Patient Protection and Affordable Care Act Patient Protection Notice

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

OFFICE OF PERSONNEL
MANAGEMENT
5 CFR Part 890
RIN 3206–AO30

DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 54
[TD9951]
RIN 1545–BQ04

DEPARTMENT OF LABOR
Employee Benefits Security
Administration
29 CFR Part 2590
RIN 1210–AB99

DEPARTMENT OF HEALTH AND
HUMAN SERVICES
45 CFR Parts 144, 147, 149, and 156
[CMS–9909–IFC]
RIN 0938–AU63

Requirements Related to Surprise
Billing; Part I
Office of Personnel
Management; Internal Revenue Service,
Department of the Treasury; Employee
Benefits Security Administration,
Department of Labor; Centers for
Medicare & Medicaid Services,
Department of Health and Human
Services.
ACTION: Interim final rules with request
for comments.
AGENCY:

This document sets forth
interim final rules implementing certain
provisions of the No Surprises Act,
which was enacted as part of the
Consolidated Appropriations Act, 2021.
These interim final rules amend and
add provisions to existing rules under
the Internal Revenue Code, the
Employee Retirement Income Security
Act, the Public Health Service Act, and
the Federal Employees Health Benefits
Act. These interim final rules
implement provisions of the No
Surprises Act that protect participants,
beneficiaries, and enrollees in group
health plans and group and individual
health insurance coverage from surprise
medical bills when they receive
emergency services, non-emergency
services from nonparticipating
providers at participating facilities, and
air ambulance services from
nonparticipating providers of air

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SUMMARY:

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ambulance services, under certain
circumstances. In this rulemaking, the
Department of Health and Human
Services (HHS), the Department of Labor
(DOL), and the Department of the
Treasury (collectively, the Departments)
are issuing interim final rules with
largely parallel provisions that apply to
group health plans and health insurance
issuers offering group or individual
health insurance coverage. HHS is also
issuing in this rulemaking additional
interim final rules that apply to
emergency departments of hospitals and
independent freestanding emergency
departments, health care providers and
facilities, and providers of air
ambulance services related to the
protections against surprise billing. The
Office of Personnel Management (OPM)
is issuing in this rulemaking interim
final rules that specify how certain
provisions of the No Surprises Act
apply to health benefits plans offered by
carriers under the Federal Employees
Health Benefits Act (FEHBA).
DATES: Effective date: These regulations
are effective on September 13, 2021.
Applicability date: The regulations are
generally applicable for plan years (in
the individual market, policy years)
beginning on or after January 1, 2022.
The HHS-only regulations that apply to
health care providers, facilities, and
providers of air ambulance services are
applicable beginning on January 1,
2022. The OPM-only regulations that
apply to health benefits plans are
applicable to contract years beginning
on or after January 1, 2022.
Comment date: To be assured
consideration, comments must be
received at one of the addresses
provided below, no later than 5 p.m. on
September 7, 2021.
ADDRESSES: Written comments may be
submitted to the addresses specified
below. Any comment that is submitted
will be shared among the Departments
and OPM. Please do not submit
duplicates.
Comments will be made available to
the public. Warning: Do not include any
personally identifiable information
(such as name, address, or other contact
information) or confidential business
information that you do not want
publicly disclosed. Comments are
posted on the internet exactly as
received and can be retrieved by most
internet search engines. No deletions,
modifications, or redactions will be
made to the comments received, as they
are public records. Comments may be
submitted anonymously.
In commenting, refer to file code
CMS–9909–IFC. Because of staff and
resource limitations, we cannot accept

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comments by facsimile (FAX)
transmission.
Comments, including mass comment
submissions, must be submitted in one
of the following three ways (please
choose only one of the ways listed):
1. Electronically. You may submit
electronic comments on this regulation
at https://www.regulations.gov by
entering the file code in the search
window and then clicking on
‘‘Comment’’.
2. By regular mail. You may mail
written comments to the following
address ONLY: Centers for Medicare &
Medicaid Services, Department of
Health and Human Services, Attention:
CMS–9909–IFC, P.O. Box 8016,
Baltimore, MD 21244–8016.
Please allow sufficient time for mailed
comments to be received before the
close of the comment period.
3. By express or overnight mail. You
may send written comments to the
following address ONLY: Centers for
Medicare & Medicaid Services,
Department of Health and Human
Services, Attention: CMS–9909–IFC,
Mail Stop C4–26–05, 7500 Security
Boulevard, Baltimore, MD 21244–1850.
For information on viewing public
comments, see the beginning of the
SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Padma Babubhai Shah, Office of
Personnel Management, at 202–606–
4056; Kari DiCecco, Internal Revenue
Service, Department of the Treasury, at
202–317–5500; Matt Litton or David
Sydlik, Employee Benefits Security
Administration, Department of Labor, at
202–693–8335; Lindsey Murtagh,
Centers for Medicare & Medicaid
Services, Department of Health and
Human Services, at 301–492–4106.
Customer Service Information:
Information from OPM on health
benefits plans offered under the Federal
Employees Health Benefits (FEHB)
Program can be found on the OPM
website (www.opm.gov/healthcareinsurance/healthcare/). Individuals
interested in obtaining information from
the DOL concerning employment-based
health coverage laws may call the
Employee Benefits Security
Administration (EBSA) Toll-Free
Hotline at 1–866–444–EBSA (3272) or
visit the DOL’s website (www.dol.gov/
ebsa). In addition, information from
HHS on private health insurance
coverage and coverage provided by nonfederal governmental group health plans
can be found on the Centers for
Medicare & Medicaid Services (CMS)
website (www.cms.gov/cciio), and
information on health care reform can
be found at www.HealthCare.gov.

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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations
Inspection
of Public Comments: Comments
received before the close of the
comment period are available for
viewing by the public, including any
personally identifiable or confidential
business information that is included in
a comment. We post comments received
before the close of the comment period
on the following website as soon as
possible after they have been received:
https://regulations.gov. Follow the
search instructions on that website to
view public comments.

SUPPLEMENTARY INFORMATION:

I. Background

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A. Patient Protections and Requirements
Related to Emergency Services Under
Section 2719A of the Public Health
Service Act
The Patient Protection and Affordable
Care Act (Pub. L. 111–148), was enacted
on March 23, 2010 and the Health Care
and Education Reconciliation Act of
2010, Public Law 111–152, was enacted
on March 30, 2010 (these statutes are
collectively known as the ‘‘Affordable
Care Act’’ or ‘‘ACA’’). The Affordable
Care Act reorganizes, amends, and adds
to the provisions of part A of title XXVII
of the Public Health Service Act (PHS
Act) relating to group health plans and
health insurance issuers in the group
and individual markets.1 The Affordable
Care Act adds section 715(a)(1) to the
Employee Retirement Income Security
Act (ERISA) and section 9815(a)(1) to
the Internal Revenue Code (the Code) to
incorporate the provisions of part A of
title XXVII of the PHS Act into ERISA
and the Code, and make them
applicable to group health plans and
health insurance issuers providing
health insurance coverage in connection
with group health plans. Sections 2701
through 2728 of the PHS Act are
incorporated into ERISA and the Code.
Under section 2719A of the PHS Act,
as added by the Affordable Care Act and
incorporated into ERISA and the Code,
if a non-grandfathered group health plan
or health insurance issuer offering nongrandfathered group or individual
health insurance coverage provides any
benefits with respect to emergency
services in an emergency department of
a hospital, the plan or issuer must cover
emergency services without the
individual or the health care provider
having to obtain prior authorization
(including when the emergency services
are provided out-of-network) and
without regard to whether the health
care provider furnishing the emergency
services is an in-network provider with
1 The term ‘‘group health plan’’ includes both
insured and self-insured group health plans.

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respect to the services. The emergency
services must be provided without
regard to any other term or condition of
the plan or health insurance coverage
other than the exclusion or coordination
of benefits, an affiliation or waiting
period permitted under the Code,
ERISA, and the PHS Act, or applicable
cost-sharing requirements. For a plan or
health insurance coverage with a
network of providers that provides
benefits for emergency services, the plan
or issuer may not impose any
administrative requirement or limitation
on benefits for out-of-network
emergency services that is more
restrictive than the requirements or
limitations that apply to in-network
emergency services. In addition, carriers
offering FEHB plans must comply with
requirements described in section
2719A of the PHS Act in the same
manner as they apply to a plan or issuer.
For purposes of the requirements
under section 2719A of the PHS Act,
emergency services mean, with respect
to an emergency medical condition, (1)
a medical screening examination (as
required under section 1867 of the
Social Security Act) that is within the
capability of the emergency department
of a hospital, including ancillary
services routinely available to the
emergency department to evaluate such
emergency medical condition, and (2)
that is within the capabilities of the staff
and facilities available at the hospital,
such further medical examination and
treatment as are required under section
1867 of the Social Security Act to
stabilize the patient.
Regulations implementing section
2719A of the PHS Act include these
consumer protections.2 Section 2719A
of the PHS Act did not prohibit balance
billing. Balance billing refers to the
practice of out-of-network providers
billing patients for the difference
between (1) the provider’s billed
charges, and (2) the amount collected
from the plan or issuer plus the amount
collected from the patient in the form of
cost sharing (such as a copayment,
coinsurance, or amounts paid toward a
deductible). To avoid the circumvention
of the protections of section 2719A of
the PHS Act, in the implementing
regulations, the Departments
determined it was necessary that a
reasonable amount be paid by a plan or
issuer before a patient becomes
responsible for a balance billing
amount.3 Therefore, under the
2 26 CFR 54.9815–2719A(b); 29 CFR 2590.715–
2719A(b); 45 CFR 147.138(b).
3 75 FR 37188, 37194 (June 28, 2010); see also 80
FR 72192 (Nov. 18, 2015). Additional clarification
of these rules was also provided in 2018. See 83 FR
19431 (May 3, 2018).

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Departments’ final regulations
published in the Federal Register on
November 18, 2015 (Patient Protections
Final Rule), a plan or issuer satisfies the
out-of-network emergency care costsharing limitations in the statute if it
provides benefits for out-of-network
emergency services in an amount at
least equal to the greatest of the
following three amounts (adjusted for
in-network cost sharing): (1) The
median amount negotiated with innetwork providers for the emergency
service; (2) the amount for the
emergency service calculated using the
same method the plan generally uses to
determine payments for out-of-network
services (such as the usual, customary,
and reasonable (UCR) amount); or (3)
the amount that would be paid under
Medicare Part A or Part B for the
emergency service (collectively,
minimum payment standards).4 The
Departments’ regulations clarify that the
cost-sharing requirements create a
minimum payment requirement for the
plan or issuer.5 The Departments also
clarified that the cost-sharing
requirements do not prohibit a group
health plan or health insurance issuer
from providing benefits with respect to
an emergency service that are greater
than the amounts specified in the
regulations. However, those regulations
address balance billing with respect to
only emergency services and, even in
that context, they serve only to
minimize the amount of a balance bill
by requiring that plans and issuers must
pay a reasonable amount for emergency
services before a patient becomes
responsible for a balance billing
amount. Prior to the enactment of the
No Surprises Act, these minimum
payment standards were the only
federal consumer protections to reduce
potential amounts of balance billing for
individuals enrolled in group health
plans and group and individual health
insurance coverage.
4 26 CFR 54.9815–2719A(b)(3); 29 CFR 2590.715–
2719A(b)(3); 45 CFR 147.138(b)(3).
5 If state law prohibits balance billing, or in cases
in which a group health plan or health insurance
issuer is contractually responsible for balance
billing amounts, plans and issuers are not required
to satisfy the minimum payment standards set forth
in the regulations, but may not impose any
copayment or coinsurance requirement for out-ofnetwork emergency services that is higher than the
copayment or coinsurance requirement that would
apply if the services were provided in-network. See
26 CFR 54.9815–2719A(b)(3)(iii); 29 CFR 2590.715–
2719A(b)(3)(iii); 45 CFR 147.138(b)(3)(iii); FAQs
about Affordable Care Act Implementation (Part I),
Q15 (Sept. 20, 2010), available at https://
www.dol.gov/agencies/ebsa/laws-and-regulations/
laws/affordable-care-act/for-employers-andadvisers/aca-implementation-faqs; www.cms.gov/
CCIIO/Resources/Fact-Sheets-and-FAQs/aca_
implementation_faqs.html.

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The No Surprises Act added section
9816 of the Code, section 716 of ERISA,
and section 2799A–1 of the PHS Act,
which expand the patient protections
related to emergency services under
section 2719A of the PHS Act, in part,
by providing additional consumer
protections related to balance billing.6
The No Surprises Act amended section
2719A of the PHS Act to include a
sunset provision effective for plan years
beginning on or after January 1, 2022,
when the new protections under the No
Surprises Act take effect.
Additionally, the No Surprises Act
recodified the patient protections
regarding choice of health care
professional from section 2719A(a), (c),
and (d) of the PHS Act at new section
9822 of the Code, section 722 of ERISA,
and section 2799A–7 of the PHS Act. If
a plan or issuer requires or provides for
designation by a participant,
beneficiary, or enrollee of a
participating primary care provider,
these provisions permit individuals to
designate any participating primary care
providers available to accept them,
including pediatricians, and prohibit
the plan or issuer from requiring
authorization or referral for obstetrical
or gynecological care.

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B. Surprise Billing and the Need for
Greater Consumer Protections
Most group health plans, and health
insurance issuers offering group or
individual health insurance coverage,
have a network of providers and health
care facilities (participating providers or
preferred providers) who agree by
contract to accept a specific amount for
their services.7 By contrast, providers
and facilities that are not part of a plan
or issuer’s network (nonparticipating
providers) usually charge higher
amounts than the contracted rates that
plans and issuers have negotiated with
participating providers and facilities.
When a participant, beneficiary, or
enrollee receives care from a
nonparticipating provider, the
individual’s plan or issuer may decline
to pay for the service or may pay an
amount that is lower than the provider’s
billed charges, and may subject the
6 These new protections apply regardless of
whether the plan or coverage is a grandfathered
health plan under section 1251 of the Affordable
Care Act. The No Surprises Act also amended 5
U.S.C. 8902(p) to ensure that covered individuals
enrolled in FEHB plans receive these protections.
7 These interim final rules refer to providers both
in terms of their participation (participating
provider) and in terms of a network (in-network
provider). In both situations, the intent is to refer
to a provider that has a contractual relationship or
other arrangement with a plan or issuer to provide
health care items and services for participants,
beneficiaries, and enrollees of the plan or issuer.

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individual to greater cost-sharing
requirements than would have been
charged had the services been furnished
by a participating provider. Prior to the
No Surprises Act, the nonparticipating
provider could generally balance bill the
individual for the difference between
the provider’s billed charges and the
sum of the amount paid by the plan or
issuer and the cost sharing paid by the
individual, unless otherwise prohibited
by state law.
A balance bill may come as a surprise
for the individual. A surprise medical
bill is an unexpected bill from a health
care provider or facility that occurs
when a covered person receives medical
services from a provider or facility that,
usually unknown to the participant,
beneficiary, or enrollee, is a
nonparticipating provider or facility
with respect to the individual’s
coverage. Surprise billing occurs both
for emergency and non-emergency care.
In an emergency, a person usually goes
(or is taken by emergency transport) to
a nearby emergency department. Even if
they go to a participating hospital or
facility for emergency care, they may
receive care from nonparticipating
providers working at that facility. For
non-emergency care, a person may
choose a participating facility (and
possibly even a participating provider),
but not know that at least one provider
involved in their care (for example, an
anesthesiologist or radiologist) is a
nonparticipating provider. In either
circumstance, the person might not be
in a position to choose the provider, or
to ensure that the provider is a
participating provider. Therefore, in
addition to a bill for their cost-sharing
amount, which tends to be higher for
out-of-network services, the person
might receive a balance bill from the
nonparticipating provider or facility.
This scenario also plays out frequently
for air ambulance services, where
individuals generally do not have the
ability to select a provider of air
ambulance services, and, therefore, have
little or no control over whether the
provider is in-network with their plan
or coverage.
When individuals are unable to avoid
nonparticipating providers, it raises
health care costs and exposes patients to
financial risk.8 The evidence suggests
that the ability to balance bill is used as
leverage by some providers to obtain
higher in-network payments, which
results in higher premiums, higher cost
sharing for individuals, and increased
8 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.

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health care expenditures overall.9
Studies have shown that surprise bills
can be large. For example, a recent
study found that physicians collected,
on average, 65 percent of the total
charged amount for emergency
department visits that likely included
surprise bills, compared to 52 percent of
the total charged amount for emergency
department visits that likely did not
include surprise bills. The study also
found that nine percent of the
individuals who likely received surprise
bills paid physicians an amount more
than $400, which may cause financial
hardship to many individuals.10 In
addition, out-of-network cost sharing
and payments for surprise bills usually
do not count towards an individual’s
deductible and maximum out-of-pocket
expenditure limits. Therefore,
individuals with surprise bills may have
difficulty reaching those limits, even
after a significant health care event.
Another study using claims data from
a large commercial issuer for the period
2010–2016 found that over 39 percent of
emergency department visits to innetwork hospitals resulted in an out-ofnetwork bill, and the incidence
increased from 32.3 percent in 2010 to
42.8 percent in 2016. The average
potential amount of surprise medical
bills also increased from $220 in 2010
to $628 in 2016. During the same
period, 37 percent of inpatient
admissions to in-network hospitals
resulted in at least one out-of-network
bill, increasing from 26.3 percent in
2010 to 42 percent in 2016, and the
average potential surprise medical bill
increased from $804 to $2,040.11
Although some states have enacted
laws to reduce or eliminate balance
billing, these efforts have created a
patchwork of consumer protections.
Even within a state that has enacted
such protections, those protections
typically apply only to individuals
enrolled in individual and group health
insurance coverage, as ERISA generally
9 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/.
10 Biener, A. et al., Emergency Physicians Recover
a Higher Share of Charges From Out-Of-Network
Care Than From In-Network Care, Health Affairs 40,
No, 4 (2021): 622–628.
11 Sun EC, Mello MM, Moshfegh J, Baker LC,
Assessment of Out-of-Network Billing for Privately
Insured Patients Receiving Care in In-Network
Hospitals. JAMA Intern Med. 2019; 179(11):1543–
1550 (2019). doi:10.1001/jamainternmed.2019.3451.

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preempts state laws that regulate selfinsured group health plans sponsored
by private employers. In addition, states
are limited in their ability to address
surprise bills that involve an out-of-state
provider.
Surprise medical bills can lead to
medical debt for individuals who have
difficulty paying their bills. The impact
is most keenly felt by those
communities experiencing poverty and
other social risk factors, as surprise
medical bills and medical debt can
negatively affect individuals’ abilities to
eliminate debt and create wealth, and
ultimately can affect a family for
generations.12 A recent survey reported
that while 68 percent of respondents
said that it was difficult to pay a
surprise bill, the likelihood of such
difficulty was higher for middle income
respondents (77 percent) and African
Americans (74 percent). In addition,
while 11 percent of survey respondents
were unable to pay the surprise bill, 21
percent of low income respondents, 19
percent of African Americans, and 17
percent of respondents in rural areas
were unable to do so.13 In addition,
individuals are often confused by
medical bills. A 2016 survey found that
61 percent of individuals are confused
by medical bills, and for 49 percent of
individuals surveyed, the amount owed
was a surprise.14 These challenges are
exacerbated for underserved
communities, which are more likely to
experience poor communication,
underlying mistrust of the medical
system, and lower levels of patient
engagement than other populations.15
12 Taylor, J. Racism, inequality, and health care
for African Americans. The Century Foundation:
Report (December 19, 2019). https://tcf.org/content/
report/racism-inequality-health-care-africanamericans/; Chavis, B. Op-Ed: Big insurance must
help end surprise medical billing. blackpressUSA
(February 24, 2020).
13 Families USA, Surprise Medical Bills, Results
from a National Survey, November 2019. https://
familiesusa.org/wp-content/uploads/2019/11/
Surprise-Billing-National-Poll-Report-FINAL.pdf.
14 Gooch, Kelly. 61% of patients confused by
medical bills, survey finds. Becker’s Hospital
Review (July 14, 2016). https://
www.beckershospitalreview.com/finance/61-ofpatients-confused-by-medical-bills-surveyfinds.html.
15 See Butler S, Sherriff N. How poor
communication exacerbates health inequities and
what to do about it. Brookings Institution: Report
(February 22, 2021). https://www.brookings.edu/
research/how-poor-communication-exacerbateshealth-inequities-and-what-to-do-about-it/; Hamel,
L., Lopes, L., Mun˜ana, C., Artiga, S., Brodie, M.
Race, Health, and COVID–19: The Views and
Experiences of Black Americans. Kaiser Family
Foundation (October 2020). https://files.kff.org/
attachment/Report-Race-Health-and-COVID-19The-Views-and-Experiences-of-BlackAmericans.pdf; Shen M.J., Peterson E.B., CostasMun˜iz R. et al. The Effects of Race and Racial
Concordance on Patient-Physician Communication:
A Systematic Review of the Literature. J. Racial and

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Effective, culturally, and linguistically
tailored communication at appropriate
literacy levels, coupled with policies
that address the social risk factors and
other barriers underserved communities
face to accessing, trusting, and
understanding health care costs and
coverage, can reduce disparities and
promote health equity.16
Communication among providers,
plans, consumers, communities, and
consumer advocates must be consistent
with and reinforce all relevant
consumer protections related to surprise
bills. Such communication must be
accessible, linguistically tailored, and at
an appropriate literacy level. This
includes compliance with requirements
to provide effective communication for
individuals with disabilities under the
Americans with Disabilities Act of
1990,17 section 504 of the Rehabilitation
Act of 1973 18 and, where applicable,
section 1557 of the Affordable Care
Act,19 as well as compliance with race,
color, and national origin protections
under title VI of the Civil Rights Act of
1964 20 and section 1557 of the
Affordable Care Act. Section 1557
prohibits discrimination on the basis of
race, color, national origin, sex
(including sexual orientation and
gender identity), age, or disability in
covered health programs or activities,
including requiring covered entities to
take reasonable steps to ensure
meaningful access for individuals with
limited English proficiency.
On January 20, 2021, President Biden
issued Executive Order 13985, ‘‘On
Advancing Racial Equity and Support
for Underserved Communities Through
the Federal Government,’’ 21 directing
that as a policy matter, the federal
government should pursue a
comprehensive approach to advancing
equity for all, including people of color
and others who have been historically
underserved, marginalized, and
adversely affected by persistent poverty
and inequality. Executive Order 13985
also directs HHS to assess whether, and
to what extent, its programs and policies
Ethnic Health Disparities 5, 117–140 (2018). https://
doi.org/10.1007/s40615-017-0350-4.
16 Pe
´ rez-Stable EJ, El-Toukhy S. Communicating
with diverse patients: How patient and clinician
factors affect disparities. Patient Educ Couns.
2018;101(12):2186–2194. doi:10.1016/
j.pec.2018.08.021; McNally, M. Confronting
disparities in access to healthcare for underserved
populations. MedCity News (February 22, 2021).
https://medcitynews.com/2021/02/confrontingdisparities-in-access-to-healthcare-for-underservedpopulations-in-2021/.
17 42 U.S.C. 12101 et seq.
18 29 U.S.C. 794 and 794d.
19 42 U.S.C. 18116(a).
20 42 U.S.C. 2000d.
21 86 FR 7009 (Jan. 25, 2021).

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perpetuate systemic barriers to
opportunities and benefits for people of
color and other underserved groups.
Consistent with Executive Order 13985,
regulations issued pursuant to the No
Surprises Act must ensure that
communication from plans, issuers,
providers, facilities, and providers of air
ambulance services recognizes these
inequities and upholds all relevant
consumer protections. Regulations
issued pursuant to the No Surprises Act
should ensure that all individuals,
particularly those from underserved and
minority communities, trust and believe
information they receive related to costs
and network coverage. Regulations and
policies should enable and encourage
regulated entities to address barriers to
accessing care, including mistrust of the
health care system. They should also
encourage entities to communicate with
individuals in a language they can
understand, in a respectful way that
addresses cultural differences, and at an
appropriate literacy level. To ensure all
consumers, particularly those in
minority and underserved communities,
are able to understand and benefit from
these consumer protections, deliberate
attention must be paid to the unique
barriers and challenges underserved
communities face in understanding and
accessing health care. The Departments
seek comment from those who are
members of, advocate for, and work
with underserved communities
regarding the impact of these interim
final rules.
C. Preventing Surprise Medical Bills
Under the Consolidated Appropriations
Act, 2021
On December 27, 2020, the
Consolidated Appropriations Act, 2021
(CAA), which included the No Surprises
Act, was signed into law. The No
Surprises Act provides federal
protections against surprise billing and
limits out-of-network cost sharing under
many of the circumstances in which
surprise bills arise most frequently.22
The CAA added provisions that apply
to group health plans and health
insurance issuers in the group and
individual market in a new Part D of
title XXVII of the PHS Act, and also
added new provisions to part 7 of
ERISA, and subchapter B of chapter 100
of the Code. Section 102 of the No
Surprises Act added section 9816 of the
Code, section 716 of ERISA, and section
2799A–1 of the PHS Act, which contain
limitations on cost sharing, and
requirements for initial payments for
emergency services and for nonemergency services provided by
22 Public

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nonparticipating providers at certain
participating health care facilities.
Section 103 of the No Surprises Act
amended section 9816 of the Code,
section 716 of ERISA, and section
2799A–1 of the PHS Act to establish an
independent dispute resolution (IDR)
process that allows plans and issuers
and nonparticipating providers and
nonparticipating emergency facilities to
resolve disputes over out-of-network
rates. Section 105 of the No Surprises
Act added section 9817 of the Code,
section 717 of ERISA, and section
2799A–2 of the PHS Act, which contain
limitations on cost sharing and
requirements for initial payments to
nonparticipating providers of air
ambulance services, and allow plans
and issuers and such providers of air
ambulance services to access the IDR
process. The CAA also amended the
FEHBA, as discussed in more detail in
section I.D. of this preamble.
The CAA provisions that apply to
health care providers and facilities and
providers of air ambulance services,
such as cost-sharing requirements,
prohibitions on balance billing for
certain items and services, and
requirements related to disclosures
about balance billing protections, were
added to title XXVII of the PHS Act in
a new part E.
The Departments are issuing
regulations in several phases
implementing provisions of title I (No
Surprises Act) and title II
(Transparency) of Division BB of the
CAA. Later this year, the Departments
intend to issue regulations regarding the
federal IDR process (sections 103 and
105 of Division BB), patient protections
through transparency and the patientprovider dispute resolution process
(section 112), and price comparison
tools (section 114). The Departments
also intend to undertake rulemaking this
year to propose the form and manner in
which plans, issuers, and providers of
air ambulance services would report
information regarding air ambulance
services (section 106). In addition, HHS
intends to undertake rulemaking to
implement requirements on health
insurance issuers offering individual
health insurance coverage or short-term,
limited-duration insurance to disclose
and report information regarding direct
or indirect compensation provided to
agents and brokers (section 202(c)), as
well as provisions related to HHS
enforcement of requirements on issuers,
non-federal governmental group health
plans, providers, facilities, and
providers of air ambulance services.
The CAA also includes provisions
regarding transparency in plan and
insurance identification cards (section

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107), continuity of care (section 113),
accuracy of provider network directories
(section 116), and prohibition on gag
clauses (section 201) that are applicable
for plan years beginning on or after
January 1, 2022; and pharmacy benefit
and drug cost reporting (section 204)
that is required by December 27, 2021.
The Departments intend to undertake
rulemaking to fully implement these
provisions, but rulemaking regarding
some of these provisions might not
occur until after January 1, 2022. The
Departments note that any such
rulemaking to fully implement these
provisions will include a prospective
applicability date that provides plans,
issuers, providers, and facilities, as
applicable, a reasonable amount of time
to comply with new or clarified
requirements. Until rulemaking to fully
implement these provisions is finalized
and effective, plans and issuers are
expected to implement the requirements
using a good faith, reasonable
interpretation of the statute. The
Departments intend to issue guidance in
the near future regarding their
expectations related to good faith
compliance with these provisions.
D. Preventing Surprise Medical Bills for
Federal Employees Health Benefits
Plans
The No Surprises Act also amended
the FEHBA, 5 U.S.C. 8901 et seq., by
adding a new subsection (p) to 5 U.S.C.
8902. Under this new provision, each
FEHB Program contract must require a
carrier to comply with provisions of
sections 9816, 9817, and 9822 of the
Code; sections 716, 717, and 722 of
ERISA; and sections 2799A–1, 2799A–2,
and 2799A–7 of the PHS Act (as
applicable) in the same manner as they
apply with respect to a group health
plan or health insurance issuer offering
group or individual health insurance
coverage. Likewise, the provisions of
sections 2799B–1, 2799B–2, 2799B–3,
and 2799B–5 of the PHS Act apply to
health care providers, facilities, and
providers of air ambulance services with
respect to covered individuals in FEHB
plans in the same manner as they apply
to participants, beneficiaries, or
enrollees in group health plans or
coverage offered by health insurance
issuers.
OPM is charged with administering
the FEHB Program and maintains
oversight and enforcement authority
with respect to FEHB health benefits
plans, which are federal governmental
plans. Generally, under 5 U.S.C.
8902(p), each FEHB contract must
require a carrier to comply with certain
PHS Act, ERISA, and Code requirements
in the same manner as they apply to a

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group health plan or health insurance
issuer.
II. Executive Summary
These interim final rules implement
provisions of the No Surprises Act that:
(1) Apply to group health plans, health
insurance issuers offering group or
individual health insurance coverage,
and carriers in the FEHB Program to
provide protections against balance
billing and out-of-network cost sharing
with respect to emergency services, nonemergency services furnished by
nonparticipating providers at certain
participating health care facilities, and
air ambulance services furnished by
nonparticipating providers of air
ambulance services; (2) prohibit
nonparticipating providers, health care
facilities, and providers of air
ambulance services from balance billing
participants, beneficiaries, and enrollees
in certain situations, and permit these
providers and facilities to balance bill
individuals if certain notice and consent
requirements in the No Surprises Act
are satisfied; (3) require certain health
care facilities and providers to provide
disclosures of federal and state patient
protections against balance billing; (4)
recodify certain patient protections that
initially appeared in the ACA and that
the No Surprises Act applies to
grandfathered plans; and (5) set forth
complaints processes with respect to
violations of the protections against
balance billing and out-of-network cost
sharing under the No Surprises Act.
These interim final rules protect
individuals from surprise medical bills
for emergency services, air ambulance
services furnished by nonparticipating
providers, and non-emergency services
furnished by nonparticipating providers
at participating facilities in certain
circumstances. Among other
requirements, these interim final rules
require emergency services to be
covered without any prior
authorization, without regard to
whether the health care provider
furnishing the emergency services is a
participating provider or a participating
emergency facility with respect to the
services, and without regard to any
other term or condition of the plan or
coverage other than the exclusion or
coordination of benefits or a permitted
affiliation or waiting period.
Additionally, emergency services
include certain services in an
emergency department of a hospital or
an independent freestanding emergency
department, as well as post-stabilization
services in certain instances.
With respect to emergency services,
air ambulance services furnished by
nonparticipating providers, and non-

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emergency services furnished by
nonparticipating providers at
participating facilities, these interim
final rules limit cost sharing for out-ofnetwork services to in-network levels,
require such cost sharing to count
toward any in-network deductibles and
out-of-pocket maximums, and prohibit
balance billing, as required by the No
Surprises Act.
These interim final rules specify that
cost-sharing amounts for such services
furnished by nonparticipating
emergency facilities and
nonparticipating providers at
participating facilities must be
calculated based on one of the following
amounts: (1) An amount determined by
an applicable All-Payer Model
Agreement under section 1115A of the
Social Security Act; (2) if there is no
such applicable All-Payer Model
Agreement, an amount determined by a
specified state law; or (3) if there is no
such applicable All-Payer Model
Agreement or specified state law, the
lesser of the billed charge or the plan’s
or issuer’s median contracted rate,
referred to as the qualifying payment
amount (QPA). Cost-sharing amounts for
air ambulance services provided by
nonparticipating providers must be
calculated using the lesser of the billed
charge or the QPA, and the cost-sharing
requirement that would apply if such
services were provided by a
participating provider.
Under these interim final rules,
balance billing for services covered by
the rules generally is prohibited, and the
total amount to be paid to the provider
or facility, including any cost sharing, is
based on: (1) An amount determined by
an applicable All-Payer Model
Agreement under section 1115A of the
Social Security Act; (2) if there is no
such applicable All-Payer Model
Agreement, an amount determined by a
specified state law; (3) if there is no
such applicable All-Payer Model
Agreement or specified state law, an
amount agreed upon by the plan or
issuer and the provider or facility; or (4)
if none of those three conditions apply,
an amount determined by an IDR entity.
In general, under the No Surprises Act
and these interim final rules, the
protections that limit cost sharing and
prohibit balance billing do not apply to
certain post-stabilization services, or to
certain non-emergency services
performed by nonparticipating
providers at participating health care
facilities, if the provider or facility
provides notice to the participant,
beneficiary, or enrollee, and obtains the
individual’s consent to waive the
balance billing protections. However,
providers and facilities may not provide

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such notice or seek consent from
individuals in certain circumstances
where surprise bills are likely to occur,
such as for ancillary services provided
by nonparticipating providers in
connection with non-emergency care in
a participating facility. In such
circumstances, balance billing is
prohibited, and the other protections of
the No Surprises Act, such as innetwork cost-sharing requirements,
continue to apply.
Neither the No Surprises Act, nor
these interim final rules, universally
protect individuals from every high or
unexpected medical bill. For example,
an individual may be enrolled in a
group health plan or health insurance
coverage that provides little or no
coverage for their particular health care
condition or the items and services
necessary to treat that condition. In
addition, balance billing continues to be
permitted, unless prohibited by state
law or contract, in circumstances where
these interim final rules do not apply,
such as for non-emergency items or
services provided at facilities that are
not included within the definition of
health care facility in these interim final
rules. Nonetheless, the No Surprises Act
and these interim final rules provide
relief from some of the more common
scenarios where a participant,
beneficiary, or enrollee might otherwise
be faced with high and unexpected
medical costs.
These interim final rules establish a
complaints process for receiving and
resolving complaints related to these
new balance billing protections.
These interim final rules also
implement the requirement of the No
Surprises Act that certain health care
providers and facilities make publicly
available, post on a public website, and
provide a one-page notice to individuals
regarding: (1) The requirements and
prohibitions applicable to the provider
or facility under sections 2799B–1 and
2799B–2 of the PHS Act and their
implementing regulations; (2) any
applicable state balance billing
requirements; and (3) how to contact
appropriate state and federal agencies if
the individual believes the provider or
facility has violated the requirements
described in the notice.
Section 116 of the No Surprises Act
also added section 9820(c) of the Code,
section 720(c) of ERISA, and section
2799A–5(c) of the PHS Act, which
include similar disclosure requirements
applicable to plans and issuers. In
general, under these provisions, plans
and issuers must make publicly
available, post on a public website of
the plan or issuer, and include on each
explanation of benefits for an item or

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service with respect to which the
requirements under section 9816 of the
Code, section 716 of ERISA, and section
2799A–1 of the PHS Act apply,
information on the requirements
applied under these aforementioned
sections, as applicable; on the
requirements and prohibitions applied
under sections 2799B–1 and 2799B–2 of
the PHS Act; on other applicable state
laws on out-of-network balance billing;
and on contacting appropriate state and
federal agencies in the case that an
individual believes that such a provider
or facility has violated the prohibition
against balance billing. These disclosure
requirements are applicable for plan
years beginning on or after January 1,
2022. To reduce burden and facilitate
compliance with these disclosure
requirements, the Departments are
concurrently issuing a model disclosure
notice that health care providers,
facilities, group health plans, and health
insurance issuers may, but are not
required to, use to satisfy the disclosure
requirements regarding the balance
billing protections. The Departments
will consider use of the model notice in
accordance with the accompanying
instructions to be good faith compliance
with the disclosure requirements of
section 9820(c) of the Code, section
720(c) of ERISA, and section 2799A–5(c)
of the PHS Act, if all other applicable
requirements are met. In addition, HHS
will consider use of the model notice in
accordance with the accompanying
instructions to be good faith compliance
with the disclosure requirements of
section 2799B–3 of the PHS Act and 45
CFR 149.430, if all other applicable PHS
Act requirements are met. The
Departments may address the
requirements under section 9820(c) of
the Code, section 720(c) of ERISA, and
section 2799A–5(c) of the PHS Act, as
added by the No Surprises Act, in more
detail in future guidance or rulemaking.
Until further guidance is issued, plans
and issuers are expected to implement
the requirements of section 9820(c) of
the Code, section 720(c) of ERISA, and
section 2799A–5(c) of the PHS Act using
a good faith, reasonable interpretation of
the law. The Departments will take into
account the statutory applicability date
and the timeframe for implementation
when determining good faith
compliance with the law.
These interim final rules generally
apply to group health plans and health
insurance issuers offering group or
individual health insurance coverage
(including grandfathered health plans)
with respect to plan years (in the
individual market, policy years)
beginning on or after January 1, 2022, as

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well as to health care providers and
facilities, and providers of air
ambulance services beginning on
January 1, 2022.
In the OPM interim final rules
included in this rulemaking, OPM
adopts all provisions of the
Departments’ interim final rules that
address the sections of the Code, ERISA,
and the PHS Act that are referenced in
5 U.S.C. 8902(p). In the OPM interim
final rules, OPM defines terms unique to
the FEHB Program, adapts some of the
Departments’ rules as necessary to
properly integrate with the existing
FEHB Program regulatory and
contractual structure, sets forth the
circumstances in which OPM will
enforce these rules against FEHB
carriers, and sets forth the types of court
actions involving the FEHB Program
that may be brought against OPM with
respect to the No Surprises Act.
In effectuating compliance with 5
U.S.C. 8902(p), FEHB contract terms
that relate to the nature, provision, or
extent of coverage or benefits (including
payments with respect to benefits)
supersede and preempt state law or
local law, or any regulation issued
thereunder, which relates to health
insurance or plans.23 OPM contracts
with FEHB carriers may include terms
that adopt state law as governing for a
particular purpose.

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III. Overview of the Interim Final
Rules—Departments of HHS, Labor,
and the Treasury
A. Definitions
The provisions of the Code, ERISA,
and the PHS Act added by the No
Surprises Act, as well as these interim
final rules, include defined terms that
are specific to the requirements and
implementation of the law. Definitions
of these key terms are described
throughout this preamble. These terms
help define the scope of the balance
billing protections and how cost-sharing
amounts and payment levels are
determined.
The Departments note that these
interim final rules define the term
‘‘physician or health care provider’’ to
mean a physician or other health care
provider who is acting within the scope
of practice of that provider’s license or
certification under applicable state law,
but the definition specifically excludes
providers of air ambulance services. The
Departments recognize that, although
the No Surprises Act does not define
‘‘provider,’’ it uses the term in a manner
that includes providers of air ambulance
services in some provisions. For
23 5 U.S.C. 8902(m)(1); see Coventry Health Care
of Missouri, Inc. v. Nevils, 137 S. Ct. 1190 (2017).

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example, the No Surprises Act added
section 2799B–4 of the PHS Act, which
specifically includes providers of air
ambulance services when referencing
providers. However, certain other
provisions in the No Surprises Act
apply only to providers of air
ambulance services, or apply to health
care providers generally, but by their
terms are inapplicable to providers of
air ambulance services. As an example
of the latter, the No Surprises Act added
section 2799B–2 of the PHS Act, which
generally prohibits balance billing by
nonparticipating health care providers
furnishing non-emergency services at
participating health care facilities.
Although this provision does not
explicitly exclude providers of air
ambulance services, providers of air
ambulance services would not furnish
non-emergency services at participating
health care facilities. Therefore, the
provision does not apply to providers of
air ambulance services (such providers
are, however, prohibited from balance
billing under section 2799B–5 of the
PHS Act). Similarly, section 2799B–3 of
the PHS Act, which requires a health
care provider to inform individuals of
the requirements and prohibitions on
such health care provider in sections
2799B–1 and 2799B–2 of the PHS Act
(neither of which apply to providers of
air ambulance services), does not by its
terms apply to providers of air
ambulance services. Therefore, these
interim final rules define ‘‘physician or
health care provider’’ to exclude
providers of air ambulance services, in
order to help clarify which provisions of
the No Surprises Act and interim final
rules apply to providers of air
ambulance services. In instances where
provisions under the No Surprises Act,
as implemented in these interim final
rules, apply to providers of air
ambulance services, the provisions
explicitly reference air ambulance
providers. Conversely, where providers
of air ambulance services are not
explicitly mentioned, the provisions do
not apply.
The Departments seek comment on
the terms defined in these interim final
rules, including the appropriateness and
usability of the definitions, and whether
additional terms should be defined in
future rulemaking.
B. Preventing Surprise Medical Bills
1. Scope of the New Surprise Billing
Protections
i. Emergency Services
Under section 9816(a) of the Code,
section 716(a) of ERISA, and section
2799A–1(a) of the PHS Act, and these
interim final rules, if a group health

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plan, or a health insurance issuer
offering group or individual health
insurance coverage, provides or covers
any benefits with respect to services in
an emergency department of a hospital
or with respect to emergency services in
an independent freestanding emergency
department, the plan or issuer must
cover emergency services as defined in
these interim final rules and such
coverage must be provided in
accordance with these interim final
rules.
A plan or issuer providing coverage of
emergency services must do so without
the individual or the health care
provider having to obtain prior
authorization (including when the
emergency services are provided out-ofnetwork) and without regard to whether
the health care provider furnishing the
emergency services is a participating
provider or a participating emergency
facility with respect to the services. The
emergency services must be provided
without regard to any other term or
condition of the plan or coverage other
than the exclusion or coordination of
benefits (to the extent not inconsistent
with benefits for an emergency medical
condition as defined in these interim
final rules), an affiliation or waiting
period as permitted under the Code,
ERISA, or the PHS Act, or applicable
cost-sharing requirements. For a plan or
health insurance coverage with a
network of providers that provides
benefits for emergency services, the plan
or issuer may not impose any
administrative requirement or limitation
on coverage for emergency services
received from nonparticipating
providers or nonparticipating
emergency facilities that is more
restrictive than the requirements or
limitations that apply to emergency
services received from participating
providers or participating emergency
facilities. In addition, such plan or
health insurance coverage must comply
with the requirements regarding cost
sharing, payment amounts, and
processes for resolving billing disputes
described elsewhere in this preamble.
The terms ‘‘emergency medical
condition,’’ ‘‘emergency services,’’ and
‘‘to stabilize’’ generally have the
meaning given to them under the
Emergency Medical Treatment and
Labor Act (EMTALA), section 1867 of
the Social Security Act.24 Emergency
services include: (1) An appropriate
medical screening examination that is
within the capability of the emergency
department of a hospital or of an
independent freestanding emergency
department, including ancillary services
24 42

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routinely available to the emergency
department, to evaluate whether an
emergency medical condition exists;
and (2) such further medical
examination and treatment as may be
required to stabilize the individual
(regardless of the department of the
hospital in which the further medical
examination and treatment is furnished)
within the capabilities of the staff and
facilities available at the hospital or the
independent freestanding emergency
department.
Under section 2719A of the PHS Act,
emergency services were defined to
include: (1) A medical screening
examination (as required under section
1867 of the Social Security Act) that is
within the capability of the emergency
department of a hospital, including
ancillary services routinely available to
the emergency department to evaluate
such emergency medical condition; and
(2) such further medical examination
and treatment as are required under
section 1867 of the Social Security Act
to stabilize the patient within the
capabilities of the staff and facilities
available at the hospital. HHS has
previously interpreted the obligations
on hospitals under EMTALA to provide
medical examination and stabilization
services to end when a patient is
formally admitted in good faith.25
Section 9816(a) of the Code, section
716(a) of ERISA, and section 2799A–1(a)
of the PHS Act expand the definition of
emergency services (as compared to
section 2719A of the PHS Act) to
include stabilization services
‘‘regardless of the department of the
hospital in which the further medical
examination and treatment is
furnished.’’ Therefore, the definition of
emergency services in these interim
final rules includes pre-stabilization
services that are provided after the
patient is moved out of the emergency
department and admitted to a hospital,
and these services will be subject to the
protections of the No Surprises Act.
Section 102 of the No Surprises Act
further broadens the definition of
emergency services to include
emergency services provided at an
independent freestanding emergency
department. An independent
freestanding emergency department is a
health care facility (not limited to those
described in the definition of health
care facility at section 9816(b)(2)(A)(ii)
of the Code, section 716(b)(2)(A)(ii) of
ERISA, and section 2799A–1(b)(2)(A)(ii)
of the PHS Act, as applicable) that
provides emergency services, and is
geographically separate and distinct
25 42 CFR 489.24(a)(1)(ii); 68 FR 53221–53264
(Sept. 9, 2003); 73 FR 48654–48668 (Aug. 19, 2008).

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from a hospital, and separately licensed
as such by a state. The definition of
‘‘independent freestanding emergency
department’’ is intended to include any
health care facility that is geographically
separate and distinct from a hospital,
and that is licensed by a state to provide
emergency services, even if the facility
is not licensed under the term
‘‘independent freestanding emergency
department.’’
Regulation of health care facilities
varies by state. In particular, state
regulation of urgent care centers varies
significantly, and is evolving as these
types of centers become more
common.26 If under state licensure laws,
urgent care centers are permitted to
provide emergency services, then urgent
care centers in that state that are
geographically separate and distinct
from a hospital would fall within the
definition of independent freestanding
emergency department for purposes of
these interim final rules. In contrast, if
state licensure of urgent care centers
does not permit such facilities to
provide emergency services as defined
in these interim final rules, then urgent
care centers in that state would not be
treated as independent freestanding
emergency departments for purposes of
these interim final rules. Finally, the
definition of emergency services also
includes additional post-stabilization
services, as discussed in section
III.B.1.ii of this preamble.
The term ‘‘emergency medical
condition’’ means a medical condition
manifesting itself by acute symptoms of
sufficient severity (including severe
pain) such that a prudent layperson,
who possesses an average knowledge of
health and medicine, could reasonably
expect the absence of immediate
medical attention to result in a
condition described in EMTALA,
including (1) placing the health of the
individual (or, with respect to a
pregnant woman, the health of the
woman or her unborn child) in serious
jeopardy, (2) serious impairment to
bodily functions, or (3) serious
dysfunction of any bodily organ or
part.27 This definition includes mental
health conditions and substance use
disorders.
The Departments are aware that some
plans and issuers currently deny
coverage of certain services provided in
the emergency department of a hospital
26 Association of State and Territorial Health
Officials. As Urgent Care Centers Increase,
Licensing Authority Falling Under State Health
Agencies, (Oct. 11, 2018) available at https://
www.astho.org/StatePublicHealth/As-Urgent-CareCenters-Increase-Licensing-Authority-FallingUnder-State-Health-Agencies/10-11-18/.
27 See 42 U.S.C. 1395dd(e)(1)(A).

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by determining whether an episode of
care involves an emergency medical
condition based solely on final
diagnosis codes, such as International
Classification of Diseases, Tenth
Revision, Clinical Modification (ICD–
10–CM) codes . In addition, some plans
and issuers might automatically deny
coverage based on a list of final
diagnosis codes initially, without regard
to the individual’s presenting symptoms
or any additional review. Following an
initial denial, plans and issuers might
then provide for complete consideration
of the claim, and apply the prudent
layperson standard, only as part of an
appeals process if the participant,
beneficiary, or enrollee appeals. These
practices are inconsistent with the
emergency services requirements of the
No Surprises Act and the ACA.28 This
is true even if the process for complete
consideration of the claim following an
initial denial is not designated as a
formal appeal. Instead, the
determination of whether the prudent
layperson standard is met must be made
on a case-by-case basis before an initial
denial of an emergency services claim.
These interim final rules make clear
that if a group health plan, or a health
insurance issuer offering group or
individual health insurance coverage,
provides or covers any benefits with
respect to services in an emergency
department of a hospital or with respect
to emergency services in an
independent freestanding emergency
department, the plan or issuer must
cover emergency services without
limiting what constitutes an emergency
medical condition (as defined in these
interim final rules) solely on the basis
of diagnosis codes. When a plan or
issuer denies coverage, in whole or in
part, for a claim for payment of a service
rendered in the emergency department
of a hospital or independent
freestanding emergency department,
including services rendered during
observation or surgical services, the
determination of whether the prudent
layperson standard has been met must
be based on all pertinent documentation
and be focused on the presenting
symptoms (and not solely on the final
diagnosis). This determination must
take into account that the legal standard
28 See also Am. Coll. of Emergency Physicians v.
Blue Cross & Blue Shield of Georgia, No. 20–11511,
2020 WL 6165852 (11th Cir. Oct. 22, 2020) (per
curiam) (reversing dismissal of plaintiffs’ ACA and
ERISA claims alleging defendants violated prudent
layperson standard where review process was based
upon physician review of medical records and
diagnostic codes; prudent layperson standard
ignores a patient’s final diagnosis and instead asks
whether a person with average medical knowledge
would reasonably think they need emergency
services to address their symptoms).

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regarding the decision to seek
emergency services is based on whether
a prudent layperson (rather than a
medical professional) would reasonably
consider the situation to be an
emergency.29 In covering emergency
services, plans and issuers must also
ensure that they do not restrict the
coverage of emergency services by
imposing a time limit between the onset
of symptoms and the presentation of the
participant, beneficiary, or enrollee at
the emergency department. Similarly,
plans and issuers also may not restrict
the coverage of emergency services
because the patient did not experience
a sudden onset of the condition.
The Departments are also aware that
some plans and issuers that generally
provide coverage for emergency services
have nonetheless denied benefits for
such services based on other general
plan exclusions. For example, the
Departments are aware of some plans
and issuers denying claims for
emergency services provided to
dependent women who are pregnant,
based on a general plan exclusion for
dependent maternity care. As explained
previously, both the coverage of
emergency services rules issued under
section 2719A of the PHS Act and the
new emergency services requirements
included in these interim final rules
provide, in part, that if a plan or issuer
provides or covers any benefits with
respect to services in an emergency
department of a hospital (or under these
interim final rules, in an independent
freestanding emergency department),
emergency services must be provided
‘‘without regard to any other term or
condition of the plan or coverage (other
than the exclusion or coordination of
benefits . . . ).’’ The Departments clarify
that this provision does not permit
plans and issuers to exclude benefits for
items and services that would otherwise
constitute benefits for an emergency
medical condition as defined under
these interim final rules. This provision
does not permit plans and issuers that
cover emergency services to deny
benefits for a participant, beneficiary, or
enrollee with an emergency medical
condition that receives emergency
services, based on a general plan
exclusion that would apply to items and
services other than emergency services.
29 However, nothing in the statute or these
interim final rules prevents a plan or issuer from
approving coverage for emergency services solely
on the basis of diagnosis codes, or from taking
diagnostic codes into account when deciding
payment for a claim for emergency services,
provided a denial of coverage is not based solely on
diagnosis codes.

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ii. Post-Stabilization Services
Under section 9816(a)(3)(C)(ii) of the
Code, section 716(a)(3)(C)(ii) of ERISA,
and section 2799A–1(a)(3)(C)(ii) of the
PHS Act, emergency services include
any additional items and services that
are covered under a plan or coverage
and furnished by a nonparticipating
provider or nonparticipating emergency
facility (regardless of the department of
the hospital in which such items and
services are furnished) after a
participant, beneficiary, or enrollee is
stabilized and as part of outpatient
observation or an inpatient or outpatient
stay with respect to the visit in which
the other emergency services are
furnished. Such additional items and
services (referred to in this preamble as
post-stabilization services) are
considered emergency services subject
to surprise billing protections unless the
conditions enumerated in section
9816(a)(3)(C)(ii)(II)(aa)–(cc) of the Code,
section 716(a)(3)(C)(ii)(II)(aa)–(cc) of
ERISA, or section 2799A–
1(a)(3)(C)(ii)(II)(aa)–(cc) of the PHS Act,
as applicable, are met, as well as such
other conditions as specified by the
Departments under paragraph (dd) of
the respective sections. Therefore, these
interim final rules provide that poststabilization services are emergency
services unless all of the following
conditions are met.
First, the attending emergency
physician or treating provider must
determine that the participant,
beneficiary, or enrollee is able to travel
using nonmedical transportation or
nonemergency medical transportation to
an available participating provider or
facility located within a reasonable
travel distance, taking into
consideration the individual’s medical
condition. The HHS interim final rules
codify this requirement at 45 CFR
149.410(b)(1). For this purpose, a
treating provider is a physician or
health care provider who has evaluated
the individual. It is generally expected
that a treating provider with medical
training and experience related to the
individual’s specific medical condition
will determine if the individual is able
to travel using nonmedical
transportation or nonemergency medical
transportation to an available
participating provider or facility located
within a reasonable travel distance. This
determination is based on all the
relevant facts and circumstances and the
individual should be involved in the
decision-making process, if possible.
The determination by the attending
emergency physician or treating
provider is binding on the facility for
purposes of this requirement. This

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requirement is based on the
Departments’ understanding that such
provider is in the best position to make
this determination.
For individuals receiving care in or
near their plan’s or issuer’s covered
service area, as well as individuals with
coverage that uses a national network of
providers and facilities, the statutory
criterion would generally be sufficient
to ensure that an individual can freely
choose, based on their medical
condition, to receive post-stabilization
services at a participating facility or
participating provider. The additional
requirement in these interim final rules
that the individual be able to travel to
an available participating provider or
facility located within a reasonable
travel distance, taking into
consideration the individual’s medical
condition, is necessary and appropriate
to carry out the provision of the No
Surprises Act, as the requirement is
intended to address the common
situations in which an individual has
received emergency services in a
geographic region far from where any
participating providers or facilities are
located. In cases where the individual
cannot travel using nonmedical
transportation or nonemergency medical
transportation, or cases where there are
no participating facilities or
participating providers located within a
reasonable travel distance, taking into
account the individual’s medical
condition, the Departments are of the
view that individuals are unable to
provide consent freely and, therefore,
balance billing protections continue to
apply.
In addition, the Departments
recognize that an individual’s
transportation options may vary based
on the individual’s location, social risk,
and other risk factors. In cases of
underserved and geographically isolated
communities and those with social risk
factors related to income and
transportation options, individuals may
face additional barriers to obtaining
post-stabilization services without a
disruption in care. For example,
individuals may not have the ability to
pay for a taxi, may not have access to
a car, may not be able to safely take
public transit due to their medical
condition, or may not have public
transit options available. In these cases,
the net effect would be the same: The
individual would face unreasonable
travel burdens that could prevent them
from being able to consent freely to a
waiver of the otherwise applicable
balance billing protections. The
Departments expect the attending
emergency physician or treating
provider to consider such factors when

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assessing the individual’s ability to
travel to a participating provider or
facility. The Departments seek comment
on the definition of ‘‘reasonable travel
distance’’ and whether specific
standards or examples should be
provided regarding what constitutes an
unreasonable travel burden. For
example, should reasonable travel
distance take into account only mileage,
or also other factors, such as traffic or
other route conditions that might make
traveling difficult, time consuming, or
hazardous?
In contrast to situations where a
participant, beneficiary, or enrollee is
able to travel using nonmedical
transportation or nonemergency medical
transportation following stabilization, in
the event that the individual requires
medical transportation to travel,
including transportation by either
ground or air ambulance vehicle, the
individual is not in a condition to
receive notice or provide consent.
Therefore, the surprise billing
protections continue to apply to poststabilization services provided in
connection with the visit for which the
individual received emergency services.
Second, the provider or facility
furnishing post-stabilization services
must satisfy the notice and consent
criteria of section 2799B–2(d) of the
PHS Act with respect to such items and
services (which are implemented in
HHS-only interim final rules at 45 CFR
149.410(b)(2), and incorporate by
reference the criteria for notice and
consent in 45 CFR 149.420(c) through
(g)).
Third, the individual (or the
individual’s authorized representative)
must be in a condition to receive the
information in the notice described in
section 2799B–2 of the PHS Act (which
is also implemented in 45 CFR
149.410(b)(3)) and to provide informed
consent under such section, in
accordance with applicable state law.
Whether an individual is in a condition
to receive the information in the notice
is determined by the attending
physician or treating provider using
appropriate medical judgment. It is
generally expected that an attending
physician or treating provider with
medical training and experience related
to the individual’s specific medical
condition will make this determination
based on all the relevant facts and
circumstances. In addition to applying
any requirements under state law, such
medical professionals should apply the
same principles as they would when
determining if a patient is able to
provide informed consent for

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treatment.30 They should assess
whether an individual is capable of
understanding the information provided
in the notice and the implications of
consenting. Consideration must be given
to the individual’s state of mind after
receiving the emergency services and
the individual’s emotional state at the
time of consent. For example,
consideration must be given to the effect
of any alcohol or drug use by the
individual, including the use or
administration of prescribed
medications, as well as to any pain the
individual is experiencing, and the
impact of those factors on the patient’s
state of mind. If the individual is
experiencing a mental or behavioral
health episode or displaying symptoms
of a mental or behavioral health
disorder, or is impaired by a substance
abuse disorder, consideration should
also be given as to whether the
individual’s condition impairs their
ability to receive the information in the
notice and provide informed consent. In
addition, consideration must be given to
cultural and contextual factors that may
affect the informed decision-making and
consent process for members of
underserved communities, including
lack of trust arising from historical
inequities, misinformation about the
informed consent process, or barriers to
comprehension of the information given
through the informed consent process
and after the informed consent
document is signed.31 These barriers
may include accessibility, language, and
literacy barriers. In addition, the
informed consent must be obtained in a
way that adheres to all civil rights
protections cited within this
rulemaking, ensuring that all
individuals including those from
underserved, underrepresented
communities, with limited English
proficiency, and with disabilities, are
30 Ethics guidance for physicians, published by
the American Medical Association, states that
physicians should ‘‘[a]ssess the patient’s ability to
understand relevant medical information and the
implications of treatment alternatives and to make
an independent, voluntary decision’’ as part of the
process of seeking informed consent. American
Medical Association, Code of Medical Ethics
Opinion 2.1.1, available at https://www.amaassn.org/system/files/2019-06/code-of-medicalethics-chapter-2.pdf (last visited April 5, 2021). See
also Gostin, LO. Public Health Law, 217–218 (2000)
(discussing the four elements of the doctrine of
informed consent: Information, competency,
voluntariness, and specificity).
31 For a discussion of strategies to improve
informed consent processes for minority
communities, see Quinn, S.C., et al. Improving
Informed Consent with Minority Participants:
Results from Researcher and Community Surveys,
Journal of Empirical Research on Human Research
Ethics, 7(5): 44–55 (Dec. 2012).

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able to understand and freely make
informed decisions.
Consent must be made voluntarily,
meaning the individual must be able to
consent freely, without undue
influence, fraud, or duress. If poststabilization services must be provided
quickly after the emergency services are
provided, it may be challenging for the
individual or their authorized
representative to have adequate time to
make a clear-minded decision regarding
consent. Consent obtained through a
threat of restraint or immediacy of the
need for treatment is not voluntary. In
addition, the emergency physician or
treating provider should consider
whether the individual has reasonable
options regarding post-stabilization
services, transport, or service provider
or facility. The Departments are of the
view that the post-stabilization notice
and consent procedures should
generally be applied in limited
circumstances, where the individual
knowingly and purposefully seeks care
from a nonparticipating provider or
facility (such as deciding to go under
the care of a specific provider or facility
that the individual is familiar or
comfortable with), and that the process
should not be permitted to circumvent
the consumer protections in the No
Surprises Act.
Fourth, the provider or facility must
satisfy any additional requirements or
prohibitions as may be imposed under
applicable state law. These interim final
rules include this criterion recognizing
that some state laws do not permit
exceptions to state balance billing
protections, such as allowing
individuals to consent to waive
protections. Thus, states may impose
stricter standards by which poststabilization services will be exempted
from the surprise billing protections
under these interim final rules, or states
might not permit exceptions at all. This
requirement is codified in the HHS
interim final rules at 45 CFR
149.410(b)(5).
The No Surprises Act authorizes the
Departments to specify other conditions
that must be satisfied for poststabilization services to be excepted
from the definition of emergency
services for purposes of the No
Surprises Act. The Departments solicit
comments on the conditions described
earlier in this section. The Departments
also seek comment on whether there are
any additional conditions that would be
appropriate to designate under the
definition of emergency services, such
as conditions relating to coordinating
care transitions to participating
providers and facilities. The
Departments also solicit comments on

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what guidelines, beyond state laws
regarding informed consent, may be
needed to determine when an
individual is in a condition to receive
the written notice and provide consent.
For example, are standards needed to
account for individuals who are
experiencing severe pain, intoxication,
incapacitation, or dementia after being
stabilized following an emergency
medical condition?

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iii. Non-Emergency Services Performed
by Nonparticipating Providers at
Participating Health Care Facilities
Section 9816(b) of the Code, section
716(b) of ERISA, section 2799A–1(b) of
the PHS Act, and these interim final
rules, apply surprise billing protections
in the case of non-emergency services
furnished by nonparticipating providers
during a visit by a participant,
beneficiary, or enrollee at a participating
health care facility, unless the notice
and consent requirements, as specified
in these interim final rules, have been
met.
Specifically, if a group health plan, or
a health insurance issuer offering group
or individual health insurance coverage,
provides or covers benefits with respect
to items and services (other than
emergency services to which section
9816(a) of the Code, section 716(a) of
ERISA, or section 2799A–1(a) of the
PHS Act applies), the plan or issuer
must cover such items and services
furnished to a participant, beneficiary,
or enrollee of the plan or coverage by a
nonparticipating provider with respect
to a visit at a participating health care
facility in accordance with these interim
final rules, including the requirements
regarding cost sharing, payment
amounts, and processes for resolving
billing disputes described elsewhere in
this preamble.
iv. Health Care Facilities
These interim final rules, consistent
with section 9816(b)(2)(A) of the Code,
section 716(b)(2)(A) of ERISA, and
section 2799A–1(b)(2)(A) of the PHS
Act, define a participating health care
facility, in the context of non-emergency
services, as a health care facility that has
a contractual relationship directly or
indirectly with a group health plan or
health insurance issuer offering group or
individual health insurance coverage
setting forth the terms and conditions
on which a relevant item or service is
provided to a participant, beneficiary, or
enrollee under the plan or coverage,
respectively. These interim final rules
also specify that a single case agreement
between a health care facility and a plan
or issuer, used to address unique
situations in which a participant,

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beneficiary, or enrollee requires services
that typically occur out-of-network
constitutes a contractual relationship for
purposes of this definition, and is
limited to the parties to the agreement
with respect to the particular individual
involved. Thus, when non-emergency
services are furnished by a
nonparticipating provider at a health
care facility that has a single case
agreement in place with respect to the
individual being treated, as opposed to
an agreement or contract that would
apply to all the plan’s or issuer’s
participants, beneficiaries, or enrollees,
those non-emergency services would be
subject to the protections described in
26 CFR 54.9816–5T, 29 CFR 2590.716–
5, and 45 CFR 149.120, as applicable,
and the corresponding requirements on
providers at 45 CFR 149.420. The
Departments are of the view that it is
reasonable that an individual would
expect items and services delivered at a
health care facility that has a single case
agreement in place with respect to the
individual’s care to be delivered on an
in-network basis. Thus, these interim
final rules apply the same protections in
this circumstance as would apply at
health care facilities that participate in
the plan or issuer’s network.32 The
facility is considered a participating
facility only with respect to items and
services furnished to the individual
whose care is covered by the single case
agreement. Similarly, these interim final
rules define a participating emergency
facility to include a facility that has a
single case agreement in place with a
plan or issuer with respect to a specific
individual’s care. The Departments seek
comment on this approach.
For this purpose, a health care facility
described in the statute is each of the
following, in the context of nonemergency services: (1) A hospital (as
defined in 1861(e) of the Social Security
Act); (2) a hospital outpatient
department; (3) a critical access hospital
(as defined in section 1861(mm)(1) of
the Social Security Act); or (4) an
ambulatory surgical center described in
section 1833(i)(1)(A) of the Social
Security Act.
In addition, section
9816(b)(2)(A)(ii)(V) of the Code, section
716(b)(2)(A)(ii)(V) of ERISA, and section
2799A–1(b)(2)(A)(ii)(V) of the PHS Act
authorize the Departments to designate
additional facilities as health care
facilities. The Departments solicit
comments on other facilities that would
be appropriate to designate as health
32 In contrast, as discussed in section III.B.2.vi of
this preamble, these interim final rules do not
include negotiated rates under single-case
agreements in the methodology for calculating the
qualifying payment amount.

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care facilities. The Departments are
interested in comments identifying
types of facilities in which surprise bills
frequently arise, and are particularly
interested in comments regarding
whether urgent care centers or retail
clinics should be designated as health
care facilities for purposes of these
interim final rules.
The Departments recognize that state
regulation of urgent care centers varies
significantly, as does the type of
services they are permitted to provide
under state law. Under these interim
final rules, emergency services provided
at urgent care centers that are licensed
in a manner that brings them within the
definition of independent freestanding
emergency department would be subject
to cost-sharing and balance billing
protections, among others. However,
given significant variation in state law
definitions, urgent care centers are not
included within the definition of health
care facilities, in the context of nonemergency services. Thus, in cases
where non-emergency services are
furnished at participating urgent care
centers by nonparticipating providers,
those services would not receive the
protections under these interim final
rules. However, the Departments are of
the view that it is possible that
individuals may be using urgent care
centers (regardless of how they are
licensed) in a similar way to how they
use independent freestanding
emergency departments, in which case
it may be appropriate to designate
urgent care centers as health care
facilities. The Departments seek
comment on the degree to which
individuals may be using urgent care
centers in a similar way to how they use
independent freestanding emergency
departments. The Departments seek data
on how frequently surprise bills arise in
the context of urgent care centers. The
Departments also seek comment on
whether plans and issuers generally
contract separately with urgent care
centers and the providers who work at
the centers, and how frequently
contracting practices result in
nonparticipating providers furnishing
services at participating urgent care
centers. The Departments also seek
comment on potential definitions of the
term urgent care center.
v. Items and Services Within the Scope
of a Visit
In addition to items and services
furnished by a provider at the facility,
a ‘‘visit’’ to a participating health care
facility includes the furnishing of
equipment and devices, telemedicine
services, imaging services, laboratory
services, and preoperative and

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postoperative services, regardless of
whether the provider furnishing such
items or services is at the facility. These
services are not limited based on
whether the provider furnishing the
services is physically located at the
facility. For example, if a sample is
collected during an individual’s
hospital visit and sent to an off-site
laboratory, the laboratory services
would be considered to be part of the
individual’s visit to a participating
health care facility, if laboratory services
are covered by the plan or coverage.
Similarly, if an individual receives a
consultation with a specialist via
telemedicine during a visit to a
participating hospital, those
telemedicine services would be
considered part of the individual’s visit
to a participating health care facility.
The statutory definition of ‘‘visit’’ also
provides authority for the Departments
to specify other items and services. The
Departments solicit comments regarding
other items and services that would be
appropriate to include within the scope
of a visit for purposes of these interim
final rules.
The No Surprises Act and these
interim final rules provide for
exceptions to the balance billing
prohibitions and cost-sharing
requirements if the participant,
beneficiary, or enrollee is provided a
compliant written notice and consents
to receive such services from a
nonparticipating provider at a
participating health care facility.
However, these exceptions do not apply
with respect to certain ancillary services
(in the context of non-emergency
services) and other services under
certain conditions, as discussed later in
this preamble.
vi. Air Ambulance Services
Section 105 of the No Surprises Act
added section 9817 of the Code, section
717 of ERISA, and section 2799A–2 of
the PHS Act to address surprise air
ambulance bills. These provisions apply
in the case of a participant, beneficiary,
or enrollee who receives services from
a nonparticipating provider of air
ambulance services, meaning medical
transport by a rotary-wing air
ambulance, as defined in 42 CFR
414.605, or fixed-wing air ambulance, as
defined in 42 CFR 414.605. These
interim final rules apply these
provisions where a plan or coverage
generally has a network of participating
providers and provides or covers any
benefits for air ambulance services, even
if the plan or coverage does not have in
its network any providers of air
ambulance services. With respect to air
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nonparticipating providers (including
inter-facility transports), plans and
issuers must comply with the
requirements regarding cost sharing,
payment amounts, and processes for
resolving billing disputes described
elsewhere in this preamble, if such
services would be covered if provided
by a participating provider with respect
to such plan or coverage.
2. Determination of the Cost-Sharing
Amount and Payment Amount to
Providers and Facilities
i. In General
Under section 9816(a) of the Code,
section 716(a) of ERISA, section 2799A–
1(a) of the PHS Act, and these interim
final rules, if a plan or issuer provides
or covers any benefits with respect to
services in an emergency department of
a hospital or with respect to emergency
services in an independent freestanding
emergency department, the cost-sharing
requirement for such services performed
by a nonparticipating provider or
nonparticipating emergency facility
must not be greater than the
requirement that would apply if such
services were provided by a
participating provider or a participating
emergency facility. Additionally, if a
plan or issuer provides or covers any
benefits for non-emergency items and
services furnished by a nonparticipating
provider with respect to a visit at a
participating health care facility, unless
the provider has satisfied certain notice
and consent criteria with respect to such
items and services, the plan or issuer
may not impose a cost-sharing
requirement for such items and services
that is greater than the cost-sharing
requirement that would apply had such
items or services been furnished by a
participating provider. Similarly, if a
plan or issuer provides or covers
benefits for air ambulance services, the
plan or issuer must cover such services
from a nonparticipating provider in
such a manner that the cost-sharing
requirement with respect to such
services must be the same requirement
that would apply if such services were
provided by a participating provider.
For example, if a plan or issuer imposes
a 20 percent coinsurance rate for
emergency services from participating
providers or participating emergency
facilities, the plan or issuer may not
impose a coinsurance rate on emergency
services from nonparticipating
providers or facilities that exceeds 20
percent. Stakeholders have reported that
network participation rates are low
among providers of air ambulance
services. In instances where a plan or
issuer does not have an established cost-

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sharing requirement that applies
specifically to participating providers,
the plan or issuer must calculate the
cost-sharing amount using the generally
applicable cost-sharing requirement for
the relevant item or service under the
plan or coverage.
Under sections 9816(a) and (b) and
9817(a) of the Code, sections 716(a) and
(b) and 717(a) of ERISA, sections
2799A–1(a) and (b) and 2799A–2(a) of
the PHS Act, and these interim final
rules, any cost-sharing payments for
emergency services, non-emergency
services furnished by a nonparticipating
provider in a participating health care
facility, and air ambulance services
furnished by a nonparticipating
provider must be counted toward any
in-network deductible or out-of-pocket
maximums applied under the plan or
coverage (including the annual
limitation on cost sharing under section
2707(b) of the PHS Act) (as applicable),
respectively (and these in-network
deductibles and out-of-pocket
maximums must be applied) in the same
manner as if such cost-sharing payments
were made with respect to services
furnished by a participating provider or
facility.
ii. Cost-Sharing Amount
Section 9816(a)(1)(C)(iii) of the Code,
section 716(a)(1)(C)(iii) of ERISA,
section 2799A–1(a)(1)(C)(iii) of the PHS
Act, and these interim final rules also
specify that for emergency services
furnished by a nonparticipating
emergency facility, and for nonemergency services furnished by
nonparticipating providers in a
participating health care facility, cost
sharing is generally calculated as if the
total amount that would have been
charged for the services by a
participating emergency facility or
participating provider were equal to the
recognized amount for such services, as
defined by the statute and in these
interim final rules.
The ‘‘recognized amount’’ is: (1) An
amount determined by an applicable
All-Payer Model Agreement under
section 1115A of the Social Security
Act; (2) if there is no applicable AllPayer Model Agreement, an amount
determined by a specified state law; or
(3) if there is no applicable All-Payer
Model Agreement or specified state law,
the lesser of the amount billed by the
provider or facility or the QPA, which
under these interim final rules generally
is the median of the contracted rates of
the plan or issuer for the item or service
in the geographic region.
By requiring plans and issuers to
calculate the cost-sharing amount using
the recognized amount, rather than the

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amount the plan or issuer ultimately
pays the nonparticipating provider or
nonparticipating emergency facility for
the furnished items or services, the No
Surprises Act and these interim final
rules limit the effect of provider-payer
disputes about payment amounts on
participant, beneficiary, or enrollee cost
sharing. Under the statute and these
interim final rules, the provider or
facility and plan or issuer separately
determine the total payment amount for
the furnished items or services, but that
amount generally does not affect the
cost-sharing amount the individual
must pay.
The Departments are aware that there
may be some instances where a
nonparticipating health care provider or
facility might bill a plan or issuer for an
item or service that is subject to these
surprise billing protections in an
amount less than the QPA. For example,
this might be a relatively common
occurrence for items whose patent
expires after 2019, in instances where
the QPA is based off the median of the
contracted rates from 2019. In these
instances, assuming the plan or issuer
would not pay more than the billed
charge, calculating cost sharing based
on the QPA would require a participant,
beneficiary, or enrollee to pay a higher
percentage in cost sharing than if the
items or services had been furnished by
a participating provider. However,
section 9816(a)(1)(C)(ii) of the Code,
section 716(a)(1)(C)(ii) of ERISA, and
section 2799A–1(a)(1)(C)(ii) of the PHS
Act expressly prohibit plans and issuers
from applying a cost-sharing
requirement that is greater than the
requirement that would apply if such
services were provided by a
participating provider or a participating
emergency facility. Therefore, under
these interim final rules, in
circumstances where a specified state
law or All-Payer Model Agreement does
not apply to determine the cost-sharing
amount, cost sharing must be based on
the lesser of the QPA or the amount
billed by the provider for the item or
service. The different methods for
determining the recognized amount are
discussed in separate sections of this
section III.B.2 of this preamble.
With respect to air ambulance
services furnished by nonparticipating
providers, the recognized amount is not
used for purposes of determining cost
sharing. Rather, the statute specifies that
the cost-sharing requirement with
respect to such services must be the
same requirement that would apply if
such services were provided by a
participating provider, and any
coinsurance or deductible must be
based on rates that would apply for such

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services if they were furnished by a
participating provider. These interim
final rules require that plans and issuers
base any coinsurance and deductible for
air ambulance services provided by a
nonparticipating provider on the lesser
of the QPA or the billed amount. The
Departments have concluded that this
policy is consistent with the statute’s
general intent to protect participants,
beneficiaries, and enrollees from
excessive bills, and to remove the
individuals as much as possible from
disputes between plans and issuers and
providers of air ambulance services. In
addition, using the QPA is one method
of ensuring that any coinsurance or
deductible is based on rates that would
apply for the services if they were
furnished by a participating provider,
given that the QPA is generally based on
median contracted rates, as opposed to
rates charged by nonparticipating
providers, and is one basis used for
determining the cost-sharing amount in
the context of emergency services and
items and services furnished by
nonparticipating providers at
participating health care facilities.
As discussed in this preamble, the
Airline Deregulation Act of 1978 (ADA)
broadly preempts state laws that relate
to air ambulance providers, and the
Departments are unaware of any
instances in which an All-Payer Model
Agreement or a specified state law
might apply. In addition, since an AllPayer Model Agreement or a specified
state law would not need to follow an
approach based on rates that would
apply for such services if they were
furnished by a participating provider
(for example, Medicare rates could be
used instead), it is the Departments’
view that Congress did not intend to
apply the concept of the recognized
amount to nonparticipating providers of
air ambulance services. The
Departments seek comment on any
potential alternate approaches for
calculating the cost-sharing amount for
air ambulance services furnished by
nonparticipating providers of air
ambulance services.
iii. Out-of-Network Rate
In addition to establishing
requirements related to cost sharing, the
No Surprises Act and these interim final
rules also establish requirements related
to the total amount paid by a plan or
issuer for items and services subject to
these provisions, referred to as the outof-network rate. The plan or issuer must
make a total payment equal to one of the
following amounts, less any cost sharing
from the participant, beneficiary, or
enrollee: (1) An amount determined by
an applicable All-Payer Model

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Agreement under section 1115A of the
Social Security Act; (2) if there is no
such applicable All-Payer Model
Agreement, an amount determined by a
specified state law; (3) in the absence of
an applicable All-Payer Model
Agreement or specified state law, if the
plan or issuer and the provider or
facility have agreed on a payment
amount, the agreed on amount; or (4) if
none of those three conditions apply,
and the parties enter into the IDR
process and do not agree on a payment
amount before the date when the IDR
entity makes a determination of the
amount, the amount determined by the
IDR entity. These four approaches for
determining the out-of-network rate are
discussed more fully later in this
preamble.
The requirements related to cost
sharing and to the out-of-network rate
apply when a group health plan or
coverage provides or covers benefits for
services subject to these provisions. The
Departments interpret this to mean that
the requirements apply when a plan or
issuer provides coverage for such items
and services, pursuant to the terms of
the plan or coverage, even in cases
where an individual has not satisfied
their deductible.33 Because the costsharing amount is calculated using the
recognized amount (or for air ambulance
services the lesser of the QPA or the
billed amount) that is calculated
separately from the determination of the
out-of-network rate, these requirements
may result in circumstances where a
plan or issuer must make payment prior
to an individual meeting their
deductible. Specifically, where the
surprise billing protections apply, and
the out-of-network rate exceeds the
amount upon which cost sharing is
based, a plan or issuer must pay the
provider or facility the difference
between the out-of-network rate and the
cost-sharing amount (the latter of which
in this case would equal the recognized
amount, or the lesser of the QPA or the
billed amount), even in cases where an
individual has not satisfied their
deductible, as illustrated in the
following example.
Example. An individual is enrolled in
a high deductible health plan with a
$1,500 deductible and has not yet
accumulated any costs towards the
deductible at the time the individual
receives emergency services at an outof-network facility. The plan determines
that the recognized amount for the
services is $1,000. Because the
33 Absent the balance billing protections under
the No Surprises Act and these interim final rules,
the plan or issuer would not generally be expected
to make a payment to the provider or facility prior
to an individual satisfying the deductible.

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individual has not satisfied the
deductible, the individual’s cost-sharing
amount is $1,000, which accumulates
towards the deductible. The out-ofnetwork rate is subsequently
determined to be $1,500. Under the
requirements of the statute and these
interim final rules, the plan is required
to pay the difference between the outof-network rate and the cost-sharing
amount. Therefore, the plan pays $500
for the emergency services, even though
the individual has not satisfied the
deductible. The individual’s out-ofpocket costs are limited to the amount
of cost-sharing originally calculated
using the recognized amount (that is,
$1,000).
Although such a payment would
generally cause a high deductible health
plan to lose its status as a high
deductible health plan, the No Surprises
Act added section 223(c)(2)(F) to the
Code to specify that a plan shall not fail
to be treated as a high deductible health
plan by reason of providing benefits for
medical care in accordance with section
9816 or 9817 of the Code, section 716
or 717 of ERISA, or section 2799A–1 or
2799A–2 of the PHS Act (the provisions
added by the No Surprises Act related
to surprise medical and air ambulance
bills), or any state law providing similar
protections to individuals, prior to the
satisfaction of the deductible.34

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iv. Specified State Law
Under section 9816(a)(3)(I) of the
Code, section 716(a)(3)(I) of ERISA,
section 2799A–1(a)(3)(I) of the PHS Act,
and these interim final rules, a specified
state law is a state law that provides a
method for determining the total
amount payable under a group health
plan or group or individual health
insurance coverage to the extent the
state law applies. This includes
instances where the Departments have
interpreted this term to include state
laws where the state law applies
because the state has allowed a plan that
is not otherwise subject to applicable
state law an opportunity to opt in to a
program established under state law,
subject to section 514 of ERISA, for an
item or service furnished by a
nonparticipating provider or
nonparticipating emergency facility. In
cases where a specified state law
applies, the recognized amount (the
amount upon which cost sharing is
based) and out-of-network rate for
emergency and non-emergency services
subject to the surprise billing

protections is calculated based on such
specified state law.
In order for a state law to determine
the recognized amount or out-ofnetwork rate, any such law must apply
to: (1) The plan, issuer, or coverage
involved, including where a state law
applies because the state has allowed a
plan that is not otherwise subject to
applicable state law an opportunity to
opt in, subject to section 514 of ERISA;
(2) the nonparticipating provider or
nonparticipating emergency facility
involved (and in the case of state outof-network rate laws, the
nonparticipating provider of air
ambulance services involved); and (3)
the item or service involved. In
instances where a state law does not
satisfy all of these criteria, the state law
does not apply to determine the
recognized amount or out-of-network
rate. For example, where a particular
state surprise billing law that governs
the recognized amount and out-ofnetwork rate applies to a particular plan
or coverage but does not apply to
nonparticipating neonatologists, who
provide a specified ancillary service
under section 2799B–2(b)(2) of the PHS
Act, the consumer protections under
federal law would determine the
recognized amount and out-of-network
rate with respect to neonatology services
while the state law would apply with
respect to other provider specialties
covered under that state law. Similarly,
where a state’s surprise billing laws
apply only to health maintenance
organizations (HMOs), federal
protections against surprise billing
would govern with respect to other
types of coverage while the state
protections would apply to HMOs for
purposes of determining the recognized
amount and out-of-network rate.
The same definition of ‘‘out-ofnetwork rate’’—including the reference
to specified state laws—applies to air
ambulance services as to other services.
The Departments note, however, that
the ADA states in relevant part: ‘‘. . . a
State, political subdivision of a State, or
political authority of at least 2 States
may not enact or enforce a law,
regulation, or other provision having the
force and effect of law related to a price,
route, or service of an air carrier that
may provide air transportation under
this subpart.’’ 35 Assuming that a
provider of air ambulance services is an
‘‘air carrier’’ covered by this provision,
as is typical,36 the provision preempts
35 49

34 See

section IV.A.5 of this preamble for a
discussion of HHS-only interim final rules
addressing catastrophic plans’ compliance with
these requirements.

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U.S.C. 41713(b).
air ambulance provider is a covered ‘‘air
carrier’’ if it has economic authority from the
Department of Transportation to provide interstate
air transportation. Most air ambulance providers
36 An

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state laws that would limit the amount
of payment that the provider of air
ambulance services would otherwise be
entitled to receive.37 Given the
applicability of the ADA, the
Departments are not aware of any state
laws that would meet the criteria to set
the out-of-network rate for
nonparticipating providers of air
ambulance services when providing
services subject to the protections in the
No Surprises Act.
The Departments also seek comment
on whether health insurance issuers,
health care providers, or health care
facilities, in instances where they are
not otherwise subject to a specified state
law that provides for a method for
determining the total amount payable
under a group health plan or group or
individual health insurance coverage,
should have an opportunity, for
purposes of these interim final rules, to
opt in to a program established under
state law, with respect to an item or
service furnished by a nonparticipating
provider or nonparticipating emergency
facility. The Departments seek comment
on whether this approach would allow
for more flexibility for state laws to
apply when, for example, by their terms,
they apply to the health insurance
issuer and item and service in question,
but not to the provider; whether an
issuer, provider, or facility would still
be subject to any specified state laws in
their ‘‘home’’ state if they opt in to a
program established under another
state’s law; and whether an issuer,
provider, or facility should be permitted
to opt in on an episodic basis. The
Departments are concerned that
allowing providers and facilities to opt
in to a program established under state
law could increase health care prices if
providers and facilities selectively opt
in to state programs that favor providers
and facilities in the determination of the
out-of-network rate. The Departments
seek comment on the potential impact
of expanding the ability to opt in to a
state program to providers and facilities.
The Departments specifically seek
comment from health insurance issuers,
health care providers, or health care
facilities located within or serving
have such authority under the provisions of 14 CFR
part 298. See, e.g., Scarlett v. Air Methods Corp.,
922 F.3d 1053 (10th Cir. 2019); Air Evac EMS v.
Cheatham, 910 F.3d 751 (4th Cir. 2018).
37 See, e.g., Guardian Flight LLC v. Godfread, 991
F.3d 916, 921 (8th Cir. 2021) (holding that ADA
preempted state law prohibiting out-of-network air
ambulance providers from balance billing and
requiring them to accept amounts paid by insurers);
Bailey v. Rocky Mountain Holdings, LLC, 889 F.3d
1259, 1269–72 (11th Cir. 2018) (holding that ADA
preempted state law that prohibited air ambulance
providers from collecting more than amount
specified in fee schedule).

