Internal Revenue Bulletin 2022-37 (PDF rendition): IRS Notices

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Bulletin No. 2022–37
September 12, 2022
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
EXCISE TAX
T.D. 9965, page 192.
This document sets forth regulations regarding certain
requirements regarding implementation of the protec-
tions against balance billing provided under the No
Surprises Act. The regulations are issued jointly with
the Department of Health and Human Services, and the
Department of Labor.
INCOME TAX
Notice 2022-37, page 234.
This Notice announces that Treasury and the IRS intend
to amend the section 871(m) regulations to delay the
effective/applicability date of certain rules in those final
regulations and extends the phase-in period provided
in Notice 2020-2, 2020-3 I.R.B. 327, for certain provi-
sions of the section 871(m) regulations.
Finding Lists begin on page ii.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and
enforce the law with integrity and fairness to all.
Introduction
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The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
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September 12, 2022 Bulletin No. 2022–37

Part I
26 CFR 54.9816-6: Methodology for calculating
QPA; 26 CFR 54.9816-8: IDR process; 26 CFR
54.9817-2: IDR process for air ambulance services
T.D. 9965
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 54
Requirements Related to
Surprise Billing
AGENCY: Internal Revenue Service,
Department of the Treasury; Employee
Benefits Security Administration, Depart-
ment of Labor; Centers for Medicare &
Medicaid Services, Department of Health
and Human Services.
ACTION: Final rules.
SUMMARY: This document includes final
rules under the No Surprises Act, which was
enacted as part of the Consolidated Appro-
priations Act, 2021 (CAA). The document
finalizes certain disclosure requirements
relating to information that group health
plans, and health insurance issuers offering
group or individual health insurance cover-
age, must share about the qualifying pay-
ment amount (QPA) under the interim final
rules issued in July 2021, titled Require-
ments Related to Surprise Billing; Part I
(July 2021 interim final rules). Additionally,
this document finalizes select provisions
under the October 2021 interim final rules,
titled Requirements Related to Surprise
Billing; Part II (October 2021 interim
final rules), to address certain requirements
related to consideration of information
when a certified independent dispute reso-
lution (IDR) entity makes a payment deter-
mination under the Federal IDR process.
DATES: Effective date: These final rules
are effective on October 25, 2022.
Applicability date: See Section III of
the SUPPLEMENTARY INFORMA-
TION section for information on the
applicability dates.
FOR FURTHER INFORMATION
CONTACT: Shira McKinlay, Internal
Revenue Service, Department of the Trea-
sury, at 202-317-5500; Elizabeth Schum-
acher or David Sydlik, Employee Benefits
Security Administration, Department of
Labor, at 202-693-8335; Deborah Bryant,
Centers for Medicare & Medicaid Ser-
vices, Department of Health and Human
Services, at 301-492-4293; Lindsey
Murtagh, Centers for Medicare & Med-
icaid Services, Department of Health and
Human Services, at 301-492-4106.
Customer Service Information:
Individuals interested in obtaining
information from the Department of Labor
(DOL) concerning employment-based
health coverage laws may call the
Employee Benefits Security Administra-
tion (EBSA) Toll-Free Hotline at 1-866-
444-EBSA (3272) or visit the DOL’s web-
site (www.dol.gov/agencies/ebsa).
In addition, information from the
Department of Health and Human Ser-
vices (HHS) on private health insurance
coverage, coverage provided by non-Fed-
eral governmental group health plans, and
requirements that apply to health care pro-
viders, health care facilities, and providers
of air ambulance services can be found
on the Centers for Medicare & Medicaid
Services (CMS) website (www.cms.gov/
cciio), and information on surprise med-
ical bills can be found at www.cms.gov/
nosurprises.
SUPPLEMENTARY INFORMATION:
I. Background
A. Preventing Surprise Medical Bills
under the CAA
On December 27, 2020, the CAA,
which includes the No Surprises Act, was
enacted.
1
The No Surprises Act provides
Federal protections against surprise billing
by limiting out-of-network cost sharing
and prohibiting “balance billing,” in many
of the circumstances in which surprise
bills arise most frequently. Balance billing
refers to the practice of out-of- network
providers billing patients for the differ-
ence 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, coin-
surance, or amounts paid toward a deduct-
ible). In particular, the No Surprises Act
added new provisions applicable to group
health plans and health insurance issuers
offering group or individual health insur-
ance coverage to Subchapter B of chap-
ter 100 of the Internal Revenue Code
(Code), Part 7 of the Employee Retire-
ment Income Security Act (ERISA), and
Part D of title XXVII of the Public Health
Service Act (PHS Act). 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,
2
which
contain limitations on cost sharing and
requirements regarding the timing of ini-
tial payments and notices of denial of pay-
ment for emergency services furnished by
nonparticipating providers and emergency
facilities, and for non-emergency services
furnished by nonparticipating providers
with respect to patient visits to participat-
ing health care facilities, defined as hos-
pitals, hospital outpatient departments,
critical access hospitals, and ambulatory
surgical centers. Section 103 of the No
Surprises Act amended section 9816 of
the Code, section 716 of ERISA, and sec-
tion 2799A-1 of the PHS Act to establish
a Federal IDR process that allows plans
and issuers and nonparticipating providers
and facilities to resolve disputes regarding
out-of-network rates. Section 105 of the
No Surprises Act added section 9817 of
the Code, section 717 of ERISA, and sec-
tion 2799A-2 of the PHS Act. These sec-
tions contain limitations on cost sharing
1
Pub. L. 116-260 (December 27, 2020).
2
Section 102(d)(1) of the No Surprises Act amended the Federal Employees Health Benefits Act, 5 U.S.C. 8901 et seq., by adding a new subsection (p) to 5 U.S.C. 8902. Under this new
provision, each Federal Employees Health Benefits (FEHB) Program contract must require a carrier to comply with requirements described 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 (as applicable) in the same manner as these provisions apply with respect to a group health plan or health insurance
issuer offering group or individual health insurance coverage.
September 12, 2022 192 Bulletin No. 2022–37

and requirements for the timing of initial
payments and notices of denial of pay-
ment for air ambulance services furnished
by nonparticipating providers of air ambu-
lance services, and allow plans and issu-
ers and nonparticipating providers of air
ambulance services to access the Federal
IDR process described in section 9816 of
the Code, section 716 of ERISA, and sec-
tion 2799A-1 of the PHS Act.
The No Surprises Act provisions that
apply to health care providers, facilities,
and providers of air ambulance services,
such as prohibitions on balance billing
for certain items and services and require-
ments related to disclosures about balance
billing protections, were added to title
XXVII of the PHS Act in a new part E.
The Departments of the Treasury,
Labor, and Health and Human Services
(the Departments) previously issued
interim final rules implementing provi-
sions of sections 9816 and 9817 of the
Code, sections 716 and 717 of ERISA,
and sections 2799A-1 and 2799A-2 of
the PHS Act to protect consumers from
surprise medical bills for emergency ser-
vices, non-emergency services furnished
by nonparticipating providers with respect
to patient visits to participating facilities
in certain circumstances, and air ambu-
lance services furnished by nonparticipat-
ing providers of air ambulance services.
3

The interim final rules also implement
provisions requiring the Departments to
create a Federal IDR process to determine
payment amounts when there is a dispute
between payers and providers or facilities
over the out-of-network rate due for emer-
gency services, non-emergency services
furnished by nonparticipating providers
with respect to patient visits to participat-
ing facilities in certain circumstances, and
air ambulance services furnished by non-
participating providers of air ambulance
services.
4
To implement these provisions,
the Departments published in the Fed-
eral Register the July 2021 interim final
rules on July 13, 2021 (86 FR 36872),
and the October 2021 interim final rules
on October 7, 2021 (86 FR 55980).
5
The
July 2021 interim final rules and October
2021 interim final rules generally apply to
group health plans and health insurance
issuers offering group or individual health
insurance coverage (including grandfa-
thered health plans) with respect to plan
years (in the individual market, policy
years) beginning on or after January 1,
2022; and to health care providers and
facilities, and providers of air ambulance
services with respect to items and services
provided during plan years (in the individ-
ual market, policy years) beginning on or
after January 1, 2022.
6
B. July 2021 Interim Final Rules
The July 2021 interim final rules imple-
ment sections 9816(a)-(b) and 9817(a) of
the Code, sections 716(a)-(b) and 717(a)
of ERISA, and sections 2799A-1(a)-(b),
2799A-2(a), 2799A-7, 2799B-1, 2799B-
2, 2799B-3, and 2799B-5 of the PHS Act.
Among other requirements, the July
2021 interim final rules generally prohibit
balance billing for items and services sub-
ject to the requirements in those interim
final rules.
7
The July 2021 interim final
rules also specify that consumer cost-shar-
ing amounts for emergency services fur-
nished by nonparticipating providers or
facilities, and for non-emergency services
furnished by nonparticipating providers
with respect to patient visits to certain
participating facilities, must be calcu-
lated based on the “recognized amount,”
which is defined as one of the following
amounts: (1) an amount determined by an
applicable All-Payer Model Agreement
under section 1115A of the Social Secu-
rity 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 QPA.
The July 2021 interim final rules establish
the methodology for calculating the QPA,
which in most circumstances will be the
plan’s or issuer’s median contracted rate
that was in effect for the particular item
or service on January 31, 2019, increased
for inflation. Cost-sharing amounts for air
ambulance services provided by nonpar-
ticipating providers of air ambulance ser-
vices must be the same as the cost-sharing
amounts that would apply if the services
were provided by a participating pro-
vider of air ambulance services, and these
cost-sharing amounts must be calculated
using the lesser of the billed charge or the
QPA.
The No Surprises Act directs the
Departments to specify the information
that a plan or issuer must share with a
nonparticipating provider, nonpartici-
pating emergency facility, or nonpartic-
ipating provider of air ambulance ser-
vices, as applicable, after determining the
QPA. Therefore, 26 CFR 54.9816-6T(d),
29 CFR 2590.716-6(d), and 45 CFR
149.140(d) require that plans and issuers
make certain disclosures about the QPA
with each initial payment or notice of
denial of payment, and that plans and issu-
ers provide certain additional information
upon request of the provider, facility, or
provider of air ambulance services. This
information must be provided in writing,
either on paper or electronically, to a non-
participating provider, facility, or provider
of air ambulance services, as applicable,
when the QPA serves as the recognized
amount.
With an initial payment or notice of
denial of payment, a plan or issuer must
provide the QPA for each item or service
involved as well as a statement certify-
ing 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, facility, or
provider of air ambulance services was
determined in compliance with the meth-
odology outlined in the July 2021 interim
final rules.
3
86 FR 36872 (July 13, 2021) and 86 FR 55980 (October 7, 2021).
4
The Federal IDR process does not apply if an All-Payer Model Agreement under section 1115A of the Social Security Act or a specified State law applies.
5
The interim final rules also include interim final regulations under 5 U.S.C. 8902(p) issued by the Office of Personnel Management that specify how certain provisions of the No Surprises
Act apply to health benefit plans offered by carriers under the Federal Employees Health Benefits Act.
6
86 FR 36872 (July 13, 2021) and 86 FR 55980 (October 7, 2021). These provisions apply to carriers in the Federal Employees Health Benefits Program with respect to contract years begin-
ning on or after January 1, 2022. The disclosure requirements at 45 CFR 149.430 regarding patient protections against balance billing are applicable as of January 1, 2022.
7
45 CFR 149.410(a), 149.420(a), and 149.440(a).
Bulletin No. 2022–37 193 September 12, 2022

September 12, 2022 194 Bulletin No. 2022–37
A plan or issuer is also required to pro-
vide a statement that, if the provider, facil-
ity, or provider of air ambulance services
wishes to initiate a 30-day open negotia-
tion period for purposes of determining
the amount of total payment, the provider,
facility, or provider of air ambulance ser-
vices may contact the appropriate per-
son or office to initiate open negotiation,
and that if the 30-day open negotiation
period does not result in an agreement on
the payment amount, the provider, facil-
ity, or provider of air ambulance services
typically may initiate the Federal IDR
process within 4 days after the end of the
open negotiation period. The Departments
note that these time frames are measured
in business days, and plans and issuers
should reflect this in the statement. The
plan or issuer must provide contact infor-
mation, including a telephone number and
email address, for the appropriate office
or person for the provider, facility, or pro-
vider of air ambulance services to contact
to initiate open negotiation for purposes of
determining an amount of payment (with
the amount including cost sharing) for the
item or service.
It has come to the Departments’ atten-
tion that some plans and issuers are
requiring nonparticipating providers, non-
participating emergency facilities, and
nonparticipating providers of air ambu-
lance services to utilize plan- or issu-
er-owned web systems to initiate an open
negotiation period. As discussed earlier,
the July 2021 interim final rules require
plans and issuers to provide a telephone
number and email address for providers,
facilities, and providers of air ambulance
services to initiate the open negotiation
period. When a party to a payment dispute
chooses to initiate the open negotiation
period, the October 2021 interim final
rules specify that the party must use the
standard notice of initiation of open nego-
tiation issued by the Departments and may
satisfy the requirement to provide notice
to the opposing party by sending the
notice electronically if the party sending
the notice has a good faith belief that the
electronic method is readily accessible to
the other party and the notice is also pro-
vided free of charge in paper form upon
request.
8
For example, it is reasonable
for a provider, facility, or provider of air
ambulance services to have a good faith
belief that an email address provided by
a plan or issuer with the initial payment
or notice of denial of payment is readily
accessible to the plan or issuer. Thus, if a
provider, facility, or provider of air ambu-
lance services sends the standard notice of
initiation of open negotiation to the email
address identified by the plan or issuer in
the notice of denial of payment or initial
payment, that transmission would satisfy
the regulatory requirement to provide
notice to the opposing party (so long as the
provider, facility, or provider of air ambu-
lance services also sends the notice free
of charge in paper form upon request).
9

Although plans and issuers may encour-
age the use of an online portal for nonpar-
ticipating providers, facilities, and provid-
ers of air ambulance services to submit the
information necessary to initiate the open
negotiation period, or may seek additional
information to inform good faith open
negotiations, such as through use of a
supplemental open negotiation form, the
July 2021 interim final rules require plans
and issuers to provide a telephone number
and email address for providers, facilities,
and providers of air ambulance services
to initiate the open negotiation period,
and the October 2021 interim final rules
permit a party to initiate the open negotia-
tion period by sending the standard notice
of initiation electronically to the email
address identified in the notice of denial of
payment or initial payment. Accordingly,
a plan or issuer cannot refuse to accept the
standard notice of initiation of open nego-
tiation from a provider, facility, or pro-
vider of air ambulance services because
the provider or facility did not utilize the
plan’s or issuer’s online portal when the
standard notice of initiation of open nego-
tiation is provided in a manner consistent
with the requirements of the July 2021 and
October 2021 interim final rules.
In addition, upon request by the pro-
vider, facility, or provider of air ambulance
services, 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
and whether the QPA for those items and
services was determined using underlying
fee schedule rates or a derived amount.
10
If
an eligible database was used to determine
the QPA, the plan or issuer must provide
information to identify which database
was used. Similarly, if a related service
code was used to determine the QPA for
an item or service billed under a new ser-
vice code, the plan or issuer must provide
information to identify which related ser-
vice code was used.
Finally, upon request by the provider,
facility, or provider of air ambulance ser-
vices, the plan or issuer must provide a
statement, if applicable, that the plan’s or
issuer’s contracted rates include risk-shar-
ing, bonus, penalty, or other incen-
tive-based or retrospective payments or
payment adjustments that were excluded
for purposes of calculating the QPA for
the items and services involved.
C. October 2021 Interim Final Rules
The October 2021 interim final rules
build on the July 2021 interim final rules
and implement the Federal IDR process
under sections 9816(c) and 9817(b) of
the Code, sections 716(c) and 717(b) of
ERISA, and sections 2799A-1(c) and
2799A-2(b) of the PHS Act.
The October 2021 interim final rules
provide for a Federal IDR process that
group health plans and health insurance
issuers offering group or individual health
insurance coverage and nonparticipating
providers, facilities, and providers of air
ambulance services may use to deter-
mine the out-of-network rate for items
and services that are emergency services,
8
26 CFR 54.9816-8T(b)(2)(iii)(B), 29 CFR 2590.716-8(b)(2)(iii)(B), and 45 CFR 149.510(b)(2)(iii)(B).
9
86 FR 55980, 55990 (Oct. 7, 2021).
10
26 CFR 54.9816-6T(d)(2)(i), 29 CFR 2590.716-6(d)(2)(i), and 45 CFR 149.140(d)(2)(i). Under the July 2021 interim final rules, plans and issuers are required to calculate the QPA using
underlying fee schedule rates or derived amounts when the plan or issuer has sufficient information to calculate the median of its contracted rates, but the payments under the contractual
agreements are not on a fee-for-service basis (such as bundled or capitation payments). 26 CFR 54.9816-6T(b)(2)(iii), 29 CFR 2590.716-6(b)(2)(iii), 45 CFR 149.140(b)(2)(iii). Plans and
issuers are not otherwise permitted to use underlying fee schedule rates or derived amounts to calculate the QPA.

Bulletin No. 2022–37 195 September 12, 2022
non-emergency services furnished by
nonparticipating providers with respect
to patient visits to participating facilities,
and air ambulance services furnished by
nonparticipating providers of air ambu-
lance services, where an All-Payer Model
Agreement or specified State law does
not apply. The October 2021 interim final
rules generally specify rules to implement
the Federal IDR process, including the
requirements governing the open negoti-
ation period; the initiation of the Federal
IDR process; the Federal IDR process
following initiation, including the selec-
tion of a certified IDR entity, submission
of offers, payment determinations, and
written decisions; costs of the Federal
IDR process; certification of IDR entities,
including the denial or revocation of cer-
tification of an IDR entity; and the collec-
tion of information related to the Federal
IDR process from certified IDR entities to
satisfy reporting requirements under the
statute.
The October 2021 interim final rules
provide that, not later than 30 business
days after selection of a certified IDR
entity, the certified IDR entity must select
one of the offers submitted by the plan or
issuer and the provider, facility, or pro-
vider of air ambulance services to be the
out-of-network rate for the qualified IDR
item or service.
11
For each qualified IDR
item or service, the amount by which this
out-of-network rate exceeds the cost-shar-
ing amount for the qualified IDR item or
service is the total plan or coverage pay-
ment (with any initial payment made by
the plan or issuer counted towards the
total plan or coverage payment).
The October 2021 interim final rules
state that, in selecting the offer, the certi-
fied IDR entity must consider the QPA for
the applicable year for the same or similar
item or service, or, in the case of batched
or bundled items or services, the QPA or
QPAs for the applicable year. The pream-
ble to the July 2021 interim final rules pro-
vides that if multiple items and services
are reimbursed under non-fee-for-service
contractual arrangements, such as a bun-
dled or capitated arrangement, and are
billed for under a single billing code,
plans and issuers must calculate a QPA for
each item or service using the underlying
fee schedule rates for the relevant items
and services if the underlying fee schedule
rates are available.
12
If there is no under-
lying fee schedule rate for an item or ser-
vice, the plan or issuer must calculate the
QPA using a derived amount.
13
In addi-
tion, the October 2021 interim final rules
state that the certified IDR entity must also
consider information requested by, or sub-
mitted by the parties to, the certified IDR
entity relating to the offer, to the extent a
party provides credible information that
is not otherwise prohibited under 26 CFR
54.9816-8T(c)(4)(v), 29 CFR 2590.716-
8(c)(4)(v), and 45 CFR 149.510(c)(4)(v).
The October 2021 interim final rules
also require the parties to provide certain
information to the certified IDR entity,
including practice size and practice spe-
cialty or type; geographic region used to
calculate the QPA; the QPA for the appli-
cable year for the same or similar item or
service as the qualified IDR item or ser-
vice; and, if applicable, information show-
ing that the Federal IDR process is inap-
plicable to the dispute. In addition, prior to
vacatur in the United States District Court
for the Eastern District of Texas, in the
cases of Texas Medical Association, et al.
v. United States Department of Health and
Human Services, et al., Case No. 6:21-cv-
425 (E.D. Tex.) (Texas Medical Associa-
tion) (February 23, 2022) and LifeNet, Inc.
v. United States Department of Health and
Human Services, et al., Case No. 6:22-
cv-162 (E.D. Tex.) (LifeNet) (July 26,
2022), these interim final rules specified
that the certified IDR entity may request
additional information relating to the par-
ties’ offers and must consider credible
additional information submitted, as fur-
ther described in the next paragraph, that
relates to the parties’ offers and the quali-
fied IDR item or service that is the subject
of a payment determination to determine if
the information submitted clearly demon-
strates that the QPA is materially different
from the appropriate out-of-network rate
(unless the information relates to a factor
that the certified IDR entity is prohibited
from considering). For this purpose, the
October 2021 interim final rules specify
that credible information is information
that upon critical analysis is worthy of
belief and is trustworthy.
14
Prior to vaca-
tur in Texas Medical Association, the term
“material difference” was defined to mean
a substantial likelihood that a reasonable
person with the training and qualifications
of a certified IDR entity making a pay-
ment determination would consider the
information important in determining the
out-of-network rate and view the infor-
mation as showing that the QPA is not the
appropriate out-of-network rate.
15
For items and services that are not air
ambulance services, in determining which
offer to select, the certified IDR entity
must consider the following additional
information under certain circumstances:
1. The level of training, experience,
and quality and outcomes measurements
of the provider or facility that furnished
the qualified IDR item or service (such
as those endorsed by the consensus-based
entity authorized in section 1890 of the
Social Security Act).
2. The market share held by the pro-
vider or facility or that of the plan or issuer
in the geographic region in which the qual-
ified IDR item or service was provided.
3. The acuity of the participant, benefi-
ciary, or enrollee who received the quali-
fied IDR item or service, or the complex-
ity of furnishing the qualified IDR item or
service to the participant, beneficiary, or
enrollee.
4. The teaching status, case mix, and
scope of services of the facility that fur-
nished the qualified IDR item or service,
if applicable.
5. Demonstration of good faith efforts
(or lack thereof) made by the provider or
facility or the plan or issuer to enter into
network agreements with each other, and,
11
Qualified IDR item or service has the same meaning as set forth in 26 CFR 54.9816-8T(a)(2)(xii), 29 CFR 2590.716-8(a)(2)(xii), and 45 CFR 149.510(a)(2)(xii).
12
86 FR 36893 (July 13, 2021).
13
The Departments also specify an alternative method to calculate the QPA when there is insufficient information based on contracted rates. See 26 CFR 54.9816-6T(c)(2)-(4), 29 CFR
2590.716-6(c)(2)-(4), and 45 CFR 149.140(c)(2)-(4).
14
26 CFR 54.9816-8T(a)(2)(v), 29 CFR 2590.716-8(a)(2)(v), and 45 CFR 149.510(a)(2)(v).
15
26 CFR 54.9816-8T(a)(2)(viii), 29 CFR 2590.716-8(a)(2)(viii), and 45 CFR 149.510(a)(2)(viii).

September 12, 2022 196 Bulletin No. 2022–37
if applicable, contracted rates between the
provider or facility and the plan or issuer
during the previous 4 plan years.
Under the October 2021 interim final
rules, the certified IDR entity may only
consider this information submitted by
the parties if the information is credible
and relates to the offer submitted by either
party.
16
The certified IDR entity may not
consider any information submitted on
the prohibited factors, including usual and
customary charges (including payment or
reimbursement rates expressed as a pro-
portion of usual and customary charges);
the amount that would have been billed
if the provider, facility, or provider of air
ambulance services were not subject to a
prohibition on balance billing; and pay-
ment or reimbursement rates payable by a
public payor, in whole or in part, for items
and services furnished by the providers,
facilities, or providers of air ambulance
services.
17
The October 2021 interim final rules
also provided, prior to vacatur in Texas
Medical Association and LifeNet, that after
considering the QPA, additional informa-
tion requested by the certified IDR entity
from the parties, and all of the credible
information submitted by the parties that
is consistent with the requirements and is
not prohibited information, the certified
IDR entity must select the offer closest to
the QPA, unless the certified IDR entity
determined that the credible information
submitted by the parties clearly demon-
strates that the QPA is materially different
from the appropriate out-of-network rate,
or if the offers are equally distant from the
QPA but in opposing directions. In those
cases, the October 2021 interim final rules
required the certified IDR entity to select
the offer that the certified IDR entity
determines best represents the value of
the item or service, which could be either
party’s offer.
Not later than 30 business days after
the selection of the certified IDR entity,
the certified IDR entity must notify parties
to the dispute of the selection of the offer
and provide a written decision,
18
which
must be submitted to the parties and the
Departments through the Federal IDR
portal.
19
The October 2021 interim final
rules also provided that if the certified
IDR entity did not choose the offer clos-
est to the QPA, this written decision must
include an explanation of the credible
information that the certified IDR entity
determined demonstrated that the QPA
was materially different from the appro-
priate out-of-network rate.
The October 2021 interim final rules
also implemented the Federal IDR pro-
cess for qualified IDR services that are
air ambulance services. The process for a
certified IDR entity to select an offer in a
dispute related to qualified IDR services
that are air ambulance services is essen-
tially the same as that for other qualified
IDR items or services. As with disputes
related to qualified IDR items or services
that are not air ambulance services, in
determining which offer to select, the No
Surprises Act and October 2021 interim
final rules provide that the certified IDR
entity must consider the QPA for the
applicable year for the qualified IDR
services that are air ambulance services.
The No Surprises Act and the October
2021 interim final rules likewise speci-
fied additional circumstances, in addition
to the QPA, that the certified IDR entity
must consider in making the payment
determination for air ambulance services.
With respect to air ambulance services,
the certified IDR entity is required to
consider, to the extent the parties provide
credible information, a different set of
additional circumstances:
1. The quality and outcomes measure-
ments of the provider that furnished the
services.
2. The acuity of the condition of the
participant, beneficiary, or enrollee receiv-
ing the service, or the complexity of fur-
nishing the service to the participant, ben-
eficiary, or enrollee.
3. The training, experience, and qual-
ity of the medical personnel that furnished
the air ambulance services.
4. Ambulance vehicle type, including
the clinical capability level of the vehicle.
5. Population density of the point of
pick-up (as defined in 42 CFR 414.605)
for the air ambulance (such as urban, sub-
urban, rural, or frontier).
6. Demonstrations of good faith efforts
(or lack thereof) made by the nonpartici-
pating provider of air ambulance services
or the plan or issuer to enter into network
agreements with each other and, if appli-
cable, contracted rates between the pro-
vider of air ambulance services and the
plan or issuer during the previous 4 plan
years.
As with qualified IDR items or services
that are not air ambulance services, the
October 2021 interim final rules provide
that after considering the QPA, additional
information requested by the certified IDR
entity from the parties, and all of the cred-
ible information submitted by the parties
that is consistent with the requirements and
is not prohibited information, the certified
IDR entity must select the offer closest to
the QPA, unless the certified IDR entity
determined that the credible information
submitted by the parties clearly demon-
strates that the QPA is materially different
from the appropriate out-of-network rate,
or if the offers are equally distant from the
QPA but in opposing directions. In those
cases, the October 2021 interim final rules
require the certified IDR entity to select
the offer that the certified IDR entity
determined best represents the value of
the item or service, which could be either
party’s offer.
D. Public Comments Received in
Response to the July 2021 and October
2021 Interim Final Rules
In response to the July 2021 and Octo-
ber 2021 interim final rules, the Depart-
ments received thousands of comments
16
This requirement was vacated by the District Court in Texas Medical Association.
17
26 CFR 54.9816-8T(c)(4)(v), 29 CFR 2590.716-8(c)(4)(v), and 45 CFR 149.510(c)(4)(v). For this purpose, payment or reimbursement rates payable by a public payor include payments
or reimbursement rates under the Medicare program under title XVIII of the Social Security Act, the Medicaid program under title XIX of the Social Security Act, the Children’s Health
Insurance Program under title XXI of the Social Security Act, the TRICARE program under chapter 55 of title 10, United States Code, chapter 17 of title 38, United States Code, and payment
rates for demonstration projects under section 1115 of the Social Security Act.
18
26 CFR 54.9816-8T(c)(4)(vi)(A), 29 CFR 2590.716-8(c)(4)(vi)(A), and 45 CFR 149.510(c)(4)(vi)(A).
19
The Federal IDR portal is available at https://www.nsa-idr.cms.gov and must be used throughout the Federal IDR process to maximize efficiency and reduce burden.

Bulletin No. 2022–37 197 September 12, 2022
on many different aspects of the rules.
In particular, the Departments received
many comments related to a clarifica-
tion in the preamble to the October 2021
interim final rules
20
stating that the July
2021 interim final rules do not require
the plan or issuer to calculate the partic-
ipant’s, beneficiary’s, or enrollee’s cost
sharing using the QPA for the service code
submitted by the provider or facility, and
that instead the plan or issuer could cal-
culate the participant’s, beneficiary’s, or
enrollee’s cost sharing using the QPA for
a downcoded service code that the plan
or issuer determined was more appropri-
ate. Many of these comments addressed
the information required by the July 2021
interim final rules that must be shared
about the QPA, the importance of this dis-
closure, and how additional disclosures
related to the QPA would be useful in the
context of the Federal IDR process, par-
ticularly when the QPA is based on a ser-
vice code or modifier that is different than
the one the provider or facility billed. The
Departments also received many com-
ments related to the payment determina-
tion standards under the Federal IDR pro-
cess, including the provisions that govern
the certified IDR entity’s consideration of
the enumerated factors. These final rules
address only the provisions related to
these comments, and they make changes
in light of the decisions in Texas Medi-
cal Association and LifeNet. The Depart-
ments intend to address comments related
to other provisions of the July 2021 and
October 2021 interim final rules, includ-
ing comments received in response to the
July 2021 interim final rules related to
the disclosure requirements that are not
specifically related to downcoded service
codes, at a later date.
1. QPA Disclosure Requirements
With respect to the information that
must be shared about the QPA, the
Departments received comments on both
the July 2021 interim final rules and the
October 2021 interim final rules support-
ing the disclosure requirement and empha-
sizing the importance of ensuring that the
QPA and other information related to the
item or service are provided to providers,
facilities, and providers of air ambulance
services at the time of the initial payment
or notice of denial of payment. Many
commenters on the July 2021 interim final
rules stressed that the methodology to cal-
culate the QPA should be transparent, and
that the Departments should expand the
range of information that is shared with
providers, facilities, and providers of air
ambulance services with the QPA. Some
commenters felt the degree of disclosure
was insufficient, and that it provided too
much power and discretion to plans and
issuers. Others, however, questioned
whether plans, in particular, would be able
to obtain the information required under
the July 2021 interim final rules, as much
of the information may be in the control
of vendors or other service providers. In
particular, the Departments received com-
ments in response to the July 2021 interim
final rules and the October 2021 interim
final rules requesting that the disclosures
that must be provided with each initial
payment or notice of denial of payment
include additional information about how
the QPA was determined to ensure that
providers, facilities, and providers of air
ambulance services have sufficient infor-
mation when the Federal IDR process is
used for a payment determination. For
example, commenters requested that plans
and issuers be required, without a request,
to provide information on the number of
contracts and the geographic region used
to calculate the QPA, whether the QPA
is based on downcoding
21
of the billed
claim, information about the use of mod-
ifiers in calculating the QPA, the types of
specialties and subspecialties that have
contracted rates included in the data set
used to determine the QPA, and whether
bonuses and supplemental payments were
paid to in-network providers.
The manner in which items and ser-
vices are coded, including the concept of
downcoding claims was reflected in both
the July 2021 interim final rules and the
October 2021 interim final rules. The pre-
amble to the July 2021 interim final rules
noted that it is important that the QPA
methodology account for modifiers that
affect payment rates.
22
The preamble to
the October 2021 interim final rules noted
that the Departments are aware that some
plans and issuers review claims and alter
the service code or modifier submitted by
the provider or facility to another service
code or modifier that the plan or issuer
determines to be more appropriate (a
practice commonly referred to as “down-
coding” when the adjustment results in a
lower reimbursement, as noted in the pre-
amble to the October 2021 interim final
rules).
23
Some commenters expressed
concern that plans and issuers may calcu-
late the QPA for a lower level service code
(and/or modifier) instead of calculating
the QPA for the particular service code or
modifier specified in the claim submitted
for reimbursement. These commenters
stated that it is important for providers
and facilities to know whether the plan or
issuer has downcoded a particular claim
that is subject to the balance billing protec-
tions in the No Surprises Act to ensure that
providers receive information that may be
relevant to the open negotiation process
and that could inform a provider’s offer
in the Federal IDR process, and which the
provider has no other means of ascertain-
ing. Several commenters requested that
these final rules require plans and issuers
to disclose whether the claim has been
downcoded for purposes of computing the
QPA and include an explanation of why
the claim was downcoded, as well as what
the QPA would have been had the claim
not been downcoded.
20
See 86 FR 55997-98 n.35.
21
Downcode is defined in these final rules at 26 CFR 54.9816-6, 29 CFR 2590.716-6, and 45 CFR 149.30, to mean the alteration by a plan or issuer of a service code to another service code,
or the alteration, addition, or removal by a plan or issuer of a modifier, if the changed code or modifier is associated with a lower QPA than the service code or modifier billed by the provider,
facility, or provider of air ambulance services.
22
The preamble to the July 2021 interim final rules also noted that modifiers affect the payment rate because, for example, 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 required. See 86 FR 36891.
23
See 86 FR 55997-98.

