[Federal Register Volume 86, Number 177 (Thursday, September 16, 2021)]
[Proposed Rules]
[Pages 51730-51779]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-19797]



[[Page 51729]]

Vol. 86

Thursday,

No. 177

September 16, 2021

Part II





Office of Personnel Management





Department of the Treasury





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Internal Revenue Service





Department of Labor





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Employee Benefits Security Administration





Department of Health and Human Services





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5 CFR Part 890

26 CFR Part 54

29 CFR Part 2590

45 CFR Parts 144, 148, 149, et al.





Requirements Related to Air Ambulance Services, Agent and Broker 
Disclosures, and Provider Enforcement; Proposed Rule

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

[[Page 51730]]


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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.

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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,

[[Page 51731]]

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.
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    \1\ Public Law 115-254.
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    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).
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    \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.
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    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

[[Page 51732]]

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.
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    \3\ Also 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.
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    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.
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    \4\ Requirements Related to Surprise Billing; Part I, 86 FR 
36872, (July 13, 2021). Public comments on this rule are due by 
September 7, 2021.
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    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.

[[Page 51733]]

    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\
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    \5\ Section 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.
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    Air ambulance services frequently result in surprise medical bills 
due to individuals' inabilities to select an in-network 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 out-of-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\
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    \6\ Air Ambulance: Available Data Show Privately-Insured 
Patients Are at Financial Risk. GAO-19-292 (March 2019).
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    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.
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    \7\ Cooper 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.
    \8\ See, 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/.
    \9\ Air Ambulance: Available Data Show Privately-Insured 
Patients Are at Financial Risk. GAO-19-292 (March, 2019).
    \10\ Air Ambulance: Data Collection and Transparency Needed to 
Enhance DOT Oversight. GAO-17-637 (July 27, 2017).
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    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

[[Page 51734]]

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.
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    \11\ 49 U.S.C. 41713(b).
    \12\ A 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 
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).
    \13\ See, 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).
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    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\
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    \15\ See Air Ambulance: Data Collection and Transparency Needed 
to Enhance DOT Oversight. GAO-17-637 (July 27, 2017).
    \16\ Air 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.
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    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.
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    \17\ OPM 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.
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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

[[Page 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 non-emergent 
basis; whether the provider of such services is part of a hospital-
owned or sponsored program, municipality-sponsored 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 
claims-level 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

[[Page 51736]]

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\
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    \18\ HHS'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.
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    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 
inter-facility 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 self-insured 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.<SUP>19 20</SUP> 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.
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    \19\ See section 9831 of the Code, section 732 of ERISA, and 
section 2722 of the PHS Act.
    \20\ The 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.
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    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

[[Page 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 
non-emergency 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 
hospital-sponsored 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

[[Page 51738]]

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 transport-level 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, inter-facility 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.
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    \21\ HHS 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/ambulancefeeschedule.
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    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

[[Page 51739]]

emergency basis); revenue from sub-contracted ambulance services; fees 
for standby events; payments from non-direct 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 
time-limited 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 anti-competitive 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, inter-facility 
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-for-service (FFS), Medicare Advantage, Medicaid, Veterans' 
Health Administration, TRICARE, Indian Health Service, group health 
plan, health insurance issuer, FEHB plan, Workers' Compensation, 
patient cost-sharing, 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 transport-level 
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.

[[Page 51740]]

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.
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    \22\ The 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.
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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\
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    \23\ See 45 CFR 147.126. Also see 45 CFR 146.123.
---------------------------------------------------------------------------

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 
short-term, 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

[[Page 51741]]

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

    \24\ For 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.
---------------------------------------------------------------------------

    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

[[Page 51742]]

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.
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    \25\ See, 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-and-Guidance/Downloads/Language-accessguidance.pdf and ``Appendix A--Top 15 Non-English Languages by 
State'' https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Appendix-A-Top-15-non-englishby-state-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.
    \27\ See 42 U.S.C. 18116, 42 U.S.C. 2000d et seq., 269 U.S.C. 
794, 42 U.S.C. 12101 et seq.
---------------------------------------------------------------------------