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underserved and rural communities,
and other communities facing a shortage
of providers on the impact of these
provisions on services, coverage, and
payment for and within medically
underserved, rural, and urban
communities.
a. State Law Interaction With ERISA
Under the general preemption clause
of section 514(a) of ERISA, state laws
are preempted to the extent that they
‘‘relate’’ to employee benefit plans
subject to title I of ERISA. There are,
however, a number of exceptions to this
broad preemption provision. Section
514(b)(2)(A), referred to as the ‘‘savings
clause,’’ provides in pertinent part that
‘‘nothing in this title (title I of ERISA)
shall be construed to exempt or relieve
any person from any law of any State
which regulates insurance. . . .’’
Additionally, the preemption provisions
of section 731 of ERISA (implemented
in 29 CFR 2590.731(a)) apply so that the
requirements of part 7 of ERISA are not
to be ‘‘construed to supersede any
provision of state law which establishes,
implements, or continues in effect any
standard or requirement solely relating
to issuers in connection with group
health insurance coverage except to the
extent that such standard or
requirement prevents the application of
a ‘requirement’ of a federal standard.’’
The conference report accompanying
the Health Insurance Portability and
Accountability Act of 1996 (HIPAA),
which applied this preemption standard
to state laws with respect to its title I
health insurance reform provisions,
indicates that this preemption is
intended to be the ‘‘narrowest’’
preemption of states’ laws.38 States may
therefore continue to apply state law
requirements to issuers except to the
extent they prevent the application of
ERISA requirements. Additionally,
states have significant latitude to
impose requirements on issuers that are
more restrictive than the federal law.
State laws that impose comparable or
additional requirements on health
insurance issuers would generally
constitute a ‘‘specified state law’’
notwithstanding section 514 of ERISA
and would continue to apply.
While section 514(b)(2)(A) saves from
ERISA preemption state laws regulating
insurance, section 514(b)(2)(B) of
ERISA, referred to as the ‘‘deemer
clause,’’ provides that a state law
‘‘purporting to regulate insurance’’
generally cannot deem an employee
benefit plan to be an insurance company
38 See House Conf. Rep. No. 104–736, at 205,
reprinted in 1996 U.S. Code Cong. & Admin. News
2018.

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(or in the business of insurance) for the
purpose of regulating such a plan as an
insurance company (section
514(b)(6)(A) creates a partial exception
to the deemer clause for employee
welfare benefit plans that are also
multiple employer welfare arrangements
(MEWAs)). Thus, to the extent that a
state law has a ‘‘reference to’’ or an
impermissible connection with ERISA
plans (such as laws that govern the
payment of benefits), these laws are
preempted, to the extent they apply to
self-insured plans sponsored by private
employers.39 However, section 514 of
ERISA does not prevent states from
expanding access to a state program and
allowing self-insured, ERISA-covered
plans to choose to voluntarily comply
with it. For example, the Departments
allowed such plans to comply with their
obligations for external review under
section 2719 of the PHS Act by
voluntarily opting in to the state
external review process.40 Similarly,
these interim final rules allow selfinsured plans (including non-federal
governmental plans) to voluntarily opt
in to state law that provides for a
method for determining the cost-sharing
amount or total amount payable under
such a plan, where a state has chosen to
expand access to such plans, to satisfy
their obligations under section 9816(a)–
(d) of the Code, section 716(a)–(d) of
ERISA, and section 2799A–1(a)–(d) of
the PHS Act. A group health plan that
opts in to such a state law must do so
for all items and services to which the
state law applies. Under these interim
final rules, a self-insured plan that has
chosen to opt in to a state law must
prominently display in its plan
materials describing the coverage of outof-network services a statement that the
plan has opted in to a specified state
law, identify the relevant state (or
states), and include a general
description of the items and services
provided by nonparticipating facilities
and providers that are covered by the
specified state law.
b. Examples Involving Specified State
Laws
The following examples illustrate
how state laws may or may not apply.
In each example, assume there is no
applicable All-Payer Model Agreement
that would determine the recognized
amount or out-of-network rate.
Example 1. (i) Facts. A health
insurance issuer licensed in State A
covers a specific non-emergency service
39 See Gobeille v. Liberty Mutual Ins. Co. 577 U.S.
312 (2015); Egelhoff v. Egelhoff, 532 U.S. 141
(2001).
40 See, e.g., Technical Release 2010–01; 76 FR
37208, 37211 fn. 13 (June 24, 2011).

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that is provided to an enrollee by a
nonparticipating provider in a
participating health care facility, both of
which are also licensed in State A. State
A has a law that prohibits balance
billing for non-emergency services
provided to individuals by
nonparticipating providers in a
participating health care facility, and
provides for a method for determining
the cost-sharing amount and total
amount payable. The state law applies
to health insurance issuers and
providers licensed in State A. The state
law also applies to the type of service
provided.
(ii) Conclusion. In this Example 1,
State A’s law would apply to determine
the recognized amount and the out-ofnetwork rate.
Example 2. (i) Facts. Same facts as
Example 1, except that the
nonparticipating provider and
participating health care facility are
located and licensed in State B. State
A’s law does not apply to the provider,
because the provider is licensed and
located in State B.
(ii) Conclusion. In this Example 2,
State A’s law would not apply to
determine the recognized amount and
out-of-network rate. Instead, the lesser
of the billed amount or QPA would
apply to determine the recognized
amount, and either an amount
determined through agreement between
the provider and issuer or an amount
determined by an IDR entity would
apply to determine the out-of-network
rate.
Example 3. (i) Facts. An individual
receives emergency services at a
nonparticipating hospital located in
State A. The emergency services
furnished include post-stabilization
services, as described in 26 CFR
54.9816–4T(c)(2)(ii), 29 CFR 2590.716–
4(c)(2)(ii), and 45 CFR 149.110(c)(2)(ii).
The individual’s coverage is through a
health insurance issuer licensed in State
A, and the coverage includes benefits
with respect to services in an emergency
department of a hospital. State A has a
law that prohibits balance billing for
emergency services provided to an
individual at a nonparticipating hospital
located in State A and provides a
method for determining the cost-sharing
amount and total amount payable in
such cases. The law applies to issuers
licensed in State A. However, State A’s
law has a definition of emergency
services that does not include poststabilization services.
(ii) Conclusion. In this Example 3,
State A’s law would apply to determine
the cost-sharing amount and out-ofnetwork rate for the emergency services,
as defined under State A’s law. State A’s

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law would not apply for purposes of
determining the cost-sharing amount
and out-of-network rate for the poststabilization services. Instead, the lesser
of the QPA or billed amount would
apply to determine the recognized
amount, and either an amount
determined through agreement between
the hospital and issuer or an amount
determined by an IDR entity would
apply to determine the out-of-network
rate, with respect to post-stabilization
services.
Example 4. (i) Facts. A self-insured
plan, subject to ERISA, covers a specific
non-emergency service that is provided
to a participant by a nonparticipating
provider in a participating health care
facility, both of which are licensed in
State A. State A has a law that prohibits
balance billing for non-emergency
services provided to individuals by
nonparticipating providers in a
participating health care facility, and
provides for a method for determining
the cost-sharing amount and total
amount payable. The law applies to
health insurance issuers and providers
licensed in State A, and provides that
plans that are not otherwise subject to
the law may opt in. The law also applies
to the type of service provided. The selfinsured plan has opted in.
(ii) Conclusion. In this Example 4,
State A’s law would apply to determine
the recognized amount and the out-ofnetwork rate.
The Departments are of the view that
it would be uncommon for laws of more
than one state to each apply to the same
health insurance issuer, and to the same
provider for a particular item or service.
Therefore, the Departments do not
foresee many instances where there
might be a question as to which state’s
law applies to determine the recognized
amount or out-of-network rate.
However, in such uncommon scenarios,
one approach might be for the states
involved to make that decision. Another
approach might be that the law enacted
by the state in which the service is
provided would apply. Yet another
approach would be for the QPA to apply
to determine the recognized amount,
and either a negotiated amount or an
amount determined by an IDR entity to
apply to determine the out-of-network
rate. The Departments seek comment on
these and any other approaches for
resolving this choice-of-law question.
The Departments also seek comment on
how states have handled such questions
prior to the enactment of the No
Surprises Act, should these types of
conflicts exist.
The Departments are of the view that
Congress intended that where state law
provides a method for determining the

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total amount payable under a plan or
coverage, the state law regarding
balance billing would govern, rather
than the alternative method for
determining the out-of-network rate
under the No Surprises Act. The
Departments interpret the statutory
phrase ‘‘a State law that provides for a
method for determining the total
amount payable under such a plan,
coverage, or issuer, respectively’’
broadly as referring not only to state
laws that set a mathematical formula for
determining the out-of-network rate, or
that set a predetermined amount for an
out-of-network item or service. Rather,
the Departments interpret that language
to also include, for example, state laws
that require or permit a plan or issuer
and a provider or facility to negotiate,
and then to engage in a state arbitration
process to determine the out-of-network
rate. Such state laws provide a process
for determining the total amount
payable, and in such instances, the
timeframes and processes under such a
state law related to negotiations and
arbitration would apply, as opposed to
the timeframes and IDR process under
the No Surprises Act.
In addition, the Departments are of
the view that Congress did not intend
for the No Surprises Act to preempt
provisions in state balance billing laws
that address issues beyond how to
calculate the cost-sharing amount and
out-of-network rate. To the extent state
laws do not prevent the application of
a federal requirement or prohibition on
balance billing, the Departments are of
the view that such state laws are
consistent with the statutory framework
of the No Surprises Act and would not
be preempted.41 This view extends to
any state law that provides balance
billing protections beyond what these
interim final rules provide. In fact,
Congress specifically indicated that
such state balance billing laws may
continue in effect along with the
balance billing protections set forth in
the statute, by requiring in new section
2799B–3 of the PHS Act that providers
must disclose to participants,
beneficiaries, and enrollees information
about federal balance billing
protections, plus any other protections
that apply under state law. A more
detailed discussion of the disclosure
requirements appears in section IV.A.3

of this preamble, which discusses the
provisions codified in 45 CFR 149.430.

41 Section 731(a) of ERISA and section 2724(a) of
the PHS Act. As noted above, the HIPAA
conference report indicates that this preemption
standard is intended to be the ‘‘narrowest’’
preemption of states’ laws. See House Conf. Rep.
No. 104–736, at 205, reprinted in 1996 U.S. Code
Cong. & Admin. News 2018.

42 See, e.g., CMS. Vermont All-Payer ACO Model,
(updated Apr. 8, 2020) available at https://
innovation.cms.gov/innovation-models/vermont-allpayer-aco-model; CMS. Pennsylvania Rural Health
Model, (updated Jan. 1, 2021) available at https://
innovation.cms.gov/innovation-models/pa-rural-

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v. All-Payer Model Agreements
As described earlier, in instances
where an All-Payer Model Agreement is
applicable, the recognized amount (the
amount upon which cost sharing is
based with respect to items and services
furnished by nonparticipating
emergency facilities, and
nonparticipating providers of
nonemergency items and services in
participating facilities) and the out-ofnetwork rate are determined using the
amount that the state approves under
the All-Payer Model Agreement for such
items or services.
An All-Payer Model Agreement is an
agreement between the Centers for
Medicare & Medicaid Services (CMS)
and a state to test and operate systems
of all-payer payment reform for the
medical care of residents of the state,
under the authority granted under
section 1115A the Social Security Act.
Under the terms of section 1115A of the
Social Security Act, such Agreements
may waive specific provisions of titles
XI and XVIII and of sections 1902(a)(1),
1902(a)(13), 1903(m)(2)(A)(iii), and 1934
(other than subsections (b)(1)(A) and
(c)(5) of such section) as may be
necessary solely for the purposes of
testing the Model. All-Payer Model
Agreements can vary significantly by
state, including in using different
approaches for approving payment
amounts for items or services covered
by the Agreements. The Departments are
of the view that it is important to
maximally preserve states’ abilities to
test all-payer payment reform through
these Agreements, including their
abilities to do so using varied
approaches to setting payment amounts.
These interim final rules defer to the
state to determine the circumstances
under which, and how, it will approve
an amount for an item or service under
a payment system established by an AllPayer Model Agreement. Participating
in an all-payer model governed by an
All-Payer Model Agreement may be
voluntary or mandatory for a given
payer; the system of all-payer payment
reform may apply statewide or only in
certain regions, such as rural regions;
and payments under the system of allpayer payment reform may apply only
to certain providers or facilities and
certain items and services.42 To account

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for potential variations among All-Payer
Model Agreements, the Departments are
proposing to take a similar approach
that these interim final rules establish
with respect to state laws. Specifically,
in order for an All-Payer Model
Agreement to determine the recognized
amount or out-of-network rate, any such
Agreement must apply to the coverage
involved; to the nonparticipating
provider or nonparticipating emergency
facility involved (and in the case of the
out-of-network rate, to the
nonparticipating provider of air
ambulance services involved); and to
the item or service involved. In
instances where an All-Payer Model
Agreement does not satisfy all of these
criteria, the Agreement does not apply
to determine the recognized amount or
out-of-network rate, and, unless a
specified state law applies, the
recognized amount would be
determined by the QPA (or the billed
charge if less than the QPA), and the
out-of-network rate would be the
amount determined through agreement
between the provider or facility and
plan or issuer or the IDR process.
Under these interim final rules, an
All-Payer Model Agreement is treated as
applicable to a given provider or facility
and plan or issuer if the terms of the
Agreement, or any agreements described
in that Agreement, are binding upon the
provider, facility, plan, or issuer, which
may occur through different
mechanisms. For example, under the
All-Payer Model Agreement for the
Maryland Total Cost of Care Model and
under the Maryland state all-payer law,
all payers (including group health plans
and health insurance issuers offering
group or individual health insurance
coverage) pay the amount determined
under the Agreement with respect to
hospital services covered by the
Agreement.43 However, the Agreement
generally does not apply to the amount
paid to a provider, such as a physician,
who furnishes services at a hospital. In
Maryland, therefore, the recognized
amount and out-of-network rate would
be set by the All-Payer Model
Agreement for all plans and issuers for
health-model; CMS. Maryland Total Cost of Care
Model available at https://innovation.cms.gov/
innovation-models/md-tccm.
43 See CMS. Maryland Total Cost of Care Model,
(updated Oct. 22, 2020) available at https://
innovation.cms.gov/innovation-models/md-tccm.
Under Maryland law, hospitals regulated by the
Maryland Health Services Cost Review Commission
(HSCRC) must charge payers the rates set the by
HSCRC, and payers, including group health plans
and issuers offering individual or group health
insurance, must pay the rates set by HSCRC.
Maryland Code, Health-General Article §§ 19–212
and 19–219(a)(3) and (b)(2)(i) and Maryland Code,
Insurance Article § 15–604.

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hospital charges covered under the
Agreement. But, the All-Payer Model
Agreement would generally not be used
to set the recognized amount or out-ofnetwork rate with respect to a
nonparticipating provider’s charges,
unless the All-Payer Model Agreement,
or any agreements described in that
Agreement, specify the payment amount
in a particular instance.
Although under state law plans and
issuers in Maryland do not have
discretion regarding whether to
participate in the all-payer rate setting
system under the Maryland Total Cost
of Care Model, participation in other
state-based models governed by AllPayer Model Agreements is voluntary.
For example, under the All-Payer Model
Agreement for the Vermont All-Payer
Accountable Care Organization (ACO)
Model, participation by providers,
facilities, group health plans, and health
insurance issuers is voluntary.44 To the
extent that both the provider or facility
and plan or issuer has opted to
participate in the Vermont All-Payer
ACO Model and the Vermont All-Payer
Model Agreement, or an agreement
described in that Agreement, applies to
a specific item or service, then that AllPayer Model Agreement would
determine the recognized amount and
out-of-network rate. But, for example, if
a plan has opted to participate, but the
provider furnishing the service has not,
then the All-Payer Model Agreement
would not be used to determine either
the recognized amount or out-ofnetwork rate. Instead, if a state law is
applicable, the state law would apply. If
no state law is applicable, then the
recognized amount would be
determined using the QPA,45 and the
out-of-network rate would be the
amount agreed upon by the parties or
determined through the IDR process
established in the No Surprises Act, as
discussed further elsewhere in this
preamble.
vi. Methodology for Calculating the
Qualifying Payment Amount
The No Surprises Act directs the
Departments to establish through
rulemaking the methodology that a
group health plan or health insurance
issuer offering group or individual
health insurance coverage must use to
determine the qualifying payment
amount (QPA). As discussed earlier in
this preamble, the No Surprises Act and
44 https://innovation.cms.gov/innovation-models/
vermont-all-payer-aco-model.
45 See prior explanation regarding the
requirement that when the surprise billing
protections apply, in the event the billed charge is
less than the recognized amount, cost sharing
would be based on the billed charge.

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these interim final rules require costsharing requirements imposed by plans
and issuers in connection with
emergency services furnished by a
nonparticipating emergency facility or
nonparticipating provider, or in
connection with non-emergency
services performed by nonparticipating
providers at certain participating
facilities to be based on the lesser of the
billed charge or the QPA where an AllPayer Model Agreement under section
1115A of the Social Security Act or a
specified state law does not apply. In
addition, IDR entities are directed by
statute to consider the QPA when
selecting between the offer submitted by
a plan or issuer and the offer submitted
by a facility or provider in order to
determine the total payment for
emergency services furnished by a
nonparticipating emergency facility or
nonparticipating provider, or nonemergency services performed by
nonparticipating providers at certain
participating facilities that are items and
services subject to the IDR process.
In general, under section 9816(a)(3)(E)
of the Code, section 716(a)(3)(E) of
ERISA, and section 2799A–1(a)(3)(E) of
the PHS Act, for a given item or service,
the QPA is the median of the contracted
rates recognized by the plan or issuer on
January 31, 2019, for the same or similar
item or service that is provided by a
provider in the same or similar specialty
and provided in a geographic region in
which the item or service is furnished,
increased for inflation. The median
contracted rate is determined with
respect to all group health plans of the
plan sponsor or all group or individual
health insurance coverage offered by the
health insurance issuer that are offered
in the same insurance market,
consistent with the methodology
established by the Departments.
The No Surprises Act specifies an
alternative methodology for determining
the QPA in cases where a plan or issuer
has insufficient information to calculate
a median contracted rate for an item or
service. The statute, however, envisions
that these alternative methodologies,
such as use of a third-party database,
will be used in only limited
circumstances where the plan or issuer
cannot rely on its contracted rates as a
reflection of the market dynamics in a
geographic region. Consistent with this
statutory goal, these interim final rules
generally seek to ensure that plans and
issuers can meet the sufficientinformation standard when determining
the QPA and that use of alternative
methodologies is minimized wherever
possible.
The Departments seek comment on all
aspects of the methodology established

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in these interim final rules for
determining the QPA. In particular, the
Departments seek comment on whether
there are any considerations or factors
that are not sufficiently accounted for in
the methodology established in these
interim final rules; the impact of the
methodology on cost sharing, payment
amounts, and provider network
participation; and whether there are
areas where commenters believe
additional rulemaking or guidance is
necessary. The Departments also seek
comment as to the impact of large
consolidated health care systems on
contracted rates, and the impact of such
contracted rates on prices and the QPA.
The Departments are concerned that the
contracting practices of such health care
systems could inflate the QPA, and seek
comment on whether adjustments to the
QPA methodology are needed.
a. Median Contracted Rate
These interim final rules establish the
methodology that plans and issuers
must use to calculate the median of
contracted rates. The plan or issuer will
generally then apply an inflation
adjustment to determine the QPA for
items and services furnished in the
relevant year.
In general, the median contracted rate
for an item or service is calculated by
arranging in order from least to greatest
the contracted rates of all plans of the
plan sponsor (or of the administering
entity, if applicable) or all coverage
offered by the issuer in the same
insurance market for the same or similar
item or service that is provided by a
provider in the same or similar specialty
or facility of the same or similar facility
type and provided in the geographic
region in which the item or service is
furnished, and selecting the middle
number. These interim final rules define
each of the relevant terms, as discussed
in more detail in this section of the
preamble.
In determining the median contracted
rate, the amount negotiated under each
contract is treated as a separate amount.
For example, assume the contracted
rates for all plans of a sponsor in the
same insurance market for a particular
item or service provided by a provider
in the same or similar specialty in a
specified geographic region are $475,
$490, and $510. The median contracted
rate for this service is $490. If there are
an even number of contracted rates, the
median contracted rate is the average of
the middle two contracted rates. If, in
the previous example, there were a
fourth contracted rate in the amount of
$515, the median contracted rate would
be the average of the two middle
amounts ($490 and $510), or $500

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(($490+$510)2). If the same amount is
paid under two or more separate
contracts, each contract is counted
separately. Thus, in the previous
example, if there were a fifth contracted
rate also in the amount of $515, the
median contracted rate would be $510,
since there are two contracted rates
below that amount ($475 and $490) and
two contracted rates above that amount
($515 and $515).
Contracted Rate
The interim final rules define a
‘‘contracted rate’’ as the total amount
(including cost sharing) that a group
health plan or health insurance issuer
has contractually agreed to pay a
participating provider, facility, or
provider of air ambulance services for
covered items and services, whether
directly or indirectly, including through
a third-party administrator or pharmacy
benefit manager.46
The No Surprises Act envisions that
each contracted rate for a given item or
service be treated as a single data point
when calculating a median contracted
rate. Therefore, if a plan or issuer has a
contract with a provider group or
facility, the rate negotiated with that
provider group or facility under the
contract is treated as a single contracted
rate, if the same rate applies to all
providers of such provider group or
facility under the single contract.
Likewise, the rate negotiated under a
contract constitutes a single contracted
rate regardless of the number of claims
paid at that contracted rate. However, if
a plan or issuer has a contract with
multiple providers, with separate
negotiated rates with each particular
provider for a given item or service,
each unique contracted rate constitutes
a single contracted rate for purposes of
determining the median contracted
rate.47 Further, if a plan or issuer has
separate contracts with individual
providers, the contracted rate under
each such contract constitutes a single
46 This definition is substantially similar to the
definition of ‘‘negotiated rate’’ used for purposes of
the transparency in coverage regulations at 26 CFR
54.9815–2715A1(a)(2)(xvi), 29 CFR 2590.715–
2715A1(a)(2)(xvi), and 45 CFR 147.210(a)(2)(xvi).
47 If a plan or issuer has a contract with multiple
providers, with separate negotiated rates with
several subgroups of providers, each unique
contracted rate will generally constitute a single
contracted rate for purposes of determining the
median contracted rate. However, as discussed later
in this section of the preamble, these interim final
rules specify that if a plan or issuer has contracted
rates that vary based on provider specialty for a
service code, the median contracted rate is
calculated separately for each provider specialty, as
applicable. In such cases, the QPA for the particular
item or service would take into account only the
contracted rates for the applicable provider
specialty, and would disregard other unique
contracted rates under the same contract.

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36889

contracted rate (even if the same amount
is paid to other providers under separate
contracts).
The Departments understand that
some plans or issuers may rent provider
networks or otherwise contract with
third parties to manage provider
networks. In these situations, contracted
rates between providers and the entity
responsible for managing the provider
network on behalf of a plan or issuer
would be treated as the plan’s or issuer’s
contracted rates for purposes of
calculating the QPA. The Departments
seek comment on whether additional
guidance or special rules are needed
regarding how to define a contract in
this situation.
The Departments also understand that
plans and issuers sometimes enter into
special agreements with providers and
facilities that generally are not
otherwise contracted to participate in
any of the networks of the plan or
issuer. For example, a plan or issuer
may negotiate an ad hoc arrangement
with a nonparticipating provider or
facility to supplement the network of
the plan or coverage for a specific
participant, beneficiary, or enrollee in
unique circumstances. These interim
final rules specify that solely for
purposes of the definition of contracted
rate, a single case agreement, letter of
agreement, or other similar arrangement
between a plan or issuer and a provider,
facility, or provider of air ambulance
services does not constitute a contract,
and the rate paid under such an
agreement should not be counted among
the plan’s or issuer’s contracted rates.
The term ‘‘contracted rate’’ refers only
to the rate negotiated with providers
and facilities that are contracted to
participate in any of the networks of the
plan or issuer under generally
applicable terms of the plan or coverage
and excludes rates negotiated with other
providers and facilities. The
Departments are of the view that this
definition most closely aligns with the
statutory intent of ensuring that the
QPA reflects market rates under typical
contract negotiations.48
Insurance Market
In calculating the median contracted
rate for a given item or service, the plan
48 In contrast, as discussed earlier in this
preamble, these interim final rules specify that a
single case agreement constitutes a contractual
relationship for purposes of the definition of
participating health care facility and participating
emergency facility. The Departments are of the view
that it is reasonable that an individual would expect
items and services delivered at a health care facility
that has a single case agreement in place with
respect to the individual’s care to be delivered on
an in-network basis, and therefore, that the balance
billing protections should apply.

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or issuer must take into account the
contracted rates under all group health
plans of the sponsor or all group or
individual health insurance coverage
offered by the issuer that are offered in
the same insurance market.49 The term
‘‘insurance market’’ for purposes of
these interim final rules means one of
the following: The individual market,
small group market, or large group
market (each as defined under section
2791(e) of the PHS Act). The relevant
insurance market is determined
irrespective of the state. For example, in
calculating the QPA for an item or
service furnished to an enrollee in
individual health insurance coverage,
an issuer must take into account the
contracted rates with providers or
facilities in the applicable geographic
region across the issuer’s individual
market offerings, inclusive of contracted
rates for all individual health insurance
coverage offered by the issuer in all
states in which the issuer offers
coverage in the individual market.
With respect to self-insured group
health plans, these interim final rules
define the term ‘‘insurance market’’ to
mean all self-insured group health plans
(other than account-based plans and
plans that consist solely of excepted
benefits) of the plan sponsor, or at the
option of the plan sponsor, all selfinsured group health plans
administered by the same entity
(including a third-party administrator
contracted by the plan), to the extent
otherwise permitted by law, that is
responsible for calculating the QPA on
behalf of the plan. The Departments
understand that many self-insured
group health plans are administered by
entities other than the plan sponsor
(such as a third-party administrator
contracted by the plan) that would be
responsible for calculating the QPA on
behalf of the sponsor. To reduce the
burden imposed on sponsors of selfinsured group health plans, these
interim final rules permit sponsors of
self-insured group health plans to allow
their third-party administrators to
determine the QPA for the sponsor by
calculating the median contracted rate
using the contracted rates recognized by
all self-insured group health plans
administered by the third-party
administrator (not only those of the
particular plan sponsor). Under this
approach, the Departments anticipate

there will be fewer instances where a
self-insured group health plan sponsor
will lack sufficient information to
calculate a median contracted rate for an
item or service.
The Departments seek comment on
the definition of insurance market with
respect to self-insured group health
plans and whether any contractual or
other issues may prevent an entity, such
as a third-party administrator, from
using contracted rates from the different
self-insured plans it administers to
calculate the QPA for a particular selfinsured group health plan. DOL also
seeks comment on the ability of selfinsured group health plan fiduciaries to
monitor the calculation of the QPA by
the administering entities for
compliance with the applicable
requirements (for example, by ensuring
the entities are using the correct
contracted rates).
The Departments have determined
that including rates negotiated under
other more limited forms of coverage,
such as excepted benefits, short-term,
limited-duration insurance, and
account-based plans, including health
reimbursement arrangements, could
skew the calculation of the median
contracted rate, and these forms of
coverage should not be included in the
definition of the applicable insurance
market. Furthermore, the definition of
‘‘qualifying payment amount’’ under
section 2799A–1(a)(3)(E)(i)(I) of the PHS
Act refers to individual health insurance
coverage, and the term individual health
insurance coverage, as defined under
section 2791(b)(5) of the PHS Act,
excludes short-term, limited-duration
insurance.50 Therefore, under these
interim final rules, when referring to
coverage offered by an issuer within the
same insurance market for purposes of
determining the QPA, the individual
market excludes short-term, limitedduration insurance (as defined in 26
CFR 54.9801–2, 29 CFR 2590.701–2, and
45 CFR 144.103). In addition, under
these interim final rules, all markets
exclude coverage that consists solely of
excepted benefits (as described in
section 9832 of the Code, section 733 of
ERISA, and section 2791 of the PHS
Act). While excepted benefits can be
offered in the individual or group
markets, they are exempt from the
federal insurance market reforms,51 and
Congress amended the statutory

49 The term ‘‘health insurance issuer’’ has the
meaning given the term in section 2791(b) of the
PHS Act, which, in relevant part, defines a health
insurance issuer as an entity that is licensed to
engage in the business of insurance in a state. Thus,
an issuer is the licensed entity and the contracted
rates of separate licensees under the same holding
company are not taken into account.

50 Since short-term, limited duration insurance is
not individual health insurance coverage, it is also
generally not subject to the federal individual
market reforms. See, e.g., 81 FR 75316 at 75317
(Oct. 31, 2016) and 83 FR 38212 at 38213 (Aug. 3,
2018).
51 Section 9831 of the Code, section 732 of ERISA,
and sections 2722 and 2763 of the PHS Act.

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exemption for these products to include
the additional coverage provisions
established under new Part D of title
XXVII of the PHS Act.52 Account-based
plans, including health reimbursement
arrangements as described in 26 CFR
54.9815–2711(d)(6)(i), 29 CFR
2590.715–2711(d)(6)(i), and 45 CFR
147.126(d)(6)(i), make reimbursements
subject to a maximum fixed dollar
amount for a period, such that the
benefit design of these coverage options
makes concepts related to surprise
billing and choice of health care
professionals inapplicable. Therefore,
under these interim final rules, for
purposes of calculating the QPA, all
group markets similarly exclude
coverage provided under account-based
plans.
The Departments also clarify that any
plan or coverage that is not a ‘‘group
health plan’’ or ‘‘group or individual
health insurance coverage’’ offered by a
‘‘health insurance issuer,’’ as those
terms are defined in the Code, ERISA,
and the PHS Act, such as a Medicare
Advantage or Medicaid managed care
organization plan, must also not be
included in any insurance market for
purposes of determining the QPA. This
approach is consistent with the
statutory requirement that the median
contracted rate is determined with
respect to all ‘‘group health plans’’ of
the sponsor or all ‘‘group or individual
health insurance coverage’’ offered by a
health insurance issuer in the same
insurance market.
Same or Similar Item or Service
Section 9816(a)(3)(E) of the Code,
section 716(a)(3)(E) of ERISA, section
2799A–1(a)(3)(E) of the PHS Act, and
these interim final rules provide that a
plan or issuer must calculate the median
contracted rate for an item or service
using contracted rates for the same or
similar item or service. Under the
interim final rules, the term ‘‘same or
similar item or service’’ means a health
care item or service billed under the
same service code, or a comparable code
under a different procedural code
system. Service code means the code
that describes an item or service,
including a Current Procedural
Terminology (CPT), Healthcare
Common Procedure Coding System
(HCPCS), or Diagnosis-Related Group
(DRG) code. A service code is a unique
identifier, typically consisting of a string
of numeric digits or alphanumeric
characters, that corresponds to a
standardized description, which is used
52 These amendments 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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to identify with specificity the item or
service that was furnished to a patient.
Different codes may be assigned to the
same general service on the basis of
certain variations in the provider’s
method or approach, the complexity of
the procedure or medical decisionmaking, and patient acuity level. Payers,
providers, and facilities understand
these service codes and commonly use
them for billing and paying claims
(including for both individual items and
services, and for items and services
provided under a bundled payment
arrangement). Thus, defining ‘‘same or
similar item or service’’ by service code
will make it easier for plans and issuers
to calculate the QPA, and for providers
and facilities to understand the QPA.
These interim final rules include
specific requirements to account for
modifiers (when applicable), which are
codes applied to the service code that
provide a more specific description of
the furnished item or service and that
may adjust the payment rate or affect
the processing or payment of the code
billed. For example, modifiers include
hospital revenue codes, which indicate
the department or place in the hospital
in which a procedure or treatment is
performed, as well as codes indicating
whether services or procedures were
performed by certain types of providers,
such as physician assistants, nurse
practitioners, certified registered nurse
anesthetists, or assistant surgeons. In
addition, modifiers can be used to
indicate that the work required to
provide a service in a particular
instance was significantly greater—or
significantly less—than the service
typically requires. The Departments are
of the view that it is important that the
QPA methodology account for modifiers
that affect payment rates under
contracts with participating providers
and facilities.
Under the methodology established in
these interim final rules, plans and
issuers must calculate separate median
contracted rates for CPT code modifiers
that distinguish the professional
services component (‘‘26’’) from the
technical component (‘‘TC’’). This will
result in separate median contracted
rates being calculated for services when
billed by a facility versus a provider. In
addition, where a plan’s or issuer’s
contracted rates otherwise vary based on
applying a modifier code, the plan or
issuer must calculate a separate median
contracted rate for each such service
code-modifier combination. Modifiers
that do not cause contracted rates to
vary must not be taken into account
when calculating the median contracted
rate. These rules are intended to ensure
that if a plan or issuer adjusts contracted

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rates with participating providers and
facilities based on modifier codes, those
payment adjustments are appropriately
reflected in the median contracted rate.
Provider in the Same or Similar
Specialty
These interim final rules specify that
if a plan or issuer has contracted rates
for a service code that vary based on
provider specialty, the median
contracted rate is calculated separately
for each provider specialty, as
applicable. These interim final rules
define ‘‘provider in the same or similar
specialty’’ as the practice specialty of a
provider, as identified by the plan or
issuer consistent with the plan’s or
issuer’s usual business practice. This
definition is intended to provide plans
or issuers with the flexibility necessary
to calculate the median contracted rate,
relying on their contracting practices
with participating providers. If a plan’s
or issuer’s usual business practice for
identifying a provider’s practice
specialty differs for contracting
purposes and other business needs, the
plan or issuer should use the method of
identifying the practice specialty that it
uses for contracting purposes.
The Departments considered
requiring a plan or issuer to calculate
separate median contracted rates for
every provider specialty, but concluded
that this approach would lead to more
instances in which the plan or issuer
would not have sufficient information to
calculate the QPAs using its contracted
rates. In addition, the Departments
understand that not all plans or issuers
vary contracted rates by provider
specialty, in which case requiring plans
and issuers to calculate separate median
contracted rates for each provider
specialty would increase the burden
associated with calculating the QPA
without adding specificity to the QPA.
Given that the No Surprises Act
generally relies on using contracted
rates to determine the QPA, the
Departments conclude that plans and
issuers should be required to calculate
median contracted rates separately by
provider specialty only where the plan
or issuer otherwise varies its contracted
rates based on provider specialty.
With respect to air ambulance
services, all providers of air ambulance
services (including inter-facility
transports) are considered to be a single
provider specialty for purposes of these
interim final rules. The Departments
understand that contracted rates may
vary depending on whether the air
ambulance services are provided using
a fixed-wing or rotary-wing aircraft.
However, these distinctions based on
vehicle type are accounted for in the

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QPA methodology established under
these interim final rules through the use
of service codes that are specific to
fixed-wing or rotary-wing aircraft.
Therefore, the Departments anticipate
that median contracted rates for fixedwing and rotary-wing aircraft would be
determined separately based on the
requirement under these interim final
rules that median contracted rates be
based on the contracted rates for the
same or similar item or service, and
concluded that it would be redundant to
require plans and issuers to also
calculate separate median contracted
rates on the basis of vehicle type.
The Departments also understand that
hospital-based air ambulance providers
sometimes have lower contracted rates
than independent, non-hospital-based
air ambulance providers. The
Departments, however, are of the view
that because participants, beneficiaries,
and enrollees frequently do not have the
ability to choose their air ambulance
provider, they should not be required to
pay higher cost-sharing amounts (such
as coinsurance or a deductible) solely
because the air ambulance provider
assigned to them has negotiated higher
contracted rates in order to cover its
higher costs, or because it has a different
revenue model, than other types of air
ambulance providers. This approach is
consistent with the approach these
interim final rules take with respect to
facilities, discussed in the following
section of this preamble, which also
generally does not provide for separate
median contracted rates to be calculated
based on characteristics of a particular
facility. The Departments have
concluded that this interpretation is
consistent with the statute’s intent to
protect individuals from surprise
medical bills.
Facility of the Same or Similar Facility
Type
If a plan or issuer has contracted rates
for emergency services that vary based
on the type of facility (that is, whether
a facility is an emergency department of
a hospital or an independent
freestanding emergency department),
the median contracted rate is calculated
separately for each such facility type.
Plans and issuers subject to the
protections in the No Surprises Act are
required to cover emergency services at
both types of facilities. However, the
Departments are aware that plans and
issuers have not typically contracted
with independent freestanding
emergency departments, which may be
a reflection of independent freestanding
emergency departments’ historical
ability (prior to the enactment of the No
Surprises Act) to charge higher rates for

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services furnished on an out-of-network
basis, and to balance bill enrollees when
the charges were denied in part or in
full.53 The Departments are also aware
that there may be appreciable
differences in the case-mix and level of
patient acuity between these types of
facilities.54 Therefore, where a plan or
issuer has established contracts with
both hospital emergency departments
and independent freestanding
emergency departments, and its
contracts vary the payment rate based
on the facility type, the median
contracted rate is to be calculated
separately for each facility type. The
Departments are of the view that this
approach will maintain the ability of
plans and issuers to develop QPAs that
are appropriate to the different types of
emergency facilities specified by statute.
The Departments seek comment on this
approach, and whether it would be
more appropriate for plans and issuers
to always calculate separate QPAs for
hospital emergency departments and
independent freestanding emergency
departments regardless of whether the
plan or issuer varies the payment rate
based on facility type, or whether a plan
or issuer should never calculate separate
QPAs for hospital emergency
departments and independent
freestanding emergency departments.
However, these interim final rules do
not allow plans or issuers to separately
calculate a median contracted rate based
on other characteristics of facilities that
might cause contracted rates to vary,
such as whether a hospital is an
academic medical center or teaching
hospital. Given that participants,
beneficiaries, and enrollees with
emergency medical conditions typically
go (or are taken) to the nearest or most
convenient emergency department, the
Departments are of the view that,
individuals generally should not be
required to pay higher cost sharing
(such as coinsurance or a deductible)
based on features of the emergency
facility that may have a bearing on its
contracted rate with plans and issuers,
but which are unrelated or incidental to
the facility’s role as a provider of
emergency services.

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Geographic Regions
Under the No Surprises Act, plans
and issuers must calculate the median
contracted rate for an item or service
using contracted rates for the same or
53 See Medicare Payment Advisory Commission,
Report to the Congress: Medicare and the Health
Care Delivery System, ch. 8, Stand-alone Emergency
Departments, June 2017, available at http://
www.medpac.gov/docs/default-source/reports/
jun17_ch8.pdf (last visited June 19, 2021).
54 See id.

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similar item or service provided in the
geographic region in which the item or
service is furnished. The No Surprises
Act directs the Departments, in
consultation with the National
Association of Insurance Commissioners
(NAIC), to establish through rulemaking
the geographic regions to be applied
when determining the QPA, taking into
account access to items and services in
rural and underserved areas, including
health professional shortage areas, as
defined in section 332 of the PHS Act.55
In consulting on the geographic
regions to be applied under the No
Surprises Act, the NAIC recommended
that geographic regions correspond to
the applicable rating area used for
purposes of the individual market and
small group market rating rules under
section 2701 of the PHS Act,
implemented at 45 CFR 147.102, while
allowing states the flexibility to
establish alternative geographic regions.
However, some states define rating area
by county, resulting in large numbers of
rating areas in a state, some of which
might include very few, if any, facilities
and providers. Therefore, adopting the
rating area definitions as the standard
for geographic regions could lead to a
large number of geographic regions for
which a plan or issuer would have to
calculate separate median contracted
rates, a large number of geographic
regions without sufficient information,
as well as a large number of geographic
regions in which the median contracted
rate is influenced by outliers.
After consultation with the NAIC, the
Departments are establishing geographic
regions under these interim final rules
that reflect differences in health care
costs based on whether care is provided
in urban or rural areas. The Departments
are of the view that these geographic
regions take into account access to items
and services in rural and underserved
areas, including health professional
shortage areas, as defined at section 332
of the PHS Act. The Departments intend
to monitor the effect of these geographic
regions and periodically update such
55 Under section 332 of the PHS Act, a health
professional shortage area is (A) an area in an urban
or rural area (which need not conform to the
geographic boundaries of a political subdivision
and which is a rational area for the delivery of
health services) which the Secretary of HHS
determines has a health manpower shortage and
which is not reasonably accessible to an adequately
served area, (B) a population group which the
Secretary determines has such a shortage, or (C) a
public or nonprofit private medical facility or other
public facility which the Secretary determines has
such a shortage. All Federally qualified health
centers and rural health clinics, as defined in
section 1861(aa) of the Social Security Act (42
U.S.C. 1395x(aa)), that meet the requirements of
section 254g of title 42 shall be automatically
designated as having such a shortage.

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regions, as appropriate, taking into
account the findings of the report
submitted under section 109(a) of the
No Surprises Act, which addresses,
among other things, access to health
care items and services in rural areas
and health professional shortage areas.
In defining ‘‘geographic regions,’’ the
Departments have sought not only to
minimize instances in which a plan or
issuer lacks sufficient information to
calculate the median of contracted rates
in any particular geographic region, but
also to limit the instances in which a
plan or issuer has only the minimum
amount of information to meet the
sufficient information standard, as
discussed later in this preamble. Using
larger geographic regions, for which
plans and issuers are likely to have
more information, is expected to reduce
the likelihood that the median of
contracted rates would be skewed by
contracts under which the parties have
agreed to particularly high or low
payment amounts.
Under these interim final rules, for
items and services other than air
ambulance services, a geographic region
is generally defined as one region for
each metropolitan statistical area (MSA)
in a state and one region consisting of
all other portions of the state. The
delineations for MSAs are described by
the U.S. Office of Management and
Budget (OMB) and published by the
U.S. Census Bureau.56 MSAs encompass
at least one urbanized area with a
population of 50,000 or more people,
plus adjacent territory that has a high
degree of social and economic
integration with the core as measured by
commuting ties. MSAs are always
established along county boundaries,
but may include counties from more
than one state. Under this definition,
MSAs that cross state boundaries are
divided between the respective states,
with all the counties in a particular
MSA in each state counted as a
geographic region.
However, under this definition, if a
plan or issuer does not have sufficient
information to calculate the median of
contracted rates for an item or service
provided in an MSA, the plan or issuer
must consider all MSAs in the state to
be a single region when calculating the
median of contracted rates for the item
56 OMB Bulletin No. 20–01. ‘‘Revised
Delineations of Metropolitan Statistical Areas,
Micropolitan Statistical Areas, and Combined
Statistical Areas, and Guidance on Uses of the
Delineations of These Areas’’ (Mar. 6, 2020),
available at https://www.whitehouse.gov/wpcontent/uploads/2020/03/Bulletin-20-01.pdf. U.S.
Census Bureau, Delineation Files, available at
https://www.census.gov/geographies/referencefiles/time-series/demo/metro-micro/delineationfiles.html.

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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations
or service provided in that MSA. In
such cases, all MSAs in the state will
constitute one geographic region, and all
other portions of the state will continue
to constitute a different region. If after
applying these broader regions, a plan
or issuer continues to have insufficient
information to calculate the median of
contracted rates, geographic regions will
be based on Census divisions, with one
region consisting of all MSAs in the
Census division, and one region
consisting of all other portions of the
Census division. There are nine Census
divisions, as published by the U.S.
Census Bureau.57 This approach will
help to reduce instances in which a plan
or issuer cannot rely on its own
contracted rates to determine the QPA
in cases where the plan or issuer is not
limited to operating within a single state
but instead has provider contracts in a
multi-state region.
These interim final rules establish
alternate geographic regions with
respect to air ambulance services. Given
the nature of air ambulance services, the
infrequency with which they are
provided relative to the other types of
items and services subject to the No
Surprises Act, and the lower prevalence
of participating providers of air
ambulance services, the Departments
have determined not to apply a
definition of geographic regions based
on MSAs, as narrow regions would
result in more instances of insufficient
information.
Thus, for air ambulance services, a
geographic region means one region
consisting of all MSAs in the state, and
one region consisting of all other
portions of the state. If a plan or issuer
does not have sufficient information to
calculate the median of the contracted
rates for an air ambulance service using
that definition of a geographic region,
these interim final rules apply broader
regions based on Census divisions—that
is, one region consisting of all MSAs in
each Census division and one region
consisting of all other portions of the
Census division. Because air ambulance
services can be furnished over large
distances, these interim final rules
provide that the geographic region to be
applied for air ambulance services is
determined based on the point of pickup, meaning the location of the
individual at the time the individual is
placed on board the air ambulance. This
approach is generally consistent with
prevailing market practices among both
private and public payers.
57 U.S.

Department of Commerce Economics and
Statistics Administration, U.S. Census Bureau,
available at https://www2.census.gov/geo/pdfs/
maps-data/maps/reference/us_regdiv.pdf.

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Non-Fee-for-Service Contractual
Arrangements
The No Surprises Act provides that
rulemaking to establish the
methodology used to determine the
QPA must take into account payments
that are made by a plan or issuer that
are not on a fee-for-service basis. The
Departments are aware that many types
of alternative reimbursement models
exist that are not standard fee-forservice arrangements. For example,
under a bundled payment arrangement,
plans and issuers may reimburse a
provider for multiple items and services
under a single billing code. Other payers
have capitation arrangements, under
which a provider or panel of providers
is paid a fixed amount per member per
month.
The Departments understand that
when a plan or issuer has a fully- or
partially-capitated payment
arrangement, the plan or issuer also
typically has an internal methodology
used to value claims for those payments
made on a capitated basis. For example,
a plan or issuer with capitation
arrangements may have an underlying
fee schedule that is used to calculate an
individual’s cost sharing. The
Departments are of the view that, when
a plan or issuer has an underlying fee
schedule used to determine cost sharing
under non-fee-for-service contracts, it is
reasonable for the plan or issuer to use
the same methodology to assign a value
to the item or service for purposes of
determining the QPA. This approach is
used by plans and issuers in other
similar contexts, including when
providing data for the risk adjustment
program 58 and when making publicly
available in-network rates under the
transparency in coverage regulations.59
Therefore, in the case of these
alternative payment models, such as
bundled and fully or partially capitated
arrangements, where payment made by
a plan or issuer is not fully on a fee-forservice basis, these interim final rules
provide that the plan or issuer must
calculate a median contracted rate for
each item or service using the
58 See 45 CFR 153.710(c) (requiring an issuer of
a risk adjustment covered plan or a reinsuranceeligible plan in a state in which HHS is operating
the risk adjustment or reinsurance program, as
applicable, that does not generate individual
enrollee claims in the normal course of business to
derive the costs of all applicable provider
encounters using its principal internal methodology
for purposes of pricing those encounters).
59 See 26 CFR 54.9815–2715A3(b)(1)(C); 29 CFR
2590.715–2715A3(b)(1)(C); 45 CFR 147.212(b)(1)(C)
(requiring plans and issuers that use underlying fee
schedule rates for calculating cost sharing to make
publicly available on an internet website the
underlying fee schedule rates for all covered items
and services).

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underlying fee schedule rates for the
relevant items and services, if
underlying fee schedule rates are
available. The term ‘‘underlying fee
schedule rate’’ means the rate for a
covered item or service from a particular
participating provider, providers, or
facility that a group health plan or
health insurance issuer uses to
determine a participant’s, beneficiary’s,
or enrollee’s cost-sharing liability for the
item or service, when that rate is
different from the contracted rate.60 If
there is no underlying fee schedule rate
for an item or service, these interim
final rules provide that the plan or
issuer must calculate the median
contracted rate using a derived amount,
which, consistent with the definition in
the transparency in coverage
regulations, is the price that a plan or
issuer assigns an item or service for the
purpose of internal accounting,
reconciliation with providers, or for the
purpose of submitting data in
accordance with the requirements of 45
CFR 153.710(c).
The Departments considered
alternative approaches to account for
non-fee-for-service contractual
arrangements, such as requiring plans
and issuers to calculate median
contracted rates for service bundles, or
allowing plans or issuers to disregard
certain types of non-fee-for-service
contracts for purposes of calculating the
median contracted rate. However, the
approach specified in these interim final
rules will ensure that the median
contracted rate calculation accounts for
a range of different contractual
arrangements, including instances
where a plan or issuer uses different
types of contracting models with
different providers and facilities. Using
an underlying fee schedule or derived
amount will allow plans or issuers to, in
essence, convert each of their non-feefor-service contracts into fee-for-service
arrangements for purposes of calculating
the median contracted rate. By avoiding
instances where plans or issuers might
have been required to disregard some of
their contracts, this approach minimizes
the number of instances in which a plan
or issuer would not have sufficient
information to calculate a median
contracted rate and ensures that
arrangements that pay for value over
service volume are reflected in the QPA.
In addition, this approach will result in
the calculation of a QPA that aligns with
a service code (or service-code modifier
60 This definition is substantially similar to the
definition of ‘‘underlying fee schedule rate’’ in the
transparency in coverage regulations at 26 CFR
54.9815–2715A1(a)(2)(xxii), 29 CFR 2590.715–
2715A1(a)(2)(xxii), and 45 CFR 147.210(a)(2)(xxii).

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combination). The Departments
anticipate this result will be helpful to
nonparticipating providers and facilities
in understanding how much cost
sharing they are permitted to charge for
a given item or service, and as they
negotiate with the plan or issuer to
determine the out-of-network rate.
It is the Departments’ understanding
that under certain capitated and
bundled payment arrangements,
providers’ payments may be reconciled
retrospectively to account for
utilization, value adjustments, or other
weighting factors that can affect the
final payment to a provider. In addition,
payers and providers may agree to
certain incentive payments during the
contracting process to promote the
provision of higher-quality, lower-cost
health care to participants, beneficiaries,
or enrollees over time. These interim
final rules specify that when calculating
median contracted rates, plans and
issuers must exclude risk sharing,
bonus, or penalty, and other incentivebased and retrospective payments or
payment adjustments. The Departments
are of the view that excluding these
payments and payment adjustments
from the median contracted rates used
to determine cost sharing for items and
services furnished by nonparticipating
providers or facilities is consistent with
how cost sharing is typically calculated
for in-network items and services,
where the cost-sharing amount is
customarily determined at or near the
time an item or service is furnished, and
is not subject to adjustment based on
changes in the amount ultimately paid
to the provider or facility as a result of
any incentives or reconciliation process.
b. Indexing
The No Surprises Act provides that,
in instances when the median
contracted rate is determined as of
January 31, 2019, the QPA for items and
services furnished during 2022 is
calculated by increasing the median
contracted rate by the percentage
increase in the consumer price index for
all urban consumers (U.S. city average)
(CPI–U) over 2019, the percentage
increase over 2020, and the percentage
increase over 2021. The No Surprises
Act further provides that the QPA for
2022 is then adjusted annually for items
and services furnished during 2023 or a
subsequent year. Therefore, the increase
for any year is the CPI–U for the year,
as so defined, divided by the CPI–U for
the prior year. The combined percentage
increase for 2019, 2020, and 2021 to
determine the amount for 2022 is the
product of the CPI–U increases for 2019,
2020, and 2021 multiplied together. For
any year, the factor will be the quotient

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of CPI–U for the current year divided by
the CPI–U for the prior year. For
example, for an item or service provided
in 2023, the 2023 QPA is the 2022 QPA
multiplied by the CPI–U 2022/CPI–U
2021.
These interim final rules provide
specifications for calculating the
percentage increase in CPI–U to ensure
that all plans and issuers adjust the
percentage in a uniform manner. In
order to ensure that uniformity, these
interim final rules provide that plans
and issuers will calculate the increases
using the factors determined by the
Treasury Department and the IRS, and
published in guidance by the IRS. In
determining the factors, these interim
final rules provide that the percentage
increase for any year is calculated by
using the CPI–U published by the
Bureau of Labor Statistics of the DOL.
For this purpose, the CPI–U for each
calendar year is the average of the CPI–
U as of the close of the 12-month period
ending on August 31 of the calendar
year, rounded to 10 decimal places. This
allows the Departments to provide the
percentage increase factor before
January 1 of each applicable year with
sufficient time to adjust the QPAs for
the year.
c. Special Rules for Unit-Based Services
These interim final rules provide
special rules for calculating the QPA for
items or services for which a plan or
issuer generally determines the
reimbursement level for the same or
similar items or services by multiplying
the contracted rate by another unit, such
as time or mileage. In these cases,
indexing the median contracted rate to
calculate the QPA would result in an
amount that does not reflect the other
units that are generally considered
when calculating the in-network
payment amount. Therefore, when
reimbursement levels are determined
using this approach, these interim final
rules specify that the QPA is calculated
by determining the median contracted
rate used for that item or service,
indexing that median amount in
accordance with the otherwise
applicable rules regarding indexing, and
then applying the pertinent multipliers.
These interim final rules also include
specific instructions for calculating the
QPA for anesthesia services and for
certain service codes for air ambulance
services.
Anesthesia Services
Payers generally calculate payment
amounts for anesthesia services by
multiplying the negotiated rate for the
anesthesia conversion factor that has
been negotiated between the payer and

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the provider (expressed in dollars per
unit) by (1) the base unit for the
anesthesia service code, (2) the time
unit, and (3) the physical status
modifier unit. The base unit, time unit,
and physical status modifier unit are
specific to the individual receiving the
anesthesia services. These units are not
expressed in dollars per unit, nor do
they vary by contract. The base units for
an anesthesia service code are the
American Society of Anesthesiologists
Relative Value Guide base units for that
service code. The time unit represents
the length of time during which the
anesthesia services were furnished, and
for purposes of the QPA methodology,
is measured in 15-minute increments or
a fraction thereof. The physical status
modifier on a claim is a standard
modifier describing the physical status
of the patient and is used to distinguish
between the various levels of
complexity of the anesthesia services
provided, and is expressed as a unit
with a value between zero (0) and three
(3).
These interim final rules include a
methodology for calculating the QPA for
these anesthesiology services that
reflects the manner in which providers
are generally paid for these services. To
calculate the QPA for anesthesia
services furnished during 2022, these
interim final rules require the plan or
issuer to, first, take the median
contracted rate for the anesthesia
conversion factor (determined in
accordance with the methodology for
calculating median contracted rates for
service code-modifier combinations) for
the same or similar item or service as of
January 31, 2019, and increase that
amount to account for changes in the
CPI–U, using the methodology
described earlier in this section of the
preamble. This amount is referred to as
the indexed median contract rate. The
plan or issuer must then multiply this
indexed median contracted rate for the
anesthesia conversion factor by the sum
of the base unit (using the value
specified in the most recently published
edition (as of the date of service) of the
American Society of Anesthesiologists
Relative Value Guide), time unit, and
physical status modifier units of the
participant, beneficiary, or enrollee to
whom anesthesia services are furnished
to determine the QPA.
To calculate the QPA for anesthesia
services furnished during 2023 or a
subsequent year, the plan or issuer must
use the indexed median contracted rate
for the anesthesia conversion factor, and
adjust that amount by the percentage
increase in the CPI–U over the previous
year using the methodology described
earlier in this section of the preamble.

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The plan or issuer must then multiply
that amount by the sum of the base unit
(using the value specified in the most
recently published edition (as of the
date of service) of the American Society
of Anesthesiologists Relative Value
Guide), time unit, and physical status
modifier units for the participant,
beneficiary, or enrollee to whom
anesthesia services are furnished to
determine the QPA.

Act, as added by the No Surprises Act,
specify an alternative process to
determine the QPA in cases where a
group health plan or health insurance
issuer offering group or individual
health insurance coverage lacks
sufficient information to calculate the
median of contracted rates in 2019, as
well as for newly covered items or
services in the first coverage year after
2019.

Air Ambulance Services
Payers often reimburse for air
ambulance services in part by using air
mileage service codes (A0435 and
A0436) and reimbursement levels that
reflect the number of miles an
individual is transported by the air
ambulance, which are referred to as
loaded miles. Payment amounts are
calculated by multiplying the negotiated
rate for the service code, referred to in
this rule as the air mileage rate, by the
number of loaded miles. These interim
final rules include a methodology for
calculating the QPA for these air
mileage service codes that reflects the
manner in which providers are
generally paid for the service codes.
To calculate the QPA for the portion
of air ambulance services billed using
the air mileage service codes that are
furnished during 2022, the plan or
issuer must first increase the median
contracted rate, in accordance with 26
CFR 54.9816–6T(c)(1)(i), 29 CFR
2590.716–6(c)(1)(i), or 45 CFR
149.140(c)(1)(i), as applicable. This
amount is referred to as the indexed
median air mileage rate. The plan or
issuer must then multiply the indexed
median air mileage rate by the number
of loaded miles provided to the
participant, beneficiary, or enrollee to
determine the QPA.
To calculate the QPA for air
ambulance services billed using the air
mileage service codes (A0435 and
A0436) that are furnished during 2023
or a subsequent year, the plan or issuer
must increase the indexed median air
mileage rate, determined for such
services furnished in the immediately
preceding year, using the methodology
described in 26 CFR 54.9816–
6T(c)(1)(ii), 29 CFR 2590.716–6(c)(1)(ii),
or 45 CFR 149.140(c)(1)(ii), as
applicable. The plan or issuer must then
multiply the indexed median air
mileage rate by the number of loaded
miles provided to the participant,
beneficiary, or enrollee to determine the
QPA.

Definition of Sufficient Information
Under these interim final rules, a plan
or issuer is considered to have sufficient
information to calculate the median of
contracted rates if the plan or issuer has
at least three contracted rates on January
31, 2019, to calculate the median of the
contracted rates in accordance with the
methodology in these interim final
rules. In the Departments’ view, while a
median contracted rate could be
calculated with a smaller number of
contracts, requiring a minimum of three
contracted rates is supported by the
statute’s direction to calculate a median,
rather than a mean. Furthermore, the
Departments have determined that three
contracted rates for a particular item or
service in a geographic region represents
the minimum number of contracts
necessary to reasonably reflect typical
market negotiations while reducing the
potential for outlier rates to unduly
influence the calculation of the QPA.
Under section 9816(a)(3)(E)(iii) of the
Code, section 716(a)(3)(E)(iii) of ERISA,
section 2799A–1(a)(3)(E)(iii) of the PHS
Act, and these interim final rules, where
a plan or issuer that initially does not
have sufficient information to calculate
the median contracted rate based on
January 31, 2019 contracted rates (or for
new plans and coverage or new service
codes, as discussed in more detail in
this section of the preamble) later gains
sufficient information, the plan or issuer
must calculate the QPA using the
median contracted rate for the first
sufficient information year. The first
sufficient information year is defined as:
(1) In the case of an item or service for
which a plan or issuer does not have
sufficient information to calculate the
median of contracted rates in 2019, the
first year after 2022 for which the plan
or issuer has sufficient information to
calculate the median of contracted rates
in the year immediately preceding that
first year after 2022; and (2) in the case
of a newly covered item or service, the
first year after the first coverage year for
such item or service with respect to
such plan or coverage for which the
plan or issuer has sufficient information
to calculate the median of the
contracted rates in the year immediately
preceding that first year.

d. Cases With Insufficient Information
Section 9816(a)(3)(E)(iii) of the Code,
section 716(a)(3)(E)(iii) of ERISA, and
section 2799A–1(a)(3)(E)(iii) of the PHS

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In cases in which contracted rates for
a year after 2019 must be used to
calculate the median contracted rate, a
plan or issuer will be considered to have
sufficient information to calculate the
median contracted rate for a year if,
with respect to that year, both of the
following conditions are met: (1) The
plan or issuer has at least three
contracted rates on January 31 of the
year immediately preceding that year to
calculate the median of the contracted
rates in accordance with the
methodology in these interim final
rules; and (2) the contracted rates
account (or are reasonably expected to
account) for at least 25 percent of the
total number of claims paid for that item
or service for that year with respect to
all plans of the sponsor (or of the
administering entity, if applicable) or all
coverage offered by the issuer that are
offered in the same insurance market.
The requirement that a plan or issuer
have at least three contracted rates for
a particular item or service in a
geographic region is the same as the
requirement that applies when
determining whether there is sufficient
information to calculate a median
contracted rate for items and services
furnished during 2022 using the median
of contracted rates as of January 31,
2019. The 25 percent minimum claims
volume requirement, however, applies
where only contracted rates for years
after 2019 are used to determine
whether a plan or issuer has sufficient
information to calculate the median
contracted rate in the first sufficient
information year. While the
Departments are not concerned about
manipulation of the QPA in the majority
of cases where the median contracted
rate is based on 2019 contracted rates,
the Departments recognize the potential
for plans and issuers to engage in
selective contracting practices that
artificially change the median
contracted rate in cases where
subsequent year contracted rates are
used to determine the QPA. Therefore,
this requirement will help to ensure that
when contracted rates for years after
2019 are used to calculate a median
contracted rate, those network contracts
represent a reasonable proportion of a
plan’s or issuer’s total claims and are
not designed to manipulate the QPA.
Eligible Databases
In cases in which a plan or issuer
does not have ‘‘sufficient information’’
to calculate a median contracted rate,
the No Surprises Act directs the plan or
issuer to determine the QPA through
use of any database that is determined,
in accordance with rulemaking issued
by the Departments, to not have any

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conflicts of interest and to have
sufficient information reflecting allowed
amounts paid to a health care provider
or facility for relevant services furnished
in the applicable geographic region
(such as a state all-payer claims
database).
These interim final rules establish
standards for databases, referred to as
eligible databases, that may be used to
determine the QPA. State all-payer
claims databases are categorically
eligible under these interim final rules
because they are specifically identified
as not having any conflicts of interest
and as having sufficient information
reflecting allowed amounts in section
9816(a)(3)(E)(iii)(I) of the Code, section
716(a)(3)(E)(iii)(I) of ERISA, and section
2799–1(a)(3)(E)(iii)(I) of the PHS Act.
Other third-party databases may also be
eligible, provided all of the following
conditions are satisfied.
First, the database or the organization
maintaining the database cannot be
affiliated with, or owned or controlled
by, any health insurance issuer, or a
health care provider, facility, or
provider of air ambulance services, or
any member of the same controlled
group as, or under common control
with, any such entity. For example, if a
majority of the members on the
governing board of a database or the
organization maintaining the database
are associated with a health insurance
issuer, the database would be
considered to have a conflict of interest
under these interim final rules, since it
is controlled by the issuer. As another
example, if an issuer owns 40 percent of
the stock of the organization that
maintains a database, and its subsidiary
owns an additional 20 percent of the
stock of the organization that maintains
the database, the database would be
considered to have a conflict of interest
under these interim final rules, since it
is effectively controlled by the issuer.
As a third example, if an issuer and the
organization that maintains a database
are both subsidiaries of the same parent
organization, the database would be
considered to have a conflict of interest
under these interim final rules, since it
is affiliated with the issuer. In the
Departments’ view, this standard is
critical to ensuring the independence of
any database used to determine the
QPA. The Departments solicit comment
on whether a database should not be
affiliated with, or owned or controlled
by, other entities, such as plan sponsors
or third-party administrators, in order to
avoid a conflict of interest. The
Departments also seek comment on
whether to establish a specific threshold
that a party’s minority ownership
interest must meet or exceed in order to

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create a conflict of interest for purposes
of these interim final rules.
For purposes of applying the
controlled group rules to eligible
databases, a controlled group means a
group of two or more persons that is
treated as a single employer under Code
sections 52(a), 52(b), 414(m), or 414(o).
The Treasury Department and the IRS
are considering whether further
guidance is needed under section 52(a)
or (b) of the Code to address either
organizations exempt from tax under
section 501(a) of the Code or nonprofit
organizations that, although not exempt
from tax under section 501(a) of the
Code, do not have members or
shareholders that are entitled to receive
distributions of the organization’s
income or assets (including upon
dissolution) or that otherwise retain
equity interests similar to those
generally held by owners of for-profit
entities. Until further guidance is
issued, those two types of organizations
may either rely on a reasonable, goodfaith application of section 52(a) and (b)
of the Code (taking into account the
reasons for which the controlled group
rules are incorporated into the
definition of eligible database) or apply
the rules set forth in 26 CFR 1.414(c)–
5(a) through (d) (but substituting ‘‘more
than 50 percent’’ in place of ‘‘at least 80
percent’’ each place it appears in 26
CFR 1.414(c)–5).
Second, the database must have
sufficient information reflecting innetwork amounts paid by group health
plans or health insurance issuers
offering group or individual health
insurance coverage to providers,
facilities, or providers of air ambulance
services for relevant items and services
furnished in the applicable geographic
region. The Departments recognize that
for a database to be used to calculate the
QPA, the database should contain
sufficient data to reflect the true market
dynamics in a given geographic region.
However, in order to provide flexibility
in the initial implementation of the No
Surprises Act, these interim final rules
do not establish a specific definition of
when a database is considered to have
sufficient information. The Departments
seek comment on how to define when
a database has sufficient information,
including whether to establish specific
criteria that a claims database would
need to satisfy in order to demonstrate
that it has sufficient information
reflecting in-network payment amounts
for providers or facilities in the
applicable geographic region, such as a
requirement that the database represents
a specified minimum percentage of the
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Third, the database must have the
ability to distinguish amounts paid to
participating providers and facilities by
commercial payers, such as group
health plans and health insurance
issuers offering group or individual
health insurance coverage, from all
other claims data, such as amounts
billed by nonparticipating providers or
facilities and amounts paid by public
payers, including the Medicare program
under title XVIII of the Social Security
Act, the Medicaid program under title
XIX of the Social Security Act (or a
demonstration project under title XI of
the Social Security Act),61 and the
Children’s Health Insurance Program
under title XXI of the Social Security
Act.
To calculate the QPA for an item or
service furnished during 2022 (or in the
case of newly covered items or services,
in the first coverage year) using an
eligible database, the plan or issuer
must first identify the rate in the
database that is equal to the median of
the in-network allowed amounts for the
same or similar item or service in the
geographic region in the year
immediately preceding the year in
which the item or service is furnished
(or in the case of a newly covered item
or service, the year immediately
preceding the first coverage year). It is
the Departments’ view that in-network
allowed amounts for items and services
are a reasonable proxy for contracted
rates, and that where there is
insufficient information to calculate the
QPA based on the median of a plan’s or
issuer’s own contracted rates, using the
median of in-network allowed amounts
for all private payers in an eligible
database is a reasonable method for
approximating the median contracted
rate for items and services in the
applicable geographic region. The
Departments are also of the view that
determining the QPA for an item or
service using the median of in-network
allowed amounts for the same or similar
item or service in the geographic region
in the year immediately preceding the
year in which the item or service is
furnished is reasonably likely to result
in levels of cost sharing that are
61 Under section 1115 of the Social Security Act,
the Secretary of HHS has the authority to approve
experimental, pilot, or demonstration projects that,
in his judgment, are likely to assist in promoting the
objectives of the Medicaid statute. Under section
1115 authority, the Secretary may waive
compliance with certain provisions of Medicaid
and CHIP law and may authorize federal matching
funds for state expenditures that would not
otherwise be federally matchable under the
Medicaid and CHIP statutes. Many states have
section 1115 demonstrations under which they
cover services that would not otherwise be covered
under the Medicaid or CHIP programs.

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generally in line with the cost-sharing
liability incurred by participants,
beneficiaries, and enrollees in plans
with similar levels of in-network costsharing for the same or similar items or
services.
Once the median in-network allowed
amount has been identified, that rate is
then increased by the percentage
increase in the CPI–U over the previous
year using the methodology described
earlier in this section of the preamble.
For each subsequent year before the first
sufficient information year, the plan or
issuer must increase the QPA applicable
to items or services furnished in the
immediately preceding year by the
percentage increase in CPI–U over the
preceding year. Plans and issuers must
continue to use this methodology until
the first sufficient information year, at
which point the plan or issuer must
calculate the median contracted rate and
determine the QPA using the standard
methodology discussed earlier in this
section of the preamble.
These interim final rules require that
plans and issuers use a consistent
methodology when relying on an
eligible database. Specifically, for any
particular item or service, a plan or
issuer using a database must use the
same database to determine the QPA for
that item or service through the last day
of the calendar year, and if a different
database is selected for some items or
services, the basis for that selection
must be one or more factors not directly
related to the rate of those items or
services (such as sufficiency of data for
those items or services).62 This
consistency requirement is designed to
ensure that when relying on an eligible
database to determine the QPA for an
item or service, a plan or issuer cannot
vary the database selected due to the
rates associated with that item or
service. The Departments seek comment
on this consistency requirement and
whether additional standards or
guidance are needed to ensure
compliance and prevent abuse.
Finally, these interim final rules
codify section 9816(d) of Code, section
716(d) of ERISA, and section 2799A–
1(d) of PHS Act, as added by the No
Surprises Act, which provide that a plan
or issuer that uses an eligible database
to determine the QPA by reason of
having insufficient information is
responsible for any costs associated
with accessing such database. The
Departments solicit comment on ways
62 For example, these interim final rules permit a
plan or issuer to rely on different state all-payer
claims databases, based on the geographic region in
which an item or service is furnished, as state allpayer claims databases may not have sufficient data
for items and service furnished outside of the state.

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to help ensure that plans and issuers are
charged only reasonable costs for
accessing such databases and that
entities that provide eligible databases
are transparent about their fees and fee
structures associated with this process.
New Plans and Coverage
The No Surprises Act directs the
Departments to establish a methodology
for the sponsor of a group health plan
or a health insurance issuer that did not
offer any plan or coverage in a
geographic region in 2019 to determine
QPAs for the first year in which the plan
or coverage will be offered in the
geographic region. For each subsequent
year, that amount is increased by the
percentage increase in the consumer
price index for all urban consumers over
the previous year.
The Departments recognize that while
a sponsor or issuer may be newly
offering coverage in a geographic region,
the sponsor or issuer may have
sufficient existing provider contracts
under other current coverage in the
geographic region where an item or
service is furnished to calculate the
QPA. The Departments clarify that it is
not necessary to establish special
procedures to calculate the QPA in
these situations. Therefore, under these
interim final rules, if the plan or issuer
newly offering coverage in a geographic
region for a year after 2019 otherwise
has sufficient information to calculate a
median contracted rate in 2019 in the
geographic region where the item or
service is furnished, the QPA is
determined using the standard
methodology for calculating median
contracted rates discussed earlier in this
section of the preamble.
The Departments recognize that the
standard methodology would not be
available, however, in cases where the
plan or issuer does not have sufficient
information to calculate a median
contracted rate in the geographic region
in which the item or service is
furnished, such as in situations where
the sponsor or issuer did not offer any
plan or coverage in 2019. In this case,
the plan or issuer must determine the
QPA in accordance with the rules
applicable to plans or issuers with
insufficient information, or for newly
covered items and services, including
the use of an eligible database, as
discussed earlier in this section of the
preamble.
For each subsequent year the plan or
coverage is offered in the geographic
region, the plan or issuer must increase
the QPA for items or services furnished
in the immediately preceding year by
the percentage increase in the CPI–U
over the previous year to determine the

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QPA for items and services furnished in
that year. Under this approach, new
plans and coverage that initially do not
have sufficient information to calculate
a median contracted rate must use a
QPA based on information for the first
year of coverage from an eligible
database indefinitely, updated only by
the inflation adjustment. The
Departments seek comment on whether
the methodology should instead allow
new plans and coverage to transition to
calculating a QPA using median
contracted rates in an applicable first
sufficient information year.
New Service Codes
When service codes are created, plans
and issuers may be unable to calculate
the QPA using the approaches discussed
earlier, because neither the plan or
issuer nor any eligible databases have
sufficient information regarding the new
service code. This situation may occur
for new service codes when the service
codes describe items or services that
have not previously been widely
furnished. This situation may also occur
when service codes are substantially
revised, resulting in new service codes
or new descriptors for existing service
codes that substantially alter the types
of services that would be billed using
the original service codes. In this case,
the plan, issuer, or eligible database may
have sufficient information regarding
rates for items and services billed under
the service code prior to the revision,
but that information may no longer
reflect the rates associated with the
items and services billed under the
revised service code. The No Surprises
Act does not specify a methodology for
calculating the QPA in these
circumstances. However, in the
Departments’ view, it is necessary that
these interim final rules establish a
methodology that plans and issuers can
rely on for calculating QPAs for new
service codes during periods of time
when no eligible databases would
reasonably be expected to have
sufficient data to calculate a QPA.
These interim final rules define ‘‘new
service code’’ to mean a service code
that was created or substantially revised
in a year after 2019. In situations in
which a plan or issuer is billed for a
covered item or service using a new
service code, the plan or issuer must
first identify a reasonably related service
code that existed in the immediately
preceding year. For example, a
reasonably related service code might be
another service code within the same
family of codes, or might involve
services that represent similar relative
value units. This related service code
will be used as a benchmark for

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determining the QPA for the new
service code. The Departments seek
comment on whether additional rules
are needed regarding how plans and
issuers should be required to identify a
reasonably related service code, and on
whether the Departments should
develop a crosswalk methodology to
identify related service codes for each
new service code.
The Departments are of the view that,
although Medicare payment rates may
differ substantially from rates paid by
plans and issuers, it is reasonable to use
Medicare payment rates to approximate
the relative cost of two different but
reasonably related service codes.
Therefore, if CMS has established a
payment rate under the Medicare
program for an item or service billed
under the new service code, the plan or
issuer must calculate the ratio of the rate
that Medicare pays for the item or
service billed under the new service
code compared to the rate that Medicare
pays for the item or service under the
related service code (with both rates
disregarding any adjustments for valuebased purchasing arrangements that
could lead to bonuses or deductions),
and multiply that ratio by the QPA for
the related service code for the year in
which the item or service is furnished.
The Departments recognize that in
some cases the Medicare program might
not immediately establish a payment
rate for items and services billed under
a new service code. Therefore, these
interim final rules establish a secondary
approach to determine the QPA in these
situations. Specifically, for items and
services billed using a new service code
for which Medicare has not established
a payment rate, the plan or issuer must
calculate the QPA by first calculating
the ratio of the rate that the plan or
issuer reimburses for an item or service
billed under the new service code
compared to the rate that the plan or
issuer reimburses for an item or service
under the related service code (the
relativity ratio), and then multiplying
the relativity ratio by the QPA for the
item or service billed under the related
service code. These interim final rules
do not specify a particular method that
plans and issuers must use to calculate
this relativity ratio. However, the
Departments expect plans and issuers to
use a reasonable method for making the
calculation, and seek comment on
whether future rulemaking should
specify additional requirements for
determining the relativity ratio. For
example, plans and issuers could be
required to calculate the ratio using the
medians or means of the contracted
rates for each of the two services.
However, the Departments recognize

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that it may take time for plans and
issuers to enter into negotiated rates for
new service codes, and therefore the
medians or means may change over
time. Alternatively, plans and issuers
could be required to calculate the
relativity ratio using rates from one
contract, based on the assumption that
negotiated rates within any given
contract would generally produce a
similar relativity ratio. The Departments
are of the view that using rates from two
different contracts would not constitute
a reasonable method for calculating the
relativity ratio, as this approach could
introduce into the relativity ratio,
variation from factors that are unrelated
to the relative cost of furnishing the
item or service, such as the negotiating
power of the parties to the contract.
Under the methodology in these
interim final rules, for items or services
furnished in any subsequent year
(before the first sufficient information
year for such item or service with
respect to such plan or coverage or
before the first year for which an eligible
database has sufficient information in
the immediately preceding year), the
plan or issuer must calculate the QPA
by increasing the QPA calculated for the
prior year by the percentage increase in
CPI–U over the immediately preceding
year.
However, for an item or service billed
using a new service code, and furnished
in the first sufficient information year
for such item or service with respect to
such plan or coverage, or furnished in
the first year for which an eligible
database has sufficient information to
enable the plan or issuer to calculate the
QPA using the processes that generally
apply when an issuer or plan has
insufficient information, the plan or
issuer must calculate the QPA in
accordance with 26 CFR 54.9816–
6T(c)(3), 29 CFR 2590.716–6(c)(3), or 45
CFR 149.140(c)(3), as applicable. Thus,
once the plan or issuer or an eligible
database has sufficient information to
calculate a QPA, the QPA for a new
service code would be calculated using
the median contracted rate of the plan
or issuer, or the median of the innetwork allowed amounts in the eligible
database.
The Departments seek comment on
any alternate approaches that could be
used to determine the QPA for new
service codes.
e. Information To Be Shared About the
QPA
The No Surprises Act directs the
Departments to specify the information
that a plan or issuer must share with a
nonparticipating provider or
nonparticipating emergency facility, as

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applicable, when making a
determination of a QPA.
The Departments recognize that
providers, emergency facilities, and air
ambulance providers subject to the
surprise billing rules need transparency
regarding how the QPA was determined.
This information is also important in
informing the negotiation process. In
addition, IDR entities are directed by
statute to consider the QPA when
selecting an offer submitted by the
parties through the IDR process.
Therefore, to decide whether to initiate
the IDR process and what offer to
submit, a provider, emergency facility,
or provider of air ambulance services
must know not only the value of the
QPA, but also certain information on
how it was calculated.
The Departments seek to ensure
transparent and meaningful disclosure
about the calculation of the QPA while
minimizing administrative burdens on
plans and issuers. These interim final
rules therefore require that plans and
issuers make certain disclosures with
each initial payment or notice of denial
of payment, and that plans and issuers
must provide additional information
upon request of the provider or facility.
This information must be provided in
writing, either on paper or
electronically, to a nonparticipating
provider, emergency facility, or provider
of air ambulance services, as applicable,
when the QPA serves as the recognized
amount.
First, a plan or issuer must provide
the QPA for each item or service
involved.
Second, a plan or issuer must provide
a statement certifying that, based on the
determination of the plan or issuer: (1)
The QPA applies for purposes of the
recognized amount (or, in the case of air
ambulance services, for calculating the
participant’s, beneficiary’s, or enrollee’s
cost sharing), and (2) each QPA shared
with the provider or facility was
determined in compliance with the
methodology outlined in these interim
final rules. These interim final rules
require a statement from the plan or
issuer that the QPA applies for purposes
of the recognized amount so that
providers and facilities will understand
that the plan or issuer has determined
that neither an All-Payer Model
Agreement nor a specified state law
applies for purposes of calculating a
participant’s, beneficiary’s, or enrollee’s
cost-sharing liability, but rather that
cost-sharing liability has been
calculated using the QPA. With respect
to air ambulance services, the statement
will ensure providers of air ambulance
services understand that the QPA, rather
than the billed charge, applies for

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purposes of calculating the cost-sharing
liability, because the plan or issuer has
determined that the QPA is lower than
the billed charge. The Departments
expect that in most if not all cases
where the QPA serves as the basis for
determining the recognized amount, the
federal IDR process will govern any
dispute over payment instead of a
specified state law or process.
Therefore, this notice will also serve to
direct providers or facilities to the
federal IDR process if the parties cannot
agree on an out-of-network rate.
Third, a plan or issuer must provide
a statement that if the provider or
facility, as applicable, wishes to initiate
a 30-day open negotiation period for
purposes of determining the amount of
total payment, the provider or facility
may contact the appropriate person or
office to initiate open negotiation, and
that if the 30-day open negotiation
period does not result in a
determination, generally, the provider
or facility may initiate the IDR process
within 4 days after the end of the open
negotiation period. The plan or issuer
must also provide contact information,
including a telephone number and
email address, for the appropriate office
or person to initiate open negotiations
for purposes of determining an amount
of payment (including cost sharing) for
such item or service.
In addition, upon request of the
provider or facility, a plan or issuer
must provide, in a timely manner,
information about whether the QPA
includes contracted rates that were not
set on a fee-for-service basis for the
specific items and services at issue and
whether the QPA for those items and
services was determined using
underlying fee schedule rates or a
derived amount. If a related service code
was used to determine the QPA for a
new service code, a plan or issuer must
provide information to identify which
related service code was used.
Similarly, if an eligible database was
used to determine the QPA, a plan or
issuer must provide information to
identify which database was used to
determine the QPA.
Finally, if applicable upon request, a
plan or issuer must provide a statement
that the plan’s or issuer’s contracted
rates include risk-sharing, bonus,
penalty, or other incentive-based or
retrospective payments or payment
adjustments for the items and services
involved that were excluded for
purposes of calculating the QPA. Having
information about whether the median
contracted rate excludes these types of
payment adjustments will better inform
the open negotiation and IDR process.

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The Departments seek comment on
these disclosure requirements and on
what additional information a plan or
issuer should be required to share with
a provider or facility about the QPA,
either in all cases or upon request. The
Departments also seek comment on
whether a specific definition or
standard is needed to ensure that
information provided upon request is
disclosed in a timely manner.
f. Audits
The No Surprises Act requires
rulemaking to establish a process under
which group health plans and health
insurance issuers offering group or
individual health insurance coverage
are audited by the applicable Secretary
or applicable state authority to ensure
that such plans and coverage are in
compliance with the requirement of
applying a QPA and that the QPA
applied satisfies the definition under
the No Surprises Act with respect to the
year involved.63
The enforcement responsibilities of
HHS and the states with respect to
oversight of health insurance issuer
compliance with the federal insurance
market reforms are set forth in the PHS
Act. Pursuant to section 2723(a)(1) of
the PHS Act, as amended by the No
Surprises Act, states have primary
enforcement authority over health
insurance issuers regarding the
provisions of Parts A and D of title
XXVII of the PHS Act. Under this
framework, HHS has enforcement
authority over issuers in a state if the
Secretary of HHS makes a determination
that the state is failing to substantially
enforce a provision (or provisions) of
Part A or D of title XXVII of the PHS
Act.64
DOL and the Treasury Department
generally have primary enforcement
authority over private sector
employment-based group health plans.
The IRS has jurisdiction over certain
church plans. HHS also has primary
enforcement authority over non-federal
governmental plans, such as those
sponsored by state and local
government employers.65 OPM has
jurisdiction over FEHB plans, which are
federal governmental plans.
The Departments will generally use
existing processes to ensure compliance
with Code, ERISA, and PHS Act
requirements that apply to group health
63 See section 9816(a)(2)(A) of the Code; section
2799A–1(a)(2)(A) of the PHS Act. The DOL and
OPM will rely on the existing agency processes to
ensure compliance with the No Surprises Act, as
discussed in this section of the preamble.
64 Section 2723(a)(2) and (b)(1)(A) of the PHS Act.
See also 45 CFR 150.203.
65 See section 2723(b)(1)(B) of the PHS Act.