September 12, 2022 198 Bulletin No. 2022–37
2. Payment Determination Standards
under the Federal IDR Process
With respect to the payment deter-
mination standards under the Federal
IDR process, the Departments received
numerous comments from various stake-
holders about the provisions that govern
the certified IDR entity’s consideration of
the statutory factors during the payment
determination process. Many comment-
ers supported the approach set forth in
the October 2021 interim final rules that
directs the certified IDR entity to begin
with the QPA as a baseline when making a
payment determination, which those com-
menters highlighted as an important part
of the payment determination process that
would ensure that the surprise billing pro-
visions lead to lower health care costs for
all consumers. Furthermore, some com-
menters stated that the approach taken
in the October 2021 interim final rules is
crucial to achieving the budget savings
the Congressional Budget Office calcu-
lated. Those commenters stated that the
approach taken would shield consumers
from surprise bills and ever higher insur-
ance premium costs. Commenters stated
that the October 2021 interim final rules
reinforce the statutory directive that the
QPA is the primary consideration for the
certified IDR entity. Commenters also
stated this use of the QPA represents a
reasonable, market-based rate and would
encourage greater participation in health
plan networks.
Commenters noted that there may be
circumstances in which the appropriate
out-of-network rate would exceed the
QPA, and that the October 2021 interim
final rules properly provide a pathway
for the certified IDR entity to reach that
determination when it can be justified.
These commenters highlighted that noth-
ing in the October 2021 interim final rules
required a certified IDR entity to default to
the selection of the QPA or the offer clos-
est to it, but rather that the rule correctly
mandated that all credible information be
considered. Commenters also stated that it
was not unreasonable to require a party to
document why the QPA is not the appro-
priate payment amount. Other comment-
ers raised concerns about giving the same
weight to all factors because many of the
additional circumstances outlined in the
rule, such as patient acuity and complex-
ity of care, could already be incorporated
into the QPA calculation. Commenters
also noted that the October 2021 interim
final rules provide clear guidance to cer-
tified IDR entities, which would reduce
variability in payment determinations and
better position the parties to settle disputes
before reaching the Federal IDR process,
by giving the parties a better sense of how
payment determinations would be made.
Other commenters disagreed with the
approach under the October 2021 interim
final rules and expressed opposition to the
emphasis placed on the QPA during the
Federal IDR process. Many of these com-
menters criticized the rule as establish-
ing a rebuttable presumption in favor of
the QPA as the out-of-network rate while
failing to equip the parties with the neces-
sary information to rebut the presumption.
Some commenters stated that the Depart-
ments disregarded bipartisan Congressio-
nal intent and tipped the scales in the Fed-
eral IDR process in favor of health plans
and issuers. Commenters expressed con-
cern that emphasizing the QPA ignores the
complexity of billing factors, such as mod-
ifiers and the practice of bundling multiple
health care services under a single billing
code, and creates an incentive for the plan
or issuer to downcode claims in bad faith.
Commenters also expressed concern that
the prominence of the QPA could drive
down reimbursement rates for providers
that are currently reimbursed above the
median contracted rate, which they argued
could jeopardize network adequacy and
viability of physician practices and, com-
menters claimed, further drive down the
QPA. A number of commenters stated
that the emphasis given to the QPA would
provide an incentive for plans and issuers
to prefer out-of-network care, potentially
resulting in reduced networks, because,
ultimately, plans and issuers would pay
the QPA rather than a market rate driven
by the particular circumstances of the care
delivered. Commenters also asserted that
showing that the QPA is materially differ-
ent from the appropriate out-of-network
rate would burden providers and facilities
who lack the resources to gather and sub-
mit this information during the Federal
IDR process.
Commenters who disagreed with the
approach set forth in the October 2021
interim final rules stated that certain provi-
sions created a rebuttable presumption that
the QPA is the appropriate out-of-network
rate, and these commenters requested that
the Departments remove these provisions,
and instead issue rulemaking and guid-
ance that instructs certified IDR entities
to consider all permissible and relevant
information submitted by the parties.
Other commenters suggested alternative
approaches for the provisions that govern
the certified IDR entity’s consideration of
the enumerated factors. Some comment-
ers requested that equal weight be given to
the QPA and the contracted rates between
the provider or facility and plan or issuer
during the previous 4 years. Other com-
menters requested that the Departments
replace the QPA as the baseline in the Fed-
eral IDR process with a different amount,
such as the actual amount paid to a partic-
ular out-of-network provider for the same
or similar item or service or the median
contracted rate based on the amount nego-
tiated under each contract the provider has
with a plan or issuer.
3. Payment Determinations for Air
Ambulance Services
A majority of commenters raised sim-
ilar points with regard to the Federal IDR
process for both non-air ambulance items
and services and air ambulance services.
Some supported the emphasis on the QPA,
while others disagreed with the use of the
QPA as the baseline in the Federal IDR
process. These commenters raised con-
cerns about the transparency of the calcu-
lation of the QPA, and questioned whether
the QPA is the appropriate out-of-network
rate. Several commenters stressed that the
use of the QPA as a baseline also raises
concerns that are unique to air ambulance
services. Some commenters highlighted
the prevalence of single-case agreements
for air ambulance services, which the
commenters interpreted as including set-
tlements of post-service claims. The com-
menters asserted that, because of the prev-
alence of these agreements, the QPA does
not adequately reflect market rates for air
ambulance services and the QPA would be
lower than appropriate. Other comment-
ers argued that hospital-based providers
of air ambulance services are subsidized
by the related hospitals, so including the

Bulletin No. 2022–37 199 September 12, 2022
rates of these providers in the QPA cal-
culation with the rates of other air ambu-
lance providers would improperly lower
the QPA and therefore the use of the
QPA as a baseline would not be appro-
priate. Another commenter argued that
the negotiated rates of the few in-network
providers for air ambulance services tend
to be inflated by their disproportionately
large market power, leading to artificially
high air ambulance rates and an inflated
QPA value. These commenters proposed
that the rules should direct the certified
IDR entities to take into account market
concentration and prices charged by non-
profit affiliated air ambulance providers
because air ambulance services owned
by private equity and publicly-traded
companies receive higher payments and
subsequently generate larger and more
frequent surprise bills than their non-prof-
it-affiliated counterparts. Other comment-
ers disagreed and stated that the Federal
IDR process should not make such a dis-
tinction among providers of air ambulance
services. One commenter stated that Con-
gress clearly recognized the variation in
air ambulance services in distinguishing
the six “additional circumstances”
24
spe-
cific to air ambulance services that certi-
fied IDR entities should consider.
4. The Certified IDR Entity’s Written
Decision
With respect to the certified IDR enti-
ty’s written decision, several commenters
supported the requirement for the certified
IDR entity to provide a written decision,
including the explanation of the underly-
ing rationale for the certified IDR entity’s
determination. Other commenters stressed,
however, that requiring the explanation
of the rationale only if the certified IDR
entity determined that the QPA was mate-
rially different from the appropriate out-
of-network rate could discourage certified
IDR entities from considering additional
factors. A few commenters requested an
explanation be required when the certified
IDR entity selected the amount closest to
the QPA, including how the information
about the other required considerations
was assessed while others stated that a
robust explanation should be required
of the certified IDR entity in all cases.
Commenters also stated that requiring
an explanation in all cases would ensure
that certified IDR entities considered all
information submitted by the parties and
allow the parties to fully understand the
rationale behind the certified IDR entity’s
determination. Commenters asserted that
this could improve the quality and effi-
ciency of the IDR process over time, as
parties become better informed as to the
types of information certified IDR enti-
ties find credible and the circumstances in
which the parties should pursue the IDR
process. Other commenters requested the
Departments either eliminate the require-
ment for a written decision or require a
similar analysis in all written decisions.
E. Litigation Regarding Requirements
Related to Surprise Billing; Part II
On October 28, 2021, the Texas Medi-
cal Association, a trade association repre-
senting physicians, and a Texas physician
filed a lawsuit against the Departments
and the Office of Personnel Management
(OPM), asserting that certain provisions
of the October 2021 interim final rules
relating to the certified IDR entities’ con-
sideration of the QPA, as well as addi-
tional factors related to items and ser-
vices that are not air ambulance services,
should be vacated. Plaintiffs argued that
the interim final rules ignored Congress’s
intent that certified IDR entities weigh
the QPA and other factors without favor-
ing any factor, and they asserted that, as
a result, the rules would skew IDR results
in favor of plans and issuers. On February
23, 2022, the United States District Court
for the Eastern District of Texas (District
Court) issued a memorandum opinion and
order that vacated portions of the Octo-
ber 2021 interim final rules governing
aspects of the Federal IDR process related
to non-air ambulance qualified IDR items
or services including: (1) the definition of
“material difference;” (2) the requirement
that a certified IDR entity must select the
offer closest to the QPA unless the certi-
fied IDR entity determines that credible
information submitted by either party
under 26 CFR 54.9816-8T(c)(4)(i), 29
CFR 2590.716-8(c)(4)(i), and 45 CFR
149.510(c)(4)(i) clearly demonstrates that
the QPA is materially different from the
appropriate out-of-network rate for non-
air ambulance qualified IDR items or ser-
vices, or if the offers are equally distant
from the QPA but in opposing directions;
(3) the requirement that the certified IDR
entity may only consider the additional
information submitted by either party to
the extent that the credible information
related to the circumstances under 26 CFR
54.9816-8T(c)(4)(i), 29 CFR 2590.716-
8(c)(4)(i), and 45 CFR 149.510(c)(4)
(i) clearly demonstrates that the QPA is
materially different from the appropriate
out-of-network rate for non-air ambu-
lance qualified IDR items or services; (4)
the dispute resolution examples; and (5)
the requirement that, if the certified IDR
entity does not choose the offer closest to
the QPA, the certified IDR entity’s written
decision must include an explanation of
the credible information that the certified
IDR entity determined demonstrated that
the QPA was materially different from the
appropriate out-of-network rate, based on
the factors certified IDR entities are per-
mitted to consider with respect to the qual-
ified IDR item or service.
25
On April 27, 2022, LifeNet, Inc., a pro-
vider of air ambulance services, filed a
lawsuit against the Departments and OPM
seeking the vacatur of additional provi-
sions of the October 2021 interim final
rules applicable to air ambulance services.
In particular, LifeNet alleged that the
requirement codified in the last sentence
of 26 CFR 54.9817-2T(b)(2), 29 CFR
2590.717-2(b)(2), and 45 CFR 149.520(b)
(2) that the certified IDR entity may
24
Under section 9817(b)(5)(C) of the Code, section 717(b)(5)(C) of ERISA, and section 2799A-2(b)(5)(C) of the PHS Act, those six additional circumstances are: (1) the quality and outcomes
measurements of the provider that furnished such services; (2) the acuity of the individual receiving such services or the complexity of furnishing such services to such individual; (3) the
training, experience, and quality of the medical personnel that furnished such services; (4) the ambulance vehicle type, including the clinical capability level of such vehicle; (5) population
density of the point of pick-up (such as urban, suburban, rural, or frontier); and (6) demonstrations of good faith efforts (or lack of good faith efforts) made by the nonparticipating provider
or nonparticipating facility or the plan or issuer to enter into network agreements and, if applicable, contracted rates between the provider and the plan or issuer, as applicable, during the
previous 4 plan years.
25
Tex. Med. Ass’n, et al. v. U. S. Dept. of Health and Human Servs., et al., Case No. 6:21-cv-425 (E.D. Tex.).

September 12, 2022 200 Bulletin No. 2022–37
consider information submitted by a party
only if the information “clearly demon-
strate[s] that the qualifying payment
amount is materially different from the
appropriate out-of-network rate” should
be vacated. On July 26, 2022, the District
Court issued a memorandum opinion and
order vacating this language.
26
F. Scope and Purpose of This Rulemaking
As discussed in more detail later in this
preamble, upon review of the comments
the Departments received on the informa-
tion that must be shared about the QPA
when a service is downcoded and with
respect to the Federal IDR process, and in
light of the District Court’s memorandum
opinions and orders in Texas Medical
Association and LifeNet, the Departments
have determined that it is appropriate to
issue these final rules to finalize parts of
the July 2021 and October 2021 interim
final rules related to the information
that must be disclosed about the QPA
under 26 CFR 54.9816-6T(d), 29 CFR
2590.716-6(d), and 45 CFR 149.140(d)
to address downcoding; related to the
certified IDR entity’s consideration of
the statutory factors when making a pay-
ment determination under the Federal
IDR process at 26 CFR 54.9816-8T(c)
(4)(iii)-(iv) and 54.9817T-2(b), 29 CFR
2590.716-8(c)(4)(iii)-(iv) and 2590.717-
2(b), and 45 CFR 149.510(c)(4)(iii)-(iv)
and 149.520(b); and related to the certi-
fied IDR entity’s written decision at 26
CFR 54.9816-8T(c)(4)(vi)(B), 29 CFR
2590.716-8(c)(4)(vi)(B), and 45 CFR
149.510(c)(4)(vi)(B). These final rules
also include changes to remove from the
regulations the language vacated by the
District Court.
This rulemaking is purposefully nar-
row in scope and is intended to address
only certain issues critical to the imple-
mentation and effective operation of the
Federal IDR process. The Departments
intend to finalize the remaining provisions
of the July 2021 and October 2021 interim
final rules after further consideration of
comments.
II. Overview of Final Rules
A. Information to be Shared About the
Qualifying Payment Amount
As described earlier in this preamble,
the July 2021 interim final rules require
plans and issuers to make certain disclo-
sures with each initial payment or notice
of denial of payment. When the QPA
serves as the recognized amount, or as the
amount upon which cost sharing is based
with respect to air ambulance services,
plans and issuers must disclose the QPA
and certain information related to the QPA
for the item or service involved, as well
as certain additional information, upon
request of the provider, facility, or pro-
vider of air ambulance services for each
item or service involved.
27
As stated in the preamble to the July
2021 interim final rules, the Departments
seek to ensure transparent and meaning-
ful disclosure of information relating to
the calculation of the QPA for providers,
facilities, and providers of air ambulance
services, while at the same time minimiz-
ing administrative burdens on health plans
and issuers and on the Federal IDR pro-
cess. The Departments sought to balance
those competing interests by, on the one
hand, requiring plans and issuers to make
certain disclosures with each initial pay-
ment or notice of denial of payment and
to provide certain additional information
upon request by the provider, facility, or
provider of air ambulance services and, on
the other hand, avoiding more wide-reach-
ing disclosure requirements that could add
to the costs and burdens of adjudicating
claims subject to the surprise billing pro-
tections in the No Surprises Act.
After review of the comments submit-
ted on the July 2021 interim final rules
regarding downcoding and on the clar-
ification in the preamble to the October
2021 interim final rules stating that, under
the July 2021 interim final rules, a plan
or issuer may calculate the QPA using a
downcoded service code, including the
comments suggesting how the disclo-
sure requirements could be modified in
light of this clarification, the Departments
have concluded that additional disclosure
of information about the QPA is appro-
priate.
28
This additional disclosure will
ensure that providers, facilities, and pro-
viders of air ambulance services receive
information regarding the QPA that aids
in their meaningful participation in open
negotiation and the Federal IDR process
in all payment disputes that involve qual-
ified items or services that have been sub-
ject to downcoding.
Specifically, the Departments are of the
view that additional information would be
helpful in cases in which the plan or issuer
has downcoded the billed claim to ensure
that providers, facilities, and providers of
air ambulance services receive the rele-
vant information from a plan or issuer that
is needed to engage in a productive open
negotiation period. Without information
on what the QPA would have been had the
claim not been downcoded, the provider,
facility, or provider of air ambulance ser-
vices may be at a disadvantage compared
to the plan or issuer. In cases in which the
plan or issuer has downcoded the billed
claim and asserts that the QPA that cor-
responds with the downcoded claim is the
correct total payment amount, it is of par-
ticular importance that the provider, facil-
ity, or provider of air ambulance services
knows that the item or service in question
has been downcoded and has information
regarding both the QPA for the down-
coded claim and the amount that would
have been the QPA had the service code
or modifier not been downcoded. In the
Departments’ view, this information may
be critical to the provider, facility, or pro-
vider of air ambulance services in devel-
oping an offer or submitting information
if it believes that the QPA calculated by
the plan or issuer does not best represent
the value of the item or service provided.
Furthermore, the requirement to dis-
close this additional information will
increase transparency by ensuring that the
provider, facility, or provider of air ambu-
lance services has sufficient information
about the QPA to submit an informed
offer, including how it relates to the billed
26
LifeNet, Inc. v. United States Department of Health and Human Services, et al., Case No. 6:22-cv-162 (E.D. Tex.).
27
26 CFR 54.9816-6T(d), 29 CFR 2590.716-6(d), and 45 CFR 149.140(d).
28
86 FR 55997-98 (October 7, 2021).

Bulletin No. 2022–37 201 September 12, 2022
claim. This increased transparency will
aid in the open negotiation process by
helping providers, facilities, and providers
of air ambulance services to understand
how the plan or issuer arrived at the rel-
evant QPA in relation to the billed claim.
This increased transparency will inform
the provider’s, facility’s, or provider of air
ambulance services’ decision whether to
initiate open negotiation and the Federal
IDR process, as well as its determination
of the amount that it submits as its offer.
29

Further, this requirement will help a pro-
vider, facility, or provider of air ambulance
services ascertain what information to
provide the certified IDR entity to demon-
strate that the provider’s, facility’s, or pro-
vider of air ambulance services’ offer best
represents the value of the item or service.
If submitted for the certified IDR entity’s
consideration, this information will also
aid the certified IDR entity in selecting the
offer that best represents the value of the
item or service by ensuring that the certi-
fied IDR entity will have additional perti-
nent information about the item or service.
For example, in a dispute that concerns a
qualified IDR service for which the plan
or issuer downcoded the billed service
code, the provider, facility, or provider of
air ambulance services may present infor-
mation showing that the billed service
code was more appropriate than the down-
coded service code. In such an instance,
the certified IDR entity could determine
that the QPA based on the downcoded ser-
vice code does not sufficiently encompass
the complexity of furnishing the qualified
IDR service because it was based on a
service code for a different service from
the one furnished. If the certified IDR
entity makes such a determination, then
the amount that would have been the QPA
had the service code or modifier not been
downcoded may be relevant to the certi-
fied IDR entity in determining which offer
best represents the value of the qualified
IDR item or service.
Therefore, the Departments are issuing
these final rules to add a definition for the
term “downcode” to 26 CFR 54.9816-6,
29 CFR 2590.716-6, and 45 CFR 149.140;
and final rules under 26 CFR 54.9816-
6(d), 29 CFR 2590.716-6(d), and 45 CFR
149.140(d) to require additional informa-
tion about the QPA that must be provided
with an initial payment or notice of denial
of payment, without a provider, facility, or
provider of air ambulance services having
to make a request for this information,
in cases in which the plan or issuer has
downcoded the billed claim. Although
“downcoding” is being defined for the
first time in these final rules, the concept
was reflected in both sets of interim final
rules. Though neither set of interim final
rules specifically defines a term for this
practice, the interim final rules described
the practice and explained that it was
permissible under certain circumstances.
See 86 FR 55997-98 n.35 (clarification in
October 2021 interim final rules regarding
requirements of July 2021 interim final
rules). Indeed, as described previously,
the Departments received several com-
ments in response to the July 2021 interim
final rules and the October 2021 interim
final rules requesting that the disclosures
that must be provided with each initial
payment or notice of denial of payment
include additional information about how
the QPA was calculated to ensure that
providers, facilities, and providers of air
ambulance services have sufficient infor-
mation when the Federal IDR process is
used for a payment determination. For
example, commenters requested that plans
and issuers be required, without a request,
to provide information on the number of
contracts and the geographic region used
to calculate the QPA, whether the QPA
was calculated based on a downcoded
billed claim, information about the use of
modifiers in calculating the QPA, the types
of specialties and subspecialties that have
contracted rates included in the data set
used to determine the QPA, and whether
bonuses and supplemental payments were
paid to in-network providers.
These final rules define the term
“downcode,” as described in the preamble
to the October 2021 interim final rules, to
mean the alteration by a plan or issuer of
a service code to another service code, or
the alteration, addition, or removal by a
plan or issuer of a modifier, if the changed
code or modifier is associated with a lower
QPA than the service code or modifier
billed by the provider, facility, or provider
of air ambulance services.
These final rules also specify that,
if a QPA is based on a downcoded ser-
vice code or modifier, in addition to the
information already required to be pro-
vided with an initial payment or notice of
denial of payment, a plan or issuer must
provide a statement that the service code
or modifier billed by the provider, facil-
ity, or provider of air ambulance services
was downcoded; an explanation of why
the claim was downcoded, including a
description of which service codes were
altered, if any, and which modifiers were
altered, added, or removed, if any; and
the amount that would have been the QPA
had the service code or modifier not been
downcoded.
The Departments are continuing to
consider comments on the July 2021
interim final rules about whether addi-
tional disclosures related to the QPA cal-
culation methodology should be required
to be provided with an initial payment
or notice of denial of payment, or upon
request. The Departments note that the
statute places the responsibility for mon-
itoring the accuracy of plans’ and issuers’
QPA calculation methodologies with the
Departments (and applicable state author-
ities) by requiring audits of plans’ and
issuers’ QPA calculation methodologies,
30

and the Departments have committed to
conducting audits. The Departments also
stress that payment determinations in the
Federal IDR process should center on a
determination of a total payment amount
for a particular item or service based on
the facts and circumstances of the dispute
at issue, rather than an examination of a
plan’s or issuer’s QPA methodology.
B. Payment Determinations Under the
Federal IDR Process
The October 2021 interim final rules
provide that, not later than 30 business
29
The Departments understand that many plans and issuers make initial payments that are equivalent to or are informed by the corresponding QPA for the item or service at issue. As noted
in in the preamble to the July 2021 interim final rules, the initial payment should be an amount that the plan or issuer reasonably intends to be payment in full based on the relevant facts and
circumstances, which may be higher or lower than the QPA, as required under the terms of the plan or coverage, prior to the beginning of any open negotiation or initiation of the Federal
IDR process. 86 FR 36872, 36900 (July 13, 2021)
30
86 FR 36872, 36899 (July 13, 2021).

September 12, 2022 202 Bulletin No. 2022–37
days after the selection of the certified
IDR entity, the certified IDR entity must
select one of the offers submitted by the
plan or issuer or the provider, facility, or
provider of air ambulance services as the
out-of-network rate for the qualified IDR
item or service. In determining which offer
to select, the October 2021 interim final
rules provided, prior to Texas Medical
Association and LifeNet, that the certified
IDR entity must first look to the QPA, as it
represents a reasonable market-based pay-
ment for relevant items and services, and
then to additional information requested
by the certified IDR entity from the par-
ties and other additional information sub-
mitted by the parties. After considering
the QPA and additional information, the
October 2021 interim final rules required
the certified IDR entity to select the offer
closest to the QPA, unless the certified
IDR entity determined that the additional
information requested by the certified
IDR entity and the credible information
submitted by the parties demonstrated that
the QPA was materially different from the
appropriate out-of-network rate, or if the
offers were equally distant from the QPA
but in opposing directions. In instances in
which the certified IDR entity determined
that the credible information submitted
by the parties clearly demonstrated that
the QPA was materially different from the
appropriate out-of-network rate, or when
the offers were equally distant from the
QPA but in opposing directions, the Octo-
ber 2021 interim final rules state that the
certified IDR entity must select the offer
that the certified IDR entity determined
best represents the value of the item or ser-
vice, which could be either party’s offer.
As stated earlier in this preamble, on
February 23, 2022 and July 26, 2022, the
District Court in Texas Medical Associ-
ation and LifeNet issued memorandum
opinions and orders that vacated certain
provisions of the October 2021 interim
final rules that govern aspects of the Fed-
eral IDR process, including provisions that
provided guidance to certified IDR enti-
ties on selecting the appropriate out-of-
network rate in a payment determination.
In the October 2021 interim final rules,
the Departments required certified IDR
entities to view the QPA as an appropri-
ate payment amount, subject to consid-
eration of the information submitted by
the parties related to the additional cir-
cumstances outlined in the statute, as a
mechanism to ensure that certified IDR
entities approached making payment
determinations in the Federal IDR process
in a consistent manner. The regulatory text
required certified IDR entities to select the
offer closest to the QPA unless the certi-
fied IDR entity determined that credible
information submitted by a party clearly
demonstrated that the QPA was materially
different from the appropriate out-of-net-
work rate. The preamble to the October
2021 interim final rules described the rel-
evant instructions to certified IDR entities
as a “rebuttable presumption” in favor of
the QPA.
The District Court in Texas Medical
Association and LifeNet vacated the por-
tions of the October 2021 interim final
rules that it construed as creating a rebutta-
ble presumption in favor of the QPA. The
Departments note that these final rules are
not intended to impose a rebuttable pre-
sumption for payment determinations in
the Federal IDR process. The regulatory
text in these final rules does not include
the provisions that the District Court rea-
soned would have the effect of imposing
such a presumption.
The Departments note that, in all cases,
the QPA, which is generally based on the
median contracted rate for a qualified
IDR item or service, will be relevant to
a payment determination, as it represents
the typical payment amount that a plan or
issuer that is a party to a payment deter-
mination will pay in-network providers,
facilities, and providers of air ambulance
services for that particular qualified IDR
item or service. The Departments also
note that, to the extent the QPA is calcu-
lated in a manner that is consistent with the
detailed rules issued under the July 2021
interim final rules, and is communicated in
a way that satisfies the applicable disclo-
sure requirements, the QPA will meet the
credibility requirement that applies to the
additional information and circumstances
set forth in these final rules.
31
The cred-
ibility requirement is designed to ensure
that the additional information submitted
by the parties to a payment determination
meet the same credibility standard that the
QPA already meets through other mech-
anisms, by virtue of the requirements
related to the QPA set forth in the July
2021 interim final rules. The Departments
also note that the credibility require-
ment is designed to ensure that certified
IDR entities have clear guidance on how
to evaluate potentially voluminous and
complex information in a methodical and
consistent manner. Absent clear guidance
on a process for evaluating the different
factors, there would be no guarantee of
consistency in how certified IDR entities
reached determinations in different cases.
The Departments are of the view that
this guidance is also important because
the QPA must be a quantitative figure,
like the offers that will be submitted in a
payment determination. Generally, these
quantitative figures will be unlike the
information received related to the addi-
tional circumstances, which will often be
qualitative and open to subjective evalu-
ation. Although the QPA is a quantitative
figure, the amount that best represents the
value of the qualified IDR items and ser-
vices may be more or less than the QPA
due to additional circumstances that are
not easily quantifiable such as the care
setting or the teaching status of the facil-
ity. It therefore is reasonable to ensure that
certified IDR entities consider the QPA,
a quantitative figure, and then consider
the additional, likely-qualitative factors,
when determining the out-of-network rate
– another quantitative figure.
1. Requirement to Consider the QPA and
Additional Information Submitted
In light of the Texas Medical Asso-
ciation and LifeNet decisions, and in
response to comments received on these
provisions, the Departments are finalizing
rules that remove the provisions that the
31
To the extent there is a question whether a plan or issuer has complied with the July 2021 interim final rules’ requirements for calculating the QPA, it is the Departments’ (or applicable
State authorities’) responsibility, not the certified IDR entity’s, to monitor the accuracy of the plan’s or issuer’s QPA calculation methodology by conducting an audit of the plan’s or issuer’s
QPA calculation methodology. However, a provider or facility may always assert to the certified IDR entity that additional information points in favor of the selection of its offer as the out-
of-network payment amount, even where that offer is for a payment amount that is different from the QPA.