    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 time-consuming 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

[[Page 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 short-term, 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 decision-making 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 non-calendar 
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

[[Page 51744]]

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 pre-existing 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

[[Page 51745]]

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

    \28\ See section 2723(b) of the PHS Act. Also see 45 CFR 150.301 
through 150.347.
---------------------------------------------------------------------------

    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 non-
compliance 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

[[Page 51746]]

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

    \29\ See, for example, Center for Connected Health Policy. 
Cross-State Licensing. Available at: https://www.cchpca.org/topic/cross-state-licensing-professional-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-licensure-requirements-for-telehealth-in-response-to-covid-19.pdf.
---------------------------------------------------------------------------

    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

[[Page 51747]]

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 non-Federal governmental plans, 
consumers can email <a href="/cdn-cgi/l/email-protection#ce9e8687898eada3bde0a6a6bde0a9a1b8"><span class="__cf_email__" data-cfemail="06564e4f4146656b75286e6e7528616970">[email protected]</span></a>. 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 <a href="/cdn-cgi/l/email-protection#175a76657c72635478797362746357747a64397f7f6439707861"><span class="__cf_email__" data-cfemail="4e032f3c252b3a0d21202a3b2d3a0e2d233d6026263d60292138">[email protected]</span></a>. 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/Health-Insurance-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

[[Page 51748]]

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.
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    \30\ 86 FR 36899 and 36979 (July 13, 2021).
    \31\ Pursuant 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.
---------------------------------------------------------------------------

    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 non-Federal 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 non-Federal 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).
---------------------------------------------------------------------------

    \32\ HHS 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.
---------------------------------------------------------------------------

    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

[[Page 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

[[Page 51750]]

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 non-
Federal 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.

[[Page 51751]]

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.
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    \33\ The 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.
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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

[[Page 51752]]

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.

[[Page 51753]]

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

    \34\ See 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.''
---------------------------------------------------------------------------

    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

[[Page 51754]]

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 non-Federal 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.

[[Page 51755]]

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

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

    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 de-
identify 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:
    <bullet> The need for the information collection and its usefulness 
in carrying out the proper functions of the agencies.
    <bullet> The accuracy of the Departments' estimate of the 
information collection burden.
    <bullet> The quality, utility, and clarity of the information to be 
collected.
    <bullet> Recommendations to minimize the information collection 
burden on the

[[Page 51756]]

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

    \36\ See 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.
---------------------------------------------------------------------------

    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
----------------------------------------------------------------------------------------------------------------
                                                                                 Fringe benefits     Adjusted
               Occupation title                  Occupational     Mean hourly   and overhead  ($/   hourly wage
                                                     code        wage  ($/hr.)        hr.)            ($/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,             43-6014           19.43             19.43           38.86
 Except Legal, Medical, and Executive.........
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.
---------------------------------------------------------------------------

    \37\ Based 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.
    \38\ National Association of Insurance Commissioners, 2019 
Accident and Health Policy Experience Report. https://content.naic.org/sites/default/files/publication-ahp-lr-accident-health-report.pdf.
    \39\ Based on information found in the National Insurance 
Producer Registry's Producer Database (PDB).
---------------------------------------------------------------------------

    HHS estimates the cost associated with this disclosure requirement, 
when provided in situations related to in-person 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

[[Page 51757]]

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 Federally-facilitated 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
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Estimated       Estimated       Estimated       Estimated
                       Respondent                            number of       number of        burden        labor costs      Estimated       Estimated
                                                            respondents      responses        (hours)           ($)       printing costs  total cost ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
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, limited-duration 
insurance are assisted by agents or brokers.
---------------------------------------------------------------------------

    \40\ Agents 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-Other-Resources/Downloads/Agents-and-Brokers-in-the-Marketplace.pdf.
---------------------------------------------------------------------------

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

    \41\ According 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-american-households-used-internet-health-related-activities-2019-ntia-data-show.
---------------------------------------------------------------------------

    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

[[Page 51758]]