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plans and health insurance issuers,
including the provisions added by the
No Surprises Act. HHS’s enforcement
procedures related to the PHS Act
federal insurance market reforms are set
forth in section 2723 of the PHS Act and
45 CFR 150.101 et seq., including bases
for initiating investigations and
performing market conduct
examinations. Section 504 of ERISA
provides DOL with authority to
determine whether any person has
violated or is about to violate any
provision of ERISA or any regulation or
order thereunder. The interim final
rules include an audit provision
establishing that HHS’s existing
enforcement procedures will apply with
respect to ensuring that a plan or
coverage is in compliance with the
requirement of determining and
applying a QPA consistent with these
interim final rules. HHS intends to
amend its enforcement regulations
through future notice and comment
rulemaking to reflect the amendments
made to the PHS Act by the No
Surprises Act. OPM will audit FEHB
plans to ensure that such plans are in
compliance with the requirement of
determining and applying a QPA.
vii. Determination of Out-of-Network
Rate in the Absence of a Specified State
Law or an Applicable All-Payer Model
Agreement
In instances in which a specified state
law or All-Payer Model Agreement does
not apply for purposes of specifying the
out-of-network rate, the out-of-network
rate is determined either through
agreement between the provider or
facility and plan or issuer; or through an
IDR process, if agreement cannot be
reached and such process is initiated. If
the parties agree to an amount of
payment prior to the date on which a
certified IDR entity makes a
determination with respect to such
items or services, that agreed upon
amount is the out-of-network rate.
Otherwise, the out-of-network rate is the
amount of payment determined by the
certified IDR entity for the items or
services.66
3. Additional Plan and Issuer
Requirements Regarding Making Initial
Payments or Providing a Notice of
Denial
The No Surprises Act and these
interim final rules establish several
procedural requirements that apply to
group health plans and health insurance
issuers to ensure that billing disputes
66 As noted previously, the Departments intend to
implement the federal IDR process in future
rulemaking.

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related to items and services subject to
the balance billing protections in the No
Surprises Act are resolved in a timely
fashion. These include timeframes for:
A plan or issuer to send a notice of
denial of payment or make an initial
payment; the length of any open
negotiation period regarding payment;
and initiating the IDR process following
an open negotiation period. However,
those three requirements do not apply
under certain circumstances with regard
to post-stabilization services or to outof-network non-emergency services
(other than out-of-network air
ambulance services) if the provider or
facility provided notice to, and received
consent from, the participant,
beneficiary, or enrollee (or their
authorized representative), as discussed
later in this preamble.
Therefore, it is critical that a group
health plan or health insurance issuer
have knowledge of any notice provided
and consent given under these interim
final rules for items and services that it
covers, and that would otherwise be
subject to the surprise billing provisions
in the statute and these interim final
rules. As discussed later in this
preamble, the interim final rules issued
by HHS in this rulemaking require
providers and facilities to notify plans
and issuers when the notice and consent
criteria have been satisfied. Absent
receiving this information, a plan or
issuer must assume that the individual
has not waived the protections provided
in these interim final rules, and must
therefore calculate cost sharing, apply
cost sharing to deductibles and out-ofpocket limits, and make any payments
to providers and facilities before an
individual has satisfied the coverage
deductible, accordingly. In instances
where a plan or issuer does receive this
information, it may rely on the
provider’s or facility’s representation as
being true and accurate, unless and
until the plan or issuer knows or
reasonably should know otherwise.
Thus, if a provider or facility indicates
to a plan or issuer that the notice and
consent described in these interim final
rules was properly and timely given and
received, the plan or issuer may rely on
that information and, for example, apply
out-of-network cost sharing for the
applicable items and services, unless
and until the plan or issuer knows or
reasonably should know that the notice
and consent was not properly and
timely given and received. In cases
where a plan or issuer believes that
notice was not properly and timely
given and received, notwithstanding a
provider’s or facility’s assertion to the
contrary, the plan or issuer should

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apply the cost-sharing and other
requirements set forth in these interim
final rules and applicable state law by,
among other actions, reprocessing any
claims that were not processed
consistently with those requirements.
The plan or issuer may also submit a
complaint against the provider or
facility as set forth in these interim final
rules at 45 CFR 149.450.
Sections 9816(a)(1)(iv)(I) and
9817(a)(3)(A) of the Code, sections
716(a)(1)(iv)(I) and 717(a)(3)(A) of
ERISA, sections 2799A–1(a)(1)(iv)(I) and
2799A–2(a)(3)(A) of the PHS Act, and
these interim final rules, require plans
and issuers to send ‘‘an initial payment
or notice of denial of payment’’ not later
than 30 calendar days after a
nonparticipating provider or facility
submits a bill related to the items and
services that fall within the scope of the
new surprise billing protections for
emergency services, non-emergency
services performed by nonparticipating
providers at participating facilities, and
air ambulance services furnished by
nonparticipating providers of air
ambulance services. Given that plans
and issuers cannot comply with this
requirement unless the plan or issuer
first determines that the billed items
and services are covered under the plan
or coverage, these interim final rules
require that the plan or issuer make
such determination not later than 30
calendar days after a nonparticipating
provider or facility submits a bill related
to the items and services that fall within
the scope of the new surprise billing
protections for emergency services, nonemergency services performed by
nonparticipating providers at
participating facilities, and air
ambulance services furnished by
nonparticipating providers of air
ambulance services.
The Departments specify in these
interim final rules that the 30-calendarday period generally begins on the date
the plan or issuer receives the
information necessary to decide a claim
for payment for such services,
commonly known as a ‘‘clean claim’’
under many existing state laws. To the
extent feasible, the Departments
encourage providers and facilities to
include information about whether the
surprise billing protections apply to an
item or service on the claim form itself.
With respect to non-emergency services,
HHS requires, under 45 CFR 149.420(i),
nonparticipating providers (or the
participating facility on behalf of the
nonparticipating provider) to timely
notify the plan or issuer that the item or
service was furnished during a visit at
a participating health care facility. In
addition, in all cases, under either 45

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CFR 149.410(e) or 45 CFR 149.420(i),
providers and facilities must notify the
plan or issuer as to whether the
requirements for notice and consent
have been met when transmitting the
bill, either on the bill or in a separate
document. The Departments seek
comments with recommendations on
how HIPAA standard transactions to
submit claims could be modified to
accommodate the submission of several
types of information on the claim itself.
Specifically, the Departments seek
comment on how HIPAA standard
transactions to submit claims could be
modified to include whether the
surprise billing protections apply to the
items and services included on a claim,
whether the item or service was
furnished during a visit at a
participating health care facility, and
whether the requirements for notice and
consent have been met. The 30calendar-day initial payment period also
does not prohibit payments outside of
the 30-calendar-day timeframe for any
future adjustments for errors in
payment, such as in cases of duplicate
bills where providers and plans or
issuers reconcile overpayments. The
Departments expect that plans and
issuers will act reasonably and in good
faith when requesting additional
information, by providing specific detail
to help ensure that the claimant,
provider, or facility understands what is
required to perfect the claim. The
Departments may specify additional
standards if the Departments become
aware of instances of abuse and gaming
where plans and issuers are unduly
delaying making an initial payment or
sending a notice of denial to providers
on the basis that the provider has not
submitted a clean claim. The
Departments solicit comment on
whether any additional standards are
necessary to prevent abusive claims
payment practices. Under these interim
final rules, a notice of denial of payment
means, with respect to an item or
service for which benefits are subject to
the surprise billing protections, a
written notice from the plan or issuer to
the provider or facility that payment for
the item or service will not be made by
the plan or coverage and which explains
the reason for denial. A notice of denial
of payment could be provided, for
example, if the item or service is
covered but is subject to a deductible
greater than the recognized amount.
In the Departments’ view, the statute’s
reference to an ‘‘initial’’ payment does
not refer to a first installment. Rather,
this initial payment should be an
amount that the plan or issuer
reasonably intends to be payment in full

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based on the relevant facts and
circumstances and as required under the
terms of the plan or coverage, prior to
the beginning of any open negotiations
or initiation of the IDR process. In cases
where the provider or facility is willing
to accept the cost-sharing amount plus
the initial payment (or the cost-sharing
amount alone, in cases where a denial
of payment is sent) as payment in full,
this amount will be treated as the outof-network rate. If plans and issuers
make initial payments that providers
and facilities are willing to accept
(when combined with the cost-sharing
amount) as payment in full, the
administrative costs of determining the
out-of-network amount will be
significantly reduced through the
avoidance of an open negotiation period
and IDR process.
These interim final rules do not
require plans and issuers, when making
an initial payment to providers or
facilities, to make any specific amount
of minimum initial payment. However,
several state balance billing laws set
standards for minimum initial payment
amounts. For example, in Washington
State, issuers are required to pay an outof-network provider or facility a
commercially reasonable amount,
reduced by the applicable cost-sharing
amount, within 30 calendar days of
receipt of a claim to which the state’s
balance billing protections apply.
Requiring a minimum initial payment
amount may help reduce the number of
cases that go to arbitration in some
states, and could help to reduce the
number of cases that go to the federal
IDR process established under the No
Surprises Act.
The Departments seek comment on
whether to set a minimum payment rate
or methodology for a minimum initial
payment in future rulemaking, and if so,
what that rate or methodology should
be. For example, a minimum payment
rate could be a specific percentage of the
Medicare rate, a specific percentage of
the plan or issuer’s QPA for the item or
service, an amount calculated in the
same way the plan or issuer typically
calculates payment for the specific item
or service to nonparticipating providers
or facilities, an amount representing the
highest amount that would result from
applying two or more of these or other
methodologies, or any other method. To
the extent comments suggest that a
percentage of a rate calculated or
determined in a specific way would be
appropriate, the Departments seek
comment regarding an appropriate
specific percentage. The Departments
also seek comment on whether a
minimum payment rate should be
defined as a commercially reasonable

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rate based on payments for the same or
similar services in a similar area,
without requiring any specific
methodology. In addition, the
Departments seek comment regarding
the impact of these provisions on
underserved and rural communities,
and other communities facing a shortage
of providers.
The Departments are aware that the
timeframes for deciding post-service
claims under the claims and appeals
rules issued under section 2719 of the
PHS Act and the timeframes for sending
an initial payment or notice of denial of
payment under these final rules may not
always align. The Departments seek to
minimize confusion about which types
of disputes should be resolved through
a plan or issuer’s internal claims and
appeals process instead of the IDR
process established by the No Surprises
Act.
The ERISA claims procedure
regulation requires group health plans
to notify a claimant of a benefit
determination for post-service claims
not later than 30 days after receipt of the
claim. A plan can generally extend this
period once for up to 15 days for matters
beyond the control of the plan,
including if the claimant fails to provide
information necessary to decide the
claim. In such cases, the plan may
notify the claimant they provided
insufficient information within 30 days,
and the plan must give the claimant at
least 45 days to provide additional
information. After the information is
provided, the plan has 15 days to make
a determination. Claims that result in an
adverse benefit determination (ABD)
may be appealed within 180 days
following receipt of the notice of the
ABD. The requirements of the ERISA
claims procedure regulation are
incorporated by reference in the internal
claims and appeals and external review
requirements added by the Affordable
Care Act to section 2719 of the PHS Act
and, therefore, subject to limited
exceptions, apply to all nongrandfathered group health plans and
health insurance issuers offering nongrandfathered coverage in the group and
individual markets.
If an initial claim submitted is a clean
claim, the timeframes for making the
relevant determinations would generally
be aligned under these interim final
rules and the ERISA claims procedure
regulation. However, if a claim is
submitted without sufficient
information to make a benefit
determination, under the ERISA claims
procedure regulation, the plan would
only have 15 days to make a
determination once the claim is
resubmitted with the additional

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information. Yet, under the No
Surprises Act and these interim final
rules, the plan would have up to 30
calendar days to send a notice of denial
of payment or an initial payment to the
out-of-network provider from the time
the claim is resubmitted with additional
information. Consistent with the
requirement that plans and issuers
provide an initial payment or notice of
denial of payment within 30 calendar
days of a provider or facility submitting
a clean claim, the Departments clarify
that while the ERISA claims procedure
regulation would require plans to make
a benefit determination within 15 days
of a claim being resubmitted with
additional information, plans and
issuers have 30 calendar days (which is
an additional 15 days) to make an initial
payment to an nonparticipating
provider or facility, or send a separate
notice of denial of payment.
The Departments note that there is
also a significant distinction between an
ABD, which may be disputed through a
plan’s or issuer’s claims and appeals
process, and a denial of payment or an
initial payment that is less than the
billed amount under these interim final
rules, which may be disputed through
the open negotiation process or through
the IDR process. In general, when
adjudication of a claim results in a
participant, beneficiary, or enrollee
being personally liable for payment to a
provider or facility, this determination
may be an ABD that can be disputed
through a plan’s or issuer’s claims and
appeals process. Conversely, when: (1)
The adjudication of a claim results in a
decision that does not affect the amount
the participant, beneficiary, or enrollee
owes; (2) the dispute only involves
payment amounts due from the plan to
the provider; and (3) the provider has no
recourse against the participant,
beneficiary, or enrollee, the decision is
not an ABD and the payment dispute
may be resolved through the open
negotiation or the IDR process. This
clarification is consistent with previous
guidance included in FAQs related to
the ERISA claims procedure regulation,
which have explained that with respect
to in-network benefits, the regulation
does not apply to requests by health
care providers for payments due to the
provider, rather than due to the
claimant, where the provider has no
recourse against the claimant for
amounts, in whole or in part, not paid
by the plan.67 The Departments
67 See Benefit Claims Procedure Regulation FAQs,
Q A–8, available at https://www.dol.gov/agencies/
ebsa/about-ebsa/our-activities/resource-center/faqs/
benefit-claims-procedure-regulation; see also Q C–
12 (clarifying that failure to make payment in whole

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acknowledge that there may be
instances where a participant,
beneficiary, or enrollee appeals an ABD
(such as, a determination of cost-sharing
amounts) through the claims and
appeals process concurrently with a
provider’s challenge to a payment
amount through the IDR process.
4. Surprise Billing Complaints
Regarding Group Health Plans and
Health Insurance Issuers
Section 9816(a)(2)(B)(iv) of the Code,
section 716(a)(2)(B)(iv) of ERISA, and
section 2799A–1(a)(2)(B)(iv) of the PHS
Act direct the Departments to establish
a process to receive complaints
regarding violations of the application
of QPA requirements by group health
plans and health insurance issuers
offering group or individual health
coverage. The Departments are of the
view that, in order to effectively enforce
the No Surprises Act balance billing
protections, the complaints process
should extend to all of the consumer
protection and balance billing
requirements as described in these
interim final rules that apply to group
health plans and health insurance
issuers offering group or individual
health coverage. As such, these interim
final rules establish a process by which
the Departments will receive complaints
regarding violations by plans and
issuers of the requirements under
sections 9816 and 9817 of the Code,
sections 716 and 717 of ERISA, and
sections 2799A–1 and 2799A–2 of the
PHS Act. The Departments seek
comment on whether the complaints
process should be restricted to the QPA
or extended as described in these
interim final rules.
The No Surprises Act also adds
section 2799B–4(b)(3) of the PHS Act,
which directs HHS to establish a
process to receive consumer complaints
regarding violations by health care
providers, facilities, and providers of air
ambulance services regarding balance
billing requirements under sections
2799B–1, 2799B–2, 2799B–3, and
2799B–5 of the PHS Act and to respond
to such complaints within 60 days. As
such, HHS is issuing HHS-only interim
final rules to establish a process by
which HHS will receive complaints
regarding violations of these
requirements by health care providers,
facilities, and providers of air
ambulance services.
For purposes of the complaint
processes for plans and issuers,
providers, facilities, and providers of air
ambulance services, these interim final
or in part due to the imposition of cost-sharing
requirements is an ABD).

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rules define a complaint as a written or
oral communication that indicates there
has been a potential violation by a plan
or issuer of sections 9816 or 9817 of the
Code, sections 716 or 717 of ERISA, or
sections 2799A–1, 2799A–2 of the PHS
Act, or a potential violation by a
provider, facility, or provider of air
ambulance services of sections 2799B–
1, 2799B–2, 2799B–3 and 2799B–5 of
the PHS Act, whether or not a violation
actually occurred. A complainant means
any individual, or their authorized
representative, who files a complaint as
defined in these interim final rules.
The Departments seek to minimize
the burden of filing a complaint and
seek to require only the information
necessary to process the complaint and
conduct an investigation if deemed
necessary. Therefore, these interim final
rules specify that the Departments will
consider a complaint to be filed on the
date on which the Departments receive
an oral or written statement with
information about the complaint
sufficient to identify the parties
involved (including the plan sponsor, if
the complaint involves a group health
plan), and the action or inaction that is
the subject of the complaint. The
information may also include the timing
of the alleged violation, and the state
where the alleged violation occurred.
The Departments seek comment on the
information needed to file a complaint,
and the definitions in this section.
The Departments have considered
whether a complaint should be filed
within a defined amount of time of the
alleged violation. The Departments
understand that timely action is
necessary to investigate and adjudicate
billing matters and therefore considered
whether complainants should be
required to file a complaint regarding an
alleged violation of the requirements in
these interim final rules by a plan,
issuer, health care provider or provider
of air ambulance services within 90 or
180 calendar days after learning of the
alleged violation. Without a time
requirement for filing a complaint, the
Departments may be restricted in
directing the complainant to other state
or federal resolution processes with
timing requirements such as the internal
and external claims review process as
described in section 2719 of the PHS
Act, or an appropriate IDR process as
defined in sections 9816 and 9817 of the
Code, sections 716 and 717 of ERISA,
and sections 2799A–1 and 2799A–2 of
the PHS Act. However, the Departments
are of the view that every complaint
should be processed and investigated as
appropriate to ensure that any necessary
enforcement action can be taken.
Therefore, these interim final rules do

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not include a time period upon which
a complaint must be filed. The
Departments seek comment on whether
a complainant should be required to file
a complaint within a given time period
and if so within what time period a
complaint should be filed for the
purpose of this section.
Section 2799B–4 of the PHS Act
directs HHS to respond to complaints
regarding violations of balance billing
protections by health care providers,
facilities, and providers of air
ambulance services within 60 days of
receipt. The Departments are of the view
that the timing for responding to
complaints regarding plans and issuers
should be the same as that for providers
to ensure timely resolution. Therefore,
upon receiving the information
necessary to file a complaint regarding
a plan or issuer, the Departments will
respond to complainants under section
9816(a)(2)(B)(iv) of the Code, section
716(a)(2)(B)(iv) of ERISA, and section
2799A–1(a)(2)(B)(iv) of the PHS Act no
later than 60 business days after the
complaint is received. Similarly, HHS
will respond to a processed complaint
regarding a health care provider,
facility, or provider of air ambulance
services under section 2799B–4 of the
PHS Act no later than 60 business days
after the complaint is received.
The response will be by oral or
written means, and will acknowledge
receipt of the complaint, notify the
complainant of their rights and
obligations under the complaints
process, and describe the next steps of
the complaint resolution process. The
Departments may also request any
additional information needed to
process the complaint. The requested
information may include an explanation
of benefits, processed claims,
information about the health care
provider, facility, or air ambulance
service involved; information about the
plan or issuer covering the individual;
information to support a determination
regarding whether the service was an
emergency service or non-emergency
service; the summary plan description,
policy, certificate, contract of insurance,
membership booklet, outline of coverage
or other evidence of coverage the plan
or issuer provides to their participant,
beneficiary, or enrollee; documents
regarding asserted facts in the complaint
that are in the possession of or
otherwise attainable by the
complainant; or any other information
the Departments may need to make a
determination of facts for an
investigation.
HHS may also request additional
information to process a complaint
under section 2799B–4 of the PHS Act

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regarding a health care provider,
facility, or provider of air ambulance
services. This information may include,
but is not limited to, the bills or network
status of a health care provider, health
care facility, or provider of air
ambulance services; information
regarding the health care plan or health
insurance coverage of a participant,
beneficiary or enrollee; information to
support a determination regarding
whether the service was an emergency
service or non-emergency service;
documents that support the asserted
facts in the complaint in the possession
of, or otherwise attainable by the
complainant; or any other information
HHS needs to make a determination of
facts for an investigation. The
Departments seek comment on
additional information that may be
required to process a complaint.
The response may be provided
directly upon receipt of the complaint,
or it may be provided afterwards,
though no later than 60 business days
after the complaint is received. The next
steps of the complaint resolution
process may include referring the
complainant to another appropriate
state or federal resolution process,
referring a complainant to the state or
federal regulatory authority with
enforcement jurisdiction, or initiating
an investigation for enforcement action.
The Departments will make reasonable
efforts consistent with agency practices
to notify the complainant of the
outcome of such investigations or
enforcement actions, including an
explanation of the findings, resolution,
or any corrective action taken. The
Departments will also make reasonable
efforts to notify the complainant if the
complaint is transferred to another state
or Federal regulatory authority. The
Departments seek comment on whether
a complainant should receive the
notification of the outcome of the
complaint within a given time period
and if so within what time period a
complainant should receive the notice
for the purpose of this section.
The Departments intend to provide
the public with a seamless experience
for filing complaints by creating one
system to intake all complaints on
behalf of all complainants under section
9816(a)(2)(B)(iv) of the Code, section
716(a)(2)(B)(iv) of ERISA, and sections
2799A–1(a)(2)(B)(iv) and 2799B–4 of the
PHS Act. The Departments understand
that a complainant may not know which
Department has enforcement
jurisdiction; therefore, the Departments
intend to provide one system that will
direct complaints to the appropriate
Department for processing,
investigation, and enforcement action as

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necessary. The Departments will release
guidance on where the public can file
complaints and welcome comments on
the operations, protections, user
experience, or other facets of this
complaint system. The Departments also
seek comment on ways to ensure
consumers are aware and know how to
use this system.
The Departments seek to uphold
Executive Order 13985 and all civil
rights protections regarding nondiscrimination and accessibility, as
noted in prior sections. The
Departments will make all reasonable
efforts to implement a robust complaint
process, including but not limited to,
acknowledgement of receipt of a
complaint, explanations of rights and
information requested, explanations of
findings, and referrals to other
authorities. The Departments will
ensure that the complaints process is
accessible to all individuals, that
communication and language needs are
met, and that all individuals are able to
understand the options available to
them and information required of them.
The Departments seek comment from
individuals in underserved and rural
communities, minority communities,
and persons otherwise adversely
affected by persistent poverty or
inequality on specific barriers to the
complaint process and solutions to
address these barriers and ensure
equitable access to all aspects of the
complaint processes.
C. Choice of Health Care Professionals
In the Patient Protections Final Rule,
the Departments finalized regulations
addressing the provisions in section
2719A of the PHS Act, regarding patient
protections related to choice of health
care professional and emergency
services.68 As explained earlier, the No
Surprises Act amended section 2719A
of the PHS Act to sunset when the new
emergency services protections under
the No Surprises Act take effect. The
provisions of section 2719A of the PHS
Act will no longer apply with respect to
plan years beginning on or after January
1, 2022.69 The No Surprises Act recodified the patient protections related
to choice of health care professional in
newly added section 9822 of the Code,
FR 72191 (November 18, 2015).
2719A(e) of the PHS Act states, ‘‘The
provisions of this section shall not apply with
respect to a group health plan, health insurance
issuers, or group or individual health insurance
coverage with respect to plan years beginning on or
on January 1, 2022.’’ The Departments interpret
subsection (e) to sunset section 2719A for plan
years beginning on or after January 1, 2022.

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section 722 of ERISA, and section
2799A–7 of the PHS Act.
To reflect these statutory
amendments, these interim final rules
add a sunset clause to the current
patient protection provisions codified in
the Patient Protections Final Rule, and
re-codify the provisions related to
choice of health care professional
without substantive change at 26 CFR
54.9822–1T, 29 CFR 2590.722, and 45
CFR 149.310. These interim final rules
make minor technical edits to the
original provisions for clarity.
The Departments note that, although
the substantive requirements of these
regulations have not changed, the No
Surprises Act extends the applicability
of the patient protections for choice of
health care professionals to
grandfathered health plans. The patient
protections under section 2719A of the
PHS Act apply to only nongrandfathered group health plans and
health insurance issuers offering nongrandfathered group or individual
health insurance coverage. In contrast,
the patient protections under the No
Surprises Act apply generally to all
group health plans and group and
individual health insurance coverage,
including grandfathered health plans.70
Therefore, the requirements regarding
patient protections for choice of health
care professional under these interim
final rules will newly apply to
grandfathered health plans for plan
years beginning on or after January 1,
2022. Until the requirements under
section 9822 of the Code, section 722 of
ERISA, and section 2799A–7 of the PHS
Act and these interim final rules become
applicable, non-grandfathered group
health plans and health insurance
issuers offering non-grandfathered
group or individual health insurance
coverage must continue to comply with
the applicable requirements under
section 2719A of the PHS Act and its
implementing regulations.
D. Applicability
These interim final rules generally
apply to group health plans and health
insurance issuers offering group or
individual health insurance coverage
with respect to plan years (in the
70 Section 2719A was added to the PHS Act by
the Affordable Care Act. Section 1251 of the
Affordable Care Act provides that certain
requirements, including those in section 2719A of
the PHS Act, do not apply to grandfathered health
plans. The No Surprises Act does not include a
comparable exception for grandfathered health
plans. Furthermore, section 103(d)(2) of the No
Surprises Act amends section 1251(a) of the
Affordable Care Act to clarify that the new and
recodified patient protections provisions, including
those related choice of choice of health care
professional, apply to grandfathered health plans.

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individual market, policy years)
beginning on or after January 1, 2022.
The term ‘‘group health plan’’ includes
both insured and self-insured group
health plans. Group health plans
include private employment-based
group health plans subject to ERISA,
non-federal governmental plans (such as
plans sponsored by states and local
governments) subject to the PHS Act,
and church plans subject to the Code.
Individual health insurance coverage
includes coverage offered in the
individual market, through or outside of
an Exchange, and includes student
health insurance coverage as defined at
45 CFR 147.145. In addition, as
discussed further in section V of the
preamble, under the OPM interim final
rules, FEHB carriers must comply with
the Departments’ interim final rules,
subject to OPM regulation and contract
provisions.
The No Surprises Act amended
section 1251(a) of the Affordable Care
Act to specify that sections 2799A–1,
2799A–2, and 2799A–7 of the PHS Act
apply to grandfathered health plans for
plan years beginning on or after January
1, 2022. Therefore, these interim final
rules apply to grandfathered health
plans (as defined in 26 CFR 54.9815–
1251, 29 CFR 2590.715–1251, and 45
CFR 147.140). In addition, these interim
final rules apply to certain nongrandfathered health insurance coverage
in the individual and small group
markets with respect to which CMS has
announced it will not take enforcement
action with respect to certain specified
market requirements even though the
coverage is out of compliance with
those requirements (sometimes referred
to as grandmothered or transitional
plans).71
These interim final rules do not apply
to health reimbursement arrangements,
or other account-based plans, as
described in 26 CFR 54.9815–
2711(d)(6)(i), 29 CFR 2590.715–
2711(d)(6)(i), and 45 CFR
147.126(d)(6)(i), that make
reimbursements subject to a maximum
fixed dollar amount for a period, as the
benefit design of such plans makes
concepts related to surprise billing and
choice of health care professionals
inapplicable.
By statute, certain plans and coverage
are not subject to these interim final
rules. This includes a plan or coverage
71 CMS Insurance Standards Bulletin Series—
INFORMATION—Extension of Limited NonEnforcement Policy through 2022 (January 19,
2021), available at https://www.cms.gov/files/
document/extension-limited-non-enforcementpolicy-through-calendar-year-2022.pdf.

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consisting solely of excepted benefits,72
as well as short-term, limited-duration
insurance. Excepted benefits are
described in section 9832 of the Code,
section 733 ERISA, and section 2791 of
the PHS Act. Under section 2791(b)(5)
of the PHS Act, short-term, limitedduration insurance is excluded from the
definition of individual health
insurance coverage and is, therefore,
exempt from these interim final rules
and the statutory provisions the
regulations implement. Short-term,
limited-duration insurance is defined in
regulations at 26 CFR 54.9801–2, 29
CFR 2590.701–2, and 45 CFR 144.103.
These interim final rules do not apply
to retiree-only plans. ERISA section
732(a) generally provides that part 7 of
ERISA—and section 9831(a) of the Code
generally provides that chapter 100 of
the Code—does not apply to plans with
less than two participants who are
current employees (including retireeonly plans, which cover less than two
participants who are current
employees). Title XXVII of the PHS Act,
as amended by the Affordable Care Act,
no longer contains a parallel provision
at section 2721(a) of the PHS Act.
However, as explained in prior
rulemaking, HHS will not enforce the
requirements of title XXVII of the PHS
Act with respect to non-federal
governmental retiree-only plans and
encourages states to adopt a similar
approach with respect to health
insurance coverage of retiree-only
plans.73 HHS intends to continue to
follow this same approach, including
with respect to the new market reforms
established in the No Surprises Act.
These interim final rules are generally
applicable to traditional indemnity
plans, meaning plans that do not have
networks of providers or facilities.
However, the Departments recognize
that indemnity plans may have unique
benefit designs that cause certain
provisions of these interim final rules
not to be relevant. For example, the
requirements regarding balance billing
for non-emergency services provided by
nonparticipating providers at certain
participating facilities would never be
triggered if a plan does not have a
network of participating facilities. On
the other hand, such requirements could
be triggered by plans that have
participating facilities but do not have
participating providers, either for
certain provider types or at all. In
addition, requirements that are
unrelated to whether a plan or coverage
has a network of participating providers
72 Section 9831 of the Code, section 9832 of
ERISA, and section 2722 of the PHS Act.
73 75 FR 34537, 34540 (June 17, 2010).

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or facilities, such as the requirement
that emergency services be covered
without the need for any prior
authorization determination, even if the
services are provided on an out-ofnetwork basis, are applicable to
traditional indemnity plans.
The Departments seek comment as to
whether there are any other plans with
unique benefit designs that should be
exempt from all or some of these interim
final rules.
IV. Overview of Interim Final Rules—
Department of Health and Human
Services
A. Preventing Surprise Medical Bills
1. In General
In addition to the new provisions
applicable to group health plans and
health insurance issuers, discussed in
section III of this preamble, the No
Surprises Act adds a new Part E of title
XXVII of the PHS Act establishing
requirements applicable to health care
providers, facilities, and providers of air
ambulance services. Specifically, the No
Surprises Act adds new sections 2799B–
1, 2799B–2, 2799B–3, and 2799B–5 of
the PHS Act, which protect participants,
beneficiaries, and enrollees in group
health plans and group and individual
health insurance coverage from balance
bills by prohibiting nonparticipating
providers, facilities, and providers of air
ambulance services from billing or
holding liable individuals for an amount
that exceeds in-network cost sharing
determined in accordance with the
balance billing provisions in
circumstances where the balance billing
provisions apply. This includes: (1)
When emergency services are provided
by a nonparticipating provider or
nonparticipating emergency facility; (2)
when non-emergency services are
provided by a nonparticipating provider
at a participating health care facility;
and (3) when air ambulance services are
furnished by a nonparticipating
provider of air ambulance services.
Under 5 U.S.C. 8902(p), as added by
the No Surprises Act, sections 2799B–1,
2799B–2, 2799B–3, and 2799B–5 of the
PHS Act apply to a health care provider,
a facility, and a provider of air
ambulance services with respect to a
covered individual in a health benefits
plan offered by a FEHB carrier in the
same manner as they apply with respect
to a participant, beneficiary, or enrollee
in a group health plan or group or
individual health insurance coverage
offered by a health insurance issuer.
These interim final rules apply to a
health care provider, a facility, and a
provider of air ambulance services in

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this same manner.74 The applicability of
these interim final rules with respect to
FEHB carriers is discussed in more
detail in section V of this preamble.
With respect to post-stabilization
services provided by nonparticipating
emergency facilities or nonparticipating
providers, and non-emergency services
furnished by nonparticipating providers
at participating health care facilities
(including off-site nonparticipating
providers who furnish items or services
that an individual receives as part of a
visit to such health care facility), the
prohibitions on balance billing do not
apply if certain notice is provided to the
participant, beneficiary, or enrollee, and
the individual acknowledges receipt of
the information in the notice and
consents to waive the balance billing
protections with respect to the
nonparticipating emergency facility or
nonparticipating providers to which the
notice and consent apply. Under the No
Surprises Act and these interim final
rules, with respect to certain types of
non-emergency services furnished by
nonparticipating providers in a
participating health care facility, the
notice and consent provisions do not
apply, meaning the prohibitions on
balance billing apply without exception.
Given that the statute and these
interim final rules authorize HHS to
impose civil money penalties on
facilities and providers that violate
these requirements, nonparticipating
providers should take steps necessary to
ensure compliance by, among other
actions, determining whether a given
item or service is being furnished under
circumstances that would trigger the
surprise billing protections. For
example, nonparticipating providers
furnishing non-emergency services at a
facility must determine whether the
facility is a participating health care
facility to determine whether balance
billing protections apply. Relatedly,
nonparticipating providers and
nonparticipating emergency facilities
will need to timely communicate with
plans and issuers regarding when the
limitations on cost sharing in these
interim final rules do not apply because
the notice and consent criteria
(described more fully elsewhere in this
preamble) have been satisfied. These
HHS interim final rules address the
steps providers and facilities must take
to ensure the balance billing and costsharing protections are applied
appropriately and consistently with the
statute.
74 For purposes of these interim final rules,
references to participants, beneficiaries, and
enrollees should be construed to include covered
individuals in a FEHB plan.

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HHS also recognizes that compliance
with these requirements may require
nonparticipating providers and
nonparticipating emergency facilities to
refrain from billing an individual
directly, even in cases that are not
subject to these requirements. For
example, the protections applicable to
non-emergency services provided by a
nonparticipating provider in a
participating health care facility apply
only with respect to services for which
benefits are provided or covered by the
plan or coverage. A nonparticipating
provider may not have the information
necessary to determine whether the
services are a covered benefit under the
plan or coverage. As a result, the
nonparticipating provider may need to
bill the plan or issuer directly for the
services in order to determine whether
the protections apply. Otherwise, the
provider risks violating the statute and
these interim final rules by billing
individuals. HHS understands that
nonparticipating providers and facilities
frequently bill individuals directly for
out-of-network services, leaving the
individual to submit the bill to the plan
or coverage. HHS seeks comment on the
impact this change will have on
nonparticipating providers and
facilities, and on plans and issuers
receiving bills from nonparticipating
providers and facilities.
In instances where a provider or
facility does balance bill a participant,
beneficiary, or enrollee for services in
violation of the statute and these interim
final rules, the Secretary of HHS (the
Secretary) may impose civil money
penalties in states where HHS is directly
enforcing the balance billing provisions
with respect to health care providers,
facilities, and providers of air
ambulance services. However, the
statute provides that the Secretary shall
waive the penalties with respect to a
health care provider, facility, or
provider of air ambulance services who
does not knowingly violate, and should
not have reasonably known it violated,
the provisions, with respect to a
participant, beneficiary, or enrollee, if
such provider or facility, within 30 days
of the violation, withdraws the bill that
was in violation of such provision and
reimburses the health plan or
individual, as applicable, in an amount
equal to the difference between the
amount billed and the amount allowed
to be billed under the provision, plus
interest, at an interest rate determined
by the Secretary. HHS intends to
address enforcement of the
requirements of the No Surprises Act
applicable to health care providers,
facilities, and providers of air

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ambulance services in future
rulemaking.
2. Notice and Consent Exception to
Prohibition on Balance Billing
Under the No Surprises Act and these
interim final rules, the protections that
limit cost sharing and prohibit balance
billing do not apply to certain nonemergency services or to certain poststabilization services provided in the
context of emergency care, if the
nonparticipating provider or
nonparticipating emergency facility
furnishing those items or services
provides the participant, beneficiary, or
enrollee, with notice, the individual
acknowledges receipt of the information
in the notice, and the individual
consents to waive the balance billing
protections with respect to the
nonparticipating emergency facility or
nonparticipating providers named in the
notice.
Non-emergency services furnished by
a nonparticipating provider at a
participating health care facility are
exempt from cost sharing protections
and balance billing protections when
the notice and consent requirements are
met. In contrast, the notice and consent
exception does not apply to emergency
services, other than post-stabilization
services, under certain circumstances,
or air ambulance services. A
nonparticipating provider or
nonparticipating emergency facility may
obtain notice and consent from the
individual in order to balance bill for
post-stabilization services only in the
case where a participant, beneficiary, or
enrollee has received emergency
services and that individual’s condition
has stabilized, and then only if certain
additional conditions are met. Such
conditions are described later in this
preamble and codified at 45 CFR
149.410(b).
If an individual receives a notice, but
does not provide (or revokes) consent to
waive their balance billing protections,
those protections remain in place. A
provider or facility may, subject to other
state or federal laws, refuse to treat the
individual if the individual does not
consent.75 However, the cost-sharing
and balance billing protections
applicable to plans, issuers, providers
and facilities would apply with respect
to any items or services furnished by the
provider or facility subsequent to the
75 HHS is aware that some providers and facilities
charge fees for cancelled appointments. HHS is of
the view that an individual cannot provide consent
freely if a provider or facility will require the
individual to pay a fee if the appointment is
cancelled because the individual refuses or revokes
consent.

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provision of the notice, and absent
consent.
The requirements related to the notice
and consent exception are set forth in
section 2799B–2 of the PHS Act, as
added by the No Surprises Act, and
implemented at 45 CFR 149.410 and 45
CFR 149.420 of the HHS interim final
rules, describing the requirements for
post-stabilization services and nonemergency services, respectively. These
interim final rules outline the
requirements related to the content,
method, and timing of the notice and
consent communications; requirements
related to language access; exceptions to
the applicability of the notice and
consent process; requirements for the
retention of notice and consent
documents; and requirements to notify
the plan or issuer regarding consent
provided by the participant, beneficiary,
or enrollee.
i. Standards for Notice
The No Surprises Act and these
interim final rules allow an individual
to waive balance billing protections
only after receiving a written notice that
includes detailed information designed
to ensure that individuals knowingly
accept out-of-pocket charges (including
charges associated with balance bills)
for care received from a
nonparticipating provider or
nonparticipating emergency facility. In
HHS’s view, the option to consent to
waive balance billing protections may
be valuable to individuals in certain
instances where they knowingly and
purposefully seek care from a
nonparticipating provider. For example,
an individual with a complex health
condition may want to be treated by a
specialist who is not in their plan’s
network. If that specialist will not treat
the individual unless the specialist can
bill the individual directly for the care
(and balance bill the individual), that
individual may want to waive the
balance billing protections. HHS seeks
comment on striking the appropriate
balance between allowing a specialist to
refuse to treat an individual unless the
specialist can balance bill the
individual, while ensuring that the
individual is not being pressured into
waiving the balance billing protections.
In HHS’s view, it is important that these
consumer protections do not present a
barrier to obtaining out-of-network care,
when an individual knowingly seeks
out such care. However, it is equally
important that individuals are not
unknowingly subject to balance billing.
Therefore, the No Surprises Act and
these interim final rules allow an
individual to waive balance billing
protections in limited circumstances

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only, and only if the nonparticipating
providers or nonparticipating
emergency facility have provided the
participant, beneficiary, or enrollee with
appropriate notice explaining the
applicable consumer protections and
the implications of providing consent.
Section 2799B–2(d)(1)(A) of the PHS
Act requires providers and facilities to
use a written notice specified by HHS in
guidance. Therefore, these interim final
rules require providers and facilities to
provide the notice using the standard
notice document provided by HHS in
guidance. The standard notice
document will contain the elements
required by the statute in a manner that
is intended to be easy to read and
comprehend. The notice must be
provided in accordance with guidance
issued by HHS. HHS is of the view that
requiring use of the standard notice will
help to ensure that the notice includes
the content that is required to be
included in the notice under the No
Surprises Act and these interim final
rules. Providers and facilities will need
to tailor the document in each case to
include information specific to the
individual (for example, by identifying
the provider or facility, as applicable,
and adding the good faith estimated
amount).
HHS is concerned that individuals
may be less likely to review the notice
carefully if it is embedded within other
information or provided with additional
consent forms. Therefore, these interim
final rules require that the notice be
provided with the consent document,
and together these documents be given
physically separate from, and not
attached to or incorporated into any
other documents. Providers and
facilities must provide the notice within
the required timeframe. The notice must
be written and provided on paper, or, as
practicable, electronically, as selected
by the individual. The notice must meet
applicable language access
requirements, as described in this HHS
interim final rule. A participating health
care facility may provide the notice on
behalf of the nonparticipating
provider.76
Authorized Representatives
The notice may be provided to the
individual’s authorized representative
76 However, if a facility that has agreed to provide
the notice on behalf of the nonparticipating
provider fails to provide the notice and obtain
consent, or provides notice and obtains consent in
a manner that does not satisfy the regulatory
requirements in these interim final rules, the notice
and consent criteria would not be considered to be
met. Therefore, the cost-sharing and balance billing
protections would continue to apply to the items
and services furnished by the nonparticipating
provider.

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instead of the individual, and consent
may be provided by the authorized
representative on behalf of the
individual. These interim final rules
specify that for purposes of 45 CFR
149.410 and 149.420, an authorized
representative is an individual
authorized under state law to provide
consent on behalf of the participant,
beneficiary, or enrollee, provided that
the individual is not a provider
affiliated with the facility or an
employee of the facility, unless such
provider or employee is a family
member of the participant, beneficiary,
or enrollee. Although treating providers
may be authorized under state law to
provide consent to treatment, HHS is of
the view that providers should generally
not be permitted to receive notice or
provide consent regarding treatment by
a nonparticipating provider or facility
because of the strong likelihood of an
inherent financial or professional
conflict of interest. These same concerns
extend to employees of the facility at
which the items or services are
furnished. HHS is also of the view that
these concerns are not warranted for
providers or facility employees that are
family members of the individual,
because of their presumed interest in
the well-being of the individual, or
providers that are unaffiliated with the
provider or facility furnishing the care.
HHS is of the view that these limitations
provide important consumer protections
to ensure that an individual’s
authorized representative is acting in
the individual’s best interest rather than
the interests of the provider or facility.
HHS seeks comment on whether and
how the term ‘‘family member’’ should
be defined. HHS is sensitive to concerns
that some individuals may not have a
familial relation formally recognized
under applicable state law, or other
documented legal partnership with
individuals whom they consider family.
Therefore, when interpreting this
requirement, HHS will construe the
term ‘‘family member’’ broadly to
include such individuals prior to the
issuance of additional guidance.
Timing of Notice
In order to ensure that a participant,
beneficiary, enrollee, or authorized
representative has an opportunity to
properly review and consent to a notice
to receive items or services furnished by
a nonparticipating provider or
nonparticipating emergency facility and
waive balance billing protections, the
provider or facility must provide such a
notice in the timeframe specified in the
statute and this interim final rule. As
specified in section 2799B–2(d) of the
PHS Act, if an individual schedules an

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appointment for such items or services
at least 72 hours before the date of the
appointment, the provider or facility
must provide the notice to the
individual, or their authorized
representative, no later than 72 hours
before the date of the appointment; and
if an individual schedules an
appointment for such items or services
within 72 hours of the date of the
appointment, the provider or facility
must provide the notice to the
individual, or their authorized
representative, on the day that the
appointment is made. In addition, these
interim final rules specify that in the
situation where an individual is
provided the notice on the same day
that the items or services are furnished,
providers and facilities are required to
provide the notice no later than 3 hours
prior to furnishing items or services to
which the notice and consent
requirements apply.
This 3-hour requirement is intended
to address situations where an
individual might be asked to provide
consent immediately before a provider
furnishes the item or service, which
may prevent their consent from being
truly voluntary. Stakeholders have
recommended that notice and consent
procedures be unavailable when an
individual visits a participating facility
and receives care from a
nonparticipating provider from whom
the individual did not seek out services
(for example, if a specialist furnishes an
unexpected consultation on the
recommendation of the attending
physician). Stakeholders expressed
concern that such providers might
provide the notice at the time they
appear for the consultation, and the
individual might feel compelled to
consent to receive care. HHS is of the
view that the requirement that the
notice be provided no later than 3 hours
prior to furnishing items or services
helps to ensure individuals can
voluntarily provide informed consent,
while not removing the informed
consent option entirely in instances
where the appointment is made the
same day as the date the services are
scheduled. HHS seeks comment on
whether such a time limit is a
reasonable approach, as well as whether
the 3 hours’ time requirement should be
shorter or longer, in order to best ensure
that consent is freely given while also
facilitating timely access to care. For
example, HHS is interested in
understanding if there are situations
where this time requirement may
unduly delay access to urgently
necessary care, including in the post-

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stabilization care context.77
Alternatively, HHS is interested in
understanding if more time may be
necessary for an individual to read,
understand, and consider their options,
including considering whether they can
resolve prior authorization or other care
management limitations, before
voluntarily consenting to treatment.
HHS is also interested in whether these
timing requirements present barriers to
providers’ and facilities’ ability to
comply with the requirement that the
notice and consent documents be
provided to the individual in paper or,
as practicable, electronic form, as
selected by the individual.
Content of Notice
As stated previously, a provider or
facility must provide the written notice
using the form specified by HHS in
guidance, customized to include the
information specified in 45 CFR
149.420(d) (and 45 CFR 149.410(b)(2),
for post-stabilization services, as
applicable).
The notice must state that the health
care provider furnishing the items or
services is a nonparticipating provider,
or that the health care facility furnishing
the items or services is a
nonparticipating emergency facility, as
applicable, with respect to the health
plan or coverage. The provider or
facility will need to customize the form
to identify the provider or facility by
name. This will help ensure individuals
understand for which specific providers
or facilities they would be waiving their
balance billing protections.
The notice must include the good
faith estimated amount that such
nonparticipating provider or
nonparticipating emergency facility may
charge the individual for the items and
services involved, including any item or
service that the nonparticipating
provider reasonably expects to provide
in conjunction with such items and
services. In the case of a
nonparticipating emergency facility, the
notice must include the good faith
estimate for such items or services that
would reasonably be expected to be
provided by the nonparticipating
emergency facility or by
nonparticipating providers as part of the
visit at such facility. HHS is including
the requirement regarding disclosing
77 A provider or facility is never required to
provide notice and seek consent from a participant,
beneficiary, or enrollee. To the extent a provider is
concerned that the 3 hours’ prior requirement will
result in a delay in care that is detrimental to the
individual, the provider or facility can furnish the
items or services, subject to the balance billing
protections, rather than providing notice and
seeking consent to waive the protections.

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items and services reasonably expected
to be provided in order to ensure that
the participant, beneficiary, or enrollee
has an accurate understanding of the
cost of care. As discussed in section
IV.A.2.iv of this preamble, individuals
cannot waive the balance billing
protections for items or services
furnished as a result of unforeseen,
urgent medical needs that arise at the
time an item or service is furnished for
which the nonparticipating provider or
nonparticipating facility satisfied the
notice and consent criteria.
Nonparticipating providers who are
providing this notice are required to
provide a good faith estimate for only
the items or services that they would be
furnishing and are not required to
provide a good faith estimate for items
or services furnished by other providers
at the facility. However, if a
nonparticipating provider has not
satisfied the notice and consent criteria,
balance billing and cost-sharing
protections will apply to the individual
with respect to items and services
furnished by that nonparticipating
provider, even if a different
nonparticipating provider has satisfied
the notice and consent criteria with
respect to the same visit. If they choose,
multiple nonparticipating providers that
are furnishing related items and services
for an individual may provide a single
notice to the individual, provided that:
(1) Each provider’s name is specifically
listed on the notice document; (2) each
provider includes in the notice a good
faith estimate for the items and services
they are furnishing, and the notice
specifies which provider is providing
which items and services within the
good faith estimate; and (3) the
individual has the option to consent to
waive balance billing protections with
respect to each provider separately.
HHS is of the view that an individual
cannot consent to waive balance billing
and cost-sharing protections unless they
have been informed of their potential
liability with respect to both the facility
and provider charges related to
receiving post-stabilization services at a
nonparticipating emergency facility.
Therefore, nonparticipating emergency
facilities must include in the written
notice the good faith estimated amount
that the participant, beneficiary, or
enrollee may be charged for items or
services furnished by the
nonparticipating emergency facility or
by nonparticipating providers with
respect to the visit at such facility
(including any item or service that is
reasonably expected to be furnished by
the nonparticipating emergency facility
or nonparticipating providers in
conjunction with such items or

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services). HHS seeks comment regarding
potential challenges nonparticipating
emergency facilities may have in
coordinating the development of a good
faith estimate on behalf of both the
facility and providers. To the extent that
the nonparticipating facility omits from
the good faith estimate information
about items and services provided by a
nonparticipating provider, the notice
and consent criteria will be not be
considered met for items and services
furnished by that provider, and the
requirements in 45 CFR 149.410(a) (and
the corresponding requirements on
plans and issuers) would apply.
HHS is aware that nonparticipating
providers and nonparticipating
emergency facilities generally are
unable to calculate what an individual’s
final out-of-pocket costs (inclusive of
balance bills) will be for items and
services partially or wholly covered by
the individual’s plan or coverage.
Therefore, the good faith estimated
amount should reflect the amount the
provider or facility expects to charge for
furnishing such items or services, even
if the provider or facility intends to bill
the plan or coverage directly. In
calculating this good faith estimated
amount, the provider or facility is
expected to apply the same process and
considerations used to calculate the
good faith estimate that is required
under section 2799B–6(2) of the PHS
Act. HHS seeks comment regarding the
method by which this good faith
estimated amount should be calculated,
and anticipates addressing this
requirement in future rulemaking. The
notice must make clear that the
provision of the good faith estimate in
the notice, or the individual’s consent to
be treated, does not constitute a contract
with respect to the charges estimated for
such items and services, or a contract
that binds the participant, beneficiary,
or enrollee to be treated by that provider
or facility. HHS seeks comment
regarding whether the provider or the
facility should be required to include
information about what may be covered
by the individual’s plan or coverage and
an estimate of the individual’s out-ofpocket costs.
The notice must provide information
about whether prior authorization or
other care management limitations may
be required in advance of receiving such
items or services at the facility or from
the provider. HHS recognizes that there
may be challenges for nonparticipating
providers or facilities to identify what
prior authorization and other care
management limitations may apply with
respect to a plan or coverage in which
they do not participate. Therefore,
providers and facilities may provide

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general information in order to satisfy
this requirement, but to the extent
possible, HHS encourages them to
contact the issuer or plan about any
such limitations so that they can
include specific information in the
notice. HHS interprets this statutory
provision to require information on
prior authorization or care management
requirements to extend to care furnished
by both providers and facilities, in order
for participants, beneficiaries, and
enrollees to understand all requirements
associated with their care before they
consent to treatment and balance
billing. Requiring that the notice
include specificity regarding prior
authorization or care management
requirements could improve the
usefulness of the information to
individuals compared to general
information about what requirements
may apply, but may make providing
notices overly burdensome for providers
and facilities. HHS seeks comment on
whether providers and facilities should
instead be required to include in the
notice specific information about any
prior authorization and care
management requirements that apply to
any items and services covered under
the notice. HHS also seeks comment on
barriers or other burdens facing
nonparticipating providers or facilities
in obtaining this information from a
plan or issuer.
The notice must clearly state that the
individual is not required to consent to
receive such items or services from such
nonparticipating provider or
nonparticipating emergency facility.
The notice must state that the
individual may instead seek care from
an available participating provider or at
a participating emergency facility, with
respect to the plan or coverage, as
applicable, and that in such cases, innetwork cost-sharing amounts will
apply.
In cases where post-stabilization
services are being furnished by a
nonparticipating provider at a
participating emergency facility, the
notice must include a list of any
participating providers at the
participating emergency facility who are
able to furnish the items or services
involved. The notice must inform the
individual that they may be referred, at
their option, to such a participating
provider. HHS seeks comment regarding
the format and content of the referral list
to be included in the notice, including
any challenges that providers may have
in providing this information, and any
further requirements that should be
applied to providers when furnishing
this information to the individual.

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ii. Standards for Consent
In order to meet the notice and
consent requirements of the No
Surprises Act and these interim final
rules, the nonparticipating provider,
participating health care facility on
behalf of the nonparticipating provider,
or nonparticipating emergency facility
must obtain from the participant,
beneficiary, or enrollee the individual’s
acknowledgment that they consent to be
treated and balance billed by the
nonparticipating emergency facility or
nonparticipating provider under
circumstances where the individual
elects to receive such items or services.
The consent must be provided
voluntarily, meaning that the individual
has consented freely, without undue
influence, fraud, or duress. An
incomplete consent document will be
treated as a lack of consent and balance
billing protections will still apply.
As with the notice document,
providers and facilities must use the
standard consent document specified by
HHS in guidance, and the consent
document must be provided in
accordance with such guidance. The
consent document, specified in
guidance, contains the information (or
fillable fields for the information)
required to be included in the consent
form under these interim final rules,
and described further in this section of
the preamble. Providers and facilities
will need to tailor the document to
include information specific to the
individual. In addition, as discussed
previously, these interim final rules
require that the consent be accompanied
by the notice document, and that these
documents be given together at the same
time, physically separate from and not
attached to or incorporated into any
other documents. The consent
document must be signed (including by
electronic signature) by the individual,
or the individual’s authorized
representative.
The nonparticipating provider,
participating health care facility on
behalf of the nonparticipating provider,
or nonparticipating emergency facility
must provide the individual with a copy
of the signed notice and consent inperson, or through mail or email, as
selected by the individual.
The notice and consent documents
must meet applicable language access
requirements, as described in these
interim final rules. The signed consent
document must acknowledge that the
individual has been provided with the
written notice as described in these
interim final rules, in the form selected
by the individual. The signed consent
document must also acknowledge that

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the individual has been informed that
the payment made by the individual
might not accrue toward meeting any
limitation that the plan or coverage
places on cost sharing, including an
explanation that the payment might not
apply to an in-network deductible or
out-of-pocket maximum under the plan
or coverage.
The consent document must state
that, by signing the consent document,
the individual agrees to be treated by
the nonparticipating provider or
nonparticipating emergency facility and
understands that the individual may be
balance billed and subject to costsharing requirements that apply to
services furnished by nonparticipating
providers or nonparticipating
emergency facilities. In the case of a
nonparticipating provider seeking
consent, by signing the consent
document, the individual agrees to
waive balance billing and cost-sharing
protections for only the items or
services furnished by the provider or
providers specifically named in the
notice. In HHS’s view, an individual
cannot provide informed consent to
waive balance billing protections with
respect to an unnamed provider, as the
individual would not be on notice that
the individual may be balance billed for
items or services furnished by that
provider. In addition, the individual
may choose to consent to waive balance
billing protections with respect to items
or services furnished by none, some, or
all of the nonparticipating providers
listed in the notice.
The signed consent document must
include the date on which the
individual received the written notice
and the date on which the individual
signed such consent to be furnished the
items or services covered in the notice.
In order to ensure that consent is
provided prior to when the item or
service is received, HHS also requires
that the signed consent document
include the time at which the individual
signed the consent.
The signed consent provided by the
individual constitutes the individual’s
consent to the receipt of the information
contained in the notice document, and
includes an acknowledgement that they
may be balance billed for the receipt of
the items or services. The consent does
not constitute a contractual agreement
with regard to any estimated charge or
amount included in the notice or
consent document, or a contract that
binds the participant, beneficiary, or
enrollee to be treated by that provider or
facility. Consent obtained by the
provider or facility under this notice
and consent process in no way
substitutes for or modifies requirements

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for informed medical consent otherwise
required of the provider or facility,
under state law or codes of medical
ethics.
The participant, beneficiary, or
enrollee may revoke consent by
notifying the provider or facility in
writing prior to the furnishing of the
items or services. If an individual
revokes consent, the balance billing
protections apply to applicable items or
services provided after the revocation as
if consent was never provided. HHS is
of the view that the option to revoke
consent is a critical safeguard to ensure
that balance billing protections are
waived only when individuals
knowingly, purposefully, and freely
provide informed consent. HHS seeks
comment on whether additional
rulemaking or guidance is needed on
how an individual can revoke consent.
iii. Language Access
A nonparticipating provider or
nonparticipating emergency facility
providing a participant, beneficiary, or
enrollee, or such individual’s
authorized representative, with a notice
under section 2799B–2(d) of the PHS
Act must make the notice available in
any of the 15 most common languages
in the geographic region in which the
applicable facility is located. HHS is of
the view that individuals cannot
provide meaningful consent if they
cannot understand the information
provided in the written notice and
consent documents. These interim final
rules, therefore, also require that the
notice and consent document be made
available in any of the 15 most common
languages in the geographic region in
which the applicable facility is located.
Providers and facilities will need to
translate the standard notice and
consent documents specified by HHS in
guidance into the applicable 15
languages.
A provider or facility meets this
requirement if it provides the notice and
consent documents in the 15 most
common languages in its state.
However, HHS recognizes that in some
cases, particularly in larger states or
metropolitan areas, these 15 languages
may not adequately represent the
languages spoken by the population
served by the provider or facility.78
Therefore, the provider or facility may
e.g., ‘‘Understanding Communication and
Language Needs of Medicare Beneficiaries’’ (2017),
https://www.cms.gov/About-CMS/AgencyInformation/OMH/Downloads/Issue-BriefsUnderstanding-Communication-and-LanguageNeeds-of-Medicare-Beneficiaries.pdf (‘‘The common
languages in a given region, city, or town may vary
greatly from those spoken in the state or in the U.S.
as a whole.’’).

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alternatively choose to provide the
notice and consent documents in the 15
most common languages in its
geographic region, which reasonably
reflects the geographic region served by
the applicable facility. For example, a
facility that serves the greater Los
Angeles area may choose to provide the
notice and consent documents in the 15
most common languages within that
geographic region, instead of the 15
most common languages in the state of
California.
HHS considered different standards to
apply in defining such geographic
regions, and is seeking comment
regarding the appropriate standard.
HHS’s objective is to implement a
standard that ensures that the language
accessibility requirement is responsive
to the needs of the individuals served by
the provider or facility, while mitigating
inconsistencies in the way that such
geographic regions are determined. HHS
is interested in comments regarding the
use of metropolitan statistical areas
(MSAs),79 hospital service areas
(HSAs),80 hospital referral regions
(HRRs),81 and public use microdata
areas (PUMAs),82 applied based on
where the applicable facility is located,
as well as other standards that may be
well-suited for this purpose. HHS also
seeks comment on what language access
standards would be appropriate in
circumstances where the applicable
facility serves populations in multiple
states.
As noted earlier in this section, HHS
is of the view that individuals cannot
provide meaningful consent if they
cannot understand the information
provided in the written notice and
consent document. These interim final
rules, therefore, add a language access
requirement to address circumstances in
which the individual cannot understand
any of the 15 languages in which the
notice and consent document are
available. If the individual’s preferred
language is not among the 15 most
common languages in which the
documents are made available by the
nonparticipating provider or
nonparticipating emergency facility, or
the individual cannot understand the
language in which the notice and
consent documents are provided, as
self-reported by the individual, the
79 https://www.census.gov/programs-surveys/
metro-micro/about.html.
80 https://www.dartmouthatlas.org/faq/.
81 https://www.dartmouthatlas.org/faq/.
82 https://www.census.gov/programs-surveys/
geography/guidance/geo-areas/pumas.html#:∼:
text=Public%20Use%20Microdata%20Areas%20
(PUMAs)%20are%20non%
2Doverlapping%2C,and%20the%20U.S.
%20Virgin%20Islands.

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notice and consent requirements
described in these interim final rules are
not met unless the provider or facility
furnishes the individual with a qualified
interpreter.
The provider or facility should
provide the notice and consent
documents, or the qualified interpretive
services, as applicable, in the
individual’s self-reported, preferred
language. Individuals should be asked
what language they prefer to
communicate in regarding health care
information, for written or verbal
communication, as applicable. An
individual’s preference might not be the
same for written and verbal
communication, and an individual’s
preference might not correlate with the
individual’s native language.
In interpreting the statutory
requirements regarding language access
in the notice and consent process, HHS
recognizes communication, language,
and literacy barriers are associated with
decreased quality of care, poorer health
outcomes, and increased utilization.83
Alternatively, the use of appropriate
language services and at appropriate
literacy levels in health care settings is
associated with increased quality of
care, improved patient safety outcomes,
and lower utilization of costly medical
procedures.84 HHS is of the view that it
is imperative that health care providers
83 Batencourt, J.R., et al., Improving Patient Safety
Systems for Patients with Limited English
Proficiency: A Guide for Hospitals, Agency for
healthcare Research and Quality, Publication No.
12–0041, September 2012; Proctor, K. et al., The
Limited English Proficient Population: Describing
Medicare, Medicaid, and Dual Beneficiaries, Health
Equity Vol. 2.1, 2018; Green, A.R. and Nze, C.
Language-Based Inequity in Health Care: Who is the
‘‘Poor Historian’’?, American Medical Association
Journal of Ethics, Vol. 19, Number 3: 263–271,
March 2017; Shamsi, H. et al., Implications of
Language Barriers for Healthcare: A Systematic
Review, Oman Medical Journal, Vol. 53, No. 2:e122,
2020; de Moissac, D., Bowen, S., Impact of
Language Barriers on Quality of Care and Patient
Safety for Official Language Minority Francophones
in Canada, Journal of Patient Experience, Vol. 6(1)
24–32, 2019; Napoles, A.N., et al., Inaccurate
Language Interpretation and its Clinical
Significance in the Medical Encounters of Spanishspeaking Latinos, Med Care. 2015 November;
53(11): 940–947; Divi, C., et al., Language
Proficiency and Adverse Events in U.S. Hospitals:
a Pilot Study, Int’l Journal for Quality in Health
Care, vol. 19, no.2; Ali, P.A. and Watson, R.,
Language Barriers and their Impact of Provision of
Care to Patients with Limited English Proficiency:
Nurses Perspective, J. Clin. Nurs., 2018 Mar;27(5–
6); Flores G. Language barriers to health care in the
United States. N Engl J Med 2006; 355:229–231. Ku
L, and Flores G. Pay now or pay later: Providing
interpreter services in health care. Health Affairs.
2005;24(2): 435–444; Hampers L.C., et al. Language
barriers and resource utilization in a pediatric
emergency department. Pediatrics. 1999; 103(6):
1253–1256; Dewalt D.A., et al. Literacy and health
outcomes: A systematic review of the literature. J.
Gen Intern Med. 2004;19(12):1228–1239.
doi:10.1111/j.1525–1497.2004.40153.x.
84 Id.

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and facilities take these efforts to
provide the required notice and consent
information in a manner understandable
to the participant, beneficiary, or
enrollee, to help achieve the goal of the
statute and ensure that individuals are
aware their rights and the options
available to them.
Providers and facilities are also
required to comply with other state and
federal laws regarding language access,
to the extent applicable. HHS reminds
health care providers and facilities that
recipients of federal financial assistance
must comply with federal civil rights
laws that prohibit discrimination. These
laws include section 1557 of the
Affordable Care Act,85 title VI of the
Civil Rights Act of 1964,86 section 504
of the Rehabilitation Act of 1973,87 and
the Americans with Disabilities Act of
1990.88 Section 1557 and title VI require
covered entities to take reasonable steps
to ensure meaningful access to
individuals with limited English
proficiency, which may include
provision of language assistance
services such as written translation of
written content in paper or electronic
form into languages other than English.
Section 1557 and section 504 require
covered entities to take appropriate
steps to ensure effective communication
with individuals with disabilities,
including provision of appropriate
auxiliary aids and services at no cost to
the individual. Auxiliary aids and
services may include interpreters, large
print materials, accessible information
and communication technology, open
and closed captioning, and other aids or
services for persons who are blind or
have low vision, or who are deaf or hard
of hearing. Information provided
through information and
communication technology also must be
accessible to individuals with
disabilities, unless certain exceptions
apply. Consistent with Executive Order
13985 and civil rights protections cited
in these regulations, HHS particularly
seeks comments from minority and
underserved communities including
those with limited English proficiency
and those with disabilities who prefer
information in alternate and accessible
formats, and stakeholders who serve
such communities, on whether the
provisions and protections related to
communication, language, and literacy
sufficiently address barriers that exist to
ensuring all individuals can read,
understand, and consider their options
related to notice and consent. HHS also

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U.S.C. 18116.
U.S.C. 2000d et seq.
87 269 U.S.C. 794.
88 42 U.S.C. 12101 et seq.
86 42

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seeks comment on what additional or
alternate policies HHS may consider to
help address and remove such barriers.
HHS understands that the technical
nature of these protections may
inherently pose barriers to individuals
or their authorized representatives as
they consider their options. Numerous
studies have indicated that consumer
comprehension of common health
insurance concepts is varied and that
many are not able to accurately answer
questions about their health plan’s
benefit design or health care costs.89
Individuals may also face intersecting
and overlapping barriers (commonly
referred to as the Social Determinants of
Health) as they interact with the health
care system, in addition to numerous
technical forms and documents as part
of receiving care. HHS solicits comment
on how to best strike the balance
between consumer friendliness and
usability of such documents, while
ensuring that they are consistent with
these interim final rules and the
statutory intent. HHS specifically seeks
comment from those with experience in
supporting individuals with low health
literacy, including providers, patient
advocates, and navigators, as well as
those with experience in user design, in
order to ensure that documents
conveying these protections and
opportunities to convey notice and
consent are understandable and
accurate.
iv. Exceptions to the Availability of
Notice and Consent
The notice and consent exception is
not applicable with respect to some
non-emergency items or services.90
Instead, the prohibition on balance
billing and the in-network cost-sharing
requirements, as described in these
interim final rules, always apply with
respect to those items or services. In
addition, the exception for notice and
consent is not applicable with respect to
emergency services, except for poststabilization services, under certain
conditions.
First, as specified in section 2799B–
2(b) of the PHS Act, with respect to non89 https://www.policygenius.com/blog/healthinsurance-literacy-survey-2019/; https://
www.cmu.edu/dietrich/sds/docs/loewenstein/
ConsumerMisUnderstandHealthIns.pdf.
90 45 CFR 149.420(b) applies in cases of nonemergency services furnished by a nonparticipating
provider at a participating facility and not in cases
of emergency services. Additionally, 45 CFR
149.410(c) specifies that the notice and consent
exception for post-stabilization services does not
apply to items or services furnished as a result of
unforeseen, urgent medical needs that arise at the
time a post-stabilization service is furnished for
which the nonparticipating provider or
nonparticipating emergency facility already
satisfied the notice and consent criteria.

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emergency services, the notice and
consent exception does not apply to
ancillary services, which include items
and services related to emergency
medicine, anesthesiology, pathology,
radiology, and neonatology, whether
provided by a physician or nonphysician practitioner; items and
services provided by assistant surgeons,
hospitalists, and intensivists; diagnostic
services, including radiology and
laboratory services; and items and
services provided by a nonparticipating
provider, only if there is no
participating provider who can furnish
such item or service at such facility.
Additionally, as specified in section
2799B–2(c) of the PHS Act, the notice
and consent exception does not apply to
items or services furnished as a result of
unforeseen, urgent medical needs that
arise at the time an item or service is
furnished for which a nonparticipating
provider satisfied the notice and
consent criteria. For example, even if an
individual has consented to waive
balance billing and in-network costsharing protections with respect to
items and services provided by certain
nonparticipating providers related to a
knee surgery, that individual has not
consented, nor are providers permitted
to seek consent under the statute and
these interim final rules, to waive those
protections with respect to unforeseen,
urgent medical needs that arise during
the knee surgery. Because individuals
lack the requisite information to provide
informed consent to waive balance
billing and cost-sharing protections with
respect to unforeseen, urgent medical
needs, HHS has determined that the
rationale for the statutory exception for
notice and consent to not extend to
unforeseen, urgent medical needs with
respect to non-emergency services also
applies to unforeseen, urgent poststabilization services. Therefore, these
interim final rules provide that any
notice provided and consent obtained
with regard to the furnishing of certain
items or services does not extend to
additional items or services furnished in
response to unforeseen, urgent medical
needs either in the context of a
nonparticipating provider in a
participating facility, or of poststabilization services.
The statute authorizes HHS to expand
the definition of ancillary services to
include items and services provided by
other types of providers. HHS seeks
comment on other ancillary services
that should be considered to be made
ineligible for the notice and consent
exception. In particular, HHS is
interested in comments on whether
there are other ancillary services for
which individuals are likely to have

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little control over the particular
provider who furnishes items or
services. HHS is of the view that it is
with respect to these types of providers
that notice and consent procedures are
least appropriate. HHS is also interested
in comments regarding the types of
ancillary services for which surprise
bills are most common, and whether
they should be added to the definition
of ancillary services that are not subject
to the notice and consent exception.
Finally, HHS seeks comment on what
criteria HHS should use in determining
whether other ancillary services should
be added to the definition.
Furthermore, the statute authorizes
HHS to specify a list of advanced
diagnostic laboratory tests that would
not be considered ancillary services
under this definition. Any such
advanced diagnostic laboratory tests
would still be subject to the surprise
billing protections described in these
interim final rules, but the notice and
consent exemption process would also
be available for these tests. HHS seeks
comment on what criteria HHS should
consider in determining whether an
advanced diagnostic laboratory test
should be excepted from the definition
of ancillary services, and on any specific
advanced diagnostic laboratory tests
that should be considered to be made
eligible for the notice and consent
exception.
v. Retention of Certain Documents
Under Section 2799B–2(e) of the PHS
Act and these interim final rules,
nonparticipating emergency facilities,
participating health care facilities, and
nonparticipating providers are required
to retain written notice and consent
documents for at least a 7-year period
after the date on which the item or
service in question was furnished.
Specifically, when a nonparticipating
emergency facility obtains a signed
consent from a participant, beneficiary,
or enrollee, or such individual’s
authorized representative, for an item or
service furnished to the individual by
the facility or any nonparticipating
provider at such facility, the facility
must retain the written notice and
consent for the 7-year period. Similarly,
when a participating health care facility
obtains a signed consent from a
participant, beneficiary, or enrollee, or
such individual’s authorized
representative, for an item or service
furnished to the individual by a
nonparticipating provider at such
facility, the facility must retain the
written notice and consent for a 7-year
period. If a nonparticipating provider
obtains a signed consent from a
participant, beneficiary, or enrollee, or

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such individual’s authorized
representative, where the facility does
not otherwise obtain the consent on
behalf of the provider, the provider may
either coordinate with the facility so
that the facility retains the written
notice and consent for a 7-year period,
or the provider must retain the written
notice and consent for a 7-year period.
HHS interprets the retention
requirement to apply to providers as
well as facilities, in order to ensure that
all notice and consent documents are
appropriately retained, regardless of
how they are obtained.
vi. Requirements To Notify the Plan or
Issuer
For each item or service furnished by
a nonparticipating provider or
nonparticipating emergency facility, the
provider (or participating facility on
behalf of the nonparticipating provider)
or nonparticipating emergency facility,
as applicable, must timely notify the
plan or issuer as to whether balance
billing and in-network cost sharing
protections apply to the item or service,
and provide to the plan or issuer a
signed copy of any signed written notice
and consent documents. With respect to
non-emergency services described in 45
CFR 149.410(a), the nonparticipating
provider (or the participating facility on
behalf of the provider) must timely
notify the plan or issuer that the item or
service was furnished during a visit at
a participating health care facility. With
respect to post-stabilization services, the
nonparticipating provider or
nonparticipating emergency facility
must notify the plan or issuer as to
whether all the conditions described in
45 CFR 149.410(b) are met with respect
to each of the items and services for
which the bill is submitted. With
respect to non-emergency services only,
in instances where the nonparticipating
provider bills the participant,
beneficiary, or enrollee directly (where
permitted under these interim final
rules), the provider (or participating
health care facility on behalf of the
provider) may satisfy the requirement to
timely notify the plan or issuer by
including the notification with the bill
to the individual.
In interpreting the statutory
requirements, HHS recognizes that it is
critical that a group health plan or
health insurance issuer have knowledge
of whether the balance billing and innetwork cost-sharing requirements
apply, including whether an item or
service is furnished during a visit at a
participating health care facility and if
any notice was provided and consent
given what items and services were
consented to, where such items and

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services would otherwise be subject to
the balance billing protections. This
information is crucial for the plan or
issuer to be able to appropriately assign
cost sharing and adjudicate the claim in
compliance with the No Surprises Act.
These interim final rules require the
provider or facility to notify the plan or
issuer so that the plan or issuer is aware
when the balance billing and in-network
cost sharing protections apply and can
process the claim appropriately.91
HHS seeks comment on whether
additional rulemaking would be helpful
regarding the process and timing for
such notification, including the
definition of ‘timely,’ and what
processes for conveying the notification
would be most efficient, including
existing processes that could be
leveraged to convey the information.
HHS is particularly interested in
comments regarding the requirement
that providers or facilities provide to the
plan or issuer a copy of the signed
written notice and consent document,
including comments on barriers and
burdens associated with such
requirement, and recommendations on
how best to ensure plans and issuers
have information regarding the notice
and consent documents without
imposing undue burden on providers
and facilities.
3. Provider and Facility Disclosure
Requirements Regarding Patient
Protections Against Balance Billing

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Section 2799B–3 of the PHS Act,
added by the No Surprises Act, requires
providers and facilities to provide
disclosures regarding patient
protections against balance billing.
Among other things, the statute requires
health care providers and facilities
(including an emergency department of
a hospital or independent freestanding
emergency department) to make
publicly available, post on a public
website of the provider or facility (if
applicable), and provide to participants,
beneficiaries, and enrollees a one-page
notice about the balance billing
requirements and prohibitions that
apply to the provider or facility under
sections 2799B–1 and 2799B–2 of the
91 The Departments note that whether a provider
or facility provides such a notification to the plan
or issuer and whether a plan or issuer processes a
claim as if notice and consent were obtained based
on a provider’s notification is not determinative of
whether the balance billing protections apply. A
participant, beneficiary, or enrollee who is balance
billed or whose cost-sharing responsibility is
calculated at out-of-network rates would still be
able to contend that they did not receive sufficient
notice or did not provide consent, and challenge the
provider or facility’s right to balance bill them, as
well as and the plan or issuer’s handling of the
claim.

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PHS Act. The notice must include
information about any applicable state
requirements, and about how to contact
appropriate state and federal agencies if
the individual believes the provider or
facility has violated the balance billing
rules. These interim final rules codify
the statutory requirements and
information that these disclosures must
include. In addition, as stated
previously, under section 9820(c) of the
Code, section 720(c) of ERISA, and
section 2799A–5(c) of the PHS Act,
plans and issuers must provide
information in plain language on the
prohibition against balance billing and
information on contacting appropriate
state and federal agencies in the case
that an individual believes that such a
provider or facility has violated the
prohibition against balance billing.
These disclosure requirements are
applicable for plan years beginning on
or after January 1, 2022. To reduce
burden and facilitate compliance with
these disclosure requirements, the
Departments are concurrently issuing a
model disclosure notice that health care
providers, facilities, group health plans,
and health insurance issuers may, but
are not required to, use to satisfy the
disclosure requirements regarding the
balance billing protections. The
Departments will consider use of the
model notice in accordance with the
accompanying instructions to be good
faith compliance with the disclosure
requirements of section 9820(c) of the
Code, section 720(c) of ERISA, and
section 2799A–5(c) of the PHS Act, if all
other applicable requirements are met.
The Departments may address these
requirements in more detail in future
guidance or rulemaking. Until such
guidance or rulemaking implementing
the requirements under section 9820(c)
of the Code, section 720(c) of ERISA,
and section 2799A–5(c) of the PHS Act
becomes effective and applicable, plans
and issuers should exercise good-faith
compliance with those statutory
provisions.
These disclosures are critical to
helping raise awareness and enhance
the public’s understanding of state and
federal balance billing protections. The
purpose of these disclosures is to
empower individuals to better
understand the balance billing
protections afforded under applicable
state and federal law. In addition, these
disclosures are important in ensuring
individuals are able to identify
violations of these interim final rules
and related state law requirements and,
if necessary, file complaints against
providers and facilities. These
disclosures further the efforts to help

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achieve the goals of the No Surprises
Act and ensure that individuals are
aware of their rights and the options
available to them. These interim final
rules codify the provider and facility
disclosure requirements at 45 CFR
149.430. These requirements apply to
health care providers and health care
facilities (including independent
freestanding emergency departments).
These interim final rules outline
requirements regarding the content of
the one-page disclosure, methods for
disclosure, timing of disclosure to
individuals, exceptions to the
requirements, and a special rule to
prevent unnecessary duplication with
respect to providers. These disclosure
requirements do not apply to providers
of air ambulance services, as section
2799B–3 of the PHS Act requires
providers and facilities to disclose
information regarding the requirements
and prohibitions applicable to the
provider or facility under sections
2799B–1 of the PHS Act (relating to
balance billing for emergency services)
and 2799B–2 of the PHS Act (relating to
balance billing for non-emergency
services furnished by nonparticipating
providers at certain participating
facilities), but not under section 2799B–
5 of the PHS Act (relating to balance
billing for air ambulance services).
Although this provision does not apply
to providers of air ambulance services,
as the definition of health care providers
in 45 CFR 149.30 excludes providers of
air ambulance services, HHS encourages
providers of air ambulance services to
make available clear and
understandable information about the
requirements and prohibitions on
balance billing for air ambulance
services.
i. Content of Disclosure
The statute and these interim final
rules require that the disclosure must
include a clear and understandable
statement that explains the
requirements and prohibitions
applicable to the provider or facility
under sections 2799B–1 and 2799B–2 of
the PHS Act and their implementing
regulations, relating to prohibitions on
balance billing in cases of emergency
services and non-emergency services
performed by a nonparticipating
provider at certain participating
facilities as described earlier in this
preamble.
In addition, the disclosure must
include clear and understandable
language that explains any applicable
state law requirements regarding the
amounts such provider or facility may
charge a participant, beneficiary, or
enrollee after receiving payment, if any,

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from a plan or coverage (with which the
provider or facility does not have a
contractual relationship) and any
applicable cost-sharing payment from
such participant, beneficiary, or
enrollee.
HHS recognizes that there may be
some state laws that are more protective
of consumers than sections 2799B–1
and 2799B–2 of the PHS Act and their
implementing regulations. For example,
a state law might prohibit an individual
from providing consent to be balance
billed under more circumstances than
those in which balance billing are
prohibited under those sections and
their implementing regulations. If the
more protective state law causes certain
provisions of sections 2799B–1 and
2799B–2 of the PHS Act and their
implementing regulations to be
inapplicable to the provider or facility,
the provider or facility is not required
to include language containing
information on those inapplicable
provisions in the disclosures regarding
the federal requirements and
prohibitions, to the extent permitted
under state law. However, the provider
or facility would continue to be required
to include information in the
disclosures about any provisions in
sections 2799B–1 and 2799B–2 of the
PHS Act and their implementing
regulations that remain applicable to the
provider or facility.
Last, the statute and these interim
final rules require that the disclosure
must include clear and understandable
language providing contact information
for the appropriate state and federal
agencies that an individual may contact
if the individual believes the provider or
facility has violated a requirement
described in the notice. If only one
federal or state agency has oversight
with respect to providers or facilities in
the state, the disclosure may include
contact information for only that
agency.
In an effort to reduce the burden on
health care providers and facilities, HHS
has developed a model notice that
health care providers and facilities may
adopt, but are not required to use. HHS
would consider a provider or facility
that uses the HHS-developed model
notice to be compliant with these
federal disclosure rules with respect to
the information regarding sections
2799B–1 and 2799B–2 of the PHS Act
and their implementing regulations.
HHS encourages states to develop model
language to assist health care providers
and facilities in fulfilling the disclosure
requirements related to applicable state
law requirements and contact
information. If a state develops model
language that is consistent with section

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2799B–3 of the PHS Act, HHS will
consider a provider or facility that
makes appropriate use of the statedeveloped model language to be
compliant with the federal requirement
to include information about state law
protections.
To ensure clear and understandable
language for the required information,
HHS encourages health care providers
and facilities to utilize plain language in
the disclosure statements and to
consider user testing in the
development of such notices.92
Providers and facilities must comply
with applicable state or federal language
access standards in providing the
disclosures.93 Communication and
language barriers are associated with
decreased quality of care and poorer
health outcomes.94 Studies have shown
the benefits associated with the use of
language services in clinics and
hospitals include (1) increased quality
of care, (2) improved patient safety
outcomes, and (3) lower utilization of
costly medical procedures. The
presence of a language barrier is
associated with higher rates of costly
resource utilizations for diagnostic
testing, increased emergency
department visits, decreased use of
preventive services, higher rates of
hospitalization, and higher rates of
adverse health outcomes.95 HHS
believes it is imperative that health care
providers and facilities provide the
required disclosure information in a
clear and understandable manner to
help achieve the goal of the No
Surprises Act and ensure that
individuals are aware of their rights
related to protections against balance
billing.
In addition, HHS reminds health care
providers and facilities that these
notices must comply with applicable
federal civil rights laws, including that
92 See https://methods.18f.gov/ for information on
user testing.
93 See section IV.2.iii of this preamble for
discussion of select federal access standards.
94 https://www.cms.gov/About-CMS/AgencyInformation/OMH/Downloads/Language-AccessPlan-508.pdf.
95 See Dewalt DA, Berkman ND, Sheridan S, Lohr
KN, Pignone MP. Literacy and health outcomes: a
systematic review of the literature. J Gen Intern
Med. 2004;19(12):1228–1239. doi:10.1111/j.1525–
1497.2004.40153.x; Scott TL, Gazmararian JA,
Williams MV, Baker DW. Health literacy and
preventive health care use among Medicare
enrollees in a managed care organization. Med Care.
2002;40:395–404; Baker DW, Parker RM, Williams
MV, Clark WS. Health literacy and the risk of
hospital admission. J Gen Intern Med. 1998;13:791–
8; Neira L. The importance of addressing language
barriers in the US health system. Duke Center for
Personalized Health Care (July 17, 2018), available
at: https://dukepersonalizedhealth.org/2018/07/theimportance-of-addressing-language-barriers-in-theus-health-system/.

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providers and facilities must take
reasonable steps to provide meaningful
access for individuals with limited
English proficiency and appropriate
steps to ensure effective communication
with individuals with disabilities,
including accessibility of information
and communication technology.
HHS seeks comment on the content of
the required disclosures. Consistent
with Executive Order 13985 and civil
rights protections cited in these interim
final rules, HHS particularly seeks
comments from minority and
underserved communities, including
from those with limited English
proficiency, those who prefer
information in alternate and accessible
formats, those who are otherwise
adversely affected by persistent poverty
and inequality, as well as from
stakeholders who serve these
communities, on what additional
barriers may exist so as to ensure
individuals can read, understand, and
consider disclosure information and on
what policies HHS may consider for
addressing and removing these barriers.
ii. Methods of Disclosure
The statute and these interim final
rules require that each health care
provider and facility must make the
required disclosure publicly available,
and (if applicable) post it on a public
website of such provider or facility. In
addition, providers and facilities must
provide a one-page notice to individuals
who are participants, beneficiaries, or
enrollees of a group health plan or
individual health insurance coverage
offered by a health insurance issuer.
To satisfy the requirement to post the
disclosure on a public website, the
disclosure or a link to such disclosure
must be searchable on the provider’s or
facility’s public website. HHS is of the
view that the required disclosure
information would not be publicly
available unless displayed in a manner
that is easily accessible, without
barriers, and that ensures that the
information is accessible to the general
public, including that it is findable
through public search engines. For
example, HHS is of the view that a
public website must be accessible free of
charge, without having to establish a
user account, password, or other
credentials, accept any terms or
conditions, and without having to
submit any personal identifying
information such as a name or email
address. HHS seeks comment on
whether additional regulatory standards
are needed regarding what constitutes
disclosure on a provider’s or facility’s
public website to ensure the information
is accessible to the public.