Bulletin No. 2022–37 203 September 12, 2022
District Court vacated and that adopt stan-
dards for making a payment determination
that are intended to achieve the statutory
aims articulated earlier in this preamble.
Congress granted the Departments
statutory authority to “establish by regu-
lation one independent dispute resolution
process” under which certified IDR enti-
ties determine the amount of payment
for an out-of-network item or service.
32

The Federal IDR process that the Depart-
ments establish under this authority is to
be “in accordance with the succeeding
provisions of” the cited statutory subsec-
tions,
33
including the statutory provisions
describing the factors for the certified
IDR entity to consider in determining the
out-of-network payment amount. Under
sections 9816(c)(5) and 9817(b)(5) of the
Code, sections 716(c)(5) and 717(b)(5) of
ERISA, and sections 2799A-1(c)(5) and
2799A-2(b)(5) of the PHS Act, the stat-
ute provides that with respect to payment
determinations, the certified IDR entity
must always consider the QPA without the
parties specifically bringing it to the certi-
fied IDR entity’s attention. Next, the stat-
ute provides that the certified IDR entity
must also consider “additional informa-
tion” or “additional circumstances” sub-
mitted to the certified IDR entity.
As explained later in this preamble,
the Departments are of the view that it
is appropriate to exercise their author-
ity under this provision, and that it is in
accordance with these statutory provi-
sions, to adopt a Federal IDR process that
encourages a consistent methodology for
evaluation of information when making a
payment determination. The Departments
are of the view that there is value in ensur-
ing that all certified IDR entities approach
payment determinations in a similar man-
ner, which will promote consistency and
predictability in the process, thereby low-
ering administrative costs and encourag-
ing consistency in appropriate payments
for out-of-network services.
34
The statute
requires certified IDR entities to always
consider the QPA when making a payment
determination, as it is the one statutory
consideration that will always be present
in each payment determination, whereas
the parties may or may not choose to sub-
mit information related to the additional
circumstances as part of their offer. Con-
sideration of the QPA, which is the first-
listed statutory factor and a quantitative
figure, will aid certified IDR entities in
their consideration of each of the other
statutory factors, as these entities will then
be in a position to evaluate whether the
“additional” factors present information
that may not have already been captured
in the calculation of the QPA.
As commenters noted, there may be
instances in which the QPA would not
adequately account for one or more of the
additional factors. The Departments note
that these final rules do not require cer-
tified IDR entities to default to the offer
closest to the QPA or to apply a presump-
tion in favor of that offer. The Depart-
ments are of the view that it will often be
the case that the QPA represents an appro-
priate out-of-network rate, as the QPA is
largely informed by similar information
to what would be provided as informa-
tion in support of the additional statutory
circumstances. Nonetheless, the Depart-
ments acknowledge that the additional
factors may be relevant in determining the
appropriate out-of-network rate, because
the QPA may not account for information
specific to a particular item or service.
Therefore, these final rules do not require
the certified IDR entity to select the offer
closest to the QPA. Rather, these final
rules specify that certified IDR entities
should select the offer that best represents
the value of the item or service under dis-
pute after considering the QPA and all
permissible information submitted by the
parties.
Accordingly, in determining which
offer to select during the Federal IDR pro-
cess under these final rules, the certified
IDR entity must consider the QPA for the
applicable year for the same or similar
item or service and then must consider
all additional information submitted by a
party to determine which offer best reflects
the appropriate out-of-network rate, pro-
vided that the information relates to the
party’s offer for the payment amount for
the qualified IDR item or service that is
the subject of the payment determination
(and does not include information that
the certified IDR entity is prohibited from
considering in making the payment deter-
mination under section 9816(c)(5)(D) of
the Code, section 716(c)(5)(D) of ERISA,
and section 2799A-1(c)(5)(D) of the PHS
Act).
35
For this purpose, the Departments
understand that information requested by
a certified IDR entity, or submitted by a
party, would be information relating to a
party’s offer if it tends to show that the
offer best represents the value of the item
or service under dispute. Therefore, these
rules require the certified IDR entity to
evaluate whether the information relates
to the offer submitted by either party for
the payment amount for the qualified IDR
item or service that is the subject of the
payment determination. In considering
this additional information, the certi-
fied IDR entity should evaluate whether
information that is offered is credible and
should not give weight to information that
is not credible.
36
The appropriate out-of-
network rate must be the offer that the
certified IDR entity determines best rep-
resents the value of the qualified IDR item
or service.
For non-air ambulance items and ser-
vices, the additional information to be
considered includes information related to
the following factors:
1. the level of training, experience, and
quality and outcomes measurements
of the provider or facility that fur-
nished the qualified IDR item or ser-
vice (such as those endorsed by the
consensus-based entity authorized in
section 1890 of the Social Security
Act);
32
See section 9816(c)(2)(A) of the Code, section 716(c)(2)(A) of ERISA, and section 2799A-1(c)(2)(A) of the PHS Act; see also section 9817(b)(2)(A) of the Code, section 717(b)(2)(A) of
ERISA, and section 2799A-2(b)(2)(A) of the PHS Act.
33
Id.
34
See Cong. Budget Office, H.R. 5826, the Consumer Protections Against Surprise Medical Bills Act of 2020, as Introduced on February 10, 2020: Estimated Budgetary Effects at 1 (Feb. 11,
2020) (arbitrators “would be instructed to look to the health plan’s median payment rate for in-network rate care,” and as a result “average payment rates for both in- and out-of-network care
would move toward the median in-network rate,” thereby lowering health insurance premiums and budget deficits); see also H.R. Rep. No. 116-615, pt. I, at 57-58 (2020).
35
See also 26 CFR 54.9816-8T(c)(4)(v), 29 CFR 2590.716-8(c)(4)(v), and 45 CFR 149.510(c)(4)(v).
36
For this purpose, credible information is information that upon critical analysis is worthy of belief and is trustworthy. 26 CFR 54.9816-8T(a)(2)(v), 29 CFR 2590.716-8(a)(2)(v), and 45
CFR 149.510(a)(2)(v).

September 12, 2022 204 Bulletin No. 2022–37
2. the market share held by the provider
or facility or that of the plan or issuer
in the geographic region in which the
qualified IDR item or service was
provided;
3. the acuity of the participant, ben-
eficiary, or enrollee receiving the
qualified IDR item or service, or the
complexity of furnishing the qualified
IDR item or service to the participant,
beneficiary, or enrollee;
4. the teaching status, case mix, and
scope of services of the facility that
furnished the qualified IDR item or
service, if applicable; and
5. the demonstration of good faith efforts
(or lack thereof) made by the provider
or facility or the plan or issuer to enter
into network agreements with each
other, and, if applicable, contracted
rates between the provider or facility,
as applicable, and the plan or issuer,
as applicable, during the previous 4
plan years.
Under these final rules, the certified
IDR entity must also consider information
related to the offer provided in response
to a request from the certified IDR entity
under 26 CFR 54.9816-8T(c)(4)(i)(A)(2),
29 CFR 2590.716-8(c)(4)(i)(A)(2), and 45
CFR 149.510(c)(4)(i)(A)(2).
2. Avoidance of Double-counting
Information
When considering the additional infor-
mation under 26 CFR 54.9816-8(c)(4)
(iii), 29 CFR 2590.716-8(c)(4)(iii), and 45
CFR 149.510(c)(4)(iii), the certified IDR
entity should evaluate the information and
should not give weight to that informa-
tion if it is already accounted for by any
of the other information submitted by the
parties. The certified IDR entity should
consider whether the additional informa-
tion is already accounted for in the QPA
and should not give weight to informa-
tion related to a factor if the certified IDR
entity determines the information was
already accounted for in the calculation
of the QPA, to avoid weighting the same
information twice. In addition, if the par-
ties submit information related to more
than one of the additional factors, the
certified IDR entity should also consider
whether the information submitted regard-
ing those factors is already accounted for
by information submitted relating to other
credible information submitted to the cer-
tified IDR entity in relation to another fac-
tor and, if so, should not weigh this infor-
mation more than once.
Numerous comments received on the
October 2021 interim final rules high-
lighted that, in many cases, certain factors,
such as patient acuity or the complexity
of furnishing the qualified IDR item or
service to the participant, beneficiary, or
enrollee, will already be accounted for
in the calculation of the QPA and should
therefore not receive additional weight.
For example, because the plan or issuer
is required to calculate the QPA using
median contracted rates for service codes,
as well as modifiers (if applicable), and
because service codes and modifiers in
many cases reflect patient acuity and the
complexity of the service provided, these
factors will often already be reflected in
the QPA.
Commenters also acknowledged that
there could be instances in which the QPA
would not adequately account for the
acuity of the patient or complexity of the
service: for example, if the complexity of
a case is an outlier such that the time or
intensity of care exceeds what is typical
for a service code. A certified IDR entity
may also conclude that the QPA does not
already account for patient acuity or the
complexity of furnishing the qualified
IDR item or service in instances where the
parties disagree on what service code or
modifier accurately describes the qualified
IDR item or service, such as when a plan
or issuer has downcoded a claim and the
QPA is based on the downcoded service
code or modifier, rather than the billed ser-
vice code or modifier.
The Departments agree with the com-
menters that, in many cases, the additional
factors for the certified IDR entity to con-
sider other than the QPA will already be
reflected in the QPA. The QPA is generally
calculated to include characteristics that
affect costs, including medical specialty,
geographic region, and patient acuity and
case severity, all captured in different bill-
ing codes or the QPA calculation method-
ology.
37
Therefore, in the Departments’
view, giving additional weight to informa-
tion that is already incorporated into the
calculation of the QPA would be redun-
dant, possibly resulting in the selection of
an offer that does not best represent the
value of the qualified IDR item or service
and potentially over time contributing to
higher health care costs. As noted earlier
in this preamble, the Departments are also
aware that there are instances when cer-
tain factors related to the qualified IDR
item or service may not be adequately
reflected in the QPA. Under these final
rules, certified IDR entities are required to
consider the QPA and then must consider
all additional information submitted by
the parties relating to the offer for the pay-
ment amount for the qualified IDR item or
service that is the subject of the payment
determination, but each factor should be
weighted only once in the evaluation of
each party’s payment offer. To the extent a
factor is not already reflected in the QPA,
the certified IDR entity should accord
that factor appropriate weight based on
information related to it provided by the
parties. For example, some providers and
facilities that provide high-acuity care,
such as level 1 trauma or neonatal care,
may contend that additional factors such
as their case mix and the scope of services
offered were not accounted for in the QPA
and could justify the selection of a higher
amount as the out-of-network payment
amount.
3. Examples Provided
These final rules also include examples
to illustrate the consideration of factors
when making a payment determination,
including whether and how to give weight
to additional information submitted by a
party. Each example assumes that the Fed-
eral IDR process applies for purposes of
determining the out-of-network rate, that
both parties have submitted the informa-
tion parties are required to submit as part
of the Federal IDR process, including
37
Plans and issuers are required to calculate separate QPAs for the same service code by provider specialty if the plan or issuer has contracted rates for the service code that vary based on
provider specialty. See 26 CFR 54.9816-6T(b)(3), 29 CFR 2590.716-6(b)(3), and 45 CFR 149.140(b)(3).

Bulletin No. 2022–37 205 September 12, 2022
the applicable QPA(s), and the submitted
information does not include information
on the prohibited factors.
In the first new example, a level 1
trauma center that is a nonparticipating
emergency facility submits an offer that is
higher than the QPA. Along with the offer,
the nonparticipating emergency facility
submits additional written information
showing that the scope of services avail-
able at the nonparticipating emergency
facility was critical to the delivery of care
for the qualified IDR item or service pro-
vided, given the particular patient’s acu-
ity, and the information is determined to
be credible by the certified IDR entity.
The nonparticipating emergency facility
also submits information showing that
the contracted rates used to calculate the
QPA were based on a level of service that
is typical in cases in which the services are
delivered by a facility that is not a level
1 trauma center and that does not have
the capability to provide the scope of ser-
vices provided by a level 1 trauma center.
This information is also determined to be
credible by the certified IDR entity. The
issuer submits an offer equal to the QPA.
No additional information is submitted
by either party. The certified IDR entity
determines that the information submitted
by the nonparticipating emergency facility
relates to the offer for the payment amount
for the qualified IDR item or service that
is the subject of the payment determina-
tion. If the certified IDR entity determines
that it is appropriate to give weight to the
additional credible information submitted
by the nonparticipating emergency facil-
ity and that this information demonstrates
that the facility’s offer best represents the
value of the qualified IDR item or service,
the certified IDR entity should select the
facility’s offer.
In the second new example, a nonpar-
ticipating provider submits an offer that is
higher than the QPA. Along with the offer,
the nonparticipating provider submits
additional written information regarding
the level of training and experience of
the provider, and the information is deter-
mined to be credible by the certified IDR
entity, but the certified IDR entity finds
that the provider does not demonstrate
that the level of training and experience
relates to the offer for the appropriate pay-
ment amount for the qualified IDR item or
service that is the subject of the payment
determination (for example, the infor-
mation does not show that the level of
training and experience was necessary to
provide the qualified IDR service or that
the training or experience made an impact
on the care that was provided). The non-
participating provider does not submit any
additional information. The issuer submits
an amount equal to the QPA as its offer,
with no additional information. Even if
the certified IDR entity determines that
the additional information regarding the
level of training and experience is credi-
ble, if the certified IDR entity determines
that the information does not relate to
the offer for the payment amount for the
qualified IDR service that is the subject of
the payment determination, the certified
IDR entity should not give weight to the
additional information. In the absence of
any other credible information that relates
to a party’s offer, the certified IDR entity
should select the issuer’s offer as the offer
that best represents the value of the quali-
fied IDR service.
In the third new example, in connec-
tion with an emergency department visit
for the evaluation and management of a
patient, a nonparticipating provider sub-
mits an offer that is higher than the QPA.
Along with the offer, the nonparticipat-
ing provider submits additional written
information showing that the acuity of
the patient’s condition and the complex-
ity of the qualified IDR service required
the taking of a comprehensive history, a
comprehensive examination, and medical
decision making of high complexity, and
the information is determined to be credi-
ble by the certified IDR entity. The issuer
submits an offer equal to the QPA for Cur-
rent Procedural Terminology (CPT) code
99285, which is the CPT code for an emer-
gency department visit for the evaluation
and management of a patient requiring a
comprehensive history, a comprehensive
examination, and medical decision mak-
ing of high complexity. The issuer also
submits additional written information
showing that this CPT code accounts for
the acuity of the patient’s condition, and
the information is determined to be cred-
ible by the certified IDR entity. The certi-
fied IDR entity determines that this infor-
mation relates to the offer for the payment
amount for the qualified IDR item or
service that is the subject of the payment
determination. Neither party submits any
additional information. If the certified
IDR entity determines the information on
the acuity of the patient and complexity of
the service is already accounted for in the
calculation of the QPA, the certified IDR
entity should not give weight to the addi-
tional information provided by the non-
participating provider. If, after evaluating
the information submitted by the parties,
the IDR entity determines that the issuer’s
offer best represents the value of the qual-
ified IDR service, then the certified IDR
entity should select the issuer’s offer.
In the fourth new example, the issuer
submits an offer that is higher than the
QPA and that is equal to the nonparticipat-
ing emergency facility’s prior contracted
rate (adjusted for inflation) with the issuer
for the previous year for the qualified IDR
service. Although the facility is not partic-
ipating in the issuer’s network this year,
it was a participating facility in the issu-
er’s network in the previous 4 plan years.
Along with the offer, the issuer submits
additional written information showing
that the contracted rates between the non-
participating facility and the issuer during
the previous 4 plan years were higher than
the QPA, and that these prior contracted
rates took into account the case mix and
scope of services typically furnished at
the facility. The certified IDR entity deter-
mines that the information is credible and
that it relates to the offer submitted by the
facility for the payment amount for the
qualified IDR service that is the subject
of the payment determination. The non-
participating emergency facility submits
an offer that is higher than both the QPA
and the prior contracted rate (adjusted for
inflation) and submits additional written
information intending to show that the
case mix and scope of services available
at the facility that furnished the qualified
IDR service were integral to the services
provided. The certified IDR entity deter-
mines this information is credible and
relates to the offer submitted by the facil-
ity for the payment amount for the quali-
fied IDR service that is the subject of the
payment determination. If the certified
IDR entity determines that the informa-
tion submitted by the facility regarding the
case mix and scope of services available
at the facility includes information that is

September 12, 2022 206 Bulletin No. 2022–37
also accounted for in the information that
the issuer submitted regarding prior con-
tracted rates, then that same information
that has been submitted twice should be
weighted only once by the certified IDR
entity. The certified IDR entity also should
not give weight to the same information
provided by the nonparticipating emer-
gency facility in relation to any other fac-
tor. If the certified IDR entity determines
that the issuer’s offer best represents the
value of the qualified IDR service, the cer-
tified IDR entity should select the issuer’s
offer.
In the fifth new example, regarding a
qualified IDR service for which the issuer
downcoded the service code that the pro-
vider billed, the issuer submits an offer
equal to the QPA (which was calculated
using the downcoded service code). The
issuer also submits the additional written
information that it was required to dis-
close to the nonparticipating provider at
the time of the initial payment. The certi-
fied IDR entity determines the additional
information to be credible and that it
relates to the offer for the payment amount
for the qualified IDR service that is the
subject of the payment determination.
The nonparticipating provider submits an
offer equal to the amount that would have
been the QPA had the service code not
been downcoded. The nonparticipating
provider submits additional written infor-
mation that includes the same documen-
tation provided by the issuer, as well as
information that explains why the billed
service code was more appropriate than
the downcoded service code, as evidence
that the provider’s offer best represents
the value of the service furnished, given
its complexity. Neither party submits any
additional information. The certified IDR
entity determines that the information sub-
mitted by the provider is credible and that
it is related to the offer for the payment
amount for the qualified IDR service that
is the subject of the payment determina-
tion. If the certified IDR entity determines
that it is appropriate to give weight to the
additional credible information submitted
by the provider and that this information
demonstrates that the provider’s offer best
represents the value of the qualified IDR
service, the certified IDR entity should
select the provider’s offer.
The Departments note that the statute
and the October 2021 interim final rules
continue to provide that when making a
payment determination, a certified IDR
entity must not consider information on
the prohibited factors, such as the usual
and customary charges (including pay-
ment or reimbursement rates expressed
as a proportion of usual and customary
charges); the amount that would have
been billed by the provider, facility, or
provider of air ambulance services with
respect to the qualified IDR item or ser-
vice had the balance billing provisions of
45 CFR 149.410, 149.420, and 149.440
(as applicable) not applied; or the pay-
ment or reimbursement rate for items and
services furnished by the provider, facility,
or provider of air ambulance services pay-
able by a public payor.
38,39
In considering
all the permissible information submitted
by the parties, the Departments expect
that the certified IDR entity will conduct
a thorough review of the information sub-
mitted to evaluate whether the informa-
tion includes any of the prohibited factors,
so as to ensure that prohibited factors are
not considered in any payment determina-
tions. In conducting this review, the cer-
tified IDR entity may request additional
information from the disputing parties,
including confirmation that information
submitted does not include information on
the prohibited factors.
The Departments are committed to
establishing a fair, cost-effective, and
reasonable IDR payment determination
process that does not have an inflationary
impact on health care costs. To that end,
the Departments will monitor the effects
of these payment determination require-
ments and make appropriate adjustments
as necessary to achieve the intended goals
articulated in this preamble.
C. Payment Determinations Under the
Federal IDR Process for Air Ambulance
Services
As discussed in section I.C of this
preamble, the process for a certified
IDR entity to select an offer in a dispute
related to qualified IDR services that are
air ambulance services is generally the
same as the process applicable to disputes
related to qualified IDR items or services
that are not air ambulance services. How-
ever, section 9817(b)(5)(C) of the Code,
section 717(b)(5)(C) of ERISA, section
2799A-2(b)(5)(C) of the PHS Act, and
the October 2021 interim final rules spec-
ify different additional circumstances,
in addition to the QPA, that the certified
IDR entity must consider in making the
payment determination for air ambulance
services. Upon review of the comments
the Departments received on the Federal
IDR process, and in light of the District
Court’s memorandum opinions and orders
in Texas Medical Association and LifeNet,
the Departments have determined that it is
appropriate to issue the final rules under
the Federal IDR process for air ambulance
services.
As for non-air ambulance items and
services, these final rules provide that
in determining which offer to select in a
dispute related to air ambulance services,
the certified IDR entity must consider
38
Contracted rates are frequently based on a percentage of rates payable by a public payor, such as Medicare. In these cases, because contracting parties have chosen to set their rates in this
way, the contracted rates represent an independent decision by contracting parties. Thus, if a party submits information on such rates to a certified IDR entity, consideration of these contracted
rates does not violate the prohibition on considering the factors described in 26 CFR 54.9816-8T(c)(4)(v), 29 CFR 2590.716-8(c)(4)(v), and 45 CFR 149.510(c)(4)(v). In contrast, if a party
submits evidence showing that its offer was a percentage of the rates paid by Medicare, a certified IDR entity is prohibited from considering such information.
39
Under 5 U.S.C. 8904(b), in the case of a retired individual who is over age 65 and enrolled in the Federal Employees Health Benefits (FEHB) Program but not covered by Medicare part A
or B, fee-for-service FEHB carriers may not pay a charge imposed by a hospital provider for inpatient services or a physician to the extent that charge exceeds applicable Medicare limits. The
Departments, after consulting with OPM, clarify that a certified IDR entity is not considered to violate the prohibition on considering the payment or reimbursement rate for items and services
furnished by the provider, facility, or provider of air ambulance services payable by a public payor to the extent the certified IDR entity’s selection of an offer is made to allow compliance
with 5 U.S.C. 8904(b) and 5 CFR part 890, subpart I. That is, if 5 U.S.C. 8904(b) applies, and either offer exceeds the applicable Medicare limit referenced in 5 U.S.C. 8904(b), the certified
IDR entity must ensure that the payment determination does not exceed the applicable Medicare limit. A certified IDR entity would not be considered to violate the prohibition on considering
Medicare reimbursement rates when it selects an offer on this basis.

Bulletin No. 2022–37 207 September 12, 2022
certain additional information submitted
by a party. Also, for non-air ambulance
items and services, these final rules for air
ambulance services provide that the certi-
fied IDR entity must consider the QPA for
the applicable year for the same or similar
service and then consider all additional
permissible information to determine
the appropriate out-of-network rate. For
air ambulance services, this information
includes information related to the follow-
ing factors:
1. quality and outcomes measurements
of the provider that furnished the services;
2. the acuity of the condition of the par-
ticipant, beneficiary, or enrollee receiving
the service, or the complexity of furnish-
ing the service to the participant, benefi-
ciary, or enrollee;
3. training, experience, and quality of
the medical personnel that furnished the
air ambulance service;
4. ambulance vehicle type, including
the clinical capability level of the vehicle;
5. population density of the point of
pick-up; and
6. demonstrations of good faith efforts
(or lack thereof) by the disputing parties to
enter into network agreements with each
other, as well as, if applicable, contracted
rates between the parties during the previ-
ous 4 plan years.
Additionally, as with non-air ambu-
lance disputes, the certified IDR entity
must also consider information related
to the offer provided in a response to
the certified IDR entity’s request under
26 CFR 54.9816-8T(c)(4)(i)(A)(2), 29
CFR 2590.716-8(c)(4)(i)(A)(2), and 45
CFR 149.510(c)(4)(i)(A)(2). The certi-
fied IDR entity must also consider other
information provided by the parties under
26 CFR 54.9816-8(c)(4)(iii)(D), 29 CFR
2590.716-8(c)(4)(iii)(D), and 45 CFR
149.510(c)(4)(iii)(D).
As with non-air ambulance disputes,
the certified IDR entity should evaluate
whether each piece of submitted infor-
mation is credible, relates to the offer
for the payment amount for the qualified
IDR service submitted by either party,
and does not include information on fac-
tors described in 26 CFR 54.9816-8T(c)
(4)(v), 29 CFR 2590.716-8(c)(4)(v), or 45
CFR 149.510(c)(4)(v) (regarding prohib-
ited considerations). When considering
the additional information listed above,
the certified IDR entity should not give
weight to the information to the extent it is
not credible, does not relate to either par-
ty’s offer for the payment amount for the
qualified IDR service, or is included in the
QPA calculation or other credible infor-
mation. The Departments note that these
final rules do not require certified IDR
entities to default to the offer closest to the
QPA or to apply a presumption in favor of
that offer. Rather, these final rules specify
that certified IDR entities should select the
offer that best represents the value of the
air ambulance service under dispute after
considering the QPA and all permissible
information submitted by the parties.
D. The Certified IDR Entity’s Written
Decision
Under section 9816(c)(7) of the Code,
section 716(c)(7) of ERISA, and section
2799A-1(c)(7) of the PHS Act, the Depart-
ments are required to publish a variety of
information relating to the Federal IDR
process, including the number of times
a payment amount determined or agreed
to under this process exceeds the QPA;
the amount of each offer submitted in the
Federal IDR process expressed as a per-
centage of the QPA; and any other infor-
mation specified by the Departments. The
statute also instructs certified IDR entities
to submit to the Departments such infor-
mation as the Departments determine nec-
essary to carry out the provisions of sec-
tion 9816(c) of the Code, section 716(c)
of ERISA, and section 2799A-1(c) of the
PHS Act, which include these reporting
requirements as well as the Departments’
obligations to establish and oversee the
Federal IDR process. The Departments
have determined it is necessary under this
provision to require certified IDR entities
to submit certain information, including a
written statement of the certified IDR enti-
ty’s reasons for a particular determination
of an out-of-network rate.
Under the October 2021 interim final
rules, the certified IDR entity must explain
its payment determination and the under-
lying rationale in a written decision sub-
mitted to the parties and the Departments,
in a form and manner specified by the
Departments. The October 2021 interim
final rules also required the certified IDR
entity to include in its written decision an
explanation of the credible information
that the certified IDR entity determined
demonstrated that the QPA was materially
different from the appropriate out-of-net-
work rate if the certified IDR entity did
not choose the offer closest to the QPA.
As stated earlier in this preamble, on
February 23, 2022, the District Court in
Texas Medical Association issued a mem-
orandum opinion and order that invali-
dated the requirement to provide an expla-
nation of the credible information that the
certified IDR entity determined demon-
strated that the QPA was materially differ-
ent from the appropriate out-of-network
rate (but not the general requirement that
a certified IDR entity issue a written deci-
sion). The Departments are of the view
that, in all cases, a written decision with
a comprehensive discussion of the ratio-
nale for the decision is important to ensure
that the parties understand the outcome of
a payment determination under the Fed-
eral IDR process. The Departments note
that commenters generally supported the
requirement that certified IDR entities
provide a written rationale for determina-
tions. The Departments agree with com-
menters’ assertions that the certified IDR
entity should be required to provide an
explanation for its decision in all cases,
and not only when the offer furthest from
the QPA is determined to best represent
the value of the qualified IDR item or ser-
vice. This requirement will ensure that all
parties understand the certified IDR enti-
ty’s payment determination and how the
various information was considered.
The Departments are finalizing stan-
dards for the written decision that are
intended to achieve transparency and
consistency in the Federal IDR process.
Accordingly, similar to the October 2021
interim final rules these final rules require
that the certified IDR entity explain in all
cases its determination in a written deci-
sion provided to the parties and the Depart-
ments, in a form and manner specified by
the Departments in separate guidance.
Additionally, these final rules continue to
require that the rationale be included in
the written decision. In response to com-
ments requesting additional transparency
and explanation, these final rules also
provide that the certified IDR entity’s
written decision must include an explana-
tion of its determination, including what

September 12, 2022 208 Bulletin No. 2022–37
information the certified IDR entity deter-
mined demonstrated that the offer selected
as the out-of-network rate is the offer that
best represents the value of the qualified
IDR item or service, including the weight
given to the QPA and any additional cred-
ible information submitted in accordance
with these final rules. This requirement
will help ensure that certified IDR entities
carefully evaluate all credible information
and promote transparency with respect
to payment determinations. These final
rules also provide that, if the certified IDR
entity relies on additional information or
additional circumstances in selecting an
offer, its written decision must include
an explanation of why the certified IDR
entity concluded that this information
was not already reflected in the QPA. The
Departments are of the view that, in these
cases, the certified IDR entity should pro-
vide this additional explanation so that the
Departments may fulfill their statutory
functions to monitor and to report on how
often, and why, an offer that is selected
exceeds the QPA for a given qualified IDR
item or service. Additionally, this require-
ment will provide the Departments with
valuable information to inform future pol-
icy making, in particular, policy making
related to the QPA methodology. As stated
elsewhere in this preamble, the Depart-
ments are committed to establishing a rea-
sonable and fair Federal IDR process.
Finally, the Departments are also
including two technical corrections to
address a regulatory cross-references in
the provisions that set forth the require-
ments for the certified IDR entity to
include a rationale for its written decision
for both air ambulance and non-air ambu-
lance qualified IDR items and services
in monthly reporting to the Departments,
and to clarify that the certified IDR entity
should report to the Departments the
extent to which the decision relied on 26
CFR 54.9816-8(c)(4)(iii)(B)-(D), 29 CFR
2590.716-8(c)(4)(iii)(B)-(D), and 45 CFR
149.510(c)(4)(iii)(B)-(D). This require-
ment aligns the reporting requirement
with the requirement for the written deci-
sion, and with the intent of the October
2021 interim final rules to gather such
information.
III. Applicability of the Final Rules
These rules finalize certain provisions
of the July 2021 and October 2021 interim
final rules and address the decisions in
Texas Medical Association and LifeNet.
The July 2021 and October 2021 interim
final rules apply for plan years (in the indi-
vidual market, policy years) beginning on
or after January 1, 2022, except to the
extent provided below.
The final rules that implement the
requirements related to the additional
information that must be provided with
each initial payment or notice of denial of
payment if the QPA is based on a down-
coded service code or modifier are appli-
cable with respect to items or services
furnished on or after October 25, 2022,
for plan years (in the individual market,
policy years) beginning on or after Janu-
ary 1, 2022.
With respect to the additional infor-
mation that must be provided with each
initial payment or notice of denial of pay-
ment if a QPA is based on a downcoded
service code or modifier, the Departments
recognize that plans and issuers often
provide these notices through an auto-
mated or other streamlined system for
efficiency and that plans and issuers may
need additional time to update their oper-
ating systems to amend the notices that are
currently generated to satisfy the QPA dis-
closure requirements under the July 2021
interim final rules. Plans and issuers may
use reasonable methods to provide this
additional disclosure with the initial pay-
ment or notice of denial of payment while
plan or issuer systems and procedures are
updated to provide the additional notice in
a more streamlined and automated man-
ner. Even when using other reasonable
methods, plans and issuers must provide
the required information starting on the
date these final rules are applicable to the
relevant plan or policy and in accordance
with the timeframes specified in the July
2021 interim final rules. The Departments
expect that plans and issuers will work to
make sure that systems are updated in a
timely fashion, and the Departments may
provide additional guidance, as warranted.
For requirements that finalize certain
provisions of the October 2021 interim
final rules, the final rules addressing the
payment determination standards for cer-
tified IDR entities, written decisions, and
reporting are applicable with respect to
items or services provided or furnished on
or after October 25, 2022, for plan years
(in the individual market, policy years)
beginning on or after January 1, 2022. This
approach will ensure uniformity and pre-
dictability in standards for qualified IDR
items and services (including between
non-air ambulance items and services
and air ambulance services, to the extent
applicable), and will allow time for the
Departments to provide updated guidance
to certified IDR entities and stakeholders.
If any provision in this rulemaking
is held to be invalid or unenforceable
facially, or as applied to any person,
plaintiff, or circumstance, the provision
shall be severable from the remainder of
this rulemaking, and shall not affect the
remainder thereof, and the invalidation
of any specific application of a provision
shall not affect the application of the pro-
vision to other persons or circumstances.
IV. Regulatory Impact Analysis
A. Summary
The Departments have examined the
effects of these final rules as required by
Executive Order 12866,
40
Executive Order
13563,
41
the Paperwork Reduction Act of
1995,
42
the Regulatory Flexibility Act,
43

section 202 of the Unfunded Mandates
Reform Act of 1995,
44
Executive Order
13132,
45
and the Congressional Review
Act.
46
40
Regulatory Planning and Review, 58 FR 51735 (Oct. 4, 1993).
41
Improving Regulation and Regulatory Review, 76 FR 3821 (Jan. 18, 2011).
42
44 U.S.C. 3506(c)(2)(A) (1995).
43
5 U.S.C. 601 et seq. (1980).
44
2 U.S.C. 1501 et seq. (1995).
45
Federalism, 64 FR 153 (Aug. 4, 1999).
46
5 U.S.C. 804(2) (1996).