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 
short-term, 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
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Estimated       Estimated
                    Type of coverage                         number of       number of     Total burden      Estimated       Estimated       Estimated
                                                            respondents      responses        (hours)       labor cost     printing cost    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
----------------------------------------------------------------------------------------------------------------
                                                                        Total  estimated
 Estimated  number of   Estimated  number of   Burden per  response      annual burden        Total  estimated
     respondents             responses               (hours)                (hours)              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 self-insured plans and the associated costs would likely be passed 
on to those plans. The Departments and OPM acknowledge that some large 
self-insured 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 self-insured 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

[[Page 51759]]

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 one-time 
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
----------------------------------------------------------------------------------------------------------------
                                                                                       Total
                                     Estimated       Estimated      Burden per       estimated         Total
              Year                   number of       number of       response      annual burden     estimated
                                    respondents      responses        (hours)         (hours)     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 one-time 
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

[[Page 51760]]

meet the proposed reporting requirements, HHS estimates a total one-
time burden of 30,000 hours, with an equivalent cost of $3,074,760.
---------------------------------------------------------------------------

    \42\ Fact 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.
---------------------------------------------------------------------------

    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
----------------------------------------------------------------------------------------------------------------
                                     Estimated                      Burden per
              Year                   number of       Number of       response      Total annual     Total cost
                                    respondents      responses        (hours)     burden (hours)
----------------------------------------------------------------------------------------------------------------
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 non-compliance 
against issuers and non-Federal 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

[[Page 51761]]



                                            Table 7--Proposed Annual Recordkeeping and Reporting Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                            Total        Hourly                   Printing
                                  OMB control                               Burden  per     annual    labor  cost  Total labor      and
       Regulation section             No.        Respondents    Responses     response      burden         of        cost of     materials    Total cost
                                                                              (hours)      (hours)     reporting    reporting       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      0938-NEW          55,541       55,541          0.5       27,771        66.44    1,845,072            0    1,845,072
 and Brokers....................
45 CFR 148.410(c)(2)(ii),            0938-NEW           1,324    4,440,971         0.06      244,253            2    9,491,687      856,268   10,347,956
 148.410(c)(3)..................
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,

[[Page 51762]]

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 short-term, 
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

[[Page 51763]]

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:
    <bullet> Increased transparency related to agent and broker compensation arrangements and structures, giving
     consumers more information as they make choices regarding health care coverage.............................
    <bullet> 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.
    <bullet> Improved compliance with laws prohibiting surprise medical bills due to enforcement actions........
----------------------------------------------------------------------------------------------------------------
Costs:                                                  Estimate     Year dollar   Discount rate          Period
                                                       (million)                             (%)         covered
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($/year)...................          $31.82            2021               7       2021-2025
                                                           32.35            2021               3       2021-2025
----------------------------------------------------------------------------------------------------------------
Quantitative:
    <bullet> 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...................................................................
    <bullet> 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......
    <bullet> 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.........................................................................
    <bullet> Costs to plans, issuers, FEHB Carriers, and TPAs to submit proposed air ambulance related
     information to HHS, estimated to be one-time costs of approximately $3.6 million in 2022 and annual costs
     of approximately $829,241 in 2023 and 2024.................................................................
    <bullet> 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.......................................................................................................
    <bullet> 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.....................
    <bullet> 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:
    <bullet> 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 short-term, 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

[[Page 51764]]

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.
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    \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).
    \44\ See 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).
    \46\ See Health Care Sabotage Online: A Warning to Consumers, 
October 2019 (https://www.casey.senate.gov/imo/media/doc/Senator%20Casey%20-%20Health%20Care%20Sabotage%20Online%20FINAL.pdf).
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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-of-network.\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-of-network and in 2017, 69 percent were out-of-network. The 
GAO also reported that the median price charged by providers of air 
ambulance services had increased from a rate of $22,100 for rotary-wing 
and $24,900 for fixed-wing in 2012 to approximately $36,400 for rotary-
wing and $40,600 for a fixed-wing transport in 2017. The 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\
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    \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.
    \49\ Consumer Union. Up in the Air: Inadequate Regulation for 
Emergency Air Ambulance Transportation. Health Policy Report, March 
2017.
---------------------------------------------------------------------------