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These interim final rules provide that
a health care provider or health care
facility that does not have its own
website is not required to make a
disclosure on a public website. HHS
anticipates that most facilities subject to
the requirements in sections 2799B–1
and 2799B–2 of the PHS Act would
generally have a website, but recognizes
that providers who furnish services at
such facilities may not have their own
website.
To satisfy the required disclosure to
the public, providers and facilities must
display the required disclosure
information on a sign posted
prominently at the location of the health
care provider or health care facility.
HHS would consider a sign to be posted
prominently, if the sign were posted in
a central location, such as where
individuals schedule care, check-in for
appointments, or pay bills. Such
locations would allow individuals to be
aware of the protections available before
or at the time of service or payment.
HHS is of the view that ensuring the
individual is aware of the surprise
billing protections is integral to
implementation of these requirements.
HHS recognizes that some providers
may not have publicly accessible
locations and has concluded that
requiring a sign to be posted
prominently at a non-publicly
accessible location would not further
the purpose of providing a disclosure.
Therefore, providers without a publicly
accessible location are not required to
make the disclosure under 45 CFR
149.430(c)(2).
Lastly, the statute and these interim
final rules require that health care
providers and facilities must provide
the required disclosure information in a
one-page notice to individuals who are
participants, beneficiaries, or enrollees
of a group health plan or group or
individual health insurance coverage
offered by a health insurance issuer. The
notice must be provided in-person or
through mail or email, as selected by the
participant, beneficiary, or enrollee. As
outlined in the statute, the required
disclosure to individuals must be
limited to one page. HHS interprets the
statute such that the disclosure notice
may be one double-sided page. These
interim final rules specify that the onepage disclosure must not include print
smaller than 12-point font. These
specifications are important to ensure
that the one-page document is both
designed in a form and presented in a
manner that is readable by the
individual or their representative and
that it contains sufficient content to
meet the requirements of these interim
final rules.

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HHS seeks comment on these
disclosure methods, including whether
additional methods of providing
information should be required or
permitted. In particular, HHS is
interested in comments regarding
whether posting of the disclosure
information could be in a location other
than a sign posted prominently at the
location of the provider or facility. In
addition, HHS seeks comment on ways
to ensure that the required disclosure
information posted on a public website
is accessible to individuals.
iii. Timing of Disclosure to Individuals
These interim final rules generally
require a health care provider or health
care facility to provide the notice to
participants, beneficiaries, or enrollees
no later than the date and time on
which the provider or facility requests
payment from the individual (including
requests for copayment made at the time
of a visit to the provider or facility). In
cases where the facility or provider does
not request payment from the
individual, the notice must be provided
no later than the date on which the
provider or facility submits a claim for
payment to the plan or issuer.
HHS is of the view that the notice will
be most effective in helping individuals
understand their rights and protections
under federal and state balance billing
laws and protecting individuals from
being improperly billed, if individuals
receive the notice in accordance with
this timing requirement. The
requirement will ensure the disclosures
are meaningful and that individuals are
aware of their rights before or at the
time of payment, which is likely to help
individuals to avoid paying bills that are
prohibited under state or federal balance
billing rules. However, these interim
final rules offer providers and facilities
flexibility regarding when the disclosure
must be provided to individuals.
Providers and facilities may provide the
required disclosures to individuals
earlier. For example, they could provide
the notice when an individual
schedules an appointment, or when
other standard notice disclosures (such
as the Notice of Privacy Practices for
Protected Health Information 96) are
shared with individuals.
In developing these interim final
rules, HHS considered allowing
providers or facilities to provide the
disclosure annually or only at the time
a patient schedules a service, but
wanted to ensure the timing of the
disclosure was relevant to when the
96 For requirements regarding when health care
providers are required to provide the Notice of
Privacy Practices, see 45 CFR 164.520(c).

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individual may experience a violation of
the surprise billing protections. HHS
encourages providers and facilities to
provide individuals with the notice at a
time that will maximize the notice’s
effectiveness.
HHS seeks comment on this timing
requirement, and whether another
timing requirement would be more
appropriate.
iv. Exceptions
Although section 2799B–3 of the PHS
Act could be interpreted to apply
broadly to all health care providers and
facilities, these interim final rules
include two exceptions to the general
requirement to provide disclosures
regarding balance billing protections.
First, health care providers are not
required to make the disclosures
required under this section if they do
not furnish items or services at a health
care facility, or in connection with visits
at health care facilities. Second, health
care providers are required to provide
the required disclosure only to
individuals to whom they furnish items
or services, and then only if such items
or services are furnished at a health care
facility, or in connection with a visit at
a health care facility. HHS further notes
that, under section 2799B–3 of the PHS
Act, disclosure is required only to
individuals who are participants,
beneficiaries, or enrollees of a group
health plan or group or individual
health insurance coverage offered by a
health insurance issuer. However, as
specified in 5 U.S.C. 8902(p), section
2799B–3 of the PHS Act applies to a
health care provider and facility with
respect to a covered individual in a
FEHB plan, as well. The disclosure
requirement is not required with respect
to other individuals seeking care from a
provider or facility.
While the statute does not explicitly
provide for these exceptions, HHS is of
the view that these exceptions serve two
important purposes. First, they seek to
avoid unnecessary confusion among
individuals who otherwise might
receive the disclosure under
circumstances in which the balance
billing protections would never apply.
For instance, providing the disclosure of
balance billing protections in a primary
care provider’s office could lead
individuals to incorrectly assume
balance billing protections exist where
they do not. Second, by ensuring that
the disclosures are targeted narrowly to
relevant individuals, the exceptions aim
to implement the statutory requirement
without creating additional undue
burden on providers and facilities.
HHS is of the view that these
exceptions are consistent with balance

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billing requirements elsewhere in these
interim final rules, related to emergency
services or non-emergency services
furnished by a nonparticipating
provider at a participating facility.
Furthermore, HHS is of the view that
these exceptions do not lessen the
positive impact of the disclosure
requirement, as health care providers
and facilities are still required to make
the disclosures where balance billing is
most likely to occur, which will help to
ensure individuals are aware of their
rights relating to consumer protections
against balance billing.
HHS seeks comment on these
exceptions and whether there are other
scenarios that should be considered.
v. Special Rule To Prevent Unnecessary
Duplication With Respect to Providers
HHS realizes there may be some
instances where an individual may
receive two disclosure notices—one
from a provider furnishing items or
services at a health care facility, and the
other from the health care facility itself.
These interim final rules include a
special rule to streamline the provision
of the required disclosure to the public
and one-page notice to individuals and
avoid unnecessary duplication of the
disclosures with respect to providers
furnishing care at a health care facility.
This special rule does not apply with
respect to the requirement that each
health care provider and facility post
the required disclosure on a public
website of such provider or facility.
While section 2799B–3 of the PHS Act
does not explicitly provide for a special
rule to prevent unnecessary duplication
with respect to providers, HHS is of the
view that this special rule serves an
important purpose in implementing
these requirements while reducing
unnecessary burden and effort for
providers. Furthermore, HHS is of the
view that this special rule will also help
reduce potential consumer confusion by
allowing individuals to receive only one
disclosure notice when receiving
services from a provider furnishing
items or services at a health care facility,
both of which are subject to the
disclosure requirement.
The special rule provides that to the
extent a provider furnishes an item or
service covered under the plan or
coverage at a health care facility
(including an emergency department of
a hospital or independent freestanding
emergency department), the provider
satisfies the disclosure requirements if
the facility agrees to provide the
information, in the required form and
manner, pursuant to a written
agreement. In such instance, the
disclosure must include information

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about the balance billing requirements
and prohibitions applicable to both the
facility and the provider. If a provider
and facility have a written agreement
under which the facility agrees to
provide the information required under
these interim final rules, and the facility
fails to provide full or timely disclosure
information, then the facility, but not
the provider, would violate the provider
disclosure requirements regarding
balance billing protections. HHS is of
the view that this will remove
unnecessary burden and effort for the
providers. HHS clarifies that a ‘‘written
agreement’’ may be an existing contract
between the provider and facility to
furnish care at the facility, if amended
to provide for this special rule.
Alternatively, a provider and facility
may enter into a new written agreement
specifically outlining the disclosure
requirements regarding balance billing
protections.
Providers that enter into these
arrangements with facilities are
encouraged to monitor the facility’s
adherence to these requirements. In
addition, if a provider has knowledge
that the required disclosure information
is not being provided in a manner
specified in these interim final rules,
HHS encourages the provider to work
with the facility to correct the
noncompliance as soon as practicable or
notify the applicable state authority or
HHS, in states where HHS is enforcing
this requirement.97 HHS may provide
additional guidance if HHS becomes
aware of situations where participants,
beneficiaries, and enrollees are not
being provided the required disclosure
information in accordance with these
interim final rules.
HHS recognizes that providers and
facilities frequently bill separately for
items and services furnished by the
provider and the facility, and
considered whether to make the special
rule inapplicable in those instances.
However, HHS concluded that applying
the special rule is appropriate in these
situations, since the disclosures are not
required to be included with the bill
itself. Although these interim final rules
provide some flexibility around the
timing of the notice, HHS anticipates
that the disclosure to the individual
would generally be provided at the
point of care. Thus, requiring the
97 Pursuant to section 2799B–4 of the PHS Act,
states have authority to enforce the requirements of
Part E of title XXVII of the PHS Act against a
provider or health care facility (including a
provider of air ambulance services), and HHS must
enforce if a state has failed to substantially enforce
the requirements. HHS intends to issue rulemaking
in the future to implement section 2799B–4 of the
PHS Act.

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provider and facility to separately
provide notices whenever they bill
separately could result in the individual
receiving multiple notices for the same
visit. Duplicative paperwork could
overwhelm or confuse the receiving
individual, which could detract from
the primary purpose of clarifying and
making known the protections that may
apply to the individual. In addition,
HHS is of the view that requiring a
provider to separately post a disclosure
within a facility is of limited additional
benefit and may present compliance
challenges for providers who lack
designated space within a facility.
Therefore, the special rule applies
regardless of whether the provider and
facility bill jointly or separately.
Furthermore, since the special rule
does not apply with respect to the
requirement that each health care
provider and facility make the required
disclosure available on the public
website of the provider or facility, HHS
is of the view that this special rule
works to achieve the goals of preventing
unnecessary duplication for providers
and facilities, while encouraging
safeguards to ensure that individuals
receive the required disclosure
information and are aware of their
rights. HHS is of the view that this
special rule does not lessen the positive
impact of the disclosure requirement.
This special rule will continue to help
to ensure individuals are aware of their
rights relating to patient protections
against surprise billing.
HHS seeks comment on this special
rule and whether there are other
circumstances that may warrant a
special rule to prevent unnecessary
duplication. In addition, HHS seeks
comment on whether providers should
be required, rather than encouraged, to
monitor and report whether a facility is
not complying with the requirement
outlined in these interim final rules.
4. Surprise Billing Complaints
Regarding Health Care Providers,
Facilities, and Providers of Air
Ambulance Services
The No Surprises Act adds section
2799B–4(b)(3) of the PHS Act, which
directs HHS to establish a process to
receive consumer complaints regarding
violations by health care providers,
facilities, and providers of air
ambulance services of balance billing
requirements under sections 2799B–1,
2799B–2, 2799B–3, and 2799B–5 of the
PHS Act and to respond to such
complaints within 60 days. Therefore,
the interim final rules establish an HHSonly complaints process for health care
providers, facilities and providers of air
ambulance services that parallels the

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process that the Departments are
establishing through these interim final
rules for plans and issuers. A more
fulsome discussion of the complaints
process for providers can be found in
section III.B.4 of this preamble. HHS
seeks comment on the complaints
process for health care providers,
facilities, and providers of air
ambulance services described in these
interim final rules.

providing similar surprise billing
protections to individuals. Additionally,
a health plan will not fail to be treated
as a catastrophic plan because the plan
provides benefits prior to the annual
limitation on cost sharing in section
1302(c)(1) of the ACA, as required under
sections 2799A–1 and 2799A–2 of the
PHS Act or any applicable state law
providing similar protections to
individuals.

5. Catastrophic Plans
As discussed earlier in this preamble,
where the surprise billing protections
apply, and the out-of-network rate
exceeds the amount upon which cost
sharing is based (which for emergency
services provide by a nonparticipating
emergency facility and for nonemergency services provided by a
nonparticipating provider at a
participating health care facility is the
recognized amount, and for services
provided by a nonparticipating provider
of air ambulance services is the lesser of
the billed amount or the QPA), a group
health plan or health insurance issuer
offering group or individual health
insurance coverage must pay the
provider or facility the difference
between the out-of-network rate and the
cost-sharing amount, even in cases
where an individual has not satisfied
their deductible (in which case the costsharing amount is the recognized
amount, or the lesser of the billed
amount or the QPA, as applicable).
Catastrophic plans generally cannot
provide benefits for any plan year until
the annual limitation on cost sharing in
section 1302(c)(1) of ACA is reached,
other than coverage of preventive
services under section 2713 of the PHS
Act and at least three primary care
visits. A catastrophic plan cannot
comply with the new balance billing
protections, specifically the obligation
to make a payment to a provider or
facility prior to the enrollee meeting the
annual limitation on cost sharing, while
satisfying the definition of a
catastrophic plan at section 1302(e) of
ACA. Because the No Surprises Act
does not contain language eliminating
catastrophic plans or exempting
catastrophic plans from the law’s
requirements, HHS interprets the statute
as permitting catastrophic plans to make
payments required by sections 2799A–
1 or 2799A–2 of the PHS Act without
losing their status as catastrophic plans.
HHS is, therefore, amending 45 CFR
156.155 in these interim final rules to
specify that a catastrophic plan must
provide benefits as required under
sections 2799A–1 and 2799A–2 of the
PHS Act and their implementing
regulations, or any applicable state law

V. Overview of Interim Final Rules—
Office of Personnel Management

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A. Conforming Changes for FEHB
Program
The OPM interim final rules, through
new 5 CFR 890.114 in subpart A, protect
FEHB Program covered individuals from
surprise medical bills for emergency
services, air ambulance services
furnished by nonparticipating
providers, and non-emergency services
furnished by nonparticipating providers
at participating health care facilities in
certain circumstances in the same
manner as the Departments’ rules
protect participants, beneficiaries, or
enrollees. The Departments’ interim
final rules generally apply with respect
to FEHB carriers’ compliance with the
No Surprises Act, except to the extent
that differences are necessitated for
clarification or appropriate application
in the context of the FEHB Program. In
considering application of the
Departments’ interim rules with respect
to the FEHB Program, it is important to
recognize that all FEHB carriers offer
fully insured health benefits plans in
consideration of premium payments
pursuant to contract terms, and no
health benefits plan is self-insured by
OPM or the Federal government. OPM
seeks comment on this approach and
whether there should be any additional
considerations in the application of
these interim final rules in the context
of the FEHB Program.
B. Preemption and OPM Enforcement
FEHB contract terms preempt state
law with respect to coverage or benefits
(including payments with respect to
benefits) pursuant to 5 U.S.C.
8902(m)(1). Such preemption renders
specified state law inapplicable for the
purposes of determining recognized
amounts and out-of-network rates under
26 CFR part 54, 29 CFR part 2590, and
45 CFR part 149. However, pursuant to
bilateral negotiation of FEHB contract
terms, OPM and the carrier may agree to
apply state law to determine the total
amount payable, rendering the state law
amount, method, or process for
determining the total amount payable an
effective term of the Federally-regulated,

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Federally-enforced contract.
Accordingly, in this instance, FEHB
contract terms will govern the
methodology for determining
recognized amounts and out-of-network
rates. In the absence of a FEHB contract
term incorporating a state law amount,
method, or process for determining the
total amount payable (including an
amount determined pursuant to an AllPayer Model Agreement under section
1115A of the Social Security Act), the
lesser of the billed amount or the QPA
will serve as the recognized amount
under the FEHB plan. Likewise, in the
absence of a FEHB contract term
incorporating an applicable state IDR
process, the federal IDR process will
govern the determination of out-ofnetwork rates in cases of failed open
negotiations.
Example A: A community-rated FEHB
plan covers a specific non-emergency
service that is provided to a covered
individual in State A by a
nonparticipating provider in a
participating health care facility. Both
the provider and the facility are licensed
in State A. State A has a law that
prohibits balance billing for nonemergency services provided to
individuals by nonparticipating
providers in a participating health care
facility, and provides for a method for
determining the cost-sharing amount
and total amount payable. The law
applies to health insurance issuers and
providers licensed in State A and
applies to the type of service provided.
OPM and the FEHB carrier, through the
annual contract negotiation cycle, have
elected to utilize State A’s law, and the
FEHB health benefits plan contains a
term expressly incorporating the State A
law prohibiting balance billing. In this
Example, the FEHB contract terms apply
the state law to determine the
recognized amount and the out-ofnetwork rate.
Example B: Same facts as Example A,
except that the FEHB contract terms do
not incorporate or expressly refer to the
balance billing law of State A. In this
Example, State A’s law prohibiting
balance billing would be preempted by
the terms of the FEHB contract. The
lesser of the billed amount or QPA
would apply to determine the
recognized amount. The out-of-network
rate would be determined through open
negotiation between the
nonparticipating provider and the FEHB
carrier, or in the case of failed
negotiations, an amount determined
under the federal IDR process.
Enforcement of these interim final
rules with respect to FEHB carriers will
generally be governed by OPM
authorities set forth herein and 5 U.S.C.

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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations
8901 et seq., 5 CFR part 890, 48 CFR
chapter 16, or the carrier’s FEHB
contract. Any differences in terminology
or other clarification will be set forth in
the applicable FEHB contract.
C. Definitions
The No Surprises Act and these
interim final rules include defined
terms that are specific to the law’s
requirements and implementation.
Definitions of key terms with respect to
OPM’s enforcement of 5 U.S.C. 8902(p)
generally align with the Departments’
regulations, with certain exceptions. For
compliance with these provisions, the
terms ‘‘group health plan or plan,’’
‘‘health insurance issuer or issuer,’’ and
‘‘participant, beneficiary, or enrollee’’
are respectively replaced with the terms
‘‘health benefits plan,’’ ‘‘carrier,’’ and
‘‘enrollee or covered individual.’’
D. Complaints
Complaints related to the provisions
under Part D of title XXVII of the PHS
Act with respect to carriers and FEHB
plans will generally be resolved in
accordance with the Departments’
interim final rules. OPM will coordinate
with the Departments to ensure that
complaints appropriate for OPM
resolution under the FEHB Program
statute, regulations or contractual
authorities are referred to OPM.

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E. Jurisdiction of Courts
Under 5 U.S.C. 8912, the district
courts of the United States have original
jurisdiction, concurrent with the United
States Court of Federal Claims, of a civil
action or claim against the United States
founded on FEHBA. Pursuant to new
paragraph (e) in 5 CFR 890.107, in the
event of litigation under these interim
final rules, a suit for equitable relief
founded on 5 U.S.C. chapter 89 that is
based on 5 U.S.C. 8902(p) and is
governed by 5 CFR part 890 must be
brought against OPM by December 31 of
the 3rd year after the year in which
disputed services were rendered. OPM
seeks comment on amendments to its
regulation on court review.
F. Applicability
OPM seeks comment on the
appropriate manner of conforming
compliance with sections 9816, 9817,
and 9822 of the Code; sections 716, 717,
and 722 of ERISA; and sections 2799A–
1, 2799A–2, and 2799A–7 of the PHS
Act for application to FEHB carriers,
including the appropriateness and
usability of the definitions and any
additional changes to the Departments’
regulatory provisions that must be
conformed for appropriate
implementation in the FEHB Program.

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For purposes of 5 U.S.C. 8902(p), the
HHS interim final rules apply to health
care providers, facilities, and providers
of air ambulance services with respect
to covered individuals in a FEHB plan
in the same manner as they apply with
respect to participants, beneficiaries,
and enrollees in a group health plan or
group or individual health insurance
coverage offered by a health insurance
issuer. OPM seeks comment on the
appropriate manner of conforming
compliance with 5 U.S.C. 8902(p) and
sections 2799B–1, 2799B–2, 2799B–3,
and 2799B–5 of the PHS Act.
Consistent with the Departments’
approach discussed in section III.D. of
this preamble, OPM will not apply these
interim final rules to health benefits
plans that are retiree-only plans.
VI. Waiver of Proposed Rulemaking
Section 9833 of the Code, section 734
of ERISA, and section 2792 of the PHS
Act authorize the Secretaries of the
Treasury, Labor, and HHS (collectively,
the Secretaries), respectively, to
promulgate any interim final rules that
they determine are necessary or
appropriate to carry out the provisions
of chapter 100 of the Code, part 7 of
subtitle B of title I of ERISA, and title
XXVII of the PHS Act.
In addition, under section 553(b) of
the Administrative Procedure Act (APA)
(5 U.S.C. 551 et seq.) a general notice of
proposed rulemaking is not required
when an agency finds good cause that
notice and comment procedures are
impracticable, unnecessary, or contrary
to the public interest and incorporates a
statement of the finding and its reasons
in the rule issued. The Secretaries and
OPM Director have determined that it
would be impracticable and contrary to
the public interest to delay putting the
provisions in these interim final rules in
place until after a full public notice and
comment process has been completed.
The No Surprises Act was enacted on
December 27, 2020, as title I of Division
BB of the Consolidated Appropriations
Act, 2021. The cost-sharing and balance
billing requirements on plans, issuers,
health care providers, facilities, and
providers of air ambulance services in
the No Surprises Act apply for plan
years (in the individual market, policy
years) beginning on or after January 1,
2022. Although this effective date may
have allowed for the regulations, if
promulgated with the full notice and
comment rulemaking process, to be
applicable in time for the applicability
date of the provisions in the No
Surprises Act, this timeframe would not
provide sufficient time for the regulated
entities to implement the requirements.
These interim final rules require plans

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36917

and issuers to make significant changes
to how they pay for items and services
that are subject to the cost-sharing and
balance billing protections, including
implementing claims processing
procedures to ensure that claims for
items and services subject to these
protections are processed in accordance
with the requirements in these interim
final rules. Group health plans and
health insurance issuers offering group
or individual health insurance coverage
will have to account for these changes
in establishing their premium or
contribution rates, and in making other
changes to the designs of plan or policy
benefits. In some cases, issuers will
need time to secure approval for these
changes in advance of the plan or policy
year in question. The Departments and
OPM anticipate the plans and issuers
will have already taken into
consideration the statutory provisions in
the No Surprises Act as they developed
plan designs for 2022, and preliminary
rates. Issuing these rules as interim final
rules, rather than as a notice of
proposed rulemaking, may allow plans
and issuers to account for the finalized
regulations as they finalize rates and
plan offerings.
The interim final rules place new
requirements on facilities, health care
providers, and providers of air
ambulance services regarding when they
are permitted to balance bill for items
and services. Such requirements include
new requirements related to how
providers and facilities must bill for
items and services furnished on an outof-network basis, requirements related
to providing notice and obtaining
consent regarding balance billing
protections in certain circumstances,
and requirements to disclose
information on balance billing publicly,
on a public website and to participants,
beneficiaries, and enrollees. Health care
providers and facilities require time to
implement these new requirements to
ensure compliance by January 1, 2022.
These interim final rules contain
critical protections for participants,
beneficiaries, and enrollees against
balance billing. For individuals who
receive balance bills, the costs can be
astronomical and devastating.98 In
addition, the recipients of such bills are
not the only ones who feel their impact.
As discussed elsewhere in this
preamble, providers have previously
been able to leverage the ability to
98 See, Greaney, T.L., Surprise Billing: A Window
into the U.S. Health Care System, ABA Civil Rights
and Social Justice Section, Human Rights Magazine
(Sept. 8, 2020); Cooper, Z. et al., Surprise! Out-OfNetwork Billing For Emergency Care in the United
States, NBER Working Paper 23623, 20173623 (July
2017, Revised January 2018).

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balance bill to negotiate higher innetwork rates. This leads to higher
premiums, higher cost sharing for
consumers, and increased health
expenditures.99 One study estimated
that policies to address surprise billing
on a federal level could decrease health
insurance premiums by one to five
percent.100 Additionally, consumers
may delay receiving needed medical
care, including for emergency medical
conditions, over concern about surprise
medical bills. It is therefore in the
public interest that individuals receive
the protections under the No Surprises
Act on the date on which those
protections go into effect. Accordingly,
in order to allow plans, health insurance
issuers, facilities, health care providers,
and providers of air ambulance services
sufficient time to implement these new
requirements, these rules must be
published and available to the public
well in advance of the effective date of
the requirements in the No Surprises
Act. Allowing time for a full notice and
comment process prior to the
requirements taking effect would not
provide sufficient time for these entities
to comply with the requirements for
plan years (in the individual market,
policy years) beginning on or after
January 1, 2022, which would risk
subjecting the public to prohibited
balance bills and excess cost sharing.
Additionally, plans and issuers need
certainty regarding the standards of
these requirements in order to begin
implementation, which these interim
final rules seek to provide.
Section 2723 of the PHS Act
authorizes states to enforce the
requirements in Part D of title XXVII of
the PHS Act with respect to issuers.
Section 2799B–4 of the PHS Act
authorizes states to enforce the
requirements in Part E of title XXVII of
the PHS Act with respect to providers
and health care facilities (including a
provider of air ambulance services).
Under both sections, HHS is required to
enforce such requirements if a state fails
to substantially enforce them. In order
to ensure effective oversight of these
new requirements as soon as they go
99 See Cooper, Z. et al., Surprise! Out-Of-Network
Billing For Emergency Care in the United States,
NBER Working Paper 23623, 20173623 (July 2017,
Revised January 2018); Duffy, E. et al., ‘‘Policies to
Address Surprise Billing Can Affect Health
Insurance Premiums.’’ The American Journal of
Managed Care 26.9 (2020): 401–404; and Brown
E.C.F., et al., The Unfinished Business of Air
Ambulance Bills, Health Affairs Blog, March 26,
2021. DOI: 10.1377/hblog20210323.911379,
available at https://www.healthaffairs.org/do/
10.1377/hblog20210323.911379/full/.
100 Trish E. et al., Policies to Address Surprise
Billing Can Effect Health Insurance Premiums, Am
J Manag Care. 2020;26(9):401–404. https://doi.org/
10.37765/ajmc.2020.88491.

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into effect, states require time to assess
the requirements contained in these
interim final regulations, and notify
HHS if they have not enacted legislation
to enforce such requirements or they
otherwise will not be enforcing such
requirements. States that opt to enforce
the requirements may require time to
update their regulations or statutes and
develop processes for enforcing the new
requirements. Delaying the rules to
allow for notice and comment
procedures would not provide sufficient
time for states to assess the new
requirements and notify HHS of their
ability to enforce.
In addition, the law requires the
Secretaries to issue rulemaking by July
1, 2021, regarding the QPA methodology
(including defining the geographic
regions for purposes of the
methodology); information plans or
issuers must share with
nonparticipating providers or facilities,
as applicable, regarding the plan or
issuer’s determination of the QPA; and
a process to receive complaints related
to the QPA. Allowing time for a full
notice and comment process prior to
July 1, 2021, would not have provided
sufficient time for the Departments to
develop and publish these rules by the
statutory deadline.
For the foregoing reasons, the
Departments and OPM have determined
that it is impracticable and contrary to
the public interest to engage in full
notice and comment rulemaking before
putting these interim final rules into
effect, and that it is in the public interest
to promulgate interim final rules.
VII. Economic Impact and Paperwork
Burden
A. Summary
These interim final rules implement
provisions of the No Surprises Act,
which Congress enacted as part of the
CAA, that protect participants,
beneficiaries, and enrollees in group
health plans and group and individual
health insurance coverage from surprise
medical bills when they receive
emergency services, non-emergency
services from nonparticipating
providers at certain participating
facilities, and air ambulance services,
under certain circumstances.
The Departments and OPM 101 have
examined the effects of these interim
final rules as required by Executive
Order 13563 (76 FR 3821, January 21,
2011, Improving Regulation and
Regulatory Review); Executive Order
12866 (58 FR 51735, October 4, 1993,
101 All references to the Departments in the
Economic Impact section of the preamble include
OPM. The analysis includes FEHB plans.

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Regulatory Planning and Review); the
Regulatory Flexibility Act (September
19, 1980, Pub. L. 96–354); section
1102(b) of the Social Security Act (42
U.S.C. 1102(b)); section 202 of the
Unfunded Mandates Reform Act of 1995
(March 22, 1995, Pub. L. 104–4);
Executive Order 13132 (64 FR 43255,
August 10, 1999, Federalism); and the
Congressional Review Act (5 U.S.C.
804(2)).
B. Executive Orders 12866 and 13563
Executive Order 12866 directs
agencies to assess all costs and benefits
of available regulatory alternatives and,
if regulation is necessary, to select
regulatory approaches that maximize
net benefits (including potential
economic, environmental, public health
and safety effects, distributive impacts,
and equity). Executive Order 13563 is
supplemental to and reaffirms the
principles, structures, and definitions
governing regulatory review as
established in Executive Order 12866.
Section 3(f) of Executive Order 12866
defines a ‘‘significant regulatory action’’
as an action that is likely to result in a
rule: (1) Having an annual effect on the
economy of $100 million or more in any
one year, or adversely and materially
affecting a sector of the economy,
productivity, competition, jobs, the
environment, public health or safety, or
state, local or tribal governments or
communities (also referred to as
‘‘economically significant’’); (2) creating
a serious inconsistency or otherwise
interfering with an action taken or
planned by another agency; (3)
materially altering the budgetary
impacts of entitlement grants, user fees,
or loan programs or the rights and
obligations of recipients thereof; or (4)
raising novel legal or policy issues
arising out of legal mandates, the
President’s priorities, or the principles
set forth in the Executive Order.
A regulatory impact analysis must be
prepared for major rules with
economically significant effects (for
example, $100 million or more in any
one year), and a ‘‘significant’’ regulatory
action is subject to review by OMB. The
Departments anticipate that this
regulatory action is likely to have
economic impacts of $100 million or
more in at least 1 year, and thus meets
the definition of an ‘‘economically
significant rule’’ under Executive Order
12866. Therefore, the Departments have
provided an assessment of the potential
costs, benefits, and transfers associated
with these interim final rules. In
accordance with the provisions of
Executive Order 12866, these interim
final rules were reviewed by OMB.

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1. Need for Regulatory Action
A surprise medical bill is an
unexpected bill from a health care
provider or facility that occurs when a
participant, beneficiary, or enrollee
receives medical services from a
provider (including a provider of air
ambulance services) or facility that,
generally unbeknownst to the
participant, beneficiary, or enrollee, is a
nonparticipating provider or facility
with respect to the individual’s
coverage. Surprise bills usually occur in
situations when a patient is unable to
choose a provider (including a provider
of air ambulance services) or emergency
facility and ensure that they receive care
from only providers or emergency
facilities that are participating for their
coverage. A recent survey revealed that
two-thirds of adults worry about being
able to afford unexpected medical bills
for themselves and their families, and
41 percent of adults with health
insurance received a surprise medical
bill in the previous 2 years.102 Surprise
bills can cause significant financial
hardship and cause individuals to forgo
care. A project carried out by Vox, a
news and opinion website, which
collected emergency department
medical bills reported instances of
accident victims receiving care at out-ofnetwork hospitals and receiving bills of
over $20,000.103 These challenges may
be more keenly experienced by minority
and underserved communities, which
are more likely to experience poor
communication, underlying mistrust of
the medical system, and lower levels of
patient engagement than other

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102 Pollitz K., et al., US Statistics on Surprise
Medical Billing. JAMA. 2020;323(6):498.
doi:10.1001/jama.2020.0065.
103 Kliff S., Surprise medical bills, the high cost
of emergency department care, and the effects on
patients [published online August 12, 2019]. JAMA
Intern Med. doi:10.1001/jamainternmed.2019.3448.

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populations.104 Communities
experiencing poverty and other social
risk factors are particularly impacted as
surprise medical bills can negatively
affect individuals’ abilities to eliminate
debt and create wealth, and ultimately
can affect a family for generations.105
Effective, culturally, and linguistically
tailored communication at appropriate
literacy levels, along with policies that
address the social risk factors and other
barriers underserved communities face
to accessing, trusting, and
understanding health care costs and
coverage can reduce disparities and
promote health equity.106
S., Sherriff N. How poor
communication exacerbates health inequities and
what to do about it. Brookings Institution: Report
(February 22, 2021). https://www.brookings.edu/
research/how-poor-communication-exacerbateshealth-inequities-and-what-to-do-about-it/; Hamel,
L., Lopes, L., Mun˜ana, C., Artiga, S., Brodie, M.
Race, Health, and COVID–19: The Views and
Experiences of Black Americans. Kaiser Family
Foundation (October 2020). https://files.kff.org/
attachment/Report-Race-Health-and-COVID-19The-Views-and-Experiences-of-BlackAmericans.pdf; and Shen M.J., Peterson E.B.,
Costas-Mun˜iz R. et al. The Effects of Race and
Racial Concordance on Patient-Physician
Communication: A Systematic Review of the
Literature. J. Racial and Ethnic Health Disparities
5, 117–140 (2018). https://doi.org/10.1007/s40615017-0350-4.
105 Taylor, J., Racism, inequality, and health care
for African Americans. The Century Foundation:
Report (December 19, 2019). https://tcf.org/content/
report/racism-inequality-health-care-africanamericans/; and Chavis, B., Op-Ed: Big insurance
must help end surprise medical billing.
blackpressUSA (February 24, 2020). https://
blackpressusa.com/op-ed-big-insurance-must-helpend-surprise-medical-billing/.
106 Pe
´ rez-Stable E.J., El-Toukhy S.,
Communicating with diverse patients: How patient
and clinician factors affect disparities. Patient Educ
Couns. 2018;101(12):2186–2194. doi:10.1016/
j.pec.2018.08.021; McNally, M., Confronting
disparities in access to healthcare for underserved
populations. MedCity News (February 22, 2021).
https://medcitynews.com/2021/02/confrontingdisparities-in-access-to-healthcare-for-underservedpopulations-in-2021/.

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The No Surprises Act provides federal
protections against surprise billing and
limits out-of-network cost sharing under
many of the circumstances in which
surprise medical bills arise most
frequently. These interim final rules
implement provisions of the No
Surprises Act that protect individuals
from surprise medical bills for
emergency services, air ambulance
services furnished by nonparticipating
providers, and non-emergency services
furnished by nonparticipating providers
at participating facilities in certain
circumstances.
2. Summary of Impacts
The provisions in these interim final
rules will ensure that participants,
beneficiaries, and enrollees with health
coverage are protected from surprise
medical bills. Individuals with health
coverage will gain peace of mind,
experience a reduction in out-of-pocket
expenses, be able to meet their
deductible and out-of-pocket maximum
limits sooner, and may experience
increased access to care. Plans, issuers,
health care providers, facilities, and
providers of air ambulance services will
incur costs to comply with the
requirements in these interim final
rules. In accordance with OMB Circular
A–4, Table 1 depicts an accounting
statement summarizing the
Departments’ assessment of the benefits,
costs, and transfers associated with this
regulatory action. The Departments are
unable to quantify all benefits, costs,
and transfers of these interim final rules
but have sought, where possible, to
describe these non-quantified impacts.
The effects in Table 1 reflect nonquantified impacts and estimated direct
monetary costs resulting from the
provisions of these interim final rules.
BILLING CODE 4120–01–P

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TABLE 1: Accounting Statement

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Benefits:
Non-Quantified:
• Elimination of surprise medical bills for individuals from out-of-network medical care and air
ambulance services.
• Reduction in financial anxiety, including anxiety associated with medical debt, for individuals with
health coverage, due to a reduction in surprise bills.
• Increased access to care for individuals with health coverage that may have otherwise forgone or
neglected needed treatment due to high out-of-pocket expenses, and better health outcomes as a
result. Potential improved health outcomes for individuals with grandfathered health coverage due to
the ability to choose their own primary care physicians, the ability to choose a pediatrician as the
primary care physician for children, and the ability to receive obstetrical and gynecological care
without a referral.
Year
Discount
Period
Estimate
Costs:
Dollar
Rate
Covered
2021$ 2,252.23 million
2021
7 percent
2025
Annualized Monetized ($/year)
2021$2,177.12 million
2021
3 percent
2025
Quantitative:
• Costs to issuers and third-party administrators (TPAs) to comply with the requirements related to the
recognized amount and QPA, estimated to be one-time costs of approximately $4,958 million to
make the necessary information technology system changes in 2021 and ongoing operational costs of
$2,047 million in 2022 and $724 million annually from 2023 onwards.
• Costs to issuers and TPAs to revise standard operating procedures and provide training to staff,
estimated to be one-time costs of approximately $12.1 million in 2021.
• Costs to health care facilities and emergency facilities to revise standard operating procedures and
provide training to staff, estimated to be one-time costs of$117.2 million in 2021.
• Costs to providers of air ambulance services to revise standard operating procedures and provide
training to staff, estimated to be one-time costs of$517,086 in 2021.

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•

Costs to issuers and TPAs to share information related to QPA, estimated to be approximately $55.4
million annually starting in 2022.
• Costs to self-insured plans opting in to state law to include disclosure in plan documents, estimated to
be one-time costs of approximately $50,708 in 2022.
• Costs to grandfathered health plans to provide the notice ofright to designate a primary care provider,
estimated to be $4.5 million in 2022.
• Costs to nonparticipating providers and nonparticipating emergency facilities to comply with
requirements related to notice and consent, recordkeeping, and notice to plans and issuers, estimated
to be one-time costs of approximately $22.6 million in 2021 and ongoing costs of$117.2 million
annually starting in 2022.
Costs
to individuals to read and understand the notice from nonparticipating providers and
•
nonparticipating emergency facilities, estimated to be approximately $99.1 million annually, starting
in 2022.
Costs
to health care providers and facilities to provide disclosures on patient protections against
•
balance billing, estimated to be one-time costs of approximately $6.8 million in 2021 and $2.5 million
annually starting in 2022.
Costs
to states to develop state-specific language for patient disclosures to be provided by health care
•
providers and facilities, estimated to be one-time costs of approximately $10,732 in 2021.
• Costs to health care facilities to enter into agreements for the facilities to provide the disclosure on
patient protection on behalf of the providers, estimated to be one-time costs of approximately $6.4
million in 2021.
• Costs to plans and issuers to provide disclosure on patient protections to participants, beneficiaries
and enrollees, estimated to be approximately $699,245 in 2021 and approximately $23.4 million
annually starting in 2022.
• Costs to individuals and providers to submit complaints related to surprise bills, estimated to be
approximately $97,452 annually starting in 2022.
• Costs to the federal government to build a system to receive complaints and expand existing systems,
estimated to be one-time costs of approximately $19 million in 2021; and ongoing costs to process
complaints, estimated to be approximately $1.6 million in 2021, $9.9 million in 2022, $10.1 million
in 2023 and $10.3 million in 2024 and subsequent years.
Transfers:
Non-Quantified:
• Increase in health care expenditures if health care utilization increases .
Non-Quantified:
• Transfer from plans and issuers to participants, beneficiaries, and enrollees because plans and issuers
will now pay additional amounts for some services provided by nonparticipating providers and
facilities and participants, beneficiaries, and enrollees will experience a reduction in out-of-pocket
expenditures.
Potential
transfer from providers, including air ambulance providers, and facilities to the participant,
•
beneficiary or enrollee if the out-of-network rate collected is lower than what would have been
collected had the provider or facility balance billed the participant, beneficiary or enrollee.

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BILLING CODE 4120–01–C

a. Prevalence of Surprise Billing
There is extensive research on the
incidence of out-of-network providers
and facilities billing patients for items
and services furnished at in-network

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and out-of-network health care facilities.
Most of these studies analyze claims
data to identify cases that may
potentially result in a surprise medical
bill. The studies reveal that surprise
billing is a significant issue for
consumers across the country and

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across all types of coverage. For
example, an analysis of claims data from
large group health plans revealed that
while rates varied by state, 18 percent
of emergency department visits, on
average, resulted in individuals
receiving a surprise medical bill in

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More detailed analysis forthcoming in future rulemaking:
• Potential reduction in negotiated rates for certain health care services and air ambulance services,
leading to reductions in cost sharing for individuals with health coverage.
• Potential change in premiums depending on the impact on provider payments .
• Potential transfer from individuals to the federal government in the form of reduced premium tax
credits if premiums decrease as a result of these interim fmal rules.
• Potential transfer from the federal government to individuals in the form of increased premium tax
credits if premiums increase as a result of these interim fmal rules.

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2017. The out-of-network charges came
either from facilities or providers, or
both, though the majority of the charges
were from individual providers, rather
than facilities.107 In addition, in 2017,
16 percent of inpatient stays at innetwork facilities resulted in out-ofnetwork charges, though the rate of outof-network billing varied by state and
also between rural and urban areas.
Another study revealed that admissions
at in-network hospitals for surgery and
mental health/substance use disorders
are more likely to include out-ofnetwork charges, and women with largeemployer coverage who have had a
mastectomy at an in-network facility
were also more likely (21 percent) to be
billed for out-of-network charges.108 An
analysis of commercial claims data for
in-network hospital admissions in 2016
found that out-of-network claims
occurred in 14.5 percent of admissions,
with wide variation between states.109
A study using 2007–2014 claims data
for group health plans indicated that in
2014, 20 percent of hospital inpatient
admissions that originated in the
emergency department, 14 percent of
outpatient emergency department visits,
and 9 percent of elective inpatient
admissions were likely to result in
surprise medical bills. In approximately
40 percent of inpatient admissions and
more than half of outpatient cases with
surprise bills, issuers paid the claims at
an in-network level, so the patients were
potentially billed for the remaining
amount.110 Another study using claims
data from a large issuer for the period
2010–2016 found that over 39 percent of
emergency department visits to innetwork hospitals resulted in an out-ofnetwork bill, and that the incidence
increased from 32.3 percent in 2010 to
42.8 percent in 2016. The average
potential amount of the surprise
medical bill also increased from $220 in
2010 to $628 in 2016. During the same
time period, 37 percent of inpatient
107 Pollitz K., et al., An examination of surprise
medical bills and proposals to protect consumers
from them, Peterson-KFF Health System Tracker,
February 10, 2020, https://
www.healthsystemtracker.org/brief/anexamination-of-surprise-medical-bills-andproposals-to-protect-consumers-from-them-3/.
108 Pollitz, K. et al., Surprise Bills Vary by
Diagnosis and Type of Admission, Peterson-KFF
Health System tracker, December 9, 2019, https://
www.healthsystemtracker.org/brief/surprise-billsvary-by-diagnosis-and-type-of-admission/.
109 Kennedy K. et al., Surprise out-of-network
medical bills during in-network hospital
admissions varied by state and medical specialty,
2016, Health Care Cost Institute, March 28, 2019,
https://healthcostinstitute.org/out-of-networkbilling/oon-physician-bills-at-in-network-hospitals.
110 Garmon C. and Chatock B., One In Five
Inpatient Emergency Department Cases May Lead to
Surprise Bills, Health Affairs 36, No. 1 (2017): 177–
181.

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admissions to in-network hospitals
resulted in at least one out-of-network
bill, increasing from 26.3 percent in
2010 to 42 percent in 2016 and the
average potential amount of the surprise
medical bill increased from $804 to
$2,040.111
For elective surgeries, analysis of
claims data from a large issuer revealed
that between 2012 and 2017, an out-ofnetwork bill occurred in over 20 percent
of cases, when the primary surgeon and
facility were in-network, resulting in
potential balance bills ranging from
$1,255 to $3,449. Occurrences of out-ofnetwork bills were associated with
significantly higher total charges and
out-of-pocket costs for patients,
compared to cases without out-ofnetwork bills.112
Researchers have also tried to
estimate the amounts of surprise bills
patients receive. A study using 2015
claims data from a large issuer for
services provided at in-network
hospitals concluded that average
potential balance bills from
anesthesiologists, pathologists,
radiologists, and assistant surgeons were
$1,171, $177, $115, and $7,420,
respectively.113 Another study
analyzing 2014–2017 data related to
ambulatory surgical centers from three
large issuers revealed that in 10 percent
of cases, patients treated at in-network
facilities received care from out-ofnetwork providers, and patients may
have received surprise bills in 8 percent
of cases. On average, the amount of the
surprise medical bill was $1,141, and
the amount increased by 81 percent over
the period, from $819 in 2014 to $1,483
in 2017.114
Surprise billing is often associated
with certain physician specialties,
especially those whose services are not
actively ‘‘shoppable’’ by consumers.
Researchers analyzing claims data from
a large issuer for the period 2010–2016
found that for emergency department
visits, out-of-network bills arose
frequently within the context of medical
transport encounters (resulting in out-

of-network bills in 85.6 percent of
incidents involving ambulances) and
the following physician specialties:
Emergency medicine (32.6 percent),
anesthesiology (22.8 percent), internal
medicine (23.8 percent), cardiology
(20.9 percent), family practice (20.1
percent), radiology (18.1 percent),
general surgery (13.3 percent), and
pediatrics (8.4 percent). For inpatient
admissions at in-network hospitals, in
addition to medical transport (81.6
percent of cases involving ambulances),
the study found that out-of-network
bills arose most commonly with the
following physician specialties:
emergency medicine (42.6 percent of
total inpatient admissions with at least
1 claim submitted by the given
specialty), internal medicine (25.3
percent), radiology (22.6 percent),
pathology (22.2 percent), cardiology
(19.6 percent), anesthesiology (19.3
percent), family practice (18.2 percent),
and obstetrics and gynecology (0.8
percent).115 While emergency medicine
physicians make up only approximately
5 percent of the total number of active
physicians,116 these studies show that
emergency medical physicians have the
highest percentage of out-of-network
claims. Analysis of claims data for
elective surgeries from a large issuer
revealed that between 2012 and 2017,
out-of-network claims were commonly
associated with anesthesiologists (in 37
percent of cases), surgical assistants (37
percent), pathologists (22 percent),
radiologists (7 percent), and medical
consultants (3 percent).117 Another
study analyzing commercial claims data
for in-network inpatient admissions in
2016 found that some specialties with
large shares of out-of-network bills were
anesthesiology (16.5 percent), primary
care (12.6 percent), and emergency
medicine (11 percent) and that the
specialties that most often billed as outof-network at in-network facilities were
independent labs (22.1 percent),
followed by emergency medicine (12

111 Sun E.C., Mello M.M., Moshfegh J., Baker LC.
Assessment of Out-of-Network Billing for Privately
Insured Patients Receiving Care in In-Network
Hospitals. JAMA Intern Med. 2019;179(11):1543–
1550. doi:10.1001/jamainternmed.2019.3451.
112 Chhabra K.R. et al., Out-of-Network Bills for
Privately Insured Patients Undergoing Elective
Surgery With In-Network Primary Surgeons and
Facilities, 2020;323(6):538–547. doi:10.1001/
jama.2019.21463.
113 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.
114 Duffy E. et al., Prevalence And Characteristics
Of Surprise Out-of-Network Bills from Professionals
in Ambulatory Surgery Centers, Health Affairs 39,
No. 5, 2020. doi:10.1377/hlthaff.2019.01138.

115 Sun E. et al., Assessment of Out-of-Network
Billing for Privately Insured Patients Receiving Care
in In-Network Hospitals. JAMA Intern Med.
2019;179(11):1543–1550.
116 American Association of Medical Colleges.
‘‘Active Physicians by Age and Specialty.’’
Physician Specialty Data Report. (December 2019).
https://www.aamc.org/data-reports/workforce/
interactive-data/active-physicians-age-andspecialty-2019. The American Association of
Medical Colleges estimated that among the 935,136
active physicians in the U.S. in 2019, 45,134 were
emergency physicians (4.8%).
117 Chhabra K.R. et al., Out-of-Network Bills for
Privately Insured Patients Undergoing Elective
Surgery With In-Network Primary Surgeons and
Facilities, 2020;323(6):538–547. doi:10.1001/
jama.2019.21463.

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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations
percent).118 Another study analyzing
2014–2017 data related to ambulatory
surgical centers from three large issuers
revealed that out-of-network bills often
came from anesthesiologists (44 percent
of bills), certified registered nurse
anesthetists (25 percent), independent
laboratories (10 percent) and
pathologists (3 percent).119
As discussed earlier in this preamble,
multiple studies have shown that a large
percentage of out-of-network bills come
from independent laboratories. An
analysis of 2008–2016 claims data for
individuals with group health insurance
coverage found that there was an
increase in the share of out-of-network
laboratory spending, and that utilization
and prices for out-of-network laboratory
tests increased relative to in-network
tests during that time period. The
number of out-of-network laboratory
tests increased by 18.9 percent each
year, while the number of in-network
laboratory tests increased by 2.3 percent
per year. The study authors speculated
that large suppliers of laboratory
services have sufficient market power to
set high out-of-network prices and
utilization by clinicians may be
influenced by financial incentives.120
Providers who choose to remain outof-network usually do so because it does
not affect their patient volume. The
ability to balance bill is often used as
leverage by such providers to obtain
higher in-network payments when they
join plans’ or issuers’ networks. Higher
in-network payments lead to higher
premiums,121 higher cost sharing for
consumers, and increased health care
expenditures overall. For example,
hospitals often outsource the staffing of
their emergency departments to outside
firms. A study on out-of-network billing
in emergency departments looked at the
behavior of the two largest emergency
department staffing firms in the United
States.122 The study found that one firm
exits networks when it enters into a

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118 Kennedy

K. et al., Surprise out-of-network
medical bills during in-network hospital
admissions varied by state and medical specialty,
2016, Health Care Cost Institute, March 28, 2019,
https://healthcostinstitute.org/out-of-networkbilling/oon-physician-bills-at-in-network-hospitals.
119 Duffy E. et al., Prevalence And Characteristics
Of Surprise Out-of-Network Bills from Professionals
in Ambulatory Surgery Centers, Health Affairs 39,
No. 5, 2020. doi:10.1377/hlthaff.2019.01138.
120 Song, Z. et al., JAMA, Out-of-Network
Laboratory Test Spending, Utilization, and Prices in
the US, JAMA. 2021;325(16):1674–1676.
doi:10.1001/jama.2021.0720.
121 Duffy, E. et al., ‘‘Policies to Address Surprise
Billing Can Affect Health Insurance Premiums.’’
The American Journal of Managed Care 26.9 (2020):
401–404.
122 Cooper, Z. et al., Surprise! Out-Of-Network
Billing For Emergency Care in the United States,
NBER Working Paper 23623, 2017, available at
https://www.nber.org/papers/w23623.

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contract with a hospital, and bills as an
out-of-network provider. The other firm
temporarily exits networks and later
rejoins after negotiating higher innetwork payments.
Utilizations of air ambulance services
also frequently result in surprise bills. A
study by the Government
Accountability Office (GAO) analyzed
private health insurance claims from
2012 and 2017 to describe the extent to
which air ambulance transports are outof-network.123 This study analyzed
claims data from approximately 24,100
transports in 2012 and another 33,800
transports in 2017 from all 50 states and
the District of Columbia. The study
found that in 2012, 75 percent of
transports were out-of-network and in
2017, 69 percent were out-of-network.
The GAO also reported that the median
price charged by providers of air
ambulance services had increased from
a rate of $22,100 for rotary-wing and
$24,900 for fixed-wing in 2012 to
approximately $36,400 for rotary-wing
and $40,600 for a fixed-wing transport
in 2017. The changes in price between
2012 and 2017 indicate a consistent rate
of increase as a previously published
report by the GAO also noted that
between 2010 and 2014, the median
prices charged by providers of air
ambulance services for rotary-wing
transports approximately doubled.124
Another study found that for one of the
largest providers of air ambulance
services (with a market share of
approximately 24 percent) the average
charge increased from $17,262.23 in
2009 to approximately $50,199.24 by
2016.125
As the costs associated with air
ambulance transports continue to
increase, the GAO reported that
providers of air ambulance services
report entering into more network
contracts.126 However, additional
analyses find that many providers of air
123 GAO (2019) Report to Congressional
Committees. Air Ambulance. Available Data Show
Privately-Insured Patients Are at Financial Risk
(GAO–19–292) available at: https://www.gao.gov/
assets/700/697684.pdf. The data analyzed included
claims from over 50 payers in each year (including
both fully- and self-insured plans) and accounted
for 110.1 million covered lives in 2012 and 145.0
million covered lives in 2017.
124 GAO (2017) Report to the Committee on
Transportation and Infrastructure, House of
Representatives. Air Ambulance. Data Collection
and Transparency Needed to Enhance DOT
Oversight. (GAO–17–637) available at: https://
www.gao.gov/assets/gao-17-637.pdf.
125 Consumer Union. Up in the Air: Inadequate
Regulation for Emergency Air Ambulance
Transportation. Health Policy Report, March 2017.
126 GAO (2019) Report to Congressional
Committees. Air Ambulance. Available Data Show
Privately-Insured Patients Are at Financial Risk
(GAO–19–292) available at: https://www.gao.gov/
assets/700/697684.pdf.

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ambulance services, particularly those
not affiliated with a hospital, do not
participate in insurer networks and have
little incentive to do so, further noting
that network participation remains low
and provider avoidance of insurance
network participation combined with
aggressive collection practices has been
described as a business strategy of some
providers of air ambulance services.127
A study using 2014–2017 data from
three large issuers to evaluate the share
of air ambulance claims that are out-ofnetwork and the prevalence and
magnitude of potential surprise balance
bills, found that 77 percent of air
ambulance transports were out-ofnetwork and approximately 40 percent
of air ambulance transports resulted in
potential balance bills. The bills
averaged approximately $19,851 in
addition to the standard out-of-network
cost sharing, which averaged $561. The
study also found that with out-ofnetwork rotary-wing claims, issuers
paid the providers’ full billed charges
approximately 48 percent of the time, at
an average of $35,733 and that for innetwork providers, billed charges were
paid in full only 7 percent of the time.
They noted that self-insured plans paid
out-of-network claims in full 50 percent
of the time, whereas fully insured plans
paid claims in full 38 percent of the
time.128
A study using claims data from a large
issuer to evaluate the potential impact
of out-of-network emergency medical
transport services from 2013 to 2017
identified a total of 1,498,600
ambulance encounters of which 29,972
(2 percent) were air ambulance
encounters, and of these 26,375 (88
percent) were rotary-wing and 3,597 (12
percent) were fixed-wing. The study
further noted that the prevalence of
potential surprise medical billing was
an estimated 73 percent for rotary-wing
(18,463) and 70 percent (2,518) for
fixed-wing transports.129 The study
determined that the potential surprise
127 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%20
Item%208%20NM%20Superintendent%20of
%20Insurance%20Air%20Ambulance
%20Memorial%20Study%20Report.pdf.
128 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).
129 Chhabra, H.R., McGuire, K., Scott, J.W.,
Nuliyalu, U., and Ryan, A. Most Patients
Undergoing Ground And Air Ambulance
Transportation Receive Sizable Out-Of-Network
Bills. Health Affairs 39, NO. 5 (2020): 777–782.

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billing amount for the study period
totaled approximately $456 million for
air ambulance services, with a yearly
average of $91 million and a median
potential surprise medical bill of
approximately $27,513.130
A number of studies have reviewed
state investigations or consumer
complaints to obtain information on the
amount of balance billing, and costs,
associated with air ambulance
transports. One study reviewed state
investigations and found that in North
Dakota, of 20 complaints against one
provider of air ambulance services that
charged a total of $884,244 (an average
of $44,212 per flight), 33 percent of the
charges were covered by insurance. In
an additional nine states, the study
found that 55 complaints resulted in a
combined $3.8 million in charges, or an
average of $77,000 per trip; and in
Montana, the study found the average
out-of-network rate, of the 19 bills
analyzed, was $53,397.131 The GAO
further analyzed 60 consumer
complaints related to air ambulance
services from Maryland and North
Dakota and found that from 24
complaints in Maryland the balance
billed amounts ranged from $12,300 to
$52,000 and from 36 complaints in
North Dakota the balance bills ranged
from $600 to $66,000.132
b. Impact of Surprise Medical Bills

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A study of out-of-network billing in
emergency departments considered how
some providers use the ability to bill
out-of-network to increase payments.
The study found that charges from outof-network physicians in emergency
departments were 637 percent of
Medicare payments, which is 2.4 times
higher than in-network payment rates,
on average, for identical services. The
study also found that emergency
department physicians were paid innetwork rates of 266 percent of
Medicare payments, a higher percentage
130 This study found that potential surprise bills
in the study period increased from $41 million in
2013 to $143 million in 2017. The study further
found that the median potential surprise bill from
air transportation nearly doubled from $14,356 to
$27,513, or an increase of 15 percent annually, on
average, after adjustment for inflation and that the
prevalence ranged from 25 percent (Minnesota) to
93 percent (Massachusetts) with the size of
potential surprise bills varying widely.
131 Consumer Union. Up in the Air: Inadequate
Regulation for Emergency Air Ambulance
Transportation. Health Policy Report, March 2017.
132 GAO (2019) Report to Congressional
Committees. Air Ambulance. Available Data Show
Privately-Insured Patients Are at Financial Risk
(GAO–19–292) available at: https://www.gao.gov/
assets/700/697684.pdf.

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of Medicare payment than most other
specialists.133
Another study using 2017 claims data
from 3 large issuers looked at
expenditures on ancillary and
emergency services that are most often
associated with surprise bills:
emergency medicine professionals,
radiologists, anesthesiologists,
pathologists, emergency outpatient
facilities, and emergency ground
ambulance services.134 The study
concluded that a 15 percent reduction
in average payments for these services
would lower premiums by 1.4 percent
to 1.6 percent; while a reduction in
average payments to 150 percent of
Medicare rates would likely lower
premiums by 4.5 percent to 5.1 percent.
The authors estimated that for all
consumers with commercial insurance
coverage, 1.6 percent and 5.1 percent
reductions in premiums would result in
total annual savings of $12 billion and
$38 billion, respectively.
A study using 2015 claims data from
a large issuer for services provided at innetwork hospitals considered the
impact of policies that would prevent
anesthesiologists, pathologists,
radiologists, and assistant surgeons from
balance billing and would reduce their
in-network payments to 164 percent of
Medicare payments. The study
concluded that such a reduction in
payment would result in savings equal
to 13.4 percent of spending on
physicians and 3.4 percent of spending
for people with employer-sponsored
coverage, approximately $40 billion
annually.135
Surprise bills result in higher out-ofpocket expenses and cause financial
anxiety and medical debt for
consumers.136 As discussed earlier in
this preamble, the impact is most keenly
felt by those communities experiencing
poverty and other social risk factors.
Potential surprise bills can vary in size,
and are often large, as concluded by the
studies discussed previously. A Federal
Reserve report found that about 37
percent of adults in the U.S. in 2019
would not be able to pay an unexpected
133 Cooper, Z. et al., Surprise! Out-Of-Network
Billing For Emergency Care in the United States,
NBER Working Paper 23623, 2017, available at
https://www.nber.org/papers/w23623.
134 Duffy, E. et al., ‘‘Policies to Address Surprise
Billing Can Affect Health Insurance Premiums.’’
The American Journal of Managed Care 26.9 (2020):
401–404.
135 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.
136 Garmon C. and Chatock B. One In Five
Inpatient Emergency Department Cases May Lead to
Surprise Bills, Health Affairs 36, No. 1 (2017): 177–
181.

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expense of $400 using cash or its
equivalent.137 In a 2016 survey, among
the respondents with health coverage
who reported having difficulty paying
medical bills, 75 percent reported that
copayments, deductibles or coinsurance
were more than they could afford and
32 percent had received out-of-network
bills that insurance either did not cover
or only partially covered.138 Of those
who had difficulty paying out-ofnetwork bills, 69 percent said that it was
a surprise bill and they had not been
aware that the provider was out-ofnetwork for their plan. Respondents also
reported that bills from emergency room
visits and hospitalizations often made
up the largest share of the amount they
owed. In the survey, respondents
reported making sacrifices such as
reducing expenditures on food,
clothing, and basic household items,
using up savings, working additional
jobs or hours, borrowing, changing
living arrangements, and reducing or
delaying vacations or major household
purchases. Survey respondents also
reported being contacted by collection
agencies. Survey results indicated that
37 percent of individuals with
household incomes less than $50,000
(compared to 14 percent with incomes
of $100,000 or more), and 47 percent of
individuals with a disability (compared
to 22 percent of individuals without
one) had difficulties paying medical
bills, demonstrating a disproportionate
impact on these populations.
In addition, out-of-network cost
sharing and surprise bills usually do not
count towards an individual’s
deductible or maximum out-of-pocket
expenditure limit. Therefore,
individuals with surprise bills may have
difficulty reaching those limits, even
though they may have high health care
expenses. This can result in reduced
access to care, since high medical
expenses can cause individuals to delay
or forgo medical care. In a 2017 survey,
64 percent of respondents reported that
they had delayed care in the last year
because of high medical expenses and
44 percent stated that they would forgo
care if their out-of-pocket expenses
137 Board of Governors of the Federal Reserve
System, Report on the Economic Well-Being of U.S.
Households in 2019—May 2020, https://
www.federalreserve.gov/publications/2020economic-well-being-of-us-households-in-2019dealing-with-unexpected-expenses.htm.
138 Hamel, Liz et al., The Burden of Medical Debt:
Results from the Kaiser Family Foundation/New
York Times Medical Bills Survey, The Henry J.
Kaiser Family Foundation, 2016, https://
www.kff.org/wp-content/uploads/2016/01/8806-theburden-of-medical-debt-results-from-the-kaiserfamily-foundation-new-york-times-medical-billssurvey.pdf.

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would be more than $500.139 Another
study reported that 7 percent of adults
with health insurance delayed or went
without care in 2019 because of cost
reasons and adults who are in worse
health are twice as likely to delay or
forgo care because of cost reasons.140
This study also reported that while 10.5
percent of all adults reported delaying
or forgoing medical care due to costs,
15.1 percent of Hispanic adults and 13
percent of Non-Hispanic Black adults
and 17.7 percent of adults with income
below 200 percent of the federal poverty
level reported the same, showing the
disparate effect of high cost of care on
these communities. Another survey
concluded that 65 million adults had a
health issue but did not seek treatment
because of cost reasons in 2018.141
In addition to causing financial
hardship, surprise medical bills may
also cause consumers to change
providers in the future. Analysis of a
large national sample of claims for
obstetrics patients who had two
deliveries covered by insurance found
that 11 percent of patients received a
surprise medical bill for their first
delivery and were 13 percent more
likely to switch hospitals for the second
delivery compared to patients who did
not.142
Individuals living in rural areas
experience socioeconomic and health
related disparities.143 Rural areas have
fewer primary care and mental health
providers and higher rates of
preventable hospitalizations. Currently,
there are 1,805 rural hospitals in the
United States,144 with 137 rural
hospitals having closed since 2010.145
Individuals who live in rural or
geographically remote areas often must
rely on air ambulance services for
139 Heath, Sara, 64% of Patients Avoid Care Due
to High Patient Healthcare Costs, Patient
Engagement HIT, 2018, https://
patientengagementhit.com/news/64-of-patientsavoid-care-due-to-of-high-patient-healthcare-costs.
140 Amin, K. et al., How Does Cost Affect Access
to Care?. Peterson-KFF Health System Tracker.
January 5, 2021. https://
www.healthsystemtracker.org/chart-collection/costaffect-access-care/#item-start.
141 Gallup and West Health, The U.S. Healthcare
Cost Crisis. 2019. https://news.gallup.com/poll/
248081/westhealth-gallup-us-healthcare-costcrisis.aspx.
142 Chartock, B. et al., Consumers’ Responses to
Surprise Medical Bills in Elective Situations, Health
Affairs 38, No. 3 (2019): 425–430.
143 North Carolina Rural Health Research
Program. Rural Health Snapshot (2017). May 2017.
https://www.shepscenter.unc.edu/wp-content/
uploads/dlm_uploads/2017/05/Snapshot2017.pdf.
144 American Hospital Association, Fast Facts on
U.S. Hospitals, 2021. https://www.aha.org/
statistics/fast-facts-us-hospitals.
145 Cecil G. Sheps Center for Health Services
Research, UNC. Rural Hospital Closures. https://
www.shepscenter.unc.edu/programs-projects/ruralhealth/rural-hospital-closures/.

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transfer to facilities with equipment and
expertise to treat serious medical
conditions. Often these transports are
costly due to lack of options for innetwork providers available to provide
lifesaving services.146 It is estimated
that a quarter of Americans,
approximately 85 million people, are
unable to access health care in less than
an hour of travel time without an air
ambulance, and air ambulances may be
the only viable means of transporting
patients to the health care center they
need.147 One air ambulance provider
estimates that 90 percent of their
transports originate from rural areas, a
defined by CMS.148 The GAO found that
about 60 percent of rotary-wing bases
added between 2012 and 2017 were
located in rural areas, and about half of
fixed-wing bases added between 2012
and 2017 were rural.149 As a result of
the growing reliance on air ambulance
services, rural populations are
disproportionately affected by high
costs of air ambulance services.
c. Existing State Laws Regarding
Balance Billing
As of February 5, 2021, 33 states have
enacted legislation that provides some
protection for consumers with regard to
balance bills.150 Laws vary by state;
there are differences in the types of
networks, plans, facilities, and
providers that are subject to regulations,
and in payment standards. While most
of these states prohibit balance billing
for emergency services, many of them
also prohibit balance billing for certain
non-emergency care furnished at innetwork hospitals. It is possible that
states may enact new legislation or
modify existing legislation in response
to the passage of the No Surprises Act
and these implementing regulations.
Even within a state that has enacted
such protections, those protections
typically apply only to individuals
enrolled in group or individual health
146 Haer, A., Senate Bill 1264: The Texan
Template for the National Fight Against Balance
Billing. Texas Law Review, 99(4), 813–838 (2021).
147 Hinsdale, J.G. Report of the Council on
Medical Services: Air Ambulance Regulations and
Payments. American Medical Association. (2018),
available at: https://www.ama-assn.org/system/
files/2018-12/i18-cms-report2.pdf.
148 Air Evac Lifeteam. https://lifeteam.net/historyand-mission/#:∼:text=Approximately%2090
%20percent%20of%20Air,are%20based%20in
%20rural%20areas.
149 GAO (2019) Report to Congressional
Committees. Air Ambulance. Available Data Show
Privately-Insured Patients Are at Financial Risk
(GAO–19–292), available at: https://www.gao.gov/
assets/700/697684.pdf.
150 The Commonwealth Fund, State Balancebilling Protections. https://
www.commonwealthfund.org/sites/default/files/
2021-03/Hoadley_state_balance_billing_
protections_table_02052021.pdf.

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insurance coverage, as ERISA generally
preempts state laws that regulate selfinsured group health plans sponsored
by private employers. (Some state laws
allow ERISA-covered plans to opt in to
the consumer protections and process
for setting payment under the state law.)
In addition, states are limited in their
ability to address surprise bills that
involve out-of-state providers.
The air ambulance industry currently
functions and operates within the health
care system unlike any other entity or
service, only somewhat due to the
unique nature of the service. There are
limited avenues for states and the U.S.
Department of Transportation (DOT) to
regulate their operations. States and the
DOT have limited authority under the
ADA to regulate the prices, routes, or
services of an air carrier, including an
air ambulance operator, in air
transportation.151 The intent of the ADA
was to allow the prices of air
transportation services to be controlled
by market forces.152 The ADA defines
an ‘‘air carrier’’ as ‘‘a citizen of the
United States undertaking by any
means, directly or indirectly, to provide
air transportation;’’ defining ‘‘air
transportation’’ to include interstate air
transportation.153 The ADA effectively
limits the ability of states to regulate the
prices, routes, or services of air carriers
that provide transportation services,154
explicitly stating that states ‘‘may not
enact or enforce a law, regulation, or
other provision having the force and
effect of law related to a price, route, or
service of an air carrier that may provide
air transportation.’’ 155 The Departments
are not aware of any state laws
regulating or limiting surprise billing or
other price control measures with regard
to air ambulance providers or the air
ambulance industry.
State laws appear to have succeeded
in providing some protection to
consumers from balance billing. A study
analyzing the impact of New York
State’s law concluded that the law
resulted in a 34 percent reduction in
surprise billing in the state and lowered
in-network emergency department
physician payments by 9 percent.156 In
151 See https://www.transportation.gov/
individuals/aviation-consumer-protection/airambulance-service.
152 Missouri Department of Insurance, Financial
Institutions & Professional Registration. Policy Brief:
Health Coverage for Air Ambulance Transportation.
January 2019.
153 49 U.S.C. 40102.
154 49 U.S.C. 41713.
155 49 U.S.C. 41713(b).
156 Cooper, Z. et al., Surprise! Out-Of-Network
Billing For Emergency Care in the United States,
NBER Working Paper 23623, 2017, available at
https://www.nber.org/papers/w23623.

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addition, between the implementation
of the law in March 2015 and the end
of 2018, the law saved individuals in
the state over $400 million with respect
to emergency services.157 These savings
were partly due to a reduction in costs
associated with emergency services and
a greater incentive to participate in
provider networks. In New Jersey,
issuers experienced a reduction in costs
associated with emergency and
inadvertent out-of-network claims since
the state law took effect.158 The total
spending on involuntary out-of-network
services were reduced by 56 percent for
issuers in the individual market and by
38 percent for the issuers in the small
group market. A report on California
law concluded that patients were being
protected from surprise medical bills in
the state and that issuers had broader
networks such that 80 percent to 100
percent of their hospitals and health
care facilities had no nonparticipating
providers practicing there.159 A study
on the impact of California’s surprise
billing law analyzed claims data for
provider specialties most affected by the
law (anesthesiology, diagnostic
radiology, pathology, assistant surgeons,
and neonatal-perinatal medicine) for the
pre-implementation period from January
2014 to June 2017 and the postimplementation period from July 2017
to December 2018.160 The study
concluded that the share of services
delivered out-of-network by the affected
specialties at inpatient hospitals and
ambulatory surgical centers decreased
by 17 percent, ranging from a 15 percent
reduction for pathology to a 31 percent
decline for neonatal-perinatal medicine.

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d. Benefits
Provisions in these interim final rules
will protect participants, beneficiaries,
or enrollees with health coverage from
157 New York State Department of Financial
Services. New York’s Surprise Out-of-Network
Protection Law: Report on the Independent Dispute
Resolution Process. September 2019.
158 State of New Jersey Department of Banking
and Insurance. The Out-of-network Consumer
Protection, Transparency, Cost Containment, and
Accountability Act (Pub. L. 2018, c. 32) Data
Reporting. As of January 31, 2021. https://
www.state.nj.us/dobi/division_insurance/
oonarbitration/data/210131report.html.
159 Health Access California. Patients Protected,
Providers Paid: Data From Three Years of
California’s Compromise to Stop Surprise Medical
Bills. September 2019. https://health-access.org/wpcontent/uploads/2019/09/ha-factsheet-AB72reportfinal.pdf.
160 Adler, L. et al. California Saw Reduction In
Out-Of-Network Care From Affected Specialties
After 2017 Surprise Billing law. U.S.C.-Brookings
Schaeffer Initiative for Health Policy, September 26,
2019. https://www.brookings.edu/blog/uscbrookings-schaeffer-on-health-policy/2019/09/26/
california-saw-reduction-in-out-of-network-carefrom-affected-specialties-after-2017-surprise-billinglaw/.

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receiving surprise bills for emergency
services, air ambulance services
furnished by nonparticipating
providers, and non-emergency services
furnished by nonparticipating providers
at participating facilities in certain
circumstances. Providers will no longer
be able to balance bill an individual for
emergency services. A provider will
only be able to balance bill an
individual for certain post-stabilization
services, and for services performed by
nonparticipating providers at certain
participating facilities, if the provider or
facility provides notice to the
participant, beneficiary, or enrollee, and
obtains the individual’s consent to
receive care on an out-of-network basis
and be balance billed. Further,
provisions ensuring all relevant civil
rights protections are upheld and
communication with consumers is
accessible, in a language that is
understandable, and at an appropriate
literacy level, help to effectively confer
these protections to minority and
underserved communities.
These interim final rules also specify
that for emergency services furnished by
a nonparticipating provider or
emergency facility, and for nonemergency services furnished by
nonparticipating providers in a
participating health care facility, cost
sharing is generally calculated as if the
total amount that would have been
charged for the services by a
participating emergency facility or
participating provider were equal to the
recognized amount for such services, as
defined by the statute and in these
interim final rules, while for
nonparticipating providers of air
ambulance services, cost sharing is
generally calculated as if the total
amount that would have been charged
for the services by a participating
provider of air ambulance services were
equal to the lesser of the billed amount
or QPA, as defined by the statute and in
these interim final rules.
In addition, these interim final rules
require that these cost-sharing amounts
be counted toward any in-network
deductible or in-network out-of-pocket
maximums applied under the plan or
coverage in the same manner as if such
cost-sharing payments were made with
respect to services furnished by a
participating provider, participating
facility, or participating provider of air
ambulance services.
Consider, for example, one case
included in the project by Vox,161 where
161 Kliff S. Surprise medical bills, the high cost
of emergency department care, and the effects on
patients [published online August 12, 2019]. JAMA
Intern Med. doi:10.1001/jamainternmed.2019.3448.

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a victim of a violent attack was taken to
an emergency facility. When the
individual was able, he checked to make
sure that the hospital was in-network for
his plan. He was not aware, however,
that the surgeon who performed
emergency jaw surgery was
nonparticipating for his plan and the
individual received a surprise bill of
$7,924. Two other cases in the same
study included an individual involved
in a bike crash and another individual
hit by a public bus. Both individuals
were treated at the same emergency
facility, which was out-of-network for
both their plans and received surprise
bills of $20,243 and $27,660,
respectively. In another case, the
parents of an infant who needed an
inter-facility air ambulance transport for
urgent surgery received a surprise
medical bill of approximately $64,000
from the air ambulance provider.162
Another case reported in the media 163
involved an expectant mother choosing
an in-network hospital and a
participating obstetrician for the birth of
her baby. However, a nonparticipating
pediatrician was called in due to a
potential risk of post-delivery
complications for the baby. The mother
later received a surprise bill of $636
from the pediatrician because her plan
had denied the claim. In each of these
situations, plans and issuers either
denied the claim or paid the
nonparticipating provider,
nonparticipating facility, or
nonparticipating provider of air
ambulance services an amount that the
plan or issuer considered reasonable for
the services provided, and the
nonparticipating provider or
nonparticipating facility sent a balance
bill to the individual. Under the No
Surprises Act and these interim final
rules, individuals in similar situations
will only be responsible for in-network
cost-sharing amounts and deductibles.
Nonparticipating providers and
nonparticipating facilities will not be
able to balance bill such individuals,
but instead will need to agree to an
amount of payment with plans and
issuers or enter into the independent
dispute resolution process to determine
an appropriate payment amount, if
162 Wingerter, Megan. $64K Air Ambulance Tab
Shows Limits of Surprise Billing Law. Claims
Journal. January 4, 2021. https://
www.claimsjournal.com/news/national/2021/01/
04/301271.htm.
163 Herman, Bob. Billing squeeze: Hospitals in
middle as insurers and doctors battle over out-ofnetwork charges. Modern Healthcare, August 29,
2015. https://www.modernhealthcare.com/article/
20150829/MAGAZINE/308299987/billing-squeezehospitals-in-middle-as-insurers-and-doctors-battleover-out-of-network-charges.

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agreement on a payment amount cannot
be reached.
Therefore, individuals with health
coverage, including members of
minority and underserved communities,
are likely to see a significant reduction
in balance billing, reducing one source
of anxiety, financial stress, and medical
debt. They will also experience a
reduction in out-of-pocket expenditures,
because they will only be liable for their
in-network cost-sharing amounts when
receiving care from nonparticipating
providers, emergency facilities, and
providers of air ambulance services,
which will now count towards their
deductible and maximum out-of-pocket
limits, allowing individuals to reach
those limits sooner. As discussed
previously in this preamble, a
significant number of individuals forgo
or delay care due to the cost of care. A
reduction in out-of-pocket expenses is
likely to improve access to care and
allow individuals to obtain needed
treatment that they may otherwise have
neglected or foregone due to concerns
about the cost of care.
These interim final rules also
establish a complaints process for
receiving and resolving complaints
related to these new surprise billing
protections. The Departments are of the
view that this will result in increased
compliance with balance billing
requirements and ensure that all
individuals, including members of
minority and underserved communities,
are able to benefit from the protections
provided by the No Surprises Act and
these interim final rules. The
Departments also seek comment from
members of minority and underserved
communities to help identify barriers to
individuals exercising their rights under
the No Surprises Act, as well as policies
to address and remove such barriers.
The No Surprises Act extends the
applicability of the patient protections
for choice of health care professionals to
grandfathered health plans. Participants,
beneficiaries, and enrollees in
grandfathered plans will now be able to
designate any participating primary care
provider who is available to accept the
participant, beneficiary, or enrollee. If
patients are able to choose physicians
they trust and with whom they have a
good relationship, they are likely to
have better health outcomes.164
Similarly, allowing physicians
specializing in pediatrics to become
primary care physicians for children
will also improve health outcomes for
164 Olaisen,

R., et al., ‘‘Assessing the Longitudinal
Impact of Physician-Patient Relationship on
Functional Health.’’ The 18 Annals of Family
Medicine 5 (2020). https://www.annfammed.org/
content/18/5/422.

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children. The American Academy of
Pediatrics (AAP) strongly supports the
idea that the choice of primary care
clinicians for children should include
pediatricians.165 In addition, a female
participant, beneficiary, or enrollee in a
grandfathered plan who seeks coverage
for obstetrical or gynecological care
provided by a participating health care
professional who specializes in
obstetrics or gynecology will not need
an authorization or referral by the plan,
issuer, or any person (including a
primary care provider), which will
allow them to obtain care without any
delay.
The potential financial savings to
consumers as a result of the protections
in these interim final rules are
significant. As of January 1, 2022,
individuals across the country will no
longer receive surprise medical bills for
out-of-network emergency services, nonemergency services provided by
nonparticipating providers at certain
participating health care facilities, or air
ambulance services. The Departments
understand that some of these savings
will result instead in cost transfers from
participants, beneficiaries, and enrollees
to group health plans or issuers, as
discussed later in this preamble, or may
ultimately be paid for by individuals in
the form of increased health insurance
premiums, which will be discussed in
future rulemaking. However, the
Departments anticipate that there are
potentially additional cost savings for
individuals, but are unaware of
comprehensive national data that
quantifies the potential financial
benefits to individuals of the surprise
billing protections included in these
rules and invite stakeholders to share
relevant data that would help the
Departments quantify this potential
consumer financial benefit.
e. Costs
Plans, issuers, health care providers,
facilities, and providers of air
ambulance services will incur
significant costs to comply with the
requirements of these interim final
rules.
These interim final rules specify that
for emergency services furnished by a
nonparticipating provider or emergency
facility, and for non-emergency services
furnished by nonparticipating providers
in a participating health care facility,
cost sharing is generally calculated as if
the total amount that would have been
165 See AAP Policy Statement, ‘‘Guiding
Principles for Managed Care Arrangements for the
Health Care of Newborns, Infants, Children,
Adolescents, and Young Adults’’. https://
pediatrics.aappublications.org/content/pediatrics/
132/5/e1452.full.pdf.

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charged for the services by a
participating emergency facility or
participating provider were equal to the
recognized amount for such services, as
defined by the No Surprises Act and
these interim final rules. For
nonparticipating providers of air
ambulance services, cost sharing is
generally calculated as if the total
amount that would have been charged
for the services by a participating
provider of air ambulance services were
equal to the lesser of the billed amount
or the QPA, as defined by the statute
and in these interim final rules. In
addition, these interim final rules
require that such cost sharing must also
be counted toward any in-network
deductible or in-network out-of-pocket
maximums applied under the plan or
coverage in the same manner as if such
cost sharing payments were made with
respect to services furnished by a
participating provider, a participating
facility, or a participating provider of air
ambulance services.
Under these interim final rules, costsharing for emergency services
furnished by a nonparticipating
provider or emergency facility, and for
non-emergency services furnished by
nonparticipating providers in a
participating health care facility, must
be calculated based on the ‘‘recognized
amount,’’ which is: (1) An amount
determined by an applicable All-Payer
Model Agreement under section 1115A
of the Social Security Act, (2) if there is
no such applicable All-Payer Model
Agreement, an amount determined by a
specified state law, or (3) if there is no
such applicable All-Payer Model
Agreement or specified state law, the
lesser of the billed amount for the
services or the QPA, which generally is
the median of the contracted rates of the
plan or issuer for the item or service
furnished in the applicable geographic
region. For air ambulance services,
subject to these interim final rules,
plans and issuers generally must use the
QPA to calculate cost sharing.
Plans and issuers will incur
significant costs to calculate the
recognized amount and applicable costsharing amount. The Departments
assume that for self-insured group
health plans, the costs will be incurred
by third party administrators (TPAs).
The Departments estimate a total 1,758
entities—1,553 issuers 166 and 205
166 Based on data from MLR annual report for the
2019 MLR reporting year, available at https://
www.cms.gov/CCIIO/Resources/Data-Resources/
mlr.

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TPAs 167—will be required to comply
with these interim final rules with
regard to calculating the QPA and to
calculate an individual’s cost sharing
liability. The Departments anticipate
that issuers and TPAs will need to make
changes to their information technology
(IT) systems to include the capability to
calculate the QPA for all out-of-network
claims subject to the surprise billing
protections, or the amount determined
by state law or All-Payer Model
Agreement, if applicable, and provide
the required information related to the
QPA to nonparticipating providers and
nonparticipating emergency facilities. In
addition, system changes will be
necessary to accept and process out-of-

addition, each issuer or TPA will incur
ongoing costs related to system
maintenance, processing out-of-network
claims and to acquire external data
necessary to calculate the QPA when
there is insufficient information to
calculate median contracted rates
starting in 2022. The Departments
estimate each issuer or TPA will incur,
on average, ongoing costs of $1.2
million in 2022 and approximately
$411,840 annually starting in 2023. The
total annual costs for all issuers and
TPAs will be $2,047 million in 2022 and
$724 million annually starting in 2023.
See Tables 2 and 3 for more details. The
Departments seek comment on these
estimates.

network claims, calculate the
appropriate cost-sharing amounts and
include them in deductible and out-ofpocket maximum limits. The one-time
cost to make system changes to include
these new functionalities may be
slightly lower for plans (or TPAs) and
issuers already subject to state balance
billing laws. The Departments estimate
that each plan (or TPA) or issuer will
incur one-time costs of approximately
$2.8 million, on average, to make the
necessary system changes to automate
the process. The total costs for all plans
(or TPAs) and issuers will be
approximately $4,958 million. The
Departments assume that these one-time
costs will be incurred in 2021. In

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

Occupation:

Time
(hours)

I

Estimated
labor cost

IT Costs
Project Manager/Team Lead .......................................................................................................
Scrum Master ..............................................................................................................................
Senior Business Analysis ............................................................................................................
UX Researcher/Service Designer ................................................................................................
Technical Architect/Sr. Developer ...............................................................................................
DevOps Engineer/Security Engineer ...........................................................................................
Application Developer ..................................................................................................................

$110.00
110.00
134.00
129.00
207.00
143.00
111.00

2,080
3,640
1,560
2,080
2,080
1,560
9,360

$228,800
400,400
209,040
268,320
430,560
223,080
1,038,960

Total IT Costs for Each Issuer or TPA .................................................................................
Total IT Costs for all Issuers and TPAs ........................................................................

........................
........................

22,360
39,308,880

2,799,160
4,920,923,280

Chief Executives ..........................................................................................................................
Lawyers ........................................................................................................................................

190.24
143.18

80
40

15,219
5,727

Total ......................................................................................................................................
Total Management Costs for all plans and issuers ......................................................
Total Costs for all Issuers and TPAs ............................................................................