Bulletin No. 2022–37 209 September 12, 2022
B. Executive Orders 12866 and 13563
Executive Orders 12866 and 13563
direct agencies to assess all costs and ben-
efits of available regulatory alternatives
and, if regulation is necessary, to select
regulatory approaches that maximize net
benefits (including potential economic,
environmental, public health, and safety
effects; distributive impacts; and equity).
Executive Order 13563 emphasizes the
importance of quantifying costs and ben-
efits, reducing costs, harmonizing rules,
and promoting flexibility.
Under Executive Order 12866, “sig-
nificant” regulatory actions are subject to
review by the Office of Management and
Budget (OMB). Section 3(f) of the Exec-
utive order defines a “significant regu-
latory 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, or adversely and materially affect-
ing a sector of the economy, productiv-
ity, competition, jobs, the environment,
public health or safety, or State, local,
or tribal governments or communities
(also referred to as “economically sig-
nificant”); (2) creating a serious incon-
sistency or otherwise interfering with
an action taken or planned by another
agency; (3) materially altering the bud-
getary 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 Pres-
ident’s priorities, or the principles set
forth in the Executive order. Based on the
Departments’ estimates, OMB’s Office of
Information and Regulatory Affairs has
determined this rulemaking is “economi-
cally significant” under section 3(f)(1) of
Executive Order 12866 as measured by
the $100 million threshold.
47
Therefore,
the Departments have prepared a Regu-
latory Impact Analysis that presents the
costs, benefits, and transfers associated
with this rulemaking. Pursuant to the
Congressional Review Act, OMB has
designated these final rules as a “major
rule,” as defined by 5 U.S.C. 804(2).
C. Need for Regulatory Action
On December 27, 2020, the CAA,
which includes the No Surprises Act, was
enacted.
48
The No Surprises Act provides
Federal protections against surprise billing
by limiting out-of-network cost sharing
and prohibiting balance billing in many of
the circumstances in which surprise bills
arise most frequently.
On July 13, 2021, the Departments
published the July 2021 interim final
rules.
49
The July 2021 interim final rules
implemented provisions of the No Sur-
prises Act to protect participants, benefi-
ciaries, 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 furnished by
nonparticipating providers with respect to
patient visits to certain participating facil-
ities, and air ambulance services provided
by nonparticipating providers of air ambu-
lance services.
On October 7, 2021, the Departments
published the October 2021 interim final
rules.
50
The October 2021 interim final
rules build on the July 2021 interim final
rules and implement the Federal IDR pro-
cess.
51
The October 2021 interim final
rules generally apply to group health
plans and health insurance issuers offer-
ing group or individual health insurance
coverage (including grandfathered health
plans) with respect to plan years (in the
individual market, policy years) begin-
ning on or after January 1, 2022; and to
health care providers and facilities, pro-
viders of air ambulance services, and cer-
tified IDR entities beginning on January
1, 2022 with respect to items and services
furnished during a plan year (in the indi-
vidual market, policy year) beginning on
or after January 1, 2022.
On February 23, 2022, the District
Court in Texas Medical Association issued
a memorandum opinion and order that
vacated portions of the October 2021
interim final rules governing aspects of
the Federal IDR process, as discussed ear-
lier in this preamble. On July 26, 2022, the
District Court in LifeNet issued a memo-
randum opinion and order that vacated
additional portions of the October 2021
interim final rules, as discussed earlier in
this preamble.
In response to the decisions in Texas
Medical Association and LifeNet and
comments received on the October 2021
interim final rules and July 2021 interim
final rules, these final rules address cer-
tain issues critical to the implementation
and effective operation of the Federal IDR
process, including the disclosure require-
ments relating to information that group
health plans and health insurance issuers
offering group or individual health insur-
ance coverage must share about the QPA,
and certain requirements related to con-
sideration of information when a certified
IDR entity makes a payment determina-
tion under the Federal IDR process.
i. Final Rules on Information to be
Shared About the Qualifying Payment
Amount
As described earlier in this preamble,
the July 2021 interim final rules require
plans and issuers to make certain disclo-
sures with each initial payment or notice
of denial of payment in cases in which
the recognized amount with respect to
an item or service furnished by a non-
participating provider or nonparticipat-
ing emergency facility, or the amount
upon which cost sharing is based for air
ambulance services furnished by a non-
participating provider of air ambulance
services, is the QPA. After review of the
comments on the July 2021 interim final
rules and October 2021 interim final rules,
the Departments are finalizing parts of the
47
This rulemaking builds on the July 2021 and October 2021 interim final rules described in this preamble. The interim final rules were deemed to be economically significant. The economic
analyses for each of these interim final rules can be found in the Federal Register at 86 FR 36872 and 86 FR 55980.
48
Pub. L. 116-260 (Dec. 27, 2020).
49
86 FR 36872 (July 13, 2021).
50
86 FR 55980 (October 7, 2021).
51
The July 2021 and October 2021 interim final rules also include interim final regulations under 5 U.S.C. 8902(p) issued by OPM that specify how certain provisions of the No Surprises Act
apply to health benefit plans offered by carriers under the Federal Employees Health Benefits Act. The rules apply to carriers in the FEHB Program with respect to contract years beginning
on or after January 1, 2022.

September 12, 2022 210 Bulletin No. 2022–37
July 2021 interim final rules to add a new
definition and make changes to require
additional information about the QPA
that is provided by a plan or issuer with
an initial payment or notice of denial of
payment in certain cases. These disclo-
sures are required in cases in which the
recognized amount with respect to an
item or service furnished by a nonpartici-
pating provider or nonparticipating emer-
gency facility, or the amount upon which
cost sharing is based for air ambulance
services furnished by a nonparticipating
provider of air ambulance services, is the
QPA. Specifically, these final rules pro-
vide a definition of the term “downcode”
to mean the alteration by a plan or issuer
of a service code to another service code,
or the alteration, addition, or removal
by a plan or issuer of a modifier, if the
changed code or modifier is associated
with a lower QPA than the service code
or modifier billed by the provider, facil-
ity, or provider of air ambulance services.
These final rules also specify that when
a QPA is calculated based on a down-
coded service code or modifier, in addi-
tion to the information already required
to be provided with an initial payment or
notice of denial of payment under the July
2021 interim final rules, a plan or issuer
must provide a statement that the claim
was downcoded; an explanation of why
the claim was downcoded, including a
description of which service codes were
altered, if applicable, and a description of
which modifiers were altered, added, or
removed, if applicable; and the amount
that would have been the QPA had the
service code or modifier not been down-
coded. The Departments are of the view
that this additional disclosure of infor-
mation about the QPA will be helpful to
ensure that providers, facilities, and pro-
viders of air ambulance services receive
the information regarding the QPA that
may assist in their meaningful participa-
tion in open negotiation and in the Federal
IDR process in all payment disputes that
involve qualified items or services that
have been subject to downcoding. In par-
ticular, in cases in which the plan or issuer
has downcoded the billed claim, it is of
particular importance that the provider,
facility, or provider of air ambulance ser-
vices has information regarding both the
QPA (based on the downcoded service
code or modifier) and the amount that
would have been the QPA had the service
code or modifier not been downcoded in
order to ascertain what information will
demonstrate that the provider’s, facility’s,
or provider of air ambulance services’
offer best represents the value of the item
or service and aid the certified IDR entity
in selecting an offer that best represents
the value of the item or service provided.
ii. Final Rules on Payment
Determinations Under the Federal IDR
Process
As discussed earlier in this preamble,
the October 2021 interim final rules pro-
vided that, not later than 30 business days
after the selection of the certified IDR
entity, the certified IDR entity must select
one of the offers submitted by the plan or
issuer or the provider, facility, or provider
of air ambulance services to be the out-of-
network rate for the qualified IDR item
or service. In determining which offer to
select, the October 2021 interim final rules
provided that the certified IDR entity must
select the offer closest to the QPA unless
the certified IDR entity were to determine
that additional permissible information
demonstrated that the QPA is materially
different from the appropriate out-of-net-
work rate, or if the offers are equally dis-
tant from the QPA but in opposing direc-
tions. A key goal in facilitating consistency
in the Federal IDR process through the
October 2021 interim final rules was to
ensure a level of predictability in out-
comes in the Federal IDR process. In the
Departments’ view, greater predictability
in the Federal IDR process would encour-
age parties to settle disputes through open
negotiation or earlier through the offer and
acceptance of an adequate initial payment,
which would increase efficiencies in how
disputes are handled and ultimately lead
to lower administrative costs associated
with health care. As articulated earlier in
this preamble, in light of the Texas Med-
ical Association and LifeNet decisions,
and in response to comments received
on these provisions, the Departments are
finalizing standards for making payment
determinations that are intended to lead to
greater predictability and regularity in the
Federal IDR process. Accordingly, these
final rules require that, in determining
which offer to select during the Federal
IDR process, the certified IDR entity must
consider the QPA for the applicable year
for the same or similar item or service.
The certified IDR entity must then con-
sider all additional information submitted
by a party to determine which offer best
reflects the appropriate out-of-network
rate, provided that the information relates
to the offer for the payment amount for
the qualified IDR item or service that is
the subject of the payment determination
and does not include information that the
certified IDR entity is prohibited from
weighing in making the payment deter-
mination. In considering this additional
information, the certified IDR entity
should evaluate whether information that
is offered is credible and should not give
weight to information that is not credible.
The appropriate out-of-network rate must
be the offer that the certified IDR entity
determines best represents the value of the
qualified IDR item or service.
For non-air ambulance items and ser-
vices, this information includes infor-
mation related to the following factors:
(1) the level of training, experience, and
quality and outcomes measurements of
the provider or facility that furnished the
qualified IDR item or service (such as
those endorsed by the consensus-based
entity authorized in section 1890 of the
Social Security Act); (2) the market share
held by the provider or facility or that of
the plan or issuer in the geographic region
in which the qualified IDR item or service
was provided; (3) the acuity of the partic-
ipant, beneficiary, or enrollee receiving
the qualified IDR item or service, or the
complexity of furnishing the qualified
IDR item or service to the participant,
beneficiary, or enrollee; (4) the teaching
status, case mix, and scope of services
of the facility that furnished the qualified
IDR item or service, if applicable; and
(5) demonstration of good faith efforts
(or lack thereof) made by the provider or
facility or the plan or issuer to enter into
network agreements with each other, and,
if applicable, contracted rates between the
provider or facility, as applicable, and the
plan or issuer, as applicable, during the
previous 4 plan years.
Under these final rules, the certified
IDR entity must also consider information
related to the offer provided in a response

Bulletin No. 2022–37 211 September 12, 2022
to a request from the certified IDR entity.
The certified IDR entity must also con-
sider additional information submitted by
a party, provided the information relates
to the offer for the payment amount for
the qualified IDR item or service that is
the subject of the payment determination
and does not include information that the
certified IDR entity is prohibited from
weighing in making the payment determi-
nation under section 9816(c)(5)(D) of the
Code, section 716(c)(5)(D) of ERISA, and
section 2799A-1(c)(5)(D) of the PHS Act.
In considering either form of information,
the certified IDR entity should evaluate
whether the information is credible and
should not give weight to information that
is not credible.
When considering the additional cred-
ible information under 26 CFR 54.9816-
8(c)(4)(iii), 29 CFR 2590.716-8(c)(4)(iii),
and 45 CFR 149.510(c)(4)(iii), the certi-
fied IDR entity should evaluate whether
the information is already accounted for
by any of the other credible information
submitted by the parties. Because the cer-
tified IDR entity must consider the QPA,
the certified IDR entity should always
consider whether the additional credible
information is already accounted for by
the QPA and should avoid giving weight
to information related to a factor if the
certified IDR entity determines the infor-
mation was already accounted for in the
calculation of the QPA, to avoid weight-
ing the same information twice. In addi-
tion, if the parties submit credible infor-
mation related to more than one of the
additional factors, the certified IDR entity
should also consider whether the infor-
mation submitted regarding those factors
is already accounted for by information
submitted relating to other credible infor-
mation already before the certified IDR
entity in relation to another factor and, if
so, should not weigh the information more
than once.
Regarding air ambulance services,
these final rules state that the certified
IDR entity must consider the QPA for the
applicable year for the same or similar
service and then consider all additional
permissible information to determine
the appropriate out-of-network rate. In
considering this additional information,
the certified IDR entity should evalu-
ate whether information that is offered
is credible and should not give weight
to information that is not credible. For
air ambulance services, this information
includes information related to the follow-
ing factors: (1) quality and outcomes mea-
surements of the provider that furnished
the air ambulance services; (2) the acuity
of the condition of the participant or ben-
eficiary receiving the air ambulance ser-
vice, or the complexity of furnishing the
service to the participant or beneficiary;
(3) training, experience, and quality of the
medical personnel that furnished the air
ambulance services; (4) ambulance vehi-
cle type, including the clinical capability
level of the vehicle; (5) population density
of the point of pick-up; and (6) demon-
strations of good faith efforts (or lack
thereof) by the disputing parties to enter
into network agreements with each other,
as well as, if applicable, contracted rates
between the parties during the previous 4
plan years.
After the certified IDR entity has
reviewed and selected the offer it deter-
mines best represents the value of the
qualified IDR item or service as the
out-of-network rate, the certified IDR
entity must explain its determination in
a written decision submitted to the par-
ties and the Departments, in a form and
manner specified by the Departments.
These final rules require that the certi-
fied IDR entity’s written decision must
include an explanation of what informa-
tion the certified IDR entity determined
demonstrated that the offer selected as
the out-of-network rate is the offer that
best represents the value of the qualified
IDR item or service, including the weight
given to the QPA and any additional cred-
ible information submitted in accordance
with these final rules. If the certified IDR
entity relies on any additional informa-
tion in selecting an offer, the written
decision must include an explanation of
why the certified IDR entity concluded
that this information was not already
reflected in the QPA.
iii. Summary of Impacts
Plans, issuers, third-party administra-
tors (TPAs), Federal Employees Health
Benefits (FEHB) Program carriers, health
care providers, facilities, providers of air
ambulance services, and certified IDR
entities will incur costs to comply with
the requirements in these final rules. How-
ever, these final rules will help ensure that
the payment determination in the Federal
IDR process is a more consistent process
for providers, facilities, providers of air
ambulance services, plans, and issuers.
These final rules will improve transpar-
ency in the Federal IDR process. This
increased transparency will aid in the open
negotiation process, the decision whether
to initiate the Federal IDR process, and the
determination of the amount a provider,
facility, or provider of air ambulance ser-
vices submits as an offer. Therefore, the
Departments have determined the benefits
of these final rules justify the costs.
This regulatory action finalizes certain
provisions in the July 2021 interim final
rules and the October 2021 interim final
rules, including changes to remove the
language vacated by the District Court in
Texas Medical Association and LifeNet.
This cost-benefit analysis focuses on
the incremental costs of complying with
the requirements that are included in
these final rules. One baseline assump-
tion for this analysis is the existence of
the requirements of the July 2021 and
October 2021 interim final rules, with
a second baseline assumption being the
use of a comparison with a hypothetical
state of the world absent those interim
final rules. As discussed in the analysis
of the July 2021 interim final rules, the
total annualized cost associated with the
July 2021 interim final rules is $2,252
million, using the 7 percent discount
rate.
52
As discussed in the analysis of
the October 2021 interim final rules, the
total annualized cost associated with the
October 2021 interim final rules is $517
52
As discussed in the analysis of the July 2021 interim final rules, the total annualized cost associated with the July 2021 interim final rules is $2,177 million, using the 3 percent discount rate.
The Departments note that these cost estimates have not been updated.

September 12, 2022 212 Bulletin No. 2022–37
million, using the 7 percent discount
rate.
53
The Departments consider these
cost estimates to be reflected in the ana-
lytic baseline of these final rules and to
form a subset of total costs of these final
rules for the purposes of this cost-ben-
efit analysis relative to the hypothetical
state of the world absent the July 2021
and October 2021 interim final rules.
54
As
noted in Table 1 (Accounting Statement)
the Departments estimate the additional
total annualized cost associated with the
parts these final rules to be $5.9 million,
using the 7 percent discount rate.
To avoid repeating the analysis of
the July 2021 and October 2021 interim
final rules, only a short summary of
the benefits and costs is provided, and
readers are directed to the analysis in
the July 2021 and October 2021 interim
final rules for more detail. Numbers in
this analysis may not match numbers in
the analysis for the July 2021 and Octo-
ber 2021 interim final rules because the
estimates have been updated with the
most current data. However, the meth-
odology remains the same, except for
the calculation of the burden to pre-
pare the certified IDR entity’s written
decision for payment determinations,
as explained later in this section. The
Departments also discuss the impacts of
changes made by these final rules is this
section.
In accordance with OMB Circular
A–4, Table 1 depicts an accounting state-
ment 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
associated with this regulatory action, but
have sought, where possible, to describe
these non-quantified impacts. The effects
in Table 1 reflect non-quantified impacts
and estimated direct monetary costs
resulting from the provisions of these
final rules.
Table 1: Accounting Statement
Benefits:
• These final rules will increase transparency in the Federal IDR process.
• These final rules will help a provider, facility, or provider of air ambulance services ascertain what information will
demonstrate that the provider’s, facility’s, or provider of air ambulance services’ offer best represents the value of the item or
service and aid the certified IDR entity in selecting an offer that best represents the value of the item or service.
• These final rules will promote more consistent payment determinations in the Federal IDR process for providers, facilities,
providers of air ambulance services, plans, and issuers.
• These final rules will promote transparency with respect to the certified IDR entity’s payment determination and will help to
ensure that the determination of a total payment amount for a particular item or service is based on the facts and circumstances
of the dispute at issue in each case.
CostsEstimateYear dollarDiscount RatePeriod Covered
Annualized Monetized
($million/Year)
$5.920217 percent2022-2031
$5.920213 percent2022-2031
Quantified Costs:
The Departments estimate the total annual cost associated with these final rules to be $5.9 million, with $4.3 million annually
attributable to the additional information plans and issuers will be required to provide related to the QPAs, $1.2 million annually
attributable to the preparation of IDR payment determination notices by certified IDR entities for nonparticipating providers or
emergency facility claims, and $0.3 million annually attributable to the preparation of IDR payment determination notices by
certified IDR entities for nonparticipating air ambulance providers’ claims.
Transfers:
These final rules make no changes that impact the transfers as described in the July 2021 and October 2021 interim final rules.
D. Affected Entities
These final rules will affect health care
providers, health care facilities, providers
of air ambulance services, group health
plans, issuers, TPAs, FEHB carriers, and
certified IDR entities.
Based on data from 2020, CMS esti-
mated that there were 1,477 issuers in the
U.S. health insurance market, of which
1,212 served the individual market, 6
served the student health insurance mar-
ket, 623 served the small group market,
and 784 served the large group market.
55

Further, of the plans that filed a Form
53
As discussed in the analysis of the October 2021 interim final rules, the total annualized cost associated with the October 2021 interim final rules is $491 million, using the 3 percent discount
rate. The Departments note that these cost estimates have not been updated.
54
The Departments are accounting for the additional costs associated with these final rules due to parts of the July 2021 interim final rules and October 2021 interim final rules being finalized.
For those parts being finalized, the Texas Medical Association and LifeNet decisions do not impact the quantified costs.
55
Centers for Medicare and Medicaid Services. “Medical Loss Ratio Data and System Resources” (2020). https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.

Bulletin No. 2022–37 213 September 12, 2022
5500 in 2019, 30,181 plans were self-in-
sured.
56
Additionally, in the October 2021
interim final rules, the Departments previ-
ously estimated that there are 205 TPAs.
57

The Departments also estimate that there
are 44 FEHB carriers. While there is a sig-
nificant amount of research that demon-
strates the prevalence of surprise billing,
the Departments do not have data on the
percentage of surprise bills covered by
health insurance issuers and self-insured
plans. However, given the size of health
insurance issuers and the scope of their
activities, the Departments assume that
all health insurance issuers, TPAs, and
FEHB carriers will be affected by these
final rules.
In 2019, 183 million individuals had
employer-sponsored coverage and 33.2
million had other private insurance,
including individual market insurance.
58

The Departments do not expect that these
final rules will directly affect individuals
with private health coverage who visit an
emergency room, visit a health care facil-
ity,
59
or are transported by an air ambu-
lance, as these final rules contain only pro-
visions that affect the relationships among
plans and issuers; providers, facilities,
and providers of air ambulance services;
and certified IDR entities. However, the
Departments estimate that these final rules
will indirectly affect covered individuals,
as the outcomes of payment disputes will
have implications for premiums.
In the October 2021 interim final rules,
the Departments estimated that there are
16,992 emergency and other health care
facilities, including 6,090 hospitals,
60

29,227 diagnostic and medical laborato-
ries,
61
270 independent freestanding emer-
gency departments,
62
9,280 ambulatory
surgical centers,
63
and 1,352 critical
access hospitals.
64
These entities will also
be affected by these final rules.
In the October 2021 interim final rules,
the Departments also estimated that in
2018, the current year for which data are
available, there were 1,114 air ambulance
bases in the United States.
65
The Depart-
ments do not have data on the number of
providers of air ambulance services that
submit out-of-network claims; however,
given the prevalence of out-of-network
billing among providers of air ambulance
services, the Departments assume that all
businesses in the industry will be affected
by these final rules.
Furthermore, in the October 2021
interim final rules, the Departments esti-
mated that 140,270 physicians,

on aver-
age, bill on an out-of-network basis and
will be affected by these final rules.
66

These final rules are also expected to
affect non-physician providers who bill on
an out-of-network basis. The Departments
lack data on the number of non-physician
providers who would be impacted.
Finally, there are currently 11 certified
IDR entities that will be affected by these
final rules.
67
The number of certified IDR
entities may increase or decrease due to
new IDR entities applying for certification
or the Departments revoking certification
because of noncompliance with the cer-
tification requirements or a certified IDR
entity’s inability to handle its caseload.
E. Benefits
These final rules will require plans and
issuers to provide additional information
about the QPA with an initial payment
or notice of denial of payment in cases
involving downcoding, without the pro-
vider, facility, or provider of air ambu-
lance services having to ask for this infor-
mation. These final rules will be helpful
to the provider, facility, or provider of air
ambulance services in developing an offer
or submitting information if it believes
that the QPA calculated by the plan or
issuer does not best represent the value
of the item or service. Furthermore, the
requirement to disclose this additional
information will increase transparency in
the Federal IDR process. This increased
transparency will aid in the open nego-
tiation process, the decision whether to
initiate the Federal IDR process, and the
determination of the amount a provider,
facility, or provider of air ambulance ser-
vices submits as an offer. Further, these
final rules will help a provider, facility, or
provider of air ambulance services ascer-
tain what information will demonstrate
that the provider’s, facility’s, or provider
of air ambulance services’ offer best rep-
resents the value of the item or service and
aid the certified IDR entity in selecting an
offer that best represents the value of the
item or service.
In addition, these final rules require
that certified IDR entities must consider
the QPA and then must consider all addi-
tional permissible information submitted
by a party to determine which offer best
reflects the appropriate out-of-network
rate, provided the information relates
to the offer for the payment amount for
the qualified IDR item or service that is
the subject of the payment determina-
tion and does not include information
that the certified IDR entity is prohibited
from weighing in making the payment
determination under section 9816(c)(5)
56
Employee Benefits Security Administration. “Group Health Plans Report.” (July 2021). https://www.dol.gov/sites/dolgov/files/EBSA/researchers/statistics/retirement-bulletins/annual-re-
port-on-self-insured-group-health-plans-2022-appendix-a.pdf.
57
Non-issuer TPAs based on data derived from the 2016 Benefit Year reinsurance program contributions.
58
Employee Benefits Security Administration. “Health Insurance Coverage Bulletin.” (March 2020). https://www.dol.gov/sites/dolgov/files/EBSA/researchers/data/health-and-welfare/
health-insurance-coverage-bulletin-2020.pdf.
59
Health care facility is defined in the July 2021 interim final rules. See 26 CFR 54.9816-3T; 29 CFR 2590.716-3; and 45 CFR 149.30.
60
American Hospital Association. “Fast Facts on U.S. Hospitals, 2021.” (January 2021). https://www.aha.org/statistics/fast-facts-us-hospitals.
61
IBIS World. Definitive Healthcare. “Diagnostic & Medical Laboratories Industry in the US—Market Research Report?” (May 2021). https://www.ibisworld.com/industry-statistics/
number-of-businesses/diagnostic-medical-laboratories-united-states/.
62
Emergency Medicine Network. “2018 National Emergency Department Inventory.” (2021). https://www.emnet-usa.org/research/studies/nedi/nedi2018/.
63
Definitive Healthcare. “How Many Ambulatory Surgery Centers are in the US?” (April 2019). https://www.definitivehc.com/blog/how-many-ascs-are-in-the-us.
64
Flex Monitoring Team. “Historical CAH Data.” https://www.flexmonitoring.org/ historical-cah-data-
65
Assistant Secretary for Planning and Evaluation (ASPE) Office of Health Policy. “Air Ambulance Use and Surprise Billing” (September 2021). https://aspe.hhs.gov/sites/default/files/2021-
09/aspe-air-ambulance-ib-09-10-2021.pdf.
66
Please see the October 2021 interim final rules for more information on how these estimates were obtained.
67
As of July 31, 2022, there are 11 certified IDR entities. Center for Medicare and Medicaid Services. “List of Certified Independent Dispute Resolution Entities.” https://www.cms.gov/
nosurprises/Help-resolve-payment-disputes/certified-IDRE-list.

September 12, 2022 214 Bulletin No. 2022–37
(D) of the Code, section 716(c)(5)(D) of
ERISA, and section 2799A-1(c)(5)(D)
of the PHS Act. In considering this addi-
tional information, the certified IDR entity
should evaluate whether information that
is offered is credible and should not give
weight to information that is not credible.
The appropriate out-of-network rate must
be the offer that the certified IDR entity
determines best represents the value of the
qualified IDR item or service.
Because the certified IDR entity must
consider the QPA, the certified IDR entity
should always consider whether the addi-
tional credible information is already
accounted for by the QPA and should not
give weight to information related to a fac-
tor if the certified IDR entity determines
the information was already accounted
for in the calculation of the QPA, to avoid
weighting the same information twice.
In addition, if the parties submit credible
information related to more than one of
the additional factors, the certified IDR
entity should also consider whether the
information submitted regarding each of
those factors is already accounted for by
information submitted relating to other
credible information already before the
certified IDR entity in relation to another
factor and, if so, should not weigh such
information more than once. These final
rules will help ensure that the payment
determination in the Federal IDR process
is a consistent process for providers, facil-
ities, providers of air ambulance services,
plans, and issuers.
The certified IDR entity’s written deci-
sion must include an explanation of what
information the certified IDR entity deter-
mined demonstrated that the offer selected
as the out-of-network rate is the offer that
best represents the value of the qualified
IDR item or service, including the weight
given to the QPA and any additional cred-
ible information submitted in accordance
with these final rules. If the certified IDR
entity relies on any additional information
in selecting an offer, the written decision
must include an explanation of why the
certified IDR entity concluded that this
information was not already reflected in
the qualifying payment amount. These
final rules will help ensure that certified
IDR entities carefully evaluate all credible
non-duplicative information. These final
rules will also promote transparency with
respect to the certified IDR entity’s pay-
ment determination.
F. Costs
This regulatory action seeks to mini-
mize costs to providers, facilities, provid-
ers of air ambulance services, plans, issu-
ers, TPAs, and certified IDR entities.
i. Federal IDR Process for
Nonparticipating Providers or
Nonparticipating Emergency Facilities
As explained in the analysis provided
in the October 2021 interim final rules, the
Departments estimate that there will be
approximately 17,435 claims submitted to
the Federal IDR process each year.
68
After the selected certified IDR entity
has reviewed the offers, the certified IDR
entity must notify the provider or facility
and the plan, issuer, or FEHB carrier and
the Departments of the payment determi-
nation and the reason for such determina-
tion, in a form and manner specified by the
Departments.
69
The Departments estimate
that the annual cost to prepare the notice
of the certified IDR entity’s determination
is $1.2 million. For more information on
this calculation, please refer to the Paper-
work Reduction Act analysis, found in
section V of this preamble.
In addition to the information already
required to be provided with an initial pay-
ment or notice of denial of payment under
the July 2021 interim final rules, including
the QPA, these final rules require that a
plan or issuer must provide, if applicable,
an acknowledgement if all or any portion
of the claim was downcoded; an expla-
nation of why the claim was downcoded,
including a description of which service
codes were altered, if any, and a descrip-
tion of any modifiers that were altered,
added, or removed, if any; and the amount
that would have been the QPA had the
service code or modifier not been down-
coded. In the July 2021 interim final rules,
the Departments estimated that plans and
issuers will be required to provide docu-
ments related to the QPA along with the
initial payment or notice of denial of pay-
ment for approximately 5,068,512 claims
annually from nonparticipating providers
or facilities.
70
The Departments assume
that approximately 10 percent of those
claims will involve downcoding and esti-
mate that the annual cost to prepare the
required documentation and attach it to
each initial payment or notice of denial
of payment sent to the nonparticipating
provider or facility is $4.3 million. For
more information on this calculation,
please refer to the Paperwork Reduction
Act analysis, found in section V of this
preamble.
In total, the Departments estimate that
certified IDR entities, TPAs, and issuers
will incur costs of approximately $5.5
million annually to provide, as applicable,
payment determination notifications and
the additional QPA information required
under these rules.
ii. Federal IDR Process for
Nonparticipating Providers of Air
Ambulance Services
As explained in the October 2021
interim final rules, the Departments
assume that 10 percent of out-of-network
claims for air ambulance services will be
submitted to the Federal IDR process,
71

which would result in nearly 5,000 annual
air ambulance payment determinations via
the Federal IDR process.
72
68
For more details, please refer to the Paperwork Reduction Act analysis, found in section V of this preamble.
69
IDR Payment Determination Notification (section 716(c)(5)(A) of ERISA).
70
See 86 FR 36872 for more information on this estimate.
71
The Departments utilize 10 percent as an assumption to estimate the overall number of providers of air ambulance services billing out-of-network at least once in a year.
72
The Departments estimate that of the 216.2 million individuals with employer-sponsored and other private health coverage (183 million individuals with employer-sponsored health cover-
age and 33.2 million individuals with other private coverage), there are 33.3 air transports per 100,000 individuals, of which 69 percent result in out-of-network bills. The Departments assume
that 10 percent of the out-of-network bills will end up in the Federal IDR process. This is calculated as: 216,200,000 individuals x 0.000333 air transports per individual x 69% x 10%= 4,968.

