group health plans and health insurance 

issuers. Two GAO reports (2017 and 

2019) and the FAA Reauthorization Act 

of 2018 indicate that it is necessary to 

collect data to better inform 

policymakers and consumers about the 

air ambulance services market. For 

example, increased transparency 

regarding the costs to provide air 

ambulance services and billed and paid 

amounts for air ambulance services 

would be beneficial in assessing 

obstacles to network inclusion and 

contract negotiations involving 

providers of air ambulance services. 

Transparency regarding the number and 

location of air ambulance bases would 

enable assessment of the availability of 

services and competition in the air 

ambulance marketplace. Finally, a 

publicly-available report regarding air 

ambulance services would help to 

improve policymakers’ and consumers’ 

understanding of the air ambulance 

industry. 

c. Enforcement 

Section 2723 of the PHS Act provides 

that states are the primary enforcers of 

the requirements applicable to issuers 

that issue, sell, renew, or offer health 

insurance coverage in the state in the 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51765 

53See Kona, Maanasa ‘‘State Balance-Billing 

Protections.’’ The Commonwealth Fund, 5 February 

2021, https://www.commonwealthfund.org/ 

publications/maps-and-interactives/2021/feb/statebalance-billing-protections. 

54See https://surprisemedicalbills.chir.

georgetown.edu/policy-options/enforcement/. 

55Curran, E. U.S. House Investigation Offers New 

Evidence on the Dangers of Short-Term Plans. 

CHIRblog, July 9, 2020, http://chirblog.org/u-shouse-investigation-offers-new-evidence-dangersshort-term-plans/. 

56See, for example, Excepted Benefits; Lifetime 

and Annual Limited; and Short-Term LimitedDuration Insurance; final rules, 81 FR 75316 at 

75317 (October 31, 2016) and Short-Term, Limited 

Duration Insurance; final rule, 83 FR 38212 at 

38213 (August 3, 2018). 

57See U.S. House of Representatives Committee 

on Energy and Commerce report ‘‘Shortchanged: 

How the Trump Administration’s Expansion of 

Junk Short-Term Health Insurance Plans is Putting 

Americans at Risk.’’ Page 12 (https://www.hsdl.org/ 

?view&did=841078) and House Committee on 

Energy and Commerce. E&C Investigation Finds 

Millions of Americans Enrolled in Junk Health 

Insurance Plans That Are Bad For Consumers & Fly 

Under the Radar of State Regulators, Press Release 

(Jun 25, 2020), https://energycommerce.house.gov/ 

newsroom/press-releases/ec-investigation-findsmillions-of-americans-enrolled-in-junk-health. 

58 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. 

individual or group market. If HHS 

determines that a state has failed to 

substantially enforce a provision of Title 

XXVII of the PHS Act, HHS enforces 

that provision with respect to issuers in 

the state. HHS further enforces the 

requirements applicable to non-Federal 

governmental plans in all states. Any 

non-Federal governmental plan or any 

issuer subject to HHS’s enforcement 

authority that fails to comply with an 

applicable provision of Part A or Part D 

of Title XXVII is subject to a civil money 

penalty. 

Section 2799B–4 of the PHS Act 

provides that states are the primary 

enforcers of the requirements applicable 

to providers and facilities under Part E 

of Title XXVII of the PHS Act, including 

providers of air ambulance services. If 

HHS determines that a state has failed 

to substantially enforce an applicable 

provision, HHS enforces that provision 

in the state. Any provider or facility, 

including a provider of air ambulance 

services, that HHS has determined to be 

in violation of an applicable provision 

in Part E of Title XXVII of the PHS Act 

may be subject to a civil money penalty. 

Under part 106(e) of the No Surprises 

Act, any provider of air ambulance 

services that fails to submit data 

required in section 106(a) of the No 

Surprises Act may also be subject to a 

civil money penalty. 

According to researchers at the Center 

on Health Insurance Reforms, 

Georgetown University Health Policy 

Institute, 18 states have adopted 

comprehensive surprise billing 

protections, and 15 states have adopted 

partial protections.53 The state agency 

responsible for implementing and 

enforcing these protections vary among 

states. According to the Center on 

Health Insurance Reforms, ‘‘Some states 

direct their insurance department to 

ensure compliance with the law, but 

while insurance departments have clear 

jurisdiction over insurance companies, 

they often lack jurisdiction over 

providers. Some states may rely on their 

medical licensing authority or 

‘‘deceptive trade practice’’ statutes to 

enforce requirements on providers; 

other states may be dependent on the 

attorney general filing a civil lawsuit 

against providers who continue to send 

surprise bills to patients.’’ 54 States have 

also identified the State Department of 

Health as the agency with oversight 

authority over providers with respect to 

surprise billing requirements. Because 

many of these state laws are relatively 

new, there is little empirical evidence 

about the cost to state regulators and the 

regulated parties subject to the surprise 

billing protections. 

2. Benefits and Intended Outcomes 

The provisions of this proposed rule 

require health insurance issuers offering 

individual health insurance coverage or 

short-term, limited-duration insurance 

to disclose to policyholders any direct 

or indirect compensation provided by 

the issuer to an agent or broker 

associated with enrolling individuals in 

such coverage. The proposed disclosure 

requirements would improve 

consumers’ awareness by providing 

information on how agents and brokers 

are compensated with regard to the 

coverage sold to those individuals or 

renewed on behalf of the individuals. In 

this way, consumers will be able to take 

this into account as they make decisions 

about obtaining health coverage. 

Knowing how much an agent or broker 

would earn in commissions for selling 

them health insurance coverage could 

inform a consumer as to whether an 

agent’s or broker’s recommendations or 

promotions of individual health 

insurance coverage or short-term, 

limited-duration insurance is due to a 

potential conflict of interest. Disclosing 

this information would provide 

additional clarity to consumers and help 

inform whether they want to enroll in, 

or renew, a particular health insurance 

coverage. To the extent vulnerable 

populations, including those with 

ongoing or prior health conditions, are 

being encouraged to enroll in shortterm, limited-duration insurance,55 the 

proposed disclosure requirements might 

help these individuals better understand 

the agent’s and broker’s motivations and 

incentives in marketing and 

recommending such coverage. As shortterm, limited-duration insurance is 

generally exempt from the ACA’s 

individual market consumer protection 

provisions,56 issuers of such coverage 

can draw in lower-income or healthy 

individuals by offering lower premiums 

than plans that offer the ACA consumer 

protections.57 It is important for agents 

or brokers to disclose their commissions 

so individuals can take into account the 

agent’s or broker’s potential motivations 

for encouraging enrollment in a specific 

type of coverage. 

All health insurance issuers offering 

individual health insurance coverage or 

short-term, limited-duration insurance 

would be required to report annually to 

HHS any direct or indirect 

compensation provided to an agent or 

broker associated with enrolling 

individuals in such coverage. HHS 

would use analysis of this information 

to monitor the marketing operations and 

practices of issuers of individual health 

insurance coverage and short-term, 

limited-duration insurance and inform 

future policy-making decisions. 

The air ambulance data collection 

would advance policymakers’ and the 

public’s understanding of the air 

ambulance industry and increase the 

transparency of the market conditions 

affecting air ambulance services. In 

addition, the data collected from 

providers of air ambulance services may 

be used by the Secretary of 

Transportation to investigate potential 

unfair or deceptive practices used by 

these providers against consumers as 

well as potentially unfair methods of 

competition in the air ambulance 

service market. 

Surprise medical bills result in higher 

out-of-pocket expenses and cause 

financial anxiety and medical debt for 

consumers.58 These proposed rules 

would establish an enforcement process 

to help ensure plans, issuers, providers, 

and facilities, including providers of air 

ambulance services, comply with the 

provisions of the PHS Act. Without 

strong Federal oversight and 

enforcement mechanisms, there would 

be no practical consequences when 

providers and facilities, including 

providers of air ambulance services, fail 

to comply with the PHS Act in states 

that are not directly enforcing the 

applicable requirements. The Federal 

oversight and enforcement procedures 

proposed in 45 CFR part 150 would 

increase provider and facility, 

compliance with the new surprise 

51766 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

59See 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. Medical Secretaries and Administrative 

Assistants (43–6013) $18.75 * 2 = $37.50 * 3 hours 

= $112.50 and General and Operations Manager 

(11–1021) $60.45 * 2 = $120.90 * 2 = $241.80. Total 

cost, $112.50 + $241.90 = $354.30. 

billing and transparency requirements 

in 45 CFR part 149. Compliance with 

these provisions is necessary to inform 

future policy that could help reduce 

financial anxiety and medical debt by 

reducing surprise medical bills for 

individuals with health coverage. 

3. Costs 

Health insurance issuers offering 

individual health insurance coverage or 

short-term, limited-duration insurance 

would incur costs to comply with the 

agent and broker compensation 

disclosure and reporting requirements 

set forth in these proposed rules. Issuers 

would incur annual costs of 

approximately $712,387 to provide 

agent or broker compensation disclosure 

and supplemental documentation 

detailing additional compensation not 

on the commission schedule prior to 

enrollment and approximately $10.3 

million to provide the disclosure in 

documentation confirming enrollment, 

starting in 2022. Additionally, issuers 

would incur annual ongoing costs of 

approximately $5.7 million to collect 

and submit the required agent and 

broker compensation and supplemental 

documentation detailing additional 

compensation not on the commission 

schedule information to HHS starting in 

2023. Agents and brokers would incur 

annual costs of approximately $1.8 

million to provide agent or broker 

compensation disclosure and 

supplemental documentation detailing 

additional compensation not on the 

commission schedule prior to 

enrollment beginning in 2022. These 

costs are discussed in detail in the 

Collection of Information Requirements 

section of the preamble. 

Issuers, FEHB Carriers, TPAs, and 

providers of air ambulance services 

would incur costs to comply with the 

air ambulance services reporting 

requirements set forth in these proposed 

rules. The Departments estimate that 

473 issuers, 46 FEHB carriers, and 205 

TPAs would incur one-time costs of 

approximately $3.6 million in 2022 and 

annual costs of approximately $829,241 

in 2023 and 2024 to comply with this 

requirement. These total costs are likely 

overestimated because the estimate does 

not reflect process efficiencies for FEHB 

carriers that are also issuers. In addition, 

75 providers of air ambulance services 

would incur one-time costs of 

approximately $3 million in 2022 and 

annual costs of approximately $134,538 

in 2023 and 2024 to comply with the 

reporting requirement. These costs are 

discussed in detail in the Collection of 

Information Requirements section of the 

preamble. 

Increased transparency regarding 

agent and broker compensation and 

greater consumer awareness of potential 

conflicts of interest for agents and 

brokers might lead fewer consumers to 

choose short-term, limited-duration 

insurance if they feel they are being 

steered toward such plans due to an 

agent’s or broker’s financial self-interest. 

It might also encourage some agents and 

brokers to avoid such conflicts of 

interest. This could result in a reduction 

in income for some agents and brokers. 

Increased transparency regarding the air 

ambulance industry might also lead to 

operational changes for some providers 

of air ambulance services, such as an 

increase in the number of participating 

providers of air ambulance services for 

plans and reduced charges. Providers of 

air ambulance services that make any 

operational changes would incur related 

costs and might experience a reduction 

in profits. 