........................
........................
........................

120
210,960
39,519,840

20,946
36,823,771
4,957,747,051

Management Costs

Note: All wage rates except those related to management costs use the Contract Awarded Labor Category (CALC) tool.168 Wage rates for
management costs are derived using data from the Bureau of Labor Statistics to derive average labor costs (including a 100 percent increase for
fringe benefits and overhead).169

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

jbell on DSKJLSW7X2PROD with RULES2

Occupation:

Time
(hours)

2023 onwards
Estimated
labor cost

Time
(hours)

Estimated
labor cost

Project Manager/Team Lead ...............................................
Scrum Master .......................................................................
Senior Business Analysis ....................................................
UX Researcher/Service Designer ........................................
Technical Architect/Sr. Developer .......................................
DevOps Engineer/Security Engineer ...................................
Application Developer ..........................................................

$110.00
110.00
134.00
129.00
207.00
143.00
111.00

1,040
1,300
780
780
1,040
780
3,380

$114,400
143,000
104,520
100,620
215,280
111,540
375,180

520
520
0
0
520
520
1,040

$57,200
57,200
0
0
107,640
74,360
115,440

Total for Each Plan or Issuer .......................................

........................

9,100

1,164,540

3,120

411,840

167 Non-issuer TPAs based on data derived from
the 2016 Benefit Year reinsurance program
contributions.
168 The CALC tool (https://calc.gsa.gov/) was built
to assist acquisition professionals with market

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research and price analysis for labor categories on
multiple U.S. General Services Administration
(GSA) & Veterans Administration (VA) contracts.
Wages obtained from the CALC database are fully
burdened to account for fringe benefits and
overhead costs.

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169 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.

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

Occupation:

Total Costs for all Issuers and TPAs ....................

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Issuers and TPAs will also need to
revise their standard operating
procedures to include processes related
to out-of-network claims, recognized
amount and QPA, and provide training
to their billing personnel and customer
service representatives. The
Departments assume that, for each
issuer or TPA, a business operations
specialist will need 40 hours (at an
hourly labor cost of $81.06) and a senior
manager (at an hourly labor cost of
$114.24) will need 16 hours to revise
the standard operating procedures, with
a total cost of approximately $5,070. In
addition, the Departments assume that,
on average, 10 staff at each issuer and
TPA will receive 4 hours of training at
a cost of $1,824. For all 1,758 issuers
and TPAs, the total cost of revising
standard operating procedures and
training will be $12.1 million. The
Departments assume that these one-time
costs will be incurred in 2021 and that
new staff will be trained as a part of the
usual on-boarding process at minimal
additional cost and burden.
Health care and emergency facilities
will also incur costs to revise their
standard operating procedures and
provide training to their staff regarding
notice and consent requirements,
patient disclosures, and out-of-network
billing. The Departments estimate that
there are 16,992 emergency and health
care facilities (6,090 hospitals,170 270
independent freestanding emergency
departments,171 9,280 ambulatory
surgical centers,172 and 1,352 critical
access hospitals) that will incur this
cost. The Departments assume that for
hospital-affiliated freestanding
emergency departments, the disclosure
will be developed by the parent
hospitals. The Departments estimate
that, on average, for each health care
facility, a business operations specialist
170 American Hospital Association, Fast Facts on
U.S. Hospitals, 2021. Available at https://
www.aha.org/statistics/fast-facts-us-hospitals.
171 Emergency Medicine Network, 2018 National
Emergency Department Inventory—USA. Available
at https://www.emnet-usa.org/research/studies/
nedi/nedi2018/.
172 Moriarty, A., Definitive Healthcare, How Many
Ambulatory Surgery Centers are in the US?. Blog.
April 10, 2019. Available at: https://blog.
definitivehc.com/how-many-ascs-are-in-theus#:∼:text=Currently%2C%20there%20are
%20more%20than,Healthcare’s%20platform
%20on%20surgery%20centers.

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........................

Time
(hours)
15,997,800

will need 40 hours and a senior manager
will need 16 hours to revise the
standard operating procedures, with a
total cost of approximately $5,070. In
addition, on average, 10 staff at each
hospital will receive 4 hours of training
at a cost of approximately $1,824. This
estimate is an average of the costs and
burden to be incurred by each health
care facility and the Departments
recognize that the costs and burden may
vary depending on the size of each
health care facility. The total one-time
cost for 16,992 health care facilities is
estimated to be approximately $117.2
million, to be incurred in 2021, with the
expectation that new staff will be
trained as a part of the usual onboarding process at minimal additional
cost and burden.
Providers of air ambulance services
will also incur costs to revise their
standard operating procedures and
provide training to their staff regarding
out-of-network billing. The Departments
assume that for each air ambulance
provider, a business operations
specialist will need 40 hours and a
senior manager will need 16 hours to
revise the standard operating
procedures, with a total cost of
approximately $5,070. In addition, on
average, 10 staff for each provider will
receive 4 hours of training at a cost of
approximately $1,824. The total on-time
cost for each provider of air ambulance
services will be approximately $6,894 in
2021. The total one-time cost for 75
providers of air ambulance services 173
is estimated to be approximately
$517,086, to be incurred in 2021, with
the expectation that new staff will be
trained as a part of the usual onboarding process at minimal additional
cost and burden.
The Departments estimate that
grandfathered plans and issuers will
incur a total cost of approximately
$4,516,225 in 2022 to provide the notice
of right to designate a primary care
provider to participants, beneficiaries,
and enrollees. Self-insured plans opting
in to state law will incur one-time costs
of $50,708 in 2022 to include a
disclosure in plan documents. TPAs and
173 Federal Aviation Administration, Fact Sheet—
FAA Initiatives to Improve Air Ambulance Safety,
2014, https://www.faa.gov/news/fact_sheets/news_
story.cfm?newsId=15794.

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2023 onwards
Estimated
labor cost

2,047,261,320

Time
(hours)
5,484,960

Estimated
labor cost
724,014,720

issuers will also incur costs of
approximately $55.4 million annually to
share information related to QPAs with
nonparticipating providers,
nonparticipating emergency facilities,
and nonparticipating providers of air
ambulance services. Additionally,
issuers and TPAs will incur costs to
make publicly available, post on a
public website of the plan or issuer, and
include on each explanation of benefits
the disclosure regarding patient
protections against balance billing. The
Departments estimate a one-time cost,
incurred in 2021, for all issuers and
TPAs to be $699,245 and ongoing
annual costs, to begin in 2022, of
approximately $23.4 million. These
costs are discussed in detail in the
Paperwork Reduction Act section of this
preamble.
Nonparticipating providers and
nonparticipating emergency facilities
may balance bill a participant,
beneficiary, or enrollee if certain notice
and consent requirements have been
met. Providers and facilities will incur
costs to prepare the notice, provide
notice and receive consent from
patients, retain records, and provide
notice to plans and issuers. HHS
estimates that the one-time cost to
prepare the notice and consent
documents will be approximately $22.6
million in 2021. The ongoing annual
cost to provide the notice and obtain
consent, retain records and provide
notice to plans and issuers is estimated
to be approximately $117.2 million
starting in 2022. In addition, individuals
receiving the notice and consent, where
applicable, will incur costs of
approximately $99.1 million annually,
starting in 2022, to read and understand
the notice. These costs are discussed in
detail in the Paperwork Reduction Act
section of this preamble.
Health care providers and facilities
will also incur costs to make publicly
available, post on a public website of
the provider or facility, and provide to
participants, beneficiaries, and enrollees
a one-page notice disclosure on patient
protections against surprise billing and
for providers and facilities to enter into
agreements for the facilities to provide
the disclosure on behalf of the
providers, HHS estimates the one-time
total cost, to be incurred in 2021, to be

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approximately $13.1 million and the
ongoing annual cost, to begin in 2022,
to be approximately $2.5 million. HHS
encourages states to develop language to
assist facilities in fulfilling this
disclosure requirement as it applies to
disclosing state protections against
balance billing. HHS estimates that the
33 states that currently have legislation
to provide some protection to
consumers for surprise billing will incur
one-time costs of approximately $10,732
in 2021 to develop the model language.
These costs are discussed in detail in
the Paperwork Reduction Act section of
this preamble.
The No Surprises Act directs the
Departments to establish a process to
receive complaints regarding violations
of the application of the QPA by group
health plans and health insurance
issuers offering group or individual
health coverage. Individuals and entities
that submit a complaint related to
surprise billing will also incur costs to
do so. As discussed in the Paperwork
Reduction Act section of the preamble,
the Departments estimate related costs
to be approximately $97,452 annually
starting in 2022. In addition, the federal
government will incur a one-time cost of
approximately $16 million in 2021 to
build the IT system to receive and
process complaints, an additional $3
million to update existing systems in
2021, and ongoing annual costs of
approximately $1.6 million in 2021,
$9.9 million in 2022, $10.1 million in
2023 and $10.3 million in 2024 and
subsequent years to process the
complaints received and for system
maintenance.
As discussed previously, individuals
with protections against surprise billing
are likely to experience a reduction in
out-of-pocket expenses. This may
increase their use of health care, which
could lead to an increase in health care
expenditures overall.
The Departments seek comment on
these estimates and also on any
additional costs incurred by plans,
issuers, providers, and facilities.
f. Transfers
The provisions in these interim final
rules will result in lower out-of-pocket
spending by individuals. In situations
where surprise bills currently occur,
participants, beneficiaries, and enrollees
will be responsible for only an
approximation of the cost-sharing
amounts they would have paid had the
services been provided by a
participating emergency facility,
participating provider, or participating
provider of air ambulance services.
Plans and issuers will now be required
to pay for some expenses for items and

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services provided by nonparticipating
facilities, providers, and providers of air
ambulance services that they previously
did not pay for. Thus, expenditures will
shift from certain individuals to plans
and issuers. In addition, it is possible
the out-of-network rates collected by
some providers, including air
ambulance providers, and facilities will
be lower than they would have been if
the providers and facilities were able to
balance bill the individuals. Such
situations will result in transfers from
providers and facilities to individuals. If
there is a decrease in payments to some
participating providers, as has
happened for in-network emergency
department physician payments in the
state of New York,174 there will be a
transfer from those providers to plans,
issuers, participants, beneficiaries, and
enrollees.
As discussed previously in this
preamble, these interim final rules are
the first of several rules implementing
the No Surprises Act and the
transparency provisions of title II of
Division BB of the CAA. Later this year,
the Departments intend to issue
additional regulations including
regulations regarding the federal IDR
process. The impact of the provisions of
the No Surprises Act on premiums will
depend on provisions not included in
these interim final rules, and more
detailed analysis will therefore be
included in future rulemaking.175
C. Regulatory Alternatives
In developing the interim final rules,
the Departments considered various
alternative approaches.
Determining the Cost-sharing
Amount. The No Surprises Act
generally requires that cost sharing for
items and services subject to the
surprise billing protections be based on
the recognized amount. In instances
where this requirement applies, the
Departments considered whether it
should apply where the billed charge is
less than the recognized amount. In
these instances, assuming the plan or
issuer would not pay more than the
billed charge, calculating cost sharing
based on the QPA (which is one way in
which the recognized amount might be
174 Cooper, Z. et al., Surprise! Out-Of-Network
Billing For Emergency Care in the United States,
NBER Working Paper 23623, 2017, available at
https://www.nber.org/papers/w23623.
175 These interim final rules and the forthcoming
regulations are interrelated, and in cases such as
this, attribution of impacts is challenging. Inclusion
of more detailed analysis in later rulemaking, rather
than these interim final rules—about, for example,
changes in premiums incentivized by the suite of
surprise billing policies—should not be interpreted
as indicating certainty that such impacts will not
occur as a result of these interim final rules.

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determined) would require a
participant, beneficiary, or enrollee to
pay a higher percentage in cost sharing
than if such items or services had been
furnished by a participating provider.
However, sections 9816(a)(1)(C)(ii) and
9816(b)(1)(A) of the Code, sections
716(a)(1)(C)(ii) and 716(b)(1)(A) of
ERISA, and sections 2799A–
1(a)(1)(C)(ii) and 2799A–1(b)(1)(A) of
the PHS Act expressly prohibit plans
and issuers from applying a cost-sharing
requirement that is greater than the
requirement that would apply if services
were provided by a participating
provider or a participating emergency
facility. Therefore, under these interim
final rules, in circumstances where an
All-Payer Model Agreement or specified
state law does not apply to determine
the recognized amount, cost sharing
must be based on the lesser of the QPA
or the amount billed by the provider for
the item or service.
Methodology for Calculating the QPA.
The No Surprises Act generally requires
the QPA to be calculated based on the
median of the contracted rates of the
plan or issuer. The Departments
considered whether plans and issuers
should take into account the number of
claims paid at the contracted rate under
each contract in calculating the QPA.
Doing so, however, would not result in
a pure median of the contracted rates,
which the Departments are of the view
would most clearly follow the language
of the No Surprises Act. In addition, the
Departments are of the view that this
approach would likely put upward
pressure on the QPA, by giving greater
weight to contracts of larger provider
groups and facilities, which are more
likely to have negotiated higher rates
than small provider groups and
facilities. This approach could lead to
higher out-of-pockets costs for
individuals.
The Departments also considered
requiring plans and issuers to calculate
separate median contracted rates for
facilities based on the characteristics of
facilities, such as by distinguishing
teaching hospitals from non-teaching
hospitals, rather than distinguishing
only on the basis of whether the facility
is an emergency department of a
hospital or an independent freestanding
emergency department. The
Departments decided against this
approach, as doing so would result in a
higher median contracted rate for
facilities with higher operating costs
and is not clearly contemplated in the
definition of QPA under the No
Surprises Act. The Departments are of
the view that the different operating
costs among facilities with different
characteristics should not have such a

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dramatic impact on median contracted
rates. However, the Departments
recognize that payment amounts for
facility charges may vary depending on
whether an emergency facility is
connected with a hospital. Therefore,
the interim final rules allow separate
median contracted rates to be calculated
for emergency services based on
whether the facility is an emergency
department of a hospital or an
independent freestanding emergency
department.
With respect to calculating a separate
QPA for each item and service for each
geographic region, the Departments
considered whether to define each
geographic region as the applicable
rating area as defined for purposes of
the individual and small group market
rating rules under PHS Act 2701 section
and 45 CFR 147.102, while allowing
states the flexibility to establish
alternative geographic regions.
However, some states define rating area
by county, resulting in large numbers of
rating areas in a state, some of which
might include few, if any, facilities and
providers. Therefore, adopting rating
area as the standard for geographic
region could lead to a large number of
geographic regions for which a plan or
issuer would have to calculate separate
median contracted rates, a large number
of geographic regions without sufficient
information, as well as a large number
of geographic regions in which the
median contracted rate is influenced by
outliers. Therefore, the interim final
rules do not adopt this approach to
defining geographic regions.
With respect to the statutory
requirement for plans and issuers to
calculate separate QPAs for each
insurance market, including for selfinsured group health plans, the
Departments considered whether the
market for self-insured group health
plans should be limited to only selfinsured group health plans offered by
the same plan sponsor. However, this
could lead to greater instances of a selfinsured plan lacking sufficient
information, so the interim final rules
instead define the self-insured market as
all self-insured group health plans
offered by the same plan sponsor, or at
the option of the plan sponsor, all selfinsured group health plans
administered by the same entity that is
responsible for determining the QPA on
behalf of the plan (including a thirdparty administrator contracted by the
plan).
Participant, Beneficiary, and Enrollee
Responsibility to Pay Recognized
Amount Only. In instances where a
participant, beneficiary, or enrollee has
not satisfied their deductible, the

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Departments considered whether the
plan or issuer should not be required to
pay any portion of the out-of-network
rate to the nonparticipating provider or
facility. However, these interim final
rules require that when the out-ofnetwork rate exceeds the recognized
amount (the amount upon which cost
sharing is based), a plan or issuer must
pay the provider or facility the
difference between the out-of-network
rate and the cost-sharing amount (the
latter of which in this case would equal
the recognized amount), even in
instances where an individual has not
satisfied their deductible. This approach
is consistent with the purpose of the No
Surprises Act to protect participants,
beneficiaries, or enrollees from surprise
balance bills that exceed in-network
cost-sharing requirements. This
approach is also consistent with section
102 of the No Surprises Act, which
amends section 223 of the Code to
specify that these payments will not
prevent a plan from qualifying as a highdeductible health plan or make an
individual ineligible to contribute to a
health savings account.
Definition of Health Care Facility. The
No Surprises Act defines a health care
facility as each of the following with
respect to non-emergency services: (1) A
hospital (as defined in 1861(e) of the
Social Security Act); (2) a hospital
outpatient department; (3) a critical
access hospital (as defined in section
1861(mm)(1) of the Social Security Act);
(4) an ambulatory surgical center
described in section 1833(i)(1)(A) of the
Social Security Act; or (5) any other
facility, specified by the Departments,
that provides items or services for
which coverage is provided under the
plan or coverage, respectively. The
Departments considered whether to
expand the definition of health care
facility in this rulemaking, but
concluded that the facilities at which
balance billing are currently most
frequent are included in the current
definition. The Departments anticipate
continuing to monitor the prevalence of
surprise billing at various facilities and
may expand the definition in future
rulemaking. In particular, as discussed
earlier in this preamble, the
Departments considered including
urgent care centers in the definition of
health care facility. However, given the
variation across states in how urgent
care centers are licensed, including the
scope of services that the centers are
permitted to provide, the Departments
decided to instead seek comment
regarding whether the definition of
health care facility should be extended
to urgent care centers, including those

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36931

that are not licensed as facilities under
state law.
With respect to the definition of
participating health care facility and
participating emergency facility, the
Departments considered excluding
facilities that had only single case
agreements in place with a plan or
issuer. However, the Departments are
persuaded that doing so could harm
participants, beneficiaries or enrollees.
When individuals are provided with
care, generally non-emergency items or
services, under a single case agreement,
they should not have to worry about
potential surprise bills. Excluding
facilities with single case agreements
from the definitions of participating
facilities and participating emergency
facilities would be inconsistent with the
Departments’ intent to protect
individuals from surprise medical bills.
Applicability of State Law. In
determining how state laws around
balance billing would intersect with the
No Surprises Act, the Departments
considered alternatives to the approach
taken under these interim final rules,
which seek to supplement, rather than
supplant state balance billing laws.
Specifically, the Departments
considered whether to allow states to be
more protective of consumers than the
No Surprises Act with respect to
whether individuals are permitted to
waive balance billing protections upon
notice and consent, and concluded that
it is in the public interest to interpret
the No Surprises Act as creating a floor
regarding individuals’ ability to waive
balance billing protections. The
Departments also considered whether
state provisions allowing ERISAcovered plans to opt in to the state
requirements should be considered
specified state laws for purposes of
setting the recognized amount and outof-network rate regarding ERISAcovered plans that have opted into the
state programs. The Departments have
concluded such deference to state law is
consistent with the overarching
structure of the No Surprises Act. The
Departments also considered allowing
providers, facilities and providers of air
ambulance services to opt in to state
laws (as allowed under state laws), but
decided to instead seek comments on
this approach, as discussed earlier in
this preamble.
Notice and Consent Exception to
Prohibition on Balance Billing. Under
the No Surprises Act and these interim
final rules, the protections that limit
cost sharing and prohibit balance billing
do not apply to certain non-emergency
services or to certain post-stabilization
services provided in the context of
emergency care, if the nonparticipating

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provider or nonparticipating emergency
facility furnishing those items or
services provides the participant,
beneficiary, or enrollee, with certain
notice, the individual acknowledges
receipt of the information in the notice,
and the individual consents to be
treated by the nonparticipating
emergency facility or nonparticipating
provider. These interim final rules
establish the conditions under which
notice and consent may be provided for
certain non-emergency and poststabilization services. The Departments
considered a number of additional
conditions under which the notice and
consent exception would not be
permitted, such as if the individual
were experiencing pain, or under the
influence of alcohol or drugs, including
the use or administration of prescribed
medications. The Departments are of the
view that these factors are critical
considerations for whether an
individual is able to provide informed
consent, and concluded that these are
factors that a provider would be
expected to assess when determining if
the individual is capable of
understanding the information provided
in the notice and the implications of
consenting. The HHS interim final rules
therefore establish requirements related
to the notice and consent exception.
HHS considered a number of
alternatives in developing these interim
final rules. HHS considered different
standards to apply in defining
geographic regions for purposes of
language access requirements. The HHS
interim final rules require providers and
facilities to provide the notice and
consent documents in the 15 most
common language in the state, or in a
geographic region, which reasonably
reflects the geographic region served by
the applicable facility. HHS also
considered the use of MSAs,176 hospital
service areas (HSAs),177 hospital referral
regions (HRRs),178 and public use
microdata areas (PUMAs),179 applied
based on where the applicable facility is
located. These geographic regions might
better reflect a facility’s service area
than a state. However, HHS is of the
view that allowing providers and
facilities to use the state as the
geographic region would reduce burden,
and concluded that the standard in the
176 https://www.census.gov/programs-surveys/
metro-micro/about.html.
177 https://www.dartmouthatlas.org/faq/.
178 https://www.dartmouthatlas.org/faq/.
179 https://www.census.gov/programs-surveys/
geography/guidance/geo-areas/pumas.html#:∼:text=
Public%20Use%20Microdata
%20Areas%20(PUMAs)
%20are%20non%2Doverlapping
%2C,and%20the%20U.S.%20Virgin%20Islands.

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HHS interim final rules provides
sufficient flexibility for providers and
facilities to determine how best to serve
their population. HHS considered
requiring that a provider or facility that
uses a region other than a state must use
a geographic region smaller than a state,
but determined this approach would not
adequately address the needs to
facilities that serve populations that
cross state borders. HHS also considered
alternatives regarding the
inapplicability of the notice and consent
exception to ancillary services. HHS
considered expanding the definition of
ancillary services to include other
services for which surprise billing
frequently occurs. In particular,
stakeholders raised concerns about
providers who deliver services to
individuals during inpatient stays, but
who the individual has little
involvement in selecting. These
included, for example, providers
furnishing mental health services,
cardiology services, and rehabilitative
services. The Departments are
concerned about surprise bills that arise
in these situations, but prefer to further
consider the recommendation.
Individuals may have strong preferences
to select these types of providers for outof-network care, and it is therefore not
clear whether they would be
appropriate to include among the types
of specialties for which notice and
consent to be balance billed is
prohibited.
Applicability date. The Departments
considered delaying the applicability
date of these interim final rules in
response to stakeholder feedback
regarding the challenges of coming into
compliance with these interim final
rules by January 1, 2022. The
Departments recognize the challenges
that providers (including providers of
air ambulance services), facilities, plans,
and issuers will face in making the
necessary changes to comply with these
new requirements. However, delaying
the applicability date would have
significant ramifications for
participants, beneficiaries, and enrollees
and would continue to leave them
vulnerable to surprise bills. Therefore,
the Departments concluded that it is in
the public interest to require these
interim final rules to be applicable in
accordance with the applicability dates
in the No Surprises Act.
Provider Disclosure Requirements
Regarding Patient Protections against
Balance Billing. Section 2799B–3 of the
PHS Act, as added by the No Surprises
Act, requires providers and facilities to
provide disclosures regarding patient
protections against balance billing.
These interim final rules include

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provisions to limit this disclosure
requirement to certain providers and
facilities, and with respect to certain
individuals. These interim final rules
also include a special rule to limit
unnecessary duplication, so that a
facility’s disclosure may satisfy the
disclosure requirement on behalf of
providers in certain circumstances. HHS
considered applying the disclosure
requirement more broadly. However,
HHS determined that a broader
application of the disclosure
requirements would increase the
administrative costs associated with the
requirement, without commensurate
benefits to individuals. Rather, HHS was
concerned that requiring the disclosure
be made by facilities and providers in
circumstances where the protections
against balance billing would not apply
could create consumer confusion about
their rights under the No Surprises Act.
Additionally, HHS determined that
requiring providers to provide a
disclosure when furnishing services at a
facility that was also required to provide
a disclosure was unnecessary and could
be overwhelming to consumers. If
providers furnishing services at a
facility were required to provide a
disclosure as well, at the very least, the
cost of printing and materials for the
notices would have doubled, for an
additional $2.5 million in costs. If, in
addition, providers had to develop the
notices they provided, there would have
been additional costs. If all providers
were required to provide a notice,
regardless of whether the services are
furnished at a provider’s office or a
health care facility, then in addition to
the 39,690,940 individuals treated in the
emergency facilities,180 526,685,200
individuals visiting a provider’s office
or a health care facility would have been
provided a disclosure, for a total of
566,376,140 disclosures.181 The cost to
print the disclosures would have been
approximately $28.3 million,
approximately $25.8 million more than
it is estimated to be under the
provisions in these interim final rules.
180 Agency for Healthcare Research and Quality,
HCUP Fast Stats—Trends in Emergency Department
Visits. https://www.hcup-us.ahrq.gov/faststats/
NationalTrendsEDServlet?
measure1=01&characteristic1=14&measure2=&
characteristic2=11&expansionInfoState=hide&
dataTablesState=hide&definitionsState=hide&
exportState=hide#export.
181 Estimates based on data on postoperative
office visits. Centers for Disease Control, National
Ambulatory Medical Care Survey: 2016 National
Summary Tables. Available at https://www.cdc.gov/
nchs/fastats/physician-visits.htm.

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D. Paperwork Reduction Act—
Department of Health and Human
Services
Under the Paperwork Reduction Act
of 1995 (PRA), HHS is required to
provide 30-day notice in the Federal
Register and solicit public comment
before a collection of information
requirement is submitted to OMB for
review and approval. To fairly evaluate
whether an information collection
should be approved by OMB, section
3506(c)(2)(A) of the PRA requires that
HHS solicit comment on the following
issues:
• The need for the information
collection and its usefulness in carrying
out the proper functions of our agency.

• The accuracy of HHS’ estimate of
the information collection burden.
• The quality, utility, and clarity of
the information to be collected.
• Recommendations to minimize the
information collection burden on the
affected public, including automated
collection techniques.
HHS is soliciting public comment on
each of the required issues under
section 3506(c)(2)(A) of the PRA for the
following information collection
requirements (ICRs).
1. Wage Estimates
To derive wage estimates, the
Departments generally used data from
the Bureau of Labor Statistics to derive
average labor costs (including a 100

36933

percent increase for fringe benefits and
overhead) for estimating the burden
associated with the ICRs.182 Table 4
presents the mean hourly wage, the cost
of fringe benefits and overhead, and the
adjusted hourly wage.
As indicated, employee hourly wage
estimates have been adjusted by a factor
of 100 percent. This is necessarily a
rough adjustment, both because fringe
benefits and overhead costs vary
significantly across employers, and
because methods of estimating these
costs vary widely across studies.
Nonetheless, there is no practical
alternative, and the Departments are of
the view that doubling the hourly wage
to estimate total cost is a reasonably
accurate estimation method.

TABLE 4—WAGE RATES
Occupational
code

Occupation title

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Secretaries and Administrative Assistants, Except Legal, Medical, and Executive ..........................................................................................................
Lawyer .............................................................................................................
All Occupations ................................................................................................
Computer Programmers ..................................................................................
Medical Secretaries and Administrative Assistants .........................................
Human Resources Specialists .........................................................................
Business Operations Specialist .......................................................................
General and Operations Manager ...................................................................
Compensation and Benefits Manager .............................................................
Computer and Information Systems Managers ...............................................

Mean hourly
wage
($/hour)

43–6014
23–1011
00–0000
15–1251
43–6013
13–1071
13–1198
11–1021
11–3111
11–3021

$19.43
71.59
27.07
45.98
18.75
33.38
38.57
59.15
65.94
77.76

Fringe benefits
and overhead
($/hour)
$19.43
71.59
27.07
45.98
18.75
33.38
38.57
59.15
65.94
77.76

Adjusted
hourly wage
($/hour)
$38.86
143.18
54.14
91.96
37.50
66.76
77.14
118.30
131.88
155.52

2. ICRs Regarding Information To Be
Shared About QPA (45 CFR 149.140(d))
These interim final rules require plans
and issuers to provide certain
information regarding the QPA to
nonparticipating providers, or
nonparticipating emergency facilities in
cases in which the recognized amount
with respect to an item or service
furnished by the provider or facility is
the QPA (and in all cases subject to
these rules for nonparticipating
providers of air ambulance services).
Specifically, plans and issuers must
provide the following information to
providers (including air ambulance
providers) and facilities, when making
an initial payment or notice of denial of
payment: (1) The QPA for each item or
service involved; (2) a statement
certifying that the plan or issuer has
determined that the QPA applies for the
purposes of the recognized amount (or,
in the case of air ambulance services, for
calculating the participant’s,
beneficiary’s, or enrollee’s cost sharing),
and each QPA was determined in
compliance with the methodology

established in these interim final rules;
(3) a statement that if the provider or
facility, as applicable, wishes to initiate
a 30-day open negotiation period for
purposes of determining the amount of
total payment, the provider or facility
may contact the appropriate person or
office to initiate open negotiation, and
that if the 30-day negotiation period
does not result in a determination,
generally, the provider or facility may
initiate the independent dispute
resolution process within 4 days after
the end of the open negotiation period;
and (4) contact information, including a
telephone number and email address,
for the appropriate person or office to
initiate open negotiations for purposes
of determining an amount of payment
(including cost sharing) for such item or
service. Additionally, upon request of
the provider or facility, the plan or
issuer must provide, in a timely manner,
the following information: (1) Whether
the QPA for items and services involved
included contracted rates that were not
on a fee-for-service basis for those
specific items and services and whether

the QPA for those items and services
was determined using underlying fee
schedule rates or a derived amount; (2)
if a related service code was used to
determine the QPA for a new service
code, information to identify the related
service code; (3) if the plan or issuer
used an eligible database to determine
the QPA, information to identify which
database was used; and (4) if applicable,
upon request, a statement that the plan’s
or issuer’s contracted rates include risksharing, bonus, or other incentive-based
or retrospective payments or payment
adjustments for covered items and
services that were excluded for
purposes of calculating the QPA.
The Departments assume that TPAs
will provide this information on behalf
of self-insured plans. In addition, the
Departments assume that issuers and
TPAs will automate the process of
preparing and providing this
information in a format similar to an
explanation of benefits as part of the
system to calculate the QPA. The cost to
issuers and TPAs of making the changes

182 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.

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to their IT systems is discussed
previously in the RIA.
The Departments estimate that a total
of 1,758 issuers and TPAs will incur
burden to comply with this provision.
Currently, 14 states have established
some payment standards for services
provided by nonparticipating providers
or nonparticipating emergency facilities.
Therefore, the Departments assume that
issuers and TPAs will potentially need
to calculate the QPA for two-thirds of
the claims involving nonparticipating
providers or nonparticipating
emergency facilities.
In 2018, there were approximately
39,690,940 emergency department visits
for patients with individual market or
group health coverage.183 The
Departments estimate that
approximately 18 percent of these
visits 184 will include services provided
by nonparticipating providers or
nonparticipating emergency facilities
and plans and issuers will need to
calculate the QPA for two-thirds of such
claims. Therefore, plans and issuers will
be required to provide the specified
information along with the initial
payment or denial notice for
approximately 4,786,727 claims
annually from nonparticipating
providers or nonparticipating
emergency facilities for emergency
department visits. In addition, in 2018,
there were approximately 4,146,476
emergency department visits that
resulted in hospital admission for
patients with individual market or
group health coverage. Using this as an
estimate of post-stabilization services
provided in emergency facilities, and
assuming that in 16 percent of cases the
patient is treated at a nonparticipating
emergency facility or by a
nonparticipating provider at a

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183 Agency for Healthcare Research and Quality,
HCUP Fast Stats—Trends in Emergency Department
Visits. https://www.hcup-us.ahrq.gov/faststats/
NationalTrendsEDServlet?measure1=01&
characteristic1=14&measure2=&
characteristic2=11&expansionInfoState=hide&
dataTablesState=hide&definitionsState=hide&
exportState=hide.
184 Estimate from Pollitz, K. et al., Surprise Bills
Vary by Diagnosis and Type of Admission,
Peterson-KFF Health System tracker, December 9,
2019, https://www.healthsystemtracker.org/brief/
surprise-bills-vary-by-diagnosis-and-type-ofadmission/.

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participating facility,185 the
Departments estimate that
approximately 663,436 individuals will
have the potential to be treated by a
nonparticipating provider or facility. In
the absence of data, the Departments
assume that in 50 percent of cases
services will be provided by
nonparticipating providers without
satisfying the notice and consent criteria
in these interim final rules for reasons
such as unforeseen, urgent medical
needs and lack of participating
providers in the facility. The
Departments estimate that plans and
issuers will need to calculate the QPA
for two-thirds of such claims. Therefore,
plans and issuers will be required to
provide the required information along
with the initial payment or denial notice
for approximately 222,251 claims from
nonparticipating providers or
nonparticipating emergency facilities for
post-stabilization services. Additionally,
based on 2016 data, the Departments
estimate that there will be 11,107,056
visits to health care facilities annually
for surgical and non-surgical procedures
for individuals with group health
coverage or individual market
coverage.186 The Departments assume
that in 16 percent of cases the patient
will have the potential to receive care
from a nonparticipating provider at a
participating facility, and that in
approximately 5 percent of those cases
services will be provided by
nonparticipating providers without
satisfying the notice and consent criteria
in these interim final rules for reasons
such as the services being ancillary
services or related to unforeseen, urgent
medical needs, and plans and issuers
will need to calculate the QPA for twothirds of such claims. Therefore, plans
and issuers will be required to provide
the required information along with the
initial payment or denial notice for
approximately 59,534 claims annually
for non-emergency services furnished by
185 Estimate from Pollitz, K. et al., Surprise Bills
Vary by Diagnosis and Type of Admission,
Peterson-KFF Health System tracker, December 9,
2019, https://www.healthsystemtracker.org/brief/
surprise-bills-vary-by-diagnosis-and-type-ofadmission/.
186 Estimates based on data on postoperative
office visits. Centers for Disease Control, National
Ambulatory Medical Care Survey: 2016 National
Summary Tables. Available at https://www.cdc.gov/
nchs/fastats/physician-visits.htm.

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a nonparticipating provider at a
participating health care facility. In
total, plans and issuers will be required
to provide documents related to QPAs
along with the initial payment or denial
of payment for approximately 5,068,512
claims annually from nonparticipating
providers or facilities.
The Departments estimate that for
each issuer or TPA it will take a medical
secretary 10 minutes (at an hourly rate
of $37.50) to prepare the documentation
and attach it to each payment or denial
notice or explanation of benefits sent to
the nonparticipating provider or facility.
The Departments assume that this
information will be sent electronically
at minimal cost. The total annual
burden for all issuers and TPAs to
provide the QPA information and
certification along with 5,068,512
payments or denial notices, is estimated
to be approximately 844,752 hours, with
an associated equivalent cost of
approximately $31.7 million.
The Departments assume that for the
5,068,512 QPA information sent to
nonparticipating providers or
nonparticipating emergency facilities,
50 percent will result in requests to
provide additional information and
plans and issuers will be required to
send additional information to
approximately 2,534,256 providers or
facilities. The Departments estimate that
it will take a medical secretary 15
minutes (at an hourly rate of $37.50) to
prepare the document and provide it to
the provider or facility that requested it.
The Departments assume that this
information will be delivered
electronically with minimal additional
cost. The total estimated burden, for all
issuers and TPAs, will be approximately
633,564 hours annually, with an
associated equivalent cost of
approximately $23.8 million.
The total annual burden for all issuers
and TPAs for providing the initial and
additional information related to QPA
will be 1,478,316 hours, with an
equivalent cost of $55,436,853. As DOL,
the Treasury Department and HHS share
jurisdiction, HHS will account for 50
percent of the burden, or approximately
739,158 burden hours with an
equivalent cost of approximately
$27,718,427. The Departments seek
comment on these burden estimates.

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TABLE 5—ANNUAL BURDEN AND COST FOR PLANS AND ISSUERS TO PROVIDE INFORMATION RELATED TO QPA TO
NONPARTICIPATING PROVIDERS AND NONPARTICIPATING EMERGENCY FACILITIES
Estimated
number of
respondents

Estimated
number of
responses

Burden per
response
(hours)

Total annual
burden
(hours)

Total estimated
cost

Initial information ..........................................................
Additional Information ..................................................

879
879

2,534,256
1,267,128

0.167
0.25

422,376
316,782

$15,839,100.93
11,879,325.70

Total ......................................................................

879

3,801,384

........................

739,158

27,718,427.63

3. ICRs Regarding Audits of QPA (45
CFR 149.140(f))
The No Surprises Act provides that
rulemaking must establish a process
under which group health plans and
health insurance issuers offering group
or individual health insurance coverage
are audited by the applicable Secretary
or applicable state authority to ensure
that such plans and coverage are in
compliance with the requirement of
applying a QPA and that the QPA
applied satisfies the definition under
the No Surprises Act with respect to the
year involved.
These interim final rules include an
audit provision establishing that the
Departments’ existing enforcement
procedures will apply with respect to
ensuring that a plan or coverage is in
compliance with the requirement of
determining and applying a QPA
consistent with these interim final rules.
HHS has primary enforcement
authority over issuers (in a state if the
Secretary of HHS makes a determination
that a state is failing to substantially
enforce a provision (or provisions) of
Part A or D of title XXVII of the PHS
Act) and non-federal governmental
plans, such as those sponsored by state
and local government employers and
expects to conduct no more than 9
audits annually. Therefore, this

collection is exempt from the PRA
under 44 U.S.C. 3502(3)(A)(i).
4. ICRs Regarding Disclosure for SelfInsured Plans Opting-In to State Law (45
CFR 149.30)
These interim final rules allow selfinsured group health plans, including
self-insured non-federal governmental
plans, to voluntarily opt in to state law
that provides for a method for
determining the cost-sharing amount or
total amount payable under such a plan,
where a state has chosen to expand
access to such plans, to satisfy their
obligations under section 9816(a)–(d) of
the Code, section 716(a)–(d) of ERISA,
and section 2799A–1(a)–(d) of the PHS
Act. A self-insured plan that has chosen
to opt-in to a state law must
prominently display in its plan
materials describing the coverage of outof-network services a statement that the
plan has opted in to a specified state
law, identify the relevant state (or
states), and include a general
description of the items and services
provided by nonparticipating facilities
and providers that are covered by the
specified state law.
Based on available data, HHS
estimates that approximately 84 selfinsured non-federal governmental plans
in New Jersey, Nevada, Virginia and

Washington 187 will opt-in and incur the
one-time burden and cost to include the
disclosure in their plan documents in
2022. It is estimated that for each plan
an administrative assistant will spend 1
hour (at an hourly rate of $38.86) and
a compensation and benefits manager
will spend 30 minutes (at an hourly rate
of $131.88) to prepare the disclosure.
The estimated total burden for each plan
will be 1.5 hours with an equivalent
cost of approximately $105. The
estimated total annual burden for all 84
plans will be approximately 126 hours
with an equivalent cost of
approximately $8,783. HHS estimates
that there are approximately 11,956
policyholders in these plans that will be
provided the disclosure. HHS assumes
that only printing and material costs are
associated with the disclosure
requirement, because the notice can be
incorporated into existing plan
documents. HHS estimates that the
disclosure will require one-half of a
page, at a cost of $0.05 per page for
printing and materials, and 34 percent
of plan documents will be delivered
electronically at minimal cost.188
Therefore, the cost to deliver 66 percent
of these disclosures in print is estimated
to be approximately $197. The total onetime cost for all plans, incurred in 2022,
is estimated to be approximately $8,981.

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

Year

Estimated
number of
respondents

Estimated
number of
responses

Burden
per response
(hours)

Total
annual
burden
(hours)

Total
estimated
labor
cost

Total
estimated
printing and
materials
cost

Total
estimated
cost

2022 .............................

84

84

1.5

126

$8,783

$197

$8,981

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5. ICRs Regarding Complaints Process
for Surprise Medical Bills (45 CFR
149.150, 45 CFR 149.450)
The No Surprises Act directs the
Departments to establish a process to
187 Based on data on self-insured plans that have
opted in available at: https://
www.insurance.wa.gov/self-funded-group-healthplans, https://www.dol.gov/sites/dolgov/files/EBSA/
researchers/data/health-and-welfare/health-

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receive complaints regarding violations
of the application of the QPA
requirements by group health plans and
health insurance issuers offering group
or individual health coverage under

section 9816(a)(2)(B)(iv) of the Code,
section 716(a)(2)(B)(iv) of ERISA, and
section 2799A–1(a)(2)(B)(iv) of the PHS
Act, and violations by health care
provider, facilities, and providers of air

insurance-coverage-bulletin-2019.pdf, https://
scc.virginia.gov/balancebilling.
188 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-americanhouseholds-used-internet-health-related-activities2019-ntia-data-show.

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ambulance services of the requirements
under sections 2799B–1, 2799B–2,
2799B–3, and 2799B–5 of the PHS Act.
The Departments are of the view that
the complaints process should extend to
all of the balance billing requirements
and define a complainant as any
individual, or their authorized
representative, who files a complaint, as
described and defined in these interim
final rules. This regulatory action is
taken as required by the No Surprises
Act, which directs the Departments to

create a process for balance billing
complaints regarding plans and issuers,
and directs HHS to create a process for
balance billing complaints regarding
providers and facilities.
HHS estimates that there will be, on
average, 3,600 balance billing
complaints against providers, facilities,
providers of air ambulance services,
plans, and issuers submitted annually.
HHS estimates that it will take each
complainant 30 minutes (at an hourly
rate of $54.14) 189 to collect all relevant

documentation related to the alleged
violation and to access and complete the
provided complaint form, with an
equivalent cost of approximately $27.
The total burden for all complainants is
estimated to be 1,800 hours, with an
equivalent annual cost of approximately
$97,452. As DOL, the Treasury
Department and HHS share jurisdiction,
HHS will account for 50 percent of the
burden, approximately 900 burden
hours with an equivalent cost of
approximately $48,726.

TABLE 7—ANNUAL BURDEN AND COSTS FOR COMPLAINTS RELATED TO SURPRISE BILLING
Estimated number of respondents

Estimated
number of
responses

Burden
per response
(hours)

Cost per
response

Total annual
burden
(hours)

Total
estimated
cost

1,800 ....................................................................................

1,800

0.5

$27.07

900

$48,726

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6. ICRs Regarding Notice of Right To
Designate a Primary Care Provider (45
CFR 149.310(a)(4))
These interim final rules continue to
require that if a group health plan or
health insurance issuer requires the
designation by a participant,
beneficiary, or enrollee of a primary care
provider, the plan or issuer must
provide a notice informing each
participant (in the individual market,
primary subscriber) of the terms of the
plan or coverage and their right to
designate a primary care provider. For
group health plans and group health
insurance coverage, the notice must be
included whenever the plan or issuer
provides a participant with a summary
plan description or other similar
description of benefits under the plan or
coverage. For individual health
insurance coverage, the notice must be
included whenever the issuer provides
a primary subscriber with a policy,
certificate, or contract of health
insurance. These interim final rules
continue to include model language to
satisfy the notice requirements. The No
Surprises Act extends the applicability
of the patient protections for choice of
health care professionals to
grandfathered health plans. The patient
protections under section 2719A of the
PHS Act apply to only nongrandfathered group health plans and
health insurance issuers offering nongrandfathered group or individual
health insurance coverage. In contrast,
the patient protections under the No
Surprises Act apply generally to all
group health plans and group and
189 The Departments use the average wage rate for
all occupations.

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individual health insurance coverage,
including grandfathered health plans.
Therefore, the requirements regarding
patient protections for choice of health
care professional under these interim
final rules will newly apply to
grandfathered health plans for plan
years beginning on or after January 1,
2022.
In order to satisfy the patient
protection disclosure requirement, state
and local government plans and issuers
in the individual market will need to
notify policy holders of their plans’
policy in regards to designating a
primary care physician and for
obstetrical or gynecological visits and
will incur a one-time burden and cost to
incorporate the notice into plan
documents. Non-federal governmental
plans and individual market plans that
are currently not grandfathered have
already incurred the one-time cost to
prepare and incorporate this notice in
their existing plan documents.
There are an estimated 90,126 nonfederal governmental employers offering
health plans to employees and 388
health insurance issuers in the
individual market. HHS estimates that
there are approximately 14,417
grandfathered non-federal government
employer-sponsored plans and
approximately 837,543 grandfathered
individual market policies, with
approximately 6,055 grandfathered nonfederal governmental plans offering
HMO and point-of-service (POS)
options.190 HHS assumes that all
individual market issuers offer at least

one HMO, exclusive provider
organization (EPO) or POS options.
It is estimated that in 2022, 5,450
grandfathered non-federal governmental
plans and individual market policies
will be subject to this notice
requirement. While not all HMO, EPO,
and POS options require the designation
of a primary care physician or a prior
authorization or referral before an OB/
GYN visit, HHS is unable to estimate
this number. Therefore, this estimate
should be considered an overestimate of
the number of affected entities.
These interim final rules continue to
provide model language for the notice.
It is estimated that each plan or issuer
will require a compensation and
benefits manager (at an hourly rate of
$131.88) to spend 10 minutes
customizing the model notice to fit the
plan’s specifications. Each plan or
issuer will also require clerical staff (at
an hourly rate of $38.86) to spend 5
minutes adding the notice to the plan’s
documents. The estimated total burden
for each plan or issuer will be 0.25
hours with an equivalent cost of
approximately $25. In 2022, the
estimated total annual burden for all
5,450 plans and issuers will be
approximately 1,362 hours with an
equivalent cost of approximately
$137,430. There will be no additional
burden and cost in 2023 to prepare the
notice, since all plans and issuers will
have incurred the burden and cost by
2022.
HHS estimates that there are
approximately 1.8 million non-federal
governmental plan policyholders in
grandfathered plans, with an estimated

190 According to 2020 Kaiser/HRET survey of
Employer Health Benefits, 11 percent of employers
offer a health maintenance organization (HMO)
option and that 31 percent of employers offer a

point-of-service (POS) option. Available at https://
www.kff.org/health-costs/report/2020-employerhealth-benefits-survey/.

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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations
413,976 policyholders enrolled in
grandfathered HMO and POS plans
options.191 In addition, there are an
estimated 837,543 policyholders with
grandfathered individual market plans.
It is estimated that approximately 75
percent of individual market enrollees
are enrolled in HMO, EPO, and POS
options.192 Therefore, an estimated
627,146 policyholders in the individual
market have grandfathered plans with

HMO, EPO, and POS options. It is
estimated that approximately 937,010
policyholders will remain in
grandfathered non-federal government
employer sponsored and individual
market plans with HMO, EPO, and POS
options in 2022 and will receive the
required notice for the first time in
2022. HHS assumes that only printing
and material costs are associated with
the disclosure requirement, because the

36937

notice can be incorporated into existing
plan documents. HHS estimates that the
notice will require one-half of a page, at
a cost of $0.05 per page for printing and
materials, and 34 percent of the notices
will be delivered electronically at
minimal cost.193 Therefore, the cost to
deliver 66 percent of these notices in
print is estimated to be approximately
$15,461.194

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

Year

Estimated
number of
respondents

Estimated
number of
responses

Burden per
response
(hours)

Total annual
burden
(hours)

Total
estimated
labor cost

Total
estimated
printing and
materials
cost

Total
estimated
cost

2022 .............................

5,450

5,450

0.25

1,362

$137,430

$15,461

$152,891

7. ICRs Regarding Notice and Consent
To Waive Balance Billing Protections,
Retention of Certain Documents, and
Notice to Plan or Issuer (45 CFR
149.410(b)–(e), 45 CFR 149.420(c)–(i))
The No Surprises Act and these
interim final rules require that a plan or
issuer providing coverage of emergency
services do so without the individual or
the health care provider having to
obtain prior authorization and without
regard to whether the health care
provider furnishing the emergency
services is a participating provider or a
participating emergency facility with
respect to the services (regardless of the
department of the hospital in which
such items and services are furnished).
Emergency services include any
additional items and services that are
covered under a plan or coverage after
a participant, beneficiary, or enrollee is
stabilized (referred to as poststabilization services) unless certain
notice and consent requirements are
met. The No Surprises Act and these
interim final rules further apply surprise
billing protections in the case of nonemergency services furnished by
nonparticipating providers during a
visit by a participant, beneficiary, or

enrollee at participating health care
facilities unless notice and consent as
specified in these interim final rules
have been met. The requirements
related to the notice and consent,
applicable exceptions, and timing are
set forth in section 2799B–2 of the PHS
Act, and implemented at 45 CFR
149.410 and 45 CFR 149.420 of these
interim final rules.
In order to meet the notice and
consent requirements of these interim
final rules, nonparticipating providers
and nonparticipating emergency
facilities must provide the participant,
beneficiary, or enrollee with a notice,
meet certain timing requirements, and
obtain consent from the participant,
beneficiary, or enrollee as described in
45 CFR 149.420 and these interim final
rules. The provided notice must: (1)
State the health care provider or facility
is a nonparticipating provider or
facility; (2) include the good faith
estimate of what the individual may be
charged, including any item or service
that is reasonably expected to be
provided in conjunction with such
items and services; (3) provide
information about whether prior
authorization or other care management
limitations may be required; and (4)
clearly state that consent to receive such
items or services is optional and that the
participant, beneficiary, or enrollee may
instead seek care from an available
participating provider, in which case
the individual’s cost-sharing
responsibility would be at the innetwork level. In cases where post-

stabilization services are furnished by a
nonparticipating provider at a
participating emergency facility, the
notice must also include a list of
participating providers at the
participating emergency facility who are
able to furnish the items or services
involved and inform the individual that
they may be referred, at their option, to
such a participating provider.
Additionally, a nonparticipating
provider or nonparticipating emergency
facility must provide the participant,
beneficiary, or enrollee, or such
individual’s authorized representative,
with the notice and consent documents
in any of the 15 most common
languages in the state, or a geographic
region that reasonably reflects the
geographic region served by the
applicable facility. If the individual’s
preferred language is not among the 15
most common languages made available
or the individual cannot understand the
language in which the notice and
consent document are provided the
individual must be provided with a
qualified interpreter.
In addition to providing the required
notice and consent, nonparticipating
emergency facilities, participating
health care facilities, and
nonparticipating providers are obligated
to retain written notice and consent
documents for at least a 7-year period
after the date on which the item or
service in question was furnished.
Where the notice and consent
requirements described in this interim
final rule have been met, the

191 According to the 2020 Kaiser/HRET Survey of
Employer Sponsored Health Benefits, 12 percent of
covered workers in non-federal government plans
have an HMO option and that 11 percent of covered
workers have a POS option.
192 Estimate based of data reported in Unified
Review Template Submissions for 2018 plan. Rate

review data available at https://www.cms.gov/
CCIIO/Resources/Data-Resources/ratereview.html.
193 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-activities2019-ntia-data-show.
194 937,010 notices × 66% = 618,427 notices
printed × $0.05 per page × 1⁄2 pages per notice =
approximately $15,461.

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HHS will revise the burden currently
approved under OMB Control Number
0938–1094, (Notice of Rescission of
Coverage and Disclosure Requirements
for Patient Protection under the
Affordable Care Act, CMS–10330,
expiration: July 31, 2022) to account for
this burden.

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nonparticipating provider, the
participating health care facility on
behalf of the nonparticipating provider,
or the nonparticipating emergency
facility, as applicable, must timely
notify the plan or issuer, respectively,
that the notice and consent criteria have
been met, and if applicable, provide to
the plan or issuer a copy of the signed
notice and consent documents. In
instances where, to the extent permitted
by these rules, the nonparticipating
provider bills the participant,
beneficiary, or enrollee directly, the
provider may satisfy the requirement to
notify the plan or issuer by including
the notice and consent documents with
the bill to the participant, beneficiary, or
enrollee. In addition, for items and
services furnished by a nonparticipating
provider at a participating health care
facility, the provider (or the
participating facility on behalf of the
provider) must timely notify the plan or
issuer that the item or service was
furnished during a visit at a
participating health care facility.
In order to meet the notice and
consent requirements of the statute and
these interim final rules,
nonparticipating providers and
nonparticipating emergency facilities
must provide the participant,
beneficiary, or enrollee with a notice.
HHS is specifying in guidance
mandatory notice and consent forms
that will require customization by the
provider or facility.
HHS assumes that emergency
facilities and health care facilities will
provide the notice and obtain consent
on behalf of nonparticipating providers,
retain records and notify plans and
issuers. HHS estimates that a total of
17,467 health care facilities and
emergency departments (including 475
hospital-affiliated satellite and 270
independent freestanding emergency
departments) will be subject to these
requirements. HHS assumes that for
hospital-affiliated satellite freestanding
emergency departments, the notice and
consent will be developed by the parent
hospital. Therefore, the burden to
develop the notice and consent
documents will be incurred by 16,992
emergency facilities and health care
facilities. HHS estimates that for each
facility it will take a lawyer 1 hour (at
an hourly rate of $143.18) to read and
understand the notice and consent
forms and make any required and
applicable alteration, an administrative
assistant half an hour (at an hourly rate
of $38.86) to make any alterations to the
provided notice and consent documents
and prepare the final documentation, a
computer programmer 1 hour (at an
hourly rate of $91.96) to digitize and

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post on a shared network server or push
to networked computers fillable
versions of the notice and consent
documents, and a Computer and
Information Systems Manager half an
hour (at an hourly rate of $155.52) to
verify accessibility to, and ensure
functionality of, the notice and consent
documents. HHS also estimates each
facility will incur an additional cost of
approximately $1,000 (at $500 per
document) to contract with an outside
firm to translate the notice and consent
documents into the 15 most common
languages in the state or a geographic
region that reasonably reflects the
geographic region served by the
applicable facility. HHS estimates the
one-time first-year burden, to be
incurred in 2021, to make alterations,
prepare the final versions, translate and
make accessible to the providers within
the facility the notice and consent
documentation, for each facility will be
approximately 3 hours, with an
associated equivalent cost of
approximately $1,332. For all 16,992
emergency facilities and health care
facilities, HHS estimates a total one-time
first-year burden of 50,976 hours, with
an associated equivalent cost of
approximately $22.6 million.
In order to meet the notice and
consent requirements of 45 CFR 149.420
with respect to post-stabilization
services, when emergency services are
provided by nonparticipating providers
or nonparticipating emergency facilities,
the provider or facility must provide the
participant, beneficiary, or enrollee with
a notice and obtain consent to be treated
by the nonparticipating emergency
facility or nonparticipating provider.
HHS estimates there are approximately
5,533 emergency departments
(including hospital-affiliated satellite
and independent freestanding
emergency departments) 195 that could
be subject to the notice and consent
requirements in these interim final rules
and will incur ongoing annual costs and
burdens, beginning in 2022. In 2018,
there were approximately 4,146,476
emergency department visits that
resulted in hospital admission for
patients with individual market or
group health coverage.196 Using this as
an estimate of post-stabilization services
195 Emergency Medicine Network, 2018 National
Emergency Department Inventory—USA. Available
at https://www.emnet-usa.org/research/studies/
nedi/nedi2018/.
196 Agency for Healthcare Research and Quality,
HCUP Fast Stats—Trends in Emergency Department
Visits. Available at https://www.hcup-us.ahrq.gov/
faststats/NationalTrendsEDServlet?measure1=01&
characteristic1=14&measure2=&
characteristic2=11&expansionInfoState=
hide&dataTablesState=hide&definitions
State=hide&exportState=hide.

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provided in emergency facilities, and
assuming that in 16 percent of cases the
patient is treated at a nonparticipating
emergency facility or by a
nonparticipating provider at a
participating facility, HHS estimates
that approximately 663,436 individuals
will be provided with a notice and
consent document for post-stabilization
services. HHS anticipates that the notice
and consent will be used infrequently
for post-stabilization services, so this
estimate is an upper bound. HHS
estimates it will take a medical secretary
2 hours (at an hourly rate of $37.50) to
customize the required notice and
consent documents, generate a list of
participating providers, provide and
explain the documents to the individual
(or authorized representative), answer
questions, and obtain the signed consent
if the individual agrees, provide the
signed documents on paper or, as
practicable, electronically, as selected
by the individual, and retain the
documentation as required by these
interim final rules. The total burden for
providing the notice and consent
documents to individuals at all
emergency facilities will be 1,326,872
hours with an equivalent cost of
approximately $49.8 million. HHS
assumes that these documents will be
provided directly to each affected
individual (or authorized
representative) in paper format and will
be 4 pages (2 pages printed doublesided) on average. Assuming a cost of
$0.10 (at $0.05 per page for printing and
material cost) for each notice and
consent document, the total printing
and material costs for all notices will be
approximately $66,344. The total
ongoing cost for all emergency facilities
will be approximately $49.8 million
annually. HHS assumes that
nonparticipating providers and
nonparticipating emergency facilities
will notify the plan or issuer and
provide a copy of the signed notice and
consent documents along with the claim
form electronically at minimal cost.
HHS estimates that each individual
that receives notice and consent from an
emergency facility will require, on
average, 45 minutes (at an hourly rate of
$54.14) to read and understand and sign
the required notice and consent
documents, with a total cost of
approximately $41. For all 663,436
individuals that could potentially
receive the notice and consent
documents, HHS estimates a total
annual burden of 497,577 hours, with
an associated total annual cost of
approximately $26.9 million.
In order to meet the notice and
consent requirements of 45 CFR 149.420
with respect to non-emergency services

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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations
furnished by a nonparticipating
provider at a participating health care
facility, if an individual schedules an
appointment for such items or services
at least 72 hours before the date of the
appointment, the provider or facility
must provide the notice to the
individual, or their authorized
representative, no later than 72 hours
before the date of the appointment. If an
individual schedules an appointment
for such items or services within 72
hours of the date of the appointment,
the provider or facility must provide the
notice to the individual, or their
authorized representative, on the day
that the appointment is made. In the
situation where an individual is
provided the notice on the same day
that the items or services are furnished,
providers and facilities are required to
provide the notice no later than 3 hours
prior to furnishing items or services to
which the notice and consent
requirements applies.
HHS estimates there are
approximately 16,722 health care
facilities that will be subject to the
notice requirement described in these
interim final rules and will incur
ongoing annual costs and burdens
beginning in 2022. Based on 2016 data,
HHS estimates that there will be
11,107,056 visits to health care facilities
annually for surgical and non-surgical
procedures for individuals with group

health coverage or individual market
coverage 197 and that approximately 16
percent of those visits will involve a
nonparticipating provider.198 This
estimate is a lower bound since it is
based on the number of postoperative
office visits and potentially excludes
situations where such visits were not
needed or such follow-up was
conducted at a different setting. HHS
therefore estimates that approximately
1,777,129 individuals could potentially
face balance billing and will be subject
to the notice requirements of these
interim final rules. With respect to nonemergency services furnished by a
nonparticipating provider at a
participating health care facility, HHS
estimates it will take a medical secretary
1 hour (at an hourly rate of $37.50) to
customize the required notice, generate
a list of participating providers, provide
the document via email or mail, as
selected by the individual, and answer
any questions. For all health care
facilities, HHS estimates a total annual
ongoing annual burden of
approximately 1,777,129 hours, with an
associated annual cost of approximately
$66.6 million. HHS estimates that
approximately 66 percent of the notices
will be mailed to individuals (34
percent sent electronically) at a cost of
$0.65 (at $0.05 per page for printing and
material cost and $0.55 postage).199
Assuming minimal cost for electronic

delivery, the total cost of printing and
mailing the notice and consent
documents will be approximately
$762,388 annually. The total ongoing
cost for all health care facilities will be
approximately $67.4 million annually.
HHS estimates that each individual
that receives the notice will require, on
average, 45 minutes (at an hourly rate of
$54.14) to read and understand the
required notice, with a total cost of $41.
For all 1,777,129 individuals that could
receive the notice document, HHS
estimates a total annual burden of
1,332,847 hours, with an associated
total annual cost of $72.2 million. HHS
assumes that nonparticipating providers
(or the participating facilities on behalf
of the providers) will notify the plan or
issuer and provide a copy of the signed
notice and consent documents along
with the claim from the participating
facility electronically at minimal cost.
For all emergency and health care
facilities, the total ongoing burden will
be 3,104,001 hours annually and the
total cost, including printing and
materials cost, will be approximately
$117,228,780 annually starting in 2022.
For all consumers, the total annual
burden to read and understand the
notice will be 1,830,424 hours with an
equivalent cost of $99,099,147 starting
in 2022.

TABLE 9—ONE-TIME AND ANNUAL BURDEN AND COST FOR EMERGENCY DEPARTMENTS AND FACILITIES RELATED TO
NOTICE AND CONSENT
Estimated
number of
respondents

Year

Estimated
number of
responses

Total
annual burden
(hours)

Total
estimated
labor cost

2021 .........................................................
2022 .........................................................
2023 .........................................................

16,992
17,467
17,467

16,992
2,440,565
2,440,565

50,976
3,104,001
3,104,001

$5,646,951
116,400,048
116,400,048

3 Year Average ........................................

17,309

1,632,707

2,086,326

79,482,349

Total
estimated
translating,
printing and
materials cost
$16,992,000
828,732
828,732
183,634
6,216,488

Total
estimated
cost
$22,638,951
117,228,780
117,228,780
85,698,837

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TABLE 10—ANNUAL BURDEN AND COST FOR INDIVIDUALS RELATED TO NOTICE AND CONSENT STARTING IN 2022
Estimated
number of
respondents

Estimated
number of
responses

Total
annual burden
(hours)

Total
estimated labor
cost

Total
estimated
cost

2,440,565

2,440,565

1,830,424

$99,099,147

$99,099,147

197 Estimates based on data on postoperative
office visits. Centers for Disease Control, National
Ambulatory Medical Care Survey: 2016 National
Summary Tables. Available at https://www.cdc.gov/
nchs/fastats/physician-visits.htm.

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198 Estimated based on information provided by
KFF. Available at: https://www.kff.org/health-costs/
poll-finding/data-note-public-worries-about-andexperience-with-surprise-medical-bills/.
199 According to data from the National
Telecommunications and Information Agency, 34

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percent of households in the United States accessed
health records or health insurance online. https://
www.ntia.doc.gov/blog/2020/more-half-americanhouseholds-used-internet-health-related-activities2019-ntia-data-show.

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8. ICRs Regarding Provider Disclosure
on Patient Protections Against Balance
Billing (45 CFR 149.430)
Section 2799B–3 of the PHS Act, as
added by the No Surprises Act and
codified at 45 CFR 149.430, requires
providers and facilities to provide
disclosures regarding patient
protections against balance billing.
Specifically, health care providers and
facilities (including an emergency
department of a hospital or independent
freestanding emergency department) are
required to make publicly available,
post on a public website of the provider
or facility, and provide to participants,
beneficiaries, and enrollees a one-page
notice about surprise billing protections,
which must include information about
any applicable state requirements, and
about how to contact appropriate state
and federal agencies if the individual
believes the provider or facility has
violated the balance billing rules. The
required notice must include clear and
understandable language that explains
the requirements and prohibitions
relating to the prohibitions on balance
billing in cases of emergency services
and in cases of non-emergency services
performed by a nonparticipating
provider at certain participating
facilities, explain any other applicable
state laws, and provide contact
information for the appropriate state
and federal agencies that an individual
may contact if they believe the provider
or facility has violated a requirement
described in the notice.
Health care providers and facilities
are required to publicly post and make
the disclosure publicly available
through a public website accessible free
of charge that is easily accessible,
without barriers, including via search
engines, and that ensures that the
information is accessible to the general
public. HHS assumes that providers and
facilities will enter into agreements for
the facilities to provide the disclosure
on behalf of the providers and that the
required language and information will
be developed, posted within the facility,
and posted on a public website by the
facility. This will ameliorate the burden
and cost for the individual provider.
Many facilities and providers will be
able to enter into an agreement at
minimal cost if they renew their
contracts prior to 2022. For each facility
whose contracts with providers are not
due to be renewed before 2022, the
burden to enter into agreements related
to this disclosure will vary based on the
number of providers that practice
within the facility. HHS estimates that
for each facility, on average, it will take
a lawyer 2 hours (at an hourly rate of

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$143.18) to draft an agreement and an
administrative assistant 2 hours (at an
hourly rate of $38.86) to provide
electronic copies to all providers to sign.
The total burden for all 17,467 facilities
will be 69,868 hours with an equivalent
cost of approximately $6,359,385, to be
incurred as one-time costs in 2021. HHS
is unable to estimate how many
providers will incur burden to sign the
agreement, but anticipates that the
burden to sign each agreement will be
minimal. In future years, this agreement
can be included in the contract between
the facilities and providers at no
additional cost.
HHS estimates a total of 17,467 health
care facilities (including 475 hospitalaffiliated satellite and 270 independent
freestanding emergency departments)
will incur burden and costs to comply
with this provision. HHS assumes that
for hospital-affiliated satellite
freestanding emergency departments,
the disclosure will be developed by the
parent hospital. HHS estimates that for
each facility, on average, it will take a
lawyer 2 hours (at an hourly rate of
$143.18) to read and understand the
provided notice and draft any
additional, clear, and understandable
language as may be needed, an
administrative assistant 30 minutes (at
an hourly rate of $38.86) to prepare the
final document for distribution and
make the information publicly available
within the facility, and a computer
programmer 1 hour (at an hourly rate of
$91.96) to post the information on a
separate or existing web page, in a
searchable manner, and to make the
content available in an easily
downloadable format. The burden will
be higher for facilities in states with
state laws or All-Payer Model
Agreements, but lower for facilities in
states without any state laws. HHS
assumes that each facility will post a
single page document in at least two
prominent locations, such as where
individuals schedule care, check-in for
appointments, or pay bills, and
estimates that each facility will incur a
printing cost of $0.10 (at $0.05 per page
for printing and materials) in order to
post the required disclosure information
prominently at each health care facility.
HHS anticipates that hospitals will post
6 notices on average, and incur an
additional cost of $0.20 each. In
addition, HHS assumes that each of the
475 hospital-affiliated satellite
freestanding emergency departments
will post two notices on average and
incur a cost of $0.10 each. HHS
estimates the one-time burden, to be
incurred in 2021, to develop, prepare,
and post the required disclosure

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information, for each facility will be
approximately 3.5 hours, with an
associated equivalent cost of
approximately $398. For all facilities,
HHS estimates a total one-time burden
of 59,472 hours, with an associated cost
of approximately $6.8 million,
including materials and printing costs.
HHS recognizes that there are some
small providers and facilities that do not
maintain or provide a publicly available
website. Such entities are not required
to make a disclosure on a public
website. Therefore, HHS considers the
estimate to be a high-end estimate.
HHS encourages states to develop
language to assist providers and
facilities in fulfilling this disclosure
requirement. There are currently 33
states that have enacted laws to provide
some protection to consumers for
surprise billing. Some or all of these
states may choose to develop model
language. HHS assumes that it will take
a lawyer 2 hours (at an hourly rate of
$143.18) and an administrative assistant
1 hour (at an hourly rate of $38.86) to
develop and amend the model language.
The total one-time burden, to be
incurred in 2021, for each state will be
3 hours with an equivalent cost of
approximately $325. For all 33 states,
HHS estimates the total one-time burden
will be 99 hours with an equivalent cost
of approximately $10,732.
In addition to requiring providers and
facilities to publicly post and make the
required disclosure publicly available
through a public website, providers and
facilities are required to provide
individuals the required disclosure
information in a one-page notice. The
required notice must be provided inperson, through the mail or via email, as
selected by the participant, beneficiary,
or enrollee no later than the date on
which the health care provider or health
care facility requests payment from the
individual (including requests for
copayment made at the time of a visit
to the provider or facility), or with
respect to individual from whom the
health care facility or health care
provider does not request payment, no
later than the date on which the health
care provider or health care facility
submits a claim to the group health plan
or health insurance issuer. HHS
assumes that, in order to reduce burden
and costs, facilities will choose to
provide the required disclosure to the
individual (or their selected
representative) at the time the
individual is processed for any visit,
upon check-in, or when other standard
disclosures are shared with individuals
with minimal additional burden. HHS
estimates that there will be
approximately 39,690,940 emergency

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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations
provided along with other forms and
notices usually provided to individuals
without incurring significant labor cost.
For all facilities, HHS estimates a total
annual ongoing annual cost of $2.5
million, starting in 2022. HHS
recognizes that the number of notices
provided by each facility will vary
depending on the number of annual
visits and that some facilities could
incur higher costs to provide the
disclosure while others could incur
lower costs. HHS assumes that all
disclosures will be provided in-person;
however, HHS acknowledges that some
individuals will choose to have this

department visits 200 and 11,107,056
visits to health care facilities annually
for surgical and non-surgical
procedures 201 for individuals with
group health coverage or individual
market coverage. This is a lower bound
for the number of patients who will
receive the disclosure since HHS lacks
comprehensive data on patients who
receive services on all health care
facilities. In order to provide the
required disclosure to individuals each
facility will incur a cost of
approximately $0.05 for printing and
materials for each disclosure. HHS
assumes that this disclosure will be

36941

notice provided to them via email, at a
minimal cost to the facility, and others
may choose to receive the disclosure via
mail, in which case the facility will
incur additional postage costs.
HHS seeks comment on these burden
estimates. Specifically, HHS seeks
comment on the costs and burdens
associated with posting the required
information on a public website. HHS
also seeks comment on the number of
facilities that will be affected by these
requirements and the number of
individuals that would be required to
receive the required notice.

TABLE 11—ONE-TIME BURDEN AND COSTS RELATED TO AGREEMENTS BETWEEN FACILITIES AND PROVIDERS
Year

Estimated
number of
respondents

Estimated
number of
responses

Burden
per response
(hours)

Cost per
response

Total
annual burden
(hours)

Total
estimated
cost

2021 .........................................................

17,467

17,467

4

$364.08

69,868

$6,359,385

TABLE 12—ONE-TIME AND ANNUAL BURDEN AND COST FOR FACILITIES TO PROVIDE DISCLOSURE ON PATIENT
PROTECTIONS AGAINST BALANCE BILLING
Estimated
number of
respondents

Year

2021 .........................................................
2022 .........................................................
2023 .........................................................
3 Year Average ........................................

17,467
17,467
17,467
17,467

Estimated
number of
responses

Total
annual burden
(hours)

17,467
50,797,996
50,797,996
33,871,153

59,472
0
0
19,824

Total
estimated
labor
cost
$6,758,568
0
0
2,252,856

Total
estimated
printing and
materials
cost
$2,965
2,539,900
2,539,900
1,694,255

Total
estimated
cost
$6,761,533
2,539,900
2,539,900
3,947,111

TABLE 13—ONE-TIME BURDEN AND COST FOR STATES TO DEVELOP STATE SPECIFIC LANGUAGE FOR FACILITIES TO
PROVIDE DISCLOSURE ON PATIENT PROTECTIONS AGAINST BALANCE BILLING
Year

Estimated
number of
respondents

Estimated
number of
responses

Total
annual burden
(hours)

Total
estimated
labor
cost

2021 .................................................................................................................

33

33

99

$10,732.26

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9. ICRs Regarding Plan and Issuer
Disclosure on Patient Protections
Against Balance Billing
Section 9820(c) of the Code, section
720(c) of ERISA, and section 2799A–5(c)
of the PHS Act require plans and issuers
to make publicly available, post on a
public website of the plan or issuer, and
include on each explanation of benefits
for an item or service with respect to
which the requirements under section
9816 of the Code, section 716 of ERISA,
and section 2799A–1 of the PHS Act
apply, information in plain language on
200 Agency for Healthcare Research and Quality,
HCUP Fast Stats—Trends in Emergency Department
Visits.

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the provisions in these sections, and
sections 2799B–1 and 2799B–2 of the
PHS Act, and other applicable state laws
on out-of-network balance billing, and
information on contacting appropriate
state and federal agencies in the case
that an individual believes that such a
provider or facility has violated the
prohibition against balance billing.
The Departments assume that plans
and issuers will use the model notice
developed by HHS, and that TPAs will
develop the notice for self-insured
plans. The Departments estimate that on
average for each plan or issuer it will

take a lawyer 2 hours (at an hourly rate
of $143.18) to read and understand the
provided notice and draft any
additional, clear, and understandable
language as may be needed, an
administrative assistant 30 minutes (at
an hourly rate of $38.86) to prepare the
final document for distribution and
make the information publicly available
within the facility, and a computer
programmer 1 hour (at an hourly rate of
$91.96) to post the information on a
separate or existing web page, in a
searchable manner, and to make the
content available in an easily

201 Estimates based on data on postoperative
office visits. Centers for Disease Control, National
Ambulatory Medical Care Survey: 2016 National
Summary Tables. Available at https://www.cdc.gov/
nchs/fastats/physician-visits.htm.

201 Estimated based on information provided by
KFF. Available at: https://www.kff.org/health-costs/
poll-finding/data-note-public-worries-about-andexperience-with-surprise-medical-bills/.

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36942

Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations
benefits at no additional cost. Under the
same assumptions used to estimate the
number of disclosures provided by
nonparticipating facilities and
nonparticipating providers, the
Departments estimate that issuers and
TPAs will include the disclosure to
approximately 39,690,940 individuals
who receive services at emergency
facilities and 11,107,056 individuals
who received non-emergency services at
health care facilities, for a total of
50,797,996 disclosures. The
Departments assume that 66 percent of
these notices will be provided by mail
and the cost of printing is $0.05 per
page.202 Therefore, the total printing
and materials cost for sending
33,526,677 notices by mail will be
$1,676,334 annually, starting in 2022.
The Departments assume that for the
disclosures sent by mail, it will take an
administrative assistant 1 minute (at an

downloadable format. The total burden
for an individual plan or issuer will be
3.5 hours with an equivalent cost of
approximately $398. The burden will be
higher for issuers and TPAs in states
with applicable state laws or All-Payer
Model Agreements, but lower for issuers
and TPAs in states without any
applicable state laws. The Departments
estimate that there are 1,553 issuers and
205 TPAs. The total burden for all
issuers and TPAs will be 6,153 hours
with an equivalent cost of $699,245, to
be incurred as a one-time cost in 2021.
As DOL, the Treasury Department, and
HHS share jurisdiction, HHS will
account for 50 percent of the burden, or
approximately 3,077 hours with an
equivalent cost of approximately
$349,622.
The Departments assume that plans
and issuers will also include the
disclosure along with the explanation of

hourly rate of $38.86) to print and
enclose the notice with the explanation
of benefits. The disclosures sent
electronically can be sent at minimal
cost. The total burden for all issuers and
TPAs is estimated to be 558,778 hours
with an equivalent cost of $21,714,111.
There will be no additional mailing
costs, since the disclosure will be
enclosed with the explanation of
benefits. The total annual cost to all
issuers and TPAs for sending the notices
is estimated to be approximately
$23,390,445 starting in 2022. As DOL,
the Treasury Department and HHS share
jurisdiction, HHS will account for 50
percent of the burden, or approximately
279,389 hours, with an equivalent cost
of $10,857,056, and printing and
materials cost of $838,167, for a total
annual cost of $11,695,223 starting in
2022.

TABLE 14—ONE-TIME AND ANNUAL BURDEN AND COST FOR PLANS AND ISSUERS TO PROVIDE DISCLOSURE ON PATIENT
PROTECTIONS AGAINST BALANCE BILLING
Estimated
number of
respondents

Year

2021 .........................................................
2022 .........................................................
2023 .........................................................
3 year Average ........................................

Estimated
number of
responses

879
879
879
879

Total
estimated
labor
cost

Total
annual burden
(hours)

879
25,398,998
25,398,998
16,932,958

3,077
279,389
279,389
187,285

Total
estimated
printing and
materials cost

$349,622
10,857,056
10,857,056
7,354,578

Total
estimated
cost

0
838,167
838,167
558,778

$349,622
11,695,223
11,695,223
7,913,356

Printing and
materials
cost

Total cost

10. Summary of Annual Burden
Estimates for Information Collection
Requirements

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TABLE 15—ANNUAL RECORDKEEPING AND REPORTING REQUIREMENTS
Burden
per
response
(hours)

Total annual
burden
(hours)

Hourly
labor cost
of
reporting

3,801,384
84
1,800

0.19
1.50
0.5

739,158
126
900

$37.50
69.87
54.14

$27,718,427
8,783
48,726

0
197
0

$27,718,427
8,981
48,726

5,450
17,309

5,450
1,632,707

0.25
1.28

1362
2,086,326

100.87
38.10

137,430
79,482,349

15,461
6,216,488

152,891
85,698,837

0938–NEW ...

2,440,565

2,440,565

0.75

1,830,424

54.14

99,099,147

0

99,099,147

0938–NEW ...

17,467

33,871,153

* 3.5

19,824

* 113.67

2,252,856

1,694,255

3,947,111

0938–NEW ...

17,467

17,467

4

69,868

91.02

6,359,385

0

6,359,385

0938–NEW ...
0938–NEW ...

33
879

33
16,932,958

3
0.01

99
187,285

108.41
39.27

10,732
7,354,578

0
558,778

10,732
7,913,356

.......................

2,501,933

58,703,602

................

4,935,372

................

222,472,414

8,485,179

230,957,592

Regulation section

OMB control
No.

45 CFR 149.140(d) ........
45 CFR 149.30 ..............
45 CFR 149.150,
149.450.
45 CFR 149.310(a)(4) ....
45 CFR 149.410(b)—(e),
149.420(c)–(i)—Facilities and Providers.
45 CFR 149.410(b)–(e),
149.420(c)—(i) –Consumers.
45 CFR 149.430—Facilities and Providers.
45 CFR 149.430—Facility and Provider agreements.
45 CFR 149.430—States
Section 2799A–5(c) of
the PHS Act.

0938–NEW ...
0938–NEW ...
0938–NEW ...

879
84
1,800

0938–1094 ....
0938–NEW ...

Total ........................

Respondents

Responses

Total labor
cost of
reporting

* Estimate based on burden incurred in first year only.
202 According to data from the National
Telecommunications and Information Agency, 34
percent of households in the United States accessed

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health records or health insurance online. https://
www.ntia.doc.gov/blog/2020/more-half-american-

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households-used-internet-health-related-activities2019-ntia-data-show.

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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations
11. Submission of PRA-Related
Comments
HHS has submitted a copy of this
final rule to OMB for its review of the
rule’s information collection
requirements. The requirements are not
effective until they have been approved
by OMB.
To obtain copies of the supporting
statement and any related forms for the
collections discussed in this rule (CMS–
9909–IFC), please visit the CMS website
at www.cms.hhs.gov/
PaperworkReductionActof1995, or call
the Reports Clearance Office at 410–
786–1326.
E. Paperwork Reduction Act—
Department of Labor and Department of
the Treasury
As part of the continuing effort to
reduce paperwork and respondent
burden, the Departments conduct a
preclearance consultation program to
provide the general public and federal
agencies with an opportunity to
comment on proposed and continuing
collections of information in accordance
with the PRA. This helps to ensure that
the public understands the
Departments’ collection instructions,
respondents can provide the requested
data in the desired format, reporting
burden (time and financial resources) is
minimized, collection instruments are
clearly understood, and the
Departments can properly assess the
impact of collection requirements on
respondents.
Under the PRA, an agency may not
conduct or sponsor, and an individual
is not required to respond to, a
collection of information unless it
displays a valid OMB control number.
The information collections are
summarized as follows:

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1. ICRs Regarding Notice of Right To
Designate a Primary Care Provider (26
CFR 54.9822–1T, 29 CFR 2590.722)
These interim final rules require that
if a group health plan or health
insurance issuer requires the
designation by a participant,
beneficiary, or enrollee of a primary care
provider, the plan or issuer must
provide a notice informing each
participant (in the individual market,
primary subscriber) of the terms of the
plan or coverage and their right to
designate a primary care provider. For
group health plans and group health
insurance coverage, the notice must be
included whenever the plan or issuer
provides a participant with a summary
plan description or other similar
description of benefits under the plan or
coverage. For individual health

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insurance coverage, the notice must be
included whenever the issuer provides
a primary subscriber with a policy,
certificate, or contract of health
insurance. These interim final rules
include model language to satisfy the
notice requirements. The No Surprises
Act extends the applicability of the
patient protections for choice of health
care professionals. The patient
protections under section 2719A of the
PHS Act apply to only nongrandfathered group health plans and
health insurance issuers offering nongrandfathered group or individual
health insurance coverage. In contrast,
the patient protections under the No
Surprises Act apply generally to all
group health plans and group and
individual health insurance coverage,
including grandfathered health plans.
Therefore, the requirements regarding
patient protections for choice of health
care professional under these interim
final rules will newly apply to
grandfathered health plans for plan
years beginning on or after January 1,
2022.
DOL estimates that there are 2.5
million ERISA-covered plans. Data
obtained from the 2020 Kaiser/HRET
Survey of Employer Sponsored Health
Benefits finds that 16 percent of firms
offering health benefits offer at least one
grandfathered health plan. DOL
estimates that five percent of plans will
relinquish their grandfathered status in
2021. The data from the 2020 Kaiser/
HRET Survey of Employer Sponsored
Health Benefits also finds that 11
percent of plans have an HMO option
and that 31 percent of plans offer a POS
option. Thus, DOL estimates that in
2022, 161,148 grandfathered plans will
be subject to this notice requirement.203
While not all HMO and POS options
require the designation of a primary care
physician or a prior authorization or
referral before an OB/GYN visit, DOL is
unable to estimate this number.
Therefore, these estimates should be
considered an overestimate of the
number of affected entities.
Each of the plans will require a
compensation and benefits manager to
spend 10 minutes individualizing the
model notice to fit the plan’s
specifications at an hourly rate of
$134.21.204 In 2022, this results in
203 2.5 million ERISA-covered plans × 16%
grandfathered plans × (100% minus 5% newly nongrandfathered plans) × (11% HMOs + 31% POSs)
= 161,148 affected plans.
204 For more information on how the Department
estimates labor costs see: https://www.dol.gov/sites/
dolgov/files/EBSA/laws-and-regulations/rules-andregulations/technical-appendices/labor-cost-inputsused-in-ebsa-opr-ria-and-pra-burden-calculationsjune-2019.pdf.

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36943

26,858 hours of burden at an equivalent
cost of $3,604,602.
Each plan will also require clerical
staff to spend 5 minutes adding the
notice to the plan’s documents at an
hourly rate of $55.14. In 2022, this
results in 13,429 hours of burden at an
equivalent cost of $740,473.
Thus, the total hour burden associated
with this ICR is 40,287 hours at an
equivalent cost of $4,345,075. DOL
shares this burden equally with the
Department of the Treasury. Therefore,
the total hour burden for DOL and the
Treasury Department is each
approximately 20,143 hours at an
equivalent cost of $2,172,537.
The Departments assume that only
printing and material costs are
associated with the disclosure
requirement, because the final
regulations provide model language that
can be incorporated into existing plan
documents, such as an SPD. The
Departments estimate that the notice
will require one-half of a page, five
cents per page printing and material
cost will be incurred, and 58.2 percent
of the notices will be delivered
electronically.205
DOL estimates that there are 62.6
million ERISA-covered policyholders.
Data obtained from the 2020 Kaiser/
HRET Survey of Employer Sponsored
Health Benefits finds that 14 percent of
covered workers are enrolled in a
grandfathered plan. DOL estimates that
5 percent of plans would relinquish
their grandfathered status annually in
2021. The data from the 2020 Kaiser/
HRET Survey of Employer Sponsored
Health Benefits also finds that 13
percent of covered workers have an
HMO option and that 8 percent of
covered workers have a POS option.
DOL estimates that plans will produce
205 According to data from the National
Telecommunications and Information Agency
(NTIA), 40.0 percent of individuals age 25 and over
have access to the internet at work. According to
a Greenwald & Associates survey, 84 percent of
plan participants find it acceptable to make
electronic delivery the default option, which is
used as the proxy for the number of participants
who will not opt-out of electronic disclosure that
are automatically enrolled (for a total of 33.6
percent receiving electronic disclosure at work).
Additionally, the NTIA reports that 40.4 percent of
individuals age 25 and over have access to the
internet outside of work. According to a Pew
Research Center survey, 61.0 percent of internet
users use online banking, which is used as the
proxy for the number of internet users who will
affirmatively consent to receiving electronic
disclosures (for a total of 24.7 percent receiving
electronic disclosure outside of work). Combining
the 33.6 percent who receive electronic disclosure
at work with the 24.7 percent who receive
electronic disclosure outside of work produces a
total of 58.2 percent who will receive electronic
disclosure overall.