Bulletin No. 2022–37 215 September 12, 2022
After the certified IDR entity has
reviewed and selected the offer, the cer-
tified IDR entity must notify the provider
of air ambulance services and the plan,
issuer, or FEHB carrier and the Depart-
ments of the payment determination and
include the written decision explaining
such determination.
73
The Departments
estimate that the annual cost to prepare
this notice of the certified IDR entity’s
determination for air ambulance claims is
$0.3 million. For more details, please refer
to the Paperwork Reduction Act analysis,
found in section V of this document.
Similar to these final rules’ provisions
related to the disclosure of downcoded
claims for nonparticipating providers
and nonparticipating emergency facil-
ities, these final rules require that a plan
or issuer must provide, if applicable, an
acknowledgement if all or any portion
of the claim pertaining to air ambulance
services was downcoded; an explanation
of why the claim was downcoded, includ-
ing a description of which service codes
were altered, if any, and a description of
any modifiers that were altered, added,
or removed, if any; and the amount that
would have been the QPA had the service
code or modifier not been downcoded.
The Departments estimate that plans and
issuers will be required to provide these
documents for approximately 49,676
claims annually from providers of air
ambulance services.
74
The Departments
assume that approximately 10 percent of
those claims will involve downcoding and
estimate that the annual cost to prepare the
required documentation and attach it to
each initial payment or notice of denial of
payment sent to the providers of air ambu-
lance service is approximately $42,000.
For more details, please refer to the Paper-
work Reduction Act analysis, found in
section V of this preamble.
In total, the Departments estimate that
certified IDR entities, TPAs, and issuers
will incur costs of approximately $0.4
million annually to provide payment
determination notifications and the addi-
tional QPA information required under
these final rules.
iii. Summary
The Departments estimate the total
annual cost associated with these final
rules to be $5.9 million with $4.3 million
annually attributable to the additional
information related to the QPAs, $1.2 mil-
lion annually attributable to the certified
IDR entity’s payment determination for
nonparticipating provider and emergency
facility claims, and $0.3 million annually
attributable to the certified IDR entity’s
payment determination notification for
nonparticipating provider of air ambu-
lance service claims.
G. Transfers
These final rules make no changes that
impact the transfers as described in the
July 2021 and October 2021 interim final
rules.
H. Uncertainty
These final rules make no changes that
impact the uncertainties as described in
the July 2021 and October 2021 interim
final rules.
I. Regulatory Alternatives
Section 6(a)(3)(C)(iii) of Executive
Order 12866 requires an economically
significant regulation, and encourages
other regulations, to include an assess-
ment of the costs and benefits of poten-
tially effective and reasonable alternatives
to the planned regulation. A discussion of
the regulatory alternatives is included in
this section.
As described in Section I.E. of this pre-
amble, the District Court in Texas Medi-
cal Association and LifeNet vacated pro-
visions in the October 2021 interim final
rules addressing how certified IDR entities
were to weigh the QPA and the additional
factors. The Departments considered the
possibility of not replacing the provisions
vacated by the District Court. However,
in the Departments’ view, this would have
resulted in uncertainty regarding the Fed-
eral IDR process, because certain aspects
of the process would be governed by the
October 2021 interim final rules as pub-
lished in the Federal Register, while oth-
ers would not. This approach could result
in confusion on the part of the public and
certified IDR entities, likely making the
decisions of certified IDR entities less pre-
dictable, adding to the uncertainty and the
costs of the Federal IDR process. There-
fore, the Departments are of the view that
it is more appropriate to make changes to
the Federal IDR process for both non-air
ambulance and air ambulance items and
services in these final rules.
The Departments considered finalizing
the additional factors other than the QPA
that a certified IDR entity may consider
when submitted by one of the disputing
parties without addressing the possibil-
ity that these factors may already have
been accounted for in the QPA. Numer-
ous comments received on the October
2021 interim final rules highlighted that in
many cases, certain factors, such as patient
acuity or the complexity of furnishing the
qualified IDR item or service to the partic-
ipant, beneficiary, or enrollee, will already
be accounted for in the calculation of the
QPA. Commenters acknowledged, how-
ever, that there could be instances in which
the QPA would not adequately account for
the acuity of the patient or complexity of
the service: for example, if the complexity
of a case is an outlier such that the time or
intensity of care exceeds what is typical
for the service code. The Departments are
of the view that, in many cases, factors that
a certified IDR entity may consider other
than the QPA will already be reflected
in the QPA. The QPA is generally calcu-
lated to include characteristics that can
affect costs, including medical specialty,
geographic region, and patient acuity and
case severity, all captured in different
billing codes or aspects of the methodol-
ogy that plans and issuers are required to
follow in calculating the QPA. Therefore,
weighting additional information that is
already taken into account in the calcula-
tion of the QPA would be redundant and
in the Departments’ view, would result
in increased administrative burden to the
certified IDR entity, potentially resulting
in the selection of an offer that does not
best reflect the most appropriate value
73
IDR Payment Determination Notification (section 716(c)(5)(A) of ERISA).
74
The Departments estimate that of the 216.2 million individuals with employer-sponsored and other private health coverage, there are 33.3 air transports per 100,000 individuals, of which
69 percent result in an out-of-network bill. The number of air ambulance claims is estimated as: 216,200,000 individuals x 0.000333 air transports per individual x 69% = 49,676.

September 12, 2022 216 Bulletin No. 2022–37
insofar as additional weight would be
given to information related to a factor
that is already accounted for in the QPA,
effectively weighting that information
twice. Under these final rules, certified
IDR entities must consider the QPA and
then must consider all additional infor-
mation submitted by the parties. To help
ensure that the Federal IDR process results
in determinations that accurately reflect
the fair value of a given item or service,
the certified IDR entity should consider
all additional information submitted by
the parties but should not give weight to
information if it is already accounted for
by any of the other information submitted
by the parties.
J. Conclusion and Summary of Economic
Impacts
The Departments are of the view that
these final rules will promote transpar-
ency, consistency, and predictability in
the Federal IDR process. These final rules
provide a market-based approach that will
help encourage plans and issuers, and
providers, facilities, and providers of air
ambulance services to arrive at reasonable
payment rates.
The Departments estimate that these
final rules will impose incremental annual
costs of approximately $5.9 million.
Over 10 years, the associated costs will
be approximately $44.1 million with an
annualized cost of $5.9 million, using a 7
percent discount rate.
75
V. Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act of 1995 (PRA 95) (44
U.S.C. 3506(c)(2)(A)), the Departments
solicited comments concerning the infor-
mation collection requirements (ICRs)
included in the July 2021 and October
2021 interim final rules. At the same time,
the Departments also submitted ICRs
to OMB, in accordance with 44 U.S.C.
3507(d).
The Departments received comments
that specifically addressed the paperwork
burden analysis of the information collec-
tion requirements contained in the July
2021 and October 2021 interim final rules.
The Departments reviewed these public
comments in developing the paperwork
burden analysis discussed here.
The changes made by these final rules
affect the existing OMB control number,
1210-0169. A copy of the ICR for OMB
Control Number 1210–0169 may be
obtained by contacting the PRA addressee
listed in the following sentence or at www.
RegInfo.gov. For additional informa-
tion, contact James Butikofer, Office of
Research and Analysis, U.S. Department
of Labor, Employee Benefits Security
Administration, 200 Constitution Ave-
nue NW, Room N-5718, Washington, DC
20210; or sent to ebsa.opr@dol.gov.
The OMB will consider all written
comments that they receive on or before
September 26, 2022. Written comments
and recommendations for the proposed
information collection should be sent
within 30 days of publication of this notice
to www.reginfo.gov/public/do/PRA-
Main. Find this particular information
collection by selecting “Currently under
30-day Review—Open for Public Com-
ments” or by using the search function.
Comments are invited on: (1) whether
the collection of information is necessary
for the proper performance of the functions
of the Departments, including whether the
information will have practical utility; (2)
if the information will be processed and
used in a timely manner; (3) the accuracy
of the Departments’ estimates of the bur-
den and cost of the collection of informa-
tion, including the validity of the method-
ology and assumptions used; (4) ways to
enhance the quality, utility, and clarity of
the information collection; and (5) ways
to minimize the burden of the collection of
information on those who are to respond,
including the use of automated collection
techniques or other forms of information
technology.
Group health plans, health insurance
issuers, FEHB carriers, and certified IDR
entities are responsible for ensuring com-
pliance with these final rules. Accord-
ingly, the Departments refer to costs
incurred by plans, issuers, FEHB carriers,
and certified IDR entities. However, it
is expected that most self-insured group
health plans will work with a TPA to meet
the requirements of these final rules. The
Departments recognize the potential that
some of the largest self-insured plans may
seek to meet the requirements of these
final rules in-house and not use a TPA
or other third party. In these cases, those
plans will incur the estimated hour burden
and cost directly.
These final rules add additional bur-
dens to the ICR presented in the October
2021 interim final rules. The following
discussion covers the changes being made
to the ICR and the additional burden these
changes impose, followed by a summary
of the ICR. Copies of the ICR may be
obtained by contacting the PRA addressee.
A. ICRs Regarding Additional
Information to Be Shared with the
Initial Payment or Notice of Denial of
Payment (26 CFR 54.9816-6(d), 29 CFR
2590.716-6(d), and 45 CFR 149.140(d);
OMB Control Number: 1210-0169)
These final rules specify that where a
QPA is calculated based on a downcoded
service code, in addition to the informa-
tion already required to be provided with
an initial payment or notice of denial of
payment under the July 2021 interim final
rules, a plan or issuer must provide, if
applicable, a statement that all or a portion
of the claim was downcoded; an expla-
nation of why the claim was downcoded,
including a description of which service
codes were altered, if any, and a descrip-
tion of any modifiers that were altered or
added, if any; and the amount that would
have been the QPA had the service codes
or modifiers not been downcoded.
The Departments assume that TPAs
will provide this information on behalf of
self-insured plans. In addition, the Depart-
ments 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 Departments estimate that a total of
1,477 issuers and 205 TPAs will incur a
burden to comply with this provision.
In the July 2021 interim final rules,
the Departments estimated that plans
and issuers will be required to provide
documents related to QPAs along with
the initial payment or notice of denial of
75
The costs would be $51.5 million over 10-year period with an annualized cost of $5.9 million, applying a 3 percent discount rate.

Bulletin No. 2022–37 217 September 12, 2022
payment for approximately 5,068,512
claims annually from nonparticipating
providers or facilities.
76
Additionally, the
Departments estimated that plans and
issuers will be required to provide these
documents for approximately 49,676
claims annually from nonparticipating
providers of air ambulance services.
77

In the absence of data, the Departments
assume that approximately 10 percent, or
511,819, of claims from nonparticipating
providers, facilities, and nonparticipating
providers of air ambulance services will
involve downcoding and that it will take a
medical secretary 10 minutes (at an hourly
rate of $50.76
78
) to prepare the required
documentation and include it with each
initial payment or notice of denial of pay-
ment sent to the nonparticipating provider,
facility, or provider of air ambulance
services.
The Departments estimate the addi-
tional QPA information will be provided
for approximately 506,851 claims from
nonparticipating providers or facilities.
The annual burden to prepare the required
documentation and attach it to each initial
payment or notice of denial of payment
sent to the nonparticipating providers or
facilities will be approximately 84,475
hours annually, with an associated equiv-
alent cost of $4.3 million.
79
The Depart-
ments estimate that the additional QPA
information will be provided for approxi-
mately 4,968 claims from providers of air
ambulance services. The annual burden to
prepare the required documentation and
attach it to each initial payment or notice
of denial of payment sent to providers of
air ambulance services will be approxi-
mately 828 hours annually, with an asso-
ciated equivalent cost of $42,029.
80
Thus,
the total estimated burden to provide the
additional QPA information with initial
payments or notices of denial of payment
sent to the nonparticipating providers,
facilities, and providers of air ambulance
services, for all issuers and TPAs, will be
approximately 85,303 hours annually, with
an associated equivalent cost of approxi-
mately $4.3 million.
81
As shown in Table
2, the Departments share jurisdiction, and
it is estimated that 50 percent of the burden
will be accounted for by HHS, 25 percent
of the burden will be accounted for by
DOL, and 25 percent will be accounted for
by Department of the Treasury. Thus, HHS
will account for approximately 42,652
hours with an equivalent cost of approxi-
mately $2,164,990. DOL and the Depart-
ment of the Treasury will each account for
approximately 21,326 hours with an equiv-
alent cost of approximately $1,082,495.
TABLE 2: Summary Annual Cost and Burden Regarding Information to Be Shared About QPA Starting in 2022
Department
Estimated Number of Responses Total Annual Burden (Hours)Estimated Dollar Value of Labor Hours
HHS
255,91042,652$2,164,990
DOL127,95521,326
$1,082,495
Treasury127,95521,326
$1,082,495
B. ICRs regarding the Certified IDR
Entity’s Payment Determination Written
Decision in the Federal IDR Process
for Nonparticipating Providers or
Nonparticipating Emergency Facilities (26
CFR 54.9816-8T, 26 CFR 54.9816-8, 29
CFR 2590.716-8, and 45 CFR 149.510;
OMB Control Number: 1210-0169)
The Departments estimate that 17,435
claims will be submitted as part of the
Federal IDR process each year.
82
After the
certified IDR entity has reviewed the offers
and credible information submitted by the
parties and selected an offer, the certified
IDR entity must notify the provider, facil-
ity, or provider of air ambulance services
and the plan, issuer, or FEHB carrier and
the Departments of the payment determi-
nation and the reason for such determina-
tion, in a form and manner specified by the
Departments.
83
The certified IDR entity’s
written decision must include an expla-
nation of the additional non-prohibited
information that the certified IDR entity
determined demonstrated that the offer
selected is the out-of-network rate that
best represents the value of the qualified
IDR item or service, including the weight
given to the QPA and any additional cred-
ible information submitted in accordance
with these final rules. If the certified IDR
entity relies on any additional information
in selecting an offer, the written decision
must include an explanation of why the
certified IDR entity concluded that this
76
See 86 FR 36872 for more information on this estimate.
77
The Departments estimate that of the 216.2 million individuals with employer-sponsored and other private health coverage, there are 33.3 air transports per 100,000 individuals, of which
69 percent result in an out-of-network bill. The number of air ambulance claims is estimated as: 216,200,000 individuals x 0.000333 air transports per individual x 0.69% = 49,676 claims.
78
Internal DOL calculation based on 2021 labor cost data. For a description of DOL’s methodology for calculating wage rates, see https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-reg-
ulations/rules-and-regulations/technical-appendices/labor-cost-inputs-used-in-ebsa-opr-ria-and-pra-burden-calculations-june-2019.pdf
79
This is calculated as: (5,068,512 documents for nonparticipating providers or facilities) x (10%) x (10 minutes) = 84,475 hours. 84,475 hours x $50.76 = $4,287,951.
80
This is calculated as: (49,676 documents for nonparticipating providers of air ambulance services) x (10%) x (10 minutes) = 828 hours. 828 hours x $50.76 = $42,029.
81
This is calculated as: (5,068,512 documents for nonparticipating providers or facilities + 49,676 documents for nonparticipating providers of air ambulance services) x (10%) x (10 minutes)
= 85,303 hours. 85,303 hours x $50.76 = $4,329,980.
82
In 2020, 10.7 million individuals had employer-sponsored coverage and 1.7 million individuals had other private coverage in New York State, while 183 million individuals had employ-
er-sponsored coverage and 33.2 million individuals had other private coverage nationally. The Departments estimate that New York accounts for 5.7 percent of the private insurance market
((10.7 + 1.7) / (183 + 33.2) = 5.7 percent). (See Employee Benefits Security Administration. “Health Insurance Coverage Bulletin.” (March 2020).) In 2018, New York State had 1,014 IDR
decisions, up from 650 in 2017 and 396 in 2016. (See Adler, Loren. “Experience with New York’s Arbitration Process for Surprise Out-of-Network Bills.” USC-Brookings Schaeffer on Health
Policy. (October 2019).) For purposes of this analysis, the Departments assume that, going forward, New York State will continue to see 1,000 IDR cases each year and that the number of
Federal IDR cases will be proportional to that in New York State by share of covered individuals in the private health coverage market. The number of claims in the Federal IDR process is
calculated in the following manner: 1,000 / 0.057= 17,435.
83
IDR Payment Determination Notification (section 716(c)(5)(A) of ERISA).

September 12, 2022 218 Bulletin No. 2022–37
information was not already reflected in
the qualifying payment amount.
The Departments estimate that, on
average, it will take a physician and med-
ical billing specialist 0.5 hours to prepare
the notice at a composite hourly wage rate
of $136.81.
84
The burden for each certi-
fied IDR entity will be 0.5 hours, with an
equivalent cost of approximately $69.24.
Thus, the total cost burden for all certified
IDR entities to prepare this notice for Fed-
eral IDR claims will be $1.2 million.
85
The total annual cost burden for certi-
fied IDR entities to provide the payment
determination notices regarding Federal
IDR claims will be $1,192,641. As shown
in Table 3, the Departments and OPM
share jurisdiction, and it is estimated that
45 percent of the burden will be accounted
for by HHS, 25 percent will be accounted
for by DOL, 25 percent of the burden will
be accounted for by the Department of the
Treasury, and 5 percent will be accounted for
by OPM. Thus, HHS will account for a cost
burden of $536,689. DOL and the Depart-
ment of the Treasury will each account for a
cost burden of $298,160. OPM will account
for a cost burden of $59,632.
TABLE 3: Summary Annual Cost and
Burden Starting in 2022 Regarding
Certified IDR Entity’s Payment
Determination Written Decision in the
Federal IDR Process for Nonparticipating
Providers or Nonparticipating Emergency
Facilities Claims
Department
HHS$536,689
DOL$298,160
Treasury$298,160
OPM$59,632
C. ICRs Regarding the Certified
IDR Entity’s Payment Determination
Written Decision in the Federal IDR
Process for Nonparticipating Providers
of Air Ambulance Services (26 CFR
54.9817-2T, 26 CFR 54.9817-2, 29 CFR
2590.717-2, and 45 CFR 149.520; OMB
Control Number: 1210-0169)
The Departments estimate there will
be 4,968 claims for air ambulance ser-
vices submitted to the Federal IDR pro-
cess each year.
86
After the certified IDR
entity has reviewed the offers and any
submitted credible information, and
selected an offer, the certified IDR entity
must notify the provider of air ambu-
lance services and the plan, issuer, or
FEHB carrier and the Departments of the
payment determination and include the
written decision explaining such deter-
mination.
87
The certified IDR entity’s
written decision must include an expla-
nation of what information that the certi-
fied IDR entity determined demonstrated
that the offer selected is the out-of-net-
work rate that best represents the value
of the qualified IDR service. This expla-
nation must include the weight given to
the QPA and any additional non-prohib-
ited, credible information submitted in
accordance with these final rules. If the
certified IDR entity relies on any addi-
tional information in selecting an offer,
the written decision must include an
explanation of why the certified IDR
entity concluded that this information
was not already reflected in the qualify-
ing payment amount.
The Departments estimate that, on
average, it will take a physician and med-
ical billing specialist working for the
certified IDR entity 0.5 hour to prepare
the notice of the certified IDR entity’s
determination at a composite hourly
wage rate of $136.81.
88
The burden for
each certified IDR entity will be 0.5
hours, with an equivalent cost of approx-
imately $69.24. Thus, the total cost bur-
den for certified IDR entities to provide
this notice for air ambulance claims will
be $0.3 million.
89
The total annual cost burden for the
certified IDR entities to provide the pay-
ment determination notices regarding
air ambulance claims will be $339,836.
As shown in Table 4, the Departments
and OPM share jurisdiction, and it is
estimated that 45 percent of the burden
will be accounted for by HHS, 25 per-
cent will be accounted for by DOL, 25
percent of the burden will be accounted
for by the Department of the Treasury,
and 5 percent will be accounted for by
OPM. Thus, HHS will account for a
cost burden of $152,926. DOL and the
Department of the Treasury will each
account for a cost burden of $84,959.
OPM will account for a cost burden of
$16,992.
TABLE 4: Summary Annual Cost and
Burden Starting in 2022 Regarding
Certified IDR Entity’s Payment
Determination Written Decision in the
Federal IDR Process for Air Ambulance
Claims
DepartmentEstimated
Number of
Responses
Total
Estimated
Cost
HHS
2,235$152,926
DOL
1,242$84,959
Treasury
1,242$84,959
OPM
248$16,992
84
The Departments use a composite wage rate because different professionals will review different types of claims and groups of individuals. The wage rate of a physician is $192.37, and the
wage rate of a medical billing specialist is $109.03. (Internal DOL calculation based on 2021 labor cost data. For a description of DOL’s methodology for calculating wage rates, see https://
www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/rules-and-regulations/technical-appendices/labor-cost-inputs-used-in-ebsa-opr-ria-and-pra-burden-calculations-june-2019.pdf.)
The composite wage rate is estimated in the following manner: ($192.37 x (1/3) + $109.03 x (2/3) = $136.81).
85
17,453 claims x 0.5 hours x $136.81 as the composite wage rate for a physician and medical billing specialist = $1,192,641.
86
The Departments estimate that of the 183 million individuals with employment-related health insurance and 33.2 million individuals with other private coverage, there are 33.3 air transports
per 100,000 individuals, of which 69 percent result in an out-of-network bill. The Departments assume that 10 percent of the out-of-network bills will end up in the Federal IDR process. The
number of air ambulance service claims is calculated in the following manner: (183,000,000 individuals + 33,200,000 individuals) x 0.000333 air transports per individual x 69% x 10%=
4,968 claims.
87
IDR Payment Determination Notification (section 716(c)(5)(A) of ERISA).
88
The Departments use a composite wage rate because different professionals will review different types of claims and groups of individuals. The wage rate of a physician is $192.37, and the
wage rate of a medical billing specialist is $109.03. (Internal DOL calculation based on 2021 labor cost data. For a description of DOL’s methodology for calculating wage rates, see https://
www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/rules-and-regulations/technical-appendices/labor-cost-inputs-used-in-ebsa-opr-ria-and-pra-burden-calculations-june-2019.pdf.)
The composite wage rate is estimated in the following manner: ($192.37 x (1/3) + $109.03 x (2/3) = $136.81).
89
4,968 air ambulance claims x 0.5 hours x $136.81 as the composite wage rate for a physician and medical billing specialist = $339,836.

Bulletin No. 2022–37 219 September 12, 2022
Summary
The total annual cost burden for cer-
tified IDR entities to provide payment
determination notices regarding non-air
ambulance and air ambulance claims will
be $1,532,477. As shown in Table 5, HHS
will account for a cost burden of approx-
imately $689,615. DOL and the Depart-
ment of the Treasury will each account for
a cost burden of approximately $383,119.
OPM will account for a cost burden of
approximately $76,624.
TABLE 5: Summary Annual Cost and
Burden Starting in 2022 Regarding
Certified IDR Entity’s Payment
Determination Written Decision in
the Federal IDR Process for Non-air
Ambulance and Air Ambulance Claims
DepartmentEstimated
Number of
Responses
Total
Estimated
Cost
HHS10,145$689,615
DOL5,636$383,119
Treasury5,636$383,119
OPM1,127$76,624
These paperwork burden estimates are
summarized as follows:
Agency: Employee Benefits Security
Administration, Department of Labor.
Type of Review: Revision of existing
collection.
Title: Requirements Related to Sur-
prise Billing: Payment Determination
OMB Control Number: 1210-0169.
Affected Public: Private Sector—Busi-
nesses or other for-profits; not-for-profit
institutions.
Estimated Number of
Respondents: 22,828
Estimated Number of Annual
Responses: 163,542
Frequency of Response: Occasionally.
Estimated Total Annual Burden
Hours: 89,521
Estimated Total Annual Burden
Cost: $555,427
VI. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA)
90

imposes certain requirements with respect
to Federal rules that are subject to the
notice and comment requirements of sec-
tion 553(b) of the Administrative Proce-
dure Act (APA) and are not likely to have
a significant economic impact on a sub-
stantial number of small entities. Unless
the head of an agency determines that a
final rule is not likely to have a significant
economic impact on a substantial number
of small entities, section 604
91
of the RFA
requires the agency to present a final reg-
ulatory flexibility analysis of these final
rules.
The Departments certify that these
final rules would not have a significant
impact on a substantial number of small
entities during the first year. The Depart-
ments have prepared a justification for this
determination below.
A. Affected Small Entities
The Small Business Administration
(SBA), pursuant to the Small Business
Act,
92
defines small businesses and issues
size standards by industry. These final
rules will affect all health insurance issu-
ers, TPAs, and certified IDR entities.
For purposes of analysis under the RFA,
the Departments consider an employee
benefit plan with fewer than 100 partici-
pants to be a small entity.
93
The basis of
this definition is found in section 104(a)
(2) of ERISA, which permits the Secretary
of Labor to prescribe simplified annual
reports for plans that cover fewer than
100 participants. Under section 104(a)(3)
of ERISA, the Secretary may also pro-
vide for exemptions or simplified annual
reporting and disclosure for welfare bene-
fit plans. Pursuant to the authority of sec-
tion 104(a)(3), DOL has previously issued
simplified reporting provisions and limited
exemptions from reporting and disclosure
requirements for small plans, including
unfunded or insured welfare plans, which
cover fewer than 100 participants and
satisfy certain requirements. See 29 CFR
2520.104-20, 2520.104-21, 2520.104-41,
2520.104-46, and 2520.104b-10. While
some large employers have small plans,
small plans are maintained generally by
small employers. Thus, the Departments
are of the view that assessing the impact
of these final rules on small plans is an
appropriate substitute for evaluating the
effect on small entities. The definition
of small entity considered appropriate
for this purpose differs, however, from a
definition of small business based on size
standards promulgated by the SBA
94
pur-
suant to the Small Business Act.
95
As discussed in the regulatory impact
analysis, these final rules will affect health
insurance issuers and TPAs. In 2020, there
were 205 TPAs
96
and 1,477 issuers in
the U.S. health insurance market.
97
Most
TPAs would be classified under the North
American Industry Classification Sys-
tem (NAICS) code 524292 (Third Party
Administration of Insurance and Pension
Funds). According to SBA size standards,
98

entities with average annual receipts of
$40 million or less are considered small
entities. By this standard, the Departments
estimate that 63.5 percent of TPAs (130
TPAs) are small under the SBA’s size
standards.
99
Most health insurance issuers
90
5 U.S.C. 601 et seq. (1980).
91
5 U.S.C. 604 (1980).
92
15 U.S.C. 631 et seq.
93
The Departments consulted with the Small Business Administration Office of Advocacy in making this determination, as required by 5 U.S.C. 603(c) and 13 CFR 121.903(c) in a memo
dated June 4, 2020.
94
13 CFR 121.201 (2011).
95
15 U.S.C. 631 et seq. (2011).
96
Non-issuer TPAs based on data derived from the 2016 Benefit Year reinsurance program contributions.
97
Centers for Medicare and Medicaid Services. “Medical Loss Ratio Data and System Resources” (2020). https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr
98
Available at https://www.sba.gov/document/support--table-size-standards.
99
Based on data from the NAICS Association for NAICS code 524292, the Departments estimate the percent of businesses within the industry of Third Party Administration of Insurance
and Pension Funds with less than $40 million in annual sales. (See NAICS Association. “Market Analysis Profile: NAICS Code & Annual Sales.” https://www.naics.com/business-lists/
counts-by-naics-code/.)

September 12, 2022 220 Bulletin No. 2022–37
would be classified under the NAICS code
524114 (Direct Health and Medical Insur-
ance Carriers). According to SBA size
standards,
100
entities with average annual
receipts of $41.5 million or less are con-
sidered small entities. By this standard,
the Departments estimate that 8.5 percent
of issuers (125 issuers), are small under
the SBA’s size standards.
101
This estimate may overstate the actual
number of small health insurance issuers
that may be affected. The Departments
expect that few insurance issuers under-
writing comprehensive health insurance
coverage fall below these size thresholds.
Based on data from medical loss ratio
(MLR) annual report
102
submissions for
the 2020 MLR reporting year, approx-
imately 78 out of 481 issuers of health
insurance coverage nationwide had total
premium revenue of $41.5 million or
less. This estimate may overstate the
actual number of small health insurance
issuers that may be affected, since over
72 percent of these small issuers belong
to larger holding groups, and many, if
not all, of these small issuers are likely
to have non-health lines of business that
will result in their revenues exceeding
$41.5 million. However, to produce a
conservative estimate, for the purposes
of this analysis, the Departments assume
8.5 percent, (125 issuers) are considered
small entities.
These final rules will also affect health
care providers because the Departments
assume that the cost of preparing and
delivering the notice of the certified IDR
entity’s determination is included in the
certified IDR entity fees paid by providers,
facilities, providers of air ambulance ser-
vices, plans, issuers, and FEHB carriers.
The Departments estimate that 140,270
physicians,

on average, bill on an out-of-
network basis. The number of small phy-
sicians is estimated based on the SBA’s
size standards. The size standard applied
for providers is NAICS 62111 (Offices of
Physicians), for which a business with less
than $14 million in receipts is considered
to be small. By this standard, the Depart-
ments estimate that 45.8 percent (64,232
physicians) are considered small under the
SBA’s size standards.
103
These final rules
are also expected to affect non-physician
providers who bill on an out-of-network
basis. The Departments lack data on the
number of non-physician providers who
would be impacted.
The Departments do not have the
same level of data for the air ambulance
sub-sector. In 2020, the total revenue of
providers of air ambulance services is
estimated to be $4.2 billion with 1,114
air ambulance bases.
104
This results in an
industry average of $3.8 million per air
ambulance base. Accordingly, the Depart-
ments are of the view that most providers
of air ambulance services are likely to be
small entities.
B. Impact of the Final Rules
In addition to the information already
required to be provided with an initial
payment or notice of denial of payment
under the July 2021 interim final rules,
including the QPA, these final rules
require that a plan or issuer must provide,
if applicable, an acknowledgement if all
or any portion of the claim was down-
coded; an explanation of why the claim
was downcoded, including a description
of which service codes were altered, if
any, and a description of any modifiers
that were altered, added, or removed, if
any; and the amount that would have been
the QPA had the service code or modifier
not been downcoded. The total annual
burden for all issuers and TPAs for pro-
viding the additional information related
to the QPA is estimated to be 85,303 hours
with an equivalent cost of approximately
$4.3 million. For more details, please refer
to the Paperwork Reduction Act analysis,
found in section VI of this preamble.
In addition, after the certified IDR
entity has reviewed the offers and selected
an offer, the certified IDR entity must
explain its determination in a written
decision submitted to the parties and
the Departments, in a form and manner
specified by the Departments. The cer-
tified IDR entity’s written decision must
include an explanation of what informa-
tion the certified IDR entity determined
demonstrated that the offer selected is the
out-of-network rate that best represents
the value of the qualified IDR item or ser-
vice. This explanation must include the
weight given to the QPA and any addi-
tional non-prohibited, credible informa-
tion submitted in accordance with these
final rules. If the certified IDR entity relies
on any additional information in selecting
an offer, the written decision must include
an explanation of why the certified IDR
entity concluded that this information was
not already reflected in the qualifying pay-
ment amount. The total estimated annual
cost burden for certified IDR entities to
provide payment determination notices
regarding non-air ambulance Federal IDR
claims is estimated to be $1.2 million and
the total estimated annual cost burden for
certified IDR entities to provide payment
determination notices regarding air ambu-
lance Federal IDR claims is estimated to
be $0.3 million. The Departments assume
for this calculation that half of the cost
will fall on the providers, providers of
air ambulance services, and facilities and
the remaining half will fall on plans, issu-
ers, and FEHB carriers. For more details,
please refer to the Paperwork Reduction
Act analysis, found in section V of this
preamble.
To estimate the proportion of the total
costs that would fall onto small entities,
the Departments assume that the propor-
tion of costs is proportional to the industry
100
Available at https://www.sba.gov/document/support--table-size-standards.
101
Based on data from the NAICS Association for NAICS code 524114, the Departments estimate the percent of businesses within the industry of Direct Health and Medical Insurer Carriers
with less than $41.5 million in annual sales. (See NAICS Association. “Market Analysis Profile: NAICS Code & Annual Sales.” https://www.naics.com/business-lists/counts-by-naics-code/.)
102
Available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.html.
103
Based on data from the NAICS Association for NAICS code 62111, the Departments estimate the percent of businesses within the industry of Offices of Physicians with less than $14
million in annual sales. (See NAICS Association. “Market Analysis Profile: NAICS Code & Annual Sales.” https://www.naics.com/business-lists/counts-by-naics-code/.)
104
ASPE Office of Health Policy. “Air Ambulance Use and Surprise Billing” (September 2021). https://aspe.hhs.gov/sites/default/files/2021-09/aspe-air-ambulance-ib-09-10-2021.pdf. U.S.
Small Business Administration. “Table of Small Business Size Standards Matched to North American Industry Classification System Codes.” https://www.naics.com/business-lists/counts-
by-naics-code/. https://www.sba.gov/sites/default/files/2022-05/Table%20of%20Size%20Standards_Effective%20May%202%202022_Final.pdf.