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

    \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.
    \51\ Missouri 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.
---------------------------------------------------------------------------

    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 in-network 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 fully-insured 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 
fully-insured plans.
---------------------------------------------------------------------------

    \52\ Brown, 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).
---------------------------------------------------------------------------

    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

[[Page 51765]]

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

    \53\ See Kona, Maanasa ``State Balance-Billing Protections.'' 
The Commonwealth Fund, 5 February 2021, https://www.commonwealthfund.org/publications/maps-and-interactives/2021/feb/state-balance-billing-protections.
    \54\ See https://surprisemedicalbills.chir.georgetown.edu/policy-options/enforcement/.
---------------------------------------------------------------------------

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 short-term, 
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 short-term, 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.
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    \55\ Curran, E. U.S. House Investigation Offers New Evidence on 
the Dangers of Short-Term Plans. CHIRblog, July 9, 2020, http://chirblog.org/u-s-house-investigation-offers-new-evidence-dangers-short-term-plans/.
    \56\ See, for example, Excepted Benefits; Lifetime and Annual 
Limited; and Short-Term Limited-Duration 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).
    \57\ See 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-finds-millions-of-americans-enrolled-in-junk-health.
---------------------------------------------------------------------------

    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

[[Page 51766]]

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

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

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

    \59\ See 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.
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    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.

[[Page 51767]]

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

    \60\ https://www.sba.gov/document/support--table-size-standards.
    \61\ Available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.html.
---------------------------------------------------------------------------

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

    \62\ Adler, L., Hannick, K., and Lee, S. High Air Ambulance 
Charges Concentrated in Private Equity-Owned Carriers. USC-Brookings 
Schaffer Initiative for Health Policy. October 13, 2020.
---------------------------------------------------------------------------

    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

[[Page 51768]]

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

    \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.''
---------------------------------------------------------------------------

    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

0
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

[[Page 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

0
2. Section 890.114 is amended by adding reserved paragraph (d) and 
paragraph (e) to read as follows:


Sec.  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

0
Paragraph 3. The authority citation for part 54 continues to read, in 
part, as follows:

    Authority: 26 U.S.C. 7805, unless otherwise noted.
* * * * *
0
Par. 4. Section 54.9823-1 is added to read as follows:


Sec.  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

0
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).

0
6. Section 2590.723 is added to read as follows:


Sec.  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

0
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.

0
8. Section 144.101 is amended by revising paragraphs (e) introductory 
text and (e)(1) and (2) to read as follows:


Sec.  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 Sec.  144.103, and providers and 
facilities, each as defined in Sec.  150.103 of this subchapter, in 
States described in paragraph (e)(1) of this section.
* * * * *

PART 148--REQUIREMENTS FOR THE INDIVIDUAL HEALTH INSURANCE MARKET

0
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.

0
10. Section 148.101 is revised to read as follows:


Sec.  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.
0
11. Section 148.102 is amended by adding paragraph (a)(3) and revising 
paragraph (b) to read as follows:


Sec.  148.102  Scope and applicability date.

    (a) * * *

[[Page 51770]]

    (3) The requirements in Sec.  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 Sec.  144.103 of 
this subchapter.
    (b) Applicability date. Except as provided in Sec.  148.124 
(certificate of creditable coverage), Sec.  148.170 (standards relating 
to benefits for mothers and newborns), Sec.  148.180 (prohibition of 
health discrimination based on genetic information), and Sec.  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, limited-duration insurance'' in Sec.  
144.103 of this subchapter is applicable October 2, 2018.
0
12. Add subpart F to read as follows:

Subpart F--Requirements Related to Reporting and Disclosure


Sec.  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 Sec.  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 non-monetary 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 Sec.  147.106(f) of this subchapter or Sec.  
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 short-term, 
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, limited-

[[Page 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

0
13. The authority citation for part 149 continues to read as follows:

    Authority:  42 U.S.C. 300gg-111 through 300gg-139, as amended.