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

730,346 notices in 2022.206 This results
in a cost burden of approximately
$18,259 in 2022.207 DOL shares this
burden equally with the Department of
the Treasury. Therefore, the total cost
burden for DOL is approximately $9,129
and the total cost burden for the
Treasury Department is $9,129. The
summary of burden for this information
collection has also been provided
below.
Summary of Burden
Type of Review: Revised Collection.
Agency: DOL–EBSA, Treasury-IRS.
Title: Affordable Care Act Patient
Protection Notice.
OMB Numbers: 1210–0142, 1545–
2181.
Affected Public: Businesses or other
for-profits, Not-for-profit institutions.
Total Respondents: 161,148.
Total Responses: 730,346.
Frequency of Response: Occasionally.
Estimated Total Annual Burden
Hours: 40,287 (DOL—20,143;
Treasury—20,143).
Estimated Total Annual Burden Cost:
$18,259 (DOL—$9,129; Treasury—
$9,129).
2. ICRs Regarding Information To Be
Shared About QPA (26 CFR 54.9816–
6T(d), 29 CFR 2590.716–6(d))

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These interim final rules require plans
and issuers to provide certain
information to nonparticipating
providers or nonparticipating
emergency facilities in cases in which
the recognized amount with respect to
an item or service furnished by a
nonparticipating provider or
nonparticipating emergency facility is
the QPA. Specifically, plans and issuers
must provide the following information
to providers (including air ambulance
providers) and facilities, when making
an initial payment or notice of denial of
payment: (i) The QPA for each item or
service involved; and (ii) a statement
certifying that the plan or issuer has
determined that the QPA applies for the
purposes of the recognized amount (or,
in the case of air ambulance services, for
calculating the participant’s,
beneficiary’s, or enrollee’s cost sharing),
and that each QPA was determined in
compliance with 26 CFR 54.9816–6T(d),
29 CFR 2590.716–6, or 45 CFR 149.140,
as applicable. Additionally, upon
request of the provider or facility, the
plan or issuer must provide in a timely
206 2022: 62.6 million ERISA-covered
policyholders × 14% of covered employees in
grandfathered plans × (100% minus 5% newly nongrandfathered plans) × (13% in HMOs + 8% in
POSs) * 41.8% = 730,346 notices.
207 2022: $0.05 per page * 1/2 pages per notice *
730,346 notices = $18,259.

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manner the following information: (i)
Whether the QPA for items and services
involved included contracted rates that
were not on a fee-for-service basis for
those specific items and services and
whether the QPA for those items and
services was determined using
underlying fee schedule rates or a
derived amount; (ii) if applicable,
information to identify which database
was used to determine the QPA; and
(iii) if applicable, a statement that the
plan’s or issuer’s contracted rates
include risk-sharing, bonus, or incentive
based payments for covered items and
services (as applicable) that were
excluded for purposes of calculating the
QPA.
As discussed earlier in HHS’ PRA
section, the total annual burden for all
issuers and TPAs for providing the
initial and additional information
related to QPA will be 1,478,316 hours,
with an equivalent cost of $55,436,853.
As HHS, DOL, and the Treasury
Department share jurisdiction, it is
estimated that 50 percent of the burden
will be accounted for by the HHS, 25
percent of the burden will be accounted
for by the Treasury Department, and the
remaining 25 percent will be accounted
for by DOL. Thus, HHS will account for
approximately 739,158 burden hours
with an equivalent cost of
approximately $27,718,427. DOL and
the Treasury Department will each
account for 369,579 burden hours with
an equivalent cost of approximately
$13,859,214.
3. ICRs Regarding Complaints Process
for Surprise Medical Bills (26 CFR
54.9816–7T, 29 CFR 2590.716–7)
The No Surprises Act directs the
Departments to establish a process to
receive complaints regarding violations
of the application of the QPA by group
health plans and health insurance
issuers offering group or individual
health coverage, and violations by
health care providers, facilities, and
providers of air ambulance services of
the requirements under sections 2799B–
2 and 2799B–3 of the PHS Act. The
Departments define a complainant as
any individual, or their authorized
representative, who files a complaint, as
described and defined in these interim
final rules. This regulatory action is
taken as required by the No Surprises
Act, which directs the Departments to
create a process for balance billing
complaints regarding plans and issuers,
and directs HHS to create a process for
balance billing complaints regarding
providers and facilities.
As discussed earlier in HHS’ PRA
section, the total burden for all
complainants is estimated to be 1,800

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hours, with an equivalent annual cost of
approximately $97,452. As HHS, DOL,
and the Treasury Department share
jurisdiction, it is estimated that 50
percent of the burden will be accounted
for by the HHS, 25 percent of the burden
will be accounted for by the Treasury
Department, and the remaining 25
percent will be accounted for by DOL.
HHS will account for approximately 900
burden hours with an equivalent cost of
approximately $48,726. DOL and the
Treasury Department will each account
for approximately 450 burden hours
with an equivalent cost of
approximately $24,363.
4. ICRs Regarding Opt-In State Balance
Bill Process (26 CFR 54.9816–3T, 29
CFR 2590.716–3)
The interim final rules allow plans to
voluntarily opt in to state law that
provides for a method for determining
the cost-sharing amount or total amount
payable under such a plan, where a state
has chosen to expand access to such
plans, to satisfy their obligations under
section 9816(a)–(d) of the Code, section
716(a)–(d) of ERISA, and section
2799A–1(a)–(d) of the PHS Act. A plan
that has chosen to opt into a state law
must prominently display in its plan
materials describing the coverage of outof-network services a statement that the
plan has opted into a specified state
law, identify the state (or states), and
include a general description of the
items and services provided by
nonparticipating facilities and providers
that are covered by the specified state
law.
Currently, there are four states that
allow self-insured plans to opt in:
Nevada, New Jersey, Washington, and
Virginia. According to the Nevada
Department of Health and Human
Services’ 2020 Annual Report, 20
private entities or organizations have
elected to participate in the state’s
balance billing law. In addition,
according to the Virginia State
Corporation Commission, 231 private
self-insured plans in Virginia have
elected to participate in the state’s
balance billing law.208 Furthermore,
according to Washington’s Office of the
Insurance Commissioner, 309 private
self-insured plans in Washington have
elected to participate in the state’s
balance billing law.209 DOL does not
have data on the number of self-insured
plans that have opted into New Jersey’s
208 Virginia State Corporation Commission.
https://scc.virginia.gov/balancebilling#.
209 Washington’s Office of Insurance
Commissioner. ‘‘Self-Funded Group Health Plans
Participating in the Balance Billing Protection Act.’’
https://www.insurance.wa.gov/self-funded-grouphealth-plans.

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balance billing law. In order to estimate
the number of self-insured plans that
have opted into the balance billing law
for New Jersey, DOL has scaled
Washington’s estimate by the number of
participants with self-insured ERISAcovered plans.210 According to the 2019
Health Insurance Coverage Bulletin,
there are respectively, 0.7 million, 2.1
million, and 2.7 million with selfinsured ERISA-covered plans in
Nevada, Virginia, and New Jersey.
Additionally, according to the
Washington’s Office of Insurance
Commissioner, about 0.5 million selfinsured participants have opted into
Washington’s balance billing law.211
This results in a total of 6 million
participants.212 Thus, DOL estimates
that 20, 231, 309, and 57 private selfinsured plans will opt in respectively in
Nevada, Virginia, Washington, and New
Jersey, resulting in a total of 617 selfinsured plans.213 These plans will incur
the one-time burden and cost to include
the disclosure in their plan documents
in 2022.
DOL estimates that it will take 1 hour
for an administrative assistant, with a
wage rate of $55.14, to gather
information and review information.214
This results in hour burden of 617
hours, with an equivalent cost of
$34,023. DOL estimates that it will take
30 minutes for a benefits manager, with
a wage rate of $134.21, to gather
information and review information.215
This results in hour burden of 309
210 Nevada Department of Health and Human
Services’ Office of Consumer Health Assistance.
‘‘Payment for Medically Necessary Emergency
Services Provided Out-of-Network 2020 Annual
Report.’’ (2020). https://dhhs.nv.gov/uploadedFiles/
dhhsnvgov/content/Programs/CHA/
AB469%20LCB%20Annual%20Report%20
2020.pdf.
211 Washington’s Office of Insurance
Commissioner. ‘‘Self-Funded Group Health Plans
Participating in the Balance Billing Protection Act.’’
https://www.insurance.wa.gov/self-funded-grouphealth-plans.
212 Employee Benefits Security Administration.
‘‘Health Insurance Coverage Bulletin: Abstract of
Auxiliary Data for the March 2019 Annual Social
and Economic Supplement to the Current
Population Survey.’’ (2019). https://www.dol.gov/
sites/dolgov/files/EBSA/researchers/data/healthand-welfare/health-insurance-coverage-bulletin2019.pdf.
213 New Jersey: 335 × (0.5/2.7) = 62 self-insured
plans; 62 self-insured plans—5 non-federal selfinsured plans = 57 private self-insured plans.
214 For more information on how the Department
estimates labor costs see: https://www.dol.gov/sites/
dolgov/files/EBSA/laws-and-regulations/rules-andregulations/technical-appendices/labor-cost-inputsused-in-ebsa-opr-ria-and-pra-burden-calculationsjune-2019.pdf.
215 For more information on how the Department
estimates labor costs see: https://www.dol.gov/sites/
dolgov/files/EBSA/laws-and-regulations/rules-andregulations/technical-appendices/labor-cost-inputsused-in-ebsa-opr-ria-and-pra-burden-calculationsjune-2019.pdf.

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hours, with an equivalent cost of
$41,406. In 2022, the total hour burden
is 926 hours, with an equivalent cost of
$75,430.
The average number of participants in
a self-insured ERISA-covered plan that
will opt into the four states’ balance
billing laws is 9,724.216 DOL assumes
that only printing and material costs are
associated with the disclosure
requirement, because the notice can be
incorporated into existing plan
documents. DOL estimates that the
disclosure will require one-half of a
page, at a cost of $0.05 per page for
printing and materials, and 34 percent
of plan documents will be delivered
electronically at minimal cost.217 Thus,
in 2022, the cost to deliver 66 percent
of these disclosures in print is estimated
to be approximately $321.218
Thus, the 3-year average hour burden
is 309 hours, with an equivalent cost of
$25,143. The 3-year average cost burden
is $107.
5. ICRs Regarding Plan and Issuer
Disclosure on Patient Protections
Against Balance Billing
Section 9820(c) of the Code, section
720(c) of ERISA, and section 2799A–5(c)
of the PHS Act require plans and issuers
to make publicly available, post on a
public website of the plan or issuer, and
include on each explanation of benefits
for an item or service with respect to
which the requirements under section
9816 of the Code, section 716 of ERISA,
and section 2799A–1 of the PHS Act
apply, information in plain language on
the provisions in these sections, and
sections 2799B–1 and 2799B–2 of the
PHS Act, and other applicable state laws
on out-of-network balance billing, and
information on contacting appropriate
state and federal agencies in the case
that an individual believes that such a
provider or facility has violated the
prohibition against balance billing.
As discussed earlier in HHS’ PRA
section, the total burden for all issuers
and TPAs will be 6,153 hours with an
equivalent cost of $699,245 in 2021. As
HHS, DOL, and the Treasury
Department share jurisdiction, it is
estimated that 50 percent of the burden
will be accounted for by the HHS, 25
percent of the burden will be accounted
216 (6,000,000 participants with self-insured
ERISA-covered plans) / 617 self-insured ERISAcovered plans = 9,724 participants per self-insured
ERISA-covered plan.
217 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-americanhouseholds-used-internet-health-related-activities2019-ntia-data-show.
218 9,724 participants × 0.66 × $0.05 = $321.

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36945

for by the Treasury Department, and the
remaining 25 percent will be accounted
for by DOL. HHS will account for
approximately 3,077 hours with an
equivalent cost of approximately
$349,622. DOL and the Treasury
Department will each account for
approximately 1,539 hours with an
equivalent cost of approximately
$174,811.
Starting in 2022, the total burden for
all issuers and TPAs is estimated to be
558,778 hours with an equivalent cost of
$21,714,111. The total printing and
materials cost for sending 33,526,677
notices by mail will be $1,676,334
annually. As HHS, DOL, and the
Treasury Department share jurisdiction,
it is estimated that 50 percent of the
burden will be accounted for by the
HHS, 25 percent of the burden will be
accounted for by the Treasury
Department, and the remaining 25
percent will be accounted for by DOL.
Thus, HHS will account for 279,389
hours, with an equivalent cost of
$10,857,056, and printing and materials
cost of $838,167 starting in 2022. DOL
and the Treasury Department will each
account for 139,695 hours with an
equivalent cost of $419,084.
Thus, the 3-year average hour burden
associated with this requirement for
DOL and the Treasury Department is
93,643 hours each with an equivalent
cost of $7,354,578. The 3-year average
cost burden for DOL and Treasury is
$279,389 each.
The summary of burden below
encompasses the following ICRs: (1)
Information to be Shared about the QPA
(26 CFR 54.9816–6T(d), 29 CFR
2590.716–6(d)), (2) Complaints Process
for Surprise Medical Bills (26 CFR
54.9816–7T, 29 CFR 2590.716–7), (3)
Opt-In State Balance Bill Process (26
CFR 54.9816–3T, 29 CFR 2590.716–3),
and (4) Plan and Issuer Disclosure on
Patient Protections Against Balance
Billing.
Summary of Burden
Type of Review: New Collection.
Agency: DOL–EBSA, Treasury.
Title: No Surprise Billing.
OMB Numbers: 1210–NEW, 1545–
NEW.
Affected Public: Businesses or other
for-profits, Not-for-profit institutions.
Total Respondents: DOL—1,985;
Treasury—1,779.
Total Responses: DOL—10,368,277;
Treasury—10,368,071.
Frequency of Response: Occasionally.
Estimated Total Annual Burden
Hours: 927,652 (DOL—463,980,
Treasury—463,672).

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Estimated Total Annual Burden Cost:
$558,885 (DOL—$279,496, Treasury—
$279, 389).
F. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA),
(5 U.S.C. 601 et seq.), requires agencies
to analyze options for regulatory relief
of small entities to prepare an initial
regulatory flexibility analysis to
describe the impact of the proposed rule
on small entities, unless the head of the
agency can certify that the rule will not
have a significant economic impact on
a substantial number of small entities.
The RFA generally defines a ‘‘small
entity’’ as (1) a proprietary firm meeting
the size standards of the Small Business
Administration (SBA), (2) a not-forprofit organization that is not dominant
in its field, or (3) a small government
jurisdiction with a population of less
than 50,000. States and individuals are
not included in the definition of ‘‘small
entity.’’ HHS uses a change in revenues
of more than 3 to 5 percent as its
measure of significant economic impact
on a substantial number of small
entities. Individuals and states are not
included in the definition of a small
entity. These interim final rules are not
preceded by a general notice of
proposed rulemaking, and thus the
requirements of RFA do not apply.

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G. Unfunded Mandates Reform Act
Section 202 of the Unfunded
Mandates Reform Act of 1995 (UMRA)
requires that agencies assess anticipated
costs and benefits and take certain other
actions before issuing a proposed rule or
any final rule for which a general notice
of proposed rulemaking was published
that includes any Federal mandate that
may result in expenditures in any 1 year
by state, local, or Tribal governments, in
the aggregate, or by the private sector, of
$100 million in 1995 dollars, updated
annually for inflation. In 2021, that
threshold is approximately $158
million. These interim final rules were
not preceded by a general notice of
proposed rulemaking, and thus the
requirements of UMRA do not apply.
H. Federalism
Executive Order 13132 outlines
fundamental principles of federalism. It
requires adherence to specific criteria by
federal agencies in formulating and
implementing policies that have
‘‘substantial direct effects’’ on the states,
the relationship between the national
government and states, or on the
distribution of power and
responsibilities among the various
levels of government. Federal agencies
promulgating regulations that have
these federalism implications must

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consult with state and local officials,
and describe the extent of their
consultation and the nature of the
concerns of state and local officials in
the preamble to the interim final rules.
These interim final rules protect
participants, beneficiaries, or enrollees
in group health plans and group and
individual health insurance coverage,
and covered individuals in FEHB plans,
from surprise medical bills for
emergency services, air ambulance
services furnished by nonparticipating
providers, and non-emergency services
furnished by nonparticipating providers
at participating facilities in certain
circumstances. A number of states
currently have laws related to surprise
medical bills. The Departments are of
the view that Congress did not intend to
supplant state laws regarding balance
billing, but rather to supplement such
laws. The provisions in these interim
final rules are consistent with the
statute’s general approach of
supplementing state law. In addition,
the No Surprises Act and these interim
final rules recognize states’ traditional
role as the primary regulators of health
insurance issuers, providers, and
facilities. The No Surprises Act
authorizes states to enforce the new
requirements regarding health insurance
coverage, including those related to
balance billing, with respect to issuers,
providers, facilities, and providers of air
ambulance services, with HHS enforcing
only in cases where the state has
notified HHS that the state does not
have the authority to enforce or is not
otherwise enforcing, or HHS has made
a determination that a state has failed to
substantially enforce the requirements.
In compliance with the requirement
of Executive Order 13132 that agencies
examine closely any policies that may
have federalism implications or limit
the policy making discretion of the
states, the Departments have engaged in
efforts to consult with and work
cooperatively with affected states,
including participating in conference
calls with and attending conferences of
the NAIC, and consulting with state
insurance officials on a state-by-state
basis. In addition, the Departments
consulted with the NAIC, as required by
the No Surprises Act, to establish the
geographic regions to be used in the
methodology for calculating the QPA.
OPM concluded that it would be
inappropriate for FEHB plans to adopt
varying state standards, and consistent
with the FEHBA, it would adopt state
laws where appropriate pursuant to
bilaterally negotiated FEHB contracts.
While developing these interim final
rules, the Departments attempted to
balance the states’ interests in regulating

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health insurance issuers, providers, and
facilities with the need to ensure at least
the minimum federal consumer
protections in every state. By doing so,
the Departments complied with the
requirements of Executive Order 13132.
I. Congressional Review Act
These interim final rules are subject to
the Congressional Review Act
provisions of the Small Business
Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801 et seq.) and will be
transmitted to the Congress and to the
Comptroller General for review in
accordance with such provisions.
Statutory Authority
The Office of Personnel Management
regulations are adopted pursuant to the
authority contained in 5 U.S.C. 8902(p)
and 5 U.S.C. 8913.
The Department of the Treasury
regulations are adopted pursuant to the
authority contained in sections 7805
and 9833 of the Code.
The Department of Labor regulations
are adopted pursuant to the authority
contained in 29 U.S.C. 1002, 1135, 1182,
1185d, 1191a, 1191b, and 1191c;
Secretary of Labor’s Order 1–2011, 77
FR 1088 (Jan. 9, 2012).
The Department of Health and Human
Services regulations are adopted
pursuant to the authority contained in
sections 2701 through 2763, 2791, 2792,
2794, 2799A–1 through 2799B–9 of the
PHS Act (42 U.S.C. 300gg—300gg–63,
300gg–91, 300gg–92, 300gg–94, 300gg–
300gg139), as amended; sections 1311
and 1321 of the ACA (42 U.S.C. 13031
and 18041).
List of Subjects
5 CFR Part 890
Administrative practice and
procedure, Government employees,
Health facilities, Health insurance,
Health professions, Hostages, Iraq,
Kuwait, Lebanon, Military personnel,
Reporting and recordkeeping
requirements, Retirement.
26 CFR Part 54
Excise taxes, Health care, Health
insurance, Pensions, Reporting and
recordkeeping requirements.
29 CFR Part 2590
Continuation coverage, Disclosure,
Employee benefit plans, Group health
plans, Health care, Health insurance,
Medical child support, Reporting and
recordkeeping requirements.
45 CFR Part 144
Health care, Health insurance,
Reporting and recordkeeping
requirements.

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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations
45 CFR Part 147
Health care, Health insurance,
Reporting and recordkeeping
requirements, and State regulation of
health insurance.
45 CFR Part 149
Balance billing, Health care, Health
insurance, Reporting and recordkeeping
requirements, Surprise billing, State
regulation of health insurance,
Transparency in coverage.
45 CFR Part 156
Administrative practice and
procedure, Advertising, Advisory
committees, Age discrimination, Alaska,
Brokers, Citizenship and naturalization,
Civil rights, Conflict of interests,
Consumer protection, Grant programshealth, Grants administration, Health
care, Health insurance, Health
maintenance organization (HMO),
Health records, Hospitals, Indians,
Individuals with disabilities,
Intergovernmental relations, Loan
programs-health, Medicaid,
Organization and functions
(Government agencies), Prescription
drugs, Public assistance programs,
Reporting and recordkeeping
requirements, Sex discrimination, State
and local governments, Sunshine Act,
Technical assistance, Women, Youth.
Laurie Bodenheimer,
Associate Director, Healthcare and Insurance
Office of Personnel Management.
Douglas W. O’Donnell,
Deputy Commissioner for Services and
Enforcement, Internal Revenue Service.
Mark J. Mazur,
Acting Assistant Secretary of the Treasury
(Tax Policy).
Ali Khawar,
Assistant Secretary, Employee Benefits
Security Administration, Department of
Labor.
Xavier Becerra,
Secretary, Department of Health and Human
Services.

Office of Personnel Management
For the reasons stated in the
preamble, the Office of Personnel
Management amends 5 CFR part 890 as
follows:
PART 890—FEDERAL EMPLOYEES
HEALTH BENEFITS PROGRAM
1. The authority citation for part 890
continues to read as follows:

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■

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

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section 1 of Pub. L. 110–279, 122 Stat. 2604
(2 U.S.C. 2051); Sec. 890.113 also issued
under section 1110 of Pub. L. 116–92, 133
Stat. 1198 (5 U.S.C. 8702 note); Sec. 890.301
also issued under section 311 of Pub. L. 111–
3, 123 Stat. 64 (26 U.S.C. 9801); Sec.
890.302(b) also issued under section 1001 of
Pub. L. 111–148, 124 Stat. 119, as amended
by Pub. L. 111–152, 124 Stat. 1029 (42 U.S.C.
300gg–14); Sec. 890.803 also issued under 50
U.S.C. 3516 (formerly 50 U.S.C. 403p) and 22
U.S.C. 4069c and 4069c–1; subpart L also
issued under section 599C of Pub. L. 101–
513, 104 Stat. 2064 (5 U.S.C. 5561 note), as
amended; and subpart M also issued under
section 721 of Pub. L. 105–261 (10 U.S.C.
1108), 112 Stat. 2061.

Subpart A—Administration and
General Provisions
2. Section 890.107 is amended by
adding paragraph (e) to read as follows:

■

§ 890.107

Court review.

*

*
*
*
*
(e) A suit for equitable relief founded
on 5 U.S.C. chapter 89 that is based on
5 U.S.C. 8902(p) and is governed by 5
CFR part 890 must be brought against
OPM by December 31 of the 3rd year
after the year in which disputed services
were rendered.
■ 3. Section 890.114 is added to subpart
A to read as follows:
§ 890.114

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health plans and issuers. If and to the
extent an entity offering a health
benefits plan under 5 U.S.C. chapter 89
is licensed under state law and is
properly considered an issuer as defined
at section 2791 of the Public Health
Service Act, the entity is considered a
carrier to the extent of its FEHB health
benefits plan contractual and regulatory
compliance.
Participant, beneficiary, or enrollee
shall include an ‘‘enrollee’’ or ‘‘covered
individual’’ as defined by 5 CFR
890.101, as appropriate.
(c) When a complaint challenges a
carrier’s action or inaction with respect
to the surprise billing provisions, OPM
will coordinate with the Departments of
Health and Human Services, Labor, and
the Treasury to resolve the complaint.
Department of the Treasury
Internal Revenue Service
Accordingly, 26 CFR part 54 is
amended as follows:
PART 54—PENSION EXCISE TAXES
Paragraph 4. The authority citation
for part 54 continues to read, in part, as
follows:

■

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

*

Surprise billing.

(a) A carrier must comply with
requirements described in 26 CFR
54.9816–3T through 54.9816–6T,
54.9817–1T, and 54.9822–1T, 29 CFR
2590.716–3 through 2590.716–6,
2590.717–1, and 2590.722, and 45 CFR
149.30, 149.110 through 149.140, and
149.310 in the same manner as such
provisions apply to a group health plan
or health insurance issuer offering group
or individual health insurance coverage,
subject to 5 U.S.C. 8902(m)(1), and the
provisions of the carrier’s contract. For
purposes of application of such
sections, all carriers are deemed to offer
health benefits in the large group
market.
(b) For purposes of the provisions
referenced in paragraph (a) of this
section:
Group health plan or plan shall mean
a ‘‘health benefits plan’’ defined at 5
U.S.C. 8901(6), which is a Federal
governmental plan offered pursuant to 5
U.S.C. chapter 89.
Health insurance issuer or issuer shall
include a carrier defined at 5 U.S.C.
8901(7). Where the carrier for a health
benefits plan is a voluntary association,
an association of organizations or
entities, or is otherwise comprised of
multiple entities, each entity is
responsible for compliance in the same
manner as such sections apply to group

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*
*
*
*
Par. 5. Section 54.9801–1T is added to
read as follows:

■

§ 54.9801–1T
(temporary).

Basis and scope

(a) Statutory basis. This section and
§§ 54.9801–2 through 54.9801–6,
54.9802–1, 54.9802–2, 54.9802–3T,
54.9802–4, 54.9811–1, 54.9812–1,
54.9815–1251, 54.9815–2704, 54.9815–
2705, 54.9815–2708, 54.9815–2711,
54.9815–2712, 54.9815–2713, 54.9815–
2713A, 54.9815–2714, 54.9815–2715,
54.9815–2715A1, 54.9815–2715A2,
54.9815–2715A3, 54.9815–2719,
54.9815–2715A, 54.9816–1 through
9816–7, 54.9831–1, and 54.9833–1
implement Chapter 100 of Subtitle K of
the Internal Revenue Code of 1986.
(b) Scope. A group health plan or
health insurance issuer offering group
health insurance coverage may provide
greater rights to participants and
beneficiaries than those set forth in the
portability and market reform sections
of this part. This part sets forth
minimum requirements for group health
plans and group health insurance
issuers offering group health insurance
coverage concerning certain consumer
protections of the Health Insurance
Portability and Accountability Act
(HIPAA), including special enrollment
periods and the prohibition against

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discrimination based on a health factor,
as amended by the Patient Protection
and Affordable Care Act (Affordable
Care Act). Other consumer protection
provisions, including other protections
provided by the Affordable Care Act, the
Mental Health Parity and Addiction
Equity Act, and the No Surprises Act are
set forth in this part.
(c) Similar requirements under the
Employee Retirement Income Security
Act and the Public Health Service Act.
Sections 701, 702, 703, 711, 712, 716,
717, 732, and 733 of the Employee
Retirement Income Security Act of 1974
and sections 2701, 2702, 2704, 2705,
2721, 2791, 2799A–1, and 2799A–2 of
the Public Health Service Act impose
requirements similar to those imposed
under Chapter 100 of Subtitle K with
respect to health insurance issuers
offering group health insurance
coverage. See 29 CFR part 2590 and 45
CFR parts 144, 146, 148, and 149. See
also part B of Title XXVII of the Public
Health Service Act and 45 CFR parts
148 and 149 for other rules applicable
to health insurance offered in the
individual market (defined in
§ 54.9801–2).
■ Par. 6. Section 54.9801–2T is added to
read as follows:

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§ 54.9801–2T

Definitions (temporary).

Unless otherwise provided, the
definitions in this section and
§ 54.9801–2 govern in applying the
provisions of sections 9801 through
9825 and 9831 through 9834.
Affiliation period means a period of
time that must expire before health
insurance coverage provided by an
HMO becomes effective, and during
which the HMO is not required to
provide benefits.
COBRA definitions:
(1) COBRA means title X of the
Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended.
(2) COBRA continuation coverage
means coverage, under a group health
plan, that satisfies an applicable COBRA
continuation provision.
(3) COBRA continuation provision
means section 4980B (other than
paragraph (f)(1) of section 4980B insofar
as it relates to pediatric vaccines),
sections 601–608 of ERISA, or title XXII
of the PHS Act.
(4) Exhaustion of COBRA
continuation coverage means that an
individual’s COBRA continuation
coverage ceases for any reason other
than either failure of the individual to
pay premiums on a timely basis, or for
cause (such as making a fraudulent
claim or an intentional
misrepresentation of a material fact in
connection with the plan). An

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individual is considered to have
exhausted COBRA continuation
coverage if such coverage ceases—
(i) Due to the failure of the employer
or other responsible entity to remit
premiums on a timely basis;
(ii) When the individual no longer
resides, lives, or works in the service
area of an HMO or similar program
(whether or not within the choice of the
individual) and there is no other
COBRA continuation coverage available
to the individual; or
(iii) When the individual incurs a
claim that would meet or exceed a
lifetime limit on all benefits and there
is no other COBRA continuation
coverage available to the individual.
Condition means a medical condition.
Creditable coverage means creditable
coverage within the meaning of
§ 54.9801–4(a).
Dependent means any individual who
is or may become eligible for coverage
under the terms of a group health plan
because of a relationship to a
participant.
Employee Retirement Income Security
Act of 1974 (ERISA) means the
Employee Retirement Income Security
Act of 1974, as amended (29 U.S.C. 1001
et seq.).
Enroll means to become covered for
benefits under a group health plan (that
is, when coverage becomes effective),
without regard to when the individual
may have completed or filed any forms
that are required in order to become
covered under the plan. For this
purpose, an individual who has health
coverage under a group health plan is
enrolled in the plan regardless of
whether the individual elects coverage,
the individual is a dependent who
becomes covered as a result of an
election by a participant, or the
individual becomes covered without an
election.
Enrollment date means the first day of
coverage or, if there is a waiting period,
the first day of the waiting period. If an
individual receiving benefits under a
group health plan changes benefit
packages, or if the plan changes group
health insurance issuers, the
individual’s enrollment date does not
change.
Excepted benefits means the benefits
described as excepted in § 54.9831(c).
First day of coverage means, in the
case of an individual covered for
benefits under a group health plan, the
first day of coverage under the plan and,
in the case of an individual covered by
health insurance coverage in the
individual market, the first day of
coverage under the policy or contract.
Genetic information has the meaning
given the term in § 54.9802–3T(a)(3).

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Group health insurance coverage
means health insurance coverage offered
in connection with a group health plan.
Individual health insurance coverage
reimbursed by the arrangements
described in 29 CFR 2510.3–1(l) is not
offered in connection with a group
health plan, and is not group health
insurance coverage, provided all the
conditions in 29 CFR 2510.3–1(l) are
satisfied.
Group health plan or plan means a
group health plan within the meaning of
§ 54.9831–1(a).
Group market means the market for
health insurance coverage offered in
connection with a group health plan.
(However, certain very small plans may
be treated as being in the individual
market, rather than the group market;
see the definition of individual market
in this section.)
Health insurance coverage means
benefits consisting of medical care
(provided directly, through insurance or
reimbursement, or otherwise) under any
hospital or medical service policy or
certificate, hospital or medical service
plan contract, or HMO contract offered
by a health insurance issuer. Health
insurance coverage includes group
health insurance coverage, individual
health insurance coverage, and shortterm, limited-duration insurance.
However, benefits described in
§ 54.9831(c)(2) are not treated as
benefits consisting of medical care.
Health insurance issuer or issuer
means an insurance company, insurance
service, or insurance organization
(including an HMO) that is required to
be licensed to engage in the business of
insurance in a State and that is subject
to State law that regulates insurance
(within the meaning of section 514(b)(2)
of ERISA). Such term does not include
a group health plan.
Health maintenance organization or
HMO means—
(1) A federally qualified health
maintenance organization (as defined in
section 1301(a) of the PHS Act);
(2) An organization recognized under
State law as a health maintenance
organization; or
(3) A similar organization regulated
under State law for solvency in the same
manner and to the same extent as such
a health maintenance organization.
Individual health insurance coverage
means health insurance coverage offered
to individuals in the individual market,
but does not include short-term,
limited-duration insurance. Individual
health insurance coverage can include
dependent coverage.
Individual market means the market
for health insurance coverage offered to
individuals other than in connection

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with a group health plan. Unless a State
elects otherwise in accordance with
section 2791(e)(1)(B)(ii) of the PHS Act,
such term also includes coverage offered
in connection with a group health plan
that has fewer than two participants
who are current employees on the first
day of the plan year.
Issuer means a health insurance
issuer.
Late enrollee means an individual
whose enrollment in a plan is a late
enrollment.
Late enrollment means enrollment of
an individual under a group health plan
other than on the earliest date on which
coverage can become effective for the
individual under the terms of the plan;
or through special enrollment. (For rules
relating to special enrollment, see
§ 54.9801–6.) If an individual ceases to
be eligible for coverage under a plan,
and then subsequently becomes eligible
for coverage under the plan, only the
individual’s most recent period of
eligibility is taken into account in
determining whether the individual is a
late enrollee under the plan with respect
to the most recent period of coverage.
Similar rules apply if an individual
again becomes eligible for coverage
following a suspension of coverage that
applied generally under the plan.
Medical care has the meaning given
such term by section 213(d), determined
without regard to section 213(d)(1)(C)
and so much of section 213(d)(1)(D) as
relates to qualified long-term care
insurance.
Medical condition or condition means
any condition, whether physical or
mental, including, but not limited to,
any condition resulting from illness,
injury (whether or not the injury is
accidental), pregnancy, or congenital
malformation. However, genetic
information is not a condition.
Participant means participant within
the meaning of section 3(7) of ERISA.
Placement, or being placed, for
adoption means the assumption and
retention of a legal obligation for total or
partial support of a child by a person
with whom the child has been placed in
anticipation of the child’s adoption. The
child’s placement for adoption with
such person ends upon the termination
of such legal obligation.
Plan year means the year that is
designated as the plan year in the plan
document of a group health plan, except
that if the plan document does not
designate a plan year or if there is no
plan document, the plan year is—
(1) The deductible or limit year used
under the plan;
(2) If the plan does not impose
deductibles or limits on a yearly basis,
then the plan year is the policy year;

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(3) If the plan does not impose
deductibles or limits on a yearly basis,
and either the plan is not insured or the
insurance policy is not renewed on an
annual basis, then the plan year is the
employer’s taxable year; or
(4) In any other case, the plan year is
the calendar year.
Preexisting condition exclusion means
a limitation or exclusion of benefits
(including a denial of coverage) based
on the fact that the condition was
present before the effective date of
coverage (or if coverage is denied, the
date of the denial) under a group health
plan or group or individual health
insurance coverage (or other coverage
provided to federally eligible
individuals pursuant to 45 CFR part
148), whether or not any medical
advice, diagnosis, care, or treatment was
recommended or received before that
day. A preexisting condition exclusion
includes any limitation or exclusion of
benefits (including a denial of coverage)
applicable to an individual as a result of
information relating to an individual’s
health status before the individual’s
effective date of coverage (or if coverage
is denied, the date of the denial) under
a group health plan, or group or
individual health insurance coverage (or
other coverage provided to federally
eligible individuals pursuant to 45 CFR
part 148), such as a condition identified
as a result of a pre-enrollment
questionnaire or physical examination
given to the individual, or review of
medical records relating to the preenrollment period.
Public health plan means public
health plan within the meaning of
§ 54.9801–4(a)(1)(ix).
Public Health Service Act (PHS Act)
means the Public Health Service Act (42
U.S.C. 201, et seq.).
Short-term, limited-duration
insurance means health insurance
coverage provided pursuant to a
contract with an issuer that:
(1) Has an expiration date specified in
the contract that is less than 12 months
after the original effective date of the
contract and, taking into account
renewals or extensions, has a duration
of no longer than 36 months in total;
(2) With respect to policies having a
coverage start date before January 1,
2019, displays prominently in the
contract and in any application
materials provided in connection with
enrollment in such coverage in at least
14 point type the language in the
following Notice 1, excluding the
heading ‘‘Notice 1,’’ with any additional
information required by applicable state
law:

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36949

Notice 1
This coverage is not required to comply
with certain federal market requirements for
health insurance, principally those contained
in the Affordable Care Act. Be sure to check
your policy carefully to make sure you are
aware of any exclusions or limitations
regarding coverage of preexisting conditions
or health benefits (such as hospitalization,
emergency services, maternity care,
preventive care, prescription drugs, and
mental health and substance use disorder
services). Your policy might also have
lifetime and/or annual dollar limits on health
benefits. If this coverage expires or you lose
eligibility for this coverage, you might have
to wait until an open enrollment period to get
other health insurance coverage. Also, this
coverage is not ‘‘minimum essential
coverage.’’ If you don’t have minimum
essential coverage for any month in 2018,
you may have to make a payment when you
file your tax return unless you qualify for an
exemption from the requirement that you
have health coverage for that month.

(3) With respect to policies having a
coverage start date on or after January 1,
2019, displays prominently in the
contract and in any application
materials provided in connection with
enrollment in such coverage in at least
14 point type the language in the
following Notice 2, excluding the
heading ‘‘Notice 2,’’ with any additional
information required by applicable state
law:
Notice 2
This coverage is not required to comply
with certain federal market requirements for
health insurance, principally those contained
in the Affordable Care Act. Be sure to check
your policy carefully to make sure you are
aware of any exclusions or limitations
regarding coverage of preexisting conditions
or health benefits (such as hospitalization,
emergency services, maternity care,
preventive care, prescription drugs, and
mental health and substance use disorder
services). Your policy might also have
lifetime and/or annual dollar limits on health
benefits. If this coverage expires or you lose
eligibility for this coverage, you might have
to wait until an open enrollment period to get
other health insurance coverage.

(4) If a court holds the 36-month
maximum duration provision set forth
in paragraph (1) of this definition or its
applicability to any person or
circumstances invalid, the remaining
provisions and their applicability to
other people or circumstances shall
continue in effect.
Significant break in coverage means a
significant break in coverage within the
meaning of § 54.9801–4(b)(2)(iii).
Special enrollment means enrollment
in a group health plan under the rights
described in § 54.9801–6 or in group
health insurance coverage under the
rights described in 29 CFR 2590.701–6
or 45 CFR 146.117.

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State health benefits risk pool means
a State health benefits risk pool within
the meaning of § 54.9801–4(a)(1)(vii).
Travel insurance means insurance
coverage for personal risks incident to
planned travel, which may include, but
is not limited to, interruption or
cancellation of trip or event, loss of
baggage or personal effects, damages to
accommodations or rental vehicles, and
sickness, accident, disability, or death
occurring during travel, provided that
the health benefits are not offered on a
stand-alone basis and are incidental to
other coverage. For this purpose, the
term travel insurance does not include
major medical plans that provide
comprehensive medical protection for
travelers with trips lasting 6 months or
longer, including, for example, those
working overseas as an expatriate or
military personnel being deployed.
Waiting period means waiting period
within the meaning of § 54.9815–
2708(b).
Par. 7. Section 54.9815–2719AT is
added to read as follows:

■

§ 54.9815–2719AT
(temporary).

Patient protections

(a)–(b) [Reserved]
(c) Applicability date. The provisions
of this section are applicable to group
health plans and health insurance
issuers for plan years beginning before
January 1, 2022. See also §§ 54.9816–4T
through 54.9816–7T, 54.9817–1T, and
54.9822–1T for rules applicable with
respect to plan years beginning on or
after January 1, 2022.
Par. 8. Sections 54.9816–1T, 54.9816–
2T, 54.9816–3T, 54.9816–4T, 54.9816–
5T, 54.9816–6T, 54.9816–7T, 54.9817–
1T, and 54.9822–1T are added to read
as follows:

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■

Sec.
54.9816–1T Basis and scope (temporary).
54.9816–2T Applicability (temporary).
54.9816–3T Definitions (temporary).
54.9816–4T Preventing surprise medical
bills for emergency services (temporary).
54.9816–5T Preventing surprise medical
bills for non-emergency services
performed by nonparticipating providers
at certain participating facilities
(temporary).
54.9816–6T Methodology for calculating
qualifying payment amount (temporary).
54.9816–7T Complaints process for surprise
medical bills regarding group health
plans (temporary).
54.9817–1T Preventing surprise medical
bills for air ambulance services
(temporary).
54.9822–1T Choice of health care
professional (temporary).

*

*

*

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*

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§ 54.9816–1T
(temporary).

Basis and scope

(a) Basis. This section and
§§ 54.9816–2T through 54.9816–7T,
54.9817–1T, and 54.9822–1T implement
subchapter B of chapter 100 of the
Internal Revenue Code of 1986.
(b) Scope. This part establishes
standards for group health plans with
respect to surprise medical bills,
transparency in health care coverage,
and additional patient protections.
§ 54.9816–2T

Applicability (temporary).

(a) In general. The requirements in
§§ 54.9816–4T through 54.9816–7T,
54.9817–1T, and 54.9822–1T apply to
group health plans (including
grandfathered health plans as defined in
§ 54.9815–1251T), except as specified in
paragraph (b) of this section.
(b) Exceptions. The requirements in
§§ 54.9816–4T through 54.9816–7T,
54.9817–1T, and 54.9822–1T do not
apply to the following:
(1) Excepted benefits as described in
§ 54.9831–1(c).
(2) Short-term, limited-duration
insurance as defined in § 54.9801–2.
(3) Health reimbursement
arrangements or other account-based
group health plans as described in
§ 54.9815–2711(d).
§ 54.9816–3T

Definitions (temporary).

The definitions in § 54.9801–2T apply
to §§ 54.9816–4T through 54.9816–7T,
54.9817–1T, and 54.9822–1T unless
otherwise specified. In addition, for
purposes of §§ 54.9816–4T through
54.9816–7T, 54.9817–1T, and 54.9822–
1T, the following definitions apply:
Air ambulance service means medical
transport by a rotary wing air
ambulance, as defined in 42 CFR
414.605, or fixed wing air ambulance, as
defined in 42 CFR 414.605, for patients.
Cost sharing means the amount a
participant, beneficiary, or enrollee is
responsible for paying for a covered
item or service under the terms of the
group health plan or health insurance
coverage. Cost sharing generally
includes copayments, coinsurance, and
amounts paid towards deductibles, but
does not include amounts paid towards
premiums, balance billing by out-ofnetwork providers, or the cost of items
or services that are not covered under a
group health plan or health insurance
coverage.
Emergency department of a hospital
includes a hospital outpatient
department that provides emergency
services.
Emergency medical condition has the
meaning given the term in § 54.9816–
4T(c)(1).
Emergency services has the meaning
given the term in § 54.9816–4T(c)(2).

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Health care facility, with respect to a
group health plan, in the context of nonemergency services, is each of the
following:
(1) A hospital (as defined in section
1861(e) of the Social Security Act);
(2) A hospital outpatient department;
(3) A critical access hospital (as
defined in section 1861(mm)(1) of the
Social Security Act); and
(4) An ambulatory surgical center
described in section 1833(i)(1)(A) of the
Social Security Act.
Independent freestanding emergency
department means a health care facility
(not limited to those described in the
definition of health care facility with
respect to non-emergency services)
that—
(1) Is geographically separate and
distinct and licensed separately from a
hospital under applicable State law; and
(2) Provides any emergency services
as described in § 54.9816–4T(c)(2)(i).
Nonparticipating emergency facility
means an emergency department of a
hospital, or an independent freestanding
emergency department (or a hospital,
with respect to services that pursuant to
§ 54.9816–4T(c)(2)(ii) are included as
emergency services), that does not have
a contractual relationship directly or
indirectly with a group health plan,
with respect to the furnishing of an item
or service under the plan.
Nonparticipating provider means any
physician or other health care provider
who does not have a contractual
relationship directly or indirectly with a
group health plan, with respect to the
furnishing of an item or service under
the plan.
Notice of denial of payment means,
with respect to an item or service for
which benefits subject to the protections
of §§ 54.9816–4T, 54.9816–5T, and
54.9817–1T are provided or covered, a
written notice from the plan to the
health care provider, facility, or
provider of air ambulance services, as
applicable, that payment for such item
or service will not be made by the plan
and which explains the reason for
denial. The term notice of denial of
payment does not include a notice of
benefit denial due to an adverse benefit
determination as defined in 29 CFR
2560.503–1.
Out-of-network rate means, with
respect to an item or service furnished
by a nonparticipating provider,
nonparticipating emergency facility, or
nonparticipating provider of air
ambulance services—
(1) Subject to paragraph (3) of this
definition, in a State that has in effect
a specified State law, the amount
determined in accordance with such
law;

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(2) Subject to paragraph (3) of this
definition, in a State that does not have
in effect a specified State law—
(i) Subject to paragraph (2)(ii) of this
definition, if the nonparticipating
provider or nonparticipating emergency
facility and the plan agree on an amount
of payment (including if the amount
agreed upon is the initial payment sent
by the plan under § 54.9816–
4T(b)(3)(iv)(A), § 54.9816–5T(c)(3), or
§ 54.9817–1T(b)(4)(i); 29 CFR 2590.716–
4(b)(3)(iv)(A), 2590.716–5(c)(3), or
2590.717–1(b)(4)(i); or 45 CFR
149.110(b)(3)(iv)(A), 149.120(c)(3), or
149.130(b)(4)(i), as applicable, or is
agreed on through negotiations with
respect to such item or service), such
agreed on amount; or
(ii) If the nonparticipating provider or
nonparticipating emergency facility and
the plan enter into the independent
dispute resolution (IDR) process under
section 9816(c) or 9817(b) of the Internal
Revenue Code, section 716(c) or 717(b)
of ERISA, or section 2799A–1(c) or
2799A–2(b) of the PHS Act, as
applicable, and do not agree before the
date on which a certified IDR entity
makes a determination with respect to
such item or service under such
subsection, the amount of such
determination; or
(3) In a State that has an All-Payer
Model Agreement under section 1115A
of the Social Security Act that applies
with respect to the plan; the
nonparticipating provider or
nonparticipating emergency facility; and
the item or service, the amount that the
State approves under the All-Payer
Model Agreement for the item or
service.
Participating emergency facility
means any emergency department of a
hospital, or an independent freestanding
emergency department (or a hospital,
with respect to services that pursuant to
§ 54.9816–4T(c)(2)(ii) are included as
emergency services), that has a
contractual relationship directly or
indirectly with a group health plan
setting forth the terms and conditions
on which a relevant item or service is
provided to a participant or beneficiary
under the plan. A single case agreement
between an emergency facility and a
plan that is used to address unique
situations in which a participant or
beneficiary requires services that
typically occur out-of-network
constitutes a contractual relationship for
purposes of this definition, and is
limited to the parties to the agreement.
Participating health care facility
means any health care facility described
in this section that has a contractual
relationship directly or indirectly with a
group health plan setting forth the terms

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and conditions on which a relevant item
or service is provided to a participant or
beneficiary under the plan. A single
case agreement between a health care
facility and a plan that is used to
address unique situations in which a
participant or beneficiary requires
services that typically occur out-ofnetwork constitutes a contractual
relationship for purposes of this
definition, and is limited to the parties
to the agreement.
Participating provider means any
physician or other health care provider
who has a contractual relationship
directly or indirectly with a group
health plan setting forth the terms and
conditions on which a relevant item or
service is provided to a participant or
beneficiary under the plan.
Physician or health care provider
means a physician or other health care
provider who is acting within the scope
of practice of that provider’s license or
certification under applicable State law,
but does not include a provider of air
ambulance services.
Provider of air ambulance services
means an entity that is licensed under
applicable State and Federal law to
provide air ambulance services.
Same or similar item or service has
the meaning given the term in
§ 54.9816–6T(a)(13).
Service code has the meaning given
the term in § 54.9816–6T(a)(14).
Qualifying payment amount has the
meaning given the term in § 54.9816–
6T(a)(16).
Recognized amount means, with
respect to an item or service furnished
by a nonparticipating provider or
nonparticipating emergency facility—
(1) Subject to paragraph (3) of this
definition, in a State that has in effect
a specified State law, the amount
determined in accordance with such
law.
(2) Subject to paragraph (3) of this
definition, in a State that does not have
in effect a specified State law, the lesser
of—
(i) The amount that is the qualifying
payment amount (as determined in
accordance with § 54.9816–6T); or
(ii) The amount billed by the provider
or facility.
(3) In a State that has an All-Payer
Model Agreement under section 1115A
of the Social Security Act that applies
with respect to the plan; the
nonparticipating provider or
nonparticipating emergency facility; and
the item or service, the amount that the
State approves under the All-Payer
Model Agreement for the item or
service.
Specified State law means a State law
that provides for a method for

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determining the total amount payable
under a group health plan to the extent
such State law applies for an item or
service furnished by a nonparticipating
provider or nonparticipating emergency
facility (including where it applies
because the State has allowed a plan
that is not otherwise subject to
applicable State law an opportunity to
opt in, subject to section 514 of the
Employee Retirement Income Security
Act of 1974). A group health plan that
opts into such a specified State law
must do so for all items and services to
which the specified State law applies
and in a manner determined by the
applicable State authority, and must
prominently display in its plan
materials describing the coverage of outof-network services a statement that the
plan has opted into the specified State
law, identify the relevant State (or
States), and include a general
description of the items and services
provided by nonparticipating facilities
and providers that are covered by the
specified State law.
State means each of the 50 States, the
District of Columbia, Puerto Rico, the
Virgin Islands, Guam, American Samoa,
and the Northern Mariana Islands.
Treating provider is a physician or
health care provider who has evaluated
the individual.
Visit, with respect to items and
services furnished to an individual at a
health care facility, includes, in
addition to items and services furnished
by a provider at the facility, equipment
and devices, telemedicine services,
imaging services, laboratory services,
and preoperative and postoperative
services, regardless of whether the
provider furnishing such items or
services is at the facility.
§ 54.9816–4T Preventing surprise medical
bills for emergency services (temporary).

(a) In general. If a group health plan
provides or covers any benefits with
respect to services in an emergency
department of a hospital or with respect
to emergency services in an
independent freestanding emergency
department, the plan must cover
emergency services, as defined in
paragraph (c)(2) of this section, and this
coverage must be provided in
accordance with paragraph (b) of this
section.
(b) Coverage requirements. A plan
described in paragraph (a) of this
section must provide coverage for
emergency services in the following
manner—
(1) Without the need for any prior
authorization determination, even if the
services are provided on an out-ofnetwork basis.

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(2) Without regard to whether the
health care provider furnishing the
emergency services is a participating
provider or a participating emergency
facility, as applicable, with respect to
the services.
(3) If the emergency services are
provided by a nonparticipating provider
or a nonparticipating emergency
facility—
(i) Without imposing any
administrative requirement or limitation
on coverage that is more restrictive than
the requirements or limitations that
apply to emergency services received
from participating providers and
participating emergency facilities.
(ii) Without imposing cost-sharing
requirements that are greater than the
requirements that would apply if the
services were provided by a
participating provider or a participating
emergency facility.
(iii) By calculating the cost-sharing
requirement as if the total amount that
would have been charged for the
services by such participating provider
or participating emergency facility were
equal to the recognized amount for such
services.
(iv) The plan—
(A) Not later than 30 calendar days
after the bill for the services is
transmitted by the provider or facility
(or, in cases where the recognized
amount is determined by a specified
State law or All-Payer Model
Agreement, such other timeframe as
specified by the State law or All-Payer
Model Agreement), determines whether
the services are covered under the plan
and, if the services are covered, sends to
the provider or facility, as applicable, an
initial payment or a notice of denial of
payment. For purposes of this paragraph
(b)(3)(iv)(A), the 30-calendar-day period
begins on the date the plan receives the
information necessary to decide a claim
for payment for the services.
(B) Pays a total plan payment directly
to the nonparticipating provider or
nonparticipating facility that is equal to
the amount by which the out-of-network
rate for the services exceeds the costsharing amount for the services (as
determined in accordance with
paragraphs (b)(3)(ii) and (iii) of this
section), less any initial payment
amount made under paragraph
(b)(3)(iv)(A) of this section. The total
plan payment must be made in
accordance with the timing requirement
described in section 9816(c)(6), or in
cases where the out-of-network rate is
determined under a specified State law
or All-Payer Model Agreement, such
other timeframe as specified by the State
law or All-Payer Model Agreement.

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(v) By counting any cost-sharing
payments made by the participant or
beneficiary with respect to the
emergency services toward any innetwork deductible or in-network outof-pocket maximums (including the
annual limitation on cost sharing under
section 2707(b) of the Public Health
Service Act) (as applicable) applied
under the plan (and the in-network
deductible and in-network out-of-pocket
maximums must be applied) in the same
manner as if the cost-sharing payments
were made with respect to emergency
services furnished by a participating
provider or a participating emergency
facility.
(4) Without limiting what constitutes
an emergency medical condition (as
defined in paragraph (c)(1) of this
section) solely on the basis of diagnosis
codes.
(5) Without regard to any other term
or condition of the coverage, other
than—
(i) The exclusion or coordination of
benefits (to the extent not inconsistent
with benefits for an emergency medical
condition, as defined in paragraph (c)(1)
of this section).
(ii) An affiliation or waiting period
(each as defined in § 54.9801–2).
(iii) Applicable cost sharing.
(c) Definitions. In this section—
(1) Emergency medical condition
means a medical condition, including a
mental health condition or substance
use disorder, manifesting itself by acute
symptoms of sufficient severity
(including severe pain) such that a
prudent layperson, who possesses an
average knowledge of health and
medicine, could reasonably expect the
absence of immediate medical attention
to result in a condition described in
clause (i), (ii), or (iii) of section
1867(e)(1)(A) of the Social Security Act
(42 U.S.C. 1395dd(e)(1)(A)). (In that
provision of the Social Security Act,
clause (i) refers to placing the health of
the individual (or, with respect to a
pregnant woman, the health of the
woman or her unborn child) in serious
jeopardy; clause (ii) refers to serious
impairment to bodily functions; and
clause (iii) refers to serious dysfunction
of any bodily organ or part.)
(2) Emergency services means, with
respect to an emergency medical
condition—
(i) In general. (A) An appropriate
medical screening examination (as
required under section 1867 of the
Social Security Act (42 U.S.C. 1395dd)
or as would be required under such
section if such section applied to an
independent freestanding emergency
department) that is within the capability
of the emergency department of a

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hospital or of an independent
freestanding emergency department, as
applicable, including ancillary services
routinely available to the emergency
department to evaluate such emergency
medical condition; and
(B) Within the capabilities of the staff
and facilities available at the hospital or
the independent freestanding
emergency department, as applicable,
such further medical examination and
treatment as are required under section
1867 of the Social Security Act (42
U.S.C. 1395dd), or as would be required
under such section if such section
applied to an independent freestanding
emergency department, to stabilize the
patient (regardless of the department of
the hospital in which such further
examination or treatment is furnished).
(ii) Inclusion of additional services.
(A) Subject to paragraph (c)(2)(ii)(B) of
this section, items and services—
(1) For which benefits are provided or
covered under the plan; and
(2) That are furnished by a
nonparticipating provider or
nonparticipating emergency facility
(regardless of the department of the
hospital in which such items or services
are furnished) after the participant or
beneficiary is stabilized and as part of
outpatient observation or an inpatient or
outpatient stay with respect to the visit
in which the services described in
paragraph (c)(2)(i) of this section are
furnished.
(B) Items and services described in
paragraph (c)(2)(ii)(A) of this section are
not included as emergency services if all
of the conditions in 45 CFR 149.410(b)
are met.
(3) To stabilize, with respect to an
emergency medical condition, has the
meaning given such term in section
1867(e)(3) of the Social Security Act (42
U.S.C. 1395dd(e)(3)).
(d) Applicability date. The provisions
of this section are applicable with
respect to plan years beginning on or
after January 1, 2022.
§ 54.9816–5T Preventing surprise medical
bills for non-emergency services performed
by nonparticipating providers at certain
participating facilities (temporary).

(a) In general. If a group health plan
provides or covers any benefits with
respect to items and services described
in paragraph (b) of this section, the plan
must cover the items and services when
furnished by a nonparticipating
provider in accordance with paragraph
(c) of this section.
(b) Items and services described. The
items and services described in this
paragraph (b) are items and services
(other than emergency services)
furnished to a participant or beneficiary

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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations
by a nonparticipating provider with
respect to a visit at a participating
health care facility, unless the provider
has satisfied the notice and consent
criteria of 45 CFR 149.420(c) through (i)
with respect to such items and services.
(c) Coverage requirements. In the case
of items and services described in
paragraph (b) of this section, the plan—
(1) Must not impose a cost-sharing
requirement for the items and services
that is greater than the cost-sharing
requirement that would apply if the
items or services had been furnished by
a participating provider.
(2) Must calculate the cost-sharing
requirements as if the total amount that
would have been charged for the items
and services by such participating
provider were equal to the recognized
amount for the items and services.
(3) Not later than 30 calendar days
after the bill for the items or services is
transmitted by the provider (or in cases
where the recognized amount is
determined by a specified State law or
All-Payer Model Agreement, such other
timeframe as specified under the State
law or All-Payer Model Agreement),
must determine whether the items and
services are covered under the plan and,
if the items and services are covered,
send to the provider an initial payment
or a notice of denial of payment. For
purposes of this paragraph (c)(3), the 30calendar-day period begins on the date
the plan receives the information
necessary to decide a claim for payment
for the items or services.
(4) Must pay a total plan payment
directly to the nonparticipating provider
that is equal to the amount by which the
out-of-network rate for the items and
services involved exceeds the costsharing amount for the items and
services (as determined in accordance
with paragraphs (c)(1) and (2) of this
section), less any initial payment
amount made under paragraph (c)(3) of
this section. The total plan payment
must be made in accordance with the
timing requirement described in section
9816(c)(6) or in cases where the out-ofnetwork rate is determined under a
specified State law or All-Payer Model
Agreement, such other timeframe as
specified by the State law or All-Payer
Model Agreement.
(5) Must count any cost-sharing
payments made by the participant or
beneficiary toward any in-network
deductible and in-network out-of-pocket
maximums (including the annual
limitation on cost sharing under section
2707(b) of the Public Health Service
Act) (as applicable) applied under the
plan (and the in-network deductible and
out-of-pocket maximums must be
applied) in the same manner as if such

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cost-sharing payments were made with
respect to items and services furnished
by a participating provider.
(d) Applicability date. The provisions
of this section are applicable with
respect to plan years beginning on or
after January 1, 2022.
§ 54.9816–6T Methodology for calculating
qualifying payment amount (temporary).

(a) Definitions. For purposes of this
section, the following definitions apply:
(1) Contracted rate means the total
amount (including cost sharing) that a
group health plan has contractually
agreed to pay a participating provider,
facility, or provider of air ambulance
services for covered items and services,
whether directly or indirectly, including
through a third-party administrator or
pharmacy benefit manager. Solely for
purposes of this definition, a single case
agreement, letter of agreement, or other
similar arrangement between a provider,
facility, or air ambulance provider and
a plan, used to supplement the network
of the plan for a specific participant or
beneficiary in unique circumstances,
does not constitute a contract.
(2) Derived amount has the meaning
given the term in § 54.9815–2715A1.
(3) Eligible database means—
(i) A State all-payer claims database;
or
(ii) Any third-party database which—
(A) Is not affiliated with, or owned or
controlled by, any health insurance
issuer, or a health care provider, facility,
or provider of air ambulance services (or
any member of the same controlled
group as, or under common control
with, such an entity). For purposes of
this paragraph (a)(3)(ii)(A), the term
controlled group means a group of two
or more persons that is treated as a
single employer under sections 52(a),
52(b), 414(m), or 414(o) of the Internal
Revenue Code of 1986, as amended;
(B) Has sufficient information
reflecting in-network amounts paid by
group health plans or health insurance
issuers offering group or individual
health insurance coverage to providers,
facilities, or providers of air ambulance
services for relevant items and services
furnished in the applicable geographic
region; and
(C) Has the ability to distinguish
amounts paid to participating providers
and facilities by commercial payers,
such as group health plans and health
insurance issuers offering group or
individual health insurance coverage,
from all other claims data, such as
amounts billed by nonparticipating
providers or facilities and amounts paid
by public payers, including the
Medicare program under title XVIII of
the Social Security Act, the Medicaid

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36953

program under title XIX of the Social
Security Act (or a demonstration project
under title XI of the Social Security
Act), or the Children’s Health Insurance
Program under title XXI of the Social
Security Act.
(4) Facility of the same or similar
facility type means, with respect to
emergency services, either—
(i) An emergency department of a
hospital; or
(ii) An independent freestanding
emergency department.
(5) First coverage year means, with
respect to an item or service for which
coverage is not offered in 2019 under a
group health plan, the first year after
2019 for which coverage for such item
or service is offered under that plan.
(6) First sufficient information year
means, with respect to a group health
plan—
(i) In the case of an item or service for
which the plan does not have sufficient
information to calculate the median of
the contracted rates described in
paragraph (b) of this section in 2019, the
first year after 2022 for which the plan
has sufficient information to calculate
the median of such contracted rates in
the year immediately preceding that
first year after 2022; and
(ii) In the case of a newly covered
item or service, the first year after the
first coverage year for such item or
service with respect to such plan for
which the plan has sufficient
information to calculate the median of
the contracted rates described in
paragraph (b) of this section in the year
immediately preceding that first year.
(7) Geographic region means—
(i) For items and services other than
air ambulance services—
(A) Subject to paragraphs (a)(7)(i)(B)
and (C) of this section, one region for
each metropolitan statistical area, as
described by the U.S. Office of
Management and Budget and published
by the U.S. Census Bureau, in a State,
and one region consisting of all other
portions of the State.
(B) If a plan does not have sufficient
information to calculate the median of
the contracted rates described in
paragraph (b) of this section for an item
or service provided in a geographic
region described in paragraph
(a)(7)(i)(A) of this section, one region
consisting of all metropolitan statistical
areas, as described by the U.S. Office of
Management and Budget and published
by the U.S. Census Bureau, in the State,
and one region consisting of all other
portions of the State.
(C) If a plan does not have sufficient
information to calculate the median of
the contracted rates described in
paragraph (b) of this section for an item

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or service provided in a geographic
region described in paragraph
(a)(7)(i)(B) of this section, one region
consisting of all metropolitan statistical
areas, as described by the U.S. Office of
Management and Budget and published
by the U.S. Census Bureau, in each
Census division and one region
consisting of all other portions of the
Census division, as described by the
U.S. Census Bureau.
(ii) For air ambulance services—
(A) Subject to paragraph (a)(7)(ii)(B) of
this section, one region consisting of all
metropolitan statistical areas, as
described by the U.S. Office of
Management and Budget and published
by the U.S. Census Bureau, in the State,
and one region consisting of all other
portions of the State, determined based
on the point of pick-up (as defined in 42
CFR 414.605).
(B) If a plan does not have sufficient
information to calculate the median of
the contracted rates described in
paragraph (b) of this section for an air
ambulance service provided in a
geographic region described in
paragraph (a)(7)(ii)(A) of this section,
one region consisting of all metropolitan
statistical areas, as described by the U.S.
Office of Management and Budget and
published by the U.S. Census Bureau, in
each Census division and one region
consisting of all other portions of the
Census division, as described by the
U.S. Census Bureau, determined based
on the point of pick-up (as defined in 42
CFR 414.605).
(8) Insurance market is, irrespective
of the State, one of the following:
(i) The individual market (other than
short-term, limited-duration insurance
or individual health insurance coverage
that consists solely of excepted
benefits).
(ii) The large group market (other than
coverage that consists solely of excepted
benefits).
(iii) The small group market (other
than coverage that consists solely of
excepted benefits).
(iv) In the case of a self-insured group
health plan, all self-insured group
health plans (other than account-based
plans, as defined in § 54.9815–
2711(d)(6)(i), and plans that consist
solely of excepted benefits) of the same
plan sponsor, or at the option of the
plan sponsor, all self-insured group
health plans administered by the same
entity (including a third-party
administrator contracted by the plan), to
the extent otherwise permitted by law,
that is responsible for calculating the
qualifying payment amount on behalf of
the plan.
(9) Modifiers mean codes applied to
the service code that provide a more

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specific description of the furnished
item or service and that may adjust the
payment rate or affect the processing or
payment of the code billed.
(10) Newly covered item or service
means an item or service for which
coverage was not offered in 2019 under
a group health plan, but that is offered
under the plan in a year after 2019.
(11) New service code means a service
code that was created or substantially
revised in a year after 2019.
(12) Provider in the same or similar
specialty means the practice specialty of
a provider, as identified by the plan
consistent with the plan’s usual
business practice, except that, with
respect to air ambulance services, all
providers of air ambulance services are
considered to be a single provider
specialty.
(13) Same or similar item or service
means a health care item or service
billed under the same service code, or
a comparable code under a different
procedural code system.
(14) Service code means the code that
describes an item or service using the
Current Procedural Terminology (CPT)
code, Healthcare Common Procedure
Coding System (HCPCS), or DiagnosisRelated Group (DRG) codes.
(15) Sufficient information means, for
purposes of determining whether a
group health plan has sufficient
information to calculate the median of
the contracted rates described in
paragraph (b) of this section—
(i) The plan has at least three
contracted rates on January 31, 2019, to
calculate the median of the contracted
rates in accordance with paragraph (b)
of this section; or
(ii) For an item or service furnished
during a year after 2022 that is used to
determine the first sufficient
information year—
(A) The plan has at least three
contracted rates on January 31 of the
year immediately preceding that year to
calculate the median of the contracted
rates in accordance with paragraph (b)
of this section; and
(B) The contracted rates under
paragraph (a)(15)(ii)(A) of this section
account (or are reasonably expected to
account) for at least 25 percent of the
total number of claims paid for that item
or service for that year with respect to
all plans of the sponsor (or the
administering entity as provided in
paragraph (a)(8)(iv) of this section, if
applicable) that are offered in the same
insurance market.
(16) Qualifying payment amount
means, with respect to a sponsor of a
group health plan, the amount
calculated using the methodology

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described in paragraph (c) of this
section.
(17) Underlying fee schedule rate
means the rate for a covered item or
service from a particular participating
provider, providers, or facility that a
group health plan uses to determine a
participant’s or beneficiary’s costsharing liability for the item or service,
when that rate is different from the
contracted rate.
(b) Methodology for calculation of
median contracted rate—(1) In general.
The median contracted rate for an item
or service is calculated by arranging in
order from least to greatest the
contracted rates of all group health
plans of the plan sponsor (or the
administering entity as provided in
paragraph (a)(8)(iv) of this section, if
applicable) in the same insurance
market for the same or similar item or
service that is provided by a provider in
the same or similar specialty or facility
of the same or similar facility type and
provided in the geographic region in
which the item or service is furnished
and selecting the middle number. If
there are an even number of contracted
rates, the median contracted rate is the
average of the middle two contracted
rates. In determining the median
contracted rate, the amount negotiated
under each contract is treated as a
separate amount. If a plan or issuer has
a contract with a provider group or
facility, the rate negotiated with that
provider group or facility under the
contract is treated as a single contracted
rate if the same amount applies with
respect to all providers of such provider
group or facility under the single
contract. However, if a plan or issuer
has a contract with multiple providers,
with separate negotiated rates with each
particular provider, each unique
contracted rate with an individual
provider constitutes a single contracted
rate. Further, if a plan or issuer has
separate contracts with individual
providers, the contracted rate under
each such contract constitutes a single
contracted rate (even if the same amount
is paid to multiple providers under
separate contracts).
(2) Calculation rules. In calculating
the median contracted rate, a plan must:
(i) Calculate the median contracted
rate with respect to all plans of such
sponsor (or the administering entity as
provided in paragraph (a)(8)(iv) of this
section, if applicable) that are offered in
the same insurance market;
(ii) Calculate the median contracted
rate using the full contracted rate
applicable to the service code, except
that the plan must—
(A) Calculate separate median
contracted rates for CPT code modifiers

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‘‘26’’ (professional component) and
‘‘TC’’ (technical component);
(B) For anesthesia services, calculate
a median contracted rate for the
anesthesia conversion factor for each
service code;
(C) For air ambulance services,
calculate a median contracted rate for
the air mileage service codes (A0435
and A0436); and
(D) Where contracted rates otherwise
vary based on applying a modifier code,
calculate a separate median contracted
rate for each such service code-modifier
combination;
(iii) In the case of payments made by
a plan that are not on a fee-for-service
basis (such as bundled or capitation
payments), calculate a median
contracted rate for each item or service
using the underlying fee schedule rates
for the relevant items or services. If the
plan does not have an underlying fee
schedule rate for the item or service, it
must use the derived amount to
calculate the median contracted rate;
and
(iv) Exclude risk sharing, bonus,
penalty, or other incentive-based or
retrospective payments or payment
adjustments.
(3) Provider specialties; facility types.
(i) If a plan has contracted rates that
vary based on provider specialty for a
service code, the median contracted rate
is calculated separately for each
provider specialty, as applicable.
(ii) If a plan has contracted rates for
emergency services that vary based on
facility type for a service code, the
median contracted rate is calculated
separately for each facility of the same
or similar facility type.
(c) Methodology for calculation of the
qualifying payment amount—(1) In
general. (i) For an item or service (other
than items or services described in
paragraphs (c)(1)(iii) through (vii) of this
section) furnished during 2022, the plan
must calculate the qualifying payment
amount by increasing the median
contracted rate (as determined in
accordance with paragraph (b) of this
section) for the same or similar item or
service under such plans, on January 31,
2019, by the combined percentage
increase as published by the Department
of the Treasury and the Internal
Revenue Service to reflect the
percentage increase in the CPI–U over
2019, such percentage increase over
2020, and such percentage increase over
2021.
(A) The combined percentage increase
for 2019, 2020, and 2021 will be
published in guidance by the Internal
Revenue Service. The Department of the
Treasury and the Internal Revenue
Service will calculate the percentage

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increase using the CPI–U published by
the Bureau of Labor Statistics of the
Department of Labor.
(B) For purposes of this paragraph
(c)(1)(i), the CPI–U for each calendar
year is the average of the CPI–U as of the
close of the 12-month period ending on
August 31 of the calendar year, rounded
to 10 decimal places.
(C) The combined percentage increase
for 2019, 2020, and 2021 will be
calculated as:
(CPI–U 2019/CPI–U 2018) × (CPI–U
2020/CPI–U 2019) × (CPI–U 2021/
CPI–U 2020)
(ii) For an item or service (other than
items or services described in
paragraphs (c)(1)(iii) through (vii) of this
section) furnished during 2023 or a
subsequent year, the plan must calculate
the qualifying payment amount by
increasing the qualifying payment
amount determined under paragraph
(c)(1)(i) of this section, for such an item
or service furnished in the immediately
preceding year, by the percentage
increase as published by the Department
of the Treasury and the Internal
Revenue Service.
(A) The percentage increase for any
year after 2022 will be published in
guidance by the Internal Revenue
Service. The Department of the Treasury
and Internal Revenue Service will
calculate the percentage increase using
the CPI–U published by the Bureau of
Labor Statistics of the Department of
Labor.
(B) For purposes of this paragraph
(c)(1)(ii), the CPI–U for each calendar
year is the average of the CPI–U as of the
close of the 12-month period ending on
August 31 of the calendar year, rounded
to 10 decimal places.
(C) The combined percentage increase
for any year will be calculated as CPI–
U present year/CPI–U prior year.
(iii) For anesthesia services furnished
during 2022, the plan must calculate the
qualifying payment amount by first
increasing the median contracted rate
for the anesthesia conversion factor (as
determined in accordance with
paragraph (b) of this section) for the
same or similar item or service under
such plans, on January 31, 2019, in
accordance with paragraph (c)(1)(i) of
this section (referred to in this section
as the indexed median contracted rate
for the anesthesia conversion factor).
The plan must then multiply the
indexed median contracted rate for the
anesthesia conversion factor by the sum
of the base unit, time unit, and physical
status modifier units of the participant
or beneficiary to whom anesthesia
services are furnished to determine the
qualifying payment amount.

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(A) The base units for an anesthesia
service code are the base units for that
service code specified in the most recent
edition (as of the date of service) of the
American Society of Anesthesiologists
Relative Value Guide.
(B) The time unit is measured in 15minute increments or a fraction thereof.
(C) The physical status modifier on a
claim is a standard modifier describing
the physical status of the patient and is
used to distinguish between various
levels of complexity of the anesthesia
services provided, and is expressed as a
unit with a value between zero (0) and
three (3).
(D) The anesthesia conversion factor
is expressed in dollars per unit and is
a contracted rate negotiated with the
plan.
(iv) For anesthesia services furnished
during 2023 or a subsequent year, the
plan must calculate the qualifying
payment amount by first increasing the
indexed median contracted rate for the
anesthesia conversion factor,
determined under paragraph (c)(1)(iii) of
this section for such services furnished
in the immediately preceding year, in
accordance with paragraph (c)(1)(ii) of
this section. The plan must then
multiply that amount by the sum of the
base unit, time unit, and physical status
modifier units for the participant or
beneficiary to whom anesthesia services
are furnished to determine the
qualifying payment amount.
(v) For air ambulance services billed
using the air mileage service codes
(A0435 and A0436) that are furnished
during 2022, the plan must calculate the
qualifying payment amount for services
billed using the air mileage service
codes by first increasing the median
contracted rate (as determined in
accordance with paragraph (b) of this
section), in accordance with paragraph
(c)(1)(i) of this section (referred to in
this section as the indexed median air
mileage rate). The plan must then
multiply the indexed median air
mileage rate by the number of loaded
miles provided to the participant or
beneficiary to determine the qualifying
payment amount.
(A) The air mileage rate is expressed
in dollars per loaded mile flown, is
expressed in statute miles (not nautical
miles), and is a contracted rate
negotiated with the plan.
(B) The number of loaded miles is the
number of miles a patient is transported
in the air ambulance vehicle.
(C) The qualifying payment amount
for other service codes associated with
air ambulance services is calculated in
accordance with paragraphs (c)(1)(i) and
(ii) of this section.

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(vi) For air ambulance services billed
using the air mileage service codes
(A0435 and A0436) that are furnished
during 2023 or a subsequent year, the
plan must calculate the qualifying
payment amount by first increasing the
indexed median air mileage rate,
determined under paragraph (c)(1)(v) of
this section for such services furnished
in the immediately preceding year, in
accordance with paragraph (c)(1)(ii) of
this section. The plan must then
multiply the indexed median air
mileage rate by the number of loaded
miles provided to the participant or
beneficiary to determine the qualifying
payment amount.
(vii) For any other items or services
for which a plan generally determines
payment for the same or similar items
or services by multiplying a contracted
rate by another unit value, the plan
must calculate the qualifying payment
amount using a methodology that is
similar to the methodology required
under paragraphs (c)(1)(iii) through (vi)
of this section and reasonably reflects
the payment methodology for same or
similar items or services.
(2) New plans. With respect to a
sponsor of a group health plan in a
geographic region in which the sponsor
did not offer any group health plan
during 2019—
(i) For the first year in which the
group health plan is offered in such
region—
(A) If the plan has sufficient
information to calculate the median of
the contracted rates described in
paragraph (b) of this section, the plan
must calculate the qualifying payment
amount in accordance with paragraph
(c)(1) of this section for items and
services that are covered by the plan
and furnished during the first year; and
(B) If the plan does not have sufficient
information to calculate the median of
the contracted rates described in
paragraph (b) of this section for an item
or service provided in a geographic
region, the plan must determine the
qualifying payment amount for the item
or service in accordance with paragraph
(c)(3)(i) of this section.
(ii) For each subsequent year the
group health plan is offered in the
region, the plan must calculate the
qualifying payment amount by
increasing the qualifying payment
amount determined under this
paragraph (c)(2) for the items and
services furnished in the immediately
preceding year, in accordance with
paragraph (c)(1)(ii), (iv), or (vi) of this
section, as applicable.
(3) Insufficient information; newly
covered items and services. In the case
of a plan that does not have sufficient

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information to calculate the median of
the contracted rates described in
paragraph (b) of this section in 2019 (or,
in the case of a newly covered item or
service, in the first coverage year for
such item or service with respect to
such plan or coverage if the plan does
not have sufficient information) for an
item or service provided in a geographic
region—
(i) For an item or service furnished
during 2022 (or, in the case of a newly
covered item or service, during the first
coverage year for the item or service
with respect to the plan or coverage),
the plan must calculate the qualifying
payment amount by first identifying the
rate that is equal to the median of the
in-network allowed amounts for the
same or similar item or service provided
in the geographic region in the year
immediately preceding the year in
which the item or service is furnished
(or, in the case of a newly covered item
or service, the year immediately
preceding such first coverage year)
determined by the plan through use of
any eligible database, and then
increasing that rate by the percentage
increase in the CPI–U over such
preceding year. For purposes of this
section, in cases in which an eligible
database is used to determine the
qualifying payment amount with respect
to an item or service furnished during
a calendar year, the plan must use the
same database for determining the
qualifying payment amount for that item
or service furnished through the last day
of the calendar year, and if a different
database is selected for some items or
services, the basis for that selection
must be one or more factors not directly
related to the rate of those items or
services (such as sufficiency of data for
those items or services).
(ii) For an item or service furnished in
a subsequent year (before the first
sufficient information year for such item
or service with respect to such plan), the
plan must calculate the qualifying
payment amount by increasing the
qualifying payment amount determined
under paragraph (c)(3)(i) of this section
or this paragraph (c)(3)(ii), as applicable,
for such item or service for the year
immediately preceding such subsequent
year, by the percentage increase in CPI–
U over such preceding year;
(iii) For an item or service furnished
in the first sufficient information year
for such item or service with respect to
such plan, the plan must calculate the
qualifying payment amount in
accordance with paragraph (c)(1)(i), (iii),
or (v) of this section, as applicable,
except that in applying such paragraph
to such item or service, the reference to
‘furnished during 2022’ is treated as a

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reference to furnished during such first
sufficient information year, the
reference to ‘in 2019’ is treated as a
reference to such sufficient information
year, and the increase described in such
paragraph is not applied; and
(iv) For an item or service furnished
in any year subsequent to the first
sufficient information year for such item
or service with respect to such plan, the
plan must calculate the qualifying
payment amount in accordance with
paragraph (c)(1)(ii), (iv), or (vi) of this
section, as applicable, except that in
applying such paragraph to such item or
service, the reference to ‘furnished
during 2023 or a subsequent year’ is
treated as a reference to furnished
during the year after such first sufficient
information year or a subsequent year.
(4) New service codes. In the case of
a plan that does not have sufficient
information to calculate the median of
the contracted rates described in
paragraph (b) of this section and
determine the qualifying payment
amount under paragraphs (c)(1) through
(3) of this section because the item or
service furnished is billed under a new
service code—
(i) For an item or service furnished
during 2022 (or, in the case of a newly
covered item or service, during the first
coverage year for the item or service
with respect to the plan), the plan must
identify a reasonably related service
code that existed in the immediately
preceding year and—
(A) If the Centers for Medicare &
Medicaid Services has established a
Medicare payment rate for the item or
service billed under the new service
code, the plan must calculate the
qualifying payment amount by first
calculating the ratio of the rate that
Medicare pays for the item or service
billed under the new service code
compared to the rate that Medicare pays
for the item or service billed under the
related service code, and then
multiplying the ratio by the qualifying
payment amount for an item or service
billed under the related service code for
the year in which the item or service is
furnished.
(B) If the Centers for Medicare &
Medicaid Services has not established a
Medicare payment rate for the item or
service billed under the new service
code, the plan must calculate the
qualifying payment amount by first
calculating the ratio of the rate that the
plan reimburses for the item or service
billed under the new service code
compared to the rate that the plan
reimburses for the item or service billed
under the related service code, and then
multiplying the ratio by the qualifying

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payment amount for an item or service
billed under the related service code.
(ii) For an item or service furnished in
a subsequent year (before the first
sufficient information year for such item
or service with respect to such plan or
coverage or before the first year for
which an eligible database has sufficient
information to a calculate a rate under
paragraph (c)(3)(i) of this section in the
immediately preceding year), the plan
must calculate the qualifying payment
amount by increasing the qualifying
payment amount determined under
paragraph (c)(4)(i) of this section or this
paragraph (c)(4)(ii), as applicable, for
such item or service for the year
immediately preceding such subsequent
year, by the percentage increase in
CPI–U over such preceding year;
(iii) For an item or service furnished
in the first sufficient information year
for such item or service with respect to
such plan or the first year for which an
eligible database has sufficient
information to calculate a rate under
paragraph (c)(3)(i) of this section in the
immediately preceding year, the plan or
issuer must calculate the qualifying
payment amount in accordance with
paragraph (c)(3) of this section.
(d) Information to be shared about
qualifying payment amount. In cases in
which the recognized amount with
respect to an item or service furnished
by a nonparticipating provider,
nonparticipating emergency facility, or
nonparticipating provider of air
ambulance services is the qualifying
payment amount, the plan must provide
in writing, in paper or electronic form,
to the provider or facility, as
applicable—
(1) With an initial payment or notice
of denial of payment under § 54.9816–
4T, § 54.9816–5T, or § 54.9817–1T:
(i) The qualifying payment amount for
each item or service involved;
(ii) A statement to certify that, based
on the determination of the plan—
(A) The qualifying payment amount
applies for purposes of the recognized
amount (or, in the case of air ambulance
services, for calculating the
participant’s, beneficiary’s, or enrollee’s
cost sharing); and
(B) Each qualifying payment amount
shared with the provider or facility was
determined in compliance with this
section;
(iii) A statement that if the provider
or facility, as applicable, wishes to
initiate a 30-day open negotiation
period for purposes of determining the
amount of total payment, the provider
or facility may contact the appropriate
person or office to initiate open
negotiation, and that if the 30-day
negotiation period does not result in a

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determination, generally, the provider
or facility may initiate the independent
dispute resolution process within 4 days
after the end of the open negotiation
period; and
(iv) Contact information, including a
telephone number and email address,
for the appropriate person or office to
initiate open negotiations for purposes
of determining an amount of payment
(including cost sharing) for such item or
service.
(2) In a timely manner upon request
of the provider or facility:
(i) Information about whether the
qualifying payment amount for items
and services involved included
contracted rates that were not on a feefor-service basis for those specific items
and services and whether the qualifying
payment amount for those items and
services was determined using
underlying fee schedule rates or a
derived amount;
(ii) If a plan uses an eligible database
under paragraph (c)(3) of this section to
determine the qualifying payment
amount, information to identify which
database was used; and
(iii) If a related service code was used
to determine the qualifying payment
amount for an item or service billed
under a new service code under
paragraph (c)(4)(i) or (ii) of this section,
information to identify the related
service code; and
(iv) If applicable, a statement that the
plan’s contracted rates include risksharing, bonus, penalty, or other
incentive-based or retrospective
payments or payment adjustments for
the items and services involved (as
applicable) that were excluded for
purposes of calculating the qualifying
payment amount.
(e) Certain access fees to databases. In
the case of a plan that, pursuant to this
section, uses an eligible database to
determine the qualifying payment
amount for an item or service, the plan
is responsible for any costs associated
with accessing such database.
(f) Audits. See 45 CFR 149.140(f) for
audit procedures that apply with respect
to ensuring that a plan is in compliance
with the requirement of applying a
qualifying payment amount under
§§ 54.9816–4T, 54.9816–5T, 54.9817–
1T, and this section, and ensuring that
such amount so applied satisfies the
requirements under this section, as
applicable.
(g) Applicability date. The provisions
of this section are applicable with
respect to plan years beginning on or
after January 1, 2022.