Providers and facilities, including 

providers of air ambulance services, 

would, on occasion, incur costs related 

to enforcement actions taken by CMS. 

When CMS becomes aware of a 

potential violation of the PHS Act and 

is responsible for enforcement, CMS 

would commence an investigation by 

issuing a notice to the responsible entity 

detailing the potential violation. Such 

notice would give the responsible entity 

an opportunity to respond, and state 

that it may be subject to a civil money 

penalty or corrective action. The 

responsible entity could respond within 

the allotted time frame, request an 

extension, or default and be subject to 

the civil money penalty or corrective 

action when there is sufficient evidence 

indicating there is a PHS Act violation. 

HHS estimates that, on average, CMS 

would conduct approximately 200 

investigations per month, for a total of 

2,400 investigations per year, starting in 

2022. HHS estimates that for each 

potential violation being investigated, a 

medical secretary would need 3 hours 

on average (at a rate of $37.50 per hour) 

and a manager would need 2 hours on 

average (at a rate of $120.90 per hour) 

to prepare a response and collect 

supporting documents and submit them 

to CMS.59 The cost for each responsible 

entity subject to a CMS investigation is 

estimated to be approximately $354 for 

each investigation. The total annual cost 

related to all 2,400 investigations would 

be approximately $850,320. HHS 

anticipates that the number of 

investigations and the associated costs 

would decrease over time as compliance 

improves. 

CMS would review the response 

provided by the responsible entity and 

determine if the entity violated a 

provision of the PHS Act. HHS proposes 

that if CMS determines that the 

responsible entity did violate a 

provision of the PHS Act, then it may 

impose civil money penalties not to 

exceed $10,000 per violation. If CMS 

determines that a provider of air 

ambulance services failed to submit 

information required in section 106(a) of 

the No Surprises Act by the due date, 

including any extensions granted, then 

it may impose civil money penalties not 

to exceed $10,000. If the responsible 

entity timely files a request for appeal, 

such appeal would be heard before an 

administrative law judge, who would 

conduct any appeal as provided in 45 

CFR 150.401 through 150.465. Finally, 

HHS proposes that a responsible entity 

can appeal the decision of an 

administrative law judge to the United 

States Court of Appeals for the district 

where the provider, facility, or provider 

of air ambulance services is located or 

the violation occurred. At this time, 

HHS is unable to estimate the number 

of responsible entities that would 

appeal a penalty or the decision of an 

administrative law judge and the 

associated cost. 

In addition, the Federal Government 

would incur costs to build and maintain 

IT systems to receive, store, and analyze 

agent and broker compensation data and 

air ambulance data. In addition, the 

Federal Government would incur costs 

related to enforcement of the PHS Act, 

such as enforcement of reporting 

requirements for issuers and providers 

of air ambulance services, conducting 

compliance reviews of provider and 

facility websites, review of complaints 

received, and investigating instances of 

potential violations of the PHS Act by 

providers and facilities, including 

providers of air ambulance services, in 

states where HHS is directly enforcing 

PHS Act requirements. The Departments 

estimate that the total costs associated 

with these activities would be $4 

million in 2021, $20.3 million in 2022, 

$22.2 million in 2023, $18.3 million in 

2024, and $18.4 million in 2025. 

D. Regulatory Alternatives Considered 

In developing the policies contained 

in these proposed rules, the 

Departments considered various 

alternatives to the presented proposals. 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51767 

60https://www.sba.gov/document/support--tablesize-standards. 

61Available at https://www.cms.gov/CCIIO/ 

Resources/Data-Resources/mlr.html. 

62Adler, L., Hannick, K., and Lee, S. High Air 

Ambulance Charges Concentrated in Private EquityOwned Carriers. USC-Brookings Schaffer Initiative 

for Health Policy. October 13, 2020. 

In determining the disclosure and 

data reporting requirements for agent 

and broker compensation in these 

proposed rules, HHS considered 

requiring disclosure of intermediary 

payments to consumers (for example, 

payments made through general line 

agencies or marketing organizations) 

prior to finalizing enrollment. That level 

of detail was determined to be 

impractical and would not have enough 

positive impact on the consumer to 

justify the cost to implement. HHS also 

considered requiring the disclosure of 

actual amounts of compensation an 

agent or broker would receive. That, too, 

was rejected as being impossible to 

calculate ahead of time, as well as being 

potentially overly burdensome on the 

sales process. Furthermore, HHS 

considered requiring signed 

documentation from the consumer 

stating disclosure had occurred. This 

was not pursued, given concerns 

regarding burden. 

In determining the data reporting 

requirements for air ambulance services 

contained in these proposed rules, the 

Departments considered available 

alternative regulatory proposals. Given 

the statutory requirements of section 

106 of the No Surprises Act, these 

alternatives were limited to reducing the 

number of data reporting elements 

required. However, collecting data in a 

more aggregated format would not 

support many of the analyses required 

in the statute for the comprehensive 

report on air ambulance services 

required under section 106(c). Section 

106(c) of the No Surprises Act requires, 

among other analyses, assessments of 

amounts paid by issuers for furnishing 

air ambulance services, amounts paid 

out-of-pocket by consumers, any 

changes in the amounts paid over time 

and as an assessment of any evidence of 

gaps in rural access to air ambulance 

services. The absence of detailed 

transport-level data would limit the 

Secretaries’ of HHS and Transportation 

ability to conduct these analyses. 

E. Regulatory Flexibility Act 

The RFA (5 USC 601, et seq.), requires 

agencies to prepare an initial regulatory 

flexibility analysis to describe the 

impact of these proposed rules on small 

entities, unless the head of the agency 

can certify that the rule 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-for-profit organization that is not 

dominant in its field, or (3) a small 

government jurisdiction with a 

population of less than 50,000. States 

and individuals are not included in the 

definition of ‘‘small entity.’’ 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. 

The provisions in these proposed 

rules would affect health insurance 

issuers, group health plans, TPAs (on 

behalf of self-insured group health 

plans), and issuers of short-term, 

limited-duration insurance. Health 

insurance issuers and group health 

plans would be classified under the 

North American Industry Classification 

System (NAICS) code 524114 (Direct 

Health and Medical Insurance Carriers). 

According to SBA size standards, 

entities with average annual receipts of 

$41.5 million or less are considered 

small entities for this North American 

Industry Classification System codes. 

Issuers could possibly be classified in 

621491 (HMO Medical Centers) and, if 

this is the case, the SBA size standard 

would be $35 million or less.60 The 

Departments expect that few, if any, 

insurance companies underwriting 

comprehensive health insurance 

policies (in contrast, for example, to 

travel insurance policies or dental 

discount policies) fall below these size 

thresholds. Based on data from medical 

loss ratio (MLR) annual report 61

submissions for the 2019 MLR reporting 

year, approximately 77 out of 473 

issuers of health insurance coverage 

nationwide had total premium revenue 

of $41.5 million or less. This estimate 

may overstate the actual number of 

small health insurance companies that 

may be affected, since over 67 percent 

of these small companies belong to 

larger holding groups, and many, if not 

all, of these small companies are likely 

to have non-health lines of business that 

will result in their revenues exceeding 

$41.5 million. The Departments are of 

the view that the same assumptions also 

apply to TPAs that would be affected by 

these proposed rules. 

Providers of air ambulance services 

would be classified under NAICS code 

621910 (Ambulance Services), with a 

size standard of $16.5 million or less. 

Based on a 2020 USC-Brookings 

Schaeffer report on air ambulance 

services,62 by 2017, large private equity 

firms controlled roughly two-thirds of 

the air ambulance market. The 

Departments lack data on the number of 

small entities in the air ambulance 

market. As discussed earlier in the 

Collection of Information Requirements 

section, a provider of air ambulance 

services would incur a cost of 

approximately $41,000 in 2022 and 

annual costs of $1,794 in 2023 and 2024 

to submit the required information to 

HHS. The Departments seek comment 

on whether any providers of air 

ambulance services may be considered 

small entities (including entities with 

annual revenue under $16.5 million or 

independent not-for-profit entities not 

dominant in the industry) and whether 

these costs would result in an impact of 

more than 3 to 5 percent of revenues for 

those small entities. 

Agents and brokers would be 

classified under NAICS code 524210 

(Insurance Agencies and Brokerages), 

with a size standard of $8 million or 

less. The proposed requirement to 

provide agent or broker compensation 

disclosure to individuals prior to 

enrollment would affect an estimated 

55,541 agents and brokers, many of 

whom are likely to be employed by 

small entities. As discussed earlier in 

the HHS Collection of Information 

Requirements section, an agent or 

broker would incur a cost of 

approximately $33 to comply with the 

proposed requirement. This is unlikely 

to cause a change in revenue of more 

than 3 to 5 percent for agents and 

brokers. 

As discussed earlier in the Regulatory 

Impact Analysis, the proposed 

provisions related to enforcement in 

these proposed rules regarding 

enforcement of section 2799B–4 of the 

PHS Act would also affect 

approximately 2,400 providers 

(including providers of air ambulance 

services) and facilities annually, some of 

which might be small entities. A 

provider or facility subject to 

investigation would incur a cost of 

approximately $354. This is unlikely to 

cause a change in revenue of more than 

3 to 5 percent for providers and 

facilities. 

Therefore, the Departments do not 

anticipate that the proposed provisions 

in these proposed rules would have a 

significant effect on a substantial 

number of small entities. The 

Departments seek comment on this 

analysis. 

In addition, section 1102(b) of the 

SSA requires the Departments to 

prepare a regulatory impact analysis if 

a rule under Title XVIII, Title XIX, or 

part B of Title 42 of the SSA may have 

a significant impact on the operations of 

a substantial number of small rural 

hospitals. This analysis must conform to 

51768 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

63 45 CFR 150.201 currently provides that 

‘‘. . . each State enforces PHS Act requirements 

with respect to health insurance issuers that issue, 

sell, renew, or offer health insurance coverage in 

the State.’’ 

the provisions of section 603 of the 

RFA. For purposes of section 1102(b) of 

the SSA, the Departments define a small 

rural hospital as a hospital that is 

located outside of a metropolitan 

statistical area and has fewer than 100 

beds. While this rule is not subject to 

section 1102 of the SSA, the 

Departments have determined that these 

proposed rules would only affect small 

rural hospitals if they are subject to an 

enforcement action. However, as 

discussed earlier in the RIA, a facility 

subject to investigation would incur a 

cost of approximately $354. Therefore, 

the Departments are of the view that 

these proposed rules would not have a 

significant impact on the operations of 

a substantial number of small rural 

hospitals. The Departments seek 

comment on this analysis. 

F. Unfunded Mandates 

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 

that includes any Federal mandate that 

may result in expenditures in any 1 year 

by a state, local, or Tribal governments, 

in the aggregate, or by the private sector, 

of $100 million in 1995 dollars, updated 

annually for inflation. Currently, that 

threshold is approximately $158 

million. As discussed earlier in the RIA, 

plans, issuers, providers, and facilities, 

including providers of air ambulance 

services, would incur costs to comply 

with the proposed provisions of these 

proposed rules. The Departments 

estimate the combined impact on state, 

local, or Tribal governments and the 

private sector would not be above the 

threshold. 