0
14. Section 149.10 is amended by revising paragraph (a) to read as 
follows:


Sec.  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).
* * * * *
0
15. Section 149.20 is amended by revising paragraph (a)(1) to read as 
follows:


Sec.  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 Sec.  147.140 of this subchapter), except as 
specified in paragraph (b) of this section.
* * * * *
0
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:


Sec.  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.
* * * * *
0
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.


Sec. Sec.  149.210-149.220   [Reserved]


Sec.  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.

[[Page 51772]]

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.
0
18. Section 149.460 is added to read as follows:


Sec.  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 sub-contracted ambulance services; fees for standby 
events; payments from non-direct 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 time-limited funding 
from a government

[[Page 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 cost-sharing, 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

0
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.

0
20. The heading for part 150 is revised to read as set forth above.
0
21. Section 150.101 is amended by revising paragraphs (a) and (b)(2) 
and adding paragraph (b)(3) to read as follows:


Sec.  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.
0
22. Section 150.103 is amended by--
0
a. Revising the introductory text;
0
b. Adding the definition of ``Facility'' in alphabetical order;
0
c. In the definition of ``Individual health insurance policy or 
individual policy,'' revising the introductory text and paragraph (2);
0
d. Revising the definition of ``PHS Act requirements;'' and
0
e. Adding the definitions ``Provider'' in alphabetical order.
    The revisions and additions read as follows:


Sec.  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 Sec.  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 Sec.  
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 Sec.  149.30 of this subchapter, and a provider of air ambulance 
services as defined in Sec.  149.30 of this subchapter.
* * * * *
0
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

0
24. Section 150.201 is revised to read as follows:


Sec.  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.
0
25. Section 150.203 is amended by revising the introductory text to 
read as follows:


Sec.  150.203   Circumstances requiring CMS enforcement.

    CMS enforces PHS Act requirements to the extent warranted (as 
determined

[[Page 51774]]

by CMS) in any of the following circumstances:
* * * * *
0
26. Section 150.205 is amended by revising paragraphs (d) and (e)(2) to 
read as follows:


Sec.  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 Sec.  146.143 (relating to group 
market provisions) and Sec.  148.210 (relating to individual market 
requirements) on the basis that they prevent the application of a PHS 
Act requirement.
* * * * *
0
27. Section 150.211 is amended by revising paragraph (b) and adding 
paragraph (d) to read as follows:


Sec.  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.
0
28. Section 150.221 is amended by revising paragraphs (a)(2) and (b) to 
read as follows:


Sec.  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.
0
29. Section 150.303 is amended by revising the section heading and 
paragraphs (a) introductory text, (a)(2), and (c) to read as follows:


Sec.  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 non-Federal 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 non-Federal governmental plans, are in compliance with applicable 
PHS Act requirements.
0
30. Section 150.307 is amended by revising the introductory text and 
paragraphs (a) and (b) and adding paragraph (d) to read as follows:


Sec.  150.307  Notice to responsible entities.

    If information received under Sec.  150.303(a) indicates a 
potential violation, or if CMS selects an issuer or non-Federal 
governmental plan for investigation under Sec.  150.303(c), CMS 
provides written notice to the responsible entity or entities 
identified under Sec.  150.305. The notice does the following:
    (a) Describes the information received under Sec.  150.303(a) that 
gave rise to the investigation, or notifies the responsible entity that 
it was selected by CMS for investigation under Sec.  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 Sec.  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.
0
31. Section 150.309 is revised to read as follows:


Sec.  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 Sec.  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.
0
32. Section 150.311 is amended by revising paragraph (e) to read as 
follows:


Sec.  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 Sec.  150.307 or 
Sec.  150.313(e).
* * * * *
0
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:


Sec.  150.313   Market conduct examinations.

* * * * *
    (b) General. If, based on the information described in Sec.  
150.303(a), CMS finds evidence that a responsible entity may be in 
violation of a PHS Act

[[Page 51775]]

requirement, or if CMS randomly selects an issuer or non-Federal 
governmental plan for examination under Sec.  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 Sec.  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 Sec.  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 Sec.  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 
Sec.  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.
0
34. Section 150.319 is amended by revising paragraph (a)(1) to read as 
follows:


Sec.  150.319  Determining the amount of the penalty--mitigating 
circumstances.