Bulletin No. 2022–37 221 September 12, 2022
receipts. The Departments are of the view
that this assumption is reasonable because
the number of providers, facilities, and
providers of air ambulance services that
receive initial and additional information
about the QPA is likely to be proportional
to the amount of business in which the
entity is involved. Applying data from
the Census Bureau of receipts by size for
each industry, the Departments estimate
that small issuers will incur 0.2 percent of
the total costs incurred by all issuers and
small providers will incur 37 percent of
the total cost by all providers.
105
Accordingly, the Departments estimate
that small issuers and TPAs will incur an
annual cost of $4,330 associated with dis-
closing additional information about the
QPA.
106
For each small issuer and TPA,
this results in an estimated annual cost of
$16.98.
107
For the payment determination notice
regarding disputes involving non-air
ambulance claims, the Departments esti-
mate that the total annual cost for all
small issuers will be $1,193 and the total
annual cost for small providers will be
$219,446.
108
This results in a per-entity
annual cost of $9.54 for small issuers and
a per-entity annual cost of $3.42 for small
providers that are not providers of air
ambulance services.
109
For the payment determination notice
regarding a dispute involving air ambu-
lance claims, the Departments estimate
that the total annual cost for small issuers
will be $344 and the total annual cost for
all small providers of air ambulance ser-
vices will be $62,530.
110
This results in a
per-entity annual cost of $2.72 for small
issuers and a per-entity annual cost of
$56.13 for small providers of air ambu-
lance services.
111
The number of impacted small health
plans is not a significant number of plans
compared to the total universe of 1.9 mil-
lion small health plans. Assuming that
17,435 non-air ambulance claims and
4,968 air ambulance claims are submit-
ted to the Federal IDR process each year,
only one percent of small health plans will
be impacted.
112
The number of impacted
plans and issuers may be even smaller,
if some plans and issuers have multiple
disputes that are batched in the Federal
IDR process. By batching qualified IDR
items and services, there may be a reduc-
tion in the per-service cost of the Federal
IDR process, and potentially the aggregate
administrative costs, because the Federal
IDR process is likely to exhibit at least
some economies of scale.
113
VII. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates
Reform Act of 1995 (UMRA) requires
each Federal agency to prepare a written
statement assessing the effects of any Fed-
eral mandate in a proposed agency rule, or
a finalization of such a proposal, that may
result in an expenditure of $100 million
or more (adjusted annually for inflation
with the base year 1995) in any one year
by State, local, and tribal governments, in
the aggregate, or by the private sector.
114

In 2022, that threshold is approximately
$165 million. For purposes of the UMRA,
these final rules do not include any Fed-
eral mandate that the Departments expect
to result in such expenditures by State,
local, or tribal governments.
VIII. Federalism Statement
Executive Order 13132 outlines fun-
damental principles of federalism and
requires Federal agencies to adhere to spe-
cific criteria when formulating and imple-
menting policies that have “substantial
direct effects” on the States, the relation-
ship 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 feder-
alism implications must consult with State
and local officials and describe the extent
of their consultation and the nature of the
concerns of State and local officials in the
preamble to these final rules.
In the Departments’ view, these final
rules have federalism implications because
they have direct effects on the States, the
relationship between the National Govern-
ment and the States, or the distribution of
power and responsibilities among various
levels of government. State and local gov-
ernment providers, facilities, and health
plans may be subject to the Federal IDR
process or an All-Payer Model Agreement
or a specified State law. Additionally,
the No Surprises Act authorizes States
to enforce the new requirements, includ-
ing those related to balance billing, with
respect to issuers, providers, facilities, and
providers of air ambulance services, with
HHS enforcing only in cases in which the
State has notified HHS that the State does
not have the authority to enforce or is oth-
erwise not enforcing, or HHS has made
a determination that a State has failed to
substantially enforce the requirements.
However, in the Departments’ view, the
federalism implications of these final
rules are substantially mitigated because
the Departments expect that some States
will have their own process for determin-
ing the total amount payable under a plan
or coverage. Where a State does not have
an applicable All-Payer Model Agree-
ment, but does have such a specified State
law, the State law, rather than the Federal
IDR process, will apply. The Departments
anticipate that some States with their own
105
Census Bureau. “2017 SUSB Annual Data Tables by Establishment Industry, Data by Enterprise Receipt Size.” (May 2021). https://www.census.gov/data/tables/2017/econ/sus-
b/2017-susb-annual.html.
106
The annual cost is estimated as: $4,329,980 x 0.5 x 0.2% = $4,330.
107
The cost is estimated as: $4,330 / (125 Issuers + 130 TPAs) = $16.98.
108
The annual cost for issuers is estimated as: $1,192,641 x 0.5 x 0.2% = $1,193. The annual cost for small physicians is estimated as: $1,192,641 x 0.5 x 36.8% = $219,446.
109
The annual per-claim cost for issuers is estimated as: $1,193 / 125 Issuers = $9.54. The annual per-claim cost for small physicians is estimated as: $219,446 / 64,232 small physicians =
$3.42.
110
The annual cost for issuers is estimated as: $339,836 x 0.5 x 0.2% = $340. The annual cost for small providers of air ambulance services is estimated as: $339,836 x 0.5 x 36.8% = $62,530.
111
The annual per-claim cost for issuers is estimated as: $340 / 125 Issuers = $2.72. The annual per-claim cost for small providers of air ambulance services is estimated as: $62,530 / 1,114
providers of air ambulance services = $56.13.
112
(17,435 claims + 4,968 air ambulance claims) / 1,927,786 ERISA health plans = 1% (Source: 2020 Medical Expenditure Panel Survey-Insurance Component).
113
Matthew Fiedler, Loren Adler, and Benedic Ippolito. “Recommendations for Implementing the No Surprises Act.” U.S.C.-Brookings Schaeffer on Health Policy. (March 2021). https://
www.brookings.edu/ blog/ usc-brookings-schaeffer-on-health-policy/ 2021/ 03/ 16/ recommendations-for-implementing-the-no-surprises-act/
114
2 U.S.C. 1501 et seq. (1995).

September 12, 2022 222 Bulletin No. 2022–37
IDR processes or other mechanism for
determining the out-of-network rate may
want to change their laws or adopt new
laws in response to these final rules. The
Departments anticipate that these States
will incur a small incremental cost when
making changes to their laws.
In general, section 514 of ERISA pre-
empts state laws to the extent that they
relate to any private covered employee
benefit plan, including covered group
health plans, and preserves State laws that
regulate insurance, banking, or securities.
While ERISA prohibits States from regu-
lating a plan as an insurance or investment
company or bank, the preemption provi-
sions of section 731 of ERISA and section
2724 of the PHS Act (implemented in 29
CFR 2590.731(a) and 45 CFR 146.143(a))
apply so that requirements of Part 7 of
ERISA and title XXVII of the PHS Act
(including those of the No Surprises Act)
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
health insurance issuers in connection with
group health insurance coverage except to
the extent that such standard or require-
ment prevents the application of a require-
ment” of a Federal standard. The con-
ference report accompanying the Health
Insurance Portability and Accountability
Act of 1996 (HIPAA) indicates that this
is intended to be the “narrowest” preemp-
tion of State laws.
115
Additionally, the No
Surprises Act requires that when a State
law determines the total amount payable
under such a plan, coverage, or issuer for
emergency services or to nonparticipating
providers related to patient visits to par-
ticipating facilities for nonemergency ser-
vices, the State law will apply, rather than
the Federal IDR process specified in these
final rules.
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 engaged in efforts to
consult with and work cooperatively with
affected States, including participating in
conference calls with and attending con-
ferences 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 geo-
graphic regions to be used in the method-
ology for calculating the QPA as detailed
in the July 2021 interim final rules.
In developing these final rules, the
Departments attempted to balance the
States’ interests in regulating health insur-
ance issuers, providers, and facilities with
the need to ensure at least the minimum
Federal consumer protections in every
State. By doing so, the Departments com-
plied with the requirements of Executive
Order 13132.
List of Subjects
26 CFR Part 54
Excise taxes, Health care, Health insur-
ance, Pensions, Reporting and record-
keeping 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 149
Balance billing, Health care, Health
insurance, Reporting and recordkeeping
requirements, Surprise billing, State reg-
ulation of health insurance, Transparency
in coverage.
Douglas W. O’Donnell,
Deputy Commissioner for Services
and Enforcement,
Internal Revenue Service.
Lily L. Batchelder,
Assistant Secretary of the Treasury
(Tax Policy).
Ali Khawar,
Acting Assistant Secretary, Employee
Benefits Security Administration, U.S.
Department of Labor.
Xavier Becerra,
Secretary, Department of Health and
Human Services.
115
See House Conf. Rep. No. 104-736, at 205, reprinted in 1996 U.S. Code Cong. & Admin. News 2018.

Bulletin No. 2022–37 223 September 12, 2022
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
Adoption of the
Amendments to the
Regulations
Accordingly, the Treasury Department
and the IRS adopts as final the temporary
regulations adding 26 CFR 54.9816-6T
and 54.9817-2T published at 86 FR 36872
(July 13, 2021) and 54.9816-8T published
at 86 FR 55980 (October 7, 2021), with
the following changes to 26 CFR part 54:
PART 54—PENSION EXCISE TAXES
1. The authority citation for part 54
continues to read in part as follows:
Authority: 26 U.S.C. 7805, unless
otherwise noted.
* * * * *
2. Section 54.9816-6 is added to read
as follows:
§ 54.9816-6 Methodology for
calculating qualifying payment
amount.
(a) For further guidance see § 54.9816-
6T(a) introductory text through (a)(17).
(1) – (17) [Reserved]
(18) Downcode means the alteration
by a plan or issuer of a service code to
another service code, or the alteration,
addition, or removal by a plan or issuer of
a modifier, if the changed code or modi-
fier is associated with a lower qualifying
payment amount than the service code or
modifier billed by the provider, facility, or
provider of air ambulance services.
(b) – (c) For further guidance see
§ 54.9816-6T(b) and (c).
(d) For further guidance see § 54.9816-
6T(d) introductory text through (d)(1)(i).
(1) [Reserved]
(i) [Reserved]
(ii) If the qualifying payment amount
is based on a downcoded service code or
modifier–
(A) A statement that the service code
or modifier billed by the provider, facility,
or provider of air ambulance services was
downcoded;
(B) An explanation of why the claim
was downcoded, which must include a
description of which service codes were
altered, if any, and a description of which
modifiers were altered, added, or removed,
if any; and
(C) The amount that would have
been the qualifying payment amount had
the service code or modifier not been
downcoded.
(iii) – (v) For further guidance see
§ 54.9816-6T(d)(1)(iii) through (v).
(2) For further guidance see § 54.9816-
6T(d)(2).
(e) – (f) For further guidance see
§ 54.9816-6T(e) and (f).
(g) Applicability date. The provisions
of this section are applicable for plan
years beginning on or after January 1,
2022, except that paragraph (a)(18) of
this section regarding the definition of
the term “downcode” and paragraph (d)
(1)(ii) of this section regarding addi-
tional information that must be provided
if the qualifying payment amount is
based on a downcoded service code or
modifier are applicable with respect to
items or services provided or furnished
on or after October 25, 2022, for plan
years beginning on or after January 1,
2022.
3. Section 54.9816-6T is amended by:
a. Adding paragraph (a)(18);
b. Redesignating paragraphs (d)(1)(ii)
through and (iv) as paragraphs (d)(1)(iii)
through (v), respectively; and
c. Adding a new paragraph (d)(1)(ii).
The additions read as follows:
§ 54.9816-6T Methodology for
calculating qualifying payment amount
(temporary).
(a) * * *
(18) For further guidance see
§ 54.9816-6(a)(18).
* * * * *
(d) * * *
(1) * * *
(ii) For further guidance see § 54.9816-
6(d)(1)(ii);
* * * * *
4. Section 54.9816-8 is added to read
as follows:
§ 54.9816-8 Independent dispute
resolution process.
(a) – (b) For further guidance see
§ 54.9816-8T(a) and (b).
(c) For further guidance see § 54.9816-
8T(c) introductory text through (c)(3).
(1) – (3) [Reserved]
(4) For further guidance see § 54.9816-
8T(c)(4) introductory text through (c)(4)
(ii) introductory text.
(i) [Reserved]
(ii) [Reserved]
(A) Select as the out-of-network rate
for the qualified IDR item or service one
of the offers submitted under § 54.9816-
8T(c)(4)(i), weighing only the consider-
ations specified in paragraph (c)(4)(iii)
of this section (as applied to the informa-
tion provided by the parties pursuant to
§ 54.9816-8T(c)(4)(i)). The certified IDR
entity must select the offer that the certi-
fied IDR entity determines best represents
the value of the qualified IDR item or ser-
vice as the out-of-network rate.
(B) For further guidance see § 54.9816-
8T(c)(4)(ii)(B).
(iii) Considerations in determination.
In determining which offer to select:
(A) The certified IDR entity must con-
sider the qualifying payment amount(s)
for the applicable year for the same or
similar item or service.
(B) The certified IDR entity must then
consider information submitted by a party
that relates to the following circumstances:
(1) The level of training, experience,
and quality and outcomes measurements
of the provider or facility that furnished
the qualified IDR item or service (such
as those endorsed by the consensus-based
entity authorized in section 1890 of the
Social Security Act).
(2) The market share held by the pro-
vider or facility or that of the plan or issuer
in the geographic region in which the qual-
ified IDR item or service was provided.
(3) The acuity of the participant or ben-
eficiary receiving the qualified IDR item
or service, or the complexity of furnishing
the qualified IDR item or service to the
participant or beneficiary.

September 12, 2022 224 Bulletin No. 2022–37
(4) The teaching status, case mix, and
scope of services of the facility that fur-
nished the qualified IDR item or service,
if applicable.
(5) Demonstration of good faith efforts
(or lack thereof) made by the provider or
facility or the plan or issuer to enter into
network agreements with each other, and,
if applicable, contracted rates between the
provider or facility, as applicable, and the
plan or issuer, as applicable, during the
previous 4 plan years.
(C) The certified IDR entity must also
consider information provided by a party
in response to a request by the certified
IDR entity under § 54.9816-8T(c)(4)
(i)(A)(2) that relates to the offer for the
payment amount for the qualified IDR
item or service that is the subject of the
payment determination and that does not
include information on factors described
in § 54.9816-8T(c)(4)(v).
(D) The certified IDR entity must also
consider additional information submit-
ted by a party that relates to the offer for
the payment amount for the qualified IDR
item or service that is the subject of the
payment determination and that does not
include information on factors described
in § 54.9816-8T(c)(4)(v).
(E) In weighing the considerations
described in paragraphs (c)(4)(iii)(B)
through (D) of this section, the certified
IDR entity should evaluate whether the
information is credible and relates to the
offer submitted by either party for the pay-
ment amount for the qualified IDR item or
service that is the subject of the payment
determination. The certified IDR entity
should not give weight to information to
the extent it is not credible, it does not
relate to either party’s offer for the pay-
ment amount for the qualified IDR item
or service, or it is already accounted for
by the qualifying payment amount under
paragraph (c)(4)(iii)(A) of this section or
other credible information under para-
graphs (c)(4)(iii)(B) through (D) of this
section.
(iv) Examples. The rules of paragraph
(c)(4)(iii) of this section are illustrated
in the following paragraphs. Each exam-
ple assumes that the Federal IDR pro-
cess applies for purposes of determining
the out-of-network rate, that both parties
have submitted the information parties are
required to submit as part of the Federal
IDR process, and that the submitted infor-
mation does not include information on
factors described in paragraph (c)(4)(v) of
this section:
(A) Example 1 – (1) Facts. A level 1 trauma
center that is a nonparticipating emergency facil-
ity and an issuer are parties to a payment deter-
mination in the Federal IDR process. The facility
submits an offer that is higher than the qualifying
payment amount. The facility also submits addi-
tional written information showing that the scope
of services available at the facility was critical to
the delivery of care for the qualified IDR item or
service provided, given the particular patient’s acu-
ity. This information is determined to be credible by
the certified IDR entity. Further, the facility submits
additional information showing the contracted rates
used to calculate the qualifying payment amount
for the qualified IDR item or service were based on
a level of service that is typical in cases in which
the services are delivered by a facility that is not
a level 1 trauma center and that does not have the
capability to provide the scope of services pro-
vided by a level 1 trauma center. This information
is also determined to be credible by the certified
IDR entity. The issuer submits an offer equal to the
qualifying payment amount. No additional informa-
tion is submitted by either party. The certified IDR
entity determines that all the information submitted
by the nonparticipating emergency facility relates
to the offer for the payment amount for the qualified
IDR item or service that is the subject of the pay-
ment determination.
(2) Conclusion. In this paragraph (c)(4)(iv)(A)
(Example 1), the certified IDR entity must consider
the qualifying payment amount. The certified IDR
entity then must consider the additional information
submitted by the nonparticipating emergency facil-
ity, provided the information relates to circumstances
described in paragraphs (c)(4)(iii)(B) through (D) of
this section and relates to the offer for the payment
amount for the qualified IDR item or service that
is the subject of the payment determination. If the
certified IDR entity determines that it is appropriate
to give weight to the additional credible information
submitted by the nonparticipating emergency facility
and that the additional credible information submit-
ted by the facility demonstrates that the facility’s
offer best represents the value of the qualified IDR
item or service, the certified IDR entity should select
the facility’s offer.
(B) Example 2 – (1) Facts. A nonparticipating
provider and an issuer are parties to a payment deter-
mination in the Federal IDR process. The provider
submits an offer that is higher than the qualifying
payment amount. The provider also submits addi-
tional written information regarding the level of
training and experience the provider possesses. This
information is determined to be credible by the cer-
tified IDR entity, but the certified IDR entity finds
that the information does not demonstrate that the
provider’s level of training and experience relates to
the offer for the payment amount for the qualified
IDR item or service that is the subject of the pay-
ment determination (for example, the information
does not show that the provider’s level of training
and experience was necessary for providing the qual-
ified IDR service that is the subject of the payment
determination to the particular patient, or that the
training or experience made an impact on the care
that was provided). The nonparticipating provider
does not submit any additional information. The
issuer submits an offer equal to the qualifying pay-
ment amount, with no additional information.
(2) Conclusion. In this paragraph (c)(4)(iv)(B)
(Example 2), the certified IDR entity must consider
the qualifying payment amount. The certified IDR
entity must then consider the additional information
submitted by the nonparticipating provider, provided
the information relates to circumstances described in
paragraphs (c)(4)(iii)(B) through (D) of this section
and relates to the offer for the payment amount for
the qualified IDR item or service that is the subject
of the payment determination. In addition, the certi-
fied IDR entity should not give weight to informa-
tion to the extent it is already accounted for by the
qualifying payment amount or other credible infor-
mation under paragraphs (c)(4)(iii)(B) through (D)
of this section. If the certified IDR entity determines
that the additional information submitted by the pro-
vider is credible but does not relate to the offer for
the payment amount for the qualified IDR service
that is the subject of the payment determination, and
determines that the issuer’s offer best represents the
value of the qualified IDR service, in the absence of
any other credible information that relates to either
party’s offer, the certified IDR entity should select
the issuer’s offer.
(C) Example 3 – (1) Facts. A nonparticipat-
ing provider and an issuer are parties to a payment
determination in the Federal IDR process involving
an emergency department visit for the evaluation
and management of a patient. The provider submits
an offer that is higher than the qualifying payment
amount. The provider also submits additional written
information showing that the acuity of the patient’s
condition and complexity of the qualified IDR ser-
vice furnished required the taking of a comprehen-
sive history, a comprehensive examination, and
medical decision making of high complexity. This
information is determined to be credible by the certi-
fied IDR entity. The issuer submits an offer equal to
the qualifying payment amount for CPT code 99285,
which is the CPT code for an emergency department
visit for the evaluation and management of a patient
requiring a comprehensive history, a comprehensive
examination, and medical decision making of high
complexity. The issuer also submits additional writ-
ten information showing that this CPT code accounts
for the acuity of the patient’s condition. This infor-
mation is determined to be credible by the certified
IDR entity. The certified IDR entity determines that
the information provided by the provider and issuer
relates to the offer for the payment amount for the
qualified IDR service that is the subject of the pay-
ment determination. Neither party submits any addi-
tional information.
(2) Conclusion. In this paragraph (c)(4)(iv)(C)
(Example 3), the certified IDR entity must consider
the qualifying payment amount. The certified IDR
entity then must consider the additional informa-
tion submitted by the parties, but the certified IDR
entity should not give weight to information to the
extent it is already accounted for by the qualifying
payment amount or other credible information under
paragraphs (c)(4)(iii)(B) through (D) of this section.

Bulletin No. 2022–37 225 September 12, 2022
If the certified IDR entity determines the additional
information on the acuity of the patient and com-
plexity of the service is already accounted for in the
calculation of the qualifying payment amount, the
certified IDR entity should not give weight to the
additional information provided by the provider. If
the certified IDR entity determines that the issuer’s
offer best represents the value of the qualified IDR
service, the certified IDR entity should select the
issuer’s offer.
(D) Example 4 — (1) Facts. A nonparticipating
emergency facility and an issuer are parties to a
payment determination in the Federal IDR process.
Although the facility is not participating in the issu-
er’s network during the relevant plan year, it was a
participating facility in the issuer’s network in the
previous 4 plan years. The issuer submits an offer
that is higher than the qualifying payment amount
and that is equal to the facility’s contracted rate
(adjusted for inflation) for the previous year with
the issuer for the qualified IDR service. The issuer
also submits additional written information showing
that the contracted rates between the facility and the
issuer during the previous 4 plan years were higher
than the qualifying payment amount submitted by the
issuer, and that these prior contracted rates account
for the case mix and scope of services typically fur-
nished at the nonparticipating facility. The certified
IDR entity determines this information is credible
and that it relates to the offer submitted by the issuer
for the payment amount for the qualified IDR service
that is the subject of the payment determination. The
facility submits an offer that is higher than both the
qualifying payment amount and the contracted rate
(adjusted for inflation) for the previous year with
the issuer for the qualified IDR service. The facility
also submits additional written information, with the
intent to show that the case mix and scope of services
available at the facility were integral to the service
provided. The certified IDR entity determines this
information is credible and that it relates to the offer
submitted by the facility for the payment amount for
the qualified IDR service that is the subject of the
payment determination. Neither party submits any
additional information.
(2) Conclusion. In this paragraph (c)(4)(iv)(D)
(Example 4), the certified IDR entity must consider
the qualifying payment amount. The certified IDR
entity then must consider the additional information
submitted by the parties, but should not give weight
to information to the extent it is already accounted
for by the qualifying payment amount or other cred-
ible information under paragraphs (c)(4)(iii)(B)
through (D) of this section. If the certified IDR entity
determines that the information submitted by the
facility regarding the case mix and scope of services
available at the facility includes information that is
also accounted for in the information the issuer sub-
mitted regarding prior contracted rates, then the cer-
tified IDR entity should give weight to that informa-
tion only once. The certified IDR entity also should
not give weight to the same information provided by
the nonparticipating emergency facility in relation
to any other factor. If the certified IDR entity deter-
mines that the issuer’s offer best represents the value
of the qualified IDR service, the certified IDR entity
should select the issuer’s offer.
(E) Example 5 — (1) Facts. A nonparticipat-
ing provider and an issuer are parties to a payment
determination in the Federal IDR process regarding
a qualified IDR service for which the issuer down-
coded the service code that the provider billed.
The issuer submits an offer equal to the qualifying
payment amount (which was calculated using the
downcoded service code). The issuer also submits
additional written information that includes the
documentation disclosed to the nonparticipating
provider under § 54.9816-6(d)(1)(ii) at the time
of the initial payment (which describes why the
service code was downcoded). The certified IDR
entity determines this information is credible and
that it relates to the offer for the payment amount
for the qualified IDR service that is the subject of
the payment determination. The provider submits an
offer equal to the amount that would have been the
qualifying payment amount had the service code not
been downcoded. The provider also submits addi-
tional written information that includes the docu-
mentation disclosed to the nonparticipating provider
under § 54.9816-6(d)(1)(ii) at the time of the initial
payment. Further, the provider submits additional
written information that explains why the billed ser-
vice code was more appropriate than the downcoded
service code, as evidence that the provider’s offer,
which is equal to the amount the qualifying payment
amount would have been for the service code that
the provider billed, best represents the value of the
service furnished, given its complexity. The certified
IDR entity determines this information to be credible
and that it relates to the offer for the payment amount
for the qualified IDR service that is the subject of the
payment determination. Neither party submits any
additional information.
(2) Conclusion. In this paragraph (c)(4)(iv)(E)
(Example 5), the certified IDR entity must consider
the qualifying payment amount, which is based
on the downcoded service code. The certified IDR
entity then must consider whether to give weight
to additional information submitted by the parties.
If the certified IDR entity determines that the addi-
tional credible information submitted by the pro-
vider demonstrates that the nonparticipating provid-
er’s offer, which is equal to the qualifying payment
amount for the service code that the provider billed,
best represents the value of the qualified IDR ser-
vice, the certified IDR entity should select the non-
participating provider’s offer.
(v) For further guidance see § 54.9816-
8T(c)(4)(v) through (c)(4)(vi)(A).
(vi) [Reserved]
(A) [Reserved]
(B) The certified IDR entity’s writ-
ten decision must include an explana-
tion of their determination, including
what information the certified IDR entity
determined demonstrated that the offer
selected as the out-of-network rate is the
offer that best represents the value of the
qualified IDR item or service, including
the weight given to the qualifying pay-
ment amount and any additional credible
information under paragraphs (c)(4)(iii)
(B) through (D) of this section. If the
certified IDR entity relies on information
described under paragraphs (c)(4)(iii)(B)
through (D) of this section in selecting an
offer, the written decision must include
an explanation of why the certified IDR
entity concluded that this information was
not already reflected in the qualifying pay-
ment amount.
(vii) – (ix) For further guidance see
§ 54.9816-8T(c)(4)(vii) through (ix).
(d) – (e) For further guidance see
§ 54.9816-8T(d) through (e).
(f) For further guidance see § 54.9816-
8T(f) introductory text through (f)(1)(iv).
(1) [Reserved]
(i) – (iv) [Reserved]
(v) For further guidance see § 54.9816-
8T(f)(1)(v) introductory text through (f)
(1)(v)(E).
(A) – (E) [Reserved]
(F) The rationale for the certified IDR
entity’s decision, including the extent to
which the decision relied on the criteria
in paragraphs (c)(4)(iii)(B) through (D) of
this section.
(G) – (I) For further guidance see
§ 54.9816-8T(f)(1)(v)(G) through (I).
(vi) For further guidance see § 54.9816-
8T(f)(1)(vi).
(2) [Reserved]
(g) For further guidance see
§ 54.9816-8T(g).
(h) Applicability date. The provisions
of this section are applicable with respect
to plan years beginning on or after Janu-
ary 1, 2022, except that paragraphs (c)(4)
(ii) through (iv) of this section regarding
payment determinations, paragraph (c)(4)
(vi)(B) of this section regarding written
decisions, and paragraph (f)(1)(v)(F) of
this section regarding reporting of infor-
mation relating to the Federal IDR process
are applicable with respect to items or ser-
vices provided or furnished on or after
October 25, 2022, for plan years begin-
ning on or after January 1, 2022.
5. Section 54.9816-8T is amended by:
a. Removing paragraph (a)(2)(viii);
b. Redesignating paragraphs (a)(2)(ix)
through (xiii) as paragraphs (a)(2)(viii)
through (xii), respectively; and
c. Revising paragraphs (c)(4)(ii)(A),
(c)(4)(iii) and (iv), (c)(4)(vi)(B), (f)(1)(v)
(F), and (h).

September 12, 2022 226 Bulletin No. 2022–37
The revisions read as follows:
§ 54.9816-8T Independent dispute
resolution process (temporary).
* * * * *
(c) ***
(4) ***
(ii) ***
(A) For further guidance see § 54.9816-
8(c)(4)(ii)(A).
* * * * *
(iii) For further guidance see § 54.9816-
8(c)(4)(iii).
(iv) For further guidance see § 54.9816-
8(c)(4)(iv).
* * * * *
(vi) ***
(B) For further guidance see § 54.9816-
8(c)(4)(vi)(B).
* * * * *
(f) ***
(1) ***
(v) ***
(F) For further guidance see § 54.9816-
8(f)(1)(v)(F);
* * * * *
(h) Applicability date. The provisions
of this section are applicable with respect
to plan years beginning on or after January
1, 2022, except that the provisions regard-
ing IDR entity certification at paragraphs
(a) and (e) of this section are applicable
beginning on October 7, 2021; and para-
graphs (c)(4)(ii) through (iv) of this sec-
tion regarding payment determinations,
paragraph (c)(4)(vi)(B) of this section
regarding written decisions, and para-
graph (f)(1)(v)(F) of this section regard-
ing reporting of information relating to the
Federal IDR process are applicable with
respect to items or services provided or
furnished on or after October 25, 2022, for
plan years beginning on or after January
1, 2022.
6. Section 54.9817-2 is added to read
as follows:
§ 54.9817-2 Independent dispute
resolution process for air ambulance
services
(a) For further guidance see
§ 54.9817-2T(a).
(b) For further guidance see § 54.9817-
2T(b) introductory text.
(1) In general. Except as provided
in paragraphs (b)(2) and (3) of this sec-
tion and § 54.9817-2T(b)(2) and (4), in
determining the out-of-network rate to
be paid by group health plans and health
insurance issuers offering group health
insurance coverage for out-of-network
air ambulance services, plans and issu-
ers must comply with the requirements
of §§ 54.9816-8T and 54.9816-8, except
that references in §§ 54.9816-8T and
54.9816-8 to the additional circumstances
in § 54.9816-8(c)(4)(iii)(B) shall be
understood to refer to paragraph (b)(2) of
this section and § 54.9817-2T(b)(2).
(2) Considerations for air ambulance
services. In determining which offer to
select, in addition to considering the appli-
cable qualifying payment amount(s), the
certified IDR entity must consider infor-
mation submitted by a party that relates to
the following circumstances:
(i) – (vi) For further guidance see
§ 54.9817-2T(b)(2)(i) through (vi).
(3) Weighing considerations. In weigh-
ing the considerations described in para-
graph (b)(2) of this section and § 54.9817-
2T(b)(2), the certified IDR entity should
evaluate whether the information is cred-
ible and relates to the offer submitted by
either party for the payment amount for
the qualified IDR service that is the sub-
ject of the payment determination. The
certified IDR entity should not give weight
to information to the extent it is not credi-
ble, it does not relate to either party’s offer
for the payment amount for the qualified
IDR service, or it is already accounted for
by the qualifying payment amount under
§ 54.9816-8(c)(4)(iii)(A) or other credible
information under § 54.9816-8(c)(4)(iii)
(B) through (D), except that the additional
circumstances in § 54.9816-8(c)(4)(iii)(B)
shall be understood to refer to paragraph
(b)(2) of this section and § 54.9817-2T(b)
(2).
(4) For further guidance see § 54.9817-
2T(b)(4) introductory text through (b)(4)
(iii).
(i) – (iii) [Reserved]
(iv) For further guidance see § 54.9817-
2T(b)(4)(iv) introductory text through (b)
(4)(iv)(E).
(A) – (E) [Reserved]
(F) The rationale for the certified IDR
entity’s decision, including the extent to
which the decision relied on the criteria
in paragraph (b)(2) of this section and
§ 54.9816-8(c)(4)(iii)(C) and (D).
(G) – (I) For further guidance see
§ 54.9817-2T(b)(4)(iv)(G) through (I).
(c) Applicability date. The provisions
of this section are applicable with respect
to plan years beginning on or after Jan-
uary 1, 2022, except that paragraphs (b)
(1), (2), and (3) and (b)(4)(iv)(F) of this
section regarding payment determinations
are applicable with respect to services
provided or furnished on or after October
25, 2022, for plan years beginning on or
after January 1, 2022.
7. Section 54.9817-2T is amended by:
a. Revising paragraphs (b)(1) and (2);
b. Redesignating paragraph (b)(3) as
paragraph (b)(4);
c. Adding a new paragraph (b)(3); and
d. Revising newly redesignated para-
graph (b)(4)(iv)(F) and paragraph (c).
The revisions and addition read as
follows:
§ 54.9817-2T Independent dispute
resolution process for air ambulance
services (temporary).
* * * * *
(b) ***
(1) For further guidance see § 54.9817-
2(b)(1).
(2) For further guidance see § 54.9817-
2(b)(2).
(3) For further guidance see § 54.9817-
2(b)(3).
(4) ***
(iv) ***
(F) For further guidance see § 54.9817-
2(b)(4)(iv)(F);
* * * * *
(c) Applicability date. The provisions
of this section are applicable with respect
to plan years beginning on or after Jan-
uary 1, 2022, except that paragraphs (b)
(1), (2), and (3) and (b)(4)(iv)(F) of this
section regarding payment determinations
are applicable with respect to services
provided or furnished on or after October
25, 2022, for plan years beginning on or
after January 1, 2022.