G. Federalism 

Executive Order 13132 establishes 

certain requirements that Federal 

agencies must meet when they issue 

proposed rules that imposes substantial 

direct costs on state and local 

governments, preempts state law, or 

otherwise has federalism implications. 

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 an individual 

basis. 

While developing this rule, the 

Departments attempted to balance the 

states’ interests in regulating health 

insurance issuers, providers, including 

providers of air ambulance services, and 

facilities with the need to ensure market 

stability. By doing so, the Departments 

complied with the requirements of 

Executive Order 13132. 

Section 2799B–4(a)(1) of the PHS Act 

provides that states serve as the primary 

enforcement authority for these new 

requirements.63 Section 2799B–4(a)(2) 

of the PHS Act provides that if the 

Secretary of HHS determines that a state 

has failed to substantially enforce any of 

these new requirements, then HHS shall 

assume enforcement of such provision. 

Therefore, the proposed amendments in 

this rulemaking would apply the 

process outlined in 45 CFR 150.201 

through 150.221. by which HHS 

determines that a state is not 

substantially enforcing a PHS Act 

provision to the enforcement of the 

requirements in section 2799B–4. The 

remaining subparts of 45 CFR part 150 

that relate to CMS enforcement of 

section 2799B–4 would apply only 

when the Secretary of HHS makes the 

determination that a state has 

substantially failed to enforce. 

Section 2799B–4(c) of the PHS Act 

provides that ‘‘the sections specified in 

subsection (a)(1) shall not be construed 

to supersede any provision of state law 

which establishes, implements, or 

continues in effect any requirement or 

prohibition except to the extent that 

such requirement or prohibition 

prevents the application of a 

requirement or prohibition of such a 

section.’’ These proposed rules would 

not preempt any state law except to the 

extent that the Secretary of HHS makes 

the determination that a state has 

substantially failed to enforce. 

Chiquita Brooks-LaSure, 

Administrator of the Centers for 

Medicare & Medicaid Services, 

approved this document on August 26, 

2021. 

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. 

45 CFR Part 148 

Administrative practice and 

procedure, Health care, Health 

insurance, Insurance companies, 

Penalties, Reporting and recordkeeping 

requirements. 

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 150 

Administrative practice and 

procedure, Health care, Health 

insurance, Penalties, Reporting and 

recordkeeping requirements. 

Laurie Bodenheimer, 

Associate Director, Healthcare and Insurance, 

Office of Personnel Management. 

Douglas W. O’Donnell, 

Deputy Commissioner for Services and 

Enforcement, Internal Revenue Service. 

Ali Khawar, 

Acting 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 proposes to amend 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 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51769 

(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; 25 U.S.C. 1647b. 

Subpart A—Administration and 

General Provisions 

■ 2. Section 890.114 is amended by 

adding reserved paragraph (d) and 

paragraph (e) to read as follows: 

§ 890.114 Surprise billing. 

* * * * * 

(e) A carrier must comply with 

requirements of 45 CFR 149.230 with 

respect to an FEHB plan in the same 

manner as such provisions apply to a 

group health plan or health insurance 

issuer offering group or individual 

health insurance coverage and within 

the time frame set forth in 45 CFR 

149.230(a)(2). This paragraph (e) applies 

to data for each of the 2022 and 2023 

calendar years. 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

Accordingly, 26 CFR part 54 is 

proposed to be amended as follows: 

PART 54—PENSION EXCISE TAXES 

■ Paragraph 3. The authority citation 

for part 54 continues to read, in part, as 

follows: 

Authority: 26 U.S.C. 7805, unless 

otherwise noted. 

* * * * * 

■ Par. 4. Section 54.9823–1 is added to 

read as follows: 

§ 54.9823–1 Air ambulance reporting 

requirements. 

(a) In general. Each group health plan 

that satisfies the requirements of 45 CFR 

149.230 satisfies the requirements to 

submit a report to the Secretary of the 

Treasury pursuant to section 9823 of the 

Code. 

(b) Applicability. This section applies 

to data for each of the 2022 and 2023 

calendar years. 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

29 CFR Chapter XXV 

For the reasons set forth in the 

preamble, the Department of Labor 

proposes to amend 29 CFR part 2590 as 

set forth below: 

PART 2590—RULES AND 

REGULATIONS FOR GROUP HEALTH 

PLANS 

■ 5. The authority citation for part 2590 

continues to read as follows: 

Authority: 29 U.S.C. 1027, 1059, 1135, 

1161–1168, 1169, 1181–1183, 1181 note, 

1185, 1185a–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). 

■ 6. Section 2590.723 is added to read 

as follows: 

§ 2590.723 Air ambulance reporting 

requirements. 

(a) In general. Each group health plan 

or health insurance issuer offering group 

health insurance coverage that satisfies 

the requirements of 45 CFR 149.230 

satisfies the requirements to submit a 

report to the Secretary of Labor pursuant 

to section 723 of the Employee 

Retirement Income Security Act of 1974, 

as amended. 

(b) Applicability. This section applies 

to data for each of the 2022 and 2023 

calendar years. 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

For the reasons stated in the 

preamble, the Department of Health and 

Human Services proposes to amend 45 

CFR parts 144, 148, 149, and 150 as set 

forth below: 

PART 144—REQUIREMENTS 

RELATING TO HEALTH INSURANCE 

COVERAGE 

■ 7. The authority citation for part 144 

continues 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. 

■ 8. Section 144.101 is amended by 

revising paragraphs (e) introductory text 

and (e)(1) and (2) to read as follows: 

§ 144.101 Basis and purpose. 

* * * * * 

(e) Part 150 of this subchapter 

implements the enforcement provisions 

of sections 2723, 2761, and 2799B–4 of 

the PHS Act, as well as section 106 of 

the No Surprises Act, with respect to the 

following: 

(1) States that fail to substantially 

enforce one or more provisions of part 

146 of this subchapter concerning group 

health insurance coverage, one or more 

provisions of part 147 of this subchapter 

concerning group or individual health 

insurance coverage, one or more 

provisions of part 148 of this subchapter 

concerning individual health insurance 

coverage or short-term, limited-duration 

insurance, or one or more provisions of 

part 149 of this subchapter concerning 

group or individual health insurance 

coverage, providers and facilities, and 

providers of air ambulance services. 

(2) Issuers as defined in § 144.103, 

and providers and facilities, each as 

defined in § 150.103 of this subchapter, 

in States described in paragraph (e)(1) of 

this section. 

* * * * * 

PART 148—REQUIREMENTS FOR THE 

INDIVIDUAL HEALTH INSURANCE 

MARKET 

■ 9. The authority citation for part 148 

is revised to read as follows: 

Authority: 42 U.S.C. 300gg–21 through 

300gg–63, 300gg–91, and 300gg–92, as 

amended. 

■ 10. Section 148.101 is revised to read 

as follows: 

§ 148.101 Basis and purpose. 

This part implements sections 2722 

through 2763 and 2791 and 2792 of the 

PHS Act. Its purpose is to guarantee the 

renewability of all coverage in the 

individual market. It also provides 

certain protections for mothers and 

newborns with respect to coverage for 

hospital stays in connection with 

childbirth and protects all individuals 

and family members who have, or seek, 

individual health insurance coverage 

from discrimination based on genetic 

information. It also sets forth reporting 

and disclosure requirements on health 

insurance issuers offering individual 

health insurance coverage or short-term, 

limited-duration insurance regarding 

the amount of direct and indirect 

compensation paid to agents or brokers 

associated with enrolling consumers in 

such coverage. 

■ 11. Section 148.102 is amended by 

adding paragraph (a)(3) and revising 

paragraph (b) to read as follows: 

§ 148.102 Scope and applicability date. 

(a) * * * 

51770 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

(3) The requirements in § 148.410 that 

pertain to the disclosure and reporting 

of agent and broker compensation apply 

to health insurance issuers of individual 

health insurance coverage or short-term, 

limited-duration insurance, as defined 

in § 144.103 of this subchapter. 

(b) Applicability date. Except as 

provided in § 148.124 (certificate of 

creditable coverage), § 148.170 

(standards relating to benefits for 

mothers and newborns), § 148.180 

(prohibition of health discrimination 

based on genetic information), and 

§ 148.410 (reporting and disclosure of 

agent and broker compensation), the 

requirements of this part apply to health 

insurance coverage offered, sold, issued, 

renewed, in effect, or operated in the 

individual market after June 30, 1997. 

Notwithstanding the previous sentence, 

the definition of ‘‘short-term, limitedduration insurance’’ in § 144.103 of this 

subchapter is applicable October 2, 

2018. 

■ 12. Add subpart F to read as follows: 

Subpart F—Requirements Related to 

Reporting and Disclosure 

§ 148.410 Reporting and disclosure of 

agent and broker compensation for 

individual health insurance coverage or 

short-term, limited-duration insurance. 

(a) In general. A health insurance 

issuer offering individual health 

insurance coverage or short-term, 

limited-duration insurance must make 

disclosures to individuals, as described 

in paragraph (c) of this section, and 

provide reports to the Secretary, as 

described in paragraph (d) of this 

section, regarding direct and indirect 

compensation provided by the issuer to 

an agent or broker associated with 

enrolling individuals in such coverage. 

(b) Definitions. The following 

definitions apply to this section: 

(1) Agent or broker has the meaning 

given in § 155.20 of this subchapter. 

(2) Commission schedule means an 

itemized list or table that provides the 

commission levels that are paid by an 

issuer for the sale, placement, or 

renewal of individual health insurance 

coverage or short-term, limited-duration 

insurance. 

(3) Direct compensation means 

monetary amounts, including sales and 

base commissions, paid by an issuer 

that are attributable directly to the 

policy, certificate, or contract of 

insurance and that are paid to an agent 

or broker for the sale, placement, or 

renewal of individual health insurance 

coverage or short-term, limited-duration 

insurance. 

(4) Indirect compensation means 

payments by an issuer attributable 

indirectly to a policy, certificate, or 

contract of insurance to agents, brokers, 

and other persons for items other than 

sales and base commissions (for 

example, service fees, consulting fees, 

finders’ fees, profitability and 

persistency bonuses, awards, prizes, 

volume-based incentives, and nonmonetary forms of compensation). 

(5) Policyholder means the individual 

who purchases individual health 

insurance coverage or short-term, 

limited-duration insurance and who is 

responsible for the payment of 

premiums. 

(c) Disclosure requirements—(1) 

General requirements. An issuer 

described in paragraph (a) of this 

section must disclose to a potential or 

existing policyholder the amount of 

direct and indirect compensation 

provided to an agent or broker 

associated with enrolling the 

policyholder in individual health 

insurance coverage or short-term, 

limited-duration insurance. 

(2) Disclosures related to initial 

enrollments in a plan. An issuer must 

disclose to all potential or new 

policyholders the amount of direct and 

indirect compensation, including the 

commission schedule applicable to the 

potential or current plan selection by all 

potential or new policyholders and an 

explanation of qualifying thresholds for 

the payment of indirect compensation to 

an agent or broker (or, if an issuer does 

not use commission schedules, the 

information described in paragraph 

(c)(5) of this section). Such disclosure 

must be made— 

(i) Prior to when a potential 

policyholder finalizes their plan 

selection; and 

(ii) On any documentation confirming 

the initial enrollment, including 

enrollment documentation required by 

applicable State or Federal law or an 

initial enrollment package. 