* * * * *
    (a) * * *
    (1) Before receipt of the notice issued under Sec.  150.307 or 
Sec.  150.313(e), implemented and followed a compliance plan as 
described in Sec.  150.311(f).
* * * * *
0
35. Section 150.321 is amended by adding paragraph (d) to read as 
follows:


Sec.  150.321   Determining the amount of penalty--aggravating 
circumstances.

* * * * *

[[Page 51776]]

    (d) The entity fails to cooperate with a CMS investigation or 
market conduct examination.
0
36. Section 150.325 is revised to read as follows:


Sec.  150.325  Settlement authority.

    Nothing in Sec. Sec.  150.315 through 150.323 limits the authority 
of CMS to settle any issue or case described in the notice furnished in 
accordance with Sec.  150.307 or Sec.  150.313(e), or to compromise on 
any penalty provided for in Sec. Sec.  150.315 through 150.323.
0
37. Section Sec.  150.401 is amended by revising the definition of 
``Respondent'' to read as follows:


Sec.  150.401   Definitions.

* * * * *
    Respondent means an entity that received a notice of proposed 
assessment of a civil money penalty issued pursuant to Sec.  150.343 or 
Sec.  150.515.
0
38. Section 150.405 is amended by revising paragraph (a) to read as 
follows:


Sec.  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 Sec.  150.407(a), within 30 
days after the date of issuance of either CMS's notice of proposed 
determination under Sec.  150.343 or Sec.  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.
* * * * *
0
39. Section 150.417 is amended by revising paragraph (b)(1) to read as 
follows:


Sec.  150.417  Issues to be heard and decided by ALJ.

* * * * *
    (b) * * *
    (1) Applies the factors that are identified in Sec.  150.317 or 
Sec.  150.513.
* * * * *
0
40. Section 150.445 is amended by revising paragraphs (g), (h), and (j) 
to read as follows:


Sec.  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 Sec.  150.317, Sec.  150.323, or Sec.  
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 Sec.  150.307, Sec.  
150.313(e), Sec.  150.343, Sec.  150.505, or Sec.  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 Sec.  150.307, Sec.  150.313(e), or Sec.  150.505.
0
41. Section 150.455 is amended by adding paragraph (b)(9) to read as 
follows:


Sec.  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.
0
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


Sec.  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 Sec.  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.


Sec.  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.

[[Page 51777]]

Sec.  150.505  Notice to providers or facilities.

    If CMS receives information under Sec.  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 Sec.  150.503(c), CMS provides written notice to 
the provider or facility. The notice does the following:
    (a) Describes the information received under Sec.  150.503(a) that 
gives rise to the potential violation, notifies the provider or 
facility that it was selected by CMS for investigation under Sec.  
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 Sec.  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.


Sec.  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 Sec.  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.


Sec.  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 Sec.  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.


Sec.  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.


Sec.  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

[[Page 51778]]

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 Sec.  150.505, the 
provider or facility implemented and followed a compliance plan as 
described in Sec.  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 Sec.  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 Sec.  150.505 or to compromise on any 
penalty provided for in Sec.  150.515.
    (g) Hardship exemption. The Secretary may establish a hardship 
exemption to the penalties under this subpart.


Sec.  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 Sec.  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 Sec.  150.519.
    (b) [Reserved]


Sec.  150.517  Hearing.

    (a) The provisions found in Sec. Sec.  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 Sec.  150.405. The form and 
content of the request for a hearing must comply with Sec.  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.


Sec.  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 Sec.  150.515, or show 
good cause, as determined under Sec.  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 Sec.  150.405.

[[Page 51779]]

Sec.  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.


Sec.  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 Sec.  150.453, or the date of the 
Administrator's decision affirming, reversing, modifying, or remanding 
the ALJ's initial decision under Sec.  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.


Sec.  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


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