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§ 54.9816–7T Complaints process for
surprise medical bills regarding group
health plans (temporary).

See 45 CFR 149.150 for the process to
receive and resolve complaints that a
specific group health plan may be
failing to meet the requirement of
applying a qualifying payment amount
under §§ 54.9816–4T, 54.9816–5T,
54.9816–6T, and 54.9817–1T, which
may warrant an investigation.
§ 54.9817–1T Preventing surprise medical
bills for air ambulance services (temporary).

(a) In general. If a group health plan
provides or covers any benefits for air
ambulance services, the plan must cover
such services from a nonparticipating
provider of air ambulance services in
accordance with paragraph (b) of this
section.
(b) Coverage requirements. A plan
described in paragraph (a) of this
section must provide coverage of air
ambulance services in the following
manner—
(1) The cost-sharing requirements
with respect to the services must be the
same requirements that would apply if
the services were provided by a
participating provider of air ambulance
services.
(2) The cost-sharing requirement must
be calculated as if the total amount that
would have been charged for the
services by a participating provider of
air ambulance services were equal to the
lesser of the qualifying payment amount
(as determined in accordance with
§ 54.9816–6T) or the billed amount for
the services.
(3) The cost-sharing amounts must be
counted towards any in-network
deductible and in-network out-of-pocket
maximums (including the annual
limitation on cost sharing under section
2707(b) of the Public Health Service
Act) (as applicable) applied under the
plan (and the in-network deductible and
out-of-pocket maximums must be
applied) in the same manner as if the
cost-sharing payments were made with
respect to services furnished by a
participating provider of air ambulance
services.
(4) The plan must—
(i) Not later than 30 calendar days
after the bill for the services is
transmitted by the provider of air
ambulance services, determine whether
the services are covered under the plan
and, if the services are covered, send to
the provider an initial payment or a
notice of denial of payment. For
purposes of this paragraph (b)(4)(i), the
30-calendar-day period begins on the
date the plan receives the information
necessary to decide a claim for payment
for the services.

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(ii) Pay a total plan payment directly
to the nonparticipating provider
furnishing such air ambulance services
that is equal to the amount by which the
out-of-network rate for the services
exceeds the cost-sharing amount for the
services (as determined in accordance
with paragraphs (b)(1) and (2) of this
section), less any initial payment
amount made under paragraph (b)(4)(i)
of this section. The total plan payment
must be made in accordance with the
timing requirement described in section
9817(b)(6), or in cases where the out-ofnetwork rate is determined under a
specified State law or All-Payer Model
Agreement, such other timeframe as
specified by the State law or All-Payer
Model Agreement.
(c) Applicability date. The provisions
of this section are applicable with
respect to plan years beginning on or
after January 1, 2022.

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§ 54.9822–1T Choice of health care
professional (temporary).

(a) Choice of health care
professional—(1) Designation of
primary care provider—(i) In general. If
a group health plan, requires or
provides for designation by a participant
or beneficiary of a participating primary
care provider, then the plan must permit
each participant or beneficiary to
designate any participating primary care
provider who is available to accept the
participant or beneficiary. In such a
case, the plan must comply with the
rules of paragraph (a)(4) of this section
by informing each participant of the
terms of the plan regarding designation
of a primary care provider.
(ii) Construction. Nothing in
paragraph (a)(1)(i) of this section is to be
construed to prohibit the application of
reasonable and appropriate geographic
limitations with respect to the selection
of primary care providers, in accordance
with the terms of the plan, the
underlying provider contracts, and
applicable State law.
(iii) Example. The rules of this
paragraph (a)(1) are illustrated by the
following example:
(A) Facts. A group health plan
requires individuals covered under the
plan to designate a primary care
provider. The plan permits each
individual to designate any primary care
provider participating in the plan’s
network who is available to accept the
individual as the individual’s primary
care provider. If an individual has not
designated a primary care provider, the
plan designates one until the individual
has made a designation. The plan
provides a notice that satisfies the
requirements of paragraph (a)(4) of this

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section regarding the ability to designate
a primary care provider.
(B) Conclusion. In this Example, the
plan has satisfied the requirements of
this paragraph (a).
(2) Designation of pediatrician as
primary care provider—(i) In general. If
a group health plan requires or provides
for the designation of a participating
primary care provider for a child by a
participant or beneficiary, the plan must
permit the participant or beneficiary to
designate a physician (allopathic or
osteopathic) who specializes in
pediatrics (including pediatric
subspecialties, based on the scope of
that provider’s license under applicable
State law) as the child’s primary care
provider if the provider participates in
the network of the plan and is available
to accept the child. In such a case, the
plan must comply with the rules of
paragraph (a)(4) of this section by
informing each participant of the terms
of the plan regarding designation of a
pediatrician as the child’s primary care
provider.
(ii) Construction. Nothing in
paragraph (a)(2)(i) of this section is to be
construed to waive any exclusions of
coverage under the terms and
conditions of the plan with respect to
coverage of pediatric care.
(iii) Examples. The rules of this
paragraph (a)(2) are illustrated by the
following examples:
(A) Example 1—(1) Facts. A group
health plan’s HMO designates for each
participant a physician who specializes
in internal medicine to serve as the
primary care provider for the participant
and any beneficiaries. Participant A
requests that Pediatrician B be
designated as the primary care provider
for A’s child. B is a participating
provider in the HMO’s network and is
available to accept the child.
(2) Conclusion. In this Example 1, the
HMO must permit A’s designation of B
as the primary care provider for A’s
child in order to comply with the
requirements of this paragraph (a)(2).
(B) Example 2—(1) Facts. Same facts
as Example 1 (paragraph (a)(2)(iii)(A) of
this section), except that A takes A’s
child to B for treatment of the child’s
severe shellfish allergies. B wishes to
refer A’s child to an allergist for
treatment. The HMO, however, does not
provide coverage for treatment of food
allergies, nor does it have an allergist
participating in its network, and it
therefore refuses to authorize the
referral.
(2) Conclusion. In this Example 2, the
HMO has not violated the requirements
of this paragraph (a)(2) because the
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is in accordance with the terms of A’s
coverage.
(3) Patient access to obstetrical and
gynecological care—(i) General rights—
(A) Direct access. A group health plan
described in paragraph (a)(3)(ii) of this
section, may not require authorization
or referral by the plan, or any person
(including a primary care provider) in
the case of a female participant or
beneficiary who seeks coverage for
obstetrical or gynecological care
provided by a participating health care
professional who specializes in
obstetrics or gynecology. In such a case,
the plan must comply with the rules of
paragraph (a)(4) of this section by
informing each participant that the plan
may not require authorization or referral
for obstetrical or gynecological care by
a participating health care professional
who specializes in obstetrics or
gynecology. The plan may require such
a professional to agree to otherwise
adhere to the plan’s policies and
procedures, including procedures
regarding referrals and obtaining prior
authorization and providing services
pursuant to a treatment plan (if any)
approved by the plan. For purposes of
this paragraph (a)(3), a health care
professional who specializes in
obstetrics or gynecology is any
individual (including a person other
than a physician) who is authorized
under applicable State law to provide
obstetrical or gynecological care.
(B) Obstetrical and gynecological
care. A group health plan described in
paragraph (a)(3)(ii) of this section must
treat the provision of obstetrical and
gynecological care, and the ordering of
related obstetrical and gynecological
items and services, pursuant to the
direct access described under paragraph
(a)(3)(i)(A) of this section, by a
participating health care professional
who specializes in obstetrics or
gynecology as the authorization of the
primary care provider.
(ii) Application of paragraph. A group
health plan is described in this
paragraph (a)(3) if the plan—
(A) Provides coverage for obstetrical
or gynecological care; and
(B) Requires the designation by a
participant or beneficiary of a
participating primary care provider.
(iii) Construction. Nothing in
paragraph (a)(3)(i) of this section is to be
construed to—
(A) Waive any exclusions of coverage
under the terms and conditions of the
plan with respect to coverage of
obstetrical or gynecological care; or
(B) Preclude the group health plan
involved from requiring that the
obstetrical or gynecological provider
notify the primary care health care

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professional or the plan of treatment
decisions.
(iv) Examples. The rules of this
paragraph (a)(3) are illustrated by the
following examples:
(A) Example 1—(1) Facts. A group
health plan requires each participant to
designate a physician to serve as the
primary care provider for the participant
and the participant’s family. Participant
A, a female, requests a gynecological
exam with Physician B, an in-network
physician specializing in gynecological
care. The group health plan requires
prior authorization from A’s designated
primary care provider for the
gynecological exam.
(2) Conclusion. In this Example 1, the
group health plan has violated the
requirements of this paragraph (a)(3)
because the plan requires prior
authorization from A’s primary care
provider prior to obtaining
gynecological services.
(B) Example 2—(1) Facts. Same facts
as Example 1 (paragraph (a)(3)(iv)(A) of
this section) except that A seeks
gynecological services from C, an out-ofnetwork provider.
(2) Conclusion. In this Example 2, the
group health plan has not violated the
requirements of this paragraph (a)(3) by
requiring prior authorization because C
is not a participating health care
provider.
(C) Example 3—(1) Facts. Same facts
as Example 1 (paragraph (a)(3)(iv)(A) of
this section) except that the group
health plan only requires B to inform
A’s designated primary care physician
of treatment decisions.
(2) Conclusion. In this Example 3, the
group health plan has not violated the
requirements of this paragraph (a)(3)
because A has direct access to B without
prior authorization. The fact that the
group health plan requires the
designated primary care physician to be
notified of treatment decisions does not
violate this paragraph (a)(3).
(D) Example 4—(1) Facts. A group
health plan requires each participant to
designate a physician to serve as the
primary care provider for the participant
and the participant’s family. The group
health plan requires prior authorization
before providing benefits for uterine
fibroid embolization.
(2) Conclusion. In this Example 4, the
plan requirement for prior authorization
before providing benefits for uterine
fibroid embolization does not violate the
requirements of this paragraph (a)(3)
because, though the prior authorization
requirement applies to obstetrical
services, it does not restrict access to
any providers specializing in obstetrics
or gynecology.

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(4) Notice of right to designate a
primary care provider—(i) In general. If
a group health plan requires the
designation by a participant or
beneficiary of a primary care provider,
the plan must provide a notice
informing each participant of the terms
of the plan regarding designation of a
primary care provider and of the
rights—
(A) Under paragraph (a)(1)(i) of this
section, that any participating primary
care provider who is available to accept
the participant or beneficiary can be
designated;
(B) Under paragraph (a)(2)(i) of this
section, with respect to a child, that any
participating physician who specializes
in pediatrics can be designated as the
primary care provider; and
(C) Under paragraph (a)(3)(i) of this
section, that the plan may not require
authorization or referral for obstetrical
or gynecological care by a participating
health care professional who specializes
in obstetrics or gynecology.
(ii) Timing. In the case of a group
health plan, the notice described in
paragraph (a)(4)(i) of this section must
be included whenever the plan provides
a participant with a summary plan
description or other similar description
of benefits under the plan.
(iii) Model language. The following
model language can be used to satisfy
the notice requirement described in
paragraph (a)(4)(i) of this section:
(A) For plans that require or allow for
the designation of primary care
providers by participants or
beneficiaries, insert:
[Name of group health plan] generally
[requires/allows] the designation of a primary
care provider. You have the right to designate
any primary care provider who participates
in our network and who is available to accept
you or your family members. [If the plan
designates a primary care provider
automatically, insert: Until you make this
designation, [name of group health plan]
designates one for you.] For information on
how to select a primary care provider, and for
a list of the participating primary care
providers, contact the [plan administrator] at
[insert contact information].

(B) For plans that require or allow for
the designation of a primary care
provider for a child, add:
For children, you may designate a
pediatrician as the primary care
provider.
(C) For plans that provide coverage for
obstetric or gynecological care and
require the designation by a participant
or beneficiary of a primary care
provider, add:
You do not need prior authorization from
[name of group health plan] or from any
other person (including a primary care

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provider) in order to obtain access to
obstetrical or gynecological care from a
health care professional in our network who
specializes in obstetrics or gynecology. The
health care professional, however, may be
required to comply with certain procedures,
including obtaining prior authorization for
certain services, following a pre-approved
treatment plan, or procedures for making
referrals. For a list of participating health
care professionals who specialize in
obstetrics or gynecology, contact the [plan
administrator] at [insert contact information].

(b) Applicability date. The provisions
of this section are applicable with
respect to plan years beginning on or
after January 1, 2022.
Department of Labor
Employee Benefits Security
Administration
29 CFR Chapter XXV
For the reasons set forth in the
preamble, the Department of Labor
amends 29 CFR part 2590 as set forth
below:
PART 2590—RULES AND
REGULATIONS FOR GROUP HEALTH
PLANS.
9. The authority citation for part 2590
is revised to read as follows:

■

Authority: 29 U.S.C. 1027, 1059, 1135,
1161–1168, 1169, 1181–1183, 1181 note,
1185, 1185a–n, 1191, 1191a, 1191b, and
1191c; sec. 101(g), Pub. L.104–191, 110 Stat.
1936; sec. 401(b), Pub. L. 105–200, 112 Stat.
645 (42 U.S.C. 651 note); sec. 512(d), Pub. L.
110–343, 122 Stat. 3881; sec. 1001, 1201, and
1562(e), Pub. L. 111–148, 124 Stat. 119, as
amended by Pub. L. 111–152, 124 Stat. 1029;
Division M, Pub. L. 113–235, 128 Stat. 2130;
Pub. L. 116–260 134 Stat. 1182; Secretary of
Labor’s Order 1–2011, 77 FR 1088 (Jan. 9,
2012).

10. Section 2590.715–2719A is
amended by revising paragraph (c) to
read as follows:

■

§ 2590.715–2719A

Patient protections.

*

*
*
*
*
(c) Applicability date. The provisions
of this section are applicable to group
health plans and health insurance
issuers for plan years beginning before
January 1, 2022. See also §§ 2590.716–
4 through 2590.716–7, 2590.717–1, and
2590.722 of this part for rules applicable
with respect to plan years beginning on
or after January 1, 2022.
Subpart D [Redesignated as Subpart E]
11. Redesignate subpart D as subpart
E and add a new subpart D to read as
follows:

■

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Subpart D—Surprise Billing and
Transparency Requirements
Sec.
2590.716–1 Basis and scope.
2590.716–2 Applicability.
2590.716–3 Definitions.
2590.716–4 Preventing surprise medical
bills for emergency services.
2590.716–5 Preventing surprise medical
bills for non-emergency services
performed by nonparticipating providers
at certain participating facilities.
2590.716–6 Methodology for calculating
qualifying payment amount.
2590.716–7 Complaints process for surprise
medical bills regarding group health
plans and group health insurance
coverage.
2590.717–1 Preventing surprise medical
bills for air ambulance services.
2590.722 Choice of health care professional.

Subpart D—Surprise Billing and
Transparency Requirements
§ 2590.716–1

Basis and scope.

(a) Basis. Sections 2590.716–1
through 2590.722 implement section
716–722 of ERISA.
(b) Scope. This part establishes
standards for group health plans and
health insurance issuers offering group
health insurance coverage with respect
to surprise medical bills, transparency
in health care coverage, and additional
patient protections.
§ 2590.716–2

Applicability.

(a) In general. The requirements in
§§ 2590.716–4 through 2590.716–7,
2590.717–1, and 2590.722 apply to
group health plans and health insurance
issuers offering group health insurance
coverage (including grandfathered
health plans as defined in § 2590.715–
1251), except as specified in paragraph
(b) of this section.
(b) Exceptions. The requirements in
§§ 2590.716–4 through 2590.716–7,
2590.717–1, and 2590.722 do not apply
to the following:
(1) Excepted benefits as described in
§ 2590.732.
(2) Short-term, limited-duration
insurance as defined in § 2590.701–2.
(3) Health reimbursement
arrangements or other account-based
group health plans as described in
§ 2590.715–2711(d).

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§ 2590.716–3

Definitions.

The definitions in this part apply to
§§ 2590.716 through 2590.722, unless
otherwise specified. In addition, for
purposes of §§ 2590.716 through
2590.722, the following definitions
apply:
Air ambulance service means medical
transport by a rotary wing air
ambulance, as defined in 42 CFR

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414.605, or fixed wing air ambulance, as
defined in 42 CFR 414.605, for patients.
Cost sharing means the amount a
participant or beneficiary is responsible
for paying for a covered item or service
under the terms of the group health plan
or health insurance coverage. Cost
sharing generally includes copayments,
coinsurance, and amounts paid towards
deductibles, but does not include
amounts paid towards premiums,
balance billing by out-of-network
providers, or the cost of items or
services that are not covered under a
group health plan or health insurance
coverage.
Emergency department of a hospital
includes a hospital outpatient
department that provides emergency
services.
Emergency medical condition has the
meaning given the term in § 2590.716–
4(c)(1).
Emergency services has the meaning
given the term in § 2590.716–4(c)(2).
Health care facility, with respect to a
group health plan or group health
insurance coverage, in the context of
non-emergency services, is each of the
following:
(1) A hospital (as defined in section
1861(e) of the Social Security Act);
(2) A hospital outpatient department;
(3) A critical access hospital (as
defined in section 1861(mm)(1) of the
Social Security Act); and
(4) An ambulatory surgical center
described in section 1833(i)(1)(A) of the
Social Security Act.
Independent freestanding emergency
department means a health care facility
(not limited to those described in the
definition of health care facility with
respect to non-emergency services)
that—
(1) Is geographically separate and
distinct and licensed separately from a
hospital under applicable State law; and
(2) Provides any emergency services
as described in § 2590.716–4(c)(2)(i).
Nonparticipating emergency facility
means an emergency department of a
hospital, or an independent freestanding
emergency department (or a hospital,
with respect to services that pursuant to
§ 2590.716–4(c)(2)(ii) are included as
emergency services), that does not have
a contractual relationship directly or
indirectly with a group health plan or
group health insurance coverage offered
by a health insurance issuer, with
respect to the furnishing of an item or
service under the plan or coverage,
respectively.
Nonparticipating provider means any
physician or other health care provider
who does not have a contractual
relationship directly or indirectly with a
group health plan or group health

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insurance coverage offered by a health
insurance issuer, with respect to the
furnishing of an item or service under
the plan or coverage, respectively.
Notice of denial of payment means,
with respect to an item or service for
which benefits subject to the protections
of §§ 2590.716–4, 2590.716–5, and
2590.717–1 are provided or covered, a
written notice from the plan or issuer to
the health care provider, facility, or
provider of air ambulance services, as
applicable, that payment for such item
or service will not be made by the plan
or coverage and which explains the
reason for denial. The term notice of
denial of payment does not include a
notice of benefit denial due to an
adverse benefit determination as
defined in § 2560.503–1 of this chapter.
Out-of-network rate means, with
respect to an item or service furnished
by a nonparticipating provider,
nonparticipating emergency facility, or
nonparticipating provider of air
ambulance services—
(1) Subject to paragraph (3) of this
definition, in a State that has in effect
a specified State law, the amount
determined in accordance with such
law;
(2) Subject to paragraph (3) of this
definition, in a State that does not have
in effect a specified State law—
(i) Subject to paragraph (2)(ii) of this
definition, if the nonparticipating
provider or nonparticipating emergency
facility and the plan or issuer agree on
an amount of payment (including if the
amount agreed upon is the initial
payment sent by the plan or issuer
under 26 CFR 54.9816–4T(b)(3)(iv)(A),
54.9816–5T(c)(3), or 54.9817–1T(b)(4)(i);
§ 2590.716–4(b)(3)(iv)(A), § 2590.716–
5(c)(3), or § 2590.717–1(b)(4)(i); or 45
CFR 149.110(b)(3)(iv)(A), 149.120(c)(3),
or 149.130(b)(4)(i), as applicable, or is
agreed on through negotiations with
respect to such item or service), such
agreed on amount; or
(ii) If the nonparticipating provider or
nonparticipating emergency facility and
the plan or issuer enter into the
independent dispute resolution (IDR)
process under section 9816(c) or 9817(b)
of the Internal Revenue Code, section
716(c) or 717(b) of ERISA, or section
2799A–1(c) or 2799A–2(b) of the PHS
Act, as applicable, and do not agree
before the date on which a certified IDR
entity makes a determination with
respect to such item or service under
such subsection, the amount of such
determination; or
(3) In a State that has an All-Payer
Model Agreement under section 1115A
of the Social Security Act that applies
with respect to the plan or issuer; the
nonparticipating provider or

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nonparticipating emergency facility; and
the item or service, the amount that the
State approves under the All-Payer
Model Agreement for the item or
service.
Participating emergency facility
means any emergency department of a
hospital, or an independent freestanding
emergency department (or a hospital,
with respect to services that pursuant to
§ 2590.716–4(c)(2)(ii) are included as
emergency services), that has a
contractual relationship directly or
indirectly with a group health plan or
health insurance issuer offering group
health insurance coverage setting forth
the terms and conditions on which a
relevant item or service is provided to
a participant or beneficiary under the
plan or coverage, respectively. A single
case agreement between an emergency
facility and a plan or issuer that is used
to address unique situations in which a
participant or beneficiary requires
services that typically occur out-ofnetwork constitutes a contractual
relationship for purposes of this
definition, and is limited to the parties
to the agreement.
Participating health care facility
means any health care facility described
in this section that has a contractual
relationship directly or indirectly with a
group health plan or health insurance
issuer offering group health insurance
coverage setting forth the terms and
conditions on which a relevant item or
service is provided to a participant or
beneficiary under the plan or coverage,
respectively. A single case agreement
between a health care facility and a plan
or issuer that is used to address unique
situations in which a participant or
beneficiary requires services that
typically occur out-of-network
constitutes a contractual relationship for
purposes of this definition, and is
limited to the parties to the agreement.
Participating provider means any
physician or other health care provider
who has a contractual relationship
directly or indirectly with a group
health plan or health insurance issuer
offering group health insurance
coverage setting forth the terms and
conditions on which a relevant item or
service is provided to a participant or
beneficiary under the plan or coverage,
respectively.
Physician or health care provider
means a physician or other health care
provider who is acting within the scope
of practice of that provider’s license or
certification under applicable State law,
but does not include a provider of air
ambulance services.
Provider of air ambulance services
means an entity that is licensed under

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applicable State and Federal law to
provide air ambulance services.
Same or similar item or service has
the meaning given the term in
§ 2590.716–6(a)(13).
Service code has the meaning given
the term in § 2590.716–6(a)(14).
Qualifying payment amount has the
meaning given the term in § 2590.716–
6(a)(16).
Recognized amount means, with
respect to an item or service furnished
by a nonparticipating provider or
nonparticipating emergency facility—
(1) Subject to paragraph (3) of this
definition, in a State that has in effect
a specified State law, the amount
determined in accordance with such
law.
(2) Subject to paragraph (3) of this
definition, in a State that does not have
in effect a specified State law, the lesser
of—
(i) The amount that is the qualifying
payment amount (as determined in
accordance with § 2590.716–6); or
(ii) The amount billed by the provider
or facility.
(3) In a State that has an All-Payer
Model Agreement under section 1115A
of the Social Security Act that applies
with respect to the plan or issuer; the
nonparticipating provider or
nonparticipating emergency facility; and
the item or service, the amount that the
State approves under the All-Payer
Model Agreement for the item or
service.
Specified State law means a State law
that provides for a method for
determining the total amount payable
under a group health plan or group
health insurance coverage offered by a
health insurance issuer to the extent
such State law applies for an item or
service furnished by a nonparticipating
provider or nonparticipating emergency
facility (including where it applies
because the State has allowed a plan
that is not otherwise subject to
applicable State law an opportunity to
opt in, subject to section 514 of ERISA).
A group health plan that opts into such
a specified State law must do so for all
items and services to which the
specified State law applies and in a
manner determined by the applicable
State authority, and must prominently
display in its plan materials describing
the coverage of out-of-network services
a statement that the plan has opted into
the specified State law, identify the
relevant State (or States), and include a
general description of the items and
services provided by nonparticipating
facilities and providers that are covered
by the specified State law.
State means each of the 50 States, the
District of Columbia, Puerto Rico, the

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Virgin Islands, Guam, American Samoa,
and the Northern Mariana Islands.
Treating provider is a physician or
health care provider who has evaluated
the individual.
Visit, with respect to items and
services furnished to an individual at a
health care facility, includes, in
addition to items and services furnished
by a provider at the facility, equipment
and devices, telemedicine services,
imaging services, laboratory services,
and preoperative and postoperative
services, regardless of whether the
provider furnishing such items or
services is at the facility.
§ 2590.716–4 Preventing surprise medical
bills for emergency services.

(a) In general. If a group health plan,
or a health insurance issuer offering
group health insurance coverage,
provides or covers any benefits with
respect to services in an emergency
department of a hospital or with respect
to emergency services in an
independent freestanding emergency
department, the plan or issuer must
cover emergency services, as defined in
paragraph (c)(2) of this section, and this
coverage must be provided in
accordance with paragraph (b) of this
section.
(b) Coverage requirements. A plan or
issuer described in paragraph (a) of this
section must provide coverage for
emergency services in the following
manner—
(1) Without the need for any prior
authorization determination, even if the
services are provided on an out-ofnetwork basis.
(2) Without regard to whether the
health care provider furnishing the
emergency services is a participating
provider or a participating emergency
facility, as applicable, with respect to
the services.
(3) If the emergency services are
provided by a nonparticipating provider
or a nonparticipating emergency
facility—
(i) Without imposing any
administrative requirement or limitation
on coverage that is more restrictive than
the requirements or limitations that
apply to emergency services received
from participating providers and
participating emergency facilities.
(ii) Without imposing cost-sharing
requirements that are greater than the
requirements that would apply if the
services were provided by a
participating provider or a participating
emergency facility.
(iii) By calculating the cost-sharing
requirement as if the total amount that
would have been charged for the
services by such participating provider

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or participating emergency facility were
equal to the recognized amount for such
services.
(iv) The plan or issuer—
(A) Not later than 30 calendar days
after the bill for the services is
transmitted by the provider or facility
(or, in cases where the recognized
amount is determined by a specified
State law or All-Payer Model
Agreement, such other timeframe as
specified by the State law or All-Payer
Model Agreement), determines whether
the services are covered under the plan
or coverage and, if the services are
covered, sends to the provider or
facility, as applicable, an initial
payment or a notice of denial of
payment. For purposes of this paragraph
(b)(3)(iv)(A), the 30-calendar-day period
begins on the date the plan or issuer
receives the information necessary to
decide a claim for payment for the
services.
(B) Pays a total plan or coverage
payment directly to the nonparticipating
provider or nonparticipating facility that
is equal to the amount by which the outof-network rate for the services exceeds
the cost-sharing amount for the services
(as determined in accordance with
paragraphs (b)(3)(ii) and (iii) of this
section), less any initial payment
amount made under paragraph
(b)(3)(iv)(A) of this section. The total
plan or coverage payment must be made
in accordance with the timing
requirement described in section
716(c)(6) of ERISA, or in cases where
the out-of-network rate is determined
under a specified State law or All-Payer
Model Agreement, such other timeframe
as specified by the State law or AllPayer Model Agreement.
(v) By counting any cost-sharing
payments made by the participant or
beneficiary with respect to the
emergency services toward any innetwork deductible or in-network outof-pocket maximums (including the
annual limitation on cost sharing under
section 2707(b) of the PHS Act) (as
applicable) applied under the plan or
coverage (and the in-network deductible
and in-network out-of-pocket
maximums must be applied) in the same
manner as if the cost-sharing payments
were made with respect to emergency
services furnished by a participating
provider or a participating emergency
facility.
(4) Without limiting what constitutes
an emergency medical condition (as
defined in paragraph (c)(1) of this
section) solely on the basis of diagnosis
codes.
(5) Without regard to any other term
or condition of the coverage, other
than—

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(i) The exclusion or coordination of
benefits (to the extent not inconsistent
with benefits for an emergency medical
condition, as defined in paragraph (c)(1)
of this section).
(ii) An affiliation or waiting period
(each as defined in § 2590.701–2).
(iii) Applicable cost sharing.
(c) Definitions. In this section—
(1) Emergency medical condition
means a medical condition, including a
mental health condition or substance
use disorder, manifesting itself by acute
symptoms of sufficient severity
(including severe pain) such that a
prudent layperson, who possesses an
average knowledge of health and
medicine, could reasonably expect the
absence of immediate medical attention
to result in a condition described in
clause (i), (ii), or (iii) of section
1867(e)(1)(A) of the Social Security Act
(42 U.S.C. 1395dd(e)(1)(A)). (In that
provision of the Social Security Act,
clause (i) refers to placing the health of
the individual (or, with respect to a
pregnant woman, the health of the
woman or her unborn child) in serious
jeopardy; clause (ii) refers to serious
impairment to bodily functions; and
clause (iii) refers to serious dysfunction
of any bodily organ or part.)
(2) Emergency services means, with
respect to an emergency medical
condition—
(i) In general. (A) An appropriate
medical screening examination (as
required under section 1867 of the
Social Security Act (42 U.S.C. 1395dd)
or as would be required under such
section if such section applied to an
independent freestanding emergency
department) that is within the capability
of the emergency department of a
hospital or of an independent
freestanding emergency department, as
applicable, including ancillary services
routinely available to the emergency
department to evaluate such emergency
medical condition; and
(B) Within the capabilities of the staff
and facilities available at the hospital or
the independent freestanding
emergency department, as applicable,
such further medical examination and
treatment as are required under section
1867 of the Social Security Act (42
U.S.C. 1395dd), or as would be required
under such section if such section
applied to an independent freestanding
emergency department, to stabilize the
patient (regardless of the department of
the hospital in which such further
examination or treatment is furnished).
(ii) Inclusion of additional services.
(A) Subject to paragraph (c)(2)(ii)(B) of
this section, items and services—
(1) For which benefits are provided or
covered under the plan or coverage; and

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(2) That are furnished by a
nonparticipating provider or
nonparticipating emergency facility
(regardless of the department of the
hospital in which such items or services
are furnished) after the participant or
beneficiary is stabilized and as part of
outpatient observation or an inpatient or
outpatient stay with respect to the visit
in which the services described in
paragraph (c)(2)(i) of this section are
furnished.
(B) Items and services described in
paragraph (c)(2)(ii)(A) of this section are
not included as emergency services if all
of the conditions in 45 CFR 149.410(b)
are met.
(3) To stabilize, with respect to an
emergency medical condition, has the
meaning given such term in section
1867(e)(3) of the Social Security Act (42
U.S.C. 1395dd(e)(3)).
(d) Applicability date. The provisions
of this section are applicable with
respect to plan years beginning on or
after January 1, 2022.
§ 2590.716–5 Preventing surprise medical
bills for non-emergency services performed
by nonparticipating providers at certain
participating facilities.

(a) In general. If a group health plan,
or a health insurance issuer offering
group health insurance coverage,
provides or covers any benefits with
respect to items and services described
in paragraph (b) of this section, the plan
or issuer must cover the items and
services when furnished by a
nonparticipating provider in accordance
with paragraph (c) of this section.
(b) Items and services described. The
items and services described in this
paragraph (b) are items and services
(other than emergency services)
furnished to a participant or beneficiary
by a nonparticipating provider with
respect to a visit at a participating
health care facility, unless the provider
has satisfied the notice and consent
criteria of 45 CFR 149.420(c) through (i)
with respect to such items and services.
(c) Coverage requirements. In the case
of items and services described in
paragraph (b) of this section, the plan or
issuer—
(1) Must not impose a cost-sharing
requirement for the items and services
that is greater than the cost-sharing
requirement that would apply if the
items or services had been furnished by
a participating provider.
(2) Must calculate the cost-sharing
requirements as if the total amount that
would have been charged for the items
and services by such participating
provider were equal to the recognized
amount for the items and services.
(3) Not later than 30 calendar days
after the bill for the items or services is

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transmitted by the provider (or in cases
where the recognized amount is
determined by a specified State law or
All-Payer Model Agreement, such other
timeframe as specified under the State
law or All-Payer Model Agreement),
must determine whether the items and
services are covered under the plan or
coverage and, if the items and services
are covered, send to the provider an
initial payment or a notice of denial of
payment. For purposes of this paragraph
(c)(3), the 30-calendar-day period begins
on the date the plan or issuer receives
the information necessary to decide a
claim for payment for the items or
services.
(4) Must pay a total plan or coverage
payment directly to the nonparticipating
provider that is equal to the amount by
which the out-of-network rate for the
items and services involved exceeds the
cost-sharing amount for the items and
services (as determined in accordance
with paragraphs (c)(1) and (2) of this
section), less any initial payment
amount made under paragraph (c)(3) of
this section. The total plan or coverage
payment must be made in accordance
with the timing requirement described
in section 716(c)(6) of ERISA, or in cases
where the out-of-network rate is
determined under a specified State law
or All-Payer Model Agreement, such
other timeframe as specified by the State
law or All-Payer Model Agreement.
(5) Must count any cost-sharing
payments made by the participant or
beneficiary toward any in-network
deductible and in-network out-of-pocket
maximums (including the annual
limitation on cost sharing under section
2707(b) of the PHS Act) (as applicable)
applied under the plan or coverage (and
the in-network deductible and out-ofpocket maximums must be applied) in
the same manner as if such cost-sharing
payments were made with respect to
items and services furnished by a
participating provider.
(d) Applicability date. The provisions
of this section are applicable with
respect to plan years beginning on or
after January 1, 2022.

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§ 2590.716–6 Methodology for calculating
qualifying payment amount.

(a) Definitions. For purposes of this
section, the following definitions apply:
(1) Contracted rate means the total
amount (including cost sharing) that a
group health plan or health insurance
issuer has contractually agreed to pay a
participating provider, facility, or
provider of air ambulance services for
covered items and services, whether
directly or indirectly, including through
a third-party administrator or pharmacy
benefit manager. Solely for purposes of

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this definition, a single case agreement,
letter of agreement, or other similar
arrangement between a provider,
facility, or air ambulance provider and
a plan or issuer, used to supplement the
network of the plan or coverage for a
specific participant or beneficiary in
unique circumstances, does not
constitute a contract.
(2) Derived amount has the meaning
given the term in § 2590.715–2715A1.
(3) Eligible database means—
(i) A State all-payer claims database;
or
(ii) Any third-party database which—
(A) Is not affiliated with, or owned or
controlled by, any health insurance
issuer, or a health care provider, facility,
or provider of air ambulance services (or
any member of the same controlled
group as, or under common control
with, such an entity). For purposes of
this paragraph (a)(3)(ii)(A), the term
controlled group means a group of two
or more persons that is treated as a
single employer under sections 52(a),
52(b), 414(m), or 414(o) of the Internal
Revenue Code of 1986, as amended;
(B) Has sufficient information
reflecting in-network amounts paid by
group health plans or health insurance
issuers offering group health insurance
coverage to providers, facilities, or
providers of air ambulance services for
relevant items and services furnished in
the applicable geographic region; and
(C) Has the ability to distinguish
amounts paid to participating providers
and facilities by commercial payers,
such as group health plans and health
insurance issuers offering group health
insurance coverage, from all other
claims data, such as amounts billed by
nonparticipating providers or facilities
and amounts paid by public payers,
including the Medicare program under
title XVIII of the Social Security Act, the
Medicaid program under title XIX of the
Social Security Act (or a demonstration
project under title XI of the Social
Security Act), or the Children’s Health
Insurance Program under title XXI of the
Social Security Act.
(4) Facility of the same or similar
facility type means, with respect to
emergency services, either—
(i) An emergency department of a
hospital; or
(ii) An independent freestanding
emergency department.
(5) First coverage year means, with
respect to an item or service for which
coverage is not offered in 2019 under a
group health plan or group health
insurance coverage offered by a health
insurance issuer, the first year after 2019
for which coverage for such item or
service is offered under that plan or
coverage.

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(6) First sufficient information year
means, with respect to a group health
plan or group health insurance coverage
offered by a health insurance issuer—
(i) In the case of an item or service for
which the plan or coverage does not
have sufficient information to calculate
the median of the contracted rates
described in paragraph (b) of this
section in 2019, the first year after 2022
for which the plan or issuer has
sufficient information to calculate the
median of such contracted rates in the
year immediately preceding that first
year after 2022; and
(ii) In the case of a newly covered
item or service, the first year after the
first coverage year for such item or
service with respect to such plan or
coverage for which the plan or issuer
has sufficient information to calculate
the median of the contracted rates
described in paragraph (b) of this
section in the year immediately
preceding that first year.
(7) Geographic region means—
(i) For items and services other than
air ambulance services—
(A) Subject to paragraphs (a)(7)(i)(B)
and (C) of this section, one region for
each metropolitan statistical area, as
described by the U.S. Office of
Management and Budget and published
by the U.S. Census Bureau, in a State,
and one region consisting of all other
portions of the State.
(B) If a plan or issuer does not have
sufficient information to calculate the
median of the contracted rates described
in paragraph (b) of this section for an
item or service provided in a geographic
region described in paragraph
(a)(7)(i)(A) of this section, one region
consisting of all metropolitan statistical
areas, as described by the U.S. Office of
Management and Budget and published
by the U.S. Census Bureau, in the State,
and one region consisting of all other
portions of the State.
(C) If a plan or issuer does not have
sufficient information to calculate the
median of the contracted rates described
in paragraph (b) of this section for an
item or service provided in a geographic
region described in paragraph
(a)(7)(i)(B) of this section, one region
consisting of all metropolitan statistical
areas, as described by the U.S. Office of
Management and Budget and published
by the U.S. Census Bureau, in each
Census division and one region
consisting of all other portions of the
Census division, as described by the
U.S. Census Bureau.
(ii) For air ambulance services—
(A) Subject to paragraph (a)(7)(ii)(B) of
this section, one region consisting of all
metropolitan statistical areas, as
described by the U.S. Office of

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Management and Budget and published
by the U.S. Census Bureau, in the State,
and one region consisting of all other
portions of the State, determined based
on the point of pick-up (as defined in 42
CFR 414.605).
(B) If a plan or issuer does not have
sufficient information to calculate the
median of the contracted rates described
in paragraph (b) of this section for an air
ambulance service provided in a
geographic region described in
paragraph (a)(7)(ii)(A) of this section,
one region consisting of all metropolitan
statistical areas, as described by the U.S.
Office of Management and Budget and
published by the U.S. Census Bureau, in
each Census division and one region
consisting of all other portions of the
Census division, as described by the
U.S. Census Bureau, determined based
on the point of pick-up (as defined in 42
CFR 414.605).
(8) Insurance market is, irrespective
of the State, one of the following:
(i) The individual market (other than
short-term, limited-duration insurance
or individual health insurance coverage
that consists solely of excepted
benefits).
(ii) The large group market (other than
coverage that consists solely of excepted
benefits).
(iii) The small group market (other
than coverage that consists solely of
excepted benefits).
(iv) In the case of a self-insured group
health plan, all self-insured group
health plans (other than account-based
plans, as defined in § 2590.715–
2711(d)(6)(i), and plans that consist
solely of excepted benefits) of the same
plan sponsor, or at the option of the
plan sponsor, all self-insured group
health plans administered by the same
entity (including a third-party
administrator contracted by the plan), to
the extent otherwise permitted by law,
that is responsible for calculating the
qualifying payment amount on behalf of
the plan.
(9) Modifiers mean codes applied to
the service code that provide a more
specific description of the furnished
item or service and that may adjust the
payment rate or affect the processing or
payment of the code billed.
(10) Newly covered item or service
means an item or service for which
coverage was not offered in 2019 under
a group health plan or group health
insurance coverage offered by a health
insurance issuer, but that is offered
under the plan or coverage in a year
after 2019.
(11) New service code means a service
code that was created or substantially
revised in a year after 2019.

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(12) Provider in the same or similar
specialty means the practice specialty of
a provider, as identified by the plan or
issuer consistent with the plan’s or
issuer’s usual business practice, except
that, with respect to air ambulance
services, all providers of air ambulance
services are considered to be a single
provider specialty.
(13) Same or similar item or service
means a health care item or service
billed under the same service code, or
a comparable code under a different
procedural code system.
(14) Service code means the code that
describes an item or service using the
Current Procedural Terminology (CPT)
code, Healthcare Common Procedure
Coding System (HCPCS), or DiagnosisRelated Group (DRG) codes.
(15) Sufficient information means, for
purposes of determining whether a
group health plan or health insurance
issuer offering group health insurance
coverage has sufficient information to
calculate the median of the contracted
rates described in paragraph (b) of this
section—
(i) The plan or issuer has at least three
contracted rates on January 31, 2019, to
calculate the median of the contracted
rates in accordance with paragraph (b)
of this section; or
(ii) For an item or service furnished
during a year after 2022 that is used to
determine the first sufficient
information year—
(A) The plan or issuer has at least
three contracted rates on January 31 of
the year immediately preceding that
year to calculate the median of the
contracted rates in accordance with
paragraph (b) of this section; and
(B) The contracted rates under
paragraph (a)(15)(ii)(A) of this section
account (or are reasonably expected to
account) for at least 25 percent of the
total number of claims paid for that item
or service for that year with respect to
all plans of the sponsor (or the
administering entity as provided in
paragraph (a)(8)(iv) of this section, if
applicable) or all coverage offered by the
issuer that are offered in the same
insurance market.
(16) Qualifying payment amount
means, with respect to a sponsor of a
group health plan or health insurance
issuer offering group health insurance
coverage, the amount calculated using
the methodology described in paragraph
(c) of this section.
(17) Underlying fee schedule rate
means the rate for a covered item or
service from a particular participating
provider, providers, or facility that a
group health plan or health insurance
issuer uses to determine a participant’s
or beneficiary’s cost-sharing liability for

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the item or service, when that rate is
different from the contracted rate.
(b) Methodology for calculation of
median contracted rate—(1) In general.
The median contracted rate for an item
or service is calculated by arranging in
order from least to greatest the
contracted rates of all group health
plans of the plan sponsor (or the
administering entity as provided in
paragraph (a)(8)(iv) of this section, if
applicable) or all group health insurance
coverage offered by the issuer in the
same insurance market for the same or
similar item or service that is provided
by a provider in the same or similar
specialty or facility of the same or
similar facility type and provided in the
geographic region in which the item or
service is furnished and selecting the
middle number. If there are an even
number of contracted rates, the median
contracted rate is the average of the
middle two contracted rates. In
determining the median contracted rate,
the amount negotiated under each
contract is treated as a separate amount.
If a plan or issuer has a contract with
a provider group or facility, the rate
negotiated with that provider group or
facility under the contract is treated as
a single contracted rate if the same
amount applies with respect to all
providers of such provider group or
facility under the single contract.
However, if a plan or issuer has a
contract with multiple providers, with
separate negotiated rates with each
particular provider, each unique
contracted rate with an individual
provider constitutes a single contracted
rate. Further, if a plan or issuer has
separate contracts with individual
providers, the contracted rate under
each such contract constitutes a single
contracted rate (even if the same amount
is paid to multiple providers under
separate contracts).
(2) Calculation rules. In calculating
the median contracted rate, a plan or
issuer must:
(i) Calculate the median contracted
rate with respect to all plans of such
sponsor (or the administering entity as
provided in paragraph (a)(8)(iv) of this
section, if applicable) or all coverage
offered by such issuer that are offered in
the same insurance market;
(ii) Calculate the median contracted
rate using the full contracted rate
applicable to the service code, except
that the plan or issuer must—
(A) Calculate separate median
contracted rates for CPT code modifiers
‘‘26’’ (professional component) and
‘‘TC’’ (technical component);
(B) For anesthesia services, calculate
a median contracted rate for the

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anesthesia conversion factor for each
service code;
(C) For air ambulance services,
calculate a median contracted rate for
the air mileage service codes (A0435
and A0436); and
(D) Where contracted rates otherwise
vary based on applying a modifier code,
calculate a separate median contracted
rate for each such service code-modifier
combination;
(iii) In the case of payments made by
a plan or issuer that are not on a fee-forservice basis (such as bundled or
capitation payments), calculate a
median contracted rate for each item or
service using the underlying fee
schedule rates for the relevant items or
services. If the plan or issuer does not
have an underlying fee schedule rate for
the item or service, it must use the
derived amount to calculate the median
contracted rate; and
(iv) Exclude risk sharing, bonus,
penalty, or other incentive-based or
retrospective payments or payment
adjustments.
(3) Provider specialties; facility types.
(i) If a plan or issuer has contracted rates
that vary based on provider specialty for
a service code, the median contracted
rate is calculated separately for each
provider specialty, as applicable.
(ii) If a plan or issuer has contracted
rates for emergency services that vary
based on facility type for a service code,
the median contracted rate is calculated
separately for each facility of the same
or similar facility type.
(c) Methodology for calculation of the
qualifying payment amount—(1) In
general. (i) For an item or service (other
than items or services described in
paragraphs (c)(1)(iii) through (vii) of this
section) furnished during 2022, the plan
or issuer must calculate the qualifying
payment amount by increasing the
median contracted rate (as determined
in accordance with paragraph (b) of this
section) for the same or similar item or
service under such plans or coverage,
respectively, on January 31, 2019, by the
combined percentage increase as
published by the Department of the
Treasury and the Internal Revenue
Service to reflect the percentage
increase in the CPI–U over 2019, such
percentage increase over 2020, and such
percentage increase over 2021.
(A) The combined percentage increase
for 2019, 2020, and 2021 will be
published in guidance by the Internal
Revenue Service. The Department of the
Treasury and the Internal Revenue
Service will calculate the percentage
increase using the CPI–U published by
the Bureau of Labor Statistics of the
Department of Labor.

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(B) For purposes of this paragraph
(c)(1)(i), the CPI–U for each calendar
year is the average of the CPI–U as of the
close of the 12-month period ending on
August 31 of the calendar year, rounded
to 10 decimal places.
(C) The combined percentage increase
for 2019, 2020, and 2021 will be
calculated as:
(CPI–U 2019/CPI–U 2018) × (CPI–U
2020/CPI–U 2019) × (CPI–U 2021/
CPI–U 2020)
(ii) For an item or service (other than
items or services described in
paragraphs (c)(1)(iii) through (vii) of this
section) furnished during 2023 or a
subsequent year, the plan or issuer must
calculate the qualifying payment
amount by increasing the qualifying
payment amount determined under
paragraph (c)(1)(i) of this section, for
such an item or service furnished in the
immediately preceding year, by the
percentage increase as published by the
Department of the Treasury and the
Internal Revenue Service.
(A) The percentage increase for any
year after 2022 will be published in
guidance by the Internal Revenue
Service. The Department of the Treasury
and Internal Revenue Service will
calculate the percentage increase using
the CPI–U published by the Bureau of
Labor Statistics of the Department of
Labor.
(B) For purposes of this paragraph
(c)(1)(ii), the CPI–U for each calendar
year is the average of the CPI–U as of the
close of the 12-month period ending on
August 31 of the calendar year, rounded
to 10 decimal places.
(C) The combined percentage increase
for any year will be calculated as CPI–
U present year/CPI–U prior year.
(iii) For anesthesia services furnished
during 2022, the plan or issuer must
calculate the qualifying payment
amount by first increasing the median
contracted rate for the anesthesia
conversion factor (as determined in
accordance with paragraph (b) of this
section) for the same or similar item or
service under such plans or coverage,
respectively, on January 31, 2019, in
accordance with paragraph (c)(1)(i) of
this section (referred to in this section
as the indexed median contracted rate
for the anesthesia conversion factor).
The plan or issuer must then multiply
the indexed median contracted rate for
the anesthesia conversion factor by the
sum of the base unit, time unit, and
physical status modifier units of the
participant or beneficiary to whom
anesthesia services are furnished to
determine the qualifying payment
amount.
(A) The base units for an anesthesia
service code are the base units for that

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36965

service code specified in the most recent
edition (as of the date of service) of the
American Society of Anesthesiologists
Relative Value Guide.
(B) The time unit is measured in 15minute increments or a fraction thereof.
(C) The physical status modifier on a
claim is a standard modifier describing
the physical status of the patient and is
used to distinguish between various
levels of complexity of the anesthesia
services provided, and is expressed as a
unit with a value between zero (0) and
three (3).
(D) The anesthesia conversion factor
is expressed in dollars per unit and is
a contracted rate negotiated with the
plan or issuer.
(iv) For anesthesia services furnished
during 2023 or a subsequent year, the
plan or issuer must calculate the
qualifying payment amount by first
increasing the indexed median
contracted rate for the anesthesia
conversion factor, determined under
paragraph (c)(1)(iii) of this section for
such services furnished in the
immediately preceding year, in
accordance with paragraph (c)(1)(ii) of
this section. The plan or issuer must
then multiply that amount by the sum
of the base unit, time unit, and physical
status modifier units for the participant
or beneficiary to whom anesthesia
services are furnished to determine the
qualifying payment amount.
(v) For air ambulance services billed
using the air mileage service codes
(A0435 and A0436) that are furnished
during 2022, the plan or issuer must
calculate the qualifying payment
amount for services billed using the air
mileage service codes by first increasing
the median contracted rate (as
determined in accordance with
paragraph (b) of this section), in
accordance with paragraph (c)(1)(i) of
this section (referred to in this section
as the indexed median air mileage rate).
The plan or issuer must then multiply
the indexed median air mileage rate by
the number of loaded miles provided to
the participant or beneficiary to
determine the qualifying payment
amount.
(A) The air mileage rate is expressed
in dollars per loaded mile flown, is
expressed in statute miles (not nautical
miles), and is a contracted rate
negotiated with the plan or issuer.
(B) The number of loaded miles is the
number of miles a patient is transported
in the air ambulance vehicle.
(C) The qualifying payment amount
for other service codes associated with
air ambulance services is calculated in
accordance with paragraphs (c)(1)(i) and
(ii) of this section.

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(vi) For air ambulance services billed
using the air mileage service codes
(A0435 and A0436) that are furnished
during 2023 or a subsequent year, the
plan or issuer must calculate the
qualifying payment amount by first
increasing the indexed median air
mileage rate, determined under
paragraph (c)(1)(v) of this section for
such services furnished in the
immediately preceding year, in
accordance with paragraph (c)(1)(ii) of
this section. The plan or issuer must
then multiply the indexed median air
mileage rate by the number of loaded
miles provided to the participant or
beneficiary to determine the qualifying
payment amount.
(vii) For any other items or services
for which a plan or issuer generally
determines payment for the same or
similar items or services by multiplying
a contracted rate by another unit value,
the plan or issuer must calculate the
qualifying payment amount using a
methodology that is similar to the
methodology required under paragraphs
(c)(1)(iii) through (vi) of this section and
reasonably reflects the payment
methodology for same or similar items
or services.
(2) New plans and coverage. With
respect to a sponsor of a group health
plan or health insurance issuer offering
group health insurance coverage in a
geographic region in which the sponsor
or issuer, respectively, did not offer any
group health plan or health insurance
coverage during 2019—
(i) For the first year in which the
group health plan or group health
insurance coverage, respectively, is
offered in such region—
(A) If the plan or issuer has sufficient
information to calculate the median of
the contracted rates described in
paragraph (b) of this section, the plan or
issuer must calculate the qualifying
payment amount in accordance with
paragraph (c)(1) of this section for items
and services that are covered by the
plan or coverage and furnished during
the first year; and
(B) If the plan or issuer does not have
sufficient information to calculate the
median of the contracted rates described
in paragraph (b) of this section for an
item or service provided in a geographic
region, the plan or issuer must
determine the qualifying payment
amount for the item or service in
accordance with paragraph (c)(3)(i) of
this section.
(ii) For each subsequent year the
group health plan or group health
insurance coverage, respectively, is
offered in the region, the plan or issuer
must calculate the qualifying payment
amount by increasing the qualifying

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payment amount determined under this
paragraph (c)(2) for the items and
services furnished in the immediately
preceding year, in accordance with
paragraph (c)(1)(ii), (iv), or (vi) of this
section, as applicable.
(3) Insufficient information; newly
covered items and services. In the case
of a plan or issuer that does not have
sufficient information to calculate the
median of the contracted rates described
in paragraph (b) of this section in 2019
(or, in the case of a newly covered item
or service, in the first coverage year for
such item or service with respect to
such plan or coverage if the plan or
issuer does not have sufficient
information) for an item or service
provided in a geographic region—
(i) For an item or service furnished
during 2022 (or, in the case of a newly
covered item or service, during the first
coverage year for the item or service
with respect to the plan or coverage),
the plan or issuer must calculate the
qualifying payment amount by first
identifying the rate that is equal to the
median of the in-network allowed
amounts for the same or similar item or
service provided in the geographic
region in the year immediately
preceding the year in which the item or
service is furnished (or, in the case of a
newly covered item or service, the year
immediately preceding such first
coverage year) determined by the plan
or issuer, respectively, through use of
any eligible database, and then
increasing that rate by the percentage
increase in the CPI–U over such
preceding year. For purposes of this
section, in cases in which an eligible
database is used to determine the
qualifying payment amount with respect
to an item or service furnished during
a calendar year, the plan or issuer must
use the same database for determining
the qualifying payment amount for that
item or service furnished through the
last day of the calendar year, and if a
different database is selected for some
items or services, the basis for that
selection must be one or more factors
not directly related to the rate of those
items or services (such as sufficiency of
data for those items or services).
(ii) For an item or service furnished in
a subsequent year (before the first
sufficient information year for such item
or service with respect to such plan or
coverage), the plan or issuer must
calculate the qualifying payment
amount by increasing the qualifying
payment amount determined under
paragraph (c)(3)(i) of this section or this
paragraph (c)(3)(ii), as applicable, for
such item or service for the year
immediately preceding such subsequent

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year, by the percentage increase in CPI–
U over such preceding year;
(iii) For an item or service furnished
in the first sufficient information year
for such item or service with respect to
such plan or coverage, the plan or issuer
must calculate the qualifying payment
amount in accordance with paragraph
(c)(1)(i), (iii), or (v) of this section, as
applicable, except that in applying such
paragraph to such item or service, the
reference to ‘furnished during 2022’ is
treated as a reference to furnished
during such first sufficient information
year, the reference to ‘in 2019’ is treated
as a reference to such sufficient
information year, and the increase
described in such paragraph is not
applied; and
(iv) For an item or service furnished
in any year subsequent to the first
sufficient information year for such item
or service with respect to such plan or
coverage, the plan or issuer must
calculate the qualifying payment
amount in accordance with paragraph
(c)(1)(ii), (iv), or (vi) of this section, as
applicable, except that in applying such
paragraph to such item or service, the
reference to ‘furnished during 2023 or a
subsequent year’ is treated as a reference
to furnished during the year after such
first sufficient information year or a
subsequent year.
(4) New service codes. In the case of
a plan or issuer that does not have
sufficient information to calculate the
median of the contracted rates described
in paragraph (b) of this section and
determine the qualifying payment
amount under paragraphs (c)(1) through
(3) of this section because the item or
service furnished is billed under a new
service code—
(i) For an item or service furnished
during 2022 (or, in the case of a newly
covered item or service, during the first
coverage year for the item or service
with respect to the plan or coverage),
the plan or issuer must identify a
reasonably related service code that
existed in the immediately preceding
year and—
(A) If the Centers for Medicare &
Medicaid Services has established a
Medicare payment rate for the item or
service billed under the new service
code, the plan or issuer must calculate
the qualifying payment amount by first
calculating the ratio of the rate that
Medicare pays for the item or service
billed under the new service code
compared to the rate that Medicare pays
for the item or service billed under the
related service code, and then
multiplying the ratio by the qualifying
payment amount for an item or service
billed under the related service code for

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the year in which the item or service is
furnished.
(B) If the Centers for Medicare &
Medicaid Services has not established a
Medicare payment rate for the item or
service billed under the new service
code, the plan or issuer must calculate
the qualifying payment amount by first
calculating the ratio of the rate that the
plan or issuer reimburses for the item or
service billed under the new service
code compared to the rate that the plan
or issuer reimburses for the item or
service billed under the related service
code, and then multiplying the ratio by
the qualifying payment amount for an
item or service billed under the related
service code.
(ii) For an item or service furnished in
a subsequent year (before the first
sufficient information year for such item
or service with respect to such plan or
coverage or before the first year for
which an eligible database has sufficient
information to a calculate a rate under
paragraph (c)(3)(i) of this section in the
immediately preceding year), the plan
or issuer must calculate the qualifying
payment amount by increasing the
qualifying payment amount determined
under paragraph (c)(4)(i) of this section
or this paragraph (c)(4)(ii), as applicable,
for such item or service for the year
immediately preceding such subsequent
year, by the percentage increase in CPI–
U over such preceding year;
(iii) For an item or service furnished
in the first sufficient information year
for such item or service with respect to
such plan or coverage or the first year
for which an eligible database has
sufficient information to calculate a rate
under paragraph (c)(3)(i) of this section
in the immediately preceding year, the
plan or issuer must calculate the
qualifying payment amount in
accordance with paragraph (c)(3) of this
section.
(d) Information to be shared about
qualifying payment amount. In cases in
which the recognized amount with
respect to an item or service furnished
by a nonparticipating provider,
nonparticipating emergency facility, or
nonparticipating provider of air
ambulance services is the qualifying
payment amount, the plan or issuer
must provide in writing, in paper or
electronic form, to the provider or
facility, as applicable—
(1) With each initial payment or
notice of denial of payment under
§ 2590.716–4, § 2590.716–5, or
§ 2590.717–1 of this part:
(i) The qualifying payment amount for
each item or service involved;
(ii) A statement to certify that, based
on the determination of the plan or
issuer—

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(A) The qualifying payment amount
applies for purposes of the recognized
amount (or, in the case of air ambulance
services, for calculating the participant’s
or beneficiary’s cost sharing); and
(B) Each qualifying payment amount
shared with the provider or facility was
determined in compliance with this
section;
(iii) A statement that if the provider
or facility, as applicable, wishes to
initiate a 30-day open negotiation
period for purposes of determining the
amount of total payment, the provider
or facility may contact the appropriate
person or office to initiate open
negotiation, and that if the 30-day
negotiation period does not result in a
determination, generally, the provider
or facility may initiate the independent
dispute resolution process within 4 days
after the end of the open negotiation
period; and
(iv) Contact information, including a
telephone number and email address,
for the appropriate person or office to
initiate open negotiations for purposes
of determining an amount of payment
(including cost sharing) for such item or
service.
(2) In a timely manner upon request
of the provider or facility:
(i) Information about whether the
qualifying payment amount for items
and services involved included
contracted rates that were not on a feefor-service basis for those specific items
and services and whether the qualifying
payment amount for those items and
services was determined using
underlying fee schedule rates or a
derived amount;
(ii) If a plan or issuer uses an eligible
database under paragraph (c)(3) of this
section to determine the qualifying
payment amount, information to
identify which database was used; and
(iii) If a related service code was used
to determine the qualifying payment
amount for an item or service billed
under a new service code under
paragraph (c)(4)(i) or (ii) of this section,
information to identify the related
service code;
(iv) If applicable, a statement that the
plan’s or issuer’s contracted rates
include risk-sharing, bonus, penalty, or
other incentive-based or retrospective
payments or payment adjustments for
the items and services involved (as
applicable) that were excluded for
purposes of calculating the qualifying
payment amount.
(e) Certain access fees to databases. In
the case of a plan or issuer that,
pursuant to this section, uses an eligible
database to determine the qualifying
payment amount for an item or service,
the plan or issuer is responsible for any

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36967

costs associated with accessing such
database.
(f) Applicability date. The provisions
of this section are applicable with
respect to plan years beginning on or
after January 1, 2022.
§ 2590.716–7 Complaints process for
surprise medical bills regarding group
health plans and group health insurance
coverage.

(a) Scope and definitions—(1) Scope.
This section establishes a process to
receive and resolve complaints
regarding information that a specific
group health plan or health insurance
issuer offering group health insurance
coverage may be failing to meet the
requirements under subpart D of this
part, which may warrant an
investigation.
(2) Definitions. In this section—
(i) Complaint means a
communication, written or oral, that
indicates there has been a potential
violation of the requirements under
subpart D of this part, whether or not a
violation actually occurred.
(ii) Complainant means any
individual, or their authorized
representative, who files a complaint as
defined in paragraph (a)(2)(i) of this
section.
(b) Complaints process. (1) DOL will
consider the date a complaint is filed to
be the date upon which DOL receives an
oral or written statement that identifies
information about the complaint
sufficient to identify the parties
involved and the action or inaction
complained of.
(2) DOL will notify complainants, by
oral or written means, of receipt of the
complaint no later than 60 business
days after the complaint is received.
DOL will include a response
acknowledging receipt of the complaint,
notifying the complainant of their rights
and obligations under the complaints
process, and describing the next steps of
the complaint resolution process. As
part of the response, DOL may request
additional information needed to
process the complaint. Such additional
information may include:
(i) Explanations of benefits;
(ii) Processed claims;
(iii) Information about the health care
provider, facility, or provider of air
ambulance services involved;
(iv) Information about the group
health plan or health insurance issuer
covering the individual;
(v) Information to support a
determination regarding whether the
service was an emergency service or
non-emergency service;
(vi) The summary plan description,
policy, certificate, contract of insurance,

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membership booklet, outline of
coverage, or other evidence of coverage
the plan or issuer provides to
participants or beneficiaries;
(vii) Documents regarding the facts in
the complaint in the possession of, or
otherwise attainable by, the
complainant; or
(viii) Any other information DOL may
need to make a determination of facts
for an investigation.
(3) DOL will make reasonable efforts
consistent with agency practices to
notify the complainant of the outcome
of the complaint after the submission is
processed through appropriate methods
as determined by DOL. A complaint is
considered processed after DOL has
reviewed the complaint and
accompanying information and made an
outcome determination. Based on the
nature of the complaint and the plan or
issuer involved, DOL may—
(i) Refer the complainant to another
appropriate Federal or State resolution
process;
(ii) Notify the complainant and make
reasonable efforts to refer the
complainant to the appropriate State or
Federal regulatory authority if DOL
receives a complaint where another
entity has enforcement jurisdiction over
the plan or issuer;
(iii) Refer the plan or issuer for an
investigation for enforcement action; or
(iv) Provide the complainant with an
explanation of the resolution of the
complaint and any corrective action
taken.

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§ 2590.717–1 Preventing surprise medical
bills for air ambulance services.

(a) In general. If a group health plan
or a health insurance issuer offering
group health insurance coverage
provides or covers any benefits for air
ambulance services, the plan or issuer
must cover such services from a
nonparticipating provider of air
ambulance services in accordance with
paragraph (b) of this section.
(b) Coverage requirements. A plan or
issuer described in paragraph (a) of this
section must provide coverage of air
ambulance services in the following
manner—
(1) The cost-sharing requirements
with respect to the services must be the
same requirements that would apply if
the services were provided by a
participating provider of air ambulance
services.
(2) The cost-sharing requirement must
be calculated as if the total amount that
would have been charged for the
services by a participating provider of
air ambulance services were equal to the
lesser of the qualifying payment amount
(as determined in accordance with

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§ 2590.716–6) or the billed amount for
the services.
(3) The cost-sharing amounts must be
counted towards any in-network
deductible and in-network out-of-pocket
maximums (including the annual
limitation on cost sharing under section
2707(b) of the PHS Act) (as applicable)
applied under the plan or coverage (and
the in-network deductible and out-ofpocket maximums must be applied) in
the same manner as if the cost-sharing
payments were made with respect to
services furnished by a participating
provider of air ambulance services.
(4) The plan or issuer must—
(i) Not later than 30 calendar days
after the bill for the services is
transmitted by the provider of air
ambulance services, determine whether
the services are covered under the plan
or coverage and, if the services are
covered, send to the provider an initial
payment or a notice of denial of
payment. For purposes of this paragraph
(b)(4)(i), the 30-calendar-day period
begins on the date the plan or issuer
receives the information necessary to
decide a claim for payment for the
services.
(ii) Pay a total plan or coverage
payment directly to the nonparticipating
provider furnishing such air ambulance
services that is equal to the amount by
which the out-of-network rate for the
services exceeds the cost-sharing
amount for the services (as determined
in accordance with paragraphs (b)(1)
and (2) of this section), less any initial
payment amount made under paragraph
(b)(4)(i) of this section. The total plan or
coverage payment must be made in
accordance with the timing requirement
described in section 717(b)(6) of ERISA,
or in cases where the out-of-network
rate is determined under a specified
State law or All-Payer Model
Agreement, such other timeframe as
specified by the State law or All-Payer
Model Agreement.
(c) Applicability date. The provisions
of this section are applicable with
respect to plan years beginning on or
after January 1, 2022.
§ 2590.722 Choice of health care
professional.

(a) Choice of health care
professional—(1) Designation of
primary care provider—(i) In general. If
a group health plan, or a health
insurance issuer offering group health
insurance coverage, requires or provides
for designation by a participant or
beneficiary of a participating primary
care provider, then the plan or issuer
must permit each participant or
beneficiary to designate any
participating primary care provider who

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is available to accept the participant or
beneficiary. In such a case, the plan or
issuer must comply with the rules of
paragraph (a)(4) of this section by
informing each participant of the terms
of the plan or health insurance coverage
regarding designation of a primary care
provider.
(ii) Construction. Nothing in
paragraph (a)(1)(i) of this section is to be
construed to prohibit the application of
reasonable and appropriate geographic
limitations with respect to the selection
of primary care providers, in accordance
with the terms of the plan or coverage,
the underlying provider contracts, and
applicable State law.
(iii) Example. The rules of this
paragraph (a)(1) are illustrated by the
following example:
(A) Facts. A group health plan
requires individuals covered under the
plan to designate a primary care
provider. The plan permits each
individual to designate any primary care
provider participating in the plan’s
network who is available to accept the
individual as the individual’s primary
care provider. If an individual has not
designated a primary care provider, the
plan designates one until the individual
has made a designation. The plan
provides a notice that satisfies the
requirements of paragraph (a)(4) of this
section regarding the ability to designate
a primary care provider.
(B) Conclusion. In this Example, the
plan has satisfied the requirements of
paragraph (a) of this section.
(2) Designation of pediatrician as
primary care provider—(i) In general. If
a group health plan, or a health
insurance issuer offering group health
insurance coverage, requires or provides
for the designation of a participating
primary care provider for a child by a
participant or beneficiary, the plan or
issuer must permit the participant or
beneficiary to designate a physician
(allopathic or osteopathic) who
specializes in pediatrics (including
pediatric subspecialties, based on the
scope of that provider’s license under
applicable State law) as the child’s
primary care provider if the provider
participates in the network of the plan
or issuer and is available to accept the
child. In such a case, the plan or issuer
must comply with the rules of
paragraph (a)(4) of this section by
informing each participant (in the
individual market, primary subscriber)
of the terms of the plan or health
insurance coverage regarding
designation of a pediatrician as the
child’s primary care provider.
(ii) Construction. Nothing in
paragraph (a)(2)(i) of this section is to be
construed to waive any exclusions of

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coverage under the terms and
conditions of the plan or health
insurance coverage with respect to
coverage of pediatric care.
(iii) Examples. The rules of this
paragraph (a)(2) are illustrated by the
following examples:
(A) Example 1—(1) Facts. A group
health plan’s HMO designates for each
participant a physician who specializes
in internal medicine to serve as the
primary care provider for the participant
and any beneficiaries. Participant A
requests that Pediatrician B be
designated as the primary care provider
for A’s child. B is a participating
provider in the HMO’s network and is
available to accept the child.
(2) Conclusion. In this Example 1, the
HMO must permit A’s designation of B
as the primary care provider for A’s
child in order to comply with the
requirements of this paragraph (a)(2).
(B) Example 2—(1) Facts. Same facts
as Example 1 (paragraph (a)(2)(iii)(A) of
this section), except that A takes A’s
child to B for treatment of the child’s
severe shellfish allergies. B wishes to
refer A’s child to an allergist for
treatment. The HMO, however, does not
provide coverage for treatment of food
allergies, nor does it have an allergist
participating in its network, and it
therefore refuses to authorize the
referral.
(2) Conclusion. In this Example 2, the
HMO has not violated the requirements
of this paragraph (a)(2) because the
exclusion of treatment for food allergies
is in accordance with the terms of A’s
coverage.
(3) Patient access to obstetrical and
gynecological care—(i) General rights—
(A) Direct access. A group health plan,
or a health insurance issuer offering
group health insurance coverage,
described in paragraph (a)(3)(ii) of this
section, may not require authorization
or referral by the plan, issuer, or any
person (including a primary care
provider) in the case of a female
participant or beneficiary who seeks
coverage for obstetrical or gynecological
care provided by a participating health
care professional who specializes in
obstetrics or gynecology. In such a case,
the plan or issuer must comply with the
rules of paragraph (a)(4) of this section
by informing each participant that the
plan may not require authorization or
referral for obstetrical or gynecological
care by a participating health care
professional who specializes in
obstetrics or gynecology. The plan or
issuer may require such a professional
to agree to otherwise adhere to the
plan’s or issuer’s policies and
procedures, including procedures
regarding referrals and obtaining prior

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authorization and providing services
pursuant to a treatment plan (if any)
approved by the plan or issuer. For
purposes of this paragraph (a)(3), a
health care professional who specializes
in obstetrics or gynecology is any
individual (including a person other
than a physician) who is authorized
under applicable State law to provide
obstetrical or gynecological care.
(B) Obstetrical and gynecological
care. A group health plan or health
insurance issuer described in paragraph
(a)(3)(ii) of this section must treat the
provision of obstetrical and
gynecological care, and the ordering of
related obstetrical and gynecological
items and services, pursuant to the
direct access described under paragraph
(a)(3)(i)(A) of this section, by a
participating health care professional
who specializes in obstetrics or
gynecology as the authorization of the
primary care provider.
(ii) Application of paragraph. A group
health plan, or a health insurance issuer
offering group health insurance
coverage, is described in this paragraph
(a)(3) if the plan or issuer—
(A) Provides coverage for obstetrical
or gynecological care; and
(B) Requires the designation by a
participant or beneficiary of a
participating primary care provider.
(iii) Construction. Nothing in
paragraph (a)(3)(i) of this section is to be
construed to—
(A) Waive any exclusions of coverage
under the terms and conditions of the
plan or health insurance coverage with
respect to coverage of obstetrical or
gynecological care; or
(B) Preclude the group health plan or
health insurance issuer involved from
requiring that the obstetrical or
gynecological provider notify the
primary care health care professional or
the plan or issuer of treatment
decisions.
(iv) Examples. The rules of this
paragraph (a)(3) are illustrated by the
following examples:
(A) Example 1—(1) Facts. A group
health plan requires each participant to
designate a physician to serve as the
primary care provider for the participant
and the participant’s family. Participant
A, a female, requests a gynecological
exam with Physician B, an in-network
physician specializing in gynecological
care. The group health plan requires
prior authorization from A’s designated
primary care provider for the
gynecological exam.
(2) Conclusion. In this Example 1, the
group health plan has violated the
requirements of this paragraph (a)(3)
because the plan requires prior
authorization from A’s primary care

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36969

provider prior to obtaining
gynecological services.
(B) Example 2—(1) Facts. Same facts
as Example 1 (paragraph (a)(3)(iv)(A) of
this section) except that A seeks
gynecological services from C, an out-ofnetwork provider.
(2) Conclusion. In this Example 2, the
group health plan has not violated the
requirements of this paragraph (a)(3) by
requiring prior authorization because C
is not a participating health care
provider.
(C) Example 3—(1) Facts. Same facts
as Example 1 (paragraph (a)(3)(iv)(A) of
this section) except that the group
health plan only requires B to inform
A’s designated primary care physician
of treatment decisions.
(2) Conclusion. In this Example 3, the
group health plan has not violated the
requirements of this paragraph (a)(3)
because A has direct access to B without
prior authorization. The fact that the
group health plan requires the
designated primary care physician to be
notified of treatment decisions does not
violate this paragraph (a)(3).
(D) Example 4—(1) Facts. A group
health plan requires each participant to
designate a physician to serve as the
primary care provider for the participant
and the participant’s family. The group
health plan requires prior authorization
before providing benefits for uterine
fibroid embolization.
(2) Conclusion. In this Example 4, the
plan requirement for prior authorization
before providing benefits for uterine
fibroid embolization does not violate the
requirements of this paragraph (a)(3)
because, though the prior authorization
requirement applies to obstetrical
services, it does not restrict access to
any providers specializing in obstetrics
or gynecology.
(4) Notice of right to designate a
primary care provider—(i) In general. If
a group health plan or health insurance
issuer requires the designation by a
participant or beneficiary of a primary
care provider, the plan or issuer must
provide a notice informing each
participant (in the individual market,
primary subscriber) of the terms of the
plan or health insurance coverage
regarding designation of a primary care
provider and of the rights—
(A) Under paragraph (a)(1)(i) of this
section, that any participating primary
care provider who is available to accept
the participant or beneficiary can be
designated;
(B) Under paragraph (a)(2)(i) of this
section, with respect to a child, that any
participating physician who specializes
in pediatrics can be designated as the
primary care provider; and

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(C) Under paragraph (a)(3)(i) of this
section, that the plan may not require
authorization or referral for obstetrical
or gynecological care by a participating
health care professional who specializes
in obstetrics or gynecology.
(ii) Timing. In the case of a group
health plan or group health insurance
coverage, the notice described in
paragraph (a)(4)(i) of this section must
be included whenever the plan or issuer
provides a participant with a summary
plan description or other similar
description of benefits under the plan or
health insurance coverage. In the case of
individual health insurance coverage,
the notice described in paragraph
(a)(4)(i) of this section must be included
whenever the issuer provides a primary
subscriber with a policy, certificate, or
contract of health insurance.
(iii) Model language. The following
model language can be used to satisfy
the notice requirement described in
paragraph (a)(4)(i) of this section:
(A) For plans and issuers that require
or allow for the designation of primary
care providers by participants, or
beneficiaries, insert:
[Name of group health plan or health
insurance issuer] generally [requires/allows]
the designation of a primary care provider.
You have the right to designate any primary
care provider who participates in our
network and who is available to accept you
or your family members. [If the plan or health
insurance coverage designates a primary care
provider automatically, insert: Until you
make this designation, [name of group health
plan or health insurance issuer] designates
one for you.] For information on how to
select a primary care provider, and for a list
of the participating primary care providers,
contact the [plan administrator or issuer] at
[insert contact information].

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(B) For plans and issuers that require
or allow for the designation of a primary
care provider for a child, add:
For children, you may designate a
pediatrician as the primary care
provider.
(C) For plans and issuers that provide
coverage for obstetric or gynecological
care and require the designation by a
participant or beneficiary of a primary
care provider, add:
You do not need prior authorization from
[name of group health plan or issuer] or from
any other person (including a primary care
provider) in order to obtain access to
obstetrical or gynecological care from a
health care professional in our network who
specializes in obstetrics or gynecology. The
health care professional, however, may be
required to comply with certain procedures,
including obtaining prior authorization for
certain services, following a pre-approved
treatment plan, or procedures for making
referrals. For a list of participating health
care professionals who specialize in

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obstetrics or gynecology, contact the [plan
administrator or issuer] at [insert contact
information].

(b) Applicability date. The provisions
of this section are applicable with
respect to plan years beginning on or
after January 1, 2022.
Department of Health and Human
Services
45 CFR Subtitle A, Subchapter B
For the reasons stated in the
preamble, the Department of Health and
Human Services amends 45 CFR parts
144, 147, 149, and 156 as set forth
below:
PART 144—REQUIREMENTS
RELATING TO HEALTH INSURANCE
COVERAGE
12. The authority citation for part 144
is revised to read as follows:

■

Authority: 42 U.S.C. 300gg through 300gg–
63, 300gg–91, 300gg–92, and 300gg–111
through 300gg–139, as amended.

13. Section 144.101 is amended by:
a. Redesignating paragraphs (d) and
(e) as paragraphs (e) and (f),
respectively; and
■ b. Adding new paragraph (d).
The addition reads as follows:
■
■

§ 144.101

*
*
*
*
(d) Part 149 of this subchapter
implements the provisions of parts D
and E of title XXVII of the PHS Act that
apply to group health plans, health
insurance issuers in the group and
individual markets, health care
providers and facilities, and providers
of air ambulance services.
*
*
*
*
*
■ 14. Section 144.102 is revised to read
as follows:
Scope and applicability.

(a) For purposes of 45 CFR parts 144
through 149, all health insurance
coverage is generally divided into two
markets—the group market and the
individual market. The group market is
further divided into the large group
market and the small group market.
(b) The protections afforded under 45
CFR parts 144 through 149 to
individuals and employers (and other
sponsors of health insurance offered in
connection with a group health plan)
are determined by whether the coverage
involved is obtained in the small group
market, the large group market, or the
individual market.
(c) Coverage that is provided to
associations, but not related to
employment, and sold to individuals is
not considered group coverage under 45

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§ 144.103

Definitions.

For purposes of parts 146 (group
market), 147 (group and individual
market), 148 (individual market), 149
(surprise billing and transparency), and
150 (enforcement) of this subchapter,
the following definitions apply unless
otherwise provided:
*
*
*
*
*

Basis and purpose.

*

§ 144.102

CFR parts 144 through 149. If the
coverage is offered to an association
member other than in connection with
a group health plan, the coverage is
considered individual health insurance
coverage for purposes of 45 CFR parts
144 through 149. The coverage is
considered coverage in the individual
market, regardless of whether it is
considered group coverage under state
law. If the health insurance coverage is
offered in connection with a group
health plan as defined at 45 CFR
144.103, it is considered group health
insurance coverage for purposes of 45
CFR parts 144 through 149.
(d) Provisions relating to CMS
enforcement of parts 146, 147, 148, and
149 are contained in part 150 of this
subchapter.
■ 15. Section 144.103 is amended by
revising the introductory text to read as
follows:

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PART 147—HEALTH INSURANCE
REFORM REQUIREMENTS FOR THE
GROUP AND INDIVIDUAL HEALTH
INSURANCE MARKETS
16. The authority citation for part 147
is revised to read as follows:

■

Authority: 42 U.S.C. 300gg through 300gg–
63, 300gg–91, 300gg–92, and 300gg–111
through 300gg–139, as amended, and section
3203, Pub. L. 116–136, 134 Stat. 281.

17. Section 147.138 is amended by
revising paragraph (c) to read as follows:

■

§ 147.138

Patient protections.

*

*
*
*
*
(c) Applicability date. The provisions
of this section are applicable to group
health plans and health insurance
issuers for plan years (in the individual
market, policy years) beginning before
January 1, 2022. See also subparts B and
D of part 149 of this subchapter for rules
applicable with respect to plan years (in
the individual market, policy years)
beginning on or after January 1, 2022.
■ 18. Add part 149 to read as follows:
PART 149—SURPRISE BILLING AND
TRANSPARENCY REQUIREMENTS
Subpart A—General Provisions
Sec.
149.10 Basis and scope.
149.20 Applicability.

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149.30

Definitions.

Subpart B—Protections against Balance
Billing for the Group and Individual Health
Insurance Markets
149.110 Preventing surprise medical bills
for emergency services.
149.120 Preventing surprise medical bills
for non-emergency services performed by
nonparticipating providers at certain
participating facilities.
149.130 Preventing surprise medical bills
for air ambulance services.
149.140 Methodology for calculating
qualifying payment amount.
149.150 Complaints process for surprise
medical bills regarding group health
plans and group and individual health
insurance coverage.
Subpart C—[Reserved]
Subpart D—Additional Patient Protections
149.310 Choice of health care professional.
Subpart E—Health Care Provider, Health
Care Facility, and Air Ambulance Service
Provider Requirements
149.410 Balance billing in cases of
emergency services.
149.420 Balance billing in cases of nonemergency services performed by
nonparticipating providers at certain
participating health care facilities.
149.430 Provider and facility disclosure
requirements regarding patient
protections against balance billing.
149.440 Balance billing in cases of air
ambulance services.
149.450 Complaints process for balance
billing regarding providers and facilities.
Authority: 42 U.S.C. 300gg–111 through
300gg–139, as amended.

Subpart A—General Provisions
§ 149.10

Basis and scope.

(a) Basis. This part implements parts
D and E of title XXVII of the PHS Act.
(b) Scope. This part establishes
standards for group health plans, health
insurance issuers offering group or
individual health insurance coverage,
health care providers and facilities, and
providers of air ambulance services with
respect to surprise medical bills,
transparency in health care coverage,
and additional patient protections.

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§ 149.20

Applicability.

(a) In general. (1) The requirements in
subparts B and D of this part apply to
group health plans and health insurance
issuers offering group or individual
health insurance coverage (including
grandfathered health plans as defined in
§ 147.140 of this subchapter), except as
specified in paragraph (b) of this
section.
(2) The requirements in subpart E of
this part apply to health care providers,
health care facilities, and providers of
air ambulance services.

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(b) Exceptions. The requirements in
subparts B and D of this part do not
apply to the following:
(1) Excepted benefits as described in
§§ 146.145 and 148.220 of this
subchapter.
(2) Short-term, limited-duration
insurance as defined in § 144.103 of this
subchapter.
(3) Health reimbursement
arrangements or other account-based
group health plans as described in
§ 147.126(d) of this subchapter.
§ 149.30

Definitions.