(3) Disclosures related to renewals of 

enrollment in a plan. For renewals of 

enrollment in a plan, an issuer must 

disclose to a policyholder the amount of 

direct and indirect compensation, 

including, but not limited to, the 

commission schedule applicable to a 

plan renewal and an explanation of 

qualifying thresholds for the payment of 

indirect compensation to an agent or 

broker (or, if an issuer does not use 

commission schedules, the information 

described in paragraph (c)(5) of this 

section). Such disclosure must 

accompany the plan renewal notice 

required in § 147.106(f) of this 

subchapter or § 148.122(i), if applicable. 

(4) Default disclosure. In the absence 

of any documentation required by State 

law or the requirement for a notice of 

renewal of coverage, issuers must 

disclose the amount of direct and 

indirect compensation, including 

information typically itemized on a 

commission schedule used to determine 

agent or broker compensation as well as 

an explanation of qualifying thresholds 

for the payment of indirect 

compensation to an agent or broker, 

with the invoice for the first premium 

payment for the initial coverage term 

and for each renewal period. 

(5) Compensation information. At a 

minimum, commission schedules or 

other documents that detail the 

applicable commission levels used to 

satisfy the requirements of this section 

must clearly specify commissions paid 

by the issuer to an agent or broker for 

the applicable plans for which the agent 

or broker has an appointment with the 

issuer, and distinguish between 

commission payments associated with 

new enrollments and such payments for 

renewed enrollments if the issuer 

differentiates compensation for those 

two types of enrollments. At a 

minimum, compensation information 

must also explain the qualifying 

thresholds for the payment of indirect 

compensation, such as bonuses, to an 

agent or broker. If an issuer of 

individual health insurance coverage or 

short-term, limited-duration insurance 

also offers direct or indirect 

compensation that is not captured by 

the commission schedule, the issuer 

must supplement the disclosure of the 

information on the commission 

schedule with additional 

documentation disclosing such other 

compensation. 

(d) Reporting requirements—(1) In 

general. An issuer described in 

paragraph (a) of this section must report 

to the Secretary, in a form and manner 

prescribed by the Secretary, any direct 

and indirect compensation provided to 

an agent or broker associated with 

enrolling individuals in individual 

health insurance coverage and shortterm, limited-duration insurance sold by 

the issuer. 

(2) Payments to intermediaries. 

Reporting must reflect both 

compensation arrangements directly 

between the writing agent or broker and 

the issuer and compensation 

arrangements from the issuer to the 

writing agent or broker made through 

one or more intermediary organizations, 

for example, general line agencies or 

marketing organizations. 

(3) Reporting period. The issuer must 

report, annually, on direct and indirect 

compensation paid to agents and 

brokers for individual health insurance 

coverage and short-term, limitedVerDate Sep<11>2014 16:57 Sep 15, 2021 Jkt 253001 PO 00000 Frm 00042 Fmt 4701 Sfmt 4702 E:\FR\FM\16SEP2.SGM 16SEP2
Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51771 

duration insurance effective during the 

preceding calendar year. 

(4) Reporting deadline. The report 

required under this paragraph (d) for a 

specific calendar year must be 

submitted to HHS no later than the last 

business day of July of the calendar year 

following the applicable reporting 

period. 

(e) Applicability. The requirements of 

this section apply with respect to 

contracts executed on or after December 

27, 2021, between an agent or broker 

and a health insurance issuer offering 

individual health insurance coverage or 

short-term, limited-duration insurance, 

as applicable. For the purpose of 

determining the date of contract 

execution, the execution of contractual 

addenda or revisions to the material 

terms of a pre-existing contract is 

deemed the execution of a new contract. 

PART 149—SURPRISE BILLING AND 

TRANSPARENCY REQUIREMENTS 

■ 13. The authority citation for part 149 

continues to read as follows: 

Authority: 42 U.S.C. 300gg–111 through 

300gg–139, as amended. 

■ 14. Section 149.10 is amended by 

revising paragraph (a) to read as follows: 

§ 149.10 Basis and scope. 

(a) Basis. This part implements Parts 

D and E of Title XXVII of the PHS Act, 

as well as section 106(a) of the No 

Surprises Act (Pub. L. 116–260, 134 

Stat. 2852). 

* * * * * 

■ 15. Section 149.20 is amended by 

revising paragraph (a)(1) to read as 

follows: 

§ 149.20 Applicability. 

(a) * * * 

(1) The requirements in subparts B, C, 

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. 

* * * * * 

■ 16. Section 149.30 is amended by 

adding the definitions of ‘‘Air 

ambulance base’’ and ‘‘National 

Provider Identifier (NPI)’’ in 

alphabetical order to read as follows: 

§ 149.30 Definitions. 

* * * * * 

Air ambulance base means a site from 

which a provider of air ambulance 

services operates to provide air 

ambulance services. 

* * * * * 

National Provider Identifier (NPI) has 

the meaning given in 45 CFR 162.406. 

* * * * * 

■ 17. Add subpart C to read as follows: 

Subpart C—Transparency and 

Reporting Requirements for the Group 

and Individual Health Insurance 

Markets 

Sec. 

149.210—149.220 [Reserved] 

149.230 Reporting requirements regarding 

air ambulance services for plans and 

issuers. 

§§ 149.210–149.220 [Reserved] 

§ 149.230 Reporting requirements 

regarding air ambulance services for plans 

and issuers. 

(a) Reporting requirements—(1) 

General requirements. A group health 

plan or health insurance issuer offering 

group or individual health insurance 

coverage must submit to the Secretary a 

report that includes the information 

described in paragraph (b) of this 

section for calendar years 2022 and 

2023. 

(2) Timing and form of report. The 

reports reflecting the data for each of the 

2022 and 2023 calendar year reporting 

periods must be submitted to the 

Secretary by March 31, 2023, and by 

March 30, 2024, respectively, in the 

form and manner prescribed by the 

Secretary in guidance. The report must 

include data relevant to services 

furnished within the reporting period as 

well as data relevant to services for 

which payments were made within the 

reporting period. 

(3) Transfer of business. A health 

insurance issuer offering group or 

individual health insurance coverage 

that acquires a line or block of business 

from another issuer offering group or 

individual health insurance coverage 

must submit the information required in 

paragraph (b) of this section on behalf 

of the acquired business, for the entire 

calendar year during which the 

acquisition took place. The reporting 

requirement in this paragraph (a)(3) also 

applies to the selling and acquiring 

issuers if a sale or transfer occurs as a 

result of issuers being merged, 

combined, spun off, affected by, or 

engaging in any similar transaction 

during a calendar year. To ensure 

completeness and timeliness of 

reporting of all relevant air ambulance 

services data, the Secretary may provide 

in guidance additional examples of 

what constitutes a transfer or 

acquisition for purposes of this 

paragraph (a)(3). 

(b) Required data elements. The 

report required in paragraph (a) of this 

section must include the following data 

elements with respect to air ambulance 

services provided under a group health 

plan or group or individual health 

insurance coverage to participants, 

beneficiaries, or enrollees during the 

relevant reporting period, for each claim 

for air ambulance services that was 

received or paid for during the reporting 

period: 

(1) Identifying information for any 

group health plan, plan sponsor, or 

issuer, and any entity reporting on 

behalf of the plan or issuer, as 

applicable. 

(2) Market type for the plan or 

coverage (individual, large group, small 

group, self-insured plans offered by 

small employers, self-insured plans 

offered by large employers, and Federal 

Employees Health Benefits). 

(3) Date of service. 

(4) Billing NPI information. 

(5) Current Procedural Terminology 

(CPT) code or Healthcare Common 

Procedure Coding System (HCPCS) code 

information. 

(6) Transport information (including 

aircraft type, loaded miles, pick-up 

(origin zip code) and drop-off 

(destination zip code) locations, 

whether the transport was emergent or 

non-emergent, whether the transport 

was an inter-facility transport, and, to 

the extent this information is available 

to the plan or issuer, the service 

delivery model of the provider (such as 

government-sponsored (Federal, State, 

county, city/township, other 

municipal), public-private partnership, 

tribally-operated program in Alaska, 

hospital-owned or sponsored program, 

hospital independent partnership 

(hybrid) program, independent). 

(7) Whether the provider had a 

contract with the group health plan or 

issuer of group or individual health 

insurance coverage, as applicable, to 

furnish air ambulance services under 

the plan or coverage, respectively. 

(8) Claim adjudication information, 

including whether the claim was paid, 

denied, appealed; denial reason; and 

appeal outcome. 

(9) Claim payment information, 

including submitted charges, amounts 

paid by each payor, and cost sharing 

amount, if applicable. 

(c) Special rules to prevent 

unnecessary duplication—(1) Special 

rule for insured group health plans. To 

the extent coverage under a group 

health plan consists of group health 

insurance coverage, the plan satisfies 

the requirements of paragraph (a) of this 

section if the plan requires the health 

insurance issuer offering the coverage to 

report the information required by this 

section pursuant to a written agreement. 

51772 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

Accordingly, if a health insurance issuer 

and a group health plan sponsor enter 

into a written agreement under which 

the issuer agrees to report the 

information required under paragraph 

(a) of this section in compliance with 

this section, and the issuer fails to do so, 

then the issuer, but not the plan, 

violates the reporting requirements of 

paragraph (a) of this section. 

(2) Other contractual arrangements. A 

group health plan or issuer of group or 

individual health insurance coverage 

may satisfy the requirements under 

paragraph (a) of this section by entering 

into a written agreement under which 

another party (such as a third-party 

administrator or health care claims 

clearinghouse) reports the information 

required in paragraph (a) of this section 

in compliance with this section. 

Notwithstanding the preceding 

sentence, if a group health plan or 

health insurance issuer chooses to enter 

into such an agreement and the party 

with which it contracts fails to provide 

the information in accordance with this 

section, the plan or issuer violates the 

reporting requirements of paragraph (a) 

of this section. 

■ 18. Section 149.460 is added to read 

as follows: 

§ 149.460 Reporting requirements 

regarding air ambulance services for 

providers of air ambulance services. 

(a) Reporting requirements—(1) 

General requirements. A provider of air 

ambulance services must submit to the 

Secretary a report which includes the 

information described in paragraph (b) 

of this section for calendar years 2022 

and 2023. 

(2) Timing and form of report. The 

reports reflecting the data for each of the 

2022 and 2023 calendar year reporting 

periods must be submitted to the 

Secretary by March 31, 2023, and by 

March 30, 2024, respectively, in the 

form and manner prescribed by the 

Secretary in guidance. The report must 

include data relevant to services 

furnished within the reporting period as 

well as data relevant to services for 

which payments were made within the 

reporting period. 

(3) Transfer of business. A provider of 

air ambulance services that acquires a 

line or block of business from another 

provider of air ambulance services must 

submit the information required in 

paragraph (b) of this section on behalf 

of the acquired business, for the entire 

calendar year during which the 

acquisition took place. The reporting 

requirement in this paragraph (a)(3) also 

applies to the selling and acquiring 

providers of air ambulance services if a 

sale or transfer occurs as a result of 

providers of air ambulance services 

being merged, combined, spun off, 

affected by, or engaging in any similar 

transaction during a calendar year. To 

ensure completeness and timeliness of 

reporting of all relevant air ambulance 

services data, the Secretary may provide 

in guidance additional examples of 

what constitutes a transfer or 

acquisition for purposes of this 

paragraph (a)(3). 