Bulletin No. 2022–37 227 September 12, 2022
DEPARTMENT OF LABOR
Employee Benefits Security
Administration
29 CFR Chapter XXV
For the reasons set forth in the pre-
amble, the Department of Labor adopts
as final the interim rules adding 29 CFR
2590.716-6 published at 86 FR 36872
(July 13, 2021), and 2590.716-8, and
2590.717-2, and 86 FR 55980 (October 7,
2021), with the following:
PART 2590—RULES AND
REGULATIONS FOR GROUP
HEALTH PLANS
8. The authority citation for part 2590
continues to read as follows:
Authority: 29 U.S.C. 1027, 1059,
1135, 1161-1168, 1169, 1181-1183, 1181
note, 1185, 1185a-n, 1191, 1191a, 1191b,
and 1191c; sec. 101(g), Pub. L.104-191,
110 Stat. 1936; sec. 401(b), Pub. L. 105-
200, 112 Stat. 645 (42 U.S.C. 651 note);
sec. 512(d), Pub. L. 110-343, 122 Stat.
3881; sec. 1001, 1201, and 1562(e), Pub.
L. 111-148, 124 Stat. 119, as amended by
Pub. L. 111-152, 124 Stat. 1029; Division
M, Pub. L. 113-235, 128 Stat. 2130; Pub.
L. 116-260 134 Stat. 1182; Secretary of
Labor’s Order 1-2011, 77 FR 1088 (Jan.
9, 2012).
9. Section 2590.716-6 is amended by:
a. Adding paragraph (a)(18);
b. Redesignating paragraphs (d)(1)
(ii) through (iv) as paragraphs (d)(1)(iii)
through (v), respectively;
c. Adding a new paragraph (d)(1)(ii);
and
d. Revising paragraph (f).
The revisions and additions read as
follows:
§ 2590.716-6 Methodology for
calculating qualifying payment
amount.
(a) * * *
(18) Downcode means the alteration
by a plan or issuer of a service code to
another service code, or the alteration,
addition, or removal by a plan or issuer of
a modifier, if the changed code or modi-
fier is associated with a lower qualifying
payment amount than the service code or
modifier billed by the provider, facility, or
provider of air ambulance services.
* * * * *
(d) * * *
(1) * * *
(ii) If the qualifying payment amount
is based on a downcoded service code or
modifier–
(A) A statement that the service code
or modifier billed by the provider, facility,
or provider of air ambulance services was
downcoded;
(B) An explanation of why the claim
was downcoded, which must include a
description of which service codes were
altered, if any, and a description of which
modifiers were altered, added, or removed,
if any; and
(C) The amount that would have
been the qualifying payment amount had
the service code or modifier not been
downcoded;
* * * * *
(f) Applicability date. The provisions
of this section are applicable for plan
years beginning on or after January 1,
2022, except that paragraph (a)(18) of
this section regarding the definition of
the term “downcode” and paragraph (d)
(1)(ii) of this section regarding additional
information that must be provided if the
qualifying payment amount is based on a
downcoded service code or modifier are
applicable with respect to items or ser-
vices provided or furnished on or after
October 25, 2022, for plan years begin-
ning on or after January 1, 2022.
10. Section 2590.716-8 is amended by:
a. Removing paragraph (a)(2)(viii);
b. Redesignating paragraphs (a)(2)(ix)
through (xiii) as paragraphs (a)(2)(viii)
through (xii), respectively; and
c. Revising paragraphs (c)(4)(ii)(A),
(c)(4)(iii) and (iv), (c)(4)(vi)(B), (f)(1)(v)
(F), and (h).
The revisions read as follows:
§ 2590.716-8 Independent dispute
resolution process.
* * * * *
(c) * * *
(4) * * *
(ii) * * *
(A) Select as the out-of-network rate
for the qualified IDR item or service one
of the offers submitted under paragraph
(c)(4)(i) of this section, weighing only the
considerations specified in paragraph (c)
(4)(iii) of this section (as applied to the
information provided by the parties pursu-
ant to paragraph (c)(4)(i) of this section).
The certified IDR entity must select the
offer that the certified IDR entity deter-
mines best represents the value of the
qualified IDR item or service as the out-
of-network rate.
*****
(iii) Considerations in determination.
In determining which offer to select:
(A) The certified IDR entity must con-
sider the qualifying payment amount(s)
for the applicable year for the same or
similar item or service.
(B) The certified IDR entity must then
consider information submitted by a party
that relates to the following circumstances:
(1) The level of training, experience,
and quality and outcomes measurements
of the
provider or facility that furnished the
qualified IDR item or service (such as
those endorsed by
the consensus-based entity authorized
in section 1890 of the Social Security Act).
(2) The market share held by the pro-
vider or facility or that of the plan or issuer
in the
geographic region in which the quali-
fied IDR item or service was provided.
(3) The acuity of the participant or ben-
eficiary receiving the qualified IDR item
or
service, or the complexity of furnish-
ing the qualified IDR item or service to the
participant or
beneficiary.
(4) The teaching status, case mix, and
scope of services of the facility that fur-
nished the qualified IDR item or service,
if applicable.
(5) Demonstration of good faith efforts
(or lack thereof) made by the provider or
facility
or the plan or issuer to enter into net-
work agreements with each other, and, if
applicable,
contracted rates between the provider
or facility, as applicable, and the plan or
issuer, as

September 12, 2022 228 Bulletin No. 2022–37
applicable, during the previous 4 plan
years.
(C) The certified IDR entity must also
consider information provided by a party
in response to a request by the certified
IDR entity under paragraph (c)(4)(i)(A)(2)
of this section that relates to the offer for
the payment amount for the qualified IDR
item or service that is the subject of the
payment determination and that does not
include information on factors described
in paragraph (c)(4)(v) of this section.
(D) The certified IDR entity must also
consider additional information submit-
ted by a party that relates to the offer for
the payment amount for the qualified IDR
item or service that is the subject of the
payment determination and that does not
include information on factors described
in paragraph (c)(4)(v) of this section.
(E) In weighing the considerations
described in paragraphs (c)(4)(iii)(B)
through (D) of this section, the certified
IDR entity should evaluate whether the
information is credible and relates to the
offer submitted by either party for the pay-
ment amount for the qualified IDR item or
service that is the subject of the payment
determination. The certified IDR entity
should not give weight to information to
the extent it is not credible, it does not
relate to either party’s offer for the pay-
ment amount for the qualified IDR item
or service, or it is already accounted for
by the qualifying payment amount under
paragraph (c)(4)(iii)(A) of this section or
other credible information under para-
graphs (c)(4)(iii)(B) through (D) of this
section.
(iv) Examples. The rules of paragraph
(c)(4)(iii) of this section are illustrated
in the following paragraphs. Each exam-
ple assumes that the Federal IDR pro-
cess applies for purposes of determining
the out-of-network rate, that both parties
have submitted the information parties are
required to submit as part of the Federal
IDR process, and that the submitted infor-
mation does not include information on
factors described in paragraph (c)(4)(v) of
this section:
(A) Example 1 – (1) Facts. A level 1 trauma
center that is a nonparticipating emergency facility
and an issuer are parties to a payment determination
in the Federal IDR process. The facility submits
an offer that is higher than the qualifying payment
amount. The facility also submits additional writ-
ten information showing that the scope of services
available at the facility was critical to the delivery of
care for the qualified IDR item or service provided,
given the particular patient’s acuity. This informa-
tion is determined to be credible by the certified IDR
entity. Further, the facility submits additional infor-
mation showing the contracted rates used to calcu-
late the qualifying payment amount for the qualified
IDR item or service were based on a level of service
that is typical in cases in which the services are deliv-
ered by a facility that is not a level 1 trauma center
and that does not have the capability to provide the
scope of services provided by a level 1 trauma center.
This information is also determined to be credible by
the certified IDR entity. The issuer submits an offer
equal to the qualifying payment amount. No addi-
tional information is submitted by either party. The
certified IDR entity determines that all the informa-
tion submitted by the nonparticipating emergency
facility relates to the offer for the payment amount
for the qualified IDR item or service that is the sub-
ject of the payment determination.
(2) Conclusion. In this paragraph (c)(4)(iv)(A)
(Example 1), the certified IDR entity must consider
the qualifying payment amount. The certified IDR
entity then must consider the additional information
submitted by the nonparticipating emergency facil-
ity, provided the information relates to circumstances
described in paragraphs (c)(4)(iii)(B) through (D) of
this section and relates to the offer for the payment
amount for the qualified IDR item or service that
is the subject of the payment determination. If the
certified IDR entity determines that it is appropriate
to give weight to the additional credible information
submitted by the nonparticipating emergency facility
and that the additional credible information submit-
ted by the facility demonstrates that the facility’s
offer best represents the value of the qualified IDR
item or service, the certified IDR entity should select
the facility’s offer.
(B) Example 2 – (1) Facts. A nonparticipating
provider and an issuer are parties to a payment deter-
mination in the Federal IDR process. The provider
submits an offer that is higher than the qualifying
payment amount. The provider also submits addi-
tional written information regarding the level of
training and experience the provider possesses. This
information is determined to be credible by the cer-
tified IDR entity, but the certified IDR entity finds
that the information does not demonstrate that the
provider’s level of training and experience relates to
the offer for the payment amount for the qualified
IDR item or service that is the subject of the payment
determination (for example, the information does not
show that the provider’s level of training and experi-
ence was necessary for providing the qualified IDR
service that is the subject of the payment determina-
tion to the particular patient, or that the training or
experience made an impact on the care that was pro-
vided). The nonparticipating provider does not sub-
mit any additional information. The issuer submits
an offer equal to the qualifying payment amount,
with no additional information.
(2) Conclusion. In this paragraph (c)(4)(iv)(B)
(Example 2), the certified IDR entity must consider
the qualifying payment amount. The certified IDR
entity must then consider the additional information
submitted by the nonparticipating provider, provided
the information relates to circumstances described in
paragraphs (c)(4)(iii)(B) through (D) of this section
and relates to the offer for the payment amount for
the qualified IDR item or service that is the subject
of the payment determination. In addition, the certi-
fied IDR entity should not give weight to informa-
tion to the extent it is already accounted for by the
qualifying payment amount or other credible infor-
mation under paragraphs (c)(4)(iii)(B) through (D)
of this section. If the certified IDR entity determines
that the additional information submitted by the pro-
vider is credible but does not relate to the offer for
the payment amount for the qualified IDR service
that is the subject of the payment determination, and
determines that the issuer’s offer best represents the
value of the qualified IDR service, in the absence of
any other credible information that relates to either
party’s offer, the certified IDR entity should select
the issuer’s offer.
(C) Example 3 – (1) Facts. A nonparticipat-
ing provider and an issuer are parties to a payment
determination in the Federal IDR process involving
an emergency department visit for the evaluation
and management of a patient. The provider submits
an offer that is higher than the qualifying payment
amount. The provider also submits additional written
information showing that the acuity of the patient’s
condition and complexity of the qualified IDR ser-
vice furnished required the taking of a comprehen-
sive history, a comprehensive examination, and
medical decision making of high complexity. This
information is determined to be credible by the certi-
fied IDR entity. The issuer submits an offer equal to
the qualifying payment amount for CPT code 99285,
which is the CPT code for an emergency department
visit for the evaluation and management of a patient
requiring a comprehensive history, a comprehensive
examination, and medical decision making of high
complexity. The issuer also submits additional writ-
ten information showing that this CPT code accounts
for the acuity of the patient’s condition. This infor-
mation is determined to be credible by the certified
IDR entity. The certified IDR entity determines that
the information provided by the provider and issuer
relates to the offer for the payment amount for the
qualified IDR service that is the subject of the pay-
ment determination. Neither party submits any addi-
tional information.
(2) Conclusion. In this paragraph (c)(4)(iv)(C)
(Example 3), the certified IDR entity must consider
the qualifying payment amount. The certified IDR
entity then must consider the additional informa-
tion submitted by the parties, but the certified IDR
entity should not give weight to information to the
extent it is already accounted for by the qualifying
payment amount or other credible information under
paragraphs (c)(4)(iii)(B) through (D) of this section.
If the certified IDR entity determines the additional
information on the acuity of the patient and com-
plexity of the service is already accounted for in the
calculation of the qualifying payment amount, the
certified IDR entity should not give weight to the
additional information provided by the provider. If
the certified IDR entity determines that the issuer’s
offer best represents the value of the qualified IDR
service, the certified IDR entity should select the
issuer’s offer.
(D) Example 4 — (1) Facts. A nonparticipating
emergency facility and an issuer are parties to a

Bulletin No. 2022–37 229 September 12, 2022
payment determination in the Federal IDR process.
Although the facility is not participating in the issu-
er’s network during the relevant plan year, it was a
participating facility in the issuer’s network in the
previous 4 plan years. The issuer submits an offer
that is higher than the qualifying payment amount
and that is equal to the facility’s contracted rate
(adjusted for inflation) for the previous year with
the issuer for the qualified IDR service. The issuer
also submits additional written information showing
that the contracted rates between the facility and the
issuer during the previous 4 plan years were higher
than the qualifying payment amount submitted by the
issuer, and that these prior contracted rates account
for the case mix and scope of services typically fur-
nished at the nonparticipating facility. The certified
IDR entity determines this information is credible
and that it relates to the offer submitted by the issuer
for the payment amount for the qualified IDR service
that is the subject of the payment determination. The
facility submits an offer that is higher than both the
qualifying payment amount and the contracted rate
(adjusted for inflation) for the previous year with
the issuer for the qualified IDR service. The facility
also submits additional written information, with the
intent to show that the case mix and scope of services
available at the facility were integral to the service
provided. The certified IDR entity determines this
information is credible and that it relates to the offer
submitted by the facility for the payment amount for
the qualified IDR service that is the subject of the
payment determination. Neither party submits any
additional information.
(2) Conclusion. In this paragraph (c)(4)(iv)(D)
(Example 4), the certified IDR entity must consider
the qualifying payment amount. The certified IDR
entity then must consider the additional information
submitted by the parties, but should not give weight
to information to the extent it is already accounted
for by the qualifying payment amount or other cred-
ible information under paragraphs (c)(4)(iii)(B)
through (D) of this section. If the certified IDR entity
determines that the information submitted by the
facility regarding the case mix and scope of services
available at the facility includes information that is
also accounted for in the information the issuer sub-
mitted regarding prior contracted rates, then the cer-
tified IDR entity should give weight to that informa-
tion only once. The certified IDR entity also should
not give weight to the same information provided by
the nonparticipating emergency facility in relation
to any other factor. If the certified IDR entity deter-
mines that the issuer’s offer best represents the value
of the qualified IDR service, the certified IDR entity
should select the issuer’s offer.
(E) Example 5 — (1) Facts. A nonparticipat-
ing provider and an issuer are parties to a payment
determination in the Federal IDR process regarding
a qualified IDR service for which the issuer down-
coded the service code that the provider billed.
The issuer submits an offer equal to the qualifying
payment amount (which was calculated using the
downcoded service code). The issuer also submits
additional written information that includes the
documentation disclosed to the nonparticipating
provider under § 2590.716-6(d)(1)(ii) at the time
of the initial payment (which describes why the
service code was downcoded). The certified IDR
entity determines this information is credible and
that it relates to the offer for the payment amount
for the qualified IDR service that is the subject of
the payment determination. The provider submits an
offer equal to the amount that would have been the
qualifying payment amount had the service code not
been downcoded. The provider also submits addi-
tional written information that includes the docu-
mentation disclosed to the nonparticipating provider
under § 2590.716-6(d)(1)(ii) at the time of the initial
payment. Further, the provider submits additional
written information that explains why the billed ser-
vice code was more appropriate than the downcoded
service code, as evidence that the provider’s offer,
which is equal to the amount the qualifying payment
amount would have been for the service code that
the provider billed, best represents the value of the
service furnished, given its complexity. The certified
IDR entity determines this information to be credible
and that it relates to the offer for the payment amount
for the qualified IDR service that is the subject of the
payment determination. Neither party submits any
additional information.
(2) Conclusion. In this paragraph (c)(4)(iv)(E)
(Example 5), the certified IDR entity must consider
the qualifying payment amount, which is based
on the downcoded service code. The certified IDR
entity then must consider whether to give weight
to additional information submitted by the parties.
If the certified IDR entity determines that the addi-
tional credible information submitted by the pro-
vider demonstrates that the nonparticipating provid-
er’s offer, which is equal to the qualifying payment
amount for the service code that the provider billed,
best represents the value of the qualified IDR ser-
vice, the certified IDR entity should select the non-
participating provider’s offer.
* * * * *
(vi) * * *
(B) The certified IDR entity’s writ-
ten decision must include an explana-
tion of their determination, including
what information the certified IDR entity
determined demonstrated that the offer
selected as the out-of-network rate is the
offer that best represents the value of the
qualified IDR item or service, including
the weight given to the qualifying pay-
ment amount and any additional credi-
ble information under paragraphs (c)(4)
(iii)(B) through (D) of this section. If the
certified IDR entity relies on information
described under paragraphs (c)(4)(iii)(B)
through (D) of this section in selecting an
offer, the written decision must include
an explanation of why the certified IDR
entity concluded that this information was
not already reflected in the qualifying pay-
ment amount.
* * * * *
(f) * * *
(1) * * *
(v) * * *
(F) The rationale for the certified IDR
entity’s decision, including the extent to
which the decision relied on the criteria
in paragraphs (c)(4)(iii)(B) through (D) of
this section;
* * * * *
(h) Applicability date. The provisions
of this section are applicable with respect
to plan years beginning on or after January
1, 2022, except that the provisions regard-
ing IDR entity certification at paragraphs
(a) and (e) of this section are applicable
beginning on October 7, 2021; and para-
graphs (c)(4)(ii) through (iv) of this sec-
tion regarding payment determinations,
paragraph (c)(4)(vi)(B) of this section
regarding written decisions, and para-
graph (f)(1)(v)(F) of this section regard-
ing reporting of information relating to the
Federal IDR process are applicable with
respect to items or services provided or
furnished on or after October 25, 2022, for
plan years beginning on or after January
1, 2022.
11. Section 2590.717-2 is amended by:
a. Revising paragraphs (b)(1) and (b)
(2) introductory text;
b. Redesignating paragraph (b)(3) as
paragraph (b)(4);
c. Adding a new paragraph (b)(3); and
d. Revising newly redesignated para-
graph (b)(4)(iv)(F) and paragraph (c).
The addition and revisions read as
follows:
§ 2590.717-2 Independent dispute
resolution process for air ambulance
services.
* * * * *
(b) * * *
(1) In general. Except as provided in
paragraphs (b)(2) and (3) of this section,
in determining the out-of-network rate to
be paid by group health plans and health
insurance issuers offering group health
insurance coverage for out-of-network
air ambulance services, plans and issu-
ers must comply with the requirements
of § 2590.716-8, except that references
in § 2590.716-8 to the additional circum-
stances in § 2590.716-8(c)(4)(iii)(B) shall
be understood to refer to paragraph (b)(2)
of this section.
(2) Considerations for air ambulance
services. In determining which offer
to select, in addition to considering the

September 12, 2022 230 Bulletin No. 2022–37
applicable qualifying payment amount(s),
the certified IDR entity must consider
information submitted by a party that
relates to the following circumstances:
* * * * *
(3) Weighing considerations. In weigh-
ing the considerations described in para-
graph (b)(2) of this section, the certified
IDR entity should evaluate whether the
information is credible and relates to the
offer submitted by either party for the pay-
ment amount for the qualified IDR service
that is the subject of the payment determi-
nation. The certified IDR entity should not
give weight to information to the extent it
is not credible, it does not relate to either
party’s offer for the payment amount for
the qualified IDR service, or it is already
accounted for by the qualifying payment
amount under § 2590.716-8(c)(4)(iii)
(A) or other credible information under
§ 2590.716-8(c)(4)(iii)(B) through (D),
except that the additional circumstances in
§ 2590.716-8(c)(4)(iii)(B) shall be under-
stood to refer to paragraph (b)(2) of this
section.
(4) * * *
(iv) * * *
(F) The rationale for the certified IDR
entity’s decision, including the extent to
which the decision relied on the criteria
in paragraph (b)(2) of this section and
§ 2590.716-8(c)(4)(iii)(C) and (D);
* * * * *
(c) Applicability date. The provisions
of this section are applicable with respect
to plan years beginning on or after Jan-
uary 1, 2022, except that paragraphs (b)
(1), (2), and (3) and (b)(4)(iv)(F) of this
section regarding payment determinations
are applicable with respect to services
provided or furnished on or after October
25, 2022, for plan years beginning on or
after January 1, 2022.
DEPARTMENT OF HEALTH
AND HUMAN SERVICES
45 CFR Subtitle A,
Subchapter B
For the reasons set forth in the pream-
ble, the Department of Health and Human
Services adopts as final the interim rules
adding 45 CFR 149.140 published at 86
FR 36872 (July 13, 2021) and 149.510,
and 149.520, published at 86 FR 55980
(October 7, 2021), with the following
changes to 45 CFR part 149 as set forth
below:
PART 149 – SURPRISE BILLING
AND TRANSPARENCY
REQUIREMENTS
12. The authority citation for part 149
continues to read as follows:
Authority: 42 U.S.C. 300gg-92
and 300gg-111 through 300gg-139, as
amended.
13. Section 149.140 is amended by:
a. Adding paragraph (a)(18);
b. Redesignating paragraphs (d)(1)
(ii) through (iv) as paragraphs (d)(1)(iii)
through (v), respectively;
c. Adding a new paragraph (d)(1)(ii);
and
d. Revising paragraph (g).
The revisions and additions read as
follows:
§ 149.140 Methodology for calculating
qualifying payment amount.
(a) * * *
(18) Downcode means the alteration
by a plan or issuer of a service code to
another service code, or the alteration,
addition, or removal by a plan or issuer of
a modifier, if the changed code or modi-
fier is associated with a lower qualifying
payment amount than the service code or
modifier billed by the provider, facility, or
provider of air ambulance services.
* * * * *
(d) * * *
(1) * * *
(ii) If the qualifying payment amount
is based on a downcoded service code or
modifier–
(A) A statement that the service code
or modifier billed by the provider, facility,
or provider of air ambulance services was
downcoded;
(B) An explanation of why the claim
was downcoded, which must include a
description of which service codes were
altered, if any, and a description of which
modifiers were altered, added, or removed,
if any; and
(C) The amount that would have
been the qualifying payment amount had
the service code or modifier not been
downcoded;
* * * * *
(g) Applicability date. The provisions
of this section are applicable for plan
years or in the individual market, pol-
icy years beginning on or after January
1, 2022, except that paragraph (a)(18) of
this section regarding the definition of
the term “downcode” and paragraph (d)
(1)(ii) of this section regarding additional
information that must be provided if the
qualifying payment amount is based on a
downcoded service code or modifier are
applicable with respect to items or ser-
vices provided or furnished on or after
October 25, 2022, for plan years or in the
individual market, policy years beginning
on or after January 1, 2022.
14. Section 149.510 is amended by:
a. Removing paragraph (a)(2)(viii);
b. Redesignating paragraphs (a)(2)(ix)
through (xiii) as paragraphs (a)(2)(viii)
through (xii), respectively; and
c. Revising paragraphs (c)(4)(ii)(A),
(c)(4)(iii) and (iv), (c)(4)(vi)(B), (f)(1)(v)
(F), and (h).
The revisions read as follows:
§ 149.510 Independent dispute
resolution process.
* * * * *
(c) * * *
(4) * * *
(ii) * * *
(A) Select as the out-of-network rate
for the qualified IDR item or service one
of the offers submitted under paragraph
(c)(4)(i) of this section, weighing only the
considerations specified in paragraph (c)
(4)(iii) of this section (as applied to the
information provided by the parties pursu-
ant to paragraph (c)(4)(i) of this section).
The certified IDR entity must select the
offer that the certified IDR entity deter-
mines best represents the value of the
qualified IDR item or service as the out-
of-network rate.
*****
(iii) Considerations in determination.
In determining which offer to select:
(A) The certified IDR entity must con-
sider the qualifying payment amount(s)
for the applicable year for the same or
similar item or service.

Bulletin No. 2022–37 231 September 12, 2022
(B) The certified IDR entity must then
consider information submitted by a party
that relates to the following circumstances:
(1) The level of training, experience,
and quality and outcomes measurements
of the provider or facility that furnished
the qualified IDR item or service (such
as those endorsed by the consensus-based
entity authorized in section 1890 of the
Social Security Act).
(2) The market share held by the pro-
vider or facility or that of the plan or issuer
in the geographic region in which the qual-
ified IDR item or service was provided.
(3) The acuity of the participant, bene-
ficiary, or enrollee receiving the qualified
IDR item or service, or the complexity
of furnishing the qualified IDR item or
service to the participant, beneficiary, or
enrollee.
(4) The teaching status, case mix, and
scope of services of the facility that fur-
nished the qualified IDR item or service,
if applicable.
(5) Demonstration of good faith efforts
(or lack thereof) made by the provider or
facility or the plan or issuer to enter into
network agreements with each other, and,
if applicable, contracted rates between the
provider or facility, as applicable, and the
plan or issuer, as applicable, during the
previous 4 plan years.
(C) The certified IDR entity must also
consider information provided by a party
in response to a request by the certified
IDR entity under paragraph (c)(4)(i)(A)(2)
of this section that relates to the offer for
the payment amount for the qualified IDR
item or service that is the subject of the
payment determination and that does not
include information on factors described
in paragraph (c)(4)(v) of this section.
(D) The certified IDR entity must also
consider additional information submit-
ted by a party that relates to the offer for
the payment amount for the qualified IDR
item or service that is the subject of the
payment determination and that does not
include information on factors described
in paragraph (c)(4)(v) of this section.
(E) In weighing the considerations
described in paragraphs (c)(4)(iii)(B)
through (D) of this section, the certified
IDR entity should evaluate whether the
information is credible and relates to the
offer submitted by either party for the pay-
ment amount for the qualified IDR item or
service that is the subject of the payment
determination. The certified IDR entity
should not give weight to information to
the extent it is not credible, it does not
relate to either party’s offer for the pay-
ment amount for the qualified IDR item
or service, or it is already accounted for
by the qualifying payment amount under
paragraph (c)(4)(iii)(A) of this section or
other credible information under para-
graphs (c)(4)(iii)(B) through (D) of this
section.
(iv) Examples. The rules of paragraph
(c)(4)(iii) of this section are illustrated
in the following paragraphs. Each exam-
ple assumes that the Federal IDR pro-
cess applies for purposes of determining
the out-of-network rate, that both parties
have submitted the information parties are
required to submit as part of the Federal
IDR process, and that the submitted infor-
mation does not include information on
factors described in paragraph (c)(4)(v) of
this section:
(A) Example 1 – (1) Facts. A level 1 trauma
center that is a nonparticipating emergency facility
and an issuer are parties to a payment determination
in the Federal IDR process. The facility submits
an offer that is higher than the qualifying payment
amount. The facility also submits additional written
information showing that the scope of services avail-
able at the facility was critical to the delivery of care
for the qualified IDR item or service provided, given
the particular patient’s acuity. This information is
determined to be credible by the certified IDR entity.
Further, the facility submits additional information
showing the contracted rates used to calculate the
qualifying payment amount for the qualified IDR
item or service were based on a level of service that
is typical in cases in which the services are deliv-
ered by a facility that is not a level 1 trauma center
and that does not have the capability to provide the
scope of services provided by a level 1 trauma center.
This information is also determined to be credible by
the certified IDR entity. The issuer submits an offer
equal to the qualifying payment amount. No addi-
tional information is submitted by either party. The
certified IDR entity determines that all the informa-
tion submitted by the nonparticipating emergency
facility relates to the offer for the payment amount
for the qualified IDR item or service that is the sub-
ject of the payment determination.
(2) Conclusion. In this paragraph (c)(4)(iv)(A)
(Example 1), the certified IDR entity must consider
the qualifying payment amount. The certified IDR
entity then must consider the additional information
submitted by the nonparticipating emergency facil-
ity, provided the information relates to circumstances
described in paragraphs (c)(4)(iii)(B) through (D) of
this section and relates to the offer for the payment
amount for the qualified IDR item or service that
is the subject of the payment determination. If the
certified IDR entity determines that it is appropriate
to give weight to the additional credible information
submitted by the nonparticipating emergency facility
and that the additional credible information submit-
ted by the facility demonstrates that the facility’s
offer best represents the value of the qualified IDR
item or service, the certified IDR entity should select
the facility’s offer.
(B) Example 2 – (1) Facts. A nonparticipating
provider and an issuer are parties to a payment deter-
mination in the Federal IDR process. The provider
submits an offer that is higher than the qualifying
payment amount. The provider also submits addi-
tional written information regarding the level of
training and experience the provider possesses. This
information is determined to be credible by the cer-
tified IDR entity, but the certified IDR entity finds
that the information does not demonstrate that the
provider’s level of training and experience relates to
the offer for the payment amount for the qualified
IDR item or service that is the subject of the payment
determination (for example, the information does not
show that the provider’s level of training and experi-
ence was necessary for providing the qualified IDR
service that is the subject of the payment determina-
tion to the particular patient, or that the training or
experience made an impact on the care that was pro-
vided). The nonparticipating provider does not sub-
mit any additional information. The issuer submits
an offer equal to the qualifying payment amount,
with no additional information.
(2) Conclusion. In this paragraph (c)(4)(iv)(B)
(Example 2), the certified IDR entity must consider
the qualifying payment amount. The certified IDR
entity must then consider the additional information
submitted by the nonparticipating provider, provided
the information relates to circumstances described in
paragraphs (c)(4)(iii)(B) through (D) of this section
and relates to the offer for the payment amount for
the qualified IDR item or service that is the subject
of the payment determination. In addition, the certi-
fied IDR entity should not give weight to informa-
tion to the extent it is already accounted for by the
qualifying payment amount or other credible infor-
mation under paragraphs (c)(4)(iii)(B) through (D)
of this section. If the certified IDR entity determines
that the additional information submitted by the pro-
vider is credible but does not relate to the offer for
the payment amount for the qualified IDR service
that is the subject of the payment determination, and
determines that the issuer’s offer best represents the
value of the qualified IDR service, in the absence of
any other credible information that relates to either
party’s offer, the certified IDR entity should select
the issuer’s offer.
(C) Example 3 – (1) Facts. A nonparticipat-
ing provider and an issuer are parties to a payment
determination in the Federal IDR process involving
an emergency department visit for the evaluation
and management of a patient. The provider submits
an offer that is higher than the qualifying payment
amount. The provider also submits additional written
information showing that the acuity of the patient’s
condition and complexity of the qualified IDR ser-
vice furnished required the taking of a comprehen-
sive history, a comprehensive examination, and
medical decision making of high complexity. This
information is determined to be credible by the certi-
fied IDR entity. The issuer submits an offer equal to
the qualifying payment amount for CPT code 99285,