The definitions in part 144 of this
subchapter apply to this part, unless
otherwise specified. In addition, for
purposes of this part, the following
definitions apply:
Air ambulance service means medical
transport by a rotary wing air
ambulance, as defined in 42 CFR
414.605, or fixed wing air ambulance, as
defined in 42 CFR 414.605, for patients.
Cost sharing means the amount a
participant, beneficiary, or enrollee is
responsible for paying for a covered
item or service under the terms of the
group health plan or health insurance
coverage. Cost sharing generally
includes copayments, coinsurance, and
amounts paid towards deductibles, but
does not include amounts paid towards
premiums, balance billing by out-ofnetwork providers, or the cost of items
or services that are not covered under a
group health plan or health insurance
coverage.
Emergency department of a hospital
includes a hospital outpatient
department that provides emergency
services.
Emergency medical condition has the
meaning given the term in
§ 149.110(c)(1).
Emergency services has the meaning
given the term in § 149.110(c)(2).
Health care facility, with respect to a
group health plan or group or individual
health insurance coverage, in the
context of non-emergency services, is
each of the following:
(1) A hospital (as defined in section
1861(e) of the Social Security Act);
(2) A hospital outpatient department;
(3) A critical access hospital (as
defined in section 1861(mm)(1) of the
Social Security Act); and
(4) An ambulatory surgical center
described in section 1833(i)(1)(A) of the
Social Security Act.
Independent freestanding emergency
department means a health care facility
(not limited to those described in the
definition of health care facility with
respect to non-emergency services)
that—

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(1) Is geographically separate and
distinct and licensed separately from a
hospital under applicable State law; and
(2) Provides any emergency services
as described in § 149.110(c)(2)(i).
Nonparticipating emergency facility
means an emergency department of a
hospital, or an independent freestanding
emergency department (or a hospital,
with respect to services that pursuant to
§ 149.110(c)(2)(ii) are included as
emergency services), that does not have
a contractual relationship directly or
indirectly with a group health plan or
group or individual health insurance
coverage offered by a health insurance
issuer, with respect to the furnishing of
an item or service under the plan or
coverage, respectively.
Nonparticipating provider means any
physician or other health care provider
who does not have a contractual
relationship directly or indirectly with a
group health plan or group or individual
health insurance coverage offered by a
health insurance issuer, with respect to
the furnishing of an item or service
under the plan or coverage, respectively.
Notice of denial of payment means,
with respect to an item or service for
which benefits subject to the protections
of §§ 149.110 through 149.130 are
provided or covered, a written notice
from the plan or issuer to the health care
provider, facility, or provider of air
ambulance services, as applicable, that
payment for such item or service will
not be made by the plan or coverage and
which explains the reason for denial.
The term notice of denial of payment
does not include a notice of benefit
denial due to an adverse benefit
determination as defined in 29 CFR
2560.503–1.
Out-of-network rate means, with
respect to an item or service furnished
by a nonparticipating provider,
nonparticipating emergency facility, or
nonparticipating provider of air
ambulance services—
(1) Subject to paragraph (3) of this
definition, in a State that has in effect
a specified State law, the amount
determined in accordance with such
law;
(2) Subject to paragraph (3) of this
definition, in a State that does not have
in effect a specified State law—
(i) Subject to paragraph (2)(ii) of this
definition, if the nonparticipating
provider or nonparticipating emergency
facility and the plan or issuer agree on
an amount of payment (including if the
amount agreed upon is the initial
payment sent by the plan or issuer
under 26 CFR 54.9816–4T(b)(3)(iv)(A),
54.9816–5T(c)(3), or 54.9817–1T(b)(4)(i);
29 CFR 2590.716–4(b)(3)(iv)(A),
2590.716–5(c)(3), or 2590.717–1(b)(4)(i);

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or § 149.110(b)(3)(iv)(A), § 149.120(c)(3),
or § 149.130(b)(4)(i), as applicable, or is
agreed on through negotiations with
respect to such item or service), such
agreed on amount; or
(ii) If the nonparticipating provider or
nonparticipating emergency facility and
the plan or issuer enter into the
independent dispute resolution (IDR)
process under section 9816(c) or 9817(b)
of the Internal Revenue Code, section
716(c) or 717(b) of ERISA, or section
2799A–1(c) or 2799A–2(b) of the PHS
Act, as applicable, and do not agree
before the date on which a certified IDR
entity makes a determination with
respect to such item or service under
such subsection, the amount of such
determination; or
(3) In a State that has an All-Payer
Model Agreement under section 1115A
of the Social Security Act that applies
with respect to the plan or issuer; the
nonparticipating provider or
nonparticipating emergency facility; and
the item or service, the amount that the
State approves under the All-Payer
Model Agreement for the item or
service.
Participating emergency facility
means any emergency department of a
hospital, or an independent freestanding
emergency department (or a hospital,
with respect to services that pursuant to
§ 149.110(c)(2)(ii) are included as
emergency services), that has a
contractual relationship directly or
indirectly with a group health plan or
health insurance issuer offering group or
individual health insurance coverage
setting forth the terms and conditions
on which a relevant item or service is
provided to a participant, beneficiary, or
enrollee under the plan or coverage,
respectively. A single case agreement
between an emergency facility and a
plan or issuer that is used to address
unique situations in which a
participant, beneficiary, or enrollee
requires services that typically occur
out-of-network constitutes a contractual
relationship for purposes of this
definition, and is limited to the parties
to the agreement.
Participating health care facility
means any health care facility described
in this section that has a contractual
relationship directly or indirectly with a
group health plan or health insurance
issuer offering group or individual
health insurance coverage setting forth
the terms and conditions on which a
relevant item or service is provided to
a participant, beneficiary, or enrollee
under the plan or coverage, respectively.
A single case agreement between a
health care facility and a plan or issuer
that is used to address unique situations
in which a participant, beneficiary, or

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enrollee requires services that typically
occur out-of-network constitutes a
contractual relationship for purposes of
this definition, and is limited to the
parties to the agreement.
Participating provider means any
physician or other health care provider
who has a contractual relationship
directly or indirectly with a group
health plan or health insurance issuer
offering group or individual health
insurance coverage setting forth the
terms and conditions on which a
relevant item or service is provided to
a participant, beneficiary, or enrollee
under the plan or coverage, respectively.
Physician or health care provider
means a physician or other health care
provider who is acting within the scope
of practice of that provider’s license or
certification under applicable State law,
but does not include a provider of air
ambulance services.
Provider of air ambulance services
means an entity that is licensed under
applicable State and Federal law to
provide air ambulance services.
Same or similar item or service has
the meaning given the term in
§ 149.140(a)(13).
Service code has the meaning given
the term in § 149.140(a)(14).
Qualifying payment amount has the
meaning given the term in
§ 149.140(a)(16).
Recognized amount means, with
respect to an item or service furnished
by a nonparticipating provider or
nonparticipating emergency facility—
(1) Subject to paragraph (3) of this
definition, in a State that has in effect
a specified State law, the amount
determined in accordance with such
law.
(2) Subject to paragraph (3) of this
definition, in a State that does not have
in effect a specified State law, the lesser
of—
(i) The amount that is the qualifying
payment amount (as determined in
accordance with § 149.140); or
(ii) The amount billed by the provider
or facility.
(3) In a State that has an All-Payer
Model Agreement under section 1115A
of the Social Security Act that applies
with respect to the plan or issuer; the
nonparticipating provider or
nonparticipating emergency facility; and
the item or service, the amount that the
State approves under the All-Payer
Model Agreement for the item or
service.
Specified State law means a State law
that provides for a method for
determining the total amount payable
under a group health plan or group or
individual health insurance coverage
offered by a health insurance issuer to

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the extent such State law applies for an
item or service furnished by a
nonparticipating provider or
nonparticipating emergency facility
(including where it applies because the
State has allowed a plan that is not
otherwise subject to applicable State
law an opportunity to opt in, subject to
section 514 of the Employee Retirement
Income Security Act of 1974). A group
health plan that opts in to such a
specified State law must do so for all
items and services to which the
specified State law applies and in a
manner determined by the applicable
State authority, and must prominently
display in its plan materials describing
the coverage of out-of-network services
a statement that the plan has opted into
the specified State law, identify the
relevant State (or States), and include a
general description of the items and
services provided by nonparticipating
facilities and providers that are covered
by the specified State law.
State means each of the 50 States, the
District of Columbia, Puerto Rico, the
Virgin Islands, Guam, American Samoa,
and the Northern Mariana Islands.
Treating provider is a physician or
health care provider who has evaluated
the individual.
Visit, with respect to items and
services furnished to an individual at a
health care facility, includes, in
addition to items and services furnished
by a provider at the facility, equipment
and devices, telemedicine services,
imaging services, laboratory services,
and preoperative and postoperative
services, regardless of whether the
provider furnishing such items or
services is at the facility.
Subpart B—Protections Against
Balance Billing for the Group and
Individual Health Insurance Markets
§ 149.110 Preventing surprise medical bills
for emergency services.

(a) In general. If a group health plan,
or a health insurance issuer offering
group or individual health insurance
coverage, provides or covers any
benefits with respect to services in an
emergency department of a hospital or
with respect to emergency services in an
independent freestanding emergency
department, the plan or issuer must
cover emergency services, as defined in
paragraph (c)(2) of this section, and this
coverage must be provided in
accordance with paragraph (b) of this
section.
(b) Coverage requirements. A plan or
issuer described in paragraph (a) of this
section must provide coverage for
emergency services in the following
manner—

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(1) Without the need for any prior
authorization determination, even if the
services are provided on an out-ofnetwork basis.
(2) Without regard to whether the
health care provider furnishing the
emergency services is a participating
provider or a participating emergency
facility, as applicable, with respect to
the services.
(3) If the emergency services are
provided by a nonparticipating provider
or a nonparticipating emergency
facility—
(i) Without imposing any
administrative requirement or limitation
on coverage that is more restrictive than
the requirements or limitations that
apply to emergency services received
from participating providers and
participating emergency facilities.
(ii) Without imposing cost-sharing
requirements that are greater than the
requirements that would apply if the
services were provided by a
participating provider or a participating
emergency facility.
(iii) By calculating the cost-sharing
requirement as if the total amount that
would have been charged for the
services by such participating provider
or participating emergency facility were
equal to the recognized amount for such
services.
(iv) The plan or issuer—
(A) Not later than 30 calendar days
after the bill for the services is
transmitted by the provider or facility
(or, in cases where the recognized
amount is determined by a specified
State law or All-Payer Model
Agreement, such other timeframe as
specified by the State law or All-Payer
Model Agreement), determines whether
the services are covered under the plan
or coverage and, if the services are
covered, sends to the provider or
facility, as applicable, an initial
payment or a notice of denial of
payment. For purposes of this paragraph
(b)(3)(iv)(A), the 30-calendar-day period
begins on the date the plan or issuer
receives the information necessary to
decide a claim for payment for the
services.
(B) Pays a total plan or coverage
payment directly to the nonparticipating
provider or nonparticipating facility that
is equal to the amount by which the outof-network rate for the services exceeds
the cost-sharing amount for the services
(as determined in accordance with
paragraphs (b)(3)(ii) and (iii) of this
section), less any initial payment
amount made under paragraph
(b)(3)(iv)(A) of this section. The total
plan or coverage payment must be made
in accordance with the timing
requirement described in section

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2799A–1(c)(6) of the PHS Act, or in
cases where the out-of-network rate is
determined under a specified State law
or All-Payer Model Agreement, such
other timeframe as specified by the State
law or All-Payer Model Agreement.
(v) By counting any cost-sharing
payments made by the participant,
beneficiary, or enrollee with respect to
the emergency services toward any innetwork deductible or in-network outof-pocket maximums (including the
annual limitation on cost sharing under
section 2707(b) of the PHS Act) (as
applicable) applied under the plan or
coverage (and the in-network deductible
and in-network out-of-pocket
maximums must be applied) in the same
manner as if the cost-sharing payments
were made with respect to emergency
services furnished by a participating
provider or a participating emergency
facility.
(4) Without limiting what constitutes
an emergency medical condition (as
defined in paragraph (c)(1) of this
section) solely on the basis of diagnosis
codes.
(5) Without regard to any other term
or condition of the coverage, other
than—
(i) The exclusion or coordination of
benefits (to the extent not inconsistent
with benefits for an emergency medical
condition, as defined in paragraph (c)(1)
of this section).
(ii) An affiliation or waiting period
(each as defined in § 144.103 of this
subchapter).
(iii) Applicable cost sharing.
(c) Definitions. In this section—
(1) Emergency medical condition
means a medical condition, including a
mental health condition or substance
use disorder, manifesting itself by acute
symptoms of sufficient severity
(including severe pain) such that a
prudent layperson, who possesses an
average knowledge of health and
medicine, could reasonably expect the
absence of immediate medical attention
to result in a condition described in
clause (i), (ii), or (iii) of section
1867(e)(1)(A) of the Social Security Act
(42 U.S.C. 1395dd(e)(1)(A)). (In that
provision of the Social Security Act,
clause (i) refers to placing the health of
the individual (or, with respect to a
pregnant woman, the health of the
woman or her unborn child) in serious
jeopardy; clause (ii) refers to serious
impairment to bodily functions; and
clause (iii) refers to serious dysfunction
of any bodily organ or part.)
(2) Emergency services means, with
respect to an emergency medical
condition—
(i) In general. (A) An appropriate
medical screening examination (as

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36973

required under section 1867 of the
Social Security Act (42 U.S.C. 1395dd)
or as would be required under such
section if such section applied to an
independent freestanding emergency
department) that is within the capability
of the emergency department of a
hospital or of an independent
freestanding emergency department, as
applicable, including ancillary services
routinely available to the emergency
department to evaluate such emergency
medical condition; and
(B) Within the capabilities of the staff
and facilities available at the hospital or
the independent freestanding
emergency department, as applicable,
such further medical examination and
treatment as are required under section
1867 of the Social Security Act (42
U.S.C. 1395dd), or as would be required
under such section if such section
applied to an independent freestanding
emergency department, to stabilize the
patient (regardless of the department of
the hospital in which such further
examination or treatment is furnished).
(ii) Inclusion of additional services.
(A) Subject to paragraph (c)(2)(ii)(B) of
this section, items and services—
(1) For which benefits are provided or
covered under the plan or coverage; and
(2) That are furnished by a
nonparticipating provider or
nonparticipating emergency facility
(regardless of the department of the
hospital in which such items or services
are furnished) after the participant,
beneficiary, or enrollee is stabilized and
as part of outpatient observation or an
inpatient or outpatient stay with respect
to the visit in which the services
described in paragraph (c)(2)(i) of this
section are furnished.
(B) Items and services described in
paragraph (c)(2)(ii)(A) of this section are
not included as emergency services if all
of the conditions in § 149.410(b) are
met.
(3) To stabilize, with respect to an
emergency medical condition, has the
meaning given such term in section
1867(e)(3) of the Social Security Act (42
U.S.C. 1395dd(e)(3)).
(d) Applicability date. The provisions
of this section are applicable with
respect to plan years (in the individual
market, policy years) beginning on or
after January 1, 2022.
§ 149.120 Preventing surprise medical bills
for non-emergency services performed by
nonparticipating providers at certain
participating facilities.

(a) In general. If a group health plan,
or a health insurance issuer offering
group or individual health insurance
coverage, provides or covers any
benefits with respect to items and

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services described in paragraph (b) of
this section, the plan or issuer must
cover the items and services when
furnished by a nonparticipating
provider in accordance with paragraph
(c) of this section.
(b) Items and services described. The
items and services described in this
paragraph (b) are items and services
(other than emergency services)
furnished to a participant, beneficiary,
or enrollee by a nonparticipating
provider with respect to a visit at a
participating health care facility, unless
the provider has satisfied the notice and
consent criteria of § 149.420(c) through
(i) with respect to such items and
services.
(c) Coverage requirements. In the case
of items and services described in
paragraph (b) of this section, the plan or
issuer—
(1) Must not impose a cost-sharing
requirement for the items and services
that is greater than the cost-sharing
requirement that would apply if the
items or services had been furnished by
a participating provider.
(2) Must calculate the cost-sharing
requirements as if the total amount that
would have been charged for the items
and services by such participating
provider were equal to the recognized
amount for the items and services.
(3) Not later than 30 calendar days
after the bill for the items or services is
transmitted by the provider (or in cases
where the recognized amount is
determined by a specified State law or
All-Payer Model Agreement, such other
timeframe as specified under the State
law or All-Payer Model Agreement),
must determine whether the items and
services are covered under the plan or
coverage and, if the items and services
are covered, send to the provider an
initial payment or a notice of denial of
payment. For purposes of this paragraph
(c)(3), the 30-calendar-day period begins
on the date the plan or issuer receives
the information necessary to decide a
claim for payment for the items or
services.
(4) Must pay a total plan or coverage
payment directly to the nonparticipating
provider that is equal to the amount by
which the out-of-network rate for the
items and services involved exceeds the
cost-sharing amount for the items and
services (as determined in accordance
with paragraphs (c)(1) and (2) of this
section), less any initial payment
amount made under paragraph (c)(3) of
this section. The total plan or coverage
payment must be made in accordance
with the timing requirement described
in section 2799A–1(c)(6) of the PHS Act,
or in cases where the out-of-network
rate is determined under a specified

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State law or All-Payer Model
Agreement, such other timeframe as
specified by the State law or All-Payer
Model Agreement.
(5) Must count any cost-sharing
payments made by the participant,
beneficiary, or enrollee toward any innetwork deductible and in-network outof-pocket maximums (including the
annual limitation on cost sharing under
section 2707(b) of the PHS Act) (as
applicable) applied under the plan or
coverage (and the in-network deductible
and out-of-pocket maximums must be
applied) in the same manner as if such
cost-sharing payments were made with
respect to items and services furnished
by a participating provider.
(d) Applicability date. The provisions
of this section are applicable with
respect to plan years (in the individual
market, policy years) beginning on or
after January 1, 2022.
§ 149.130 Preventing surprise medical bills
for air ambulance services.

(a) In general. If a group health plan,
or a health insurance issuer offering
group or individual health insurance
coverage, provides or covers any
benefits for air ambulance services, the
plan or issuer must cover such services
from a nonparticipating provider of air
ambulance services in accordance with
paragraph (b) of this section.
(b) Coverage requirements. A plan or
issuer described in paragraph (a) of this
section must provide coverage of air
ambulance services in the following
manner—
(1) The cost-sharing requirements
with respect to the services must be the
same requirements that would apply if
the services were provided by a
participating provider of air ambulance
services.
(2) The cost-sharing requirement must
be calculated as if the total amount that
would have been charged for the
services by a participating provider of
air ambulance services were equal to the
lesser of the qualifying payment amount
(as determined in accordance with
§ 149.140) or the billed amount for the
services.
(3) The cost-sharing amounts must be
counted towards any in-network
deductible and in-network out-of-pocket
maximums (including the annual
limitation on cost sharing under section
2707(b) of the PHS Act) (as applicable)
applied under the plan or coverage (and
the in-network deductible and out-ofpocket maximums must be applied) in
the same manner as if the cost-sharing
payments were made with respect to
services furnished by a participating
provider of air ambulance services.
(4) The plan or issuer must—

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(i) Not later than 30 calendar days
after the bill for the services is
transmitted by the provider of air
ambulance services, determine whether
the services are covered under the plan
or coverage and, if the services are
covered, send to the provider an initial
payment or a notice of denial of
payment. For purposes of this paragraph
(b)(4)(i), the 30-calendar-day period
begins on the date the plan or issuer
receives the information necessary to
decide a claim for payment for the
services.
(ii) Pay a total plan or coverage
payment directly to the nonparticipating
provider furnishing such air ambulance
services that is equal to the amount by
which the out-of-network rate for the
services exceeds the cost-sharing
amount for the services (as determined
in accordance with paragraphs (b)(1)
and (2) of this section), less any initial
payment amount made under paragraph
(b)(4)(i) of this section. The total plan or
coverage payment must be made in
accordance with the timing requirement
described in section 2799A–2(b)(6) of
the PHS Act, or in cases where the outof-network rate is determined under a
specified State law or All-Payer Model
Agreement, such other timeframe as
specified by the State law or All-Payer
Model Agreement.
(c) Applicability date. The provisions
of this section are applicable with
respect to plan years (in the individual
market, policy years) beginning on or
after January 1, 2022.
§ 149.140 Methodology for calculating
qualifying payment amount.

(a) Definitions. For purposes of this
section, the following definitions apply:
(1) Contracted rate means the total
amount (including cost sharing) that a
group health plan or health insurance
issuer has contractually agreed to pay a
participating provider, facility, or
provider of air ambulance services for
covered items and services, whether
directly or indirectly, including through
a third-party administrator or pharmacy
benefit manager. Solely for purposes of
this definition, a single case agreement,
letter of agreement, or other similar
arrangement between a provider,
facility, or air ambulance provider and
a plan or issuer, used to supplement the
network of the plan or coverage for a
specific participant, beneficiary, or
enrollee in unique circumstances, does
not constitute a contract.
(2) Derived amount has the meaning
given the term in § 147.210 of this
subchapter.
(3) Eligible database means—
(i) A State all-payer claims database;
or

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(ii) Any third-party database which—
(A) Is not affiliated with, or owned or
controlled by, any health insurance
issuer, or a health care provider, facility,
or provider of air ambulance services (or
any member of the same controlled
group as, or under common control
with, such an entity). For purposes of
this paragraph (a)(3)(ii)(A), the term
controlled group means a group of two
or more persons that is treated as a
single employer under sections 52(a),
52(b), 414(m), or 414(o) of the Internal
Revenue Code of 1986, as amended;
(B) Has sufficient information
reflecting in-network amounts paid by
group health plans or health insurance
issuers offering group or individual
health insurance coverage to providers,
facilities, or providers of air ambulance
services for relevant items and services
furnished in the applicable geographic
region; and
(C) Has the ability to distinguish
amounts paid to participating providers
and facilities by commercial payers,
such as group health plans and health
insurance issuers offering group or
individual health insurance coverage,
from all other claims data, such as
amounts billed by nonparticipating
providers or facilities and amounts paid
by public payers, including the
Medicare program under title XVIII of
the Social Security Act, the Medicaid
program under title XIX of the Social
Security Act (or a demonstration project
under title XI of the Social Security
Act), or the Children’s Health Insurance
Program under title XXI of the Social
Security Act.
(4) Facility of the same or similar
facility type means, with respect to
emergency services, either—
(i) An emergency department of a
hospital; or
(ii) An independent freestanding
emergency department.
(5) First coverage year means, with
respect to an item or service for which
coverage is not offered in 2019 under a
group health plan or group or individual
health insurance coverage offered by a
health insurance issuer, the first year
after 2019 for which coverage for such
item or service is offered under that
plan or coverage.
(6) First sufficient information year
means, with respect to a group health
plan or group or individual health
insurance coverage offered by a health
insurance issuer—
(i) In the case of an item or service for
which the plan or coverage does not
have sufficient information to calculate
the median of the contracted rates
described in paragraph (b) of this
section in 2019, the first year after 2022
for which the plan or issuer has

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sufficient information to calculate the
median of such contracted rates in the
year immediately preceding that first
year after 2022; and
(ii) In the case of a newly covered
item or service, the first year after the
first coverage year for such item or
service with respect to such plan or
coverage for which the plan or issuer
has sufficient information to calculate
the median of the contracted rates
described in paragraph (b) of this
section in the year immediately
preceding that first year.
(7) Geographic region means—
(i) For items and services other than
air ambulance services—
(A) Subject to paragraphs (a)(7)(i)(B)
and (C) of this section, one region for
each metropolitan statistical area, as
described by the U.S. Office of
Management and Budget and published
by the U.S. Census Bureau, in a State,
and one region consisting of all other
portions of the State.
(B) If a plan or issuer does not have
sufficient information to calculate the
median of the contracted rates described
in paragraph (b) of this section for an
item or service provided in a geographic
region described in paragraph
(a)(7)(i)(A) of this section, one region
consisting of all metropolitan statistical
areas, as described by the U.S. Office of
Management and Budget and published
by the U.S. Census Bureau, in the State,
and one region consisting of all other
portions of the State.
(C) If a plan or issuer does not have
sufficient information to calculate the
median of the contracted rates described
in paragraph (b) of this section for an
item or service provided in a geographic
region described in paragraph
(a)(7)(i)(B) of this section, one region
consisting of all metropolitan statistical
areas, as described by the U.S. Office of
Management and Budget and published
by the U.S. Census Bureau, in each
Census division and one region
consisting of all other portions of the
Census division, as described by the
U.S. Census Bureau.
(ii) For air ambulance services—
(A) Subject to paragraph (a)(7)(ii)(B) of
this section, one region consisting of all
metropolitan statistical areas, as
described by the U.S. Office of
Management and Budget and published
by the U.S. Census Bureau, in the State,
and one region consisting of all other
portions of the State, determined based
on the point of pick-up (as defined in 42
CFR 414.605).
(B) If a plan or issuer does not have
sufficient information to calculate the
median of the contracted rates described
in paragraph (b) of this section for an air
ambulance service provided in a

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geographic region described in
paragraph (a)(7)(ii)(A) of this section,
one region consisting of all metropolitan
statistical areas, as described by the U.S.
Office of Management and Budget and
published by the U.S. Census Bureau, in
each Census division and one region
consisting of all other portions of the
Census division, as described by the
U.S. Census Bureau, determined based
on the point of pick-up (as defined in 42
CFR 414.605).
(8) Insurance market is, irrespective
of the State, one of the following:
(i) The individual market (other than
short-term, limited-duration insurance
or individual health insurance coverage
that consists solely of excepted
benefits).
(ii) The large group market (other than
coverage that consists solely of excepted
benefits).
(iii) The small group market (other
than coverage that consists solely of
excepted benefits).
(iv) In the case of a self-insured group
health plan, all self-insured group
health plans (other than account-based
plans, as defined in § 147.126(d)(6)(i) of
this subchapter, and plans that consist
solely of excepted benefits) of the same
plan sponsor, or at the option of the
plan sponsor, all self-insured group
health plans administered by the same
entity (including a third-party
administrator contracted by the plan), to
the extent otherwise permitted by law,
that is responsible for calculating the
qualifying payment amount on behalf of
the plan.
(9) Modifiers mean codes applied to
the service code that provide a more
specific description of the furnished
item or service and that may adjust the
payment rate or affect the processing or
payment of the code billed.
(10) Newly covered item or service
means an item or service for which
coverage was not offered in 2019 under
a group health plan or group or
individual health insurance coverage
offered by a health insurance issuer, but
that is offered under the plan or
coverage in a year after 2019.
(11) New service code means a service
code that was created or substantially
revised in a year after 2019.
(12) Provider in the same or similar
specialty means the practice specialty of
a provider, as identified by the plan or
issuer consistent with the plan’s or
issuer’s usual business practice, except
that, with respect to air ambulance
services, all providers of air ambulance
services are considered to be a single
provider specialty.
(13) Same or similar item or service
means a health care item or service
billed under the same service code, or

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a comparable code under a different
procedural code system.
(14) Service code means the code that
describes an item or service using the
Current Procedural Terminology (CPT)
code, Healthcare Common Procedure
Coding System (HCPCS), or DiagnosisRelated Group (DRG) codes.
(15) Sufficient information means, for
purposes of determining whether a
group health plan or health insurance
issuer offering group or individual
health insurance coverage has sufficient
information to calculate the median of
the contracted rates described in
paragraph (b) of this section—
(i) The plan or issuer has at least three
contracted rates on January 31, 2019, to
calculate the median of the contracted
rates in accordance with paragraph (b)
of this section; or
(ii) For an item or service furnished
during a year after 2022 that is used to
determine the first sufficient
information year—
(A) The plan or issuer has at least
three contracted rates on January 31 of
the year immediately preceding that
year to calculate the median of the
contracted rates in accordance with
paragraph (b) of this section; and
(B) The contracted rates under
paragraph (a)(15)(ii)(A) of this section
account (or are reasonably expected to
account) for at least 25 percent of the
total number of claims paid for that item
or service for that year with respect to
all plans of the sponsor (or the
administering entity as provided in
paragraph (a)(8)(iv) of this section, if
applicable) or all coverage offered by the
issuer that are offered in the same
insurance market.
(16) Qualifying payment amount
means, with respect to a sponsor of a
group health plan or health insurance
issuer offering group or individual
health insurance coverage, the amount
calculated using the methodology
described in paragraph (c) of this
section.
(17) Underlying fee schedule rate
means the rate for a covered item or
service from a particular participating
provider, providers, or facility that a
group health plan or health insurance
issuer uses to determine a participant’s,
beneficiary’s, or enrollee’s cost-sharing
liability for the item or service, when
that rate is different from the contracted
rate.
(b) Methodology for calculation of
median contracted rate—(1) In general.
The median contracted rate for an item
or service is calculated by arranging in
order from least to greatest the
contracted rates of all group health
plans of the plan sponsor (or the
administering entity as provided in

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paragraph (a)(8)(iv) of this section, if
applicable) or all group or individual
health insurance coverage offered by the
issuer in the same insurance market for
the same or similar item or service that
is provided by a provider in the same
or similar specialty or facility of the
same or similar facility type and
provided in the geographic region in
which the item or service is furnished
and selecting the middle number. If
there are an even number of contracted
rates, the median contracted rate is the
average of the middle two contracted
rates. In determining the median
contracted rate, the amount negotiated
under each contract is treated as a
separate amount. If a plan or issuer has
a contract with a provider group or
facility, the rate negotiated with that
provider group or facility under the
contract is treated as a single contracted
rate if the same amount applies with
respect to all providers of such provider
group or facility under the single
contract. However, if a plan or issuer
has a contract with multiple providers,
with separate negotiated rates with each
particular provider, each unique
contracted rate with an individual
provider constitutes a single contracted
rate. Further, if a plan or issuer has
separate contracts with individual
providers, the contracted rate under
each such contract constitutes a single
contracted rate (even if the same amount
is paid to multiple providers under
separate contracts).
(2) Calculation rules. In calculating
the median contracted rate, a plan or
issuer must:
(i) Calculate the median contracted
rate with respect to all plans of such
sponsor (or the administering entity as
provided in paragraph (a)(8)(iv) of this
section, if applicable) or all coverage
offered by such issuer that are offered in
the same insurance market;
(ii) Calculate the median contracted
rate using the full contracted rate
applicable to the service code, except
that the plan or issuer must—
(A) Calculate separate median
contracted rates for CPT code modifiers
‘‘26’’ (professional component) and
‘‘TC’’ (technical component);
(B) For anesthesia services, calculate
a median contracted rate for the
anesthesia conversion factor for each
service code;
(C) For air ambulance services,
calculate a median contracted rate for
the air mileage service codes (A0435
and A0436); and
(D) Where contracted rates otherwise
vary based on applying a modifier code,
calculate a separate median contracted
rate for each such service code-modifier
combination;

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(iii) In the case of payments made by
a plan or issuer that are not on a fee-forservice basis (such as bundled or
capitation payments), calculate a
median contracted rate for each item or
service using the underlying fee
schedule rates for the relevant items or
services. If the plan or issuer does not
have an underlying fee schedule rate for
the item or service, it must use the
derived amount to calculate the median
contracted rate; and
(iv) Exclude risk sharing, bonus,
penalty, or other incentive-based or
retrospective payments or payment
adjustments.
(3) Provider specialties; facility types.
(i) If a plan or issuer has contracted rates
that vary based on provider specialty for
a service code, the median contracted
rate is calculated separately for each
provider specialty, as applicable.
(ii) If a plan or issuer has contracted
rates for emergency services that vary
based on facility type for a service code,
the median contracted rate is calculated
separately for each facility of the same
or similar facility type.
(c) Methodology for calculation of the
qualifying payment amount—(1) In
general. (i) For an item or service (other
than items or services described in
paragraphs (c)(1)(iii) through (vii) of this
section) furnished during 2022, the plan
or issuer must calculate the qualifying
payment amount by increasing the
median contracted rate (as determined
in accordance with paragraph (b) of this
section) for the same or similar item or
service under such plans or coverage,
respectively, on January 31, 2019, by the
combined percentage increase as
published by the Department of the
Treasury and the Internal Revenue
Service to reflect the percentage
increase in the CPI–U over 2019, such
percentage increase over 2020, and such
percentage increase over 2021.
(A) The combined percentage increase
for 2019, 2020, and 2021 will be
published in guidance by the Internal
Revenue Service. The Department of the
Treasury and the Internal Revenue
Service will calculate the percentage
increase using the CPI–U published by
the Bureau of Labor Statistics of the
Department of Labor.
(B) For purposes of this paragraph
(c)(1)(i), the CPI–U for each calendar
year is the average of the CPI–U as of the
close of the 12-month period ending on
August 31 of the calendar year, rounded
to 10 decimal places.
(C) The combined percentage increase
for 2019, 2020, and 2021 will be
calculated as:
(CPI–U 2019/CPI–U 2018) × (CPI–U
2020/CPI–U 2019) × (CPI–U 2021/
CPI–U 2020)

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(ii) For an item or service (other than
items or services described in
paragraphs (c)(1)(iii) through (vii) of this
section) furnished during 2023 or a
subsequent year, the plan or issuer must
calculate the qualifying payment
amount by increasing the qualifying
payment amount determined under
paragraph (c)(1)(i) of this section, for
such an item or service furnished in the
immediately preceding year, by the
percentage increase as published by the
Department of the Treasury and the
Internal Revenue Service.
(A) The percentage increase for any
year after 2022 will be published in
guidance by the Internal Revenue
Service. The Department of the Treasury
and Internal Revenue Service will
calculate the percentage increase using
the CPI–U published by the Bureau of
Labor Statistics of the Department of
Labor.
(B) For purposes of this paragraph
(c)(1)(ii), the CPI–U for each calendar
year is the average of the CPI–U as of the
close of the 12-month period ending on
August 31 of the calendar year, rounded
to 10 decimal places.
(C) The combined percentage increase
for any year will be calculated as CPI–
U present year/CPI–U prior year.
(iii) For anesthesia services furnished
during 2022, the plan or issuer must
calculate the qualifying payment
amount by first increasing the median
contracted rate for the anesthesia
conversion factor (as determined in
accordance with paragraph (b) of this
section) for the same or similar item or
service under such plans or coverage,
respectively, on January 31, 2019, in
accordance with paragraph (c)(1)(i) of
this section (referred to in this section
as the indexed median contracted rate
for the anesthesia conversion factor).
The plan or issuer must then multiply
the indexed median contracted rate for
the anesthesia conversion factor by the
sum of the base unit, time unit, and
physical status modifier units of the
participant, beneficiary, or enrollee to
whom anesthesia services are furnished
to determine the qualifying payment
amount.
(A) The base units for an anesthesia
service code are the base units for that
service code specified in the most recent
edition (as of the date of service) of the
American Society of Anesthesiologists
Relative Value Guide.
(B) The time unit is measured in 15minute increments or a fraction thereof.
(C) The physical status modifier on a
claim is a standard modifier describing
the physical status of the patient and is
used to distinguish between various
levels of complexity of the anesthesia
services provided, and is expressed as a

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unit with a value between zero (0) and
three (3).
(D) The anesthesia conversion factor
is expressed in dollars per unit and is
a contracted rate negotiated with the
plan or issuer.
(iv) For anesthesia services furnished
during 2023 or a subsequent year, the
plan or issuer must calculate the
qualifying payment amount by first
increasing the indexed median
contracted rate for the anesthesia
conversion factor, determined under
paragraph (c)(1)(iii) of this section for
such services furnished in the
immediately preceding year, in
accordance with paragraph (c)(1)(ii) of
this section. The plan or issuer must
then multiply that amount by the sum
of the base unit, time unit, and physical
status modifier units for the participant,
beneficiary, or enrollee to whom
anesthesia services are furnished to
determine the qualifying payment
amount.
(v) For air ambulance services billed
using the air mileage service codes
(A0435 and A0436) that are furnished
during 2022, the plan or issuer must
calculate the qualifying payment
amount for services billed using the air
mileage service codes by first increasing
the median contracted rate (as
determined in accordance with
paragraph (b) of this section), in
accordance with paragraph (c)(1)(i) of
this section (referred to in this section
as the indexed median air mileage rate).
The plan or issuer must then multiply
the indexed median air mileage rate by
the number of loaded miles provided to
the participant, beneficiary, or enrollee
to determine the qualifying payment
amount.
(A) The air mileage rate is expressed
in dollars per loaded mile flown, is
expressed in statute miles (not nautical
miles), and is a contracted rate
negotiated with the plan or issuer.
(B) The number of loaded miles is the
number of miles a patient is transported
in the air ambulance vehicle.
(C) The qualifying payment amount
for other service codes associated with
air ambulance services is calculated in
accordance with paragraphs (c)(1)(i) and
(ii) of this section.
(vi) For air ambulance services billed
using the air mileage service codes
(A0435 and A0436) that are furnished
during 2023 or a subsequent year, the
plan or issuer must calculate the
qualifying payment amount by first
increasing the indexed median air
mileage rate, determined under
paragraph (c)(1)(v) of this section for
such services furnished in the
immediately preceding year, in
accordance with paragraph (c)(1)(ii) of

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36977

this section. The plan or issuer must
then multiply the indexed median air
mileage rate by the number of loaded
miles provided to the participant,
beneficiary, or enrollee to determine the
qualifying payment amount.
(vii) For any other items or services
for which a plan or issuer generally
determines payment for the same or
similar items or services by multiplying
a contracted rate by another unit value,
the plan or issuer must calculate the
qualifying payment amount using a
methodology that is similar to the
methodology required under paragraphs
(c)(1)(iii) through (vi) of this section and
reasonably reflects the payment
methodology for same or similar items
or services.
(2) New plans and coverage. With
respect to a sponsor of a group health
plan or health insurance issuer offering
group or individual health insurance
coverage in a geographic region in
which the sponsor or issuer,
respectively, did not offer any group
health plan or health insurance coverage
during 2019—
(i) For the first year in which the
group health plan, group health
insurance coverage, or individual health
insurance coverage, respectively, is
offered in such region—
(A) If the plan or issuer has sufficient
information to calculate the median of
the contracted rates described in
paragraph (b) of this section, the plan or
issuer must calculate the qualifying
payment amount in accordance with
paragraph (c)(1) of this section for items
and services that are covered by the
plan or coverage and furnished during
the first year; and
(B) If the plan or issuer does not have
sufficient information to calculate the
median of the contracted rates described
in paragraph (b) of this section for an
item or service provided in a geographic
region, the plan or issuer must
determine the qualifying payment
amount for the item or service in
accordance with paragraph (c)(3)(i) of
this section.
(ii) For each subsequent year the
group health plan, group health
insurance coverage, or individual health
insurance coverage, respectively, is
offered in the region, the plan or issuer
must calculate the qualifying payment
amount by increasing the qualifying
payment amount determined under this
paragraph (c)(2) for the items and
services furnished in the immediately
preceding year, in accordance with
paragraph (c)(1)(ii), (iv), or (vi) of this
section, as applicable.
(3) Insufficient information; newly
covered items and services. In the case
of a plan or issuer that does not have

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sufficient information to calculate the
median of the contracted rates described
in paragraph (b) of this section in 2019
(or, in the case of a newly covered item
or service, in the first coverage year for
such item or service with respect to
such plan or coverage if the plan or
issuer does not have sufficient
information) for an item or service
provided in a geographic region—
(i) For an item or service furnished
during 2022 (or, in the case of a newly
covered item or service, during the first
coverage year for the item or service
with respect to the plan or coverage),
the plan or issuer must calculate the
qualifying payment amount by first
identifying the rate that is equal to the
median of the in-network allowed
amounts for the same or similar item or
service provided in the geographic
region in the year immediately
preceding the year in which the item or
service is furnished (or, in the case of a
newly covered item or service, the year
immediately preceding such first
coverage year) determined by the plan
or issuer, respectively, through use of
any eligible database, and then
increasing that rate by the percentage
increase in the CPI–U over such
preceding year. For purposes of this
section, in cases in which an eligible
database is used to determine the
qualifying payment amount with respect
to an item or service furnished during
a calendar year, the plan or issuer must
use the same database for determining
the qualifying payment amount for that
item or service furnished through the
last day of the calendar year, and if a
different database is selected for some
items or services, the basis for that
selection must be one or more factors
not directly related to the rate of those
items or services (such as sufficiency of
data for those items or services).
(ii) For an item or service furnished in
a subsequent year (before the first
sufficient information year for such item
or service with respect to such plan or
coverage), the plan or issuer must
calculate the qualifying payment
amount by increasing the qualifying
payment amount determined under
paragraph (c)(3)(i) of this section or this
paragraph (c)(3)(ii), as applicable, for
such item or service for the year
immediately preceding such subsequent
year, by the percentage increase in CPI–
U over such preceding year;
(iii) For an item or service furnished
in the first sufficient information year
for such item or service with respect to
such plan or coverage, the plan or issuer
must calculate the qualifying payment
amount in accordance with paragraph
(c)(1)(i), (iii), or (v) of this section, as
applicable, except that in applying such

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paragraph to such item or service, the
reference to ‘furnished during 2022’ is
treated as a reference to furnished
during such first sufficient information
year, the reference to ’in 2019’ is treated
as a reference to such sufficient
information year, and the increase
described in such paragraph is not
applied; and
(iv) For an item or service furnished
in any year subsequent to the first
sufficient information year for such item
or service with respect to such plan or
coverage, the plan or issuer must
calculate the qualifying payment
amount in accordance with paragraph
(c)(1)(ii), (iv), or (vi) of this section, as
applicable, except that in applying such
paragraph to such item or service, the
reference to ‘furnished during 2023 or a
subsequent year’ is treated as a reference
to furnished during the year after such
first sufficient information year or a
subsequent year.
(4) New service codes. In the case of
a plan or issuer that does not have
sufficient information to calculate the
median of the contracted rates described
in paragraph (b) of this section and
determine the qualifying payment
amount under paragraphs (c)(1) through
(3) of this section because the item or
service furnished is billed under a new
service code—
(i) For an item or service furnished
during 2022 (or, in the case of a newly
covered item or service, during the first
coverage year for the item or service
with respect to the plan or coverage),
the plan or issuer must identify a
reasonably related service code that
existed in the immediately preceding
year and—
(A) If the Centers for Medicare &
Medicaid Services has established a
Medicare payment rate for the item or
service billed under the new service
code, the plan or issuer must calculate
the qualifying payment amount by first
calculating the ratio of the rate that
Medicare pays for the item or service
billed under the new service code
compared to the rate that Medicare pays
for the item or service billed under the
related service code, and then
multiplying the ratio by the qualifying
payment amount for an item or service
billed under the related service code for
the year in which the item or service is
furnished.
(B) If the Centers for Medicare &
Medicaid Services has not established a
Medicare payment rate for the item or
service billed under the new service
code, the plan or issuer must calculate
the qualifying payment amount by first
calculating the ratio of the rate that the
plan or issuer reimburses for the item or
service billed under the new service

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code compared to the rate that the plan
or issuer reimburses for the item or
service billed under the related service
code, and then multiplying the ratio by
the qualifying payment amount for an
item or service billed under the related
service code.
(ii) For an item or service furnished in
a subsequent year (before the first
sufficient information year for such item
or service with respect to such plan or
coverage or before the first year for
which an eligible database has sufficient
information to a calculate a rate under
paragraph (c)(3)(i) of this section in the
immediately preceding year), the plan
or issuer must calculate the qualifying
payment amount by increasing the
qualifying payment amount determined
under paragraph (c)(4)(i) of this section
or this paragraph (c)(4)(ii), as applicable,
for such item or service for the year
immediately preceding such subsequent
year, by the percentage increase in CPI–
U over such preceding year;
(iii) For an item or service furnished
in the first sufficient information year
for such item or service with respect to
such plan or coverage or the first year
for which an eligible database has
sufficient information to calculate a rate
under paragraph (c)(3)(i) of this section
in the immediately preceding year, the
plan or issuer must calculate the
qualifying payment amount in
accordance with paragraph (c)(3) of this
section.
(d) Information to be shared about
qualifying payment amount. In cases in
which the recognized amount with
respect to an item or service furnished
by a nonparticipating provider,
nonparticipating emergency facility, or
nonparticipating provider of air
ambulance services is the qualifying
payment amount, the plan or issuer
must provide in writing, in paper or
electronic form, to the provider or
facility, as applicable—
(1) With each initial payment or
notice of denial of payment under
§ 149.110, § 149.120, or § 149.130:
(i) The qualifying payment amount for
each item or service involved;
(ii) A statement to certify that, based
on the determination of the plan or
issuer—
(A) The qualifying payment amount
applies for purposes of the recognized
amount (or, in the case of air ambulance
services, for calculating the
participant’s, beneficiary’s, or enrollee’s
cost sharing); and
(B) Each qualifying payment amount
shared with the provider or facility was
determined in compliance with this
section;
(iii) A statement that if the provider
or facility, as applicable, wishes to

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initiate a 30-day open negotiation
period for purposes of determining the
amount of total payment, the provider
or facility may contact the appropriate
person or office to initiate open
negotiation, and that if the 30-day
negotiation period does not result in a
determination, generally, the provider
or facility may initiate the independent
dispute resolution process within 4 days
after the end of the open negotiation
period; and
(iv) Contact information, including a
telephone number and email address,
for the appropriate person or office to
initiate open negotiations for purposes
of determining an amount of payment
(including cost sharing) for such item or
service.
(2) In a timely manner upon request
of the provider or facility:
(i) Information about whether the
qualifying payment amount for items
and services involved included
contracted rates that were not on a feefor-service basis for those specific items
and services and whether the qualifying
payment amount for those items and
services was determined using
underlying fee schedule rates or a
derived amount;
(ii) If a plan or issuer uses an eligible
database under paragraph (c)(3) of this
section to determine the qualifying
payment amount, information to
identify which database was used; and
(iii) If a related service code was used
to determine the qualifying payment
amount for an item or service billed
under a new service code under
paragraph (c)(4)(i) or (ii) of this section,
information to identify the related
service code; and
(iv) If applicable, a statement that the
plan’s or issuer’s contracted rates
include risk-sharing, bonus, penalty, or
other incentive-based or retrospective
payments or payment adjustments for
the items and services involved (as
applicable) that were excluded for
purposes of calculating the qualifying
payment amount.
(e) Certain access fees to databases. In
the case of a plan or issuer that,
pursuant to this section, uses an eligible
database to determine the qualifying
payment amount for an item or service,
the plan or issuer is responsible for any
costs associated with accessing such
database.
(f) Audits. The procedures described
in part 150 of this subchapter apply
with respect to ensuring that a plan or
coverage is in compliance with the
requirement of applying a qualifying
payment amount under this subpart and
ensuring that such amount so applied
satisfies the requirements under this
section, as applicable.

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(g) Applicability date. The provisions
of this section are applicable with
respect to plan years (in the individual
market, policy years) beginning on or
after January 1, 2022.
§ 149.150 Complaints process for surprise
medical bills regarding group health plans
and group and individual health insurance
coverage.

(a) Scope and definitions—(1) Scope.
This section establishes a process to
receive and resolve complaints
regarding information that a specific
group health plan or health insurance
issuer offering group or individual
health insurance coverage may be
failing to meet the requirements under
this subpart, which may warrant an
investigation.
(2) Definitions. In this section—
(i) Complaint means a
communication, written or oral, that
indicates there has been a potential
violation of the requirements under
subpart B of this part, whether or not a
violation actually occurred.
(ii) Complainant means any
individual, or their authorized
representative, who files a complaint as
defined in paragraph (a)(2)(i) of this
section.
(b) Complaints process. (1) HHS will
consider the date a complaint is filed to
be the date upon which HHS receives an
oral or written statement that identifies
information about the complaint
sufficient to identify the parties
involved and the action or inaction
complained of.
(2) HHS will notify complainants, by
oral or written means, of receipt of the
complaint no later than 60 business
days after the complaint is received.
HHS will include a response
acknowledging receipt of the complaint,
notifying the complainant of their rights
and obligations under the complaints
process, and describing the next steps of
the complaints resolution process. As
part of the response, HHS may request
additional information needed to
process the complaint. Such additional
information may include:
(i) Explanations of benefits;
(ii) Processed claims;
(iii) Information about the health care
provider, facility, or provider of air
ambulance services involved;
(iv) Information about the group
health plan or health insurance issuer
covering the individual;
(v) Information to support a
determination regarding whether the
service was an emergency service or
non-emergency service;
(vi) The summary plan description,
policy, certificate, contract of insurance,
membership booklet, outline of

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coverage, or other evidence of coverage
the plan or issuer provides to
participants, beneficiaries, or enrollees;
(vii) Documents regarding the facts in
the complaint in the possession of, or
otherwise attainable by, the
complainant; or
(viii) Any other information HHS may
need to make a determination of facts
for an investigation.
(3) HHS will make reasonable efforts
consistent with agency practices to
notify the complainant of the outcome
of the complaint after the submission is
processed through appropriate methods
as determined by HHS. A complaint is
considered processed after HHS has
reviewed the complaint and
accompanying information and made an
outcome determination. Based on the
nature of the complaint and the plan or
issuer involved, HHS may—
(i) Refer the complainant to another
appropriate Federal or State resolution
process;
(ii) Notify the complainant and make
reasonable efforts to refer the
complainant to the appropriate State or
Federal regulatory authority if HHS
receives a complaint where another
entity has enforcement jurisdiction over
the plan or issuer;
(iii) Refer the plan or issuer for an
investigation for enforcement action
under 45 CFR part 150; or
(iv) Provide the complainant with an
explanation of the resolution of the
complaint and any corrective action
taken.
Subpart C—[Reserved]
Subpart D—Additional Patient
Protections
§ 149.310 Choice of health care
professional.

(a) Choice of health care
professional—(1) Designation of
primary care provider—(i) In general. If
a group health plan, or a health
insurance issuer offering group or
individual health insurance coverage,
requires or provides for designation by
a participant, beneficiary, or enrollee of
a participating primary care provider,
then the plan or issuer must permit each
participant, beneficiary, or enrollee to
designate any participating primary care
provider who is available to accept the
participant, beneficiary, or enrollee. In
such a case, the plan or issuer must
comply with the rules of paragraph
(a)(4) of this section by informing each
participant (in the individual market,
primary subscriber) of the terms of the
plan or health insurance coverage
regarding designation of a primary care
provider.

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(ii) Construction. Nothing in
paragraph (a)(1)(i) of this section is to be
construed to prohibit the application of
reasonable and appropriate geographic
limitations with respect to the selection
of primary care providers, in accordance
with the terms of the plan or coverage,
the underlying provider contracts, and
applicable State law.
(iii) Example. The rules of this
paragraph (a)(1) are illustrated by the
following example:
(A) Facts. A group health plan
requires individuals covered under the
plan to designate a primary care
provider. The plan permits each
individual to designate any primary care
provider participating in the plan’s
network who is available to accept the
individual as the individual’s primary
care provider. If an individual has not
designated a primary care provider, the
plan designates one until the individual
has made a designation. The plan
provides a notice that satisfies the
requirements of paragraph (a)(4) of this
section regarding the ability to designate
a primary care provider.
(B) Conclusion. In this Example, the
plan has satisfied the requirements of
paragraph (a) of this section.
(2) Designation of pediatrician as
primary care provider—(i) In general. If
a group health plan, or a health
insurance issuer offering group or
individual health insurance coverage,
requires or provides for the designation
of a participating primary care provider
for a child by a participant, beneficiary,
or enrollee, the plan or issuer must
permit the participant, beneficiary, or
enrollee to designate a physician
(allopathic or osteopathic) who
specializes in pediatrics (including
pediatric subspecialties, based on the
scope of that provider’s license under
applicable State law) as the child’s
primary care provider if the provider
participates in the network of the plan
or issuer and is available to accept the
child. In such a case, the plan or issuer
must comply with the rules of
paragraph (a)(4) of this section by
informing each participant (in the
individual market, primary subscriber)
of the terms of the plan or health
insurance coverage regarding
designation of a pediatrician as the
child’s primary care provider.
(ii) Construction. Nothing in
paragraph (a)(2)(i) of this section is to be
construed to waive any exclusions of
coverage under the terms and
conditions of the plan or health
insurance coverage with respect to
coverage of pediatric care.
(iii) Examples. The rules of this
paragraph (a)(2) are illustrated by the
following examples:

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(A) Example 1—(1) Facts. A group
health plan’s HMO designates for each
participant a physician who specializes
in internal medicine to serve as the
primary care provider for the participant
and any beneficiaries. Participant A
requests that Pediatrician B be
designated as the primary care provider
for A’s child. B is a participating
provider in the HMO’s network and is
available to accept the child.
(2) Conclusion. In this Example 1, the
HMO must permit A’s designation of B
as the primary care provider for A’s
child in order to comply with the
requirements of this paragraph (a)(2).
(B) Example 2—(1) Facts. Same facts
as Example 1 (paragraph (a)(2)(iii)(A) of
this section), except that A takes A’s
child to B for treatment of the child’s
severe shellfish allergies. B wishes to
refer A’s child to an allergist for
treatment. The HMO, however, does not
provide coverage for treatment of food
allergies, nor does it have an allergist
participating in its network, and it
therefore refuses to authorize the
referral.
(2) Conclusion. In this Example 2, the
HMO has not violated the requirements
of this paragraph (a)(2) because the
exclusion of treatment for food allergies
is in accordance with the terms of A’s
coverage.
(3) Patient access to obstetrical and
gynecological care—(i) General rights—
(A) Direct access. A group health plan,
or a health insurance issuer offering
group or individual health insurance
coverage, described in paragraph
(a)(3)(ii) of this section, may not require
authorization or referral by the plan,
issuer, or any person (including a
primary care provider) in the case of a
female participant, beneficiary, or
enrollee who seeks coverage for
obstetrical or gynecological care
provided by a participating health care
professional who specializes in
obstetrics or gynecology. In such a case,
the plan or issuer must comply with the
rules of paragraph (a)(4) of this section
by informing each participant (in the
individual market, primary subscriber)
that the plan may not require
authorization or referral for obstetrical
or gynecological care by a participating
health care professional who specializes
in obstetrics or gynecology. The plan or
issuer may require such a professional
to agree to otherwise adhere to the
plan’s or issuer’s policies and
procedures, including procedures
regarding referrals and obtaining prior
authorization and providing services
pursuant to a treatment plan (if any)
approved by the plan or issuer. For
purposes of this paragraph (a)(3), a
health care professional who specializes

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in obstetrics or gynecology is any
individual (including a person other
than a physician) who is authorized
under applicable State law to provide
obstetrical or gynecological care.
(B) Obstetrical and gynecological
care. A group health plan or health
insurance issuer described in paragraph
(a)(3)(ii) of this section must treat the
provision of obstetrical and
gynecological care, and the ordering of
related obstetrical and gynecological
items and services, pursuant to the
direct access described under paragraph
(a)(3)(i)(A) of this section, by a
participating health care professional
who specializes in obstetrics or
gynecology as the authorization of the
primary care provider.
(ii) Application of paragraph. A group
health plan, or a health insurance issuer
offering group or individual health
insurance coverage, is described in this
paragraph (a)(3) if the plan or issuer—
(A) Provides coverage for obstetrical
or gynecological care; and
(B) Requires the designation by a
participant, beneficiary, or enrollee of a
participating primary care provider.
(iii) Construction. Nothing in
paragraph (a)(3)(i) of this section is to be
construed to—
(A) Waive any exclusions of coverage
under the terms and conditions of the
plan or health insurance coverage with
respect to coverage of obstetrical or
gynecological care; or
(B) Preclude the group health plan or
health insurance issuer involved from
requiring that the obstetrical or
gynecological provider notify the
primary care health care professional or
the plan or issuer of treatment
decisions.
(iv) Examples. The rules of this
paragraph (a)(3) are illustrated by the
following examples:
(A) Example 1—(1) Facts. A group
health plan requires each participant to
designate a physician to serve as the
primary care provider for the participant
and the participant’s family. Participant
A, a female, requests a gynecological
exam with Physician B, an in-network
physician specializing in gynecological
care. The group health plan requires
prior authorization from A’s designated
primary care provider for the
gynecological exam.
(2) Conclusion. In this Example 1, the
group health plan has violated the
requirements of this paragraph (a)(3)
because the plan requires prior
authorization from A’s primary care
provider prior to obtaning gynecological
services.
(B) Example 2—(1) Facts. Same facts
as Example 1 (paragraph (a)(3)(iv)(A) of
this section) except that A seeks

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gynecological services from C, an out-ofnetwork provider.
(2) Conclusion. In this Example 2, the
group health plan has not violated the
requirements of this paragraph (a)(3) by
requiring prior authorization because C
is not a participating health care
provider.
(C) Example 3—(1) Facts. Same facts
as Example 1 (paragraph (a)(3)(iv)(A) of
this section) except that the group
health plan only requires B to inform
A’s designated primary care physician
of treatment decisions.
(2) Conclusion. In this Example 3, the
group health plan has not violated the
requirements of this paragraph (a)(3)
because A has direct access to B without
prior authorization. The fact that the
group health plan requires the
designated primary care physician to be
notified of treatment decisions does not
violate this paragraph (a)(3).
(D) Example 4—(1) Facts. A group
health plan requires each participant to
designate a physician to serve as the
primary care provider for the participant
and the participant’s family. The group
health plan requires prior authorization
before providing benefits for uterine
fibroid embolization.
(2) Conclusion. In this Example 4, the
plan requirement for prior authorization
before providing benefits for uterine
fibroid embolization does not violate the
requirements of this paragraph (a)(3)
because, though the prior authorization
requirement applies to obstetrical
services, it does not restrict access to
any providers specializing in obstetrics
or gynecology.
(4) Notice of right to designate a
primary care provider—(i) In general. If
a group health plan or health insurance
issuer requires the designation by a
participant, beneficiary, or enrollee of a
primary care provider, the plan or issuer
must provide a notice informing each
participant (in the individual market,
primary subscriber) of the terms of the
plan or health insurance coverage
regarding designation of a primary care
provider and of the rights—
(A) Under paragraph (a)(1)(i) of this
section, that any participating primary
care provider who is available to accept
the participant, beneficiary, or enrollee
can be designated;
(B) Under paragraph (a)(2)(i) of this
section, with respect to a child, that any
participating physician who specializes
in pediatrics can be designated as the
primary care provider; and
(C) Under paragraph (a)(3)(i) of this
section, that the plan may not require
authorization or referral for obstetrical
or gynecological care by a participating
health care professional who specializes
in obstetrics or gynecology.

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(ii) Timing. In the case of a group
health plan or group health insurance
coverage, the notice described in
paragraph (a)(4)(i) of this section must
be included whenever the plan or issuer
provides a participant with a summary
plan description or other similar
description of benefits under the plan or
health insurance coverage. In the case of
individual health insurance coverage,
the notice described in paragraph
(a)(4)(i) of this section must be included
whenever the issuer provides a primary
subscriber with a policy, certificate, or
contract of health insurance.
(iii) Model language. The following
model language can be used to satisfy
the notice requirement described in
paragraph (a)(4)(i) of this section:
(A) For plans and issuers that require
or allow for the designation of primary
care providers by participants,
beneficiaries, or enrollees, insert:
[Name of group health plan or health
insurance issuer] generally [requires/allows]
the designation of a primary care provider.
You have the right to designate any primary
care provider who participates in our
network and who is available to accept you
or your family members. [If the plan or health
insurance coverage designates a primary care
provider automatically, insert: Until you
make this designation, [name of group health
plan or health insurance issuer] designates
one for you.] For information on how to
select a primary care provider, and for a list
of the participating primary care providers,
contact the [plan administrator or issuer] at
[insert contact information].

(B) For plans and issuers that require
or allow for the designation of a primary
care provider for a child, add:
For children, you may designate a
pediatrician as the primary care provider.

(C) For plans and issuers that provide
coverage for obstetric or gynecological
care and require the designation by a
participant, beneficiary, or enrollee of a
primary care provider, add:
You do not need prior authorization from
[name of group health plan or issuer] or from
any other person (including a primary care
provider) in order to obtain access to
obstetrical or gynecological care from a
health care professional in our network who
specializes in obstetrics or gynecology. The
health care professional, however, may be
required to comply with certain procedures,
including obtaining prior authorization for
certain services, following a pre-approved
treatment plan, or procedures for making
referrals. For a list of participating health
care professionals who specialize in
obstetrics or gynecology, contact the [plan
administrator or issuer] at [insert contact
information].

(b) Applicability date. The provisions
of this section are applicable with
respect to plan years (in the individual
market, policy years) beginning on or
after January 1, 2022.

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Subpart E—Health Care Provider,
Health Care Facility, and Air
Ambulance Service Provider
Requirements
§ 149.410 Balance billing in cases of
emergency services.

(a) In general. In the case of a
participant, beneficiary, or enrollee with
benefits under a group health plan or
group or individual health insurance
coverage offered by a health insurance
issuer and who is furnished emergency
services (for which benefits are
provided under the plan or coverage)
with respect to an emergency medical
condition with respect to a visit at an
emergency department of a hospital or
an independent freestanding emergency
department—
(1) A nonparticipating emergency
facility must not bill, and must not hold
liable, the participant, beneficiary, or
enrollee for a payment amount for such
emergency services (as defined in 26
CFR 54.9816–4T(c)(2), 29 CFR
2590.716–4(c)(2), and § 149.110(c)(2), as
applicable) that exceeds the cost-sharing
requirement for such services (as
determined in accordance with 26 CFR
54.9816–4T(b)(3)(ii) and (iii), 29 CFR
2590.716–4(b)(3)(ii) and (iii), and
§ 149.110(b)(3)(ii) and (iii), as
applicable).
(2) A nonparticipating provider must
not bill, and must not hold liable, the
participant, beneficiary, or enrollee for a
payment amount for an emergency
service (as defined in 26 CFR 54.9816–
4T(c)(2), 29 CFR 2590.716–4(c)(2), and
§ 149.110(c)(2), as applicable) furnished
to such individual by such provider
with respect to such emergency medical
condition and visit for which the
individual receives emergency services
at the hospital or independent
freestanding emergency department that
exceeds the cost-sharing requirement for
such service (as determined in
accordance with 26 CFR 54.9816–
4T(b)(3)(ii) and (iii), 29 CFR 2590.716–
4(b)(3)(ii) and (iii), and
§ 149.110(b)(3)(ii) and (iii), as
applicable).
(b) Notice and consent to be treated
by a nonparticipating provider or
nonparticipating emergency facility.
The requirements in paragraph (a) of
this section do not apply with respect to
items and services described in 26 CFR,
54.9816–4T(c)(2)(ii)(A), 29 CFR
2590.716–4(c)(2)(ii)(A),
§ 149.110(c)(2)(ii)(A), as applicable, and
are not included as emergency services
if all of the following conditions are
met:
(1) The attending emergency
physician or treating provider
determines that the participant,

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beneficiary, or enrollee is able to travel
using nonmedical transportation or
nonemergency medical transportation to
an available participating provider or
facility located within a reasonable
travel distance, taking into account the
individual’s medical condition. The
attending emergency physician’s or
treating provider’s determination is
binding on the facility for purposes of
this requirement.
(2) The provider or facility furnishing
such additional items and services
satisfies the notice and consent criteria
of § 149.420(c) through (g) with respect
to such items and services, provided
that the written notice additionally
satisfies paragraphs (b)(2)(i) and (ii) of
this section, as applicable. In applying
this paragraph (b)(2), a reference in
§ 149.420 to a nonparticipating provider
is deemed to include a nonparticipating
emergency facility.
(i) In the case of a participating
emergency facility and a
nonparticipating provider, the written
notice must also include a list of any
participating providers at the facility
who are able to furnish such items and
services involved and notification that
the participant, beneficiary, or enrollee
may be referred, at their option, to such
a participating provider.
(ii) In the case of a nonparticipating
emergency facility, the written notice
must include the good faith estimated
amount that the participant, beneficiary,
or enrollee may be charged for items or
services furnished by the
nonparticipating emergency facility or
by nonparticipating providers with
respect to the visit at such facility
(including any item or service that is
reasonably expected to be furnished by
the nonparticipating emergency facility
or nonparticipating providers in
conjunction with such items or
services).
(3) The participant, beneficiary, or
enrollee (or an authorized representative
of such individual) is in a condition to
receive the information described in
§ 149.420, as determined by the
attending emergency physician or
treating provider using appropriate
medical judgment, and to provide
informed consent under such section, in
accordance with applicable State law.
For purposes of this section and
§ 149.420, an authorized representative
is an individual authorized under State
law to provide consent on behalf of the
participant, beneficiary, or enrollee,
provided that the individual is not a
provider affiliated with the facility or an
employee of the facility, unless such
provider or employee is a family
member of the participant, beneficiary,
or enrollee.

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(4) The provider or facility satisfies
any additional requirements or
prohibitions as may be imposed under
State law.
(c) Inapplicability of notice and
consent exception to certain items and
services. A nonparticipating provider or
nonparticipating facility specified in
paragraph (a) of this section will always
be subject to the prohibitions in
paragraph (a) of this section, with
respect to items or services furnished as
a result of unforeseen, urgent medical
needs that arise at the time an item or
service is furnished, regardless of
whether the nonparticipating provider
or nonparticipating emergency facility
satisfied the notice and consent criteria
in § 149.420(c) through (g).
(d) Retention of certain documents. A
nonparticipating emergency facility
(with respect to such facility or any
nonparticipating provider at such
facility) that obtains from a participant,
beneficiary, or enrollee of a group health
plan or group or individual health
insurance coverage (or an authorized
representative of such an individual) a
written consent in accordance with
§ 149.420(e), with respect to furnishing
an item or service to such an individual,
must retain the written notice and
consent for at least a 7-year period after
the date on which the item or service is
so furnished. If a nonparticipating
provider obtains a signed consent from
a participant, beneficiary, or enrollee, or
such individual’s authorized
representative, the provider may either
coordinate with the facility to retain the
written notice and consent for a 7-year
period, or the provider must retain the
written notice and consent for a 7-year
period.
(e) Notification to plan or issuer. In
the case of a participant, beneficiary, or
enrollee who is stabilized and furnished
additional items and services described
in § 149.110(c)(2)(ii), a nonparticipating
provider or nonparticipating emergency
facility must notify the plan or issuer,
respectively, when transmitting the bill
for such items and services, either on
the bill or in a separate document, as to
whether all of the conditions described
in paragraph (b) of this section are met
with respect to each of the items and
services for which the bill is submitted,
and if applicable, provide to the plan or
issuer a copy of the signed written
notice and consent document described
in paragraph (b)(2) of this section.
(f) Applicability date. The provisions
of this section are applicable with
respect to emergency services furnished
during a plan year (in the individual
market, policy year) beginning on or
after January 1, 2022.

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§ 149.420 Balance billing in cases of nonemergency services performed by
nonparticipating providers at certain
participating health care facilities.

(a) In general. A nonparticipating
provider of a group health plan or group
or individual health insurance coverage
who provides items or services (other
than emergency services) for which
benefits are provided under the plan or
coverage at a participating health care
facility must not bill, and must not hold
liable, a participant, beneficiary, or
enrollee of such plan or coverage for a
payment amount for such an item or
service furnished by such provider with
respect to a visit at the facility that
exceeds the cost-sharing requirement for
such item or service (as determined in
accordance with 26 CFR 54.9816–
5T(c)(1) and (2), 29 CFR 2590.717–
1(c)(1) and (2), and § 149.120(c)(1) and
(2), as applicable), unless the provider
(or the participating health care facility
on behalf of the provider) satisfies the
notice and consent criteria of paragraph
(c) of this section.
(b) Inapplicability of notice and
consent exception to certain items and
services. The notice and consent criteria
in paragraphs (c) through (i) of this
section do not apply, and a
nonparticipating provider specified in
paragraph (a) of this section will always
be subject to the prohibitions in
paragraph (a) of this section, with
respect to the following services:
(1) Ancillary services, meaning—
(i) Items and services related to
emergency medicine, anesthesiology,
pathology, radiology, and neonatology,
whether provided by a physician or
non-physician practitioner;
(ii) Items and services provided by
assistant surgeons, hospitalists, and
intensivists;
(iii) Diagnostic services, including
radiology and laboratory services; and
(iv) Items and services provided by a
nonparticipating provider if there is no
participating provider who can furnish
such item or service at such facility.
(2) Items or services furnished as a
result of unforeseen, urgent medical
needs that arise at the time an item or
service is furnished, regardless of
whether the nonparticipating provider
satisfied the notice and consent criteria
in paragraph (c) of this section.
(c) Notice and consent to be treated by
a nonparticipating provider. Subject to
paragraph (f) of this section, and unless
prohibited by State law, a
nonparticipating provider satisfies the
notice and consent criteria of this
paragraph (c) with respect to items or
services furnished by the provider to a
participant, beneficiary, or enrollee of a
group health plan or group or individual

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health insurance coverage, if the
provider (or a participating health care
facility on behalf on a nonparticipating
provider)—
(1) Provides to the participant,
beneficiary, or enrollee a written notice
in paper or, as practicable, electronic
form, as selected by the individual, that
contains the information required under
paragraph (d) of this section, provided
such written notice is provided:
(i) In accordance with guidance
issued by HHS, and in the form and
manner specified in such guidance;
(ii) With the consent document, and
is provided physically separate from
other documents and not attached to or
incorporated into any other document;
and
(iii) To such participant, beneficiary,
or enrollee—
(A) Not later than 72 hours prior to
the date on which the individual is
furnished such items or services, in the
case where the appointment to be
furnished such items or services is
scheduled at least 72 hours prior to the
date on which the individual is to be
furnished such items and services; or
(B) On the date the appointment to be
furnished such items or services is
scheduled, in the case where the
appointment is scheduled within 72
hours prior to the date on which such
items or services are to be furnished.
Where an individual is provided the
notice on the same date that the items
or services are to be furnished,
providers and facilities are required to
provide the notice no later than 3 hours
prior to furnishing items or services to
which the notice and consent
requirements apply.
(2) Obtains from the participant,
beneficiary, or enrollee the consent
described in paragraph (e) of this
section to be treated by the
nonparticipating provider. An
authorized representative may receive
the notice on behalf of a participant,
beneficiary, or enrollee, and may
provide consent on behalf of the
participant, beneficiary, or enrollee. For
purposes of this section and § 149.410,
an authorized representative is an
individual authorized under State law
to provide consent on behalf of the
participant, beneficiary, or enrollee,
provided that the individual is not a
provider affiliated with the facility or an
employee of the facility, unless such
provider or employee is a family
member of the participant, beneficiary,
or enrollee. The consent must—
(i) Be provided voluntarily, meaning
the individual is able to consent freely,
without undue influence, fraud, or
duress;

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(ii) Be obtained in accordance with,
and in the form and manner specified
in, guidance issued by HHS; and
(iii) Not be revoked, in writing, by the
participant, beneficiary, or enrollee
prior to the receipt of items and services
to which the consent applies.
(3) Provides a copy of the signed
written notice and consent to the
participant, beneficiary, or enrollee inperson or through mail or email, as
selected by the participant, beneficiary,
or enrollee.
(d) Information required under
written notice. The written notice
described in paragraph (c)(1) of this
section must be provided in the form
and manner specified by HHS in
guidance, and must—
(1) State that the health care provider
is a nonparticipating provider, with
respect to the health plan or coverage.
(2) Include the good faith estimated
amount that such nonparticipating
provider may charge the participant,
beneficiary, or enrollee for the items and
services involved (including any item or
service that is reasonably expected to be
furnished by the nonparticipating
provider in conjunction with such items
or services), including notification that
the provision of the estimate or consent
to be treated under paragraph (e) of this
section does not constitute a contract
with respect to the charges estimated for
such items and services or a contract
that binds the participant, beneficiary,
or enrollee to be treated by that provider
or facility.
(3) Provide a statement that prior
authorization or other care management
limitations may be required in advance
of receiving such items or services at the
facility.
(4) Clearly state that consent to
receive such items and services from
such nonparticipating provider is
optional and that the participant,
beneficiary, or enrollee may instead
seek care from an available participating
provider, with respect to the plan or
coverage, as applicable, and that in such
cases the cost-sharing responsibility of
the participant, beneficiary, or enrollee
would not exceed the responsibility that
would apply with respect to such an
item or service that is furnished by a
participating provider, as applicable,
with respect to such plan.
(e) Consent described to be treated by
a nonparticipating provider. The
consent described in this paragraph (e),
with respect to a participant,
beneficiary, or enrollee of a group health
plan or group or individual health
insurance coverage who is to be
furnished items or services by a
nonparticipating provider, must be
documented on a form specified by the

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Secretary, in consultation with the
Secretary of Labor, through guidance
and provided in accordance with such
guidance, that must be signed by the
participant, beneficiary, or enrollee
before such items and services are
furnished and that—
(1) Acknowledges in clear and
understandable language that the
participant, beneficiary, or enrollee has
been—
(i) Provided with the written notice
under paragraph (c) of this section, in
the form selected by the participant,
beneficiary, or enrollee.
(ii) Informed that the payment of such
charge by the participant, beneficiary, or
enrollee might not accrue toward
meeting any limitation that the plan or
coverage places on cost sharing,
including an explanation that such
payment might not apply to an innetwork deductible or out-of-pocket
maximum applied under the plan or
coverage.
(2) States that by signing the consent,
the individual agrees to be treated by
the nonparticipating provider and
understands the individual may be
balance billed and subject to costsharing requirements that apply to
services furnished by the
nonparticipating provider.
(3) Documents the time and date on
which the participant, beneficiary, or
enrollee received the written notice
described in paragraph (c) of this
section and the time and date on which
the individual signed the consent to be
furnished such items or services by such
nonparticipating provider.
(f) Language access. (1) A
nonparticipating provider (or the
participating health care facility on
behalf of the nonparticipating provider)
must provide the individual with the
choice to receive the written notice and
consent document in any of the 15 most
common languages in the State in which
the applicable facility is located, except
that the notice and consent document
may instead be available in any of the
15 most common languages in a
geographic region that reasonably
reflects the geographic region served by
the applicable facility; and
(2) If the individual’s preferred
language is not among the 15 most
common languages in which the
nonparticipating provider (or the
participating health care facility on
behalf of the nonparticipating provider)
makes the notice and consent document
available and the individual cannot
understand the language in which the
notice and consent document are
provided, the notice and consent criteria
in paragraph (c) of this section are not
met unless the nonparticipating

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provider (or the participating health
care facility on behalf of the
nonparticipating provider) has obtained
the services of a qualified interpreter to
assist the individual with understanding
the information contained in the notice
and consent document.
(g) Scope of consent. The consent
described in paragraph (e) of this
section will constitute consent only to
the receipt of the information provided
pursuant to this section and will not
constitute a contractual agreement of the
participant, beneficiary, or enrollee to
any estimated charge or amount
included in such information, or to be
treated by that provider or facility.
(h) Retention of certain documents. A
participating health care facility (with
respect to nonparticipating providers at
such facility) that obtains from a
participant, beneficiary, or enrollee of a
group health plan or group or individual
health insurance coverage a written
consent in accordance with paragraph
(e) of this section, with respect to
furnishing an item or service to such an
individual, must retain the written
notice and consent for at least a 7-year
period after the date on which the item
or service is so furnished. If a
nonparticipating provider obtains a
signed consent from a participant,
beneficiary, or enrollee, where the
facility does not otherwise obtain the
consent on behalf of the provider, the
provider may either coordinate with the
facility to retain the written notice and
consent for a 7-year period, or the
provider must retain the written notice
and consent for a 7-year period.
(i) Notification to plan or issuer. For
each item or service furnished by a
nonparticipating provider described in
paragraph (a) of this section, the
provider (or the participating facility on
behalf of the nonparticipating provider)
must timely notify the plan or issuer
that the item or service was furnished
during a visit at a participating health
care facility, and, if applicable, provide
to the plan or issuer a copy of the signed
written notice and consent document
described in paragraphs (c) and (e) of
this section. In instances where, to the
extent permitted by this section, the
nonparticipating provider bills the
participant, beneficiary, or enrollee
directly, the provider may satisfy the
requirement to notify the plan or issuer
by including the notice with the bill to
the participant, beneficiary, or enrollee.
(j) Applicability date. The provisions
of this section are applicable with
respect to items and services furnished
during a plan year (in the individual
market, policy year) beginning on or
after January 1, 2022.

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§ 149.430 Provider and facility disclosure
requirements regarding patient protections
against balance billing.

(a) In general. Each health care
provider and health care facility
(including an emergency department of
a hospital and an independent
freestanding emergency department)
must make publicly available, post on a
public website of such provider or
facility (if applicable), and provide to
any individual who is a participant,
beneficiary, or enrollee of a group health
plan or group or individual health
insurance coverage offered by a health
insurance issuer and to whom the
provider or facility furnishes items or
services, the information described in
paragraph (b) of this section regarding
patient protections against balance
billing, except as provided in
paragraphs (e) and (f) of this section. A
provider or facility must make the
disclosures in accordance with the
method and timing requirements set
forth in paragraphs (c) and (d) of this
section.
(b) Content. The disclosures required
under this section must include, in clear
and understandable language, all the
information described in this paragraph
(b) (and may include any additional
information that does not conflict with
that information).
(1) A statement that explains the
requirements of and prohibitions
applicable to the health care provider or
health care facility under sections
2799B–1 and 2799B–2 of the PHS Act
and their implementing regulations in
§§ 149.410 and 149.420;
(2) If applicable, a statement that
explains any State law requirements
regarding the amounts such provider or
facility may, with respect to an item or
service, charge a participant,
beneficiary, or enrollee of a group health
plan or group or individual health
insurance coverage offered by a health
insurance issuer with respect to which
such provider or facility does not have
a contractual relationship, after
receiving payment, if any, from the plan
or coverage, respectively, for such item
or service and any applicable costsharing payment from such participant,
beneficiary, or enrollee; and
(3) A statement providing contact
information for the appropriate State
and Federal agencies that an individual
may contact if the individual believes
the provider or facility has violated a
requirement described in the notice.
(c) Required methods for disclosing
information. Health care providers and
health care facilities must provide the
disclosure required under this section as
follows:

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(1) With respect to the required
disclosure to be posted on a public
website, the information described in
paragraph (b) of this section, or a link
to such information, must appear on a
searchable homepage of the provider’s
or facility’s website. A provider or
facility that does not have its own
website is not required to make a
disclosure under this paragraph (c)(1).
(2) With respect to the required
disclosure to the public, a provider or
facility must make public the
information described in paragraph (b)
of this section on a sign posted
prominently at the location of the
provider or facility. A provider that does
not have a publicly accessible location
is not required to make a disclosure
under this paragraph (c)(2).
(3) With respect to the required
disclosure to individuals who are
participants, beneficiaries, or enrollees
of a group health plan or group or
individual health insurance coverage
offered by a health insurance issuer, a
provider or facility must provide the
information described in paragraph (b)
of this section in a one-page (doublesided) notice, using print no smaller
than 12-point font. The notice must be
provided in-person or through mail or
email, as selected by the participant,
beneficiary, or enrollee.
(d) Timing of disclosure to
individuals. A health care provider or
health care facility is required to
provide the notice to individuals who
are participants, beneficiaries, or
enrollees of a group health plan or
group or individual health insurance
coverage offered by a health insurance
issuer no later than the date and time on
which the provider or facility requests
payment from the individual, or with
respect to an individual from whom the
provider or facility does not request
payment, no later than the date on
which the provider or facility submits a
claim to the group health plan or health
insurance issuer.
(e) Exceptions. A health care provider
is not required to make the disclosures
required under this section—
(1) If the provider does not furnish
items or services at a health care facility,
or in connection with visits at health
care facilities; or
(2) To individuals to whom the
provider furnishes items or services, if
such items or services are not furnished
at a health care facility, or in connection
with a visit at a health care facility.
(f) Special rule to prevent unnecessary
duplication with respect to health care
providers. To the extent a provider
furnishes an item or service covered
under the plan or coverage at a health
care facility (including an emergency

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department of a hospital or independent
freestanding emergency department),
the provider satisfies the requirements
of paragraphs (c)(2) and (3) of this
section if the facility makes the
information available, in the required
form and manner, pursuant to a written
agreement. Accordingly, if a provider
and facility enter into a written
agreement under which the facility
agrees to make the information required
under this section available on a sign
posted prominently at the facility and to
provide the one-page notice to
individuals in compliance with this
section, and the facility fails to do so,
then the facility, but not the provider,
violates the disclosure requirements of
this section.
(g) Applicability date. The provisions
of this section are applicable beginning
on January 1, 2022.
§ 149.440 Balance billing in cases of air
ambulance services.

(a) In general. In the case of a
participant, beneficiary, or enrollee with
benefits under a group health plan or
group or individual health insurance
coverage offered by a health insurance
issuer who is furnished air ambulance
services (for which benefits are available
under such plan or coverage) from a
nonparticipating provider of air
ambulance services, with respect to
such plan or coverage, the provider
must not bill, and must not hold liable,
the participant, beneficiary, or enrollee
for a payment amount for the air
ambulance services furnished by the
provider that is more than the costsharing amount for such service (as
determined in accordance with 26 CFR
54.9817–1T(b)(1) and (2), 29 CFR
2590.717–1(b)(1) and (2), and
§ 149.130(b)(1) and (2), as applicable).
(b) Applicability date. The provisions
of this section are applicable with
respect to air ambulance services
furnished during a plan year (in the
individual market, policy year)
beginning on or after January 1, 2022.

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§ 149.450 Complaint process for balance
billing regarding providers and facilities.

(a) Scope and definitions—(1) Scope.
This section establishes a process for
HHS to receive and resolve complaints
regarding information that a health care
provider, provider of air ambulance
services, or health care facility may be
failing to meet the requirements under
subpart E of this part, which may
warrant an investigation.
(2) Definitions. In this section—
(i) Complaint means a
communication, written, or oral, that

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indicates there has been a potential
violation of the requirements under this
subpart, whether or not a violation
actually occurred.
(ii) Complainant means any
individual, or their authorized
representative, who files a complaint as
defined in paragraph (a)(2)(i) of this
section.
(b) Complaints process. (1) HHS will
consider the date a complaint is filed to
be the date upon which HHS receives an
oral, written, or electronic statement
that identifies information about the
complaint sufficient to identify the
parties involved and the action or
inaction complained of.
(2) HHS will notify complainants, by
oral or written means, of receipt of the
complaint no later than 60 business
days after the complaint is received.
HHS will include a response
acknowledging receipt of the complaint,
notifying the complainant of their rights
and obligations under the complaints
process, and describing the next steps of
the complaints resolution process. HHS
may request additional information that
may be needed to process the complaint
as part of the response. Such additional
information may include:
(i) Health care provider, air
ambulance provider, or health care
facility bills;
(ii) Health care provider, air
ambulance provider, or health care
facility network status;
(iii) Information regarding the
participant’s, beneficiary’s, or enrollee’s
health care plan or health insurance
coverage;
(iv) Information to support a
determination regarding whether the
service was an emergency service or
non-emergency service;
(v) Documents regarding the facts in
the complaint in the possession of, or
otherwise attainable by, the
complainant; or
(vi) Any other information HHS needs
to make a determination of facts for an
investigation.
(3) HHS will make reasonable efforts
consistent with agency practices to
notify the complainant of the outcome
of the complaint after the submission is
processed through appropriate methods
as determined by HHS. A complaint is
considered processed after HHS has
reviewed the complaint and
accompanying information and made an
outcome determination. Based on the
nature of the complaint, HHS may—
(i) Refer the complainant to another
appropriate Federal or State resolution
process;

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36985

(ii) Notify the complainant and make
reasonable efforts to refer the
complainant to the appropriate State or
Federal regulatory authority if HHS
receives a complaint where another
entity has enforcement jurisdiction over
the health care provider, air ambulance
provider or health care facility;
(iii) Refer the health care provider, air
ambulance provider or health care
facility for an investigation for
enforcement action under 45 CFR part
150; or
(iv) Provide the complainant with an
explanation of resolution and any
corrective action taken.
PART 156—HEALTH INSURANCE
ISSUER STANDARDS UNDER THE
AFFORDABLE CARE ACT, INCLUDING
STANDARDS RELATED TO
EXCHANGES
19. The authority citation for part 156
continues to read as follows:

■

Authority: 42 U.S.C. 18021–18024, 18031–
18032, 18041–18042, 18044, 18054, 18061,
18063, 18071, 18082, and 26 U.S.C. 36B.

20. Section 156.155 is amended by:
a. Revising paragraph (a)(3);
b. Redesignating paragraph (c) as
paragraph (d); and
■ c. Adding a new paragraph (c).
The revision and addition read as
follows:
■
■
■

§ 156.155
plans.

Enrollment in catastrophic

(a) * * *
(3) Provides coverage of the essential
health benefits under section 1302(b) of
the Affordable Care Act, except that the
plan provides no benefits for any plan
year (except as provided in paragraphs
(a)(4), (b), and (c) of this section) until
the annual limitation on cost sharing in
section 1302(c)(1) of the Affordable Care
Act is reached.
*
*
*
*
*
(c) Coverage to prevent surprise
medical bills. A catastrophic plan must
provide benefits as required under
sections 2799A–1 and 2799A–2 of the
Public Health Service Act and their
implementing regulations in §§ 149.110,
149.120, and 149.130 or any applicable
State law providing similar protections
to individuals, and will not violate
paragraph (a)(3) of this section solely
because of the provision of such benefits
before the annual limitation on cost
sharing is reached.
*
*
*
*
*
[FR Doc. 2021–14379 Filed 7–6–21; 4:15 pm]
BILLING CODE 6523–63–P; 4830–01–P; 4510–29–P;
4120–01–P

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