(b) Required data elements. The 

report required in paragraph (a) of this 

section must include the following data: 

(1) Corporate information. Each 

provider of air ambulance services must 

report the following information about 

their company or organization: 

(i) Identifying information for the 

company or organization. 

(ii) Identifying information for the 

parent organization, owner, other 

proprietor, or sponsor of the provider of 

air ambulance services. 

(iii) Information on all air ambulance 

bases owned, leased, operated, or used 

by the provider of air ambulance 

services. 

(iv) NPIs registered to the provider of 

air ambulance services. 

(2) Air ambulance base information. 

The following information must be 

reported separately for each air 

ambulance base owned, leased, or 

operated by the provider of air 

ambulance services: 

(i) Location (City and State of the air 

ambulance base). 

(ii) NPIs associated with the base. 

(iii) Number, type, and other 

characteristics of the aircraft located on 

the base; 

(iv) The number and type of staff. 

(v) The number and type of air 

ambulance responses and transports per 

aircraft. 

(vi) Total air ambulance responses per 

base and total air ambulance responses 

that did not result in transports. 

(vii) Information regarding any 

contracts the provider has with group 

health plans or health insurance issuers 

to furnish air ambulance services 

associated with the base. 

(viii) Air medical subscriptions or 

ambulance/emergency medical service 

membership programs associated with 

the base. 

(ix) Non-direct payor contracts (such 

as waiver, rental, lease, or supplemental 

arrangements) with group health plans, 

health insurance issuers, or other 

entities, such as third-party 

administrators or provider networks, 

associated with the base. 

(x) Service delivery model(s) (such as 

government-sponsored (Federal, State, 

county, city/township, other 

municipal), public-private partnership, 

tribally-operated program in Alaska, 

hospital-owned or sponsored program, 

hospital independent partnership 

(hybrid) program, independent), and 

whether the base shares operational 

costs with affiliated or sponsor 

organizations (such as a hospital or 

municipality), if applicable. 

(xi) Whether the base operates ground 

ambulance services as well as air 

ambulance services. 

(3) Cost information. The following 

information must be reported separately 

for each air ambulance base described in 

paragraph (b)(2) of this section, as well 

as at the regional or corporate level, if 

applicable: 

(i) Labor costs. 

(ii) Facility costs. 

(iii) Vehicle costs. 

(iv) Equipment and supplies costs. 

(v) Vendor costs. 

(vi) Overhead costs (including 

administrative and general expenses, 

insurance costs, and training costs). 

(4) Revenue information. The 

following information must be reported 

separately for each air ambulance base 

described in paragraph (b)(2) of this 

section, as well as at the regional or 

corporate level, if applicable: 

(i) Revenue from paid air ambulance 

transports, by payor type (including 

Medicare fee-for-service (FFS), Medicare 

Advantage, Medicaid, Veterans’ Health 

Administration, TRICARE, Indian 

Health Service, group health plan, 

health insurance issuer, Federal 

Employees Health Benefits plan, 

Worker’s Compensation, patient cost 

sharing, or patient self-pay). 

(ii) Revenue from other sources 

including, but not limited to: Contracts 

with facilities such as hospitals, prisons, 

and nursing homes; revenue from 

emergency air medical services other 

than for transports (such as 

transportation of medical personnel or 

equipment); revenue from subcontracted ambulance services; fees for 

standby events; payments from nondirect contracts such as waiver, rental, 

lease, and supplemental arrangements; 

air medical subscriptions and 

ambulance or emergency medical 

service membership programs; 

charitable donations and foundation 

funding; program-related investments; 

receipt of local taxes earmarked for 

emergency medical services; contract 

revenues from local governments in 

return for air ambulance services; 

enterprise funds and utility rates; sales 

of assets and services; bond or debt 

financing; State or local donation of 

vehicles or durable equipment; or 

funding grants or the provision of timelimited funding from a government 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51773 

(including Federal, State, local, or 

other)). 

(5) Transport information. The 

following information must be reported 

separately for each air ambulance 

transport provided during the reporting 

period: 

(i) Date of service. 

(ii) Billing NPI information. 

(iii) Current Procedural Terminology 

(CPT) code or Healthcare Common 

Procedure Coding System (HCPCS) code 

information. 

(iv) Air ambulance base. 

(v) Loaded miles. 

(vi) Pick-up (origin zip code) and 

drop-off (destination zip code) 

locations. 

(vii) Duration of flight. 

(viii) Whether the transport was 

emergent or non-emergent. 

(ix) Whether the transport was a scene 

response, inter-facility, or other 

transport; 

(x) Primary payor information, 

including payor type (such as Medicare 

FFS, Medicare Advantage, Medicaid, 

Veterans’ Health Administration, 

TRICARE, Indian Health Service, group 

health plan, health insurance issuer, 

Federal Employees Health Benefits plan, 

Workers’ Compensation, patient costsharing, or patient self-pay). 

(xi) Information regarding any 

contracts the provider has with the 

group health plan or health insurance 

issuer, if and as applicable, to provide 

air ambulance services under the plan 

or coverage, respectively. 

(xii) Payment methodology (such as 

base rate, mileage, and intervention or 

other charges), if applicable. 

(xiii) Claim adjudication information, 

including whether the claim was paid, 

denied, appealed, denial reason, and 

appeal outcome, if applicable. 

(xiv) Claim/transport payment 

information, including submitted 

charges, amount paid by payor other 

than patient, cost-sharing amount (if 

applicable), amount billed to patient, 

amount collected from patient, whether 

the bill was referred to collections, and 

payments from sources other than the 

primary payor. 

PART 150—CMS ENFORCEMENT OF 

GROUP AND INDIVIDUAL INSURANCE 

MARKET, AND PROVIDER AND 

FACILITY REQUIREMENTS 

■ 19. The authority citation for part 150 

is revised to read as follows: 

Authority: 42 U.S.C. 300gg through 300gg– 

63, 300gg–91, 300gg–92, 300gg–118, and 

300gg–134, as amended. 

■ 20. The heading for part 150 is revised 

to read as set forth above. 

■ 21. Section 150.101 is amended by 

revising paragraphs (a) and (b)(2) and 

adding paragraph (b)(3) to read as 

follows: 

§ 150.101 Basis and scope. 

(a) Basis. This part implements CMS’s 

enforcement authority under sections 

2723, 2761, and 2799B–4 of the PHS 

Act, as well as section 106(e) of the No 

Surprises Act (Pub. L. 116–260, 134 

Stat. 2852). 

(b) * * * 

(2) Enforcement with respect to health 

insurance issuers. The States have 

primary enforcement authority with 

respect to the requirements of Title 

XXVII of the PHS Act that apply to 

health insurance issuers offering 

coverage in the group or individual 

health insurance market. If CMS 

determines under subpart B of this part 

that a State is not substantially 

enforcing Title XXVII of the PHS Act, 

including the implementing regulations 

in parts 146, 147, 148, and 149 of this 

subchapter, CMS enforces them under 

subpart C of this part. 

(3) Enforcement with respect to 

providers and facilities. The States have 

primary enforcement authority with 

respect to the requirements of Part E of 

Title XXVII of the PHS Act that apply 

to providers and facilities. If CMS 

determines under subpart B of this part 

that a State is not substantially 

enforcing Part E of Title XXVII of the 

PHS Act, and its implementing 

regulations in part 149 of this 

subchapter, CMS enforces them under 

subpart E of this part. CMS has primary 

enforcement authority with respect to 

the provisions of section 106(a) of the 

No Surprises Act, including the 

implementing regulations in part 149 of 

this subchapter, which CMS enforces 

under subpart E of this part. 

■ 22. Section 150.103 is amended by— 

■ a. Revising the introductory text; 

■ b. Adding the definition of ‘‘Facility’’ 

in alphabetical order; 

■ c. In the definition of ‘‘Individual 

health insurance policy or individual 

policy,’’ revising the introductory text 

and paragraph (2); 

■ d. Revising the definition of ‘‘PHS Act 

requirements;’’ and 

■ e. Adding the definitions ‘‘Provider’’ 

in alphabetical order. 

The revisions and additions read as 

follows: 

§ 150.103 Definitions. 

The definitions that appear in parts 

144 and 149 of this subchapter apply to 

this part unless stated otherwise. As 

used in this part: 

* * * * * 

Facility means a health care facility, 

an emergency department of a hospital, 

and an independent freestanding 

emergency department, as those terms 

are defined in § 149.30 of this 

subchapter, and any other facility 

subject to the requirements in Part E of 

Title XXVII of the PHS Act. 

* * * * * 

Individual health insurance policy or 

individual policy means the legal 

document or contract issued by an 

issuer to an individual that contains the 

conditions and terms of the insurance. 

Any association or trust arrangement 

that is not a group health plan as 

defined in § 144.103 of this subchapter 

or does not provide coverage in 

connection with one or more group 

health plans is individual health 

insurance coverage subject to the 

requirements of parts 147, 148, and 149 

of this subchapter. The term ‘‘individual 

health insurance policy’’ includes a 

policy that is— 

* * * * * 

(2) Administered, or placed in a trust, 

and is not sold in connection with a 

group health plan subject to the 

provisions of parts 146, 147, and 149 of 

this subchapter. 

PHS Act requirements means the 

requirements of Title XXVII of the PHS 

Act and its implementing regulations in 

parts 146, 147, 148, and 149 of this 

subchapter. 

* * * * * 

Provider means a physician or other 

health care provider as defined in 

§ 149.30 of this subchapter, and a 

provider of air ambulance services as 

defined in § 149.30 of this subchapter. 

* * * * * 

■ 23. Revise the heading for subpart B 

to read as follows: 

Subpart B—CMS Enforcement 

Processes for Determining Whether 

States Are Failing to Substantially 

Enforce PHS Act Requirements 

■ 24. Section 150.201 is revised to read 

as follows: 

§ 150.201 State enforcement. 

Except as provided in subparts C and 

E of this part, each State enforces PHS 

Act requirements with respect to health 

insurance issuers that issue, sell, renew, 

or offer health insurance coverage in the 

State and with respect to providers and 

facilities that furnish items or services 

to individuals in the State. 

■ 25. Section 150.203 is amended by 

revising the introductory text to read as 

follows: 

§ 150.203 Circumstances requiring CMS 

enforcement. 

CMS enforces PHS Act requirements 

to the extent warranted (as determined 

51774 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

by CMS) in any of the following 

circumstances: 

* * * * * 

■ 26. Section 150.205 is amended by 

revising paragraphs (d) and (e)(2) to read 

as follows: 

§ 150.205 Sources of information 

triggering an investigation of State 

enforcement. 

* * * * * 

(d) Information from the governors; 

commissioners of insurance, or chief 

insurance regulatory officials, or 

officials responsible for regulating 

health maintenance organizations 

(HMOs) of the various States; and 

directors of public health or any other 

State department, agency, or board of 

the various States with applicable 

oversight authority regarding the status 

of their enforcement of PHS Act 

requirements. 