September 12, 2022 232 Bulletin No. 2022–37
which is the CPT code for an emergency department
visit for the evaluation and management of a patient
requiring a comprehensive history, a comprehensive
examination, and medical decision making of high
complexity. The issuer also submits additional writ-
ten information showing that this CPT code accounts
for the acuity of the patient’s condition. This infor-
mation is determined to be credible by the certified
IDR entity. The certified IDR entity determines that
the information provided by the provider and issuer
relates to the offer for the payment amount for the
qualified IDR service that is the subject of the pay-
ment determination. Neither party submits any addi-
tional information.
(2) Conclusion. In this paragraph (c)(4)(iv)(C)
(Example 3), the certified IDR entity must consider
the qualifying payment amount. The certified IDR
entity then must consider the additional informa-
tion submitted by the parties, but the certified IDR
entity should not give weight to information to the
extent it is already accounted for by the qualifying
payment amount or other credible information under
paragraphs (c)(4)(iii)(B) through (D) of this section.
If the certified IDR entity determines the additional
information on the acuity of the patient and com-
plexity of the service is already accounted for in the
calculation of the qualifying payment amount, the
certified IDR entity should not give weight to the
additional information provided by the provider. If
the certified IDR entity determines that the issuer’s
offer best represents the value of the qualified IDR
service, the certified IDR entity should select the
issuer’s offer.
(D) Example 4 — (1) Facts. A nonparticipating
emergency facility and an issuer are parties to a
payment determination in the Federal IDR process.
Although the facility is not participating in the issu-
er’s network during the relevant plan year, it was a
participating facility in the issuer’s network in the
previous 4 plan years. The issuer submits an offer
that is higher than the qualifying payment amount
and that is equal to the facility’s contracted rate
(adjusted for inflation) for the previous year with
the issuer for the qualified IDR service. The issuer
also submits additional written information showing
that the contracted rates between the facility and the
issuer during the previous 4 plan years were higher
than the qualifying payment amount submitted by the
issuer, and that these prior contracted rates account
for the case mix and scope of services typically fur-
nished at the nonparticipating facility. The certified
IDR entity determines this information is credible
and that it relates to the offer submitted by the issuer
for the payment amount for the qualified IDR service
that is the subject of the payment determination. The
facility submits an offer that is higher than both the
qualifying payment amount and the contracted rate
(adjusted for inflation) for the previous year with
the issuer for the qualified IDR service. The facility
also submits additional written information, with the
intent to show that the case mix and scope of services
available at the facility were integral to the service
provided. The certified IDR entity determines this
information is credible and that it relates to the offer
submitted by the facility for the payment amount for
the qualified IDR service that is the subject of the
payment determination. Neither party submits any
additional information.
(2) Conclusion. In this paragraph (c)(4)(iv)(D)
(Example 4), the certified IDR entity must consider
the qualifying payment amount. The certified IDR
entity then must consider the additional information
submitted by the parties, but should not give weight
to information to the extent it is already accounted
for by the qualifying payment amount or other cred-
ible information under paragraphs (c)(4)(iii)(B)
through (D) of this section. If the certified IDR entity
determines that the information submitted by the
facility regarding the case mix and scope of services
available at the facility includes information that is
also accounted for in the information the issuer sub-
mitted regarding prior contracted rates, then the cer-
tified IDR entity should give weight to that informa-
tion only once. The certified IDR entity also should
not give weight to the same information provided by
the nonparticipating emergency facility in relation
to any other factor. If the certified IDR entity deter-
mines that the issuer’s offer best represents the value
of the qualified IDR service, the certified IDR entity
should select the issuer’s offer.
(E) Example 5 — (1) Facts. A nonparticipat-
ing provider and an issuer are parties to a payment
determination in the Federal IDR process regarding
a qualified IDR service for which the issuer down-
coded the service code that the provider billed.
The issuer submits an offer equal to the qualifying
payment amount (which was calculated using the
downcoded service code). The issuer also submits
additional written information that includes the
documentation disclosed to the nonparticipating
provider under § 149.140(d)(1)(ii) at the time of
the initial payment (which describes why the ser-
vice code was downcoded). The certified IDR entity
determines this information is credible and that it
relates to the offer for the payment amount for the
qualified IDR service that is the subject of the pay-
ment determination. The provider submits an offer
equal to the amount that would have been the quali-
fying payment amount had the service code not been
downcoded. The provider also submits additional
written information that includes the documenta-
tion disclosed to the nonparticipating provider under
§ 149.140(d)(1)(ii) at the time of the initial payment.
Further, the provider submits additional written
information that explains why the billed service code
was more appropriate than the downcoded service
code, as evidence that the provider’s offer, which is
equal to the amount the qualifying payment amount
would have been for the service code that the pro-
vider billed, best represents the value of the service
furnished, given its complexity. The certified IDR
entity determines this information to be credible and
that it relates to the offer for the payment amount for
the qualified IDR service that is the subject of the
payment determination. Neither party submits any
additional information.
(2) Conclusion. In this paragraph (c)(4)(iv)(E)
(Example 5), the certified IDR entity must consider
the qualifying payment amount, which is based
on the downcoded service code. The certified IDR
entity then must consider whether to give weight
to additional information submitted by the parties.
If the certified IDR entity determines that the addi-
tional credible information submitted by the pro-
vider demonstrates that the nonparticipating provid-
er’s offer, which is equal to the qualifying payment
amount for the service code that the provider billed,
best represents the value of the qualified IDR ser-
vice, the certified IDR entity should select the non-
participating provider’s offer.
* * * * *
(vi) * * *
(B) The certified IDR entity’s writ-
ten decision must include an explana-
tion of their determination, including
what information the certified IDR entity
determined demonstrated that the offer
selected as the out-of-network rate is the
offer that best represents the value of the
qualified IDR item or service, including
the weight given to the qualifying pay-
ment amount and any additional credi-
ble information under paragraphs (c)(4)
(iii)(B) through (D) of this section. If the
certified IDR entity relies on information
described under paragraphs (c)(4)(iii)(B)
through (D) of this section in selecting an
offer, the written decision must include
an explanation of why the certified IDR
entity concluded that this information was
not already reflected in the qualifying pay-
ment amount.
* * * * *
(f) * * *
(1) * * *
(v) * * *
(F) The rationale for the certified IDR
entity’s decision, including the extent to
which the decision relied on the criteria
in paragraphs (c)(4)(iii)(B) through (D) of
this section;
* * * * *
(h) Applicability date. The provisions
of this section are applicable with respect
to plan years or in the individual market
policy years beginning on or after January
1, 2022, except that the provisions regard-
ing IDR entity certification at paragraphs
(a) and (e) of this section are applicable
beginning on October 7, 2021; and para-
graphs (c)(4)(ii) through (iv) of this sec-
tion regarding payment determinations,
paragraph (c)(4)(vi)(B) of this section
regarding written decisions, and para-
graph (f)(1)(v)(F) of this section regard-
ing reporting of information relating to the
Federal IDR process are applicable with
respect to items or services provided or
furnished on or after October 25, 2022,
for plan years or in the individual market
policy years beginning on or after January
1, 2022.
15. Section 149.520 is amended by:

Bulletin No. 2022–37 233 September 12, 2022
a. Revising paragraphs (b)(1) and (b)
(2) introductory text;
b. Redesignating paragraph (b)(3) as
paragraph (b)(4);
c. Adding a new paragraph (b)(3); and
d. Revising newly redesignated para-
graph (b)(4)(iv)(F) and paragraph (c).
The addition and revisions read as
follows:
§ 149.520 Independent dispute
resolution process for air ambulance
services.
* * * * *
(b) * * *
(1) In general. Except as provided in
paragraphs (b)(2) and (3) of this section,
in determining the out-of-network rate to
be paid by group health plans and health
insurance issuers offering group or indi-
vidual health insurance coverage for out-
of-network air ambulance services, plans
and issuers must comply with the require-
ments of § 149.510, except that references
in § 149.510 to the additional circum-
stances in § 149.510(c)(4)(iii)(B) shall be
understood to refer to paragraph (b)(2) of
this section.
(2) Considerations for air ambulance
services. In determining which offer to
select, in addition to considering the appli-
cable qualifying payment amount(s), the
certified IDR entity must consider infor-
mation submitted by a party that relates to
the following circumstances:
* * * * *
(3) Weighing considerations. In weigh-
ing the considerations described in para-
graph (b)(2) of this section, the certified
IDR entity should evaluate whether the
information is credible and relates to the
offer submitted by either party for the pay-
ment amount for the qualified IDR service
that is the subject of the payment deter-
mination. The certified IDR entity should
not give weight to information to the
extent it is not credible, it does not relate
to either party’s offer for the payment
amount for the qualified IDR service, or
it is already accounted for by the qualify-
ing payment amount under § 149.510(c)
(4)(iii)(A) or other credible information
under § 149.510(c)(4)(iii)(B) through (D),
except that the additional circumstances
in § 149.510(c)(4)(iii)(B) shall be under-
stood to refer to paragraph (b)(2) of this
section.
(4) * * *
(iv) * * *
(F) The rationale for the certified IDR
entity’s decision, including the extent to
which the decision relied on the criteria
in paragraph (b)(2) of this section and
§ 149.510(c)(4)(iii)(C) and (D);
* * * * *
(c) Applicability date. The provisions
of this section are applicable with respect
to plan years, or in the individual market,
policy years, beginning on or after Jan-
uary 1, 2022, except that paragraphs (b)
(1), (2), and (3) and (b)(4)(iv)(F) of this
section regarding payment determinations
are applicable with respect to services
provided or furnished on or after October
25, 2022, for plan years or in the individ-
ual market policy years beginning on or
after January 1, 2022.
(Filed by the Office of the Federal Register on August
24, 2022, 11:15 a.m. and published in the issue of the
Federal Register for August 26, 2022, 87 FR 52618)

September 12, 2022 234 Bulletin No. 2022–37
Part III
Extension of the Phase-in
Period for the Enforcement
and Administration of
Section 871(m)
Notice 2022-37
I. PURPOSE
This Notice provides taxpayers with
additional guidance for complying with
the final regulations with respect to div-
idend equivalents under sections 871(m),
1441, 1461, and 1473 of the Internal
Revenue Code (the Code) (collectively
referred to as the section 871(m) regula-
tions) in 2023,
1
2024, and 2025. Specifi-
cally, this Notice extends the transition
relief provided in Notice 2020-2, 2020-3
I.R.B. 327, for two years, as described in
more detail below. The Department of the
Treasury (Treasury Department) and the
Internal Revenue Service (IRS) intend to
amend the section 871(m) regulations to
delay the effective/applicability date of
certain rules in those final regulations.
The anti-abuse rule provided in §1.871-
15(o) will continue to apply during the
phase-in years described in this Notice.
As a result, a transaction that would not
otherwise be treated as a section 871(m)
transaction (including as a result of this
Notice) may be a section 871(m) transac-
tion under §1.871-15(o).
2

II. BACKGROUND
On June 14, 2010, the Treasury
Department and the IRS published Notice
2010-46, which addresses potential over-
withholding in the context of securities
lending and sale-repurchase agreements.
Notice 2010-46 provides a two-part solu-
tion to the problem of overwithholding
on a chain of dividends and dividend
equivalents. First, it provides an excep-
tion from withholding for payments to
a qualified securities lender (QSL). Sec-
ond, it provides a proposed framework
to credit forward prior withholding on a
chain of substitute dividends paid pursu-
ant to a chain of securities loans or stock
repurchase agreements. The QSL regime
requires a person that agrees to act as a
QSL to comply with certain withholding
and documentation requirements. The
Treasury Department and the IRS permit-
ted withholding agents to rely on transi-
tion rules described in Notice 2010-46,
Part III, until guidance was developed that
would include documentation and sub-
stantiation of withholding.
On September 18, 2015, the Federal
Register published final regulations and
temporary regulations (TD 9734, 80 FR
56866) (2015 final regulations and 2015
temporary regulations, respectively). The
2015 final regulations finalized a portion
of a 2013 notice of proposed rulemak-
ing (78 FR 73128). The 2015 temporary
regulations were based on comments
received with respect to the 2013 notice
of proposed rulemaking and were accom-
panied by a notice of proposed rulemak-
ing cross-referencing the 2015 temporary
regulations (80 FR 56415). The Treasury
Department and the IRS stated in the pre-
amble to the 2015 temporary regulations
that the final qualified derivatives dealer
(“QDD”) regulations would supplant the
proposed regulatory framework described
in Notice 2010-46. 80 FR at 56878.
On July 18, 2016, the Treasury Depart-
ment and the IRS published Notice 2016-
42, 2016-29 I.R.B. 67, which contained
the proposed qualified intermediary agree-
ment (QI Agreement) that included provi-
sions relating to the QDD regime and reit-
erated the intent to replace the proposed
regulatory framework described in Notice
2010-46 with the QDD regime.
On December 19, 2016, the Treasury
Department and the IRS published Notice
2016-76, which provided for the phased-in
application of certain provisions of the
section 871(m) regulations to allow for
the orderly implementation of those final
regulations and announced that taxpayers
may continue to rely on Notice 2010-46
until January 1, 2018.
On January 17, 2017, the Treasury
Department and the IRS published Rev-
enue Procedure 2017-15, 2017-3 I.R.B.
437, which sets forth the final QI Agree-
ment (2017 QI Agreement), including the
requirements and obligations applicable to
QDDs, and provided that taxpayers may
continue to rely on Notice 2010-46 during
2017.
On January 24, 2017, the Federal
Register published final regulations and
temporary regulations (TD 9815, 82 FR
8144) (2017 final regulations and 2017
temporary regulations, respectively, and
together, the 2017 regulations). The 2017
final regulations finalized the 2015 notice
of proposed rulemaking (80 FR 56415)
that was issued in conjunction with the
2015 temporary regulations. On the same
day, the Federal Register also pub-
lished a notice of proposed rulemaking
cross-referencing the 2017 temporary
regulations (82 FR 8172), with correct-
ing amendments published in the Fed-
eral Register on October 26, 2017 (82
FR 49508) (together, the 2017 proposed
regulations).
The effective/applicability dates in
the 2017 regulations reflect the phased-in
application described in Notice 2016-
76. See Treas. Reg. §1.871-15(r). Also,
consistent with Notice 2016-76 and
other announcements, the “Effect on
Other Documents” section of the pre-
amble to the 2017 regulations obsoleted
Notice 2010-46 as of January 1, 2018. In
response to a comment requesting that the
QSL regime remain, the preamble to the
2017 regulations noted that “[w]hile the
Treasury Department and the IRS under-
stand that the QSL regime was administra-
tively more convenient for taxpayers than
the QI regime, it created administrability
problems, particularly with respect to ver-
ification, for the IRS. That regime is being
replaced by incorporating the QDD rules
into the existing QI framework, including
the specific rules for pooled reporting on
Form 1042-S, and the QI requirements for
compliance review and certification.” 82
FR at 8153.
1
Unless otherwise provided, all references to years refer to calendar years.
2
The terms used in this Notice have the meanings provided in the section 871(m) regulations.

Bulletin No. 2022–37 235 September 12, 2022
On August 21, 2017, the Treasury
Department and the IRS published Notice
2017-42, 2017-34 I.R.B. 212, which
extended certain transition relief.
On February 5, 2018, the Treasury
Department and the IRS published Notice
2018-5, 2018-6 I.R.B. 341, which permit-
ted withholding agents to apply the tran-
sition rules from Notice 2010-46 in 2018
and 2019.
On October 1, 2018, the Treasury
Department and the IRS published Notice
2018-72, 2018-40 I.R.B. 522, which fur-
ther extended certain transition relief and
permitted withholding agents to apply the
transition rules from Notice 2010-46 in
2020.
On December 17, 2019, the Federal
Register published final regulations (TD
9887, 84 FR 68790), which finalized the
2017 proposed regulations.
On January 13, 2020, the Treasury
Department and the IRS published
Notice 2020-2, 2020-3 I.R.B. 327, which
extended the phase-in period described
in Notice 2018-72 through 2022. This
Notice further extends the phase-in
period described in Notice 2020-2
through 2024.
The Treasury Department and the IRS
continue to evaluate the section 871(m)
regulations and will take into account
comments already received, and welcome
any additional comments regarding tax
policy considerations, legal authority for,
and the IRS administrative feasibility of
any suggested modifications to the section
871(m) regulations. The Treasury Depart-
ment and the IRS intend to provide suffi-
cient time for taxpayers and withholding
agents to implement any changes to the
section 871(m) regulations.
III. EXTENSION OF THE PHASE-IN
YEAR FOR DELTA-ONE AND NON-
DELTA-ONE TRANSACTIONS
This section describes the extension
to the phased-in application of the sec-
tion 871(m) regulations to delta-one and
non-delta-one transactions. This Notice
does not apply to any transaction that is
a section 871(m) transaction pursuant to
§1.871-15(d)(1) (providing that before
January 1, 2017, a notional principal con-
tract (NPC) is a specified NPC if certain
factors are present).
The Treasury Department and the IRS
have determined that it is appropriate for
taxpayers and withholding agents to delay
certain provisions in the section 871(m)
regulations for non-delta-one transactions,
including transactions that are combined
transactions under §1.871-15(n). There-
fore, the Treasury Department and the
IRS intend to revise the effective/appli-
cability date for §1.871-15(d)(2) and (e)
to provide that these rules will not apply
to any payment made with respect to any
non-delta-one transaction issued before
January 1, 2025. As noted in Part I of
this Notice, the anti-abuse rule continues
to apply to the phased-in application of
the section 871(m) regulations, including
for the purpose of determining whether a
transaction is a delta-one transaction.
Notice 2016-76 provided that the IRS
will take into account the extent to which
the taxpayer or withholding agent made a
good faith effort to comply with the sec-
tion 871(m) regulations with respect to
delta-one transactions in 2017 and non-
delta-one transactions in 2018 when it
enforces the section 871(m) regulations.
As a result of extensions in Notice 2017-
42, Notice 2018-72, and Notice 2020-
2, the good faith effort standard applies
to (1) any delta-one transaction in 2017
through 2022, and (2) any non-delta-one
transaction that is a section 871(m) trans-
action pursuant to §1.871-15(d)(2) or (e)
in 2023. This Notice further extends the
periods during which the enforcement
standards provided by Notice 2020-2 will
apply. Consistent with this extension, the
IRS will take into account the extent to
which the taxpayer or withholding agent
made a good faith effort to comply with
the section 871(m) regulations in enforc-
ing the section 871(m) regulations for (1)
any delta-one transaction in 2017 through
2024, and (2) any non-delta-one transac-
tion that is a section 871(m) transaction
pursuant to §1.871-15(d)(2) or (e) in 2025.
Similarly, for purposes of the IRS’s
enforcement and administration of the
QDD rules in the section 871(m) regula-
tions and the relevant provisions of the
2017 QI Agreement and of a revised QI
Agreement that is anticipated to apply
beginning January 1, 2023 (2023 QI
Agreement), this Notice extends through
2024 the period during which the IRS will
take into account the extent to which the
QDD made a good faith effort to comply
with the section 871(m) regulations and
the relevant provisions of the 2017 QI
Agreement and the 2023 QI Agreement.
See Rev. Proc. 2017-15, sec. 11.01 (pro-
viding that the 2017 QI Agreement expires
after December 31, 2022). In addition, the
IRS is considering providing guidance
that a QDD will be considered to satisfy
the obligations that apply specifically to a
QDD under its QI Agreement(s) for years
before 2025 provided that the QDD makes
a good faith effort to comply with the rele-
vant provisions of the 2017 QI Agreement
and the 2023 QI Agreement, each to the
extent applicable to the QDD.
IV. EXTENSION OF THE SIMPLIFIED
STANDARD FOR DETERMINING
WHETHER TRANSACTIONS ARE
COMBINED TRANSACTIONS
Notice 2016-76 provided a simplified
standard for withholding agents to deter-
mine whether transactions entered into in
2017 are combined transactions. Specif-
ically, a withholding agent is required to
combine transactions entered into in 2017
for purposes of determining whether the
transactions are section 871(m) transac-
tions only when the transactions are over-
the-counter transactions that are priced,
marketed, or sold in connection with each
other. Withholding agents are not required
to combine any transactions that are listed
securities entered into in 2017.
Notice 2017-42, Notice 2018-72,
and Notice 2020-2 extended the period
during which this simplified standard for
combined transactions applies to include
2018 through 2022. This Notice further
extends the period during which this sim-
plified standard for combined transac-
tions applies to include 2023 and 2024.
Transactions that are entered into in 2017
through 2024 that are combined under
this simplified standard will continue to
be treated as combined transactions for
future years and will not cease to be com-
bined transactions as a result of applying
§1.871-15(n) or disposing of less than all
of the potential section 871(m) transac-
tions that are combined under this rule.
Transactions that are entered into in 2017
through 2024 that are not combined under
this simplified standard will not become
combined transactions as a result of

September 12, 2022 236 Bulletin No. 2022–37
applying §1.871-15(n) to these transac-
tions in future years, unless a reissuance
or other event causes the transactions to
be retested to determine whether they are
section 871(m) transactions. See §1.871-
15(g)(2) (providing that the delta of a
potential section 871(m) transaction gen-
erally is determined on the earlier of when
the transaction is (1) priced or (2) issued);
see also §1.871-15(a)(6) (defining the
term “issue” to include “an issuance as a
result of a deemed exchange pursuant to
section 1001”). This simplified standard
applies only to withholding agents and
does not apply to taxpayers that are long
parties to potential section 871(m) trans-
actions. As noted in Part I of this Notice,
the anti-abuse rule continues to apply to
the phased-in application of the section
871(m) regulations, including for the
purpose of determining whether multiple
transactions should be combined.
V. EXTENSION OF PHASE-IN RELIEF
FOR QUALIFIED DERIVATIVES
DEALERS
Section 1.871-15T(q)(1) of the 2015
temporary regulations provided that when
a QDD received a dividend or dividend
equivalent payment and the QDD was
contractually obligated to make an offset-
ting dividend equivalent payment on the
same underlying security in an amount
that was less than the dividend and div-
idend equivalent amount received, the
QDD would be liable for tax under section
871(a) or section 881 for the difference.
The 2015 final regulations provided that
a withholding agent who made a payment
of a dividend to a qualified intermediary
acting as a QDD was not required to with-
hold on that payment if the withholding
agent reliably associated the payment with
a valid qualified intermediary withholding
form containing a certification described
in §1.1441-1(e)(3)(ii)(E). See §1.1441-
1(b)(4)(xxii) of the 2015 final regulations.
Comments requested that the Treasury
Department and the IRS adopt a different
method of determining a QDD’s tax liabil-
ity. Those comments generally requested
that this method be based on the QDD’s
net delta exposure for each underlying
security. The Treasury Department and
the IRS agreed that the net delta exposure
method was an administrable and accurate
method for a QDD to determine its resid-
ual exposure to underlying securities, and
the 2017 final regulations adopted the net
delta exposure method.
In adopting the net delta exposure
method, the Treasury Department and the
IRS were concerned that the exemption
from withholding on dividends paid to a
QDD, when combined with the net delta
exposure method, could result in U.S.
source dividends escaping U.S. tax com-
pletely in certain circumstances. There-
fore, the 2017 final regulations revised
§§1.871-15(q)(1) and 1.1441-1(b)(4)
(xxii) to provide that a QDD remains liable
for tax under section 881(a)(1) and subject
to withholding under chapters 3 and 4 on
dividends. However, to allow taxpayers
time to implement the net delta exposure
method, the 2017 QI Agreement and the
2017 final regulations provided that div-
idends and dividend equivalents received
by a QDD in its equity derivatives dealer
capacity in 2017 will not be subject to tax
under section 881(a)(1) or subject to with-
holding under chapters 3 and 4.
Notice 2017-42, Notice 2018-72, and
Notice 2020-2 announced that the Trea-
sury Department and the IRS intend to
amend §§1.871-15(q)(1) and (r)(3), and
1.1441-1(b)(4)(xxii)(C) to provide that a
QDD will not be subject to tax on divi-
dends and dividend equivalents received
in 2017 through 2022 in its equity deriv-
atives dealer capacity or withholding on
those dividends (including deemed div-
idends). This Notice announces that the
Treasury Department and the IRS intend
to amend those provisions to provide that
a QDD will not be subject to tax on div-
idends and dividend equivalents received
in 2023 and 2024 in its equity derivatives
dealer capacity or withholding on those
dividends (including deemed dividends)
as well.
Section 4.01(1) of Rev. Proc. 2017-15
provides that a QDD will be required to
compute its section 871(m) amount using
the net delta exposure method beginning
in 2018. Notice 2017-42, Notice 2018-72,
and Notice 2020-2 provided that a QDD
would be required to compute its sec-
tion 871(m) amount using the net delta
exposure method beginning in 2023.
This Notice provides that a QDD will be
required to compute its section 871(m)
amount using the net delta exposure
method beginning in 2025.
A QDD will remain liable for tax under
section 881(a)(1) on dividends and divi-
dend equivalents that it receives in any
capacity other than as an equity deriva-
tives dealer, and on any other U.S. source
FDAP payments that it receives (whether
or not in its equity derivatives dealer
capacity). In addition, a QDD is respon-
sible for withholding on dividend equiva-
lents it pays to a foreign person on a sec-
tion 871(m) transaction, whether acting in
its capacity as an equity derivatives dealer
or otherwise.
Finally, section 10.01(C) of the 2017
QI Agreement provides that: “For calen-
dar year 2017, a QDD is not required to
perform a periodic review with respect to
its QDD activities (as otherwise required
by section 10.04 of this Agreement) or
provide the factual information specified
in Appendix I.” Notice 2017-42, Notice
2018-72, and Notice 2020-2 provided that
a QDD is not required to perform a peri-
odic review with respect to its QDD activ-
ities for 2017 through 2022. This Notice
provides that a QDD is not required to
perform a periodic review with respect to
its QDD activities for 2023 or 2024. Trea-
sury and the IRS anticipate incorporating
into the 2023 QI Agreement the waiver
of a QDD’s periodic review and the other
transitional provisions for QDDs for 2023
and 2024.
VI. EXTENSION OF TRANSITION
RULES FROM NOTICE 2010-46
Notice 2018-5, Notice 2018-72, and
Notice 2020-2 provided that notwith-
standing the preamble to the 2017 regu-
lations, withholding agents may apply the
QSL transition rules described in Notice
2010-46, Part III, for payments made
in 2018 through 2022. This Notice pro-
vides that withholding agents may also
apply the QSL transition rules described
in Notice 2010-46, Part III, for payments
made in 2023 and 2024.
VII. TAXPAYER RELIANCE
Before the promulgation of the amend-
ments to the section 871(m) regulations or

Bulletin No. 2022–37 237 September 12, 2022
the issuance of other guidance, taxpayers
may rely on the provisions of this Notice
regarding the proposed amendments
described in sections III and V. Withhold-
ing agents may rely on the simplified stan-
dard for determining whether transactions
are combined transactions as described in
section IV and may apply the QSL transi-
tion rules described in section VI.
VIII. DRAFTING INFORMATION
The principal authors of this Notice
are Karen Walny and Peter Merkel of the
Office of Associate Chief Counsel (Inter-
national). For further information regard-
ing this Notice, contact Karen Walny or
Peter Merkel at (202) 317-6938 (not a
toll-free number).

Bulletin No. 2022–37 i September 12, 2022
Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus,
if an earlier ruling held that a principle
applied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.
Distinguished describes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).
Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transactions.
This term is most commonly used in a ruling
that lists previously published rulings that
are obsoleted because of changes in laws or
regulations. A ruling may also be obsoleted
because the substance has been included in
regulations subsequently adopted.
Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the
new ruling does more than restate the sub-
stance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
Suspended is used in rare situations
to show that the previous published rul-
ings will not be applied pending some
future action such as the issuance of new
or amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.
Abbreviations
The following abbreviations in current
use and formerly used will appear in
material published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.
—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.

September 12, 2022 ii Bulletin No. 2022–37
Numerical Finding List
1
Bulletin 2022–37
Announcements:
2022-14, 2022-31 I.R.B. 136
2022-15, 2022-31 I.R.B. 136
2022-16, 2022-33 I.R.B. 144
2022-17, 2022-35 I.R.B. 179
2022-18, 2022-36 I.R.B. 190
2022-19, 2022-36 I.R.B. 191
Notices:
2022-29, 2022-28 I.R.B. 66
2022-30, 2022-28 I.R.B. 70
2022-31, 2022-29 I.R.B. 85
2022-32, 2022-32 I.R.B. 137
2022-33, 2022-34 I.R.B. 147
2022-34, 2022-34 I.R.B. 150
2022-35, 2022-36 I.R.B. 184
2022-36, 2022-36 I.R.B. 188
2022-37, 2022-37 I.R.B. 234
Proposed Regulations:
REG-130975-08, 2022-28 I.R.B. 71
REG 130675-17, 2022-30 I.R.B. 104
Revenue Procedures:
2022-25, 2022-27 I.R.B. 3
2022-28, 2022-27 I.R.B. 65
2022-26, 2022-29 I.R.B. 90
2022-32, 2022-30 I.R.B. 101
2022-30, 2022-31 I.R.B. 112
2022-29, 2022-33 I.R.B. 141
2022-34, 2022-33 I.R.B. 143
Revenue Rulings:
2022-12, 2022-27 I.R.B. 1
2022-13, 2022-30 I.R.B. 99
2022-14, 2022-31 I.R.B. 110
2022-15, 2022-35 I.R.B. 152
2022-17, 2022-36 I.R.B. 182
Treasury Decisions:
9963, 2022-34 I.R.B. 145
9964, 2022-35 I.R.B. 172
9965, 2022-37 I.R.B. 192
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2021–27 through 2021–52 is in Internal Revenue Bulletin
2021–52, dated December 27, 2021.

Bulletin No. 2022–37 iii September 12, 2022
Finding List of Current Actions on
Previously Published Items
1
Bulletin 2022–37
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2021–27 through 2021–52 is in Internal Revenue Bulletin
2021–52, dated December 27, 2021.

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