(e) * * * 

(2) Not pre-empted as provided in 

§ 146.143 (relating to group market 

provisions) and § 148.210 (relating to 

individual market requirements) on the 

basis that they prevent the application 

of a PHS Act requirement. 

* * * * * 

■ 27. Section 150.211 is amended by 

revising paragraph (b) and adding 

paragraph (d) to read as follows: 

§ 150.211 Notice to the State. 

* * * * * 

(b) If the alleged failure involves a 

health insurance issuer, the insurance 

commissioner or chief insurance 

regulatory official. 

* * * * * 

(d) If the alleged failure involves a 

provider or facility, the official 

responsible for regulating such provider 

or facility, if different from the officials 

listed in paragraphs (b) and (c) of this 

section. 

■ 28. Section 150.221 is amended by 

revising paragraphs (a)(2) and (b) to read 

as follows: 

§ 150.221 Transition to State enforcement. 

(a) * * * 

(2) Instructions to issuers, providers, 

and facilities, as applicable. 

* * * * * 

(b) CMS may also negotiate a process 

to ensure that, to the extent practicable, 

as permitted by law, and as applicable, 

its records documenting issuer, 

provider, and facility compliance and 

other relevant areas of CMS’s 

enforcement operations are made 

available to the State regulatory 

authority that will assume enforcement 

responsibility. 

■ 29. Section 150.303 is amended by 

revising the section heading and 

paragraphs (a) introductory text, (a)(2), 

and (c) to read as follows: 

§ 150.303 Basis for initiating an 

investigation or examination. 

(a) Information. Any information that 

indicates that any issuer may be failing 

to meet the PHS Act requirements or 

that any group health plan that is a nonFederal governmental plan may be 

failing to meet an applicable PHS Act 

requirement, may warrant an 

investigation or market conduct 

examination at CMS’s discretion. An 

investigation or examination may 

include a review of any information 

CMS identifies as relevant to determine 

if a violation of the PHS Act has 

occurred. CMS may consider, but is not 

limited to considering, the following 

sources or types of information to 

determine if an investigation or market 

conduct examination is warranted: 

* * * 

(2) Reports from providers and 

facilities, State insurance departments, 

the National Association of Insurance 

Commissioners, and other Federal and 

State agencies. 

* * * 

(c) Random and targeted 

investigations and market conduct 

examinations. CMS may conduct 

random or targeted investigations or 

market conduct examinations to ensure 

that health insurance issuers offering 

health insurance coverage in the 

individual or group markets, and nonFederal governmental plans, are in 

compliance with applicable PHS Act 

requirements. 

■ 30. Section 150.307 is amended by 

revising the introductory text and 

paragraphs (a) and (b) and adding 

paragraph (d) to read as follows: 

§ 150.307 Notice to responsible entities. 

If information received under 

§ 150.303(a) indicates a potential 

violation, or if CMS selects an issuer or 

non-Federal governmental plan for 

investigation under § 150.303(c), CMS 

provides written notice to the 

responsible entity or entities identified 

under § 150.305. The notice does the 

following: 

(a) Describes the information received 

under § 150.303(a) that gave rise to the 

investigation, or notifies the responsible 

entity that it was selected by CMS for 

investigation under § 150.303(c) and 

identifies the PHS Act requirements that 

are the focus of the investigation, as 

applicable. 

(b) Provides the date by which the 

responsible entity or entities must 

respond and provide any 

documentation CMS identifies as 

relevant for purposes of an 

investigation, and by which the 

responsible entity or entities can 

provide additional information, 

including documentation of compliance 

as described in § 150.311, that, in the 

responsible entity’s view, will aid CMS 

in evaluating the entity’s compliance 

with the PHS Act requirements 

identified in the notice. 

* * * * * 

(d) States that CMS may require a 

plan of corrective action. 

■ 31. Section 150.309 is revised to read 

as follows: 

§ 150.309 Request for extension. 

In circumstances in which an entity 

cannot prepare a response to CMS or 

provide the requested information by 

the deadline provided in the notice 

under § 150.307, the entity may submit 

a written request for an extension from 

CMS detailing the reason for the 

extension request and showing good 

cause. Examples of what CMS would 

consider good cause include, but are not 

limited to, when a responsible entity 

indicates it has limited staffing 

resources to prepare a response, or 

when a responsible entity requests 

clarification from CMS regarding its 

request for information. If CMS grants 

the extension, the responsible entity 

must respond to the notice within the 

time frame specified in CMS’s letter 

granting the extension of time. Failure 

to respond within the initial deadline 

provided in the notice, or within any 

extended time frame, may result in 

CMS’s imposition of a civil money 

penalty based upon the complaint or 

other information alleging or indicating 

a violation of PHS Act requirements. 

■ 32. Section 150.311 is amended by 

revising paragraph (e) to read as follows: 

§ 150.311 Responses to allegations of 

noncompliance. 

* * * * * 

(e) Documentation of the entity’s 

issuance of conforming policies, 

certificates of insurance, plan 

documents, or amendments to 

policyholders or certificate holders 

before the issuance of the notice to the 

responsible entity or entities described 

in § 150.307 or § 150.313(e). 

* * * * * 

■ 33. Section 150.313 is amended by 

revising paragraphs (b), (c), and (e) and 

adding paragraphs (f), (g), (h), and (i) to 

read as follows: 

§ 150.313 Market conduct examinations. 

* * * * * 

(b) General. If, based on the 

information described in § 150.303(a), 

CMS finds evidence that a responsible 

entity may be in violation of a PHS Act 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51775 

requirement, or if CMS randomly selects 

an issuer or non-Federal governmental 

plan for examination under § 150.303(c), 

CMS may initiate a market conduct 

examination to ensure the entity is in 

compliance with applicable PHS Act 

requirements. CMS may conduct the 

examination either at the site of the 

issuer or other responsible entity, or a 

site CMS selects. 

(c) Appointment of examiners. When 

CMS identifies an issue that warrants 

further review or randomly selects an 

issuer or non-Federal governmental plan 

for examination, CMS will appoint one 

or more examiners to perform the 

examination and instruct them as to the 

scope of the examination. 

* * * * * 

(e) Initiation of examination. CMS 

initiates an examination by providing 

written notice to the responsible entity. 

The notice does the following: 

(1) Describes the information received 

under § 150.303(a) that served as the 

basis for CMS’s determination that a 

market conduct examination is 

warranted, or notifies the responsible 

entity that it was selected by CMS for 

examination under § 150.303(c), as 

applicable; 

(2) Describes the scope of the 

examination; 

(3) Identifies the examiners; 

(4) States that a civil money penalty 

may be assessed; and 

(5) States that CMS may require a plan 

of corrective action. 

(f) Documentation requests; extension 

of time. The responsible entity must 

forward to the site of examination any 

documentation CMS identifies as 

relevant for purposes of the 

examination. CMS will provide the 

responsible entity with an opportunity 

to provide additional information, 

including documentation of compliance 

as described in § 150.311, that the 

responsible entity believes will aid CMS 

in conducting the examination. This 

initial request will provide the 

responsible entity the date by which to 

forward the specified documentation to 

the location that CMS identifies. In 

circumstances in which an entity cannot 

prepare a response and provide the 

requested information to CMS by the 

deadline provided in the initial request, 

the entity may make a written request 

for an extension from CMS detailing the 

reason for the extension request and 

showing good cause. Examples of what 

CMS would consider good cause 

include, but are not limited to, when a 

responsible entity indicates it has 

limited staffing resources to prepare a 

response, or when a responsible entity 

requests clarification from CMS 

regarding its request for information. If 

CMS grants the extension, the 

responsible entity must respond to the 

documentation request within the time 

frame specified in CMS’s letter granting 

the extension request. Failure to 

respond by the deadline provided in the 

initial request, or within the extended 

time frame, may result in CMS’s 

imposition of a civil money penalty 

based upon the complaint or other 

information alleging or indicating a 

potential violation of applicable PHS 

Act requirements. 

(g) Field work. CMS will review the 

documentation submitted under 

paragraph (f) of this section. During the 

course of the examination, CMS may 

request additional information or 

documentation and will specify in the 

request the time frame allotted for 

providing it. In circumstances in which 

an entity cannot prepare a response and 

provide the requested information to 

CMS within the allotted time frame, the 

entity may submit to CMS a written 

request for an extension from CMS 

detailing the reason for the extension 

request and showing good cause. 

Examples of what CMS would consider 

good cause include, but are not limited 

to, when a responsible entity indicates 

it has limited staffing resources to 

prepare a response, or when a 

responsible entity requests clarification 

from CMS regarding its request for 

information. If CMS grants the 

extension, the responsible entity must 

respond to the documentation request 

within the time frame specified in 

CMS’s letter granting the extension 

request. Failure to respond and provide 

such additional documentation to CMS 

within the allotted time frame, or within 

an extended time frame as granted by 

CMS, may result in CMS’s imposition of 

a civil money penalty based upon the 

complaint or other information alleging 

or indicating a potential violation of 

applicable PHS Act requirements. 

During the course of the examination, 

upon review of the documentation 

submitted, CMS may identify and notify 

the responsible entity of any potential 

PHS Act violations and provide the 

responsible entity an opportunity to 

respond with additional information, 

including documentation of compliance 

as described in § 150.311, that the 

responsible entity believes demonstrates 

compliance or will otherwise aid CMS 

in conducting the examination. 

(h) Draft report of market conduct 

examination—(1) Contents of report. 

CMS will, upon completion of the 

examination, provide to the responsible 

entity a draft examination report that 

will include the scope of the 

examination, any findings of a PHS Act 

violation, and any proposed actions the 

responsible entity would need to take to 

correct such violation. 

(2) Response from the responsible 

entity. With respect to each examination 

issue identified in the draft examination 

report, the responsible entity may: 

(i) Concur, in whole or in part, with 

CMS’s position(s) as outlined in the 

draft examination report, explaining any 

corrective actions that have been or will 

be implemented; or 

(ii) Dispute, in whole or in part, 

CMS’s position(s), clearly outlining the 

basis for its dispute and submitting 

illustrative examples where appropriate. 

(i) Final report of market conduct 

examination. Upon receipt of a response 

from the responsible entity under 

paragraph (h)(2) of this section, CMS 

will provide to the responsible entity a 

final examination report containing 

CMS’s findings relevant to each 

examination issue that will consist of 

one or more of the following: 

(1) CMS’s concurrence with the 

responsible entity’s position; 

(2) CMS’s disagreement with the 

responsible entity’s position; 

(3) CMS’s determination that any 

corrective actions implemented by the 

responsible entity sufficiently addressed 

the identified PHS Act violation; 

(4) CMS’s determination that the 

corrective actions implemented by the 

responsible entity have not sufficiently 

addressed the identified PHS Act 

violation, and information on any 

further corrective actions deemed 

necessary by CMS; or 

(5) Notice to the responsible entity 

that has disagreed with a CMS finding 

and that has not undertaken corrective 

actions that there exists a violation of 

applicable PHS Act requirements and 

any actions the responsible entity must 

take prospectively to correct such 

violation. 

■ 34. Section 150.319 is amended by 

revising paragraph (a)(1) to read as 

follows: 

§ 150.319 Determining the amount of the 

penalty—mitigating circumstances. 

* * * * * 

(a) * * * 

(1) Before receipt of the notice issued 

under § 150.307 or § 150.313(e), 

implemented and followed a 

compliance plan as described in 

§ 150.311(f). 

* * * * * 

■ 35. Section 150.321 is amended by 

adding paragraph (d) to read as follows: 

§ 150.321 Determining the amount of 

penalty—aggravating circumstances. 

* * * * * 

51776 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

(d) The entity fails to cooperate with 

a CMS investigation or market conduct 

examination. 

■ 36. Section 150.325 is revised to read 

as follows: 

§ 150.325 Settlement authority. 

Nothing in §§ 150.315 through 

150.323 limits the authority of CMS to 

settle any issue or case described in the 

notice furnished in accordance with 

§ 150.307 or § 150.313(e), or to 

compromise on any penalty provided 

for in §§ 150.315 through 150.323. 

■ 37. Section § 150.401 is amended by 

revising the definition of ‘‘Respondent’’ 

to read as follows: 

§ 150.401 Definitions. 

* * * * * 

Respondent means an entity that 

received a notice of proposed 

assessment of a civil money penalty 

issued pursuant to § 150.343 or 

§ 150.515. 

■ 38. Section 150.405 is amended by 

revising paragraph (a) to read as follows: 

§ 150.405 Filing of request for hearing. 

(a) A respondent has a right to a 

hearing before an ALJ if it files a request 

for hearing that complies with 

§ 150.407(a), within 30 days after the 

date of issuance of either CMS’s notice 

of proposed determination under 

§ 150.343 or § 150.515, or notice that an 

alternative dispute resolution process 

has terminated. The request for hearing 

must be addressed as instructed in the 

notice of proposed determination. ‘‘Date 

of issuance’’ is five (5) days after the 

filing date, unless there is a showing 

that the document was received earlier. 

* * * * * 

■ 39. Section 150.417 is amended by 

revising paragraph (b)(1) to read as 

follows: 

§ 150.417 Issues to be heard and decided 

by ALJ. 

* * * * * 

(b) * * * 

(1) Applies the factors that are 

identified in § 150.317 or § 150.513. 

* * * * * 

■ 40. Section 150.445 is amended by 

revising paragraphs (g), (h), and (j) to 

read as follows: 

§ 150.445 Evidence. 

* * * * * 

(g) Evidence of acts other than those 

at issue in the instant case is admissible 

in determining the amount of any civil 

money penalty if those acts are used 

under § 150.317, § 150.323, or § 150.513 

to consider the entity’s prior record of 

compliance, to show motive, 

opportunity, intent, knowledge, 

preparation, identity, or lack of mistake. 

This evidence is admissible regardless 

of whether the acts occurred during the 

statute of limitations period applicable 

to the acts that constitute the basis for 

liability in the case and regardless of 

whether CMS’s notice sent in 

accordance with § 150.307, § 150.313(e), 

§ 150.343, § 150.505, or § 150.515 

referred to them. 

(h) The ALJ will permit the parties to 

introduce rebuttal witnesses and 

evidence, and to cross-examine 

witnesses. 

* * * * * 

(j) The ALJ may not consider evidence 

regarding the willingness and ability to 

enter into and successfully complete a 

corrective action plan when that 

evidence pertains to matters occurring 

after CMS’s notice under § 150.307, 

§ 150.313(e), or § 150.505. 

■ 41. Section 150.455 is amended by 

adding paragraph (b)(9) to read as 

follows: 

§ 150.455 Sanctions. 

* * * * * 

(b) * * * 

(9) In the case of a violation of part 

149 of this subchapter, ordering the 

party or attorney to pay attorneys’ fees 

and other costs caused by the failure or 

misconduct. 

■ 42. Add subpart E to read as follows: 

Subpart E—CMS Enforcement with Respect 

to Providers and Facilities 

Sec. 

150.501 General rule regarding the 

imposition of civil money penalties. 

150.503 Basis for initiating an investigation; 

injunctive relief. 

150.505 Notice to providers or facilities. 

150.507 Request for extension. 

150.509 Responses to allegations of 

noncompliance. 

150.511 Liability for penalties. 

150.513 Amount of penalty. 

150.515 Notice of proposed determination. 

150.517 Hearing. 

150.519 Failure to request a hearing. 

150.521 Collateral estoppel. 

150.523 Judicial review. 

150.525 Notice to other agencies. 

Subpart E—CMS Enforcement with 

Respect to Providers and Facilities 

§ 150.501 General rule regarding the 

imposition of civil money penalties. 

(a) If any provider or facility that is 

subject to CMS’s enforcement authority 

under § 150.101(b)(3) fails to comply 

with a requirement in Title XXVII, Part 

E of the PHS Act, such provider or 

facility may be subject to a civil money 

penalty as described in this subpart. 

(b) If any provider of air ambulance 

services fails to timely submit the 

information required in section 106(a) of 

the No Surprises Act, such provider 

may be subject to a civil money penalty 

as described in this subpart. 

§ 150.503 Basis for initiating an 

investigation; injunctive relief. 

(a) Basis for investigation. Any 

information that indicates that any 

provider or facility may be failing to 

meet the PHS Act requirements or 

submit the information required in 

section 106(a) of the No Surprises Act 

may warrant an investigation at CMS’s 

discretion. An investigation may 

include a review of any information 

CMS identifies as relevant to determine 

if a violation of the PHS Act or section 

106(a) of the No Surprises Act has 

occurred. CMS may consider, but is not 

limited to considering, the following 

sources or types of information to 

determine if an investigation is 

warranted: 

(1) Complaints. 

(2) Reports from plans or issuers, 

State insurance departments, State 

health departments, medical boards, the 

National Association of Insurance 

Commissioners, and any other Federal 

or State agencies. 

(3) Any other information that 

indicates potential noncompliance with 

PHS Act requirements or section 106(a) 

of the No Surprises Act. 

(b) Who may file a complaint. Any 

aggrieved entity or individual, or any 

entity or personal representative acting 

on that individual or entity’s behalf, 

may file a complaint with CMS if he or 

she believes that a right to which the 

aggrieved individual or entity is entitled 

under PHS Act requirements is being, or 

has been, denied or abridged as a result 

of any action or failure to act on the part 

of a provider or facility. 

(c) Random and targeted 

investigations. CMS may conduct 

random or targeted investigations to 

ensure that providers and facilities are 

in compliance with applicable PHS Act 

requirements and section 106(a) of the 

No Surprises Act. 

(d) Injunctive relief. Whenever CMS 

has reason to believe that any provider 

or facility has engaged, is engaging, or 

is about to engage in any activity which 

makes such provider or facility subject 

to a civil money penalty under this 

subpart, CMS may bring an action in an 

appropriate district court of the United 

States (or, if applicable, a United States 

court of any territory) to enjoin such 

activity, or to enjoin the provider or 

facility from concealing, removing, 

encumbering, or disposing of assets 

which may be required in order to pay 

a civil money penalty if any such 

penalty were to be imposed or to seek 

other appropriate relief. 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51777 

§ 150.505 Notice to providers or facilities. 

If CMS receives information under 

§ 150.503(a) that indicates a potential 

violation of the PHS Act or section 

106(a) of the No Surprises Act, or if 

CMS selects a provider or facility for 

investigation under § 150.503(c), CMS 

provides written notice to the provider 

or facility. The notice does the 

following: 

(a) Describes the information received 

under § 150.503(a) that gives rise to the 

potential violation, notifies the provider 

or facility that it was selected by CMS 

for investigation under § 150.503(c) and 

the PHS Act requirements that are the 

focus of the investigation, or describes 

the data that was required under section 

106(a) of the No Surprises Act and the 

implementing regulations in part 149 of 

this subchapter but not submitted by a 

provider of air ambulance services, as 

applicable. 

(b) Provides the date by which the 

provider or facility must respond and 

forward any documentation CMS 

identifies as relevant for purposes of an 

investigation, including overdue data 

regarding air ambulance services, and 

can provide additional information, 

including documentation of compliance 

as described in § 150.509 that, in the 

provider or facility’s view, will aid CMS 

in evaluating the entity’s compliance 

with the PHS Act or No Surprises Act 

requirements identified in the notice. 

(c) States that a civil money penalty 

may be assessed should the entity be 

found to be out of compliance with 

applicable PHS Act requirements or 

section 106(a) of the No Surprises Act. 

(d) States that CMS may require a 

plan of corrective action. 

§ 150.507 Request for extension. 

In circumstances in which a provider 

or facility cannot prepare a response to 

CMS or provide the requested 

information by the deadline provided in 

the notice under § 150.505, the provider 

or facility may make a written request 

for an extension from CMS detailing the 

reason for the extension request and 

showing good cause. Examples of what 

CMS would consider good cause 

include, but are not limited to, when a 

responsible entity indicates it has 

limited staffing resources to prepare a 

response, or when a responsible entity 

requests clarification from CMS 

regarding its request for information. If 

CMS grants the extension, the provider 

or facility must respond to the notice 

within the time frame specified in 

CMS’s letter granting the extension of 

time. Failure to respond within the 

initial deadline provided in the notice, 

or within the extended time frame, may 

result in CMS’s imposition of a civil 

money penalty based upon the 

complaint or other information alleging 

or indicating a violation of PHS Act 

requirements or section 106(a) of the No 

Surprises Act. 

§ 150.509 Responses to allegations of 

noncompliance. 

In determining whether to impose a 

civil money penalty, CMS reviews and 

considers documentation provided in 

any complaint or other information, as 

well as any additional information 

provided by the provider or facility to 

demonstrate that it has complied with 

relevant requirements. The following 

are examples of documentation that a 

provider or facility may submit for 

CMS’s consideration in determining 

whether a civil money penalty should 

be assessed and the amount of any civil 

money penalty: 

(a) Any documentation indicating a 

provider or facility complied with the 

requirements in part 149 of this 

subchapter, including but not limited to 

claims, medical bills, notice and 

consent forms, disclosures, data related 

to air ambulance services, or any other 

documents if those documents form the 

basis of a complaint or allegation of 

noncompliance, or the basis for the 

provider or facility to refute the 

complaint or allegation. 

(b) Any other evidence that refutes an 

allegation of noncompliance. 

(c) Evidence that the provider or 

facility did not know, and exercising 

due diligence could not have known, of 

the violation, and, if applicable, that the 

provider or facility undertook a 

corrective action, such as withdrawing 

the bill that was in violation and 

reimbursing the health plan or 

participant, beneficiary, or enrollee for 

any payment received in response to the 

bill that was withdrawn. 

(d) Evidence documenting the 

development and implementation of 

internal policies and procedures by a 

provider or facility to ensure 

compliance with PHS Act requirements 

and section 106(a) of the No Surprises 

Act, as applicable. Those policies and 

procedures may include or consist of a 

voluntary compliance program. Any 

such program must do the following: 

(1) Effectively articulate and 

demonstrate the fundamental mission of 

compliance and the provider or 

facility’s commitment to the compliance 

process. 

(2) Include the name of an individual 

responsible for compliance. 

(3) Describe an effective monitoring 

process designed to identify practices 

that do not comply with PHS Act 

requirements and section 106(a) of the 

No Surprises Act, as applicable, and to 

provide reasonable assurances that 

noncompliant practices are detected in 

a timely manner. 

(4) Address procedures to improve 

internal policies when noncompliant 

practices are identified. 

(e) Evidence documenting the 

provider’s or facility’s record of 

previous compliance with PHS Act 

requirements and section 106(a) of the 

No Surprises Act, as applicable. 

(f) Evidence documenting a provider 

of air ambulance services’ good faith 

efforts to submit missing information 

that such providers are required to 

submit pursuant to § 149.460 of this 

chapter. This must include the 

submission and implementation of a 

corrective action plan that does the 

following: 

(1) Identifies the cause underlying the 

submission of incomplete data and 

effectively articulates and demonstrates 

the measures that will be taken to 

submit complete data; 

(2) Provides the timeline for 

submitting complete data; 

(3) Provides the name of the 

individual in the organization 

responsible for overseeing the corrective 

actions and submitting complete data; 

and 

(4) Addresses procedures to improve 

internal policies to ensure that 

incomplete data reports are identified 

and completed prior to submission for 

future reporting periods. 

§ 150.511 Liability for penalties. 

(a) No action under this part will be 

entertained unless commenced within 6 

years from the date when the claim was 

presented, the request for payment was 

made, or the violation occurred. 

(b) Under this part, a principal is 

liable for penalties for the actions of his 

or her agent acting within the scope of 

his or her agency. This paragraph (b) 

does not limit the underlying liability of 

the agent. 

§ 150.513 Amount of penalty. 

(a) Maximum amount. (1) If a 

provider or facility is found to be in 

violation of a PHS Act requirement, 

CMS may impose a civil money penalty 

in an amount not to exceed $10,000 per 

violation, adjusted annually under 45 

CFR part 102. Penalties imposed under 

this part are in addition to any other 

penalties prescribed or allowed by law. 

(2) If a provider of air ambulance 

services is found to be in violation of 

section 106(a) of the No Surprises Act, 

CMS may impose a civil money penalty 

in an amount not to exceed $10,000 per 

year of violation, adjusted annually 

under 45 CFR part 102. Penalties 

imposed under this part are in addition 

51778 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 

to any other penalties prescribed or 

allowed by law. 

(b) Factors. Except as otherwise 

provided in this part, in determining the 

amount of any penalty in accordance 

with this part, CMS will consider the 

following factors— 

(1) The nature of violations and 

circumstances under which they were 

presented. 

(2) The degree of culpability of the 

provider or facility against which a civil 

money penalty is proposed. 

(3) The provider or facility’s history of 

prior violations, including whether at 

any time before determination of the 

current violation or violations, CMS or 

any State found the provider or facility 

liable for civil or administrative 

sanctions in connection with a violation 

of PHS Act requirements or section 

106(a) of the No Surprises Act, as 

applicable. 

(4) The frequency of the violation, 

taking into consideration whether any 

violation is an isolated occurrence, 

represents a pattern, or is widespread. 

(5) The level of financial and other 

impacts on affected individuals. 

(6) Such other matters as justice may 

require. 

(c) Mitigating circumstances. For 

every violation subject to a civil money 

penalty, if there are substantial or 

several mitigating circumstances, the 

aggregate amount of the penalty is set at 

an amount sufficiently below the 

maximum permitted in paragraph (a) of 

this section to reflect that fact. As 

guidelines for taking into account the 

factors listed in paragraph (b) of this 

section, CMS considers the following as 

mitigating circumstances: 

(1) Before receipt of the notice issued 

under § 150.505, the provider or facility 

implemented and followed a 

compliance plan as described in 

§ 150.509. 

(2) There were no previous 

complaints of noncompliance against 

the provider or facility. 

(3) In the case of a provider or facility 

responsible for an erroneous bill, the 

provider or facility made adjustments to 

business practices to come into 

compliance with PHS Act requirements, 

so that the following occur: 

(i) The provider or facility identified 

all participants, beneficiaries and 

enrollees who are or were wrongly 

billed. 

(ii) The provider or facility withdrew 

the bill or reimbursed the affected 

individuals who were wrongly billed so 

that, to the extent practicable, the 

affected individuals are in the same 

position that they would have been in 

had the violation not occurred. 

(iii) The provider or facility 

completed the adjustments to business 

practices in a timely manner. 

(4) The provider or facility 

demonstrated that the violation is an 

isolated occurrence. 

(d) Aggravating circumstances. For 

every violation subject to a civil money 

penalty, if there are substantial or 

several aggravating circumstances, CMS 

sets the aggregate amount of the penalty 

at an amount sufficiently close to or at 

the maximum permitted by this section 

to reflect that fact. CMS considers the 

following circumstances to be 

aggravating circumstances: 

(1) The frequency of violation 

indicates a pattern of widespread 

occurrence. 

(2) The violation(s) resulted in 

significant financial and other impacts 

on the average affected individual. 

(3) The provider or facility does not 

provide documentation showing that 

substantially all of the violations were 

corrected. 

(e) Waiver of the penalty. CMS shall 

waive a civil money penalty if: 

(1) The provider or facility does not 

knowingly violate, and exercising due 

diligence should not have reasonably 

known it violated, part 149 of this 

subchapter with respect to a participant, 

beneficiary, or enrollee, and such 

provider or facility withdraws the bill 

that was in violation of such provision 

and reimburses the group health plan, 

health insurance issuer, or affected 

individual, as applicable, in an amount 

equal to the difference between the 

amount billed and the amount allowed 

to be billed, plus interest at the rate 

established annually by the Secretary of 

the Treasury pursuant to 31 U.S.C. 3717, 

within 30 days of the violation; or 

(2) In the case of a provider of air 

ambulance services that submits only 

part of the information required in 

§ 149.460 of this subchapter, if the 

provider demonstrates a good faith 

effort in working with the Secretary to 

submit any missing information. 

(f) Settlement authority. Nothing in 

this section limits the authority of CMS 

to settle any issue or case described in 

the notice furnished in accordance with 

§ 150.505 or to compromise on any 

penalty provided for in § 150.515. 

(g) Hardship exemption. The 

Secretary may establish a hardship 

exemption to the penalties under this 

subpart. 

§ 150.515 Notice of proposed 

determination. 

(a) If CMS proposes a penalty, in 

accordance with this subpart, CMS will 

serve on the provider or facility, in any 

manner authorized by Rule 4 of the 

Federal Rules of Civil Procedure, 

written notice of CMS’s intent to impose 

a penalty. The notice will include: 

(1) A description of the PHS Act 

requirements or the No Surprises Act 

requirements that CMS has determined 

the provider or facility violated. 

(2) A description of any complaint or 

other information upon which CMS 

based its investigation, including the 

basis for determining the number of 

violations. 

(3) The amount of the proposed 

penalty as of the date of the notice. 

(4) Any circumstances described in 

§ 150.513 that were considered when 

determining the amount of the proposed 

penalty. 

(5) Instructions for responding to the 

notice, including: 

(i) A specific statement of the 

provider or facility’s right to a hearing; 

and 

(ii) A statement that failure to request 

a hearing within 30 days of receipt of 

the notice permits the imposition of the 

proposed penalty without right of 

appeal in accordance with § 150.519. 

(b) [Reserved] 

§ 150.517 Hearing. 

(a) The provisions found in 

§§ 150.401 through 150.457 shall apply 

to a hearing conducted under this 

subpart. 

(b) Any provider or facility upon 

which CMS has proposed the 

imposition of a penalty may appeal such 

proposed penalty by requesting a 

hearing before an ALJ in accordance 

with § 150.405. The form and content of 

the request for a hearing must comply 

with § 150.407. 

(c) If the provider or facility fails, 

within the time period permitted, to 

exercise the right to a hearing under this 

section, the proposed penalty becomes 

final. 

§ 150.519 Failure to request a hearing. 

If the provider or facility does not 

request a hearing within 30 days of the 

issuance of the notice described in 

§ 150.515, or show good cause, as 

determined under § 150.405(b), for 

failing to timely exercise its right to a 

hearing, CMS may assess the proposed 

civil money penalty. CMS will notify 

the provider or facility in any manner 

authorized by Rule 4 of the Federal 

Rules of Civil Procedure of any penalty 

that has been assessed and of the means 

by which the provider or facility may 

satisfy the judgment. The provider or 

facility has no right to appeal a penalty 

with respect to which it has not 

requested a hearing in accordance with 

§ 150.405. 

Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules 51779 

§ 150.521 Collateral estoppel. 

(a) Where a final decision pertaining 

to the provider or facility’s liability for 

acts that violate this part has been 

rendered in any proceeding in which 

the provider or facility was a party and 

had an opportunity to be heard, the 

provider or facility shall be bound by 

such decision in any proceeding under 

this part. 

(b) In a proceeding under this part, a 

provider or facility is estopped from 

denying the essential elements of a 

criminal offense if the proceeding: 

(1) Is against a provider or facility 

which has been convicted (whether 

upon a verdict after trial or upon a plea 

of guilty or nolo contendere) of a 

Federal crime charging fraud or false 

statements; and 

(2) Involves the same transactions as 

in the criminal action. 

§ 150.523 Judicial review. 

(a) Any provider or facility against 

which a final decision imposing a civil 

money penalty is entered by the ALJ 

pursuant to this subpart may obtain 

review in the United States Court of 

Appeals for the circuit in which the 

person resides, or where the violation 

occurred, by filing in such court (within 

60 days following the date on which 

such decision becomes final) a written 

petition requesting the decision be 

modified or set aside. Such review will 

be conducted pursuant to section 

1128A(e) of the Social Security Act. 

(b) A provider or facility must exhaust 

all administrative appeal procedures 

established under this part before the 

provider or facility may bring an action 

in Federal court, as provided in section 

1128A(e) of the Social Security Act, 

concerning any penalty imposed 

pursuant to this part. 

(c) Administrative remedies are 

exhausted on the date an ALJ’s initial 

decision becomes final under § 150.453, 

or the date of the Administrator’s 

decision affirming, reversing, 

modifying, or remanding the ALJ’s 

initial decision under § 150.457, as 

applicable. 

(d) After the clerk of the court 

transmits a copy of the petition 

specified in paragraph (a) of this section 

to the Secretary, the Secretary will file 

in the Court the record in the 

proceeding as provided in section 2112 

of Title 28, United States Code. 

§ 150.525 Notice to other agencies. 

Whenever a penalty becomes final, 

the Secretary will notify the following 

organizations and entities about such 

action and the reasons for it: The 

appropriate State or local medical or 

professional association, the State 

Department of Health, the appropriate 

State or local licensing agency or 

organization, and the appropriate 

utilization and quality control peer 

review organization. The Secretary may 

additionally notify the following 

entities, as appropriate: The State 

Department of Insurance or similar 

agency, the State Attorney General, the 

Secretary of Labor, the Secretary of the 

Treasury, or the Director of the U.S. 

Office of Personnel Management. 

[FR Doc. 2021–19797 Filed 9–10–21; 5:00 pm] 

BILLING CODE 6523–63–P; 4120–01–P; 4830–01–P; 

4510–29–P